Exploration and Option to Enter Joint Venture Agreement North Sleeper Project

     This Exploration and Option to Enter Joint Venture Agreement (“ Agreement ”) is made by and between C3 Resources, Inc., a Delaware corporation (“ C3 ”), and Montezuma Mines Inc., a Nevada corporation (“ Montezuma ”) on the
_________
day of
________
, 2009 (“ Effective Date ”).

A. C3 leases the S310 unpatented mining claims which are located in Humboldt County, Nevada, and more particularly described in Exhibit A attached to and by this reference incorporated in this Agreement.

B. C3 and Montezuma are parties to the letter of intent dated April 7, 2009. The parties desire to formalize the agreement represented by the letter of intent. The letter of intent is superseded and replaced by this Agreement.

     Now, therefore, in consideration of their covenants and promises in this Agreement, C3 and Montezuma agree:

1. Definitions. The following defined terms, wherever used in this Agreement, shall have the meanings described below:

      1.1 “ Agreement Year ” means a one year period ending on an anniversary of the Effective Date.

      1.2 “ Area of Interest ” means only the lands within one (1) mile from the exterior boundaries of the unpatented mining claims which constitute the Property as of the Effective Date. This Section shall apply only to interests and rights which are in the Area of Interest and to any unpatented mining claims located by a party to the extent any portion of any such unpatented mining claims are within the Area of Interest. This Agreement shall not apply to any fee lands or interests in fee lands or to any unpatented mining claims acquired by the parties to the extent such fee lands or unpatented mining claims lie outside of the Area of Interest, nor shall this Agreement apply to the Sleeper Property itself to the south of the S310 claims.

      1.3 “Expenditures ” means all costs incurred on or for the benefit of the Property for Exploration and Development Work pursuant to this Agreement, including but not limited to: (a) salaries, wages and costs of benefits, labor overhead expenses and travel and living expenses for Montezuma's employees employed directly on or for the benefit of the Property; (b) costs and expenses of equipment, machinery, materials and supplies; (c) all payments to contractors for work on or for the benefit of the Property

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including all reclamation and remediation operations; (d) costs of sampling, assays, metallurgical testing and analyses and other costs incurred to determine the quantity and quality of minerals on the Property; (e) costs incurred to apply for and obtain approvals, consents, licenses, permits and rights-of-way and other similar rights in connection with activities on the Property; (f) costs and expenses of performance of annual assessment work and the filing and recording of proof of performance of annual assessment work, if required to be performed; (g) costs and expenses of payment of federal annual mining claim maintenance fees and the filing and recording of proof of payment of federal annual mining claim maintenance fees; (h) all taxes and assessments levied against the Property; (i) costs incurred in the examination of and curative actions taken concerning title to the Property; (j) costs incurred to acquire new Property in the area governed by this Agreement; (k) a reasonable portion of the salary of John Hogg which is proportionate to the amount of time he expends on Exploration and Development Work; and (l) a management fee equal to ten percent (10%) of Expenditures incurred up to $200,000 of expenditures and then a management fee equal to five percent (5%) thereafter; (m) all payments to C3 and CARACOL, other than pursuant to this paragraph (k).

      1.4 “ Exploration and Development Work ” means all activities directed toward ascertaining the existence, location, quantity, quality, or commercial value of deposits of minerals on the Property.

      1.5 “ C3 ” means C³ Resources, Inc., a Delaware corporation, and its successors and assigns.

      1.6 “ Montezuma ” means Montezuma Mines Inc., a Nevada corporation, and its successors and assigns.

      1.7 “ Property ” means the unpatented mining claims (including all appurtenances) described in Exhibit A, or on any exhibit or schedule which is part of Exhibit A, and all other easements, licenses, mineral interests, rights-of-way, surface use rights and interests in real property which are acquired and held subject to this Agreement, including any of the same acquired in the Area of Interest in accordance with Section 1.2.

2. C3’s Representations and Warranties. C3 makes the following covenants, representations and warranties all of which shall survive termination of this Agreement and Montezuma’s exercise of its option to enter Operating Agreement in accordance with Section 8:

      2.1 C3 represents that it is in possession of the Property, and C3 has delivered to Montezuma all information concerning title to the Property in C3’s possession or control.

      2.2 With respect to the unpatented mining claims included in the Property, except as provided in Exhibit A and subject to the paramount title of the United States, C3 represents as follows: (a) the unpatented mining claims were, to the best of its knowledge, properly laid out and monumented; (b) location notices and certificates were,

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to the best of its knowledge, properly recorded and filed with appropriate governmental agencies; (c) if required to have been performed under applicable law, the work believed in good faith by C3 to comply with the annual assessment work requirements under applicable federal laws and regulations has been performed; (d) all affidavits of annual assessment work, notices of intent and other filings required to maintain the claims in good standing have been, to the best of its knowledge, properly and timely recorded or filed with appropriate governmental agencies; (e) the claims are free and clear of defects, liens and encumbrances arising from the actions of C3 and, to the best of its knowledge, free and clear of defects, liens and encumbrances arising from the actions of third parties; (f) the Federal annual mining claim maintenance and rental fees necessary to assure the uninterrupted and continued validity of unpatented mining claims until September 1, 2009, have been paid timely to the Bureau of Land Management; (g) all assessment work, notices of intent, fees and filings required by the laws of the State of Nevada have been, to the best of its knowledge, timely and properly paid or made to hold the unpatented mining claims through September 1, 2009; and (h) C3 has no knowledge of conflicting mining claims. Nothing in this Section 2.2, however, shall be deemed to be a representation or a warranty that any of the unpatented mining claims contains a discovery of minerals.

      2.3 Except as described in Exhibit A, C3 represents that with respect to the Property there are no pending or, to its knowledge, threatened actions, administrative investigations, suits, claims or proceedings.

      2.4 C3 has made available for inspection by Montezuma all geologic, engineering and other data in its possession pertaining to the Property. C3 makes no representation concerning the accuracy of any such information or with respect to the nature, quality, extent or any other characteristic of the mineral resources, if any, located on the Property.

      2.5 C3 represents and warrants that it is a corporation duly incorporated and in good standing in its jurisdiction of incorporation and that it is qualified to do business and is in good standing in the states where necessary in order to carry out the purposes of this Agreement.

      2.6 C3 represents and warrants that it: (a) has the capacity to enter into and to perform this Agreement and all corporate and other actions required to authorize C3 to enter into and perform this Agreement have been properly taken; (b) will not breach any other agreement or arrangement by entering into or performing this Agreement; and (c) has properly executed this Agreement and that this Agreement is C3’s valid and binding legal obligation enforceable in accordance with its terms.

      2.7 C3 represents and warrants that it is not on the Specially Designated National & Blocked Persons List of the Office of Foreign Assets Control of the United States Treasury Department and is not otherwise blocked or banned by any foreign assets office rule or any other law or regulation, including the USA Patriot Act or Executive Order 13224.

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3. Montezuma’s Representations and Warranties. Montezuma makes the following covenants, representations and warranties all of which shall survive termination of this Agreement and Montezuma’s exercise of its option to enter Operating Agreement in accordance with Section 8:

      3.1 Montezuma represents and warrants that it is a corporation duly incorporated and in good standing in its jurisdiction of incorporation and that it is qualified to do business and is in good standing in the states where necessary in order to carry out the purposes of this Agreement.

      3.2 Montezuma represents and warrants that it: (a) has the capacity to enter into and to perform this Agreement and all corporate and other actions required to authorize Montezuma to enter into and perform this Agreement have been properly taken; (b) will not breach any other agreement or arrangement by entering into or performing this Agreement; and (c) has properly executed this Agreement and that this Agreement is Montezuma’s valid and binding legal obligation enforceable in accordance with its terms.

      3.3 Montezuma represents and warrants that it is not on the Specially Designated National & Blocked Persons List of the Office of Foreign Assets Control of the United States Treasury Department and is not otherwise blocked or banned by any foreign assets office rule or any other law or regulation, including the USA Patriot Act or Executive Order 13224.

4. Grant of Exploration Right and Possession. C3 gives and grants to Montezuma during the term of this Agreement the right to prospect and explore for minerals on the Property, subject to the terms of this Agreement. The foregoing grant from C3 to Montezuma shall be exclusive to the extent C3 has the contractual or legal authority to grant such an exclusive right. To the extent that C3 has surface, access and water rights relating to the Property and to the extent permitted by law, C3 grants such rights to Montezuma. Subject to the terms of this Agreement, during the term of this Agreement Montezuma shall have the exclusive right to enter at any and all times upon the Property to undertake any and all types of mineral exploration and development work.

5. Term and Initial Payment. The term of this Agreement shall begin on the Effective Date and shall continue to and until the sixth anniversary of the Effective Date, unless sooner accelerated, terminated or extended as provided in this Agreement. Montezuma shall pay C3 $15,000 upon signing.

provided in Section 14; and (c) extend the time for performance of its obligations as provided in Section 16, Montezuma agrees to incur Expenditures for Exploration and Development Work in accordance with the following schedule:

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     Montezuma’s obligation for Expenditures for Exploration and Development Work on or before the first anniversary of the Effective Date is a firm commitment and unconditional and includes Montezuma’s obligation to pay the Federal annual mining claim maintenance fees for the unpatented mining claims which comprise the Property for the annual assessment year from September 1, 2009, to September 1, 2010.

     Expenditures incurred by Montezuma during any annual period in excess of the prescribed Expenditures for the annual period shall be credited in Montezuma’s favor against subsequent Expenditure obligations. If during the first year of this Agreement Montezuma does not incur Expenditures in the amount of Fifty Thousand Dollars ($50,000), Montezuma, shall pay to C3 an amount equal to the difference between Fifty Thousand Dollars ($50,000) and the Expenditures actually incurred by Montezuma during the first year of this Agreement. If a shortfall of exploration expenditures occurs in any contract year, Montezuma shall pay the amount of the shortfall to C3 to continue the contract into the next year. Montezuma shall provide to C3 not less frequently than annually a description of the Expenditures made by Montezuma, and C3 shall have the right, during business hours and on reasonable advance notice to Montezuma, to audit at its own expense and inspect Montezuma’s records relating to such Expenditures.

     If Montezuma elects to continue this Agreement in effect, then not less than thirty (30) days before each anniversary date of the Effective Date, Montezuma shall deliver to C3 a work plan and budget describing Montezuma’s proposed Exploration and Development Work Expenditures for the next Agreement Year. Subject to C3’s right to advise Montezuma and to comment on Montezuma’s plans for operations on the Property, Montezuma shall have sole discretion to determine the extent of its work on the Property and the time or times for beginning, continuing or resuming operations. All activities carried out by Montezuma under this Agreement shall conform in all respects to the laws and regulations of the United States and the State of Nevada.

     Montezuma shall honor any other commitments in C3’s lease of the S310 claims with CARACOL during the period of this lease.

7. Conduct of Work. The party responsible for conduct of Exploration and Development Work under this Agreement, shall conduct such Exploration and Development Work in accordance with all applicable federal, state and local laws, regulations and ordinances, including such laws, regulations and ordinances intended to protect or preserve the environment and to

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provide for reclamation of surface disturbances resulting from the parties’ operations under this Agreement.

Exploration and Development Work Expenditure obligations under Section 6, C3 grants to Montezuma, and Montezuma shall have, the option and right, exercisable in Montezuma’s sole and exclusive discretion, to earn and vest an undivided fifty-five percent (55%) interest in the Property and to form a joint venture (the “ Joint Venture ”) for the management and ownership of the Property. When Montezuma has completed its initial Exploration and Development Work obligation under Section 6, Montezuma shall be deemed to have exercised its right to enter into the Joint Venture with C3 on the Property, unless Montezuma informs C3 that Montezuma has elected to not exercise its option and right to enter into the Joint Venture. Montezuma shall deliver notice to C3 of Montezuma’s completion of its initial Exploration and Development Work Expenditure obligations within sixty (60) days after such completion. At any time during the term of this Agreement, Montezuma shall have the right to accelerate performance of its Exploration and Development Work obligations.

     8.1.1 C3’s initial participating interest in the Joint Venture shall be forty-five percent (45%) and Montezuma’s initial participating interest in the Joint Venture shall be fifty-five percent (55%).

     8.1.2 Montezuma’s initial contribution to the Joint Venture shall be valued at Three Million Dollars ($3,000,000). C3’s initial contribution to the Joint Venture shall be valued at Two Million Four Hundred Fifty-Four Thousand Five Hundred Forty-Five Dollars ($2,454,545).

      8.2 Montezuma’s Option to Acquire Additional Participating Interest. At any time within ninety (90) days following Montezuma’s performance of its Exploration and Development Work Expenditure obligations under Section 6, Montezuma shall have the option and right to elect to increase its participating interest in the Joint Venture by an additional ten percent (10%) to a total of sixty-five percent (65%) by agreeing to prepare and bear the costs of preparation of a feasibility report for the Property (the “ Additional Contribution ”). If Montezuma does not timely deliver notice of its exercise of the foregoing option, Montezuma’s option shall terminate. The feasibility report must be based on sound geological and engineering principles and mine operating criteria generally acceptable under United States mining industry practices and standards for projects in similar operating environments and in a form acceptable to commercial lending institutions for the purpose of financing mine construction.

     During its performance of the Additional Contribution, Montezuma shall incur not less than Five Hundred Thousand Dollars ($500,000) in Exploration and Development Work Expenditures during each Agreement Year and Montezuma shall bear all costs of maintaining the Property.

     If after Montezuma’s performance of its initial Exploration and Development Work Expenditure under Section 6 and before Montezuma exercises the option and right described in this Section C3 contributes to Exploration and Development Work Expenditures, Montezuma

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shall within five (5) business days following its election to exercise the option and right, reimburse C3 for its contributions.

     If Montezuma elects to increase its interest in the Joint Venture to sixty-five percent (65%) and performs its Additional Contribution, for purposes of calculating dilution, Montezuma’s initial contribution shall be the sum of Three Million Dollars ($3,000,000) plus the cost of preparation of the feasibility report. In such case, C3 s initial contribution shall be deemed to be the amount equal to Montezuma’s initial contribution, as determined in accordance with the forgoing sentence, multiplied by 35/65. If Montezuma does not complete the Additional Contribution on or before four (4) years after Montezuma’s delivery of notice of its election to increase its participating interest Montezuma’s right to increase its participating interest shall terminate, its participating interest shall remain fifty-five percent (55%) and its initial contribution to the Joint Venture shall be valued at Three Million Dollars ($3,000,000) and C3’s initial contribution to the Joint Venture shall be valued at Two Million Four Hundred Fifty-Four Thousand Five Hundred Forty-Five Dollars ($2,454,545).

      8.3 C3’s Option to Acquire Additional Participating Interest. If Montezuma does not elect, or elects and fails, to increase its participating interest, in accordance with Section 8.2, C3 shall have the option and right to elect within 90 days therefrom to increase its participating interest by ten percent (10%) to a total of fifty-five percent (55%) by agreeing to prepare and bear the cost of a feasibility report for the Property under the terms applicable to Montezuma’s option to increase its participating interest in accordance with Section 8.2. If C3 does not timely deliver notice of its exercise of its option, C3’s option shall terminate.

     If C3 elects to earn an additional ten percent (10%) participating interest, C3 must complete the feasibility report within four (4) years following the date of delivery of its election to increase its participating interest. If C3 completes the report its initial contribution, for purposes of calculating dilution, shall be the sum of Two Million Four Hundred Fifty-Four Thousand Five Hundred Forty-Five Dollars ($2,454,545) plus the cost of preparation of the feasibility report. In such case, Montezuma’s initial contribution shall be deemed to be the amount equal to C3’s initial contribution, as determined in accordance with the forgoing sentence, multiplied by 45/55.

     If C3 does not complete the feasibility report within four (4) years after its delivery of notice of its election to increase its participating interest, C3’s right to increase its participating interest shall terminate and the parties’ participating interests shall remain Montezuma fifty-five percent (55%) and C3 forty-five percent (45%). In such event, Montezuma’s initial contribution shall be valued at Three Million Dollars ($3,000,000) and C3’s initial contribution shall be valued at Two Million Four Hundred Fifty-Four Thousand Five Hundred Forty-Five Dollars ($2,454,545).

      8.4 Montezuma’s Option to Acquire Additional Participating Interest Under Operating Agreement. If Montezuma does not elect to increase its participating interest by an additional ten percent (10%) as provided in Section 8.2, and if C3 does not elect to increase its participating interest by an additional ten percent (10%) as provided in Section 8.3, the parties shall form the Joint Venture and shall execute and deliver the agreement for the formation and operation of the Joint Venture (the “ Operating Agreement ”).

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     During the first three (3) years following the effective date of the Operating Agreement, Montezuma shall have the option and right to elect to increase its participating interest by an additional ten percent (10%) to a total of sixty-five percent (65%) by agreeing to prepare and bear the cost of preparation of a feasibility report for the Property. If Montezuma exercises its option, it must complete the feasibility report within two (2) years from the date of delivery of notice of its election. If during the two (2) year period Montezuma proposes an annual work plan and budget of less than Five Hundred Thousand Dollars ($500,000) for Exploration and Development Work Expenditures, C3 may notify Mon