Joint Venture of Mongolian Uranium Projects

Uranerz Energy Corporation
Suite 1410, 800 West Pender Street
Vancouver, B.C.
V6C 2V6
604-689-1659

February 17, 2006

Mr. Michael Collins
President
Bluerock Resources Ltd.,
890 – 885 Dunsmuir Street
Vancouver, B.C.
V6C 1N5

Re: Joint Venture of Mongolian Uranium Projects

Dear Mr. Collins:

The purpose of this letter ("Letter Agreement") is to set forth binding contract terms between Uranerz Energy Corporation, a Nevada corporation ("Uranerz") and Bluerock Resources Ltd., a British Columbia corporation ("BRD"). The properties subject to this Letter Agreement are ownership interests in Exploration Licenses, which have received approval with the Office of Geology and Mining Cadastre (OGMC), a department of the Mineral Resource Authority of Mongolia (MRAM) located in Mongolia, known collectively as the Mongolian Projects, all as described more specifically in Attachment 1 hereto (the “Projects” or "Properties").

1.      Grant of Exclusive Right to Acquire Interest in Properties and Enter into Joint Venture Agreement. Uranerz hereby grants to BRD the exclusive right to acquire an undivided 55% interest in the Properties, subject to the terms and conditions of this Letter Agreement and a Joint Venture Agreement, which shall be based upon the Rocky Mountain Mineral Law Foundation's Model Exploration, Development and Mine Operating Agreement, 1996 Edition ("Form 5A"), as more specifically described in paragraph 4 below. The “Manager” shall be as defined in Form 5A. Until the formation of the Joint Venture, the manager of the work program shall be BRD.

To earn a 55% interest in the Properties and the Joint Venture, BRD must make the payments set forth in section 2, and make the payments and incur the expenditures referred to in section 3.

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2.      BRD will make a $5,000 (US) payment to Uranerz on signing this Letter of Agreement with Uranerz. BRD will make a $30,000 (US) payment to Uranerz and issue 150,000 shares of BRD to Uranerz at the later date of the following; a 30 day due diligence period, or 10 days after the review of the report currently being written on the green fields projects, or acceptance for filing by the TSX Venture Exchange. Provided Uranerz can show it holds good title to the Properties, the payment of $30,000 (US) and the issuance of 150,000 shares of BRD to Uranerz must be made by March 31, 2006 or this agreement becomes null and void and BRD forfeits the payment of $5000 (US). If Uranerz cannot show it holds good title to the Properties by March 31, 2006, the US$5,000 deposit will be paid back to BRD.

3.      BRD Payments and Work Expenditures. In order to maintain this Letter Agreement in effect, BRD must make the payments and incur the work expenditures described in paragraphs 3.A and 3.B below, respectively. If BRD fails in either case to do so, the sole effect shall be termination of this Letter Agreement as of the applicable deadline, except for the taxes and any government maintenance fees due within 120 days of signing this Letter Agreement for the projects within the Properties, except for the first annual payment due to Uranerz by October 18, 2006 and except for the first $400,000 work expenditure, as provided in paragraph 3.B below. By signing this Letter Agreement BRD guarantees that it will pay the taxes and any government maintenance fees due within 120 days of signing this Letter Agreement for the projects within the Properties and will pay to Uranerz the first lease payment by October 18, 2006 and will complete the first $400,000 work expenditure by October 18, 2006. Uranerz will produce a table outlining the taxes and lease fees and payment dates due over the first 3 years of the proposed option period

A.      Payments: The following payments to Uranerz shall be due on or before the following dates:

          Uranerz shall designate an account to which such payments may be made by wire transfer. A payment shall be deemed to have been made timely by BRD if its wire transfer is initiated or its cheque is transmitted by express courier on or before the applicable due date. Until the parties enter into a Joint Venture Agreement pursuant to paragraph 4 below, BRD shall have sole liability for, and the Manager shall have responsibility for, the annual taxes and government maintenance fees that may become due to the various levels of government regarding the Properties. BRD’s liability share be capped to $32,000 for 2006 and

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$47,000 for 2007 unless the increase is related to an increase in the government mandated fees. Uranerz will be liable for any other amount in excess of the yearly cap.

B.      Work Expenditures: BRD shall expend the following amounts by each of the following dates on Exploration (as defined in Form 5A) operations on or for the benefit of the Properties:

          Excess amounts expended in any year shall credit against subsequent years' requirements only until such time as BRD has expended $3,000,000 and earned a 55.0 percent Participating Interest in the Joint Venture. Failure to meet the work commitments in any year causes forfeiture of a 100% interest in the project back to Uranerz. Once BRD has expended $3,000,000 and earned a 55% Participating Interest in the Joint Venture, Uranerz may elect to spend $300,000 to earn back a 6% interest in the project for a 51% Participating Interest in the Joint Venture. Failure by BRD to meet the work commitments in any year causes forfeiture of a 100% interest in the project back to Uranerz.

          After the second anniversary BRD can elect to remove Properties from this Agreement. BRD is required to give 60 days notice of intent to do so. Properties may be removed from this Agreement at any time if there is mutual agreement to do so. All payments and work requirements will remain the same regardless of the addition or subtraction of projects from this Agreement.

           If this Letter Agreement terminates within 60 days of the due dates for any taxes or other contractual payments related to the Properties or within 90 days of the deadline for any maintenance fees for Exploration Licenses within the Properties, BRD shall be obligated to make those payments or pay those taxes, as applicable. No Properties shall be allowed to lapse while this Letter Agreement remains in effect, unless both BRD and Uranerz approve of same in writing. For purposes of determining what charges and costs will credit against the above expenditure requirements, the parties shall utilize the Accounting Procedures attached as Exhibit B to Form 5A, with the exception that the charge under Subsection 2.13(a)(i) of those accounting procedures for BRD’s office and general and administrative expenses shall be a flat fee of 10.0% of all Allowable Costs (as defined in those Accounting Procedures).

C.      Responsibility for Reclamation and Environmental Conditions: Unless and until the parties enter into a Joint Venture Agreement pursuant to paragraph 4

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below, the Manager shall have sole responsibility for reclamation of disturbances of the Properties caused by its Exploration operations pursuant to paragraph 3.B above. As project manager, BRD will post a $10,000 bond with a mutually agree third party as a guarantee of the reclamation and remediation of any work done by the Manager or its representatives. If this option agreement is terminated prior to the formation of a Joint Venture the bond shall be made available for pay of remediation work for a period of one calendar year from the termination of the agreement. Any remaining moneys shall be returned to BRD at the end of the one year period. If and at such time as the parties enter into the Joint Venture Agreement pursuant to paragraph 4 below, the responsibility for the environmental conditions of the Properties, regardless of when created, shall be borne by the Joint Venture, unless BRD continues to work towards a larger Participating Interest, in which case the Manager shall continue to have sole responsibility for reclamation of disturbances of the Properties caused by its Exploration operations until such time as the parties enter into the Joint Venture Agreement with determined Participating Interests.

4.      Conditions for Entering into Joint Venture Agreement and BRD's Retention of 55% Interest. At such time as BRD has expended $3,000,000 on or before October 18, 2009 and Uranerz has elected not to expend $300,000 on the Property on or before July 31, 2010, or waives its right to do so:

A.      The parties shall enter into a Joint Venture Agreement, based upon Form 5A, which shall be modified so as to be consistent with the provisions of this Letter Agreement and to incorporate the terms contained in Attachment 2 hereto;

B.      BRD shall contribute as its Initial Contribution pursuant to Section 5.1 of Form 5A its undivided 55% interest in the Properties;

C.      Uranerz shall contribute as its Initial Contribution pursuant to Section 5.1 of Form 5A its undivided 45% interest in the Properties; and

D.      This Letter Agreement shall terminate, and all subsequent operations on and for the benefit of the Properties shall be governed by the Joint Venture Agreement.

          If BRD fails to expend at least $3,000,000 by October 18, 2009, this Letter Agreement shall terminate as of that date.

5.      Following BRD’s earning a 55% interesting in the project, Uranerz may elect to expend $300,000 on or before July 31, 2010, to earn back an additional 6% interest, (for a total 51% interest).

A.      The parties shall enter into a Joint Venture Agreement, based upon Form 5A, which shall be modified so as to be consistent with the provisions of this Letter Agreement and to incorporate the terms contained in Attachment 2 hereto;

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B.      BRD shall contribute as its Initial Contribution pursuant to Section 5.1 of Form 5A its undivided 49% interest in the Properties;

C.      Uranerz shall contribute as its Initial Contribution pursuant to Section 5.1 of Form 5A its undivided 51% interest in the Properties; and

D.      This Letter Agreement shall terminate, and all subsequent operations on and for the benefit of the Properties shall be governed by the Joint Venture Agreement.

6.      Underlying Royalty. BRD and Uranerz understand that some or all of the Properties may be burdened by a royalty, pursuant to the rules and mining laws of Mongolia. The Joint Venture shall make the necessary deductions for these royalty payments in proportion to their respective Participating Interests before any distributions to the parties.

7.      Representations and Warranties.

A.      Uranerz and BRD hereby incorporate by reference the Participants' representations and warranties contained in Section 3.1 of Form 5A.

B.      Uranerz and BRD hereby represent and warrant that they have received and reviewed full and complete copies of Form 5A, including all Exhibits thereto.

8.      Insurance and Indemnity.

A.      Liability Insurance. The Manager shall, at BRD’s sole cost, keep in force during this Letter Agreement term a policy of commercial general liability insurance covering property damage and liability for personal injury occurring on or about the Property, with limits in the amount of at least One Million Dollars ($1,000,000) per occurrence for injuries to or death of person, and Five Hundred Thousand Dollars ($ 500,000) per occurrence for property damage.

B.      Form and Certificates. The policy of insurance required to be carried by the Manager pursuant to this Section shall be with a company of comparable size and capabilities commensurate with industry standards for insuring similar operations within the country of Mongolia. Such policy shall name Uranerz as an additional insured and contain a cross liability and severability endorsement. The Manager’s insurance policy shall also be primary insurance without right of contribution from any policy carried by Uranerz.

C.      Waiver of Subrogation. BRD and Uranerz each waives any and all rights of recovery against the other, and against the partners, members, officers, employees, agents and representatives of the other, for loss of or damage to the

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Properties or injury to person to the extent such damage or injury is covered by proceeds received under any insurance policy carried by Uranerz or BRD and in force at the time of such loss or damage.

D.      Waiver and Indemnification. Uranerz shall not be liable to BRD and BRD waives all claims against Uranerz for any injury to or death of any person or damage to or destruction of any personal property or equipment or theft of property occurring on or about the Property or arising from or relating to business conducted on the Property.

9.      After Acquired Properties

          "After Acquired Properties" means any and all mineral interests located, granted or acquired by or on behalf of either of the parties hereto during the currency of this Agreement which are located within 3 km of Properties currently held within the option agreement with the exception of License 10241X.

          The parties covenant and agree, each with the other, that any and all After Acquired Properties shall be subject to the terms and conditions of this Agreement and shall be added to and deemed, for the purposes hereof, to be included in the Property.

10.     Liens and Notices of Non Responsibility. The Manager agrees to keep the Property at all times free and clear of all liens, charges and encumbrances of any and every nature and description done made or caused by the Manager.

11.     "Dollars" and "$". All references to "Dollars" and "$" are to United States Dollars.

12.     Force Majeure. The provisions of Section 19.7 of Form 5A are incorporated herein by reference with respect to obligations of BRD an