“ Affiliate ”shall have the meaning ascribed thereto in the Securities Act;

“ Agreement ”means this subscription agreement including the Schedules attached hereto and any instrument amending this Agreement and “ hereof ”, “ hereto ”, “ hereunder ” and similar expressions mean and refer to this Agreement and not to a particular Article, Section, Subsection or Paragraph;

“ Audited Financial Statements ” means the comparative audited consolidated financial statements of the Company for the years ended December 31, 2007 and December 31, 2006;

“ Authority ”and “ Authorities ” means any (i) multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, securities commission (including the Securities Commissions), central bank, court, tribunal, arbitral body, commission, board, bureau or agency, domestic or foreign, (ii) any subdivision, agent, commission, board, or authority of any of the foregoing, or (iii) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing, and includes a stock exchange and any other self-regulatory authority;

“ Board of Directors ” means the board of directors of the Company;

;“ Business Day ” means any day which is not a Saturday, a Sunday or a day on which banks are generally closed for business in Denver, Colorado or London, England;

“ Claims ”means all losses, damages, expenses, Liabilities, claims and demands of whatever nature or kind, including all reasonable legal fees and disbursements;

“ Closing ”means the completion of the issue and delivery by the Company and the acquisition by Hochschild of the Purchased Shares pursuant to this Agreement;

“ Closing Date ” has the meaning given to it in Section 2.5;

“ Closing Time ”has the meaning given to it in Section 2.5;

“ Company ”has the meaning given to it in the preamble hereto;

“ Company Indemnities ” has the meaning given to it in Section 9.2;

“ Contracts ”means all agreements, arrangements, understandings, commitments and undertakings (whether written, electronic or oral), to which a Person is a party or a beneficiary or pursuant to which any of its property or assets are or may be affected;

“ Convertible Securities ” with respect to a corporation or other person, means all warrants, rights, agreements or options, present or future, contingent or absolute, or any right or privilege capable of becoming a right, agreement or option, for the purchase, subscription or issuance of any shares in the capital of such corporation or other person or any other security convertible or exchangeable for shares in the capital of such corporation or other person, including options granted to officers, directors or employees, whether issued pursuant to an established plan or otherwise;

“ Debt Instrument ” means any loan, bond, debenture, promissory note or other instrument evidencing material indebtedness for borrowed money or other material liability;

“ Environmental Laws ” means federal, state, municipal or local Laws and Permits relating to environmental, health or safety matters;

“ HochschildIndemnitees ” has the meaning given to it in Section 9.1;

“ Laws ”means any and all applicable (i) laws, constitutions, treaties, statutes, codes, ordinances, orders, decrees, rules, regulations and municipal by-laws, (ii) judicial, arbitral, administrative, ministerial, departmental or regulatory judgments or orders of any Authorities, and (iii) policies, guidelines and protocols;

“ Liabilities ”means, with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due;

“ Lien ”means any mortgage, easement, encroachment, adverse claim, and assignment by way of security, security interest, servitude, pledge, charge, lien, assignment, hypothecation, conditional sale agreement, title retention, preferential right, trust arrangement, right of set-off, counterclaim or banker’s lien, financing statement, privilege or priority, or other encumbrance of any kind having the effect of security, any designation of loss payees or beneficiaries or any similar arrangement under or with respect to any insurance policy or any preference of one creditor over another arising by operation of law;

“ Material Adverse Effect ” means in respect of any Person, individually or together with other adverse effects, any matter or action that has an effect that is, or would reasonably be expected to be, material and adverse to (A) the assets, liabilities, results of operations, capitalization or business condition (financial or otherwise) or prospects of such Person and its subsidiaries, taken as a whole, or (B) such Person’s ability to consummate the transactions contemplated by this Agreement;

“ Options ”means outstanding options to acquire Shares of the Company under the Stock Option Plan;

“ Parties ”means the Company and Hochschild, collectively, and “ Party ” means any one of them;

“ Permits ”means all permits, consents, waivers, licenses, certificates, approvals, authorizations, registrations, franchises, rights, privileges, quotas and exemptions, or any item with a similar effect, issued or granted by any Authority;

“ Person ”means an individual, partnership, unincorporated association, organization, syndicate, corporation or trust or a trustee, executor, administrator or other legal or personal representative;

“ Purchase Price ” means US$3.00 per share or a total of US$5,010,000.

“ Purchased Shares ” means the number of Shares subscribed for by Hochschild under Section 2.1 of this Agreement;

“ Regulatory Approvals ” means those authorizations, sanctions, rulings, consents, orders, waivers, exemptions, licenses, Permits and other approvals (including a lapse, without objection, of a prescribed time under a statute or regulation that states that a transaction may be implemented if a prescribed time lapses following the giving of notice without an objection being made) of corporate bodies or Authorities or third parties required in connection with the consummation of the subscription for and issuance of the Purchased Shares;

“ Securities Act ” shall have the meaning given to it in Section 2.4;

“ Securities Commissions ” means the securities regulator in each jurisdiction whose Securities Laws are applicable to the Company;

“ Securities Laws ” means the Laws relating to securities of the Company and the regulations and rules made and forms prescribed thereunder together with all applicable published policy statements, blanket orders, rulings and notices adopted by the Securities Commissions of each such jurisdiction or applicable in such jurisdictions;

“ Shares ”means common shares in the capital of the Company;

“ Strategic Alliance Agreement ” means the agreement to be entered into by the Company and the Subscriber on the Closing Date in the form attached hereto as Exhibit “A”;

“ Tax Returns ” means any return, declaration, report, schedule, information statement or return with respect to Taxes required to be filed with an Authority;

“ Taxes ”means, in respect of a Person, any and all taxes and related governmental charges (including assessments, charges, duties, rates, fees, imposts, levies or other governmental charges and interest, penalties or additions associated therewith) including U.S. federal, provincial, municipal and local, foreign or other income, franchise, capital, real property, personal property, tangible, withholding, payroll, employer health, social security, transfer, sales, use, consumption, IVA, excise, anti-dumping, stamp, countervail and value added taxes, all other taxes of any kind for which the Person may have any liability whether disputed or not and all employment insurance premiums;

“ Warrants ”means, collectively, (i) outstanding warrants to acquire Shares in the Company, and “ Warrant ” means any one of the foregoing;

“ Unaudited Financial Statements ” means the comparative unaudited interim financial statements of the Company for the periods ended March 31, 2008 and 2007, June 30, 2008 and 2007 and September 30, 2008 and 2007.

(a)

the use of words in the singular or plural, or with a particular gender, shall not limit the scope or exclude the application of any provision of this Agreement to such Person or Persons or circumstances as the context otherwise permits;

(b)

unless otherwise specified, time periods within, or following which any payment is to be made or act is to be done shall be calculated by excluding the day on which the period commences and including the day on which the period ends and by extending the period to the next Business Day, if the last day of the period is not a Business Day;

(c)

reference to legislation or to a provision of legislation includes a modification or re-enactment of it, a legislative provision substituted for it and a regulation or statutory instrument issued under it;

(d)

all amounts expressed herein in terms of money refer to the lawful currency of the United States of America and all payments made hereunder shall be made in such currency;

(e)

headings in this Agreement are for convenience only and shall not affect its interpretation; and

(f)

references to “include”, “includes” or “including” and the like shall be construed, in each case, as if followed by the words “but without limitation”.

(a)

All of the representations and warranties made by Hochschild in this Agreement are true and accurate as of the Closing Date;

(b)

All covenants to be performed by Hochschild pursuant to this Agreement have been performed;

(c)

Hochschild has tendered the Purchase Price to the Company;

(d)

There shall be no Laws, injunction, order or decree which restrains or enjoins or otherwise prohibits the issuance and purchase of the Purchased Shares, or any action or proceeding pending or threatened against the Company or against Hochschild by any government authority or any other Person (including a Party hereto) to restrain or prohibit the completion of the transactions contemplated by this Agreement;

(e)

All necessary approvals will have been obtained to permit the Purchased Shares to be duly issued to, and registered in the name of, Hochschild in compliance with all applicable Laws, including regulatory approvals; and

(f)

The Strategic Alliance Agreement shall have been executed and delivered by Hochschild.

(a)         All of the representations and warranties of the Company made in or pursuant to this Agreement shall be true and correct as at the Closing and with the same effect as if made at and as of the Closing;

(b)         The Company shall have performed or complied with, in all respects, all of its obligations, covenants and agreements under this Agreement to be performed or complied with at or prior to the Closing;

(c)         There shall be no Laws, injunction, order or decree which restrains or enjoins or otherwise prohibits the issuance and purchase of the Purchased Shares, or any action or proceeding pending or threatened against Hochschild or against the Company by any governmental authority or any other Person (including a Party hereto) to restrain or prohibit the completion of the transactions contemplated by this Agreement;

(d)         Nothing has occurred which, in Hochschild’s reasonable opinion, has or could reasonably be expected to have a Material Adverse Effect on the Company;

(e)         Hochschild shall have received (i) such written opinions from counsel to the Company (who shall not be an employee of the Company or any of its Affiliates) dated as of the Closing, addressed to Hochschild and in the form acceptable to Hochschild and its counsel, each acting reasonably, and which shall, among other things, include opinions as to the Company’s compliance with applicable requirements under the Securities Act and other United States securities laws and title to the Existing Properties;

(f)         Hochschild will be furnished with such certificates or other instruments of the Company or of officers of the Company as Hochschild or Hochschild’s counsel may reasonably believe necessary in order to establish that the obligations and covenants contained in this Agreement have been performed or complied with in accordance with Section 3.2 and that the representations and warranties of the Company herein given are true and correct at the Closing in accordance with Section 3.2(a);

(g)         All necessary steps and proceedings will have been taken to permit the Purchased Shares to be duly issued to, and registered in the name of, Hochschild in compliance with all applicable Laws, including the Company having obtained all necessary regulatory approvals; and

(h)         The Strategic Alliance Agreement shall have been executed and delivered by the Company.

(a)

The Company shall take all such actions as are within its power to control and shall use commercially reasonable efforts to cause other actions to be taken which are not within its power to control, so as to ensure compliance with all of the conditions set forth in Section 3.2 (except to the extent any such condition is waived by Hochschild pursuant to Section 3.3), including ensuring that during the period from the date hereof to Closing Date, there is no breach of any of its representations and warranties.

(b)

Hochschild shall take all such actions as are within its power to control and shall use commercially reasonable efforts to cause other actions to be taken which are not within its power to control, so as to ensure compliance with all of the conditions set forth in Section 3.1 (except to the extent any such condition is waived by the Company pursuant to Section 3.3), including ensuring that during the period from the date hereof to Closing Date, there is no breach of any of its representations and warranties.

(a)

During the period from the date hereof to Closing, no press release or other public announcement with respect to this Agreement or the transactions contemplated herein or in the Strategic Alliance Agreement will be made by a Party until the text of the announcement and the time and manner of its release have been approved by the other Party in writing, acting reasonably.

(b)

Notwithstanding Section 4.2(a), if at any time up to Closing, a Party is bound by Law to make a press release or other public announcement, such Party may do so, notwithstanding the failure of the other Parties to approve same, provided:

(i)

the other Parties are given at least one (1) Business Day prior written notice of the intention to make such announcement and have a reasonable opportunity to comment on the announcement; and

(ii)

the announcement merely relates the facts and then only to the extent necessary to satisfy the specific legal requirement.

    (a)        the Company and its subsidiaries have been duly incorporated and are in good standing under the laws of their respective jurisdictions, and are current and up-to-date with all filings required to be made by them in such jurisdiction, have all requisite corporate power and authority and are duly qualified and except as disclosed in Schedule 5.1(a) , possess all certificates, authorizations, permits and licences issued by the appropriate state, municipal, or federal regulatory agencies or bodies necessary (and has not received or is aware of any modification or revocation to such licences, authorizations, certificates or permits) to carry on their business as now conducted and to own their Properties and assets and the Company and its subsidiaries have all requisite corporate power and authority to execute, deliver, perform and carry out their obligations under this Agreement.

    (b)        except as disclosed in Schedule 5.1(b) , since September 30, 2008, there has been no change to the Company (actual,