MINING LEASE AND OPTION TO PURCHASE AGREEMENT

Mining Lease and Option to Purchase Agreement

               This Mining Lease and Option to Purchase Agreement (“Agreement”) is made and entered into by and between Diversified Inholdings, LLC, a Nevada limited liability company (“Owner”), and Romarco Minerals U.S. Inc., a Nevada corporation (“Romarco”).

Recitals

               A.           Owner owns the unpatented mining claims collectively known as the Zebra claims situated in Elko County, Nevada, more particularly described in Exhibit A attached to and by this reference incorporated in this Agreement (collectively the “Property”).

               B.           Owner and Romarco are parties to the Confidentiality Agreement dated July 19, 2004 , as amended, pursuant to which Owner provided certain information to Romarco in contemplation of a transaction.

               C.           Owner desires to lease the Property to Romarco and to grant to Romarco the option to purchase the Property on the terms and conditions of this Agreement.

               Now, therefore, in consideration of their mutual promises, the parties agree as follows:

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

                1.1            “Area of Interest” means the geographic area within the exterior boundaries of the Property and the lands described in Exhibit A and the map which is part of Exhibit A.

                1.2             “Closing Date” means the date on which Romarco’s purchase of the Property is closed in accordance with Section 5.

               1.3             “Effective Date” means August 1, 2004.

                1.4             “Governmental Regulations” means all directives, laws, orders, ordinances, regulations and statutes of any federal, state or local agency, court or office.

               1.5             “Interest Rate” means LIBOR plus two percent (2%) per annum.

                1.6             “Lease Year” means each one (1) year period following the Effective Date and each anniversary of the Effective Date.

                1.7             “Minerals” means all minerals and mineral materials, including gold, silver, platinum and platinum group metals, base metals (including antimony, chromium, cobalt, copper, lead, manganese, mercury, nickel, molybdenum, titanium, tungsten, zinc), and other metals and mineral materials which are on, in or under the Property.

                1.8            “Net Smelter Returns” means the net smelter returns from the production of Minerals from the Property as calculated and determined in accordance with Exhibit 1 to the conveyance to be executed and delivered in accordance with Section 5.5.

                1.9             “Option” means the Option granted by Owner to Romarco to purchase the Property.

                1.10            “Owner” means Diversified Inholdings, LLC, a Nevada limited liability company, and its successors and assigns.

                1.11            “Payments” means the payments payable by Romarco in accordance with Section 4.1.

                1.12            “Property” means the unpatented mining claims collectively known as the Zebra claims situated in Elko County, Nevada, plus any additional unpatented mining claims which are made subject to this Agreement in accordance with its terms.

               1.13           “Purchase Price” means the purchase price for the Property described in Section 5.

                1.14            “Romarco” means Romarco Minerals U.S. Inc., a Nevada corporation, and its successors and assigns.

                1.15            “Royalty” means the production royalty payable by Romarco to Owner in accordance with Section 4.2.

2.           Lease and Grant of Rights. Owner leases the Property to Romarco and grants Romarco the rights and privileges described in this Section.

                2.1             Lease. Owner leases the Property to Romarco for the purposes of exploration for Minerals, provided, however, that Romarco shall have no right to construct, develop or operate a mine on the Property without first having exercised and closed the Option.

                2.2            Water Rights. Subject to the regulations of the State of Nevada concerning the appropriation and taking of water, Romarco shall have the right to appropriate and use water, to drill wells for the water on the Property and to lay and maintain all necessary water lines as may be required by Romarco in its operations on the Property. If Romarco acquires or files any application for appropriation or a permit, it shall cause each such application and permit to be taken jointly in the names of Owner and Romarco. On termination of this Agreement, except on Romarco’s exercise and closing of the Option, Romarco shall assign and convey to Owner all permits and water rights appurtenant to the Property which are acquired by Romarco during the term of this Agreement. If Romarco exercises and closes the Option, Owner shall assign and convey to Romarco all permits and water rights appurtenant to the Property.

3.           Term . The initial term of this Agreement shall commence on the Effective Date and shall expire twenty (20) years after the Effective Date, unless this Agreement is sooner terminated, canceled or extended. Romarco shall have the right to extend this Agreement for additional one (1) year terms, provided that Romarco has fully performed all of its obligations under this Agreement and is conducting exploration or pre-development activities on the Property on the expiration of the term immediately preceding the extension term. Romarco shall deliver written notice to Owner of Romarco’s intent to extend this Agreement.

4.           Payments.

                4.1            Minimum Advance Royalty Payments . On the dates described below, Romarco shall pay to Owner the sums described below:

The cash Payments shall not be credited against the Purchase Price.

The foregoing payments shall be minimum advance Royalty payments and shall be credited cumulatively in favor of Romarco against its obligation to pay the Royalty prescribed in Section 4.2.

                4.2             Production Royalty. Romarco shall pay to Owner a production royalty based on the Net Smelter Returns from the production or sale of Minerals from the Property, including any additions to the Property resulting from the parties’ location of unpatented mining claims in the Area of Interest. The Royalty percentage rates are based upon the average monthly price per troy ounce of gold as published by the London Bullion Dealers Association for the month during which gold refined from Minerals from the Property are outturned at the refinery, as follows:

Romarco shall have the option to purchase a portion of the Royalty representing two percent (2%) of the Net Smelter Returns, all in accordance with the terms of the conveyance to be

executed and delivered in accordance with Section 5.5.

                4.3             Method of Payment. Except as otherwise provided in this Agreement, all payments by Romarco to Owner shall be paid by check or wire transfer to an account designated by Owner.

                4.4            Late Charge and Interest. If Romarco does not timely pay any Payment or any other amount payable by Romarco under this Agreement within ten business (10) days after the date on which such payment is due, Romarco shall pay interest on such overdue amount at the greater of the Interest Rate or ten percent (10%). If any Payment or other amount payable by Romarco remains delinquent for a period in excess of thirty (30) days, Romarco shall pay to Owner, in addition to the late charge, interest from and after the due date at the Interest Rate.

               4.5            Currency. All sums referred to in this Agreement are in United States currency.

5.           Option. Owner grants to Romarco the exclusive right to purchase the Property, subject to the Royalty reserved by Owner and subject to Romarco’s obligations under the conveyance executed and delivered by Owner on the closing of the Option. Romarco may exercise the Option at any time after Romarco commits to commence development of a mine or mining on the Property or completes a positive feasibility study for development or mining on the Property. The Purchase Price for the Property shall be Five Thousand Dollars ($5,000.00) .

                5.1             Notice of Election. If Romarco elects to exercise the Option, Romarco shall deliver written notice to Owner. On Owner’s receipt of Romarco’s notice of exercise of the Option, the parties shall make diligent efforts to close the conveyance of the Property, as applicable, within thirty (30) days after Owner’s delivery of the notice.

                5.2            Real Property Transfer Taxes. Romarco shall pay the real property transfer taxes, if any, the costs of escrow and all recording costs incurred in closing of the Option. The parties acknowledge that there are presently no real property transfer taxes assessed on the transfer of title to unpatented mining claims, including the unpatented mining claims which constitute the Property.

                5.3            Proration of Taxes. Payment of any and all state and local real property and personal property taxes levied on the Property and not otherwise provided for in this Agreement shall be prorated between the parties as of the closing of any transaction on the basis of a thirty (30) day month. The parties acknowledge that there are presently no real property taxes assessed against unpatented mining claims, including the unpatented mining claims which constitute the Property.

                5.4            Payment on Closing. On closing of the Option, Romarco shall pay the Purchase Price to Owner in cash or by wire transfer in accordance with Section 4.3

               5.5            Conveyance on Closing. If Romarco exercises and closes the Option, Owner

shall execute and deliver to Romarco a conveyance of the Property which contains the reservation of the Royalty and obligates Romarco to make the Payments in the form of Exhibit B attached to and by this reference incorporated in this Agreement. On the closing of the Option, the parties shall complete the conveyance by inserting the description of all of the unpatented mining claims which comprise the Property on closing of the Option. The execution, delivery and recording of the conveyance shall not constitute a merger of Romarco’s obligations under this Agreement which shall survive the closing of the Option. Owner and Romarco shall execute and deliver such other written assurances and instruments as are reasonably necessary for the purpose of closing the purchase of the Property.

                5.6            Effect of Closing. On closing of the Option, Romarco shall own the Property, subject to the Royalty reserved by Owner and Romarco’s obligations stated in the conveyance of the Property.

6.           Compliance With The Law. Romarco shall, at Romarco’s sole cost, promptly comply with all Governmental Regulations relating to the condition, use or occupancy of the Property by Romarco, including but not limited to all exploration and development work performed by Romarco during the term of this Agreement. Romarco shall, at its sole cost, promptly comply with all applicable Governmental Regulations regarding reclamation of the Property and Romarco shall defend, indemnify and hold harmless Owner from any and all actions, assessments, claims, costs, fines, liability and penalties arising from or relating to Romarco’s failure to comply with any applicable Governmental Regulations. Owner agrees to cooperate with Romarco in Romarco’s application for governmental licenses, permits and approvals, the costs of which shall be borne by Romarco. Promptly following the Effective Date, Romarco shall apply and diligently prosecute its application for a special use permit for mining operations on the Property.

7.           Work Practices, Data and Reports.

               7.1            Work Practices. Romarco shall work the Property in a miner-like fashion.

                7.2            Inspection of Data. During the term of this Agreement, Owner shall have the right to examine and make copies of all data, including interpretative data, regarding the Property in Romarco’s possession during reasonable business hours and upon prior notice, provided, however, that the rights of Owner to examine such data shall be exercised in a manner that does not interfere with the operations of Romarco. On execution of this Agreement, Owner shall allow Romarco to inspect all data, including interpreted data, regarding the Property in Owner’s possession. Romarco shall have the right to make copies of any such data, subject to Romarco’s confidentiality obligations and the obligation to return such data on termination of this Agreement (except on Romarco’s exercise of the Option).

                7.3            Reports. On or before April 1 following each calendar year during which this Agreement is effective, Romarco shall deliver to Owner a comprehensive report, which includes all factual data, of all of Romarco’s activities conducted on the Property for the previous calendar

year.

8.           Scope of Agreement. This Agreement shall extend to and include the unpatented mining claims described in Exhibit A which is part of this Agreement, and in the exhibits which are part of this Agreement, and all other interests, mining claims and property rights made part of and subject to this Agreement in accordance with this Section. All unpatented mining claims located by Owner or Romarco which are partially or wholly in the Area of Interest shall be located in Owner’s name and shall be part of and subject to this Agreement. If a party locates any unpatented mining claims in the Area of Interest, the locator shall promptly notify the other party. The parties shall execute and deliver an amendment of this Agreement, in recordable form, which provides that the newly located unpatented mining claims are part of the Property and are subject to this Agreement. The amendment may be recorded by either party.

9.           Liens and Notices of Non-Responsibility. Romarco 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 Romarco, and to pay, and defend, indemnify and hold harmless Owner from and against, all indebtedness and liabilities incurred by or for Romarco which may or might become a lien, charge or encumbrance; except that Romarco need not discharge or release any such lien, charge or encumbrance so long as Romarco disputes or contests the lien, charge or encumbrance and posts a bond sufficient to discharge lien acceptable to Owner. Subject to Romarco’s right to post a bond in accordance with the foregoing, if Romarco does not within thirty (30) days following the imposition of any such lien, charge or encumbrance, cause the same to be released of record, Owner shall have, in addition to Owner’s contractual and legal remedies, the right, but not the obligation, to cause the lien to be released by such manner as Owner deems proper, including payment of the claim giving rise to such lien, charge or encumbrance. All sums paid by Owner for and all expenses incurred by it in connection with such purpose, including court costs and attorney’s fees, shall be payable by Romarco to Owner on demand with interest at the Interest Rate. Notwithstanding the foregoing, Romarco shall have the right to grant a lien and security interest in its leasehold interest under this Agreement for the purpose of obtaining financing for Romarco’s activities on the Property.

10.         Taxes.

                10.1           Real Property Taxes. Owner shall pay any and all taxes assessed and due against the Property before execution of this Agreement. Romarco shall pay promptly before delinquency all taxes and assessments, general, special, ordinary and extraordinary, that may be levied or assessed during the term of this Agreement upon the Property. All such taxes for the year in which this Agreement is executed and for the year in which this Agreement terminates shall be prorated between Owner and Romarco, except that neither Owner nor Romarco shall be responsible for the payment of any taxes which are based upon income, net proceeds, production or revenues from the Property assessed solely to the other party. The parties acknowledge that there are presently no real property taxes assessed against unpatented mining claims, including the unpatented mining claims which constitute the Property.

                10.2            Personal Property Taxes. Each party shall promptly when due pay all taxes assessed against such party’s personal property, improvements or structures placed or used on the Property.

                10.3            Income Taxes. Owner shall not be liable for any taxes levied on or measured by income or net proceeds, or other taxes applicable to Romarco, based upon payments under this Agreement or under the conveyance executed and delivered by Owner on the Closing of the Option.

                10.4            Delivery of Tax Notices. If Owner receives tax bills or claims which are Romarco’s responsibility, Owner shall promptly forward them to Romarco for payment.

11.          Insurance and Indemnity.

                11.1            Romarco’s Liability Insurance. Romarco shall, at Romarco’s sole cost, keep in force during this 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 Two Million Dollars ($2,000,000) per occurrence for injuries to or death of person, One Million Dollars ($1,000,000) per occurrence for property damage, and with a contractual liability endorsement insuring Romarco’s performance of Romarco’s indemnity obligations of this Agreement.

                11.2            Form and Certificates. Such policy shall name Owner as a