LEASE AND OPTION AGREEMENT

ARTICLE 1 DEFINITION AND INTERPRETATION

1

1.1

Definition and Interpretation

1

ARTICLE 2 LEASE AND OPTION

4

2.1

Lease

4

2.2

Renewal

4

2.3

Consideration

5

2.4

Option to Purchase

5

2.5

AUC Covenants

7

2.6

Title Documents

7

2.7

AUC’s Right to Terminate Agreement

7

ARTICLE 3 SHARES

8

3.1

Shares

8

ARTICLE 4 PROTECTION OF PROPERTIES

8

4.1

Property Maintenance

8

4.2

Amendments, Relocations and Patents

9

4.3

Change in Federal Mining Law

9

4.4

Covenants by Nu Star

9

ARTICLE 5 WORK COMMITMENT

9

5.1

Work Commitment

9

5.2

Reporting and Audits

10

ARTICLE 6 OPERATIONS DURING TERM

10

6.1

Operations

10

6.2

No Implied Covenants

11

6.3

Protection From Liens and Damages

11

6.4

Inspection

11

6.5

Data

11

6.6

Confidentiality

12

6.7

Insurance

12

ARTICLE 7 DEFAULT, TERMINATION AND SURRENDER

12

7.1

Default

12

7.2

Termination and Surrender

13

7.3

Removal of Equipment

13

ARTICLE 8 REPRESENTATIONS AND WARRANTIES

14

8.1

Nu Star’s Representations and Warranties

14

8.2

Nu Star’s Acknowledgements

16

8.3

Indemnity

16

8.4

AUC’s Representations and Warranties

17

8.5

Application

17

ARTICLE 9 ASSIGNMENTS

17

9.1

Transfers by AUC

17

9.2

Transfer by Nu Star

18

9.3

Affiliates

18

ARTICLE 10 NOTICE

19

10.1

Notices

19

ARTICLE 11 MISCELLANEOUS

20

11.1

Governing Law

20

11.2

Arbitration

20

11.3

Entire Agreement

20

11.4

Time of Essence

20

11.5

Binding

20

11.6

Counterparts

20

11.7

Third Party Beneficiaries

20

11.8

Force Majeure

21

11.9

Specific Performance

21

11.10

Perpetuities

21

11.11

Survival

22

11.12

Public Disclosure

22

11.13

Further Assurance

22

11.14

Amendment and Waiver

22

11.15

Section Headings, and Construction

22

11.16

Severability

23

11.17

No Partnership

23

SCHEDULE “A” – PROPERTIES AND MINERAL CLAIMS

SCHEDULE “B” – NET SMELTER RETURNS ROYALTY

SCHEDULE “C” – SHAREHOLDER QUESTIONNAIRE

1.1

Definition and Interpretation

(a)

“ Affiliate ” means a company that:

(i)

is controlled by that party,

(ii)

is controlled by the same company that controls that party, or

(iii)

controls that party.

(b)

“ Agreement ” means this Lease and Option Agreement.

(c)

“ BLM ” means the Bureau of Land Management.

(d)

“ Business Day ” means a day (other than a Saturday) on which banks are open for business in British Columbia.

(e)

“Commercial Production” means the day on which an aggregate total of 10,000 tons of uranium ore has been shipped from the Purchased Properties for the purpose of earning revenue from the sale of such products.

(f)

“ Control ” means that the votes carried by the shares held of the controlled company by the controlling company, are sufficient for the controlling company to elect or appoint a majority of the directors of the controlled company.

(g)

“ Data ” has the meaning set forth in Section 6.5(a).

(h)

“ Effective Date ” means September 18, 2008.

(i)

“ Expenditures ” mean property maintenance costs and all costs and expenses incurred by or for the benefit of AUC in all activities conducted on or in respect of the Mineral Claims to advance the exploration and development of the Properties or in furtherance of the discovery, location, delineation or evaluation of any deposit of minerals within the Mineral Claims including, without limitation, aerial and surface reconnaissance, geophysical and geochemical work, and geological mapping; drill-site preparation; road building; land clearing; exploration drilling; trenching; excavation, driving of adits, sinking of shafts and similar underground operations; logging of drill holes and drill core; evaluation of geological, geophysical, geochemical or other exploration data; laboratory work, including without limitation, assay or metallurgical analyses; and reclamation and restoration work on any drill sites as required by any federal, state or local agency. Costs and expenses of all similar work not physically conducted on the Properties shall also constitute Expenditures to the extent that such work is for the purpose of, or in furtherance of, the discovery, location, delineation or evaluation of any deposits of minerals within the Properties.

(j)

“ Laws ” means with respect to the interpretation of this Agreement, the laws of the Province of British Columbia and the federal laws of Canada apply, and with respect to the Mineral Claims all applicable statutes, rules, codes, regulations, by-laws, or orders enacted, promulgated, implemented, and/or issued by any United States federal, State of Arizona, or local government entity will apply.

(k)

“ Lease ” means the lease of the Mineral Claims by Nu Star to AUC pursuant to the terms of this Agreement;

(l)

“ Lease Payment Date ” means the first day of the Initial Term, and should any Lease(s) be renewed, then it shall mean the Renewal Date. If any such date falls on a day that is not a Business Day, the date shall be the next following Business Day.

(m)

“ Lease Payments ” mean each amount due to Nu Star pursuant to Section 2.2.

(n)

“ Lease Term ” means the Initial Term or a Renewal Term, as the case may be.

(o)

“ Option ” means the option of AUC to purchase the Mineral Claims from Nu Star in accordance with the provisions of this Agreement.

(p)

“ Option Exercise Date ” has the meaning set forth is Section 2.4(c).

(q)

“ Option Exercise Period ” means the period commencing on the day following the Execution Date, or Renewal Date, as the case may be, and terminating 30 days prior to the end of the Initial Term, or a Renewal Term, as the case may be.

(r)

“ Option Notice ” means the written notice delivered by AUC to Nu Star 30 days prior to the expiry of a Renewal Term setting out which of the Mineral Claims AUC wishes to purchase.

(s)

“ Renewal Date ” means the anniversary date of each one year Lease that is renewed by AUC in accordance with this Agreement. For greater certainty, the anniversary date for the Leases shall be September 18.

(t)

“ Renewal Notice ” means a written notice delivered by AUC to Nu Star on or before 30 days prior to the end of the Initial Term or any Renewal Term, and which shall set out the Mineral Claims to be leased or not to be leased for such renewal term.

(u)

“ Renewal Term ” means a period of one year for any Lease that is renewed by AUC in accordance with this Agreement.

(v)

“ Royalty ” means the 4% Net Smelter Returns Royalty payable to Nu Star in accordance with Section 2.4, and further described in Schedule “B”.

(w)

“ Shares ” means shares of common stock of AUC.

(x)

“ Term ” means the term of the Lease which will commence on the Effective Date and terminate on the later of the date before the first anniversary of the Effective Date (the “ Initial Term ”) or, if AUC has delivered to Nu Star a Renewal Notice, the end of any Renewal Term. The Initial Term and any Renewal Term, are collectively referred to as the “ Term ” .

(y)

“ Transfer Date ” means the date upon which titles to the Mineral Claims are transferred to AUC, which, unless otherwise agreed upon by the parties, shall occur no later than 30 days after delivery of the Option Notice.

(z)

“ $ or Dollars ” means US denomination.

2.1

Lease

(a)

As of the Effective Date Nu Star leases all of its right, title and interest in and to the Properties to AUC (the “ Lease ”), together with all appurtenances and water rights incident, if any, to the Mineral Claims and all improvements on the Properties for the Term.

(b)

Other than the Initial Term, AUC is not obligated to enter into renewals of the Lease for the Properties.

(c)

During the Term and prior to and until exercise of the Option, AUC, its employees, agents and independent contractors shall have all such rights and privileges of exclusive right and option to:

(i)

enter the Properties;

(ii)

have exclusive and quiet possession of the Properties;

(iii)

do such prospecting, exploration, development or other mining work on the Properties and thereunder as AUC in its sole discretion may consider necessary; and

(iv)

remove from the Properties and sell or otherwise dispose of uranium ore or yellowcake (U ₃ O ₈ ), but only for the purposes of bulk testing and pilot plant operations.

2.2

Renewal

(a)

In the event AUC wishes to renew the Lease for one or more Mineral Claims after the Initial Term, and provided AUC is not in default, AUC will deliver to Nu Star a Renewal Notice, and the Lease will be renewed on the Renewal Date, provided AUC delivers to Nu Star the Consideration and agrees to incur the Expenditures.

(b)

At its sole option, AUC may choose not to renew the Lease for certain Mineral Claims or blocks of Mineral Claims which comprise the Properties. Mineral Claims that AUC wishes not to lease shall be identified in the Renewal Notice and:

(i)

the description of the Properties and Schedule “A” will be revised accordingly, and

(ii)

the Renewal Consideration referred to in Section 2.3(b) for the Lease will be reduced by multiplying the Renewal Consideration by a fraction in which

A.

the numerator is 449 minus the total of all Mineral Claims that AUC has not renewed its right to lease since the Effective Date, and

B.

the denominator is 449.

In the event AUC chooses not to renew its lease of one or more Mineral Claims, AUC will have no further rights or obligations with respect to such Mineral Claims.

(c)

In the event AUC purchases some of the Mineral Claims pursuant to Section 2.4 below, but wishes to continue to lease other Mineral Claims, then the annual lease payments for the Mineral Claims that AUC wishes to lease, will be adjusted in the same manner as set out in Section 2.2(b).

2.3

Consideration

(a)

In consideration of the Lease and the Option, on the Effective Date AUC agrees to pay to NuStar the sum of $119,550 and issue the number of Shares that, based upon their average trading price over a 10 day period immediately preceding the Effective Date are valued at $80,000.

(b)

In consideration of any Renewal Terms entered into by AUC, AUC agrees to:

(i)

pay to Nu Star the cash payment set out in the column entitled “Cash Payment”, or issue to Nu Star the number of Shares that, based upon their average adjusted close price as quoted by Yahoo! Finance over a 10 day period immediately preceding the Renewal Date, equal in the applicable amount, as set out in the column entitled “Value of Shares of AUC” below, and

(ii)

pay to the BLM the sum of $56,125 on or before a Renewal Date for renewal fees due for the Mineral Claims.

2.4

Option to Purchase

(a)

Nu Star hereby grants to AUC the sole and exclusive option to purchase Nu Star’s right, title and interest in all or some of the Mineral Claims (“ Option ”), together with all appurtenances, water rights, and improvements incident thereon, free and clear of all liens and encumbrances (save such exceptions, including overlaps of property and claims having priority in law to the rights of Nu Star and either referred to in Sections 4.2, 4.3, 8.1(c), or described in Schedule “A”).

(b)

The Option may only be exercised by AUC during an Option Exercise Period.

(c)

At any time after the Execution Date and provided AUC is not in default of any of its obligations under this Agreement, AUC may notify Nu Star of its intention to exercise the Option. Such notification will be in writing and will include a description of the Mineral Claims AUC wishes to purchase (the “ Option Notice Date ”).

(d)

The purchase price for the Mineral Claims pursuant to the Option will be twice the value of the Renewal Consideration that would otherwise be payable or transferrable to Nu Star if AUC had leased the Mineral Claims in the year following the year in which AUC delivered the Option Notice, as adjusted pursuant to Section 2.3(b).

(e)

Subject to Section 2.4(f), if AUC sells or otherwise disposes of minerals mined and removed from the Properties that AUC has purchased pursuant to this Section 0 (the “ Purchased Properties ”), Nu Star hereby retains and reserves, and AUC hereby grants and agrees to pay to Nu Star, in further consideration for the sale of the Purchased Properties, a 4% Net Smelter Returns royalty (the “ Royalty ”) on all yellowcake (U ₃ O ₈ ) produced from uranium ore mined or recovered from the Purchased Properties once Commercial Production has been achieved.

(f)

At AUC’s option, for each breccia pipe of uranium mineralization located on one or more Mineral Claims within 1 claim block referred to in the description of the Purchased Properties (a “ PIPE ”), AUC may purchase Nu Star’s right to the Royalty on all the yellowcake (U ₃ O ₈ ) produced from uranium ore mined or recovered from such Pipe, for the sum of $1,000,000.

(g)

The Option will terminate and AUC will have no further interest in the Properties under the following conditions:

(i)

on the last day of any existing Term, in the event

A.

AUC has provided written notice to Nu Star that it wishes to terminate this Agreement and relinquish its option to purchase the Properties, or

B.

AUC has failed to provide the required notice to renew the Lease in accordance with the time required pursuant to Section 2.2(a), and such failure was not otherwise excused in accordance with this Agreement; or

(ii)

on such day that AUC informs Nu Star that it wishes to relinquish its option to purchase the Properties.

2.5

AUC Covenants

During the Term, AUC covenants to use commercially reasonable efforts to:

(a)

obtain all work permits, environmental approvals, and insurance required to carry out the Expenditures on the Properties;

(b)

maintain the Mineral Claims and Nu Star’s rights with respect thereto in good standing;

(c)

ensure that all third party consultants, equipment and materials suppliers, and independent contractors that AUC contracts to provide services and materials for or on behalf of the Properties are paid in full (subject to any holdbacks AUC may lawfully make);

(d)

report all progress, findings, reports, technical data and any other matter related to the Mineral Claims to Nu Star within ninety (90) days after the end of the Initial Term and each Renewal Term; and

(e)

act in accordance with good mining practices, in compliance with all applicable Laws and in accordance with the care and skill normally expected by someone conducting and managing exploration, development and mining activities on behalf of legal or beneficial owners of the Properties.

2.6

Title Documents

Nu Star shall provide AUC with the recording information with respect to the deeds, easements, or other documents known to Nu Star which bear upon title to the Mineral Claims, and shall provide AUC with copies of all such documents in Nu Star’s possession or control. Nu Star shall, upon AUC’s request, record any such document in Nu Star’s possession or control which has not been recorded. Nu Star shall provide AUC with copies of all documents filed with the BLM or county subsequent to the Effective Date, provided that Nu Star shall not file any document that impairs Nu Star’s title to the Mineral Claims without AUC’s prior written consent. No later than ten (10) days prior to the Effective Date, Nu Star and AUC shall prepare an inventory of all title documents provided to AUC. If during the Term, AUC prepares and records any documents concerning title to the Mineral Claims, AUC shall provide Nu Star with copies thereof in advance of filing such documents of record, or if it is not possible to provide such documents in advance, then as soon thereafter as possible.

2.7

AUC’s Right to Terminate Agreement

AUC has no obligation to exercise the Option, except at its sole and independent discretion. AUC shall have the unrestricted right at any time to terminate this Agreement without liability or obligation of any kind except for making such payments and issuing such shares as may have previously accrued, and satisfying all obligations under Sections 2.5, 4.1, and 5.1. Unless a

3.1

Shares

(a)

The Shares shall be subject to resale restrictions which are required to be imposed on the Shares issued to Nu Star hereunder, pursuant to applicable securities laws, including the rules and policies of any stock exchange or quotation service upon which AUC may be listed or quoted at the time and any applicable resale restrictions imposed by the U.S. Securities and Exchange Commission or under state securities laws.

(b)

Prior to the issuance of the Shares to Nu Star pursuant to this Agreement, Nu Star shall deliver to AUC a completed and executed “Prospective Investor Questionnaire” (“Questionnaire”) in the form attached hereto as Schedule B in connection with the issuance of such Shares and agrees to AUC filing certain personal information about Nu Star with any stock exchange or quotation service upon which AUC may be listed at the time and applicable securities regulators as required by applicable securities laws and policies and the rules and policies of any such exchange.

4.1

Property Maintenance

(a)

During the Term, AUC shall:

(i)

pay all taxes levied or assessed against the Mineral Claims; and

(ii)

pay all applicable fees and perform all work requirements for the unpatented mining claims included in the Properties and file and/or record in the applicable office(s) all evidence of such payments or work as is required by Law (“ Property Maintenance Costs ”) prior to the date such obligations become due.

(b)

AUC shall provide Nu Star evidence of payment and performance of the Property Maintenance Costs as incurred and paid. Property Maintenance Costs, excluding any Mineral Claims renewal fees referred to in Section 2.3(b)(ii), shall be included in the Expenditures.

(c)

Upon abandonment of the Properties, or termination by AUC of this Agreement, AUC shall remain liable for any Property Maintenance Costs that are required to keep the Mineral Claims in good standing and which are due and payable within thirty (30) days or less following the date of abandonment or termination.

4.2

Amendments, Relocations and Patents

During the Term AUC shall have the right (but not the obligation) acting in good faith and in a prudent manner to amend or relocate any or all of the unpatented mining claims included in the Properties, to locate placer claims on ground theretofore covered by lode claims and vice versa, to locate mill sites on ground theretofore covered by mining claims and vice versa, and to locate any fractions existing on the Effective Date or resulting from the location, amendment, or relocation of mining claims or mill sites. All such locations, amendments, or relocations shall be made in the name of Nu Star. All expenses authorized by AUC in connection with the locating, amending, or relocating mining claims or mill sites shall be borne by AUC and shall constitute Expenditures for purposes of AUC’s Work Commitment. The rights of AUC under this Agreement shall extend to all such locations, amended locations, and relocations of the mining claims and mill sites, and the definition of Mineral Claims and Properties shall be amended or extended accordingly. At the request of Nu Star, AUC shall execute and record any documents necessary to clarify and confirm the interests of Nu Star in the new, amended or relocated mining or mill site claims.

4.3

Change in Federal Mining Law

If the United States establishes a leasing system or other system of tenure for lands or minerals now subject to location under the mining laws, and if the new system gives Nu Star an election to acquire rights under the new system in exchange for or in modification of Nu Star’s existing rights for the Mineral Claims upon prior written consent of Nu Star, AUC may make the election in the name or Nu Star with respect to any or all of the unpatented claims included in the Properties. Thereafter, during the term of this Agreement AUC shall pay all royalties, rentals, bonuses, fees, and other amounts required by the new system, but AUC shall be entitled to credit all such payments as Expenditures.

4.4

Covenants by Nu Star

During the Term, unless AUC has previously otherwise consented to in writing, Nu Star shall not sell, lease, dispose or encumber in any way any of its interest in the Properties except to AUC in accordance with this Agreement.

5.1

Work Commitment

(a)

During the Initial term and each Renewal Term thereafter, AUC shall make the Expenditures on or for the benefit of the Properties in the amounts set forth below, but in no event less than the minimal amount necessary to maintain and preserve each and all of the unpatented Mineral Claims included within the Properties under all applicable Laws (the “ Work Commitment ”). Work Commitment activities undertaken on the Properties shall be undertaken in a manner consistent with best industry practises for exploration and reclamation activities for breccia pipe uranium deposits.

5.2

Reporting and Audits

AUC shall furnish to Nu Star within forty-five (45) days following the end of each Lease Term, a report itemizing and detailing all Expenditures incurred by or for the benefit of AUC and deemed by AUC to qualify as such for the purposes of this Agreement. Nu Star shall be conclusively deemed to have accepted AUC’s determination that such Expenditures satisfy the terms and conditions of this Agreement unless Nu Star shall have made written exception within thirty (30) days after receipt by Nu Star of AUC’s statement of Expenditures.

6.1

Operations

(a)

AUC shall conduct all operations on the Properties during the Term (“ Operations ”) in a good and workmanlike manner and in accordance with accepted mining practice and all Laws, including, but not limited to, all Laws regarding reclamation of the Mineral Claims. Without in any manner limiting the generality of the foregoing, AUC shall post and provide all and any mined land reclamation performance bonds required in order to commence Operations upon the Properties. All decisions with respect to exploration and development of the Properties, including all decisions regarding the commencement, suspension, resumption, or termination of any Operations, shall be made by AUC in its sole discretion.

(b)

AUC hereby agrees to indemnify and hold Nu Star harmless from and against any cost, damage, claim, penalty, fine, liability or expense (including reasonable attorney's fees) incurred by or claimed against Nu Star, directly or indirectly, (i) as a result of AUC's use or occupancy of or Operation on the Properties, (ii) by reason of any failure of AUC, or its partners, officers, agents or employees, to perform its obligations under this Agreement, or (iii) otherwise as a result of AUC’s fault or negligence.

(c)

Nu Star hereby agrees to indemnify and hold AUC harmless from and against any cost, damage, claim, penalty, fine, liability or expense (including reasonable attorney's fees) incurred by or claimed against AUC, directly or indirectly, (i) as a result of the exercise

6.2

No Implied Covenants

6.3

Protection From Liens and Damages

6.4

Inspection

(a)

Nu Star, or Nu Star’s authorized representative, at its sole risk and expense, may enter on the Properties at any reasonable time for the purpose of inspection, but shall enter at Nu Star’s own risk and so as not to hinder unreasonably the operations of AUC.

(b)

Nu Star or Nu Star’s authorized representative may, at any reasonable time and at its sole expense, inspect any records pertinent and necessary for the purpose of substantiating the compliance of AUC with the provisions of this Agreement.

6.5

Data

(a)

Prior to, or as soon as practicable following the Effective Date, Nu Star shall deliver to AUC all drill core, all geological, geophysical, and engineering data and maps, logs of drill holes, results of assaying and sampling, and similar data concerning the Properties (or copies thereof) (“Data”) which are in Nu Star’s possession or control. Promptly thereafter, Nu Star and AUC shall prepare an inventory of all Data delivered to AUC by Nu Star.

(b)

Upon the expiration, surrender or other termination of this Agreement (except by exercise of the Option), AUC shall, within sixty (60) days after such termination, (i) return to Nu Star all drill core and original data delivered by Nu Star to AUC which are then in AUC’s possession or control, and (ii) make available for inspection and copying by Nu Star all factual geological and geophysical data and maps (not including interpretive data), logs of drill holes, and results of assaying and sampling pertaining the Mineral Claims which AUC has produced and/or obtained as a result of its exploration work under this Agreement and which are then in AUC’s possession or control. Upon Nu Star’s request made within sixty (60) days after termination of this Agreement (except by exercise of the Option), AUC shall, at Nu Star’s expense, provide Nu Star with the drill cores designated by Nu Star.

(c)

Neither party makes any representation or warranty as to the accuracy or interpretation of any such Data provided to the other party pursuant to this Agreement, and shall not be

6.6

Confidentiality

6.7

Insurance

7.1

Default

(a)

If either party (the “ Notifying Party ”) believes the other party (the “ Notified Party ”) is in breach of this Agreement, it shall notify the other party and give it the opportunity, as set forth in this subsection, to cure such breach. If the Notified Party does not:

(i)

cure such breach within thirty (30) days of the Notified Party’s actual receipt of said notice,

(ii)

as to breaches that can be cured but cannot be cured within thirty (30) days of the Notified Party’s actual receipt of said notice using reasonable diligence, commence (and notify the Notifying Party of its commencement) to cure such breach within thirty (30) days after its actual receipt of notice and thereafter diligently pursue all steps necessary to cure the breach as expeditiously as is reasonable under the circumstances and thereafter cure the breach,

(iii)

as to breaches that due to their nature cannot be cured, commence (and notify the Notifying Party of its commencement) within thirty (30) days after actual receipt of notice to diligently pursue all steps necessary to mitigate such breach to the extent reasonably possible as expeditiously as is reasonable under the

circumstances and promptly take such actions as are reasonably designed to prevent such breach from recurring, or

(iv)

notify the Notifying Party within thirty (30) days of its actual receipt of notice from the Notifying Party that it disputes that there has been a breach and institute an action in a court of competent jurisdiction contesting the alleged breach within ten days after it so notifies the Notifying Party;

and if such breach is determined to be of a material nature, then, subject to the other provisions of this Section, the Notifying Party may terminate this Lease upon thirty (30) days notice to the Notified Party.

(b)

Unless otherwise expressly provided herein, termination of this Lease under this Section shall be without prejudice to any other rights or remedies to which the parties may be entitled, including the right to Damages.

7.2

Termination and Surrender

(a)

This Agreement:

(i)

shall terminate automatically upon termination of the Lease, unless renewed by AUC in accordance with this Agreement;

(ii)

may be terminated by written notice of the non-defaulting party in the event that the other party is in default pursuant to Section 7.1;

(iii)

may be terminated by mutual agreement of the parties; and

(iv)

shall terminate automatically on the Transfer Date in the event AUC exercises the Option, and then only with respect to the purchased Mineral Claims.

(b)

Upon termination of this Agreement, by default or otherwise, all rights, liabilities, and obligations of AUC under this Agreement shall terminate, except as expressly provided herein. For the avoidance of doubt, termination of this Agreement shall not terminate any obligations of AUC to pay any amounts which become due under the Royalty, in the event AUC exercises the Option.

(c)

In the event of any