Option and Purchase Agreement

Option and Purchase Agreement

WHEREAS the Seller attests, affirms and warrants that it is the owner of forty-five (45) federal unpatented lode mining claims located in the Power River Basin of Wyoming, USA, more particularly described in Exhibit “A” attached to and by this reference incorporated into this Option and Purchase Agreement (the “Agreement”); and

WHEREAS the Seller further attests and affirms that its ownership of the aforementioned forty-five mining claims is free and clear of any liens or other encumbrances; and

WHEREAS these forty-five mining claims are distributed among six (6) locations also identified in Exhibit “A” by location name (collectively referred to as the “Properties” or individually, a “Property”); and

WHEREAS the Buyer is desirous of exploiting and extracting the uranium and other valuable solid mineral contained within the unpatented lode mining claims identified in Exhibit “A”, and selling the extracted uranium or other valuable solid mineral in the market place for its own account; and

WHEREAS it is for the mutual benefit of the Seller and Buyer (the “Parties”) that this Agreement be executed.

NOW THEREFORE, for and in consideration of the sum of Ten dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Seller, and in further consideration of the terms and conditions hereinafter contained to be faithfully kept, observed, and performed by the Seller and Buyer, the Parties hereto agree as follows:

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The Seller hereby grants the Buyer a thirty (30) day period (the “Review Period”) in which to visit the facility in Moab, Utah where the Seller has its geologic and other technical files placed in storage, and Seller allows the Buyer’s staff to examine said files and make copies of any information that pertains to the Properties. The cost of staff time, travel expenses, copy work, etc. is all at the cost of the Buyer. The thirty day period starts on December 15, 2005 and ends at 11.59 p.m. on January 15, 2006.

Seller hereby grants Buyer an Option Period up to three (3) years in length from the date of signing of this Agreement on condition that the Buyer makes minimum field expenditures on the Properties of Seven Hundred and Fifty Thousand Dollars and No Cents ($750,000.00) by the end of the three-year Option Period. Field expenditures may include the following:

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At any time prior to the Buyer satisfying the $750,000 minimum field expenditure requirement and by giving sixty (60) days written notice, the Buyer may terminate its involvement with the Properties and may terminate this Agreement subject to the fulfillment of the requirements of Article 2.13. The Buyer, at its sole discretion, may at any time during the Option Period place an amount of money in an escrow account equal to the difference between $750,000 and dollar amount of field expenditures actually made to that point in time, and thereby complete all requirements of the Option Period. The money placed in escrow can subsequently be withdrawn by the Buyer under the provision that the money withdrawn may only be spent on the development of the Properties.

Seller grants to Buyer the exclusive right to acquire the Properties, subject to Buyer meeting the $750,000 Minimum Expenditure requirement and paying the $250,000 Advanced Royalty to the Seller, and subject to the Royalty on production requirement. Upon the Buyer meeting the requirements of the Option Period, the Seller shall Quitclaim Deed the ownership of the Properties (45 mining claims) to the Buyer. Once the Buyer obtains ownership of the Properties, it may, at its sole discretion, exchange any one or more of the six Properties for other uranium mineral properties owned by a third party (or parties).

The Terms and Conditions of this Agreement shall also apply to all Extensions for a straight-line distance of one (1) statute mile from the external boundary, as of the Effective Date, of any of the six Properties provided that the Buyer either owns, or at some point in the future owns, the uranium mineral on the lands covered by any Extension.

An advanced royalty in the amount of two-hundred and fifty thousand dollars and no cents ($250,000.00) (the “Advanced Royalty”) shall be payable to the Seller by the Buyer upon the execution of this Agreement and after the Review Period. The Advanced Royalty payment of $250,000 will be deducted during the first production until the sum of the Advanced Royalty is exhausted.

The Buyer will pay the Seller a royalty on uranium yellowcake (U ₃ O ₈ ) production based on the spot selling price of yellowcake (U ₃ O ₈ )Royalty will be paid on a calendar quarter basis with

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payment made no later than the last day of the month following the end of the calendar quarter. For example, the royalty payment for the first calendar quarter of any year will be received by the Seller by no later than April 30 ^th . The spot price for any calendar quarter, for the purpose of calculating the royalty payment, will be the average of the spot price reported by Ux (or other mutually agreeable reporting service) during that calendar quarter. Calendar quarter yellowcake production quantity will be based on accepted engineering procedures. Buyer shall keep true and accurate written records of all of its operations and activities under this Agreement, and during March of each year the Buyer will determine actual production from the Properties for the previous calendar year based on yellowcake (U ₃ O ₈ ) quantities received by the conversion facility. Written accounting documentation of the quantity of yellowcake (U ₃ O ₈ ) accepted by the conversion facility will be provided to the Seller. The April royalty check will be adjusted for any over or under royalty payment made during the previous calendar year.

The royalty rate shall be as follows:

If the average spot price of uranium for any calendar quarter is $45.00 or less the royalty rate shall be six percent (6%), and if the average spot price of uranium for any calendar quarter is $45.01 or higher the royalty rate shall be eight percent (8%). Royalty payments are limited to production from the Properties and their Extensions.

The term of the Royalty hereby created shall be perpetual, it being the intent of the Parties hereto that, to the extent allowed by law, the Royalty constitutes a vested interest in and a covenant running with the land and affecting the Properties and all successions thereof whether created privately or through governmental action. In the event a court of competent jurisdiction determines that the term of this Agreement violates the Rule Against Perpetuities, then the term of this Agreement shall automatically be revised and reformed to coincide with the maximum term permitted by the Rule Against Perpetuities, and this Agreement shall not be terminated solely as result of a violation of the Rule Against Perpetuities.

Uranium, in any form, and at any stage of