PROPERTY OPTION AGREEMENT

EXHIBIT 10.9

PROPERTY OPTION AGREEMENT

THIS AGREEMENT made and entered into as of the 24 ^th day of December, 2003.

WHEREAS the Optionor has represented that it is the sole recorded and beneficial owner, in and to a property called the Lincoln Flat Project, described in Schedule “A” attached hereto (the “Property”);

AND WHEREAS the Optionor, subject to the Net Smelter Royalty reserved to the Optionor, now wishes to grant to the Optionee the exclusive right and option to acquire an undivided 100% right, title and interest in and to the Property on the terms and conditions hereinafter set forth;

NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises, the mutual covenants herein set forth and the sum of One Dollar ($1.00) of lawful money of U.S. currency now paid by the Optionee to the Optionor (the receipt whereof is hereby acknowledged), the Parties hereto do hereby mutually covenant and agree as follows:

1. Definitions. The following words, phrases and expressions shall have the following meanings:

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EXHIBIT 10.9

               a. “After Acquired Properties” means any and all mineral interests staked, located, granted or acquired by or on behalf of either of the parties hereto which are located in whole or in part within one-half of a mile of the existing perimeter of the Property, but excepting mineral interests acquired by the Optionee from unaffiliated third parties in arm’s length transactions;

               b. “Expenditures” includes all direct or indirect expenses [net of government incentives and not including payments to the Optionor pursuant to section 4 hereof] of or incidental to Mining Operations;

               c. “Facilities” means all mines and plants, including without limitation, all pits, shafts, adits, haulageways, raises and other underground workings, and all buildings, plants, facilities and other structures, fixtures and improvements, and all other property, whether fixed or moveable, as the same may exist at any time in, or on the Property and relating to the operator of the Property as a mine or outside the Property if for the exclusive benefit of the Property only;

               d. “Force Majeure” means an event beyond the reasonable control of the Optionee that prevents or delays it from conducting the activities contemplated by this Agreement other than (1) the making of payments under Section 4; (2) maintenance of the Property (including payment of Federal annual mining claim maintenance fees and fees for the recording of notices of intent to hold) under Section 12; (3) maintenance of Optionee’s insurance coverage under Section 15; and (4) Optionee’s defense, indemnification and hold harmless obligations under Section 14. Such events shall include but not be limited to acts of God, war, insurrection, action of governmental agencies reflecting an instability in government procedures, or delay in permitting unacceptable to both Optionor and Optionee;

               e. “Gold Price” means Monthly Average Gold Price as defined in Schedule “B” attached hereto;

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

               g. “Mineral Products” means the commercial end products derived from operating the Property as a mine;

               h. “Mining Operations” includes:

                         (i) every kind of work done on or with respect to the Property by or under the direction of the Optionee during the Option Period; and

                         (ii) without limiting the generality of the foregoing, includes all work which qualifies for annual assessment work under applicable Federal and state laws and regulations, and the conduct of geophysical, geochemical and geological surveys, studies and mapping, investigating, drilling, designing, examining, equipping, improving, surveying, shaft sinking, raising, cross-cutting and drifting, searching for, digging,

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EXHIBIT 10.9

trucking, sampling, working and procuring minerals, ores and metals, in surveying and bringing any mineral claims to lease or patent, in doing all other work usually considered to be prospecting, exploration, development, a feasibility study, mining work, milling, concentration, beneficiation of ores and concentrates, as well as the separation and extraction of Mineral Products and all reclamation, restoration and permitting activities;

               g. “Net Smelter Royalty” means that Net Smelter Royalty as defined in Schedule “B” attached hereto (“NSR”);

               h. “Option” means the option granted by the Optionor to the Optionee to acquire, subject to the NSR reserved to the Optionor, an undivided 100% right, title and interest in and to the Property as more particularly set forth in Section 4;

               i. “Option Period” means the period from the date of this Agreement to the date at which Optionee has performed its obligations to acquire its 100% interest in the Property as prescribed in Section 4, which ever shall be the lesser period;

               j. "Property" means and includes:

                         (i) those mining claims described in Schedule A attached hereto;

                         (ii) all rights and appurtenances pertaining to the mining claims including all water and water rights of way, and easements, both recorded and unrecorded, to which the Optionor and Optionee are entitled in respect thereof.

2. Headings. Any heading, caption or index hereto shall not be used in any way in construing or interpreting any provision hereof.

3. Singular, Plural. Whenever the singular or masculine or neuter is used in this

Agreement, the same shall be construed as meaning plural or feminine or body politic or corporate or vice versa, as the context so requires.

4. Option. The Optionor hereby grants to the Optionee the sole and exclusive right and option (the “Option”) to earn a 100% interest in the Property, subject to Optionor’s NSR, for total consideration consisting of cash payments to the Optionor totalling $210,000 to be made as follows:

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EXHIBIT 10.9

               Following which the Optionee shall be deemed to have exercised the Option (the “Exercise Date”) and shall be entitled to an undivided 100% right, title and interest in and to the Property with the full right and authority to equip the Property for production and operate the Property as a mine subject to the rights of the Optionor to receive the NSR.

               If prior to January 10, 2013 the Optionee completes a positive feasibility for the development or mining of Mineral Products on the Property and obtains all government approvals, consents, licenses and permits to construct, develop or operate a mine on the Property, the Optionee shall purchase the Property prior to the commencement of mining of Mineral Products. In that event the purchase price for the Property shall be the sum of all unpaid payments due to the Optionor pursuant to this article 4 through January 10, 2013.

               g. The doing of any act or the incurrence of any cash payments by the Optionee shall not obligate the Optionee to do any further acts or make any further payments.

5. Royalty. Optionee agrees that the Property shall be subject to a royalty in favour of the Optionor equal to 3% of Net Smelter Returns if the Gold Price is less than or equal to $400 per ounce, and 4% of Net Smelter Returns if the Gold Price is greater than $400 per ounce, to be calculated and paid according to and otherwise governed by Schedule B hereto.

Optionee may at any time elect to make a payment (the “Royalty Buydown Option”) to the Optionors to reduce the amount of the Net Smelter Royalty by 1%, up to a maximum of 2%, upon the payment of $500,000 for each 1% of reduction as set out in the table below:

6. Transfer of Title. Upon execution of this Agreement, the Optionee shall be entitled to record this Agreement against title to the Property.

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EXHIBIT 10.9

               Upon Optionee exercising the option to acquire the Property pursuant to article 4, the Optionor shall deliver to Optionee duly executed transfers to Optionee of a 100% interest in and to the Property, and Optionor shall have no further rights to the Property other than the royalty interest pursuant to article 5.

7. Mining Operations during Option. During the Option Period, the Optionor may provide its mineral exploration expertise on the Property, on a consultation basis for and on behalf of the Optionee, at the election of the Optionee. However, the Optionee has the exclusive right to determine what Expenditures and Mining Operations it will perform, when they will be performed, and by whom. If the Optionee elects to use the mineral expertise and consulting services of the Optionor, then the Optionor shall invoice for time for consulting services and related travel expenses from time to time.

               During the currency of this Agreement, the Optionee, its servants, agents and workmen and any persons duly authorized by the Optionee, shall have the right of access to and from and to enter upon and take possession of and prospect, explore and develop the Property in such manner as the Optionee in its sole discretion may deem advisable and shall have the right to remove and ship therefrom ores, minerals, metals, or other products recovered in any manner therefrom. However, the Optionee shall purchase the Property, as described in article 4 herein, prior to the commencement of mining of Mineral Products.

               Optionee shall reclaim the surface of the Property disturbed by its operations hereunder in accordance with applicable federal, state and local rules and regulations.

               Optionee and the Optionor agree to share all data relating to the Property. Upon termination of this agreement, Optionee agrees that it will, within 30 days after the effective date of termination, deliver to the Optionor copies of all raw data regarding the Property in Optionee’s possession and not hitherto delivered to the Optionor. Optionee does not make, and shall not be deemed to have made, directly or indirectly, any express or implied representation or warranty to the Optionor as to the accuracy or completeness of any such data delivered to the Optionor except that it was developed and delivered in good faith. Optionee shall not have any liability arising out of the use of or reliance on any data delivered to the Optionor hereunder so long as Optionee developed and delivered it in good faith. On the Optionor’s written request, Optionee shall transfer to the Optionor custody and possession of drill core, cuttings and pulps for the Optionor’s examination and review however, it is hereby agreed that such drill core, cuttings and pulps belong to the Optionee and must be returned to the Optionee, if so requested by the Optionee unless otherwise agreed between the parties.

               Optionee shall deliever to Optionor on or before May 1 of each year a report in reasonable detail on Optionee’s activities on and in connection with the Property during the preceding calendar year.

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EXHIBIT 10.9

               Optionee shall allow the Optionor or any duly authorized agent or representative of the Optionor to inspect the Property upon giving Optionee 48 hours written notice; provided however that it is agreed and understood that the Optionor or any such agent or representative shall not interfere with Optionee's activities on the Property and shall be at his own risk and that Optionee shall not be liable for any loss, damage or injury incurred by the Optionor or its agent or representative arising from its inspection of the Property, however caused.

8. Assignment. During the Option Term, Optionee may not assign, sell or transfer its rights under this Agreement without Optionor’s prior written consent which shall not be withheld unreasonably. It will be a condition of any assignment under this Agreement that such assignee shall agree in writing to be bound by the terms of this Agreement applicable to the assignor. After Optionee has exercised and closed the Option, and subject to Optionor’s NSR, Optionee may assign, sell or transfer its interest in the Property without Optionor’s consent.

9. Termination. This Agreement shall forthwith terminate in circumstances where:

               a. The Optionee shall fail to comply with any of its obligations hereunder, subject to Force Majeure, and within 30 days of receipt by the Optionee of written notice from the Optionor of such default, the Optionee has not:

                         (i) cured such default, or commenced proceedings to cure such default and prosecuted same to completion without undue delay; or

                         (ii) given the Optionor notice that it denies that such default has occurred.

In the event that the Optionee gives notice that it denies that a default has occurred, the Optionee shall not be deemed to be in default until the matter shall have been determined finally through such means of dispute resolution as such matter has been subjected to by either party; or

               b. The Optionee gives notice of termination to the Optionor, which it shall be at liberty to do at any time after the execution of this Agreement.

               On termination of this Agreement, except on Optionee’s exercise and closing of the Option, Optionee shall be fully liable for and shall pay all costs of maintenance of the Property, including Federal annual mining claim maintenance fees and fees for recording of any notice of intent to hold required to be recorded under applicable law, which have accrued on the termination date or which will accrue within ninety (90) days following the termination date. For example, if the Federal annual mining claim maintenance fees are due and payable on or before September 1 of any year, if this Agreement is terminated on or after June 2 of such year, Optionee shall be fully responsible for and shall pay the Federal annual mining claim maintenance fees which are due and payable on or before September 1 of that year.

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EXHIBIT 10.9

               On termination of this Agreement, Optionee shall have no obligations under this Agreement except such obligations which have accrued on or before the termination date or which expressly survive termination of this Agreement.

               Upon termination of this Agreement under this Section 9, the Optionee shall vacate the Property within a reasonable time after such termination, but shall have the right of access to the Property for a period of six months thereafter for the purpose of removing its chattels, machinery, equipment and fixtures.

10. Representations, Warranties and Covenants of the Optionor. The Optionor represents, warrants and covenants to and with the Optionee as follows:

               a. Optionor is a person validly existing and in good standing under the laws of Nevada and the United States;

               b. Optionor has full power and authority to carry on its business and to enter into this Agreement and any agreement or instrument referred to or contemplated by this Agreement;

               c. Neither the execution and delivery of this Agreement, nor any of the agreements referred to herein or contemplated hereby, nor the consummation of the transactions hereby contemplated conflict with, result in the breach of or accelerate the performance required by, any agreement to which it is a party;

               d. The execution and delivery of this Agreement and the agreements contemplated hereby will not violate or result in the breach of the laws of any jurisdiction applicable or pertaining thereto;

               e. The Agreement constitutes a legal, valid and binding obligation of the Optionor;

               f. The Property is accurately described in Schedule “A”, is in good standing under the laws of the jurisdiction in which it is located and is free and clear of all liens, charges and encumbrances;

               g. The Optionor is the sole recorded and beneficial owner of the Property and has the exclusive right to enter into this Agreement and all necessary authority to transfer its interest in the Property in accordance with the terms of this Agreement;

               h. No person, firm or corporation has any proprietary or possessors interest in the Property other than the Optionor, and no person, firm or corporation is entitled to any royalty or other payment in the nature of rent or royalty on any minerals, ores, metals or concentrates or any other such products removed from the Property other than the United States government or the government of the State of Nevada pursuant to statute;

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EXHIBIT 10.9

notwithstanding any Federal, State or County royalties or net proceeds tax derived from mining operations.

               i. Upon request by the Optionee, and at the sole cost of the Optionee, the Optionor shall deliver or cause to be delivered to the Optionee copies of all available maps and other documents and data in its possession respecting the Property. Nothing will be withheld, hidden, or kept from the Optionee, whether the data or information is held or not by the Optionor;

               j. Subject to performance by the Optionee of its obligations under Section 4, during the Option Period, the Optionee will keep the Property in good standing, free and clear of all liens, charges and encumbrances, will carry out all Mining Operations on the Property in a miner-like fashion. If the Optionee elects to use the mining expertise and consulting services of the Optionor, the Optionor will obtain and maintain all necessary approvals, consents, licenses and permits as are required under Federal, state and local laws, regulations and ordinances; and

               k. Optionor represents that subject to the paramount title of the United States, Optionor is the sole and only owner of the Property; that each of the unpatented claims included in the Property has been validly located, filed and recorded in compliance with the laws of the State of Nevada and of the United States as they relate to location and recordation of such claims; that Optionor has timely complied with all of the filing provisions of the Federal Land Policy and Management Act as they pertain to the unpatented claims included within the Property and that said claims are valid and subsisting mining claims; that Optionor has performed assessment work or fully and timely paid the applicable claim maintenance fee upon said claims through the assessment year ended September l, 2003, and has recorded and filed proof thereof, all of which work, payments, recordings and filings have been completed in accordance with the applicable state and federal statutes pertaining to assessment work; that Optionor’s rights in the Property are not subject to any prior agreement, encumbrance, burden or restriction created by any act or instrument of Optionor; that to the best of Optionor’s knowledge, the Property is free from liens and encumbrances and other adverse claims by third parties; and that the Property is not burdened with any royalties, overriding royalties, net profits interests or payments on production.

11. Title to Property. Upon request, Optionor shall make available to Optionee such abstracts of title and other title records pertaining to the Property which he may have to aid Optionee in any title searching it may wish to undertake. Optionee may, but shall have no obligation to, investigate and cure as it sees fit any defects in title to the Property which Optionor fails to remedy after notice by Optionee. Optionor shall cooperate fully with Optionee in the curing of any such title defects, and Optionee shall reimburse Optionor for Optionor’s actual expenses resulting from its cooperation in this effort. One-half of the expenses incurred by the Optionor and reimbursed by Optionee shall be taken as a credit by Optionee against cash consideration and the NSR payable hereunder to Optionor. Optionee may, but shall have no obligation to, investigate and cure as it sees fit any defects in the title, location, recordation or filing of the unpatented mining claims

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EXHIBIT 10.9

comprising the Property, and Optionor shall cooperate fully with the curing of said deficiencies at the expense of Optionee. Additionally, Optionor authorizes Optionee, at its discretion reasonably exercised and on advance written notice to Optionor, to relocate, amend, restake, refile and rerecord any particular mining claim or claims in the Property or documents associated therewith. Where required for restaking or relocation, Optionor shall execute notices of abandonment of mining claims, and, in turn, Optionee agrees that any relocation, re