EXHIBIT 10.7

TO:      XTRA-GOLD RESOURCES CORP. (THE "CORPORATION")

FROM:    WILLIAM EDWARD (TED) MCKECHNIE ("MCKECHNIE")

                 STOCK CANCELLATION AGREEMENT AND ACKNOWLEDGMENT

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         WHEREAS McKechnie acknowledges that he is the registered holder of Five
Million shares (the "XF SHARES") in the capital stock of Xtra-Gold Resources,
Inc. ("XTRA FLORIDA");

         AND WHEREAS pursuant to a stock exchange transaction between Xtra
Florida and the Corporation (formerly Retinapharma International Ltd. at the
time of such transaction) completed on or about November 21, 2003, McKechnie
exchanged the XF Shares in exchange for Five Million (5,000,000) shares in the
common stock of the Corporation (the "XG SHARES");

         AND WHEREAS on or about November 21, 2003, the Corporation completed a
5:1 forward stock split resulting in the XG Shares being consolidated into
Twenty-five Million (25,000,000) XG Shares;

         AND WHEREAS at the time of issuance of the 25,000,000 XG Shares, the
parties hereto agreed that McKechnie would return a significant portion of such
XG Shares to treasury for cancellation (the "STOCK CANCELLATION"), the amount of
which would be determined and agreed to at a later date;

         AND WHEREAS the parties hereto acknowledge that the primary purpose for
the Stock Cancellation of the XG Shares would be to minimize the dilution on the
Corporation in the event that the Corporation issued further shares in
consideration of future financings, acquisitions or other significant business
transactions involving stock issuances;

         AND WHEREAS on or about December 22, 2004, the Corporation will
complete an acquisition of Goldenrae Mining Company Limited ("GOLDENRAE")
whereby 2,698,350 shares will be issued pro rata to note and debentureholders of
Goldenrae (the "GOLDENRAE ACQUISITION");

         THE UNDERSIGNED PARTIES HEREBY ACKNOWLEDGE AND AGREE that McKechnie
shall return to treasury for cancellation Twenty-three Million (23,000,000) of
the XG Shares following completion of the Goldenrae Acquisition;

         THE UNDERSIGNED PARTIES HEREBY FURTHER ACKNOWLEDGE AND AGREE that
McKechnie shall not be paid any compensation for the Stock Cancellation;

         THE UNDERSIGNED PARTIES HEREBY FURTHER ACKNOWLEDGE AND AGREE that
further Stock Cancellations or transfer of the remaining balance of XG Shares
may occur from time to time at a consideration to be determined and agreed to
between the parties at such time.

         DATED this 22nd day of December, 2004.

                                      XTRA-GOLD RESOURCES CORP.

/s/ William Edward McKechnie          Per: /s/ Paul Zyla
    WILLIAM EDWARD MCKECHNIE               PAUL ZYLA
                                           President and Chief Executive Officer