Unassociated Document

EXHIBIT 10.17

(The undersigned certifies that this document

does not include any social security numbers.)

APN: 06-111-08

Recording Requested by and

When Recorded Mail to:

FENNEMORE CRAIG, P.C.

3003 N. Central Avenue, Suite 2600

Phoenix, Arizona 85012-2913

Attention: Sarah Strunk, Esq.

Mail all real property tax notices to:

Shea Mining & Milling, LLC

Attention: Christopher Boll

P.O. Box 370924

Las Vegas NV 89137

DEED OF TRUST AND SECURITY AGREEMENT WITH ASSIGNMENT OF

RENTS AND FIXTURE FILING

NOTE TO COUNTY RECORDER: THIS INSTRUMENT IS TO BE RECORDED AND INDEXED AS A FIXTURE FILING AS WELL AS A DEED OF TRUST FOR PURPOSES OF THE NEVADA UNIFORM COMMERCIAL CODE.

This DEED OF TRUST AND SECURITY AGREEMENT WITH ASSIGNMENT OF RENTS AND FIXTURE FILING (“Deed of Trust”) is made and effective as of August 21st, 2009, between Shea Mining & Milling, LLC, a Nevada limited liability company (“Trustor”), the address for which is designated as set forth above, Cow County Title Company, as Trustee (“Trustee”), and NJB Mining, Inc., an Arizona corporation (“Beneficiary”).

WITNESSETH:

That Trustor grants the following described real property (“Real Property”), which is situated in the County of Esmeralda, State of Nevada, to Trustee in trust, with power of sale for the benefit of Beneficiary, to have and to hold upon the trusts, covenants and agreements hereinafter set forth:

See Exhibit “A” attached hereto and incorporated by this reference.

TOGETHER WITH:

Buildings, structures and improvements, and building materials, fixtures and equipment to be incorporated into any buildings, structures or improvements;

Goods, materials, supplies, fixtures, equipment, machinery, furniture and furnishings, including without limitation, all such items used for (i) generation, storage or transmission of air, water, heat, steam, electricity, light, fuel, refrigeration or sound; (ii) ventilation, air-conditioning, heating, refrigeration, fire prevention and protection, sanitation, drainage, cleaning, transportation, communications, maintenance or recreation; (iii) removal of dust, refuse, garbage or snow; (iv) transmission, storage, processing or retrieval of information; and (v) floor, wall, ceiling and window coverings and decorations;

Income, receipts, revenues, rents, issues and profits, including without limitation, room rents, minimum rents, additional rents, percentage rents, occupancy and user fees and charges, license fees, parking and maintenance charges and fees, tax and insurance contributions, proceeds of the sale of utilities and services, cancellation premiums, and claims for damages arising from the breach of any leases;

Water and water rights, ditches and ditch rights, reservoirs and reservoir rights, stock or interest in irrigation or ditch companies, minerals, oil and gas rights, royalties, and lease or leasehold interests including, without limitation, those identified on Exhibit “B” attached hereto and incorporated herein by this reference;

Plans and specifications prepared for the construction of any improvements, including without limitation, all studies, estimates, data, and drawings;

Documents, instruments and agreements relating to, or in any way connected with, the operation, control or development of the Real Property, including without limitation, any declaration of covenants, conditions and restrictions and any articles of incorporation, bylaws and other membership documents of any property owners association or similar group;

Claims and causes of action, legal and equitable, in any form whether arising in contract or in tort, and awards, payments and proceeds due or to become due, including without limitation those arising on account of any loss of, damage to, taking of, or diminution in value of, all or any part of the Real Property or any personal property described herein;

Sales agreements, escrow agreements, deposit receipts, and other documents and agreements for the sale or other disposition of all or any part of the Real Property or any of the personal property described herein, and deposits, proceeds and benefits arising from the sale or other disposition of all or any part of the Real Property or any of the personal property described herein;

Policies or certificates of insurance, contracts, agreements or rights of indemnification, guaranty or surety, and awards, loss payments, proceeds, and premium refunds that may be payable with respect to such policies, certificates, contracts, agreements or rights;

Contracts, agreements, permits, licenses, authorizations and certificates, including without limitation all architectural contracts, construction contracts, management contracts, service contracts, maintenance contracts, franchise agreements, license agreements, building permits and operating licenses;

Trade names, trademarks, and service marks (subject to any franchise or license agreements relating thereto);

Refunds and deposits due or to become due from any utility companies or governmental agencies;

All of Trustor’s right, title and interest in and to common elements, development rights, and special declarant rights created pursuant to any condominium declaration recorded against the Property in accordance with applicable law;

Replacements and substitutions for, modifications of, and supplements, accessions, addenda and additions to, all of the personal property described herein;

Books, records, correspondence, files and electronic media, and all information stored therein;

together with all products and proceeds of all of the foregoing, in any form, including all proceeds received, due or to become due from any sale, exchange or other disposition thereof, whether such proceeds are cash or non-cash in nature, and whether represented by checks, drafts, Note or other instruments for the payment of money.

The real property together with the rights and interests of Trustor described above shall collectively be referred to as the “Property”.

FOR THE PURPOSE OF SECURING:

A. Payment of the principal sum of TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000), together with interest thereon, according to the terms of a promissory note, of even date herewith, made by Trustor payable to the order of Beneficiary, according to the tenor and effect of said promissory note and all renewals, extensions, modifications, amendments and substitutions of, or for, said promissory note (“Note”).

B. The expenses and costs incurred or paid by Beneficiary in the preservation and enforcement of the rights and remedies of Beneficiary and the duties and liabilities of Trustor hereunder, including, but not by way of limitation, attorneys’ fees, court costs, witness fees, expert witness fees, collection costs, and costs and expenses paid by Beneficiary in performing for Trustor’s account any obligation of said Trustor under this instrument or under any obligation secured hereby.

C. Payment of additional sums and interest thereon which may hereafter be loaned to Trustor when evidenced by a promissory note or notes which recite that the same is secured by this Deed of Trust.

D. Notwithstanding anything herein to the contrary, this Deed of Trust will not secure any obligations under that certain Environmental Indemnity of even date herewith executed by Trustor in favor of Beneficiary, and Trustor’s obligations thereunder will survive any foreclosure, trustee’s sale or any other similar proceeding hereunder.

E. Performance of each and every term, provision, covenant and condition contained in any loan agreement, credit agreement or any other document or instrument executed by Trustor in favor of Beneficiary relating to the loan evidenced by the Note hereby secured (the Note together with any such agreement, document or instrument shall collectively be referred to as the “Loan Documents”). Trustor acknowledges and agrees that Beneficiary is obligated to make certain future advances, subject to the terms of the Loan Documents and so long as there is no default under the terms of the Loan Documents, and the lien of this Deed of Trust secures repayment of all such future advances with the same priority as if there were made upon the recording of this Deed of Trust.

AND IT IS FURTHER PROVIDED THAT:

1. Compliance with Laws. Trustor shall not commit, suffer or permit any act to be done, or condition to exist, on the Property which violates or is prohibited by any law, statute, code, act, ordinance, order, judgment, decree, injunction, rule, regulation, permit, license, authorization, direction or requirement of any government or subdivision thereof, whether it be federal, state, county or municipal, which is applicable to the Property, or any part thereof, now or at any time hereafter, (including, without limitation, the Americans with Disabilities Act (42 U.S.C. § 12101-12213 and 47 U.S.C. § 225 and 611). The requirements set forth by this section 1 are hereinafter collectively referred to as the “Legal Requirements”.

2. Repair and Maintenance. Trustor agrees to properly care for and keep the Property in its current condition, order and repair; to care for, protect and repair all buildings and improvements situate thereon; not to remove, materially alter, or demolish any buildings or other improvements situate thereon; not to remove, materially alter or demolish any buildings or improvements damaged or destroyed thereon; to complete in a good workmanlike manner any building or other improvement which may be under construction thereon, if applicable; and to pay, when due, all claims for labor performed and for materials furnished therefore; and otherwise to protect and preserve the same; to comply with all Legal Requirements having application to any alterations or improvements made thereon; not to commit or permit any waste or deterioration of said buildings and improvements or of said Property, and to comply with the Clean Air Act, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Resource Conservation Act of 1976, as amended, and the Hazardous Materials Transportation Act, as amended, the Resource Conservation and Recovery Act, as amended, or any other Legal Requirement related to hazardous substances; and to do any other act or acts all in a timely and proper manner, which, from the character or use of the Property may be reasonably necessary to maintain the Property in its current condition, the specific enumerations herein not excluding the general (including, without limitation, the establishment of an equipment replacement reserve for all equipment that is part of the Property).

3. Environmental Compliance.

(a) As used herein, the term “Hazardous Substances” shall mean any or all of the following: (i) any and all hazardous substances, hazardous materials, toxic substances or solid waste as defined in the Clean Air Act, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Resource Conservation Act of 1976, as amended, and the Hazardous Materials Transportation Act, as amended, the Resource Conservation and Recovery Act, as amended, or any other Legal Requirement related to hazardous substances and the regulations promulgated thereunder, (ii) any substance or materials listed as hazardous or toxic in the United States Department of Transportation Table, by the Environmental Protection Agency or any successor agency or under any Federal, state or local laws or regulations, (iii) any asbestos, poly-chlorinated biphenyls, urea formaldehyde foam, explosives or radioactive waste, or (iv) any other chemical, material or substance which is not classified as hazardous or toxic but exposure to which is prohibited, limited or regulated by any Federal, state, local or other governmental authority having jurisdiction over the Property.

(b) Trustor shall comply with any and all Legal Requirements regarding the presence or removal of Hazardous Substances on the Property, shall pay immediately, when due, the costs of removal from the Property of any such Hazardous Substances which are required to be removed pursuant to any Legal Requirement and shall keep the Property free of any lien which may arise pursuant to such Legal Requirements. Trustor shall not, and shall not permit any person or entity to release, discharge, or dispose of any Hazardous Substances on the Property except in compliance with all Legal Requirements and, if the same shall exist, Trustor shall immediately remove or cause to be removed from the Property such Hazardous Substances to the extent required to be removed pursuant to any Legal Requirement.

4. Taxes.

(a) Trustor agrees to pay, at least ten (10) days before default and/or delinquency (i) all taxes and assessments, of any kind or nature, which are assessed against or affect the Property or any part thereof (“Impositions”) and (ii) all monetary obligations which are represented, evidenced or secured by liens, encumbrances, charges and/or claims on said Property, or any part thereof, which appear to have priority over the lien of this Deed of Trust (“Senior Encumbrances”).

(b) In the event that Trustor fails to make any payment required by section 4(a), within the time periods required therein, Beneficiary may pay the same without demand or notice (in which case Beneficiary shall be the sole judge of the legality, validity and/or priority of the obligation so paid and of the amount required to be paid).

5. Appraisals. Trustor hereby agrees to provide Beneficiary, at Beneficiary’s sole option, and at Trustor’s expense, and within thirty (30) days of Beneficiary’s request therefore, an appraisal of the Property which: (i) is in a form and substance acceptable to Beneficiary in the sole and absolute exercise of its discretion; and (ii) is completed by an appraiser acceptable to Beneficiary in the sole and absolute exercise of its discretion. Trustor hereby agrees that Beneficiary may enter onto the Property upon ten (10) days written notice to Trustor to perform its own appraisal of the Property and that Beneficiary will have access to all buildings and/or improvements on the Property so that it can complete that appraisal.

6. Insurance. Trustor agrees to keep all buildings and/or improvements, which are ever located on the Property, and all of the Property, including any personal property that is part of the Property, insured by policies of general liability insurance and insurance providing coverage against loss by fire and/or hazard, and/or flood, which policy(ies) shall have extended coverage endorsements, shall include business interruption provisions, and shall be issued by company(ies) authorized to issue such policy(ies) in the State of Nevada. The terms and amounts of all such policies, and the insurance companies that issue such polices, must be acceptable to Beneficiary in its reasonable discretion. Said insurance shall provide for at least thirty (30) days advance written notice to Beneficiary prior to cancellation. Said insurance shall, at Beneficiary’s sole option, be payable to Beneficiary to the amount of the unsatisfied obligations to Beneficiary hereby secured or include such riders or mortgagee’s endorsements as Beneficiary may require. The policy or policies of said insurance shall be delivered to Beneficiary, as further security, and in default hereof, Beneficiary may procure such insurance, and expend such sum or sums therefore as Beneficiary shall deem necessary. Subject to the terms of the other Loan Documents, so long as no Event of Default (as defined in section 14) has occurred and is continuing, Trustor may settle, compromise or adjust or apply any insurance or other claim without Beneficiary’s prior written consent so long as the amount of the claim (but not the settlement or compromise thereof) is less than $10,000.00. So long as no Event of Default has occurred or is continuing, Beneficiary shall apply all insurance proceeds to the repair and or restoration of the Property upon the satisfaction of the following conditions: i) Trustor shall have delivered written notice to Beneficiary of its intention to commence repairs and restoration within ten (10) business days following the settlement of any claim or claims under any insurance policies relating to the Property; ii) all insurance proceeds are deposited with Beneficiary; iii) within ten (10) business days following the deposit of such insurance proceeds with Beneficiary, Trustor shall have deposited with Beneficiary the amount necessary, if any, to pay the difference between the cost of restoration or repair of the Property and the amount of such insurance proceeds; iv) Trustor shall have delivered to Beneficiary a budget of all costs of reconstruction, repair and or restoration for the Property, acceptable to Beneficiary in the reasonable exercise of its discretion; and v) Beneficiary and all applicable governmental agencies shall have approved the final plans and specifications for the reconstruction, repair or restoration of the Property. Subject to conditions set forth in the foregoing sentence, Beneficiary shall disburse such insurance proceeds as necessary to pay for the reconstruction, repair or restoration of the Property. Upon the occurrence of an Event of Default: Beneficiary shall have the sole right to settle, compromise or adjust any insurance or other claim in such manner as Beneficiary may determine, and for this purpose, Beneficiary may, in its own name or in the name of Trustor, take such action as Beneficiary deems appropriate; any amount collected by Trustor with respect to an insurance or other claim shall be delivered immediately to Beneficiary; the amount collected by Trustor or Beneficiary under any fire or other insurance policy may be applied by Beneficiary upon the indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary, the entire amount so collected, or any part thereof, may be released to Trustor upon such conditions as Beneficiary may impose (such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to the terms of this Deed of Trust).

7. Impound Accounts. Intentionally deleted.

8. Assignment of Rents and Condemnation Proceeds.

(a) Trustor hereby irrevocably and absolutely assigns and transfers to Beneficiary, all rents, issues, income, revenues, royalties and profits derived from the Property, or any business activity conducted thereon, and each and every part thereof, including all present and future leases and rental agreements (“Rents”) reserving unto Trustor a license to collect the Rents prior to written notice to Trustor of any Event of Default, as defined by section 14. Subsequent to such an Event of Default, and written notice to Trustor thereof, the Rents, including those past due, unpaid or undetermined, shall be collected by Beneficiary or its agent, and shall be applied, less costs and expenses of operation and collection, including reasonable attorneys’ fees, to any indebtedness and/or obligation secured hereby, and in such order as Beneficiary shall determine. Rights assigned to Beneficiary under this section 8 may be enforced by Beneficiary without regard to the adequacy of the security hereof or the solvency of Trustor by any one or more of the following methods: (i) appointment of a receiver, (ii) Beneficiary’s taking possession of the Property; (iii) Beneficiary’s collecting any monies payable under leases or rental agreements directly form the parties obligated for payment; (iv) injunctions; and (v) any other method permitted by law. The collection of the Rents, and the application thereof as aforesaid, shall not cure or constitute a waiver of any default or notice of default hereunder or invalidate any act done pursuant to such notice. Trustor and Beneficiary intend that this assignment shall be a present, absolute and unconditional assignment, not an assignment for additional security only, and shall, immediately upon the execution hereof, subject to the license granted above, give Beneficiary, and its agent, the right to collect the Rents and to apply them as aforesaid. Nothing contained herein, nor any collection of rents, issues, profits and income by Beneficiary, or its agent, or a receiver, shall be construed to make Beneficiary a “mortgagee-in-possession” of the Property so long as Beneficiary has not itself entered into actual possession of the Property or shall be construed to be an assumption of liability by Beneficiary under, or a subordination of, the lien of this Deed of Trust, to any tenancy, lease or option. Trustor agrees to provide Beneficiary with updated leases within thirty (30) days of any request by Beneficiary.

(b) Any award of damages in connection with any condemnation for public use of, or injury to the Property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply such monies to the Note, or, in its sole discretion, release such monies received by Beneficiary in the same manner and with the same effect as herein provided for disposition of proceeds of insurance.

9. Performance by Trustee or Beneficiary.

(a) Should Trustor fail to make any payment or perform any act which Trustor is obligated to make or perform hereby, then Trustee, or Beneficiary, at the election of either of them, but without any obligation to do so, without demand or notice to Trustor, or any successor in interest of Trustor and without releasing Trustor from any obligation hereunder, may make such payment or perform such act and incur any liability, or expend whatever amounts, in its absolute discretion, it may deem necessary therefore. All sums incurred or expended by Trustee or Beneficiary, under the terms hereof, shall become immediately due and payable by Trustor to Trustee or Beneficiary when so incurred or expended, and shall bear interest until paid at an annual percentage rate equal to the Default Rate which is set forth by section 14. In no event shall payment by Trustee or Beneficiary be construed as a waiver of the default occasioned by Trustor’s failure to make such payment or payments.

(b) If, during the existence of the trust created hereby, there is commenced or pending any suit or action affecting the Property, or any part thereof, or the title thereto, or if any adverse claim for or against the Property, or any part thereof, is made or asserted, Trustee or Beneficiary may appear or intervene in the suit or action and retain counsel therein and defend same, or otherwise take such action therein as they may be advised, and may settle or compromise same or the adverse claim; and in the behalf and for any of the purposes may pay and expend such sums of money as Trustee or Beneficiary may deem to be necessary. All such sums incurred or expended by Trustee or Beneficiary under the provisions of this section shall become immediately due and payable by Trustor to Trustee or Beneficiary when so incurred or expended and shall bear interest until paid an annual percentage rate equal to the Default Rate which is set forth by section 14.

(c) Trustor agrees to pay and discharge all costs, fees and expenses if incurred in connection with any default by Trustor or the preservation of the trust created hereby, including without limitation (i) reconveyance and foreclosure fees of Trustee, (ii) costs and expenses of Beneficiary or Trustee or any receiver appointed under this Deed of Trust in connection with the operation, maintenance, management, protection, preservation, collection, sale or other liquidation of the trust created hereby or foreclosure of this Deed of Trust, (iii) advances made by Beneficiary to complete or partially construct all or any part of any construction which may have commenced on the Property or otherwise to protect the security of this Deed of Trust, (iv) costs of evidence of title, and (v) the reasonable fees and disbursements of Trustee’s and Beneficiary’s legal counsel and other out-of-pocket expenses; together with interest on all such amounts until paid at the Default Rate.

10. Modifications. At any time, and from time to time, without liability therefore and without notice to Trustor, upon written request of Beneficiary and presentation of this Deed of Trust and the Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby or the effect of this Deed of Trust upon the remainder of the Property, Trustee may (i) reconvey any part of the Property; (ii) consent in writing to the making of any map or plat thereof; (iii) join in granting any easement thereon, or (iv) join in any extension agreement or subordination agreement in connection herewith. Beneficiary may without notice to or consent of Trustor extend the time of payment of any indebtedness secured hereby to any successor in interest of Trustor without discharging Trustor from liability thereon.

11. Reconveyance. Upon receipt of written request from Beneficiary reciting that all sums secured hereby have been paid and upon surrender of this Deed of Trust and the Note secured hereby to Trustee for cancellation and retention, or such other disposition as Trustee, in its sole discretion, may choose, and upon payment of its fees, Trustee shall reconvey, without warranty all portions of the Property which are then encumbered hereby. The recitals in such reconveyance of any matters of fact shall be conclusive proof of the truth thereof. The grantee in such reconveyance may be described in general terms as “the person or persons legally entitled thereto”.

12. Substitution of Trustee. Beneficiary or its assigns may, from time to time, appoint another trustee, or trustees, to execute the trust created by this Deed of Trust or other conveyance in trust. Upon the recording in the appropriate county of such certified copy or executed and acknowledged instrument, the new trustee or trustees shall be vested with all the title, interest, powers, duties and trusts in the Property which are vested in or conferred upon the original trustee. If there be more than one trustee, either may act alone and execute the trusts upon the request of Beneficiary, and all his acts thereunder shall be deemed to be the acts of all trustees, and the recital in any conveyance executed by such sole trustee of such request shall be conclusive evidence thereof, and of the authority of such sole trustee to act in accordance therewith.

13. Due on Sale, etc.

(a) There shall be no “Transfer of Interest” (as defined by section 13(b)) with respect to the Property, without the prior written consent of Beneficiary having first been obtained, and in the event of such a “Transfer of Interest,” then, at the option of Beneficiary, any indebtedness or obligation which is secured hereby shall immediately become due and payable, without demand or notice, irrespective of the maturity dates which may be expressed in any Loan Documents evidencing such indebtedness or obligation.

(b) A “Transfer of Interest” shall be deemed to have occurred with respect to the Property (i) if Trustor, without Beneficiary’s prior written consent, shall (or shall enter into an agreement to), sell, transfer, encumber, create a junior lien, convey or in any manner alienate any interest in the Property or shall be divested of title to the Property in any manner or way, whether voluntarily or involuntarily (except for bona fide leases made in the ordinary course of business), and/or (ii) if Trustor, or member of Trustor if other than an natural person, or any beneficial, legal or equitable interest in Trustor, or any one of them, transferred, alienated, conveyed, hypothecated or encumbered, and/or if the present manager of Trustor is changed without Beneficiary’s prior written consent.

14. Default. The occurrence of any “Event of Default” defined in the Loan Documents (including, without limitation, that certain Term Loan Agreement, of even date herewith, by and between Trustor and Beneficiary (“Loan Agreement”) shall be an Event of Default hereunder including, without limitation: (i) subject to applicable cure periods, failure by Trustor to pay when due any amount which Trustor is required to pay under the Note or any other Loan Documents secured by this Deed of Trust, (ii) subject to applicable cure periods, failure by Trustor to satisfy or perform any obligation secured by this Deed of Trust, other than the payment of money, or failure by Trustor to comply with, satisfy or perform any term, provision, covenant or condition, other than the payment of money as contained in the Loan Documents which default is not cured as allowed in the relevant Loan Document, (iii) the commencement by Trustor of a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to it or its respective debts under the United States Bankruptcy Code or any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official, for any substantial part of its property or the consent by Trustor to any such relief or to the appointment or taking possession by any such official in any involuntary case or other proceeding commenced against Trustor or the admission by Trustor, in writing, of its inability to pay its debts as they come due, (iv) any notice by Trustor that the Deed of Trust no longer secures future advances, or the repudiation and/or cancellation of any guaranty of the Note, and/or (v) any Transfer of Interest shall occur. The term “Default Rate” shall have the meaning therefore set forth in the Note.

15. Power of Sale. Upon the occurrence of an Event of Default, as defined by section 14, and recording of the notice of default and election to sell, as required by Chapter 107 of the Nevada Revised Statutes, then Trustee, its successors or assigns, on demand by Beneficiary shall sell the Property, in whole or in part, in order to accomplish the objectives of these trusts, in the manner following, namely:

(a) Trustee shall first give notice of the time and place of such sale, in the manner provided by the laws of the State for the sale of real property under execution, and may from time to time postpone such sale by such advertisement as it may deem reasonable, or without further advertisement, by proclamation made to the persons assembled at the time and place previously appointed and advertised for such sale, and on the day of sale so advertised, or to which such sale may have been postponed, Trustee may sell the property as so advertised, at public auction, at the time and place specified in the notice, either in the county in which the Property, or any part thereof, to be sold, is situated, or at the principal office of Trustee, in its discretion, to the highest cash bidder. Beneficiary, obligee, creditor, or the holder or holders of the Loan Documents secured hereby may bid and purchase at such sale. Beneficiary may, after recording the notice of breach and election, waive or withdraw the same or any proceedings thereunder, and shall thereupon be restored to its former position and have and enjoy the same rights as though such notice had not been recorded.

(b) Trustee, upon such sale, shall make (without warranty), execute and, after due payment made, deliver to purchaser or purchasers, his or their heirs or assigns, a deed or deeds of the Property so sold which shall convey to the purchaser all the title of Trustor in the Property and shall apply the proceeds of the sale thereof in payment, firstly, to the expenses of such sale, together with the reasonable expenses of this trust, including counsel fees, in a reasonable amount, which shall become due upon any default made by Trustor in any of the payments aforesaid; and also such sums, if any, as Trustee or Beneficiary shall have paid, for procuring a search of the title to the Property, of any part thereof, subsequent to the execution of the Deed of Trust; and in payment, secondly, to the obligations or debts secured hereby, and interest thereon then remaining unpaid, and the amount of all other moneys with interest thereon herein agreed or provided to be paid by Trustor in such order as Beneficiary may elect in its sole discretion; and the balance or surplus of such proceeds of sale it shall pay to Trustor, its successor or assigns.

(c) In the event of a sale of the Property conveyed or transferred in trust, or any part thereof, and the execution of a deed or deeds therefore under such trust, the recital therein of default, and of recording the notice of breach and election to sell, and of the elapsing of the 3-month period, and of the giving of notice of sale, and of a demand by Beneficiary that such sale should be made, shall be conclusive proof of such default, recording, election, elapsing of time, and of the due giving of such notice, and that the sale was regularly and validly made on due and proper demand by Beneficiary; and any such deed or deeds with such recitals therein shall be effectual and conclusive against Trustor, its successors and assigns, and all other persons; and the receipt for the purchase money recited or contained in any deed executed to the purchaser as aforesaid shall be sufficient discharge to such purchaser from all obligation to see to the proper application of the purchase money, according to the trusts aforesaid. With respect to any of the Property which is personal property, Beneficiary shall have, in the jurisdiction in which enforcement of this Deed of Trust is sought, or in any other applicable jurisdiction, all remedies of a secured party under the Nevada Uniform Commercial Code and may require Trustor, on demand, to assemble all such personal property and make the same available to Beneficiary at such places as Beneficiary may select that are reasonably convenient for both parties, whether at the premises of Trustor or elsewhere.

16. Deficiency. Trustor agrees to pay any deficiency arising from any cause after applications of the proceeds of the sale held in accordance with the provisions section 15.

17. Remedies Cumulative and Limitation of Waiver. The rights and remedies of Beneficiary upon the occurrence of one or more defaults by Trustor (whether such rights and remedies are conferred by statute, by rule of law, by this Deed of Trust, or otherwise) may be exercised by Beneficiary, in the sole discretion of Beneficiary, either alternatively, concurrently, or consecutively in any order. The exercise by Beneficiary, or Trustee at the express direction of Beneficiary, of any one or more of such rights and remedies shall not be construed to be an election of remedies nor a waiver of any other rights and remedies Beneficiary might have unless, and limited to the extent that, Beneficiary shall so elect or so waive by an instrument in writing delivered to Trustee. By accepting payment of any sum secured hereby after its due date, Beneficiary does not waive its right either to require prompt payment, when due, of all other sums so secured or to declare default, as herein provided, for failure to so pay.

18. Stamps. If at any time the United States of America, any state thereof or any governmental subdivision of such state shall require revenue stamps to be affixed to the Note or any of the other Loan Documents, or the payment of any other tax paid on or in connection therewith, Trustor shall pay the same with any interest or penalties imposed in connection therewith if Trustor is permitted by law to pay such amount and, if not so permitted then the Note shall immediately be due and payable.

19. Law. Trustor acknowledges and agrees that this Deed of Trust and the other Loan Documents, including provisions with respect to the making of any disbursements, the creation of any monetary obligations and the rights accruing and compensation payable to Beneficiary in connection therewith, shall be governed by and construed in accordance with the laws of the State of Nevada; provided, however, in all instances, Federal Law shall apply to the extent that Beneficiary may have greater rights thereunder.

20. Notice. Except as otherwise provided by law, any notice, request, demand, consent, approval or other communication (“Notice”) provided or permitted under this Deed of Trust, or any other instrument contemplated hereby, shall be in writing, signed by the part giving such Notice and shall be given by personal delivery to the other party or by United States certified or registered mail, postage prepaid, return receipt requested, addressed to the party for whom it is intended at its address as set forth below. Unless otherwise specified, Notice shall be deemed given when received, but if delivery is not accepted, on the earlier of the date delivery is refused or the third day after same is deposited in any official United States Postal Depository. Any party from time to time, by Notice to the other parties given as above set forth, may change its address for purpose of receipt of any such communication.

Beneficiary:	NJB Mining, Inc. Attention: Norman Bellemare 10751 N. Frank Lloyd Wright Blvd., Suite 101 Scottsdale, Arizona 85259 Facsimile: (480) 368-0323
With a Copy To:	Fennemore Craig, P.C. Attention: Sarah Strunk, Esq. 3003 N. Central Avenue, Suite 2600 Phoenix, Arizona 85012-2913 Facsimile: 602-916-5999
Trustor:	Shea Mining & Milling, LLC Attention: Christopher Boll P.O. Box 370924 Las Vegas, NV 89137 Facsimile: ____________________

With a Copy To:	The Law Office of C. Dean Homayouni, Esq. Attention: C. Dean Homayouni, Esq. 7764 Painted Sunset Drive Las Vegas, Nevada 89149 Facsimile: (702) 966-3707
Trustee:	Cow County Title Company Attention: Mr. Tom Arnhart P.O. BOX 610 / 904 East Street Hawthorne, NV 89145 Facsimile: (775) 945-2377

21. No Third Party Beneficiaries. This Deed of Trust is made and entered into for the sole protection and benefit of the parties hereto, and no other person or entity shall be a direct or indirect beneficiary of, or shall have any direct or indirect cause of action or claim in connection with this Deed of Trust or any of the other Loan Documents.

22. No Offset. Under no circumstances shall Trustor fail or delay to perform (or resist the enforcement of ) any of its obligations in connection with any of the Loan Documents because of any alleged offsetting claim or cause of action against Beneficiary (or any indebtedness or obligation of Beneficiary) which has not been confirmed in a final judgment of a court of competent jurisdiction (sustained on appeal, if any ) against Beneficiary, and Trustor hereby waives any such rights of setoff (or offset) which it might otherwise have with respect to any such claims or causes of action against Beneficiary (or any such obligations or indebtedness of Beneficiary), unless and until such right of setoff is confirmed and liquidated by such a final judgment. Trustor further waives any right that it might otherwise have to require a marshaling of any security of Beneficiary or to direct the order in which Beneficiary pursues its rights or remedies with respect to any of its security.

23. Continuation of Payments. Notwithstanding any taking by eminent domain or other governmental action causing injury to, or decrease in value of, the Property and creating a right to compensation therefore, Trustor shall continue to make the required payments of principal and interest on the Note. If, prior to the receipt by Beneficiary of such award or compensation, the Property shall have been sold in any action or proceeding to foreclose this Deed of Trust, Beneficiary shall have the right to receive said award or compensation to the extent of any deficiency found to be due upon such sale, with interest hereon, whether or not a deficiency judgment of this Deed of Trust shall have been sought or recovered, together with reasonable counsel fees and the costs and disbursements incurred by Beneficiary in connection with the collection of such award or compensation.

24. Security Agreement.

(a) With respect to all of the personal property that is included in the description of the Property (“Collateral”), this Deed of Trust shall constitute a security agreement under Article 9 of the Nevada Uniform Commercial Code, and Trustor hereby grants Beneficiary a security interest in the Collateral for the purpose of securing all of Trustor’s obligations under the Note, and grants Beneficiary all rights of a secured party under the provisions of Article 9 of the Nevada Uniform Commercial Code in connection therewith.

(b) Without limiting the generality of any other provision of this Deed of Trust, Trustor further covenants that the Collateral will be kept on or at the Property, that Trustor will not sell or otherwise dispose of the Collateral, that Trustor will keep the Collateral in good condition and repair, that Beneficiary may inspect and examine the Collateral at any reasonable time, that the Collateral is free and clear of any other liens or encumbrances, and that the security interest granted hereby extends to all proceeds and replacements for any or all of the Collateral.

(c) If there is an Event of Default, beneficiary may take possession of any part or all of the Collateral, and thereafter take all actions in connection therewith that it deems necessary or appropriate to protect or preserve the Collateral, require Trustor to assemble the Collateral at a place designated by Beneficiary, sell the Collateral at a public or private sale in such order as Beneficiary may determine (independent of any Trustee’s sale hereunder), and exercise any and all other rights extended to secured parties under the terms of Article 9 of the Nevada Uniform Commercial Code.

(d) Trustor agrees that Beneficiary may file such Nevada Uniform Commercial Code financing statements as Beneficiary deems necessary to perfect the security interest granted hereby.

25. Fixture Filing. This Deed of Trust covers goods which are or are to become fixtures related to the Property, and constitutes a “fixture filing” with respect thereto, showing Trustor to be “debtor” and Beneficiary to be “secured party,” for purposes of the Nevada Uniform Commercial Code.

26. Warranty of Title. Trustor warrants that it is the sole owner of good and marketable unencumbered title to the Property, and Trustor will forever defend the same against all claims and persons whomsoever, unto Beneficiary, its successors and assigns, subject only to the matters approved by beneficiary as acceptable exceptions to title pursuant to the provisions of the closing instruction letter delivered herewith to the title insurance company insuring the lien of this Deed of Trust. All of Trustor’s present and future right, title and interest in the Property shall be subject to the lien and other terms and provisions of this Deed of Trust regardless of the time that any such right, title and interest is created, obtained by or conveyed, transferred or assigned to Trustor.

27. Appointment of a Receiver. Following the occurrence of an Event of Default, a receiver may be appointed, with or without notice, where upon the receiver shall immediately be entitled to possession of all of the Property. Beneficiary’s right to a receiver shall be absolute and unconditional. The receiver may be appointed without regard to the adequacy of any security for the Note and Trustor shall immediately surrender possession of the Property to the receiver upon his appointment. The receiver shall have the right to take possession of the Property, to collect the Rents therefrom, to complete the construction of any structures or improvements in progress thereon, to lease the Property or any part thereof, to operate any business thereon, and to exercise such other rights as may be granted by the court pending such proceedings, and up to the time of redemption of issuance of a Trustee’s deed. Rents shall be applied to the costs and expenses of the receiver and the receivership, including any costs of construction, and the balance shall be applied in the manner provided for herein. The receiver shall have the power to borrow money from any person, including Beneficiary, for expenses of operating, preserving, maintaining and caring for the Property, and completing the construction in progress of any improvements or structures upon the Property, and all such borrowed sums, together with interest thereon, whether expended or not, shall be added to the obligations secured hereby. In addition, any costs incurred, or advances made, by beneficiary in connection with the implementation or operation of the receivership, shall be added to the obligations secured hereby, bear interest at the Default Rate, be guaranteed by any guarantee(s) now or thereafter relating to the obligations secured hereby and be secured by this Deed of Trust. Trustor hereby waives any right it may have under Nevada. Revised Statutes § 107.100 to require Beneficiary to make any showing or meet any obligation as a condition to the appointment of a receiver.

28. Waiver of Jury Trial. Trustor and Beneficiary each (a) covenants and agrees not to elect a trial by jury with respect to any issue arising out of this instrument or the relationship between the parties as borrower and lender that is triable of right by a jury and (b) waives any right to trial by jury with respect to such issue to the extent that any such right exists now or in the future. This waiver of right to trial by jury is separately given by each party, knowingly and voluntarily with the benefit of competent legal counsel.

29. Waiver of Marshaling. The extent permitted by law Trustor waives (i) the benefit of all present or future laws providing for any appraisement before sale or any portion of the Property, (ii) all rights of redemption, valuation, appraisement, stay of execution, notice of election to mature or declare due the whole of the debts and/or obligations secured by this Deed of Trust and marshaling in the event of foreclosure of the lien created by this Deed of Trust, (iii) all rights and remedies which Trustor may have or be able to assert by reason of the laws of the State of Nevada pertaining to the rights and remedies of sureties, (iv) the right to assert any statute of limitations as a bar to the enforcement of the lien of this Deed of Trust or to any action brought to enforce the Note or any other obligation secured by this Deed of Trust, (v) any rights, legal or equitable, to require marshaling of assets or to require upon foreclosure sales in a particular order, including any rights under Nevada Revised Statutes Beneficiary shall have the right to determine the order in which any or all of the Property shall be subjected to the remedies provided by this Deed of Trust. Beneficiary shall have the right to determine the order in which any or all portions of the indebtedness and obligations secured by this Deed of Trust are satisfied from the proceeds realized upon the exercise of the remedies provided by this Deed of Trust.

30. Certification of Loan Documents. Within ten (10) days after a request from Beneficiary, Trustor shall deliver to Beneficiary a written statement, signed and acknowledged by Trustor, certifying to Beneficiary or any person designated by Beneficiary, as of the date of such statement (i) that the Loan Documents are unmodified and in full force and effect (or if there have been modifications, that the Loan Documents are in full force and effect as modified and setting forth such modifications), (ii) the unpaid principal balance of the Note, (iii) the date to which interest under the Note has been paid, (iv) that Trustor is not in default in paying the indebtedness or in performing or observing any of the covenants and agreements contained in this Deed of Trust or any other Loan Document (or, if Trustor is in default, describing such default in reasonable detail), (v) whether or not there are then existing any offsets or defenses known to Trustor against the enforcement of any right or remedy of Beneficiary under the Loan Documents, and (vi) any additional facts requested by Beneficiary. Failure to timely issue the requested certificate shall, at the election of Beneficiary, be an Event of Default by Trustor.

31. Miscellaneous.

(a) Trustor hereby waives, to the fullest extent lawfully allowed, the benefit of any homestead, appraisement, evaluation, stay and extension laws now or hereafter in force.

(b) This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns. It is expressly agreed that the trust created hereby is irrevocable by Trustor.

(c) If more than one corporation, partnership or other entity shall execute this Deed of Trust, then each person and entity shall be fully liable for all obligations of Trustor hereunder, and such obligations shall be joint and several. Trustor acknowledges that this Deed of Trust, the Note, and the Loan Agreement and all other related loan documents are assignable by Beneficiary and hereby acknowledges and consents to any and all future assignments.

(d) In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. The term “Beneficiary” includes any future holder of the Note secured hereby. The term “Trustor” includes the term “Grantor.”

(e) Trustor hereby appoints Beneficiary the attorney-in-fact of Trustor to prepare, sign, file and record one or more financing statements; any documents of title or registration, or like papers, and to take any other action deemed necessary, useful or desirable by Beneficiary to perfect and preserve Beneficiary’s security interest against the rights or interests of third persons. The power vested in said attorney-in-fact is and shall be deemed to be coupled with an interest and irrevocable.

(f) If any provision of this Deed of Trust or its application to any person or circumstances is held invalid, the other provisions hereof or the application of the provision to other persons or circumstances shall not be affected.

(g) The captions or headings at the beginning of each section hereof are for convenience of the parties and are not a part of this Deed of Trust.

(h) Time is of the essence of each provision of this Deed of Trust.

(i) Covenants numbered 1, 3, 4, 5, 6, 7, 8 and 9 of Nevada Revised Statutes § 107.030 are incorporated herein by reference. The rate of interest for Covenant Number 4 shall be the Default Rate (defined in the Note). The percent of counsel fees under Covenant No. 7 shall be reasonable. Except for Covenants Numbers 6, 7 and 8, to the extent that any terms of this Deed of Trust are inconsistent with such statutory covenants, the terms of this Deed of Trust will control. Covenants Numbers 6, 7 and 8 shall control over the express terms of any inconsistent terms of this Deed of Trust.

(j) This Agreement shall be governed by and construed solely and exclusively in accordance with the laws of the State of Nevada (without regard to the conflicts of laws provisions thereof). The parties consent and submit to the sole and exclusive jurisdiction of the courts of the State of Nevada and the United States District Court for the District of Nevada, venue solely and exclusively in Clark County, Nevada, concerning any action arising under or on account of this Agreement. In the event of litigation arising out of the subject matter of this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and related costs and expenses. If the parties resort to legal action for the enforcement or interpretation of this Agreement or for damages on account of a breach hereof, the prevailing party shall be entitled to an award of its fees and costs (whether taxable or not), including, without limitation, expert witness fees, all litigation related expenses, and reasonable attorneys’ fees incurred in connection with such action, which award shall be made by the court, not a jury. In determining which party is the prevailing party, (i) the term “prevailing party” means the net winner of the dispute, taking into account the claims pursued, the claims on which the pursuing party was successful, the amount of money sought, the amount of money awarded, and offsets or counterclaims pursued successfully by the other party.

(k) This Deed of Trust secures future advances, as defined in NRS §106.320, and is to be governed by NRS §§ 106.300 to 106.400, inclusive. The maximum principal amount to be secured hereby is Two Hundred Percent (200%) of the stated principal amount of the Note.

[Signature Page Follows]

IN WITNESS WHEREOF, Trustor has executed this Agreement as of the day and year first above written.

TRUSTOR:

Shea Mining & Milling, LLC,
a Nevada limited liability company

By:	/s/ Christopher Boll
	Christopher Boll, Managing Member

STATE OF ______________

}

} ss

COUNTY OF ___________

}

This instrument was acknowledged before me on August 21, 2009, by Christopher Boll, as Managing Member of Shea Mining & Milling, LLC, a Nevada limited liability company.


	NOTARY PUBLIC

EXHIBIT “A”

LEGAL DESCRIPTION

All that certain real property situate in the County of Esmeralda, State of Nevada, more particularly described as follows:

Township 3 North, Range 40 East, M.D.B.&M.

Section 2: SW ¼ of NW ¼; W ½ of SW ¼

Section 3: S ½ of NE ¼; SE ¼; SE ¼ of NW ¼; E ½ of SW ¼

Section 10: NE ¼; SE ¼; E ½ of NW ¼; E ½ of SW ¼

Section 11: W ½ of W ½; SE ¼ of NW ¼

Section 14: NW ¼ of NW ¼

Excepting therefrom that portion of the W ½ of the W ½ of said Section 11, heretofore deeded to Southern California Edison Company, by a deed recorded November 7, 1967 in Book 3-X of Deeds, page 164 as File No. 35538 Esmeralda County, Nevada records and described as follows:

Beginning at a found lava rock 9 inches by 14 inches by 15 inches high set for the Southwest corner of said Section 11, said Southwest corner of Section 11, bears North 85°43'34" East along the South line of Section 10, Township 3 North, Range 40 East, M.D.B. & M., from a lava rock mound set for the Southwest corner of said Section 10, thence North 11°16'34" East 2512.91 feet to the true point of beginning of this description; Thence North 83°30'00" East 300.00 feet; Thence North 06°30'00" West 197.50 feet to a point hereinafter referred to as Point "A"; Thence continuing North 06°30'00" West 252.50 feet; Thence South 83°30'00" West 300 feet; Thence South 06°30'00" East 450 feet to the true point of beginning.

ASSESSOR’S PARCEL NUMBER FOR 2009-2010: 06-111-08

EXHIBIT “B”

WATER RIGHTS

Certificated Permits 30804 and 30086

on file with the Nevada State Engineer.

Reporting Requirements

The Permittee shall submit quarterly reports which are due to the Division on or before the 28th day of the month following the quarter and must contain the following:

Monitoring results for the sump identified in Part I.D.2, reported on NDEP Form 0590 or equivalent;

Analytical results of the solution collected from monitoring locations identified in Parts I.D.5 and I.D.6 reported on NDEP Form 0090 or equivalent;

Analytical results of the solution collected from the monitoring location identified in Part I.D.7 reported on NDEP Form 0190 or equivalent;

Dry weight and source of ore or feed material received in accordance with Part I.D.3.

Dry weight of spent process solids for disposal or reuse off-site and destination in accordance with Part I.D.4.

Volume of process liquids for disposal and destination in accordance with Parts I.D.5 and I.D.6.

Water level for the monitoring well identified in Part I.D.7;

Analytical results of the MWMP, ANP/AGP and TCLP-8 testing for the materials identified in Parts I.D.3 and I.D.4, reported on NDEP Form 0090 or equivalent; and

A record of spills and releases, and the remedial actions taken in accordance with the approved Emergency Response Plan on NDEP Form 0490 or equivalent.

Facilities which have not initiated mining or construction, must submit a quarterly report identifying the status of mining or construction. Subsequent to any noncompliance or any facility expansion which provides increased capacity, the Division may require an accelerated monitoring frequency.

The Permittee shall submit an annual report by February 28th of each year, for the preceding calendar year, which contains the following:

Water level data for and analytical results of water quality samples collected from, the water supply well identified in I.D.1 reported on NDEP Form 0190 or equivalent;

A synopsis of spills and releases on NDEP Form 0390 or equivalent;

A brief summary of site operations, including the number of tons of ore or feed material processed during the year, construction and expansion activities and major problems with the fluid management system;

A table of total monthly precipitation amounts reported for the five-year history previous to the date of submittal;

An updated version of the facility monitoring and sampling procedures and protocols;

Lease Agreement, page 34

An updated evaluation of the closure plan using specific characterization data for each process component with respect to achieving stabilization; and

Graphs of pH, total dissolved solids (TDS), sulfate as SO4, chloride, nitrate (NO3 + NO2 as nitrogen), WAD cyanide, fluoride, zinc, and arsenic concentration (as applicable), versus time for all fluid sampling points. These graphs shall display a five-year history previous to the date of submittal. Additional constituents may be required by the Division if deemed necessary.

Spill Reporting Requirements: The following applies to facilities with an approved Emergency Response Plan. If a site does not have an approved Emergency Response Plan, then all spills must be reported as per NAC 445A.347.

A release directly into surface or groundwater of any quantity of pollutant, hazardous waste or contaminant must be reported to the Division as soon as possible, but no later than 5 P.M. of the first working day after knowledge of the release. An oral report shall be made by telephone to 888-331-6337 for in-State callers or (775) 687-9485 for out-of-State callers, and a written report shall be provided within ten (10) days in accordance with Part II.B.4.b.

A release of a substance in a quantity equal to or greater than that covered by 40 C.F.R. Part 302.4 must be reported as required by NAC 445A.347 and Part II.B.3.a.

A release to soil or land surfaces of solutions containing a pollutant, hazardous waste or contaminant and the quantity is equal to or exceeds five hundred (500) gallons, report as per Part II.B.3.a. Report smaller spills quarterly on NDEP Form 0390 or equivalent.

Petroleum Products: If a release enters a surface water or is discovered on or in groundwater, or if the quantity is equal to or greater than one hundred (100) gallons released to soil or land surfaces, report in the time frame specified in Part II.B.3.a. Smaller spills, greater than twenty-five (25) gallons but less than 100 gallons, released to soil or land surfaces, or if discovered in at least three (3) cubic yards of affected soil, are reported quarterly on NDEP Form 0390 or equivalent.

The Permittee shall report to the Administrator any noncompliance with the permit.

Each such event shall be reported orally by telephone to (775) 687-9400, not later than 5 P.M. of the next regular work day from the time the Permittee has knowledge of the circumstances. This report shall include the following:

Name, address, and telephone number of the owner or operator;

ii.

Name, address, and telephone number of the facility;

iii.

Date, time, and type of incident, condition, or circumstance;

iv.

If materials released, identify material and report total gallons and quantity of contaminant;

Human and animal mortality or injury;

vi.

An assessment of actual or potential hazard to human health and the environment outside the facility; and

vii.

If applicable, the estimated quantity of material that will be disposed and the disposal location.

A written summary shall be provided within ten (10) days of the time the Permittee makes the oral report. The written summary shall contain:

Lease Agreement, page 35

A description of the incident and its cause;

ii.

The periods of the incident (including exact dates and times);

iii.

Whether the cause and its consequences have been corrected, and if not, the anticipated time each is expected to continue; and

iv.

The steps taken or planned to reduce, eliminate, and prevent recurrence of the event.

The Permittee shall take all available and reasonable actions, including more frequent and enhanced monitoring to:

Determine the effect and extent of each incident;

ii.

Minimize any potential impact to the waters of the State arising from each incident;

iii.

Minimize the effect of each incident upon domestic animals and all wildlife; and

iv.

Minimize the endangerment of the public health and safety which arises from each incident.

Administrative Requirements

A valid permit must be maintained until permanent closure is complete. Therefore, unless permanent closure has been completed, the Permittee shall apply for permit renewal not later than one-hundred twenty (120) days before the permit expires.

All reports and other information requested by the Administrator shall be signed and certified as required by NAC 445A.231.

When ordered consistent with Nevada Statutes, the Permittee shall furnish any relevant information in order to determine whether cause exists for modifying, revoking and reissuing, or permanently revoking this permit, or to determine compliance with this permit.

The Permittee shall maintain a copy of, and all modifications to, the current permit at the permitted facilities at all times.

The Permittee is required to retain during operation, closure and post-closure monitoring, all records of monitoring activities and analytical results, including all original strip chart recordings for continuous monitoring instrumentation, and all calibration and maintenance records. This period of retention must be extended during the course of any unresolved litigation.

The provisions of this permit are severable. If any provision of this permit, or the application of any provision of this permit to any circumstance, is held invalid, the application of such provision to other circumstances, and the remainder of this permit, shall not thereby be affected.

The Permittee is authorized to manage fluids and solid wastes in accordance with the conditions of this permit. Issuance of this permit does not convey property rights of any sort or any exclusive privilege; nor does it authorize any injury to persons or property, any invasion of other private rights, or any infringement of Federal, State or local law or regulations. Compliance with the terms of this permit does not constitute a defense to any order issued or any action brought under the Water Pollution Control Statutes for releases or discharges from facilities or units not regulated by this permit. NRS 445A.675 provides that any person who violates a permit condition is subject to administrative or judicial action provided in NRS 445A.690 through 445A.705.

Division’s Authority

The Permittee shall allow authorized representatives of the Division, at reasonable times, and upon the presentation of credentials to:

Enter the Permittee’s premises where a regulated activity is conducted or where records are kept per the conditions of this permit;

Have access to and copy any record that must be kept per the conditions of this permit;

Inspect any facilities, equipment (including monitoring and control equipment), practices, or operations regulated by this permit; and

Sample or monitor for any substance or parameter at any location for the purposes of assuring permit and regulatory compliance.

Sampling and Analysis Requirements

Samples and measurements taken for the purpose of monitoring shall be representative of the monitored activity.

Lease Agreement, page 36

For each measurement or sample taken pursuant to the conditions of this permit, the Permittee shall record the following information:

The exact place, date, and time of the inspection, observation, measurement, or sampling; and

The person(s) who inspected, observed, measured, or sampled.

Samples must be taken, preserved, and labeled according to Division approved methods.

Standard environmental monitoring chain of custody procedures must be followed.

Samples shall be analyzed by a laboratory certified by the State of Nevada. The Permittee must identify the certified laboratory used to perform the analyses, laboratory reference number, sample date and laboratory test date in quarterly reports.

The accuracy of analytical results, unless otherwise specified, shall be expressed in mg/L and reliable to at least two (2) significant digits. The analytical methods used must have a lower level of detection equal to or less than one-half the reference value for Profile I constituents. Profile II constituents that have established reference values shall be quantified using an analytical method with a lower level of detection equal to or less than the reference value.

Permit Modification Requirements

Any material modification must be reported by submission of a new application, or, if such changes will not violate the limitations specified in the permit, by notice to the permit issuing authority of such changes. Any change which materially modifies, as defined in NAC 445A.365, the permitted facility must comply with NAC 445A.392, NAC 445A.4155, NAC 445A.416, and NAC 445A.417.

Prior to the commencement of mining activities at any site within the State which is owned or operated by the Permittee but not identified and characterized in the application, the Permittee shall submit to the Division a report which identifies the locations of the proposed mine areas and waste disposal sites, and characterizes the potential of mined materials to release pollutants. Prior to development of these areas the Division shall determine if any of these new sources will be classified as process components and require engineered containment as well as permit modification.

The Permittee must notify the Division in writing at least thirty (30) days before the introduction of process solutions into a new process component or into an existing process component which has been materially modified, or of the intent to commence active operation of that process component.

The Permittee must obtain a written determination from the Administrator of any planned material modification(s) as to whether it is considered a permit modification.

The Permittee must give advance notice to the Administrator of any planned changes or activities which are not material modifications in the permitted facility that may result in noncompliance with permit requirements.

Prepared by:	Rob Kuczynski, P.E.
Date:	Month XX, 2010
Permit Revision 00:	2010 Renewal and change of Permittee and facility name.

Lease Agreement, page 37

EXHIBIT “F”

Fact Sheet

(Draft)

Permittee Name: Liberty Processing, LLC

Project Name: Liberty Precious Metal Testing and Processing Facility

Permit Number: NEV2010101 (2010 New Permit)

A.	Location and General Description

Location: The Liberty Precious Metal Testing and Processing Facility (Liberty Process Facility) is located on private land in southern Nye County, approximately 76 miles southeast (by air) of Beatty, Nevada and approximately 36 miles northwest (by air) of Pahrump, Nevada. The process facility is located in the Amargosa Valley, within a portion of Township 17 South, Range 40 East, Section 1, Mount Diablo Baseline and Meridian (MDB&M).

Site Access: From Beatty: Proceed on US-95 south for a distance of 29 miles to the junction of SR-373. Proceed south on SR-373 for a distance of approximately 10 miles to the intersection of Mecca Rd. Proceed west on Mecca Rd. approximately 5 miles to the intersection of Cottonwood Rd. Proceed north on Cottonwood Rd. for a distance of approximately 1 mile to the entrance of the Liberty Process Facility, located on the east side of Cottonwood Rd. From Pahrump: Proceed on SR-160 north for a distance of 27 miles to the Junction of US-95. Proceed on US-95 north for a distance of 16 miles to the junction of SR-373. Proceed south on SR-373 for a distance of approximately 10 miles to the intersection of Mecca Rd. Proceed on Mecca Rd. west approximately 5 miles to the intersection of Cottonwood Rd. Proceed on Cottonwood Rd. north for a distance of approximately 1 mile to the entrance of the Liberty Process Facility, located on the east side of Cottonwood Rd.

General Description: The Permittee intends to operate the Liberty Process Facility as a testing and toll milling facility to chemically extract precious metals from off-site ores and other feed material. The authorized process rate is less than 18,500 tons of ore annually and the expected life of the facility is less than five years. Processing of any material designated as or determined to be hazardous is strictly prohibited.

The Liberty Process Facility is designed to be operated and closed without any discharge or release in excess of those standards established by regulation except for meteorological events which exceed the 24-hour, 25-year design storm event.

Permitting History: Water Pollution Control Permit (WPCP) NEV2003104, was first issued to Franklin Lake Resources Inc. (FLRI) for the FLRI Pilot/Test Facility in April 2007. The WPCP became effective on May 11, 2007 and expired on May 11, 2009. The pilot facility was designed to test and evaluate various precious metal extraction technologies on ore obtained and transported from FLRI’s small mine near Death Valley Junction, California.

Pursuant to Nevada Administrative Code (NAC) 445A.411, a pilot or testing facility permit may not exceed two (2) years from the effective date. Testing beyond two (2) years requires submittal of a permit application in accordance with NAC 445A.394 through 445A.398.

Lease Agreement, page 38

Franklin Lake Resources Inc. was dissolved in 2009 and restructured as Liberty Processing, LLC (Liberty). Since the expired pilot/test facility permit could not be renewed, Liberty submitted a fee and application materials for a Water Pollution Control Permit (WPCP) to chemically process less than 18,250 tons per year. The Permit was assigned a new identification number (WPCP NEV2010101) and the expiration date will be five years after the initial Pilot Facility Permit May 11, 2009 expiration date.

Synopsis

Ore Characterization: As stated previously, the Permittee intends to operate the Liberty Process Facility as a testing and toll milling facility. Ores and other process feed material from in-state sources and processed at the Liberty Process Facility must be obtained from Nevada-permitted facilities; otherwise each source will require incorporation into the Liberty WPCP as a Major Modification. Ores and other process feed material from out-of-state and processed at the Liberty Process Facility must be obtained from facilities licensed or permitted by the state of origin.

Prior to the receipt of any ore or other process feed material by the Permittee, the material must be characterized for constituents present, the potential for acid generation and the potential to degrade waters of the State. The Liberty Process Facility is prohibited from accepting, stockpiling or processing any hazardous material at any time, regardless of the state of origin. The Permittee must have written certification from a certified environmental manager (CEM) or equivalent, currently registered and in good standing with the state of origin and not affiliated with the Permittee. The certification must state that the ore or other process feed material is not hazardous pursuant to the regulations of the state of origin. In addition, the written certification and characterization results must be submitted to BMRR prior to the receipt of the material by the Permittee.

As its initial entry into the toll milling sector, the Permittee intends to reprocess small batches (approximately 1,000 tons) of spent heap leach pad material obtained from the closed Morningstar Mine in Nipton, California for precious metal recovery. The mine operated a small cyanide heap leach facility until about 1994, when it closed due to environmental issues. Before the receipt, stockpiling and processing of any of the Morningstar material at the Liberty Process Facility, BMRR will require the material to be characterized and certified as non-hazardous (pursuant to California regulations) by a California-registered CEM in good standing and not affiliated with the Permittee.

Residues generated during the reprocessing will be collected in “super sacks” or barrels and transported to U.S. Ecology in Beatty, Nevada for disposal or according to the Permittee, transported to a cement plant in California for use in the manufacture of pozzolan cement.

Ore Delivery and Stockpiling: Ore (or other process feed material) certified as non-hazardous, is delivered by truck to the Liberty Process Facility in super sacks or barrels which are stored on an outdoor concrete stockpile pad or a dedicated stockpile area inside the process facility. The stockpile pad is a 20 ft by 40 ft reinforced concrete pad surrounded by a 6-inch-high stem wall, adjacent to a 100 ft by 20 ft reinforced concrete pad with a 6-inch-high stem wall used for the temporary storage of process tailings.

Lease Agreement, page 39

Liberty Process Facility and Containment: With the exception of the feed hopper and thickener, process components are located inside a 76 ft by 140 ft steel building with a reinforced concrete floor surrounded by a 6-in high stem wall. The facility is comprised of a 76 ft by 122 ft process area with the remaining area dedicated to wet laboratory, fire assay and reagent storage. Secondary containment within the process building is approximately 35,000 gal, almost three times the required 12,950 gal minimum containment volume.

The floor is graded to a centrally located floor drain which drains to a 500 gallon (gal) covered sump located outside the building. A pump and float switch have been installed within the sump to ensure there is no overflow of solution. Solution collected in the sump is pumped directly to a 5,000 gal holding tank inside the building for return back to the process. The pad, sump and containment areas are all coated with an epoxy-based, acid resistant material.

Process components within the Liberty Process Facility are discussed further under the sections “Material Sizing and Gravity Separation Circuit”, “Froth Flotation Circuit”, “Precious Metal Leaching Circuit”, “Precious Metal Recovery Circuit” and “Water Clarification Circuit”. As a toll milling facility, utilization of some or all of the process circuits and components is dependent on the physical and chemical characteristics of the material as well as the mineralogy of the material to be processed.

Material Sizing and Gravity Separation Circuit: The Material Sizing and Gravity Separation Circuit is comprised of a hopper/vibrating feeder, wet trommel screen, vibrating deck screen, spirals, centrifugal concentrators and various conveyance devices.

Process feed material is dumped into the feed hopper located outside the building. The hopper discharges the material onto a vibrating feeder where it is then conveyed to a trommel screen for separation into various size fractions. Clarified make-up water is introduced to the feed end of the trommel to optimize size separation efficiency and to create a slurry for subsequent gravity separation operations. Undersize material from the trommel is discharged onto a vibrating wet screen deck for additional size classification, while the oversize material (including any tramp material) is discharged and conveyed to a designated temporary tailings storage area (a contained area within the process building) where it is allowed to dry under natural conditions. Once dry, the tailings are loaded into super sacks or barrels for shipment off site for additional processing and/or disposal.

The screen undersize material is pumped from a sump under the vibrating screen deck and discharged to the bank of spiral concentrators for gravity concentration. The spiral concentrators generate concentrate, midlings and tailings fractions through the manipulation of splitter gates at the spiral discharge.

The concentrate fraction is the heaviest and contains the highest precious metal content and is conveyed to its own dedicated precious metal leaching circuit. Refer to the section “Precious Metal Leaching Circuit” for additional details.

Lease Agreement, page 40

The midlings fraction is the next heaviest and contains lesser amounts of precious metals and other metals of interest. The midlings are conveyed to its own dedicated precious metal leaching circuit. Refer to the section “Precious Metal Leaching Circuit” for additional details.

The tailings stream, or waste material, is the largest by volume and is either discharged directly to a secondary particle separation system for dewatering and loading into “super sacks” or barrels for additional off-site processing and/or disposal or conveyed to a froth flotation circuit for additional precious metal recovery. Refer to the section “Froth Flotation Circuit” for additional details.

Finer particles remain in the water stream and are sent to a water clarification system for polishing (i.e. settling out of solids) before the water is returned to the process water storage tank for use as make-up water. Refer to the section “Water Clarification Circuit” for additional details.

Froth Flotation Circuit: Depending on the physical, chemical and mineralogical characteristics of the material processed, a froth flotation circuit is available for added process flexibility. Initially, the Permittee intends utilize the Froth Flotation Circuit to recover additional precious metal values from the spiral tailings fraction. The flotation circuit is comprised of an agitation/conditioning tank, flotation cells, process pumps and sumps, and flotation reagent mixing, storage and handling equipment.

Rougher spiral tailings report to the conditioning tank, where a flotation collector is added to the pulp/slurry to selectively alter the surface chemistry of the fine gold, silver and pyrite particles present in the spiral tailings (above). The entire Froth Flotation Circuit is located within the existing fluid management system inside the Liberty Process Facility.

The conditioned tailings report to a pumpbox where a frothing agent is added followed by the flotation cells where compressed air is injected to generate the froth. In theory, the gold, silver and pyrite particles will attach to the froth and float to the surface, where they collect and are mechanically removed as a flotation concentrate. Depending on the performance of the flotation circuit, sufficient space is available within the building for the installation and operation of additional flotation cells for further scavenging of the flotation tailings.

The flotation concentrate is conveyed to the Precious Metal Recovery Circuit (below) for precious metal recovery. The flotation tailings are discharged directly to the secondary particle separation system for dewatering and loading into super sacks or barrels for additional off-site processing and/or disposal.

Precious Metal Leaching Circuit: Gravity or flotation concentrates and midlings are conveyed to separate leach circuits for precious metal recovery. Bench scale leach tests will be performed to determine the optimum leach reagents, optimum residence time, and optimum temperature. These are the only circuits using cyanide. Components containing cyanide are segregated from the remainder of the process system by separate containment curbs and have a dedicated spill containment sump. Sodium hydroxide is used for pH control and cyanide solution is filtered and returned to the recovery process where possible. Solutions that can no longer be recycled are destroyed using hydrogen peroxide.

Lease Agreement, page 41

Once leaching has been completed, leach solutions are filtered through a plate and frame filter. The filter cake from this system will be neutralized, characterized, and disposed offsite. The pregnant solution (filtrate) from this system is pumped to the Precious Metal Recovery Circuit.

Precious Metal Recovery Circuit: Several different components may be used individually or in conjunction with each other for precious metal recovery. Components include metal precipitation, carbon recovery, a carbon column, an ion exchange column, and electrowinning. In all cases spent process fluids are returned to the process where possible or neutralized, characterized and disposed of at an approved off-site facility. Any cleaned process water that is not recycled is evaporated. Any solid residues generated are collected, characterized and then disposed of at an approved off-site facility.

In the metal precipitation process, zinc dust, aluminum powder, lead acetate, lead nitrate, hydrazine, oxalic acid, ferrous sulfate, sodium formate, or ferric chloride may be added to the pregnant solution for precious metal precipitation. The precipitate generated is then filtered with a plate and frame filter.

The carbon recovery process includes a mix tank in which the pregnant solution would be introduced to granular activated carbon for metal recovery from solution. The carbon column process consists of columns loaded with activated carbon through which the pregnant solution is pumped counter-current, resulting in precious metal adsorption onto the carbon.

All precipitates from the loaded carbon, loaded resin, and electrowinning cathode sludge are processed in house. The carbon is chemically stripped for regeneration and reuse whenever possible. Carbon that can no longer be regenerated is collected, characterized and disposed of at an approved off-site facility.

The ion exchange column process consists of columns loaded with ion exchange resins to selectively strip the precious metals from solution. The resins that may be used include anionic, cationic, and chelating (complexing) resins. The ion exchange resin is chemically regenerated for reuse however when the resin reaches its life expectancy, the resin is dried, characterized and disposed of at an approved off-site facility. The collected precipitate is smelted off-site for residual metal recovery.

For the electrowinning process, the Permittee proposes to utilize electrically charged graphite plates suspended in the pregnant solution with a low-voltage DC current applied to the plates. Precious metals collect on the cathode electrodes and are then periodically scraped off. Cathode sludge is chemically cleaned, reduced and dried for smelting in a fire assay furnace for residual metal recovery.

Water Clarification: The Water Clarification Circuit receives process water from the gravity concentration circuit for the sedimentation of suspended solids and the return of clean (clarified) water to the gravity circuit. The clarification circuit includes hydrocyclones, clarifiers, water holding and decant tanks.

Lease Agreement, page 42

The water holding and decant tanks are large open top tanks with 10,000 to 20,000 gallon holding capacity. Water is pumped to the first tank and as the suspended solids settle, water decants to the next tank. The final tank in series is referred to as “fresh” water make-up and holding tank where make-up water from a well can be added.

Flocculants and coagulants may be used in the Water Clarification Circuit to assist in collection and settling of suspended solids. All process solids and fluids used in the beneficiation process will be kept within the process building until characterized and disposed of at an approved off-site facility.

C.	Receiving Water Characteristics

The Amargosa Valley is located within a typical basin and range geomorphologic province. The valley floor consists of alluvial fill material and the surrounding range front is comprised of tertiary volcanics.

The depth to groundwater beneath the Liberty Process Facility is 95 feet as determined from groundwater monitoring well MW, which is located 150 feet southeast and downgradient of the process building and ore stockpile area. The make-up water well is upgradient of the Liberty Process Facility, approximately 750 feet northeast of the process building.

The water quality from the make-up water supply well and the monitoring well both meet the Profile I reference values.

There are no surface waters or springs identified within a half mile of the facility.

D.	Procedures for Public Comment

The Notice of the Division’s intent to issue a permit authorizing the facility to construct, operate and close, subject to the conditions within the permit, is being sent to the Pahrump Valley Times for publication. The Notice is being mailed to interested persons on our mailing list. Anyone wishing to comment on the proposed permit can do so in writing within a period of 30 days following the date of public notice. The comment period can be extended at the discretion of the Administrator. All written comments received during the comment period will be retained and considered in the final determination.

A public hearing on the proposed determination can be requested by the applicant, any affected State, any affected intrastate agency, or any interested agency, person or group of persons. The request must be filed within the comment period and must indicate the interest of the person filing the request and the reasons why a hearing is warranted.

Any public hearing determined by the Administrator to be held must be conducted in the geographical area of the proposed discharge or any other area the Administrator determines to be appropriate. All public hearings must be conducted in accordance with NAC 445A.403 through NAC 445A.406.

E.	Proposed Determination

The Division has made the tentative determination to issue the permit.

Lease Agreement, page 43

F.	Proposed Effluent Limitations, Schedule of Compliance, Special Conditions

See Section I of the permit.

G.	Rationale for Permit Requirements

The facility is located in an area where annual evaporation is greater than annual precipitation. Therefore, it must operate under a standard of performance which authorizes no discharge(s) except for those accumulations resulting from a storm event beyond that required by design for containment.

The primary method for identification of escaping process solution will be placed on required routine monitoring and inspection and the sampling of monitoring well MW-1. Specific monitoring requirements can be found in the Water Pollution Control Permit.

H.	Federal Migratory Bird Treaty Act

Under the Federal Migratory Bird Treaty Act, 16 U.S.C. 701-718, it is unlawful to kill migratory birds without license or permit, and no permits are issued to take migratory birds using toxic ponds. The Federal list of migratory birds (50 CFR 10, April 15, 1985) includes nearly every bird species found in the State of Nevada. The U.S. Fish and Wildlife Service is authorized to enforce the prevention of migratory bird mortalities at ponds and tailings impoundments. Compliance with State permits may not be adequate to ensure protection of migratory birds for compliance with provisions of Federal statutes to protect wildlife.

Open waters attract migratory waterfowl and other avian species. High mortality rates of birds have resulted from contact with toxic ponds at operations utilizing toxic substances. The Service is aware of two approaches that are available to prevent migratory bird mortality: 1) physical isolation of toxic water bodies through barriers (covering with netting), and 2) chemical detoxification. These approaches may be facilitated by minimizing the extent of the toxic water. Methods which attempt to make uncovered ponds unattractive to wildlife are not always effective. Contact the U.S. Fish and Wildlife Service at 1340 Financial Boulevard, Suite 234, Reno, Nevada 89502-7147, (775) 861-6300, for additional information.

Prepared by:	Rob Kuczynski, P.E.
Date:	Month XX, 2010
Fact Sheet Revision 00:	2010 New Permit

Lease Agreement, page 44

SCHEDULE 18

(List of Heavy Equipment that is not in good working condition )

Lease Agreement, page 45

COLORADO		84-0991764
(State or Other Jurisdiction of		(I.R.S. Employer Identification Number)
Incorporation or Organization)

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x

		Page
PART I
Item 1.	Description of Business	4
Item 1A.	Risk Factors	10
Item 2.	Description of Properties	15
Item 3.	Legal Proceedings	15
Item 4.	Submission of Matters to a Vote of Security Holders	15

PART II
Item 5.	Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	16
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 8.	Financial Statements and Supplementary Data	21
Item 9.	Changes and Disagreements with Accountants on Accounting and Financial Disclosure	21
Item 9A(T).	Controls and Procedures	22
Item 9B.	Other Information	24

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	25
Item 11.	Executive Compensation	26
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	29
Item 13.	Certain Relationships, Related Transactions and Director Independence	31
Item 14.	Principal Accountant Fees and Services	33
Item 15.	Exhibits and Financial Statement Schedules	33

Signatures		36

Period	High		Low

Quarter Ended March 31, 2009	$	0.10	$	0.05
Quarter Ended June 30, 2009	$	0.10	$	0.05
Quarter Ended September 30, 2009	$	0.10	$	0.05
Quarter Ended December 31, 2009	$	7.00	$	1.50

Quarter Ended March 31, 2010	$	1.65	$	1.01
Quarter Ended June 30, 2010	$	1.94	$	0.70
Quarter Ended September 30, 2010	$	1.01	$	0.25
Quarter Ended December 31, 2010	$	1.05	$	0.35

Outstanding Amount			Interest Rate			Unamortized Discounts		Accrued Interest		Maturity Date	Type
$	25,000			18	%	$	—	$	1,664	October 17, 2010	Conventional (1)
$	25,000			5	%	$	—	$	394	November 30, 2010	Conventional
$	50,000			5	%	$	—	$	788	November 30, 2010	Conventional
$	111,000	(2)		12	%	$	—	$	1,261	December 30, 2010	Conventional (1)
$	484,923			12	%	$	26,667	$	109,992	April 27, 2012	Convertible (3)
$	2,000,000	(4)		6	%	$	—	$	120,000	December 31, 2013	Conventional
$	6,519,500	(5)		6	%	$	—	$	380,144	December 31, 2015	Conventional

Name	Age	Positions with the Company

Alfred A. Rapetti	64	Chief Executive Officer and Director
Mark D. Dacko	59	Chief Financial Officer and Secretary
Dr. Clyde L. Smith	74	Director
Manfred E. Birnbaum	77	Director
Sharon L. Ullman	64	Director

	Annual Compensation
							Option		All Other
Name and Principal Position	Year	Salary			Bonus		Awards (1)		Compensation			Total ($)

Chief Executive Officer (2)
Stephen D. King	2010	$	—		$	—	$	712,000	$	—		$	712,000
	2009	$	—		$	—	$	—	$	—		$	—

President
Stephen E. Flechner	2010	$	90,000	(3)	$	—	$	712,000	$	30,000	(4)	$	832,000
	2009	$	—		$	—	$	—	$	—		$	—

Chief Financial Officer
Mark D. Dacko	2010	$	60,000	(5)	$	—	$	—	$	—		$	60,000
	2009	$	—		$	—	$	—	$	—		$	—

Name	Number of Securities Underlying Unexercised Options Exercisable		Number of Securities Underlying Unexercised Options Unexercisable			Equity Incentive Plan Awards; Number of Securities Underlying Unexercised Unearned Options		Option Exercise Price		Option Expiration Date
Stephen King (1)		266,667		533,333	(2)		—	$	0.90	04/01/20
Stephen Flechner		266,667		533,333	(2)		—	$	0.90	04/01/20

Name	Year	Option Awards (1)		Fees Earned or Paid in Cash		All Other Compensation			Total
Alfred A. Rapetti	2010	$	236,000	$	—	$	51,000	(2)	$	287,000
	2009	$	—	$	—	$	—		$	—

Manfred E. Birnbaum	2010	$	236,000	$	—	$	51,000	(2)	$	287,000
	2009	$	—	$	—	$	—		$	—

Donald Stoica	2010	$	284,000	$	—	$	65,000	(3)	$	349,000
	2009	$	—	$	—	$	—		$	—

Name and Address	Amount of Beneficial Ownership (1)			Percentage of Class

Alfred A. Rapetti		24,300,000	(2)		53.5
80 South 8th Street, Suite 900
Minneapolis, MN 55402
Stephen E. Flechner		1,550,000	(3)		3.7
80 South 8th Street, Suite 900
Minneapolis, MN 55402
Dr. Clyde Smith		750,000	(3)		1.8
80 South 8th Street, Suite 900
Minneapolis, MN 55402
Manfred E. Birnbaum		700,000	(4)		1.7
80 South 8th Street, Suite 900
Minneapolis, MN 55402
Mark D. Dacko		500,000	(3)		1.2
80 South 8th Street, Suite 900
Minneapolis, MN 55402

All directors and officers as a group (5 persons)		27,800,000			57.0

Afignis, LLC (5)		17,500,000	(6)		43.2
c/o CBIZ, 1065 Avenue
of Americas, 11th Floor
New York, NY 10018

Leslie Lucas Partners, LLC (7)		17,500,000	(8)		43.2
c/o James Lisa, Esq.
618 Newark Avenue, Suite 220
Jersey City NJ 07306

Irwin Gross		5,748,586	(9)		12.7
800 S. Ocean Blvd., Apt L1
Boca Raton, FL 33432

Wits Basin Precious Minerals Inc.		3,430,000	(10)		8.1
80 South 8th Street, Suite 900
Minneapolis, MN 55402

Deborah King		3,500,000	(3)		8.0
450 Glenmont Court
Dunwoody, GA 30350

Exhibit		Description
2.1		Share Exchange Agreement dated September 11, 2009 by and among Princeton Acquisitions, Inc., Hunter Bates Mining Corporation and the shareholders of Hunter Bates Mining Corporation (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on October 5, 2009).
3.1**		Second Amended and Restated Articles of Incorporation, effective March 15, 2011.
3.2		Amended and Restated By-Laws effective January 12, 2010 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on January 13, 2010).
4.1		Limited Recourse Promissory Note of Hunter Bates Mining Corp issued in favor of George E. Otten (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 5, 2009).
4.2		Deed of Trust and Security Agreement of Hunter Bates Mining Corp issued in favor of Gilpin County Public Trustee (incorporated by reference to Exhibit 4.2 to Form 10-K for the year ended December 31, 2009).
4.3		Security Agreement dated February 11, 2008 by and among Wits Basin Precious Minerals Inc., Gregory Gold Producers Inc. and China Gold, LLC (as successor in interest to Platinum Long Term Growth V, LLC) (incorporated by reference to Exhibit 4.3 to Form 10-K for the year ended December 31, 2009).
4.4		Joinder of Hunter Bates Mining Corporation to Security Agreement dated February 11, 2008 in favor of China Gold, LLC (as successor in interest to Platinum Long Term Growth V, LLC) (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on October 5, 2009).
4.5		Amended and Restated Guaranty of Gregory Gold Producers, Inc. and Hunter Bates Mining Corporation dated July 10, 2008 in favor of China Gold, LLC (as a successor-in-interest to Platinum Long Term Growth V, LLC) (incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K filed on October 5, 2009).
4.6		Deed of Trust to Public Trustee, Mortgage, Security Agreement, Assignment of Production and Proceeds, Financing Statement and Fixture Filing issued in favor of Gilpin County Public Trustee for benefit of Cabo Drilling (America), Inc. dated April 27, 2009 (incorporated by reference to Exhibit 4.6 to Form 10-K for the year ended December 31, 2009).
4.7		Deed of Trust and Security Agreement of Hunter Bates Mining Corp issued in favor of Gilpin County Public Trustee for benefit of China Gold, LLC (as successor-in-interest to Platinum Long Term Growth V, LLC) (incorporated by reference to Exhibit 4.7 to Form 10-K for the year ended December 31, 2009).
4.8		Promissory Note issued in favor of Wits Basin Precious Minerals Inc. (incorporated by reference to Exhibit 4.8 to the Company’s Current Report on Form 8-K filed on October 5, 2009).
4.9		Summary of terms of warrants issued to certain consultants (incorporated by reference to Exhibit 4.9 to the Company’s Current Report on Form 8-K filed on October 5, 2009).
4.10		Form of Warrant issued in connection with Hunter Bates private placement offering completed September 29, 2009 (incorporated by reference to Exhibit 4.10 to the Company’s Current Report on Form 8-K filed on October 5, 2009).
10.1		Asset Purchase Agreement by and among the Company and Hunter Gold Mining Corporation, a British Columbia corporation, Hunter Gold Mining Inc., a Colorado corporation, Central City Consolidated Mining Corp., a Colorado corporation and George Otten, a resident of Colorado, dated September 20, 2006 (incorporated by reference to Exhibit 10.1 to Form 10-K for the year ended December 31, 2009).
10.2		Fourth Amendment to Asset Purchase Agreement dated January 14, 2008 by and among the Company, Central City Mining Corp., George Otten, Hunter Gold Mining Corp. and Hunter Gold Mining Inc (incorporated by reference to Exhibit 10.2 to Form 10-K for the year ended December 31, 2009).
10.3		Fifth Amendment to Asset Purchase Agreement by and among the Company, Hunter Gold Mining Corp, Hunter Gold Mining Inc., George E. Otten and Central City Consolidated, Corp. d/b/a Central City Consolidated Mining Co. dated June 9, 2008 (incorporated by reference to Exhibit 10.3 to Form 10-K for the year ended December 31, 2009).

10.4**		Security Agreement by and between Wits Basin Precious Minerals Inc, Hunter Bates Mining Corporation, Gregory Gold Producers, Inc and Kenglo One Ltd. in the principal amount of $5,000,000, dated December 14, 2009.
10.5		Employment Agreement with Stephen E. Flechner dated April 1, 2010 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 5, 2010).
10.6		Stock Option Agreement with Stephen E. Flechner dated April 1, 2010 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 5, 2010).
10.7		Stock Option Agreement with Deborah King dated April 1, 2010 (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on April 5, 2010).
10.8		Option Agreement between the Company and US American Exploration Inc, dated September 7, 2010, (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed on September 17, 2010).
10.9		Promissory Note of the Company, dated September 7, 2010, in the principal amount of $25,000 issued in favor of Stephen Flechner (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K/A filed on September 17, 2010).
10.10		Promissory Note of the Company, dated September 7, 2010, in the principal amount of $50,000 issued in favor of Irwin Gross (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K/A filed on September 17, 2010).
10.11		Guaranty & NSR of Stephen D. King, dated September 7, 2010, (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K/A filed on September 17, 2010).
10.12		2010 Stock Incentive Plan, as amended (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 27, 2011).
10.13**		Exchange Agreement, dated March 15, 2011, by and between the Company, Shea Mining & Milling, LLC, Afignis, LLC, Leslie Lucas Partners, LLC, Wits Basin Precious Minerals Inc. and Alfred A. Rapetti.
10.14**		Assignment and Assumption of Loan Documents and Loan Modification Agreement, dated March 15, 2011, by and between the Company, Shea Mining & Milling, LLC and NJB Mining, Inc.
10.15**		Term Loan Agreement, dated August 25, 2009, by and between Shea Mining & Milling, LLC and NJB Mining, Inc (assumed by the Company on March 15, 2011).
10.16**		Promissory Note, dated August 25, 2009, issued by Shea Mining & Milling, LLC to NJB Mining, Inc (assumed by the Company on March 15, 2011).
10.17**		Deed of Trust and Security Agreement with Assignment of Rents and Fixture Filing, dated August 21, 2009, executed by Shea Mining & Milling, LLC in favor of NJB Mining, Inc (assumed by the Company on March 15, 2011).
10.18**		Assignment of Lease and Rents, dated August 21, 2009, executed by Shea Mining & Milling, LLC in favor of NJB Mining, Inc (assumed by the Company on March 15, 2011).
10.19**		Environmental Indemnity, dated August 25, 2009, by and between Shea Mining & Milling, LLC and NJB Mining, Inc (assumed by the Company on March 15, 2011).
10.20**		Lease Agreement, dated April 6, 2010, by and between Father Gregory Ofiesh, Mary Jane Ofiesh and Shea Mining (assumed by the Company on March 15, 2011).
10.21**		First Amendment to Lease Agreement and Contract Agreement, effective as of March 15, 2010, by and between Father Gregory Ofiesh, Mary Jane Ofiesh, the Company and Liberty Processing, LLC.
21**		Subsidiaries of the Registrant.
24**		Power of Attorney (included on the signature page hereto).
31.1**		Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2**		Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

		STANDARD GOLD, INC.
		(“COMPANY”)

Dated: March 18, 2011	By:	/s/ Alfred A. Rapetti
		Alfred A. Rapetti
		Chief Executive Officer

Name	Title	Date

/s/ Alfred A. Rapetti	Chief Executive Officer and Director	March 18, 2011
Alfred A. Rapetti	(principal executive officer)

/s/ Mark D. Dacko	Chief Financial Officer and Secretary (principal financial and accounting	March 18, 2011
Mark D. Dacko	officer)

/s/ Clyde Smith	Director	March 18, 2011
Clyde Smith

/s/ Manfred E. Birnbaum	Director	March 18, 2011
Manfred E. Birnbaum

/s/ Sharon L. Ullman	Director	March 18 , 2011
Sharon L. Ullman

	Page
Report of Independent Registered Public Accounting Firm of Moquist Thorvilson Kaufmann Kennedy & Pieper LLC	F-2
Consolidated Balance Sheets as of December 31, 2010 and 2009	F-3
Consolidated Statements of Operations for the Years Ended December 31, 2010 and 2009	F-4
Consolidated Statements of Shareholders’ Equity (Deficit) for the Years Ended December 31, 2010 and 2009	F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2010 and 2009	F-6
Notes to Consolidated Financial Statements	F-7

	December 31,
	2010			2009
Assets
Current assets:
Cash	$	154		$	450,887
Prepaid expenses		112,000			—
Total current assets		112,154			450,887

Property, plant and equipment, net		1,447,851			1,536,408
Mineral properties and development costs		5,660,726			5,660,726
Debt issuance costs, net		13,367			23,392
Total Assets	$	7,234,098		$	7,671,413

Liabilities and Shareholders’ Deficit
Current liabilities:
Short-term notes payable	$	211,000		$	—
Convertible note payable, current portion		300,000			150,000
Current portion of long-term note payable(majority shareholder)		1,200,000			600,000
Due to Wits Basin Precious Minerals Inc (majority shareholder)		124,240			51,921
Accounts payable		167,606			46,101
Accrued interest		614,243			71,630
Accrued expenses		741,085			383,315
Total current liabilities		3,358,174			1,302,967

Convertible note payable, long-term portion		184,923			314,923
Long-term note payable (majority shareholder)		800,000			1,400,000
Long-term note payable, net of discount		6,519,500			6,189,768
Total liabilities		10,862,597			9,207,658

Shareholders’ deficit:
Preferred stock, $1 par value, 50,000,000 shares authorized: none issued or outstanding		—			—
Common stock, $.001 par value, 100,000,000 shares authorized: 25,083,572 and 22,840,649 shares issued and outstanding at December 31, 2010 and 2009, respectively		25,084			22,841
Additional paid-in capital		6,937,488			5,141,714
Accumulated deficit during exploration stage		(10,591,071	)		(6,700,800	)
Total shareholders’ deficit		(3,628,499	)		(1,536,245	)
Total Liabilities and Shareholders’ Deficit	$	7,234,098		$	7,671,413

							Sept. 28, 2004 (inception)
	Year Ended December 31,						to Dec. 31,
	2010			2009			2010

Revenues	$	—		$	—		$	—

Operating expenses:
General and administrative		2,463,291			133,640			3,065,357
Exploration expenses		356,290			146,428			5,826,421
Depreciation and amortization		88,557			105,723			301,738
Loss on disposal of assets		—			—			12,362
Total operating expenses		2,908,138			385,791			9,205,878
Loss from operations		(2,908,138	)		(385,791	)		(9,205,878	)

Other income (expense):
Other income		295			—			1,691
Interest expense		(652,696	)		(504,067	)		(1,363,064	)
Foreign currency losses		(329,732	)		(916,170	)		(23,820	)
Total other income (expense)		(982,133	)		(1,420,237	)		(1,385,193	)
Loss from operations before income taxes		(3,890,271	)		(1,806,028	)		(10,591,071	)

Income tax provision		—			—			—
Net loss	$	(3,890,271	)	$	(1,806,028	)	$	(10,591,071	)

Basic and diluted net loss per common share	$	(0.17	)	$	(0.09	)

Basic and diluted weighted average common shares outstanding		23,499,823			19,275,573

					Additional
	Common stock				paid-in			Accumulated
	Shares		Amount		capital			deficit			Total
BALANCE, December 31, 2008		18,500,000	$	18,500	$	(18,489	)	$	(4,894,772	)	$	(4,894,761	)

Recapitalization of Princeton Acquisitions, Inc. upon execution of share exchange on September 29, 2009		1,710,649		1,711		(1,711	)		—			—
Issuance of 1,000,000 shares of common stock and warrants on September 29, 2009 private placement at $0.50 per unit less transaction costs of $18,328		1,000,000		1,000		480,672			—			481,672
Reclassification of amounts due Wits Basin for start-up and development costs to additional paid in capital		—		—		3,867,872			—			3,867,872
Issuance of 1,630,000 shares of common stock and warrants in private placement October through December 2009 at $0.50 per unit		1,630,000		1,630		813,370			—			815,000
Net loss		—		—		—			(1,806,028	)		(1,806,028	)
BALANCE, December 31, 2009		22,840,649		22,841		5,141,714			(6,700,800	)		(1,536,245	)

Issuance of 66,000 shares of common stock in private placements at $0.50 per unit less transaction costs of $7,117		66,000		66		25,817			—			25,883

Issuance of 400,000 shares of common stock and 250,000 warrants to consultants for services		400,000		400		644,600			—			645,000

Cash-less exercise of warrants		1,476,923		1,477		(1,477	)		—			—

Issuance of warrants related to notes payable		—		—		25,140			—			25,140

Common stock/stock option compensation expense		300,000		300		1,101,694			—			1,101,994

Net loss		—		—		—			(3,890,271	)		(3,890,271	)
BALANCE, December 31, 2010		25,083,572	$	25,084	$	6,937,488		$	(10,591,071	)	$	(3,628,499	)

	Year Ended December 31,						September 28, 2004 (inception) to December 31,
	2010			2009			2010
OPERATING ACTIVITIES:
Net loss	$	(3,890,271	)	$	(1,806,028	)	$	(10,591,071	)
Adjustments to reconcile net loss to cash flows used in operating activities:
Depreciation and amortization		88,557			105,723			301,738
Amortization of imputed interest and original issue discounts on debt		45,140			388,400			639,008
Amortization of prepaid consulting fees related to issuance of common stock and warrants		379,000			—			379,000
Amortization of debt issuance costs		10,025			2,507			12,532
Compensation expense related to issuance of common stock and stock option grants		1,101,994			—			1,101,994
Issuance of common stock for services		154,000			—			154,000
Loss on foreign currency		329,732			916,170			23,820
Loss on disposal of miscellaneous assets		—			—			12,362
Issuance of equity securities by Wits Basin (majority shareholder) for exploration expenses		—			—			334,950
Debt incurred for exploration expenses		75,000			—			75,000
Changes in operating assets and liabilities:
Accounts payable		121,505			19,173			167,606
Accrued expenses		900,383			113,670			1,499,418
Net cash used in operating activities		(684,935	)		(260,385	)		(5,889,643	)

INVESTING ACTIVITIES:
Purchases of equipment		—			—			(143,628	)
Net cash used in investing activities		—			—			(143,628	)

FINANCING ACTIVITIES:
Payments on long-term debt		—			(491,106	)		(491,106	)
Cash proceeds from issuance of common stock, net		25,883			1,046,672			1,072,555
Cash proceeds from short-term debt		136,000			—			136,000
Advances from Wits Basin (majority shareholder)		72,319			179,950			5,341,875
Debt issuance costs		—			(25,899	)		(25,899	)
Net cash provided by financing activities		234,202			709,617			6,033,425

Increase (Decrease) in CASH AND CASH EQUIVALENTS		(450,733	)		449,232			154
CASH AND CASH EQUIVALENTS, beginning of period		450,887			1,655			—
CASH AND CASH EQUIVALENTS, end of period	$	154		$	450,887		$	154

	December 31,
	2010
Unsecured promissory note of $25,000; a warrant was issued for 50,000 shares; stated interest rate of 18%; accrued interest of $1,664 at December 31, 2010; due October 17, 2010; currently past due, original terms apply in the default period.	$	25,000

Promissory note of $25,000 issued to our President, Stephen Flechner, utilized for the Rex; stated interest rate of 5%; accrued interest of $394 at December 31, 2010; due November 30, 2010; currently past due, original terms apply in the default period. (1)		25,000

Promissory note of $50,000 utilized for the Rex; stated interest rate of 5%; accrued interest of $788 at December 31, 2010; due November 30, 2010; currently past due, original terms apply in the default period. (1)		50,000

The Company issued five unsecured loans during the fourth quarter of 2010 for an aggregate of $111,000 all from the same lender and all due December 30, 2010; one warrant was issued for 64,000 shares for one of the loans; interest rate of 12%; accrued interest of $1,261 at December 31, 2010; currently past due, original terms apply in the default period.		111,000
Totals	$	211,000

Balance at December 31, 2009	$	—
Add: gross proceeds received in 2010		211,000
Less: value assigned to warrants issued with notes		(25,140	)
Add: amortization of original issue discount		25,140
Balance at December 31, 2010	$	211,000

Balance at December 31, 2008	$	—
Add: conversion of accrued expenses and additional interest charge		451,590
Add: amortization of debt discount		13,333
Balance at December 31, 2009	$	464,923
Add: amortization of debt discount		20,000
Less: principal payments		—
Balance at December 31, 2010		484,923
Less: current portion		(300,000	)
Long-term portion	$	184,923

Balance at December 31, 2008	$	5,139,637
Add: unrealized foreign currency loss		916,170
Add: amortization of original issue discount		375,067
Less: principal payments		(241,106	)
Balance at December 31, 2009		6,189,768
Add: unrealized foreign currency loss		329,732
Less: principal payments		—
Balance at December 31, 2010	$	6,519,500

Balance at December 31, 2008	$	—
Add: issuance of note		2,500,000
Less: principal payments		(500,000	)
Balance at December 31, 2009		2,000,000
Less: principal payments		—
Balance at December 31, 2010		2,000,000
Less: current portion		(1,200,000	)
Long-term portion	$	800,000

2011	$	1,200,000
2012		600,000
2013		2,406,600
2014		2,206,600
2015		2,106,300
Total	$	8,519,500

	2010
Risk-free interest rate		2.00	%
Expected volatility factor		145% - 150	%
Expected dividend		—
Expected option term	10 years

	Number of Options		Weighted Average Exercise Price
Options outstanding - December 31, 2009		—	$	—

Granted		2,800,000		0.79
Canceled or expired		—		—
Exercised		—		—
Options outstanding - December 31, 2010		2,800,000	$	0.79

Options exercisable - December 31, 2010		533,334	$	0.90

Weighted average fair value of options granted during the year ended December 31, 2010			$	0.79
Weighted average fair value of options granted during the year ended December 31, 2009			$	—

	Options Outstanding

Range of Exercise Prices	Number Outstanding		Weighted Remaining Contractual Life	Weighted Average Exercise Price		Aggregate Intrinsic Value(1)

$0.59 to $0.90		2,800,000	9.5 years	$	0.79	$	—
$0.59 to $0.90		2,800,000	9.5 years	$	0.79	$	—

	Options Exercisable

Range of Exercise Prices	Number Exercisable		Weighted Remaining Contractual Life	Weighted Average Exercise Price		Aggregate Intrinsic Value(1)

$0.59 to $0.90		533,334	9.3 years	$	0.90	$	—
$0.59 to $0.90		533,334	9.3 years	$	0.90	$	—

	Number			Weighted Average Exercise Price		Range of Exercise Price		Weighted Remaining Contractual Life
Outstanding at December 31, 2008		—		$	—	$	—

Granted		4,130,000			0.64		0.01 – 1.00
Cancelled or expired		—			—		—
Exercised		—			—		—
Outstanding at December 31, 2009		4,130,000			0.64		0.01 – 1.00
		—
Granted		414,000			0.56		0.50 – 1.00
Cancelled or expired		(23,077	)		0.01		0.01
Exercised		(1,476,923	)		0.01		0.01
Outstanding at December 31, 2010		3,044,000		$	0.94	$	0.50 – 1.00	3.9 years

Warrants exercisable at December 31, 2010		3,044,000		$	0.94	$	0.50 – 1.00

Deferred tax assets:	2010			2009
Net operating loss carryforwards	$	728,000		$	368,000
Exploration rights		2,004,000			2,004,000
Accrued expenses		337,000			—
Foreign currency losses (gains)		9,000			(113,000	)
Other		12,000			5,000
Total deferred tax asset		3,090,000			2,264,000
Valuation allowance		(3,090,000	)		(2,264,000	)
	$	—		$	—

	2010			2009
Current tax provision	$	—		$	—
Deferred tax provision		(826,000	)		(530,000	)
Valuation allowance		826,000			530,000
Total income tax provision	$	—		$	—

	2010			2009
Federal statutory tax rate		(34.0	)%		(34.0	)%
State taxes, net of federal benefit		(3.0	)%		(3.0	)%
Permanent differences		15.8	%		7.7	%
Valuation allowance		21.2	%		29.3	%
Effective tax rate		—			—

	2010			2009
Basic earnings (loss) per share calculation:
Net income (loss) to common shareholders	$	(3,890,271	)	$	(1,806,028	)
Weighted average of common shares outstanding		23,499,823			19,275,573

Basic net earnings (loss) per share	$	(0.17	)	$	(0.09	)

Diluted earnings (loss) per share calculation:
Net income (loss) per common shareholders	$	(3,890,271	)	$	(1,806,028	)
Basic weighted average common shares outstanding		23,499,823			19,275,573
Stock purchase warrants		(1	)		(2	)
Diluted weighted average common shares outstanding		23,499,823			19,275,573

Diluted net income (loss) per share	$	(0.17	)	$	(0.09	)

DEBTORS:	Wits Basin Precious Minerals Inc.,
	a Minnesota corporation

	By:	/s/ Stephen D. King
		Stephen D. King, Chief Executive Officer

	Hunter Bates Mining Corporation,
	a Minnesota corporation

	By:	/s/ Stephen D. King
		Stephen D. King, Chief Executive Officer

	Gregory Gold Producers, Inc.,
	a Colorado corporation

	By:	/s/ Stephen D. King
		Stephen D. King, Chief Executive Officer

SECURED PARTY:	Kenglo One, Ltd.
	a company incorporated under the laws of Jersey

	By:	/s/ Ann Williams
		Ann Williams, Director