5.	PROFIT PARTICIPATION AGREEMENTS

On June 8, 2011, the Company signed a profit participation agreement with AR Ehkes, a Mongolian company. The purpose of the profit participation agreement is to facilitate the mining of rare earths at three sites in Mongolia. Under the terms of the agreement, the Company will receive 15% of the net profits generated by AR Ehkes from production at the three defined sites in Mongolia. In exchange for this, the Company will be required to pay AR Ehkes $10,000 per month for a period of six months. In addition, the Company will pay the costs of excavating, moving and exporting a 20 ton rail car of ore from the site. The Company made the required monthly payments of $10,000 each in June, July and August. The Company can cancel this agreement at any time by not making additional payments. There would be no continuing obligation of the Company. The next payment of $10,000 would have been due in September. As of September 30, 2011, the Company canceled this contract by not making the required payment. No additional payments will be made after September 30, 2011.

On June 27, 2011, the Company (through its joint venture with Beijing Bullion Transfer Group) signed a profit participation agreement with AR Ehkes to facilitate the mining of rare earth at a fourth site in Mongolia. Under the terms of the agreement, the Company will receive 15% of the net profits generated by AR Ehkes from production at this site. In exchange, the Company will be required to pay AR Ehkes $10,000 per month for a period of six months. In addition, the Company will pay the costs of excavating and evaluating 20 core samples from the site to determine the content of precious metals. The Company made the required monthly payments of $10,000 each in June, July and August. The Company can cancel this agreement at any time by not making additional payments. There would be no continuing obligation of the Company. The next payment of $10,000 would have been due in September. As of September 30, 2011, the Company canceled this contract by not making the required payment. No additional payments will be made after September 30, 2011.