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This agreement has been made as of the 19th day of November, 1985 between: STANDARD METALS CORPORATION, a corporation incorporated under the laws of the State of Delaware and the debtor in possession in a reorganization now pending before the United States Bankruptcy Court for the District of Colorado (hereinafter called "SMC") and ECHO BAY INC, a corporation incorporated under the laws of the State of Delaware with its principal place of business in Denver, Colorado (hereinafter called "Echo Bay") WHEREAS SMC and Echo Bay entered into a lettef agreement dated August 23, 1985 (as amended in writing on October 15, 1985) whereby SMC agreed to sell and Echo Bay agreed to purchase certain assets of SMC; AND WHEREAS pursuant to subparagraph 4(g) of that agreement Echo Bay and SMC are obliged to enter into a formal sale and purchase agreement? AND WHEREAS this agreement constitutes such sale and purchase agreement; NOW THEREFORE in consideration of the aforementioned obligation, of these premises and of the covenants and agreements herein contained, the parties hereto covenant and agree as set forth below, ■ ARTICLE I INTERPRETATION Unless the context otherwise requires, where used herein or in any amendments hereto, the following terms and expressions shall have the following respective meanings: (a) "Closing Date" means November 19, 1985; provided, however, that SMC and Echo Bay may mutually extend the Closing Date to such other date not later than November 30, 1985 as they may agree upon in writing? (b) "Court" means the United States Bankruptcy Court for the District of Colorado; ( (c) "Purchased Assets" shall have the meaning attributed thereto in section 2.02 hereof; (a) "Purchase Price" shall have the meaning attributed thereto in section 2.04 hereof; and (e) "Time of Closing" means 12:30 hours Mountain Standard Time on the Closing Date or such other time as SMC and Echo Bay may agree upon in writing. Section 1.02 Currency All dollar amounts referred to in this agreement are to the lawful currency of the United States of America. Section 1.03 Schedules The following is a list of the schedules attached to and forming part of this agreement: Schedule 1 - Description of the Purchased Assets. The division of this agreement into articles, sections, paragraphs and clauses and the insertion of headings is for convenience of reference only and shall not affect the construction or interpretation hereof. Unless otherwise stated, all reference herein to articles, sections, paragraphs or clauses are to those in this agreement. Section 1.05 Plurality and Gender Words importing the singular only shall include the plural and vice versa and words importing the masculine gender shall include the feminine gender and words importing individuals shall include firms ana corporations and vice versa. « Section 1.06 Governing Law This agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Colorado. Each of the parties hereto irrevocably attorns to the jurisdiction of the courts of Colorado. Section 1.07 Time of Essence Time shall be of the essence of this agreement. ARTICLE II PURCHASE AND SALE Section 2.01 Sale of Assets Subject to the terms and conditions hereof, SMC agrees to sell, assign and transfer to Echo Bay and Echo Bay agrees to purchase from SMC on the Closing Date the property and assets .described in Schedule 1 attached hereto, namely, all right, title and interest of SMC in and of its property in San Juan County, Colorado consisting of, but not limited to: (1) the Sunnyside Mine (the "Mine"), Mayflower Mill (the "Mill"), the tailings area on site and related assets and facilities under the control of SMC; (2) SMC1s interest in its lease with Washington Mining Company (known as the Marcy Lease) originally executed on February 28, 1959 and amended on several occasions which lease covers the Mine and numerous patented and unpatented mining claims; (3) SMC1s lease claims known as the Treasure Mountain and California Mountain agreements with Noranda Exploration, Inc. and Callahan Mining Corporation; (4) approximately 165 patented and 169 unpatented lode mining claims including, but not limited to those held under the "Belle Creole" lease, the "Joy" lease, the "Brenneman" lease and the American Tunnel easement (also known as the Gold King Lower Tunnel), all of which are in the Mine area; (5) all contracts relating to equipment located on or used in connection with the Mine and Mill operations; and (6) the office lease relating to the Old Hospital Building in the town of Silverton, Colorado presently occupied by SMC. Notwithstanding anything in this agreement to the contrary, there is excepted and excluded from the Purchased Assets any patented or unpatented mining claim, millsite or other interest owned by SMC in San Juan County, Colorado, which is located in whole or in part in any watershed or drainage area which flows into the Uncompahgre River, its tributaries or sources. Section 2.02 Purchased Assets The property and assets described in section 2.01 hereof are referred to in this agreement collectively as the "Purchased Assets". Section 2.03 Assumption of Obligations Echo Bay will not assume any of the contractual or other obligations presently outstanding on the part of SMC (including, without limitation, employment contracts), with the exception o£ mining leases and other similar instruments relating to the Purchased Assets, contracts relating to equipment located on or used in connection with the Mine operation and the office lease relating to the Old Hospital Building in the town of Silverton which excepted agreements Echo Bay does assume and agrees to perform. Section 2.04 Purchase Price Subject to the adjustments identified in section 8.04 of this agreement (the "Adjustments"), the purchase price (the "Purchase Price") payable to SMC for the Purchased Assets shall consist of: (a) $20 million payable on the Closing Date to SMC or to such other person or entity as the Court may direct; (b) a 30% net profits interest applied in respect of the interest acquired by Echo Bay in the Purchased Assets ✓ and all enlargements, extensions, modifications and supplementations thereof. The 30% net profits interest to SMC shall be computed annually on substantially the following basis: (i) the net operating profit account credits would consist of all operating cash flow from the Purchased Assets as derived from net smelter revenues less any and all payments of applicable royalties and less any and all development and exploration costs and all costs of mining and milling allocable by generally accepted^ accounting principles to the processed concentrate for which payment is made and not theretofore deducted from net operating profits pursuant to any provision of subsection 2.04(b) (ii) ; (ii) in computing net profits, all capital expenditures, working capital (as hereinafter defined) and the amortization of the cash portion of the Purchase Price over a five-year period, including interest expense upon the amount being so amortized at a pecentage equal to the prime rate charged by The Royal Bank of Canada to its most credit-worthy customers plus one percent (1%) per annum, corporate general and administrative expenses not to exceed $500,000 per year, all legal and accounting costs and any and all other costs of the operation will be deducted from and debited against the net profits account. Any deficiencies in such account will be accumulated and carried forward, to be deducted from net profits in subsequent years. The term "working capital" in' this section 2.04(b)(ii) means all current assets less all current liabilities. "Current assets" and "current liabilities" are to be construed in accordance with generally accepted accounting principles. "Current assets" shall include by way of example, but shall not be restricted to: accounts receivable, inventory, supplies (at average cost), bullion inventory and concentrate (at current market price) and prepaid expenses. "Current liabilities" shall include by way of example, but shall not be restricted to: accounts payable, current portion of long term debt, accrued liabilities and inter company advances, "Working capital" is not intended to include any items otherwise included as a deduction in the computation of net profits; (iii) notwithstanding the foregoing, for each of the five calendar years 1987, 1988, 1989, 1990, and ¿Li t /I 1991 Echo Bay shall be obliged to pay on January 1 of the year following each such year a minimum of $300,000 (the "Minimum Payment") to SMC on account of its net profits interest if the making of capital expenditures in respect of the Purchased Assets for such year results in SMC's receiving or being entitled to receive, less than $300,000 of net profits interest payments; provided that any amounts paid to SMC on account of net profits interest for any year prior or subsequent to January 1, 1987 shall be applied to reduce the $300,000 Minimum Payment to SMC for the year in which the payment is made. Provided further, however, Echo Bay shall not be required to make the Minimum Payment for any year during which the average price of gold as reported by Comex for the applicable year is less than $375 per ounce; (iv) notwithstanding the foregoing, Echo Bay will advance to SMC the sums of $750,000 on June 1, 1986 and $500,000 on June 1, 1987 to be credited against any net profits interest that may be earned by SMC pursuant to this agreement; commencing with the calendar year 1991, the net profits interest to which SMC may otherwise be entitled will be reduced by an aggregate of $1.25 million plus interest on each of the aforesaid advance components, at an annual rate equal to the prime rate charged by The Royal Bank of Canada to its most credit-worthy customers plus one percent (1%) per annum.

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