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BANK HEWEST® DATE: JULY 5, 2006 IRREVOCABLE STANDBY LETTER OF CREDIT RECEIVED JUL 0 6 2006 IN ALL CORRESPONDENCE PLEASE QUOTE OUR REFERENCE NUMBER. Division of Minerals and Geology WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. IN FAVOR OF BENEFICIARY: STATE OF COLORADO DIVISION OF MINERALS 215 CENTENNIAL BUILDING 1313 SHERMAN ST. DENVER, CO 80203 FOR ACCOUNT OF (APPLICANT): RICK L HUNT 43160 COUNTY ROAD 17.21 ELIZABETH, CO 80107 AMOUNT: USD5,100.00 (FIVE THOUSAND ONE HUNDRED US DOLLARS) EXPIRY DATE / PLACE: JUNE 10, 2007 AT 3:00 P.M. IN MONTEREY PARK AT OUR ABOVE ADDRESS WE HEREBY ISSUE AND ESTABLISH OUR IRREVOCABLE LETTER OF CREDIT, THE AMOUNT OF WHICH IS AVAILABLE BY BENEFICIARY'S DRAFT OR DRAFTS DRAWN UPON US, WHICH SHALL BE PAID AT SIGHT, WHEN ACCOMPANIED BY THE FOLLOWING DOCUMENT: A WRITTEN STATEMENT OF THE DIRECTOR ("THE DIRECTOR") OF THE DIVISION OF MINERALS AND GEOLOGY OF THE STATE OF COLORADO ("DIVISION") CERTIFYING THAT HE IS A DULY AUTHORIZED OFFICIAL ACTING ON BEHALF OF THE STATE OF COLORADO AND THAT THE AMOUNT OF THE ACCOMPANYING SIGHT DRAFT IS DUE AND PAYABLE TO THE STATE OF COLORADO PURSUANT TO APPLICABLE PROVISIONS OF COLORADO STATUTES GOVERNING MINED LAND RECLAMATION AND THAT RICK L. HUNT OR ITS SUCCESSOR HAS NEGLECTED, FAILED, OR REFUSED TO PAY SUCH AMOUNT ALTHOUGH REQUESTED TO DO SO BY THE DIRECTOR." EACH SIGHT DRAFT SO DRAWN AND PRESENTED SHALL BE HONORED BY US IF PRESENTED PRIOR TO THE CLOSE OF BUSINESS ON JUNE 10, 2007. THE BANK SHALL MAKE A PAYMENT BY WIRE TRANSFER TO THE BENEFICIARY. THIS LETTER OF CREDIT REFERS TO RICK L. HUNT'S APPLICATION FOR A PERMIT TO ENGAGE IN MINING AND RECLAMATION ACTIVITIES WITHIN THE STATE OF COLORADO. IT IS AN EXPRESS CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE AUTOMATICALLY EXTWED_F-.OR, SUCCESSIVE ADDITIONAL PERIODS OF ONE YEAR EACH, FROM THE INITIAL AND EACH FUTURE EXPIRATION DATE UNLESS BANK OF THE WEST ("THE BANK") SHALL NOTIFY THE DIRECTOR AT LEAST 90 DAYS PRIOR TO AN EXPIRATION DATE IN WRITING BY REGISTERED MAIL, AT THE ABOVE ADDRESS, THAT THE BANK ELECTS NOT TO EXTEND THE LETTER OF CREDIT FOR SUCH ADDITIONAL PERIOD. IN SUCH EVENT, IN ADDITION TO HIS POWER TO DRAW HEREON UNDER THE PRECEDING PARAGRAPHS, THE DIRECTOR MAY DRAW THE FULL OR ANY LESSER AMOUNT HEREOF AT ANY TIME PRIOR TO SUCH EXPIRATION DATE BY SIGHT DRAFT, OR DRAFTS, ACCOMPANIED BY WRITTEN STATEMENT "OF THE DIRECTOR THAT THE AMOUNT DRAWN WILL BE HELD AS A CASH DEPOSIT IN LIEU OF FINANCIAL WARRANTY, AS PROVIDED IN APPLICABLE COLORADO STATUTES GOVERNING MINED LAND AND RECLAMATION. AUTHORIZED SIGNATURE TRADE LEN fER OPERATIONS TEAM NO 02 A HORIZED SIGNATU T "DE CENTER OPERA IONS TEAM NO 02 Page 1 of 2 M%(&0bv BANK OF THE WEST TRADE CENTER OP'S - LOS ANGELES 1977 SATURN STREET, SC-MPK-02-G MONTEREY PARK, CA 91755 TEL: 323-727-6340 FAX:323-727-6405 SWIFT: BWSTUS66LAX 075-40022(08/02)