EHIBIT 4.2


                              SETTLEMENT AGREEMENT

THIS  AGREEMENT  made  effective  the  31st  day  of  July,  2000

BETWEEN:          COAST  FALCON  RESOURCES  LTD.
                  ------------------------------
                  A  British  Columbia  Company
                  (the  "Company")


AND:              PEMCORP  MANAGEMENT  INC.
                  -------------------------
                  A British Columbia Company
                  (the  "Creditor")


WHEREAS:

A.  As  of  the date of this Agreement, the Company owes the Creditor the sum of
$80,250  for management consulting services for the thirty months ended July 31,
2000  (the  "Debt");

B.  The  Creditor  understands and acknowledges that the Company is experiencing
financial  difficulty  and  does  not  have the ability to pay the Debt and as a
consequence  has  agreed  to  accept common shares of the Company having nominal
value  and  a  note  in  full  settlement  and  satisfaction  of  the  Debt.

NOW  THEREFORE  THIS  AGREEMENT WITNESSETH that in consideration of the premises
and  the  covenants  contained  herein  the  parties  hereto  agree  as follows:

     1.   For the purpose of this  Agreement,  "Settlement  Date" means the date
          that is 5 business  days after the date on which the Company  receives
          approval from its  shareholders  to issue the  "Settlement  Shares" in
          partial settlement and satisfaction of the Debt in accordance with the
          terms of this Agreement.

     2.   The Creditor  hereby agrees to accept a promissory  note in the amount
          of $21,400,  substantially  in the form attached  hereto as Schedule A
          (the "Note"), and 1,471,250  non-assessable shares in the common stock
          of the Company,  after the Company  gives effect to a minimum ten (old
          shares) for one (new  share)  reverse  split of its common  stock (the
          "Reverse  Split"),  at a deemed price of $0.04 per share, post reverse
          split, (the "Settlement  Shares"), in full settlement and satisfaction
          of the Debt.

     3.   The Creditor hereby agrees and acknowledges  that the number of shares
          of the  Company  issued  in  settlement  of  $58,850  of the  Debt  is
          arbitrary and was arrived at through negotiations,  there is no active
          market  for  the  shares  of the  Company  and  the  Company  has  not
          represented  to the Creditor that the  Settlement  Shares have or will
          ever have a  realizable  value equal to the face amount of the Debt or
          any realizable value whatsoever.


                                      -84-

     4.   Subject to the  issuance  and  receipt of the Note and the  Settlement
          Shares on the Settlement  Date, the Creditor  hereby forever  releases
          and discharges the Company from the Debt.

     5.   The consummation of the transaction contemplated hereby is subject the
          Company   receives   approval  from  its  shareholders  to  issue  the
          Settlement  Shares and the  Reverse  Split.  If such  approval  is not
          obtained and the Reverse Split is not made  effective by September 15,
          2000 this  Agreement  shall be terminated and have no further force or
          effect unless the parties hereto agree otherwise.

     6.   This  Agreement  shall inure to the benefit of and be binding upon the
          parties hereto, their respective heirs, successors and assigns.

     7.   Time is of the essence of this Agreement.

     8.   This Agreement  shall be construed in accordance  with the laws of the
          province of British Columbia.

     9.   The  undersigned  have the  requisite  authority  to enter  into  this
          Agreement.

     10.  This  Agreement  may be  executed  in as many  counterparts  as may be
          necessary and by facsimile, each of such counterparts so executed will
          be  deemed  to be an  original  and such  counterparts  together  will
          constitute one and the same instrument and notwithstanding the date of
          execution will be deemed to bear the day and year first above written.

     11.  This Agreement represents the entire agreement between the parties.


   /s/  Vernon  Meyer
----------------------------
Vernon  Meyer,  Director
Coast Falcon Resources Ltd.




   /s/  Leonard  Petersen
----------------------------
Leonard Petersen, Director
Pemcorp  Management  Inc.


                                      -85-

                                  SCHEDULE  "A"

                                PROMISSORY  NOTE


As  required by the Settlement Agreement made by and between the undersigned and
Pemcorp  Management Inc. ("PMI") effective July 31, 2000, the undersigned hereby
promises  to  pay, on or after September ___, 2000 upon demand without interest,
the  sum  of  TWENTY  ONE  THOUSAND  FOUR  HUNDRED  DOLLARS ($21,400.00) to PMI.


DATED  at  Vancouver,  B.C.  this  ____  day  of  September,  2000.


COAST  FALCON  RESOURCES  LTD.


As  per:

______________________________
Authorized  Signatory


                                      -86-