-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OETtMhVyHhTlW7tjZW14huFszsLxFIL2FkYkIOjk9SwSLH/8sTT06QL4QRrGHfTE DydZFw1uUWysdKZVFmOhzw== 0001062993-05-001520.txt : 20050701 0001062993-05-001520.hdr.sgml : 20050701 20050630193158 ACCESSION NUMBER: 0001062993-05-001520 CONFORMED SUBMISSION TYPE: 20-F PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20041231 FILED AS OF DATE: 20050701 DATE AS OF CHANGE: 20050630 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENTOURAGE MINING LTD CENTRAL INDEX KEY: 0001239672 STANDARD INDUSTRIAL CLASSIFICATION: MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400] IRS NUMBER: 000000000 STATE OF INCORPORATION: A1 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 20-F SEC ACT: 1934 Act SEC FILE NUMBER: 000-50305 FILM NUMBER: 05930014 BUSINESS ADDRESS: STREET 1: SUITE 614 STREET 2: 475 HOWE STREET CITY: VANCOUVER STATE: A1 ZIP: V6C 2B3 BUSINESS PHONE: 604-669-4367 MAIL ADDRESS: STREET 1: SUITE 614 STREET 2: 475 HOWE STREET CITY: VANCOUVER STATE: A1 ZIP: V6C 2B3 20-F 1 form20f.htm ANNUAL REPORT FOR THE FISCAL PERIOD ENDED DECEMBER 31, 2004 Filed by Automated Filing Services Inc. (604) 609-0244 - Entourage Mining Ltd. - Form 20-F

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F

¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934

OR

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2004

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number 000-50305

ENTOURAGE MINING LTD.
(Exact name of Registrant as specified in its charter)

Province of British Columbia, Canada
(Jurisdiction of incorporation or organization)

475 Howe, Suite 614, Vancouver, British Columbia V6C 2B3
(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class  Name of each exchange on which registered 
N/A  N/A 

Securities registered or to be registered pursuant to Section 12(g) of the Act.

Common Shares Without Par Value
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None
(Title of Class)


Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report:

16,273,505 common shares

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes o No

Indicate by check mark which financial statement item the registrant has elected to follow. ý Item 17 o Item 18

2


ENTOURAGE MINING LTD.
Form 20-F Annual Report
Table of Contents

  Part I  Page
 
Item  1. Identity of Directors, Senior Management and Advisers 4
Item  2. Offer Statistics and Expected Timetable 4
Item  3. Key Information 4
Item  4. Information on the Company 8
Item  5. Operating and Financial Review and Prospects 16
Item  6. Directors, Senior Management and Employees  19
Item  7. Major Shareholders and Related Party Transactions 23
Item  8. Financial Information 24
Item  9. The Offer and Listing 25
Item  10. Additional Information 27
Item  11. Quantitative and Qualitative Disclosures about Market Risk 34
Item  12. Description of Securities other than Equity Securities 34
 
  Part II   
 
Item  13. Defaults, Dividend Arrearages and Delinquencies 34
Item  14. Material Modifications to the Rights of Securities Holders and Use of Proceeds 34
Item  15. Controls and Procedures 34
Item  16 A.  Audit Committee Financial Expert 35
Item  16 B.  Code of Ethics 35
Item  16 C.  Principal Accountant Fees and Services 35
Item  16 E.  Purchases of Equity Securities by the Issuer and Affiliated Purchasers 36
 
  Part III   
 
Item  17. Financial Statements 36
Item  18. Financial Statements 37
Item  19. Exhibits 37

3


FORWARD-LOOKING STATEMENTS

We caution you that certain important factors (including without limitation those set forth in this Form 20-F) may affect our actual results and could cause such results to differ materially from any forward-looking statements that may be deemed to have been made in this Form 20-F annual report, or that are otherwise made by or on our behalf. For this purpose, any statements contained in this annual report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “except,” “believe,” “anticipate,” “intend,” “could,” estimate,” or “continue,” or the negative or other variations of comparable terminology, are intended to identify forward-looking statements.

PART I

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 

Not applicable

ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE 

Not applicable

ITEM 3.  KEY INFORMATION 

3.A Selected Financial Data

The following tables set forth our financial data for the last five years ended December 31. We derived all figures from our financial statements, which were examined by our independent auditors. This information should be read in conjunction with our financial statements included in this annual report.

Our financial statements included in this annual report and the table set forth below, have been prepared in accordance with accounting principles generally accepted in Canada. All amounts are expressed in Canadian dollars.

Selected Financial Data
(CDN$, except per share data)

  Year
Ended
12/31/04
Year
Ended
12/31/03
Year
Ended
12/31/02
Year
Ended
12/31/01
Year
Ended
12/31/00
Revenue  Nil Nil Nil Nil Nil
Net Income(Loss)  (956,446) (319,515)  (59,428)  (58,749)  (66,855) 
Earnings(Loss) Per Share  (0.06)  (0.04)  (0.01)  (0.01)  (0.01) 

4



           
Dividends Per Share  Nil  Nil  Nil  Nil  Nil 
Wtd. Avg. No. Shares  15,542,822  9,127,950  5,380,005  5,380,005  5,380,005 
 
Working Capital  138,483  -230,498  -161,799  -303,042  -244,293 
Mineral Properties  Nil  Nil  Nil  Nil  Nil 
Long Term Debt  Nil  Nil  Nil  Nil  Nil 
 
Shareholder’s Equity  145,292  -230,498  -161,799  -303,042  -244,293 
Total Assets  466,727  106,702  Nil  3,986  3,870 

In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian dollars.

Since June 1, 1970, the government of Canada has permitted a floating exchange rate to determine the value of the Canadian dollar as compared to the United States dollar. On June 29, 2005, the exchange rate in effect for Canadian dollars exchanged for United States dollars (the US dollars that a Canadian dollar buys) was $0.8116. This exchange rate is based on the noon buying rates in New York City, for cable transfers in Canadian dollars, as certified for customs purposes by the Federal Reserve Bank of New York. For the past five years ended December 31 and for the last six month ends from December 31, 2004 to May 31, 2005, the following exchange rates were in effect for Canadian dollars exchanged for United States dollars (the US dollars that a Canadian dollar buys), calculated in the same manner as above:

  Annual Period  Average 
 
  Year ended Dec 31, 2004 $ 0.7936        
  Year ended Dec 31, 2003 $ 0.7194        
  Year ended Dec 31, 2002 $ 0.6369        
  Year ended Dec 31, 2001 $ 0.6451        
  Year ended Dec 31, 2000 $ 0.6667        
 
 
  Monthly Period  Low - High 
 
  Month ended Dec 31, 2004  $ 0.8056  - $ 0.8433   
  Month ended Jan 31, 2005  $ 0.8051  - $ 0.8342   
  Month ended Feb 28, 2005  $ 0.7958  - $ 0.8131   
  Month ended Mar 31, 2005  $ 0.8024  - $ 0.8320   
  Month ended Apr 30, 2005  $ 0.7922  - $ 0.8159   
  Month ended May 31, 2005  $ 0.7988  - $ 0.8103   

3.B Capitalization and indebtedness

Not applicable

3.C Reasons for the offer and use of proceeds

Not applicable

5


3.D Risk factors

Any investment in our common shares involves a high degree of risk. You should consider carefully the following information before you decide to buy our common shares. If any of the events discussed in the following risk factors actually occurs, our business, financial condition or results of operations would likely suffer. In this case, the market price of our common shares could decline, and you could lose all or part of your investment in our shares. In particular, you should consider carefully the following risk factors:

We have a history of losses.

We have incurred losses in our business operations since inception, and we expect that we will continue to lose money for the foreseeable future. From our incorporation to December 31, 2004, we have incurred losses totalling $1,990,564. Very few junior resource companies ever become profitable and typically incur large losses until they enter production or are able to sell a mineral property to a major resource company. Failure to achieve and maintain profitability may adversely affect the market price of our common shares.

Very few mineral properties are ultimately developed into producing mines.

The business of exploration for minerals and mining involves a high degree of risk. Few properties that are explored are ultimately developed into producing mines. Most exploration projects do not result in the discovery of commercially mineable deposits of ore.

Substantial expenditures will be required for us to establish ore reserves through drilling, to develop metallurgical processes, to extract the metal from the ore and to develop the mining and processing facilities and infrastructure at any site chosen for mining.

Although substantial benefits may be derived from the discovery of a major mineral deposit, no assurance can be given that we will discover minerals in sufficient quantities to justify commercial operations or that we can obtain the funds required for development on a timely basis. The economics of developing precious and base metal mineral properties is affected by many factors including the cost of operations, variations in the grade of ore mined, fluctuations in metal markets, costs of processing equipment and other factors such as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection.

If we do not obtain additional financing, our business will fail.

Our current operating funds are less than necessary to acquire an interest in, and to conduct exploration on, a mineral property, and therefore we will need to obtain additional financing in order to complete our business plan. As at December 31, 2004, we had cash on hand of $433,617. Our business plan calls for significant expenses in connection with the acquisition and exploration of mineral claims. We will require additional financing in order to complete these activities. In addition, we will require additional financing to sustain our business operations if we are not successful in earning revenues once we complete exploration on any mineral property we acquire. We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required.

6


We believe the only realistic source of future funds presently available to us is through the sale of equity capital. Any sale of share capital will result in dilution to existing shareholders.

Because management has only limited experience in resource exploration, the business has a higher risk of failure.

Our management, while experienced in business operations, has only limited experience in resource exploration. None of our directors or officers has any significant technical training or experience in resource exploration or mining. We rely on the opinions of consulting geologists that we retain from time to time for specific exploration projects or property reviews. As a result of our management’s inexperience, there is a higher risk of our being unable to complete our business plan.

Mineral exploration involves a high degree of risk against which we are not currently insured.

Unusual or unexpected rock formations, formation pressures, fires, power outages, labour disruptions, flooding, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labour are risks involved in the operation of mines and the conduct of exploration programs. We have relied on and will continue to rely upon consultants and others for exploration expertise.

It is not always possible to fully insure against such risks and we may decide not to take out insurance against such risks as a result of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of our common stock.

We may require permits and licenses that we may not be able to obtain.

Our operations may require licenses and permits from various governmental authorities. There can be no assurance that we will be able to obtain all necessary licenses and permits that may be required to conduct exploration, development and mining operations at any projects we acquire.

Metal prices fluctuate widely.

Factors beyond our control may affect the marketability of any resource we discover. Metal prices have fluctuated widely, particularly in recent years. The effect of these factors cannot accurately be predicted.

The resource industry is very competitive.

The resource industry is intensely competitive in all its phases. We compete with many companies possessing greater financial resources and technical facilities than us for the acquisition of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees.

Our operations may be adversely affected by environmental regulations.

Our operations may be subject to environmental regulations promulgated by government agencies from time to time. Environmental legislation provides for restrictions and prohibitions on spills, release or emissions of various substances produced in association with certain mining industry operations, such as

7


seepage from tailings disposal areas, which would result in environmental pollution. A breach of such legislation may result in the imposition of fines and penalties. In addition, certain types of operations require the submission and approval of environmental impact assessments. Environmental legislation is evolving in a manner, which means that standards, enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for us and our directors, officers and consultants. The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of our operations. We do not maintain environmental liability insurance.

The trading market for our shares is not always liquid.

Although our shares trade on the NASD OTC Bulletin Board, the volume of shares traded at any one time can be limited, and, as a result, there may not be a liquid trading market for our shares.

Our securities may be subject to penny stock regulation.

Our stock is subject to “penny stock” rules as defined in 1934 Securities and Exchange Act rule 3151-1. The Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Our common shares are subject to these penny stock rules. Transaction costs associated with purchases and sales of penny stocks are likely to be higher than those for other securities. Penny stocks generally are equity securities with a price of less than U.S. $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for our common shares in the United States and shareholders may find it more difficult to sell their shares.

ITEM 4.  INFORMATION ON THE COMPANY 

4.A History and development of the Company

8


     Our Registered Office in British Columbia is located at 2602 – 1111 Beach Avenue, Vancouver, British Columbia, Canada. Our head office and principal office is located at 614 – 475 Howe Street, Vancouver, British Columbia, Canada.

     We were originally incorporated under the name, Entourage Holdings Ltd., pursuant to the Company Act (British Columbia) on June 16, 1995. On June 25, 1996, we changed our name to Entourage Mining Ltd.

     On February 18, 1998, we became a reporting Issuer as defined under the Securities Act of the Province of British Columbia in British Columbia, Canada.

     We have one subsidiary company, Entourage USA Inc., located at 6121 Lakeside Drive, Suite 260, Reno, Nevada 89511. The subsidiary company will seek mineral prospects in the United States.

We are engaged in the business of acquiring and exploring resource properties.

We are a reporting issuer in the United States and our Annual Report and 6K filings can be found on the SEC’s EDGAR system at www.sec.gov. We are a reporting issuer in certain Canadian jurisdictions and our required disclosure filings for Canada can be found at www.sedar.com.

As our business has developed, we have acquired interests in three resource properties as follows:

The Finlayson Lake Emerald Project (the Yukon Property)

In March 2003, we entered into an agreement with the YK Group, a syndicate of unrelated third party comprised of Paul Shatzko, Maryl Shatzko, Carl Verley, Shirley Verley, William Weston and Margaret Weston, to acquire YK Group’s interest in an option agreement dated November 13, 2002, entered into between the YK Group and Expatriate Resources Ltd., a company traded on the TSX-Venture Exchange. Upon the payment of $60,000 and delivery of 6,000,000 common restricted shares of our common stock, the YK Group will assign its interest to us in the November 13, 2002 option agreement. Of the $60,000 to be paid, $20,000 was paid to Expatriate by a third party on the Company’s behalf. The Company now owes this third party, Carl Verley, the sum of $20,000.

We have received an assignment of YK Group’s interest in the option agreement although we have not paid the YK Group $60,000.

By completing the YK Group’s obligations under the terms and conditions of the option agreement, we may acquire a 60% interest in and to the Finlayson Properties.

Because we assumed the obligations of the YK Group under its agreement with Expatriate, we are obligated to pay to Expatriate, CDN$80,000 in cash and to expend CDN$500,000 on the properties. Payment of the cash is as follows:

  On or before November 1, 2003 $ 10,000 (paid)  
  On or before November 1, 2004 $ 10,000 (paid)  
  On or before November 1, 2005 $ 15,000  
  On or before November 1, 2006 $ 15,000  
  On or before November 1, 2007 $ 30,000  

9


     Aggregate (total) expenditures on the properties are as follows:

  On or before November 1, 2003  $ 100,000 (completed)   
  On or before November 1, 2004  $ 150,000 (completed)   
  On or before November 1, 2005  $ 200,000 (completed)   
  On or before November 1, 2006  $ 250,000 (completed)   
  On or before November 1, 2007  $ 500,000  

Upon completion of the foregoing payments and expenditures, we will be assigned a 60% interest in and to the Finlayson properties. If the payments or expenditures do not occur at the precise time set forth therein, the agreement will be terminated.

The option agreement between YK Group and Expatriate grants the right to explore for gem materials on Expatriate’s claims. The extent of the exploration tenure will be reduced in time from the present 2976 claims to 200 claims in 5 years; in November 2004, the Company elected to reduce its option holdings to the Finlayson Lake Properties only and thereby informed Expatriate that the Light claims would no longer be included in the option agreement.

Expatriate has changed its name to “Yukon Zinc Corporation”.

The Black Warrior Project (the Nevada Property)

In June 2004, we entered into an option agreement (the “Black Warrior Agreement”) with Goodsprings Development Corp., a Nevada based corporation, whereby we may earn a 100% undivided interest in the Black Warrior project in Esmeralda County, Nevada.

To earn a 100% undivided interest in the Black Warrior project, Entourage Mining Ltd. (Lessee) shall make $USD payments to Goodsprings Development Corp (the “Lessor”) and Apex Deep Mines (the “Owner”) as described below:

Goodsprings Development Corp.

  Date    Rental Payment Amount   
 
  On execution of the Black Warrior Agreement 15,000.00 (paid)   
  June 1, 2005 15,000.00 (paid)   
  June 1, 2006 20,000.00   
  June 1, thereafter 25,000.00   
 
Apex '76' Deep Mines 
  September 4, 2004  4,000.00 (paid)   
  February 10, 2005 5,000.00 (paid)   
  February 10, 2006 7,500.00   
  February 10, thereafter 10,000.00   

10


Under the terms of the Black Warrior Agreement, Entourage may elect at any time to purchase the property for $400,000 USD and any Rental Payments paid shall be credited against the Purchase Price. There is no work commitment by the Company nor is there any share issuance in consideration of the Option in the Black Warrior Agreement.

All additional cash payments and work commitments are optional. However, if Entourage fails to make any cash payment on or before the times required as set out in the above table, the Option of Entourage to acquire the Black Warrior project shall terminate.

Upon Entourage completing the cash payments, Entourage shall have exercised the Option and shall have acquired a 100% undivided unencumbered beneficial interest in and to the Property subject only to a reserved 3% net smelter return royalty reserved unto Goodsprings. Entourage shall have the right to buy one-third of the foregoing 3% NSR for a one-time cash payment of $1,000,000 USD.

On April 21, 2005, the Company entered into agreement with United Carina Resources Corp. and CM KM Diamon ds Inc. whereby each of these two companies can acquire a 10% interest in the Black Warrior Project by paying to the Company the sum of $40,000 and making exploration expenditures of $85,000.

The Doran Uranium Property

In March 2005, Entourage Mining entered into an option agreement with Fayz Yacoub, a professional geologist and entrepreneur from Vancouver, British Columbia, to acquire a 100% undivided beneficial right, title and interest in 44 mineral claims known as the Doran Uranium Property situated in southeast Quebec approximately 85 kilometers east of Havre St. Pierre in the Baie Johan Beetz area of Costebelle Township. The claims encompass approximately 24.73 sq. km (2473.3 hectares). The Company can earn a 100% interest in the property by making cash payments of $35,000 (which has been done) and 125,000 shares in the first year (which shares have been issued) and a total of $220,000 and 750,000 shares over 4 years, expending $1,000,000 over three years in work commitments. The property is subject to a 2.5% net smelter royalty. The Company has the right to purchase up to three-fifths of the NSR, or 1.5%, for $1750,000.

The Hatchet Lake Uranium Properties

In April, 2005 the Company entered into an option with United Carina Resources Corp., a Saskatchewan company, to acquire a 20% interest in 4 uranium claim blocks situated in the Athabaska Basin of north-central Saskatchewan (the “Hatchet Lake Property”) for a cash payment of $40,000 (unpaid) and a work commitment of $100,000 per year for two years. The annual payments of $100,000 are to be made on a quarterly basis at $25,000 per quarter with the first payment due by June 30, 2005.

No work has yet been completed on the Hatchet Lake Property by the Company.

Competition

The mineral property exploration business, in general, is intensively competitive and there is not any assurance that even if commercial quantities of ore are discovered, a profitable market will exist for sale of same. Numerous factors beyond our control may affect the marketability of any substances discovered. These factors include market fluctuations, the proximity and capacity of natural resource markets and 11


processing equipment, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of mineral and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may make it difficult for us to receive an adequate return on investment.

We will compete with many companies possessing greater financial resources and technical facilities for the acquisition of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees.

Regulations

The Company is subject to the various environmental and business regulations of the jurisdictions in which it conducts mineral exploration.

These regulations can be onerous and, in some cases, expensive to comply with. In particular, the Company may be required to expend funds to reclaim or restore land disturbed by mineral exploration.

It is possible that the Company may not be able to afford to comply with various environmental and business regulations in the jurisdictions in which it conducts mineral exploration and would, as a result, have to curtail or cease operations and exploration.

The jurisdictions in which the Company is presently operating are, in the Company's view, known as jurisdictions which are friendly to mining activity and the Company believes that it can meet applicable regulatory requirements.

Management & Employees

We do not have any employees other than our directors and officers.

Our President and Chief Executive Officer, Gregory F. Kennedy, devotes approximately 50% of his business time to our affairs. We have a management agreement with Mr. Kennedy which is described in the “Related Party Transactions” section of this Annual Report.

Where necessary, we employ consultants, who in turn employ labourers, to further exploration on our mineral resource properties.

Office Space

We utilize about 600 square feet of office space in Vancouver, British Columbia. Our rent and related office expenses total approximately $1,400 per month.

4.C Organizational structure

Not applicable

4.D Property, plants and equipment

12


Disclosure required of an extractive enterprise is contained in part in Item 4, Part B above. As the Company’s properties are not at an advanced stage of exploration, no reserve estimates are made nor as of yet certain what if any reserves will be on the properties.

The Doran Uranium Property

The Doran Uranium Property consists of 44 contiguous mineral claims (polygons) covering approximately 2473.3 hectares in the Baie Johan Beetz area. The claim block is centered at GPS 548009 E and 5572265 N.

The Doran property is located in the southeastern part of Quebec, along the north shore of the Gulf of St. Lawrence, and about 25 kilometers west of Aguanish, approximately 85 kilometers east of Havre St. Pierre. The property extends inland from the Gulf of St Lawrence a distance of approximately 10 kilometers to the north.

The property is situated within the Costebelle Township, NTS map sheet 12 L/08. Access to the property is by daily scheduled flights to Natashquan-Aguanish, then by car from Aguanish to the Pashshibou River and to the southern part of the property.

The topography of the property for the most part is rolling hills having a maximum relief of 100 feet with elevation ranging from sea level to 100 feet. All mineralized areas of interest are located comfortably above sea and river levels. Any heavy equipment could very easily be driven from the road to any of the mineralized zones.

Exploration, including geological mapping, rock sampling, trenching and shallow drilling on the Doran Uranium Deposit resulted in the estimation of a historical uranium resource which requires verification to conform to Canadian NI 43-101 geological reporting standards. Before these standards were initiated, previous work on the property, done by Aguanish Uranium Inc., Noranda and Lacana Mining, was successful in locating and partially exposing several potential target areas, including the Doran East Centre target where three holes were drilled 14 feet apart with cores returning values of 6.4, 6.4 and 9.2 Lbs. Per ton U3 O8.

Entourage has made a down payment of $35,000 to acquire the option and has agreed to a work commitment of $200,000 of exploration in the first year of the Doran Uranium Property agreement.

Current State of Exploration

The Company’s Doran Uranium property acquisition does not have a NI 43-101 compliant report. The Company hopes to expend $200,000 in exploration work on this property in fiscal year 2005 and upon completion of these expenditures a compliant report may be commissioned. The Company does not have the working capital to make these expenditures and will have to raise further financing prior to undertaking exploration work.

The Hatchet Lake Uranium Properties

The Hatchet Lake properties are located 30 kilometers north and northeast of four known uranium deposits (Rabbit Lake, McLean Lake, Collins Bay and Eagle Point) and consist of 14,529 hectares (35,800 acres) of prospective uranium properties.

13


United Carina Resources Corp., a Saskatchewan based mineral exploration company, owns the Hatchet Lake Properties (TSX.V: UCA) and will be the operator of the project. The properties are accessible by improved gravel road from Highway 905 North in north central Saskatchewan.

Entourage will participate as to 20% of exploration expenses incurred by United Carina Resources Corp. The terms of the Agreement require the Company to pay $40,000 to United Carina and commit to a minimum of $200,000 in exploration expenditures over two years. At the present time the Company does not have sufficient financial resources to complete these obligations and will need to seek additional financing.

Current State of Exploration

United Carina Resources Corp. has informed the Company that a NI 43-101 geological report will be completed and United Carina will forward such report to the Company upon completion.

At this time, the Company will decide what program of exploration work it will undertake and will determine what financing it requires to undertake that program.

Black Warrior Project

The claim group is made up of 63 un-patented mining claims owned 100% by Goodsprings Development Corporation 2 held by Goodsprings under a mining lease from the Apex '76' Deep Mines Inc. The claims are located in Section 29, 30, 31&32, T. 1 S., R. 39 E.

The Black Warrior Property is situated in Esmeralda County, Nevada about 80 km (50 miles) southwest of Goldfield. Goldfield, the county seat, is 418 km (260 miles) southeast of Reno and 295 km (183 miles) northwest of Las Vegas. Both Reno and Las Vegas have regularly scheduled commercial air service. Silver Peak (pop 300) has been the center of mining activity since the1860’s. The village provides modest amenities including living quarters, etc. There are no services in Silver Peak and most residents shop in Tonapah. Silver Peak is suitable for housing a small workforce. The main industry is the former Cyprus Foote Lithium salt operation.

Entourage Mining Ltd. acquired the claims from Goodsprings Development Corporation of Nevada. The elevation on the property ranges from 4,960 feet on the eastern border to 6,000 feet on the western boundary of the claims. Access is via roughly 6 miles of unimproved dirt road and 2 miles of well-maintained gravel road from Nevada paved highway 226.

The property lies in the south-central portion of the Walker Lane Belt (WLB), a tectonically 'disturbed zone' which marks the physio-graphic boundary between the predominantly NNE-trending ranges of Nevada in the central Great Basin and the NW trending blocks of the composite Sierra Nevada massif in eastern Califomia. The WLB is a composite of 9 structural blocks with differing structural styles. The presence of abundant, faulted, volcanic cover rocks of Late Cenozoic age across much of the WLB indicates that regardless of style, faulting in all structural blocks is of the same age span, Late Cenozoic. In the Silver Peak and Lone Mountain areas, a low-angle decollement surface separates an extended upper plate of brittle deformed Proterozoic and Lower Paleozoic rocks from penetratively deformed Precambrian sedimentary rocks and plutonic rocks of various ages.

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The Black Warrior project is a low-sulfidation, vein hosted system with potential for discovery of bulk-tonnage Au-Ag, Cu-Pb-Zn mineralization, high-grade Ag-Au veins and deep sediment-hosted gold mineralization. The table below summarizes the Black Warrior Project claims blocks (additional ground has since been staked but not yet registered):

At present the Company is concentrating its exploration activities on the Black Warrior Project in Esmeralda County Nevada. In November 2004, the Company employed the services of James A Turner, a professional geologist and a NI 43-101 'qualified person' to prepare a NI 43-101 compliant report on the Black Warrior Project. This report may be accessed at www.sedar.com under the Company’s public documents dated February 18, 2005.

In February 2005, Entourage contracted the services of Zonge Geosciences of Tucson Arizona to conduct a Controlled Source Magneto Telluric Survey (CSAMT) of the Black Warrior Project in Esmeralda County Nevada. The survey results were interpreted in report form by an independent geo-scientist, Frank Fritz of Sparks Nevada. Mr. Fritz reported to the Company as follows:

“The CSAMT survey appears to have defined a complex faulted range front block of sediments that ends abruptly into a deep and unusual alluvial filled basin to the northeast. The outcrop areas appear to be complexly faulted by northwest structures that are, in turn, offset by a series of north by northeast structures with considerable offsets.

The resistivities define at least eight rock units and two areas of unusual responses, Target areas I and II. The first Target area appears to fit the expected detachment fault structure mineralization type and may reflect multiple detachment structures. The second Target does not fit the typical geology of the area or the detachment target and may be a possible hot springs system. Both of these possible target areas appear to be on a horst block defined by two north northeasterly structures. The two Target areas are recommended for drilling. Both can be tested, approximately along CSMT Line 5, with angle holes. The interpreted Line 5 section is included below with expected targets and recommended drill holes.

No additional geophysical work is recommended until the current interpretation is evaluated with respect to the geology and tested by a drilling program. After drilling, the geophysical interpretation should be reevaluated to determine if other targets may exist. If additional property is acquired additional CSMT may be useful in assessing the potential of these areas and the relationship with the current survey area.”

Current State of Exploration:

The Company has received relevant tax material from the US Internal Revenue Service for the Company’s US subsidiary and is now awaiting final drill permit approval from the Bureau of Land Management prior to undertaking any drilling or further exploration. The Company’s geologist, James A.Turner, in conjunction with Ken Brook, a Nevada based consultant to the Company, has determined that a 20 drill hole program with 4 trenches should be conducted on targets identified by the Zonge survey. Drilling is anticipated to commence soon after the permits are issued provided that the Company can raise working capital to finance the work program.

The Finlayson Lake Properties:

Our claims comprise a total of 135,000 acres or 54,600 hectares. The properties are located in a northwesterly trending belt approximately 220 km in length by 35 km in width centered at latitude 61 degrees 31 minutes North, longitude 131 degrees 08 minutes West in southeastern Yukon Territory. The Finlayson Properties are located in the northern Pelly Mountains of the Yukon Plateau. The project area is 260 km east-northeast of Whitehorse and 180 km northwest of Watson Lake by air. The community of Ross River is located at the northwest end of the area.

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The Finlayson Properties contain two thousand six hundred twenty six (2626) un-surveyed mining claims in the Watson Lake Mining District and the Whitehorse Mining District, in the Yukon Territory.

Access to the Finlayson Properties is via helicopter from the Finlayson Lake airstrip.

The properties are located in the northern Pelly Mountains of the Yukon Plateau. The area is covered by glacial - fluvial deposits at elevations below 1,700 meters and contain rocky outcropping and talus at higher elevations. Outcropping is sparse except along ridge crests, in north-facing cirques, and along actively eroding creek cuts. The main rock types occurring in the area are nearly flat lying layered metamorphic rocks belonging to the Yukon-Tanana Terrane. The Yukon-Tanana Terrane can be subdivided into several thrust faults bound in succession ranging in age from Devonian to Triassic. The rocks record the transition from continental margin sedimentation through continental arc magmatism to final submarine rifting. Intrusive into Yukon-Tanana successions are rocks ranging in age from late Devonian to Tertiary and ranging in composition from ultramafic to felsic. The foregoing was observed by Michael A. Power, M.Sc., P.Geo., when he visited the properties. We have been advised by Aurora Geosciences Ltd. that emeralds may be found in some parts of the Grass Lakes succession, the lowest member of the Yukon-Tanana Terrane. Not all members of the Yukon-Tanana Terrane contains emeralds. We do not know if there are potentially significant occurrences of economic mineralization on the properties.

In September 2003, the Company contracted the services of Amerlin Exploration Services Ltd. and Mr. Carl G. Verley, P. Geo and a member of the YK Group and a “qualified person” as defined in Canadian Mining “National Policy 43-101.

The complete report of Amerlin Exploration Services Ltd. on the 2003 exploration program is available on the Company website at www.entouragemining.com.

Current State of Exploration:

The Company’s 2003 / 2004 exploration program was disappointing for the search for emeralds.

With this in mind, the Company has decided to hold the Finlayson Lake claims until after the 2005 exploration season. The Company anticipates that True North Gems, another company in the area of the Finlayson Lake project, will make an exploration decision about its emerald exploration activities by October 2005. Should True North fail to find significant sized emeralds Entourage may elect to drop its option with Yukon Zinc Corp. This decision is expected to be made in the fall of 2005 but in advance of the $7,500 payment deadline of November 2005 under its agreement concerning the Finlayson Lake Properties.

ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS 

5.A Operating results

Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until

16


we begin removing and selling minerals. Accordingly, we must raise cash from sources other than the sale of minerals found on the properties. That cash must be raised from other sources. Our only other source for cash at this time is investments by others in Entourage Mining Ltd. We must raise cash to implement our project and stay in business. Even if we raise money, we do not know how long the money will last. It depends upon the amount of exploration we conduct and the cost thereof. We won’t know that information until we begin exploring our properties. We will not be able to complete the exploration of our properties until we raise money.

If we find mineralized material and it is economically feasible to remove the mineralized material, we will attempt to raise additional money through a subsequent private placement, public offering or through loans. If we do not raise all of the money we need, we will have to find alternative sources of funding, like a public offering, a private placement of securities, or loans from our officers or others.

Our exploration program is explained in as much detail as possible in the business section of this registration statement. We are not going to buy or sell any plant or significant equipment during the next twelve months. We will not buy any equipment until we have located a body of minerals and we have determined they are economical to extract from the land. We do not intend to interest other companies in the properties if we find mineralized materials. We intend to try to develop the reserves ourselves.

During the period ending December 31, 2004, the Company spent $178,678 in exploration activities and paid or accrued $118,788 in option payments. During the year ended December 31, 2003, the Company incurred exploration costs of $176,628 and paid or accrued $70,000 in option payments. However, as per US GAAP, these expenses have not been capitalized and have been expensed instead.

The Company's loss (as well as operating expenses) for the year ended December 31, 2004 ('fiscal 2004') totaled $956,446 or $0.06 per share compared to $319,515 or $0.04 per share for the year ended December 31, 2003 ('fiscal 2003'). This was mainly because during fiscal 2004, office and sundry expenses were $45,803 as compared to $18,832 during fiscal 2003; during fiscal 2004 telephone expenses were $13,003 as compared to NIL during fiscal 2003; mineral property acquisition & exploration costs during fiscal 2004 were $297,466 as compared to $246,628 during fiscal 2003; consulting expenses were $70,013 during fiscal 2004 as compared to $3,000 during fiscal 2003; stock based compensation during fiscal 2004 was $421,000 as compared to NIL during fiscal 2003; during fiscal 2004 travel & promotion expenses were $66,579 as compared to NIL during fiscal 2003; during fiscal 2004 the rent expense was $9,177 as compared to NIL during fiscal 2003. This increase in expenses was mainly because the Company was much more active during the fiscal 2004, as compared to during fiscal 2003. These increased expenses during the fiscal 2004 were partially offset by the reduced professional fees which were $33,622 during fiscal 2004 compared to $49,399 during fiscal 2003.

5.B Liquidity and capital resources

As of the date of this report, we have yet to generate any revenues from our business operations.

On February 5, 2004, the Company completed a private placement for 889,500 units, comprised of one common share and one common share purchase warrant, at a price of $0.22 per unit, plus 108,000 flow-through common shares at a price of $0.22 per share, for total consideration of $219,450.

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On June 8, 2004, the Company completed a private placement for 698,000 units, comprised of one common share and one common share purchase warrant, at a price of $0.404 (US$0.30) per unit, for total consideration of $282,331.

On December 31, 2004 the Company completed a private placement for 2,815,500 units, comprised of one common shares and one common share purchase warrant, at a price of $0.18 (US$0.15) per share, for total consideration of $510,876. In addition the Company issued 132,000 common shares paid as a finder’s fee in connection with the placement.

On December 31, 2004, the Company had $433,617 in cash and $459,918 in current assets as compared to having $95,133 in cash and $106,702 in current assets on December 31, 2003. On December 31, 2004 the Company had a positive working capital position of $138,483 as compared to a negative working capital position of $230,498 on December 31, 2003.

As of the date of this Annual Report, the Company has approximately negative $95,000 in working capital (a deficit). As a result, it is unable to undertake significant work programs and exploration on its mineral properties without first raising further financing.

5.C Research and development, patents and licenses, etc.

Our methods of exploration, development and extraction are not unique to our Company but are common in our industry.

We do not rely on patents, technological licenses or intellectual property licenses in our operations.

We did not have any research and development expenditures in the year ended December 31, 2004.

5.D Trend information

Our Black Warrior project is prospective for gold and copper.

The overall trend for mineral resources, and in particular for the gold and copper that the Company’s properties are prospective for, has been upwards in price for the last two to three years although some stabilization and leveling of prices has occurred in both commodities in the last six months.

We cannot predict with certainty where the price of copper or gold will move.

Both the market for copper and the market for gold are homogeneous, integrated commodities markets with a large number of both suppliers and buyers. The market is not one which is particularly susceptible to the influence of one or more large suppliers or buyers.

Our Hatchet Lake and Doran mineral properties are prospective for uranium.

There are fewer producers of uranium in the world than there are for copper and gold. The market for uranium is a homogeneous, integrated commodities market. The market is not one that is particularly susceptible to the influence of one or more large suppliers or buyers. The world average grade from producing uranium mines is 0.15 per cent U3O8, with spot uranium prices having risen from a cyclical low of US$7.10 (U.S.) per pound in late 2000 to US$29/lb. on June 29, 2005.

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Our Finlayson Lake Properties are prospective for emeralds.

The emerald market is fractured and not homogenous. Unlike the diamond industry, the emerald industry does not have a Central Selling Organization (CSO) and the sales of emeralds cannot be categorized as having a discernable trend. Emerald prices vary with the quality of the individual gem.

5.E Off-balance sheet arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

5.F Tabular disclosure of contractual obligations

Not Applicable.

ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 

6.A Directors and senior management

The following is a list of the current directors and senior officers of the Company, their municipalities of residence, their current position with the Company and their principal occupations:

Name of Director  Age  Principal Occupation 
- ---------------------- - -----  
Gregory F. Kennedy  55  President of the Company 
President, Director     
Victoria, BC     
 
Dr. Paul Shatzko  71  Director of several companies 
Director, Chairman     
Langley, BC     
 
Michael B. Hart  57  Director, Secretary 
Director, Secretary    Management Consultant and President of 
Roberts Creek, BC    Hart-Byrne Enterprises Ltd. 
 
Executive Officers:     
 
Name of Officer  Age  Office 
- -------------------- - ----- - -------
Gregory F. Kennedy  55  President, Chief Executive Officer 
Michael B. Hart  57  Secretary 
Prabha Varshney  45  Chief Accounting Officer 

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Our directors hold office until our next annual meeting of shareholders and until their successors have been elected and qualified. Our officers are elected by our board of directors at our annual meeting after each of our annual meetings of shareholders and hold office until their death, or until they resign or have been removed from office.

The following describes the business experience of our directors and executive officers, including other directorships held in reporting companies:

Gregory F. Kennedy – Director, President and Chief Executive Office

At our annual general meeting in April 2004, Mr. Kennedy was appointed as President of the Company. Since May 2003, Greg Kennedy has been a director of the Company. Since July 2001, Mr. Kennedy has been the Vice President of Operations and since July 2002, a Director of ABA.T.V, formerly Fountain House Holdings located in Vancouver, British Columbia. ABA.H.V. is a shell corporation with no business purpose other than to merge with or acquire another corporation. ABA.T.V is listed for trading on the TSX Venture Exchange under the symbol ABA.H. Since November 2002, Mr. Kennedy was the President and a Director of Digital Capital.com, Inc., a Delaware corporation, located in Squamish, British Columbia. Digital Capital.com, Inc., was a blank check corporation with no business purpose other than to merge with or acquire another corporation. Digital Capital.com, Inc. did not merge with any entity and the company ceased to exist in 2004. Due to a medical condition, from December 2000 to July 2001, Mr. Kennedy was not employed and furnished limited consulting services as an independent contractor. From November 1998 to December 2000, Mr. Kennedy was Marketing Director of Titan Trading Analytics Inc. located in Vancouver, British Columbia. Titan Trading is a purveyor of computer software designed for the securities and investment community. From January 1991 to November 1998, Mr. Kennedy was a stockbroker with McDermid St. Lawrence Securities, now Raymond James Canada, located in Vancouver, British Columbia.

Dr. Paul Shatzko – Director and Chairman

Mr. Shatzko is a retired radiologist and self employed businessman; he is a director of several public companies and a director of Entourage Mining Ltd. since July 31, 2004.

Michael B. Hart - Director and Corporate Secretary

Mr. Hart has worked in the financial markets sector with a number of large financial institutions between 1983 and 1990 where he acted as an account executive and financial consultant. From 1990-1995, Mr. Hart fulfilled the responsibilities of business and sales manager within the automotive industry. Subsequent to 1995, Mr. Hart worked with an investment-banking group that was responsible for taking projects from start up to the public markets and has had experience with public companies in the oil and gas industry. Currently, Mr. Hart is President of Hart-Byrne Enterprises Ltd. a private British Columbia company and is a member of the Board of Directors of AMG Oil Ltd. and Durum Consolidated Energy. Mr. Hart is a Member of the Board and the Corporate Secretary for Entourage Mining Ltd.

Prabha Varshney, Chief Accounting Officer

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Prabha Varshney has a Bachelor's of Commerce degree from Agra University, India and a diploma in accounting from the Vancouver Community College, Vancouver. During the last five years she has been a sales person selling Registered Education Savings Plans for USC Education Savings Plan (a non-profit foundation). Mrs. Varshney acts as the Chief Accounting Officer for Entourage Mining Ltd.

6.B Compensation of Directors

We are required, under applicable securities legislation in Canada, to disclose to our shareholders details of compensation paid to our directors. The following fairly reflects all material information regarding compensation paid to our directors in our fiscal year ended December 31, 2004.

Summary Compensation Table

NAME AND
PRINCIPAL
POSITION 
YEAR  ANNUAL COMPENSATION  LONG-TERM COMPENSATION 
Salary
  ($) 
Bonus 
($) 
Other Annual  Compensation
($) 1
Awards 
LTIP 
payouts 
($) 
All Other 
Compensation 
($)2
Restricted 
Stock 
Awards
 
($) 
Securities 
Underlying 
Options/ 
SAR’s 
(#) 
Gregory F. 
Kennedy 
President and 
Chief 
Executive 
Officer 
2004  Nil  Nil  35,0003  Nil  500,000  Nil  Nil 
Michael Hart 
Director 
2004  Nil  Nil  Nil  Nil  75,000  Nil  Nil 
Paul Shatzko 
Director 
2004  Nil  Nil  Nil  Nil  Nil  Nil 

1 The value of perquisites and benefits, if any, for each Named Executive Officer was less than the lesser of $50,000 and 10% of the total annual salary and bonus
2 For further details, refer to the heading "Related party transactions" below
3 Paid or accrued as a payable for consulting fees of which $25,950.29 remained payable as of December 31, 2004
4 Accrued as a payable

6.C Board practices

The directors hold office until the next annual general meeting of the shareholders at which time they may stand for re-election. We are required to hold an annual general meeting once in every calendar year and not longer than thirteen months from the last annual general meeting.

We are a party to a management contract with Gregory F. Kennedy. No other directors have service contracts with us, nor are they entitled to any termination benefits.

There are no service contracts with the Company for the directors providing for benefits upon termination of their service.

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The Company does not have an executive committee.

Our audit committee is comprised of Gregory F. Kennedy, Dr. Paul Shatzko and Michael Hart. Members of audit committee oversee our accounting and financial reporting process and the audits of our financial statements. The audit committee also receives and addresses complaints regarding accounting, internal controls, and auditing issues. No complaints have been received by us as of the date hereof. Further, the audit committee provides protection for whistle blowers. Again, no whistle blowing issues have presented themselves to us as of the date hereof. The audit committee functions in a collective manner with respect to all issues that come before it.

6.D Employees

We have no employees other than our officers and directors. When we engage in exploration of our resource properties, we use geological consultants and contract labour to support them.

6.E Share ownership

     Our directors and officers own beneficially the following shares as of the date of this annual report:

Name  Number of Shares Owned  Percentage of Outstanding
Common Shares
Gregory F. Kennedy  0% 
Paul Shatzko  733,000  4.5% 
Michael Hart  0% 
Prabha Varshney  0% 

The above percentages are based on the number of common shares issued and outstanding in our capital stock as of the date of this annual report, which is 16,273,505.

The following incentive stock options are outstanding to our directors and officers:

Name 

Shares that may be 
Purchased Upon 
Exercise of Option 

Exercise Price  Expiry Date 
Gregory F. Kennedy  500,000  $0.15  February  9,  2009 
Michael Hart  150,000  $0.15  February  9,  2009 
Prabha Varshney  $0.15  February  9,  2009 
Paul Shatzko  $0.15  February  9,  2009 

The Company has an incentive stock option plan. This Stock Option Plan provides for equity participation in the Company by its directors, officers, employees and consultants through the

22


acquisition of common shares pursuant to the grant of options to purchase common shares. The exercise price for options granted under the Stock Option Plan is determined by the closing trading price on the day immediately preceding the date of grant or such other price as the Directors, in their discretion, may determine. The Company has reserved and authorized 2,200,000 shares for issuance under the Stock Option Plan.

Options will be exercisable for a term of up to five years, subject to earlier termination in the event of death or the optionee’s cessation of services to the Company; and options granted under the stock option plan are non-assignable, except by will or the laws of descent and distribution.

ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 

7.A Major shareholders

As used in this section, the term "beneficial ownership" with respect to a security is defined by Regulation 228.403 under the Securities Exchange Act of 1934, as amended, as consisting of: (1) any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares voting power (which includes the power to vote, or to direct the voting of such security) or investment power (which includes the power to dispose, or to direct the disposition of, such security); and (2) any person who, directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling arrangement or any other contract, arrangement or device with the purpose or effect of divesting such person of beneficial ownership of a security or preventing the vesting of such beneficial ownership.

As of the date of this annual report, there are 16,273,505 common shares issued and outstanding in our capital stock. We are authorized to issue an unlimited number of common shares and preferred shares. We have not issued any preferred shares since our incorporation.

As of the date of this annual report, the following persons known to us were the beneficial owner of more than five percent of our outstanding common shares:

Name  Number of Shares  Percentage of Total
Paul Shatzko  733,000  4.50%
William Weston  1,134,000  6.97%
Maryl Shatzko  1,141,000  7.01%

Of our 73 registered shareholders, 66 are Canadian residents representing 14,174,005 common shares or 87.10% of our issued and outstanding common shares. We have 7 registered US shareholders holding 2,224,500 common shares or 13.67% of our issued and outstanding common shares.

Each of our issued common shares entitles the holder to one vote in general meeting. There are no disproportionate or weighted voting privileges.

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We are not controlled directly or indirectly by any other corporation or any other foreign government or by any other natural or legal person, severally or jointly.

There are no arrangements the operation of which at a subsequent date may result in a change in our control.

Our trust and transfer agent is Computershare Trust Company of Canada, which is located at 4th Floor – 510 Burrard Street, Vancouver, British Columbia, Canada V6C 3B9.

7.B Related party transactions

Fiscal Year Ended December 31, 2002:

The Company owed a company controlled by its former President, Ernest Peters, a total of $100,000 for management services (including provision of offices and office equipment). The Company also owed Ernest Peters personally $9,167 for management fees.

These amounts were owing from, and incurred in, previous years and no amounts were incurred to related parties in that fiscal year.

Fiscal Year Ended December 31, 2003:

The Company owed a company controlled by its former President, Ernest Peters, a total of $100,000 for management services (including provision of offices and office equipment). These funds were owing from previous year’s outstanding amounts and no new amounts were accrued to this company during fiscal year ending December 31, 2003.

The Company also owed Ernest Peters personally $49,735 for management fees, being the $9,167 outstanding from the fiscal year ending December 31, 2002 plus additional amounts accrued during the fiscal year ending December 31, 2003.

The Company also owed Gregory F. Kennedy, its President, $2,505 for expenses incurred by him on its behalf in the fiscal year ended December 31, 2003.

Fiscal Year Ended December 31, 2004:

In the fiscal year ending December 31, 2004, the Company made a payment of $36,108 on the $100,000 owed to a company controlled by its former President, Ernest Peters. This left a total of $63,892 owing to that company.

Also in that year, the Company paid $11,300 to Ernest Peters personally, leaving a balance owing to him of $38,435.

The Company’s President, Gregory F. Kennedy, received a total of $41,100 in compensation from the Company for provision of management services and for reimbursement of approximately $6,100 in expenses incurred on behalf of the Company. Of these amounts $25,950 remained payable at year end.

At year end, a Director of the Company, Paul Shatzko, was owned $54,500 by the Company. These amounts represent funds advanced by him to the Company or to third parties to cover Company expenses.

At year end, a company which had a common director with the Company, Gee-Ten Ventures Inc., was owed $14,000 for office expenses incurred on behalf of the Company. The common director is Paul Shatzko and the $14,000 was incurred entirely in the fiscal year ended December 31, 2004.

C. Interests of experts and counsel

Our principal accountants, experts and legal counsel have no interest in our shareholdings. The other items of this instruction are not applicable to Annual Filings on Form 20F.

ITEM 8.  FINANCIAL INFORMATION 

8.A Consolidated Statements and other Financial Information

The following financial statements for the year ended December 31, 2004 with comparatives for December 31, 2003, have been audited by an independent auditor, are accompanied by an audit report and are attached and incorporated herein:

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(a)  balance sheet; 
(b)  income statement; 
(c)  statement showing changes in equity; 
(d)  cash flow statement; 
(e)  related notes and schedules required by the comprehensive body of accounting standards pursuant to which the financial statements are prepared; and 
(f)  a note analyzing the changes in each caption of shareholders’ equity presented in the balance sheet. 

Incorporated herewith are the comparative financial statements covering the latest two financial years, audited in accordance with a comprehensive body of auditing standards.

Export Sales

The Company had no export sales in its latest financial year ended December 31, 2004 and, as a result, the percentage of export sales for the Company was zero.

Legal Proceedings

There are no material pending legal proceedings to which the Company is a party or of which any of its properties are subject. Management is not aware of any material proceedings in which any director, any member of management or any of the Company’s affiliates are a party adverse to, or have a material interest advserse to, the Company.

Dividend Policy

The Company has not paid dividends on the common shares in any of its last five fiscal years. The directors of the Company will determine if and when dividends should be declared and paid in the future based on the Company’s financial position at the relevant time. All of the common shares of the Company are entitled to an equal shares in any dividends declared and paid.

8.B Significant Changes

There have been no significant changes, as that term is defined in the rules and policies governing the use of the Form 20F, since the date of the audited financial statements included herein.

ITEM 9.  THE OFFER AND LISTING 

A. Offer and listing details

Our shares commenced trading on February 2, 2004 on the Over-the-Counter Bulletin Board in the United States under the symbol ETGMF.

The following table sets forth the high and low closing prices in US funds of our common shares traded:

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Annual Periods  High  Low 
 
February 2, 2004 to December 31, 2004  $ 0.50  $ 0.083 
 
Quarterly Periods     
 
February 2004 to March 2004  $ 0.45  $ 0.10 
April 2004 to June 2004  $ 0.50  $ 0.30 
July 2004 to September 2004  $ 0.43  $ 0.125 
October 2004 to December 2004  $ 0.20  $ 0.083 
 
Monthly Periods     
 
December 2004  $ 0.20  $ 0.165 
January 2005  $ 0.30  $ 0.20 
February 2005  $ 0.22  $ 0.18 
March 2005  $ 0.34  $ 0.22 
April 2005  $ 0.51  $ 0.25 
May 2005  $ 0.30  $ 0.18 

9.B Plan of distribution

Not applicable

9.C Markets

Our shares commenced trading on February 2nd, 2004 on the Over-the-Counter Bulletin Board in the United States under the symbol ETGMF, however, a lack of liquidity may make it difficult to resell shares

There are no plans, proposals, arrangements or understandings with any person with regard to the development of a trading market in any of our securities.

9.D Selling shareholders

Not applicable

9.E Dilution

Not applicable

9.F Expenses of the issue

Not applicable

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ITEM 10.  ADDITIONAL INFORMATION 

10.A Share Capital

Not Applicable.

10.B Memorandum and articles of association

We have no bylaws. Under British Columbia law they are called Articles of Incorporation.

  1.     
Our Memorandum and Articles of Incorporation do not limit in any manner our business purpose. As such, no provision relating to the same is contained in the Memorandum or Articles of Incorporation.
 
  2.     
Directors
 
   
a.     
A director shall disclose the nature and extent of his interest in a contract or transaction. A director shall not vote on any contract or transaction in which he is interested. The foregoing shall not apply to: (1) a loan to us which the director is guaranteeing repayment; (2) any contract or transaction for the benefit of a holding company or a subsidiary corporation of which the a director is a director; (3) any contract by a director to subscribe for or underwrite securities in which a director is interested if all the other directors are interested; (4) determining the remuneration of the directors: (5) purchasing and maintaining insurance to cover directors against liability incurred by them as directors; or, (6) indemnification of any director.
 
    b.     
Directors are empowered to vote compensation to themselves even in the absence of an independent quorum.
 
    c.     
Our board of directors may from time to time on our behalf borrow money. We have no prohibition against loaning money to a director.
 
    d.     
There are no provisions for retirement or non-retirement of directors under an age limit requirement.
 
    e.     
There is no number of shares which must be owned for director's qualification.
 
  3.      Shares
 
    a.     
The board of directors may from time-to-time declare and authorize payment of dividends. No dividend will be paid otherwise than out of

27



      funds and/or assets properly available therefore. There is no time limit after which dividend entitlement lapses.
 
    b.     
Each shareholder shall have one vote for each share of common stock owned by him. At each annual meeting the entire board of directors retire and shareholders shall elect an new board of directors. There are no staggered intervals and cumulative voting is not provided for.
 
    c.     
Shareholders do not have the right to share in our profits.
 
    d.     
Shareholders are entitled to share in any surplus upon liquidation, after the payment of all creditors and superior equity securities.
 
    e.     
We may redeem any of our shares at the price and on the terms as determined by our board of directors.
 
    f.     
There are no sinking fund provisions.
 
    g.     
Shareholders are not liable for further capital calls.
 
    h.     
There are no provisions discriminating against any existing or prospective holder of common stock as a result of a shareholder owning a substantial number of shares of common stock.
 
  4.     
No alteration shall be valid as to any outstanding shares unless the holders of the shares consent thereto or by a resolution passed by 3/4s of the outstanding shares.
 
  5.     
The annual general meeting of shareholders is called by written notice mailed by the board of directors to each shareholder of record. A quorum shall be a least two persons represented at the meeting either in person or by proxy. Extraordinary (special) general meetings are called by written notice mailed by the board of directors to each shareholder of record. The quorum remains the same for Extraordinary Meetings. There are no conditions of admission to the meetings.
 
  6.     
There are no limitations on the rights to own securities, including the rights of non-resident or foreign shareholders to hold or exercise voting rights on the securities, imposed by the laws of British Columbia, or our articles or other constituent document.
 
  7.     
There are no provisions in our articles that would have an effect of delaying, deferring or preventing a change in our control and that would operate only with respect to any merger, acquisition or corporate restructuring involving us.
 
  8.     
There are no provisions in our articles which require the disclosure of shareholder ownership.

28



    9.      The law applicable to us is not significantly different from that in the host country.
 
    10.      The conditions imposed by the articles governing changes in the capital are not more stringent than is required by law.

10.C Material contracts

There are no material contracts except as discussed in this Annual Report and except as entered into in the ordinary course of business. The following material contracts referred to in this Annual Report may be inspected at our offices during normal business hours.

  1.     
Agreement dated March 17, 2003, between the Company and the YK Group;
 
  2.     
Agreement dated June 1, 2004 between the Company and Goodsprings Development Corp. whereby the Company can acquire up to a 100% interest in and to the Black Warrior Project;
 
  3.     
Agreement dated March 15, 2005 between Fayz Yacoub and the Company whereby the Company can acquire a 100% interest in the Doran Uranium Property;
 
  4.     
Agreement dated April 7, 2005 between United Carina Resources Corp. and the Company whereby the Company can acquire a 20% right in the Hatchet Lake Property;
 
  5.     
Agreement dated April 21, 2005 between the Company and United Carina Resources Corp. whereby United Carina may acquire up to a 10% interest in the Company’s Black Warrior Project; and
 
  6.     
Agreement dated April 21, 2005 between the Company and CM KM Diamon ds, Inc. whereby CM KM may acquire up to a 10% interest in the Company’s Black Warrior Project.

10.D Exchange Controls

There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other payments to a non-resident holder of common shares, other than withholding tax requirements. See "Item 10.E Taxation".

There is no limitation imposed by Canadian law or by our constituent documents on the right of a non-resident to hold or vote common shares, other than are provided in the Investment Canada Act (Canada). The following summarizes the principal features of the Investment Canada Act (Canada).

The Investment Canada Act (Canada) requires certain "non-Canadian" individuals, governments, corporation or other entities who wish to acquire a "Canadian business" (as defined in the

29


Investment Canada Act), or establish a "new Canadian business" (as defined in the Investment Canada Act) to file either a notification or an application for review with a governmental agency known as "Investment Canada". The Investment Canada Act requires that certain acquisition of control of Canadian business by a "non-Canadian" must be reviewed and approved by the Minister responsible for the Investment Canada Act on the basis that the Minister is satisfied that the acquisition is "likely to be of net benefit to Canada", having regard to criteria set forth in the Investment Canada Act. Only acquisitions of control are reviewable under the Investment Canada Act; however, the Investment Canada Act provides detailed rules for the determination of whether control has been acquired and, pursuant to those rules, the acquisition of one-third or more of the voting shares of a corporation may, in some circumstances, be considered to constitute an acquisition of control. Certain reviewable acquisitions of control may not be implemented before being approved by the Minister; if the Minister does not ultimately approve a reviewable acquisition, which has been completed, the acquired Canadian business must be divested. Failure to comply with the review provisions of the Investment Canada Act could result in, amongst other things, an injunction or a court order directing disposition of assets of shares.

10.E Taxation

Certain US Federal Income Tax Consequences

The following is a general discussion of the material United States Federal income tax law for U.S. holders that hold such common shares as a capital asset, as defined under United States Federal income tax law and is limited to discussion of U.S. Holders that own less than 10% of the common stock. This discussion does not address all potentially relevant Federal income tax matters and it does not address consequences peculiar to persons subject to special provisions of Federal income tax law, such as those described below as excluded from the definition of a U.S. Holder. In addition, this discussion does not cover any state, local or foreign tax consequences.

The following discussion is based upon the sections of the Internal Revenue Code of 1986, as amended to the date hereof (the "Code"), Treasury Regulations, published Internal Revenue Service ("IRS") rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time. In addition, this discussion does not consider the potential effects, both adverse and beneficial, of any future legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time. The following discussion is for general information only and it is not intended to be, nor should it be construed to be, legal or tax advice to any holder or prospective holder of common shares of the Company and no opinion or representation with respect to the United States Federal income tax consequences to any such holder or prospective holder is made. Accordingly, holders and prospective holders of common shares of the Company should consult their own tax advisors about the Federal, state, local, and foreign tax consequences of purchasing, owning and disposing of common shares of the Company.

U.S. Holders

30


As used herein, a "U.S. Holder" is a holder of common shares of the Company who or which is a citizen or individual resident (or is treated as a citizen or individual resident) of the United States for federal income tax purposes, a corporation or partnership created or organized (or treated as created or organized for federal income tax purposes) in the United States, including only the States and District of Columbia, or under the law of the United States or any State or Territory or any political subdivision thereof, or a trust or estate the income of which is includable in its gross income for federal income tax purposes without regard to its source, if, (i) a court within the United States is able to exercise primary supervision over the administration of the trust and (ii) one or more United States trustees have the authority to control all substantial decisions of the trust.

For purposes of this discussion, a U.S. Holder does not include persons subject to special provisions of Federal income tax law, such as tax-exempt organizations, qualified retirement plans, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers and Holders who acquired their stock through the exercise of employee stock options or otherwise as compensation.

Distributions on common shares of the Company

U.S. Holders receiving dividend distributions (including constructive dividends) with respect to common shares of the Company are required to include in gross income for United States Federal income tax purposes the gross amount of such distributions to the extent that the Company has current or accumulated earnings and profits, without reduction for any Canadian income tax withheld from such distributions. Such Canadian tax withheld may be credited, subject to certain limitations, against the U.S. Holder's United States Federal income tax liability or, alternatively, may be deducted in computing the U.S. Holder's United States Federal taxable income by those who itemize deductions. (See more detailed discussion at "Foreign Tax Credit" below). To the extent that distributions exceed current or accumulated earnings and profits of the Company, they will be treated first as a return of capital up to the U.S. Holder's adjusted basis in the common shares and thereafter as gain from the sale or exchange of the common shares. Preferential tax rates for long-term capital gains are applicable to a U.S. Holder which is an individual, estate or trust. There are currently no preferential tax rates for long-term capital gains for a U.S. Holder which is a corporation.

Dividends paid on the common shares of the Company will not generally be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations. A U.S. Holder which is a corporation may, under certain circumstances, be entitled to a 70% deduction of the United States source portion of dividends received from the Company if such U.S. Holder owns shares representing at least 10% of the voting power and value of the Company. The availability of this deduction is subject to several complex limitations, which are beyond the scope of this discussion.

Foreign Tax Credit

A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of common shares of the Company may be entitled, at the option of the U.S.

31


Holder, to either a deduction or a tax credit for such foreign tax paid or withheld. Generally, it will be more advantageous to claim a credit because a credit reduces United States Federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayer's income subject to tax. This election is made on a year-by-year basis and applies to all foreign taxes paid by (or withheld from) the U.S. Holder during that year. There are significant and complex limitations, which apply to the credit, among which is the general limitation that the credit cannot exceed the proportionate shares of the U.S. Holder's United States income tax liability that the U.S. Holder's foreign source income bears to his or its world-wide taxable income. In the determination of the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources. Complex rules govern this classification process. There are further limitations on the foreign tax credit for certain types of income such as "passive income," "high withholding tax interest," "financial services income," "shipping income" and certain other classifications of income. The availability of the foreign tax credit and the application of the limitations on the credit are fact specific and holders and prospective holders of common shares of the Company should consult their own tax advisors regarding their individual circumstances.

Disposition of common shares of the Company

A U.S. Holder will recognize gain or loss upon the sale of common shares of the Company equal to the difference, if any, between the amount of cash plus the fair market value of any property received, and the Holder's tax basis in the common shares of the Company. This gain or loss will be capital gain or loss if the common shares are a capital asset in the hands of the U.S. Holder. Any capital gain will be a short-term or long-term capital gain or loss depending upon the holding period of the U.S. Holder. Gains and losses are netted and combined according to special rules in arriving at the overall capital gain or loss for a particular tax year. Deductions for net capital losses are subject to significant limitations. For U.S. Holders which are individuals, any unused portion of such net capital loss may be carried over to be used in later tax years until such net capital loss is thereby exhausted. For U.S. Holders which are corporations (other than corporations subject to Subchapter S of the Code), an unused net capital loss may be carried back three years from the loss year and carried forward five years from the loss year to be offset against capital gains until such net capital loss is thereby exhausted.

Certain Canadian Federal Income Tax Consequences

The following discussion summarizes the principal Canadian federal income tax considerations generally applicable to a person who owns one or more common shares of the Company (the "Shareholder"), and who at all material times for the purposes of the Income Tax Act (Canada) (the "Canadian Act") deals at arm's length with the Company, holds all common shares solely as capital property, is a non-resident of Canada, and does not, and is not deemed to, use or hold any Common share in or in the course of carrying on business in Canada. It is assumed that the common shares will at all material times be listed on a stock exchange that is prescribed for the purposes of the Canadian Act.

This summary is based on the current provisions of the Canadian Act, including the regulations thereunder, and the Canada-United States Income Tax Convention (1980) (the "Treaty") as

32


amended. This summary takes into account all specific proposals to amend the Canadian Act and the regulations thereunder publicly announced by the government of Canada to the date hereof and the Company's understanding of the current published administrative and assessing practices of Canada Customs and Revenue Agency. It is assumed that all such amendments will be enacted substantially as currently proposed, and that there will be no other material change to any such law or practice, although no assurances can be given in these respects. Except to the extent otherwise expressly set out herein, this summary does not take into account any provincial, territorial or foreign income tax law or treaty.

This summary is not, and is not to be construed as, tax advice to any particular Shareholder. Each prospective and current Shareholder is urged to obtain independent advice as to the Canadian income tax consequences of an investment in common shares applicable to the Shareholder's particular circumstances.

A Shareholder generally will not be subject to tax pursuant to the Canadian Act on any capital gain realized by the Shareholder on a disposition of a Common share unless the Common share constitutes "taxable Canadian property" to the Shareholder for purposes of the Canadian Act and the Shareholder is not eligible for relief pursuant to an applicable bilateral tax treaty. A Common share that is disposed of by a Shareholder will not constitute taxable Canadian property of the Shareholder provided that the Common share is listed on a stock exchange that is prescribed for the purposes of the Canadian Act (the Toronto Stock Exchange is so prescribed), and that neither the Shareholder, nor one or more persons with whom the Shareholder did not deal at arm's length, alone or together at any time in the five years immediately preceding the disposition owned, or owned any right to acquire, 25% or more of the issued shares of any class of the capital stock of the Company. In addition, the Treaty generally will exempt a Shareholder who is a resident of the United States for the purposes of the Treaty, and who would otherwise be liable to pay Canadian income tax in respect of any capital gain realized by the Shareholder on the disposition of a Common share, from such liability provided that the value of the Common share is not derived principally from real property (including resource property) situated in Canada or that the Shareholder does not have, and has not had within the 12-month period preceding the disposition, a "permanent establishment" or "fixed base," as those terms are defined for the purposes of the Treaty, available to the Shareholder in Canada. The Treaty may not be available to a non-resident Shareholder that is a U.S. LLC, which is not subject to tax in the U.S. Any dividend on a Common share, including a stock dividend, paid or credited, or deemed to be paid or credited, by the Company to a Shareholder will be subject to Canadian withholding tax at the rate of 25% on the gross amount of the dividend, or such lesser rate as may be available under an applicable income tax treaty. Pursuant to the Treaty, the rate of withholding tax applicable to a dividend paid on a Common share to a Shareholder who is a resident of the United States for the purposes of the Treaty will be reduced to 5% if the beneficial owner of the dividend is a company that owns at least 10% of the voting stock of the Company, and in any other case will be reduced to 15%, of the gross amount of the dividend. It is Canada Customs and Revenue Agency`s position that the Treaty reductions are not available to a Shareholder that is a "limited liability company" resident in the United States. The Company will be required to withhold any such tax from the dividend, and remit the tax directly to Canada Customs and Revenue Agency for the account of the Shareholder.

33


ALL PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF PURCHASING THE COMMON SHARES.

10.F Dividends and paying agents

Not Applicable to Annual Reports on Form 20F.

10.G Statement by experts

Not Applicable to Annual Reports on Form 20F.

10.H Documents on Display

The documents concerning the Company which are referred to in this Report on Form 20F are located at its principal executive offices at the address on the face page of this Report.

10.I Subsidiary information

We have one subsidiary, Entourage USA Inc., located at 6121 Lakeside Drive, Suite 260, Reno, Nevada 89511. The subsidiary company is seeking mineral prospects in the United States.

ITEM 11.  Quantitative and Qualitative Disclosure about Market Risk 

The Company does not have market portfolios and does not engage in trading risk sensitive instruments or financial instruments. The Company is an extractive enterprise.

ITEM 12.  Description of Securities Other than Equity Securities 

Not applicable.

PART II

ITEM 13.  Defaults, Dividend Arrearages and Delinquencies 

The Company has had no material defaults in payment of principal, interest or sinking or purchase fund instalments. The Company is an extractive enterprise.

ITEM 14.  Material Modifications to the Rights of Security Holders and Use of Proceeds 

Not applicable

ITEM 15.  Controls and Procedures 

34


Our Chief Executive Officer and President, Gregory F. Kennedy and our Chief Accounting Officer, Prabha Varshney, after evaluating the effectiveness of the Company’s disclosure controls and procedures (as defined in US Exchange Act Rule 13(a)-14(c) within 90 days of the date of this Form 20-F have concluded that, as of such date, the Company’s disclosure controls and procedures were effective at the reasonable assurance level to ensure that material information relating to the Company was made known to them by others within the Company particularly during the period in which this Form 20-F was being prepared.

Under US Exchange Act Rule 13a-15(e) the term “disclosure controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the US Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the US Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable, rather than absolute, assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

15.D Changes in Internal Control over financial reporting

There were no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date our Chief Executive Officer and our Chief Accounting Officer completed their evaluation, nor were there any significant deficiencies or material weaknesses in the Company’s internal controls requiring corrective actions.

ITEM 16.  [reserved] 

16A. Audit Committee Financial Expert

We do not have an audit committee financial expert serving on our audit committee.

16.B Code of Ethics

The Company does not have a written Code of Ethics. No Code of Ethics is presently required under the Company’s incorporating jurisdiction or its Canadian reporting jurisdictions.

16.C Principal Accountant Fees and Services

35



(a)  Audit Fees 

The aggregate fees billed for each of the last two fiscal years for professional services rendered by the Company’s principal accountant for the audit of the Company’s annual financial statements, together with services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $6,250 for the year ending December 31, 2003 and $4,250 for the year ending December 31, 2004.

On June 2, 2005, the company changed its principal accountants to Dale Matheson Carr-Hilton Labonte ("DMCL") who prepared the financial statements attached hereto. The aggregate fees billed by DMCL for professional services in connection with statuatory and regulatory filings or engagements were $6,000 for the year ending Dec 31, 2004. DMCL did not provide services to the company in the year ending Dec. 31, 2003.

(b)  Audit-Related Fees 

  The aggregate fees billed for each of the last two fiscal years for assurance and related services by the principal accountant that were reasonably related to the performance of the audit or review of the Company’s financial statements but are not reported under paragraph (a) of this Item were nil.

(c)  Tax Fees 

The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning were nil.

(d)  All Other Fees 

The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant other than services disclosed in paragraphs (a) through (c) of this Item were $nil in the year ending December 31, 2004 and $nil in the year ending December 31, 2003.

16.D Exemptions from the Listing Standards for Audit Committees

The disclosure required under Exchange Act Rule 10A-3(d) is not applicable to the Company.

16.E Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The Company made no issuer repurchases, including any made pursuant to a publically announced plan or program or made pursuant to a plan or program that was not announced publically, in the last two fiscal years. The Company made no open market issuer repurchases.

PART III

ITEM 17.  Financial Statements 

36


Our financial statements are attached hereto immediately after the signatures section. Our audited financial statements include:

 

- our balance sheets as at December 31, 2004 and December 31, 2003;

-statements of loss and deficit for the periods ended December 31, 2004 December 31, 2003;

-statements of cash flows for the periods ended December 31, 2004 and December 31, 2003; and

- notes to the financial statements.


ITEM 18.  FINANCIAL STATEMENTS 

Not applicable. Financial statements are provided under Item 17.

ITEM 19.  EXHIBITS 

1. Certificate of Incorporation and Certificate of Amendment and Registration of  Restated Articles and Bylaws * 
     
4. Material Contracts 
   
(a) Agreement dated March 17, 2003, between the Company and the YK Group; *
     
(b) Agreement dated June 1, 2004 between the Company and Goodsprings Development Corp. whereby the Company can acquire up to a 100% interest in and to the Black Warrior Project; 
     
(c) Agreement dated March 15, 2005 between Fayz Yacoub and the Company whereby the Company can acquire a 100% interest in the Doran Uranium Property; 
     
(d) Agreement dated April 7, 2005 between United Carina Resources Corp. and the Company whereby the Company can acquire a 20% right in the Hatchet Lake Property; 
     
(e) Agreement dated April 21, 2005 between the Company and United Carina Resources Corp. whereby United Carina may acquire up to a 10% interest in the Company’s Black Warrior Project; and

37



  (f) Agreement dated April 21, 2005 between the Company and CM KM Diamon ds, Inc. whereby CM KM may acquire up to a 10% interest in the Company’s Black Warrior Project.
 
31.1 Section 302 Certification of Chief Executive Officer
 
31.2 Section 302 Certification of Chief Financial Officer
   
32.1 Section 906 Certification of Chief Executive Officer
   
32.2 Section 906 Certification of Chief Financial Officer

* incorporated by reference from our registration statement on Form F-1 that was originally filed with the commission on December 4, 2003.

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly cause and authorized the undersigned to sign this statement on its behalf.

ENTOURAGE MINING LTD. 
 
Dated: June 29, 2005 
 
By: /s/ Gregory F. Kennedy                   
       Gregory F. Kennedy, President 

38


 

 

 

ENTOURAGE MINING LTD.
(An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2004 AND 2003
(Stated in Canadian Dollars)

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of Entourage Mining Ltd.

We have audited the consolidated balance sheet of Entourage Mining Ltd. (an exploration stage company) as at December 31, 2004 and the consolidated statement of operations, stockholders’ equity and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of Entourage Mining Ltd. as of December 31, 2003 and December 31, 2002, were audited by other auditors whose report dated May 6, 2004, included an explanatory paragraph regarding the Company's ability to continue as a going concern.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2004 and the results of its operations and its cash flows and the changes in stockholders’ equity for the year then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, to date the Company has incurred losses of $1,914,932, has no sources of revenue, and further losses are anticipated. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in this regard are also described in Note

1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

"Dale Matheson Carr-Hilton Labonte"

DALE MATHESON CARR-HILTON LABONTE
CHARTERED ACCOUNTANTS

June 14, 2005
Vancouver, Canada


ENTOURAGE MINING LTD.
(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS
(Stated in Canadian Dollars)

    DECEMBER 31  
    2004     2003  
             
ASSETS         
             
Current         
       Cash  $ 433,617   $ 95,133  
       Advances and prepaid expenses    1,984     -  
       Goods and Services Tax recoverable    24,317     11,569  
    459,918     106,702  
Equipment (Note 3)    6,809     -  
             
  $ 466,727   $ 106,702  
             
LIABILITIES         
             
Current         
       Accounts payable and accrued liabilities  $ 124,658   $ 184,960  
       Amounts payable to related parties (Note 6)    196,777     152,240  
    321,435     337,200  
             
CONTINGENCIES AND COMMITMENTS (Notes 1, 4, 9 & 10)         
             
SHAREHOLDERS’ EQUITY (DEFICIENCY)         
             
Capital Stock (Note 5)         
       Authorized:         
              100,000,000 common voting shares without par value         
       Issued:         
              16,273,505 common voting shares (2003 – 15,130,005)    1,431,053     336,501  
             
Other Contributed Capital    629,171     200,671  
             
Subscriptions Received    -     190,816  
             
Accumulated deficit during the exploration stage    (1,914,932 )    (958,486
    145,292     (230,498
             
  $ 466,727   $ 106,702  

Approved by the Board of Directors:     
     
     
                       “Gregory F. Kennedy”    “Paul Shatzko” 

The accompanying notes are an integral part of these consolidated financial statements


ENTOURAGE MINING LTD.
(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in Canadian Dollars)

      June 16, 1995  
  YEARS ENDED   (inception)  
  DECEMBER 31   To  
      December 31,  
  2004   2003   2004  
  $   $   $  
Expenses       
       Amortization  1,036   -   1,036  
       Consulting  70,013   3,000   73,013  
       Consulting – stock based compensation  421,000   -   421,000  
       Mineral property acquisition and exploration costs  297,466   246,628   686,977  
       Interest expense  1,123   1,656   8,587  
       Management fees  -   -   225,000  
       Office and sundry  45,803   18,832   65,998  
       Professional fees  33,622   49,399   166,938  
       Rent  9,177   -   189,177  
       Telephone  13,003   -   13,003  
       Travel and promotion  66,579   -   66,579  
             
Loss Before Taxes  (958,822 )  (319,515 (1,917,308
             
Deferred tax recovery  2,376   -   2,376  
             
Net Loss For The Year  (956,446 )  (319,515 (1,914,932
             
             
Loss Per Share, basic and diluted  (0.06 )  (0.04  
             
Weighted Average Number Of Shares Outstanding  15,542,822   9,127,950    

The accompanying notes are an integral part of these consolidated financial statements


ENTOURAGE MINING LTD.
(An Exploration Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIENCY)
(Stated in Canadian Dollars)

  NUMBER         OTHER           
  OF         CONTRIBUTED      ACCUMULATED      
  SHARES     AMOUNT     CAPITAL      DEFICIT     TOTAL  
                             
Share issued for cash  5   $ 1   $   $ -   $ 1  
Loss for the period  -     -           (38,624   (38,624
Balance, December 31, 1995  5     1         (38,624   (38,623
                             
Shares issued for cash  9,130,000     276,500         -     276,500  
Loss for the year  -     -         (210,592   (210,592
Balance, December 31,1996  9,130,005     276,501         (249,216   27,285  
Loss for the year  -     -         (74,529   (74,529
Balance, December 31, 1997  9,130,005     276,501         (323,745   (47,244
Loss for the year  -     -         (60,148   (60,148
Balance, December 31, 1998  9,130,005     276,501         (383,893   (107,392
Loss for the year  -     -         (70,046   (70,046
Balance, December 31, 1999  9,130,005     276,501         (453,939   (177,438
Loss for the year  -     -         (66,855   (66,855
Balance, December 31, 2000  9,130,005     276,501         (520,794   (244,293
Loss for the year  -     -         (58,749   (58,749
Balance, December 31, 2001  9,130,005     276,501         (579,543   (303,042
Forgiveness of amounts due to                     
      related party  -     -     200,671      -     200,671  
Loss for the year  -     -         (59,428   (59,428
Balance, December 31, 2002  9,130,005     276,501     200,671      (638,971   (161,799
April 25, 2003 - shares issued                     
      for mineral property  6,000,000     60,000         -     60,000  
Loss for the year  -     -         (319,515   (319,515
Balance, December 31, 2003  15,130,005     336,501     200,671      (958,486   (421,314
February 5, 2004 – shares issued                     
      for cash at $0.22 per share  997,500     219,450         -     219,450  
February 5, 2004 - deferred tax                     
      recovery on 108,000 flow-                     
      through shares  -     (2,376       -     (2,376
June 8, 2004 – shares issued for                     
      cash at $0.404 per share  698,000     282,331         -     282,331  
August 24, 2004 – stock options                     
      exercised at $0.33 per share  100,000     32,983         -     32,983  
December 31, 2004 – shares                     
      issued for cash at $0.18 per                     
      share inclusive of 132,500                     
      shares as finders’ fees  2,948,000     510,876         -     510,876  
August 24, 2004 - shares issued                     
      for mineral property database                     
      at $0.39 per share  150,000     58,788         -     58,788  
September 24, 2004 - shares                     
      returned on cancellation of                     
      escrow  (3,750,000   (7,500   7,500      -     -  
Stock based compensation  -     -     421,000      -     421,000  
Loss for the year  -     -         (956,446   (956,466
Balance, December 31, 2004  16,273,505   $ 1,431,053   $ 629,171    $ (1,914,932 $ 145,292  

The accompanying notes are an integral part of these consolidated financial statements


ENTOURAGE MINING LTD.
(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in Canadian Dollars)

      June 16, 1995  
  YEARS ENDED   (inception)  
  DECEMBER 31   To  
      December 31,  
  2004   2003   2004  
  $   $   $  
CASH FLOWS FROM OPERATING ACTIVITIES       
Net loss for the year  (956,446 )  (319,515 (1,914,932
Adjustments to reconcile net loss to net cash from       
      operating activities:       
           Amortization  1,036   -   1,036  
           Stock based compensation  421,000   -   421,000  
           Shares issued for exploration and mineral property       
                  acquisition costs  58,788   60,000   118,788  
           Deferred tax recovery  (2,376 )  -   (2,376
             
Changes in non-cash operating working capital items:       
           Advances and prepaid expenses  (1,984 )  -   (1,984
           Goods and Services Tax recoverable  (12,748 )  (11,569 (24,317
           Accounts payable and accrued liabilities  (60,302 )  132,328   124,658  
           Amounts payable to related parties  44,537   43,073   196,777  
NET CASH FLOWS USED IN OPERATING ACTIVITIES  (508,495 )  (95,683 (1,081,350
             
CASH FLOWS USED IN INVESTING ACTIVITIES       
       Equipment  (7,845 )  -   (7,845
NET CASH FLOWS USED IN INVESTING ACTIVITIES  (7,845 )  -   (7,845
             
CASH FLOWS FROM FINANCING ACTIVITIES       
       Net proceeds on sale of common stock  854,824   190,816   1,322,141  
       Contributed capital       -   -   200,671  
NET CASH FLOWS FROM FINANCING ACTIVITIES  854,824   190,816   1,522,812  
             
INCREASE IN CASH  338,484   95,133   433,617  
CASH, BEGINNING OF YEAR  95,133   -   -  
             
CASH, END OF YEAR  433,617   95,133   433,617  

SUPPLEMENTAL CASH FLOW INFORMATION (Refer to Note 8)

The accompanying notes are an integral part of these consolidated financial statements



ENTOURAGE MINING LTD.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003

(Stated in Canadian Dollars)


1.     
NATURE AND CONTINUANCE OF OPERATIONS
 
 
Organization
 
The Company was incorporated in the Province of British Columbia, Canada on June 16, 1995.
 
 
Exploration Stage Activities
 
The Company has been in the exploration stage since its formation and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Upon location of a commercial reserve, the Company would enter the development stage.
 
 
Going Concern
 
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. This contemplates that assets will be realized and liabilities and commitments satisfied in the normal course of business.
 
 
As reported in the accompanying consolidated financial statements the Company has incurred a net loss of $1,914,932 for the period from June 16, 1995 (inception) to December 31, 2004 and has no source of revenue. The future of the Company is dependent upon its ability to obtain financing and upon future acquisition, exploration and development of profitable operations from mineral property interests. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management has plans to seek additional capital through a private placement and public offering of its common stock. Although there are no assurances that management’s plans will be realized, management believes that the Company will be able to continue operations in the future. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
 
2.     
SIGNIFICANT ACCOUNTING POLICIES
 
 
The financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:
 
 
a)     
Basis of Presentation
 
   
These consolidated financial statements include the accounts of the Company and its wholly owned inactive subsidiary, Entourage USA Inc. which was incorporated in the State of Nevada on November 3, 2003. All intercompany transactions have been eliminated upon consolidation.
 
   
The financial statements as at December 31, 2003 and for the year then ended are not consolidated.



ENTOURAGE MINING LTD.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003

(Stated in Canadian Dollars)


2.     
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 
b)     
Mineral Claim Payments and Exploration Expenditures
 
   
The Company expenses all costs related to the acquisition, maintenance and exploration relating to unproven mineral properties, to which it has secured exploration rights. When proven and probable reserves are determined for a property and a feasibility study prepared with respect to the property, then subsequent exploration and development costs of the property will be capitalized. To date, the Company has not established the commercial feasibility of its exploration prospects. Therefore, all costs have been expensed.
 
 
c)     
Use of Estimates
 
   
The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions of future events that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period. Significant areas requiring the use of management estimates relate to the determination of impairment of assets, mineral property carrying values, useful lives for depreciation and amortization, and determination of fair value for stock based transactions. Financial results as determined by actual events could differ from those estimates.
 
 
d)     
Equipment
 
   
Equipment is stated at cost less accumulated amortization. Amortization based on the estimated useful life of the asset is calculated as follows:
 
   
Office furniture                    20% straight line basis
Computer equipment          25% straight line basis
 
 
e)     
Environmental Costs
 
   
Environmental expenditures that relate to current operations are charged to operations or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are charged to operations. Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the cost can be reasonably estimated. Generally, the timing of these accruals coincides with the earlier of completion of a feasibility study or the Company’s commitments to plan of action based on the then known facts.
 
 
f)     
Capital Stock – Flow-through shares
 
   
Under United States GAAP when flow-through shares are issued, the proceeds are allocated between the issue of shares and the sale of tax benefits. The allocation is made based on the difference between the quoted price of the existing shares and the amount that the investor pays for the shares. The shareholders' equity is reduced and a liability is recognized for this difference which amounted to $2,376 for the flow-through shares issued in 2004. The liability is reversed when the tax benefits are renounced and a deferred tax liability is recognized at that time. Income tax expense (recovery) is the difference between the amount of the deferred tax liability and the liability recognized on issuance.



ENTOURAGE MINING LTD.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003

(Stated in Canadian Dollars)


2.     
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 
g)     
Foreign Currency Translation
 
   
The functional currency of the Company is Canadian dollars and these financial statements are presented in Canadian dollars unless otherwise noted. Foreign denominated monetary assets and liabilities are translated to their Canadian dollar equivalents using foreign exchange rates in effect at the balance sheet date. Non-monetary items are translated at historical exchange rates, except for items carried at market value, which are translated at the rate of exchange in effect at the balance sheet date. Revenues and expenses are translated at average rates of exchange during the year. Exchange gains and losses arising on foreign currency translation are included in the determination of operating results for the period.
 
 
h)     
Financial Instruments
 
   
The Company’s financial instruments consist of cash, Goods and Services Tax recoverable, accounts payable and accrued liabilities and amounts payable to related parties. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair value of the Company’s current assets and current liabilities are estimated by management to approximate their carrying values based on the immediate or short-term maturity of these instruments.
 
   
The fair value of amounts due to related parties is not determinable as they have no repayment terms (Note 6).
 
   
The fair value of the Company’s rights to purchase net smelter royalties (“NSR”) (refer to Note 4) is not determinable at the current stage of the Company’s exploration program. No value has been assigned by management. The Company does not use any derivative or hedging instruments.
 
 
i)     
Income Taxes
 
   
The Company has adopted Statement of Financial Accounting Standards (“SFAS”) No. 109 – “Accounting for Income Taxes” (SFAS 109). This standard requires the use of the asset and liability approach for accounting and reporting on income taxes. Deferred tax assets and liabilities are recognized for the future consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. To the extent that it is not more likely than not that a deferred tax asset will be realized, a valuation allowance is provided.



ENTOURAGE MINING LTD.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003

(Stated in Canadian Dollars)


2.     
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 
j)     
Stock Based Compensation
 
   
Effective from January 1, 2003, the Company adopted the fair value method of accounting for employee stock compensation cost pursuant to Financial Accounting Standards Board (“FASB”) Statement 123. Prior to that date, the Company used the intrinsic value method under APB Opinion 25. No compensation cost was recognized in 2002, as there were no options outstanding at that date. Under the method of accounting for the change to the fair value method, compensation cost recognized in 2003 is the same amount that would have been recognized if the fair value method would have been applied for all years since the original effective date of FASB Statement 123 (January 1, 1995). There was no effect on net income and earnings per share had the fair value method been applied in each of the years 2004 and 2003 as there were no outstanding awards in each of those years.
 
 
k)     
Loss Per Share
 
   
Basic loss per common share is computed in accordance with SFAS No. 128 – “Earnings Per Share” by dividing income and losses by the weighted average number of common shares outstanding for the year. Diluted loss per share amounts reflect the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted to common shares. The presentation is only of basic earnings (loss) per share as the effect of potential dilution of securities is anti-dilutive.
 
 
l)     
Recent Accounting Pronouncements
 
   
(i)           In March 2004, the FASB issued EITF No. 03-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments ("EITF 03-1"). The objective of EITF 03- 1is to provide guidance for identifying impaired investments. EITF 03-1 also provides new disclosure requirements for investments that are deemed to be temporarily impaired. In October 2004, the FASB delayed the recognition and measurement provisions of EITF 03-1 until implementation guidance is issued. The disclosure requirements are effective for annual periods ending after June 15, 2004, and remain in effect. Management believes that the adoption of EITF 03-1 will not have a material impact on the Company’s financial condition or results of operations.
 
   
(ii)            In November 2004, the FASB issued SFAS No. 151, Inventory Costs (“SFAS 151”). SFAS 151 requires issuers to treat idle facility expense, freight, handling costs, and wasted material (spoilage) as current-period charges regardless of whether such charges are considered abnormal. In addition, SFAS 151 requires the allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. SFAS 151 will be effective for all inventory costs incurred in fiscal years beginning after June 15, 2005. Management believes the adoption of this standard will not have a material impact on the Company's financial position or results of operations.



ENTOURAGE MINING LTD.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003

(Stated in Canadian Dollars)


2.     
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 
l)     
Recent Accounting Pronouncements (continued)
 
   
(iii)      In December 2004, the FASB issued SFAS No. 123 (Revised 2004), Share-Based Payment ("SFAS 123(R)"), which requires the compensation cost related to share-based payments, such as stock options and employee stock purchase plans, be recognized in the financial statements based on the grant-date fair value of the award. SFAS 123(R) is effective for all interim periods beginning after December 15, 2005. Management is currently evaluating the impact of this standard on the Company’s financial condition and results of operations.
 
   
(iv)      In December 2004, the FASB issued SFAS No. 153, Exchanges of Non-monetary Assets, an amendment of APB Opinion No. 29, Accounting for Non-monetary Transactions (“SFAS 153”) SFAS 153 requires that exchanges of non-monetary assets are to be measured based on fair value and eliminates the exception for exchanges of non-monetary, similar productive assets, and adds an exemption for non-monetary exchanges that do not have commercial substance. SFAS 153 will be effective for fiscal periods beginning after June 15, 2005. Management does not believe that the adoption of this standard will have a material impact on the Company’s financial condition or results of operations.
 
3.     
EQUIPMENT

            2004            2003 
            Accumulated      Net Book      Net Book 
      Cost      Amortization      Value      Value 
  Office furniture  $ 2,812    $ 281    $ 2,531    $
  Computer equipment    5,033      755      4,278     
    $ 7,845    $ 1,036    $ 6,809    $

4.      MINERAL PROPERTY INTERESTS
 
  a)      Yukon Property
 
   
By an assignment agreement dated March 17, 2003, as amended May 17, 2003, the Company holds an option to acquire a 60% interest, subject to a 3% gross overriding royalty, in certain mineral claims located in the Yukon Territory. As consideration for the assignment, the Company has agreed to pay to the assignor, the sum of $60,000 (unpaid) sixty days after the Company completes a financing and to issue 6,000,000 common shares (issued). As of June 14, 2005 the optionor has confirmed that the agreement is not in default and that the $60,000 can be paid once the Company completes a larger financing. Under the terms of the option agreement, the Company must incur a total of $500,000 in exploration expenditures, and make additional cash payments totalling $80,000 through November 1, 2007.

      Payment Amount   
    Date option payment due  CDN $   
    November 1, 2003  10,000  (paid (see (a)(i)) 
    November 1, 2004  10,000  (paid (see (a)(i)) 
    November 1, 2005  15,000   
    November 1, 2006  15,000   
    November 1, 2007   30,000   



ENTOURAGE MINING LTD.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003

(Stated in Canadian Dollars)


4.     
MINERAL PROPERTY INTERESTS (Continued)
 
 
a)     
Yukon Property (continued)
 
   
i)     
The November 1, 2003 and November 1, 2004 payments have been paid on behalf of the Company by the engineer on the property. These amounts are included in accounts payable as at December 31, 2004.
 
 
b)     
Nevada Property
 
   
Pursuant to the terms of a Mining Sublease and Option to Purchase Agreement, dated June 1, 2004, the Company acquired a mining lease and an option to acquire a 100% interest in and to certain patented and unpatented mineral claims located in Esmeralda County, Nevada. The lease is for an initial ten year term with ten one year extensions available. The agreement is subject to a 3% NSR. The Company has an option at any time to purchase the Property for US $400,000 less lease payments paid to the date of exercise of the option. The Company has the right at any time to purchase one-third of the NSR for US $1,000,000.
 
   
To earn a 100% undivided interest in the Nevada Property the Company shall make $USD payments to the Lessor and the Owner as listed below:

      Payment Amount   
    Date payment due  US $   
         
    To Lessor:     
    On execution of Agreement  15,000  (paid) 
    June 1, 2005  15,000  (subsequently paid) 
    June 1, 2006  20,000   
    June 1, 2007 and each anniversary thereafter  25,000   
         
    To Owner:     
    September 4, 2004  4,000  (paid) 
    February 10, 2005  5,000  (paid) 
    February 10, 2006  7,500   
    February 10, 2007 and each anniversary thereafter  10,000   

5.      CAPITAL STOCK
 
  a)      Issued Shares
 
    i)     
On February 5, 2004, the Company completed a private placement for 889,500 units comprised of one common share and one common share purchase warrant, at a price of $0.22 per unit, plus 108,000 flow-through common shares at a price of $0.22 per share, for total consideration of $219,450. The share purchase warrants entitle the holder to purchase one additional share of common stock of the Company for US $0.25 per share in the first year and US $0.30 per share in the second year;



ENTOURAGE MINING LTD.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003

(Stated in Canadian Dollars)


5.     
CAPITAL STOCK (Continued)
 
 
a)     
Issued Shares (continued)
 
   
ii)     
On June 8, 2004, the Company completed a private placement for 698,000 units, comprised of one share of common stock and one common share purchase warrant, at a price of $0.404 (US$0.30) per unit, for total consideration of $282,331. The share purchase warrants entitle the holder to purchase one additional share of common stock of the Company for US$0.40 (CDN $0.54) until June 9, 2006;
 
   
iii)     
On April 12, 2004 the Company issued 100,000 common shares on the exercise of options at US $0.25 per share for proceeds of $32,983;
 
   
iv)     
On August 24, 2004 the Company issued 150,000 shares of common stock, to acquire access to a geophysical and geochemical database regarding the Yukon Property, for total consideration of $58,788;
 
   
v)     
In connection with appointment of new officers of the Company, the former president returned 3,750,000 escrowed common shares to the Company’s treasury for cancellation for no consideration. As of December 31, 2004 the Company has no shares held in escrow.
 
   
vi)     
On December 31, 2004 the Company completed a private placement for 2,815,500 units, comprised of one common share and one common share purchase warrant, at a price of $0.18 (US $0.15) per share, for total consideration of $510,876. The share purchase warrants entitle the holder to purchase an additional share of common stock of the Company for US $0.22 (CDN $0.26) if exercised on or before December 31, 2005 and US $0.25 (CDN $0.29) if exercised thereafter on or before December 31, 2006. In addition, the Company issued 132,500 common shares paid as a finder’s fee in connection with the placement.
 
   
vii)     
During the year ended December 31, 2003, the Company issued 6,000,000 common shares valued at $60,000 pursuant to the assignment agreement described at Note 4(a). At the date of issuance these shares were subject to a hold period and were not tradeable in British Columbia until April 25, 2004, except as permitted by the Securities Act (British Columbia).
 
 
b)     
Stock Options
 
   
In February 2004 the Company implemented a Stock Option Plan (“SOP”) for its officers, directors and employees to allow for up to 1,600,000 share purchase options to be granted at US $0.25 per share, for a period not to exceed five years. In November 2004 the SOP was amended to provide for the issuance of up to 2,200,000 incentive stock options to directors, officers, employees and non-investor relations consultants. (Refer to Note 10(a)).
 
   
The Company accounts for the grant of options using the fair value method prescribed in SFAS No. 123, using the Black-Scholes option pricing model. Compensation for unvested options is amortized over the vesting period. The Company granted 1,450,000 stock options at various times during the year ended December 31, 2004 (2003 – Nil). A value of $343,700 for the options was estimated using the Black-Scholes option pricing model with the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 175%, (3) risk free interest rate of 3% and, (4) expected life of 2 years. The weighted average fair value of options granted for the year ended December 31, 2004 was $0.29 (2003 - $Nil).



ENTOURAGE MINING LTD.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003

(Stated in Canadian Dollars)


5.      CAPITAL STOCK (Continued)
 
  b)      Stock Options (continued)
 
    Activity under the Plan is summarized as follows:

        Weighted  
      Options   Average Exercise  
      Outstanding   Price (US$)  
    Balance, December 31, 2002 and 2003  -   -  
    Options granted  1,450,000   0.15  
    Options exercised  (100,000 (0.25
    Balance, December 31, 2004  1,350,000   0.15  

   

The Company granted a total of 1,450,000 stock options at various times during the period February 1, 2004 to September 9, 2004. All options were issued at an exercise price of US $0.25 per share. On November 31, 2004 the exercise price of all options then outstanding (1,350,000) was reduced to US $0.15 per share and the term of the options was extended from two to five years. As a result, in accordance with SFAS 123, the Company has also recorded an additional compensation expense of $77,300, being the estimated incremental fair value of the modified terms of these options. The fair value was estimated using the Black-Scholes option pricing model with the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 175%, (3) risk free interest rate of 3% and, (4) expected life of 5 years.

The following table summarizes information concerning outstanding and exercisable common stock options under the Plan at December 31, 2004:


        Remaining  Weighted  Number of  Weighted 
    Range of    Contractual  Average  Options  Average 
    Exercise  Options  Life  Exercise  Currently  Exercise 
    Prices  Outstanding  (in years)  Price  Exercisable  Price 
    US$ 0.15  1,350,000  4.92  US$ 0.15  1,350,000  US$ 0.15 

    Refer to Note 10(a).
     
  c) Warrants

  Warrants 
  Outstanding 
Balance, December 31, 2002 and 2003   - 
Warrants granted  4,403,000 
Balance, December 31, 2004  4,403,000 



ENTOURAGE MINING LTD.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003

(Stated in Canadian Dollars)


5.      CAPITAL STOCK (Continued)
 
  c)      Warrants (continued)
 
   
The following table lists the common share warrants outstanding at December 31, 2004. Each warrant is exchangeable for one common share.

Warrants  Exercise  Expiry 
Outstanding  Price  Date 
     
889,500  $0.25 to $ 0.30  February 5, 2006
698,000  $0.54  June 9, 2006
2,815,500  $0.26 to $ 0.29  December 31, 2006
4,403,000     

6.     
RELATED PARTY TRANSACTIONS
 
 
Amounts payable to related parties as of December 31, 2004 of $196,777 (2003 - $152,240) is owing to directors and to companies controlled by the directors for consulting fees and for expenses paid on behalf of the Company.
 
 
During the year ended December 31, 2004 the Company incurred $35,000 in consulting fees to one of its officers (2003 – nil). (Refer to Note 9.)
 
 
The above transactions have been in the normal course of operations and, in management’s opinion, undertaken with the same terms and conditions as transactions with unrelated parties.
 
7.     
INCOME TAXES
 
 
The actual income tax provisions differ from the expected amounts calculated by applying the Canadian combined federal and provincial corporate income tax rates to the Company’s loss before income taxes. The components of these differences are as follows:

  2004     2003  
             
Loss before income taxes  $ (958,822 )  $ (319,515
Corporate tax rate  35.6%     37.6%  
             
Expected tax expense (recovery)  (341,341 )    (120,000
Increase (decrease) resulting from:       
             Amounts not deductible for tax  (149,876 )   -  
             Effect of change in statutory tax rate  12,000     7,000  
             Renounced exploration expenditures  8,459     -  
             Change in deferred tax asset valuation       
                   allowance and other  168,630     113,000  
             
Deferred income tax provision (recovery)  $ (2,376 )  $ -  



ENTOURAGE MINING LTD.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003

(Stated in Canadian Dollars)


7.

INCOME TAXES (Continued)

The Company’s tax-effected deferred income tax assets and liabilities are estimated as follows:


    2004     2003  
             
Mineral properties in excess of carrying value  $ 218,000   $ 129,000  
Non-capital losses available    238,000     163,000  
             
Potential deferred income tax assets    456,000     292,000  
Less: valuation allowance    (456,000 )    (292,000
             
Net Deferred Income Tax Asset  $ -   $ -  

 

As the criteria for recognizing deferred income tax assets have not been met due to the uncertainty of realization, a valuation allowance of 100% has been recorded for the current and prior year.

The Company has approximately $668,000 (2003 - $428,000) of non-capital losses which can be applied to reduce future taxable income, expiring as follows:


Year of Expiry      Amount 
       
2006    $ 55,000 
2007      115,000 
2008      67,000 
2009      59,000 
2010      59,000 
2011      73,000 
2014      240,000 
    $ 668,000 

 
The Company has certain resource related deductions and other losses of approximately $613,000 (2003 - $340,000) which may be available to be offset against future taxable income in Canada. The realization of these tax benefits in future years will be recorded as an adjustment to the corporate tax provision in the year realized.
   
8.
SUPPLEMENTAL CASH FLOW INFORMATION

        Year ended December, 2004      Year ended December, 2003 
    Cash paid during the year for:           
             Interest  $ 700    $
             Income taxes  $   $

 
During the year ended December 31, 2004, 3,750,000 escrow shares were returned to treasury and their original issuance cost of $7,500 was credited to contributed capital.
   
9.

COMMITMENTS

By agreement dated June 1, 2004, the Company has committed to pay $60,000 per year in consulting fees to an officer. Either party may cancel this agreement on 45 days notice to the other party.




ENTOURAGE MINING LTD.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003

(Stated in Canadian Dollars)


9.     
COMMITMENTS (Continued)
 
 
By agreement dated June 2, 2005 the Company has leased office space for one year for an approximate annual rental cost of $13,000.
 
10.     
SUBSEQUENT EVENTS
 
 
The following events occurred subsequent to December 31, 2004:
 
 
a)     
In January 2005 the Company filed a form S-8 to register the Company’s Stock Option Plan which provides that a total of 2,200,000 shares of common stock can be issued as incentive stock options to directors, employees and consultants of the Company.
 
 
b)     
By agreement dated March 15, 2005, the Company obtained an option to acquire a 100% interest in certain mineral properties in south-central Quebec (the “Doran Property”). The Company can earn its interest in the Doran Property by making a cash payment of $35,000 (subsequent paid) and issuing 125,000 common shares in the first year (subsequently issued) and a total of $220,000 and 750,000 shares over 4 years and expending $1,000,000 on the property over three years. The property interest is subject to a 2.5% NSR. The Company has the right to purchase up to three-fifths of the NSR, or 1.5%, for $1,750,000.
 
   
By agreement dated April 7, 2005 the Company obtained an option to acquire a 20% right in a certain prospective mineral property located in the Athabaska Basin area of Saskatchewan (the “Hatchet Lake Property”) for a cash payment of $40,000 (unpaid) and a work commitment of $100,000 per year for two years. The annual payments of $100,000 are to be made on a quarterly basis at $25,000 per quarter with the first payment due by June 30, 2005. No work has yet been completed on the Hatchet Lake Property by the Company.
 
 
c)     
By agreements dated April 21, 2005 the Company granted the right to two unrelated parties to acquire a total of a 10% interest each in the Company’s Nevada gold project. Under the terms of the option agreement the Company will receive total cash consideration of US$80,000 upon the Company executing its option to acquire the 100% interest in the property interest and the purchasers agreeing to each expend a total of US$85,000 or an amount equal to 10% of the Company’s expenditures on the property.
 
 
d)     
The Company is currently in the process of applying for a listing on the Canadian Trading & Quotation System Inc. (“CNQ”). Management anticipates a full listing on the CNQ by the end of the third quarter of 2005.


EX-4.B 2 exhibit4b.htm AGREEMENT DATED JUNE 1, 2004 BETWEEN THE COMPANY AND GOODSPRINGS DEVELOPMENT CORP. Filed by Automated Filing Services Inc. (604) 609-0244 - Entourage Mining Ltd. - Exhibit 4-B

Mining Sublease and Option to Purchase Agreement

           This Mining Sublease and Option to Purchase Agreement (“Agreement”) is made and entered into by and between Goodsprings Development Corporation, a Nevada Corporation (“Owner”), and Entourage USA Inc., a wholly owned subsidiary of Entourage Mining Ltd. (Lessee), a British Columbia corporation. Entourage Mining Ltd. hereby accepts the financial responsibility of Entourage USA Inc.’s commitments under the terms and conditions of this agreement.

Recitals

           A.       Owner leases the Black Warrior patented mining claim USMS 40 and Sunrise USMS 41, and the unpatented mining claims BW1-BW5 and BWX1-BWX4, and has located the GBW group of unpatented claims situated in T. 1 S., R. 39 E., MDB&M, Esmeralda County, Nevada, more particularly described in Exhibit A attached to and by this reference incorporated in this Agreement (collectively the “Property”).

           B.      Owner desires to sublease the Property to Lessee and to grant to Lessee the option to purchase the Property on the terms and conditions of this Agreement.

           Now, therefore, in consideration of their mutual promises, the parties agree as follows:

1.           Definitions. The following defined terms, wherever used in this Agreement, shall have the meaning described below:

               1.1 “Area of Interest” means the geographic area within two (2) mile from the exterior boundaries of the Property.

               1.2 “Closing Date” means the date on which Lessee’s purchase of the Property is closed in accordance with Section 5.

               1.3 “Effective Date” means June 1, 2004.

               1.4 “Governmental Regulations” means all directives, laws, orders, ordinances, regulations and statutes of any Federal, state or local agency, court or office.

               1.5 “Interest Rate” means twelve percent (12%) per annum compounded on an annual basis.

               1.6 “Lease Year” means each one (1) year period following the Effective Date and each anniversary of the Effective Date.

               1.7 “Lessee” means Entourage USA Inc., a wholly owned subsidiary of Entourage Mining Ltd., a British Columbia corporation, and its successors and assigns.

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               1.8 “Minerals” means all minerals and mineral materials, including gold, silver, platinum, and platinum group metals, base metals (including antimony, chromium, cobalt, copper, lead, manganese, mercury, nickel, molybdenum, titanium, tungsten, zinc), and other metals and mineral materials which are on, in or under the Property.

               1.9 "Net Smelter Returns" means the net smelter returns from the production of Minerals from the Property as calculated and determined in accordance with Exhibit 1 to Exhibit B, the conveyance to be executed and delivered in accordance with Section 5.5.

               1.10 “Option” means the Option granted by Owner to Lessee to purchase the Property.

               1.11 “Owner” means Goodsprings Development Corporation, a Nevada corporation, and its successors and assigns.

               1.12 “Property” means the Black Warrior patented mining claim USMS 40 and Sunrise USMS 41, and the unpatented mining claims BW1 - BW5, and BWX1-BWX4, and the GBW unpatented mining claims situated in T.1 S., R.39 E., MDB&M, Esmeralda County, Nevada, plus such additional unpatented mining claims which are made subject to this Agreement.

               1.13 “Purchase Price” means the purchase price for the Property described in Section .

               1.14 “Rental Payments” means the rental payments payable by Lessee in accordance with Section 4.1.

               1.15 "Royalty" means the production royalty payable by Lessee to Owner in accordance with Section 4.2.

               1.16 "Underlying Agreements" means the Lease and Option to Purchase Agreement between Owner and Apex 76 Deep Mines Co., a Nevada corporation, concerning the Black Warrior patented mining claim USMS 40 and Sunrise USMS 41, and the unpatented mining claims BW1 - BW5, and BWX1-BWX4.

2.           Lease and Grant of Rights. Owner leases the Property to Lessee and grants Lessee the rights and privileges described in this Section.

               2.1 Lease and Sublease. Owner leases the Black Warrior group of claims and owns the GBW group of claims and hereby subleases both groups of claims, subject to the Underlying Agreement, to Lessee for the purpose of exploration for Minerals, provided, however, that Lessee shall have no right to construct, develop or operate a mine on the Property without first having exercised and closed the Option. Lessee agrees and covenants to perform all of Owner's obligations under the Underlying Agreements which accrue during the term of this Agreement.

               2.2 Water Rights. Subject to the regulations of the State of Nevada concerning the appropriation and taking of water, Lessee shall have the right to appropriate and use water, to drill wells for the water on the Property and to lay and maintain all necessary water lines as may be required by Lessee in its operations on the Property. If Lessee acquires or files any applica-

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tion for appropriation or a permit, it shall cause each such application and permit to be taken jointly in the names of Owner and Lessee. On termination of this Agreement, except on Lessee’s exercise and closing of the Option, Lessee shall assign and convey to Owner all permits and water rights appurtenant to the Property which are acquired by Lessee during the term of this Agreement. If Lessee exercises and closes the Option, Owner shall assign and convey to Lessee all permits and water rights appurtenant to the Property.

3.           Term. The initial term of this Agreement shall commence on the Effective Date and shall expire ten (10) years after the Effective Date, unless this Agreement is sooner terminated, canceled or extended. Owner grants to Lessee and Lessee shall have the option and right to extend the term of this Agreement for ten (10) additional extension terms of one (1) year each on the express condition that Lessee is conducting exploration activities on the Property at the expiration of the term immediately preceding the proposed extension term and Lessee is current in its performance of all of its obligations under this Agreement, including, expressly, Lessee’s payment obligations. If Lessee elects to extend the term of this Agreement, Lessee shall notify Owner not less than thirty (30) days before expiration of the term immediately preceding the proposed extension term.

4.           Payments. Lessee shall make the following payments to Owner:

               4.1      Rental Payments. On the dates described below, Lessee shall pay to Owner the sums described below:

  Date    Payment Amount 
 
  On the parties’ execution of this Agreement  15,000.00 
  June 1, 2005 15,000.00 
  June 1, 2006 20,000.00 
  June 1, 2007 and each anniversary thereafter 25,000.00 

The Rental Payments shall be credited against the Purchase Price.

               4.2       Production Royalty. Lessee shall pay to Owner a production royalty equal to three percent (3%) of the Net Smelter Returns from the production or sale of Minerals from the Property. Lessee shall calculate and pay the Royalty in accordance with Exhibit 1 to Exhibit B attached to and by this reference incorporated into this Agreement, to be executed and delivered by Owner in accordance with section 5.5. Lessee shall pay the Royalty within one month after the last day of each month during which Lessee sells or ships any Minerals, materials or ores. Lessee shall have he option to purchase one third of the Royalty representing a one percent (1%) Net Smelter Return Royalty, for one million dollars ($1,000,000.00), in accordance with the terms of the conveyance to be executed and delivered in accordance with Section 5.5. Lessee may exercise its option to purchase such part of the Royalty at any time during the term of this Agreement or during the time prescribed in the conveyance.

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               4.3       Payment of Mining Claim Staking and Maintenance Costs. Not less than sixty (60) days before (a) the legal or regulatory deadlines for payment of the Federal annual mining claim maintenance fees, performance of annual assessment work, if required, and the filing or recording of proof of payment of such fees or of intent to hold the mining claims which comprise the Property; and (b) the payments payable by Owner pursuant to the Underlying Agreements, Lessee shall pay to Owner the sums for such maintenance, work, filing and recording fees, and underlying payments in order that Owner may timely pay and perform such obligations. Lessee also agrees to pay for the staking and recording of any new claims contiguous with the Property, or to reimburse Owner for its costs in staking and recording any new claims contiguous with the Property

               4.4      Method of Payment. All payments by Lessee to Owner shall be paid by check delivered to Owner at its address for notice purposes or by wire transfer to an account designated by Owner.

               4.5      Late Charge and Interest. If Lessee does not timely pay any Rental Payment or any other amount payable by Lessee under this Agreement within ten (10) days after the date on which such payment is due, Lessee shall pay to Owner a late charge equal to ten percent (10%) of such overdue amount. Owner’s acceptance of the late charge payment shall not constitute a waiver of Lessee’s default regarding such overdue amount, nor prevent Owner from exercising any of Owner’s other rights and remedies granted under this Agreement. If any Rental Payment or other amount payable by Lessee remains delinquent for a period in excess of thirty (30) days, Lessee shall pay to Owner, in addition to the late charge, interest from and after the due date at the Interest Rate. Lessee’s payment of such interest shall not excuse or cure any default by Lessee.

               4.6      Currency. All monetary sums referred to in this Agreement are in United States currency.

5.           Option. Owner grants to Lessee the exclusive right to purchase the Property, subject to the Royalty reserved by Owner and subject to Lessee’s obligations under the conveyance executed and delivered by Owner on the closing of the Option. The Purchase Price for the Property shall be Four Hundred Thousand Dollars ($ 400,000.00) . The Rental Payments paid by Lessee to Owner shall be credited against the Purchase Price.

               5.1      Notice of Election. If Lessee elects to exercise the Option, Lessee shall deliver written notice to Owner. On Owner’s receipt of Lessee’s notice of exercise of the Option, the parties shall make diligent efforts to close the conveyance of the Property, as applicable, within thirty (30) days after Owner’s delivery of the notice.

               5.2      Real Property Transfer Taxes. Lessee shall pay the real property transfer taxes, if any, the costs of escrow and all recording costs incurred in closing of the Option.

               5.3       Proration of Taxes. Payment of any and all state and local real property and personal property taxies levied on the property and not otherwise provided for in this Agreement shall be prorated between the parties as of the closing of any transaction on the basis of a thirty (30) day month.

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               5.4      Payment on Closing. On closing of the Option, Lessee shall pay the balance of the Purchase Price to Owner, in cash or by wire transfer to an account designated by Owner.

               5.5      Conveyance on Closing. If Lessee exercises and closes the Option, Owner shall execute and deliver to Lessee a conveyance of the Property in the form of Exhibit B. Owner and Lessee shall execute and deliver such other written assurances and instruments as are reasonably necessary for the purpose of closing the purchase of the Property. The execution, delivery and recording of the conveyance shall not constitute a merger of Lessee's obligations under this Agreement which shall survive the closing of the Option.

               5.6      Effect of Closing. On closing of the Option, Lessee shall own the Property, subject to the Royalty reserved by Owner, and Lessee's other obligations as stated in the conveyance of the Property.

6.           Compliance With the Law. Lessee shall, at Lessee’s sole cost, promptly comply with all Governmental Regulations relating to the condition, use or occupancy of the Property by Lessee, including but not limited to all exploration and development work performed by Lessee during the term of this Agreement. Lessee shall, at its sole cost, promptly comply with all applicable Governmental Regulations regarding reclamation of the Property and Lessee shall defend, indemnify and hold harmless Owner from any and all actions, assessments, claims, costs, fines, liability and penalties arising from or relating to Lessee’s failure to comply with any applicable Governmental Regulations. Owner agrees to cooperate with Lessee in Lessee’s application for governmental licenses, permits, and approvals, the costs of which shall be borne by Lessee. Promptly following the Effective Date, Lessee shall apply and diligently prosecute its application for a special use permit for mining operations on the Property.

7.           Lessee's Work Practices and Reporting.

               7.1       Work Practices. Lessee shall act as operator of the property and shall work the Property in a miner-like fashion. Lessee has a right to sub-contract work on the property providing that any sub-contractor or consultant agrees, in performing the work, to be bound by the terms of this agreement as though it were the lessee.

               7.2       Inspection of Data. During the term of this Agreement, Owner shall have the right to examine and make copies of all data regarding the Property in Lessee’s possession during reasonable business hours and upon prior notice, provided, however, that the rights of the Owner to examine such data shall be exercised in a manner that does not interfere with the operations of Lessee.

               7.3       Reports. On or before February 1 each year this Agreement is in effect, Lessee shall deliver to Owner a comprehensive report of all of Lessee's activities conducted on the Property during the previous year.

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8.           Scope of Agreement. This Agreement shall extend to and include the unpatented mining claims described in Exhibit A of this Agreement and in the exhibits which are part of this Agreement, and all other interests, mining claims and property rights made part of and subject to this Agreement in accordance with this Section. All unpatented mining claims located by Owner or Lessee which are partially or wholly in the Area of Interest shall be located in Owner’s name and shall be part of and subject to this Agreement. On location by a party of any mining claims in the Area of Interest, the locating party shall promptly notify the other party. The parties shall execute and deliver an amendment of this Agreement, in recordable form, which provides that the newly located unpatented mining claims are part of the Property and are subject to this Agreement. The amendment made be recorded by either party.

9.           Liens and Notices of Non-Responsibility. Lessee agrees to keep the Property at all times free and clear of all liens, charges and encumbrances of any and every nature and description done made or caused by Lessee, and to pay, and defend, indemnify and hold harmless Owner from and against, all indebtedness and liabilities incurred by or for Lessee which may or might become a lien, charge or encumbrance; except that Lessee need not discharge or release any such lien, charge or encumbrance so long as Lessee disputes or contests the lien, charge or encumbrance and posts a bond sufficient to discharge lien acceptable to Owner. Subject to Lessee’s right to post a bond in accordance with the foregoing, if Lessee does not within thirty (30) days following the imposition of any such lien, charge or encumbrance, cause the same to be released of record, Owner shall have, in addition to Owner’s contractual and legal remedies, the right, but not obligation to cause the lien to be released by such manner as Owner deems proper, including payment of the claim giving rise to such lien, charge or encumbrance. All sums paid by Owner for and all expenses incurred by it in connection with such purpose, including court costs and attorney fees, shall be paid by Lessee to Owner on demand with interest at the Interest Rate. Notwithstanding the provisions of this Section, Lessee shall have the right to grant a lien and security interest in the Property for the purpose of obtaining financing for the development of a mine on the Property.

10.           Taxes.

               10.1       Real Property Taxes. Owner shall pay any and all taxes assessed and due against the Property before the execution of this Agreement. Lessee shall pay promptly before delinquency all taxes and assessments, general, special, ordinary and extraordinary, that may be levied or assessed during the term of this Agreement upon the Property. All such taxes for the year in which this Agreement is executed and for the year in which this Agreement terminates shall be prorated between the Owner and Lessee, except that neither the Owner nor Lessee shall be responsible for the payment of any taxes which are based upon income, net proceeds, production or revenues from the Property assessed solely to the other party.

               10.2       Personal Property Taxes. Each party shall promptly when due pay all taxes assessed against such party’s personal property, improvements or structures placed or used on the Property.

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               10.3       Income Taxes. Owner shall not be liable for any taxes levied on or measured by income or net proceeds, or other taxes applicable to Lessee, based upon payments under this Agreement or under the conveyance executed and delivered by Owner on the Closing of the Option.

               10.4       Delivery of Tax Notices. If Owner receives tax bills or claims which are Lessee’s responsibility, Owner shall promptly forward them to Lessee for payment.

11.           Insurance and Indemnity.

               11.1       Lessee’s Liability Insurance. Lessee shall, at Lessee’s sole cost, keep in force during this Agreement term a policy of commercial general liability insurance covering property damage and liability for personal injury occurring on or about the Property, with coverage in amounts considered reasonable under Nevada mineral exploration practices and standards, and with contractual liability endorsement insuring Lessee’s performance of Lessee’s indemnity obligations of this Agreement.

               11.2       Form and Certificates. The policy of insurance required to be carried by Lessee pursuant to this Section shall be with a company approved by Owner and shall have a Best’s Insurance Rating of at least A-VII. Such policy shall name Owner as an additional insured and contain a cross-liability and sever ability endorsement. Lessee’s insurance policy shall also be primary insurance without right of contribution from any policy carried by Owner. A certificate of insurance and a copy of Lessee’s insurance policy shall be provided to Owner before any entry by Lessee or its agents or employees on the Property and shall provide that such policy is not subject to cancellation, expiration or change, except upon thirty (30) days prior written notice to Owner. The Owner shall not unreasonably refuse to approve an insurance Company or policy secured by the lessee.

               11.3       Waiver of Subrogation. Lessee and Owner each waives any and all rights of recovery against the other, and against the partners, members, officers, employees, agents and representatives of the other, for loss of or damage to the Property or injury to person to the extent such damage or injury is covered by proceeds received under any insurance policy carried by Owner or Lessee and in force at the time of such loss or damage.

               11.4       Waiver and Indemnification. Owner shall not be liable to Lessee and Lessee waives all claims against Owner for any injury to or death of any person or damage to or destruction of any personal property or equipment or theft of property occurring on or about the Property or arising from or relating to Lessee’s business conducted on the Property. Lessee shall defend, indemnify and hold harmless Owner and its members, officers, directors, agents and employees from and against any and all claims, judgments, damage, demands, losses, expenses, costs or liability arising in connection with injury to person or property from any activity, work, or things done, permitted or suffered by Lessee or Lessee’s agents, partners, servants, employees, invitees or contractors on or about the Property, or from any breach or default by Lessee in the performance of any obligation on the part of Lessee to be performed under the terms of this Agreement (all of the foregoing collectively referred to hereinafter as General Indemnity Claims). Lessee agrees to defend all General Indemnity Claims on behalf of Owner, with counsel reasonably acceptable to Owner. The obligations of Lessee contained in this Section shall survive the expiration of the term or sooner termination of this Agreement.

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12.           Environmental.

               12.1       Definitions. Hazardous Materials means any material, waste, chemical, mixture or byproduct which: (a) is or is subsequently defined, listed or designated under Applicable Environmental Laws (defined below) as a pollutant, or as a contaminant, or as toxic or hazardous; or (b) is harmful to or threatens to harm public health, safety, ecology, or the environment and which is or hereafter becomes subject to regulation by any Federal, state or local governmental authority or agency. Applicable Environmental Laws means any applicable Federal, state, or local governmental law (including common law), statute, rule, regulation, ordinance, permit, license, requirement, agreement or approval, or any applicable determination, judgment, injunction, directive, prohibition or order of any governmental authority with jurisdiction at any level of Federal, state, or local government, relating to pollution or protection of the environment, ecology, natural resources, or public health or safety.

               12.2       Lessee Hazardous Material Activities. Lessee shall limit any use, generation, storage, treatment, transportation, and handling of Hazardous Materials in connection with Lessee’s use of the Property (collectively “Lessee Hazardous Materials Activities”) to those Hazardous Materials, and to quantities of them, that are necessary to perform activities permitted under this Agreement. Lessee Hazardous Materials Activities include, without limitation, all such activities on or about the Property by Lessee’s employees, partners, agents, invitees, contractors and their subcontractors. Lessee shall not cause or permit any Hazardous Materials to be disposed or abandoned at the Property. Lessee shall cause all Lessee Hazardous Materials Activities to be performed in strict conformance to Applicable Environmental Laws. Lessee shall promptly notify Owner of any actual or claimed violation of Applicable Environmental Laws in connection with Lessee Hazardous Materials Activities, and Lessee shall promptly and thoroughly cure any violation of Applicable Environmental Laws in connection with Lessee Hazardous Materials Activities. If any governmental approval, consent, license or permit is required under Applicable Environmental Laws for Lessee to perform any portion of its work at the Property, including without limitation any air emission permits, before commencing any such work, Lessee shall be solely responsible, at Lessee expense, for obtaining and maintaining, and providing copies of, each approval, consent, license or permit. All Lessee Hazardous Materials Activities shall be performed by qualified personnel who have received proper training with respect to Hazardous Materials, including compliance with applicable OSHA laws and regulations. Lessee shall cause all Hazardous Materials present at the Property in connection with Lessee Hazardous Materials Activities to be safely and securely stored, using double containment. Lessee agrees that neither its use of the Property nor Lessee Hazardous Materials Activities shall result in contamination of the environment.

               12.3       Spills of Hazardous Materials. Lessee shall promptly notify Owner and each governmental regulatory entity with jurisdiction of any spills, releases, or leaks of Hazardous Materials that occur in connection with Lessee Hazardous Materials Activities or Lessee’s use of

8


the Property, including but not limited to any contamination of the environment (collectively “Lessee Contamination”). Lessee further shall promptly notify Owner of any claims of which Lessee becomes aware regarding any actual or alleged Lessee Contamination. Lessee shall be solely responsible at its expense for promptly, diligently and thoroughly investigating, monitoring, reporting on, responding to, and cleaning up to completion any and all such Lessee Contamination, in full conformance to Applicable Environmental Laws (collectively the “Lessee Environmental Response Work”). All Lessee Environmental Response Work shall be reported to each governmental regulatory entity with jurisdiction on an ongoing basis, and Lessee shall diligently attempt to attain written concurrence each such regulatory entity that all Lessee Environmental Response Work has been satisfactorily performed and completed. Lessee at its expense shall keep Owner timely informed of Lessee’s progress in responding to any Lessee Contamination, including but not limited to providing Owner with copies, at Lessee’s expense, of all reports, work plans, and communications with governmental entities.

               12.4       Removal of Stored Hazardous Materials. Before the expiration or termination of this Agreement, and not withstanding any other provision of this Agreement, and in full conformance to Applicable Environmental Laws, Lessee shall: (a) cause to be properly removed from the Property all Hazardous Materials stored at the Property in connection with Lessee’s use of the Property or in connection with Lessee Hazardous Materials Activities; and (b) cause to be properly dismantled, closed and removed from the Property all devices, drums, equipment and containments used for handling, storing or treating Hazardous Materials Activities. As part of the closure and removal activities described in the preceding sentence, Lessee shall cause to be performed representative environmental sampling of areas of the Property where such handling, storing or treating of Hazardous Materials occurred, to confirm that no contamination of the environment has resulted from any Lessee Hazardous Materials Activities. Such sampling shall be performed by a qualified environmental consultant acceptable to Owner, and such consultant shall promptly issue a written report which describes the consultant’s data, findings and conclusions, a copy of which shall be provided to Owner at Lessee’s expense. If any Lessee Contamination is discovered, Lessee shall immediately initiate Lessee Environmental Response Work as prescribed in this Agreement.

               12.5       Environmental Indemnity. Lessee shall promptly reimburse, defend, indemnify (with legal counsel acceptable to Owner, whose consent shall not unreasonably be withheld) and hold harmless Owner, its employees, assigns, successors-in-interest, agents and representatives from any and all claims, liabilities, obligations, losses, causes of action, demands, governmental proceedings or directives, fines, penalties, expenses, costs, (including but not limited to reasonable attorney's fees, consultant's fees, and other expert's fees and costs), and damages which arise from or relate to: (a) Lessee Hazardous Materials Activities; (b) Lessee Contamination; ( c ) any non- compliance with Applicable Environmental Laws resulting directly from the Lessee’s use of the Property or (d) a breech of any obligation of Lessee under this Section. The Lessee shall not be responsible for hazardous material activities, breach of applicable environmental law or contamination incurred primarily by another party or incurred primarily before or after the terms of this agreement.

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               12.6       Survival. The provisions of this Section shall survive expiration or termination of this Agreement .

13.           Work Obligations and Conversion of Claims.

               13.1       Work Obligations.

                         13.1.1 Annual Assessment Work. To the extent required by law, beginning with the annual assessment work period of September 1, 2004, to September 1, 2005, and for each following annual assessment work year commencing during the term of this Agreement, Lessee shall perform for the benefit of the Property work of a type customarily deemed applicable as assessment work and of sufficient value to satisfy the annual assessment work requirements of all applicable Federal, state and local laws, regulations and ordinances, if any, and shall prepare evidence of the same in form proper for recordation and filing, and shall timely record and/or file such evidence in the appropriate Federal, state and local office as required by applicable Federal, state and local laws, regulations and ordinances. If Lessee elects to terminate this Agreement more than two (2) months before the deadline for performance of annual assessment work for the following annual assessment year, Lessee shall have no obligation to perform annual assessment work nor to prepare, record and/or file evidence of the same for the following annual assessment year. Lessee’s obligation, if any, to perform the annual assessment work for the assessment work period September 1, 2004 to September 1, 2005, is an unconditional obligation of Lessee which shall survive termination of this Agreement.

                         13.1.2 Federal Mining Claim Maintenance Fees. If under applicable Federal laws and regulations Federal annual mining claim maintenance fees are required to be paid for the unpatented mining claims which constitute all or part of the Property, beginning with the annual assessment work period of September 1, 2004, to September 1, 2005, Lessee shall timely and properly pay the Federal annual mining claim maintenance fees and shall execute and record or file, as applicable proof of payment of the Federal annual mining claim maintenance fees and of Owner’s intention to hold the unpatented mining claims which constitute the Property. If Lessee elects to terminate this Agreement more than two (2) months before the deadline for payment of the Federal annual mining claim maintenance fees for the following annual assessment year, Lessee shall have no obligation to pay the Federal annual mining claim maintenance fees for the Property for the following assessment year. Lessee’s obligation for payment of Federal annual mining claim maintenance fees and recording of the proof of payment and notice of intent to hold the claims for the assessment work period September 1, 2004, to September 1, 2005, is an unconditional obligation of Lessee which shall survive termination of this Agreement.

               13.2       Amendment of Mining Laws. The parties acknowledge that legislation for the amendment or repeal of the mining laws of the United States applicable to the Property has been, and in the future may be, considered by the United States Congress. The parties desire to insure that any and all interests of the parties in the lands subject to the unpatented mining claims which comprise all or part of the Property, including any rights or interests acquired in such lands under the mining laws as amended, repealed or superseded, shall be part of the Property and shall be

10


subject to the Agreement. If the mining laws applicable to the unpatented mining claims subject to this Agreement are amended, repealed or superseded, the conversion or termination of Owner’s interest in the Property pursuant to such amendment, repeal or supersession of the mining laws shall not be considered a deficiency or defect in Owner’s title in the Property, and Lessee shall have no right or claim against Owner resulting from the conversion, diminution, or loss of Owner’s interest in and to the Property, except as expressly provided in this Agreement.

If pursuant to any amendment or supersession of the mining laws Owner is granted the right to convert its interests in the unpatented mining claims compromising the Property to a permit, license, lease, or other right or interest, all converted interests or rights shall be deemed to be part of the Property subject to this Agreement. Upon the grant or issuance of such converted interests or rights, the parties shall execute and deliver an addendum to this Agreement, in recordable form, by which such converted interests or rights are made subject to this Agreement.

14.           Relationship of the Parties.

               14.1       No Partnership. This Agreement shall not be deemed to constitute any party in its capacity as such, the partner, agent, or legal representative of any other party, or to create any joint venture, partnership, mining partnership between the parties.

               14.2       Competition. Except as expressly provided in this Agreement, each party shall have the free and unrestricted right independently to engage in and receive the full benefits of any and all business endeavors of any sort outside the Property or outside the scope of this Agreement, whether or not competitive with the endeavors contemplated under this Agreement, without consultation with or participation of the other party. In particular, without limiting the foregoing, neither party to this Agreement shall have any obligation to the other as to any opportunity to acquire any interest, property or right to it outside the scope of this Agreement.

15.           Inspection. Owner or Owner's duty authorized representatives shall be permitted to enter on the Property and Lessee's workings at all reasonable times for the purpose of inspection, but they shall enter on the Property at their own risk and in such a manner which does not unreasonably hinder, delay or interfere with Lessee's operations.

16.           Title. Owner represents that: (a) the unpatented mining claims which are part of the Property were properly located in accordance with applicable Federal and state laws and regulations; (b) the unpatented mining claims which are part of the Property are in good standing; (c) subject to the paramount title of the United States, Owner has the good right and full power to lease and to convey the unpatented mining claims which are part of the Property and the fee lands which are part of the Property described in this Agreement; and (d) the Property is free and clear of all liens, claims, and encumbrances and Owner has good and marketable title to the Property. Owner disclaims any representation or warranty concerning the existence or proof of a discovery of locatable minerals on or under the Property. Owner's representations and warranties concerning title shall survive termination of this Agreement and the conveyance from Owner to Lessee on exercise and closing of the Option.

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17.           Covenants, Warranties and Representations. Each of the parties covenants, warrants and represents for itself as follows:

               17.1       Compliance with Laws. That is has complied with all applicable laws and regulations of any governmental body, Federal, state or local, regarding the terms of and performance of its obligations under this Agreement.

               17.2       No Pending Proceedings. That there are no lawsuits or proceedings pending or threatened which affect its liability to perform the terms of this Agreement.

               17.3       Costs. That it shall pay all costs and expenses incurred or to be incurred by it in negotiating and preparing this Agreement and in closing and carrying out the transactions contemplated by this Agreement.

               17.4       Brokers. That it has had no dealings with any agent, broker, or finder in connection with this Agreement, and shall indemnify, defend and hold the other party harmless from and against any claims that may be asserted through such party that any agent's, broker's or finder's fee is due in connection with this Agreement.

18.           Termination by Owner. Any failure by Lessee to perform any of its covenants, liabilities, obligations or responsibilities under this Agreement shall be default. Owner may give Lessee written notice of a default. If default is not remedied within thirty (30) days after receipt of the notice, provided the default can reasonably be cured within that time, or, if not, if Lessee has not within that time commenced action to cure the same or does not after such commencement diligently prosecute such action to completion, Owner may terminate this Agreement by delivering notice to Lessee of Owner’s termination of this Agreement. In case of Lessee’s failure to pay the Rental Payments, Owner shall be entitled to give Lessee written notice of the default, and if such default is not remedied within fifteen (15) days after receipt of the notice, then Owner may terminate this Agreement by delivering notice to Lessee of Owner’s termination of this Agreement. On termination of this Agreement based on Lessee’s default, within ten (10) days Lessee shall execute to Owner a release of this Agreement in form acceptable for recording.

19.           Termination by Lessee. Lessee may terminate this Agreement at any time by giving written thirty (30) days advance notice to Owner. If Lessee terminates this Agreement, Lessee shall perform all obligations and pay all payments which accrue or become due before the termination date. On Lessee’s termination of this Agreement, within ten (10) days Lessee shall execute and deliver to Owner a release and termination of this Agreement in form acceptable for recording.

20.           Surrender of Property. Unless the property is purchased pursuant to the terms of this agreement, on expiration or termination of this Agreement, Lessee shall surrender the Property promptly to Owner and at Lessee’s sole cost shall remove from the Property all of Lessee’s equipment, buildings, and structures. Lessee shall reclaim the Property in accordance with all applicable Governmental Regulations. Lessee shall diligently perform reclamation and restoration of the Property such that Lessee’s reclamation and restoration shall be completed before expiration or termination of this Agreement and not later than the date required under any Governmental Regulations.

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21.           Data. Within thirty (30) days following termination of this Agreement, Lessee shall deliver to Owner copies of all data regarding the Property in Lessee’s possession at the time of termination which before termination have not been furnished to Owner and, at Owner’s request, Lessee shall deliver to Owner all drilling core samples and sample splits taken from the Property.

22.           Confidentiality. The data and information, including the terms of this Agreement, coming into Lessee’s possession by virtue of this Agreement shall be deemed confidential and shall not be disclosed to outside third parties except as may be required to publicly record or protect title to the Property or to publicly announce and disclose information under Governmental Regulations or under the rules and regulations of any stock exchange on which the stock of any party, or the parent or affiliates of any party, is listed. Lessee agrees to inform Owner of the content of the announcement or disclosure in sufficient time to permit Owner to jointly or simultaneously make a similar public announcement or disclosure. If a party negotiates for a transfer of all or any of its interest in the Property or under this Agreement or negotiates to procure financing or loans relating to the Property, in order to facilitate any such negotiations such party shall have the right to furnish information to third parties, provided that each third party to whom the information is disclosed agrees to maintain its confidentiality in the manner provided in this Section.

23.           Assignment.

               23.1       Lessee’s Assignment. Lessee shall not assign, convey, encumber, sublease, grant any concession, or license or otherwise transfer (each a "Transfer") all or any part of its interest in this Agreement or the Property, without, in each case, Owner's prior written consent, which shall not be withheld unreasonably, subject to the terms of the Underlying Agreements. Any Transfer of this Agreement which is prohibited under this Section shall be deemed void and shall constitute a material default under the terms of this Agreement. Owner's consent to an assignment shall not waive the terms of this Section in respect of any subsequently proposed assignment, nor shall it release Lessee of its obligations under this Agreement.

               23.2       Owner’s Assignment. Owner shall have the right to assign, convey, encumber, sublease, grant any concession, or license or otherwise transfer all or any part of its interest in this Agreement or the Property. No change in ownership of Owner’s interest in the Property shall affect Lessee’s obligations under this Agreement unless and until Owner delivers and Lessee receives copies of the documents which demonstrate the change in ownership of Owner’s interest. Until Lessee receives Owner’s notice and the documents required to be delivered under this Section, Lessee may continue to make all payments under this Agreement as if the transfer of Owner’s ownership interest had not occurred. No division of Owner’s ownership as to all or any part of the Property shall enlarge Lessee’s obligation or diminish Lessee’s rights under this Agreement.

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24           Memorandum Agreement. The parties shall execute and deliver a memorandum of this Agreement. The execution of the memorandum shall not limit, increase or in any manner affect any of the terms of this Agreement or any rights, interests or obligations of the parties.

25.           Notices. Any notices required or authorized to be given by this Agreement shall be in writing and shall be sent either by commercial courier, facsimile, or by certified U.S. mail, postage prepaid and return receipt requested, addressed to the proper party at the address stated below or such address as the party shall have designated to the other parties in accordance with this Section. Such notice shall be effective on the date of receipt by the addressee party, except that any facsimiles received after 5:00 p.m. of the addressee’s local time shall be deemed delivered the next day.

  If to Owner:  Goodsprings Development Corp 
    C/O Ken Brook 
    2305 Pleasure Dr. 
    Reno, Nevada 89509
 
 
 
  If to Lessee:  Entourage USA Inc., a wholly owned subsidiary of 
    Entourage Mining Ltd.
    C/O Greg Kennedy 
    212 525 Seymour St.
    Vancouver, B.C. V6B3H7 
    Canada 

26.           Binding Effect of Obligations. This Agreement shall be binding upon and inure to the benefit of the respective parties and their successors or assigns.

27.           Entire Agreement. The parties agree that the entire agreement between them is written in this Agreement and in a memorandum of agreement of even date. There are no terms or conditions, express or implied, other than expressly stated in this Agreement. This Agreement may be amended or modified only by a written instrument signed by the parties with the same formality as this Agreement. The Owner agrees to register this agreement and the original agreement between itself and Apex 76 Deep Mines Co. forthwith and provide the Lessee copies of such registration.

28.           Governing Law and Forum Selection. This Agreement shall be construed and enforced in accordance with the laws of the State of Nevada. Any action or proceeding concerning the construction, or interpretation of the terms of this Agreement or any claim or dispute between the parties shall be commenced and heard in the Second Judicial District Court of the State of Nevada, in and for the county of Washoe, Reno, Nevada.

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29.           Multiple Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which shall constitute the same Agreement.

30.           Severability. If any part, term or provision of this Agreement is held by a court of competent jurisdiction to be illegal or in conflict with any Governmental Regulations, the validity of the remaining portions or provisions shall not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term, or provision held to be invalid.

31.           Time of Essence. Time is of the essence in the performance of the parties’ obligations under this Agreement.

The parties have executed this Agreement effective as of the Effective Date.

  GOODSPRINGS DEVELOPMENT CORP. 
 
 
   
   
  By       “DK Brook Jr.”   
       D.K. Brook Jr. , President 
 
 
  ENTOURAGE USA INC., A WHOLLY OWNED 
SUBSIDIARY OF ENTOURAGE MINING LTD. 
 
 
  By        “Gregory F. Kennedy”   
        President 
 
 
STATE OF   
  ss.   
COUNTY OF  

            This mining Lease and Option to Purchase Agreement was acknowledged before me on June 16, 2004, by Gregory F. Kennedy as President of Entourage USA Inc., a wholly owned subsidiary of Entourage Mining Ltd.

  Christopher D. Farber 

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  Notary Public 
  City of Vancouver 
  Province of British Columbia 
  NOTARIAL SEAL 
 
STATE OF NEVADA,   
  ss.   
COUNTY OF WASHOE   
 
            This Mining Lease and Option to Purchase Agreement was acknowledged before me on 6-22-04, 2005, by Doyle Kenneth Brook, Jr., as President of Goodsprings Development Corporation.
 
       “David Gifford” 
  Notary Public 
  NOTARIAL SEAL 

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Exhibit A
Description of Property

A.  Patented Mining Claims     
   
  Black Warrior patented claim USMS 40 and Sunrise USMS 41 in Section 3.1, T. 1 S., R. 39 E., MDB&M, Esmeralda County, Nevada.
     
  APN 000-006-14     
 
B.  Unpatented Mining Claims:   
       
  Claim Name:  BLM NMC Nos.  Esmeralda County 
      Book / Page 
  BW1 to BW5  773255-58, 789771   
  BWX1 to BWX4  801552-555   

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EXHIBIT B

Recorded at the request of and when recorded return to:

Entourage Mining Ltd
212 525 Seymour St.
Vancouver, B.C. V6B3H7
Canada

Quitclaim Deed With Reservation of Royalty

           This Quitclaim Deed With Reservation of Royalty ("Deed") is made by and between Goodsprings Development Corporation, a Nevada corporation ("GDC"), as Grantor, and Entourage USA Inc., a wholly owned subsidiary of Entourage Mining Ltd. a corporation organized under the laws of the Province of British Columbia ("Grantee").

Recitals

A.       Grantor and Grantee are parties to the Mining Sublease and Option to Purchase Agreement dated effective June 1, 2004 (the "Agreement"), concerning the patented and unpatented lode mining claims situated in Esmeralda County, Nevada, more particularly described in Exhibit 1 attached to and by this reference incorporated in this Deed (collectively the "Royalty Property"), in accordance with which Grantor agreed to sell to Grantee all of Grantor's right, title and interest in and to the Royalty Property, subject to Grantor's reservation to Grantor of the production royalty (the "Royalty") described in this Deed.

B.       Grantor and Grantee have closed the purchase and sale of the Royalty Property in accordance with the Agreement.

            In consideration of the parties' rights and obligations under the Agreement, the parties agree as follows:

           1. Quitclaim. Grantor quitclaims to Grantee, and its assigns and successors forever, all of Grantor's right, title and interest in the Royalty Property, except and subject to Grantor's reserved Royalty and the parties' rights and obligations under this Deed.

            2. Royalty. Grantor grants, reserves and retains to itself, and Grantor's assigns and successors forever, and Grantee agrees and covenants to pay to Grantor, and Grantor's assigns

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and successors, a production royalty equal to three percent (3%) of the Net Smelter Returns; as calculated and determined in accordance with Exhibit 2 attached to and by this reference incorporated in this Deed. Grantee shall have the option to purchase one third of the Royalty representing one percent (1%) of the Net Smelter Returns for one million dollars ($1,000,000.00) . Grantee may exercise the option to purchase the Royalty within ninety (90) days following the commencement of production of minerals from the Property. If Grantee elects to exercise its option to purchase a part of the Royalty, it shall deliver written notice to Grantor. The parties shall close Grantee's exercise of its option to purchase the Royalty within thirty (30) days following Grantee' s delivery of its notice at which time Grantee shall pay the purchase price for the part of the Royalty purchased and Grantor shall execute and deliver an assignment of the part of the Royalty which Grantee purchases. If Grantee does not timely and properly exercise its option to purchase part of the Royalty, Grantee shall be deemed to have irrevocably released and waived its option to purchase part of the Royalty.

               2.1 Burden on Royalty Property. The Royalty shall burden and run with the Royalty Property, including any amendments, conversions to a lease or other form of tenure, relocations or patent of all or any of the unpatented mining claims which comprise all or part of the Royalty Property. On amendment, conversion to a lease or other form of tenure, relocation or patenting of any of the unpatented mining claims which comprise all or part of the Royalty Property, Grantee agrees and covenants to execute, deliver and record in the office of the recorder in which all or any part of the Royalty Property is situated an instrument by which Grantee grants to Grantor the Royalty and subjects the amended, converted or relocated unpatented mining claims and the patented claims, as applicable, to all of the burdens, conditions, obligations and terms of this Deed.

               2.2 Payment of Royalty. Grantee shall calculate and pay the Royalty monthly in accordance with the provisions of Exhibit 2.

               If Grantee does not timely pay the Royalty, Grantor may give written notice to Grantee that Grantee is in default of its obligations under this Deed, and unless within five (5) business days following receipt by Grantee of such notice Grantor receives the delinquent Royalty payment, then Grantee shall pay interest on the delinquent payment at the rate often percent (10%) per annum which shall accrue from the day the delinquent Royalty payment was due to the date of payment of the Royalty and accrued interest. Grantee shall pay all of Grantor's attorney's fees and all other costs incurred by Grantor to collect the delinquent Royalty payment.

               2.3 Production Records. Grantee shall keep true and accurate accounts, books and records of all of its activities, operations and production of minerals on the Royalty Property.

3.           Commingling. Grantee shall have the right to commingle minerals from the Royalty Property with minerals mined from other properties. Not less than sixty (60) days before commencement of commingling, Grantee shall notify Grantor and shall deliver to Grantor Grantee's proposed commingling plan for Grantor's review. Before Grantee commingles any minerals produced from the Royalty Property with minerals from other properties, the minerals produced from the Royalty Property and other properties shall be measured and sampled in

19


accordance with sound mining and metallurgical practices for metal, commercial minerals and other appropriate content. Grantee shall keep detailed accounts and records which show measures, assays of metal, commercial minerals, and other appropriate content and penalty substances, and gross metal content of the minerals. From this information, Grantee shall determine the amount of the Royalty due and payable to Grantor for minerals produced from the Royalty Property commingled with minerals from other properties.

4.           Reports. Not later than February I and August 1 of each year, Grantee shall deliver to Grantor a comprehensive report of all exploration, development and mining activities and operations conducted by Grantee on or relating to the Property during the preceding six (6) months. Such semiannual report shall include estimates of proposed expenditures upon, anticipated production from, and estimated remaining ore reserves on the Royalty Property for the succeeding year. Grantee shall provide Grantor reasonable access to all data and information generated regarding the Royalty Property.

5.           Inspections. Grantor, or its authorized agents or representatives, may enter upon all surface and subsurface portions of the Royalty Property for the purpose of inspecting the Royalty Property and all improvements and operations on the Royalty Property, as well as inspecting and copying all accounts and records, including without limitation such accounts and records which are maintained electronically, pertaining to all activities and operations on or relating to the Royalty Property, the improvements or operations.

6.           Compliance with Laws, Reclamation, Environmental Obligations and Indemnities.

               6.1 Compliance with Laws. Grantee shall at all times comply with all applicable federal, state and local laws, regulations and ordinances relating to Grantee's activities and operations on or relating to the Royalty Property.

               6.2 Reclamation, Environmental Obligations and Indemnities. Grantee shall perform all reclamation required under federal, state and local laws, regulations and ordinances relating to Grantee's activities or operations on or relating to the Royalty Property. Grantee shall defend, indemnify and hold harmless Grantor from and against any and all actions, claims, costs, damages, expenses (including attorney's fees and legal costs), liabilities and responsibilities arising from or relating to Grantee's activities or operations on or relating to the Royalty Property, including those under laws, regulations and ordinances intended to protect or preserve the environment or to reclaim the Royalty Property. Grantee' s obligations under this Section shall survive the abandonment, surrender or transfer of the Royalty Property.

7.           Tailings and Residues. All tailings, residues, waste rock, spoiled leach materials and other materials (collectively "Materials") resulting from Grantee's operations and activities on the Royalty Property shall be Grantee's sole property, but shall remain subject to the Royalty if they are processed or reprocessed and Grantee receives revenues from such processing or reprocessing. If Materials are processed or reprocessed, the Royalty payable shall be determined by using the best engineering, metallurgical and technical practices and standards then available.

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8.           Title Maintenance.

               8.1 Title Maintenance and Taxes. Grantee shall maintain title to the Royalty Property, including without limitation, paying when due all taxes on or with respect to the Royalty Property and doing all things and making all payments necessary or appropriate to maintain the right, title and interest of Grantee and Grantor, respectively, in the Royalty Property and under this Deed.

               8.2 Assessment Work. Grantee shall perform all required assessment work on, pay all mining claim maintenance fees and make such filings and recordings as are necessary to maintain title to the Royalty Property in accordance with applicable federal and state laws and regulations.

               8.3 Abandonment. If Grantee intends to abandon or surrender any of the Royalty Property (the "Abandonment Property"), Grantee shall first give notice of such intention to Grantor at least ninety (90) days in advance of the proposed date of abandonment or surrender. At any time before the date of Grantee's proposed abandonment or surrender of the Royalty Property Grantor may deliver notice to Grantee that Grantor desires Grantee to convey the Abandonment Property to Grantor. In such case, Grantee shall convey the Abandonment Property to Grantor free and clear of any claims, encumbrances or liens created by, through or under Grantee. If Grantor does not timely request reconveyance of the Abandonment Property, Grantor's right to do so shall be irrevocably terminated.

9.           General Provisions.

               9.1 Conflict. If a conflict arises between the provisions of this Deed and the provisions of the Agreement, the provisions of the Agreement shall prevail.

               9.2 Entire Agreement. This Deed and the Agreement constitute the entire agreement between the parties.

               9.3 Additional Documents. The parties shall from time to time execute all such further instruments and documents and do all such further actions as may be necessary to effectuate the purposes of this Deed.

               9.4 Binding Effect. All of the covenants, conditions, and terms of this Deed shall bind and inure to the benefit of the parties and their successors and assigns.

               9.5 No Partnership. Nothing in this Deed shall be construed to create, expressly or by implication, a joint venture, mining partnership or other partnership relationship between the parties.

               9.6 Governing Law. This Deed is to be governed by and construed under the laws of the State of Nevada.

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               9.7 Time of Essence. Time is of the essence in this Deed.

               9.8 Notices. Any notices required or authorized to be given by this Deed shall be in writing and shall be sent either by commercial courier, facsimile, or by certified U.S. mail, postage prepaid and return receipt requested, addressed to the proper party at the address stated below or such address as the party shall have designated to the other parties in accordance with this Section. Such notice shall be effective on the date of receipt by the addressee party, except that any facsimiles received after 5:00 p.m. of the addressee's local time shall be deemed delivered the next day.

If to Grantor:  
 
  Goodsprings Development Corporation 
  C/O D. K. Brook Jr. 
  2305 Pleasure Dr. 
  Reno, Nevada 89509 
 
 
If to Grantee:  
 
  Entourage USA Inc., a wholly owned subsidiary of Entourage Mining Ltd. 
  212 525 Seymour St 
  Vancouver, B.C. V6B3H7 
  Canada 

This Deed is effective _______________________________________ , regardless of the date on which the parties execute this Deed.

Goodsprings Development Corporation

By  
     D. Kenneth Brook Jr., President
 
Entourage USA Inc., a wholly owned subsidiary of Entourage Mining Ltd. 
 
   
By        “Gregory F. Kennedy”   
Title: President, Gregory F. Kennedy 

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STATE OF NEVADA )
  ss.
COUNTY OF WASHOE )

This Quitclaim Deed With Reservation of Royalty was acknowledged before me on _________________________________ , by D. K. Brook Jr. as President of Goodsprings Development Corporation.

   
  Notary Public  

STATE OF )
  ss.
COUNTY OF )

This Quitclaim Deed With Reservation of Royalty was acknowledged before me on June 16, 2004, by Gregory F. Kennedy as President of Entourage USA Inc., a wholly owned subsidiary of Entourage Mining Ltd.

  “Christopher D. Farber” 
    Notary Public 
    City of Vancouver 
    Province Of British Columbia 
    NOTARIAL SEAL

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Exhibit 1
Description of Property

B.  Patented Mining Claims   
   
  Black Warrior patented claim USMS 40 and Sunrise USMS 41 in Section 3.1, T. 1 S., R. 39 E., MDB&M, Esmeralda County, Nevada. 
   
  APN 000-006-14   
 
B.  Unpatented Mining Claims:   
     
  Claim Name:  BLM Serial # 
 
  BW1 to BW5  773255 -58, 789771 
  BWX1 to BWX4  801552 - 555 

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Exhibit 2
Net Smelter Returns

Payor:  Entourage USA Inc., a wholly owned subsidiary of Entourage Mining Ltd. 
   
Recipient:  Goodsprings Development Corporation 

1.           Definitions. The terms defined in the instrument to which this Exhibit is attached and made part of shall have the same meanings in this Exhibit. The following definitions shall apply to this Exhibit.

               1.1 "Gold Production" means the quantity of refined gold outturned to Payor's account by an independent third party refinery for gold produced from the Property during the month on either a provisional or final settlement basis.

               1.2 "Gross Value" shall be determined on a month basis and have the following meanings with respect to the following Minerals:

                         1.2.1 Gold

                         (a) If Payor sells gold concentrates, dore or ore, then Gross Value shall be the value of the gold contained in the gold concentrates, dore and ore determined by utilizing: (1) the mine weights and assays for such gold concentrates, dore and ore; (2) a reasonable recovery rate for the refined gold recoverable from such gold concentrates, dore and ore (which shall be adjusted annually to reflect the actual recovery rate of refined metal from such gold concentrates, dore and ore); and (3) the Monthly Average Gold Price for the month in which the gold concentrates, dore and ore were sold.

                         (b) If Payor produces refined gold (meeting the specifications of the London Bullion Market Association, and if the London Bullion Market Association no longer prescribes specifications, the specifications of such other association generally accepted and recognized in the mining industry) from Minerals, and if Section 1.2.1(a) above is not applicable, then for purposes of determining Gross Value, the refined gold shall be deemed to have been sold at the Monthly Average Gold Price for the month in which it was refined. The Gross Value shall be determined by multiplying Gold Production during the month by the Monthly Average Gold Price.

                         1.2.2 Silver.

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                         (a) If Payor sells silver concentrates, dore or ore, then Gross Value shall be the value of the silver contained in the silver concentrates, dore and ore determined by utilizing: (1) the mine weights and assays for such silver concentrates, dore and ore; (2) a reasonable recovery rate for the refined silver recoverable from such silver concentrates, dore and ore (which shall be adjusted annually to reflect the actual recovery rate of refined metal from such silver concentrates, dore and ore); and (3) the Monthly Average Silver Price for the month in which the silver concentrates, dore and ore were sold.

                         (b) If Payor produces refined silver (meeting the specifications for refined silver subject to the New York Silver Price published by Handy & Harmon, and if Handy & Harmon no longer publishes such specifications, the specifications of such other association or entity generally accepted and recognized in the mining industry) from Minerals, and if Section 1.2.2( a) above is not applicable, the refined silver shall be deemed to have been sold at the Monthly Average Silver Price for the month in which it was refined. The Gross Value shall be determined by multiplying Silver Production during the month by the Monthly Average Silver Price.

                         1.2.3 All Other Minerals.

                         (a) If Payor sells any concentrates, dore or ore of Minerals other than gold or silver, then Gross Value shall be the value of such Minerals determined by utilizing: (1) the mine weights and assays for such Minerals; (2) a reasonable recovery rate for the Minerals (which shall be adjusted annually to reflect the actual recovery rate of recovered or refined metal or product from such Minerals); and (3) the monthly average price for the Minerals or product of the Minerals for the month in which the concentrates, dore or ore was sold. The monthly average price shall be determined by reference to the market for such Minerals or product which is recognized in the mining industry as authoritative and reflective of the market for such Minerals or product.

                         (b) If Payor produces refined or processed metals from Minerals other than refined gold or refined silver, and if Section 1.2.3(a) above is not applicable, then Gross Value shall be equal to the amount of the proceeds received by Payor during the month from the sale of such refined or processed metals. Payor shall have the right to sell such refined or processed metals to an affiliated party, provided that such sales shall be considered, solely for purposes of determining Gross Value, to have been sold at prices and on terms no less favorable than those that would be obtained from an unaffiliated third party in similar quantities and under similar circumstances.

               1.3 "Minerals" means gold, silver, platinum, antimony, mercury, copper, lead, zinc, and all other mineral elements and mineral compounds, and geothermal resources, which are contemplated to exist on the Property or which are after the Effective Date discovered on the Property and which can be extracted, mined or processed by any method presently known or developed or invented after the Effective Date.

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               1.4 "Monthly Average Gold Price" means the average London Bullion Market Association Afternoon Gold Fix, calculated by dividing the sum of all such prices reported for the month by the number of days for which such prices were reported during that month. If the London Bullion Market Association Afternoon Gold Fix ceases to be published, all such references shall be replaced with references to prices of gold for immediate sale in another established marked selected by Payor, as such prices are published in Metals Week magazine, and if Metals Week magazine no longer publishes such prices, the prices of such other association or entity generally accepted and recognized in the mining industry.

               1.5 "Monthly Average Silver Price" means the average New York Silver Price as published daily by Handy & Harmon, calculated by dividing the sum of all such prices reported for the month by the number of days in such month for which such prices were reported. If the Handy & Harmon quotations cease to be published, all such references shall be replaced with references to prices of silver for immediate sale in another established market selected by Payor as published in Metals Week magazine, and if Metals Week magazine no longer publishes such prices, the prices of such other association or entity generally accepted and recognized in the mining industry.

               1.6 "Net Smelter Returns" means the Gross Value of all Minerals, less the following costs, charges and expenses paid or incurred by Payor with respect to the refining and smelting of such Minerals:

                         1.6.1 Charges for smelting and refining (including sampling, assaying and penalty charges), but not any charges or costs of agglomeration, beneficiation, crushing, extraction, milling, mining or other processing; and

                         1.6.2 Actual costs of transportation (including freight, insurance, security, transaction taxes, handling, port, demurrage, delay and forwarding expenses incurred by reason of or in the course of such transportation) of concentrates or dore metal from the Property to the smelter or refinery, but not any charges or costs of transportation of Minerals or ores from any mine on the Property to an autoclave, concentrator, crusher, heap or other leach process, mill or plant which is not a smelter or refinery.

               1.7 "Property" means the real property described in the instrument to which these Net Smelter Returns provisions are attached and made a part.

               1.8 "Silver Production" means the quantity of refined silver outturned to Payor's account by an independent third-party refinery for silver produced from the Property during the month on either a provisional or final settlement basis.

2.           Payment Procedures.

               2.1 Accrual of Obligation. Payor's obligation to pay the royalty shall accrue and become due and payable upon the sale or shipment from the Property of unrefined metals, dore metal, concentrates, ores or other Minerals or Minerals products or, if refined metals are produced, upon the outturn of refined metals meeting the requirements of the specified published price to Payor's account.

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               2.2 Futures or Forward Sales, Etc.. Except as provided in Sections 1.2.1( a), 1.2.2(a) and 1.2.3 (a) (regarding sales of unprocessed gold and silver and sales of Minerals other than gold and silver), Gross Value shall be determined irrespective of any actual arrangements for the sale or other disposition of Minerals by Payor, specifically including but not limited to forward sales, futures trading or commodities options trading, and any other price hedging, price protection, and speculative arrangements that may involve the possible delivery of gold, silver or other metals produced from Minerals.

               2.3 Monthly Calculations and Payments. Net Smelter Returns royalties shall be determined on a monthly basis. Payor shall pay Payor each monthly royalty payment on or before the last business day of the month immediately following the month in which the royalty payment obligation accrued. Payor acknowledges that late payment by Payor to Recipient of royalty payments will cause Recipient to incur costs, the exact amount of which will be difficult to ascertain. Accordingly, if any amount due and payable by Payor is not received by Recipient within ten (10) days after such amount is due, then Payor shall pay to Recipient a late charge equal to ten percent (10%) of such overdue amount. Recipient's acceptance of such late charge shall not constitute a waiver of Payor' default with respect to such overdue amount, nor prevent Recipient from exercising any of Recipient's other rights and remedies. If any amount payable by Payor remains delinquent for a period in excess of thirty (30) days, Payor shall pay to Recipient, in addition to the late payment, interest from and after the due date at the statutory interest rate.

               2.4 Statements. At the time of payment of the royalty, Payor shall accompany such payment with a statement which shows in detail the quantities and grades of refined gold, silver or other metals or dore, concentrates or ores produced and sold or deemed sold by Payor in the preceding month; the Monthly Average Gold Price and Monthly Average Silver Price, as applicable; costs and other deductions, and other pertinent information in detail to explain the calculation of the payment with respect to such month. Payment shall be made to the address provided in the agreement or instrument to which this Exhibit is attached for purposes of notices or by wire transfer to an account which Recipient designates.

               2.5 Inventories and Stockpiles. Payor shall include in all monthly statements a description of the quantity and quality of any gold or silver dore that has been retained as inventory for more than ninety (90) days. Recipient shall have thirty (30) days after receipt of the statement to either: (a) elect that the dore be deemed sold, with Gross Value to be determined as provided in Sections 1.2.1 (b), with respect to gold, and 1.2.2(b), with respect to silver, as of such thirtieth (30th) day utilizing the mine weights and assays for such dore and utilizing a reasonable recovery rate for refined metal and reasonable deemed charges for all deductions which Payor is authorized to take, or (b) elect to wait until such time as the royalty payment otherwise would become payable pursuant to Sections 1.2.1(b) and 1.2.2(b) . The Payor's failure to respond within such time shall be deemed to be an election to use the methods described in Sections 1.2.1(b) and 1.2.2(b) .

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               2.6 Audit. Upon reasonable notice and at a reasonable time, the Recipient shall have the right to audit and examine the Payor's accounts and records relating to the calculation of the Net Smelter Returns royalty payments. If such audit determines that there has been a deficiency or an excess in the payment made to Recipient, such deficiency or excess shall be resolved by adjusting the next monthly royalty payment due Recipient. Recipient shall pay all costs of such audit unless a deficiency of three percent (3 %) or more of the royalty payment due for the calendar month in question is determined to exist. All books and records used by Payor to calculate the royalty payments shall be kept in accordance with generally accepted accounting principles applicable to the mining industry.

3.           Sampling and Commingling. Payor shall have the right to commingle Minerals and ores from the Property and materials from other properties, provided, that Payor first informs Recipient, in writing, of Payor' s intention to commingle and delivers to Recipient a detailed written description of Payor's commingling plan. Recipient shall have ninety (90) days during which to review, comment on and approve Payor's proposed commingling plan. In any and all events, all Minerals and ores shall be measured and sampled by Payor in accordance with sound mining and metallurgical practices for metal and mineral content before commingling of any such Minerals or ores with materials from any other property. Representative samples of materials from the Property intended to be commingled shall be retained by Payor, and assays of these samples shall be made before commingling to determine the metal content of each ore. Detailed records shall be kept by Recipient showing measurements, assays of metal content and gross metal content of the materials from the Property are commingled.

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Assessor’s Parcel No. 000-- 006 - 14

Recorded at the request of
and when recorded return to:

Goodsprings Development Corp.
2305 Pleasure Dr.
Reno, Nevada 89509

______________________________________________________________________________

Memorandum of Mining Lease and Option to Purchase Agreement

            This Memorandum of Mining Lease and option to Purchase Agreement “Memorandum”) is made and entered into by and between Goodsprings Development Corp. (“Owner”), and Entourage USA Inc., a wholly owned subsidiary of Entourage Mining Ltd. (“Lessee”).

            Notice is given that Owner and Lessee have entered into the Mining Lease and Option to Purchase Agreement dated effective June 1, 2004, in accordance with which Owner has leased Lessee the patented and unpatented mining claims situated in T. 1 S., R. 39 E., MDB&M, Esmeralda County, Nevada, more particularly described in Exhibit A attached to and by this reference incorporated in this Memorandum. Owner has also granted to Lessee the option to purchase the property subject to this Agreement.

            For the purposes of this Agreement and this Memorandum, the parties addresses are:

If to Owner:    Goodsprings Development Corp. 
    C/O Ken Brook
    2305 Pleasure Dr. 
    Reno, Nevada, 89509 
 
If to Lessee:    Entourage USA Inc., a wholly owned subsidiary of 
    Entourage Mining Ltd. 
    C/O Greg Kennedy 
    212 525 Seymour St. 
    Vancouver, B.C. V6B3H7 
    Canada 
 
 
Dated June 16, 2004       
       
      By      “Gregory F. Kennedy”  
      Lessee  
 
           Entourage Mining Ltd.   
      Owner  

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STATE OF NEVADA,   
  ss.  
COUNTY OF WASHOE  
 
            This Memorandum of Mining Lease and Option to Purchase Agreement was acknowledged before me on June 16, 2004, by Gregory F. Kennedy as President of Entourage USA Inc., a wholly owned subsidiary of Entourage Mining Ltd.
 
  “Christopher D. Farber”   
  Notary Public   
  City of Vancouver 
  Province of British Columbia 
  NOTARIAL SEAL 
 
STATE OF NEVADA,   
  ss.   
COUNTY OF   

            This Memorandum of Mining Lease and Option to purchase Agreement was acknowledged before me on _____________________ , 20____, by D. K. Brook Jr., as President of Goodsprings Development Corp..

     
  Notary Public   

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Exhibit A
Description of Property

C.  Patented Mining Claims   
   
  Black Warrior patented claim USMS 40 and Sunrise USMS 41 in Section 3.1, T. 1 S., R. 39 E., MDB&M, Esmeralda County, Nevada.
   
  APN 000-006-14   
 
B.  Unpatented Mining Claims:   
     
  Claim Name:  BLM Serial # 
 
  BW1 to BW5  773255 -58, 789771 
  BWX1 to BWX4  801552 - 555 

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EX-4.C 3 exhibit4c.htm AGREEMENT DATED MARCH 15, 2005 BETWEEN FAYZ YACOUB AND THE COMPANY Filed by Automated Filing Services Inc. (604) 609-0244 - Entourage Mining Ltd - Exhibit 4-C

MINERAL PROPERTY OPTION AGREEMENT

THIS AGREEMENT is dated the 15thday of March, 2005.

BETWEEN:

 
Entourage Mining Ltd., a company duly incorporated in the Province of British Columbia, having an office at 614 – 475 Howe Street, Vancouver, BC V6C 2B3
   
 
(“Entourage”) 
OF THE FIRST PART
   
AND:   
   
 
FAYZ YACOUB, Professional geologist and businessman, in the Province of British Columbia, having an office at 6498 – 128B Street, Surrey, British Columbia
   
 
(the “Owner”)
OF THE SECOND PART

WHEREAS

A.     
The Owner owns certain mineral property interests (commonly referred to as the “Doran Property”) located in south-central Quebec, which mineral property interests are more particularly described in Schedule “A” attached hereto which forms a material part of this Agreement; and
 
B.     
The Owner wishes to grant an option to Entourage to acquire a one hundred percent (100%) undivided beneficial right, title and interest in and to the Doran Property (as hereinafter defined), and Entourage wishes to acquire the same on the terms and conditions set forth herein.

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants and agreements herein contained, the parties agree as follows:


2

1. DEFINITIONS

1.1     
In this Agreement and in the Schedules and the recitals hereto, unless the context otherwise requires, the following expressions shall have the following meanings:
 
 
"Doran Property"(the 'Property') means those mineral claims described in Schedule "A" hereto, together with all prospecting, research, exploration, exploitation, operating and mining permits, licenses and leases associated therewith, mineral, surface, water and ancillary or appurtenant rights attached or accruing thereto, and any mining license or other form of substitute or successor mineral title or interest granted, obtained or issued in connection with or in place of or in substitution for any such Property.
 
 
“Execution Date” means the date the parties hereto have executed this Agreement.
 
 
“Expenditures” means all expenses, obligations and liabilities of whatever kind or nature spent or incurred directly or indirectly by Entourage from the date hereof in connection with the exploration and development of the Property; including monies expended in maintaining the Property in good standing and in applying for and securing all necessary leases or permits; monies expended toward all taxes, fees and rentals; monies expended in doing and filing assessment work; expenses paid for or incurred in connection with any program of surface or underground prospecting, exploring, geophysical, geochemical and geological surveying, drilling and drifting, raising and other underground work, assaying and metallurgical testing and engineering, environmental studies, data preparation and analysis; costs of acquiring or preparing research materials, technical or geological reports and data; costs of paying the fees, wages, salaries, traveling expenses, of all persons engaged directly in work with respect to and for the benefit of the Property, in paying for the food, lodging and other reasonable needs of such persons; and including a charge in lieu of overhead, management and other unallowable costs equal to ten (10%) percent of all such expenditures.
 
 
Option” has the meaning ascribed to it in section 2.1 below.
 
 
NSR Royalty” has the meaning ascribed to it in section 2.5 below.
 
 
“Shares” mean common shares in the capital stock of Entourage or any successor company resulting from any merger, amalgamation or other corporate reorganization(s) of Entourage.
 
 
Title Dispute” shall have the meaning ascribed to it in section 13.1.


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2.      GRANT OF OPTION
 
2.1     
The Owner hereby gives and grants to Entourage the sole and exclusive right and option (the "Option") to acquire from the Owner a one hundred percent (100%) undivided beneficial right, title and interest in and to the Property (subject to the NSR Royalty reserved to the Owner as referred to in section 2.5) in accordance with the terms of this Agreement.
 
2.2     
In order to exercise the Option and to earn its interest in the Property, Entourage shall:
 
  (a)     
issue and deliver to the Owner a total of 750,000 Shares as follows:
 
   (i)     
125,000 Shares within ten business days of the date of approval of this Agreement by both parties;
 
   (ii)     
an additional 125,000 Shares on or before March 15, 2006;
 
   (iii)     
an additional 250,000 Shares on or before March 15, 2007; and
 
   (iv)     
an additional 250,000 Shares on or before March 15, 2008;
 
  (b)     
make cash payments to the Owner of a total of $220,000 as follows:
 
   (i)     
Thirty-five thousand ($35,000) dollars on the Execution Date, less the sum of five thousand ($5,000) which is non-refundable, which has been received by the Owner and the receipt of which is hereby acknowledged by the Owner;
 
   (ii)     
an additional thirty-five thousand ($35,000) dollars on or before March 15, 2006;
 
   (iii)     
an additional seventy-five thousand ($75,000) dollars on or before March 15, 2007;
 
   (iv)     
an additional seventy-five thousand ($75,000) dollars on or before March 15, 2008; and
 
  (c)     
subject to section 2.4 below, incur at least one million ($1,000,000) dollars of Expenditures on the Property, as follows:
 
   (i)     
two hundred thousand ($200,000) dollars on or before the first anniversary date of the Execution Date;
 
   (ii)     
an additional three hundred thousand ($300,000) dollars on or before the second anniversary date of the Execution Date; and
 

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    (iii) 
an additional five hundred thousand ($500,000) dollars on or before the third anniversary date of the Execution Date.
       
 
The issuance of 750,000 Shares, the cash payments totaling $220,000 and the requisite $1,000,000 in Expenditures required to exercise the Option, all as set out above, are herein collectively referred to as the “Option Price”.

2.3     
Any Shares delivered, cash payments made, or Expenditures incurred toward the Option Price that is over and above that required to be made during a particular time period in section 2.2 shall be carried forward and applied against the required payment in the subsequent period(s). Once all shares are delivered and cash payments made Entourage will have delivered the consideration comprising the Option Price; as such, any remaining requisite Expenditure requirements will cease and Entourage will earn a 100% undivided beneficial right, title and interest in the Property (subject to the NSR Royalty reserved to the Owner as referred to in section 2.7).
 
2.4     
Subject to sections 13.1 and 13.2, should Entourage fail to deliver the consideration comprising the Option Price within the time periods set forth herein, the Owner shall provide Entourage with written notice of default and Entourage shall have a period of 45 days following receipt of such notice of default to rectify the same, failing which the Option and this Agreement shall automatically terminate at the end of such 45 day notice period without further notice from the Owner.
 
2.5.1     
The purchase and sale of the Property is subject to a 2.5% net smelter return royalty (“NSR Royalty”) in favour of the Owner, which NSR Royalty shall be calculated in accordance with the formula set out in Schedule “B” attached hereto and forming a material part of this Agreement. Entourage may, from time to time, purchase up to three-fifths (i.e., 1.5% NSR Royalty) of the NSR Royalty for one million seven hundred fifty thousand dollars ($1,750,000) on the basis of one hundred thousand dollars for each one-tenth percent of the NSR Royalty (i.e., $100,000 per 0.1% NSR Royalty) acquired on the first two-fifths of the NSR Royalty (i.e, the first 1.0% NSR Royalty), and one hundred fifty ($150,000) dollars for each one-tenth percent of the NSR Royalty (i.e., $150,000 per 0.1% NSR Royalty) thereafter for the remaining NSR Royalty (i.e., the remaining 0.5% NSR Royalty). To exercise its option to purchase the NSR Royalty or any portion thereof, Entourage must provide the Owner with at least 30 days advance written notice of its intention to do so, and must close upon each purchase within 60 days of each notice. This option to purchase the three-fifths of the NSR Royalty may be exercised in whole or in part; exercise may occur in portions and the purchase option survives the term of this agreement and the exercise of the Option on the Doran Property.
 
2.6      This Agreement is an option only and after the Optionee has paid the sum of


5

 
$35,000 ($5,000 of which has been paid) and issued 125,000 shares of Entourage to the Owner; any further payments, share allotments and issuances and the making of any Expenditures are entirely at the election of Entourage.

2.7     
Entourage has the right, at any time, to prepay or accelerate payment of, the Option Price.
 
3.     
ACQUISITION OF INTEREST IN THE PROPERTY
 
3.1     
At such time as Entourage has paid to the Owner the Option Price in accordance with sections 2.2 and 2.3 above, within the time periods specified therein, the Option shall be deemed to have been exercised by Entourage and Entourage shall have thereby, without any further act, acquired a one hundred percent (100%) undivided beneficial right, title and interest in and to the Property.
 
3.2     
Subsequent to the signing of this Agreement, should the Owner or the Optionee acquire any interest in and to any mineral claims (mineral claims that are not included in Schedule "A" or have been acquired by the Owner previous to signing this Agreement) within 5km of the existing Property boundary line, such additional mineral claims will become part of the Property for the purposes of this Agreement.
 
4.     
REGISTRATION AND TRANSFER OR PROPERTY INTERESTS
 
4.1     
Upon the request of Entourage after execution of the Agreement and at any time during the term of this Agreement, the Owner shall assist Entourage to record this Agreement with the appropriate mining recorder.
 
4.2     
The Owner shall further provide Entourage with such recordable transfers as Entourage and its counsel shall require in order to record its due interests in respect of the Property upon exercise of the Option.
 
5.     
REPRESENTATIONS AND WARRANTIES
 
5.1     
Entourage represents and warrants to the Owner that:
 
  (a)     
it has full power and authority to enter into and perform its obligations under this Agreement and any agreement or instrument referred to or contemplated by this Agreement;
 
  (b)     
all necessary corporate approvals have been, or will be obtained and are, or will be in effect with respect to the transactions contemplated hereby;


6

  (c)     
neither the execution and delivery of this Agreement nor any of the agreements contemplated hereby, nor the consummation of the transactions hereby contemplated conflict with, result in the breach of or accelerate the performance required by any agreement to which it is a party; and
 
  (d)     
upon issuance, the Shares shall be validly issued as fully paid and non- assessable common shares of the Company.
 
5.2     
The Owner hereby represents and warrants to Entourage that:
 
  (a)     
he has full power, capacity and authority to enter into and perform his obligations under this Agreement and any agreement or instrument referred to or contemplated herein;
 
  (b)     
neither the execution and delivery of this Agreement nor any of the agreements referred to herein or contemplated hereby, nor the consummation of the transactions hereby contemplated conflict with, result in the breach of or accelerate the performance required by any agreement to which he is a party;
 
  (c)     
he is the legal and beneficial owner of all of the mineral interests comprising the Property, free and clear of all liens, charges and encumbrances and no taxes, claim or other maintenance fees or rentals are due with respect to the Property and the Property is current in assessment work due;
 
  (d)     
the Property is accurately described in Schedule "A" attached hereto;
 
  (e)     
each of the mineral claims comprising the Property has been duly and validly granted to or staked by the Owner, and is properly located and recorded with the appropriate mining authorities pursuant to all applicable laws and regulations of the jurisdiction in which the Property is situate.
 
  (f)     
to the best of his knowledge, there are no restrictions on the exploitation of minerals on the Property;
 
  (g)     
the Owner has the exclusive right to enter into this Agreement and has all necessary authority to dispose of his interests in and to the Property in accordance with the terms of this Agreement;
 
  (h)     
to the best of his knowledge, there are no adverse claims or challenges against or to the ownership of or title to any of the mineral interests comprising the Property or which may impede development, nor to the knowledge of the Owner is there any basis for any potential claim or challenge, and there are no outstanding agreements or options to acquire or purchase the Property or any portion thereof, and no persons have any royalty, net profits or other interests whatsoever in production from any of the mineral interests comprising the Property;


7

  (i)     
there are no pending or threatened actions, suits, claims or proceedings regarding the Property or any portion thereof of which the Owner is aware; and
 
  (j)     
the Owner has the full right and authority to exercise the Owner’s rights and remedies under this Agreement, to waive any default of Entourage under this Agreement, to exercise any and all claims which the Owner may have as against Entourage under this Agreement and to collect, distribute and account for any and all payments and issuances made by Entourage to the Owner under this Agreement, and;
 
  (k)     
there is no material environmental liability outstanding nor is there any outstanding reclamation work which is needed to be performed on the property, nor
 
  (l)     
is the Owner a party, now or in the past, to any other agreements(s) transferring an interest in the property.
 
5.3     
The representations and warranties hereinbefore set out are conditions on which the parties have relied in entering into this Agreement and shall survive the acquisition of any interest in the Property by Entourage and each of the parties shall indemnify and save the other harmless from all loss, damage, costs, actions and suits arising out of or in connection with any breach of any representation, warranty, covenant, agreement or condition made by it and contained in this Agreement.
 
6.     
COVENANTS OF THE OWNER
 
6.1     
While the Option remains outstanding, the Owner covenants and agrees with Entourage to:
 
  (a)     
for so long as Entourage is not in default hereunder, not do any act or thing which would in any way adversely affect the rights of Entourage hereunder;
 
  (b)     
make available to Entourage and its representatives all records, maps, reports, drill core and files in its possession relating to the Property and permit Entourage and its representatives at their own risk and expense to take abstracts there from and make copies thereof;
 
  (c)      co-operate as reasonably necessary with Entourage in obtaining any access, surface and other rights on or related to the Property as Entourage reasonably deems desirable; and
 

8

  (d)     
promptly provide Entourage with any and all notices and correspondence received by the Owner from any relevant government agencies in respect of the Property; and
 
  (e)     
indemnify Entourage for any work done by Owner or Owner as agent for On Track Exploration Ltd.
 
7.     
PRE-EXERCISE ACTIVITIES
 
7.1     
Prior to exercise of the Option, Entourage shall have full right, power and authority to do everything necessary or desirable in accordance with good mining practice in connection with the exploration and development of the Property, including without limiting the generality of the foregoing, the exclusive right to:
 
  (a)     
enter the Property and have exclusive and quiet possession of the Property, to regulate access to the Property, as well as the use and enjoyment thereof without interruption by or disturbance from the Owner, or any person claiming by, through or under the Owner;
 
  (b)     
do such prospecting, exploration, development, exploitation and other mining work thereon and thereunder as Entourage may in its sole discretion consider advisable or desirable subject to the approval of all applicable laws and regulations and act as Operator of the property as the term Operator is commonly understood in the mining industry
 
  (c)     
bring and erect upon the Property such equipment and facilities as Entourage may in its sole discretion consider advisable or desirable;
 
  (d)     
remove materials from the Property for the purposes of assaying and testing, bulk sampling or otherwise as Entourage may in its sole discretion consider advisable or desirable, and dispose of such materials by way of sale or otherwise as Entourage may in its sole discretion consider advisable or desirable; and
 
  (f)     
participate with the Owner in negotiating such agreements as may be necessary or in Entourage’s best interests with the owners of and other persons having interests in the Property concerning surface or access rights affecting the Property, provided that if and to the extent that the Owner has any such rights affecting the Property, such rights are hereby included in the Property and are subject to the Option hereunder; and
 
  (g)     
to bring third parties and contractors on the property
 
7.2     
Prior to exercise of the Option, Entourage shall have the following duties and obligations:
 

9

  (a)     
To manage, direct and control all exploration, development and production operations in, on and under the Property in a prudent and workmanlike manner, and in compliance with all applicable laws, rules, orders and regulations;
 
  (b)     
Subject to the terms and conditions of this Agreement, to pay all taxes, rentals and maintenance fees on the Property as may be necessary to keep the Property in good standing and free and clear of liens, charges and encumbrances of every character arising from operations hereunder (except liens for taxes not yet due, and other claims and liens contested in good faith by Entourage) and to proceed with all diligence to contest or discharge any lien that is filed;
 
  (c)     
file all applicable work for assessment credits against the respective claims comprising the Property. Any excess work shall be applied equally to the portable assessment credit account of Entourage and the Owner; as such portable assessment credit account is applicable in the Province of Quebec;
 
  (d)     
to obtain and maintain, or cause any contractor engaged to obtain and maintain, adequate insurance coverage with respect to activities on or with respect to the Property;
 
  (e)     
to perform its duties and obligations in a manner consistent with good exploration and mining practices;
 
  (f)     
defend, indemnify and save the Owner and its directors, officers and employees harmless from any and all losses, damages, expenses, claims, suits, actions or demands of any kind or nature whatsoever in any way referable to or arising out of any work done by Entourage on or with respect to the Property;
 
  (g)     
prior to commencing any operations or activities on the Property, obtain all necessary operating and environmental permits and post any required reclamation or other bonds or safekeeping agreements required by any governmental agency; and
 
  (h)     
Entourage shall permit the Owner, or his representatives duly authorized in writing, to visit and inspect the Property at all reasonable times and intervals, and inspect all data obtained by Entourage as a result of its operations thereon, subject to such confidentiality arrangements as Entourage may reasonably consider appropriate.
 
7.3     
Entourage agrees to offer all contracts to undertake the first and second years of exploration work ($200,000 and $300,000 respectively) on the Property to On Track Exploration Ltd, (“OTEL”) provided that the rates quoted by OTEL are competitive commercial rates and OTEL can provide the services in a timely
 

10

manner, to the satisfaction of Entourage. The parties agree that a mutuallyacceptable professional geologist, with expertise in uranium exploration, will be chosen to supervise all geophysical and geological work performed on the Property by OTEL. Further geophysical and geological exploration work will be negotiated with On Track Exploration Ltd. at the conclusion of the second year work program. 
 
8. TERMINATION OF OPTION 
 
8.1
This Agreement, except for the provisions of sections 9 and 11, and the Option shall (unless otherwise agreed by the Owner in writing) terminate:
 
(a)
at the end of the 45 day notice period set out in section 2.4, if the outstanding Option Price required to be paid by Entourage pursuant to this Agreement has not been paid by Entourage to the Owner by such date;
 
(b)
if Entourage gives notice to the Owner in accordance with section 8.2; or
 
(c)
upon Entourage being or becoming in default of any other material obligation hereunder, and upon Entourage failing to rectify the same within 45 days following receipt from the Owner of notice of such default.
 
8.2
At any time prior to the exercise of the Option, Entourage shall have the right to terminate this Agreement and the Option by giving not less than thirty (30) days' notice to that effect to the Owner.
 
9.  
OBLIGATIONS OF ENTOURAGE ON TERMINATION OF THE  OPTION
 
9.1  
If this Agreement is terminated for any reason whatsoever prior to the exercise of the Option, this Agreement, including the Option, (but excluding this section 9 and section 13 which shall both continue in full force and effect for so long as is required to give full effect to the same) shall be of no further force and effect except that Entourage shall:
 
(a) vacate the Property, and leave the Property:
 
  (i)
in good standing and in accordance with the applicable laws and regulations, with a minimum of six months of assessment credits filed against the same;
 
  (ii) free and clear of all liens, charges and encumbrances arising from this Agreement or its operations hereunder;  


11

    (iii)
in a safe and orderly condition; and
 
    (iv)
in a condition which is in compliance with all applicable rules and orders of governmental authorities with respect to reclamation and restoration of the surface of the Property insofar as is required by the exploration work performed during the term of this agreement;
 
  (b)     
deliver to the Owner, within one hundred twenty (120) days of termination, a report on all work carried out by Entourage on the Property together with copies of all maps, drillhole logs, assay results, reports and other information compiled or prepared by or on behalf of Entourage with respect to work on or with respect to the Property, and make available to the Owner (at the place of storage) all core, samples and sample pulps and rejects;
 
  (c)     
unless otherwise agreed by the Owner, remove from the Property within six months of the effective date of termination all materials, equipment and facilities erected, installed or brought upon the Property by or at the instance of Entourage. If the same is not completely removed, then the Owner may, at his option, retain the same as the Owner’s property, or remove the same from the Property at Entourage’s expense; and
 
  (d)     
deliver to the Owner a duly executed quitclaim of all right, title and interest of Entourage in and to the Property in favour of the Owner.
 
10.     
CONFIDENTIAL NATURE OF INFORMATION
 
10.1     
Each party agrees that all information obtained hereunder shall be the exclusive property of the parties and not publicly disclosed or used other than for the activities contemplated hereunder except as required by law or by the rules and regulations of any regulatory authority, securities commission or stock exchange having jurisdiction or with the written consent of the other party, such consent not to be unreasonably withheld. The parties expressly agree that Entourage may use confidential information to secure funding or financing necessary to perform its obligations under this agreement.
 
11.     
ASSIGNMENT
 
11.1     
Entourage may at any time assign or transfer any or all of its interest herein, provided such assignee agrees to abide by and be bound by the terms of this Agreement in the same manner and to the same effect as if an original signatory hereto.


12

12.     
NOTICES
 
12.1     
Any notice, direction or other instrument required or permitted to be given under this Agreement shall be in writing and may be given by the delivery of the same or by mailing the same by prepaid registered or certified mail or by sending the same by facsimile in each case addressed to the address first listed above or the following facsimile numbers:
 
  (a)     
If to the Owner at facsimile no. :(604) 596-8592; and
 
  (b)     
If to Entourage at facsimile no.: (604) 669-4368.
 
12.2     
Any party may at any time give to the others notice in writing of any change of address of the party giving such notice and from and after the giving of such notice the address or addresses therein specified shall be deemed to be the address of such party for the purposes of giving notice hereunder.
 
13.     
FORCE MAJEURE
 
13.1     
Entourage shall not be deemed to be in default hereunder for failure or delay to perform any of its covenants pursuant to this Agreement, including payments toward the Option Price, if prior to the requirement to perform such covenant any event of force majeure (including, without limiting the generality of the foregoing, equipment breakdown, regulatory delays, government permitting delays and delays arising from inclement weather) arises which precludes Entourage from undertaking work on the Property (except for Entourage’s lack of funds or inability to raise funds), or a material dispute arises as to the ownership or title to any part of the Property or to the minerals therein, including land claims by Inuit, aboriginal, native, indigenous or First Nations people (a “Title Dispute”).
 
13.2     
Should Entourage seek to rely on the provisions of subsection 13.1 it shall promptly give written notice to the Owner of the particulars thereof and all time limits imposed by this Agreement shall be extended from the date of delivery of such notice by a period equivalent to the period of delay resulting from such event of force majeure or Title Dispute.
 

13

14.     
ARBITRATION
 
14.1     
If any question, difference or dispute shall arise between the parties in respect of any matter arising under this Agreement or in relation to the construction hereof, the same shall be referred to a mutually acceptable arbitrator. If an agreement is not settled within 30 days of the referral, the award of one arbitrator shall determine the dispute. The decision of the arbitrator shall be made within 30 days after the selection. The expense of the arbitration shall be borne equally by the parties to the dispute. The arbitration shall be conducted in accordance with the provisions of the Commercial Arbitration Act (British Columbia), as amended, and the decision of the arbitrator shall be conclusive and binding upon the parties.
 
 
The rules and procedures for the arbitration shall be procedures established by the B.C. Arbitrators Institute. The place of arbitration shall be Vancouver, British Columbia, Canada. If the parties cannot agree on a mutually acceptable arbitrator within 30 days of a dispute arising, the question, difference or dispute shall be referred to the courts of British Columbia.
 
15.     
GENERAL
 
15.1     
The parties shall execute such further and other documents and do such further and other things as may be necessary or convenient to carry out and give effect to the intent of this Agreement.
 
15.2     
All references to dollar amounts in this Agreement shall be to lawful currency of Canada, unless specifically provided to the contrary. All payments to be made to any party hereunder may be made by cheque, money order, wire transfer or bank draft mailed or delivered to such party at its address for notice purposes as provided herein, or deposited for the account of such party at such bank or banks in Canada as such party may designate from time to time by notice to the paying party.
 
15.3     
This Agreement shall ensue to the benefit of and be binding upon the parties hereto and their respective successors and assigns.
 
15.4     
This Agreement shall constitute the entire agreement between the parties and, except as hereafter set out, replaces and supersedes all prior agreements, memoranda, correspondence, communications, negotiations and representations, whether oral or written, express or implied, statutory or otherwise between the parties with respect to the subject matter herein.
 
15.5     
Any modification of this Agreement will be effective only if it is in writing and signed by both parties hereto.
 
15.6     
This Agreement shall be governed by and construed according to the laws of British Columbia and the laws of Canada applicable therein. Subject to section


14

  14.1, all actions arising from this Agreement shall be commenced and maintained in the Supreme Court of British Columbia.
 
15.7      This Agreement may be subject to regulatory approval and the parties agree to make any reasonable amendments hereto as may be required by any regulatory authorities.
 
15.8      The parties have not created a partnership and nothing contained in this Agreement shall in any manner whatsoever constitute any party the partner, agent or legal representative of any other party. No party shall have any authority to act for, or to assume any obligations or responsibility on behalf of, any other party except as may be, from time to time, agreed upon in writing between the parties or as otherwise expressly provided.
 
15.9      No consent or waiver expressed or implied by either party in respect of any breach or default by the other in the performance by such other of its obligations hereunder shall be deemed or construed to be a consent to or a waiver of any other breach or default.
 
15.10      If any one or more of the provisions contained herein should be invalid, illegal or unenforceable in any respect in any jurisdiction, the validity, legality and enforceability of such provision shall not in any way be affected or impaired thereby in any other jurisdiction, and the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.
 
15.11      This Agreement may be executed in any number of counterparts, each of which when delivered, either in original or facsimile form, shall be deemed to be an original and all of which together shall constitute one and the same document.

IN WITNESS WHEREOF the parties hereto have executed these presents as of the date first above written.

ENTOURAGE MINING LTD.

“Greg Kennedy”

per: /s/ Greg Kennedy
Authorized Signatory

/s/“Fayz Yacoub”
FAYZ YACOUB


15

SCHEDULE “A”

THIS IS SCHEDULE “A” to the Mineral Property (Doran) Option Agreement dated the 15 day of March, 2005, between Entourage Mining Ltd. and Fayz Yacoub.

MINERAL CLAIMS COMPRISING THE PROPERTY

   Title # Row  Column  Surface Area
(ha) 
CDC0048705  05  20  55.01 
CDC0048706  05  21  55.01 
CDC0048707  05  22  55.01 
CDC0048708  05  23  55.01 
CDC0048709  06  20  55.00 
CDC0048710  06  23  55.00 
CDC0048711  07  20  54.99 
CDC0048712  10  24  54.96 
CDC0048713  11  21  54.95 
CDC0048714  11  24  54.95 
CDC0048715  14  22  54.92 
CDC0048716  14  23  54.92 
CDC0048651  07  22  54.99 
CDC0048652  07  23  54.99 
CDC0048653  08  22  54.98 
CDC0048654  08  23  54.98 
CDC0048655  09  22  54.97 
CDC0048656  09  23  54.97 
CDC0048657  10  22  54.06 
CDC0048658  10  23  54.96 
CDC0048659  11  22  54.95 
CDC0048660  11  23  54.95 
CDC0048661  12  22  54.94 
CDC0048662  12  23  54.94 
CDC0048663  13  22  54.93 
CDC0048664  13  23  54.93 
CDC0048665  06  21  55.00 
CDC0048666  06  22  55.00 
CDC0048667  07  21  54.99 


16

CDC0064114  08  20  54.98 
CDC0064115  08  21  54.98 
CDC0064116  09  20  54.97 
CDC0064117  09  21  54.97 
CDC0064118  10  21  54.96 
CDC0064119  12  21  54.94 
CDC0064120  12  24  54.94 
CDC0064121  13  21  54.93 
CDC0064122  13  24  54.93 
CDC0064123  14  21  54.92 
CDC0064124  14  24  54.92 
CDC0064125  15  21  54.91 
CDC0064126  15  22  54.92 
CDC0064127  15  23  54.92 
CDC0064128  15  24  54.92 

Total: 44 mineral claims


SCHEDULE “B”

THIS IS SCHEDULE “B to the Mineral Property Option Agreement dated the 15th day of March, 2005, between Entourage Mining Ltd. and Fayz Yacoub.

NET SMELTER RETURN ROYALTY
(NSR ROYALTY)

1.     
Pursuant to the Mineral Property Option Agreement to which this Schedule “B” is attached, the Owner (the “Recipient”) may receive a Net Smelter Return royalty (the “NSR Royalty”) based on proceeds received by Entourage (the “Producer”) from production from the Property as described in Schedule “A” of the Agreement, free and clear of all costs of development and operations.
 
2.     
Net Smelter Return” shall mean the actual proceeds received by the Producer from any mint, smelter, or other purchaser for the sale of ores, metals or concentrated products (“Product”) from the Property derived from commercial production (and not from bulk sampling, pilot plant operations or preliminary production) and sold after deducting from such proceeds the following charges to the extent that they were not deducted from such proceeds by the purchaser in computing payment: smelting and refining charges; penalties; cost of transportation of ores, metals or concentrates from the Property to any mint, smelter or other purchaser; cost of insurance of the products; and any export and import taxes on said ores, metals or concentrates levied by the country into which such ore, metals or concentrates are imported, if such charges or costs are deducted from the proceeds received.
 
3.     
Payment of the NSR Royalty shall be made quarterly within 45 days after the end of each fiscal quarter of the Producer, on actual proceeds received by the Producer from the sale of Product from the Property, and shall be accompanied by un- audited calculations and statements pertaining to the operations carried out on the Property. Within 140 days after the end of each fiscal year of the Producer in which the NSR Royalty is payable, the records relating to the calculation of Net Smelter Return for such year shall be audited and any resulting adjustments in the payment of the NSR Royalty payable shall be made forthwith. A copy of the said audit shall be delivered to the Recipient within 30 days of the end of such 140-day period.


2

4.     
Each annual audit shall be final and not subject to adjustment unless the Recipient delivers to the Producer written exceptions in reasonable detail within three months after the Recipient receives the report. The Recipient, or its representative duly authorized in writing, shall at its expense have the right to audit the books and records of the Producer related to the Net Smelter Return to determine the accuracy of the report, but shall not have access to any other books and records of the Producer. The audit shall be conducted by a chartered or certified public accountant of recognized standing (the “Auditor”). The Producer shall have the right to restrict access to its books and records until execution of a written agreement by the Auditor that all information shall be held in confidence and used solely for purposes of audit and resolution of any disputes related to the report. A copy of the Auditor’s report shall be delivered to the Producer and the amount, which should have been paid according to the Auditor’s report, shall be paid forthwith, one party to the other. In the event that the said discrepancy is to the detriment of the Recipient and exceeds 10.0% of the amount actually paid by the Producer, then the Producer shall pay the entire cost of the audit.
 
5.     
In the event smelting or refining are carried out in facilities owned or controlled, in whole or in part, by the Producer, charges, costs and penalties with respect to such operations, excluding transportation, shall mean reasonable charges, costs and penalties for such operations but not in excess of the amounts that the Producer would have incurred if such operations were carried out at facilities not owned or controlled by the Producer then offering comparable custom services.


EX-4.D 4 exhibit4d.htm AGREEMENT DATED APRIL 7, 2005 BETWEEN UNITED CARINA RESOURCES CORP. AND THE COMPANY Filed by Automated Filing Services Inc. (604) 609-0244 - Entourage Mining Ltd - Exhibit 4-D

MINERAL PROPERTY OPTION AGREEMENT

THIS AGREEMENT is dated the 7th day of April 2005.

BETWEEN:

 
Entourage Mining Ltd., a company duly incorporated in the Province of British Columbia, having an office at 614 – 475 Howe Street, Vancouver, BC V6C 2B3
   
 
(“Entourage”) 
OF THE FIRST PART
   
AND:   
   
 
United Carina Resources Corp., a company duly incorporated in the Province of Saskatchewan, having an office at Suite 105-111 Research Drive, Saskatoon Saskatchewan, S7N 3R2.
   
 
(“United Carina”)
OF THE SECOND PART

 

WHEREAS

A.     
United Carina owns certain mineral property interests (commonly referred to as the Hatchet Lake Property) located in the Athabaska Basin, which mineral property interests are more particularly described in Schedule “A” attached hereto which forms a material part of this Agreement; and
 
B.     
United Carina wishes to grant an option to Entourage to acquire a twenty percent (20%) beneficial right, title and interest in and to the Hatchet Lake Property (as hereinafter defined), and Entourage wishes to acquire the same on the terms and conditions set forth herein.

NOW THEREFORE THIS AGREEMENT WITNESSES the terms and conditions of our agreement whereby Entourage Mining Ltd. (“Entourage") will purchase a 20% beneficial right, title and interest in and to a prospective uranium property located in the Athabaska Basin area of Saskatchewan (the "Hatchet Lake Property" or the “Property”) (as more particularly described in Schedule “A” hereto) from United Carina Resources Corp.

In consideration of the sum of $10.00 paid by Entourage to United Carina, the receipt and sufficiency of which is hereby acknowledged, and for other good and valuable consideration, the parties hereto agree as follows:



2

1. GRANT OF OPTION

  1.1     
United Carina hereby grants to Entourage the exclusive option to acquire an undivided 20% beneficial right, title and interest in and to the Property in consideration of the following payments and work commitments by Entourage:
 
    (a)     
a cash payment, within ten (10) days of the execution of this Agreement, of CDN $40,000 paid by Entourage to United Carina; and
 
    (b)     
a work commitment of CDN $100,000 by Entourage to United Carina per annum for two years ($200,000 CDN total expenditures).
 
   
(subsections (a) and (b) above being hereinafter collectively referred to as the “Option Exercise Price”).
 
  1.2     
Upon payment of the Option Exercise Price in section 1.1 above, the Option will be deemed to have been exercised by Entourage and United Carina agrees to make any and all efforts to register the interest of Entourage in the Property.
 
2.     
REPRESENTATIONS AND WARRANTIES
 
  2.1     
Entourage represents and warrants to United Carina that:
 
    (a)     
Entourage was duly incorporated under the laws of the Province of British Columbia, is validly subsisting and in good standing under the laws of the Province of British Columbia, and has all requisite power and capacity to carry out its obligations under this Agreement;
 
    (b)     
the execution and delivery of this Agreement and the performance by Entourage of its obligations hereunder does not and will not conflict with, and does not and will not result in a breach of, or constitute a default under, any of the terms of its incorporating documents or any agreement or instrument to which Entourage is a party;
 
    (c)     
this Agreement has been or will be authorized by all necessary corporate action on the part of Entourage;
 
    (d)     
Entourage is in good standing with the British Columbia Securities Commission and all other regulatory and statutory bodies that have jurisdiction over its affairs and will remain in good standing with all relevant regulatory and statutory bodies from the term of this Agreement;
 
    (e)     
There are no actions, suits, proceedings or investigations in progress, pending or, to the knowledge of Entourage and its directors and officers, threatened, against or affecting Entourage, at law or in equity, before any court, arbitrator, regulatory body or federal, provincial, state, municipal or regional government or governmental authority, including any department, commission, board, bureau, administrative agency or similar body, domestic or foreign, which may materially adversely affect Entourage or its financial condition or any other action taken or to be taken by Entourage pursuant to or in connection with this Agreement;


3

    (f)     
There is no adverse material information with respect to Entourage that has not been generally disclosed;
 
    (g)     
During the period between the execution of this Agreement and Closing, the business affairs of Entourage will be conducted in a commercially reasonable manner and all reasonably necessary efforts shall be made to preserve intact the business of Entourage, its relationships with third parties, and the services of its existing officers, employees, and directors.
 
  2.2
United Carina represents and warrants to Entourage that: 
       
(a) 
United Carina beneficially owns any and all rights to the Property including registered title as the original staker with the Province of Saskatchewan free and clear of all liens, charges and encumbrances;
       
(b) 
entering into this Agreement does not and will not conflict with, and does not and will not result in a breach of, any agreement or instrument to which United Carina is a party;
   
(c)
United Carina has due and sufficient right and authority to enter into this Agreement in accordance with this Agreement, and this Agreement has been or will be authorized by all necessary action on the part of United Carina;
       
(d) 
 the first and second years exploration on the Property will call for a budget of Cdn $1,250.000(which amounts will be spent).
       
(e) 
United Carina will act as Operator of the Property during the term of this Agreement and will carry out its work and obligations as Operator in a workmanlike fashion, in accordance with industry standards including industry standards for any remedial or environmental or reclamation work to be completed on the Property.
       
  2.3
United Carina represents and warrants to Entourage that there are no outstanding agreements or options to acquire or purchase any interest in the Property, and no person has any royalty or other interest whatsoever in the Property (save and except that which is created in this Agreement and that which vests in United Carina itself).
       
  2.4
It will seek and obtain any and all necessary approvals to this Agreement from the TSX-Venture Exchange. 
       
3 COVENANTS OF ENTOURAGE 
       
  3.1 Entourage covenants and agrees with United Carina that: 
       
(a)           Entourage will ensure that any disclosure documents will constitute full, true and 


4

     
plain disclosure of all material facts relating to Entourage and to the Shares issuable upon Closing as required under applicable securities laws; and
 
    (b)     
Entourage will maintain its status as a reporting issuer under the securities laws of British Columbia and will continue to be in compliance with its obligations under section 85 of the Securities Act (British Columbia) and the Rules thereunder without default under such provisions from the date hereof up to and including six months after the Closing.
 
4. 
PAYMENT OF FUNDS TO UNITED CARINA
 
  4.1     
The annual payments of $100,000 will be made on a quarterly basis at $25,000 per quarter with the first payment to be made June 30, 2005 and payments to be made in each successive quarter for the term of this Agreement.
 
5.   
CONDITIONS TO THE OBLIGATIONS OF ENTOURAGE
 
  5.1     
The obligations of Entourage herein are expressly subject to satisfactory due diligence investigations of United Carina and the Property to be completed on or before April 7, 2005.
 
6.   
RIGHTS AND OBLIGATIONS OF THE PARTIES
 
  6.1     
Upon execution of this Agreement, Entourage shall take all reasonable steps to:
 
    (a)     
gain, prior to Closing, such approvals to this Agreement as may be required from Entourage, its shareholders and from regulatory and statutory authorities having jurisdiction (if any);
 
    (b)     
at any time prior to Closing, not do or permit to be done any act or thing which would or might in any way adversely affect the rights of United Carina hereunder; and
 
    (c)     
provide to United Carina and its designated representatives (including legal counsel) any and all reasonably requested agreements, documents, records, data and files (in written or electronic form) relating to Entourage which are in the care, control and possession of Entourage.
 
  6.3     
Upon execution of this Agreement, United Carina shall take all reasonable steps to:
 
    (a)     
at any time prior to Closing, not do or permit to be done any act or thing which would or might in any way adversely affect the rights of Entourage hereunder;
 
    (b)     
ensure that Entourage (through its ownership of an interest in the Property) will have, upon Closing, exclusive and quiet possession of the Property, without the occupation of the same or any part thereof by any other person; and


5

    (c)     
provide to Entourage and its designated representatives (including legal counsel) any and all reasonably requested agreements, documents, records, data and files (in written or electronic form) relating to the Property which are in the care, control and possession of United Carina.

  6.4     
This Agreement is an option only. Nothing in this Agreement, until Closing, will be deemed to create between the parties hereto a joint venture, partnership or other form of relationship.
 
7.     
CLOSING
 
  7.1     
The closing of the exercise of the Option to acquire a twenty (20%) percent interest in the Property (the "Closing") shall occur within thirty (30) days of the date on which Entourage provides notice to United Carina, in writing, that it has paid the Option Exercise Price in section 1.1.
 
  7.2     
Upon Closing, United Carina shall complete any and all filings with the Province of Saskatchewan necessary to transfer registered title to twenty (20%) percent of the Property to Entourage.
 
  7.3     
Upon Closing, the parties hereto, and any other parties with an interest in the Property, shall enter into a joint venture agreement by which their future exploration and development of the Property will be governed. The terms of this joint venture agreement will require that each party to it contribute, pro-rata according to their interest in the Property, to future expenditures and work on the Property.
 
8.      MISCELLANEOUS
 
  8.1     
Any notice to be required or permitted hereunder will be in writing and delivered by hand delivery, facsimile transmission, or prepaid registered mail addressed to the party entitled to receive the same, or delivered to such party at the address specified below, or to such other address as either party may give to the other for that purpose. The date of receipt of any notice, demand or other communication hereunder will be the date of delivery if delivered, the date of transmission if sent by facsimile, or, if given by registered mail as aforesaid, will be the date on which the notice, demand or other communication is actually received by the addressee.
 
  If to Entourage:
  Fax: 604-669-4368
  If to United Carina:
  Fax : 306-244-0042

  8.2     
This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, successors and permitted assigns.


6

  8.3
Each of the parties hereto agrees that it shall be responsible for its own legal expenses and disbursements relating to this Agreement.
 
  8.4 
Save and except as concerns applicable laws of the Province of Saskatchewan concerning title to and transfer of mineral claims, this Agreement shall be interpreted and construed in accordance with the laws of the Province of British Columbia and the parties agree to attorn to the courts thereof.
 
  8.5 
All dollar figures in this Agreement are given in valid currency of Canada, unless otherwise specified.
 
  8.6 
This Agreement may be executed by facsimile and in counterpart.
 
  8.7   
All amendments to this Agreement must be in writing and signed by all of the parties hereto.
 
  8.8 
The interests, rights and obligations of the parties herein may not be assigned, sold, transferred or otherwise conveyed without the express written consent of the parties hereto.
 
  8.9   
The parties hereto acknowledge that CD Farber Law Corp. represents Entourage in the preparation and negotiation of this Agreement and United Carina has been advised to seek independent legal advice.
 
    8.9.1     
The term of this Agreement shall be for a period of five (5) years at which time this Agreement, and the Option granted hereunder, shall terminate if the Option Exercise Price has not been paid.

If the above terms and conditions accurately record your understanding of our agreement, please so acknowledge by signing a copy of this Agreement in the space provided below turning the same to us at your earliest convenience. Upon your execution thereof, this Agreement will constitute a legal and binding agreement subject to its terms.

The terms of the Agreement above are hereby read, understood, acknowledged and accepted by the undersigned effective the ____ day of ______________ , 2005.

ENTOURAGE MINING LTD.

/s/“Gregory F. Kennedy”
Gregory F. Kennedy
Authorized Signatory


7

UNITED CARINA RESOURCES CORP.

"Rick Walker"

_________________________________

Authorized Signatory


8

SCHEDULE “A”

Claim  Number  Area  Status 
       
Claim Block I  S-107478  3231 hectares  Registered 
Claim Block II  S-107479  5475 hectares  Registered 
Claim Block III  S-107480  5823 hectares  Registered 
Claim Block IV  S-108049  not available  Pending


EX-4.E 5 exhibit4e.htm AGREEMENT DATED APRIL 21, 2005 BETWEEN THE COMPANY AND UNITED CARINA RESOURCES CORP. Filed by Automated Filing Services Inc. (604) 609-0244 - Entourage Mining Ltd - Exhibit 4-E

1

MINERAL PROPERTY OPTION AGREEMENT

THIS AGREEMENT is dated the 21st day of April 2005.
BETWEEN:

Entourage Mining Ltd., a company duly incorporated in the Province of British Columbia, having an office at 614 – 475 Howe Street, Vancouver, British Columbia, V6C 2B3.
(“Entourage”)

OF THE FIRST PART

AND:
United Carina
Resources Corp., a company duly incorporated in the Province of Saskatchewan, having an office at Suite 105-111 Research Drive, Saskatoon Saskatchewan, S7N 3R2.
(“United Carina”)

OF THE SECOND PART

WHEREAS
A.     
Entourage has a sub-lease agreement with an option to purchase a 100% undivided beneficial interest in certain mineral property interests (commonly referred to as the Black Warrior Project) located on Mineral Ridge in the Walker Lane gold-silver belt of Esmeralda County, Nevada and which mineral property interests are more particularly described in Schedule “A” attached hereto which forms a material part of this Agreement; and
 
B.     
Entourage wishes to grant an option to United Carina to acquire a ten percent (10%) beneficial interest in and to the Black Warrior Project (as hereinafter defined), and United Carina wishes to acquire the same on the terms and conditions set forth herein.

NOW THEREFORE THIS AGREEMENT WITNESSES the terms and conditions of our agreement whereby United Carina Resources Corp. (“United Carina”) will participate as to 10% beneficial interest in and to a prospective gold, silver mineral property located at Mineral Ridge in the Walker Lane gold-silver belt of Esmeralda County, Nevada (as more particularly described in Schedule “A” hereto) from Entourage Mining Ltd.

In consideration of the sum of $10.00 paid by United Carina to Entourage, the receipt and sufficiency of which is hereby acknowledged, and for other good and valuable consideration, the parties hereto agree as follows:

1. GRANT OF OPTION
 
  1.1     
Entourage hereby grants to United Carina the option to acquire an undivided 10% beneficial right, title and interest in and to the Property in consideration of the following payments and work commitments by United Carina:


2

  (a)     
make a payment of $40,000 USD to Entourage upon Entourage executing its sub-lease option agreement to purchase a 100% beneficial interest in the Black Warrior Project for four hundred thousand ($400,000.00) USD; and
 
  (b)     
make $85,000.00 USD in work commitments or an amount equal to but not to exceed 10% of Entourage’s work expenditures on the property.

(subsections (a) and (b) above being hereinafter collectively referred to as the “Option Exercise Price”).

1.2      Upon payment of the Option Exercise Price in section 1.1 above, the Option will be deemed to have been exercised by United Carina and Entourage agrees to make any and all efforts to register the interest of United Carina in the Property.
 
2.      REPRESENTATIONS AND WARRANTIES
 
  2.1      United Carina represents and warrants to Entourage that:
 
    (a)     
United Carina Resources Corp. was duly incorporated under the laws of the Province of Saskatchewan, is validly subsisting and in good standing under the laws of the Province of Saskatchewan, and has all requisite power and capacity to carry out its obligations under this Agreement;
 
    (b)     
the execution and delivery of this Agreement and the performance by United Carina of its obligations hereunder does not and will not conflict with, and does not and will not result in a breach of, or constitute a default under, any of the terms of its incorporating documents or any agreement or instrument to which United Carina is a party;
 
    (c)     
this Agreement has been or will be authorized by all necessary corporate action on the part of United Carina;
 
    (d)     
United Carina is in good standing with all regulatory and statutory bodies that have jurisdiction over its affairs and will remain in good standing with all relevant regulatory and statutory bodies from the term of this Agreement;
 
    (e)     
There are no actions, suits, proceedings or investigations in progress, pending or, to the knowledge of United Carina and its directors and officers, threatened, against or affecting United Carina, at law or in equity, before any court, arbitrator, regulatory body or federal, provincial, state, municipal or regional government or governmental authority, including any department, commission, board, bureau, administrative agency or similar body, domestic or foreign, which may materially adversely affect United Carina or its financial condition or any other action taken or to be taken by United Carina pursuant to or in connection with this Agreement;
 
    (f)     
There is no adverse material information with respect to United Carina that has not been generally disclosed;
 
    (g)     
During the period between the execution of this Agreement and Closing, the business affairs of United Carina will be conducted in a commercially reasonable manner and all reasonably necessary efforts shall be made to preserve intact the business of United Carina, its relationships with third parties, and the services of


3

      its existing officers, employees, and directors.

  2.2      Entourage represents and warrants to United Carina that:
 
    (a)     
Entourage has a sub-lease agreement with an option to purchase a 100% undivided beneficial interest in Property including registered title (subject to a net smelter royalty (the “Royalty) as described herein) and that all sub-lease and leasehold payments have been made and are in good standing;
 
    (b)     
entering into this Agreement does not and will not conflict with, and does not and will not result in a breach of, any agreement or instrument to which Entourage is a party;
 
    (c)     
Entourage has due and sufficient right and authority to enter into this Agreement in accordance with this Agreement and this Agreement has been or will be authorized by all necessary action on the part of Entourage;
 
    (d)     
the exploration cost of the first two years expenditures will amount to eight hundred fifty thousand ($850,000.00) USD;
 
    (e)     
Entourage will act as Operator of the Property during the term of this Agreement and will carry out its work and obligations as Operator in a workmanlike fashion, in accordance with industry standards including industry standards for any remedial or environmental or reclamation work to be completed on the Property.
 
  2.3     
Entourage represents and warrants to United Carina that Entourage has a sub-lease agreement with Goodsprings Development Corp. (“GDC”), and that GDC has a master lease agreement with Apex 76 Deep Mines Co. (“Apex”), both Nevada corporations; both lease agreements terminate upon Entourage paying an aggregate consideration of $400,000 to Goodsprings Development Corp.; as well, Entourage warrants and represents that the Black Warrior Project has a Net Smelter Royalty (the”NSR”or “Royalty”) payable to Goodsprings Development Corp. and this Royalty is herein fully described in Schedule “B” of this Agreement.
 
3.     
COVENANTS OF UNITED CARINA
 
  3.1     
United Carina covenants and agrees with Entourage that:
 
    (a)     
United Carina will ensure that any disclosure documents will constitute full, true and plain disclosure of all material facts relating to United Carina and that it will acquire necessary TSX Venture approval as required under applicable securities laws; and
 
    (b)     
United Carina will maintain its status as a reporting issuer under the securities laws of Saskatchewan and will continue to be in compliance with its obligations under any and all securities regulators as necessary in its jurisdiction.


4

4.     
PAYMENT OF FUNDS TO ENTOURAGE
 
  4.1     
The payments of $85,000 or 10% of total work commitments, as the case may be, will be made on a quarterly basis as to 10% of Entourage’s expenditures on the project in the quarter, with the first payment to be made June 30, 2005 and payments to be made in each successive quarter for the term of this Agreement.
 
5.      CONDITIONS TO THE OBLIGATIONS OF UNITED CARINA
 
  5.1      The obligations of United Carina herein are expressly subject to satisfactory due diligence investigations of Entourage and the Property; such due diligence having been completed by Entourage prior to the signing this Agreement.
 
6.      RIGHTS AND OBLIGATIONS OF THE PARTIES
 
  6.1     
Upon execution of this Agreement, United Carina shall take all reasonable steps to:
 
    (a)     
gain, prior to Closing, such approvals to this Agreement as may be required from United Carina, its shareholders and from regulatory and statutory authorities having jurisdiction (if any);
 
    (b)     
at any time prior to Closing, not do or permit to be done any act or thing which would or might in any way adversely affect the rights of Entourage hereunder; and
 
    (c)     
provide to Entourage and its designated representatives (including legal counsel) any and all reasonably requested agreements, documents, records, data and files (in written or electronic form) relating to United Carina which are in the care, control and possession of United Carina.
 
  6.3     
Upon execution of this Agreement, Entourage shall take all reasonable steps to:
 
    (a)     
at any time prior to Closing, not do or permit to be done any act or thing which would or might in any way adversely affect the rights of United Carina hereunder;
 
    (b)     
ensure that United Carina (through its ownership of an interest in the Property) will have, upon Closing, exclusive and quiet possession of its interest in the Property, without the occupation of the same or any part thereof by any other person other than any person described in the master and sub-lease agreements described herein; and
 
    (c)     
provide to United Carina and its designated representatives (including legal counsel) any and all reasonably requested agreements, documents, records, data and files (in written or electronic form) relating to the Property which are in the care, control and possession of Entourage.
 
  6.4     
This Agreement is an option only. Nothing in this Agreement, until Closing, will be deemed to create between the parties hereto a joint venture, partnership or other form of relationship.
 
7.      CLOSING
 
  7.1     
The closing of the exercise of the Option to acquire a ten (10%) percent interest in the Property (the “Closing”) shall occur within thirty (30) days of the date on which United


5

   
Carina provides notice to Entourage, in writing, that it has agreed to the terms of the Option Exercise Price in section 1.1.
     
  7.2     
Upon Closing and after Entourage has completed the terms of its sub-lease with Goodsprings Development Corp. and paid the outstanding aggregate $400,000.00 property purchase price, Entourage shall complete any and all filings with the State of Nevada, and any regulatory bodies having jurisdiction thereof, necessary to transfer registered title to 10 (10%) percent of the Property to United Carina.
 
  7.3     
Upon Closing, the parties hereto, and any other parties with an interest in the Property, shall enter into a joint venture agreement by which their future exploration and development of the Property will be governed. The terms of this joint venture agreement will require that each party to it contribute, pro-rata according to their interest in the Property, to future expenditures and work on the Property.
 
8.     
MISCELLANEOUS
 
  8.1     
Any notice to be required or permitted hereunder will be in writing and delivered by hand delivery, facsimile transmission, or prepaid registered mail addressed to the party entitled to receive the same, or delivered to such party at the address specified below, or to such other address as either party may give to the other for that purpose. The date of receipt of any notice, demand or other communication hereunder will be the date of delivery if delivered, the date of transmission if sent by facsimile, or, if given by registered mail as aforesaid, will be the date on which the notice, demand or other communication is actually received by the addressee.
 
   
If to Entourage: Fax: 604-669-4368
 
   
If to United Carina: Fax: 306-244-0042
 
  8.2     
This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, successors and permitted assigns.
 
  8.3     
Each of the parties hereto agrees that it shall be responsible for its own legal expenses and disbursements relating to this Agreement.
 
  8.4     
Save and except as concerns applicable laws of the State of Nevada concerning title to and transfer of mineral claims, this Agreement shall be interpreted and construed in accordance with the laws of the Province of British Columbia and the parties agree to attorn to the courts thereof.
 
  8.5     
All dollar figures in this Agreement are given in valid currency of the United States, unless otherwise specified.
 
  8.6      This Agreement may be executed by facsimile and in counterpart.


6

  8.7 
All amendments to this Agreement must be in writing and signed by all of the parties hereto.
     
  8.8 
The interests, rights and obligations of the parties herein may not be assigned, sold, transferred or otherwise conveyed without the express written consent of the parties hereto.
 
  8.9 
The parties hereto acknowledge that CD Farber Law Corp. represents Entourage in the preparation and negotiation of this Agreement and United Carina has been advised to seek independent legal advice.
 
    8.9.1
The term of this Agreement shall be for a period of five (5) years at which time this Agreement, and the Option granted hereunder, shall terminate if the Option Exercise Price has not been paid.

If the above terms and conditions accurately record your understanding of our agreement, please so acknowledge by signing a copy of this Agreement in the space provided below turning the same to us at your earliest convenience. Upon your execution thereof, this Agreement will constitute a legal and binding agreement subject to its terms.
The terms of the Agreement above are hereby read, understood, acknowledged and accepted by the undersigned effective the 21st day of April, 2005.

ENTOURAGE MINING LTD.

/s/“Gregory F. Kennedy”
Gregory F. Kennedy
Authorized Signatory

UNITED CARINA RESOURCES CORP.

/s/ Urban Casavant
___________________________________
Authorized Signatory


7

SCHEDULE “A”

A. Patented Mining Claims
   
  Black Warrior patented claim USMS 40 and Sunrise USMS 41 in Section 31&32, T. 1 S., R. 39 E., MDB&M, Esmeralda County, Nevada.

APN 000-006-14
B. Unpatented Mining Claims:

Claim Name:

BW1 to BW5
BWX1 to BWX4

BLM NMC Nos.

773255-58, 789771
801552-555

Esmeralda County
Assessor’s Parcel No.000-006-14

Table of Claims
CLAIM NAME/
NUMBER
AREA
ha 
TOWNSHIP RANGE SECTION LOCATION
DATE
CP1  8.36  1S 39E 2,11   
CP2  8.36  40N 51E 2,11   
CP3  8.36  40N 51E  
CP4  8.36  40N 51E  
CP5  8.36  40N 51E  
CP6  8.36  40N 51E  
CP7  8.36  40N 51E  
CP8  8.36  40N 51E  
CP9  8.36  40N 51E  
CP10  8.36  40N 51E  
CP11  8.36  40N 51E  
CP12  8.36  40N 51E  
CP13  8.36  40N 51E  
CP14  8.36  40N 51E  
CP15  8.36  40N 51E  
CP16  8.36  40N 51E  
CP17  8.36  40N 51E  
CP18  8.36  40N 51E  
CP19  8.36  41N 51E 35   
CP20  8.36  41N 51E 35   
CP21  8.36  41N 51E 35   
CP22  8.36  41N 51E 35   
CP23  8.36  40N 51E 11   
CP24  8.36  40N 51E 11   
CP25  8.36  40N 51E 11   
CP26  8.36  40N 51E 11   
CP27  8.36  40N 51E 12   
CP28  8.36  40N 51E 12   


8

CP29  8.36  40N 51E 12   
CP30  8.36  40N 51E 12   
CP31  8.36  40N 51E 1,12   
CP32  8.36  40N 51E 1,12   
CP33  8.36  40N 51E  
CP34  8.36  40N 51E  
CP35  8.36  40N 51E  
CP36  8.36  40N 51E  
CP37  8.36  40N 51E  
CP38  8.36  40N 51E  
CP39  8.36  40N 51E  
CP40  8.36  40N 51E  
CP41  8.36  40N 51E  
CP42  8.36  40N 51E  
CP43  8.36  41N 51E 36   
CP44  8.36  41N 51E 36   
CP45  8.36  41N 51E 36   
CP46  8.36  41N 51E 36   
CP47  8.36  41N 51E 35,36   
CP48  8.36  41N 51E 36   
CP49  8.36  41N 51E 36,35   
CP50  8.36  41N 51E 36   
CP51  8.36  41N 51E 36,35   
CP52  8.36  41N 51E 36   
CP53  8.36  41N 51E 35,36,25,26   
CP54  8.36  41N 51E 25,36   
CP55  8.36  41N 51E 25,26   
CP56  8.36  41N 51E 25   
CP57  8.36  40N 51E  
CP58  8.36  40N 51E  
CP59  8.36  40N 51E  
CP60  8.36  40N 51E  
CP61  8.36  40N 51E  
           
CP62  8.36  40N 51E  
CP63  8.36  41N 51E 35   
CP64  8.36  41N 51E 35   
CP76  8.36  40N 51E 1,12   
CP77  8.36  40N 51E 1,12   
CP78  8.36  40N 51E 1,12   


Schedule “B”

The Net Smelter Royalty or Production Royaly Terms and Conditions

The following “Production Royalty” terms and conditions have been set out in the sublease agreement between Entourage USA Inc. (a wholly owned subsidiary of Entourage Mining Ltd.) and Goodsprings Development Corp. and the general terms and conditions have been paraphrased for purposes of this Agreement.

Production Royalty. Lessee shall pay to Owner a production royalty equal to three percent (3%) of the Net Smelter Returns from the production or sale of Minerals from the Property. The Lessee shall pay the Royalty within one month after the last day of each month during which Lessee sells or ships any Minerals, materials or ores. Lessee shall have the option to purchase one third of the Royalty representing a one percent (1%) Net Smelter Return Royalty, for one million dollars ($1,000,000.00), in accordance with the terms of the conveyance to be executed and delivered in accordance with the terms set out in the “Sub-Lease”. Lessee may exercise its option to purchase such part of the Royalty at any time during the term of this Agreement.


EX-4.F 6 exhibit4f.htm AGREEMENT DATED APRIL 21, 2005 BETWEEN THE COMPANY AND CM KM DIAMON DS, INC. Filed by Automated Filing Services Inc. (604) 609-0244 - Entourage Mining Ltd - Exhibit 4-F

1

MINERAL PROPERTY OPTION AGREEMENT

THIS AGREEMENT is dated the 21st day of April 2005.

BETWEEN:

Entourage Mining Ltd., a company duly incorporated in the Province of British Columbia, having an office at 614 – 475 Howe Street, Vancouver, British Columbia, V6C 2B3.
(“Entourage”)

OF THE FIRST PART

AND:


CMKM Diamonds, Inc.
, a company duly incorporated in the State of Nevada, having an office at 5375 Procyon St., Suite 101, Las Vegas, NV, 89118.
(“CMKM”)

OF THE SECOND PART

WHEREAS

A.     
Entourage has a sub-lease agreement with an option to purchase a 100% undivided beneficial interest in certain mineral property interests (commonly referred to as the Black Warrior Project) located at Mineral Ridge in the Walker Lane gold-silver belt of Esmeralda County, Nevada and which mineral property interests are more particularly described in Schedule “A” attached hereto which forms a material part of this Agreement; and
 
B.     
Entourage wishes to grant an option to CMKM to acquire a ten percent (10%) beneficial interest in and to the Black Warrior Project (as hereinafter defined), and CMKM wishes to acquire the same on the terms and conditions set forth herein.

NOW THEREFORE THIS AGREEMENT WITNESSES the terms and conditions of our agreement whereby CMKM Diamonds, Inc. (CMKM) will participate as to 10% beneficial interest in and to a prospective gold, silver mineral property located at Mineral Ridge in the Walker Lane gold-silver belt of Esmeralda County, Nevada (as more particularly described in Schedule “A” hereto) from Entourage Mining Ltd.

In consideration of the sum of $10.00 paid by CMKM to Entourage, the receipt and sufficiency of which is hereby acknowledged, and for other good and valuable consideration, the parties hereto agree as follows:

1 GRANT OF OPTION 

  1.1     
Entourage hereby grants to CMKM the option to acquire an undivided 10% beneficial right, title and interest in and to the Property in consideration of the following payments and work commitments by CMKM:


2

    (a)     
make a payment of $40,000 USD to Entourage upon Entourage executing its sub-lease option agreement to purchase a 100% beneficial interest in the Black Warrior Project for four hundred thousand ($400,000.00) USD; and
 
    (b)     
make $85,000.00 USD in work commitments or an amount equal to but not to exceed 10% of Entourage’s work expenditures on the property.

(subsections (a) and (b) above being hereinafter collectively referred to as the “Option Exercise Price”).

  1.2     
Upon payment of the Option Exercise Price in section 1.1 above, the Option will be deemed to have been exercised by CMKM and Entourage agrees to make any and all efforts to register the interest of CMKM in the Property.
 
2.      REPRESENTATIONS AND WARRANTIES
 
  2.1      CMKM represents and warrants to Entourage that:
 
    (a)     
CMKM Diamonds, Inc. was duly incorporated under the laws of the State of Nevada, is validly subsisting and in good standing under the laws of the State of Nevada, and has all requisite power and capacity to carry out its obligations under this Agreement;
 
    (b)     
the execution and delivery of this Agreement and the performance by CMKM of its obligations hereunder does not and will not conflict with, and does not and will not result in a breach of, or constitute a default under, any of the terms of its incorporating documents or any agreement or instrument to which CMKM is a party;
 
    (c)     
this Agreement has been or will be authorized by all necessary corporate action on the part of CMKM;
 
    (d)     
CMKM is in good standing with all regulatory and statutory bodies that have jurisdiction over its affairs and will remain in good standing with all relevant regulatory and statutory bodies from the term of this Agreement;
 
    (e)     
There are no actions, suits, proceedings or investigations in progress, pending or, to the knowledge of CMKM and its directors and officers, threatened, against or affecting CMKM, at law or in equity, before any court, arbitrator, regulatory body or federal, provincial, state, municipal or regional government or governmental authority, including any department, commission, board, bureau, administrative agency or similar body, domestic or foreign, which may materially adversely affect CMKM or its financial condition or any other action taken or to be taken by CMKM pursuant to or in connection with this Agreement;
 
    (f)     
There is no adverse material information with respect to CMKM that has not been generally disclosed;
 
    (g)     
During the period between the execution of this Agreement and Closing, the business affairs of CMKM will be conducted in a commercially reasonable manner and all reasonably necessary efforts shall be made to preserve intact the business of CMKM, its relationships with third parties, and the services of its existing officers, employees, and directors.


3

  2.2     
Entourage represents and warrants to CMKM that:
 
    (a)     
Entourage has a sub-lease agreement with an option to purchase a 100% undivided beneficial interest in Property including registered title (subject to a net smelter royalty (the “Royalty) as described herein in Schedule “B” and forming part of this Agreement) and that all sub-lease and leasehold payments have been made and are in good standing;
 
    (b)     
entering into this Agreement does not and will not conflict with, and does not and will not result in a breach of, any agreement or instrument to which Entourage is a party;
 
    (c)     
Entourage has due and sufficient right and authority to enter into this Agreement in accordance with this Agreement and this Agreement has been or will be authorized by all necessary action on the part of Entourage;
 
    (d)     
the exploration cost of the first two years expenditures will amount to eight hundred fifty thousand ($850,000.00) USD;
 
    (e)     
Entourage will act as Operator of the Property during the term of this Agreement and will carry out its work and obligations as Operator in a workmanlike fashion, in accordance with industry standards including industry standards for any remedial or environmental or reclamation work to be completed on the Property.
 
  2.3     
Entourage represents and warrants to CMKM that Entourage has a sub-lease agreement with Goodsprings Development Corp. (“GDC”), and that GDC has a master lease agreement with Apex 76 Deep Mines Co. (“Apex”), both Nevada corporations; both lease agreements terminate upon Entourage paying an aggregate consideration of $400,000 to Goodsprings Development Corp.; as well, Entourage warrants and represents that the Black Warrior Project has a Net Smelter Royalty (the “NSR” or “Royalty”) payable to Goodsprings Development Corp. and this Royalty is herein fully described in Schedule “B” of this Agreement.
 
3.     
COVENANTS OF CMKM CARINA
 
  3.1     
CMKM covenants and agrees with Entourage that:
 
    (a)     
CMKM will ensure that any disclosure documents will constitute full, true and plain disclosure of all material facts relating to CMKM and that it will acquire, if necessary, approval as required under applicable securities laws; and
 
    (b)     
CMKM will continue to be in compliance with its obligations under any and all securities regulators as necessary in its jurisdiction.
 
4.     
PAYMENT OF FUNDS TO ENTOURAGE
 
  4.1     
The payments of $85,000 or 10% of total work commitments, as the case may be, will be made on a quarterly basis as to 10% of Entourage’s expenditures on the project in the


4

    quarter, with the first payment to be made June 30, 2005 and payments to be made in each successive quarter for the term of this Agreement.

5.      CONDITIONS TO THE OBLIGATIONS OF CMKM
 
  5.1     
The obligations of CMKM herein are expressly subject to satisfactory due diligence investigations of Entourage and the Property; such due diligence having been completed by Entourage prior to the signing this Agreement.
 
6.     
RIGHTS AND OBLIGATIONS OF THE PARTIES
 
  6.1     
Upon execution of this Agreement, CMKM shall take all reasonable steps to:
 
    (a)     
gain, prior to Closing, such approvals to this Agreement as may be required from CMKM, its shareholders and from regulatory and statutory authorities having jurisdiction (if any);
 
    (b)     
at any time prior to Closing, not do or permit to be done any act or thing which would or might in any way adversely affect the rights of Entourage hereunder; and
 
    (c)     
provide to Entourage and its designated representatives (including legal counsel) any and all reasonably requested agreements, documents, records, data and files (in written or electronic form) relating to CMKM which are in the care, control and possession of CMKM.
 
  6.3     
Upon execution of this Agreement, Entourage shall take all reasonable steps to:
 
    (a)     
at any time prior to Closing, not do or permit to be done any act or thing which would or might in any way adversely affect the rights of CMKM hereunder;
 
    (b)     
ensure that CMKM (through its ownership of an interest in the Property) will have, upon Closing, exclusive and quiet possession of its interest in the Property, without the occupation of the same or any part thereof by any other person other than any person described in the master and sub-lease agreements described herein; and
 
    (c)     
provide to CMKM and its designated representatives (including legal counsel) any and all reasonably requested agreements, documents, records, data and files (in written or electronic form) relating to the Property which are in the care, control and possession of Entourage.
 
  6.4     
This Agreement is an option only. Nothing in this Agreement, until Closing, will be deemed to create between the parties hereto a joint venture, partnership or other form of relationship.
 
7.      CLOSING
 
  7.1     
The closing of the exercise of the Option to acquire a ten (10%) percent interest in the Property (the “Closing”) shall occur within thirty (30) days of the date on which CMKM provides notice to Entourage, in writing, that it has agreed to the terms of the Option Exercise Price in section 1.1.


5

  7.2     
Upon Closing and after Entourage has completed the terms of its sub-lease with Goodsprings Development Corp. and paid the outstanding aggregate $400,000.00 property purchase price, Entourage shall complete any and all filings with the State of Nevada, and any regulatory bodies having jurisdiction thereof, necessary to transfer registered title to 10 (10%) percent of the Property to CMKM.
 
  7.3     
Upon Closing, the parties hereto, and any other parties with an interest in the Property, shall enter into a joint venture agreement by which their future exploration and development of the Property will be governed. The terms of this joint venture agreement will require that each party to it contribute, pro-rata according to their interest in the Property, to future expenditures and work on the Property.
 
8.     
MISCELLANEOUS
 
  8.1     
Any notice to be required or permitted hereunder will be in writing and delivered by hand delivery, facsimile transmission, or prepaid registered mail addressed to the party entitled to receive the same, or delivered to such party at the address specified below, or to such other address as either party may give to the other for that purpose. The date of receipt of any notice, demand or other communication hereunder will be the date of delivery if delivered, the date of transmission if sent by facsimile, or, if given by registered mail as aforesaid, will be the date on which the notice, demand or other communication is actually received by the addressee.
 
   
If to Entourage: Fax: 604-669-4368
   
If to CMKM: Fax : 702-247-1307
 
  8.2     
This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, successors and permitted assigns.
 
  8.3     
Each of the parties hereto agrees that it shall be responsible for its own legal expenses and disbursements relating to this Agreement.
 
  8.4     
Save and except as concerns applicable laws of the State of Nevada concerning title to and transfer of mineral claims, this Agreement shall be interpreted and construed in accordance with the laws of the Province of British Columbia and the parties agree to attorn to the courts thereof.
 
  8.5     
All dollar figures in this Agreement are given in valid currency of the United States, unless otherwise specified.
 
  8.6     
This Agreement may be executed by facsimile and in counterpart.
 
  8.7     
All amendments to this Agreement must be in writing and signed by all of the parties hereto.


6

  8.8
The interests, rights and obligations of the parties herein may not be assigned, sold, transferred or otherwise conveyed without the express written consent of the parties hereto.
 
  8.9
The parties hereto acknowledge that CD Farber Law Corp. represents Entourage in the preparation and negotiation of this Agreement and CMKM has been advised to seek independent legal advice.
 
    8.9.1
The term of this Agreement shall be for a period of five (5) years at which time this Agreement, and the Option granted hereunder, shall terminate if the Option Exercise Price has not been paid.

If the above terms and conditions accurately record your understanding of our agreement, please so acknowledge by signing a copy of this Agreement in the space provided below turning the same to us at your earliest convenience. Upon your execution thereof, this Agreement will constitute a legal and binding agreement subject to its terms.
The terms of the Agreement above are hereby read, understood, acknowledged and accepted by the undersigned effective the 21st day of April, 2005.

ENTOURAGE MINING LTD.

 

/s/“Gregory F. Kennedy”
Gregory F. Kennedy
Authorized Signatory

CMKM DIAMONDS, INC..

/s/ "Urban Casavant"
___________________________________
Authorized Signatory


7

SCHEDULE “A”

A.     
Patented Mining Claims
 
 
Black Warrior patented claim USMS 40 and Sunrise USMS 41 in Section 31&32, T. 1 S., R. 39 E., MDB&M, Esmeralda County, Nevada.
 
APN  000-006-14 
B.  Unpatented Mining Claims: 

Claim Name:

BW1 to BW5
BWX1 to BWX4

BLM NMC Nos.

773255-58, 789771
801552-555

Esmeralda County
Assessor’s Parcel No.000-006-14

Table of Claims
CLAIM NAME/
NUMBER
AREA
ha
TOWNSHIP RANGE SECTION LOCATION
DATE
CP1  8.36  1S 39E 2,11   
CP2  8.36  40N 51E 2,11   
CP3  8.36  40N 51E  
CP4  8.36  40N 51E  
CP5  8.36  40N 51E  
CP6  8.36  40N 51E  
CP7  8.36  40N 51E  
CP8  8.36  40N 51E  
CP9  8.36  40N 51E  
CP10  8.36  40N 51E  
CP11  8.36  40N 51E  
CP12  8.36  40N 51E  
CP13  8.36  40N 51E  
CP14  8.36  40N 51E  
CP15  8.36  40N 51E  
CP16  8.36  40N 51E  
CP17  8.36  40N 51E  
CP18  8.36  40N 51E  
CP19  8.36  41N 51E 35   
CP20  8.36  41N 51E 35   
CP21  8.36  41N 51E 35   
CP22  8.36  41N 51E 35   
CP23  8.36  40N 51E 11   
CP24  8.36  40N 51E 11   
CP25  8.36  40N 51E 11   
CP26  8.36  40N 51E 11   
CP27  8.36  40N 51E 12   
CP28  8.36  40N 51E 12   


8

CP29  8.36  40N 51E 12   
CP30  8.36  40N 51E 12   
CP31  8.36  40N 51E 1,12   
CP32  8.36  40N 51E 1,12   
CP33  8.36  40N 51E  
CP34  8.36  40N 51E  
CP35  8.36  40N 51E  
CP36  8.36  40N 51E  
CP37  8.36  40N 51E  
CP38  8.36  40N 51E  
CP39  8.36  40N 51E  
CP40  8.36  40N 51E  
CP41  8.36  40N 51E  
CP42  8.36  40N 51E  
CP43  8.36  41N 51E 36   
CP44  8.36  41N 51E 36   
CP45  8.36  41N 51E 36   
CP46  8.36  41N 51E 36   
CP47  8.36  41N 51E 35,36   
CP48  8.36  41N 51E 36   
CP49  8.36  41N 51E 36,35   
CP50  8.36  41N 51E 36   
CP51  8.36  41N 51E 36,35   
CP52  8.36  41N 51E 36   
CP53  8.36  41N 51E 35,36,25,26   
CP54  8.36  41N 51E 25,36   
CP55  8.36  41N 51E 25,26   
CP56  8.36  41N 51E 25   
CP57  8.36  40N 51E  
CP58  8.36  40N 51E  
CP59  8.36  40N 51E  
CP60  8.36  40N 51E  
CP61  8.36  40N 51E  
           
CP62  8.36  40N 51E  
CP63  8.36  41N 51E 35   
CP64  8.36  41N 51E 35   
CP76  8.36  40N 51E 1,12   
CP77  8.36  40N 51E 1,12   
CP78  8.36  40N 51E 1,12   


9

Schedule “B”
The Net Smelter Royalty or Production Royaly Terms and Conditions

The following “Production Royalty” terms and conditions have been set out in the sublease agreement between Entourage USA Inc. (a wholly owned subsidiary of Entourage Mining Ltd.) and Goodsprings Development Corp. and the general terms and conditions have been paraphrased for purposes of this Agreement.

Production Royalty. Lessee shall pay to Owner a production royalty equal to three percent (3%) of the Net Smelter Returns from the production or sale of Minerals from the Property. The Lessee shall pay the Royalty within one month after the last day of each month during which Lessee sells or ships any Minerals, materials or ores. Lessee shall have the option to purchase one third of the Royalty representing a one percent (1%) Net Smelter Return Royalty, for one million dollars ($1,000,000.00), in accordance with the terms of the conveyance to be executed and delivered in accordance with the terms set out in the “Sub-Lease”. Lessee may exercise its option to purchase such part of the Royalty at any time during the term of this Agreement.


EX-31.1 7 exhibit31-1.htm SECTION 302 CERTIFICATION OF THE CEO Filed by Automated Filing Services Inc. (604) 609-0244 - Entourage Mining Limited - Exhibit 31.1

Exhibit 31.1

CERTIFICATION

I, Gregory F. Kennedy, President and Chief Executive Officer of Entourage Mining Limited, certify that:

1.     
I have reviewed this annual report on Form 20-F of Entourage Mining Limited;
 
2.     
Based on my knowledge, this annual report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.     
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
 
4.     
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
 
 
a)     
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
 
b)     
designed such internal control over financial reporting, or caused such disclosure control and procedures to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
 
c)     
evaluated the effectiveness of the company's disclosure controls and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
 
d)     
disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
 
5.     
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): 
 
  (a)  all significant deficiencies and material weaknesses in the design or operation of internal  control over financial reporting which are reasonably likely to adversely affect the  company’s ability to record, process, summarize and reporting financial information; and 
 
  (b)  any fraud, whether or not material, that involves management or other employees who  have a significant role in the company’s internal control over financial reporting. 

Date: June 29, 2005 
 
/s/ Gregory F. Kennedy                    
Gregory F. Kennedy, President and C.E.O. 
(Principal Executive Officer) 


EX-31.2 8 exhibit31-2.htm SECTION 302 CERTIFICATION OF THE CFO Filed by Automated Filing Services Inc. (604) 609-0244 - Entourage Mining Limited - Exhibit 31.2

Exhibit 31.2

CERTIFICATION

I, Prabha Varshney, acting in the capacity of Chief Accounting Officer of Entourage Mining Limited, certify that:

1.     
I have reviewed this annual report on Form 20-F of Entourage Mining Limited;
 
2.     
Based on my knowledge, this annual report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.     
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
 
4.     
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
 
 
a)     
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
 
b)     
designed such internal control over financial reporting, or caused such disclosure control and procedures to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
 
c)     
evaluated the effectiveness of the company's disclosure controls and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
 
d)     
disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
 
5.     
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the company’s auditors and the  audit committee of the company’s board of directors (or persons performing the equivalent  functions): 
 
  (a) 
all significant deficiencies and material weaknesses in the design or operation of internal  control over financial reporting which are reasonably likely to adversely affect the  company’s ability to record, process, summarize and reporting financial information; and 
 
  (b) 
any fraud, whether or not material, that involves management or other employees who  have a significant role in the company’s internal control over financial reporting. 

Date: June 29, 2005

/s/ Prabha Varshney              
Prabha Varshney, Chief Accounting Officer
(Principal Accounting Officer)


EX-32.1 9 exhibit32-1.htm SECTION 906 CERTIFICATION OF THE CEO Filed by Automated Filing Services Inc. (604) 609-0244 - Entourage Mining Limited - Exhibit 32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Entourage Mining Limited (the “Company”) on Form 20-F for the period ended December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1.      The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
2.      The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
Date: June 29, 2005 
 
/s/ Gregory F. Kennedy               
Gregory F. Kennedy, President and C.E.O. 
(Principal Executive Officer) 


EX-32.2 10 exhibit32-2.htm SECTION 906 CERTIFICATION OF THE CFO Filed by Automated Filing Services Inc. (604) 609-0244 - Entourage Mining Limited - Exhibit 32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Entourage Mining Limited (the “Company”) on Form 20-F for the period ended December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1.      The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
2.      The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
Date: June 29, 2005 
 
/s/ Prabha Varshney                
Prabha Varshney, Chief Accounting Officer 
(Principal Financial Officer) 


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-----END PRIVACY-ENHANCED MESSAGE-----