8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

________________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): December 22, 2008

WITS BASIN PRECIOUS MINERALS INC.

(Exact Name of Registrant as Specified in Charter)

Minnesota (State or Other Jurisdiction of Incorporation) 1-12401 (Commission File Number) 84-1236619 (IRS Employer Identification No.)

80 South 8th Street, Suite 900 Minneapolis, Minnesota (Address of Principal Executive Offices)   55402-8773 (Zip Code)

612.349.5277

(Registrant’s telephone number, including area code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

On December 22, 2008, Wits Basin Precious Minerals Inc. (the “Registrant”) entered into Amendment No. 3 to Convertible Notes Purchase Agreement (“Amendment No. 3”) with China Gold, LLC, a Kansas limited liability company (“China Gold”).  Pursuant to Amendment No. 3, the parties consolidated that certain Amended and Restated Promissory Note dated November 10, 2008 in the principal amount of $9,800,000 and that certain Secured Promissory Note dated October 28, 2008 in the principal amount of $441,000, each issued by the Registrant to China Gold, into a Second Amended and Restated Promissory Note dated December 22, 2008 in the aggregate principal amount of $10,421,107.18 (the “Consolidated Note”), which reflected the outstanding principal and interest under the existing notes.  Pursuant to the Consolidated Note, the Registrant received an extension on the maturity dates relating to the prior notes from December 31, 2008 to February 15, 2010.  The Consolidated Note accrues interest rate is 12.25% per annum with the principal and interest due on demand at any time on or after February 15, 2010.  The Amended and Restated Promissory Note and the Secured Promissory Note were filed as Exhibits 10.12 and 10.10, respectively, to Form 10-Q for the quarter ended September 30, 2008 filed with the Securities and Exchange Commission on November 14, 2008, and are incorporated herein by reference.

The parties entered into Amendment No. 3 to facilitate the terms of that certain Subscription Agreement dated November 17, 2008 by and between the Registrant and London Mining Plc (“London Mining”), which sets forth the terms of London Mining’s subscription into a joint venture entity formed with the Registrant to acquire and operate (through China Global Mining Resources Limited, a Hong Kong corporation and currently a wholly owned subsidiary of the Registrant (“CGMR HK”)) Nanjing Sudan Mining Co. Ltd and Maanshan Xiaonanshan Mining Co. Ltd, which are iron ore mining properties located in the People’s Republic of China (the “PRC Properties”).  The rights to acquire the PRC Properties are currently held in CGMR HK.  The Registrant disclosed its entry into the Subscription Agreement with London Mining in its Current Report on Form 8-K filed with the Securities and Exchange Commission on November 21, 2008, which disclosure is incorporated herein by reference.

Pursuant to Amendment No. 3, the Registrant will be required to make a prepayment to China Gold under the Consolidated Note in the approximate amount of $5,600,000 contemporaneously with the closing of the Subscription Agreement and related acquisition of the PRC Properties.  As required under the Subscription Agreement, and pursuant to Amendment No. 3, China Gold released its security interest in CGMR HK, and agreed to release its security interest in CGMR’s rights to acquire the PRC Properties subject to the prepayment being made.  Accordingly, the parties also entered into a Second Amended and Restated Pledge Agreement (the “Amended Pledge Agreement”) and an Amended and Restated Security Agreement (the “Amended Security Agreement”) modifying the terms of China Gold’s security as necessary to facilitate the terms of the Subscription Agreement.  Pursuant to the Amended Pledge Agreement, the Registrant provided China Gold a security interest in its equity in the joint venture entity with London Mining in lieu of the previously existing security interest in CGMR HK.  Pursuant to the Amended Security Agreement, the Registrant granted China Gold a security interest in an unsecured promissory note for $4.8 million to be received from the joint venture entity in lieu of its security interest in the rights to acquire the PRC Properties.

As consideration for entering into Amendment No. 3, the Consolidated Note, Amended Security Agreement and Amended Pledge Agreement, the Registrant agreed to reduce the exercise price of two five-year warrants to purchase up to an aggregate of 40,082,000 shares of Registrant’s common stock issued to China Gold to $0.075 per share (from $0.15 and $0.11 under the respective warrants).

Amendment No. 3, the Consolidated Note, the Amended Security Agreement and the Amended Pledge Agreement are filed as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, and are incorporated herein by reference.

 Item 9.01                      Financial Statements and Exhibits.

(d) Exhibits.

Exhibit	Description
10.1	Amendment No. 3 to Convertible Notes Purchase Agreement dated December 22, 2008 by and between Wits Basin Precious Minerals Inc and China Gold, LLC.
10.2	Second Amended and Restated Promissory Note of Wits Basin Precious Minerals Inc dated December 22, 2008.
10.3	Amended and Restated Security Agreement dated December 22, 2008 by and between Wits Basin Precious Minerals Inc and China Gold, LLC.
10.4	Second Amended and Restated Pledge Agreement dated December 22, 2008 by and between Wits Basin Precious Minerals Inc and China Gold, LLC.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Wits Basin Precious Minerals Inc.
Date: December 29, 2008	By:	/s/ Mark D. Dacko
		Mark D. Dacko
		Chief Financial Officer

EX-10.1

EXHIBIT 10.1

AMENDMENT NO. 3 TO

CONVERTIBLE NOTES PURCHASE AGREEMENT

This Amendment No. 3 to Convertible Notes Purchase Agreement (this “Amendment”) is entered into on this 22nd day of December, 2008, by and between Wits Basin Precious Minerals Inc., a Minnesota corporation (the “Issuer”), and China Gold, LLC, a Kansas limited liability company, its successors and assigns (together with its successors and assigns “Purchaser”), to amend, as hereinafter set forth, the terms of that certain Convertible Notes Purchase Agreement dated April 10, 2007 by and between Issuer and Purchaser, as previously amended on June 19, 2007 and November 10, 2008 (as amended, the “Purchase Agreement”).  Capitalized terms used in this Amendment and not otherwise defined herein shall have the same meanings as defined in the Purchase Agreement.

A.           Issuer and Purchaser entered into the Purchase Agreement on April 10, 2007, which contemplated the initial sale by Issuer, and purchase by Purchaser, of an aggregate minimum of $12,000,000 and an aggregate maximum of $25,000,000 in convertible notes of Issuer within 12 months of the Initial Closing Date.

B.           Pursuant to the Purchase Agreement, on April 10, 2007, Issuer sold, and Purchaser purchased, that certain Convertible Note in the amount of $3,000,000 (“Note 1”).  On May 7, 2007, Issuer sold, and Purchaser purchased, that certain Convertible Note in the amount of $2,000,000 (“Note 2”).  On June 19, 2007, Issuer sold and Purchaser purchased that certain Convertible Note in the aggregate amount of $4,000,000 (“Note 3”).  On July 9, 2007, Issuer sold, and Purchaser purchased, that certain Convertible Note in the amount of $800,000 (“Note 4”; collectively with Note 1, Note 2 and Note 3, the “Prior Notes”).

C.           To secure its obligations under the Prior Notes, Issuer entered into a Security Agreement with Purchaser dated June 19, 2007 (the “Security Agreement”), whereby Issuer granted Purchaser a security interest in all of the assets acquired by Issuer from the use of the proceeds from the sale of the Prior Notes.  Pursuant to the Purchase Agreement and Security Agreement, Issuer and certain of its subsidiaries further entered into the following agreements with Purchaser relating to such security:  (i) that certain Pledge Agreement dated as of April 10, 2007 by and between Purchaser and Issuer, as amended pursuant to that certain Amended and Restated Pledge Agreement dated February 7, 2008 by and between Purchaser and Issuer (as amended, the “Pledge Agreement”); (ii)  that certain Guaranty dated April 10, 2007 (the “Wits-China Guaranty”) of Wits-China Acquisition Corporation, a Minnesota corporation and wholly owned subsidiary of Issuer (“Wits-China”); (iii) that certain Guaranty dated February 7, 2008 (the “BVI Guaranty”) of China Global Mining Resources Limited, a British Virgin Islands corporation (registered number 1386052) and wholly owned subsidiary of Issuer (“Original BVI Co”); (iv) that certain Guaranty dated February 7, 2008 (the “HK Guaranty”) of China Global Mining Resources Limited, a Hong Kong corporation and wholly owned subsidiary of Issuer (“CGMR HK”); (v) that certain Subsidiary Security Agreement dated February 7, 2008 by and between Wits-China and Purchaser (the “Wits-China Subsidiary Security Agreement”); (vi) that certain Subsidiary Security Agreement dated February 7, 2008 by and between Original BVI Co and Purchaser (the “BVI Subsidiary Security Agreement”); and (vii) that certain Subsidiary Security Agreement dated February 7, 2008 by and between CGMR HK and Purchaser (the “HK Subsidiary Security Agreement”).  Collectively, the Security Agreement, Pledge Agreement, Wits-China Guaranty, BVI Guaranty, HK Guaranty, Wits-China Subsidiary Security Agreement, BVI Subsidiary Security Agreement and HK Subsidiary Security Agreement are referred to herein as the “Security Documents.”

D.           On November 10, 2008, Issuer and Purchaser cancelled the Prior Notes and Issuer issued Purchaser an Amended and Restated Promissory Note in the aggregate principal amount of $9,800,000 (the “Amended and Restated Note”), which, amongst other amendments to the terms of the Prior Notes, terminated the conversion feature of the Prior Notes and terminated certain Purchase Rights (as defined in the Purchase Agreement) provided to Purchaser.  In consideration thereof, Issuer issued Purchaser a five-year warrant to purchase up to 39,200,000 shares of the Issuer’s common stock, par value $0.01 per share, at an exercise price of $0.15 per share (the “First Warrant”).  As of the date hereof, the accrued and unpaid interest on the Amended and Restated Note is $171,930.86.

E.           On October 28, 2008, Purchaser loaned Issuer an additional $441,000 pursuant to the terms of that certain Promissory Note dated October 28, 2008 of Issuer in favor of Purchaser (the “Additional Note”), the payment obligations of which are secured by the Security Documents.  In consideration of the Additional Note, Issuer issued Purchaser a five-year warrant to purchase up to 882,000 shares of Issuer’s common stock at an exercise price of $0.11 per share (the “Second Warrant”; and collectively with the First Warrant, the “Warrants”).  As of the date hereof, the accrued and unpaid interest on the Additional Note is $7,762.59.

F.           Pursuant to the terms of that certain Subscription Agreement dated November 17, 2008 by and between London Mining Plc (“London Mining”) and Issuer (the “Subscription Agreement”), Issuer and London Mining have formed a joint venture entity incorporated in the British Virgin Islands under the name China Global Mining Resources (BVI) Limited (with registered number 1513743) (“CGMR BVI”), to acquire and operate certain mining properties in the People’s Republic of China operated through Maanshan Xiaonanshan Mining Co Limited, Nanjing Sudan Mining Co Ltd and Maanshan Zhaoyuan Mining Co Limited (collectively, the “PRC Properties”).  Issuer, through certain of its subsidiaries, currently holds the rights to acquire the PRC Properties (the “Rights”), and such Rights are subject to the security interest of Purchaser pursuant to the terms of the Security Agreement.  The transactions contemplated by Issuer and London Mining are hereinafter referred to as the “JV Transaction.”

G.           As a condition to the JV Transaction, Issuer is required to (i) consolidate the Rights in CGMR HK and transfer its equity interests in CGMR HK to CGMR BVI and (ii) restructure the terms of the Amended and Restated Note and the Additional Note provided by Purchaser to Issuer (collectively, the “Loans”), including without limitation (a) extending the Maturity Date (as defined in the Amended and Restated Note and Additional Note, respectively), (b) amending certain of the Security Documents to release Purchaser’s security interest in the Rights, the PRC Properties and Issuer’s equity interest in CGMR HK, and (c) release and terminate the HK Guaranty and the HK Subsidiary Security Agreement and (d) to permit the transfer to CGMR BVI of the equity interests in CGMR HK.

H.           Issuer and Purchaser wish to consolidate the Amended and Restated and Additional Note into a Second Amended and Restated Note (as defined below) in the aggregate principal amount of $10,241,000, with accrued and unpaid interest of $179,693.45 thereon as of the date hereof.  Contemporaneously with the closing of the JV Transaction, Issuer intends to make a prepayment of the Amended and Restated Note in the aggregate amount of $5,600,000.

I.           Issuer and Purchaser wish to amend the Purchase Agreement in the respects set forth herein to restructure the terms of the related agreements in a manner permitting Issuer to complete the JV Transaction.

Now, Therefore, in consideration of the foregoing facts and premises hereby made a part of this Agreement, the mutual promises hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

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Section 1.                      PREPAYMENT AND AMENDMENT OF NOTE

1.1           Amendment to Notes.  On the date of this Agreement, Issuer and Purchaser hereby cancel the Amended and Restated Note and Additional Note, and Issuer shall issue Purchaser a promissory note in the aggregate principal amount of $10,421,107.18 having a maturity date of February 15, 2010, in the form attached as Exhibit A (the “Second Amended and Restated Note”).  Together with the execution and delivery of this Amendment, Purchaser has delivered to Issuer the original Amended and Restated Note and Additional Note, each marked “Cancelled.”

1.2           Prepayment.  On the Effective Date (as defined below), Issuer, or another party at the direction of and on behalf of Issuer, shall make a prepayment of the Amended and Restated Note in the aggregate amount of $5,600,000 (the “Prepayment”), payable in cash or other immediately available funds.

1.3           Modification of Warrants.  In consideration of the terms hereof, on the Effective Date, Purchaser and Issuer shall modify the terms of the Warrants to reduce the Exercise Price (as defined in each of the Warrants) to $0.075 per share.  Upon the request of Purchaser, together with delivery of the Warrants, Issuer shall reissue to Purchaser modified warrant certificates reflecting the modified Exercise Price as set forth herein.

1.4           Effective Date.  Except with respect to the transactions contemplated in Sections 1.1 and 2.2, the Prepayment and the other transactions contemplated pursuant to this Amendment shall take place contemporaneously with the closing of the JV Transaction pursuant to the terms of the Subscription Agreement (as defined in the Subscription Agreement as the Completion Date) (the “Effective Date”).

Section 2.                      MODIFICATION AND/OR TERMINATION OF SECURITY INTERESTS

2.1           Amendment to Security Agreement.  Purchaser and Issuer amend and restate as of the Effective Date the terms of the Security Agreement, in the form attached hereto as Exhibit B (the “Amended and Restated Security Agreement”), to reflect the changes to the collateral subject to the Purchaser’s security interest from the date hereof.

2.2           Amendment to Pledge Agreement.  Purchaser and Issuer amend and restate as of the date of this Agreement the terms of the Pledge Agreement, in the form attached hereto as Exhibit C (the “Second Amended and Restated Pledge Agreement”), to reflect the release from Purchaser’s security interest of Issuer’s equity interest in CGMR HK and any other Collateral under the Pledge Agreement not forming Collateral under the Second Amended and Restated Pledge Agreement.

2.3           Release of Security.

1.      Effects of Amendments to Security Agreement and Pledge Agreement.  Purchaser hereby completely, fully and irrevocably releases, discharges and acquits, as of the Effective Date, Issuer from (i) the Pledge Agreement and (ii) subject to receipt of the Prepayment, the Security Agreement, in each case only to the extent not restated in the Second Amended and Restated Pledge Agreement and the Amended and Restated Security Agreement, respectively.

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2.      Release of CGMR HK Security Interests.  Subject to receipt of the Prepayment, Purchaser hereby completely, fully and irrevocably releases, discharges and acquits, as of the Effective Date, CGMR HK from (i) the HK Guaranty and (ii) the HK Subsidiary Security Agreement, and terminates the obligations of CGMR HK under the HK Guaranty and HK Subsidiary Security Agreement.  With the exception of the release of CGMR HK, nothing in this Section 2.3(2) shall operate to release Issuer or any other third party from Issuer’s continuing indebtedness under the Note or the remaining Security Documents.

3.      Release of Claims.

a.      CGMR HK hereby absolutely and unconditionally releases and forever discharges Purchaser and its officers, directors, agents, employees and other affiliates thereof, from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which CGMR HK has had, now has or has made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this release, whether such claims, demands and causes of action are matured or unmatured or known or unknown.

b.      Purchaser hereby absolutely and unconditionally releases and forever discharges CGMR HK and its officers, directors, agents and employees, from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which Purchaser has had, now has or has made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this release, whether such claims, demands and causes of action are matured or unmatured or known or unknown.

4.      Releases Irrevocable.  Upon execution of this Agreement, and subject to receipt of the Prepayment from or on behalf of the Issuer, Purchaser’s release of security interests as set forth in this Section 2.3 are irrevocable by Purchaser unless with the written consent of London Mining.  Purchaser acknowledges and agrees that the Prepayment may be made by the Issuer or London Mining (or such other person as London Mining directs) on behalf of the Issuer.

5.      Effect of Release.  Purchaser acknowledges, without limiting this Section 2.3, that the effect of this Section 2.3 includes the complete, full and irrevocable release from its security interest of the Issuer’s equity interests in CGMR HK, the Rights and any other interests in the PRC Properties such that on and from the Effective Date, Purchaser has no other security over any equity interests in (except with respect to the pledge of Issuer’s equity interest pursuant to the Second Amended and Restated Pledge Agreement) or the assets of, or otherwise in relation to, CGMR BVI and any of its subsidiary undertakings, from time to time other than that specified in Section 1 of the Amended and Restated Security Agreement.

6.      Further Actions; Authorization.  Purchaser agrees that it shall, from time to time, promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that Issuer or CGMR HK may reasonably request, in order to terminate or amend any security interest released or amended (as applicable) pursuant to the terms of this Section 2.  Purchaser by this Agreement authorizes Issuer and CGMR HK to file one or more financing, continuation or termination statements, and amendments thereto, relative to the related collateral and security interests.

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Section 3.                      CONSENTS AND WAIVERS

3.1           Access to Information.  Purchaser acknowledges that it (i) has been provided a copy of the Subscription Agreement dated November 17, 2008 by and between Issuer and London Mining setting forth the terms of London Mining’s investment in CGMR BVI, (ii) has been provided a form of the Shareholders’ Agreement to be entered into by and among Issuer, London Mining and CGMR BVI relating to certain governance and other terms and conditions applicable to CGMR BVI (the “Shareholders’ Agreement” and forms of the documents referenced in the Shareholders’ Agreement are collectively referred to herein as the “Provided JV Documents”) and (iii) has been afforded the opportunity to access full and complete information regarding the JV Transaction, including the opportunity to contact Issuer representatives concerning the JV Transaction, and has utilized such access to Purchaser’s satisfaction.

3.2           Consent, Waiver and Undertaking.  Purchaser hereby provides its consents under, and any required waivers and undertakings in respect of, pursuant to, the terms of the Purchase Agreement and the agreements referenced therein, including without limitation the Security Documents, the Pledge Agreement to the consummation by Issuer and the subsidiaries (as appropriate) of the JV Transaction on terms substantially similar to those set forth in the Provided JV Documents.  Without limitation, the consent, waiver and undertaking provided for herein shall include in particular the following:

1.      consent to the JV Transaction (provided there have been no amendments to the Provided JV Documents which materially effect the security to which the Purchaser has been granted under the Amended and Restated Security Agreement and the Second Amended and Restated Pledge Agreement) with respect to the negative covenants set forth in Section 4.4 of the Purchase Agreement;

2.      an acknowledgment and agreement that the JV Transaction (provided there have been no amendments to the Provided JV Documents which materially effect the security to which the Purchaser has been granted under the Amended and Restated Security Agreement and the Second Amended and Restated Pledge Agreement) does not constitute an Event of Default pursuant to Section 7.1 of the Purchase Agreement;

3.      an acknowledgment that any enforcement of its rights under the Second Amended and Restated Pledge Agreement pertaining to CGMR BVI will be subject to the terms of the Shareholders' Agreement between London Mining and the Issuer to be entered into on the date of London Mining's subscription into CGMR BVI;

4.      consent to the transfer by Issuer of its equity interest in CGMR HK to CGMR BVI pursuant to the terms of the JV Transaction;

5.      consent to the transfer by Original BVI Co of the Rights to Maanshan Global Mining Resources Limited, a corporation organized under the laws of the People’s Republic of China and a wholly owned subsidiary of Original BVI Co (“MGMR”), and the transfer by MGMR of the Rights to CGMR HK;

6.      consent to the change of the name of Original BVI Co.;

7.      consent to the acquisition of Issuer’s equity interest in CGMR BVI pursuant to the terms of the Shareholders’ Agreement by London Mining or a member of its Group (as defined in the Shareholders’ Agreement) or a third party under the “Come Along” provisions of the Shareholders’ Agreement with respect to the negative covenants set forth in Section 4.4 of the Purchase Agreement and an acknowledgment and agreement that any such sale would not constitute an Event of Default pursuant to Section 7.1 of the Purchase Agreement; and

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8.      an undertaking that if Purchaser elects to enforce any of its rights under the Amended and Restated Pledge Agreement it will enter into a Deed of Adherence in accordance with the terms of the Shareholders’ Agreement prior to the transfer of any equity interests in CGMR BVI from Issuer to Purchaser.

Section 4.                      MISCELLANEOUS

4.1           This Amendment shall be construed in connection with and as part of the Purchase Agreement, and, except as modified and expressly amended by this Amendment, all terms, conditions and covenants contained in the Purchase Agreement, are hereby ratified and shall be and remain in full force and effect.

4.2           Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this Amendment may refer to the Purchase Agreement without making specific reference to this Amendment, but nevertheless all such references shall include this Amendment, unless the context otherwise requires.

4.3           Purchaser and Issuer acknowledge and agree that CGMR BVI and its successors and assigns (collectively, the “Beneficiaries”) are expressly intended to be third-party beneficiaries to this Agreement, and that all provisions of this Agreement relating to each such Beneficiary are intended to inure to the benefit of such Beneficiary.  Each such party is entitled to any rights, interest or claims arising hereunder.

4.4           The description headings of the various sections or parts of this Amendment are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.

4.5           This Amendment shall be governed by and construed in accordance with Kansas law.

4.6           This Amendment may be executed in any number of counterparts, each executed counterpart constituting an original, but all together only one agreement.  Signature to this Amendment may be given by facsimile or other electronic transmission and such signatures shall be fully binding on the party sending the same.

[The remainder of this page is intentionally blank.  Signature page follows.]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above.

ISSUER:	WITS BASIN PRECIOUS MINERALS INC.,
	a Minnesota corporation
	By:	/s/ Mark D. Dacko
	Name:	Mark D. Dacko
	Title:	Chief Financial Officer
PURCHASER:	CHINA GOLD, LLC,
	a Kansas limited liability company
	By:	Pioneer Holdings, LLC
	Its:	Manager

By:	/s/ C. Andrew Martin
Name: C. Andrew Martin
Title:  Manager

CGMR HK:	CHINA GLOBAL MINING RESOURCES LTD
	a company registered under the laws of Hong Kong
	(with respect to Section 2.3 only)
	By:	/s/ Mark D. Dacko
	Name:	Mark D. Dacko
	Title:	Director

EX-10.2

EXHIBIT 10.2

NEITHER THIS CONVERTIBLE NOTE NOR THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION (TOGETHER, THE “SECURITIES LAWS”) AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR ENCUMBERED IN THE ABSENCE OF COMPLIANCE WITH SUCH SECURITIES LAWS AND UNTIL THE ISSUER THEREOF SHALL HAVE RECEIVED AN OPINION FROM COUNSEL ACCEPTABLE TO IT THAT THE PROPOSED DISPOSITION WILL NOT VIOLATE ANY APPLICABLE SECURITIES LAWS.  TRANSFER OF THIS CONVERTIBLE NOTE IS ALSO RESTRICTED BY THE CONVERTIBLE NOTES PURCHASE AGREEMENT REFERRED TO HEREIN.

THE PAYMENT AND PERFORMANCE OF THIS CONVERTIBLE NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN CONVERTIBLE NOTES PURCHASE AGREEMENT ENTERED INTO AS OF APRIL 10, 2007, AS AMENDED BY THAT CERTAIN AMENDMENT TO CONVERTIBLE NOTES PURCHASE AGREEMENT DATED JUNE 19, 2007, THAT CERTAIN AMENDMENT NO. 2 DATED NOVEMBER 10, 2008, AND THAT CERTAIN AMENDMENT NO. 3 DATED DECEMBER 22, 2008 BY THE HOLDER AND ISSUER.

CERTIFICATE NO: 1

SECOND AMENDED AND RESTATED PROMISSORY NOTE

$10,421,107.18 December 22, 2008

FOR VALUE RECEIVED, Wits Basin Precious Minerals Inc., a corporation organized and existing under the laws of the State of Minnesota (“Issuer”), hereby unconditionally promises to pay to the order of China Gold LLC, a Kansas limited liability company, or its successors and assigns (the “Holder”) on demand at any time on or after February 15, 2010 (the “Maturity Date”), the principal sum of up to Ten Million Four Hundred Twenty-One Thousand One Hundred Seven and 18/100 Dollars ($10,421,107.18) (the “Principal”), together with accrued and unpaid interest thereon, as provided herein and from the Prior Notes below until fully paid (the “Indebtedness”), all without relief from valuation or appraisement laws.

This Second Amended and Restated Promissory Note (the “Note”) is issued pursuant to that certain Convertible Notes Purchase Agreement dated as of April 10, 2007, as previously amended by that certain Amendment to Convertible Notes Purchase Agreement dated June 19, 2007, as further amended by that certain Amendment No. 2 to Convertible Notes Purchase Agreement on November 10, 2008, and as further amended by that certain Amendment No. 3 to Convertible Notes Purchase Agreement on the date hereof  (as amended, modified, or replace from time to time, the “Notes Purchase Agreement”).  Pursuant to that certain Amended and Restated Promissory Note dated November 11, 2008 (the “First Amended Note”), the Issuer and Holder amended and consolidated the following notes issued pursuant to the Notes Purchase Agreement:  (i) Convertible Promissory Note issued on April 10, 2007 in the principal amount of $3,000,000; (ii) Convertible Promissory Note issued on May 7, 2007 in the principal amount of $2,000,000; (iii) Convertible Promissory Note issued on June 19, 2007 in the principal amount of $4,000,000; and (iv) Convertible Promissory Note issued on July 9, 2007 in the principal amount of $800,000 (collectively, the “Prior Notes”).  Pursuant to this Note, the First Amended Note is consolidated with that certain Promissory Note dated October 28, 2008 in the principal amount of $441,000.  Holder has delivered the Prior Notes and First Amended Note to Issuer and they have been cancelled in their entirety.

1.           Payment of Principal and Interest.  Subject to acceleration or earlier payment as provided for elsewhere in this Note, the Notes Purchase Agreement or any of the other agreements, documents, and instruments relating to any of the Indebtedness or any security therefor that are required by the Notes Purchase Agreement to be executed and delivered to or for the benefit of Holder (collectively, together with this Note and the Notes Purchase Agreement, and as each have and may be amended from time to time, the “Investment Documents”), the principal balance of this Note, and any accrued and unpaid interest thereon, shall be due and payable upon Holder’s demand on or after the Maturity Date.   Issuer shall make all payments payable in cash under this Note in lawful money of the United States.  All payments paid by Issuer to Holder under this Note and under the other Investment Documents shall be applied in the following order of priority:  (a) to amounts, other than principal and interest, due to Holder pursuant to this Note for all costs of collection of any kind, including reasonable attorneys’ fees and expenses; (b) to accrued but unpaid interest on this Note; and (c) to the unpaid principal balance of this Note.  If Issuer makes any payment of principal, interest or other amounts upon the Indebtedness by check, draft, or other remittance, Holder shall not be deemed to have received such payment until Holder actually receives the payment instrument.

2.           Calculation of Interest.  Interest shall accrue on the outstanding principal balance at the end of each day on which any amount is outstanding under this Note at the rate of 12.25% (the “Interest Rate”) per annum.  Interest shall be calculated on a basis of the actual number of days elapsed over a year of 365 days, commencing as of the date hereof.

3.           Prepayment.  This Note may be prepaid in cash or other immediately available funds, in whole or in part, by Issuer at any time and from time to time, without premium or penalty (a “Prepayment”).

4.           Waiver.  Payment of principal and interest due under this Note shall be made without presentment or demand.  The Issuer and all others at any time liable directly or indirectly (including, without limitation, the Issuer, any co-makers, endorsers, sureties and guarantors, all of which are referred to herein as “Parties”), severally waive presentment, demand and protest, notice of protest, demand, and dishonor, and nonpayment of this Note, and all diligence in collection and agree to pay all costs of collection when incurred, including reasonable attorneys’ fees, and to perform and comply with each of the covenants, conditions, provisions, and agreements of the Issuer contained in every instrument now evidencing the Indebtedness.  No release by Holder of any security for payment of the Indebtedness or any modification or restructuring in respect of any lien or security interest held or at any time obtained or acquired by Holder for payment of such Indebtedness shall operate to release, discharge, impair or alter the liability of any Party liable at any time directly or indirectly for payment of such Indebtedness.

5.           Renewal and Modification.  Issuer further agrees that the Indebtedness may be from time to time, extended, renewed, modified, rearranged, or evidenced by one or more other notes or obligations in substitution for this Note and upon and for such term or terms agreed to by Issuer and Holder in writing, and with or without notice to other Parties.  Issuer agrees that upon and after such extension, renewal, modification, rearrangement, substitution, or other change in form of the Indebtedness, each of the other Parties shall remain liable in respect of the Indebtedness so renewed, extended, modified, rearranged, or otherwise evidenced in the same capacity and to the same extent as prior thereto.  No release or discharge (in whole or in part) of any Party hereto by Holder shall in any manner impair, release, discharge, or alter the liability of any other Party.

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6.           Events of Default.  Any one or more of the following events shall constitute an event of default (each, an “Event of Default”) under this Note: (a) Issuer fails to timely pay as and when due any monetary obligation under this Note in accordance with the terms hereof; (b) Issuer’s assignment for the benefit of creditors, or filing of a petition in bankruptcy or for reorganization or to effect a plan or arrangement with creditors; (c) Issuer’s application for, or voluntary permission of, the appointment of a receiver of trustee for any or all Company property; (d) any action or proceeding described in the foregoing paragraphs (b) or (c) is commenced against Issuer and such action or proceeding is not vacated within sixty (60) days of its commencement; (e) Issuer’s dissolution or liquidation; and (f) an event of default under any other Investment Document shall have occurred.

7.           Rights and Remedies.  Upon the occurrence, and during the continuation, of an Event of Default (a) all Indebtedness and all other amounts due and owing under this Note shall (at the option of Holder) immediately become due and payable without demand and without notice to Issuer, (b) Holder shall have all rights, powers and remedies set forth in the Investment Documents, as well as any and all rights and remedies available to it under any applicable law or as otherwise provided at law or in equity; and (c) Issuer shall pay to Holder, in addition to the sums stated above, the costs of collection, regardless of whether litigation is commenced, including reasonable attorneys’ fees.

Holder may employ an attorney to enforce its rights and remedies hereunder and Issuer hereby agrees to pay Holder’s reasonable attorneys’ fees and other reasonable expenses, including reasonable expenses relating to any assistance provided by Holder to Issuer in resolving such defaults and amounts incurred by Holder in exercising any of Holder’s rights and remedies upon an Event of Default.  Holder’s rights and remedies under this Note and the other Investment Documents shall be cumulative.  Holder shall have all other rights and remedies not inconsistent herewith as provided under the Uniform Commercial Code as in effect in the State of Kansas, or otherwise by law, or in equity.  No exercise by Holder of one right or remedy shall be deemed an election, and no waiver by Holder of any Event of Default shall be deemed a continuing waiver.  No delay by Holder shall constitute a waiver, election, or acquiescence by it.

8.           Revival and Reinstatement of Note.  To the extent that any payment to Holder or any payment or proceeds of any collateral received by Holder in reduction of the Indebtedness is subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, to Issuer (or Issuer’s successor) as a debtor-in-possession, or to a receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then the portion of the Indebtedness intended to have been satisfied by such payment or proceeds shall remain due and payable hereunder, be evidenced by this Note, and shall continue in full force and effect as if such payment or proceeds had never been received by Holder whether or not this Note has been marked “paid” or otherwise canceled or satisfied or has been delivered to Issuer, and in such event Issuer shall be immediately obligated to return the original Note to Holder and any marking of “paid” or other similar marking shall be of no force and effect.

9.           Authority.  Issuer warrants and represents that the persons or officers who are executing this Note and the other Investment Documents on behalf of Issuer have full right, power and authority to do so, and that this Note and the other Investment Documents constitute valid and binding documents, enforceable against Issuer in accordance with their terms, and that no other person, entity, or party is required to sign, approve, or consent to, this Note.

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10.           Governing Law; Consent to Forum.  This Note shall be governed by the laws of the State of Kansas without giving effect to any choice of law rules thereof; provided, however, that if any of the collateral securing the Indebtedness shall be located in any jurisdiction other than Kansas, the laws of such jurisdiction shall govern the method, manner and procedure for foreclosure of Holder’s security interest, lien or mortgage upon such collateral and the enforcement of Holder’s other remedies in respect of such collateral to the extent that the laws of such jurisdiction are different from or inconsistent with the laws of Kansas.  AS PART OF THE CONSIDERATION FOR NEW VALUE THIS DAY RECEIVED, ISSUER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE COURT LOCATED WITHIN JOHNSON COUNTY, KANSAS OR FEDERAL COURT IN THE DISTRICT OF KANSAS, AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF.  ISSUER WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE.  ISSUER FURTHER AGREES NOT TO ASSERT AGAINST HOLDER (EXCEPT BY WAY OF A DEFENSE OR COUNTERCLAIM IN A PROCEEDING INITIATED BY HOLDER) ANY CLAIM OR OTHER ASSERTION OF LIABILITY WITH RESPECT TO THIS NOTE, THE OTHER INVESTMENT DOCUMENTS, HOLDER’S CONDUCT OR OTHERWISE IN ANY JURISDICTION OTHER THAN THE FOREGOING JURISDICTIONS.

11.           WAIVER OF JURY TRIAL AND COUNTERCLAIMS.  TO THE FULLEST EXTENT PERMITTED BY LAW, AND AS SEPARATELY BARGAINED-FOR CONSIDERATION TO HOLDER, ISSUER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY (WHICH HOLDER ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR IN ANY COUNTERCLAIM OF ANY KIND ARISING OUT OF OR OTHERWISE RELATING TO THIS NOTE, THE INDEBTEDNESS, THE COLLATERAL SECURING THE INDEBTEDNESS, OR THE HOLDER’S CONDUCT IN RESPECT OF ANY OF THE FOREGOING.

12.           Transfer of Note.  Issuer shall not transfer any obligations hereunder without Holder’s prior written consent, which may be withheld in Holder’s sole and absolute discretion.  With the prior written consent of Issuer, which shall not be unreasonably withheld, conditioned, or delayed, Holder may participate, sell, assign, transfer or otherwise dispose of all or any portion of its interest in this Note (including Holder’s rights, title, interests, remedies, powers and duties hereunder) to a purchaser, participant, any syndicate, or any other Person (each, a “Note Purchaser”).  In connection with any such disposition (and thereafter), Holder may, with adequate safeguards of confidentiality in a manner satisfactory to Issuer, disclose any financial information Holder may have concerning Issuer to any such Note Purchaser or potential Note Purchaser.

13.           Further Assurances.  Issuer agrees to execute and deliver such further documents and to do such other acts as Holder may request in order to effect or carry out the terms of this Note and the other Investment Documents and the due performance of Issuer’s obligations hereunder and thereunder.

14.           Relationship to Security Agreement.  The Indebtedness shall be entitled to the benefits of, shall be construed in accordance with the security granted by Issuer to Holder pursuant to that certain Amended and Restated Security Agreement and that certain Second Amended and Restated Pledge Agreement, each dated of even date herewith by and between Holder and Issuer.  Holder acknowledges and agrees that, pursuant to the terms of Amendment No. 3 to the Convertible Notes Purchase Agreement, it has completely and fully released from its security interest the Rights and any other interests in the PRC Properties, and that upon effectiveness of the releases, it has no other security over any equity interests in (except with respect to the pledge of Issuer’s equity interest pursuant to that certain Second Amended and Restated Pledge Agreement dated of even date herewith by and between Issuer and Holder) or the assets of, or otherwise in relation to, China Global Mining Resources (BVI) Limited, with registered number 1513743 in the British Virgin Islands, and any of its subsidiary undertakings, from time to time other than that specified in Section 1 of the Amended and Restated Security Agreement.

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15.           Miscellaneous.

  (a)           Time is of the essence with respect to this Note.

  (b)           Issuer hereby waives presentment, demand, protest, and notice of dishonor and protest.  No waiver of any right or remedy of the Holder under this Note shall be valid unless in a writing executed by the Holder and any such waiver shall be effective only in the specific instance and for the specific purpose given.  All rights and remedies of the Holder of this Note shall be cumulative and may be exercised singly, concurrently, or successively.

  (c)           Unless otherwise provided herein, any notice required or permitted to be given hereunder shall be given by Issuer to the Holder or the Holder to the Company in accordance with the Notes Purchase Agreement.

  (d)           Any provision of this Note that is prohibited or unenforceable in any jurisdiction shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction.

  (e)           This Note and the other Investment Documents collectively: (i) constitute the final expression of the agreement between Issuer and Holder concerning the Indebtedness; (ii) contain the entire agreement between Issuer and Holder respecting the matters set forth herein and in the other Investment Documents; and (iii) may not be contradicted by evidence of any prior or contemporaneous oral agreements or understandings between Issuer and Holder.  Neither this Note nor any of the terms hereof may be terminated, amended, supplemented, waived or modified orally, but only by an instrument in writing executed by the party against which enforcement of the termination, amendment, supplement, waiver or modification is sought.

  (f)           If there is a conflict between or among the terms, covenants, conditions or provisions of this Note and the other Investment Documents, then any term, covenant, condition and/or provision that Holder may elect to enforce from time to time so as to enlarge the interest of Holder in its security for the Indebtedness, afford Holder the maximum financial benefits or security for the Indebtedness, and/or provide Holder the maximum assurance of payment of the Indebtedness and the Indebtedness in full, shall control.  ISSUER ACKNOWLEDGES AND AGREES THAT IT HAS BEEN PROVIDED WITH SUFFICIENT AND NECESSARY TIME AND OPPORTUNITY TO REVIEW THE TERMS OF THIS NOTE AND EACH OF THE INVESTMENT DOCUMENTS WITH ANY AND ALL COUNSEL IT DEEMS APPROPRIATE, AND THAT NO INFERENCE IN FAVOR OF, OR AGAINST, HOLDER OR ISSUER SHALL BE DRAWN FROM THE FACT THAT EITHER SUCH PARTY HAS DRAFTED ANY PORTION OF THIS NOTE OR ANY OF THE INVESTMENT DOCUMENTS.

  (g)           The terms “include”, “including” and similar terms shall be construed as if followed by the phrase “without being limited to.”  The term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.”  Words of masculine, feminine or neuter gender shall mean and include the correlative words of the other genders, and words importing the singular number shall mean and include the plural number, and vice versa.  All article, section, schedule, and exhibit captions are used for convenient reference only and in no way define, limit or describe the scope or intent of, or in any way affect, any such article, section, schedule, or exhibit.  Unless the context of this Note clearly requires otherwise, references to the plural include the singular, references to the singular include the plural.  Any reference in this Note or in the Investment Documents to this Note or to any of the Investment Documents shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, and supplements thereto and thereof, as applicable. An Event of Default shall “continue” or be “continuing” until such Event of Default has been waived in writing by Holder or completely cured in accordance with the terms of the applicable Investment Documents.

[The remainder of this page is intentionally blank.  Signature page follows.]

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IN WITNESS WHEREOF, Issuer has executed and delivered this Note as of the date first stated above.

ISSUER:
WITS BASIN PRECIOUS MINERALS INC.
By:	/s/ Mark D. Dacko
Name:	Mark D. Dacko
Title:	Chief Financial Officer

EX-10.3

EXHIBIT 10.3

AMENDED AND RESTATED SECURITY AGREEMENT

THIS AMENDED AND RESTATED SECURITY AGREEMENT (this “Agreement”) is dated as of December 22, 2008, and is by and between Wits Basin Precious Minerals Inc., a Minnesota corporation (“Issuer”), and China Gold, LLC, a Kansas limited liability company, its successors and assigns (together with its successors and assigns, “Purchaser”).

RECITALS

The following recitals are a material part of this Agreement.

A.           Issuer and Purchaser are parties to that certain Convertible Notes Purchase Agreement dated as of April 10, 2007, as amended on June 19, 2007 and November 10, 2008 (as amended, the “Purchase Agreement”), pursuant to which, among other things, Issuer has issued Purchaser Secured Convertible Notes in an aggregate principal amount of $9,800,000 (the “Prior Notes”).  All capitalized terms used in this Agreement without definition have the definitions given to them in the Purchase Agreement.

B.           As partial security for Issuer’s obligations under the Prior Notes, Issuer entered into a Security Agreement with Purchaser dated June 19, 2007 (the “Original Security Agreement”), whereby Issuer granted Purchaser a security interest in all of the assets acquired by Issuer from the use of the proceeds from the sale of the Prior Notes.

C.           On October 28, 2008, Purchaser loaned Issuer an additional $441,000 pursuant to the terms of a Promissory Note dated October 28, 2008 (the “Additional Note”), with Issuer’s payment obligations under the Additional Note secured by the Original Security Agreement, amongst other forms of security.

D.           Pursuant to Amendment No. 2 to the Purchase Agreement, on November 10, 2008, the parties converted the Prior Notes (including accrued and unpaid interest thereon) into a Promissory Note dated November 10, 2008 in the principal amount of $9,800,000 (the “First Amended Note”), the obligations under which remain secured by the Original Security Agreement.

E.           Issuer has entered into an agreement (the “JV Transaction”) with London Mining Plc (“London Mining”), whereby London Mining and Issuer have formed a joint venture entity in the British Virgin Islands entitled China Global Mining Resources (BVI) Limited (registered number 1513743) (“CGMR BVI”), which will acquire and operate certain mining properties in the People’s Republic of China (the “PRC Properties”).  Issuer and certain of its subsidiaries currently hold the rights to acquire the PRC Properties (the “Rights”), and such Rights are subject to the security interest of Purchaser under the terms of the Original Security Agreement and the Subsidiary Security Agreement.  For the avoidance of doubt, CGMR BVI is a separate entity to the Issuer’s wholly owned subsidiary “China Global Mining Resources Limited” (registered number 1386052) registered in the British Virgin Islands and referred to in the Original Security Agreement and the Subsidiary Security Agreement.

F.           On even date herewith, Issuer and Purchaser entered into that certain Amendment No. 3 to the Purchase Agreement (“Amendment No. 3”), whereby the parties consolidated the First Amended Note and Additional Note, and Issuer issued Purchaser in lieu thereof a promissory note dated December 22, 2008 in the aggregate principal amount of $10,421,107.18 (the “Second Amended Note”).  Additionally, pursuant to Amendment No. 3, the parties modified certain terms of the First Amended Note and Additional Note to, among other modifications, amend certain terms of Purchaser’s security interest to release from such security interest the Rights, the PRC Properties and Issuer’s equity interest in China Global Mining Resources Limited, a Hong Kong corporation (“CGMR HK”).

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G.           Pursuant to the terms of Amendment No. 3, Issuer and Purchaser wish to amend and restate the Original Security Agreement on the terms and conditions set forth herein to permit Issuer to complete the JV Transaction, including, without limitation, to release the security interests referenced above.

H.           This Agreement supersedes in its entirety the Original Security Agreement, which shall have no continuing effect from the date hereof.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing facts and premises hereby made a part of this Agreement, the mutual promises hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, Issuer and Purchaser agree as follows:

1.           Grant of Security Interest.  Issuer grants to Purchaser a present and continuing security interest in all of Issuer’s right, title and interest in and to all the following property of Issuer (collectively, the “Collateral”):

(a) That certain unsecured promissory note of CGMR BVI, issued in favor of Issuer in the amount of US$[4,800,000] and dated as of December __, 2008;

(b) The proceeds of the sale of any part of Issuer’s equity interest in CGMR BVI made in accordance with the terms of the Shareholders’ Agreement entered into by Issuer and London Mining on or around December ____, 2008;

(c) All financing statements and other writings which now or hereafter evidence a security interest for the benefit of Issuer in the items specified in subsection (a) and (b) above;

(d) All additions and accessions to, replacements and substitutions for, proceeds of, and the use or operation of the property described in subsections (a), (b) and (c) above, whether tangible or intangible, and, to the extent not otherwise included, all payments under any insurance policy (whether or not Purchaser is the loss payee thereof) and under any indemnity, warranty or guaranty, payable by reason of loss or damage to or otherwise with respect to any of the foregoing Collateral.

To the extent that the Uniform Commercial Code does not apply to any item of the Collateral, it is the intention of the parties and this Agreement that Purchaser have a common law pledge or collateral assignment of such item of Collateral.

2.           Security for Obligations.  This Agreement secures the payment and performance of all obligations of Issuer under the Purchase Agreement, the Note, and the Investment Documents (as defined in the Purchase Agreement) (the “Obligations”).

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3.           Acknowledgments of Holder.  Holder acknowledges that Issuer intends to transfer the Rights (pursuant to and along with the equity interest in CGMR HK) to CGMR BVI.  Holder further acknowledges and agrees that, pursuant to the terms of Amendment No. 3, it has completely and fully released from its security interest the Rights and any other interests in the PRC Properties and that upon effectiveness of the releases, it has no other security over the equity interests in (except with respect to the pledge of Issuer’s equity interest pursuant to that certain Second Amended and Restated Pledge Agreement dated of even date herewith by and between Issuer and Holder) or the assets of, or otherwise in relation to, CGMR BVI and any of its subsidiary undertakings, from time to time other than that specified in Section 1 of this Agreement.

4.           Further Assurances.

(a) Issuer agrees that it shall, from time to time and at its sole expense, promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that Purchaser may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable Purchaser to exercise and enforce its rights and remedies under this Agreement with respect to any Collateral.  Without limiting the generality of the foregoing, Issuer shall: (i) if any Collateral is or shall become evidenced by any promissory note or other instrument or any certificate or document of title or the like, deliver and pledge to Purchaser such note, instrument, certificate or document duly endorsed with recourse by Issuer, and accompanied by duly executed instruments of transfer or assignment, all in form and content satisfactory to Purchaser; and (ii) execute and file such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as Purchaser may request, in order to perfect and preserve the security interests granted or purported to be granted hereby.

(b) Issuer hereby authorizes Purchaser to file one or more financing or continuation statements, and amendments thereto, relating to all or any part of the Collateral, without the signature of Issuer to the extent permitted by law.  A copy of this Agreement shall be sufficient as a financing statement to the extent permitted by law.

(c) Issuer will furnish to Purchaser from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as Purchaser may reasonably request from time to time, all in reasonable detail.

5.           Purchaser’s Duties.  The powers conferred on Purchaser under this Agreement are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers.  Except for the safe custody of any Collateral in its possession and the accounting for monies actually received by it under this Agreement, Purchaser shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against other parties or any other rights pertaining to any Collateral.  Upon full and complete payment and performance of all of the Obligations under the Investment Documents, Purchaser shall release the Collateral of the Liens created and granted under this Agreement and, at Issuer’s expense, execute and deliver to Issuer such documents as Issuer shall reasonably request to evidence such release.

6.           Issuer Remains Liable.  Notwithstanding anything in this Agreement to the contrary, (a) Issuer shall remain liable under the contracts and agreements included in the Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by Purchaser of any of its rights under this Agreement shall not release Issuer from any of its duties or obligations under the contracts and agreements included in the Collateral, and (c) Purchaser shall not have any obligation or liability under the contracts and agreements included in the Collateral by reason of this Agreement, nor shall Purchaser be obligated to perform any of the obligations or duties of Issuer thereunder or to take any action to collect or enforce any claim for payment assigned under this Agreement.

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7.           Remedies.  If any Event of Default shall have occurred and be continuing:

(a) Purchaser shall have the right pursuant to the applicable Uniform Commercial Code (or pursuant to applicable law for any Collateral not subject to the Uniform Commercial Code) to take immediate possession of the Collateral, and (i) to require Issuer to assemble the Collateral, at Issuer’s expense, and make it available to Purchaser at a place designated by Purchaser which is reasonably convenient to both parties, and (ii) to enter any of the premises of Issuer or wherever any of the Collateral shall be located, and to keep and store the same on such premises until sold or otherwise realized upon (and if such premises are the property of Issuer, Issuer agrees not to charge Purchaser for storage thereof).

(b) Purchaser shall have the right to sell or otherwise dispose of all or any Collateral at public or private sale or sales, with such notice as may be required by law, all as Purchaser, in its sole discretion, may deem advisable.  Issuer agrees that ten (10) days written notice to Issuer of any public or private sale or other disposition of such Collateral shall be reasonable notice thereof, and such sale shall be at such locations as Purchaser may designate in such notice.  Purchaser shall have the right to conduct such sales on Issuer’s premises, without charge therefor.  All public or private sales may be adjourned from time to time in accordance with applicable law.  Purchaser shall have the right to sell, lease or otherwise dispose of such Collateral, or any part thereof, for cash, credit or any combination thereof, and Purchaser may purchase all or any part of such Collateral at public or, if permitted by law, private sale and, in lieu of actual payment of such purchase price, may set off the amount of such price against the Obligations.

(c) Purchaser may exercise with respect to the Collateral all of the rights and remedies (i) provided for in this Agreement, (ii) provided under the Purchase Agreement or under the other Investment Documents, (iii) afforded to a secured party upon a default under the Uniform Commercial Code, or (iv) otherwise available at law or in equity.

8.           Indemnity and Expenses.

(a) Issuer agrees to indemnify Purchaser from and against any and all claims, losses and liabilities arising out of or relating to this Agreement or any of the Obligations (including enforcement of this Agreement and Purchaser’s exercise of its rights and remedies under this Agreement), unless such claims, losses and liabilities are caused solely by Purchaser’s gross negligence or willful misconduct.

(b) Issuer shall upon demand pay to Purchaser the amount of any and all charges, costs, fees and expenses, including the reasonable fees and disbursements of its counsel and of any experts and agents, that Purchaser may incur following Issuer’s default in connection with (i) the custody, preservation, use of, or the sale of, collection from, or other realization upon, any of the Collateral, (ii) the exercise or enforcement of any of the rights of Purchaser under this Agreement, or (iii) the failure by Issuer to perform or observe any of the provisions of this Agreement.  All such fees, expenses and disbursements shall be deemed Obligations secured by this Agreement.

9.           Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Kansas without regard to any choice of law rule thereof giving effect to the laws of any other jurisdiction; provided, however, that if any of the Collateral is located in any jurisdiction other than Kansas, then the laws of such jurisdiction shall govern the method, manner and procedure for foreclosure of Purchaser’s security interest in such Collateral and the enforcement of Purchaser’s other remedies in respect of such Collateral to the extent that the laws of such jurisdiction are different from or inconsistent with the laws of Missouri.

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10.           Organizational Representations; UCC Filing Offices.  Issuer represents and warrants to Purchaser that (a) Issuer is a corporation incorporated under the laws of Minnesota and (b) Issuer’s chief executive office is located at 80 South Eighth Street, Suite 900, Minneapolis, Minnesota 55402-8773.  If Issuer changes the address of its chief executive office, or if Issuer changes its name, identity, corporate structure or state of incorporation (without implying any right of Issuer to make any such change without the prior consent of Purchaser), then, in each case, Issuer shall give Purchaser not less than ten (10) Business Days prior written notice thereof.

11.           Miscellaneous.

(a) No amendment or waiver of any provision of this Agreement nor consent to any departure by Issuer from the terms or provisions of this Agreement, shall in any event be effective unless it shall be in writing and signed by the party against whom enforcement of such amendment, waiver or consent is sought, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

(b) The paragraph and section headings in this Agreement are solely for convenience and shall not be deemed to limit or otherwise affect the meaning or construction of any part of this Agreement.  This document shall be construed without regard to any presumption or rule requiring construction against the party causing such document or any portion thereof to be drafted.  The section and other headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect any of the terms of this Agreement.  Any pronoun used in this Agreement shall be deemed to cover all genders.  The terms “include”, “including” and similar terms shall be construed as if followed by the phrase “without being limited to.”  The term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.”  The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision or section of this Agreement.  An Event of Default shall “continue” or be “continuing” until such Event of Default has been waived in writing by Purchaser.

(c) If any provision or provisions of this Agreement shall be unlawful, then such provision or provisions shall be null and void, but the remainder of the Agreement shall remain in full force and effect and be binding on the parties.

(d) This Agreement may be validly executed and delivered by fax or other electronic transmission and in one or more counterpart signature pages by different signatories thereto.

(e) Any notice or demand that Purchaser may wish to give to Issuer shall be served upon it in the fashion prescribed for notices in the Purchase Agreement at the address and facsimile number for Issuer set forth in the Purchase Agreement, and any notice or demand so sent shall be deemed to be served as set forth in the Purchase Agreement.

12.           Waiver of Jury Trial.  TO THE FULLEST EXTENT PERMITTED BY LAW, AND AS SEPARATELY BARGAINED-FOR CONSIDERATION TO PURCHASER, ISSUER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY (WHICH PURCHASER ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR OTHERWISE RELATING TO THIS AGREEMENT OR ANY OF THE OTHER INVESTMENT DOCUMENTS, THE OBLIGATIONS, THE COLLATERAL, PURCHASER’S CONDUCT IN RESPECT OF ANY OF THE FOREGOING, ANY OTHER INVESTMENT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, REGARDLIESS OF WHICH PARTY INITATES SUCH ACTION, SUIT, PROCEEDING OR COUNTERCLAIM.  TO EFFECTUATE THE FOREGOING, PURCHASER IS HEREBY GRANTED AN IRREVOCABLE POWER OF ATTORNEY TO FILE, AS ATTORNEY-IN-FACT FOR ISSUER, A COPY OF THIS AGREEMENT IN ANY COURT, AND THE COPY OF THIS AGREEMENT SO FILED SHALL CONCLUSIVELY BE DEEMED TO CONSTITUTE ISSUER’S WAIVER OF TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR OTHERWISE RELATING TO THIS AGREEMENT OR ANY OF THE OTHER INVESTOR DOCUMENTS, THE OBLIGATIONS, THE COLLATERAL OR PURCHASER’S CONDUCT IN RESPECT OF ANY OF THE FOREGOING.

[Remainder of page intentionally left blank; signature page follows.]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above.

ISSUER:	Wits Basin Precious Minerals Inc.
	a Minnesota corporation
	By:	/s/ Mark D. Dacko
	CFO, Mark D. Dacko

PURCHASER:	China Gold, LLC
	a Kansas limited liability company
	By:	China Gold, LLC
	Its:	General Partner
	By: /s/ C. Andrew Martin

SIGNATURE PAGE TO AMENDED AND RESTATED

SECURITY AGREEMENT

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EX-10.4

EXHIBIT 10.4

SECOND AMENDED AND RESTATED PLEDGE AGREEMENT

Wits Basin Precious Minerals Inc.

THIS SECOND AMENDED AND RESTATED PLEDGE AGREEMENT (this “Agreement”), is entered into as of December 22, 2008 by and between Wits Basin Precious Minerals Inc., a Minnesota corporation (“Pledgor”), and China Gold, LLC, a Kansas limited liability company, together with its successors and assigns and all other holders of securities and equity interests pursuant to the Convertible Notes Purchase Agreement (hereinafter defined) (together with its respective successors and assigns, “Purchaser”).

RECITALS

The following recitals are a material part of this Agreement.

A.           Pledgor and Purchaser are parties to that certain Convertible Notes Purchase Agreement dated as of April 10, 2007 as amended from time to time (as the same may hereafter be further modified, amended, restated or supplemented from time to time, the “Purchase Agreement”), pursuant to which Purchaser loaned Pledgor an aggregate principal amount of $9.8 million in convertible secured promissory notes (the “Prior Notes”).  On November 10, 2008, the parties converted the Prior Notes (including accrued and unpaid interest thereon) into a Promissory Note dated November 10, 2008 in the principal amount of $9,800,000 (the “First Amended Note”).  Capitalized terms used in this Agreement without definition have the definitions given to them in the Purchase Agreement.

B.           Pursuant to the Purchase Agreement, Pledgor and Purchaser entered into that certain Pledge Agreement dated as of April 10, 2007 (“Original Pledge Agreement”) whereby Pledgor agreed to provide Purchaser security documents, in form and substance satisfactory to Purchaser, granting Purchaser a security interest in all of the assets acquired from the use of proceeds for its purchase of the Prior Notes.  Accordingly, Pledgor pledged certain shares of common stock of Wits-China Acquisition Corp, a Minnesota corporation.  On February 7, 2008, the parties amended the Original Pledge Agreement pursuant to an Amended and Restated Pledge Agreement (the “Amended Pledge Agreement”) to provide Purchaser a pledge of the equity interests in two additional wholly owned subsidiaries of Pledgor, namely China Global Mining Resources Limited, a Hong Kong corporation (“CGMR HK”), and China Global Mining Resources Limited, a British Virgin Islands corporation with registered number 1386052 (“Original BVI Co”), which held assets acquired with proceeds from the Prior Notes received from Purchaser.

C.           On October 28, 2008, Purchaser loaned Pledgor an additional $441,000 pursuant to the terms of a Promissory Note dated October 28, 2008 (the “Additional Note”), with Pledgor’s payment obligations under the Additional Note secured by the Amended Pledge Agreement, amongst other forms of security.

D.           Pledgor has entered into an agreement (the “JV Transaction”) with London Mining Plc (“London Mining”), whereby London Mining and Pledgor have formed a new joint venture company, China Global Mining Resources (BVI) Limited, a newly incorporated British Virgin corporation with registered number 1513743 (“CGMR BVI”), which will acquire and operate certain mining properties in the People’s Republic of China (the “PRC Properties”).  Pledgor and certain of its subsidiaries currently hold the rights to acquire the PRC Properties (the “Rights”), and such Rights are subject to the security interest of Purchaser.

E.           On even date herewith, Pledgor and Purchaser entered into that certain Amendment No. 3 to the Purchase Agreement (“Amendment No. 3”), whereby the parties consolidated the First Amended Note and Additional Note, and Pledgor issued Purchaser in lieu thereof a promissory note dated December 22, 2008  in the aggregate principal amount of $10,421,107.18.  Additionally, pursuant to Amendment No. 3, the parties modified certain terms of First Amended Note and Additional Note to, among other modifications, amend certain terms of Purchaser’s security interest to release from such security interest Pledgor’s equity interest in CGMR HK and include in such security interest Pledgor’s equity interest in the CGMR BVI.

F.           Pursuant to the terms of Amendment No. 3, Pledgor and Purchaser wish to amend and restate the Amended Pledge Agreement on the terms and conditions set forth herein to permit Issuer to complete the JV Transaction.

G.           This Agreement supersedes in its entirety the Amended Pledge Agreement, which shall have no continuing effect from the date hereof.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing facts and premises hereby made a part of this Agreement, the mutual promises hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, Issuer and Purchaser agree as follows:

1.           Pledge.  As security for the prompt payment and performance of the Secured Obligations (defined below) in full when due, whether at stated maturity, by acceleration or otherwise (including amounts that would become due but for the operation of the provisions of the United States Bankruptcy Code (11 U.S.C. Section 101, et seq.), as in effect from time to time, and any successor statute thereto (“Bankruptcy Code”)), Pledgor by this Agreement pledges, grants, transfers, and assigns to Purchaser a security interest in all of Pledgor’s right, title, and interest in and to the Collateral (defined below).

For the purposes of this Agreement, (a) “Collateral” means Pledgor’s interest from time to time in the Pledged Interests, the Future Rights, and the Proceeds, collectively; (b) “Pledged Interests” means (i) all Equity Interests of Pledgor, and (ii) the certificates or instruments representing such Equity Interests, if any; (c) “Equity Interests” means all securities, shares, units, options, warrants, interests, participations, or other equivalents (regardless of how designated) of Wits-China and THE ORIGINAL BVI CO (together with Wits-China, the “Subsidiaries”) and CGMR BVI; (d) “Future Rights” means: (x) all Equity Interests (other than Pledged Interests) of Pledgor, and all securities convertible or exchangeable into, and all warrants, options, or other rights to purchase, Equity Interests of Pledgor; and (y) the certificates or instruments representing such Equity Interests, convertible or exchangeable securities, warrants, and other rights and all dividends, cash, options, warrants, rights, instruments, and other property or proceeds from time to time received, receivable, or otherwise distributed in respect of or in exchange for any or all of such Equity Interests; and (e) “Proceeds” means all proceeds (including proceeds of proceeds) of the Pledged Interests and Future Rights including all: (I) rights, benefits, distributions, premiums, profits, dividends, interest, cash, instruments, documents of title, accounts, contract rights, inventory, equipment, general intangibles, payment intangibles, deposit accounts, chattel paper, and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for, or as a replacement of or a substitution for, any of the Pledged Interests, Future Rights, or proceeds thereof (including any cash, Equity Interests, or other securities or instruments issued after any recapitalization, readjustment, reclassification, merger or consolidation with respect to Pledgor and any security entitlements, as defined in Section 8-102(a)(17) of the Uniform Commercial Code, with respect thereto); (II) “proceeds,” as such term is defined in Section 9-102(a)(64) of the Uniform Commercial Code; (III) proceeds of any insurance, indemnity, warranty, or guaranty (including guaranties of delivery) payable from time to time with respect to any of the Pledged Interests, Future Rights, or proceeds thereof; (VI) payments (in any form whatsoever) made or due and payable to Pledgor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Pledged Interests, Future Rights, or proceeds thereof; and (V) other amounts from time to time paid or payable under or in connection with any of the Pledged Interests, Future Rights, or proceeds thereof.

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Notwithstanding any other provision of this Agreement to the contrary, Purchaser acknowledges and agrees that (i) Pledgor has incorporated CGMR BVI and intends to sell a 50% interest in CGMR BVI to London Mining subsequent to entering into this Agreement, (ii) that only Pledgor’s 50% interest in CGMR BVI shall constitute an Equity Interest hereunder, and (iii) that any actions taken by Purchaser hereunder with respect to CGMR BVI or the related Equity Interest shall be subject to the terms of that certain Shareholders’ Agreement entered into on London Mining’s subscription into CGMR BVI (the “Shareholders’ Agreement”).

2.           Secured Obligations.  The obligations secured by this Agreement (the “Secured Obligations”) are all liabilities, obligations, or undertakings owing by Pledgor or Subsidiary to Purchaser of any kind or description arising out of or outstanding under, advanced or issued pursuant to, or evidenced by this Agreement, or the other Investment Documents, as amended from time to time, irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, voluntary or involuntary, whether now existing or hereafter arising, and including all interest (including interest that accrues after the filing of a case under the Bankruptcy Code) and any and all costs, fees (including attorneys fees), and expenses which Pledgor is required to pay pursuant to any of the foregoing, by law, or otherwise.

3.           Delivery and Registration of Collateral.

(a)           All certificates or instruments representing or evidencing the Collateral shall be promptly delivered by Pledgor to Purchaser or Purchaser’s designees pursuant to this Agreement at a location designated by Purchaser and shall be held by or on behalf of Purchaser pursuant to this Agreement, and shall be in suitable form for transfer by delivery, or shall be accompanied by a duly executed instrument of transfer or assignment in blank, in form and substance satisfactory to Purchaser.

(b)           Upon the occurrence and during the continuance of an Event of Default, Purchaser shall have the right, at any time in their discretion and without notice to Pledgor, to transfer to or to register on the books of Subsidiary (or of any other Person maintaining records with respect to the Collateral) in the name of Purchaser or any of its nominees any or all of the Collateral.  In addition, Purchaser shall have the right at any time to exchange certificates or instruments representing or evidencing Collateral for certificates or instruments of smaller or larger denominations.  Notwithstanding the foregoing, in the event this Section 3(b) is applicable to CGMR BVI, Purchaser’s rights shall be subject to the execution and delivery to CGMR BVI of a signed Deed of Adherence (as defined in the Shareholders’ Agreement), which Purchaser undertakes to execute.

(c)           If, at any time and from time to time, any Collateral (including any certificate or instrument representing or evidencing any Collateral) is in the possession of a Person other than Purchaser or Pledgor (a “Holder”), then Pledgor shall immediately, at Purchaser’s option, either cause such Collateral to be delivered into Purchaser’s possession, or cause such Holder to enter into a control agreement, in form and substance satisfactory to Purchaser, and take all other steps deemed necessary by Purchaser to perfect the security interest of Purchaser in such Collateral, all pursuant to Sections 9-106 and 9-313 of the Uniform Commercial Code or other applicable law governing the perfection of Purchaser’s security interest in the Collateral in the possession of such Holder.

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(d)           Any and all Collateral (including dividends, interest, and other cash distributions) at any time received or held by Pledgor shall be so received or held in trust for Purchaser, shall be segregated from other funds and property of Pledgor and shall be forthwith delivered to Purchaser in the same form as so received or held, with any necessary endorsements; provided that cash dividends or distributions received by Pledgor may be retained by Pledgor in accordance with Section 4.

(e)           If at any time, and from time to time, any Collateral consists of an uncertificated security or a security in book entry form, then Pledgor shall immediately cause such Collateral to be registered or entered, as the case may be, in the name of Purchaser, or otherwise cause Purchaser’s security interest thereon to be perfected in accordance with applicable law.

4.           Voting Rights and Dividends.

(a)           So long as no Event of Default shall have occurred and be continuing, Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Collateral or any part thereof for any purpose not inconsistent with the terms of the Investment Documents and shall be entitled to receive and retain any cash dividends or distributions paid or distributed in respect of the Collateral;

(b)           Upon the occurrence and during the continuance of an Event of Default, all rights of Pledgor to exercise the voting and other consensual rights or receive and retain cash dividends or distributions that it would otherwise be entitled to exercise or receive and retain, as applicable pursuant to Section 4(a), shall cease, and all such rights shall thereupon become vested in Purchaser, who shall thereupon have the sole right to exercise such voting or other consensual rights and to receive and retain such cash dividends and distributions; provided that with respect to exercise of any rights (including the right to receive and retain dividends) relating to the Equity Interest in CGMR BVI, such rights shall be subject to the terms of the Shareholders' Agreement.  Pledgor shall execute and deliver (or cause to be executed and delivered) to Purchaser all such proxies and other instruments as Purchaser may reasonably request for the purpose of enabling Purchaser to exercise the voting and other rights which they are entitled to exercise and to receive the dividends and distributions that they are entitled to receive and retain pursuant to the preceding sentence; provided that with respect to exercise of any rights (including the right to receive and retain dividends) relating to the Equity Interest in CGMR BVI, such rights shall be subject to the terms of the Shareholders' Agreement.

5.           Release.  On completion of any acquisition of all or part of Pledgor's equity interest in CGMR BVI by London Mining or a member of its Group (as defined in the Shareholders' Agreement) or a third party under the "Come Along" provisions of the Shareholders' Agreement undertaken in accordance with the terms of the Shareholders' Agreement (an "Acquisition"), the Pledgor's equity interest in CGMR BVI, or such part acquired, will automatically and irrevocably be released and Purchaser agrees to take any further action (including the execution, delivery and filing (as applicable) of any necessary documents or agreements) necessary to effect such release, and shall, prior to the completion of the Acquisition deliver to CGMR BVI all documents and items held by Purchaser pursuant to Section 3 of this agreement.

6.           Representations and Warranties.  Pledgor represents, warrants, and covenants as follows:

(a)           Pledgor has the authority to pledge the Pledged Interests to Purchaser under the terms of this Agreement.

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(b)           Pledgor has taken all steps it deems necessary or appropriate to be informed on a continuing basis of changes or potential changes affecting the Collateral (including rights of conversion and exchange, rights to subscribe, payment of dividends, reorganizations or recapitalization, tender offers and voting and registration rights), and Pledgor agrees that Purchaser shall have no responsibility or liability for informing Pledgor of any such changes or potential changes or for taking any action or omitting to take any action with respect thereto.

(c)           All information in this Agreement or hereafter supplied to Purchaser by or on behalf of Pledgor in writing with respect to the Collateral is, or in the case of information hereafter supplied will be, accurate and complete in all material respects.

(d)           Pledgor is and will be the sole legal and beneficial owner of the Collateral (including the Pledged Interests and all other Collateral acquired by Pledgor after the date hereof) free and clear of any adverse claim, Lien, or other right, title, or interest of any party, other than the Liens in favor of Purchaser.

(e)           This Agreement, and the filing of a UCC financing statement by Purchaser with the Minnesota Secretary of State describing the Collateral, creates a valid, perfected security interest in the Pledged Interests in favor of Purchaser securing payment of the Secured Obligations, and, except with respect to the filing of a UCC financing statement, all actions of Pledgor necessary to achieve such perfection have been duly taken.

(f)           Schedule 1 to this Agreement is true and correct and complete in all material respects. Without limiting the generality of the foregoing: (i) except as set forth on Schedule 1, all the Pledged Interests are in uncertificated form, and, except to the extent registered in the name of Purchaser or its nominees pursuant to the provisions of this Agreement, are registered in the name of Pledgor; and (ii) as of the date of this Agreement, the Pledged Interests as to Subsidiary and CGMR BVI constitute at least the percentage of all the fully diluted issued and outstanding Equity Interests of Subsidiary and CGMR BVI as set forth in Schedule 1 to this Agreement.

(g)           There are no presently existing Future Rights or Proceeds owned by Pledgor.

(h)           The Pledged Interests have been duly authorized and validly issued and are fully paid and non-assessable.

(i)           Neither the pledge of the Collateral pursuant to this Agreement nor the extensions of credit represented by the Secured Obligations violates Regulation T, U or X of the Board of Governors of the Federal Reserve System.

7.           Further Assurances.

(a)           Pledgor agrees that from time to time, at the expense of Pledgor, Pledgor will promptly execute and deliver all further instruments and documents, and take all further action that may be necessary or reasonably desirable, or that Purchaser may request, in order to perfect and protect any security interest granted or purported to be granted by this Agreement or to enable Purchaser to exercise and enforce their rights and remedies under this Agreement with respect to any Collateral. Without limiting the generality of the foregoing, Pledgor will: (i) at the request of Purchaser, mark conspicuously each of its records pertaining to the Collateral with a legend, in form and substance reasonably satisfactory to Purchaser, indicating that such Collateral is subject to the security interest granted by this Agreement; (ii) execute such instruments or notices as may be necessary or reasonably desirable, or as Purchaser may request, in order to perfect and preserve the Liens granted or purported to be granted by this Agreement; (iii) allow inspection of the Collateral by Purchaser or Persons designated by Purchaser; and (iv) appear in and defend any action or proceeding that may affect Pledgor’s title to or Purchaser’s security interest in the Collateral.

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(b)           Pledgor by this Agreement authorizes Purchaser to file one or more financing or continuation statements, and amendments thereto, relative to all or any part of the Collateral. A carbon, photographic, or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law.

(c)           Pledgor will furnish to Purchaser, upon the request of Purchaser: (i) a certificate executed by Pledgor, and dated as of the date of delivery to Purchaser, itemizing in such detail as Purchaser may request, the Collateral which, as of the date of such certificate, has been delivered to Purchaser by Pledgor pursuant to the provisions of this Agreement; and (ii) such statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as Purchaser may request.

8.           Covenants of Pledgor.  Pledgor shall:

(a)           To the extent it may lawfully do so, use its best efforts to prevent Subsidiary from issuing Future Rights or Proceeds; and

(b)           Upon receipt by Pledgor of any material notice, report, or other communication from Subsidiary or any Holder relating to all or any part of the Collateral, deliver such notice, report or other communication to Purchaser as soon as possible, but in no event later than five (5) days following the receipt thereof by Pledgor.

9.           Purchaser as Pledgor’s Attorneys-in-Fact.

(a)           Pledgor by this Agreement irrevocably appoints Purchaser as Pledgor’s attorneys-in-fact, with full authority in the place and stead of Pledgor and in the name of Pledgor, Purchaser or otherwise, to enter into any control agreements Purchaser deems necessary pursuant to Section 3 of this Agreement, and from time to time at Purchaser’s discretion, upon the occurrence and during the continuance of an Event of Default, to take any action and to execute any instrument that Purchaser may reasonably deem necessary or advisable to accomplish the purposes of this Agreement, including: (i),to receive, indorse, and collect all instruments made payable to Pledgor representing any dividend, interest payment or other distribution in respect of the Collateral or any part thereof to the extent permitted under this Agreement and to give full discharge for the same and to execute and file governmental notifications and reporting forms; or (ii) to arrange for the transfer of the Collateral on the books of Subsidiary or any other Person to the name of Purchaser or to the names of Purchaser’s nominees.

(b)           In addition to the designation of Purchaser as Pledgor’s attorneys-in-fact in subsection (a), Pledgor by this Agreement irrevocably appoints Purchaser as Pledgor’s agents and attorneys-in-fact to make, execute and deliver after the occurrence and during the continuance of an Event of Default any and all documents and writings which may be necessary or appropriate for approval of, or be required by, any regulatory authority located in any city, county, state or country where Pledgor or Subsidiary engage in business, in order to transfer or to more effectively transfer any of the Pledged Interests or otherwise enforce Purchaser’s rights under this Agreement.

10.           Remedies upon Default.  Upon the occurrence and during the continuance of an Event of Default:

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(a)           Purchaser may exercise in respect of the Collateral, in addition to other rights and remedies provided for in this Agreement or otherwise available to it, all the rights and remedies of a secured party on default under the Uniform Commercial Code (irrespective of whether the Uniform Commercial Code applies to the affected items of Collateral), and Purchaser may also without notice (except as specified below) sell the Collateral or any part thereof in one or more parcels at public or private sale, at any exchange, broker’s board or at any of Purchaser’s office or elsewhere, for cash, on credit or for future delivery, at such time or times and at such price or prices and upon such other terms as Purchaser may deem commercially reasonable, irrespective of the impact of any such sales on the market price of the Collateral. To the maximum extent permitted by applicable law, Purchaser may be the purchaser of any or all of the Collateral at any such sale and shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply all or any part of the Secured Obligations as a credit on account of the purchase price of any Collateral payable at such sale. Each purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of Pledgor, and Pledgor by this Agreement waives (to the extent permitted by law) all rights of redemption, stay, or appraisal that it now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. Pledgor agrees that, to the extent notice of sale shall be required by law, at least ten (10) calendar days notice to Pledgor of the time and place of any public sale or the time after which a private sale is to be made shall constitute reasonable notification. Purchaser shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. Purchaser may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. To the maximum extent permitted by law, Pledgor by this Agreement waives any claims against Purchaser arising because the price at which any Collateral may have been sold at such a private sale was less than the price that might have been obtained at a public sale, even if Purchaser accepts the first offer received and do not offer such Collateral to more than one offeree.

(b)           Pledgor by this Agreement agrees that any sale or other disposition of the Collateral conducted in conformity with reasonable commercial practices of banks, insurance companies, or other financial institutions in the city and state where Purchaser is located in disposing of property similar to the Collateral shall be deemed to be commercially reasonable.

(c)           Pledgor by this Agreement acknowledges that the sale by Purchaser of any Collateral pursuant to the terms hereof in compliance with the Securities Act of 1933 as now in effect or as hereafter amended, or any similar statute hereafter adopted with similar purpose or effect (the “Securities Act”), as well as applicable “Blue Sky” or other state securities laws may require strict limitations as to the manner in which Purchaser or any subsequent transferee of the Collateral may dispose thereof. Pledgor acknowledges and agrees that in order to protect Purchaser’s interest it may be necessary to sell the Collateral at a price less than the maximum price attainable if a sale were delayed or were made in another manner, such as a public offering under the Securities Act. Pledgor has no objection to sale in such a manner and agrees that Purchaser shall have no obligation to obtain the maximum possible price for the Collateral. Without limiting the generality of the foregoing, Pledgor agrees that upon the occurrence and during the continuation of an Event of Default, Purchaser may, subject to applicable law, from time to time attempt to sell all or any part of the Collateral by a private placement, restricting the bidders and prospective Purchaser to those who will represent and agree that they are purchasing for investment only and not for distribution. In so doing, Purchaser may solicit offers to buy the Collateral or any part thereof for cash from a limited number of investors reasonably believed by Purchaser to be institutional investors or other accredited investors who might be interested in purchasing the Collateral. If Purchaser shall solicit such offers, then the acceptance by Purchaser of one of the offers shall be deemed to be a commercially reasonable method of disposition of the Collateral.

Pledgor acknowledges that there is no adequate remedy at law for failure by it to comply with the provisions of this Section and that such failure would not be adequately compensable in damages, and therefore agrees that its agreements contained in this Section may be specifically enforced.

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 (d)           PLEDGOR EXPRESSLY WAIVES TO THE MAXIMUM EXTENT PERMITTED BY LAW: (i) ANY CONSTITUTIONAL OR OTHER RIGHT TO A JUDICIAL HEARING PRIOR TO THE TIME PURCHASER DISPOSES OF ALL OR ANY PART OF THE COLLATERAL AS PROVIDED IN THIS SECTION; (ii) ALL RIGHTS OF REDEMPTION, STAY, OR APPRAISAL THAT IT NOW HAS OR MAY AT ANY TIME IN THE FUTURE HAVE UNDER ANY RULE OF LAW OR STATUTE NOW EXISTING OR HEREAFTER ENACTED; AND (iii) EXCEPT AS SET FORTH IN SUBSECTION (a) OF THIS SECTION 10, ANY REQUIREMENT OF NOTICE, DEMAND, OR ADVERTISEMENT FOR SALE.

 (e)           Notwithstanding any term of this Agreement to the contrary, any rights or actions by Purchaser under this Section 10 relating to the CGMR BVI shall be subject to the terms of the Shareholders’ Agreement.

11.           Application of Proceeds.  Upon the occurrence and during the continuance of an Event of Default, any cash held by Purchaser as Collateral and all cash Proceeds received by Purchaser in respect of any sale of, collection from, or other realization upon all or any part of the Collateral pursuant to the exercise by Purchaser of their remedies as secured creditors as provided in Section 10 shall be applied from time to time by Purchaser as provided in Section 9-615 of the Uniform Commercial Code.

12.           Indemnity and Expenses.  Pledgor agrees:

 (a)           To indemnify and hold harmless Purchaser and each of their directors, officers, employees, agents and affiliates from and against any and all claims, damages, demands, losses, obligations, judgments and liabilities (including, without limitation, reasonable attorneys’ fees and expenses) in any way arising out of or in connection with this Agreement or the Secured Obligations, except to the extent the same shall arise as a result of the gross negligence or willful misconduct of the party seeking to be indemnified; and

 (b)           To pay and reimburse Purchaser upon demand for all reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) that Purchaser may incur in connection with (i) the custody, use or preservation of, or the sale of, collection from or other realization upon, any of the Collateral, including the reasonable expenses of re-taking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, (ii) the exercise or enforcement of any rights or remedies granted under this Agreement or under any of the other Investment Documents or otherwise available to them (whether at law, in equity or otherwise), or (iii) the failure by Pledgor to perform or observe any of the provisions hereof. The provisions of this Section shall survive the execution and delivery of this Agreement, the repayment of any of the Secured Obligations, and the termination of this Agreement or any other Investment Document.

13.           Duties of Purchaser.  The powers conferred on Purchaser under this Agreement are solely to protect their interests in the Collateral and shall not impose on them any duty to exercise such powers. Except as provided in Section 9-207 of the Uniform Commercial Code, Purchaser shall have no duty with respect to the Collateral or any responsibility for taking any necessary steps to preserve rights against any Persons with respect to any Collateral.

14.           Amendments; etc.  No amendment or waiver of any provision of this Agreement nor consent to any departure by Pledgor from this Agreement shall in any event be effective unless the same shall be in writing and signed by Purchaser and Pledgor, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No failure on the part of Purchaser to exercise, and no delay in exercising any right under this Agreement, any other Investment Document, or otherwise with respect to any of the Secured Obligations, shall operate as a waiver thereof; nor shall any single or partial exercise of any right under this Agreement, any other Investment Document, or otherwise with respect to any of the Secured Obligations preclude any other or further exercise thereof or the exercise of any other right. The remedies provided for in this Agreement or otherwise with respect to any of the Secured Obligations are cumulative and not exclusive of any remedies provided by law.

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15.           Notices.  Unless otherwise specifically provided in this Agreement, all notices shall be in writing addressed to the respective party as set forth below, and may be personally served, faxed, or sent by overnight courier service or United States mail:

If to Pledgor:

Wits Basin Precious Minerals Inc.

80 South Eighth Street, Suite 900

Minneapolis, MN  55402-8773

Attn: Mark Dacko, Chief Financial Officer

Facsimile: (612) 395-5276

with a copy to:

Maslon Edelman Borman & Brand, LLP

3300 Wells Fargo Center

90 South Seventh Street

Minneapolis, MN  55402-4140

Attn: William Mower, Esq.

Facsimile: (612) 642-8358

If to Purchaser:

China Gold, LLC

7300 College Boulevard, Suite 303

Overland Park, KS 66210

Attn: C. Andrew Martin

Facsimile: 816-753-5117

with a copy to:

William M. Schutte, Esq.

Polsinelli Shalton Flanigan Suelthaus PC

6201 College Boulevard, Suite 500

Overland Park, KS  66211

Facsimile: 913-451-6205

Any notice given pursuant to this Section shall be deemed to have been given: (a) if delivered in person, when delivered; (b) if delivered by fax, on the date of transmission if transmitted on a Business Day before 5:00 p.m. at the place of receipt or, if not, on the next succeeding Business Day; (c) if delivered by overnight courier, two (2) days after delivery to such courier properly addressed; or (d) if by United States mail, four (4) Business Days after depositing in the United States mail, with postage prepaid and properly addressed. Any party to this Agreement may change the address or fax number at which it is to receive notices under this Agreement by notice to the other party in writing in the foregoing manner.

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16.           Continuing Security Interest.  This Agreement shall create a continuing security interest in the Collateral and shall: (a) remain in full force and effect until the indefeasible payment in full of the Secured Obligations; (b) be binding upon Pledgor and its successors and assigns; and (c) inure to the benefit of Purchaser and their successors, transferees, and assigns. Upon the indefeasible payment in full of the Secured Obligations, the security interests granted in this Agreement shall automatically terminate and all rights to the Collateral shall revert to Pledgor. Upon any such termination, Purchaser will, at Pledgor’s expense, execute and deliver to Pledgor such documents as Pledgor shall reasonably request to evidence such termination. Such documents shall be prepared by Pledgor and shall be in form and substance reasonably satisfactory to Purchaser.

17.           Security Interest Absolute.  To the maximum extent permitted by law, all rights of Purchaser, all security interests under this Agreement, and all obligations of Pledgor under this Agreement, other than under the terms of the Shareholders' Agreement where applicable, shall be absolute and unconditional irrespective of:

 (a)           any lack of validity or enforceability of any of the Secured Obligations or any other agreement or instrument relating thereto, including any of the Investment Documents;

 (b)           any change in the time, manner, or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from any of the Investment Documents, or any other agreement or instrument relating thereto;

 (c)           any exchange, release, or non-perfection of any other collateral, or any release or amendment or waiver of or consent to departure from any guaranty for all or any of the Secured Obligations; or

 (d)           any other circumstances that might otherwise constitute a defense available to, or a discharge of, Pledgor.

18.           Construction.  Section and subsection headings in this Agreement are included in this Agreement for convenience of reference only and shall not constitute a part of this Agreement or be given any substantive effect.  Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular and to the singular include the plural, the part includes the whole, the term “including” is not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and other similar terms in this Agreement refer to this Agreement as a whole and not exclusively to any particular provision of this Agreement. Article, section, subsection, exhibit, and schedule references are to this Agreement unless otherwise specified. All of the exhibits or schedules attached to this Agreement shall be deemed incorporated in this Agreement by reference. Any reference to any of the following documents includes any and all alterations, amendments, restatements, extensions, modifications, renewals, or supplements thereto or thereof, as applicable: this Agreement or any of the other Investment Documents.  No inference in favor of, or against, any party shall be drawn from the fact that such party has drafted any portion of this Agreement, each party having been represented by counsel of its choice in connection with the negotiation and preparation of this Agreement and the other Investment Documents.

19.           Interpretation.  Neither this Agreement nor any uncertainty or ambiguity in this Agreement shall be construed or resolved against Purchaser or Pledgor, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by both of the parties and their respective counsel and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of the parties to this Agreement.

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20.           Severability.  In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

21.           Counterparts; Facsimile Execution.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same Agreement. Delivery of an executed counterpart of this Agreement by facsimile shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by facsimile also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, or binding effect of this Agreement.

22.           Waiver of Marshaling.  Each of Pledgor and Purchaser acknowledges and agrees that in exercising any rights under or with respect to the Collateral: (a) Purchaser is under no obligation to marshal any Collateral; (b) may, in their absolute discretion, realize upon the Collateral in any order and in any manner they so elect; and (c) may, in their absolute discretion, apply the proceeds of any or all of the Collateral to the Secured Obligations in any order and in any manner they so elect. Pledgor and Purchaser waive any right to require the marshaling of any of the Collateral.

23.           Conflict Among Provisions.  In the event of a conflict between the terms, covenants and conditions of this Agreement and those of any other Investment Document (unless otherwise specifically provided), the terms, covenants and conditions of the document which shall enlarge the interest of Purchaser in the Collateral, afford Purchaser greater financial benefits or financial security or better assure payment of the Obligations in full, shall control; provided, however, that in the event of a conflict between any provision of this Agreement and the provisions of any other document, instrument or agreement which grants Purchaser a security interest in all or any part of the Pledged Interest, the provisions of this Agreement shall control.

24.           Sole and Absolute Discretion of Purchaser. Whenever pursuant to this Agreement (a) Purchaser exercises any right given to them to consent, approve or disapprove, (b) any arrangement, document, item or term is to be satisfactory to Purchaser, or (c) any other decision or determination is to be made by Purchaser, the decision of Purchaser to consent, approve or disapprove, all decisions that arrangements, documents, items, or terms are satisfactory or not satisfactory and all other decisions and determinations made by Purchaser, shall be in the sole and absolute discretion of Purchaser and shall be final and conclusive, except as may be otherwise expressly and specifically provided in this Agreement.

25.           Consent to Forum. AS PART OF THE CONSIDERATION FOR NEW VALUE THIS DAY RECEIVED, PLEDGOR BY THIS AGREEMENT CONSENTS TO THE JURISDICTION OF ANY STATE COURT LOCATED WITHIN JOHNSON COUNTY, KANSAS OR FEDERAL COURT IN THE DISTRICT COURT OF KANSAS, AND CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO PLEDGOR AT THE ADDRESS STATED IN THE PURCHASE AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF.  PLEDGOR WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED IN THIS AGREEMENT AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE.  PLEDGOR FURTHER AGREES NOT TO ASSERT AGAINST PURCHASER (EXCEPT BY WAY OF A DEFENSE OR COUNTERCLAIM IN A PROCEEDING INITIATED BY PURCHASER) ANY CLAIM OR OTHER ASSERTION OF LIABILITY WITH RESPECT TO THE INVESTMENT DOCUMENTS, PURCHASER’S CONDUCT OR OTHERWISE IN ANY JURISDICTION OTHER THAN THE FOREGOING JURISDICTIONS.

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26.           Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW, AND AS SEPARATELY BARGAINED-FOR CONSIDERATION TO PURCHASER, PLEDGOR BY THIS AGREEMENT WAIVES ANY RIGHT TO TRIAL BY JURY (WHICH PURCHASER ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR OTHERWISE RELATING TO ANY OF THE INVESTMENT DOCUMENTS, THE OBLIGATIONS, THE PLEDGED INTEREST, OR PURCHASER’S CONDUCT IN RESPECT OF ANY OF THE FOREGOING.

27.           Entire Agreement. This agreement, the Purchase Agreement, Amendment No. 3, the Note and the Amended and Restated Security Agreement between the Pledgor and Purchaser dated on or around the date of the Agreement (i) constitute the final expression of the agreement between Pledgor and Purchaser concerning the Pledge; and (ii) may not be contradicted by evidence of any prior or contemporaneous oral agreements or understandings between Pledgor and Purchaser.  Neither this agreement nor any of the terms hereof may be terminated, amended, supplemented, waived or modified orally, but only by an instrument in writing executed by the party against which enforcement of the termination, amendment, supplement, waiver or modification is sought.

[Remainder of page intentionally left blank; signature page follows]

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IN WITNESS WHEREOF, Pledgor and Purchaser have caused this Agreement to be duly executed and delivered by their officers thereunto duly authorized as of the date first written above.

PLEDGOR:	WITS BASIN PRECIOUS MINERALS INC.,
	a Minnesota corporation
	By:	/s/ Mark D. Dacko
		Mark D. Dacko, Chief Financial Officer
PURCHASER:	CHINA GOLD, LLC,
	a Kansas limited liability company
	By:	/s/ C. Andrew Martin
		C. Andrew Martin, Manager

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SCHEDULE 1

Pledged Interests

Name of Subsidiary	Jurisdiction of Organization	Type of Interest	Number of Shares/Units (if applicable)		Certificate Numbers (if any)		Percentage of Outstanding Interests in Subsidiary
China Global Mining Resources Limited (1386052)	British Virgin Islands	Common Stock		—		—		100	%
Wits-China Acquisition Corp.	Minnesota	Common Stock		1,000		N/A		100	%
China Global Mining Resources (BVI) Limited (1513743)	British Virgin Islands	Common Stock	100 B Shares			1		50	%