Puntland

Date of Contract Signature- 17th January, 2007

This contract is written in the English language. In case of any inconsistency due to translation of the contract into a different language, the English version shall prevail.

Nogal Valley

Canmex Holdings (Bermuda) II and Range Resources

Canmex Holdings (Bermuda) II Ltd is the wholly owned subsidiary of Canmex Minerals Corporation

The first and second exploration periods may be extended, if, at the end of any exploration period or extension thereof, Canmex Holdings (Bermuda) II has fulfilled its obligations for that period but needs more time to evaluate or appraise the results of the exploration work performed. Such request shall include the results of the exploration work performed and the evaluation or appraisal work to be accomplished during the appraisal extension.

Petroleum which includes liquid crude oil of various densities, asphalt, dry gas, associated gas, and all other hydrocarbons that may be found in and produced in the agreement area.

Government of Puntland

Canmex Holdings (Bermuda) II Ltd., a company organized and existing under the laws of Bermuda, and Range Resources Limited, a company organized and existing under the laws of Victoria, Canada.

Puntland Department of Minerals and Petroleum

The term of the contract includes an exploration period and a development period. The exploration period is divided into a first exploration period of commencing on the effective date (i.e. the date on which the law ratifying the contract is passed), and at Canmex Holdings (Bermuda) II’s sole election, a second exploration period commencing on the day after the end of the first exploration period or any extension thereof. Canmex Holdings (Bermuda) II has the right to elect to enter into the second exploration period by providing written notice to the Government prior to the end of the first exploration period or any extension thereof, provided that Canmex Holdings (Bermuda) II has fulfilled all its obligations under the contract for that exploration period or its extension. Either exploration period may, at Canmex Holdings (Bermuda) II’s election, be extended upon written notice to the Government prior to the end of the applicable exploration period. The development period shall commence on the date of the first commercial discovery of oil and shall continue for a period agreed upon and can be extended upon the written notice prior to the expiration of the development period provided, however, that any such extension shall be subject to new terms and conditions mutually agreed upon by the Government and Canmex Holdings (Bermuda) II within the specified period, and shall not be binding on any party unless a law is issued approving such extension according to the constitutional procedures in Puntland.

Production Sharing Agreement

2007- Year of contract signature

Canmex Holdings (Bermuda) II shall take all proper measures, according to generally accepted methods in the petroleum industry to prevent loss or waste of petroleum above or under the ground in any form during drilling, producing, gathering, transporting, distributing and storage operations. The test crude oil produced from any well(s) in the contract area is the property and the responsibility of the Government for disposal. The Government has the right to prevent any operation on any well that it might reasonably expect would result in loss or damage of the well or the oil or gas field. Except in instances where multiple producing reservoirs (not in pressure communication with each other) in the same well can only produce economically through a single tubing string, petroleum shall not be produced from multiple oil bearing zones through one string of tubing at the same time, except with the prior approval of the Government or its representative, such approval not to be unreasonably withheld.

Canmex Holdings (Bermuda) II (on its own behalf and on behalf of Range Resources) shall pay to the Government after the effective date and each anniversary thereof during the term of the contract, a specified sum of training bonus in U.S. Dollars for the purpose of training Puntland employees, an institutional bonus, and a social development bonus. Canmex Holdings (Bermuda) II (on its own behalf and on behalf of Range Resources) shall also pay production bonuses. The rates of the production bonuses specified do not include production from any sole risk projects of the Government except if Canmex Holdings (Bermuda) II exercises its option to share in such sole risk production, and only from the initial date of sharing. Each production bonus shall be paid only once, and only at such time as a specified production level is achieved. All taxes, bonuses and contributions referred to above are not recoverable from the cost oil.

The Government , Canmex Holdings (Bermuda) II, Range Resources, and their contractors and subcontractors can import and export from/to abroad, and are exempt from all customs duties and related taxes with respect to importation of machinery, equipment, vehicles, materials, supplies, consumables, and mobile properties, to be used solely in the carrying out of petroleum operations. Foodstuffs and alcoholic beverages may also be imported. The exemption does not apply to imports of materials if these or comparable materials are manufactured in Puntland and may be purchased locally at a rate which does not exceed the specified percent of the cost of the imported goods prior to the addition of the customs duties, but after adding the cost of transport and insurance. Canmex Holdings (Bermuda) II and/or Range Resources should notify the Government of any exportation. There shall be no license required, and Canmex Holdings (Bermuda) II, Range Resources and the Department and their respective customers are exempt from any duty, tax, fee or any other financial impost in respect of the export of crude oil under the contractt. Canmex Holdings (Bermuda) II (on its own behalf and on behalf of Range Resources), its contractors and subcontractors have the right after receiving approval from the Government to sell any damaged, used and non-serviceable materials or equipment or goods, classified as scrap or junk, in Puntland without paying customs duties and related taxes. New materials, equipment and goods, or used but serviceable materials, equipment, that are surplus to the petroleum operations can be sold outside Puntland after obtaining approval or may be sold within Puntland, provided that the purchaser shall pay the applicable customs duties, taxes or imposts, except if sold or transferred free of charge to the Department or one of its dependent units or to other companies enjoying the same customs duties exemption as Canmex Holdings (Bermuda) II. Customs duties include all duties, excise, fees and any other imposts and taxes (except those fees and charges which are normally paid to Government agencies for actual services rendered), levied for importing (or exporting, if applicable) the said materials, equipment and goods. Every foreign employee of Canmex Holdings (Bermuda) II or its affiliates, contractors and subcontractors are permitted to import from abroad, exempt from customs duties, reasonable quantity of household goods, personal belongings, and a car to be used only for personal and family use. Employee imports may not be sold in Puntland except and after customs duties and related taxes are properly paid, unless sold to another foreign employee of Canmex Holdings (Bermuda) II.

Expatriate employees of Canmex Holdings (Bermuda) II, its contractors and subcontractors working in exploration operations are exempt from all personal income taxes and similar taxes in Puntland during exploration operations on all income from any sources outside or inside of Puntland. However, expatriate employees in development and production operations do not enjoy the exemption.

Canmex (for and on its own behalf and on behalf of Range Resources) shall pay a fixed percentage tax as "fixed tax" equivalent to the specified amount of all of its actual exploration expenditures incurred and paid in conducting its exploration operations within the specified time after the tax year in which the relevant exploration expenditures are incurred and paid. Such payments shall be made to Puntland tax authorities and accompanied by statements authenticated by the Department.The Government shall furnish Canmex with official receipts evidencing the payment of such tax.

Income taxes are all taxes to which Canmex and/or Range Resources are subject to under the laws of Puntland and are measured by income, profit or turnover. The tax sis calculated as follows; the total value of all crude oil received by Canmex and/or Range Resources in the tax year less the costs and expenses of Canmex and/or Range Resources and an amount equal to Puntland Income Taxes of Canmex and Range Resources. If the total value of the crude oil received in any tax year by Canmex and Range Resources is equal to zero, then the Canmex and Range Resources are not required to pay any Income taxes for such tax year. Canmex, Range Resources, their Affiliated companies their contractors and their subcontractors are exempt from all of the taxes and related taxes of any nature whatsoever during petroleum operations with the exception of the fixed tax.

The crude oil remaining after deducting royalty and cost oil from the total crude oil produced and saved from the agreement area, and not used in petroleum operations, shall be taken and disposed of separately by the Government and Canmex (for and on its own behalf and on behalf of Range Resources) as specified.

Puntland owns and is entitled to take a royalty from the total crude oil produced and saved from the development area(s) and not used in petroleum operations prior to the deduction of cost oil, a non-recoverable amount of the 11 monthly average daily net production (MADNP) commencing with the first barrel produced and saved from the development area(s) and not used in petroleum operations in the percentages specified.

Canmex shall, after consultation with the Department of Minerals and Petroleum, prepare and carry out specialized training programs for all Puntland employees engaged in operations and with respect to applicable aspects of the petroleum industry. Such training programs should be in line with and satisfy the requirements of the Puntland plan and are to be prepared jointly and approved by the Government. Canmex shall replace its staff gradually by qualified Puntland nationals and use its best efforts to include in its organization in Puntland, throughout the exploration and development periods and when appropriate to the nature of the petroleum operations, graduates seconded by the Department such as geologists, geophysicists, drilling engineers and production engineers, the number and selection of which shall be determined by mutual agreement between the Government and Canmex. Any graduates so selected for secondment shall be subject to a 6 Month probationary period at the end of which Canmex shall have the option to end the secondment of any secondee that has not performed to its satisfaction. Canmex shall provide the Department with a statement setting forth the reasons for its actions. All Puntland personnel employed Canmex, its contractors and its subcontractors shall be paid according to their employment terms, salaries, wages, benefits and allowances correspondent to their technical, administrative and professional abilities.

Canmex and its contractors and subcontractors should prioritize local contractors and subcontractors, including the Government’s dependent units as long as their performance is comparable to international standards and quality and the prices of their services are not higher than the prices of other contractors and subcontractors by more than the specified percent. Canmex should also give preference to locally manufactured materials, equipment, machinery, and consumables so long as their quality and time of delivery are comparable to internationally available materials, equipment, machinery and consumables. However, such material, equipment, machinery and consumables may be imported if the local price is more than the specified percent higher than the price of such imported items before customs duties, but after transportation and insurance costs have been added.

Canmex Holdings (Bermuda) II agrees and commits to undertake during the exploration period a program of exploration work as a minimum work obligation, which cannot be changed or amended without approval of the Department, which shall be given within the specified period. The work program must be fulfilled even if expenses are in excess of the minimum financial obligations. During the first exploration period, and any extension thereof Canmex Holdings (Bermuda) II shall meet the respective minimum work obligation for such period. Canmex Holdings (Bermuda) II has the right to withdraw before the end of the first exploration period or any extension thereof, and the contract shall terminate on the date a written notice of such withdrawal is received by the Department, provided that the Canmex Holdings (Bermuda) II has fulfilled the minimum work obligations for that period and any extension thereto in effect at the time of withdrawal. In the event of withdrawal, if Canmex Holdings (Bermuda) II has expended less than the minimum amount of work obligations, it shall pay an amount equal to the difference between such minimum amount and the amount actually spent on exploration activities to the Department. Prior to the beginning of each financial year or at a time mutually agreed, Canmex Holdings (Bermuda) II shall prepare an exploration work program and budget for the Agreement area setting forth the exploration operations which Canmex Holdings (Bermuda) II proposes to carry out during the ensuing year.

In case a dispute arises under the contract between the Government and Canmex Holdings (Bermuda) II, the two parties to the dispute shall use their good faith efforts to settle their differences by mutual agreement. Otherwise, the two parties shall submit their dispute to arbitration with 3 arbitrators. The arbitration shall be held in Paris, France, and conducted in English in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce. If no provisions on the conduct of arbitration have been made, the arbitration tribunal shall establish its own procedure.

Canmex Holdings (Bermuda) II may not assign to any person, firm or corporation (other than an affiliated company) in whole or in part, any of its rights, privileges, duties or obligations under the contract without the written approval of the Government, which approval shall not be unreasonably withheld. Canmex Holdings (Bermuda) II shall notify the Government of any assignment to an affiliated company. Approval for an assignment shall be given if the following conditions are met: (i) The assignor has fulfilled all its obligations pursuant to the terms of the contract by the proposed date of the assignment; (ii) The proposed assignee or assignor produces reasonable evidence to the Government of the assignee's financial and technical competence; and (iii) The instrument of assignment includes provisions stating that the assignee is bound by all covenants contained in the contract and any modifications or additions, in writing, that up to such time have been made. A draft of the proposed assignment and all relevant supporting documents shall be submitted for approval to the Government prior to the date of the proposed assignment. The Government has the right to assign its rights and obligations under the contract.

The Government has the right to cancel the contract if: (i) Canmex Holdings (Bermuda) II knowingly submitted in writing any materially false statements to the Department for the execution of the contract; (ii) Canmex Holdings (Bermuda) II assigns any interest contrary to the provisions regarding assignment; (iii) Canmex Holdings (Bermuda) II is adjudicated bankrupt by a court of competent jurisdiction; (iv) Canmex does not comply with the final decision reached as the result of arbitration proceedings conducted under the contract; (v) Canmex Holdings (Bermuda) II intentionally extracts any mineral other than petroleum not authorized by the contractor without the authorization of the Department, except such extractions as may be unavoidable as the result of operations conducted under the contract in accordance with accepted petroleum industry practices and which shall be notified to the Government or its representative as soon as possible; (vi) Canmex Holdings (Bermuda) II commits any material breach of the Agreement; (vii) Canmex Holdings (Bermuda) II causes, by gross negligence or willful misconduct, material or substantial damage to any oil and gas field or any relevant facilities. Such cancellation shall take in accordance with the provisions of this Agreement and, in the event of such cancellation; Canmex Holdings (Bermuda) II has the right to remove from the contract area all its personal property. If the Department finds a reason to cancel the contract, it shall give written notice on the Canmex Holdings (Bermuda) II’s general manager in a legally official manner and receipt of which is acknowledged by him or by his legal agent, to remedy and remove such cause; but if for any reason such service is impossible due to unnotified change of address, publication on the Government's official gazette of such notice shall be considered as validly served upon Canmex Holdings (Bermuda) II. If at the end of the said notice period such cause has not been remedied and removed, the contract may be canceled by the Government.

Canmex Holdings (Bermuda) II and Range Resources and their contractors and subcontractors shall not at any time during the term or for a period of 2 years thereafter, use any information acquired from the petroleum operations during the term for their benefit or disclose to, or use for it the benefit of any other person. Information includes, data, designs, methods, formulas, processes, reserves and any other technical, financial or trade information. Canmex Holdings (Bermuda) II and Range Resources can freely use information for all purposes necessary to meet their respective obligations under the Agreement. They can disclose information to others, to the extent necessary to permit others to perform their obligations, in connection with arranging of financing or assignment; and as required by the applicable law or legislation or as required by any recognized stock exchange in which the securities of Canmex Holdings (Bermuda) II and Range Resources, or an affiliated company are quoted; or in accordance with good petroleum industry practices, provided that such disclosure will not cause any damage or prejudice the Government’s rights. Any disclosure requires the third party to whom the disclosure is made to agree in writing to maintain the same confidentiality requirements applied to Canmex Holdings (Bermuda) II and Range Resources. Any use or disclosure not specifically authorized is subject to the written authorization of the Government.

This contract, its Annexes, and any modification, will be governed and interpreted according to the laws of the Province of British Columbia and the federal laws of Canada applicable therein except the laws which are inconsistent with the contract.

The non-performance or delay in performance by the Department and Canmex Holdings (Bermuda) II (on its own behalf and on behalf of Range Resources) of any obligation under the contract other than the obligation to pay any amounts due or giving notices shall be excused if, and to the extent that, such non-performance or delay is caused by force majeure. The period of non-performance or delay, together with the period necessary for restoration of any damage done during the delay is added to the time given for the performance of the obligation. Force majeure, means any order, regulation or direction of the Department, or the Department of a country (i) asserting jurisdiction over, or (ii) which is the jurisdiction of incorporation of, Canmex Holdings (Bermuda) II and/or Range Resources, whether in the form of law or otherwise, or any act of God, insurrection, terrorism, riot, war, strike (or other labor disturbances), fires, floods or any cause not due to the fault or negligence of the party invoking force majeure, provided that such cause is beyond the reasonable control of the party invoking force majeure. The Government does not incur any responsibility to Canmex (on its own behalf and on behalf of Range Resources) for any damages, restrictions or loss arising in consequence of such cause of force majeure. If the force majeure event occurs during the exploration period or any extension and continues for the specified period Canmex (on its own behalf and on behalf of Range Resources) has the option to terminate its obligations after serving a written notice to the Government without further liability of any kind, except for accrued payments under this contract.

Canmex Holdings (Bermuda) II shall not be subject to any regulations issued by Government from time to time that are inconsistent with the contract.