Amendment to Operating Agreement for Pediment Gold LLC between Nevada Gold Exploration Solutions, LLC and Battle Mountain Gold Exploration Corp.

Summary

This agreement is between Nevada Gold Exploration Solutions, LLC (NGXS) and Battle Mountain Gold Exploration Corp. (BMGX) and amends the Operating Agreement for Pediment Gold LLC. It outlines the parties’ obligations regarding two gold exploration projects, funding requirements, and management of project funds. BMGX must invest specific amounts to earn interests in the properties, while NGXS submits exploration plans. The agreement also sets procedures for land acquisition, budget approvals, and fund dispersal, and clarifies rights if either party does not act within set timeframes. Other terms of the original agreement remain in effect.

EX-10.2 2 doc2.txt Exhibit 10.2 NEVADA GOLD EXPLORATION SOLUTIONS, LLC 101 BROWNSTONE DRIVE RENO, NEVADA 89431 PHONE: 775 ###-###-#### February 24, 2005 Mr. Jim McKay Battle Mtn. Gold Exploration Corporation One East Liberty Street, Sixth Floor, Suite 9 Reno, Nevada 89504 Subject: Counter Proposal to BMGX's Counter Proposal of February 21, 2005 Dear Jim: With reference to your letter proposal of 21 February 2005, to modify the Operating Agreement of Pediment Gold, NGXS accepts the proposed modifications. If agreed to by BMGX, NGXS acknowledges that this Amendment will cure the default stipulated in the Letter of 02/11/05. The breach of contact stipulated in the letter of 02/17/05 will be cured by the return of $704,205.71 to the PGL account and dispersal of those funds as covered in point 5 below. 1. The Hot Pots and Fletcher Junction project areas become the sole site specific project obligations between BMGX and NGXS under Pediment Gold LLC as follows: a. Battle Mountain Gold Exploration Corp. (BMGX) is required, on an individual property basis, to spend $500,000 (reflects deduction for Field Examination Stage expenditures to date) on the technical evaluation of each property (assuming the project moves through the Discovery Drilling Stage) within 12 months of commencement of first drilling program to earn a 70% interest and become Operator, with NGXS being carried for a 30% interest, subject to permitting and drill rig availability; b. Land Acquisition Costs, together with all expenditures in 1a. above, will count towards BMGX's earn-in of and upon expenditure of Land Acquisition Costs BMGX will own an accelerated vested 50% interest in each property and; c. Third party farm out budgets will count towards BMGX earn-in; d. BMGX would have the option of spending an additional $750,000 on a per property basis to earn up to an 80% interest in that property. These funds are in addition to the $3,250,000 as defined by the OA and within 24 months of commencement of first drilling program on that property. 2. Fletcher Junction Approved Budget: a. Complete Land Acquisition (~$90,000 spent to date) by Leasing Hilton Trust Land $10,000 b. Submit Permits for Drilling on BLM/USFS Land, ASAP c. Drill 6, vertical to angle RC holes averaging 600' TD for 3,600' @ $20.00/ft, ASAP, $ 72,000 d. Contingency $ 28,000 ----------- --------- $110,000 Page 1 of 3 3. Hot Pots Project Approved Budget: a. Complete Land Acquisition (~$30,000 spent to date) $60,000 b. Initiate drilling on Tomera Private Land (no permits required) Drill 6, vertical to angle RC holes averaging 600' TD for 3,600' @ $20.00/ft, ASAP, $72,000 c. Contingency $28,000 - -------------------------------------------------------------------------------- $160,000 4. Funding for Phase II Reconnaissance Sampling: a. Reconnaissance Sampling to be started ASAP with results and property recommendations available by Jan. 1, 2006. $325,000 - -------------------------------------------------------------------------------- Total AFE for Board Approval $595,000 5. BMGX will control all funds, all PGL invoices and expenditures will be paid directly by BMGX according to the following Authority for Expenditure Procedure (AFE): a. BMGX opens a separate savings account to hold all current PGL funds ($704,205.71) plus future cash calls as required by the previously adopted contribution schedule (as adjusted by letter agreement of August 15, 2004) to assure funds are available for anticipated land acquisition and project expenditures as outlined by the OA. A failure to deposit funds or a transfer of funds for any purpose other than funding PGL activities will constitute a default and BMGX's willful and immediate termination of it's intent to continue funding PGL activities. Any funds transferred out will require the prior notification of all BMGX Board Members and NGXS and the signature approval of three BMGX Board Members. b. NGXS is responsible for submitting exploration plans and budgets to BMGX for Board approval. c. As the BMGX Board approves funds for expenditure, those funds will be transferred into the current joint PGL working checking account and work shall begin under the direction of NGXS as scheduled. Transfer of the entire approved amount is required to ensure program continuity, to secure volume discounts from suppliers, posting bonds to government agencies, potential escrow demands of contractors (i.e. geochemists, drilling companies, etc.) and drilling reclamation activities. Dispersal of funds from the PGL account will require the signature of one BMGX and one NGXS member. Upon signature approval of this option, $595,000 will remain in the PGL account, and the balance of the remaining funds will be deposited in the BMGX savings account as in a) above. 6. All sole site specific project areas generated by the NGXS reconnaissance water sampling program presented in the submitted Pediment Gold Exploration Program, Completion of Field Examination Stage Summary Report with Recommendations for Land Acquisition on Thirteen Pediment Gold Targets, dated January 11, 2005 as presented by the Target Summary Tabulation on page 8, remain available to BMGX for Land Acquisition within the context of the OA, so long as reconnaissance water sampling activities are being funded. After nine months from the submittal date of the report, NGXS has the right to acquire land on any of the identified properties, not acted upon by BMGX. This right includes the right to negotiate and enter into agreements with third parties outside of the OA. Any property acquired or so acted upon by NGXS becomes the sole property of NGXS with no interest of any kind being retained by BMGX or PGL. Page 2 of 3 7. For future Field Examination Stage Summary Reports and recommendations, BMGX has ten (10) days to act upon those recommendations for specific property advancements within the context of the OA. After nine months from the submittal date of the report, NGXS has the right to acquire land on any of the identified properties, not acted upon by BMGX. This right includes the right to negotiate and enter into agreements with third parties outside of the OA. Any property acquired or so acted upon by NGXS becomes the sole property of NGXS with no interest of any kind being retained by BMGX or PGL. 8. Jim McKay's remuneration and BMGX's infrastructure costs in Reno will be charged to Pediment Gold LLC, but will not count toward earn-in calculations. 9. To simplify accounting NGXS will forgo the 3% Management Fee (OA, Exhibit G, pg 102) and all PGL related activities conducted by KNT and WAH will be billed directly to the PGL working account at a flat rate of $8,000/month per man plus actual expenses. 10. Excepting the proposed changes herein, The Members and Operating Agreements continues on for all other terms and conditions. Any reasonable legal costs incurred by either party associated with either reviewing this proposal and/or modifying either the Members and OA will be borne solely by BMGX. Sincerely, /s/ James E. McKay - ------------------------------------ James E. McKay President Battle Mountain Gold Exploration Corp. Agreed to this 24th day of February, 2005 Nevada Gold Exploration Solutions, LLC /s/ Kenneth N. Tullar - ------------------------------------ Kenneth N. Tullar President Cc: Wade Hodges Paul Taufen Mark Kucher Brian Labadie Tony Crews Page 3 of 3