THIS ASSET PURCHASE AGREEMENT (this “Agreement” ) is made and entered into as of this 20th day of September, 2006, by and among Wits Basin Precious Minerals Inc., a corporation organized under the laws of the State of Minnesota (the “Purchaser” ), Central City Mining Corp., a corporation organized under the laws of the State of Colorado and George Otten, a resident of Colorado, (collectively, the “Sellers” and each individually as a “Seller” ), and Hunter Gold Mining Corp., a corporation organized under the laws of the Province of British Columbia, Canada, Hunter Gold Mining Inc, a corporation organized under the laws of the state of Colorado (collectively the “Covenantors” and each a “Covenantor” ).

A.   Sellers and the Covenantors collectively own or control, among other things, certain real estate and mining claims commonly known as the “ Bates-Hunter Mine and the Golden Gilpin Mill”, and associated real and personal property assets, including, but not limited to, a dewatering plant, mining properties, claims, permits and all ancillary equipment, as then same are held and may be replaced or improved from time to time, including further, all assets as set forth in that certain report by Steven A. Tedesco dated March, 1997, which includes operations conducted at the facilities identified on or about any of the foregoing or as may be listed on Schedule 1.1(a) to this Agreement (the “ Assets” ).

B.   Sellers and the Covenantors collectively also hold certain permit and contract rights relating to the Assets, certain liabilities pursuant to that certain one percent net smelter return royalty payable to the Goldrush Casino and Mining Corporation, which is limited to a maximum of US $1,500,000 for the life of said royalty agreement, as set forth on Schedule A-2 of this Agreement (the “ Royalty Contract ”), upon the terms and conditions set forth in Article 2 of this Agreement, which were also intended by Sellers to be transferred with the Assets, pursuant to the Letter Option, as defined below.

C.   Sellers and/or the Covenantors together have previously entered into a letter agreement dated December 2, 2003, whereby Covenantors (on behalf of themselves and/or Sellers) had granted an option to Ken Swaisland (“ Swaisland ”), whereby Swaisland had the right to purchase the Assets under the terms and conditions contained therein (the “Swaisland Option” ), which option was subsequently amended by those certain letter amendments dated January 14, 2004 and August 4, 2004, which option was assigned to Cardinal Minerals, Inc., by assignment dated January 26, 2004, which assignment was later terminated and cancelled in its entirety by Swaisland dated on or about June 22, 2004, and which option, as amended, was purportedly assigned to Purchaser by Swaisland by assignment dated August 12, 2004, notwithstanding that the Swaisland Option had already expired as of that date. However, the Purchaser, Sellers and Covenantors have entered into a separate option agreement in letter form in substantially the same terms as the Swaisland Option (as amended), which option agreement was further amended by Letter Amendments dated October 26, 2004, December 8, 2004, January 11, 2005, and January 20, 2005 (as so amended, the “ Letter Option ”).

D.   Purchaser, Sellers and Covenantors desire to extend and restate the Letter Option, and to purchase and sell the Purchased Assets as hereafter defined upon the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing facts and premises hereby made a part of this Agreement, and the representations, warranties, covenants and agreements contained herein, 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:

1.1    Purchased Assets. Subject to the terms and conditions set forth in this Agreement, Sellers hereby agree to sell, assign, transfer and deliver, and Purchaser hereby agrees to purchase and accept from Sellers, at and as of the Closing Date (as such term is defined below in Section 3.2(a) ), all of Sellers’ right, title and interest in and to the following properties, assets and rights existing as of the date hereof (collectively, the  “Purchased Assets” ):

(a)    The Bates-Hunter Mine and the Golden Gilpin Mill and related real estate and real estate based mining claims (the “ Acquired Real Property ”);

(b)    water treatment plant;

(c)    surface real estate rights, as shown on the ownership list shown on the attached Schedule 1.1(c) ;

(d)    all mining claims as shown on the ownership list shown on the attached Schedule 1.1(c) ;

(e)    all mining permits and water rights;

(f)    all ancillary equipment used in any of the foregoing, to include all machinery, fixtures, furniture, equipment, materials, parts, supplies, tools and other tangible property owned or controlled by Seller and/or Covenantors, used in connection with the Purchased Assets and located on or about the Acquired Real Property (the “ Purchased Equipment ”) as set forth on the attached Schedule 1.1(f) ;

(g)    all rights under: (i) contracts relating to or creating rights with respect to the Purchased Assets, whether oral or written (the “Contracts” ); and (ii) to the extent assignable, all other contracts and agreements, whether oral or written, used by Sellers and/or Covenantors in the operation of the Purchased Assets and set forth on Schedule 1.1(g)(the “Contracts” );

(h)    all permits, authorizations and licenses used by Sellers and/or Covenantors exclusively in the management or operation of the Purchased Assets;

(i)    all books, records, files and papers relating exclusively to the Purchased Assets created at any time prior to the Closing (as defined in Section 3.3(a) below)by Sellers and/or Covenantors , other than Sellers’ and Covenantors’ respective corporate minute books and related corporate records, and books, records, files and papers not otherwise relating exclusively to the Purchased Assets;

(j)    any and all other properties, assets and rights of Sellers and/or Covenantors which are used exclusively in the management or operation of the Purchased Assets not expressly described, listed or referred to in Section 1.2 below.

1.2    Excluded Assets. The following properties, assets and rights shall not be transferred to Purchaser and shall not be included within the definition of Purchased Assets (collectively, the “ Excluded Assets ”):

(a)    all cash, including but not limited to petty cash, money-market, checking, savings and similar type accounts, and cash equivalents of Sellers as of the Closing Date; 

(b)    all of Sellers’ rights under contracts and agreements that do not constitute Contracts; and

(c)    all of Sellers’ corporate books and records and tax returns, and all rights of Sellers to any tax refunds, including tax refunds for periods prior to the Closing Date relating to the Purchased Assets.

Subject to the terms and conditions of this Agreement and contingent on the Closing occurring, Purchaser shall assume and agree to pay and perform the obligations of Sellers and Covenantors under the Contracts and the Royalty Contract arising after the Closing Date. Except as expressly provided herein, Purchaser shall not assume any other obligation or liability of Sellers or Covenantors that relates to or arises out of ownership or occupancy of the Purchased Assets or Sellers’ or Covenantors’ operations, including but not limited to Sellers’ and Covenantors’ respective operation of the Purchased Assets, prior to the Closing Date, whether absolute or contingent, known or unknown, contractual or otherwise, and specifically including but not limited to any accounts payable, debt, tax liabilities, employee-benefit or pension-plan liabilities, workers’ compensation liabilities, environmental liabilities, other legal liabilities, union or union-related liabilities, employment obligations or agreement, or any applicable change of control liabilities (collectively, the “ Excluded Liabilities ”).

3.1    Letter Option. Sellers and Covenantors acknowledge, under the Letter Option, the Purchaser’s investment of the following sums and improvements to the Purchased Assets, including the Acquired Real Property in consideration of the grant of the option:

(a)    $315,000.00 aggregate cash payment, for “Phase I” of the Schedule A work program (as set forth in the O’Gorman Report work program as shown on Schedule 3.1(a) (the “ Work Program ”)), paid to Gregory Gold Producers Inc.

(b)    $300,000.00 cash payment paid to Gregory Gold Producers, Inc., on or about January 31, 2005.

(c)    $300,000.00 cash payment paid to Gregory Gold Producers, Inc., on or about May 30, 2006.

(d)    $265,000.00 cash payment paid to Gregory Gold Producers, Inc., on or about August 31, 2006.

(All amounts set forth in this Section 3.1, plus other due diligence costs expended by Purchaser, including but not limited to improvements to the assets, attorney’s fees, title and survey costs, environmental report fees and similar acquisition expenses which are in excess of $800,000, are referred to herein as the “ Due Diligence Costs ”)

The parties hereto specifically agree that, to the extent that any of the Work Program results in mineral assets and/or sludge by-products (the “ Interim Assets ”), the Seller hereby specifically conveys to Purchaser full title to and authority to sell such Interim Assets in any manner that Purchaser shall deem to be reasonable, and Purchaser shall be entitled to retain all income from such sale(s) including any amount by which such income exceeds such amounts paid by Purchaser.  

3.2    Purchase Price. In the event that Purchaser elects to proceed to closing, as and for the purchase price of the Purchased Assets, Purchaser agrees to pay and Sellers agree to accept the sum of Six Million Seven Hundred Fifty Thousand Canadian Dollars ($6,750,000.00 CDN) plus Three Million Six Hundred Twenty Thousand (3,620,000) unregistered and restricted shares of the .01 par value common capital stock of Purchaser payable as set out in Section 3.3 hereof (the “ Purchase Price ”). 

3.3    The Closing; Payment of Purchase Price.  

(a)    The closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place by the exchange of Closing documents by Sellers and Purchaser on November 30, 2006, or on such other date mutually agreeable to Purchaser and Sellers (“ Closing Date ”). The Closing will be effective as of the close of business on November 30, 2006.

(b)    Subject to the terms and conditions set forth in this Agreement, the parties agree to consummate, on the Closing Date, the transactions described below.

(i)    Sellers will assign and transfer to Purchaser good, valid and marketable title in and to the Purchased Assets, free and clear of all Liens (as defined in Section 4.4(a) below) by delivering to Purchaser (A) a bill of sale and assignment in substantially the form attached hereto as Exhibit A (the “ Bill of Sale ”), and (B) warranty deeds in substantially the form attached as Exhibit B (the “ Deeds ”).

(ii)    Purchaser shall deliver to Sellers (or Sellers’ nominee) (i) the sum of Two Hundred Fifty Thousand Canadian Dollars ($250,000.00 CDN), (ii) a note payable to Sellers (or Sellers’ nominee) in the original principal amount of Six Million Five Hundred Thousand Canadian Dollars ($6,500,000.00 CDN) in the form of Exhibit C hereto and hereby made a part hereof (“ Note ”), (iii) a deed of trust in the form of Exhibit D hereto and hereby made a part hereof with George Otten (or other Sellers’ nominee) as the trustee for the Sellers   securing the Note (the “ Deed of Trust ”), and (iv) Three Million Six Hundred Twenty Thousand (3,620,000) shares of the unregistered and restricted .01 par value common capital stock of the Purchaser.

(iii)    Each of the parties shall deliver the documents required to be delivered to the other party or parties hereunder.

(iv)    Each Seller shall deliver to Purchaser an Escrow Agreement in the form of Exhibit E hereto (the “Escrow Agreement” ) and a Representation and Stock Restriction Agreement in the form of Exhibit F hereto (the “Representation and Stock Restriction Agreement” ).

3.4    Intentionally deleted.

3.5    Intentionally deleted. 

3.6    Method of Payment . Any cash amounts payable hereunder shall be paid by wire transfer of immediately available funds to an account designated by the intended recipient or as otherwise indicated.

3.7    Intentionally deleted.  

3.8    Allocation of Purchase Price. Each party hereto agrees to report to the Internal Revenue Service such information concerning the allocation of Purchase Price as may be required by Section 1060 of the Internal Revenue Code of 1986, as amended (the “ Code ”). Each party agrees that it will adopt and utilize such agreed values for purposes of completing and filing Form 8594 for federal income tax purposes. No party hereto will voluntarily take any position inconsistent therewith upon examination of its respective federal tax return, in any claim, in any litigation or otherwise with respect to such tax return. The specific allocation of the Purchase Price shall be as set forth below (the “ Allocation Schedule ”).

3.9    Sales and Use Taxes; Other Expenses . 

(a)    Notwithstanding anything in this Agreement to the contrary, Sellers shall pay the cost of all state and local sales and use taxes, if any, transfer taxes and documentary stamp taxes associated with the sale and conveyance of the Purchased Assets pursuant to this Agreement. 

(b)    On or prior to the Closing, Sellers shall pay the full amount of any assessments on the Acquired Real Property that have been levied for periods prior to or that are pending as of the Closing Date. State and local real and personal property taxes, including any utility, water and sewer charges at the Acquired Real Property, shall be prorated between Sellers and Purchaser as of the Closing Date on the basis of the tax bills payable during the year of the Closing or, as applicable, utility bills for the period including the Closing Date. Purchaser shall pay the full amount of such taxes and utility charges upon receipt of any such bills for charges incurred for periods after the Closing Date, and Sellers, within fifteen (15) days of notice from Purchaser, shall reimburse Purchaser for the amount of Sellers’ pro rata share of such taxes and utility charges.

(c)    Except as otherwise expressly provided in this Agreement, Sellers, Covenantors and Purchaser shall each pay their own respective costs and expenses in connection with this Agreement and the transactions contemplated by this Agreement, including any finder’s fees, brokerage, legal, tax, and advisory fees and expenses, or other commission arising by reason of any services rendered or alleged to have been rendered to such party in connection with this Agreement or the transactions contemplated by this Agreement.

To induce Purchaser to enter into this Agreement, Sellers hereby jointly and severally represent and warrant to Purchaser as indicated below. In addition, Covenantors jointly and severally (as between themselves, but only severally with the Sellers) hereby make those representations and warranties to the Purchaser as indicated below.

4.1    Organization and Good Standing . 

4.1.1   Central City Mining Corp. is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation. Central City Mining Corp. has the requisite power to own, operate, use and/or lease the Purchased Assets, as applicable, and to conduct the operations of the Purchased Assets as presently being conducted by it and/or by the Covenantors, including any and all permits required by any public authority for such operations such as permits, or regulatory authorizations. Central City Mining Corp. is qualified or otherwise authorized to transact business as a foreign corporation in the state of Colorado.

4.1.2   The Covenantors are each corporations duly incorporated, validly existing and in good standing under the laws of their respective jurisdictions of incorporation. The Covenantors each have the requisite power to own, control, operate, use and/or lease the Purchased Assets, as applicable, and to conduct the operations of the Purchased Assets to the extent presently being conducted by it, including any and all permits required by any public authority for such operations such as permits, or regulatory authorizations. Hunter Gold Mining Corp. is qualified or otherwise authorized to transact business in the state of Colorado.

4.1.3   George Otten has the requisite power to own, operate, use and/or lease the Purchased Assets, as applicable, and to conduct the operations of the Purchased Assets as presently being conducted, including any and all permits required by any public authority for such operations such as permits, or regulatory authorizations.   

4.2    Authority; Binding Obligation . Each corporate Seller and Covenantor has the requisite corporate power and authority to execute and deliver this Agreement and perform its obligations hereunder. Each corporate Seller’s and Covenantor’s execution and delivery of this Agreement, and performance of its covenants and agreements hereunder, have been duly authorized by all necessary corporate action of each such corporate Seller and Covenantor. This Agreement has been duly executed and delivered by each Seller and Covenantor, and constitutes a valid and binding obligation of each Seller and Covenantor, and is enforceable against each Seller and Covenantor in accordance with its terms.

4.3    No Conflict.

(a)    Neither the execution and delivery of this Agreement, nor the consummation or p