PROCESSING AGREEMENT

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PROCESSING AGREEMENT

This Processing Agreement (the "Agreement") is made this 31st day of October, 2008, by and between Nord Resources Corporation, a Delaware corporation (hereinafter, "Nord"), and Texas Canyon Rock & Sand, Inc., an Arizona corporation (hereinafter, "Texas Canyon").

BACKGROUND INFORMATION

A. At its Johnson Camp Mine (the "Mine Site"), Nord mines for copper and other minerals. As a byproduct of the mining process, Nord also produces certain rock with no mineral value (the "Waste Rock").

B. Nord is willing to grant to Texas Canyon the exclusive right to process the Waste Rock into decorative rock (the "Decorative Rock") and other rock products, including aggregate.

C. This Agreement sets forth the terms and conditions under which Texas Canyon will process the Waste Rock, return the Decorative Rock to Nord and enter into agreements with others for the sale of the other rock products.

AGREEMENT

NOW, THEREFORE , in consideration of the mutual covenants contained herein, the parties hereto agree as follows:

1. Exclusive Agreement . Nord hereby grants to Texas Canyon the exclusive right to crush and process the Waste Rock at a designated area at the Mine Site. No other company will be allowed to screen or crush Waste Rock at the Mine Site.

2. Term; Production .

(a) The term of this Agreement shall be five (5) years.

(b) If Texas Canyon fails to produce the amount of Decorative Rock required by Section 7 of this Agreement or if Texas Canyon otherwise fails to comply with this Agreement, Nord may cancel this Agreement after giving to Texas Canyon at least thirty (30) days written notice of the deficiencies in performance. Texas Canyon may cure said breach within said thirty-day period. Texas Canyon will be excused from complying with these minimum requirements if Nord in unable to comply with Section 2(c) of this Agreement.

(d) Nord may, in its sole discretion, cancel this Agreement without cause after giving to Texas Canyon at least thirty (30) days written notice. In the event of termination of this Agreement without cause, Texas Canyon may continue to process and sell Decorative Rock and all aggregate products to any party and pay a fee of $1.50 per ton to Nord.

(e) Nord agrees to keep a suitable amount of quality Decorative Rock available for processing by Texas Canyon.

(f) Following termination of this Agreement, Texas Canyon shall:

(i) Retain ownership of all material processed during the term of this Agreement for a period of two (2) years

(ii) Restore the designated area of the Mine Site to good condition generally acceptable under industry practices and in compliance with applicable Environmental Laws.

(iii) Be responsible for the remediation or removal of any spills or releases of hazardous materials or other violations of Environmental Laws which are the responsibility of Texas Canyon under Section 11 of this Agreement.

3. Processing Fee .

(a) All Decorative Rock processed by Texas Canyon shall be the property of Nord. Nord will pay Texas Canyon a processing fee of $6.25 per ton of Decorative Rock (the "Processing Fee") at the time the Decorative Rock is sold by Nord. The Processing Fee is based upon the price of diesel fuel at $4.00 per gallon.

(b) The Processing Fee will be adjusted each calendar quarter based on the average price of a gallon of diesel fuel during the previous quarter.

(i) The Processing Fee will be adjusted up or down at the rate of $0.25 per ton for each $1.00 per gallon change in the cost of diesel fuel. For example, if the price of diesel fuel falls to $3.00 per gallon, the Processing Fee will fall to $6.00 per ton and if the price of diesel fuel rises to $5.00 per gallon, the Processing Fee will rise to $6.50 per ton.

(ii) Pro rata adjustments of less than $0.25 will be made to account for adjustments of less than $1.00.

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(c) The average price of diesel fuel during the prior quarter shall be determined based upon the wholesale price of diesel fuel in Tucson, Arizona, on the first (1st) and fifteenth (15th) day of each month during the quarter with the six (6) prices averaged to determine the price.

4. Waste Rock . Texas Canyon will purchase a minimum of 1,200 tons of Waste Rock per month for purposes of crushing into aggregate. All Waste Rock will be sold "as is" and "where is" without warranty and without any expressed or implied representations or promises of any kind. Purchasers will assume all responsibilities and costs for collecting, producing and handling all Waste Rock used for aggregates.

5. Aggregate . Texas Canyon will control and sell all non-decorative aggregate to third parties. Texas Canyon shall pay Nord a fee of $1.50 per ton for aggregate sold from the Mine Site.

6. Other Contractors . Texas Canyon may agree to allow other companies to manufacture aggregate from the Waste Rock or the one and one-half inch (1½") to four inch (4") rock pile located at the Mine Site. Proceeds from these arrangements will be split evenly between Nord and Texas Canyon.

7. Minimum Production .

(a) Commencing three (3) months after the execution of this Agreement, Nord shall purchase a minimum amount of Decorative Rock from Texas Canyon, averaged and calculated on a quarterly basis as follows:

(i) A minimum of 6,000 tons per month or 18,000 tons in the first quarter;

(ii) A minimum of 8,000 tons per month or 24,000 tons in the second quarter; and

(iii) A minimum of 10,000 tons per month or 30,000 tons in each quarter thereafter.

(b) Texas Canyon shall produce such amounts of Decorative Rock as Nord may request, provided that Texas Canyon shall have a three (3) month ramp-up period if Nord requests more than 15,000 tons per month.

8. Dust Control . Nord will furnish to Texas Canyon a reasonable amount of water for dust control purposes.

9. Insurance . Texas Canyon w/ill be required to provide insurance for its operations at the Mine Site, naming Nord as an insurer. Below are listed the minimum requirements for insurance coverages, terms and limits (the "Required Insurance").

(a) Texas Canyon shall carry commercial general liability as follows:

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(i) Limits:

(1) $1,000,000 each occurrence;

(2) $1,000,000 personal and advertising injury;

(3) $2,000,000 general aggregate; and

(4) $2,000,000 products-completed operations aggregate or equivalent approved by Nord, or current limit carried, whichever is greater.

(ii) Defense costs:

(1) Defense costs shall be paid in addition to and shall not deplete any policy limits.

(2) If defense costs deplete policy limits, then the limits required above shall be increased by $1,000,000 in each category and may be satisfied with an umbrella or excess liability policy.

(iii) No exclusions shall be allowed for:

(1) Bodily injury;

(2) Property damage;

(3) Products liability/completed operations coverage;

(4) Premises operations;

(5) Blanket contract liability (for this Agreement);

(6) Broad-form property damage;

(7) Personal injury;

(8) Independent contractor's liability;

(9) Mobile equipment;

(10) Elevators;

(11) Damage from explosion, collapse and underground hazards; or

(12) Cross-liability, cross-suits or severability of interest.

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(iv) No exclusionary language or limitations shall be allowed, unless agreed to in writing by Nord, for:

(1) Punitive or exemplary damages, fines or penalties (if insurable by law);

(2) Soils or earth movement; or

(3) Any additional insured that are not applicable to the named insured.

(v) There shall be endorsements to the policy for:

(1) Thirty (30) days prior notice to No

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