Mineral Rights Option Agreement

3 Months Ended

Jan. 31, 2016

On September 11, 2013, the Company entered into an Option Agreement ("Option") with Gordon Davidson ("Optionor") whereby the Company was granted an exclusive option to acquire a fifty-one percent (51%) undivided interest in and to the Knott Lake Property ("Property") consisting of a single patented mining claim (MR6061) in Cario Township located about 1.3 km northeast of the community of Matachewan in northeast Ontario, Canada.

In order to exercise the Option, the Company will be required to:

(a)	incur Exploration Expenditures of $20,000 on or before the first anniversary date of the Option (Paid);

(b)	incur additional Exploration Expenditures of $35,000 on or before the second anniversary date of the Option (Paid September 2014); and

(c)	incur additional Exploration Expenditures of $50,000, and grant a cash payment of $25,000 on or before the third anniversary date to this Option.

To date the Company has incurred the following exploration expenses:

Date	Amount

October 31, 2013	$	20,525
October 31, 2014		37,100
October 31, 2015		13,373
January 31, 2016		3,150
Total exploration expenses	$	74,148

If and when the Option has been exercised an undivided fifty-one percent (51%) right, title and interest in and to the Property shall vest in the Company free and clear of all charges, encumbrances and claims.

Upon the Company being deemed to have earned a fifty-one percent (51%) interest in the Property, the Company and the Optionor shall participate in a joint venture (the "Joint Venture") for the purpose of further exploration and development work on the Property and if warranted, the operation of one or more mines on the Property.

The participating interests of the parties at the time of the Joint Venture is formed shall be:

The Company 51%

The Optionor 49%

Each party shall be responsible for payment of its proportional share (based on its participating interest) of the operating and capital costs of the Joint Venture's operations, including reclamation and remediation obligations and any security required thereof. The Optionor shall retain a 2% Net Smelter Royalty in future production from the Property regardless of its participating interest in the Joint Venture.

If the participating interest of parties are:	Their deemed expenditures upon formation of the Joint Venture shall be:

The Company - 51%	$	105,000
The Optionor - 49%	$	100,882

Any Exploration Expenditures made or incurred by the Company in excess of the Exploration Expenditures required to earn its interest in the Property shall be credited to the Company's contribution to the first work program after formation of the Joint Venture and shall not automatically dilute the participating interest of the Optionor on formation.

The Option shall terminate:

(a)	upon the Company failing to incur or make any expenditures which must be incurred in exercise of the Option; or

(b)	at any other time, by the Company giving notice of such termination to Optionor.

If the Company is unable to make the payment on or before the third anniversary date of the Option the Company will lose its rights to the minerals on the Knott Lake Property.

Rosewood Resources, Inc. 10-Q