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SECURITIES & EXCHANGE COMMISSION EDGAR FILING

American Sands Energy Corp.

Form: 10-K

Date Filed: 2012-06-22

Corporate Issuer CIK: 1432001Symbol: AMSESIC Code: 6770Fiscal Year End: 03/31

© Copyright 2014, Issuer Direct Corporation. All Right Reserved. Distribution of this document is strictly prohibited, subject to theterms of use.

UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)T ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2012 £ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-53167

AMERICAN SANDS ENERGY CORP.(Exact name of registrant as specified in its charter)

Delaware 87-0405708

(State or other jurisdiction of incorporation or organization) (IRS employer identification number)

4760 S. Highland Dr., Suite 341, Salt Lake City, Utah 84117(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (801) 699-3966 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, Par Value $0.001 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes £ No T Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes T No £

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file suchreports), and (2) has been subject to such filing requirements for the past 90 days. Yes T No £ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, everyInteractive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (orfor such shorter period that the registrant was required to submit and post such files). Yes T No £ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not becontained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III ofthis Form 10-K or any amendment to this Form 10-K. £ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smallerreporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 ofthe Exchange Act. Large accelerated filer £ Accelerated filer £ Non-accelerated filer £ Smaller reporting company T

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes £ No T

EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the averagebid and asked price of such common equity as of the last business day of the registrant’s most recently completed second fiscalquarter was $12,021,555. The number of shares outstanding of the registrant’s common stock on June 6, 2012, was 28,766,741.

DOCUMENTS INCORPORATED BY REFERENCE

Document Description 10-K PartPortions of the Registrant's proxy or information statement related to its 2012 Annual Meeting of Stockholders to befiled pursuant to Regulation 14A or 14C within 120 days after Registrant's fiscal year end of March 31, 2012 areincorporated by reference into Part III of this Report.

III


TABLE OF CONTENTS

PagePART I 4 ITEM 1. BUSINESS 4 ITEM 1A. RISK FACTORS 13 ITEM 1B. UNRESOLVED STAFF COMMENTS 23 ITEM 2. PROPERTIES 23 ITEM 3. LEGAL PROCEEDINGS 26 ITEM 4. MINE SAFETY DISCLOSURES 26 PART II 26 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER

PURCHASES OF EQUITY SECURITIES26

ITEM 6. SELECTED FINANCIAL DATA 27 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS27

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 31 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 31 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL

DISCLOSURE31

ITEM 9A. CONTROLS AND PROCEDURES 31 ITEM 9B. OTHER INFORMATION 32 PART III 32 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 32 ITEM 11. EXECUTIVE COMPENSATION 32 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED

STOCKHOLDER MATTERS32

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 32 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 33 PART IV 33 ITEM 15. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES 33 SIGNATURES 36

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Forward-Looking Statements The statements contained in this annual report on Form 10-K that are not historical facts represent management’s beliefs andassumptions based on currently available information and constitute “forward-looking statements.” All statements, other thanstatements of historical or present facts, including the information concerning our future operations, business strategies, need forfinancing, competitive position, potential growth opportunities, ability to retain and recruit personnel, the effects of competition and theeffects of future legislation or regulations are forward-looking statements. Forward-looking statements can be identified by the use offorward-looking terminology such as the words “believes,” “intends,” “may,” “should,” “anticipates,” “expects,” “could,” “plans,” orcomparable terminology or by discussions of strategy or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, such statements by their nature involve risks and uncertainties that could significantly affectexpected results, and actual future results could differ materially from those described in such forward-looking statements. Among the factors that could cause actual future results to differ materially are the risks and uncertainties discussed in this report.While it is not possible to identify all factors, we continue to face many risks and uncertainties including, but not limited to, changes inthe general economic downturn; a further downturn in the securities markets; and/or uncertainties associated with our ability to obtainoperating capital. Should our underlying assumptions prove incorrect or the consequences of the aforementioned risks worsen, actualresults could differ materially from those expected. We disclaim any intention or obligation to update publicly or revise suchstatements whether as a result of new information, future events or otherwise. Throughout this report, unless otherwise designated, the terms “we,” “us,” “our,” “the Company” and “our company” refer to AmericanSands Energy Corp., a Delaware corporation, and its wholly owned subsidiary, Green River Resources, Inc., a Utah corporation.

PART I ITEM 1. BUSINESS Overview American Sands Energy Corp. (“ASEC”) is a development stage company that proposes to engage in the clean extraction of bitumenfrom oil sands prevalent in the Mountain West region of North America using proprietary technology. Since the project’s inception, wehave been engaged in the business of acquiring and developing oil sand assets and technologies used to separate the oil containedin oil sands. The Company anticipates that its primary operations will include the mining of oil sands, the separation of oil productstherefrom and the sale of oil and oil by-products. We have obtained a license for a hydrocarbon extraction process that separates oil and other hydrocarbons from sand, shale, dirt andother substances, without leaving behind toxins or other contaminants. We are currently developing our first project on certainhydrocarbon and mineral leases which cover approximately 1,760 acres near Sunnyside, Utah (the “Sunnyside Project”). Inaccordance with the standards contained in Rule 4-10(a) of the SEC’s Regulation S-X, these leases contain no proven reserves of oilor gas. However, we have obtained an independent Resource Audit and Classification report dated May 29, 2009, from a majorinternational geology and mining consulting firm describing the quantity and quality of the bitumen resource estimated to be locatedon our leases. To date, we have acquired extensive bitumen resources, a working knowledge of the process technology and have initiatedapplications for mining, environmental and other permits required to build a commercial plant (the “Commercial Facility”). Additionalwork to be completed as part of the project development phase includes: 1. Final mine planning and civil engineering for the Sunnyside Project. 2. Acquisition of additional property in areas of interest in order to block-up properties into logical and

economical mining units. 3. Determination of technical and economic parameters for the commercial scale use of the process, including

engineering. 4. Preparation of environmental impact statements and receipt of federal and state regulatory agency approval

for the Commercial Facility. 5. Completion of environmental and permitting work for the Commercial Facility.

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Contemporaneously with the pursuit of the permitting of the project, we will also finalize engineering and equipment for the 3,000barrel per day plant. We have retained a leading engineering firm in the North American oil sands extraction industry, AMEC BDRLimited, and they have completed an engineering and feasibility study with respect to a commercial plant that will produce up to 3,000barrels of oil per day. We have also retained an environmental engineering and consulting firm to assist us in preparing and filing thenecessary mine and environmental permits to operate a large mine. Based on the information from our consultants, we believe thatadditional financing of approximately $50 million will be required to procure and install the necessary equipment to begin operations ofa plant that we believe will produce approximately 3,000 barrels per day of bitumen. We performed lab and pilot plant tests on oil sands from the Utah Green River Formation to prove the viability of the technology and tounderstand several key elements in the process. We hired an independent engineering firm, AMEC BDR Limited, to witness the pilotplant tests and to manage the lab work and review the results. The results of these tests are summarized as follows: — The bitumen was completely separated from the sand, leaving the sand “oil” free.

— No sand particles or other contaminates were found in the separated bitumen.

— The sand product contained less than 2 ppm of solvent residue and presents no environmental liability and can be returned tothe mine site or sold.

— Solvent losses to the bitumen product were also insignificant. Consequently, because the solvent is recycled with minimalloss in a closed loop system, make-up solvent costs are minimal.

— The compositional characteristics of the bitumen were not altered by the process; therefore, the bitumen will be suitable forupgrading and refining to saleable products by conventional refining technology.

— The composition and properties of the solvent recovered by the process were not altered by the process; therefore, thesolvent can be recycled through the process without further conditioning or processing.

Based on the results of those tests, the engineering firm evaluated the feasibility and costs of scaling the process into a plant that willinitially process up to 3,000 barrels per day, with possible future expansion of facilities of up to 50,000 barrels per day, subject tomarket conditions and the availability of financing on terms acceptable to the Company. In addition to the initial tests that were performed in 2006, we recently began testing oil sand ore from the Sunnyside Project on a newsystem designed by SRS Engineering International, pursuant to a current license agreement. These tests will provide additionalinformation to be used in the design of the 3,000 barrel per day facility. Historical Development of the Company We were originally incorporated in the State of Utah on April 7, 1983, as Carbon Technologies, Inc. for the purpose of engaging in thecarbon fiber technology business. Subsequently, we became inactive and in 2005 we changed our corporate domicile to the State ofNevada and our name to Millstream Ventures, Inc. On October 19, 2011, we again changed the name of the Company to AmericanSands Energy Corp. and changed the domicile of the Company to the State of Delaware. In 2011, we actively began the search for anew business venture. On June 3, 2011, we completed a reverse acquisition transaction with Green River Resources Corp., aCanadian company formed in 2004 (“GRC”) and its wholly owned subsidiary, Green River Resources, Inc., a Utah corporationformed in 2005 (“GRI”). Pursuant to certain leases, these entities held undivided interests in mining properties for oil sand extractioncovering approximately 1,760 acres. GRI had also entered into an operating agreement with an affiliate to provide rights to aproprietary process to extract bitumen from oil sands. On October 18, 2011, we effected a reverse split of all outstanding shares of common stock at the rate of one share for each twoshares outstanding. As a result of the reverse stock split, the number of shares outstanding on the effective date of the reverse splitwas reduced from 44,104,325 to 22,052,163. Unless otherwise stated herein, the number of shares designated in this annual reportgives effect to this reverse split.

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Reverse Acquisition In early April 2011, in contemplation of a reverse acquisition transaction and to provide funding for the search for a new businessventure, we sold 6,770,000 restricted shares of our common stock to LIFE Power & Fuels, Inc. (“LIFE”) for gross proceeds of$13,540. These shares represented approximately 39% of our outstanding common stock at the time. We also appointed Edward P.Mooney and Daniel F. Carlson, affiliates of LIFE, as directors. Subsequently in mid April 2011 we completed a second non-publicoffering of 1,755,062 restricted shares of our common stock for gross proceeds of $100,004 to satisfy our outstanding liabilities at theclosing of the reverse acquisition transaction (including $78,053 to repay outstanding promissory notes, $17,500 for legal fees, and$1,414 for transfer agent fees) and to retire certain outstanding shares of common stock at the closing. In late April 2011, we commenced negotiations with William C. Gibbs as a principal of GRC in order to provide access to funding forthe planned operations of GRI. On May 5, 2011, we entered into a Stock Exchange Agreement dated April 29, 2011, as amended onJune 3, 2011, with GRC, and the shareholders of such entity (the “Sellers”). Pursuant to the terms of the agreement we agreed toissue shares of our common stock to the Sellers in exchange for all of the outstanding equity securities of GRC. In addition, weagreed to reserve shares of our common stock for issuance upon exercise of outstanding special warrants of GRC assumed by us atclosing (the “Special Warrants”), upon exercise of outstanding bridge warrants assumed by us at closing, and for conversion of anoutstanding promissory note of GRC also assumed by us at closing. Subsequently on December 6, 2011, we effected a mandatoryexercise of the Special Warrants and issued 5,624,752 shares to all of the holders of the GRC Special Warrants. Closing of the agreement was held on June 3, 2011. At the closing we issued 11,334,646 shares of common stock to the Sellers inexchange for all of the outstanding shares of GRC. We also acquired and cancelled 8,804,102 shares of outstanding common stockheld by a single shareholder and former principal of our company for $17,436. As a result of the closing, the Sellers obtainedapproximately 56% of the outstanding stock of the Company. We also assumed a 6% convertible promissory note payable in theamount of $214,281 to Bleeding Rock LLC (“Bleeding Rock”), an entity managed by William C. Gibbs and the majority shareholder ofGRC. This note is convertible into 535,704 common shares. We further assumed outstanding warrants of GRC which grant the rightto purchase up to 244,420 common shares at $0.40 per share. These warrants expire on March 31, 2013. Management at the timeresigned and William C. Gibbs and Mark F. Lindsey were appointed to replace them. We also subsequently appointed GayleMcKeachnie and Barry Larson as directors shortly following the closing. We also granted options to purchase 3,087,500 shares ofcommon stock at $0.40 per share to persons designated by GRC and issued warrants to purchase 231,920 shares of common stockat the price of our next offering to persons designated by GRC. Of these options granted, 1,974,000 were granted to Mr. Gibbs,875,000 were granted to Mr. Gereluk, who became our Chief Operating Officer at closing, 50,000 were granted to Mr. Larsen, 75,000were granted to Mr. Lindsey, and 37,500 were granted to Mr. McKeachnie. The options expire seven years from the date of grant andthe warrants expire two years from the date of issuance. Based on the reverse merger transaction, the public company is no longerconsidered to be a shell company. Prior to the closing we commenced a non-public offering of 10% convertible promissory notes (the “Notes”) and warrants exercisablethrough April 30, 2014 (the “Warrants”) to raise operating funds for GRI. At the closing we received approximately $770,000 infunding from this offering. The offering continued after the closing and was completed on January 31, 2012. The Notes bear interestat the rate of 10% per annum. Principal and interest on the Notes will be due and payable on or before April 30, 2014. The Notes maybe prepaid by the Company upon 30 days’ prior notice, are convertible at $0.50 per share, and are subject to mandatory conversionby us upon completion of a debt or equity financing of $10,000,000 or more. The Warrants are exercisable in whole or in part at anytime through April 30, 2014, at $0.50 per share. In the aggregate, we issued Notes in the total amount of $1,515,000 which areconvertible into 3,030,000 shares of common stock of the Company, and Warrants to purchase a total of 3,038,667 common shares.None of these securities were or will be registered under the Securities Act and may not be offered or sold in the United Statesabsent registration or an applicable exemption from registration requirements.

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Dissolution of GRC On December 31, 2011, GRC was voluntarily dissolved and the Company assumed all of the outstanding stock of GRI, which was thesole asset of GRC at the time of dissolution. GRI is the principal operating entity for the Company and holds the Company’s miningclaims. As a result of the dissolution of GRC, GRI is now the sole subsidiary, of and is wholly owned by, the Company.

License, Development and Engineering Agreement and Termination of Operating Agreement Effective January 24, 2012, we entered into a License, Development and Engineering Agreement with Universal Oil Recovery Corp.and SRS International (the “License Agreement”) whereby we were granted an exclusive non-transferable license to use certaintechnology in our proposed business to extract bitumen from oil sands. The territory covered by the agreement includes the State ofUtah and any other geographic location in which a future designated project is commenced by or through the Company. Inconjunction with the License Agreement, we terminated our operating agreement with Bleeding Rock under which Bleeding Rock hadlicensed rights to use similar technology to GRI. The License Agreement also designates the Company as an “authorized agent” inrepresenting the owner of the technology in future projects. William C. Gibbs, the Chief Executive Officer, a director, and principalshareholder of the Company, is an owner and manager of Bleeding Rock. The License Agreement requires the licensing parties to provide demonstration equipment for the process by which their proprietarysolvent extracts bitumen from oil sands and to demonstrate the process on up to 150 tons of oil sands. The term of the LicenseAgreement is for 20 years and so long thereafter as production of products using the technology is commercially and economicallyfeasible. Upon successful completion of the demonstration project, the Company and the owners of the technology have agreed to enter into aproject development agreement whereby the Company and such owners will engineer, design and construct a facility capable ofprocessing up to 3,000 barrels per day of bitumen from oil sand ore. The owners of the technology may terminate the License Agreement if the Company fails to use commercially reasonable efforts todevelop its oil sands projects. The Company may terminate the agreement if the technology owners breach any of their obligationsunder the agreement, including representations that the solvent is suitable for the Company’s Sunnyside Project, or if thedemonstration project is unsuccessful. In conjunction with entering into the License Agreement, we also entered into a Termination Agreement dated January 24, 2012, withBleeding Rock (the “Termination Agreement”). The purpose of the Termination Agreement was to terminate the Operating Agreementdated May 31, 2005, as amended, between Bleeding Rock and GRI (the “Operating Agreement”). Pursuant to the OperatingAgreement GRI had obtained the rights through Bleeding Rock to utilize a process for the development, engineering and extraction ofhydrocarbons from oil sands. In light of conversations with potential investors, management determined that having the technologylicensed directly to the Company rather than through Bleeding Rock would be beneficial to fund raising prospects. As a result, theCompany entered into the License Agreement described above. In partial consideration for Bleeding Rock agreeing to terminate theOperating Agreement, we entered into a royalty agreement with it. Under the terms of the Gross Royalty Agreement we are obligatedto pay a royalty equal to 1.5% of the gross receipts from future projects using the technology, excluding the current project inSunnyside, Utah. Bleeding Rock subsequently assigned all of its interest in the Gross Royalty Agreement to Hidden Peak PartnersLC, an entity managed and partially owned by Mr. Gibbs (“Hidden Peak”). The Termination Agreement also contains mutual releasesby the parties relating to the Operating Agreement. As of the date of the Termination Agreement, GRI owed $1,446,551 to Bleeding Rock payable under the terms of the OperatingAgreement. In connection with the termination of the Operating Agreement, GRI issued a 5% convertible promissory note to BleedingRock for this amount. The note is due and payable on January 24, 2013, and is convertible into shares of our common stock any timebefore maturity at the rate of one share for each $0.50 of principal or interest converted. Under the terms of the promissory note, GRIis solely responsible for the repayment of the note. Bleeding Rock subsequently assigned all of its interest in this promissory note toHidden Peak.

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Business of GRI

Leases and Resources We have acquired by assignment from Bleeding Rock certain hydrocarbon and mineral leases. The leases cover approximately 1,760acres within the Sunnyside oil sand deposit. In accordance with the standards contained in Rule 4-10(a) of the SEC’s Regulation S-X,these leases contain no proven reserves of oil or gas. However, we have obtained an independent Resource Audit and Classificationreport from a major international geology and mining consulting firm describing the quantity and quality of the bitumen resourceestimated to be located on our leases as of May 29, 2009. The Resource Audit and Classification was completed in accordance withthe provisions of the National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101). Such evaluation ofour estimates of resources under NI 51-101 was carried out in accordance with the standards set out in the Canadian Oil and GasEvaluation (COGE) Handbook, prepared jointly by the Society of Petroleum Evaluation Engineers and the Canadian Institute ofMining, Metallurgy & Petroleum. Those standards require that the evaluator plan and perform an evaluation to obtain reasonableassurance as to whether the reserves are free of material misstatement. An evaluation must also include an assessment as towhether the reserves data are in accordance with the principles and definitions presented in the COGE Handbook. The estimateprovided in this report is classified as contingent resources according to the guidelines set forth in NI 51-101 and COGE. The projectresource calculation is contingent upon completion of additional exploration drilling, processing and extraction analysis, detailedeconomic analysis, evolution of legal mining rights, and environmental evaluations. There is no certainty that the project will becommercially viable to produce any portion of the resource. As a result of the differences between the U.S. rules and Canadianstandards governing disclosure of reserve or resource estimates, differing estimates of reserves or resources available under ourleases are reported, and may in the future be reported, between our website and our periodic reports filed with the SEC. The practice of preparing production and reserve quantities data under NI 51-101 differs from the U.S. rules. The primary differencesbetween the two reporting requirements include: (i) NI 51-101 requires disclosure of proved and probable reserves and the U.S. rulesrequire disclosure of only proved reserves; (ii) NI 51-101 requires the use of forecast prices in the estimation of reserves and the U.S.rules require the use of 12-month average prices which are held constant; (iii) NI 51-101 requires disclosure of reserves on a gross(before royalties) and net (after royalties) basis and the U.S. rules require disclosure on a net (after royalties) basis; (iv) the Canadianstandards require disclosure of production on a gross (before royalties) basis and the U.S. rules require disclosure on a net (afterroyalties) basis; and (v) NI 51-101 requires that reserves and other data be reported on a more granular product type basis thanrequired by the U.S. rules.

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Our Process The following diagram demonstrates the stages of the process to remove bitumen from the oil sands using our proprietary bitumenrecovery system:

Our process starts with the mixing of oil sand ore with a proprietary solvent. The solvent immediately separates the hydrocarbonscontained in the ore from the inorganic insoluble material such as sand, rock and clay. We utilize much less heat than traditional orcompeting technologies. The liquid hydrocarbon/solvent mix is then separated from the clean sand by gravity. The sand is heated to evaporate the solvent andthe resulting solvent vapors are condensed and reused. The clean sand can be returned to the mine site as reclamation material orsold for industrial purposes. The liquid hydrocarbon/solvent mix is subject to a simple, refluxed, low pressure, medium temperature distillation process to separatethe solvent from the recovered hydrocarbon. The solvent distilled from the recovered hydrocarbon is condensed and reused. Theextracted bitumen is transported to a refinery. As a result, tailing ponds and other environmental hazards are eliminated from the process, with the attendant reduction in costs andeffects on the environment. In connection with the engineering and development of the technology, we have incurred costs of approximately $436,408 over thepast year; we did not conduct any research and development in the year ended March 31, 2011.

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Resource Base and Mine Plan Of the 24 states in the United States that contain oil sand deposits, approximately 90% of the USGS mapped mineable resource islocated in Utah, where in excess of 25 billion barrels of oil are in place. There are eleven oil sands deposit areas located in Utah. Theseven major areas are Sunnyside, P. R. Spring, Asphalt Ridge, White Rocks, Tar Sand Triangle, Circle Cliffs, and Hill Creek. Three ofthese seven areas, Tar Sand Triangle, Circle Cliffs, and Hill Creek have substantial constraints to resource development includingenvironmental drawbacks related to their location on Indian Reservations and/or National Parks, significant overburden, lack of richore, and high sulfur content. The prime oil sand properties include Sunnyside, P. R. Spring, Asphalt Ridge and White Rocks. We have obtained leases in the Sunnyside area, on private property (not public lands). We currently hold an undivided 60% interestpursuant to two freehold hydrocarbon and mineral lease agreements in Section 2, East Half and North West quarters of Section 3Township 14 South, Range 14 East, SLM containing approximately 1,120 acres; and an undivided 21.67% interest pursuant to twofurther freehold hydrocarbon and mineral lease agreements in the North West quarter of Section 3, East half and North West quarterof Section 10, Township 14, Range 14 East, SLM containing approximately 640 acres, pursuant to which we have the right to extractbitumen from the land. The leases are for a primary term ending December 31, 2014, and are extended thereafter for so long as anaverage of 500 barrels of oil is produced per day, subject to certain acceptable interruptions. We have reviewed previous resource estimates prepared for Chevron and Amoco, as well as USGS estimates of mineable bitumenon our leases. In addition, we retained an outside firm to provide us with a Resource Audit and Classification report which was donein accordance with the provisions of the NI 51-101. We also have access to and have reviewed detailed mining and operational plans prepared for Amoco with respect to our leasesprepared in the mid 1990s. The Company intends to utilize these previous studies in finalizing a mine plan and operations.

Overall Market for Oil and Petroleum Products According to the U.S. Energy Information Administration (“EIA”), estimates of world crude oil and liquid fuels consumption grew to86.7 million bbl/d in 2010, surpassing the previous record of 86.3 million bbl/d set in 2007. EIA expected that world liquid fuelsconsumption would grow by 1.4 million bbl/d in 2011, followed by 1.6 million bbl/d growth in 2012, resulting in total world consumptionof 89.7 million bbl/d in 2012. Countries outside the Organization for Economic Cooperation and Development (OECD) will make upalmost all of the growth in consumption over the next two years, with the largest increases coming from China, Brazil, and the MiddleEast. EIA expects that, among the OECD nations, only the United States and Canada will show growth in oil consumption over thenext two years, offsetting declines in Europe and Japan. In addition to the substantial overall increase in demand, fears of a supply disruption are keeping crude prices high in a well-suppliedmarket. Speculators worry that even a small terrorist-caused disruption to oil supplies could cause major repercussions that wreakhavoc with the supply chain. The result of the overall increase in demand, and terrorist fears, is that analysts believe the price for crude oil will stabilize above the$100 per barrel mark for the next several years and will gradually increase after that, with fluctuations upward based on supplydisruption. Nevertheless, our business plan is based on achieving profitability at market prices below $100 per barrel.

Projected Markets for the Company’s Oil The primary product to be produced by the Company will be bitumen. There are numerous refineries within our potential marketingarea. Located in the Salt Lake City area, within 130 miles, there are a number of refineries with cumulative total daily capacity ofapproximately 175,000 barrels per day, according to the U.S. Energy Administration. Additionally, refineries in Colorado, Wyomingand New Mexico have daily combined capacity of approximately 442,000 barrels per day. We have had the separated bitumenanalyzed and submitted to various refineries.

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We currently have received indications of interest from Silver Eagle Refinery, Woods Cross, Utah, and Milagro Energy Resources,Inc., Green River, Utah. Each refinery has indicated that the bitumen samples tested meet their refining criteria and that, subject toprice and capacity, they would purchase the offtake from our facility. In the case of Milagro Energy, we have signed a non-bindingletter of intent to supply up to 3,000 barrels per day, subject to our obtaining adequate financing to build and operate our facility andMilagro restarting its refinery. Pricing is typically benchmarked to leading crude price indices. We anticipate initially that our entireestimated output of 3,000 barrels per day will be delivered to a single refinery. As we expand production, we will evaluate supplyingproduct to multiple refineries, based on price and transportation costs. We also believe that the liquid paving asphalt industry will be a market for our products and is a 30 million ton per year market. Theindustry is segmented into commodity asphalt, performance-grade asphalt and asphalt emulsions and maintenance products. Thecommodity asphalt segment is by far the largest, comprised of private construction projects (parking lots, driveways, etc.) and muchof the minor city and county road projects. The liquid asphalt used by this segment generally has few quality or performancespecifications and is served by refined sand asphalt wholesalers. The performance-grade asphalt segment is comprised of interstatehighways and larger state highways and city/county roads. The liquid asphalt used in this segment must meet very stringentperformance standards and requires the blending of asphalt with other asphalts, additives and modifiers to meet the productspecification. The asphalt emulsions/maintenance segment is also growing as states and other agencies implement pavementmaintenance programs to rehabilitate and extend the life of existing roads. With little or no upgrading, the separated bitumen from oilsands can be sold into these markets. Market prices for asphalt during the summer months are expected to yield a higher overallprice for our products. We intend to target these markets during summer months when asphalt prices are highest and demandgreatest. Government Regulation We have commenced the process of obtaining the regulatory approvals required in connection with our project. We are committed toenvironmental responsibility and to meeting or exceeding best practices for environmental stewardship and community socialresponsibility in our industry. We support the principle of sustainable development through adaptive management and we are workingwith stakeholders in the community, government and industry to protect and sustain air, land and aquatic resources in the region. The key environmental issues to be managed in the development of our project encompass surface disturbance on the terrestrialecosystem, effects on traditional land use and historical resources, and effects on wildlife populations and resources. Because thecommercial facility to be constructed will be a closed loop system, the only emissions anticipated will be from power generation. Onlyclean sand and bitumen will be produced. We are committed to operating our project to achieve compliance with applicable statutes, regulations, codes, regulatory approvalsand, to the extent practicable, government guidelines. Where the applicable laws are not clear or do not address all environmentalconcerns, management will apply appropriate internal standards and guidelines to address such concerns. In addition to complyingwith statutes, regulations, codes and regulatory approvals and exercising due diligence, we will strive to continuously improve theoverall environmental performance of the operation and products. There are a number of state and federal permits required in connection with the Large Permit necessary to commence principaloperations. The Large Mine Plan permit will require a number of studies and/or clearances, and, other than the approvals fromCarbon County, will include processing of the permits and clearances described above. The Large Mine Plan will also requireengineering and operation plans and posting of a reclamation bond. We intend to seek the necessary business license from CarbonCounty and approval of the county planning and zoning concurrent with the preparation of the large mining plan and anticipate beingable to obtain the necessary license and approval from Carbon County prior to receiving the large mining permit. We have contracted with an environmental consulting firm to obtain the required studies and prepare the application to obtain thelarge mine permit. In addition, we have contracted with a mining consultant to prepare the Large Mine Plan. Management estimatesthat it will receive its large mining permit from the Utah Division of Oil, Gas and Mining during the second quarter of calendar 2013.

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Competition To our knowledge, there are currently no companies operating in oil sands mining and extraction in the State of Utah, although U.S.Oil Sands, a Canadian company, has publicly announced that it has raised $11 million and intends to commence operations thissummer on a 62-acre plant in eastern Utah to remove bitumen from oil sands using a citrus-based solvent. Several companies haveacquired sites with oil sand deposits, including U.S. Oil Sands, but they are not in production and require significant capital tocommence operations. Additionally, many of these companies are using processes that require substantial water, and are unprovenin commercial production. Our process is efficient, cost effective, “green,” and simple when compared to other technologies currently known or used for theseparation of oil sands. By comparison, the processes utilized in Canada for the extraction of bitumen from oil sand consumesignificant amounts of water and have a significant environmental impact. In comparing our process to known oil sands extractionsystems, we believe our licensed proprietary system offers a significantly reduced operating environmental impact. Our processsignificantly mitigates or eliminates environmental impacts typically associated with oil sand projects including:

o Release of Volatile Organic Hydrocarbons (VOC’s): The solvent losses resulting from the operation of our system areminor. The system does not release any solvent to the environment. Solvent consumed by the process is recovered andconserved during the processing of the oil sands. In addition the process does not produce gases to a flare or ventsystem of any kind.

o Substantial Water consumption/contamination: Our process neither consumes nor produces any water. It is a dry process

and therefore no water is taken from or returned to the environment.

o Emissions: The process can be powered by natural gas or electrically. If it were powered by electricity, emissionsassociated with the energy consumption of the process could be controlled through standard power plant emission controlsystems. As noted above, the deposit under lease to GRI is currently serviced by electrical power lines.

o Hydrocarbon and water wet tailings stream: Typical oil sands operations produce a waste stream of spent sand that

contains a significant amount of residual hydrocarbons and water. The sand product from our process is dry andessentially free of hydrocarbons, either natural or induced through the solvent wetting process. It is directly suitable foruse in reclamation efforts or can be sold as a value added product without further processing. Use of the sand in thereclamation process provides for the return of the mined material to the mine site (less the naturally occurringhydrocarbons) with no loss of material.

We believe our process is efficient, cost effective, and simple when compared to other technologies currently known or used for theseparation of oil sands. By comparison, the processes utilized in Canada for the extraction of bitumen from oil sand consumesignificant amounts of water and have a significant environmental impact. Approximately 3/4 of a barrel of tailings is produced for every barrel of bitumen produced by competing technology. Consequently,there are thousands of acres of tailing ponds located at Canadian oil sands operations produced as a direct result of the oil sandextraction process. This is one reason why oil sands are being questioned as a source of energy for the United States. Our processuses little or no water, and recaptures virtually all of the solvent used, resulting in only clean sand as a byproduct (which can be usedfor reclamation or sold commercially). Production costs using our method to recover bitumen are believed to be significantly lower than those used by established producersof bitumen from oil sands in Canada. In addition, the projected capital cost for our 3,000 barrel per day plant would be significantlylower than the cost of capital for a traditional oil sands project. Thus, our competitive advantages are an environmentally superiorprocess and the ability to be a low-cost producer of high demand energy in Utah and other markets where we may choose to operate.

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Employees We currently have four employees; namely, our CEO, William C. Gibbs; our COO, Robin Gereluk; our President, Andrew Rosenfeld;and our CFO, Daniel F. Carlson. Each of these employees is part-time, except for Mr. Gibbs who devotes essentially all of hisbusiness time to this project. We also engage consultants and independent contractors as and when required. ITEM 1A. RISK FACTORS Our business activities and the oil and gas industry in general, are subject to a variety of risks. If any of the following risk factorsshould occur, our profitability, financial condition or liquidity could be materially impacted. As a result, holders of our securities couldlose part or all of their investment in American Sands Energy Corp. Risks Related to Our Company and Its Business Because of our historic losses from operations since inception, there is substantial doubt about our ability to continue as agoing concern. In its report dated June 21, 2012, our independent registered public accounting firm stated that our financial statements for the yearended March 31, 2012, were prepared assuming that we would continue as a going concern. We have incurred recurring loses sincethe date of inception that have resulted in an accumulated deficit attributable to common stockholders of approximately $8,729,780 asof March 31, 2012. Although we had approximately $624,300 of available cash at March 31, 2012, that amount is not adequate tomeet our capital expenditure and operating requirements over the next 12 months. In addition, we estimate that we will requireapproximately $50,000,000 in capital expenditures to place our properties into production. We currently have no source for thesefunds. These factors raise substantial doubt about the ability of the Company to continue as a going concern or to commenceprincipal operations. We are dependent upon obtaining funds from investors to meet our cash flow requirements. If we areunsuccessful in doing so, we would be required to substantially revise our business plan or our proposed business could fail. The impact of disruptions in the global financial and capital markets may significantly affect our ability to obtain financing. The market events and conditions that transpired in 2008 and 2009, including disruptions in the international credit markets and otherfinancial systems, and the continued deterioration of global economic conditions, have, among other things, caused significantvolatility in commodity prices. These events and conditions caused a loss of confidence in the broader U.S. and global credit andfinancial markets and resulted in the collapse of, and government intervention in, numerous major banks, financial institutions andinsurers, and created a climate of greater volatility, less liquidity, widening of credit spreads, a lack of price transparency, increasedcredit losses and tighter credit conditions. Notwithstanding various actions by governments, concerns about the general condition ofthe capital markets, financial instruments, banks, investment banks, insurers and other financial institutions caused the broader creditmarkets to further deteriorate and stock markets to decline substantially. These factors have negatively impacted enterprisevaluations and have impacted the performance of the global economy. Although credit markets, equity markets, commodity marketsand the United States and global economies have somewhat stabilized (and in some instances experienced recoveries), someprominent government officials, economists and market commentators have expressed concerns regarding the durability or speed ofthe recovery over the near and medium term, particularly as the fiscal stimulus that was utilized by the world's governments tocombat the global financial crises is withdrawn over time in the coming months and years. Although we expect to meet our near term liquidity needs with our working capital on hand, we will continue to need further funding toachieve our business objectives. In the past, the issuance of equity or debt securities has been the major source of capital andliquidity for us. The recent conditions in the global financial and capital markets have limited the availability of this funding. If thedisruptions in the global financial and capital markets continue, debt or equity financing may not be available to us on acceptableterms, if at all. If we are unable to fund future operations by way of financing, including public or private offerings of equity or debtsecurities, our business, financial condition and results of operations will be adversely impacted. Additionally, these factors, as well asother related factors, may cause decreases in asset values that are deemed to be other than temporary, which may result inimpairment losses.

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Our company has not commenced principal operations and has a limited operating history and therefore we cannot ensurethe long-term successful operation of our business or the execution of our business plan. We have not commenced principal mining operations although GRI has been developing our current business plan since 2005. As aresult, we have a limited operating history upon which to evaluate our proposed business and prospects. Our proposed businessoperations will be subject to numerous risks, uncertainties, expenses and difficulties associated with early stage enterprises. Suchrisks include but are not limited to the following:

— the absence of a lengthy operating history;— insufficient capital to fully realize our operating plan;— our ability to purchase or lease necessary equipment when required and at reasonable prices;— our ability to obtain regulatory and environmental approvals of our proposed mines and facilities;— expected continual losses for the foreseeable future;— social and political unrest;— disruptions to transportation routes;— our ability to anticipate and adapt to a developing market(s);— acceptance of our product by consumers;— limited marketing experience;— a competitive environment characterized by well-established and well-capitalized competitors;— the ability to identify, attract and retain qualified personnel; and— reliance on key personnel.

Because we are subject to these risks, evaluating our business may be difficult. We may be unable to successfully overcome theserisks which could harm our business. Our business strategy may be unsuccessful and we may be unable to address the risks weface in a cost-effective manner, if at all. If we are unable to successfully address these risks our business will be harmed. The exploration for and development of oil sands properties is highly competitive. Oil sands exploration and development involves many risks that even a combination of experience, knowledge and careful evaluationmay not be able to overcome. We have no proven or probable reserves of oil sands on our properties. As with any petroleumproperty, there can be no assurance that commercial deposits of bitumen will be produced from our leased lands in Utah. Furthermore, the marketability of any resource will be affected by numerous factors beyond our control. These factors include, butare not limited to, market fluctuations of prices, proximity and capacity of processing equipment, equipment and labor availability andgovernment regulations (including, without limitation, regulations relating to prices, taxes, royalties, land tenure, allowable production,importing and exporting of oil and gas, land use and environmental protection). The extent of these factors cannot be accuratelypredicted, but the combination of these factors may result in us not receiving an adequate return on invested capital. If we are unable to hire and retain key personnel, we may not be able to implement our plan of operation and our businessmay fail. Our success is largely dependent on our ability to continue to hire and retain highly qualified personnel in both management andoperations. These individuals may be in high demand and we may not be able to attract the management staff we need. In addition,we may not be able to afford the high salaries and fees demanded by qualified personnel, including fees associated with personsemployed by us, or we may fail to retain such employees after they are hired. Our failure to hire and retain key personnel as neededwill have a significant negative effect on our business.

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We are dependent upon a few key people and the loss of current management would make it difficult for us to implementour current business plan. Investors must rely upon the ability, expertise, judgment, discretion, integrity and good faith of our management and directors. OurCompany’s success is dependent upon its management and key personnel, and especially our CEO. We do not maintain key-maninsurance for any of our employees. The unexpected loss or departure of any of our key officers and employees, and especially ourCEO, could be detrimental to our future success. Compliance with government regulations and delays in obtaining necessary mining permits and licenses could delay orotherwise adversely affect our proposed business operations. Our proposed plan to mine and process oil sands is subject to substantial regulation under federal, state and local laws relating to theexploration for, and the development, upgrading, marketing, pricing, taxation, and transportation of oil sands bitumen and relatedproducts and other matters. Amendments to current laws and regulations governing operations and activities of oil sands explorationand development operations could have a material adverse impact on our business. In addition, there can be no assurance thatincome tax laws, royalty regulations, environmental regulations and government incentive programs related to our permits and oilsands exploration licenses, and the oil sands industry generally, will not be changed in a manner which may adversely affect ourprogress and cause delays, or cause the inability to explore and develop, resulting in the abandonment of these interests. Permits, licenses and approvals are required from a variety of regulatory authorities at various stages of exploration anddevelopment. There can be no assurance that the various government permits, leases, licenses and approvals sought will be grantedin respect of our activities, that they will be granted in a timely manner, or, if granted, that they will not be cancelled or will be renewedupon expiry. There is no assurance that such permits, leases, licenses and approvals will not contain terms and provisions which mayadversely affect our exploration and development activities. Environmental and regulatory compliance may impose substantial costs on us. Our proposed operations will be subject to stringent federal, state, and local laws and regulations relating to improving or maintainingenvironmental quality. Environmental laws often require parties to pay for remedial action or to pay damages regardless of fault.Environmental laws also often impose liability with respect to divested or terminated operations, even if the operations wereterminated or divested many years ago. Our exploration activities are or will be subject to extensive laws and regulations governing prospecting, development, production,exports, taxes, labor standards, occupational health, waste disposal, land use, protection and remediation of the environment,protection of endangered and protected species, operational safety, toxic substances and other matters. Exploration is also subject torisks and liabilities associated with pollution of the environment and disposal of waste products. Compliance with these laws andregulations will impose substantial costs on us and will subject us to significant potential liabilities. In addition, should there bechanges to existing laws or regulations, our competitive position within the oil sands industry may be adversely affected, as manyindustry players have greater resources than we do. We are required to obtain and are in various stages of obtaining necessary regulatory permits and approvals in order to explore anddevelop our properties. The absence of a distinct overlying shale formation on portions of our leases may make it more difficult orcostly to obtain regulatory approvals. There is no assurance that regulatory approvals for exploration and development of ourproperties will be obtained at all or with terms and conditions acceptable to us. We could encounter third-party liability or environmental liability in connection with our proposed operations. Our proposed operations could result in liability for personal injuries, property damage, oil spills, discharge of hazardous materials,remediation and clean-up costs and other environmental damage. We could be liable for environmental damages caused by previousowners. As a result, substantial liabilities to third parties or governmental entities may be incurred, and the payment of such liabilitiescould have a material adverse effect on our financial condition and results of operations. The release of harmful substances in theenvironment or other environmental damages caused by our activities could result in us losing our operating and environmentalpermits or inhibit us from obtaining new permits or renewing existing permits. We currently have a limited amount of insurance and, atsuch time as we commence additional operations, we expect to be able to obtain and maintain additional insurance coverage for ouroperations, including limited coverage for sudden environmental damages, but we do not believe that insurance coverage forenvironmental damage that occurs over time is available at a reasonable cost. Moreover, we do not believe that insurance coveragefor the full potential liability that could be caused by environmental damage is available at a reasonable cost. Accordingly, we may besubject to liability or may lose substantial portions of our properties in the event of certain environmental damage. The Companycould incur substantial costs to comply with environmental laws and regulations which could affect our ability to operate as planned.

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The early stage of our bitumen extraction technology increases the risk that we may not be able to successfully implementan oil sands recovery program using this technology. We have entered into a license agreement under which the licensing entities have agreed to provide technical and engineeringassistance in building an oil sands recovery plant based upon their proprietary technology. This technology has not been installed ona project which meets the projected recovery amounts in our business plan. In addition the licensors have only recently created aprototype which demonstrates the use of the process. There is a risk that the recovery process and plant will not be completed ontime or on budget or at all. Additionally, there is a risk that the program may have delays, interruption of operations or increased costsdue to many factors, including, without limitation: breakdown or failure of equipment or processes; construction performance fallingbelow expected levels of output or efficiency; design errors; challenges to, or inability to access in a timely or economic fashion;contractor or operator errors; non-performance by third-party contractors; labor disputes, disruptions or declines in productivity;increases in materials or labor costs; inability to attract sufficient numbers of workers; delays in obtaining, or conditions imposed by,regulatory approvals; changes in program scope; violation of permit requirements; disruption in the supply of energy; transportationaccidents, disruption or delays in availability of transportation services or adverse weather conditions affecting transportation;unforeseen site surface or subsurface conditions; and catastrophic events such as fires, earthquakes, storms or explosions. There isalso a risk that the manufacturer of the recovery plant used to implement our bitumen extraction technology could fail in productiondue to labor shortages, price increases, and better opportunities with other customers. We have significant financial obligations upon the occurrence of certain triggering events. Our interest in certain mining leases is conditioned upon the payments of royalties, minimum yearly investment in development, taxpayments, and other obligations to the owners of the leases. If we are unable to make the required payments or meet the necessaryobligations, we could default on our lease agreements which could be terminated and which would void our interest in the leases.There is no certainty we will be able to make every payment and meet all obligations required under the respective leaseagreements. If we do not reach production levels by December 31, 2014, our leases may be terminated. Three of our four leases are conditioned upon reaching the production stage by December 31, 2014 and the fourth lease requiresproduction by October 2015. If we do not attain average productivity of at least 500 barrels per day by these dates, our interest in theleases may be terminated. The ability to attain productivity is conditioned upon factors of which we are not within complete controlsuch as those listed in this Annual Report. There is no certainty we will ever reach the level of production required to keep ourinterest in these mining leases from becoming void. We have no proven or probable reserves or resources. We have not yet established any reserves. There are numerous uncertainties inherent in estimating quantities of bitumen resourcesand reserves, including many factors beyond our control, and no assurance can be given that the recovery of bitumen will berealized. In general, estimates of resources and reserves are based upon a number of factors and assumptions made as of the dateon which the resources and reserves estimates were determined, such as geological and engineering estimates which have inherentuncertainties, the assumed effects of regulation by governmental agencies and estimates of future commodity prices and operatingcosts, all of which may vary considerably from estimated results. All such estimates are, to some degree, uncertain and classificationsof resources and reserves are only attempts to define the degree of uncertainty involved. For these reasons, estimates of reservesand resources, the classification of such resources and reserves based on risk of recovery, prepared by different engineers or by thesame engineers at different times, may vary substantially.

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However, we have obtained an independent Resource Audit and Classification report from a major international geology and miningconsulting firm describing the quantity and quality of the bitumen resource estimated to be located on our leases as of May 29, 2009.The Resource Audit and Classification was completed in accordance with the provisions of the National Instrument 51-101 Standardsof Disclosure for Oil and Gas Activities (NI 51-101). Such evaluation of our estimates of resources under NI 51-101 was carried out inaccordance with the standards set out in the Canadian Oil and Gas Evaluation (COGE) Handbook, prepared jointly by the Society ofPetroleum Evaluation Engineers and the Canadian Institute of Mining, Metallurgy & Petroleum. Those standards require that theevaluator plan and perform an evaluation to obtain reasonable assurance as to whether the reserves are free of materialmisstatement. An evaluation must also include an assessment as to whether the reserves data are in accordance with the principlesand definitions presented in the COGE Handbook. The estimate provided in this report is classified as contingent resourcesaccording to the guidelines set forth in NI 51-101 and COGE. The project resource calculation is contingent upon completion ofadditional exploration drilling, processing and extraction analysis, detailed economic analysis, evolution of legal mining rights, andenvironmental evaluations. There is no certainty that the project will be commercially viable to produce any portion of the resource. Asa result of the differences between the U.S. rules and Canadian standards governing disclosure of reserve or resource estimates,differing estimates of reserves or resources available under our leases are reported, and may in the future be reported, between ourwebsite and our periodic reports filed with the SEC. Investors are cautioned not to assume that all or any part of a resource is economically or legally extractable. We may participate in joint ventures and/or strategic alliances to develop and operate our planned business. Thesepartnerships or the failure to establish them could have a material adverse effect on our ability to develop and manage ourbusiness. In addition, such undertakings may not be successful. Our strategy may include plans to participate in joint ventures and other strategic alliances to develop and operate our business andsell our products. We may develop mining operations in part through joint ventures and strategic alliances with other parties as wellas with additional outside funding. Joint ventures and strategic alliances may expose us to new operational, regulatory and marketrisks, as well as risks associated with additional capital requirements. Additionally, we may not be able to identify and secure suitablealliance partners. Even if we identify suitable partners, we may be unable to consummate alliances on terms commercially acceptableto us. If we fail to identify appropriate partners, we may not be able to implement our strategies effectively or efficiently. In addition to joint venture and strategic alliances, we may raise additional debt and/or equity financing to build and operateour proposed operations. Such capital raises could result in significant dilution to the percentage ownership held byexisting stockholders or the failure to secure such capital could impair our ability to execute our business plan. We anticipate that the cost to build operations on our existing or future properties will be at least $50,000,000 and we have no currentsources for this funding. We have received indications of interest in future financings but have no firm commitments for any funds.The net proceeds of future offerings are expected to be used to begin and continue initial operations, including the construction of therecovery facility, acquire additional properties and fund operations for the next twelve months. Offerings using our equity securities ordebt instruments convertible into our common stock could require the issuance of a substantial number of additional shares ofcommon stock. These potential offerings and the issuance of additional shares of common stock would have the effect of diluting thepercentage ownership of existing stockholders. Moreover, there can be no assurance that such financing will be available, or, ifavailable, that such financing will be at a price that will be acceptable or favorable to us. Failure to generate sufficient revenue or raiseadditional capital would have an adverse impact on our ability to achieve our longer-term business objectives, and would adverselyaffect our ability to continue operating as a going concern.

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We do not insure against all potential operating risks. We may incur losses and be subject to liability claims as a result ofour operations. We maintain insurance for some, but not all, of the potential risks and liabilities associated with our business. For some risks, we maynot obtain insurance if we believe the cost of available insurance is excessive relative to the risks presented. As a result of marketconditions, premiums and deductibles for certain insurance policies can increase substantially, and in some instances, certaininsurance may become unavailable or available only for reduced amounts of coverage. As a result, we may not be able to renew ourexisting insurance policies or procure other desirable insurance on commercially reasonable terms, if at all. Although we maintaininsurance at levels we believe are appropriate and consistent with industry practice, we are not fully insured against all risks. Inaddition, pollution and environmental risks generally are not fully insurable. Losses and liabilities from uninsured and underinsuredevents and delay in the payment of insurance proceeds could have a material adverse effect on our financial condition, results ofoperations and cash flows. If we fail to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-OxleyAct of 2002, the price of our common shares may be affected. We are required to maintain effective internal control over financial reporting under the Sarbanes-Oxley Act of 2002 and relatedregulations. Any material weakness in our internal control over financial reporting that needs to be addressed, disclosure ofmanagement’s assessment of our internal control over financial reporting, or management’s report on internal control over financialreporting that discloses a material weakness in our internal control over financial reporting may reduce the price of our commonshares. American climate change legislation could negatively affect markets for crude and synthetic crude oil. Environmental legislation regulating carbon fuel standards in the United States could result in increased costs and/or reducedrevenue. For example, both California and the federal governments have passed legislation which, in some circumstances, considersthe lifecycle greenhouse gas emissions of purchased fuel and which may negatively affect our business, or require the purchase ofemissions credits, which may not be economically feasible. Oil and gas mining operations are subject to applicable law and government regulation. Even if we discover oil and gasdeposits in a commercially exploitable quantity, these laws and regulations could restrict or prohibit the exploitation ofthose deposits. If we cannot exploit any deposits that we might discover on our properties, our business may fail. Both oil and gas exploration and extraction in the United States requires permits from various federal, state, provincial and localgovernmental authorities and are governed by laws and regulations, including those with respect to prospecting, mine development,oil and gas production, transport, export, taxation, labor standards, occupational health, waste disposal, toxic substances, land use,environmental protection, mine safety and other matters. There can be no assurance that we will be able to obtain or maintain any ofthe permits required for the continued exploration of oil and gas mining properties or for the construction and operation of a mine onour properties at economically viable costs. If we cannot accomplish these objectives, our business could fail. We are currently in compliance with all material laws and regulations that currently apply to our proposed business activities, but havenot yet obtained the necessary permits and licenses to commence principal operations. If we are unable to continue to remain incompliance, or obtain these necessary permits and licenses, our business could fail. Current laws and regulations are beingamended and we might not be able to comply with them. Further, there can be no assurance that we will be able to obtain ormaintain all permits necessary for our future operations, or that we will be able to obtain them on reasonable terms. To the extentsuch approvals are required and are not obtained, we may be delayed or prohibited from proceeding with planned exploration ordevelopment of our mining properties.

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Our mining production and delivery operations are subject to conditions and events that are beyond our control, whichcould result in higher operating costs and decreased production levels. Our mining operations are planned to be conducted primarily in underground mines and possibly in surface mines. The level of ourproduction is subject to operating conditions or events beyond our control that could disrupt operations, decrease production andaffect the cost of mining at particular mines for varying lengths of time. Adverse operating conditions and events that oil and gasproducers have experienced in the past include:

— unfavorable geologic conditions, such as the thickness of the oil and gas deposits and the amount of rock embedded in oroverlying the oil and gas deposit;

— poor mining conditions resulting from geological conditions or the effects of prior mining;— inability to acquire or maintain, or unexpected delays or difficulties in obtaining, necessary permits or mining or surface rights;— changes in governmental regulation of the mining industry or the utility industry;— market conditions could change and mean the sale of the type of oil and gas being produced from our concessions is no

longer saleable at an economic price;— adverse weather conditions and natural disasters;— accidental mine water flooding;— labor-related interruptions;— interruptions due to transportation delays;— mining and processing equipment unavailability and failures and unexpected maintenance problems;— accidents, including fire and explosions from methane and other sources;— surface subsidence from underground mining, which could result in collapsed roofs at our underground mines, among other

difficulties;— unavailability of mining equipment and supplies and increases in the price of mining equipment and supplies;— unexpected maintenance problems or key equipment failures; and— increased or unexpected reclamation costs.

If any of these or similar conditions or events occur in the future at any of the mines we plan to develop or affect deliveries of ourproduct to customers, they may increase our costs of mining and delay or halt production at particular mines or sales to ourcustomers, either permanently or for varying lengths of time, which could adversely affect our results of operations, cash flows andfinancial condition. Our current insurance coverage would cover some but not all of these risks. A substantial or extended decline in oil and gas prices could reduce our revenues and the value of our oil and gasresources. Our results of future operations will be dependent upon the prices we receive for our oil and gas and other products as well as ourability to improve productivity and control costs. Declines in prices could adversely affect our results of operations. The pricescharged for oil and gas depend upon factors beyond our control, including:

— the supply of, and demand for, domestic and foreign oil and gas;— the price elasticity of supply;— the demand for oil and gas;— the proximity to and the capacity and cost of transportation facilities;— governmental regulations and taxes;— air emission standards for oil refineries;— regulatory, legislative, administrative and judicial decisions;— the price and availability of alternative fuels, including the effects of technological developments; and— the effect of worldwide energy conservation measures.

Decreased demand for oil and gas could result in declines in oil and gas prices and require us to increase productivity and lowercosts in order to maintain our margins. If we are not able to maintain our margins, our operating results could be adversely affected.Therefore, price declines may adversely affect our operating results for future periods and our ability to generate cash flowsnecessary to improve productivity and invest in operations.

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A decrease in the availability or increase in costs of labor, key supplies, capital equipment or commodities could reduce anyprofitability we may achieve. We will require access to contract miners at commercially acceptable rates. We currently have no contracts or arrangements fornecessary mining personnel. Our proposed mining operations will also require a reliable supply of steel-related products (includingroof control for our underground mines), replacement parts, belting products and lubricants, none of which have been secured bydefinitive agreements or contracts. If the cost of any of these or other supplies increases significantly, or if a source for such miningequipment or supplies are unavailable to meet our replacement demands, our profitability could be adversely affected. In addition,industry-wide demand growth has recently exceeded supply growth for certain underground, surface, and other capital equipment. Asa result, lead times for some items have increased significantly. Significant delays in obtaining required parts and equipment couldcause our profitability to be reduced from our current expectations. Our inability to obtain or retain qualified operating personnel could negatively affect our proposed operations. The design, development and construction of our bitumen extraction technology program and any subsequent pilot and commercialprojects will require experienced executive and management personnel and operational employees and contractors with expertise ina wide range of areas. No assurance can be given that all of the required personnel and contractors with the necessary expertise willbe available. Should other oil sands projects or expansions proceed in the same time frame as our programs and projects, we willhave to compete with these other projects and expansions for qualified personnel and such competition may result in increases tocompensation paid to such personnel or in a lack of qualified personnel. Any inability of our Company to attract and retain qualifiedpersonnel may delay or interrupt the design, development and construction of, and commencement of operations and anysubsequent pilot and commercial projects. Sustained delays or interruptions could have a material adverse effect on the financialcondition of our Company. Inaccuracies in our estimates of oil sands deposits could result in lower than expected revenues and higher than expectedcosts. We will base our oil sands deposit information on engineering, economic and geological data assembled and analyzed by our inhouse and contract workers, which will include various engineers and geologists. The estimates of oil sands deposits as to bothquantity and quality will be continually updated to reflect the production of bitumen from the deposits and new drilling or other datareceived. There are numerous uncertainties inherent in estimating quantities and qualities of oil sands deposits and costs to processthese deposits, including many factors beyond our control. Estimates of economically recoverable bitumen and net cash flowsnecessarily depend upon a number of variable factors and assumptions, all of which may vary considerably from actual results, suchas:

— geological and mining conditions and/or effects from prior mining activities that may not be fully identified by availableexploration data or that may differ from experience, in current operations;

— the assumed effects of regulation, including the issuance of required permits, and taxes by governmental agencies andassumptions concerning oil and gas prices, operating costs, mining technology improvements, severance and excise tax,development costs and reclamation costs;

— historical production from the area compared with production from other similar producing areas; and— assumptions concerning future oil and gas prices, operating costs, capital expenditures, severance taxes and development

and reclamation costs. For these reasons, estimates of the economically recoverable quantities and qualities attributable to any particular group ofproperties, classifications of reserves and non-reserve deposits based on risk of recovery and estimates of net cash flows expectedfrom particular reserves prepared by different engineers or by the same engineers at different times may vary substantially and varymaterially from estimates. As a result, these estimates may not accurately reflect actual reserves or non-reserve deposits. Anyinaccuracy in our estimates related to our deposits could result in lower than expected revenues, higher than expected costs anddecreased profitability.

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We compete with numerous alternative and “green” energy industries. The U.S. and international petroleum industry is highly competitive in all aspects, including the exploration for, and the developmentof, new sources of supply, the acquisition of oil interests and the distribution and marketing of petroleum products. The petroleum industry also competes with other industries in supplying energy, fuel and related products to consumers. Some ofthese industries benefit from lighter regulation, lower taxes and subsidies. In addition, certain of these industries are less capitalintensive. A number of competing companies are engaged in the oil sands business and are actively exploring for and delineating their resourcebases. Some of our competitors have announced plans to begin production of synthetic crude oil, or to expand existing operations. Ifthese plans are effected, they could materially increase the supply of synthetic crude oil and other competing crude oil products in themarketplace and adversely affect plans for development of our lands. We may be subject to unexpected operational hazards based upon the remote location of our properties. Our exploration and development activities are subject to the customary hazards of operation in remote areas, such as fires,explosions, migration of harmful substances, and spills. A casualty occurrence might result in the loss of equipment or life, as well asinjury, property damage or other liability. While we maintain limited insurance to cover current operations, our property and liabilityinsurance may not be sufficient to cover any such casualty occurrences or disruptions. Equipment failures could result in damage toour facilities and liability to third parties against which we may not be able to fully insure or may elect not to insure because of highpremium costs or for other reasons. Our operations could be interrupted by natural disasters such as forest fires or other eventsbeyond our control. Losses and liabilities arising from uninsured or under-insured events could have a material adverse effect onour business, our financial condition and results of our operations. Risks Related to Our Common Stock Because our shares are designated as “penny stock”, broker-dealers will be less likely to trade in our stock due to, amongother items, the requirements for broker-dealers to disclose to investors the risks inherent in penny stocks and to make adetermination that the investment is suitable for the purchaser. Our shares are designated as “penny stock” as defined in Rule 3a51-1 promulgated under the Exchange Act and thus may be moreilliquid than shares not designated as penny stock. The SEC has adopted rules which regulate broker-dealer practices in connectionwith transactions in “penny stocks.” Penny stocks are defined generally as: non-Nasdaq equity securities with a price of less than$5.00 per share; not traded on a “recognized” national exchange; or in issuers with net tangible assets less than $2,000,000, if theissuer has been in continuous operation for at least three years, or $10,000,000, if in continuous operation for less than three years,or with average revenues of less than $6,000,000 for the last three years. The penny stock rules require a broker-dealer to deliver astandardized risk disclosure document prepared by the SEC, to provide the customer with current bid and offer quotations for thepenny stock, the compensation of the broker-dealer and its salesperson in the transaction, monthly account statements showing themarket value of each penny stock held in the customer’s account, to make a special written determination that the penny stock is asuitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosurerequirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a stock that is subject tothe penny stock rules. Since our securities are subject to the penny stock rules, investors in the shares may find it more difficult to selltheir shares. Many brokers have decided not to trade in penny stocks because of the requirements of the penny stock rules and, as aresult, the number of broker-dealers willing to act as market makers in such securities is limited. The reduction in the number ofavailable market makers and other broker-dealers willing to trade in penny stocks may limit the ability of purchasers in this offering tosell their stock in any secondary market. These penny stock regulations, and the restrictions imposed on the resale of penny stocksby these regulations, could adversely affect our stock price.

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Future sales of our common stock may cause our stock price to decline Our stock price may decline due to future sales of our shares or the perception that such sales may occur. The Board of Directors ofthe Company has discretion to determine the issue price and the terms of issue of shares of our common stock. Such futureissuances may be dilutive to investors. Holders of shares of common stock have no pre-emptive rights under our Certificate ofIncorporation to participate in any future offerings of securities. If we issue additional shares of common stock in private financings under an exemption from the registration requirements, thenthose shares will constitute “restricted shares” as defined in Rule 144 under the Securities Act of 1933 (the “1933 Act”). The restrictedshares may only be sold if they are registered under the 1933 Act, or sold under Rule 144, or another exemption from registrationunder the 1933 Act. Some of our outstanding restricted shares of common stock are either eligible for sale pursuant to Rule 144 or have been registeredunder the 1933 Act for resale by the holders. We are unable to estimate the amount, timing, or nature of future sales of outstandingcommon stock. Sales of substantial amounts of our common stock in the public market may cause the stock’s market price to decline. The public trading market for our common stock is volatile and may result in higher spreads in stock prices. Our common stock trades in the over-the-counter market and is quoted on the OTC Markets. The over-the-counter market forsecurities has historically experienced extreme price and volume fluctuations during certain periods. These broad market fluctuationsand other factors, as well as economic conditions and quarterly variations in our results of operations, may adversely affect themarket price of our common stock. In addition, the spreads on stock traded through the over-the-counter market are generallyunregulated and higher than on stock exchanges, which means that the difference between the price at which shares could bepurchased by investors in the over-the-counter market compared to the price at which they could be subsequently sold would begreater than on these exchanges. Significant spreads between the bid and asked prices of the stock could continue during any periodin which a sufficient volume of trading is unavailable or if the stock is quoted by an insignificant number of market makers. Historicallyour trading volume has been insufficient to significantly reduce this spread and we have had a limited number of market makerssufficient to affect this spread. These higher spreads could adversely affect investors who purchase the shares at the higher price atwhich the shares are sold, but subsequently sell the shares at the lower bid prices quoted by the brokers. Unless the bid price for thestock exceeds the price paid for the shares by the investor, plus brokerage commissions or charges, the investor could lose money onthe sale. For higher spreads such as those on over-the-counter stocks, this is likely a much greater percentage of the price of thestock than for exchange listed stocks. There is no assurance that at the time an investor in our common stock wishes to sell theshares, the bid price will have sufficiently increased to create a profit on the sale. We have not paid, and do not intend to pay, dividends on our common stock and therefore, unless our common stockappreciates in value, our investors may not benefit from holding our common stock We have not paid any cash dividends on our common stock since inception. We do not anticipate paying any cash dividends on ourcommon stock in the foreseeable future. As a result, investors in our common stock will not be able to benefit from owning ourcommon shares unless the market price of our common stock becomes greater than the price paid for the stock by these investors. There are a large number of restricted shares and shares issuable upon exercise of our outstanding options, warrants, orother convertible instruments that may be available for future sale, or which may be resold pursuant to Rule 144, the sale ofwhich into our trading market may depress the market price of our common stock. As of June 8, 2012, we had 28,766,741 shares of common stock issued and outstanding, of which 28,535,353 were designated by ourtransfer agent as restricted shares pursuant to Rule 144 promulgated by the SEC. In addition we had outstanding warrants topurchase up to 3,555,489 shares of common stock, outstanding options to purchase up to 3,812,500 shares of common stock,promissory notes convertible into 3,574,371 common shares, and other contingent obligations resulting in the issuance of up to2,117,091 common shares upon the occurrence of certain triggering events. The sale of these shares into the open market mayadversely affect the market price of our common stock.

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Our board of directors can, without stockholder approval, cause preferred stock to be issued on terms that adversely affectcommon stockholders. Under our Certificate of Incorporation, our board of directors is authorized to issue up to 10,000,000 shares of preferred stock, ofwhich none are issued and outstanding as of the date of this report. Also, our board of directors, without stockholder approval, maydetermine the price, rights, preferences, privileges and restrictions, including voting rights, of those shares. If the board causesadditional shares of preferred stock to be issued, the rights of the holders of our common stock could be adversely affected. Theboard’s ability to determine the terms of preferred stock and to cause its issuance, while providing desirable flexibility in connectionwith possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire amajority of our outstanding voting stock. Preferred shares issued by the board of directors could include voting rights, or even supervoting rights, which could shift the ability to control the company to the holders of the preferred stock. Preferred shares could alsohave conversion rights into shares of common stock at a discount to the market price of the common stock which could negativelyaffect the market for our common stock. In addition, preferred shares would have preference in the event of liquidation of thecorporation, which means that the holders of preferred shares would be entitled to receive the net assets of the corporation distributedin liquidation before the common stockholders receive any distribution of the liquidated assets. We have no current plans to issue anyshares of preferred stock. Issuance of preferred stock and our anti-takeover provisions could delay or prevent a change in control and may adverselyaffect our common stock We are authorized to issue 10,000,000 shares of preferred stock which may be issued in series from time to time with suchdesignations, rights, preferences and limitations as our Board of Directors may determine by resolution. The rights of the holders ofour common stock will be subject to and may be adversely affected by the rights of the holders of any of our preferred stock that maybe issued in the future. Issuance of a new series of preferred stock, or providing desirable flexibility in connection with possibleacquisitions and other corporate purposes, could make it more difficult for a third party to acquire, or discourage a third party fromacquiring our outstanding shares of common stock. ITEM 1B. UNRESOLVED STAFF COMMENTS We have not received any written comments from the staff of the Securities and Exchange Commission in regard to our periodic orcurrent reports that remain unresolved. ITEM 2. PROPERTIES We hold an undivided leasehold interest to approximately 1,760 acres located near Sunnyside, Utah, on which we propose to engagein the extraction of bitumen from oil sands located on the property. Property Location The property represented by the leases is located in central-east Utah approximately 110 miles southeast of Salt Lake City and 30miles east of Price. The property is located in the southwest portion of the Uinta Basin within Carbon County, directly east of BruinPoint and about six miles northeast of the coal mining town of Sunnyside. The property consists of two adjacent parcels, consisting of1,120 acres and 640 acres and identified respectively as the Hunt Tract and the Gibbs Tract.

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Access Access to the property from Salt Lake City is via Interstate 15 south to Spanish Fork, and east on Utah Highway 6 to Sunnyside.Railroad service is available to East Carbon City and Sunnyside. Access to the site from the town of Sunnyside is via State roads upWhitmore Canyon and Water Canyon. The last two miles to Bruin Point near the Asphalt Mine consist of a single lane road with steepgrades of up to 20%. The planned mine site is approximately seven miles from an existing rail head and major highway. Topography The topography in the project area is mountainous, with nearly 2,000 feet of relief. Elevations in this area range from approximately8,200 feet at the southern extreme end of the property, to over 10,150 feet at Bruin Point in the northwest. Climate

The area has annual average temperatures ranging from 15o F to 88o F, with local climate classified as sub-humid to semi-arid.Average annual precipitation includes 12.5” of rainfall, with September having the highest levels, and an additional 20” of snowfalloccurring November through March.

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Utilities The planned plant and mine site are approximately seven miles from an existing power plant and will be served by existing powerlines. Property History Commercial exploration or exploitation activities have been recorded on the Sunnyside area since 1892. A summary of the morenotable activities is given as follows: — 1892 – 1903. In 1892, a small quarry operation mined 1,000 tons for street paving in Salt Lake City. This operation was

repeated in 1902 - 1903. — 1915 – 1917. Utah Asphalt Company opened a new quarry in proximity to Bruin Point and shipped 3,000 tons.

— 1925 – 1927. Utah Rock Asphalt Corporation built an aerial tramway and reopened the Asphalt Mine in 1927.

— 1927 – 1931. Utah Rock Asphalt Corporation quarried 25,000 to 30,000 tons.

— 1931 – 1948. Rock Asphalt Company of Utah removed approximately 300,000 tons, which were used for paving within Utahand Colorado. The company ceased operations in 1948. The total amount removed from the Asphalt Mine site was estimatedat approximately 335,000 tons.

— 1948. The Utah Geological Survey, specifically Holmes, Page & Averitt, published the results of geological fieldwork andreserve estimates.

— 1956 – 1966. Over this ten-year period, the oil companies Gulf, Arco Phillips Petroleum, Pan American, Shell, Texaco,Mountain Fuel, and Signal Oil and Gas completed approximately 21 exploration drill holes. Steam injection wells built by Shelland Signal Oil and Gas were reported to have been unsuccessful, due to vertical fracturing and low overburden pressures. Ahorizontal well from the Asphalt mine was also drilled and tested, with results classified as unsuccessful.

— 1966 – 1979. A hiatus on exploration and development efforts ensued until 1977, when Amoco Production completed fivecore holes, with drilling and testing efforts concluding in 1978. In 1979, Standard Oil Company of Indiana acquired Section 2and the northeast, southeast and northwest quarter-sections of Section 3 in Township 14S, Range 14E from Kaiser Steel.This area constituted a major portion of the resource area currently identified as the Hunt Oil Tract. At the time of Standard’sacquisition, it was referred to as the Kaiser Tract, with subsequent naming as the Amoco Tract.

— 1980 – 1982. Amoco completed 43 exploration core holes.

— 1984 – 1989. Amoco completed 27 exploration core holes. Geology The oil sands at the Sunnyside Project are located along the crest of the Roan Cliffs near Bruin Point, which crests at an elevation of10,131 feet. The Roan Cliffs contain rocks of Paleocene and Eocene age (ca. 60-40 Ma). In the early stages of this time period, amountain range existed in central Utah while a sea was located in eastern Utah and Colorado. During a period of sea level regressionthe marine environment was replaced by a coastal plains fluvial environment. During subsequent orogenic events a large lake, LakeUinta, formed in an intermountain basin. Sediment deposited in Lake Uinta during the middle Eocene epoch (ca. 50-40 Ma) formedthe sandstone and shale of the Green River Formation. The Green River Formation sandstones would later become the reservoirrocks for the bitumen of the Sunnyside oil sands. The Green River Formation formed in a lacustrine environment associated with Lake Uinta during middle Eocene time (ca. 50-40Ma). The Green River Formation consists of three formal members subdivided on the basis of depositional environment: ParachuteCreek Member (lake facies); Garden Gulch Member (shore facies); and Douglas Creek Member (delta facies). These three memberswere delineated in the field on the basis of different colored shales, biota content, presence of oil shales, and abundance anddistribution of limestones and sandstones. Hydrocarbon and Mineral Leases Through GRI we hold an undivided 60% interest pursuant to two freehold hydrocarbon and mineral lease agreements dated January14, 2005, in Section 2, East Half and North West quarters of Section 3 Township 14 South, Range 14 East, SLM containingapproximately 1,120 acres, and an undivided 21.67% interest pursuant to two further freehold hydrocarbon and mineral leaseagreements dated February 23, 2005, in the North West quarter of Section 3, East half and North West quarter of Section 10,Township 14, Range 14 East, SLM containing approximately 640 acres, pursuant to which GRI has the right to extract bitumen fromthe land. The leases are for a primary term ending December 31, 2014, except for one lease representing an undivided 5% interest inthe 640 acre tract the primary term of which expires in October 2015, and are extended thereafter for so long as an average of 500barrels of oil are produced per day, subject to certain acceptable interruptions.

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The leases provide for the payment to the lessors of a royalty in an amount equal to 10% of the market value of the minerals sold byGRI less operating costs, transportation costs, processing costs, value added costs and extraction taxes incurred by us prior to thesale of the oil produced. A guaranteed minimum royalty of $1,000,000 is payable on the 1,120 acre leases each year after threeconsecutive years of production of oil products in commercial quantities during any portion of the three prior consecutive years. Theamount of royalties to be paid is based upon a 100% interest in and to the mineral estate represented by the premises covered by thelease and for any lessor owning less than 100% will be reduced by the same proportion, but less than the minimum guaranteedroyalty. The leases for the 1,120 acres also provide for the payment of a 2% royalty on all by-products produced. The leases providefor the annual payment of rentals in lieu of royalties until production begins. These rental payments are not required for any year inwhich royalties paid for the prior year exceeded the rental amount. Aggregate rentals for the year ended March 31, 2012, were$232,562 and for 2013 will be $232,562. In addition, each of the leases provides for a development commitment of a minimum of$150,000 per year for the premises represented by the lease, including research, engineering, test work, feasibility studies and otherdevelopment activates benefiting the property, until production reaches 500 barrels of oil per day. Recent Property Developments We are in the process of preparing and filing a Notice of Intent to Commence Large Mining Operations (“Mine Permit”) with the UtahDepartment of Oil, Gas and Mining. In connection with this Mine Permit, we have conducted a number of studies on the property andprepared a mine feasibility study. Those studies have included Archaeological and Cultural studies, Threatened & EndangeredSpecies studies, Soil/Vegetation/Hydrologic Studies and others to assess the impact of the project on the area. We have alsoprepared a mine feasibility study. Based on these studies, we believe that we will be able to meet the requirements for the MinePermit to be issued. ITEM 3. LEGAL PROCEEDINGS The Company is not a party to any legal proceedings reportable pursuant to this item. ITEM 4. MINE SAFETY DISCLOSURES There are no reportable events required pursuant to this item.

PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASESOF EQUITY SECURITIES Market Information Our common stock is quoted on the OTC Bulletin Board and OTC Markets and our trading symbol is “AMSE”. We do not believe thata material number of our shares of common stock have traded since the approval of the quotation. The table below sets forth for theperiods indicated the quarterly high and low bid prices as reported by the OTC Markets. Quotations furnished for the third quarter of2012 and thereafter reflect the reverse split effective October 18, 2011. These quotations reflect inter-dealer prices, without retailmark-up, mark-down, or commission and may not necessarily represent actual transactions. Quarter High LowFor the Fiscal Year Ended March 31, 2012 First $0.20 $0.20 Second $1.50 $0.10 Third $1.40 $1.40 Fourth $1.10 $0.05 For the Fiscal Year Ended March 31, 2011 First $0.10 $0.10 Second $0.10 $0.10 Third $0.10 $0.10 Fourth $0.10 $0.10

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Unregistered Sales of Securities During the year ended March 31, 2012, we sold the following unregistered securities that have not been previously reported in a priorreport: In March 2012, the Company began its non-public offering of up to $7,000,000, composed of the sale of up to 140 units (the “Units”)at $50,000 per Unit, each Unit composed of 43,478 shares of common stock and warrants to purchase another 10,870 shares ofcommon stock at $1.15 per share (the “Private Offering”). As of March 31, 2012, we sold 14.6 Units for gross proceeds of $730,015 inthe Private Offering. These securities were sold without registration under the Securities Act by reason of the exemption fromregistration afforded by the provisions of Section 4(a)(5) and/or Section 4(a)(2) thereof, and Rule 506 promulgated thereunder, as atransaction by an issuer not involving any public offering. Each of the purchasers of the Units was an accredited investor as definedin Regulation D. These securities have not been and will not be registered under the Securities Act and may not be offered or sold inthe United States absent registration or an applicable exemption from registration requirements. No selling commissions were paid inconnection with the Private Offering. Holders As of June 6, 2012, we had approximately 334 holders of record of our common stock. The number of record holders was determinedfrom the records of our transfer agent and does not include beneficial owners of common stock whose shares are held in the namesof various security brokers, dealers, and registered clearing agencies. Dividends We have not declared or paid any cash dividends on our common stock during the two most recent fiscal years and any subsequentinterim period. We do not anticipate paying any cash dividends to stockholders of our common stock in the foreseeable future. Inaddition, any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent uponour financial condition, results of operations, capital requirements, and such other factors as the Board of Directors deem relevant. Repurchase of Shares We did not repurchase any of our shares during the fourth quarter of the fiscal year covered by this report. ITEM 6. SELECTED FINANCIAL DATA As a smaller reporting company, we have elected not to provide the information required by this item. ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-Looking Statements The statements contained herein that are not historical facts are forward-looking statements that represent management’s beliefs andassumptions based on currently available information. Forward-looking statements include the information concerning our current andfuture operations, business strategies, need for financing, competitive position, ability to retain and recruit personnel, and the effectsof competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use offorward-looking terminology such as the words “believes,” “intends,” “may,” “should,” “anticipates,” “expects,” “could,” “plans,” orcomparable terminology or by discussions of strategy or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct. Such statementsby their nature involve risks and uncertainties that could significantly affect expected results, and actual future results could differmaterially from those described in such forward-looking statements.

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The following discussion should be read in conjunction with our financial statements and related notes thereto as included with thisreport. Overview On May 5, 2011, the public company, American Sands Energy Corp. (formerly Millstream Ventures, Inc.) (“ASEC”) entered into aStock Exchange Agreement dated April 29, 2011, as amended June 3, 2011, with Green River Resources, Inc., a Utah corporation(“GRI”), its parent, Green River Resources Corp., an Alberta, Canada corporation (“GRC”), and the shareholders of GRC (“Sellers”),pursuant to which ASEC agreed to issue 11,334,646 shares of common stock to the Sellers in exchange for all of the outstandingequity securities of GRC. ASEC also agreed to issue up to 5,492,196 shares of common stock upon exercise of warrants assumed atclosing and 535,704 common shares upon conversion of a promissory note to Bleeding Rock. Closing of the agreement was held onJune 3, 2011. On September 15, 2011, stockholders owning a majority of the voting control of the Company authorized, by written consent, anamendment to the articles of incorporation to change the name of the Company to “American Sands Energy Corp.” and authorized thechange of domicile of the Company from the State of Nevada to the State of Delaware through the merger of the Company with andinto a Delaware corporation to be formed for the purpose of changing domicile. The effective date of the change of domicile wasOctober 19, 2011. Concurrent with the change of domicile, ASEC effected a one-for-two reverse split of its outstanding commonstock, with fractional shares being rounded up to the next whole share. On December 31, 2011, GRC, a wholly owned non-operating subsidiary of ASEC was voluntarily dissolved under the BusinessCorporation Act of the Provence of Alberta, Canada. As a result of the dissolution, ASEC assumed all of the outstanding stock of GRIwhich was the sole asset of GRC at the time of dissolution. References to “we” or the “Company” refers to GRC and its wholly ownedsubsidiary, GRI, prior to the reverse merger transaction on June 3, 2011, and GRC, GRI, and ASEC (the legal parent) subsequent tothe reverse merger transaction until December 31, 2011, and GRI and ASEC after December 31, 2011. The Company is a development stage company and is engaged in the clean extraction of bitumen from oil sands prevalent in theMountain West region of North America using proprietary technology. Since inception, the Company has been engaged in thebusiness of acquiring and developing oil sand assets and technologies used to separate the oil contained in oil sands. The Companyanticipates that its primary operations will include the mining of oil sands, the separation of oil products therefrom and the sale of oiland oil by-products. Based on the reverse merger transaction, the public company, ASEC, is no longer considered to be a shellcompany. Prior to the reverse merger transaction, ASEC completed a private offering of 6,770,000 restricted shares of common stock for grossproceeds of $13,540, and a private offering of 1,755,062 restricted shares of common stock for gross proceeds of $100,004 that wereheld in escrow until the closing of the reverse merger transaction. Additionally, in May 2011, ASEC initiated a private offering of 10%Convertible Promissory Notes (the “Notes”) and warrants for gross proceeds of $1,750,000. As of the date of the reverse merger,June 3, 2011, $770,000 had been received from this offering. Upon completion of the reverse merger, all proceeds received in theseofferings were released from escrow. Subsequent to the closing of the reverse merger transaction through March 31, 2012, theCompany obtained an additional $745,000 from the private offering of the Notes. In March 2012, the Company initiated a private placement to sell an aggregate maximum of $7,000,000 composed of the sale of up to140 units at $50,000 per Unit, each unit composed of 43,478 shares of common stock and two-year warrants to purchase another10,870 shares of common stock at $1.15 per share. As of March 31, 2012, the Company had sold approximately 634,796 shares ofcommon stock under the private placement agreement resulting in gross proceeds of $730,015. The Company also issued 158,706warrants in connection with this private placement.

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Critical Accounting Policies and Estimates The selection and application of accounting policies is an important process that has developed as our business activities haveevolved and as the accounting rules have changed. Accounting rules generally do not involve a selection among alternatives, butinvolve an implementation and interpretation of existing rules, and the use of judgment, to the specific set of circumstances existing inour business. Discussed below are the accounting policies that we believe are critical to our financial statements due to the degree ofuncertainty regarding the estimates or assumptions involved and the magnitude of the asset, liability, revenue or expense beingreported. See Note 3 to our audited financial statements included in this Form 10-K for the year ended March 31, 2012, for adiscussion of those policies. Going Concern – This discussion and analysis of our financial condition and results of operations is based upon financial statementsthat have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). The preparation of thesefinancial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities anddisclosures of contingent assets and liabilities as of the date of the financial statements. We have based our estimates on historicalexperience and various other assumptions that we believe to be reasonable under the circumstances. Actual results, however, maydiffer from these estimates under different assumptions or conditions. The Company’s financial statements have been prepared on a going concern basis which contemplates the realization of assets andthe liquidation of liabilities in the ordinary course of business. The Company has incurred substantial losses from operations causingnegative working capital, in that current liabilities far exceed current assets, and the Company has negative operating cash flows,which raise substantial doubt about the Company’s ability to continue as a going concern. The Company sustained a net loss for theyear ended March 31, 2012 of $2,624,895 and a net loss for the year ended March 31, 2011 of $1,225,451 and has an accumulateddeficit of $8,729,780, as of March 31, 2012. In addition, the Company will require approximately $50,000,000 in capital expendituresto commence principal operations. Since inception of the development stage, the Company has not generated any revenue and its financial position is not sufficient tofund its planned business objective for an extended period of time. The Company is dependent on the sale of equity or debt securitiesin the next twelve months in order to obtain the requisite capital to continue to pursue its business objectives. If the Company is notable to obtain additional capital through the sale of equity or debt securities, it will not be able to commence production. Mineral Leases – Due to the uncertainty regarding the recoverability of costs to acquire, maintain, and develop mineral leases, to dateall costs to acquire, maintain, and develop mineral leases have been expensed as incurred. Stock-Based Compensation – The Company uses the Black-Scholes option-pricing model to determine the fair value of stock optionsand warrants granted. For employee stock options, the Company records the grant-date fair value as expense over the period inwhich it is earned, typically the vesting period. For consultants, the fair value of the stock-based award is recorded as expense overthe term of the service period, and unvested amounts are revalued using the Black-Scholes model at each reporting period. Forwarrants issued to lenders, the Company records the grant-date fair value of the warrants and any resulting beneficial conversionfeature for convertible debt, as a note discount. The discount is then amortized over the estimated life of the warrant as non-cashinterest expense. Results of Operations: Years Ended March 31, 2012 and 2011 ASEC did not have revenues for the years ended March 31, 2012 or 2011. During the year ended March 31, 2012, the Companyincurred a net loss of $2,624,895 compared to a net loss of $1,225,451 for the year ended March 31, 2011. During the year endedMarch 31, 2012, our operating expenses were $2,302,141, which represented a 117% increase, compared to the year ended March31, 2011.

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Research and development expenses increased to $436,408 for the year ended March 31, 2012 compared to zero for the year endedMarch 31, 2011. Expenses incurred during fiscal 2012 primarily relate to engineering and other consulting fees associated withdeveloping our mine plan and costs associated with constructing our oil sand testing unit that we will use to further develop andestablish the technological feasibility for our proprietary oil sand refining processes. Selling, general and administrative expenses increased by 104% from $850,295 during the year ended March 31, 2011 to $1,731,858during the year ended March 31, 2012 due to increased costs for professional fees and other public company expenses following thecompletion of the Company’s reverse merger transaction in June 2011 coupled with increased non-cash expenses associated withissuing stock-based compensation to officers and directors. Going forward, we believe that the obligations placed upon us as a resultof our reporting requirements under SEC rules and regulations will continue to result in our operating expenses increasing. Interest expense increased to $323,413 for the year ended March 31, 2012 from $162,978 for the year ended March 31, 2011. Theincrease in interest expense is due to the Company having increased debt as a result of the convertible notes payable issued duringour fiscal year ended March 31, 2012 (“Fiscal 2012”) coupled with higher non-cash interest expense as a result of amortization ofwarrants issued in connection with the convertible notes payable. Liquidity and Capital Resources As of March 31, 2012, the Company had $624,300 in cash and negative working capital of $2,200,095. As of March 31, 2012, theCompany had total liabilities of $5,137,541. As of March 31, 2012, the Company’s total assets were $1,246,751 consisting of cash,receivables, prepaid and other current assets, and property and equipment. The Company received $852,759 of cash in connectionwith the reverse merger transaction that occurred on June 3, 2011. Subsequent to the reverse merger, the Company received anadditional $745,000 from the issuance of convertible notes and $730,015 from a private placement of common stock. The Company has established a resource position, a working knowledge of the process technology and an initial list of environmentaland other permits required to build a commercial plant. Additional work to be completed as part of the project development phaseincludes:

1.

Final mine planning and civil engineering for the Sunnyside Project.

2.

Acquisition of additional property in areas of interest in order to block-up properties into logical and economical mining units.

3. Determination of technical and economic parameters for the commercial scale use of the process, including engineering.

4. Preparation of environmental impact statements and receipt of federal and state regulatory agency approval for the

commercial facility.

5. Completion of environmental and permitting work for the commercial facility.

The Company believes that with the $1,515,000 of proceeds from the sale of convertible notes payable received through March 31,2012, together with the $730,015 from its private placement of stock and the balance of the remaining proceeds the Companyexpects to raise from its private placement of stock, we will be in a position to initiate items 1 through 5 above. Additional financing ofapproximately $50,000,000 will be required to procure and install the necessary equipment to begin operations of a plant that webelieve will produce approximately 3,000 barrels per day of bitumen.

30


Management anticipates that we will be dependent, for the near future, on additional capital to fund operating expenses andanticipated growth. The report of the Company’s independent registered public accounting firm for the year ended March 31, 2012,expressed substantial doubt about the Company’s ability to continue as a going concern. The Company’s operating losses have beenfunded through the issuance of equity securities and borrowings. We will need additional funding in the future in order to continue ourbusiness operations. While we continually look for additional financing sources, in the current economic environment, theprocurement of outside funding is extremely difficult and there can be no assurance that such financing will be available, or, ifavailable, that such financing will be at a price that will be acceptable to us. Failure to generate sufficient revenue or raise additionalcapital would have an adverse impact on our ability to achieve our longer-term business objectives, and would adversely affect ourability to continue operating as a going concern. Off-Balance Sheet Arrangements We did not engage in any off-balance sheet arrangements during the period presented in our financial statements and have notentered into any off-balance sheet arrangements since that date. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a smaller reporting company, we have elected not to provide the disclosure required by this item. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements required in response to this item are included immediately following the signature page of this report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Disclosure in response to this item is incorporated herein by reference to Item 4.01 of Form 8-K dated April 4, 2011, and filed with theCommission on April 5, 2011. ITEM 9A. CONTROLS AND PROCEDURES Disclosure Controls and Procedures Our principal executive officer (“CEO”) and principal financial officer (“CFO”) conducted an evaluation, as of the end of the periodcovered by this report, of whether our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act)were (1) effective to ensure that information required to be disclosed by us in reports filed or submitted by us under the Exchange Actis recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities andExchange Commission, and (2) designed to ensure that information required to be disclosed by us in such reports is accumulated,organized and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regardingrequired disclosure. Based upon this evaluation, our CEO and CFO concluded that, as of March 31, 2012, our disclosure controls andprocedures were effective. Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting to providereasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for externalpurposes in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes thosepolicies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of our company; (ii) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of our management; and (iii)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of theCompany’s assets that could have a material effect on our financial statements.

31


Management, including our CEO and CFO, conducted an evaluation of the effectiveness of our internal control over financialreporting as of March 31, 2012. Management based its assessment on criteria established in Internal Control—Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment included evaluationof such elements as the design and operating effectiveness of key financial reporting controls, accounting policies, and our overallcontrol environment. Based on this evaluation, management determined that our internal control over financial reporting is effective,in light of our limited business activities and financial resources, to prevent or detect misappropriations and that a materialmisstatement of the Company’s annual or interim financial statements will be prevented or detected on a timely basis. Changes in Internal Control over Financial Reporting Except as described below, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) underthe Exchange Act) that occurred during the year ended March 31, 2012, that have materially affected, or are reasonably likely tomaterially affect, our internal control over financial reporting. During the quarter ended March 31, 2012, we created an auditcommittee of the Board of Directors and retained a Chief Financial Officer. ITEM 9B. OTHER INFORMATION No transactions occurred during the quarter ended March 31, 2012, which are reportable pursuant to this item.

PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by Item 10 is included under the captions “Directors, Executive Officers and Corporate Governance,” “Auditand Compensation Committees” “Nominating Procedures ” and “Section 16(a) Beneficial Ownership Reporting Compliance” in ourdefinitive information statement, which will be filed with the Commission within 120 days after the close of the fiscal year, and isincorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION The information required by Item 11 is included under the captions “Executive Compensation Summary,” “Equity Awards,”“Compensation Committee,” “Compensation Committee Report on Executive Compensation” and “Director Compensation” in ourdefinitive information statement, which will be filed with the Commission within 120 days after the close of the fiscal year, and isincorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS The information required by Item 12 with respect to security ownership of certain beneficial owners and management is includedunder the captions “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and“Securities Authorized for Issuance under Equity Compensation Plans” in our definitive information statement, which will be filed withthe Commission within 120 days after the close of the fiscal year, and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by Item 13 is included under the captions “Director Independence” and “Related Person Transactions” in ourdefinitive information statement, which will be filed with the Commission within 120 days after the close of the fiscal year, and isincorporated herein by reference.

32


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by Item 14 is included under the caption “Fees Paid” and “Audit Committee” in our definitive informationstatement, which will be filed with the Commission within 120 days after the close of the fiscal year, and is incorporated herein byreference.

PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES The following exhibits are included with this report: Incorporated by Reference

ExhibitNumber

Exhibit Description

Form

File No.

Exhibit

FilingDate

FiledHere-with

2.1 Stock Exchange Agreement dated April 29, 2011 8-K 000-53167 99.1 5/10/11

2.2 Amendment dated June 3, 2011, to Stock ExchangeAgreement dated April 29, 2011

10-K 000-53167 2.2 6/9/11

2.3 Agreement and Plan of Merger dated October 7,2011, between Millstream Ventures, Inc., a Nevadacorporation, and American Sands Energy Corp., aDelaware corporation

10-Q 000-53167 2.1 11/17/11

3.1 Delaware Certificate of Incorporation, as amended 10-Q 000-53167 3.1 11/17/11

3.2 Bylaws, as amended February 16, 2012 8-K 000-53167 3.2 2/23/12

3.3 Nevada Articles of Merger 8-K 000-53167 3.2 10/24/11

3.4 Delaware Certificate of Merger 8-K 000-53167 3.3 10/24/11

4.1 2011 Long-Term Incentive Plan 10-K 000-53167 4.1 6/9/11

10.1 Employment Agreement dated August 1, 2007, asamended on August 12, 2009, with William C. Gibbs*

10-K 000-53167 10.1 6/9/11

10.2 Employment Agreement dated February 16, 2012,with Andrew F. Rosenfeld*

8-K 000-53167 99.1 2/23/12

10.3 Advisory Agreement dated October 1, 2011, with C14Strategy LLC*

8-K 000-53167 99.2 2/23/12

10.4 Employment Agreement dated February 16, 2012,with Daniel F. Carlson*

8-K 000-53167 99.3 2/23/12

10.5 Amended and Restated Employment Agreement withRobin Gereluk dated March 31, 2011*

10-K 000-53167 10.5 6/9/11

10.6 LIFE Power & Fuels LLC Management and ServicesAgreement dated April 1, 2012*

X

10.7 Hydrocarbon and Mineral Lease dated January 14,2005, as amended, and assignment dated November8, 2005, Meany Land & Exploration, Inc.

X

10.8 Hydrocarbon and Mineral Lease dated February 23,2005, as amended, and assignment dated November8, 2005, with Osterbroen Family Limited Partnership,et al.

X

33


Incorporated by Reference

ExhibitNumber

Exhibit Description

Form

File No.

Exhibit

FilingDate

FiledHere-with

10.9 Hydrocarbon and Mineral Lease dated January 14, 2005,as amended, and assignment dated November 8, 2005,with Meany Land & Exploration, Inc.

X

10.10 Hydrocarbon and Mineral Lease dated October 2009, andAffirmation document dated May 6, 2011, with William G.Gibbs

X

10.11 Operating Agreement dated May 31, 2005, andaddendum thereto dated August 1, 2008, with BleedingRock LLC

10-K 000-53167 10.2 6/9/11

10.12 License, Development and Engineering Agreement datedJanuary 24, 2012 (confidential information has beenredacted)

X

10.13 Termination Agreement dated January 24, 2012, withBleeding Rock LLC

X

10.14 Gross Royalty Agreement dated January 24, 2012, withBleeding Rock LLC, and assignment dated January 31,2012, to Hidden Peak Partners LC

X

10.15 5% Convertible Promissory Note dated January 24, 2012,in the principal amount of $1,446,551 issued to BleedingRock LLC, and assignment dated January 31, 2012, toHidden Peak Partners LC

X

10.16 6% Convertible Promissory Note dated May 31, 2011, inthe principal amount of $214,281 issued to Bleeding RockLLC

X

10.17 Form of 10% Convertible Promissory Note 8-K 000-53167 99.1 2/3/12

10.18 Form of 10% Convertible Debt Warrant 8-K 000-53167 99.2 2/3/12

14.1 Code of Ethics adopted on November 11, 2011 10-Q 000-53167 99.1 2/17/12

16.1 Letter dated April 5, 2011, from Child, Van Wagoner &Bradshaw, PLLC

8-K 000-53167 16.1 4/5/11

21.1 List of Subsidiaries X

23.1 Consent of Tanner LLC, independent registered publicaccounting firm

X

34


Incorporated by Reference

ExhibitNumber

Exhibit Description

Form

File No.

Exhibit

FilingDate

FiledHerewith

31.1 Rule 13a-14 (a) Certification by Principal ExecutiveOfficer

X

31.2 Rule 13a-14 (a) Certification by Principal FinancialOfficer

X

32.1 Section 1350 Certification of Principal ExecutiveOfficer

X

32.2 Section 1350 Certification of Principal Financial Officer X *Management contract, or compensatory plan or arrangement, required to be filed as an exhibit. Financial Statements Index The following financial statements are filed with this report and are included immediately following the signature page hereof:

AUDITED FINANCIAL STATEMENTS OF AMERICAN SANDS ENERGY CORP.:

Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of March 31, 2012 and 2011 Consolidated Statements of Operations for the Years Ended March 31, 2012 and 2011, and for the CumulativePeriod from Inception through March 31, 2012 Consolidated Statements of Stockholders’ Deficit for the Cumulative Period from Inception through March 31, 2012 Consolidated Statements of Cash Flows for the Years Ended March 31, 2012 and 2011, and for the CumulativePeriod from Inception through March 31, 2012 Notes to Consolidated Financial Statements

SIGNATURE PAGE FOLLOWS

35


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused thisamended report to be signed on its behalf by the undersigned, thereunto duly authorized. American Sands Energy Corp. Date: June 22, 2012 By: /s/ William C. Gibbs

William C. Gibbs, Chief Executive Officer Date: June 22, 2012 By: /s/ Daniel F. Carlson

Daniel F. Carlson, Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons onbehalf of the registrant and in the capacities and on the dates indicated. NAME TITLE DATE /s/ William C. Gibbs Chairman & Chief Executive Officer June 22, 2012William C. Gibbs (Principal Executive Officer) /s/ Daniel F. Carlson Chief Financial Officer June 22, 2012Daniel F. Carlson (Principal Financial and Accounting Officer) /s/ Mark F. Lindsey Director June 22, 2012Mark F. Lindsey /s/ Edward P. Mooney Director June 22, 2012Edward P. Mooney /s/ Gayle McKeachnie Director June 22, 2012Gayle McKeachnie /s/ Justin Swift Director June 22, 2012Justin Swift

36


AUDITED CONSOLIDATED FINANCIAL STATEMENTS

OFAMERICAN SANDS ENERGY CORP.

(FORMERLY MILLSTREAM VENTURES, INC.)(A DEVELOPMENT STAGE COMPANY)

Page

Report of Independent Registered Public Accounting Firm F-2

Consolidated Balance Sheets as of March 31, 2012 and 2011 F-3

Consolidated Statements of Operations for the Years Ended March 31, 2012 and 2011, and for the Cumulative Periodfrom Inception through March 31, 2012

F-4

Consolidated Statements of Stockholders’ Deficit for the Cumulative Period from Inception through March 31, 2012 F-5

Consolidated Statements of Cash Flows for the Years Ended March 31, 2012 and 2011, and for the CumulativePeriod from Inception through March 31, 2012

F-6

Notes to Consolidated Financial Statements F-7

F-1


REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders ofAmerican Sands Energy Corp. and Subsidiaries We have audited the accompanying consolidated balance sheets of American Sands Energy Corp. and subsidiaries (a developmentstage company) (the Company) as of March 31, 2012 and 2011, and the related statements of operations, stockholders’ deficit, andcash flows for the years then ended and for the period from inception through March 31, 2012. These financial statements are theresponsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on ouraudits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statementsare free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting.Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internalcontrol over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles usedand significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe thatour audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position ofAmerican Sands Energy Corp. and subsidiaries as of March 31, 2012 and 2011, and the consolidated results of their operations andtheir cash flows for the years then ended and for the period from inception through March 31, 2012 in conformity with U.S. generallyaccepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Asreflected in the financial statements and as discussed in Note 4 to the financial statements, the Company has incurred significantlosses and negative cash flows from operating activities since inception, has negative working capital and an accumulated deficit, andis dependent on additional debt or equity financing in order to continue its operations. These conditions, among others, raisesubstantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding those matters are alsodiscussed in Note 4. The accompanying financial statements do not include any adjustments that might result from the outcome ofthis uncertainty. /s/ Tanner LLC Salt Lake City, UtahJune 21, 2012

F-2



(Formerly Millstream Ventures, Inc.)(A Development Stage Company)

Consolidated Balance Sheets(Expressed in US Dollars)

March 31, March 31, 2012 2011

Assets Current assets:

Cash $ 624,300 $ 54,224 Receivables 382,500 — Prepaid and other current assets 237,693 171,682

Total current assets 1,244,493 225,906 Property and equipment, net 2,258 —

Total assets $ 1,246,751 $ 225,906

Liabilities and Stockholders' Deficit

Current liabilities: Accounts payable $ 536,809 $ — Accrued expenses 1,222,450 2,925,150 Notes payable — 175,000

Total current liabilities 1,759,259 3,100,150 Convertible notes payable, net of discount of $669,351 948,580 — Convertible note payable, related party 1,685,329 — Deposits for purchase of common stock, net 710,214 — Mineral lease payable 34,159 53,677 Total liabilities 5,137,541 3,153,827

Commitments and contingencies

Stockholders' deficit: Preferred stock, $.001 par value: 10,000,000 shares authorized; no shares issued — — Common stock, $.001 par value: 200,000,000 shares authorized; 27,676,960 and11,334,646 shares issued, respectively 27,677 11,335 Additional paid-in capital 4,811,313 3,165,629 Deficit accumulated during the development stage (8,729,780) (6,104,885)

Total stockholders' deficit (3,890,790) (2,927,921)

Total liabilities and stockholders' deficit $ 1,246,751 $ 225,906

See the accompanying notes to consolidated financial statements.

F-3




Consolidated Statements of Operations(Expressed in US Dollars)

Year Ended Year Ended

CumulativeFrom Inception

through March 31, 2012 March 31, 2011 March 31, 2012 Revenues $ — $ — $ — Operating expenses:

Research and development 436,408 — 436,408 Selling, general and administrative 1,731,858 850,295 6,483,523 Mineral lease expense 133,875 213,044 1,321,307

Total operating expenses 2,302,141 1,063,339 8,241,238 Loss from operations (2,302,141) (1,063,339) (8,241,238)Other income (expense):

Interest income 860 87 22,985 Interest expense (323,413) (162,978) (508,577)Other income (expense) 49 879 (2,000)

Total other income (expense) (322,504) (162,012) (487,592)Net loss before provision for income taxes (2,624,645) (1,225,351) (8,728,830)Provision for income taxes (250) (100) (950)Net loss $ (2,624,895) $ (1,225,451) $ (8,729,780)

Net loss per common share - basic and diluted $ (0.11) $ (0.11)

Weighted average common shares outstanding - basic and diluted 23,789,317 11,334,646


F-4


American Sands Energy Corp.(Formerly Millstream Ventures, Inc.)

(A Development Stage Company)Consolidated Statements of Stockholders' Deficit

From Inception Through March 31, 2012(Expressed in US Dollars)

Common stock Additional

paid-in

Deficitaccumulated

during thedevelopment

Totalstockholders

Shares Amount capital stage deficit Balance at December 1, 2004,

inception — $ — $ — $ — $ —

Recapitalization due to reversemerger 46 — — — —

Common stock issued (at $.000097

per share) 10,300,000 10,300 (9,300) — 1,000

Special warrants issued (at $0.26 perwarrant) — — 1,079,750 — 1,079,750

Special warrants issued (at $0.74 per

warrant) — — 140,702 — 140,702

Special warrants issued (at $0.70 perwarrant) — — 453,549 — 453,549

Stock-based compensation expense — — 533,082 — 533,082

Net loss — — (4,879,434) (4,879,434)

Balance as of March 31, 2010 10,300,046 10,300 2,197,783 (4,879,434) (2,671,351)

Stock-based compensation — — 80,537 — 80,537

Conversion of notes payable tocommon stock (at $0.23 per share) 1,034,600 1,035 477,149 — 478,184

Special warrants issued for cash (at

$0.19 per warrant) — — 152,407 — 152,407

Special warrants issued for paymentfor leases (at $0.20 per warrant) — — 150,528 — 150,528

Issuance of warrants in connection

with debt — — 107,225 — 107,225

Net loss — — — (1,225,451) (1,225,451)

Balance as of March 31, 2011 11,334,646 11,335 3,165,629 (6,104,885) (2,927,921)

Net assets acquired in reversemerger 10,280,062 10,280 435,495 — 445,775

Conversion of notes payable to

common stock in connection withreverse merger dated June 3, 2011(at $0.43 per share) 437,500 437 188,159 — 188,596


Stock-based compensation — — 597,426 — 597,426

Issuance of stock options toconsultants — — 5,963 — 5,963

Issuance of warrants in connection

with debt — — 424,266 — 424,266

Exchange of special warrants forcommon stock 5,624,752 5,625 (5,625) — —

Net loss — — — (2,624,895) (2,624,895)

Balance as of March 31, 2012 27,676,960 $ 27,677 $ 4,811,313 $ (8,729,780) $ (3,890,790)


F-5




Consolidated Statements of Cash Flows(Expressed in US Dollars)

Year Ended Year Ended

CumulativeFrom Inception

through March 31, 2012 March 31, 2011 March 31, 2012Cash flows from operating activities:

Net loss $ (2,624,895) $ (1,225,451) $ (8,729,780)Adjustments to reconcile net loss to net cash used in operating

activities: Depreciation 274 — 5,726 Gain on disposal of fixed assets (49) — (49)Accretion of debt discount 195,985 107,225 303,210 Straight-line of mineral lease payable (19,518) (19,518) 34,159 Stock-based compensation expense 597,426 80,537 1,211,045 Issuance of stock options to consultants 5,963 — 5,963 Special warrants issued in payment for leases — 150,528 188,160 Notes payable issued in payment for leases — — 126,840

(Increase) decrease in operating assets: Receivables (382,500) — (382,500)Prepaid and other current assets (66,011) — (237,693)

Increase (decrease) in operating liabilities: Accounts payable 536,809 — 536,809 Accrued expenses (40,426) 707,720 2,911,436 Accrued interest on convertible debt 127,429 — 127,429

Net cash used in operating activities (1,669,513) (198,959) (3,899,245)Cash flows from investing activities:

Acquisition of property and equipment (3,072) — (8,524)Disposal of property and equipment 588 — 588

Net cash used in investing activities (2,484) — (7,936)Cash flows from financing activities:

Proceeds from issuance of notes payable — 100,000 437,000 Proceeds from issuance of convertible notes payable 745,000 — 745,000 Proceeds from issuance of notes payable, related party — — 25,000 Proceeds from issuance of common stock and special warrants — 152,407 1,827,408 Proceeds from deposits for purchase of common stock 710,214 — 710,214 Net cash received in reverse merger 852,759 — 852,759 Principal payments on notes payable (65,900) — (65,900)

Net cash provided by financing activities 2,242,073 252,407 4,531,481 Net increase in cash 570,076 53,448 624,300 Cash, beginning of the period 54,224 776 — Cash, end of the period $ 624,300 $ 54,224 $ 624,300

Supplemental disclosures of cash flow information:

Interest paid $ — $ — $ —

Income taxes paid $ 950 $ — $ 950

Supplemental schedule of non-cash investing and financing activities:

Conversion of notes payable to common stock $ 188,596 $ 478,184 $ 666,780

Convertible note issued for accrued expenses $ 1,660,832 $ — $ 1,660,832

Issuance of warrants associated with convertible notes payable $ 424,266 $ — $ 424,266



F-6




Notes to Consolidated Financial Statements(Expressed in US Dollars)

Note 1 - Description of Business and Nature of Operations Green River Resources Corp. (an Alberta corporation) (“GRC”) formed on December 1, 2004 and its wholly owned subsidiary, GreenRiver Resources, Inc. (a Utah corporation) (“GRI”), formed on February 16, 2005, were formed for the purpose of extracting oil fromoil sands, oil shale, and other similar types of naturally occurring hydrocarbons in a cost effective and environmentally safe manner.As described in Note 2, GRC completed a merger transaction with American Sands Energy Corp. (formerly Millstream Ventures, Inc.)(“ASEC”), a publicly traded company, on June 3, 2011. The merger transaction was accounted for as a reverse acquisition with GRCtreated as the accounting acquirer. On December 31, 2011, GRC, a wholly owned non-operating subsidiary of ASEC, was voluntarily dissolved under the BusinessCorporation Act of the Provence of Alberta, Canada. As a result of the dissolution, ASEC assumed all of the outstanding stock of GRIwhich was the sole asset of GRC at the time of dissolution. References to the “Company” refer to GRC and its wholly ownedsubsidiary, GRI, prior to the reverse merger transaction on June 3, 2011, and GRC, GRI, and ASEC (the legal parent) subsequent tothe reverse merger transaction until December 31, 2011, and GRI and ASEC after December 31, 2011. The Company has notcommenced operations and, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification(“ASC”) 915, Development Stage Entities, is considered a development stage company. The Company has acquired rights to oil sand ore covering approximately 1,760 acres of prime oil sand deposits in the Sunnysidearea of Utah. Prior to January 24, 2012, the Company had licensed proprietary extraction technology with Bleeding Rock, LLC(“Bleeding Rock”), which had an exclusive license to a bitumen and hydrocarbon extraction process to separate oil and otherhydrocarbons from sand, dirt and other substances. Bleeding Rock is a significant stockholder of the Company and is 50% owned incombination among the Chief Executive Officer of the Company and two of his relatives. Effective January 24, 2012, the Company entered into a License, Development and Engineering Agreement with Universal OilRecovery Corp. and SRS International (the “License Agreement”) whereby the Company was granted an exclusive non-transferablelicense to use certain technology in its proposed business to extract bitumen from oil sands. The territory covered by the agreementincludes the State of Utah and any other geographic location in which a future designated project is commenced by or through theCompany. In conjunction with the License Agreement, the Company terminated its operating agreement with Bleeding Rock underwhich Bleeding Rock had licensed rights to use similar technology to GRI. The License Agreement also designates the Company asan “authorized agent” in representing the owner of the technology in future projects. The Chief Executive Officer, a director, andprincipal stockholder of the Company, is an owner and manager of Bleeding Rock. The License Agreement requires the licensing parties to provide demonstration equipment for the process by which their proprietarysolvent extracts bitumen from oil sands and to demonstrate the process on up to 150 tons of oil sands. The term of the LicenseAgreement is for 20 years and thereafter so long as production of products using the technology is commercially and economicallyfeasible. Note 2 - Agreement and Plan of Merger On May 5, 2011, GRC entered into a Stock Exchange Agreement dated April 29, 2011, as amended June 3, 2011, with ASEC, apublicly held company, pursuant to which ASEC agreed to issue 11,334,646 shares of its common stock to the stockholders of GRCin exchange for all of the outstanding equity securities of GRC. ASEC also agreed to issue up to 5,492,196 shares of its commonstock upon exercise of warrants assumed at closing and 535,704 common shares upon conversion of a promissory note to BleedingRock.

F-7





On June 3, 2011, GRC and ASEC closed the merger transaction described above. As a result of the merger, stockholders of GRCobtained a 56% interest in ASEC. Because the stockholders of GRC obtained a majority ownership in ASEC through the merger, thetransaction has been accounted for as a reverse merger. Accordingly, the historical financial statements reflect the consolidatedoperations of GRC through June 3, 2011 and reflect the consolidated operations of GRC and ASEC from June 3, 2011 through March31, 2012. As a result of the merger, GRC received approximately $853,000 in cash to fund operations. In connection with theagreement, GRC lenders exchanged $175,000 in notes payable plus accrued interest of $13,000 for 437,500 shares of ASECcommon stock. On September 15, 2011, stockholders owning a majority of the voting control of the Company authorized, by written consent, anamendment to the articles of incorporation to change the name of the Company to “American Sands Energy Corp.” and authorized thechange of domicile of the Company from the State of Nevada to the State of Delaware through the merger of the Company with andinto a Delaware corporation formed for the purpose of changing domicile. The effective date of the change of domicile was October19, 2011. The Company is a development stage company engaged in the clean extraction of bitumen from oil sands prevalent in the MountainWest region of North America using proprietary technology. Based on the reverse merger transaction, the public company, ASEC, isno longer considered to be a shell company. Note 3 – Significant Accounting Policies These financial statements have been prepared by the Company in accordance with U.S. generally accepted accounting principles(“US GAAP”) for annual financial information, as well as the instructions to Form 10-K. Accordingly, they include all of the informationand notes required by US GAAP for complete financial statements. The preparation of financial statements, in conformity with US GAAP, requires management to make judgments, estimates, andassumptions that could affect the reported amounts of assets and liabilities at the date of the financial statements and the reportedamounts of revenue and expenses during the reporting period. The Company based its estimates and assumptions on historicalexperience and on various other assumptions we believed to be applicable, and evaluated them on an on-going basis to ensure theyremain reasonable under current conditions. Actual results could differ significantly from those estimates. a) Principles of Consolidation The consolidated financial statements include the consolidated operations of GRC through June 3, 2011 and reflect the consolidatedoperations of GRC and ASEC from June 3, 2011 through March 31, 2012. All significant intercompany balances and transactionshave been eliminated in consolidation. b) Receivables The Company has not yet commenced its primary operations and remains a development stage company as of March 31, 2012. Asof March 31, 2012, the Company has receivables related to billings to a third-party company for certain research and developmentexpenses incurred. At the end of each reporting period, the Company estimates its allowance for doubtful accounts based onhistorical information and specific facts and circumstances associated with each customer balance. As of March 31, 2012, theCompany anticipates that all outstanding receivables will be fully collected and thus no allowance for doubtful accounts has beenrecorded. c) Property and Equipment Property and equipment are made up completely of computers and equipment and are stated at cost and depreciated using thestraight-line method over the estimated useful lives of 3 to 7 years.

F-8





Maintenance, repairs, minor renewals and betterments, which do not extend the useful life of the asset are charged to expense asincurred. Major renewals and betterments are capitalized. The cost of property and equipment sold or otherwise disposed of and therelated accumulated depreciation are removed from the accounts, and any gains or losses arising from the sale or disposal areincluded in the statements of operations. d) Mineral Leases In certain cases, the Company capitalizes costs related to investments in mineral lease interests on a property-by-property basis.Such costs include mineral lease acquisition costs. Costs are deferred until such time as the extent of proved developed reserves hasbeen determined and mineral lease interests are either developed, the property sold or the mineral lease rights are allowed to lapse.To date all exploration and lease costs have been expensed. e) Deposits for Purchase of Common Stock, net The Company records deposits for purchase of common stock when monies are received to purchase common stock but the relatedshares have not yet been issued. The Company also records a reduction in deposits for purchase of common stock for commissionsassociated with the money raised. Deposits for purchase of common stock are recorded to common stock when the related commonshares are issued. As of March 31, 2012, the Company had $710,214 of deposits for purchase of common stock (net of commissionof $19,801). f) Income Taxes The Company applies the guidance in ASC 740, Income Taxes, which requires an asset and liability approach for financial accountingand reporting for income taxes, and the recognition of deferred income tax assets and liabilities for the temporary differences betweenthe financial reporting bases and tax bases of the Company’s assets and liabilities at enacted tax rates expected to be in effect whensuch amounts are realized or settled. The Company calculates its current and deferred tax provision based on estimates and assumptions that can differ from the actualresults reflected in income tax returns filed during the subsequent year. Adjustments based on filed returns are recorded whenidentified. The Company recognizes the benefit from a tax position only if it is more-likely-than-not that the position would be sustained uponaudit based solely on the technical merits of the tax position. Interest and penalties related to unrecognized tax benefits are includedas a component of income tax expense. ASC 740 clarifies the accounting and disclosure for uncertainty in tax positions, as defined. The Company has analyzed filingpositions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in thesejurisdictions. As a result of the voluntary dissolution of GRC on December 31, 2011, the Company may not be able to utilize netoperating loss carry-forwards generated by GRC to offset future taxable income. The Company believes that its income tax filingpositions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverseeffect on the Company’s financial position, results of operations, or cash flows. Therefore, no reserves for uncertain income taxpositions have been recorded. g) Reverse Stock Split Effective October 19, 2011, the Company implemented a 1-for-2 reverse stock split of its issued and outstanding common stock. Allcommon share and per common share information in the accompanying consolidated financial statements have been retroactivelyrestated to reflect the reverse common stock split.

F-9





h) Stock-based Compensation The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options and warrants granted. Foremployee stock options, the Company records the grant-date fair value as expense over the period in which it is earned, typically thevesting period. For consultants, the fair value of the stock-based award is recorded as expense over the term of the service period,and unvested amounts are revalued using the Black-Scholes model at each reporting period. For warrants issued to lenders, theCompany records the grant-date fair value of the warrants and any resulting beneficial conversion feature for convertible debt, as anote discount. The discount is then amortized over the term of the convertible debt as non-cash interest expense. i) Net Loss Per Common Share Basic earnings or loss per common share is computed on the basis of the weighted average number of shares outstanding during theperiods. Diluted earnings or loss per common share is calculated on the basis of the weighted average number of common sharesoutstanding during the period plus the effect of potential dilutive shares during the period. Potential dilutive shares includeoutstanding stock options and warrants and convertible debt instruments. For periods in which a net loss is reported, potential dilutiveshares are excluded because they are antidilutive. Therefore, basic loss per common share is the same as diluted loss per commonshare for the years ended March 31, 2012 and 2011. j) Research and Development The Company continues to develop additional technology related to its proprietary bitumen extraction process. To date, the Companyhas expensed costs associated with developing its technology as research and development costs. For the years ended March 31,2012 and 2011, the Company incurred costs of $436,408 and $0, respectively, for research and development of the technologyinvolved with developing its technologies. k) Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and receivables.Cash is placed on deposit in major financial institutions in the United States. Such deposits may be in excess of insured limits.Management believes that the financial institutions that hold the Company’s cash are financially sound and, accordingly, minimalcredit risk exists with respect to these balances. As of March 31, 2012, all of ASEC’s receivables were from one company for reimbursement of research and development costs. Thecompany is a large multi-national company. ASEC’s management has performed an evaluation of the company’s financial conditionand believes the receivables are fully collectible. l) Recent Accounting Pronouncements In May 2011, the FASB issued updated guidance related to fair value measurements and disclosures, including (a) the application ofthe highest and best use valuation premise concepts, (b) measuring the fair value of an instrument classified in a reporting entity'sstockholders' equity, and (c) quantitative information required for fair value measurements categorized within Level 3. Additionally,disclosure requirements have been expanded to include additional disclosure for Level 3 measurements regarding the sensitivity offair value to changes in unobservable inputs and any interrelationships between those inputs. The guidance applies prospectively,and is effective for the Company beginning April 1, 2012. The updated guidance is not expected to have a material impact on theCompany’s consolidated financial statements.

F-10





In June 2011, the FASB issued Accounting Standards Update (“ASU”) 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”). ASU 2011-05 requires that all non-owner changes in stockholders’ equity be presented either in a single continuous statementof comprehensive income or in two separate but continuous statements. If presented in two separate statements, the first statementshould present total net income and its components followed immediately by a second statement of total other comprehensiveincome, its components and the total comprehensive income. In December 2011, the FASB issued ASU 2011-12, Deferral of theEffective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income inAccounting Standards Update No. 2011-05 (“ASU 2011-12”). ASU 2011-12 defers those changes in ASU 2011-05 that relate to thepresentation of reclassification adjustments. The FASB has deferred those changes in order to reconsider whether to present on theface of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components ofnet income and other comprehensive income for all periods presented. ASU 2011-12 does not impact the requirement of ASU 2011-05 to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financialstatements. ASU 2011-05 is effective for fiscal years and interim periods within those fiscal years, beginning after December 15,2011, which for the Company is the first quarter of fiscal 2013. The adoption of ASU 2011-05 and ASU 2011-12 is not expected tohave a material impact on the Company’s consolidated financial statements. Note 4 – Going Concern The Company’s financial statements have been prepared on a going concern basis which contemplates the realization of assets andthe liquidation of liabilities in the ordinary course of business. The Company has incurred substantial losses from operations, hasnegative working capital, and has negative cash flows from operating activities, which raise substantial doubt about the Company’sability to continue as a going concern. The Company sustained a net loss for the year ended March 31, 2012 of $2,624,895 and a netloss for the year ended March 31, 2011 of $1,225,451 and has an accumulated deficit of $8,729,780, as of March 31, 2012. Inaddition, the Company will require approximately $50,000,000 in capital to commence principal operations. The Company intends to continue its research and development efforts, but does not have any revenues in order to finance theseactivities internally. As a result, the Company intends to seek financing in order to fund its operations. The Company has been able to meet its short-term needs primarily through loans from third parties, private placements of equity anddebt securities, and deferring certain payment obligations to related parties. The Company is currently actively seeking additionalprivate placements of equity securities. The Company plans to continue to obtain additional financing through the sale of equity ordebt securities in order to finance operations until it can generate positive cash flows from operating activities. The equity privateplacements are expected to provide the needed funds for continued operations and further research and development of theCompany’s proprietary oil sand refining methods. The Company can provide no assurance that it will be able to obtain sufficientadditional financing that it needs to develop its technology and alleviate doubt about its ability to continue as a going concern. If theCompany is able to obtain sufficient additional financing proceeds, the Company cannot be certain that this additional financing willbe available on acceptable terms, if at all. To the extent the Company raises additional funds by issuing equity securities theCompany’s stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants thatimpact the Company’s ability to conduct business. The consolidated financial statements do not include any adjustments that mightresult from the outcome of this uncertainty.

F-11





Note 5 – Accrued Expenses Accrued expenses consist of the following:

March 31,

2012 March 31,

2011Payroll $ 1,172,893 $ 1,137,695 Mineral lease payable 49,557 195,213 Fees payable to Bleeding Rock — 1,521,551 Legal and professional fees — 35,126 Income tax payable — 700 Reports and engineering — 21,273 Interest — 13,592 Total accrued expenses $ 1,222,450 $ 2,925,150

Note 6 – Mineral Leases During 2005, the Company acquired two oil sand mineral leases: one covering an undivided 40% interest and the other covering anundivided 20% interest in a 1,120-acre parcel. Additionally, an undivided 16.666% interest in a 640-acre tract was acquired. Theseleases are located in Carbon County, Utah, have a 6-year life, and require minimum yearly lease payments of $151,403, increasing to

$224,597 on the 5th anniversary of the lease date if the properties have not reached commercial production. In January 2012, thelease terms were extended through 2014 and the annual lease payments remained at $224,579. In 2009, a fourth lease was entered into with William G. Gibbs, a relative of the chief executive officer of the Company, for anadditional undivided 5% interest in the 640-acre tract (for a total 21.666% undivided interest in the 640-acre tract). This lease islocated in Carbon County, Utah, adjacent to the 1,120-acre tract. This lease has a 6-year life with a minimum yearly lease payment of$7,965 and is scheduled to terminate by October 2015 if the property has not reached commercial production. The Company’s interest in these leases is conditioned upon the payments of royalties, minimum yearly investment in development,tax payments, and other obligations to the owners of the leases. Upon commencement of operations, each lease requires a production royalty of 10% of the market value of the minerals sold, net ofapplicable costs and expenses. The Company has the right, but not the obligation, to pool or unitize the leases, such that the oremined is allocated between, and the royalties paid, on their proportionate interests. If not pooled, the owners will be paid royaltiesonly to the extent the oil sand ore is mined on their respective property. Through March 31, 2012, no production royalties wereaccrued or paid because production on these properties had not commenced. After three consecutive calendar years of productionon the 1,120-acre parcel, the production royalty on the 1,120-acre parcel shall be the greater of the 10% royalty or $1,000,000annually. Future minimum lease payments are as follows for the years ending: March 31, 2013 $ 232,562 2014 176,413 Total future minimum lease payments $ 408,975

F-12





Note 7 – Notes Payable On June 3, 2011, outstanding notes payable of $150,000, related-party notes payable of $25,000, and approximately $13,000 ofaccrued interest, were converted into 437,500 shares of common stock in connection with the Company’s reverse merger. Note 8 – Convertible Notes Payable As a result of the reverse merger, the Company assumed convertible notes payable of $770,000 on June 3, 2011. In addition, theCompany has issued $745,000 of convertible notes payable subsequent to the reverse merger, through March 31, 2012. These noteswere issued pursuant to a $1,750,000 private offering. As of March 31, 2012, there was $1,515,000 of convertible notes payableoutstanding with accrued interest of $102,931. The notes bear interest at 10% per annum and all principal and interest are due and payable by April 30, 2014. The notes and allaccrued interest are convertible into the Company’s common stock at any time by the lender at approximately $0.50 per commonshare until the due date. The notes automatically convert upon completion of a financing of $10,000,000 or more. In connection with the terms of the offering, holders of the notes also received 100,286 warrants for each $50,000 loaned to theCompany. During the year ended March 31, 2012, the Company granted 3,038,667 warrants in connection with this offering. TheCompany recorded a debt discount related to the warrants and resulting beneficial conversion feature of $865,334. For the warrantsissued during the year ended March 31, 2012, the Company valued the warrant discount using the Black-Scholes pricing model withthe following weighted average assumptions: Assumption Dividend yield Weighted average volatility 158.34%Risk-free interest rate 0.99%Expected life (years) 2.79 Note 9 – Convertible Note Payable, Related Party On May 31, 2011, the Company converted $214,281 of its outstanding payable to a related party, Bleeding Rock LLC, into a 6%convertible promissory note. The note is convertible into 535,704 shares of the Company’s common stock. As of March 31, 2012, thecarrying balance of the note was $225,306, including accrued interest of $11,025. Effective January 24, 2012, the Company entered into a Termination Agreement with Bleeding Rock (the “Termination Agreement”).The purpose of the agreement was to terminate the Operating Agreement dated May 31, 2005, as amended, between Bleeding Rockand GRI (the “Operating Agreement”). Pursuant to the Operating Agreement GRI had obtained the rights through Bleeding Rock toutilize a process for the development, engineering and extraction of hydrocarbons from oil sands. In light of conversations withpotential investors, the Company determined that having the technology licensed directly to the Company (rather than throughBleeding Rock and the Operating Agreement) would be beneficial to fund raising prospects. As of the date of the Termination Agreement, GRI owed $1,446,551 to Bleeding Rock, payable under the terms of the OperatingAgreement. In connection with the termination of the Operating Agreement, GRI issued a 5% convertible promissory note to BleedingRock for this amount. The note is due and payable in one year from the date of the note and is convertible into shares of theCompany’s common stock any time before maturity at the rate of one share for each $0.50 of principal or interest converted. As ofMarch 31, 2012, the carrying balance of the note was $1,460,023, including accrued interest of $13,472. Effective on the date oftermination, Bleeding Rock assigned its interest in the note to Hidden Peak, a related party who is the majority owner of BleedingRock.

F-13





Note 10 – Common Stock In March 2012, the Company initiated a private placement to sell an aggregate maximum of $7,000,000 composed of the sale of up to140 units at $50,000 per Unit, each unit composed of 43,478 shares of common stock and two-year warrants to purchase another10,870 shares of common stock at $1.15 per share. As of March 31, 2012, the Company had sold 634,796 shares of common stockunder the private placement agreement resulting in gross proceeds of $730,015. As more fully described in Note 11, the Companyalso issued 158,706 warrants in connection with this private placement. As of March 31, 2012, none of the shares had been issued,so the amounts received are reflected as “Deposits for purchase of common stock, net” on the March 31, 2012 consolidated balancesheet. Note 11 – Warrants The Company has four classes of warrants; namely, special warrants, bridge warrants, convertible debt warrants, and privateplacement warrants. a) Special Warrants

The Company has issued 5,624,752 warrants from its inception in exchange for cash totaling $1,826,408. Each warrant issued,entitles the holder, without payment of additional consideration, to acquire fully paid and non-assessable common shares. Thewarrants can be exercised at the option of the holder or the Company at any time. In December 2011, the Company elected toexchange the special warrants for common stock of the Company. As of March 31, 2012 and March 31, 2011, there were 0 and5,624,752 special warrants outstanding, respectively.

b) Bridge Warrants

In connection with the issuance of certain notes payable (see Note 7), the Company granted bridge warrants to the note holders.These bridge warrants give the holder the right to purchase shares of the Company’s common stock at $0.40 per share. As ofMarch 31, 2012 and March 31, 2011, there were 244,420 bridge warrants issued and outstanding.

c) Convertible Debt Warrants

In connection with the Company’s $1,750,000 private convertible note offering (see Note 8), the Company granted warrants to thenote holders. These warrants give the holder the right to purchase shares of the Company’s common stock at approximately$0.50 per share. The warrants expire on April 30, 2014. As of March 31, 2012 and March 31, 2011, there were 3,038,667 and 0warrants outstanding, respectively.

d) Private Placement WarrantsIn connection with the Company’s $7,000,000 private placement of its common stock (see Note 10), the Company grantedwarrants to the stock purchasers. These warrants give the holder the right to purchase shares of the Company’s common stock at$1.15 per share for a 2-year period. As of March 31, 2012 and 2011, there were 158,706 and 0 warrants outstanding,respectively.

F-14





Note 12 – Stock Option Plan In April 2011, the Company adopted the 2011 Long-Term Incentive Plan (the “2011 Plan”) which reserves for the issuance of up to7,000,000 shares of the Company’s common stock. During the year ended March 31, 2012, the Company issued 3,087,500 optionsto officers and directors of the Company outside of the 2011 Plan, including 1,537,500 issued in connection with the stock optionexchange described below. The options vested immediately, have an exercise price of $0.40 per share, and expire on March 31,2018. In September 2011, the Company issued 75,000 5-year options to directors of the Company under the 2011 Plan. The optionshave a $0.50 exercise price and vest 25% immediately and 25% per year at the beginning of each of the next 3 subsequent years. InFebruary 2012, the Company issued 50,000 5-year options to a third-party financial consultant and 600,000 5-year options to newmanagement of the Company under the 2011 Plan. The options granted to the consultant have a $0.25 exercise price and vest 25%immediately and 25% per year at the beginning of each of the next 3 subsequent years. The options granted to the new managementhave an exercise price equal to the next financing by the Company and vest 50% upon a $5,000,000 financing and 50% upon a$45,000,000 financing. The Company recorded $603,389 of compensation expense during the year ended March 31, 2012 inconnection with issuing the options described above. Prior to the Company’s adoption of the 2011 Plan, from time to time the Company issued stock options to certain key employees,officers and directors. The Company had authorized a total of 1,775,000 shares of its common stock for grant as stock options.Options to purchase shares of the Company’s common stock were granted at a price not less than 100% of the estimated marketprice on the date of grant. The Company had options that vested immediately and options that vested over a 3-year period, one thirdon the grant date and one third each year thereafter. As of March 31, 2011, the Company had granted 1,537,500 options under theseterms. In connection with the amended Stock Exchange Agreement dated May 31, 2011, all of the stock options issued by theCompany prior to June 3, 2011 were cancelled and exchanged for new options issued outside of the 2011 Plan in connection with theCompany’s reverse merger with ASEC. The fair value of each option grant is estimated on the date of grant using the Black-Scholesoption-pricing model with the weighted average assumptions noted below: March 31,Assumption 2012 2011Dividend yield — — Weighted average volatility 150.17% 144.12%Risk-free interest rate 1.05% 1.07%Expected life (years) 4 2 Expected option lives were based on historical data of the Company. Expected stock price volatility was based on data fromcomparable public companies. The risk free interest rate was calculated using U.S. Treasury constant maturity rates similar to theexpected lives of the options, as published by the Federal Reserve. The Company has no plans to declare any future dividends.

F-15





The summary of option activity for the years ended March 31, 2012 and 2011 is presented below:

Number of

Shares

WeightedAverage

Exercise Price

WeightedAverage

Remaining Life(years)

Balance as of April 1, 2010 1,525,000 $ 0.68 2.00 Granted 37,500 0.40 3.00 Exercised — — — Canceled — — — Expired (25,000) 0.70 — Balance as of March 31, 2011 1,537,500 0.68 1.00 Granted 3,212,500 0.40 5.95 Exercised — — — Canceled — — — Expired (1,537,500) 0.68 — Balance as of March 31, 2012 3,212,500 0.40 5.95

The weighted average grant-date fair value of options granted during the years ended March 31, 2012 and March 31, 2011 was$0.20 and $0.14, respectively. Outstanding and exercisable options presented by price range as of March 31, 2012 are as follows: Options Outstanding Options Exerciseable

Exercise Price

Number ofOptions

Outstanding

WeightedAverage

RemainingLife (Years)

WeightedAverage

Exercise Price

Number ofOptions

Exercisable

WeightedAverage

Exercise Price $ 0.25 50,000 4.87 $ 0.25 12,500 $ 0.25 0.40 3,087,500 6.00 0.40 3,087,500 0.40 0.50 75,000 4.50 0.50 18,750 0.50 $0.25-$0.50 3,212,500 5.95 $ 0.40 3,118,750 $ 0.40

F-16





The estimated fair value of the Company’s stock options, less expected forfeitures, is amortized over the options’ vesting period onthe straight-line basis. The Company recognized the following equity-based compensation expenses and benefits during the fiscalyears ended March 31, 2012 and 2011: March 31, 2012 2011Stock-based compensation expense $ 603,389 $ 80,537 Income tax benefit recognized related to stock-based compensation — — Income tax benefit realized from the exercise and vesting of options — — As of March 31, 2012, there was $40,165 of total unrecognized compensation cost with a weighted-average vesting period ofapproximately 3 years. As of March 31, 2012 and 2011, the intrinsic value of outstanding and vested stock options was as follows: March 31, 2012 2011Intrinsic value - options outstanding $ 2,409,375 $ 613,619 Intrinsic value - options exercisable 2,339,063 456,014 Intrinsic value - options exercised — — Note 13 - Income taxes Net loss before provision for income taxes for the years ended March 31, 2012 and 2011 consists of the following: March 31, 2012 2011Domestic operations $ (2,624,645) $ (981,478)Foreign operations — (243,873)Net loss before income taxes $ (2,624,645) $ (1,225,351)

Provision for income taxes consists of the following components: March 31, 2012 2011Current $ 250 $ 100 Deferred — — Total $ 250 $ 100

F-17


American Sands Energy Corp.(Formerly Millstream Ventures, Inc.)

(A Development Stage Company)Notes to Consolidated Financial Statements

(Expressed in US Dollars) Temporary differences and their related deferred income tax assets and (liabilities) are as follows: March 31, 2012 2011Deferred income tax assets - current: Accrued salary $ 430,401 $ 430,401 Accrued expenses 651,464 567,539 Mineral lease payable 12,741 20,022 1,094,606 1,017,962 Deferred income taxes - long-term: Net operating loss carry forward 1,855,372 954,297 Total deferred income tax assets 2,949,978 1,972,259 Valuation allowance (2,949,978) (1,972,259)Net deferred income tax assets $ — $ —

A reconciliation of provision (benefit) for income taxes provided at the federal statutory rate (34% for fiscal years 2012 and 2011) toactual provision for income taxes is as follows: March 31, 2012 2011Benefit for income taxes computed at federal statutory rate $ 892,464 $ 416,653 State income taxes, net of federal tax benefit 78,739 36,764 Other 6,266 (88,734)Change in valuation allowance (977,719) (364,783) Provision for income taxes $ (250) $ (100)

Effective tax rate 0.03% 0.02%

As of March 31, 2012, the Company has available for federal income tax purposes net operating loss carry-forwards of approximately$5,000,000, which begin to expire in 2025, that may be used to offset future taxable income, if any. Pursuant to Section 382 of the IRScode, current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change inownership occurs. Therefore, the amount available to offset future taxable income may be limited. The Company has provided a full valuation allowance for the tax benefit of the operating loss carry-forwards and other deferredincome tax assets due to the uncertainty regarding realization. During the year ended March 31, 2012, the Company completed filing its income tax returns in the United States and in the state ofUtah from inception to date. The Company did not incur significant penalties and interest in connection with filing its returns. With the merger of GRC into ASEC in December 2011, the Company no longer has any foreign taxable income and is not required tofile any foreign income tax returns.

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Note 14 – Related-Party Transactions From inception, pursuant to the terms of the Operating Agreement (see Note 1), the Company has entered into transactions withBleeding Rock. Historically, the Company has paid Bleeding Rock a fee as required by the Operating Agreement. The ChiefExecutive Officer of the Company is also the managing executive of Bleeding Rock. Accrued fees as of March 31, 2012 and 2011were $0 and $1,521,551, respectively. Effective January 24, 2012, the Company entered into a Termination Agreement with Bleeding Rock (the “Termination Agreement”).The purpose of the agreement was to terminate the Operating Agreement dated May 31, 2005, as amended, between Bleeding Rockand GRI (the “Operating Agreement”). Pursuant to the Operating Agreement GRI had obtained the rights through Bleeding Rock toutilize a process for the development, engineering and extraction of hydrocarbons from oil sands. In light of conversations withpotential investors, the Company determined that having the technology licensed directly to the Company (rather than throughBleeding Rock and the Operating Agreement) would be beneficial to fund raising prospects. As of the date of the Termination Agreement, GRI owed $1,446,551 to Bleeding Rock, payable under the terms of the OperatingAgreement. In connection with the termination of the Operating Agreement, GRI issued a 5% convertible promissory note to BleedingRock for this amount. The note is due and payable in one year from the date of the note and is convertible into shares of theCompany’s common stock any time before maturity at the rate of one share for each $0.50 of principal or interest converted. TheCompany is not responsible for the repayment of the note issued by GRI except for issuing stock if the note is converted. As of March31, 2012, the carrying balance of the note was $1,460,023, including accrued interest of $13,472. Effective on the date of termination,Bleeding Rock assigned its interest in the note to Hidden Peak, a related party who is the majority owner of Bleeding Rock.Contemporaneous with the execution of the License Agreement and the Termination Agreement described above, the Companyentered into a Gross Royalty Agreement with Bleeding Rock whereby the Company is obligated to pay a royalty equal to 1.5% of thegross receipts from future projects using the technology, excluding the current project in Sunnyside, Utah. The Gross RoyaltyAgreement was similarly assigned to Hidden Peak. On May 31, 2011, the Company converted $214,281 of the accrued fees to Bleeding Rock into a 6% convertible promissory note.The note is convertible into 535,704 shares of the Company’s common stock. As of March 31, 2012, the carrying balance of the notewas $225,307, including accrued interest of $11,025. In 2009, the Company entered into a mineral lease with William G. Gibbs, a relative of the Chief Executive Officer of the Company,for an additional undivided 5% interest in the 640-acre tract (for a total 21.666% undivided interest in the 640-acre tract). This lease islocated in Carbon County, Utah, adjacent to the 1,120-acre tract. This lease has a 6-year life with a minimum yearly lease payment of$7,965 and is scheduled to terminate by October 2015 if the property has not reached commercial production. Note 15 – Commitments On August 1, 2007, the Company entered into an employment contract with the Chief Executive Officer (“CEO”), with a term throughDecember 31, 2013, that provides for a minimum annual salary of $400,000 plus benefits. Under the terms of the agreement, unpaidamounts are accrued until the Company receives funding of $1,000,000 or more, at which time the payment of the CEO’s salary willstart. If the accrued salary is not paid within 6 months of funding, the CEO will have the right to convert accrued and unpaid amountsinto common stock of the Company. On August 12, 2009, the term of the employment agreement was extended to December 31,2015. As of March 31, 2012 and March 31, 2011, the total accrued commitment was $1,070,207 and $1,046,884, respectively, whichis included as accrued expenses and selling, general and administrative expense in the accompanying consolidated financialstatements.

F-19





On March 31, 2011, the Company entered into an employment agreement with the Chief Operating Officer, replacing all previousemployment agreements, that provides for initial compensation at an hourly rate of $175 and expense reimbursements. Upon thecompletion of a financing by the Company of not less than $10,000,000, his compensation will increase to $300,000 annually plus allother benefits normally provided to an employee. This employment agreement is effective March 31, 2011 and terminates March 31,2014. On February 16, 2012, the Company entered into an employment agreement with the President. The agreement is terminable byeither party upon 30 days’ notice. Pursuant to the terms of the agreement, the President will be entitled to a base salary of $240,000per year upon the first successful fundraising by the Company of at least $5,000,000 in equity or convertible securities (the “FinancingEvent”). Upon completion of the Financing Event, he will also receive 5-year options to purchase 400,000 shares of the Company’scommon stock. The options will vest 50% upon the Financing Event and 50% upon the completion of a total of $40,000,000 in equityor debt financing during the term of the agreement. The options will have an exercise price equal to the price per share, or per shareequivalent, of the Financing Event. Under his employment agreement, the President is entitled to receive an annual bonus of up to

$240,000, at the discretion of the board, to be paid on or before December 15th of each year. As of March 31, 2012, the FinancingEvent had not been successfully completed. In addition, the current consulting agreement dated October 1, 2011, between the Company and C14 Strategy (the “ConsultingAgreement”), an entity controlled by the President, will remain in force until a Financing Event at which time it will be immediatelyterminated. Pursuant to the Consulting Agreement, C14 provides assistance with respect to strategic objectives of the Company. Ascompensation for such services, C14 is paid $10,000 per month. The contract is terminable any time on 60 days’ notice, or by mutualconsent. On February 16, 2012, the Company entered into an employment agreement with the Chief Financial Officer. The agreement isterminable by either party upon 30 days’ notice. Upon completion of a Financing Event, the CFO will be entitled to a base salary of$120,000 per year and will receive 5-year options to purchase 200,000 shares of the Company’s common stock. The options will vest50% upon the Financing Event and 50% upon the completion of a total of $40,000,000 in equity or debt financing during the term ofthe agreement. The options will have an exercise price equal to the price per share, or per share equivalent, of the Financing Event.Under his employment agreement, the CFO is entitled to receive an annual bonus of up to $120,000, at the discretion of the Board, to

be paid on or before December 15th of each year. Note 16 – Subsequent Events Subsequent to March 31, 2012, the Company raised an additional $523,233 of funding through the sale of 454,985 shares of theCompany’s common stock and the issuance of 113,696 warrants to purchase the Company’s common stock in connection with theCompany’s $7,000,000 private placement described in Note 10. On April 1, 2012, the Company entered into a Management and Services Agreement (the “Management Agreement”) with a principalstockholder to provide management services to the Company (the “Principal Stockholder”). The Principal Stockholder is managed byone of the Company’s directors and is owned in part by this director and by the Company’s CFO, who is also the chief financial officerof the Principal Stockholder. The term of the Agreement commenced on April 1, 2012 and is effective for 36 months, andautomatically renews for an additional 12 months on each succeeding anniversary unless terminated in writing by either party. Inexchange for the services provided by the Principal Stockholder, the Company agrees to pay a monthly fee to the PrincipalStockholder of $25,000. The monthly fee will accrue until the Company raises a minimum of $3,500,000 in an equity or debt offering(the “Offering”) and at the time of the closing of the Offering, the Principal Stockholder shall have the option, but not the obligation, toconvert all outstanding amounts accrued into the equity or debt instruments issued by the Company in the Offering.

F-20


Exhibit 10.6

MANAGEMENT AND SERVICES AGREEMENT

THIS MANAGEMENT AND SERVICES AGREEMENT (the "Agreement") is made and entered into as of the 1st day of April, 2012,by and between LIFE Power & Fuels LLC ("LIFE") and American Sands Energy Corp. (the “Company”).

A. Services to Be Performed for the Company by LIFE.

1. General Corporate Advisory Services. LIFE will provide the Company, as needed, with advice in connection with(i) structuring and implementing its overall corporate finance strategy, including market positioning with respect tofinancial markets, (ii) review and analysis of business plans, corporate materials, and investor relations materialsfor distribution to prospective investors; (iii) recruitment for Board and/or other senior positions as requested, and(iv) merger and acquisition identification, analysis and structuring. LIFE will also assist the Company on an on-going, non-exclusive basis in identifying placement agents, underwriters, lenders and other sources of financingduring the term of this Agreement, as needed.

2. Financial Advisory Services: LIFE may identify and contact, on a non-exclusive basis, certain venture capital,underwriters and investment banking companies and other strategic investors that may provide the Companywith financing or that may agree to assist the Company in equity or debt offerings. LIFE will regularly inform theCompany regarding the status of these LIFE financing contacts.

3. Merger and Acquisition Services. LIFE will assist the Company in identifying potential merger and/or acquisitioncandidates. LIFE will assist in contacting pre-approved target companies and in structuring such transactions.

4. Equipment Leasing, Lines of Credit, Equipment Financing and other Debt or Credit Facilities. LIFE may from timeto time assist the Company in securing equipment leases or other equipment financing structures.

B. Compensation

As consideration to LIFE for the services provided hereunder, the Company agrees to pay a monthly fee to LIFE of$25,000. The monthly consideration will be accrued until the Company raises a minimum of $3,500,000 in an equity ordebt offering. At the time of the closing of such offering, LIFE shall have the option, but not the obligation, to convert alloutstanding amounts hereunder into the equity or debt instruments issued by the Company in such offering.


C. Expenses

The Company agrees to reimburse LIFE for reasonable out-of-pocket expenses, including, but not limited to travelexpenses related to LIFE's performance of the services described in this Agreement (i.e. travel and lodging for LIFEprofessionals to destinations where the Company has requested or approved the presence of LIFE professionals).

The Company also agrees to reimburse LIFE for any third party consultants engaged by LIFE on behalf of the Company.These consultants shall be pre-approved by the Company in advance of their engagement.

D. Term of Agreement

The term of this Agreement shall commence on April 1, 2012 and shall be in effect for 36 months, and shall automaticallyrenew for an additional 12 months on each succeeding anniversary unless terminated in writing by either party.

E. Indemnification

LIFE and the Company agree to indemnify and hold each other harmless against claims resulting from actions oromissions in connection with this engagement or arising out of willful misstatement of material facts by the other party orits affiliates or representatives.

F. Governing Law

This Agreement shall be governed by the laws of the State of Delaware. All claims, disputes and other matters inquestion between the parties arising under this Agreement, shall be brought before U.S. federal courts residing in suchstate.

G. Signatures

By their authorized signatures below, LIFE and the Company do agree to be bound by the terms of this Agreement. ThisAgreement may be signed in counterparts, including fax signatures. Changes in the terms and conditions of thisAgreement may be enacted only with mutual written consent.

H. Acceptance or Rejection by the Company

The Company shall have the exclusive right, in its sole discretion, to accept or reject any business opportunity, creditfacility, investment or advise presented, discovered or procured by LIFE pursuant to this agreement.


I. Confidentiality

In the course of rendering the services provided for in this Agreement, LIFE will learn and may develop information whichis considered by the Company to be confidential. LIFE agrees not to use or disclose such confidential information, exceptfor the purpose of performing its duties hereunder, without the express written consent of the Company. Any informationthat the receiving party can demonstrate:

1. Is or becomes generally available to the public through no breach of this Agreement;

2. Was previously known by the receiving party without any obligations to hold it in confidence;

3. Is received from a third party which the receiving party reasonably believes, after due inquiry, is free to disclosesuch information without restriction;

4. Is independently developed by the receiving party without the use of Confidential Information of the disclosingparty; or

5. Is approved for release by written authorization of the disclosing party, but only to the extent of and subject tosuch conditions as may be imposed in such written authorization shall not be considered “confidentialinformation” under this paragraph.

J. Attorneys Fees.

In the event that either party hereunder institutes any legal proceedings in connection with its rights or obligations underthis Agreement, the prevailing party in such proceeding shall be entitled to recover from the other party, all costs incurredin connection with such proceeding, including reasonable attorneys' fees, together with interest thereon from the date ofdemand at the rate of twelve percent (12%) per annum.

IN WITNESS WHEREOF, LIFE and the Company have each caused this Agreement to be executed by their respective dulyauthorized officers, on the date and year first above written.

LIFE Power & Fuels LLC

By: /s/ Daniel F. Carlson_________Daniel F Carlson, CFO


By: /s/ William Gibbs____________William Gibbs, CEO


Exhibit 10.7

HYDROCARBON AND MINERAL LEASE

This Lease is made and entered into as of the 14th day of January, 2005, by and between the parties listed on Exhibit Ahereto, with respect to the interests described therein, as the Lessor, hereinafter referred to as "Lessor", and Bleeding Rock LLC, alimited liability company organized under the laws of the State of Utah, hereinafter referred to as "Lessee".

SECTION ONE

TERM AND PURPOSE

(a) Grant of Lease. Lessor, in consideration of the rents and royalties to be paid and the covenants and conditions to be keptand performed by Lessee as provided for in this instrument, leases to Lessee the land, hydrocarbon and mineral interests in CarbonCounty, Utah, more particularly described in Exhibit A to this Lease (the "Premises"), for the purpose of exploring for, extracting,mining, taking out, and removing by any mining or extraction method, including open-pit mining and strip-mining, the merchantabletar sand, bitumen, oil and other hydrocarbon products (collectively, "Oil Products"), together with any by-products derived in theprocess of extracting the foregoing products therefrom (including, but not limited to, sand, gravel, timber, gold, titanium, silver andother minerals) which are, or which subsequently may be found on, in, or under the land. Together with the right to: (1) make allexcavations or drilling; (2) construct on the Premises all buildings, extraction and separation facilities, openings, ditches, drains,railroads, roads, pipelines, power facilities, tanks and other improvements that are or may become suitable or necessary for themining and removal, and/or separation and extraction, of the products from the Premises; and (3) cut and use the timber on thePremises, as may be necessary for the usual purposes of the mining operations and for Lessee's own fuel; Lessee to exercisereasonable care to clear up and remove all combustible debris to prevent any fires.

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(b) Term. It is agreed that this Lease shall remain in force for a primary term of six (6) years from this date (the "primary term")

and if Lessee shall commence mining of Oil Products within the primary term or any extension of it, Lessee shall have the right tocontinue mining and the term shall extend subsequently as long as Oil Products are continuously produced in commercial quantities(Oil Products in amounts sufficient to produce 500 barrels of oil per day, on average) by Lessee from the Premises, provided,however, that production may be discontinued or interrupted if such interruption is due to the inability of the Lessee to operate themine or facilities on a commercially reasonable basis due to temperatures, weather or snow-pack during the winter months.

SECTION TWO

MINING EQUIPMENT AND IMPROVEMENTS

Lessee may install engines and machinery, build roads, pipelines and rail tracks, and do such other things on the Premises as

may be necessary or proper to carry on the mining operations. Lessee shall have the right to use, free of cost, gas, oil, and waterproduced on the land for Lessee's operation on the land. Lessee shall have the right at any time up to 180 days after the terminationof this Lease to remove all machinery and fixtures placed on the Premises. The mining of the Oil Products by Lessee shall be done ina manner as is usual and customary in mining operations of similar character. Lessee shall comply with all government regulations inits mining operations. Lessee shall not remove or impair any roads, tracts, ditches, or improvements of a permanent nature made byLessee after the termination of this Lease.

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SECTION THREE

RENT AND ROYALTY

(a) Royalties. Lessee shall pay to Lessor a Production Royalty on Net Returns from the sale of Oil Products. For purposes of

this Agreement, the term "Production Royalty on Net Returns" means an amount equal to 10% of the Market Value of Minerals soldby Lessee, less the following, to the extent and only to the extent that they are incurred by Lessee prior to sale by Lessee of the OilProducts: Operating Costs, Transportation Costs, Processing Costs, Value Added Costs and Extraction Taxes (collectively referred toherein as "Costs and Taxes") The term "Operating Costs" means expenses and costs actually incurred for the extraction of the OilProducts from the ground and mining and handling of the Oil Products, including maintenance and repairs to equipment anddepreciation, but excluding reclamation expenses. The term"Transportation Costs" means the expenses and charges actuallyincurred in transporting Oil Products, or their derivatives, from the mine to the refinery or other place of processing and/or sale. Suchcosts shall include, but not be limited to, wages, rent, freight, shipment insurance, handling, port, delay, demurrage, lighterage, tug,forwarding costs, and transportation and taxes. The term "Processing Costs" means the expenses and costs actually incurred forseparating, processing or other benefication of the Oil Products, including maintenance and repairs to equipment and depreciation.The term "Value Added Costs" means the expenses and costs actually incurred in upgrading the Oil Products for sale, including,refining, cracking, distillation, or by mixing or combining the Oil Products, or any of them, with reagents or other materials, minerals,chemicals, compounds, hydrocarbons or other substances of any kind or nature to achieve the products or goods which are then soldby Lessee, including maintenance and repairs to equipment and depreciation, The term "Extraction Taxes" means sales, use, grossreceipts, ad valorem, severance and other taxes due and payable in respect to severance, production, removal, sale or disposition ofthe Oil Products, but excluding any taxes on net income. Oil Products shall be deemed sold at the time the money is actuallyreceived by Lessee unless transferred by Lessee to an affiliate. The price received for the Oil Products sold in an "arms lengthtransaction" shall be presumed to be "Market Value" unless rebutted by a preponderance of the evidence. For purpose of thisparagraph, "arm's length transaction" means a transaction that has been arrived at in the market place between independent,nonaffiliated persons with opposing economic interests regarding that transaction.

(b) Payment of Royalties. Calculations and payments of the royalty shall be made quarterly, on the 15th day of each January,

April, July, and October in each year, commencing on the quarterly date following the first full or partial quarter in which Oil Productshave been mined and extracted and sold from the Premises. If the calculation of Net Returns from the sale of Oil Products for anycalendar quarter results in a negative number, no production royalty shall be payable with respect to that calendar quarter, but suchnegative number shall not be used to offset Net Returns from the sale of Oil Products for any future calendar quarter Payments shallbe made to each Lessor at the address or addresses set forth on the signature page hereof, or as otherwise directed by a Lessor inwriting. Lessee shall, on a quarterly basis and in conjunction with each quarterly royalty payment, transmit to Lessor an accuratestatement of the amount of Oil Products removed and sold during the quarter for which royalties are paid, and the amount of Costsand Taxes. The refinery receipts shall be prima facie evidence of the amounts so sold during each quarter. Lessor may inspect andreview the refinery receipts upon request at reasonable times. Any errors shall be corrected accordingly. Lessor shall at all times havea lien on all Oil Products mined, and on all improvements made, on the Premises as security for any unpaid balance of rents,royalties, or taxes due and payable.

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(c) Bonus and Rent. Upon execution of this Lease, Lessee shall pay to Lessor the sum of $101,472 as a bonus payment

hereunder. Thereafter, beginning January 1, 2006, and annually thereafter, as rent under this Lease, Lessee shall pay to Lessor theamount of $101,472. If the property has not reached commercial production of Oil Products (Oil Products in amounts sufficient to

produce 500 barrels of oil per day, on average) by the 5th anniversary hereof, and such delay is not due to force majeure event underthe provisions of Section 14(e) below, the advance rent shall increase to $150,528 per year, or Lessor, at such time may terminatethis Lease. Any lawsuit against development of the property shall toll any increase in the rent and any termination right on the part ofLessor, so long as Lessee is diligently pursuing the lawsuit. Rent due hereunder shall be excused for any year as to which theroyalties paid hereunder for the prior year exceed the rental amount.

(d) Apportionment of Royalties and Rents. (1) The stated amounts of royalties to be paid by Lessee hereunder are based upona 100-percent interest in and to the mineral estate as to all of the Premises. If any party comprising Lessor owns less than the interestin all of the Premises described in the preceding sentence, all royalty payments to be made by Lessee to such party hereunder shallbe reduced in the same proportion thereof as the interest of such party in the Premises bears to the interest described for such partyin the preceding sentence. (2) The stated amounts of rents to be paid by Lessee hereunder are based upon the undivided interests inthe mineral estate as to all of the Premises stated to be owned by each party comprising Lessor as set forth in Exhibit A attachedhereto. If any party comprising Lessor owns less than the interest in all of the Premises described in the preceding sentence for suchparty, all rent payments to be made by Lessee to such party hereunder shall be reduced in the same proportion thereof as theinterest of such party in the Premises bears to the interest described for such party in the preceding sentence.

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SECTION FOUR

TERM EXTENSION

If mining of Oil Products is not commenced on the land on or before the 6th anniversary of the commencement date of thisLease in commercial quantities (Oil Products in amounts sufficient to produce 500 barrels of oil per day, on average, provided,however, that production may be discontinued or interrupted if such interruption is due to the inability of the Lessee to operate themine or facilities on a commercially reasonable basis due to temperatures, weather or snow-pack during the winter months), thisLease shall terminate as to both parties, unless the failure to commence operations is excused by the force majeure provisions ofSection 14(e) below, in which case the term of this Lease shall be extended in accordance with the provisions of said Section 14(e)..

SECTION FIVE

EXPLORATION AND DEVELOPMENT COMMITMENT

Lessee agrees to expend or cause to be expended during the term of this Lease, a minimum of $150,000 per year on thedevelopment of the Premises, until commercial production of Oil Products (Oil Products in amounts sufficient to produce 500 barrelsof oil per day, on average, provided, however, that production may be discontinued or interrupted if such interruption is due to theinability of the Lessee to operate the mine or facilities on a commercially reasonable basis due to temperatures, weather or snow-packduring the winter months) is reached. For this purpose, the following expenditures would qualify: expenditures on prospecting andsearching for or production of Oil Products on, in or under the property, drilling, examining, measuring and sampling the deposit ofbitumen, when found, to gain knowledge of its size, shape, position and characteristics to determine the value thereof, research,engineering, test work, feasibility studies and other development and construction work directly benefiting the property, workperformed on mineral lands contiguous to the property, legal fees, engineering and consulting fees and salaries and other expensesrelating to Lessee's personnel directly involved in the project and all other similar activity or work performed with respect to theproperty or its development, and fees and expenditures on other projects which benefit the Sunnyside project or reduce theexpenditures which would otherwise be incurred in connection with the Sunnyside project. All expenditures for exploration anddevelopment in excess of the respective minimums required in each year shall be applied to the exploration commitment described inthe next succeeding year or years.

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SECTION SIX

PROPERTY TAXES

Lessee shall pay promptly before delinquency all property taxes and assessments, that may be levied or assessed during the

term of this Lease upon the Premises. All such taxes for the year in which this Lease terminates shall be prorated between Lessorand Lessee, except that neither Lessor nor Lessee shall be responsible for the payment of any taxes which are based uponproduction from the Premises accruing solely to the other party. Lessee shall have the right to contest, in the courts or otherwise, inits own name or in the name of Lessor, the validity or amount of any such taxes or assessments, if it deems the same unlawful,unjust, unequal or excessive, or to take such other steps or proceedings as it may deem necessary to secure a cancellation,reduction, readjustment or equalization thereof, before it shall be required to pay the same. Lessee shall not permit or suffer thePremises or any part thereof to be conveyed, or title lost to Lessor, as the result of nonpayment of such taxes or assessments.Lessee shall upon request furnish to Lessor duplicate receipts for all such taxes and assessments when paid. Lessee shall not beliable for any taxes levied on or measured by income, or other taxes applicable to Lessor, based upon payments under this Lease.Nothing in the foregoing shall be construed to obligate Lessee to pay such portion of any tax as is based upon the value ofimprovements, structures or personal property made, placed and used on any part or parts of the Premises by or for Lessor or by anowner or lessee of surface rights other than Lessee after the date hereof. If Lessor receives tax bills or claims which are theresponsibility of Lessee hereunder, the same shall be promptly forwarded to Lessee for appropriate action.

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(a) Termination by Lessor. In the event of any default by Lessee in the performance of its obligations hereunder, including all

obligations to make payments of money to Lessor, Lessor shall give to Lessee written notice specifying the default. If (a) a defaultinvolving matters other than the payment of money to Lessor is not cured within sixty (60) days after Lessee has received the notice,or if Lessee has not within the time begun action to cure the default and does not diligently prosecute such action to completion, or (b)if a default involving the payment of money to Lessor is not cured within fifteen (15) business days after Lessee has received notice ofnon payment, Lessor may terminate this Lease by delivering to Lessee written notice of such termination, subject to Lessee's right toremove its property and equipment from the Premises as hereinafter provided. Lessor shall have no right to terminate this Leaseexcept as set forth in this paragraph.

(b) Termination by Lessee. Lessee shall have the right, at any time, to terminate this Lease by giving 180 days' written notice to

Lessor, either in person or by mail addressed to Lessor at the address given in this Lease, and on payment of the rent, royalty andother sums as may be due, this Lease shall be deemed terminated. When this Lease terminates, regardless of the cause, Lesseeshall quietly and peacefully surrender possession of the Premises to Lessor or Lessor's agents, and Lessee shall enter, or cause tobe entered, a certificate of the termination of this Lease in the proper books of record in Carbon County, Utah, and record them, asmay be necessary to clear the record title and divest Lessee of all rights and title given or acquired under this Lease.

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SECTION EIGHT

MINING

(a) Mining Practices. All of Lessee's operations hereunder shall be conducted in accordance with accepted practices of themineral industry, and in compliance with all applicable local, state and federal laws and regulations. It shall rest in the sole discretionof the Lessee whether and in what manner it shall mine, remove, transport, and deliver Oil Products to a processing plant or refineryfor physical, chemical or other treatment or shall treat the same in place. Whenever Lessee deems it necessary or advisable, Lesseemay discontinue or resume exploration, development, mining and production operations from time to time during the term hereof, solong as it meets its obligations hereunder.

(b) Adjacent Property Mining Activities. Lessee is hereby granted the right, if it so desires, to mine and remove Oil Products,

and such other materials as are incident thereto, from the Premises through or by means of shafts, openings or pits which may bemade in or upon adjoining property owned or controlled by Lessee, to the extent that Lessor can grant such rights. Lessee may, if itso desires, use the Premises and any shafts, openings and pits therein for the mining, removal, treatment and transportation of OilProducts and materials from adjoining property, or for any purpose connected therewith. In addition, the operations of Lessee uponthe Premises and upon any and all other adjoining lands to which Lessee has mining rights, may be conducted as a single miningoperation, to the same extent as if all such properties constituted a single tract of land. Nothing herein shall relieve Lessee from itsobligations for payments or reports as set forth in this Lease.

(c) Stockpiling. Lessee shall have the right, at any time during the term hereof, to stockpile any Oil Products or other materialsmined or produced from the Premises at such place or places as Lessee may elect, either upon the Premises or upon any otheradjoining lands owned or controlled by Lessee, its successors and assigns. The rights and liens of Lessor in and to any such OilProducts stockpiled on such other lands shall not be divested by the removal thereof from the Premises but shall be the same in allrespects as though such materials had been stockpiled on the Premises. The stockpiling of Oil Products from the Premises on suchother lands shall not be deemed a removal or shipment thereof requiring payment in respect of Lessor's interest.

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(d) Treatment. Lessee shall have the right, but shall not be required, to process, separate, extract, beneficiate, concentrate,smelt, refine, leach and otherwise treat, in any manner, any Oil Products and other materials mined or produced from the Premisesand from other adjoining lands. Such treatment may be conducted wholly or in part at a plant or plants established or maintained onthe Premises or on such other lands. The tailings and residue from such treatment shall be deemed waste and may be deposited onthe Premises or on such other lands. Lessor shall have no right, title or interest in said tailings or residue; provided, however, that anysaid tailings or residue remaining on the Premises or on such other lands for a period of sixty (60) days after the date on which thisLease has expired, or has been terminated by Lessee as to all of the Premises, shall be deemed abandoned by Lessee andthereupon may be claimed by Lessor, if and only if Lessor so elects. Nothing contained herein shall be construed to relieve Lesseefrom its responsibility for satisfaction of all obligations with respect to environmental protection laws, mined land reclamation laws orother applicable federal, state or local laws and regulations.

(e) Overburden Deposits. Waste, overburden, surface stripping and other materials from the Premises may be deposited on oroff the Premises, to the extent Lessor can grant such right and subject to all applicable local, state and federal laws and regulations.Such materials from other adjoining lands may be deposited on the Premises only if the same will not interfere with mining or oil andgas operations on the Premises.

(e) Inspection Rights of Lessor. Lessor reserves to itself and its agents the right, at any time, to enter the Premises or any partof it, to inspect and survey the Premises, and to measure the quantity of Oil Products that may be in or on the Premises or that shallhave been mined or removed from the Premises, without unnecessarily or unreasonably hindering or interrupting the work oroperations of Lessee.

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SECTION NINE

RECORDS

Lessee shall keep books of account, in accordance with generally accepted accounting principles, consistently applied,showing the amount of Oil Products shipped and sold, and the amount of money received from the sale of the Oil Products. Thebooks of account shall be open at all reasonable times to Lessor and its representatives. Lessor or its authorized agents shall have aright to audit and inspect Lessee's accounts and records to verify the calculation of the payments to Lessor hereunder, which rightmay be exercised as to each payment at any reasonable time during a period of two (2) years from and after the date on which thepayment was made by Lessee. If no such audit is performed during such period, such accounts, records and payments shall bedeemed to be true, accurate and correct.

SECTION TEN

EFFECT OF AGREEMENT

The covenants, agreements, and conditions of this Lease shall run with the land, and shall bind the heirs, legal representatives,successors, and assigns of all parties to this Lease.

SECTION ELEVEN

PROPORTIONATE REDUCTION

Royalties and rents provided for in this Lease shall be subject to proportionate reduction in accordance with the provisions ofSection 3(d) above.

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SECTION TWELVE

DIVIDED INTERESTS

If the Premises are now or later shall be owned in severalty or in separate tracts, the Premises, nevertheless, shall bedeveloped and operated as one lease and all royalties accruing under this Lease shall be treated as an entirety and shall be dividedamong and paid to such separate owners in the proportion that the acreage owned by each separate owner bears to the entire leasedacreage. If, however, the Premises consist of two or more non-abutting tracts, this section shall apply separately to each non-abuttingtract, and if a portion of the Premises is later consolidated with other lands for the purpose of operating the consolidated tract as onelease, this section shall be inoperative as to the portion so consolidated.

SECTION THIRTEEN

WARRANTY OF TITLE

Each of the parties comprising Lessor, to the extent and only to the extent of the ownership interest set forth for that party onExhibit A attached hereto, warrants and agrees to defend the title to the lands described in this Lease against burdens and claimsarising by, through or under such party, but not otherwise. Lessor agrees that Lessee shall have the right at any time to redeem, forLessor, by payment of any mortgage, taxes, or other liens on the lands in the event of default of payment by Lessor, and besubrogated to the rights of the holder, and Lessor, on behalf of Lessor and the heirs, successors, and assigns of Lessor, surrendersand releases all rights of dower and homestead in the Premises described in this Lease, insofar as the right of dower and homesteadmay in any way affect the purposes for which this Lease is made.

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SECTION FOURTEEN

GENERAL CONDITIONS

(a) Attorneys' Fees. If Lessor or Lessee shall commence an action against the other arising out of or in connection with thisLease, the prevailing party shall be entitled to recover its costs of suit and reasonable attorneys' fees.

(b) Notices. All notices and demands, which may or are to be required or permitted to be given hereunder shall be in writing. All

notices and demands shall be sent by receipted hand delivery, by confirmed facsimile, by United States mail, postage prepaid, or byan express delivery service which maintains records of deliveries, freight prepaid, addressed to Lessor or Lessee, at the address oraddresses set forth on the signature page hereof.

(c) Indemnity. Each party shall hold harmless, reimburse, indemnify, and defend the other party from and against any and alllosses, injury, obligations, claims, damages, judgments, and injuries of any nature resulting from, arising out of or related in anyrespect to the falsity or inaccuracy of any representation or warranty made by the indemnifying party and/or obligations arising underor in connection with this, including without limitation reasonable attorneys' fees, costs, and expenses of any nature incurred as aresult of or related to such false or inaccurate representations and/or warranties.

(d) Governing Law. This Lease shall be governed by and construed in accordance with the laws of the State of Utah.

(e) Force Majeure. Lessee shall not be liable for failure to perform any of its obligations hereunder (except for payments whichhave become due to Lessor) during periods in which performance is prevented by any cause reasonably beyond Lessee's control(except for payments of money), which causes hereinafter are called "force majeure". For purposes of this Lease, the term "forcemajeure" shall include, but shall not be limited to, fires, floods, windstorms and other damage from the elements, strikes, riots, actionof governmental authority, litigation, acts of God and acts of the public enemy. The performance by Lessee of its obligationshereunder shall be suspended, and the duration of this Lease shall be extended, for a period equal to the period for whichperformance is reasonably suspended by reason of force majeure. All periods of force majeure shall be deemed to begin at the timeLessee stops performance hereunder by reason of force majeure. Lessee shall notify Lessor of the beginning and ending date ofeach such period.

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(f) Paragraph Headings. The paragraph headings as to the contents of particular paragraphs herein are inserted only for

convenience and are in no way to be construed as part of such paragraph or as a limitation on the scope of the particular paragraphto which they refer.

(g) Assignment; Change of Ownership. Lessee and Lessor may sell, convey, assign or transfer their rights and interests in thisLease in whole or in part without the prior written consent of the other party; provided that the assignor assumes all obligations of therespective party, in writing, and furnishes a copy of such assignment to the Lessee or Lessor, as the case may be. However, no suchassignment shall operate to relieve the assignor of any liability or obligation under this Lease which arose prior to such assignment. Inaddition, no change of ownership of the Premises shall be binding upon Lessee, whether Lessee has actual or constructiveknowledge of such change of ownership, until thirty (30) days after Lessee shall have been furnished by certified or registered UnitedStates mail at Lessee's office address as set out herein with a certified copy of the recorded instrument or instruments satisfactory inthe opinion of Lessee to evidence such change of ownership and to establish the right, title or interest of the claiming party and theextent thereof

(h) Benefit of Agreement; Recording. The covenants and agreements contained in the within Lease shall apply to, inure to thebenefit of and be binding upon the parties hereto and upon their respective successors in interest and legal representatives, subjectto the restrictions contained herein on assignments. If requested by Lessee or Lessor, the parties hereto shall execute amemorandum or short recording counterpart of this Lease, which counterpart shall be in a form sufficient to constitute notice of thisLease to third parties under the laws of the state in which the Premises are located, but which counterpart shall not contain theamounts or rates of payment hereunder, or other terms of this Lease which Lessee or Lessor may elect not to disclose of record. Theexecution and recording of the above recording counterpart shall not limit, decrease or increase, or in any manner affect, any of theterms of this Lease, or any rights, interests or obligations of the parties hereto.

13


(i) No Interruption of Operations. Disputes or differences between the parties hereto shall not interrupt performance of this

Lease or the continuation of operations hereunder unless a continuation of operations would cause irreparable harm to the Lessor. Inthe event of any dispute or difference, and subject to the foregoing, operations may be continued, and settlements and payments maybe made hereunder in the same manner as prior to such dispute or difference, until the matters in dispute have been finallydetermined between the parties, and thereupon such payments or restitutions shall be made as may be required under the terms ofthe settlement or final determination of the dispute.

(j) Waiver. The failure of a party to insist upon strict performance of any of the terms, covenants, conditions or agreementscontained herein shall not be deemed a waiver of any rights or remedies that said party may have, and shall not be deemed a waiverof any subsequent breach or default in the performance of any of the terms, covenants, conditions or agreements contained herein.

IN WITNESS WHEREOF, this Lease has been executed and delivered by the undersigned as of the date first above written.

14


State of Colorado County of _______

On this 14th day of January, 2005, personally appeared before me E. Michael Meany, President of Meany Land & Exploration,Inc., a Colorado corporation, who by me did duly swear that he is the president of the above named corporation and that saidinstrument was signed on behalf of said corporation pursuant to a resolution of its Board of Directors, and acknowledged to me thatsaid corporation executed the same.

/s/ Richard Johnson, Jr. Notary Public

15


State of Colorado County of Salt Lake

On this 22nd day of February, 2005, personally appeared before me William C. Gibbs, Manager of Bleeding Rock LLC, who byme did duly swear that he is the manager of the above named limited liability company and that said instrument was signed on behalfof said corporation pursuant to a resolution of its Board of Directors, and acknowledged to me that said corporation executed thesame.

/s/ Michael Thaller Notary Public

16


EXHIBIT A

Legal Description and Ownership Interests

LAND DESCRIPTION: Township 14 South, Range 14 East, SLM Section 2: All.Section 3: E/2, NW/4 Containing 1120.00 acres, more or less OWNERSHIP INTERESTS: Meany Land Development - undivided 20-percent ownership of mineral estate; no ownership of surface estate.

17


NOTICE OF ASSIGNMENT

This is to give notice of the assignment by Bleeding Rock LLC to GreenRiver Resources, Inc of a Lease Agreement ("Lease")dated as of January 14, 2005, by and between Meany Land & Exploration, Inc. and Bleeding Rock LLC, a Utah company. The realproperty involved is as follows: Township 14 South, Range 14 East. SLMSection 2: All.Section 3: E/2, NW/4.Containing 1120.00 acres, more or less Bleeding Rock LLC By: /s/ William C. GibbsWilliam C. Gibbs Manager/CEO State of Colorado County of Salt Lake

The foregoing instrument was acknowledged before me this 8th day of November, 2005 by William C. Gibbs, known to me tobe the person described in and who executed the within and foregoing instrument and acknowledged to me that he executed thesame on behalf of Bleeding Rock L.L.C.

/s/ Whitmey Boyer Notary Public

18


ADDENDUM TO HYDROCARBON AND MINERAL LEASE

This Addendum to Lease is made and entered into as of the 16th day of January, 2009, by and between Meany Land &Exploration, Inc, hereinafter referred to as "Lessor", and GreenRiver Resources, Inc., a Utah corporation, hereinafter referred to as"Lessee".

Recitals

Whereas, Lessor entered into a Hydrocarbon and Mineral Lease, dated January 14, 2005, with BleedingRock LLC, as 'lessee(the "Lease") and

Whereas, BleedingRock LLC assigned all of its rights and obligations under such Lease to Lessee.; and

Whereas, Lessor and Lessee desire to extend the payment date for rental payments due December 31, 2008 and extend theprimary term. of the Lease to December 31, 2013. Agreement

1. The Rent due under Section 3 (c) on January 1, 2009 will be due and payable on February 15, 2009. Rental Payment shallbe the increased as stated in paragraph 14(e) for each year beginning February 15, 2009 and each year thereafter.

2. The "primary term" under Section 1 (b) shall be extended until December 31,

2013.

3. All other terms and conditions shall remain the

same.

4. "Hydrocarbon and Mineral Interest" as defined in our January 14th, 2005 Hydrocarbon and Mineral Lease shall not be

deemed to include, and shall specifically exclude, conventional Oil. and Gas.

IN WITNESS WHEREOF, this Addendum to Lease has been executed and delivered by the undersigned as of the date first

above written.

19


ADDENDUM #2 TO HYDROCARBON AND MINERAL LEASE

This Addendum to Lease is made and entered into as of the 16th day of April, 2009, by and between Meany Land &

Exploration, Inc., hereinafter referred to as "Lessor", and GreenRiver Resources, Inc., a Utah corporation, hereinafter referred to as"Lessee".

Whereas, Lessor entered into a Hydrocarbon and Mineral Lease, dated January 14, 2005, with BleedingRock LLC, as lessee(the "Lease, and

Whereas, BleedingRock LLC assigned all of its rights and obligations under such Lease to Lessee; and

Whereas, Lessor and Lessee previously extended the payment date for rental payments due December 31, 2000 and extendedthe primary term of the Lease to December 31, 2013, pursuant to an Addendum to Lease dated January 16, 2009; and

Whereas, Lessor and Lessee desire to extend the payment date for rental payments due December 31, 2008 as set forthbelow.

Agreement

1. The Rent due under Section 3 (c) on January 1, 2009 will be paid asfollows:

a. $25,000 on April 16,

2009.

b. $24,930.70 on June 30,2009,


same.

IN WITNESS WHEREOF, this Addendum to Lease has been executed and delivered by the undersigned as of the date firstabove written.

20


21


ADDENDUM #3 HYDROCARBON AND MINERAL LEASE

This Third Addendum to Lease is made and entered into as of the 15th day of December, 2009, by and between Meany Land &Exploration, Inc., hereinafter referred to as “Lessor”, and GreenRiver Resources, Inc., a Utah corporation, hereinafter referred to as“Lessee”.

Recitals

Whereas, Lessor entered into a Hydrocarbon and Mineral Lease, dated January 14, 2005, with BleedingRock LLC, as lessee(the “Lease”) and

Whereas BleedingRock LLC assigned all of its rights and obligations under such Lease to Lessee,; and

Whereas Lessor and Lessee desire to extend the payment date for rental payments due December 31, 2009.

Agreement

1. The Rent due under Section 3(c) on January 1, 2010 will be due and payable as follows: 1/3 on January 1, 2010, 1/3 onFebruary 28, 2010 and 1/3 on March 31, 2010.


same.

IN WITNESS WHEREOF, this Addendum to to Lease has been executed and delivered by the undersigned as of the date first

above written.

22



This Fourth Addendum to Lease is made and entered into as of the 1st day of January, 2011, by and between Meany Land &

Exploration, Inc., hereinafter referred to as “Lessor”, and GreenRiver Resources, Inc., a Utah corporation, hereinafter referred to as“Lessee”.

Recitals

Whereas, Lessor entered into a Hydrocarbon and Mineral Lease, dated January 14, 2005, with BleedingRock LLC, as lessee(the “Lease”) and

Whereas BleedingRock LLC assigned all of its rights and obligations under such Lease to Lessee,; and

Whereas Lessor and Lessee desire to extend the payment date for rental payments due December 31, 2009.

Agreement

1. The Rent due under Section 3(c) on January 1, 2011 will be due and payable as follows: 1/3 on March 1, 2011, 1/3 on May31, 2011 and 1/3 on July 31, 2011.


same.


above written.

23



This Fifth Addendum to Lease is made and entered into as of the 15th day of January, 2012, by and between Meany Land &Exploration, Inc., hereinafter referred to as “Lessor”, and GreenRiver Resources, Inc., a Utah corporation, hereinafter referred to as“Lessee”.

Recitals

Whereas, Lessor entered into two separate Hydrocarbon and Mineral Leases, each dated January 14, 2005, with

BleedingRock LLC, as lessee (collectively, the “Leases”) and

Whereas, BleedingRock LLC assigned all of its rights and obligations under such Leases to Lessee; and

Whereas, Lessor and Lessee desire to amend the Leases as follows.

Agreement

1. The following paragraphs will be added to Section Three of each of theLeases:

(e) Pooling/Unitization of Interests. Lessee, at its option, is hereby given the right and power to voluntarily

pool, unitize or combine the acreage covered by this Lease, or any portion thereof, as to Oil Products (a “PooledUnit”), together with any by-products derived in the process of extracting Oil Products, including, but not limited to,sand, gravel, timber, gold, titanium, silver and other minerals (“Byproducts”), or separately for the production ofeither, when in Lessee’s judgment it is necessary or advisable to do so, and irrespecitve of whether authoritysimilar to this exists with respect to other land or leases in the immediate vicinity thereof. The pooling orunitization in one or more instances shall not exhaust the rights of Lessee hereunder to pool this Lease,orportions thereof, into other units. Lessee shall file for record in the county records of the county in which the landsare located an instrument idenifying and describing the pooled acreage. Lessee may at its election exercise itspooling operation after commencing operations, but is not required to include land or leases upon which a mine iscapable of producing Oil Products. Lessee shall not include acreage in a Pooled Unit if the Oil Products containedtherein are not capable of commercial production.

Production of Oil Products from any part of a Pooled Unit shall be considered as operations for production

of Oil Products from the land covered by this Lease, whether or not actually located on the premises covered bythis Lease.

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If this Lease is pooled or unitized with other land or leases, Royalties hereunder shall be computed on the

basis of Net Returns as set forth in 3(a) above, for the entire pooled Unit, and allocated to the land covered by thisLease and included in the Pooled Unit just as though such production were from such land, with Lessor receivinga proportionate Royal share based on the amount of Oil Products reasonably believed to be contained onLessor’s Lease in relation to the Oil Products contained in the entire Pooled Unit. By way of example, if Lessor’sportion of the estimated reserves on the leased Premises are 60 million barrels, and the estimated reserves onthe entire Pooled Unit are 100 million barrels, Lessor’s royalty would be reduced to 3/5 of the Royalty otherwisepayable hereunder, but would be payable on the reserves contained in the entire Pooled Unit. For purposes ofcomputing the Oil Products contained on this Lease and any Pooled Unit hereunder, Lessee an Lessor agree thata reserves estimate or resource report prepared by a recognized geology or engineering firm, selected by Lesseeshall be determinant. As of the date of this Agreement, Lessor hereby accepts the Resource Estimate preparedby Marston & Marston with respect to the Oil Products contained on the Lease.

(f) Royalty on By-Products. The royalty on Byproducts as defined above shall be two (2) percent of market

value on all other minerals. Royalty on Byproducts shall be calculated and paid in the same manner as providedfor Net Returns Royalties.

2. The “primary term” under Section 1(b) of the Leases shall be extended until December 31,

2014.

3. Section 3(a) is hereby amended to clarify that costs of salaries for the executives of Lessee shall not be included in

“Operating Costs.”

4. Rentals payable under Section 3 shall be increased by 20% beginning

2014.


same.


above written.

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LEASE AFFIRMATION

This Affirmation of Leases is made and entered into as of the 8th day of June, 2011, by Meany Land & Exploration, Inc.,

hereinafter referred to as "Lessor", to GreenRiver Resources, Inc., a Utah corporation, hereinafter referred to as "Lessee".

Recitals

Whereas, Lessor entered into two Hydrocarbon and Mineral Leases, each dated January 14, 2005, with BleedingRock LLC, aslessee (the "Leases"), with respect to approximately 1120 acres and 640 acres, respectively, located in Carbon County, Utah; and

Whereas, BleedingRock LLC assigned all of its rights and obligations under such Leases to Lessee; and

Whereas, the Leases have been amended by certain addendums, dated January 6, 2009, April 16, 2009, December 15, 2009,January I, 2011

Affirmation Lessor hereby represents and affirms that

1. The Leases are in full force and effect, as amended byAddendums.

2. The Addendums were intended to apply to and amend each of the Leases.

3. No event of default exists, or, to the knowledge of Lessor, any event which with the giving of notice, would he an event ofdefault.

4. Leasee is entitled to the benefits under the Leases.

IN WITNESS WHEREOF, this Affirmation has been executed and delivered by the undersigned as of the date first abovewritten.


Exhibit 10.8


This Lease is made and entered into as of the 23rd day of February, 2005, by and between the parties listed onExhibit A hereto, with respect to the interests described therein, as the Lessor, hereinafter referred to as “Lessor,A” andBleeding Rock LLC., a limited liability company organized under the laws of the State of Utah, hereinafter referred to as“Lessee.”

SECTION ONE

TERM AND PURPOSE

(a) Grant of Lease. Lessor, in consideration of the rents and royalties to be paid and the covenants and conditions

to be kept and performed by Lessee as provided for in this instrument, leases to Lessee the land, hydcrocarbon andmineral interests in Carbon County, Utah, more particularly described as Exhibit A to this Lease (the “Premises”), for thepurpose of exploring for, extracting, mining, taking out, and removing by any mining or extraction method, including open-pit mining and strip-mining, the merchantable tar sand, bituman, oil and other hydrocarbon products (collectively, “OilProducts”), together with any by-products derived in the process of extracting the foregoing products therefrom (including,but not limited to, sand, gravel, gold, titanium, silver and other minerals) which are, or to which subsequently may be foundon,in, or under the land. Together with the right to: (1) make all excavations or drilling necessary for the purposes granted;(2) construct on the Premises all buildings, extraction and separation facilities, openings, ditches, drains, railroads, roads,pipelines, power facilities, tanks and other improvements that are or may become suitable or necessary for the mining andremoval, and/or separation and extraction, of the products from the Premises; (3) cut and use the timber on the Premises,as may be necessary for the usual purposes of the mining operations and for Lessee’s own fuel; and (4) ingress andegress and to use to much of the surface as is reasonably necessary to enjoy the estate granted. Lessee is to exercisereasonable care to clean up and remove all combustible debris to prevent any fires.

(b) Term. It is agreed that this Lease shall remain in force for a primary term of six (6) years from this date (the

"primary term") and if Lessee shall commence mining of Oil Products within the primary term or any extension of it, Lesseeshall have the right to continue mining and the term shall extend subsequently as long as Oil Products are continuouslyproduced in commercial quantities (Oil Products in amounts sufficient to produce 500 barrels of oil per day, on average) byLessee from the Premises, provided, however, that production may be discontinued or interrupted if such interruption isdue to the inability of the Lessee to operate the mine or facilities on a commercially reasonable basis due to temperatures,weather or snow-pack during the winter months.

SECTION TWO


Lessee may install engines and machinery, build roads, pipelines and rail tracks, and do such other things on the

Premises as may be necessary or proper to carry on the mining operations. Lessee shall have the right to use, free of cost,gas, oil, and water produced on the land for Lessee's operation on the land. Lessee shall have the right at any time up to180 days after the termination of this Lease to remove all machinery and fixtures placed on the Premises. The mining ofthe Oil Products by Lessee shall be done in a manner as is usual and customary in mining operations of similar character.Lessee shall comply with all government regulations in its mining operations. Lessee shall not remove or impair any roads,tracts, ditches, or improvements of a permanent nature made by Lessee after the termination of this Lease.

1


SECTION THREE

RENT AND ROYALTY

(a) Royalties. Lessee shall pay to Lessor a Production Royalty on Net Returns from the sale of Oil Products. Forpurposes of this Agreement, the term "Production Royalty on Net Returns" ("Net Returns Royalty") means an amount equalto 10% of the Market Value of Minerals sold by Lessee, less the following, to the extent and only to the extent that they areincurred by Lessee prior to sale by Lessee of the Oil Products: Operating Costs, Transportation Costs, Processing Costs,Value Added Costs and Extraction Taxes (collectively referred to herein as "Costs and Taxes"). The term "Operating Costs"means expenses and costs actually incurred in a calendar quarter (or royalty payment period as defined in Section 3(b)hereto) for the extraction of the Oil Products from the ground and mining and handling of the Oil Products, includingmaintenance and repairs to equipment and depreciation, but excluding all costs of acquisition, exploration, permitting, mineopening, other costs incident to placing the mine in operating condition, and reclamation. The term "Transportation Costs"means the expenses and charges actually incurred in transporting Oil Products, or their derivatives, from the mine to therefinery or other place of processing and/or sale, within a maximum radius from the mine to the Sinclair refinery at Sinclair,Wyoming, or to refineries in Salt Lake City, Utah, whichever is the greater radius. Such costs shall include, but not belimited to, wages, rent, freight, shipment insurance, handling, port, delay, demurrage, lighterage, tug, forwarding costs, andtransportation and taxes. The term "Processing Costs" means the expenses and costs actually incurred for separating,processing or other benefication of the Oil Products, including maintenance and repairs to equipment and depreciation. Theterm "Value Added Costs" means the expenses and costs actually incurred in upgrading the Oil Products for sale,including, refining, cracking, distillation, or by mixing or combining the Oil Products, or any of them, with reagents or othermaterials, minerals, chemicals, compounds, hydrocarbons or other substances of any kind or nature to achieve the productsor goods which are then sold by Lessee, including maintenance and repairs to equipment and depreciation. The term"Extraction Taxes" means sales, use, gross receipts, ad valorem, severance and other taxes due and payable in respect toseverance, production, removal, sale or disposition of the Oil Products, but excluding any taxes on net income. Oil Productsshall be deemed sold at the time the money is actually received by Lessee unless transferred by Lessee to an affiliate. Theprice received for the Oil Products sold in an "arms length transaction" shall be presumed to be "Market Value" unlessrebutted by a preponderance of the evidence. For purpose of this paragraph, "arm's length transaction" means atransaction that has been arrived at in the market place between independent, nonaffiliated persons with opposingeconomic interests regarding that transaction.

2


(b ) Royalty Guarantee on Commercial Production. At such time as the mine has produced Oil Products incommercial quantities during any portion of three consecutive calendar years, Lessee shall be entitled to, and Lesseeherewith guarantees, a royalty during the third year of commercial production equal to the greater of the Net ReturnsRoyalty provided in Section 3(a) hereto and one million dollars ($1,000,000.00) ("Guaranteed Royalty"). Said GuaranteedRoyalty shall continue for each succeeding lease year thereafter.

(c) Payment of Royalties. Calculations and payments of the Net Returns Royalty shall be made quarterly, on the

15th day of each January, April, July, and October in each year, commencing on the quarterly date following the first full orpartial quarter in which Oil Products have been mined and extracted and sold from the Premises. If the calculation of NetReturns from the sale of Oil Products for any calendar quarter results in a negative number, no production royalty shall bepayable with respect to that calendar quarter, but such negative number shall not be used to offset Net Returns from thesale of Oil Products for any future calendar quarter Payments shall be made to each Lessor at the address or addressesset forth on the signature page hereof, or as otherwise directed by a Lessor in writing. Lessee shall, on a quarterly basisand in conjunction with each quarterly Net Returns Royalty payment, transmit to Lessor an accurate statement of theamount of Oil Products removed and sold during the quarter for which royalties are paid, and the amount of Costs andTaxes. The refinery receipts shall be prima facie evidence of the amounts so sold during each quarter. Lessor may inspectand review the refinery receipts upon request at reasonable times. Any errors shall be corrected accordingly. Lessor shallat all times have a lien on all Oil Products mined, and on all improvements made, on the Premises as security for anyunpaid balance of rents, royalties, or taxes due and payable.

Calculation and payment of the Guaranteed Royalty shall be made at the end of third year in which commercial

production is achieved, at which time Lessee shall reconcile the difference, if any, between the $1,000,000.00 guaranteeand the Net Returns Royalty actually paid during the year and shall tender the Guaranteed Royalty to Lessor on thequarterly payment date for Net Returns next following the end-of-year reconciliation. Notwithstanding any provision in thisLease to the contrary, the Guaranteed Royalty due Lessor shall not be proportionately reduced either to the interest in anyproduction unit to which the Lease is pooled or unitized or to Lessor's interest in the lands hereunder leased.

3


(d) Bonus and Rent. Upon execution of this Lease, Lessee shall pay to Lessor the sum of $101,472 as a bonus

payment hereunder. Thereafter, beginning January 1, 2006, and annually thereafter, as rent under this Lease, Lessee shallpay to Lessor the amount of $101,472. If the property has not reached commercial production of Oil Products (Oil Productsin amounts sufficient to produce 500 barrels of oil per day, on average) by the 5th anniversary hereof, and such delay is notdue to a force majeure event under the provisions of Section 14(e) below, the advance rent shall increase to $150,528 peryear, or Lessor, at such time may terminate this Lease. Any lawsuit against development of the property shall toll anyincrease in the rent and any termination right on the part of Lessor, so long as Lessee is diligently pursuing the lawsuit.Rent due hereunder shall be excused for any year as to which the royalties paid hereunder for the prior year exceed therental amount. In the event that Oil Products are exhausted from the Premises or that production ceases to be commercialas herein defined and operations are still being conducted on the Premises in support of mining by Lessee on adjacentlands, annual rentals shall resume at the rate set forth herein at the rate of $150,578.00 regardless of whether the Lease isin its primary or extended terms. In such an event, rentals shall be prorated for the year production ceases.

(d) Apportionment of Royalties and Rents. (1) The stated amounts of royalties to be paid by Lessee hereunder arebased upon a 100-percent interest in and to the mineral estate as to all of the Premises. If any party comprising Lessorowns less than the interest in all of the Premises described in the preceding sentence, all royalty payments to be made byLessee to such party hereunder, excepting only the Guaranteed Royalty provided in Section 3(b) above, shall be reducedin the same proportion thereof as the interest of such party in the Premises bears to the interest described for such party inthe preceding sentence. (2) The stated amounts of rents to be paid by Lessee hereunder are based upon the undividedinterests in the mineral estate as to all of the Premises stated to be owned by each party comprising Lessor as set forth inExhibit A attached hereto. If any party comprising Lessor owns less than the interest in all of the Premises described in thepreceding sentence for such party, all rent payments to be made by Lessee to such party hereunder shall be reduced in thesame proportion thereof as the interest of such party in the Premises bears to the interest described for such party in thepreceding sentence

4


(e) Royalty on By-Products. The royalty on by-products as defined above shall be two (2) percent of market valueon all other minerals. Royalty on by products shall be paid in the same manner as provided for Net Returns Royalties.

SECTION FOUR

TERM EXTENSION

If mining of Oil Products is not commenced on the lands on or before the 6 th anniversary of the commencementdate of this Lease in commercial quantities (Oil Products in amounts sufficient to produce 500 barrels of oil per day, onaverage), this Lease shall terminate as to both parties, unless (a) otherwise agreed by Lessor in writing or (b) prior to thescheduled Lease termination date, commencement or interruption of production results from Lessee's inability to operatethe mine due to temperature, inclement weather, or snow pack; or the failure to commence operations is excused by theforce majeure provisions of Section 14(e) below, in which case the term of this Lease shall be extended in accordance withthe provisions of said Section 14(e)

SECTION FIVE


Lessee agrees to expend or cause to be expended during the term of this Lease, a minimum of $150,000 per yearon the development of the Premises, until commercial production of Oil Products (Oil Products in amounts sufficient toproduce 500 barrels of oil per day, on average, provided, however, that production may be discontinued or interrupted ifsuch interruption is due to the inability of the Lessee to operate the mine or facilities on a commercially reasonable basisdue to temperatures, weather or snow-pack during the winter months) is reached. For this purpose, the followingexpenditures would qualify: expenditures on prospecting and searching for or production of Oil Products on, in or under theproperty, drilling, examining, measuring and sampling the deposit of bitumen, when found, to gain knowledge of its size,shape, position and characteristics to determine the value thereof, research, engineering, test work, feasibility studies andother development and construction work directly benefiting the property, work performed on mineral lands contiguous tothe property if it directly benefits the property, legal fees associated with permitting, opening, or operating the mine,engineering and consulting fees and salaries and other expenses relating to Lessee's personnel directly involved in theproject and all other similar activity or work performed with respect to the property or its development, and fees andexpenditures on other projects which benefit the Sunnyside project or reduce the expenditures which would otherwise beincurred in connection with the Sunnyside project. All expenditures for exploration and development in excess of therespective minimums required in each year shall be applied to the exploration commitment described in the nextsucceeding year or years.

5


SECTION SIX

PROPERTY TAXES

Lessee shall pay promptly before delinquency all property taxes and assessments, that may be levied or assessed

during the term of this Lease upon the Premises. All such taxes for the year in which this Lease terminates shall beprorated between Lessor and Lessee, except that neither Lessor nor Lessee shall be responsible for the payment of anytaxes which are based upon production from the Premises accruing solely to the other party. Lessee shall have the right tocontest, in the courts or otherwise, in its own name or in the name of Lessor, the validity or amount of any such taxes orassessments, if it deems the same unlawful, unjust, unequal or excessive, or to take such other steps or proceedings as itmay deem necessary to secure a cancellation, reduction, readjustment or equalization thereof, before it shall be required topay the same. Lessee shall not permit or suffer the Premises or any part thereof to be conveyed, or title lost to Lessor, asthe result of nonpayment of such taxes or assessments. Lessee shall upon request furnish to Lessor duplicate receipts forall such taxes and assessments when paid. Lessee shall not be liable for any taxes levied on or measured by income, orother taxes applicable to Lessor, based upon payments under this Lease. Nothing in the foregoing shall be construed toobligate Lessee to pay such portion of any tax as is based upon the value of improvements, structures or personal propertymade, placed and used on any part or parts of the Premises by or for Lessor or by an owner or lessee of surface rightsother than Lessee after the date hereof. If Lessor receives tax bills or claims which are the responsibility of Lesseehereunder, the same shall be promptly forwarded to Lessee for appropriate action.

6


SECTION SEVEN

TERMINATION

(a) Automatic Termination. This lease shall terminate automatically for Lessee's failure to achieve commercialproduction pursuant to Section Four of this Lease.

(b) Termination by Lessor. In the event of any default by Lessee in the performance of its obligations hereunder,including all obligations to make payments of money to Lessor, Lessor shall give to Lessee written notice specifying thedefault. If (a) a default involving matters other than the payment of money to Lessor is not cured within sixty (60) days afterLessee has received the notice, or if Lessee has not within the time begun action to cure the default and does not diligentlyprosecute such action to completion, or (b) if a default involving the payment of money to Lessor is not cured within fifteen(15) business days after Lessee has received notice of non payment, Lessor may terminate this Lease by delivering toLessee written notice of such termination, subject to Lessee's right to remove its property and equipment from the Premisesas hereinafter provided.

(c) Termination by Lessee. Lessee shall have the right, at any time, to terminate this Lease by giving 180 days'written notice to Lessor, either in person or by mail addressed to Lessor at the address given in this Lease, and on paymentof the rent, royalty and other sums as may be due, this Lease shall be deemed terminated. When this Lease terminates,regardless of the cause, Lessee shall quietly and peacefully surrender possession of the Premises to Lessor or Lessor'sagents, and Lessee shall enter, or cause to be entered, a certificate of the termination of this Lease in the proper books ofrecord in Carbon County, Utah, and record them, as may be necessary to clear the record title and divest Lessee of allrights and title given or acquired under this Lease.

7


SECTION EIGHT

MINING

(a ) Mining Practices. All of Lessee's operations hereunder shall be conducted in accordance with acceptedpractices of the mineral industry, and in compliance with all applicable local, state and federal laws and regulations. It shallrest in the sole discretion of the Lessee whether and in what manner it shall mine, remove, transport, and deliver OilProducts to a processing plant or refinery for physical, chemical or other treatment or shall treat the same in place.Whenever Lessee deems it necessary or advisable, Lessee may discontinue or resume exploration, development, miningand production operations from time to time during the term hereof, so long as it meets its obligations hereunder.

(b) Adjacent Property Mining Activities. Lessee is hereby granted the right, if it so desires, to mine and remove OilProducts, and such other materials as are incident thereto, from the Premises through or by means of shafts, openings orpits which may be made in or upon adjoining property owned or controlled by Lessee, to the extent that Lessor can grantsuch rights. Lessee may, if it so desires, use the Premises and any shafts, openings and pits therein for the mining,removal, treatment and transportation of Oil Products and materials from adjoining property, or for any purpose connectedtherewith, so long as minerals are actually being recovered from the Premises or if minerals on the Premises areexhausted or cannot be produced in commercial quantities as defined herein, so long as rental obligations hereunder areresumed. In addition, the operations of Lessee upon the Premises and upon any and all other adjoining lands to whichLessee has mining rights, may be conducted as a single mining operation, to the same extent as if all such propertiesconstituted a single tract of land. Nothing herein shall relieve Lessee from its obligations for payments or reports as setforth in this Lease.

(c) Stockpiling. Lessee shall have the right, at any time during the term hereof, to stockpile any Oil Products orother materials mined or produced from the Premises at such place or places as Lessee may elect, either upon thePremises or upon any other adjoining lands owned or controlled by Lessee, its successors and assigns. The rights andliens of Lessor in and to any such Oil Products stockpiled on such other lands shall not be divested by the removal thereoffrom the Premises but shall be the same in all respects as though such materials had been stockpiled on the Premises.The stockpiling of OilProducts from the Premises on such other lands shall not be deemed a removal or shipment thereofrequiring payment in respect of Lessor's interest.

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(d) Treatment. Lessee shall have the right, but shall not be required, to process, separate, extract, beneficiate,

concentrate, smelt, refine. leach and otherwise treat, in any manner, any Oil Products and other materials mined orproduced from the Premises and from other adjoining lands. Such treatment may be conducted wholly or in part at a plantor plants established or maintained on the Premises or on such other lands. The tailings and residue from such treatmentshall be deemed waste and may be deposited on the Premises or on such other lands. Lessor shall have no right, title orinterest in said tailings or residue; provided, however, that any said tailings or residue remaining on the Premises or onsuch other lands for a period of sixty (60) days after the date on which this Lease has expired, or has been terminated byLessee as to all of the Premises, shall be deemed abandoned by Lessee and thereupon may be claimed by Lessor, if andonly if Lessor so elects. Nothing contained herein shall be construed to relieve Lessee from its responsibility for satisfactionof all obligations with respect to environmental protection laws, mined land reclamation laws or other applicable federal,state or local laws and regulations.

(e) Overburden Deposits. Waste, overburden, surface stripping and other materials from the Premises may bedeposited on or off the Premises, to the extent Lessor can grant such right and subject to all applicable local, state andfederal laws and regulations. Such materials from other adjoining lands may be deposited on the Premises only if the samewill not interfere with mining or oil and gas operations on the Premises.

(e) Inspection Rights of Lessor. Lessor reserves to itself and its agents the right, at any time, to enter the Premisesor any part of it, to inspect and survey the Premises, and to measure the quantity of Oil Products that may be in or on thePremises or that shall have been mined or removed from the Premises, without unnecessarily or unreasonably hindering orinterrupting the work or operations of Lessee.

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SECTION NINE

RECORDS

Lessee shall keep books of account, in accordance with generally accepted accounting principles, consistently

applied, showing the amount of Oil Products shipped and sold, and the amount of money received from the sale of the OilProducts. The books of account shall be open at all reasonable times to Lessor and its representatives. Lessor or itsauthorized agents shall have a right to audit and inspect Lessee's accounts and records to verify the calculation of thepayments to Lessor hereunder, which right may be exercised as to each payment at any reasonable time during a period oftwo (2) years from and after the date on which the payment was made by Lessee. If no such audit is performed during suchperiod, such accounts, records and payments shall be deemed to be true, accurate and correct.

SECTION TEN

EFFECT OF AGREEMENT

The covenants, agreements, and conditions of this Lease shall run with the land, and shall bind the heirs, legalrepresentatives, successors, and assigns of all parties to this Lease.

SECTION ELEVEN


Royalties and rents provided for in this Lease shall be subject to proportionate reduction in accordance with theprovisions of Section 3(d) above, except as to the Guaranteed Royalty that shall not be proportionately reduced.

SECTION TWELVE

DIVIDED INTERESTS

If the Premises are now or later shall be owned in severalty or in separate tracts, the Premises, nevertheless, shallbe developed and operated as one lease and all royalties accruing under this Lease shall be treated as an entirety andshall be divided among and paid to such separate owners in the proportion that the acreage owned by each separateowner bears to the entire leased acreage. If, however, the Premises consist of two or more non-abutting tracts, this sectionshall apply separately to each non-abutting tract, and if a portion of the Premises is later consolidated with other lands forthe purpose of operating the consolidated tract as one lease, this section shall be inoperative as to the portion soconsolidated.

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SECTION THIRTEEN

WARRANTY OF TITLE

Each of the parties comprising Lessor, to the extent and only to the extent of the ownership interest set forth for

that party on Exhibit A attached hereto, warrants and agrees to defend the title to the lands described in this Lease againstburdens and claims arising by, through or under such party, but not otherwise. Lessor agrees that Lessee shall have theright at any time to redeem, for Lessor, by payment of any mortgage, taxes, or other liens on the lands in the event ofdefault of payment by Lessor, and be subrogated to the rights of the holder, and Lessor, on behalf of Lessor and the heirs,successors, and assigns of Lessor, surrenders and releases all rights of dower and homestead in the Premises describedin this Lease, insofar as the right of dower and homestead may in any way affect the purposes for which this Lease ismade.

SECTION FOURTEEN

GENERAL CONDITIONS

(a) Attorneys' Fees. If Lessor or Lessee shall commence an action against the other arising out of or in connectionwith this Lease, the prevailing party shall be entitled to recover its costs of suit and reasonable attorneys' fees.

(b) Notices. All notices and demands, which may or are to be required or permitted to be given hereunder shall be

in writing. All notices and demands shall be sent by receipted hand delivery, by confirmed facsimile, by United States mail,postage prepaid, or by an express delivery service which maintains records of deliveries, freight prepaid, addressed toLessor or Lessee, at the address or addresses set forth on the signature page hereof.

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(c) Indemnity. Each party shall hold harmless, reimburse, indemnify, and defend the other party from and against

any and all losses, injury, obligations, claims, damages, judgments, and injuries of any nature resulting from, arising out of,or related in any respect to the falsity or inaccuracy of any representation or warranty made by the indemnifying partyand/or obligations arising under or in connection with this, including without limitation reasonable attorneys' fees, costs,and expenses of any nature incurred as a result of or related to such false or inaccurate representations and/or warranties.

(d) Governing Law. This Lease shall be governed by and construed in accordance with the laws of the State ofUtah.

(e) Force Majeure. Lessee shall not be liable for failure to perform any of its obligations hereunder (except forpayments which have become due to Lessor) during periods in which performance is prevented by any cause reasonablybeyond Lessee's control (except for payments of money), which causes hereinafter are called "force majeure". Forpurposes of this Lease, the term "force majeure" shall include, but shall not be limited to, fires, floods, windstorms and otherdamage from the elements, strikes, riots, action of governmental authority, litigation, acts of God and acts of the publicenemy. The performance by Lessee of its obligations hereunder shall be suspended, and the duration of this Lease shallbe extended, for a period equal to the period for which performance is reasonably suspended by reason of force majeure.All periods of force majeure shall be deemed to begin at the time Lessee stops performance hereunder by reason of forcemajeure. Lessee shall notify Lessor of the beginning and ending date of each such period.

(f) Paragraph Headings. The paragraph headings as to the contents of particular paragraphs herein are insertedonly for convenience and are in no way to be construed as part of such paragraph or as a limitation on the scope of theparticular paragraph to which they refer.

(g) Assignment; Change of Ownership. Lessee and Lessor may sell, convey, assign or transfer their rights andinterests in this Lease in whole or in part without the prior written consent of the other party; provided that the assignorassumes all obligations of the respective party, in writing, and furnishes a copy of such assignment to the Lessee orLessor, as the case may be. However, no such assignment shall operate to relieve the assignor of any liability or obligationunder this Lease which arose prior to such assignment. In addition, no change of ownership of the Premises shall bebinding upon Lessee, whether Lessee has actual or constructive knowledge of such change of ownership, until thirty (30)days after Lessee shall have been furnished by certified or registered United States mail at Lessee's office address as setout herein with a certified copy of the recorded instrument or instruments satisfactory in the opinion of Lessee to evidencesuch change of ownership and to establish the right, title or interest of the claiming party and the extent thereof.

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(h) Benefit of Agreement Recording. The covenants and agreements contained in the within Lease shall apply to,

inure to the benefit of, and be binding upon the parties hereto and upon their respective successors in interest and legalrepresentatives, subject to the restrictions contained herein on assignments. If requested by Lessee or Lessor, the partieshereto shall execute a memorandum or short recording counterpart of this Lease, which counterpart shall be in a formsufficient to constitute notice of this Lease to third parties under the laws of Utah, but which counterpart shall not containthe amounts or rates of payment hereunder, or other terms of this Lease which Lessee or Lessor may elect not to discloseof record. The execution and recording of the above recording counterpart shall not limit, decrease or increase, or in anymanner affect, any of the terms of this Lease, or any rights, interests or obligations of the parties hereto.

( i ) No Interruption of Operations. Disputes or differences between the parties hereto shall not interrupt

performance of this Lease or the continuation of operations hereunder unless a continuation of operations would causeirreparable harm to the Lessor. In the event of any dispute or difference, and subject to the foregoing, operations may becontinued, and settlements and payments may be made hereunder in the same manner as prior to such dispute ordifference, until the matters in dispute have been finally determined between the parties, and thereupon such payments orrestitutions shall be made as may be required under the terms of the settlement or final determination of the dispute.

(j) Waiver. The failure of a party to insist upon strict performance of any of the terms, covenants, conditions or

agreements contained herein shall not be deemed a waiver of any rights or remedies that said party may have, and shallnot be deemed a waiver of any subsequent breach of default in the performance of any of the terms, covenants,conditions, or agreements contained herein.

IN WITNESS WHEREOF, this Lease has been executed and delivered by the undersigned as of the date first

above written.


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\

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15


EXHIBIT A


LAND DESCRIPTION:

Township 14 South, Range 14 East, SLM

Section 2: All.

Section 3: E/2, NW/4.

Containing 1120.00 acres, more or less

OWNERSHIP INTERESTS:

Osterbroen Family Limited Partnership - undivided 10-percent ownership of mineral estate; no ownership of surfaceestateDress Investments, undivided 10-percent ownership of mineral estate; no ownership of surface estateSteven Ladle, undivided 10-percent ownership of mineral estate; no ownership of surface estateGary Pestorious, undivided 10-percent ownership of mineral estate; no ownership of surface estate

16



This is to give notice of the assignment by Bleeding Rock LLC to GreenRiver Resources, Inc of a Lease Agreement ("Lease")

dated as of February 23, 2005, by and between Osterbroen Family Limited Partnership as to an undivided 10-percent ownership ofmineral estate; Dress Investments as to an undivided 10-percent ownership of mineral estate; Steven Ladle, as to an undivided 10-percent ownership of mineral estate; and Gary Pestorious, as to an undivided 10-percent ownership of mineral estate; and BleedingRock LLC, a Utah company,. The real property involved is as follows:

Township 14 South, Range 14 East, SLMSection 2: All.Section 3: E/2, NW/4.Containing 1120.00 acres, more or less

Bleeding Rock LLC By: /s/ William C. GibbsWilliam C. Gibbs, Manager/CEO STATE OF UTAH COUNTY OF SALT LAKE

The Foregoing instrument was acknowledged before me this 8th day of November, 2005 by William C. Gibbs, known to me tobe the person described in and who executed the within and foregoing instrument and acknowledged to me that he executed thesame on behalf of Bleeding Rock L.L.C.

/s/ Whitney Boyer

Notary Public

17



This Addendum to Lease is made and entered into as of the 16th day of January, 2009, by and between the parties set forth on

the signature page below as “Lessor”, hereinafter referred to as "Lessor", and GreenRiver Resources, Inc., a Utah corporation,hereinafter referred to as "Lessee".

Recitals

Whereas, Lessor entered into a Hydrocarbon and Mineral Lease, dated February 23, 2005, with BleedingRock LLC, as lessee(the "Lease") and

Whereas, BleedingRock LLC assigned all of its rights and obligations under such Lease to Lessee.; and

Whereas, Lessor and Lessee desire to extend the payment date for rental payments due December 31, 2008 and extend theprimary term. of the Lease to December 31, 2013.

Agreement

1. The Rent due under Section 3 (c) on January 1, 2009 will be due and payable on February 15,2009.

2. The "primary term" under Section 1 (b) shall be extended until December 31,

2013.


same.


above written.

18


19


SECOND ADDENDUM TO HYDROCARBON AND MINERAL LEASE

This Second Addendum to Lease is made and entered into as of the 26th day of June, 2009, by and between the parties setforth on the signature page below as “Lessor”, hereinafter referred to as “Lessor”, and GreenRiver Resources, Inc., a Utahcorporation, hereinafter referred to as “Lessee”.

Recitals

Whereas, Lessor entered into a Hydrocarbon and Mineral Lease, dated February 23, 2005, with BleedingRock LLC, as lessee(the “Lease”); and


Whereas, Lessor and Lessee amended such Lease by an Addendum to lease dated January 16, 2009 (the “FirstAddendum”); and

Whereas, Lessor and Lessee desire to acknowledge that a force majeure event has occurred because of the financial andcredit crisis which has severaly affected Lessee’s ability to obtain financing, and therefore agree to extend the date for rentalpayments due December 31, 2008 accordingly. Now Therefore, it is hereby agreed as follows: Agreement

1. The Rent due under Section 3(d) on January 1, 2009, which is for rentals payable in advance for the 2009 calendar year,will be due and payable on or about July 15, 2009.


same.


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21


THIRD ADDENDUM TO HYDROCARBON AND MINERAL LEASE

This Third Addendum to Lease is made and entered into as of the 1st day of September, 2009, by and between the parties set

forth on the signature page below as “Lessor”, hereinafter referred to as “Lessor”, and GreenRiver Resources, Inc., a Utahcorporation, hereinafter referred to as “Lessee”.

Recitals


Whereas, BleedingRock LLC assigned all of its rights and obligations under such Lease to Lessee; and Whereas, Lessor and Lessee amended such Lease by certain Addendums to lease to extend the 2009 rental payment date;

and Whereas, Lessee has offered Lessor the opportunity to use the rental payments owed to Lessor to participate in a bridge

financing by GreenRiver Resources Corp.; Whereas, Lessor has agreed to accept the Bridge Note, in the amount of the outstanding rental payment, and associated

Bridge Warrant, in full satisfaction of the rental owing for 2009 under the Lease.

Now, Therefore, it is hereby agreed as follows:

Agreement

1. Upon execution of the Bridge Note and associated Bridge Warrant, attached hereto as Exhibit A, the Rent due underSection 3(d) on January 1, 2009, which is for rents payable in advance for the 2009 calendar year, is hereby fully paid.


same.


above written.

22


23


FOURTH ADDENDUM TO HYDROCARBON AND MINERAL LEASE

This Fourth Addendum to Lease is made and entered into as of the 15th day of December, 2009, by and between the partiesset forth on the signature page below as “Lessor”, hereinafter referred to as “Lessor”, and GreenRiver Resources, Inc., a Utahcorporation, hereinafter referred to as “Lessee”.

Recitals


Whereas, BleedingRock LLC assigned all of its rights and obligations under such Lease to Lessee; and Whereas, Lessor and Lessee amended such Lease by certain Addendums to lease to extend the 2009 rental payment date;

and Whereas, Lessor agreed to accept Bridge Notes, in the amount of the outstanding rental payments for 2009 in full satisfaction

of the renal owing for 2009 under the Lease; and Whereas, Lessor and Lessee desire to acknowledge that a force majeure event has occurred because of the financial and

credit crisis which has severaly affected Lessee’s ability to obtain financing, and therefore agrees to extend the date for the rentalpayment increase due to begin January 1, 2010.


Agreement

1. The Rent increase due to begin under Section 3(d) on January 1, 2010, is for rentals payable in advance for the 2010calendar year, will be due and payable upon completion of a financing of $6 million or more, as contemplated by the currentfinancing effort by Raymond James.


same.

24



25


26


FIFTH ADDENDUM TO HYDROCARBON AND MINERAL LEASE

This Fifth Addendum to Lease is made and entered into as of the 1st day of January, 2011, by and between the parties set forth

on the signature page below as “Lessor”, hereinafter referred to as “Lessor”, and GreenRiver Resources, Inc., a Utah corporation,hereinafter referred to as “Lessee”.

Recitals


Whereas, BleedingRock LLC assigned all of its rights and obligations under such Lease to Lessee; and Whereas, Lessor and Lessee amended such Lease by certain Addendums to Lease with respect to such Lease; and Whereas, Lessor has agreed to accept common shares in GreenRiver Resources Corp. at $0.20/share for the amount of the

outstanding rental payments for 2011 in full satisfaction of the rental owing for 2011 under the Lease; Whereas, such common shares will be represented by a Special Warrant Certificate, in the form attached as Exhibit A; and Whereas, Lessor and Lessee desire to acknowledge that a force majeure event has occurred because of the financial and

credit crisis which has severely affected Lessee’s ability to obtain financing.


Agreement

1. Lessor hereby accepts as payment of Rent for 2011, an aggregate of 752,640 shares of GreenRiver Resources Corp.,represented by Special Warrant Certificates in the form of Exhibit A. Each Lessor shall receive a certificate for theirproportionate number of shares, in the amount of 188,160.


same.

27



28


29


SIXTH ADDENDUM TO HYDROCARBON AND MINERAL LEASE

This Sixth Addendum to Lease is made and entered into as of this 15th day of January, 2012, by and between the parties setforth on the signature page below as “Lessor”, hereinafter referred to as “Lessor”, and GreenRiver Resources, Inc., a Utahcorporation, hereinafter referred to as “Lessee”.

Recitals Whereas, Lessor entered into a Hydrocarbon and Mineral Lease, dated February 23, 2005, with BleedingRock LLC, as lessee

(the “Lease”) and Whereas, BleedingRock LLC assigned all of its rights and obligations under such Lease to Lessee; and Whereas, Lessor and Lessee amended such Lease by certain Addendums to Lease with respect to such Lease; and Whereas, Lessor and Lessee desire to further amend the Lease as set forth below.

Now Therefore, it is hereby agreed as follows: 1. The following paragraph will be added to Section Three of the Lease:

(e) Pooling/Unitization of Interests. Lessee, at its option, is hereby given the right and power to voluntarily pool, unitizeor combine the acreage covered by this Lease, or any portion thereof, as to Oil Products (a “Pooled Unit”), together withany byproducts derived in the process of extracting Oil Products, including, but not limited to, sand, gravel, timber, gold,titanium, silver and other minerals (“Byproducts”), or separately for the production of either, when in Lessee's judgment it isnecessary or advisable to do so, and irrespective of whether authority similar to this exists with respect to other land orleases in the immediate vicinity thereof. The pooling or unitization in one or more instances shall not exhaust the rights ofLessee hereunder to pool this Lease, or portions thereof, into other units. Lessee shall file for record in the county recordsof the county in which the lands are located an instrument identifying and describing the pooled acreage. Lessee may at itselection exercise its pooling operation after commencing operations, but is not required to include land or leases upon whicha mine is capable of producing Oil Products. Lessee shall not include acreage in a Pooled Unit if the Oil Products containedtherein are not capable of commercial production.

Production of Oil Products from any part of a Pooled Unit shall be considered as operations for production of Oil

Products from the land covered by this Lease, whether or not actually located on the premises covered by this Lease.

If this Lease is pooled or unitized with other land or leases, Royalties hereunder shall be computed on the basis ofNet Returns as set forth in 3(a) above, for the entire Pooled Unit, and allocated to the land covered by this Lease andincluded in the Pooled Unit just as though such production were from such land, with Lessor receiving a proportionateRoyalty share based on the amount of Oil Products reasonably believed to be contained on Lessor's Lease in relation to theOil Products contained in the entire Pooled Unit. By way of example, if Lessor's portion of the estimated reserves on theleased Premises are 60 million barrels, and the estimated reserves on the entire Pooled Unit are 100 million barrels,Lessor's Royalty would be reduced to 3/5 of the Royalty otherwise payable hereunder, but would be payable on thereserves contained in the entire Pooled Unit. For purposes of computing the Oil Products contained on this Lease and anyPooled Unit hereunder, Lessee and Lessor agree that a reserves estimate or resource report prepared by a recognizedgeology or engineering firm selected by Lessee shall be determinative. As of the date of this Amendment, Lessor herebyaccepts the Resource Estimate prepared by Marston & Marston with respect to the Oil Products contained on the Lease.

2. Section 3(e), "Royalty on By-products," will be renumbered accordingly.

3. Section 3(a) is hereby amended to clarify that costs of salaries for the executives of Lessee shall not be included in"Operating Costs."

4. Rentals payable under Section 3 shall be increased by 20% beginning 2014.

5. The "primary term" under Section 1 (b) of the Leases shall be extended until December 31, 2014.

6. Lessee hereby agrees to cooperate with Lessor, or any one of them, at their expense, in connection with a like-kindexchange of property under Section 1031 of the Internal Revenue Code, and the regulations promulgated thereunder,with respect to the property and/or royalties that are subject to the Lease.


7. All other terms and conditions shall remain the same.


30


31


32


Exhibit 10.9 HYDROCARBON AND MINERAL LEASE

This Lease is made and entered into as of the 14th day of January, 2005, by and between the parties listed onExhibit A hereto, with respect to the interests described therein, as the Lessor, hereinafter referred to as "Lessor", andBleeding Rock LLC, a limited liability company organized under the laws of the State of Utah, hereinafter referred to as"Lessee".

SECTION ONETERM AND PURPOSE

(a) Grant of Lease. Lessor, in consideration of the rents and royalties to be paid and the covenants and conditionsto be kept and performed by Lessee as provided for in this instrument, leases to Lessee the land, hydrocarbon and mineralinterests in Carbon County, Utah, more particularly described in Exhibit A to this Lease (the ''Premises"), for the purpose ofexploring for, extracting, mining, taking out, and removing by any mining or extraction method, including open-pit miningand strip-mining, the merchantable tar sand, bitumen, oil and other hydrocarbon products (collectively, "Oil Products"),together with any by-products derived in the process of extracting the foregoing products therefrom (including, but notlimited to, sand, gravel, timber, gold, titanium, silver and other minerals) which are, or which subsequently may be foundon, in, or under the land. Together with the right to: (1) make all excavations or drilling; (2) construct on the Premises allbuildings, extraction and separation facilities, openings, ditches, drains, railroads, roads, pipelines, power facilities, tanksand other improvements that are or may become suitable or necessary for the mining and removal, and/or separation andextraction, of the products from the Premises; and (3) cut and use the timber on the Premises, as may be necessary for theusual purposes of the mining operations and for Lessee's own fuel; Lessee to exercise reasonable care to clear up andremove all combustible debris to prevent any fires.

1


(b) Term. It is agreed that this Lease shall remain in force for a primary term of six (6) years from this date (the

"primary term") and if Lessee shall commence mining of Oil Products within the primary term or any extension of it, Lesseeshall have the right to continue mining and the term shall extend subsequently as long as Oil Products are continuouslyproduced in commercial quantities (Oil Products in amounts sufficient to produce 500 barrels of oil per day, on average) byLessee from the Premises, provided, however, that production may be discontinued or interrupted if such interruption isdue to the inability of the Lessee to operate the mine or facilities on a commercially reasonable basis due to temperatures,weather or snow-pack during the winter months.

SECTION TWO


Lessee may install engines and machinery, build roads, pipelines and rail tracks, and do such other things on thePremises as may be necessary or proper to carry on the mining operations. Lessee shall have the right to use, free of cost,gas, oil, and water produced on the land for Lessee's operation on the land. Lessee shall have the right at any time up to180 days after the termination of this Lease to remove all machinery and fixtures placed on the Premises. The mining of theOil Products by Lessee shall be done in a manner as is usual and customary in mining operations of similar character.Lessee shall comply with all government regulations in its mining operations. Lessee shall not remove or impair any roads,tracts, ditches, or improvements of a permanent nature made by Lessee after the termination of this Lease.

2


SECTION THREE

RENT AND ROYALTY

(a) Royalties. Lessee shall pay to Lessor a Production Royalty on Net Returns from the sale of Oil Products. Forpurposes of this Agreement, the term "Production Royalty on Net Returns" means an amount equal to 10% of the MarketValue of Minerals sold by Lessee, less the following, to the extent and only to the extent that they are incurred by Lesseeprior to sale by Lessee of the Oil Products: Operating Costs, Transportation Costs, Processing Costs, Value Added Costsand Extraction Taxes (collectively referred to herein as "Costs and Taxes"). The term "Operating Costs" means expensesand costs actually incurred for the extraction of the Oil Products from the ground and mining and handling of the OilProducts, including maintenance and repairs to equipment and depreciation, but excluding reclamation expenses. The term"Transportation Costs" means the expenses and charges actually incurred in transporting Oil Products, or their derivatives,from the mine to the refinery or other place of processing and/or sale. Such costs shall include, but not be limited to, wages,rent, freight, shipment insurance, handling, port, delay, demurrage, lighterage, tug, forwarding costs, andtransportation and taxes. The term "Processing Costs" means the expenses and costs actually incurred for separating,processing or other benefication of the Oil Products, including maintenance and repairs to equipment and depreciation.The term "Value Added Costs" means the expenses and costs actually incurred in upgrading the Oil Products for sale,including, refining, cracking, distillation, or by mixing or combining the Oil Products, or any of them, with reagents or othermaterials, minerals, chemicals, compounds, hydrocarbons or other substances of any kind or nature to achieve theproducts or goods which are then sold by Lessee, including maintenance and repairs to equipment and depreciation. Theterm "Extraction Taxes" means sales, use, gross receipts, ad valorem, severance and other taxes due and payable inrespect to severance, production, removal, sale or disposition of the Oil Products, but excluding any taxes on net income.Oil Products shall be deemed sold at the time the money is actually received by Lessee unless transferred by Lessee to anaffiliate. The price received for the Oil Products sold in an "arms length transaction" shall be presumed to be "Market Value"unless rebutted by a preponderance of the evidence. For purpose of this paragraph, "arm's length transaction" means atransaction that has been arrived at in the market place between independent, nonaffiliated persons with opposingeconomic interests regarding that transaction.

3


(b) Payment of Royalties. Calculations and payments of the royalty shall be made quarterly, on the 15th day of each

January, April, July, and October in each year, commencing on the quarterly date following the first full or partial quarter inwhich Oil Products have been mined and extracted and sold from the Premises. If the calculation of Net Returns from thesale of Oil Products for any calendar quarter results in a negative number, no production royalty shall be payable withrespect to that calendar quarter, but such negative number shall not be used to offset Net Returns from the sale of OilProducts for any future calendar quarter Payments shall be made to each Lessor at the address or addresses set forth onthe signature page hereof, or as otherwise directed by a Lessor in writing. Lessee shall, on a quarterly basis and inconjunction with each quarterly royalty payment, transmit to Lessor an accurate statement of the amount of Oil Productsremoved and sold during the quarter for which royalties are paid, and the amount of Costs and Taxes. The refinery receiptsshall be prima facie evidence of the amounts so sold during each quarter. Lessor may inspect and review the refineryreceipts upon request at reasonable times. Any errors shall be corrected accordingly. Lessor shall at all times have a lienon all Oil Products mined, and on all improvements made, on the Premises as security for any unpaid balance of rents,royalties, or taxes due and payable.

(c) Bonus and Rent. Upon execution of this Lease, Lessee shall pay to Lessor the sum of $16,106.70 as a bonuspayment hereunder. Thereafter, beginning January 1, 2006, and annually thereafter, as rent under this Lease, Lessee shallpay to Lessor the amount of $16,106.70. If the property has not reached commercial production of Oil Products (OilProducts in amounts sufficient to produce 500 barrels of oil per day, on average) by the 5th anniversary hereof, and suchdelay is not due to force majeure event under the provisions of Section 14(e) below, the advance rent shall increase to$23,893.40 per year, or Lessor, at such time may terminate this Lease. Any lawsuit against development of the property shalltoll any increase in the rent and any termination right on the part of Lessor, so long as Lessee is diligently pursuing thelawsuit. Rent due hereunder shall be excused for any year as to which the royalties paid hereunder for the prior year exceedthe rental amount.

(d) Apportionment of Royalties and Rents. (1) The stated amounts of royalties to be paid by Lessee hereunder arebased upon a 100-percent interest in and to the mineral estate as to all of the Premises. If any party comprising Lessorowns less than the interest in all of the Premises described in the preceding sentence, all royalty payments to be made byLessee to such party hereunder shall be reduced in the same proportion thereof as the interest of such party in thePremises bears to the interest described for such party in the preceding sentence. (2) The stated amounts of rents to bepaid by Lessee hereunder are based upon the undivided interests in the mineral estate as to all of the Premises stated to beowned by each party comprising Lessor as set forth in Exhibit A attached hereto. If any party comprising Lessor ownsless than the interest in all of the Premises described in the preceding sentence for such party, all rent payments to bemade by Lessee to such party hereunder shall be reduced in the same proportion thereof as the interest of such party in thePremises bears to the interest described for such party in the preceding sentence.

4


SECTION FOURTERM EXTENSION

If mining of Oil Products is not commenced on the land on or before the 61 anniversary of the commencement date

of this Lease in commercial quantities (Oil Products in amounts sufficient to produce 500 barrels of oil per day, on average,provided, however, that production may be discontinued or interrupted if such interruption is due to the inability of theLessee to operate the mine or facilities on a commercially reasonable basis due to temperatures, weather or snow-packduring the winter months), this Lease shall terminate as to both parties, unless the failure to commence operations isexcused by the force majeure provisions of Section 14(e) below, in which case the term of this Lease shall be extended inaccordance with the provisions of said Section 14(e).

SECTION FIVEEXPLORATION AND DEVELOPMENT COMMITMENT

Lessee agrees to expend or cause to be expended during the term of this Lease, a minimum of $150,000 per year onthe development of the Premises, until commercial production of Oil Products (Oil Products in amounts sufficient toproduce 500 barrels of oil per day, on average, provided, however, that production may be discontinued or interrupted ifsuch interruption is due to the inability of the Lessee to operate the mine or facilities on a commercially reasonable basisdue to temperatures, weather or snow-pack during the winter months) is reached. For this purpose, the followingexpenditures would qualify: expenditures on prospecting and searching for or production of Oil Products on, in or underthe property, drilling, examining, measuring and sampling the deposit of bitumen, when found, to gain knowledge of itssize, shape, position and characteristics to determine the value thereof, research, engineering, test work, feasibility studiesand other development and construction work directly benefiting the property, work performed on mineral lands contiguousto the property, legal fees, engineering and consulting fees and salaries and other expenses relating to Lessee'spersonnel directly involved in the project and all other similar activity or work performed with respect to the property or itsdevelopment, and fees and expenditures on other projects which benefit the Sunnyside project or reduce the expenditureswhich would otherwise be incurred in connection with the Sunnyside project. All expenditures for exploration anddevelopment in excess of the respective minimums required in each year shall be applied to the exploration commitmentdescribed in the next succeeding year or years.

5


SECTION SIX

PROPERTY TAXES

Lessee shall pay promptly before delinquency all property taxes and assessments, that may be levied or assessedduring the term of this Lease upon the Premises. AU such taxes for the year in which this Lease terminates shall beprorated between Lessor and Lessee, except that neither Lessor nor Lessee shall be responsible for the payment of anytaxes which are based upon production from the Premises accruing solely to the other party. Lessee shall have the right tocontest, in the courts or otherwise, in its own name or in the name of Lessor, the validity or amount of any such taxes orassessments, if it deems the same unlawful, unjust, unequal or excessive, or to take such other steps or proceedings as itmay deem necessary to secure a cancellation, reduction, readjustment or equalization thereof, before it shall be required topay the same. Lessee shall not permit or suffer the Premises or any part thereof to be conveyed, or title lost to Lessor, asthe result of nonpayment of such taxes or assessments. Lessee shall upon request furnish to Lessor duplicate receipts forall such taxes and assessments when paid. Lessee shall not be liable for any taxes levied on or measured by income, orother taxes applicable to Lessor, based upon payments under this Lease. Nothing in the foregoing shall be construed toobligate Lessee to pay such portion of any tax as is based upon the value of improvements, structures or personal propertymade, placed and used on any part or parts of the Premises by or for Lessor or by an owner or lessee of surface rightsother than Lessee after the date hereof. If Lessor receives tax bills or claims which are the responsibility of Lesseehereunder, the same shall be promptly forwarded to Lessee for appropriate action.

SECTION SEVENTERMINATION

(a) Termination by Lessor. In the event of any default by Lessee in the performance of its obligations hereunder,including all obligations to make payments of money to Lessor, Lessor shall give to Lessee written notice specifying thedefault. If (a) a default involving matters other than the payment of money to Lessor is not cured within sixty (60) days afterLessee has received the notice, or if Lessee has not within the time begun action to cure the default and does not diligentlyprosecute such action to completion, or (b) if a default involving the payment of money to Lessor is not cured within fifteen(15) business days after Lessee has received notice of non payment, Lessor may terminate this Lease by delivering toLessee written notice of such termination, subject to Lessee's right to remove its property and equipment from thePremises as hereinafter provided. Lessor shall have no right to terminate this Lease except as set forth in this paragraph.

6


(b) Termination by Lessee. Lessee shall have the right, at any time, to terminate this Lease by giving 180 days'

written notice to Lessor, either in person or by mail addressed to Lessor at the address given in this Lease, and on paymentof the rent, royalty and other sums as may be due, this Lease shall be deemed terminated. When this Lease terminates,regardless of the cause, Lessee shall quietly and peacefully surrender possession of the Premises to Lessor or Lessor'sagents, and Lessee shall enter, or cause to be entered, a certificate of the termination of this Lease in the proper books ofrecord in Carbon County, Utah, and record them, as may be necessary to clear the record title and divest Lessee of allrights and title given or acquired under this Lease.

SECTION EIGHTMINING

(a ) Mining Practices. All of Lessee's operations hereunder shall be conducted in accordance with acceptedpractices of the mineral industry, and in compliance with all applicable local, state and federal laws and regulations. It shallrest in the sole discretion of the Lessee whether and in what manner it shall mine, remove, transport, and deliver OilProducts to a processing plant or refinery for physical, chemical or other treatment or shall treat the same in place.Whenever Lessee deems it necessary or advisable, Lessee may discontinue or resume exploration, development, miningand production operations from time to time during the term hereof, so long as it meets its obligations hereunder.

(b) Adjacent Property Mining Activities. Lessee is hereby granted the right, if it so desires, to mine and remove OilProducts, and such other materials as are incident thereto, from the Premises through or by means of shafts, openings orpits which may be made in or upon adjoining property owned or controlled by Lessee, to the extent that Lessor can grantsuch rights. Lessee may, if it so desires, use the Premises and any shafts, openings and pits therein for the mining,removal, treatment and transportation of Oil Products and materials from adjoining property, or for any purpose connectedtherewith. In addition, the operations of Lessee upon the Premises and upon any and all other adjoining lands to whichLessee has mining rights, may be conducted as a single mining operation, to the same extent as if all such propertiesconstituted a single tract of land. Nothing herein shall relieve Lessee from its obligations for payments or reports as setforth in this Lease.

7


(c) Stockpiling. Lessee shall have the right, at any time during the term hereof, to stockpile any Oil Products or

other materials mined or produced from the Premises at such place or places as Lessee may elect, either upon thePremises or upon any other adjoining lands owned or controlled by Lessee, its successors and assigns. The rights andliens of Lessor in and to any such Oil Products stockpiled on such other lands shall not be divested by the removal thereoffrom the Premises but shall be the same in all respects as though such materials had been stockpiled on the Premises. Thestockpiling of Oil Products from the Premises on such other lands shall not be deemed a removal or shipment thereofrequiring payment in respect of Lessor's interest.

(d) Treatment. Lessee shall have the right, but shall not be required, to process, separate, extract, beneficiate,concentrate, smelt, refine, leach and otherwise treat, in any manner, any Oil Products and other materials mined orproduced from the Premises and from other adjoining lands. Such treatment may be conducted wholly or in part at a plantor plants established or maintained on the Premises or on such other lands. The tailings and residue from such treatmentshall be deemed waste and may be deposited on the Premises or on such other lands. Lessor shall have no right, title orinterest in said tailings or residue; provided, however, that any said tailings or residue remaining on the Premises or onsuch other lands for a period of sixty (60) days after the date on which this Lease has expired, or has been terminated byLessee as to all of the Premises, shall be deemed abandoned by Lessee and thereupon may be claimed by Lessor, if andonly if Lessor so elects. Nothing contained herein shall be construed to relieve Lessee from its responsibility forsatisfaction of all obligations with respect to environmental protection laws, mined land reclamation laws or otherapplicable federal, state or local laws and regulations.

(e) Overburden Deposits. Waste, overburden, surface stripping and other materials from the Premises may bedeposited on or off the Premises, to the extent Lessor can grant such right and subject to all applicable local, state andfederal laws and regulations. Such materials from other adjoining lands may be deposited on the Premises only if the samewill not interfere with mining or oil and gas operations on the Premises.

(e) Inspection Rights of Lessor. Lessor reserves to itself and its agents the right, at any time, to enter the Premisesor any part of it, to inspect and survey the Premises, and to measure the quantity of Oil Products that may be in or on thePremises or that shall have been mined or removed from the Premises, without unnecessarily or unreasonably hindering orinterrupting the work or operations of Lessee.

8


SECTION NINE

RECORDS

Lessee shall keep books of account, in accordance with generally accepted accounting principles, consistentlyapplied, showing the amount of Oil Products shipped and sold, and the amount of money received from the sale of the OilProducts. The books of account shall be open at all reasonable times to Lessor and its representatives. Lessor or itsauthorized agents shall have a right to audit and inspect Lessee's accounts and records to verify the calculation of thepayments to Lessor hereunder, which right may be exercised as to each payment at any reasonable time during a period oftwo (2) years from and after the date on which the payment was made by Lessee. If no such audit is performed during suchperiod, such accounts, records and payments shall be deemed to be true, accurate and correct.

SECTION TENEFFECT OF AGREEMENT


SECTION ELEVENPROPORTIONATE REDUCTION

Royalties and rents provided for in this Lease shall be subject to proportionate reduction in accordance with theprovisions of Section 3(d) above.

9


SECTION TWELVE

DIVIDED INTERESTS

If the Premises are now or later shall be owned in severalty or in separate tracts, the Premises, nevertheless, shall bedeveloped and operated as one lease and all royalties accruing under this Lease shall be treated as an entirety and shall bedivided among and paid to such separate owners in the proportion that the acreage owned by each separate owner bears tothe entire leased acreage. If, however, the Premises consist of two or more non-abutting tracts, this section shall applyseparately to each non-abutting tract, and if a portion of the Premises is later consolidated with other lands for the purposeof operating the consolidated tract as one lease, this section shall be inoperative as to the portion so consolidated.

SECTION THIRTEENWARRANTY OF TITLE

Each of the parties comprising Lessor, to the extent and only to the extent of the ownership interest set forth forthat party on Exhibit A attached hereto, warrants and agrees to defend the title to the lands described in this Lease againstburdens and claims arising by, through or under such party, but not otherwise. Lessor agrees that Lessee shall have theright at any time to redeem, for Lessor, by payment of any mortgage, taxes, or other liens on the lands in the event ofdefault of payment by Lessor, and be subrogated to the rights of the holder, and Lessor, on behalf of Lessor and the heirs,successors, and assigns of Lessor, surrenders and releases all rights of dower and homestead in the Premises describedin this Lease, insofar as the right of dower and homestead may in any way affect the purposes for which this Lease is made.

10


SECTION FOURTEEN

GENERAL CONDITIONS

(a) Attorneys' Fees. IfLessor or Lessee shall commence an action against the other arising out of or in connectionwith this Lease, the prevailing party shall be entitled to recover its costs of suit and reasonable attorneys' fees.

(b) Notices. All notices and demands, which may or are to be required or permitted to be given hereunder shall be inwriting. All notices and demands shall be sent by receipted hand delivery, by confirmed facsimile, by United States mail,postage prepaid, or by an express delivery service which maintains records of deliveries, freight prepaid, addressed toLessor or Lessee, at the address or addresses set forth on the signature page hereof

(c) Indemnity. Each party shall hold harmless, reimburse, indemnify, and defend the other party from and againstany and all losses, injury, obligations, claims, damages, judgments, and injuries of any nature resulting from, arising out of,or related in any respect to the falsity or inaccuracy of any representation or warranty made by the indemnifying partyand/or obligations arising under or in connection with this, including without limitation reasonable attorneys' fees, costs,and expenses of any nature incurred as a result of or related to such false or inaccurate representations and/or warranties.


(e) Force Majeure. Lessee shall not be liable for failure to perform any of its obligations hereunder (except forpayments which have become due to Lessor) during periods in which performance is prevented by any cause reasonablybeyond Lessee's control (except for payments of money), which causes hereinafter are called "force majeure". Forpurposes of this Lease, the term "force majeure" shall include, but shall not be limited to, fires, floods, windstorms andother damage from the elements, strikes, riots, action of governmental authority, litigation, acts of God and acts of thepublic enemy. The performance by Lessee of its obligations hereunder shall be suspended, and the duration of this Leaseshall be extended, for a period equal to the period for which performance is reasonably suspended by reason of forcemajeure. All periods of force majeure shall be deemed to begin at the time Lessee stops performance hereunder by reasonof force majeure. Lessee shall notify Lessor of the beginning and ending date of each such period.

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(f) Paragraph Headings. The paragraph headings as to the contents of particular paragraphs herein are inserted

only for convenience and are in no way to be construed as part of such paragraph or as a limitation on the scope of theparticular paragraph to which they refer.

(g) Assignment: Change of Ownership. Lessee and Lessor may sell, convey, assign or transfer their rights and interests inthis Lease in whole or in part without the prior written consent of the other party provided that the assignor assumes all obligations ofthe respective party, in writing, and furnishes a copy of such assignment to the Lessee or Lessor, as the case may be. However, nosuch assignment shall operate to relieve the assignor of any liability or obligation under this Lease which arose prior to suchassignment. In addition, no change of ownership of the Premises shall be binding upon Lessee, whether Lessee has actual orconstructive knowledge of such change of ownership, until thirty (30) days after Lessee shall have been furnished by certified orregistered United States mail at Lessee's office address as set out herein with a certified copy of the recorded instrument orinstruments satisfactory in the opinion of Lessee to evidence such change of ownership and to establish the right, title or interest ofthe claiming party and the extent thereof.

(h) Benefit of Agreement: Recording. The covenants and agreements contained in the within Lease shall

apply to, inure to the benefit of, and be binding upon the parties hereto and upon their respective successors ininterest and legal representatives, subject to the restrictions contained herein on assignments. If requested byLessee or Lessor, the parties hereto shall execute a memorandum or short recording counterpart of this Lease,which counterpart shall be in a form sufficient to constitute notice of this Lease to third parties under the laws ofthe state in which the Premises are located, but which counterpart shall not contain the amounts or rates ofpayment hereunder, or other terms of this Lease which Lessee or Lessor may elect not to disclose of record. Theexecution and recording of the above recording counterpart shall not limit, decrease or increase, or in anymanner affect, any of the terms of this Lease, or any rights, interests or obligations of the parties hereto.

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(i) No Interruption of Operations. Disputes or differences between the parties hereto shall not interrupt performance

of this Lease or the continuation of operations hereunder unless a continuation of operations would cause irreparable harmto the Lessor. In the event of any dispute or difference, and subject to the foregoing, operations may be continued, andsettlements and payments may be made hereunder in the same manner as prior to such dispute or difference, until thematters in dispute have been finally determined between the parties, and thereupon such payments or restitutions shall bemade as may be required under the terms of the settlement or final determination of the dispute.

j) Waiver. The failure of a party to insist upon strict performance of any of the terms, covenants, conditions or

agreements contained herein shall not be deemed a waiver of any rights or remedies that said party may have, and shall notbe deemed a waiver of any subsequent breach or default in the performance of any of the terms, covenants, conditions oragreements contained herein.


13


State of Colorado } }ssCounty of Denver }

On this 14th day of January, 2005, personally appeared before me E. Michael Meany, President of Meany Land &Exploration, Inc., a Colorado corporation, who by me did duly swear that he is the president of the above named corporationand that said instrument was signed on behalf of said corporation pursuant to a resolution of its Board of Directors, andacknowledged to me that said corporation executed the same.

/s/ R. Hal Johnson, Jr. Notary Public

(SEAL) My commission expires January 5th, 2008

14


State of Utah } }ssCounty of Salt Lake }

On this 22nd day of February, 2005, personally appeared before me William C. Gibbs, Manager of Bleeding RockLLC, who by me did duly swear that he is the manager of the above named limited liability company and that said instrumentwas signed on behalf of said company, and acknowledged to me that said corporation executed the same.

/s/ Michael Thaller Notary Public

(SEAL) My commission expires August 30, 2008 [Notary stamp here]

15


EXHIBIT A


Township 14 South, Range 14 East, SLMSection 3: SW/4Section 10: E/2, NW/4Containing 640.00 acres, more or less

OWNERSHIP INTERESTS: Meany Land Development - undivided 16.6667-percent ownership of mineral estate.

16



This is to give notice of the assignment by Bleeding Rock LLC to GreenRiver Resources, Inc. of a Lease Agreement("Lease") dated as of January 14, 2005, by and between Meany Land & Exploration, Inc., and Bleeding Rock, LLC, a Utahcompany. The real property involved is as follows:

Township 14 South, Range 14 east, SLMSection 3: SW/4Section 10: E/2, NW/4Containing 640.00 acres, more or less

Bleeding Rock LLC [recorded stamp here]

By: /s/ William C. GibbsWilliam C. Gibbs, Manager/CEO

STATE OF UTAH } } ss. [stamp]COUNT OF SALT LAKE }

The foregoing instrument was acknowledged before me this 8th day of November, 2005 by William C. Gibbs, knownto me to be the person described in and who executed the within and foregoing instrument and acknowledged to me that heexecuted the same on behalf of Bleeding Rock L.L.C.

/s/ Whitney Boyer Notary Public Residing at: 4641 S. 2300 E. SLC, UT 84117

My Commission Expires: 3/25/09 [Notary stamp here]

17



This Addendum to Lease is made and entered into as of the 16th day of January, 2009, by and between Meany Land

& Exploration, Inc. hereinafter referred to as "Lessor", and GreenRiver Resources, Inc., a Utah corporation, hereinafterreferred to as "Lessee".

Recitals

Whereas, Lessor entered into a Hydrocarbon and Mineral Lease, dated January 14, 2005, with BleedingRock, LLC, aslessee (the "Lease") and

Whereas, BleedingRock LLC assigned all of its rights and obligations under such Lease to Lessee,; and

Whereas, Lessor and Lessee desire to extend the payment date for rental payments due December 31, 2008 andextend the primary term of the Lease to December 31, 2013.

Agreement

1. The Rent due under Section 3 (c) on January 1, 2009 will be due and payable on February 15, 2009. Rental Paymentshall be the increased as stated in paragraph 14(e) for each year beginning February 15, 2009 and each year thereafter.

2. The "primary term" under Section 1(b) shall be extended until December 31, 2013. 3. All other terms and conditions shall remain the same. 4. "Hydrocarbon and Mineral Interest" as defined in our January 14th, 2005 Hydrocarbon and Mineral Lease shall not be

deemed to include, and shall specifically exclude, conventional Oil and Gas.


Lessor: Meany Land & Exploration, Inc. By: /s/ E. Michael Meany Its: President Lessee: GreenRiver Resources, Inc. By: /s/ William C. Gibbs Its: President

18



This Addendum to Lease is made and entered into as of the 16th day of April, 2009, by and between Meany Land &Exploration, Inc., hereinafter referred to as "Lessor", and GreenRiver Resources, Inc., a Utah corporation, hereinafterreferred to as "Lessee".

Recitals

Whereas, Lessor entered into a Hydrocarbon and Mineral Lease, dated January 14, 2005, with BleedingRock, LLC, as lessee(the "Lease") and


Whereas, Lessor and Lessee previously extended the payment date for rental payments due December 31, 2008 andextended the primary term of the Lease to December 31, 2013, pursuant to an Addendum to Lease dated January 16, 2009;and


Agreement

1. The Rent due under Section 3(c) on January 1, 2009 will be paid as follows: a. $25,000 on April 16, 2009. b. $24,930.70 on June 30, 2009. 2. All other terms and conditions shall remain the same.

IN WITNESS WHEREOF, this Addendum to Lease has been executed and delivered by the undersigned as of the date firstabove written. Lessor: Meany Land & Exploration, Inc. By: /s/ E. Michael Meany Its: President Lessee: GreenRiver Resources, Inc. By: /s/ William C. Gibbs Its: President

19



This Third Addendum to Lease is made and entered into as of the 15th day of December, 2009, by and betweenMeany Land & Exploration, Inc., hereinafter referred to as "Lessor", and GreenRiver Resources, Inc., a Utah corporation,hereinafter referred to as "Lessee".

Recitals

Whereas, Lessor entered into a Hydrocarbon and Mineral Lease, dated January 14, 2005, with BleedingRock, LLC, aslessee (the "Lease") and


Whereas, Lessor and Lessee desire to extend the payment date for rental payments due December 31, 2008 as setforth below.

Agreement

1. The Rent due under Section 3(c) on January 1, 2010 will be due and payable as follows: 1/3 on January 1, 2010, 1/3 onFebruary 28, 2010 and 1/3 on March 31, 2010.



20



This Fourth Addendum to Lease is made and entered into as of the 1st day of January, 2011, by and between Meany Land &Exploration, Inc., hereinafter referred to as "Lessor", and GreenRiver Resources, Inc., a Utah corporation, hereinafterreferred to as "Lessee".

Recitals




Agreement

1. The Rent due under Section 3(c) on January 1, 2011 will be due and payable as follows: 1/3 on March 1, 2011, 1/3 onMay 31, 2011 and 1/3 on July 31, 2011.



21



This Fifth Addendum to Lease is made and entered into as of the 15th day of January, 2012, by and between Meany Land &Exploration, Inc., hereinafter referred to as "Lessor", and GreenRiver Resources, Inc., a Utah corporation, hereinafterreferred to as "Lessee".

Recitals




Agreement

1. The following paragraphs will be added to Section Three of each of the Leases:

(e) Pooling/Unitization of Interests. Lessee, at its option, is hereby given the right and power to voluntarilypool, unitize or combine the acreage covered by this Lease, or any portion thereof, as to Oil Products (a "PooledUnit"), together with any by-products derived in the process of extracting Oil Products, including, but not limited to,sand, gravel, timber, gold, titanium, silver and other minerals ("Byproducts"), or separately for the production ofeither, when in Lessee's judgment it is necessary or advisable to do so, and irrespective of whether authority similarto this exists with respect to other land or leases in the immediate vicinity thereof. The pooling or unitization in oneor more instances shall not exhaust the rights of Lessee hereunder to pool this Lease, or portions thereof, intoother units. Lessee shall file for record in the county records of the county in which the lands are located aninstrument identifying and describing the pooled acreage. Lessee may at its election exercise its pooling operationafter commencing operations, but is not required to include land or leases upon which a mine is capable ofproducing Oil Products. Lessee shall not include acreage in a Pooled Unit if the Oil Products contained therein arenot capable of commercial production.

Production of Oil Products from any part of a Pooled Unit shall be considered as operations for productionof Oil Products from the land covered by this Lease, whether or not actually located on the premises covered by thisLease.

22


If this Lease is not pooled or unitized with other land or leases, Royalties hereunder shall be computed on

the basis of Net Returns as set forth in 3(a) above, for the entire Pooled Unit, and allocated to the land covered bythis Lease and included in the Pooled Unit just as though such production were from such land, with Lessorreceiving a proportionate Royalty share based on the amount of Oil Products reasonably believed to be containedon Lessor's Lease in relation to the Oil Products contained in the entire Pooled Unit. By way of example, if Lessor'sportion of the estimated reserves on the leased Premises are 60 million barrels, and the estimated reserves on theentire Pooled Unit are 100 million barrels, Lessor's Royalty would be reduced to 3/5 of the Royalty otherwise payablehereunder, but would be payable on the reserved contained on this Lease and any Pooled Unit hereunder. Lesseeand Lessor agree that a reserves estimate or resource report prepared by a recognized geology or engineering firmselected by Lessee shall be determinative. As of the date of this Amendment, Lessor hereby accepts the ResourceEstimate prepared by Marston & Marston with respect to the Oil Products contained on the Lease.

(f) Royalty on By-Products. The royalty on Byproducts as defined above shall be two (2) percent of marketvalue on all other minerals. Royalty on Byproducts shall be calculated and paid in the same manner as provided forNet Returns Royalties.

2. The "primary term" under Section 1(b) of the Leases shall be extended until December 31, 2014. 3. Section 3(a) is hereby amended to clarify that costs of salaries for the executives of Lessee shall not be included in

"Operating Costs." 4. Rentals payable under Section 3 shall be increased by 20% beginning 2014. 5. All other terms and conditions shall remain the same.


Lessor: Meany Land & Exploration, Inc. By: /s/ E. Michael Meany Its: President Lessee: GreenRiver Resources, Inc. By: /s/ William C. Gibbs Its: President

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LEASE AFFIRMATION

This Affirmation of Leases is made and entered into as of the 8th day of June, 2011, by Meany Land & Exploration, Inc.,hereinafter referred to as "Lessor", to GreenRiver Resources, Inc., a Utah corporation, hereinafter referred to as "Lessee".

Recitals

Whereas, Lessor entered into a Hydrocarbon and Mineral Leases, each dated January 14, 2005, with BleedingRock, LLC, aslessee (the "Leases") with respect to approximately 1120 acres and 640 acres, respectively, located in Carbon County, Utah;and


Whereas, the Leases have been amended by certain addendums, dated January 6, 2009, April 16, 2009, December 15, 2009,January 1, 2011

Affirmation

Lessor hereby represents and affirms that:

1. The Leases are in full force and effect, as amended by Addendums.

2. The Addendums were intended to apply to and amend each of the Leases.

3. No event of default exists, or, to the knowledge of Lessor, any event which with the giving of notice, would be anevent of default.

4. Leasee is entitled to the benefits under the Leases.

IN WITNESS WHEREOF, this Affirmation has been executed and delivered by the undersigned as of the date first abovewritten.

Lessor: Meany Land & Exploration, Inc. By: /s/ E. Michael Meany Its: President

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Exhibit 10.10

HYDROCARBON AND MINERAL LEASE AFFIRMATION

This Lease Affirmation is made and entered into as of this 6th day of May, 2011, by and between the William G. Gibbs(“Lessor”) and GreenRiver Resources, Inc. a Utah corporation, with respect to the Lease Agreement (“Lease”) attached hereto asExhibit A hereto.

Whereas, Lessor and Lessee executed and entered into the attached Lease in October of 2009; Whereas, Lessor and Lessee are unable to locate the original signed Lease;

Whereas, by this Lease Affirmation Lessor and Lessee hereby affirm that the Lease was executed in October 2009 and

remains in full force and effect;

NOW THEREFORE, it is hereby agreed and affirmed as follows:

l. The Lease is hereby affirmed, and Lessor and Lessee hereby agree and represent that it is was duly signed and notarizedin October of 2009.

2. Lessor and Lessee further acknowledge that the rent due and payable under the Lease has been, and will continue to bedeferred until Lessee raises a minimum of $1 million, at which time the outstanding amounts under the Lease will be dueand payable.

3. The Lease is in full force and effect, and there are no defaultsthereunder.

In witness whereof, this Lease Affirmation has been executed and delivered by the undersigned as of the date first above

written.

1



This Lease is made and entered into as of the day of October, 2009, by and between the parties listed on Exhibit A hereto,with respect to the interests described therein, as the Lessor, hereinafter referred to as “Lessor”, and GreenRiver Resources, Inc., acorporation organized under the laws of the State of Utah, hereinafter referred to as “Lessee”.

SECTION ONE

TERM AND PURPOSE

(a) Grant of Lease. Lessor, in consideration of the rents and royalties to be paid and the covenants and conditions to be keptand performed by Lessee as provided for in this instrument, leases to Lessee the land, hydrocarbon and mineral interests in CarbonCounty, Utah, more particularly described in Exhibit A to this Lease (the “Premises”), for the purpose of exploring for, extracting,mining, taking out, and removing by any mining or extraction method, including open-pit mining and strip-mining, the merchantabletar sand, bitumen, oil and other hydrocarbon products (collectively, “Oil Products”), together with any by-products derived in theprocess of extracting the foregoing products therefrom (including, but not limited to, sand, gravel, timber, gold, titanium, silver andother minerals) which are, or which subsequently may be found on, in, or under the land. Together with the right to: (1) make allexcavations or drilling; (2) construct on the Premises all buildings, extraction and separation facilities, openings, ditches, drains,railroads, roads, pipelines, power facilities, tanks and other improvements that are or may become suitable or necessary for themining and removal, and/or separation and extraction, of the products from the Premises; and (3) cut and use the timber on thePremises, as may be necessary for the usual purposes of the mining operations and for Lessee's own fuel; Lessee to exercisereasonable care to clear up and remove all combustible debris to prevent any fires.

(b) Term. It is agreed that this Lease shall remain in force for a primary term of six (6) years from this date (the “primary term”)

and if Lessee shall commence mining of Oil Products within the primary term or any extension of it, Lessee shall have the right tocontinue mining and the term shall extend subsequently as long as Oil Products are continuously produced in commercial quantities(Oil Products in amounts sufficient to produce 500 barrels of oil per day, on average) by Lessee from the Premises, provided,however, that production may be discontinued or interrupted if such interruption is due to the inability of the Lessee to operate themine or facilities on a commercially reasonable basis due to temperatures, weather or snow-pack during the winter months.

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SECTION TWO


Lessee may install engines and machinery, build roads, pipelines and rail tracks, and do such other things on the Premisesas may be necessary or proper to carry on the mining operations. Lessee shall have the right to use, free of cost, gas, oil, and waterproduced on the land for Lessee's operation on the land. Lessee shall have the right at any time up to 180 days after the terminationof this Lease to remove all machinery and fixtures placed on the Premises. The mining of the Oil Products by Lessee shall be done ina manner as is usual and customary in mining operations of similar character. Lessee shall comply with all government regulations inits mining operations. Lessee shall not remove or impair any roads, tracts, ditches, or improvements of a permanent nature made byLessee after the termination of this Lease.

SECTION THREE

RENT AND ROYALTY

(a) Royalties. Lessee shall pay to Lessor a Production Royalty on Net Returns from the sale of Oil Products. For purposes ofthis Agreement, the term "Production Royalty on Net Returns" means an amount equal to 10% of the Market Value of Minerals soldby Lessee, less the following, to the extent and only to the extent that they are incurred by Lessee prior to sale by Lessee of the OilProducts: Operating Costs,Transportation Costs, Processing Costs, Value Added Costs and Extraction Taxes (collectively referred toherein as "Costs and Taxes"). The term "Operating Costs" means expenses and costs actually incurred for the extraction of the OilProducts from the ground and mining and handling of the Oil Products, including maintenance and repairs to equipment anddepreciation, but excluding reclamation expenses. The term"Transportation Costs" means the expenses and charges actuallyincurred in transporting Oil Products, or their derivatives, from the mine to the refinery or other place of processing and/or sale. Suchcosts shall include, but not be limited to, wages, rent, freight, shipment insurance, handling, port, delay, demurrage, lighterage, tug,forwarding costs, and transportation and taxes. The term "Processing Costs" means the expenses and costs actually incurred forseparating, processing or other benefication of the Oil Products, including maintenance and repairs to equipment and depreciation.The term "Value Added Costs" means the expenses and costs actually incurred in upgrading the Oil Products for sale, including,refining, cracking, distillation, or by mixing or combining the Oil Products, or any of them, with reagents or other materials, minerals,chemicals, compounds, hydrocarbons or other substances of any kind or nature to achieve the products or goods which are then soldby Lessee, including maintenance and repairs to equipment and depreciation. The term "Extraction Taxes" means sales, use, grossreceipts, ad valorem, severance and other taxes due and payable in respect to severance,production, removal, sale or disposition ofthe Oil Products, but excluding any taxes on net income. Oil Products shall be deemed sold at the time the money is actuallyreceived by Lessee unless transferred by Lessee to an affiliate. The price received for the Oil Products sold in an "arms lengthtransaction" shall be presumed to be "Market Value" unless rebutted by a preponderance of the evidence. For purpose of thisparagraph, "arm's length transaction" means a transaction that has been arrived at in the market place between independent,nonaffiliated persons with opposing economic interests regarding that transaction.

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(b) Payment of Royalties. Calculations and payments of the royalty shall be made quarterly, on the 15th day of each January,April, July, and October in each year, commencing on the quarterly date following the first full or partial quarter in which Oil Productshave been mined and extracted and sold from the Premises. If the calculation of Net Returns from the sale of Oil Products for anycalendar quarter results in a negative number, no production royalty shall be payable with respect to that calendar quarter, but suchnegative number shall not be used to offset Net Returns from the sale of Oil Products for any future calendar quarter Payments shallbe made to each Lessor at the address or addresses set forth on the signature page hereof, or as otherwise directed by a Lessor inwriting. Lessee shall, on a quarterly basis and in conjunction with each quarterly royalty payment, transmit to Lessor an accuratestatement of the amount of Oil Products removed and sold during the quarter for which royalties are paid, and the amount of Costsand Taxes. The refinery receipts shall be prima facie evidence of the amounts so sold during each quarter. Lessor may inspect andreview the refinery receipts upon request at reasonable times. Any errors shall be corrected accordingly. Lessor shall at all times havea lien on all Oil Products mined, and on all improvements made, on the Premises as security for any unpaid balance of rents,royalties, or taxes due and payable.

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(c) Bonus and Rent. Beginning January 1, 2009, and annually thereafter, as rent under this Lease, Lessee shall pay to Lessorthe amount of $7,965. Any lawsuit against development of the property shall toll any termination right on the part of Lessor, so longas Lessee is diligently pursuing the lawsuit. Rent due hereunder shall be excused for any year as to which the royalties paidhereunder for the prior year exceed the rental amount.

(d) Apportionment of Royalties and Rents. (1) The stated amounts of royalties to be paid by Lessee hereunder are basedupon a 100-percent interest in and to the mineral estate as to all of the Premises. If any party comprising Lessor owns less than theinterest in all of the Premises described in the preceding sentence, all royalty payments to be made by Lessee to such partyhereunder shall be reduced in the same proportion thereof as the interest of such party in the Premises bears to the interestdescribed for such party in the preceding sentence. (2) The stated amounts of rents to be paid by Lessee hereunder are based uponthe undivided interests in the mineral estate as to all of the Premises stated to be owned by each party comprising Lessor as set forthin Exhibit A attached hereto. If any party comprising Lessor owns less than the interest in all of the Premises described in thepreceding sentence for such party, all rent payments to be made by Lessee to such party hereunder shall be reduced in the sameproportion thereof as the interest of such party in the Premises bears to the interest described for such party in the precedingsentence.

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SECTION FOUR

TERM EXTENSION

If mining of Oil Products is not commenced on the land on or before the 6th anniversary of the commencement date of this

Lease in commercial quantities (Oil Products in amounts sufficient to produce 500 barrels of oil per day, on average, provided,however, that production may be discontinued or interrupted if such interruption is due to the inability of the Lessee to operate themine or facilities on a commercially reasonable basis due to temperatures, weather or snow-pack during the winter months), thisLease shall terminate as to both parties, unless the failure to commence operations is excused by the force majeure provisions ofSection 14(e) below, in which case the term of this Lease shall be extended in accordance with the provisions of said Section 14(e)..

SECTION FIVE


Lessee agrees to expend or cause to be expended during the term of this Lease, a minimum of $150,000 per year on thedevelopment of the Premises, until commercial production of Oil Products (Oil Products in amounts sufficient to produce 500 barrelsof oil per day, on average, provided, however, that production may be discontinued or interrupted if such interruption is due to theinability of the Lessee to operate the mine or facilities on a commercially reasonable basis due to temperatures, weather or snow-packduring the winter months) is reached. For this purpose, the following expenditures would qualify: expenditures on prospecting andsearching for or production of Oil Products on, in or under the property, drilling, examining, measuring and sampling the deposit ofbitumen, when found, to gain knowledge of its size, shape, position and characteristics to determine the value thereof, research,engineering, test work, feasibility studies and other development and construction work directly benefiting the property, workperformed on mineral lands contiguous to the property, legal fees, engineering and consulting fees and salaries and other expensesrelating to Lessee’s personnel directly involved in the project and all other similar activity or work performed with respect to theproperty or its development, and fees and expenditures on other projects which benefit the Sunnyside project or reduce theexpenditures which would otherwise be incurred in connection with the Sunnyside project. All expenditures for exploration anddevelopment in excess of the respective minimums required in each year shall be applied to the exploration commitment described inthe next succeeding year or years.

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SECTION SIX

PROPERTY TAXES

Lessee shall pay promptly before delinquency all property taxes and assessments, that may be levied or assessed during theterm of this Lease upon the Premises. All such taxes for the year in which this Lease terminates shall be prorated between Lessorand Lessee, except that neither Lessor nor Lessee shall be responsible for the payment of any taxes which are based uponproduction from the Premises accruing solely to the other party. Lessee shall have the right to contest, in the courts or otherwise, inits own name or in the name of Lessor, the validity or amount of any such taxes or assessments, if it deems the same unlawful,unjust, unequal or excessive, or to take such other steps or proceedings as it may deem necessary to secure a cancellation,reduction, readjustment or equalization thereof, before it shall be required to pay the same. Lessee shall not permit or suffer thePremises or any part thereof to be conveyed, or title lost to Lessor, as the result of nonpayment of such taxes or assessments.Lessee shall upon request furnish to Lessor duplicate receipts for all such taxes and assessments when paid. Lessee shall not beliable for any taxes levied on or measured by income, or other taxes applicable to Lessor, based upon payments under this Lease.Nothing in the foregoing shall be construed to obligate Lessee to pay such portion of any tax as is based upon the value ofimprovements, structures or personal property made, placed and used on any part or parts of the Premises by or for Lessor or by anowner or lessee of surface rights other than Lessee after the date hereof. If Lessor receives tax bills or claims which are theresponsibility of Lessee hereunder, the same shall be promptly forwarded to Lessee for appropriate action.

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SECTION SEVEN

TERMINATION

(a) Termination by Lessor. In the event of any default by Lessee in the performance of its obligations hereunder, including allobligations to make payments of money to Lessor, Lessor shall give to Lessee written notice specifying the default. If (a) a defaultinvolving matters other than the payment of money to Lessor is not cured within sixty (60) days after Lessee has received the notice,or if Lessee has not within the time begun action to cure the default and does not diligently prosecute such action to completion, or (b)if a default involving the payment of money to Lessor is not cured within fifteen (15) business days after Lessee has received notice ofnon payment, Lessor may terminate this Lease by delivering to Lessee written notice of such termination, subject to Lessee’s right toremove its property and equipment from the Premises as hereinafter provided. Lessor shall have no right to terminate this Leaseexcept as set forth in this paragraph.

(b) Termination by Lessee. Lessee shall have the right, at any time, to terminate this Lease by giving 180 days' written noticeto Lessor, either in person or by mail addressed to Lessor at the address given in this Lease, and on payment of the rent, royalty andother sums as may be due, this Lease shall be deemed terminated. When this Lease terminates, regardless of the cause, Lesseeshall quietly and peacefully surrender possession of the Premises to Lessor or Lessor's agents, and Lessee shall enter, or cause tobe entered, a certificate of the termination of this Lease in the proper books of record in Carbon County, Utah, and record them, asmay be necessary to clear the record title and divest Lessee of all rights and title given or acquired under this Lease.

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SECTION EIGHT

MINING

(a) Mining Practices. All of Lessee’s operations hereunder shall be conducted in accordance with accepted practices of themineral industry, and in compliance with all applicable local, state and federal laws and regulations. It shall rest in the sole discretionof the Lessee whether and in what manner it shall mine, remove, transport, and deliver Oil Products to a processing plant or refineryfor physical, chemical or other treatment or shall treat the same in place. Whenever Lessee deems it necessary or advisable, Lesseemay discontinue or resume exploration, development, mining and production operations from time to time during the term hereof, solong as it meets its obligations hereunder.

(b) Adjacent Property Mining Activities. Lessee is hereby granted the right, if it so desires, to mine and remove Oil Products,

and such other materials as are incident thereto, from the Premises through or by means of shafts, openings or pits which may bemade in or upon adjoining property owned or controlled by Lessee, to the extent that Lessor can grant such rights. Lessee may, if itso desires, use the Premises and any shafts, openings and pits therein for the mining, removal, treatment and transportation of OilProducts and materials from adjoining property, or for any purpose connected therewith. In addition, the operations of Lessee uponthe Premises and upon any and all other adjoining lands to which Lessee has mining rights, may be conducted as a single miningoperation, to the same extent as if all such properties constituted a single tract of land. Nothing herein shall relieve Lessee from itsobligations for payments or reports as set forth in this Lease.

(c) Stockpiling. Lessee shall have the right, at any time during the term hereof, to stockpile any Oil Products or other materials

mined or produced from the Premises at such place or places as Lessee may elect, either upon the Premises or upon any otheradjoining lands owned or controlled by Lessee, its successors and assigns. The rights and liens of Lessor in and to any such OilProducts stockpiled on such other lands shall not be divested by the removal thereof from the Premises but shall be the same in allrespects as though such materials had been stockpiled on the Premises. The stockpiling of Oil Products from the Premises on suchother lands shall not be deemed a removal or shipment thereof requiring payment in respect of Lessor’s interest.

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(d) Treatment. Lessee shall have the right, but shall not be required, to process, separate, extract, beneficiate, concentrate,

smelt, refine, leach and otherwise treat, in any manner, any Oil Products and other materials mined or produced from the Premisesand from other adjoining lands. Such treatment may be conducted wholly or in part at a plant or plants established or maintained onthe Premises or on such other lands. The tailings and residue from such treatment shall be deemed waste and may be deposited onthe Premises or on such other lands. Lessor shall have no right, title or interest in said tailings or residue; provided, however, that anysaid tailings or residue remaining on the Premises or on such other lands for a period of sixty (60) days after the date on which thisLease has expired, or has been terminated by Lessee as to all of the Premises, shall be deemed abandoned by Lessee andthereupon may be claimed by Lessor, if and only if Lessor so elects. Nothing contained herein shall be construed to relieve Lesseefrom its responsibility for satisfaction of all obligations with respect to environmental protection laws, mined land reclamation laws orother applicable federal, state or local laws and regulations.

(e) Overburden Deposits. Waste, overburden, surface stripping and other materials from the Premises may be deposited on oroff the Premises, to the extent Lessor can grant such right and subject to all applicable local, state and federal laws and regulations.Such materials from other adjoining lands may be deposited on the Premises only if the same will not interfere with mining or oil andgas operations on the Premises.

(e) Inspection Rights of Lessor. Lessor reserves to itself and its agents the right, at any time, to enter the Premises or any partof it, to inspect and survey the Premises, and to measure the quantity of Oil Products that may be in or on the Premises or that shallhave been mined or removed from the Premises, without unnecessarily or unreasonably hindering or interrupting the work oroperations of Lessee.

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SECTION NINE

RECORDS

Lessee shall keep books of account, in accordance with generally accepted accounting principles, consistently applied,showing the amount of Oil Products shipped and sold, and the amount of money received from the sale of the Oil Products. Thebooks of account shall be open at all reasonable times to Lessor and its representatives. Lessor or its authorized agents shall have aright to audit and inspect Lessee’s accounts and records to verify the calculation of the payments to Lessor hereunder, which rightmay be exercised as to each payment at any reasonable time during a period of two (2) years from and after the date on which thepayment was made by Lessee. If no such audit is performed during such period, such accounts, records and payments shall bedeemed to be true, accurate and correct.

SECTION TEN

EFFECT OF AGREEMENT


SECTION ELEVEN


Royalties and rents provided for in this Lease shall be subject to proportionate reduction in accordance with the provisions ofSection 3(d) above.

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SECTION TWELVE

DIVIDED INTERESTS

If the Premises are now or later shall be owned in severalty or in separate tracts, the Premises, nevertheless, shall bedeveloped and operated as one lease and all royalties accruing under this Lease shall be treated as an entirety and shall be dividedamong and paid to such separate owners in the proportion that the acreage owned by each separate owner bears to the entire leasedacreage. If, however, the Premises consist of two or more non-abutting tracts, this section shall apply separately to each non-abuttingtract, and if a portion of the Premises is later consolidated with other lands for the purpose of operating the consolidated tract as onelease, this section shall be inoperative as to the portion so consolidated.

SECTION THIRTEEN

WARRANTY OF TITLE

Each of the parties comprising Lessor, to the extent and only to the extent of the ownership interest set forth for that party onExhibit A attached hereto, warrants and agrees to defend the title to the lands described in this Lease against burdens and claimsarising by, through or under such party, but not otherwise. Lessor agrees that Lessee shall have the right at any time to redeem, forLessor, by payment of any mortgage, taxes, or other liens on the lands in the event of default of payment by Lessor, and besubrogated to the rights of the holder, and Lessor, on behalf of Lessor and the heirs, successors, and assigns of Lessor, surrendersand releases all rights of dower and homestead in the Premises described in this Lease, insofar as the right of dower and homesteadmay in any way affect the purposes for which this Lease is made.

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SECTION FOURTEEN

GENERAL CONDITIONS

(a) Attorneys' Fees. If Lessor or Lessee shall commence an action against the other arising out of or in connection with thisLease, the prevailing party shall be entitled to recover its costs of suit and reasonable attorneys’ fees.

(b) Notices. All notices and demands, which may or are to be required or permitted to be given hereunder shall be in writing.All notices and demands shall be sent by receipted hand delivery, by confirmed facsimile, by United States mail, postage prepaid, orby an express delivery service which maintains records of deliveries, freight prepaid, addressed to Lessor or Lessee, at the addressor addresses set forth on the signature page hereof.

(c) Indemnity. Each party shall hold harmless, reimburse, indemnify, and defend the other party from and against any and alllosses, injury, obligations, claims, damages, judgments, and injuries of any nature resulting from, arising out of, or related in anyrespect to the falsity or inaccuracy of any representation or warranty made by the indemnifying party and/or obligations arising underor in connection with this, including without limitation reasonable attorneys’ fees, costs, and expenses of any nature incurred as aresult of or related to such false or inaccurate representations and/or warranties.


(e) Force Majeure. Lessee shall not be liable for failure to perform any of its obligations hereunder (except for payments whichhave become due to Lessor) during periods in which performance is prevented by any cause reasonably beyond Lessee’s control(except for payments of money), which causes hereinafter are called “force majeure”. For purposes of this Lease, the term “forcemajeure” shall include, but shall not be limited to, fires, floods, windstorms and other damage from the elements, strikes, riots, actionof governmental authority, litigation, acts of God and acts of the public enemy. The performance by Lessee of its obligationshereunder shall be suspended, and the duration of this Lease shall be extended, for a period equal to the period for whichperformance is reasonably suspended by reason of force majeure. All periods of force majeure shall be deemed to begin at the timeLessee stops performance hereunder by reason of force majeure. Lessee shall notify Lessor of the beginning and ending date ofeach such period.

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(f) Paragraph Headings. The paragraph headings as to the contents of particular paragraphs herein are inserted only forconvenience and are in no way to be construed as part of such paragraph or as a limitation on the scope of the particular paragraphto which they refer.

(g) Assignment; Change of Ownership. Lessee and Lessor may sell, convey, assign or transfer their rights and interests in thisLease in whole or in part without the prior written consent of the other party; provided that the assignor assumes all obligations of therespective party, in writing, and furnishes a copy of such assignment to the Lessee or Lessor, as the case may be. However, no suchassignment shall operate to relieve the assignor of any liability or obligation under this Lease which arose prior to such assignment. Inaddition, no change of ownership of the Premises shall be binding upon Lessee, whether Lessee has actual or constructiveknowledge of such change of ownership, until thirty (30) days after Lessee shall have been furnished by certified or registered UnitedStates mail at Lessee’s office address as set out herein with a certified copy of the recorded instrument or instruments satisfactory inthe opinion of Lessee to evidence such change of ownership and to establish the right, title or interest of the claiming party and theextent thereof.

(h) Benefit of Agreement; Recording. The covenants and agreements contained in the within Lease shall apply to, inure to thebenefit of, and be binding upon the parties hereto and upon their respective successors in interest and legal representatives, subjectto the restrictions contained herein on assignments. If requested by Lessee or Lessor, the parties hereto shall execute amemorandum or short recording counterpart of this Lease, which counterpart shall be in a form sufficient to constitute notice of thisLease to third parties under the laws of the state in which the Premises are located, but which counterpart shall not contain theamounts or rates of payment hereunder, or other terms of this Lease which Lessee or Lessor may elect not to disclose of record. Theexecution and recording of the above recording counterpart shall not limit, decrease or increase, or in any manner affect, any of theterms of this Lease, or any rights, interests or obligations of the parties hereto.

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(i) No Interruption of Operations. Disputes or differences between the parties hereto shall not interrupt performance of thisLease or the continuation of operations hereunder unless a continuation of operations would cause irreparable harm to the Lessor. Inthe event of any dispute or difference, and subject to the foregoing, operations may be continued, and settlements and payments maybe made hereunder in the same manner as prior to such dispute or difference, until the matters in dispute have been finallydetermined between the parties, and thereupon such payments or restitutions shall bemade as may be required under the terms of the settlement or final determination of the dispute.

(j) Waiver. The failure of a party to insist upon strict performance of any of the terms, covenants, conditions or agreements

contained herein shall not be deemed a waiver of any rights or remedies that said party may have, and shall not be deemed a waiverof any subsequent breach or default in the performance of any of the terms, covenants, conditions or agreements contained herein.


__________________________Notary Public

Residing at: (SEAL) My commission expires ____, 200 _ Lessee: GreenRiver Resources, Inc. By: _____________________ Its: _____________________

STATE OF UTAH

COUNTY OF SALT LAKE

The foregoing instrument was acknowledged before me this ____ day of _____________, 2009 by William G. Gibbs, known tome to be the person described in and who executed the within and foregoing instrument acknowledged to me that he executed thesame.

_______________________________

Notary Public Residing at: (SEAL) My commission expires _________, 200_

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EXHIBIT A

Legal Description and Ownership Interests LAND DESCRIPTION:

Township 14 South, Range 14 East, SLM Section 3: SW/4Section 10: E/2, NW/4

Containing 640.00 acres, more or less OWNERSHIP INTERESTS:

William G. Gibbs - undivided 5-percent ownership of mineral estate.

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Material marked with an asterisk has been omitted from this documentpursuant to a request for confidential treatment and has been filed separatelywith the Securities and Exchange Commission.

Exhibit 10.12

LICENSE, DEVELOPMENT AND ENGINEERING AGREEMENT

THIS LICENSE, DEVELOPMENT AND ENGINEERING AGREEMENT (“Agreement”) is made and entered into as ofJanuary 1, 2012 (the “Effective Date”) by and between UNIVERSAL OIL RECOVERY CORP ("UOR"), SRS INTERNATIONAL(“SRS”) and AMERICAN SANDS ENERGY CORP (“ASEC”) (hereinafter referred to individually as a “Party” and collectively as the“Parties”).

RECITALS

A.WHEREAS, UOR owns the exclusive trade-secret and know-how rights to make, use and sell a proprietary Solvent (the “UORSolvent”), and has contracted with SRS to design and build a proprietary solids/liquids separation and solvent recovery facility.

B.WHEREAS, SRS has confirmed the effectiveness of the UOR Solvent to extract bitumen from tar sands and oil sands underlaboratory test and demonstration protocols, with an efficiency exceeding 99%, and are confident in their design of a scaled-up,250-ton per hour (6,000 tons of tar sand ore per day), low-impact, low-energy, continuous-flow, rock/sand/soil-cleaning andbitumen-recovery process (the “UOR Process”) that:

a. Uses low-temperature heat to operate more cost-effectively

b. Consumes no local water supplies already stressed by regional drought

c. Produces no liquid-waste or tailing ponds

d. Requires no special modification equipment (like other prior art solvents and oil extraction processes previouslyoffered to SRS over the years by other solvent vendors competitive to UOR).

C.WHEREAS, SRS has designed and built a mobile, one-ton-per-hour, Oil Separation and Solvent Recovery Machine (the “SRSMachine”) that, in conjunction with the UOR Solvent, will demonstrate the feasibility and efficiency of the UOR Process, and iswilling to demonstrate the UOR Process to prospective investors, customers and government regulators in the tar sands and oilsands businesses.

D.WHEREAS, ASEC owns real estate property or mining leases in the State of Utah that contain mineable tar sands (the “UtahProperty”), and is desirous of engaging UOR and SRS to provide comprehensive tar sand solids/liquid separation consulting,equipment design, Solvent formulation, testing and process demonstration services to ASEC.

E.WHEREAS, UOR, SRS and ASEC are desirous of entering into this Agreement whereby UOR/SRS will provide the UOR Solvent

and SRS Machine to demonstrate the processing of ASEC-provided Tar Sands materials from ASEC’s Utah Property, and basedon a successful demonstration, to design and construct a larger facility that will process approximately 6,000 tons of tar sand oreper day, with additional capacity added based on the success of such facility.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this

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Agreement, the parties agrees as follows:

1. PURPOSE AND DEFINITIONS

(a) Purpose of this Agreement. This Agreement is entered into for the purpose of ASEC developing tar sands oil sands andoil shale using certain technology licensed hereunder.

(b) Definitions.

“3000 BPD Facility” shall have the meaning set forth in Section 6.1(a).

“ ASEC Input Materials” has the meaning set forth in Section 2.

“Confidential Information” means information (i) disclosed in tangible form that is clearly marked or identified asconfidential or proprietary at the time of disclosure or (ii) disclosed in non-tangible form, identified as confidential orproprietary at the time of disclosure, and summarized sufficiently for identification and designated as confidential in a writtenmemorandum sent to the receiving Party within thirty (30) days after disclosure. Confidential Information includes, withoutlimitation, the Licensed Technology including business, financial or technical data, machine-readable or interpretedinformation, information contained in physical components, mask works or artworks, or combinations of publicly availableinformation that are not publicly available in such combined form. .

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the managementand policies of a person, whether through ownership of voting securities, through the right or power to appoint a majority ofthe board of directors, by being the general (or managing) partner or controlling the general (or managing) partner, bycontract or trust instrument, or otherwise, and “Controlled” has a corresponding meaning.

“Definitive Agreement” means an agreement providing for the terms and conditions of utilization of the LicensedTechnology in connection with project(s) involving a third party which satisfy (or will satisfy) the Criteria set forth in Section 4.(a), whether or not such projects are formed as of the date of such Definitive Agreement.

“Designated Party” shall have the meaning set forth in Section 4 (a).

“Designated Project” shall have the meaning set forth in Section 4 (a).

“Designated Property” or “Property” shall have the meaning set forth in Section 4 (a).

“Intellectual Property Rights” means all patents and patent rights (including design patents, patents pending andtechnology covered by a patent application), copyrights and copyright registrations and trade secrets.

“Invention(s)” or “invention(s)” means any idea, design, concept, technique, invention, discovery or improvement,whether or not patentable.

“License Term” is defined in Section 6.

“Licensed Technology” means the methods and processes through which bitumen, kerogen or other oil products areseparated or extracted from matter or substances typically referred to as tar sands, oil sands or oil shale through the use ofchemicals, and it includes all aspects which are part of or ancillary to such methods and/or processes such as equipment orcatalyst, as developed by or on behalf of UOR or SRS, together with any modifications, improvements, enhancements orderivatives in respect of thereto.

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“Products” means any and all products, including water, sand, bitumen, kerogen, oil, and heavy metals, if any,that are extracted and recovered using the UOR Process and offered for sale.

“SRS Machine” has the meaning set forth in paragraph C of the Recitals.

“Territory” means (i) the State of Utah, and (ii) any geographic area owned, licensed or to which a third party hasrights to develop oil sands, tar sands or oil shale, if such project is a Designated Project in accordance with Section 4.

“UOR Process” has the meaning set forth in paragraph B of the Recitals.

“UOR SOLVENT” means a proprietary solvent developed by UOR that extracts bitumen from tar sands and oil sands underlaboratory tests and demonstration protocols, on a 99+% efficiency basis, and that works as a part of and in combination withthe SRS Machine, the 3000 BPD Facility and with other facilities designed using the Licensed Technology.

2. DEMONSTRATION OF SRS MACHINE AND UOR PROCESS AND SOLVENT

UOR will operate the SRS Machine for demonstration of the UOR Process for third party investors and customers of ASEC,beginning on March 12, 2012, who are desirous of evaluating the UOR Process on ASEC’s own or other parties’ Tar Sands or OilSands materials (the “ASEC Input Material”) to be processed through the SRS Machine at a demonstration rate of approximately 1-ton per hour:

2.1 ASEC OBLIGATIONS

(a) ASEC shall supply a minimum of 10-tons of the tar sand ore chosen by ASEC to be tested and processed throughthe SRS Machine, including copies of all laboratory tests and geological information regarding the chemical and elementalmake-up of the ASEC Input Materials currently in ASEC’s possession. It is anticipated that ASEC may have UOR/SRS run upto 250 tons of tar sand ore through the SRS Machine during the 30 day test phase. ASEC will retain title to the oil, sand andwater products of the separation process, of which UOR will be allowed to retain samples of adequate size for detailedtesting.

(b) ASEC will supply the ASEC Input Materials to UOR at the location designated by it on a date mutually agreed .

(c) ASEC shall pay to UOR an equipment rental fee of $*, which will secure demonstration/operation of the SRS Machine andURS Process for a consecutive 30 day period beginning *. The fee shall be paid as follows:

1. $* on signing of this Agreement

2. $* on February 1, 2012

3 . $* on acceptance of the SRS Machine as set forth in Appendix A1.9 hereof.

(d) Beginning *, ASEC will pay UOR an Operational Fee of $25,000 per month, such fee to cover UOR’s costs forUOR Solvent preparation, solvent blending, optimization, handling, testing and staff costs, for ASEC and in connection withany lab work or testing requested by * (with respect to *, only through the demonstration period set forth above)

(e) ASEC shall make available, at its cost, its engineering and other personnel, to collaborate in the design and testing of theSRS Machine and UOR Process based on the most current design of the SRS Machine being completed for testing inMarch, 2012.

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2.2 UOR/SRS OBLIGATIONS. UOR or SRS, as the case may be, shall provide to ASEC as follows:

(a) SRS will design, build and locate the SRS Machine in accordance with the requirements set forth in Exhibit A, which isincorporated herein by reference.

(b) UOR shall conduct independent laboratory testing of ASEC’s Input Materials to generate a baseline for “before”and “after” comparisons of the water, bitumen, sand and other solids materials expected to be produced by the SRS Machinedemonstration. Based on independent laboratory confirmation of the make-up of ASEC Input Materials, UOR shall improve,customize or finalize formulation of the UOR Solvent chosen by UOR for mixing with the ASEC Input Materials.

(c) UOR shall conduct a thorough testing of ASEC’s Input Materials being mixed with the UOR Solvent, so as toestablish a baseline for separation of the water (if any), sand and bitumen materials under ideal lab conditions.

(d) UOR will provide to ASEC digital copies of all relevant laboratory test data for inclusion in Computer Modelsshared by UOR and ASEC to simulate and optimize the UOR bitumen-extraction process for scaled-up design and operation.

(e) UOR will provide ASEC access to the SRS Machine and share with ASEC personnel all designs, drawings,specifications, formulations and other engineering information with respect to the SRS Machine, UOR Solvent and UORProcess.

(f) UOR/SRS will use best efforts to commence operation and demonstration of the SRS Machine for third partyinvestors and potential customers of ASEC on *. The start-up and operating times shall be mutually agreed between ASEC,UOR and SRS, but at ASEC’s request shall be for and up to 24 hours of continuous operation per day during the test period.

(g) UOR shall be responsible for obtaining all permits required to operate the SRS Machine.

(h) UOR/SRS shall share all test results and data from such separation of the ASEC Input Materials into itsconstituent water (if any), bitumen and sand materials.

(i) UOR shall allow ASEC to invite its personnel and invitees in person to see the SRS Machine operate as it extractsoil or bitumen from the ASEC Input Materials provided by ASEC, and shall allow ASEC, and its designees on a case-by-casebasis (upon becoming a Designated Party or Property and signing appropriate confidentiality agreements), to:

i. take videos of the SRS Machine for promotionalpurposes

ii. receive copies of any and all test results and operational data from use of the SRS Machine to confirm the cost-efficiency of the Machine and recovery of the UOR Solvent.

iii. take sufficient samples of cleaned sand recovered from the ASEC Input Materials by the UOR Process and SRSMachine for independent testing by ASEC or its designees.

4



iv. take sufficient samples of Bitumenrecovered from the ASEC InputMaterials by the UOR Process andSRS Machine for independent testingby ASEC or its designees.

v. take sufficient samples of Solvent post cleaned sand and post Bitumen recovery to analyze for contaminants and

degradation versus the pure solvent by the UOR Process and SRS Machine for independent testing by ASEC or itsdesignees.

(j) The operation of the SRS Machine will not knowingly be in violation of any statute, rule, regulation, decision

or order of any governmental agency or body or any court, relating to the use, disposal or release ofhazardous or toxic substances or relating to the protection or restoration of the environment or humanexposure to hazardous or toxic substances.

(k) Upon execution of this Agreement, UOR will make available to the COO/Chief Technology Officer of ASEC(currently Robin Gereluk), the Licensed Technology, the results and details of any and all computer simulations anddesign calculations performed by SRS/UOR on the Licensed Technology, and the design, engineering and otherspecifications and drawings of the SRS Machine, subject to Mr. Gereluk agreeing to be bound by the confidentialityprovisions of this Agreement. * Notwithstanding the foregoing, ASEC is agreed that all sub-licenses or agreements ofany kind with a Designated Party or any third party will stipulate that neither party will have any right to know or havedisclosed to it the chemical formulation and components of the UOR Solvent, and that such information is a tradesecret, confidential and proprietary to UOR.

3. TECHNOLOGY LICENSE

(a) License Grant. In consideration of the payments made under paragraphs 2.1(c) and 2.1(d) and subject to the termsand conditions herein, UOR and SRS, as the case may be, hereby grants to ASEC, and ASEC accepts, (i) anexclusive, nontransferable license to use the Licensed Technology during the License Term in the Territory, toproduce, treat and otherwise develop bitumen, kerogen and other oil products from oil sands, tar sands and oil shale,and (ii) to act as UOR’s “Authorized Agent” in representing the UOR Technology and business opportunities toprospective investors and tar sands, oil sands and oil shale property owners and lessees.

(b) Limitations on Use.

i. The Licensed Technology shall be used by ASEC only within the scope of the License Grant in Section3(a).

ii. The Licensed Technology may only be separately or independently licensed or sublicensed by ASEC to a thirdparty in accordance with Section 4.

(c) No Other Rights. No other rights are granted hereunder, by implication, estoppel, statute or otherwise, except asexpressly provided herein.

(d) No Offer for Sale. ASEC hereby acknowledges and agrees that at no time has the Licensed Technology beenoffered for sale to ASEC.

5


4. DESIGNATED PROJECT

(a) Each project which satisfies the following criteria is a “Designated Project”, and becomes part of the Territoryhereunder:

(i) the project must satisfy either of the following:

(A) With respect to the development of a property by ASEC or in which ASEC will participate(“Designated Property”), ASEC must designate to UOR the property or properties to be developed(“Property”), together with the other parties involved, if any, such designation to include;

(1) The name of the party, in the case of a Property being developed with a third party;

(2) The location of the property/project, with a description of the foregoing to include location,type of hydrocarbon extracted, and general scope of the project; or

(B) With respect to the licensing or sub-licensing of the Licensed Technology, UOR Process and/orUOR Solvent to a third party (“Designated Party”), ASEC shall designate to UOR:

(1) The name of the party.

(2) The proposed location of the property/project, with a description of the foregoing toinclude location, type of hydrocarbon extracted, and general scope of the project.

(ii) UOR does not have a pre-existing relationship with the Designated Party. If UOR has a pre-existingrelationship with a Designated Party, it will notify ASEC within three (3) business days from receipt of the designationnotice of such relationship.; and

(iii) ASEC and the Designated Party enter into a Definitive Agreement with respect to the Designated Projectwithin 120 days from the date of the designation notice received by UOR, unless extended by mutual agreement.

(collectively subparagraphs (a)(i)-(iii) above are herein referred to as the “Criteria”)

(iv) The foregoing Criteria must be satisfied as of the date of the notice.

(b) From and after the Determination Date in respect of a Designated Project, ASEC shall not lose any rights, or berequired to transfer, convey or otherwise divest itself of any right or interest, in respect of such Designated Project solely byvirtue of the fact that the Criteria may cease to be satisfied in respect of such Designated Project in question, after the noticedate; provided that at the time the Definitive Agreements are signed with respect to such Designated Project, ASEC and/orthe Designated Party have the financial ability/strength to develop such Project. Upon request, ASEC shall provide to UOR itsfinancing plans or financial statements for a Designated Property, or the financial statements of a Designated Party, whichshall show reasonable likelihood, in each respective case, of the Designated Project to be financed.

6



(c) In connection with any Designated Projectunder this Section 4, ASEC shall pay licenseand royalty fees to UOR with respect to such Designated Project as follows:

(i) In connection with a Designated Project where ASEC licenses/sub-licenses the Licensed Technology to aDesignated Party and receives license and royalty fees, * percent (*%) of the amounts so received by ASEC, toinclude the following;

(A) *(B) *(C) *

(ii) The Designated Project Royalty shall be a minimum of $* per year.

(iii) ASEC will use its best efforts to negotiate with each Designated Party for the highest possible Royaltypayments

(vi) ASEC acknowledges that as a condition of becoming a Designated Project or entering into a sub-Licensing arrangement with a Designated Party, such Designated Project or Party must purchase the UORSolvent from UOR at UOR’s delivered cost, *. However, if UOR is not able to procure said solvents, it willmake available to ASEC the solvent names and it will work to source said material from non-North Americansources.

(vi) In connection with a Designated Property where ASEC is jointly developing the project, whether as anequity partner, shareholder, joint venturer or co-owner, ASEC or the operator of such Designated Project,ASEC shall pay*.

(e) Calculations and payments of Designated Project Royalties shall be made as of the end of each calendar quarter,and shall be payable, on the 15th day of each January, April, July, and October in each year, commencing on the quarterlydate following the first full or partial quarter in which Products have been sold. If the calculation of any Royalty from the saleof Products for any calendar quarter results in a negative number, no production royalty shall be payable with respect to thatcalendar quarter. Payments shall be made to UOR at the address or addresses set forth on the signature page hereof, or asotherwise directed by UOR in writing. ASEC shall, on a quarterly basis and in conjunction with each quarterly royaltypayment, transmit to UOR an accurate statement of the amount of Products sold during the quarter for which Royalties arepaid, and the amount of transportation and taxes. The customer receipts shall be prima facie evidence of the amounts so soldduring each quarter. UOR may inspect and review the customer receipts upon request at reasonable times.

(f) The price received for the Products sold in an "arm’s length transaction" shall be presumed to be "Market Value"unless rebutted by a preponderance of the evidence. For purpose of this paragraph, "arm's length transaction" means atransaction that has been arrived at in the market place between independent, non-affiliated persons with opposing economicinterests regarding that transaction. In addition to the Royalty described above,

(g) Within ninety days of the end of each fiscal year of ASEC, ASEC shall reconcile the amounts paid in Royalty with

amounts shown as due in accordance with its audited financial statements. Any over payment shall be deducted from thenext Royalty Payment due; any under payment will be paid with the next Royalty payment due.

7


5. DURATION

The License Term will begin on January 1, 2012 and shall continue for a period of twenty years and so long thereafter asproduction of products using the Licensed Technology is commercially and economically feasible, unless sooner terminated underSection 8.

6. ENGINEERING AND DEVELOPMENT OF SCALED UP SYSTEM

6.1 Engineering. Upon successful demonstration of the SRS Machine and UOR Process as set forth above, and acceptanceof such demonstration by ASEC, the Parties shall enter into a Project Development Agreement with the following general terms;

(a) UOR and SRS shall provide such engineering support to ASEC as reasonably necessary to assist ASEC in its efforts toimplement the Licensed Technology for the design, engineering, construction and operation of a facility to fulfill the License Grant andas reasonably necessary to assist ASEC in its efforts to achieve its objectives of commercially viable volume separation and/orextraction of such hydrocarbons, to the extent possible. It is anticipated that initial scale up shall be to a plant that will process up to6,000 tons per day of tar sand ore (“3,000 BPD Facility”), similar to the ASEC Input Materials. UOR and SRS will provide technicalsupport for the Licensed Technology in the development and implementation of such facility.

(b) In order to facilitate the design, engineering and implementation of the 3,000 BPD Facility, UOR, SRS and ASEC shall form anengineering committee (the "Engineering Committee") to coordinate the activities of the parties under this Agreement. TheEngineering Committee will be comprised of two members, one of whom shall representative UOR and SRS and one of whom shallrepresent of ASEC. Each Party shall use reasonable efforts to assure that its representatives so authorized to act on its behalf arepresent for all meetings of the Engineering Committee.

(c) The Engineering Committee shall be responsible for the design, engineering, construction, cost, budget schedulesand development of the 3,000 BPD Facility (“Facility Plan”);

(d) The Facility Plan will be submitted for review and approval by ASEC;

(e) UOR and SRS will use commercially reasonable efforts to modify the Licensed Technology, at the request ofASEC, to fulfill the License Grant.

(f) Upon successful completion and operation of the 3,000 BPD Facility, the parties agree to work together, asprovided above with respect to the 3,000 BPD Facility, to design and construct a facility capable of processing up to 100,000tons per day of tar sand ore (50,000 BPD Facility), or such other amount as may be reasonably agreed to by the parties.

(g) In connection with a Designated Project as set forth above, UOR and SRS agree to perform such services, as setforth above, in connection with such Project, with such additions or changes as may be mutually agreed to at the time ofdesignation or at the time a definitive agreement is entered into with respect to such project.

6.2 Special Services. UOR and SRS shall prepare specific technical information or data for ASEC, as reasonably requestedby ASEC, including analysis of the separation characteristics of the sand from the bitumen in tar sands and the kerogen from theshale in oil shale.

6.3 Time and Materials . It is agreed that in respect of any work or services performed by UOR and SRS for or on behalf ofASEC pursuant to Section 6.1 and as agreed between such parties as set forth in Section 6.1 (a), (collectively “Services”), UORand/or SRS, as the case may be, shall be entitled to be paid, by ASEC, the following amounts:

8



(a) Management and Overhead Fee:

A fee of $* per month shall be paid for eachDesignated Project to cover management consultingand overheads until such time as UOR receives Designated License Fees or Royalty Payments pursuant to Section 4 above;provided however, that the $* fee set forth in 2.1 (d) above with respect to * will be deemed to satisfy the payments required underthis paragraph. Payment of such fees will commence at the time the Criteria are satisfied and the Designation notice is received byUOR.

(b) In respect of labor; For each individual who performs any of the Services, an amount equal to the number of hoursspent by that individual multiplied by the hourly labor rate applicable to such individual as set forth on a rate-sheet delivered by UORand/or SRS to ASEC, plus 20%, prior to agreement of the parties as to UOR and/or SRS’s performance of the Services in question,specifying the hourly labor rates for each individual who is contemplated to assist in performing such Services.

(c) In respect of all tools, equipment, parts, accessories and other materials and subcontract labor purchasedspecifically in order to perform or carry-out any of the Services (herein referred to as “Materials”); An amount equal to the cost of theMaterials plus an additional 20% of such cost.

(d) In respect of out-of-pocket costs; ASEC shall pay UOR and SRS, in respect of all third-party costs and expensesreasonably incurred thereby and necessary in connection with the performance of the Services (hereinafter “Expenses”), an amountequal to the cost paid by UOR and/or SRS in respect of such Expenses

(e) UOR and SRS shall endeavor to keep the facilities and other equipment purchased under this Agreement and thehydrocarbons under Lease free from liens and encumbrances that might arise by reason of the activities or operations conductedunder this Agreement. If a lien is placed on the Leases, facilities, other equipment, or any hydrocarbons by a third-party undercontract with UOR and SRS, then UOR and SRS shall make reasonable efforts, at its cost, to remove the lien. However, if a lien ismade by a third-party under a contract with ASEC to which UOR or SRS is not a party, then ASEC shall make reasonable efforts, atits cost, to remove the lien and to remove UOR and SRS as a Party in or to any such action.

6.5 Records. UOR and SRS shall keep accurate books, accounts, and records of all costs, expenses, activities andoperations under this Agreement in compliance with GAAP. Unless otherwise provided in this Agreement, all records shall beavailable to ASEC at all reasonable times during normal office hours. UOR and SRS shall use good-faith efforts to ensure thesettlements, billings, and reports rendered under this Agreement are complete and accurate.

7. OWNERSHIP

7.1 Ownership of the Licensed Technology. To the best of their knowledge, UOR and SRS have all necessary rights toperform their obligations hereunder, including but not limited to Intellectual Property Rights in and to the Licensed Technology, and intrade-secrets, know-how, ideas, techniques, procedures and concepts embodied therein. To the best of UOR’s and SRS’s knowledge,the Licensed Technology does not infringe or otherwise impair or conflict with (collectively, "Infringe") the intellectual property rights ofany third party or any confidentiality obligation owed to a third party. To the best of UOR’s and SRS’s knowledge, there is no litigationor order pending or outstanding or, threatened or imminent, that seeks to limit or challenge or that concerns the ownership, use,validity or enforceability of the Licensed Technology and there is no valid basis for the same.

7.2 Ownership of Modifications. All improvements and modifications to the Licensed Technology shall remain the sole andabsolute property of UOR and SRS. ASEC does not obtain any rights, title or interests, including but not limited to intellectual propertyrights, in the Licensed Technology, other than the license conferred herein. Any equipment or other ideas not comprising theLicensed Technology shall be the property of ASEC.

9


8. TERMINATION

8.1 Termination. A Party may terminate the rights and licenses granted to the other Party under this Agreement upon sixty(60) days written notice of termination to the other Party given at any time upon or after:

(a) the filing by the other Party of a petition in bankruptcy or insolvency not dismissed within ninety (90) days of thefiling;

(b) any adjudication that the other Party is bankrupt or insolvent;

(c) the filing by the other Party of any petition or answer seeking reorganization, readjustment or arrangement of itsbusiness under any law relating to bankruptcy or insolvency;

(d) the appointment of a receiver for all or substantially all of the property of the other Party;

(e) the making by the other Party of any assignment for the benefit of creditors;

(f) the institution of any proceedings for the liquidation or winding up of the other Party’s business or for thetermination of its corporate charter not dismissed within ninety (90) days of the institution of the proceedings; or

(g) by UOR, if ASEC shall not have used commercially reasonable efforts to permit and develop tar and oil sandprojects in the Territory, and does not commence such efforts within thirty (30) days of receiving written notice

(h) by ASEC, if UOR or SRS is in breach of any of their obligations hereunder, or are unable to perform theirobligations hereunder; provided that this Agreement may be terminated with respect to the Engineering Services to bedelivered by SRS separately, and the License of the Licensed Technology by UOR shall continue.

(i) by ASEC, if in its sole discretion deems the demonstration set forth in Section 2 unsuccessful.

8.2 Returning Confidential Information. All materials containing Confidential Information of the other Party shall bereturned to that Party within thirty (30) days after termination of this Agreement.

8.3 Survival. The provisions of Sections 8, 9, 10 and 11 shall survive any termination of this Agreement.

9. CONFIDENTIAL INFORMATION

9.1 Restrictions. Each Party shall hold in confidence, and shall use solely for purposes of or as provided in this Agreement,any Confidential Information received by it from the other or derived from Confidential Information received from the other, and shallprotect the confidentiality of such with the same degree of care that it exercises with respect to its own information of like import, butin no event less than reasonable care. For the purpose of this Agreement, Confidential Information shall include business, financial ortechnical data, machine-readable or interpreted information, information contained in physical components, mask works or artworks,or combinations of publicly available information that are not publicly available in such combined form. .

9.2 Exceptions. The obligations of Section 8.1 shall not apply to any portion of the Confidential information which:

10


(a) is now or which hereafter through no act or failure to act on the part of the receiving Party becomes generally

known.

(b) is hereafter furnished to the receiving Party by a third party without obligation to keep such informationconfidential;

(c) is independently developed by the receiving Party without the use of the Confidential Information;

(d) is required to be disclosed pursuant to a legal, judicial or administrative procedure or otherwise required by law;providing the disclosing Party gives the other Party notice of the proposed disclosure with sufficient time to seek relief;

(e) is already in the possession of, or known to, the receiving Party prior to its receipt; or

(f) is approved for release or use without restriction by written authorization of an officer of the disclosing Party.

Subject to the requirements of Sections 9.1 hereof, a receiving Party may disclose appropriate portions of Confidential Information,with written permission from the other Party, to its employees and consultants who have a need to know the specific information inquestion, auditors, lenders and regulators having a legitimate need or right to know, and which have agreed to be bound by theobligations of confidentiality herein, or by separate agreement with equal or greater restrictions, in which event the receiving Party willmake a reasonable effort to minimize the amount of information disclosed and to cause such persons to maintain the confidentiality ofthe information disclosed.

9.3 Injunction. Confidential Information has been and will continue to be of central importance to the business of a disclosingParty, and its disclosure to or use by others will cause immediate and irreparable injury to the disclosing Party, which may not beadequately compensated by damages and for which there is no adequate remedy at law. In the event of any actual or threatenedmisappropriation or disclosure of Confidential Information, the receiving Party agrees that the disclosing Party will be entitled to aninjunction prohibiting such misappropriation or disclosure, and to specific enforcement of the receiving Party’s obligations hereunder.The foregoing rights to an injunction and specific performance will be cumulative and in addition to every other remedy now orhereafter available to disclosing Party in law or equity or by statute.

10. INTELLECTUAL PROPERTY RIGHTS INDEMNITY

(a) UOR and SRS will defend ASEC from any third party action brought against ASEC to the extent based on a claim that theLicensed Technology, or any part thereof, infringe, misappropriate or otherwise violate any Intellectual Property Right which is thesubject of a governmental grant, license or registration or is similarly recognized or perfected under applicable law (but not pending,unregistered, “common law” or otherwise inchoate rights) provided the claimant has given ASEC a reasonable period to time, not lessthan 180 days, in which to address or cure any purported infringement or violation, and will pay any costs, damages and reasonableattorneys’ fees attributable to such claim that are ultimately awarded against ASEC. ASEC will (i) promptly notify UOR and SRS inwriting of the claim, (ii) grant UOR and SRS control of the defense and settlement of the claim, provided that ASEC has reasonablyapproved defense counsel and any settlement and (iii) provide UOR and SRS with all reasonable assistance, information andauthority required for the defense and settlement of the claim.

(b) ASEC will defend UOR and SRS from any third party action brought against ASEC to the extent based on a claim fortrespass, or with respect to any claim regarding mineral rights, property rights or other claims relating to the development of theproperties, other than claims for which ASEC is indemnified pursuant to section 10 (a).

11



(c) Section 10 (a) does not apply to a claimdue to misapplication of the Licensed Technology by ASEC, by a Designated Party or by any party introduced by ASEC to theLicensed Technology, or to the extent attributable to use of the Licensed Technology, or part thereof, in combination with third partytechnology, where use of the Licensed Technology, or part thereof, alone is not infringing.

11. REPRESENTATIONS AND WARRANTIES

11.1 Representations and warranties of UOR and SRS. UOR and SRS each represents and warrants that:

(a) Each is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of itsincorporation and has all requisite corporate power and authority to carry on its business as now conducted and to own its properties.

(b) Each has full power and authority and has taken all requisite action on its part necessary for (i) the authorization,execution and delivery of this Agreement and (ii) the authorization of the performance of all obligations hereunder. This Agreementconstitutes the legal, valid and binding obligation of each of UOR and SRS, enforceable in accordance with its terms, subject tobankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affectingcreditors' rights generally.

(c) The execution, delivery and performance of this Agreement does not require the consent of, action by or in respect of, orfiling with, any person, governmental body, agency, or official

(d) The execution, delivery and performance hereof will not conflict with or result in a breach or violation of any of the termsand provisions of, or constitute a default under (i) its Certificate of Incorporation or Bylaws, both as in effect on the date hereof or (ii)(a) any statute, rule, regulation, order or judgment of any governmental agency or body or any court, domestic or foreign, havingjurisdiction over UOR or SRS or any of their respective assets or properties, or (b) any agreement or instrument to which either is aparty or by which either is bound or to which any of their respective assets or properties is subject.

(e) With respect to the UOR Solvent:

*

11.2 Representation and Warranties of ASEC. ASEC represents and warrants that:

(a) It is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporationand has all requisite corporate power and authority to carry on its business as now conducted and to own its properties.

(b) It has full power and authority and has taken all requisite action on its part necessary for (i) the authorization, executionand delivery of this Agreement and (ii) the authorization of the performance of all obligations hereunder. This Agreement constitutesthe legal, valid and binding obligation of ASEC, enforceable in accordance with its terms, subject to bankruptcy, insolvency,fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors' rightsgenerally.

(c) The execution, delivery and performance of this Agreement does not require the consent of, action by or in respect of, orfiling with, any person, governmental body, agency, or official.

(d) The execution, delivery and performance hereof will not conflict with or result in a breach or violation of any of the termsand provisions of, or constitute a default under (i) its Certificate of Incorporation or Bylaws, both as in effect on the date hereof or (ii)(a) any statute, rule, regulation, order or judgment of any governmental agency or body or any court, domestic or foreign, havingjurisdiction over ASEC or any of their respective assets or properties, or (b) any agreement or instrument to which either is a party orby which either is bound or to which any of their respective assets or properties is subject.

12


12. GENERAL

12.1 Choice of Law. This Agreement is made under and shall be governed by and construed in accordance with the laws ofthe State of Utah, United States of America (except that body of law controlling conflict of laws) and specifically excluding fromapplication to this Agreement that law known as the United Nations Conventions on the International Sale of Goods.

12.2 Counterparts. This agreement may be executed in one or more counterparts, each of which will be deemed an original,but all of which constitute but one and the same instrument.

12.3 Entire Agreement. This Agreement, including all Attachments hereto, constitutes the entire agreement between theparties with respect to the subject matter hereof, and supersedes and replaces all prior or contemporaneous understandings oragreements, written or oral, regarding such subject matter, but expressly excluding agreements pertaining to the nondisclosure orconfidentiality of information. This Agreement will be fairly interpreted in accordance with its terms and without any strict constructionin favor or against either Party. Unless otherwise provided herein, this Agreement may not be modified, amended, rescinded, orwaived, in whole or in part, except by a written instrument signed by the duly authorized representatives of both parties.

12.4 Headings. The headings and captions in this Agreement are used for convenience only and are not to be considered inconstruing or interpreting this Agreement.

12.5 Independent Contractor. UOR and SRS are each an independent contractor to ASEC. This Agreement will not bedeemed to create a partnership, joint venture or franchise, and neither Party is the other’s agent, partner, employee or representative,nor does a Party have any authority to bind the other Party to any obligation by contract or otherwise.

12.6 Notices. All notices required hereunder must be in writing and delivered either in person or by a means evidenced by adelivery receipt, to the addresses which follow or as otherwise notified in writing, and will be effective upon receipt:

To UOR: Universal Oil Recovery LLC26027 S. Nottingham Dr.Sun Lakes, AZ 85248Attn: Glenn McGinnis To SRS: SRS International______________________________Attn: George Hawranik

To ASEC: American Sands Energy Corp.4760 S. Highland Dr., #341Salt Lake City, UT 84117Attn: William Gibbs, President 12.7 No Rights in Third parties. This Agreement is made for the benefit of the Parties and not for the benefit of any third

parties unless otherwise agreed to by the Parties in writing.

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12.8 Relationship of the parties. No employees, consultants, contractors, or agents of one Party are agents, employees,

franchisees, or joint ventures of the other Party, nor do they have any authority to bind the other Party by contract or otherwise to anyobligation. No Party will represent to the contrary, either expressly, implicitly, or otherwise.

12.9 Severability. In the event that any part of this Agreement is found to be unenforceable, the remainder shall continue ineffect, to the extent consistent with the intent of the Parties as of the Effective Date.

12.10 Specific Performance. The Parties hereto agree that irreparable damage would occur in the event that any of theprovisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached. It is accordinglyagreed that any Party hereto shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforcespecifically the terms and provisions hereof, this being in addition to any other remedy to which they are entitled hereunder orotherwise.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives.

Universal Oil Recovery LLC AMERICAN SANDS ENERGY CORP. BY: /s/ Glenn McGinnis___________ BY: /s/ William C. Gibbs_________________NAME: Glenn McGinnis NAME: William C. Gibbs

TITLE: President TITLE: President

SRS INTERNATIONAL

By: /s/ George Hawranik

NAME: George Hawranik

TITLE:

14


Material marked with an asterisk has been omitted from this page pursuant to arequest for confidential treatment and has been filed separately with theSecurities and Exchange Commission.

APPENDIX A

ENGINEERING CRITERIA

A1.1 General Specifications of UOR System and SRS Machine to test ASEC’s Tar Sand Deposits.

*

A1.2 Processes Comprising the System.

*

A1.3 Main Components of System.

*

A1.4 Controls for System.

*

A1.5 Documentation in Connection with System.

*

A1.6 Additional Covenants by SRS. SRS hereby agrees:

*

A1.7 Commissioning of the System.

*

A1.8 Demonstration and Certification

*

A1.9 Acceptance of System.

* A1.11 SRS Guarantee.


*

15


A1.12 Non-Disclosure of Proprietary Information.

a) Unless legally required (i.e. Securities Laws and Regulations) or specific written permission is given by UOR, neither SRS

nor ASEC nor any of their respective shareholders, directors, officers, employees, agents, representatives, affiliates,and/or consultants shall disclose to any third party, person, or entity any information about this Agreement, about UOR,about ASEC or about the status, costs, technical design, specifications, purchaser of the SRS Machine or schedule ofwork being done on and for demonstration of the SRS Machine, System or Technology.

b) This Section does not apply to disclosures made to scientists, engineers, and/or other technical personnel (“Technical

Service Providers”) hired by SRS or UOR or ASEC with full knowledge of UOR in connection with the pursuit ofimprovements to the System, so long as all such Technical Service Providers are required to execute appropriatelyworded “work-for-hire” non-disclosure and confidentiality agreements that grant all intellectual property rights to UOR forany and all inventions or improvements developed by any consultants or employees paid directly or indirectly by UOR fordevelopment of its products.


Exhibit 10.13

TERMINATION AGREEMENT

This Termination Agreement (the “Agreement”) is entered into this 24th day of January 2012, by, between and among,Bleeding Rock LLC, a Utah limited liability company (“BR”), Green River Resources, Inc., a Utah corporation (“GRR”), andAmerican Sands Energy Corp., a Delaware corporation(“ASEC”).

RECITALS

WHEREAS, on or about May 31, 2005, GRR and BR entered into that certain Operating Agreement dated May 31, 2005, as

amended in 2007 pursuant to the Operating Agreement Addendum (the “Operating Agreement”) for the development, engineeringand extraction of hydrocarbons from tar sands from certain mining leases transferred to GRR under the terms of the OperatingAgreement and located in Sunnyside, Utah (the “Sunnyside Project”) using technology licensed to BR;

WHEREAS, prior to June 2011, GRR was a subsidiary of GreenRiver Resources Corp., a Canadian company which was

acquired by ASEC in June 2011, and is now a wholly owned subsidiary of ASEC;

WHEREAS, pursuant to the terms of the Operating Agreement, GRR was responsible for all costs incurred by BR in theperformance of its obligations under the agreement, including actual general and administrative expenses or a minimum of$300,000 per year;

WHEREAS, as of the date of this Agreement the accrued amount owed by GRR to BR pursuant to Section 3.4 of the

Operating Agreement is $1,446,551.00 (the “GRR Payable”), which BR is willing to convert into a convertible promissory notepayable by GRR or convertible into common stock of ASEC;

WHEREAS, simultaneous with the execution of this Agreement, ASEC is entering into a License, Development and

Engineering Agreement with Universal Oil Recovery Corp. and SRS International (the “License Agreement”), whereby such partiesshall grant to ASEC an exclusive, nontransferable license to use certain chemicals and methods and/or processes such asequipment or catalyst by which bitumen, kerogen or other oil products are separated or extracted from matter or substancestypically referred to as tar sands, oil sands or oil shale (the “Technology”);

WHEREAS, entering into the License Agreement is conditioned upon BR and GRR terminating the Operating Agreement,

which BR is willing to do provided that GRR and ASEC are willing to grant a royalty interest in future projects using the Technology,excluding the Sunnyside Project; and

WHEREAS, the parties have determined that it would be in the best interests of all the participants in the Sunnyside Project

for ASEC to enter into the License Agreement directly with the owners of the Technology and to terminate the existing OperatingAgreement in favor of the terms set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual terms and conditions set forth herein, and other good and valuable

consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Termination of Consulting Agreement. Pursuant to Section 4.1(a) of the Operating Agreement, each of BR and GRR herebyterminate the Operating Agreement which is of no further force or effect.


2. Grant of Royalty. Pursuant to the terms of the Gross Royalty Agreement between ASEC and BR, attached hereto as Exhibit A,which has been executed by the parties simultaneous with the execution of this Agreement, ASEC has granted to BR a royaltyinterest in future projects using the Technology excluding the Sunnyside Project.

3. Issuance of Promissory Note. Contemporaneous with the execution of this Agreement, the parties hereto have entered into thatcertain 5% Convertible Promissory Note attached hereto as Exhibit B in the principal amount of $1,446,551.00 and which satisfiesthe GRR Payable (the “GRR Note”). It is expressly understood by the parties that the obligation to repay the GRR Note is solely theobligation of GRR and ASEC shall have no obligation to repay the GRR Note and that the only obligation of ASEC is to issue sharesof its common stock upon conversion of the GRR Note as provided therein.

4. Releases.

4.1. Release by BR. In consideration of the benefits and payments provided and to be provided by ASEC and GRR herein,

and as a material inducement to ASEC and GRR to enter into this Agreement, BR hereby releases, acquits and forever dischargesASEC and GRR, its owners, stockholders, predecessors, successors, assigns, agents, directors, officers, employees,representatives, attorneys, divisions, subsidiaries, affiliates, and all persons acting by, through, under or in concert with any of them,from any and all charges, complaints, claims, controversies, demands, rights, disputes and causes of action of any naturewhatsoever, known or unknown, asserted or unasserted, accrued or not accrued, arising prior to or existing at the time of theexecution of this Agreement, which BR may have or claim to have against any of the persons or entities released regarding theOperating Agreement.

4.2. Release by ASEC and GRR. In consideration of the benefits provided by BR herein, and as a material inducement to

BR to enter into this Agreement, each of ASEC and GRR, jointly and severally, hereby releases, acquits and forever discharges BR,its owners, stockholders, predecessors, successors, assigns, agents, directors, officers, employees, representatives, attorneys,divisions, subsidiaries, affiliates, and all persons acting by, through, under or in concert with any of them, from any and all charges,complaints, claims, controversies, demands, rights, disputes and causes of action of any nature whatsoever, known or unknown,asserted or unasserted, accrued or not accrued, arising prior to or existing at the time of the execution of this Agreement, whichASEC or GRR may have or claim to have against any of the persons or entities released regarding the Operating Agreement.

5. Effective Date. The effective date of this Agreement shall be the date first written above (the “Effective Date”). 6. Representations and Warranties of BR.

6.1. Due Authorization. BR has full power and authority to enter into this Agreement and to consummate the transactions

contemplated hereby. The execution, delivery and performance by BR of this Agreement have been duly and validly approved andauthorized by all required authorization under its operating agreement, and no other actions or proceedings on the part of BR arenecessary to authorize this Agreement and the transactions contemplated hereby and thereby. BR has duly and validly executedand delivered this Agreement. This Agreement constitutes the legal, valid and binding obligation of BR, enforceable in accordancewith its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer, moratorium,reorganization or other laws from time to time in effect which affect creditors’ rights generally and by general principles of equity(regardless of whether such enforceability is considered in a proceeding in equity or at law).

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6.2 . Compliance. BR is not is in default under or in violation of (and no even has occurred that has not been waived that,with notice or lapse of time or both, would result in a default by BR under)the Operating Agreement.

6 .3 . Litigation. There are no actions, suits, arbitrations, regulatory proceedings or other litigation, proceedings or

governmental investigations pending or, to the knowledge of BR, threatened against BR or the licensor of the Technology relatingdirectly or indirectly to the Operating Agreement or the Technology.

7. Representations and Warranties of ASEC and GRR.

7.1. Due Authorization. Each of ASEC and GRR has full power and authority to enter into this Agreement and to

consummate the transactions contemplated hereby. The execution, delivery and performance by ASEC and GRR of this Agreementhave been duly and validly approved and authorized by the Board of Directors of each entity, and no other actions or proceedingson the part of ASEC and GRR are necessary to authorize this Agreement and the transactions contemplated hereby and thereby.ASEC and GRR have duly and validly executed and delivered this Agreement. This Agreement constitutes the legal, valid andbinding obligation of ASEC and GRR, enforceable in accordance with its terms, except as such enforceability may be limited byapplicable bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or other laws from time to time in effect whichaffect creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in aproceeding in equity or at law).

7.2. Compliance. Except for the payment of fees required pursuant to Section 3.4 of the Operating Agreement as provided

herein, neither ASEC nor GRR is in default under or in violation of (and no event has occurred that has not been waived that, withnotice or lapse of time or both, would result in a default by ASEC or GRR under) the Operating Agreement.

7 .3 . Litigation. There are no actions, suits, arbitrations, regulatory proceedings or other litigation, proceedings or

governmental investigations pending or, to the knowledge of either ASEC or GRR, threatened against ASEC or GRR relatingdirectly or indirectly to the Operating Agreement.

8. Miscellaneous.

8.1. Notices. All notices, deliveries, consents, waivers, requests, instructions, or other communications required or permitted

hereunder shall be in writing, and shall be deemed to have been duly given if (a) delivered personally (effective upon delivery), (b)sent by a reputable, established national courier service (effective one business day after being delivered to such courier service),or (c) mailed by certified mail, return receipt requested, postage prepaid (effective three business days after being deposited in theU.S. mail), addressed as follows (or to such other address as the recipient may have furnished for such purpose pursuant to thisSection):

If to BR:

2610 Hillsden DriveHolladay, UT 84117Attn: William C. Gibbs, Manager

and:

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If to ASEC and GRR:

4760 S. Highland Dr. Suite 341Salt Lake City, UT 84117Attn: William C. Gibbs, President with a copy (which shall not constitute notice) to: Ronald N. Vance, Attorney at LawThe Law Office of Ronald N. Vance & Associates, P.C.1656 Reunion AvenueSuite 250South Jordan, Utah 84095

or to such other individual or address as a party hereto may designate for itself by notice given as herein provided.

8.2. Arbitration.

(a) Scope and Administration of Arbitration. Any controversy or claim arising out of or relating to this Agreement, or

the breach thereof, shall be settled by arbitration administered by the American Arbitration Association (the “AAA”) in accordancewith its Commercial or other Arbitration Rules, including the Optional Rules for Emergency Measures of Protection, and judgmenton the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

(b) Venue. The place of arbitration shall be Salt Lake City, Utah.

(c) Choice of Law. The arbitrators are to interpret all controversies and claims arising under or relating to this

Agreement in accordance with the laws of the State of Utah, without regard to its choice of law principles. In rendering an award, thearbitrator is to determine the rights and obligations of the parties according to the substantive and procedural laws of the State ofUtah.

(d) Appointment of Arbitrators. Within 15 days after the commencement of arbitration, each party shall select one

person to act as arbitrator and the two selected shall select a third arbitrator within ten (10) days of their appointment. Thearbitrators will be selected from a panel of persons having experience with and knowledge of the subject matter of the Agreement,and at least one of the arbitrators selected will be an attorney or a retired judge. If the arbitrators selected by the parties are unableor fail to agree upon the third arbitrator, the third arbitrator shall be selected by the AAA.

(e) Injunctive Relief. Either party may apply to the arbitrator seeking injunctive relief until the arbitration award is

rendered or the controversy is otherwise resolved. Either party also may, without waiving any remedy under this agreement, seekfrom any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party,pending the establishment of the arbitral tribunal (or pending the arbitral tribunal’s determination of the merits of the controversy);provided that such interim or provisional relieve shall be sought solely by a court of competent jurisdiction located in the County ofSalt Lake, State of Utah, which court shall apply the choice of law provision of this Section 8.2.

(f) Costs and Fees. The arbitrators shall award to the prevailing party, if any, as determined by the arbitrators, all of

its costs and fees. “Costs and fees” mean all reasonable pre-award expenses of the arbitration, including the arbitrators’ fees,administrative fees, travel expenses, out-of-pocket expenses such as copying and telephone, court costs, witness fees, andattorneys’ fees

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(g) Reasoned Opinion. The award shall be in writing, shall be signed by a majority of the arbitrators, and shall

include a statement setting forth the reasons for the disposition of any claim.

(h) Right to Appeal. Within 30 days of receipt of any award (which shall not be binding if an appeal is taken), anyparty may notify the AAA of an intention to appeal to a second arbitral tribunal, constituted in the same manner as the initial tribunal.The appeal tribunal shall be entitled to adopt the initial award as its own, modify the initial award or substitute its own award for theinitial award. The appeal tribunal shall not modify or replace the initial award except for clear errors of law or because of clear andconvincing factual errors. The award of the appeal tribunal shall be final and binding, and judgment may be entered by a courthaving jurisdiction thereof.

(i) Submission to Jurisdiction. Each party shall submit to any court of competent jurisdiction for purposes of the

enforcement of any award, order, or judgment. Any award, order, or judgment pursuant to arbitration is final and may be enteredand enforced in any court of competent jurisdiction.

8.3. Expenses. Except as otherwise expressly provided herein, each party hereto shall bear its own expenses with respect

to this Agreement and the transactions contemplated hereby.

8.4. Survival of Representations and Warranties. All covenants, representations and warranties made herein shall survivethe making of this Agreement and shall continue in full force and effect for a period of one (1) year from the Effective Date, at theend of which period no claim may be made with respect to any such covenant, representation, or warranty unless such claim shallhave been asserted in writing to the indemnifying party during such period.

8.5. Waivers. The failure of a party hereto at any time or times to require performance of any provision hereof shall in no

manner affect the right of such party at a later time to enforce the same. No waiver by a party of any condition or of any breach ofany term, covenant, representation or warranty contained in this Agreement shall be effective unless in writing, and no waiver in anyone or more instances shall be deemed to be a further or continuing waiver of any such condition or breach in other instances or awaiver of any other condition or breach of any other term, covenant, representation or warranty.

8.6. Interpretation. The headings preceding the text of Sections and Paragraphs included in this Agreement are for

convenience only and shall not be deemed part of this Agreement or be given any effect in interpreting this Agreement. The use ofthe masculine, feminine or neuter gender herein shall not limit any provision of this Agreement. The use of the terms “including” or“include” shall in all cases herein mean “including, without limitation” or “include, without limitation,” respectively.

8.7. Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective

successors and assigns; provided, however, that no assignment of any rights or obligations shall be made by any party without theprior written consent of all the other parties hereto.

8.8. No Third Party Beneficiaries. This Agreement is solely for the benefit of the parties hereto and, to the extent provided

herein, their respective directors, officers, employees, agents and representatives, and no provision of this Agreement shall bedeemed to confer upon other third parties any remedy, claim, liability, reimbursement, cause of action or other right.

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8.9. Further Assurances. Upon the reasonable request of any party hereto, the other party or parties hereto shall, on andafter the date of this Agreement, execute and deliver such other documents, releases, assignments and other instruments as maybe required to effectuate completely the transactions contemplated by this Agreement.

8.10. Severabilitv. If any provision of this Agreement shall be held invalid, illegal or unenforceable, the validity, legality or

enforceability of the other provisions hereof shall remain in full force and shall not be affected thereby, and there shall be deemedsubstituted for such invalid, illegal or unenforceable provision a valid, legal and enforceable provision as similar as possible to theprovision at issue.

8.11. Entire Understanding. This Agreement sets forth the entire agreement and understanding of the parties hereto and

supersedes all prior agreements, letters of intent, arrangements and understandings between the parties.

8.12. Exhibits and Schedules. Each of the exhibits, schedules, or similar attachments referenced in this Agreement isannexed hereto and is incorporated herein by this reference and expressly made a part hereof.

8.13. Countemarts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of

which together shall constitute one and the same instrument. Facsimile transmissions of any signed original document, ortransmission of any signed facsimile document, shall constitute delivery of an executed original. At the request of any of the parties,the parties shall confirm facsimile transmission signatures by signing and delivering an original document.

IN WITNESS WHEREOF, each of the parties has executed this Termination Agreement the respective dayand year set forth below:

Bleeding Rock LLC Date: January ____, 2012 By: /s/ William C. Gibbs William C. Gibbs, Manager American Sands Energy Corp. By: /s/ William C. Gibbs Date: January ____, 2012 William C. Gibbs, President Green River Resources, Inc. By: /s/ William C. Gibbs

Date: January ____, 2012 William C. Gibbs, President

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EXHIBIT 10.14

GROSS ROYALTY AGREEMENT

This Gross Royalty Agreement (the “Agreement”) is entered into this 24th day of January 2012, by and between BleedingRock LLC, a Utah limited liability company (“BR”), and American Sands Energy Corp., a Delaware corporation (“ASEC”).

RECITALS

WHEREAS, on this date ASEC has entered into that certain License, Development and Engineering Agreement withUniversal Oil Recovery Corp. and SRS International (the “License Agreement”);

WHEREAS, also on this date ASEC and BR have entered into that certain Termination Agreement (the “Termination

Agreement”) whereby the prior Operating Agreement between Green River Resources, Inc., a Utah corporation, and BR wasterminated;

WHEREAS, as part of the consideration for BR entering into the Termination Agreement, ASEC has agreed to grant BR the

royalty provided for in this agreement (the “Royalty”);

NOW, THEREFORE, in consideration of the mutual terms and conditions set forth herein, and other good and valuableconsideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. Grant of Royalty. ASEC shall pay to BR a royalty equal to one and one-half percent (1.5%) of the gross receipts (as definedbelow) for each Designated Project (as defined in the License Agreement and hereinafter a “Designated Project”) except for theSunnyside Project (as defined in the Termination Agreement and hereinafter the “Sunnyside Project”). For purposes of thisAgreement, “Gross Receipts” shall mean the receipt of all cash and non-cash proceeds by ASEC from any Designated Project,except the Sunnyside Project (hereinafter “Gross Receipts”).

2. Statements and Payments.

2.1 Royalty Statements. ASEC shall deliver to BR on or before the forty-fifth (45th) day following the end of each calendar

quarter during the term of this Agreement and on the thirtieth (30th) day of the month following termination or expiration of thisAgreement, a complete and accurate statement (the “Royalty Statement”) of Gross Receipts generated by ASEC from DesignatedProjects (excluding the Sunnyside Project) for the immediately preceding calendar quarter, or portion thereof, during the term of thisAgreement (the “Royalty Period”). The Royalty Statement shall be certified as accurate by an officer of ASEC and shall includeinformation as to the location of the Designated Project, the name of the party, in the case the project being developed is with athird party, the payment terms under the license or sublicense for the project, the amount of Gross Receipts from the project, theamount of Royalty due, and any other information BR may from time to time reasonably request. The Royalty Statement shall befurnished to BR whether or not revenues from any Designated Project have been received, and whether or not royalties have beenearned by BR, during the Royalty Period. Royalty Statements shall be in a form reasonably acceptable to BR.

2.2 Payment of Royalty Fees. The amount shown in each Royalty Statement as being due BR shall be paid simultaneously

with the submission of the Royalty Statement. ASEC’s Royalty Statements and all amounts payable to BR by ASEC shall besubmitted by check to the address of BR as provided in this Agreement or wire transfer or such other means as BR may direct.


2.3 Corrections to Royalty Statements. The receipt and/or acceptance by BR of any of the Royalty Statements furnished or

royalties paid hereunder to BR (or the cashing of any royalty checks paid hereunder) shall not preclude BR from questioning thecorrectness of the statement or the amounts paid; provided that ASEC is notified in writing within ten (10) days following the givingof the Royalty Statement by ASEC or receipt of the royalty payment by BR, whichever shall be later. In the event that anyinconsistencies or mistakes are discovered in the Royalty Statements or payments, and ASEC is duly notified, they shallimmediately be rectified by ASEC and the appropriate payment shall be made by ASEC. In the event ASEC shall discover amistake resulting in an overpayment in any Royalty Statement, it shall be allowed to offset such amount in the next RoyaltyStatement and payment made to BR.

2.4 Payments in U.S. Funds. All payments made hereunder shall be in United States dollars drawn on a United States

bank, unless otherwise specifically agreed upon by the parties.

2.5 Time is of the Essence. Time is of the essence with respect to all payments to be made hereunder by ASEC. Interest ata rate of five percent (5%) per annum shall accrue on any amount due BR hereunder from and after the date upon which thepayment is due until the date of receipt of payment.

3. Audit.

3.1 Accurate Books and Records. ASEC agrees to keep accurate books of account and records at its principal place of

business covering all transactions relating to the License Agreement and pertaining to the items required to be shown in ASEC’sRoyalty Statements to be submitted pursuant hereto, including without limitation, invoices, correspondence, banking, financial, andother records. BR and its duly authorized representatives shall have the right, upon five (5) days’ written notice, during normalbusiness hours, to audit ASEC’s books of account and records, and all other documents and material in the possession or under thecontrol of ASEC, with respect to the subject matter and the terms of this Agreement and to make copies and extracts thereof. In theevent that any such audit reveals an underpayment by ASEC, ASEC shall within thirty (30) days written notice remit payment to BRin the amount of such underpayment, plus interest calculated at the rate of five percent (5%) per annum, from the date suchpayment(s) were actually due until the date such payment is actually made. In the event that any such underpayment is greaterthan Twenty-Five Thousand Dollars ($25,000), ASEC shall reimburse BR for the costs and expenses of such audit. In the eventsuch audit shall reveal a mistake resulting in an overpayment in any royalty payment, ASEC shall be allowed to offset such amountin the next Royalty Statement and payment made to BR. Following such an audit, any disagreement by either party in the amountowed shall be resolved by arbitration as set forth in Section * hereof.

3.2 Return of Books and Records. All books of account and records of ASEC covering all transactions relating to the Royalty

granted herein shall be retained by ASEC for at least one (1) year after the expiration or termination of this Agreement for possibleinspection by BR.

4. Miscellaneous.

4.1. Notices. All notices, deliveries, consents, waivers, requests, instructions, or other communications required or permitted

hereunder shall be in writing, and shall be deemed to have been duly given if (a) delivered personally (effective upon delivery), (b)sent by a reputable, established national courier service (effective one business day after being delivered to such courier service),or (c) mailed by certified mail, return receipt requested, postage prepaid (effective three business days after being deposited in theU.S. mail), addressed as follows (or to such other address as the recipient may have furnished for such purpose pursuant to thisSection):

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If to BR:

2610 Hillsden DriveHolladay, UT 84117Attn: William Gibbs, Manager

and:

If to ASEC: 4760 S. Highland Dr. Suite 341Salt Lake City, UT 84117Attn: William C. Gibbs, President with a copy (which shall not constitute notice) to: Ronald N. Vance, Attorney at LawThe Law Office of Ronald N. Vance & Associates, P.C.1656 Reunion AvenueSuite 250South Jordan, UT 84095

or to such other individual or address as a party hereto may designate for itself by notice given as herein provided.

4.2. Arbitration.

(a) Scope and Administration of Arbitration. Any controversy or claim arising out of or relating to this Agreement, or

the breach thereof, shall be settled by arbitration administered by the American Arbitration Association (the “AAA”) in accordancewith its Commercial or other Arbitration Rules, including the Optional Rules for Emergency Measures of Protection, and judgmenton the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

(b) Venue. The place of arbitration shall be Salt Lake City, Utah.

(c) Choice of Law. The arbitrators are to interpret all controversies and claims arising under or relating to this

Agreement in accordance with the laws of the State of Utah, without regard to its choice of law principles. In rendering an award, thearbitrator is to determine the rights and obligations of the parties according to the substantive and procedural laws of the State ofUtah.

(d) Appointment of Arbitrators. Within 15 days after the commencement of arbitration, each party shall select one

person to act as arbitrator and the two selected shall select a third arbitrator within ten (10) days of their appointment. Thearbitrators will be selected from a panel of persons having experience with and knowledge of the subject matter of the Agreement,and at least one of the arbitrators selected will be an attorney or a retired judge. If the arbitrators selected by the parties are unableor fail to agree upon the third arbitrator, the third arbitrator shall be selected by the AAA.

(e) Injunctive Relief. Either party may apply to the arbitrator seeking injunctive relief until the arbitration award is

rendered or the controversy is otherwise resolved. Either party also may, without waiving any remedy under this agreement, seekfrom any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party,pending the establishment of the arbitral tribunal (or pending the arbitral tribunal’s determination of the merits of the controversy);provided that such interim or provisional relieve shall be sought solely by a court of competent jurisdiction located in the County ofSalt Lake, State of Utah, which court shall apply the choice of law provision of this Section 4.2.

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(f) Costs and Fees. The arbitrators shall award to the prevailing party, if any, as determined by the arbitrators, all of

its costs and fees. “Costs and fees” mean all reasonable pre-award expenses of the arbitration, including the arbitrators’ fees,administrative fees, travel expenses, out-of-pocket expenses such as copying and telephone, court costs, witness fees, andattorneys’ fees.

(g) Reasoned Opinion. The award shall be in writing, shall be signed by a majority of the arbitrators, and shall

include a statement setting forth the reasons for the disposition of any claim.

(h) Right to Appeal. Within 30 days of receipt of any award (which shall not be binding if an appeal is taken), anyparty may notify the AAA of an intention to appeal to a second arbitral tribunal, constituted in the same manner as the initial tribunal.The appeal tribunal shall be entitled to adopt the initial award as its own, modify the initial award or substitute its own award for theinitial award. The appeal tribunal shall not modify or replace the initial award except for clear errors of law or because of clear andconvincing factual errors. The award of the appeal tribunal shall be final and binding, and judgment may be entered by a courthaving jurisdiction thereof.

(i) Submission to Jurisdiction. Each party shall submit to any court of competent jurisdiction for purposes of the

enforcement of any award, order, or judgment. Any award, order, or judgment pursuant to arbitration is final and may be enteredand enforced in any court of competent jurisdiction.

4.3. Expenses. Except as otherwise expressly provided herein, each party hereto shall bear its own expenses with respect

to this Agreement and the transactions contemplated hereby.

4.4. Survival of Representations and Warranties. All covenants, representations and warranties made herein shall survivethe making of this Agreement and shall continue in full force and effect for a period of one (1) year from the Effective Date, at theend of which period no claim may be made with respect to any such covenant, representation, or warranty unless such claim shallhave been asserted in writing to the indemnifying party during such period.

4.5. Waivers. The failure of a party hereto at any time or times to require performance of any provision hereof shall in no

manner affect the right of such party at a later time to enforce the same. No waiver by a party of any condition or of any breach ofany term, covenant, representation or warranty contained in this Agreement shall be effective unless in writing, and no waiver in anyone or more instances shall be deemed to be a further or continuing waiver of any such condition or breach in other instances or awaiver of any other condition or breach of any other term, covenant, representation or warranty.

4.6. Interpretation. The headings preceding the text of Sections and Paragraphs included in this Agreement are for

convenience only and shall not be deemed part of this Agreement or be given any effect in interpreting this Agreement. The use ofthe masculine, feminine or neuter gender herein shall not limit any provision of this Agreement. The use of the terms “including” or“include” shall in all cases herein mean “including, without limitation” or “include, without limitation,” respectively.

4.7. Assignment. Subject to the compliance with state and federal securities laws, the Royalty may be assigned in whole or

in part by BR. Prior to due presentment for transfer or assignment of the Royalty or any part thereof, ASEC may treat BR or anyregistered assign as the absolute owner hereof (notwithstanding any notations of ownership or writing hereon made by anyoneother than a duly authorized officer of ASEC) for all purposes and shall not be affected by any notice to the contrary.

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4.8. No Third Party Beneficiaries. This Agreement is solely for the benefit of the parties hereto and, to the extent provided

herein, their respective directors, officers, employees, agents and representatives, and no provision of this Agreement shall bedeemed to confer upon other third parties any remedy, claim, liability, reimbursement, cause of action or other right.

4.9. Further Assurances. Upon the reasonable request of any party hereto, the other party or parties hereto shall, of and

after the date of this Agreement, execute and deliver such other documents, releases, assignments and other instruments as maybe required to effectuate completely the transactions contemplated by this Agreement.

4.10. Severability. If any provision of this Agreement shall be held invalid, illegal or unenforceable, the validity, legality or

enforceability of the other provisions hereof shall remain in full force and shall not be affected thereby, and there shall be deemedsubstituted for such invalid, illegal or unenforceable provision a valid, legal and enforceable provision as similar as possible to theprovision at issue.

4.11. Entire Understanding. This Agreement sets forth the entire agreement and understanding of the parties hereto and

supersedes all prior agreements, letters of intent, arrangements and understandings between the parties.

4.12. Exhibits and Schedules. Each of the exhibits, schedules, or similar attachments referenced in this Agreement isannexed hereto and is incorporated herein by this reference and expressly made a part hereto.

4.13. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all ofwhich together shall constitute one and the same instrument. Facsimile transmissions of any signed original document, ortransmission of any signed facsimile document, shall constitute delivery of executed original. At the request of any of the parties, theparties shall confirm signatures by signing and delivering an original document.

IN WITNESS WHEREOF, each of the parties has executed this Gross Royalty Agreement the respective day and year set

forth below: Bleeding Rock LLC Date January ____, 2012 By /s/ William C. Gibbs William C. Gibbs, Manager American Sands Energy Corp. Date January ____, 2012 By /s/ William C. Gibbs William C. Gibbs, President

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EXHIBIT 10.15

NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ORUNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT ANDMAY NOT BE TRANSFERRED OR SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCEUNDER THE ACT OR THE LAWS OF THE APPLICABLE STATE OR A “NO ACTION” OR INTERPRETIVE LETTER FROM THESECURITIES AND EXCHANGE COMMISSION OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THEISSUER, AND ITS COUNSEL, TO THE EFFECT THAT THE SALE OR TRANSFER IS EXEMPT FROM REGISTRATION UNDERTHE SECURITIES ACT AND SUCH STATE STATUTES.

GREEN RIVER RESOURCES, INC.

5% CONVERTIBLE PROMISSORY NOTE

Date: January 24, 2012 $1,446,551.00_

GREEN RIVER RESOURCES, INC., a corporation duly organized and existing under the laws of the State of Utah(hereinafter referred to as the “Maker”), for value received, hereby promises to pay to BLEEDING ROCK LLC, a Utah limited liabilitycompany or its registered assigns (each a “Note Holder”) at 2610 Hillsden Drive, Holladay, Utah 84117 the principal sum of OneMillion Four Hundred Forty-Six Thousand Five Hundred Fifty-One Dollars and No Cents ($1,446,551.00) in such lawful money of theUnited States of America as at the time of payment shall be legal tender for the payment of public and private debts, on the terms andat the time hereinafter provided.

This 5% Convertible Promissory Note (the “Note”) is subject to the further terms and provisions:

1. Payment and Interest. This Note shall be due and payable on or before one year from the date hereof (the “Maturity

Date”). The Maker shall pay to the Note Holder interest on the principal amount of this Note at the rate of five percent (5%) perannum from the date of this Note. Interest shall be due and payable on the Maturity Date.

2. Conversion. Subject to and in compliance with the provisions contained herein, the Note Holder is entitled, at his, her or

its option, at any time prior to the Maturity Date, or in case this Note or some portion hereof shall have been called for prepaymentprior to such date, then, in respect of this Note or such portion hereof, until and including, but not after, the close of business withinthirty (30) days of the date of notice of prepayment, to convert the original principal amount of this Note (or any portion thereof),together with accrued but unpaid interest thereon, into fully paid and nonassessable shares (calculated as to each conversion to thenearest share) of common stock (the “Shares”) of American Sands Energy Corp., a Delaware corporation and the parent of theMaker (“ASEC”), by surrender of this Note, duly endorsed (if so required by the Maker) at its offices, accompanied by written noticeto the Maker and ASEC, in the form set forth below, that the Note Holder selects to convert this Note or, if less than the entireprincipal amount hereof is to be converted, the portion hereof to be converted. Such conversion shall be effected at the rate of oneShare for each $0.50 of principal amount plus accrued and unpaid interest of this Note, all subject to such adjustment in suchconversion price, if any, as may be required by the provisions of this Note. No fractions of Shares will be issued on conversion, butinstead of any fractional interest, the Maker will pay cash adjustments as provided herein.

3. Prepayment. This Note is subject to prepayment, in whole or in part, at any time upon not less than thirty (30) days notice

by registered mail at the election of the Maker. Prepayment shall be effected by paying the amount equal to the outstandingprincipal amount of this Note, plus all interest accrued to the date of prepayment. During the thirty (30) days following the date ofany notice of prepayment, the Note Holder shall have the right to convert this Note into the common stock of the Maker, on theterms and conditions provided for in Paragraph 2 above.


4. Limitations on Right of Conversion. Following receipt of the written notice of intention to convert the Note, the Maker shall

take such steps as it deems appropriate to permit conversion of the Note as specified in the notice without registration orqualification under applicable federal and state securities laws; provided, that in no event shall the Maker be required to consent tothe general service of process or to qualify as a foreign corporation in any jurisdiction where the Note Holder resides if suchjurisdiction is different than such Note Holder’s residence when the Note was originally offered and sold. In order to comply withexemptions from the registration requirements of the Securities Act and certain state securities statutes, the Maker may require theNote Holder to make certain representations and execute and deliver to the Maker certain documents as a condition to exercise ofconversion rights hereunder, all in form and substance satisfactory to the Maker as determined in its sole discretion. In the event theMaker reasonably determines that the Note cannot be converted in compliance with applicable federal and state securities laws inthe absence of registration or qualification under such statutes, the Maker shall be under no obligation to permit conversion of theNote and issue any shares of common stock pursuant hereto. Notwithstanding the foregoing, the shares issuable on conversion inthe event of mandatory prepayment in connection with a public offering by the Maker shall be issued and delivered pursuant to aregistration statement under the Securities Act. The Maker shall also utilize its best efforts to qualify such Shares for sale under theapplicable state laws in those jurisdictions in which the Note Holder resides at the time of conversion. If, notwithstanding suchefforts to qualify such Shares for sale in such state, the Maker is unable to so qualify such Shares for sale in such state, the Sharesdelivered shall be subject to applicable restrictions on their transfer under the laws of such state or, of no exemption fromregistration is available, this Note shall not be convertible.

5. Satisfaction and Discharge of Note. This Note shall cease to be of further effect (except as to any surviving rights of

conversion, transfer, or exchange of the Note herein expressly provided for) when:

a. The Maker has paid or caused to be paid all sums payable hereunder by the Maker, including all principalamounts and interest accrued under the Note; and

b. All the conditions precedent herein provided for relating to the satisfaction and discharge of this Note have been

complied with.

6. Events of Default. “Event of Default,” when used herein, whatever the reason for such Event of Default and whether itshall be voluntary or involuntary or be effected by operation of law pursuant to any judgment, decree, or order of any court or anyorder, rule, or regulation of any administration or government body or be caused by the provisions of any paragraph herein meansany one of the following events:

a. Default in the payment of any interest on this Note when it becomes due and payable;

or

b. Default in the payment of the principal amount of this Note when due, whether at maturity, upon prepayment, orotherwise; or

c. Default in the performance or breach of any covenant or warranty of the Maker in this Note (other than a

covenant or warranty, the breach or default in performance of which is elsewhere in this section specifically dealt with), andcontinuation of such default or breach for a period of sixty (60) days after there has been given to the Maker by registered orcertified mail, by the Note Holder, a written notice specifying such default or breach and requiring it to be remedied and stating thatsuch notice is a notice of default hereunder; or

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d. The entry of a decree or order by a court having jurisdiction in the premises adjudging the Maker a bankrupt or

insolvent under the Federal Bankruptcy Act or any other applicable federal or state law, or appointing a receiver, liquidator,assignee, trustee (or other similar official) of the Maker or of any substantial part of its property , or ordering the winding up orliquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of sixty (60) consecutivedays; or

e. The institution by the Maker of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the

institution of bankruptcy or insolvency proceedings against it, or a filing by it of a petition or answer or consent seekingreorganization or relief under the Federal Bankruptcy Act or any other applicable federal or state law; or the consent by it to the filingof any such petition or the appointment of a receiver, liquidator, assignee, trustee (or other similar official) of the Maker or of anysubstantial part of its property, or the making by it of any assignment for the benefit of creditors, or the admission by it in writing of itsinability to pay its debts generally as they become due, or the taking of corporate action by the Maker in furtherance of any suchaction.

This Note shall bear interest at the rate of ten percent (10%) per annum from and after the date of, and during the continuation of,any Event of Default. This interest rate shall be in lieu of the interest rate set forth in Paragraph 1 above.

7. Acceleration of Maturity. If an Event of Default occurs and is continuing then, in every such case, the Note Holder may

declare the principal of this Note to be due and payable immediately, by a notice in writing to the Maker of such default, and uponany such declaration, such principal shall become immediately due and payable. At such time after such declaration of accelerationhas been made, and before a judgment or decree for payment of money due has been obtained by the Note Holder, the NoteHolder, by written notice to the Maker, may rescind and annul such declaration and its consequences, if all Events of Default, otherthan the nonpayment of the principal of this Note which has become due solely by such acceleration, has been cured or waived. Nosuch rescission shall affect any subsequent default or impair any right consequent thereon.

8. Adjustment in Conversion. The conversion price and number of shares issuable upon conversion of this Note may be

subject to adjustment from time to time as follows:

a. If ASEC shall take a record of the holders of its common shares for the purpose of entitling them to receive adividend in shares, the conversion price in effect immediately prior to such record date shall be proportionately decreased, suchadjustment to become effective immediately after the opening of business on the day following such record date;

b. If ASEC shall subdivide the outstanding common shares into a greater number of shares or combine the

outstanding common shares into a smaller number of shares, or issue by reclassification any of its common shares, the conversionprice in effect immediately prior thereto shall be adjusted so that the Note Holder thereafter surrendered for conversion shall beentitled to receive after the occurrence of any of the events described the number of common shares to which the Note Holderwould have been entitled had such Note been converted immediately prior to the occurrence of such event, such adjustment tobecome effective immediately after the opening of business on the day following the date upon which such subdivision orcombination or reclassification, as the case may be, becomes effective;

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c. No fraction of a Share shall be issued upon conversion, but in lieu thereof ASEC, notwithstanding any other

provision hereof, may pay therefor in cash at the fair value of the fractional Share at the time of conversion;

d. Neither the purchase or other acquisition by ASEC of any common shares, nor the sale of other disposition byASEC of any common shares, shall affect any adjustment of the conversion price or be taken into account in computing anysubsequent adjustment of the conversion price; and

e. If at any time:

(1) ASEC proposes to pay any dividend payable in stock upon its common shares or make any distribution,

including cash or property dividend, out of earnings or earned surplus, to the holders of common shares;

(2) ASEC proposes to enter into any plan of capital reorganization or reclassification of the common sharesof ASEC; or

(3) ASEC proposes to merge, consolidate, or encumber or sell all or substantially all of its assets other than

in the ordinary course of business; then, in any one or more of said cases, ASEC shall notify the Maker and the Maker shall cause a notice to be mailed to theregistered Note Holder at the address of such Note Holder set forth in the registration records of the Maker. Such notice shall besolely for the convenience of such registered Note Holder and shall not be a condition precedent to, nor shall any defect therein orfailure in connection therewith affect the validity of, the action proposed to be taken by ASEC. Such notice shall be mailed, at leastten (10) days prior to the date on which the books of ASEC shall close, or a record date shall be taken for such share dividend,share split or reclassification, consolidation, merger, or sale of properties and assets, as the case may be. Such notice shall specifysuch record date for the closing of the transfer books.

9. Restrictions. The Note Holder, by acceptance hereof, both with respect to the Note and the Shares to be issuable upon

conversion of the Note (unless issued pursuant to an effective registration statement under the Securities Act), represents andwarrants to the Maker and ASEC as follows:

a. The Note and the Shares are being acquired for the Note Holder’s own account to be held for investment

purposes only and not with a view to, or for, resale in connection with any distribution of such Note or Shares or any interest thereinwithout registration or other compliance under the Act, and the Note Holder has no direct or indirect participation in any suchundertaking or in underwriting such an undertaking.

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b. The Note Holder has been advised and understands that the Note and the Shares have note been registeredunder the Securities Act and the Note and/or the Shares must be held and may not be sold, transferred, or otherwise disposed offor value unless they are subsequently registered under the Securities Act or an exemption from such registration is available;except as set forth herein, neither the Maker nor ASEC is under any obligation to register the Note and/or the Shares under the Act;in the absence of such registration, sale of the Note or Shares may be impracticable; ASEC and its registrar and transfer agent, ifany, will maintain stock transfer orders against registration of transfer of the Note and the Shares; and the certificates to be issuedfor any Shares will bear on their face a legend in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIESACT OF 1933, AS AMENDED (THE “ SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESESECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE TRANSFERRED OR SOLD IN THEABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES ACT OR THELAWS OF THE APPLICABLE STATE OR A “NO ACTION” OR INTERPRETIVE LETTER FROM THE SECURITIES ANDEXCHANGE COMMISSION OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER, AND ITSCOUNSEL, TO THE EFFECT THAT THE SALE OR TRANSFER IS EXEMPT FROM REGISTRATION UNDER THESECURITIES ACT AND SUCH STATE STATUTES.

c. The Maker may refuse to transfer the Note and/or the Shares unless the Note Holder provides an opinion of legal

counsel reasonably satisfactory to the Maker or a “no action” or interpretive response from the Securities and ExchangeCommission to the effect that the transfer is proper; further, unless such letter or opinion states that the Note and/or Shares are freefrom any restrictions under the Securities Act, the Maker may refuse to transfer the Note and/or the Shares to any transferee whodoes not furnish in writing to the Maker the same representations and agree to the same conditions with respect to such Note andShares as set forth herein. The Maker may also refuse to transfer the Note or Shares if any circumstances are present reasonablyindicating that the transferee’s representations are not accurate.

10. Default Costs. Should the Maker, ASEC, or the Note Holder default in any of the covenants, conditions, or promises

contained herein, the defaulting party shall pay all costs and expenses, including a reasonable attorney’s fee, which may arise oraccrue therefrom, or in pursuing any remedy provided hereunder or by the statutes of any state.

11. Rights Are Cumulative. The rights and remedies granted to the parties hereunder shall be in addition to and cumulative

of any other rights or remedies either may have under any document or documents executed in connection herewith or availableunder applicable law. No delay or failure on the part of a party in the exercise of any power or right shall operate as a waiver thereofnor as an acquiescence in any default nor shall any single or partial exercise of any power or right preclude any other or furtherexercise thereof or the exercise of any other power or right.

12. Waiver and Amendment. None of the provisions hereof may be changed, waived, terminated or discharged orally, but

only by an instrument in writing signed by the party against whom enforcement of the change, waiver, termination or discharge issought.

13. Notices. All communications provided for herein shall be in writing and shall be deemed to be given or made when

served personally or when deposited in the United States mail addressed, if to the Maker or ASEC at 4760 S. Highland Drive, Suite341, Salt Lake City, UT 84117, Attention: William C. Gibbs, President, or if to Note Holder, at the address furnished to the Maker bysuch party, or at such other address as shall be designated by any party hereto in written notice to the other party hereto deliveredpursuant to this paragraph.

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14. Negotiability, Assignment and Transferability. This Note is negotiable and transferable, subject to compliance with theprovisions of Paragraph 9 hereof. Subject to the provisions of Paragraph 9 hereof, this Note may be assigned in whole or in part bythe Holder. Any transfer or assignment shall be effected by the Holder (i) completing and executing the form of assi ment at the endhereof and (ii) surrendering this Note with such duly completed and executed assigijment form for cancellation at the principalexecutive office of the Maker; whereupon the Maker shall issud, in the name or names specified by the Holder a new Note or Notesoflike tenor with appropriate legends restricting transfer under the Securities Act. Prior to due presentment for transfer orassignment hereof, the Makrr may treat the registered Holder as the absolute owner hereof (notwithstanding any notations ofownership,or writing hereon made by anyone other than a duly authorized officer of the Maker) for all purposes and sha1J not beaffected by any notice to the contrary. The Maker shall keep a record of the name and address of each Holder, each transfer of theNote, and the name and address of each transferee of the Note.

15. Presentment Waiver. The makers, guarantors, and endorsers hereof, if any, severally waive presentment for payment,

protest, and notice of protest and of nonpayment of this Note.

16. Governing Law. This Note will be construed in accordance with, and governed by, the laws of the State of Utah (withoutgiving effect to any choice or conflict oflaw provisions) as applied in contracts that are executed and performed entirely in the Stateof Utah), and any and all,actions to enforce the provisions of this Agreement shall be brought in a court of competent jurisdiction inthe' County of Salt Lake, in the State of Utah and in no other place.

Green River Resources, Inc. (A Utah corporation)

By /s/ William C. Gibbs

William C. Gibbs, President

Authorized as to the conversion feature set forth in Paragraph 2. American Sands Energy Corp. By /s/ William C. Gibbs William C. Gibbs, President

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EXERCISE FORM American Sands Energy Corp.4760 S. Highland Dr. Suite 341Salt Lake City, UT 84117

Re: Conversion of Note

Gentlemen:

The undersigned owner of this Note hereby irrevocably exercises the option to convert this Note or the portion hereof

designated, into shares of common stock of American Sands Energy Corp., a Delaware corporation, in accordance with the terms ofthis Note, and directs that the shares issuable and deliverable upon the conversion, together with any check in payment forfractional shares, be issued in the name of and delivered to the undersigned unless a different name has been indicated below. Ifshares are to be issued in the name of a person other than the undersigned, the undersigned will pay any transfer taxes payablewith respect thereto.

Date: _________________

(Signature) FILL IN FOR REGISTRATION OF SHARES (Social Security or other identifying number)(Printed Name) (Street Address) (City, State, and ZIP Code) Portion to be converted (if less than all)

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ASSIGNMENT FORM FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:

(Please print or type name and address) $ ____________________ of the Note, and hereby irrevocably constitutes and appoints any officer of the Maker aslawful Attorney to transfer this Note on the books of the Company, with full power of substitution in the premises.

Date: ____________________

(Signature)

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Exhibit 10.16

CONVERTIBLE PROMISSORY NOTE Amount: $214,281.40 Date: May 31, 2011 FOR VALUE RECEIVED, and as a partial offset to amounts owed to Bleeding Rock LLC under and pursuant to an OperatingAgreement between Bleeding Rock LLC and GreenRiver Resources Corp. (the "Debtor" or "Company"), the Company herebypromises to pay in lawful money of the United States to the order of Bleeding Rock, LLC, or its successors or assigns ("Lender") atsuch place as the holder hereof may from time to time designate in writing, the principal sum of Two Hundred Fourteen ThousandTwo Hundred Eighty One and 40/100 Dollars (214,281.40), together with interest on the unpaid principal balance hereof from thedate hereof until paid in full.

1. PAYMENTS OF PRINCIPAL AND INTEREST.

Debtor will pay this Note in full, together with interest, on the earlier of December 31,2012 or receipt of funds by the

Company greater than $6 million pursuant to an equity offering by the Company("Due Date"), together with all accrued and unpaidinterest. This Note shall bear interest at the rate of six percent (6%) per annum. Debtor will pay Lender at such place as Lender maydesignate in writing. Unless otherwise agreed or required by applicable law, payments will be applied first to interest and then toprincipal.

2. EVENT OF

DEFAULT.

The occurrence of the following shall be deemed to be an event of default (an "Event of Default") hereunder: (a) Company

fails to pay when due any sums payable hereunder; (b) Company files a voluntary petition in bankruptcy or a petition or answerseeking liquidation, reorganization or an arrangement with its creditors; (c) Company applies for, or consents to, the appointment of areceiver, trustee or liquidator, admits in writing its inability to pay its debts or makes a general assignment for the benefit of itscreditors; (d) Company defaults in the performance under any term, covenant, condition, or obligation contained herein; (e) Companyfails to perform any other obligation under this Note, or (f) the representations of the Company under this Note prove to be untrue.

3. A C C E L E R A T I O N AND LATE

CHARGE.

3.1 Upon the occurrence of an Event of Default and without further notice to Debtor, all unpaid principal, plus all accrued

interest and other amounts due hereunder, shall become immediately due and payable.

3.2 Any amount which is not paid when due hereunder shall thereafter, in addition to the other amounts payable hereunder

by reason thereof, bear interest at a rate equal to twelvepercent (12%) per annum (or such lesser rate as is the maximum ratepermitted by applicable laws) commencing the date fifteen (15) days after the due date until paid.

1


5. ATTORNEYS FEES.

Should suit be brought to enforce, interpret or collect any part of this Note, the Lender shall be entitled to recover, as an

element of the costs of suit and not as damages, reasonable attorneys' fees and all other costs of enforcement and collection.

6. CONVERSION.

6.1 Conversion Right. Upon the acquisition of the Company by Millstream Ventures, Inc., Lender shall convert all, but not

less than all, of the principal amount of the Notes and all accrued interest thereon into 1,071,407 shares of the Company's commonshares.

6.2 Mechanics and Effect of Conversion. Upon conversion, the Lender shall (a) surrender this Note, duly endorsed, at the

principal offices of the Company, together with a written notice in substantially the form attached hereto as Annex A (the "ConversionNotice"), to the Company of the Lender's election to convert, and (b) execute a subscription agreement and all other documentsrequired to executed by other investors in such financing round ( the "Subscription Agreement") with typical investor representations,including representations required to establish Lender's status, or any assign, as an "Accredited Investor," as defined in Rule 501 ofRegulation D promulgated pursuant to the 1933 Act. At its expense, the Company will, as soon as practicable thereafter, and in anyevent within thirty (30) business days thereafter, issue and deliver to Lender, a certificate or certificates for the number of shares ofEquity Stock to which Lender is entitled upon such conversion (bearing the securities legend set forth on this Note and any otherlegends that may be required by applicable state or federal securities law in the opinion of legal counsel for Company), together withany other securities or property to which the Lender is entitled upon such conversion under the terms of this Note, including a checkpayable to the order of the Lender for any cash amounts payable as provided above as a result of the conversion of this Note into afractional share of Equity Stock. Upon full conversion of the entire unpaid balance of this Note, the Company will be released from allits obligations and l iabilities under this Note.

6.3 When Conversion Effected. A conversion the unpaid balance of this Note shall be deemed to have been effected

immediately prior to the close of business on the business day on which the Note, the Conversion Notice and the SubscriptionAgreement are surrendered to the Company as provided above, and at such time, the person in whose name any certificates forshares of Equity Stock shall be issuable upon conversion as provided herein shall be deemed to be the record holder of such sharesof the Equity Stock as of such date for all purposes.

7. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its Articles of Incorporation or bylaws or

through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntaryaction, avoid or seek to avoid the observance or performance of any of the terms of this Note, but will at all times in good faith assistin the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate in order to protect therights of the Lender against dilution or other impairment. Without limiting the generality of the foregoing, the Company (a) will notincrease the par value of any shares of stock receivable on the exercise of this Note above the amount payable therefor on suchexercise, (b) will at all times reserve and keep available a number of its authorized shares of Equity Stock or such other securities asmay be issuable on conversion of this Note (and on the conversion or exercise of such other securities), free from all preemptiverights thereon, which will be sufficient to permit the full conversion of this Note, and (c) shall take all such action as may be necessaryor appropriate in order that said shares of Equity Stock (or such other securities) that may be issued pursuant to the conversion of thisNote will, upon issuance, be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges withrespect to the issue thereof.

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8 . REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents and warrants to

Lender that:

8.1 Authorization. All corporate action on the part of the Company, its officers, directors and shareholders necessary for the

authorization, execution and delivery of this Note, the performance of all obligations of the Company hereunder, and theauthorization, issuance (or reservation for issuance) and delivery of the shares to be issued upon conversion of the Note has beentaken.

8.2 Valid Issuance of Stock. The Equity Stock, when issued, sold and delivered in accordance with terms of this Note, will

be duly and validly issued, fully paid and nonassessable.

9. LOSS OR MUTILATION. On receipt by the Company of evidence reasonably satisfactory to the Company of the loss,

theft, destruction or mutilation of this Note and, in the case of any such loss, theft or destruction of this Note, on delivery of anindemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrenderand cancellation of such Note, the Company at its expense will execute and deliver, in lieu thereof, a new Note of like tenor.

10. NO RIGHTS OR LIABILITY AS A STOCKHOLDER. This Note does not by itself entitle the Lender to any voting rights

or other rights as a stockholder of the Company. In the absence of affirmative action by the Lender to purchase Equity Stock byconversion of this Note, no provisions hereof, and no enumeration herein of the rights or privileges of the Lender shall cause theLender to be a stockholder of the Company.

11. NOTICES. All notices referred to in this Note shall be in writing and shall be deliverable personally or by certified or

registered mail, return receipt requested, postage prepaid and will be deemed, to have been given when so delivered or mailed (i) tothe Company, at its principal executive offices and (ii) to the Lender, at such address as appears in the records of the Company(unless otherwise indicated by Lender).

12. RIGHT TO PREPAY. Company shall have the right to prepay this Note without penalty at any time prior to the earlier of

the Due Date or the date this Note is converted pursuant to Section 6 hereof.

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In Witness Whereof, the Company has executed this Note as of the date first above written.

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ANNEX A

[FORM OF CONVERSION NOTICE]

(To be executed upon conversion of the Convertible Promissory Note)

The undersigned hereby irrevocably elects to exercise the right, represented by this Convertible Promissory Note, to convertthe entire unpaid amount of $ outstanding under the Convertible Promissory Note, including all late charges, principal, and interestas of the date hereof, at the Conversion Price identified in the Convertible Promissory Note into shares of ____. In lieu of anyfractional shares to which the undersigned would otherwise be entitled upon conversion of the Convertible Promissory Note, pleasepay to the undersigned an amount in cash equal to the then current fair market value of such fractional shares, pursuant to theterms of the Convertible Promissory Note.

Dated: _______________

Signature: ______________________________

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Exhibit 21.1

LIST OF SUBSIDIARIESAMERICAN SANDS ENERGY CORP.

American Sands Energy, Corp., a Delaware corporation, has one wholly owned subsidiaries:

1. Green River Resources, Inc., a Utah corporation.


Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of DirectorsAmerican Sands Energy Corp. We consent to the incorporation by reference in Registration Statement No. 333-179044 on Form S-8 of American Sands EnergyCorp. of our report dated June 21, 2012 with respect to the consolidated financial statements of American Sands Energy Corp.contained in American Sands Energy Corp.’s Annual Report on Form 10-K for the year ended March 31, 2012.

/s/ Tanner LLC Salt Lake City, UtahJune 21, 2012


Exhibit 31.1

Certification I, William C. Gibbs, certify that: 1. I have reviewed this Form 10-K annual report of American Sands Energy Corp. for the year ended March 31, 2012; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleading withrespect to the period covered by this report; 3 . Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented inthis report; 4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures(as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in ExchangeAct Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designedunder our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during theregistrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5 . The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing theequivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant’s internal control over financial reporting. Date: June 22, 2012 /s/ William C. GibbsWilliam C. Gibbs, Chief Executive Officer(Principal Executive Officer)


Exhibit 31.2

Certification I, Daniel F. Carlson, certify that: 1. I have reviewed this Form 10-K annual report of American Sands Energy Corp. for the year ended March 31, 2012; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleading withrespect to the period covered by this report; 3 . Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented inthis report; 4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures(as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in ExchangeAct Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designedunder our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during theregistrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5 . The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing theequivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant’s internal control over financial reporting. Date: June 22, 2012 /s/ Daniel F. CarslonDaniel F. Carlson, Chief Financial Officer(Principal Financial Officer)


Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of American Sands Energy Corp. (the “Company”) on Form 10-K for the year endedMarch 31, 2012, as filed with the Securities and Exchange Commission (the “Report”), the undersigned principal executive officer ofthe Company, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company.

Date: June 22, 2012 /s/ William C. GibbsWilliam C. Gibbs, Chief Executive Officer(Principal Executive Officer)


Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of American Sands Energy Corp. (the “Company”) on Form 10-K for the year endedMarch 31, 2012, as filed with the Securities and Exchange Commission (the “Report”), the undersigned principal financial officer ofthe Company, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company.

Date: June 22, 2012 /s/Daniel F. CarlsonDaniel F. Carlson, Chief Financial Officer(Principal Financial Officer)


Documents

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