THIS AGREEMENT made and entered into the 18th day of January, 2005, by and between PIONEER OIL
AND GAS, a Utah corporation, whose address is 1206 W. South Jordan Parkway, Unit B, South Jordan, Utah
84095-5112 (hereinafter referred to as "Pioneer") and Avalon Gold Corporation whose address is Suite 806,
1288 Alberni Street, Vancouver, British Columbia V6E4N5 (hereinafter called "Participant").
Pioneer represents without any warranty of title, except against the claims of any person or persons whomsoever
claiming or to claim the same, by, through or under Pioneer, that it is an owner of interest in the oil and gas
leasehold interests described in Exhibit 1 attached to this Participation Agreement and by this reference made a
part hereof, which oil and gas leasehold interests will be referred to as the "Contract Acreage".
Pioneer and Participant desire to enter into an agreement for the exploration and development of the Contract
NOW, THEREFORE, for and in consideration of the mutual covenants and promises herein contained, the
parties hereto agree as follows:
ACREAGE PURCHASE AND CLOSING
1.1 Upon execution of this Agreement, Participant shall pay Pioneer Seven Hundred and Six Thousand Two
Hundred and Seventy-Nine Dollars ($706,279.00) for an undivided Eighty-Five Percent (85.0%) working
interest and an undivided Sixty-Eight Percent (68.0%) net revenue interest in the Contract Acreage pursuant to
the terms of this Agreement. The amount paid herein is based on a sales price of the Contract Acreage to
Participant of $63.00 per net acre.
1.2 Pioneer agrees to allow Participant to view Pioneer's 2-D seismic data crossing the Contract Acreage for
evaluating the Contract Acreage, as long as Participant holds such data confidential and does not copy or divulge
the data to any other party without the express written consent of Pioneer. Any additional seismic that the parties
may mutually agree to acquire over the Contract