Scout Exploration 8K, Letter of Intent

Letter of Intent

This Memorandum of January 28, 2008, is a Letter of Intent between:

Scout Exploration Inc., a Nevada (USA) corporation, and

Kerrisdale Resources Ltd, an Alberta (Canada) corporation,

Witnesseth That:


Whereas, Scout Exploration Inc. (SCXN) and Kerrisdale Resources Ltd ("KR" ) have discussed terms in which SCXN would purchase a 100% interest in the outstanding shares of KR owned by Brian Mahood and,

Whereas, both parties now wish to reduce the terms of such discussion to this Memorandum;

Now, therefore, for and in consideration of the premises, and of the mutual terms and covenants herein contained, SCXN and KR agree as follows:



SCXN can purchase a 100% of the outstanding shares of KR, which owns the following assets (see attachment ?A') upon accomplishing the following:



Payment to Brian Mahood of $25,000.00 CAD non-refundable upon signing of this agreement for an exclusive 90 day due diligence period.

Payment of $375,000.00 upon completion of an independent engineering report to be commissioned and paid by SCXN to be finished within 90 days of signing this Letter on Intent.

Issuing to Brian Mahood a debenture in the amount of $300,000.00 bearing 6.75% interest for a term of ...