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AURORA GOLD CORPORATION
0000-000 Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X., Xxxxxx
X0X 0X0
August 16, 1997
Xxxxxx Xxxxxxx, S.A.
00 xxxxx 00-00
Xxxx 0
Xxxxxxxxx Xxxx
Xxxxxxxxx
Attention: Xx. Xxxxxxx Xxxxxxxx
Dear Xx. Xxxxxxxx,
We agree to the terms of this agreement, as follows:
1. Xxxxxx would make two cash payments: $5,000 USF on August 18, 1997 and
$10,000 USF upon completion of our due diligence on the ten mineral
concessions. The combined total of these two payments is $15,000 USF.
These two payments would be a onetime cash payment.
2. Upon completion of our due diligence and governmental approval of the
ten applications, 11,500 common shares of Aurora Gold Corporation per
mineral concession (a total of 115,000 common shares) will be issued to
Minera Motagua, S.A.
3. A 2% Net Smelter Royalty Interest (NSR) will be granted to Minera
Motagua, S.A. for each distinct mineral deposit per mineral concession.
This NSR is exclusive of the mandatory 1% NSR granted to the government
of Guatemala.
4. 100,000 common shares of Aurora Gold Corporation will be issued to
Minera Motagua, S.A. upon a positive feasibility report for each
distinct mineral deposit per mineral concession that is deemed to be
economically viable.
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5. Aurora Gold Corporation shall have the First Right of Refusal for a
period of twenty (20) days on terms mutually acceptable to Aurora Gold
Corporation and Minera Motagua, S.A. on any other mineral concessions
that Minera Motagua, S.A. has applied for and/or has been granted. This
First Right of Refusal is exclusive of two pending transactions with
BWI Resources and Megastar Ventures.
6. Aurora Gold Corporation or its wholly owned subsidiary Aurora Gold
Corporation (B.V.I.) Limited or a wholly owned Guatemalan subsidiary or
its nominees will be the party named in the final agreement.
7. Upon completion of our due diligence and Governmental approval of
applications for the four mineral concessions Aurora Gold Corporation
and Minera Motagua, S.A. will enter into a final agreement transferring
100% ownership of each of the ten mineral concessions to Aurora Gold
Corporation and/or its subsidiary.
8. Aurora Gold Corporation will assume the payment of all fees and be
responsible for maintaining the title to the concessions in accordance
with the newly instituted mining law of Guatemala.
The above mentioned terms and references are supported on the following
knowledge of the ten mineral concessions.
The following is a list of the ten mineral concession (lease see Appendix "A"
for a complete property descriptions): LOS CIPRESES, CHIYAX, ATITLAN, LOS
ANGELES, LA UNION, SAN DIEGO, BARRANQUILLO, EL RANCHO, EL JICARO AND MONJITAS.
Please sign below and return this letter to my attention, at which time we will
begin drafting a formal Agreement.
Yours truly,
Aurora Gold Corporation
Xxxxx X. Xxxxxxx
President
The terms outlined above are accepted by Xxxxxx Xxxxxxx, S.A., this 16th day of
August 1997.
Minera Motagua, S.A.
Per:
------------------------------------
Xxxxxxx Xxxxxxxx
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APPENDIX "A"
Please see attached ten (10) pages containing properties descriptions and a
general location map.
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"MONJITAS"
Is located on the Guatemala province in central Guatemala some 10
kilometers east of Guatemala City. It covers a total area of 20 sq. Kms. and is
bounded by the following UTM coordinates;
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Apex North East
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1 1,627,000 769,000
2 1,627,000 776,600
3 1,632,000 776,000
4 1,632,000 769,000
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The Monjitas concession was requested based on historical references
obtained from the Archives of Central America. One of them dating from 1892
states: "Xx Xxxxxx Xxxx, claims that in the place called Monjitas, in Santa
Xxxxxx, he discovered a gold and silver mine, which he pretends to name El
Xxxxxxx."
The concession is located on the mountains to the east of Guatemala
City. This area is marked by the presence of a N-S fault, which is the eastern
border of the Asuncion valley. Tertiary volcanic rocks are predominant in the
area. Several outcrops of silicified, oxidized and altered volcanic rocks have
been located.
The mineral exploration concession application was presented to the
Ministry of Energy and Mines on June 2, 1997. The concession is located within
the GUATEMALA 1:250,000 scale base map.
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"EL RANCHO"
Is located on the El Progreso and Zacapa provinces in eastern
Guatemala, some 95 kilometers east of Guatemala City. It covers an area of 90
sq., Kms. and is bounded by the following UTM coordinates:
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Apex North East
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1 1,638,000 824,500
2 1,638,000 832,000
3 1,650,000 832,000
4 1,650,000 824,500
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The El Rancho exploration concession was requested based on references
obtained from the Archives of Central America. The references in general state
the presence of several copper, gold, silver, and iron mineral deposits on the
El Rancho mountains south of a town with the same name.
Geology is very similar to that one found in El Barranquillo and El
Jicarro concessions, although El Rancho is closest to the Motagua valley and
fault. On the other side of the Motagua River, to the north of El Rancho, the
Ministry of Energy and Mines has declared a mineral reserve area called San
Xxxxxxx. The reserve was declared based on studies performed a Korean
prospecting mission which performed sediments sampling all around Guatemala and
obtained several gold anomalies at San Xxxxxxx.
The mineral exploration concession was presented to the Ministry of
Energy and Mines on June 26, 1997. The concession can be plotted on the
CHIQUIMULA 1:250,000 base map.
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"BARRANQUILLO"
Is located on the El Progreso province in eastern Guatemala, some 70
kilometers east of Guatemala City. It covers an area of 96 sq. Kms. and is
bounded by the following UTM coordinates:
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Apex North East
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1 1,637,000 805,000
2 1,637,000 817,000
3 1,645,000 817,000
4 1,645,000 805,000
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The Barranquillo concession was requested based on references obtained
at the Archives of Central America. These references mention the existence of an
old copper-gold mine 10 kilometers east of the town of Barranquillo, on the road
to Guastatoya. All the locations mentioned are within the El Barranquillo
concession.
The geology of the concession is very similar to that found in the
Jicaro concession, which bounds Barranquillo to the east.
The mineral exploration concession application was presented to the
Ministry of Energy and Mines on June 2, 1997. The concession can be plotted on
the GUATEMALA 1:250,000 base map.
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"LOS CIPRESES"
Is located in the Totonicapan province in western Guatemala 200 kms.
west of Guatemala City. It covers an area of 56 sq. kms. Its UTM coordinates
are:
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Apex North East
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1 1,653,000 675,000
2 1,653,000 666,000
3 1,662,000 666,000
4 1,662,000 675,000
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The Los Cipreses concession was requested based on references from the
Archives of Central America. Two references state the existence of a silver and
gold mine on the road from Momostenango to San Francisco el Alto. They mention a
vein with an east west orientation on a hill called Trece. Assays yielded 3
ounces of silver per 100 pounds of rock and some gold. Geologically the area is
located within tertiary volcanic terrain close to several igneous bodies. It is
important to recognize that the Motagua Fault is lost when it come into contact
with tertiary volcanic rocks at this particular area. It can be inferred that
the Fault was buried but is still capable of controlling mineralization in the
area on later tectonic events.
The mineral exploration concession was presented to the Ministry of
Mines on May 7, 1997. The area is plotted on the bottom-left corner of the
COBAN, and on the upper-left corner of the GUATEMALA 1:250,000 maps provided.
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"CHIYAX"
Is located in the Totonicapan province of western Guatemala some 210
kms. northwest of Guatemala City. It covers an area of 48 sq. kms. and is
bounded by the following UTM coordinates:
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Apex North East
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1 1,652,000 678,000
2 1,646,000 678,000
3 1,646,000 686,000
4 1,652,000 686,000
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The Chiyaz area was requested based on several references obtained from
the Archives of Central America. At least four references dating from 1796
through 1892 mention gold and silver mines on the hills next to the town of
Totonicapan. Special reference is made to the mines called Parrasqui and
Choatulum. The geology of the area is very similar to that found at the Los
Cipreses area due to their proximity.
The mineral exploration concession application was presented to the
Ministry of Energy and Mines on May 13, 1997. The area is plotted on the
upper-left-hand corner of the GUATEMALA 1:250,000 scale map provided.
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"EL JICARO"
Is located in the El Progreso province in eastern Guatemala, some 80
kilometers east of Guatemala City. It covers an area of 90 sq. Kms. and is
bounded by the following UTM coordinates:
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Apex North East
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1 1,638,000 817,000
2 1,638,000 824,500
3 1,650,000 824,500
4 1,650,000 817,000
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The El Jicaro concession was requested based on a reference obtained
from the Archives of Central America. The reference mentions the presence of
copper and gold bearing minerals on the Anchuga Mountain, close to the town of
Guastatoya. This mountain is covered within the El Jicaro concession.
The geology of the region is marked by the presence of the Motagua
Fault, the largest east-west structure in Guatemala, which extends all the way
to the Caribbean. Due to the proximity of such a large structure, geology is
complex and is characterized by the presence of several rock types, including
intrusives, tertiary rhyolites and redbeds of Cretaceous age.
The mineral exploration concession application was presented to the
Ministry of Energy and Mines on June 2, 1997. The concession can be plotted on
the GUATEMALA and CHIQUIMULA 1:250,000 scale base maps.
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"LOS ANGELES 1" & "LA UNION 1"
Both are located in the Zacapa province in eastern Guatemala close to
the border with Honduras, they cover an area of 180 sq. kms. Their UTM
coordinates are:
LOS ANGELES 1
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Apex North East
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1 1,645,000 236,000
2 1,655,000 236,000
3 1,655,000 245,000
4 1,645,000 245,000
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LAN UNION 1
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Apex North East
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1 1,646,000 245,000
2 1,646,000 254,000
3 1,648,000 254,000
4 1,648,000 257,000
5 1,657,000 257,000
6 1,657,000 254,000
7 1,653,000 254,000
8 1,653,000 245,000
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The Los Angeles 1 and La Union 1 areas were requested based on the
geological environment surrounding it and a very prominent topographic
structure. The area are bounded to the north by the Managua area which was
explored by the UN and the Ministry of Energy and Mines during the 1980s and
yielded results for copper, lead, silver, and gold. Geologists from the Ministry
strongly recommend the area for exploration. A complete report of the Managua
project is included for its review.
Geologically, the area is located at on Paleozoic metamorphic rocks in
contact with an intrusive body and tertiary volcanic terrain.
The Los Angeles 1 area and the La Union 1 area correspond to one
concession but were divided in order to avoid an extremely large concession.
The application was presented to the Ministry of Mines on April 24,
1997. The area is plotted on the CHIQUIMULA 1:250,000 scale map included.
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"ATITLAN"
Also a mineral reconnaissance concession located in the Sacatepequez,
Chimaltenango, and Solola provinces in western Guatemala. It covers an area of
600 sq. Kms., bounded by the following UTM coordinates:
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Apex North East
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1 1,625,000 700,000
2 1,625,000 730,000
3 1,605,000 730,000
4 1,605,000 700,000
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The Atitlan concession was requested based on the geological setting of
the region and on several references from the Archives of Central America
pointing to mineral occurrences in the area. Geologically Atitlan is located
within the central tertiary volcanic belt of southern Guatemala, which presents
the best characteristics for epithermal mineralization in the country.
References point out the existence of several gold, silver, and copper
occurrences in the area which are yet to be located precisely.
The mineral reconnaisance concession application was presented to the
Ministry of Energy and Mines on July 23, 1997. The concession can be plotted in
the GUATEMALA 1:250,000 base map.
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"SAN DIEGO"
Is a mineral reconnaissance concession located in the Zacapa and
Chiquimula provinces in eastern Guatemala, some 150 Kms. east of Guatemala City.
Due to its reconnaissance status it covers a larger area than exploration
concessions, namely 800 sq. kms. the following UTM coordinates bound it:
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Apex North East
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1 1,650,000 190,000
2 1,650,000 230,000
3 1,630,000 230,000
4 1,630,000 190,000
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The San Diego reconnaissance concession was requested with the purpose
of covering a large area of good, prospective land in eastern Guatemala. The
main feature at San Diego is the fact that it completely surrounds the El Pato
gold and silver mineral reserve, which is the best-understood exploration
project in Guatemala to this date. The area has been studied by the General
Mining Directorate and by the United Nations Revolving Fund for Natural
Resources Exploration during the years 1990 and 1991. From these studies, a
total of 850,000 MT averaging 7.0 g/t gold are proven. Possible reserves are
200,000 tone averaging 5.8 g/t gold.
Geologically, due to its extension the area contains several geological
settings. Most important is the presence of the Motagua Fault to the north and
the Chiquimula Pluton (intrusive) on the eastern half of the concession.
The mineral reconnaissance concession application was presented to the
Ministry of Energy and Mines on July 24, 1997. The concession can be plotted on
the CHIQUIMULA 1:250,000 base map.
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