PROPERTY OPTION AGREEMENT
THIS AGREEMENT made and entered into as of the 15 day of January 2010
BETWEEN:
MinQuest Inc., a company having a mailing address at 0000 Xxxxxxx
Xxx, Xxxx, Xxxxxx, 00000, X.X.X.
(herein called the “Optionor”)
OF THE FIRST PART
AND:
Star Gold Corporation , a company having an office at 0000 Xxxx Xxxxxxx Xxx, Xxxxx X, Xxxx Xxxxx, Xxxxx, 00000, XXX
(herein called the “Optionee”)
OF THE SECOND PART
WHERAS the Optionor has represented that it is the sole recorded and beneficial owner
in and to the property called the Xxxxxxxxxx Project (the “Property) described in Schedule
“A” attached hereto;
AND WHEREAS the Optionor, subject to the Net Smelter Royalty reserved to the
Optionor, now wishes to grant to the Optionee the exclusive right and option to acquire
an undivided 100% right, title and interest in and to the Property on the terms and
conditions hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of
the premises, the mutual covenants herein set forth and the sum of One Dollar ($1.00) of
lawful money of U.S. currency now paid by the Optionee to the Optionor (the receipt
whereof is hereby acknowledged), the Parties hereby mutually covenant and agree as
follows:
1.
Definitions
The following words, phrases and expressions shall have the following meanings:
(a)
“After Acquired Properties” means any and all mineral interests staked,
located, granted or acquired by or on behalf of either of the parties hereto
during the currency of this Agreement which are located, in the whole or
in part, within one (1) mile of the existing perimeter of the Property;
(b)
“Exchange” means any stock Exchange;
(c)
“Expenditures” includes all direct or indirect expenses [net of government
incentives and not including payments to the Optionor pursuant to section
4, paragraphs (a), (b)(ii), (c)(ii), (d)(ii), (e)(ii), (f)(ii), (g)(ii), (h)(ii), (i)(ii), (j)(ii), and (k)(ii) hereof ] of or incidental to Mining Operations. The certificate of the Controller or other financial officer of the Optionee, together with a statement of Expenditures in reasonable detail shall be prima facie evidence of such Expenditures; the parties hereto agree that Property payments and Property expenditures are separate payments as outlined in paragraph 4;
(d)
“Facilities” means all mines and plants, including without limitation, all
pits, shafts, adits, haulageways, raises and other underground workings,
and all buildings, plants, facilities and other structures, fixtures and
improvements, and all other property, whether fixed or moveable, as the
same may exist at any time in, or on the Property and relating to the
operator of the Property as a mine or outside the Property if for the
exclusive benefit of the Property only;
(e)
“Force Majeure” means an event beyond the reasonable control of the
Opionee that prevents or delays it from conducting the activities
contemplated by this Agreement other than the making of payments
referred to in Section 4 herein. Such events shall include but not be limited
to acts of God, war, insurrection, action of governmental agencies
reflecting a clear and marked instability in government procedures
unacceptable to both Optionor and Optionee;
(f)
“Mineral Products” means the commercial end products derived from
operating the Property as a mine:
(g)
“Mining Operations” includes:
(i)
every kind of work done on or with respect to the Property by or
under the direction of the Optionee during the Option Period or
pursuant to an approved Work Program; and
(ii)
without limiting the generality of the foregoing, including all work
capable of receiving assessment credits pursuant to the Mines and
Minerals act of Nevada and the work of assessment,
geophysical, geochemical and geological surveys, studies and
mapping, investigating, drilling, designing, examining equipping,
improving, surveying, shaft sinking, raising, cross-cutting and
drifting, searching for, digging, trucking, sampling, working and
procuring minerals, ores and metals, in surveying and bringing any
mineral claims to lease or patent, in doing all other work usually
considered to be prospecting, exploration, development, a
feasibility study, mining work, milling concentration, beneficiation
or ores and concentrates, as well as the separation and extraction of
Mineral Products and all reclamation, restoration and permitting
activities;
(h)
“Net Smelter Royalty” means that Net Smelter Royalty as defined in
Schedule “B” attached hereto (“NSR”);
(i)
“Option” means the option granted by the Optionor to the Optionee to
acquire, subject to the NSR reserved to the Optionor, an undivided 100%
right, title and interest in and to the Property as more particularly set forth
in Section 4;
(j)
“Option Period” means the period from the date hereof to the date at
which the Optionee has performed its obligations to acquire its 100%
interest in the Property as set out in Section 4 hereof, which ever shall be
the lesser period;
(k)
“Property” means the mineral claims described in Schedule “A” and any future claims included through item (a) above;
(l)
“Filing Fees” means all fees, payments and expenses necessary to keep the mineral claims in good standing with federal, state and local government entities;
(m)
“Work Program” means a program of work reasonably acceptable to both
parties in respect of a particular Property, contained in a written document
setting out in reasonable detail;
(i)
An outline of the Mining Operations proposed to be undertaken
and conducted on the Property, specifically stating the period of
time during which the work contemplated by the proposed
program is to be done and performed;
(ii)
The estimated cost of such Mining Operations including a
proposed budget providing for estimated monthly cash
requirements in advance and giving reasonable details; and
(iii)
The identity and credentials of the person or persons undertaking
the Mining Operations so proposed if not the Optionor, reasonably acceptable to both parties hereto.
2.
Headings
Any heading, caption or index hereto shall not be used in any way in construing
or interpreting any provision hereof.
3.
Singular, Plural
Whenever the singular or masculine or neuter is used in this Agreement, the same
shall be construed as meaning plural or feminine or body politic or corporate or vice versa, as the context so requires.
4.
Option
The Optionor hereby grants to the Optionee the sole and exclusive right to lease (“Option”) the Property under the terms as follows:
(a)
At signing, the Optionee paying the sum of $20,000 USD to the Optionor by way of cash, issue 25,000 shares of stock, 25000 stock options based on “Fair Market Price” and reimburse all holding costs and expenses of location of mining claims, such expenses to be identified in Schedule “C”;
(b)
On or before the First Anniversary
(i)
The Optionee incurring Expenditures of $200,000 USD on the
property;
(ii)
The Optionee paying $20,000 USD and issuing 25,000 shares of stock and 25000 stock options based on “Fair Market Price” to the Optionor;
(c)
On or before Second Anniversary
(i)
The Optionee incurring Expenditures of $250,000 USD on the
Property in addition to the expenditures referred to in clause
(b)(i);
(ii)
The Optionee paying $20,000 U.S and issuing 25,000 shares of stock and 25000 stock options based on “Fair Market Price” to the Optionor;
(d)
On or before Third Anniversary
(i)
The Optionee incurring Expenditures of $350,000 USD on the
Property in addition to the expenditures referred to in clauses
(b)(i) and (c)(i) hereof; and
(ii)
The Optionee paying $30,000 USD and issuing 25,000 shares of stock and 25000 stock options based on “Fair Market Price” to the Optionor;
(e)
On or before Fourth Anniversary
(i)
The Optionee incurring Expenditures of $450,000 USD on the
Property in addition to the expenditures referred to in clauses
(b)(i), (c)(i) and (d)(i) hereof; and
(ii)
The Optionee paying $30,000 USD and issuing 25,000 shares of stock and 25000 stock options based on “Fair Market Price” to the Optionor;
(f)
On or before the Fifth Anniversary
(i)
The Optionee incurring Expenditures of $550,000 USD on the
Property in addition to the expenditures referred to in clauses
(b)(i), (c)(i), (d)(i) and (e)(i) hereof;
(ii)
The Optionee paying $50,000 USD to the Optionor and issuing 25,000 shares of stock and 25000 stock options based on “Fair Market Price”;
(g)
On or before the Sixth Anniversary
(i)
The Optionee incurring Expenditures of $750,000 USD on the Property in addition to the expenditures referred to in clauses (b)(i), (c)(i), (d)(i) and (e)(i) and (f)(i) hereof
(ii)
The Optionee paying $50,000 USD to the Optionor and issuing 25,000 shares of stock and 25000 stock options based on “Fair Market Price” to the Optionor;
(h)
On or before the Seventh Anniversary
(i)
The Optionee incurring Expenditures of $1,000,000 USD on the
Property in addition to the expenditures referred to in clauses
(b)(i), (c)(i), (d)(i), (e)(i), (f)(i) and (g)(i) hereof;
(ii)
The Optionee paying $50,000 USD to the Optionor; and issuing 25,000 shares of stock and 25000 stock options based on “Fair Market Price” to the Optionor. Following which the Optionee shall receive from Optionor a quitclaim for 100% interest in and to the property with the exception of a retained 3% NSR to the Optionor as defined in Schedule B.
(i)
The Optionor and Optionee understand and confirm that all Expenditures incurred in a particular period, including any excess in the amount of Expenditures required to be incurred to maintain the Option during such period, shall be carried over and included in the aggregate amount of Expenditures for the subsequent period, but not to exceed more than three (3) consecutive years.
(j)
Notwithstanding paragraphs (b)(i), (c)(i), (d)(i), (e)(i), (f)(i), (g)(i), (h)(i), if the Optionee has not incurred the requisite Expenditures to maintain its option in good standing prior to the anniversary of any given year, the Optionee may pay to the Optionor within 60 days following the expiry of such period, the amount of the deficiency and such amount shall thereupon be deemed to have been Expenditures incurred by the Optionee during such period.
(k)
The doing of any act or the incurrence of any cash payments by the
Optionee shall not obligate the Optionee to do any further acts or make
any further payments with the exception of fees and expenses to keep said property in good standing as per paragraph 8b.
6.
Mining Operations during Option
During the Option Period, the Optionor may provide its mineral exploration expertise on the Property, on a consultation basis for and on behalf of the Optionee, at the election of the Optionee. However, the Optionee has the exclusive right to determine what Expenditures and Mining Operations it will perform, when they will be performed, and by whom. If the Optionee elects to use the mineral expertise and consulting services of the Optionor, then the Optionor shall invoice for time for consulting services and related travel expenses from time to time and the prompt payment of such invoices when due shall constitute a portion of Expenditures by the Optionee as contemplated under Section 4 hereof.
During the currency of this Agreement, the Optionee, its servants, agents and workmen and any persons duly authorized by the Optionee, shall have the right of access to and from and to enter upon and take possession of and prospect, explore and develop the Property in such manner as the Optionee in its sole discretion may deem advisable and shall have the right to remove and ship therefrom ores, minerals, metals, or other products recovered in any manner therefrom.
7.
Assignment
During the Option Term, both parties shall have the right to sell, transfer, or assign its interest in this Agreement or its right or interest in the Property. It will be a condition of any assignment under this Agreement that such assignee shall agree in writing to be bound by the terms of this Agreement applicable to the assignor.
8.
Termination
This Agreement shall forthwith terminate in circumstances where:
(a)
The Optionee shall fail to comply with any of its obligations hereunder,
subject to Force Majeure, and within 30 days of receipt by the Optionee of written notice from the Optionor of such default, the Optionee has not:
(i)
cured such default, or commenced proceedings to cure such
default and prosecuted same to completion without undue
delay; or
(ii)
given the Optionor notice that it denies that such default has occurred.
In the event that the Optionee gives notice that it denies that a default has occurred, the Optionee shall not be deemed to be in default until the matter shall have been determined finally through such means of dispute resolution as such matter has been subjected to by either party so long as the Optionee continues to maintain the property in good standing with all government entities; or
(b)
The Optionee gives notice of termination to the Optionor, which it shall be at liberty to do at any time after the execution of this Agreement. If and when the Optionee elects to terminate this Agreement, or terminate one of the projects comprising the Property, at such time the Property or the specific project will be returned to the Optionor and all claim fees, payments and expenses will be paid in order to maintain the property in good standing for one year after termination.
Upon the termination of this Agreement under this Section 8, the Optionee shall cease to be liable to the Optionor in debt, damages, or otherwise, other than to pay the claim fees as described in paragraph (b) of this Section 8 and all liabilities referred to in Section 11.
Upon termination of this Agreement under this Section 8, the Optionee shall return the Property, including all property within the designated boundary of the area of interest, to the Optionor. The Optionee shall vacate the Property within a reasonable time after such termination and relinquishment, but shall have the right of access to the Property for a period of six months thereafter for the purpose of removing its chattels, machinery, equipment and fixtures.
9.
Representations and Covenants of the Optionor
The Optionor represents and covenants to and with the Optionee as follows:
(a)
The Optionor is a company duly organized validly existing and in
good standing under the laws of Nevada;
(b)
The Optionor has full power and authority to carry on its business and to
enter into this Agreement and any agreement or instrument referred to or contemplated by this Agreement;
(c)
Neither the execution and delivery of this Agreement, nor any of the agreements referred to herein or contemplated hereby, nor the consummation of the transactions hereby contemplated hereby, nor the
consummation of the transactions hereby contemplated conflict with,
result in the breach of or accelerate the performance required by, any
agreement to which it is a party;
(d)
The execution and delivery of this Agreement and the agreements contemplated hereby will not violate or result in the breach of the laws
of any jurisdiction applicable or pertaining thereto or of its constating
documents;
(e)
The Agreement constitutes a legal, valid and binding obligation of the Optionor;
(f)
The Property is accurately described in Schedule “A”, is in good standing under the laws of the jurisdiction in which it is located and is free and clear of all liens, charges and encumbrances;
(g)
The Optionor is the sole recorded and beneficial owner of the Property
and has the exclusive right to enter into this Agreement and all necessary
authority to transfer its interest in the Property in accordance with the terms of this Agreement;
(h)
No Person, firm or corporation has any proprietary or possessorty interest
in the Property other than the Optionor, and no person, firm or corporation is entitled to any royalty or other payment in the nature of rent or royalty on any minerals, ores, metals or concentrates or any other such products removed from the Property other than the government of the state of Nevada pursuant to statute; notwithstanding any Federal, State or County royalties or net proceeds tax derived from mining operations.
(i)
Upon request by the Optionee, and at the sole cost of the Optionee, the Optionor shall deliver or cause to be delivered to the Optionee copies of all available maps and other documents and data in its possession respecting the Property. Nothing will be withheld, hidden, or kept from the Optionee; and
(j)
Subject to performance by the Optionee of its obligations under Section 4, during the Option Period, the Optionee will keep the Property in good standing, free and clear of all liens, charges and encumbrances, will carry out all Mining Operations on the Property in a miner-like fashion if the Optionee elects to use the mining expertise and consulting services of the Optionor, will obtain all necessary licenses and permits as shall be necessary and will file all applicable work up to the legal limits as assessment work under the Mines and Mineral Act (Nevada)
10.
Representations and Covenants of the Optionee
The Optionee represents and covenants to and with the Optionor that:
(a)
The Optionee is a company duly organized validly existing and in good standing under the laws of Nevada;
(b)
The Optionee has full power and authority to carry on its business and to enter into this Agreement and any agreement or instrument referred to or contemplated by this Agreement;
(c)
Neither the execution and delivery of this Agreement, nor any of the agreements referred to herein or contemplated hereby, nor the consummation of the transactions hereby contemplated conflict with,
result in the breach of or accelerate the performance required by, any agreement to which it is a party;
(d)
The execution and delivery of this Agreement and the agreements contemplated hereby will not violate or result in the breach of the laws of any jurisdiction applicable or pertaining thereto or of its constating documents; and
(e)
This Agreement constitutes a legal, valid and binding obligation of the Optionee.
11.
Indemnity and Survival of Representation
The representation herein before set out are conditions on which the parties have relied in entering into this Agreement and shall survive the acquisition of any interest in the Property by the Optionee and each of the parties will indemnify and save the other harmless from all loss, damage, costs, actions and suits arising out of or in connection with any breach of any representation, option, covenant, agreement or condition made by them and contained in this Agreement.
The Optionor agrees to indemnify and save harmless the Optionee from any liability to which it may be subject arising from any Mining Operations carried out by the Optionor or at its direction on the Property. The Optionee agrees to indemnify and save harmless the Optionor from any liability to which it may be subject arising from any Mining Operations carried out by the Optionee or at its direction on the Property.
The Optionor agrees to indemnify and save harmless the Optionee from any liability arising from any and every kind of work done on or with respect to the Property prior to the signing of this Agreement (the “Prior Operations”). Without limiting the generality of the foregoing, Prior Operations includes all work capable of receiving assessment credits pursuant to The Mines and Minerals Act of Nevada and the work of assessment, geophysical, geochemical and geological surveys, studies and mapping, investigating, drilling, designing, examining equipping, improving, surveying, shaft sinking, raising, cross-cutting and drifting, searching for, digging, trucking, sampling, working and procuring minerals, ores and metals, in surveying and bringing any mineral claims to lease or patent, in doing all other work usually considered to be prospecting, exploration, development, a feasibility study, mining work, milling, concentration, beneficiation of ores and concentrates, as well as the separation and extraction of Mineral Products and all reclamation, restoration and permitting activities.
12.
Confidentiality
The parties hereto agree to hold in confidence all information obtained in confidence in respect of the Property or otherwise in connection with this Agreement other than in circumstances where a party has an obligation to disclose such information in accordance with applicable securities legislation, in which case such disclosure shall only be made after consultation with the other party.
13.
Notice
All notices, consents, demands and requests (in this Section 13 called the “Communication”) required or permitted to be given under this Agreement shall be in writing and may be delivered personally sent by telegram, by fax or other electronic means or may be forwarded by first class prepaid registered mail to the parties at their addresses first above written. Any Communication delivered personally or sent by fax or other electronic means including email shall be deemed to have been given and received on the second business day next following the date of sending. Any Communication mailed as aforesaid shall be deemed to have been given and received on the fifth business day following the date it is posted, addressed to the parties at their addresses first above written or to such other address or addresses as either party may from time to time specify by notice to the other; provided, however, that if there shall be a mail strike, slowdown or other labor dispute which might effect delivery of the Communication by mail, then the Communication shall be effective only if actually delivered. For purposes of this agreement and as a definition of address the Optionor’s email shall be defined as xxxxxx@xxxxxxx.xxx and the Optionor’s fax number is 000-000-0000. The Optionee’s email shall be defined as xxxxx.xxxxxxxx@xxxxx.xxx and the Optionee’s fax number is ???????. Notice will be provided to each party should their respective email address change.
14.
Further Assurances
Each of the parties to this Agreement shall from time to time and at all times do all such further acts and execute and deliver all further deeds and documents as shall be reasonably required in order to fully perform and carry out the terms of this Agreement
15.
Entire Agreement
The parties hereto acknowledge that they have expressed herein the entire understanding and obligation of this Agreement and it is expressly understood and agreed that no implied covenant, condition, term or reservation, shall be read into this Agreement relating to or concerning any matter or operation provided for herein
16.
Proper Law and Arbitration
This Agreement will be governed by and construed in accordance with the laws of the State of Nevada and the laws of the United States of America. The parties hereto hereby irrevocably attorn to the jurisdiction of the Courts of Nevada. All disputes arising out of or in connection with this Agreement, or in respect of any defined legal relationship associated therewith or derived therefrom, shall be referred to and finally resolved by a sole arbitrator by arbitration under the rules of The Arbitration Act of Nevada.
17.
Enurement
This Agreement will ensure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.
18.
After Acquired Properties
(i)
The parties covenant and agree, each with the other, that any and all After Acquired Properties shall be subject to the terms and conditions of this
Agreement and shall be added to and deemed, for the purposes hereof, to
be included in the Property. Any costs incurred by the Optionor in staking, locating, recording or otherwise acquiring any “After Acquired Properties” will be deemed to be Mining Operations for which the Optionor will be entitled to reimbursements as part of the Expenditures payable by the Optionee hereunder.
(ii)
Any additional claims agreed by the Optionee to be staked by the Optionor within one (1) mile from the existing perimeter of the Property boundaries shall form party of this Agreement. The Optionee will reimburse the Optionor for the costs of staking the additional claims, unless the Optionee does not elect to have the additional claims subject to this Agreement.
19.
Default
Notwithstanding anything in this Agreement to the contrary if any party (a “Defaulting Party”) is in default of any requirement herein set forth the party affected by such default shall give written notice to the Defaulting Party specifying the default and the Defaulting Party shall not lose any rights under this Agreement, unless thirty (30) days after the giving of notice of default by the affected party the Defaulting Party has failed to take reasonable steps to cure the default by the appropriate performance and if the Defaulting Party fails within such period to take reasonable steps to cure any such default, the affected party shall be entitled to seek any remedy it may have on account of such default including, without limiting, termination of this Agreement.
20.
Payment
All references to monies herein shall be in US funds unless otherwise specified. The Optionee shall make payments for the Expenditures incurred by the Optionor no later than 30 days after the receipt of invoices delivered by the Optionee to do any acts or make any payments hereunder, and any act or payment or payments as shall be made hereunder shall not be construed as obligating the Optionee to do any further act or make any further payment or payments.
21.
Supersedes Previous Agreements
This Agreement supersedes and replaces all previous oral or written agreements, memoranda, correspondence or other communications between the parties hereto relating to the subject matter hereof.
IN WITNESS WHEREOF the Parties hereto have duly executed this Agreement effective as of the ___ day of January, 2010
MinQuest Inc.
Per:___________________________
Xxxxxxx Xxxx, President
Star Gold Corporation.
Per:___________________________
Xxxxxxx Xxxxxxx, President
1
SCHEDULE “A”
Sections 9, 10, 15 and 16, T6N, R47E, MDB&M, Xxx County, Nevada
CLAIM NAME
CLAIMANT’S NAME
NMC NUMBER
Xxxxxxxxxx 1A
MinQuest Inc.
799562
Xxxxxxxxxx 2A
MinQuest Inc.
799563
Xxxxxxxxxx 3A
MinQuest Inc.
799564
Xxxxxxxxxx 6A
MinQuest Inc.
799565
Xxxxxxxxxx 7A
MinQuest Inc.
799566
Xxxxxxxxxx 8A
MinQuest Inc.
799567
Xxxxxxxxxx 9A
MinQuest Inc.
799568
Xxxxxxxxxx 16A
MinQuest Inc.
799569
Xxxxxxxxxx 13
MinQuest Inc.
799570
Xxxxxxxxxx 32
MinQuest Inc.
799571
Xxxxxxxxxx 34
MinQuest Inc.
799572
Xxxxxxxxxx 4A
MinQuest Inc.
836168
Xxxxxxxxxx 5A
MinQuest Inc.
836169
Xxxxxxxxxx 8
MinQuest Inc.
836170
Xxxxxxxxxx 10
MinQuest Inc.
836171
Xxxxxxxxxx 10A
MinQuest Inc.
836172
Xxxxxxxxxx 28
MinQuest Inc.
836173
Xxxxxxxxxx 30
MinQuest Inc.
836174
Xxxxxxxxxx 36
MinQuest Inc.
836175
Xxxxxxxxxx 37
MinQuest Inc.
836176
Xxxxxxxxxx 39
MinQuest Inc.
836177
Xxxxxxxxxx 41
MinQuest Inc.
836178
Xxxxxxxxxx 43
MinQuest Inc.
836179
Xxxxxxxxxx 45
MinQuest Inc.
836180
Xxxxxxxxxx 47
MinQuest Inc.
836181
Xxxxxxxxxx 49
MinQuest Inc.
836182
Xxxxxxxxxx 101
MinQuest Inc.
836183
Xxxxxxxxxx 102
MinQuest Inc.
836184
Xxxxxxxxxx 103
MinQuest Inc.
836185
Xxxxxxxxxx 104
MinQuest Inc.
836186
Xxxxxxxxxx 105
MinQuest Inc.
836187
Xxxxxxxxxx 106
MinQuest Inc.
836188
Xxxxxxxxxx 107
MinQuest Inc.
836189
Xxxxxxxxxx 108
MinQuest Inc.
836190
Xxxxxxxxxx 12
MinQuest Inc.
843867
Xxxxxxxxxx 14
MinQuest Inc.
843868
Xxxxxxxxxx 16
MinQuest Inc.
843869
Xxxxxxxxxx 18
MinQuest Inc.
843870
Xxxxxxxxxx 20
MinQuest Inc.
843871
Xxxxxxxxxx 26
MinQuest Inc.
843872
CLAIM NAME
CLAIMANT’S NAME
NMC NUMBER
Xxxxxxxxxx 42
MinQuest Inc.
843873
Xxxxxxxxxx 44
MinQuest Inc.
843874
Xxxxxxxxxx 46
MinQuest Inc.
843875
Xxxxxxxxxx 48
MinQuest Inc.
843876
Xxxxxxxxxx 50
MinQuest Inc.
843877
Xxxxxxxxxx 40
MinQuest Inc.
851568
Xxxxxxxxxx 109
MinQuest Inc.
855021
Xxxxxxxxxx 110
MinQuest Inc.
855022
Xxxxxxxxxx 111
MinQuest Inc.
855023
Xxxxxxxxxx 112
MinQuest Inc.
855024
Xxxxxxxxxx 113
MinQuest Inc.
855025
Xxxxxxxxxx 114
MinQuest Inc.
855026
Xxxxxxxxxx 115
MinQuest Inc.
855027
Xxxxxxxxxx 118
MinQuest Inc.
851569
Xxxxxxxxxx 119
MinQuest Inc.
851570
Xxxxxxxxxx 120
MinQuest Inc.
851571
Xxxxxxxxxx 121
MinQuest Inc.
851572
Xxxxxxxxxx 122
MinQuest Inc.
851573
Xxxxxxxxxx 123
MinQuest Inc.
851574
Xxxxxxxxxx 124
MinQuest Inc.
851575
SCHEDULE “B”
“Net Smelter Return” shall mean the aggregate proceeds received by the Optionee from time to time from any smelter or other purchaser from the sale of any ores, concentrates, metals or any other material of commercial value produced by and from the Property after deducting from such proceeds the following charges only to the extent that they are not deducted by the smelter or other purchaser in computing the proceeds:
(a)
The cost of transportation of the ores, concentrates or metals from the Property to such smelter or other purchaser, including related insurance;
(b)
Smelting and refining charges including penalties; and
The Optionee shall reserve and pay to the Optionor a NSR equal to three (3%) percent
of Net Smelter Return.
Payment of NSR payable to the Optionor hereunder shall be made quarterly within thirty
(30) days after the end of each calendar quarter during which the Optionee receives
Net Smelter Returns in USD dollars or in kind bullion at the discretion of the Optionor.
Within (60) days after the end of each calendar quarter for which the NSR for such
year shall be audited by the Optionee and any adjustments in the payments of NSR
to the Optionor shall be made forthwith after completion of the audit. All payments of
NSR to the Optionor for a calendar year shall be deemed final and in full satisfaction of
all obligations of the Optionee in respect thereof if such payments or the calculations
thereof are not disputed by the Optionor of the same audited statement. The Optionee
shall maintain accurate records relevant to the determination of the NSR and the Optionor
or its authorized agent, shall be permitted the right to examine such records at all
reasonable times.
2
SCHEDULE “C”
BLM claim filing fees 2009 (60 x $140)
$8,400.00
County claim filing fees 2009 (60 x $10.50 + $4.00)
$634.00
Total
$9,034.00
3
