EXHIBIT 10.13
EXPLORATION AND PURCHASE OPTION AGREEMENT
THIS OPTION AGREEMENT ("Agreement") made effective as of the lst day of
August, 1994, by and between those persons whose names and addresses are
shown on EXHIBIT A attached hereto and made a part hereof (individually an
"Owner" and collectively the "Owners") and ST. XXXX MINERALS INC., a
Colorado corporation, whose address is 0000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx
00000 (hereinafter referred to as "St. Xxxx");
WHEREAS, Owners are the owners of certain patented mining claims and
millsites situate in Taos County, New Mexico, herein referred to as "the
Property," and more particularly described on EXHIBIT B attached hereto and
made a part hereof; and
WHEREAS, St. Xxxx desires to carry out exploration work and to acquire an
option to purchase the Property,
WHEREAS, Owners desire to make the Property available for the conduct by
St. Xxxx of certain mineral exploration work thereon and to grant St. Xxxx
the option to purchase the Property,
NOW THEREEFORE, in consideration of Ten Dollars ($10.00) in hand paid to
Owners, the receipt and sufficiency of which are hereby acknowledged, and
further in consideration of the mutual covenants, agreements, and promises
herein contained, the parties agree as follows:
1. OPTION. Owners grant to St. Xxxx during the term of this Agreement the
sole and exclusive option (the "Option") to purchase the Property,
together with all appurtenances and water rights incident thereto and all
improvements and personal property thereon, free and clear of all liens
and encumbrances, for a total purchase price of Five Hundred Thousand
Dollars ($500,000.00). St. Xxxx shall be entitled to a credit against the
purchase price for all amounts paid under the provisions of Section 6.
hereof and for all costs and expenses incurred under the provisions of
Section 4 hereof. If the Property is
placed in commercial production at any time during the term of this
Agreement, St. Xxxx shall exercise the option by providing written notice
of exercise to Owners. Within three (3) years after such notice, but no
later than August 1, 2015, St. Xxxx shall deliver the balance of the
purchase price to Owners. "Commercial production" shall mean the
processing and sale of ores, concentrates, metals and other mineral
products which have been mined on the Property but which shall not include
processing for the purpose of testing or milling by a pilot plant.
2. ESCROW. Contemporaneously with the execution of this Agreement, Owners
shall execute, acknowledge, and deliver to the Escrow Agent one or more
general warranty deeds conveying the Property to St. Xxxx in the form
(without legal descriptions) of Exhibit C attached hereto and incorporated
herein.
Owners and St. Xxxx hereby appoint CB&S Nominee Corporation, 1800
One Norwest Center Building, 0000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000
as their Escrow Agent to receive and distribute all payments and to hold
the deed and deliver it to the party entitled hereunder to receive the
same. The parties hereto agree that the Escrow Agent shall act pursuant to
Escrow Instructions executed contemporaneously herewith.
3. EXCLUSIVE POSSESSION. St. Xxxx shall have the exclusive possession of
the Property during the term of this Agreement.
4. TITLE.
(a) Owners warrant that they are in possession of the Property, that
they have the right to enter into this Agreement, that they know of no
other person claiming any interest in the Property or the ground covered
thereby, and that the Property is free from all liens and encumbrances,
except liens for property taxes not yet due and payable. Owners further
warrant to St. Xxxx the quiet enjoyment of the Property and the right to
explore, develop, and mine the same.
(b) Owners warrant and will defend title of the property against all
persons whomsoever.
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(c) At St. Mary's request, Owners shall take all action necessary
(including judicial proceedings) to remove any cloud from or cure any
defect in their title to the Property or the ground covered thereby. If
Owners fail or refuse to take any such action, St. Xxxx xxx take any such
action in Owners' name. Owners agree to cooperate with St. Xxxx in any
such action taken. If the United States or any third person attacks the
validity of any of the patented mining claims included in the Property for
any reason, St. Xxxx shall have no obligation to defend the validity of the
claim.
(d) St. Xxxx shall not be stopped to deny the validity of Owners'
title.
5. UNDIVIDED INTEREST. If the interest claimed by any Owner in any
portion of the Property is less than one, hundred percent, the interest
claimed by such Owner is set forth in Exhibit A. Any representation or
warranty of title made by any Owner shall apply only to the interest set
forth in Exhibit A.
6. OPTION PAYMENTS.
(a) Concurrent with the execution of this Agreement by Owners, St.
Xxxx has made an option payment to Owners in the amount of $5,000, receipt
of which is hereby acknowledged by Owners.
(b) St. Xxxx shall pay to Owners further annual option payments on or
before the dates and in the amounts as follows:
August 1, 1995 $ 5,000
August 1, 1996 10,000
August 1, 1997 10,000
August 1, 1998 10,000
August 1, 1999 10,000
August 1, 2000 15,000
August 1, 2001 15,000
August 1, 2002 15,000
August 1, 2003 15,000
August 1, 2004 15,000
August 1, 2005 20,000
August 1, 2006 20,000
August 1, 2007 20,000
August 1, 2008 20,000
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August 1 ,2009 20,000
August 1, 2010 20,000
August 1, 2011 20,000
August 1, 2012 20,000
August 1, 2013 20,000
August 1, 2014 20,000
August 1, 2015 175,000
--------
$500,000
7. MANNER OF FURTHER OPTION PAYMENTS. St. Xxxx shall make all further
option payments due Owners hereunder by check which shall be made payable
to and shall be made payable to and shall be transmitted to the Escrow
Agent. The Escrow Instructions to be executed contemporaneously herewith
will instruct the Escrow Agent how the payments shall be disbursed. Upon
making the payments to the Escrow Agent, St. Xxxx shall be deemed to have
made the payments to Owners, their heirs, representatives, successors, and
assigns, and thereupon St. Xxxx shall be discharged to the extent thereof
as if the payments had been made directly to Owners, or to any person, firm
or corporation entitled thereto, and St. Xxxx shall not be liable for the
ultimate distribution or receipt of any payment or payments.
8. OPERATIONS.
(a) SCOPE. During the term of this Agreement, St. Xxxx shall have free
and unrestricted access to the Property, and shall have the right and
privilege of conducting exploratory investigations and prospecting for
mineral deposits on the Property, effective during the life of the Option,
and that prospecting shall include, but not be limited to, soil testing,
geophysical surveys, core drilling, shaft sinking, tunnel and mine building
and the removal of ore for testing purposes but not removal of ore for
sale. St. Xxxx shall have the right to erect and maintain upon the
Property any improvements, structures or facilities including mines, shafts
and tunnels as may be necessary or convenient for the conduct of its
operations.
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(b) STANDARDS OF OPERATION. St. Xxxx shall conduct all operations on
the Property in a good and workmanlike manner and in accordance with
accepted mining practice.
(c) COMPLIANCE WITH LAW; RECLAMATION: St. Xxxx shall endeavor in good
faith to comply with applicable provisions of federal, state and local laws
and regulations, as required by the operating permits issued to St. Xxxx by
these agencies under which St. Xxxx shall conduct its operations. If this
Agreement is terminated, St. Xxxx shall reclaim only those portions of the
Property disturbed by its operations, and in compliance with all applicable
governmental laws, regulations and orders. St. Xxxx shall have the right,
without payment of any additional consideration to Owners, to enter upon
the Property subsequent to termination of this Agreement for purposes of
performing such reclamation work.
9. NO IMPLIED COVENANTS. No covenants or conditions relating to the
exploration or related operations on or in connection with the Property, or
the timing thereof, other than those expressly provided in this Agreement,
shall be implied. After commencing any exploration or related operations on
or in connection with the Property and so long as this Agreement has not
been terminated before the expiration of its term, St. Xxxx xxx in its
sole discretion curtail or cease such operations so long as it continues to
make any payments due Owners under this Agreement subject to the provisions
of Section 16 hereof.
10. PROTECTION FROM LIENS AND DAMAGES. St. Xxxx shall keep the Property
free of liens for labor performed or materials or merchandise furnished for
use on the Property under this Agreement, and shall hold Owners harmless
from all costs, loss, or damage which may result from any work or
operations of St. Xxxx or its occupancy of the Property.
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11. TAXES. Owners shall pay all taxes levied against the Property prior to
the date of this Agreement. St. Xxxx shall pay or reimburse Owners for all
taxes levied against the Property during the term of this Agreement. In
the case of taxes for the calendar year in which this Agreement commences,
and for the calendar year in which this Agreement ends, there shall be an
apportionment between the parties, St. Xxxx to bear the proportion of taxes
upon the Property applicable to the part of the calendar year included
hereunder, and Owners to bear the balance of the taxes. St. Xxxx shall pay
all taxes levied during the term of this Agreement against all buildings,
structures, machinery, equipment, personal property, fixtures, and
improvements placed upon the Property by St. Xxxx, and all taxes levied
against St. Xxxx as an employer of labor. All taxes shall be paid when due
and before delinquent, but St. Xxxx shall be under no obligation to pay any
tax so long as the tax is being contested in good faith and by appropriate
legal proceedings and the nonpayment thereof does not adversely affect any
right, title, or interest of Owners in or to the Property.
12. INSURANCE. St. Xxxx shall carry at all times during the term of this
Agreement worker's compensation and other insurance required by state laws
and mining regulations, or St. Xxxx xxx self-insure as to such matters if it
qualifies as a self-insurer under the appropriate laws and regulations.
13. INSPECTION.
(a) Owners or their authorized representative may enter on the
Property at any reasonable time for the purpose of inspection, but shall
enter at Owners' own risk and so as not to hinder unreasonably the
operations of St. Xxxx. Owners shall indemnify and hold St. Xxxx harmless
from any damage, claim, or demand by reason of injury to or the presence of
Owners, their agents or representatives on the Property.
(b) Owners or their authorized representative may, at any reasonable
time, inspect any records pertinent and necessary for substantiating the
compliance of St. Xxxx with the provisions of this Agreement.
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14. DATA.
(a) Upon the execution of this Agreement, Owners shall deliver to St.
Xxxx all drill core, all geological, geophysical, and engineering data and
maps, logs of drill holes, results of assaying and sampling, and similar
data concerning the Property (or copies thereof) which are in Owners'
possession or control.
(b) Upon the surrender or other termination of this Agreement (except
upon exercise of the Option and payment of the full purchase price as
provided in Section 6 hereof), St. Xxxx shall, within sixty days after
termination, (i) return to Owners all drill core and original data
delivered by Owners to St. Xxxx which are then in St. Mary's possession or
control, and (ii) make available for inspection by Owners all factual
geological and geophysical data and maps (not including interpretive data),
logs of drill holes, drill core or cuttings and results of assaying and
sampling pertaining to the Property which St. Xxxx has obtained as a
result of its exploration work under this Agreement and which are then in
St. Mary's possession or control. Upon Owners' request made within ninety
(90) days after termination of this Agreement, St. Xxxx shall at Owners'
expense provide Owners with the drill core or cuttings designated by Owners
and with copies of any Portion of the factual geological and geophysical
data and maps (not including interpretive data), logs of drill holes, and
results of assaying and sampling designated by Owners. St. Xxxx makes no
representation or warranty as to the accuracy or completeness of any such
data or information, and shall not be liable on account of any use by
Owners or any other person of any such data or information. St. Xxxx shall
not be liable for the loss or destruction of any drill core or cuttings.
15. CONFIDENTIAL. During the term of this Agreement all information
obtained by Owners or their authorized representatives from St. Xxxx or
arising out of St. Mary's activities on the Property pursuant to this
Agreement shall be kept strictly confidential by Owners and shall not be
released to any third party except with the prior written consent of St.
Xxxx.
16. TERM, TERMINATION AND SURRENDER.
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(a) The term of this Agreement shall be for a period of twenty-one
(21) years from the date hereof unless sooner surrendered or otherwise
terminated, or until the earlier exercise of the Option.
(b) It is also agreed that a failure by St. Xxxx to make an option
payment within 60 days of the due date therefor as provided in Section 6(b)
hereof shall constitute also a termination of this Agreement effective upon
the expiration of such 60 day period. Upon the effective date of such
termination, all rights of St. Xxxx under this Agreement except as provided
in Sections 17 and 18 hereof shall terminate and all liabilities and
obligations of St. Xxxx hereunder (including the obligation of making any
further payments under Section 6(b) hereof) shall likewise thereupon
terminate except as provided in Sections 8(c) and 14(b) hereof.
(c) St. Xxxx xxx also at any time terminate this Agreement as to all
or any part of the Property by delivering to Owners or by filing for record
in the appropriate office (with a copy to Owners) a good and sufficient
Surrender of this Agreement. Upon mailing the Surrender to Owners or to the
appropriate office, all rights of St. Xxxx under this Agreement shall
terminate except as provided in Sections 17 and 18 hereof, and all
liabilities and obligations of St. Xxxx under this Agreement shall likewise
terminate except as provided in Sections 8(c) and 14(b) hereof and except
liability for payments under Section 6(b) hereof that became due prior to
the date of such termination.
17. REMOVAL OF PROPERTY. For a period of six months after the termination
of this Agreement St. Xxxx shall have the right (but not the obligation
except to the extent set forth in Section 8(c) hereof) to remove from the
Property all buildings, structures, machinery, equipment, personal
property, fixtures, and improvements owned by St. Xxxx or erected or placed
on or in the Property by St. Xxxx, except mine timbers in place. St. Xxxx
xxx keep one or more watchmen on the Property during the six-month
period.
18. ACCESS. For as long as necessary after termination of this Agreement,
St. Xxxx shall have the right of access to and across the Property for
reclamation purposes.
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19. EASEMENTS. If requested by St. Xxxx during the term of this Agreement
or following the exercise of the Option, Owners shall execute one or more
instruments granting to St. Xxxx without cost to St. Xxxx easements upon,
over, or through the Property or upon, over, or through other property
owned by Owners, for the construction, maintenance, use, and removal of
pipe lines, telephone lines, electrical power or transmission lines, roads,
railroads, tramways, flumes, ditches, shafts, drifts, tunnels, and other
facilities necessary or convenient for St. Mary's operations on the
Property or on other property.
20. NOTICES. All notices and other communications to either party shall be
in writing and shall be sufficiently given if delivered in person or sent
by certified or registered mail, return receipt requested, addressed as
hereinafter set forth. Notices given by mail shall be deemed delivered as
of the date of mailing. Until a change of address is communicated as
indicated above, all notices to Owners shall be addressed:
Xx. Xxxxx Xxxx
0000 Xxxx 00xx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
and all notices to St. Xxxx shall be addressed:
St. Xxxx Minerals Inc.
x000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxx
21. ASSIGNMENT.
(a) The rights of either party hereunder may be assigned in whole or
in part without the consent of the other party hereto, subject to the
provisions hereinafter set forth.
(b) No change or division in the ownership of the Property or the
payments provided for herein, however accomplished, shall enlarge the
obligations or diminish the rights of St. Xxxx hereunder. Owners covenant
that any change in their ownership shall
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be accomplished in such a manner that St. Xxxx shall be required to make
payments and to give notices to but one person, firm, or corporation, and
upon breach of this covenant, St. Xxxx xxx retain all monies otherwise due
to Owners until the breach has been cured. No change or division in
ownership shall be binding on St. Xxxx until thirty days after Owners have
given. St. Xxxx a certified copy of the recorded instrument evidencing the
change or division.
(c) If St. Xxxx assigns the whole of or an undivided interest in this
Agreement, liability for breach of any obligation hereunder shall rest
exclusively upon the holder of the Agreement or of an undivided interest
herein who commits the breach. If this Agreement is assigned as to a
segregated portion of the Property, default by the holder hereunder of that
portion shall not affect the rights of holders hereunder of any other
portion.
(d) If Owners receive a bona fide written offer from an unrelated
third party to purchase all or any part of Owners' interest in the
Property or in this Agreement, Owners shall first offer the interest to St.
Xxxx stating the interest proposed to be sold or otherwise disposed of, the
offering price from such third party and other terms and conditions of
sale. St. Xxxx xxx accept the offer on the same terms and conditions as
such third party offer by notice to Owners given within sixty days
following the effective date Owners' offer. If St. Xxxx does not accept
Owners' offer, Owners may sell or otherwise dispose of the interest offered
to St. Xxxx at a price and upon terms and conditions equal to or less
favorable to the third party than those offered to St. Xxxx provided that
the sale or other disposition is effectuated within 120 days from the
effective date of Owners' offer. Any sale or other disposition shall be
subject to the terms of this Agreement, including this subsection (d), all
of which shall survive the closing of any such sale in full force and
effect. If Owners do not sell or otherwise dispose of the interest offered
within 120 days, the provisions of this subsection (d) shall apply to any
subsequent third party offer received by Owners.
22. NO TRANSFER OR ENCUMBRANCE. Without St. Mary's prior written consent,
neither the Owners nor any Owner during term of this Agreement shall (a)
sell, transfer, assign
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or convey any interest in the Property without St. Mary's prior written
consent or otherwise in accordance with the provisions of Section 21(d)
hereof; (b) do or fail to do any act or thing which would cause or permit
any part of the Property to be pledged, collateralized or stand as security
for any matter whatsoever; or (c) enter into any leases or other agreements
concerning the Property or any part thereof.
23. FORCE MAJEURE.
(a) If St. Xxxx shall be prevented by Force Majeure from timely
performance of any of its obligations hereunder (except the payment of
money to Owners), the failure of performance shall be excused and the
period for performance and the term of this Agreement shall be extended for
an additional period equal to the duration of the Force Majeure. Upon the
occurrence and upon the termination of any Force Majeure, St. Xxxx shall
promptly notify Owners. St. Xxxx shall use reasonable diligence to remedy a
Force Majeure, but shall not be required against its better judgment to
settle any labor dispute or contest the validity of any law or regulation
or any action or inaction of civil or military authority.
(b) "Force Xxxxxx" means any cause beyond St. Mary's reasonable
control, including law or regulation; action or inaction of civil or
military authority; inability to obtain any license, permit, or other
authorization that may be required to conduct operations on or in
connection with the Property; unusually severe weather; mining casualty;
fire; explosion; flood; insurrection; riot; labor dispute; inability after
diligent effort to obtain workmen or material; delay in transportation;
acts of God; unavailability of a suitable market for the ores, minerals,
concentrates, or other products from the Property; and excessive costs of
mining, milling, processing or marketing, or insufficient prices available
for the ores, minerals, concentrates, or other products produced from the
Property, which render St. Mary's operations uneconomic.
24. SHORT FORM. Contemporaneously herewith, St. Xxxx and Owners have
executed and delivered a Short Form of Agreement. St. Xxxx xxx record the
Short Form or this Agreement, or both, as it may elect.
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25. INUREMENT. All covenants, conditions, limitations, and provisions
herein contained apply to and are binding upon the parties hereto, their
heirs, representatives, successors, and assigns.
26. MODIFICATION. No modification, variation, or amendment of this
Agreement shall be effective unless the modification, variation, or
amendment is in writing and is signed by Owners and St. Xxxx.
27. WAIVER. No waiver of any breach or default under this Agreement shall
be effective unless the waiver is in writing and signed by the party
against whom the waiver is claimed. No waiver of any breach or default
shall be deemed to be a waiver of any other or subsequent breach or
default.
28. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of
the parties and, except as herein expressly provided, supersedes all
previous and contemporaneous agreements, representations, warranties, or
understandings, written or oral.
29. CONSTRUCTION. The paragraph headings are for convenience only, and
shall not be used in the construction of this Agreement.
30. GOVERNING LAW. The formation, interpretation, and performance of this
Agreement shall be governed by the law of the state of Colorado.
31. TIME OF ESSENCE. Except as set forth in Section 23 hereof, time is of
the essence in the performance of each and every term, condition, and
covenant of this Agreement.
32. TIME COMPUTATIONS. In computing the time permitted or required for
performance or payment as provided hereunder, the first day shall be
excluded and the last day shall be included. If the last day of any such
period is a Saturday, Sunday or legal holiday, the period shall extend to
include the next day which is not a Saturday,
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Sunday, or legal holiday. Any performance or payment which must be taken or
made under this Agreement must be taken or made prior to 5:00 p.m.
(Denver, Colorado time) of the last day of the applicable period provided
hereunder for such action, unless another time is expressly specified. All
references to time shall be Denver, Colorado time. If a date for
performance or payment falls on a holiday or weekend, the time for
performance or payment shall be extended to the next business day, and if
performance or payment has occurred on such weekend or holiday, it shall be
deemed to have occurred on the next business day.
33. INVALIDITY. The invalidity of any provision of this Agreement shall
not affect the enforceability of any other provision of this Agreement.
34. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of
which together shall constitute one and the same agreement. If any person
named as one of the Owners does not execute this Agreement, it nevertheless
shall be binding upon those persons executing it.
35. ADDITIONAL DOCUMENTS. Owners will provide St. Xxxx with such
additional documents as may be necessary to carry out the purposes of this
Agreement. If conditions change by reason of conveyances, assignments, or
other matters relating to the title to or description of the Property,
Owners and St. Xxxx shall execute amendments of this Agreement and the
Short Form of Agreement, and any other documents which may be necessary to
reflect such changed conditions.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
/s/ Xxxxxxxxx Xxxx 8-4-94
---------------------------
Xxxxxxxxx Xxxx
and
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/s/ Xxxxxx Xxxxxxx Giaccarni
---------------------------
Xxxxxx Xxxxxxx Giaccarni ADL 6450909
/s/ Xxxx X. Xxxxx
---------------------------
Xxxx X. Xxxxx
and
/s/ Xxxxx X. Xxxxx
---------------------------
Xxxxx Xxxxx, Joint Tenants
/s/ Xxxxxx X. Xxxxxxxxxx
---------------------------
Xxxxxx X. Xxxxxxxxx
ST. XXXX MINERALS INC
BY: /s/ Xxxxxxx X. Xxxx
-----------------------------
Xxxxxxx X. Xxxx, Vice President
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STATE OF CALIFORNIA )
)SS.
COUNTY OF SAN FRANCISCO )
On this 4TH day of AUGUST, 1994 before me the undersigned, a notary
public, personally appeared Xxxxxxxxx Xxxx (or proved to me on
the oath of XXXXXXXXX XXXX (to be the persons whose names are subscribed to the
within instrument, and acknowledged that she executed the same.
My Commission Expires:
July 17th, 1995 /s/ Xxxx X. Xxxxxxx
------------------------------ --------------------------------
Notary Public Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
COMM. #930735
STATE OF ALASKA ) Notary Public - California
)SS. SAN FRANCISCO COUNTY
COUNTY OF KENAI PENINSULA ) My Comm. Expires JUL 17, 0000
XXXXXXX
Xx this 29TH day of AUGUST, 1995 before me the undersigned, a notary
public, personally appeared Xxxxxx Xxxxxxx Giaccarni known to me (or proved
to me on the oath of XXXXXX XXXXXXX GIACCARNI (to be the persons whose names
are subscribed to the within instrument, and acknowledged that he executed the
same.
My Commission Expires:
2/17/98 /s/ Xxxxx Xxxxxxx
------------------------------ --------------------------------
Notary Public
State of Alaska
STATE OF New Mexico ) NOTARY PUBLIC
)SS. Xxxxx Xxxxxxx
COUNTY OF Rio Aruba ) My Commission Expires Feb 17, 1998
On this 2ND day of AUGUST, 1994 before me the undersigned, a notary
public, personally appeared Xxxx X. Xxxxx known to me (or proved to me on the
oath of XXXX X. XXXXX (to be the person whose name is subscribed to the
within instrument, and acknowledged that she executed the same.
My Commission Expires:
January 25,1997 /s/ Xxxxxx Xxxx Xxxxx
------------------------------ --------------------------------
Notary Public
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STATE OF TEXAS )
)ss.
COUNTY OF BRAZORIA )
On this 8th day of August, 1994 before me the undersigned, a notary
public, personally appeared Xxxxx X. Xxxxx known to me (or proved to me on
the oath of Xxxxx X. Xxxxx (to be the person whose name is subscribed to the
within instrument, and acknowledged that she executed the same.
My Commission Expires:
12-4-97 /s/ Xxxxxx Xxxxxxxxx
------------------------------ --------------------------------
Notary Public
XXXXXX XXXXXXXXX
Notary Public, State of Texas
Commission Expires 12-4-97
STATE OF )
)ss.
COUNTY OF )
On this 2nd day of August, 1994 before me the undersigned, a notary
public, personally appeared Xxxxxx X. Xxxxxxxxxx known to me (or proved to me
on the oath of _____________________ (to be the person whose name is
subscribed to the within instrument, and acknowledged that she executed the
same.
My Commission Expires:
March 9, 1996 /s/ Xxxxxxxxx X. Guy
------------------------------ --------------------------------
Notary Public
STATE OF COLORADO )
CITY AND )ss.
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this 25th day of
July, 1994, by Xxxxxxx X. Xxxx, the Vice President of St. Xxxx Minerals Inc.,
a Colorado corporation, on behalf of the corporation.
My Commission Expires:
February 14, 1997 /s/ Xxxxx X. Xxxxxxxxx
------------------------------ --------------------------------
Notary Public Xxxxx X. Xxxxxxxxx
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EXHIBIT A
---------
OWNERS
------
Name and Address % Interest in Property
---------------- ----------------------
Xxxxxxxxx Xxxx and 16.667% each
Xxxxxx Xxxxxxx Giaccarni
00 Xxxxxxx Xxxxxxx
Xxx Xxxxxxxxx, XX 00000
Xxxx X. Xxxxx and 33.333%
Xxxxx Xxxxx, Joint Tenants
000 X. Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Xxxxxx X. Xxxxxxxxxx 33.333%
X.X. Xxx 0000
Xxxxxxxxxxx, Xxx Xxxxxx 00000
EXHIBIT B
PROPERTIES
100% interest in and to the following patented mining claims and
millsites located in the Picuris and Copper Mounitain Mining District, Taos
County, New Mexico:
Jumbo Lode, Mineral Survey No. 1049, BLM Book A-50, Pages 338-340
Aztec Lode, Mineral Survey No. 1049A, BLM Book A-50, Pages 338-340
Sunset Lode, Mineral Survey No. 1049A, BLM Book A-50, Pages 338-340
Oxide King Lode, Mineral Survey No. 1049A, BLM Book A-50, Pages 338-340
Champion Lode, Mineral Survey No. 1049A, BLM Book A-50, Pages 338-340
Aztec Millsite, Mineral Xxxxxx Xx. 0000X, XXX Book A-50, Pages 338-340
Sunset Millsite, Mineral Xxxxxx Xx. 0000X, XXX Book A-50, Pages 338-340
Oxide King Millsite, Mineral Survey No. 1049B, BLM Book A-50, Pages 338-340
Champion Millsite Mineral Xxxxxx Xx. 0000X, XXX Book A-50, Pages 338-340
Schedule "D" to the
[LETTERHEAD] Acquisition Agreement
dated for reference
November 16, 1994
May 20, 1994
Mr. Xxxx Xxxx, VP, Minerals Exploration
St. Xxxx Minerals, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000-0000
Dear Xxxx:
As per our recent phone call, I am herein describing terms of an Agreement,
which if affirmed by your signature, will result in our passing onto you and
your company information on an interesting "copper-oxide" prospect
(prospect), located on claimed land in New Mexico.
The prospect was encountered during a comprehensive review of leachable
copper reserves in the Southwestern U.S. The prospect was explored during the
porphyry copper era by a couple of majors, however, was not in itself big
enough for their further interest. We estimate that there may be upward to
20-25 million tons of low-grade exotic copper with a possible core area of
0.5% or better. According to a call made to the owner last year, the
prospect was open for option negotiations.
Agreement to the following terms would make this prospect and our in-house
data available to you.
1. St. Xxxx Minerals, Inc. (St. Xxxx) would have 60 days from date of
disclosure of prospect data to accept or reject the prospect. If rejected,
St. Xxxx shall submit in writing this rejection and agrees that it and any of
its officers, employees, agents, representatives or consultants for a period
of three (3) years from the date of rejection letter, shall not acquire or
attempt to acquire any interest in the prospect or any property within a mile
limit outside the boundaries of the prospect (Area to be defined on map with
data). Furthermore, St. Xxxx shall keep all data on the prospect strictly
confidential for the 3-year period.
2. If the prospect is accepted, St. Xxxx agrees to pay Applied Geologic
Studies, Inc. (AGS) a discovery bonus amounting to $100,000. The bonus shall
be paid as follows:
a. $5,000 at time of land acquisition in prospect area, or in any area
within a mile limit outside the prospect's boundaries.
b. Five percent (5%) of total direct exploration expenditures made for
benefit of the prospect, exclusive of land costs. Expenditures would include
geologic work, geochemistry, geophysics, assay, drilling and costs related to
mine feasibility studies or mine development. These payments would be made
annually.
c. Any balance (not to exceed $100,000), shall be paid at time of
decision to put the prospect into mine production.
3. In the event that St. Xxxx conveys its interest in the prospect to another
party, it will require such party to expressly assume in writing St. Mary's
obligation to make the above payments; whereupon, St. Mary's further
obligations under this Agreement shall cease. If St. Xxxx surrenders its
interest in the prospect, or if St. Mary's rights in the property expire or
terminate in any other way, it's obligations to make further payments under
this Agreement shall immediately cease.
If you are in agreement with the terms set forth above, please indicate by
executing both copies of the Agreement and returning one signed copy to me.
Sincerely,
Xxxxxxx X. Xxxxxx
Xx. Xxxxxxx X. Xxxxxx
Pres. AGS INC.
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Accepted by me this the 23rd day of MAY 1994
ILLEGIBLE
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Signature of Company Representative
SCHEDULE "E"
TO THAT CERTAIN AGREEMENT (THE "AGREEMENT")
MADE AS OF THE 16TH DAY OF NOVEMBER, 1994 BETWEEN
SUMMO MINERALS CORPORATION OF THE FIRST PART
AND SUMMO USA CORPORATION OF THE SECOND PART
(COLLECTIVELY, THE "PAYOR") AND ST. XXXX
MINERALS INC. OF THE THIRD PART (THE "PAYEE")
NET SMELTER RETURNS ROYALTY
1. In this Agreement, the term "Net Smelter Returns" shall mean the
gross revenue from the sale by the Payor of all ore, concentrate and metal
produced from the Property, after deduction of the following:
(a) all smelting, and refining costs (excluding the cost of SX-EW
processing), treatment charges and penalties including but not
limited to metal losses, penalties for impurities and charges for
refining, selling and handling by the smelter, refinery or other
purchaser;
(b) costs of marketing, handling, transporting and insuring such ore,
concentrate or metal from the Property or from a concentrator,
whether situated on or off the Property, to a smelter, refinery or
other place of treatment or to the purchaser thereof.
2. Payments of Net Smelter Returns shall be made within 30 days after
the end of each fiscal quarter in which Net Smelter Returns, as determined on
the basis of final adjusted invoices, are received by the Payor. All such
payments shall be made in U.S. dollars.
3. For the purposes of determining Net Smelter Returns, all receipts
and disbursements in currency other that U.S. dollars shall be converted into
U.S. currency on the day of receipt or disbursement, as the case may be.
4. Each payment of Net Smelter Returns shall be accompanied by a
statement indicating the calculation of Net Smelter Returns paid. The Payee
shall be entitled to audit, during normal business hours, such books and
records as are necessary to determine the correctness of the payments,
provided however, that such audit shall be made only on an annual basis and
within 12 months of the end of the fiscal period in respect of which such
audit is made.
5. Payment of Net Smelter Returns shall be made to the Payee at such
place or places in the United States as they shall advise the Payor from
time to time.
6. The determination of the Net Smelter Returns hereunder is based on
the premise that production will be developed solely on the Property. If
other properties are incorporated with the Property in a single mining
project and ores pertaining to each cannot be readily
segregated on a practical or equitable basis, the Payor shall have the right
to commingle with ore from the Property ore produced from other properties
owned or controlled by the Payor provided that the Payor will adopt and
employ generally accepted practices and procedures for weighing, sampling and
assaying in order to determine the amount of metals or concentrate derived
from the Property. The Payee, or the representative of the Payee authorized
in writing, will be permitted to examine at all reasonable times the Payor's
records pertaining to commingling of ores.
7. If metal, concentrates or ore shipped from the Property are lost or
destroyed under circumstances in which the Payor receives payment under an
insurance policy, such payments will be be deemed Net Smelter Returns.
8. The Payor shall not sell, assign, transfer or in any other manner
deal with the Property or any interest therein without the purchaser,
transferee or assignee acquiring the Property or such interest therein first
agreeing with the Payor in writing to be bound by the terms of this
agreement. The Payor's covenant to pay a 1.5% Net Smelter Return Royalty to
the Payee hereunder shall be a covenant running with the Property.
9. No error in accounting or in interpretation of this Agreement shall
be the basis for a claim of breach of fiduciary duty, or the like, or give
rise to a claim for exemplary or punitive damages or for termination or
rescission of the Agreement or the estate and rights acquired and held by the
Payor under the terms of the Agreement.
