Exhibit 10.5
Great American Minerals, Inc.
Xxxxxx Xxxxx XxXxxxxx
0000 Xxxxx 0000 Xxxx, Xxx. X-000 Xxxx Xxxxxx, XX 00000
Ph: (000) 000-0000 E-MAIL: XxXxxxxxxx@XXX.XXX
Xxxx Xxxxxx & Xxxxx Xxxxxxxx May 5, 2004
Xxxx Peak Resources Group
Ph: (000 000-0000 Cell: (000) 000-0000
RE: "Modoc Mine Property": Claim Lease & Option to Purchase -
Letter of Intent Offer DF#4, 6, 8, 10, 12, 21, 23, 25, 27, 28,
29 & 30 - Totaling 12 Claims.
Greetings,
Great American Minerals, Inc. (GAM) would still like to finalize the
mutually acceptable terms previously discussed regarding Xxxx Peak Resource's
2/3 ownership in the 12 mining claims listed in this document.
As previously discussed, the entire initial payment will be made to
Xxxx Peak Resources and all subsequent payments will be made 2/3 to Xxxx Peak
Resources & 1/3 to Great American Minerals (Owner of XxXxxxxx'x 1/3 Interest).
It is our intent to expedite $100,000 in work in the immediate 90 days following
execution of this letter agreement.
As such, Great American Minerals, Inc. (Referred to as GAM) wishes to
enter into a mining lease with option to purchase ("Mining Lease") with you for
the above-referenced "Property", which is more particularly described below.
The Principal Proposed terms of the agreement are as follows:
GREAT AMERICAN MINERALS, Inc.
Short Term Lease/Option to Purchase Proposal/Agreement Summary
PROPERTY NAME: Xxxx Peak Resources Lease & Option to Purchase
County/State: Lander County, Nevada
Mining District: Xxxxxx Xxxxxxxx
X00X, X00X, Xxxxxx Sections 30
Claim Name(s): DF#4, 6, 8, 10, 12, 21, 23, 25, 27, 28, 29 & 30 -
Totaling 12 Claims.
2/3 OWNERS:
Xxxx Peak Resources Group
0000 XXXXXXXX XXXXX, XXXXX 000
XXXX, XXXXXX XXX 00000
(Please Supply Appropriate Address)
1/3 Owner & LEASE HOLDER: Great American Minerals, Inc.
9051 South 0000 Xxxx Xxx. X-000
Xxxx Xxxxxx, Xxxx 00000
Contact: Xxxxxx XxXxxxxx, EVP
1
LEASE TERMS:
Effective Date of Agreement: Upon completion of Signatures & Initial
Payment. Payment on execution of agreement: US$5,000.00 Note: 100% of
initial payment will be payable to Xxxx Peak Resources & all subsequent
payments will be payable 2/3 to Xxxx Peak Resources & 1/3 to GAM, Inc.
(Owner of XxXxxxxx'x interest) as agreed.
Payments during term of agreement:
DATE ADVANCE ROYALTY PAYMENT US$
--------------------------------------------------------------------------------
Initial Payment 100% to Xxxx Peak $5,000.00
Resources on Signing:
--------------------------------------------------------------------------------
On or before March 31, 2005 $15,000.00
--------------------------------------------------------------------------------
On or before March 31 , 2006 $30,000.00
--------------------------------------------------------------------------------
On or before March 31, 2007 $50,000.00
--------------------------------------------------------------------------------
On or before March 31, 2008 $75,000.00
--------------------------------------------------------------------------------
Annual Thereafter $100,000.00
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Work Commitments: As part of the work commitment expenditures, It is understood
that one (1) +/-1500' Drill Hole will be completed within the first two years on
the target proposed by Xxxx Peak in their report supplied to GAM, approximately
located on the SE side of the Modoc intrusion at the intersection of the
North/South & North/West structural intersection targeting the down dropped
Modoc Intrusive and associated "Mag Low" at the structural intersection.
WORK COMMITMENT (US$) PERIOD WITHIN WHICH WORK IS TO BE PERFORMED
--------------------------------------------------------------------------------
$100,000.00 Before March 31,2005
--------------------------------------------------------------------------------
$100,000.00 Before September 1, 2006
--------------------------------------------------------------------------------
$300,000.00 Before September 1, 2007
--------------------------------------------------------------------------------
$500,000.00 Before September 1, 2008
--------------------------------------------------------------------------------
$500,000.00 Before September 1, 2009
--------------------------------------------------------------------------------
2% NSR Royalty Interests: The property will be subject to a 2% NSR on
production.
$3,000,000 Option to Purchase Property & 1% NSR: At any time during term of this
agreement, all of the claim ownership and 1% NSR, may be purchased for a
purchase price of US$3,000,000.00 payable 2/3 to Xxxx Peak Resources & 1/3 to
GAM, Inc. (Owner of XxXxxxxx'x interest) as agreed, leaving a residual 1% NSR
payable 2/3 to Xxxx Peak and 1/3 to GAM. All cash payments paid to owner prior
to the exercise of the option shall be credited against the purchase price.
Annual Claim Maintenance Payments: Great American agrees to pay all claim fees.
Assignment: Either party may assign its interest upon written notice fifteen
(30) days prior to transfer.
Report and Data: Upon request by owner, must provide an annual report of
expenditures and activities with copies of non-interpretive data.
2
Termination of Agreement: Great American Minerals may terminate agreement at any
time by 30-Day written notice to owner.
Therefore, by signing below you acknowledge the terms of this agreement are both
agreeable and binding, upon completion of the agreement by GAME and receipt of
the initial payment.
IN WITNESS WHEREOF, the parties have agreed to the above referenced Lease with
Option to Purchase Agreement.
XXXX PEAK RESOURCES GROUP, a Nevada Corporation
By: /s/ Xxxx Xxxxxx
-------------------------------------
Xxxx Xxxxxx,
PROVINCE OF BRITISH COLUMBIA )
) ss.
COUNTY OF VANCOUVER )
On this 6th day of May, 2004, personally appeared before me, a Notary Public,
XXXX XXXXXX, a duly qualified and acting officer of XXXX PEAK RESOURCES GROUP, a
Nevada Corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and who acknowledged that he executed the within and foregoing "Lease
with Option to Purchase Agreement" as Referenced, and acknowledged that he
signed the same as his free and voluntary act and deed, for the uses and
purposes therein mentioned and acknowledged to me that he executed the above
instrument on behalf of said corporation.
/s/ Xxxxxxxx X. Xxxxxx
-----------------------------
Notary Public in and for the Province of B.C.
My Commission does not expire
GREAT AMERICAN MINERALS, INC., a Nevada Corporation
By: /s/ Xxxxxx Xxxxx XxXxxxxx
-----------------------------
Xxxxxx Xxxxx XxXxxxxx, EVP
STATE OF UTAH )
) ss.
COUNTY OF SALT LAKE CITY )
On this 10 day of May, 2004, personally appeared before me, a Notary Public,
XXXXXX XXXXX XxXXXXXX, a duly qualified and acting officer of GREAT AMERICAN
MINERALS, Inc., a Nevada Corporation, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument and who acknowledged that he executed the within and
foregoing "Agreement To Extend" the "Option Agreement" previously executed as
Referenced, and acknowledged that he signed the same as his free and voluntary
act and deed, for the uses and purposes therein mentioned and acknowledged to me
that he executed the above instrument on behalf of said corporation..
/s/ Xxxxxxx Xxxxx
-------------------------------------------
Notary Public in and for the State of UTAH
My Commission Expires 10-10-2007
3
Modoc Property
EXHIBIT "A"
Those certain One Hundred Ten (110) ELM unpatented mining claims, known as the
DF-1 thru DF-36, Xxxxx-23 thru Xxxxx-36, Xxxxx-41 thru Xxxxx-54, Xxxxx-63 thru
Xxxxx-72 and Xxxxx-100 thru Xxxxx-135, located in Lander County, Nevada,
described below:
DF-1 thru DF-36: Located in Lander County, Nevada.
Township 31 North, Range 43 East, MDB&M - Section 30
Summary of Great American Minerals, Inc. Ownership
DF#l-3,5,7,9,ll,13-18,19,20,22,24,26,31-36 Totaling 24 Claims
Filed April 3, 2003: NMC#225561 through NMC#225584
Summary of Xxxx Peak Resources Ownership
Great American Minerals. Inc. holds 1/3 Ownership
DF#4,6,8,10,12,21,23,25,27,28,29 & 30 Totaling 12 Claims
Lander County
Claim Name Book/Page BLM Serial Number
DF#4 NMC-692139
DF#6 NMC-692141
DF#8 NMC-692143
DF#10 NMC-692145
DF#12 NMC-692147
DF#21 NMC-692156
DF#23 NMC-692158
DF#25 NMC-692160
DF#27 NMC-692162
DF#28 NMC-692163
DF#29 NMC-692164
DF#30 NMC-692165
Lease Terms (Pending): Proposed by Xxxx Peak Resources (GAM, Inc. 1/3 Owners)
"Xxxxx" Claims: 100% Owned by GAM, Inc. - Total of 74 Claims
Xxxxx-23 thru Xxxxx-36: Located September 15, 2003 in Lander County,
Nevada. Township 31 North, Range 00 Xxxx, XXX&X - Xxxxxxx 00 XXX 000000
thru NMC 857634
Xxxxx-41 thru Xxxxx-54: Located in Lander County, Nevada. NMC 857635
thru NMC 857648
Xxxxx-63 thru Xxxxx-72: Located in Lander County, Nevada. XXX 000000
-NMC 863360 Township 31 North, Range 43 East, MDB&M - Section 36
Xxxxx-100 thru Xxxxx-135: Located in Lander County, Nevada. Township 30
North, Range 43 East, MDB&M - Section 6 NMC - Pending
Summary of GAM, Inc. Ownership/Quitclaim History - Total of 38 Claims
March 31. 2003 Quitclaim: DF#1-5,7,9,11,13-18,19-22,24,26,31-36; Totaling 26
Claims from Xxxxxx XxXxxxxx to Great American Minerals, Inc.
March 31, 2003 Quitclaim: DF#4,6,8,10,12,21,23,25,27,28,29 & 30 Totaling 12
Claims from Xxxxxx XxXxxxxx to Great American Minerals, Inc.
