EXHIBIT 4.91
CONNOR CREEK PROPERTY
This Agreement is dated for reference the 20th day of September, 2005.
BETWEEN:
KOOTENAY GOLD INC.
Xxxxx 000, 000 Xxxx Xxxxxxxx Xx.
Xxxxxxxxx, X.X.
X0X 0X0
(the above hereinafter referred to as the "Optionor")
AND:
XXXXXX GOLD CORP.
711 - 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Fax: 000.000.0000
(the above hereinafter referred to as the "Optionee")
OF THE SECOND PART
WITNESSES THAT WHEREAS the Optionor is the recorded and beneficial owner of, or
has the sole and exclusive right and option to acquire, a 100% legal and
beneficial interest in and to certain mining claims situated in the Xxxxxx
Mining District of southeastern British Columbia more particularly described in
Schedule "A" attached hereto (the "Property");
AND WHEREAS the Optionor desires to grant and the Optionee is desirous of
obtaining an option to acquire a 50% undivided interest in and to the Property
upon terms and subject to the conditions herein contained.
NOW THEREFORE in consideration of the premises and the mutual covenants and
agreements herein contained, the parties agree as follows:
1. GRANT OF OPTION
The Optionor grants to the Optionee the sole, exclusive and irrevocable right
and option (the "Option") to acquire an undivided 50% right, title and interest
in and to the Property, in accordance with the terms of this Agreement.
2. OPTION ONLY
This is an option only and except as specifically provided otherwise, nothing
herein contained shall be construed as obligating the Optionee to do any acts or
make any payments hereunder and any act or acts, 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. If the Option is terminated before the
Option is exercised, the Optionee shall not be bound thereafter in debt, damages
or otherwise under this Agreement, except in respect of obligations arising
prior to such termination or otherwise provided for in this Agreement, and all
payments theretofore paid by the Optionee shall be retained by the Optionor for
its own use absolutely.
3. TERMS OF THE OPTION
In order to maintain the Option in good standing and earn a 50% right, title and
undivided interest in and to the Property, the Optionee, subject to paragraph 1,
shall:
(a) issue to the Optionor 200,000 common shares of the Optionee
upon the fifth business day following the date of receipt of
regulatory approval;
(b) issue to the Optionor a further 50,000 common shares of the
Optionee on or before the date which is 12 months from the
date of regulatory approval;
(c) issue to the Optionor a further 50,000 common shares of the
Optionee on or before the date which is 24 months from the
date of regulatory approval;
(d) issue to the Optionor a further 50,000 common shares of the
Optionee on or before the date which is 36 months from the
date of regulatory approval;
(e) issue to the Optionor a further 50,000 common shares of the
Optionee on or before the date which is 48 months from the
date of regulatory approval;
(f) incur $25,000 in exploration expenses on the Property and/or
on the acquisition on or before the date which is December 31,
2005;
(g) incur a further $75,000 in exploration expenses on the
Property on or before the date which is November 1, 2006
(h) incur a further $150000 in exploration expenses on the
Property on or before the date which is November 1, 2007
(i) incur a further $300,000 in exploration expenses on the
Property on or before the date which is November 1, 2008
(j) incur a further $450,000 in exploration expenses on the
Property on or before the date which is November 1, 2009.
For the purposes of this Agreement and the Joint Venture Agreement, "exploration
expenses" means all costs, expenses and charges of whatsoever kind or nature
incurred by the Optionee in connection with the exploration, development and
maintenance of the Property, determined in accordance with Canadian generally
accepted accounting practices.
4. EXERCISE OF THE OPTION
If the Optionee has issued to the Optionor 400,000 common shares to the Optionor
and incurred at least an aggregate of $1,000,000 in exploration expenses on the
Property in accordance with this Agreement, the Optionee shall be deemed to have
exercised the Option and will have acquired an undivided 50% right, title and
interest in and to the Property.
5. JOINT VENTURE
The Optionor and the Optionee shall form a Joint Venture whose conduct and
obligations shall be governed by the Joint Venture Agreement attached hereto as
Schedule "B " upon:
(a) the Optionee exercising and completing its term of Option as outlined
in section 3.0.
6. OPERATOR
During the term of the Option, the Optionor shall be the operator for purposes
of developing and executing exploration programs.
The operator shall submit a draft work program for each exploration season to
the non-operator. The draft program shall contain a statement in reasonable
detail of proposed operations and estimates of all exploration or development
costs to be incurred. The non-operator agrees to provide close cooperation to
the operator in the development of the exploration program during the term of
this Agreement and the parties agree to cooperate in their investor relations
efforts, dealings with investors, mining industry corporations, service
corporations, governments, First Nations, banking groups and any and all
partners required to produce a successful outcome for the exploration and
development of the Property.
7. RIGHT OF ENTRY
During the currency of the Option the Optionor and its employees, agents and any
person duly authorized by the Optionor shall have the sole and exclusive right,
so long as it is operator, to:
(a) enter in, under and upon the Property;
(b) have exclusive and quiet possession thereof subject to the
rights of the Optionee hereunder;
(c) do such prospecting, exploration, development or other mining
work thereon and thereunder as the Optionor in its sole
discretion may consider advisable;
(d) bring upon and erect upon the Property such mining facilities
as the Optionee may consider advisable; and
(e) remove from the Property and dispose of reasonable quantities
of ores, minerals and metals for the purposes of sampling,
obtaining assays or making other tests.
8. TERMINATION
If the Optionee should fail to make any payments, issue any shares or incur
sufficient expenses within the time permitted therefore under this Agreement to
maintain the Option, or if the Optionee should be in default in performing any
of its obligations hereunder, the Optionee shall have ninety (90) days to make
the payment, issue the shares, incur the exploration expenses or cure the
default, and if the Optionee fails to do so then the Option shall at the end of
such 90 day period be and be deemed for all purposes to have been terminated.
9. NO PRODUCTION OBLIGATION
The Optionee shall be under no obligation whatsoever to place the Property into
production.
10. EXCLUSION OF PROPERTY
The Optionee shall have the right at any time and from time to time to elect to
exclude from this Agreement any portion of the Property by not less than 30 days
prior written notice to the Optionor of this election; provided that any portion
of the Property so excluded shall be in good standing free and clear of all
liens, charges and encumbrances, and provided further that the Optionee, if
requested by the Optionor in writing, shall deliver to the Optionor recorded
transfers of any mineral claims and other property interests which are included
in the portion of the Property so excluded in favour of the Optionor.
11. COVENANTS OF THE OPERATOR
During the currency of this Agreement, the Operator shall:
(a) ensure the Property is in good standing by ensuring all the
filing of assessment work conducted on the Property is
completed or by making payments in lieu thereof, and by doing
all other acts and things and making all other payments which
may be necessary in that regard;
2
(b) ensure all reclamation work required resulting from
exploration work conducted subsequent to the date of this
Agreement is completed;
(c) make available to the non-operator and its representatives all
records and files relating to the Property in its possession
and permit the non-operator and its representatives to take
abstracts therefrom and make copies thereof and prepare
monthly reports to the non-operator during the active field
season of work conducted, results obtained and analysis of
results and prepare a formal report by March I the following
year;
(d) permit the non-operator, or its representative, duly
authorized by it in writing, at its own risk and expense,
access to the Property at all reasonable times and to all
records prepared by the operator in connection with work done
or with respect to the Property;
(e) not do or permit or suffer to be done any act or thing which
would or might in any way adversely affect the rights of the
non-operator hereunder; and
(f) ensure all work on or with respect to the Property is done in
a careful and workmanlike manner and in compliance with the
applicable laws of the jurisdiction in which the Property is
located and indemnify and save the non-operator harmless from
any and all loss, damage, costs, actions and suits arising out
of or in connection with work done by the operator on or with
respect to the Property.
12. COVENANTS OF THE NON-0PERATOR
During the currency of this Agreement, the non-operator covenants and agrees
with the operator to not do or permit or suffer to be done any act or thing
which would or might in any way adversely affect the rights of the operator
hereunder.
13. REPRESENTATIONS AND WARRANTIES OF THE OPTIONOR
The Optionor hereby represents and warrants to the Optionee that:
(a) the Optionor is the legal and beneficial owner of the
Property;
(b) the Property consists of those mineral claims more
particularly described in Schedule "A" attached hereto, and
that such claims were located and recorded in accordance with
the applicable laws of Ontario and are valid and subsisting as
of the date of execution and delivery of this Agreement;
(c) the Property is in good standing, free and clear of all liens,
charges and encumbrances;
(d) there are no pending or threatened actions, suits, claims or
proceedings regarding the Property; and
(e) the Optionor has the exclusive right and authority to enter
into this Agreement and to dispose of the Property in
accordance with the terms hereof, and that no other person,
firm or corporation has any proprietary or other interest in
the same.
The representations and warranties of the Optionor herein before set out, form a
part of this Agreement and are conditions upon which the Optionee has relied on
in entering into this Agreement and shall survive the exercise of the Option by
the Optionee. The Optionor shall indemnify and save the Optionee harmless from
all loss, damage, costs, actions and suits arising out of or in connection with
any breach of any representation, warranty, covenant, agreement or condition
contained in this Agreement. The Optionor acknowledges and agrees that the
Optionee has entered into this Agreement relying on the warranties and
representations and other terms and conditions of this Agreement and that no
information which is now known or which may hereafter become known to the
Optionee or its officers, directors or professional advisors shall limit or
extinguish the right to indemnity hereunder.
3
14. TERMINATION PRIOR TO ACQUISITION OF INTEREST
If the Option is terminated, the Optionee shall return to the Optionor forthwith
exclusive and quiet possession of the Property, in good standing for a period of
a minimum of one year and free and clear of all liens, charges and encumbrances.
15. ADDITIONAL TERMINATION
In addition to any other termination provisions contained in this Agreement, the
Optionee shall at any time have the right to terminate its rights and future
obligations under this Agreement by giving notice in writing of such termination
to the Optionor, and in the event of such termination, the Optionee shall not
earn any interest in the Property, and this Agreement, save and except for the
provisions of paragraphs 13 hereof, shall be of no further force and effect.
16. FORCE MAJEURE
If the Optionee is prevented or delayed in complying with any provisions of this
Agreement by reason of strikes, lockouts, labour shortages, power shortages,
fires, wars, acts of God, governmental regulations restricting normal operations
or any other reason or reasons beyond the control of the Optionee, the time
limited for the performance of the various provisions of this Agreement as set
out above shall be extended by a period of time equal in length to the period of
such prevention and delay. The Optionee, insofar as is possible, shall promptly
give written notice to the Optionor of the particulars of the reasons for any
prevention or delay under this paragraph, and shall take all reasonable steps to
remove the cause of such prevention or delay and shall give written notice to
the Optionor as soon as such cause ceases to subsist.
17. NOTICE
Any notice required to be given under this Agreement shall be deemed to be well
and sufficiently given if delivered or if mailed by registered mail in Canada,
(save and except during the period of any interruption in the normal postal
service within Canada) or sent by facsimile transfer to either party at the
addresses first set out above and any notice given as aforesaid shall be deemed
to have been given, if delivered or sent by facsimile transfer, when delivered
or faxed, or if by registered mail, on the third business day after the date
sent by mail . Either party may from time to time by notice in writing change
its address for the purpose of this paragraph.
18. FURTHER ASSURANCES
The parties hereto agree to execute all such further or other assurances and
documents and to do or cause to be done all acts necessary to implement and
carry into effect the provisions and intent of this Agreement.
19. TIME OF ESSENCE
Time shall be of the essence of this Agreement.
20. TITLES
The titles to the respective paragraphs hereof shall not be deemed to form part
of this Agreement but shall be regarded as having been used for convenience of
reference only.
21. SCHEDULES
The Schedules to this Agreement shall be construed with and as an integral part
of this Agreement to the same extent as if they were contained in the body
hereof.
4
22. VOID OR INVALID PROVISION
If any term, provision, covenant or condition of this Agreement, or any
application thereof, should be held by a court of competent jurisdiction to be
invalid, void or unenforceable, all provisions, covenants and conditions of this
Agreement, and all applications thereof not held invalid, void or unenforceable
shall continue in full force and effect and in no way be affected, impaired or
invalidated thereby.
23. SUCCESSORS AND ASSIGNS
This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successors, assigns, heirs, executors or
administrators as the case may be.
24. APPROVALS
The Optionee and the Optionor hereby acknowledge that this Agreement shall be
subject to all necessary regulatory approvals.
25. ARBITRATION
If any question, difference or dispute shall arise between the parties or any of
them in respect of any matter arising under or in connection with the subject
matter of this Agreement, or in relation to the construction hereof, the same
shall be determined by the award of a single arbitrator under the Commercial
Arbitration Act of the Province of Ontario, and the decision of the arbitrator
shall in all respects be conclusive and binding upon all the parties.
26. AFTER-ACQUIRED PROPERTY
During the term of this Agreement, any mineral claim, lease, or other mineral
right or interest acquired by or on behalf of the Optionee, the Optionor or
their assigns, by staking, contiguous to or within a 2.0 (two) kilometre radius
of the outside boundaries of the Property, shall be deemed to have been acquired
on behalf of and for the benefit of the parties pursuant to terms of this
Agreement.
27. ASSIGNMENT
The Optionee with the consent of the Optionor first had and obtained, such
consent to be not unreasonably withheld, may at any time during the term of the
Option sell, transfer or otherwise dispose of all or any portion of its interest
in or its rights under this Agreement; provided that any purchaser, grantee or
transferee of any such interest or rights delivers to the Optionor its agreement
related to this Agreement and to the Property, containing:
(a) a covenant by such transferee to perform all the obligations
of the Optionee to be performed under this Agreement in
respect of the interest or rights to be acquired by it from
the Optionee to the same extent as if this Agreement had been
originally executed by such transferee as principal obligant;
and
(b) a provision subjecting any further sale, transfer or other
disposition of such interest or rights or any portion thereof
to the restrictions contained in this section;
and further provided that any shares delivered to the Optionor in connection
with the exercise of the Option must be shares of the Optionee, unless otherwise
agreed in writing by the Optionor.
No transfer or assignment by the Optionee of any interest less than its entire
interest in this Agreement shall, as between the Optionee and the Optionor,
discharge it from any of its obligations hereunder, but upon the transfer by the
Optionee of the entire interest at the time held by it in this Agreement
(whether to one or more transferees and whether in one or in a number of
successive transfers), the Optionee shall be deemed to be discharged from all
obligations hereunder save and except for obligations which arose prior to the
date of transfer.
5
28. GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with the laws
of the Province of British Columbia.
29. PRIOR AGREEMENTS
This Agreement contains the entire agreement between the parties in respect of
the Property and supersedes all prior agreements between the parties hereto with
respect to the Property, which said prior agreements shall be deemed to be null
and void upon the execution hereof.
30. EXECUTION IN COUNTERPARTS AND DELIVERY
This Agreement may be executed in any number of counterparts with the same
effect as if all parties had signed the same document.
IN WITNESS WHEREOF the parties hereto have executed these presents as of the day
and year first above written.
KOOTENAY GOLD INC. )
)
)
BY: /S/ XXXXXXX XXXXX )
--------------------------------------- )
Authorized Signatory )
The COMMON SEAL of )
XXXXXX GOLD CORP. )
was hereunto affixed in the presence of: )
)
XXXXXXX X. XXXXXX )
--------------------------------------- )
Authorized Signatory )
6
SCHEDULE "A"
REFERRED TO IN THE AGREEMENT DATED FOR REFERENCE THE 20TH DAY OF SEPTEMBER
BETWEEN KOOTENAY GOLD INC. AND XXXXXX GOLD CORP.
--------------------------------------------------------------------------------
The Property consists of the following claims in the Xxxxxx Mining District of
southeastern British Columbia. The following are the claim name, claim number
and the expiry date:
Tenure GOOD TO Mining
Number Property Claim Name Owner DATE Status Division Area
------ -------- ---------- ------- ----------- ------ -------- ----
Connor 134308
400714 Creek CONRAU1 100% 2005/DEC/01 GOOD XXXXXX 500
Connor 134308
400715 Creek CONRAU 2 100% 2005/DEC/01 GOOD XXXXXX 25
Connor 134308
400716 Creek CONRAU 3 100% 2005/DEC/01 GOOD XXXXXX 25
Connor 134308
400717 Creek CONRAU4 100% 2005/DEC/01 GOOD XXXXXX 25
Connor 134308
400718 Creek CONRAU 5 100% 2005/DEC/01 GOOD XXXXXX 25
Connor 134308
400719 Creek CONRAU 6 100% 2005/DEC/01 GOOD XXXXXX 25
Connor 134308
400720 Creek CONRAU 7 100% 2005/DEC/01 GOOD XXXXXX 25
Connor 134308
400725 Creek CONRAU8 100% 2005/DEC/01 GOOD XXXXXX 25
Connor 134308
400726 Creek CONRAU9 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU10 134308
400727 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU11 134308
400728 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU12 134308
401370 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU13 134308
401371 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU14 134308
401372 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU15 134308
401373 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU16 134308
401374 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU17 134308
401375 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU18 134308
402497 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU19 134308
402498 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU20 134308
402499 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU21 134308
402500 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU22 134308
402501 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
402502 Connor CONRAU23 134308 2005/DEC/01 GOOD XXXXXX 25
7
Tenure GOOD TO Mining
Number Property Claim Name Owner DATE Status Division Area
------ -------- ---------- ------- ----------- ------ -------- ----
Creek 100%
Connor CONRAU24 134308
402503 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU25 134308
402504 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU26 134308
402505 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU27 134308
402506 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU28 134308
402507 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU29 134308
402508 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU30 134308
402509 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU31 134308
402510 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU32 134308
402511 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU33 134308
402512 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU36 134308
402913 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU35 134308
402914 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU37 134308
402915 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU39 134308
402917 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU40 134308
402918 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU41 134308
402919 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU42 134308
402920 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU34 134308
402921 Creek 100% 2005/DEC/01 GOOD XXXXXX 200
8
SCHEDULE"B"
REFERRED TO IN THE AGREEMENT DATED FOR REFERENCE THE 20" DAY OF SEPTEMBER, 2005
BETWEEN KOOTENAY GOLD INC. AND XXXXXX GOLD CORP.
--------------------------------------------------------------------------------
JOINT VENTURE AGREEMENT
THIS AGREEMENT is dated for reference the 20th day of September, 2005.
BETWEEN:
Xxxxxx Gold Corp.
711 - 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X IN2
(the above hereinafter referred to as the "Xxxxxx")
OF THE FIRST PART AND:
Kootenay Gold Inc.
Xxxxx 000 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
(the above hereinafter referred to as the "Kootenay")
OF THE SECOND PART
WHEREAS: pursuant to the Option Agreement dated September 20'11 , 2005 (the
"Option Agreement"), when Xxxxxx has earned from Kootenay a 50% of Kootenay's
interest to certain mineral claims situated in the Xxxxxx Mining District in
southern British Columbia. more specifically described in Appendix "A" attached
hereto (the "Property"), and Kootenay and Xxxxxx have agreed to form a Joint
Venture for the purpose of further exploring, developing and, if favourable,
placing the Property into commercial production.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
of the covenants and conditions herein contained, the parties agree as follows:
1. The parties shall establish a Management Committee. Each party shall be
entitled to appoint one member to the Management Committee. Each party
shall designate in writing to the other the name of its member.
(a) A party may from time to time revoke in writing the
appointment of its member to the Management Committee and
appoint in writing another in their place. A party may from
time to time in writing appoint one alternate member for the
member theretofore appointed by such party.
9
(b) All meetings of the Management Committee shall be held at such
times as the members deem appropriate but in any event, not
more frequently than once every three months. All meetings of
the Management Committee shall be held in Vancouver, British
Columbia, unless the members of the Management Committee agree
otherwise. Any member of the Management Committee may call a
meeting at any time by giving seven days notice.
(c) Voting by the Management Committee may be conducted by verbal,
written or faxed ballot. Any resolution in writing signed by a
majority of the members of the Management Committee in one or
more counterparts shall be valid and binding as if passed at a
meeting of the Management Committee duly called and
constituted.
(d) Each member (or alternate member in the absence of the member)
of the Management Committee shall have a number of votes equal
to the Interest held by the party such member or alternate
member represents.
(e) All decisions of the Management Committee will be by majority
vote of the votes entitled to be cast by the members, with the
Manager to cast the deciding vote in the event of a tie vote.
2. Upon the formation of the Joint Venture:
(a) Kootenay shall become the Manager of the business and affairs
of the Joint Venture and will continue in such capacity as
long as Kootenay holds at least an undivided 50% interest in
the Property; and
(b) If the interest of Kootenay in the Joint Venture is reduced
below 50% the party holding greater than 50% or the largest
percentage holder shall be appointed the Manager.
3. (a) The Manager will prepare draft programs for each exploration
season. The draft program shall contain a statement in
reasonable detail of proposed operations and estimates of all
exploration or development costs to be incurred.
(b) The Manager shall forthwith submit the program to the parties.
Each party may, within 30 days of the receipt of the program,
give notice to the Manager committing to contribute its
proportionate share of the costs of that program. A party
which fails to give that notice within the 30 day period shall
be deemed to have elected not to contribute.
(c) If any party has elected or is deemed to have elected not to
contribute to a program, that party's interest in the Property
shall be reduced pursuant to the provisions of sub paragraph
(e) herein.
(d) If the Manager presents a program of less than $100,000, the
other party shall be entitled, so long as it has a 40% or
greater interest, to submit a larger program in its place and
such program shall be deemed approved and in that case, the
Manager will
10
resign and the other party who submitted the larger program
shall become the new Manager under this Agreement.
(d) If a party (the "Defaulting Party") fails or is deemed to have
failed to elect to participate, or fails to pay its
proportionate share of the costs of a program within 30 days
after demand, and if the other party (the "Contributing
Party") proceeds with the program, then the interest of the
Contributing Party shall be increased and the interest of the
Defaulting Party shall be decreased so that the interest of
each party at all times is that percentage which is equal to:
i. the sum of that party's total exploration costs or
deemed exploration costs incurred on the Property
since the commencement of the Option Agreement;
divided by
ii. the sum of the total exploration costs and deemed
exploration costs incurred on the Property by both
parties since the commencement of the Option
Agreement; multiplied by
iii. 100,
and for the purposes of this calculation, Xxxxxx shall at the
time of formation of the Joint Venture be deemed to have
incurred that percentage of the total exploration costs
incurred on the Property by Xxxxxx since the Effective Date of
the Option Agreement which is equal to Xxxxxx'x percentage
interest in the Property at the time of formation of the Joint
Venture, so that, for example, if Xxxxxx has at the time of
formation of the Joint Venture earned a 50% interest in the
Property by incurring exploration expenses totaling
$1,000,000, then for the purposes of this calculation, each of
Xxxxxx and Kootenay shall be deemed to have incurred
exploration expenses of $500,000 at the time of formation of
the Joint Venture.
4. During the term of the Joint Venture Agreement the Joint Venturers
shall be entitled to take in kind and separately dispose of all
concentrate, minerals and metals produced from the Property pro rata
according to their respective beneficial interests in the Joint
Venture.
5. Neither party to the Joint Venture Agreement shall during its term
apply for partition of the Property or the sale thereof in lieu of
partition.
6. This Joint Venture Agreement shall be replaced by a more formal Joint
Venture Agreement containing the principles described herein expressed
in such fashion together with such other provisions as the parties and
their respective counsel deem appropriate following further good faith
negotiations between the parties, however until this Agreement is so
replaced it shall constitute a binding Joint Venture Agreement between
the parties to the Joint Venture respecting the day to day affairs of
the Joint Venture and the disposition of the Property and all mineral
products derived therefrom.
7. If any question, difference or dispute shall arise between the parties
or any of them in respect of any matter arising under or in connection
with the subject matter of this Joint Venture Agreement, or in relation
to the construction hereof, the same shall be determined by the award
11
of a single arbitrator under the Commercial Arbitration Act of the
Province of British Columbia, and the decision of the arbitrator shall
in all respects be conclusive and binding upon all the parties
IN WITNESS WHEREOF the parties hereto have hereunto executed these presents as
of the day and year first above written. KOOTENA GOLD INC.
---------------------------
Authorized Signatory
Xxxxxx Gold Corp.
--------------------------
Authorized Signatory
12
APPENDIX "A"
REFERRED TO IN THE JOINT VENTURE AGREEMENT DATED FOR REFERENCE THE 20th DAY OF
September 2005 BETWEEN Kootenay Gold Inc. AND Xxxxxx Gold Corp.
--------------------------------------------------------------------------------
The Property consists of the following claims in the Xxxxxx Mining District of
southeastern British Columbia. The following are the claim name, claim number
and the expiry date:
Tenure GOOD TO Mining
Number Property Claim Name Owner DATE Status Division Area
------ -------- ---------- ------- ----------- ------ -------- ----
Connor 134308
400714 Creek CONRAU1 100% 2005/DEC/01 GOOD XXXXXX 500
Connor 134308
400715 Creek CONRAU2 100% 2005/DEC/01 GOOD XXXXXX 25
Connor 134308
400716 Creek CONRAU3 100% 2005/DEC/01 GOOD XXXXXX 25
Connor 134308
400717 Creek CONRAL14 100% 2005/DEC/01 GOOD XXXXXX 25
Connor 134308
400718 Creek CONRAU5 100% 2005/DEC/01 GOOD XXXXXX 25
Connor 134308
400719 Creek CONRALl6 100% 2005/DEC/01 GOOD XXXXXX 25
Connor 134308
400720 Creek CONRAU7 100% 2005/DEC/01 GOOD XXXXXX 25
Connor 134308
400725 Creek CONRAL18 100% 2005/DEC/01 GOOD XXXXXX 25
Connor 134308
400726 Creek CONRAU9 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU10 134308
400727 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRALl11 134308
400728 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU12 134308
401370 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU13 134308
401371 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRALI14 134308
401372 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU15 134308
401373 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU16 134308
401374 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU17 134308
401375 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU18 134308
402497 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU19 134308
402498 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU20 134308
402499 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU21 134308
402500 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU22 134308
402501 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
402502 Connor CONRAU23 134308 2005/DEC/01 GOOD XXXXXX 25
13
Tenure GOOD TO Mining
Number Property Claim Name Owner DATE Status Division Area
------ -------- ---------- ------- ----------- ------ -------- ----
Creek 100%
Connor CONRAU24 134308
402503 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU23 134308
402504 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU26 134308
402505 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU27 134308
402506 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU28 134308
402507 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU29 134308
402508 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU30 134308
402509 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU31 134308
402510 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU32 134308
402511 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU33 134308
402512 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU36 134308
402913 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU35 134308
402914 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU37 134308
402915 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU39 134308
402917 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU40 134308
402918 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU41 134308
402919 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU42 134308
402920 Creek 100% 2005/DEC/01 GOOD XXXXXX 25
Connor CONRAU34 134308
402921 Creek 100% 2005/DEC/01 GOOD XXXXXX 200
14
