SHORT FORM OF EXPLORATION AND
DEVELOPMENT AGREEMENT
THIS SHORT FORM OF EXPLORATION AND DEVELOPMENT AGREEMENT (the "Short Form")
is made and entered into effective as of October 21, 2004 by and among Pediment
Gold LLC, a Nevada limited liability company, whose address is 0 Xxxx Xxxxxxx
Xxxxxx, 0xx Xxxxx, Xxxxx 0, Xxxx, Xxxxxx 00000 ("PGL"), and Placer Dome U.S.
Inc., a California corporation, whose address for purposes hereof is 0000 00xx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx X.X.X. 00000 ("PDUS").
RECITALS
A. PDUS is the owner of certain unpatented mining claims in Humboldt
County, Nevada, as more particularly described in Exhibit A attached hereto and
incorporated by reference (the "Claims"). PDUS's interest in the Claims,
together with all water and water rights, easements and rights-of-way, and other
appurtenances attached thereto or associated therewith, are collectively
referred to hereinafter as the "Property."
B. PDUS and PGL entered into a letter agreement dated effective October
21, 2004 (the "Agreement"), wherein PDUS granted to PGL the right to explore and
develop the Property and, if PGL so desires, the right for PGL to earn a 70%
interest in the Property and to enter into a joint venture agreement covering
the Property. If PGL acquires that interest, PDUS has the right to re-acquire a
majority interest in the Property.
C. PGL and PDUS desire to enter into this Short Form of Agreement for
purposes of placing of record a notice of the Agreement.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Grant of Exploration, Development and Related Rights. PDUS has
granted and hereby grants to PGL, for the term of the Agreement, the exclusive
right to enter upon and use all or any part of the Property during the Earn-In
Period (as defined in the Agreement) for the purposes of determining ore
reserves and mineralization, and for purposes of development of valuable
minerals from the Property, including the right to enter upon the Property for
purposes of surveying, exploring, testing, sampling, trenching, bulk sampling,
prospecting and drilling for valuable minerals, and to use and construct
buildings, roads, power and communication lines, and to use so much of the
surface of the Property in such manner as is necessary to the enjoyment of any
of the rights or privileges of PGL hereunder or otherwise reasonably necessary
to effect the purposes of the Agreement.
2. Grant of Right to Acquire an Interest in the Property. PDUS has
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granted and hereby grants to PGL, during the Earn-In Period, the exclusive right
to acquire an undivided 70% interest in the Property upon the completion of
certain obligations set forth in the Agreement.
3. Grant of Right to Enter into Joint Venture Agreement. In addition
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to the rights granted in the Agreement as described in paragraph 2 above, PGL
and PDUS have agreed and do hereby agree that, subject to the terms and
conditions set forth in the Agreement, upon PGL's acquisition of an undivided
70% interest in the Property they will enter into a Joint Venture Agreement (as
described in the Agreement) governing operations at the Property. That Joint
Venture Agreement will give PDUS the right to re-acquire a majority interest in
the Property.
4. Term. Unless sooner terminated as provided in the Agreement, the
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term of the Agreement (the "Earn-In Period") shall run until such time as PGL
timely incurs required minimum amounts of Work Expenditures (as defined in the
Agreement) and the parties execute the Joint Venture Agreement, or until sooner
terminated as set forth in the Agreement, but in any event not later than
October 21, 2010.
5. Title to After-Acquired and Additional Interests. The Agreement
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applies and extends to any further or additional right, title, interest or
estate heretofore or hereafter acquired by PGL during the Earn-In Period in or
to any lands or mineral interests (other than royalty interests) wholly or
partially within the exterior boundaries of the Property.
6. Successors and Assigns. Subject to the provisions of paragraph 7
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below, all of the terms, provisions and conditions of the Agreement and this
Short Form are, and shall be, binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
7. Assignability. None of the parties shall have the right to assign
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its interest in the Agreement, other than (i) to an affiliate or a subsidiary,
(ii) in connection with a pledge of assets for financing purposes, or (iii) in
connection with a corporate merger or reorganization or a sale of all or
substantially all of either party's assets, without the prior written consent of
the non-assigning parties, which consent shall not be unreasonably withheld. Any
third party to whom any interest in the Agreement or the Property is assigned or
conveyed shall agree in writing to be bound by all of the terms and conditions
contained in the Agreement.
8. Additional Terms. The Agreement contains additional clauses and
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various other provisions, and reference is made to the Agreement for such other
terms and conditions as govern the Agreement, which terms and conditions are by
reference made a part hereof. Nothing in this Short Form shall limit or affect
the rights and duties of the parties under the Agreement. Requests for
information regarding the Agreement should be made to the parties at the
addresses set forth above.
9. Counterparts. This Short Form may be extended in multiple
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counterparts, and all such counterparts taken together shall be deemed to
constitute a single document.
IN WITNESS WHEREOF, the parties have executed this Short Form of Agreement
effective as of October 21, 2004.
PEDIMENT GOLD LLC
a Nevada limited liability company
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Its: Manager
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PLACER DOME U.S. INC.,
a California corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Its: Regional Exploration Manager
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