PURCHASE OPTION AGREEMENT
Exhibit
10.01
This Agreement
is dated the 1st day
of April, 2010
BETWEEN:
BIG BEAR MINING CORP.
00000
X. Xxxxxx Xx., Xxxxx 000
Xxxxxxxxxx,
Xxxxxxx 00000
(herein
the "Optionee")
AND
XXXXX
XXXX ENGLISH FOR RUBICON MINERALS CORP.
P. O. Box
414
Souris,
MB ROK2CO
(herein
the 'Optionor)
WHEREAS
the Optionor is the recorded and beneficial holder of certain unpatented
mining claims which are filed with the Ministry of Northern Development Mines
and Minerals which Claims are situated in the Township of Xxxxxxx & Shabu Lake
in the District of Red Lake in the Province of Ontario and more
particularly described in Schedule "A" attached hereto and forming a part of
this Agreement;
AND WHEREAS
the Optionor has agreed to grant an option to the Optionee to acquire a
100% undivided interest in the unpatented mining claims associated with the
Property upon the terms and conditions set forth herein;
NOW THEREFORE
THIS AGREEMENT WITNESSETH that, in consideration of the mutual covenants
expressed herein, and the payment of funds and the issuance of shares set forth
herein, the parties hereto agree as follows:
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1.
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Interpretation
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(a)
Definitions, The following terms, wherever used in this agreement, shall have
the meanings set forth below:
(b)
"Effective Date" means the date first written above
(c)
"Minerals" shall mean the end products recovered, produced or derived from
operating the Property as a mine;
(d)
"Mining Operations" means every kind of work done on or in respect of the
property or the product, derived from the Property during the subsistence of the
Option by or under the direction of the Optionee including, without limiting the
generality of the foregoing, 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, drifting, trucking, sampling, working
and procuring minerals, ores and metals, surveying and bringing any mining
claims to lease or patent, and all other work usually considered to be
prospecting. exploration, development and mining work; in paying wages and
salaries of workers engaged In the work and In supplying food, lodging,
transportation and other reasonable needs of the workers; in paying assessments
or premiums for workers' compensation insurance, contributions for Unemployment
insurance or other pay allowances or benefits customarily paid in the district
to those workers; in paying rentals, licence renewal fees, taxes and other
governmental charges required to keep the property In good standing; in
purchasing or renting plant, buildings, machinery, tools, appliances, equipment
or supplies and In installing, erecting, detaching and removing them; mining,
milling. concentrating rehabilitation, reclamation, and environmental
protections and in the management of any work Which may be done on
the Property or in any other respect necessary for the due carrying out of the
prospecting, exploration and development work;
(e)
"Mining Rights" includes mineral rights and the right to conduct Mining
Operations on the Property and further includes the meanings and rights
attributed to Mining Rights and mineral rights under the Mining Act, RS.O. 1990,
c.M-14 and amendments thereto;
(f)
"Property" means all of the unpatented mining claims being optioned by the
Optionor as more particularly described in Schedule "A" including all Mining
Rights as the context so Implies;
(g)
"Production Royalty" means the payments required to be paid pursuant to Article
6.0;
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1.1
Headings. The headings of
this Purchase Option Agreement and the schedules are solely for
convenience of reference and do not affect the interpretation of it or
define, limit or construe the contents of any provision of this Purchase
Option Agreement.
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1.2
Number and gender. Works importing
the singular number shall include the plural and vice versa, works
importing the neuter gender shall include the masculine and feminine
genders, and works importing persons Shall include firms and corporations
and vice versa.
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1.3
Governing
law. This Purchase
Option Agreement and the rights and obligations and relations of the
parties shall be governed by and construed in accordance with the laws of
the Province of Ontario and the federal laws of Canada applicable therein
(but without giving effect to any conflict of law rules). The parties
agree that the courts of Ontario shall have jurisdiction to entertain any
action or other legal proceedings based on any provisions of this
agreement. Each party attorns to the jurisdiction of the courts of the
Province of Ontario.
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1.4
Currency. All references to
currency in this agreement are references to Canadian
currency.
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1.5
Further
Assurances. Each party hereto
agrees from time to time, subsequent to the date hereof, to execute and
deliver or cause to be executed and delivered to the others of them such
instruments or further assurances as may, in the reasonable opinion of
either of them, be necessary or desirable to give effect to the provisions
of this agreement or as may be reasonably required for registering or
recording changes in ownership interests in the
property
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1.6
Schedules. The following are
schedules attached and incorporated in this Purchase Option Agreement by
reference and are deemed to be a part
hereof:
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Schedule
“A” -Property
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1.7
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References. Unless otherwise
stated, a reference to a numbered or lettered paragraph refers to the
paragraph bearing that number or letter in this Purchase Option Agreement.
A reference to this agreement or in this agreement means this Purchase
Option Agreement including the schedules, together with any
amendments.
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2
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Optionors’
Representations and Warranties. The Optionor
represents and warrants to the Optionee
that:
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(a) it is
the beneficial and registered or recorded owner of a 100% interest in the
unpatented mining claims;
(b) the
mining claims are in good standing, free and clear of all
encumbrances;
(c) the
Property has been duly and validly located and recorded pursuant to the
applicable legislation of the Province of Ontario constituting valid and
subsisting Mining and Surface Rights owned in fee simple and that the property
is in good standing with respect to property tax requirements and will be 50
maintained by the Optionors during the period of this Purchase Option
Agreement
(d) it
has the full and undisputed right to deal with the Property as provided for in
this Purchase Option Agreement;
(e) the
Property is not subject to any pending or threatened claims by any third party
or any governmental agency and that the Optionor's are in compliance with all
applicable environmental laws of the Province of Ontario.
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3.1
Grant
of Option
to Earn
Interest
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(a) The
Optionor hereby grants to the Optionee the sole, exclusive, irrevocable and
immediate working right to acquire a 100% interest in the unpatented mining
claims from the Optionor (subject to the Production Royalty in Article 6.0) by
making the payments described herein and by complying with the terms and
conditions of this Purchase Option Agreement.
(b)
Concurrent with the execution of this Purchase Option Agreement, the Optionor
shall deliver to the Optionee a signed transfer in proper registerable form
conveying all of the Optionor's right, title and interest In the Mining Rights
to the Optionee. The said Transfer shall be prepared by and at the expense of
the Optionee and shall be held in trust and not registered until such time as
the Optionee has issued all of the shares and made all of the payments set forth
in clause 3.2 herein.
(c) Upon
execution of this Purchase Option Agreement the Optionee may register this
agreement or notice of this agreement against title to the
Property.
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3.2
Exercise
of
Option. In order to maintain in
force the working right and option granted herein and to exercise the
option, the Optionee must, upon completion of normal and reasonable due
diligence:
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(a) make
the payments and issue the shares as hereinafter set forth:
(i) Share
Issuance:
The
Optionee shall issue to the Optionor common shares in the capital stock of Big
Bear Mining Corp. according to the following schedule:
i) That
number of common shares that equals a value of $30,000 on the first anniversary
date of the Initial Grant;
ii) That
number of common shares common shares that equals a value of $30,000 on the
second anniversary date of the Initial Grant;
iii) That
number of common shares that equals $30,000 on the third anniversary date of the
Initial Grant;
The
issuances above may be paid in common shares or cash at the election of the
Optionor.
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(ii)
Cash Payments
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The
Optionee shall:
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Make five
cash payments to the Optionors according to the following schedule:
i)
An
"Initial Payment" of $20,000 on signing of this Purchase Option
Agreement;
ii)
An
additional $15,000 on the first anniversary date following the Initial
Payment;
iii)
An
add1tional $20,000 on the second anniversary date following the Initial
Payment;
iv)
An
additional $25,000 on the third anniversary date following the Initial
Payment;
v)
An
additional $30,000 on the fourth anniversary date following the Initial
Payment.
3.3 Registration
of Transfer, Upon the full amount of the
cash payments and shares set forth in Clause 3.2 having been paid and issued,
the Optionee shall be entitled, without further notice, to register the transfer
vesting a 100% interest in the Mining Rights to the Optionee,
3.4 Acceleration. The Optionee in its sale
discretion may accelerate any of the requisite payments and issuance of shares
described above for the dates specified herein and proceed to acquire the Mining
Rights upon paying all of the sums and issuing all of the shares as set forth
herein.
4.0 Working
Rights. During the currency of
the Option, the Optionee shall have the sole and exclusive working right to
enter on and conduct the Mining Operations on the Property as the Optionee in
its sale discretion may decide. The Optionee shall have quiet and exclusive
possession from the date of this agreement and thereafter during the currency of
the working right and option, with full power and authority to the Optionee, its
servants, agents, workers or contractors, to carry on Mining Operations in
searching for Minerals in such manner as the Optionee in its discretion may
determine, including the right to erect, bring and install on the Property all
buildings, plant, machinery, equipment, tools, appliances or supplies as the
Optionee shall deem necessary)' and proper and the right to remove there from
reasonable quantities of rocks, ores and Minerals and to transport them for the
purposes of sampling, metallurgical testing and assaying. All Mining Operations
conducted by the Optionee shall be in accordance with good exploration,
development and mining practice, and in compliance with all applicable
legislation. Notwithstanding the foregoing, the Optionee shall use its best
efforts not to disturb or interfere with any other operations which may be
carried out on the Property.
5.0 Indemnity. The Optionee shall indemnify and save
the Optionor harmless from and against all losses, liabilities, claims, demands,
damages, expenses, suits, injury or death in any way referable to Mining
Operations conducted on the Property provided that the Optionor shall not be
indemnified for any loss, liability, claim, demand, damage, expense, injury or
death resulting from the negligence or wilful misconduct of the Optionor or its
employees, agents or contractors.
6.0 Covenants of the
Optionee.
During
the term of this agreement Big Bear Mining Corp. shall:
(a) comply
with all applicable laws, regulations, by-laws, rules, orders and ordinances
with respect to its operations hereunder in conducting Its exploration and
mining activities on the subject lands whether federal, provincial or municipal,
including discharging the duty to consult with all First Nations
groups;
(b) conduct
all operations in accordance with "Environmental Standards". "Environmental
Standards· means all laws, orders, rules and regulations of whatever authority,
as they may apply to and effect environmental and pollution control standards in
effect, whether federal, provincial or municipal.
(c) Subject
to the provisions of this agreement, the parties agree that Rainy River, its
servants, agents and xxxxxxx shall have full and free, access for Ingress and
egress and right-of-way through, over and upon the Property, for the purposes of
attending to its operations.
(d) Conduct
all exploration. development and mining operations and supervise the operation
of all sub-contractors in, on and under the Property in a careful manner and in
accordance with good mining practice and in compliance with all applicable
legislation and, without limiting the generality of the foregoing Big Bear shall
on the completion of its work or at the end of the term of this agreement leave
the subject property in a safe condition with all openings safeguarded in
accordance with the provisions of all applicable legislation or regulations
affecting them.
(e) Subject
to the other provisions of this agreement, Big Bear shall have complete
discretion and control with respect to all prospecting, exploration, development
or other mining work carried out on the Property provided however that all
operations on the Property shall be conducted in a manner which will cause the
least damage and defacement practicable under the circumstances. All access
roads shall be set out in consultation with the Optionor and both parties will
make their best efforts to co-operate so as to enable Big Bear to conduct its
operations in a reasonable manner while minimizing the damage and interference
to the Property and to any timber resources thereon. Big Bear shall reimburse
the Optionor or compensate them for all actual physical damage to the Property
and actual damages to improvements, roads, xxxxx, crops, timber, grass and
livestock resulting from Big Bear's operations. Upon completion of its work or
at the end of the term of this agreement Big Bear shall restore and remediate
the Property in accordance with good mining practices so as minimize permanent
damage or interference with the Property.
(f) Pay
or cause to be paid all workmen's wages and for all materials, supplies and
services delivered to or performed on or respect of the Property, so as to avoid
any Woodsman Lien or Construction Lien from arising.
(g) Pay
all timber dues or other assessments or charges which may be levied or imposed
under any statutory provision or otherwise arising, as a consequence of the
harvesting of any timber resources from the Property.
(h)
Maintain the property in good standing by doing all assessment work, recording
all exploration and development work done on the property In accordance with the
requirements of the Mining Act, RS.O. 1990, c.M-14 and amendments
thereto, paying all exploration licenses fees and by doing all other acts and
things that may be necessary in that regard until the termination or expiration
of the Agreement or the abandonment of rights and options granted
hereunder.
(i) Abide
by all directions of the Minister or any other governmental authority having
jurisdiction over its operations hereunder.
7.0 Production
Royalties. If the Optionee acquires the Mining Rights to the Property and
begins commercial production on any part of the Property, the Optionee shall pay
to the Optionor a royalty ("Production Royalty") calculated at 2% of the Net
Smelter Returns as defined, calculated and set forth herein:
Net
Smelter Returns means: the actual proceeds derived from any mint, mill, smelter,
refinery or purchaser for the sale of ores, metals or concentrates produced from
the Property and sold, after deducting from such proceeds the following charges
to the extent that they were not deducted by the purchaser in computing payment:
all smelting and refining charges, penalties, cost of transportation or ores,
metals or concentrates from the mining property to any mint, mill, smelter or
other purchaser; marketing costs, insurance of such ores, metals or
concentrates; and any export or import tax on said ores, metals or concentrates
levied in Canada or by the country into which such ore, metals or concentrates
are Imported if such charges or costs are deducted from the proceeds
received.
8.0 Accounting and Payment of Production
Royalty.
(a) While
the Production Royalty remains payable hereunder, the Optionee shall not later
than 90 days after the end of each quarter of each calendar year render to the
Optionor an interim statement of account in reasonable detail which statements
shall be accompanied by the payment of the Production Royalty payable pursuant
to this agreement for the previous quarter year.
(b) When
all Minerals in any calendar year in which the Production Royalty remains
payable have been sold and the revenues and expenditures determined, the
Optionee shall, within 90 days after the termination of such calendar year,
render a final statement of account in reasonable detail together with the
payment of the balance if any, of the Production Royalty for such previous
year.
(c) If any amounts have been paid in excess of those to which the Optionor's is entitled under the terms of this agreement in any year, the equivalent amount shall be deducted from the next Royalty payment or payments. All payments not made to the Optionor within the time periods set forth herein shall bear interest at the prime rate plus 1%.
9.0 Production
Royalty Buy-Back. The Optionee or its assigns shall have
the right at any time to purchase from the Optionor one-half (1/2) of the 2% Net Smelter
Returns Production Royalty by way of a onetime payment to the Optionors of the
sum One Million Dollars ($1,000,000.00) in Canadian funds. Upon such purchase
and payment being made, the Production Royalty shall thereafter be calculated as
being reduced to 1 % of the Net Smelter Returns.
10.0 Abandonment. The Optionee may at any
time, during the currency of the Option, abandon anyone or more of the claims
which comprise the Property. The Optionee shall give the Optionor notice in
writing of any abandonment. In the event that any of the claims comprising the
Property are abandoned (Including the termination of this Option Agreement
without the Optionee having exercised the Option), the Optionee will retransfer
the claims to the Optionor, which shall be in good standing for a period of at
least one year from the notice of abandonment.
11.0 Assignment. While this agreement
remains in effect the Optionee may sell, assign or otherwise transfer all or
part of its rights under this agreement and shall notify the Optionor within a
reasonable time in the event of any such transfer or assignment.
12.0 Buildings and
Equipment: In the event that the
Optionee abandons the working right and option granted to it herein, all
buildings, plant, equipment, machinery, tools, appliances and supplies which the
Optionee may have brought onto the Property, either before or during the period
of the working right and option, may be removed by the Optionee at any time not
later than nine (9) months after the abandonment of the working right and
option. Any buildings, plant, equipment, machinery, tools, appliances and
supplies left on the Property during the nine (9) month period shall be at the
Optionee's sole risk and, if not removed after the nine (9) month period, shall
become the Property of the Optionor. During the currency of the option, the
Optionor shall not remove from the Property any of the Optionee's buildings,
plant, equipment, machinery, tools, appliances and/or supplies.
13.0 Information. If the Optionee
abandons the working right and option granted to it under this agreement the
Optionee shall, on request provide to the Optionor, a copy of all
non-interpreted reports, maps, plans, drill logs and surveys of all work
pertaining to tile Property provided that the Optionee does not warrant the
accuracy of these reports, maps, plans, drill logs and surveys and shall not be
liable for any inaccuracies contained in them. The Optionee agrees that the
Optionor may disclose the details of this Agreement to its advisors and to
governmental, regulatory or First Nations groups.
14.0 Sale of
Optionor's Interest. If during or after the period of this
Purchase Option Agreement the Optionor wishes to sell, assign or transfer all or
any part of their rights in this Agreement, including the Production Royalty
("Property Interest') to any third party:
(a) the
Optionor shall, in writing, offer to sell, assign or transfer all or any part of
the Property Interest to the Optionee for a specified cash or cash equivalent
price ("Purchase Price"). Within 30 days of receipt of such notification of the
amount of the purchase price, the Optionee shall elect by written notice given
to the Optionor whether or not it will purchase the Property Interest for the
purchase price;
(b) If the Optionee elects to purchase the Property Interest, then within 30 days after its election to purchase being made, the Optionee shall pay the Purchase Price to the Owners and the Owner shall sell, assign and transfer their Property Interest to the Optionee and shall deliver such necessary deeds, assignments, transfers and other documents in registerable form as may be necessary to transfer ownership and title to the Property Interest to the Optionee. If the Optionee fails to notify the Optionor of its election within the said 30 day period it shall be deemed to have elected not to purchase the Property Interest; and
(c) If
the Optionee elects or has deemed to have elected not to purchase the Property
Interest the Optionor may sell the whole (but not part) of such Property
Interest to any third party for a purchase price not less than the Purchase
Price which was offered to the Optionee provided however that the third party
shall agree in writing to be bound for all purposes by this
agreement.
15.0
Notices. All
payments and communications which may be or are required to be given by either
party to the other shall (in the absence of any specific provision to the
contrary) be in writing and delivered, telecopied, or sent by prepaid registered
mail to the parties, at their following respective addresses and telecopier
numbers:
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Optionee:
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Big
Bear Mining Corp
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00000
X. Xxxxxx Xx., Xxxxx 000
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Xxxxxxxxxx,
Xxxxxxx 00000
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Tel:
(000) 000-0000
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xxxx@xxxxxxxxxxxxx.xxx
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Optionor:
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Xx.
Xxxxx English
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P.
O. Box 414
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Souris,
MB ROK 2CO Phone No: 000-000-0000
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e-mail
address:xxxxxxxx@xxx.xxx
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And if any payment or communication is sent by prepaid registered mail, it shall, be conclusively deemed to have been received on the third business day following the mailing of it and, if delivered or telecopied, it shall be conclusively deemed to have been received at the time of delivery or transmission. Notwithstanding the foregoing provisions with respect to mailing, in the event that it may be reasonably anticipated that, due to any strike, lock-out or Similar event involving an interruption in postal service, any payment or communication will not be received by the addressee by no later than the third business day following the mailing of it, then the mailing of any payment or communication must then be sent by an alternative means of transportation which it may reasonably be anticipated will cause the payment or communication to be received reasonably expeditiously by the addressee. Either party may from time to time change its address by notice to the other in accordance with this paragraph.
16.0 Further
Assurances and Covenants. Each party shall
execute such deeds, documents and give such other further assurances as are
necessary or appropriate in connection with the performance of its obligations
under this Agreement and to facilitate the acquisition of any and all necessary
regulatory approvals herein.
17.0 Benefit
of Successors. This agreement shall ensure
to the benefit of and be binding on the parties and their respective heirs,
executors, administrators, successors and assigns.
IN WITNESS
WHEREOF the parties have signed and sealed this agreement.
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SIGNED,
SEALED AND DELIVERED
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In
the presence of
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____________________.
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_____________________________
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President,
Xxxxx Xxx
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______________________________
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Secretary
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| Xxxxx Xxxx English for Rubicon Minerals Corporation | |
SCHEDULE
‘A’
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Township/Area
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Claim
Number
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Recording
Date
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Claim
Due Date
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Status
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Percent
Option
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Xxxxxxx
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3002055
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APR
15-02
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APR
15-10
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100%
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Xxxxxxx
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3002056
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APR
15-02
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APR
15-10
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100%
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Xxxxx
Xxxx
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0000000
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OCT
19-09
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OCT
19-11
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100%
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Shabu
Lake
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4229798
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OCT
19-09
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OCT
19-11
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100%
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Shabu
Lake
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4229799
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OCT
19-09
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OCT
19-11
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100%
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Shabu
Lake
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4229800
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OCT
19-09
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OCT
19-11
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100%
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|
|
Shabu
Lake
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4229801
|
OCT
19-09
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OCT
19-11
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100%
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|
|
Shabu
Lake
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4229802
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OCT
19-09
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OCT
19-11
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100%
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|
|
Shabu
Lake
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4229803
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OCT
19-09
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OCT
19-11
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100%
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Shabu
Lake
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4229804
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OCT
19-09
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OCT
19-11
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100%
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|
Shabu
Lake
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4229805
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OCT
19-09
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OCT
19-11
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100%
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Shabu
Lake
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4229806
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OCT
19-09
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OCT
19-11
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100%
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Shabu
Lake
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4229807
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OCT
19-09
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OCT
19-11
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100%
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Shabu
Lake
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4229808
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OCT
19-09
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OCT
19-11
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100%
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