MINERAL PROPERTY OPTION AGREEMENT
THIS AGREEMENT is dated for reference the 20th day of November,
1997.
BETWEEN: XXXXX XxXXXXXX
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxx
00000
("XxXxxxxx")
OF THE FIRST PART
AND: MIRANDA INDUSTRIES INC.
Xxxxx 000 - 0000 Xxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
("Miranda")
OF THE SECOND PART
WHEREAS XxXxxxxx has identified a mineral prospect suitable for
staking which the parties have agreed will be staked in the name
of Miranda on the terms and conditions contained in this
Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of
the premises and the mutual convenants and agreements hereinafter
contained, the parties hereto agree as follows:
1. DEFINITIONS
1.01 In this Agreement:
(a) "Exploration and Development" means any and all
activities comprising or undertaken in connection
with the exploration and development of the
Property, the construction of a mine and mining
facilities on or in proximity to the Property and
placing the Property into commercial production;
(b) "Net Smelter Returns" shall have the meaning
ascribed by Schedule B attached hereto.
(c) "Property" means and includes:
(i) those mining claims staked by Miranda which,
once filed, will be described in a Schedule A
to be initialled by the parties and appended to
this agreement;
(ii) all rights and appurtenances pertaining to the
mining claims including all water and water
rights of way, and easements, both recorded and
unrecorded, to which Miranda is entitled in
respect thereof;
(d) "Property Expenditures" means all reasonable and
necessary monies expended on or in connection with
Exploration and Development as determined in
accordance with generally accepted accounting
principles including, without limiting the generality
of the
foregoing:
(i) the cost of entering upon, surveying,
prospecting and drilling on the Property;
(ii) the cost of any geophysical, geochemical and
geological surveys relating to the Property;
(iii) all filing and other fees and charges
necessary or advisable to keep the
Property or any part or parts thereof in good
standing with any regulatory authorities having
jurisdiction;
(iv) all rentals, royalties, taxes (exclusive of
all income taxes and mining taxes based on
income and which are or may be assessed against
any of the parties hereto) and any assessments
whatsoever, whether the same constitute charges
on the Property or arise as a result of the
operation thereon;
(v) the cost, including rent and finance charges,
of all buildings, machinery, tools, appliances
and equipment and related capital items that may
be erected, installed and used from time to time
in connection with Exploration and Development;
(vi) the cost of construction and maintenance
of camps required for Exploration and
Development;
(vii) the cost of transporting persons,
supplies, machinery and equipment in
connection with Exploration and Development;
(viii)all wages and salaries (including fringe
benefits as are usually paid in Canadian mineral
exploration business) of persons engaged in
Exploration and Development and any assessments
or levies made under the authority of any
regulatory body having jurisdiction with respect
to such persons or supplying food, lodging and
other reasonable needs for such persons;
(ix) all costs of consulting and other
engineering services including report
preparation;
(x) the cost of compliance with all statutes,
orders and regulations respecting environmental
reclamation, restoration and other like work
required as a result of conducting Exploration
and Development; and
(xi) all costs of searching for, digging, working,
sampling, transporting, mining and procuring
diamonds, other minerals, ores, and metals from
and out of the Property;
2. ACQUISITION OF INTEREST
2.01 XxXxxxxx hereby grants to Miranda the exclusive right
and option to acquire an undivided 100% right, title and interest
in and to the Property for total consideration consisting of the
staking of the Property and cash payments to XxXxxxxx totalling
$138,500 to be made as follows:
(a) the staking of at least fourteen mining claims
covering the prospect identified by XxXxxxxx
and made known to Miranda, to be described in Schedule
A hereto:
(b) on or before November 20, 1998, the payment to
XxXxxxxx of $2,500;
(c) on or before November 20, 1999, the payment to
XxXxxxxx of $7,000;
(d) on or before November 20, 2000, the payment to
XxXxxxxx of $9,000;
(e) on or before November 20, 2001, the payment to
XxXxxxxx of $10,000;
(f) on or before November 20, 2002, the payment to
XxXxxxxx of $10,000; and
(g) on or before November 20, in each of the years 2003
through 2007, inclusive, the payment to XxXxxxxx of
$20,000.
2.02 This Agreement is an option only and the doing of any
act or the making of any payment by Miranda shall not obligate
Miranda to do any further acts or make any further payments.
3. COVENANTS OF MIRANDA
3.01 Miranda covenants and agrees with XxXxxxxx that during the
term of this Agreement:
(a) Miranda shall, as required by the State of Nevada,
record or cause to be recorded as assessment work all
work conducted on the property and otherwise shall
maintain the Property in good standing at all times
during the currency of this Agreement;
(b) Miranda shall carry on all operations on the Property
in a good and workmanlike manner and in compliance
with all applicable governmental regulations and
restrictions including but not limited to the posting
of any reclamation bonds and the conduct of all
reclamation work as may be required by any
governmental regulations or regulatory authorities;
(c) Miranda shall pay or cause to be paid any rates,
taxes, duties, royalties, Workers Compensation or
other assessments or fees levied with respect to the
Property or Miranda's operations thereon;
(d) Miranda shall maintain books of account in respect of
its expenditures and operations of the Property and,
upon reasonable notice, shall make such books
available for inspection by representatives of
XxXxxxxx;
(e) Miranda shall allow any duly authorized agent or
representative of XxXxxxxx to inspect the Property at
reasonable times and intervals and upon reasonable
notice given to Miranda, provided however that it is
agreed and understood that any such agent or
representative shall be at his own risk in respect
of, and Miranda shall not be liable for, any injury
incurred while on the Property, howsoever caused; and
(f) Miranda shall provide to XxXxxxxx, semi-annually, a
summary report outlining Miranda's progress on the
Property and shall provide to XxXxxxxx, annually, a
copy of all factual, non-interpretive data derived
from Miranda's operations on the Property.
4. ROYALTY
4.01 Miranda agrees that the Property shall be subject to a
royalty in favour of XxXxxxxx equal to 2.5% of Net Smelter
Returns until such time as XxXxxxxx has received therefrom the
total sum of $500,000 and 1% of Net Smelter Returns thereafter,
to be calculated and paid according to and otherwise governed by
Schedule B hereto. At any time prior to the receipt by XxXxxxxx
of $500,000 in royalty payments, the Optionor's 2.5% Net Smelter
Returns royalty can be bought down to 1% by the payment by
Miranda to XxXxxxxx of the difference between $500,000 and the
amount actually received in royalty payments by XxXxxxxx to that
point in time.
5. TRANSFER OF TITLE
5.01 Upon execution of this Agreement, and the staking of the
claims comprising the Property, the
claims shall be recorded in the name of Miranda, and the Property
shall be registered in the name of Miranda.
5.02 Upon Miranda making the payments pursuant to article 2,
XxXxxxxx shall have no further rights to the Property other than
the royalty interest pursuant to article 4.
6. RIGHT OF ENTRY
6.01 During the currency of this Agreement, Miranda, its
servants, agents and workmen and any persons duly authorized by
Miranda, shall have the right of access to and from and to enter
upon and take possession of and prospect, explore and develop the
Property in such manner as Miranda in its sole discretion may
deem advisable and shall have the right to remove and ship
therefrom ores, minerals, metals, or other products recovered in
any manner therefrom.
6.02 Miranda shall be provided access to all maps, reports,
assay results and other technical data in the possession or under
the control of XxXxxxxx with respect to the Property and shall be
entitled to take copies thereof.
7. REPRESENTATIONS AND WARRANTIES
7.01 XxXxxxxx hereby represents and warrants that:
(a) upon staking of the Property, Miranda will be the sole
and exclusive registered and beneficial owner of the
mineral claims comprising the Property;
(b) XxXxxxxx has not done anything whereby the mineral
claims comprising the Property may be in any way
encumbered.
7.02 Miranda hereby represents and warrants that:
(a) Miranda has full corporate power and authority to
enter into this Agreement and the entering into of
this Agreement does not conflict with any applicable
laws or with the charter documents of Miranda or any
contract or other commitment to which Miranda is
party; and
(b) the execution of this Agreement and the performance of
its terms have been duly authorized by all necessary
corporate actions including the resolution of the
Board of Directors of Miranda.
8. CONFIDENTIALITY OF INFORMATION
8.01 XxXxxxxx shall treat all data, reports, records and other
information of any nature whatsoever relating to this Agreement
and the Property as confidential. While this Agreement is in
effect, XxXxxxxx shall not, without the express written consent
of Miranda, disclose to any third party any information
concerning the Property or any operations thereon, nor shall
XxXxxxxx buy, sell or otherwise deal in the shares of Miranda
while any material, confidential information in its possession
relating to this Agreement or the Property remains undisclosed to
the general public.
9. ASSIGNMENT
9.01 With the consent of the other party, which consent shall
not be unreasonably withheld, each party has the right to assign
all or any part of its interest in this Agreement and in the
Property, subject to the terms and conditions of this Agreement.
It shall be a condition precedent to any such assignment that
the assignee of the interest being transferred agrees to be bound
by the terms of this Agreement, insofar as they are applicable.
Notwithstanding the foregoing, Miranda has the unfettered right
to assign the benefit
of this Agreement and its interest in the Property to its wholly-
owned U.S. subsidiary.
10. TERMINATION
10.01 This Agreement shall terminate upon the occurrence of
one of the following events:
(a) in the event that Miranda, not being at the time in
default under any provision of this Agreement, gives
30 days' written notice to XxXxxxxx of the
termination of this Agreement;
(b) in the event that Miranda shall fail to comply with
any of the requirements to make cash payments in the
amounts and within the time limits set forth in
article 2;
(c) in the event that Miranda shall fail to comply with
any of its obligations hereunder, other than the
obligations referred to in subparagraph 10.01(b), and,
subject to paragraph 11.01, within 30 days of receipt
by Miranda of written notice from XxXxxxxx of such
default, Miranda has not:
(i) cured such default, or commenced proceedings to
cure such default and prosecuted same to
completion without undue delay; or
(ii)given XxXxxxxx notice that it denies that such
fault has occurred.
In the event that Miranda gives notice that it denies that a
default has occurred, Miranda shall not be deemed in default
until the matter shall have been determined finally through such
means of dispute resolution as such matter has been subjected to
by either party.
10.02 Upon termination of this Agreement under paragraph
10.01, Miranda shall:
(a) if termination occurs after May 31 of the year in
which it occurs, have paid the annual maintenance fees
on the Property for that year to the Bureau of Land
Management;
(b) transfer title to the Property to XxXxxxxx free and
clear of all liens, charges and encumbrances;
(c) turn over to XxXxxxxx copies of all non-interpretive
maps, reports, sample results, contracts and other
data and documentation in the possession of Miranda
or, to the extent within Miranda's control, in the
possession of its agents, employees or independent
contractors, in connection with its operations on the
Property; and
(d) ensure that the Property is in a safe condition and
complies with all environmental and safety standards
imposed by any duly authorized regulatory authority.
10.03 Upon the termination of this Agreement under paragraph
10.01, Mirada shall cease to be liable to XxXxxxxx in debt,
damages or otherwise save for the performance of those
obligations in paragraph 10.02.
10.04 Upon termination of this Agreement under paragraph
10.01, Miranda shall vacate the Property within a reasonable time
after such termination, but shall have the right of access to the
property for a period of six months thereafter for the purpose of
removing its chattels, machinery, equipment and fixtures.
11. FORCE MAJEURE
11.01 The time for performance of any act or making any
payment or any expenditure required under
this Agreement or the underlying Agreement shall be extended by
the period of any delay or inability to perform due to fire,
strikes, labour disturbances, riots, civil commotion, wars, acts
of God, any present or future law or governmental regulation, any
shortages of labour, equipment or materials, or any other cause
not reasonably within the control of the party in default, other
than lack of finances.
12. RIGHT OF FIRST REFUSAL
12.01 In the event that Miranda hereafter elects to joint
venture the Property, Miranda shall first offer to Cordex
Exploration Company of 000 Xxxx 0xx Xxxxxx, Xxxx, Xxxxxx, 00000,
the one-time first right to become Miranda's joint venture
partner on the Property, on such reasonable terms and conditions
as Miranda shall specify.
13. AFTER-ACQUIRED PROPERTY
13.01 In the event that at any time hereafter either party
shall acquire any mining claim, lease, or other mineral right or
interest within a one mile radius of the outside boundary of the
Property to be described in Schedule A hereto, such interest
shall be deemed to have been acquired on behalf of and for the
benefit of the parties, pursuant to the terms of this Agreement
and such after-acquired interest as aforesaid shall be included
in and shall form a part of the definition of "Property"
contained in paragraph 1.01 and shall be subject to this
Agreement as if it had been originally so included.
14. NOTICES
14.01 Any notice, election, consent or other writing required
or permitted to be given hereunder shall be deemed to be
sufficiently given if delivered or mailed postage prepaid or if
given by telegram, telex or telecopier, addressed as follows:
In the case of XxXxxxxx: XXXXX XxXXXXXX
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxx
00000
Fax: (000) 000-0000
In the case of Miranda: MIRANDA INDUSTRIES INC.
Xxxxx 000
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Fax: (000) 000-0000
and any such notice given as aforesaid shall be deemed to have
been given to the parties hereto if delivered, when delivered, or
if mailed, on the third business day following the date of
mailing, or, if telegraphed, telexed or telecopied, on the same
day as the telegraphing, telexing or telecopying thereof provided
however that during the period of any postal interruption in
Canada or the United States any notice given hereunder by mail
shall be deemed to have been given only as of the date of actual
delivery of the same. Any party may from time to time by notice
in writing change its address for the purposes of this paragraph
14.01.
15. GENERAL TERMS AND CONDITIONS
15.01 The parties hereto hereby covenant and agree that they
will execute such further agreements, conveyances and assurances
as may be requisite, or which counsel for the parties may deem
necessary to
effectually carry out the intent of this Agreement.
15.02 This Agreement shall constitute the entire agreement
between the parties with respect to the Property. No
representations or inducements have been made save as herein set
forth. No changes, alterations or modifications of this
Agreement shall be binding upon either party until and unless a
memorandum in writing to such effect shall have been signed by
all parties hereto. This Agreement shall supersede all previous
written, oral or implied understandings between the parties with
respect to the matters hereby.
15.03 Time shall be of the essence of this Agreement.
15.04 The titles to the articles in this Agreement shall not
be deemed to form part of this Agreement but shall be regarded as
having been used for convenience of reference only.
15.05 All currency references contained in this Agreement
shall be deemed to be references to United States funds.
15.06 Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision shall be prohibited by
or be invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
15.07 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 set forth verbatim herein. Defined terms contained
in this Agreement shall have the same meanings where used in the
Schedules.
15.08 This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Nevada and the laws
of the United States of America applicable therein.
15.09 This Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
IN WITNESS WHEREOF this Agreement has been executed by the
parties hereto as of the day and year first above written.
SIGNED,SEALED and DELIVERED
by XXXXX XxXXXXXX in the
presence of:
/s/ Xxxxx XxXxxxxx /s/ Xxxxx XxXxxxxx
THE COMMON SEAL OF MIRANDA c/s
INDUSTRIES INC. was hereunto
affixed in the presence of:
/s/ Xxxxxx Xxxxx
SCHEDULE "A"
Claim Name: File Date: NMC# Sec: T & R:
Dune #1 November 18, 1997 781565 3 T16N R32E
Dune #2 November 18, 1997 781566 3 T16N R32E
Dune #3 November 18, 1997 781567 3 T16N R32E
Dune #4 November 18, 1997 781568 3 T16N R32E
Dune #5 November 18, 1997 781569 3 T16N R32E
Dune #6 November 18, 1997 781570 3 T16N R32E
Dune #7 November 18, 1997 781571 3 T16N R32E
Dune #8 November 18, 1997 781572 3 T16N R32E
Dune #9 November 18, 1997 781573 3 T16N X00X
Xxxx #00 November 18, 1997 781574 3 T16N X00X
Xxxx #00 November 18, 1997 781575 0,00 X00X X00X
Xxxx #00 November 18, 1997 781576 3 T16N X00X
Xxxx #00 November 18, 1997 781577 0,00 X00X X00X
Xxxx #00 November 18, 1977 781578 0,00 X00X X00X
XXXXXXXX "X"
NET SMELTER RETURNS
1. "Net Smelter Returns" shall mean all proceeds, received or
deemed received from any mint, smelter, refinery, reduction
works or other purchaser from the sale of ores, metals,
concentrates or other mineral products produced or deemed to
be produced from the Property after deducting from such
proceeds to the extent that they are actually incurred and
were not deducted by the purchaser in computing payment:
treatment, smelting and refining charges; penalties; costs of
transportation of ores, metals, concentrates or other mineral
products from the Property to any mint, smelter refinery,
reduction works or other purchaser; and insurance on such
ores, metals, concentrates or other mineral products.
2. The amount of Net Smelter Returns shall be calculated as
follows:
(a) For gold produced from the Property, the Net Smelter
Returns shall be calculated by determining, without
duplication, the number of ounces of fine gold
delivered to or to the order of Miranda by, purchased
by, or outturned to Miranda's pool account or accounts
by, any mint or refinery and the number of ounces of
gold otherwise sold to any purchaser during any calendar
quarter, and multiplying such number of ounces by the
average of the daily London Bullion Brokers PM Gold
Fixing during such quarter, less the deductions
specified in paragraph 1, as applicable.
(b) For silver produced from the Property, the Net Smelter
Returns shall be calculated by determining, without
duplication, the number of ounces of silver delivered to
or to the order of Miranda by, purchased by, or
outturned to Miranda's pool account or accounts by , any
mint or refinery and the number of ounces of silver
otherwise sold to any purchaser during any calendar
quarter, and multiplying such number of ounces by the
average of the daily Handy & Harmon Noon Silver
Quotation during such quarter, less the deductions
specified in paragraph 1, as applicable.
(c) For minerals other than gold and silver produced from
the Property the Net Smelter Returns shall be
calculated based on the amounts actually received during
any calendar quarter from the sale of ores, metals,
concentrates or other mineral products, less the
deductions specified in paragraph 1, as applicable.
(d) Net Smelter Returns shall be calculated quarterly and
the amount of the Net Smelter Returns calculated in
respect of any calendar quarter shall be paid to
XxXxxxxx within 30 days of the end of the quarter.
Payments shall be made in U.S. dollars and shall be
accompanied by detailed calculations and supporting
documentation showing the amounts payable.
(e) For the purposes of subparagraph (a) and (b) above, the
average price of gold or silver for any calendar
quarter shall be determined by dividing the sum of all
daily prices posted during the quarter by the number of
days during the quarter that the prices were posted.
The posted price shall be obtained from The Wall Street
Journal, Reuters, E. & MJ or another reliable source.
3. Payments of Net Smelter Returns for a calendar year shall be
subject to adjustment within 3 months after the end of the
calendar year based on an audit. The year end calculation of
Net Smelter Returns shall be audited by a firm of Chartered
Accountants designated by Miranda (which may be Miranda's
auditor) and:
(a) copies of the audited reports shall be delivered to
Miranda and XxXxxxxx by the chartered accounting firm;
and
(b) either party shall have three (3) months after receipt
of any audited report to object thereto in writing to
the other party, and failing such objection, such report
shall be deemed correct; and
(c) in the event of a reaudit, all costs relating to such
reaudit shall be paid by Miranda unless the reaudit is
requested by XxXxxxxx and the original audit is found to
be substantially correct, in which case such costs shall
be paid by XxXxxxxx.
