EXHIBIT 4.21
SHOAL LAKE- 1
THIS OPTION AGREEMENT made as of January 31, 2003
BETWEEN:
PARKSIDE 2000 RESOURCES CORP., incorporated under the laws
of British Columbia and having an office at 711 - 000 Xxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
("Parkside")
AND:
KENORA PROSPECTORS & MINERS, LIMITED, incorporated under
the laws of Ontario and having an office at 000 0xx Xxxxxx
Xxxxx, Xxxxxx, Xxxxxxx, X0X 0X0
("Kenora")
WHEREAS:
A. Kenora is the sole recorded and beneficial owner of 28 patented claims
located in Glass Township Mining Division, Ontario and more
particularly described in Schedule A attached to this Agreement (the
"Kenora Property");
C. Kenora has agreed to grant to Parkside the exclusive right and option
to acquire an undivided 100% interest in the mineral rights to the
Kenora Property subject to the terms and conditions hereinafter
provided.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT the parties have agreed as follows:
1. INTERPRETATION
1.01 In this Agreement the following words, phrases and expressions
shall have the following meanings:
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(a) "COMMENCEMENT OF COMMERCIAL PRODUCTION" means any
milling operations of ore from the Kenora Property
conducted by Parkside and shall include any milling
operations in order to obtain a bulk sample for
startup and/or metallurgical testing provided that
any metals payable recovered from the bulk sample and
sold for revenue at a refinery shall be subject to
the NSR Royalty payable in accordance with Schedule
B.
(b) "KENORA PROPERTY" means the 28 patented claims
located in Glass Township Mining Division, Ontario
and more particularly described in Schedule A.
(c) "LAC AGREEMENT" means Royalty Purchase Agreement
dated the 17th day of December, 2002 between Kenora
and Lac Minerals Ltd. whereby Kenora may purchase the
royalty held by Lac Minerals Ltd. for $100,000
payable as to $50,000 on or before December 31, 2003
and as to $50,000 payable on or before December 31,
2004.
(d) "MINERAL RIGHTS" means the right to conduct Mining
Operations for all precious and base minerals.
(e) "MINING OPERATIONS" means every kind of work done on
or in respect of the Kenora Property or any portion
thereof including, without limiting generality,
investigating, prospecting, exploring, diamond
drilling, preparing a feasibility study, property
maintenance, driving adits and ramps and extracting
ore.
(f) "NSR ROYALTY" means the net smelter returns royalty
calculated and payable from the Kenora Property in
accordance with the royalty agreement attached as
Schedule B.
(g) "OPTION" shall have the meaning attributed to it in
subsection 3.01.
(h) "PARTY" or "PARTIES" means the initial parties to
this Agreement and their respective successors and
permitted assigns which become parties to this
Agreement.
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(i) "THIS AGREEMENT" refers to and collectively includes
this Agreement and every Schedule attached to this
Agreement.
1.02 Words importing the singular number shall mean and include the
plural and vice versa, and words importing the masculine
gender shall include the feminine and neuter genders.
1.03 Any Schedules annexed hereto shall form part of this
Agreement.
2. REPRESENTATIONS AND WARRANTIES
2.01 Kenora represents and warrants to Parkside that:
(a) It is a company duly incorporated, organized and
validly subsisting and in good standing in the
jurisdiction of its incorporation;
(b) It has the right to enter into this Agreement and
that all corporate and/or other actions required to
authorize it to enter into and perform this Agreement
have been properly taken, subject to obtaining any
consent which may be required from the appropriate
regulatory authorities;
(c) Kenora is the sole legal and beneficial owner of the
Kenora Property free and clear of all liens, charges
and encumbrances except for those set out in Schedule
C attached to this Agreement and the Lac Agreement;
(d) subject to Schedule C, there are no pending or
threatened actions, suits, claims or proceedings
regarding the Kenora Property;
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(e) the mineral claims have been duly recorded in
accordance with the applicable laws of Ontario and
are in good standing;
(f) neither it nor any of its predecessors in interest or
title have done anything whereby the Kenora Property
may become encumbered, other than as disclosed in
Schedule C; and
(g) all activities carried out on the Kenora Property by
Kenora and, to the best of its knowledge, any prior
parties who optioned the Kenora Property prior to the
date of this Agreement, were carried out in strict
compliance with all applicable environmental laws and
regulation;
(h) there are no environmental hazards or liabilities
currently existing or relating to the Kenora
Property; and
(i) the Lac Agreement is a valid, subsisting and the
entire agreement enforceable according to its terms,
is in full force and effect as at the date of this
Agreement.
2.02 Parkside represents and warrants to Kenora that:
(a) it is a company duly incorporated, organized and
validly subsisting and in good standing in the
jurisdiction of its incorporation; and
(b) it has the right to enter into this Agreement and
that all corporate and/or other actions required to
authorize it to enter into and perform this Agreement
have been properly taken, subject to it obtaining any
consent that may be required from the appropriate
regulatory authorities.
2.03 The representations and warranties hereinbefore set out are
conditions on which the Parties have relied in entering into
this Agreement and shall survive the acquisition of any
interest in the Kenora Property by Parkside and the Parties
will indemnify and save each other harmless
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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 made by them and
contained in this Agreement.
3. OPTION
3.01 Kenora hereby gives and grants unto Parkside the sole and
exclusive right and option (hereinafter called the "Option")
to acquire an undivided 100 percent beneficial interest in the
Mineral Rights to the Kenora Property clear of encumbrances,
save and except for the NSR Royalty, pursuant to subsection
5.01.
3.02 Parkside may exercise the Option by:
(a) paying $125,000 on or before February 14, 2003 into
trust with Kenora's lawyer which funds shall be used
to eliminate the charges against the Kenora Property
listed in Schedule C, payment of taxes, and any and
all other liabilities related to the Kenora Property,
the balance after such payments to be retained by
Kenora;
(b) paying to Kenora a total of CAN$125,000 on or before
August 27, 2003;
(c) paying to Kenora a total of CAN$125,000 on or before
August 27, 2004;
(d) paying to Kenora a total of CAN$125,000 on or before
August 27, 2005; and
(e) paying to Kenora a total of CAN$1,000,000 on or
before August 27, 2006.
3.03 Except as otherwise herein specifically provided, this is an
option agreement only and nothing herein contained and no act
done, payment made or amount expended hereunder shall obligate
Parkside to do any
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further or other act, to make any further or other payment or
to expend any further amount in doing Mining Operations
hereunder, and in no event shall this Agreement or any act
done, payment made or amount expended in doing Mining
Operations hereunder be construed as creating an obligation of
Parkside to perform any other Mining Operations hereunder or
to proceed with a view to bringing the Kenora Property or any
part thereof into production.
4. RIGHT TO CONDUCT MINING OPERATIONS
4.01 Subject to the provisions of this Agreement, Parkside shall
have the sole and exclusive right:
(a) to enter into and upon the Kenora Property;
(b) to have exclusive and quiet possession of the Kenora
Property for the purposes of conducting Mining
Operations;
(c) to carry out such Mining Operations using its own
in-house personnel or outside contractors as Parkside
in its sole discretion considers advisable including
bringing or erecting upon the Kenora Property
machinery, equipment and ancillary facilities
including, without limiting the generality of the
foregoing, housing, utility services, roads,
conveyors, plants, buildings, waste areas, tailing
areas and disposal areas or systems; and
(d) to remove from the Kenora Property and sell or
otherwise dispose of minerals or metals derived
therefrom and in order to obtain bulk samples for
startup and/or metallurgical testing provided that
any metals payable recovered from the bulk sample and
sold for revenue at a refinery shall be subject to
the NSR Royalty payable in accordance with Schedule
B.
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5. ROYALTY
5.01 There shall be reserved to Kenora the NSR Royalty from the
Commencement of Commercial Production.
5.02 Kenora hereby grants to Parkside a right of first refusal on
the purchase and sale of the NSR Royalty. If Kenora wishes to
sell, or receive any good faith offer to purchase all or any
part of the NSR Royalty (the "OFFERED INTEREST") which it is
prepared to accept, Kenora shall give written notice to
Parkside of all the material terms of such proposed sale (the
"SALE TERMS"). The Sale Terms may contain a sale price stated
in cash and/or equity consideration. Parkside shall then have
30 days, calculated from the date of receipt of the notice,
within which to elect to purchase the Offered Interest on
terms not less favourable to Kenora than the terms contained
in the Sale Terms, it being agreed that Parkside shall be
entitled to offer cash and/or equity equivalent in value to
the equity portion of the consideration identified in the Sale
Terms. If Parkside does not make an election within such 30
day period, Parkside shall be deemed to have elected not to
purchase the Offered Interest. If Parkside does not elect to
purchase the Offered Interest, then Kenora may sell the
Offered Interest to any good faith third party on terms no
more favourable to such third party than the terms contained
in the Sale Terms within the 45 day period immediately
following Parkside's 30 day election period. If Kenora does
not complete the sale of the Offered Interest within such 45
day sale period, then Parkside shall once again have the right
of first refusal to purchase all or any part of the Offered
Interest not sold by Kenora. Nothing in this section shall
apply to the issuance of shares in the capital of, or to a
change in control of, any Party.
6. COVENANTS
6.01 Kenora covenants and agrees with Parkside to:
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(a) 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 Parkside hereunder;
(b) make available to Parkside and its representatives
all records, files, data, reports, drill core, drill
logs and all other geological information relating to
the Kenora Property and permit Parkside and its
representatives at their own expense to take
abstracts therefrom and make copies thereof;
(c) cooperate fully with Parkside in obtaining any other
rights on or related to the Kenora Property as
Parkside deems desirable; and
(d) promptly provide to Parkside with any and all notices
and correspondence form government agencies in
respect of Mineral Rights associated with the Kenora
Property;
(e) to indemnify and save Parkside, their directors,
officers, employees or representatives harmless from
all claims and demands, costs (including reasonable
lawyers' fees and expenses incurred by Parkside),
damages, actions, suits or other proceedings
whatsoever arising out of or attributable to any
environmental liability associated with prior work
conducted on the Kenora Property prior to the date
hereof; and
(f) make the payments referred to in the Lac Agreement in
accordance with its terms upon receipt of the funds
from Parkside.
6.02 Parkside covenants and agrees with Kenora to:
(a) to carry out Mining Operations in a prudent and
workmanlike manner to the best of its ability and
using its best efforts, skill and judgment and in
accordance with good mining, processing and
engineering practices generally prevailing in the
mining industry
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and in accordance with all applicable laws and
regulations and all agreements, permits and licenses
relating to the Kenora Property including all
environmental laws;
(b) to pay and discharge all wages and accounts for
material and services and all other costs and
expenses that may be incurred by Parkside in
connection with the Mining Operations on the Kenora
Property, and to save Kenora harmless from and
against all liens in respect of such Mining
Operations which may be filed against the Kenora
Property, and in the event of any liens being so
filed, to proceed forthwith to have the same removed,
provided that the foregoing provision shall not
prevent Parkside from properly contesting in good
faith any claims for liens which Parkside considers
unjustified;
(c) to maintain any mineral claims in good standing under
the Mineral Act (Ontario);
(d) to indemnify and save Kenora, its directors,
officers, employees or representatives harmless from
all claims and demands, costs (including reasonable
lawyers' fees and expenses incurred by Kenora),
damages, actions, suits or other proceedings
whatsoever arising out of or attributable to the
negligent acts or omissions of Parkside, its
employees or representatives under this Agreement;
(e) to permit Kenora, its employees or duly authorized
representatives, on reasonable notice to Parkside,
access to the Kenora Property and technical data in
order to examine any Mining Operations carried out by
or on behalf of Parkside and results obtained,
provided however, that neither Kenora, nor its
representatives shall interfere with or obstruct the
operations of Parkside, its employees or agents on
the Kenora Property, and provided further that Kenora
and its representatives shall enter upon the Kenora
Property at its
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own risk, and Kenora hereby agrees to indemnify and
save Parkside harmless, its directors, officers,
employees or representatives harmless from all claims
and demands, costs (including reasonable lawyers'
fees and expenses incurred by Parkside), damages,
actions, suits or other proceedings whatsoever
arising out of or attributable to the negligent
activities of Kenora, its employees or
representatives, as the case may be, on the Kenora
Property; and
(f) to leave the Kenora Property upon termination of this
Agreement, if the Option is not exercised, in a
condition that is substantially similar to the
condition the Kenora Property was in when received by
Parkside.
7. SURFACE RIGHTS
7.01 Kenora agrees to enter into a 20 year lease with Parkside in
accordance with the lease agreement attached hereto as
Schedule D.
8. DEFAULT
8.01 If Parkside should be in default in making any payments or
performing any other of its obligations hereunder, Kenora may
give written notice to Parkside specifying the default.
Parkside shall not lose any rights granted under this
Agreement so long as, within thirty (30) days after the giving
of such notice of default by Kenora, Parkside takes reasonable
steps to cure the specified default. If Parkside fails to take
reasonable steps within the thirty (30) day period to cure the
default Kenora shall be entitled thereafter to terminate this
Agreement by giving written notice of termination to the
Parkside.
9. TERMINATION
9.01 If this Agreement is terminated prior to the exercise of the
Option by Parkside, Parkside shall:
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(a) return to Kenora at no cost to Kenora 100% undivided
right, title and interest in the Kenora Property, in
good standing, free and clear of all liens and
encumbrances;
(b) deliver upon written request by Kenora, copies of all
exploration and development data not previously
delivered; and
(c) remove from the Kenora Property within ninety (90)
days of the effective date of termination all mining
facilities erected, installed or brought upon the
Kenora Property by or at the instance of Parkside,
and any mining facilities remaining on the Kenora
Property after the expiration of the said period of
ninety (90) days shall, without compensation to
Parkside, become the property of Kenora.
10. ASSIGNMENT OF INTEREST
10.01 During the subsistence of the Option, Parkside may not sell,
transfer or assign this Agreement or all or any part of their
right or beneficial interest in the Kenora Property without
the express written consent of the other Party, such consent
not to be unreasonably withheld.
11. NOTICE
11.01 All notices, demands and requests required or permitted to be
given under this Agreement (a "Communication") shall be in
writing and may be delivered personally, by facsimile, sent by
or may be forwarded by first class prepaid registered mail
addressed as follows:
(a) if to Kenora:
Kenora Prospectors & Miners, Limited
000 0xx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxx X0X 0X0
Fax: 000-000-0000
ATTENTION: XXX XXXXXX, PRESIDENT
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(b) if to Parkside:
Parkside 2000 Resources Corp.
000 - 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Fax: (000) 000-0000
ATTENTION: XXXXXXX XXXXXX, SECRETARY
or to such other address or addresses as either Party may from
time to time specify by Communication to the other Party.
11.02 Any Communication delivered personally or sent by facsimile
shall be deemed to have been given and received on the
business day next following the date of sending. Any
Communication mailed as aforesaid shall be deemed to have been
given and received on the fifth business day following the
date it is posted. However, if there is a mail strike,
slowdown or other labour dispute which might affect mail
delivery, then the Communication shall be effective only if
delivered personally or sent by facsimile.
12. ARBITRATION
12.01 If any question, difference or dispute shall arise between the
Parties in respect of this Agreement, whether arising before
or after the expiration of any term of this Agreement
(including any dispute as to whether an issue is arbitrable)
shall be determined by the award of three arbitrators to be
named as follows:
(a) the party or parties sharing one side of the dispute
shall name an arbitrator and give notice thereof to
the party or parties sharing the other side of the
dispute;
(b) the party or parties sharing the other side of the
dispute shall, within fourteen (14) days of receipt
of the notice, name an arbitrator; and
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(c) the two arbitrators so named shall, within fifteen
(15) days of the naming of the latter of them, select
a third arbitrator.
12.02 The decision of the majority of the arbitrators shall be made
within thirty (30) days after the selection of the latter of
them. The expense of the arbitration shall be borne equally by
the Parties to the dispute. If the parties on either side of
the dispute fail to name their arbitrator within the time
limited or to proceed with the arbitration, the arbitrator
named may decide the question. The arbitration shall be
conducted in accordance with the provisions of the ARBITRATION
ACT, 1991 (Ontario), and the decision of the arbitrator or a
majority of the arbitrators, as the case may be, shall be
conclusive and binding upon all the Parties.
13. PAYMENT OF TAXES
13.01 Parkside shall pay all rent and taxes associated with the
Mining Rights attaching to the Kenora Property.
14. ENTIRE AGREEMENT
14.01 This Agreement contains the entire understanding between the
Parties relating to the Kenora Property and entirely
supersedes all negotiations, prior correspondence, letters of
intent, prior agreements or understandings.
15. GENERAL
15.01 The Parties shall promptly execute or cause to be executed all
documents, deeds, conveyances and other instruments of further
assurance which may be reasonably necessary or advisable to
carry out fully the intent of this Agreement or to record
wherever appropriate the respective interests from time to
time of the Parties in or with respect to the Kenora Property
or the Mining Operations thereon.
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15.02 A waiver or any breach of a provision of this Agreement shall
not be binding upon a Party unless the waiver is in writing
and such waiver shall not affect such Party's rights in
respect of any subsequent breach.
15.03 Any modifications of this Agreement shall not be effective
unless made in writing and signed by authorized
representatives of all Parties.
15.04 All terms and provisions of this Agreement shall run with and
be binding upon the lands and estates affected thereby during
the term hereof.
15.05 The Agreement shall be governed by and construed in accordance
with the laws of Ontario and the laws of Canada applicable
therein.
15.06 This Agreement shall enure to the benefit of and be binding
upon the Parties hereto, their respective successors and their
permitted assigns.
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15.07 Time is of the essence of this Agreement and no extension or
variation of this Agreement shall operate as a waiver of this
provision.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
PARKSIDE 2000 RESOURCES CORP.
By: /S/ XXXXXX X. XXXXXXX
-------------------------------------
(Title: Xxxxxx X. Xxxxxxx, President)
KENORA PROSPECTORS & MINERS, LIMITED
By: /S/ XXX XXXXXX
-------------------------------------
(Title: President & CEO)
Schedule A - 1
Shoal Lake
This is Schedule A to the Option Agreement
between PARKSIDE 2000 RESOURCES CORP. AND
KENORA PROSPECTORS & MINERS, LIMITED
made as of January 31, 2003
DESCRIPTION OF KENORA PROPERTY
The Kenora Property consists of the following patented claims:
X-000, X-000, X-000, X-000 (X XXX 0000), X-000 XX, X-000 (K-2460), D-212, D-213
(K-2462), D-214 (K-2938), D-215 (K-2548), D-216, X-000, X-000 (X-0000-00),
X-000, X-000, X-000, X-000 (K-1269), S-74, S-97 (K-3055-58), S-151 PARTIAL, MIN.
XXX. X-000, X-000, X-000, X-000, X-000, X-000, S-126, S-150, D-203 (K-2461)
Schedule B - 1
Shoal Lake
This is Schedule B to the Option Agreement
between PARKSIDE 2000 RESOURCES CORP. AND
KENORA PROSPECTORS & MINERS, LIMITED
made as of January 31, 2003
NET SMELTER RETURNS ROYALTY
1. NET SMELTER RETURNS ROYALTY
1.01 This NSR Royalty shall be read in conjunction with the Net
Smelter Returns Royalty pursuant to the agreement between
Parkside and Machin Mines Ltd., dated as of January 31, 2003
(the `Machin Agreement") whereby the total ounces produced for
the purposes of calculating the NSR Royalty pursuant to 1.02
shall be equal to the combined ounces produced pursuant to
this Agreement and the Machin Agreement.
1.02 A NSR Royalty has been reserved to Kenora under subsection
5.01 of the Agreement. The NSR Royalty shall be:
(a) based on the price of the gold sales during the
calculation period so that the royalty shall be on
the first 350,000 ounces of gold after Commencement
of Commercial Production equal to 2% net smelter
returns only if the average LME price of gold is
equal to or above US$400;
(b) on the next 650,000 ounces of gold after Commencement
of Commercial Production equal to 2% net smelter
returns; and
(c) on each ounce of gold in excess of 1,000,000 ounces
after Commencement of Commercial Production equal to
1% net smelter returns.
Schedule B - 2
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For clarity, although this royalty is calculated
based on the price of the gold sales and ounces of
gold produced, the royalty shall be paid on all
payable metals.
2. DEFINITION
2.01 "Net Smelter Returns" or "NSR" for purposes of the Agreement
are defined as follows:
(a) where all or a portion of the ores, concentrates or
bullion derived from the Kenora Property are sold as
ores, concentrates or bullion, the Net Smelter
Returns shall be the gross amount received form the
purchaser following sale thereof after deduction, if
applicable under the sale contract, of all
smelter/refinery charges, penalties and other
deductions; or
(b) where all or a portion of the said ores, concentrates
or bullion derived form the Kenora Property are
treated in a smelter/refinery and a portion of the
metals recovered therefrom are delivered to, and sold
by Parkside, the Net Smelter Returns shall be the
gross amount received form the purchaser following
sale of the metals so delivered, after deduction of
all smelter charges, penalties and other deductions,
, and, if applicable under the smelter/refinery
contract, all costs of transporting and insuring the
metals from the smelter to the place of final
delivery by the purchaser.
Where any ores, concentrates or bullion are sold to, or
treated in, a smelter/refinery owned or controlled by
Parkside, the pricing for that sale or treatment will be
established by Parkside on an arms-length basis so as to be
fairly competitive with pricing, net of treatment charges and
other related costs, then available on world markets for
product of like quantity and quality.
Schedule B - 3
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3. PAYMENT OF NET SMELTER RETURNS
3.01 Parkside shall calculate the Net Smelter Returns and the sums
to be disbursed to Kenora as at the end of each calendar
quarter.
3.02 Parkside shall, within 60 days on the earlier of: (a) after a
given months production or, (b) quarterly, as and when any Net
Smelter Returns are available for distribution:
(a) pay or cause to be paid to Kenora in accordance with
its interest pursuant to subsection 3.01 and 3.02 of
this Schedule B that percentage of the Net Smelter
Returns to which Kenora is entitled under the
Agreement; and
(b) deliver to Kenora a statement indicating:
(i) the gross amounts received from the
purchaser contemplated in subsection 2.01 of
this Schedule B;
(ii) the deductions therefrom in accordance with
subsection 2.01 of this Schedule B;
(iii) the amount of Net Smelter Returns remaining;
and
(iv) the amount of those Net Smelter Returns to
which Kenora is entitled,
supported by such reasonable information as to the
tonnage and grade of ores or concentrates shipped as
will enable Kenora to verify the gross amount payable
by the smelter or other purchaser.
4. ADJUSTMENTS AND VERIFICATION
4.01 The records relating to the calculation of Net Smelter Returns
payments shall be audited annually at the end of each fiscal
year of Parkside:
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(a) any adjustment of payments to Kenora shall be made
forthwith;
(b) a copy of the audited statement shall be delivered to
Kenora;
(c) Kenora shall have thirty (30) days after receipt of
such statement to question their accuracy in writing
and failing such objection the statements shall be
deemed correct; and
(d) Kenora or its auditor duly appointed in writing shall
have the right at all reasonable times upon written
request to inspect such of the books and financial
records of Parkside as may be relevant to the
determination of the Net Smelter Returns hereunder,
and at their own expense to make copies thereof.
Schedule C - 1
Shoal Lake
This is Schedule C to the Option Agreement
between PARKSIDE 2000 RESOURCES CORP. AND
KENORA PROSPECTORS & MINERS, LIMITED
made as of January 31, 2003
Registered claims against the Kenora Property:
REGISTRATION NO. REGISTERED HOLDER AMOUNT
226595 Lake of the Xxxxx Electric (Kenora) Ltd. $35,847.88
229409 Bestway Security Ltd. $11,478.14
229784 Xxxxxx'x Leisureland Limited $ 6,111.25
231167 Xxxx, Xxxxxx $41,450.00
232041 Xxxxxxxx North (78) Ltd. $58,475.76
Other charges or encumbrances on the Kenora Property:
None
Schedule D - 1
Shoal Lake
This is Schedule D to the Option Agreement
between PARKSIDE 2000 RESOURCES CORP. AND
KENORA PROSPECTORS & MINERS, LIMITED
made as of January 31, 2003
FORM OF SURFACE LEASE AGREEMENT
This Agreement, effective as of the 31st day of January, 2003 is
between Parkside 2000 Resources Corp. ("Parkside") of 711 - 000 Xxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0 and Kenora Prospectors & Miners,
Limited ("Kenora") of o, Ontario
A. By an option agreement dated January 31, 2003 (the "Option Agreement")
between Parkside and Kenora, Kenora has granted to Parkside an
exclusive option (the "Option") to purchase an undivided 100% interest
in the Mineral Rights currently held by Kenora in certain patented
mining claims which are described in Schedule A to the Option Agreement
(the "Property");
B. Kenora owns the surface estate in the Property;
C. Section 7 of the Option Agreement provides that Kenora enter into a
lease agreement with Parkside for a period of 20 years; and
D. This Lease Agreement reserves to Kenora for its benefit all title to
the surface estate in the Property, subject to Parkside's having a
right, license, and easement to enter upon, use, and occupy in
perpetuity so much of the Property as is reasonably necessary for the
purpose of exploration for, or development and mining of, minerals on
or underlying the Property, including, without limitation, the right to
cut, remove and use any timber or trees on the land, if not reserved by
the Crown, use any stone, sand, gravel, clay, earth and other material
from the Property for use in Parkside's operations, exercise any water
Schedule D - 2
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rights, and remove and use any water or aggregate found in, on, or
under the Property.
NOW THEREFORE, in consideration of One Dollar ($1.00) now paid
by Parkside to Kenora, the receipt and sufficiency of which is hereby
acknowledged, and further in consideration of the mutual covenants,
agreements and promises herein contained, the parties hereto agree as
follows:
1. RIGHT TO USE SURFACE. Kenora grants to Parkside the sole and exclusive
right to use the Property for the purpose of prospecting, exploring,
developing, and mining the Property, and for other purposes more
particularly set out in this Agreement and the Option Agreement.
2. TERM. This Agreement shall be for a term of 20 years commencing from
the date hereof and so long thereafter as Parkside, its successors or
permitted assigns, are conducting mining operations on a commercial
basis on all or any part of the Property, subject to earlier
termination upon the earlier of the date upon which Parkside surrenders
this Agreement or the date upon which the Option expires or terminates
in accordance with the terms of the Option Agreement.
3. RENT. Parkside shall pay to Kenora, as rent, $250 upon the date of the
execution of this Agreement and a like amount upon each anniversary of
the date of this Agreement.
4. OPERATIONS. (a) During the term of this Agreement, Parkside shall have
free and unrestricted access to the Property, and shall have the right:
(i) to explore, develop, and mine the Property, (ii) to remove all
minerals, metals, oil and gas, ores, air, water, waste, and materials
from the Property or from other mining properties by means of
operations on the Property, (iii) to deposit and store ores, water,
waste, and other materials of whatsoever nature including without
limitation copper, lead, zinc, silver, gold and uranium from the
Property or, subsequent to the exercise of the Option, from other
mining properties on the
Schedule D - 3
Shoal Lake
Property, and, subject to the foregoing, to use any part of the
Property for waste dumps and tailings disposal areas, (iv) to conduct
on the Property general mining, milling, processing, and related
operations respecting the Property and subsequent to the exercise of
the Option, from other mining properties on the Property, and, subject
to the foregoing, to use any part of the Property for waste dumps, and
tailings disposal areas, and (v) to erect, construct, use, and maintain
on the Property such roads, buildings, structures, machinery,
equipment, personal property, fixtures, and improvements as may be
necessary or convenient for the conduct of Parkside's operations on the
Property or on other mining properties.
5. TRANSFER OF TITLE. (a) Kenora shall, from time to time, as and when
requested by Parkside, execute and deliver or cause to be executed and
delivered all documents, instruments and transfers which are, in the
opinion of Parkside, reasonably necessary or advisable to effect legal
transfer of the Property or portion thereof to conduct the Operations
referred to in paragraph 4. (b) If Parkside surrenders this Agreement
or the Option Agreement expires, Parkside shall execute and deliver or
cause to be executed and delivered all documents, instruments and
transfers which are, in the opinion of Kenora, reasonably necessary or
advisable to effect legal transfer of the Property back to Kenora.
6. WATER AND MATERIALS. (a) To the extent the Kenora may do so, Kenora
grants Parkside the free use of water from the Property for use in
Parkside's operations. (b) to the extent Kenora may do so, Kenora
grants to Parkside the free use of timber, stone, sand, and gravel,
clay, earth, and other materials from the Property for use in
Parkside's operations.
7. PAYMENT OF TAXES. Parkside shall promptly pay all taxes, rates and
assessments that are assessed or levied on or in respect of the
Property, and for the purpose of the delivery to Parkside of all future
notices of such taxes, rates and assessments.
Schedule D - 4
Shoal Lake
8. INDEMNITY. Parkside hereby indemnifies and saves harmless Kenora and
each of its directors, officers, employees, contractors, advisors,
servants, agents, independent contractors, or representatives from and
against any and all claims, actions, and suits and from and against all
liabilities, losses, damages, charges and expenses of every nature and
character arising out of, as a result of, or in connection with
Parkside's activities on the Property on or after the date of this
Agreement, other than as may have arisen from the actions, or the
failure to act, of Kenora.
9. TERMINATION AND SURRENDER. (a) If Parkside shall be in default in
observing or performing any of its material obligations under this
Agreement, Parkside shall be permitted to remedy such default at any
time, in the case of a default in making any payment, during the period
of thirty (30) days or, in the case of a default in observing or
incurring any other of its material obligations under this Agreement,
during the period of ninety days, after a notice has been given by
Kenora to Parkside specifying with particularity the nature of, and
requiring Parkside to remedy such default. If Parkside does not remedy
the default within the applicable time period set out herein, all
rights of Parkside (except as provided in section 9 of the Option
Agreement) shall terminate and all liabilities and obligations of
Parkside (except liabilities existing on the date of termination) shall
terminate. (b) Parkside may at any time terminate this Agreement as to
all or any part of the Property by delivering to Kenora a good and
sufficient surrender of this Agreement or a partial surrender
describing that portion of the Property as to which this Agreement is
surrendered. Upon surrender or partial surrender to Kenora, all rights
of Parkside under this Agreement with respect to that portion of the
Property is terminated subject to section 9 of the Option Agreement and
paragraph 5 hereof.
10. READ IN CONJUNCTION WITH OPTION AGREEMENT. The Option Agreement is
incorporated herein by reference as fully as though contained in the
body hereof. Wherever any term or condition, express or implied of the
Option Agreement
Schedule D - 5
Shoal Lake
conflicts or is at variance with any term or condition of this
Agreement, such term or condition of this Agreement shall prevail.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the day and year first above written.
PARKSIDE 2000 RESOURCES CORP.
By:
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(Title: )
KENORA PROSPECTORS & MINERS, LIMITED
By:
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(Title: )
