EXHIBIT 4.12
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SALE AND PURCHASE AND ASSIGNMENT OF RIGHTS IN NET SMELTER
RETURN AND CONTRACTUAL POSISTION
BY AND BETWEEN
NORANDA CHILE LIMITADA
AND
METALLICA (BARBADOS) INC.
In Santiago, Republic of Chile, on December 15, 2004, before me, XXXXXXXXX
XXXXXXX ESCALAS, Attorney, Titular Notary Public of the 16th Notary Office and
Mining Registry of Santiago, with office at San Sebastian, number 2750, Las
Condes, there appeared: Xx. Xxxxxxxx Xxxxxxx Xxxxxxxxxx, Chilean, married,
engineer, Chilean national identity card number 4,027,183-K and Xx. Xxxxxxx Xx
Xxxxxx Xxxxxxx, Chilean, single, commercial engineer, Chilean national identity
card number 7,544,038-3, in representation, according to what will be evidenced
of NORANDA CHILE LIMITADA, a company validly constituted and existing pursuant
to the laws of Chile, Tax Identification Number 88,325,800-2, all domiciled for
these purposes at Xxxxxxx Xxxxxx Xxxxx 0000, 0xx xxxxx, Xxx Xxxxxx, Santiago,
hereinafter indistinctly "Noranda" or the "Seller", as one party, and as the
other Mr. Pablo Xxx Xxxxxxxxx, Chilean, married, attorney, Chilean national
identity card number 6,374,989-3, domiciled at Xxxxxxx Xxxxxx Xxx 00, 0xx xxxxx,
Xxx Xxxxxx, Santiago, in representation of METALLICA (BARBADOS) INC., a company
validly constituted and existing pursuant to the laws of Barbados, domiciled at
Worthing Corporate Centre, Worthing Main Road, Xxxxxx Church, Barbados and for
these purposes at Xxxxxxx Xxxxxx Xxx 00, 0xx xxxxx, Xxx Xxxxxx, Santiago,
hereinafter indistinctly "Metallica" or the "Buyer", the appearing parties being
of legal age, who evidence their identity with the Chilean national identity
cards previously cited, and state:
FIRST: Minera Metallica Limitada ("Metallica") is the owner of the following
mining claims: One.- Mining concession for exploitation Niquel 1-10, which
judgment and survey record has been registered on page 315 overleaf, No. 81 of
the Property Registry of the Custodian of Mines of Vallenar corresponding to the
year 1996, and the ownership title is registered under the name of Minera
Metallica Limitada on page 305 overleaf, No. 74 of the Property Registry of the
Custodian of Mines of Vallenar corresponding to the year 2003; Two.- Mining
concession for exploitation Zinc 1-10, which judgment and survey record has been
registered on page 346, No. 86 of the Property Registry of the Custodian of
Mines of Vallenar corresponding to the year 1996, and the ownership title is
registered under the name of Minera Metallica Limitada on page 310 overleaf, No.
79 of the Property Registry of the Custodian of Mines of Vallenar corresponding
to the year 2003; Three.- Mining concession for exploitation Plomo 1-10, which
judgment and survey record has been registered on page 285, No. 76 of the
Property Registry of the Custodian of Mines of Vallenar corresponding to the
year 1996, and the ownership title is registered under the name of Minera
Metallica Limitada on page 309 overleaf, No. 78 of the Property Registry of the
Custodian of Mines of Vallenar corresponding to the year 2003; Four.- Mining
concession for exploitation Cobalto 1-30, which judgment and survey record has
been registered on page 360 overleaf, No. 88 of the Property Registry of the
Custodian of Mines
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of Vallenar corresponding to the year 1996, and the ownership title is
registered under the name of Minera Metallica Limitada on page 307 overleaf, No.
76 of the Property Registry of the Custodian of Mines of Vallenar corresponding
to the year 2003; Five.- Mining concession for exploitation Estano 1-57, which
judgment and survey record has been recorded on page 307 overleaf, No. 80 of the
Property Registry of the Custodian of Mines of Vallenar corresponding to the
year 1996, and the ownership title is registered under the name of Minera
Metallica Limitada on page 304 overleaf, No. 73 of the Property Registry of the
Custodian of Mines of Vallenar corresponding to the year 2003; Six.- Mining
concession for exploitation Potasio 1-50, which judgment and survey record has
been registered on page 338, No. 85 of the Property Registry of the Custodian of
Mines of Vallenar corresponding to the year 1996, and the ownership title is
registered under the name of Minera Metallica Limitada on page 303 overleaf, No.
72 of the Property Registry of the Custodian of Mines of Vallenar corresponding
to the year 2003; Seven.- Mining concession for exploitation Cuarzo 1-55, which
judgment and survey record has been registered on page 325 overleaf, No. 83 of
the Property Registry of the Custodian of Mines of Vallenar corresponding to the
year 1996, and the ownership title is registered under the name of Minera
Metallica Limitada on page 301 overleaf, No. 70 of the Property Registry of the
Custodian of Mines of Vallenar corresponding to the year 2003; Eight.- Mining
concession for exploitation Galena 1-57, which judgment and survey record has
been registered on page 366 overleaf, No. 89 of the Property Registry of the
Custodian of Mines of Vallenar corresponding to the year 1996, and the ownership
title is registered under the name of Minera Metallica Limitada on page 312
overleaf, No. 81 of the Property Registry of the Custodian of Mines of Vallenar
corresponding to the year 2003; Nine.- Mining concession for exploitation Litio
1-39, which judgment and survey record has been registered on page 352, No. 87
of the Property Registry of the Custodian of Mines of Vallenar corresponding to
the year 1996, and the ownership title is registered under the name of Minera
Metallica Limitada on page 311 overleaf, No. 80 of the Property Registry of the
Custodian of Mines of Vallenar corresponding to the year 2003; Ten.- Mining
concession for exploitation Titanio 1-33, which judgment and survey record has
been registered on page 290 overleaf, No. 77 of the Property Registry of the
Custodian of Mines of Vallenar corresponding to the year 1996, and the ownership
title is registered under the name of Minera Metallica Limitada on page 313
overleaf, No. 82 of the Property Registry of the Custodian of Mines of Vallenar
corresponding to the year 2003; Eleven.- Mining concession for exploitation
Bario 1-40, which judgment and survey record has been registered on page 279
overleaf, No. 75 of the Property Registry of the Custodian of Mines of Vallenar
corresponding to the year 1996, and the ownership title is registered under the
name of Minera Metallica Limitada on page 306 overleaf, No. 75 of the Property
Registry of the Custodian of Mines of Vallenar corresponding to the year 2003;
Twelfe.- Mining concession for exploitation Uranio 1-4, which judgment and
survey record has been registered on page 297, No. 78 of the Property Registry
of the Custodian of Mines of Vallenar corresponding to the year 1996, and the
ownership title is registered under the name of Minera Metallica Limitada on
page 300 overleaf, No. 69 of the Property Registry of the Custodian of Mines of
Vallenar corresponding to the year 2003; Thirteen.- Mining concession for
exploitation Silice 1, which judgment and survey record has been registered on
page 320 overleaf, No. 82 of the Property Registry of the Custodian of Mines of
Vallenar corresponding to the year 1996, and the ownership title is registered
under the name of Minera Metallica Limitada on page 314 overleaf, No. 83 of the
Property Registry
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of the Custodian of Mines of Vallenar corresponding to the year 2003; Fourteen.-
Mining concession for exploitation Tasio 1, which judgment and survey record has
been registered on page 333, No. 84 of the Property Registry of the Custodian of
Mines of Vallenar corresponding to the year 1996, and the ownership title is
registered under the name of Minera Metallica Limitada on page 308 overleaf, No.
77 of the Property Registry of the Custodian of Mines of Vallenar corresponding
to the year 2003; and Fifteen.- Mining concession for exploitation Cobre 1-6,
which judgment and survey record has been registered on page 302, No. 79 of the
Property Registry of the Custodian of Mines of Vallenar corresponding to the
year 1996, and the ownership title is registered under the name of Minera
Metallica Limitada on page 302 overleaf, No. 71 of the Property Registry of the
Custodian of Mines of Vallenar corresponding to the year 2003; all of them
hereinafter referred to as the "Mining Claims". These Mining Claims were
purchased by Metallica by means of public deed of "Execution of Mining Purchase
Option" granted on July 15, 2003 before Xx. Xxxxxxxx Xxxx Xxxxxxxxx, Notary
Public of the Fifth Notary's Office of Santiago, with the balance of price being
paid upon such execution, hereinafter the "Option Exercise". The Mining Option
Agreement which gave rise to this purchase was granted before the same Notary on
September 2, 1999, undersigned between BHP Chile Inc., as an Offeror, and Minera
Metallica Limitada, as an Oferee, under which BHP granted Metallica the power to
explore and purchase the Mining Claims, hereinafter the "Option Agreement.
SECOND: In clause seven of the Option Agreement specified in the preceding
clause, the parties agreed upon that Metallica would additionally pay to BHP the
equivalent Net Smelter Return amounting to 2% of ore obtained from the Mining
Claims object of the Option Agreement once the exploitation of such Mining
Claims has commenced under the terms and conditions set forth in the same clause
seven of the Option Agreement. This obligation was ratified in clause eight of
the Option Exercise, thus repeating the obligation which was initially accorded
under the following terms: "In the event that the Beneficiary exercises the
option and starts operations in the properties which are object of this
agreement, it shall pay BHP two per cent of the Net Smelter Return. Net Smelter
Return shall mean for these purposes the total value received by the Beneficiary
for the product extracted from the Properties, minus all expenses related to the
treatment of such product in any smelting plant, refinery or coining place, as
well as all costs and charges for tolling, smelting, refining or coining such
product and in the event of any leaching operations, all processing, recovery,
transport and preparation costs shall be deducted incurred from the moment the
treated product enters the solution process until being ready for sale.
Likewise, and in order to fix the Net Smelter Return, any costs and charges
associated therewith, such as costs and charges related to transport, insurance,
handling, weighing, sampling, analysis and marketing, shall be deducted, as well
as penalties, entertainment expenses, fees and arbitration expenses, import and
export taxes; therefore Net Smelter Return shall mean the net amount received by
the Beneficiary from a smelting plant, refinery or coining place, as the case
may be, minus all costs and charges associated with the marketing, sale and
delivery of the product to the smelting plant, refinery or coining place, as
applicable. Notwithstanding the above, said costs shall not include the cost of
leaching, acids or other costs related to the extraction and preparation until
the product has entered the electrolytic solution. Should the product be treated
in a smelting plant, refinery or coining place owned, operated or controlled by
the Beneficiary or a subsidiary thereof, all costs and charges
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referred to in the preceding paragraphs shall be equal to the applicable rates
collected by similar smelting plants, refineries or coining places as applicable
in transactions made in equity conditions for the treatment of similar
quantities and quality of the product by independent not related parties. The
Net Smelter Return shall be fixed by the Beneficiary at the end of the calendar
quarter in which the ore or concentrates from the Properties are sold or
disposed of with the corresponding payment having to be made by the Beneficiary
within forty five days following the end of each quarter. On December the thirty
first of each year and not later than March the thirty first of the following
year, the Beneficiary shall deliver BHP an annual statement on the Net Smelter
Return (the "Annual Statement"). The Beneficiary shall keep proper records to be
made available to BHP during the term of eight months as from delivery of such
Annual Statement, in order to enable BHP the right assessment of the Net Smelter
Return calculation. Within this term, BHP may object by written notice to the
Beneficiary the accuracy in assessing or calculating the Net Smelter Return made
by the Beneficiary or the accuracy in assessing if an entry has been duly
categorized or calculated. Once this notice has been sent within proper term and
in the indicated manner, the assessment of the Net Smelter Return or of the
entry as applicable, shall be made by an independent auditor to be appointed by
the Parties or the Beneficiary, should the parties be not able to reach
agreement in this respect. Should BHP does not object the assessment of Net
Smelter Return made by the Beneficiary within the eight-month term as from
delivery of the aforementioned Annual Statement, said Annual Statement shall be
considered correct and it shall be assumed that BHP has accepted it in all its
parts therefore waving, due to that action, any right to object the same".
THIRD: By public deed of this same date executed before the Notary Public that
authorizes, BHP Chile Inc. sold, assigned, and transferred to Noranda Chile
Limitada who purchased and acquired on its own behalf the Net Smelter Return
amounting to two percent of the minerals that are obtained from the Mining
Concessions once the exploitation of the same has commenced, on the terms and
conditions established in the previous clause and in the eighth clause of the
public deed of Exercise of Option. As a consequence of this sale and purchase
and assignment, Noranda Chile Limitada acquired the capacity as titleholder and
creditor of said rights, credits, shares and interest, and as obligor of the
corresponding obligations, assuming the total of the rights that for BHP Chile
Inc stem from each one of them. In this way, Noranda Chile Limitada acquired the
contractual position that until this date corresponded to BHP Chile Inc. in the
Mining Option to Purchase Agreement dated September 2, 1999 and in the Exercise
of Option of Mining Purchase executed on July 15, 2003, both before Xx. Xxxxxxxx
Xxxx Xxxxxxxxx.
FOURTH: In this act Noranda Chile Limitada, who acts duly represented for these
purposes by Messrs. Xxxxxxxx Xxxxxxx Xxxxxxxxxx and Xxxxxxx Xx Xxxxxx Zanetta,
sells, assigns and transfers to Metallica (Barbados) Inc., who purchases,
accepts and acquires through its representative appearing party Mr. Pablo Xxx
Xxxxxxxxx, 30% of the total of the rights and obligations of which Noranda Chile
Limitada is titleholder in the Net Smelter Return amounting to two percent of
the minerals that are obtained from the Mining Concessions once the exploitation
of the same has commenced, on the terms and conditions established in the second
clause above and in the eighth clause of the public deed of Exercise of Option.
As a consequence of this cession and assignment, from the date of this
Agreement, Metallica Barbados Inc. acquires the capacity as titleholder and
creditor of 30%
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of said rights, credits, shares and interests, and as obligor of the
corresponding obligations, assuming 30% of the rights that for Noranda Chile
Limitada stem from each one of them. In this way Noranda Chile Limitada and
Metallica Barbados Inc. together assume, with a proportion of 70% the former and
30% the latter, the contractual position that until this date corresponded to
BHP Chile Inc, in the Mining Option to Purchase Agreement dated September 2,
1999, and in the Exercise of Option of Mining Purchase executed on July 15,
2003, both before Xx. Xxxxxxxx Xxxx Xxxxxxxxx, Titular Notary Public of the
Fifth Notary Office of Santiago, who are individualized in the first clause of
this instrument, thereby subrogating and assuming on its own behalf all rights
and obligations of BHP Chile Inc. in the Mining Option to Purchase Agreement and
its Exercise as previously referred to.
FIFTH: The price of this sale and purchase and assignment of rights is the total
sum of US$600,000 equivalent at this date to the sum of 347,466,000 Chilean
pesos, that Metallica (Barbados) Inc. pays in this act, in cash, Messrs.
Xxxxxxxx Xxxxxxx Xxxxxxxxxx and Xxxxxxx Xx Xxxxxx Xxxxxxx declaring, both in
representation of Noranda Chile Limitada, to receive such sum to their entire
and full satisfaction, expressly waiving resolutory actions.
SIXTH: Any difficulty or controversy that arises between the contracting parties
in respect of the application, interpretation, duration, termination, validity
or execution of this contract or for any other reason shall be submitted to
ARBITRATION, in accordance with the Rules of Arbitration Procedure currently in
force of the Santiago Arbitration and Mediation Centre. The parties confer a
special irrevocable power of attorney on the Santiago Commercial Chamber (Camera
de Comercio de Xxxxxxxx X.X.), upon written request of any party, to designate a
mixed arbitrator, an arbitrator who can fix the procedure, and makes a ruling in
accordance with the law, from the attorneys who are members of the arbitral body
of the Santiago Centre of Mediation and Arbitration. There shall be no appeal
against the resolutions of the arbitrator and the parties hereto expressly waive
any right they may have to appeal against such decision. The arbitrator shall
remain especially empowered to resolve all matters related to its competence
and/or jurisdiction. The official language of the Arbitration shall be Spanish
and the applicable legislation shall be Chilean. This clause shall survive the
termination of the Agreement.
SEVENTH: All Notary Public and Real Estate Registry expenses arising due to this
instrument shall be shared equally between both parties.
EIGHTH: The bearer of an authorized copy of this instrument is authorized to
request and sign all registrations, sub-registrations, annotations, certificates
and carry out other acts as required in the relevant Registries. The appearing
parties also authorize Messrs. Xxxx Xxxxx Xxxxxxxxx Fabres and Pablo Xxx
Xxxxxxxxx so that both acting together may execute one or more minutes or public
deeds that allow substitution as regards any deficiencies or defective or
insufficient designations in the titles, in accordance with that provided in
article 82 of the Rules of the Real Estate Registry. The concession of these
powers is, from this time, irrevocable. The legal representation of Xx. Xxxxxxxx
Xxxxxxx Xxxxxxxxxx and Xxxxxxx Xx Xxxxxx Xxxxxxx to represent Noranda Chile
Limitada is stated in the Second Board of Directors Meeting held on November 12,
2003, converted to public deed on November 20, 2003 in the Notary Public of
Santiago of Xxxxxxxxx Xxxxxxx Escalas. The legal representation of Mr. Pablo Xxx
Xxxxxxxxx to act in representation of Metallica
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Barbados Inc. is stated in the power of attorney executed on November 17 of 2004
in the United States of America, State of Colorado, which being duly legalized
was formalized in the Notary Pubic of Santiago of Xxxx Xxxxxxxxx Cash on
November 25, 2004. Said legal representations are inserted as not being known by
the parties and at the request of the same. In witness whereof, the appearing
parties sign after reading. A copy is issued. I attest.
/s/ Xxxxx Xxx Xxxxxxxxx
Xxxxx Xxx Xxxxxxxxx
Metallica Barbados Inc.
/s/ Xxxxxxxx Xxxxxxx Xxxxxxxxxx
Xxxxxxxx Xxxxxxx Xxxxxxxxxx
/s/ Xxxxxxx xx Xxxxxx Xxxxxxx
Xxxxxxx de Xxxxxx Xxxxxxx
Noranda Chile Ltda..
