EXHIBIT 4.21
AGREEMENT BETWEEN
RECURSOS DE LO ANDES S.A.C., COMPANY'S WHOLLY-OWNED SUBSIDIARY,
AND XXXXXX XXXXXX XXXXXXXX PALACOOS
DATED MAY 11, 2005
[COPY OF AN AGREEMENT CERTIFIED BY A NOTARY, BEARING THE NOTARY'S STAMP AND
INITIALS AND THE STAMP OF THE SOCIETY OF NOTARIES PUBLIC OF LIMA, PERU]
NOTARIAL CERTIFIED COPY
XXXXXX XXXXXXX XXXX
NOTARY PUBLIC, LIMA
NUMBER SEVEN HUNDRED AND FOURTEEN
Public Deed in respect of the Assignment and Transfer Option of Mining Rights
Agreement executed by XXXXXX XXXXXX XXXXXXXX XXXXXXXX in favour of RECURSOS DE
LOS ANDES, S.A.C.
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INTRODUCTION
IN XXX XXXX XX XXXX, XXXX, XX THE ELEVENTH DAY OF MAY IN THE YEAR TWO THOUSAND
AND FIVE, BEFORE ME, XXXXXX XXXXXXXX XXXXXXX XXXX, a Lawyer and Notary Public in
and for this Province, bearer of National Identity Document No. 17847136, Tax
Roll Number 10173471383, Registered in the Notaries Public Association of Lima
under No. 151, with offices located at 000 Xxxxxxxxxx Xxxxxxx Xxx., xxxxxx
xxxxx, Xxxxxxxxxx, Xxxx, the following parties APPEAR before me acting on their
own name and behalf:
XXXXXX XXXXXX XXXXXXXX XXXXXXXX, Peruvian, who identifies himself with National
Identity Document No. 09550940, businessman, single, with domicile established
for this purpose at No. 1186 Xxxxx Xxxxxxx, San Xxxxxx, Province and Department
of Lima; and for the other party RECURSOS DE LOS ANDES S.A.C. identified by Tax
Roll Number 20509678325, with domicile established for this purpose at Xx. 000
Xxxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx xx Xxx Xxxxxx, Xxxxxxxx and Department
of Lima, duly represented by its General Manager, Xx. XXXXX XXXXX XXXX SOLDI
SOLDI, Peruvian, identified with National Identity Document No. 07787342,
businessman, married, who intervenes in this act in the performance of the power
conferred upon him and registered under 11685520 of the Register of Companies of
Lima. I hereby state that I have identified the parties with their respective
personal documents, and that they are competent and knowledgeable in the use of
the Spanish language and act in the exercise of their civil rights, having the
legal capacity, sufficient knowledge and complete freedom to do so; I attest to
all of the foregoing as I have posed to them the pertinent questions in
accordance with the Notary Public Act. They have submitted to me a duly signed
draft agreement so that its contents may be raised to the status of a Public
Instrument. This agreement is added to the respective file under number seven
hundred and fourteen and literally says:
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MR. NOTARY:
PLEASE ENTER into your Register of Public Deeds, this instrument recording the
Agreement and Transfer Option of Mining Rights which is executed by and between
Mr. Carlos Xxxxxx Xxxxxxxx Xxxxxxxx, identified with NID No. 09550940, with
domicile established for this purpose at Xx. 0000 Xxxxx Xxxxxxx, Xxxxxxxx of San
Xxxxxx, Province and Department of Lima; and on the other hand, Recursos de los
Andes, S.A.C., identified with Tax Roll No. 20509578325, with domicile
established for this purpose at Xx. 000 Xxxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxxxx Xxxxxxxx, Xxxxxxxx and Department of Lima, duly represented by its
general manager Xx. Xxxxx Xxxxx Xxxx Soldi Soldi, Identified with NID No.
07787342, pursuant to the powers conferred upon him as registered under No.
11635520 of the Register of Companies of Lima, who hereinafter shall be referred
to as the Owner and Recursos respectively, under the following terms and
conditions:
FIRST: The Owner is the registered owner of the mineral mining concessions known
as: Paquita 2004, with a surface area of 100 has., INACC(1) Code 00-00000-00 and
B) Xxxxxxx Xxx 0000, surface area 700 has, INACC Code 00-00000-00. Both
concessions are located in the district of Velille, Province of Chumbivilcas,
Department of Cusco. The above mentioned concessions are registered under Nos.
11037284 and 11037285 of the Mining Rights Registry of Cusco.
SECOND: By this instrument the parties mutually agree to execute an agreement
for the assignment and transfer option of mining rights whereby the Owner grants
Recursos a transfer option and exclusively assigns to it the rights the
concessions listed in the previous clause, for the purposes of exploration, so
that Recursos may proceed to carry out the mining exploration and prospecting
activities it deems pertinent and, as a result of such activities, to enable it
to purchase the concessions by executing a definitive transfer agreement. By
this act, Recursos assumes all the rights and obligations of the Owner, and
Recursos shall be solely responsible for the payments that may become due during
the effective period of this agreement to maintain effective the mining rights,
and must carry out the work in accordance with the prevailing mining safety and
health regulations and environmental regulations.
THIRD: The effective term of this agreement is four years counted from the date
of execution of this instrument, and such term is mandatory for the Owner and
optional for Recursos, who may terminate the agreement at any time, by sending a
notarial letter to the Owner to this effect. The parties shall execute and
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(1) INACC - Instituto Nacional de Concesiones y Catastro Xxxxxx (National
Institute of Concessions and Mining Properties) Translator's note.
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formalize the respective termination agreement within a period of time of
fifteen calendar days counted from receipt of said notarial communication. All
expenses that may be incurred in the termination process shall be for account of
Recursos.
FOURTH: In compensation for the assignment of mining rights subject of this
agreement, Recursos undertakes to invest the following amounts in the
prospecting and exploration work: A) First year, US $50,000.00, B) Second year,
US $200,000, C) Third year, US $500,000.00 and D) Fourth year, US $750,000.00.
The Owner authorizes Recursos to invest larger sums than the minimum annual
amounts established above. In this case, the excess invested in one year shall
be counted as part of the amount agreed upon for the following years. The
investments will be audited and/or verified by the Owner.
In respect of the option right, Recursos undertakes to pay the Owner the
following sums:
A) US $15,000.00 on the date of execution of this agreement
B) US $20,000.00 on the date of the first anniversary of the effective period of
this agreement.
C) US $ 25,000.00 on the date of the second anniversary of the effective period
of this agreement.
D) US $40,000.00 on the date of the third anniversary of the effective term of
this agreement.
E) US $50,000.00 on the date of the fourth anniversary of the effective term of
this agreement.
The amounts indicated above total US $150,000.00 and if Recursos decides not to
exercise the transfer option, these amounts are not reimbursable. Should
Recursos exercise the option, these amounts will form part of the transfer
price.
FIFTH: The parties mutually agree that should Recursos decide to exercise the
agreed upon option at any time during the effective term of this agreement, the
transfer price of the mining rights is US $150,000.00 plus 4% per annum of the
NSR (Net Smelter Return), which the parties expect to be US $1,500,000.00; this
amount shall be paid in scaled annual instalments as follows:
A) US $300,000.00, on the date of execution of the transfer agreement
B) US $400,000.00, on the first anniversary of the execution of the transfer
agreement;
C) US $400,000.00, on the second anniversary of the execution of the transfer
agreement,
D) US $400,000.00, on the third anniversary of the execution of the transfer
agreement
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The agreed upon price covers both concessions.
The decision to exercise the option shall be notified to the Owner by a Notarial
letter. The parties undertake to execute and formalize the respective Agreement
of Transfer of Mining Rights within fifteen days after receiving such
notification. All expenses that may arise in this respect shall run for account
of Recursos.
SIXTH: The following are grounds for termination of this agreement:
A) Recursos' failure to invest any of the amounts agreed in compensation for the
assignment of mining rights, on the indicated dates.
B) Recursos' failure to comply with the payments of the amounts agreed in
respect of the option on the mining rights on the indicated dates.
C) Recursos' failure to comply with the obligations established by the Mining
Act, without detriment to being also liable for the respective damages and
sanctions that may be applicable on the grounds of its performance.
SEVENTH: If the concessions subject of this agreement were terminated by reasons
attributable to Recursos, Recursos undertakes to pay, as a penalty, 100% of the
amount agreed upon as the price for the transfer of the mining rights. Likewise,
if Recursos fails to pay the annual investments agreed upon during the effective
period of the assignment of mining rights, Recursos shall be liable for a
penalty equivalent to 5% per month of the amount agreed upon for the respective
period, until the promised investment is made, or the agreement is rescinded.
EIGHTH: Obvious political instability, localized social conflicts or any other
act beyond the will and control of the parties that impedes or hinders the
normal development of the prospecting and exploration work that Resources is
entitled to carry out under to the terms of this Agreement, shall be deemed to
be acts of force majeure. In this case, notwithstanding the suspension of
contractual terms, the parties shall meet to determine what steps should be
taken, unless Recursos decides to terminate the agreement.
NINTH: Recursos may assign its contractual position under this instrument in
favour of a third party, and the sole obligation of such third party is to
assume all the rights and obligations that Recursos has assumed under the
provisions of this Agreement.
TENTH: Any conflict between the parties regarding the validity, performance,
interpretation or application of this Agreement, shall be resolved by
arbitration. The arbitration process shall be carried out in Lima, in Spanish,
subject to the regulations of the General Law of Arbitration No. 26572.
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For this purpose, the parties shall come to an agreement regarding the
composition of the arbitration panel to which they shall be subject. The
arbitration award shall be binding and non-appealable to the parties.
ELEVENTH: This agreement shall become effective on the date it is executed,
notwithstanding the date when the parties formalize it and register it in the
appropriate register.
Lima, April 11, 2005
[illegible signature] XXXXXX XXXXXX XXXXXXXX XXXXXXXX, OWNER
[illegible signature] for RECURSOS DE LOS ANDES S.A.C. Xxxxx Xxxxx Soldi,
General Manager. Lawyer who authenticates the draft agreement: Xxxxxxxx Xxxxxxx
Xxxxxxx, License CAL 4649.
CONCLUSION
I hereby certify that this document has been formalized and read to the parties
who affirm and ratify its contents; so they said, granted, signed it and stamped
their fingerprints: Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxxx, signed; for Recursos de los
Andes, S.A.C., signed Xxxxx Xxxxx Xxxx Soldi Soldi, General Manager. This Deed
starts on page two thousand thirty three and ends on page two thousand thirty
five; the process of having all the parties sign this deed was finalized on the
eleventh day of May in the year two thousand and five. I hereby attest to all
the above: signed: Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxxx; for Recursos de los Andes,
S.A., signed, Xxxxx Xxxxx Xxxx Soldi Soldi, General Manager. Signed: Dr. Xxxxxx
Xxxxxxxx Xxxxxxx Xxxx, Notary Public. This I attest.
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I HEREBY CERTIFY that this instrument is a true copy of the original, Public
Deed No. 714, dated 11.05.2005 which is written from page two thousand thirty
three three to two thousand thirty five; signed by all the parties and
authorized by myself.
Lima, May 11, 2005
I hereby issue this certified copy at the request of Xxxxx Xxxxx Xxxx Soldi
Soldi
[illegible signature]
[Notary's stamp, Notary's Office stamp and Association of Notaries Public Stamp]
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