Exhibit 10.3
AMENDED MINING LEASE
Desert Pacific Exploration, Inc. (Lessor) leases to Bream Ventures Inc. (Lessee
or Bream) the unpatented lode mining claims attached as Exhibit "A", located in
portions of sections 2, 3 10, and 11 of T1N, R28E Mt.Diablo Base & Meridian in
Mineral County, Nevada (referred to as the Property), subject to the following
conditions:
RECITALS:
A. "Effective Date" means April 9, 2001.
B. "Lease Year" means each one (1) year period following the Effective
Date and each anniversary of the Effective Date.
1. WARRANTIES. The Lessor warrants that he is the owner of the unpatented
lode mining claims more particularly described in Exhibit A and said
claims are free from all liens and encumbrances.
2. EXPLORATION AND DEVELOPMENT RIGHTS. Lessor will grant the Property to
Lessee for the Lease period with the exclusive right to explore,
develop and mine the Property for gold, silver and other valuable
minerals.
3. ASSUMPTION OF CLAIM MAINTENANCE. Under applicable Federal, State, and
County laws and regulations, Federal, State, and County annual mining
claim maintenance or rental fees are required to be paid for the
unpatented mining claims which constitute all or part of the Property,
beginning with the annual assessment work period of September 1, 2001
to September 1, 2002. Bream shall timely and properly pay the Federal,
State, and County annual mining claim maintenance or rental fees, and
shall execute and record or file, as applicable, proof of payment of
the Federal, State, and County annual mining claim maintenance or
rental fees and of Lessor's intention to hold the unpatented mining
claims which constitute the Property. If Bream does not terminate this
Agreement before June 1 of any subsequent Lease Year, Bream will be
obligated either to pay the Federal, State, and Local annual mining
claim maintenance or rental fees for the Property due that year or to
reimburse Lessor for same.
4. AREA OF INTEREST. Any additional claims located or acquired by the
Lessee within one (1) mile from the exterior boundaries of the mining
claims described in Exhibit "A" shall become a part of the leased
property and shall be subject to the terms of this lease as of the
Effective Date.
5. SCHEDULE OF PAYMENTS. The Lessee shall pay to the Lessor minimum
payments, which shall be advance payments of the Royalty, as listed
below. The Lessee may extend this lease upon payment of the following:
a. Pay Lessor US$5,000.00 upon execution of this lease.
b. Pay Lessor US$10,000.00 on or before the SECOND
anniversary of the execution of this lease.
c. Pay Lessor US$10,000.00 on or before the THIRD
anniversary of the execution of this lease.
d. Pay Lessor US$10,000.00 on or before the FOURTH
anniversary of the execution of this lease.
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e. Pay Lessor US $50,000.00 on or before the FIFTH
anniversary of the execution of this lease.
f. Pay Lessor US$50,000.00 on every anniversary
thereafter.
Payments to be adjusted to annual changes in the consumer
price index (CPI) with 2001 as the base year. CPI payments
apply to payments beginning with the fifth anniversary.
5. BUYOUT. Buyout price is US$3,000,000 (three million dollars) from which
advance royalty payments, made up to the day of buyout, may be
subtracted from the Buyout price. Lessee will pay Lessor a perpetual
three quarter percent (0.75%) royalty on Net Smelter Returns (as
defined below in Section 6. of this document) thereafter.
6. DEFINITION OF NET SMELTER RETURNS. During the term of this Lease,
Lessee shall pay to Lessor, as a land owner's Production Royalty, a
percentage of the Net Smelter Returns (as defined below) from the sale
of any Valuable Minerals, Ore, and Product mined and sold from the
Property. "Net Smelter Returns" are defined as the gross revenues
actually received by Lessee from the sales of any Valuable Minerals
extracted and produced from the Property less the following charges:
a. All costs to Lessee of weighing, sampling,
determining moisture content and packaging such
material and of loading and transporting it to the
point of sale, including insurance and in-transit
security costs.
b. All smelter costs and all charges and penalties
imposed by the smelter, refinery or purchaser.
c. Marketing costs and commissions.
d. Not withstanding the foregoing, for purposes of
determining the royalty payable to Lessor on any gold
and/or silver produced from the Property, the price
attributed to such gold and/or silver shall be the
price per ounce of gold and/or silver on which the
royalty is to be paid (as the case may be) as quoted
on the London Metals Exchange at the PM fix on the
day prior to the date of final settlement from the
smelter, refinery or other buyer of the gold and/or
silver on which the royalty is to be paid (the
"Quoted Price"). For purposes of determining the
gross revenues, in the event the Lessee elects not to
sell any portion of the gold and/or silver mined from
the Property, but instead elects to have the final
product of any such gold and/or silver credited to be
held for its account with any smelter, refiner or
broker, such gold and/or silver shall be deemed to
have been sold at the Quoted Price on the day such
gold and/or silver is actually credited to or placed
in Lessee's account. The percentage for this
Production Royalty shall be four percent (4%).
e. Lessors shall be paid the Production Royalty
quarterly by certified check by the Lessee.
7. CONDITIONS OF TERMINATION BY XXXXXX. This lease may be terminated at
any time by the Lessor subject to the following:
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a. If Lessee fails to meet the above lease payments,
Lessor must give written notice to Lessee of such
default. After receipt of default, Lessee has 15 days
to cure the default.
b. If Lessee fails to make Federal, State, and County
maintenance payments or filing fees at least 15 days
prior to due date, Lessor shall notify Lessee of a
possible default. After 10 days, if the default is
not cured Lessor may initiate payment on the claims.
Lessee will be able to cure this default by
reimbursing all Federal, State and County payments
made by the Lessor + a 20% penalty within 30 days.
8. CONDITIONS OF TERMINATION BY XXXXXX. This Lease may be terminated at
any time by the Lessee subject to the following:
a. Lessee must give written notice 30 days prior to
relinquishing the leased property.
b. In the event Lessee desires to terminate the
agreement after June 1 of any year, Lessee shall be
responsible for all Federal, State, and County
Maintenance and filing fees for the next assessment
year regarding the leased property.
c. Lessee shall deliver to Lessors in reproducible form
all data generated or obtained for the leased
property, whether factual or interpretive as defined
in section 13.
d. Lessee shall quitclaim to Lessors all claims located
or acquired by Lessee within the one (1) mile area of
interest described in Paragraph 4.
9. RECLAMATION, COMPLIANCE WITH THE LAW.. All exploration and development
work performed by Lessee during the term of this Agreement shall
conform with the applicable laws and regulations of the state in which
the Property is situated and the United States of America. Lessee shall
be fully responsible for compliance with all applicable Federal, State,
and local reclamation statutes, regulations and ordinances relating to
such work, at Xxxxxx's cost, and Xxxxxx shall indemnify and hold
harmless Lessor from any and all claims, assessments, fines and actions
arising from Xxxxxx's failure to perform the foregoing obligations.
Lessee's reclamation obligation shall survive termination of the
Agreement. Xxxxxx agrees to cooperate with Lessee in Xxxxxx's
application for governmental licenses, permits, and approvals, the
costs of which shall be borne by Lessee. Lessee shall own all
governmental licenses, permits, and approvals.
10. Liens. Lessee shall keep the property free from any and all liens and
encumbrances.
11. TRANSFER, ASSIGNMENT, RIGHT OF FIRST REFUSAL. Either party shall be
free to assign its rights under the detailed agreement to an affiliate
company. They also shall have the right to transfer all or part of
their interest in the Agreement to a third party, but transfers to a
third party shall be subject to a right of first refusal by the Lessor.
Assignments permitted under this paragraph shall not be effective
unless and until the permitted assignee agrees in writing in form and
substance acceptable to the remaining party assuming all of the
assigning party's obligations under this Lease Agreement. The party
assigning interest in this lease shall notify the other party within 15
days of such assignment and all parts of this agreement will remain in
effect.
12. LEASE TERM. The term of this lease is for fifteen (15) years, renewable
for additional fifteen (15) years so long as conditions of the lease
are met.
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13. DATA AND REPORTS. Upon and after execution of the detailed agreement,
Owner will make available to Lessee all technical data, survey notes or
maps, samples, drilling results including drill logs and reports
concerning the Property which Owner possesses, or to which it has
access, or which it acquires in the future. Within 60 days after
termination of the detailed agreement, Xxxxxx shall return to Owner,
all information of a nature similar to that described above and
developed by Lessee during the term of the Lease Agreement. If
requested by Owner not more than once in any 12 calendar months, Lessee
shall submit to Owner, within 60 days of Xxxxxx's receipt of such
request, an annual progress report describing Xxxxxx's work upon the
Property, the results of such work, and the amounts expended by Xxxxxx
in furtherance thereof to the date of such report.
14. NOTIFICATION TO LESSOR. All notices and payments from Lessee to Lessor
shall be sent to:
Xx. Xxxx Xxxxx email: xxxxxx@xxxxxxxxx.xxx
0000 Xxx Xxxxxx Xxxx
Xxxx Xxxx Xxxxx, XX. 00000
or any other person Lessor shall designate. If Lessor designates an
alternative person to receive notices and payment, they shall provide
written notice of such to Lessee. All lease payments shall be made in
the form of a check payable to Xx. Xxxx Xxxxx.
15. NOTIFICATION TO LESSEE. All notices from Lessor to Lessee shall be sent
to:
Xx. Xxxxxxx Xxxxxxx
Bream Ventures Inc.
0000 Xxxxxx Xxxxx
Xxxx Xxxxxxxxx, X. X. V7W 2P5
Canada
or any other person Lessee shall designate. If Lessee designates an
alternative person to receive notices, they shall provide written
notice of such to Lessor.
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The parties have executed this Agreement effective as of the Effective Date.
Desert Pacific Exploration, Inc.
By /s/ Xxxx Xxxxx
Title President
BREAM VENTURES, INC.
By /s/ Xxxxxxx Xxxxxxx
Title President
EXHIBIT A
Description of Property
A. Unpatented Lode Mining Claims
CLAIM NAMES BLM SERIAL NUMBERS
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Hound Dog 2 NMC # 763966
Hound Dog 9 NMC # 763972
Ule 19 NMC # 763991
Panorama 5 NMC # 763994
Panorama 6 NMC # 763995
Panorama 7 NMC # 763996
Vol 32 NMC # 763950
Little Ule 8 NMC # 763960
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