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EARNING OPTION AGREEMENT
Between
GLOBE RESOURCES INC.
(called the "Optionor")
And
GETTY COPPER CORP.
(called the "Optionee")
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EARNING OPTION AGREEMENT
THIS AGREEMENT made effective October 15, 1996.
BETWEEN:
GLOBE RESOURCE INC., a body corporate, duly incorporated under the laws of
British Columbia, and having an office situate at 0000 Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0;
(hereinafter called the "Optionor")
OF THE FIRST PART
AND:
GETTY COPPER CORP., a body corporate, duly incorporated under the laws of
British Columbia, and having an office situate at 0000 Xxxx Xxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0;
(hereinafter called the "Optionee")
OF THE SECOND PART
WHEREAS:
A. The Optionor is the registered and beneficial owner of certain Crown
granted mineral claims more particularly described in Schedule "B" - Claims
hereunto annexed; and
B. The Optionor has agreed to grant the Optionee the right, privilege and
option to earn, subject to a 1.5% Net Smelter Returns royalty reserved by the
Optionor, an undivided 50% right, title and interest in and to the various Crown
granted mineral claims described in Schedule "B" - Claims hereto on the terms
and conditions hereinafter contained;
NOW THEREFORE THIS AGREEMENT WITNESSETH that for and in consideration of the
payment of $10 by each party to the other, the receipt and sufficiency of which
is acknowledged, and the premises, the mutual covenants and agreements herein
contained to be kept and performed by each of the parties hereto, the parties
hereto hereby agree as follows:
1. DEFINITIONS
-----------
In and for the purposes of this Agreement, unless there is something in the
subject matter or context inconsistent therewith or unless otherwise
specifically provided, each of the words, phrases and expressions described in
Schedule "A" - Definitions shall have the meanings ascribed thereto.
2. REPRESENTATIONS OF THE OPTIONOR
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2.1 The Optionor represents to the Optionee as representations that re true
as of the date of this Agreement and will be true on the date of closing of the
purchase and sale of the Claims hereunder that:
a. to the best of the knowledge, information and belief of the Optionor, the
Claims are free and clear of liens, charges and encumbrances, held as good and
valid Crown Grants and are valid and subsisting Crown Grants in good standing;
b. the Optionor is the registered holder of the Claims;
c. to the best knowledge, information and belief of the Optionor, there are
no adverse claims or challenges against or to the ownership of or title to any
of the Claims nor to the knowledge of the Optionor is there any basis therefor,
and there are not outstanding agreements or options to acquire or purchase or
earn an interest in the Claims or any portion thereof or any rights therein, and
no person, firm or corporation has any royalty or other interest whatsoever in
production from the Claims other than such royalties as may be payable to the
Province of British Columbia or Canada or as may be reserved hereunder;
d. the Optionor has the full right, authority and capacity to enter into
this Agreement without first obtaining the consent of any other person or body
corporate and the consummation of the transaction herein contemplated will not
conflict with or result in any breach of any covenants or agreements contained
in, or constitute a default under, or result in the creation of any encumbrance
under the provisions of any shareholders' or directors' resolution, indenture,
agreement or other instrument whatsoever to which the Optionor is a party or by
which it is bound or to which it is subject;
e. to the best of the knowledge, information and belief, no proceedings are
pending in bankruptcy for, and the Optionor is unaware of any basis for the
institution of any proceedings which could lead to the placing of the Optionor
in bankruptcy or subject the Optionor to any other laws governing the affairs of
insolvent persons;
f. the Optionor is not a non-resident of Canada within the meaning of
section 116 of the Income Tax Act (Canada);
g. the Optionor
i. is a company duly incorporated under the Company Act (British
Columbia) and is not a reporting company under the Act
ii. is duly organized, validly exists and is in good standing under the
laws of its jurisdiction of incorporation,
iii. is in good standing in each jurisdiction in which the nature of
its business conducted by it or the property owned or leased by it makes such
qualification necessary,
iv. has the full power, authority, right and capacity to own, lease and
dispose of the Claims, to carry on its business as now being conducted by it, to
execute and deliver this Agreement, to complete the transactions contemplated
hereby and to duly observe and perform all of its covenants and obligations
herein set forth, and
v. is not in default of any reporting or filing requirement under any
applicable corporate, securities or taxation law or other law to which it is
subject;
j. the execution and delivery of this Agreement and the completion of the
transaction contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of the Optionor and this Agreement
constitutes a legal, valid and binding obligation of the Optionor enforceable
against the Optionor in accordance with its terms except as may be limited by
laws of general application affecting the right of creditors; and
k. neither the execution and deliver of this Agreement, or the other
agreements and instruments contemplated hereby, nor the completion of the
transactions contemplated herein will:
i. violate any of the terms and provisions of the constating documents
or by-laws or articles of the Optionor, or any order, decree, statute, by-law,
regulation, covenant or restriction applicable to the Optionor or to any of the
Claims;
ii. give any person the right to transfer, terminate or cancel any of
the Claims;
iii. result in any fees, duties, taxes, assessments or other amount
relating to any of the Claims becoming due or payable other than any applicable
Federal Goods and Services Tax and British Columbia Social Services Tax payable
by the Optionee in connection with the purchase and the sale of an interest in
the Claims, or
iv. result in the creation of any lien, charge or encumbrance on any of
the Claims other than the royalty payable to the Optionor hereunder.
2.2 The representations of the Optionor set out in subsection 2.1 above
form a part of this Agreement and are representations upon which the Optionee
has relied in entering into this Agreement and shall survive the acquisition of
any interest in the Claims by the Optionee.
2.3 Except as stated herein, there are not other representations given
by the Optionor with respect to the subject matter of this Agreement and
specifically there are no representations given as to there being any minerals
on the Claims or the viability of Commercial Production from the Claims.
2.4 The Optionor covenants and agrees to indemnify and save the Optionee
harmless 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 it and contained in this Agreement.
2.5 The Optionor acknowledges and agrees that the Optionee has entered
into this Agreement relying on the representations and other terms and
conditions of this Agreement and that no information which is now known or which
may hereafter become known to the Optionee shall limit or extinguish the right
to indemnity hereunder, and, in addition to any other remedies he may pursue,
the Optionee may deduct the amount of any such loss or damage from any amounts
payable by it to the Optionor.
3. REPRESENTATIONS OF THE OPTIONEE
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3.1 The Optionee represents to the Optionor that it is a body
corporate, duly incorporated under the Canada Business Corporations Act, and is
extra-provincially registered in and a reporting issuer in the Province of
British Columbia with full power and absolute capacity to enter into this
Agreeent and to carry out the transaction contemplated hereby, all of which have
been duly and validly authorized by all necessary corporate proceedings.
3.2 The representations of the Optionee hereinbefore set out form a
part of this Agreement are conditions upon which the Optionor has relied in
entering into this Agreement, and shall be true and correct on the Effective
Date and shall survive the acquisition of any interest in and to the Claims by
the Optionee.
4. EARNING OPTION
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In consideration of the payment of $10 by the Optionee to the Optionor, the
receipt and sufficiency of which is acknowledged, the Optionor hereby gives and
grants to the Optionee the sole and exclusive right and option to earn an
undivided 50% right, title and interest in and to the Claims by spending
$525,000 on Exploration and Development Work on the Claims both as provided for
in section 5 on the terms and conditions herein contained.
5. TERMINATION OF EARNING OPTION
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The Earning Option shall terminate unless within three (3) years of the
Effective Date the Optionee spends no less than $525,000 on recommended
Exploration and Development Work on the Claims.
6. EXERCISE OF EARNING OPTION
-- -----------------------------
6.1 Subject to the provisions of subsection 6.2, on the date the
Optionee has completed the Expenditures described in section 5 and has complied
with the other terms of this Agreement, the Optionee shall have exercised its
Earning Option and be entitled to receive a transfer of an undivided 50% right,
title and interest in and to the Claims.
6.2 Within 60 days after the Optionee has incurred the Expenditures,
the Optionee shall give notice to the Optionor and tender with the notice an
unaudited
statement and summary of the Expenditures made on the Claims prepared by the
Accountants of the Optionee.
6.3 The Optionor shall have 60 days within which to dispute the
Expenditures, failing which, the Optionee shall have conclusively earned the
interest which the Optionee is permitted to earn under the terms of this
Agreement and the Optionee shall be entitled to receive a transfer of that
interest free and clear of all liens, charges and encumbrances, save and except
for any liens, charges and encumbrances which may have arisen with the consent
of the Optionor:
a. as a result of the Exploration and Development Work undertaken on the
Claims by the Optionee; or
b. by reason of the Net Smelter Returns royalty reserved by the Optionor
hereunder.
6.4 In the event the Optionor disputes the Expenditures, the actual
expenditures incurred for the purpose of exercising the Earning Option shall be
determined by binding arbitration in the manner provided for under the Joint
Venture Agreement.
6.5 The Joint Venture Agreement shall become effective on the earlier of the
date agreed to by the parties or the date the Optionee has exercised the Earning
Option.
7. NET SMELTER RETURNS ROYALTY
-- ------------------------------
7.1 The Optionor hereby reserves to itself a one and one-half
percent (1.5%) Net Smelter Returns royalty in the Claims such that on the date
Commercial Production commences from the Claims or any leases created in place
of the Claims, the Optionor shall be entitled to receive and the Optionee or its
successors or assigns shall pay to the Optionor an amount equal to one and
one-half percent (1.5%) of Net Smelter Returns on all sales of Mineral Products
including any sales made prior to the commencement of Commercial Production.
7.2 The Optionee shall be under no obligation whatsoever to place the
Claims into Commercial Production and in the event it is placed into Commercial
Production, the Optionee shall have the right, at any time, to curtail or
suspend such production as it, in its absolute discretion, may determine.
7.3 Net Smelter Returns and the payments payable to the Optionor
hereunder shall be adjusted and paid quarterly, and, within ninety (90) days
after the end of each fiscal year during which the Claims were in Commercial
Production, the records relating to the calculation of Net Smelter Returns
during that fiscal year shall be audited and any adjustments shall be made
forthwith, and the audited statements shall be delivered to the Optionor who
shall have sixty (60) days after receipt of such statements to question in
writing their accuracy and failing such question, the statements shall be deemed
correct.
7.4 For the purposes of this Agreement, the Optionor or its
representatives duly appointed in writing shall have the right at all reasonable
times, upon written request, to inspect those books and financial records of the
Optionee as are relevant to the determination of Net Smelter Returns, and, at
the expense of the Optionor, to make copies thereof.
7.5 The Optionor shall be entitled to register this Agreement against title
to the Claims as evidence of its Net Smelter Returns royalty interest in the
Claims by reason of the Net Smelter Returns royalty reserved hereunder which
royalty the parties intend to be a charge against the Claims and the land
comprising them and the leases from time to time created in place of the Claims,
and, as such, the Optionee covenants and agrees with the Optionor to maintain
the Claims in good standing for so long as it holds an interest in the Claims
subject to its right to require contribution from any other interest holders and
to provide proof to the Optionor not less than 60 days before any expiry date
for the Claims that the Claims are in good standing for a further period of not
less than one year from that expiry date.
7.6 In the event the Optionee does not comply with the covenant to
maintain the Claims in good standing as provided in subsection 7.5, the Optionor
shall be entitled to act as agent for the Optionee and pay any necessary taxes
or charges required to maintain the Claims in good standing in accordance with
the covenant and in such case the Optionee shall be liable to the Optionor for
the cost thereof and agrees to pay the same forthwith on demand by the Optionor.
7.7 The Optionee covenants and agrees to:
a. permit the Optionor, or its representative, duly authorized by it in
writing, at the risk and expense of the Optionor, access to the Property at all
reasonable times and to all records, exploration and technical data and
information, including interpretive reports, and any other information of or in
the possession of the Optionee concerning the Claims; and
b. indemnify and save the Optionor harmless from any and all claims, liens,
suits or actions made or brought against the Optionor or registered against the
Claims as a result of work done by the Optionee on or with respect to the
Claims.
8. TRANSFER OF MINERAL CLAIMS
-----------------------------
Concurrently with the execution of this Agreement, the Optionor shall deliver to
the Optionee a Xxxx of Sale of the Claims providing for the transfer of the
Claims to an Optionee, which the Optionee shall, at its own cost, be entitled to
record with the appropriate government offices provided that the Optionee shall
hold its recorded interest in the Claims subject to the terms of this Agreement.
9. RIGHT OF ENTRY
-- ----------------
From and as of the Effective Date until the Joint Venture Agreement becomes
effective unless this Agreement is earlier terminated, the Optionee, its
employees,
agents and independent contractors shall have the sole and exclusive right and
option to:
a. enter upon the Claims;
b. have exclusive and quiet possession of the Claims;
c. explore, develop and operate the Claims;
d. bring upon and erect upon the Claims such Mining Facilities as the
Optionee may consider advisable and Operate the Property as a Mine; and
e. remove from the Claims and sell or otherwise dispose of Mineral Products
for the purposes of assaying or other testing.
10. COVENANTS OF THE OPTIONEE
--- ----------------------------
Until the Earning Option has been exercised or this Agreement has been
terminated, the Optionee shall:
a. keep the Claims free and clear of all liens, charges and encumbrances
arising from its operations, maintain the Claims in good standing by the payment
of all taxes and rents required to be paid and by the doing of all other acts
and thinks and the making of all other payments required to be made which may be
necessary in that regard;
b. permit the Optionor, or its representatives duly authorized by it in
writing at their own risk and expense access to the Claims at all reasonable
times and to all records prepared by the Optionee in connection with work done
on or with respect to the Claims and provide a copy of all exploration results,
data, information and engineering and technical reports to the Optionor
forthwith upon receipt of the same by the Optionee;
c. conduct all work on or with respect to the Claims in a careful and
miner-like manner, including any reclamation work required in respect of work
performed by the Optionee on the Claims, and in accordance with the applicable
laws, and the Optionee agrees to indemnify and save the Optionor harmless from
any and all claims, suits or actions made or brought against the Optionor as a
result of work done by the Optionee on or with respect to the Claims;
d. obtain and maintain for itself and cause any contractor engaged hereunder
to obtain and maintain, during any period in which active work is carried out
hereunder, adequate insurance and workers' compensation coverage if applicable;
e. at the expense of the Optionee, carry out any environmental cleanup which
might be required as a result of work performed by the Optionee on the Claims;
and
f. if this Agreement is terminated other than by the Optionee exercising the
Earning Option, provide to the Optionor all records, files and data relating to
the Claims and
permit the Optionor and its representatives, at the expense of the Optionee, to
take abstacts therefrom and make copies thereof.
11. OBLIGATIONS OF THE OPTIONEE ON TERMINATION
--- -----------------------------------------------
If this Agreement is terminated other than by the Optionee earning an interest
under the terms of this Agreement, the Optionee shall:
a. quitclaim all of its unearned right, title and interest in and to the
Claims to the Optionor free and clear of all charges and encumbrances arising
from the operations of the Optionee with assessment work for at least one year
filed against the Claims;
b. undertake, complete and pay for any reclamation work required at law on
the Claims as a result of the operations of the Optionee on the Claims; and
c. have the right to remove from the Claims within six months from the date
of termination, all moveable mining facilities erected, installed or brought
upon the Claims by or at the instance of the Optionee and any mining facilities
remaining on the Claims after the expiration of the said period of six months
shall, without compensation to the Optionee, become the property of the
Optionor.
12. FORCE MAJEURE
--- --------------
If the Optionee is prevented from or delayed in complying with any provisions of
this Agreement by reasons of strikes, labour disputes, lockouts, labour
shortages, power shortages, fires, wars, acts of God, governmental regulations
restricting normal operations or any other reason or reasons beyond the control
of the Optionee, except lack of monies, the time limited for the performance of
the various provisions of this Agreement as set out above shall be extended by a
period of time equal in length to the period of such prevention and delay.
13. ABANDONMENT OR SURRENDER
--- --------------------------
In addition to any other termination provisions contained in this Agreement, the
Optionee shall have the absolute right to abandon this Agreement by giving
notice of such abandonment to the Optionor, and in the event of such
termination, this Agreement shall be of no further force and effect except for
any obligations which have arisen prior to the effective date of abandonment and
the Optionee shall leave the Claims in good standing with assessment work for
one year filed against the Claims.
14. CONFIDENTIALITY
--- ---------------
The parties agree that all information and data concerning or derived from
operations hereunder which have not been publicly reported shall be kept
confidential, except to the extent required by law or by regulation of any
securities commission or stock exchange, or in connection with the filing of a
Prospectus or Statement of Material Facts by a party or any related corporation,
and shall not be disclosed to any other
person or corporation other than to related corporations without the prior
written consent of the other party, which consent shall not be unreasonably
withheld, but no party shall be liable to the other party for a breach of this
clause by its employees, servants or agents, who through fraud or negligence
disclose such information and data if that party has taken reasonable steps to
ensure that its employees, servants or agents comply with the provisions of this
section.
15. DEFAULT
--- -------
If the Optionee should be in default of any requirement under the terms of this
Agreement, the Optionor shall give written notice to the Optionee specifying the
default and the Optionee shall not lose any rights granted under this Agreement
unless within 30 days after the giving of notice of defualt by the Optionor, the
Optionee has failed to take reasonable steps to cure the default by the
appropriate performance and if the Optionee fails to take reasonable steps to
cure any such default, the Optionor shall be entitled to seek any remedy it may
have on account of any breach of a material term of this Agreement.
16. NOTICE
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16.1 Delivery of Notice
Any notice required to be given under this Agreement shall be deemed to be well
and sufficiently given if delivered, when delivered, or if mailed, or
telegraphed on the second business day after the date of mailing or telegraphing
thereof to a party at its address noted on page 1 of this Agreement all with a
copy to:
Werbes Xxxxxx & Company
Barristers & Solicitors
0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX
X0X 0X0
Telecopier (000) 000-0000
and any notice given as aforesaid shall be deemed to have been given.
16.2 Change of Address
Any party may at any time give to the other notice in writing of any change of
address of the party giving such notice and from and after the giving of such
notice, the address or addresses therein specified will be deemed to be the
address of such party for the purpose of giving notice hereunder.
17. TITLES
--- ------
The titles to the respective sections hereby shall not be deemed to be a part of
this Agreement but shall be regarded as having been used for convenience only.
18. RIGHT OF FIRST REFUSAL ON TRANSFERS
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18.1 Receipt of Offer
If any party to this Agreement should receive a bona fide offer from an
independent third party (the "Proposed Optionee") dealing at arm's length with
such party, to purchase all or part of the party's interest in the Claims or
this Agreement which offer it desires to accept, or if a party intends to sell
or otherwise dispose of all or substantially all of its interest in the Claims,
that Party (the "Selling Participant") shall first offer (the "Offer") such
interest in writing to the other Party (the "Remaining Participant") upon terms
no less favourable than those offered by the Proposed Optionee or intended to be
offered by the Selling Participant, as the case may be.
18.2 Contents of Offer
The Offer shall specify the price and terms and conditions of such sale, the
name of the Proposed Optionee (which term shall, in the case of an intended
offer by the Selling Participant, mean the person or persons to whom Selling
Participant intends to offer its interest) and, if the Offer received by the
Selling Participant from the Proposed Optionee provides for any consideration
payable to the Selling Participant otherwise than in cash, the Offer shall
include the good faith estimate of the Selling Participant of the cash
equivalent of the non-cash consideration.
18.3 Acceptance of Offer
If within a period of 60 days of the receipt of an Offer, the Remaining
Participant notifies the selling Participant in writing that it will accept the
same, the Selling Participant shall be bound to sell to the Remaining
Participant the interest offered (subject as hereinafter provided with respect
to price) on the terms and conditions of the Offer.
18.4 Cash Equivalent
If the Offer so accepted by the Remaining Participant contains the good faith
estimate of the Selling Participant of the cash equivalent consideration as
aforesaid, and if the Remaining Participant disagrees with the best estimate of
the Selling Participant at the time of acceptance and Remaining Participant
shall, in such notice, specify what it considers, in good faith, the fair cash
equivalent to be and the resulting total purchase price.
18.5 Right of Acceptance
If the Remaining Participant notifies the Selling Participant as provided in
subsection 18.3, the acceptance by the Remaining Participant shall be effective
and binding upon the Selling Participant and the Remaining Participant, and the
cash equivalent of any such non-cash consideration shall be determined by
binding arbitration in the manner provided for under the Joint Venture Agreement
and shall be payable by the
Remaining Participant within 60 days following the determination thereof by
arbitration.
18.6 Payment
Any payment by the Remaining Participant hereunder shall be made against receipt
of an absolute transfer of clear and unencumbered title to the interest of the
Selling Participant being sold.
18.7 Failure to Accept Offer
If the Remaining Participant fails to notify the Selling Participant before the
expiration of the time limited therefor that it will purchase any interest
offered, the Selling Participant may sell and transfer such interest to the
Proposed Optionee at the price and on the terms and conditions specified in the
Offer for a period of 60 days, provided that the terms of this agreement shall
again apply to such interest if the sale to the Proposed Optionee is not
completed within the said 60 days.
18.8 Condition Precedent
Any sale hereunder shall be conditional upon the Proposed Optionee delivering a
written undertaking to the Remaining Participant, in form and substance
satisfactory to its counsel, to be bound by the terms and conditions of this
Agreement and the Joint Venture Agreement.
18.9 No Other Transfers
Except as provided in this agreement, neither party may transfer an interest in
the Claims or this Agreement without the written consent of the other party.
19. CURRENCY
--- --------
Unless otherwise stated, all currency referred to in this Agreement are stated
in lawful currency of Canada.
20. OPTION ONLY
--- ------------
This is an option only and except as specifically provided otherwise, nothing
herein contained shall be construed as obligating the Optionee to do any acts or
make any payments hereunder and any act or acts or payments made hereunder shall
not be construed as obligating the Optionee to do any further acts or make any
further payments save and except for those obligations arising out of sections
10, 11, and 13.
21. RELATIONSHIP OF PARTIES
--- -------------------------
Nothing contained in this Agreement shall, except to the extent specifically
authorized hereunder, be deemed to constitute either a party, partner, agent or
legal representative of the other party.
22. FURTHER ASSURANCES
--- -------------------
The parties hereto agree to execute all such further documents and to perform
all such other acts and deeds as may be necessary to give full force and effect
to this Agreement.
23. TIME OF ESSENCE
--- -----------------
Time shall be of the essence.
24. ENUREMENT
--- ---------
The terms of this Agreement shall enure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, administrators,
successors and permitted assigns.
25. REGULATORY APPROVAL
--- --------------------
This Agreement is subject to an Effective Date being determined on or before
December 31, 1996, and failing the establishment of an Effective Date by that
date, either party may terminate this Agreement by notice in writing to the
other provided, however, each party undertakes to use its best efforts to have
notice of this Agreement accepted for filing by the Exchange on or before
December 31, 1996.
26. WAIVER
--- ------
The parties may each agree in writing to waive the condition precedent set forth
in section 25 at or prior to the limitation date for the fulfilment of the
condition and where the condition is waived in full the date of waiver shall be
deemed the Effective Date of this Agreement notwithstanding any other term or
condition herein.
27. INDEPENDENT COUNSEL
--- --------------------
Each of the parties acknowledges and confirms that:
a. Werbes Xxxxxx and Company has acted solely for and independently
represented the Optionee in connection with the transactions referred to in this
Agreement; and
b. both the Optionee and Werbes Xxxxxx and Company have recommended to the
Optionor that it seek and obtain independent legal and tax advice from its own
solicitor with respect to this Agreement and the transactions referred to herein
prior to its execution and the Optionor has been provided sufficient opportunity
to do so and understand the terms of, and its respective rights and obligations
under, this Agreement.
28. RECORDED NOTICE
--- ----------------
A party shall be entitled to record this Agreement against title to the Claims
with the appropriate government offices.
29. COUNTERPARTS
--- ------------
This Agreement may be executed in any number of counterparts, each of which when
executed shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument and a facsimile copy of this Agreement
executed by a party hereto in counterpart or otherwise will be deemed to be a
valid and binding Agreement and accepted as an original of the Agreement until
such time as each of the Parties has an originally executed Agreement in its
possession.
IN WITNESS WHEREOF the parties hereto have hereunto affixed their hands and
seals as of the day and year first above written.
THE CORPORATE SEAL of )
GLOBE RESOURCES INC. was )
hereunto affixed in the )
presence of: )
)
/s/unknown ) (c/s)
___________________________ )
)
)
___________________________ )
)
THE CORPORATE SEAL of )
GETTY COPPER CORP. was )
hereunto affixed in the )
presence of: )
)
/s/unknown ) (c/s)
___________________________ )
)
)
___________________________ )
)
SCHEDULE "A" - DEFINITIONS
For the purposes of the Agreement to which this Schedule "A" is annexed, the
following words, phrases and definitions shall have the following meanings:
a. "Affiliate" means any partnership, joint venture, corporation or other
entity which, directly or indirectly, controls is controlled by, or is under
common control with, a Participant and, for the purposes hereof, "control" means
possession, directly or indirectly, of the power to direct or cause direction of
the management and policies of the entity through ownership or voting
securities, contract or otherwise;
b. "Allowable Deductions" means
i. all freight charges from the shipping point to the smelter or other
place of sale;
ii. all other proper treatment or other charges at such smelter or other
place of sale, and
iii. provincial or federal royalties due and payable on production, if any;
c. "Claims" means the Crown granted mineral claims more particularly
described in Schedule "B" hereunto annexed;
d. "Commercial Production" means Operating the Property as a Mine but shall
not include milling of ores for the purpose of testing or milling by a pilot
plant or milling during an initial tune-up period of a plant. Commercial
Production shall be deemed to have commenced:
i. if a mill is located on the Property, on the last day of a period of
40 consecutive days in which, for not less than 30 days, Mineral
Products have been processed from the Property at not less than 60% of
the mill's rated capacity; or
ii. if no mill is located on the Property, the earlier of
A. the last day of the first period of 30 consecutive business days
during which ore has been shipped from the Claims for the purpose
of earning revenues; or
B. if a permanent heap xxxxx pad is used on or off the Property for
the purpose of processing ore from the Property, the first day
following the period which the first 5,000 tons of commercial
grade ore from the Property has been placed on the pad and there
is a permanent processing installation located contiguous to the
pad capable of processing in an efficient and economic manner
copper
bearing solutions derived from the leaching of the ore placed on
the pad and cathode copper has been produced from such solutions;
e. "Earning Option" means the right and option granted hereunder by the
Optionor to the Optionee, as more particularly described in section 4;
f. "Effective Date" is the date Notice of this Agreement is accepted for
filing by the Vancouver Stock Exchange pursuant to a submission made by the
Optionee;
g. "Expenditures" means the Exploration and Development Work expenditures
set forth in section 5;
h. "Exploration and Development Work" means the activity, operation or work
performed in ascertaining the existence, location, quality or quantity of a
deposit of minerals and shall include the preparation of any feasibility study
with respect to the deposit of minerals;
i. "Feasibility Report" in relation to any proposed Option of the Property
as a Mine, means a study of all aspects of the proposed Operation of the
Property as a Mine prepared by a reputable mining engineer mutually agreed to by
the parties in respect of the project which study shall be in a form generally
prepared in accordance with industry practice which:
i. states the proven and probable mineable reserves of ore and the grades
thereof;
ii. contains estimates of both capital costs and operating costs likely to
be incurred in establishing and conducting Operation of the Property
as a Mine, including costs to be incurred in mine development,
pre-production and the construction or acquisition of plant facilities
and infrastructure;
iii. analyses how to proceed with Operating the Property as a Mine to
economically and commercially extract Mineral Products;
iv. includes reference to relevant marketing and financial aspects;
v. states whether or not establishment of the proposed Operation of the
Property as a Mine is commercially viable; and
vi. is of such detail and scope as to be acceptable to a bank or other
financial institution for the purpose of deciding whether or not to
provide financing for the establishment and carrying out of the
proposed Operation of the Property as a Mine;
j. "Joint Venture" means the joint venture governing the operation of the
Claims established under the Joint Venture Agreement;
k. "Joint Venture Agreement" means a separate agreement to be entered into
by and between the parties which shall reduce into writing the terms of the
Joint Venture to be entered into for the development of the Claims;
l. "Mineral Products" means all mineral products derived from the Properties
and includes sulphides or mineral products formed from sulphides;
m. "Mining Facilities" means all mines and plants, including without
limitation, all pits shafts, haulageways and other underground workings, and all
buildings, plants, facilities and other structures, fixtures and improvements,
and all other property, whether fixed or movable, as the same may exist at any
time in, on or outside the Property and relating to the Operation of the
Property as a Mine;
n. "Net Smelter Return(s)" with respect to the sale of Mineral Products
shall be determined by multiplying the Quantity Sold by the applicable Sales
Price at the date of sale and by deducting from the resultant figure any
Allowable Deductions;
o. "Operating the Property as a Mine/Operation of the Property as a Mine"
means the extraction or production of minerals or metals from the Property, the
milling, smelting, refining, beneficiating, and other processing of such
minerals and metals and the marketing of Mineral Products;
p. "Property" means the Claims and any additional mineral interests which
may become subject to this Agreement or the Joint Venture Agreement;
q. "Quantity Sold" shall mean the volume or quantity of Mineral Products
sold by the Operator in a particular sale. If the Mineral Product so sold is
ore, concentrate, leachate, precipitate, sponge, ore or any other material
containing imputities, then the Quantity Sold shall be the volume or quantity of
the mineral in question actually contained in the sold Mineral Product. In any
event, the Quantity Sold shall be established by sound and generally accepted
assaying or other analytical practices and procedures. For purposes of this
Agreement, the Operator may sell to any purchaser whatsoever; and
r. "Sales Price" means the greater of the actual price received for the
Mineral Products sold or
i. for gold or silver, the average afternoon London fixing price or
refined gold or silver bullion on the date of such sale, and
ii. for Mineral Products other than gold or silver, the average price for
the metal or mineral in question during the week or sale as quoted in
Metals Week, published by XxXxxx-Xxxx. In the event that the necessary
price is not quoted in Metals Week or the publication thereof ceases
or is suspended, then the Sales Price shall be the average price
quoted for the metal or mineral in question during the week of sale as
reported by such other publication or source as is generally
recognized in the mining
industry as reflecting the price at which that metal or mineral was
being offered for sale and purchase during the week of sale.
SCHEDULE "B" - CLAIMS
Kamloops Mining Division, British Columbia
Claim Name Lot/Tenure Number
----------- ------------------
Xxxxxxxxx 000X
Xxxxxxxx 000X
Imperial 000X
Xxxxxxxxxxx 000X
Xxxxxxxx 000X
Xxxxxxxxx 000X
Xxxxxxxx Fraction 200A
Glenora 4467
Highland No. 2 4468
