PURCHASE OPTION AGREEMENT
Exhibit
10.2
This
Agreement is
dated the 13th day
of April, 2010
BETWEEN:
Big Bear
Mining Corporation
00000 X.
Xxxxxx Xx. Xxxxx 000-000
Xxxxxxxxxx,
Xxxxxxx 00000
(herein
the “Optionee”)
AND
XXXXX XXXX ENGLISH, for and on
behalf of
RUBICON
MINERALS CORPORATION
P. X. Xxx
000
Xxxxxx,
Xxxxxxxx, XXX0XX
(herein
the “Optionor”)
WHEREAS
the Optionor is the recorded and beneficial holder of certain unpatented
mining claims which are filed with the Ministry of Northern Development Mines
and Minerals which Claims are situated in the Township of Xxxxxxx in the
District of Red Lake in the Province of Ontario, and more particularly described
in Schedule "A" attached hereto and forming a part of this Purchase Option
Agreement (the “Agreement”);
AND WHEREAS
the Optionor has agreed to grant an option to the Optionee to acquire a
one hundred percent (100%) undivided interest in the unpatented mining claims
associated with the Property upon the terms and conditions set forth
herein.
NOW THEREFORE
THIS AGREEMENT WITNESSETH that, in consideration of the mutual covenants
expressed herein, the payment of funds and the issuance of shares set forth
herein, the parties hereto agree as follows:
1. Interpretation
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(a)
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Definitions,
The following terms, wherever used in this Agreement, shall have the
meanings set forth below:
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(b)
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"Effective Date" means
the date first written above
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(c)
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"Minerals" shall mean the
end products recovered, produced or derived from operating the Property as
a mine;
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(d)
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"Mining Operations" means
every kind of work done on or in respect of the property or the product,
derived from the Property during the subsistence of the Option by or under
the direction of the Optionee including, without limiting the generality
of the foregoing, the work of assessment, geophysical. geochemical and
geological surveys, studies and mapping, investigating, drilling,
designing, examining, equipping, improving, surveying, shaft-sinking,
raising, cross-cutting and drifting, searching for, drifting, trucking,
sampling, working and procuring minerals, ores and metals, surveying and
bringing any mining claims to lease or patent, and all other work usually
considered to be prospecting, exploration, development and mining work; in
paying wages and salaries of workers engaged in the work and In supplying
food, lodging, transportation and other reasonable needs of the workers;
in paying assessments or premiums for workers' compensation insurance,
contributions for unemployment insurance or other pay allowances or
benefits customarily paid in the district to those workers; in paying
rentals, licence renewal fees, taxes and other governmental charges
required to keep the property in good standing; in purchasing or renting
plant, buildings, machinery, tools, appliances, equipment or supplies and
in installing, erecting, detaching and removing them; mining, milling,
concentrating rehabilitation, reclamation, and environmental protections
and in the management of any work which may be
done on the Property or in any other respect necessary for the due
carrying out of the prospecting, exploration and development
work;
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(e)
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"Mining Rights" includes
mineral rights and the right to conduct Mining Operations on the Property
and further includes the meanings and rights attributed to Mining Rights
and mineral rights under the Mining Act, R.S.O. 1990,
c.M-14 and amendments
thereto;
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(f)
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"Property" means all of
the unpatented mining claims being optioned by the Optionor as more
particularly described in Schedule "A" including all Mining Rights as the
context so implies;
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(g)
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"Production Royalty"
means the payments required to be paid pursuant to Article
7;
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1.1 Headings. The headings of this
Agreement and the schedules are solely for convenience of reference and do not
affect the interpretation of it or define, limit or construe the contents of any
provision of this Agreement.
1.2 Number and
gender. Words importing the singular number shall include the plural and
vice versa, words importing the neuter gender shall include the masculine and
feminine genders, and words importing persons shall include firms and
corporations and vice versa.
1.3 Governing
law. This
Agreement and the rights and obligations and relations of the parties shall be
governed by and construed in accordance with the laws of the Province of Ontario
and the federal laws of Canada applicable therein (but without giving effect to
any conflict of law rules). The parties agree that the courts of Ontario shall
have jurisdiction over any action or other legal proceedings based on any
provisions of this Agreement. Each party attorns to the jurisdiction of the
courts of the Province of Ontario.
1.4 Currency. All references to
currency in this Agreement are references to Canadian currency.
1.5 Further
Assurances. Each party
hereto agrees from time to time, subsequent to the date hereof, to execute and
deliver or cause to be executed and delivered to the others of them such
instruments or further assurances as may, in the reasonable opinion of either of
them, be necessary or desirable to give effect to the provisions of this
Agreement or as may be reasonably required for registering or recording changes
in ownership interests in the property.
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1.6 Schedules. The following are
schedules attached and incorporated in this Agreement by reference and are
deemed to be a part hereof:
Schedule
“A” - Property
1.7 References. Unless otherwise
stated, a reference to a numbered or lettered paragraph refers to the paragraph
bearing that number or letter in this Agreement. A reference to this Agreement
or in this Agreement means this Agreement including the schedules, together with
any amendments.
2. Optionor’s
Representations and Warranties. The Optionor represents
and warrants to the Optionee that:
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(a)
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it
is the beneficial and registered or recorded owner of a one hundred
percent (100%) interest in the unpatented mining
claims;
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(b)
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the
mining claims are in good standing, free and clear of all
encumbrances;
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(c)
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the
Property has been duly and validly located and recorded pursuant to the
applicable legislation of the Province of Ontario constituting valid and
subsisting Mining Rights and surface rights owned in fee simple and that
the property is in good standing with respect to property tax requirements
and will be maintained by the Optionor during the period of this Agreement
until termination, abandonment or
expiration;
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(d)
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it
has the full and undisputed right to deal with the Property as provided
for in this Agreement; and
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(e)
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the
Property is not subject to any pending or threatened claims by any third
party or any governmental agency.
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3.1 Grant of Option to Earn
Interest
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(a)
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The
Optionor hereby grants to the Optionee the sole, exclusive, irrevocable
and immediate working right to acquire a one hundred percent (100%)
interest in the unpatented mining claims from the Optionor (subject to the
Production Royalty in Article 7) by making the payments described herein
and by complying with the terms and conditions of this
Agreement.
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(b)
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Upon
the full amount of the cash payments and shares set forth in Clause 3.2
having been paid and issued to the Optionor, the Optionor shall deliver to
the Optionee a signed transfer in proper registerable form conveying all
of the Optionor's right, title and interest in the Mining Rights to the
Optionee. The said Transfer shall be prepared by and at the expense of the
Optionee.
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(c)
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Upon
execution of this Agreement, the Optionee may register this Agreement or
notice of this Agreement against title to the
Property.
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3.2 Exercise
of Option. In
order to maintain in force the working right and option granted herein and to
exercise the option, the Optionee must, upon completion of normal and reasonable
due diligence and approval of the Toronto Stock Exchange (“TSX”) and the British
Columbia Securities Commission (“BCSC”) if the Optionee is a public
company):
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(a)
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Share Issuance: issue
the shares and make the cash payments as hereinafter set
forth:
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The
Optionee shall issue to the Optionor a total of 80,000 common shares in the
capital stock of Big Bear Mining Corp. (OTCBB/BGBR) according to the following
schedule:
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(i)
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an
"Initial Grant" of 20,000 common shares to the Optionor within ten (10)
days of receiving regulatory approval of the terms of
this Agreement;
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(ii)
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20,000
additional common and shares on the first anniversary date
of the Initial Grant;
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(iii)
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20,000
additional common shares on the second anniversary date
of the Initial Grant;
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(iv)
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20,000
additional common shares on the third anniversary date
of the Initial Grant; and
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(v)
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Zero
additional common shares on the fourth anniversary date
of the Initial
Grant;
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(b)
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Cash
Payments: The Optionee shall make five (5) cash payments
to the Optionor totalling $ 84,000.00 according to the following
schedule:
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(i)
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An
"Initial Payment" of $7,000.00 on signing of this
Agreement;
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(ii)
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An
additional $12,000.00 on the first anniversary date
following the Initial Payment;
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(iii)
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An
additional $15,000.00 on the second anniversary date
following the Initial Payment;
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(iv)
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An
additional $20,000.00 on the third anniversary date
following the Initial Payment;
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(v)
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An
additional $30,000.00 on the fourth anniversary date
following the Initial Payment.
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3.3 Registration
of Transfer.
Upon the full amount of the cash payments and shares set forth in Clause
3.2 having been paid and issued to the Optionor, the Optionee shall be entitled,
without further notice, to register the transfer vesting one hundred percent
(100%) interest in the Mining Rights to the Optionee.
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3.4 Acceleration.
The Optionee at its sole discretion may accelerate any of the requisite
payments and issuance of shares described above for the dates specified herein
and proceed to acquire the Mining Rights upon paying all of the sums and issuing
all of the shares as set forth herein.
4. Working
Rights. During the currency of
the Option, the Optionee shall have the sole and exclusive working right to
enter on and conduct the Mining Operations on the Property as the Optionee in
its sale discretion may decide. The Optionee shall have quiet and exclusive
possession from the date of this Agreement and thereafter during the currency of
the working right and option in good standing, with full power and authority to
the Optionee, its servants, agents, workers or contractors, to carry on Mining
Operations in searching for Minerals in such manner as the Optionee in its
discretion may determine, including the right to erect, bring and install on the
Property all buildings, plant, machinery, equipment, tools, appliances or
supplies as the Optionee shall deem necessary and proper and the right to remove
there from reasonable quantities of rocks, ores and Minerals and to transport
them for the purposes of sampling, metallurgical testing and assaying. All
Mining Operations conducted by the Optionee shall be in accordance with good
exploration, development and mining practice, and in compliance with all
applicable legislation and health safety standards. Notwithstanding the
foregoing, the Optionee shall use its best efforts not to disturb or interfere
with any other operations which may be carried out on the Property and maintain
adequate insurance coverage at all times.
5. Indemnity. The Optionee shall
indemnify and save the Optionor harmless from and against all losses,
liabilities, claims, demands, damages, expenses, suits, injury or death in any
way referable to Mining Operations conducted on the Property provided that, the
Optionor shall not be indemnified for any loss, liability, claim, demand,
damage, expense, injury or death resulting from the negligence or wilful
misconduct of the Optionor or its employees, agents or contractors.
6. Covenants of the
Optionee.
During
the term of this Agreement the Optionee shall:
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(a)
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comply
with all applicable laws, regulations, by-laws, rules, orders and
ordinances with respect to its operations hereunder in conducting its
exploration and mining activities on the subject lands whether federal,
provincial or municipal, including discharging the duty to consult with
all First Nations groups;
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(b)
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conduct
all operations in accordance with Environmental Standards. "Environmental
Standards”· means all laws, orders, rules and regulations of
whatever authority, as they may apply to and effect environmental and
pollution control standards in effect, whether federal, provincial or
municipal;
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(c)
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conduct
all exploration, development and mining operations and supervise the
operation of all contractors and or sub-contractors in, on and under the
Property in a careful manner and in accordance with good mining practice
and in compliance with all applicable legislation and, without limiting
the generality of the foregoing the Optionee shall on the completion of
its work or at the end of the term of this Agreement leave the subject
property in a safe condition with all openings safeguarded in accordance
with the provisions of all applicable legislation or regulations affecting
them;
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(d)
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subject
to the other provisions of this Agreement, the Optionee shall have
complete discretion and control with respect to all prospecting,
exploration, development or other mining work carried out on the Property
provided, however, that all operations on the Property shall be conducted
in a manner which will cause the least damage and defacement practicable
under the circumstances. All access roads shall be set out in consultation
with the Optionor and both parties will make their best efforts to
co-operate so as to enable Optionee to conduct its operations in a
reasonable manner while minimizing the damage and interference to the
Property and to any timber resources thereon. The Optionee shall reimburse
the Optionor or compensate them for all actual physical damage to the
Property and actual damages to improvements, roads, xxxxx, crops, timber,
grass and livestock resulting from the Optionee's operations. Upon
completion of its work or at the end of the term of this Agreement the
Optionee shall restore and remediate the Property in accordance with good
mining practices so as minimize permanent damage or interference with the
Property;
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(e)
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pay
or cause to be paid all workmen's wages and for all materials, supplies
and services delivered to or performed on or respect of the Property, so
as to avoid any Woodsman Lien or Construction Lien from
arising;
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(f)
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pay
all timber dues or other assessments or charges which may be levied or
imposed under any statutory provision or otherwise arising, as a
consequence of the harvesting of any timber resources from the
Property;
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(g)
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maintain
the property in good standing by doing all assessment work, recording all
exploration and development work done on the property In accordance with
the requirements of the Mining Act, R.S.O. 1990,
c.M-14 and amendments thereto, paying all exploration licenses fees
and by doing all other acts and things that may be necessary in that
regard until the termination or expiration of the Agreement or the
abandonment of rights and options granted
hereunder;
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(h)
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abide
by all directions of the Minister or any other governmental authority
having jurisdiction over its operations hereunder;
and
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(i)
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maintain
adequate liability and other insurance and if requested by Optionor, to
provide evidence of same.
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7. Production
Royalties. If the Optionee acquires the Mining Rights to the Property and
begins commercial production on any part of the Property, the Optionee shall pay
to the Optionor a royalty ("Production Royalty") calculated at two percent (2%)
of the Net Smelter Returns as defined, calculated and set forth
herein.
“Net Smelter Returns” means the
actual proceeds derived from any mint, mill, smelter, refinery or purchaser for
the sale of ores, metals or concentrates produced from the Property and sold,
after deducting from such proceeds the following charges to the extent that they
were not deducted by the purchaser in computing payment: all reasonable smelting
and refining charges, cost of transportation or ores, metals or
concentrates from the mining property to any mint, mill, smelter or other
purchaser, insurance of such ores, metals or concentrates.
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8. Accounting and Payment of Production
Royalty.
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(a)
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While
the Production Royalty remains payable hereunder, the Optionee shall not
later than thirty (30) days after the end of each quarter of each calendar
year render to the Optionor an interim statement of account in reasonable
detail which statements shall be accompanied by the payment of the
Production Royalty payable pursuant to this Agreement for the previous
quarter year.
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(b)
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When
all Minerals in any calendar year in which the Production Royalty remains
payable have been sold and the revenues and expenditures determined, the
Optionee shall, within sixty (60) days after the termination of such
calendar year, render a final statement of account in reasonable detail
together with the payment of the balance if any, of the Production Royalty
for such previous year.
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(c)
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If
any amounts have been paid in excess of those to which the Optionor's is
entitled under the terms of this Agreement in any year, the equivalent
amount shall be deducted from the next Royalty payment or payments. All
payments not made to the Optionor within the time periods set forth herein
shall bear interest at the prime rate plus one percent
(1%).
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9. Production
Royalty Buy-Back.
The Optionee or its assigns shall have the right at any time to purchase
from the Optionor one-half (1/2) of the two percent (2%)
Net Smelter Returns Production Royalty by way of a one time payment to the
Optionor of the sum One Million Dollars ($1,000,000) in Canadian funds. Upon
such purchase and payment being made, the Production Royalty shall thereafter be
calculated as being reduced to one percent (1 %) of the Net Smelter
Returns.
10. Abandonment. The Optionee may at any
time, during the currency of the Option, abandon anyone or more of the claims
which comprise the Property. The Optionee shall give the Optionor notice in
writing of any abandonment. In the event that any of the claims comprising the
Property are abandoned (including the termination of this Agreement without the
Optionee having exercised the Option), the Optionee will re-transfer the claims
to the Optionor, which shall be in good standing for a period of at least one
(1) year from the notice of abandonment.
11. Assignment. While this Agreement
remains in effect the either party may sell, assign or otherwise transfer all or
part of its rights under this Agreement upon the written consent of the other,
not to be unreasonably withheld.
12. Buildings and
Equipment: In the event that the
Optionee abandons the working right and option granted to it herein, all
buildings, plant, equipment, machinery, tools, appliances and supplies which the
Optionee may have brought onto the Property, either before or during the period
of the working right and option, may be removed by the Optionee at any time not
later than nine (9) months after the abandonment of the working right and
option. Any buildings, plant, equipment, machinery, tools, appliances and
supplies left on the Property during the nine (9) month period shall be at the
Optionee's sole risk and, if not removed after the nine (9) month period, shall
become the Property of the Optionor. During the currency of the option, the
Optionor shall not remove from the Property any of the Optionee's buildings,
plant, equipment, machinery, tools, appliances and/or supplies.
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13.1 Information. If the Optionee
abandons the working right and option granted to it under this Agreement the
Optionee shall, on request provide to the Optionor, a copy of all
non-interpreted reports, maps, plans, drill logs and surveys of all work
pertaining to tile Property provided that the Optionee does not warrant the
accuracy of these reports, maps, plans, drill logs and surveys and shall not be
liable for any inaccuracies contained in them. The Optionee agrees
that the Optionor may disclose the details of this Agreement to its advisors and
to governmental, regulatory or First Nations groups.
13.2 The
Optionee shall review any press release that refers to the Optionor with the
Optionor prior to its release by sending emails to:
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Perry
English:
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xxxxxxxx@xxx.xxx
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Xxxxx
Xxxxxxx:
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xxxxxxx@xxxxxxxxxxxxxxx.xxx
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Xxxxx
Kumoi:
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xxxxxx@xxxxxxxxxxxxxxx.xxx
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and for
clarity, shall not issue any press release that refers to the Optionor without
prior written approval of the Optionor. The Optionor will take all reasonable
efforts to send comments that it may have regarding any press release received
from the Optionee to the Optionee by email within forty eight (48) hours of
receipt of such press release.
13.3 The
Optionee agrees that the Optionor may disclose the details of this Agreement to
its advisors and to any governmental, regulatory or First Nations
groups.
14. Notices. All payments and
communications which may be or are required to be given by either party to the
other shall (in the absence of any specific provision to the contrary) be in
writing and delivered, faxed, or sent by courier or prepaid registered mail to
the parties, at their following respective addresses and fax
numbers:
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Optionee:
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Big
Bear Mining Corporation
00000
X. Xxxxxx Xx. Xxxxx 000-000
Xxxxxxxxxx,
Xxxxxxx 00000
Fax
No: 000 000 0000
e-mail:
xxxxxxx@xxxxxxxxxxxxx.xxx
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Optionor:
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Xx.
Xxxxx English, for and on behalf of
Rubicon
Minerals Corporation
P.
X. Xxx 000
Xxxxxx,
Xxxxxxxx, XXX 0XX
Fax
No: 000-000-0000
e-mail: xxxxxxxx@xxx.xxx
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With a copy by email
to:
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Xx.
Xxxxx Kumoi
Vice
President General Counsel
e-mail: xxxxxx@xxxxxxxxxxxxxxx.xxx
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And if
any payment or communication is sent by courier or prepaid registered mail, it
shall, be conclusively deemed to have been received on the third (3rd)
business day following the mailing of it and, if delivered or telecopied, it
shall be conclusively deemed to have been received at the time of delivery or
transmission. Notwithstanding the foregoing provisions with respect to mailing,
in the event that it may be reasonably anticipated that, due to any strike,
lock-out or similar event involving an interruption in postal service, any
payment or communication will not be received by the addressee by no later than
the third business day following the mailing of it, then the mailing of any
payment or communication must then be sent by an alternative means of
transportation which it may reasonably be anticipated will cause the payment or
communication to be received reasonably expeditiously by the addressee. Either
party may from time to time change its address by notice to the other in
accordance with this paragraph.
15. Further
Assurances and Covenants. Each party shall
execute such deeds, documents and give such other further assurances as are
necessary or appropriate in connection with the performance of its obligations
under this Agreement and to facilitate the acquisition of any and all necessary
regulatory approvals herein.
16. Benefit
of Successors. This Agreement shall ensure
to the benefit of and be binding on the parties and their respective heirs,
executors, administrators, successors and assigns.
**Balance
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IN WITNESS
WHEREOF the parties have signed and sealed this Agreement.
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Optionee:
Big Bear Mining Corporation
Xxxxx Xxx, President Big Bear Mining
Corp.
Signature
___________________________________
Print
Name
____________________________________
Date
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Optionor: XXXXX XXXX ENGLISH for
and on behalf of Rubicon
Minerals Corporation
___________________________________
Signature
Xxxxx Xxxx
English____________________
Print
Name
___________________________________
Date
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SCHEDULE
``A``
Property
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Township/Area
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Claim
Number
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Recording
Date
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Claim
Due Date
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Status
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Percent
Option
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Xxxxxxx
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4214555
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Mar.
17, 2009
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Mar.
17, 2011
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Active
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100%
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Xxxxxxx
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4214557
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Mar.
17, 2009
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Mar.
17, 2011
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Active
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100%
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Xxxxxxx
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4214558
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Mar.
17, 2009
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Mar.
17, 2011
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Active
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100%
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