EXHIBIT "2.1"
DYNARESOURCE, INC.
"XXXXX XXX LEASE AGREEMENT"
MINERAL EXPLORATION LEASE
WITH OPTION TO PURCHASE
THIS AGREEMENT, is entered into this 23rd day of January 1998 by and
between: West Coast Mines, Inc., a California corporation, Towers at Xxxxxxxx
Square, 0000 X. X'Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxxxx/Xxxxxx, XX 00000
hereinafter called LESSOR (whether one or more); and NEWCREST RESOURCES, INC., a
Colorado corporation, 0000 Xxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000,
hereinafter called NEWCREST:
WITNESSETH:
1. That LESSOR, for and in consideration of the sum of $50,000.00
(the "Initial Payment") in hand paid, and of the covenants and agreements
hereinafter contained, has this day granted, leased and let and by these
presents does hereby grant, lease and let unto NEWCREST the exclusive right to
explore for minerals, on the terms and conditions hereinafter set forth, in,
upon and under the following described land situated in Humboldt County, Nevada,
to wit:
Township 36 North, Range 36 East MDB&M
Section 1: Xxxx 0, 0, 0, 0, X0/0X0/0, Xx/0X0/0, Xx/0XX0/0 TAX
PARCEL NO. 00-000-00
containing 555.40 acres, more or less, hereinafter called the
"Subject Property".
2. This lease shall remain in force for a term of five (5) years from
the date hereof, provided that NEWCREST shall make and tender to the LESSOR the
following annual rental payments:
a. On the first anniversary of this lease, the sum of $100,000.00
b. On the second anniversary of this lease, the sum of $150,000.00
c. On the third anniversary of this lease, the sum of $250,000.00
d. On the fourth anniversary of this lease, the sum of $250,000.00
Failure of NEWCREST to timely pay any rental payment when due shall,
upon ten days prior notice from LESSOR and the failure thereafter of NEWCREST to
make such payment within ten days after receipt of notice, terminate this lease.
NEWCREST shall have no other liability for failure to make rental payment.
Termination of this lease shall relieve NEWCREST of any obligations for payments
of any nature becoming due after the date of termination.
3. NEWCREST shall have the exclusive right for itself and its
employees and contractors to: (a) enter upon and have possession of the Subject
Property, (b) carry out, at its expense, exploration (including road building),
sampling, testing, development and any other studies on the Subject Property,
(c) use any water to which LESSOR has rights or which is appropriated or
otherwise acquired by NEWCREST for its operations on the Subject Property; and
(d) remove from the Subject Property reasonable quantities of rock, ores,
minerals and metals and transport the same for the purpose of sampling
(including bulk sampling), testing and assaying, provided that NEWCREST shall
not conduct commercial mining operations under the terms of this lease. NEWCREST
shall comply with all applicable laws, rules and regulations, including
applicable bonding requirements, and shall carry out its operations in a good
and workmanlike manner in accordance with generally accepted exploration
practices. NEWCREST shall maintain insurance with a reputable insurance carrier
in the amounts customary in the mining industry for projects comparable to the
operations hereunder.
4. NEWCREST, with the co-operation of LESSOR as required, shall be
responsible for obtaining all appropriate permits or authorizations prior to
commencement of work and shall be responsible for performing any required
reclamation resulting from its work on the Subject Property. NEWCREST shall have
no responsibility for reclamation of, or any form of environmental response or
remediation with respect to, any disturbances or other conditions existing on
the Subject Property as of the date hereof. NEWCREST on behalf of itself and all
of its agents, representatives, employees, licensees, contractors, invitees,
guests, vendors, related or affiliated companies, sublessees and/or assigns
(collectively "NEWCREST) agrees to indemnify and save LESSOR harmless of and
from any and all liability, damage, expense, cause of action, suits, claims or
judgments resulting from: (a) injury to person or property which is proximately
caused by NEWCREST'S possession of or work on the Subject Property including,
without limitation, any act, failure to act, or negligence of NEWCREST; or (b)
the placement of any hazardous materials or environmental wastes on the Subject
Property by NEWCREST. NEWCREST, at its sole cost and expense, shall perform any
reclamation which may be required by any governmental or quasi-governmental
agency and indemnify LESSOR from any damage, loss or injury which may be
incurred as a result of the presence of such substance on the Subject Property.
5. While this Lease remains in force and effect, NEWCREST shall within
sixty (60) days of the last day of each of the first three quarters of each
calendar year furnish LESSOR with a report which summarizes NEWCRESTS activities
on the Subject Property during that quarter. No documents containing scientific
or technical data shall be included with these reports. With the quarterly
report furnished by NEWCREST within sixty (60) days after the last day of each
calendar year (the fourth quarter report), NEWCREST shall furnish LESSOR one
copy of each document in NEWCREST'S possession, exclusive of interpretative
material or opinions, not previously furnished to LESSOR that contains
scientific or technical data generated by NEWCRESTS exploration operations on
the Subject Property during that calendar year. NEWCREST shall not be obligated
to furnish data obtained on adjoining properties. LESSOR agrees to and hereby
indemnifies and holds NEWCREST harmless from and against any and all losses,
claims or liabilities which may be imposed upon or asserted against NEWCREST (by
LESSOR or by any other party or entity) on account of or arising directly or
indirectly from reliance on the content or accuracy of the reports or documents
furnished to LESSOR by NEWCREST under this section. Each report and all
accompanying information, data and documents and all information otherwise
provided by NEWCREST to LESSOR under this Lease shall be treated as confidential
by LESSOR and the contents thereof shall not be disclosed by LESSOR to any third
party other than LESSORS legal advisors and technical consultants without
NEWCRESTS prior written consent; provided, however, that such legal advisors and
technical consultants shall agree in writing to keep such information
confidential as provided herein.
6. LESSOR represents and warrants to NEWCREST that:
a. LESSOR has not transferred or encumbered any interest whatsoever in
the Property by any document which does not appear in the public real property
records of Humboldt County, Nevada;
b. Except for this Lease, LESSOR is not a party to any existing oral or
written contract of any kind (recorded or unrecorded) which does or could have
any impact whatsoever with regard to record, possessory, legal or equitable
title to the Subject Property and/or the exploration of the Subject Property;
c. There are no pending or threatened actions, suits, claims or
proceedings with respect to the Subject Property;
x. XXXXXX owns one hundred percent (100%) of the entire and undivided
record title to the Subject Property, free and clear of any defects, liens or
encumbrances whatsoever.
7. NEWCREST represents and warrants to LESSOR and LESSOR represents and
warrants to NEWCREST, that:
a. That party has the capacity to enter into and perform this Lease and
all transactions contemplated herein and that any required corporate and other
actions necessary in order to authorize entry into and performance of this Lease
have been properly taken;
b. This Lease has been duly executed and delivered by that party and is
valid and binding upon that party in accordance with its terms;
c. The person or persons executing this Lease as or on behalf of that
party is or are fully authorized to do so; and
d. That party will not breach any other agreement or arrangement by
entering into or performing this Lease.
8. OPTION TO PURCHASE. At any time while this lease is in effect,
NEWCREST may, by notice to LESSOR, elect to purchase all of LESSOR'S right,
title and interest in and to the Subject Property for a total purchase price of
$2,000.000.00. The price shall be exclusive of and in addition to the Initial
Payment and all of the rental payments provided for in Section 2 of this lease.
Any rentals not paid at the time NEWCREST elects to purchase LESSOR'S interest
shall be paid in full along with the purchase price. The purchase of the
property shall be consummated no later than thirty days after the date of
receipt by LESSOR of the notice from NEWCREST exercising the Purchase Option, at
a time and place agreed upon by the parties. At the closing of the purchase of
the Subject Property, NEWCREST shall deliver to LESSOR $2,000.000.00 plus the
amount of any unpaid rentals in immediately available funds, and LESSOR shall
deliver to NEWCREST a deed conveying to NEWCREST all of LESSOR'S right, title
and interest in and to the Subject Property together with all rights-of-way,
easements, improvements, structures, fixtures and all other property rights
appurtenant to and/or owned or used by LESSOR in connection with the described
real property, and any right, title and interest in and to any adjoining or
adjacent roads or rights-of-way, all vacated roads and rights of way, all strips
and gores of land adjoining the land, and all water and water rights appurtenant
to the property unless otherwise specifically excluded; subject to and provided,
however, that LESSOR shall retain and reserve for itself a 2-1/2% Gross
Production Royalty, as defined in Exhibit A attached hereto, and paid in the
manner described in Exhibit B attached hereto, on any minerals sold by Newcrest
that were mined within the surface boundaries of the Subject Property extended
downward vertically. As of the time of the closing, the Subject Property shall
be free and clear of all liens and encumbrances. NEWCREST shall pay all closing
costs. Upon the closing of the purchase of the Subject Property, this Lease
shall automatically be terminated effective as of the date of the closing,
provided, however, that all representations and warranties made by the LESSOR
hereunder shall survive closing and delivery of the deed.
9. While this lease is in effect, LESSOR shall timely pay all taxes
and assessments levied on the Subject Property by any state or local
governmental authority, and shall pay when due all encumbrances, liens or other
charges affecting or relating to the Subject Property. If LESSOR fails to make
any of these payments when due, NEWCREST may, but shall not be obligated to,
make them on behalf of LESSOR and, if paid by NEWCREST, NEWCREST shall receive a
corresponding credit toward the purchase price at closing.
10. All notices, payments, consents, requests, demands, waivers or
other communications required or permitted by the terms of this Lease shall be
in writing, and each such communication shall be either personally delivered or
placed in the United States certified mail, postage prepaid, return receipt
requested. Each communication shall be either delivered or mailed to NEWCREST or
to LESSOR (as appropriate) at their respective addresses for notice set forth in
the initial paragraph of this Lease.
11. The rights and obligations of the parties hereto shall be fully
assignable, provided, however, that the assigning party shall first obtain the
prior written consent to the assignment by the other party, and provided further
that the other party shall not unreasonably withhold such consent. Not
withstanding the foregoing, NEWCREST may assign its rights hereunder only to an
affiliate of NEWCREST or a financially and technically capable and responsible
party. "Affiliate" means any person, partnership, joint venture, corporation or
other form of enterprise which directly controls, is controlled by, or is under
common control with NEWCREST. For purposes of the preceding sentence, "control"
means possession, directly or indirectly through one or more intermediaries, of
the power to direct or cause direction of management and policies through (i)
the legal or beneficial ownership of voting securities or membership interests;
(ii) the right to appoint managers, directors or corporate management; (iii)
contract; (iv) operating agreement; (v) voting trust; or otherwise. It is the
intention of the parties that a "financially and technically capable and
responsible party' shall be a partnership, joint venture, corporation or other
form of enterprise which is able to fund and perform the professional evaluation
and development of the Subject Property. For example, and without limitation, a
party of such significant corporate stature such as Newmont Gold Company,
Homestake Mining Company, Placer Dome Inc., or Xxxxxxx Gold Corporation is an
acceptable assignee.
12. The parties agree to execute and deliver such additional or
further formal assurances or other written documents, in proper and recordable
form, as may be reasonably necessary to carry out the intent, purposes and terms
of this Lease including, without limitation, a memorandum of this Lease to be
recorded in the official records of Humboldt County, Nevada. LESSOR shall not
make this Lease of public record without NEWCREST'S prior written consent. If
NEWCREST does not exercise the Option to Purchase, or upon termination of this
Lease, NEWCREST shall deliver to LESSOR a quitclaim deed releasing the recorded
memorandum.
13. This Lease shall inure to the benefit of, and be binding upon and
enforceable by NEWCREST and LESSOR and their respective successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Lease effective as
of the day and year first above written.
NEWCREST: LESSOR:
WEST COAST MINES, INC., a
California corporation
By: /S/ K.D. Diepolz
----------------------------
X. X. Xxxxxxxx, Chairman/CEO
STATE OF COLORADO )
) ss
COUNTY OF JEFFERSON)
The foregoing instrument was acknowledged before me on February 12
1998, by X.X. XXXXXX as President of Newcrest Resources, Inc., a Colorado
corporation.
Witness my hand and official seal.
My Commission expires: 6/20/98.
/S/ Xxxxx X. Xxxxx
---------------------
Notary Public
STATE OF TEXAS )
) ss
COUNTY OF DALLAS)
The foregoing instrument was acknowledged before me on 2/3/1998 by X.X.
Xxxxxxxx, Chairman/CEO of West Coast Mines, Inc., a California corporation.
Witness my hand and official seal.
My Commission expires: 4/13/2001
/S/ Xxxxx X. Xxxxxx
--------------------
Notary Public
EXHIBIT A: GROSS PRODUCTION ROYALTY DEFINITION
The term "Gross Production Royalty" ("GPR") as used in the Lease shall
mean the gross proceeds received by NEWCREST from the sale of minerals, or
products derived from minerals, from the Property after deducting the following:
(a) The cost of transporting mineral product from the
concentrator to a smelter, refiner or other place
of treatment, provided that the purpose of the
transportation cost is to transport a concentrate
containing recoverable gold to a smelter for
treatment. No deduction for transportation shall be
allowed with respect to the transfer or conveyance
of gold dore.
(b) All state and federal production taxes, severance
taxes and sales, privilege and other taxes measured
by production or the value of production.
The GPR will be based upon the Sales Price of the specific metals and
commodities as defined below:
(a) Refined gold (gold meeting the specifications of the
London Bullion Market Association) shall be deemed to have been sold during the
month when it is produced, and the Sales Price thereof shall be deemed to be an
amount calculated by multiplying the number of produced ounces by the average
during the same month of the London Bullion Market Associates afternoon gold
price fixings for one ounce of refined gold;
(b) Refined silver (silver meeting the specifications
established for the New York Silver Price published by Handy & Xxxxxx) shall be
deemed to have been sold during the month when it is produced, and the Sales
Price thereof shall be deemed to be an amount calculated by multiplying the
number of produced ounces by the average during the same month of New York
Silver spot price quotations published by Handy & Xxxxxx for one ounce of
refined silver:
(c) In the case of any minerals other than gold or silver,
Sales Price means the amount calculated by multiplying the number of units of
the refined metal or other mineral product produced during any month by the
average of the daily spot prices during the same month as quoted by the London
Metals Exchange for one unit of that refined metal or mineral product; and
(d) Sales Price shall be determined as set forth in subparts
(a), (b) and (C) above, irrespective of any actual arrangements for the sale or
other disposition of minerals by NEWCREST, specifically including but not
limited to forward sales, futures trading or commodities options trading, and
any other price hedging, price protection or speculative arrangements involving
the possible delivery of gold, silver or other minerals from the Subject
Property. If, for any reason, published prices for minerals produced from the
Subject Property are not available from the sources set forth above, the parties
shall select such other published commodity exchange, producer, trade
publication or other listing as will fairly reflect the spot price at which
sales of such commodities are being effected at the time of sale by NEWCREST.
EXHIBIT B: GROSS PRODUCTION ROYALTY PAYMENT PROCEDURES
1. Computation of Royalty. If and each time that minerals mined from
the Subject Property are sold by NEWCREST, NEWCREST shall calculate the Gross
Production Royalty ("GPR") realized by NEWCREST in connection with the sale. The
GPR so calculated shall then by multiplied by the Applicable Percentage and
NEWCREST shall pay LESSOR the resulting amount. LESSOR shall have no right
whatsoever to take minerals or royalty "in kind".
2. Treatment and Sale. NEWCREST shall have the right (but not the
obligation) to concentrate, mill, smelt, refine, upgrade or otherwise process or
beneficiate minerals mined from the Subject Property, at locations on or off the
Subject Property. NEWCREST shall not be liable for any values lost in processing
under sound processing practices and procedures, and no royalty shall be payable
to LESSOR with respect thereto. No earned mineral production royalty shall be
payable to LESSOR for or with respect to reasonable quantities of minerals which
are not sold by NEWCREST but are used by NEWCREST for assaying, treatment
amen-ability, metallurgical or other analytical processes or procedures.
3. Commingling. NEWCREST shall have the right of mixing or
commingling, at any location and either underground or at the surface, any
minerals mined from the Subject Property with any ores, metals, minerals, or
mineral products mined from other lands, provided that NEWCREST shall determine
the weight or volume of, sample and analyze all such ores, metals, minerals and
mineral products before the same are so mixed or commingled. Any such
determination of weight or volume, sampling and analysis shall be made in
accordance with sound and generally accepted sampling and analytic practices and
procedures. The weight or volume and the analysis so derived shall be used as
the basis of allocation of earned mineral production royalties payable to LESSOR
hereunder in the event of a sale by NEWCREST of materials so mixed or
commingled.
4. Statements and Payments. Each earned mineral production royalty
payment due to LESSOR hereunder shall be made within thirty days after the end
of the calendar quarter during which minerals are sold. Each such payment shall
be accompanied by an itemized statement setting forth all facts and figures
necessary in order to verify the accuracy of the amount of the payment. Each
payment due to LESSOR hereunder shall be made by a single check. Such payments
shall be made payable to WEST COAST MINES, INC. or to such other persons or
entities as may be designated in writing by LESSOR as the payees for purposes of
payments due to LESSOR under this Lease. Anything to the contrary in this Lease
not with-standing, NEWCREST shall not be in default hereunder for failure to
make any payment to LESSOR in timely fashion if LESSOR fails or refuses to give
NEWCREST written notice designating the persons or entities to be the payees
named on each and every check to be sent to LESSOR by NEWCREST hereunder, and
NEWCREST shall have no duty with respect to the disbursement or application of
any payments to LESSOR after such payments are made in accordance with this
Paragraph 4.
5. Audit. LESSOR shall have a period of ninety days after the receipt
by LESSOR of each statement provided for in Paragrpah 4 of this Exhibit B to
give NEWCREST notice of any objection by LESSOR thereto. If LESSOR fails to
object to a particular statement within ninety days after the receipt by LESSOR
thereof, then, subject only to the provisions of Paragraph 6 ("Adjustments") of
this Exhibit B the accuracy of such statement and the amount of any payment
transmitted therewith shall be conclusive with respect to LESSOR. If LESSOR
objects to the accuracy of a particular statement or the amount of the payment
transmitted thereby within ninety days after the statement is received by
LESSOR, a certified public accountant mutually acceptable to the parties and
retained by LESSOR may promptly audit NEWCREST's relevant books and records at
an office selected by NEWCREST and during NEWCREST's normal business hours. Any
such audit shall be made at the sole expense of LESSOR if the audit determines
that the payment in question was accurate to within three percent (3%). Any such
audit shall be made at the sole expense of NEWCREST if the audit determines that
the payment in question was inaccurate by more than three percent (3%). In any
case, the payment in question shall be adjusted to reflect the results of the
audit.
6. Adiustments. Any charges, costs or expenses or any adjustments
thereto which are actually made and given to NEWCREST by a purchaser, shipper,
processor or other creditor that were not taken into account in a statement to
LESSOR which accompanied a preceding earned mineral production royalty payment
shall be taken into account in determining the amount of the next earned mineral
production royalty payment, but no such charges or adjustments shall otherwise
affect the conclusiveness of preceding statements or payments.
MEMORANDUM MINERAL EXPLORATION LEASE
WITH OPTION TO PURCHASE
THIS MEMORANDUM MINERAL EXPLORATION LEASE WITH OPTION TO PURCHASE is
made and entered into effective as of January 23, 1998,
BY AND AMONG
WEST COAST MINES, INC.,
a California corporation,
Towers at Xxxxxxxx Square,
0000 X. X'Xxxxxx Xxxx, Xxxxx 000,
Xxx Xxxxxxx/Xxxxxx, XX 00000
(referred to below as "LESSOR")
AND
NEWCREST RESOURCES, INC.,
a Colorado corporation
0000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
(referred to below as "NEWCREST")
1. Definitions For all purposes of this Memorandum, the following
terms shall have the definitions specified in this Section 1:
(a) "Effective Date" means the date set forth in the initial
paragraph of the Memorandum;
(b) "Lease" means that certain Mineral Exploration Lease with
Option to Purchase between LESSOR and NEWCREST dated as of the Effective Date
for the Property for which this Memorandum is to give record notice.
(c) "Property" means and includes the real property described in
Exhibit A attached hereto and made a part hereof.
(d) "Option to Purchase" means the option to purchase the
Property granted to Newcrest in Section 4 of this Memorandum and in Section 7 of
the Lease;
2. Grant and Term of Lease For and in consideration of the mutual
covenants and conditions contained herein and in the Lease, the receipt and
adequacy as consideration whereof is hereby acknowledged by LESSOR, LESSOR has
leased and hereby leases the Property to NEWCREST on the terms and conditions
contained in the Lease. Unless sooner terminated as hereinafter provided, the
Lease shall remain in full force and effect for a term of five (5) years
beginning on the Effective Date and expiring on the fifth anniversary of the
Effective Date.
3. Exclusive Possession While the Lease is in force and effect, and
subject to all of the terms and conditions thereof, NEWCREST shall have the
exclusive right for itself and its employees and contractors to enter upon and
have possession of the Property.
4. Purchase Option At any time while the Lease is in effect, NEWCREST
may, by notice to LESSOR, elect to purchase all of LESSORS right, title and
interest in and to the Property at the price set forth in the Lease. At the
closing of the purchase of the Property, LESSOR shall deliver to NEWCREST a deed
conveying to NEWCREST all of LESSOR'S right, title and interest in and to the
Property free and clear of all liens and encumbrances, subject, however, to the
reservations contained in the Lease. Upon the closing of the purchase of the
Property, the Lease shall automatically be terminated effective as of the date
of the closing.
5. Assignment/Binding Effect The respective rights and obligations of
LESSOR and NEWCREST hereunder shall be freely assignable, subject, however, to
the conditions contained in paragraph 11 of the Lease. The Lease shall inure to
the benefit of, and be binding upon and enforceable by, NEWCREST and LESSOR and
their respective successors and assigns.
6. Notice All notices, payments, consents, requests, demands, waivers
or other communications required or permitted by the terms of the Lease shall be
in writing, and each such communication shall be either personally delivered or
placed in the United States certified mail, postage prepaid, return receipt
requested. Each communication shall be either delivered or mailed to NEWCREST or
to LESSOR (as appropriate) at their respective addresses for notice set forth in
the initial paragraph of the Lease.
7. Additional Lease Terms Additional terms and conditions of the Lease
are contained in the unrecorded Lease. Nothing contained herein enlarges or
diminishes the respective rights and obligations of either NEWCREST or LESSOR
under their more comprehensive Lease. Information concerning the Lease may be
obtained from NEWCREST at the address for NEWCREST given above.
IN WITNESS WHEREOF, the parties have executed this Memorandum and the
Lease effective as of the day and year first above written.
LESSOR:
NEWCREST: WEST COAST MINES, INC., a
California Corporation
By: /S/ X.X. Xxxxxx By: /S/ X.X. Xxxxxxxx
----------------------------- --------------------------------
Typed name: X. X. XXXXXX X.X. XXXXXXXX, Chairman/CEO
Title: President
STATE OF COLORADO )
) ss.
COUNTY OF JEFFERSON)
The foregoing instrument was acknowledged before me on February 12,
1998, X. X. XXXXXX as President of Newcrest Resources, Inc., a Colorado
corporation.
Witness my hand and official seal.
My Commission expires: 6/20/98
/S/ Xxxxx X. Xxxxx
-------------------
Notary Public
STATE OF TEXAS )
) ss.
COUNTY OF Dallas)
The foregoing instrument was acknowledged before me on 2/3/1998 by X.
X. Xxxxxxxx, Chairman/CEO of West Coast Mines, Inc., a California corporation.
Witness my hand and official seal.
My Commission expires: 4/13/2001
/S/ Xxxxx X. Xxxxxx
--------------------
Notary Public
EXHIBIT A
Attached to and made a part of
Memorandum Mineral Exploration
Lease with Option to Purchase
dated January 23, 1998
The Property consists of the following described land situated in
Humboldt County, Nevada, to wit:
Township 36 North, Range 36 East MDB&M
Section 1: Xxxx 0, 0, 0, 0, X0/0Xx/0, Xx/0X0/0, X0/0XXx/0
TAX PARCEL NO. 00-000-00
containing 555.40 acres, more or less.
wcstrnenx. lse
--------------------------------------------------------------------------------
NEWCREST RESOURCES, INC.
0000 XXXX XXXX., XXXXX 000 PH. 303-239-8796
XXXXXX, XX 00000
CHECK 3453
DATE February 13,1998
PAY TO THE West Coast Mines, Inc. $50,000.00
ORDER OF
Fifty thousand and no/100 ------------------------------ DOLLARS
/S/ X.X. Xxxxxx
--------------------------------------------------------------------------------
DATE DESCRIPTION
2/13/98 Initial Payment
Mineral Exploration Lease with Option to Purchase Dated 1/23/98
0000-000 XXXXXX $50,000.00
--------------------------------------------------------------------------------
RECEIPT
Received this 18th day of February, 1998, Newcrest Resources, Inc.
Check No. 3453 for $50,000.00 as full payment of the Initial Payment for that
certain Mineral Exploration Lease With Option to Purchase dated January 23, 1998
from WEST COAST MINES, INC. to Newcrest Resources, Inc., describing the
following land situated in Humboldt County, Nevada.
Township 36 North, Range 36 East M.D.B.&M.
Section 1: Xxxx 0, 0, 0, 0, X0/0X0/0, X0/0X0/0, X0/0XX0/0
Containing 550.40 acres
Assessor's Parcel No. 00-000-00
WEST COAST MINES, INC., a
California corporation
TIN: 00-0000000 By: /S/ X.X. Xxxxxxxx
---------------------------
X.X. Xxxxxxxx, Chairman/CEO
September 29, 1998
Xx. Xxx Xxxxxxxx
West Coast Mines, Inc.
Towers at Xxxxxxxx Square
0000 X. X'Xxxxxx Xx., Xxxxx 000
Xxxxxx, Xxxxx 00000
Dear Xx. Xxxxxxxx:
Accompanying this letter is a brief summary of our
activities on West Coast's Xxxxx Xxx mine property
near Winnemucca, Nevada. A more comprehensive report
will be forthcoming later in the year.
If you have any questions please call either Xxx
Xxxxxx or me at our office in Golden, Colorado.
Best regards,
/S/ Xxx XxXxxxxx
-----------------
X. X. XxXxxxxx
Principal Geologist
Newcrest Resources, Inc.
0000 Xxxx Xxxx., Xxxxx 000. Xxxxxx, XX 00000 X.X.X.
Phone: (000) 000-0000 Fax: (000) 000-0000
TO: Xx. Xxx Xxxxxxxx/West Coast Mines, Inc.
FROM: Newcrest Resources, Inc.
DATE: September 29, 1998
SUBJECT: Xxxxx Xxx Progress Report, Humboldt County, Nevada
Since finalizing the mining lease with West Coast Mines in January of 1998.
Newcrest has completed detailed geological mapping of Section 1, at a scale of
1:6,000 (1"=500'), conducted a grid soil and rock chip sampling program and
undertaken ground magnetics and time domain IP/resistivity surveys over the
entire project area. Reverse circulation drilling commenced on September 26 and
the first of three to four holes is currently in progress.
Analytical results for 639 soil samples have been received and plotted. Initial
soil sampling was conducted on a 200 ft 200 ft grid. Locally, this grid was
filled in at a 100 ft x 100 ft spacing. All soil samples were sieved to -10+80
mesh and analyzed for Au, Ag, trace and base metals using FA/AA and 32-element
ICP. By far the strongest Au values in soil form a large (1.600 ft x 1,800 ft)
coherent anomaly, as defined by the ~ 30 ppb Au, in an area centered 2,600 ft
northwest of the Xxxxx Xxx mine.
Assay results were also received for 350 rock chip and mine dump samples. In
general, Au values ranged from <5 ppb to over 12 oz Au/t. The higher Au values
are closely associated with narrow zones of highly fractured and brecciated
rock.
Time domain and gradient array IP/resistivity, and ground magnetic surveys were
completed over the project area in late July. Results from the IP survey
indicate the presence of a large, broadly arcuate shaped chargeability anomaly
extending from well north of Gee Hill, southward along the west and southwest
flanks of GEE Hill.
Newcrest expects to drill three to four, 1,500-ft-deep RC holes to test a number
drill targets. These targets include a strong Au and coincident chargeability
anomaly in the NW part of Section 1, the complex structural zone in the vicinity
of the Xxxxx Xxx mine, and an area near the summit of GEE Hill, where broadly
developed hydrothermal alteration occurs. Assay results for the first hole are
pending.
