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MINERAL PROPERTY OPTION AGREEMENT
THIS AGREEMENT dated for reference July 31, 2004.
BETWEEN:
RICH RIVER EXPLORATION LTD., a company incorporated pursuant
to the laws of British Columbia with an address at XX Xxx 000,
Xxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0;
XXXXX X. XXXXX, of XX Xxx 000, Xxxxxxxx, Xxxxxxx Xxxxxxxx,
X0X 0X0;
(the "Optionors")
OF THE FIRST PART
AND:
BOSS MINERALS, INC., a company incorporated pursuant to the
laws of the State of Nevada and having its head office at
000 - 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0;
("Boss")
OF THE SECOND PART
W H E R E A S :
A. Xxxxx X. Xxxxx is the registered and Rich River Exploration Ltd. is the
beneficial owner of a mineral property claim group comprising approximately 500
hectares located in the Kamloops Mining Division, British Columbia, known as the
Mosquito King property, which claims are more particularly described in Schedule
"A" attached hereto which forms a material part hereof (collectively, the
"Claims");
B. The Optionors have agreed to grant to Boss the sole and exclusive right,
privilege and option to explore the Claims together with the sole and exclusive
right, privilege and option to purchase the Claims upon the terms and conditions
hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration
of the mutual covenants and provisos herein contained, THE PARTIES HERETO AGREE
AS FOLLOWS:
1. OPTIONORS' REPRESENTATIONS
1.1 The Optionors represent and warrant to Boss that:
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(a) Collectively, the Optionors are the registered and beneficial
owners of the Claims and hold the right to explore and develop
the Claims;
(b) The Optionors hold the Claims free and clear of all liens,
charges and claims of others, and the Optionors have a free
and unimpeded right of access to the Claims and have use of
the Claims surface for the herein purposes;
(c) The Claims have been duly and validly located and recorded in
a good and miner-like manner pursuant to the laws of British
Columbia and are in good standing in British Columbia as of
the date of this Agreement;
(d) There are no adverse claims or challenges against or to the
Optionors' ownership of or title to any of the Claims nor to
the knowledge of the Optionors is there any basis therefor,
and there are no outstanding agreements or options to acquire
or purchase the Claims or any portion thereof;
(e) The Optionors have 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 indenture,
agreement or other instrument whatsoever to which either
Optionor is a party or by which they are bound or to which
they are subject; and
(f) No proceedings are pending for, and each of the Optionors is
unaware of any basis for, the institution of any proceedings
which could lead to the placing of either Optionor in
bankruptcy, or in any position similar to bankruptcy.
1.2 The representations and warranties of the Optionors set out in paragraph 1.1
above form a part of this Agreement and are conditions upon which Boss has
relied in entering into this Agreement and shall survive the acquisition of any
interest in the Claims by Boss.
2. BOSS'S REPRESENTATIONS
Boss warrants and represents to the Optionors that it is a
body corporate, duly incorporated under the laws of the State of Nevada with
full power and absolute capacity to enter into this Agreement and that the terms
of this Agreement have been authorized by all necessary corporate acts and deeds
in order to give effect to the terms hereof.
3. GRANT OF OPTION
The Optionors hereby give and grant to Boss the sole and
exclusive right and option to acquire a l00% undivided right, title and interest
in and to the Claims (the "Option"), subject to a 2% net smelter returns royalty
reserved in favour of the Optionors, by performing the acts and deeds and paying
the sums provided for in paragraph 4.
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4. CONSIDERATION FOR THE GRANT OF OPTION
4.1 In order to keep the Option granted to Boss in respect of the Claims in good
standing and in force and effect, Boss shall be obligated to:
Cash Payments
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(a) Pay to the Optionors a total of $33,000 in the following
manner:
(i) $3,000 by August 25, 2004;
(ii) an additional $5,000 by August 15, 2005; and
(iii) an additional $25,000 by August 15, 2006;
Property Payments and Assessment Work
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(b) Pay, or cause to be paid, to the Optionors, or on the
Optionors' behalf as Boss may determine, all Claims payments
and assessment work required to keep the Claims and this
Option in good standing during the term of this Agreement.
4.2 Area of Influence. For the purpose of this Agreement, the area covered by
the Claims shall include an area of influence surrounding the outer perimeter of
the Claims to a maximum of three kilometres (the "Area of Influence") and all
mineral concessions, interests or rights acquired, directly or indirectly,
within the Area of Influence before or after the date of signing of this
Agreement by the Optionors or Boss during the currency of this Agreement shall
become part of this Agreement.
5. COVENANTS OF BOSS
5.1 Boss shall perform all work on the Claims in a miner-like manner and shall
comply with all laws, regulations and permitting requirements of Canada and the
Province of British Columbia including compliance with all:
(a) environmental statutes, guidelines and regulations;
(b) work permit conditions for lakes and streams; and
(c) work restrictions relating to forest fire hazards.
6. RIGHT TO ABANDON PROPERTY INTERESTS
Should Boss, in its sole discretion, determine that any part
of the Claims no longer warrants further exploration and development, then Boss
may abandon such interest or interests without affecting its rights or
obligations under this Agreement, so long as Boss provides the Optionors with 30
days notice of its intention to do so. Upon receipt of such notice, the
Optionors may request Boss to retransfer the title to such interest or interests
to them, and Boss hereby agrees to do so, and upon expiry of the 30 days, or
upon the earlier transfer thereof, such interests shall cease to be part of the
Claims for the purposes of this Agreement.
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7. TERMINATION OF OPTION
7.1 Subject to paragraph 7.2, the Option shall terminate if Boss fails to make
the required cash payments or to complete required assessment work in accordance
with paragraph 4.1 herein within the time periods specified therein.
7.2 If Boss shall be in default of any requirement set forth in paragraph 4.1
herein, the Optionors shall give written notice to Boss specifying the default
and Boss shall not lose any rights granted under this Agreement, unless within
30 days after the giving of notice of default by the Optionors, Boss has failed
to take reasonable steps to cure the default by the appropriate performance.
7.3 If the Option is terminated in accordance with paragraphs 7.1 and 7.2
herein, Boss shall have no interest in or to the Claims, and all expenditures
and payments made by Boss to or on behalf of the Optionors under this Agreement
shall be non-refundable by the Optionors for which Boss shall have no recourse.
8. ACQUISITION OF INTERESTS IN THE PROPERTY
At such time as Boss has made all of the required cash
payments in accordance with paragraph 4.1 herein, within the time periods
specified therein, then the Option shall be deemed to have been exercised by
Boss, and Boss shall have thereby, without any further act, acquired an
undivided 100% interest in and to the Claims, subject to a 2% net smelter
returns royalty in favour of the Optionors.
9. RIGHT OF ENTRY
For so long as the Option continues in full force and effect,
Boss, its employees, agents, permitted assigns and independent contractors shall
have the right to:
(a) enter upon the Claims;
(b) incur expenditures;
(c) bring upon and erect upon the Claims such mining facilities
as Boss may consider advisable; and
(d) remove from the Claims and sell or otherwise dispose of
mineral products.
10. NET SMELTER RETURNS ROYALTY
10.1 For the purposes of this Agreement, "net smelter returns" shall mean the
net amount shown due by the smelter or other place of sale from the sale of
mineral products, as indicated by its returns or settlement sheets, after
payment of:
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(a) all freight charges from the shipping point to the
smelter or other place of sale;
(b) all other proper treatment or other charges at such
smelter or other place of sale; and
(c) provincial or federal royalties due and payable on
production, if any.
10.2 For the purposes of paragraph 10, "commercial production" 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.
10.3 On the date Boss commences commercial production on the Claims, the
Optionors shall be entitled to receive and Boss shall pay to the Optionors 2% of
net smelter returns, to a maximum of $500,000.
10.4 Boss shall be under no obligation whatsoever to place the Claims into
commercial production and in the event they are placed into commercial
production, Boss shall have the right, at any time, to curtail or suspend such
production as it, in its absolute discretion, may determine.
10.5 Net smelter returns and the payments payable to the Optionors hereunder
shall be adjusted and paid quarterly, and within 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 Optionors who shall have 60 days after
receipt of such statements to question in writing their accuracy and failing
such question, the statements shall be deemed correct.
10.6 The Optionors or their representatives duly appointed in writing shall have
the right at all reasonable times, upon written request, to inspect those books
and financial records of Boss which are relevant to the determination of net
smelter returns, and, at the expense of the Optionors, to make copies thereof.
11. OPERATOR
After the execution of this Agreement, Boss, or at Boss's
option, its respective associate or nominee or such other unrelated entity as it
may determine, will act as the operator of the Claims under this Agreement.
Boss, if operator, may resign as the operator at any time by giving 30 calendar
days prior written notice to the Optionors, and within such 30 day period, Boss
may appoint another party who covenants to act as the operator of the Claims
upon such terms as Boss sees fit.
12. POWER AND AUTHORITY OF THE OPERATOR
After the execution of this Agreement, the Operator shall have
full right, power and authority to do everything necessary or desirable in
connection with the exploration and development of the Claims and to determine
the manner of operation of the Claims as a mine.
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13. REGISTRATION OF PROPERTY INTERESTS
Upon the request of Boss, the Optionors shall assist Boss to
record this Agreement with the appropriate mining recorder and, when required,
the Optionors shall further provide Boss with such recordable documents as Boss
and its counsel shall require to record its due interest in respect of the
Claims.
14. FURTHER ASSURANCES
The parties hereto agree to do or cause to be done all acts or
things necessary to implement and carry into effect the provisions and intent of
this Agreement.
15. FORCE MAJEURE
If Boss 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 Boss, 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, and Boss,
insofar as is possible, shall promptly give written notice to the Optionors of
the particulars of the reasons for any prevention or delay under this section,
and shall take all reasonable steps to remove the cause of such prevention or
delay and shall give written notice to the Optionors as soon as such cause
ceases to exist.
16. CONFIDENTIAL INFORMATION
No information furnished by Boss to the Optionors hereunder in
respect of the activities carried out on the Claims by Boss, or related to the
sale of mineral products derived from the Claims, shall be published by the
Optionors without the prior written consent of Boss, but such consent in respect
of the reporting of factual data shall not be unreasonably withheld.
17. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement to date
between the parties hereto and supersedes every previous agreement,
communication, expectation, negotiation, representation or understanding,
whether oral or written, express or implied, statutory or otherwise, between the
parties hereto with respect to the subject matter of this Agreement.
18. NOTICE
18.1 Any notice required to be given under this Agreement shall be deemed to be
well and sufficiently given if delivered, or if mailed by registered mail in
Canada, in the case of the Optionors addressed to them as follows:
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Rich River Exploration Ltd.
Xxxxx X. Xxxxx
Box 131
Xxxxxxxx, British Columbia
V0E 1Y0
and in the case of Boss addressed as follows:
Boss Minerals, Inc..
Suite 400 - 000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
and any notice given as aforesaid shall be deemed to have been given, if
delivered, when delivered, or if mailed, on the third business day after the
date of mailing thereof.
18.2 Either party hereto may from time to time by notice in writing change its
address for the purpose of this section.
19. OPTION ONLY
Until the Option is exercised, this is an option only and
except as specifically provided otherwise, nothing herein contained shall be
construed as obligating Boss to do any acts or make any payments hereunder and
any acts or payments made hereunder shall not be construed as obligating Boss to
do any further acts or make any further payments.
20. RELATIONSHIP OF PARTIES
Nothing contained in this Agreement shall, except to the
extent specifically authorized hereunder, be deemed to constitute either party
hereto a partner, agent or legal representative of the other party.
21. TIME OF ESSENCE
Time shall be of the essence of this Agreement.
22. TITLES
The titles to the respective sections hereof shall not be
deemed a part of this Agreement but shall be regarded as having been used for
convenience only.
23. CURRENCY
All funds referred to under the terms of this Agreement shall
be funds designated in the lawful currency of the United States of America.
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24. SEVERABILITY
In the event that any of the paragraphs contained in this
Agreement, or any portion of thereof, is unenforceable or is declared invalid
for any reason whatsoever, such unenforceability or invalidity shall not affect
the enforceability or validity of the remaining terms or portions thereof
contained in this Agreement and such unenforceable or invalid paragraph, or
portion thereof, shall be severable from the remainder of the Agreement.
25. APPLICABLE LAW
The situs of the Agreement is Vancouver, British Columbia, and
for all purposes this Agreement will be governed exclusively by and construed
and enforced in accordance with the laws prevailing in the Province of British
Columbia.
26. ENUREMENT
This Agreement shall enure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF this Agreement has been executed as
of the day and year first above
written.
RICH RIVER EXPLORATION LTD. BOSS MINERALS, INC.
per: By:/s/ Xxxxxx Xxxxxxxx
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Authorized Signatory Xxxxxx Xxxxxxxx
Authorized Signatory
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
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SCHEDULE "A"
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TO THAT CERTAIN AGREEMENT MADE AS OF JULY 31, 2004
BETWEEN RICH RIVER EXPLORATION LTD.,
XXXXX X. XXXXX AND BOSS MINERALS, INC.
The o mineral claims that constitute the Mosquito King claims are located in the
Kamloops Mining Division, Province on British Columbia on Map Sheet 082M003.
Specifics of the claims are as follows:
Claim Tag Numbers No. of Claims Units Date of Staking Tenure Number
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208529 20 2002 / 11 / 17 398162
