EXHIBIT 10.13
AGREEMENT
This Agreement entered into by and between Can-Cal Resources, Ltd.
("Can-Cal"), Xxxxxxx X. Xxxxxx ("Xxxxxx"), and Xxxxx X. Xxxxxx ("Xxxxxx").
WHEREAS Xxxxxx and Xxxxxx have developed a proprietary smelting process
and a proprietary solvent extraction process for extracting precious metals, and
Whereas Xxxxxx and Xxxxxx have located and claimed the Wikieup ore
material from which they have extracted precious metals using their proprietary
process, and
Whereas Can-Cal owns a volcanic cinders deposit which the parties
believe may be amenable to Xxxxxx and Xxxxxx'x process, and
Whereas Can-Cal desires to test and obtain those proprietary processes
and claims covering the Wikieup ore material and obtain claims to the Wikieup
ore materials, and
Whereas the parties desire to enter into a business arrangement with an
option to continue that arrangement.
NOW THEREFORE it is agreed as follows:
1. Proposed Facilities Rated by Capacity to Recover Precious Metals
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a) 10 ounce per day -- Existing facility being used to test
and develop the processes.
b) 100 ounce per day -- Proposed facility that will be built
if Can-Cal exercises its option in this Agreement.
c) 1,000 ounce per day -- Minimum capacity of the next
facility that Can-Cal agrees to build if the 100-ounce per
day facility is successful, in the sole judgment of
Can-Cal.
2. Representations and Warranties of Xxxxxx and Xxxxxx.
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a) That they have developed and own a proprietary process for
smelting materials prospective for precious metals and no
other person has any claim or right to this process.
b) That they have developed and own a proprietary solvent
extraction process, which isolates and precipitates
individual precious metals contained in ore materials and
no other person has any claim or right to this process.
Page 1 of 7 Can-Cal /s/ XX Xxxxxx /s/ JRA Xxxxxx /s/ CM
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c) That initial testing of the ore material taken from the
Wikieup claims utilizing their proprietary process has
resulted in the precipitation of sponge gold and combined
platinum/palladium in a powdered form as well as possible
recoveries of other precious metals.
d) That they have the use of the laboratory facilities in a
building on private property in Pahrump, Nevada which is
rented by Volcana Technology Co. and contains equipment
capable of smelting and processing ore materials and
extracting precious metals contained therein utilizing
their proprietary smelting and solvent extraction
processes. They have available to them and/or employ
personnel, including Xxxxx Xxxxxx and Xxx Xxxxx, capable
of operating these laboratory facilities at Pahrump
utilizing their proprietary processes. The personnel and
equipment have the present capacity to produce up to 10
ounces of precious metals per day.
e) They have the right to enter into this Agreement and
commit the use of the Pahrump facilities and personnel to
this Agreement.
f) Xxxxxx and Xxxxxx Xxxxxxx, an associate of Xxxxxx'x, have
good and sufficient title to five (5) lode claims to the
Wikieup ore material, each claim consisting of 20 acres,
which claims have been designated by Xxxxxx and agreed to
by Can-Cal. Xxxxxx represents and warrants that all
necessary payments have been made and/or all work
obligations have been performed, so that the claims are
currently in good standing with the Bureau of Land
Management ("BLM"). Those claims are attached to Exhibit A
hereto.
g) Xxxxxx has good and sufficient title to one placer claim
covering 160 acres of the Rose ore deposit. Xxxxxx
warrants that the claim is in good standing and is
included on Exhibit A hereto.
h) All proposed operations contemplated by this Agreement
will be in full compliance with all federal, state and
municipal laws, regulations, permits and rules.
3. The Can-Cal Loan. Delivery of Promissory Note and Wikieup Claims
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Based on the representations and warranties as set forth in
paragraph 1. hereof, Can-Cal hereby agrees to loan to Xxxxxxx
Xxxxxx, personally, $48,000 for the sole purposes of conducting
smelting and processing operations on Can-Cal's Wikieup ore
material and Can-Cal's volcanic cinder material. Can-Cal shall
loan Xxxxxx $12,000 each week for four consecutive weeks.
Page 2 of 7 Can-Cal /s/ XX Xxxxxx /s/ JRA Xxxxxx /s/ CM
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Upon the initial loan of $12,000 from Can-Cal to Xxxxxx,
a) Xxxxxx will deliver to Can-Cal as collateral in the form
of a fully executed quitclaim deed to the first Wikieup
claim listed on Exhibit A, which Can-Cal shall have the
right to record and have reissued in Can-Cal's name.
b) Xxxxxx will deliver a Promissory Note(s) for the full
$12,000 to Can-Cal. The promissory note shall not bear
interest but shall be due 120 days after delivery to
Can-Cal; the form of promissory note is Exhibit B hereto.
Xxxxxx shall issue to Can-Cal similar notes for each
$12,000 loan upon receipt of the funds by Xxxxxx.
c) Xxxxxx and Xxxxxx agree that Can-Cal will own the above
Wikieup claim free of any claim by Ardoin, Sadlier, or
Xxxxxx unless Can-Cal fails to exercise their option and
Xxxxxx repays the loan within 60 days of Can-Cal's
decision not to exercise its option to continue this
Agreement. Upon repayment of this loan within the 60-day
period, Can-Cal agrees to return the claim by fully
executing a quitclaim deed to Xxxxxx and Xxxxxx Xxxxxxx.
4. Obligations of Xxxxxx and Xxxxxx During the Initial Four Week Period
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a) During the initial four-week period, Xxxxxx and Xxxxxx
shall continue testing Can-Cal's Wikieup ore material and
shall also test Can-Cal's volcanic cinders material and
use their best efforts to extract any precious metals that
may be contained in those materials. Xxxxxx and Xxxxxx
will use their best efforts to assist in the smelting and
processing of Can-Cal's Wikieup material and the volcanic
cinders at the Pahrump facility or such other facility as
may be agreed upon by Can-Cal, Xxxxxx and Xxxxxx.
b) Can-Cal will deliver such amount of volcanic cinders to
the Pahrump facility as may be required for smelting
and/or processing. Can-Cal shall also deliver to the
Pahrump facility such amount of its Wikieup material as
may be required for smelting and processing or, at its
option, may choose to utilize any Wikieup material at
Pahrump, which shall be deemed to belong to Can-Cal.
c) Xxxxxx and Xxxxxx agree to pay all the expenses of
operating the Pahrump facility, Including the salary of
Xxxxx Xxxxxx and Xxx Xxxxx, as well as all out-of-pocket
expenses required for the operation of the Pahrump
facility from the Can-Cal loans. Xxxxxx and Xxxxxx
represent that the $10,000 a week during the first four
weeks will be sufficient to pay all out-of-pocket expenses
required for the operation of the Pahrump facility to
determine whether or not precious metals are able to be
extracted from the Wikieup material and the volcanic
cinders material.
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d) Xxxxxx and Xxxxxx will direct any revenue from the first
processing circuit that is completed during the first four
weeks to whoever it sees fit. Can- Cal will not receive
any of this revenue.
e) The proposed "100 ounce per day" processing circuit will
be funded by Can-Cal and this operation will be subject to
the profit-sharing conditions of this Agreement.
f) The four-week period will begin on the day after this
document is signed and the first portion of the loan is
delivered to Xxxxxx.
5. Can-Cal's Option
a) At the end of the initial four-week period, in the event
that Can-Cal is, in its sole discretion, satisfied with
the extraction results, Can-Cal shall have the option to
elect to continue this Agreement.
b) Can-Cal shall have a period of 60 days, beginning on the
last day of the initial four week period, in which to
exercise its option. If Can-Cal exercises its option, it
shall issue to Xxxxxx and Xxxxxx 400,000 shares of its
common stock, par value of $.001 as further consideration
for the acquisition of their proprietary smelting process
and solvent extraction process. Those shares, if and when
issued, will be restricted securities and subject to
federal and state securities laws. Xxxxxx and Xxxxxx will
be required, as a condition of issuance of those shares,
to execute appropriate documentation acknowledging and
agreeing to the limitations imposed on the resale of those
shares by all applicable laws.
c) In the event that Can-Cal exercises its option, Xxxxxx and
Xxxxxx will deliver to Can-Cal a full and complete
detailed description and explanation of their proprietary
smelting process and their proprietary solvent extraction
process (subject to adjustments arising from the
continuing development). Xxxxxx and Xxxxxx represent that
upon delivery of the processes to Can-Cal, Can-Cal will
own rights to those processes and have the full and
complete legal ability to utilize those processes in any
manner they deem fit without claims made by other persons.
Xxxxxx and Xxxxxx hereby agree to indemnify Can-Cal
against any and all claims from other persons claiming an
interest in the ownership of those processes or in any way
attempting to interfere with Can-Cal's complete use and
enjoyment of those processes. Can-Cal's rights to those
processes are subject only to the conditions of this
Agreement.
d) As further consideration for the issuance of those shares,
Xxxxxx and Xxxxxx Xxxxxxx will deliver to Can-Cal fully
executed quitclaim deeds for the four Wikieup claims
listed on Exhibit A which were not delivered as collateral
for the Can-Cal loan. Can-Cal shall retain ownership of
the one claim initially transferred to it.
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e) As further consideration for the issuance of those shares,
Xxxxxx will deliver to Can-Cal a fully executed quitclaim
deed for one placer claim for the Rose ore deposit as
listed on Exhibit A.
f) If Can-Cal exercises its option it shall have the right,
in its sole discretion, to build a facility capable of
producing 100 ounces of precious metals per day at Pahrump
or such location as it deems suitable.
g) It is anticipated that Xxxxxx and Xxxxxx will operate
Can-Cal's facility. That smelting and processing operation
shall have a proposed capacity of 100 ounces of precious
metals per day. In the event Can-Cal exercises this
option, Xxxxxx and Xxxxxx will attempt to make available
to Can-Cal a portion of the Building No. 2 in the Pahrump
facility and will use their best efforts to obtain the
necessary permits and bonding to enable Can-Cal to utilize
that facility for the purpose of smelting and processing
materials for the production of precious metals.
h) As further consideration for the exercise of the option,
Can-Cal will issue to Volcana Technology (owned by Xxxxx
Xxxxxx and Xxxxxx Xxxxx), and X.X. Xxxxxxx, a one percent
net processing profits royalty, each, to be paid from net
processing profits (as that term is defined by generally
accepted accounting principles) whenever the smelting and
solvent extraction process is utilized with any and all
ores by Can-Cal.
i) In the event that Can-Cal exercises the option, and
determines that the 100-ounce per day facility is able to
produce precious metals on an economic basis, it will
continue such production on terms and conditions that is,
in its sole judgement, deems appropriate. However, Can-Cal
has the right to build a facility that has a capacity of
1,000 ounces of precious metals per day and if built, that
the 100-ounce per day operation will be moved into this
facility.
j) That all net processing profits from its Wikieup material
will be divided 70 percent to Can-Cal and 30% for Xxxxxx
and Xxxxxx.
k) That all net processing profits from its volcanic cinders
material, and any other material using the said processes
will be divided 92 percent to Can-Cal and 8% for Xxxxxx
and Xxxxxx.
l) Can-Cal will notify Xxxxxx and Xxxxxx in writing, during
the 60-day period, that they intend to exercise their
option or that they do not intend to exercise their
option.
m) The 60-day period will begin the day after the first
four-week period (28 days) ends.
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7. Termination
In the event that Can-Cal does not exercise its option, this
Agreement will be terminated and Xxxxxx'x promissory notes will
be due and payable according to their terms and the one claim
assigned to Can-Cal as collateral will have a value of $100 for
purposes of determining the amount owed by Xxxxxx to Can-Cal. In
any event, upon Xxxxxx repaying in full the loan from Can-Cal,
Can-Cal agrees to quitclaim the first Wikieup claim back to
Xxxxxx and Xxxxxx Xxxxxxx.
8. Arbitration
In the event any dispute arises between the parties, arising out
of this Agreement, the dispute shall be submitted to the American
Arbitration Association and shall be heard and resolved in
accordance with their arbitration rules for commercial disputes.
/s/ Xxxxxx X. Xxxxx Dec. 6, 1999
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Can-Cal Resources, Ltd. Date
/s/ Xxxxxxx X. Xxxxxx Dec. 6, 1999
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Xxxxxxx X. Xxxxxx Date
/s/ Xxxxx X. Xxxxxx Dec. 6, 1999
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Xxxxx X. Xxxxxx Date
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EXHIBIT A
THIS IS A LISTING OF CLAIMS OWNED BY XXXXXX AND XXXXXX XXXXXXX OR ONLY XXXXXX
THAT ARE AVAILABLE FOR QUITCLAIM AND TRANSFER TO CAN-CAL ACCORDING TO THE TERMS
AND CONDITIONS OF THE ATTACHED AGREEMENT BETWEEN CAN-CAL, XXXXXX AND XXXXXX
DATED DECEMBER 6,1999.
1 CLAIM AS COLLATERAL FOR $48,000 LOAN PARAGEAPH - 3. a)
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20 ACRE WIKIEUP CLAIM "XXXXX DERBY 25" - LODE - AMC#335708
5 CLAIMS IN EXCHANGE FOR SHARES PARAGRAPH - 5. d) & e)
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20 ACRE WIKIEUP CLAIM "XXXXX DERBY 24" - LODE-- AMC#335707 20 ACRE
WIKIEUP CLAIM "J.S. 1" LODE - AMC#340648 20 ACRE WIKIEUP CLAIM "OLD
TIMER 3" - LODE - AMC#331609 20 ACRE WIKIEUP CLAIM "OLD TIMER 13" - LODE
-- AMC#331619 000 XXXX XXXX XXXXX "XXX" - XXXXXX - - XXX#000000
* * * * * * * * * * * * * * * *
Can-Xxx Xxxxxx Xxxxxx /s/ CM
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