OPTION AGREEMENT
GOLDEN PATRIOT, CORP.
March 17, 2005
Xxxxxxx Minerals Inc.
000 X. Xxxxx Xxxx
Xxxx, Xxxxxx, 00000
Attention:
Xxxxx Xxxxxxxx, President
Dear Sir:
Re:
Lucky Boy Project (as listed in Schedule “A”)
This will confirm our preliminary discussions in regards to the granting of an option by Xxxxxxx Minerals Inc. (“Xxxxxxx”) to Golden Patriot, Corp. (“Golden Patriot”), to acquire a 100% interest in the above project subject to a 3% Yellow Cake Royalty.
We understand, and if our offer is accepted, Xxxxxxx will represent that:
1.
It is the registered and beneficial owner of a 100% interest, subject to the limitations described herein, in the Lucky Boy Project, consisting of 14 BLM claims, and a State Lease, as the property is described in Schedule “A” which is attached;
2.
There are no liens charges or encumbrances or the third party claims against its interest in the properties except for certain mining claims of the Lucky Boy Project that are subject to a 3% Yellowcake Royalty;
3.
There are no negative environmental issues in regards to the Lucky Boy Project that Xxxxxxx is aware of. If it is found at a later date that there are preexisting environmental issues, then it will be the responsibility of Xxxxxxx to rectify the situation and bring the property into good standing. Xxxxxxx may use the work commitment funds to correct the problem;
4.
Xxxxxxx acknowledges that Golden Patriot has entered into or will enter into a separate agreement with a third party where it is or may grant an option to earn 40% interest on the Lucky Boy Project for consideration of $1.
On preparation and execution of a formal option agreement such further representation and assurance of the parties as are normal for agreements of this nature will be added.
Golden Patriot proposes that it may acquire a 100% interest in the Lucky Boy Project on the following basis:
GOLDEN PATRIOT, CORP.
1.
Golden Patriot will pay Xxxxxxx property costs totalling $75,000, as follows: $25,000 upon execution of this agreement, $25,000 twelve months after execution and a further $25,000 twenty four months after execution of this agreement, (all dollar amounts are in USD);
2.
Golden Patriot will earn a 100% interest in the Lucky Boy Project, free and clear of all lien charges and encumbrances, in consideration of Golden Patriot incurring $925,000 in exploration and development programs on the Lucky Boy Project during a period of three years from the date of exercise of the option:
$200,000 to be incurred within 12 months of date of exercise of the option;
a further $300,000 (for an aggregate of $500,000) to be incurred within 24 months of the date of exercise of the option;
and thereafter, a further $425,000 (for an aggregate $925,000) to be incurred within 36 months of the date of exercise of the option;
3.
Once Golden Patriot spends $500,000 in the cumulative on the Lucky Boy Project, then it has the right but not the obligation to earn up to a 60% interest on the property; for each further $100,000 that Golden Patriot spends on the property it will earn the right but not the obligation to earn a further 8% on the property;
4.
Golden Patriot will make all payments directly to Xxxxxxx or as otherwise directed in writing by Xxxxxxx;
5.
Xxxxxxxx Explorations Ltd. (“Ashex”), which is a related party to Xxxxxxx, will be retained to run the work program for consideration of $1, if at any time it is found that Ashex has not operated within the industry parameters, then Golden Patriot retains the right to terminate on thirty (30) days notice. The services to be provided as listed in Schedule “B” which is attached;
6.
Golden Patriot shall maintain the property in good standing during the currency of the option agreement; and
7.
Provided Golden Patriot makes the payments provided for in Items 1 and 2 above, it may thereafter drop the option with thirty (30) days notice, without penalty, subject only to its obligation to ensure the property is in good standing at the time of termination.
Area of Interest
The parties agree that Xxxxxxx will give Golden Patriot the first right of refusal to acquire an interest in the Sky Deposit, in Gila County, Arizona.
GOLDEN PATRIOT, CORP.
This Option Agreement shall be governed by the laws of the State of Nevada, USA excluding any conflict of law principles that would require the application of the law of any other jurisdiction. The venue for any action brought to enforce or interpret this Option Agreement shall be a court of competent jurisdiction in the State of Nevada.
If the foregoing reflects your understanding of our discussions and you find the terms and conditions generally acceptable I would ask that you acknowledge your acceptance of this offer by dating, executing and returning a copy of this letter to the writer. At which time when either party requests a more formal option agreement, one will be prepared and the legal costs will be incurred equally by both parties.
This agreement may be signed in counterparts.
Yours very truly,
GOLDEN PATRIOT, CORP.
Per:
/s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
President, Director
GOLDEN PATRIOT, CORP.
THE OFFER OF GOLDEN PATRIOT, CORP. CONTAINED HEREIN IS HEREBY ACCEPTED BY XXXXXXX MINERALS INC., AS OF THE ____ DAY OF MARCH, 2005.
XXXXXXX MINERALS INC.
Per:
/s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
President, Director
