OPTION AGREEMENT
THIS AGREEMENT made as of the 28th day of September, 2001
BETWEEN:
Whitegold Natural Resource Corp.,
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of Xxxxx 000, 000 Xxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Optionor")
OF THE FIRST PART
AND:
Big Cat Mining Corporation,
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of 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxx, X0X 0X0
(the "Optionee")
OF THE SECOND PART
WHEREAS:
A. The Optionor is the owner of certain mineral claims located in the Liard
Mining Division of British Columbia (the "Property").
B. The Optionor has agreed to grant an exclusive option to the Optionee to
acquire an interest in and to the Property, subject to the Royalty, on the terms
and conditions hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the sum of
$20.00 now paid by the Optionee to the Optionor (the receipt of which is hereby
acknowledged), the parties agree as follows:
DEFINITIONS
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1. For the purposes of this Agreement, the following words and phrases shall
have the following meanings, namely:
(a) Commencement of Commercial Production" means:
(i) if a Mill is located on the Property, the last day of a period of
40 consecutive days in which, for not less than 30 days, the Mill
processed ore from the Property at 60 percent of its rated
concentrating capacity; or
(ii) if no Mill is located on the Property, the last day of a period
of 30 consecutive days during which ore has been shipped from the
Property on a reasonably regular basis for the purpose of earning
revenues,
but no period of time during which ore or concentrate is shipped from
the Property for testing purposes, and no period of time during which
milling operations are undertaken as initial tune-up, shall be taken
into account in determining the date of Commencement of Commercial
Production;
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(b) "Exploration Expenditures" means the sum of:
(i) all costs of acquisition and maintenance of the Property, all
exploration and development expenditures and all other costs and
expenses of whatsoever kind or nature including those of a
capital nature, incurred or chargeable by the Optionee with
respect to the exploration and development of the Property and
the placing of the Property into commercial production, and
(ii) as compensation for general overhead expenses which the Optionee
will incur, an amount equal to 10% of all amounts included in
subparagraph (i) in each year except costs of fixed assets and
costs and expenditures paid by the Optionee under any contract
involving payments by it in excess of $100,000 in the year, and
5% of all other amounts included in subparagraph (i) in each
year;
(c) "Option" means the option to acquire a 50% undivided interest in and
to the Property as provided in this Agreement;
(d) "Option Period" means the period during the term of this Agreement
from the date hereof to and including the date of exercise or
termination of the Option;
(e) "Property" means the mineral claims described in Schedule "A" and all
mining leases and other mining interests derived from any such claims.
Any reference to any mineral claim comprised in the Property includes
any mineral leases or other interests into which such mineral claim
may have been converted;
(f) "Property Rights" means all licenses, permits, easements,
rights-of-way, certificates and other approvals obtained by either of
the parties either before or after the date of this Agreement and
necessary for the exploration and development of the Property, or for
the purpose of placing the Property into production or continuing
production;
(g) "Royalty" means the amount of royalty from time to time payable to the
Optionor hereunder and as defined in Schedule "B" attached hereto.
REPRESENTATIONS AND WARRANTIES OF THE OPTIONOR
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2. (a) The Optionor represents and warrants to the Optionee that:
(i) it is legally entitled to hold the Property and the Property
Rights and will remain so entitled until all interest of the
Optionor in the Property (other than the Royalty, if any) has
been duly transferred to the Optionee as contemplated hereby;
(ii) it is and at the time of each transfer to the Optionee of mineral
claims comprised in the Property he will be, the recorded holder
and beneficial owner of all of the mineral claims comprising the
Property free and clear of all liens, charges and claims of
others, except as noted on Schedule "A", and no taxes or rentals
are due;
(iii)the mineral claims comprised in the Property have been duly and
validly located and recorded pursuant to the laws of the
jurisdiction in which the Property is situate and, except as
specified in Schedule "A" and accepted by the Optionee, are in
good standing with respect to all filings, fees, taxes,
assessments, work commitments or other conditions on the date
hereof and until the dates set opposite the respective names in
Schedule "A";
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(iv) there is no adverse claim or challenge against or to the
ownership of or title to any of the mineral claims comprising the
Property, nor to the knowledge of the Optionor is there any basis
therefore, and there are no outstanding agreements or options to
acquire or purchase the Property or any portion thereof, and no
person other than the Optionor, pursuant to the provisions
hereof, has any royalty or other interest whatsoever in
production from any of the mineral claims comprising the Property
other than as set out in Schedule "A";
(v) no proceedings are pending for, and the Optionor is unaware of
any basis for the institution of any proceedings leading to the
placing of the Optionor in bankruptcy or subject to any other
laws governing the affairs of insolvent persons.
(b) The representations and warranties contained in this section are
provided for the exclusive benefit of the Optionee and a breach of any
one or more thereof may be waived by the Optionee in whole or in part
at any time without prejudice to its rights in respect of any other
breach of the same or any other representation or warranty, and the
representations and warranties contained in this section shall survive
the execution hereof.
REPRESENTATIONS AND WARRANTIES OF THE OPTIONEE
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3. (a) The Optionee represents and warrants to the Optionor that:
(i) it has been duly incorporated and validly exists as a corporation
in good standing under the laws of its jurisdiction of
incorporation;
(ii) it is lawfully authorized to hold mineral claims and real
property under the laws of the jurisdiction in which the Property
is situate;
(iii)it has duly obtained all corporate authorizations for the
execution of this Agreement and for the performance of this
Agreement by it 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 the Articles or the constating documents of the
Optionee or any shareholders' or directors' resolution,
indenture, agreement or other instrument whatsoever to which the
Optionee is a party or by which it is bound or to which it or the
Property may be subject; and
(iv) no proceedings are pending for and the Optionee is unaware of any
basis for the institution of any proceedings leading to, the
dissolution or winding up of the Optionee or the placing of the
Optionee in bankruptcy or subject to any other laws governing the
affairs of insolvent corporations.
(b) The representations and warranties contained in this section are
provided for the exclusive benefit of the Optionor and a breach of any
one or more thereof may be waived by the Optionor in whole or in part
at any time without prejudice to its rights in respect of any other
breach of the same or any other representation or warranty and the
representations and warranties contained in this section shall survive
the execution hereof.
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GRANT AND EXERCISE OF OPTION
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4. (a) The Optionor hereby grants to the Optionee the sole and exclusive right
and option to acquire a 50% undivided interest in and to the Property free
and clear of all charges, encumbrances and claims, except for those set out
in Schedule "A".
(b) The Option shall be fully exercised by the Optionee incurring
Exploration Expenditures of $3,500,000 on the Property as follows:
(A) $50,000 on or before March 1, 2003;
(B) a further $100,000 on or before December 31, 2003;
(C) a further $350,000 on or before December 31, 2004.
(D) a further $1,000,000 on or before December 31, 2005; and
(E) a further $2,000,000 on or before December 31, 2006.
In the event that the Optionee spends, in any of the above periods, less
than the specified sum, it may pay the Optionor the difference between the
amount it actually spent and the specified sum before the expiry of that
period in full satisfaction of the expenditures specified. In the event
that the Optionee spends, in any period, more than the specified sum, the
excess shall be carried forward and applied to the expenditures to be made
in succeeding periods.
(c) If and when the Option has been exercised, a 50% undivided right,
title and interest in and to the Property shall vest in the Optionee
free and clear of all charges, encumbrances and claims, except for the
obligations of the Optionee to pay the Optionor the Royalty, if any,
and to give the Optionor a right of first refusal on any mineral claim
comprising a part of the Property which the Optionee wishes to
abandon.
(d) In the event that the Optionee does not fully exercise the Option by
fulfilling the terms set out in subparagraph (b) by the 10th
anniversary of this Agreement the Option and this Agreement shall
terminate.
RIGHT OF ENTRY
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5. Throughout the Option Period, the directors and officers of the Optionee
and its servants, agents and independent contractors, shall have the sole
and exclusive right in respect of the Property to:
(a) enter thereon;
(b) have exclusive and quiet possession thereof;
(c) do such prospecting, exploration, development and other mining work as
the Optionee in its sole discretion may determine advisable;
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(d) bring upon and erect upon the Property such buildings, plant,
machinery and equipment as the Optionee may deem advisable; and
(e) remove and dispose of reasonable quantities of ores, minerals and
metals for the purposes of obtaining assays or making other tests.
TRANSFER OF PROPERTY
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6. (a) Concurrently with the execution of this Agreement, the Optionor shall
deliver to the Optionee duly executed transfers of the appropriate interest
in the Property which shall be acquired by the Optionee upon exercise of
the Option.
(b) The Optionee shall be entitled to record all transfers contemplated at
its own cost with the appropriate government office to effect legal
transfer of such interest in the Property into the name of the
Optionee, provided that the Optionee shall hold such interest in the
Property subject to the terms of this Agreement, it being understood
that the transfer of such legal title to the Optionee prior to the
exercise of the Option is for administrative convenience only.
OBLIGATIONS OF THE OPTIONEE DURING OPTION PERIOD
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7. During the Option Period, the Optionee shall:
(a) maintain in good standing those mineral claims comprised in the
Property by the doing and filing of assessment work or the making of
payments in lieu thereof, by the payment of taxes and rentals, and the
performance of all other actions which may be necessary in that regard
and in order to keep such mineral claims free and clear of all liens
and other charges arising from the Optionee's activities thereon
except those at the time contested in good faith by the Optionee;
(b) permit the directors, officers, employees and designated consultants
of the Optionor, at their own risk and expense, access to the Property
at all reasonable times, and the Optionor agrees to indemnify the
Optionee against and to save it harmless from all costs, claims,
liabilities and expenses that the Optionee may incur or suffer as a
result of any injury (including injury causing death) to any director,
officer, employee or designated consultant of the Optionor while on
the Property;
(c) permit the Optionor, at its own expense, reasonable access to the
results of the work done on the Property during the last completed
calendar year;
(d) do all work on the Property in a good and workmanlike fashion and in
accordance with all applicable laws, regulations, orders and
ordinances of any governmental authority;
(e) indemnify and save the Optionor harmless in respect of any and all
costs, claims, liabilities and expenses arising out of the Optionee's
activities on the Property, but the Optionee shall incur no obligation
hereunder in respect of claims arising or damages suffered after
termination of the Option if upon termination of the Option any
workings on or improvements to the Property made by the Optionee are
left in a safe condition.
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TERMINATION OF OPTION
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8. (a) The Optionee may terminate the Option by notice to the Optionor.
(b) If the Option is terminated by the Optionee or the Optionor, the
Optionee shall:
(i) leave in good standing for a period of at least 24 months from
the termination of the Option Period those mineral claims
comprised in the Property;
(ii) deliver to the Optionor a Xxxx of Sale or other proper form of
transfer documents, in recordable form whereby the right, title
and interest in and to the Property has been transferred to the
Optionor or its nominee or nominees, free and clear of all liens
or charges arising from the Optionee's activities on the
Property; and
(iii)deliver at no cost to the Optionor within 90 days of such
termination, copies of all reports, maps, assay results and other
relevant technical data compiled by, prepared at the direction
of, or in the possession of the Optionee with respect to the
Property and not theretofore furnished to the Optionor.
(c) Notwithstanding the termination of the Option, the Optionee shall have
the right, within a period of 180 days following the end of the Option
Period, to remove from the Property all buildings, plant, equipment,
machinery, tools, appliances and supplies which have been brought upon
the Property by or on behalf of the Optionee, and any such property
not removed within such 180 day period shall thereafter become the
property of the Optionor.
ROYALTY
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9. (a) Upon the Commencement of Commercial Production, the Optionee shall pay
to the Optionor the Royalty, being equal to 3% of net Smelter Returns on
the terms and conditions as set out in this section and in Schedule "B".
(b) Instalments of the Royalty payable under paragraph (a) shall be paid
by the Optionee as follows:
(i) within 45 days after the end of each of the Optionee's first
three fiscal quarters in each fiscal year and within 60 days of
the end of the Optionee's last fiscal quarter in each fiscal
year, the Optionee shall pay to the Optionor an amount equal to
25% of the estimated Royalty, if any, for the fiscal year,
adjusted if necessary after the first quarter of any fiscal year
to reflect any change during the fiscal year in estimated
Royalty; and
(ii) within 120 days after the end of the Optionee's fiscal year, the
balance, if any, of Royalty payable in respect of the fiscal year
last completed.
(c) After Commencement of Commercial Production, the Optionee shall,
within 45 days after the end of each fiscal quarter, furnish to the
Optionor quarterly unaudited statements respecting operations on the
Property, together with a statement showing the calculation of Royalty
for the fiscal quarter last completed.
(d) Forthwith after the end of each fiscal year, commencing with the year
in which Commencement of Commercial Production occurs, the accounts of
the Optionee relating to operations on the Property shall be audited
by the auditors of the Optionee, at its expense, and the statement of
operations, which shall include the statement of calculation of
Royalty for the year last completed. The Optionor shall have 45 days
after receipt of such statements to question the accuracy thereof in
writing and, failing such objection, the statements shall be deemed to
be correct and unimpeachable thereafter.
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(e) If the audited financial statements furnished pursuant to paragraph
(d) disclose any overpayment of Royalty by the Optionee during the
fiscal year, the amount of the overpayment shall be debited against
future instalments of Royalty payable hereunder.
(f) If the audited financial statements furnished pursuant to paragraph
(d) disclose any underpayment of Royalty by the Optionee during the
year, the amount thereof shall be paid to the Optionor forthwith after
determination thereof.
(g) The Optionor agrees to maintain for each mining operation on the
Property, up-to-date and complete records relating to the production
and sale of minerals, ore, bullion and other product from the
Property, including accounts, records, statements and returns relating
to treatment and smelting arrangements of such product, and the
Optionor or its agents shall have the right at all reasonable times,
including for a period of 12 months following the expiration or
termination of this Agreement, to inspect such records, statements and
returns and make copies at its own expense for the purpose of
verifying the amount of Royalty payments to be made by the Optionee to
the Optionor pursuant hereto. The Optionor shall have the right at its
own expense to have such accounts audited by independent auditors once
each fiscal year.
(h) Upon the Optionor receiving a total of $1,000,000 from payments of
Royalty, the Royalty shall terminate. The Optionee shall always have
the right to prepay such amount before it is actually due.
POWER TO CHARGE PROPERTY
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10. At any time after the Optionee has exercised the Option, the Optionee may
grant mortgages, charges or liens (each of which is herein called a "mortgage")
of and upon the Property or any portion thereof, any mill or other fixed assets
located thereon and any or all of the tangible personal property located on or
used in connection with the Property to secure financing of development of the
Property, provided that, unless otherwise agreed to by the Optionor, it shall be
a term of each mortgage that the mortgagee or any person acquiring title to the
Property upon enforcement of the mortgage shall hold the same subject to the
rights of the Optionor hereunder as if the mortgagee or any such person had
executed this Agreement.
TRANSFERS
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11. (a) The Optionee may at any time either during the Option Period or
thereafter, sell, transfer or otherwise dispose of all or any portion of
its interest in and to the Property and this Agreement provided that any
purchaser, grantee or transferee of any such interest shall have first
delivered to the Optionor its agreement related to this Agreement and to
the Property, containing:
(i) a covenant by such transferee to perform all the obligations of
the Optionee to be performed under this Agreement in respect of
the interest to be acquired by it from the Optionee to the same
extent as if this Agreement had been originally executed by such
transferee; and
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(ii) a provision subjecting any further sale, transfer or other
disposition of such interest in the Property and this Agreement
or any portion thereof to the restrictions contained in this
paragraph (a).
(b) No assignment by the Optionee of any interest less than its entire
interest in this Agreement and in the Property shall, as between the
Optionee and the Optionor, discharge it from any of its obligations
hereunder, but upon the transfer by the Optionee of the entire
interest at the time held by it in this Agreement, whether to one or
more transferees and whether in one or in a number of successive
transfers, the Optionee shall be deemed to be discharged from all
obligations hereunder save and except for the payment of the Royalty
or other fulfillment of contractual commitments accrued due prior to
the date on which the Optionee shall have no further interest in this
Agreement.
(c) If the Optionor should receive a bona fide offer from an independent
third party (the "Proposed Purchaser") dealing at arm's length with
the Optionor to purchase all or a part of its interest in the
Property, which offer the Optionor desires to accept, or if the
Optionor intends to sell all or a part of its interest in the
Property:
(i) The Optionor shall first offer (the "Offer") such interest in
writing to the Optionee upon terms no less favourable than those
offered by the Proposed Purchaser or intended to be offered by
the Optionor, as the case may be.
(ii) The Offer shall specify the price, terms and conditions of such
sale, the name of the Proposed Purchaser and shall, in the case
of an intended offer by the Optionor, disclose the person or
persons to whom the Optionor intends to offer its interest and,
if the offer received by the Optionor from the Proposed Purchaser
provides for any consideration payable to the Optionor otherwise
than in cash, the Offer shall include the Optionor's good faith
estimate of the cash equivalent of the non-cash consideration.
(iii)If within a period of 60 days of the receipt of the Offer the
Optionee notifies the Optionor in writing that it will accept the
Offer, the Optionor shall be bound to sell such interest to the
Optionee on the terms and conditions of the Offer. If the Offer
so accepted by the Optionee contains the Optionor's good faith
estimate of the cash equivalent of the non cash consideration as
aforesaid, and if the Optionee disagrees with the Optionor's best
estimate, the Optionee shall so notify the Optionor at the time
of acceptance and the Optionee shall, in such notice, specify
what it considers, in good faith, the fair cash equivalent to be
and the resulting total purchase price. If the Optionee so
notifies the Optionor, the acceptance by the Optionee shall be
effective and binding upon the Optionor and the Optionee, and the
cash equivalent of any such non-cash consideration shall be
determined by binding arbitration and shall be payable by the
Optionee, subject to prepayment as hereinafter provided, within
60 days following its determination by arbitration. The Optionee
shall in such case pay to the Optionor, against receipt of an
absolute transfer of clear and unencumbered title to the interest
of the Optionor being sold, the total purchase price which is
specified in its notice to the Optionor and such amount shall be
credited to the amount determined following arbitration of the
cash equivalent of any non-cash consideration.
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(iv) If the Optionee fails to notify the Optionor before the
expiration of the time limited therefore that it will purchase
the interest offered, the Optionor may sell and transfer such
interest to the Proposed Purchaser at the price and on the terms
and conditions specified in the Offer for a period of 60 days,
but the terms of this paragraph shall again apply to such
interest if the sale to the Proposed Purchaser is not completed
within such 60 days.
(v) Any sale hereunder shall be conditional upon the Proposed
Purchaser delivering a written undertaking to the Optionee, in
form and substance satisfactory to its counsel, to be bound by
the terms and conditions of this Agreement.
SURRENDER AND ACQUISITION OF PROPERTY
INTEREST PRIOR TO TERMINATION OF AGREEMENT
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12. The Optionee may at any time elect to abandon any one or more of the mineral
claims comprised in the Property by giving notice to the Optionor of such
intention. For a period of 30 days after giving such notice, the Optionor may
elect to have any or all of the mineral claims in respect of which such notice
has been given transferred to it by delivery of a request therefore to the
Optionee, whereupon the Optionee shall deliver to the Optionor a Xxxx of Sale or
other appropriate transfer documents in registrable form transferring such
mineral claims to the Optionor. Any claims so transferred shall be in good
standing under the laws of the jurisdiction in which they are situate for at
least 24 months from the date of transfer. If the Optionor fails to make request
for the transfer of any mineral claims as aforesaid within such 30 day period,
the Optionee may then abandon such mineral claims without further notice to the
Optionor. Upon any such transfer or abandonment, the mineral claims so
transferred or abandoned shall for all purposes of this Agreement cease to form
part of the Property.
FORCE MAJEURE
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13. (a) If the Optionee is at any time either during the Option Period or
thereafter prevent or delayed in complying with any provisions of this
Agreement by reason of strikes, lock-outs, labour shortages, power
shortages, fuel shortages, fires, wars, acts of God, governmental
regulations restricting normal operations, shipping delays or any other
reason or reasons, other than lack of funds, beyond the control of the
Optionee, the time limited for the performance by the Optionee of its
obligations hereunder shall be extended by a period of time equal in length
to the period of each such prevention or delay, but nothing herein shall
discharge the Optionee from its obligations hereunder to maintain the
Property in good standing;
(b) The Optionee shall give prompt notice to the Optionor of each event of
force majeure under paragraph (a) and upon cessation of such event
shall furnish to the Optionor with notice t that effect together with
particulars of the number of days by which the Obligations of the
Optionee hereunder have been extended by virtue of such event of force
majeure and all preceding events of force majeure.
(c) After the Commencement of Commercial Production, the Optionee shall
work, mine and operate the Property during such time or times as the
Optionee in its sole judgment considers such operations to be
profitable. The Optionee may suspend or curtail operations, both
before and after Commencement of Commercial Production, during periods
when the products derived from the Property cannot be profitable sold
at prevailing prices or if an unreasonable inventory thereof, in the
Optionee's sole judgment, has accumulated or would otherwise
accumulate.
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CONFIDENTIAL INFORMATION
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14. No information furnished by the Optionee to the Optionor hereunder in
respect of the activities carried out on the Property by the Optionee, or
related to the sale of minerals, ore, bullion or other product derived from the
Property, shall be published by the Optionor without the prior written consent
of the Optionee, but such consent in respect of the reporting of factual data
shall not be unreasonably withheld, and shall not be withheld in respect of
information required to be publicly disclosed pursuant to applicable securities
or corporation laws.
ARBITRATION
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15. (a) The parties agree that all questions or matters in dispute with respect
to the accounting of monies hereunder or in any respect to any other
dispute which the parties agree shall be settled by arbitration, shall be
submitted to arbitration pursuant to the terms hereof.
(b) It shall be a condition precedent to the right of any party to submit
any matter to arbitration pursuant to the provisions hereof, that any
party intending to refer any matter to arbitration shall have given
not less than 10 days' prior notice of its intention to do so to the
other party, together with particulars of the mater in dispute. On the
expiration of such 10 days, the party who gave such notice may proceed
to refer the dispute to arbitration as provided in paragraph (c).
(c) The party desiring arbitration shall appoint one arbitrator and shall
notify the other party of such appointment and the other party shall,
within 15 days after receiving such notice, either consent to the
appointment of such arbitrator which shall then carry out the
arbitration or appoint an arbitrator and the two arbitrators so named,
before proceeding to act, shall within 30 days of the appointment of
the last appointed arbitrator, unanimously agree on the appointment of
a third arbitrator to act with them and be chairman of the arbitration
herein provided for.
If the other party shall fail to appoint an arbitrator within 15 days after
receiving notice of the appointment of the first arbitrator, the first
arbitrator shall be the only arbitrator, and if the two arbitrators
appointed by the parties shall be unable to agree on the appointment of the
chairman, the chairman shall be appointed under the provisions of the
Commercial arbitration Act of British Columbia. Except as specifically
otherwise provided in this section, the arbitration herein provided for
shall be conducted in accordance with such Act. The chairman, or in the
case where only one arbitrator is appointed, the single arbitrator, shall
fix a time and place in Vancouver, British Columbia, for the purpose of
hearing the evidence and representations of the parties, and he shall
preside over the arbitration and determine all questions of procedure not
provided for under such Act or this section. After hearing any evidence and
representations that the parties may submit, the single arbitrator, or the
arbitrators, as the case may be, shall make an award and reduce the same to
writing and delivery one copy thereof to each of the parties. The expense
of the arbitration shall be paid as specified in the award.
(d) The parties agree that the award of a majority of the arbitrators or
in the case of a single arbitrator, of such arbitrator, shall be final
and binding upon each of them.
DEFAULT AND TERMINATION
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16. (a) If at any time during the Option Period the Optionee fails to perform
any obligation required to be performed by it hereunder or is in breach of
a warranty given by it hereunder, which failure or breach materially
interferes with the implementation of this Agreement, the Optionor may
terminate this Agreement, but only if:
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(i) it shall have first given to the Optionee a notice of default
containing particulars of the obligation which the Optionee has
not performed or the warranty breached; and
(ii) the Optionee has not, within 45 days following delivery of such
notice of default, cured such default or commenced proceedings to
cure such default by appropriate payment or performance, the
Optionee hereby agreeing that should it so commence to cure any
default it will prosecute the same to completion without undue
delay.
Should the Optionee fail to comply with the provision of subparagraph (ii),
the Optionor may thereafter terminate this Agreement.
(b) The Optionee may permanently discontinue mining operations on the
Property at any time after the Commencement of Commercial Production
when in its opinion no further mining operations can be economically
carried out thereon. At such time, the Optionee shall dispose of all
mining plant and equipment used on the Property, effect all
reclamation work as required by law and otherwise dispose of the
Property as it thinks fit. Any purchaser of the Property after
termination of mining operations on the Property shall take the
Property free and clear of all claims by the Optionor. The accounts of
the Optionee relating to its mining operations on the Property shall
be audited by the auditors of the Optionee as soon as practicable
after the sale or disposition of all mining plant, equipment and the
Property and completion of reclamation. Final settlement of any
Royalty payable to the Optionor shall be effected without delay after
receipt of the final audited statements. After receipt of such final
audited statements and payment of Royalty, if any, this Agreement and
the mutual obligations of the Optionee and the Optionor hereunder
shall terminate.
NOTICES
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17. (a) Each notice, demand or other communication required or permitted to be
given under this Agreement shall be in writing and shall be sent by prepaid
registered mail deposited in a Post Office in Canada addressed to the party
entitled to receive the same, or delivered, telexed, telegraphed or
telecopied to such party at the address for such party specified above. The
date of receipt of such notice, demand or other communication shall be the
date of delivery thereof if delivered, telexed, telegraphed or telecopied,
or, if given by registered mail as aforesaid, shall be deemed conclusively
to be the third business day after the same shall have been so mailed
except in the case of interruption of postal services for any reason
whatever, in which case the date of receipt shall be the date on which the
notice, demand or other communication is actually received by the
addressee.
(b) Either party may at any time and from time to time notify the other
party in writing of a change or address and the new address to which
notice shall be given to it thereafter until further change.
GENERAL
18. (a) This Agreement shall supersede and replace any other agreement or
arrangement, whether oral or written, heretofore existing between the
parties in respect of the subject matter of this Agreement.
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(b) No consent or waiver expressed or implied by either party in respect
of any breach or default by the other in the performance by such other
of its obligations hereunder shall be deemed or construed to be a
consent to or a waiver of any other breach of default.
(c) The parties shall promptly execute or cause to be executed all
documents, deeds, conveyances and other instruments of further
assurance and do such further and other acts which may be reasonably
necessary or advisable to carry out fully the intent of this Agreement
or to record wherever appropriate the respective interest from time to
time of the parties in the Property.
(d) This Agreement shall enure to the benefit of and be binding upon the
parties and their respective successors and permitted assigns.
(e) This Agreement shall be governed by and construed in accordance with
the laws of British Columbia and shall be subject to the approval of
all securities regulatory authorities having jurisdiction.
(f) Time shall be of the essence in this Agreement.
(g) Wherever the neuter and singular is used in this Agreement it shall be
deemed to include the plural, masculine and feminine, as the case may
be.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
The CORPORATE SEAL of )
Whitegold Resource Corp. )
was hereunto affixed in the )
presence of: ) c/s
)
/s/Xxxxx Xxxxxxxx )
-----------------
Xxxxx Xxxxxxxx )
The CORPORATE SEAL of )
Big Cat Mining Corporation )
was hereunto affixed in the )
presence of: ) c/s
)
/s/Xxxx Xxxxx )
-------------
Xxxx Xxxxx )
13
SCHEDULE "A"
To Option Agreement dated September 28, 2001
Claim Name Record Number Year of Expiry
---------- ------------- --------------
ISK1 227242 March 5, 2002
ISK2 227244 March 5, 2002
ISK3 227243 March 5, 2002
ISK4 227245 March 5, 2002
BRYS1 669164M August 16, 2002
BRYS2 669165M August 16, 2002
BRYS3 669200M August 16, 2002
BRYL1 669160M August 15, 2002
BRYL2 669161M August 15, 2002
BRYL3 669162M August 15, 2002
BRYL4 669163M August 16, 2002
GRIZZLY 228114 August 10, 2002
ISK5 227213 March 3, 2003
ISK6 227224 March 3, 2002
Liard Mining Division
14
SCHEDULE "B"
To Option Agreement dated September 28, 2001
NET SMELTER RETURNS
-------------------
1. For the purposes of this Agreement "Net Smelter Returns" shall mean the
actual proceeds received from any mint, smelter or other purchaser for the sale
of bullion, concentrates or ores produced from the Property and sold, after
deducting from such proceeds the following charges to the extent that they are
not deducted by the purchaser in computing payment:
(a) in the case of the sale of bullion, refining charges only;
(b) in the case of the sale of concentrates, smelting and refining
charges, penalties and the cost of transportation of such concentrates
from the Property to any smelter or other purchaser; and
(c) in the case of ores shipped to a purchaser, refining charges for
bullion and charges for smelting, refining and the cost of
transportation from the mill to any smelter or other purchaser for
concentrates.
2. The Optionee shall have the right to commingle with ore from the Property,
ore produced from other properties owned or controlled by the Optionee, provided
the Optionee shall adopt and employ reasonable practices and procedures for
weighing, sampling and assaying in order to determine the amounts of products
derived from, or attributable to, ore mined and produced from the Property. The
Optionee shall maintain accurate records of the results of such sampling,
weighing and assaying with respect to any ore mined and produced from the
Property. The Optionor or its authorized agent shall be permitted the right to
examine at all reasonable times such records pertaining to commingling of ores
or to the calculations of Net Smelter Returns.
3. Commencing on the fifth anniversary of this Agreement and every year
thereafter until Commencement of Commercial Production from the Property, the
Optionee shall pay the Optionor an advance on Net Smelter Returns of $100,000.
Any advances on Net Smelter Returns paid under this paragraph shall be
accumulated and be deductible from any Net Smelter Returns to the Optionor to
the extent such Net Smelter Returns payments exceed $100,000 for any calendar
year.
4. If, after Commencement of Commercial Production from the Property, Net
Smelter Returns payable to the Optionor for any calendar year are less than
$100,000, the Optionee shall pay to the Optionor on or before June 1 of the
following year the difference between the $100,000 and the amount of Net Smelter
Returns payable for the said calendar year.
