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AURORA GOLD CORPORATION
0000-000 Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X., Xxxxxx
X0X 0X0
July 18, 1997
Xxxxxx Xxxxxxx, S.A.
00 xxxxx 00-00
Xxxx 0
Xxxxxxxxx Xxxx
Xxxxxxxxx
Attention: Xx. Xxxxxxx Xxxxxxxx & Xx. Xxxxxxx Xxxxxxxxx
Gentlemen,
We agree to the terms of our last discussion and the revisions of your proposal
of July 7, 1997. The new proposed agreement is as follows:
1. Xxxxxx would make two cash payments: $5,000 USF on July 21, 1997 and
$10,000 USF upon completion of our due diligence on the four mineral
concessions. The combined total of these two payments if $15,000 USF.
These two payments would be a one time cash payment.
2. Upon completion of our due diligence and governmental approval of the
four applications, 10,000 common shares of Aurora Gold Corporation per
mineral concession (a total of 40,000 common shares) will be issued to
Minera Motagua, S.A.
3. A 2% Net Smelter Royalty Interest (NSR) will be granted to Minera
Motagua, S.A. for each distinct mineral deposit per mineral concession.
This NSR is exclusive of the mandatory 1% NSR granted to the Government
of Guatemala.
4. 100,000 common shares of Aurora Gold Corporation will be issued to
Minera Motagua, S.A. upon a positive feasibility report for each
distinct mineral deposit per mineral concession that is deemed to be
economically viable.
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5. Aurora Gold Corporation shall have the First Right of Refusal for a
period of twenty (20) days on terms mutually acceptable to Aurora Gold
Corporation and Minera Motagua, S.A. on any other mineral concessions
that Minera Motagua, S.A. has applied for and/or has been granted. This
First Right of Refusal is exclusive of two pending transactions with
BWI Resources and Megastar Ventures.
6. Aurora Gold Corporation or its wholly owned subsidiary Aurora Gold
Corporation (B.V.I.) Limited or its nominees will be the party named in
the final agreement.
7. Upon completion of our due diligence and governmental approval of
applications for the four mineral concessions Aurora Gold Corporation
and Minera Motagua, S.A. will enter into a final agreement transferring
100% ownership of each of the four mineral concessions to Aurora Gold
Corporation and/or its subsidiary.
8. Aurora Gold Corporation will assume the payment of all fees and be
responsible for maintaining the title to the concessions in accordance
with the newly instituted mining law of Guatemala.
The above mentioned terms and references are supported on the following
knowledge of the four mineral concessions.
EL TRIUNFO
Is located in the Chimaltenango Province in Western Guatemala some sixty
kilometers west of Guatemala City, and covers an area of 64 square kilometers.
For UTM coordinates see appendix "A".
EL REJON
Is located on the borders of Sacatepequez and Chimaltenango Provinces in central
Guatemala approximately 30 kilometers west of Guatemala City, and covers an area
of 77 square kilometers. For UTM coordinates see appendix "A".
BOLA DE ORO
Is located in the Chimaltenango Province in Western Guatemala 60 kilometers west
of Guatemala City, and covers an area of 110 square kilometers. For UTM
coordinates see appendix "A".
XXXXXXX
Is located in the Guatemala Province in the central part of the County, close to
the city of Antigua 30 kilometers south of Guatemala City, and covers an area of
72 square kilometers. For UTM coordinate see appendix "A".
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Please sign below and return this letter to my attention, at which time we will
begin drafting a formal Agreement.
Yours truly,
Aurora Gold Corporation
Xxxxx X. Xxxxxxx
President
The terms outlined above are accepted by Xxxxxx Xxxxxxx, S.A., this 21st day of
July, 1997.
Minera Motagua, S.A.
Per:
------------------------------------
Xxxxxxx Xxxxxxxx
Per:
------------------------------------
Xxxxxxx Xxxxxxxxx
DEJ:sg
Enclosure
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APPENDIX "A"
Please see attached five (5) pages containing properties descriptions
and a general location map.
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"EL TRIUNFO 1"
Is located in the Chimaltenano province in western Guatemala some sixty
kilometers west of Guatemala City, and covers an area of 64 sq. kms. Its UTM
coordinates are:
--------------------------------------------------------------------------------------------------------------------------
Apex North East
--------------------------------------------------------------------------------------------------------------------------
1 1,636,000 738,000
2 1,644,000 738,000
3 1,644,000 746,000
4 1,636,000 746,000
--------------------------------------------------------------------------------------------------------------------------
The "El Triunfo" concession was requested based on historical
information obtained at the Ministry of Energy and Mines. A compilation prepared
in the Mining Investigation department of the ministry which lists claims
presented up to date, indicate approximately eight gold claims obtained in
different periods of time on the area requested. There is also one more
reference obtained from the General Archive of Central America, which is the
library that saves and preserves all documents available from the colonial
period in Central America, indicating the existence a gold mine close to the
town of San Xxxxxx Jilotepeque, which lies within the area requested.
The mineral concession application was presented in the Ministry of
Energy and Mines on April 24, 1997. The area is plotted on the GUATEMALA
1:250,000 scale map included.
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"EL REJON"
Is located on the Sacatepequez and Chimaltenango provinces in central
Guatemala approximately 30 kms. west of Guatemala city. It covers an area of 77
sq. kms, and its UTM coordinates are:
--------------------------------------------------------------------------------------------------------------------------
Apex North East
--------------------------------------------------------------------------------------------------------------------------
1 1,619,000 748,000
2 1,618,000 748,000
3 1,618,000 749,000
4 1,615,000 749,000
5 1,615,000 751,000
6 1,613,000 751,000
7 1,613,000 749,000
8 1,611,000 749,000
9 1,611,000 745,000
10 1,613,000 745,000
11 1,613,000 743,000
12 1,612,000 743,000
13 1,612,000 739,000
14 1,617,000 739,000
15 1,617,000 743,000
16 1,619,000 743,000
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The "El Rejon" area was requested based on historical references
obtained at the General Archives of Central America. A "Royal" mine existed at
the site which produced gold and silver for several years. There are a total of
seven references dating from 1657 through 1869 of a mine state: "Xx. Xxxxxxxxx
Xxxxxxxxxxx, claims a native silver mine located close to Antigua Guatemala on a
hill called El Rejon, which belongs to the country of Jocotenango. Its ore
contains 52% silver."(1869) Reference is also made in 1657 to a mine located on
the Parramos hill next to the town of Parramos which is located west of the El
Rejon mine. The concession is located on tertiary volcanic terrain.
The mineral concession application was presented in the Ministry of
Mines on April 30, 1997. It is plotted on the GUATEMALA 1:250,000 scale map
included.
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"BOLA DE ORO"
Is located in the Chimaltenango province in western Guatemala some 60
kms. west of Guatemala City. It covers an area of 110 sq. kms. Its UTM
coordinates are:
--------------------------------------------------------------------------------------------------------------------------
Apex North East
--------------------------------------------------------------------------------------------------------------------------
1 1,635,000 728,000
2 1,635,000 738,000
3 1,624,000 738,000
4 1,626,000 728,000
--------------------------------------------------------------------------------------------------------------------------
The Bola de Oro (Golden Ball) concession was requested based on
historical references obtained at the General Archives of Central America. An
1824 reference states the existence of a mine close to the town of Comalapa
which produced 2.25 ounces of silver per 100 pounds of rock and some gold (not
specified). There are presently two towns with the word mine in their names
close to Comalapa. The presence of the word mine in a name usually makes
reference to late mining operation.
The concession is located within the Tertiary volcanic belt of Central
Guatemala.
The mineral exploration concession application was presented in the
Ministry of Energy and Mines on April 30, 1997. The area is plotted on the
GUATEMALA 1:250,000 scale map included.
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"XXXXXXX"
Is located on the Guatemala province on the central part of the
Country, close to the city of Antigua Guatemala (Guatemalas Capital city until
the 1800's), some 30 kms. south of Guatemala City. It covers an area of 72 sq.
kms. and is bounded by the following UTM coordinates:
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Apex North East
--------------------------------------------------------------------------------------------------------------------------
1 1,610,000 746,000
2 1,604,000 746,000
3 1,604,000 748,000
4 1,600,000 748,000
5 1,600,000 754,000
6 1,610,000 754,000
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The Xxxxxxx property was requested based on two historical references
from the Archives of Central America. The 1680 references mention the existence
of a gold mine close to the now extinguished to town of San Xxxxxxxxx Xxxxxxx on
the top of the Carmona Mountain. There is a peak on the mountain called Cerro
Las Minas, another one called Cerro Monterrico, and a river called Las Minas.
The geology of the area is not well known but the mountain is located
on tertiary volcanic terrain, next to the Agua Volcano.
The mineral exploration concession application was presented to the
Ministry of Energy and Mines on May 13, 1997. The area is plotted on the
GUATEMALA 1:250,000 scale map provided.
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