LA CURRITA GROUPINGS AGREEMENT OPTION TO EARN INTEREST AND FORM JOINT VENTURE
LA
CURRITA GROUPINGS AGREEMENT
OPTION
TO EARN INTEREST AND FORM JOINT VENTURE
THIS
AGREEMENT AND TERMS WITHIN THIS AGREEMENT ARE BEING ENTERED INTO BY BOTH PARTIES
TO REPLACE, IN ITS ENTIRETY, THE “LA CURRITA GROUPINGS” JOINT VENTURE AGREEMENT
BETWEEN AMERMIN S.A. de C.V., a 97% OWNED SUBSIDIARY OF XXXX XXXX RESOURCES
CORP. AND RAVEN GOLD CORP. DATED AUGUST 23, 2006, AS AMENDED BY AMENDMENT NO.
1
TO JOINT VENTURE AGREEMENT DATED MARCH 30, 2007. THIS AGREEMENT PROVIDES FOR
OPTIONS TO EARN-IN FROM XXXX XXXX RESOURCES CORP., BY RAVEN GOLD CORP., OF
AN
INITIAL 25%, FOLLOWED BY 40% AND UP TO A 60% JOINT VENTURE INTEREST IN THE
LA
CURRITA GROUPINGS IN CHIHUAHUA, MEXICO.
WHEREAS:
A. Xxxx
Xxxx
Resources Corp. has an option to acquire a 100% interest in the La Currita
Groupings (“La Currita”), the La Currita Mill and mining operations (together
the “La Currita”) located in Chihuahua, Mexico.
X. Xx
Xxxxxxx is approximately 192 acres and the claims comprising La Currita are
as
described in the table appended hereto as Schedule “A”.
C. Amermin
S.A. de C.V., a 97% owned subsidiary of Xxxx Xxxx Resources Corp. (“Xxxx”) and
Raven Gold Corp. (“Raven”) entered into the Joint Venture Agreement, dated
August 23, 2006, as amended by Amendment No. 1 to Joint Venture Agreement,
dated
March 30, 2007, which provided an option for Raven to earn up to 60% interest
in
the La Currita Groupings. This existing agreement is appended hereto as Schedule
“B”, and Amendment No. 1 is appended hereto as Schedule “C”.
D. Xxxx
and
Raven have both invested money and efforts into La Currita towards meeting
the
terms of the August 23, 2006 agreement. These monies and efforts are considered
historical and will not be re-addressed in this agreement.
E. Xxxx
and
Raven have discussed the corporate focus of both parties and focus needed for
La
Currita to uncover the full potential of the project. It has been decided by
both parties to refocus its efforts and capital towards a more extensive
exploration program. Both parties decided that this is best expressed by a
new
agreement, this agreement (“Agreement”).
F. All
figures in this Agreement are expressed in United States Dollars.
NOW
THEREFORE:
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1)
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To
earn an initial 25% undivided interest in La Currita, Raven
must:
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a.
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Make
a payment of $250,000 upon the execution of this Agreement;
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b.
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Make
a payment of $50,000 no later than May 4,
2007;
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c.
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Make
a payment of $205,000 no later than May 20, 2007 to address the final
property payment and IVA Taxes due;
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d.
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Make
a payment of $100,000 no later than May 31, 2007;
and
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e.
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Deliver
500,000 Rule 144 common shares of Raven, to Xxxx, by May 15,
2007.
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2)
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Upon
earning 25% participating interest in La Currita, Raven shall be
the
operator of all exploration efforts for the joint venture, so long
as it
meets all of the deadlines stated in Paragraph 3 & 4 of this
agreement. If at anytime Raven fails to meet any of the deadlines
outlined
in 3 & 4, it shall immediately cease to be operator of exploration
and/or production efforts. Xxxx may have its representatives on location
at any and all times to observe all
operations.
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3)
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Raven
may elect to increase its interest in La Currita to 40%, by providing
notice to Xxxx to do so by June 10, 2007 and by meeting the following
terms:
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a.
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Deliver
an additional 500,000 Rule 144 common shares, to Xxxx, at notification
on
or before June 10, 2007;
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b.
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Spend
$1,375,000 on La Currita exploration on or before May 30, 2008. Only
direct exploration costs are eligible to be counted towards the La
Currita
spending. Indirect costs, such as management overhead, are not
eligible;
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c.
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Provide
to Xxxx an audited statement of the expenditures provided by an
independent accounting firm to be mutually accepted by both parties,
along
with supporting documents, on a quarterly basis and upon spending
the
required $1,375,000. Additionally, Raven shall supply Xxxx with all
documents related to expenditures on a monthly basis; related to
all
expenditures made on a trailing 90 day period;
and
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d.
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Provide
Xxxx 90 days to review the final audit statement of the expenditures
and
await Tara’s acceptance of the eligible spending and letter stating that
Raven has earned its 40% participating interest, this letter is to
be
issued to Raven no later than 7 days after the review period is over
to a
maximum review period of 90 days.
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e.
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In
the event that Raven fails to take any of the actions by the dates
outlined in subparagraphs a) through c) above, Raven shall forfeit
the
ability to increase its interest
in La Currita and furthermore shall forfeit any claims to any payments
or
costs expended or any shares delivered to Xxxx pursuant to subparagraphs
a. & b.
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f.
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Upon
Raven earning 25%, the parties shall in good faith negotiate a definitive
joint venture agreement containing the usual representations, warrantees
and content typical of a joint venture agreement on or before May
30,
2008. If for any reason the parties cannot negotiate the definitive
joint
venture agreement, it will be resolved by
arbitration.
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4)
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Raven
may elect to increase its interest in La Currita to 60%, by providing
notice to Xxxx to do so on or before June 10, 2008 and by meeting
the
following terms:
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a.
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Deliver
an additional 500,000 Rule 144 common shares, to Xxxx, at notification
to
increase its interest to 60%;
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b.
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Spend
an additional $2,875,000 on La Currita exploration on or before November
30, 2009. Only direct exploration costs are eligible to be counted
towards
the La Currita spending. Indirect costs, such as management overheard,
are
not eligible;
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c.
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Provide
to Xxxx an audited statement of the expenditures provided by an
independent accounting firm to be mutually accepted by both parties,
along
with supporting documents, on a quarterly basis and upon spending
the
required additional $2,875,000. Additionally, Raven shall supply
Xxxx with
all documents related to expenditures on a monthly basis; related
to all
expenditures made on a trailing 90 day period;
and
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d.
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Provide
Xxxx 90 days to review the final audit statement of the expenditures
and
await Tara’s acceptance of the eligible spending and letter stating that
Raven has earned its 60% participating interest, this letter is to
be
issued to Raven no later than 7 days after the review period is over
to a
maximum review period of 90 days.
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5)
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Raven
will make an additional payment of $100,000 to Xxxx on every anniversary
date of this agreement to maintain its interest earned and to keep
the
Agreement in good standing.
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6)
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Until
and unless Raven earns its 60% interest pursuant to paragraph 4,
Xxxx
shall not be required to fund any Joint Venture costs or any other
expenditures; Raven will have sole responsibility for such costs
or
expenditures. Upon Raven earning 60% participating interest, Raven
and
Xxxx shall be required to fund all joint venture costs and expenditures
in
proportion to each party's participating interest. Raven will provide
to
Xxxx an audited statement of the expenditures, along with supporting
documents, on a quarterly basis and give Xxxx 90 days to review the
audit
statement before forwarding, to Raven, its participating interest
of the
expenditures. If either party elects not to contribute its proportionate
share to an approved program and budget such parties' participating
interest shall be subject to straight-line dilution. Raven shall
defend
and indemnify Xxxx from any nd
all claims for acts related to this Agreement; and furthermore shall
be
responsible to remove any liens filed arising from its actions.
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7)
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Once
a participant interest has been diluted to a 10% interest, this interest
will automatically convert into a 3% N.S.R. and the Agreement will
become
null and void. For a period of no longer then 1 year, the majority
party
will have the option to reduce the 3% NSR to 1% in exchange for a
$2,000,000 payment.
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8)
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Should
Raven decide not to pursue exploration efforts, i.e. at outlined
in
paragraphs 3 & 4, then Raven will cease to be the operator of La
Currita. In such a case, Raven will hold a silent, non-voting,
participation interest that it has fully earned by meeting all the
terms
for that interest level. Raven’s silent, non-voting, participation
interest, shall be subject to straight-line dilution upon continued
investment into the project by Xxxx and/or other consequent joint
venture
partners. All other terms of this Agreement shall remain in effect
and
binding on each party.
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9)
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Raven
and Xxxx will form a Management Committee consisting of two
representatives from each joint venture party. The operator shall
present
work programs and budgets to the Management Committee for approval.
In the
event of a tie vote, the Operator, at the time of a given vote, shall
have
the deciding vote.
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10)
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The
Management Committee, along with other invited guests as needed,
shall
meet regularly by teleconference, at a minimum of twice monthly,
to make
decisions on future work and update all parties on current
efforts.
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11)
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Raven
will make all efforts to establish an on-line accounting system to
track
all costs and exploration spending associated with La Currita, but
in any
event, such accounting system shall be in place by December 31, 2007.
The
Management Committee will have access to this system and all information
within this system. Xxxx Xxxx will be given access to this system
for the
purposes of migrating relevant information and integrating the relevant
information, into its own accounting
system.
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12)
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Xxxx
owns 100% of the Mill, has the rights to 100% of the revenue generated
from the Mill, is the operator of the Mill, and will operate the
Mill
until Xxxx recovers the operating capital it has already expended
into the
Mill (Estimated at 3 months). Xxxx will provide a summary of Mill
expenditures to Raven. Raven will supply the capital to release all
employees working at the Mill (Estimated $40,000) so that Xxxx can
rehire
these employees and remove any future financial liability to Raven
from
Mill operations. Upon recovery of its total investment, (Estimated
at
$400,000, Xxxx to provide Raven with statements of expenditures with
supporting documentation) the Mill will be jointly owned by the parties
at
the participation interest earned and future decisions regarding
the Mill
will be based on the participation interests.
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13)
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It
is understood that Xxxx has an agreement with Paramount Gold Mining
Corp,
which it holds under the “San Xxxxxx Joint Venture Agreement” dated August
3rd, 2005 to supply and process ore at the Mill at a minimum rate
of 75
tons per day and its first right of refusal to
participate in any Mill improvements that will increase the daily
capacity
of the Mill. Xxxx will make all efforts to dissolve this term from
the
“San Xxxxxx Joint Venture
Agreement”.
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14)
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In
the event either party desires, at any time, to sell, transfer, assign
or
otherwise dispose of any of their interests in the La Currita Groupings
(whether now held or hereafter acquired) (the "Offered Interest"),
or
receives a bona fide offer from a third party to purchase such Offered
Interest, the selling party shall deliver a notice (the "Notice")
to the
other party stating (i) the selling party's bona fide intention to
sell or
transfer the Offered Interest, (ii) the amount of such Offered Interest
to
be sold or transferred, (iii) the price for which the selling party
proposes to sell or transfer such Offered Interest, (iv) the name
of the
proposed Investor or transferee, or class of Investor or transferee,
and
(v) all other material terms and provisions relating to the proposed
sale
or transfer, including an executed copy of the proposed transfer
document.
Within thirty (30) days after receipt of the Notice, the other party
may
elect in writing to purchase all or any part of the Offered Interest
to
which the Notice refers, at the price per share and the other terms
and
provisions of sale specified in the Notice. The closing shall then
be held
thirty (30) days following the other party’s exercise of its purchase
rights hereunder. Full payment for all of the Offered Interest to
which
the Notice refers and with respect to which the other party elects
to
purchase shall be made by cash or check in US funds to the selling
party
upon transfer of such interest.
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15)
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Any
future economic benefits gained through La Currita and the Mill will
be
divided according to the participation interest of each party at
the time
of benefit.
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16)
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Subject
to any disclosure requirements as promulgated by the Securities and
Exchange Commission, the parties agree to consult each other and
agree on
joint news releases in the event of any public disclosure. Furthermore,
all news releases shall be jointly reviewed and released with the
following format included at the beginning of each news release:
“CHICAGO,
“Appropriate Date” (MARKETWIRE) - (Other OTC: XXXX.XX) Xxxx Xxxx Resources
Corp. and Raven Gold Corp (“XXXX.XX”) are pleased to announce…”. This text
may be revised by Xxxx at any time.
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17)
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If
Raven Gold securities become de-listed from the stock exchange, for
any
reason and for a maximum period of 3 months time, then any cumulative
share payments already made to Xxxx will be converted at a price
of US
$0.75 per share and payments will be forwarded to Xxxx at a rate
of
$75,000 per month, beginning the 1st day of the month following the
delisting and continuing on the 1st day of every month until all
the
shares are converted to cash. Upon delisting, any future share payments
will be made at the time outlined in the Agreement except that the
payment
will be in cash, equivalent to the conversion of the shares at US
$0.75
per share owed to Xxxx.
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18)
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In
the event that Raven fails to obtain its 60% interest in La Currita,
pursuant to paragraph 4, Raven will retain only the silent, non-voting,
participation interest that it has fully earned by meeting all of
the
requirements contained in paragraphs 1 and/or 3. Raven’s silent,
non-voting, participation interest, at the time of dissolution of
Agreement, shall be subject to straight-line dilution upon continued
investment into the project by Xxxx Xxxx and/or other consequent
joint
venture partners of the La Currita Groupings. This clause will be
extended
to
and be included in all future joint venture agreements for the La
Currita
Groupings with Raven.
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19)
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The
agreements of the respective parties to the Agreement shall be binding
on
the parties’ respective successors and
assigns.
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20)
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This
Agreement is the sole and complete expression of the understandings
and
agreements of the parties hereto and may not be amended or altered
in any
way, except in writing executed by all parties hereto. This Agreement
supersedes any and all prior or contemporaneous agreements of the
parties,
whether written or oral.
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21)
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The
provisions of the Agreement are contractual and are enforceable as
such.
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22)
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This
Agreement may be executed in counterparts, and if so executed, each
counterpart shall be deemed an
original.
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23)
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Neither
the parties hereto or the parties’ respective attorneys shall be deemed
the drafter of this Agreement in any litigation, or other proceeding
which
hereafter may arise between or among
them.
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24)
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25)
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Neither
party has relied upon the representations made by the other in entering
into this Agreement and have been responsible for their own due
diligence.
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Kindly
signify your acceptance of the terms contained herein by signing in the
appropriate space below and returning a copy of the fully executed Agreement
to
Xxxx to the attention of the President by facsimile at 000-000-0000. Upon
receipt by facsimile as aforesaid, the Agreement will be considered executed
and
a binding obligation of the parties will have been formed.
The
above
noted terms are hereby accepted this 3rd
day of
May, 2007.
XXXX
XXXX
RESOURCES CORP.
Per:
/s/
Xxxxxxx X. Xxxxxx, Xx
Xxxxxxx
X. Xxxxxx Xx., President and CEO
Per:
/s/
Xxxx Xxxxxxxxx
Xxxx
Xxxxxxxxx, CEO and Director
Schedule
A
La
Currita Groupings
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NAME
OF ESTATE
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TITLE
NUMBER
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SURFACE
(HS)
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XXXXXX
2
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191332
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15-82-80
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EL
XXXXXXX
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185236
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10-95-68
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XX
XXXXX
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186172
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37-65-9294
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LA
CURRITA
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99/2515
(Pending)
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13-88-1337
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Schedule
B
Joint
Venture Agreement of August 23, 2006
*
Incorporated by reference to the Company’s Current Report filed with the SEC on
Form 8-K on September 22, 2006.
Schedule
C
Amendment
No. 1 to Joint Venture Agreement
Dated
March 30, 2007
*
Incorporated by reference to the Company’s Current Report filed with the SEC on
Form 8-K/A on April 3, 2007.
