EXHIBIT 10.08
AMENDMENT
TO
OPTION AGREEMENT
(FRIDAY)
This Amendment to Friday Option Agreement is entered into this 5th day
of September, 1997, by and between Arctic Fox Ltd., a Delaware corporation,
whose address is in care of Xxx Xxxx, 000 Xxxx Xxx Xxxx, Xxxxxxxxx, Xxxxxxx
00000 ("Owner"), Idaho Consolidated Metals Corporation, a British Columbia
corporation, whose address is X.X. Xxx 0000 Xxxxxxxx, Xxxxx 00000 ("ICMC"),
Idaho Gold Corporation, a Nevada corporation, whose address is in care of Bema
Gold Corporation, 0000-000 Xxxxxxx Xxxxxx, Xxxxxxxxx, X.X. X0X 0X0 ("IGC"), and
Cyprus Gold Exploration Corporation, a Delaware corporation, whose address is
0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 ("Cyprus").
RECITALS
A. Owner's predecessors in interest, Xxxxx Xxxxx, Inc. and Thunderbird
Resources, Inc. (collectively, the "Owner" therein), entered into that certain
"Option Agreement" dated July 11, 1985, with Xxxx Xxxxx Ltd. (the "Optionee"
therein), as amended by that agreement among the same parties dated September
18, 1985, (such option agreement, as amended, hereinafter referred to as the
"Friday Properties Agreement"), covering certain patented and unpatented mining
claims and agreements concerning such mining claims situated in Idaho County,
Idaho;
B. Xxxx Xxxxx Ltd. entered into a joint venture agreement dated October
l, 1985 with Normine Resources Ltd., and by that certain Agreement dated June
26, 1986, Xxxx Xxxxx Ltd. assigned its interest in the Friday Properties
Agreement, the properties covered thereby and the joint venture to Xxxx Xxxxx
(U.S.) Inc.
C. Owner, by mesne assignments, succeeded to the entire interest of
Xxxxx Xxxxx, Inc. in the Friday Properties Agreement;
D. By mesne assignments, IGC succeeded to the interest of the Optionee,
including that of Xxxx Xxxxx Limited, Xxxx Xxxxx (U.S.) Inc. and Normine
Resources Limited in the Friday Properties Agreement.
E. ICMC and IGC entered into that certain Mineral Lease Agreement dated
July 9, 1996 (the "IGC Agreement"), under which ICMC succeeded to the interest
of the Optionee in the Friday Properties Agreement subject to the terms of the
IGC Agreement.
F. ICMC entered into a binding letter agreement dated June 13, 1997,
with Cyprus under which Cyprus succeeded to the interest of the Optionee under
the Friday Properties Agreement and became the "Optionee" for all purposes
thereof, and under which ICMC agreed to contribute the Friday Properties
Agreement, subject to the IGC Agreement, and all of ICMC's interests in
mining claims covered thereby, to the purposes of the Joint Venture created by
that June 13, 1997 letter agreement.
G. There have arisen disputes among Owner, IGC and ICMC with respect to
the interpretation of the Friday Properties Agreement, and Owner, IGC, ICMC and
Cyprus desire to further amend the Friday Properties Agreement to delete certain
claims and add others, and thereby to conform the definition of "Mining
Property" therein to the properties actually held by the parties pursuant to the
agreement as set forth herein.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. "Mining Property" Defined. Schedule A of the Friday Properties
Agreement is deleted in its entirety and in its place is inserted the new
"Exhibit A," attached hereto and by this reference incorporated herein. Section
18 of the Friday Properties Agreement established an "area of interest" under
which acquisitions of mining rights by the Owner prior to the effective date of
this Amendment within the defined "Area of Interest" would be made subject to
the Friday Properties Agreement. Section 18 did not require the Optionee or its
successors and/or assigns to similarly make acquired properties subject to the
Friday Properties Agreement. Cyprus' predecessor located the Z Group of claims,
more particularly described in Part II of Exhibit A attached hereto.
Notwithstanding that clear impact of Section 18, and as additional consideration
for this Amendment, the Z Claims shall be deemed to be "Mining Property" for all
purposes of the Friday Properties Agreement.
2. Owner's Interest. Owner's undivided interest or right to acquire an
interest is as set forth in Exhibit A.
3. Scheduled Payments Clarified. Payments due to Owner and to third
parties pursuant to underlying leases, options and other agreements affecting
the Mining Property are set forth in Exhibit B.
4. Area of Interest. Section 18 of the Friday Properties Agreement is
deleted in its entirety and any acquisitions within that Area of Interest
hereafter by any party to the Friday Properties Agreement shall be free from the
rights formerly provided in Section 18.
5. Right of Assignment. A new Section 18 replacing that deleted in
Paragraph 4 of this Amendment shall be inserted to read as follows:
Right of Assignment
Optionee may not transfer or assign this option agreement without
the prior written consent of the Owner; provided that Optionee
may freely reassign this agreement to ICMC or may transfer or
assign this agreement or any interest therein or in the Mining
Properties to affiliates or to Amax
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Gold Inc., whose address is 0000 X. Xxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, and provided further that Optionee may transfer,
assign, encumber, or convey this Option Agreement, the Mining
Property, or any interest therein, in connection with financing a
project on or for the benefit of the Mining Property. For
purposes hereof "affiliate" means any person, corporation,
limited liability company, or, other legal entity (excepting a
general partnership, joint venture, or limited partnership) which
directly or indirectly controls, is controlled by, or is under
common control of Optionee.
6. Default Rectification.
(a) Delete the last sentence of Section 5.1 and in its place
insert the following:
The Optionee may prepay all or any part of the $300,000.,
whether or not Optionee may be in default or alleged to be in
default of this option agreement, and upon the payment by
Optionee, its predecessors and/or successors of the total
amount of $300,000., Owner's deeds delivered into escrow
pursuant to Section 21.1 of this Option Agreement conveying
and transferring all Owner's right, title and interest in and
to this Option Agreement, and/or the Mining Property, shall be
delivered to Optionee.
(b) Article 21 shall be deleted in its entirety and in its
place inserted the following:
Escrow; Default; Right to Cure
21.1 On or before September 26, 1997, (a) ICMC, IGC, and Cyprus will
execute, release and quitclaim deeds, in the form attached to this
Agreement as Exhibit D-1 (referred to as the "Optionee's Deed"),
transferring this -option agreement and conveying their respective
claims to Owner, and (b) Owner will execute release and quitclaim
deeds, in the form attached to this option agreement as Exhibit D-2
(referred to as the "Owner's Deed"), transferring this option agreement
and the Mining Property to Optionee. The Optionee's Deed and Owner's
Deed will be delivered to an escrow company in Missoula Montana,
mutually satisfactory to the parties (hereinafter referred to as an
"Escrow Agent"), to be held subject to instructions mutually
satisfactory to the parties, and subject to the Optionee's right to
cure set forth in Section 21.2 below, shall either be (a) recorded upon
the termination or expiration of the Friday Properties Agreement, or
(b) returned to Optionee when Optionee, its predecessors and/or
successors shall have paid to owner, its purchasers or successors, the
total amount of $300,000., and has made all the option payments as
contemplated by Article 3 ("Option Payments") and Section 5.1 ("Net
Smelter Return") of this option agreement. In the case of the Owner's
Deed, the Escrow Agent shall deliver the Owner's Deed upon Optionee,
fulfilling all of its purchase obligations under Friday Properties
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Agreement by the payment or prepayment, Owner, its predecessors and/or
successors of an accumulated sum of $300,000.
21.2 If Optionee shall default or fail to perform fully and promptly
any of the terms of this option agreement, such default or failure
shall continue for a period of thirty (30) days after either (a)
written notice to the parties to this option agreement specifying the
default (and the payment or action(s) necessary to cure the default) is
provided to Optionee pursuant to this option agreement, without being
remedied, satisfied and discharged, or (b), if Optionee shall in good
faith dispute the existence of a default, an award of arbitration
pursuant to Article 26 of this Agreement determining that Optionee is
in default, then Owner, as applicable, may, at its option and subject
to Optionee's cure rights provided for in Section 21.3 below, declare
this option agreement to be terminated and forfeited and any and all
rights, privileges, and interests of Optionee, including IGC, ICMC
and/or Cyprus, in this Agreement and the Mining Properties shall be
null, void and at an end.
21.3 Optionee shall have the right, but not the obligation, to cure any
default or failure under this option agreement by substantially
performing as set forth in the notice or by commencing to substantially
perform the same within the thirty (30) day period following notice;
provided that Optionee may cure any and all defaults or alleged
defaults by payment or prepayment of an amount necessary to bring the
cumulated payments to Owner, its predecessor and successors, to a total
of $300,000. For example, if the total accumulation of option payments,
royalties and minimum royalties paid to Owner at the time of a default
or alleged default shall equal $200,000., the Optionee may, in any case
cure any default by the tender of the sum of $100,000., bringing the
total payment to owner, its predecessors and/or successors to $300,000.
21.4 In the event of termination, forfeiture, and cancellation, as
provided for herein, all sums paid hereunder by Optionee or its
predecessors in interest and all improvements made on the Mining
Property shall become the property of Owner, and shall be deemed to be
the stipulated rental and lease payable for occupancy and use of the
Mining Property and as liquidated damages for the breach of this option
agreement.
7. Arbitration. Article 26 shall be deleted in its entirety, and in its
place inserted the following:
26.1 Any and all disputes, controversies and claims between the parties
arising out of this option agreement shall be amicably and promptly
settled by negotiation and consultation among them. In the event the
parties are
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unable to settle such a dispute, controversy or claim by negotiation
and consultation within sixty (60) days, either party may submit the
dispute to arbitration in accordance with the terms of this Section.
All arbitrations shall be conducted at such place as may be agreed and,
in the absence of agreement, in Denver, Colorado under the rules of the
American Arbitration Association. All disputes submitted to arbitration
shall be determined pursuant to the laws of the State of Montana. All
decisions of the panel of arbitrators on any matter submitted for
arbitration in accordance with this option agreement shall be final and
binding on the parties. Damages for which a party may be liable shall
not include incidental or consequential damages, the loss of business
opportunity or punitive damages. The parties further acknowledge that
monetary damages awarded under this Section may not be an adequate
remedy for a breach of this option agreement and agree that any party
may apply for specific performance and injunctive relief to prevent
such a breach.
8. Right to Data. Section 20.2 shall be deleted in its entirety and in
its place inserted the following:
20.2 Optionee will provide quarterly regular technical reports on its
activities. Owner will have access to inspect non-interpretive data,
studies, reports, and other information at reasonable times. Cyprus
will provide Owner copies of such at Owner's request without warranty
or representation, express or implied, of the accuracy or fitness of
the data for any purpose.
9. Ratification. A copy of the Friday Properties Agreement is attached
hereto as Exhibit C and by this reference incorporated herein. Except as
specifically amended herein, the Friday Properties Agreement remains in full
force and effect. Owner confirms that as of the effective date hereof all of the
obligations of the Optionee thereunder have been fully performed and that
neither IGC, ICMC, nor Cyprus nor any of their predecessors are in default
thereof.
IN WITNESS WHEREOF the parties hereto have executed this Amendment to
Option Agreement on the day and year first above written.
ARTIC FOX LTD. CYPRUS GOLD EXPLORATION
CORPORATION
By: /S/XXX XXXX By: /S/ XXXXX XXXXXXX
Name: Xxx Xxxx Name: Xxxxx Xxxxxxx
Title: sec. treas. Title: President
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SIGNATURE PAGE
6
SIGNATURE PAGE
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EXHIBIT A
TO
AMENDMENT
TO
FRIDAY OPTION AGREEMENT
THE MINING PROPERTY
Part I: Friday Group
A. Patented Claims
Claim Name MS Number Patent Number Owner's Interest
Xxxxxx MS 1833 39226 100%
Friday, Friday Fraction, MS 1834 41174 100%
Alaska 3, Alaska 4
B. Unpatented Claims
Claim Name BLM Number Owner's Interest
Black Lady 1 28654 100%
Black Lady 2 28655 100%
Hidden Valley 1 28656 100%
Hidden Valley 2 28657 100%
Hidden Valley 3 28658 100%
Xxx 1 28982 100%
Xxx 2 28983 100%
Xxx 3 28984 100%
Xxx 4 28985 100%
Xxx 5 28986 100%
Xxx 6 28987 100%
Xxx 7 28988 100%
Xxx 11 28989 100%
Xxx 12 28990 100%
Xxx 13 28991 100%
Xxx 14 28992 100%
Xxx 15 28993 100%
Xxx 16 28994 100%
Xxx 17 28995 100%
Xxx 18 28996 100%
Xxx 25 28997 100%
Xxx 26 28998 100%
A-1
Claim Name BLM Number Owner's Interest
RL 21 105337 100%
RL 23 105339 100%
RL 40 105358 100%
RL 42 105360 100%
RL 43 105361 100%
RL 44 105362 100%
RL 45 105363 100%
RL 58 105376 100%
RL 60 105378 100%
RL 61 105379 100%
Spec 10 28969 100%
Spec 11 28970 100%
Spec 12 28971 100%
Spec 13 28972 100%
Spec 23 28973 100%
Spec 24 28974 100%
Spec 25 28975 100%
Spec 26 28976 100%
Spec 27 28977 100%
Spec 28 28978 100%
Spec 29 28979 100%
Spec 30 28980 100%
Spec 34 28981 100%
Tip Top 1 28662 100%
CNTL #1 100371 100%
CNTL #2 100372 100%
CNTL #20 100390 100%
PART II: Z Group
-------
Claim Name BLM Number Owner's Interest
Z-14 111509 100%
Z-15 111510 100%
Z-16 111511 100%
Z-17 111512 100%
Z-21 A 124313 100%
Z-22 124314 100%
Z-22 A 124315 100%
Z-23 111517 100%
Z-25 111519 100%
Z-27 111521 100%
Z-28 111522 100%
A-2
Claim Name BLM Number Owner's Interest
Z-29 111523 100%
Z-30 111524 100%
Z-31 111525 100%
Z-32 111526 100%
Z-33 111527 100%
Z-34 111528 100%
A-3
EXHIBIT B
TO
AMENDMENT
TO
FRIDAY OPTION AGREEMENT
SCHEDULED PAYMENTS
Amount Due to Arctic Fox on execution of this amendment $ 17,640.00
Balance Remaining After Payment of Amount Due on execution
Of this Amendment $159,000.00
B-1
