EXHIBIT 10.20
CONSULTING AGREEMENT
THIS AGREEMENT is made as of the 1st day of August, 2006.
BETWEEN:
XTRA-GOLD RESOURCES CORP., a company incorporated under the
laws of the State of Nevada, having a head office at
0 Xxxxxxxx Xxxxxx Xxxxxxx XX X0X 0X0 Xxxxxx
(hereinafter referred to as "XTRA-GOLD")
OF THE FIRST PART
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X.X. MINING LTD., a company incorporated under the laws of the
Province of Nova Scotia, having a head office at
000 Xxxxxx Xxxx Xxxxxxxxxx XX X0X 0X0 Xxxxxx
(hereinafter referred to as "JDM")
OF THE SECOND PART
WHEREAS JDM possesses the requisite knowledge and experience in
connection with the precious metals industry, mineral exploration and
production, in particular, the ability to provide senior management services to
a mining company;
AND WHEREAS Xtra-Gold wishes to engage JDM on a management consulting
basis with a view to JDM providing certain project managerial consulting
services to Xtra-Gold and/or its Ghanaian subsidiaries for their Kwabeng and
Pameng concessions (collectively, the "CONCESSIONS") located in the Republic of
Ghana;
AND WHEREAS Xxxx Xxxxxxx Xxxxx ("XXXXX") is the sole shareholder,
officer and director of JDM;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
sum of Ten ($10.00) Dollars, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto and other good and valuable consideration,
the parties hereto agree as follows:
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1. SERVICES TO BE PROVIDED
(a) JDM shall provide project managerial consulting services (the
"SERVICES") as may be required by Xtra-Gold from time to time,
in particular, by providing the consulting services of Xxxxx
as Project Manager for the Concessions; and
(b) The scope of the Services will be primarily of a consulting
nature, wherein JDM will provide the Services as set out in
Schedule "A" annexed hereto.
2. COMPENSATION
(a) JDM shall be paid a monthly consulting fee as follows:
(i) Five Hundred United States Dollars (U.S.$500) per
diem in connection with the Services when rendered in
the Republic of Ghana;
(ii) Three Hundred and Fifty United States Dollars
(U.S.$350) per diem in connection with the Services
when rendered outside of Ghana;
(collectively, hereinafter referred to as the
"FEES");
(b) in the event that JDM anticipates the subsequent month's Fees
will exceed an aggregate of U.S.$14,000, JDM agrees to provide
one week's advance notice of such event to the Chairman and
Chief Executive Officer ("CEO") of Xtra-Gold for purposes of
budget adjustment; and
(c) the Fees shall be paid to JDM in a manner to be agreed to
between the Parties.
4. INITIAL TERM
(a) The term of the Services shall initially be for six months
(the "TERM") commencing from the date of this Agreement; and
(b) Subsequent renewals of the Term shall be agreed upon in
writing between the parties no less than 30 days prior to the
expiration of the Term and shall be made on the same terms and
conditions as set out in this Agreement.
5. PLACE OF WORK
JDM shall render the Services primarily in the Republic of Ghana or at
such other place or places as may be reasonably requested by Xtra-Gold from time
to time as deemed appropriate for the performance of its Services.
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6. WORK SCHEDULE
In order to fulfill the spirit and purpose of this Agreement, JDM shall
provide its Services as follows:
(a) seven days per week until the Bulk Test has been completed
(anticipated timeline is December 31, 2006), except that every
other week, JDM shall only be required to provide its Services
for five days;
(b) following the completion of the Bulk Test, eight weeks
in-country (Ghana) and two weeks out of country until
production commences at the Kwabeng concession;
(c) upon the Kwabeng concession being in production for a period
of three months, six weeks in-country (Ghana) and two weeks
out of country;
(d) when out of country, JDM is to remain on-call to Xtra-Gold, as
may be required from time to time; and
(e) the foregoing work schedule may be changed from time to time
on mutual agreement between the Parties to this Agreement.
7. REIMBURSEMENT FOR EXPENSES INCURRED BY JDM ON BEHALF OF XTRA-GOLD
(a) JDM will submit an expense report for expenses actually and
properly incurred on no less than a monthly basis. Xtra-Gold
shall reimburse JDM for approved reasonable expenses within 10
business days following receipt of JDM's itemized monthly
expense report. JDM agrees to provide proper receipts for
expenses incurred and submitted, where possible; and the time
of submission of every expense report; and
(b) Xtra-Gold agrees to provide JDM with a start-up budget of
U.S.$5,000 to be used for work-related expenses.
8. BENEFITS AND ALLOWANCES
(a) Xtra-Gold agrees to pay business class airfare for JDM from
the commencement of the Services when Xxxxx is required to
travel on behalf of Xtra-Gold;
(b) Xtra-Gold agrees to pay for an expatriate health insurance
policy for Xxxxx that will provide for emergency medical
evacuation coverage; and
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(c) Xtra-Gold agrees to provide a driver for use by Xxxxx until
such time as Xxxxx obtains a valid driver's license to
transport himself while working in Ghana.
9. REPRESENTATIONS OF JDM AND XXXXX
(a) JDM and each of its officers and directors (hereinafter
collectively referred to as "JDM") represent that they have
the requisite qualifications, experience and capabilities to
perform the Services to a standard of care, skill and
diligence acceptable within the mining industry and that the
Services will be provided in accordance with all federal,
provincial and local laws.
(b) JDM (including its officers and directors) further represents
that none of the following events has occurred during the
previous 10 years:
(i) there has been no bankruptcy filed by or against JDM
or any business of which JDM was a general partner or
executive officer at the time the petition was filed
or within two (2) years prior to the filing;
(ii) JDM and/or its officers and directors have not been
convicted in a criminal proceeding or are the subject
of a pending criminal proceeding (except traffic
violations) for which a pardon has not been granted;
(iii) JDM is not and has not been subject to any order,
judgment or decree not subsequently reversed,
suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining,
barring, suspending or otherwise limiting the
involvement in any type of business, securities or
banking activities; and
(iv) JDM has not been found by a court of competent
jurisdiction (in a civil action), the SEC or the CFTC
of violating a federal or state securities or
commodities law, and the judgment has not been
reversed, vacated or suspended.
10. INDEPENDENT CONSULTANT
(a) JDM shall not be construed to be an employee of Xtra-Gold and
at all times shall remain an independent consultant; and
(b) JDM shall not be entitled to nor shall receive any benefit
normally provided to Xtra-Gold's employees including, but not
limited to, vacation pay, disability and other insurance
coverage, not otherwise referred to herein, and sick pay or
retirement funds.
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11. TOOLS OF TRADE AND SUPPLIES
JDM shall provide all equipment, tools, books and materials used in its
Services and JDM shall be solely responsible for procuring, paying for and
maintaining any computer equipment, software, tools or supplies necessary or
appropriate for the performance of its Services, unless otherwise agreed to in
advance by Xtra-Gold.
12. EXCLUSIVITY OF JDM
JDM agrees to provide its Services exclusively to Xtra-Gold during the
Initial Term; provided however, should JDM be required to provide its services
to an unrelated party, it must notify Xtra-Gold within seven days of such event
and obtain Xtra-Gold's written consent; provided however, that JDM shall be
prohibited from direct competition against Xtra where JDM may provide similar
Services to other persons, companies or entities who are engaged in a business
operating in Ghana in competition with Xtra during the term of this Agreement
third party mining companies.
13. IMMEDIATE TARGETS
JDM will use its best efforts to:
(a) commence the Bulk Test at the Kwabeng concession by December
1, 2006;
(b) complete the Bulk Test by February 1, 2007;
(c) complete the Full Scale Mine Plan by February 15, 2007;
(d) commence full scale plant production at the Kwabeng concession
by March 1, 2007;
(e) achieve cash cost below $300 per ounce by September 1, 2007.
14. PROGRESS REPORTS
JDM shall provide written progress reports to Xtra-Gold within two
weeks following the end of each month during the Term of this Agreement and any
subsequent renewal thereof.
15. CONFIDENTIALITY
(a) During the term of this Agreement and thereafter, in
perpetuity, JDM shall maintain all matters involving Xtra-Gold
and its subsidiaries and the Services performed by JDM in the
strictest of confidence, except insofar as shall be required
in order for JDM to perform the Services hereunder or as may
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be authorized in writing by Xtra-Gold, or as may come into the
public domain through sources beyond the control of JDM or
Xtra-Gold or as may be required by law; and
(b) Upon termination of this Agreement, JDM warrants that it shall
deliver to Xtra forthwith any and all materials, work product
and information relating to the Services including, but not
limited to, any and all files, agreements, reports,
correspondence, business plans, technical and financial data
in its possession and belonging to Xtra-Gold.
16. INDEMNIFICATION
In the event of any legal action commenced by a corporation or an
individual with respect to JDM's Services under this Agreement, Xtra-Gold hereby
agrees to indemnify and hold harmless JDM from and against all such actions,
claims, liabilities, costs and expenses and the legal fees and disbursements in
connection therewith shall be borne by Xtra-Gold; provided that the
indemnification provided under this paragraph shall not be available to the
extent of JDM's gross negligence, willful misconduct, violation of applicable
statute, rule or regulation, or under circumstances where applicable law does
not permit indemnification.
17. OWNERSHIP OF INFORMATION
Any and all information produced as a result of the Services provided
by JDM or any documentation deriving therefrom shall remain the exclusive
property of Xtra-Gold and JDM shall have no claim or interest therein.
18. ASSIGNMENT
JDM may not assign its interests under this Agreement or any of the
Services to be provided by JDM without having first obtained the consent in
writing of Xtra-Gold. This Agreement may be assigned by Xtra-Gold.
19. TERMINATION
(a) Except as provided in paragraph 9(c) of this Agreement, either
JDM or Xtra-Gold may terminate this Agreement without reason
or cause by first providing the other party with two (2)
months' written notice in advance of such termination or, in
the case of termination by Xtra, at its sole option, by
payment of two (2) months' Fees.
(b) Xtra-Gold may terminate this Agreement, without providing JDM
with any notice of termination, in the event of any one of the
following causes:
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(i) JDM or any officer or director of JDM is convicted of
a crime in the nature of an indictable offence, under
the Criminal Code of Canada or such other relevant
jurisdiction, for which a pardon has not been
granted;
(ii) JDM or any officer or director of JDM commits fraud
or similar offences against Xtra-Gold;
(iii) JDM or any officer or director of JDM commits willful
misconduct; or
(iv) JDM or any officer or director of JDM breaches the
representations contained in paragraph 9 above or,
during the Term, is involved in or subject to an
event listed in paragraph 9(b) above; or
(v) any other act or omission which would amount to cause
for termination of this Agreement at law.
(c) JDM agrees to maintain all matters herein in confidence, in
perpetuity, unless disclosure of such matters is required
pursuant to a court of law.
20. ADDRESS FOR DELIVERY OR NOTICE
Each notice under this Agreement shall be made in writing and may be
sent by facsimile or electronic formatted transmission (e-mail) or delivered to
the address for such Party as noted hereunder:
(a) if to Xtra-Gold:
(i) by regular mail or courier to:
0 Xxxxxxxx Xxxxxx
Xxxxxxx XX X0X 0X0 Xxxxxx
(ii) by fax transmission to:
(000) 000-0000
(iii) by e-mail transmission to:
xxxxxxxxxxxx@xxxxxx.xxx
(b) if to JDM:
(i) by regular mail or courier to:
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000 Xxxxxx Xxxx
Xxxxxxxxxx XX X0X 0X0 Xxxxxx
(ii) by fax to:
(000) 000-0000
(iii) by e-mail transmission to:
xxx@0x.xxx
Either Party may change its mailing address, e-mail address or
facsimile number by notifying the other Party in writing.
21. SEVERABILITY AND CONSTRUCTION OF AGREEMENT
Each section, paragraph, term and provision of this Agreement and any
portion thereof shall be considered severable and, if for any reason whatsoever,
any portion of this Agreement is determined to be invalid, contrary to or in
conflict with any applicable present or future law, rule or regulation by a
final ruling issued by a court of jurisdiction, agency or tribunal with valid
jurisdiction, then that ruling shall not impair the operation of any other
portions of this Agreement as may remain otherwise intelligible (all of which
shall remain binding on the Parties hereto and continue to be of full force and
effect as of the date upon which the ruling becomes final).
22. CONSENTS AND WAIVERS
No consent or waiver by either Party in respect of any breach of a
provision of this Agreement shall be deemed to be a consent or waiver of any
other breach of this Agreement.
23. ENUREMENT
This Agreement shall enure to the benefit of and be binding upon the
Parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns.
24. ENTIRE AGREEMENT
This document contains the entire agreement made between the Parties
hereto as of the date of this Agreement and no representations, inducements,
promises or agreements not embodied or referenced herein shall be of any force
or effect, unless the same are set forth in writing and signed by the Parties
hereto.
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25. AMENDMENTS TO AGREEMENT
This Agreement may be amended from time to time as agreed to in writing
between the Parties. Any amending agreement together with the unamended sections
of this Agreement shall then constitute the entire agreement between the
Parties.
26. APPLICABLE LAW
This Agreement will be governed by the laws prevailing in the State of
Nevada.
27. COUNTERPARTS
This Agreement may be signed by the Parties hereto in counterpart, each
of which counterpart when so signed shall be deemed to be an original, and such
counterparts together shall constitute one and the same instrument and
notwithstanding the date of execution will be deemed to bear the execution date
as set forth in this Agreement. This Agreement may be executed by facsimile and
such facsimile or facsimiles shall be deemed to represent the original
Agreement.
28. NO PARTNERSHIP OR AGENCY
The Parties hereto have not created a partnership and nothing contained
in this Agreement shall in any manner whatsoever constitute any Party as the
partner, agent or legal representative of the other Party, nor create any
fiduciary relationship between them for any purpose whatsoever. No Party shall
have any authority to act for or assume any obligation or responsibility on
behalf of the other Party, except as may be from time to time agreed to in
writing between the Parties or as otherwise expressly provided.
IN WITNESS WHEREOF the Parties hereto have executed this Agreement as
of the date first above written.
SIGNED, SEALED AND DELIVERED ) XTRA-GOLD RESOURCES CORP.
in the presence of )
)
) Per: /s/ Xxxxxxx Xxxxxx (Xxx) XxXxxxxxx
) Xxxxxxx Xxxxxx (Xxx) XxXxxxxxx
) Chairman and ChiefExecutive Officer
)
)
) X.X. MINING LTD.
)
)
) Per: /s/ Xxxx Xxxxxxx Xxxxx
) Xxxx Xxxxxxx Xxxxx
) President
SCHEDULE "A"
SCOPE OF SERVICES TO BE PROVIDED BY X.X. MINING LTD.
TO XTRA-GOLD RESOURCES CORP.
The scope of the Services shall include but not be limited to:
--> completing the Bulk Test for the Kwabeng concession;
--> initiating, running and completing the Bulk Test;
--> summarizing key test learning from the Bulk Test for incorporation into
the Full Scale Mine Plan in connection with full scale mining
operations at the Kwabeng concession;
--> preparing and delivering the Full Scale Mine Plan for review and
approval by the Board by February 15, 2007;
--> finding a suitable replacement Mine, Project or General Manager
acceptable to Xtra-Gold and transitioning the replacement for three
months or, alternatively, continuing to provide project managerial
consulting services pursuant to a mutual agreement to be entered into
between JDM and Xtra-Gold;
--> ensuring that the Kwabeng concession enters profitable production in a
timely fashion by, among other things, conducting all necessary
research, engineering work and contracting required qualified subagents
or subcontractors as may be required from time to time;
--> overseeing and being responsible for all mining and operational
personnel; and
--> with respect to any of the above Services, JDM shall liaise from time
to time with the relevant government authorities in connection with
obtaining any permits, licenses, leases or other approval documentation
that may be required in order to carry out the foregoing.
SPECIFIC ACCOUNTABILITY
JDM shall report directly to the CEO. The CEO will review the performance of JDM
in connection with each of the above-noted responsibilities (the
"RESPONSIBILITIES"), which may be amended from time to time, and will record and
discuss his assessment with the Board and JDM within thirty (30) days of the
commencement of full scale placer mine production at the Kwabeng concession, but
in no event later than six (6) months following the execution of the consulting
agreement dated August 1, 2006 of which this Schedule "A" forms a part thereof.
Thereafter, the CEO and Board will review the performance of JDM on a quarterly
in connection with the Responsibilities and will record and discuss their
assessment with JDM at such time.
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PERFORMANCE
Above-average timely performance is expected in all areas of responsibility and
considered compensation is provided within the position's compensation and stock
option base. The success of Xtra-Gold and its ability to thrive and prosper in a
competitive environment, together with the successful performance by JDM will be
recognized in a reward for initiative and the Board may elect to award
additional compensation to be determined, based on the achievement of milestones
as may be established by Xtra-Gold from time to time.
