EXHIBIT 4.1
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TLC VENTURES CORP.
000 - 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
February 13, 2004
BY ELECTRONIC MAIL
Rubicon Minerals Corporation
000 - 0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX
X0X 0X0
ATTENTION: XXXXX XXXXXXX, PRESIDENT AND CEO
XXXX XXXX, VICE PRESIDENT, EXPLORATION
Dear Sirs:
POINT LEAMINGTON MINING LEASE IN NEWFOUNDLAND
---------------------------------------------
We are writing to set forth the terms and conditions of the agreement among TLC
Ventures Corp. (the "Company") and Rubicon Minerals Corporation ("Rubicon") in
respect of the Point Leamington property in Newfoundland (the "Property") which
is more particularly described on Schedule "A". For valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, we agree as follows:
1. Rubicon grants to the Company the exclusive and irrevocable
option to acquire an undivided 100% interest in the Property,
free and clear of all liens, charges, encumbrances, claims or
rights of others by:
(a) the Company paying to Rubicon a total of $250,000
(the "Cash Consideration") as follows:
(i) subject to the TSX Venture Exchange (the
"Exchange") providing the Company with
written notice of its acceptance of this
Agreement (the "Acceptance Date" ), $125,000
on the Acceptance Date;
(ii) a further $50,000 on or before the first
anniversary of the Acceptance Date; and
(iii) a further $75,000 on or before the second
anniversary of the Acceptance Date;
(b) subject to the Exchange providing the Company with
written notice of its acceptance of this Agreement,
the Company will issue Rubicon a total of 300,000
fully paid and non-.. assessable common shares (the
"Shares) without par value in the capital of the
Company (the "Share Consideration") as follows:
(i) 150,000 Shares will be issued on the
Acceptance Date;
(ii) a further 75,000 Shares will be issued on or
before the first anniversary of the
Acceptance Date; and
February 13, 2004
Page 2
(iii) a further 75,000 Shares will be issued on or
before the second anniversary 0 f the
Acceptance Date.
At the sole election of the Company, the Cash Consideration
and Share Consideration schedules as outlined in (a) and (b)
above may be accelerated with the outlined tranches paid in
advance. In this event, and in any event, once the Company has
paid Rubicon $250,000 and 300,000 Shares, the Company will
have fully paid for the undivided 100% interest in the
Property.
2. In the event that the Company is unable to fulfill any of the
requirements set out in paragraph 1 above within the time
limits specified therein due to an act (the "Event) beyond its
reasonable control (Force Majeure only), all time limits
imposed by this Agreement will be extended by a period of time
equal to the period of delay resulting from such Event to a
maximum of 120 days.
3. Rubicon reserves unto itself the Right of First Refusal on the
purchase of Noranda's 1.5% net smelter returns royalty (the
"NSR") in respect of the Property (Schedule B) and the option
to purchase the additional 0.5% NSR held by MFC Bancorp
(Schedule C).
4. Except for firm commitments outlined above, this Agreement
provides the Company with an option only and all payments of
Cash Consideration, issuances of Share Consideration and any
other cash payments are optional to the Company in its sole
discretion and nothing in this Agreement obligates the Company
to make any payments of Cash Consideration, issue any of the
Shares as Share Consideration or make any other cash payments.
If the Company does not make any payments of the Cash
Consideration or issue any of the Share Consideration set
forth in paragraph 1 when due (as such time limits may be
extended under the term of this Agreement), then the sole
result will be that the Company will forfeit all of its rights
under this Agreement.
5. If, prior to the Company paying to Rubicon $250,000 and
300,000 Shares, the Company sells a 100% interest in the
Property to an arms-length third party then Rubicon shall
receive 50% of the gross sale proceeds of such sale less the
total Cash Consideration and Share Consideration paid to
Rubicon pursuant to this Agreement prior to the date of sale.
The cash equivalent value of the Share Consideration shall be
deemed to be the number of Shares issued to Rubicon under this
Agreement prior to the date of sale multiplied by the dollar
value per Share calculated as the average of the closing price
of the Shares on the TSX Venture Exchange or its primary
trading market for the 10 trading days prior to the
announcement of the sale of the Property.
6. There shall be a 1.5km mutual area of interest from the border
of the Property (the "AOI") with respect to unstaked and
staked claims. For greater certainty, should the Company or
Rubicon currently hold an interest in staked claims or mining
leases within the AOI, or, should the Company or Rubicon
acquire by staking or by application additional claims or
mining leases within the AOI, these new properties will form
part of this Agreement and be subject to the terms and
conditions as set out in this Agreement.
7. Upon the payment of $125,000 and the issuance of 150,000
Shares, Rubicon will deliver to the Company transfer documents
in recordable form sufficient to transfer to the Company an
undivided 100% interest in the Property free and clear of all
liens, charges, encumbrances, claims or rights of others
except for the NSR provided for in paragraph 3 and the Company
is entitled to record such transfer documents in the
appropriate office in the jurisdiction in which the Property
is located but will hold such interest in the Property
pursuant to the terms of this Agreement.
8. The Company will have possession of the Property and be the
operator. Provided it has paid to the Cash Consideration and
the Share Consideration for any period, the Company shall pay
all costs associated with maintaining the Property in good
standing including the mining lease payment of approximately
$21,000.
February 13, 2004
Page 3
9. Rubicon acknowledges that any Shares to be issued under this
Agreement will be issued under exemptions from the
registration and prospectus requirements of the Securities Act
(British Columbia) (the "Act") and accordingly, the resale of
such Shares will be subject to restrictions imposed by the Act
and the share certificates representing the Shares to be
issued under this Agreement may bear a legend in respect of
such resale restrictions.
10. Whenever Rubicon proposes to sell any or all of the Shares
received as Share Consideration to a third party, other than
an affiliate, whether through the facilities of the TSX
Venture Exchange or via private sale, Rubicon shall first
offer to the Company the right to purchase such Shares on the
terms and conditions set out in a written notice delivered to
the Company. The Company or its nominee will have 10 days from
the receipt of the written notice to exercise its right to
purchase the Shares. If the Company or its nominee does not
purchase the Shares, Rubicon may sell the Shares to a third
party on the same terms and conditions as were set out in the
written notice.
11. Rubicon represents and warrants to the Company that:
(a) Rubicon is the beneficial and recorded owner of an
undivided 100% right, title and interest in and to
the Property, free and clear of any liens, charges,
encumbrances or surface rights restrictions
whatsoever;
(b) Rubicon has the full right, power and authority to
enter into this Agreement and carry out all the terms
hereof, and the entering into of this Agreement does
not conflict with any agreement or other commitment
to which Rubicon is a party;
(c) there are no outstanding agreements or options to
acquire any interest in the Property or any part
thereof of any interest therein other than the NSR
referred to in paragraph 3;
(d) all of the claims comprising the Property are valid
and properly located and staked and recorded under
the laws of Newfoundland;
(e) all of the claims comprising the Property are
subsisting and assignable and in good standing
pursuant to all applicable laws and all taxes,
charges and assessments with respect thereto have
been paid in full as of the date hereof;
(f) Rubicon has not caused, permitted or allowed any
contaminants, pollutants, wastes or toxic substances
(collectively, the "Hazardous Substances") to be
released, placed, escaped, leached or disposed of on,
into, under or through the Property or nearby areas
and no Hazardous Substances or underground storage
tanks are contained, harboured or otherwise present
in or upon the Property or nearby areas;
(g) there are no actions, suits, investigations or
proceedings before any court, arbitrator,
administrative agency or other tribunal or
governmental authority, whether current, pending or
threatened, which directly or indirectly relate to or
affect the Property nor is Rubicon aware of any facts
which would suggest that the same might be initiated
or threatened;
(h) the execution of this Agreement and the performance
of its terms have been duly authorized by all
necessary actions;
(i) there are no additional fees, annual assessment
commitments or site work required to maintain the
Property in good standing other than the annual
mining lease payment totalling approximately $21,000;
February 13, 2004
Page 4
(j) there are no `Rights of First Refusal" with respect
to Rubicon selling its ownership interest in the
Property;
(k) Rubicon does not own or control an interest in any
claims or mining leases located within the AOI; and
(1) on or before the Acceptance Date, Rubicon will
deliver to the Company all reports, drill logs, assay
information, metallurgical data and digital files it
has in its possession with respect to the Property.
12. The Company represents and warrants to Rubicon that:
(a) the Company is a valid and subsisting corporation
incorporated and in good standing under the laws of
the Province of British Columbia;
(b) the Company is duly registered and licensed to carry
on business in the jurisdictions in which it carries
on business or owns property where required under the
laws of that jurisdiction;
(c) the Company has conducted and is conducting its
business in material compliance with all applicable
laws, rules and regulations and all other
requirements of any governmental or regulatory bodies
applicable to the Company or its assets;
(d) the Company is not a party to any actions, suits,
proceedings or inquiries, at law or in equity or
before or by any federal, provincial, municipal or
other governmental department, commission, board,
bureau, agency or instrumentality which could
materially affect its business, operations or
financial condition, and to its knowledge no such
actions, suits or proceedings are contemplated or
have been threatened;
(e) the Company has all requisite power and authority to
carry out its obligations under this Agreement;
(f) the execution and delivery of this Agreement, the
performance by the Company of its obligations
hereunder, the consummation of the transactions
contemplated in this Agreement and the allotment and
issuance of the Share Consideration does not and will
not conflict with and does not and will not result in
a breach of any of the terms, conditions, or
provisions of, or constitute a default under,
(whether after notice or lapse of time or both):
(i) the constating documents of the Company,
(ii) any statute, rule or regulation applicable
to the Company,
(iii) any judgement, decree or order binding on
the Company or any interests or assets of
the Company, or
(iv) any agreement, document or instrument to
which the Company is a party or by which its
interests or assets are affected;
(g) the Company will reserve or set aside sufficient
shares in its treasury to issue the Share
Consideration and upon their issuance the Share
Consideration will be duly and validly allotted and
issued as fully paid and non-assessable. The Share
Consideration will be subject to a minimum 4 month
hold period from date of issuance or such additional
restrictions as dictated by the TSX Venture Exchange;
February 13, 2004
Page 5
(h) the authorized capital of the Issuer consists of
25,000,000 common shares, of which 13,709,000 common
shares are duly and validly issued as fully-paid and
non-assessable;
(i) there are no securities convertible or exchangeable
into common shares of the Company, nor does any
person have or hold any agreement (other than this
Agreement), right, warrant, option, privilege
(whether pre-emptive or contractual) being or capable
of becoming an agreement, warrant, option or right
for the purchase of any unissued shares in the
capital of the Company except for incentive stock
options to purchase a total of 1,055,000 common
shares at an exercise price of$0.25 per share;
(j) the Company is a "reporting issuer" in the
jurisdictions of British Columbia and Alberta and is
not in default of any requirements of the Securities
Act (British Columbia) and the Securities Act
(Alberta) (collectively the "Acts") or of any of the
by-laws, rules or policies of the Exchange;
(k) at the Closing, every consent, approval,
authorization, order or agreement from or with the
Exchange that is required for the transactions herein
contemplated to occur at Closing to be valid will
have been obtained and will be in effect;
(1) the Company will use its best efforts to:
(i) maintain its status as a reporting issuer
under the Acts,
(ii) comply with the requirements of and not be
in default under the provisions of the Acts
and the rules and policies of the Exchange
and maintain the listing of the Shares on
the Exchange;
(o) it is the Company's responsibility to ensure any
related party costs including, without limitation,
third party reports, if required, are at the sole
cost of the Company. Any costs required for third
party waivers or assignments of the Agreement or the
NSR's will be at the Company's cost; and
(p) the Company does not currently own or control an
interest in any claims or mining leases within the
AOI.
13. This Agreement may be terminated by the Company at any time by
30 days notice in writing to Rubicon. If the Company elects to
terminate this Agreement, the Company will transfer the
Property back to Rubicon in good standing and will deliver to
Rubicon all reports obtained or prepared for or by the Company
in respect of the Property. Failure to make payments and
failure to remedy default within 60 days as notified in
writing from Rubicon will cause the Property to irrevocably be
transferred back to Rubicon.
14. This Agreement is subject to:
(a) the acceptance of the Exchange; and
(b) the approval of the Board of Directors of the Company.
15. The issuance of the Shares described in paragraph 1(b) are
subject to such issuances being in compliance with all
applicable laws and rules and policies of applicable
regulatory bodies.
16. This Agreement will constitute a binding agreement among the
parties.
February 13, 2004
Page 6
17. This Agreement may be executed in as many counterparts as may
be necessary and by facsimile, each of such counterparts so
executed wi1l be deemed to be an original and such
counterparts together will constitute one and the same
instrument and notwithstanding the date of execution will be
deemed to bear the date as of the day and year first above
written.
18. This Agreement will be interpreted in accordance with the laws
of the Province of British Columbia and will enure to the
benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns.
If the foregoing is acceptable to you, please indicate your agreement by signing
and returning this letter.
Yours very truly,
TLC Ventures Corp.
By: /s/
-----------------------------
Xx Xxxxxxxx, President
The foregoing is accepted and agreed to this 6th day of February 2004 by Rubicon
Minerals Corporation:
----------------------------
Authorized Signatory
SCHEDULE" A"
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POINT LEAMINGTON MINING LEASE DETAILS
-------------------------------------
PROPERTY NAME MINING DIVISION MINING LEASE
------------- --------------- ------------
Green Bay, NF 136 (2655)
Point Leamington
SCHEDULE "B"
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NORANDA'S NSR
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[Letterhead of Rubicon Minerals Corporation]
XXX XXXXXXXXX
Xxx 00, 0000
XXXXXXX INC.
0000 Xxxx Xxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 227
Dear Sirs:
RE: POINT LEAMINGTON PROPERTY, NEWFOUNDLAND
Further to the letter agreement dated August 26, 1998 between Rubicon Minerals
Corporation ("Rubicon") and Noranda Mining and Exploration Inc. (the
"Optionor"), this letter will serve to confirm and document our formal agreement
(the "Agreement") with respect to the mineral interests described in Schedule
"A" attached hereto. The mineral interests described therein are hereinafter
referred to as the "Property".
The terms of our Agreement are as follows:
1. The Optionor represents and warrants to Rubicon that:
(a) the Optionor has the sole and exclusive right to a 75%
undivided right, title and interest in the Property and,
without limiting the generality of the foregoing,
(i) pursuant to an agreement (the "Nalco Agreement") made
as of March 1, 1975 and entered into on April 18,
1977 between Newfoundland and Labrador Corporation
Limited ("Nalco") and the Optionor, the Optionor
acquired a 75% undivided ownership interest in the
Jointly Owned Assets (as such term was defined in the
Nalco Agreement);
(ii) pursuant to a letter agreement dated November 25,
1988 between Nalco and the Optionor, the Optionor
consented to the transfer of a portion of Nalco's
interest in the property described in Schedule "A" to
the Nalco Agreement (the "Point Leamington Property")
to two companies in which Nalcap Holdings Inc. either
directly or indirectly owned significant
shareholdings; and
(iii) pursuant to an amendment agreement (the "Amendment
Agreement") dated June 27, 1989 between Nalco, the
Optionor, Xxxxxxx Resources Ltd. ("Xxxxxxx") and
Dominion Jubilee Corporation Limited ("Jubilee"), the
Optionor consented to an assignment of a partial
interest in the Point Leamington Property and the
Frozen Ocean Property (as such ____ was defined in
the Amendment Agreement) by Nalco to each of Xxxxxxx
and Jubilee;
(iv) pursuant to the Declaration of Trust dated August 21,
1990, the Optionor agreed to hold all mining leases
or licences acquired with respect to the Property in
trust for Nalco to the extent of Nalco' s interest
therein as determined pursuant to the Nalco Agreement
and the Amendment Agreement;
(b) the Property is properly and accurately described in Schedule
"A" attached hereto;
(c) the mining lease comprising the Property (the "Mining Lease")
has been properly registered by the mineral claims recorder
under the Mineral Act (Newfoundland) (the "Mineral Act");
(d) the Optionor has the right to carry on business in the
Province of Newfoundland and Labrador and has the full right
and authority to enter into this Agreement;
(e) except for the agreement (the "MFC Agreement") dated as of
September 2, 1998 between Rubicon and MFC Merchant Bank S.A.
("MFC ") and the agreement between Rubicon and LA Telco
International Inc. ("LA Telco ") with respect to the remaining
25% interest in the Property, to the best of the knowledge of
the Optionor, there are no adverse interests or other
agreements affecting the Optionor's 75% undivided right, title
and interest in the Property, including, but not limited to,
with respect to the payment of any royalties or other payments
in the nature of rent or royalties relating to the Property or
production therefrom, and no consents are required from MFC,
LA Telco or any other third party in order for the Optionor to
enter into this Agreement;
(f) as of the date hereof,
(i) the Mining Lease is in good standing;
(ii) all terms, conditions and obligations contained in
the Mining Lease to be discharged, satisfied or met
to the date hereof, have been discharged, satisfied
or met by the Optionor or its predecessors in title,
or, to the best of the knowledge of each of the
Optionor, MFC, LATelco or its predecessors in title;
(iii) the Mining Lease has not been amended or modified;
(iv) the current expiry date of the Mining Lease is August
29, 2015; and
(v) the Optionor has made, and the Newfoundland
Government has received and issued a receipt for, the
Mining Lease payment of $21,032.80 to the
Newfoundland Government which was due on August 31,
1998 in order to keep the Property in good standing.
(g) to the best of the knowledge of the Optionor, except as
described herein, the Property is free and clear of all liens,
charges and encumbrances, recorded or unrecorded;
(h) to the best of the knowledge of the Optionor, there are no
outstanding or pending actions, suits or claims affecting all
or any part of the Property; and
(i) the Optionor is not a non-resident within the meaning of
Section 116 of the Income Tax Act (Canada).
The Optionor acknowledges and agrees that Rubicon is entering into this
Agreement relying upon the representations and warranties made to Rubicon herein
and the correctness of each such representation and warranty is a condition upon
which Rubicon is entering into this Agreement, each of which condition may be
waived in whole or in part solely by Rubicon, and all such representations and
warranties shall survive the execution and delivery of this Agreement and the
transactions contemplated hereby and the Optionor shall save and hold Rubicon
harmless from all loss, damage, costs, actions or suits arising out of or in
connection with a breach of any representation or warranty contained herein.
2. Rubicon represents and warrants to (and, where applicable, covenants
with) the Optionor that:
(a) Rubicon is a company duly incorporated and validly existing
under the laws of British Columbia and has the corporate power
and authority to own or lease its properties and to carry on
the business now carried on by it;
(b) Rubicon has the full corporate power and authority to enter
into this Agreement and to perform all of its obligations
under this Agreement;
(c) the Rubicon Shares (as defined in subsection 4(b)) will be
duly authorized and validly issued and outstanding as fully
paid and non-assessable shares in the capital of Rubicon as at
the date of issuance thereof, free and clear of all
encumbrances other than restrictions imposed by applicable
securities laws and by the policies of the Vancouver Stock
Exchange (the "VSE"); and
(d) the common shares of Rubicon are listed and posted for trading
on the VSE, and following the issuance thereof as contemplated
by this Agreement, the Rubicon Shares will form part of such
class of common shares listed and posted for trading on the
VSE.
Rubicon acknowledges and agrees that the Optionor is entering into this
Agreement relying upon the representations and warranties made to the Optionor
herein and the correctness of each such representation and warranty is a
condition upon which the Optionor is entering into this Agreement, each of which
condition may be waived in whole or in part solely by the Optionor, and all such
representations and warranties shall survive the execution and delivery of this
Agreement and the transactions contemplated hereby and Rubicon shall save and
hold the Optionor harmless from all loss, damage, costs, actions or suits
arising out of or in connection with a breach of any representation or warranty
contained herein.
3. The Optionor hereby grants to Rubicon the exclusive right and option to
earn the Optionor's 75% undivided right, title and interest in the
Property in accordance with the provisions hereof.
4. To maintain the option granted hereunder in good standing and earn the
Optionor's 75% undivided right, title and interest in the Property,
Rubicon shall:
(a) make a one-time payment (the "Cash Payment") to the Optionor
in the amount of $21,032.80 on or before August 31, 1998
(which Cash Payment was made on August 28, 1998, the receipt
of which is hereby acknowledged by the Optionor), provided
that if the Newfoundland Government does not issue a receipt
for the Mining Lease payment referred to at subclause 1(f)(v),
the Cash Payment shall be refundable to Rubicon forthwith; and
(b) provided the receipt referred to in subsection 4(a) hereof has
been issued for the Mining Lease, issue a total of 100,000
common shares in the capital of Rubicon ("Rubicon Shares") to
the Optionor in five tranches (subject to the approval of the
VSE) in accordance with the following schedule:
(i) 12,500 Rubicon Shares on December 31, 1998 (which
shares have been issued, receipt of which is hereby
acknowledged by the Optionor;
(ii) 12,500 Rubicon Shares on August 31,1999;
(iii) 25,000 Rubicon Shares on August 31,2000;
(iv) 25,000 Rubicon Shares on August 31,2001 and
(v) 25,000 Rubicon Shares on August 31, 2002;
(c) provided that such payments may be accelerated at any time in
the sole discretion of Rubicon. The Rubicon Shares will be
issued pursuant to the exemption set out in subsection
74(2)(18) of the Securities Act (British Columbia) (the
"BCSA") and will be subject to the applicable trading
restrictions contained in the BCSA, and the Rules and
Regulations promulgated pursuant thereto.
5. Once Rubicon has earned the Optionor's 75% undivided right, title and
interest in the Property in accordance with the foregoing subsections
4(a) and (b), the Optionor's only remaining rights under this Agreement
will be to the Net Smelter Returns Royalty ("NSR") set out in Section
11, the Right of First Refusal set out in Section 16, and the indemnity
set out in Section 17.
6. In the event that the authorized capital of Rubicon as constituted on
the date hereof is consolidated into a lesser number of shares or
subdivided into a greater number of shares, the number of Rubicon
Shares required to be issued pursuant to subsection 4(b) hereof shall
be correspondingly decreased, in the case of a consolidation, or
increased, in the case of a subdivision, as applicable. In the event
that Rubicon shall amalgamate or merge with any other company or
companies whether by way of statutory amalgamation, sale of its assets
and undertaking, or otherwise, prior to having issued all of the
Rubicon Shares required to be issued pursuant to subsection 4(b), then
in each such event, the number of Rubicon Shares resulting from such
amalgamation or merger required to be issued to the Optionor pursuant
to subsection 4(b) shall be such number of Rubicon Shares in Rubicon as
would have been acquired by the Optionor pursuant to the amalgamation
or merger had the shares been issued to the Optionor immediately prior
to the date of such amalgamation or merger.
7. With the exception of dispositions of Rubicon Shares related to an
issuer bid or a take-over bid (as such terms are defined in the
Securities Act (Ontario) (the "OSA") for the Rubicon Shares, if the
Optionor wishes to dispose of any of the Rubicon Shares which Rubicon
has issued to the Optionor, the Optionor may only do so after providing
not less than fifteen (15) days' prior written notice to Rubicon which
notice shall contain, if applicable, the proposed sale price, whereupon
Rubicon will have the right, during such fifteen (15) day period, to
find a buyer for the Rubicon Shares proposed to be disposed of by the
Optionor to be purchased by such buyer at prevailing market prices or
at the proposed sale price, whichever is greater. If Rubicon identifies
such a buyer, the Optionor will sell the relevant portion of the
Rubicon Shares to the buyer located by Rubicon. If Rubicon fails to
identify a buyer within such fifteen (15) day period, or if the buyer
identified by Rubicon fails to complete this purchase of the relevant
Rubicon Shares within five business days of the expiry of the.
above-mentioned fifteen (15) day period, the Optionor shall thereafter
be entitled to dispose of the relevant portion of the Rubicon Shares to
such persons and on such terms as it may in its sole discretion
determine.
8. If Rubicon fulfills the requirements (the "Option Requirements ") set
forth in subsections 4(a) and (b), Rubicon shall have exercised the
Option and shall have purchased the Optionor's undivided 75% undivided
right, title and interest in the Property in accordance with the
provisions hereof. On the date on which Rubicon shall have fulfilled
the Option Requirements, the Optionor shall forthwith assign, transfer
and set over to Rubicon all of its right, title and interest in and to
the Property, including, without limitation, its rights in and to the
Mining Lease and shall execute and deliver to Rubicon all such
transfers, assignments, consents and other documents as are necessary
to assign and transfer to Rubicon all of the right, title and interest
of the Optionor in and to the Property.
9. On issuance of the first tranche of Rubicon Shares pursuant to
subclause 4(b)(i) and provided that the Newfoundland Government has
received and issued a receipt for the Mining Lease Payment referred to
at subclause l(f)(v), the Optionor shall, if requested by Rubicon,
execute and deliver transfers of the Property in registrable form to
Rubicon, and Rubicon may record such transfers and hold the Property in
trust for the parties during the currency of this Agreement provided
that, in such event, "reverse" bills of sale (or other acceptable
instruments of transfer) transferring the Property back to the Optionor
will be delivered to a mutually acceptable escrow agent, such
instruments of transfer to be released to the Optionor if the option is
terminated. Each of the parties shall be entitled to record this
Agreement as evidence of its beneficial interest in the Property from
time to time during the currency of this Agreement, and each party
agrees to execute and deliver all necessary documents to facilitate
such recordings from time to time in order to comply with Section 6 of
the Mineral Act.
10. This Agreement may be terminated at any time by Rubicon giving 60 days'
notice to that effect to the Optionor in accordance with this Section
10, provided that prior to termination Rubicon will provide the
Optionor with a report of Rubicon's activities related to the Property
(including one set of copies of assay plans and diamond drill records)
30 days prior to the termination date. All additional share issuances
required to be made pursuant to subclause 4(b) hereof are optional at
the sole discretion of Rubicon. If Rubicon fails to make each of the
share issuances in accordance with the schedule described in subclause
4(b), the Optionor may at any time give thirty business days' notice of
termination to Rubicon and, in such case unless such share issuance is
made within such thirty day period, or if Rubicon gives notice of
termination in accordance with this Section 10, this Agreement shall
terminate and Rubicon shall return the Property free and clear of all
liens and encumbrances which may have arisen and attached to the
Property subsequent to the effective date of this Agreement as a result
of the activities conducted hereunder by Rubicon and Rubicon shall
ensure that the Property will be in good standing for a period of at
least one year following the date of termination. The termination of
this Agreement shall not relieve Rubicon of any obligation or liability
incurred up to the effective date of termination, provided that nothing
in this Agreement shall commit Rubicon to incur any expenditures or
make any share issuances, except for the Cash Payment described in
subsection 4(a).
11. If there is any production from the Property such that any product is
extracted nom ore mined from the Property, a 1.5% Net Smelter Returns
Royalty ("NSR") will be payable from Rubicon to the Optionor in
accordance with the provisions of Schedule "B" attached hereto. The
Optionor acknowledges and agrees that, pursuant to the MFC Agreement
and in . consideration for MFC's interest in the Property, a 0.5% NSR
will be payable from Rubicon to MFC also in accordance with the
provisions of Schedule "B".
12. The Optionor agrees that during the term of this Agreement, prior to
Rubicon having earned its interest in the Property as contemplated by
Xxxxxxx 0, Xxxxxxx shall, subject to Section 14, have the exclusive
right to conduct exploration and development work on the Property,
including, without limitation, the full right to sample, examine,
diamond drill, and develop or mine the Property in such manner as
Rubicon in its sale discretion may deem necessary and proper, provided
that in the event that Rubicon removes or mines and sells any mineral
products derived from the Property during such period, all proceeds
therefrom received by Rubicon (after deduction of any costs incurred by
Rubicon in removing, mining and disposing of such mineral products)
shall be paid to the Optionor. In addition, Rubicon shall have the full
right to erect, bring and install thereon all such buildings,
machinery, equipment and supplies as Rubicon shall deem necessary and
proper. In the event of termination of this Agreement for any reason,
all buildings, plant, equipment, machinery, tools, appliances and
supplies which have been brought on the Property by Rubicon during the
term of this Agreement shall be removed by Rubicon not later than six
(6) months after the termination of this Agreement. Upon termination,
Rubicon shall comply with all reclamation and other environmental
requirements imposed or prescribed by applicable law with respect to
its activities on the Property.
13. Prior to earning its interest in the Property as contemplated by
Section 4, all work done by Rubicon on the Property shall be done in
accordance with good mining practice and in compliance with applicable
laws and regulations.
14. Prior to Rubicon earning its interest in the Property as contemplated
by Section 4, the Optionor and its authorized representatives shall
have reasonable access to the Property at their sole risk and expense
to review work being carried out thereon and also shall have access at
all reasonable times to the records of Rubicon respecting exploration
and development work carried out on the Property and the results
obtained therefrom, provided however, that this shall not unduly
interfere with or disrupt the activities of Rubicon. Rubicon shall
provide the Optionor with quarterly reports indicating the status of
the exploration work being conducted on the Property. The Optionor
agrees that all data and information with respect to the Property
provided to or received by the Optionor shall be treated as
confidential and shall not be disclosed to any other person, except as
required by any regulatory authority having jurisdiction to do so,
without the prior written consent of Rubicon, which consent shall not
be unreasonably withheld.
15. On execution of this Agreement, the Optionor will deliver to Rubicon
copies of all technical and historical data (including interpretive
data) which is in the Optionor's possession relating to the Property
(to the extent that any such data has not already been delivered to
Rubicon). In addition to the foregoing, the Optionor will ensure that
Rubicon has access to all diamond drill core from the Property which
drill core is
either in the Optionor's possession or is in the possession of the
Government of Newfoundland and Labrador pursuant to Sections 6 and 15
of the Mineral Act.
16. (a) In the event that the Property is placed into Commercial
Production, the Optionor shall have a Right of First Refusal
to purchase concentrates produced from the Property. In the
event that Rubicon arranges for the sale of all or part of
concentrates produced from the Property, through a bona fide
offer from an independent third party (the "Proposed Purchaser
") which offer Rubicon desires to accept, Rubicon shall first
offer (the "Offer ") such concentrates in writing to the
Optionor upon terms no less favorable than those offered by
the Proposed Purchaser. The Offer shall specify price, terms,
quantity and conditions of such sale. If, within fifteen (15)
business days of receipt of the Offer, the Optionor informs
Rubicon that it will accept the Offer, Rubicon shall be bound
to sell the concentrates on the terms and conditions of such
Offer, failing which Rubicon will then be able to sell the
concentrates to a third party and will then be under no
obligation to present further offers to the Optionor with
respect to the concentrates specified in the original Offer.
Payment for the concentrates shall be received by Rubicon no
later than specified in the Offer. Failure to pay within the
time specified in the Offer shall render the Offer and the
exercise by the Optionor null and void and Rubicon will then
be under no obligation to present further offers to the
Optionor with respect to the concentrates specified in the
original Offer.
(b) For the purposes of this Section 8, "Commercial Production"
shall mean the commercial operation of the Property, or a
portion thereof, but does not include milling or other
treatment for the purposes of testing or milling or leaching
by a pilot plant during the initial tune-up period of a plant.
Commercial Production will be deemed to have commenced:
(i) if a plant is located on the Property, or a portion
thereof, on the first day of the month following the
first period of 30 consecutive days during which
mineral products or other concentrates from the
Property, or a portion thereof, have been processed
through such plant for not less than 15 days at an
average rate of not less than 66?% of the initial
rated capacity of such plant; or
(ii) if no plant is located on the Property or a portion
thereof, on the first day of the month following the
first period of 30 consecutive days during which are
or other concentrates from the Property, or a portion
thereof, have been shipped from the Property, or a
portion thereof, on a reasonably regular basis for
the purpose of earning revenue.
(c) Rubicon has no obligation to put the Property, or a portion
thereof, into Commercial Production and any decision to place
the Property, or a portion thereof, into Commercial Production
shall be at the sole discretion of Rubicon and this Agreement
shall not be construed as creating an obligation upon Rubicon
to put the Property, or a portion thereof, into Commercial
Production. In the event that the Property, or a portion
thereof, is put into Commercial Production, Rubicon shall be
entitled in its sole discretion to suspend, curtail or
terminate Commercial Production at any time.
17. Rubicon shall indemnify and save harmless the Optionor from any and all
claims arising out of the operations which Rubicon or its agents may
conduct upon the Property from August 28, 1998 to the date of
termination of this Agreement and any and all claims arising with
respect to the remaining 25% interest in the Property, including those
arising as a result of the transfer by to the Optionor to Rubicon of
the Mining Lease as contemplated by Sections 8 and 9 of this Agreement.
The Optionor shall indemnify and save harmless Rubicon from and against
any and all claims arising from or in relation to the Property or
operations or activities carried out upon the Property prior to August
28, 1998 as a result of the Optionor's previous activities on the
Property, including but not limited to liability for environmental
reclamation or rehabilitation that may be required. Notwithstanding the
foregoing, the obligations of the Optionor under this Section 17 shall
terminate on the earlier of:
(a) the date upon which Rubicon exercises the option granted
hereunder and acquires the Optionor's 75% undivided right,
title and interest in the Property;
(b) August 31, 2002; or
(c) the date of termination of this Agreement.
18. (a) Until the date that Rubicon has issued the 100,000 Rubicon
Shares as contemplated by subsection 4(b), neither party
shall, except as permitted in this Section 18, sell or assign
the whole or any part of its rights or interest in the
Property or this Agreement, without the prior written consent
of the other party not to be unreasonably withheld, provided
that it is understood that it shall not be unreasonable for a
party to withhold its consent on the basis that the proposed
purchaser, assignee or transferee lacks sufficient financial
capacity or technical expertise with which to carry out its
obligations hereunder;
(b) nothing in this Section 18 shall prevent:
(i) a sale or assignment by a party of all or any portion
of its rights or interest, in the Property or this
Agreement to an Affiliated Company (as such term is
defined in subsection 1(2) of the OSA), provided that
the Affiliated Company remains as such for a period
of not less than one (1) year after such sale or
assignment, failing which the other party shall have
the right to require that its consent shall be
necessary for such sale or assignment to remain
valid; or
(ii) a party from entering into an amalgamation or
corporate reorganization which will have the effect
in law of the amalgamated or surviving company
possessing all of the property, rights and interests
and being subject to all the debts, liabilities, and
obligations of each amalgamating or predecessor
company;
(c) before the completion of any sale or assignment by a party of
the whole or any part of its rights or interest in the
Property or this Agreement to an Affiliated Company or
otherwise, the purchasing party shall, at the election of the
party not selling, enter into an agreement with the party not
selling on the same terms and conditions as set out in this
Agreement; and
(d) for greater certainty, once Rubicon has issued the 100,000
Rubicon Shares in its capital as contemplated by subsection
4(b) hereof, Rubicon shall have a right of first refusal with
respect to the Optionor's 1.5% NSR. In the event that the
Optionor elects to assign or transfer all or a part of its
interest with respect to its 1.5% NSR, the Optionor shall
first offer (the "Offer") such interest (the Offered
Interest") to Rubicon, by notice in writing, for acquisition
by Rubicon. Rubicon shall have a period of fourteen (14)
business days to accept the Offer, failing which the Optionor
shall be free to sell, transfer or otherwise deal with the
Offered Interest.
19. Nothing contained in this Agreement shall be deemed to constitute a
party an agent or legal representative of the other party or to create
any fiduciary relationship for any purpose whatsoever. Except as
otherwise specifically provided in this Agreement, a party shall not
have any authority to act for, or to assume any obligation or
responsibility on behalf of any other party. Except as expressly
provided in this Agreement, each party shall have the free and
unrestricted right independently to engage in and receive the full
benefits of any and all business endeavors of any sort whatsoever not
related to the Property, whether or not competitive with the endeavors
contemplated herein, without consulting or inviting or allowing the
other any interest therein. No party shall be under any fiduciary or
other duty to the other which will prevent it from engaging in or
enjoying the benefits of competing endeavors within the general scope
of the endeavors contemplated by this Agreement. The legal doctrines of
"corporate opportunity" or "business opportunity" sometimes applied to
joint ventures or other fiduciaries shall not apply in the case of any
other endeavour of a party.
20. The parties agree that this Agreement shall be interpreted and governed
according to the laws of the Province of British Columbia and the laws
of Canada applicable therein.
21. Any notice or election permitted or required to be given hereunder
shall be in writing and shall be effective if delivered by hand or
facsimile or if mailed postage prepaid to the address of a party
written below or to such other address as a party shall inform the
others by like notice:
Rubicon Minerals Corporation Noranda Inc.
Xxxxx 000, 0000 Xxxxxxxx Xxxxxx Xxxxx 0000, 0 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX Xxxxxxx, XX
X0X 0X0 X0X 0X0
Tel: (000) 000-0000 Attention: Director, Canadian Exploration
Fax: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000
22. Any such notice will, if delivered by hand or facsimile be deemed to
have been given and received on the day it was delivered by hand or
facsimile and if mailed, be deemed to have been given and received on
the fifth business day following the day of mailing, except in the
event of a disruption of postal service, in which case notice if mailed
will be deemed to be received on the seventh day following he
resumption of normal postal service.
23. No party hereto shall be liable to the others and no party hereto shall
be deemed in default under this Agreement for any failure or delay to
perform any of its covenants and agreements caused or arising out of
any act not within the control of the party, excluding lack of funds
but including, without limitation, acts of God, strikes, lockouts, or
other industrial disputes, acts of the public enemy, riots, fire,
storm, flood or other natural disaster, explosion, government
restriction, failure to obtain any approvals required from regulatory
authorities, including environmental protection agencies,
unavailability of equipment, interference of environmentalists or
native rights pressure groups or other causes whether of the kind
enumerated above or otherwise which are not reasonably within the
control of the party. No right of a party shall be affected for failure
or delay of the party to meet any condition of this Agreement, which
failure or delay is caused by one of the events above referred to, and
all times provided for in this Agreement shall be extended for a period
commensurate with the period of the delay caused by the events above
referred to, provided however, that nothing contained in this Section
23 shall require any party to settle any industrial dispute or to test
the constitutionality of any law enacted by any Province or the Federal
Government of Canada. Any party relying on the provisions of this
Section 23 shall forthwith give notice to the other party of the
commencement of such event and of its end.
24. This Agreement shall be binding upon the parties hereto and their
respective successors and permitted assigns.
25. Time shall be of the essence hereof.
26. This Agreement including schedules attached hereto, constitutes the
entire agreement between Rubicon and the Optionor pertaining to the
Optionor's 75% undivided right, title and interest in the Property and
supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written between Rubicon and the Optionor,
and there are no warranties, representations or other agreements
between Rubicon and the Operator in connection with the Property except
as specifically set forth herein.
27. This Agreement shall be effective from and as of August 28, 1998.
28. This Agreement is subject to receipt by the VSE for filing and to the
condition that all regulatory consents required for the carrying out of
this Agreement shall have been obtained.
29. The parties consent to the recording of this Agreement with the
Registry of Confidential Agreements, Mineral Claims Recorders Office,
Department of Mines & Energy, Government of Newfoundland to comply with
the provisions of the Mineral Act.
30. This Agreement may be executed in counterparts, all of which taken
together shall constitute one and the same instrument and anyone of the
parties may .execute this Agreement by signing and delivering same by
facsimile, telegraph, cable or otherwise in writing, each delivery by
any means to be deemed to be "in writing" for the purpose of this
Agreement.
If the foregoing terms and conditions reflect our agreement, please
execute and return the enclosed duplicate copies of this letter and we shall
consider it to be a binding agreement.
Yours very truly,
RUBICON MATERIALS CORPORATION
Per: /s/
--------------------------
Authorized Signatory
Acknowledged and agreed to as of the ____ day of _______, 1999.
NORANDA INC.
Per: /s/
-------------------------
Authorized Signatory
Per: /s/
-------------------------
Authorized Signatory
PROVINCE OF ) IN THE MATTER
ONTARIO ) OF AN
TO WIT: ) AGREEMENT
AFFIDAVIT OF EXECUTION
I, Xxxxxx Xxxxx, of 00 Xxxxxxx Xxxxxxxx, the City of Toronto, Province
of Ontario, MAKE OATH AND SAY THAT:
1. I was presently present and did see the annexed Agreement duly executed by
Noranda Inc. under its corporate seal and the hands of Xxxxx Xxxxxxx and Xxxxx
Xxxxx, on the 7th day of June, 1999;
2. I know the said parties and know the said parties to be V.P. -- Exploration
and Director -- Canadian Exploration of Noranda Inc.;
3. The signatures "Xxxxx Xxxxxxx" and "Xxxxx Xxxxx" subscribed to the said
Agreement are the proper handwriting of the said Xxxxx Xxxxxxx and Xxxxx Xxxxx
respectively and the seal attached thereto is the corporate seal of Noranda Inc.
SWORN BEFORE ME at the City of )
Toronto, in the Province of Ontario, this )
28th day of June, 1999 )
)
/s/ ) /s/
------------------------------------------------------ ) -----------------
A Notary Public for and within the Province of Ontario )
PROVINCE OF ) IN THE MATTER
BRITISH COLUMBIA ) OF AN
TO WIT: ) AGREEMENT
AFFIDAVIT OF EXECUTION
I, Xxxxxx Xxxxxx, of 1040 - 1055 West Hastings Street, Vancouver,
British Columbia, MAKE OATH AND SAY THAT:
1. I was presently present and did see the annexed Agreement duly executed by
Rubicon Minerals Corporation under its corporate seal and the hand of Xxxxxxx
Xxxx, a director, on the 7th day of June, 1999;
2. I know the said party and know the said party to be a director of Rubicon
Minerals Corporation;
3. The signature "Xxxxxxx X. Xxxx" subscribed to the said Agreement is the
proper handwriting of the said Xxxxxxx Xxxx and the seal attached thereto is the
corporate seal of Noranda Inc.
SWORN BEFORE ME at the City of )
Vancouver, in the Province of British Columbia, )
this 17th day of June, 1999 )
)
/s/ ) /s/
----------------------------------------------- ) ------------------
A Notary Public for and within the Province of )
British Columbia
SCHEDULE "A" TO THE OPTION AGREEMENT
DATED THE 14TH DAY OF MAY, 1999
BETWEEN
RUBICON MINERALS CORPORATION AND
NORANDA INC.
PROPERTY NAME MINING DIVISION MINING LEASE
Point Leamington Green Bay, NF 136 (2655)
SCHEDULE "B" TO THE OPTION AGREEMENT
DATED THE 14TH DAY OF MAY, 1999
BETWEEN
RUBICON MINERALS CORPORATION AND
NORANDA INC.
1. Net Smelter Returns shall mean any and all amounts received, from time to
time, by the party obligated to pay the royalty (the "Owner") for product
extracted from ore mined from the Property, deducting therefrom all expenses
relating to the treatment of such product at any smelter, refinery or mint,
including all costs and charges for the treatment, tolling, smelting, refining
or minting of such product and all costs and charges associated therewith, such
as costs and charges in respect of transportation, insurance, handling,
weighing, sampling, assaying and marketing, as well as penalties, representation
charges, referee's fees and expenses, import taxes and export taxes; that is to
say, Net Smelter Returns shall mean the net amount received by the Owner from a
smelter, refinery or mint, as the case may be, less all costs and charges
associated with marketing, selling and delivering the product to the smelter,
refinery or mint, as the case may be.
2. If the product is treated at a smelter, refinery or mint owned, operated or
controlled by the Owner or an affiliate of it, all costs and charges referred to
in paragraph 1 hereof shall be equivalent to the prevailing competitive rates
charges by similar smelters, refineries or mints, as the case may be, in arm's
length transactions for the treatment of like quantities and quality of product.
3. Net Smelter Returns shall be calculated by the Owner at the end of the
calendar quarter in which the ores or concentrates from the Property were sold
or otherwise deemed disposed of and payment to the party entitled to receive
such payment (the "Royalty Holder") shall be made by the Owner within 45 days
after the end of each quarter.
4. The Owner shall provide the Royalty Holder with an annual statement of the
Net Smelter Returns as of the end of each December 31st on or before the 31st
day of March following such 31st day of December. The Owner shall maintain
adequate records which shall be made available to the Royalty Holder for a
period of eight (8) months following the delivery of such annual statement by
the Owner so as to enable the Royalty Holder to verify the correctness of its
determination of Net Smelter Returns. The determination of whether an entry has
been properly categorized or calculated shall be finally made by an independent
auditor to be appointed by the Owner if the parties cannot agree between
themselves, provided, however, that after the eighth month following the
delivery of an annual statement, such annual statement shall be deemed to be
correct and the Royalty Holder shall waive all of its rights to challenge same.
5. For the purposes of determining whether an amount received by the Owner is
properly received on account of "product extracted from ore mined from the
Property", as defined in paragraph 1 hereof, the parties agree that all amounts
received by the Owner on account of future sales contracts, hedging programs or
other commodity arrangements which relate to product extracted (or to be
extracted) from ore mined (or to be mined) from the Property shall be deemed to
be subject to the Net Smelter Returns Royalty and the Royalty Holder shall be
entitled to receive payments in respect thereof.
SCHEDULE "C"
------------
MFC BANCORP'S NSR
-----------------
[Letterhead of Rubicon Minerals Corporation]
May 14, 1999
MFC Bancorp Ltd.
0 Xxxxx xx Xxxx
P.O. Box 3540
1211 Xxxxxx 0, Xxxxxxxxxxx
Attention: Mr. Xxxxxxx Xxxxx
----------------------------
Dear Sirs:
RE: POINT LEAMINGTON PROPERTY, NEWFOUNDLAND
Further to the letter agreement (the "Letter Agreement") made as of September 2,
1998 between MFC Merchant Bank S.A. and Rubicon Minerals corporation
("Rubicon"), Rubicon hereby writes this letter to set forth the terms of our
agreement with respect to the purchase, to be effective today, of the 22.5%
beneficial interest in certain mineral properties located in Newfoundland known
as the Point Leamington Property and more particularly described in Schedule "A"
attached hereto (hereinafter referred to as the "Property") formerly held by MFC
Bancorp S. A. and now held by MFC Bancorp Ltd. (collectively, with the MFC
Merchant Bank S.A., referred to herein as "MFC").
The terms of our Agreement are as follows:
TERMINATION OF LETTER AGREEMENT
1. The parties acknowledge that the Letter Agreement pursuant to which MFC
agreed to sell to Rubicon and Rubicon agreed to purchase a 25% beneficial
interest in the Property is hereby terminated and for greater certainty this
Agreement, including schedules attached hereto, constitutes the entire agreement
between Rubicon and MFC pertaining to MFC's interest in the Property and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written between Rubicon and MFC, and there are no warranties,
representations or other agreements between Rubicon and MFC in connection with
the Property except as specifically set forth herein.
PURCHASE AND SALE
2. At the Closing Time (as defined below), subject to the terms and conditions
set forth in this Agreement, MFC hereby agrees to sell and forever transfer to
Rubicon and Rubicon hereby agrees to purchase from MFC, the 22.5% beneficial
interest of MFC in the Property for and in consideration of Rubicon paying to
MFC the amount of $10,000.
CLOSING
3. The closing of the purchase and sale contemplated by Section 2 above shall
occur at 10:00 a.m. (Vancouver time) on the first business day after the date
this Agreement is executed or such other date as is mutually agreeable to the
parties (the "Closing Time"). At the Closing Time:
(a) MFC shall deliver to Rubicon all such documentation as is
reasonably available to MFC or in MFC's possession; and
(b) Rubicon shall deliver to MFC all such documentation as is
reasonably required by MFC.
NET SMELTER RETURNS ROYALTY
4. If there is any production from the Property such that product is extracted
from ore mined from the Property, 0.5% net smelter returns royalty ("NSR") will
be payable from Rubicon to MFC with respect to 22.5% beneficial interest in the
Property held by MFC in accordance with the provision of Schedule "B" attached
hereto. Once Rubicon has acquired MFC's 22.5% beneficial interest in the
Property in accordance with Section 2 above, MFC shall have no remaining rights
with respect to the Property apart from the 0.5% NSR described in this Section
4. Notwithstanding the foregoing, Rubicon may purchase from MFC the 0.5% NSR at
any time in consideration of the payment by Ruicon to MFC of $500,000.
REGISTRATION
5. Rubicon shall be entitled to record this Agreement as evidence of its
interest in the Property and each party agrees to execute and deliver all
necessary documents to facilitate such recordings from time to time in order to
comply with Section 6 of the MINERAL ACT (Newfoundland) (the "Mineral Act").
ACKNOWLEDGMENT AND COVENANTS
6. The parties hereby acknowledge that the due diligence review with respect to
MFC's 22.5% beneficial interest in the Property has not been completed to date.
Accordingly, notwithstanding any other provision contained herein, the parties
acknowledge that MFC is making no representation or warranty including with
respect to its interest in the Property. For greater certainty, MFC shall in no
way be liable to Rubicon whatsoever in the event that MFC's beneficial interest
in the Property is, as a result of the due diligence review contemplated hereby,
determined to be less than 22.5%.
GENERAL
7. The parties agree that this Agreement shall be interpreted and governed
according to the laws of the Province of British Columbia and the laws of Canada
applicable therein.
8. This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns.
9. All references to dollar amounts in this Agreement are to Canadian dollars
unless expressly stated otherwise.
10. The parties hereto agree to do all such things, carry out all such acts and
to execute and deliver all such documents, including further agreements, notices
and other instruments as may be necessary or useful for the purpose of giving
full effect to this Agreement.
11. This Agreement shall be effective from and as of September 2, 1998.
12. The parties consent to the recording of this Agreement with the Registry of
Confidential Agreements, Mineral Claims Recorders Office, Department of Mines &
Energy, Government of Newfoundland to comply with the provision of the Mineral
Act.
13. This Agreement may be executed in several counterparts, each of which taken
together shall constitute one and the same instrument, and anyone of the parties
may execute this Agreement by signing and delivering same by facsimile,
telegraph, cable or otherwise in writing, each delivery by any means to be
deemed "in writing" for the purpose of this Agreement.
If the foregoing terms and conditions reflect our agreement, please execute and
return a copy of this letter and we shall consider it to be a binding agreement.
Yours very truly,
RUBICON MINERALS CORPORATION
Per: /s/
------------------------
Authorized Signatory
Accepted and agreed to as of the 14th day of May, 1999.
MFC BANCORP LTD
Per: /s/
------------------------
Authorized Signatory
PROVINCE OF ) IN THE MATTER
BRITISH COLUMBIA ) OF AN
TO WIT: ) AGREEMENT
AFFIDAVIT OF EXECUTION
I, Xxxxxx Xxxxx, of 0000 X 0 Xxx., Xxxxxxxxx, Xxxxxxx Xxxxxxxx, MAKE
OATH AND SAY THAT:
1. I was presently present and did see the annexed Agreement duly executed by
Rubicon Minerals Corporation under its corporate seal and the hand of Xxxxxxx
Xxxxxxx, a director, on the 14th day of May, 1999;
2. I know the said party and know the said party to be a director of Rubicon
Minerals Corporation;
3. The signature "Xxxxxxx Xxxxxxx" subscribed to the said Agreement is the
proper handwriting of the said Xxxxxxx Xxxxxxx and the seal attached thereto is
the corporate seal of Rubicon Minerals Corporation.
SWORN BEFORE ME at the City of )
Vancouver, in the Province of British Columbia, )
this 14th day of May, 1999 )
)
/s/ ) /s/
--------------------------------------------------- ) ------------------
A Notary Public for and within the Province of )
British Columbia
IN THE CITY OF VANCOUVER ) IN THE MATTER
B.C. ) OF AN
TO WIT: ) AGREEMENT
AFFIDAVIT OF EXECUTION
I, Xxxxxx Xxxxx, of 0000 X 0 Xxx., in the City of Vancouver, Province
of British Columbia, MAKE OATH AND SAY THAT:
1. I was presently present and did see the annexed Agreement duly executed by
MFC Bancorp Ltd. under its corporate seal and the hand of Xxxxx Xxxxxx, a Vice
President, on the 14th day of May, 1999;
2. I know the said party and know the said party to be a Vice President of MFC
Bancorp Ltd.;
3. The signature "Xxxxx Xxxxxx" subscribed to the said Agreement is the proper
handwriting of the said Xxxxx Xxxxxx and the seal attached thereto is the
corporate seal of MFC Bancorp Ltd.
SWORN BEFORE ME at the City of )
Vancouver, in the Province of British Columbia, )
this 14th day of May, 1999 )
)
/s/ ) /s/
------------------------------------------------ ) ------------------
A Notary Public for and within the Province of )
British Columbia
SCHEDULE "A" TO THE AGREEMENT
DATED THE 14TH DAY OF MAY, 1999
BETWEEN
RUBICON MINERALS CORPORATION AND
MFC BANCORP LTD.
PROPERTY NAME MINING DIVISION MINING LEASE
------------- --------------- ------------
Point Leamington Green Bay, NF 136(2655)
SCHEDULE "B" TO THE AGREEMENT
DATED THE 14TH DAY OF MAY, 1999
BETWEEN
RUBICON MINERALS CORPORATION AND
MFC BANCORP LTD.
1. Net Smelter Returns shall mean any and all amounts received, from time to
time, by the party obligated to pay the royalty (the "Owner") for product
extracted from ore mined from the Property, deducting therefrom all expenses
relating to the treatment of such product at any smelter, refinery or mint,
including all costs -and charges for the treatment, tolling, smelting, refining
or minting of such product and all costs and charges associated therewith, such
as costs and charges in respect of transportation, insurance, handling,
weighing, sampling, assaying and marketing, as well as penalties, representation
charges, referee's fees and expenses, import taxes and export taxes; that is to
say, Net Smelter Returns shall mean the net amount received by the Owner from a
smelter, refinery or mint, as the case may be, less all costs and charges
associated with marketing, selling and delivering the product to the smelter,
refinery or mint, as the case may be.
2. If the product is treated at a smelter, refinery or mint owned, operated or
controlled by the Owner or an affiliate of it, all costs and charges referred to
in paragraph 1 hereof shall be equivalent to the prevailing competitive rates
charges by similar smelters, refineries or mints, as the case may be, in arm's
length transactions for the treatment of like quantities and quality of product
3. Net Smelter Returns shall be calculated by the Owner at the end of the
calendar quarter in which the ores or concentrates from the Property were sold
or otherwise deemed disposed of and payment to the party entitled to receive
such payment (the "Royalty Holder") shall be made by the Owner within 45 days
after the end of each quarter.
4. The Owner shall provide the Royalty Holder with an annual statement of the
Net Smelter Returns as of the end of each December 31st on or before the 31st
day of March following such 31st day of December. The Owner shall maintain
adequate records which shall be made available to the Royalty Holder for a
period of eight (8) months following the delivery of such annual statement by
the Owner so as to enable the Royalty Holder to verify the correctness of its
determination of Net Smelter Returns. The determination of whether an entry has
been properly categorized or calculated shall be finally made by an independent
auditor to be appointed by the Owner if the parties cannot agree between
themselves, provided, however, that after the eighth month following the
delivery of an annual statement, such annual statement shall be deemed to be
correct and the Royalty Holder shall waive all of its rights to challenge same.
5. For the purposes of determining whether an amount received by the Owner is
properly received on account of "product extracted from ore mined from the
Property", as defined in paragraph 1 hereof, the parties agree that all amounts
received by the Owner on account of future sales contracts, hedging programs or
other commodity arrangements which relate to product extracted (or to be
extracted) from are mined (or to be mined) from the Property shall be deemed to
be subject to the Net Smelter Returns Royalty and the Royalty Holder shall be
entitled to receive payments in respect thereof.
