Exhibit 10.9
NORD RESOURCES CORPORATION
PO BOX 384, DRAGOON, AZ 85609
TEL: (000) 000-0000 FAX: (000) 000-0000
TERMS OF AGREEMENT
OPTION TO PURCHASE THE "COYOTE SPRINGS" PROPERTY,
XXXXXX COUNTY, ARIZONA
TERMS
1. Xxxxxxxxx Xxxxxx, South Branch Resources, LLC, and MRPGEO, LLC (collectively,
the "Vendors") have agreed to grant to Nord Resources Corporation ("Nord") an
exclusive option to purchase the "Coyote Springs" Property (the "Property")
located in Xxxxxx County, Arizona and consisting of two (2) State of Arizona
Exploration Leases and fifty-two (52) Unpatented Mining Claims. The Property is
more fully described in Exhibit "A" and Exhibit "B" attached hereto.
2. Nord and the Vendors agree on the following terms:
- The term of the Option to Purchase Agreement shall be for sixty (60)
months commencing on the date of signature as set forth below.
- Within ten (10) days of the date of signature of the Option to
Purchase Agreement, Nord shall deliver payment to each of the Vendors
separately, common shares of Nord or, make a cash payment to each of
the Vendors according to the following schedule:
Agreement signature date 66,666 shares w/no cash payment option
Twelve (12) month anniversary of signing 16,666 shares or US$15,000 at Vendor's option
Twenty-four (24) month anniversary of signing 16,666 shares or US$16,670 at Vendor's option
Thirty-six (36) month anniversary of signing 16,666 shares or US$18,330 at Vendor's option
Forty-eight (48) month anniversary of signing 16,666 shares or US$20,000 at Vendor's option
Sixty (60) month anniversary of signing Equivalent Dollar amount in shares or
US$533,335 at Vendors option
- Within ten (10) days of the date of signature of the Option to
Purchase Agreement, Nord shall deliver to each of the Vendors options
to purchase the common stock of Nord according to the following
schedule:
Stock Option Issue Date Stock Options Option Price
----------------------- ------------- --------------------------
Agreement signature date 33,333 15% below market on option
issue date
Twenty-four (24) month anniversary of signing 33,333 15% below market on option
issue date
Forty-eight (48) month anniversary of signing 33,333 15% below market on option
issue date
The options to purchase the common stock of Nord shall expire
thirty-six (36) months from the date of issue.
All common shares of Nord issued pursuant to this Agreement will be
fully paid and unrestricted.
Tucson Office - (000) 000-0000 - Fax (000) 000-0000
- Page 2 Agreement January 28, 2004
- Should Nord sell the Property to a third party, the Vendors will
receive as a sales commission, four per cent (4%) of the net sale
amount received by Nord from the sale, which four per cent (4%) shall
be divided equally among the Vendors.
- Nord agrees to pay to the Vendors, in cash, a Net Smelter Return
production royalty (the "NSR") according to the following schedule:
For copper production derived from the Unpatented Claims:
Ave. Copper Sales Price, $/pound NSR, Per Cent
-------------------------------- -------------
<$0.85 0.25%
$0.85 to $0.89 0.50%
$0.90 to $0.95 0.75%
$0.96 to $1.00 1.00%
$1.01 to $1.05 1.25%
$1.06 to $1.10 1.50%
$1.11 to $1.15 1.75%
$1.16 to $1.20 2.00%
$1.21 to $1.25 2.25%
$1.26 to $1.30 2.50%
>$1.30 3.00%
For copper production derived from the State of Arizona Leases:
Ave. Copper Sales Price, $/pound NSR, Per Cent
-------------------------------- -------------
<$0.85 0.10%
$0.85 to $0.89 0.15%
$0.90 to $0.95 0.20%
$0.96 to $1.00 0.30%
$1.01 to $1.05 0.40%
$1.06 to $1.10 0.60%
$1.11 to $1.15 0.75%
$1.16 to $1.20 0.90%
$1.21 to $1.25 1.10%
$1.26 to $1.30 1.30%
>$1.30 1.50%
For the purposes of this agreement, NSR shall be deemed to mean the
amount received by Nord from a smelter upon the sale of all metals
removed from the Property after deducting from the gross value the
cost of smelting and actual freight or haulage charges from the mine
to the smelter. The term "smelter" shall mean conventional smelters as
well as any other type of production plant used in lieu of a
conventional smelter to recover metals. The total royalty payments
will be split between the Vendors and calculated and paid on a
quarterly basis. Installments will be paid to Vendors within 45 days
of the end of each royalty quarter during which metal is recovered and
sold from the Property.
- Exploration and development expenditures on or in respect of the
Property will conform to the following schedule:
- Page 3 Agreement January 28, 2004
Period Expenditure
------ -----------
Twelve (12) month anniversary $ 50,000
Twenty-four (24)month anniversary $ 100,000
Thirty-six (36) month anniversary $ 250,000
Forty-eight (48) month anniversary $ 350,000
Sixty (60) month anniversary $ 500,000
Total Expenditure $1,250,000
Expenditures shall include, without limitation, amounts expended in
claim staking, lease fees, assessments and other charges; geophysical,
geochemical and geological surveys, land surveys and aerial surveys;
digging, trucking, sampling, working, mining and procuring ores,
minerals and metals; excavations; exploration drilling, assaying and
metallurgical testing; in renting, installing and erecting structures,
machinery, tools, appliances and/or equipment; transporting equipment,
supplies or other items to and from the Property or any part of it;
wages and salaries of any Nord personnel and consultants engaged in
any work for or on the Property or any part thereof; in paying
assessments and contributions, insurance, food, lodging and sundry
expenses relating to such personnel and consultants; and, in paying
such other amounts as are directly related to carrying out the
exploration and development work, including administrative costs, on
and for the property.
Nord shall deliver to Vendors within thirty (30) days of the time
limit set forth for the incurring of the applicable expenditures a
certificate stating the amount of expenditures incurred. The
certificate shall be prima facie evidence of such expenditures having
been made. Vendors shall have the right to verify the expenditures and
upon request in writing Nord shall provide sufficient detail of the
expenditures to permit such verification.
Vendors jointly and severally agree to forthwith deliver to Nord
photocopies, all maps, reports, results of surveys and drilling and
any other reports of information that the Vendors possess under their
control with respect to the Property.
During the option period, Nord and/or its affiliates shall do, record
and/or pay annually or in advance assessment work for the Property and
shall pay such taxes, fees and rents as may be required to keep the
Property in good standing which payments shall accrue to Nord's
expenditure account for the Property.
Nord shall grant Vendors during the option period, access to the land
at a convenient time and day for Nord or its affiliates, in order to
observe the conduct of operations or to view drill cores and samples.
Any lands acquired by the parties during the terms of this Option and
within one mile of the outer boundary of the Land, will be subject to
and included within the terms of this agreement.
Vendors jointly and severally agree to transfer title to Property to
Nord within ten (10) days of the date of signature as set forth below.
Should Nord terminate this Agreement, Nord will transfer title to
Property to Vendors within ten (10) days of Agreement termination.
3. The Vendors represent and warrant to Nord that:
- Page 4 Agreement January 28, 2004
- They have the power, capacity and authority to execute and
deliver this Agreement and any agreement or instrument referred
to or contemplated by this Agreement and to carry out and perform
all of their obligations and duties hereunder.
- This Agreement has been duly executed and delivered by them and
is a valid and binding obligation of them enforceable in
accordance with its terms.
- They are the sole recorded owner of the Property with good and
marketable title thereto.
- The Property is free and clear of any and all liens, charges,
encumbrances, security interests, mortgages, royalties other than
those which may be levied by the State of Arizona or other
claims.
4. Xxxx agrees to indemnify and hold harmless the Vendors from any and all
losses actually incurred by Nord in connection with its operations on the
Property.
5. Any failure to pay any amounts under this Agreement when the same shall
become due and payable and such failure continues for sixty (60) days after
notice thereof shall constitute and event of default under this Agreement.
6. Nord may, during the currency of the option granted by this Agreement, at
any time upon notice to the Vendors terminate this Agreement.
Nord shall provide to Vendors a ninety (90) day notification of termination
of this option in a termination letter. If Nord terminates this agreement
after May 1 of any option year, Nord shall to pay all BLM filing fees for
that assessment year. Should Nord terminate this agreement after six (6)
months of any assessment year for the state exploration permits, then Nord
will be required to make appropriate filings and fee payments.
Upon termination of the option, Nord shall deliver to Vendors all data
generated, including but not limited to copies of all assay reports, drill
records, maps, information and other pertinent exploration reports produced
by Nord and or its affiliates and or agents regarding the Property.
7. If, during the currency of the option granted by this Agreement, Nord shall
default with respect to the making of payments provided for in paragraph 2
above within the times specified, notice of such default must be
communicated in writing to Nord. Nord shall have sixty (60) days in which
to cure the default from the receipt of such notice.
8. Nord reserves the right to transfer or assign all or any part of its rights
under this Agreement.
9. The Vendors agree that during the term of this Agreement, they shall not
disclose to any third party or issue any statements containing any
information concerning this Agreement, the Property or the activities
thereon, without the written consent of Nord.
10. The parties hereto agree to sign, execute and deliver all such other deeds
and documents and to do all such other things as may be expedient or
necessary to give full force and effect to this Agreement.
11. This Agreement shall be binding upon, and shall inure to the benefit of the
parties hereto and their respective heirs, successors, and assigns.
12. If any action is brought by either party with respect to its rights under
this Agreement the prevailing party shall be entitled to reasonable
attorneys' fees and court costs as determined by the court.
- Page 5 Agreement January 28, 2004
13. This Agreement shall be governed and construed in accordance with the laws
of the State of Arizona.
Accepted and agreed to by the parties on this 28th day of January, 2004.
NORD RESOURCES CORPORATION XXXXXXXXX XXXXXX
By /s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxxxxx Xxxxxx
---------------------------------- ----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President and Chief Operating
Officer
SOUTH BRANCH RESOURCES, LLC
By /s/ Xxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxx X. Xxxx
Title: President
MRPGEO, LLC
By /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Member/Manager
- Page 6 Agreement January 28, 2004
EXHIBIT A
PROPERTIES:
State of Arizona Leases:
Exploration Permit #08-109145
T5 S, R26 E, Section 16
640 Acres
Xxxxxx County, Arizona
Exploration Permit #08-109146
T5 S, R26 E, Section 21
280 Acres
Legal: NE, N 1/2NW, SE XX
Xxxxxx County, Arizona
Federal Minerals:
MW #1 through 52 mining lode claims
T5 S, R26 E, all Section 17,
N 1/2 Section 20, SW NW 1/4 Section 21
- Page 7 Agreement January 28, 2004
EXHIBIT B
PROPERTY MAP:
(MAP)
