MINERAL LEASE AGREEMENT
Timberwolf
Minerals, LTD (Lessor) leases to Link Resources Inc., (Lessee) the unpatented
mining claims attached as Exhibit “A” (referred to as the Property) located in
Section 20 , Township 30 North, Range 39 East, Mt. Diablo Meridian in Pershing
County, Nevada, USA, subject to the following conditions:
Recitals:
A.
|
“Effective
Date” is April 1, 2008.
|
B.
|
“Lease
Year” means each one (1) year period following the Effective Date and each
anniversary of the Effective Date.
|
1.
|
Warranties.
Lessor warrants that he is the owner of the unpatented mining claims more
particularly described in Exhibit “A” as the Property, and said claims are
free from all liens and
encumbrances.
|
2.
|
Exploration and
Development Rights. Lessor will grant the Property to Lessee for
the Lease period with the exclusive right to explore, develop and mine the
Property for gold, silver and other valuable
minerals.
|
3.
|
Performance
Requirements / Assumption of Claim
Maintenance. Under applicable Federal, State, and County laws and
regulations, Federal, State, and County annual mining claim maintenance or
rental fees are required to be paid for the unpatented mining claims which
constitute all or part of the Property. Lessee shall timely and properly
pay the Federal, State, and County annual mining claim maintenance or
rental fees, and shall execute and record or file, as applicable, proof of
payment of the Federal, State, and County annual mining claim maintenance
or rental fees and of Lessor’s intention to hold the unpatented mining
claims which constitute the Property. If Lessee does not terminate this
Agreement before June 1 of any subsequent Lease Year, Lessee will be
obligated either to pay the Federal, State, and Local annual mining claim
maintenance or rental fees for the Property due that year or to reimburse
Lessor for same.
|
4.
|
Area of
Interest. Any additional claims located or acquired by the Lessee
within one (1) mile from the
exterior boundaries of the mining claims described in Exhibit “A” shall
become a part of the leased property and shall be subject to the terms of
this lease as of the Effective
Date.
|
5.
|
Schedule of Minimum
Payments. The Lessee shall pay Lessor US$5,000 upon execution of
this lease. The Lessee shall pay to Lessor minimum payments which shall be
advance payments of the Royalty, beginning on the first anniversary of
this lease. Lessee shall be responsible for all federal, state and local
taxes as they come due during the term of this Agreement. Lessee may
extend this lease upon payment and grant of the
following:
|
|
a.
|
Pay
Lessor US$5,000 on or before the first anniversary of this
lease.
|
|
b.
|
Pay
Lessor US$10,000 on or before the second and third anniversaries of this
lease.
|
|
c.
|
Pay
Lessor US$25,000 on or before the fourth anniversary of this
lease
|
|
d.
|
Each
annual payment thereafter to Lessor shall be US$75,000 plus an
annual
|
1
|
increase
or decrease equivalent to the rate of inflation designated by the
Consumer’s Price Index (CPI) for that year with execution year as base
year. Each such payment shall be made on or before the successive
anniversary of the execution of this
lease.
|
6.
|
Royalty
Purchase. The Lessee shall have the right to purchase up to two and
one-half (2.5) percent, or any part thereof, of the royalty applicable on
all unpatented claims as described in Exhibit “A” and within the
boundaries of the Area of Interest for a cost of US$5,000,000 (five
million US dollars) per percentage point from which advance payments of
Royalty, made up to the day of buyout, may be subtracted from the royalty
purchase price. The royalty purchase price is only in effect up to sixty
(60) days of completion of a bankable feasibility study, or in lieu of a
feasibility study, when ore production of any type occurs. Lessee will pay
Lessor a perpetual one percent (1.0%) royalty on Net Smelter Returns (as
defined below in Section 7. of this document) thereafter for production on
any or all unpatented claims within the area of
interest.
|
7.
|
Definition of Net
Smelter Returns. During the term of this Lease, Lessee shall pay to
Lessor, as a landowner’s Production Royalty, a percentage of the Net
Smelter Returns (as defined below) from the sale of any Valuable Minerals,
Ore, and Product mined and sold from the Property. “Net Smelter Returns”
are defined as the gross revenues actually received by Lessee from the
sales of any Valuable Minerals extracted and produced from the Property
less the following charges:
|
|
a.
|
All
costs to Lessee of weighing, sampling, determining moisture content and
packaging such refined material and of loading and transporting it to the
point of sale, including insurance and in-transit security
costs.
|
|
b.
|
All
smelter costs and all charges and penalties imposed by the smelter,
refinery or purchaser.
|
|
c.
|
Marketing
costs and commissions.
|
|
d.
|
Not
withstanding the foregoing, for purposes of determining the royalty
payable to Lessor on any gold and/or silver produced from the Property,
the price attributed to such gold and/or silver shall be the price per
ounce of gold and/or silver on which the royalty is to be paid (as the
case may be) as quoted on the London Metals Exchange at the PM fix on the
day prior to the date of final settlement from the smelter, refinery or
other buyer of the gold and/or silver on which the royalty is to be paid
(the “Quoted Price”). For purposes of determining the gross revenues, in
the event the Lessee elects not to sell any portion of the gold and/or
silver mined from the Property, but instead elects to have the final
product of any such gold and/or silver credited to be held for its account
with any smelter, refiner or broker, such gold and/or silver shall be
deemed to have been sold at the Quoted Price on the day such gold and/or
silver is actually credited to or placed in Lessee’s account. The
percentage to be paid to Lessor from production from the Property
(unpatented claims as defined in Exhibit “A” and all area of interest) for
this Production Royalty shall be three and one-half percent (3.5%) Net
Smelter Return.
|
|
e.
|
Lessors
shall be paid the Production Royalty quarterly by certified check by the
Lessee or operator of the mine.
|
8.
|
Conditions of
Termination by Lessor. This lease may be terminated at any time by
the Lessor
|
2
|
subject
to the following:
|
|
a.
|
If
Lessee fails to meet the above lease payments, Lessor must give written
notice to Lessee of such default. After receipt of default, Lessee has
fifteen (15) days to cure the
default.
|
|
b.
|
Lessee
shall provide proof of payment to Lessor at least twenty (20) days prior
to due date of any and all payments to Federal, State and County
authorities. If Lessee fails to make Federal, State, and County
maintenance payments, tax payments or filing fees at least twenty (20)
days prior to due date, Lessor shall notify Lessee of default. After ten
(10) days, if the default is not cured, Lessor may initiate the
appropriate payment. Lessee will be deemed to have defaulted on the lease
without further notification by Lessor. Lessee will be able to cure this
default by reimbursing all Federal, State and County payments made by the
Lessor + a twenty percent (20%) penalty within thirty (30) days of
payment.
|
|
c.
|
In
the event that the Lessee makes payment, but fails to notify the Lessor,
Lessee is directly responsible for reimbursement to Lessor of any excess
money paid to any Federal, State, or County entity within thirty (30) days
of payment.
|
9.
|
Conditions of
Termination by Lessee. This Lease may be terminated at any time by
the Lessee subject to the
following:
|
|
a.
|
Lessee
must give written notice thirty (30) days prior to relinquishing the
leased property.
|
|
b.
|
In
the event Lessee desires to terminate the agreement after June 1 of any
year, Lessee shall be responsible for all Federal, State, and County
Maintenance and filing fees for the next assessment year regarding the
leased property.
|
|
c.
|
Lessee
shall deliver to Lessor in digital or reproducible form all data generated
or obtained for the leased property, whether factual or interpretive as
defined in section 13.
|
|
d.
|
Lessee
shall quitclaim to Lessor all claims located or acquired by Lessee within
the one (1) mile area of interest described in Paragraph 4. During the
Period of the lease, any and all unpatented mining claims that are
considered unnecessary to the Lessee within the area of interest will be
offered to the Lessor at least twenty (20) days prior to the annual
payment to the Federal government.
|
10.
|
Reclamation.
Compliance with the Law. All exploration and development work
performed by Lessee during the term of this Agreement shall conform with
the applicable laws and regulations of the state in which the Property is
situated and the United States of America. Lessee shall be fully
responsible for compliance with all applicable Federal, State, and local
reclamation statutes, regulations and ordinances relating to such work, at
Lessee’s cost, and Lessee shall indemnify and hold harmless Lessor from
any and all claims, assessments, fines and actions arising from Lessee’s
failure to perform the foregoing obligations. Lessee’s reclamation
obligation shall survive termination of this Agreement. Lessor agrees to
cooperate with Lessee in Lessee’s application for governmental licenses,
permits, and approvals, the costs of which shall be borne by Lessee.
Lessee shall own all governmental licenses, permits, and approvals. Lessor
warrants that all disturbances from previous work performed on the
property has been properly
reclaimed
|
3
|
according
to applicable state and federal
regulations.
|
11.
|
Liens. Lessee
shall keep the property free from any and all liens and
encumbrances.
|
12.
|
Transfer,
Assignment. Lessor and Lessee and their respective successors shall
have the right to assign or otherwise transfer their respective interests
in the Agreement in whole or in part provided that the transferee agrees
in writing to assume all, or a portion of all if applicable, obligations
of Lessee or Lessor hereunder, as the case may
be.
|
13.
|
Lease Term. The
term of this lease is for twenty (20) years, renewable for additional
twenty (20) years so long as conditions of the lease are
met.
|
14.
|
Data and
Reports. Upon and after execution of the detailed agreement, Lessor
will make available to Lessee all technical data, survey notes or maps,
samples, drilling results including drill logs and reports concerning the
Property which Lessor possesses, or to which it has access, or which it
acquires in the future. Within sixty (60) days after termination of the
detailed agreement, Lessee shall return to Lessor, all information of a
nature similar to that described above and developed by Lessee during the
term of the Lease Agreement. If requested by Lessor not more than once in
any twelve (12) calendar months, Lessee shall submit to Lessor, within
sixty (60) days of Lessee’s receipt of such request, an annual progress
report describing Lessee’s work upon the Property, the results of such
work, and the amounts expended by Lessee in furtherance thereof to the
date of such report.
|
15.
|
Notification to
Lesser. All notices and payments from Lessee to Lessor shall be
sent to:
|
Timberwolf
Minerals, LTD
0000
Xxxxxx Xx.
Xxxxx
Xxxx, XX 00000 XXX
or any
other person Lessor shall designate. If Lessor designates an alternative person
to receive notices and payment, they shall provide written notice of such to
Lessee. All lease payments shall be made in the form of a check payable to
Timberwolf Minerals, LTD.
16.
|
Notification to
Lessee. All notices from Lessor to Lessee shall be sent
to:
|
Xxxxxxx
Xxxxxxx, Pres.
000
Xxxxxx Xx. XX
Xxxxxxx,
XX X0X 0X0 Xxxxxx
or any
other person Lessee shall designate. If Lessee designates an alternative person
to receive notices, they shall provide written notice of such to
Lessor.
4
The
parties have executed this Agreement effective as of the Effective
Date.
TIMBERWOLF MINERALS, LTD | |||
|
By:
|
/s/ Xxxxx Xxxxx | |
Title: | President | ||
STATE OF
|
Colorado
|
)
|
)ss.
|
||
COUNTY
|
Fremont
|
)
|
Before
me, a Notary Public in and for said State and County, duly commissioned and
qualified, personally appeared Xxxxx X. Xxxxx, with whom I am personally
acquainted (or proved to me on the basis of satisfactory evidence) and who
acknowledged himself to be the President of Timberwolf Minerals, LTD and who
acknowledged that he executed the within instrument for the purposes therein
contained.
Witness
my hand, at office, this 14th day
of April, 2008.
|
|
|||
|
NOTARY
PUBLIC
|
|||
|
|
5
LINK RESOURCES INC. | |||
|
By:
|
/s/ Xxxxxxx Xxxxxxx | |
XXXXXXX XXXXXXX | |||
Title: | PRESIDENT | ||
Personally
appeared before me Xxxx Xxxxxxx, with whom I am personally acquainted (or proved
to me on the basis of satisfactory evidence) and who acknowledged that he
executed the within instrument for the purpose therein contained.
Witness
my hand, at office, this 1st day of April, 2008.
|
|
|||
|
NOTARY
PUBLIC
|
|||
|
|
6
EXHIBIT
A
Description
of PROPERTY
Unpatented Mining Claims | |
GB-1 & GB-2
|
NMC # 983672, 983673
|
A total
of two (2) unpatented lode mining claims located in Section 00,
Xxxxxxxx 00 Xxxxx, Xxxxx 00 Xxxx, Xx. Diablo Baseline & Meridian, Pershing
County, Nevada, USA, owned by Timberwolf Minerals LTD.
7