EXHIBIT 10.4
AMENDING AGREEMENT of a NET SMELTER RETURN ROYALTY dated as of the
30th day of June, 2001,
BETWEEN:
XXXXXX RESOURCES INC.
(the "Owner")
- and-
REPADRE CAPITAL CORPORATION
(the "Payee")
WITNESSES THAT:
WHEREAS the Owner and the Payee entered into a Net Smelter Return
Royalty dated April 23rd, 1993 (the "Royalty Agreement") whereby the Payee has
agreed to purchase a net smelter return royalty on the mineral production from
property comprised of a mining concession and certain mining claims near
Chibougamau, Quebec owned by the Owner, which property is known as the "Xxx
Xxxx Property" (the "Property");
WHEREAS the Payee and Xxxxxxxx Resources Inc. ("Xxxxxxxx"), the sole
shareholder of the Owner, entered into a letter agreement dated April 30,
2001, pursuant to which, as part of a proposed merger by way of Plan of
Arrangement as described in a Joint Management Proxy Circular dated May 10,
2001 (the "Merger"), Xxxxxxxx agreed to issue 800,000 common shares to the
Payee in consideration of the Payee agreeing to a reduced Net Smelter Return
Royalty as set out below;
AND WHEREAS the Merger was approved by shareholders of Xxxxxxxx and
was effective on June 30, 2001 and the Owner and the Payee wish to reflect the
above reduction in a formal amendment to the Royalty Agreement,
NOW THEREFORE in consideration of the mutual covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by each of the parties
hereto, it is agreed as follows:
1. The Payee hereto agrees that in consideration of the issuance
and delivery to the Payee of 800,000 freely tradeable common
shares of Xxxxxxxx, the adequacy of which is agreed to and
acknowledged by the Parties, the net smelter return royalty
will be amended and reduced as set out in Section 2 hereof.
2. The Owner and the Payee agree to amend subsections 9(a) and
9(d) of the Royalty Agreement to read as follows:
9 (a) Precious Metals
The Owner shall pay to the Payee, a Royalty equal
to the following percentages of Net Smelter Returns (as
defined in subsection 9 (b) hereof) from the sale or
other disposition of gold mined or otherwise recovered
from the Property:
(i) 1.5% when the price of gold is US$325 per
ounce or above. The royalty rate will
increase by 1 basis point for every
US$1.00 increase in the gold price above
US$325 per ounce to a maximum of 2.0% at a
gold price of US$375 per ounce or greater;
(ii) Once Cdn$500,000 has been received in
royalty payments under Section 9(a)(i)
above the royalty rate will reduce to a
flat 1% rate and will only be in effect at
a gold price of US$350 per ounce or
higher;
The price of gold is the price used in determining the
Royalty payment in subsection 9 (d) as herein amended.
The Owner shall further pay to the Payee a Royalty equal
to 2% of the Net Smelter Returns from the sale or other
disposition of silver mined or otherwise recovered from
the Property, on the silver production from the Property
in excess of one million ounces per calendar year.
The Owner shall further pay to the Payee a Royalty equal
to 2% of the Net Smelter Returns from the sale or other
disposition of copper mined or otherwise recovered from
the Property, on the copper production from the Property
in excess of five million pounds per calendar year.
3. The Owner and the Payee agree to amend subsection 9(d) of the
Royalty Agreement as follows, to remove the reference to
conversion of the gold price from US to Canadian dollars:
9 (d) Payment Time and Manner - Royalty on Gold
The Royalty on gold shall be calculated and paid monthly
on a calendar month basis commencing on May 1, 1993 by
the Owner regardless of arrangements the Owner shall
have made for smelting and refining and regardless of
the receipt of proceeds by the owner from such
production. Payment shall be made to the Payee by the
Owner no later than the 45th calendar day following the
last day of each month. In calculating gross proceeds
for determining the
amount of the royalty payment, production will be
calculated by the Owner for each calendar month, the
price of gold shall be the simple average of the London
Bullion Market Afternoon Fix on each day during the
relevant month on which such determination is made.
The Owner shall pay the Royalty, at the Payee's option,
either:
(A) by converting the Royalty payable in cash to gold
bullion (at the price of gold determined herein for the
month to which the payment relates) and deliver directly
to the Payee's account as directed in writing to the
Owner by the Payee, or
(B) by cheque or bank draft payable to the Payee at its
principal place of business as specified in subsection
17 (b), or in such other manner or place as specified in
writing by the Payee.
The Payee shall provide the Owner with written notice of
its election to receive payment in gold bullion no later
than the first day of the calendar month for which the
Payee wishes payment in bullion to commence.
4. The Owner and the Payee also agreed to amend the notice
provisions in subsection 17(h) as follows:
17 (h) Notice
(i) Subject to the payment provisions of this
Agreement or any schedule hereto, all
notices designations or other documents
required or authorized by the terms of this
Agreement shall be in writing and shall be
personally delivered or mailed in Canada by
registered or certified mail, postage
prepaid, return receipt requested or
telecopied in a manner which confirms
transmission to the recipient, addressed as
follows:
(A) if to the Owner at:
Xxxxxx Resources Inc.
0000, Xxxxxxxxxx Xx., Xxxxx 0000
Xxxxxxxx, Quebec H313 3A7
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxxxx Resources Inc.
000 Xxx Xxxxxx, Xxxxx 0000, X.X. Xxx 000
Xxxxxxx, XX X0X 0X0
Telecopier No.: (000) 000-0000
(B) if to the Payee at:
Repadre Capital Corporation
000 Xxxxxxxx Xx. Xxxx, Xxxxx 0000
Xxxxxxx, XX X0X 0X0
Telecopier No.: (000) 000-0000
(ii) Any of the parties may change its address
for notice by giving the other parties
notice of such change in the manner
specified in this Section. Notices
personally delivered shall be deemed made
and received on the date of such delivery.
Notices given by mail in the manner
specified in Section 19(g) shall be deemed
to have been made, delivered and received
five days after the date of mailing. A
notice telecopied in the manner specified
in Section 19(g) shall be deemed to have
been made and received on the First
business day following the day on which it
was sent.
5. The Owner and the Payee agree to execute and deliver any
further documents which may be necessary or desirable in order
to reflect this amendment in the floating change trust deed
issued pursuant to Section 18 of the Royalty Agreement and
registered against title of the Property.
6. The Owner and the Payee confirm that other than the amendments
set out above, the Royalty Agreement continues in full force
and affect and there are no other amendments or agreements oral
or otherwise.
IN WITNESS WHEREOF the parties hereto have executed this
Amending Agreement as of the day and year first above written.
Signed in the ) XXXXXX RESOURCES INC.
presence of: )
)
[SIG] )
---------------- ) Per: [SIG]
Witness ) -------------------
) c/s
Signed in the ) REPADRE CAPITAL CORPORATION
presence of: )
)
[SIG] )
---------------- ) Per: [SIG]
Witness ) -------------------
c/s
