Gold City Industries Ltd.
Exhibit 4.6
Suite 550 – 000 Xxxxxx Xxxxxx, Xxxxxxxxx, XX X0X 0X0
telephone: (000) 000-0000 fax: (000) 000-0000
email: xxxx@xxxx-xxxx.xxx Website: xxx.xxxx-xxxx.xxx
September 23, 0000
Xxxx Xxxx
Xxx 000
Xxxxx Xxxxx, XX X0X 0X0
Dear Xxxx:
Re:
Letter Agreement to Acquire the JD Mineral Claims, Xxxxxxxxx, X.X.
This letter confirms that Gold City Industries Ltd. is prepared to enter into an option agreement to acquire 100 % interest in the JD mineral claims (the “Property”) located about 8 kilometres east of Xxxxxxxxx, XX, owned by Xxx Xxxxxxxx, Xxxxxx Xxxxxx and Xxxx Xxxx (the “Vendors”), subject to a 2.5 % net smelter return (“NSR”) royalty. The Property is listed in attached Schedule A. Proposed terms are as follow:
1.
Gold City will make cash and share payments and carry out work as follows:
Date
Cash
($)
Cum. Cash ($)
Shares
Cum. Shares
Work Program ($)
Cum Work
Program ($)
Upon TSX-V Approval and completion of due diligence (60 days)
7,500
7,500
75,000
75,000
Within 12 months of TSX-V approval
22,500
30,000
75,000
150,000
50,000
50,000
Within 24 months of TSX-V approval
22,500
52,500
45,000
195,000
50,000
100,000
Within 36 months of TSX-V approval
22,500
75,000
45,000
240,000
50,000
150,000
Within 48 months of TSX-V approval
22,500
97,500
60,000
300,000
100,000
250,000
Total
97,500
300,000
250,000
2.
The Vendors will receive a 2.5% NSR royalty to be capped at $2,500,000;
3.
Gold City will have the right, after it has exercised the option to acquire the Property, to purchase the 2.5% NSR royalty from the Vendors for $1,500,000 in increments of 0.5%, at $300,000 per increment, at any time within 5 years of Gold City exercising its option to acquire the property;
4.
Gold City will have the right, but not the obligation to accelerate the payments in cash and shares, and accelerate the work program to permit Gold City to exercise its option to acquire the Property at an earlier date;
5.
Gold City will have the right to return the Property to the Vendors at any time with a minimum of two years assessment on the Property;
6.
The Vendors will have reasonable access to the Property and reports regarding the Property;
7.
Gold City will maintain the Property in good standing during the option period;
8.
If a formal agreement is required in the future, all parties agree to work diligently to prepare it;
9.
The agreement does not include the industrial mineral that is being processed on the Property for Roxul (West) Inc. or the production quarry by Rainbows and Sunshine Holdings Ltd.
This letter agreement will be subject to approval by Gold City’s board of directors, regulatory approval and due diligence.
If you are in agreement with the terms of this letter agreement please sign as indicated below.
Yours truly,
/s/ Xxxx Xxxxxxxx
Xxxx Xxxxxxxx, P.Eng.
President and CEO
Agreed to this 27th day of September, 2002
/s/ Xxxx Xxxx
Xxxx Xxxx
/s/ Xxx Xxxxxxxx
Xxx Xxxxxxxx
/s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx