MINERAL PROPERTY OPTION AGREEMENT
THIS AGREEMENT is dated for reference the 22nd day of
December, 1998.
BETWEEN: MIRANDA INDUSTRIES INC.
Xxxxx 000 - 0000 Xxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
(the "Optionor") OF THE FIRST PART
AND: EXPLORE TECHNOLOGIES, INC.
Suite 1880, Royal Centre
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
("Explore Tech") OF THE SECOND PART
WHEREAS the Optionor holds the option to acquire an undivided
100% right, title and interest in and to certain mineral claims
under the Underlying Agreement as hereinafter defined;
AND WHEREAS Explore Tech is desirous of acquiring a 50% right,
title and interest in and to the Property as hereafter defined on
the terms and conditions contained in this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of
the premises and the mutual covenants and agreements hereinafter
contained, the parties hereto agree as follows:
1. DEFINITIONS
1.01 In this Agreement:
(a) "Exploration and Development" means any and all
activities comprising or undertaken in connection
with the exploration and development of the
Property, the construction of a mine and mining
facilities on or in proximity to the Property and
placing the Property into commercial production;
(b) "Net Smelter Returns" shall have the meaning
ascribed by Schedule B of the Underlying Agreement
attached hereto:
(c) "Property" means and includes:
(i) the mining claims more particularly described
in Schedule AA attached hereto and forming part
hereof; and
(ii) all rights and appurtenances pertaining to the
mining claims more particularly described in
Schedule AA including all water and water
rights, rights of way, and easements, both
recorded and unrecorded, to which the Optionor
is entitled in respect thereof;
(d) "Property Acquisition Costs" means and includes all
cash payments due to XxXxxxxx under the terms of the
Underlying Agreement;
(e) "Property Expenditures" means all reasonable and
necessary monies expended on or in connection with
Exploration and Development as determined in
accordance with generally accepted accounting
principles including, without limiting the generality
of the foregoing:
(i) the cost of entering upon, surveying,
prospecting and drilling on the Property;
(ii) the cost of any geophysical, geochemical and
geological surveys relating to the Property;
(iii) all filing and other fees and charges
necessary or advisable to keep the Property
or any part or parts thereof in good standing with
any regulatory authorities having jurisdiction;
(iv) all rentals, royalties, taxes (exclusive of
all income taxes and mining taxes based on income
and which are or may be assessed against any of
the parties hereto) and any assessments
whatsoever, whether the same constitute charges on
the Property or arise as a result of the operation
thereon;
(v) the cost, including rent and finance
charges, of all buildings, machinery, tools,
appliances and equipment and related capital items
that may be erected, installed and used from time
to time in connection with Exploration and
Development;
(vi) the cost of construction and maintenance
of camps required for Exploration and Development;
(vii) the cost of transporting persons,
supplies, machinery and equipment in connection
with Exploration and Development;
(viii) all wages and salaries (including fringe
benefits as are usually paid in Canadian mineral
exploration business) of persons engaged in
Exploration and Development and any assessments or
levies made under the authority of any regulatory
body having jurisdiction with respect to such
persons or supplying food, lodging and other
reasonable needs for such persons;
(ix) all costs of consulting and other
engineering services including report
preparation;
(x) the cost of compliance with all statutes,
orders and regulations respecting environmental
reclamation, restoration and other like work
required as a result of conducting Exploration and
Development; and
(xi) all costs of searching for, digging, working,
sampling, transporting, mining and procuring
diamonds, other minerals, ores, and metals from
and out of the Property;
(f) "Underlying Agreement" means that certain agreement
with respect to the Property
dated November 20, 1997 between Xxxxx XxXxxxxx
("XxXxxxxx") and Miranda Industries Inc. and attached
hereto as Schedule BB.
2. ACQUISITION OF INTEREST
2.01 The Optionor hereby grants to Explore Tech the
exclusive right and option to acquire an undivided 50% right,
title and interest in and to the Property for total consideration
consisting of cash payments to the Optionor totalling $1000 and
the incurrence of Property Expenditures totalling $150,000 to be
made as follows:
(a) upon execution of this Agreement, the payment
to the Optionor of the sum of $1000;
(b) by December 31, 1999 the incurrence of Property
Expenditures in the amount of $10,000;
(c) by December 31, 2001, the incurrence of
Property Expenditures in the cumulative amount
of $150,000.
2.02 Explore Tech shall pay all Property Acquisition Costs
until Explore Tech has earned an undivided 50% right, title and
interest in and to the Property pursuant to paragraph 2.01.
2.03 The Optionor shall be the operator with respect to the
incurrence of Property Expenditures pursuant to subparagraphs
2.01(b) and (c). The Optionor agrees to conduct its operatorship
of the Property in a diligent and workmanlike fashion at a cost
no greater than standard industry rates.
2.04 Upon making the cash payments, Property Maintenance
Costs, and Property Expenditures as specified in paragraph 2.01,
Explore Tech shall have acquired an undivided 50% right, title
and interest in and to the Property, subject to the royalties
referred to in section 3.
2.05 This Agreement is an option only and the doing of any
act or the making of any payment by Explore Tech shall not
obligate Explore Tech to do any further acts or make any further
payments.
2.06 Explore Tech recognizes that this agreement is subject
to an Underlying Agreement whereby the Optionor has the option to
acquire its 100% interest in the Property. Explore Tech hereby
agrees that this Agreement is subject to the terms of the
Underlying Agreement and Explore Tech hereby agrees to be bound
by the terms of the Underlying Agreement, insofar as it is
applicable.
3. ROYALTY
3.01 Explore Tech agrees that the Property shall be subject
to a Net Smelter Return royalty pursuant to section 4 of the
Underlying Agreement.
4. TRANSFER OF TITLE
4.01 Upon execution of this Agreement, Explore Tech shall be
entitled to record this Agreement against title to the Property.
4.02 Upon completion by Explore Tech of the Property
Expenditures referred to in subparagraph 2.01 (c), the Optionor
shall deliver to Explore Tech a duly executed Quitclaim Deed for
the transfer of an undivided 50% interest in and to the Property
to Explore Tech.
5. JOINT VENTURE
5.01 Upon Explore Tech acquiring an interest in the Property
pursuant to paragraph 2.01, the Optionor and Explore Tech agree
to join and participate in a single purpose joint venture ( the "
Joint Venture") for the purpose of further exploring and
developing and, if economically and politically feasible,
constructing and operating a mine on the Property. The Joint
Venture shall be governed by an agreement which shall be entered
into by the parties incorporating the principles outlined in
Schedule CC hereto.
6. RIGHT OF ENTRY
6.01 During the currency of this Agreement, Explore Tech,
its servants, agents and workmen and any persons duly authorized
by Explore Tech, shall have the right of access to and from and
to enter upon and take possession of and prospect, explore and
develop the Property in such manner as Explore Tech in its sole
discretion may deem advisable for the purpose of incurring
Property Expenditures as contemplated by section 2, and shall
have the right to remove and ship therefrom ores, minerals,
metals, or other products recovered in any manner therefrom for
testing or sampling purposes only.
7. COVENANTS OF EXPLORE TECH
7.01 Explore Tech covenants and agrees that:
(a) during the term of the option herein, Explore Tech
shall keep the Property clear of all liens,
encumbrances and other charges and shall keep the
Optionor and XxXxxxxx indemnified in respect
thereof;
(b) Explore Tech shall carry on all operations on the
Property in a good and workmanlike manner and in
compliance with all applicable governmental
regulations and restrictions including but not
limited to the posting of any reclamation bonds as
may be required by any governmental regulations or
regulatory authorities;
(c) during the term of the option herein, Explore Tech
shall pay or cause to be paid any rates, taxes,
duties, royalties, Workers' Compensation or other
assessments or fees levied with respect to its
operations thereon and in particular Explore Tech
shall pay the yearly claim maintenance payments
necessary to maintain the claims in good standing;
(d) Explore Tech shall maintain books of account in
respect of its expenditures and operations on the
Property and, upon reasonable notice, shall make
such books available for inspection by
representatives of the Optionor or XxXxxxxx;
(e) Explore Tech shall allow any duly authorized agent
or representative of the Optionor or XxXxxxxx to
inspect the Property at reasonable times and
intervals and upon reasonable notice given to
Explore Tech, provided however, that it is agreed
and understood that any such agent or representative
shall be at his own risk in respect of, and Explore
Tech shall not be liable for, any injury incurred
while on the Property, howsoever caused;
(f) Explore Tech shall allow the Optionor or XxXxxxxx
access at reasonable times to all maps, reports,
sample results and other technical data prepared or
obtained by Explore Tech in connection with its
operations on the Property;
(g) Explore Tech shall indemnify and save the Optionor
and XxXxxxxx harmless of and from any and all costs,
claims, loss and damages whatsoever incidental to or
arising out of any work or operations carried out by
or on behalf of Explore Tech on the Property,
including any liability of an environmental nature.
8. REPRESENTATIONS AND WARRANTIES
8.01 The Optionor hereby represents and warrants that:
(a) the Underlying Agreement is in good standing;
(b) it has not done anything whereby the mineral claims
comprising the Property may be in any way
encumbered, other than by the Underlying Agreement
and the royalties specified in section 3;
(c) it has full corporate power and authority to enter
into this Agreement and the entering into of this
Agreement does not conflict with any applicable laws
or with its charter documents or any contract or
other commitment to which it is party; and
(d) the execution of this Agreement and the performance
of its terms have been duly authorized by all
necessary corporate actions including the resolution
of its Board of Directors.
8.02 Explore Tech hereby represents and warrants that:
(a) it has full corporate power and authority to enter
into this Agreement and the entering into of this
Agreement does not conflict with any applicable laws
or with its charter documents or any contract or
other commitment to which it is party; and
(b) the execution of this Agreement and the performance
of its terms have been duly authorized by all
necessary corporate actions including the resolution
of its Board of Directors.
9. ASSIGNMENT
9.01 With the consent of the other party, which consent
shall not be unreasonably withheld, Explore Tech, the Optionor
and XxXxxxxx each has the right to assign all or any part of its
interest in this Agreement and or in the Property, subject to the
terms and conditions of this Agreement. It shall be a condition
precedent to any such assignment that the assignee of the
interest being transferred agrees to be bound by the terms of
this Agreement, insofar as they are applicable.
10. CONFIDENTIALITY OF INFORMATION
10.01 The parties to this Agreement (the "Parties")
shall treat all data, reports, records and other information of
any nature whatsoever relating to this Agreement and the Property
as confidential, except where such information must be disclosed
for public disclosure requirements of a public company.
11. TERMINATION
11.01 Until such time as Explore Tech has acquired an
undivided 50% interest in the Property pursuant to section 2,
this Agreement shall terminate upon any of the following events:
(a) upon the failure of Explore Tech to make a payment
or incur Property Expenditures
required by and within the time limits prescribed by
paragraph 2.01;
(b) in the event that Explore Tech, not being at the
time in default under any provision of this
Agreement, gives 30 day's written notice to the
Optionor of the termination of this Agreement;
(c) in the event that Explore Tech shall fail to comply
with any of its obligations hereunder, other than
the obligations contained in paragraph 2.01, and
subject to paragraph 12.01, and within 30 days of
receipt by Explore Tech of written notice from the
Optionor of such default, Explore Tech has not:
(i) cured such default, or commenced
proceedings to cure such default and
prosecuted same to completion without
undue delay; or
(ii) given the Optionor notice that it denies
that such default has occurred.
In the event that Explore Tech gives notice that it denies that a
default has occurred, Explore Tech shall not be deemed in
default until the matter shall have been determined finally
through such means of dispute resolution as such matter has been
subjected to by either party.
11.02 Upon termination of this Agreement under paragraph 11.01,
Explore Tech shall:
(a) transfer its interest in title to the Property, in
good standing to the Optionor free and clear of all
liens, charges, and encumbrances;
(b) turn over to the Optionor copies of all maps,
reports, sample results, contracts and other data
and documentation in the possession of Explore
Tech or, to the extent within Explore Tech's
control, in the possession of its agents,
employees or independent contractors, in
connection with its operations on the Property;
and
(c) ensure that the Property is in a safe condition
and complies with all environmental and safety
standards imposed by any duly authorized
regulatory authority.
11.03 Upon the termination of this Agreement under
paragraph 11.01 , Explore Tech shall cease to be liable to the
Optionor in debt, damages or otherwise save for the performance
of those of its obligations which theretofore should have been
performed, including those obligations in paragraph 11.02.
11.04 Upon termination of this Agreement, Explore Tech
shall vacate the Property within a reasonable time after such
termination, but shall have the right of access to the Property
for a period of six months thereafter for the purpose of
removing its chattels, machinery, equipment and fixtures.
12 FORCE MAJEURE
12.01 The time for performance of any act or making any
payment or any expenditure required under this Agreement shall be
extended by the period of any delay or inability to perform due
to fire, strikes, labour disturbances, riots, civil commotion,
wars, acts of God, any present or future law or governmental
regulation, any shortages of labour, equipment or materials, or
any other cause not reasonably within the control of the party
in default, other than lack of finances.
13. REGULATORY APPROVAL
13.01 If this Agreement is subject to the prior approval
of any securities regulatory bodies, then the Parties shall use
their best efforts to obtain such regulatory approvals.
14. NOTICES
14.01 Any notice, election, consent or other writing
required or permitted to be given hereunder shall be deemed to be
sufficiently given if delivered or mailed postage prepaid or if
given by telegram, telex or telecopier, addressed as follows:
In the case of the Optionor: Miranda Industries Inc.
Xxxxx 000 - 0000 Xxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Telecopier: (000)000-0000
In the case of Explore Technologies, Inc.:
Explore Technologies, Inc.
Suite 1880 Royal Centre
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Telecopier: (000) 000-0000
and any such notice given as aforesaid shall be deemed to have
been given to the parties hereto if delivered, when delivered, or
if mailed, on the third business day following the date of
mailing, or, if telegraphed, telexed or telecopied, on the same
day as the telegraphing, telexing or telecopying thereof PROVIDED
HOWEVER that during the period of any postal interruption in
Canada any notice given hereunder by mail shall be deemed to have
been given only as of the date of actual delivery of the same.
Any party may from time to time by notice in writing change its
address for the purposes of this paragraph 14.01.
15. GENERAL TERMS AND CONDITIONS
15.01 The parties hereto hereby covenant and agree that
they will execute such further agreements, conveyances and
assurances as may be requisite, or which counsel for the parties
may deem necessary to effectually carry out the intent of this
Agreement.
15.02 This Agreement shall constitute the entire
agreement between the parties with respect to the Property. No
representations or inducements have been made save as herein set
forth. No changes, alterations or modifications of this
Agreement shall be binding upon either party until and unless a
memorandum in writing to such effect shall have been signed by
all parties hereto. This Agreement shall supersede all previous
written, oral or implied understandings between the parties with
respect to the matters covered hereby.
15.03 Time shall be of the essence of this Agreement.
15.04 The titles to the sections in this Agreement shall
not be deemed to form part of this Agreement but shall be
regarded as having been used for convenience of reference only.
15.05 Unless otherwise noted, all currency references
contained in this Agreement shall be deemed to be references to
United States funds.
15.06 Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision shall be
prohibited by or be invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
15.07 The Schedules to this Agreement shall be construed
with and as an integral part of this Agreement to the same extent
as if they were set forth verbatim herein. Defined terms
contained in this Agreement shall have the same meanings where
used in the Schedules.
15.08 This Agreement shall be governed by and interpreted in
accordance with the laws of British Columbia and the laws of
Canada applicable therein.
15.09 This Agreement shall enure to the benefit of and
be binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
IN WITNESS WHEREOF this Agreement has been executed by the
parties hereto as of the day and year first above written.
THE COMMON SEAL OF MIRANDA
INDUSTRIES INC. was hereunto affixed C/S
in the presence of:
/s/ Xxxxxx Xxxxx
/s/ Xxxxxx Xxxx
THE COMMON SEAL OF EXPLORE C/S
TECHNOLOGIES, INC. was hereunto affixed
in the presence of:
/s/ Xxxxx Xxxx
SCHEDULE "AA"
PROPERTY DESCRIPTION
Claim Name: File Date: NMC# Sec: T & R
Dune #1 November 18, 1997 781565 3 T16N R32E
Dune #2 November 18, 1997 781566 3 T16N R32E
Dune #3 November 18, 1997 781567 3 T16N R32E
Dune #4 November 18, 1997 781568 3 T16N R32E
Dune #5 November 18, 1997 781569 3 T16N R32E
Dune #6 November 18, 1997 781570 3 T16N R32E
Dune #7 November 18, 1997 781571 3 T16N R32E
Dune #8 November 18, 1997 781572 3 T16N R32E
Dune #22 October 21, 1998 796395 0,0 X00X X00X
Xxxx #00 October 21, 1998 796396 0,0 X00X X00X
Xxxx #00 October 21, 1998 796397 3 T16N R32E
SCHEDULE "BB"
ATTACHMENT: AGREEMENT DATED
NOVEMBER 20, 1997, BETWEEN XXXXX XXXXXXXX
AND MIRANDA INDUSTRIES INC.
SCHEDULE "CC"
PRINCIPLES TO BE INCORPORATED IN
JOINT VENTURE AGREEMENT
1. The initial beneficial interest of the parties (the "Joint
Venturers") in the Joint Venture, including the mineral claims
comprising the property, any mining leases, surface rights,
building, equipment, plant, installations, infrastructure,
housing, airport and all other facilities, rights and
interests shall be Explore Tech as to 50% and the Optionor as
to 50%. The deemed contribution of each party to the Joint
Venture shall be $200,000.
2. Upon the formation of the Joint Venture, a Management
Committee consisting of a representative of each Joint
Venturer shall be formed to manage the activities of the
Operator on the Claim or in relation thereto, including but
not limited to production decisions and considering and
approving all work programs.
3. Each Joint Venturer's representative to the Management
Committee shall be entitled to cast that number of votes which
is equal in number to the percentage beneficial interest in
the Joint Venture held by the respective Joint Venturer in
accordance with this Schedule CC. All decisions and approvals
shall be made by a simple majority of the votes cast.
Notwithstanding the foregoing, if a Joint Venturer at any time
fails to contribute, pro rata according to its beneficial
interest in the Joint Venture, to any annual work program
other than one to which it has elected not to contribute
pursuant to paragraph 6 of this Schedule CC, the Management
Committee shall immediately be deemed to be and shall be
composed only of the representative of the other Joint
Venturers.
4. The initial Operator of the Joint Venture shall be Explore
Tech unless and until such time as Explore Tech's beneficial
interest in the Joint Venture is reduced below 50%, at which
point the Management Committee shall appoint an Operator. The
Operator shall report to and take instructions from the
Management Committee.
5. After formation of the Joint Venture, unless a Joint Venturer
has elected not to participate or has elected to participate
to a lesser extent than its then existing beneficial interest
in a program pursuant to paragraph 6 of this Schedule CC, each
Joint Venturer shall participate in funding future Property
Costs in proportion to its respective beneficial interest in
the Joint Venture. A Joint Venturer may elect to participate
in a program to a lesser extent than its then existing
respective beneficial interest in the Joint Venture. For the
purposes of this Schedule CC, "Property Costs" shall mean all
funds required following formation of the Joint Venture to
acquire, explore for, develop, build, operate and maintain an
efficient mine on the Claim as called for by the Operator in
accordance with the directives of the Management
Committee of the Joint Venture.
6. The Operator shall submit an annual work program to the
Management Committee for approval. If the Operator fails to
submit such a program, the Non-Operator may submit such a
program. Before a production decision is made with respect
to the Property, a Joint Venturer may elect not to participate
or to participate to a lesser extent than its then existing
beneficial interest in any annual work program before costs
have been incurred thereunder, in which event the provisions
of paragraphs 7 and 8 of this Schedule CC shall govern. The
election of any party to participate must be made within 30
days of the submission of an annual work program and budget,
failing which such party shall be deemed to have elected not
to participate in such program.
7. If the Joint Venturer elects not to participate or to
participate to a lesser extent than its then existing
beneficial interest in any annual work program pursuant to
paragraph 6 of this Schedule CC, that Joint Venturer's
beneficial interest in the Joint Venture shall be reduced
while that of the other Joint Venturer is increased so that,
subject to paragraph 9 and 10 of this Schedule CC, the
beneficial interest of each Joint Venturer shall be at all
times proportionate to the sum of the total Property Costs of
both Joint Venturers.
8. If a Joint Venturer elects not to participate or to
participate to a lesser extent than its then existing
beneficial interest in any annual work program pursuant to
paragraph 6 of this Schedule CC, and provided that its
beneficial interest has not been reduced below 5%, that Joint
Venturer may elect to participate in the funding of future
Property Costs, commencing with the next annual work program,
to the extent of its then existing beneficial interest in the
Joint Venture.
9. If the beneficial interest of a Joint Venturer (the "Diluted
Venturer") is reduced below 5%, the Diluted Venturer shall be
deemed to have assigned and conveyed its beneficial and legal
interest in the Joint Venture to the other Joint Venturer and
shall be entitled thereafter, in lieu of a Joint Venture
interest, to a royalty from the Property equivalent to 2% of
net smelter returns. The Property shall be immediately
transferred into the other Joint Venturer's name alone and the
Joint Venture Agreement shall thereby be terminated subject to
any then outstanding liabilities between the parties.
10. If a Joint Venturer (the "Non-Contributing Venturer") at any
time fails to contribute, pro rata according to its beneficial
interest in the Joint Venture, to any annual work program
other than one to which it has elected not to contribute
pursuant to paragraph 6 of this Schedule CC, the Non-
Contributing Venturer shall be deemed to have assigned and
conveyed its beneficial and legal interest in the Joint
Venture to the other Joint Venturer and shall be entitled
thereafter, in lieu of a Joint Venture interest to a royalty
from the Property equivalent to 2 % of net smelter returns.
The Property shall be immediately transferred into the other
Joint Venturers name alone and the Joint Venture Agreement
shall be terminated subject to any then outstanding
liabilities between the parties.
11. Each Joint Venturer shall provide to the other all reports,
maps, logs or other data whatsoever relating to the Property
in their possession or otherwise under their control.
12. Any dispute arising under this agreement shall be forthwith
submitted to a single arbitrator in accordance with the
provisions of the Commercial Arbitration Act (British
Columbia).
