EXPLORATION AND MINING LEASE (ND Claims - Elko County, Nevada)
EXPLORATION
AND MINING LEASE
(ND Claims - Elko County,
Nevada)
THIS MINING LEASE is made
effective this second (11th) day of August
2008,
by and between
ALTAIR
MINERALS, INC.,
a Nevada corporation (hereinafter referred to as “Owner”); and BRAEDEN
VALLEY MINES INC.., a Nevada corporation
(hereinafter referred to as “Lessee”).
RECITALS
A. Owner
owns and possesses various unpatented lode mining claims in Elko County, Nevada.
The location, nature, and extent of these real property interests are more
particularly described on Exhibit A attached hereto. These property rights,
together with all ores, minerals, and mineral rights (except those expressly
reserved in patents and other documents of record), and the right to explore
for, mine, and remove the same, and improvements, easements, licenses,
rights-of-way and other interests appurtenant thereto, shall be referred to
collectively as the “Property”.
B. The
parties now desire to enter into an agreement giving Lessee the exclusive right
to explore, develop, and mine the Property.
THEREFORE,
the parties have agreed as follows:
SECTION ONE
Lease Term and
Royalties
1.1 Term of Lease. Owner hereby
leases the Property to Lessee for an initial term of fifteen (15) years. The Lease shall
be extended for so long thereafter as there is production of minerals from the
Property. The Effective Date of this Agreement shall be the fifteenth (15th) day of
May 2008.
1.2 Advance Minimum
Royalty. In consideration for this Agreement, Lessee shall be required to
complete cash payments on account of advance minimum royalties in accordance
with the following schedule:
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a.
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FIVE
THOUSAND UNITED STATES DOLLARS (US $5,000.00) upon execution of this
Agreement to hold the Property for one year from the Effective Date to be
delivered to the Owner.
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b.
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TEN
THOUSAND UNITED STATES DOLLARS (US $10,000.00) on the first anniversary of
the Effective Date.
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c.
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FIFEEN
THOUSAND UNITED STATES DOLLARS (US $ 15,000.00) on the second anniversary
of the Effective Date.
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d.
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TWENTYFIVE
THOUSAND UNITED STATES DOLLARS (US $ 25,000.00) on the third and each
subsequent anniversary of the Effective Date, so long as this Agreement
remains in effect.
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The term
“Advance Minimum Royalty” shall mean that Owner will receive no production
royalties (Section 1.3 below) until Lessee has recaptured all advance royalty
payments previously made to Owner under this Agreement. However, payments made
to Owner in any given lease year in which production occurs shall not be less
than the advance minimum royalty payable in that year had no production
occurred. After recapture, Lessee shall pay production royalties in excess of
the annual advance minimum royalties paid to Owner.
These
advance minimum royalty payments shall be in lieu of any obligation on the part
of Lessee, express or implied, to explore, develop, mine, or perform any work on
or in connection with the Property.
1.3 Production Royalties.
Upon commencing production of valuable minerals from the Property, Lessee shall
pay Owner a royalty on production equal to four percent (4 %) of net smelter
returns. The term “net smelter returns” shall mean the gross value of ores or
concentrates shipped to a smelter or other processor (as reported on the smelter
settlement sheet) less the following expenses actually incurred and borne by
Lessee:
a. Sales,
use, gross receipts, severance, and other taxes, if any, payable with respect to
severance, production, removal, sale or disposition of the minerals from the
Property, but excluding any taxes on net income;
b. Charges
and costs, if any, for transportation of concentrates from the mine or mill to
places where the minerals are smelted, refined and/or sold; and
c. Charges,
costs (including assaying and sampling costs specifically related to smelting
and/or refining), and all penalties, if any, for smelting and/or
refining.
In the
event smelting or refining are carried out in facilities owned or controlled, in
whole or in part, by Lessee, charges, costs and penalties for such operations
shall mean the amount Lessee would have incurred if such operations were carried
out at facilities not owned or controlled by Lessee then offering comparable
services for comparable products on prevailing terms.
Payment
of production royalties shall be made not later than thirty (30) days after
receipt of payment from the smelter. All payments shall be accompanied by a
statement explaining the manner in which the payment was
calculated.
1.4 Royalty Purchase. Lessee shall have the right
at any time to purchase up to two of the four royalty percentage points, and
thus reduce the Production Royalty from 4.0% to 2.0%, by paying to Owner the sum
of US$1,000,000 for the first royalty percentage point purchased, and by paying
to Owner the sum of US$ 2,000,000 for the second royalty percentage point
purchased.
1.5 Notice of
Purchase. Lessee
shall exercise its right of purchase hereunder by delivering a written notice to
Owner setting forth the portion of the Production Royalty on which it is
exercising its right of purchase, together with a bank draft or certified check
or such other form of payment as is acceptable to Owner for the purchase price
of the portion of the Production Royalty being purchased.
1.6 Delivery of Data.
Upon execution of this Agreement Owner shall deliver to Lessee copies of all
maps, deeds, and other documents in his possession, which pertain to the
Property title and boundaries, prior workings, production history, and so
forth.
1.7 Lesser Interest. If
Owner holds a lesser interest in any part of the Property, the advance and
production royalties specified in Sections 1.3 and 1.4 shall be reduced
proportionally on an acreage basis or ownership percentage basis to reflect the
actual ownership of the Owner.
1.8 After-Acquired
Interests. If at any time during the term of this Lease, lessee directly
or indirectly stakes or otherwise acquires any interest in mineral claims or
other forms of mineral tenure located wholly or partly within two (2) miles of
the boundary of the Property as it existed at the Effective Date, then Lessee
shall forthwith give notice to the Owner of such staking or acquisition, the
costs thereof and all details in its possession with respect to the nature of
the claims, or other forms of tenure and the known
mineralization. Upon delivery of such notice, the Owner may elect by
notice to Lessee to require that Lessee’s interest in such mineral claims or
other forms of tenure be included in and thereafter form part of the
Property. The staking or acquisition costs of any interest as
aforesaid shall not constitute minimum advance royalties under section 1.2
hereof. Any ownership interests, possessory interests, or other property and
royalty interests pertaining to the Property acquired by Owner following
execution of this Agreement shall become subject to the terms and provisions of
this Agreement.
SECTION TWO
Exploration and Mining
Operations
2.1 Right to Explore. Develop and
Mine. Upon execution of this Agreement, Lessee shall have the right to
make geological investigations and surveys, to drill on the Property by any
means, and to have all the rights and privileges incident to ownership of the
Property, including without limitation the right to mine underground or on the
surface, extract by leaching in place or any other means, remove, save, mill,
concentrate, treat, and sell or otherwise dispose of ores, concentrates,
mineral-bearing earth and rock and other products therefrom.
2.2 Conduct of Work. Lessee shall
perform its mining activities on the Property in accordance with good mining
practice, shall comply with the applicable laws and regulations relating to the
performance of mining operations on the Property, and shall comply with the
applicable worker’s compensation laws of the State of Nevada.
2.3 Liability and
Insurance. During the term of the Agreement, Lessee shall indemnify and
hold Owner harmless from any claims, demands, liabilities or liens arising out
of Lessee’s activities on the Property. To that end, Lessee shall immediately
obtain and carry a policy of public liability insurance in the amount of
$1,000,000.00 or more for personal injury and $100,000.00 for property damage,
protecting Owner against any claims for injury to persons or damage to property
resulting from Lessee’s operations.
2.4 Liens. Lessee shall
keep the Property free and clear from any and all mechanics’ or laborers’ liens
arising from labor performed on or material furnished to the Property at
Lessee’s request. However, a lien on the Property shall not constitute a default
if Lessee, in good faith, disputes the validity of the claim, in which event the
existence of the lien shall constitute a default thirty (30) days after the
validity of the lien has been adjudicated adversely to Lessee.
2.5 Installation of Equipment. Lessee may
install, maintain, replace, and remove during the term of this Agreement any and
all mining machinery, equipment, tools, and facilities, which it may desire to
use in connection with its mining activities on the Property. Upon termination
of this Agreement for any reason, Lessee shall have a period of six (6) months
following such termination during which it may remove all or part of the above
items at its sole cost and expense. Owner may, at Owner’s discretion, require
Lessee to remove all of Lessee’s equipment from the Property upon termination.
Any equipment remaining on the Property after six (6) months shall become the
property of Owner.
2.6 Acquisition of Permits. Lessee shall
acquire all federal, state, and county permits
required
for its operations. Lessee shall be responsible for reclamation of only those
areas disturbed by Lessee’s activities. In the event that Lessee is required to
post a reclamation bond, the bond will revert to Lessee upon satisfactory
completion of the reclamation program.
2.7 Commingling of Ore. Lessee shall
have the right to commingle ores from the Property with ores from other
properties provided that Lessee weighs and samples Owner’s ores in accordance
with sound mining and metallurgical practices and accounts for Owner’s share of
production.
2.8 Drill Logs. Assays, and
Maps. Copies (including digital copies) of all drill logs, exploration
information, assays, maps, metallurgical studies, and other factual information
shall be furnished by Lessee to Owner annually, and upon the expiration or
termination of this Agreement.
2.9 Reports. Lessee shall
keep Owner reasonably informed as to the progress and nature of Lessee’s
operations on the Property.
SECTION THREE
Inspection by
Owner
3.1 Inspection of Property Owner, or
its authorized agents or representatives, shall be permitted to enter upon the
Property at all reasonable times for the purpose of inspection, but shall enter
upon the Property at its own risk and so as not to hinder unreasonably the
operations of Lessee. Owner shall indemnify and hold Lessee harmless from any
damage, claim, or demand by reason of injury to Owner or its agents or
representatives on the Property or the approaches thereto.
3.2 Inspection of
Accounts. Lessee agrees to keep accurate books of account reflecting the
mining operations on the Property, and Owner shall have the right, either
personally or through a qualified accountant of its choice and at its cost, to
examine and inspect the books and records of Lessee pertaining to the mining,
milling and shipping operations of Lessee.
SECTION FOUR
Claim Maintenance
and Fees Taxes
4.1 Taxes. Lessee shall
pay all claim maintenance fees due on the property sixty (60) days prior to
their due date, and shall pay all taxes levied or assessed on any improvements
placed on the Property by Lessee. Upon termination of this Agreement for any
reason, taxes shall be apportioned between the parties on a calendar year basis
for the remaining portion of the calendar year. However, Owner shall not be
liable for taxes on any tools, equipment, machinery, facilities, or improvements
placed upon the Property unless Lessee fails to remove them within the time
provided by this Agreement.
SECTION
FIVE
Termination and
Default
5.1 Termination. Lessee
shall have the right to terminate this Agreement at its sole discretion at any
time by giving written notice to Owner. Upon termination, Owner shall retain all
payments previously made as liquidated damages and this Agreement shall cease
and terminate. Lessee will provide Owner with all factual data, maps, assays,
and reports pertaining to the Property. Lessee will also deliver a recordable
Quitclaim Deed to Owner.
5.2 Default. If Lessee
fails to perform its obligations under this Agreement, and in particular fails
to make any payment due to Owner hereunder, Owner may declare Lessee in default
by giving Lessee written notice of default which specifies the obligation(s)
which Lessee has failed to perform. If Lessee fails to remedy a default in
payment within fifteen days (15) of receiving the notice
of default, and thirty (30) days for any other default, Owner may terminate this
Agreement and Lessee shall peaceably surrender possession of the Property to
Owner. Notice of termination shall be in writing and served in accordance with
this Agreement.
5.3 Obligations Following
Termination. In the event of voluntary or involuntary termination, Lessee
shall surrender possession of the Property to Owner and shall have no further
liability or obligation under this Agreement except for its obligation (1) to
pay annual maintenance fees and its apportioned share of taxes, as provided for
in Section Four; (2) to pay any production royalties then owed to Owner; (3) to
pay the cost of removal of all equipment as stated in Section 3.5; (4) to
fulfill its reclamation responsibility as stated in Section 3.6; (5) to satisfy
any accrued obligations or liabilities; and (6) to satisfy any other obligation
imposed by this agreement or by law. By surrendering the Property to Owner,
Lessee shall be released from its obligation to make any advance royalty
payments not then due or accrued.
SECTION
SIX
Notices and
Payments
6.1 Notices. All notices
to Lessee or Owner shall be in writing and shall be sent by
certified
or registered mail, return receipt requested, to the addresses below. Notices
sent by certified mail shall be effective five days after the date of mailing,
or upon actual receipt, whichever is the earlier. Notice of any change in
address shall be given in the same manner.
TO
OWNER:
Altair
Minerals, Inc.
0000
Xxxxxxx Xxxxx
Xxxxxx,
Xxxxxx 00000
TO
LESSEE:
00000
Xxxxxx Xxxxxxxxxx
Xxxxx
000
Xxxxxxxx,
Xxxxxxxxxx
XXX
00000
6.2 Payments. All
payments shall be in U.S. currency payable to Owner.
SECTION
SEVEN
Assignment
7.1 Assignment. Lessee
may assign this Agreement at any time, in whole or in part, subject to the
written consent of Owner, which shall not be unreasonably withheld, and subject
to the assignee agreeing with Owner to be bound by the all of the terms of this
Agreement.
SECTION
EIGHT
Warranty of Title
8.1 Warranty. Owner
warrants and represents, subject only to the superior title of the United States
of America, to the best of its knowledge and belief at the execution of this
Agreement, that it is the owner of the property interests described in Exhibit
A; that Owner has not created any liens or encumbrances affecting the Property;
and that Owner has and will continue to have the right to commit its interest in
the Property to this Agreement Owner further warrants that it is not aware of
any disputes or legal actions affecting the Property.
8.2 Examination of Title Documents.
Promptly after execution of this Agreement, Owner shall deliver to Lessee copies
of all documents bearing upon Owner’s title, interest, or ownership in the
Property. Lessee may then undertake such further investigation of the title and
status of the claims as Lessee shall deem necessary. If that investigation
should reveal defects in the title, Owner agrees to proceed forthwith to cure
said title defects to the satisfaction of Lessee; and in the event it should not
do so, Lessee may cure such title defects and deduct the expense incurred,
including reasonable attorney’s fees, from any payment to be made hereunder. The
deduction in each year may not exceed one-half of the advance minimum royalty
payable to Owner.
SECTION
NINE
Force
Majeure
9.1 Suspension of Obligations. If
Lessee is prevented by Force Majeure from timely performance of any of its
obligations hereunder, except the payment of money, the failure of performance
shall be excused and the period for performance shall be extended for an
additional period equal to the duration of Force Majeure. Upon the occurrence
and upon the termination of Force Majeure, Lessee shall promptly notify Owner in
writing. Lessee shall use reasonable diligence to remedy Force Majeure, but
shall not be required to contest the validity of any law or regulation or any
action or inaction of civil or military authority.
9.2 Definition of Force
Majeure. “Force Majeure” means any cause beyond a party’s reasonable
control, including law or regulation; action or inaction of civil or military
authority; inability to obtain any license, permit, or other authorization that
may be required to conduct operations on or in connection with the Property;
interference with mining operations by a lessee of oil, gas, or geothermal
resources under the Property; unusually severe weather; mining casualty;
unavoidable mill shutdown; damage to or destruction of mine plant or facility;
fire; explosion; flood; insurrection; riot; labor disputes; inability after
diligent effort to obtain workmen or material; delay in transportation; and acts
of God (but excepting any obligation to pay money).
9.3 Economic Force
Majeure. During the extended term of this Agreement, Lessee shall have
the right to suspend operations and hold the Property during periods of Economic
Force Majeure. “Economic Force Majeure” shall mean periods during which the
price of gold or other mineral commodities is too low to allow economic recovery
and sale of ore from the Property. However, lessee shall continue to pay advance
royalties during conditions of Economic Force Majeure.
SECTION
TEN
Miscellaneous
Provisions
10.1
Binding Effect.
This Agreement shall inure to the benefit of and be binding upon the parties
hereto, their respective heirs, executors, administrators, successors, and
permitted assigns.
10.2
Applicable Law.
The terms and provisions of this Agreement shall be interpreted in accordance
with the laws of the State of Nevada.
10.3
Entire
Agreement. This Agreement terminates and replaces all prior agreements,
either written, oral or implied, between the parties hereto, and constitutes the
entire agreement between the parties.
10.4
Recording Memorandum of Agreement. The
parties hereto agree to execute a Memorandum of this Agreement (short form) for
the purpose of recording same in the records of Elko County, Nevada so as to
give public notice, pursuant to the laws of the State of Nevada, of the
existence of this Agreement.
10.5
Void or Invalid Provisions.
If any term, provision, covenant or condition of this Agreement, or any
application thereof, should be held by a court of competent jurisdiction to be
invalid, void or unenforceable, all provisions, covenants and conditions of this
Agreement, and all applications thereof not held invalid, void or unenforceable,
shall continue in full force and effect and shall in no way be affected,
impaired, or invalidated thereby.
10.6
Time of the Essence. Time is
of the essence of this Agreement and each and every part thereof
10.7
Confidentiality.
During the term of this agreement, all reports and data provided by Lessee to
Owner shall be held in strictest confidence, and Owner shall not disclose such
information without Lessee’s prior written consent, except as may be required by
Regulatory Authorities.
10.8 No Partnership.
Nothing in this Agreement shall create a partnership between Owner and
Lessee.
IN WITNESS WHEREOF the parties
hereto have executed this Agreement as of the day and year first above
written.
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THE
CORPORATE SEAL OF ALTAIR
MINERALS INC. was hereunto affixed in the presence of:
/s/ Xxxxx X. Xxxxxx
Authorized
Signatory
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c/s
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THE
CORPORATE SEAL OF BRAEDEN
VALLY MINES INC. was hereunto affixed in the presence
of:
/s/ G. Xxxxx
Xxxxx
Authorized
Signatory
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EXHIBIT
A
This is
Exhibit "A" to an Agreement made as of the 15th day of
May 2008 between ALTAIR
MINERALS INC. and BRAEDEN VALLEY MINES
INC..
Altair
Minerals, Inc. is the owner or claimant (“Owner”) of the 4 unpatented mining
claims listed below (the “Property”), which are situated in Elko County,
Nevada.
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CLAIM
NAME
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BLM
NMC #
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Elko
County DOCUMENT #
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ND
1
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851630
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507219
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ND
2
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851631
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507220
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ND
3
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851632
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507221
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ND
4
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851633
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507222
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