MINERAL PROPERTY OPTION AGREEMENT
THIS AGREEMENT is dated for reference the 18th day of
February, 1999.
BETWEEN: MIRANDA INDUSTRIES INC.
Xxxxx 000 - 0000 Xxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
(the "Optionor") OF THE FIRST PART
AND: XXXXXX TECHNOLOGIES INC.
Suite 1880, Royal Centre
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
("Xxxxxx") OF 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 Xxxxxx is desirous of acquiring a 50% right, title
and interest in and to the Property as hereinafter 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) "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;
(c) "Property Acquisition Costs" means and
includes all cash payments due to Rice under
the terms of the Underlying Agreement. In
such cases where common stock of Miranda
Industries Inc. ("Miranda") (the "Shares")
is to be issued to Rice under the terms of
the Underlying Agreement, Xxxxxx shall pay to
Miranda a sum equal to the average closing
price of Miranda common stock for the 15 full
trading days immediately preceding the date
of the event that triggers the requirement
for the issuance of Shares under the
Underlying Agreement.
(d) "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;
(e) "Underlying Agreement" means that certain
agreement with respect to the Property dated
February 12, 1997 between Xxxx Xxxx ("Xxxx")
and Miranda Industries Inc. and attached hereto
as Schedule BB.
2. ACQUISITION OF INTEREST
2.01 The Optionor hereby grants to Xxxxxx 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 $250,000 to be
made as follows:
(a) upon execution of this Agreement, the payment
to the Optionor of the sum of $1000;
(b) by February 28, 2000 the incurrence of
Property Expenditures in the amount of $10,000;
(c) by February 28, 2002, the incurrence of
Property Expenditures in the cumulative
amount of $250,000.
2.02 Xxxxxx shall pay all Property Acquisition Costs until
Xxxxxx 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,
Xxxxxx shall have acquired an undivided 50% right, title and
interest in and to the Property.
2.05 This Agreement is an option only and the doing of
any act or the making of any payment by Xxxxxx shall not
obligate Xxxxxx to do any further acts or make any further
payments.
2.06 Xxxxxx recognises that this agreement is subject
to an Underlying Agreement whereby the Optionor has the
option to acquire its 100% interest in the Property.
Xxxxxx hereby agrees that this Agreement is subject to the
terms of the Underlying Agreement and Xxxxxx hereby agrees to
be bound by
the terms of the Underlying Agreement, insofar as it is
applicable.
3. TRANSFER OF TITLE
3.01 Upon execution of this Agreement, Xxxxxx shall
be entitled to record this Agreement against title to the
Property.
3.02 Upon completion by Xxxxxx of the Property
Expenditures referred to in subparagraph 2.01 (c), the
Optionor shall deliver to Xxxxxx a duly executed Quitclaim
Deed for the transfer of an undivided 50% interest in
and to the Property to Xxxxxx.
4. JOINT VENTURE
4.01 Upon Xxxxxx acquiring an interest in the
Property pursuant to paragraph 2.01, the Optionor and Xxxxxx
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.
5. RIGHT OF ENTRY
5.01 During the currency of this Agreement, Xxxxxx, its
servants, agents and workmen and any persons duly authorized by
Xxxxxx, 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 Xxxxxx 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.
6. COVENANTS OF XXXXXX
6.01 Xxxxxx covenants and agrees that:
(a) during the term of the option herein, Xxxxxx
shall keep the Property clear of all liens,
encumbrances and other charges and shall keep
the Optionor and Rice indemnified in respect
thereof;
(b) Xxxxxx 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, Xxxxxx
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
Xxxxxx shall pay the yearly claim maintenance
payments necessary to maintain the claims in
good standing;
(d) Xxxxxx 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 Rice;
(e) Xxxxxx shall allow any duly authorized agent or
representative of the Optionor or Rice to
inspect the Property at reasonable times and
intervals and upon reasonable notice given to
Xxxxxx, provided however, that it is agreed and
understood that any such agent or representative
shall be at his own risk in respect of, and
Xxxxxx shall not be liable for, any injury
incurred while on the Property, howsoever
caused;
(f) Xxxxxx shall allow the Optionor or Rice access
at reasonable times to all maps, reports,
sample results and other technical data
prepared or obtained by Xxxxxx in connection
with its operations on the Property;
(g) Xxxxxx shall indemnify and save the Optionor
and Rice 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 Xxxxxx
on the Property, including any liability of an
environmental nature.
7. REPRESENTATIONS AND WARRANTIES
7.01 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;
(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.
7.02 Xxxxxx 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.
8. ASSIGNMENT
8.01 With the consent of the other party, which consent
shall not be unreasonably withheld, Xxxxxx, the Optionor and
Rice 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.
9. CONFIDENTIALITY OF INFORMATION
9.01 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.
10. TERMINATION
10.01 Until such time as Xxxxxx 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 Xxxxxx 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 Xxxxxx, 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 Xxxxxx shall fail to comply
with any of its obligations hereunder, other
than the obligations contained in paragraph
2.01, and subject to paragraph 11.01, and
within 30 days of receipt by Xxxxxx of
written notice from the Optionor of such
default, Xxxxxx 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 Xxxxxx gives notice that it denies that a
default has occurred, Xxxxxx 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.
10.02 Upon termination of this Agreement under
paragraph 10.01, Xxxxxx 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
Xxxxxx or, to the extent within Xxxxxx'x
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.
10.03 Upon the termination of this Agreement under
paragraph 10.01, Xxxxxx 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 10.02.
10.04 Upon termination of this Agreement, Xxxxxx 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.
11 FORCE MAJEURE
11.01 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.
12. REGULATORY APPROVAL
12.01 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.
13 NOTICES
13.01 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 Xx.
Xxxxxxxxx, X.X.
X0X 0X0
Telecopier: (000) 000-0000
In the case of Xxxxxx : Xxxxxx 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 13.01.
14 GENERAL TERMS AND CONDITIONS
14.01 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.
14.02 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.
14.03 Time shall be of the essence of this Agreement.
14.04 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.
14.05 Unless otherwise noted, all currency references
contained in this Agreement shall be deemed to be references to
United States funds.
14.06 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.
14.07 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.
14.08 This Agreement shall be governed by and
interpreted in accordance with the laws of British Columbia
and the laws of Canada applicable therein.
14.09 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
THE COMMON SEAL OF XXXXXX C/S
TECHNOLOGIES INC. was hereunto affixed
in the presence of:
/S/ Xxxxx Xxxx
SCHEDULE "AA"
PROPERTY DESCRIPTION
List of Secret Basin Claims
Claim Name NMC #
Basin 1 769652
Basin 2 769653
Basin 3 769654
Basin 4 769655
Basin 5 769656
Basin 6 769657
Basin 7 769658
Basin 8 769659
Basin 9 769660
Basin 10 769661
Basin 11 769662
Basin 12 769663
Basin 13 769664
Basin 14 769665
Basin 15 769666
Basin 16 769667
Basin 17 769668
Basin 18 769669
Basin 19 769670
Basin 20 769671
Basin 21 769672
Basin 22 769673
Basin 23 769674
Basin 24 769675
Basin 25 796398
Basin 26 796399
Basin 27 796400
Basin 28 796401
Basin 29 796402
Basin 30 796403
Basin 31 796404
Basin 32 796405
Basin 33 769684
Basin 34 769685
Basin 35 769686
Basin 36 769687
Basin 37 769688
SCHEDULE "BB"
ATTACHMENT: AGREEMENT DATED
FEBRUARY 12, 1997, BETWEEN XXXX XXXX
AND MIRANDA INDUSTRIES INC.and/or
MIRANDA U.S.A. 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 Xxxxxx as to 50% and the
Optionor as to 50%. The deemed contribution of each party
to the Joint Venture shall be $250,000.
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 Xxxxxx
unless and until such time as Xxxxxx'x 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).
