EXHIBIT 4.3
OPTION AGREEMENT
BETWEEN AND BY
TUMI RESOURCES LIMITED,
TMRESOURCES AB
AND
GOLDSEARCH LIMITED
DATED APRIL 28, 2008
TM RESOURCES AB
(a wholly-owned subsidiary of tumi Resources Limited)
Xxxxxxxxx 00
000 00 Xxxxx, Xxxxxxx
T: 46 921 50160
_________________________________________________________________________
April 28, 2008
GOLDSEARCH LIMITED
x/x Xxxxx 0, 00 Xxxxxx Xxxxxx,
Xxxxxx, XXX 0000
Xxxxxxxxx
ATTENTION: XXXX XXXXXXXX
Dear Xxxx,
RE: OPTION TO EARN A 70% INTEREST IN THE JUGANSBO, SALA 4, KOBERGS
AND HALLEFORS PROPERTY LOCATED IN THE BERGSLAGEN DISTRICT OF
SWEDEN
Tumi Resources Limited on its own or through its wholly-owned subsidiary TM
Resources AB (together referred to as "TM") own a one hundred percent (100%)
right, title and interest in and to the mineral exploration licences located in
the Bergslagen District of Sweden known as Jugansbo, Sala 4, Kobergs and
Hallefors as more particularly described in Schedule "A" attached hereto
(collectively, the "PROPERTY"). This heads of agreement (the "HOA") sets out the
terms and conditions whereby TM grants to Goldsearch Limited ("GOLDSEARCH") an
exclusive option to acquire an undivided seventy percent (70%) right, title and
interest in and to the Property (the "Option").
The general terms and conditions of the Option are as follows.
1. TM and Goldsearch hereby agree to use best efforts to negotiate and
settle a formal option agreement (the "Formal Option Agreement")
containing, among other things, the terms and conditions set forth
herein and the warranties, representations, covenants, agreements,
terms and conditions customarily found in such agreements and
acceptable to all parties and their respective counsel. The parties
will negotiate the Formal Option Agreement in good faith and enter into
the Formal Option Agreement as expeditiously as possible but in any
event no later than ninety (90) days from the execution of this HOA.
2. It is a condition precedent to the entry into the Formal Option
Agreement that all required regulatory approvals to the transactions
contemplated herein shall have been received including, without
limitation, approval of the TSX Venture Exchange if applicable.
3. In addition to the mutual promises contained herein, as consideration
for the grant of the Option Goldsearch agrees to pay SkyTEM ("SKYTEM")
to complete the airborne electromagnetic and magnetic survey that is
currently underway over the Property with flight line spacings of one
hundred (100) metres (the "SURVEY"). The date of this HOA is considered
to be the "EFFECTIVE DATE").
For greater certainty, completion of the Survey in accordance with this
Section is mandatory and binding on Goldsearch.
4. To maintain the Option in good standing Goldsearch must incur
cumulative exploration expenditures of:
a. one hundred thousand Euros ((euro)100,000) within one (1) year
from the Effective Date;
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b. three hundred thousand Euros ((euro)300,000) within two (2)
years from the Effective Date; and
c. one million Euros ((euro)1,000,000) within three (3) years
from the Effective Date
5. Under this HOA "EXPLORATION EXPENDITURES" means all cash, expenses and
obligations funded, spent or incurred directly or indirectly by
Goldsearch pursuant to this HOA or the Formal Option Agreement, as the
case may be, on exploration, evaluation and development activities on
or for the Property and includes, but is not limited to, land payments,
fees, taxes and charges required to keep or secure the Property in good
standing; all expenditures for geophysical, geochemical and geological
work; all expenditures for surveys, drilling, assays, metallurgical
testing, engineering, construction, any amount paid to SkyTEM to
complete the Survey and all other expenditures directly benefiting the
Property and the work thereon.
For the purposes of clarity it is accepted that all of the Goldsearch
preliminary geology costs including the costs of Xx Xxxxxxxxx incurred
to date on this project by Goldsearch are included in the earn in
amount.
6. The parties acknowledge that, with the exception of the mandatory
completion of the Survey referred to in Section 3, the Option is an
option only and Goldsearch has the right to terminate the Option at any
time by providing TM with thirty (30) days' advance written notice.
7. If Goldsearch fails to incur exploration expenditures in accordance
with Section 4, then the Option will terminate.
8. Upon Goldsearch having incurred exploration expenditures totalling at
least one million Euros ((euro)1,000,000) in accordance with Section 4,
Goldsearch will be deemed to have exercised the Option and to have
acquired an undivided seventy percent (70%) right, title and interest
in and to the Property free and clear any of any liens, charges,
encumbrances (except as provided for herein) and will transfer such
interest to Goldsearch to the extent possible at Goldsearch's written
request.
9. Upon Goldsearch having exercised the Option, the parties will form a
joint venture (the "JOINT VENTURE") with respect to the further
exploration and development of the Property which shall be governed by
the terms of formal joint venture agreement (the "FORMAL JV AGREEMENT")
which the parties shall negotiate in good faith and which will have the
following terms:
a. each party will contribute its pro-rata share of exploration
expenditures on the Property according to each party's
percentage interest in the Property; and
b. if either party fails to contribute its pro-rata share in
accordance with subsection 9(a), then a standard industry
reducing interest formula will apply until either party is
deemed to have a ten percent (10%) interest in the Property at
which point such interest will convert to a one percent (1%)
net smelter royalty over the Property.
10. Upon execution of this HOA, Goldsearch will become the operator of the
Property and will, at its own discretion, operate, fund and approve all
work commitments until the earlier of termination of the Option and
formation of the Joint Venture. Goldsearch will provide progress
reports to TM from time to time at TM's request.
11. Goldsearch will comply with all applicable laws, rules and regulations
of Sweden and conduct its work on the Property in a good and
workmanlike manner.
12. Goldsearch will maintain accounts of all exploration expenditures in
accordance with generally accepted accounting principles and applicable
laws and regulations, and such accounts may be inspected and/or audited
by or on behalf of TM at TM's expense.
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13. TM and Goldsearch agree that this HOA, the Formal Option Agreement and
the Formal JV Agreement will be governed by the following laws:
a. With respect to matters relating to the Property, by the laws
of Sweden; and
b. With respect to the all other matters, by the laws of the
Province of British Columbia and the federal laws of Canada
having application therein.
14. Each party further agrees to take such acts and to negotiate, prepare,
file, notarise and publicly record such documents in Sweden as may be
necessary at any time to protect the interests of the parties in
connection with the Option and the Property. The termination of this
HOA, the Formal Option Agreement or the Formal JV Agreement for any
reason, except if such agreement is superseded and replaced by another
agreement, will cause the termination of any such document negotiated,
prepared, filed, notarised or publicly recorded in Sweden.
15. If either of the parties acquires, directly or indirectly, any interest
in minerals located wholly or in part within the area of mutual
interest consisting of an area of five (5) kilometres from the external
perimeter of the Property, it will send the other party a written
notice setting out the nature of such interest, including all
information known by it about such interest and its acquisition costs,
and such other party will have fifteen (15) days from the date of
receipt of such notice to agree to negotiate the inclusion of such
mineral interest in the Property.
16. If Goldsearch uses TM's personnel and/or TM's infrastructure in Sweden,
Goldsearch will pay TM the cost of such personnel and/or infrastructure
plus ten percent (10%) overhead. Goldsearch acknowledges that its use
of TM's personnel is subject to availability.
17. Any information or data obtained in connection with the Property or the
performance of this HOA is confidential with respect to the parties and
Goldsearch will not make public statements concerning this HOA or the
activities contemplated herein without the prior consent of TM such
consent not to be unreasonably withheld. For greater certainty,
withholding such consent will be deemed unreasonable if such disclosure
is required by law and/or regulatory authorities.
18. This HOA may be executed in counterpart and evidenced by a facsimile
copy thereof and all such counterpart execution or facsimile copies
shall constitute one document.
19. This HOA shall constitute a binding agreement between the parties
regarding the transactions contemplated herein until the Formal Option
Agreement is signed and delivered by the parties, upon which the
party's respective legal rights and obligations will then be only those
set forth in the Formal Option Agreement.
20. TM confirms the following;
a. Tenements are in good standing;
b. Access to the tenements is available to carry out further
work.
c. Overheads shall be part of the costs of being Operator
provided it does not exceed 10%.
d. Assignment may be made to a Goldsearch subsidiary if deemed
necessary;
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Sincerely,
TUMI RESOURCES LIMITED
Per: /s/ Xxxxx Xxxxxxxxxx, President DATE: May 10, 2008
-------------------------------- -----------------------------
Authorized Signatory
TM RESOURCES AB
Per: /s/ Xxxxx Xxxxxxxxxx, DATE: May 10, 2008
-------------------------------- -----------------------------
Authorized Signatory
If the foregoing accurately sets forth your understanding in this regard, please
date, sign and return a copy of the HOA to TM.
GOLDSEARCH LIMITED
Per: /s/ Xxxx X.X. Xxxxxxxx, Director DATE: May 10, 2008
-------------------------------- -----------------------------
Authorized Signatory
SCHEDULE "A"
THE PROPERTY
TITLE HOLDER NAME LICENCEID DIARYNR AREA VALIDFROM VALIDTO COUNTY MUNICIPAL
Tumi Resources Ltd. Sala nr 4 2005:274 2005000905 226.31 14/12/2005 14/12/2008 Vastmanlands xxx Xxxx
Tumi Resources Ltd. Hallefors nr 1 2005:292 0000000000 793.87 29/12/2005 29/12/2008 Orebro lan Hallefors
Tumi Resources Ltd. Kobergs nr 1 2006:73 2006000023 538.77 08/03/2006 08/03/2009 Varmlands lan Filipstad
TM Resources Ltd. Jugansbo nr 1 2006:173 2006000388 1406.19 08/06/2006 08/06/2009 Vastmanlands lan Heby, Sala
