Memorandum of Understanding
Exhibit 10.1
This Memorandum of Understanding (“MOU”) is made by and between South American Gold Corp. (“SAGD”) and BMZ, Ltd. Co. (“BMZ”) a private company whose manager is Xxxx Xxxxx,
Whereas, BMZ owns and controls the Xxxxx Project (“Project”) which is further described in Exhibit A,
Whereas SAGD seeks to explore and earn-in an eighty percent participating interest in the project,
Therefore, MOU and BMZ agree to enter into this MOU and in good faith implement its contemplated terms into a definitive agreement within 180 days of the effective date of this MOU,
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1.
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Duration : This agreement will be for 180 days from the date of the effective date and may be extended only upon the written authorization of SAGD and BMZ.
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2.
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Authority : Xxxx Xxxxx warrants that he has the authority to bind BMZ and any other interests in the Project to the terms of this MOU and contemplated definitive agreement.
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3.
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Terms and Conditions : SAGD and BMZ agree that SAGD can earn a eighty percent participating interest in the Project by :
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(a.)
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Paying within180 days of the signing of this MOU $5,000 which will be payable in cash or the issuance of restricted shares of SAGD at the market bid price, or the equivalent in restricted preferred shares of SAGD, subject to an subscription agreement signed by BMZ and acceptable to SAGD.
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(b.)
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SAGD agrees to an initial work commitment of $5,000 in 2013, and upon mutual agreement of an exploration plan for 2014, an increased work commitment of at least $25,000 is expected for 2014, and $40,000 per year thereafter.
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(c.)
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SAGD agrees that work commitment will include consulting services to be provided by Mr. Xxxx Xxxxx.
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(d.)
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The parties in good faith agree to enter into a definitive agreement with a duration of 10 years, with a work commitment for this period of $350,000 and an annual minimum advance royalty payments of $5,000 per year in cash, common shares or preferred shares, at SAGD’s option, for SAGD to earn a 80% interest in the project. Should a mutually agreed upon definitive agreement not be agreed on and implemented within the effective date of this agreement, the payment referred to above in section (a) shall be non-refundable.
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4.
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Effective Date : May 1, 2013.
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5.
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SAGD will be responsible for all property maintenance fees, estimated to not exceed $2,200 annually, based on BLM's current annual claim maintenance fee rate.
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Page 1 of 3
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6.
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SAGD will pay a 5% Royalty on Net Smelter Return from production on the property up to the first $1 million in revenue from said production, decreasing to a 3% royalty on any production revenues over $1 million per year. This royalty may be purchased by SAGD at any time for $500,000.
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7.
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SAGD may purchase full ownership of the project at any time for a payment of $1 million.
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For SAGD :
By: /s/ Xxxxxxx XxXxxxx
Xxxxxxx Xx Xxxxx,
CEO
For GMRV :
By: /s/ Xxxx Xxxxx
Xxxx Xxxxx, Manager.BMZ, Ltd. Co.
For Xxxx Xxxxx :
By: /s/ Xxxx Xxxxx
Xxxx Xxxxx, An Individual
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Page 3 of 3
Exhibit A
Xxxxx Project consists of the following fourteen (14) unpatented lode mining claims located in the Marysville Mining District, Marysville, Montana:
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Claim Name
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LM Recording No.
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Xxxxx X Xxxx
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MMC 220240
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Xxxxx-Xxxx Xxxx
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XXX000000
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Millennium Silver Lode
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MMC220242
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Girlie Boy Lode
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MMC 220243
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St Xxxxxx Xxxx
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MMC 204579
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St Xxxx Xxxx
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MMC 209878
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Dowser Lode
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MMC 212172
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Dowser-East Lode
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MMC 212171
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Dowser-West Lode
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MMC 222851
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DW-1
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MMC 222850
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XX-0
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XXX 000000
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XX-0
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XXX 000000
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DW-4
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MMC 222849
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DW-5
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MMC 220239
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A - 1
