Exhibit 10.17
Exploration Agreement
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This Exploration Agreement ("Agreement") is made and entered into as of June 2,
2008 (the "Effective Date") by and between Case Financial, Inc ("CASE"), a
company incorporated in the State of Delaware USA, and Trio Gold Corp ("TRIO"),
a company incorporated in the Province of Alberta Canada (collectively, the
"Parties").
RECITALS
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A. TRIO has leased and has an option to purchase a 100% interest in 29
unpatented lode mining claims located in Nevada within the Xxxxxx Gold
Trend (the "Claims"). This Mineral Lease and Purchase Option Agreement
(the "Mineral Lease") held by TRIO is attached as Exhibit A. The Claims
are also subject to an exchange agreement between TRIO and XxXxxxxxx
Mining Inc., granting XxXxxxxxx a 1.5% Net Smelter Return, said
agreement attached hereto as Exhibit B (the "Exchange Agreement").
B. TRIO desires to grant to CASE and CASE desires to earn a 70% undivided
interest in the Claims, and all easements, rights-of-way, water rights
and other appurtenances associated therewith (collectively, the
"Property"), pursuant to the terms and conditions of this Agreement.
C. This Agreement defines the rights and obligations of CASE and TRIO
during an earn-in period commencing in June 2008 and completing in
December 2010 (the "earn-in period") where CASE earns a 70% undivided
interest in the Property. It is contemplated that CASE and TRIO shall
enter into a formal joint venture agreement (the "Joint Venture") once
the earn-in period is complete.
AGREEMENT
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1. Formation of a Management Committee
1.1. During the earn-in period, CASE and TRIO shall form a management
committee to oversee exploration of the claims and each party
will have equal representation on the committee. The initial
size of the committee shall be four, two representatives
appointed by CASE and two representatives appointed by TRIO. The
size of the committee may be changed at anytime through
unanimous agreement of the Parties provided that CASE and TRIO
retain equal representation on the committee. Either party may
change its representatives at anytime by providing written
notification to the other party of the change. In the event of a
tie vote from the management committee during the earn-in
period, then TRIO will have the deciding vote.
1.2. The management committee shall have full control over the
approval of work plans and annual expenditure amounts. Such
approval shall not be unreasonably withheld.
1.3. The management committee shall remain in effect after the
earn-in period until such time that it is superseded by the
Joint Venture.
2. TRIO's Role as Operator
2.1. During the Earn In Period, TRIO shall be the operator of the
Property and shall be granted all rights necessary or incident
to or for the performance of its activities under this
Agreement, including, but not limited to, the authority to apply
for all necessary permits, licenses and other approvals from the
United States of America, the State of Nevada or any other
governmental or other entity having regulatory authority over
any part of the Property.
2.2. During the Earn-In Period, TRIO and its employees, agents and
independent contractors shall have the exclusive right to enter
upon the Property and to conduct such prospecting, exploration,
or other mining work as they desire and as is permitted by
Federal and Nevada laws. In addition TRIO shall have the right
to bring upon and erect upon the Property such buildings,
plants, machinery and equipment as TRIO may deem necessary or
desirable to carry out such activities.
2.3. In the conduct of its exploration, development and other
activities on the Property, TRIO shall be responsible for
compliance with applicable laws and regulations, including laws
and regulations related to exploration, development, mining and
reclamation.
2.4. TRIO shall be responsible to make timely payments of required
claim maintenance fees, royalties, property taxes, and any other
payments required to maintain the Claims. TRIO shall also be
responsible for timely filing and recording of all documents
required to evidence the payment of required claim maintenance
fees.
2.5. Exploration and maintenance costs defined in this section are
collectively referred to as "Operational Costs".
2.6. TRIO shall permit CASE, or its representative duly authorized in
writing, to visit and inspect the Property at all reasonable
times and intervals, and data obtained by TRIO as a result of
its operations thereon, provided always that CASE or its
representative will abide by the rules and regulations laid down
by TRIO relating to matters of safety and efficiency in its
operations.
2.7. TRIO shall ensure that all work performed by TRIO and its
contractors on the Property is done in a good and workmanlike
fashion and in accordance with all applicable laws, regulations,
orders and ordinances of any governmental authority.
2.8. TRIO shall deliver to CASE, forthwith upon receipt thereof,
copies of all reports, maps, assay results and other technical
data compiled by or prepared at the direction of TRIO with
respect to the Property, as well as monthly reports as to the
Operational Costs incurred by TRIO.
2.9. Not later than March 1 of each calendar year, TRIO shall deliver
to the management committee a work plan and budget for
exploration of the Property during that calendar year. The work
plan shall describe the exploration goals and general scope of
work and the budget shall identify the Operational Costs to be
expended and the anticipated schedule of funding requirements.
The management committee shall have final approval authority for
the work plan and budget.
2.10. TRIO's role as operator shall remain in effect after the earn-in
period until such time that it is superseded by the Joint
Venture.
3. CASE's Obligations under This Agreement
3.1. CASE shall provide $4.0M in funding to cover Operational Costs
subject to approval by the management committee defined in
Section 1 according to the following schedule:
o $1,000,000 during the 2008 budget year
o $2,000,000 during the 2009 budget year
o $1,000,000 during the 2010 budget year
Each budget year shall commence on January 1 of that year and
end on December 31 or that same year.
3.2. Once CASE has provided $4.0M in funding for the project, CASE
and TRIO shall fund the Operational Costs jointly, with CASE
providing 70% of the funds and TRIO providing 30% of the funds.
3.3. CASE shall pay a minimum annual royalty during the earn-in
period to TRIO according to the following schedule (the "CASE
Shares"):
o 250,000 shares of CASE's common stock upon signing of this
agreement
o 500,000 shares of CASE's common stock on April 1, 2009
o 250,000 shares of CASE's common stock on April 1, 2010
4. TRIO's Obligations under This Agreement
4.1. TRIO shall continue to perform its obligations under the terms
of the Mineral Lease. This includes payments made under the
terms of the Mineral Lease covered in paragraph 2.4 as well as
any other obligations under the terms of the Mineral Lease. In
the event that TRIO fails to meet any of these obligations, CASE
shall be allowed but not required to fulfill that obligation in
order to preserve TRIO's interest in the Claims.
4.2. Once CASE has provided $4.0M in funding for the project, CASE
and TRIO shall fund the exploration costs jointly, with CASE
providing 70% of the funds and TRIO providing 30% of the funds.
4.3. At the completion of the earn-in period and subject to CASE
meeting all of its obligations under Section 3 of this
agreement, TRIO shall assign 100% its interest in the Claims to
the Joint Venture under the terms set forth in Section 5 below.
5. Joint Venture after the Earn-In Period
5.1. Upon completion of the earn-in period, a Joint Venture is to be
formed according to the terms listed below.
5.2. CASE shall have earned an initial 70% interest in the Joint
Venture through the completion of its obligations during the
earn-in period.
5.3. TRIO shall have earned an initial 30% interest in the Joint
Venture through the assignment of the Claims to the Joint
Venture.
5.4. Both parties will participate in expenditures by the Joint
Venture on the Property in accordance with their respective
interests therein, or have their interest diluted in accordance
with a straight-line dilution formula. In determining potential
dilution, upon earn-in by CASE, CASE's initial expenditure base
shall be equal to $4.0M and TRIO's initial expenditure base
shall be equal to $1.7M.
5.5. If through dilution the interest of a party is reduced to less
than ten percent (10%), then that party's participating interest
shall automatically be converted to a 3% Net Smelter Royalty
(NSR). Payment of this royalty shall be made not later than
thirty (30) days after receipt of payment from the purchaser.
All payments shall be accompanied by a statement explaining the
manner in which the payment was calculated. The "Net Smelter
Royalty" (NSR) in this Agreement shall have the same meaning as
"Net Smelter Returns" as defined in Exhibit B to the Mineral
Lease attached hereto as Exhibit "A".
5.6. This Joint Venture shall remain in effect for twenty-five years
or as long as the claims are being actively mined or developed,
whichever is longer. After the completion of the Joint Venture
the Claims shall revert back to TRIO.
6. Representations and Warranties made by CASE
CASE represents and warrants to TRIO that:
6.1. CASE is duly incorporated, validly existing and in good standing
under the laws of the State of Delaware, and is qualified to do
business and in good standing under the laws of the State of
California. CASE has the requisite corporate authority and
capacity to carry on business as presently conducted, to enter
into this Agreement, and to perform all of its obligations
hereunder.
6.2. The entering into of this Agreement and the performance by CASE
of its obligations hereunder will not violate or conflict with
any applicable law or any order, decree or notice of any court
or other governmental agency, nor conflict with, or result in a
breach of, or accelerate the performance required by any
contract or other commitment to which CASE is a party or by
which it is bound.
6.3. The CASE Shares will, at the time of delivery to TRIO, be duly
authorized and validly allotted and issued as fully paid and
non-assessable, free of any liens, charges or encumbrances.
6.4. No order ceasing or suspending trading in securities of CASE or
prohibiting the sale or issuance and delivery of such securities
is outstanding, and no proceedings for such purpose are pending
or, to the best of the knowledge of CASE, threatened.
6.5. On the date of receipt by TRIO of the certificate or
certificates representing the CASE Shares, every consent,
approval, authorization, order or agreement of the Regulatory
Authorities that is required for the issuance of the CASE Shares
and the delivery to TRIO of such certificate or certificates to
be valid will have been obtained and will be in effect.
6.6. The CASE Shares are part of a class of shares of CASE that is
currently listed and posted for trading on a recognized Exchange
and, at the time of the delivery of the certificates
representing the CASE Shares to TRIO, will have been approved
and listed on a recognized Exchange.
6.7. All requisite corporate action on the part of CASE, and on the
part of its officers, directors and shareholders, necessary for
the execution, delivery and performance by it of this Agreement
and all other agreements contemplated hereby, have been taken.
This Agreement and all agreements and instruments contemplated
hereby are, and when executed and delivered by it (assuming
valid execution and delivery by the other party), will be legal,
valid and binding obligations of its enforceable against it in
accordance with their respective terms. Notwithstanding the
foregoing, no representation is made as to the availability of
equitable remedies for the enforcement of this Agreement.
Additionally, this representation is limited by applicable
bankruptcy, insolvency, moratorium, and other similar laws
affecting generally the rights and remedies of creditors and
secured parties.
7. Representations and Warranties made by TRIO
TRIO represents and warrants to CASE to the best of its knowledge and
understanding that:
7.1. The Mineral Lease provided as in Exhibit "A" is valid and in
full force and TRIO is not in violation of any of the terms of
the agreement. Furthermore, the Property is free and clear of
any other liens, claims, or encumbrances other than those
identified in the Mineral Lease and the Exchange Agreement as
per Exhibit B.
7.2. All operations and activities conducted by or on behalf of TRIO
on the Claims have been conducted in compliance with applicable
federal, state and local laws, rules and regulations, including
without limitation Environmental Laws.
7.3. TRIO is duly formed, validly existing and in good standing under
the laws of the Province of Alberta, and is qualified to do
business in the State of Nevada. TRIO has the requisite
authority and capacity to carry on business as presently
conducted, to enter into this Agreement, and to perform all of
its obligations hereunder.
7.4. There are no outstanding agreements, leases or options (whether
oral or written) which contemplate the acquisition of the Claims
or any interest therein by any other person or entity other than
those identified in the Mineral Lease and the Exchange
Agreement.
7.5. The entering into of this Agreement and the performance by TRIO
of its obligations hereunder will not violate or conflict with
any applicable law or any order, decree or notice of any court
or other governmental agency, nor conflict with, or result in a
breach of, or accelerate the performance required by any
contract or other commitment to which TRIO is a party or by
which it is bound.
7.6. All requisite action on the part of TRIO, and on the part of its
officers and members, necessary for the execution, delivery, and
performance by it of this Agreement and all other agreements
contemplated hereby, have been taken. This Agreement and all
agreements and instruments contemplated hereby are, and when
executed and delivered by it (assuming valid execution and
delivery by the other party), will be, legal, valid, and binding
obligations of it enforceable against it in accordance with
their respective terms. Notwithstanding the foregoing, no
representation is made as to the availability of equitable
remedies for the enforcement of this Agreement or any other
agreement contemplated hereby. Additionally, this representation
is limited by applicable bankruptcy, insolvency, moratorium, and
other similar laws affecting generally the rights and remedies
of creditors and secured parties.
7.7. To the best of its knowledge, information and belief, there are
no adverse environmental conditions at the Property that could
result in a violation of or liability under any federal, state
or local laws, rules or regulations concerning protection of the
environment or human health and safety ("Environmental Laws").
In conducting activities on the Property, TRIO has complied with
all applicable Environmental Laws as they relate to the Property
and there have been no breaches of or liabilities caused or
permitted to arise by TRIO under any Environmental Laws. TRIO
has not received notification from any person, including without
limitation, any governmental authority, of any potential breach
or alleged breach of any applicable Environmental Laws relating
to the Property or of any inspection or possible inspection or
investigation by any governmental authority under any applicable
Environmental Laws relating to the Property. TRIO has not
received any notification of and has no knowledge of the
presence of any contaminants (including hazardous substances or
materials, dangerous goods, chemicals or toxic wastes) in the
soil or water in, on or under the Property and TRIO has not been
the subject of any claims or incurred any expenses in respect of
the presence of any contaminants in the soil or water in, on or
under the Property.
7.8. There are no actions, suits or proceedings pending or, to the
knowledge of TRIO, threatened against or affecting the Property,
including any actions, suits, or proceedings being prosecuted by
any federal, state or local department, commission, board,
bureau, agency, or instrumentality. To the knowledge of TRIO, it
is not subject to any order, writ, injunction, judgment or
decree of any court or any federal, state or local department,
commission, board, bureau, agency, or instrumentality, which
relates to the Property.
8. Termination of this Agreement
8.1. CASE may in its sole discretion terminate this Agreement at any
time by giving not less than 30 days prior written notice to
that effect to TRIO. Upon expiry of the 30 day notice period, or
if the Agreement is terminated pursuant to any other provision
of this Agreement, the Agreement will be of no further force and
effect. Upon such termination, CASE shall have no further
obligation to incur Operational Costs on or for the benefit of
the Property and shall have no further obligations or
liabilities to TRIO under this Agreement or with respect to the
Property (including without limitation liability for lost
profits or consequential damages as a result of an election by
CASE to terminate this Agreement), other than to reclaim (in
accordance with applicable law) any disturbances of the Property
made while this Agreement was in effect. TRIO hereby agrees to
grant CASE such access to the Property as is reasonably
necessary to complete any required reclamation.
8.2. In the event that CASE is in default in the observance or
performance of any of CASE's covenants, agreements or
obligations under this Agreement, TRIO may give written notice
of such alleged default specifying the details of same. CASE
shall have 60 days following receipt of said notice (or, in the
event CASE in good faith disputes the existence of such a
default, 60 days after a final, non-appealable order of a court
of competent jurisdiction finding that such a default exists)
within which to remedy any such default described therein, or to
diligently commence action in good faith to remedy such default.
If CASE does not cure or diligently commence to cure such
default by the end of the applicable 60 day period, then TRIO
shall have the right to terminate this Agreement by providing 60
days advance written notice to CASE. In the event of such
termination, the provisions of paragraph 8.1 shall apply with
respect to the parties' ongoing obligations and liabilities.
8.3. Upon written notice of termination of this agreement by either
party, CASE's obligation to issue shares of its common stock to
TRIO or assignee shall be cancelled for all shares scheduled to
be issued after that notification date.
8.4. If this agreement is terminated after CASE provides the first
$3.0M in funding for the Claims, CASE shall have been deemed to
abandon any interest in the Joint Venture but would have earned
a 2% Net Smelter Royalty (NSR) on the Claims.
8.5. If this agreement is terminated after CASE provides the first
$4.0M in funding for the Claims, CASE shall have been deemed to
abandon any interest in the Joint Venture but would have earned
a 3% NSR on the Claims.
9. Assignment
9.1. This Agreement shall be binding upon and inure to the benefit of
the parties and their permitted successors and assigns.
9.2. CASE may, upon the prior written approval of TRIO, which
approval shall not be unreasonably withheld, assign this
Agreement to other parties that are not affiliated with CASE at
any time, provided that the assignee agrees in writing to assume
all CASE's obligations under this Agreement. Upon such
assignment, or an assignment to an affiliate (as described
below), CASE shall have no further obligations or liabilities
under this Agreement.
9.3. At any time, and without the consent of TRIO, CASE may assign
this Agreement (a) to one or more of its affiliates upon the
affiliate assuming all of CASE's obligations under this
Agreement (affiliate meaning any entity which directly or
indirectly controls or is controlled by, or under common control
with, CASE); (b) in connection with a pledge by CASE for
financing purposes, (c) in connection with a corporate merger or
reorganization involving CASE, or (d) in connection with a sale
of all or substantially all of CASE's assets.
9.4. TRIO may, upon the prior written approval of CASE, which
approval shall not be unreasonably withheld, assign its interest
in the Property and this Agreement to other parties that are not
affiliated with TRIO at any time, provided that the assignee
agrees in writing to assume all TRIO's obligations under this
Agreement. Upon such assignment, or an assignment to an
affiliate (as described below), TRIO shall have no further
obligations or liabilities under this Agreement.
9.5. At any time, and without the consent of CASE, TRIO may assign
its interest in the Property and this Agreement (a) to one or
more of its affiliates upon the affiliate assuming all of TRIO's
obligations under this Agreement (affiliate meaning any entity
which directly or indirectly controls or is controlled by, or
under common control with, TRIO); (b) in connection with a
pledge by TRIO for financing purposes, (c) in connection with a
corporate merger or reorganization involving TRIO, or (d) in
connection with a sale of all or substantially all of TRIO's
assets.
10. Dispute Resolution
10.1. If the Parties are unable to resolve a dispute arising under
this Agreement, then either party may request that the matter be
determined by binding arbitration. The parties shall first
endeavor to select a single arbitrator who, by virtue of
education and experience, has knowledge and expertise regarding
gold exploration contracts and the conduct of gold exploration,
development, mining, and processing activities. If the parties
are unable to agree upon a single arbitrator within fifteen (15)
days, then each party shall select one arbitrator, and the two
arbitrators will choose a third arbitrator. Arbitration
proceedings will be conducted in Reno, Nevada in accordance with
the Rules and Procedures of the American Arbitration
Association. The arbitrators may, in their discretion, direct
one party to pay all or some part of the attorney's fees and
costs incurred by the other party. The parties may conduct
discovery in accordance with the Nevada Rules of Civil
Procedure. The arbitrators' decision shall be final and binding,
and the prevailing party may submit the arbitrators' decision to
a court for enforcement.
11. Entire Agreement
11.1. This Agreement contains the entire agreement between the parties
relating to the Property.
12. General
12.1. Notice to CASE or to TRIO shall be sufficiently given if
delivered personally, or if sent by prepaid mail or reputable
overnight courier, or if transmitted by facsimile to such party:
In the case of a notice to CASE at:
Case Financial, Inc
0000 Xx Xxxxxx Xxxx, Xxxxx 0X
Xxxxxxxx, XX 00000
Facsimile number: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
In the case of a notice to TRIO at:
Trio Gold Corp
Xxxxx 000, 000 Xxxxxxx Xxxx. XX
Xxxxxxx, XX X0X-0X0
Facsimile number: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx
or at such other address or addresses as the party to whom such
notice or other writing is to be given shall have last notified
the party giving the same in the manner provided in this
section. Any notice or other writing delivered to the party to
whom it is addressed as set forth above shall be deemed to have
been given and received on the day it is so delivered at such
address, provided that if such day is not a business day in the
city where the notice is delivered, then such notice or other
writing shall be deemed to have been given and received on the
next following business day. Any notice or other writing
submitted by facsimile or other form of recorded communication
shall be deemed to have been given and received on the first
business day after its transmission.
12.2. Each of CASE and TRIO shall, with reasonable diligence, do all
such things and provide all such reasonable assurances and
assistance as may be required to consummate the transactions
contemplated by this Agreement and each party shall provide such
further documents or instruments required by the other party as
may reasonably be necessary or desirable in order to give effect
to the terms and conditions of this Agreement and carry out its
provisions at, before or after the Effective Date.
12.3. This Agreement may be executed by each of CASE and TRIO in
counterparts and by facsimile, each of which when so executed
and delivered shall be an original, but both such counterparts,
whether executed and delivered in the original or by facsimile,
shall together constitute one and the same agreement. The
parties agree to execute and deliver a short form of this
Agreement to be prepared by CASE, which the parties agree CASE
may record in the official records of the county where the
claims are located.
12.4. All dollar references in this Agreement are to the United States
dollars.
12.5. Shares of common stock issued under this Agreement must be held
until they are subsequently registered under the Securities Act
or an exemption from such registration is available. Provisions
of Rule 144 promulgated under the Securities Act permit limited
resale of these shares subject to the satisfaction of certain
conditions, including, among other things: the availability of
certain public information about CASE, the resale occurring
following the required holding period under Rule 144, and the
number of shares being sold during any three-month period not
exceeding specified limitations.
12.6. This Agreement, including all documents annexed hereto and other
agreements, documents and other instruments delivered in
connection herewith shall be governed by and construed in
accordance with the laws of the State of Nevada (other than its
rules as to conflicts of law) and the laws of the United States
as applicable.
12.7. TRIO and CASE agree that this Agreement shall be construed to
benefit the parties hereto and their respective permitted
successors and assigns only, and shall not be construed to
create any third party beneficiary rights in any other party or
in any governmental organization or agency.
12.8. This Agreement is the product of negotiation and preparation by
both TRIO and CASE. TRIO and CASE therefore expressly
acknowledge and agree that this Agreement shall not be deemed to
have be prepared or drafted by one party or the other and will
be construed accordingly.
12.9. In the event that any one or more of the provisions contained in
this Agreement or in any other instrument or agreement
contemplated hereby shall, for any reason, be held to be
invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any
other provision of this Agreement or any such other instrument
or agreement contemplated hereby.
12.10. No implied term, covenant, condition or provision of any kind
whatsoever shall affect any of the parties' respective rights
and obligations hereunder, including, without limitation, rights
and obligations with respect to exploration, development,
mining, processing and marketing of minerals, and the only
terms, covenants, conditions or provisions which shall in any
way affect any of their respective rights and obligations shall
be those expressly set forth in this Agreement.
12.11. This Agreement may not be amended or modified, nor may any
obligation hereunder be waived, except by writing duly executed
on behalf of all Parties, and unless otherwise specifically
provided in such writing, any amendment, modification, or waiver
shall be effective only in the specific instance and for the
purpose it is given.
12.12. This Agreement is, and the rights and obligations of the parties
are, strictly limited to the matters set forth herein. Each of
the parties shall have the free and unrestricted right to
independently engage in and receive the full benefits of any and
all business ventures of any sort whatever, whether or not
competitive with the matters contemplated hereby, without
consulting the other or inviting or allowing the other to
participate therein. The doctrines of "corporate opportunity" or
"business opportunity" shall not be applied to any other
activity, venture, or operation of either party, whether
adjacent to, nearby, or removed from the Property, and neither
party shall have any obligation to the other with respect to any
opportunity to acquire any interest in any property outside the
Property at any time, or within the Property after termination
of this Agreement, regardless of whether the incentive or
opportunity of a party to acquire any such property interest may
be based, in whole or in part, upon information learned during
the course of operations or activities hereunder.
13. Signatures
IN WITNESS WHEREOF, the parties have executed this Exploration and Development
Agreement effective as of the date first set forth above.
for CASE FINANCIAL INC.
/S/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx
Chief Executive Officer
for TRIO GOLD CORP.
/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
Chief Executive Officer
MINERAL LEASE AND PURCHASE OPTION AGREEMENT
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THIS MINERAL LEASE AND PURCHASE OPTION AGREEMENT (hereinafter called
"Agreement") made as of the 1st day of March, 1989, is entered into by and
between Bamco Exploration Inc., a Nevada corporation with offices at 0000 Xxxxxx
Xxxxxxxxx, Xxxxxx Xxxxxxxx, Xxxxxx 00000 and Xxxxxx X. Xxxxx and Xxxxxx Xxxxx,
husband and wife, of the same address; Xxxxx Xxxxxxxx, a widow, whose address is
000 XX 00xx Xxxxxx, Xxxxxxxx, Xxxxxx 00000; Xxxx X. Xxxxx, a widow, whose
address is 000 Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000; and Xxxxxxx Xxxxx and Xxxxx
Xxxxx, husband and wife whose address is 5009 highway 39 Klamath falls; Oregon
97603 (hereinafter collectively called "Lessor") and Trio Gold Corp. a company
incorporated under the Laws of The Province of Alberta, Canada (hereinafter
called "Lessee") for the consideration and upon the terms and conditions set
forth below.
1. GRANT OF LEASE. In consideration of the mutual covenants set forth
herein, Lessor does lease to Lessee certain unpatented mining claims
(hereinafter called "Mining Claims") and the fixtures and improvements thereon
(hereinafter The Mining Claims and the fixtures and improvements thereon
collectively called "Property") located in Elko County, Nevada, such Mining
Claims being identified on Exhibit "A" (attached hereto and made a part hereof).
2. GRANT OF RIGHTS. Lessor grants to Lessee the following exclusive
rights upon and with respect to the property:
(a) To enter the property to survey, explore, prospect, drill,
develop, mine, and cross-mine (in any manner whether by surface, open-pit,
underground, or other mining methods), stockpile, remove, xxxxx,
concentrate, mill, smelt, beneficiate, process, ship, and market, without
limitation, all ores, metals, minerals, tailings, concentrates, and mineral
products (hereinafter called "Minerals");
(b) To construct, use, maintain, repair, replace, and Relocate
buildings, ore bins, shafts, declines, inclines, tunnels, drifts, open
pits, reservoirs, tailings ponds, waste dumps, ore stockpiles, roads,
power, and communication lines, and any other structures and facilities;
(c) To use the Property for the storage or permanent disposal of
Minerals, water, waste, tailings, or other materials produced from the
Property or other real property;
(d) To use all easements, means of access, and rights-of-way for
ingress and egress to and from the Property;
(e) to use, appropriate, develop, consume, and dispose of all water on
or appurtenant to the property, and to drain through and from the Property
and to drain into any course on the Property any water from operations
conducted thereon or on other properties owned, worked, or leased by
Lessee;
(f) To use the Property for all of the purposes stated in this Section
2 in conjunction with Lessee's activities on other properties.
3. TERM OF AGREEMENT. This agreement is granted for an initial term of
twenty-one years from the date hereof (hereinafter called "Primary Term") and
for a period so long thereafter (hereinafter called "Extended Term") as Lessee
is exercising any of the rights granted in Section 2 upon or with respect to the
property and is making the minimum advance royalty payments set forth in Section
4.
4. MINIMUM ADVANCE ROYALTY PAYMENTS. Lessee shall pay Lessor the minimum
advance royalty payments (hereinafter called "Minimum Payments") in the amount
of Twelve Thousand Five Hundred Dollars ($12,500) per year. All Minimum Payments
paid to Lessor shall be credited against any production royalties that accrue.
In the event no minerals are produced from the Property, Lessor shall have no
obligation to refund Minimum Payments. Lessee shall have the right to prepay any
Minimum Payments. The obligation to make Minimum Payments shall terminate as of
the date Lessee exercises the Purchase Option or Alternative Purchase Option as
described in Section 7.
5. DELAY RENTAL. If, at any time during the Extended Term, all activities
are continuously suspended for sixty (60) days or more upon and with respect to
the Property, Lessee shall pay Lessor a delay rental of Fifteen Hundred
($1,500.00) commencing sixty (60) days following the first day of such
suspension and a like sum every twelve (12) months thereafter so long as the
suspension continues. The extended Term of this Agreement shall remain in effect
provided the delay rental payments are made. Nothing herein shall relieve Lessee
of the duty to make Minimum Payments as provided in Section 4.
6. PRODUCTION ROYALTY. Lessee shall pay Lessor a production royalty of
five percent (5%) of the net smelter returns for the Minerals mined from the
Property and sold by Lessee. The net smelter returns shall be the amount
actually received by Lessee from the sale of Minerals less, but only to the
extent actually incurred and borne by Lessee, the following:
(a) All charges and costs, if any, for transportation of Minerals to a
smelter, refiner, consumer, or purchaser from Lessee or its agent; and
(b) All charges, costs and penalties, if any for smelting, refining
and marketing the Minerals.
2
As Provided in Section 2, if any production royalty becomes due and payable
to Grantor prior to the determination of the total mineral content of the
Subject Ore as defined in Section 2, or the average percent recovery for all ore
beneficiated, Grantee shall pay Grantor a provisional royalty payment based on
the then current available information pertaining to mineral content and average
percent recovery.
In calculating that total amount of Minerals recovered from the Property
and sold by Grantee, the total weight and mineral content of the ore mined from
the Property and the average percent recovery of the ore will be determined by
Grantee in accordance with the methods and procedures set forth in Section 2.
Grantor hereby acknowledges that, as of the date of execution of this Deed,
Grantor has received from Grantee minimum advance royalty payments ("minimum
payments") totaling Twelve Thousand Five Hundred Dollars ($12,500) pursuant to
the terms of a Mineral Lease and Purchase Option Agreement dated March 1, 1989
by and between Bamco Exploration, Inc., Xxxxxx X. Xxxxx and Xxxxxx Xxxxx,
husband and wife, and Xxxxx Xxxxxxxx, a widow, Xxxx X. Xxxxx, a widow, and
Xxxxxxx Xxxxx and Xxxxx Xxxxx, husband and wife, and Trio Gold Corp. Grantee
shall be entitled to credit such minimum payments against future production
royalty payments which accrue.
2. COMMINGLING. Grantee shall have the right, at any time and from time
to time, at its sole discretion, to commingle ore from the Property (hereinafter
referred to as "Subject Ore") with ore mined from real property other than the
Mining Claims (hereinafter referred to as "other ore"). Subject Ore and other
ore will be separately weighed, sampled, and analyzed by Grantee to determine
mineral content ("mineral content" herein means that portion of the ore which
Grantee, at its sole discretion, chooses to recover through beneficiation).
Measurements to determine the total weight of all ore mined will be made by
weighing or by volumetric measurements or by alternate methods as determined at
Grantee's sole discretion. All calculations employed to determine total weight
shall be based upon dry weight. Grantee shall keep records of the total weight
and mineral content of all ore mined and beneficiated or processed for each
property owner or royalty owner and the aggregate thereof.
Grantee shall determine the average percent recovery of the mineral content
of all ore beneficiated by dividing the mineral content recovered and sold
(which figure represents the basis upon which Grantee's net smelter returns are
calculated) by the total mineral content of all ore mined prior to
beneficiation. Payment of production royalties to Grantor shall be based on the
mineral content of all Subject Ore multiplied by the average percent recovery.
3
All sampling, measuring, analyzing, weighing, assaying and calculating
shall be done in accordance with procedures generally accepted in the mining
industry.
4. REPRESENTATION AND WARRANTIES. Grantor covenants, represents and
warrants that:
(a) Grantor is the sole legal and equitable owner of the Property,
without limitation or restriction whatsoever, except for paramount title
in the United States;
(b) All of the Mining Claims were properly located in accordance with
federal and state law on land which was then available for mineral
location;
(c) All of the Mining Claims have been properly maintained in
accordance with the Federal Land Policy and Management Act of 1976 and all
other applicable federal, state, regional, and county laws and regulations;
4
(d) The Property is free and clear of all liens, encumbrances, and
outstanding adverse claims and interests;
(e) Grantor has full power and authority to execute this agreement;
(f) Grantee shall have the quiet and peaceful possession and enjoyment
of the Property, and Grantor will do everything lawfully within its power
to defend title to the Property and Grantee's quiet and peaceful possession
and enjoyment thereof against all persons or entities who may claim any
interest in the Property, any of the Mining Claims, or Minerals or the
proceeds therefrom; and
(g) There has been no violation of any applicable federal, state,
regional, or county law or regulation relating to zoning, land use,
environment; protection, or otherwise with respect to the Property or
activities relating thereto.
In the event Grantor breaches one or more of the above warranties, Grantor
shall indemnify and hold lease harmless from and against all damages, claims,
causes of action, or judgments arising as a result of said breach. In addition
to Grantor's actual obligation shall be reduced in proportion to Grantor's
actual ownership interest in the Property from which Minerals are produced. In
addition to other remedies available at law or in equity, Grantee shall be
entitled to deduct costs or damages incurred as a result of any such breach from
payments due Grantor under this Agreement.
5. LESSER INTEREST. In the event that Grantor owns less than a one
hundred percent (100%) undivided ownership interest in the Property as warranted
in Section 4 (a), Grantee's production royalty obligation shall be reduced in
proportion to Grantor's actual ownership interest in the Property from which
Minerals are produced. In addition to other remedies available at law or in
equity, Grantee shall be entitled to offset any production royalty payments
wrongfully paid to Grantor against any production royalty payments that accrue
to Grantor under the Deed.
6. ADDITIONAL AND AFTER-ACQUIRED RIGHTS. If Grantor acquires or succeeds
to any right, title or interest in the Property, or in any property within the
boundaries of or adjacent to the Mining Claims, which increases Grantor's
ownership interest in the Property beyond that which is warranted in the Deed,
Grantor shall promptly notify Grantee in writing of such acquisition. Within ten
(10) days after the receipt of such, notice, Grantee shall provide to Grantor
shall execute and deliver to. Grantee a Deed which conveys to Grantee such
additional and after-acquired right or interest at no additional expense and
without payment of any further consideration by Grantee.
5
7. FURTHER ASSURANCES. Upon written request by Grantee therefore (and
without cost to Grantee), Grantor agrees to execute and/or furnish Grantee with
such additional formal assurances or other written documents, in proper and
recordable form, as may be reasonably necessary to carry out the intent,
purposes and terms of this Deed.
8. RELEASE Except as specifically provided herein, Grantee and Grantor do
hereby cancel, release and relinquish, at law and in equity, the other from any
and all causes of action, claims and demands whatsoever, upon or by reason of
any matter arising from any prior agreement between Grantor and Grantee.
9. INDEMNIFICATION. Grantor and Grantee shall indemnify, defend and hold
one another harmless from and against any and all claims, liability, loss and
expense, including reasonable attorneys' fees, demands or causes of action made
against the other for or on account of any debt, claim, liability, loss or
expense incurred by the other and arising out of prior agreements or use of the
Property, and for any property, and for any claims for the injury to or death of
any person or damage to any property, by reason of any negligent act or omission
of the other resulting from activities on or related to the use of the property.
10. BOOKS AND RECORDS. Grantee shall keep accurate records of all Minerals
produced from the Property and of all calculations relative to production
royalty payments hereunder. At such time, if ever, as Grantor begins to receive
production royalty payments pursuant to the terms of Section 1, once each
calendar year upon two (2) weeks' prior written notice, Grantor or its
authorized representative shall have the right to inspect assays and maps of
workings developed in the course of Grantor's operations on the Property.
11. TAXES. Grantee shall pay all future taxes levied upon the Property and
those assessed against any improvements which Grantee any place on the Property.
At such time, if ever, as Grantee determines that Grantor will receive
production royalty payments pursuant to Section 1, Grantor shall pay its
proportionate share of any tax thereafter levied on or measured by production of
Minerals (including as valorem/severance, gross, proceeds, sales or similar
taxes). If Grantee so elects, it may pay such taxes levied on or measured by
production, and then deduct Grantor's pro rata share of such taxes from any
payments thereafter due Grantor. Grantor shall pay all taxes (including income
and sales taxes) levied upon the right to receive the same.
6
12. NOTICE. Subject to the payment provisions of this Deed, all notices,
designations, or other documents required or authorized by the terms of this
Deed shall be in writing and shall be personally delivered or deposited in the
United States registered or certified mail, postage prepaid, return receipt
requested, address as follows:
If to Grantor:
Xxxxxx X. Xxxxx. President
Bamco Exploration, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxx, Xxxxxx 00000
Xxxxx Xxxxxxxx
000 XX 00xx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Xxxx X. Xxxxx
000 Xxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Xxxxxxx and Xxxxx Xxxxx
0000 Xxxxxxx 00
Xxxxxxx Xxxxx, Xxxxxx 00000
If to Grantee:
Trio Gold Corp.
0000, 000 - 0xx Xxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Either of the Parties may change their respective address for notice by
giving the other Party notice of such change in the manner specified in this
Section. Notices personally delivered shall be delivered to the address for
Grantor or for Grantee (as appropriate) specified above and shall be deemed made
and received on the date of such delivery. Notices given by mail in the manner
specified in this section shall be deemed to have been made, delivered and
received on the date the same are placed in the United States mail.
7
13. CONDUCT OF OPERATIONS All decisions concerning methods, the extent,
times., procedures, and techniques for any exploration, development, mining
leaching, milling, processing, extraction, treatment, and the material to be
introduced into the Property or produced therefrom, and all decisions concerning
the sale or other disposition of Minerals (including, without limitation,
decision as to buyers, times of sale, or whether to store or stockpile Minerals
for a reasonable length of time without selling the same) shall be made by
Grantee in its sole and make absolute discretion. Grantee shall not be
responsible for, nor mining or processing of Minerals conducted pursuant to
customary engineering practices, Grantee shall not be required to mine, or to
preserve or protect in its mining operations, Minerals which under customary
mining practices cannot be mined or shipped at a reasonable profit by Grantee at
the time mined.
14. NO IMPLIED COVENANTS The parties intend and agree that no implied
covenants or duties including, but not limited to, implied covenants relating to
exploration, production royalties or any other monies provided for herein) of
any kind whatsoever shall affect any of their respective rights or obligation
hereunder, and that the only covenants or duties which affect such rights and
obligation shall be those expressly set forth and provided for in this Deed. It
is expressly understood that Grantee may, in its sole and absolute discretion,
choose not to mine Minerals from the Property, choose to abandon the Mining
Claims, convert Mining Claims to millsites, and/or elect to use the Property for
any purpose whatsoever.
15. BINDING EFFECT, CONSTRUCTION AND ENFORCEMENT. All covenants,
conditions, and terms of this Deed shall be of benefit to and run with the
Property and shall bind and inure to the benefit of the Parties, their
respective heirs, successors, personal representatives, subsidiaries, and
affiliates, including any business entity of which the majority of the equity is
owned directly or indirectly by Grantor or Grantee or their partners,
principals, or officers and assigns. This Deed shall be construed and enforced
in accordance with the laws of the State of Nevada.
16. SOLE AGREEMENT. This Deed and the Exhibit "A" attached hereto set
forth the entire agreement between the Parties with respect to the subject
matter hereof. This Deed supersedes all prior negotiations and agreements
between the Parties. No modification or alteration of the Deed shall be
effective unless reduced to writing and executed by the Parties.
8
16. DUTIES OF LESSEE. The provisions for Minimum Payments, delay rental,
and production royalties contained to Section 4, 5, and 6, respectively, exclude
and negate any express or, implied duty to perform exploration or development
work, or to mine the Property at any rate or in any manner. The activities of
Lessee, if any, shall be only to the extent and at the locations, times, and
methods, and in the manner that Lessee at its sole discretion may determine. If
Lessee elects to perform work on the Property, such work shall be performed as
follows:
(a) Lessee will endeavour in good faith to comply with application
provisions of federal, state, regional, and county laws and regulations;
and
(b) Except as provided to the contrary in this Agreement, Lessee shall
indemnify, protect, save, and hold harmless Lessor, from and against all
liens or claims arising out of Lessee's activities.
17. LESSOR'S ACCESS TO OPERATIONS. Subject to compliance with applicable
federal, state, and local safety regulations, and the rules and requirements of
Lessee's safety and health program, Lessor has the right, at reasonable times
with appropriate notice as determined by Lessee and at the sole risk of Lessor
to enter upon the Property and any mine workings thereon for the purpose of
inspecting same and any work being conducted by Lessee thereon.
Lessor agrees to assume all liability for, and indemnify, protect, save,
and hold harmless Lessee from, any and all fees, losses, liabilities, suits, and
attorneys' fees and actions of every kind and character arising out of any
death, personal injury or property damage sustained or caused by Lessor while in
or upon the Property.
18. ASSESSMENT WORK. For the assessment year commencing at noon, September
1, 1988 and each year thereafter during the team hereof, Lessee shall, with
respect to each Mining Claim, endeavour in good faith to perform the assessment
work required by law for the maintenance of same, and to file such reports and
affidavits as may be required. Lessee shall have no duty to perform assessment
work for any Mining Claim that is no longer subject to this Agreement on July 1
of any assessment year.
19. BOOKS AND RECORDS. Lessee shall keep accurate records of all Minerals
and mineral products derived from the Property by Lessee and sold by Lessee,
and, of all calculations relative to production royalty payments hereunder. The
records may be inspected by Lessor or a duly authorized representative of Lessor
once each calendar year during business hours upon providing to Lessee
forty-eight (48) hours' prior written notice.
9
20. COMMINGLING. Lessee shall have the right, at any time and from to
time, at its sole discretion, to commingle ore from the Property (hereinafter
called "Subject Ore") with ore mined from real property other than the Property
(hereinafter called "other ore"). Subject, Ore and "other ore will be separately
weighed, sampled, and analyzed to determine mineral content ("Mineral Content"
which term means that portion of the ore which Lessee, at its sole discretion,
chooses to recover through beneficiation). Measurements to determine the total
weight of all ore mined will be made by weighing or by volumetric measurements
or by alternate methods as determined at Lessee's sole discretion. All
calculations employed to determine total weight shall be based upon dry weight.
Lessee shall keep records of the total weight and Mineral Content of all ore
mined and beneficiated for each property owner and the aggregate thereof.
Lessee shall determine the average percent recovery of the Mineral Content
of all ore beneficiated by dividing the Mineral Content recovered and sold
(which figure represents the basis upon which Lessee's net smelter returns are
calculated) by the total Mineral Content of all ore mined prior to
beneficiation. Payment of production royalties to Lessor shall be based on the
Mineral Content of all Subject Ore multiplied by the average percent recovery.
If any production royalty becomes due and payable to Lessor prior to the
determination of the total; Mineral Content of the Subject Ore or the average
percent recovery for all ore beneficiated, Lessee shall pay Lessor a provisional
royalty payment based on the then current available information pertaining to
Mineral Content and average percent recovery as provided in Section 6.
All sampling, measuring, analyzing, weighing, assaying and calculating
shall be done in accordance with procedures generally accepted in the mining
industry.
21. ALTERATIONS. The payments provided in Sections 4, 5, and 6 shall
constitute full consideration to Lessor for any and all alterations or
destruction, both temporary and permanent, of the Property caused by Lessee's
operations. Lessee shall pay Lessor an equitable compensation for actual damages
caused by Lessee's operations to Lessor's personal property, if any, located on
the Property as of the date of this Agreement.
22. FORCE MAJEURE. Lessee shall not be deemed in default in the
Performance of operations hereunder during any period in which such performance
is prevented by any cause reasonably beyond Lessee's control, each of which
cause is called "Force Majeure".
10
Force Majeure shall include, without limitation, fire, floods, storms,
other damage from the elements, strikes, labour disputes, inability to obtain
competent workmen, riots, unavailability of transportation or necessary
equipment, lack of a market reasonably satisfactory for the use of any product
from the Property, action of governmental authorities, failure to receive
required governmental approvals, inability to obtain water for Lessee's
operations, lack of access, litigation, acts of God, and acts of the public
enemy. The term of this Agreement shall be extended for a period equal to the
period of Force Majeure. All such periods shall be deemed to begin at the time
Lessee is prevented from performing its operations hereunder by reasons of Force
Majeure. Nothing in the Section 23 shall limit Lessee's obligation to make
Minimum Payments as provided in Section 4.
23. RIGHTS NOT TO BE SUSPENDED. Any dispute between the parties or
resolution thereof relating to this agreement shall not interfere with or affect
any right Lessee may have under this Agreement.
24. ADDITIONAL AND AFTER-ACQUIRED RIGHTS. If Lessor acquires any
additional right or interest in the Property or property adjacent to the
Property while this Agreement is in effect, (i) Lessor shall promptly notify
Lessee, (ii) Lessor shall promptly offer such right or interest to Lessee, which
offer shall remain open for a period of ninety (90) days after the date it is
made, and (iii) Lessee shall have the right to lease and option the right or
interest from Lessor for payments to Lessor according to the terms presented by
this Agreement.
If Lessor acquires any after-acquired right or interest in the Property,
which right or interest is already warranted in this Agreement, Lessor shall
promptly notify Lessee in writing of the acquisition. Such right or interest
shall become part of the Property and subject to this Agreement without the
payment of any additional consideration by Lessee. Lessor shall sign,
acknowledge, and deliver an Amendment to this Agreement and to the Memorandum of
this Agreement to Lessee, so as to include such right or interest.
25. ASSIGNMENT. Upon notice to the other party pursuant to Section 28,
either party may assign all, or a portion of, their respective rights under this
Agreement. Effective as of the date of the assignment, the assigning party shall
be released and held harmless by the non-assigning party from all further duties
and obligations arising from the Agreement concerning the Property, except for
any duties or obligations that accrued but have bot been performed or satisfied
prior to the assignment. A Memorandum of Assignment in recordable form shall be
provided to the non-assigning party by the assigning party.
In the event Lessor assigns less than its entire interest and/or assigns
the Agreement to two or more assignees, Lessee may in its sole discretion
require the assignees, and Lessor (if Lessor retains an interest), to elect a
single account to which all payments due under this Agreement may be paid, and
Lessor and its assignees shall be solely responsible for dividing such payments
among themselves.
11
26. COOPERATION. Lessor agrees, in good faith, to cooperate with Lessee
where such cooperation is required by Lessee, in Lessee's obtaining of all
necessary permits required in Lessee's exercise of any and all rights under this
Agreement.
27. NOTICE. Any notice or other instruction required or desired to be
given under Agreement shall be effective when written notice is personally
delivered to the party to be given such notice or the same has been deposited in
the United States Mail, if mailed by the Lessor or in the Canadian mail if such
notice is sent by Lessee, certified return receipt requested, or registered,
with postage thereon fully paid, to the address set forth above. Either party
may change such addresses by giving written notice in like manner to the other
party.
28. SEVERABILITY. In the event that any court or administrative body or
competent jurisdiction determines that any part, term, or provision of this
Agreement is unenforceable, illegal, or in conflict with any federal, state,
regional or county law, the parties shall petition (or shall hereby be deemed to
have petitioned) such court or administrative body to reform such part, term, or
provision in such a way as to carry out the intent of the parties hereto to the
extent permissible under such law; provided, however, that if the court or
administrative body declines to so act, then, such part, term, or provision
shall be considered severable from the rest of the Agreement, and the remaining
provisions of the Agreement shall not be thereby affected, and this Agreement
shall be construed and enforced as if the Agreement did not contain such part,
term, or provision.
29. BINDING EFFECT, CONSTRUCTION AND ENFORCEMENT. All covenants,
conditions, and terms of this Agreement shall be of benefit to run with the
Property and shall bind and inure to the benefit of the parties hereto, their
respective heirs, successors, personal representatives, subsidiaries,
affiliates, including any business entity of which the majority of the equity is
owned directly or indirectly by Lessor or Lessee or their partners, principals,
or officers and assigns. This Agreement shall be construed and enforced in
accordance with the laws of the State of Nevada.
30. PERPETUITIES. As to any provision in the Agreement, the parties hereto
do not intend that there shall be any violation of the Rule Against Perpetuities
or any related rule. If any such violation should inadvertently occur, it is the
intent of the parties hereto that the appropriate court shall reform the
provision in such a way as to approximate most closely to the intent of the
parties hereto within the limits permissible under such rule or related rule.
12
31. MEMORANDUM. Concurrently with the execution of this Agreement, Lessor
shall execute and deliver to Lessee a Memorandum of this Agreement in recordable
form.
32. EXECUTION. This Agreement may be executed in one or more counterparts,
each of which shall be as fully binding on the signatory parties as if executed
by all parties.
33. All payments that accrue under this agreement shall be paid to the
individuals set forth below in the percentages indicated below:
NAME INTEREST
---- --------
Bamco Exploration, Inc. 25%
Xxxxxx X. Xxxxx and
Xxxxxx Xxxxx
0000 Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxx, Xxxxxx
00000
Xxxxxxx Xxxxx and 25%
Xxxxx Xxxxx
0000 Xxxxxxx 00
Xxxxxxx xxxxx, Xxxxxx
00000
Xxxxx Xxxxxxxx 25%
000 XX 00xx Xxx
Xxxxxxxx, Xxxxxx
00000
Xxxx X. Xxxxx 25%
000 Xxxx Xxxxx
Xxxxxxxx, Xxxxxxxx
00000
The parties certify that the percentages set forth opposite their respective
names are their share of the payments due them under this agreement.
34. SOLE AGREEMENT. This Agreement and the Exhibits attached hereto set
forth the entire agreement between the parties with respect to the subject
matter thereof. This Agreement supersedes all prior negotiations and agreements
between the parties with respect to the subject matter of this Agreement shall
be effective unless reduced to writing and executed by the parties hereto. The
division of this Agreement into sections and the use of captions are solely for
convenience and shall not be used in its interpretation.
13
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the day and year first above written.
LESSOR LESSEE:
BAMCO EXPLORATION, INC. TRIO GOLD CORP.
/s/ Xxxxx X. Xxxxxxxxx
---------------------------- ----------------------
By: Xxxxxx X. Xxxxx By: Xxxxx X. Xxxxxxxxx
TITLE: ____________________ TITLE: President
____________________________
Xxxxxx X. Xxxxx
SS# ________________________
____________________________
Xxxxxx Xxxxx
SS# ________________________
____________________________
Xxxxx Xxxxxxxx
SS# ________________________
____________________________
Xxxx X. Xxxxx
SS# ________________________
/s/ Xxxxxxx Xxxxx
-----------------
Xxxxxxx Xxxxx
SS#
-------------
/s/ Xxxxx Xxxxx
-----------------
Xxxxx Xxxxx
SS#
-------------
14
EXHIBIT "A"
TO
MINERAL LEASE AND PURCHASE OPTION AGREEMENT
DATED March 1 ,1989
BY AND BETWEEN
BAMCO EXPLORATION INC,
XXXXXX X. XXXXX AND XXXXXX XXXXX, husband and wife,
XXXXXXX XXXXX AND XXXXX XXXXX, husband and wife,
XXXXX XXXXXXXX, widow, AND XXXX X. XXXXX, widow, AS LESSOR
AND
TRIO GOLD CORP. AS LESSEE
Under the terms of the above referenced Agreement, Lessor has leased and
optioned to Lessee certain unpatented mining claims referred to as the Property,
which are situated in the county of Elko, State of Nevada and more specifically
named and described as follows:
Nevada MC Recorded Location
Mane of Claim Serial No. Book Page Date
------------- ---------- -------------- ----
Look Claim Block
----------------
Look #1 114348 130 108 05/30/70
Look #2 114349 130 110 05/30/70
Look #3 114350 130 111 05/30/70
Look #4 114351 130 112 05/30/70
Look #5 114352 130 113 05/30/70
Look #6 114353 130 114 05/30/70
Look #7 114354 130 115 05/30/70
Look #8 114355 130 116 05/30/70
Look #9 114356 130 117 05/30/70
Look #10 114357 130 118 05/30/70
Look #11 114358 130 119 05/30/70
Look #12 114359 130 120 05/30/70
Look #13 114360 130 121 05/30/70
Look #14 114361 130 122 05/30/70
Look #15 114362 130 123 05/30/70
Look #16 114363 130 124 05/30/70
Look #17 114364 130 125 05/30/70
Look #18 114365 130 126 05/30/70
Look #19 114366 130 127 05/30/70
Look #20 114367 130 128 05/30/70
Look #21 114368 130 129 05/30/70
Look #22 114369 130 130 05/30/70
Nevada MC Recorded Location
Name of Claim Serial No. Book Page Date
------------- ---------- -------------- ----
Look #23 114370 130 131 05/30/70
Look #24 114371 130 132 05/30/70
Look #25 253116 406 159 07/24/82
Look #26 253117 406 160 07/24/82
Look #27 253118 406 161 07/24/82
Look #28 253119 406 162 07/24/82
Look #29 253120 406 163 07/24/82
2
EXHIBIT "B"
TO
MINERAL LEASE AND PURCHASE OPTION AGREEMENT
DATED March 1 ,1989
BY AND BETWEEN
BAMCO EXPLORATION INC,
XXXXXX X. XXXXX AND XXXXXX XXXXX, husband and wife,
XXXXXXX XXXXX AND XXXXX XXXXX, husband and wife,
XXXXX XXXXXXXX, widow, AND XXXX X. XXXXX, widow, AS LESSOR
AND
TRIO GOLD CORP. AS LESSEE
DEED AND ROYALTY AGREEMENT
THIS DEED AND ROYALTY AGREEMENT ( hereinafter referred to as the "Deed") is
made as of the 1st day of March, 1989 by and between Bamco Exploration, Inc., a
Nevada corporation with offices at 0000 Xxxxxx Xxxxxxxxx, Xxxxxx Xxxxxxxx,
Xxxxxx 00000 and Xxxxxx X. Xxxxx and Xxxxxx Xxxxx, husband and wife, of the same
address; Xxxxx Xxxxxxxx, a widow, whose address is 000 XX 00xx Xxxxxx, Xxxxxxxx,
Xxxxxx 00000; Xxxx X. Xxxxx, a widow, whose address is 000 Xxxx Xxxxx, Xxxxxxxx,
Xxxxxxxx 00000; and Xxxxxxx Xxxxx and Xxxxx Xxxxx, husband and wife, whose
address is 0000 Xxxxxxx 00, Xxxxxxx Xxxxx, Xxxxxx 00000 (hereinafter
collectively referred to as "Grantor") and Trio Gold Corp. a company
incorporated under the Laws of The Province of Alberta, Canada. (hereinafter
referred to as "Grantee"). Grantor and Grantee are hereinafter collectively
referred to as the "Parties".
WITNESSETH, that Grantor, for and in consideration of the sum of Ten
Dollars ($10.00) and other good and valuable consideration in hand paid by
Grantee, the receipt of which is hereby acknowledged by Grantor, has granted,
bargained, sold, conveyed and confirmed, and by these presents does grant,
bargain, sell, convey and confirm unto Grantee, its successors and assigns, all
of Grantor's rights, title and interest in certain unpatented lode mining claims
(hereinafter referred to as the "Mining Claims") located in Elko County, Nevada,
which are more particularly described on Exhibit "A" attached hereto ,and
incorporated herein by the reference, together with all rights of ingress and
egress to and from the Mining Claims, all water and mining rights appurtenant
thereto, and all mine dumps and tailings, fixtures and improvements thereon
(hereinafter collectively referred to as the "Property").
HOWEVER, Grantee hereby grants to Grantor a non-participating royalty
interest payable on any production from the Property as stated herein.
1
1. PRODUCTION ROYALTY PAYMENTS. Grantee shall pay Grantor a net smelter
returns ("NSR") production royalty of five percent (5 %) all ores, minerals and
mineral products hereinafter referred to as "Minerals") mined from the Property
and sold by Grantee.
The net smelter returns shall be the amount actually received by Grantee
from the sale of Minerals produced from the Property, less the following costs
to the extent actually incurred and borne by Grantee:
(a) All charges and costs, if any, for transportation on Minerals to a
smelter, refiner, consumer, or purchaser from Grantee or its agents;
(b) All charges, costs and penalties, if any, for smelting, refining
and marketing the Minerals; and
(c) Grantor's proportionate share of all production related taxes.
In the event smelting and/or refining are carried out in facilities owned
or controlled by Grantee, charges, costs, and penalties for such operations,
including transportation, shall mean the amount that Grantee would have incurred
if such operations were carried out at facilities not owned or controlled by
Grantee then offering comparable custom services for comparable products on
prevailing terms.
A production royalty or provisional royalty will be payable four (4) times
each calendar year on or before the forty-fifth (45th) day following each
calendar quarter based upon the net smelter returns received by Grantee during
said quarter. The following adjustments shall be taken into account in
determining the production royalty or provisional royalty payment:
(i) Any adjustments to prices, charges, costs, deductions, or expenses
actually imposed upon or given to. Grantee but not taken into account in
determining the production royalty for the preceding calendar quarter;
(ii) Any adjustments in the number of Ounces previously credited to
Grantee by the purchaser, shipper, smelter, or refiner of Minerals shipped
or sold by Grantee during any preceding calendar quarter; and
(iii) Any adjustments in mineral content and average percent recovery
calculated pursuant to Section (2.)
2
In the event smelting and /or refining are carried out in facilities owned
or controlled by Lessee, charges, costs, and penalties for such operations,
including transportation, shall mean the amount that Lessee would have incurred
if such operations were carried out at facilities not, owned or controlled by
Lessee then offering comparable custom services for comparable products on
prevailing terms.
A production royalty or provisional royalty payment made pursuant to
Section 21 will be payable four (4) times each calendar year on or before the
forty-fifth (45th) day following each calendar quarter based upon the net
smelter returns received by Lessee during said quarter. The following
adjustments shall be taken into account in determining the production royalty or
provisional royalty payment:
(a) Any adjustment to prices, charges, costs, deductions, or expenses
actually imposed upon or given to Lessee but not taken into account in
determining the production royalty for the preceding calendar quarter;
(b) Any adjustment in the number of ounces previously credited to
Lessee by the purchaser, shipper, smelter, or refiner on Minerals shipped
or sold by Lessee during a preceding calendar quarter; and
(c) Any adjustments in mineral content and average percent recovery
calculated pursuant to Section 21.
7. GRANT OF OPTION. Lessor does hereby grant to Lessee an option ( which
option shall be exclusive and irrevocable during the Primary and Extended Terms
of the Agreement) to purchase (hereinafter called "Purchase Option) the
Property, subject to the five percent (5%) production royalty described in
Section 6 ("Production Royalty"). The purchase price under the purchase Option
for the Property is Five Hundred Dollars ($500) per acre (hereinafter called
"Property Price").
Lessor does hereby grant to Lessee an alternative option (which option
shall be exclusive and irrevocable during the Primary and Extended Terms of this
agreement) to purchase (hereinafter called "Alternative Purchase Option") the
Property and eighty percent (80%) of the Production Royalty in the Property. The
purchase price (hereinafter called "Alternative Purchase Price") for the
Property, and eighty percent (80%) of the Production Royalty therein, is Two
Thousand Dollars ($2,000) per acre. Upon exercise of the Alternative Purchase.
Option, the Production Royalty shall be reduced from five percent (5%) to one
percent (1%) on the Property.
3
To exercise the Purchase Option or the Alternative Purchase Option, Lessee
shall give written notice of exercise of option to Lessor. Within ten (10) days
following the date such notice is given, Lessee shall deposit with Lessor the
Property Price or Alternative Purchase Price, as the case may be. Immediately
upon receipt of the Property Price or Alternative Purchase Price, as the case
may be, Lessor shall execute a Deed and Royalty Agreement ("Deed") in the form
of Exhibit "B" ( attached hereto and made a part hereof) to the Property or
Claim Block purchased. In the event Lessee exercises the Purchase Option, the
Deed shall reserve Lessor a five percent (5%) net smelter returns production
royalty as defined in the Deed. In the event Lessee exercises the Alternative
Purchase Option, the Deed shall reserve in Lessor a one percent (1%) net smelter
return on production royalty as defined in the Deed.
In the event Lessee exercises the Purchase Option or Alternative Purchase
Option, all rights, duties, obligation, and reservations set forth in this
Agreement as they apply to the Property shall terminate as of the date Lessor's
Deed is delivered to Lessee, except for such rights, duties, obligations, and
reservations as are expressly set forth in the Deed.
8. TAXES. Lessor and Lessee shall pay their proportionate shares of all
taxes and assessments on their respective interests in the property, and those
taxes and other assessments levied or assessed against their respective personal
properties on or about the Property. At such time as Lessee's activities enhance
the Property so that additional ad valorem taxes are paid on such enhancement
Lessee shall assume the responsibility for paying the general ad valorem taxes
and assessments assessed against the Property. Lessor shall reimburse Lessee for
that portion of the ad valorem taxes and assessments which are attributed to
Lessor's interest in the Property. Lessor shall reimburse the Lessee for the
payment of Lessor's taxes within thirty (30) days from the date Lessor receives
notice from Lessee of the amount for which Lessor is responsible. Lessee shall
have the right, if Lessor does not timely reimburse Lessee, to deduct the
amounts due from any payments due Lessor under this agreement. Lessor shall
furnish Lessee all bills, demands, or notices received by. Lessor for payment of
such fees, taxes, and assessments the payment for which Lessee is responsible at
least thirty (30) days before the same are due and payable together with all
notices or statements relating thereto received by Lessor.
4
Lessee, at its cost and expense, may contest (after prior written notice to
Lessor) by appropriate proceedings conducted in good faith and with due
diligence, the amount or validity of any taxes or assessments with respect to
the Property or the Minerals, provided that Lessee shall make all contested
payments, unless such proceedings shall suspend the collection of taxes or
assessments.
9. LESSER INTEREST AND TERMINATION. Without impairment of the covenants
and warranties of title contained in this Agreement, if Lessor owns less than
the entire and undivided estate in the property as identified on Exhibit "A",
Lessee may terminate this Agreement with respect to that portion of the Property
that is not owned by Lessor. Upon such partial termination, the Property Price,
Alternative Purchase Price, and Minimum Payments shall be proportionately
reduced on a per acre basis and all payments due under this Agreement (
including the Property Price, Alternative Purchase Price, and Minimum Payments)
will be payable to Lessor only in the proportion that Lessor's actual ownership
interest in the Property bears to the interest described on Exhibit "A". Lessee
shall be entitled to offset all monies wrongfully paid to Lessor against Minimum
Payments, the Property Price, Alternative Purchase Price, and/or any production
royalties that accrue to Lessor.
Lessee shall have the right to terminate this Agreement at any time, by
delivering or mailing to Lessor at least thirty (30) days prior to
such termination a written notice.
The termination shall take effect upon the date specified in the notice.
Upon termination, all of Lessee's right, title, interest, and obligations set
forth in this Agreement as they apply to the Property, including the payment of
Minimum Payments, delay rentals or production royalties, shall terminate except
for payments that have accrued hereunder and have not yet been paid.
5
10. THIRD PARTY CLAIMS. If Lessee is advised by an attorney that a third
party may have a claim of ownership in the Property, any of the Mining Claims,
or Minerals or the proceeds therefrom, Lessee may deposit in a special escrow
account any Payments otherwise due Lessor and give written notice of such
deposit to Lessor. The sums deposited shall remain in the special escrow account
until the claim or controversy is resolved or until there has been a final
determination of the claim or controversy by a court or administrative body of
competent jurisdiction and any appeal therefrom, or the period in which to
appeal has expired.
11. DEFAULT. If Lessor believes Lessee's conduct is in violation of this
agreement and such conduct does not involve the failure to pay money to Lessor,
then Lessor shall give Lessee written notice specifying the circumstances which
constitute a default. If the parties agree in writing or a court of competent
jurisdiction determines that there has been such a default and within thirty
(30) days from the date of such agreement or determination Lessee initiates and
diligently attempts to cure such default, Lessee shall be excused from any
liability it might otherwise have to pay damages and this Agreement shall remain
in effect.
If Lessor believes Lessee's conduct is in violation of this Agreement by
reason of Lessee's failure to pay money to Lessor, then Lessor shall give Lessee
written notice specifying the circumstances which constitute a default. If the
parties agree in writing or a court of competent jurisdiction determines that
there has been such a default and within ten (10) days from the date of the
Agreement or determination Lessee pays Lessor the money due Lessor, Lessee shall
be excused from any Obligation to pay damages and this Agreement shall remain in
effect.
If Lessee fails to timely take the appropriate action as prescribed above,
this agreement shall remain in effect and Lessor's sole remedy shall be the
recovery of actual compensatory damages.
12. TITLE. Upon request by Lessee, Lessor shall furnish promptly to lease
all Abstracts of title to the Property, the recorded notices of location,
amendments and relocations, documents, and copies of documents filed with any
county, state, or federal government agency, prior deeds, if any proofs of
labour, and all material in Lessor's possession relating to the Property's
title, description, or otherwise. Upon execution of this agreement, Lessor shall
provide Lessee with any information including any documentation, of which Lessor
is aware or has reason to be aware regarding any existing or past industrial,
milling, manufacturing, waste storage, or beneficiating use of the Property.
Upon written request of Lessee, Lessor shall execute and deliver to Lessee
additional formal assurances or other documents, in proper and recordable form,
as may reasonably be necessary to carry out the terms and intent of this
Agreement.
6
Lessee may pay any promissory note, mortgage, tax, or other lien upon the
Property and be subrogated to the rights of the holder thereof. Lessee shall
have the right to retain, from any payment that would otherwise become payable
to Lessor hereunder, the amount paid by Lessee to discharge such promissory
note, mortgage, tax, or other lien.
13. REMOVAL OF PROPERTY Lessee shall have the right for a period of one
(1) year after any termination made pursuant to Section 9, to enter and remove
from the Property or any Mining Claim, any machinery, fixtures, buildings,
Minerals, and other property which Lessee has erected or placed thereon.
14. WARRANTY. Lessor covenants, represents, and warrants that:
(a) Lessor is the sole legal and equitable owner of the Property,
without limitation or restriction whatsoever, except for paramount title in
the United States;
(b) All of the Mining Claims were properly located in accordance with
federal and state law on land which was then available for mineral
location;
(c) All of the Mining Claims have been properly maintained in
accordance with federal land Policy and Management Act of 1976 and all
other applicable federal, state, regional, and county laws and regulations;
(d) The Property is free and clear of all leases, liens, encumbrances,
and outstanding adverse claims and interests;
(e) Lessor has full power and authority to execute this Agreement;
(f) Lessee shall have the quiet and peaceful possession and enjoyment
of the Property, and Lessor will do everything lawfully. within its power
to defend title to the Property and Lessee's quiet and peaceful possession
and enjoyment thereof against all persons or entities who may claim any
interest in the Property, any of the Mining Claims, or Minerals or the
proceeds therefrom; and
(g) There has been no violation of any applicable federal, state,
regional, or county law or regulation relating to zoning, land use,
environmental protection, or otherwise with respect to the ,Property or
activities relating thereto.
7
In the event Lessor breaches one or more of the above warranties, Lessor
shall indemnify and hold Lessee harmless from and against all damages, claims,
causes of action, or judgments arising as a result of said breach. In addition
to Lessee's remedies at law or in equity, Lessee shall be entitled to deduct
costs or damages incurred as, a result of any such breach from payments due
Lessor under this Agreement and/or the Deed.
15. RELOCATION, AMENDMENT, ABANDONMENT, AND PATENTING. Lessee shall have
the right, but not the duty, at its sole discretion to relocate, survey, amend,
or abandon the location of any one or more of Lessor's Mining Claims whenever
Lessee in its sole discretion deems, such relocation, survey, amendment, or
abandonment desirable to perfect any of Lessor's Mining Claims or to secure
ground purportedly covered thereby, to avoid or create overlaps, or to include
ground within the boundaries of any individual Mining Claim found not to be
included because of improper location procedures or maintenance, or to obtain
millsites. Lessee shall not be entitled to convert the Mining Claims to
millsites unless Lessee has first exercised the Purchase Option or Alternative
Purchase Option as to the Mining Claims in question.
Any such relocations, amendments, or abandonments made by Lessee shall be
done as agent for Lessor. Lessee shall have the right to deduct from production
royalties all costs incurred by Lessee to amend, relocate, cure, or perfect
Lessor's title in the Property. Lessor shall indemnify and hold Lessee harmless
for any causes of action, claims, damages, or injury arising out of any action
performed by Lessee pursuant to this paragraph, including but not limited to any
relocation, amendment, survey, or abandonment of the Mining Claims by Lessee.
Lessor shall deliver to Lessee a full and irrevocable power of attorney
authorizing Lessee to apply for a United States mineral patent for any or all of
the Mining Claims and Lessor agrees not to object to or adverse such
application. If Lessee takes any such action or applies for a patent to any or
all of the Mining Claims, application may be made in Lessor's name and Lessor
shall at the request of Lessee execute any and all documents in connection with
the patent application. Lessee shall pay all costs of such application. If any
patent application is rejected in whole or in part, Lessee shall not be liable
to Lessor for any loss whatsoever provided it has proceeded in good faith. If
patent to the Property or any of the Mining Claims is issued in Lessor's name
and if Lessee has acquired the Property or Mining Claims, Lessor shall promptly
transfer the patented Property or Mining Claims to Lessee.
8
IN WITNESS WHEREOF, the Parties have executed this Deed effective as of the day
and year first above written.
GRANTOR: GRANTEE:
--------
BAMCO EXPLORATION, INC. TRIO GOLD CORPORATION
Bamco Exploration, Inc. /s/ X.X. Xxxxxxxxx
----------------------- ------------------
By: /s/ Xxxxxx X. Xxxxx By: /s/ X.X. Xxxxxxxxx
------------------- ------------------
Title: President Title: President
--------- ---------
/s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
SS#
------------
/s/ Xxxxxx Xxxxx
----------------
Xxxxxx Xxxxx
SS# ____________
----------------
Xxxxx Xxxxxxxx
SS# ____________
----------------
Xxxx X. Xxxxx
SS# ____________
----------------
Xxxxxxx Xxxxx
SS# ____________
----------------
Xxxxx Xxxxx
SS# ____________
9
SCHEDULE B
to the EXPLORATION AGREEMENT
BETWEEN
TRIO GOLD and CASE FINANCIAL
EXCHANGE AGREEMENT
This Agreement is dated the 1st day of December 1998.
BETWEEN:
TRIO GOLD CORP., a company incorporated in Alberta with
an office located at 1170, 000 - 0xx Xxxxxx X.X., Xxxxxxx,
Xxxxxxx
(hereinafter referred to as "Trio")
OF THE FIRST PART
- and -
XXXXXXXXX MINING INC., a corporation incorporation
under the laws of Quebec with an office located at 000 - 0xx
Xxxxxx Xxxx, Xxxx'Xx, Xxxxxx
(hereinafter referred to as "XxXxxxxxx")
OF THE SECOND PART
WHEREAS XxXxxxxxx is the successor to Minorca Resources Inc.
("Minorca") by virtue of a plan of arrangement approved by the shareholders of
the companies on October 19, 1998;
AND WHEREAS Trio and Minorca entered into a joint venture option
agreement dated the 23rd day of June 1995 and amended on November 15, 1995
(Amendment No. 1) and February 8, 1996 (Amendment No. 2) (collectively, the
"Joint Venture Option Agreement");
AND WHEREAS pursuant to the terms of the Joint Venture Option
Agreement, Minorca (now XxXxxxxxx) earned a 25% interest in the property, more
specifically detailed in the Joint Venture Option Agreement (hereinafter
referred to as either "Rodeo Creek" or the "Property");
3
disposition of minerals (including, without limitation, decisions as to buyers,
times of sale, or whether to store or stockpile minerals for a reasonable time
without selling the same).
5. XxXxxxxxx, its employees, representatives, or agents, have the
right at reasonable times with appropriate notice and at their sole risk, to
enter upon the Property and any mine workings thereon for the purpose of
inspecting the same. XxXxxxxxx assumes all liability for and indemnifies,
protects, saves, and holds Trio harmless from any and all fees, losses,
liabilities, suits, and attorneys' fees and actions of every kind, and character
arising out of any death, personal injury, or property damage sustained or
caused by XxXxxxxxx, its representatives, employees or agents while in or upon
the Property.
6. The parties agree that Trio may, in its sole and absolute discretion,
choose not to mine minerals from Rodeo Creek, choose to abandon the Property, or
elect to use the Property for any purpose whatsoever.
7. Trio is under no obligation, express or implied, to perform
exploration or development work, or to mine the property at any rate or in any
manner. The activities of Trio, if any, shall be only to the extent and at the
locations, times, and methods, and in the manner that Trio, in its sole
discretion, may determine.
8. Any notice or other communication required or permitted to be served
under this Agreement shall be in writing and may be served:
(a) personally by leaving it with the party to whom it is addressed at
such party's address as set out below. Such notice shall be deemed
received by the addressee when actually delivered provided that such
delivery is made during normal business hours; or
4
(b) by telefax or any other like method by which a written message may be
sent, directed to the party to whom it is addressed at such party's
address as set out below. Such notice shall be deemed received by the
addressee on the first business day following the date upon which the
notice was sent.
Trio: Trio Gold Corp.
0000, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxx Xxxxxxxxx
XxXxxxxxx: XxXxxxxxx Mining Inc.
000 - 0xx Xxx. X.
Xxxx'Xx, Xxxxxx X0X 0X0
Attention: Xxxxxx Xxxxxx
9. This Agreement and the relationship of the parties hereunder shall be
interpreted in accordance with the laws of the Province of Alberta.
10. If, at any time during the currency of this Agreement, the parties
shall mutually deem it necessary or expedient to make any alteration or addition
to this Agreement, they shall do so by means of a supplemental written agreement
between them, executed in the same manner as this instrument.
11. The terms of this Agreement express and constitute the entire
agreement between the parties hereto and no implied covenant or liability of any
kind on the part of either party hereto is created or shall arise by reason of
these presents.
12. Each of the parties hereto shall, from time to time and at all times,
do such further acts and deliver all such further assurances, deeds and
documents as shall be reasonably required in order to fully perform and carry
out the terms of this Agreement.
5
13. This Agreement wholly replaces and supersedes any and all previous
agreements, whether written or oral, between the parties hereto prior to the
date of this Agreement to the extent that they pertain to the Property.
14. This Agreement shall be binding upon and shall enure to the benefit of
each of the parties hereto and their respective permitted successors and
assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the day and year first above written.
TRIO GOLD CORP.
Per: /s/ Xxxxx Xxxxxxxxx - President
--------------------------------
Per:
--------------------------------
XXXXXXXXX MINING INC.
Per: /s/ Xxxxxx Xxxxxx
--------------------------------
Per:
--------------------------------
APPENDIX "A" TO THE EXCHANGE AGREEMENT
DATED DECEMBER 1, 1998
BETWEEN TRIO GOLD CORP. AND
XXXXXXXXX MINING INC. (the "Exchange Agreement")
1. All capitalized terms used herein shall have the same meanings
attributed to them in the Exchange Agreement.
2. For the purposes hereof, the term "Net Smelter Returns" shall mean
gross revenues from the sale by Trio of all ore mined from the Property and from
the sale by Trio of concentrate, dore, metal and products derived from ore mines
from the Property after deduction of the following:
(a) all smelting and refining costs, sampling, assaying and treatment
charges and penalties including but not limited to metal losses,
penalties for impurities and charges for refining, selling and
handling by the smelter, refinery or other purchaser (including price
participation charges by smelters and/or refiners);
(b) costs of handling, transporting, securing and insuring such material
from the Property or from a concentrator, whether situated on or off
the Property, to a smelter, refinery or other place of treatment, and
in the case of gold or silver concentrates, security costs;
(c) ad valorem taxes and taxes based upon sales or production, but not
income taxes; and
(d) marketing costs, including sales commissions, incurred in selling ore,
concentrate and metal derived from the Property.
3. (a) Where revenue otherwise to be included under this Appendix is received
by Trio in a transaction with a party with whom it is not dealing at
arm's length, the revenue to be included shall be based on the fair
market value under the circumstances and at the time of the
transaction.
(b) Where a cost otherwise deductible under this Appendix is incurred by
Trio in a transaction with a party with whom it is not dealing at
arm's length, the cost to be deducted shall be the fair market cost
under the circumstances and at the time of the transaction.
4. Payment of the Net Smelter Royalty shall be made to XxXxxxxxx within
45 days after the end of each calendar quarter in which Net Smelter Returns, as
determined on the basis of final adjusted invoices, are received by Trio. All
such payments shall be made in United States dollars.
2
5. For the purposes of determining the Net Smelter Returns, all receipts
and disbursements in a currency other than American shall be converted into
United States currency on the day of receipt or disbursement, as the case may
be.
6. After the year in which commercial production is commenced on the
Property, XxXxxxxxx shall be provided annually on or before April 1 with a copy
of the calculation of Net Smelter Returns, determined in accordance with this
Appendix, for the preceding calendar year, certified correct by Trio. All
records pertaining to the calculation of Net Smelter Returns may be inspected by
XxXxxxxxx once each calendar year during business hours upon providing Trio with
72 hours prior written notice of its desire to inspect such records.
7. The right to receive the Net Smelter Royalty from Trio as and when due
shall not be deemed to constitute Trio the partner, agent or legal
representative of XxXxxxxxx or to create any fiduciary relationship between them
for any purpose whatsoever.
8. Trio may, but shall not be under any duty to, engage in price
protection (hedging) or speculative transactions such as futures contracts and
commodity options in its sole discretion covering all or part of production from
the Property and, except in the case where production is actually delivered and
a sale is actually consummated under such price protection or speculative
transactions, none of the revenues, costs, profits or losses from such
transactions shall be taken into account in calculating Net Smelter Returns or
any interest therein.
