EXHIBIT 10.8.1
MEMORANDUM OF UNDERSTANDING FOR ACCESS AND USE OF THE "BRANCA
DE NEVE" AREA AND OTHER AGREEMENTS
By this private instrument signed between the parties, on the one side: (A)
XXXXXXXXX XXXXXXX XX XXXX, Brazilian, married, aeronaut, bearing the Identity
Card no. 1142360/9/SSP-MT and enrolled in the Individual Taxpayer's Register
under no. 063.721.762-91, with address at Xxxxxxx Xxxxxxx Xxxxxx, 00, Xxxxxx,
Xxxxxxxx, Para, and his spouse XXXXXXX XXXXX XXXXXX, Brazilian, married, bearing
the Identity Card no.______________ and enrolled in the Individual Taxpayer's
Register under no. ____________________, with the same address as above,
hereinafter referred to as "NEI", and on the other side, (B) AURORA GOLD
MINERACAO LTDA, a company registered with CNPJ under no. 07.763.340/0001-50,
with its Office at Xx. xxx Xxxxxxxx, 000, Xxxxx 0, Xxx 215 A, parte, Barra da
Tijuca, CEP 22640-100, Rio de Janeiro, RJ, in this act represented by Xxxx
Xxxxxxxx Xxxxxxxxxx Xxxxxxx, Brazilian, born in Xxxxxx, XX, single, lawyer,
registered in the Brazilian Bar Association under no. 80.412/RJ and at CPF/MF
under no. 000.000.000-00, with office at Xx. Xxxxxxxx 000, Xxxxx 0, Xxx 000 X,
xxxxx, Xxxxx xx Xxxxxx, CEP 22640-100, in the City of Rio de Janeiro, State of
Rio de Janeiro, hereinafter referred to as "AURORA"; when jointly hereinafter
referred to as the Parties, have agreed that:
WHEREAS:
A - AURORA is the holder of mineral rights represented by the Process from the
National Department of Mineral Production (DNPM) NO. 850.118/06, hereinafter
referred to as "Mineral Rights", which covers an area which includes the
location known as "BRANCA DE NEVE", as shown in Annex "A"';
B - AURORA signed an agreement to transform in research permits and then to
acquire the Garimpo Piranhas, which is made up of Requests for Mining Permit,
processeses DNPM no. 855.892/96 to 856.289/96, with the title belonging to XXXXX
XXXXXX XXXXXXX XX XXXXX, Brazilian, divorced, businesswoman, bearing the
Identity Card No. RG 3717073/SSPA, and duly enrolled in the Individual
Taxpayer's Register under no. 000.000.000-00, with address at Av. Primeiro xx
Xxxx, n degrees 000, Xxxxxx Xxxxxxxxxx, Xxx Xxxxxx, xxxxx of Rio Grande do Sul,
CEP 96202-000, and DNPM no. 853.597/93 to 853.638/93, for herself and as
executrix of the estate of SEBASTIAO XXXXXXX XX XXXXX, which covers also an area
which includes the location known as "BRANCA DE NEVE", as shown in Annex "A"
hereinafter referred to as "Additional Mineral Rights";
C - NEI is the miner occupier and occupant of the property named Fazenda
__________________ in the city of __________________, State of ____________,
according to the map attached, Annex "B", with same being entirely free and
unencumbered, as well as free of any judicial or extrajudicial issues and/or
administrative, invasion and conflict matters and other events, which property
covers the areas of the Mining Rights and Additional Mining Rights, exploring
in that location the mine named Branca de Neve, hereinafter referred to as
"PROPERTY";
D - AURORA is interested in carrying out researches and in future mining the
areas of the Mineral Rights and the Additional Mineral Rights, and in order to
guarantee the access to such areas, intends to sign a formal agreement for
access and eventually occupation and exploration with NEI of the mineral
resources existing therein in the PROPERTY with the condition of exclusivity;
The Parties agree irrevocably, for themselves and their heirs and successors,
the following:
1
1. MINERAL RIGHTS AND ADDITIONAL MINERAL RIGHTS
1.1. NEI hereby grants to AURORA irrevocable rights to represent them
before the DNPM, exclusively with regards to the PROPERTY and with regards to
the processes relating to the Mineral Rights and Additional Mineral Rights,
under the terms of the attached Power of Attorney (Annex "C").
1.2. NEI undertakes to assist AURORA in everything that is necessary
to clear any possible outstanding issues or irregularities which may exist
regarding the PROPERTY and the Mineral Rights and Additional Mineral Rights.
1.3. NEI undertakes not to interfere or take any steps with regard to
the Mineral Rights and Additional Mineral Rights, unless specifically and
formally requested by AURORA, as indicated in sub-clause 1.4.
1.4. NEI undertakes to transfer without onus to AURORA all mineral
rights which at any time are or come to be held by him, or by any company and/or
cooperative in which he has a share, where its area superimposes, in whole or in
part, the PROPERTY and the Mineral Rights and Additional Mineral Rights, or
located in the area of interest, thus understood as being any area located
within a radius of 10 km (ten kilometers) from the external perimeter of the
area referred to in the object description which is an integral part of the
Mineral Rights and Additional Mineral Rights.
2. ACCESS AND USE OF THE AREAS OF THE MINERAL RIGHTS AND ADDITIONAL MINERAL
RIGHTS
2.1 NEI undertakes and is obliged to allow AURORA access to the PROPERTY
referred to in the Mineral Rights and Additional Mineral Rights, as well as to
assist AURORA to sign agreements which allow such access with possible
occupants, occupiers and/or surface occupants of such areas.
2.2 AURORA, by virtue of this agreement regarding the PROPERTY, undertakes
to pay NEI, provided it holds free and unrestricted access to the Mineral Rights
and Additional Mineral Rights which he declares as of his property with no
pending issues, the following amounts:
(i) During 36 (thirty-six) months AURORA shall pay NEI the half-yearly
sum of R$35,000.00 (fifteen thousand reals) while AURORA's mining activities
take place in the PROPERTY which he declared as his property and possession;
(ii) At the end of the 36 (thirty-six) months period, if AURORA decides
to maintain the mineral activities in NEI's PROPERTY, it shall pay him the final
and total amount of R$500,000.00 (five hundred thousand reals) in order to carry
out in an indefinite manner and without limitations the mineral activities in
the PROPERTY; and if AURORA so opts, NEI shall transfer, assign or alienate a
total of up to 2000ha of the PROPERTY either by way of alienation of the title
to the property or the right to possession, which he holds over the area
together with the improvements eventually existing therein, without any
additional onus, in order that AURORA may then install its eventual facility and
other utilities necessary for its operations, which area shall be returned to
him at the end of the mining activities in the state as it will be found, with
which hereby he accepts and agrees; and
2
(iii) In case AURORA carries out mining work in NEI's area, it shall
pay him a royalty equivalent to 0.75% (zero point seventy-five per cent) of the
gross sales of the mineral product extracted from the areas of the Mineral
Rights and Additional Mineral Rights, deducting the costs related with
transport, insurance, processing, refining, sale, taxes and the Financial
Compensation for the Exploration of Mineral Resources (Cfem), and the royalty,
when due, shall be paid quarterly to the current account indicated by NEI by the
15th (fifteenth) day of the month subsequent to the quarter in which such
royalty is assessed.
(iv) The above-mentioned amounts include all and any payment which the
occupant may have a right to by virtue of the mineral activities carried out by
AURORA in the area, such as rent for the occupation of the area, indemnity for
damages caused and/or share in the mining results, to which the occupant
renounce irrevocably;
(v) AURORA shall assume responsibility for the damages caused in the
area exclusively as a result of its activities, and it is hereby understood that
the amounts mentioned in sub-items (i) to (iii) above already include any and
all indemnity owed to NEI for such damages, as well as rent for the occupation
of the area and participation in the results of the mining, if any, according to
articles 11, line "b", and 27, of the Mining Act.
(vi) AURORA shall be free from the obligation for the payment of the
amounts indicated above in items (i) to (iii) if it is deprived from exercising
its activities or blocked by thirty parties who are occupying the area and/or
exercising mining activities, or AURORA may also negotiate directly such access
to the areas which it is blocked from, including signing agreements which allow
such access with possible occupants and/or occupiers of such areas, deducting
any payment made from the amounts indicated in above items (i) to (iii).
2.3 NEI undertakes to make available to AURORA, in case it so wishes and at
the market value for rent, purchase or hire, as soon as it is so requested by
AURORA, the equipment existing in the area, the housing facilities and deposit,
and the local labour.
2.3.1 In case AURORA hires local labour to carry out any task, AURORA
shall have the option, at its sole and exclusive discretion, of paying for the
services rendered directly to the parties hired.
2.4 Once the condition covered by sub-clause 2.2 (ii) is met, NEI shall no
longer be able to carry out mining activities in the PROPERTY even if they do
not interfere with or affect AURORA's activities, and as from the signature of
this agreement and at the discretion of AURORA, its mineral research activities
shall always have preference and shall prevail over NEI's activities:
2.4.1 To carry out activities in the PROPERTY, as mentioned above, NEI
shall put in order his activities immediately and in accordance with the
applicable legislation, including anything relating to outstanding
environmental issues, and obtain environmental licenses and comply with
requirements, present to the DNPM quantitative information regarding
production and sale relating to the previous year, and pay the Financial
Compensation for the Exploration of Mineral Resources (Cfem), among others.
2.4.2 Mining activities in the PROPERTY shall cease once the amount
referred to item 2.2 (ii) is fully paid up.
2.4.3 NEI shall carry out his activities in the PROPERTY in strict
compliance with all
3
the legal norms, including those of an environmental nature, and shall be held
responsible solely and exclusively for any environmental damage that his
activities caused or may cause, and hereby exempts AURORA from any
responsibility for such damages.
2.4.4 At any time and at its sole and exclusive discretion, AURORA may
carry out inspections of NEI's activities, independently of prior notice, for
the purpose of ascertaining that he is complying with his obligations. In case
AURORA identifies any non-compliance or irregularities, including of an
environmental nature, effectively occurred or may potentially occur, it may
demand from NEI that he adopts measures to mend such damages, giving a deadline
for such measures, or decide on the immediate suspension of such activities.
2.4.5 Any expense that AURORA may incur relating to the steps mentioned
in this agreement, which should have been taken or were not taken by NEI, shall
be deducted from the payments mentioned in sub-clause 2.2.
2.4.6 AURORA may also, at its discretion and as it deems fit, request
NEI to immediately suspend his activities in the PROPERTY, and NEI hereby
undertakes to comply with AURORA's determinations.
2.5 As long as he is in the area, NEI undertakes to maintain the PROPERTY
under his possession, not transferring it to third parties, in good state of
maintenance, and to block the entry of invaders, land occupiers, miners or other
occupants who are not already present therein on this date. Furthermore, NEI is
not allowed to permit thirty parties from carrying out mining activities in the
area and/or from using the facilities and equipment existing in that area,
without prior and express agreement from AURORA.
3. PURCHASE OF SHARE IN THE MINE
3.1. NEI hereby grants AURORA irrevocably the exclusive option of
acquiring at any time his right to receive the equivalent to 0.75% (zero point
seventy-five percent) of royalty from the gold of the mineral reserves that can
be economically mined as mentioned in sub-clause 2.2 (iii) above, for the amount
in national currency equivalent to $ 500,000.00 (five hundred thousand reals).
3.2 AURORA may exercise its option referred to in above sub-clause 3.1
independently of any notification, at any time by just depositing or
transferring the respective sum to the bank account indicated by NEI.
3.3 The right to the purchase referred to in above item 3.1 is conferred in
an irrevocable manner, on the joint production of all the mines which may exist
in the area of the Additional Mineral Rights, as mentioned in sub-clause 3.1.
3.4 AURORA may compensate and deduct from any of the payments provided for
in this Clause Three the amounts which it may spend by virtue of debts and
pledges which may be collected from AURORA by a third party due to obligations
undertaken by NEI.
3.5 NEI hereby indicates that all payments that are due him by force of this
Agreement shall be made by bank transfer to the account of XXXXXXX XXXXX XXXXXX,
account no. 0000000-5, Branch 759-5, Banco Bradesco, for which he shall xxxxx
XXXXXX total acquittance.
3.5.1 Any change of bank, branch, its address, or current account
number, shall be
4
promptly notified by NEI to AURORA, and no responsibility shall be attributed to
AURORA for mismatched payment or delay of payment due to lack of such
communication.
3.5.2 If AURORA, when wanting to exercise the right of option provided
herein, is blocked from affecting the deposit or bank transfer due to the fact
that the current account indicated above by NEI no longer exists, the option in
question shall be considered as adequately exercised.
3.6 In case AURORA does effect payment of the amounts mentioned in
sub-clause 2.2 items (i), (ii) and (iii) within the deadlines mentioned in this
Agreement, NEI shall notify AURORA so that it arranges payment within 30
(thirty) days from the receipt of the notification.
3.6.1 In case AURORA does not effect the pending payment within 30
(thirty) days, under the terms of this sub-clause 3.6, NEI may consider this
agreement as rescinded.
4. DECLARATIONS AND GUARANTEES OF THE ASSIGNOR
4.1 NEI declares and guarantees that:
4.1.1 He is the sole and legitimate title holder of the PROPERTY
involving the Mineral Rights and the Additional Mineral Rights and on both he
has powers to assign the respective rights and comply with their respective
obligations under the terms of this instrument.
4.1.2 The PROPERTY involving the Mineral Rights and the Additional
Mineral Rights was legally acquired and has been maintained valid and in regular
situation, in accordance with the dispositions provided in the applicable
legislation, and is free and clear of any and all onus or judicial or
extrajudicial encumbrances, claims or impugnation of any nature by thirty
parties, including any public authority.
4.1.3 The PROPERTY involving the Mineral Rights and the Additional
Mineral Rights is valid and whole in its dimensions and is free and clear of any
taxes and duties, including the farm reform tax, and there is no pending
irregularity or infraction charge against it.
4.1.4 He assumes all and any responsibility on the PEOPERTY, involving
the Mineral Rights and the Additional Mineral Rights resulting from acts or
facts which they caused or are related to them, including but not limited to
environmental, labour and third party liabilities, including those relating to
future demands. NEI further undertakes to reimburse AURORA in case this is
required to incur expenses or charges as a result of such liabilities, in which
cases AURORA shall be allowed to compensate such expenses and charges and deduct
them from future payments which may be due to NEI under the terms of this
Agreement.
4.1.5 There are no agreements or instruments signed by NEI which may
negatively affect in any way the Mineral Rights and the Additional Mineral
Rights.
4.1.6 He renounces expressly any payment, rent, indemnity, share in the
results of the mine or rights to royalty other than those provided for herein,
resulting from law or agreements, relating to assessment, research, development,
mining, processing, services, rights of access or passage, or those which may be
developed in the area of the Mineral Rights and the Additional Mineral Rights.
5
4.1.7 He shall abstain from questioning, administratively or
judicially, in any form and in any instance, the validity and regularity of the
Mineral Rights, the Additional Mineral Rights belonging to AURORA or any of
their previous title holders.
5. DECLARATIONS AND GUARANTEES OF THE PARTIES
5.1 The Parties declare and guarantee that:
5.1.1 This Agreement is signed in an irrevocable manner, for all legal
purposes, and the terms therein are applied also to the heirs and successors of
the parties.
5.1.2 The content of this Agreement as well as all information and data
related to its execution are strictly confidential and considered property of
AURORA, therefore NEI shall not publish, divulge or make any public declaration
or to third parties anything relating to this contract or to the activities
contemplated therein, without the prior agreement from AURORA, including the
case where the information requested is by virtue of the law or by a competent
authority.
5.1.3 This Agreement represents the whole and complete understanding
between the Parties, and supersedes any and all adjustment, agreement or
contract prior to he current one.
5.1.4 This Agreement as well as its Annexes, has the force of an
extrajudicial executive title, subject to specific execution, under the terms of
article 639 of the Civil Procedure Code.
5.1.5 Whenever necessary, the Parties shall take steps, supply
information and additional documentation, as well as formalize the instruments
required or convenient for the implementation and execution of the purposes and
conditions established in this Agreement.
6. NOTIFICATIONS
6.1 All notifications related to this Agreement or documents which should be
transmitted between the Parties shall be made in writing and shall be considered
effectively delivered: (i) on the receipt date, by means of a receipt from the
Party to be notified, with the addresses to be used being those indicated in the
introduction of this Agreement; or (ii) on the next business day after the fax
transmission date to the Party to be notified, with the fax transmissions to be
made to the following numbers: (a) for AURORA: (00) 00000000; and (b) for NEI:
(00) 0000 0000
7. ASSIGNMENT
7.1 NEI may not assign or transfer to thirty parties any of his rights or
obligations deriving from this Agreement, specially the payments which he is
entitled to under the above terms.
7.2 AURORA may at its sole and exclusive discretion and independently from
authorization, assign and transfer to thirty parties its rights and obligations
deriving from this Agreement provided there is a subrogation to the third
assignee of such rights and obligations.
8. ANTECIPATED RESCISSION OF THE AGREEMENT
8.1 AURORA shall have the right, by means of a notice addressed to NEI, to
denounce this agreement and consider it terminated wholly or partly, if at its
exclusive discretion the results of the geological assessment, even if partial,
indicate the non-existence or insufficiency of gold reserves that may be mined
on an industrial scale. In this case, the agreement shall be deemed
6
immediately as rescinded, and the parties are freed from the undertakings yet to
be due, which they reciprocally undertook under the terms of this instrument,
without any of the parties being entitled to any indemnity or compensation of
any nature by virtue of the rescission thus taking place.
8.2 Still in this case, AURORA:
a) Shall not be entitled to the reimbursement of any amount previously paid to
NEI or spent in costing the research works;
b) Is exempted from effecting any payment yet due,
c) Shall withdraw from the locations, returning same in the state there are to
NEI;
9. ARBITRATION
9.1 The Parties elect the main court of the capital of Rio de Janeiro to
solve any controversy between them resulting from this Agreement, to the
exclusion of any other court.
IN WITNESS WHEREOF, the parties execute this instrument in 3 (three)
counterparts of identical tenor and form, in the presence of the witnesses
below.
Xxx xx Xxxxxxx, Xxxxx 00, 0000
XXXXXXXXX XXXXXXX XX XXXX XXXXXXX XXXXX XXXXXX
XXXXXX GOLD MINERACAO LTDA
Witnesses:
1.__________________________
Name:
ID Card No.:
CPF no.:
2.__________________________
Name:
ID Card No.:
CPF no.:
7
POWER OF ATTORNEY
With this Power of Attorney, XXXXXXXXX XXXXXXX DE LIMA, Brazilian, married,
aeronaut, bearing the Identity Card no. 1142360/9/SSP-MT and enrolled in the
Individual Taxpayer's Register under no. 063.721.762-91, with address at Xxxxxxx
Xxxxxxx Xxxxxx 00, Xxxxxx, Xxxxxxxx, Par , and his spouse XXXXXXX XXXXX XXXXXX,
Brazilian, married, bearing the Identity Card no._________ and enrolled in the
Individual Taxpayer's Register under no. _________, with the same address as
above, hereinafter referred to as the PRINCIPALS, appoint with ample and general
xxxxxx XXXX XXXXXXXX XXXXXXXXXX XX XXXXXXX, Brazilian, single, lawyer,
registered at the Brazilian Bar Association (RJ) under no. 80412 and enrolled in
the Individual Taxpayer's Register under no. 000.000.000-00 and XXXX X. XXXXX,
Brazilian, single, lawyer, registered at the Brazilian Bar Association under no.
126.000, with address at XX. XXXXXXXX 000, XXXXX 0 , XXX 000(x) , XXXXX XX
XXXXXX, XX: Regarding the property name Fazenda
_________________________________ in the city of _______________, State of
____________, who may jointly or severally and with regard to the mineral rights
under DNPM (National Department of Mineral Production) no. 850.118/06,
855.892/96 to 856.289/96, and 853.597/93 to 853.638/93 approve mineral
researches, sign agreements for access, indemnity and rent, conferring,
transferring and assigning, wholly or partly, those rights and therefore signing
an "AGREEMENT FOR ACCESS, INDEMNITY AND RENT", signing same in the name of the
PRINCIPALS; all of which for the purpose of putting in order the above-mentioned
mineral rights, maintaining them always in good conditions, and also act before
the DNPM, the Ministry of Mines and Energy, the Brazilian Institute of
Environmental and Renewable Natural Resources (Ibama), SECTAM and other agencies
of the Federal, State and Municipal Public Administration, and the Courts in
general, look up files and processes, apply for and withdraw certificates,
surrender or renounce, apply for filing, appeal and also appoint attorney to
whom may be conferred powers of the "ad judicia" clause and sub-establish this
instrument, with or without reserve of powers, wholly or partly, with this power
of attorney given in an irrevocable manner, and all for the good compliance and
performance for which it is being drawn up.
Xxx xx Xxxxxxx, Xxxxx 00, 0000
XXXXXXXXX XXXXXXX XX XXXX XXXXXXX XXXXX XXXXXX
XXXXXX GOLD MINERACAO LTDA.
8
