ORO XXXXXX RESOURCES CORP
(company letterhead)
January 14, 1997
La Teko Resources Ltd.
000 Xxxx 0000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Attn: Xx. Xxxxx Xxxxxxx
Dear Xx. Xxxxxxx
Oro Xxxxxx Resouces Corp. herein proposes an offer to you regarding an option to
acquire the Xxxxxxxxx property in Santa Xxxx County, Arizona.
1) Oro Xxxxxx Resources Corp. will enter into an option agreement on the
properties with La Teko Resources whereby Oro Xxxxxx would have exclusive
right to the claims for a period of three years;
2) During this period of time, Xxx Xxxxxx will agree to spend the sum of
$500,000 on exploration and/or development of the claim group. The
expenditure will be allocated as follows:
Year One $ 100,000
Year Two $ 200,000
Year Three $ 200,000
Any excess expenditures may be carried over to the next year.
3) Oro Xxxxxx will make annual payments to La Teko as follows:
1st anniversary 25,000 shares Oro Xxxxxx common stock
2nd anniversary 50,000 shares Oro Xxxxxx common stock
3rd anniversary Exercise of option by payment of 50,000 shares of
Oro Xxxxxx common stock plus 100,000 cash
4) Production royalties: 1% net smelter royalty
5) Minimum annual royalties:
4th anniversary $50,000
5th anniversary $75,000
6th anniversary $100,000
Cash payments under Section 5 will apply against net smelter royalties.
During the life of the mine.
6) Oro Xxxxxx will make all necessary claim payments and drill core storage
payments and will keep the property in good standing with all regulatory
bodies during the term of this agreement.
7) Oro Xxxxxx will not drop any of the claims without written permission of La
Teko.
8) La Teko will provide Oro Xxxxxx with all data on the property including but
not limited to geological reports, test data, and drill results.
9) Oro Xxxxxx will annually provide La Teko with all factual data generated by
its exploratory programs. Oro Xxxxxx will annually provide La Teko with
all factual data generated by its exploratory programs. Oro Xxxxxx will
provide La Teko with timely verification of annual rental payment, etc.
This agreement subject to the approval of appropriate regulatory authorities.
If this is acceptable, please sign and return by Fax. We will also mail to you
a hard copy for your signature. We shall begin preparation of a formal
agreement immediately. Both parties will make best efforts to complete the
formal agreement within 60 days.
Yours very truly,
ORO XXXXXX RESOURCES CORP.
X. Xxxx Xxxxxx
President
Agreed to:
La Teko Resources Ltd.
/s/ Xxxxxx Xxxxxxx, President
