EXHIBIT 4.6
LETTER AGREEMENT
TO THE OPTION TO ACQUIRE
A 100% INTEREST IN THE
LA TRINI AND MOLOLOA PROPERTIES
LETTER AGREEMENT ("LA")
AMONG
XX. XXXXXX X. XXXXXXX
00000 Xxxxxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxx 00000
XXX
AND
TMXI RESOURCES S.A. DE C.V.
Ottawa 1469, Col. Providencia
Xxxxxxxxxxx, Xxxxxxx XX 00000
Xxxxxx
AND
TUMI RESOURCES LIMITED
1305 - 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Xxxxxx
RE: OPTION TO EARN A 100% INTEREST OF LA TRINI AND MOLOLOA SILVER-GOLD MINING
PROJECTS, JALISCO STATE, MEXICO.
This LA documents the terms and conditions of the grant to TMXI Resources S.A.
de C.V. ("TMXI"), a wholly-owned Mexican subsidiary of Tumi Resources Limited
("Tumi"), of the sole and exclusive right and option to acquire a 100% interest
from Xx. Xxxxxx X. Xxxxxxx (the "Seller") in certain exploration and mining
concessions in Mexico known as La Trini and La Mololoa Silver-Gold Mining
Projects (which together with any successor or substitute titles are hereafter
collectively referred to as the "Claims") as described in Schedule "A" attached.
The effective date of this LA will be the date on which the conditions set out
in section 3 below are satisfied (the "Effective Date"). Immediately following
the Effective Date each of the parties hereby agrees to settle and enter into a
definitive agreement to supersede and replace this LA but containing the terms
and conditions set out in this LA (the "Formal Agreement"). This LA will be a
binding and enforceable agreement from the date of its execution.
The terms and conditions of this LA are as follows:
1. The Seller represents and warrants that he is the sole legal and beneficial
owner of the titles to the Claims, free and clear of all liens, charges,
encumbrances and third party interests whatsoever, except as set out in
paragraph 2(a) below, which Claims total 356 hectares, and confirms that
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all titles of such Claims have been validly issued and are in good standing
with respect to relevant Mexican laws, including, without limitation, no
significant (over US$2,000) outstanding tax liabilities on any of the
Claims.
2. (a) The Seller confirms that he has the sole and exclusive right and
authority to freely grant the option to TMXI under this LA and also
represents and warrants that the Claims are not subject to existing
underlying option agreements or royalty payments with third parties,
other than a 3% net smelter return payment agreement (the "NSR
Payment") with Xxxxxxx Investments Inc. ("Xxxxxxx") whereby the Seller
is obligated to make the NSR Payment to Xxxxxxx.
(b) The Seller further confirms that he has come to an agreement with
Xxxxxxx whereby the Seller and Xxxxxxx will work together on a timely
basis, but in any event prior to the Effective Date, to cancel the NSR
Payment and to replace it with a new agreement between them on terms
which will compensate Xxxxxxx for the cancellation of the NSR Payment
but which will have no legal or financial consequence to TMXI or the
Claims. TMXI will make all reasonable efforts to properly register
this LA and the Formal Agreement with the Ministry of Mines in Mexico
in a timely manner.
3. TMXI and the Seller both agree that TMXI's obligations under this LA are
subject to the satisfaction of the following conditions, each of which is
for the benefit of TMXI and, except for the condition in (a), may be waived
by TMXI in writing:
(a) TSX Venture Exchange ("TSX") acceptance of the terms of this LA;
(b) completion of an independent due diligence study of the status of the
Claims by TMXI satisfactory to TMXI within 30 days of the date of this
LA or such later date as the Seller may agree to, acting reasonably;
(c) cancellation of the NSR Payment to Xxxxxxx on terms satisfactory to
TMXI, acting reasonably; and
(d) successful registration of this LA and amendments and/or subsequent
agreements that may derive from this LA, such as the Formal Agreement,
pursuant to applicable Mexican Mining Laws.
4. The term of this LA is 2 (two) years from the Effective Date. Concurrently
with the final option payment as described in Clause 5 (c) of this LA, the
Claims will be transferred and registered as directed by TMXI and,
consequently, TMXI will be the sole owner of the Claims.
5. To maintain the option and fully earn its 100% interest, TMXI must make the
following option payments (the "Option Payment" or "Option Payments")
subject to Clause 3 above:
(a) on the Effective Date, make an initial Option Payment to the Seller of
US$100,000, which the Seller may elect to be paid up to one half in
fully-paid common shares of Tumi. The number of shares to be issued
herewith and on Clauses 5 (b) and (c) below will be based on the
closing price of Tumi's shares on the TSX on the date Tumi issues a
press release announcing this LA.
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(b) on the first year anniversary of this LA, make a second Option Payment
to the Seller of US$200,000, which the Seller may elect to be paid up
to one half in fully-paid common shares of Tumi.
(c) on the second and final year anniversary of this LA, make a final
Option Payment to the Seller of US$200,000, which the Seller may elect
to be paid up to one half in fully-paid common shares of Tumi.
The Seller acknowledges that shares issued by any listed company on the TSX
may be subject to a 4-month hold period. At any time during the term of
this LA, TMXI has the right to accelerate the Option Payments referred to
in Clauses 5 (a), (b) and (c) above at which point the Claims will be
concurrently transferred to TMXI provided that TMXI has given 30 days
notice to the Seller of its intention to accelerate the Option Payments.
6. The Seller will retain the right to a non-transferable, other than as
disclosed in Clause 7 of this LA, 1% net smelter return ("NSR") royalty
(calculated and payable on the basis set out in Schedule "B" attached) on
any future metal production from the Claims following commencement of
commercial production. The NSR may, at TMXI's election, be payable, if
possible, directly to the Seller by a smelter of TMXI's choosing, or if not
possible, within five (5) working days of TMXI receipt of payment from the
smelter, pursuant to the terms and conditions of a separate agreement.
Notwithstanding the aforementioned, TMXI will be under no obligation
whatsoever to place the Claims into commercial production. If the Claims
are placed into commercial production, TMXI reserves the right at any time
to curtail, suspend or terminate such commercial production as TMXI in its
sole discretion deems advisable.
7. Notwithstanding the term of this LA, pursuant to Clause 6 above, the Seller
and TMXI agree that TMXI has the sole right, at TMXI's own discretion and
request, to purchase 1/2 (one half) of the NSR from the Seller at any time
for a one-time cash consideration of US$1,000,000.
8. At any time during the term of this LA, TMXI may enter into a joint venture
agreement over the Claims with a third party provided that TMXI continues
to make the Option Payments to the Seller under this LA as they become due
and payable.
9. Both TMXI and the Seller agree that, once made, the Option Payments in
Clause 5 (a), (b) and (c), are not refundable and should these Option
Payments not be fulfilled as they become due, this LA and the option under
this LA will be considered void cancelled unless TMXI remedies such default
within 60 days from the relevant Option Payment due date.
10. Notwithstanding Clause 9 above, TMXI may withdraw from its option under
this LA at any time after the initial Option Payment described in Clause 5
(a) above with no further obligation and/or commitment to the Seller
provided that a 30 days' advance written notice is given to the Seller.
Should TMXI withdraw its option prior to the fulfilment of the term of this
LA, TMXI agrees to return the Claims in good standing and provide all
geological data compiled during the term of this LA to the Seller at which
point the Seller is free to use this information as he wishes, including
the distribution to a third party.
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11. The Seller will provide to TMXI copies of all records and data respecting
the Claims and all reports prepared by or for the Seller in respect to the
Claims as soon as possible following the execution of this LA.
12. Each of the Seller and TMXI agree that time is of the essence for the
execution of this LA and they each agree in good faith to settle and
execute the Formal Agreement on the terms set out in this LA as
expeditiously as possible.
TERMS AGREED AND ACCEPTED THIS 30TH DAY OF NOVEMBER, 0000
/x/ Xxxxxx X. Xxxxxxx
-------------------------
XXXXXX X. XXXXXXX,
SOLE OWNER OF THE CLAIMS
TMXI RESOURCES S.A. DE C.V. TUMI RESOURCES LIMITED
Per: Per:
/s/ Xxxx XxXxxx /s/ Xxxxxx Xxx
------------------------- -------------------------
Authorized Signatory Authorized Signatory
SCHEDULE "A"
MAP SHOWING PROPERTY LOCATIONS
Grupo La Xxxxx X. 18887 ubicado en Monte del Favor, Hostotipaquillo, Jalisco.
1. La Trini Tit 188877 15-00-00 Has.
2. Xxxxxxxxxx xx Xx Xxxxx Xxx 000000 000-00-00 Has.
3. Mololoa Tit 192970 24-00-00 Has.
4. Mololoa No.3 Tit 192962 88-00-00 Has.
5. Mololoa No.4 Tit 176651 64-00-00 Has.
COORDENADAS U.T.M. Hoja XXXXXX-00-X-00 Xxxxxxxxxxxxxx
X.X. Xx Xxxxx X. 000000: Y = 2339394.733 X = 583054.336
X.X. Xxxxxxx X. 000000: Y = 2337617.125 X = 585083.293
Xx X.X. Xx Xxxxx X. 000000 es tambien P.P. de Xxxxxxxxxx xx xx Xxxxx X. 000000,
el P.P. Mololoa
T. 192970 es tambien P.P. de Mololoa Xx. 0 X. 000000 y Mololoa No. 4 T. 176651;
la concesionaria del grupo La Xxxxx X. 000000 por cesion de derechos es la Cia.
Minera La Trini, S.A. de C.V.
SCHEDULE "B"
NET SMELTER RETURNS ROYALTY
1. INTERPRETATION
Where used herein:
(a) "Agreement" means the agreement to which this schedule is
attached, including any amendments thereto or renewals or
extensions thereof.
(b) "the Claims" means those mining claims described in Schedule
"A" of the Agreement and any successor title thereto.
(c) "Fiscal Period" means each calendar year or other period of 12
consecutive months adopted by TMXI for tax purchases during
the term of the Agreement.
(d) "Royalty Interest" means the 1% Net Smelter Return royalty
which may become payable by TMXI to the Seller under the
Agreement.
2. NET SMELTER RETURNS
"Net Smelter Returns" means the actual proceeds received by TMXI from
any mint, smelter, refinery or other purchaser for the sale of TMXI's
share of ores, metals (metals shall include bullion) or concentrates
produced from the Claims and sold, after deducting from such proceeds
the following charges levied by third parties to the extent that they
were not deducted by the purchaser in computing payment: smelting and
refining charges; penalties; assay costs and umpire assay costs; cost
of freight and handling of ores, metals or concentrates from the Claims
to any mint, smelter, refinery, or other purchaser; marketing costs for
products produced from the Claims other than precious metals or ores or
concentrates thereof; and insurance on all such ores, metals or
concentrates.
3. PAYMENT
(a) The NSR may, at TMXI's election, be payable, if possible,
directly to the Seller by a smelter of TMXI's choosing, or if
not possible, within five (5) working days of TMXI receipt of
payment from the smelter.
(b) Each payment under subsection 3(a) shall be accompanied by a
statement indicating the calculation of Net Smelter Return
Royalty hereunder. The Seller shall be entitled to audit,
during normal business hours, such books and records as are
necessary to determine the correctness of the payment of the
Royalty Interest, provided however, that such audit shall be
made only on an annual basis and within 12 months of the end
of the Fiscal Period in respect of which such audit is made.
(c) Payment of the Royalty Interest shall be made to the Seller at
such place or places as it shall advise TMXI from time to
time.
