EXHIBIT 4.66
OPTION AGREEMENT DATED JUNE 11, 2003,
BETWEEN THE COMPANY AND BALLAD GOLD & SILVER LTD.
(FORMERLY BALLAD VENTURES LTD.)
BALLAD VENTURES LTD.
Xxxxx 000- 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, XX X0X 1 L6
Telephone: (000) 000-0000 Fax: (000) 000-0000
www.balladnetcom - email: ir@balladnetcom
June 11, 2003
IMA Exploration Inc.
Xxxxx 000, 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX Xxxxxx
ATTENTION: XXXXXX XXXXXX, PRESIDENT
Dear Xx. Xxxxxx,
RE: LETTER AGREEMENT
PENASCUDO PROPERTY, CHUBUT PROVINCE, ARGENTINA
For $ 10.00 and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, IMA Exploration Inc. and its wholly
owned Argentinean subsidiary, Inversiones Mineras Argentinas S.A., (collectively
referred to as "IMA") hereby grant to Ballad Ventures Ltd. ("Ballad") the right
and option, exclusively for a period of 60 days, to acquire an option on the
Penascudo Property ("Mineral Claims" or "Property") in Argentina on the
following business terms:
1. IMA confirms that it holds a 100% interest, subject only to a 0.5%
NSR Royalty (capped at a cumulative maximum of US $250,000) in
favour of Southern Rio Resources Ltd, in the Penascudo Property. The
Property consists of the land holdings listed in Appendix 1.
2. Ballad will have the exclusive option (the "Option") to acquire a
70% interest in the Property by:
a) Completing US$1,800,000 worth of work on the Property
according to the following schedule:
i. on or before October 31,2004 - US $100,000;
ii. on or before October 31,2005 - US $300,000 (cumulative);
iii. on or before October 31,2006 - US $500,000 (cumulative);
iv. on or before October 31,2007 - US $800,000 (cumulative);
and
v. on or before October 31,2008 - US$1,800,000 (cumulative)
b) By either issuing 500,000 shares of Ballad to IMA within ten
days after the approval of the full Option agreement by the
TSX Venture Exchange or, if the share consolidation of Ballad
proceeds as announced in a news release dated April 2, 2003,
by issuing 500,000 shares of Ballad Gold & Silver Ltd. within
ten days after acceptance for filing of this consolidation
and the full Option agreement by the TSX Venture Exchange.
c) By paying to IMA US $300,000 in cash on or before October
31,2008.
d) By issuing an additional 500,000 shares of Ballad or Ballad
Gold & Silver Ltd., as the case may be, on or before October
31,2008.
3. Upon completion of the terms described under 2. above, Ballad will
have earned a 70% interest in the Property subject to a 1.5% NSR
Royalty in favour of IMA and Southern Rio Resources Ltd. on Ballad's
portion of all products mined from the Property. The portion payable
to Southern Rio Resources will be 0.5%, with cumulative payments to
Southern Rio Resources Ltd to be capped at a maximum of US $250,000.
The remainder of the 1.5% NSR Royalty will be payable to IMA.
4. After the acquisition of a 70% interest in the Property, Ballad will
have the exclusive Option to acquire an additional 15% interest in
the Property by completing a feasibility study. IMA's share (15%) of
the feasibility study cost will be advanced by Ballad. This advance
will be repaid to Ballad from a 50% portion from all cash proceeds
of production from the Property due or payable to IMA until this
advance is fully reimbursed to Ballad.
5. Upon completion of the feasibility study described under 4. above,
Ballad will have earned an 85% interest in the Property subject to a
1.5% NSR Royalty in favour of IMA and Southern Rio Resources Ltd. on
Ballad's portion of all products mined from the Property. The
portion payable to Southern Rio Resources will be 0.5%, with
cumulative payments to Southern Rio Resources Ltd to be capped at a
maximum of US $250,000. The remainder of the 1.5% NSR Royalty will
be payable to IMA.
6. During the duration of the Option period, Ballad will:
a) Pay to IMA, from time to time and with sufficient advance
notice from IMA, such amount as equals the fees and taxes due
on the Property to Argentinean Authorities plus a charge of
5% for IMA's administration no later than 15 days prior to
their due dates. IMA will pay such amounts forthwith to the
Authorities and maintain the Property in good standing.
b) report exploration activities to IMA at least once quarterly.
c) have a one time election, after having spent US $100,000, to
delay subsequent work expenditures and the one cash payment
by one full year each by notifying IMA and by paying US
$25,000 to IMA.
d) Indemnify and save harmless IMA from any and all liability
arising from the conduct of mineral exploration by Ballad on
the Mineral Claims
including but not limited to any liability from
environmental and archaeological damages.
e) be sensitive to local Social activities and carry out all
required baseline studies required by the Mining Ministry in
Argentina before carrying out exploration work.
7. During the Option period neither Ballad nor IMA shall assign some or
all of its interest in this agreement without the written consent of
the other party, such consent to be not reasonably withheld. Consent
will be needed only to assure that the assignee shall agree in
writing to be bound by the terms of this agreement applicable to the
assignor. This written consent shall not apply to a transfer of
interest to an affiliated corporation.
8. During the Option period Ballad will be the sole operator of any
exploration on the Property, will have full access to the Property
and will be provided by IMA with all data.
9. For the purpose of this Agreement, the area covered by the Mineral
Claims shall include an area of influence extending 5 km from the
outer boundary of the Mineral Claims. All mineral and related rights
that may be acquired directly or indirectly, within the area of
influence after the date of signing of this Agreement by IMA or
Ballad during the currency of this Agreement shall become part of
this Agreement. During the term of the Option, if Ballad acquires
mineral and related rights within 5 km of the outer boundary of the
Mineral Claims and subsequently wishes to abandon those rights, it
will, prior to abandonment, offer to transfer those rights to IMA,
will transfer those rights at IMA's request and at IMA's cost for
the transfer. This agreement will not restrict in any way the rights
of either Ballad or IMA to acquire interests outside the area of
Influence.
10. When a Joint Venture is formed under 3, the parties in good faith
will negotiate and execute a joint venture agreement having
reasonable terms which are customary in the Canadian mining
industry.
11. Any party wishing to issue a press release relating to the Property
will provide a copy of this release to the other party to allow for
comments prior to release.
12. Termination of Option
a) Subject to subsection 12b, the Option shall terminate if
Ballad fails to make the required share issuances and cash
payments, and fails to complete the minimum cumulative
expenditures in accordance with subsection 2. herein within
the time periods specified therein.
b) If Ballad shall be in default of any written requirement in
the option, IMA shall give written notice to Ballad
specifying the default and Ballad shall not lose any rights
granted under the Option, unless within 30 days after the
giving of notice of default by IMA, Ballad has failed to take
reasonable steps to cure the default by the appropriate
performance.
c) If the Option is terminated in accordance with subsections 12
a) and 12 b) herein, Ballad shall have no interest in or to
the Mineral Claims, and all share issuances, expenditures and
payments made by Ballad to or on behalf of IMA under the
Option shall be non-refundable by IMA to Ballad for which
Ballad shall have no recourse.
d) Upon termination of this Agreement, Ballad shall make the
required cash payments to maintain the Property in good
standing for a period of at least six (6) months from the
date of termination and Ballad shall turn over to IMA
originals of all factual maps, reports, assays, results and
any other factual data. Ballad will be required to contribute
to its share of any environmental rehabilitation required as
a result of the work undertaken after the date hereof and up
to the date or termination notice.
Please consider these terms and if agreeable return a signed copy of this letter
to us. Once signed by both Parties and all conditions under Clause 1 having been
fulfilled or waived, this agreement shall constitute a binding agreement between
both parties.
The terms of this agreement will be the basis for a full Option agreement to be
prepared within 60 days of signing this letter agreement.
Sincerely,
Agreed on this the - day of June 2003
BALLAD VENTURES LTD. IMA EXPLORATION INC.
/s/ XXXXXXX BERUSCHI /s/ XXXXXX XXXXXX
--------------------------------- ------------------------------------
Xxxxxxx Beruschi Xxxxxx Xxxxxx
President President
INVERSIONES MINERAS ARGENTINAS S.A.
Per:
/s/ XXXXXX XXXXXX
-----------------------------------
Authorized Signature
APPENDIX 1
PENASCUDO PROPERTY DESCRIPTION
Minas located in CHUBUT Province, Argentina.
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CLAIM NAME NO. EXPEDIENTE VALID SINCE
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Xxxxxxx 12966 1996
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Xxxxxxx 12967 1996
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Xxxxx 12970 1996
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Xxxxxxxx 12971 1996
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Xxxxxx 12974 1996
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Xxxxxxx 12978 1996
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Xxxx 12977 1996
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