EXHIBIT 10.12
LETTER AGREEMENT FOR CHINA JOINT VENTURE
Savoy Resources Corp. (Savoy) and a group of companies (ACS) consisting of ATAC
Resources Ltd. (ATAX), Cash Minerals Ltd. (Cash) and Strategic Metals Ltd.
(Strategic) hereby agree to form a joint venture to recognize resource
opportunities in China, acquire prospective targets and explore those
acquisitions.
During the target recognition phase, participation and funding shall be 50%
Savoy and 50% ACS. Once a prospective target is acquired Savoy will have the
right to buy 50% participation and one of the ACS companies will have the right
to the remaining 50% participation. The participating ACS company will be
determined based upon the main commodity at the acquired target. ATAC will have
first right to gold targets, Cash to energy and industrial mineral targets and
Strategic to other metal and gemstone targets.
If at any time one of the joint venture members is unable or unwilling to
fulfill its obligations, its participating interest shall be diluted according
to the following formula.
contibutions by non-participating party
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participating interest = total contributions by participating and
non-participating parties
If an ACS company elects not to participate or to sell its interest, another of
the ACS companies will have the first right to participate in its place
or purchase that that interest. If any party's participating interest dilutes
below 10% its participating interest shall automatically convert to a net profit
royalty interest in the joint venture.
All decisions by the joint venture shall be by majority with the voting rights
proportional to the participant's interest. In case of a tie vote concerning
funding of a project, the party proposing the larger program shall have the
right to institute that program at its own expense if the other partner declines
to participate at that level. A non-participating partner's interest will not
be diluted until the entire amount of the proposed expenditures is completed.
The partners agree that Xxxxxx, Xxxxxx & Associates (1981) Limited shall be the
operator of the joint venture.
The joint venture shall be subject to the laws of British Columbia. Should any
dispute arise concerning this Agreement, the parties agree to refer it to an
arbitrator for binding resolution.
Dated this 22nd day of January 2004 at Vancouver, B.C.
/s/ Savoy Resources Corp.
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Savoy Resources Corp.
/s/ ATAC Resources Ltd.
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ATAC Resources Ltd.
/s/ Cash Minerals Ltd.
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Cash Minerals Ltd.
/s/ Strategic Metals Ltd.
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Strategic Metals Ltd.
/s/ Xxxxxx, Xxxxxx & Associates (1981) Limited
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Xxxxxx, Cathro & Associates (1981) Limited
