PROPERTY OPTION AGREEMENT
THIS AGREEMENT made and entered into as of the 24th day of March, 2006
BETWEEN: ▇▇▇▇ ▇▇▇▇▇, an individual having a mailing address at
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇
(herein called the "Optionor")
OF THE FIRST PART
AND: American Goldrush Corp., a company having an office at 708-1155
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇.▇., ▇▇▇ ▇▇▇
(herein called the "Optionee")
OF THE SECOND PART
WHERAS the Optionor has represented that he is the sole recorded and beneficial
owner of Arizona State Mineral Exploration Permit No. 08-110130 (the "Permit")
covering the South Vulture Property (the "Property) described in Schedule "A"
attached hereto;
AND WHEREAS the Optionor now wishes to grant to the Optionee the exclusive right
and option to acquire an undivided 100% right, title and interest in the Permit
covering the Property on the terms and conditions hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises,
the mutual covenants herein set forth and the sum of One Dollar ($1.00) of
lawful money of United States currency now paid by the Optionee to the Optionor
(the receipt whereof is hereby acknowledged), the Parties hereto do hereby
mutually covenant and agree as follows:
1. DEFINITIONS
The following words, phrases and expressions shall have the following meanings:
(a) "After Acquired Properties" means any and all mineral
interests staked, located, granted or acquired by or on behalf
of either of the parties hereto during the currency of this
Agreement which are located, in the whole or in part, within
two miles of the existing perimeter of the Property;
(b) "Expenditures" includes all direct or indirect expenses [net
of government incentives and not including payments to the
Optionor pursuant to section 4, paragraphs (a), (b)(ii),
(c)(ii), (d)(ii), (e)(ii) hereof ] of or incidental to Mining
Operations. The certificate of the Controller or other
financial officer of the Optionee, together with a statement
of Expenditures in reasonable detail shall be prima facie
evidence of such Expenditures; the parties hereto agree that
Property payments and Property expenditures are separate
payments as outlined in paragraph 4;
(c) "Facilities" means all mines and plants, including without
limitation, all pits, shafts, adits, haulageways, raises and
other underground workings, and all buildings, plants,
facilities and other structures, fixtures and improvements,
and all other property, whether fixed or moveable, as the same
may exist at any time in, or on the Property and relating to
the operator of the Property as a mine or outside the Property
if for the exclusive benefit of the Property only;
(d) "Force Majeure" means an event beyond the reasonable control
of the Opionee that prevents or delays it from conducting the
activities contemplated by this Agreement other than the
making of payments referred to in Section 4 herein. Such
events shall include but not be limited to acts of God, war,
insurrection, action of governmental agencies reflecting an
instability in government procedures, or delay in permitting
unacceptable to both Optionor and Optionee;
(e) "Mineral Products" means the commercial end products derived
from operating the Property as a mine:
(f) "Mining Operations" includes:
(i) every kind of work done on or with respect to the
Property by or under the direction of the Optionee
during the Option Period or pursuant to an approved
Work Program; and
(ii) without limiting the generality of the foregoing,
including all work capable of receiving assessment
credits pursuant to the laws, rules, and regulations
of the state of Arizona and the work of assessment,
geophysical, geochemical and geological surveys,
studies and mapping, investigating, drilling,
designing, examining equipping, improving, surveying,
shaft sinking, raising, cross-cutting and drifting,
searching for, digging, trucking, sampling, working
and procuring minerals, ores and metals, in surveying
and bringing any mineral claims to lease or patent,
in doing all other work usually considered to be
prospecting, exploration, development, a feasibility
study, mining work, milling concentration,
beneficiation or ores and concentrates, as well as
the separation and extraction of Mineral Products and
all reclamation, restoration and permitting
activities;
(g) "Option" means the option granted by the Optionor to the Optionee
to acquire an undivided 100% right, title and interest in and to the Property as
more particularly set forth in Section 4;
(h) "Option Period" means the period from the date hereof to the
date at which the Optionee has performed its obligations to
acquire its 100% interest in the Property as set out in
Section 4 hereof;
(i) "Property" means the Arizona state land described in Schedule
"A";
(j) "Work Program" means a program of work reasonably acceptable
to both parties in respect of a particular Property, contained
in a written document setting out in reasonable detail;
(i) An outline of the Mining Operations proposed to be
undertaken and conducted on the Property,
specifically stating the period of time during which
the work contemplated by the proposed program is to
be done and performed
(ii) The estimated cost of such Mining Operations
including a proposed budget providing for estimated
monthly cash requirements in advance and giving
reasonable details; and
(iii) The identity and credentials of the person or persons
undertaking the Mining Operations so proposed if not
the Optionor, then a person reasonably acceptable to
both parties hereto.
2. HEADINGS
Any heading, caption or index hereto shall not be used in any way in
construing or interpreting any provision hereof.
3. SINGULAR, PLURAL
Whenever the singular or masculine or neuter is used in this Agreement,
the same shall be construed as meaning plural or feminine or body politic or
corporate or vice versa, as the context so requires.
4. OPTION
The Optionor hereby grants to the Optionee the sole and exclusive right
and option (the "Option") to earn a 100% interest in the Permit covering the
Property exercisable as follows:
(a) The Optionee paying the sum of $5,000 USD to the Optionor by way of cash;
(b) On or before March 24th, 2007
(i) The Optionee incurring Expenditures of $10,000 USD on
the property;
(ii) The Optionee paying $5,000 USD to the Optionor;
(c) On or before March 24th, 2008
(i) Optionee incurring Expenditures of $20,000 USD on the
Property in addition to the expenditures referred to
in clause (b)(i);
(ii) The Optionee paying $5,000 USD to the Optionor;
(d) On or before March 24th, 2009
(i) The Optionee incurring Expenditures of $40,000 USD on
the Property in addition to the expenditures referred
to in clauses (b)(i) and (c)(i) hereof; and
(ii) The Optionee paying $5,000 USD to the Optionor;
(e) On or before March 24th, 2010
(i) The Optionee incurring Expenditures of $50,000 USD on
the Property in addition to the expenditures referred
to in clauses (b)(i), (c)(i) and (d)(i) hereof; and
(ii) The Optionee paying $5,000 USD to the Optionor; and
Following which the Optionee shall be deemed to have exercised the Option (the
"Exercise Date") and shall be entitled to an undivided 100% right, title and
interest in and to the Permit covering the Property with the full right and
authority to equip the Property for production and operate the Property as a
mine.
The Optionor and Optionee understand and confirm that all Expenditures incurred
in a particular period, including any excess in the amount of Expenditures
required to be incurred to maintain the Option during such period, shall be
carried over and included in the aggregate amount of Expenditures for the
subsequent period.
Notwithstanding paragraphs (b)(i), (c)(i), (d)(i), and (e)(i) if the Optionee
has not incurred the requisite Expenditures to maintain its option in good
standing prior to March 24th of any given year, the Optionee may pay to the
Optionor within 60 days following the expiry of such period, the amount of the
deficiency and such amount shall thereupon be deemed to have been Expenditures
incurred by the Optionee during such period.
(f) The Optionee agrees to use the Optionor as the primary contractor for
all exploration activities undertaken on the Property providing that
the Optionor charges the Optionee commercially competitive rates;
(g) Company assumes future carrying costs (annual rental fees) of the
property estimated at $600 per year thereafter with the exception that
the first two years of rental fees with be paid in the first year. This
figure applies to the property at its current size. Any fees paid to
the government for recording assessment work shall not constitute
exploration expenditures.
(h) All figures are United States Funds.
(i) The doing of any act or the incurrence of any cash payments by the
Optionee shall not obligate the Optionee to do any further acts or make
any further payments
5. TRANSFER OF TITLE
Upon Optionee's completion of all requirements to earn a 100 percent
interest in the Permit covering the Property, the Optionor will deliver or cause
to be delivered to the Optionee's solicitors a duly executed transfer of
Property in favor of the Optionee (the "Optionee Transfer"). The Optionee shall
be entitled to record the Optionee transfer with the appropriate government
offices to effect transfer of legal title of the Permit covering the Property
into its own name upon the full and complete exercise of the Option by the
Optionee.
6. MINING OPERATIONS DURING OPTION
During the Option Period, the Optionor will provide his mineral
exploration expertise on the Property, on a consultation basis for and on behalf
of the Optionee at commercially competitive rates. However, the Optionee has the
exclusive right to determine what Expenditures and Mining Operations it will
perform and when they will be performed. The Optionor shall invoice for time for
consulting services and related travel expenses from time to time and the prompt
payment of such invoices when due shall constitute a portion of Expenditures by
the Optionee as contemplated under Section 4 hereof.
During the currency of this Agreement, the Optionee, its servants,
agents and workmen and any persons duly authorized by the Optionee, shall have
the right of access to and from and to enter upon and take possession of and
prospect, explore and develop the Property in such manner as the Optionee in its
sole discretion may deem advisable and shall have the right to remove and ship
therefrom ores, minerals, metals, or other products recovered in any manner
therefrom.
7. ASSIGNMENT
During the Option Term, both parties, subject to paragraph 8, shall
have the right to sell, transfer, assign, mortgage, pledge its interest in this
Agreement or its right or interest in the Property. It will be a condition of
any assignment under this Agreement that such assignee shall agree in writing to
be bound by the terms of this Agreement applicable to the assignor.
8. SALE OF PROPERTY OR CHANGE OF CONTROL
In the event that the Optionee assigns or sells the Permit covering the
Property, the Optionor shall receive a payment equaling 5% of the fair value of
the Permit covering the Property at the time of the sale of assignment. The
method of determining fair value is to be determined in a mutually agreed upon
manner. In the event that the Optionee is acquired by another entity in a
transaction, or series of transactions resulting in a change of control of the
Optionee, 5% of the proportionate fair value of the transaction, or series of
transactions, assignable to the Permit covering the Property shall be payable to
the Optionor.
9. TERMINATION
This Agreement shall forthwith terminate in circumstances where:
(a) The Optionee shall fail to comply with any of its obligations
hereunder,
subject to Force Majeure, and within 30 days of receipt by the
Optionee of written notice from the Optionor of such default,
the Optionee has not:
(i) cured such default, or commenced proceedings
to cure such default and prosecuted same to
completion without undue delay; or
(ii) given the Optionor notice that it denies
that such default has occurred.
In the event that the Optionee gives notice that it denies that a default has
occurred, the Opionee shall not be deemed to be in default until the matter
shall have been determined finally through such means of dispute resolution as
such matter has been subjected to by either party; or
(b) The Optionee gives notice of termination to the Optionor,
which it shall be at liberty to do at any timeafter the
execution of this Agreement. If and when the Optionee elects
to terminate this Agreement, or terminate one of the projects
comprising the Property, at such time the Property or the
specific project will be returned to the Optionor.
Upon the termination of this Agreement under this Section 9, the Optionee shall
cease to be liable to the Optionor in debt, damages, annual rental fees or
otherwise. Upon termination of this Agreement under this Section 9, the Optionee
shall vacate the Property within a reasonable time after such termination, but
shall have the right of access to the Property for a period of six months
thereafter for the purpose of removing its chattels, machinery, equipment and
fixtures. Upon termination of this Agreement, the Optionee shall ensure that
copies of all data, results and reports are provided to the Optionor.
10. REPRESENTATIONS, OPTIONIES, AND COVENANTS OF THE OPTIONOR
The Optionor represents, Options and covenants to and with the Optionee
as follows:
(a) The Optionor is an individual residing in the United States;
(b) The Optionor has full power and authority to carry on his
business and to enter into this Agreement and any agreement or
instrument referred to or contemplated by this Agreement;
(c) Neither the execution and delivery of this Agreement, nor any
of the agreements referred to herein or contemplated hereby,
nor the consummation of the transactions hereby contemplated
hereby, nor the consummation of the transactions hereby
contemplated conflict with, result in the breach of or
accelerate the performance required by, any agreement to which
it is a party;
(d) The execution and delivery of this Agreement and the
agreements contemplated hereby will not violate or result in
the breach of the laws of any jurisdiction applicable or
pertaining thereto or of its constating documents;
(e) The Agreement constitutes a legal, valid and binding
obligation of the Optionor;
(f) The Property is accurately described in Schedule "A", is in
good standing under the laws of the jurisdiction in which it
is located and is free and clear of all liens, charges and
encumbrances;
(g) The Optionor is the sole recorded and beneficial owner of the
Permit covering the Property and has the exclusive right to
enter into this Agreement and all necessary authority to
transfer its interest in the Property in accordance with the
terms of this Agreement;
(h) No Person, firm or corporation has any proprietary or
possessory interest
in the Property other than the Optionor, and no person, firm
or corporation is entitled to any royalty or other payment in
the nature of rent or royalty on any minerals, ores, metals or
concentrates or any other such products removed from the
Property other than the government of the state of Arizona
pursuant to statute; notwithstanding any Federal or State
royalties or net proceeds tax derived from mining operations.
(i) Upon request by the Optionee, and at the sole cost of the
Optionee, the Optionor shall deliver or cause to be delivered
to the Optionee copies of all available maps and other
documents and data in its possession respecting the Property.
Nothing will be withheld, hidden, or kept from the Optionee,
whether the data or information is held or not by the
Optionor; and
(j) Subject to performance by the Optionee of its obligations
under Section 4, during the Option Period, the Optionor will
keep the Property in good standing, free and clear of all
liens, charges and encumbrances, will carry out all Mining
Operations on the Property in a miner-like fashion if the
Optionee elects to use the mining expertise and consulting
services of the Optionor, will obtain all necessary licenses
and permits as shall be necessary and will file all applicable
work up to the legal limits as assessment work under the laws
of the state of Arizona.
11. REPRESENTATIONS, OPTIONIES AND COVENANTS OF THE OPTIONEE
The Optionee represents, Options and covenants to and with the Optionor that:
(a) The Optionee is a company duly organized validly existing and
in good standing under the laws of Canada;
(b) The Optionee has full power and authority to carry on its
business and to enter into this Agreement and any agreement or
instrument referred to or contemplated by this Agreement;
(c) Neither the execution and delivery of this Agreement, nor any
of the agreements referred to herein or contemplated hereby,
nor the consummation of the transactions hereby contemplated
conflict with, result in the breach of or accelerate the
performance required by, any agreement to which it is a party;
(d) The execution and delivery of this Agreement and the
agreements contemplated hereby will not violate or result in
the breach of the laws of any jurisdiction applicable or
pertaining thereto or of its constating documents; and
(e) This Agreement constitutes a legal, valid and binding
obligation of the Optionee.
12. INDEMNITY AND SURVIVAL OF REPRESENTATION
The representation and Optionies hereinbefore set out are conditions on
which the parties have relied in entering into this Agreement and shall survive
the acquisition of any interest in the Property by the Optionee and each of the
parties will indemnify and save the other harmless from all loss, damage, costs,
actions and suits arising out of or in connection with any breach of any
representation, Option, covenant, agreement or condition made by them and
contained in this Agreement.
The Optionor agrees to indemnify and save harmless the Optionee from
any liability to which it may be subject arising from any Mining Operations
carried out by the Optionor or at its direction on the Property. The Optionee
agrees to indemnify and save harmless the Optionor from any liability to which
it may be subject arising from any Mining Operations carried out by the Optionee
or at its direction on the Property.
The Optionor agrees to indemnify and save harmless the Optionee from
any liability arising form any and every kind of work done on or with respect to
the Property prior to the signing of this Agreement (the "Prior Operations").
Without limiting the generality of the foregoing, Prior Operations includes all
work capable of receiving assessment credits pursuant to the state of Arizona
and the work of assessment, geophysical, geochemical and geological surveys,
studies and mapping, investigating, drilling, designing, examining equipping,
improving, surveying, shaft sinking, raising, cross-cutting and drifting,
searching for, digging, trucking, sampling, working and procuring minerals, ores
and metals, in surveying and bringing any mineral claims to lease or patent, in
doing all other work usually considered to be prospecting, exploration,
development, a feasibility study, mining work, milling, concentration,
beneficiation of ores and concentrates, as well as the separation and extraction
of Mineral Products and all reclamation, restoration and permitting activities.
13. CONFIDENTIALITY
The parties hereto agree to hold in confidence all information obtained
in confidence in respect of the Property or otherwise in connection with this
Agreement other than in circumstances where a party has an obligation to
disclose such information in accordance with applicable securities legislation,
in which case such disclosure shall only be made after consultation with the
other party.
14. NOTICE
All notices, consents, demands and requests ( in this Section 13 called
the "Communication") required or permitted to be given under this Agreement
shall be in writing and may be delivered personally sent by telegram, by telex
or telecopier or other electronic means or may be forwarded by first class
prepaid registered mail to the parties at their addresses first above written.
Any Communication delivered personally or sent by telegram, telex or telecopier
or other electronic means including email shall be deemed to have been given and
received on the second business day next following the date of sending. Any
Communication mailed as aforesaid shall be deemed to have been given and
received on the fifth business day following the date it is posted, addressed to
the parties at their addresses first above written or to such other address or
addresses as either party may from time to time specify by notice to the other;
provided, however, that if there shall be a mail strike, slowdown or other
labour dispute which might effect delivery of the Communication by mail, then
the Communication shall be effective only if actually delivered. For purposes of
this agreement and as a definition of address the Optionor's email shall be
defined as ▇▇▇▇▇▇@▇▇▇.▇▇▇ and the Optionor's telecopier number is (623)
256-6727. The Optionee's email shall be defined as ▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇ and the
Optionee's telecopier number is ▇▇▇-▇▇▇-▇▇▇▇. Notice will be provided to each
party should their respective email address change.
15. FURTHER ASSURANCES
Each of the parties to this Agreement shall from time to time and at
all times do all such further acts and execute and deliver all further deeds and
documents as shall be reasonably required in order to fully perform and carry
out the terms of this Agreement
16. ENTIRE AGREEMENT
The parties hereto acknowledge that they have expressed herein the
entire understanding and obligation of this Agreement and it is expressly
understood and agreed that no implied covenant, condition, term or reservation,
shall be read into this Agreement relating to or concerning any matter or
operation provided for herein
17. PROPER LAW AND ARBITRATION
This Agreement will be governed by and construed in accordance with the laws of
the Azizona and the United States. The parties hereto hereby irrevocably attorn
to the jurisdiction of the Courts of Arizona. All disputes arising out of or in
connection with this Agreement, or in respect of any defined legal relationship
associated therewith or derived therefrom, shall be referred to and finally
resolved by a sole arbitrator by arbitration under the rules of Arizona.
18. ENUREMENT
This Agreement will ensure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
19. AFTER ACQUIRED PROPERTIES
(i) The parties covenant and agree, each with the other, that any
and all After Acquired Properties shall be subject to the
terms and conditions of this Agreement and shall be added to
and deemed, for the purposes hereof, to be included in the
Property. Any costs incurred by the Optionor in staking,
locating, recording or otherwise acquiring any "After Acquired
Properties" will be deemed to be Mining Operations for which
the Optionor will be entitled to reimbursements as part of the
Expenditures payable by the Optionee hereunder.
(ii) Any additional claims agreed by the Optionee to be staked by
the Optionor within 2 miles from the existing perimeter of the
Property boundaries shall form party of this Agreement. The
Optionee will reimburse the Optionor for the costs of staking
the additional claims, unless the Optionee does not elect to
have the additional claims subject to this Agreement.
20. DEFAULT
Notwithstanding anything in this Agreement to the contrary if any party
(a "Defaulting Party") is in default of any requirement herein set forth the
party affected by such default shall give written notice to the Defaulting Party
specifying the default and the Defaulting Party shall not lose any rights under
this Agreement, unless thirty (30) days after the giving of notice of default by
the affected party the Defaulting Party has failed to take reasonable steps to
cure the default by the appropriate performance and if the Defaulting Party
fails within such period to take reasonable steps to cure any such default, the
affected party shall be entitled to seek any remedy it may have on account of
such default including, without limiting, termination of this Agreement.
21. PAYMENT
All references to monies herein shall be in United States currency
unless otherwise specified. The Optionee shall make payments for the
Expenditures incurred by the Optionor no later than 15 days after the receipt of
invoices delivered by the Optionee to do any acts or make any payments
hereunder, and any act or payment or payments as shall be made hereunder shall
not be construed as obligating the Optionee to do any further act or make any
further payment or payments.
22. SUPERSEDES PREVIOUS AGREEMENTS
This Agreement supersedes and replaces all previous oral or written
agreements, memoranda, correspondence or other communications between the
parties hereto relating to the subject matter hereof.
IN WITNESS WHEREOF the Parties hereto have duly executed this Agreement
effective as of the 24th day of March, 2006
▇▇▇▇ ▇▇▇▇▇
Per:__/s/________________________
▇▇▇▇ ▇▇▇▇▇
American Goldrush Corp.
Per:___/s/________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
SCHEDULE "A"
Property Name: South Vulture
Permit Holder: ▇▇▇▇ ▇▇▇▇▇
Permit Number: 08-110130
Property Location: All of Section 2, T5N, R6W, except for the N1/2 of
the NW 1/4
Property Size: 559.99 acres
