Option Agreement

Option Agreement

by Canyon Gold Corp.
March 12th, 2012


This agreement dated May 15th 2011 by and between:



EMAC Handels AG (“EMAC”)
Churerstrasse 106, CH-8808 Pfaeffikon/Switzerland

and

LONG CANYON GOLD RESOURCES CORP. (“LCGRC”)
(formerly: FERGUSON HOLDINGS LTD.)
341 West 3rd St., #309, North Vancouver BC, Canada, V7M 1G3

also known as (“the parties”)



WHEREAS:


A)  
EMAC has acquired a 100% interest in approximately 6,250 acre of mineral lease properties or approximately 275 BLM mineral lease claims (collectively the “Asset”), all located in the west section of the new Long Canyon Gold Trend area of Nevada as given in Definitive Agreement between DRLLC and EMAC attached under Exhibit “A”; and

B)  
LCGRC presently owns and controls 100% interest in approximately 320 acres lease properties or approximately 15 BLM mineral lease claims, all located in the same west section of the new Long Canyon Gold Trend area of Nevada; and

C)  
LCGRC has sold 320 acres (15 claims) of the acquired mineral lease claims as given in B) above to CANYON GOLD CORP. (CGCC), (formerly: AUGUST ENERGY CORP.) trading its common stock on the OTC-PinkSheet Market

D)  
LCGRC desires to acquire the Asset from EMAC and EMAC desires to sell the Asset to LCGRC under an option agreement; and

E)  
“LCGRC” is presently negotiating the sale of 100% of its issued and outstanding shares to CGCC whereby LCGRC will become a wholly owned subsidiary of CGCC and whereby CGCC will be required to honor the terms and conditions of the Agreement between DRLLC and EMAC which is an integral part of this Option Agreement.




IT IS HEREBY AGREED THAT:


a)  
LCGRC shall pay following remunerations for the Asset to EMAC:

 
 

 

a total of $ 350,000 USD cash (the “Purchase Price”) payable as follows:

1.  
$ 280,000 USD for Sections 26, 27, 28, 29, 32, 33, 34 or
  $ 40,000.00 per section; and

2.  
$ 70,000 USD for Sections 20, 21, 22, 23

ii.  
in addition EMAC shall receive a total of Four Hundred Twenty Five Thousand (425,000) shares of the Preferred, convertible, voting stock “Series B” of CANYON GOLD CORP.,  to be issued as follows:

1.  
50,000 shares for each of the sections 26, 27, 28, 29, 32, 33, 34; and

2.  
75,000 shares for sections 20, 21, 22, 23; and

   provided that the sections in 1. above may be bought section by section,
   however the sections in 2. above must be bought in one lot.

iii.  
EMAC shall hold a 2% NSR (Net Smelter Royalty) on these claims at all times.


b)  
LCGRC may elect to exercise this option in its entirety at any time or LCGRC may elect to exercise this option section by section on or before May 31, 2012.

c)  
In the event of a transfer of all or part of the Asset, LCGRC will be responsible for the exploration and development and all its costs for that portion of the Asset that is so transferred to LCGRC and as given in the EMAC – DRLLC Agreement attached under Exhibit “A” and furthermore LCGRC shall honor all terms and conditions given in the Agreement between DRLLC and EMAC as attached under Exhibit “A”.

d)  
At any time LCGRC decides to exercise part or all of the optioned Assets, LCGRC shall pay EMAC in cash and stock for that portion that LCGRC decides to acquire under this option agreement.

e)  
In the event of a default of the obligations of LCGRC for all or part of the Asset due to a transfer to LCGRC the portion of the Asset being in default shall revert to the ownership of EMAC, provided however that LCGRC shall have 60 days to remedy any default.

f)  
For purposes of any and all legal disputes or arbitration in regards to any disputes the state of jurisdiction shall be Vancouver BC, Canada.

g)  
All rights and obligations of the parties hereto will be binding upon and enure to the benefit of and be enforceable by each of the parties hereto and their respective successors and permitted assigns.

h)  
This Agreement constitutes the entire agreement between the parties relating to the subject matter hereof and supersedes all prior agreements, understanding, negotiations and discussions, whether oral or written, among parties.

i)  
This Agreement may be validly executed by email or by facsimile and in counterpart.

 
 

 

The parties hereto agree that the Agreement and its terms and conditions are to be kept confidential and not publicly disclosed until such time as LCGRC may become a wholly owned subsidiary of CGCC.



IN WITNESS THEREOF each of the Parties have executed this Agreement effective the date first above written.



Signed,
corpir@otcsbrx.com                                                      
 
 EMAC Handels AG  LONG CANYON GOLD RESOURCES CORP.    
       
/s/ Reinhard Hiestand /s/ Harold Schneider    
Reinhard Hiestand, President   Harold Schneider, President    
 



























 
 

 

EXHIBIT  “A”


DEFINITE AGREEMENT
(DRLLC & EMAC)


This agreement dated March 25, 2011 shall replaced and supersede any prior Agreement by and between:


Development Resources LLC (DRLLC)
125 E. Main St. #307, American Fork, Utah 84003

and

EMAC Handels AG (“EMAC”)
Churerstrasse 106, CH-8808 Pfaeffikon/Switzerland

also known as (“the parties”)



WHEREAS:


DRLLC has located and controls a 100% interest in 275 mineral claims or approximately 6,250 acres of mineral lease properties (collectively the “Asset”) as follows:

1)  
approximately 4,480 acres of mineral lease properties comprised of approximately 210 BLM mineral lease claims in sections # 26, 27, 28, 32, 33, 34, and

2)  
approximately 1,770 acres of mineral lease properties comprised of approximately 65 BLM mineral lease claims in sections # 20, 21, 22, 23; and

furthermore as given under Exhibit “A” and  “B” attached,  with the section owned and controlled by LCGRC & CGCC in dark green (CGCC) and the sections owned and controlled by EMAC in light green (optioned EMAC).

All of above mineral leases are located in the west section of the new Long Canyon Gold Trend area of Nevada, for the purpose of exploration for gold and silver mineralization deposits. These properties are strategically located next to major exploration projects by other mining companies in this area called the ‘Long Canyon Gold Trend’ of east central Nevada; and the above given block of mineral leases are adjoining mineral lease # 26 which is owned and controlled jointly by Long Canyon Gold Resources Corp. (LCGRC) and Canyon Gold Corp. (CGCC) and all are located in:
Range 64E., Township 33N., Meridian MDB&M

All of the Properties are free and clear of any encumbrances.

 
 

 

EMAC desires to acquire the Asset from DRLLC and DRLLC desires to sell the Asset to EMAC in exchange for USD $298,725.00 cash, payable as follows:
 
 
 a)    on or before March 31, 2011     -          $25,000.00
 b)    on or before May 31, 2011     -          $60,000.00
 c)    on or before June 15, 2011     -          $50,000.00
 d)    on or before August 31, 2011     -          $50,000.00
 e)    on or before October 31, 2011     -          113,725.00
       
 
A)  
It is understood between the parties to this Agreement that LCGRC is presently negotiating an Agreement with CGCC (PubCo) whereby CGCC will acquire 100% of the issued and outstanding shares of LCGRC and whereby LCGRC shall become a wholly owned subsidiary of CGCC (PubCo).

B)  
EMAC herewith agrees that it will extend an option to LCGRC giving LCGRC the right to acquire the above given “Asset” pursuant to the terms and conditions given in this Agreement.

C)  
Thereof, based on B) above, in addition to the cash payment in A) above, EMAC shall with execution of the Option Agreement with LCGRC, request that CGCC shall issue to DRLLC a total of 600,000 Convertible Preferred Series “B” non-voting shares of the capital stock of CGCC (the ”Preferred Shares”), provided that these shares shall be issued at the direction of DRLLC.

D)  
It is understood that CGCC is presently preparing Form S1 for registration with the SEC and trading on the OTC-QB.

E)  
The Preferred Shares Series “B” are convertible to Common shares of CGCC on a One Preferred Share for Ten Common Shares (1:10) basis, provided however that they are convertible only after twelve (12) months from First Day of Trading on the OTC-QB unless otherwise agreed upon by both parties to this agreement in writing.


IT IS HEREBY AGREED THAT:

a)  
EMAC will pay to DRLLC a total of $298,725 USD cash (the “Purchase Price”) as per schedule given in paragraph A) above. DRLLC will use these funds to complete the ‘full staking’ and acquisition of the Asset in the name of DRLLC with a legal stamped certification number from the Elko, Nevada County Recorder’s office which provides legal ownership standing in the State of Nevada for a 90 day period from the date of such staking notice to the County on each mineral lease claim.

b)  
DRLLC agrees to sell, assign, transfer and convey by this agreement to EMAC or as instructed by EMAC, 100% interest in the Asset subject to DRLLC holding a 3% NSR (Net Smelter Royalty) on these claims at all times.

  c)  
DRLLC furthermore agrees to transfer the registered title to the Asset from DRLLC to  such entity as directed by EMAC, which transfer shall be done in a timely manner.

 
     Page 2 of 5


 
 

 
 
 

d)  
EMAC will be required to pay for the BLM/State of Nevada registration fees to properly hold and control the Asset by a payment of $189 per claim to the BLM and $70 per claim to the State as per schedule given in Exhibit “A” attached and as the required from the date the claims were staked and filed with the Elko County Recorder’s office to keep these claims in good standing with both agencies. If these payments are not made, interest in the property reverts back to the BLM. EMAC can pay these fees anytime to DRLLC.
 
 
e)  
DRLLC will make these filings and payments for Fees as given in d) upon payment by EMAC in a timely manner to BLM and the State to keep these claims in good standing for EMAC.

f)  
EMAC will at its best effort perform an exploration program on the Asset during 2011/2012.

g)  
DRLLC can provide exceptional geologists and team living in the area which can perform all of the exploration required professionally including providing a qualified 43-101 report and has a reputable standing assay account with Chemex ASL labs in Elko, Nevada.

h)  
EMAC shall, through the services of DRLLC, requisition an initial Geological Report to be completed as soon as possible after the execution of this agreement on the Asset EMAC shall pay to DRLLC the total costs being $ 22,500.00 which amount is part of the total payment given in A) above.

i)  
and DRLLC shall contract with an independent Professional Geologist to provide this Report.

j)  
All reports and data collected in the exploration shall be delivered on a timely basis to EMAC at the direction of EMAC.

k)  
In the event the Exploration Report defines acceptable potential drill targets on the Asset, then the parties shall mutually determine if additional capital should be spent on a second, more detailed exploration analysis to confirm these potential drill targets. The parties will also mutually determine the capital to be spent on a drill program to drill the first drill targets to determine the mineralization for gold and silver values on these properties. This drill program commitment could begin as early fall 2011/2012.

l)  
EMAC will be responsible for all of the cost required to keep the 275 mineral lease claims in good standing with all agencies as per schedule given in Exhibit “A” attached. These costs are estimated to be about $189 per claim and the State of Nevada fees of approximately $70 per claim, each due as per schedule given in Exhibit “A” attached.

m)  
The parties agree that EMAC together with CGCC shall be the controlling operator for all exploration work to be contracted for on the properties at all times.

n)  
It is further agreed that EMAC and CGCC will exclusively contract with DRLLC for all such exploration on the Asset at all times. DRLLC will supply to EMAC all data for such
exploration on a reasonable timetable for such reports and, provided however that DRLLC shall meet the Industry Standards as to work and costs estimates.

 
Page 3 of 5

 
 

 

 
DRLLC shall provide EMAC an expenditure budget on a timely basis for the expected costs to maintain these claims in good standing with all agencies and all costs relating to the exploration program on these claims to define potential mineralized zones as drill targets to define potential ore bodies.

o)  
EMAC’s interest in the Asset can be sold, assigned, transferred or conveyed in whole or in part to any third party providing the terms of this agreement are met. Each party must
be informed as to all of the details for such a transfer and agree in writing to such a transfer to any third party for the transfer of any interest in these properties.

p)  
In the event the property values from exploration work define a potential mineable ore body which will require a major ‘feasibility study’ including environmental studies, it shall be the responsibility of EMAC to pay for all of the costs of such studies to perfect this ‘feasibility study’ to define a mining plan.

q)  
 DRLLC shall have full access to all data and information supplied by such ‘feasibility study’ at all times.

r)  
In the event EMAC desires to sell its held interest in the Asset other than to sell and transfer such interest to a Public Trading Company, DRLLC shall have ‘first right of refusal’ to acquire this interest on terms and conditions agreeable between the parties prior to the interest being offered to third parties.

s)  
The parties agree to work together for the exploration and development of these mineral lease claims for the benefit of all parties.

t)  
The parties shall advise each other, in advance, of any public statement, which is proposed to be made in respect to any transaction, provided that no party shall be prevented from making any disclosure statement, which is required to be made by any regulatory policy. If upon the execution of this Agreement any party is required or wishes to issue a press release, each of the parties shall have the ability to review, comment and approve upon the content of such press release prior to issuance.

u)  
This Agreement shall terminate at 12:01 pm on the 14th (fourteenth) business day following any non payment by EMAC to DRLLC in the event the cash payments on the schedule listed in paragraph c) of this agreement are not met, and/or the delivery of the stock required is not delivered on a timely basis or any alternative payment acceptable to DRLLC has not been agreed to and paid to DRLLC by EMAC.

v)  
In the event that EMAC allows the payments to lapse, or DRLLC is given notice by EMAC, and EMAC determines to terminate this agreement, EMAC shall give DRLLC a 30 day written notice prior to the expected termination date for the benefit of DRLLC to
maintain the Asset. In any event of a termination, DRLLC shall keep the 1,100,000 shares issued from CGCC and all cash payments to the date of such termination, provided
however if the properties are considered not viable to be put into production, based on a
professional report, the above shares shall be cancelled and returned to treasury.

w)  
Each party shall bear its own legal costs and expenses with respect to this transaction.

 
Page 4 of 5

 
 

 

 
From the date hereof until the date of termination, the parties shall carry on their respective businesses in the ordinary course and will not, without the prior written consent of the each
other enter into any material contracts or obligations not in the ordinary course of business regards to these claims

x)  
For purposes of any and all legal disputes or arbitration in regards to any disputes the state of jurisdiction shall be Nevada.

y)  
All rights and obligations of the parties hereto will be binding upon and enure to the benefit of and be enforceable by each of the parties hereto and their respective successors and permitted assigns.

z)  
This Agreement constitutes the entire agreement between the parties relating to the subject matter hereof and supersedes all prior agreements, understanding, negotiations and discussions, whether oral or written, among parties.

aa)  
This Agreement may be validly executed by email or by facsimile and in counterpart.



IN WITNESS THEREOF each of the Parties have executed this Agreement effective the date first above written.

Signed,

corpir@otcsbrx.com
 
       
 Development Resources LLC   EMAC Handels AG    
 /s/ Lee Eastman   /s/ Reinhard Hiestand    
 Lee Eastman, Manager  Reinhard Hiestand, Pres.    
       
       
 
                                             














 
Page 5 of 5
 

 
 

 


Exhibit ‘A’
                 
Sections:  26, 27, 28,29, 32, 33, 34
(210 Claims)
 
               
Date
Detail
 
Sections/Claims
         
TOTAL
March 25, 2011
Acquisition of Claims
    7     $ 25,000.00     $ 175,000.00  
NV Reg. Fees:         BML
    210     $ 189.00     $ 39,690.00  
                                State
    210     $ 70.00     $ 14,700.00  
Prof. Geological Report
                  $ 20,000.00  
TOTAL
                    $ 249,390.00  
 
Partial Sections: 20, 21, 22, 23
(approx. 65 Claims)
 
                   
Date
Detail
 
Sections/Claims
           
EMAC/CH
Jun-11
Acquisition of Claims
 
4 partial
            $ 30,000.00  
NV Reg. Fees:        BML
    65     $ 189.00     $ 12,285.00  
                              State
    65     $ 70.00     $ 4,550.00  
Prof. Geological Report
                  $ 2,500.00  
TOTAL
                    $ 49,335.00  
             
COMBINED TOTAL
    $ 298,725.00  
                     
                     
                       
                       
                       
                       
                       
                       
                       
                       
                     
                       
                       
         
   





 
 

 








Exhibit ‘B’

/s/ Lee Eastman   /s/ Reinhard Hiestand    
 Lee Eastman, Manager  Reinhard Hiestand, Pres.