OPTION TO PURCHASE AGREEMENT
[GRAPHIC OMITTED][GRAPHIC OMITTED]
OPTION TO PURCHASE AGREEMENT
Between
GREAT BASIN GOLD LTD
And
SOUTHGOLD EXPLORATION (PROPRIETARY) LIMITED
And
AREQUIPA HOLDINGS (PROPRIETARY) LIMITED
EXPLORATION TARGETS (PROPRIETARY) LIMITED
▇▇▇▇ ▇▇▇▇▇▇ MINING (PROPRIETARY) LIMITED
PANGEA EXPLORATION (PROPRIETARY) LIMITED
RIETBULT EXPLORATION (PROPRIETARY) LIMITED
SOVEREIGN INDIVIDUAL PORTFOLIOS (PROPRIETARY) LIMITED
CONTENTS
1 INTERPRETATION 4
2 RECORDAL 11
3 CONDITIONS PRECEDENT 11
4 OPTION 13
5 CONSIDERATION 13
6 ADDITIONAL CONSIDERATION 16
7 PAYMENT 18
8 EXERCISE OF OPTIONS 18
9 FUNDING OF THE BURNSTONE GOLD PROJECT 19
10 INITIAL EXPLORATION PROGRAMME AND BANKABLE FEASIBILITY STUDY BUDGET 19
11 MANAGEMENT OF THE BURNSTONE GOLD PROJECT 20
12 WARRANTIES 21
13 INDEMNITIES 21
14 ACCOUNTS 23
15 SALE RESTRICTIONS ON THE SOUTHGOLD SHAREHOLDERS 24
16 VOTING OF GBG SHARES AND APPOINTMENT OF DIRECTORS 25
17 OBLIGATIONS OF THE SOUTHGOLD SHAREHOLDERS 26
18 PUMA 27
19 CONFIDENTIALITY 30
20 BREACH 31
21 CESSION AND ASSIGNMENT 31
22 DOMICILIUM AND NOTICES 32
23 APPLICABLE LAW 33
24 GENERAL 33
25 COSTS 34
26 COUNTERPARTS 35
SCHEDULES
SCHEDULE 1 EYESIZWE AGREEMENT
SCHEDULE 2 WARRANT AGREEMENT
SCHEDULE 3 LIST OF OPTIONS
SCHEDULE 4A LIST OF PROPERTIES
SCHEDULE 4B MAP OF PROPERTIES
SCHEDULE 5 GBG WARRANTIES
SCHEDULE 6A SOUTHGOLD WARRANTIES
SCHEDULE 6B SOUTHGOLD SHAREHOLDERS' WARRANTIES
SCHEDULE 7 INITIAL PROGRAMME AND BUDGET
SCHEDULE 8 MANAGEMENT AGREEMENT
SCHEDULE 9 THE PUMA OPTIONS
SCHEDULE 10 WARRANTIES OF THE PUMA SHAREHOLDERS
1. INTERPRETATION
In this agreement -
1.1 clause headings are for convenience purposes only and shall not be used in
its interpretation;
1.2 unless the context clearly indicates a contrary intention -
1.2.1 an expression which denotes any gender includes the other genders, a
natural person includes an artificial person and vice versa and the
singular includes the plural and vice versa;
1.2.2 where any term is defined within a particular clause, other than the
interpretation clause, that term shall bear the meaning ascribed to it
in that clause wherever it is used in this agreement;
1.2.3 the following expressions shall bear the following meanings and
related expressions shall bear corresponding meanings -
1.2.3.1 "Accounts" means the GBG Accounts and/or the Southgold January
2004 Accounts and/or the Southgold Audited Accounts, depending
upon the context;
1.2.3.2 "Arequipa" means Arequipa Holdings (Proprietary) Limited,
Registration Number 1997/022371/07, a company incorporated in the
RSA;
1.2.3.3 "Bankable Feasibility Study" means a study of the feasibility of
developing and operating one or more mines on the Properties,
including an analysis of economic, geological, engineering,
environmental, regulatory and other considerations, and
containing the level of detail and content consistent and in
accordance with internationally accepted standards in the mining
industry, and in particular, North American Regulatory Standards,
National Policy 43-101, for a feasibility study presented to
financial institutions for the purpose of seeking and obtaining
financing for the development of a mine (with all estimates
developed to an accuracy of plus or minus 10%);
1.2.3.4 "Burnstone Gold Project" means the project undertaken by
Southgold in terms of which, inter alia, Southgold has prospected
and conducted exploration activities and if warranted, will
conduct additional exploration, including drilling, and
engineering and feasibility studies to determine the economic and
technical feasibility of mining and extracting gold and
associated minerals from the Properties;
1.2.3.5 "Closing Date" means the date upon which the last of the
Conditions are fulfilled;
1.2.3.6 "Conditions" means the conditions precedent referred to in 3;
1.2.3.7 "Development Commitment Date" means the date of commencement of
the Burnstone Gold Project in accordance with the scope and
timing contemplated therefor in the Bankable Feasibility Study,
as evidenced, inter alia, by the earlier of:
1.2.3.7.1 the placing of irrevocable orders for equipment or services;
and
1.2.3.7.2 the first draw down of loan or equity finance;
all as contemplated in the Bankable Feasibility Study;
1.2.3.8 "Exploration Targets" means Exploration Targets (Proprietary)
Limited, Registration Number 1984/005367/07, a company
incorporated in the RSA;
1.2.3.9 "Eyesizwe" means ▇▇▇▇▇▇▇ Investments (Proprietary) Limited,
Registration Number 2001/028420/07, a company incorporated in the
RSA, to be renamed "Eyesizwe Gold (Proprietary) Limited" or such
other name as the RSA Registrar of Companies may permit, which
will act as Southgold's Black Economic Empowerment Partner and
which will acquire a 20% participation right in the Burnstone
Gold Project and may increase its participation in certain
circumstances substantially on the terms and conditions of the
draft agreement annexed hereto as Schedule 1 (and failing
Eyesizwe, any other qualifying Black Economic Empowerment Partner
for Southgold agreed upon by GBG, the Southgold Shareholders and
Southgold);
1.2.3.10 "GBG" means Great Basin Gold Ltd, a public company incorporated
under the Company Act in British Columbia, listed on the Canadian
TSX Venture Exchange and quoted on the OTC Bulletin Board in the
United States of America;
1.2.3.11 "GBG Accounts" means the audited financial statements of GBG for
the year which ended on 31 December 2002 to be provided by GBG to
Southgold and the Southgold Shareholders immediately they become
available;
1.2.3.12 "GBG Share Purchase Warrants" means warrants issued by GBG to the
Southgold Shareholders in terms of 5.3.3 and 5.4.2 giving the
Southgold Shareholders the right to subscribe for common shares
in GBG on terms and conditions set out in the Warrant Agreement
annexed hereto as Schedule 2, subject inter alia to the
following:
1.2.3.12.1 the warrants shall confer on the Southgold Shareholders the
right to subscribe for the number of GBG shares referred to
therein at the lowest possible exercise price attainable by
GBG, but the maximum exercise price of the warrants will not
exceed:
1.2.3.12.1.1 the closing price at which GBG common shares trade on
the TSX Venture Exchange on the day before the date on
which GBG makes an announcement in respect of the
transaction contemplated in this agreement, if the
announcement is made during the time when the TSX
Venture Exchange is open for trade; or
1.2.3.12.1.2 the closing price at which GBG common shares trade on
the TSX Venture Exchange on the day on which the
announcement is made, if the announcement is made after
trading hours, as the case may be;
which announcement shall be made on a date determined
by GBG in consultation with the TSX Venture Exchange
not later than seven days after the Signature Date;
1.2.3.12.2 the warrants shall be exercised within 12 months of the date
on which they are issued, provided that if:
1.2.3.12.2.1 at any time following the expiry of the four-month hold
or selling restriction period prescribed by the TSX
Venture Exchange, the 20-day weighted average per share
published closing trade price of GBG common shares on
the TSX Venture Exchange is greater than or equal to
200% of the exercise price of the warrants ("the market
price threshold"), GBG will give the Southgold
Shareholders notice that the warrants will expire 45
days following the date of such notice if not
exercised, during which period the Southgold
Shareholders shall be entitled to exercise the
warrants; or
1.2.3.12.2.2 on the date the warrants are issued to the Southgold
Shareholders the market price for GBG common shares
exceeds the market price threshold, the Southgold
Shareholders shall be entitled to exercise the warrants
within 45 days of the date of issue of the warrants;
1.2.3.12.3 the warrants shall be drawn in favour of the Southgold
Shareholders in the Southgold Shareholders' Proportions;
1.2.3.13 "GFL" means GFL Mining Services Limited, Registration Number
1997/019961/06, a company incorporated in the RSA;
1.2.3.14 "GFL-Randex Mineral Rights" means the mineral rights owned by GFL
(in respect of which Randex has a participation right of 25%) in
respect of which GFL and Randex have granted Southgold an
irrevocable option in terms of the Prospecting Agreement;
1.2.3.15 "Ivanhoe Project" means the project undertaken by GBG in terms of
which, inter alia, GBG intends to prospect for and if warranted,
mine and extract gold in the North Western Extension of the
Carlin Trend in the Ivanhoe Mining District of Elko County,
Nevada, USA;
1.2.3.16 "▇▇▇▇ ▇▇▇▇▇▇" means ▇▇▇▇ ▇▇▇▇▇▇ Mining (Proprietary) Limited,
Registration Number 1970/003038/07, a company incorporated in the
RSA;
1.2.3.17 "Options" means the agreements listed in Schedule 3 and the
Prospecting Agreement;
1.2.3.18 "Pangea" means Pangea Exploration (Proprietary) Limited,
Registration Number 1985/001496/07, a company incorporated in the
RSA;
1.2.3.19 "Prime Rate" means the prime bank overdraft rate calculated daily
and compounded monthly in arrears as charged by FNB Limited (a
registered RSA commercial bank), on overdraft to its first class
corporate customers in the private sector in the RSA from time to
time as certified by a manager of that bank whose authority shall
not be necessary to prove;
1.2.3.20 "Properties" means the immovable properties upon which the
mineral rights to which the Options relate are situated, such
properties being listed in Schedule 4A hereto and which are
described on the map annexed hereto as Schedule 4B;
1.2.3.21 "Prospecting Agreement" means the agreement entered into between
GFL, Randex and Southgold on 17 October 2000, whereby, inter
alia, GFL and Randex granted Southgold the right to acquire the
GFL-Randex Mineral Rights;
1.2.3.22 "Randex" means Randex Limited, Registration Number 1905/06778/06,
a company incorporated in the RSA;
1.2.3.23 "Rietbult Exploration" means Rietbult Exploration (Proprietary)
Limited, Registration Number 1998/014685/07, a company
incorporated in the RSA;
1.2.3.24 "RSA" means the Republic of South Africa;
1.2.3.25 "$" means US dollars, the currency of the United States of
America;
1.2.3.26 "Shares" means ordinary par value shares of ZAR1,00 each in the
share capital of Southgold;
1.2.3.27 "Signature Date" means the date upon which the party who signs
this agreement last signs the agreement;
1.2.3.28 "Southgold" means Southgold Exploration (Proprietary) Limited,
Registration Number 2000/016129/07, private company incorporated
in the RSA;
1.2.3.29 "Southgold Audited Accounts" means the audited accounts of
Southgold for the financial year ended 28 February 2003 to be
provided by Southgold to GBG immediately they become available;
1.2.3.30 "Southgold January 2004 Accounts" means the unaudited financial
statements of Southgold for the period commencing on 1 March 2003
and terminating on 31 January 2004 to be provided by Southgold to
GBG immediately they become available, provided that should there
be a delay in the registration of transfer of the GFL-Randex
Mineral Rights as contemplated in 4.2, the date of such accounts
shall be the month end first following the date upon which such
registration of transfer takes place;
1.2.3.31 "Southgold Shareholders" means Arequipa, Exploration Targets,
▇▇▇▇ ▇▇▇▇▇▇, Pangea, Rietbult Exploration and Sovereign
Portfolios and each of their successors-in-title;
1.2.3.32 "Southgold Shareholders' Proportions" means:
1.2.3.32.1 Arequipa, 19,1%;
1.2.3.32.2 Exploration Targets, 19,1%;
1.2.3.32.3 ▇▇▇▇ ▇▇▇▇▇▇, 10,6%;
1.2.3.32.4 Pangea, 39,4%;
1.2.3.32.5 Rietbult Exploration, 7,6%; and
1.2.3.32.6 Sovereign Portfolios, 4,2%;
1.2.3.33 "Sovereign Portfolios" means Sovereign Individual Portfolios
(Proprietary) Limited, Registration Number 1999/000464/07, a
company incorporated in the RSA; 1.2.3.34 "ZAR" means RSA Rands,
the currency of the RSA;
1.3 the terms "holding company" and "subsidiary" shall bear the meaning
assigned to them in the RSA Companies Act, 61 of 1973, as amended;
1.4 should any provision in a definition be a substantive provision conferring
rights or imposing obligations on any party, then effect shall be given to
that provision as if it were a substantive provision in the body of this
agreement;
1.5 any reference to an enactment, regulation, rule or by-law is to that
enactment, regulation, rule or by-law as at the signature date, and as
amended or replaced from time to time;
1.6 when any number of days is prescribed, such number shall exclude the first
and include the last day, unless the last day falls on a Saturday, Sunday
or public holiday in the RSA and/or Canada, in which case the last day
shall be the next succeeding day which is not a Saturday, Sunday or public
holiday in the RSA and/or Canada;
1.7 any schedule or annexure to this agreement shall form part of this
agreement;
1.8 the use of the word "including" followed by a specific example/s shall not
be construed as limiting the meaning of the general wording preceding it
and the eiusdem generis rule shall not be applied in the interpretation of
such general wording or such specific example/s;
1.9 the expiration or termination of this agreement shall not affect those
provisions of this agreement which expressly provide that they will
operate after any such expiration or termination or which of necessity
must continue to have effect after such expiration or termination,
notwithstanding the fact that the clauses themselves do not expressly
provide this;
1.10 in its interpretation, the contra proferentem rule of construction shall
not apply (this agreement being the product of negotiations between the
parties) nor shall this agreement be construed in favour of or against any
party by reason of the extent to which any party or its professional
advisors participated in the preparation of this agreement;
1.11 recordals shall be binding on the parties and are not merely for
information purposes; and
1.12 where in this agreement any payment to be made is expressed in $ the
payment shall be made in an equivalent amount as at the due date for
payment in ZAR, converted at the average of the buy and sell rates quoted
for equivalent amounts by the Sandton Branch of the Standard Bank of South
Africa Limited.
2. RECORDAL
2.1 Southgold is the holder of the Options.
2.2 Southgold is exploring the Properties and evaluating the economic
feasibility of the Burnstone Gold Project.
2.3 This agreement sets out the terms and conditions upon which the Southgold
Shareholders have granted to GBG the right to acquire from them their
Shares in Southgold in two tranches, upon the exercise of which right GBG
will become the owner of the entire issued share capital of Southgold and
will result in the capital necessary to explore the Properties, evaluate
the economic and technical feasibility of the Burnstone Gold Project and
if warranted, develop the Burnstone Gold Project, becoming available.
3. CONDITIONS PRECEDENT
3.1 The payments referred to in 5.1 and all other provisions of this agreement
(except the exercise of the rights referred to in 4 and those provisions
which take effect on or after the exercise of the rights referred to in 4)
are subject to fulfilment of the following Conditions:
3.1.1 the board of directors of Southgold authorise Southgold to enter into
this agreement by not later than 7 November 2002; and
3.1.2 the board of directors of GBG authorise GBG to enter into this
agreement by not later than 7 November 2002; and
3.1.3 a legal opinion being obtained by Southgold from ▇▇▇▇▇▇ ▇▇▇▇▇, at
Southgold's expense, that this agreement and the transactions
contemplated herein are in compliance with the laws of the RSA and in
compliance with the terms and conditions of the Options and that
Southgold is the owner of the Options by not later than 7 November
2002.
3.2 The exercise of the rights referred to in referred to in 4 and those
provisions of the agreement which take effect on or after the exercise of
the rights referred to in 4 are subject to fulfilment of the following
Conditions:
3.2.1 independent legal opinion being obtained by GBG, at GBG's expense,
that this agreement and the transactions contemplated herein are in
compliance with the laws of Canada by not later than 7 November 2002;
and
3.2.2 the TSX Venture Exchange and the Exchange Control Department of the
South African Reserve Bank approve the transaction contemplated in
this agreement by not later than 28 February 2003.
3.3 The Condition/s in:
3.3.1 3.1.1 has been expressed for the benefit of Southgold;
3.3.2 3.2.1 has been expressed for the benefit of the Southgold Shareholders
and Southgold;
3.3.3 3.1.2 and 3.1.3 have been expressed for the benefit of GBG;
3.3.4 3.2.2 has been expressed for the benefit of all the parties.
3.4 The party or parties in whose favour a Condition has been expressed may
prior to the date for fulfilment of the Condition by written notice to the
other parties waive the Condition or by written agreement with the other
parties, extend the date for fulfilment thereof.
3.5 Each of the parties shall use their best efforts to procure the fulfilment
of the Conditions.
3.6 If this agreement (or any provisions thereof) becomes ineffective because
of a failure of the Conditions (save in respect of the consequences of
those provisions of this agreement that come into force notwithstanding
such failure) the parties shall be restored as far as possible to the
position they would have been in had this agreement not been entered into.
3.7 No party shall have any claim against any other party as a result of the
failure of the Conditions, except for damages, if any, resulting from a
breach of 3.5.
4. OPTION
Subject to fulfilment or waiver of the Conditions, with effect from the
Signature Date the Southgold Shareholders hereby irrevocably grant to GBG
the right to acquire from them in the Southgold Shareholders' Proportions
the entire issued share capital of Southgold, being 2 310 Shares, in two
tranches:
4.1 1 132 Shares, constituting 49 % of Southgold's entire issued share
capital, to be acquired by not later than 30 April 2003, failing which the
right shall lapse and be of no further force or effect; and
4.2 1 178 Shares, constituting 51 % of Southgold's entire issued share
capital, to be acquired on or after the later of 31 October 2003 or 15
days after registration of transfer of the GFL-Randex Mineral Rights from
GFL to Southgold but (subject to 5.5) not later than 31 January 2004,
failing which the right shall lapse and be of no further force or effect
provided, however, that the date of 31 January 2004 shall be extended only
if registration has not been effected by 31 January 2004, until such
transfer is effected;
the right in 4.2 only being exercisable if GBG has exercised the right
referred to in 4.1.
5. CONSIDERATION
5.1 Subject to fulfilment or waiver of the Conditions referred to in 3.1.1,
3.1.2 and 3.1.3, within seven days after the Signature Date, GBG shall:
5.1.1 lend and advance to Southgold the sum of ZAR 6 999 090,00, which sum
shall be appropriated by Southgold to repay the loan account of
Pangea. The loan shall be unsecured, shall not bear interest and shall
not be repayable before GBG has exercised the right referred to in
4.2;
5.1.2 deposit with attorneys ▇▇▇▇ ▇▇▇▇▇ Inc the difference between $1 250
000,00 and the equivalent in $ of ZAR6 999 090,00, converted into ZAR
at the $/ZAR exchange rate prevailing on the date seven days after the
Signature Date, being a non-refundable deposit payable by GBG in
consideration for the grant of the rights referred to in 4, which
deposit shall be transferred by ▇▇▇▇ ▇▇▇▇▇ Inc to an interest-bearing
account, the interest earned being for the benefit of the Southgold
Shareholders in the Southgold Shareholders' Proportions, and which
deposit shall thereafter be dealt with as directed by the Southgold
Shareholders.
5.2 If the Conditions are fulfilled and GBG exercises the right referred to in
4.1, $1 000 000,00 of the sum referred to in 5.1.2 shall be regarded as an
advance on that portion of the cash payment referred to in 5.3.1.
5.3 If GBG exercises the right referred to in 4.1, within seven days after the
date upon which the right is exercised, GBG shall:
5.3.1 pay the Southgold Shareholders $3 000 000,00 less the $1 000 000,00
referred to in 5.2; and
5.3.2 issue to the Southgold Shareholders in the Southgold Shareholders'
Proportions 10 000 000 common shares in GBG, credited as fully paid
up; and
5.3.3 issue to the Southgold Shareholders in the Southgold Shareholders'
Proportions 5 000 000 GBG Share Purchase Warrants.
5.4 If GBG exercises the right referred to in 4.2, within seven days after the
date upon which the right is exercised, GBG shall issue to the Southgold
Shareholders in the Southgold Shareholders' Proportions:
5.4.1 11 000 000 common shares in GBG, credited as fully paid up; and
5.4.2 5 500 000 GBG Share Purchase Warrants.
5.5 If the Bankable Feasibility Study will not be completed by 31 January
2004, at any time prior to 31 January 2004, by written notice to the
Southgold Shareholders, GBG may elect to extend the deadline for the
exercise of the right referred to in 4.2 until 31 July 2004. In such
event, by not later than 31 January 2004, GBG shall issue to the Southgold
Shareholders in the Southgold Shareholders' Proportions:
5.5.1 5 500 000 common shares in GBG, credited as fully paid up; and
5.5.2 2 750 000 GBG Share Purchase Warrants;
to be credited as an advance in respect of the issue of the GBG common
shares and GBG Share Purchase Warrants referred to in 5.4, and the
balance of the GBG common shares and GBG Warrants referred to in 5.4
shall be issued on 31 July 2004.
5.6 If GBG does not pay the consideration referred to in 5.3 and/or 5.4 in
whole or in part:
5.6.1 GBG shall have no further obligations beyond those set forth in 5.1
and 10 to fund the Burnstone Gold Project on shareholders' loan
account or on any other basis and GBG shall be indemnified by
Southgold against any liabilities incurred by Southgold in respect of
the Burnstone Gold Project up to 31 January 2004, providing that GBG
shall not bind the credit of Southgold or contract on Southgold's
behalf without its prior written consent, and providing further that
Southgold shall not be liable for any claims arising from the
negligent or intentional acts of GBG, its employees, agents and
contractors; and
5.6.2 the Southgold Shareholders shall be entitled to retain all the
consideration they have then received from GBG and to purchase from
GBG all the Shares held by GBG in Southgold. The purchase price of the
Shares shall be $1 000,00 in the aggregate, to be pro rated between
the Shares referred to in 4.1 and 4.2. Against payment thereof, GBG
shall forthwith transfer the Shares to the Southgold Shareholders in
the Southgold Shareholders' Proportions. Furthermore, if GBG has
advanced the amount referred to in 5.1.1 to Southgold to finance
repayment of the Pangea loan account or has advanced loans to
Southgold to fund the initial exploration programme referred to in
clause 10, the Burnstone Gold Project and related expenditures,
Southgold shall not be obliged to repay such loans, which shall be
forfeited by GBG. In such circumstances, GBG shall have no further
interest, direct or indirect, in Southgold or in the Burnstone Gold
Project and all the right, title and interest in the Burnstone Gold
Project shall revert toSouthgold. If any such right, title and
interest shall have vested in GBG or any transferee of GBG, GBG shall
forthwith upon demand and at GBG's sole cost and for no consideration,
execute all documents and do all things reasonably necessary to
transfer such rights to Southgold.
5.7 GBG shall pay to the Southgold Shareholders as additional consideration
for the acquisition of the Shares referred to in 4.2, an amount equivalent
to the net cash in Southgold as at 31 January 2004 as reflected in the
Southgold January 2004 Accounts. For purposes of this clause, "net cash"
means the sum of the increase in deferred exploration from ZAR5 999 001,00
to the balance as at 31 January 2004 plus Southgold's ▇▇▇▇▇ cash holdings,
cash deposited by Southgold with third parties as security, cash held by
Southgold in its bank accounts, cash generated from sundry receivables
and/or any Value-Added Tax refunds owing by the South African Revenue
Services, less amounts required to pay Southgold's creditors, less the
increase in Shareholder Loan Accounts from ZAR6 999 090,00 to the balance
as at 31 January 2004, all as reflected in the Southgold January 2004
Accounts, or as may arise in a subsequent period but which is attributable
to the period ending on 31 January 2004.
5.8 Payment of the amount referred to in 5.7 shall be made within 60 days of
delivery of the Southgold January 2004 Accounts to GBG.
5.9 If any dispute arises between the parties regarding the amount payable in
terms of 5.7, the dispute may be referred by any party to the dispute to
Southgold's auditors, acting as experts, not as arbitrators, who shall
determine the dispute on an expedited and informal basis and whose
determination shall be final and binding on the parties in the absence of
manifest error.
6. ADDITIONAL CONSIDERATION
6.1 If GBG exercises the rights acquired by it from the Southgold Shareholders
in terms of 4, the following additional consideration shall be payable for
such rights:
6.1.1 GBG will pay the Southgold Shareholders in cash the consideration paid
by Eyesizwe to Southgold after the Signature Date for the right to
participate in the Burnstone Gold Project (but excluding any
contributions paid by Eyesizwe towards the costs of the Burnstone Gold
Project after the Development Commitment Date). The consideration to
be paid by Eyesizwe on completion of the Bankable Feasibility Study
will be not less than ZAR15 000 000,00 or 20% of the net present value
of the Burnstone Gold Project determined by applying a discount rate
of 9%, the resulting net present value being discounted by 80%, up to
a maximum of ZAR22 500 000,00. GBG shall pay to the Southgold
Shareholders the amount received from Eyesizwe within seven days after
receipt by Southgold of Eyesizwe's payment;
6.1.2 if the Bankable Feasibility Study is completed at a cost of less than
$ 7 500 000,00 (including the expenditure of not less than $1 500
000,00 in respect of further exploration of the Burnstone Gold Project
contemplated in 10.1), within 14 days of completion of the Bankable
Feasibility Study GBG shall issue to the Southgold Shareholders in the
Southgold Shareholders' Proportions such number of GBG shares at a
notional issue price of $1,00 per GBG share credited as fully paid up
for no consideration to the Southgold Shareholders as is equal to the
difference between $ 7 500 000,00 and the actual cost of completion of
the Bankable Feasibility Study; and
6.1.3 if the Bankable Feasibility Study determines that:
6.1.3.1 the Burnstone Gold Project has total proven, probable and/or
indicated cumulative reserves of gold adjusted for mining and
geological dilution factors in situ of more than 3 500 000
ounces, for every 500 000 ounces of reserves or part thereof
determined by the Bankable Feasibility Study in excess of 3 500
000 ounces, GBG shall issue to the Southgold Shareholders in the
Southgold Shareholders' Proportions 500 000 GBG common shares to
a maximum of 1 500 000 GBG common shares or a pro rata portion
thereof, credited as fully paid up for no consideration to the
Southgold Shareholders ; and
6.1.3.2 as at the date of the Bankable Feasibility Study, the full mine
and mill operating costs per ounce of gold production of the
Burnstone Gold Project are $150,00 or less, GBG shall issue to
the Southgold Shareholders in the Southgold Shareholders'
Proportions 500 000 GBG common shares, credited as fully paid up.
6.2 If GBG does not pay the consideration contemplated in 5.3 and/or 5.4 in
whole or in part and/or has not paid any of the amounts of additional
consideration contemplated in this 6 or provided Southgold with any of the
funding contemplated in this agreement for purposes of development of the
Burnstone Gold Project, GBG shall have no further obligation to do so. If,
however, at such time GBG has paid any amounts in respect of the
additional consideration contemplated in this 6 or provided any such
funding, the Southgold Shareholders and Southgold shall be entitled to
retain such amounts, which shall not be repayable to GBG.
7. PAYMENT
7.1 All monetary loans or payments referred to in 5 and 6 shall be made in
cash, free of commission, exchange, deduction or set off, by electronic
transfer to the bank account nominated by the relevant payee.
7.2 The Southgold Shareholders hereby nominate attorneys ▇▇▇▇ ▇▇▇▇▇ Inc to
receive payment or delivery, as the case may be, on their behalf of all
cash payments and all securities referred to in 5 (other than the payment
referred to in 5.1.1) and 6. Payment to ▇▇▇▇ ▇▇▇▇▇ Inc on behalf of the
Southgold Shareholders shall be a full and proper discharge of GBG's
obligations to pay the said amount to the Southgold Shareholders.
7.3 Interest shall accrue on any amount required to be paid in terms of this
agreement but not paid when due calculated at the Prime Rate from the due
date until the date upon which payment is made, both dates inclusive.
8. EXERCISE OF OPTIONS
8.1 Forthwith after the Signature Date the Southgold Shareholders shall sign
transfer forms in respect of their Shares, transferring the Shares to GBG,
but shall leave the dates blank, and shall deliver the transfer forms and
the certificates in respect of their Shares to attorneys ▇▇▇▇ ▇▇▇▇▇ Inc,
to be held until GBG exercises the rights referred to in 4, whereupon the
said transfer forms and share certificates shall be delivered to GBG
against issue and delivery of the relevant GBG shares and GBG Warrants to
▇▇▇▇ ▇▇▇▇▇ Inc.
8.2 The rights referred to in 4 shall be exercised by written notice to the
Southgold Shareholders and upon receipt thereof, against payment of the
consideration in accordance with 5, the Southgold Shareholders shall
deliver to GBG:
8.2.1 the share certificates in respect of which GBG has exercised the
rights referred to in 4.1 or 4.2, as the case may be;
8.2.2 duly completed and signed transfer forms in respect of which GBG has
exercised the rights referred to in 4.1 or 4.2, as the case may be,
transferring the Shares to GBG;
8.2.3 a certified copy of a resolution of Southgold's board of directors,
approving the transfer of the Southgold Shareholders' Shares to GBG;
8.2.4 after the exercise of the right referred to in 4.2, if so requested in
writing by GBG, written resignations of the directors, the public
officer, secretary and auditors of Southgold and a certified copy of a
resolution of Southgold's board of directors, approving the
appointment of the directors, the public officer, secretary and
auditors appointed by GBG.
8.3 GBG shall pay the stamp duty payable on the transfer of the Shares from
the Southgold Shareholders.
9. FUNDING OF THE BURNSTONE GOLD PROJECT
9.1 The Southgold Shareholders have funded the pre-feasibility stage of the
Burnstone Gold Project.
9.2 GBG shall not be entitled to exercise the rights referred to in 4.2 unless
it has funded the Bankable Feasibility Study on loan account or provided
documentary evidence to the reasonable satisfaction of the Southgold
Shareholders of the provision and availability of funds for the payment of
those of the costs which have not yet been paid related to the Bankable
Feasibility Study, the aggregate costs thereof being estimated at $ 7 500
000,00.
9.3 If Eyesizwe does not succeed in delivering the GFL-Randex Mineral Rights
to Southgold, GBG shall not be entitled to exercise the rights referred to
in 4.2 (to the extent that they have not been exercised at that time)
unless it will fund the cost of exercising the Option in respect of the
GFL-Randex Mineral Rights in terms of the Prospecting Agreement or
otherwise by whatsoever means acquire the GFL-Randex Mineral Rights.
10. INITIAL EXPLORATION PROGRAMME AND BANKABLE FEASIBILITY STUDY BUDGET
10.1 During the period from the Signature Date to 30 April 2003, GBG on loan
account shall fund not less than $1 500 000,00 in respect of further
exploration of the Burnstone Gold Project, including drilling, in
accordance with an agreed programme of work to be formulated by Southgold
and GBG as set out in Schedule 7.
10.2 GBG and Southgold shall keep each other informed regarding such further
exploration activities and shall provide each other with reasonable access
to all records and information in regard thereto and shall permit each
other to make copies thereof.
10.3 Should GBG not exercise the rights referred to in 4, GBG shall on demand
deliver to Southgold all information, records, samples and copies of all
processed information in its possession or in the possession of its agents
in respect of the further exploration activities referred to in 10.1.
Furthermore, in such circumstances, GBG shall not be entitled to recover
from Southgold any payment or compensation in respect of such exploration
activities, but shall forfeit any such claims against Southgold once and
for all, subject to the indemnity set forth in 5.6.1.
10.4 If pursuant to the Burnstone Gold Project Southgold is required to pay any
costs or incur expenditure not contemplated in 9 and this 10, GBG will
advance loans to Southgold to enable Southgold to pay such costs subject
to prior approval by the Management Committee as set forth in Schedule 8.
10.5 Any such loans shall be unsecured, shall not bear interest and shall not
be repayable before GBG has exercised the right referred to in 4.2.
10.6 By no later than 31 October 2003 (or such later date as may be determined
by the Management Committee) Southgold and GBG shall submit to the
Management Committee a proposed Programme and Budget (as contemplated in
3.6 of Schedule 8) to complete the Bankable Feasibility Study.
11. MANAGEMENT OF THE BURNSTONE GOLD PROJECT
The Burnstone Gold Project will be managed from the Signature Date until
31 January 2004 or later as contemplated in 4.2 by agreement between GBG,
Southgold and Eyesizwe, as parties to the Management Agreement, such
Management Agreement to be on the terms set forth in Schedule 8. It is
recorded that to the extent that any Activities (defined as such in
Schedule 8) are required to be carried out, or are carried out at the
discretion of GBG, in the course of the Burnstone Gold Project, these
Activities will both until and after the date specified in 4.1 be carried
out by GBG for Southgold, as Southgold's agent.
12. WARRANTIES
12.1 The warranties, representations and undertakings referred to in:
12.1.1 Schedule 5 hereto are made and given by GBG in favour of the Southgold
Shareholders; and
12.1.2 Schedule 6A hereto are made and given by Southgold in favour of GBG;
and
12.1.3 Schedule 6B hereto are made and given by the Southgold Shareholders in
favour of GBG.
12.2 The warranties are given on the following basis:
12.2.1 each warranty shall prima facie be deemed to be a representation of
fact;
12.2.2 each warranty shall be presumed to be material unless the contrary is
proved; and
12.2.3 each warranty shall be a separate warranty and in no way limited or
restricted by reference to or inference from the terms of any other
warranty.
12.3 Save when expressly stated to the contrary, the warranties are valid as at
the Signature Date, the Closing Date, the date upon which GBG exercises
the rights acquired by it from the Southgold Shareholders in terms of 8
and the periods between those dates.
13. INDEMNITIES
13.1 Without prejudice to any of the rights of the Southgold Shareholders
arising from any of the other provisions of this agreement, GBG
indemnifies the Southgold Shareholders and holds it harmless against all
loss, liability, damage or expense which the Southgold Shareholders may
suffer as a result of or which may be attributable to any breach by GBG of
any of the warranties and provisions of 12. Notwithstanding anything else
contained in this agreement or elsewhere, GBG shall not in any
circumstances be liable for any consequential loss or consequential damage
suffered by the Southgold Shareholders.
13.2 the Southgold Shareholders shall be deemed to have suffered a loss equal
to the amount of any liabilities or claims against which it is indemnified
in terms of 13.1.
13.3 If the Southgold Shareholders become aware of any matter which may give
rise to a claim against GBG in terms of any indemnity given in 13.1,
notice of the claim and full details of it shall be given by the Southgold
Shareholders to GBG as soon as reasonably possible after the Southgold
Shareholders become aware of it and, if the claim in question arises out
of or is connected with a claim by, or liability to, a third party, the
claim shall not be compromised or settled without the consent of GBG.
13.4 GBG shall be entitled, after consulting with the Southgold Shareholders,
to avoid, dispute, resist, appeal, compromise or contest any claim by a
third party in the name of the Southgold Shareholders and to control any
proceedings arising out of the exercise of any of those rights by GBG,
provided that GBG:
13.4.1 indemnifies the Southgold Shareholders against all reasonable costs,
charges, liabilities and expenses which may be incurred by the
Southgold Shareholders for the purposes of or in connection with
anything done by GBG in the name of the Southgold Shareholders in
accordance with the provisions of this 13.4;
13.4.2 furnishes the Southgold Shareholders with such security for all those
costs, charges, liabilities and expenses as the Southgold Shareholders
may reasonably require and as and when it may so require.
13.5 the Southgold Shareholders shall not be obliged to incur any such costs,
charges, liabilities and expenses unless and until any security required
in terms of 13.4.2 has been duly furnished.
13.6 GBG shall make available to the Southgold Shareholders all such
information and assistance and sign all such documentation as may
reasonably be required by the Southgold Shareholders for the purposes of
avoiding, disputing, resisting, appealing, compromising and contesting any
such claim or liability.
13.7 The provisions of 13.1 to 13.6 shall apply mutatis mutandis in favour of
GBG vis-a-vis the warranties made and given to GBG by:
13.7.1 Southgold in terms of 12.1.2; and
13.7.2 the Southgold Shareholders in terms of 12.1.3.
14. ACCOUNTS
14.1 GBG shall procure that the GBG Accounts are prepared by GBG and reported
upon by GBG's auditors and are signed by the CEO and CFO of GBG on behalf
of the Board of Directors of GBG without qualification and on the basis
that the GBG Accounts accurately and correctly reflect the affairs, assets
and liabilities of GBG.
14.2 The Southgold Audited Accounts shall be prepared and reported upon by
Southgold's auditors without qualification and signed on behalf of the
Board of Directors of Southgold on the basis that the Southgold Audited
Accounts accurately and correctly reflect the affairs, assets and
liabilities of Southgold.
14.3 The Southgold January 2004 Accounts shall be prepared by Southgold and
signed on behalf of Southgold's board of directors on the basis that they
accurately and correctly reflect the affairs, assets and liabilities of
Southgold .
14.4 Southgold or GBG, as the case may be, shall procure that the Accounts:
14.4.1 are drawn up on a historical cost basis:
14.4.1.1 in accordance with accounting practice generally accepted in the
RSA or in Canada, as the case may be;
14.4.1.2 on the basis of accounting practice consistent with previous
financial years;
14.4.1.3 in accordance with the provisions of the RSA Companies Act, 61 of
1973, as amended, or the Company Act in British Columbia, as the
case may be; and
14.4.1.4 to fairly reflect the financial position, profits, assets,
liabilities (including contingent, unquantified and disputed
liabilities) affairs, operations and results of Southgold or GBG,
as the case may be, as at the date and for the period to which
they relate;
14.4.1.5 so as to ensure that items of revenue or expense properly
attributable to the current period ended on the relevant date,
shall be brought into account in that period, and shall not
affect the reported profits for any preceding or succeeding
period;
14.4.2 accurately reflect:
14.4.2.1 the value of the fixed assets of Southgold or GBG, as the case
may be, at the difference between the historical cost thereof and
depreciation reckoned thereon on the straight line basis
previously applied in the depreciation of fixed assets of the
types in question;
14.4.2.2 cash on hand;
14.4.2.3 the value attributable to claims against debtors (if applicable)
of Southgold or GBG, as the case may be;
14.4.2.4 as liabilities the capital amounts owing in terms of instalment
sale agreements and/or financial lease agreements in accordance
with generally accepted accounting practice in the RSA or Canada,
as the case may be.
14.5 Neither Southgold nor GBG has and will have any liabilities, whether
actual or contingent (save for those incurred in the ordinary and regular
course of conduct of Southgold or GBG's business, as the case may be),
other than as disclosed in the Accounts.
15. SALE RESTRICTIONS ON THE SOUTHGOLD SHAREHOLDERS
15.1 The Southgold Shareholders shall inform GBG in writing should they wish to
dispose of the whole or part of the 10 000 000 GBG common shares obtained
by the Southgold Shareholders in terms of 5.3.2 and the price at which it
they are willing to dispose of the shares.
15.2 GBG shall use all reasonable commercial efforts to find a buyer for the
shares the Southgold Shareholders have indicated they wish to sell in
terms of 15.1 (up to a maximum of 6 000 000 of such shares) at a minimum
price of $1,00 each on terms and conditions acceptable to the Southgold
Shareholders.
15.3 GBG will have the right to require the Southgold Shareholders to sell up
to 50% of the GBG shares the Southgold Shareholders have indicated they
wish to sell in terms of 15.1 at the highest market price obtainable, but
provided the price shall not be less than $1,00 per share.
15.4 The Southgold Shareholders shall pay any brokerage fees payable in respect
of the sale of their shares in terms of 15.2 or 15.3. Any other
transaction costs relating to such sales will be borne by GBG.
15.5 Should GBG fail to place the shares referred to in 15.2 within 30 days of
notification by the Southgold Shareholders in terms of 15.1 and provided
that any regulatory hold or selling restriction period in respect of the
shares has expired, the Southgold Shareholders shall be entitled to sell
the shares without restriction, except those arising from laws of general
application.
15.6 Once the Southgold Shareholders have once complied with the procedure
outlined in 15.1 and 15.3 in respect the disposal of all or part of the
GBG common shares acquired by the Southgold Shareholders in terms of
5.3.2, there shall be no further restrictions in favour of GBG on the
Southgold Shareholders' right to deal with any of the GBG common shares
acquired by the Southgold Shareholders in terms of this agreement.
16. VOTING OF GBG SHARES AND APPOINTMENT OF DIRECTORS
16.1 For a period of five years after 30 April 2003 or until they dispose of
the GBG common shares acquired in terms of this agreement, whichever is
the sooner, the Southgold Shareholders agree to vote any GBG common shares
held by them pursuant to this agreement in favour of those items and
resolutions for which GBG's Board of Directors has requested or
recommended that shareholders vote at any GBG shareholders' meetings.
16.2 For so long as the Southgold Shareholders hold more than 10% of the issued
share capital of GBG (or for so long as the Southgold Shareholders have
the right to acquire 10% or more of GBG's issued share capital), the
Southgold Shareholders shall be entitled to appoint not less than two
directors to GBG's Board of Directors and GBG's undertakes to procure such
appointment.
17. OBLIGATIONS OF THE SOUTHGOLD SHAREHOLDERS
17.1 The Southgold Shareholders shall be entitled to charge competitive arm's
length or market-related fees for any services they render to Southgold in
relation to the Burnstone Gold Project.
17.2 The Southgold Shareholders shall be obliged (which obligation shall arise
on the Signature Date) to procure for and on behalf of Southgold:
17.2.1 the registration of the Options as soon as reasonably practicable
after the Signature Date, at the cost of the Southgold Shareholders;
17.2.2 addenda to each of the Options (other than the Prospecting Agreement),
to record that the registration thereof and the registration of
cessions emanating from such contracts pursuant to exercises of the
options contained in the Options shall be attended to by Southgold's
attorneys and not ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇. In respect of those of the
options granted by the ▇▇▇▇▇▇ ▇▇▇▇ Trust, the ▇▇▇▇▇▇▇ Mineral Trust
CC, MM ▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇▇▇, the Southgold Shareholders shall use
reasonable commercial endeavours to procure forthwith after the
Signature Date addenda to record that the purchase price as stated in
those Options shall be diminished to the extent that the grantors hold
only percentages of the mineral rights;
17.2.3 that the prospecting agreement between Southgold and Mr ▇. ▇. ▇. ▇▇
▇▇▇▇ in respect of the Remaining Extent of Portion 5 of the Farm
Rustfontein 548 IR be amended so that ▇▇▇ ▇▇ ▇▇▇▇, ▇▇ ▇▇ ▇▇▇▇'▇
spouse, to whom he is married in community of property, becomes a
party to the agreement.
17.3 GBG and the Southgold Shareholders undertake that they shall not, directly
or indirectly, acquire any mineral or surface rights in respect of the
Properties or on properties (so defined by reference to the title deeds)
contiguous thereto. Furthermore, if the Southgold Shareholders have
already acquired such mineral and/or surface rights, they shall transfer
those rights to Southgold when requested to do so for a consideration
equal to their out-of-pocket expenses in respect of the acquisition of
such rights, as verified by supporting documentation.
17.4 Forthwith after the Signature Date the Southgold Shareholders together or
individually shall disclose to GBG in writing details of any surface or
mineral rights held by them directly or indirectly in respect of
properties contiguous to the Properties and any such rights held or
controlled by their shareholders directly or indirectly.
18. PUMA
18.1 The undertaking referred to in 17.3 shall not apply to the farm Doornhoek
577 IR ("the Doornhoek Property"). Puma Gold (Proprietary) Limited,
Registration Number 2002/000030/07 ("Puma") holds prospecting and option
contracts over four portions of the Doornhoek Property (being those
specified on the Schedule annexed hereto as Schedule 9) ("the Puma
Options") which confer upon Puma the right to explore and to acquire the
mineral rights specified in the Puma Options. In addition, Puma has
applied for prospecting permits pursuant to the Puma Options.
18.2 The Southgold Shareholders other than Pangea ("the Puma Shareholders")
hold the entire issued share capital of Puma in the following proportions
("the Puma Shareholders' Proportions"):
18.2.1 Arequipa, 22%;
18.2.2 Exploration Targets, 22%;
18.2.3 ▇▇▇▇ ▇▇▇▇▇▇, 22%;
18.2.4 Rietbult Exploration, 12,5%; and
18.2.5 Sovereign Portfolios, 21,5%.
18.3 Between the Signature Date and the date of completion of the Bankable
Feasibility Study, on loan account GBG shall fund:
18.3.1 exploration expenditure on direct exploration (including the costs of
a drilling contractor, assay costs and pro rata airborne geophysics
expenses only) of the Puma Options in an amount of $100 000,00; or
18.3.2 the drilling of exploration boreholes to a cumulative depth of 1 500
meters on the relevant portions of the Doornhoek Property and the
associated assay work;
(whichever is the greater), in accordance with a programme of work to
be agreed upon by GBG and the Puma Shareholders and failing agreement,
determined by the Management Committee appointed in terms of the
Management Agreement referred to in 11.
18.4 The loan account referred to in 18.3 shall be unsecured, shall not bear
interest and shall not be repayable before GBG has exercised the right
referred to in 18.5.
18.5 The Puma Shareholders hereby irrevocably grant to GBG (or its nominee) the
right to acquire all (but not part) of their shares in and claims on loan
account against Puma.
18.6 The right shall be exercisable by written notice delivered to the Puma
Shareholders by GBG (or its nominee) during the period from the Signature
Date to the date of completion of the Bankable Feasibility Study and if
not exercised during such period, shall lapse and be of no further force
or effect.
18.7 Forthwith after the Signature Date the Puma Shareholders shall:
18.7.1 sign undated transfer forms in respect of their Puma shares in blank
as to the transferee; and
18.7.2 sign written cessions of their claims on loan account against Puma,
ceding their claims to GBG (or its nominee);
and shall deliver the transfer forms, their Puma share certificates
and the cessions of their claims on loan account against Puma to
attorneys ▇▇▇▇ ▇▇▇▇▇ Inc, to be held until GBG (or its nominee)
exercises the rights referred to in 18.5, whereupon the said transfer
forms, share certificates and cessions shall be delivered to GBG (or
its nominee) against payment of the consideration referred to in 18.8.
18.8 In consideration for the Puma shares and claims, GBG (or its nominee)
shall pay the Puma Shareholders $2,00 per ounce of the total proven,
probable and/or indicated cumulative reserves of gold determined in the
Bankable Feasibility Study adjusted for mining and geological dilution
factors in situ on or under the relevant portions of the Doornhoek
Property referred to in the Puma Options, subject to a the consideration
being limited to a maximum sum of $500 000,00.
18.9 If GBG and the Puma Shareholders cannot agree about the quantum of gold
reserves in situ on or under the relevant portions of the Doornhoek
Property, the dispute shall be referred to an independent expert agreed
upon by the parties and failing agreement, chosen by the Chairperson for
the time being of the South African Institute of Mining and Metallurgy,
for determination, and the expert's determination shall be final and
binding on the parties in the absence of manifest error.
18.10 GBG (or its nominee) shall pay the consideration referred to in 18.8 in
cash within 30 days of exercise of the right by GBG (or its nominee) or
within seven days after the expert has made his determination in terms of
18.9, as the case may be. Payment shall be made to attorneys ▇▇▇▇ ▇▇▇▇▇
Inc and such payment shall constitute a valid discharge of the obligation
to pay such consideration to the Puma Shareholders.
18.11 GBG (or its nominee) shall pay the stamp duty payable on the transfer of
the Puma shares from the Puma Shareholders.
18.12 If GBG cedes and assigns its rights and obligations in terms of this 18 to
a nominee, GBG hereby binds itself in favour of the Puma Shareholders
jointly and severally as surety and co-principal debtor in solidum with
such nominee for the performance of the nominee's obligations hereunder,
renouncing the benefits of excusiion, division and cession of action.
18.13 Should GBG not exercise the rights referred to in 18.5, GBG shall on
demand deliver to the Puma Shareholders all information, records, samples
and copies of all processed information in its possession or in the
possession of its agents in respect of the further exploration activities
referred to in 18.3. Furthermore, in such circumstances, GBG shall not be
entitled to recover from Puma any payment or compensation in respect of
such exploration activities, but shall forfeit any such claims against
Puma once and for all. The latter undertaking constitutes a stiplatio
▇▇▇▇▇▇ in favour of Puma which Puma, by its signature hereto, accepts.
18.14 The warranties, representations and undertakings referred to in Schedule
10 hereto are made and given by the Puma Shareholders in favour of GBG on
the same basis as the warranties referred to in 12 mutatis mutandis and
the Puma Shareholders in the Puma Shareholders' Proportions indemnify GBG
in respect of breaches thereof on the terms and conditions of 13 mutatis
mutandis.
19. CONFIDENTIALITY
19.1 Subject to 19.2, each party undertakes to the other that it will treat as
confidential the terms of this agreement together with all information
whether of a technical nature or otherwise relating in any manner to the
business or affairs of the other parties as may be communicated to it
hereunder or otherwise in connection with this agreement and will not
disclose such information to any person, firm or company (other than to
its auditors and other professional advisers) or to the media, and will
not use such information other than for the purposes of this agreement,
subject always to any prior specific authorisation in writing by the
parties concerned to such disclosure or use.
19.2 The provisions of 19.1 shall not apply to any information which -
19.2.1 is in the public domain other than by default of the recipient party;
19.2.2 is obtained by the recipient party from a bona fide third party having
the right to disseminate such information;
19.2.3 is or has already been independently generated by the recipient party;
19.2.4 is required to be disclosed by law or the valid order of a court of
competent jurisdiction or the request of any governmental or other
regulatory authority or agency (in such jurisdictions as may be
applicable), in which event the disclosing party shall so notify the
other as promptly as practicable (and if possible prior to making any
disclosure) and shall use its reasonable endeavours to seek
confidential treatment of such information.
19.3 The obligations contained in this 9.3 shall endure beyond the termination
of this agreement without limit in time except and until any confidential
information enters the public domain otherwise than through default of the
recipient party.
19.4 GBG shall be entitled to make announcements in connection with the
transactions contemplated in this agreement to its shareholders or in
compliance with regulations of the TSX Venture Exchange providing that
such announcements shall be approved in advance by Pangea which shall be
given a draft copy of the proposed announcement and shall have a
reasonable opportunity to comment in the context of the need for timely
disclosure of material events as required by the rules and/or regulations
of the TSX Venture Exchange or any other applicable regulatory authorities
and in default of such timely comment, GBG may proceed with the
announcement.
20. BREACH
20.1 Should a party breach any provision of this agreement and fail to remedy
that breach within 30 days of receiving written notice from any other
party requiring it to do so, then that party shall be entitled, without
prejudice to any other rights that it may have, whether under this
agreement or in law, to cancel this agreement without notice or to claim
immediate specific performance of all the defaulting party's obligations,
whether or not due for performance, in either event without prejudice to
the aggrieved party's right to claim damages.
20.2 Notwithstanding the above, no party shall be entitled to cancel this
agreement unless the breach is a material breach of a material term that
goes to the root of the contract and the remedy by specific performance or
payment of damages would not adequately prevent the other party from being
prejudiced.
21. CESSION AND ASSIGNMENT
21.1 With the prior written consent of the Southgold Shareholders, which shall
not be unreasonably withheld or delayed, GBG may cede or assign its rights
and obligations under this agreement in whole or in part to a direct or
indirect subsidiary of GBG, provided, however, that GBG may cede its
rights only to transfer of the Shares subject to the option in clause 4 to
such a subsidiary without the consent, but merely on notice to, the
Southgold Shareholders.
21.2 With the prior written consent of GBG, which shall not be unreasonably
withheld or delayed, the Southgold Shareholders may cede or assign their
rights and obligations under this agreement in whole or in part to an RSA
company or trust established by them for the purpose, it being recorded
that the Exchange Control Department of the South African Reserve Bank may
require the GBG common shares and GBG Warrants received by the Southgold
Shareholders in terms of this agreement to be housed in a special purpose
vehicle to ensure that the proceeds thereof are dealt with in accordance
with RSA exchange controls.
22. DOMICILIUM AND NOTICES
22.1 The parties choose domicilium citandi et executandi for all purposes of
the giving of any notice, the payment of any sum, the serving of any
process and for any other purpose arising from this agreement, as follows-
22.2
22.2.1 GREAT BASIN GOLD LTD
▇▇▇▇-▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
VC6C2V6
fax - ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
For attention - ▇▇▇ ▇▇▇▇▇▇▇▇
22.2.2 SOUTHGOLD EXPLORATION (PROPRIETARY) LIMITED
Unit C
Central Park Suites
Corner Main Street and Orchard Avenue
Randburg
fax - ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
For Attention - ▇▇▇ ▇▇▇▇▇ / ▇▇▇▇▇▇▇ ▇▇▇▇▇
22.2.3 THE SOUTHGOLD SHAREHOLDERS
C/o Southgold
Unit C
Central Park Suites
Corner Main Street and Orchard Avenue
Randburg
fax - ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
For attention - ▇▇▇ ▇▇▇▇▇ / ▇▇▇▇▇▇▇ ▇▇▇▇▇
22.2.4 THE PUMA SHAREHOLDERS Science Park
▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇
fax - ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
For attention ▇▇▇▇ ▇▇▇▇▇▇
22.3 Each party shall be entitled from time to time, by written notice to the
other/s, to vary its domicilium to any other physical address.
22.4 Any notice given and any payment made by a party to another party which is
delivered by hand during the normal business hours of the addressee at the
addressee's domicilium shall be rebuttably presumed to have been received
by the addressee at the time of delivery.
22.5 Any notice given by a party to another party by fax shall be rebuttably
presumed to have been received by the addressee on the date of successful
transmission thereof.
22.6 Notwithstanding anything to the contrary in this 21, a written notice or
other communication actually received by a party shall be adequate notice
to it notwithstanding that the notice was not delivered to its given
domicilium.
23. APPLICABLE LAW
All matters arising from or in connection with this agreement, its
validity, existence or termination shall be determined in accordance with
the laws for the time being of the RSA.
24. GENERAL
24.1 This document constitutes the sole record of the agreement between the
parties in relation to its subject matter.
24.2 No party shall be bound by any representation, warranty, promise or the
like not recorded in this document.
24.3 No addition to, variation, novation or agreed cancellation of this
agreement shall be of any force or effect unless in writing and signed by
or on behalf of the parties.
24.4 No suspension of a right to enforce any term of this agreement and no
pactum de non petendo shall be of any force or effect unless in writing
and duly signed by or on behalf of the parties.
24.5 No indulgence which a party may grant to another party shall constitute a
waiver of any of the rights of the grantor unless in writing signed by
both parties.
24.6 All costs, charges and expenses of any nature whatever which may be
incurred by a party in enforcing its rights in terms of this agreement,
including without limiting the generality of the aforegoing, legal costs
on the scale of attorney and own client and collection commission,
irrespective of whether any action has been instituted, shall be
recoverable on demand from the party against which such rights are
successfully enforced and shall be payable on demand.
24.7 The provisions of this agreement shall be binding upon the
successors-in-title- and the permitted assigns of the parties.
Accordingly, the rights and obligations of each party pursuant to this
agreement shall devolve upon and bind its successors-in-title and
permitted assigns.
24.8 All provisions in this agreement are, notwithstanding the manner in which
they have been put together or linked grammatically, severable from each
other. Any provision of this agreement which is or becomes unenforceable
in any jurisdiction, whether due to voidness, invalidity, illegality,
unlawfulness or for any other reason whatsoever, shall, in such
jurisdiction only and only to the extent that it is so unenforceable, be
treated as pro non scripto and the remaining provisions of this agreement
shall be of full force and effect. The parties declare that it is their
intention that this agreement would be executed without such unenforceable
provisions if they were aware of such unenforceability at the time of its
execution.
25. COSTS
25.1 The Southgold Shareholders shall pay Brait Advisory Services Limited's
fees and costs of and incidental to the drafting, execution and
implementation of this agreement.
25.2 The parties will pay their own costs in regard to any independent advice
sought by them for purposes of the negotiation of this agreement.
26. COUNTERPARTS
This agreement may be signed in separate counterparts, each of which shall
be deemed to be an original and all of which taken together shall
constitute one and the same instrument. A counterpart of this agreement in
telefax form shall be conclusive evidence of the original signature and
shall be as effective in law as the counterparts in original form showing
the original signatures.
Signed at Vancouver, BC on 5th November 2002
/s/ Great Basin Gold Ltd.
________________________________________________________
For: GREAT BASIN GOLD LTD
who warrants that he is duly authorised hereto
Signed at Randburg on 4th November 2002
/s/ Southgold Exploration (Proprietary) Limited
________________________________________________________
For: SOUTHGOLD EXPLORATION (PROPRIETARY) LIMITED
who warrants that he is duly authorised hereto
Signed at Randburg on 4th November 2002
/s/ Arequipa Holdings (Proprietary) Limited
________________________________________________________
For: AREQUIPA HOLDINGS (PROPRIETARY) LIMITED
who warrants that he is duly authorised hereto
Signed at Randburg on 4th November 2002
/s/ Exploration Targets (Proprietary) Limited
________________________________________________________
EXPLORATION TARGETS (PROPRIETARY) LIMITED
who warrants that he is duly authorised hereto
Signed at Randburg on 4th November 2002
/s/ ▇▇▇▇ ▇▇▇▇▇▇ Mining (Proprietary) Limited
________________________________________________________
▇▇▇▇ ▇▇▇▇▇▇ MINING (PROPRIETARY) LIMITED
who warrants that he is duly authorised hereto
Signed at Randburg on 4th November 2002
/s/ Pangea Exploration (Proprietary) Limited
________________________________________________________
PANGEA EXPLORATION (PROPRIETARY) LIMITED
who warrants that he is duly authorised hereto
Signed at Randburg on 4th November 2002
/s/ Rietbult Exploration (Proprietary) Limited
________________________________________________________
RIETBULT EXPLORATION (PROPRIETARY) LIMITED
who warrants that he is duly authorised hereto
Signed at Randburg on 4th November 2002
/s/ Sovereign Individual Portfolios (proprietary) Limited
________________________________________________________
SOVEREIGN INDIVIDUAL PORTFOLIOS (PROPRIETARY) LIMITED
who warrants that he is duly authorised hereto
Signed at Randburg on 4th November 2002
/s/ Puma Gold (Proprietary) Limited
________________________________________________________
For: PUMA GOLD (PROPRIETARY) LIMITED
who warrants that he is duly authorised hereto
in acceptance of the benefits granted by GBG in terms of clause 18.13 hereof.
