PROPERTY OPTION AGREEMENT
THIS
AGREEMENT is dated March 5,2001
BETWEEN:
XXXXXXX
XXXXXX, P. Xxx., of
000
- 000
Xxxxxxx Xxxxxx Xxxxxxx,
X.
X. X0X
0X0
(hereinafter
called "Xxxxxx")
AND:
MOSQUITO
CONSOLIDATED GOLD MINES LTD., ,
a
company incorporated under the laws of the Province of British Columbia and
having its head office at Xxxxx 000, 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, B. C.
V 6C
1 T 1
(hereinafter
called the "Mosquito")
AND:
GOLDEN
CARIBOO RESOURCES LTD., a
company
incorporated under the laws of the Province of British Columbia and having
its
head office at Suite 305, 455 Granville Street, Vancouver, B.C. V6C 1
T1
(hereinafter
called the "Golden Cariboo")
WHEREAS:
X.
Xxxxxx
is the registered owner of a 100% right, title and interest in the Dufferin,
Antler, Nugget Mtn, Heron, Grouse and Eagle Claims mineral claims, located
in
the Cariboo Mining Division of British Columbia and are more particularly
described in Schedule "A" attached to this Agreement (the "Property"). The
claims represent a total of 117 mineral titles of which the Heron, Dufferin,
Grouse and Antler 1 claims represent a 20 unit, 4-post claims;
B.
Mosquito has claimed an interest in the Property and is in a dispute with Xxxxxx
with respect to the rightful ownership of the Property and has agreed with
Xxxxxx to terminate the dispute by being compensated by Golden Cariboo for
the
purchase of 50% of the Property as ifit were also one of the vendors of the
Property and Xxxxxx has agreed with Mosquito that it shall be compensated by
Golden Cariboo as to 50% of the purchase price of the Property;
X.
Xxxxxx
and Mosquito hereby grant to Golden Cariboo the sole and exclusive right to
earn
a 100% right, title and interest in' and to the Property, subject to a 2% Net
Smelter Return Royalty
payable to Xxxxxx and Mosquito;
X.
Xxxxxx
and Mosquito are at arm's length to Golden Cariboo;
X.
Xxxxxx
Cariboo is listed on the Canadian Venture Exchange ("CDNX"); and
F. Mosquito
is listed on the CDNX.
NOW
THEREFORE in consideration of the premises and the mutual covenants, agreements,
representations and warranties herein contained, the parties hereto agree as
follows:
1.
DEFINITIONS
1.1
In
this Agreement:
(a)
"Agreement" means this Agreement, as the same may be amended, supplemented
or modified from time to time;
(b)
"Approval Date" is the date on which this Agreement has been accepted for
:filing
with the CDNX;
(
c) "Net
Smelter Return Royalty" means payment of a royalty of net smelter returns
as described in Schedule B attached to this Agreement.
(d)
"Option") means the option to acquire 100% of the Property as provided for
in
this
Agreement;
(e) "Property"
shall mean and include:
(i) |
the
mineral properties located in the Province of British Columbia, known
as
the Dufferin, Antler, Nugget Mtn, Heron, Grouse and Eagle Claims,
which
claim is more particularly described in Schedule "A" attached hereto;
and
|
(ii) |
all
rights and appurtenances pertaining to the mineral claims, leases,
,
licenses, permits, easements, rights-of-way, certificates and other
approvals obtained by either of the parties either before or after
the
date of this Agreement and necessary for the development of the Property,
or for the purpose of placing the Property into production or continuing
production therefrom.
|
(f)
"Regulatory
Authorities" means those governmental and regulatory agencies which
have jurisdiction over the Golden Cariboo and Mosquito including the
Canadian
Venture Exchange (CDNX)
and
the
British Columbia Securities Commission (the "Commission");
2
2.
GRANT OF OPTION
2.1. Xxxxxx
and Mosquito grant to Golden Cariboo the sole, exclusive and irrevocable
right
and
option (the "Option") to acquire an undivided 100% right, title and interest
in
and to the Property, subject to the Net Smelter Return Royalty, for and in
consideration of the obligations set out in Paragraph 3 below.
3.
TERMS OF OPTION
3.1
In
order to acquire the 100% right, title and interest in and to the Property,
Golden Cariboo agrees to allot and issue a total of 400,000 of its common shares
and to pay option payments totalling $25,000 to Xxxxxx and Mosquito, in
accordance with the following schedule:
(a)
allot
and issue 100,000 of its common shares to Xxxxxx on receipt of CDNX acceptance
of this option agreement;
(b)
allot
and issue 100,000 of its common shares to Mosquito on receipt of CDNX
acceptance
of this option agreement;
(c)
pay
$7,500 to Xxxxxx on receipt ofCDNX acceptance of this option agreement; (d)
pay
$5,000 to Mosquito on receipt ofCDNX acceptance of this option agreement; (e)
allot and issue a further 100,000 common shares to Xxxxxx by March 30,2002,
following
receipt of CDNX acceptance to the issuance of these further shares;
(f)
allot
and issue a further 100,000 common shares to Mosquito by March 30, 2002
following
receipt of CDNX acceptance to the issuance of these further shares; (g) pay
a
further $5,000 to Mosquito on or before June 30, 2001; and (h) pay a further
$7,500 to Xxxxxx on or before June 30,2001
3.2
At
such time that the Property is brought into commercial production, Golden
Cariboo
agrees
to
pay to Xxxxxx and Mosquito (1 % to Xxxxxx and 1 % to Mosquito), a Net Smelter
Return Royalty equal to 2% of the Net Smelter Returns received from the property
in accordance with Schedule B to this Agreement;
3.3
Golden Cariboo may purchase from Xxxxxx and Mosquito and Xxxxxx and Mosquito
shall sell to the Golden Cariboo, the 2% Net Smelter Return Royalty for a cash
payment of $2,000,000 ($1,000,000 to Xxxxxx and $1,000,000 to Mosquito) at
such
time as the purchaser may, by notice in writing to Xxxxxx and Mosquito advising
of its intention to purchase the Net Smelter Return Royalty.
4.
EXERCISE OF OPTION
4.1
When
Golden Cariboo has issued the 400,000 shares and made all cash payments
required
under Paragraph 3 above, it shall have
exercised
this Option and will have acquired an undivided
100% right title and interest in the Property, subject to the 2% Net Smelter
Return Royalty described in Schedule B to this Agreement.
3
5.
RIGHT
OF ENTRY
5.1
During the term of the Option, Golden Cariboo and its employees, agents and
any
person duly authorized by Golden Cariboo shall have the sole and exclusive
right
to:
(a)
enter
in, under and upon the Property;
(b)
have
exclusive and quiet possession thereof;
(c)
do
such prospecting, exploration, development and other mining work thereon and
thereunder as Golden Cariboo in its sole discretion may consider
advisable;
(d)
bring
upon and erect upon the Property, such mining facilities as Golden Cariboo
may
consider advisable; and
(e)
remove from the property and sell or otherwise dispose of mineral products
derived
therefrom.
6.
REPRESENTATIONS AND WARRANTIES OF THE XXXXXX AND MOS UITO
6.1
In
order to induce the Purchaser to enter into and to complete the transactions
contemplated by this Agreement, Xxxxxx and Mosquito jointly represent and
warrant to the Purchaser that:
(a) |
Xxxxxx
is the recorded and beneficial owner of 100% of the Property described
in
Schedule A to this Agreement, has the sole right to enter into this
Agreement and to sell and assign the Property free and clear of any
liens
or encumbrances;
|
(b) |
Mosquito
has the right to enter into this Agreement and the entering into
this
Agreement by Mosquito has received all necessary approvals of the
board of
directors of Mosquito, a copy of which will be made available to
Golden
Cariboo on execution of this
Agreement;
|
(c) |
to
the best of their knowledge, the mineral claims comprising the Property
have been properly staked and recorded in compliance with all laws
and
regulations of the Province of British Columbia and there are no
disputes
over the title, the staking or recording of the mineral prospects
on the
property, or outstanding agreements or options to acquire or purchase
the
Property or any portion thereof save and except as disclosed to the
Purchaser, and no person has any royalty or other interest whatsoever
in
production ITom any of the mineral claims which comprise the
Property;
|
(d) |
Xxxxxx
covenants and agrees to file all necessary documentation with the
appropriate mining recorders office to extend the present expiry
dates of
the Property, such filings to be discussed and agreed to by Golden
Cariboo
Resources Ltd.;
|
(e) |
to
the best of their knowledge, the Property is in good standing, and
all
necessary filings,
permits and other necessary documentation has been made or received
ITom
all regulatory authorities, and the property is ITee and clear of
any
liens, charges or encumbrances or claims by any other party of any
nature
or kind whatsoever;
|
4
(f) |
Mosquito
has been duly incorporated under the Company
Act (British
Columbia) and is
in good standing under the laws of British Columbia;
and
|
(g) |
neither
Xxxxxx nor Mosquito, nor any predecessor in interest or title has
done
anything whereby
the Property may become encumbered.
|
6.2
Xxxxxx and Mosquito shall indemnifY and save the Purchaser harmless ITom all
loss, damage, costs, actions, and suits arising out of or in connection with
any
breach of any representation, warranty, covenant, agreement or condition made
by
it and contained in this Agreement.
6.3
The
representations and warranties contained in this paragraph are provided for
the
exclusive benefit of the Golden Cariboo, and a breach of anyone or more thereof
may be waived by the Golden Cariboo
in whole or in part at any time without prejudice to its rights in respect
of
any other breach of the same or any other representation or
warranty.
6.4
The
representations and warranties contained in this Paragraph shall survive the
execution hereof
6.5
On
execution of this Agreement, Xxxxxx and Mosquito shall deliver duly executed
transfer forms to the Golden Cariboo to evidence the transfer of the Property
as
contemplated herein and Golden Cariboo shall be entitled to record the transfer
to effect the legal transfer of the Property to the Golden
Cariboo provided that Golden Cariboo has acquired the 100% right, title and
interest of Xxxxxx and Mosquito in the Property prusuant to the requirements
of
Paragraph 3 hereof
6.6
Xxxxxx and Mosquito covenant that all relevant particulars with respect to
the
staking of the Properties are disclosed in Schedule "A" and that they are
unaware of any encumbrances on the Properties.
7.
REPRESENTATIONS AND WARRANTIES OF GOLDEN CARIBOO
7.1
In
order to induce the Xxxxxx and Mosquito to enter into and to complete the
transactions contemplated by this Agreement, the Golden Cariboo represents
and
warrants to them that:
(a) |
it
has been duly incorporated and validly exists as a corporation in
good
standing under the law of the Province of British Columbia and has
full
capacity to enter into this Agreement and carry out the transactions
contemplated hereby;
|
(b) |
it
is in good standing with respect to all filings required to be made
with
the British Columbia
Securities Commission;
|
5
(c) |
Golden
Cariboo has full corporate power and authority to enter into this
Agreement and
the entering into of this Agreement does not conflict with any applicable
laws or with the charter documents of Golden Cariboo any contract
or other
commitment to which Golden Cariboo is a
party;
|
(d) |
Golden
Cariboo covenants and agrees to maintain the Property in good
standing;
|
(e) |
Should
Golden Cariboo elect to abandon its interest in the Property, either
in
whole or in part, it shall transfer to Xxxxxx and to Mosquito a 50%
interest in the Property to each party, and file a minimum of one
(1)
year's assessment work on the Property beyond the date of such Notice
of
abandonment; and
|
(f) |
Should
Golden Cariboo elect to sell its interest in the Property, it shall
grant
Mosquito a
right of first refusal on this
sale.
|
7.2
The
execution of this Agreement and the performance of its terms have been duly
authorizedby all necessary corporate actions including resolutions of the board
of directors;
7.3
Golden Cariboo shall indemnify and save Xxxxxx and Mosquito harmless from all
loss, damage, costs, actions, and suits arising out of or in connection with
any
breach of any representation, warranty, covenant, agreement or condition made
by
it and contained in this Agreement.
7.4
The
representations and warranties contained in this paragraph are provided for
the
exclusive benefit of Xxxxxx and Mosquito, and a breach of anyone or more thereof
may be waived by the Xxxxxx and Mosquito in whole or in part at any time without
prejudice to its rights in respect of any other breach of the same or any other
representation or warranty.
7.5
The
representations and warranties contained in this paragraph shall survive the
execution hereof
7.6
Golden Cariboo covenants that it will continue to comply with the requirements
of applicable securities laws and the Regulatory Authorities in relation to
the
issue and trading of its securities and in all matters relating to the
transactions contemplated by this Agreement, including the filing of a renewal
Annual
Information Form, prior to the issuance of the shares contemplated herein;
.
8.
TRANSFER OF TITLE
8.1
Upon
completion of the last payment and delivery of all shares required to be made
by
Golden Cariboo to Xxxxxx and Mosquito in accordance with Paragraph 3, Golden
Cariboo shall be entitled to record all transfers contemplated hereby at its
own
cost with the appropriate government office to effect the transfer of its 100%
interest in the Property, free and clear of any liens,
charges or encumbrances whatsoever, except the Net Smelter Return
Royalty.
6
9.
TERMINATION
9.1
If
the Option is terminated otherwise than upon the exercise thereof Golden Cariboo
will leave the claims in good standing for a period of at least one year from
the termination of the option period and deliver to Xxxxxx and Mosquito, the
documentation being held by Golden Cariboo to transfer the claims into its
name
on completion of the option payments and share deliveries described
above.
9.2
This
Agreement and Option shall terminate:
(a)
at
the option of Xxxxxx and Mosquito if, after giving 30 days written notice to
Golden Cariboo of default of any of the payments described in paragraph 3 and
Golden Cariboo has not within those 30 days made the outstanding payments to
Xxxxxx and Mosquito, unless the time for making such payments has been extended,
in writing, by Xxxxxx and Mosquito;
(b)
at
the option of Golden Cariboo by giving thirty (30) days written notice to Xxxxxx
and Mosquito; and
(c)
at
the option of Xxxxxx and Mosquito, by giving thirty (30) days written notice
to
Golden Cariboo, if any of the warranties and representations of Golden Cariboo
set out herein are untrue in any material respect.
10
TRANSFER OF INTEREST
10.1
During the term of this Agreement neither party to this Agreement may transfer
or assign any interest it holds in the Property to any other party, without
the
express written consent of of the other party, such consent not to be
unreasonably withheld.
11.
FURTHER ASSURANCES
11.1
The
parties shall execute and deliver such further and other documents and do such
further and other things as may be necessary to carry out and give effect to
the
intent of this Agreement.
12.
FORCE
MAJEURE
12.1
If
Golden Cariboo is at any time during the Option Period prevented or delayed
in
complying with any provisions of this Agreement by reason of strikes, walk-outs,
labour shortages, power shortages, fuel shortages, fires, wars, acts of God,
governmental regulations restricting
normal operations, shipping delays or any other reason or reasons beyond the
control of Golden Cariboo, the time limited for the performance of Golden
Cariboo of its obligations hereunder will be extended by a period of time equal
in length to the period of each such prevention or delay, provided however
that
nothing herein will discharge Golden Cariboo of its obligations set out
herein.
7
12.2
Golden Cariboo will within seven days give notice to Xxxxxx and Mosquito of
each
event of force majeure under this paragraph and upon cessation of such event
will furnish Xxxxxx and Mosquito with notice to that effect together with
particulars of the number of days by which the obligations of Golden Cariboo
have been extended by virtue of such event of force majeure and all preceding
events of force majeure.
13
NOTICE
13.
1 All
notices required or permitted to be given hereunder shall be in writing and
personally delivered to the address of the intended recipient set forth on
the
first page hereof or at such other address as may from time to time be notified
by any of the parties hereto in the manner herein provided.
14.
ENTIRE AGREEMENT
14.1
This
Agreement constitutes the entire Agreement between the parties, and there are
no
representations or warranties, express or implied, statutory or otherwise and
no
agreements collateral hereto other than as expressly set forth or referred
to
herein.
15.
TIME
OF THE ESSENCE
15.
1
Time shall be the essence of this Agreement.
16.
APPLICABLE LAW
16.1
This
Agreement is subject to regulatory approval and shall be governed by and
interpreted in accordance with the laws of this Province of British
Columbia.
17.
REGULATORY APPROVAL
17.1
This
Agreement is subject to regulatory approval and Golden Cariboo agrees to obtain
such regulatory approval as may be required within 90 days of execution of
this
Agreement. If such approval is not obtained within such period, Golden Cariboo
may request a further 30 days within which to obtain such approval failing
which
approval this option shall terminate unless extended by mututal agreement of
the
parties. All parties agree to take such steps to cooperate fully with each
other
as may be reasonable and necessary to obtain such approvals and it is further
agreed that if the consideration set out in Paragraph 3 is not acceptable,
then
Xxxxxx and' Mosquito agree to modify such consideration as may be necessary
and
in their opinion commercially
reasonable to obtain regulatory approval. Until the Approval Date. Golden
Cariboo may
have
access to the Property but only for the purposes of examination and verification
of eh.-1sting
data and for the purpOS6 of pr~paring a technical report on the Property should
one be required
to obtain Regulatory Approval of this Agreement.
8
18.
ARBITRATION
18.1
All
matters and differences between the parties hereto in relation to this Agreement
and the option
granted herein will be referred to the arbitration of a single arbitrator,
if
the parties agree to one
arbitrator, otherwise two arbitrators will be appointed by each party and a
third will be chosen by the two already appointed arbitrators before they enter
into the business of arbitration. The aware and determination arbitrator or
arbitrators will be binding upon the parties hereto and their respective
heirs, executors, administrators and assigns. In the event that any party fails
to appoint an
arbitrator, the matter of difference will be settled under the terms of the
Commercial Arbitration Act of British Columbia, as amended,
19
_
CAPTIONS
19,
1 The
captions appearing in this Agreement are inserted for convenience or reference
only and shall not affect the interpretation of this Agreement.
IN
WITNESS WHEREOF the parties have
executed
this Agreement as of the day and year first above written.
9
SCHEDULE
A
Mineral
Property Option Agreement between Xxxxxxx Xxxxxx, Mosquito
Consolidated Gold Mines Ltd. and Golden Cariboo Resources Ltd.
Consolidated Gold Mines Ltd. and Golden Cariboo Resources Ltd.
Name
of Claims
|
Tenure
#
|
Expirv
|
No.
of Units
|
||||
Dufferin
|
382423
|
2001/11/09
|
20
|
||||
Dufferin
1
|
375107
|
2001/03/25
|
1
|
||||
Dufferin
21
|
377806
|
2001/06/1
0
|
1
|
||||
Antler
1
|
382424
|
2001/11/01
|
20
|
||||
Antler
9
|
375230
|
2001/04/07
|
1
|
||||
Antler
11-12
|
375232
& 33
|
2001/04/07
|
2
|
||||
Antler
13-18
|
375719-24
|
2001/04/07
|
6
|
||||
Antler
19 & 20
|
375764
& 65
|
2001/04/20
|
2
|
||||
Antler
22
|
375235
|
2001/04/07
|
1
|
||||
Antler
29-38
|
375725-34
|
2001/04/08
|
10
|
||||
Antler
43-56
|
375770-83
|
2001/04/14
|
13
|
||||
Antler
57
|
375784
|
2001/04/20
|
1
|
||||
Antler
59 & 60
|
275786
& 87
|
2001/04/20
|
2
|
||||
Antler
61-66
|
375892-97
|
2001/04/21
|
6
|
||||
Antler
67-80
|
375898-911
|
2001/04/23
|
14
|
||||
Nugget
Mntn 19-28
|
375801-10
|
2001/04/01
|
10
|
||||
Nugget
Mntn 29-42
|
375811-824
|
2001/04/12
|
14
|
||||
Nugget
Mntn 43-52
|
375914-23
|
2001/04/16
|
10
|
||||
Nugget
Mntn 53-62
|
375924-33
|
2001/04/18
|
9
|
||||
Heron
|
382422
|
2001/11/09
|
20
|
||||
Heron
32-36
|
376130-34
|
2001/04/24
|
5
|
||||
Grouse
|
382421
|
2001/11/09
|
20
|
||||
Eagle
1
|
382433
|
2001/11/03
|
1
|
||||
Eagle
2 & 3
|
382434
& 35
|
2001/11/07
|
2
|
||||
Eagle
4
|
382436
|
2001/11/09
|
1
|
10
SCHEDULE
B
Mineral
Property Option Agreement between Xxxxxxx Xxxxxx, Mosquito
Consolidated
Gold Mines Ltd. and Golden Cariboo Resources Ltd.
NET
SMELTER ROYALTY
Golden
Cariboo Resources Ltd. is acquiring 100% of the Property subject to a 2% Net
Smelter
Return Royalty in favour of Xxxxxx as to 1 % and Mosquito as to 1 % on the
net
smelter
returned derived from the production of minerals from the Property which shall
be
computed as follows:
a.
If
minerals, mineral concentrates or other substances, ore-bearing materials and
rock
of
every kind whether metalliferous or non-metalliferous substances are removed
from the Property and delivered to a mill, smelter in a bona fide arm's
length
transaction or any minerals processed at a mill located on the property, the
net
smelter return shall be the total, gross sale proceeds therefore which are
received
by or credited to the Purchaser, including any proceeds of insurance, less
only
(1) all actual costs incurred by the Purchaser for transportation of the
substances
to the pointes or point of sale; and (2) all sampling, assaying, weighing,
treatment, smelter or refining charges, or penalties which are charges, or
penalties, which are charged by the buyer to the Purchaser, except those
deducted
by the buyer directly from the proceeds of sale; and there shall be no
deduction
for costs of any treatment, processing or benefication by or on behalf of
the
Purchaser;
b.
If
ores are removed from the Property other than a bona fide arm's length sale
transaction, the Net Smelter Returns shall be based upon a value equivalent
to
Net Smelter
Return, which shall be the gross fair market value of the ores at the
Property,
in the form and condition in which the ores are transported from the
Property,
without any deduction for costs of any treatment, processing or benefication;
c.
Any
sale of by-products of operations or other materials produced from the
Property,
such as tailings or dump wastes, sand, gravel or clays and any use of
them
off
the property without a sale (except solely as a waste disposal) shall be
subject
to the Net Smelter Return Royalty;
d.
Within
120 days after the end of each calendar year for which the Net Smelter
Returns
are payable, the records relating to the calculation of Net Smelter Returns
for
such
year shall be audited any resulting adjustments in the payment of Net
Smelter
Returns shall be made forthwith after completion of the audit. All payment
of Net Smelter Returns for a calendar year shall be deemed final and in
full
satisfaction of all obligations of the Golden Cariboo in respect thereof if
such
payments
or the calculations thereof are not disputed by Xxxxxx and/or Mosquito
within
60
days after receipt by Xxxxxx and Mosquito of the audited
statements.
11
x.
Xxxxxx
Cariboo shall maintain an accurate record ofthe results of all mining
operations
on the Property and results of such sampling, weighing and assaying with
respect to any ore mined and concentrate and bullion produced on the
Property;
f
Xxxxxx
and Mosquito, or their authorized agents, shall be permitted the right to
examine, at all reasonable times, such records pertaining to the calculations
of
Net Smelter Returns and shall have, at their own risk, access to the
Property.
g,
Payment of Net Smelter Return Royalties shall be made within seven (7) days
following
each month end, during which the Purchaser has carried out any exploration,
development or mining operations on the Property.
h,
Kocsic
and Mosquito have the right to register its Net Smelter Royalty in appropriate
Land Title or Mining Recorder's Office, as the case may be.
12