MEMORANDUM OF AGREEMENT
This Memorandum of Agreement ("MOA") is-made this 23rd day of November 0000
Xxxxxx Xxxx, Xxxxx Xxxxxx, Xxxxxxxxxxx, between:
1. ABRA MINING AND INUSTRIAL CORPORATION ("AMIC"), a corporation organized
under the laws of the Republic of the Philippines with its business address
at 0xx Xxxxx, Xxxxx Xxxxxx Xxxx, 000 Xxxx Xxxxxx, Xxxxxx Xxxx and
represented by Xx. Xxxxxxxx X. Xxxxx President;
2. OLYMPUS PACIFIC MINERALS INC. ("OYM") with its office address at Xxxxx 000,
00 Xxxx Xxxxxx Xxxx Xxxxxxx, XX X0X 0X0 Xxxxxx and represented by Xx. Xxxxx
X. Xxxx; Vice-President, Exploration;
3. JABEL CORPORATION (JABEL) a corporation organized and existing under the
laws of the Republic of the Philippines with address at Xx. 00 Xxxx Xxxxx
Xxxxx, Xxxxxx, Xxxxxx Xxxx and represented by Xxxxx X. Xxxxx, President.
BACKGROUND
A. The parties have agreed that the Grantee shall acquire the option to earn a
60% interest in AMIC Capcapo mining tenement located in the Municipality of
Baay-Licuaan, Province of Abra, Philippines, as more particularly described
in Clause 1.1 and Schedule A and B.
B. The parties wish to record the terms and conditions of their agreement in
this MOA.
DEFINITIONS
In this Memorandum of Agreement the following words and phrases have the
meanings set out after them:
"Affiliate" means any person which directly or indirectly controls, is
controlled by, or is under common control with, a Party. For purpose of the
preceding sentence, "control" means possession, directly or indirectly of the
power to direct or cause direction of management and policies through ownership
of voting securities, contract, voting trust or otherwise;
CAPCAPO" means Sitio Capcapo, Xxxxxx-Xxxx, Xxxx, Philippines;
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Memorandum of Agreement among OYM, AMIC and JABEL dated 23 November 2006
"EARN-IN PERIOD" means the period commencing on the date hereof and ending on
the date that the Grantee exercises its option under Clause 2.8;
"EXPA" means-Exploration Permit Application;
"FIVE-DAY AVERAGE SHARE PRICE" means the weighted average sale price of all
shares in OYM sold on the Toronto Stock Exchange during the last five (5)
consecutive trading days on which shares in OYM were sold on that Exchange,
prior to:
a. the signing of this MOA;
b. the date of signing of the Format Agreement; or
c. the date of issue;
as appropriate.
"FORMAL AGREEMENT" means a more formal and comprehensive farm-in and
incorporated joint venture agreements embodying the terms hereof to be prepared
and signed between the parties;
"GRANTEE" means OYM and Philippine nationals associated with OYM;
"JV" means the joint venture contemplated under this MOA;
"MANAGER" means an entity qualified under Philippine law to operate NEWCO;
"MINERAL RESERVE" shall have the meaning given to it by CIMM (NI-43-101) / JORC
standards;
"MOA" means this Memorandum of Agreement;
"MPSA" means the Mineral Production Sharing Agreement No. 144-99-CAR;
"NEWCO" means the joint venture company formed pursuant to Clause 3.1;
"OPTION" means the option to earn 60% of the Property pursuant to this MOA and
the Formal Agreement;
"OPTION PERIOD" means the period from execution or signing of the Formal
Agreement to the fifth anniversary of execution or signing of the Formal
Agreement;
"OTHER TENEMENTS" means those other mining tenements within the area covering
PATOK under the MPSA No. 141-99-CAR and EXPA#085, situated in the Province of
Abra, more particularly described in Schedule A and B;
"PROFIT" means net profit after payment of all obligations which includes but is
not limited to costs, expenditures, interest, taxes, royalties, etc. as
evidenced by audited accounts prepared in accordance
with international Generally Accepted Accounting Practices and adjusted to
reflect the actual cash flow timing of any income;
`PROPERTY" means the 756 Hectares of Mining Tenement under the MPSA situated in
Capcapo and more or less three thousand five hundred (3,500) hectares of mining
tenement under EXPA #085, forming a two kilometre perimeter around the Capcapo
extension, more particularly described in Schedules A and B;
"ROYALTY" means 3% of the gross value of production or 6% of the annual Profit
of the NEWCO, whichever is higher;
"THIRD PARTY" refers to any person, entity or corporation other than a party or
a party's Affiliate.
"TPD" means tonnes per day;
INTERPRETATION
Every thing expressed or implied in this MOA which involves more than one person
binds and benefits those people jointly and severally.
A reference to a person includes any other entity or association recognised by
law and the reverse.
1.0 REPRESENTATIONS AND WARRANTIES OF AMIC AND JABEL
1.1 JABEL is the holder of the Property, and AMIC has certain rights over the
Property by virtue of an operating agreement between JABEL and AMIC. With
regard to EXPA#085, it is understood that the government may, in accordance
with law, exclude from EXPA#085's coverage, area which is not open to
mining activities, such as old-growth forests.
1.2 With respect to the right of first refusal within this MOA, JABEL has the
exclusive and collective rights to Other Tenements.
1.3 AMIC and JABEL represents and warrants to the Grantee that at the time of
signing this MOA:
1.3.1 AMIC and JABEL have not received any written notice of any alleged
violation of environmental laws relating to the Property or any
requirement for remedial action at, under or on the Property, which
remains outstanding or has not otherwise been complied with as of the
date hereof and, to the knowledge of AM1C, no fact or circumstance
exists which would give rise to such a claim;
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Memorandum of Agreement among OYM, AMIC and JABEL dated 23 November 2006
1.3.2 The Property and Other Tenements are free from existing mortgages,
charges, liens and other encumbrances of whatever nature;
1.3.3 The Property and Other Tenements have been duly marked off and
applied for in accordance with the relevant Mining Laws of the
Republic of the Philippines;
1.3.4 The Property and Other Tenements are in good standing;
1.3.5 There are no claims, demands, litigation, and proceedings pending or
threatened against AMIC or JABEL in respect of the rights granted
under this MOA;
1.3.6 AMIC or JABEL have not received notice of any act or omission which
may render the Property subject to cancellation, revocation or
forfeiture, which may cause any term or condition of the MOA to be
amended or otherwise varied, and which may restrict the enjoyment of
rights conferred by the Property and Other Tenements or which may
prejudice the renewal of the Property and Other Tenements, and it is
not aware of any such act or omission;
1.3.7 No insolvency events have occurred in respect of AMIC or JABEL, nor
have any steps been taken for, or fact, act, matter or circumstance
occurred, which may likely give rise to any steps being taken for
such an insolvency event.
1.3.8 There are no agreements or understandings relating to the Property
among AMIC, JABEL and/or third parties that would be contrary to or
impair this MOA
2.0 EARN IN PERIOD OPTION TO EARN 60% OF JABEL'S 100 % INTEREST IN THE PROPERTY
2.1 JABEL and AMIC shall grant to the Grantee the sole and exclusive right and
option to earn Sixty Percent (60%) of JABEL's One Hundred Percent (100%)
rights and interests to the Property on the terms and conditions described
herein (the "Option").
2.2 The Grantee may assign all or part of its rights under this MOA to an
affiliate of the Grantee, including but not limited to the Grantee's
subsidiaries or branch offices that are registered under Philippine law.
2.3 JABEL and AMIC shall grant to the Grantee right of first refusal on the
Other Tenements. If AMC has a third party offer for any interest in the
Other Tenements, the Grantee has the right of first refusal to match
(either on the same terms or on such other terms as may be approved by
AMIC) the third party's offer within sixty (60) days of being given written
notice by AMIC. Written notice will include the complete terms of the third
party offer and identity of that third party.
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Memorandum of Agreement among OYM, AMIC and JABEL dated 23 November 2006
2.4 AMIC, as the holder of rights under an operating agreement with JABEL,
shall enjoy a cost free and non-contributing equity in the Joint Venture
Partnership until the Grantee vests at Sixty Percent (60%), pursuant to the
pertinent provisions of Part3 hereof.
2.5 The Grantee shall be responsible for all property taxes and other
government impositions due from the date the Formal Agreement is effective,
up to vesting or the date of termination. AMIC shall pay all property taxes
and other government impositions currently outstanding.
2.6 The Grantee may terminate the Option at any time upon giving thirty (30)
days prior written notice to AMIC or JABEL and in such case, the Grantee
shall within sixty (60) days thereafter disclose and deliver to AMIC all
information and data, including all geological, geophysical and assay
results, maps, environmental studies, test and assessments and
notifications from regulatory authorities, studies, development etc.
concerning the Property.
2.7 The Grantee shall make the option payments and issue the shares outlined
below.
2.7.1 On the date of signing of the Formal Agreement the Grantee shall pay
to AMIC Two Hundred Thousand US Dollars (US$200,000) in cash.
2.7.2 Within six months from the date of signing, the Grantee shall cause
to be issued to AMIC, Three Hundred Fifty Thousand US Dollars
(US$350,000) worth of ordinary or common OYM shares subject to the
rules of the Toronto Stock Exchange, at no extra cost to AMIC.
Subject to regulatory approvals, the price of the OYM shares will be
the Five-Day Average Share Price prior to the date of signing of
Formal Agreement.
2.7.3 Once the Grantee has invested Three Million US Dollars (US$3,000,000)
towards exploration and/or development expenses on the Property to
earn a Forty Percent (40%) interest as outlined. in Clauses 2.7.1 and
2.7.2 below, the Grantee shall cause to be issued to AMIC, Four
Hundred Fifty Thousand US Dollars (US$450,000) worth of ordinary or
common OYM shares subject to the rules of the Toronto Stock Exchange,
at no extra cost to AMIC. Subject to regulatory approvals, the price
of the OYM shares will be the Five-day Average Share Price prior to
the date of issue.
2.8 The Grantee shall incur staggered investments totaling Six Million US
Dollars (US$6,000,000) towards exploration and/or development expenses on
the Property pursuant to the work program as per attached Schedule C (as
amended from time to time) during the Option Period, in the following
stages:
2.8.1 Stage 1 - the Grantee shall invest approximately One Million US
Dollars (US$1,000,000) on the Property to earn Twenty Percent (20%)
interest or equity;
2.8.2 Stage 2 - the Grantee shall invest a further Two Million US Dollars
(US$2,000,000) on the Property to earn a further Twenty Percent (20%)
interest or equity (Forty Percent (40%) cumulative total); and
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Memorandum of Agreement among OYM, AMIC and JABEL dated 23 November 2006
2.8.3 Stage 3: the Grantee shall invest a further Three Million US Dollars
(US$3,000,000) on the Property to earn a further Twenty Percent (20%)
interest or equity (Sixty Percent (60%) cumulative total).
2.9 If the Grantee fully exercises the Option by making the option payments and
incurring the expenditure stipulated under Clauses 2.6 and 2.7 above and/or
by finalizing a feasibility study which has been independently audited by a
third party that results in making a formal decision to commence mine
development, prior to the Option Period, the Grantee shall automatically be
vested in a Sixty Percent (60%) interest in the Property with AMIC having a
Forty Percent (40%) interest.
2.10 If the Grantee vests at Sixty Percent (60%) due to finalizing a feasibility
study stipulated under Clause 2.8 above, but has not incurred expenditures
totaling Six Million US Dollars (US$6,000,000) on the Property, the
expenditure difference ("Under-Expenditure") shall be used in the mine
development and similar activities in the Property only at the Grantee's
sole responsibility during the Joint Venture Period.
3.0 JOINT VENTURE PERIOD
3.1 Once the Grantee is vested at Sixty Percent (60%) a new Joint Venture
private company ("NEWCO") will be formed to fund or finance and manage
future exploration, development and production on the Property only. It is
the NEWCO's sole responsibility to raise the funding or financing
requirements of the Property.
3.2 Ownership of NEWCO at formation would be Sixty Percent (60%) the Grantee
and Forty Percent (40%) AMIC. Pursuant to Clause 2.2, the Grantee may
assign all or part of its Sixty Percent (60%) interest to the Grantee's
affiliates, including but not limited to the Grantee's subsidiaries or
branch offices that are registered under Philippine law,
3.3 Within the limits prescribed by Philippine law, NEWCO will be led by the
Grantee with Board membership representing all parties and reflecting their
respective percentage interest or equity at the time.
3.4 NEWCO's structure, share base and market capital will be established at the
time of formation based on the value of the Property.
3.5 Any Grantee "Under Expenditure" from the Earn in Period will be the
Grantee's funding responsibility prior to any NEWCO financing for the
Property as per Clause 2.9. The Grantee undertakes to assist AMIC in its
funding and financing requirements for the Joint Venture / NEWCO by:
3.5.1 Approaching banks or similar financiers to obtain debt finance on the
basis of presenting a signed-off Feasibility Study; and
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Memorandum of Agreement among OYM, AMIC and JABEL dated 23 November 2006
3.5.2 Introducing AMIC to a network of brokers or investors to assist AMIC
in its own capital raising during the term of the contract (i.e.
IPO's, Private placements, SPV's etc.)
3.6 AMIC may, subject to NEWCO board approval and on commercially competitive
terms or fair market price as determined by an independent appraiser
appointed by the NEWCO board, use its equipment-inventory/services to
finance its equity participation,
3.7 If AMIC is unable to secure its full share of funding, the Grantee would
provide AMIC with loans for any balance on the following terms:
3.7.1 Interest rate to AMIC will be computed at One Hundred Ten Percent
(110%) per annum of the offered rate to the Grantee, which is LIBOR
(or equivalent) plus the agreed rate.
3.7.2 Loan amount secured by AMIC's percentage holding in NEWCO;
3.7.3 Loan will be recouped through a minimum of Seventy Percent (75%) of
AMIC's profit share from NEWCO.
3.8 The controlling interest in the joint venture shall nominate a Manager in
the operation of the NEWCO with the latter's interest as the paramount
consideration. All decisions with respect to the JV/NEWCO will be decided
by a simple majority vote with each party having a vote equal to its
interest at the time subject to the applicable laws and statutes of the
Republic of the Philippines.
3.9 Work plans and budgets shall be subject to the review and approval of all
parties. In case the parties disagree over work plans or budgets, the
parties shall resolve this disagreement amicably, through a mechanism that
will be detailed in a further agreement among the parties.
3.10 If either party declines or fails to contribute their respective portions
of funds to an approved work plan and budget, then the defaulting party is
automatically diluted pro rata.
3.11 Profits of NEWCO shall be distributed accordingly and in proportion to
their respective shareholdings.
4.0 MILESTONE PAYMENTS
4.1 Milestones payments, as defined in Clause 4.3, are not part of the
Grantee's vesting requirements as per Clause 2 above, but are to recognize
milestone deposit(s) size achievements from the Property. Milestone
payments shall be the sole responsibility of the Grantee and shall not
affect the profit sharing scheme of the parties in the NEWCO. All bonuses
and milestone payments in the Grantee shares shall, subject to regulatory
approval, be computed based on the Five-day Average Share Price at the time
of issue_
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Memorandum of Agreement among OYM, AMIC and JABEL dated 23 November 2006
4.2 At the option of AMIC only, all milestone payments in the form of cash
payments or cash equivalents may be converted to OYM shares. At the option
of the Grantee only and if AMIC so decides to accept, all issues of shares
may be converted to cash. For conversion purposes, the share prices shall
be computed using the Five-day Average Share Price at the time of
conversion.
4.3 On defining a cumulative mineral reserve of Two Million (2,000,000) ounces
of gold or gold equivalents or achieving a consistent production rate of
Two Thousand (2,000) TPD (whichever comes first); and successively
thereafter, for every additional increment of Two Million (2,000,000)
ounces of gold mineral reserve or gold equivalents or for every additional
increment of Two Thousand (2,000) TPD in the production rate at any given
time (whichever comes first), the Grantee shall;
4.3.1 At no extra cost to AMIC, cause to be issued Two Million (2,000,000)
ordinary OYM shares, or OYM shares worth Five Million US Dollars
(US$5,000,000) at the time of issue, whichever is of lower value at
the time of issue; and
4.3.2 Pay to AMIC the amount of Two Million US Dollars (US$ 2,000,000) in
cash.
For the avoidance of doubt, if a payment is made by the Grantee pursuant to
either an increment of Two Million (2,000,000) ounces of gold or gold
equivalents or achieving a consistent production rate of Two Thousand
(2,000) TPD, then no payment shall be due on the achievement of the
corresponding alternative increment.
The foregoing may be illustrated as follows: if a gold reserve of Two
Million (2,000,000) ounces is defined, the Grantee shall make a milestone
payment as described above. Subsequently, if a production rate of Two
Thousand (2,000) TPD is reached, no milestone payment will be made, as the
Two Thousand (2,000) TPD is an alternative increment of the Two Million
(2,000,000) ounces reserve. Later on, if a production rate of Four Thousand
(4,000) TPD is reached, another milestone payment will be made. Still
further on, if a gold reserve totaling Four Million (4,000,000) ounces is
defined, the Grantee will make no milestone payment, as Four Million
(4,000,000) ounces reserve is an alternative increment of Four Thousand
(4,000) TPD.
5.0 TENEMENT HOLDER AND UNDERLYING ROYALTY
5.1 The title of the Property remains in the name of JABEL. JABEL shall upon
exercise of the Option hold the same for the benefit of NEWCO.
5.2 JABEL shall not sell, cede, transfer, assign, convey, dispose, encumber,
mortgage, pledge or create any security interest over the Property or any
part of it without the consent of NEWCO.
5.3.1 In case NEWCO seeks to obtain project financing for the Property, AMIC and
JABEL shall, upon request of NEWCO, allow the creation of a security
interest over the Property in favor of
PAGE 8
Memorandum of Agreement among OYM, AMIC and JABEL dated 23 November 2006
the lender. AMIC and JABEL shall execute all documents and obtain all
approvals from the government or third parties that would be necessary or
useful to create this security interest.
5.4 AMIC and JABEL shall execute an operating agreement in favor of NEWCO
and/or any other documents necessary or useful to implement NEWCO's
exploration, development and production rights over the Property. AMIC and
JABEL consents to the registration with the MGB and other government
agencies of (i) this MOA and/or the operating agreement; (ii) such other
documents that implement or record NEWCO's rights under Clause 5 of this
MOA; and (iii) any other caveat or similar encumbrance over the Property in
favour of the Grantee or NEWCO, as appropriate for the implementation of
Clause 5 of this MOA,
5.5 Upon the Grantee's formal decision to commence with mine development under
Clause 2.9, and the formation of NEWCO under Clause 3.1, NEWCO shall, as
soon as possible, be added to the titles of the Property as an explicit
co-owner of the Property. Specifically, NEWCO shall become a co-holder of
the MPSA and a co-applicant of the two-kilometer extension under EXPA#085.
If EXPA#085 becomes an approved tenement, then NEWCO shall become a
co-holder of the approved two-kilometer extension under EXPA#085. JABEL
must execute whatever documents necessary to amend the titles of the
Property so as to make NEWCO an explicit co-owner of the Property.
5.6 After NEWCO becomes a co-owner of the Property, if the development of the
Property does not proceed due to NEWCO's bad faith, inaction or negligence,
then NEWCO may be removed as a co-owner from the titles to the Property.
This clause does not apply if NEWCO is making diligent efforts to develop
the Property and such development is hindered by factors beyond NEWCO's
reasonable control, including but not limited to acts of God, war, civil
disturbance, disasters, orders of government agencies and other
extraordinary situations.
5.7 It is hereby agreed that the Royalty shall be paid to JABEL. The initial
payment shall be made one (1) year after full commercial production, and
subsequent royalties shall be paid every year thereafter.
5.8 The Grantee shall have the right of first refusal to purchase the Royalty
if intended to be sold to any third party during the life of the Formal
Agreement.
6.0 MISCELLANEOUS
6.1 The Formal Agreement shall be consistent with the details, terms and
conditions set forth in this MOA.
6.2 Before the signing of the Formal Agreement, OYM undertakes to register a
legal entity with the Securities Exchange Commission that is qualified to
enter into the Formal Agreement.
6.3 Violation of any of the terms and conditions set forth herein may be a
ground for the rescission or revocation of this MOA. Thereafter, the
provisions of Clause 2.5 shall apply.
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Memorandum of Agreement among OYM, AMIC and JABEL dated 23 November 2006
6.4 As to each party, this MOA shall take effect upon the date of issuance of a
resolution of that party's Board of Directors, which approves the MOA, the
authority of the signatory to the MOA and authorizes all acts necessary to
implement the MOA. Each party shall present to the other parties, not later
than seven (7) days from the signing of this MOA, certifications of the
foregoing board resolutions ("Certification"). The Certifications shall be
executed by the corporate secretaries of each party.
6.4 This Agreement shall be construed in accordance with the laws of the
Philippines. Any dispute or claim arising from or relating to the MOA shall
be finally settled by compulsory arbitration in Singapore, in the English
language, in accordance with the UNCITRAL Arbitration Rules.
6.5 After the signing of this MOA, the parties shall agree upon the contents of
a joint press release relating to this MOA.
SIGNED:
For ABRA MINING & INDUSTRIAL For OLYMPUS PACIFIC MINERALS, INC by:
CORPORATION by:
/s/ Xxxxxxxx X. Xxxxx /s/ Xxxxx X. Xxxx
------------------------------------- ----------------------------------------
XXXXXXXX X. XXXXX XXXXX X. XXXX
President & CEO VP Exploration
For JABEL CORPORATION by:
/s/ Xxxxx X. Xxxxx
-------------------------
XXXXX X. XXXXX
President
SIGNED IN THE PRESENCE OF:
1. 2.
---------------------------------- -------------------------------------
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Memorandum of Agreement among OYM, AMIC and JABEL dated 23 November 2006
ACKNOWLEDGMENT
Republic of the Philippines
City of } S. S,
BEFORE ME, a. Notary Public for and in the above jurisdiction personally
appeared the following persons:
Name CTC No./Passnort No. ISSUED ON/AT
----------------- -------------------- ---------------------------
Xxxxxxxx X. Xxxxx 12518498 9 January 2006, Quezon City
Xxxxx X. Xxxx BD114200 15 February 0000
Xxxxxxxxxxx, Xxx Xxxxxxxxx,
Xxxxxx
Xxxxx X. Xxxxx 12518500 9 January 2006, Quezon City
who confirmed before me that they are the same persons who executed the
foregoing Memorandum of Agreement consisting of 14 pages, including the page on
which this Acknowledgment is written and the attached Schedules. They
acknowledged to me that the same is their voluntary act and that it is
authorized by the corporations that they represent.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal
this 23/11/2006.
/s/ Atty Xxxxxxx Xxxx
-------------------------------------
ATTY XXXXXXX XXXX
NOTARY PUBLIC
Doc. No. 61 ; UNTIL DECEMBER 31f 2407
Page Xx. 00 XXX XX. 000000;0/0/00; Zambales
Book No. 12 ; PTR 6. A-4572342;1/6/06/Manila
Series of 2006. ROLL NO.2 5564/ TIN NO.000-000-000
PAGE 11
Memorandum of Agreement among OYM, AMIC and JABEL dated 23 November 2006
SCHEDULE B
PROPERTY collectively consists of:
1. Capcapo Property: consisting of 756 Hectares of mining tenement under MPSA
situated in Sitio Capcapo, Xxxxxx-Xxxx, Xxxx, Philippines.
2. Capcapo extension: consisting of more or less three thousand five hundred
(3,500) hectares of mining tenement under EXPA #085 forming a two kilometre
perimeter around Capcapo provided that no other existing mining tenements
shall be overlapped.
Co-ordinates of the Property are as stated on the attached map (Schedule B) and
listed below:
Station/Corner Latitudes Longitudes
----------------------------------------------------------
#1 17(degree)38'35" 120(degree)53'00"
#2 17(degree)37'40" 124(degree)54'30"
#3 17(degree)37'x0" 120(degree)54'30"
#4 17(degree)37'00" 120(degree)55'20"
#5 17(degree)37'12.5" 120(degree)55'22. 5"
#6 17(degree)36'58" 120(degree)55'57"
#7 17(degree)34'00" 120(degree)54'10"
#8 17(degree)34'00" 120(degree)52'30"
#9 17(degree)35'00" 120(degree)50'50"
OTHER TENEMENTS collectively consists of
1. PATOK under MPSA # 141-99-CAR.
2. EXPA # 085
PAGE 12
Memorandum of Agreement among OYM, AMIC and JABEL dated 23 November 2006
SCHEDULE C
WORK PROGRAM (SUBJECT TO APPROVAL AND REVISION BY THE JV PARTIES)
The Detailed Work Program for the Three Phases will be worked out by the
technical committee of the JV.
A. PHASE 1
WORK COMMITMENT
a. Geological field work
b. Geophysical surveys including ground magnetic surveys and other
method techniques which are deemed appropriate
c. Geochem surveys which may include detailed soil, stream
sediments, ridge spur, etc.
d. Update of surface mapping
e. Completion of due diligence
f. Scoping Study
g. Identify drilling targets
h Exploratory drilling and tunnelling.
i. Preliminary Metallurgical Test Work of representative ore types
B. PHASE 2
WORK COMMITMENT
Expenditure in this phase is anticipated to primarily go towards drilling
programs on the MPSA to dileneate a potentially economic viable resource.
Included in this phase will be detailed metallurgical testing.
C. PHASE 3.
WORK COMMITMENT
Expenditure in this Phase are anticipated to be expended largely on
Feasibility Study supporting work programs such as:
a. Detailed Drilling for additional ore reserve;
b. Mine design;
c. Plant design and infrastructure requirements;
d. Independent expert reports;
e. Financial modelling.
PAGE 13
Memorandum of Agreement among OYM, AMIC and JABEL dated 23 November 2006
SUPPLEMENT TO MEMORANDUM OF AGREEMENT
This Supplement to the Memorandum of Agreement ("Supplement") is made this 23rd
day of November, 0000 Xxxxxx Xxxx, Xxxxx Xxxxxx, Xxxxxxxxxxx, between:
1. ABRA MINING AND INUSTRIAL CORPORATION, a corporation organized under the
laws of the Republic of the Philippines with its business address at 0xx
Xxxxx, Xxxxx Xxxxxx Xxxx, 000 Xxxx Xxxxxx, Xxxxxx Xxxx and represented by
Xx. Xxxxxxxx X. Xxxxx President ("AMIC")
2. OLYMPUS PACIFIC MINERALS INC. with its office address at Xxxxx 000, 00 Xxxx
Xxxxxx Xxxx Xxxxxxx, XX X0X 0X0 Xxxxxx and represented by Xx. Xxxxx X.
Xxxx, Vice-President, Exploration ("OYM")
3. JABEL CORPORATION a corporation organized and existing under the laws of
the Republic of the Philippines with address at Xx. 00 Xxxx Xxxxx Xxxxx,
Xxxxxx, Xxxxxx Xxxx and represented by Xxxxx X. Xxxxx, President ("Jabel")
BACKGROUND
A. The parties have entered into a Memorandum of Agreement providing that the
Grantee shall acquire the option to earn a 60% interest in AMIC Capcapo
mining tenement located in the Municipality of Baay-Licuaan, Province of
Abra, Philippines, and that the parties shall form a joint venture company
("NEWCO") to fund or finance and manage future exploration, development and
production on the Property only.
B. The parties wish to enter into an agreement with respect to the appointment
of a manager and of technical consultants, advisors and subcontractors to
the NEWCO.
DEFINITIONS
In this Supplement, the following words and phrases have the meanings set out
after them:
"CAPCAPO" means Sitio Capcapo, Xxxxxx-Xxxx, Xxxx, Philippines;
"FORMAL AGREEMENT" means a more formal and comprehensive farm-in and
incorporated joint venture agreements embodying the terms hereof to be prepared
and signed between the parties;
"GRANTEE" means OYM and Philippine nationals associated with OYM;
"MANAGER" means an entity qualified under Philippine law to operate NEWCO;
PAGE 14
Memorandum of Agreement among OYM, AMIC and JABEL dated 23 November 2006
"MOA" means the Memorandum of Agreement among AMIC, Jabel and the Grantee dated
- November 23, 2006
"NEWCO" means the joint venture company formed pursuant to clause 1.1;
"PROPERTY" means the 756 Hectares of Mining Tenement under the MPSA situated in
Capcapo and more or less three thousand five hundred (3,500) hectares of mining
tenement under EXPA #085, forming a two kilometre perimeter around the Capcapo
extension, more particularly described in Schedules A and B of the MOA;
INTERPRETATION
Every thing expressed or implied in this Supplement that involves more than one
person binds and benefits those people jointly and severally. A reference to a
person includes any other entity or association recognised by law and the
reverse, Terms used in this Supplement have the same meaning as ascribed to them
in the MOA.
1.0 APPOINTMENT OF MANAGER
1.1 Once the Grantee has obtained a Sixty Percent (60%) interest in the
Property, as provided in the MOA, a new joint venture private company
("NEWCO") will be formed to fund or finance and manage future exploration,
development and production on the Property only. It is the NEWCO's sole
responsibility to raise the funding or financing requirements of the
Property.
1.2 The controlling interest of NEWCO shall nominate a Manager to operate the
NEWCO with the latter's interest as the paramount consideration. All
decisions with respect to the NEWCO will be decided by a simple majority
vote with each party having a vote equal to its interest at the time
subject to the applicable laws and statutes of the Republic of the
Philippines.
1.3 It is the intent of the Parties that the Manager will not lose or profit by
reason of its duties and responsibilities as Manager. The Manager will be
entitled to charge a premium service fee on all approved expenditures as
below:
1.3.1 Exploration Phase - 10% on all approved expenditures; and
1.3.2 Capital Equipment, Construction and Production Phases - 3% on all
approved expenditures.
1.4 The Grantee may appoint technical consultants, advisors and subcontractors
to the operations of NEWCO to render scientific, engineering, geological,
environmental and other technical services to the NEWCO. The Grantee has
the option to act as NEWCO's technical consultant and/or advisor.
1.5 If due to restrictions under Philippine law, it becomes necessary for the
parties to vary their specific arrangement with the Manager, the parties
agree in good faith to execute such
PAGE 15
Memorandum of Agreement among OYM, AMIC and JABEL dated 23 November 2006
documents or take such actions as would be necessary to render the
managerial arrangement in compliance with Philippine law, while remaining
as close as possible to the original intent of the parties.
1.6 The service fee under clause 1.3 shall be subject to the review and
approval of the parties. In case the parties disagree over the service fee,
the parties shall resolve this dispute amicably, through a mechanism that
will be detailed by further agreement among the parties.
2.0 MISCELLANEOUS
2.1 The Formal Agreement shall be consistent with the details, terms and
conditions set forth in this Supplement.
2.2 As to each party, this Supplement shall take effect upon the date of
issuance of a resolution of that party's Board of Directors, which approves
the Supplement, the authority of the signatory to the Supplement and
authorizes all acts necessary to implement the Supplement. Each party shall
present to the other parties, not later than seven (7) days from the
signing of this Supplement, certifications of the foregoing board
resolutions ("Certification"). The Certifications shall be executed by the
corporate secretaries of each party.
2.3 This Supplement shall be construed in accordance with the laws of the
Philippines. Any dispute or claim arising from or relating to the
Supplement shall be finally settled by compulsory arbitration in Singapore,
in the English language and in accordance with the UNCITRAL Arbitration
Rules.
SIGNED:
For ABRA MINING & INDUSTRIAL For OLYMPUS PACIFIC MINERALS,
CORPORATION by: INC by:
/s/ Xxxxxxxx X. Xxxxx
------------------------------------- ----------------------------------------
XXXXXXXX X. XXXXX XXXXX X. XXXX
President & CEO VP Exploration
For JABEL CORPORATION by:
/s/ Xxxxx X. Xxxxx
-------------------------
XXXXX X. XXXXX
President
PAGE 16
Memorandum of Agreement among OYM, AMIC and JABEL dated 23 November 2006
ACKNOWLEDGMENT
Republic of the Philippines }
Quezon City } S.S.
BEFORE ME, a Notary Public for and in the above jurisdiction personally appeared
the following persons:
Name CTC No./Passport No. Issued on/at
-------------------------------------------------------------------------
Xxxxxxxx X. Xxxxx 12518498 January 09, 2006 / Quezon City
Xxxxx X. Xxxx BD114200 February 15, 2005 / Canada
Expiry Date: February 15, 2010
Canadian
January 09, 2006 / Quezon City
Xxxxx X. Xxxxx 12518500
who confirmed before me that they are the same persons who executed the
foregoing Supplement to the Memorandum of Agreement consisting of [4] pages,
including the page on which this Acknowledgment is written. They acknowledged to
me that the same is their voluntary act and that it is authorized by the
corporations that they represent.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal
this 23rd day of November 2006_
ATTY XXXXXXX X. XXXX
ROLL NO.26564/ TIN NO.000-000-000
Doc. No. 62;
Page No. 13
Book No. 12 ;
Series of 2006.
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Memorandum of Agreement among OYM, AMIC and JABEL dated 23 November 2006
