Exhibit 10.2.4 (Translated from Portuguese)
Option Agreement
By this present Agreement entered into by, on the one side,
Xxxxxx xx Xxxxx Xxxxx, Brazilian, single, miner prospector, bearer of ID number
RG 75528/SSP-RO, and Taxpayer's Registry no. CPF 000.000.000-00, with address at
Xx. Xx. Xxxx xx Xxxxxxxx, xx. 000, Xxxxx Postal 034 - Bairro Centro, in the city
of Itaituba, PA, CEP68181-970, hereinafter referred to as LICENSEE; and on the
other side,
AURORA GOLD MINERACAO LTDA, a company registered with CNPJ under no.
07.763.340/0001-50, with its Office at Xx. xxx Xxxxxxxx, xx 000, xxxxx 0, xx.
215-A, parte, CEP: 22640-100, Barra da Tijuca, Rio de Janeiro, RJ, in this act
represented by its attorney Xxxx Xxxxxxxx Xxxxxxxxxx xx Xxxxxxx, Brazilian,
single, lawyer, registered at the Brazilian Bar Association (RJ) under no. 80412
and registered at CPF/MF under no. 000.000.000-00, hereinafter referred to as
AURORA,
WHEREAS:
A. The LICENSEE is the titleholder of certain mineral rights in areas located in
the region named Garimpo do Novo Porto, Municipality of Itaituba, state of Para,
comprised of Requests for Mining Permit (PLG) and Survey Request specified as
follows:
BLOCK 1 according to annex A-1 and A2 of this present instrument which covers:
DNPM, no. 852.875/94 to 852.906/94 Request for PLG of Xxxxxx xx Xxxxx Xxxxx;
DNPM, no. 852.908/94 to 852.912/94 Request for PLG of Xxxxxx xx Xxxxx Xxxxx;
DNPM, no. 852.914/94 to 852.918/94 Request for PLG of Xxxxxx xx Xxxxx Xxxxx;
DNPM, no. 852.920/94 to 852.924/94 Request for PLG of Xxxxxx xx Xxxxx Xxxxx;
DNPM, no. 852.926/94 to 852.929/94 Request for PLG of Xxxxxx xx Xxxxx Xxxxx;
DNPM, no. 852.931/94 to 852.934/94 Request for PLG of Xxxxxx xx Xxxxx Xxxxx;
DNPM, no. 852.936/94 to 852.942/94 Request for PLG of Xxxxxx xx Xxxxx Xxxxx;
DNPM, no. 852.944/94 to 852.948/94 Request for PLG of Xxxxxx xx Xxxxx Xxxxx;
DNPM, no. 852.957/94 to 852.961/94 Request for PLG of Xxxxxx xx Xxxxx Xxxxx;
DNPM, no. 852.963/94 to 852.967/94 Request for PLG of Xxxxxx xx Xxxxx Xxxxx;
DNPM, no. 852.969/94 to 852.973/94 Request for PLG of Xxxxxx xx Xxxxx Xxxxx;
DNPM, no. 852.975/94 to 852.979/94 Request for PLG of Xxxxxx xx Xxxxx Xxxxx;
DNPM, no. 852.981/94 to 852.985/94 Request for PLG of Xxxxxx xx Xxxxx Xxxxx;
DNPM, no. 852.987/94 to 852.991/94 Request for PLG of Xxxxxx xx Xxxxx Xxxxx;
DNPM, no. 852.993/94 to 853.000/94 Request for PLG of Xxxxxx xx Xxxxx Xxxxx;
DNPM, no. 850.567/94 Request for Survey of Xxxxxx xx Xxxxx Xxxxx;
B. The LICENSEE is also the owner of part of the possession of the property
which covers the mineral rights referred to in item A above, and, for a better
identification of its limits, a location plant of the property is attached to
this present instrument as annex A-3.
C. The LICENSEE has been exploring in a rudimentary and continuous manner the
areas of "Garimpo Novo Porto", and is looking for an interested company with
technology and resources to
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survey, explore and make economic use of the gold mineral reserves which may
eventually exist therein.
D. The LICENSEE signed and celebrated a Memorandum of Understanding on
05SEP2005, hereinafter referred to as "MOU", whereby the LICENSEE allowed Supply
Consult, a company with its Head Office in Germany at Karolinen Xxxxx 0,
Xxxxxxxx, hereinafter referred to as "SUPPLY", the rights to survey and acquire
the mineral rights of "Garimpo Novo Porto", against payments, calculated and due
under the terms and conditions indicated and declared therein;
E. AURORA received from Supply the information regarding the potential primary
gold in "Garimpo Novo Porto" and believes possible the existence of primary
minerals and, therefore, is interested in acquiring the pertinent mineral
rights;
F. Supply resolved to transfer to AURORA the rights which have been conferred
upon Supply by the LICENSEE in the MOU, which the latter agrees to;
Therefore, AURORA and LICENSEE agree to execute a definitive agreement whereby
the conditions, amounts, deadlines and other clauses and conditions shall be
established and which shall hereon be in force between the parties hereby
present, and in this regard, the parties, AURORA and LICENSEE, agree to the
following:
I. ASSESSMENT OF GARIMPO NOVO PORTO
1. The LICENSEE, hereby and in the best form of the law, permits AURORA to
execute in "Garimpo Novo Porto", for a period of 41 (forty-one) months as from
the date of this agreement, assessment work and geological survey which it deems
necessary to ascertain the existence of possible primary deposits which may be
economically explored and, consequently its interest in definitively acquiring
or not the respective mineral rights and the properties in question; (the
"Assessment").
2. It shall be up to AURORA to determine the nature, scope and extension of the
survey works, and thus, all costs and expenses incurred therein are of its
exclusive responsibility.
3. For the purposes of assuring a good execution of the assessment, the
LICENSEE:
a) Grants AURORA the right to occupy any of the surface areas of "Garimpo Novo
Porto" which possession he declares to have, free of claims from third parties,
and AURORA is assured that in case it cannot exercise its rights due to eventual
problems with above ground occupiers, it is hereby authorized by the LICENSEE to
take legal action in this regard, and eventual expenses or compensations paid to
them shall be deducted from the payments stipulated herein.
b) Authorizes AURORA to use the landing strip for airplanes and, if needed, to
alter its outline and access roads, facilities and other improvements therein
existing, and in this regard the parties shall sign a term of responsibility
and/or a "loan for use".
c) Shall prepare a survey of the persons involved in the mining works at
"Garimpo Novo Porto" and will present to AURORA a complete report within 90
(ninety) days from AURORA's request,
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but AURORA is assured that in case it cannot exercise its rights due to eventual
problems with miners, it is hereby authorized by the LICENSEE to take legal
action in this regard, and eventual expenses or compensations paid to them shall
be deducted from the payments stipulated herein.
d) AURORA acknowledges that the above ground areas of "Garimpo Novo Porto" do
not include the totality of the mineral rights referred to in BLOCK I,
therefore, in case AURORA cannot exercise its rights due to eventual problems
with ground occupiers, the actions resulting thereof are the responsibility of
AURORA, although the LICENSEE shall assist in whatever possible.
e) in the surface areas of "Garimpo Novo Porto" included in the mineral rights
referred to in BLOCK I, the LICENSEE may not have its portions deducted under
the terms of item c above, since at any time it can deliver the same areas to
AURORA free and unencumbered without miners or ground occupiers.
4. The LICENSEE agrees to transfer the mineral rights in "Garimpo Novo Porto"
referred to in the survey requests to AURORA GOLD MINERACAO LTDA., as soon as it
is incorporated; meanwhile, the Requests for Mining Permission shall be
transferred to XXXX XXXXX XXXXX FERRAZ, Brazilian, married, businesswoman,
registered with CPF under No. 000.000.000-00, ID number RG 1816002 IFP/RJ, with
address at Xxx Xxxxx xx Xxxxxx, xx. 000, xxxx 00, XX, XXX 22753-040, under the
terms of annex B 1 and 2, and the transferee, in the condition of depository,
shall be the titleholder until when these rights can be transferred to AURORA,
according to clause 10, item b below, with the mineral rights to be kept in
order and good condition until they can be assigned to AURORA or eventually
returned to the LICENSEE, all this in the manner hereunder stipulated. In
consideration for the authorization hereby granted to proceed with the
Assessment of "Garimpo Novo Porto" and in terms of price, AURORA shall pay to
the LICENSEE individually for the assignment of the mineral rights and rights of
possession over their surface areas according to items A and B above:
a) US$ 2,500.00 (two thousand five hundred dollars), by 25 DEC 05, after the
signing of this instrument;
b) US$ 10,000.00 (ten thousand dollars) on 15 JAN 2006, provided AURORA
confirms the mineral rights have priority and are in order and duly registered
without any fault or pending issue which affect them negatively;
c) US$ 37,500.00 (thirty-seven thousand five hundred dollars) on 30 MAY
2006, and provided that the approval of the assignments has been published at
this time for the totality of the mineral rights. In the absence of such facts,
and within the referred period, the above-mentioned payment is to be suspended
and shall be paid within 5 (five) days upon total compliance with such
stipulations;
d) US$ 50,000.00 (fifty thousand dollars) on 30 MAY 2007, and provided that
the transformation of the Requests for Mining Permission into survey licenses
have been published for the totality of this kind of mineral rights referred to
herein. In the absence of such facts, and within the referred period, the
above-mentioned payment is to be suspended in 50% (fifty percent of its amount)
which shall be paid within 5 (five) days upon total compliance with such
stipulations;
e) US$75,000.00 (seventy-five thousand dollars) on 30 MAY 2008, or in twelve
months against the payment stipulated in item d above, whichever occurs last.
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4.1 As complement to the price, AURORA shall also pay to the LICENSEE the
sum of U$1,850,000.00 (one million eight hundred and fifty thousand dollars) on
30MAY2009 or in 12 (twelve) months from the payment stipulated in item "e"
above, whichever occurs last, in case it wishes to opt for keeping Block1 under
its name.
4.2 Amounts due, Conversion and Calculation: On the original due date of
each of the portions, "4(a) to 4 (e)" , each amount shall be converted from US
dollars to Reals according to the exchange rate obtained by AURORA, when
changing the currency 30 (thirty) days prior to the payment, or, in its absence,
to the average of the current commercial buying and selling exchange rates
obtained on the last day immediately prior to the date of the referred payment,
as informed in the newspaper "Gazeta Mercantil" or in its absence, in another
major daily newspaper.
4.2.1 The payment of the amounts shall be made:
4.2.1.1 Personally, or via deposit in bank account in Itaituba, specified as
follows, or any other which the LICENSEE may indicate to AURORA, with the
amounts referring to in "4(a) to 4(e)" to be deposited in the LICENSEE's
account:
+ Xxxxxx xx Xxxxx Xxxxx - XXXXX XXXXXXXX X/X - Xxxxxx 0000 - XXXXXXXX-XX.
SAVINGS ACCOUNT: 0000000-0 IN THE NAME OF "SILVANETE XXXXX XX XXXXX, WITH
ADDRESS AT TRAVESSA XXXX XXXXXX - 650-ITAITUBA, PARA.
4.2.1.2 The above bank account may only be changed up to the 5th business
day immediately prior to the date of payment.
4.2.1.3 Specially in view of the fact that AURORA is being incorporated, the
payment of instalment 4(a) may be made with a remittance from overseas by
Supply;
4.3 The above payments include indemnities and rentals payable to the ground
occupiers of the property in which AURORA conducts its survey; in case any
occupier other than the LICENSEE is found in those areas, the LICENSEE, in view
of the Block in question, shall obtain for AURORA access to survey and the right
to mining without onus; on the contrary, AURORA may take legal action in this
regard and deduct all and any expense which it may incur from the above referred
payments.
II. TEMPORARY SUSPENSION
5. If for any reason beyond its control, including, but not limited to, the
invasion of "Garimpo Novo Porto" by third parties and impossibility of access to
same due to resistance of its proprietors and/or occupants, AURORA is obstructed
from executing mineral research works therein, it shall have the right to
suspend work for the period of time which the obstruction lasts.
6. Should this occur, AURORA shall immediately: (i) notify the facts to LICENSEE
and (ii) adopt, if the nature of the circumstance so allow and with the
cooperation of the LICENSEE, including the provisions of item 3 above, all
measures within its reach to overcome such obstruction and resume work.
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7. During the period of suspension of works, the deadlines for conclusion of the
Assessment and for payment of the installments of the price referred to in
clauses 4(c) to 4(e) shall be extended by a period equal to the suspension.
III. COMPATIBILITY BETWEEN SURVEY WORKS AND MINING WORKS
8. During the geological assessment stage of the "Garimpo Novo Porto" referred
to in Chapter I above, the LICENSEE may develop mining works therein, provided
such mining work does not interfere with the survey activities by AURORA and
there is no increase in the production fronts (volume of gold recovered)
previously developed and, further:
a) its object is exclusively extractable gold; gold prospecting, washing and
digging.
b) it is limited to open sky works;
c) it is limited to a depth not exceeding 25 (twenty-five) metres of the surface
quota
d) does not employ more workers than those involved to date.
IV. THE IMPROVEMENT OF THE MINERAL RIGHTS
9. The parties are aware that part of the mineral rights held by the LICENSEE to
pursue what is stipulated in this instrument, may be converted into survey
licenses, that is, they will be the object of requests for survey license, and
the requests for mining permits on the "Garimpo Novo Porto" as listed in item A
above may be extinct or discontinued.
10. It is the undertaking of all Parties that, jointly, they will work to obtain
as soon as possible:
a. The issue of environmental licences and the proper assignment of mining
permits for conversion into survey licenses, issue of survey licenses, for
"Garimpo Novo Porto" for the areas object of the requests still under
examination by DNPM;
b. The proper transformation of the requests for mining permits already
assigned and those to be assigned into authorization of mineral survey according
to current legislation.
11. For the purposes contained in clause 10 above, the LICENSEE shall give
representation powers to AURORA and its lawyer, in the form of annex C1 and 2,
before DNPM and the environmental agency of the state of Para, which commits not
to object, and to facilitate regarding the transfer, conversion, assent,
regarding said mineral rights, and the survey work done by and for AURORA or by
and for whomever it indicates, without any onus.
12. The expenses incurred for the purposes of this Chapter IV, including, among
other things, obtaining environmental licences, payment of taxes and fess, will
be for AURORA's account.
V. ANTECIPATED RESCISION OF THE AGREEMENT
13. AURORA shall have the right, with a notice addressed to the LICENSEE, to
denounce this Agreement and consider it terminated in all or in part, if:
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a) The Survey Requests and/or Requests for Mining Permits (PLG's) are not
granted or if the conversion of said PLG's into authorization(s) are denied by
DNPM;
b) The DNPM refuses to approve the assignment of mineral rights in its favour as
referred to in Chapter I above;
c) At its exclusive discretion, the results of the geological assessment, even
if partial, indicate the inexistence or insufficiency of gold reserve for
economical industrial use.
13.1 Occurring either of the situations above, the agreement shall be
immediately deemed rescinded, and the parties shall be free from the
undertakings yet to be due, which both parties reciprocally hereby undertook,
and none of the party is entitled to any indemnity or compensation of any nature
by virtue of the resulting rescission.
13.2 Still in those situations, AURORA:
a) shall not claim reimbursement of any amounts previously paid to the LICENSEE
or spent in the course of its survey works;
b) shall be dispensed from effecting any payment still to be due,
c) Shall withdraw from the surface areas of "Garimpo Novo Porto", returning the
mineral rights
assigned in the state they were in back to the LICENSEE;
d) shall, within 30 (thirty) days from the date of notice of rescission and
independently of any payment, supply to the LICENSEE the technical information
generated in the course of its survey works.
VI. RETURN OF THE MINERAL RIGHTS
14. At any time during the assessment period, if the results of the assessment
are unfavourable, and the measures referred to in Chapter I above are
unsuccessful, AURORA may notify the LICENSEE personally or via AR at the address
indicated, so that it receives in return the rights to the mining permits and/or
survey authorizations referred to herein, indicating the place and date for the
LICENSEE, or whomever it indicates, to appear and receive back the respective
rights, and in case of absence, to be aware to appear in the same place within
48 hours of the date initially indicated by AURORA.
14.1 In case the LICENSEE, after 90 days from the notification, has not done so,
that is, has not provided the required documentation in this regard, and
presented itself at the office of AURORA for such purpose, AURORA may dispose of
those rights as it deems fit, giving up or assigning to third parties.
14.2 AUORA is obliged to return the mining rights and other possessions (if
these have been previously given) in perfect condition, that is, valid, to the
LICENSEE, without any cost to the LICENSEE. The non-compliance with this item
may subject AURORA to respond for loss and damages. And other penalties provided
for in the Brazilian legislation.
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VII. OTHER OBLIGATIONS
15. As provided for in this agreement, the LICENSEE is obliged to, besides other
obligations undertaken with AURORA,
a) Care for the proper handling of the survey requests and mining permits
and comply adequately with all the requirements which are requested by the
competent authorities regarding the assignment of Permits, obtaining survey
licenses or mining resolutions;
b) Execute the mining works in strict obedience to the pertinent legal and
regulating norms, observing the limitations covered in Chapter III above;
c) Adopt all measures within its reach to guarantee that AURORA may execute
its mineral survey by avoiding or stopping the invasion of "Garimpo Novo Porto"
by third parties;
d) Supply to AURORA, whenever requested, geological data and information
regarding "Garimpo Novo Porto", which have been obtained in the course of the
mining works.
16. As provided for in this agreement, the AURORA is obliged to, besides other
obligations undertaken with AURORA:
a) Follow up with DNPM all processes listed in item A, from the date when
the survey requests and/or assignments, and/or conversions of the mining permits
into survey authorizations were submitted;
b) Care for the proper handling of the requests referred to in item (a)
above and comply, if necessary with the cooperation of the LICENSEE, all the
requirements which are requested by the competent authorities regarding the
assignment of survey authorizations;
c) Effect full payment (i) of all expenses necessary to obtain the
environmental licenses required for the assignment of the survey authorizations
referred to in clause 10 above, and (ii) all taxes and fees necessary for the
assignment of such survey authorizations;
d) Execute mineral survey works in strict compliance with the legal norms
and pertinent regulations;
VIII. GENERAL CONDITIONS
17. IRREVOCABILITY - Except as provided for in clause 13 above, this agreement
is signed in an irrevocable manner, and the LICENSEE is obliged not to alienate
or promise to alienate, in any way or form, not to burden nor abandon the
mineral rights object of this agreement.
18. ASSIGNMENT AND TRANSFER - The LICENSEE hereby agrees and has nothing to
oppose that the rights hereby conferred to AURORA in this agreement may in part
or in whole be transferred, assigned, alienated, sold to third parties at the
exclusive discretion of AURORA, which may also associate with others for the
compliance of this agreement, however, AURORA, in case of assignment,
alienation, sale and or total transfer of the rights hereby conferred, shall
include a clause in this regard, and notify the LICENSEE of its decision.
19. CONFIDENCIALITY - Except where required by law or by the regulations of the
Stock Exchange, the parties shall maintain strict confidentiality of the terms
and conditions of this agreement and shall not disclose to third parties, in any
form, oral or written, information regarding
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the mining works without prior consent in writing from the non-disclosing party.
Each party shall demand from its representatives, employees, consultants and
service providers identical confidentiality agreement.
20. COMMUNICATIONS/CITATIONS - All communications and notices transmitted under
the terms of this agreement are to be made in writing and delivered personally
or transmitted by AR to the addresses indicated in the preamble of this
agreement on to any other place that each of the party indicates, in the form
indicated in this clause and to this effect the present clause is irrevocable,
without any possibility of revocation until all the obligations herein
established have been complied with.
21. AMENDMENTS - Any amendment to this agreement shall be made in writing and
signed by the parties hereby represented.
22. ARBITRATION - The partners elect the Main Court of the city of Belem, State
of Para, to resolve any doubts deriving from this agreement which cannot be
resolved amicably.
IN WITNESS WHEREOF, the parties execute this instrument in 3 (three)
counterparts of identical tenor and form, in the presence of 2 (two) witnesses
below, who also subscribe this instrument.
Belem, December 14, 2005
(Signed) (Signed)
XXXXXX XX XXXXX XXXXX XXXXXX GOLD MINERACAO LTDA.
Witnesses:
1. (Signed) 2. (Signed)
Name: Xxxxxx Xxxxxx Name: Bruna Wandermurem xx Xxxxx
Identity: 07756682-2 SSP-RJ Identity: 20.453.680.9 DIC-RJ
Notary Public seal and stamp authenticating the signature of Xxxxxx xx Xxxxx
Xxxxx
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POWER OF ATTORNEY
Xxxxxx xx Xxxxx Xxxxx, Brazilian, single, miner prospector, bearer of ID number
RG 75528/SSP-RO, and Taxpayer's Registry no. CPF 000.000.000-00, appoints as his
attorney, Xxxx Xxxxxxxx Xxxxxxxxxx xx Xxxxxxx, Brazilian, single; lawyer,
registered with OAB-RJ under no. 80412 and registered at CPF/MF under no.
000.000.000-00, granting him powers to represent him in the condition of
titleholder of certain mineral rights in the location named Garimpo do Novo
Porto, Municipality of Itaituba, state of Para, comprising of Requests for
Mining Permit and Survey Request specified as follows: DNPM, no. 852.875/94 to
852.906/94, 852.908/94 to 852.912/94; 852.914/94 to 852.918/94; 852.920/94 to
852.924/94; 852.926/94 to 852.929/94; 852.931/94 to 852.934/94; 852.936/94 to
852.942/94; 852.944/94 to 852.948/94; 852.957/94 to 852.961/94; 852.963/94 to
852.967/94; 852.969/94 to 852.973/94; 852.975/94 to 852.979/94; 852.981/94 to
852.985/94; 852.987/94 to 852.991/94 and 852.993/94 to 853.000/94, as well as
Survey Request DNPM no. 850.567/053; with ample and general powers to: take all
necessary steps to receive, transfer and assign, whether free or in payment, the
Requests for Mining Permits and the Survey Requests, who may apply whatever is
necessary, including request for transformations of the same requests into
Mineral Research Licenses or agree with the mineral survey on the same areas,
and in this regard, transfer or assign, whether free or not, as well as visit,
and so practice such acts, and further in this regard, contact the National
Department of Mineral Production (DNPM), the Ministry of Mines and Energy, the
Brazilian Institute for Environmental and Renewable Natural Resources, SECTAM,
and any other federal, state, municipal or Federal District agencies, Notary
Public offices, Government Registries in general, with powers also to
sub-establish this Power of Attorney which is valid until 30JUN06.
Itaituba, December 14, 2005
(Signed)
XXXXXX XX XXXXX XXXXX
Notary Public seal and stamp authenticating the signature of Xxxxxx xx Xxxxx
Xxxxx
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