Exhibit 10.2
OPTION AGREEMENT - XxXXXXXXX RIVER
THIS AGREEMENT is dated for reference the 22 day of January, 2002.
BETWEEN:
XXXX XXXXXXXXX
a British Columbia resident with an address at
000-0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
(the "Optionor")
OF THE FIRST PART
AND:
XXXXXX VENTURES, INC.
a Nevada corporation with its registered address at
00 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxx, Xxxxxx 00000
("Xxxxxx")
OF SECOND PART
WHEREAS:
A. The Optionor is the owner of an undivided 100% right, title and
interest in and to mineral claims described in this Agreement;
X. Xxxxxx wishes to acquire the option to acquire a 90% interest in
the Optionor's property on the terms and subject to the conditions
contained in this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises and the mutual covenants and agreements hereinafter contained,
the parties hereto agree as follows:
1. DEFINITIONS
1.1 In this Agreement, the following terms will have the meaning set
forth below:
(A) "Exploration and Development" means any and all activities
comprising or undertaken in connection with the exploration and
development of the Property, the construction of a mine and mining
facilities on or in proximity to the Property and placing the Property
into commercial production;
(B) "Property" means and includes:
(i) the mining claims in the Xxxxxx Lake Mining District of
Yukon Territory listed in Schedule A to this Agreement; and
(ii) all rights and appurtenances pertaining to the mining claims
listed in Schedule A, including all water and water rights, rights of
way, and easements, both recorded and unrecorded, to which the Optionor
is entitled;
(B) "Property Expenditures" means all reasonable and necessary
monies expended on or in connection with Exploration and Development as
determined in accordance with generally accepted accounting principles
including, without limiting the generality of the foregoing:
(iii) the cost of entering upon, surveying, prospecting and
drilling on the Property;
(iv) the cost of any geophysical, geochemical and geological
reports or surveys relating to the Property;
(v) all filing and other fees and charges necessary or
advisable to keep the Property in good standing with any regulatory
authorities having jurisdiction;
(vi) all rentals, royalties, taxes (exclusive of all income taxes
and mining taxes based on income and which are or may be assessed
against any of the parties hereto) and any assessments whatsoever,
whether the same constitute charges on the Property or arise as a result
of the operation thereon;
(vii) the cost, including rent and finance charges, of all
buildings, machinery, tools, appliances and equipment and related
capital items that may be erected, installed and used from time to
time in connection with Exploration and Development;
(viii) the cost of construction and maintenance of camps
required for Exploration and Development;
(ix) the cost of transporting persons, supplies, machinery and
equipment in connection with Exploration and Development;
(x) all wages and salaries of persons engaged in Exploration
and Development and any assessments or levies made under the authority
of any regulatory body having jurisdiction with respect to such persons
or supplying food, lodging and other reasonable needs for such persons;
(xi) all costs of consulting and other engineering services
including report preparation;
(xii) the cost of compliance with all statutes, orders and
regulations respecting environmental reclamation, restoration and
other like work required as a result of conducting Exploration and
Development; and
(xiii) all costs of searching for, digging, working, sampling,
transporting, mining and procuring diamonds, other minerals, ores, and
metals from and out of the Property;
2. OPTION
2.1 The Optionor hereby grants to Xxxxxx the exclusive right and option
to acquire an undivided 90% right, title and interest in and to the
Property (the "Option") for total consideration consisting of cash
payments to the Optionor totaling $2,500 US and the incurrence of
Property Expenditures totaling $25,000 US to be made as follows:
(A) upon execution of this Agreement, the payment to the Optionor
of the sum of $2,500 US, which amount will be refundable pending
delivery of the Geological Report in a form acceptable to Xxxxxx no
later than February 1, 2002;
(B) by June 30, 2003, the incurrence of Property Expenditures in
the amount of $25,000 US;
Upon making the cash payments and Property Expenditures as specified in
Paragraph 2.1, Xxxxxx shall have acquired an undivided 90% right, title
and interest in and to the Property.
This Agreement is an option only and the doing of any act or the making
of any payment by Xxxxxx shall not obligate Xxxxxx to do any further
acts or make any further payments.
3. TRANSFER OF TITLE
3.1 Upon execution of this Agreement, Xxxxxx shall be entitled to
record this Agreement against title to the Property.
3.2 Upon making the cash payments and Property Expenditures as
specified in Paragraph 2.1, the Optionor shall deliver to Xxxxxx a
duly executed xxxx of sale or quit claim deed and such other executed
documents of transfer as required, in the opinion of Xxxxxx'x lawyers,
for the transfer of an undivided 90% interest in the Property to Xxxxxx.
4. JOINT VENTURE
4.1 Upon Xxxxxx acquiring an interest in the Property pursuant to
paragraph 2.1, the Optionor and Xxxxxx agree to join and
participate in a single purpose joint venture ( the "Joint Venture") for
the purpose of further exploring and developing and, if economically and
politically feasible, constructing and operating a mine on the Property.
The Joint Venture shall be governed by an agreement which shall be in
the form of joint venture agreement attached as Schedule B hereto.
5. RIGHT OF ENTRY
5.1 During the currency of this Agreement, Xxxxxx, its servants, agents
and workmen and any persons duly Authorized by Xxxxxx, shall have
the right of access to and from and to enter upon and take possession of
and prospect, explore and develop the Property in such manner as Xxxxxx
in its sole discretion may deem advisable for the purpose of incurring
Property Expenditures as contemplated by Section 2, and shall have the
right to remove and ship therefrom ores, minerals, metals, or other
products recovered in any manner therefrom.
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6. COVENANTS OF XXXXXX
6.1 Xxxxxx covenants and agrees that:
(A) during the term of this Agreement, Xxxxxx shall keep the Property
clear of all liens, encumbrances and other charges and shall keep
the Optionor indemnified in respect thereof;
(B) Xxxxxx shall carry on all operations on the Property in a good and
workmanlike manner and in compliance with all applicable
governmental regulations and restrictions including but not limited to
the posting of any reclamation bonds as may be required by any
governmental regulations or regulatory authorities;
(C) during the term of the option herein, Xxxxxx shall pay or cause to
be paid any rates, taxes, duties, royalties, workers' compensation
or other assessments or fees levied with respect to its operations
thereon and in particular Xxxxxx shall pay the yearly claim maintenance
payments necessary to maintain the claims in good standing;
(D) Xxxxxx shall maintain books of account in respect of its
expenditures and operations on the Property and, upon reasonable
notice, shall make such books available for inspection by
representatives of the Optionor;
(E) Xxxxxx shall allow any duly Authorized agent or representative of
the Optionor to inspect the Property at reasonable times and
intervals and upon reasonable notice given to Xxxxxx, provided however,
that it is agreed and understood that any such agent or representative
shall be at his own risk in respect of, and Xxxxxx shall not be liable
for, any injury incurred while on the Property, howsoever caused;
(F) Xxxxxx shall allow the Optionor access at reasonable times to all
maps, reports, sample results and other technical data prepared or
obtained by Xxxxxx in connection with its operations on the
Property;
(G) Xxxxxx shall indemnify and save the Optionor harmless of and from
any and all costs, claims, loss and damages whatsoever incidental
to or arising out of any work or operations carried out by or on behalf
of Xxxxxx on the Property, including any liability of an environmental
nature.
7. REPRESENTATIONS AND WARRANTIES
7.1 The Optionor hereby represents and warrants that:
(A) the Property is in good standing with all regulatory
authorities having jurisdictions and all required claim maintenance
payments have been made;
(B) it has not done anything whereby the mineral claims comprising
the Property may be in any way encumbered;
(C) it 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 its charter documents or any contract or
other commitment to which it is party; and
(D) the execution of this Agreement and the performance of its
terms have been duly Authorized by all necessary corporate actions
including the resolution of its Board of Directors.
21.2 Xxxxxx hereby represents and warrants that:
(C) it 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 its charter documents or any contract or
other commitment to which it is party; and
(D) the execution of this Agreement and the performance of its terms
have been duly Authorized by all necessary corporate actions including
the resolution of its Board of Directors.
8. ASSIGNMENT
8.1 With the consent of the other party, which consent shall not be
unreasonably withheld, Xxxxxx and the Optionor has the right to
assign all or any part of its interest in this Agreement and or in
the Property, subject to the terms and conditions of this Agreement. It
shall be a condition precedent to any such assignment that the assignee
of the interest being transferred agrees to be bound by the terms of
this Agreement, insofar as they are applicable.
9. CONFIDENTIALITY OF INFORMATION
9.1 Each of Xxxxxx and the Optionor shall treat all data, reports,
records and other information of any nature whatsoever relating to
this Agreement and the Property as confidential, except where such
information must be disclosed for public disclosure requirements of a
public company.
10. TERMINATION
10.1 Until such time as Xxxxxx has acquired an undivided 90% interest in
the Property pursuant to Section 2, this Agreement shall terminate upon
any of the following events:
(A) upon the failure of Xxxxxx to make a payment or incur Property
Expenditures required by and within the time limits prescribed by
Paragraph 2.1;
(B) in the event that Xxxxxx, not being at the time in default
under any provision of this Agreement, gives 30 day's written notice to
the Optionor of the termination of this Agreement;
(C) in the event that Xxxxxx shall fail to comply with any of its
obligations hereunder, other than the obligations contained in Paragraph
2.1, and subject to Paragraph 11.1, and within 30 days of receipt by
Xxxxxx of written notice from the Optionor of such default, Xxxxxx has
not:
(i) cured such default, or commenced proceedings to cure
such default and prosecuted same to completion without undue delay; or
(ii) given the Optionor notice that it denies that such
default has occurred.
(D) delivery of notice of termination by Xxxxxx pursuant to
Paragraph 2.1 in the event the Geological Report is not acceptable;
In the event that Xxxxxx gives notice that it denies that a default has
occurred, Xxxxxx shall not be deemed in default until the matter shall
have been determined finally through such means of dispute resolution as
such matter has been subjected to by either party.
10.2 Upon termination of this Agreement under Paragraph 10.1, Xxxxxx
shall:
(A) transfer any interest in title to the Property, in good
standing to the Optionor free and clear of all liens, charges, and
encumbrances;
(B) turn over to the Optionor copies of all maps, reports, sample
results, contracts and other data and documentation in the possession of
Xxxxxx or, to the extent within Xxxxxx'x control, in the possession of
its agents, employees or independent contractors, in connection with
its operations on the Property; and
(C) ensure that the Property is in a safe condition and complies
with all environmental and safety standards imposed by any duly
authorized regulatory authority.
10.3 Upon the termination of this Agreement under Paragraph 10.1, Xxxxxx
shall cease to be liable to the Optionor in debt, damages or otherwise
save for the performance of those of its obligations which theretofore
should have been performed, including those obligations in Paragraph
10.2.
10.4 Upon termination of this Agreement, Xxxxxx shall vacate the
Property within a reasonable time after such termination, but shall have
the right of access to the Property for a period of six months
thereafter for the purpose of removing its chattels, machinery,
equipment and fixtures.
11. FORCE MAJEURE
11.1 The time for performance of any act or making any payment or any
expenditure required under this Agreement shall be extended by the
period of any delay or inability to perform due to fire, strikes, labor
disturbances, riots, civil commotion, wars, acts of God, any present or
future law or governmental regulation, any shortages of labor,
equipment or materials, or any other cause not reasonably within the
control of the party in default, other than lack of finances.
12. REGULATORY APPROVAL
12.1 If this Agreement is subject to the prior approval of any
securities regulatory bodies, then the parties shall use their best
efforts to obtain such regulatory approvals.
13. NOTICES
13.1 Any notice, election, consent or other writing required or
permitted to be given hereunder shall be deemed to be sufficiently given
if delivered or mailed postage prepaid or if given by telegram, telex or
telecopier, addressed as follows:
In the case of the Optionor:
Xxxx Xxxxxxxxx
000-0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
Telecopier: (000) 000-0000
In the case of Xxxxxx :
Xxxxxx Ventures, Inc.
000 X. Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxxxx, XX
Xxxxxx X0X 0X0
Telecopier: (000) 000-0000
and any such notice given as aforesaid shall be deemed to have been
given to the parties hereto if delivered, when delivered, or if mailed,
on the third business day following the date of mailing, or, if
telegraphed, telexed or telecopied, on the same day as the telegraphing,
telexing or telecopying thereof PROVIDED HOWEVER that during the period
of any postal interruption in Canada any notice given hereunder by mail
shall be deemed to have been given only as of the date of actual
delivery of the same. Any party may from time to time by notice in
writing change its address for the purposes of this Paragraph 13.1.
14. GENERAL TERMS AND CONDITIONS
14.1 The parties hereto hereby covenant and agree that they will execute
such further agreements, conveyances and assurances as may be requisite,
or which counsel for the parties may deem necessary to effectually
carryout the intent of this Agreement.
14.2 This Agreement shall constitute the entire agreement between the
parties with respect to the Property. No representations or inducements
have been made save as herein set forth. No changes, alterations or
modifications of this Agreement shall be binding upon either party until
and unless a memorandum in writing to such effect shall have been signed
by all parties hereto. This Agreement shall supersede all previous
written, oral or implied understandings between the parties with respect
to the matters covered hereby.
14.3 Time shall be of the essence of this Agreement.
14.4 The titles to the sections in this Agreement shall not be deemed to
form part of this Agreement but shall be regarded as having been used
for convenience of reference only.
14.5 Unless otherwise noted, all currency references contained in this
Agreement shall be deemed to be references to United States funds.
14.6 Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable
law, but if any provision shall be prohibited by or be invalid under
applicable law, such provision shall be ineffective only to the extent
of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
14.7 The Schedules to this Agreement shall be construed with and as an
integral part of this Agreement to the same extent as if they were set
forth verbatim herein.
14.8 Defined terms contained in this Agreement shall have the same
meanings where used in the Schedules.
14.9 This Agreement shall be governed by and interpreted in accordance
with the laws of British Columbia and the laws of Canada applicable
therein.
14.10 This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
WITNESS WHEREOF this Agreement has been executed by the parties hereto
as of the day and year first above written.
XXXX XXXXXXXXX
__/S/ XXXX MACDONALD_____
Signature of Authorized Signatory
______________________________
Name of Authorized Signatory
______________________________
Position of Authorized Signatory
XXXXXX VENTURES, INC.
by its Authorized signatory:
__/S/ XXXX UPTON_____________
Signature of Authorized Signatory
______________________________
Name of Authorized Signatory
__PRESIDENT__________________
Position of Authorized Signatory
SCHEDULE "A"
PROPERTY DESCRIPTION
NTS 105 F-10
Latitude 61 35' North, Longitude 132 35' West
XXXXXX LAKE MINING DISTRICT
YUKON TERRITORY
CANADA
List of Claims
CLAIM NAME GRANT NUMBERS CURRENT EXPIRY DATE
B1-B4 YB 92568 - YB 92571 JUNE 17, 2003
XxXxxxxxx River Claim Plan 000X-00
Xxxxxxxx Xxxxxx Lake Mining
District
SCHEDULE "B"
NET SMELTER RETURNS
For the purposes of this agreement, the term "Net Smelter Returns" shall
mean the net proceeds actually paid to Xxxxxx from the sale by Xxxxxx of
minerals mined and removed from the Property, after deduction of the
following:
(a) smelting costs, treatment charges and penalties including, but
not being limited to, metal losses, penalties for impurities and charges
for refining, selling and handling by the smelter, refinery or other
purchaser; provided, however, in the case of leaching operations or
other solution mining or beneficiation techniques, where the metal being
treated is precipitated or otherwise directly derived from such xxxxx
solution, all processing and recovery costs incurred by Xxxxxx, beyond
the point at which the metal being treated is in solution, shall be
considered as treatment charges;
(b) costs of handling, transporting and insuring ores, minerals
and other materials or concentrates from the Property or from a
concentrator, whether situated on or off the Property, to a smelter,
refinery or other place of treatment; and
(c) ad valorem taxes and taxes based upon production, but not
income taxes.
In the event Xxxxxx commingles minerals from the Property with minerals
from other properties, Xxxxxx shall establish procedures, in accordance
with sound mining and metallurgical techniques, for determining the
proportional amount of the total recoverable metal content in the
commingled minerals attributable to the input from each of the
properties by calculating the same on a metallurgical basis, in
accordance with sampling schedules and mining efficiency experience, so
that production royalties applicable to minerals produced from the
Property may reasonably be determined.
