APAC MINERALS INC.
0000 Xxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Telephone: (000) 000-0000 Fax: (000) 000-0000
April 15, 1998
EXMINCO
Exploration and Mining Investment
Company Establishment
X.X. Xxx 00/
XX-0000 Xxxxx
Liechtenstein
Dear Sirs:
Re: APAC Minerals Inc. (the "Purchaser") and Letter of Intent (the "Letter of
Intent") for Purchase of an Undivided 100% Interest in an Exploration
Concession covering the lands located in Alentejo, Portugal, more
particularly described in Schedule "A" attached hereto (the "Property")
from EXMINCO Exploration and Mining Investment Company Establishment (the
"Vendor")
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This binding Letter of Intent will confirm our understanding of your sale to us
and our purchase from you of an undivided 100% interest in the Property, on the
following material terms and conditions:
1. REPRESENTATIONS AND WARRANTIES
1.1 The Vendor has legal and beneficial ownership of the Property;
and the Property is free and clear of all liens, charges and
encumbrances, and is properly recorded and staked in
accordance with the laws of Portugal and is in good standing.
1.2 The Vendor has the absolute right to enter into this Letter of
Intent without first obtaining the consent of any other person
or body corporate, except as described below, and no other
person or body corporate has any agreement, option, right or
privilege capable of becoming and agreement for the purchase
of the Property or any interest therein.
1.3 The Vendor has completed all necessary and proper corporate
acts and procedures for the Vendor to enter into this Letter
of Intent and carry out its terms to the full extent.
2. PURCHASE AND SALE
2.1 The Vendor hereby sells and the Purchaser hereby purchases an
undivided 100% interest in and to the Property free and clear
of all liens, charges, encumbrances and claims, in accordance
with the terms and conditions of this Letter of Intent.
2.2 In consideration of the sale, the Purchaser agrees to pay to
the Vendor, and to issue and deliver to the Vendor, the
following:
(a) the sum of $10,000 in Canadian dollars as a non-refundable
deposit, upon the completion of our due diligence review of
the Property;
(b) a total of 2,000,000 common shares in the capital stock of
the Purchaser, within thirty (30) days of the Approval Date
(as defined below); and
(c) the Purchaser's assumption of responsibility for the payment
of all required annual exploration work under the terms and
conditions of the exploration concession for the Property,
which for greater certainty are estimated to be $550,000 in
lawful currency of the United States of America over the
next two years, in order to maintain the Property in good
standing.
3. TRANSFER OF PROPERTY
3.1 After the execution of this Letter of Intent, the Purchaser
shall incorporate a company in Portugal ("Newco") for the
purpose of holding the exploration concession of the Property,
and the Vendor agrees to co-operate with and assist the
Purchaser in applying to the government of Portugal for the
transfer of the exploration concession for the Property to
Newco. Upon request, the Vendor will forthwith deliver to the
Purchaser a registrable transfer or transfers of the Property,
or such other instrument as may be required, transferring to
the Purchaser an undivided 100% interest in and to the
Property, and the Purchaser will be entitled to immediately
register the transfer or transfers against the title to the
Property.
4. OPERATOR
4.1 Newco, the wholly-owned subsidiary of the Purchaser to be
formed, will be the operator of the Property (the "Operator"),
and as Operator will be responsible for preparing work
programs and budgets for the exploration and development work
on the Property, and for conducting all such exploration,
development, and mining activities on the Property.
5. FURTHER ASSURANCES
5.1 The parties hereto agree to do or cause to be done all acts or
things necessary to implement and carry into effect the
provisions and intent of this agreement.
6. GENERAL
6.1 This Letter of Intent will be governed and construed in
accordance with the laws of the Province of British Columbia.
6.2 This Letter of Intent is intended to create binding legal
relations among the parties and will ensure to the benefit of
and be binding upon the parties hereto and their respective
successors and assigns as the case may be.
6.3 In the event that any provision of this Letter of Intent held
unenforceable or invalid by court of law, this Letter of
Intent will be read as if such unenforceable or invalid
provision were removed.
6.4 The rights and obligations of the parties created by this
Letter of Intent are not assignable by any party without the
prior written consent of the other party, not to be
unreasonably withheld, except for any transfer or assignment
to a wholly owned subsidiary of the party or pursuant to an
amalgamation, merger, or corporate reorganization or
arrangement of the party.
6.5 This Letter of Intent and the obligations of the Purchaser are
subject to the performance of the following conditions
precedent:
(a) the Purchaser's due diligence review of the Property
within the next thirty (30) days following the
execution date of this Letter of Intent to the
satisfaction and approval of the Purchaser in its
sole discretion, including for greater certainty the
preparation and delivery of an independent technical
report on the Property, the cost of which is to be
borne by the Purchaser;
(b) the prior written acceptance for filing of this
Letter of Intent by the Vancouver Stock Exchange on
behalf of the Purchaser; and
(c) the approval of, or written evidence of the approval
of, simple majority of the shareholders of the
Purchaser, if required by the Vancouver Stock
Exchange as a condition of its acceptance;
(the latest date of such approvals being referred to as the
"Approval Date" herein)
6.6 Prior to the closing of the purchase and sale, the Vendor will
cause to be delivered to the Purchaser, a legal opinion from
the Portuguese counsel of the Vendor in a form satisfactory to
the counsel for the Purchaser confirming that the Vendor was
the legal and beneficial owner of the Property, that the
Property free and clear of all recorded liens, charges and
encumbrances, that the Property is in good standing, that all
required corporate steps and procedures have been performed
and all required governmental approvals and consents have been
obtained to transfer the Property to Newco, and that the
Property is validly registered in the name of Newco in
accordance with the laws of Portugal.
If the foregoing terms and conditions, and the attached schedules which form a
part of this Letter of Intent, accurately set out our mutual understandings,
please indicate your acceptance by signing this letter where indicated below and
returning to us the enclosed copy duly signed on or before 4:30 p.m. on April
30, 1998.
Your very truly,
APAC MINERALS INC.
/s/ XXXX XXXXXXXXX
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Xxxx Xxxxxxxxx
President
TB/lh
Encls.
Terms and conditions approved as of the date first above written.
EXMINCO
Exploration and Mining Investment
Company Establishment
/s/ XXXXXXX XXXX
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Xxxxxxx Xxxx
Authorized Signatory
Schedule "A"
Prospecting rights and researching of mineral deposits of zinc, lead, silver,
copper and gold are granted to EXMINCO - EXPLORATION AND MINING INVESTMENT CO.
hereinafter designated as EXMINCO, as per articles 9 and 13 of Decree-Law No.
90/90 and under the terms of articles 5 and 8 of Decree-Law No. 88/90, of March
16, over an area approximately 520 Km2, and area bounded by a polygon whose
vertices, in Xxxxxxx-Xxxxx coordinates, as referred to the Central Point
indicate:
--------------------VERTEX--------------------MERIDIAN (m)------------------------------- - 147 900 --------
--------------------2------------------------- + 46 180---------------------------------- - 163 000 --------
--------------------3------------------------- + 61 980---------------------------------- - 163 820 --------
--------------------4------------------------- + 76 250---------------------------------- - 175 700 --------
--------------------5------------------------- + 76 400---------------------------------- - 187 100 -------
--------------------6------------------------- + 77 200---------------------------------- - 189 350 --------
--------------------7------------------------- + 68 400---------------------------------- - 192 450 --------
--------------------8------------------------- + 64 000---------------------------------- - 186 050 --------
--------------------9--------------------------+ 64 900---------------------------------- - 181 350 --------
-------------------10--------------------------+ 60 300---------------------------------- - 174 500 --------
-------------------11------------------------- + 52 750---------------------------------- - 169 570 --------
-------------------12------------------------- + 41 850---------------------------------- - 166 040 --------
-------------------13------------------------- + 31 150---------------------------------- - 155 700 --------
