Re: Property Purchase Agreement between Hi Ho Silver Resources Inc. and Madman Mining Co. Ltd. on the Silver Tip Silver Project, British Columbia
 |
madman
mining co. ltd.
|
October
13, 2006
#
15A -
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxxx,
Xxxxxxx
Xxxxxx
X0X 0X0
Attention:
Xx. Xxxxxxxxx X. Xxxxxx, President
Dear
Xx.
Xxxxxx:
| Re: |
Property
Purchase Agreement between Hi Ho Silver Resources Inc. and Madman
Mining
Co. Ltd. on the Silver Tip Silver Project, British
Columbia
|
This
letter sets forth the terms, and shall act as the agreement (the “Agreement”),
under which Hi Ho Silver Resources Inc. (“Hi Ho Silver”) can acquire from Madman
Mining Co. Ltd. (“Madman”) an option to earn a 100% interest in the Silver Tip
Project (as more particularly described below and referred to herein as the
“Property”) in the Kaslo area of British Columbia. The terms of this Agreement
may be subject to regulatory approval.
PART
I - THE PROPERTY
The
Property is comprised of two mineral claims covering approximately 900 ha.
(2,250 acres) located in the Slocan Mining Division of British Columbia and
is
more particularly described and set out in the attached Schedule
“A”.
PART
II - REPRESENTATIONS AND WARRANTIES OF MADMAN
Madman
represents and warrants to Hi Ho Silver that
it
is legally entitled to hold the Property and will remain so entitled until
the
interest of Hi Ho Silver in the Property which is subject to this Option has
been duly transferred to the Hi Ho Silver as contemplated hereby and
that
the
Property is validly located, duly recorded, in good standing and legally and
beneficially owned by Madman, free and clear of any charges, liens, or
encumbrances, surface rights restrictions or environmental hazards or
liabilities and that there are no underlying agreements in effect with respect
to the Property.
Madman
represents and warrants to Hi Ho Silver that there are no claims against title
to the Property, nor to the knowledge of Madman is there any basis therefore.
Madman also represents and warrants to Hi Ho Silver that Madman has full right
and authority to enter into this agreement and to carry out the transactions
contemplated herein, that
entering into this Agreement by Madman does not and will not conflict with,
and
does not and will not result in a breach of, any of the terms of its
incorporating documents or any agreement or instrument to which Madman is a
party
and
that
all
approvals required to be obtained in order for Madman to do so have been
obtained.
#314,
000
Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx, X0X 0X0 ·
Tel:
(000) 000-0000 ·
Fax:
(000) 000-0000
email:
xxxxxxxxxxxx@xxx.xxx
PART
III - REPRESENTATIONS AND WARRANTIES OF HI HO SILVER
Hi
Ho
Silver represents and warrants to Madman that: it has full corporate power
and
authority to enter into this Agreement; that it is a company validly existing
and in good standing under the laws of Canada; that it is up to date with
respect to its filings with the applicable governmental corporate agency; and
that it will use its use its best efforts to have this Agreement filed with
the
applicable regulatory bodies, as and if required, in a timely
manner.
PART
IV - OPTION
4.1 Madman
grants to Hi Ho Silver the sole and exclusive right and option to acquire up
to
a 100% undivided interest in and to the Property free and clear of all charges,
encumbrances and claims.
4.2 Hi
Ho
Silver can earn a 51% undivided interest in and to the Property free and clear
of all charges, encumbrances and claims (the “First Option”) by paying to Madman
the aggregate sum of $35,000 in cash and by issuing to Madman a total of 200,000
common shares in the capital stock of Hi Ho Silver to be paid and issued by
Hi
Ho Silver to Madman as follows:
| (a) |
the
sum of $35,000 to be paid to Madman on or before the dates indicated
below;
|
| (i) |
$10,000
within ten (10) business days from the signing of this
Agreement;
|
| (ii) |
$25,000
on or before December 10, 2006; and
|
|
(b)
|
200,000
common shares in the capital stock of Hi Ho Silver to be issued to
Madman
within ten (10) business days of regulatory approval of this Agreement,
or
within ten (10) business days of the signing of this Agreement if
regulatory approval is not
required.
|
4.3 If
and
when Hi Ho Silver has made all of the cash payments and issued the common shares
required pursuant to section 4.2, then the First Option shall be deemed to
have
been exercised by Hi Ho Silver and a 51% undivided right, title and interest
in
and to the Property shall vest in Hi Ho Silver free and clear of all charges,
encumbrances and claims, and Madman shall immediately take all necessary steps
reasonably required by Hi Ho Silver to transfer an undivided 51% interest in
and
to the Property to Hi Ho Silver.
4.4 After
Hi
Ho Silver has fully exercised the First Option, Hi Ho Silver can elect to
acquire a further undivided 49% interest in and to the Property free and clear
of all charges, encumbrances and claims (the “Second Option”), by paying to
Madman the sum of $65,000 in cash and by issuing to Madman a total of 300,000
common shares in the capital stock of Hi Ho Silver, which cash payment and
share
issuance is to be made on or before October 1, 2007.
4.5 If
and
when Hi Ho Silver has made the cash payment and issued the common shares
required pursuant to section 4.4, then the Second Option shall be deemed to
have
been exercised by Hi Ho Silver and the remaining 49% undivided right, title
and
interest in and to the Property shall vest in Hi Ho Silver free and clear of
all
charges, encumbrances and claims, and Madman shall immediately take all
necessary steps reasonably required by Hi Ho Silver to transfer the remaining
49% interest in and to the Property to Hi Ho Silver.
PART
V - OPERATOR AND ACCESS
5.1 Hi
Ho
Silver shall have the exclusive right to manage and operate the exploration
programs as operator during the period of the Option.
5.2 From
the
date of this Agreement forward Hi Ho Silver shall be responsible for all costs
related to exploration work conducted on the Property and Madman will not be
required to contribute to, nor will Madman suffer any dilution in its percentage
of ownership as a result of not contributing to, the cost of any exploration
work.
5.3 A
fully
executed xxxx of sale transferring 100% interest in the Property to Hi Ho Silver
will be provided by Madman within five business days from the signing of this
Agreement. This xxxx of sale shall be held in trust and released to Hi Ho Silver
upon the completion by Hi Ho Silver of all the terms set out in Part IV
herein.
PART
VI - MAINTENANCE OF CLAIMS
6.1 During
the Option period, Hi Ho Silver will be responsible for maintaining all mineral
claims that comprise the Property in good standing with respect to Ministry
of
Energy Mines and Petroleum Resources annual claim maintenance
requirements.
PART
VII -TERMINATION FOR DEFAULT
7.1 Prior
to
the full exercise of either the First Option or the Second Option as provided
for herein if Hi Ho Silver is in default of any of its obligations hereunder
Madman may immediately give written notice to the Hi Ho Silver of such default,
and Hi Ho Silver shall than have a period of 30 days to remedy such default.
If
Hi Ho Silver does not remedy the default with the 30 days aforesaid this
Agreement and the Option shall, at Madman’s option and upon written notice to Hi
Ho Silver, terminate forthwith, and any remaining interest in and to the
Property that has not vested in Hi Ho Silver will remain with
Madman.
PART
VIII - GENERAL
8.1 Unless
otherwise expressly indicated to the contrary, all references to dollar amounts
contained in this Agreement are references to Canadian dollars.
8.2 This
is
an option only and except as specifically provided otherwise, nothing herein
contained shall be construed as obligating Hi Ho Silver to do any acts or make
any payments hereunder and any act or acts or payments made hereunder shall
not
be construed as obligating Hi Ho Silver to do any further acts or make any
further payments.
8.3 Hi
Ho
Silver may at any time either sell, transfer or otherwise dispose of all or
any
portion of its interest in and to the Property and this Agreement provided
that
any purchaser, grantee or transferee of any such interest shall have first
delivered to Madman its agreement relating to this Agreement and to the
Property, containing
(i) a
covenant to perform all the obligations of Hi Ho Silver to be performed under
this Agreement in respect of the interest to be acquired by it from Hi Ho Silver
to the same extent as if this Agreement had been originally executed by such
purchaser, grantee or transferee; and
(ii) a
provision subjecting any further sale, transfer or other disposition of such
interest in the Property and this Agreement or any portion thereof to the
restrictions contained in this paragraph.
8.4 If
Hi Ho
Silver is at any time prevented or delayed in complying with any provisions
of
this Agreement by reason of strikes, lock-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,
other than lack of funds, beyond the control of Hi Ho Silver, the time limited
for the performance by Hi Ho Silver of its obligations hereunder shall be
extended by a period of time equal in length to the period of each such
prevention or delay, but nothing herein shall discharge Hi Ho Silver from its
obligations hereunder to maintain the Property in good standing.
8.5 No
information furnished by Hi Ho Silver to Madman hereunder in respect of the
activities carried out on the Property by Hi Ho Silver shall be published or
disclosed by Madman without the prior written consent of Hi Ho Silver, but
such
consent in respect of the reporting of factual data shall not be unreasonably
withheld, and shall not be withheld in respect of information required to be
publicly disclosed pursuant to applicable securities or corporation laws,
regulations or policies.
8.6 Each
notice, demand or other communication required or permitted to be given under
this Agreement shall be in writing and shall be sent by prepaid registered
mail
deposited in a Post Office in Canada addressed to the party entitled to receive
the same, or delivered, telexed, telegraphed or telecopied to such party at
the
address for such party specified above. The date of receipt of such notice,
demand or other communication shall be the date of delivery thereof if
delivered, telexed, telegraphed or telecopied, or, if given by registered mail
as aforesaid, shall be deemed conclusively to be the third business day after
the same shall have been so mailed except in the case of interruption of postal
services for any reason whatever, in which case the date of receipt shall be
the
date on which the notice, demand or other communication is actually received
by
the addressee.
8.7 The
parties shall promptly execute or cause to be executed all documents, deeds,
conveyances and other instruments of further assurance and do such further
and
other acts which may be reasonably necessary or advisable to carry out fully
the
intent of this Agreement or to record wherever appropriate the respective
interest from time to time of the parties in the Property.
8.8 This
Agreement shall enure to the benefit of and be binding upon the parties and
their respective successors and assigns.
8.9 Nothing
contained in this Agreement shall, except to the extent specifically authorized
hereunder, be deemed to constitute either party hereto a partner, agent or
legal
representative of the other party.
8.10 This
Agreement shall be governed by and construed in accordance with the laws of
Ontario and shall be subject to the approval of all securities regulatory
authorities having jurisdiction.
8.11 In
case
any provision of this Agreement shall be invalid, illegal or unenforceable,
it
shall be severed from this Agreement. In either case the validity, legality
and
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby.
8.12 This
Agreement may be executed simultaneously in two or more counterparts, by
facsimile or otherwise, each of which shall be deemed an original and all of
which together shall constitute but one and the same instrument. The parties
hereto shall be entitled to rely on delivery by facsimile machine of an executed
copy of this Agreement as due execution and delivery of this Agreement by the
party effecting such delivery so as to bind such party in accordance with the
terms hereof.
It
would
be appreciated if you could review this Agreement. If the terms as presented
are
acceptable to you, please sign the attached duplicate of this Agreement and
return the same to my attention at your earliest convenience.
Sincerely,
| MADMAN MINING CO. LTD. |
AGREED
TO
and ACCEPTED
This
13
day of October, 2006
|
||
| HI HO SILVER RESOURCES INC. | |||
|
/s/
Signed
President
|
|||
|
/s/
Signed
President
|
This
is
page 5 of the Agreement dated October 13, 2006 to Hi Ho Silver Resources Inc.
(“Hi Ho Silver”)
from
Madman Mining Co. Ltd. (“Madman”).
SCHEDULE
"A"
To
that
Agreement to HI
HO SILVER RESOURCES INC.
from
MADMAN
MINING CO. LTD.,
dated
the
13th
day of October, 2006
All
mineral claims that comprise the Property are located in the Kaslo Area of
the
Slocan Mining Division of British Columbia.
|
TENURE
NUMBER
|
CLAIM
NAME
|
MAP
NUMBER
|
ANNIVERSARY
DATE
|
SIZE
(Ha)
|
||||
|
405638
|
Silver Tip #1
|
082F095
|
January
15, 2007
|
450.00
|
||||
|
405639
|
Silver Tip #2
|
082F095
|
January
15, 2007
|
450.00
|
||||
|
Total
size (Ha)
|
900.00
|
