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Exhibit 10.1
THIS AGREEMENT MADE EFFECTIVE AS OF THE 12th DAY OF December,
2007 (the "Effective Date") in replacement of a Mineral Rights
Acquisition Agreement (the “Preceding Contract”) dated
the 29 th day of August, 2007. The purpose of this
Agreement is to clarify terminology used in the Preceding Contract
and remove ambiguities in Schedule A which were created when
Schedule A of the Preceding Contract, which was written and signed
in Chinese, had been translated to English.
BETWEEN:
WORLD FORTUNE ENTERPRISE INC. , a British Columbia
private
corporation with offices at 870 East 54 th Ave,
Vancouver, British
Columbia, V5X 1L7, Canada;
(“World Fortune”)
AND:
ASIAN DRAGON GROUP INC., a Nevada publicly traded
corporation
with offices at suite 1100 – 475 Howe Street, Vancouver,
British
Columbia, V6C 2B3;
(“Asian Dragon”)
PREAMBLE:
The Jinjishan Property consists of contiguous 28.3 sq km
exploration license located in the northwest part of Luoning
County, Henan Province, People’s Republic of China (the
“Jinjishan Property”).
The “Jinjishan concentration plant (the “Jinjishan
Plant”) is a processing mill on the same site.
Under Chinese law foreigners may not be directly granted
exploration licenses. Instead a foreign corporation must join with
a Chinese partner and form a Sino-Foreign Joint Venture Company
(“JV”) which must be licensed as a business prior to
any applications for an exploration license.
No Mining License is currently issued to any of the parties in this
Agreement (the “Jinjishan Agreement”) regarding the
Jinjishan Property.
The Jinjishan Property has no probable or proven reserves.
The arrangements which form the structure of this contract are as
follows:
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1) |
To create opportunities to explore
properties in China, World Fortune partnered with the Jinjishan
Gold Mine Company, a company under the administration of the
Luoyang Gold Bureau of the People’s Republic of China (the
“JGC”) to form a JV named Luoyang Canadian United
Mining Ltd. (“LCUML”). World Fortune holds a 70%
interest of LCUML and the JGC holds a 30% interest. This JV applied
for and received a Joint Venture Business License from the
People’s Republic of China (the “Chinese
Government”). |
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2) |
World Fortune met all its financial
commitments under its JV Agreement with the JGC and the JGC
contributed to LCUML the Exploration License for the Jinjishan
Property (the “Jinjishan Exploration License”). |
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3) |
LCUML applied for and received
transfer of registration of the Jinjishan Exploration License to
the name of LCUML and concurrently entered a private agreement to
purchase the Jinjishan Plant. |
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4) |
Asian Dragon engaged World Fortune
under an Agency and Cooperative Agreement to act as Asian
Dragon’s agent and source opportunities for Asian Dragon in
China. |
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5) |
World Fortune proposed to LCUML and
LCUML accepted an offer for World Fortune to purchase 70% of a 100%
interest in the Jinjishan Exploration License and 100% of a 100%
interest in the Jinjishan Plant (collectively the “Jinjishan
Rights”) upon full payment for the Jinjishan Rights per the
payment schedule included in a China Mineral Properties Rights
Purchase Agreement (the “Jinjishan China Rights
Agreement”) signed by World Fortune and LCUML on August 8,
2007. The intent of this Jinjishan China Rights Agreement was to
provide WFEI with a method to effect the legal logistics to pass
title of its 70% interest in the Jinjishan Exploration License into
a separate Agreement which it could then sell or assign to a third
party. |
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6) |
World Fortune proposed to Asian
Dragon and Asian Dragon accepted an offer for Asian Dragon to
purchase the Jinjishan Rights upon assumption of World
Fortune’s obligations under the Jinjishan China Rights
Agreement and payment of share grants to World Fortune and World
Fortune or its nominees. To acquire the Jinjishan Rights Asian
Dragon must fulfill all payments referenced in the Jinjishan China
Rights Agreement. The governing agreement which executes this
contract is this Jinjishan Agreement. |
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7) |
Asian Dragon will not have ownership
of the Jinjishan Rights until it has fully completed the payment
terms included in this Jinjishan Agreement and because the
incorporated Jinjishan China Rights Agreement includes a damages
clause which would come into force if Asian Dragon were to abandon
its obligations under this Jinjishan Agreement, Asian Dragon has
determined that this Jinjishan Agreement does not meet the
characteristics required to record it as an option and therefore a
liability has been recorded in Asian Dragon’s financial
statements pertaining to this Jinjishan Agreement. |
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8) |
Once Asian Dragon has completed all
payments required by this Jinjishan Agreement, it will be deemed to
have title to and will own 100% of a 100% interest in the Jinjishan
Plant and 70% of a 100% interest in the Jinjishan Exploration
License. LCUML will own the remaining 30% of the Jinjishan
Exploration License, but this position may be reduced if Asian
Dragon makes additional payments under this Jinjishan
Agreement. |
CLARIFICATION OF TRANSLATION MATTERS IN SCHEDULE A - China
Mineral Properties Rights Purchase Agreement:
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1) |
Irrespective of any titles in the
attached Jinjishan China Rights Agreement (hereinafter referred to
as “Schedule A”) describing Schedule A as pertaining to
“Mineral Properties Rights”, no Mineral Properties
Rights as the term is commonly used in North American currently
exist regarding the Jinjishan Property. This clarification is based
on the fact that the North American commonly used definition of
“Mineral Properties Rights” generally describes title
to probable or proven mining reserves. |
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2) |
Irrespective of any language in
Schedule A describing the Jinjishan Property as a
“mine”, no mine as the term is commonly used in North
American exists on the Jinjishan Property. |
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3) |
The reference on the cover page of
Schedule A which states: “WFEI can purchase the entire
interest for a total price of US$3.3 million on the following
basis:” should have reflected the total of the payment
schedule attached in the Jinjishan China Rights Agreement and
stated: “WFEI can purchase the entire interest for a total
price of US$3,292,000 on the following basis:”. |
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4) |
The terms: “mine”;
“Exploration Permitted Area”; “Gold Mine
properties”; “mineral properties”;
“Property License”; and “Exploration
Permit” all refer to the Jinjishan Exploration License which
is an exploration license. |
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5) |
The term “related production
equipments” should have read “related
equipment”. |
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6) |
The use of the terms: “mining
operations” and “ore production” does not mean
that the Jinjishan Property is a producing mine or that it has
probable or proven reserves. These terms were generically used and
refer to previous exploration activities on the property. |
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7) |
Paragraph 11 of Schedule A which
states: “This Agreement is binding immediately upon signing
and the non performance Party of this Agreement which can result in
harm to the other party shall be responsible for all the economic
losses”, should have read: “This Agreement is binding
immediately upon signing and if either Party is responsible for non
performance under the terms of this Agreement which results in harm
to the other Party, the non-performing Party shall be responsible
for all economic losses”. |
TERMS:
WHEREAS World Fortune is a private British
Columbia corporation established to source and as
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