MINING ACQUISITION AGREEMENT
THIS AGREEMENT is dated for reference March 19,
2008.
BETWEEN:
ALTOS DE AMADOR
S.A., a company having an address at:
Avenida Samuel Lewis
y
Calle Gerrado Ortega
Edificio Central, 5to piso
Panama, Rep. De Panama
(the
“Vendor”)
AND:
CHANCERY RESOURCES,
INC., a company having an address at 422 Richards Street, 3rd
Floor, Vancouver, BC V6B 2Z4
(the
“Purchaser”)
WHEREAS:
A.
The Vendors are collectively the registered beneficial owner of an
undivided one hundred percent (100%) interest in and to those
certain mineral interests which are more particularly described in
Schedule “A” attached hereto (the
“Property”); and
B.
The Vendors wish to sell to the Purchaser an undivided one hundred
percent (100%) interest in and to the Property and any deposits of
minerals on the Property, and the Purchaser wishes to acquire the
same on the terms and subject to the conditions as are more
particularly set forth herein.
THEREFORE in consideration of the mutual
covenants and agreements in this Agreement, the parties agree as
follows:
1.
DEFINITIONS AND INTERPRETATION
1.1 For
the purposes of this Agreement:
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(a) |
“Affiliate” means any person,
partnership, joint venture, corporation or other form of enterprise
which directly or indirectly controls, is controlled by, or is
under common control with, a party to this Agreement. For purposes
of the preceding sentence, “control” means possession,
directly or indirectly, of the power to direct or cause direction
of management and policies through ownership of voting securities,
contract, voting trust or otherwise;
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(b) |
“Effective Date” means, March 19,
2008;
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(c) |
“Ore” shall mean any minerals of
commercial economic value mined from the Property;
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(d) |
“Payment” means the payments
contemplated in paragraph 3.2;
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(e) |
“Product” shall mean Ore mined from
the Property and any concentrates or other materials or products
derived therefrom, but if any such Ore, concentrates or other
materials or products are further treated as part of the mining
operation in respect of the Property, such Ore, concentrates or
other materials or products shall not be considered to be
“Product” until after they have been so treated.
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(f) |
“Property” means properties in
Columbia, more particularly described in Schedule “A”
of this Agreement; and
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(g) |
“Property Rights” means all
licences, permits, easements, rights-of-way, certificates and other
approvals obtained by either of the parties, either before or after
the date of this Agreement, and necessary for the development of
the Property or for the purpose of placing the Property into
production or of continuing production on the Property.
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1.2 For
the purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
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(a) |
“this Agreement” means this mining
acquisition agreement and all Schedules attached hereto;
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(b) |
any reference in this Agreement to a designated
“Section”, “Schedule”,
“paragraph” or other subdivision refers to the
designated section, schedule, paragraph or other subdivision of
this Agreement;
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(c) |
the words “herein” and
“hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular Section or
other subdivision of this Agreement;
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(d) |
any reference to a statute includes and, unless
otherwise specified herein, is a reference to such statute and to
the regulations made pursuant thereto, with all amendments made
thereto and in force from time to time, and to any statute or
regulations that may be passed which has the effect of
supplementing or superseding such statute or such regulation;
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(e) |
any reference to “party” or
“parties” means the Vendors, the Purchaser, or both, as
the context requires;
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(f) |
the headings in this Agreement are for
convenience of reference only and do not affect the interpretation
of this Agreement; and
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(g) |
all references to currency refer to United
States dollars.
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1.3
The following are the Schedules to this Agreement, and are
incorporated into this Agreement by reference:
Schedule “A”:
Property-Legal Description and Location
2.
REPRESENTATIONS AND WARRANTIES OF THE VENDORS AND THE
PURCHASER
2.1 The
Vendors represent and warrant to the Purchaser jointly and
severally, that:
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(a) |
the Vendors are the beneficial owners of the
Property and the Vendors have the full right, power, capacity and
authority to enter into, execute and deliver this Agreement;
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(b) |
the Property is free and clear of, and from, all
liens, charges and encumbrances with all assessment work therein
having been duly completed through the year ended December 31,
2008;
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(c) |
the Vendors hold all permits, licences, consents
and authorities issued by any government or governmental authority
which are necessary in connection with the ownership and operation
of its business and the ownership of the Property;
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(d) |
the Property has been properly staked, located
and recorded pursuant to the applicable laws and regulations of
Columbia and all mining claims comprising the Property are in good
standing;
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(e) |
there are no outstanding agreements or options
to acquire the Property or any portion thereof, and no person, firm
or corporation has any proprietary or possessor interest in the
Property;
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(f) |
to the best of the Vendors’ knowledge,
there are no outstanding orders or directions relating to
environmental matters requiring any work, repairs, construction or
capital expenditures with respect to the Property and the conduct
of the operations related thereto, and the Vendors have not
received any notice of the same and is not aware of any basis on
which any such orders or direction could be made;
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(g) |
there is no adverse claim or challenge against
or to the ownership of or title to any part of the Property and, to
the best of the Vendors’ knowledge there is no basis for such
adverse claim or challenge which may affect the Property;
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(h) |
the consummation of the transactions
contemplated by this Agreement does not and will not conflict with,
constitute a default under, result in a breach of, entitle any
person or company to a right of termination under, or result in the
creation or imposition of any lien, encumbrance or restriction of
any nature whatsoever upon or against the property or assets of the
Vendors, under their constating documents, any contract, agreement,
indenture or other instrument to which the Vendors are a party or
by which it is bound, any law, judgment, order, writ, injunction or
decree
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of any court, administrative agency or other
tribunal or any regulation of any governmental authority;
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(i) |
there are no actual or pending proceedings for,
and the Vendors are unaware of any basis for, the institution of
any proceedings leading to the placing of the Vendors in bankruptcy
or subject to any other laws governing the affairs of insolvent
parties and the Property does not represent all or substantially
all of the Vendors’ corporate undertaking;
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(j) |
reclamation and rehabilitation of those parts of
the Property which have been previously worked have been properly
completed in compliance with all applicable laws;
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(k) |
the Vendors have advised the Purchaser of all of
the material information relating to the mineral potential of the
Property of which it has knowledge; and
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(l) |
there are no mine workings or waste dumps or
mine tailings on the property.
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2.2
The representations and warranties contained in paragraph 2.1 are
provided for the exclusive benefit of the Purchaser, and a breach
of any one or more representations or warranties may be waived by
the Purchaser in whole or in part at any time without prejudice to
its rights in respect of any other breach of the same or any other
representation or warranty, and the representations and warranties
contained in paragraph 2.1 will survive the execution and delivery
of this Agreement.
2.3 The
Purchaser represents and warrants to the Vendors that:
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(a) |
the Purchaser is a valid and subsisting
corporation duly incorporated and in good standing under the laws
of the State of Nevada;
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(b) |
the Purchaser has the full right, power,
capacity and authority to enter into, execute and deliver this
Agreement and to be bound by its terms;
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(c) |
the consummation of this Agreement will not
conflict with nor result in any breach of its constating documents
or any covenants or agreements contained in or constitute a default
under any agreement or other instrument whatever to which the
Purchaser is a party or by which the Purchaser is bound or to which
the Purchaser may be subject; and
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(d) |
no proceedings are pending for, and the
Purchaser is unaware of any basis for, the institution of any
proceedings leading to the placing of the Purchaser in bankruptcy
or subject to any other laws governing the affairs of insolvent
parties.
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2.4 The
representations and warranties contained in paragraph 2.3 are
provided for the exclusive benefit of the Vendors, and a breach of
any one or more representations or warranties may be waived by the
Vendors in whole or in part at any time without prejudice to its
rights in respect of any other breach of the same or any other
representation or warranty, and the
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representations and warranties contained in
paragraph 2.3 will survive the execution and delivery of this
Agreement.
2.5 The
Vendors and the Purchaser acknowledge that the Vendors will
maintain control of the Property, subject to this Agreement, and
subject to all appropriate local and national governmental
approvals and environmental considerations.
3.
PURCHASE
3.1 The
Vendors hereby sell to the Purchaser a one hundred percent (100%)
undivided interest in and to the Property and all minerals on the
Property, free and clear of all claims, taxes, liens or
encumbrances, on the terms and conditions set out herein.
3.2 The
consideration payable by the Purchaser to the Vendors pursuant to
this Agreement shall be $270,000 cash, payable as follows:
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(a) |
$50,000 payable immediately on the signing of
this Agreement;
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(b) |
$70,000 within 30 days of the Effective Date;
and
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(c) |
$150,000 within 90 days of the Effective
Date.
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3.3
If the Purchaser identifies any material defect in the
Vendors’ title to the Property, the Purchaser shall give the
Vendors notice of such defect. If the defect has not been cured
within 60 days of receipt of such notice, the Purchaser shall be
entitled to take such curative action as is reasonably necessary,
and shall be entitled to deduct the costs and expenses incurred in
taking such action from Payments then otherwise due or accruing due
to the Vendors. If there are no such Payments, the Purchaser shall
be entitled to a refund in the amount of said costs and
expenses.
3.4
If any third party asserts any right or claim to the Property or to
any amounts payable to the Vendors, the Purchaser may deposit any
amounts otherwise due to the Vendors in escrow with a suitable
agent until the validity of such right or claim has been finally
resolved. If the Purchaser deposits said amounts in escrow, the
Purchaser shall be deemed not in default under this Agreement for
failure to pay such amounts to the Vendors.
4.
MINING PROFITS
4.1
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