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Exhibit 10.1
RMMI AUSTRALIA PTY LTD
and
EAGLE BAY
RESOURCES N.L.
and
AUDAX RESOURCES LTD
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CARR BOYD FARMIN
and
JOINT VENTURE HEADS OF AGREEMENT
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DECEMBER 2006
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<PAGE>
CARR BOYD FARMIN AND JOINT VENTURE HEADS OF AGREEMENT
THIS AGREEMENT is dated 6th December 2006
BETWEEN:
RMMI AUSTRALIA PTY LTD (ACN 122 077 105)
Level 25, 500 Collins Street, Melbourne Vic 3000 ("RMMI")
AND
EAGLE BAY RESOURCES N.L. (ACN 051 212 429) of
Level 1, 14 Outram St, West Perth WA 6005 ("EBR")
AND
AUDAX RESOURCES LTD (ACN 009 058 646)
125 Edward St, East Perth WA 6000 ("ADX")
RECITALS:
A. ADX is the
beneficial owner and is, or is entitled to be, the registered
holder of a 100% interest in the Tenements.
B. RMMI and EBR
wish to earn interests in the Tenements and the parties have
agreed that RMMI and EBR may earn such interest on the terms and
conditions
set
out in this Agreement.
AGREED as follows
1. INTERPRETATION
1.1
In this
Agreement unless the context otherwise requires:
"ASX" means Australian Stock Exchange Limited;
"Bankable Feasibility Study" means a positive Feasibility Study
for which project financing can be made available from a
financial
position;
"Commencement Date" means 30 September 2006;
"Decision to Mine" means a decision by the Manager to recommend
to
the Participants that they undertake mining following a
positive
Feasibility Study, and being a decision communicated by the
Manager by notice to the other Participant;
"Earning Period" means the period commencing on the
Commencement
Date and ending as provided in clause 3.3;
"Expert" means an independent expert appointed by the
Participants, or, in the absence of agreement, by the President
of
AusIMM;
"Farmin Interest" means all of RMMI and EBR's rights and
interests
pursuant to this Agreement to earn a beneficial interest in the
Tenements;
<PAGE>
"Feasibility Study" means, in relation to any proposed mining
operations, a study of all aspects of the proposed mining
operations which;
(a) from
appropriate sampling programmes provide estimates of
the tonnes of proved and probable reserves of ore and the
grades thereof;
(b)
contains estimates of both capital costs and operating
costs likely to be incurred in establishing and conducting
mining operations, including costs to be incurred in mine
development, pre-production, crushing, treatment and
environmental management;
(c)
analyses how to proceed with mining operations to
economically and commercially extract minerals;
(d)
includes reference to relevant marketing and financial
aspects;
(e) states
whether or not establishment of the proposed mining
operations is commercially viable for a Participant;
(f) in the
case of mine operations using a standalone
processing plant, is of such detail and scope as would be
acceptable to a bank or other financial institution for the
purpose of providing financing for the establishment and
carrying out of the proposed mining operations;
(g)
includes a schedule of relevant approvals necessary before
production may commence; and
(h)
includes all Joint Venture Operations for the purpose of
producing such a study.
"Joint Venture" means the joint venture constituted under
clause
2.1 of this Agreement;
"Joint Venture Expenditure" means all Outgoings and the costs
of
all Joint Venture Operations including (without limitation) all
costs, expenses and liabilities incurred in connection with the
exploration, development and mining of the Tenements for
minerals,
accounted for in accordance with accounting principles accepted
in
Australia;
"Joint Venture Interest" means in relation to a Participant:
(a) its
interest (from time to time) as tenant in common in the
Joint Venture Property and in all other rights conferred by
this
Agreement; and
(b) its
right to take in kind a share of minerals derived from
the Tenements
subject to the liabilities and obligations attaching to the
foregoing and imposed by this Agreement;
"Joint Venture Operations" means all activities as are
necessary
or desirable in order to implement and give full effect to the
provisions and purposes of this Agreement;
"Joint Venture Property" means all property of whatsoever kind
held, developed, acquired or created by or on behalf of the
Participants for the purpose of the Joint Venture including
(without limitations):
(a) the Tenements;
(b) Mining information; and
(c) minerals, concentrate and ore prior to their being taken in
kind by the Participants;
<PAGE>
"Manager" means the Participant appointed to conduct Joint
Venture
Operations pursuant to clause 6.1 but reference to the Manager
do
not include references to that Participant in any other
capacity;
"Mining Act" means the Mining Act 1978 (W.A.) as amended;
"Mining Information" means all technical and other information
including (without limitation) geological, geochemical and
geophysical reports, surveys, mosaics, aerial photographs,
samples, drill core, drill logs, drill pulp, assay results,
maps
and plans relating to the Tenements or to Joint Venture
Operations, whether in physical, written or electronic form;
"Operating Committee" means the Operating Committee formed
under
clause 7.1 of this Agreement;
"Outgoings" means all rents, rates, survey fees and other fees
and
charges under the Mining Act or otherwise in connection with
the
Tenements;
"Participants" means RMMI, EBR and ADX and or their permitted
successors and assigns holding a joint venture interest;
"Related Body Corporate" means with respect to any Participant
a
related body corporate of that Participant within the meaning
of
the Corporations Act;
"Tenement Area" means the land over which the relevant
tenements
have been granted.
"Tenements" means the tenements referred to in the Schedule and
any other tenements acquired pursuant to clause 24, together
with
any extensions, renewals, consolidations, replacements or
amendments to those tenements and all rights associated with
those
tenements including the right to treat mineral bearing material
located in the tenements.
1.2
In this
Agreement, unless the context requires otherwise:
(a)
reference to a recital, clause, schedule, annexure or
exhibit is to a recital, clause, schedule, annexure or
exhibit of or to this Agreement;
(b) a
reference to this Agreement or another instrument
includes any variation or replacement of any of them;
(c) a
reference to any statute shall include any amendment,
replacement or re-enactment thereof for the time being in
force and any by-laws, statutory instruments, rules,
regulations, notices, orders, directions, consents or
permissions made there under and any conditions attaching
thereto;
(d) the
singular includes the plural and vice versa;
(e)
a
reference to any gender includes all genders;
(f) a
reference to a person includes a reference to the
person's executors, administrators, substitutes, successors
and permitted assigns;
(g) a
covenant, representation or warranty in favour of two or
more persons is for the benefit of them jointly and
severally;
(h) a
covenant, representation or warranty on the part of two
or more persons binds them jointly and severally; and
(i) a
reference to currency is to the currency of Australia.
2.
JOINT VENTURE
<PAGE>
2.1 The
Participants hereby associate in an unincorporated
joint venture for the purpose of exploring and, if
warranted, developing and mining the Tenements.
2.2 The
Joint Venture shall commence on the Commencement Date
and on that date the Joint Venture Interests of the
Participants are:
RMMI
0%
EBR
0%
ADX
100%
2.3
Nothing in this Agreement shall make a Participant a
partner of any other Participant nor, except as expressly
provided in this Agreement, constitute any Participant the
agent or representative of any other Participant or to
create any fiduciary relationship between them.
2.4 No
Participant shall have any authority to act on behalf of
any other Participant, except as expressly provided in this
Agreement. Where a Participant acts on behalf of another
without authority, such Participant shall indemnify the
other from any losses, claims, damages and liabilities
arising out of any such act.
2.5 Each
Participant has the right to take in kind and
separately dispose of, in proportion to its Joint Venture
Interest, all minerals produced by the Joint Venture.
2.6 The
liabilities of the Participants to each other and to
third parties shall be several in proportion to their
respective Joint Venture Interests from time to time and
shall not be either joint or joint and several. Each
Participant hereby indemnifies the other against any claim
or liability incurred by the other in excess of the other's
Joint Venture Interest.
3.
EARNING PERIOD
3.1 RMMI
and ADX acknowledge
that EBR has paid
$5,000 by way
of exploration
expenditure by EBR
on the Tenements.
3.2 RMMI
may contribute $1 million to Joint Venture Expenditure
during the Earning Period, including at least $100,000 in
the first six months of this agreement.
3.3
Subject to clause 3.5, the earning Period will end when
RMMI has contributed $1 million to Joint Venture
Expenditure (including the payment in clause 3.1) and gives
notice of this to ADX, or on 30 September 2010, whichever
comes first.
3.4 RMMI
must contribute at least $48,000 to Joint Venture
Expenditure (including the payment in clause 3.1), for each
permit year it enters.
3.5 If
RMMI fails to spend the sum of $1 million on Joint
Venture Expenditure during the Earning Period then it and
EBR shall be deemed to have withdrawn from the Joint
Venture unless EBR agrees to meet RMMI's outstanding
commitments pursuant to clause 13 unless this period has
been extended by Force Majeure or by mutual agreement
between the Participants.
3.6
Upon
contributing $1 million to Joint Venture Expenditure
during the Earning Period and giving notice thereof to ADX,
RMMI and EBR shall be deemed to have earned a 70% Joint
Venture Interest so that the Joint Venture Interests of the
Participants shall then be:
RMMI
51%
EBR
19%
ADX
30%
<PAGE>
3.7 If ADX
is not satisfied that RMMI has made an earning
contribution asserted by it under this clause 3 it must
give notice to RMMI within 21 days of receiving a notice
from RMMI under clause 3.3. If the Participants are unable
to resolve any dispute arising under this clause either
party may require the matter to be referred to an auditor.
RMMI may extend the Initial Earning Period of the Further
Earning Period (as the case may be) for such period as may
be agreed between the Participants or determined by the
auditor to be reasonable so as to complete its earning
obligations where it is agreed or determined RMMI has not
made a sufficient contribution.
<PAGE>
4.
ADX
ELECTION UPON EBR EARNING ITS 70% INTEREST
4.1 Upon
RMMI giving written notice to ADX that it has earned
its 70% Joint Venture Interest pursuant to clause 3.7, ADX
may elect, by notice in writing to RMMI within 30 days,
that
it will:
(a)
contribute its 30% share of Joint Venture
Expenditure; or
(b) dilute
in accordance with the formula set out in
clause 10. The sole right and responsibility with
respect to the dilution percentage is to be at the
cost of and for the benefit of EBR who shall meet
the additional expenditure with respect to this
dilution.
5.
ELECTION UPON EBR COMPLETING A BANKABLE FEASIBILITY STUDY
5.1 Upon
completion by RMMI and/or EBR of a Bankable
Feasibility Study (BFS) RMMI and/or EBR must give ADX a
written copy of the Bankable Feasibility Study and ADX must
within 30 days of receipt of the Bankable Feasibility Study
elect to pay its then participating interest or withdraw
from the Joint Venture.
5.2 All
parties must offer their respective Joint Venture
Interests as security for project financing of development
and production.
6.
MANAGER
6.1 RMMI
shall be the Manager while it is the sole contributor
to Joint Venture Expenditure and shall be entitled to
remain the Manager (subject to clause 6.2) while it holds a
Joint Venture Interest of 51% or greater.
6.2 The
Manager:
(a) may
resign on 30 days' notice to the Participants;
or
(b) may be
removed by resolution of the Operating
Committee or if it commits gross negligence or
wilful default; and
upon retirement or removal of the Manager, the Participants
shall appoint a Manager by agreement between them, or,
failing this, by resolution of the Operating Committee.
6.3 While
RMMI remains the sole contributor to Joint Venture
Expenditure it shall (as Manager) have the sole
responsibility for determining and carrying out programmes
and budgets. Notwithstanding the foregoing, RMMI shall
provide copies of proposed programmes to ADX and shall
allow EBR and
ADX the opportunity to comment upon such
proposed programmes but RMMI shall not be bound to act on
such comments.
6.4 After
RMMI ceases to be the sole contributor to Joint
Venture Expenditure the Manager shall prepare programmes
and budgets for consideration by the Operating Committee.
Programmes and budgets shall be prepared for periods each
of 6 months duration commencing on 1 September and 1 March.
6.5 After RMMI ceases to be the sole contributor to Joint
Venture
Expenditure the Manager:
(a) shall
carry out the Joint Venture activities in
accordance with programmes and budgets approved by
the Operating Committee;
(b) may
not exceed an approved budget by more than 15%
without the prior consent of the Operating
Committee, except in relation to emergency
expenditure;
<PAGE>
(c) shall
be responsible for all day to day operations
of the Joint Venture which shall include managing
and supervising all approved programmes and budge
