JOINT VENTURE
AGREEMENT
ENTERED INTO AND
BETWEEN
CORPORACION AMERMIN,
S.A. DE C.V.
(OPERATING
PARTNER)
AND
MINAS DE TOPAGO, S.A.
DE C.V.
(MINORITY
PARTNER)
FOR
THE MINING,
EXTRACTION, PROCESSING AND
MARKETING OF
PROFITABLE MINERALS FROM
SEVERAL MINING
PROPERTIES.
PLACE & DATE:
CHIHUAHUA, CHIHUAHUA, MEXICO.
JUNE 9 th
, 2005.
Joint Venture Agreement
for the mining, extraction, processing and marketing of profitable
minerals from several mining properties , entered on and
between CORPORACION AMERMIN,S.A. DE C.V. (that hereinafter
shall be referred to as the OPERATING PARTNER ) hereby
represented by its Sole Administrator RAMIRO TREVIZO
LEDESMA, on one hand and on the other MINAS DE
TOPAGO, S.A. DE C.V. (that hereinafter shall be referred to as
the MINORITY PARTNER ) hereby represented by its Sole
Administrator ING. MIGUEL CERVANTES SOTO , according to the
following:
S T A T E M E N T
S
A).
The MINORITY
PARTNER by means of its legal representative states as
follows:
I.-
That the body corporate
he is representing is a Mexican company duly formed in Chihuahua
City, State of Chihuahua, on January 13 th ,1995,
before Maria del Carmen Valenzuela Breach, Notary Public number 26,
through Public Deed number 1690, and filed in the Chihuahua City
Registry of Commerce under number 1243, page 61 of Book
648.
II.-
That the company he is
hereby representing has the lawful control of the following mining
properties:
PROPERTY
1:
Property’s
name................................... ”LA COLMENA
”
Type of
concession..............................Exploitation
Title
number........................................ 181965
Property’s
location.............................. Municipality of
Chinipas, State of Chihuahua, Mexico
Property’s
surface................................ 16 hectares
PROPERTY
2:
Property’s
name................................... ”LA BILLONARIA
”
Type of
concession..............................Exploitation
Title
number…......................................196120
Property’s
location................................Municipality of Chinipas,
State of Chihuahua, Mexico
Property’s
surface................................34 hectares
PROPERTY
3:
Property’s
name................................... ”CUITLAHUAC
”
Type of
concession..............................Exploration
File
number….......................................191845
Property’s
location.............................. Municipality of
Chinipas, State of Chihuahua, Mexico
Property’s
surface................................150 hectares
PROPERTY
4:
Property’s
name................................... ”LA MEXICANA
”
Type of
concession..............................Exploitation
Title
number......................................... 211981
Property’s
location.............................. Municipality of
Chinipas, State of Chihuahua, Mexico
Property’s
surface................................ 675.32 hectares
The above mining
properties hereinafter shall be referred to as the
PROPERTIES.
III.-
That the
PROPERTIES are free of any encumbrances, liens, or domain
limitations at the time of signing of this Agreement ( the “
Date of Signing ”).
IV.-
That the
PROPERTIES are not in compliance with the
Federal Law of Duties and the Mining Law as to the payment of
surface taxes; thus there are past amounts due related with the
said tax, and this event was previously informed to the
OPERATING PARTNER. Besides, the aforesaid due
taxes shall be paid as provided for in paragraph “C)”
of Clause 3 hereunder.
V.-
That the
PROPERTIES are not currently engaged under any previous
valid contract or agreement, either verbal or in written, with a
third party.
VI.-
That all rights derived
from the mining certificates or titles to the PROPERTIES
have not been transferred, granted, sold, or leased to any other
party, and the body corporate entitled to such rights at this time
is the MINORITY PARTNER solely.
VII.-
That during the legal
effect of this Agreement, the mining rights derived from the titles
to the PROPERTIES shall not be waived or relinquished; and
no applications for reduction, unification or grouping shall be
filed neither, unless the OPERATING PARTNER agrees to. In
addition, the mining rights to the PROPERTIES shall not be
conveyed, engaged or burdened, either totally or partially during
the existence of this Agreement. The MINORTY PARTNER is
hereby fully aware that it must comply with the obligations that
the Mining Law imposes to any holder of a mining property,
according to the Article 27 paragraph II thereof.
VIII.-
That hereby grants the
OPERATING PARTNER , with the exclusive rights of mining,
extracting processing and marketing all profitable minerals (the
“ Minerals ”) that exist within the
PROPERTIES.
It shall be understood
by " Minerals " any and all minerals, either precious
or base, metallic or non-metallic, that can be found in or on the
PROPERTIES , accordingly with the applicable laws,
regulations, dispositions, decrees or any other legal
ordinance in force, they being feasible of exploration,
development, exploitation, extraction, processing, purchase and
disposal, including all concentrates and metals .
IX . -
That along with all of
the above granted rights for extracting, mining, processing and
marketing the Minerals , all rights to the land, water
rights, installations, and related facilities that could exist
within the PROPERTIES are also included.
Procurement of any kind
of necessary permits or permissions -either from governmental
offices or third parties- to achieve the business terms of this
Agreement, shall be sole responsibility of the MINORITY
PARTNER with assistance from the MINORITY PARTNER
.
B).
The OPERATING
PARTNER by means of its legal representative states as
follows:
I.
That the body corporate
he is representing is a Mexican company duly formed in Chihuahua
City, State of Chihuahua, on August 9 th ,1995, before
Mr. Jose R. Miller Hermosillo, Notary Public number 2, through
Public Deed number 9311, and duly registered in the Chihuahua
City’s Registry of Commerce under electronic file number
21161*10, and that the company’s taxpayer number is
CAM950810K77.
II.
That the company he is
hereby representing shall contribute the initial start-up capital
for the project, advancing and financing the necessary investment
funds for acquiring, hauling, and installing any equipment and
machinery as well as a processing plant or mill with a capacity
for 75 tons per day; funds to afford payments for fuel,
payroll and wages, buying of a vehicle for personnel
transportation, work shops, offices, road rebuilding and other
needed expenses to start the project’s operation stage
timely and for this event both parties shall give their best.
The initial funds that shall be invested in the aforesaid
acquisitions and expenditures are US 450,000,00 (Four
Hundred and Fifty Thousand Dollars NO/100) as a minimum initial
capital investment, that shall be reimbursed or paid back as set
out herein. The payment for exclusivity as mentioned in Clause 3
of this Agreement is included in the above initial
capital investment.
III.
That purchase of
additional equipment and increase of capacity of the processing
plant, must be mutually agreed to, and shall be made
according to the provisions of this Agreement.
IV.
That during the legal
effect of this Agreement, the mining titles to the
PROPERTIES shall be kept in good tax and legal standing,
paying the surface tax every six months according to the Mining Law
and its Regulations, and providing funds to update unpaid taxes as
provided for in Clause 3 herein, filing the mandatory assessment
work reports and technical reports in the Secretariat of Economy as
well.
V.
That the OPERATING
PARTNER shall also have the right of first refusal on entering
into an agreement with the MINORITY PARTNER or amending this
Agreement as to any other mining or mineral
processing activity owned or controlled by the latter and
located within The PROPERTIES.
VI.
That to successfully
achieve the purposes of this Agreement, the legal representative of
OPERATING PARTNER states that the company has funds enough
and expertise to develop the PROPERTIES, thus, being able to
carry out and/or perform any and all activities, including the
carrying-out of mining works and road rebuilding for accessing the
plant site; to bring in required contractors, installation of
facilities such as: canteens, dormitories,etc., bring in equipment,
machinery, devices, tools, and materials; and exercise all other
rights conferred by any Mexican Law for the benefit of the
OPERATING PARTNER .
NOW,
THEREFORE, time is of the essence, and
considering that the PROPERTIES require: (a) important
investments as to equipment and machinery, (b) remaking the plant
site access road, and (c) performance of significant mining works,
the MINORITY PARTNER recognizes that working together
with the OPERATING PARTNER will improve the
efficiency of time required to perform the mining,
extracting, processing and marketing of the Materials . The
OPERATING PARTNER will lead the effort, and in general will
coordinate the activities and procurement of the appropriate first
machinery and equipment and sufficient start-up funds as set out
herein, according to the following:
C L A U S E S
1. Operation and
Management of the Project.
A).
The MINORITY
PARTNER hereby agrees that OPERATING PARTNER shall
manage the project, having the latter the right to freely
appoint managers, supervisors or foremen depending on the
development itself of the project. However, the MINORITY
PARTNER shall have the undeniable right, at any time, to
perform audits -either directly or through an Accounting Firm- to
the accounting books and ledgers that must be kept by the
OPERATING PARTNER related to the project. The
Accounting Firm fees
shall be paid at the MINORITY PARTNER ’s sole expense.
Both parties hereby agree to jointly conduct the
production/operation activities, even appointing an Operation
Manager by common consent, who should be responsible for the
performance of the production works.
B).
If an Operation Manager
is appointed according to the above paragraph, such Manager should
be wholly responsible for the day to day operation and conduction
of the mining, extracting processing, and marketing of the
Minerals in compliance with the applicable environmental
regulations and other related laws and statutes.
C).
However, the
OPERATING PARTNER is hereby authorized to seek for
specialized constructors or mining agents or companies to perfom
certain works or activities within the PROPERTIES , during
the existence of the project, whose fees or wages shall be paid by
the OPERATING PARTNER and afterwards redeemed as set our
herein.
2. Duration of this
Agreement.
The term of this
Agreement is for a period of seven (7) years, as of the Date of
Signing , obligatory for the MINORITY PARTNER , and
voluntary for the OPERATING PARTNER. However, this Agreement
will be periodically extended as long as the mining, extracting,
processing and marketing of the Materials are profitable and
taking place.
3. Grant of
Exclusivity Rights.
A).
The OPERATING
PARTNER shall contribute the amount of US 100,000.00
(One Hundred Thousand Dollars NO/100) at the Date of Signing
or according to the schedule set out hereunder, to attain the
exclusive rights for mining, extracting, processing, and marketing
the Minerals that exist within the
PROPERTIES.
B).
The above US
100,000.00 should be contributed by the OPERATING PARTNER
according to the following schedule:
1. US 25,000.00 that
were already paid to the MINORITY PARTNER .
2. US 30,000.00 at the
Date of Signing .
3. US 45,000.00 on or
before August 5 th , 2005.
C).
The above funds shall
be mainly used to pay off all of the pending surface taxes owed by
the MINORITY PARTNER as to the PROPERTIES, imposed by
Article 27 paragraph II of the Mining
Law in force, and once
said taxes are paid off, the MINORITY PARTNER shall deliver
the OPERATING PARTNER copies of the corresponding
payment receipts or payment tax forms.
4. Ownership of the
PROPERTIES.
Both parties hereby
acknowledge that the MINORITY PARTNER is the sole owner of
the PROPERTIES and will remain as such until termination of
this Agreement, unless the MINORITY PARTNER decides to sell
them to the OPERATING PARTNER that shall have the first
right of refusal to buy the PROPERTIES . The
MINORITY PARTNER could sell the PROPERTIES to a
third party, only if the OPERATING PARTNER grants its
consent to.
5. Allocation or
Distribution of Profits.
A).
In return for its
start-up investment and equipment and machinery, technical
expertise, and management role, the OPERATING PARTNER will
be entitled to Sixty percent ( 60%) of the net profits, and
the MINORITY PARTNER will be entitled to Forty percent (
40 % ) of the net profits in return for contributing the
PROPERTIES to the project and other contributions set out
herein.
B).
It shall be understood
as “Shareable Net Profits”, any resultant amount
after deducting the below items from the total earned incomes of
the project’s operation activities, either earned by sales of
the Minerals or its concentrates or similar mineral products
or earned by interests or other incomes or yields:
I. The mutually
approved costs for acquisitions, installations, works, equipment
and any other activity or transaction as mentioned in this very
same letter “B)” paragraph II of this Agreement, that
had been performed during the first stage of the project and the
operation of the processing plant had started accordingly,
including the contribution or payment for exclusivity, as
provided for in Clause 3, Grant of Exclusivity Rights;
II. The mutually
approved costs and expenses incurred because of the operation and
mining of the project itself such as: extraction and
marketing of the Minerals , concentrates and other similar
mineral products, including any type of taxes, duties,
royalties, charges, or deductions made as a result of the sales of
the Minerals.
III. The reasonable
costs incurred in the performance of any technical work or
technical study, as well as payment of surface taxes, duties,
expenditures or fees to keep in good standing the PROPERTIES
and save them free of liens or burdens;
IV. The monies enough to
form a contingency fund, whose minimum balance shall be freely
set up or agreed by the
parties; however, such minimum balance shall not be lower than ten
(10) per cent of the incomes that had been earned during the period
of time shown in every payment receipt delivered by the smelter or
buyer.
Once the shareable net
profits are calculated and duly paid between the parties, each
party shall be liable of paying its own income tax according to the
applicable fiscal laws.
C).
There will be a
periodic disbursal of net profits every month, in an amount
consistent with the above percentage of ownership interests, or at
any other time with the approval of the other party. In either
case, the total amount of withdrawals shall not, at any time,
jeopardize the carrying-out of the production
activities.
D).
Both parties hereby
agree that the mechanism for sharing out the net profits as
provided for in letter “B)“ paragraph I) of this
Clause, shall be applicable as long as credit balances are shown in
the OPERATING PARTNER ’s accounting books , and once
the initial capital investment is fully redeemed, the
corresponding deduction shall not be made to the shareable net
profit.
E).
If the
OPERATING PARTNER decides to terminate its involvement, the
MINORITY PARTNER will have the first right of refusal to
purchase the OPERATING PARTNER’ s interest and
viceversa.
F).
The OPERATING
PARTNER shall have the right to increase the processing plant
capacity up to 175 tons per day, having the MINORITY
PARTNER’ s consent to such increase. The allocation and
distribution of the net profits related to the aforesaid increase,
shall be made according to the following terms:
1. The OPERATING
PARTNER shall make the above increase to the plant capacity at
its sole expense;
2. The MINORITY
PARTNER shall be paid according to its ownership interest as
set out in paragraph “A)” of this clause (40%),
as if the increase was not made yet, until full reimbursement of
the monies disbursed to increase the plant capacity; and
3. Once the OPERATING
PARTNER has been reimbursed as stated above, the MINORITY
PARTNER shall start receiving its net profits according to the
new plant capacity (175 tons per day).
6. Equipment and
Machinery acquired during this Agreement.
A).
All equipment and
machinery acquired by the OPERATING PARTNER at its sole
expense during the legal effect of this Agreement, shall be deemed
as exclusive property of the OPERATING PARTNER until
termination thereof. However, If the project turns out
unprofitable, such equipment and machinery shall become common
property of the parties according to their corresponding ownership
interests as provided for in Clause 5 paragraph “A)” of
this Agreement, provided that the purchase cost of the aforesaid
equipment and machinery had been redeemed already at the time of
the project becoming unprofitable.
B).
If, during the legal
effect of this Agreement, a proposal of purchase is made to the
parties from a third party, and such potential buyer was
interested in acquiring the above equipment and machinery along
with the PROPERTIES , the buy-out price shall be shared or
split fifty-fifty (50%-50%)
between the parties if they decide to accept the proposal.
7. Possibility of
assignment of rights.
The OPERATING
PARTNER shall have the right to partially transfer or assign to
a third party its rights and/or obligations stated herein, provided
the MINORITY PARTNER gives its permission in written to the
OPERATING PARTNER to do so and viceversa, and the
assign or transferee fully oblige himself to assume the
obligations set out in this Agreement for the OPERATING
PARTNER before the MINORITY PARTNER .
8. Costs and
fees.
The
OPERATING
PARTNER shall pay all taxes, duties, notary’s fees or
attorney’s fees which will be a cost to this Joint Venture
Agreement.
9. Governing
Law.
A).
The parties hereby
recognizes that this Agreement is regulated by the provisions of
the Federal Commerce Code in first place, the Federal Civil Code in
second place and the Civil Code of Chihuahua State in third
place.
B).
The parties hereby
agree that the state and federal courts with competent jurisdiction
in the City of Chihuahua, State of Chihuahua, shall have the
authority to resolve any lawsuit or claim arising under this
Agreement. The parties hereby renounce and waive to the
jurisdiction of any other court to whose jurisdiction they might
have a right to, because of their current or future
domiciles.
10. Default of
Obligations.
A).
The parties shall be
entitled to issue the rescission of this Agreement (the
“Notice of Rescission” ) in the event of
non-compliance with any of the obligations entered into herein.
In the event of default of obligations, the affected party
shall deliver to the address of the defaulting party, as set out
hereunder, a notice of default of obligations (the “Notice
of Default” ) and it shall grant to the defaulting party
thereon a term of thirty (30) calendar days, commencing
on the date of receipt of the Notice of Default , to comply
with any and all of the defaulting obligations. The aforesaid
notice may be made by any type of delivering service or courier
with acknowledgment of receipt. The date that is shown in such
acknowledgment of receipt shall be deemed as the commencement of
the above term of fifteen days.
B).
The affected party
shall be entitled to issue the Notice of Rescission
–without having recourse to the law- at the expiration of the
term mentioned hereinbefore, as the case may be, in the event that
the defaulting party does not comply with any and all of the
outstanding obligations within the said term; therefore, the legal
effect of this Agreement shall completely cease as of the day of
acknowledgment of receipt of the Notice of
Rescission.
C).
Any notice given or
required to be given between the parties as a result of the
fulfillment of this Agreement, shall be made to the following
domiciles:
to the OPERATING
PARTNER:
At’n: Ramiro
Treviño Ledesma and/or Lic.Rubén Perales R.
Calle Ernesto Talavera
número 1215, Colonia Linss,
C.P. 31020, Chihuahua,
Chihuahua
to the MINORITY
PARTNER :
At’n: Ing. Miguel
Cervantes Soto
Calle Mercurio
número 3901-16, Fracc. Rincón Colonial,
C.P.31189, Chihuahua,
Chihuahua
The parties may freely
change the above domiciles at any time, provided they give each
other a timely notice in writing within ten (10) calendar
days as of the day of such changing of domiciles.
11. Force
Majeur.
Fulfillment of the
obligations and responsibilities set out in this Agreement may
temporarily be suspended due to acts of god or force majeur, such
as: strikes, wars, riots, revolutions, disturbances, earthquakes,
fires, actions from third parties, seizure of assets from lawful or
de facto officers, or by any other similar cause out of the
parties reach. the parties agree in suspending this contract legal
effects regarding the affected obligations solely to be
reestablished once the force majure ceases. All time limits
or deadlines set out herein shall be extended accordingly. In
any event, the parties oblige themselves to reasonably reduce the
interruptions or trying to solve the problems as soon as possible.
12. Termination of
this Agreement.
This Agreement may be
terminated by the occurrence of any of the termination causes set
out in applicable Mexican mining and mercantile
legislation.
13. Removal of
Equipment and Machinery.
Upon
termination of this Agreement as a result of the occurrence of any
of the termination causes set out above, the OPERATING
PARTNER shall be granted a term of eight hundred and eighty
(180) calendar days to remove from the
PROPERTIES any movable goods, including any equipment,
machinery, tool or device, that were used during the
performance of the mining, processing and marketing of the
Materials, unless the aforesaid effects are seized or
attached in any other lawful mean as a result of a lawsuit filed by
the MINORITY PARTNER itself because of an unpaid debt from
the OPERATING PARTNER to the first mentioned, or
impossibility of removal as provided for in Clause 6, paragraph
“A)” of this Agreement.
14. Successors and
assigns.
This Agreement is
binding upon, and inures to the benefit of, the MINORITY
PARTNER and the OPERATING PARTNER and their respective
successors and assigns.
15.
Languages.
The parties hereby
covenant and agree that this Agreement is executed and delivered in
both English and Spanish, and that in the event of any discrepancy
between the two versions, the Spanish version shall
prevail.
16. Annulment of
previous agreements.
Both parties hereby
acknolwedge that any existing and previous agreement between them
as to the PROPERTIES , either verbal or in
written, shall be superseded by this Agreement.
17. Delivery of
copies of the mining titles to the PROPERTIES.
The MINORITY
PARTNER hereby delivers to the OPERATING PARTNER copies
of the mining titles or certificates to the PROPERTIES , for
best legal efficacy of this Agreement.
THE
PARTIES.
The OPERATING
PARTNER:
/s/ Ramiro Trevizo
Ledesma
CORPORACION AMERMIN,
S.A. DE C.V.
Represented by:
RAMIRO TREVIZO LEDESMA.
The MINORITY
PARTNER:
/s/ Ing.Miguel
Cervantes Soto
MINAS DE TOPAGO, S.A.
DE C.V.
Represented by:
ING.MIGUEL CERVANTES SOTO.
Tara Gold Joint Venture
English 2-17-07
12
MINING EXPLORATION AND EXPLOITATION
CONTRACT AND SURRENDER OF PROPERTY CONTRACT IN ORDER TO TRANSMIT
TITLE HOLDING OF MINING CONCESSIONS CELEBRATED BY A ) MINAS
DE TOPAGO, S.A. DE C.V. REPRESENTED BY MR. MIGUEL CERVANTES SOTO IN
HIS LEGAL PERSONALITY AS SOLE ADMINISTRATOR AND B )
CORPORACIÓN AMERMIN, S.A. DE C.V. REPRESENTED BY ITS SOLE
ADMINISTRATOR, MR. RAMIRO TREVIZO LEDEZMA IN ACCORDANCE WITH THE
FOLLOWING:
DECLARATION
Parties declare that for the purposes of
these Contracts, the abbreviations used will be understood
as:
EXPLORER
COPORACIÓN AMERMIN, S.A. DE C.V.,
represented by Mr. Ramiro Trevizo Ledezma in his personality as
Sole Administrator and legal representative with
General Powers for Litigation and Collection, Acts of
Administration and Dominion as is evinced in Declaration II,
numerals 1 and 2 of this present instrument; as well as any person,
society or judicial entity either national or foreign that he might
appoint for the exercise of any of the rights derived from these
Contracts and is legally qualified for such an effect.
CONCESSIONAIRE
MINAS DE TOPAGO, S.A. DE C.V. as well as
any person or persons, society or judicial entity, national or
foreign it may appoint for the exercise of any of the rights
derived from these Contract and is legally qualified for such an
effect.
LOTS
The ones stated in extension and limits,
named and covered by the Mining Concessions that are specified in
this instrument in numeral 2 of the CONCESSIONAIRES’
Declarations, as well as those derived from them.
RIGHTS
Rights derived from the Mining Concession
titles regarding THE LOTS.
OPERATIONS
Development and mining operations carried
out at and for the benefit of THE LOTS.
LAW
Mining Law
REGULATION
Mining Law Regulations
SECRETARY
Secretary of the Economy
LFD
Federal Law on Rights
13
EUA
United States of America
RFC
Taxpayers Registration Number
I. The CONCESSIONAIRE
declares:
1. To be a Corporation established
accordingly to Mexican law and in compliance with first testimony
of P ublic Writ number 1690, granted in the city of Chihuahua
on the 13 th January 1995 before the Faith of María
del Carmen Valenzuela Breach, Notary Public number 26 for the
Morelos Judicial District, and is inscribed under numeral 1243 of
Folio 55 of Book 649 of the Section of Commerce of the Real Estate
Records Office of the Morelos District of the State of
Chihuahua.
2. The management of the Society was
entrusted to a Sole Administrator whose appointment befell on Mr.
Miguel Cervantes Soto as is evinced in the Sixth Transitory Clause
of the Society’s Incorporation Papers and is means through
which he was granted the faculties contained in Article
Thirteenth of the Company’s Statutes consisting of a General
Power for Litigation and Collection, Acts of Administration and
Dominion and power that is inscribed under numeral 1244 of Folio 55
of Book 649 of the Section of Commerce of the Real Estate Records
Office of the Morelos District of the State of
Chihuahua.
3. That MINAS DE TOPAGO, S.A. DE C.V. is
the legitimate title holder of the rights derived of the following
mining concessions:
LOT N° 1
|
|
|
|
Name
of LOTS
|
“LA COLMENA”
|
|
Type
of Concession
|
Exploitation
|
|
Title number
|
181965, under registration numeral 248 of Public Folio of Mines on
18 th March 1988.
|
|
Location
|
M
|
