MARJAN MINING
JOINT VENTURE AGREEMENT
Joint
Venture Agreement dated as of October 28, 2005 (this
"Agreement")
among Caucasus Resources Pty Ltd, an Australian
Company ("CR"); Global Gold
Mining, LLC, a Delaware, USA limited
liability company ("GGM"); and SHA, LLC, an
Armenian limited liability company, which
is a subsidiary of GGM ("SHA").
RECITALS
SHA is the
licensee of the Marjan Mine property in Armenia ( "Marjan").
The parties
desire to develop Marjan through a joint venture and for SHA to
transfer its license and any other rights in Marjan to an
American limited
liability company owned jointly by CR and
GGM.
AGREEMENT
NOW THEREFORE,
the parties hereto hereby agree as follows:
1. LLC Formation.
CR and GGM shall establish a joint venture limited liability company
(the "JV
LLC") under the laws of the State of Delaware, USA, with an
operating
agreement (the "LLC Agreement"), which CR and GGM are signing
concurrently
herewith, and a copy of which is attached hereto.
2. LLC Ownership, Funding.
(a) The respective
percentage
interests of CR and
GGM as members of
the JV LLC shall
be as follows:
(i) Initially
CR shall have a 40%
interest and GGM shall have a
60% interest
in the JV LLC.
CR shall be
responsible
for all other
payments
of the purchase price and for all exploration, development,
capital, operating and
other expenses
(subject to clause (b)
below)
without further
obligation of GGM to contribute funds to maintain its
interest. Each party
shall nevertheless
pay its own customary
staff
and out-of-pocket expenses.
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(ii) CR's percentage
interest shall increase to 51% and GGM's
percentage interest
shall decrease to 49% upon CR's spending $500,000
(U.S), pursuant to a
mutually agreed upon
budget, for exploration
relating to Marjan within two years from the date hereof.
(iii) CR's percentage
interest in the JV LLC
shall increase to
80% and GGM's
percentage
interest shall decrease to 20% upon CR's
successfully bringing Marjan into production.
(iv) CR's percentage
interest shall decrease to 40% and GGM's
percentage interest
shall increase to 60%, unless within 4 years from
the date hereof, CR
shall bring Marjan into successful production or
CR and GGM shall have
agreed to a
commercially
reasonable
business
plan for bringing Marjan into production.
(b)
Following commencement of production of Marjan, both parties
shall
contribute to
the JV LLC's production expenditures on a pro rata basis.
(c) The terms
