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Exhibit 10.6
EXPLORATION AGREEMENT WITH AN OPTION TO
PURCHASE
In the city of San Salvador de Jujuy, Province
of Jujuy, on July 6 th , 2007, between Mr. Antonio
Augustin Giulianotti, DNI No. 7.379.817, with domicile in Dr.
Aparicio Street, No. 667, Borough of Nieva, of the city of San
Salvador de Jujuy, Province of Jujuy, who performs in this act on
his behalf and representing MANUEL BERNAL MATEO, Argentinean, DNI
No. 131016435, according to special power of attorney No. 125 of
March 15 th , 2006, presented before Notary Public Cesar
Ricardo Frias, which to date is still valid and was not revoked nor
limited in one part (hereinafter THE TITLE HOLDER), and
hereinafter, Mr. FABIO MONTANARI, with Italian Passport No.
E571059, with current domicile at Via il Perugino 8, No. 09121
CAGLIARI, Italy, who performs in this act as President of the
company INCAS MINERAL SA incorporated according to Public Deed No.
387 on its date, executed before Notary Public of this City Cesar
Ricardo Frias in the other (hereinafter THE INTERESTED PARTY),
jointly the parties, in common agreement state;
PRECEDENTS
THE TITLE HOLDER has registered in his name,
before the Court of Mines of the Province of Jujuy, the mining
property identified as File 255-2-1948, with Mining Registry Palca
Ingenio, located in the Department of Santa a Catalina of this
Province, with 30 hectares (thirty hectares) and under proceedings
through file 089-B-1996 Mine El Torno Norte with 2352 hectares (two
thousand three hundred fifty two hectares) and file 090-B-1996 Mine
El Torno Sur with 1565 hectares (One thousand sixty five hectares),
Mine Manolo File 064-B-19996; Mine La Despreciada, File 127-G-1997,
(herein after the MINING PROPERTY).
Having THE INTERESTED PARTY interest of
obtaining from THE TITLE HOLDER the exclusive right to explore the
MINING PROPERTY, with an option to purchase the same, THE
INTERESTED PARTY and THE TITLE HOLDER agree to execute a Contract,
with the following clauses:
STATEMENTS AND GUARANTEES
FIRST:
1- THE TITLE HOLDER declares and guarantees to
THE INTERESTED PARTY that:
a) He has the exclusive right to execute and
carry out this Contract, which is obligatory and is demandable to
both parties accordingly to its terms.
b) He has the right and merchantable title over
all the MINING PROPERTY, which is free of encumbrances, mortgage,
execution or liens.
c) There are no claims over the real property
neither in the MINING PROPERTY nor, in the best of his knowledge,
grounds to such claims.
d) There are neither other agreements nor
options related to the exploration or the exploitation of the
MINING PROPERTY.
The undersigned CESAR RICARDO FRIAS, Authorizing
Notary Public with Title No. 36 declares and ratifies what Mr.
Giulianotti above mentioned himself
1
(THREE UNINTELLIGIBLE SIGNATURES)
And for Mr. Manuel Bernal Mateo in points a),
b), c) and d) is true as he confirmed in the Province Mining
Office.
According to his knowledge, information and
belief there are no pending or starting legal actions, no lawsuits,
no claims or disputes related to the MINING PROPERTY or that could
jeopardize its possession.
f) The MINING PROPERTY has not been explored or
exploited with mechanical equipments that might have caused
environment changes or damages or with the potential environment
damages, such as drainage of acid rocks. With the purpose to verify
that condition, within the terms of law, an environment survey will
be conducted with the intervention of the Mining Police of the
Province of Jujuy and the parties
1.2
The statements and guarantees established in the
preceding clause 1.1 have been considered by the parties as
conditionals of the Contract and will be valid during all time of
this Contract and after the purchase of the MINING PROPERTY by THE
INTERESTED PARTY, therefore each party is obliged to indemnify and
free the other of any loss, damage, cost or legal action resulting
from misrepresentation of any of the preceding statements and
guarantees
TERM
SECOND:
The term of effectiveness of this Contract will
start upon the signature of the same and will be valid all time
needed for the execution of what it is prescribed in clauses NINTH
TENTH.
VALUATION AND EXPLORATION
THIRD:
THE TITLE HOLDER grants THE INTERESTED PARTY the
exclusive possession of the MINING PROPERTY for the term of this
Contract, authorizing the same all mining rights conferred to THE
TITLE HOLDER, which includes the exclusive right to assess the
MINING PROPERTY and conduct in it exploration operations, as well
as any other work related with this activity, according to the
method, form and extension THE INTERESTED PARTY establishes in his
own criteria.
FOURTH:
4.1
In this act THE TITLE HOLDER delivers to THE
INTERESTED PARTY all the geological, administrative and legal
information in his possession over the MINING PROPERTY object of
this Contract.
4.2
During the Term of this Contract THE INTERESTED
PARTY, his dependents or representatives will have the right to
conduct in the MINING PROPERTY all the exploring activities THE
TITLE HOLDER has the right to conduct according to the Argentinean
Mining Code.
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(THREE UNINTELLIGIBLE SIGNATURES)
4.3
THE TITLE HOLDER authorizes THE INTERESTED PARTY
to conduct in the MINING PROPERTY topographical, geographical,
geophysical surveys, perforations, trenches and wells or any other
kind of mining work of exploring nature. THE INTERESTED PARTY will
extract, analyze and process samples, both geochemical and
metallurgical, including in industrial size, sending them to labs
or research centers and deliver samples in volumes required to be
appraised by potential buyers.
4.4
THE INTERESTED PARTY, his representatives,
dependents, agents or workers of his own of from contractors will
have the right to access the MINING PROPERTY without any limitation
and will put in the same all machineries, tools, equipments and
items deemed necessary or convenient. Upon execution of this
Contract, by any cause, THE INTERESTED PARTY may within the one
hundred and twenty (120) calendar days starting the date of
finalization of this Contract, withdraw to his expense said
machineries, tools, equipments and items.
4.5
THE TITLE HOLDER or his representatives will
have the right to access the MINING PROPERTY and to exploit the
alluvial part of the field until THE INTERESTED PARTY does not
exercise the option to purchase. THE INTERESTED PARTY will not be
held responsible of any damage or loss that may suffer THE TITLE
HOLDER or his representatives due to his work or visits to the
MINING PROPERTY, with the exception of those caused by guilt or
negligence of THE INTERESTED PARTY.
FIFTH:
5.1
THE INTERESTED PARTY will be held responsible of
the hiring of the required personnel for the execution of his
contractual obligation and must, in respect to said personnel, give
strict compliance to legal prescriptions regarding labor and
temporary laws.
5.2
THE INTERESTED PARTY is obliged to subscribe a
Liability Insurance, to cover contingencies product as consequence
of the activities that THE INTERESTED PARTY carries out in the
MINING PROPERTY.
5.3
THE INTERESTED PARTY is obliged to keep THE
TITLE HOLDER free of liability of any damage or loss from labor,
civil, commercial or criminal lawsuits or claim made by third
parties as consequence of the activities that THE INTERESTED PARTY
carries out in the execution of this Contract, as well as damages
to third persons, their personnel and / or subcontractors and
caused to the environment. In any case of events mentioned above,
THE INTERESTED PARTY will satisfy the cost of legal defense of THE
TITLE HOLDER in courts.
SIXTH:
6.
In case the option to purchase is not exercised
by THE INTERESTED PARTY, he is obliged to provide THE TITLE HOLDER
with all pertaining data referring to cocoon beds and evidence of
minerals discovered during the valuation and exploration of
the MINING PROPERTY.
THE INTERESTED PARTY is obliged to submit THE
TITLE HOLDER a quarterly report with technical data and detailed
expenses. Said report will be presented within the thirty (30) days
in the end of each Quarter. Furthermore,
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(THREE UNINTELLIGIBLE SIGNATURES)
THE INTERESTED PARTY will present THE TITLE
HOLDER a complete annual report with technical data and detailed
expenses mentioned in this paragraph.
THE TITLE HOLDER is obliged not to conduct any
kind of manifest, document presentation or any other act, paperwork
or diligence, whatever its nature, related with the MINING
PROPERTY, before the Court of Mines of the Province of Jujuy or
before other offices, with the exception of those required to
comply with what is prescribed in Clause 6.4, without prior consent
of THE INTERESTED PARTY. Non compliance of this will cause the
rescission of this Contract, to the option of the MINING PROPERTY,
holding THE TITLE HOLDER responsible for damages and losses caused
to THE INTERESTED PARTY as consequence of the same.
THE TITLE HOLDER can conduct audits over the
exploration tasks and other mining activities that THE INTERESTED
PARTY conducts over the MINING PROPERTY, with his own auditors or
those appointed by THE TITLE HOLDER.
THE INTERESTED PARTY will conduct all
proceedings required in order to, in such case, register before the
Court of Mines of the Province of Jujuy the Statements of
Discoveries made in the area covered by the MINING PROPERTY and any
other mining right, which will be registered under the name of THE
TITLE HOLDER.
The statements and other mining rights recorded
in the name of the TITLE HOLDER as consequence of exploring works
of THE INTERESTED PARTY within the MINING PROPERTY will be
automatically incorporated to the same and subject, consequently to
the Option to Purchase and all provisions of this Contract.
Unless the Court of Mines of the Province of
Jujuy requires the measurement, hoarding and registry of the MINING
PROPERTY, or if there is legal obligation to conduct them, the
figures of current legal provisions to the current date of
subscription will be kept until THE INTERESTED PARTY exercises the
Option to Purchase.
THE TITLE HOLDER will do anything is necessary
to maintain the term of his right over the MINING PROPERTY and for
that purpose, in this act grants a power of attorney to a
representative of THE INTERESTED PARTY, with the authority to
substitute, in order to intervene in his behalf in all necessary
proceeding to maintain the term of his right over the MINING
PROPERTY, granting the authorities required to conduct all
proceedings required to comply with what is prescribed in Clause
6.5, as well as to comply with the payment of legal fee.
THE INTERESTED PARTY will be in charge of all
related expenses to mining concerns and other obligations
established the Argentinean Mining Code, exploration and
exploitation regulations, writ publications, measurement cost,
easement indemnity or obligations with tenants, and also will be in
charge of seals and contribution charges from services applied
according to tax regulations of the Province of Jujuy, except for
what is prescribed in Clause TENTH, point 10.3. The corresponding
costs to compliance of the obligations mentioned here
will be included in the investment commitment
agreed by THE INTERESTED PARTY in Clause TENTH.
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(THREE UNINTELLIGIBLE SIGNATURES)
SEVENTH:
THE TITLE HOLDER voluntarily desists to conduct
during the time of this contract acts of disposition or encumbrance
on the MINING PROPERTY, what so ever its nature, including and not
limited to: sales, transfers, mortgages, assignments, leases,
contracting and provisions.
In this act THE TITLE HOLDER subscribe a
presentation to the Court of Mines of the Province of Jujuy
requesting the waiver mentioned in the paragraph above. This waiver
will be valid during the term of the contract but can be raised
unilaterally by THE TITLE HOLDER in case THE INTERESTED PARTY
desists to exercise the Option to Purchase of this Contract in the
Terms prescribed in the TENTH Clause.
In the endorsement of the referred waiver THE
TITLE HOLDER will proceed with the registry of this Contract before
the Court of Mines of the Province of Jujuy,
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