Exhibit
10.1
TRIMARK EXPLORATIONS LTD
4122 Cranberry Court
Vineland Ontario, L0R 2C0
Brownsville Company
70 East Beaver Creek Road, Unit 30,
Richmond Hill, Ontario,
L4B 3B2
Attention Adam Cegielski
Dear Mr Cegielski
September 26, 2006
Re: Option agreement between Trimark Explorations Ltd.
acting through
and on behalf of it's 100% wholly owned
subsidiary
Gambaro Resources Limited ("Trimark" or
"Optionor") and
Brownsville Company
("Brownsville" or
"Optionee,").
This option agreement (the "Agreement") sets out the terms
and conditions by which the Optionor, a corporation
incorporated under the laws of the Province of Ontario in
the case of Trimark and under the laws of Tanzania in the
case of Gambaro, agrees to grant to Brownsville, a company
incorporated under the
laws of the State of Nevada, the
sole and exclusive right and option to acquire up to a 100%
undivided right, title and interest in and to the Gambaro
Resources Property
(the "Option"), ") located in Njombe and
Songea districts, Tanzania and contains approximately 65.32
square miles being latitude 35 degree 00', 34 degrees 47'
west and longitudes 10 degrees 15'' and 10 degrees 27'
south, as described in Schedule A attached hereto (the
"Property").
This Agreement shall replace any previous agreements between
the parties and shall constitute the full agreement between
the parties.
1. THE
OPTION
.1. The Optionor hereby grants to
Brownsville the sole,
exclusive and irrevocable right and option (Option) to
acquire an undivided 100% right, title and interest in and
to the Property by:
Brownsville making the following cash, share and work
expenditure considerations to be delivered/met over a 36
month period from the signing of the definitive agreement as
more specifically detailed below:
A.
Brownsville
making, in favor of
Trimark, the following
cash payments totaling $100,000.00 US dollars over a 3
year period:
i) $25,000.00
within 45 days of
signing this agreement;
ii) an additional
$35,000.00 within 2
years of signing of
the definitive agreement;
iii) an additional $40,000.00 within 3 years of signing of
the definitive agreement.
B.
Brownsville
completing the
following cumulative
exploration expenditures on the property totaling
$1,000,000 US over a 36 month period:
i) $100,000.00
in cumulative exploration expenditure
within the first 12 months after signing the definitive
agreement;
ii) $500,000.00 in
cumulative exploration expenditures
within 24 months of signing of the definitive agreement;
iii) $1,000,000.00 in cumulative exploration expenditures
within 36 months of signing of the definitive agreement.
C. If 36 months after the
date of the definitive
agreement as set out in B above, Brownsville has not
completed exploration expenses of $1,000,000.00, Brownsville
may
still earn its 100% interest in the property if
Brownsville issues, in favor of Trimark payments totaling up
to
1,000,000 common shares of Brownsville or cash of up to
$1,000,000.00 us at Brownsville's sole option less the
cumulative explorations expenditures already paid and/or met
on
the property. The
value of the shares shall be
determined as the average share price of the shares over the
30
business days of trading prior to the 36 month period as
set
out herein however shall not be valued at less then
$1.00 per share. In the event such shares are valued at less
then
$1.00, Brownsville may still execute this buyout using
cash. The shares shall be subject to restrictions imposed by
any
exchange or trading system on which the shares are
traded as well or any other appropriate government or other
appropriate authority. All share certificates issued
pursuant to this definitive agreement shall have a 1 year
hold
period from date of issue. For example if Brownsville
has
paid $1,000,000.00 in cumulative exploration
expenditures on the property, Brownsville shall not be
required to issue any
stock or cash to Trimark to earn its
100%
interest in the property. IF however, Brownsville has
spent $500,000.00 in cumulative exploration expenditures
within 36 months, then Brownsville has the sole option of
paying Trimark $500,000.00 us in cash or issue shares in
Brownsville valued at $500,000.00 as determined by the
average share price over the last 30 days of trading or at a
minimum price of $1.00 per share or 500,000 common shares.
D
Brownsville further
agrees to be responsible for
making, through the offices of Gamaro, all necessary
property payments and taxes to keep and do whatever is
required to keep the property in good standing during
the
earn in period. Brownsville shall further agree to
be
bound by the terms and conditions of the Underlying
EPL
(exploration license MEMC/M.100/86B, Reg.136),
which is attached hereto as schedule B to this
definitive agreement.
Trimark shall be responsible for
advising Brownsville what it must do to keep the
property in good standing. The property shall remain in
the
name of Gamaro until such time as Brownsville has
earned its 100% interest at which time the property
shall be transferred into the name of Brownsville.
E It is
understood that Brownsville will act as operator
during the earn-in phase of the agreement and will be
entitled to charge a management fee of 15% on all
property exploration expenditures and related head
office overhead paid sole out of cumulative exploration
expenditures provided by Brownsville and from revenues
from
the operation of the property pursuant to the
terms of this agreement. Brian Hester shall be a
technical advisor to
the board of directors of
Brownsville during the term of the earn in phase of
this
agreement and on terms stated in a separate
consulting agreement. Brownsville covenants that it
will
at all times conduct its operations on the
property at all times to conform with the mining act of
Tanzania and other applicable legislation.
F. Once
Brownsville has earned its 100% interest in the
property, Trimark shall be entitled to a 2% net smelter
royalty which shall be reduced to 1% at the sole option
of
Brownsville upon payment to Trimark of
$1,000,000.00. Net smelter Royalty is net sales value
of
the product sold less insurance, shipping, refining
charges and any penalties for deleterious substances
contained in the product.
G A management
committee consisting of two
representatives of each Company shall be formed upon
acceptance of the terms of this Agreement. Brownsville
shall be responsible for proposal of exploration
programs to the management committee. Brownsville as
funding partner shall be responsible for funding, in
full, any and all exploration programs approved by the
management committee in advance of the commencement of
exploration.
H All payments
and expenditure commitments in this
definitive agreement are optional.
2.
DEFINITIONS
.1. "Exploration Expenditures" shall
mean all expenditures
for the exploration of the Property including but not
limited to, geological mapping, sampling, assaying,
geophysical and geochemical surveys, field support costs,
drilling and mobilization of equipment, metallurgical
sampling, report writing and tenure maintenance.
3. RIGHT OF
ENTRY
Provided this
Agreement is in good standing,
Brownsville, its
servants and agents (persons authorized
by Brownsville)
and any assigns, shall have the right of
access to and
from the Property and the right to enter
upon, examine
all work completed, sample as may be
required to
confirm the work completed, explore and
develop the
Property and fund the Exploration
Expenditures and
undertake such other activities as may
be required to
vest its interests hereunder in such a
manner as
Brownsville, in its sole discretion, may deem
advisable.
4.
REPRESENTATIONS AND WARRANTIES OF THE OPTIONOR
The Optionor
represents and warrants to, and covenants
with Brownsville that
to the best of its knowledge and
where a party acting
reasonably should have known:
4.1 the Property
is accurately described in Schedule A,
and
is presently in good standing under the
applicable laws of Tanzania;
4.2 there are no
encumbrances, royalties or liens of any
kind
associated in any way, save as outline in
Schedule C, with the Property;
4.3 the Optionor
has the exclusive right to enter into
this
Agreement and to dispose of an interest in the
Property in accordance with the terms and conditions
of
this Agreement together with the applicable laws
of
Tanzania;
4.4 the Optionor
is validly subsisting corporation in
Tanzania;
4.5 All
applicable regulatory approvals have been
received in respect of the Property;
4.6 there is no
adverse claim or challenge against or to
the
ownership of the Property, nor is there any
outstanding agreements or options to acquire or
purchase the Property or any portion thereof and no
person, firm or corporation has any proprietary or
possessory interest in the Property other than the
Optionor and as provided for under this Agreement;
4.7 there are no reclamation or
rehabilitation
requirements outstanding on the Property of which
Brownsville has not or
will not be advised and all
work
has been carried out in accordance with all
applicable laws of the federal mining law of
Tanzania;
4.8 The Optionor
is not aware of any material fact or
circumstance which has not been disclosed to
Brownsville which should be disclosed in order to
prevent the representations and warranties of the
Optionor provided in this Agreement from being
misleading; and
4.9 the Optionor
has, or will throughout the term of
this
agreement, advised
Brownsville of all of
the
material information about the Property generally
and
specifically as to its mineral potential.
The representations and warranties of the Optionor herein
before set out are conditions on which Brownsville has
relied in entering into this Agreement and will survive the
acquisition of any interest in the Property by Brownsville
and/or the termination of this Agreement. The Optionor
hereby ind
