OPTION AGREEMENT
TO ACQUIRE MINING CONCESSION
Santa Rosa
This
option agreement dated for reference 1st February 2008 is
between
Minera Farellón Limitada , a Chilean company with an
office at Baldomero Lillo 3260, Vallenar, Huasco, III Region, Chile
(“Farellón”), and
Minera Polymet Limitada , a Chilean company formed by Red
Lake Exploration, Inc., a Nevada corporation with a registered
office at 711 South Carson Street, Suite 4, Carson City, Nevada
89701 (“Polymet”).
Whereas
Farellón has an option to purchase the Santa Rosa
mining holdings in Chile (“Property”) from Antolin
Amadeo Crespo García, dated 10th September 2007,
recorded in the register of the Conservador de Minas in
Freirina on 13th September 2007, and attached as exhibit A
(the “Crespo Agreement”), and has agreed to assign
the Crespo Agreement to Polymet, for valuable consideration,
the receipt and sufficiency of which are acknowledged, the
parties agree that:
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1.
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Farellón
grants Polymet the option to buy the Crespo Agreement on the
following terms (“Option”):
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a.
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The
Option begins on the date of this agreement and ends on 5th August
2008 (the “Term”).
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b.
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As
consideration for granting the Option, Polymet will pay
Farellón $9,500 when this agreement is signed and $8,500 per
month on the fifth day of the month for five months ending on 5th
July 2008, for a total payment of $52,000.
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c.
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During
the Term, Polymet may conduct any exploration permitted by the
Crespo agreement except extraction for exploitation.
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d.
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Farellón
will pay any Property costs that are due during the Term and
required to keep the Crespo Agreement in good standing, and Polymet
will reimburse Farellón on request.
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e.
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Polymet
can exercise the option at any time until the end of the Term by
notifying Farellón in writing that it intends to exercise
the Option and paying Farellón $50,000 by the close of
business on 5th August 2008.
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f.
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The
Option ends if Polymet fails to make any of the payments required
during the Term or on 5th August 2008 if Polymet fails to notify
Farellón that it intends to exercise the Option and pay the
$50,000 due.
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g.
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All
currency amounts are stated in United States dollars.
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a.
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may
continue to mine the Property and exploit any minerals extracted
during the Term and will pay Polymet a royalty equal to 5% of the
net proceeds that it receives from Enami
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