Exhibit 10.1
OPTION TO PURCHASE PROSPECTING LICENSE, PMLS
AND MINE ESTABLISHMENT AGREEMENT
THIS AGREEMENT made as of April 2,
2009;
GEO CAN RESOURCES COMPANY LIMITED, a
company incorporated under the laws of Tanzania with a mailing
address P.O. Box 80079, Dar es Salaam, Tanzania (Facsimile:
1-866-246-1028);
LAKE VICTORIA MINING COMPANY, INC., a
company incorporated under the laws of the State of Nevada with an
office address at 1781 Larkspur Drive, Golden, Colorado 80401
(Facsimile: 303-526-5889);
A. Geo
Can is the registered and beneficial owner of the Prospecting
License and Primary Mining Licenses or Claims (as such term is
defined below) and has assigned ownership of the PMLs to Ahmed
Abubakar Magoma, a director of Geo Can, which are all located in
the United Republic of Tanzania and described in Schedule A;
and
B. Geo
Can has agreed to grant to LVCA an option to acquire an eighty
percent (80%) interest (the “Option”) in and to the
Property (as such term is defined below) by, inter alia, planning
and establishing a high grade small scale producing commercial mine
on the Property and making certain payments to Geo Can and/or
issuing shares of LVCA to the Geo Can or an Assignee of Geo
Can;
IN CONSIDERATION of the mutual
agreements herein contained and of other good and valuable
consideration (the receipt and sufficiency of which are
acknowledged by each party), the parties agree with one another as
follows:
1. Definitions
and Interpretation
1.1.
Definitions: Whenever used in this Agreement,
the following words and terms will have the respective meanings
ascribed to them below:
“Affiliate” has the meaning set
out in the Nevada Corporate Law (Nevada, U.S.A.).
“Agreement” means this agreement,
including the recitals and the Schedules all as amended,
supplemented or restated from time to time.
“Annual License Fees” means the
annual fees paid to keep the Claims comprising the Property in good
standing as set out in Schedule “A”, including any
subsequent increase by the Republic of Tanzania;
“Business Day” means a day other
than a Saturday, Sunday or statutory holiday in Nevada.
“Claims” means all the mineral
licenses described in Schedule A hereto, and all the license(s) set
out in Schedule A are referred to in this agreement as
“Property” whether they be plural or singular;
“Closing Date” means the date on
which is the first Business Day after the date that the Board of
Directors issues its written acceptance of this Agreement and the
transaction contemplated thereby;
“Commercial Production” means,
with respect to the Property and is deemed to have been achieved,
when the concentrator processing ores from the Property for other
than testing purposes has operated for 30 days in any 40
consecutive day period at not less than 50% of design capacity or,
in the event a concentrator is not erected on the Property, when
ores from the Property have been produced for a period of 40
consecutive production days at not less than 50% of the mining rate
specified in a feasibility study recommending placing the Property
into production for commercial purposes.
“Effective Date” means the fifth
business day next following the Closing Date;
“Exchange” means the OTC:BB Nasdaq
Exchange.
“Exploration Expenses” means costs
and expenses of whatsoever kind or nature, including those of a
capital nature, incurred or chargeable with respect to the
exploration and development of the Property and the maintenance of
the Property in good standing.
“Feasibility Study” means a
detailed study or report showing that the placing the Property or
part thereof into Commercial Production is feasible and including
at least:
|
|
|
a description of that part of the Property to
be covered by the proposed mine,
|
|
|
|
the estimated recoverable reserves of minerals
and the estimated composition and content thereof,
|
|
|
|
the proposed procedure for development, mining
and production,
|
|
|
|
the results of ore amenability tests (if
any),
|
|
|
|
the nature and extent of the facilities
proposed to be acquired, including a preliminary design for the
mill facilities if the size, extent and location of the ore body
makes such mill facilities feasible,
|
|
|
|
the total costs, including capital budget,
reasonably required to purchase, construct and install all
structures, machinery and equipment required for the proposed mine
and a schedule indicating the times at which such moneys will be
required, including in particular the operating capital
requirements for the first four months of operation,
|
|
|
|
all environmental impact studies and the costs
thereof,
|
|
|
|
the period in which it is proposed the
Property will be brought into Commercial Production, and
|
|
|
|
such other data and information as are
reasonably necessary to substantiate the existence of an ore
deposit of sufficient size and grade to justify development of a
mine, taking into account all relevant business, tax and other
considerations;
|
“Government or Regulatory
Authority” means any federal, state, regional, municipal or
other government, governmental department, regulatory authority,
commission, board, bureau, agency or instrumentality that has
lawful authority to regulate or administer or govern the business
or property or affairs of any person, and for the purposes of this
Agreement also includes any corporation or other entity owned or
controlled by any of the foregoing and any stock exchange on which
shares of a Party are listed for trading.
“In-kind” means paid or given in
gold in place of money and converted at the equivalent amount to
the other.
“Mining Operations” means every
kind of work done by LVCA on or in respect of the Property or the
products derived there from and includes, without limiting the
generality of the foregoing, work of assessment, geophysical,
geochemical and geological surveys, studies and mapping, assaying
and metallurgical testing, investigating, drilling, designing,
examining, equipping, improving, surveying, shaft-sinking, raising,
crosscutting and drifting, searching for, digging, trucking,
sampling, working and procuring minerals, ores and concentrates,
bringing any mining claims to lease, reclamation and in doing all
work usually considered to be prospecting, exploration, development
and mining work; in paying wages and salaries of persons engaged in
such work and in supplying food, lodging, transportation and other
reasonable needs of such persons; in paying insurance premiums and
assessments or premiums for workers’ compensation insurance,
contributions for unemployment insurance or other pay allowances or
benefits customarily paid in the district to such persons; in
paying rentals, license renewal fees, taxes and other governmental
charges required to keep the Property in good standing; in
purchasing or renting plant, buildings, machinery, tools,
appliances, equipment or supplies and in installing, erecting,
detaching and removing the same or any of them; and in the
management of any work which may be done on the Property for the
due carrying out of such prospecting, exploration, development and
mining work.
“Option” has the meaning set out
in Section 3.1 of this Agreement.
“Option Period” has the meaning
set out in Section 3.2 of this Agreement.
“Parties” means the parties to
this Agreement and their respective successors and permitted
assigns which become parties pursuant to this Agreement and
“Party” means any one of the Parties.
“Permitted Encumbrance” means
|
|
|
easements, rights of way, servitudes or other
similar rights in land including, without limiting the generality
of the foregoing, rights of way and servitudes for railways,
sewers, drains, gas and oil pipelines, gas and water mains,
electrical light, power, telephone, telegraph or cable television
conduits, poles, wires and cables;
|
|
|
|
the right reserved to or vested in any
government or other public authority by the terms of any or by any
statutory provision, to terminate, revoke or forfeit any of the
lease or mining claims or to require annual or other periodic
payments as a condition of the continuance thereof;
|
|
|
|
rights reserved to or vested in any
municipality or governmental, statutory or public authority to
control or regulate any of the Property in any manner, and all
applicable laws, rules and orders of any governmental authority;
and
|
|
|
|
the reservations, limitations, provisos and
conditions in any original grants from the Crown, or other
governmental entity of the Republic of Tanzania on the Property or
interests therein and statutory exceptions to title.
|
“Shares” means common shares in
the capital of LVCA as constituted on the date of this
Agreement.
1.2.
Headings. The division of this Agreement into
paragraphs and the insertion of headings are for convenience of
reference only and shall not affect the construction or
interpretation of this Agreement. The terms “this
Agreement”, “hereof”, “hereunder” and
similar expressions refer to this Agreement and not to any
particular article, paragraph or other portion hereof and include
any agreement supplemental hereto. Unless something in
the subject matter or context is inconsistent therewith, references
herein to articles and paragraphs are to articles and paragraphs of
this Agreement.
1.3.
Legislation. Any reference to a provision in any
legislation is a reference to that provision as now enacted, and as
amended, re-enacted or replaced from time to time, and in the event
of such amendment, re-enactment or replacement any reference to
that provision shall be read as referring to such amended,
re-enacted or replaced provision.
1.4.
Extended Meanings. In this Agreement words
importing the singular number only shall include the plural and
vice versa, words importing the masculine gender shall
include the feminine and neuter
genders and vice versa and words
importing persons shall include individuals, partnerships,
associations, trusts, unincorporated organizations and
corporations.
1.5.
Currency. All references to currency herein are
to lawful money of the United States of America.
1.6.
Schedules. The following are the Schedules
annexed hereto and incorporated by reference and deemed to be part
hereof:
Schedule A: Description of Property and
Fees
Schedule B: Board of Directors Resolution
Accepting the Option Agreement
Schedule C: Payment Details
2. Representations
and Warranties
2.1.
Representations and Warranties of Geo Can . Geo
Can represents and warrants to LVCA that:
|
|
|
Geo Can is a corporation duly incorporated,
organized and subsisting under the laws of Tanzania, East Africa
with the corporate power to own its assets and to carry on its
business;
|
|
|
|
Geo Can has good and sufficient power,
authority and right to enter into and deliver this Agreement and,
to the best of its knowledge, to option and transfer legal and
beneficial interest in the Property all or in part to LVCA free and
clear of all liens, charges, encumbrances and other rights of
others other than the Permitted Encumbrances;
|
|
|
|
other than the Agreement, there is no
contract, option or any other right of another binding upon or
which at any time in the future may become binding upon Geo Can to
option, sell, transfer, assign, pledge, charge, mortgage, explore
or in any other way option, dispose of or encumber all or part of
the Property or any portion thereof or interest therein other than
pursuant to the provisions of this Agreement;
|
|
|
|
neither the entering into nor the delivery of
this Agreement nor the completion of the transactions contemplated
hereby by Geo Can will result in the violation of any agreement or
other instrument to which Geo Can is a party or by which Geo Can is
bound, or any applicable law, rule or regulation;
|
|
|
|
Geo Can is not a party to or bound by any
contract or commitment to pay any royalty, fee or land payment with
respect to the Property or any portion thereof or interest
therein;
|
|
|
|
LVCA has the option to purchase 80% of the
right, title and interest in and to the Property and there is no
adverse claim or challenge against or to the ownership of or title
to the Property or any portion thereof or interest therein nor is
there any basis for any such claim or challenge; and
|
(j) Geo
Can is a non-resident for the purposes of U.S. Income
Tax (USA).
2.2.
Representations and Warranties of LVCA . LVCA
represents and warrants to Geo Can that:
|
|
|
LVCA is a corporation duly incorporated,
organized and subsisting under the laws of the State of Nevada,
U.S.A. with the corporate power to own its assets and to carry on
its business in the jurisdiction in which the Property are
located;
|
|
|
|
LVCA has all necessary power and authority to
enter into this Agreement and any agreement or instrument referred
to in or contemplated by this Agreement and to do all such acts and
things as are required to be done, observed or performed by it, in
accordance with the terms of this Agreement and any agreement or
instrument referred to in or contemplated by this Agreement;
|
|
|
|
neither the entering into nor the delivery of
this Agreement nor the completion of the transactions contemplated
hereby by LVCA will result in the violation of any agreement or
other instrument to which LVCA is a party or by which LVCA is
bound, or any applicable law, rule or regulation;
|
|
|
|
LVCA is a “reporting company”, as
such term is defined according to the U.S. Securities and Exchange
Commission (SEC), in the State of Nevada and is not in default of
filing financial statements required by such applicable securities
legislation or paying prescribed fees and charges related
thereto;
|
|
|
|
the Shares to be issued and delivered to Geo
Can hereunder have been validly created and authorized for issuance
and when so issued and delivered shall be duly and validly issued
as fully paid and non-assessable Shares; and
|
|
|
|
LVCA is a resident for purposes of the
U.S. Income Tax (U.S.A.).
|
2.3.
Acknowledgement and Covenant of LVCA. LVCA
acknowledges and agrees that the Option granted to LVCA in the
Property is granted by Geo Can of a portion of its rights and LVCA
covenants to perform the obligations of Geo Can to the same extent
as if LVCA held the title directly with the Ministry of Energy and
Minerals of Tanzania.
2.4.
Representations about Title. Geo Can represents
or warrants that the title is valid and that the ownership or state
of title to the Property is held by Geo Can or its’
subsidiaries. In addition, Geo Can represents or warrants that
there are no charges, liens or encumbrances on the Property.
2.5.
Verification of Title. LVCA covenants to Geo Can
that it will undertake all necessary actions, at its sole cost and
expense, to verify the ownership of the Property, including
obtaining all necessary searches, investigations, opinions or
reports that any prudent exploration company would reasonably
obtain to verify the ownership and title to property located in the
Republic of Tanzania.
2.6.
Reliance and Survival . The representations,
warranties, acknowledgements and covenants set out in this Section
2 have been relied on by the Parties in entering into this
Agreement. All representations and warranties made
herein will survive the delivery of this Agreement to the Parties
and the completion of the transactions contemplated hereby and,
notwithstanding such completion, will continue in full force and
effect for the benefit of Geo Can or LVCA, as the case may be, for
a period of eighteen (18) months from the exercise, lapse or
termination of the Option.
|
