MINING
EXPLORATION AGREEMENT WITH THE OPTION TO BUY, BETWEEN ROBERTO
PRECIADO, IN HIS OWN RIGHT (WHO WILL BE REFERRED TO AS THE
“CONCESSION HOLDER” THROUGHOUT THE FOLLOWING DOCUMENT),
WITH THE CONSENT OF HIS SPOUSE, MRS. BERTHA ELENA MARTINEZ
ESPINOZA, AND ORO DE ALTAR S. DE R.L. DE C.V. (WHO WILL BE REFERRED
TO AS THE “COMPANY”) REPRESENTED BY ITS SPECIAL POWER
OF ATTORNEY HOLDER, IGNACIO LIMÓN GONZÁLEZ, IN
ACCORDANCE WITH THE FOLLOWING STATEMENTS AND
CLAUSES:
STATEMENTS
I. The
Concession Holder states that:
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He is an
individual of Mexican nationality, with the legal and financial
power to enter this agreement; and is married to Mrs.
Bertha Elena Martinez who has appeared willingly to
express her consent to the terms and conditions of this
agreement.
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He is the
legitimate holder to the following mining concessions
(hereafter, indistinctly, “Conseciones
Mineras” (Mining Concessions) or “Lotes Mineros”
(Mining Lots):
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El
Cometa
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216684
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9.0000
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Sáric,
Sonora
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El Cometa
2
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219812
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91.0000
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Sáric,
Sonora
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El Cometa
4
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225824
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20.0000
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Sáric,
Sonora
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El Cometa
5
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225092
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260.5752
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Sáric,
Sonora
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El Cometa
5
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225051
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65.9935
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Sáric,
Sonora
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Lalo
1
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229206
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29.0000
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Sáric,
Sonora
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Lalo
1
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227384
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611.3590
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Sáric,
Sonora
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Lalo
2
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229255
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97.7623
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Sáric,
Sonora
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Lalo
2
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227383
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21.2562
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Sáric,
Sonora
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Cometa
4
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222784
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58.5084
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Sáric,
Sonora
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Lalo
3
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231330
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37.6.6406
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Sáric,
Sonora
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The Mining
Concessions are in force and in compliance with the
obligations established by Mining Law and its
Regulations, in regards to Federal Law Rights; and that
until the day this agreements was entered, no official letter was
issued by the General Mining Authorities or any other
authority which can affect in any form the rights
derived from the Mining Concessions.
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The mining
concessions are free of any and all kind of responsibilities,
liens, impediments, impositions, or claims from third
parties, including but not limited these, contracts,
promises, agreements, options, royalties of any kind,
embargos, notifications of embargo, seizures,
notifications of seizure, expropriation,
temporary occupations, easements, debt, contingencies,
obstacles, and administrative or judicial litigations or
proceedings.
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Until entering
this agreement the Concession Holder had not received any
claims from any ecological related authority.
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No obligations
with third parties have been acquired or subsist which may
impede this agreement from being signed.
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Any agreement
previously entered among both parties will be replaced by
the voluntary and willing signing of this
agreement.
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II.
The Company
states, by means of its representative that:
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II.1
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It is a
corporation constituted in public deed number 57,381 (fifty seven
thousand three hundred and eighty one)
, volume 1,503 (one thousand five hundred
and three), granted before Carlos Cabrera Muñoz,
head of public notary number 11 (eleven), residing in
this municipality, and practicing within his notarial jurisdiction,
on the sixth day of march in the year 2002 (two-thousand
and two), registered under number 21, 564 (twenty one
thousand five hundred and sixty four), volume 691
(six hundred ninety one), commerce section, book 1
(one), at the Public Registry of Commerce in the same
city, on the 11 (eleventh) of March 2002 (two thousand
and two), and under number 127 (one hundred twenty
seven), page 64 (sixty four) before volume XXXVII
(thirty seven) of the Mining Corporations Book of the Mining
Public Registry, on the 15 (fifteenth) of April of 2002
(two thousand two).
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Any agreement
previously entered among both parties will be replaced by
the voluntary and willing signing of this
agreement.
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Based on these
Statements, both parties issue this agreement subject to the
following:
CLAUSES
FIRST.
OPTION TO BUY. The
Concession Holder grants the Company an irrevocable and exclusive
option to buy (hereafter referred to as “Option to
Buy”), so that Company may acquire ownership of the Mining
Concessions as well as any other concession that may substitute any
other concession, from the Concession Holder.
The Option to
Buy includes an irrevocable and exclusive option granted to the
Company by the Concession Holder to acquire any concession whose
title is in process or may be in process in the future by
application of the Concession Holder or any other person or company
related to the Concession Holder in relation to the lots located
totally or partially within a 2 (two) kilometer radius, counting
from the exterior limits of any of the lots within the Mining
Concessions at the same price or considerations agreed to in this
contract, without the Company having to pay different or additional
amounts. The option mentioned in this paragraph may be put in
effect by the Company within 60 (sixty) calendar days following the
day in which the Concession Holder gives a written notice to the
Company that the concessions were issued. In all other matters,
this agreement will apply to the concessions in the second
paragraph.
SECOND.
TERMS OF THE OPTION. For the purpose of the Option to Buy, both
parties agree to the following:
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The Company may
exercise its option to buy in a period of up to 44 (forty
four) months (hereafter referred to as “Option
Period”) counting from the date of the signing of
the public deed of the present agreement or confirmation of the
signatures of both parties by the attesting official
(hereafter referred to as the “Signature
Date”).
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Subject to the
items stated in the Seventh clause in this contract, the purchase
price (“Purchase Price”) for the ownership
of the Mining Concessions is the total amount of
$1,500,000.00 (one million five hundred thousand dollars 00/100)
currency of the United States of America (hereafter
referred to as “US Dollars”).
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The Concession
Holder is obligated to sign a definite Sales Agreement with
the Company (“Definite Agreement”) for the
ownership of the Mining Concessions at any moment
within the Option Period at the request of the Company, who will
notify the Concession Holder that it has exercised its
option to Buy, at least 30 (thirty) calendar days in
advance to the date in which both parties should sign de
Definite Agreement;
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The Concession
Holder will transfer the ownership of the Mining Concessions
and the ownership of that mentioned in the second
paragraph of the first clause free of any liens and
without limitations; and
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The Definite
Agreement will be made effective in a public deed or will be
confirmed by the public notary that the Company
chooses.
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THIRD.
RIGHT TO EXPLORE. The Concession Holder grants the company the
exclusive and irrevocable right to explore the Mining Lots during
the Option Period, which consist of, by way of information but not
limited to, the geological, geophysical reconnaissance, blasting,
development and drilling of any kind, tunnels, shafts, pits, and
any other work the Company considers convenient to find, quantify
and exploit the mineral reserves that may exist in the Mineral
Lots. The Company will have, the right to take mineral samples from
the Mining Lots and withdraw these, as well as rough minerals and
drilling samples for metallurgic tests and other kinds of studies.
It is agreed to, that the Company may collaborate with, or employ
third parties for the operations mentioned in this clause. All of
the exploration work will be carried out by the Company directly or
through contractors, without interfering with the Concession
Holder.
The Company
will carry out the exploration on the Mining Lots at its sole
discretion during the Option Period and will invest on these lots
the minimum amounts established by Mining Laws.
Both parties
agree that the Option to Buy is according to the exploration
results on the Mining Lots; therefore, this contract is strictly
optional to the Company, who may terminate it in advance, at any
moment, under the terms stated in the Thirteenth Clause.
FOURTH.
PAYMENTS FOR THE OPTION TO BUY. During the Option Period, while the Option to
Buy is in force, the Company will pay the Concession Holder as a
retribution for the Option to Buy the following amounts indicated
in US Dollars.
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a) At the time
of signing:
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45,000.00
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b) On the 8th
(eighth) month:
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25,000.00
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c) On the 12th
(twelfth) month:
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25,000.00
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d) On the 16th
(sixteenth) month:
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25,000.00
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e) On the
20 th
(twentieth) month:
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25,000.00
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f) On the
24 th
(twenty forth) month:
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25,000.00
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g) On the
28 th
(twenty eighth) month:
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25,000.00
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h) On the
32 nd
(thirty second) month:
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25,000.00
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i) On the 36ht
(thirty sixth) month:
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25,000.00
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j) On the
40 th
(fortieth) month:
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25,000.00
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k) On the
44 th
(forty fourth) month:
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25,000.00
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The company
will retain the applicable income taxes for each of the payments
above mentioned, but the Company will compensate the Concession
Holder with the same amount of the retention on each case. So that
the Company is obligated to compensate the Concession Holder with
that same amount, the Concession Holder must demonstrate to the
Company that it is registered with SAT (revenue system) as an
individual with commercial activities..
FIFTH.
COVENANTS REGARDING THE PAYMENTS. In regards to all the payments mentioned in this
agreement, including but not limited to the retribution for the
Option to Buy and the Purchase Price, both parties agree to the
following:
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The Company may
issue the payments in the national currency, plus the value- added
tax, which will be transferred at the moment of making each
payment. The conversion from US Dollars to national
currency will be at the exchange rate available to
settle obligations in foreign currency within the Mexican Republic
which is published the Federal Register on the immediate
working day before the payment date, by means of a check
payable to the Concession Holder.
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The Company
will issue the payments to the Concession Holder, and the
Company is not responsible or will be responsible for
the distribution of these payments between the
Concession Holder and the spouse;
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The Concession
Holder will issue an invoice in favor of the Company for
each payment received from the Company, through a
document that includes all the applicable legal
requirements established in fiscal matter.
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If the day on
which the payment is due, is on a non-working day, the Company
will make the payment on the following working day.
“Non-working day”, for this matter, refers
to obligatory days established by the Federal Labor Law.
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SIXTH.
PAYMENT OF THE PURCHASE PRICE. The Company will pay the Purchase Price to the
Concession Holder, on the signature and notarized confirmation date
(“Purchase Date”) of the Definite Contract, with the
purpose of selling the ownership of the Mining Concessions. The
purchase price is fixed at US$1,500,000.00 (One million five
hundred US Dollars).
The Company
will retain from the Concession Holder what should be retained for
income taxes for the payment of the Purchase Price, but the company
will compensate the Concession Holder for the same amount of the
retention. So that the Company is obligated to compensate the
Concession Holder with that same amount, the Concession Holder must
demonstrate to the Company that it is registered with SAT (revenue
system) as an individual with commercial activities.
The Concession
Holder will transfer to the Company value added taxes for the
Purchase Price, who after receiving these will issue an invoice to
the Company that includes all the applicable legal requirements
established in fiscal matter.
SEVENTH.
DEDUCTION OF PAYMENTS DURING THE OPTION TO BUY.
Both parties agree that there will
be no deductions for the payments made by the Company towards the
Purchase Price according to the Fourth clause. If there should be a
difference regarding the Purchase Price once the Option to buy is
in effect, such difference will be paid to the Concession Holder by
the Company on the Purchase Date.
EIGHTH.
THE CONCESSION HOLDER’S OBLIGATIONS.
During the period of the Option to
Buy, the Concession Holder is required to do the
following:
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Not transfer or
promise to transfer any rights related to the Mining Concession
or their ownership;
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Not constitute
or allow any constitution or impositions of liens on the
Mining concessions as well as any other obligations or
conditions mentioned in I.4;
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Not issue
rights or interests to third parties in relation to the Mining
Concessions;
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Immediately
notify the Company of any governmental letter or
any knowledgeable claim, laws
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