<PAGE>
EXHIBIT 10.17
NORD RESOURCES CORPORATION
PO BOX 384, DRAGOON, AZ 85609
TEL: (520) 586-2241 FAX: (520) 586-7020
TERMS OF AGREEMENT
OPTION TO PURCHASE THE "MIMBRES" PROPERTY,
GRANT COUNTY, NEW MEXICO
TERMS
1. Thornwell Rogers, South Branch Resources, LLC, and MRPGEO, LLC
(collectively,
the "Vendors") have agreed to grant to Nord Resources Corporation
("Nord") an
exclusive option to purchase the "Mimbres" Property (the
"Property") located in
Grant County, New Mexico and consisting of forty-five (45)
Unpatented Mining
Claims. The Property is more fully described in Exhibit "A"
attached hereto. In
addition, the Vendors have provided information regarding the
potential lease by
Nord of certain State of New Mexico mineral exploration leases (the
"State
Leases") and certain private land (the "Miller Ranch") which Nord
will pursue as
part of the overall Mimbres property package (collectively, the
"Land").
2. Nord and the Vendors agree on the following terms:
-
The term
of the Option to Purchase Agreement shall be for sixty (60)
months commencing no more than ten (10) days from the Option
Effective
Date as set forth below. The Option Effective Date is defined as
the
date Nord successfully acquires the State of New Mexico Mineral
Leases
and the date Nord signs a lease agreement for the Miller Ranch,
whichever occurs later.
-
Within ten
(10) days of the date of signature of the Option to
Purchase Agreement, Nord shall deliver payment to each of the
Vendors
separately, common shares of Nord or, make a cash payment to each
of
the Vendors according to the following Option Payment Schedule:
Option Payment Schedule
<TABLE>
<S>
<C>
Agreement signature date
US$2,000
Option Effective Date
100,000 shares plus $2,000
Twelve (12) month anniversary of Option Effective Date
35,000 shares
Twenty-four (24) month anniversary of Option Effective Date
35,000
shares
Thirty-six (36) month anniversary of Option Effective Date
35,000
shares
Forty-eight (48) month anniversary of Option Effective Date
35,000
shares
Sixty (60) month anniversary of Option Effective Date
Equivalent Dollar amount in shares or US
$800,000 at Vendors option
</TABLE>
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Within ten
(10) days of the date of signature of the Option Effective
Date, Nord shall deliver to each of the Vendors options to
purchase
the common stock of Nord according to the following Stock
Option
Schedule:
Stock Option Schedule
<TABLE>
<CAPTION>
Stock Option Issue Date
Stock Options
Option Price
-----------------------
-------------
------------
<S>
<C>
<C>
Option Effective Date
50,000 15% below
market on option issue date
Twelve (12) month anniversary of Option
Effective Date
40,000 15% below
market on option issue date
Twenty-four (24) month anniversary of Option
Effective Date
30,000 15% below
market on option issue date
Thirty-six (36) month anniversary of Option
Effective Date
20,000 15% below
market on option issue date
</TABLE>
The options to purchase the common stock of Nord shall expire
thirty-six (36)
months from their date of issue.
All common shares of Nord issued pursuant to this Agreement will be
fully paid
and non-assessable.
-
Should
Nord sell the Property/Land to a third party, the Vendors will
receive as a sales commission, four per cent (4%) of the net
sale
amount received by Nord from the sale, which four per cent (4%)
shall
be divided equally among the Vendors.
-
Nord
agrees to pay to the Vendors, in cash, a Net Smelter Return
production royalty (the "NSR") according to the following schedule
and
terms:
For Copper Production Derived from the Unpatented Claims:
<TABLE>
<CAPTION>
Ave. Copper Sales Price, $/pound NSR, Per Cent
-------------------------------- -------------
<S>
<C>
<$0.85
0.25%
$0.85 to $0.89
0.50%
$0.90 to $0.95
0.75%
$0.96 to $1.00
1.00%
$1.01 to $1.05
1.25%
$1.06 to $1.10
1.50%
$1.11 to $1.15
1.75%
$1.16 to $1.20
2.00%
$1.21 to $1.25
2.25%
$1.26 to $1.30
2.50%
>$1.30
3.00%
</TABLE>
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-3-
For Copper Production Derived from the State of New Mexico
Leases:
<TABLE>
<CAPTION>
Ave. Copper Sales Price, $/pound NSR, Per Cent
-------------------------------- -------------
<S>
<C>
<$0.85
0.10%
$0.85 to $0.89
0.15%
$0.90 to $0.95
0.20%
$0.96 to $1.00
0.30%
$1.01 to $1.05
0.40%
$1.06 to $1.10
0.60%
$1.11 to $1.15
0.75%
$1.16 to $1.20
0.90%
$1.21 to $1.25
1.10%
$1.26 to $1.30
1.30%
>$1.30
1.50%
</TABLE>
For Copper Production Derived from the Miller Ranch Lease:
See SCHEDULE "A" attached hereto.
The royalty paid for all by-product metals shall be 1.5% NSR.
For the purposes of this agreement, NSR shall be deemed to mean the
amount
received by Nord from a smelter upon the sale of all metals removed
from the
Property after deducting from the gross value the cost of smelting
and actual
freight or haulage charges from the mine to the smelter. The term
"smelter"
shall mean conventional smelters as well as any other type of
production plant
used in lieu of a conventional smelter to recover metals. The total
royalty
payments will be split equally between the Vendors and calculated
and paid on a
quarterly basis. Installments will be paid to Vendors within 45
days of the end
of each royalty quarter during which metal is recovered and sole
from the
Property/Land.
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Exploration and development expenditures on or in respect of
the
Property and Land will conform to the following property/Land
Expenditure Schedule:
Property/Land
Expenditure Schedule
<TABLE>
<CAPTION>
Period
Expenditure
------
-----------
<S>
<C>
Twelve (12) month anniversary
$ 100,000
Twenty-four (24) month anniversary $ 250,000
Thirty-six (36) month anniversary $ 350,000
Forty-eight (48) month anniversary $ 350,000
Sixty (60) month anniversary
$ 350,000
Total
Expenditure
$1,400,000
</TABLE>
Expenditures shall include, without limitation, amounts expended in
claim
staking, lease fees, assessments and other charges; geophysical,
geochemical and
geological surveys, land surveys and aerial surveys; digging,
trucking,
sampling, working, mining and procuring ores, minerals
<PAGE>
-4-
and metals; excavations; exploration drilling, assaying and
metallurgical
testing; in renting, installing and erecting structures, machinery,
tools,
appliances and/or equipment; transporting equipment, supplies or
other items to
and from the Property/Land or any part of it; wages and salaries of
any Nord
personnel and consul
