EXHIBIT NO. 3.8
MINERAL PROPERTY OPTION AGREEMENT
THIS AGREEMENT is dated for reference the 15th day of April, 1996.
BETWEEN: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
P.O. Box 4438, Station Main
▇▇▇▇▇▇▇▇ Lake, B.C.
V2G 2V5
(the "Optionor") OF THE FIRST PART
AND: STIRRUP CREEK GOLD LTD.
▇▇▇ - ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇
("Stirrup Creek") OF THE SECOND PART
WHEREAS the Optionor is the registered and beneficial owner of a 100% right,
title and interest in and to certain mineral claims as hereinafter described;
AND WHEREAS Stirrup Creek is desirous of acquiring an interest in such mineral
claims on the terms and conditions contained in this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
the mutual covenants and agreements hereinafter contained, the parties hereto
agree as follows:
1. DEFINITIONS
1.01 In this Agreement:
(a) "Exchange" means the Vancouver Stock Exchange;
(b) "Exploration and Development" means any and all activities
comprising or undertaken in connection with the exploration and
development of the Property, the construction of a mine and mining
facilities on or in proximity to the Property and placing the
Property into commercial production;
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(c) "Property" means and includes:
(i) the mining claims more particularly described in Schedule A
attached hereto and forming part hereof; and
(ii) all rights and appurtenances pertaining to the mining
claims more particularly described in Schedule A including
all water and water rights, rights of way and easements,
both recorded and unrecorded, to which the Optionor is
entitled in respect thereof;
(d) "Property Expenditures" means all reasonable and necessary monies
expended on or in connection with Exploration and Development as
determined in accordance with generally accepted accounting
principles including, without limiting the generality of the
foregoing:
(i) the cost of entering upon, surveying, prospecting and
drilling on the Property;
(ii) the cost of any geophysical, geochemical and geological
surveys relating to the Property;
(iii) all filing and other fees and charges necessary or
advisable to keep the Property or any part or parts thereof
in good standing with any regulatory authorities having
jurisdiction;
(iv) all rentals, royalties, taxes (exclusive of all income
taxes and mining taxes based on income and which are or may
be assessed against the parties hereto) and any assessments
whatsoever, whether the same constitute charges on the
Property or arise as a result of the operations thereon;
(v) the cost, including rent and finance charges, of all
buildings, machinery, tools, appliances and equipment and
related capital items that may be erected, installed and
used from time to time directly in connection with
Exploration and Development;
(vi) the cost of construction and maintenance of camps required
for Exploration and Development;
(vii) the cost of transporting persons, supplies, machinery and
equipment in connection with Exploration and Development;
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(viii) all wages and salaries (including fringe benefits as
are usually paid in the Canadian mineral exploration
business) of persons engaged in the Exploration and
Development and any assessments or levies made under
the authority of any regulatory body having
jurisdiction with respect to such persons or
supplying food, lodging and other reasonable needs
for such persons;
(ix) all costs of consulting and other engineering services
including report preparation;
(x) the cost of compliance with all statutes, orders and
regulations respecting environmental reclamation,
restoration and other like work required as a result of
conducting Exploration and Development; and
(xi) all costs of searching for, digging, working, sampling,
transporting, mining and procuring ores, minerals, and
metals from and out of the Property.
2. ACQUISITION OF INTEREST
2.01 The Optionor hereby grants to Stirrup Creek the exclusive right and
option to acquire an undivided 50% right, title and interest in and to the
Property for total consideration consisting of cash payments to the Optionor
totalling $300,000 and the incurrence of Property Expenditures totalling
$1,000,000 to be made as follows:
(a) upon execution of this Agreement, the payment to the Optionor of
$25,000;
(b) on or before April 15, 1997, the payment to the Optionor of an
additional $50,000 and the incurrence of Property Expenditures in
the amount of $200,000;
(c) on or before April 15, 1998, the payment to the Optionor of an
additional $50,000 and the incurrence of Property Expenditures in
the cumulative amount of $400,000;
(d) on or before April 15, 1999, the payment to the Optionor of an
additional $75,000 and the incurrence of Property Expenditures in
the cumulative amount of $700,000; and
(e) on or before April 15, 2000, the payment to the Optionor of an
additional $100,000 and the incurrence of Property Expenditures in
the cumulative amount of $1,000,000.
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2.02 Upon earning a 50% interest in the Property pursuant to this article, and
on providing the Optionor with written notice on or before June 15, ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ may elect to earn an additional 20% interest in the Property for
total consideration of cash payments to the Optionor totalling $300,000 and the
incurrence of Property Expenditures totalling $1,000,000 to be made as follows:
(a) on or before April 15, 2001, the payment to the Optionor of
$75,000 and the incurrence of Property Expenditures in the amount
of $200,000;
(b) on or before April 15, 2002, the payment to the Optionor of an
additional $50,000 and the incurrence of Property Expenditures in
the cumulative amount of $400,000;
(c) on or before April 15, 2003, the payment to the Optionor of an
additional $75,000 and the incurrence of Property Expenditures in
the cumulative amount of $700,000; and
(d) on or before April 15, 2004, the payment to the Optionor of an
additional $100,000 and the incurrence of Property Expenditures in
the cumulative amount of $1,000,000.
2.03 The acquisition of a further 20% interest in the Property pursuant to
paragraph 2.02 shall be subject to the prior approval of the Exchange.
2.04 The Optionee shall be the operator of the Property with respect to the
incurrence of all Property Expenditures pursuant to paragraphs 2.01 and 2.02.
2.05 This Agreement is an option only and the doing of any act or the
incurrence of any, cash payments or Property Expenditures by Stirrup Creek
shall not obligate Stirrup Creek to do any further acts or make any further
payments or Property Expenditures.
3. TRANSFER OF TITLE
3.01 Upon execution of this Agreement, Stirrup Creek shall be entitled to
record this Agreement against title to the Property.
3.02 Upon Stirrup Creek acquiring an interest in the Property pursuant to
paragraph 2.01 or 2.02, the Optionor shall deliver to Stirrup Creek duly
executed transfers for the transfer to Stirrup Creek of the interest in and to
the Property then acquired.
4. JOINT VENTURE
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4.01 Upon Stirrup Creek acquiring the greatest interest in the Property that
it may acquire pursuant to paragraphs 2.01 and 2.02, the Optionor and Stirrup
Creek agree to join and participate in a single purpose joint venture (the
"Joint Venture") for the purpose of further exploring and developing and, if
economically and politically feasible, constructing and operating a mine on the
Property. The Joint Venture shall be governed by the principles outlined in
Schedule B hereto, which the parties agree to incorporate in a formal joint
venture agreement between them.
5. RIGHT OF ENTRY
5.01 During the currency of this Agreement, Stirrup Creek, its servants,
agents and workmen and any persons duly authorized by Stirrup Creek, shall have
the right of access to and from and to enter upon and take possession of and
prospect, explore and develop the Property in such manner as Stirrup Creek in
its sole discretion may deem advisable for the purpose of incurring Property
Expenditures as contemplated by article 2, and shall have the right to remove
and ship therefrom ores, minerals, metals, or other products recovered in any
manner therefrom for testing or sampling purposes only.
5.02 Stirrup Creek shall be provided access to all maps, reports, assay
results and other technical data in the possession or under the control of the
Optionor with respect to the Property and shall be entitled to take copies
thereof.
6. COVENANTS OF STIRRUP CREEK
6.01 Stirrup Creek covenants and agrees with the Optionor that during the term
of this Agreement:
(a) Stirrup Creek shall record or cause to be recorded as assessment
work all work conducted on the Property pursuant to paragraphs
2.01 and 2.02 hereof and otherwise shall maintain the Property in
good standing at all times during the currency of this Agreement;
(b) Stirrup Creek shall keep the Property clear of liens, encumbrances
and other charges and shall keep the Optionor indemnified in
respect thereof;
(c) Stirrup Creek shall carry on all operations on the Property in a
good and workmanlike manner and in compliance with all applicable
governmental regulations and restrictions including but not
limited to the posting of any reclamation bonds as may be required
by any governmental regulations or regulatory authorities;
(d) Stirrup Creek shall pay or cause to be paid any rates, taxes,
duties, royalties, Workers' Compensation or other assessments or
fees levied with respect to the Property or Stirrup Creek's
operations thereon;
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(e) Stirrup Creek shall maintain books of account in respect of its
expenditures and operations on the Property and, upon two business
days' notice, shall make such books available for inspection by
representatives of the Optionor;
(f) Stirrup Creek shall allow any duly authorized agent or
representative of the Optionor to inspect the Property at
reasonable times and intervals and upon reasonable notice given to
Stirrup Creek, provided however that it is agreed and understood
that any such agent or representative shall be at his own risk in
respect of, and Stirrup Creek shall not be liable for, any injury
incurred while on the Property, howsoever caused;
(g) Stirrup Creek shall allow the Optionor access at reasonable times
to all maps, reports, sample results and other technical data
prepared or obtained by Stirrup Creek in connection with its
operations on the Property and shall report annually to the
Optionor the results of its operations on the Property; and
(h) Stirrup Creek shall indemnify and save the Optionor harmless of
and from any and all costs, claims, loss and damages whatsoever
incidental to or arising out of or in connection with any work or
operations carried out by or on behalf of Stirrup Creek on the
Property, including any liability arising from environmental or
reclamation issues.
7. REPRESENTATIONS AND WARRANTIES
7.01 The Optionor hereby represents and warrants that:
(a) the Optionor is the sole and exclusive registered and beneficial
owner of the mineral claims comprising the Property and has the
right to enter into this Agreement to sell and assign an interest
in the Property absolutely in accordance with the terms of this
Agreement;
(b) the mineral claims comprising the Property have been properly
staked and recorded in compliance with the laws of British
Columbia, as applicable, and there are no disputes over the title,
staking or recording of such mineral claims;
(c) the mineral claims comprising the Property are in good standing
and are free and clear of any liens, charges or encumbrances of
any nature or kind whatsoever; and
(d) the Optionor has not done anything whereby the mineral claims
comprising the Property may be in any way encumbered.
7.02 Stirrup Creek hereby represents and warrants that:
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(a) Stirrup Creek has full corporate power and authority to enter into
this Agreement and the entering into of this Agreement does not
conflict with any applicable laws or with the charter documents of
Stirrup Creek or any contract or other commitment to which Stirrup
Creek is party; and
(b) the execution of this Agreement and the performance of its terms
have been duly authorized by all necessary corporate actions
including the resolution of the Board of Directors of Stirrup
Creek.
8. CONFIDENTIALITY OF INFORMATION
8.01 The Optionor shall treat all data, reports, records and other information
of any nature whatsoever relating to this Agreement and the Property as
confidential. While this Agreement is in effect, the Optionor shall not,
without the express written consent of Stirrup Creek, which consent shall not be
unreasonably withheld, disclose to any third party any information concerning
the Property or any operations thereon. The Optionor shall not buy, sell or
otherwise deal in the shares of Stirrup Creek while any material, confidential
information in its possession relating to this Agreement or the Property remains
undisclosed to the general public.
9. ASSIGNMENT
9.01 With the consent of the other party, which consent shall not be
unreasonably withheld, each party has the right to assign all or any part of its
interest in this Agreement and in the Property, subject to the terms and
conditions of this Agreement. It shall be a condition precedent to any such
assignment that the assignee of the interest being transferred agrees to be
bound by the terms of this Agreement, insofar as they are applicable.
10. FIRST RIGHT OF REFUSAL
10.01 Notwithstanding article 9, in the event that a party (the "Selling
Party") wishes to sell the whole or any part of its interest in this Agreement
or the Property it shall first give to the other party (the "Other Party") a
notice in writing containing an offer to sell to the Other Party such interest
specifying the price and terms and conditions for such sale and, if not for
cash, the cash equivalent thereof (the "Offer"). If within a period of 30 days
of the receipt of such notice, the Other Party notifies the Selling Party in
writing that it will accept the Offer, the Selling Party shall be bound to sell
such interest to the Other Party at such price and on the terms and conditions
of the Offer. If the Other Party shall fail to notify the Selling Party before
the expiration of the time herein limited that it will purchase the interest
offered or notifies the Selling Party that it does not intend to purchase the
interest offered, the Selling Party may sell and transfer such interest offered
to any third party or parties, subject to article 9, at a price and upon terms
and conditions no more favourable than as specified in the Offer, for a period
of 60 days, and if it fails to do so, such interest shall again be subject to
this paragraph 10.01.
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Notwithstanding the foregoing, a party may transfer the whole or part of its
interest in this Agreement or the Property to some other party with which it is
related if notice of such proposed transfer is given to the other party
specifying the nature of the relationship and the other party gives its consent
in writing, which consent shall not be unreasonably withheld.
11. TERMINATION
11.01 This Agreement shall terminate upon the occurrence of one of the
following events:
(a) in the event that Stirrup Creek, not being at the time in default
under any provision of this Agreement, gives 30 days' written
notice to the Optionor of the termination of this Agreement;
(b) in the event that Stirrup Creek shall fail to comply with any of
the requirements to make cash payments and incur Property
Expenditures in the amounts and within the time limits set forth
in paragraph 2.01;
(c) in the event that Stirrup Creek shall fail to comply with any of
its obligations hereunder, other than the obligations referred to
in subparagraph 11.01(b), and, subject to paragraph 12.01, within
30 days of receipt by Stirrup Creek of written notice from the
Optionor of such default, Stirrup Creek has not:
(i) cured such default, or commenced proceedings to cure such
default and prosecuted same to completion without undue
delay; or
(ii) given the Optionor notice that it denies that such default
has occurred.
In the event that Stirrup Creek gives notice that it denies that a default has
occurred, Stirrup Creek shall not be deemed in default until the matter shall
have been determined finally through such means of dispute resolution as such
matter has been subjected to by either party.
11.02 Upon termination of this Agreement under paragraph 11.01, Stirrup Creek
shall:
(a) have completed and either recorded or delivered to the Optionor,
in a form satisfactory for filing, sufficient assessment work on
the Property to maintain the Property in good standing for a
period of at least one year from the date of termination;
(b) where applicable, transfer title to the Property to the Optionor
free and clear of all liens, charges and encumbrances;
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(c) within 30 days of termination, turn over to the Optionor copies of
all maps, reports, sample results, contracts and other data and
documentation in the possession of Stirrup Creek or, to the extent
within Stirrup Creek's control, in the possession of its agents,
employees or independent contractors, in connection with its
operations on the Property; and
(d) ensure that the Property is in a safe condition and complies with
all environmental and safety standards imposed by any duly
authorized regulatory authority.
11.03 Upon the termination of this Agreement under paragraph 11.01, Stirrup
Creek shall cease to be liable to the Optionor in debt, damages or otherwise
save for the performance of those obligations in paragraph 11.02 and such other
obligations as it has incurred prior to the date of termination which remain
unsatisfied.
11.04 Upon termination of this Agreement under paragraph 11.01, Stirrup Creek
shall vacate the Property within a reasonable time after such termination, but
shall have the right of access to the Property for a period of six months
thereafter for the purpose of removing its chattels, machinery, equipment and
fixtures.
12. FORCE MAJEURE
12.01 The time for performance of any act or making any payment or any
expenditure required under this Agreement shall be extended by the period of any
delay or inability to perform due to fire, strikes, labour disturbances, riots,
civil commotion, wars, acts of God, any present or future law or governmental
regulation, any shortages of labour, equipment or materials, or any other cause
not reasonably within the control of the party in default, other than lack of
finances.
13. AFTER-ACQUIRED PROPERTY
13.01 In the event that at any time hereafter either the Optionor or Stirrup
Creek shall acquire any mining claim, lease, or other mineral right or interest
within a three kilometre radius of the outside boundary of the Property as
constituted on the date of this Agreement, such interest shall be deemed to have
been acquired on behalf of and for the benefit of the parties, pursuant to the
terms of this Agreement and such after-acquired interest as aforesaid shall be
included in and shall form a part of the definition of "Property" contained in
paragraph 1.01 and shall be subject to this Agreement as if it had been
originally so included.
14. NOTICES
14.01 Any notice, election, consent or other writing required or permitted to
be given hereunder shall be deemed to be sufficiently given if delivered or
mailed postage prepaid or if given by telegram, telex or telecopier, addressed
as follows:
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In the case of the Optionor: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
In the case of Stirrup Creek: STIRRUP CREEK GOLD LTD.
▇▇▇ - ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
and any such notice given as aforesaid shall be deemed to have been given to the
parties hereto if delivered, when delivered, or if mailed, on the third business
day following the date of mailing, or, if telegraphed, telexed or telecopied, on
the same day as the telegraphing, telexing or telecopying thereof provided
however that during the period of any postal interruption in Canada any notice
given hereunder by mail shall be deemed to have been given only as of the date
of actual delivery of the same. Any party may from time to time by notice in
writing change its address for the purposes of this paragraph 14.01.
15. GENERAL TERMS AND CONDITIONS
15.01 The parties hereto hereby covenant and agree that they will execute such
further agreements, conveyances and assurances as may be requisite, or which
counsel for the parties may deem necessary to effectually carry out the intent
of this Agreement.
15.02 This Agreement shall constitute the entire agreement between the parties
with respect to the Property. No representations or inducements have been made
save as herein set forth. No changes, alterations or modifications of this
Agreement shall be binding upon either party until and unless a memorandum in
writing to such effect shall have been signed by all parties hereto. This
Agreement shall supersede all previous written, oral or implied understandings
between the parties with respect to the matters covered hereby.
15.03 Time shall be of the essence of this Agreement.
15.04 The titles to the articles in this Agreement shall not be deemed to form
part of this Agreement but shall be regarded as having been used for convenience
of reference only.
15.05 All currency references contained in this Agreement shall be deemed to be
references to Canadian funds.
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15.06 Wherever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision shall be prohibited by or be invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
15.07 The Schedules to this Agreement shall be construed with and as an
integral part of this Agreement to the same extent as if they were set forth
verbatim herein. Defined terms contained in this Agreement shall have the same
meanings where used in the Schedules.
15.08 This Agreement shall be governed by and interpreted in accordance with
the laws of the Province of British Columbia and the laws of Canada applicable
therein.
15.09 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and assigns.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of
the day and year first above written.
SIGNED, SEALED AND DELIVERED
by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ in the presence of:
-----------------------------------
---------------------------------- ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
THE COMMON SEAL of STIRRUP
CREEK GOLD LTD was hereunto
affixed in the presence of: c/s
----------------------------------
SCHEDULE A
The "Property", as defined in paragraph 1.01 includes the following mineral
claims located in the Clinton Mining Division, British Columbia:
=============================================================================
Claim Name Tenure Number Number of Units Date of Expiry
-----------------------------------------------------------------------------
Second 1 208238 20 September 19, 1996
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Second 2 208239 20 September 19, 1996
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Second 3 208243 10 October 16, 1996
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Second 4 208244 12 October 16, 1996
-----------------------------------------------------------------------------
Second 5 208290 18 June 29, 1998
-----------------------------------------------------------------------------
Ulcer 208304 15 August 12, 1998
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Total Number of Units 95
=============================================================================
SCHEDULE B
PRINCIPLES TO BE INCORPORATED IN
JOINT VENTURE AGREEMENT
1. If Stirrup Creek earns a 50% interest only in the Property pursuant to
paragraph 2.01 of the Agreement, the initial beneficial interest of the parties
(the "Joint Venturers") in the Joint Venture, including the mineral claims
comprising the Property, any mining leases, surface rights, buildings,
equipment, plant, installations, infrastructure, housing, airport and all other
facilities, rights and interests, shall be Stirrup Creek as to 50% and the
Optionor as to 50%. The deemed contribution of each party to the Joint Venture
shall be $1,000,000.
2. If Stirrup Creek earns a 70% interest in the Property pursuant to
paragraph 2.02 of the Agreement, the initial beneficial interest of the parties
(the "Joint Venturers") in the Joint Venture, including the mineral claims
comprising the Property, any mining leases, surface rights, buildings,
equipment, plant, installations, infrastructure, housing, airport and all other
facilities, rights and interests, shall be Stirrup Creek as to 70% and the
Optionor as to 30%. The deemed contribution of each party to the Joint Venture
shall be Stirrup Creek as to $2,000,000 and the Optionor as to $857,143.
3. Upon the formation of the Joint Venture, a Management Committee
consisting of a representative of each Joint Venturer shall be formed to manage
the activities of the Operator on the Property or in relation thereto, including
but not limited to production decisions and considering and approving all work
programs.
4. Each Joint Venturer's representative to the Management Committee shall be
entitled to cast that number of votes which is equal in number to the percentage
beneficial interest in the Joint Venture held by the respective Joint Venturer
in accordance with this Schedule B. All decisions and approvals shall be made
by a simple majority of the votes cast. Notwithstanding the foregoing, if a
Joint Venturer at any time fails to contribute, pro rata according to its
beneficial interest in the Joint Venture, to any annual work program other than
one to which it has elected not to contribute pursuant to paragraph 6 of this
Schedule B, the Management Committee shall immediately be deemed to be and shall
be composed only of the representative of the other Joint Venturer.
5. The initial Operator of the Joint Venture shall be Stirrup Creek unless
and until such time as Stirrup Creek's beneficial interest in the Joint Venture
is reduced below 50%, at which point the Management Committee shall appoint an
Operator. The Operator shall report to and take instructions from the
Management Committee.
6. After formation of the Joint Venture, unless a Joint Venturer has elected
not to participate or has elected to participate to a lesser extent than its
then existing beneficial interest in a program pursuant to paragraph 6 of this
Schedule B, each Joint Venturer shall participate in funding future Property
Costs in proportion to its respective beneficial interest in the Joint Venture.
A Joint Venturer may elect to participate in a program to a lesser extent than
its then existing respective beneficial interest in the Joint Venture. For the
purposes of this Schedule B, "Property Costs" shall mean all funds required
following formation of the Joint Venture to acquire, explore for, develop,
-2-
build, operate and maintain an efficient mine or mines on the Property as called
for by the Operator in accordance with the directives of the Management
Committee of the Joint Venture.
7. The Operator shall submit to the Management Committee for approval an
annual work program calling for the expenditure of at least $100,000. If the
Operator fails to submit such a program, the Non-Operator may submit such a
program, to which the Operator may elect to contribute. Before a production
decision is made with respect to the Property, a Joint Venturer may elect not to
participate or to participate to a lesser extent than its then existing
beneficial interest in any annual work program before costs have been incurred
thereunder, in which event the provisions of paragraphs 7 and 8 of this Schedule
B shall govern. The election of any party to participate must be made within 30
days of the submission of an annual work program and budget, failing which such
party shall be deemed to have elected not to participate in such program.
8. If the Joint Venturer elects not to participate or to participate to a
lesser extent than its then existing beneficial interest in any annual work
program pursuant to paragraph 6 of this Schedule B, that Joint Venturer's
beneficial interest in the Joint Venture shall be reduced while that of the
other Joint Venturer is increased so that, subject to paragraphs 9 and 10 of
this Schedule B, the beneficial interest of each Joint Venturer shall be at all
times proportionate to the sum of the total Property Costs of both Joint
Venturers. In the event that a Joint Venturer elects not to participate or to
participate to a lesser extent in an annual work program which program is not
subsequently completed to the extent of at least 90%, that Venturer may elect to
back into the program, to the extent that it was completed, by paying to the
other Joint Venturer such portion of the costs as represents that portion of the
program for which it wishes to receive credit. Such payment must be accompanied
by written notice to the other Joint Venturer, within 60 days of the completion
of work on the program.
9. If a Joint Venturer elects not to participate or to participate to a
lesser extent than its then existing beneficial interest in any annual work
program pursuant to paragraph 6 of this Schedule B, and provided that its
beneficial interest has not been reduced below 5%, that Joint Venturer may elect
to participate in the funding of future Property Costs, commencing with the next
annual work program, to the extent of its then existing beneficial interest in
the Joint Venture.
10. If the beneficial interest of a Joint Venturer (the "Diluted Venturer")
is reduced below 5%, the Diluted Venturer shall be deemed to have assigned and
conveyed its beneficial and legal interest in the Joint Venture to the other
Joint Venturer and shall be entitled thereafter, in lieu of a Joint Venture
interest, only to the return of its contribution to Property Costs, without
interest, payable only from 2% of net smelter returns from the Property. The
Property shall be immediately transferred into the other Joint Venturer's name
alone and the Joint Venture Agreement shall thereby be terminated subject to any
then outstanding liabilities between the parties.
11. If a Joint Venturer (the "Non-Contributing Venturer") at any time fails
to contribute, pro rata according to its beneficial interest in the Joint
Venture, to any annual work program other than one to which it has elected not
to contribute pursuant to paragraph 6 of this Schedule B, the Non-Contributing
Venturer shall be deemed to have assigned and conveyed its beneficial and legal
interest in the Joint Venture to the other Joint Venturer and shall be entitled
thereafter, in lieu of a
Joint Venture interest, only to the return of its contribution to Property
Costs, without interest, payable only from 2% of net smelter returns from the
Property. The Property shall be immediately transferred into the other Joint
Venturer's name alone and the Joint Venture Agreement shall thereby be
terminated subject to any then outstanding liabilities between the parties.
12. Each Joint Venturer shall provide to the other all reports, maps, logs or
other data whatsoever relating to the Property in their possession or otherwise
under their control.
13. Any dispute arising under this agreement shall be forthwith submitted to
a single arbitrator in accordance with the provisions of the COMMERCIAL
ARBITRATION ACT (British Columbia).