THIS AGREEMENT MADE THIS 4th DAY OF JUNE, 2007
Exhibit
10.14
THIS
AGREEMENT MADE THIS 4th
DAY OF
JUNE, 2007
BETWEEN:
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(together
hereinafter called the said “Pacific”)
OF
THE
FIRST PART
AND:
473203
B.C. LTD. dba
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▇▇▇▇▇▇▇ Drilling
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▇▇▇▇▇▇▇▇,
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(hereinafter
called “NICOLA”)
OF
THE
SECOND PART
AND:
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(hereinafter
called “Sostad”)
OF
THE
THIRD PART
WHEREAS
Pacific has requested NICOLA to complete a minimum of 5,000 (Five thousand)
feet, of diamond drilling during the 2007 field season, along with the other
services as herein set forth, on Pacific’s properties at, about, or near the
Mazama Claims that are located in Okanagan County, Washington State,
U.S.A.
AND
WHEREAS NICOLA has agreed to do the said diamond drilling and to perform the
other services required upon the terms, conditions and provisos herein
contained.
NOW
THEREFORE this agreement Witnesseth that in consideration of the payment of
the
amount herein stipulated and of the mutual covenants hereinafter contained,
the
parties hereto agree as follows:
SCHEDULE
OF RATES –
CORING RATES
THAT
Pacific hereby employs NICOLA to drill on any of Pacific’s properties at, about,
or near the Mazama Claims that are located in Okanagan County, Washington State,
U.S.A. (hereinafter referred to as the “said property”) a series of bore holes
using an NQ core barrel producing a core of approximately two (2) inches or
less. Pacific agrees to pay NICOLA on a by the foot bases for all drilling,
according to the following schedule and/or rates:
1
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Holes
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From
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To
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Price/Foot
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1-7
or more
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0 feet
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to
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150
feet
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$35.00 US funds per foot
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1-7
or more
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150
feet
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to
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300
feet
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$37.00 US funds per foot
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It
is
understood that measurements of all bore holes for the above stated period
of
drilling shall be from the top of the casing or stand pipe, as the case may
be.
NICOLA
does not guarantee the direction of any hole beyond the collar and will make
best efforts to get as high of percentage of core recovery as due diligence
and
current techniques will allow. NICOLA does not guarantee to drill any hole
to
any specified depth but will make best efforts to complete all
holes.
Daily
core samples will be available at the drilling sites for Pacific to pick up.
Daily core samples shall be the whole responsibility of Pacific including but
not limited to pick-up and transportation.
FIELD
COST
THAT
it
is agreed that field cost be defined as all direct or indirect labour, including
supervision, drill and support equipment per hour, all pipe, tools or casing
lost, any diamond products, and all materials, services and supplies used or
consumed in this field of work shall be paid by Pacific including the
following:
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RATES:
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Labour:
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$65.00
per man hour
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Drill:
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$110.00
per drill hour
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Tractor
Trailer:
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$110.00
per hour
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4x4
(each)
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$100.00
per day
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ATV
(each)
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$79.55
per day
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Supply
Pump (bean 420)
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$75.00
per day
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Materials
or services required (F.O.B. the drill site): cost
plus
10% (ten percent)
HQ
DRILLING
It
is
understood that all mutually agreed to HQ diamond core drilling including all
related activities and equipment will be charged as herein the set rates for
NQ
Drilling plus 10% (Ten Percent).
OVERBURDEN
THAT
Pacific agrees to pay for casing or stand pipe for any Hole(s), on a field
cost
basis including the following schedule and/or rates:
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Holes
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From
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To
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Price/Foot
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1-7
or more
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0
feet
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to
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30
feet
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$35.00 US funds per foot
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2
MOBILIZATION
–
DEMOBILIZATION
THAT
NICOLA agrees to move its equipment, personnel, vehicles, and supplies, from
their current place of rest to the Mazama property and from the Mazama property
back again, on a field cost basis.
MOVING
BETWEEN HOLES – SETTING
UP – TEARING
DOWN
THAT
Pacific agrees that hours employed tearing down the drill and support equipment,
moving the drill and support equipment between holes, setting up the drill
and
support equipment and all related activities, including the drilling of any
needed anchors, will be charged on a field cost basis.
WATER
SUPPLY
That
NICOLA agrees that the above schedule of rates is deemed to include the pumping
of water for drilling from an adequate
water
source up to a lateral distance of 450 (four hundred fifty) feet and/or lift
of
less than 75 (seventy-five) feet during none freezing temperatures. Should
any
of the above water requirements be exceeded, NICOLA will when ever possible
supply the needed extra equipment and man hours on a field cost basis. The
setup, removal and maintenance of all drill related water systems including
but
not limited to lines, heaters, shacks, and pumps will be charged at a field
cost
rate.
DRILLING
WITH MUD – HOLE STABILIZING
THAT
it
is mutually agreed that should any stabilizing or mud be required, to aid in
core recovery and hole completion, including any grease and/or additives, while
core drilling, such mud additives and/or activities will be charged on a field
cost basis.
That
hole(s) stabilizing shall mean reaming, circulating mud and/or additives through
cavities, loose or caving materials or faulted areas and any related
activities.
DOWNHOLE
TESTING
THAT
NICOLA agrees to do any acid drip and/or any down hole surveying tests as
requested by Pacific representative on a field cost basis. Any lost or damaged
hole testing equipment will be charged to Pacific on a field cost
basis.
3
CORE
BOXES
Pacific
agrees to supply all core boxes, in the correct size along with lids for
transporting at no cost to NICOLA.
REAMING
AND CASING
THAT
Pacific agrees that any reaming of rods and/or casing along with the cementing
due to poor hold conditions shall be completed on a field const basis. Casing
and/or would also be charged at the rate of $9.00 per foot reamed.
CAVED
OR BROKEN GROUND
THAT
in
the event that cavities and/or loose and/or swelling ground and caving materials
and/or excessive water are encountered of a nature to prevent the successful
completion of any hole, NICOLA does not, under such conditions but not limited
to such conditions, guarantee to drill to pre-determined depth. In the event
it
becomes necessary to abandon the hole, Pacific agrees to pay for such incomplete
holes and the rate herein specified for all foots completed. In the event that
caved or broken ground conditions prevent normal drilling, including but not
limited to the blocking of the inner tube assembly from locking position, any
needed techniques used to fix and/or prevent this from happening will be charged
on a field cost basis.
LOST
OR DAMAGED EQUIPMENT
Whenever
conditions cause pipe, casing and/or any attachments to be damaged, lost, left
and/or stuck in a hole, Pacific agrees to pay for said casing, pipe and all
attachments at field cost rates. Any time spent on the process to retrieve
or
fix the said pieces will be charged on a field cost basis.
DIRECTIONAL
AND CONTROLLED DRILLIDNG
THAT
it
is mutually agreed that directional drilling to change the direction of a drill
hole and controlled drilling to maintain the angle of a bore hole shall not
be
part of this agreement.
ACCESS
ROADS – DRILL SITES
Pacific
is also responsible for and agrees to properly prepare the access roads to
and
from the drill sites including the drill pads and sumps at no charge to NICOLA.
NICOLA agrees to case and drill on the sites and at angles and azimuth selected
by the Pacific representative relating to the place and time of drilling. Both
Pacific and NICOLA agrees that no drilling hole shall be collared at an angle
of
less than 45 (forty-five) degrees. Any of NICOLA’S resources (man, equipment,
supplies), spent and/or used on the building, preparing or cleaning up of any
roads, pads or drill sites will be charged at a field cost
rate.
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TRAVEL
Daily
travel time for any and all drilling related activities of men and supplies
will
be charged on a field cost basis.
FUELS
AND OILS
That
Pacific agrees to pay for all fuels, oils and greases necessary for the
completion of the minimum foots, including any drilling beyond the minimum
to be
drilled, at no cost to Nicola.
BOARD
AND LODGING
THAT
Pacific will supply board and lodging suitable to NICOLA for any and all
NICOLA’S personnel at no cost to NICOLA.
RIGHTS
OF WAY, INGRESS AND EGRESS
THAT
Pacific shall prove, at no cost to NICOLA, all rights of way and ingress and
egress to all lands that may be required to enable NICOLA to carry out the
work
as specified. NICOLA shall be permitted through Pacific to cut and fell any
timber on Pacific’s Mineral property as may be required in the course of work.
Pacific shall obtain prior permission as required by the relevant authorities
in
accordance with all rules and regulations of the necessary authorities before
giving specific instructions to NICOLA.
DAILY
SHIFT RPORTS
THAT
Pacific agrees to have representatives or agents on or near the property to
sign
daily shift reports on a regular basis and that cost items, hours and core
drilled shall be deemed accepted but not limited to the said
reports.
PAYMENTS
THAT
it
is mutually agreed between the parties that invoices will be rendered at the
rates specified in the herein agreement in US Funds and payment of the invoices
shall be due and owing on issuance of invoices and in accordance with the terms
hereinafter set out, that is:
Invoices
shall be issued for all work preformed no less than every 14 days, and payment
in US Funds shall be due and owing and payable upon receipt.
Where
default of payment in US Funds of the invoice occurs the interest rate of 2%
(two percent) monthly, 24% (twenty four percent) yearly, will be added on
outstanding invoice(s). Compounded shall be payable in US Funds and all costs,
charges and expenses made in collection of the invoice(s) outstanding and unpaid
shall be added to the balances outstanding and be payable in US Funds forthwith
together with interest at the said rate.
Where
default of payment of the invoice(s) occurs NICOLA reserves the right to put
its
equipment and personnel on stand-by and/or if it wishes remove its equipment
and
personnel from property.
All
payments due under this agreement shall be made by Sostad on behalf of
Pacific.
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Pacific
shall initially advance $150,000 to Sostad to be deposited in a separate account
and paid to NICOLA against invoices addressed to Pacific and approved by
Sostad.
Unless
otherwise agreed, Pacific shall continue to advance funds to Sostad as required
to meet all payments due to NICOLA
SECURITY
THAT
NICOLA will not give out any information regarding drill results or give access
of core to any person other than to any of Pacific’s employees.
ENVIRONMENTAL
REQUIREMENTS
All
labour, supplies and equipment used by NICOLA for any and all environmental
issues will be charged on a field cost basis.
COMPENSATION
AND INSURANCE
THAT
NICOLA shall maintain coverage for all its personnel under the Worker’s
Compensation Laws of Washington State, Okanagan County. NICOLA shall provide,
maintain, and pay for public, automobile and Comprehensive General Liability
Insurance in the amount of a minimum $1,000,000.00 (One Million Dollars) per
occurrence, excluding any claims arising out of any negligent act or omission
of
NICOLA its servants or agents. NICOLA shall not be responsible for strikes,
fires, and Acts of God for any damages due to any cause beyond its active
control. NICOLA shall provide proof of such insurance to Pacific prior to
commencement of any work on Pacific’s properties.
DISCIPLINE
NICOLA
shall at all times enforce strict discipline and maintain good order among
its
employees. Any employee of NICOLA who is justifiably objectionable and
unsatisfactory to Pacific shall be removed from the job and replaced by an
employee who is deemed satisfactory as soon as possible.
PROGRAM
SCHEDULE
The
drilling program will commence on approximately April 15th, 2007 as long as
the
drill, equipment and personnel are available. A minimum of 1 (One) drill with
up
to three workers, 1 (one) driller and up to 2 (two) driller helpers per drill
will be used for the program. Work will proceed with the two shits working
12
hours (TWELVE HOURS) per shift, 7 (SEVEN) days per week, or as near to this
schedule as can be maintained. Drilling will continue until the lesser of 5000
(Five thousand) feet has been drilled or 45 (Forty Five) days has passed.
Further core drilling can continue either after the minimum feet have been
drilled and/or the maximum days have passed under the terms of this contract
if
NICOLA wishes and the total feet to be drilled have not been
completed.
6
STAND
BY
Should
NICOLA be on stand by, for any reason directly or indirectly related to the
drilling of the minimum footage including air support and/or the weather
conditions then Pacific agrees to pay for stand by on a field cost basis
continuously until the delay is removed, corrected and/or goes
away.
DEPOSIT-RETAINING
FEE
That
Pacific agrees, on signing of this statement, to advance a retaining fee of
$50,000.00 (Fifty Thousand Dollars) to NICOLA and will be applied against final
invoices.
COUNTERPARTS
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, and all of which together shall constitute one and the
same
instrument. Execution and delivery of this Agreement by exchange of facsimile
copies bearing facsimile signature of a party shall constitute a valid and
binding execution and delivery of this Agreement by such party. Such facsimile
copies shall constitute enforceable original documents.
IN
WITNESS THEREFORE the parties hereto have hereunto have executed this agreement
as of the date first written above.
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▇▇▇▇▇▇▇, President
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473203
B.C. LTD.
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dba
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DRILLING
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/s/▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, Corporate Secretary
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7