DATED: October 15, 1999
BETWEEN:
HIGH ▇▇▇▇▇ HOLDINGS LTD.
OF THE FIRST PART
AND:
AURORA GOLD CORPORATION
OF THE SECOND PART
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O P T I O N A G R E E M E N T
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▇▇▇▇▇▇ ▇▇▇▇▇ HARWARDT
Barristers and Solicitors
▇▇▇▇▇ ▇▇▇▇ - ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇
OPTION AGREEMENT
TABLE OF CONTENTS
Article Page
INTERPRETATION............................................................... 1
REPRESENTATIONS AND WARRANTIES............................................... 3
OPTION....................................................................... 4
RIGHT OF ENTRY............................................................... 6
POWERS, DUTIES AND OBLIGATIONS OF OPTIONEE................................... 6
VESTING OF INTEREST.......................................................... 8
TERMINATION OF OPTION........................................................ 8
CONFIDENTIALITY.............................................................. 9
RESTRICTIONS ON ALIENATION................................................... 9
NOTICE....................................................................... 9
FURTHER ASSURANCES........................................................... 10
RULE AGAINST PERPETUITIES.................................................... 10
TIME OF THE ESSENCE.......................................................... 10
ENUREMENT.................................................................... 10
FORCE MAJEURE................................................................ 10
DEFAULT...................................................................... 11
SEVERABILITY................................................................. 11
AMENDMENT.................................................................... 11
ENTIRE AGREEMENT............................................................. 11
OPTION ONLY.................................................................. 12
GOVERNING LAW AND ARBITRATION................................................ 12
OPTION AGREEMENT
THIS AGREEMENT is dated for reference the 15th day of October, 1999.
BETWEEN:
HIGH ▇▇▇▇▇ HOLDINGS LTD., a body corporate incorporated
pursuant to the laws of the British Virgin Islands and
having an office at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(the "Optionor")
OF THE FIRST PART
AND
AURORA GOLD CORPORATION, a body corporate incorporated
pursuant to the laws of the State of Delaware, one of the
United States of America, and having an office at ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇
(the "Optionee")
OF THE SECOND PART
W H E R E A S:
A. The Optionor is the legal and beneficial owner of the Property as more
particularly described in Schedule "A" attached to and made a part of this
Agreement;
B. The Optionor wishes to grant and the Optionee wishes to acquire the Property
on the terms and subject to the conditions set out in this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
premises and of the mutual promises, covenants, conditions, representations and
warranties herein set out, the parties hereto agree as follows:
1. INTERPRETATION
1.1 For the purposes of this Agreement, including the recitals and any schedules
hereto, unless there is something in the subject matter or context inconsistent
therewith, the following words and expressions shall have the following
meanings:
(a) "Affiliate" shall have the meaning attributed to it by the Company Act
(British Columbia);
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(b) "Agreement" means this agreement, as amended from time to time;
(c) "Commercial Production" means the operation of the Property or any
portion thereof as a producing mine and the production of mineral
products therefrom (excluding bulk sampling, pilot plant or test
operations);
(d) "Effective Date" means the date this Agreement is deemed to take
effect, being the 15th day of October, 1999, or such other date as
shall be agreed to, in writing, by the parties;
(e) "Expenditures" mean all cash, expenses, obligations and liabilities,
other than for personal injury or property damage, of whatever kind or
nature spent or incurred directly or indirectly in connection with the
exploration, development or equipping of the Property or any portion
thereof for Commercial Production including, without limiting the
generality of the foregoing, monies expended in constructing, leasing
or acquiring all facilities, buildings, machinery and equipment in
connection with Mining Work, in paying any taxes, fees, charges,
payments or rentals (including payments in lieu of assessment work) or
otherwise to keep the Property or any portion thereof in good standing
(including any payment to or in respect of acquiring any agreement or
confirmation from any holder of surface rights respecting the Property
or any portion thereof), in carrying out any survey of the Property or
any portion thereof, in doing geophysical, geochemical and geological
surveys, in trenching, drilling, assaying, metallurgical testing, bulk
sampling and pilot plant operations, in paying the fees, wages,
salaries, travelling expenses, fringe benefits (whether or not
required by law) of all persons engaged in work with respect to and
for the benefit of the Property or any portion thereof, in paying for
the food, lodging and other reasonable needs of such persons, in
preparing any reports and in supervising and managing any work done
with respect to and for the benefit of the Property or any portion
thereof, or in any other respects necessary for the due carrying out
of Mining Work, including any operator's overhead fees;
(f) "Exploration Permit" means the exploration permit (permis de
recherche) dated July 14, 1999 issued by the Minister of Industry of
Tunisia granting to the Optionor the right to explore for base and
precious metals (3rd group as described in the Mining Law Decree of
the Republic of Tunisia dated January 1, 1953) within the area covered
thereby, a copy of which exploration permit forms part of Schedule "A"
hereto;
(g) "Mining Work" means every kind of work done on or in respect of the
Property or the products therefrom by or under the direction of or on
behalf of or for the benefit of a party and, without limiting the
generality of the foregoing, includes assessment work, geophysical,
geochemical and geological surveying, studies and mapping,
investigating, trenching, drilling, designing, examining, equipping,
improving, surveying, shaft sinking, raising, crosscutting and
drifting, searching for, digging, trucking, sampling, working and
procuring minerals, ores, metals and concentrates, surveying and
bringing any mineral claims or other interests to lease or patent,
reporting and all other work usually considered to be prospecting,
exploration, development and mining work;
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(h) "Net Smelter Returns Royalty" means that charge on proceeds from
production as described in Schedule "B";
(i) "Option" means the option granted by the Optionor to the Optionee
under Section 3.1 of this Agreement;
(j) "Property" means the Exploration Permit more particularly described in
Schedule "A" hereto together with the surface rights, mineral rights,
personal property and consents and authorizations associated
therewith, and shall include any renewal thereof and any other form of
successor or substitute title thereto;
1.2 In this Agreement, all dollar amounts are expressed in lawful currency of
the United States of America, unless specifically provided to the contrary.
1.3 The titles to the respective Articles hereof shall not be deemed to be a
part of this Agreement but shall be regarded as having been used for convenience
only.
1.4 Words used herein importing the singular number shall include the plural,
and vice-versa, and words importing the masculine gender shall include the
feminine and neuter genders, and vice-versa, and words importing persons shall
include firms, partnerships and corporations.
2. REPRESENTATIONS AND WARRANTIES
2.1 Each party represents and warrants to the others that:
(a) if a company, it is a company duly incorporated, validly subsisting
and in good standing with respect to filing of annual reports under
the laws of the jurisdiction of its incorporation and is or will be
qualified to do business and to hold an interest in the Property in
the jurisdiction in which the Property is located;
(b) it has full power and authority to carry on its business and to enter
into this Agreement and any agreement or instrument referred to in or
contemplated by this Agreement and to carry out and perform all of its
obligations and duties hereunder;
(c) it has duly obtained all authorizations for the execution, delivery
and performance of this Agreement, and such execution, delivery and
performance and the consummation of the transactions herein
contemplated will not conflict with, or accelerate the performance
required by or result in any breach of any covenants or agreements
contained in or constitute a default under, or result in the creation
of any encumbrance, lien or charge under the provisions of its
constating or initiating documents or any indenture, agreement or
other instrument whatsoever to which it is a party or by which it is
bound or to which it may be subject and will not contravene any
applicable laws.
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2.2 The Optionor represents and warrants to the Optionee that:
(a) it is the sole beneficial owner of a 100% interest in and to the
Property;
(b) the Property is in good standing under the laws of the jurisdiction in
which the Property is located, until and including the expiry date set
forth in Schedule "A" hereto;
(c) the Property is free and clear of all liens, charges and encumbrances
and is not subject to any right, claim or interest of any other
person;
(d) it has complied with all laws in effect in the jurisdiction in which
the Property is located with respect to the Property and such Property
has been duly and properly staked and recorded in accordance with such
laws and that the Optionee may enter in, under or upon the Property
for all purposes of this Agreement without making any payment to, and
without accounting to or obtaining the permission of, any other person
other than any payment required to be made under this Agreement; and
(e) there is no adverse claim or challenge against or to the ownership of
or title to the Property, or any portion thereof nor is there any
basis therefor and there are no outstanding agreements or options to
acquire or purchase the Property or any portion thereof or interest
therein and no person has any royalty or interest whatsoever in
production or profits from the Property or any portion thereof, and
the Property is not the whole or substantially the whole of the
Optionor's assets or undertaking.
2.3 The representations and warranties hereinbefore set out are conditions on
which the parties have relied in entering into this Agreement, are to be
construed as both conditions and warranties and shall, regardless of any
investigation which may have been made by or on behalf of any party as to the
accuracy of such representations and warranties, survive the closing of the
transaction contemplated hereby and each of the parties will indemnify and save
the other harmless from all loss, damage, costs, actions and suits arising out
of or in connection with any breach of any representation or warranty contained
in this Agreement, and each party shall be entitled, in addition to any other
remedy to which it may be entitled, to set off any such loss, damage or costs
suffered by it as a result of any such breach against any payment required to be
made by it to any other party hereunder.
3. OPTION
3.1 The Optionor hereby grants to the Optionee the sole and exclusive right and
option to acquire a one hundred percent (100%) interest in and to the Property,
free and clear of all liens, charges, encumbrances, claims, rights or interest
of any person, subject to the terms of the Exploration Permit, such option to be
exercisable by the Optionee by funding 100% of the cost of carrying out the
Expenditures required under the terms of the Exploration Permit to fulfill the
requirements thereunder and to keep the Exploration Permit in good standing,
which Expenditures will not be less than $500,000, in aggregate, to be incurred
in the following manner:
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(a) $50,000 on or by the first anniversary of the Effective Date;
(b) an additional $50,000 on or by the second anniversary of the Effective
Date;
(c) an additional $75,000 on or by the third anniversary of the Effective
Date;
(d) an additional $150,000 on or by the fourth anniversary of the
Effective Date; and
(f) an additional $175,000 on or by the fifth anniversary of the Effective
Date;
provided that, to the extent that Expenditures in any year exceed the minimum
amounts set forth above, such excess Expenditures shall be a credit towards the
minimum Expenditure commitment in subsequent years.
3.2 As additional consideration for the exercise of the Option granted
hereunder, the Optionee shall pay an aggregate $75,000 to the Optionor, in the
following manner:
(a) the sum of $5,000 on the Effective Date;
(b) the sum of $10,000 on the first anniversary of the Effective Date;
(c) the sum of $15,000 on the second anniversary of the Effective Date;
(d) the sum of $20,000 on the third anniversary of the Effective Date; and
(e) the sum of $25,000 on the fourth anniversary of the Effective Date.
3.3 The Optionee acknowledges that on commencement of Commercial Production, the
Property will be subject to the Net Smelter Returns Royalty. After vesting of
the Property in the Optionee pursuant to the provisions of Section 6, the
Optionee shall pay to the Optionor an advance Net Smelter Returns Royalty
payment of $25,000 on each anniversary of the Effective Date, the first of such
advance Net Smelter Returns Royalty payment to be made on the fifth anniversary
of the Effective Date. At any time following vesting of the Property in the
Optionee, the Optionee may terminate its obligation to pay any further advance
Net Smelter Returns Royalty payments by offering to transfer the Property back
to the Optionor, or its assignee as the case may be, for nominal consideration.
All advance Net Smelter Return Royalty payments shall be credited against the
Optionee's obligation to pay Net Smelter Return Royalties following the
commencement of Commercial Production.
3.4 At any time following the vesting of the Property in the Optionee, the
Optionee may elect, and the Optionor hereby grants to the Optionee an option
(the "NSR Option"), to purchase one-half (1/2) of the Net Smelter Returns
Royalty (constituting one percent (1%) of the Net Smelter Returns). The NSR
Option may be exercised by the Optionee by notice delivered to the Optionor, and
upon such notice having been delivered, the Optionor will sell one-half (1/2) of
the Net Smelter Returns Royalty (constituting one percent (1%) of Net Smelter
Returns) to the Optionee, for and in consideration of the sum of One Million
Dollars ($1,000,000), payable to the Optionor by way of certified cheque or bank
draft within thirty (30) days of the delivery of the notice exercising the NSR
Option.
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3.5 In the event that, at any time following the vesting of the Property in the
Optionee, the Optionor intends to dispose of all of any portion of its Net
Smelter Returns Royalty or receives an offer to acquire all or any portion of
its Net Smelter Returns Royalty, which it intends to accept, the Optionee shall,
for a period of 30 days, have the exclusive first right to acquire such Net
Smelter Returns Royalty or portion thereof, upon the same terms and conditions
as those intended or received by the Optionor.
4. RIGHT OF ENTRY
4.1 Except as otherwise provided in this Agreement, until the Option is
exercised or terminated in accordance with the terms of this Agreement, the
Optionee, its servants and agents shall have the sole and exclusive right to:
(a) enter in, under or upon the Property and conduct Mining Work;
(b) exclusive and quiet possession of the Property;
(c) bring upon the Property and to erect thereon such mining facilities as
it may consider advisable; and
(d) remove from the Property ore or mineral products for the purpose of
bulk sampling, pilot plant or test operations.
5. POWERS, DUTIES AND OBLIGATIONS OF OPTIONEE
5.1 The Optionee shall have full right, power and authority to do everything
necessary or desirable to carry out an exploration program on the Property and
to determine the manner of exploration and development of the Property and,
without limiting the generality of the foregoing, the right, power and authority
to:
(a) regulate access to the Property, subject only to the right of the
Optionor and its representatives to have access to the Property at all
reasonable times for the purpose of inspecting work being done thereon
but at their own risk and expense;
(b) employ and engage such employees, agents and independent contractors
as it may consider necessary or advisable to carry out its duties and
obligations hereunder and in this connection to delegate any of its
powers and rights to perform its duties and obligations hereunder but
the Optionee shall not enter into contractual relationships except on
terms which are commercially competitive;
(c) execute all documents, deeds and instruments, do or cause to be done
all such acts and things and give all such assurances as may be
necessary to maintain good and valid title to the Property and each
party hereby irrevocably constitutes the Optionee its true and lawful
attorney to give effect to the foregoing and hereby agrees to
indemnify and save the Optionee harmless from any and all costs, loss
or damage sustained or incurred without gross negligence or bad faith
by the Optionee directly or indirectly as a result of its exercise of
its powers pursuant to this Subsection 5.1(c); and
- 7 -
(d) conduct such title examinations and cure such title defects as may be
advisable in the reasonable judgment of the Optionee.
5.2 The Optionee shall have the duties and obligations to:
(a) keep the Property free and clear of all liens and encumbrances arising
from its operations hereunder (except liens contested in good faith by
the Optionee) and in good standing by the doing and filing, or payment
in lieu thereof, of all necessary assessment work and payment of all
taxes required to be paid and by the doing of all other acts and
things and the making all other payments required to be made which may
be necessary in that regard;
(b) permit the Optionor and its representatives, duly authorized by it, in
writing, at their own risk and expense, access to the Property at all
reasonable times and to all records prepared by the Optionee in
connection with Mining Work. The Optionee shall prepare and deliver to
the Optionor at reasonable intervals, but in any event not less
frequently than once annually, a report on all Mining Work conducted
by the Optionee, which annual report shall be delivered to the
Optionor sixty (60) days prior to each anniversary of the date of the
grant of the Exploration Permit as set out in subsection 1.1(f)
hereof;
(c) conduct all work on or with respect to the Property in a careful and
minerlike manner and in accordance with the applicable laws of the
jurisdiction in which the Property is located and indemnify and save
the Optionor harmless from any and all claims, suits or actions made
or brought against the Optionor as a result of work done by the
Optionee on or with respect to the Property;
(d) obtain and maintain or cause any contractor engaged by it hereunder to
obtain and maintain, during any period in which active work is carried
out hereunder, not less than the following:
(i) employer's liability insurance covering each employee engaged in
the operations hereunder to the extent of $1,000,000;
(ii) comprehensive general liability insurance in such form as may be
customarily carried by a prudent operator for similar operations
with a bodily injury, death and property damage limit of
$1,000,000 inclusive;
(iii) vehicle, aircraft and watercraft insurance covering all
aircraft, vehicles and watercraft owned and non-owned, operated
and/or licensed by the Optionee, with a bodily injury, death and
property damage limit of $5,000,000 inclusive;
and will forward to the Optionor, a certificate of insurance for each
of such amounts showing the Optionor as a named insured, and will give
the Optionor advance written notice of any reduction or termination of
such coverage;
(e) maintain true and correct books, accounts and records of operations
hereunder.
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6. VESTING OF INTEREST
6.1 Forthwith upon the Optionee exercising the Option by performing the
requirements of Sections 3.1 and 3.2, an undivided one hundred percent (100%)
interest in and to the Property shall vest, and shall be deemed for all purposes
hereof to have vested, in the Optionee.
6.2 The parties acknowledge the right and privilege of the Optionor and Optionee
to file, register and/or to otherwise deposit a copy of this Agreement in the
appropriate recording office for the jurisdiction in which the Property is
located and with any other governmental agencies to give third parties notice of
this Agreement, and hereby agree, each with the others, to do or cause to be
done all acts or things reasonably necessary to effect such filing, registration
or deposit.
7. TERMINATION OF OPTION
7.1 In the event of default in the performance of the requirements of Section
3.1, then subject to the provisions of Sections 7.3 and 17.1 of this Agreement,
the Option and this Agreement shall terminate.
7.2 The Optionee shall have the right to terminate this Agreement by giving 30
days' written notice of such termination to the Optionor and upon the effective
date of such termination this Agreement shall be of no further force and effect,
except the Optionee shall be required to perform any obligations which are the
responsibility of the Optionee as specified under the provisions of this
Agreement and which have not been satisfied.
7.3 Notwithstanding any other provisions of this Agreement, in the event of
termination of this Agreement, the Optionee shall:
(a) deliver to the Optionor any and all reports, samples, drill cores and
engineering data of any kind whatsoever pertaining to the Property or
related to Mining Work which has not been previously delivered to the
Optionor;
(b) perform or secure the performance of all reclamation and environmental
rehabilitation as may be required by all applicable legislation; and
(c) upon notice from the Optionor, remove all materials, supplies and
equipment from the Property, provided however, that the Optionor may
dispose of any such materials, supplies or equipment not removed from
the Property within one hundred and eighty (180) days of receipt of
such notice by the Optionee.
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8. CONFIDENTIALITY
8.1 All information and data concerning or derived from Mining Work shall be
confidential and, except to the extent required by law or by regulation of any
securities commission, stock exchange or other regulatory body, shall not be
disclosed to any person other than a party's professional advisors or an
Affiliate without the prior written consent of the other party or parties, which
consent shall not unreasonably be withheld.
8.2 The text of any news releases or other public statements which a party
desires to make with respect to the Property shall be made available to the
other party or parties prior to publication and the other party or parties shall
have the right to make suggestions for changes therein within twenty four (24)
hours of delivery.
9. RESTRICTIONS ON ALIENATION
9.1 No party (the "Selling Party") shall sell, transfer, convey, assign,
mortgage or grant an option in respect of or grant a right to purchase or in any
manner transfer or alienate all or any portion of its interest or rights under
this Agreement without the prior consent in writing, within 30 days of receipt
of notice thereof, of the other party, such consent not to be unreasonably
withheld, and the failure to notify the Selling Party within the said 30 days
that such consent has been withheld shall be deemed to constitute the consent of
the other party.
9.2 Before the completion of any sale or other disposition by any party of its
interests or rights or any portion thereof under this Agreement, the Selling
Party shall require the proposed acquirer to enter into an agreement with the
party not selling or otherwise disposing on the same terms and conditions as set
out in this Agreement.
9.3 The provisions of Sections 9.1 and 9.2 shall not prevent a party from
entering into an amalgamation or corporate reorganization which will have the
effect in law of the amalgamated or surviving company possessing all the
property, rights and interests and being subject to all the debts, liabilities
and obligations of each amalgamating or predecessor company, or prevent a party
from assigning its interest to an Affiliate of such party provided that the
Affiliate first complies with Section 9.2 and agrees in writing with the other
party to re-transfer such interest to the originally assigning party immediately
before ceasing to be an Affiliate of such party.
10. NOTICE
10.1 Any notice, direction, or other instrument required or permitted to be
given under this Agreement shall be in writing and shall be given by the
delivery of same or by mailing same by prepaid registered or certified mail or
by sending same by telegram, telex, telecommunication or other similar form of
communication, in each case addressed to the intended recipient at the address
of the respective party set out on the first page hereof.
10.2 Any notice, direction, or other instrument aforesaid will, if delivered, be
deemed to have been given and received on the day it was delivered, and if
mailed, be deemed to have been given and received on the tenth business day
following the day of mailing, except in the event of disruption of the postal
service in which event notice will be deemed to be received only
- 10 -
when actually received and, if sent by telegram, telecommunication or other
similar form of communication, be deemed to have been given and received on the
day it was actually received.
10.3 Any party may at any time give notice in writing to the others of any
change of address, and from and after the giving of such notice, the address
therein specified will be deemed to be the address of such party for the
purposes of giving notice hereunder.
11. FURTHER ASSURANCES
11.1 Each of the parties covenants and agrees, from time to time and at all
times, to do all such further acts and execute and deliver all such further
deeds, documents and assurances as may be reasonably required in order to fully
perform and carry out the terms and intent of this Agreement.
12. RULE AGAINST PERPETUITIES
12.1 If any right, power or interest of any party in property under this
Agreement would violate the rule against perpetuities, then such right, power or
interest shall terminate at the expiration of twenty (20) years after the death
of the last survivor of all the lineal descendants of Her Majesty, Queen
▇▇▇▇▇▇▇▇▇ ▇▇ of England, living on the date of the execution of this Agreement.
13. TIME OF THE ESSENCE
13.1 Time shall be of the essence in the performance of this Agreement.
14. ENUREMENT
14.1 This Agreement shall enure to the benefit of and be binding upon the
parties and their respective successors and permitted assigns.
15. FORCE MAJEURE
15.1 No party will be liable for its failure to perform any of its obligations
under this Agreement due to a cause beyond its reasonable control (except those
caused by its own lack of funds) including, but not limited to, acts of God,
fire, storm, flood, explosion, strikes, lockouts or other industrial
disturbances, acts of public enemy, war, riots, laws, rules and regulations or
orders of any duly constituted governmental authority, or nonavailability of
materials or transportation (each an "Intervening Event").
15.2 All time limits imposed by this Agreement will be extended by a period
equivalent to the period of delay resulting from an Intervening Event.
15.3 A party relying on the provisions of Section 16.1 hereof, insofar as
possible, shall promptly give written notice to the other party of the
particulars of the Intervening Event, shall
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give written notice to all other parties as soon as the Intervening Event ceases
to exist, shall take all reasonable steps to eliminate any Intervening Event and
will perform its obligations under this Agreement as far as practicable, but
nothing herein will require such party to settle or adjust any labour dispute or
to question or to test the validity of any law, rule, regulation or order of any
duly constituted governmental authority or to complete its obligations under
this Agreement if an Intervening Event renders completion impossible.
16. DEFAULT
16.1 If a party (the "Defaulting Party") is in default of any requirement herein
set forth, the party affected by such default (the "Non-Defaulting Party") shall
give written notice to all other parties within thirty (30) days of becoming
aware of such default, specifying the default, and the Defaulting Party shall
not lose any rights under this Agreement, nor shall the Agreement or the Option
terminate, nor shall the Non-Defaulting Party have any rights, remedies or cause
of action pursuant to this Agreement, or otherwise hereunder as a result of such
default, unless within thirty (30) days after the giving of notice of default by
the Non-Defaulting Party, the Defaulting Party has failed to cure the default by
the appropriate performance, and if the Defaulting Party fails within such
period to cure such default, the Non-Defaulting Party shall only then be
entitled to seek any remedy it may have on account of such default.
17. SEVERABILITY
17.1 If any one or more of the provisions contained herein should be invalid,
illegal or unenforceable in any respect in any jurisdiction, the validity,
legality and enforceability of such provisions shall not in any way be affected
or impaired thereby in any other jurisdiction and the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
18. AMENDMENT
18.1 This Agreement may not be changed orally but only by an agreement in
writing, signed by the party against which enforcement, waiver, change,
modification or discharge is sought.
19. ENTIRE AGREEMENT
19.1 This Agreement constitutes and contains the entire agreement and
understanding between the parties and supersedes all prior agreements,
memoranda, correspondence, communications, negotiations and representations,
whether oral or written, express or implied, statutory or otherwise between the
parties or any of them with respect to the subject matter hereof.
- 12 -
20. OPTION ONLY
20.1 This Agreement provides for an option only, and except as specifically
provided otherwise, nothing herein contained shall be construed as obligating
the Optionee to do any acts or make any payments hereunder and any act or acts
or payment or payments as shall be made hereunder shall not be construed as
obligating the Optionee to do any further act or make any further payment.
21. GOVERNING LAW AND ARBITRATION
21.1 This Agreement shall be governed by and interpreted in accordance with the
laws of the Province of British Columbia.
21.2 All disputes arising out of or in connection with this Agreement, or in
respect of any defined legal relationship associated therewith or derived
therefrom, shall be referred to and finally resolved by arbitration under the
rules of the British Columbia International Commercial Arbitration Centre.
21.3 The appointing authority shall be the British Columbia International
Commercial Arbitration Centre and the case shall be administered by the British
Columbia International Commercial Arbitration Centre in accordance with its
"Procedures for Cases under the BCICAC Rules" at Vancouver, British Columbia.
IN WITNESS WHEREOF the parties have executed this Agreement as of the day,
month and year first above written.
THE COMMON SEAL of HIGH ▇▇▇▇▇ )
HOLDINGS LTD. was hereto affixed in )
the presence of: )
)
)
/s/ ▇▇▇▇▇▇ ▇▇▇▇ )
-------------------------------------------- )
Authorized Signatory ) c/s
)
)
▇▇▇▇▇▇ ▇▇▇▇ )
-------------------------------------------- )
Authorized Signatory )
)
THE COMMON SEAL of AURORA )
GOLD CORPORATION was hereto )
affixed in the presence of: )
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/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ )
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Authorized Signatory ) c/s
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Authorized Signatory )
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THIS IS SCHEDULE "A" TO THE OPTION AGREEMENT DATED
OCTOBER 15, 1999 BETWEEN HIGH ▇▇▇▇▇ HOLDINGS LTD.
AND AURORA GOLD CORPORATION
Description of Property
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Name of Exploration Exploration Expiry Date of
Permit Area Permit Numbers Area Exploration Permit
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Ouled Moussa (Bou 640397-640400 1600 hectares July 13, 2002
Jabeur Est Extension)
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THIS IS SCHEDULE "B" TO THE OPTION AGREEMENT DATED
OCTOBER 15, 1999 BETWEEN HIGH ▇▇▇▇▇ HOLDINGS LTD.
AND AURORA GOLD CORPORATION
Net Smelter Returns Royalty Calculation
1. As additional consideration the Optionee acknowledges and agrees that its
interest in the Property shall be subject to a royalty or charge in the
amount of two percent (2%) of Net Smelter Returns in favour of the
Optionor, subject to the provisions of sections 3.4 and 3.5 of the Option
Agreement to which this Schedule "B" is appended.
2. For the purpose of this Agreement, "Net Smelter Returns" shall mean the
actual proceeds received by the Optionee from a smelter or other place of
sale or treatment with respect to all ore removed by the Optionee from the
Property as evidenced by its returns or settlement sheets after deducting
from the said proceeds all freight or other transportation costs from the
shipping point to the smelter or other place of sale or treatment but
without any other deduction whatsoever.
3. Net Smelter Returns due and payable to the Optionor hereunder shall be paid
within thirty (30) days after receipt of the said actual proceeds by the
Optionee.
4. Within ninety (90) days after the end of each fiscal year of the Optionee
during which the Property was in commercial production, the records
relating to the calculation of Net Smelter Returns during that fiscal year
shall be audited and any adjustments shall be made forthwith. The audited
statements shall be delivered to the Optionor who shall have sixty (60)
days after receipt of such statements to question in writing their accuracy
and, failing such question, the statements shall be deemed correct.
5. The Optionor or his representative duly appointed in writing shall have the
right at all reasonable times, upon written request, to inspect such books
and financial records of the Optionee as are relevant to the determination
of Net Smelter Returns and at his own expense, to make copies thereof.
