CHAMBERS TOWNSHIP PROPERTY OPTION AGREEMENT
▇▇▇▇▇▇▇▇
TOWNSHIP PROPERTY OPTION AGREEMENT
THIS
AGREEMENT
dated
for reference July 6, 2005.
BETWEEN:
▇▇▇▇▇
▇▇▇▇▇▇▇, ▇.▇.
▇▇▇.
▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇;
("Laronde")
OF
THE
FIRST PART
AND:
MOBRIDGE
EXPLORATIONS, INC,
a body
corporate, duly incorporated under the laws of the State of Nevada and having
its head office at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇;
("Mobridge")
OF
THE
SECOND PART
W
H E R E
A S :
▇. ▇▇▇▇▇▇▇
is the registered and beneficial owner of the one mineral property claim
located
in ▇▇▇▇▇▇▇▇ Township, Sudbury Mining Division, Ontario, which claim is more
particularly described in Schedule "A" attached hereto which forms a material
part hereof (collectively, the "Claim");
▇. ▇▇▇▇▇▇▇
has agreed to grant to Mobridge the sole and exclusive right, privilege and
option to explore the Claim together with the sole and exclusive right,
privilege and option to purchase the Claim upon the terms and conditions
hereinafter set forth;
NOW
THEREFORE THIS AGREEMENT WITNESSETH
that in
consideration of the mutual covenants and provisos herein contained,
THE
PARTIES HERETO AGREE AS FOLLOWS:
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1.
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OPTIONOR’S
REPRESENTATIONS
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| 1.1 |
Laronde
represents and warrants to Mobridge
that:
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(a)
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Laronde
is the registered and beneficial owner of the Claim and holds the
right to
explore and develop the Claim;
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(b)
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Laronde
holds the Claim free and clear of all liens, charges and claims
of others,
and Laronde has a free and unimpeded right of access to the Claim
and has
use of the Claim surface for the herein
purposes;
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(c)
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(d)
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There
are no adverse claims or challenges against or to the Laronde's
ownership
of or title to the Claim nor to the knowledge of Laronde is there
any
basis therefor, and there are no outstanding agreements or options
to
acquire or purchase the Claim or any portion
thereof;
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(e)
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Laronde
has the full right, authority and capacity to enter into this Agreement
without first obtaining the consent of any other person or body
corporate
and the consummation of the transaction herein contemplated will
not
conflict with 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 under the provisions of any indenture, agreement
or other
instrument whatsoever to which Laronde is a party or by which he
is bound
or to which he is subject; and
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(f)
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No
proceedings are pending for, and Laronde is unaware of any basis
for, the
institution of any proceedings which could lead to the placing
of Laronde
in bankruptcy, or in any position similar to
bankruptcy.
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1.2 The
representations and warranties of Laronde set out in paragraph 1.1 above
form a
part of this Agreement and are conditions upon which Mobridge has relied
in
entering into this Agreement and shall survive the acquisition of any interest
in the Claim by Mobridge .
1.3 Laronde
will indemnify Mobridge from all loss, damage, costs, actions and suits arising
out of or in connection with any breach of any representation, warranty,
covenant, agreement or condition made by Laronde and contained in this
Agreement.
1.4 Laronde
acknowledges and agrees that Mobridge has entered into this Agreement relying
on
the warranties and representations and other terms and conditions of this
Agreement and that no information which is now known or which may hereafter
become known to Mobridge shall limit or extinguish the right to indemnity
hereunder, and, in addition to any other remedies it may pursue, Mobridge
may
deduct the amount of any such loss or damage from any amounts payable by
it to
Laronde hereunder.
| 2. |
MOBRIDGE'S
REPRESENTATIONS
|
Mobridge
warrants and represents to Laronde that it is a body corporate, duly
incorporated under the laws of the State of Nevada with full power and absolute
capacity to enter into this Agreement and that the terms of this Agreement
have
been authorized by all necessary corporate acts and deeds in order to give
effect to the terms hereof.
| 3. |
GRANT
OF OPTION
|
2
Laronde
hereby gives and grants to Mobridge the sole and exclusive right and option
to
acquire a l00% undivided right, title and interest in and to the Claim (the
"Option"), subject to a 3% net smelter returns royalty and a 2% gross overriding
royalty on diamond production on the Claims, as described respectively in
Schedules B and C attached to this Agreement, by performing the acts and
deeds
and paying the sums provided for in paragraph 4.
| 4. |
CONSIDERATION
FOR THE GRANT OF OPTION
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| 4.1 |
In
order to keep the Option in respect of the Claim in good standing
and in
force and effect, Mobridge shall be obligated
to:
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Cash
Payment
| (a) |
Pay
to Laronde a total of $40,000
as follows:
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| (i) |
$3,500
immediately upon execution of this agreement by all parties;
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| (ii) |
an
additional $6,500 by July 6, 2006;
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| (iii) |
an
additional $10,000 by July 6, 2007;
and
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| (iv) |
an
additional $20,000 by July 6, 2008.
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Expenditure
Commitments
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(b)
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Incur,
or cause to be incurred, exploration work on the Claims totalling
at least
$145,000 by June 6, 2009, which work shall be conducted by Mobridge
under
the direction of a qualified geologist or project engineer, as
follows:
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(i)
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$6,000
in
expenditures on the Claim by Dec 15, 2005. Mobridge’s completion of these
expenditures is mandatory;
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(ii)
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No
less than a further $14,000
of
expenditures to be incurred on the Claim by July 6, 2006;
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| (iii) |
No
less than a further $25,000 of expenditures to be incurred on the
Claim by
July 6, 2007;
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(iv)
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No
less than a further $40,000 of expenditures to be incurred on the
Claim by
July 6, 2008; and
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(v)
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No
less than a further $60,000 of expenditures to be incurred on the
Claim by
July 6, 2009.
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Assessment
Work
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(c)
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Pay,
or cause to be paid, to Laronde, or on Laronde's behalf, as Mobridge
may
determine, all Claims payments and assessment work required to
keep the
Claim and this Option in good standing during the term of this
Agreement.
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3
4.3 Mobridge
shall deliver all consideration due to the Laronde under paragraph 4.1 directly
in his name.
| 5. |
PERIPHERAL
INTEREST
|
Mobridge
agrees that any other right or interest acquired in any mineral property
claim
group within a two kilometer distance of the boundaries of the Claim will
form
part of the Claim for the purpose of this agreement. Any additional mineral
property right or interest that Mobridge may acquire shall be included under
the
provisions of paragraph 6.1.
| 6. |
RIGHT
TO ABANDON PROPERTY
INTERESTS
|
6.1 Should
Mobridge, in its sole discretion, determine that any part of the Claim no
longer
warrants further exploration and development, then Mobridge may abandon such
interest or interests without affecting its rights or obligations under this
Agreement, so long as Mobridge provides Laronde with 30 days notice of its
intention to do so. Upon receipt of such notice, Laronde may request Mobridge
to
retransfer the title to such interest or interests to him, and Mobridge hereby
agrees to do so, and upon expiry of the 30 days, or upon the earlier transfer
thereof, such interests shall cease to be part of the Claim for the purposes
of
this Agreement.
6.2 Any
Claim
that Mobridge returns to Laronde in accordance with paragraph 6.1 shall have
a
minimum of one year of assessment work credited against it at the time of
return.
| 7. |
TERMINATION
OF OPTION
|
7.1 Subject
to paragraph 7.2, the Option shall terminate if Mobridge fails to make the
required cash payments, advance royalty payments or, fails to complete the
required assessment work in accordance with paragraph 4.1 herein within the
time
periods specified therein.
7.2 If
Mobridge shall be in default of any requirement set forth in paragraph 4.1
herein, Laronde shall give written notice to Mobridge specifying the default
and
Mobridge shall not lose any rights granted under this Agreement, unless within
30 days after the giving of notice of default by Laronde, Mobridge has failed
to
take reasonable steps to cure the default by the appropriate
performance.
7.3 If
the
Option is terminated in accordance with paragraphs 7.1 and 7.2 herein, Mobridge
shall have no interest in or to the Claim, and all share issuances, expenditures
and payments made by Mobridge to or on behalf of Laronde under this Agreement
shall be non-refundable by Laronde to Mobridge for which Mobridge shall have
no
recourse. Within 60 days of such termination, Mobridge shall transfer the
Claim
back to Laronde, failing which, Laronde shall have the right to act as attorney
for Mobridge for the purpose of such transfer.
4
| 8. |
ACQUISITION
OF INTERESTS IN THE
PROPERTY
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At
such
time as Mobridge has made the required cash payments and exploration
expenditures in accordance with paragraph 4.1 herein, within the time periods
specified therein, then the Option shall be deemed to have been exercised
by
Mobridge, and Mobridge shall have thereby, without any further act, acquired
an
undivided 100% interest in and to the Claim.
| 9. |
RIGHT
OF ENTRY
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For
so
long as the Option continues in full force and effect, Mobridge, its employees,
agents, permitted assigns and independent contractors shall have the sole
and
exclusive right and option to:
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(a)
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enter
upon the Claim;
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(b)
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have
exclusive and quiet possession of the
Claim;
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(c)
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incur
expenditure;
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(d)
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bring
upon and erect upon the Claim such mining facilities as Mobridge
may
consider advisable; and
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(e)
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remove
from the Claim and sell or otherwise dispose of mineral
products.
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| 10. |
NET
SMELTER RETURNS ROYALTY
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10.1
On
the
date Mobridge commences commercial production on the Claim, Laronde shall
be
entitled to receive and Mobridge shall pay to Laronde 3% of net smelter returns.
"Commercial production" shall not include milling of ores for the purpose
of
testing or milling by a pilot plant or milling during an initial tune-up
period
of a plant.
10.2
Mobridge
shall be under no obligation whatsoever to place the Claim into commercial
production and in the event they are placed into commercial production, Mobridge
shall have the right, at any time, to curtail or suspend such production
as it,
in its absolute discretion, may determine.
10.2
Mobridge
shall be entitled to, but under no obligation whatsoever, purchase up to
2% of
the 3% of net smelter returns held by Laronde at a rate of $500,000 per 0.5%
of
net smelter return.
| 11. |
OPERATOR
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11.1 After
the
execution of this Agreement, Mobridge, or at Mobridge's option, its respective
associate or nominee or such other unrelated entity as it may determine,
will
act as the operator of the Claim under this Agreement. Mobridge, if operator,
may resign as the operator at any time by giving 30 calendar days prior written
notice to Laronde, and within such 30 day period, Mobridge may appoint another
party who covenants to act as the operator of the Claim upon such terms as
Mobridge sees fit.
5
11.2 Notwithstanding
paragraph 11.1, Laronde shall have the right to conduct and supervise all
of
Mobridge’s exploration and development work on the Claim and to be compensated
at competitive industry rates.
| 12. |
POWER
AND AUTHORITY OF THE
OPERATOR
|
12.1 After
the
execution of this Agreement, the Operator shall have full right, power and
authority to do everything necessary or desirable in connection with the
exploration and development of the Claims and to determine the manner of
operation of the Claim as a mine.
12.2 Where
possible, the Operator shall insure that all field work is conducted, and
that
all assay and work program results are verified, by a third party independent
from Mobridge.
| 13. |
REGISTRATION
OF PROPERTY INTERESTS
|
Upon
the
request of Mobridge, Laronde shall assist Mobridge to record this Agreement
with
the appropriate mining recorder and, when required, Laronde shall further
provide Mobridge with such recordable documents as Mobridge and its counsel
shall require to record its due interest in respect of the Claim.
| 14. |
FURTHER
ASSURANCES
|
The
parties hereto agree to do or cause to be done all acts or things necessary
to
implement and carry into effect the provisions and intent of this
Agreement.
| 15. |
FORCE
MAJEURE
|
If
Mobridge is prevented from or delayed in complying with any provisions of
this
Agreement by reasons of strikes, labour disputes, lockouts, labour shortages,
power shortages, fires, wars, acts of God, governmental regulations restricting
normal operations or any other reason or reasons beyond the control of Mobridge,
the time limited for the performance of the various provisions of this Agreement
as set out above shall be extended by a period of time equal in length to
the
period of such prevention and delay, and Mobridge, insofar as is possible,
shall
promptly give written notice to Laronde of the particulars of the reasons
for
any prevention or delay under this section, and shall take all reasonable
steps
to remove the cause of such prevention or delay and shall give written notice
to
Laronde as soon as such cause ceases to exist.
| 16. |
CONFIDENTIAL
INFORMATION
|
No
information furnished by Mobridge to Laronde hereunder in respect of the
activities carried out on the Claim by Laronde, or related to the sale of
mineral products derived from the Claim, shall be published by Laronde without
the prior written consent of Mobridge, but such consent in respect of the
reporting of factual data shall not be unreasonably withheld. Laronde, shall
be
entitled to copies of all exploration work and development data that Mobridge
may acquire in conducting work on the Claim, in written and electronic format,
to be provided as the data is generated
6
| 17. |
ENTIRE
AGREEMENT
|
This
Agreement constitutes the entire agreement to date between the parties hereto
and supersedes every previous agreement, communication, expectation,
negotiation, representation or understanding, whether oral or written, express
or implied, statutory or otherwise, between the parties hereto with respect
to
the subject matter of this Agreement.
| 18. |
NOTICE
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18.1
Any
notice required to be given under this Agreement shall be deemed to be well
and
sufficiently given if delivered, or if mailed by registered mail, in the
case of
Laronde addressed to him as follows:
▇▇▇▇▇
▇▇▇▇▇▇▇
▇.▇.
▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
▇▇▇
▇▇▇
and
in
the case of Mobridge addressed as follows:
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
▇▇▇
▇▇▇
Attention:
Gurmunder Manhass, President
and
any
notice given as aforesaid shall be deemed to have been given, if delivered,
when
delivered, or if mailed by registered mail, on the fourth business day after
the
date of mailing thereof.
18.2
Either
party hereto may from time to time by notice in writing change its address
for
the purpose of this section.
| 19. |
OPTION
ONLY
|
Until
the
Option is exercised, this is an option only and except as specifically provided
otherwise, nothing herein contained shall be construed as obligating Mobridge
to
do any acts or make any payments hereunder and any acts or payments made
hereunder shall not be construed as obligating Mobridge to do any further
acts
or make any further payments.
| 20. |
RELATIONSHIP
OF PARTIES
|
Nothing
contained in this Agreement shall, except to the extent specifically authorized
hereunder, be deemed to constitute either party hereto a partner, agent or
legal
representative of the other party.
7
| 21. |
TIME
OF ESSENCE
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Time
shall be of the essence of this Agreement.
| 22. |
TITLES
|
The
titles to the respective sections hereof shall not be deemed a part of this
Agreement but shall be regarded as having been used for convenience
only.
| 23. |
CURRENCY
|
All
funds
referred to under the terms of this Agreement shall be funds designated in
the
lawful currency of the United Stares of America.
| 24. |
SEVERABILITY
|
In
the
event that any of the paragraphs contained in this Agreement, or any portion
of
thereof, is unenforceable or is declared invalid for any reason whatsoever,
such
unenforceability or invalidity shall not affect the enforceability or validity
of the remaining terms or portions thereof contained in this Agreement and
such
unenforceable or invalid paragraph, or portion thereof, shall be severable
from
the remainder of the Agreement.
| 25. |
APPLICABLE
LAW
|
The
situs
of the Agreement is Marathon, Ontario, and for all purposes this Agreement
will
be governed exclusively by and construed and enforced in accordance with
the
laws prevailing in the Province of Ontario.
| 26. |
ENUREMENT
|
This
Agreement shall enure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns.
8
IN
WITNESS WHEREOF
this
Agreement has been executed as of the day and year first above
written.
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per:
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|
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________________________________________
|
________________________________________
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|
▇▇▇▇▇
▇▇▇▇▇▇▇
|
Director
|
9
SCHEDULE
"A"
TO
THAT CERTAIN AGREEMENT MADE AS OF JULY 6, 2005 BETWEEN
▇▇▇▇▇
▇▇▇▇▇▇▇ AND MOBRIDGE EXPLORATIONS, INC.
The
Chamber Township claim block consists of a total of 15 claim units located
in
the Sudbury Mining Division, Canada with the following record number and
area:
|
Township
|
Recording
Date
|
Record
No.
|
Acreage
|
|
▇▇▇▇▇▇▇▇
|
December
19, 2003
|
3016019
|
600
|
10
SCHEDULE
“B”
TO
THAT CERTAIN AGREEMENT MADE AS OF JULY 6, 2005 BETWEEN
▇▇▇▇▇
▇▇▇▇▇▇▇ AND MOBRIDGE EXPLORATIONS, INC.
DEFINITION
OF GROSS OVERRIDING ROYALTY (“▇▇▇▇”)
(All
capitalized terms used herein shall have the definitions contained in the
Agreement, unless otherwise specified.)
Pursuant
to the Agreement to which this Appendix is attached, Laronde is entitled
to a
royalty (the “▇▇▇▇”) equal to 2% of the Average Appraised Value (as hereinafter
defined) of all gem and industrial diamonds recovered, sorted and graded
from
the Claims (the “Diamonds”), free and clear of all costs of development and
operations.
“Average
Appraised Value”
means
the average of the valuations in Canadian dollars of the Diamonds determined
by
two independent graders, one appointed by Mobridge and one appointed by Laronde.
Such independent graders shall be duly qualified and accredited, and shall
sort,
grade and value the Diamonds in accordance with industry standards, having
regard to, but without limiting the generality of the foregoing, the commercial
demand for the Diamonds. Each independent valuator shall value each particular
classification of the Diamonds in accordance with the industry pricebooks,
standards and formulas. The parties acknowledge that the intention is that
the
▇▇▇▇ is to be paid to Laronde on this basis, regardless of the price or proceeds
actually received by Mobridge for or in connection with the Diamonds or the
manner in which a sale of the Diamonds to a third party is made, and without
deduction.
Mobridge
will calculate and pay the ▇▇▇▇ to Laronde within 30 days of the end of each
calendar quarter, based on all Diamonds from the Property which were graded
in
such calendar quarter.
Laronde
shall not be entitled to participate in the profits or be obligated to share
in
any losses generated by the Purchaser’s actual marketing or sales
practices.
Laronde
shall also at his election have the right to take their ▇▇▇▇ in
kind.
11
SCHEDULE
“C”
TO
THAT CERTAIN AGREEMENT MADE AS OF JULY 6, 2005 BETWEEN
▇▇▇▇▇
▇▇▇▇▇▇▇ AND MOBRIDGE EXPLORATIONS, INC.
NET
SMELTER RETURNS
1. In
the
Agreement, “Net
Smelter Returns”
means
the net amount of money received by Mobridge for its own account from the
sale
of ore, or ore concentrates or any other products from the Claim to a smelter
or
other ore buyer after deduction of smelter and /or refining charges, ore
treatment charges, penalties and any and all charges made by the purchaser
of
ore or concentrates, less any and all transportation costs which may be incurred
in connection with the transportation of ore or concentrates.
2. Payment
of Net Smelter Returns by Mobridge to Laronde shall be made quarterly within
45
days after the end of each fiscal quarter of Mobridge and shall be accompanied
by unaudited financial statements pertaining to the operations carried out
by
Mobridge on the Claim. Within 120 days after the end of each fiscal year
of
Mobridge in which Net Smelter Returns are payable to Laronde, the records
relating to the calculation of Net Smelter Returns for such year shall be
audited and any resulting adjustments in the payment of Net Smelter Returns
payable to Laronde shall be made forthwith. A copy of the said audit shall
be
delivered to Laronde within 30 days of the end of such 120-day
period.
3. Each
annual audit shall be final and not subject to adjustment unless Laronde
delivers to Mobridge written exceptions in reasonable detail within one month
after Laronde receives the report. Laronde, or his representative duly
authorized in writing, at his expense, shall have the right to audit the
books
and records of Mobridge related to Net Smelter Returns to determine the accuracy
of the report, but shall not have access to any other books and records of
Mobridge. The audit shall be conducted by a chartered or certified public
accountant of recognized standing. Mobridge shall have the right to condition
access to its books and records on execution of a written agreement by the
auditor that all information will be held in confidence and used solely for
purposes of audit and resolution of any disputes related to the report. A
copy
of Laronde’s report shall be delivered to Mobridge and the amount which should
have been paid according to Laronde’s report shall be paid forthwith. In the
event that the said discrepancy is to the detriment of Laronde and exceeds
5% of
the amount actually paid by Mobridge, then Mobridge shall pay the entire
cost of
the audit.
4. In
the
event smelting or refining are carried out in facilities owned or controlled,
in
whole or in part, by Mobridge, charges, costs and penalties with respect
to such
operations, excluding transportation, shall mean reasonable charges, costs
and
penalties for such operations but not in excess of the amounts that Mobridge
would have incurred if such operations were carried out at facilities not
owned
or controlled by Mobridge then offering comparable custom services.
5. Laronde
shall at his election have the right to take their Net Smelter Return as
it may
pertain to precious metals defined as gold and platinum group elements in
kind.
12