North Fork LLC / Kisa Gold Mining, Inc. – Master Earn-In Agreement
North Fork LLC / Kisa Gold Mining, Inc.
Master Earn-In
Agreement
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North Fork LLC / Kisa Gold Mining, Inc. – Master Earn-In Agreement
Table of Contents
I. Definitions.
1
a. “Affiliate”
1
b. “Agreement”
1
c. “Area of Interest” ..
2
d. “Bankable Feasible Study”
2
e. “Claims”
2
f. “Effective Date”
2
g. “Exploration Expense”
2
h. “Force Majeure”
3
i. “Mineral Products”
3
j. “Optionor”
3
k. “Optionee”
3
l. “Project”
3
m. “Purchase Price”
3
n. “Purpose of this Agreement”
3
II. Representations.
4
III. Indemnification.
6
IV. Grant.
7
V. Option to Acquire Interest in Project.
8
VI. Additional Covenants.
10
VII. Exploration Expense.
11
VIII. Termination by Optionee.
11
IX. Default; Termination by Optionor.
13
X. Operations.
14
XI. Joint Venture
15
XII. Maintenance of Claims.
15
XIII. Force Majeure; Delay
16
XIV. Notices.
16
XV. Assignment.
18
XVI. Confidentiality.
18
XVII. Miscellaneous.
18
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North Fork LLC / Kisa Gold Mining, Inc. – Master Earn-In Agreement
List of Exhibits
A. List of Claims and Map
B. Kisa Gold Mining, Inc. Form of Deed
C. North Fork LLC Form of Deed
D. Form of Joint Venture Agreement
E. Memorandum of Agreement
A2Kb Master Earn-In Agreement
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North Fork LLC / Kisa Gold Mining, Inc. – Master Earn-In Agreement
MASTER EARN-IN AGREEMENT
This master earn-in agreement (“Agreement”) dated and effective this ____ day of _____________ 2011 (the “Effective Date”) by and between;Kisa Gold Mining, Inc. (“Kisa”),an Alaska corporation having its principal place of business at 724 East Metler Lane, Spokane Valley, Washington 99216 (“Optionor”) andNorth Fork LLC,an Alaska limited liability company, having its principal place of business at PO Box 284, West Perth, WA 6872 Australia (“Optionee”)
WITNESSETH:
WHEREAS,Kisais the record owner of several blocks ofClaims that are the subject of thisAgreement; and
WHEREAS,Optionee desires to explore each of these blocks ofClaims for the purpose of developing one or more mines thereon; and
WHEREAS, the Parties agree that, except as specified in Exhibit A, such newProjects as may be discovered by either Party within theArea of Interest may become subject to this Agreement; and
WHEREAS, eachProject provided for in thisAgreement may evolve separately and become the subject of separate agreements from time-to-time;
NOW THEREFORE, in consideration of these premises and the mutual promises hereinafter set forth and Twenty Thousand Dollars ($20,000.00) in hand paid, receipt of which is hereby acknowledged byKisa, the Parties agree as follows:
I. Definitions.Unless context requires otherwise, the following definitions shall apply to thisAgreement:
a.“Affiliate” shall mean any person, partnership, joint venture, corporation or other form of enterprise that directly or indirectly controls, or is controlled by, or is under common control with, a Party to thisAgreement. For the purposes of this paragraph, “control” shall mean possession, directly or indirectly, of the power to direct or cause direction of management and policies through ownership of voting securities, contract, voting trust or otherwise;
b.“Agreement”shall mean this master earn-in agreement;
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c.“Area of Interest” shall mean the area within thirty (30) kilometers of the outer periphery of theClaims as they are constituted on theEffective Date;provided, however, theArea of Interest shall specifically exclude any claims held byNorth Forkon theEffective Date and the “BP Claims 1 - 70” as described in Exhibit A attached hereto and incorporated herein and shall further exclude an area within one section in any direction of the BP Claims as constituted on theEffective Date;
d.“Bankable Feasible Study” shall mean a report, which may be prepared either internally or by an independent third party, to ascertain whether a deposit or deposits of ores on theClaims canprofitably be extracted, treatedand sold in circumstances that would providereasonable long term returnsto the Parties, and shall include, without limiting the generality of the foregoing, such other information in such form and level of detail as may be appropriate and necessary to allow a bank or other lending institution familiar with the mining industry to make a decision as to whether to loan funds for such operations.
e. “Claims”shall mean those State of Alaska mining locations identified in Exhibit A, attached hereto and incorporated herein by reference;
f.“Effective Date” shall mean the date set forth on the preamble to thisAgreement;
g.“Exploration Expense”shall mean expenditures made from and after theEffective Date, in connection with the good faith evaluation, exploration or development of theClaims, whether conducted on or off theClaims, including:
i. Maintaining theClaims in good standing with all governmental agencies, paying fees, wages, salaries and traveling expenses of all persons engaged in exploration thereon and all insurance costs relating to theClaims;
ii. Acquisition of additional rights or interests in theClaims;
iii. Searching title and curing title defects, including the purchase of conflicting rights;
iv. Discharging any finder’s fee that may be due or owning as the result of the parties entering into thisAgreement;
v. Acquisition of public and private permits and authorizations required for operations on theClaims, including all costs to acquire or make bonds and deposits to secure or maintain such permits or authorizations and any bond or deposit amount forfeited under circumstances beyond the control ofOptionee; and
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vi. Making payments toOptionors in lieu ofExploration Expenditures pursuant to thisAgreement. After making any payments required by law to maintain theClaims in good standing,Optionee may tender toOptionor a cash payment equal to the unfulfilledExploration Expenditures in full satisfaction thereof if necessaryOptionee to maintain thisAgreement in effect.
h. “Force Majeure” shall mean any cause beyondOptionee’s reasonable control, whether or not foreseeable, including law, regulation, action or inaction of government; inability to obtain in a timely manner and on terms reasonably acceptable toOptionee any public or private license, permit or authorization which may be required for compliance with thisAgreementor operations in connection with theClaims, including removal and disposal of waters, wastes and tailings and reclamation; fire; explosion; inclement weather (by which is meant unusual weather conditions for the area); earthquake; flood; civil commotion; labor dispute; inability to obtain workmen or material; delay in transportation; and acts of God;
i.“Mineral Products”shall mean all locatable mineral substances occurring naturally on or otherwise derived from theClaims;
j.“Optionor” shall mean Kisa Gold Mining, Inc., an Alaska corporation which is wholly-owned by Gold Crest Mines, Inc., a Nevada corporation;
k.“Optionee” shall meanNorth Fork LLC, an Alaska limited liability company;
l.“Project” shall mean an operation undertaken byOptionee on any of the several blocks ofClaims that are the subject of thisAgreement;
m.“Purchase Price”shall mean the amount specified in the Preamble to thisAgreement;
n. “Purpose of this Agreement” shall be to grantOptioneethe rightto enter onto theClaims, to explore the same and, if warranted, to mineMineral Productsthereon as hereinafter provided;
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II. Representations.
a. Optionee hereto represents toOptionor that:
i. It is a limited liability company duly organized and in good standing in the State of Alaska;
ii. It is qualified to do business in the State of Alaska;
iii. All actions required to authorize it to enter into and perform thisAgreement have been properly taken;
iv. It is not and will not be, after the giving of notice and passage of time, in breach or violation of any other agreement or obligation by entering into or performing thisAgreement or any transaction contemplated by it;
v. ThisAgreement has been duly executed and delivered by it; and
vi. ThisAgreement is valid and binding upon it in accordance with its terms.
b. Optionorjointly and severally represents toOptionee that as of theEffective Date of thisAgreement
i.Kisa, is a corporation duly organized under the laws of the State of Alaska and wholly-owned by Gold Crest Mines, Inc., a corporation duly organized and in good standing under the laws of the State of Nevada ;
ii.Kisais qualified to do business in the State of Alaska;
iii.Kisahas full power and authority to carry on his business and to enter into thisAgreement and any agreement or instrument referred to or contemplated by thisAgreement;
iv. Neither the execution and delivery of thisAgreement nor any of the agreements referred to herein or contemplated hereby, nor the consummation of the transactions hereby contemplated will conflict with, result in the breach of or accelerate the performance required by any agreement to which any of theOptionors is a party or by anOptionor is bound; and
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v. The execution and delivery of thisAgreement and the agreements contemplated hereby will not violate or result in the breach of the laws of any jurisdiction applicable or pertaining thereto.
vi. NeitherKisanor any of its officers or directors have any knowledge of any toxic or hazardous substances on, in or under theClaims;
vii. NeitherKisanor any of its officers or directors have any notice or knowledge of any release or discharge of any toxic or hazardous substance on, in, under, or from theClaims at any time or times;
viii. NeitherKisanor any of its officers or directors have any notice or knowledge of any investigation or proceeding by any federal, state or local government or agency thereof that might lead to listing some or all of theClaims under the Comprehensive Environmental Response and Liability Act of 1980, as amended, or any state or local law or regulation dealing with the control of toxic or hazardous substances, materials or wastes;
ix. NeitherKisanor any of its officers or directors have any knowledge of any conditions existing on or in respect of theClaims which could give rise to a remediation order or otherwise subject either Party to liability for cleanup or remediation of the environment or for damage to natural resources;
x.Kisahas provided toOptionee all information in order that theOptionee could effectively conduct and complete its due diligence and
xi. All ofKisa’s activities on or in relation to theClaims have been carried out in compliance with all applicable laws, regulations and permits, including those intended to protect the environment.
c. Optionor further represents and warrants that as of theEffective Date:
i. Except as set forth inExhibit A, Kisais in exclusive possession of, and are the recorded and beneficial owners of, an undivided 100% interest in and has good and marketable title to theClaims and all rights to allMineral Productsthereon or therein, free and clear of all mortgages, liens, charges, pledges, security interests, prior claims or adverse claimswhatsoever; that they has not granted or assigned any interest in theClaims; theClaims have been properly located and monumented; location and any required validation work has been properly performed; location notices and certificates have been properly and timely recorded or filed;
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all filings required to maintain theClaims in good standing, including evidence of location and assessment work, or the equivalent thereof, under applicable law have been properly made; all assessment work required to hold theClaims has been properly performed (or deferred or excused) through the assessment year ending September 1, 2010; and all required affidavits of assessment work have been properly and timely filed;
ii. TheClaims are not subject to any royalties, overriding royalties, production payments, or other payments out of production other than statutory royalties payable to the State of Alaska;
iii. TheClaimsare not subject to any finder’s fee or any similar obligation andOptionorcovenants to discharge any such finder’s fee immediately if claimed;
iv. All rentals, royalties and other payments to the State of Alaska or to any other entity that are required to be paid to hold theClaims in good standing through August 31, 2011, have been paid in a timely manner and any documents that are required to evidence the foregoing have been properly and timely recorded or filed in the appropriate offices;
d.A breach of any one or more of the representations and warranties in thisAgreement may be waived in writing by the Party in whose favor they are given in whole or in part at any time without prejudice to that Party’s rights in respect of any other breach of the same or any other representation or warranty.
e.The representations set forth in this Section II shall survive the termination of thisAgreement.
III. Indemnification.
a.Notwithstanding any other provision of thisAgreement,Optionee shall have no liability or obligation of any kind to anyOptionor or to any third party for the reclamation or remediation of any environmental or other condition on or relating to theClaims arising from any exploration, mining activities or other activity or use of theClaims prior to theEffective Date.Optionor agrees to defend, indemnify and hold harmlessOptionee, its directors, officers, employees and agents from any cost, liability, loss, damage, claim, demand, suit, proceeding, expense or contribution, including attorneys’ fees, arising from or related to any such condition or the reclamation or remediation thereof arising from or relating to activities conducted prior to theEffective Date.
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b. Optionee shall assume all risk of loss, death, or injury to property or person, which may arise out of or in connection with any accident that may occur on theClaims after theEffective Date.Optionee shall indemnify, defend and save harmlessOptionor, its employees and agents
i. from all claims, demands, suits, proceedings, judgments, costs, and expenses on account of any loss or injury which may occur on theClaimscaused byOptionee after theEffective Date, except to the extent that such loss or injury was caused by the negligent conduct ofOptionor or their employees, agents, or representatives; and
ii. from any liability arising from requirements, levies or fines of any type by any local, state or federal governmental bodies which are incurred byOptionee as a result ofOptionee’s operations, actions or omissions on theClaims, including any violation byOptionee of applicable provisions of federal, state or local law intended to protect the environment.
c.The representations and warranties hereinbefore set out are conditions on which the Parties have relied in entering into thisAgreement and will survive the acquisition of any interest in theClaims by theOptionee and each Party will indemnify and save the other harmless from all loss, damage, costs, actions and suits arising out of or in connection with any breach or any representation, warranty, covenant, agreement or condition made by the other Party and contained in this Agreement.
IV. Grant.
Optionor hereby grants untoOptionee the exclusive, complete and unrestricted right to enter, occupy, use, prospect, drill, sample, tunnel, evaluate, and control theClaims in accordance with thePurpose of this Agreement, together with the right to explore for, develop, mine (by open pit, strip, underground, solution mining or any other method, including, but without limitation any method hereafter developed), extract, mill, store, process, remove and market from theClaims allMineral Productsand the right to place thereon, construct, use and remove such structures, facilities, equipment, roadways, haulageways and such other improvements asOptionee may deem necessary, useful or convenient in conducting its operations when or where inOptionee’s sole judgment it is reasonably useful or necessary to do so and to use and consume, for stockpiles, waste dumps, rock or ore in connection with exploration, evaluation and development, so much of theClaims as may be reasonably necessary, useful or convenient for the full enjoyment of the rights herein granted.
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V. Option to Acquire Interest in Project.
a. Optionor hereby grants an exclusive option toOptioneeto acquire a fifty-one percent (51%) interest in one or moreProjects, free and clear of any liens, charges, debts, royalties or other encumbrances of any kind whatsoever by making an aggregate of Three Million Dollars ($3,000,000.00) ofExploration Expenditures on or for the benefit ofClaimson or before October 31, 2013.
i. All decisions concerning the allocation ofExploration Expenditures shall be in the sole discretion ofOptionee;provided, however, nothing contained herein shall relieveOptionee from the obligation to keep theClaims in good standing until released as provided in thisAgreement.
ii. Upon theOptionee incurring theExploration Expenditures in accordance with this Section V(a),Optionorshall convey toOptionee(or such other, related party asOptioneeshall designate)a fifty-one percent (51%) interest in the title to such of the ProjectsorClaims asOptionee shall specify in writing,by executing, acknowledging, and delivering to Optionee a Special Warranty Deed in the form ofExhibit B attached hereto together with any other documents, deeds, instruments or declarations required to fully vest such interest in theClaims inOptionee.
iii.Optionee shall thereafter have the right in its sole discretion to proceed with furtherExploration Expenditures in accordance with Section V(b) or to proceed with a 51/49 Joint Venture withOptionor, as hereinafter provided.
iv. IfOptionee elects to withdraw from Joint Venture in one or more of theProjectsorClaims prior to earning a fifty-one (51%) interest in thatProjectorClaim, it will have no further interest in that specificProjectorClaim.
b. Optionor hereby grants an exclusive option toOptioneeto acquire an additional twenty-four percent (24%) interest in one or moreProjects, free and clear of any liens, charges, debts, royalties or other encumbrances of any kind whatsoever by expending an additional Three Million Dollars ($3,000,000.00) in the aggregate ofExploration Expenditures on or for the benefit ofClaims on or before October 31, 2016.
i. Upon theOptionee incurring theExploration Expenditures in accordance with this Section V(b),Optionorshall convey toOptionee(or such other,
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related party asOptioneeshall designate)an additional twenty-four percent (24%) interest in such of the Projects orClaims as Optionee shall designate in writing,by executing, acknowledging, and delivering to Optionee a Special Warranty Deed in the form ofExhibit B attached hereto together with any other documents, deeds, instruments or declarations required to fully vest such title and interest inOptionee.
ii.Optionee shall thereafter have the right in its sole discretion to prepare aBankable Feasibility Studyin accordance with this Section V(c) or to proceed with a 75/25 Joint Venture withOptionor, as hereinafter provided.
c. Optionor hereby further grants an exclusive option toOptioneeto acquire an additional fifteen percent (15%) interest in one or moreProjects or Claims, free and clear of any liens, charges, debts, royalties or other encumbrances of any kind whatsoever by the completion of aBankable Feasible Study.
i. Upon theOptionee completing aBankable Feasibility Study in accordance with this Section V(c),Optionorshall convey toOptionee(or such other, related party asOptioneeshall designate)an additional fifteen percent (15%) interest in theClaims,by executing, acknowledging, and delivering to Optionee a Special Warranty Deed in the form ofExhibit B attached hereto together with any other documents, deeds, instruments or declarations required to fully vest such interest in theClaims inOptionee.
d. Optioneemay,in its sole discretion, elect to not go forward with the preparation of aBankable Feasibility Study with regard to one or more specificProjects, in which case the Joint Venture with regard to thatProjectshall remain at the 75/25 ownership ratio.
e. Optionor’sinterest under this Section V shall be carried byOptioneeuntil, in accordance with this paragraph V(e) a Joint Venture established under this Agreement, at any time after the preparation of a Bankable Feasibility Study, makes aDecision to Mine one or moreProjects. Not later than thirty (30) days after being notified of theDecision to Mine,Optionorshall elect, in writing, whether to have its interests in suchProject be converted from a ten percent (10%) carried interest to a ten percent (10%) participating interest or to a two percent (2%) Net Smelter Returns Royalty.
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VI. Additional Covenants.
a. By Optionor. As an integral part of the consideration for thisAgreement,Optionorfurther covenants:
i. not do any act or thing which would or might in any way adversely affect the rights ofOptionee hereunder;
ii. to cooperate with and assistOptioneein obtaining approval of a such plans of operations as may be required for operations to be conducted on theClaimsunder thisAgreement;
iii. to cooperate with and assistOptionee, atOptionee’s cost,in obtaining all required federal, state and local permits as may be required for operations to be conducted on theClaimsunder thisAgreement;
iv. to deliver to Optionee a copy of each technical, engineering or geological report relating to theClaims or any of them; and
v. to provide promptly toOptionee any and all notices and correspondence received by the Optionor from government agencies in respect to the Claims
vi. to cooperate fully withOptionee in obtaining such assurances or other accommodations from third parties to confirm the validity of the title to be conveyed byOptionor toOptionee under thisAgreement asOptionee may from time-to-time request.
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VII. Exploration Expense.
a.Notwithstanding anything else contained in this Agreement, at all time during the term of thisAgreement, Optionee shall do all things and take all steps necessary to keep theClaims in good standing with the State of Alaska.
b.Unless otherwise agreed, the obligation to pay rental to the State of Alaska with respect to theClaims for any rental year commencing on theEffective Dateof this Agreement shall accrue hereunder on the August 1 immediately preceding said September 1, if this Agreement remains in effect on said August 1 but not otherwise.
VIII. Termination by Optionee.
a. Optionee may elect at any time to terminate thisAgreement and its performance hereunder it by conveying all right, title, and interest it may have in theClaims toOptionor.
b.The document by whichOptionee conveys its interests in theClaims toOptionors shall be substantially in the form of the deed attached to thisAgreement asExhibit D, and shall provide for title, free and clear of any liens or other encumbrances created or arising as a result ofOptionee’s possession and ownership of an interest in theClaims.
c.Except for those obligations which by their terms survive thisAgreement and those obligations the due date or incurrence of which precedes the actual date the said deed is delivered toOptionor, upon conveyance ofOptionee’s interest in theClaims toOptionors pursuant to this Section,Optionee’s obligations under thisAgreement shall terminate.
d. Upon conveyance of all ofOptionee’s interest in theClaims toOptionor pursuant to this Section,Optionee
i. shall have the right, at its own risk and expense, to remove from theClaims, at any time within one year, all fixtures, personal property and improvements whichOptionee has erected or placed thereon, and
ii. shall have the obligation to remove within said year, at its own risk and expense, all fixtures, personal property and improvements whichOptionee has erected or placed thereon that are described in a notice delivered byOptionor toOptionee within 90 days afterOptionor’sreceipt of the conveyance pursuant to this Section;provided, however, that
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any such fixtures, personal property and improvements that were not required to be removed within said year and which were not removed shall become and remainOptionor’s sole property.
e. Optionee, at its own risk and expense, may post watchmen on theClaims during such one year period;provided, however, that nothing contained in thisAgreement shall be construed to preventOptionorfrom assuming immediate possession and control of theClaims for the purpose of conducting mineral exploration and development activities thereon or conveying theClaims to third parties so that they may conduct such activities, subject toOptionee’s removal rights hereunder, as limited as provided below.
f. Optionee shall make such reasonable accommodations withOptionorconcerning the location and relocation of personal property left on theClaims, but not abandoned byOptionee, so as not to interfere with the use of theClaims byOptionor as set forth in this Section;provided, however, that ifOptionee fails or refuses to relocate any such items within a reasonable time after notice to do so has been received byOptionee, such personal property may be relocated byOptionor atOptionee’s expense.
g.Upon conveyance ofOptionee’s interest in theClaims toOptionor as herein provided, all permanent structures on theClaims used or constructed, and abandoned or not removed byOptionee, will be left in a neat, clean, and safe condition and shall become the sole property ofOptionor.
h.Prior to such conveyance,Optionee will close all openings and shafts that it has constructed or used and fence off the same unless otherwise agreed in writing between the parties. Failure ofOptionee to fulfill this obligation by the date of conveyance shall constitute authorization forOptionor to do so atOptionee’s expense.
i. Optionee will comply with all laws concerning reclamation and, to the maximum extent practicable, restore theClaims to their original condition; subject to reasonable changes made to theClaims as a consequence the activities undertaken pursuant to thisAgreement.
j.Following conveyance of theClaims toOptionor,Optionee shall promptly deliver toOptionor a copy of all engineering, geologic and factual data obtained from theClaims including assay results, drill hole logs and drill hole location maps whichOptionee has obtained or prepared as a result of exploration on theClaims and which has not previously been delivered toOptionor.Optionee
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makes no representation or warranty as to the accuracy or utility of such data and shall have no liability of any kind for any use of or reliance thereon byOptionor.
IX. Default; Termination by Optionor.
a.Subject to Section IX(b), in the event of a material default byOptionee under the provisions of thisAgreementother than a default in the obligation to maintain theClaimsin good standing,Optionor shall have the right at any time to give written notice of the default toOptionee.
b. Optionee shall have thirty (30) days after the date such notice is received within which either (i) to commence to cure and thereafter continue with reasonable diligence to cure the alleged default or (ii) to contest the claim.
c.IfOptionee fails to contest the claim or to commence to cure the alleged default within thirty (30) days after receipt of such notice,Optionor may elect to terminate thisAgreement, in which caseOptionee shall promptly convey all of its right, title and interest in theClaims toOptionor.
d.IfOptionee contests the alleged default and is found to be in default, it shall commence to cure the default within thirty (30) days after the decision and thereafter continue with reasonable diligence to cure the default.
e.IfOptionee fails to complete curative action with reasonable diligenceOptionor may terminate thisAgreement, in which caseOptionee shall promptly convey all of its right, title and interest in theClaims toOptionor.
f.Notwithstanding the foregoing, if the alleged default relates toOptionee’sfailure i) to pay money when due, or ii) to maintain theClaims in good standing, and ifOptionorseeks judicial redress in any court of competent jurisdiction, the only question which shall be laid before the court shall be how much money, if any, is dueOptionor. If the court finds thatOptionee is in default and awards a judgment againstOptionee,Optioneeshall make the appropriate disbursal within thirty (30) business days after the date decision becomes final.
g.Recovery of title pursuant to this Section, due toOptionee’s material default and failure to cure such default, shall not be in lieu of any other remedies that might otherwise be available toOptionors.
h. Optionorshereby acknowledge thatOptionee does not have and never shall have any express or implied obligation to explore, develop, or mine theClaims.
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X. Operations.
a. Optionee will perform all acts and do all things consistent with thePurpose of this Agreement including:
i. Conducting all of its operations on theClaims in a sound and minerlike manner;
ii. Maintaining adequate Workers’ Compensation Insurance;
iii. Maintaining adequate public liability insurance;
iv. NamingOptionor as an additional insureds on such liability policies and providingOptionor with proof of such insurance upon request;
v. Obtaining all licenses, permits and bonds required by law for the use of or operations on theClaims; and
vi. Reclaiming theClaims from the effects ofOptionee’s activities to the extent required by applicable law.
b. Optionor and their authorized agents shall, atOptionor’s sole risk and expense, have the right to inspect theClaims and such books and records relating to operations being conducted on theClaims, wherever they may be found, for the purpose of confirming thatOptionee is complying with its obligations under thisAgreement. All suchinspections shall be:
i. made upon reasonable priornotice toOptionee, such notice to be not less than five (5) days;
ii. conducted in a reasonable manner,conforming to such ofOptionee’s rules and regulations as are generally applicable toOptionee’s employees; and
iii. carried out in such a manner as not to interfere withOptionee’s operations.
c. Optionee shall not permit or create a mortgage, lien or other encumbrance upon theClaims prior to the exercise of theOption to Purchase, except thatOptionee shall have the right to encumber its interest under thisAgreement for the purposes of financing mining operations hereunder.
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d. Optionee agrees to post appropriate notices to contractors and materialmen on theClaims advising them of the non-liability ofOptionor for work performed and materials provided to the site.
e.In the event a mortgage, lien, or other encumbrance is attached to theClaims for reasons other than financing the mining operations thereon,Optionee shall promptly cause the removal of same, and upon failure to do so,Optionor may pay the sums legally necessary to discharge said mortgage, lien or encumbrance and recover such sums fromOptionee.
f. Optionee, at its option, may discharge any royalty, tax, mortgage, lien or other encumbrance legally imposed or existing againstOptionor’s interest in theClaims, either in whole or in part and, in such event,Optionee shall be subrogated to such discharged tax, mortgage, lien or other encumbrance with the right to enforce the same against any obligation accruing hereunder toward satisfying same.
XI. Joint Venture
The Claims that are the subject of this Agreement consist of several discrete Projects, each of which potentially could host on or more mineable resources. As appropriate, and from time-to-time, the Parties hereto agree to enter into agreements governing the operations on each Project as appropriate. Those agreements will be substantially in the form set forth in Exhibit D. At all times during the Term of this Agreement, Optionee shall be the sole manager of all operations conducted on the Claims and will make all decisions with regard to Exploration Expenditures.
XII. Maintenance of Claims.
a.During the term of thisAgreement,Optionee
i. shall pay such fees and perform such acts and obligations and make such recordings and filings as it has become obligated to pay, perform, or make and that otherwise may be required to maintain theClaims in good standing in compliance with all applicable laws and regulations of the State of Alaska; and
ii. shall provide toOptionor evidence of satisfaction of the same not later than (A) August 1 of each assessment work year (in the case of any accrued obligation to perform adequate assessment work during said assessment work year), (B) not later than November 1 (in the case of any accrued obligation to pay rental due under AS38.05.211, and (C) 30 days
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prior to the date any other such payment, act, obligation, recording, or filing is required to be completed.
b.IfOptionee fails to comply timely in any respect with Section XI(a) above,Optionors shall have the right
i. to giveOptionee written notice of the alleged failure; and, thereafter,
ii. to enter on theClaims (if the failure is the failure to perform sufficient assessment work) and perform the required assessment work, record or file the required documents, or make the required payments, as the case may be, all atOptionee’s expense.
c. Optionee may amend or relocate theClaims and may convert any of theClaims, to a State of Alaska mining lease or leases. All rights so acquired byOptionee shall be part of theClaims for thePurposes of this Agreement. In the event of the termination of thisAgreement,Optionee shall convey all of its right, title and interest so obtained toOptionor.
d. Optionor agrees to cooperate withOptionee and to take such reasonable actions, execute and deliver such reasonable documents, and otherwise provide such reasonable assistance as may be useful or necessary to permitOptionee to comply with the provisions of this Section.
XIII. Force Majeure; Delay.
a.IfOptionee shall be prevented byForce Majeure from timely performance of any obligations under thisAgreement other than the obligation to maintain the Claims in good standing, the failure shall be excused and the period for performance shall be extended for a period equal to the duration of the condition constitutingForce Majeure.
b. Optionee shall promptly giveOptionor notice of commencement and termination ofForce Majeure.Optionee shall use reasonable diligence to removeForce Majeure but shall not be required to institute legal proceedings, settle any labor dispute or challenge the validity of any law, regulation, action or inaction of government.
XIV. Notices.
a.All payments, notices and other communications to either Party shall be in writing and delivered personally; sent by certified or registered prepaid mail, return
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receipt requested; sent by fax; sent by email; sent by courier; or sent by any other means providing for receipt of the communication in written form.
b.Notices delivered personally, sent by certified mail or registered mail, or sent by courier shall be effective on the next business day after the date of actual delivery.
c.Notices sent by fax or sent by email shall be effective on the next business day after the day of transmission, provided that the sending Party has received electronic confirmation of successful transmission.
d.Until a change of address is given in accordance with the provisions of this Section, notices shall be addressed toOptionee andOptionor, respectively:
If toOptionee:
North Fork LLC
North Fork Resources Pty Ltd.
PO Box 284
West Perth, WA 66872
AUSTRALIA
Email: akelly@dorayminerals.com.au
Attention: Allan Kelly, Manager
Phone No: 61 8 9226 0600
with copy to:
J. P. Tangen
Attorney at Law (P.C.)
1600 A Street, Suite 310
Anchorage, AK 99501
USA
Phone No: (907) 222-3985
Email: jpt@jptangen.com
If toOptionors:
Kisa Gold Mining, Inc.
724 East Mettler Lane
Spokane, WA 99216
USA
Attn: Terrence J. Dunne, Secretary
Phone No.: (509) 893-0171
Email: dunneterrencej@qwestoffice.net
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XV. Assignment.
Any party may assign its interest under thisAgreement, in whole or in part, at any time to anAffiliate or to an unrelated, qualified third party;provided, however, that if any such assignment is to anAffiliate the assigning Party shall remain a guarantor of the performance of that Affiliate; andprovided further, that if any such assignment is to a qualified unrelated third party such assignment will not be effective until thirty (30) days after the non-assigning Party had received actual notice of the assignment and, if requested, competent evidence of the assignee’s qualifications. The non-assigning third party may be deemed unqualified by the non-assigning party if it lacks the financial or technical capacity to perform it obligations under thisAgreement, in which case the assigning Party shall remain as a guarantor of the performance of the assignee.
XVI. Confidentiality.
Optionoragrees that all information developed or acquired as a result of activities byOptionee under thisAgreement, including but not limited to information relating to mineral discoveries, ore reserves, mining methods, plans and production schedules and other information, including the terms of thisAgreement, shall be kept strictly confidential and shall not be released or made public withoutOptionee’s express prior written consent during the time that thisAgreement is in effect.
XVII. Miscellaneous.
a.The parties shall execute and record a memorandum of thisAgreement substantially on the form of Exhibit E in order to provide notice of thisAgreement to third parties
b.ThisAgreement will be governed by and construed in accordance with the laws of the State of Alaska.
c.All references to money refer to U. S. Dollars.
d.ThisAgreement contains the entire understanding between the Parties relating to its subject matter and supersedes any prior or contemporaneousAgreements, commitments, representations, writings and discussions relating thereto, whether oral or written, express or implied and may only be amended in writing and signed by each Party.
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e.ThisAgreement shall not be construed to contain any implied consideration, warranties, representations, or covenants, including any implied obligation ofOptionee to explore, mine or otherwise work theClaims, beyond the specific undertakings set forth herein and is not intended to create any partnership between the parties.
f.If any provision of thisAgreement is determined to be unenforceable pursuant to a judicial proceeding, the remainder shall remain in full force and effect.
g.The Parties agree that they will execute such further agreements, conveyances and assurances as the parties may deem necessary to carry out thePurpose of this Agreement.
h.ThisAgreement shall inure to the benefit of and be binding upon the Parties hereto and their respective successors and assigns.
i.Time is of the essence in thisAgreement.
j.The headings and subheadings set forth in thisAgreement are for ease of reference only and are not intended to be used in construing the meaning of the provisions hereof.
k.ThisAgreement may be signed in counterparts and delivered electronically.
EFFECTIVE as of the date initially set forth above.
North Fork LLC,Optionee
By: ______________________________
Allan Kelly, Manager
Kisa Gold Mining, Inc.Optionor
By: _______________________________
Terrence J. Dunne, Secrerary
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