EXHIBIT 10.2
OPTION AGREEMENT
This Option Agreement made and entered into this 20TH day of April
1988, by and between Lisbon Copper Ltd. ("OPTIONOR"), a Utah limited
partnership, whose mailing address is c/o Raymond E. Kunkel, 33 Holiday Haven,
Moab, Utah 84532, and MLP Associates Ltd. ("OPTIONEE"), a Colorado limited
partnership, whose address is 2801 Youngfield St., Suite 221, Golden, Colorado
80401.
WITNESSETH:
I. RECITALS.
I.A. OPTIONOR, as lessor, and OPTIONEE, as lessee, executed
an instrument entitled "NEW MINERALS LEASE" dated the 20th day of April 1988,
wherein OPTIONOR leased to OPTIONEE all of the right, title and interest and
expectancy of OPTIONOR in and to the following (the "LEASED PREMISES"), to-wit:
I.A.1. The right to mine and process the copper
bearing ores down to a depth of 500 feet from the hereinafter named
unpatented lode mining claims situated in San Juan County, State of Utah,
which are more particularly described in the notice of location and amended
notice of location for each claim, a copy of which is recorded in the
RECORDERS OFFICE and the BLM NO. of which is as follows:
Charles E. Carlson
2801 Youngfield #221
BLM NO.
Name of Claim Book Page (UMC)
------------- ---- ---- ------
- -Camel 25 453
(amended) 231 261 129728
- -Cow 25 454
(amended) 231 262 125732
- -Cat 25 454
(amended) 231 262 129729
- -Colt 25 455
(amended) 231 263 129730
- -Cougar 25 455
(amended) 231 263 129731
- -Cub 25 456
(amended) 231 264 129734
- -Coyote 35 456
(amended) 231 264 129733
- -Sentinel 1 47 44
(amended) 231 256 129718
- -Sentinel 2 47 45
(amended) 231 257 129719
- -Sentinel 3 47 45
(amended) 231 257 129720
- -Sentinel 4 47 46
(amended) 231 258 129721
- -Sentinel 5 47 46
(amended) 231 258 129722
- -Sentinel 6 47 47
(amended) 231 259 129723
- -Sentinel 7 47 47
(amended) 231 259 129724
- -Sentinel 8 47 48
(amended) 231 260 129725
- -Sentinel 9 47 48
(amended) 231 260 129726
- -Sentinel 10 47 49
(amended) 231 261 129727
- -Gamma 1 71 490
(amended) 85 499
- -Gamma 2 71 490
(amended) 85 499
- --CD #6 Fraction 509 550
- -Security 3 377 402 140827
- -Security 5 377 403 140607
- -Security 7 377 404 140608
- -Security 9 377 405 140609
2
BLM NO.
Name of Claim Book Page (UMC)
------------- ---- ---- -------
- -Security 11 377 406 140610
- -Security 14 377 407 140611
- -Security 15 377 408 140612
- -Security 16 377 409 140613
- -Security 18 377 410 140614
- -Security 19 377 411 140615
- -Security 20 377 412 140616
- -Security 25 377 413 140617
- -Security 26 377 414 140618
- -Security 27 377 415 140619
- -Security 28 377 416 140620
- -Security 29 377 417 140621
- -Security 30 377 418 140622
- -Security 31 377 419 140623
- -Security 32 377 420 140624
- -Security 33 377 421 140625
- -Security 34 377 422 140626
- -Security 35 377 423 140627
- -Security 36 377 424 140628
- -Security 37 377 425 140629
- -Security 38 377 426 140630
- -Security 39 377 427 140631
- -Security 40 377 428 140632
- -Security 41 377 429 140633
- -Security 42 377 430 140634
- -Security 43 377 431 140635
- -Security 44 377 432 140636
- -Security 45 377 433 140637
- -Security 46 377 434 140638
- -Security 47 377 435 140639
- -Security 48 377 436 140640
- -Security 49 378 341 140641
- -Security 50 378 342 140642
- -Security 51 378 343 140643
- -Security 52 378 344 140644
- -Security 53 378 345 140645
- -Security 54 378 346 140646
- -Security 55 378 347 140647
- -Security 56 378 348 140648
I.A.2. The right to mine and process the ores
bearing copper and some other minerals from the following:
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The hereinafter named unpatented lode mining claims situated in San
Juan County, State of Utah, which are more particularly described in the notice
of location and amended notice of location for each claim which is recorded in
the RECORDER'S OFFICE and the BLM NO. of which is as follows:
BLM NO.
Name of Claim Book Page (UMC)
------------- ---- ---- -------
- -Climax No. 1 R-2 382
(amended) 487 185 129763
- -Climax No. 2 R-2 382
(amended) 487 186 129764
- -Alpha No. 1 63 96
(amended) 169 463
(amended) 270 83 129765
- -Alpha No. 2 63 96
(amended) 169 463
(amended) 270 83 129766
- -Alpha No. 3 63 97
(amended) 169 464
(amended) 270 84 129767
- -Alpha No. 4 63 97
(amended) 169 464
(amended) 270 84 129768
- -Alpha No. 5 63 98
(amended) 169 465
(amended) 270 85 129769
- -Alpha No. 6 63 98
(amended) 169 465
(amended) 270 85 129770
- -Alpha No. 7 63 99
(amended) 169 466
(amended) 270 86 129771
- -Alpha No. 8 63 99
(amended) 169 466
(amended) 270 86 129772
- -G. M. Wallace Fraction
(amended) 487 129 129829
- -CW 1 510 62 129811
4
BLM NO.
Name of Claim Book Page (UMC)
------------- ---- ---- -------
- -CW 2 510 63 129812
- -CW 3 510 64 129813
- -CW 4 510 65 129814
- -CW 5 510 66 129815
- -CW 6 510 67 129816
- -CW 7 510 68 129817
- -CW 8 510 69 129818
- -CW 9 510 70 129819
- -CW 10 510 71 129820
- -CW 11 510 72 129821
- -CW 12 510 73 129822
- -CW 13 510 74 129823
- -CW 14 510 75 129824
- -CW 15 511 596 129825
- -CW 16 511 597 129826
- -CW 19 511 598
(amended) 521 8 129827
- -CW 22 511 599
(amended) 521 9 129828
- -KWR 1 487 130 129789
- -KWR 2 487 131 129790
- -KWR 3 487 132 129791
- -KWR 4 487 133 129792
- -KWR 5 487 134 129793
- -KWR 6 487 135 129794
- -KWR 7 487 136 129795
- -KWR 8 487 137 129796
- -KWR 9 Fraction 501 345 129797
- -KWR 10 501 346 129798
- -KWR Fraction 501 347 129799
- -MIR 11 Fraction 521 469 129802
- -KWR 12 Fraction 501 348 129800
- -KWR 13 Fraction 501 349 129801
- -CWG Fraction 517 275 129786
- -CWG Fraction #1 517 276 129787
- -CWG Fraction #2 517 277 129788
- -CD 1 509 508 129773
- -CD 2 Fraction 509 509 129778
- -CD 3 Fraction 509 510 129779
- -CD 4 Fraction 509 511 129780
- -CD 5 Fraction 509 512 129781
- -CD 6 Fraction 509 550 129737
- -Globe #1 486 16
5
BLM NO.
Name of Claim Book Page (UMC)
------------- ---- ---- -------
(amended) 489 392 129782
- -Globe #2 486 17
(amended) 489 393 129783
- -Globe #9 486 24
(amended) 489 400 129784
- -Globe #10 486 25
(amended) 489 401 129785
I.A.3. The leasehold rights to mine and process ores from
the following described tracts of land situated in San Juan County, State of
Utah, to-wit:
PATTERSON RANCH
TOWNSHIP 31 SOUTH, RANGE 25 EAST, SLM
Section 1: Lots 1, 2, 3 and 4
I.A.4. The stockpile of mixed oxide-sulphide copper ore
estimated to contain 35,000 to 40,000 tons containing approximately 2% copper
which is situated on the following described tract of land situated in San Juan
County, State of Utah, to-wit:
TOWNSHIP 30 SOUTH, RANGE 25 EAST, SLM
Section 36: SE 1/4
I.A.5. The right to mine copper down to a depth of
500 feet on State of Utah Metalliferous Lease Number 20569 covering the
following described tracts of land situated in San Juan County, State of Utah,
to-wit:
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TOWNSHIP 30 SOUTH, RANGE 25 EAST, SLM
Section 36: NW 1/4, E 1/2
as assigned by Joseph F. Costanza and Joyce L. Costanza to Raymond E. Kunkel and
Paul B. Clemons, which assignment has been approved the the State of Utah.
I.A.6. The equipment and machinery described as
follows:
Four Solvent Extraction Tanks
Two 350 kilowatt Rectifiers
Approximately Thirty Concrete Electro-Winning Cells
which are presently stored near the entrance of the Cub uranium mine.
I.A.7. All mining claims and other property acquired
by OPTIONOR and/or OPTIONEE within one mile of any part of the property above
described.
I.A.8. Water and water rights for use upon the above
property.
I.B. Section III.B.26. of the NEW MINERALS LEASE reads as
follows:
LESSOR hereby grants to LESSEE an irrevocable exclusive option to
purchase the property comprising the LEASED PREMISES at the time
the option is exercised, without warranty or representation of
any kind, at any time while this NEW MINERALS LEASE is in full
force and effect, all as set forth in a separate instrument.
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II. OPTION. In consideration of the execution of the NEW MINERALS LEASE by
OPTIONOR and OPTIONEE and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by OPTIONOR and
OPTIONEE, OPTIONOR hereby grants to OPTIONEE, without warranty or
representation of any kind, the irrevocable and exclusive option to purchase
the property comprising the LEASED PREMISES at the time the option is
exercised, at any time while the NEW MINERALS LEASE is in full force and
effect, on the following terms, to-wit:
II.A. The purchase price shall be determined as follows:
II.A.1. Five Hundred Thousand Dollars ($500,000.00) if the
option is exercised within one (1) year from the first sale of commercial
production from the LEASED PREMISES.
II.A.2. $50,000.00 shall be added to the purchase price
specified above for each and every year that elapses subsequent to one (1) year
from the first sale of commercial production from the LEASED PREMISES.
II.A.3. The purchase price shall not be reduced by the
bonus, the monthly minimum advance royalty or by the production royalty paid by
OPTIONEE to OPTIONOR under the NEW MINERALS LEASE.
II.B. The option shall be exercised by OPTIONEE
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paying to OPTIONOR the specified purchase price in cash or certified funds.
II.C. Simultaneous with the exercise of the option, OPTIONOR
shall execute and deliver to OPTIONEE such deeds, assignments and other
instruments, all without warranty or representation, as are necessary to convey
the LEASED PREMISES to OPTIONEE.
WITNESSETH the hands of OPTIONOR and OPTIONEE as of the day and year
first above set forth.
OPTIONOR
LISBON COPPER LTD.
By /s/ Raymond E. Kunkel
-------------------------------------
Raymond E. Kunkel, General Partner
By /s/ Burton F. Kunkel
-------------------------------------
Burton F. Kunkel, General Partner
OPTIONEE
MLP ASSOCIATES, LTD.
By /s/ Charles E. Carlson
-------------------------------------
Charles E. Carlson, General Partner
STATE OF UTAH )
: SS.
County of San Juan )
On this 12th day of April, 1988, personally appeared before me Raymond
E. Kunkel, one of the
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signers of the foregoing instrument, who duly acknowledged to me that he
executed the same on behalf of Lisbon Copper, Ltd., a limited partnership, as
one of the general partners in said limited partnership.
/s/ Doris G. Calvert
-----------------------------------
Notary Public
[SEAL] Residing at Monticello, Utah
-----------------------
My Commission Expires:
March 26, 1989
- ----------------------
STATE OF UTAH )
: SS.
County of Box Elder )
On this 14th day of April, 1988, personally appeared before me Burton
F. Kunkel, one of the signers of the foregoing instrument, who duly acknowledged
to me that he executed the same on behalf of Lisbon Copper Ltd., a limited
partnership, as one of the general partners in said limited partnership.
/s/ Lorin C. Facer
-----------------------------------
Notary Public
Residing at Willard, Utah
-----------------------
[SEAL]
My Commission Expires:
1 June 1991
- ---------------------
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STATE OF COLORADO )
: SS.
County of [Illegible] )
On this 20th day of April, 1988, personally appeared before me Charles
E. Carlson, one of the signers of the foregoing instrument, who duly
acknowledged to me that he executed the same in behalf of MLP Associates, Ltd.,
a Colorado limited partnership, as one of the general partners in said limited
partnership.
/s/ Patricia P. Ortiz
-----------------------------------
Notary Public
Residing at 2801 Youngfield
-----------------------
Golden, CO 80401
[SEAL]
My Commission Expires:
Aug. 16, 1988
- ---------------------
Lisbon.OPT
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