Attached hereto is an English translation of the original Spanish
version of the purchase option contract between Mineria Tecnica Consultores
Asociados and Litoral Mining Cooperative Ltd. regarding the Animas concession,
dated August 17, 1995. The Company employed translators to translate the above
referenced agreement and based on this the undersigned believes that the
attached is a fair and accurate English translation of the above referenced
agreement.
/s/ Keith R. Hulley
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Keith R. Hulley
Director
Apex Silver Mines Limited
Date: August 28, 1997
Exhibit 10.17
Animas Contract
Witness No. 173 of the inscription of option to buy and irrevocable promise to
sell of the mining concessions "Animas" and "Sucesivas Animas" located in San
Cristobal canton of the province of Nor Lipez of the department of Potosi,
signed between Cooperative Mineria Litoral Ltd. and the company Mineria Tecnica
Consultores Asociados S.A. MINTEC S.A.
In the City of La Paz at 5:30 pm August 17, 1995, before me lawyer Maria Esther
Vallejos H., Special Notary of Mines and Petroleum and witnesses named at the
end who signed. There were present Cooperative Mineral Litoral Ltd. represented
by Messrs. Pedro Calcina Quispe, Epifanio Calcina Calcina and Hillarton Calcina
Quispe for the one part, and for the other Empresa Mineria Tecnica Consultores
Asociados S.A. MINTEC S.A. represented by Ing. Jaime Rubin de Cells Navarro, all
of age, empowered by law, residents of this city, whom I swear I know and they
said: that they agree to raise to public deed the minute which they have
presented to me accompanied by the legalized Act of Assembly of Members of the
Cooperative Minera Litoral Ltd. of June 4, 1995, witness of power, mining
patents and receipt of bank deposit, whose literal tenor is as follows:
Minute Special Notary of Mines and Petroleum - In the registries of public
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mining deed under your charge, please insert the present option to buy and
irrevocable promise to sell the mining concessions denominated "Animas" and
"Sucesivas Animas", signed under the following clauses:
One, Of the Parties: They are parties to this contract the Cooperative Minera
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Litoral Ltd., with juridical personality duly recognized via Resolution No.
00296 dated November 11, 1963, and represented in this contract by Messrs. Pedro
Calcina Quispe, Epifario Calcina Calcina and Hilarion Calcina Quispe with
special power of attorney sufficient for this act No. 5/1995 officially recorded
before the Notary of Mines in the city of Tupiza, dated July 10, 1995, which
forms part of this deed.
The company Mineria Tecnica Consultores Asociados S.A. MINTEC S.A., which is a
company legally constituted in the country, via public deed No. 4 dated January
11, 1991, given before the Notary of Mines of this city, inscribed in the
Commercial Registry with Administrative Resolution no. 26157 dated November 7,
1991, license No. 7-21907-1, TIN No. 2197049, represented in the contract by its
General Manager Ing. Jaime Rubin de Celis Navarro.
Second, Declaration of Property. Say that the Mining Cooperative "Litoral Ltd."
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declares itself to be the legitimate and sole concession-holder of the mining
concessions denominated "Animas" and "Sucesivas Animas" comprised of 200 and 80
mining claims respectively, for exploitation, on veins, placers and gravels of
lead, silver, zinc and other ores, located in the jurisdiction of San Cristobal
canton, province of Nor Lipez,
department of Potosi, which are found under Executive Title under Law No. 7/1970
dated February 11, 1970 and No. 24/1968 dated August 15, 1968, both duly
inscribed in the Mining Registry and the Registry of Real Property, there being
found all of the documentation which accredits the rights of property in order,
as well as the mining patents paid up to date.
Third, Object of the Contract. It being agreeable to the Interest of the
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Cooperative in a free and voluntary form, in its status of legitimate
concession-holder of the mining concessions "Animas" and "Sucesivas Animas", it
is given in favor of the company Mineria Tecnica Consultores S.A. MINTEC S.A.,
represented by Ing. Jaime Rubin de Cells Navarro, of an exclusive and
irrevocable character, the right of option to purchase the concessions "Animas"
and "Sucesivas Animas" in all of their extension and also their uses, water
rights, customs and easements without any limitation whatsoever, assuming the
obligation to sell the concessions in accordance with the stipulations of this
contract, subject to the unilateral decision of the operator, in conformity with
that disposed by Article 64 of the Civil Code, a right which the optioner shall
exercise in his favor or in favor of the individual or collective person he may
designate.
Fourth, Period. The option to which the present contract refers will have a
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duration of two years counted from the date of official registry of this
document.
Fifth, Authorities of the Optioner. During the time stipulated for the option,
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MINTEC S.A. will have the authority and the exclusive right to purchase the
concessions and the Cooperative [will have] the irrevocable obligation to sell
them, the optioner being able to use this option in his favor, code it or
transfer it in favor of any person, likewise it may do, without any limitation
whatever and during the referred period, studies, reconnaissance, exploration
and exploitation work on the concessions "Animas" and "Sucesivas Animas" being
able to obtain samples in the quantities deemed necessary. All of the works of
exploration shall be done following appropriate norms and techniques for the
purpose. [MINTEC] may also freely enter the concessions without prior
authorization it being sufficient the present contract, [and] may use that
Infrastructure which may be necessary including the camp. All of the works
effected by the optioner shall be at his own risk and expense.
During the life of this contract, the Cooperative may continue its habitual
works, without interfering with those of MINTEC.
Sixth, Price of Option and Form of Payment. The price freely agreed between the
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parties for exercise of the purchase option and subsequent transfer of the
concessions "Animas" and "Sucesivas Animas" is US$ 150,000 (one hundred fifty
thousand american dollars), which shall be paid in the following manner. During
the first six months of the life of this contract, no sum will be paid, MINTEC
being able to realize its work in a most complete way. From the seventh month
of the life of this contract under the twenty-third month inclusive, MINTEC S.A.
will pay the Cooperative the sum of US$ 2,000 (two thousand american dollars)
monthly, at the end of each month.
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If MINTEC S.A. decides to exercise its right of option to purchase before the
two years [are up], the monthly payments are suspended and the balance of total
price will be paid. If MINTEC S.A. acquires the concessions "Animas" and
"Sucesivas Animas", 50% of the monthly payments until that time will be
considered as payment counted toward the total price and the other 50% will
benefit the Cooperative.
Seventh. Obligations of the Seller. During the period of the option, the
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Cooperative may not sell the concessions to third persons, nor may it lien them
or constitute on them any real or personal right, nor give any class of rights,
which in any way could affect that conferred on the optioner, under penalty of
nullity of whatever contract given in contravention of this clause and without
prejudice to payment of damages which may be occasioned.
The Cooperative is also obliged to maintain current its right on the concessions
"Animas" and "Sucesivas Animas", and when necessary defend any suit which may be
presented against it. The patents during the life of the contract shall be paid
by MINTEC.
Eighth. Execution of the Option. Should the company in exercise of its right
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given by this contract, decide to execute the option and consequently acquire
the concessions "Animas" and "Sucesivas Animas", it will notify the Cooperative
of this in writing; within; within seven days of notification, it will sign the
corresponding public deed of definitive transfer, against delivery of the
balance and complying with the other conditions stipulated in the contract;
[should it] not do so, the parties concede sufficient competency and
jurisdiction to any district judge of the city of La Paz the authority to extend
the corresponding minute of sale.
Ninth. Renouncement of the Option. MINTEC S.A. reserves the right to conclude
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[sic] this contract during the period of the option, without demonstration of
cause, at any time. To this effect, it will notify the seller of its decision
to not exercise the option 30 days in advance and with this notification the
present contract will remain concluded, with full right and without need of
judicial intervention covered by Article 589 of the Civil Code.
The monies which may have been paid to the seller under this contract shall
remain to the benefit of the Cooperative, and the optioner will deliver to the
Cooperative the studies and maps elaborated on the concessions "Animas" and
"Sucesivas Animas" at no cost. Within 15 days of receipt of notification, the
parties oblige themselves to sign the respective minute and public deed of
conclusion of the contract, in which it will be stated that the concessions
revert to the seller and the optioner is freed of payment of the balance of the
total price and monthly quotas.
Tenth. Priorities for the Cooperative. During the exploration phase, MINTEC
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S.A. concedes priority right to the cooperative members for contracting workers
in accordance to its needs, equally should it enter the exploitation phase, with
priority it will contract Cooperative personnel for these works.
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In the event MINTEC does not exercise its right of option, all of the
improvements made on the concessions "Animas" and "Sucesivas Animas" will remain
in benefit of the Cooperative, however MINTEC may freely withdraw its machinery
and equipment from its property.
Eleventh. Notices. For the purpose of communications resulting from this
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contract, the parties indicate the following domiciles: La Cooperative Minera
"Litoral Ltda", Calle Avenida Arce esquina Peru No. 401, Uyuni telephone 0693-
2198. MINTEC S.A. Calle Campos No. 265, P.O. Box 13790, telephone 433800.
Twelfth. Arbitration. Any divergence between the contracting parties in
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relation to this contract shall be resolved via binding arbitration in
accordance with dispositions of the Code of Civil Procedure and in the event the
third arbiter is not designated by the parties, he shall be designated by the
President of the Bolivian Confederation of Private Businessmen.
Thirteenth. Reaches of this Document. Until it is raised to public deed, this
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minute is given the value and effect of a private document.
Fourteenth. Acceptance. We Pedro Calcina Quispe, Epifanio Calcina Calcina, and
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Hilarion Calcina Quispe, President, Secretary and Treasurer of the
Administrative Council, respectively, of the Cooperative Minera Litoral Ltda.
For the one part, and for the other Ing. Jaime Rubin de Celis Navarro, legal
representative of the company Mineria Tecnica Consultores Asociados S.A. MINTEC
S.A., manifest our acceptance and full agreement with the entire tone of the
present contract in each and every one of its clauses.
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- ------------------- Dra. Maria Esther Vallejos H.
Nieves Rocha U. Special Notes of Mines and Petroleum
Witness
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Guido Ortiz M.
Witness
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Signed by Pedro Calcina Quispe
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Signed by Epifanio Calcina Clacina
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Signed by Hilarion Calcina Quispe
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Signed by Jaime Rubin de Celis (Mintec S.A.)
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