Attached hereto is an English translation of the original Spanish
version of contracts dated January 12, 1995 between Andean Silver Corporation
LDC and 190 of the co-owners of the assets which previously belonged to Empresa
Minera San Juan de Lucanas, S.A. 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 reference
agreement.
/s/ Keith R. Hulley
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Keith R. Hulley
Director
Apex Silver Mines Limited
Date: August 28, 1997
Exhibit 10.25
Mr. Notary
Please draw up in your registry of public deeds one of transfer of mining
goods, being celebrated on the one part by Andean Silver Corporation, a foreign-
constituted and domiciled company having domicile for the purposes of this
contract at Las Camelias 755-301, Lima 27, Peru, who shall henceforth be called
the Buyer, represented by its agent Ing. Felipe De Lucio Pezet; and on the other
part by the co-owners of the assets which belonged to the Empresa Minera San
Juan de Lucanas, S.A., a list of whom is detailed in Annex IA, with domicile at
Av. Chiclayo 779-201, Lima 18, Peru, and who shall henceforth be called the
Titleholders, who act now represented by powers inscribed in Public Deed, by
Messrs. Juan de Dios Mejia Sulca, Roberto Romulo Salcedo Vargas, Aparicio Silva
Oropesa, Edwin Marcial Silva Velarde, Carlos Sucantaype Barba and Victo Velarde
Moran, under the following terms and conditions:
First The ex-workers of San Juan de Lucanas, S.A. described in Annex IB, among
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whom are included the Titleholders, are co-owners of the entirety of the assets
which belonged to the Empresa Minera San Juan de Lucanas, S.A., and thus, are
co-owners of the San Juan de Lucanas mining complex, comprised of the mining
rights, milling plant, hydroelectric plants, workshops, camp, equipment,
machinery and other goods of mining activity integrated in the "Unidad Economica
Administrativa Dorita", located in the District of San Juan, Province of
Lucanas, Department of Ayacucho, Peru, as well as other assets, all of which are
described in Annex II.
This mining complex belonged to its former owner, the Empresa Minera San
Juan de Lucanas, S.A., which has been sued by the Titleholders in a judicial
proceeding of Judgement of Executive Resolution before the First Labor Court of
Lima, Clerk Dr. Otto Heimann. In said proceeding the Empresa Minera San Juan de
Lucanas, S.A. has suffered the embargo of its goods and in the file there is the
private contract celebrated between the parties to said litigation, dated June
16, 1993, approved by the Court which knows cause via resolution of June 23,
1993, by way of which the assets of the company have been delivered in property
to the workers in payment of their social benefits.
Equally resolved and filed is the appraiser's report valuing the mining
complex, there being lacking only the verdict to dispose the formalization of
the transfer of title to said goods.
Second By way of the present Contract of Transfer, the Titleholders sell and
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the Buyer buys, the mining rights and other goods of Annex II, as well all of
the rights and easements inherent in same, in the following terms and under the
suspensive conditions and periods signalled below.
It is agreed that in the event that the transfer of property of the assets
of Empresa Minera San Juan de Lucanas S.A. to its ex-workers, for any reason,
remains null or is questioned or not approved by the Labor Court - and, as a
consequence, the property reverts to the aforementioned Empresa - the
dispositions of the Civil Code referring to these types of sales shall apply.
Third The total price to be paid for the transfer of the total of the mining
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rights and goods of Annex II is US$2,100,000.00, which will be paid according to
the following schedule:
a) On signature of the Public Deed brought about by this document, which shall
be no sooner than 120 calendar days from signature of this document, the
Buyer will pay the amount of US$50,000.00;
b) At the end of the first month from the signature of Public Deed US$50,000.00
will be paid;
c) At the end of the second month from the signature of Public Deed US$50,000.00
will be paid;
d) At the end of the third month from the signature of Public Deed US$100,000.00
will be paid;
e) At the end of the fourth month from the signature of Public Deed
US$150,000.00 will be paid;
f) At the end of the fifth month from the signature of Public Deed US$150,000.00
will be paid;
g) At the end of the sixth month from the signature of Public Deed US$150,000.00
will be paid;
h) At the end of the seventh month from the signature of Public Deed
US$150,000.00 will be paid;
i) At the end of the eighth month from the signature of Public Deed
US$150,000.00 will be paid;
j) At the end of the ninth month from the signature of Public Deed US$150,000.00
will be paid;
k) At the end of the tenth month from the signature of Public Deed US$150,000.00
will be paid;
l) At the end of the eleventh month from the signature of Public Deed
US$150,000.00 will be paid;
m) At the end of the twelfth month from the signature of Public Deed
US$200,000.00 will be paid;
n) At the end of the thirteenth month from the signature of Public Deed
US$200,000.00 will be paid;
n) At the end of the fourteenth month from the signature of Public Deed
US$250,000.00 will be paid.
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All of the payments will begin to be counted from the signature of the Public
Deed of Transfer originated by this contract and understood as calendar months
such that the payments coincide on the same day of each month. The Titleholders
declare their agreement that this price is the sole and total [one] for 100% of
the rights on the entirety of the assets material to this contract, by which
[they agree] there will remain a balance of the price for alicuots which belong
to workers included in Annex IB who do not transfer their participation via the
present document.
The lack of compliance with the schedule of payments will give rise to the
measures contemplated in the Civil Code.
Fourth The schedule of payments detailed in the foregoing clause are subject to
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the suspensive condition of formalization of the transfer of title material to
the present contract, which will have occurred when in the Public Mining
Registry either the ex-workers of San Juan de Lucanas or the legal or
conventional company constituted by them appear as owners of the mining rights
and accessories contained in Annex II.
Fifth If after 120 days have transpired from the date of signature of the
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present contract the workers have not complied with the formalization of the
transfer of assets to their name up to and including inscription in the Public
Mining Registry, that is, if they have not complied with the suspensive
condition during this period, the Buyer will have the right to annul the
contract of transfer, by which he will be automatically exempt from compliance
with the obligations he will have assumed in the present contract. This right
may be exercised by the Buyer by way of written communication remitted to the
domicile signalled by the Titleholders in the introduction to this contract,
which may be done at any time once the period for compliance with the suspensive
condition has expired. In the event that the Buyer chooses to not annul the
contract for this non-compliance and the obligation of the Titleholders to
proceed with inscription is in force, all of the payments and other obligations
of the Buyer will remain in suspense until the complete formalization of the
transfer of assets to the Titleholders.
Sixth While the suspensive condition has not been met, the rights of the Buyer
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will be in force, [so that] he may act as owner of the assets. Consequently,
the Buyer may study the mine, its installations and equipments, as well as
review the technical, accounting and legal archives. Nonetheless, the
Titleholders will have the right of usufruct of the mining complex for 120 days
counted from the signature of this document, including the mining rights, the
milling plant and other goods of mining activity material to this contract.
This period may be amplified by the Buyer.
Seventh Notwithstanding the expiration of the period for compliance with the
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agreed suspensive condition, the obligations assumed by the Titleholders in the
prevent contract will remain in force, and they will be obliged to transfer to
the Buyer all of the assets contained in Annex II once they obtain title to
same, unless the Buyer will have exercised his right to annul the contract.
Eighth In view of the fact that on inscription in the Public Mining Registry of
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the contract of transfer described in the first clause, there will be more than
one holder of title to the mining
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rights included in Annex II and the registrar must, by legal mandate,
automatically constitute a Limited Mining Partnership, unless the ex-workers
decide to constitute a conventional corporation, it could be that the owner of
the goods specified in Annex II will not be the titleholders, but rather a legal
or conventionel corporation in which the Titleholders and other ex-workers are
shareholders or participationists [sic]. Therefore, should this be the case,
automatically and without any additional economic burden or obligation for the
Buyer, he may opt that the transfer material to this contract will not be made
on alicuots of assets but rather on participations or shares of the corporate
titleholder. For the exercise of the alternative given to the Buyer to change
the object of the transfer, it will be enough to remit a written communication
to the domicile of the Titleholders signalled in the introduction to this
contract, and will not require any other additional document nor celebration of
a new contract.
Ninth During the life of the present commitment, the Titleholders commit
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themselves to not alienate, pledge, mortgage, cede, give in concession, lease
nor affect in any way, any of the goods material to this contract without the
written consent of the Buyer, as well as to do all possible [to ensure] that
third parties or previous owners do not celebrate any of the acts detailed in
this clause or any contract that would limit, restrict or prejudice their right
of ownership of the assets material to this contract, with the sole exception of
the formalization of the agreement of transfer to the Titleholders. Likewise,
the Titleholders oblige themselves to not sign any document of option of
transfer, nor letters of intent, nor any offer of any kind, on the goods
material to this contract or on the participations or shares of the legal or
conventional corporation which may be constituted [and] which may be holder of
title to such assets.
Tenth The Titleholders declare that the assets material to the present contract
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are found with title in order, that they have complied with all of the
substantive and formal obligations required by mining and commercial law, and
that there is no cause of extinction on them. They also declare that on these
[assets] there does not weigh any charge, tariff, judicial or extra-judicial
measure which could restrict or put at risk the rights of the owner. The only
judicial measure pending as of today is the embargo placed by the same workers
before the First Labor Court in the file mentioned in the first clause, which
the Titleholders commit themselves to lifting since the labor credit has been
satisfied with the adjudication of the assets of their ex-employer.
Eleventh On signing the public deed given rise to by this document, and
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beginning to make the payments assumed by the Buyer, each of the payments will
be channeled through a Bank chosen and contracted by the Buyer, which will act
as Trust Bank. The Buyer will make the deposits in the Trust Bank in the amounts
and times agreed in the third clause and will distribute them among the
Titleholders shown in Annex IA in accordance with the share which each has in
the title of the assets or the participations or shares in the legal or
conventional corporation which may be constituted, share which is clearly
expressed in Annex IB.
Nonetheless, in the event that the assets material to this contract are
contributed to a legal or conventional corporation, by virtue of that described
in the eighth clause, and the Buyer opts for the purchase of shares and
participations and not for alicuots of assets, the Trust Bank will make the
payments corresponding to such a corporate owner of said assets, if and when the
mentioned corporation ratifies via its relevant organs the transfer witnessed in
the present
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document. Should it be the case that it is a conventional corporation in which
not all of the ex-workers included in Annex IB participate, the payments which
correspond to this corporation will only reach the amount which corresponds to
the partners or shareholders.
It remains understood that the ratification mentioned in the foregoing
paragraph is only for effect of charging the price and giving assurances to the
Trust Bank, and its non-observance or non-application in no way will affect the
transfer to the Buyer.
The deposit in the Trust Bank will be considered as payment of the valid
price and shall be sufficient proof of compliance with the obligation assumed by
the Buyer in the third clause.
The distribution of the funds deposited by the Buyer shall be the exclusive
province of the ex-workers of San Juan de Lucanas and any conflict generated by
the distribution of the agreed price or by the charging of the price shall be
resolved internally among them.
Twelfth Without prejudice to the right contained in the fifth clause, the Buyer
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may annul the present contract at any time and without need for expression of
cause, for which it will be enough to remit a written communication to the
domicile signalled by the Titleholders in the introduction to this contract.
Should the Buyer choose to annul the present contract, be it by virtue of
this clause or by the right conferred on him in the fifth clause, he will have
no monetary obligation before the Titleholders nor before third parties, nor
shall any investment commitments which may have been agreed remain in force, nor
shall he have any responsibility for exploration and similar works which may
have been made. On annulment of the contract by the Buyer, the payments which
may have already been made in accordance with the schedule of payments contained
in the third clause shall remain in the hands of the Titleholders, and future
payments shall be automatically voided along with annulment of the contract,
remaining no obligation whatsoever between the Buyer and the Titleholders. It is
understood that on annulment of the contract of transfer the title to the assets
material to this contract will revert to the Titleholders.
Thirteenth As a guaranty of payment of the pending payments being charged,
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amounting to US$2,050,000.00, the Buyer constitutes in favor of all of the
sellers listed in Annex IA, a mortgage on the mining rights detailed in Annex
II, which shall be reduced as the agreed monthly payments are complied with.
Fourteenth Any conflict which may arise in relation to the transfer of the
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assets or of the shares or participations, be it in relation to issues or
discrepancies relative to its celebration or execution, shall be submitted to
legal arbitration, which shall unfold in the city of Lima in conformity with the
rules and procedures of the Chamber of Commerce of Lima.
Incorporate, Sir, the legal introduction and conclusion, as well as the
annexes and other inserts which may be necessary, and proceed to dispatch the
corresponding parts to the Public Mining Registry.
Lima, January 12, 1995
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