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EXHIBIT 10.4
CERTIFICATE PURSUANT TO REGULATION S-T SECTION 237.306
The undersigned certifies that he is secretary of Fremont Gold Corporation, a
Delaware corporation (the "Company") and that as such he is duly authorized to
execute and deliver this certificate on behalf of the Company and further
represents that:
1. Attached hereto is a fair and accurate English translation of that
certain Agreement by and between Sali Hochschild S.a. and Inversiones
Minera AyL S.A., dated July 19, 1996.
IN WITNESS WHEREOF, I have affixed my signature this 6th day of
February, 1997.
/s/ Edward M. Topham
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Edward M. Topham
Secretary
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REP. No. 548 [TRANSLATED FROM SPANISH TO ENGLISH]
AGREEMENT
BY AND BETWEEN
SALI HOCHSCHILD S.A.
AND
INVERSIONES MINERA AYL S.A.
In Santiago, Chile, on July 19, 1996, before me, ENRIQUE MORGAN TORRES,
attorney-at-law, Notary, Titular of the Second Notarial Office of Santiago,
domiciled at Agustinas 1111 in this city, there appeared: Mr. Walter Hochschild
Kaufmann, Chilean, married, businessman, national identity card No. 1.961.845-5,
and Mr. Joaquin Errazuriz Hochschild, Chilean, married, engineer, national
identity card No. 6.075.332-1, both on behalf of, as shall be evidenced, the
Chilean corporation "SALI HOCHSCHILD S.A.", hereinafter "SALI HOCHSCHILD", all
domiciled at Avda. Presidente Frei Montalva 3077, township of Conchali,
Santiago; and Mr. Roberto Ossandon Irarrazabal, Chilean, married,
attorney-at-law, national identity card No. 7.022.012-1, domiciled in Santiago
at Nueva York 25, 6th floor, on behalf of, as shall be evidenced, the
corporation "INVERSIONES MINERAS AyL S.A.", hereinafter "IMAyL S.A." of the same
domicile thereof; all appearing parties of age, who evidence their identities to
me with the aforesaid identity cards and state:
WHEREAS:
A. SALI HOCHSCHILD is the owner of certain mining claims called
"Resguardo 1 to 53," located in the Third Region of the Republic of Chile that
are described in Section 1.13 and in Appendix A hereof, which identify all
claims and denouncements contemplated herein.
B. IMAyL S.A. wishes to execute successive initial exploration and
assessment work commitments on the set of claims and denouncements referred to
in A above during a period of up to 36 months, on its exclusive account and
risk, in the form and stages to be indicated hereinbelow, in exchange for which
it may exploit the mining properties; and SALI HOCHSCHILD wishes to receive rent
as indicated in Article Eight.
C. Once IMAyL S.A. has completed Initial Work Number Three, the parties
shall implement the lease referred to in Article Eight hereof.
THEREFORE, in consideration of the agreements and covenants contained
herein, SALI HOCHSCHILD and IMAYL S.A. agree to the following:
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ARTICLE I
DEFINITIONS
1.1 "Accounting Procedures": means the regular procedures in force used
ordinarily in Chile according to generally accepted accounting practices and
auditing principles.
1.2 "Affiliate": means any person, corporation, association or other
form or organization that directly or indirectly controls, or is controlled by,
or is under common control with a Party. For purposes of the preceding sentence,
"Control" means holding, directly or indirectly, the power to direct or have
directed the management and policies.
1.3 "Agreement": means this exploration, association and lease
agreement, including all modifications and amendments of the same as well as all
appendixes and schedules incorporated hereto.
1.4 "Assets": means the denouncements, Concessions, Properties,
Products and all real estate and chattel, both tangible and intangible, used in
the execution of the Agreement by IMAyL S.A. or SALI HOCHSCHILD.
1.5 "Construction Decision": means the decision adopted by IMAyL S.A.
to undertake the project development and construction as a result of the
feasibility study.
1.6 "Development": means the entire preparation for removal and
recovery of the Products, including the construction and installation of a plant
or any other improvements that will be used in the extraction, handling,
milling, processing or other elaboration of the Products in accordance with the
feasibility study.
1.7 "Exploration": means all activities aimed at verifying the
existence, location, quantity, quality, or commercial value of the substances
contained on the properties, including the preparation of the feasibility study.
1.8 "Initial Work Commitment": means the Operations that IMAyL S.A. may
perform and finance within the maximum period of 36 months as of the effective
date in order for the lease referred to in Article Eight to enter into effect.
1.9 "Operations": means the activities performed hereunder.
1.10 "Parties and Party, Participant and Participator": means IMAyL
S.A. and/or SALI HOCHSCHILD.
1.11 "Products": means all minerals and mineral resources that will be
produced on the properties.
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1.12 "Work Schedule or Schedule": means a description in reasonable
detail of the Exploration activities, which will also contain a description of
the expenses required to perform such activities in the period established in
Articles V and VI.
1.13 "Properties": means, in general and for purposes hereof, the
mining claims and denouncements described in Appendix A. For purposes hereof,
this expression specifically includes the claims of SALI HOCHSCHILD. Properties
shall also mean the mining claims or exploitation concessions into which the
aforesaid mining exploration concessions are converted in due time.
1.14 "Feasibility Study": means the technical and economic assessment
of the possibility of developing a project for the commercial exploitation of
the Properties.
1.15 "Expenses": means those disbursements made on Exploration to
comply with the initial work commitments.
1.16 "Capital Goods": means the physical goods acquired by the operator
that may be easily removed from the land.
ARTICLE II
REPRESENTATIONS AND TITLES
2.1 Capacity of the Parties. Each of the Parties warrants and
represents the following:
(a) that it is a company or corporation duly organized and
existing pursuant to the laws of its respective country;
(b) that it has authorization to enter into and carry out this
Agreement and all transactions contemplated herein and that all other
actions required to authorize it to enter into and carry out this
Agreement have been adopted;
(c) that it shall not violate any other Agreement or
convention by entering into this Agreement;
(d) that this Agreement has been duly subscribed and executed
thereby and is valid and binding thereupon according to its terms.
2.2 Representations. SALI HOCHSCHILD declares:
(a) that it is the owner of its properties;
(b) that it has had and has exclusive and excluding ownership
thereon as well as preemptive or preferred rights to have created
definitive mining property;
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(c) that there are no third-party superpositions or mining
rights of third parties in the area of the claims save as appears in
the appendix describing them;
(d) that they were acquired under good title, in good faith,
pursuant to the law, regulations and other applicable norms; all the
transfers of ownership thereof have also been made legally and no one
could justifiably claim rights or denounce defects;
(e) the creation process thereof was accomplished pursuant to
the law, regulations and other applicable norms;
(f) they are free of mortgages, encumbrances, prohibitions,
promises and options of any nature, lessees and occupants in any way;
(g) the claim fee and all mining permits have been paid when
appropriate and in the corresponding amounts and;
(h) that there are no lawsuits pending nor is it aware of
grounds or causes that might affect the ownership of the owner.
SALI HOCHSCHILD also represents that it shall have the obligation to
defend the ownership of the properties. Also included in this Agreement are the
inherent water rights or those that may correspond under mining concessions as
provided in Article 110 of the Mining Code. IMAyL S.A. represents that it knows
of the status of the title deeds to the claims contemplated herein.
ARTICLE III
PURPOSE AND DURATION
3.1 General. IMAyL S.A. and SALI HOCHSCHILD enter into this Agreement
for the purposes indicated below and agree that all the rights thereof and all
the Operations shall be subject to and governed hereby.
3.2 Purpose. This Agreement is entered into for the following purposes:
(a) Exploration by IMAyL S.A. on its exclusive account and
risk until completing the Initial Work Commitment and the Feasibility
Study.
(b) Eventually, if the Exploration and the assessment have
been successful, the Development and commercial exploitation of the
Properties as described herein.
(c) The execution of any other activity required, appropriate
or incidental to the stipulations hereinabove.
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3.3 Limitation. Unless the parties agree otherwise in writing, the
operations shall be limited to the objectives described in Section 3.2 and
nothing said herein shall be interpreted to expand such objectives.
3.4 The Effective Date and Term. This Agreement shall enter into effect
as of the date of its subscription and shall terminate in the cases and
circumstances indicated in the same agreement.
ARTICLE IV
RELATIONSHIP OF THE PARTICIPANTS
4.1 No Partnership Exists. Nothing contained herein shall be considered
to make a Participant a Partner of the other or, save as indicated expressly
herein, a participant and agent or legal representative of the other nor create
a fiduciary relationship therebetween. The Participants do not intend to create
nor may this Agreement be interpreted to create a mining, business or other
corporation. None of the Participants shall be empowered to act on behalf of or
assume any obligation or liability for account of the other Participant, save as
expressly stipulated herein. The rights, duties, obligations and liabilities of
the Participants shall be individual and not joint or solidary. Each Participant
shall be liable only for its obligations as stipulated herein and shall be
liable only for its share in the cost and expenses as indicated herein.
Consequently, each Participant shall indemnify, defend and hold harmless the
other participant, the directors, officers, employees, agents and
attorneys-in-fact thereof for any loss, claim, damages, compensation and
liabilities that arise from any act or any recognition of liability of another
of the Participants or of any of the directors, officers, employees, agents and
attorneys-in-fact thereof, whether performed or committed, or that have
apparently been performed or committed, on behalf of another Participant, save
specific authorization granted herein or save agreement otherwise in writing
among the Participants.
4.2 Ownership of assets acquired hereunder during the term hereof:
(a) the Capital Goods acquired by IMAyL S.A. to comply with
the Initial Work Commitments shall be the exclusive property thereof
without the price thereof being chargeable to the expenses that
comprise its Initial Work Commitment unless the parties agree otherwise
in writing;
(b) the work and studies performed by IMAyL S.A. shall be the
property of both Parties notwithstanding the risk of forfeiture of the
same in the case of abandonment of the project, whereupon the ownership
of the same shall be transferred to SALI HOCHSCHILD at no charge or
cost.
4.3 Property Maintenance Expenses. All maintenance expenses such as
licenses, permits, mining permits, etc., shall be paid by IMAyL S.A. as long as
this Agreement is in effect, notwithstanding the stipulations in the following
Article. However, all expenses related to the
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legal defense of the Properties, including claims and judicial actions to which
they may be subject, shall be the expense of SALI HOCHSCHILD.
4.4 Other Business Opportunities. Save the specific stipulations
herein, each Participant shall have the separate right to engage in all
commercial activities and to receive all profits arising therefrom, whether or
not competitive with the Operations, without consulting the other Participant.
None of the Participants shall have obligations toward the other regarding any
opportunity to acquire properties on different dates. Unless agreed otherwise in
writing, none of the Participants shall have the obligation to process, treat or
otherwise transform the Products, more or less elaborated, of the other
Participant at any of the facilities it owns or controls.
4.5 Waiver of the Right to Division. The participants hereby waive any
right to division of the Assets that they co-own or sale of the rights therein
or any other operation the purpose of which is to divide common assets.
4.6 Transfer or Termination of Rights to Properties. The parties may
assign the rights arising here from. If this occurs, the assigning party shall
notify the other of its intent to assign its rights at least 60 days in advance,
such notice to contain a clear identification of the assignee as well as of the
principal partners or shareholders thereof. Such notice shall also contain a
copy of the two most recent annual financial statements of the assignee. If such
financial statements do not exist, a copy of the respective financial statements
of the main partners or shareholders thereof shall be submitted.
4.7 Creation or Acquisition of Mining Property in the Area of Interest.
Any act or contract relative to the acquisition of rights in the geographic area
of interest shall be done exclusively in the name of SALI HOCHSCHILD at no
charge whatsoever to this latter, and IMAyL S.A. may not act through third
parties.
4.8 Prohibition to Encumber or Convey. SALI HOCHSCHILD shall execute a
public deed stipulating a prohibition to encumber and convey the properties in
favor of IMAyL S.A. and shall proceed with the registration thereof in the
respective Mines Registrar within a maximum period of 120 days as of the date
hereof. IMAyL S.A., on its part, undertakes to release such prohibition for the
sole purpose of registering the transfer by SALI HOCHSCHILD in favor of a third
party assuming this Agreement.
ARTICLE V
EXPLORATION BY IMAyL S.A.
5.1 Initial Contractual Interest. SALI HOCHSCHILD hereby places its
properties and all studies and information it has thereon at the disposition of
IMAyL S.A., hereby granting the permits necessary in order for IMAyL S.A. to
carry out the work commitments that will enable it to choose to lease the
properties through the execution of successive work schedules within the maximum
period of 36 months.
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Stage I: Detailed Regional and Property Geological
Mapping; Geochemical Studies and, if warranted, geophysical
studies. Furrowing the surface area; initial drilling program.
Stage II: Continuation of the drilling program; if
warranted, a metallurgical study; scope/prefeasibility study,
project viability, economic reserves, etc.
Stage III: Complete the Scope/Prefeasibility Study;
Bank Feasibility Study.
5.1.2 IMAyL S.A. shall deliver a detailed exploration schedule
to SALI HOCHSCHILD no later than 60 days as of the date hereof which IMAyL S.A.
shall direct on Resguardo, specifying the approximate hourly plan and amount of
money that shall be spend on each stage, but in the understanding that this may
need to be modified in accordance with the results of each stage and the
information generated. After 6-month period in the exploration program has
passed, IMAyL S.A. shall submit the results of the work performed in the
respective period to SALI HOCHSCHILD and shall notify in writing the intent of
IMAyL S.A. to continue with the next stage of work or withdraw from the project
and renounce the option. If it continues with the next stage, it shall specify,
with the greatest precision possible, the work to be performed and the cost
thereof.
5.1.3 In order to be able to exercise the option to Resguardo,
IMAyL S.A. hereby pays SALI HOCHSCHILD 75,000 dollars of the United States of
America. IMAyL S.A. shall make a payment to SALI HOCHSCHILD S.A. in the same way
12 months after this Agreement is signed and after giving written notice, in the
amount of 60,000 dollars of the United States of America. 24 months after
signature of the contract, IMAyL S.A. shall pay 60,000 dollars of the United
States of America. Finally, 36 months after signature of this Agreement, it
shall pay the sum of 80, 000 dollars of the United States of America. For
purposes of the payments, the exchange rate contemplated in 8.2 shall be
applicable.
5.1.4 Abandonment by IMAyL S.A. If IMAyL S.A. has chosen to
abandon the Project during the term or upon completion of any of the stages
mentioned in the previous Sections , it shall be understood by such sole event
that it waives all contractual rights it has acquired, which shall lead to
forfeiture of everything spent; in this event, all studies and work performed on
the properties of SALI HOCHSCHILD shall become the property of SALI HOCHSCHILD,
IMAyL S.A. making full delivery thereto of all information.
5.2 The forfeiture of the Contractual Interest of IMAyL S.A. does not
release such participant from liability corresponding thereto for Operations
performed before such forfeiture through the day on which it actually performed
such Operations.
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5.3 If IMAyL S.A. makes an assignment of rights to a Subsidiary, it
shall be responsible for the Subsidiary adhering without restriction to this
Agreement, being subrogated in all rights and obligations of the assignor
regarding the Contractual Interest acquired. This observance shall be
materialized in writing and under prior written notice to SALI HOCHSCHILD.
ARTICLE VI
OPERATOR
6.1 Designation. The Participants designate IMAyL S.A. as the Operator,
with aggregate responsibility for the management of Operations, who shall
operate until the project is abandoned or the lease described in Article VIII is
voided.
6.2 Powers and Obligations of the Operator. Subject to the terms and
provisions hereof, the Operator shall have the following powers and obligations
that shall be applicable in accordance with Schedules adopted:
(a) The Operator shall administer, direct and control the
Operations.
(b) The Operator shall define and implement the Work
Commitments and Schedules contemplated in 5.1.1, and shall make all
expenses required to implement the Schedules adopted and shall
immediately notify SALI HOCHSCHILD if for any cause it cannot comply
with its responsibilities hereunder.
(c) The Operator shall make all payments for its account and
without entitlement to reimbursement that are required for permits,
mining permits, contracts and other agreements related to the Assets.
If the title to the mining rights contemplated herein must be defended,
SALI HOCHSCHILD shall assume such defense and the cost thereof.
(d) The Operator:
(i) shall request all permits, licenses, and
approvals necessary to comply with the Schedules;
(ii) shall comply in all aspects with applicable
laws, in particular regarding the environment;
(iii) shall give immediate notice to SALI HOCHSCHILD
of any violation thereof of which it learns; and
(iv) shall prepare and submit all reports or notices
required to implement the Operations. The Operator shall not
be
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in violation of this provision if a violation of the law has
occurred despite its good faith efforts to comply therewith
and it has corrected or repaired such violation in due time by
the adoption of any suitable measure or by paying fines and
complying with the corresponding sanctions.
(e) The Operator shall pursue and defend all litigation or
administrative proceedings that arise on occasion of the Exploration by
IMAyL S.A. SALI HOCHSCHILD shall be entitled to participate in such
litigation or administrative proceeding at its own cost.
(f) The Operator shall keep and maintain all accounting and
financial records required according to the Accounting Procedure and in
accordance with the customary mining industry cost accounting practices
of the Internal Revenue Service of Chile.
(g) The Operator shall submit semiannual progress reports that
include expense statements for the respective Schedule; (ii)
semi-annual summaries of the information obtained regarding the
Properties; (iii) copies of reports related to Operations; (iv) a final
detailed report within 60 days after completing each Schedule; and (v)
all such reports as may be reasonably requested by SALI HOCHSCHILD. The
technical reports shall not compromise the reporter regarding the
content or exclusions thereof since they shall be illustrative in
nature. Whenever requested, the Operator shall grant SALI HOCHSCHILD
access and the right to inspect and copy all maps, drilling logs, drill
samples, reports, topographical studies, assays, analyses, production
reports, operations, technical, accounting and financial records and
other information acquired in the Operations. SALI HOCHSCHILD may make
observations regarding costs incurred in the contracting of third-party
services used by the Operator and which affect the net smelter return
due to the amount thereof. The Operator shall also allow SALI
HOCHSCHILD, at the exclusive risk and for account of the latter,
subject to reasonable safety regulations, to inspect the Properties and
Operations whenever requested, provided it does not interfere with the
regular development of the operations.
6.3 Due Diligence. The Operator shall perform all operations
efficiently and carefully according to healthy standards and practices in mining
and other applicable industries and in accordance with the terms and provisions
of leases, licenses, permits, contracts and other agreements related to the
Assets. The Operator shall not be liable to SALI HOCHSCHILD for an act or
omission that results in damage, injury or loss, except to the extent it is
caused by or attributable to willful misconduct or slight negligence by the
Operator.
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ARTICLE VII
WORK SCHEDULES
7.1 Operations According to Work Schedules. The Work Schedules referred
to in 5.1.2 should include the Operations to be performed, the expenses to be
made and the Assets to be acquired. The Operations shall adhere to the Schedules
and the Schedules to the purpose of this Agreement. However, IMAyL S.A. may at
any time accelerate the execution of the Work Schedules by defining and
executing new and successive Schedules.
7.2 Presentation of Work Schedules. The Work schedules shall be
prepared by the Operator for a period of 6 months or any other period agreed
upon. During the period of any work Schedule and at least 20 days before
expiration thereof, the operator shall submit a draft Work Schedule for the
following period to SALI HOCHSCHILD in order for SALI HOCHSCHILD to examine and
eventually make technical or financial observations thereto as it deems
pertinent within the period of 30 days.
ARTICLE VIII
EXERCISE OF THE EXPLOITATION OPTION
AND EXECUTION OF LEASE OF MINING PROPERTIES
8.1 IMAyL S.A. may at any time exercise its Option to implement the
exploitation of Resguardo, hereinafter the option, and shall notify SALI
HOCHSCHILD in writing of its decision, simultaneously proposing its work plan
for Project execution. During execution, the rules set forth hereinabove for the
Operator shall be applicable to IMAyL S.A. In conjunction with the exercise of
the Option, IMAyL S.A. shall make payment of the corresponding amount to
complete the sum of 275,000 dollars of the United States of America as
contemplated in 5.1.3.
8.2 Upon exercising the Option and during exploitation, IMAyL S.A.
shall pay SALI HOCHSCHILD a production royalty that shall consist of 5% of the
net smelter return on the production of gold and silver and of 1.5% on the
production of copper or any other metal. The net smelter return shall be set
according to the stipulations in Appendix B. Payment shall be made in the first
15 days of the month of payment according to a settlement to be submitted by
IMAyL S.A. within the first 5 days of the month following the month to be
settled, which shall be approved by SALI HOCHSCHILD in writing within 5 days
thereafter. If it does not do so, the settlement shall be understood approved.
Payment shall be made in national legal tender using the value of the observed
dollar corresponding to the day of payment as defined in No. 6 of Chapter I of
Title I of the Compendium of Foreign Exchange Regulations, and if such exchange
rate does not exist, the value of the selling dollar of Banco de Chile shall be
used that has been applied the day prior to the day of payment. The parties
agree that if IMAyL S.A. decides to make sales at fixed future prices, SALI
HOCHSCHILD should have the power not to accept such price for purposes of the
royalty settlement and in such case, IMAyL S.A. shall submit a settlement for
the corresponding sale using the average value of the month regarding which the
settlement is made as the sale price according to prices on the London Metal
Exchange.
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8.3 From the date when IMAyL S.A. exercises the Option, it shall have a
period of 4 years to complete the financing and construction of the mine. In the
event that the operation of the mine site has not begun in year 5 and 12 months
thereafter, IMAyL S.A. shall pay SALI HOCHSCHILD a minimum royalty of 150,000
dollars of the United States of America on account of future royalties. The
second year of delay, it shall pay a minimum royalty of 200,000 dollars of the
United States of America at 12 months of delay. The third year of delay a
royalty shall be paid amounting to 250,000 dollars of the United States of
America, upon again completing 12 months, and for future subsequent delays, an
annual surcharge of 15% of the last amount paid in each year shall be
applicable. The minimum royalty contemplated in the first year of delay shall be
on account of future production royalties and no charge whatsoever shall be made
against the minimum royalties payable as of the second year of delay.
8.4 Execution of Lease. In the event that IMAyL S.A. has chosen to
exercise the Option, a lease shall enter into effect automatically that shall be
governed by the rules established herein, as far as applicable, by Article 171
of the Mining Code and by the articles in the Civil Code, the lessee owning all
Assets acquired and incorporated to the mine.
8.5 Minimum Obligations.
(a) SALI HOCHSCHILD: Is obligated to lease all Claims
comprising the mining claims identified in Appendix A and which form
part of the Project, free and clear of any mortgage, encumbrance,
purchase option or sale promise, prohibitions, attachments o litigation
pending, and in any case as is on such date, which IMAyL S.A. declares
to know in full.
(b) IMAyL S.A.: Is obligated to make the payments stipulated
in 8.3 and attain the financing required, either through the
incorporation of third parties or in other ways.
(c) MINIMUM PAYMENT BY IMAyL S.A.: As of conclusion of the
fourth year after subscription hereof and provided the mine is in
operation, IMAyL S.A. is obligated to pay SALI HOCHSCHILD an amount no
less than 300,000 dollars of the United States of America as the
minimum royalty. The Parties agree that if the production royalties
paid pursuant to the rules in Article 8.2 hereof do not reach the
minimum stipulated in this letter, IMAyL S.A. shall pay SALI HOCHSCHILD
an amount of money equal to the amount necessary to complete such
amount. This sum, corresponding to the differential between the
production royalties and the minimum royalty, shall be in any case on
account of future production royalties.
8.6 The principle that shall govern the marketing of the products from
the Properties shall be to maximize the profits derived from the sales made by
IMAyL S.A.
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8.7 Timing of Payment of the Production Royalty. The amount payable
shall be paid monthly according to the settlement of sales made, save the case
stipulated in letter (c) of such 8.5, which shall be paid at the end of the
respective year.
ARTICLE IX
TERMINATION
9.1 Termination of the Agreement. This Agreement shall terminate by
written agreement of the parties. It shall also terminate on the following
grounds:
(a) When IMAyL S.A. withdraws as regulated in Article V;
(b) If the prohibition to encumber and convey the properties
referred to in Article IV, No. 4.8 hereof is not registered in the
respective Registry of the corresponding Mines Registrar within a
period of 120 days.
(c) By nullification of the Agreement in the case of serious
default by one of the parties on the obligations imposed thereon by the
Agreement, notwithstanding the right of the other party to sue for
performance, and in both cases with damage compensation. Failure to
make timely payment of the obligations stipulated herein shall not be
considered a serious default if it is made at the end of 60 days as of
non-payment.
(d) At the end of 100 years as of the date hereof or upon
exhaustion of the minerals in the concessions contemplated herein.
9.2 Right to Information after Termination. After this Agreement is
terminated pursuant to Section 9.1, each party shall be entitled, on its own
account and expense, to copies of all information acquired hereunder before the
date when termination becomes effective. The parties agree to state for the
record that the delivery of such information shall be made with no further
responsibility for the party making it and in particular regarding the
interpretation of geological information contemplated therein.
ARTICLE X
ARBITRATION
Any difficulty, doubt or dispute arising among the parties that is
related to the Agreement, the interpretation, performance, default,
nullification, rescission or voidance hereof or which in general arises on
occasion or by reason hereof or of the lease shall be resolved by a mixed
arbitrator, meaning an arbitrator who shall be an arbitrator in terms of
procedure and an arbitrator-at-law in terms of ruling and against whose
resolution no remedy whatsoever shall be available by specific waiver made
herein, save the remedy of compliant. Such arbitrator shall be designated by
mutual consent of the parties. Failing such consent, any doubt or difficulty
arising among the parties on occasion hereof or of the complementary or
modifying documents of the
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same, either referring to the interpretation, performance, validity or
termination hereof or any other cause related hereto shall be resolved by
arbitration according to the regulations of the Center of Arbitrator of the
Chamber of Commerce of Santiago. For this purpose, the parties confer a limited
irrevocable power of attorney upon the Santiago Chamber of Commerce to proceed
to designate the arbitration panel as a mixed arbitrator.
ARTICLE XI
CONFIDENTIALITY
11.1 General. The terms hereof and all information obtained in relation
to the execution of this Agreement shall be the exclusive property of the
parties and save the provisions in Section 11.2, shall not be disclosed to third
parties without prior written consent of the other party, which consent may not
be unjustifiably denied.
11.2 Exceptions. The consent required in Section 11.1 shall not be
applicable to a disclosure:
(a) to an Affiliate, consultant, contractor or subcontractor
on a good faith need-to-know basis;
(b) to a state agency or entity if the disclosing party
believes in good faith that this is required pursuant to the pertinent
laws or regulations and has received notice from its attorneys that
such disclosure is necessary pursuant to rules or regulations;
(c) to pertinent public services if any of the parties trades
its shares on stock exchanges and must provide information included in
11.1;
(d) to the public at large, subject to the same requirements
indicated in letter (b) above;
(e) to the assignee of rights in accordance with the
stipulations in Article IV, No. 4.6 hereof. In all such cases where
this Section 11.2 is applicable, the disclosing party shall give
written notice to the other party before making such disclosure.
Concerning the disclosure referred to in Section 11.2 (a) or (c), only
confidential information that a third party legitimately needs to know
shall be disclosed and such third party shall first agree in writing to
protect the confidential information in order for it not to be
disclosed beyond what the parties are obligated to do under this
Article XI. Concerning a disclosure pursuant to this Section 11.2(a) or
(c) , if the Party to whom notice is given of the intent to make a
disclosure opposes the same, the Party shall negotiate in good faith to
try to modify or alter the content or terms of such disclosure in order
to limit the proposed disclosure as far as possible.
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11.3 Duration of Confidentiality. The provisions in this Article XI
shall be applicable during the term of this Agreement and for two years after
termination of the same pursuant to Section IX, and shall continue to be
applicable to any withdrawing party that is considered to have withdrawn during
two years after the date of such occurrence.
ARTICLE XII
GENERAL PROVISIONS
12.1 Notices. All notices, payments and other communications required
("Notices") to the party shall be made writing and shall be addressed
respectively as follows: Sali Hochschild S.A., Avenida Presidente Frei Montalva
3,077, township of Conchali, Santiago, Chile, Attention: Mr. Joaquin Errazuriz
Hochschild, Fax: 736-9914; Inversiones Mineras AyL S.A., San Crescente 400, Las
Condes, Santiago, Chile, Attention: Mr. Roberto Partarrieu Leon, Fax (562)
231-2942, Telephone: (562) 232-8719. All notices shall be given (i) personally
to a party; or (ii) by electronic communication with a confirmation sent by
registered or certified mail, return receipt requested, or (iii) by registered
or certified mail, return receipt requested. All notices shall be effective and
shall be considered delivered: (i) if personally, on the date of delivery, if
delivered during regular business hours, and if not delivered during regular
business hours, on the business day after delivery; (ii) if by electronic
communication, the business day following receipt of the electronic
communication; and (iii) if only by mail, the business day following actual
receipt. The party may change its address by notice to the other party.
12.2 Waiver. If one party does not insist on strict compliance of any
provision hereof or if it does not exercise a right, power or remedy upon
occurrence of a violation, this shall not constitute a waiver of any of the
provisions hereof nor limit the right of the party thereafter to enforce any
provision or exercise any right.
12.3 Amendment. No amendment hereof shall be valid unless it is in
writing and duly subscribed by the parties.
12.4 Force Majeure. The obligations of a party shall be suspended to
the extent and during the period compliance is prevented for any unforeseeable
reason. For these purposes, the rules on Force Majeure contemplated in the Civil
Code of the Republic of Chile shall be applicable.
12.5 Governing Law. This Agreement shall be governed by and interpreted
according to the laws of the Republic of Chile. All documentation relative
hereto shall also be extended in the Spanish language.
12.6 Additional Assurances. Each of the parties agrees to take such
actions and subscribe the additional instruments that are reasonably necessary
or convenient from time to time to implement and carry out the intent and
purpose of this Agreement.
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12.7 Entire Agreement; Successors and Assigns. This Agreement contains
the entire Agreement of the Parties and supersedes all prior agreements and
understandings thereamong that are related to the subject matter hereof. This
Agreement shall be binding upon and inure to the benefit of the respective
successors and permitted assigns of the parties. In the case of any conflict
between this Agreement and any Appendix attached hereto, the terms hereof shall
prevail.
12.8 Interpretation. The words, articles, sections, subsections and
titles contained herein are used for convenience only and are not intended to be
a complete or exact description of the content of the same and shall not be
interpreted as part hereof. "Article", "Section ", "Subsection" or "Appendix"
means and refers, respectively, to the specific Article, Section , Subsection or
Appendix hereof. The word "herein" refers to this Agreement and not to a certain
Article, Section or Subsection. The words in singular include their plural and
vice versa. The words in one gender include all genders.
ARTICLE XIII
The parties agree to state for the record that the documents identified
as Appendix A and Appendix B herein correspond to the documents filed on this
same date at the end of my records and are understood to form an integral part
hereof. The bearer of a certified copy of this deed is empowered to request all
pertinent registrations, subregistrations and annotations in the relevant
registries. Authority--The authority of Mr. Roberto Ossandon Irarrazabal to
represent INVERSIONES MINERAS AyL S.A. is evidenced in the public deed dated May
22, 1996, in the Santiago Notarial Office of Mr. Juan Ricardo San Martin
Urrejola. The authority of Mr. Walter Hochschild Kaufmann and Mr. Joaquin
Errazuriz Hochschild to represent SALI HOCHSCHILD S.A. is evidenced in the
public deed dated October 30, 1995, in the Santiago Notarial Office of Mr. Kamel
Zaquel Zaror. The authority of Mr. Joaquin Errazuriz Hochschild to represent
SALI HOCHSCHILD S.A. is evidenced in the public deed dated October 30, 1995 in
the Santiago Notarial Office of Mr. Kamel Zaquel Zaror.
In witness whereof and after reading, they sign.
/s/ Walter Hochschild Kaufman
/s/ Joaquin Errazuriz Hochschild
/s/ Roberto Ossandon Irarrazabal
/s/ Enrique Morgan Torres
I attest. This deed is annotated in the Repertory under No. 548. There
are the signatures of WALTER HOCHSCHILD KAUFMANN, JOAQUIN ERRAZURIZ HOCHSCHILD,
ROBERTO OSSANDON IRARRAZABAL, ENRIQUE MORGAN TORRES.
TITULAR NOTARY.
THIS COPY IS A TRUE RECORD OF THE ORIGINAL. Santiago, July 19, 1996.
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APPENDIX A Filed under No. 548
on July 19, 1996
Notary Stamp
1. Denouncements
ROCA, 400 hectares, filed January 31, 1996, by Compania Minera
y Comercial Sali Hochschild in the Chanaral Civil Court, roll 24,574,
denouncement thereof registered on Page 71, No. 42 of the Chanaral Discoveries
Registry. Located in the Remolino Sierra, township and province of Chanaral.
Ruling of creation approved, registration pending.
RORO, 300 hectares, filed January 31, 1996, by Compania Minera
y Comercial Sali Hochschild in the Chanaral Civil Court, roll 24,575,
denouncement thereof registered on Page 75, No. 44 of the Chanaral Discoveries
Registry. Located in the Remolino Sierra, township and province of Chanaral.
Ruling of creation approved, registration pending.
RIGO, 300 hectares, filed March 30, 1996, by Compania Minera y
Comercial Sali Hochschild in the Chanaral Civil Court, roll 24,736, denouncement
thereof registered on Page 370, No. 228 of the Chanaral Discoveries Registry.
Located in the Remolino Sierra, township and province of Chanaral. Ruling of
creation will be requested on June 28th.
RITA, 300 hectares, filed March 30, 1996, by Compania Minera y
Comercial Sali Hochschild in the Chanaral Civil Court, roll 24,737, denouncement
thereof registered on the back of Page 368, No. 227 of the Chanaral Discoveries
Registry. Located in the Remolino Sierra, township and province of Chanaral.
Ruling of creation will be requested on June 28th.
ROQUE, 200 hectares, filed March 30, 1996, by Compania Minera
y Comercial Sali Hochschild in the Chanaral Civil Court, roll 24,738,
denouncement thereof registered on Page 372, No. 229 of the Chanaral Discoveries
Registry. Located in the Remolino Sierra, township and province of Chanaral.
Ruling of creation will be requested on June 28th.
2. CLAIMS
REBE 1 to 40. 200 hectares, filed January 31, 1996, by
Compania Minera y Comercial Sali Hochschild in the Chanaral Civil Court, roll
24,573, denouncement thereof registered on Page 73, No. 43 of the Chanaral
Discoveries Registry. Located in the Remolino Sierra, township and province of
Chanaral. Producer of copper, gold, silver and other grantable substances.
Measurement application shall be submitted June 30th.
ROMY 1 to 20. 200 hectares, filed January 31, 1996, by
Compania Minera y Comercial Sali Hochschild in the Chanaral Civil Court, roll
24,572, denouncement thereof registered on the back of Page 76, No. 45 of the
Chanaral Discoveries Registry. Located in the
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Remolino Sierra, township and province of Chanaral. Producer of copper, gold,
silver and other grantable substances. Measurement application was filed at the
end of June.
3. MEASUREMENTS MADE.
RESGUARDO 1 TO 50, 265 hectares, located at West Sierra
Remolino or Salitrosa, Township of Caldera, owned by Compania Minera y Comercial
Sali Hochschild the certificate of measurement of which is registered on the
back of Page 472 No. 147 of the 1982 Property Registry of the Copiapo Mines
Registrar.
PAMELITA 1 TO 10, 100 hectares, located at West Sierra
Remolino or Salitrosa, Township of Caldera, owned by Sociedad Legal Minera
Pamelita Una de Sierra Remolino the certificate of measurement of which is
registered on the back of Page 223 No. 76 of the 1988 Property Registry of the
Copiapo Mines Registrar.
SANTA ROSA 1 TO 28, 252 hectares, located at West Sierra
Remolino or Salitrosa, Township of Caldera, owned by Sociedad Legal Minera Santa
Rosa Una de la Sierra Remolino the certificate of measurement of which is
registered on the back of Page 1415 No. 232 of the 1990 Property Registry of the
Copiapo Mines Registrar.
ROSA 1 TO 30, 300 hectares, located at West Sierra Remolino or
Salitrosa, Township of Caldera, owned by Sociedad Legal Minera Rosa 1 de la
Sierra Remolino the certificate of measurement of which is registered on the
back of Page 28 No. 7 of the 1991 Property Registry of the Copiapo Mines
Registrar.
ROSITA 1 TO 30, 300 hectares, located at West Sierra Remolino
or Salitrosa, Township of Caldera, owned by Sociedad Legal Minera Rosa Cuatro
Una de la Sierra Remolino the certificate of measurement of which is registered
on Page 198 No. 60 of the 1991 Property Registry of the Copiapo Mines Registrar.
ROSALIA 1 to 30, 300 hectares, located at West Sierra Remolino
or Salitrosa, Township of Caldera, owned by Sociedad Legal Minera Rosa Tres Una
de la Sierra Remolino the certificate of measurement of which is registered on
Page 100 No. 19 of the 1992 Property Registry of the Copiapo Mines Registrar.
NOTE: It is stated for the record that the extinctive prescription of
voidance actions contemplated in Numbers 6 and 7 of Article 95 of the Mining
Code have taken effect regarding the claims called Maria Emilia, Huascar 1,
Huascar 2, Huascar 3, Huascar 4 and Pepa which are located in the perimeter of
our property Resguardo 1 to 53. Sali Hochschild S.A. has filed judicial suit for
declaration of prescription of the voidance action, a ruling that shall
definitively declare the claims described extinguished because of the
superposition on the superposed portion.
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It is also stated for the record that the claims Rosario, Reforma and
Candelaria are not the property of Sali Hochschild S.A. and are correctly
created although superposed by our denouncement Rita.
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