EXHIBIT 10.7
PROMISSORY AGREEMENT ENTERED INTO BY MRS. MARIA DEL CARMEN VALENZUELA BREACH
DE CABALLERO, ACTING AS Attorney-in-Fact OF THE COMPANIA MINERA NAVOJOA, S.A.
de C.V. (limited liability company), hereinafter referred to by her name or as
the CONCESSIONARY, represented by its, Mrs. MARIA DEL CARMEN VALENZUELA-BREACH
DE CABALLERO, and CORPORACION AMERMIN, S.A. DE C.V. (limited liability
company), represented by Mr. RAMIRO TREVIZO-LEDEZMA, acting as its
Attorney-in-Fact, agreement which they subject to the following STATEMENTS AND
CLAUSES.
STATEMENTS
A) The CONCESSIONARY declares as follows:
FIRST: That they are the titleholder of the rights derived from several
Mining Exploitation Titles listed below:
NAME OF LOT GUADALUPE DE LOS REYES
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD AND SILVER
ARE OF LOT 8 HECTARES
TITLE NUMBER 172225
NAME OF LOT EL ROSARIO
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD, SILVER, LEAD, COPPER, AND ZINC
ARE OF LOT 14.0000 HECTARES
TITLE NUMBER 166430
NAME OF LOT SWANWICK
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD, SILVER, AND LEAD
ARE OF LOT 70.1316 HECTARES
TITLE NUMBER 166428
NAME OF LOT LAS TRES S.S.S.
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD, SILVER, AND LEAD
ARE OF LOT 19.1908 HECTARES
LOCATION OF LOT 166429
NAME OF LOT LAS TRES B.B.B.
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD, SILVER, AND LEAD
ARE OF LOT 23.0010 HECTARES
TITLE NUMBER 166427
NAME OF LOT EL CARMEN
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD, SILVER, AND LEAD
ARE OF LOT 59.0864 HECTARES
TILE NUMBER 166426
NAME OF LOT SAN MIGUEL
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD AND SILVER
ARE OF LOT 12.9458 HECTARES
TITLE NUMBER 166401
NAME OF LOT SANTA CLARA
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD, SILVER, AND LEAD
ARE OF LOT 15 HECTARES
TITLE NUMBER 166425
NAME OF LOT SANGRE DE CRISTO
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD, SILVER, AND LEAD
ARE OF LOT 41 HECTARES
TITLE NUMBER 166424
NAME OF LOT EMPALME
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD AND SILVER
ARE OF LOT 6 HECTARES
TILE NUMBER 166423
2
NAME OF LOT SAN LUIS
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD, SILVER, AND LEAD
ARE OF LOT 4 HECTARES
TITLE NUMBER 166422
NAME OF LOT SAN JUAN
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD AND SILVER
ARE OF LOT 3 HECTARES
TITLE NUMBER 166402
SECOND: That on the above-mentioned titles weighs no obligation or lien, they
are not subject to any type of exploration or exploitation agreement or of
option or promise to enter into any of those mining contracts or of any
another nature. She declares that on the rights derived from the titles there
is no lawsuit or controversy with other individuals or with authorities that
could hinder the free exercise of the rights that might be derived from the
exploitation title and that all concessions are grouped in the so-called
AGRUPAMIENTO SAN MIGUEL (SAN MIGUEL GROUP).
THIRD: That they have complied with the work and the investments described in
the Exploitation Titles according to the effective date stated therein.
B) The BUYER declares as follows:
1. That they are usually engaged in business activities in general and
specifically in investing in the mining field in Mexico.
a) That they have the knowledge, contacts, financial and technical resources
required to carry out the execution of the agreement herein.
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b) Both parties jointly state that it is their own free will to enter into
this agreement, committing themselves to its total compliance, subject to the
following:
CLAUSES
FIRST: COMPANIA MINERA NAVOJOA, S.A. de C.V. (limited liability company)
acting as CONCESSIONARY, represented by its Attorney-in-Fact, Mrs. MARIA DEL
CARMEN VALENZUELA-BREACH DE CABALLERO, and CORPORACION AMERMIN, S.A. DE C.V.,
represented by its Attorney-in-Fact, Mr. RAMIRO TREVIZO-LEDEZMA, enter into a
PROMISE TO SELL AGREEMENT regarding the rights derived from the mining
concessions described in item A), number 1, in the Statements section herein.
SECOND: The PROMISE TO SELL AGREEMENT shall be effective without renewal for
sixty (60) natural days beginning from the date of this agreement and shall
expire on the tenth (10th) day of the month of July two thousand five (2005).
THIRD: For the (sixty) 60-day period of the Promise to Sell Agreement
herein, the PROMISSORY BUYER is bound to pay to the CONCESSIONARY the amount
of US$10,000.00 (TEN THOUSAND DOLLARS AND 00/100 U.S. Cy.), amount which shall
be paid no later than on the eighteenth (18th) day of the month of March two
thousand five (2005). On the tenth (10th) day of the month of July two
thousand five (2005), the PROMISSORY BUYER is bound to advise the
CONCESSIONARY of their wish to legalize the juridical act by which the rights
over the mining concessions are to be transferred and any other information
related thereto; the final act should be held and the first payment referred
to in the agreement, whose terms are stated below, shall be made no later that
on the thirty-first (31st) day of the month of July two thousand five (2005).
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In the event that said juridical act has not yet been legalized nor the amount
for the first price value has been made by that date, the agreement herein
shall be annulled, and both parties expressly agree that the agreement will be
considered as concluded and annulled by merely crediting this fact, without
any responsibility for the parties and that this clause shall be considered a
judged case.
FOURTH: If at the mentioned date the amount stated in the preceding clause
has not yet been paid to the CONCESSIONARY through its representative, the
promissory agreement herein shall be annulled.
FIFTH: The final agreement that may be drawn in the event that the option to
acquire rights over the mining lots subject of this promise is exercised, the
following clauses shall be effective, unless it is legalized under different
terms by mutual agreement and with the express consent of the CONCESSIONARY,
only with regard to the form of the juridical act by means of which the rights
over the mining concessions are transferred.
SIXTH: The terms under which the agreement is to be drawn shall be the
following:
"SALES AGREEMENT WITH DOMAIN RESERVE ENTERED INTO BY MRS. MARIA DEL CARMEN
VALENZUELA-BREACH DE CABALLERO, ACTING AS ATTORNEY-IN-FACT OF THE COMPANY
MINERA NAVOJOA, S.A. DE C.V., HEREINAFTER REFERRED TO BY HER NAME OR AS
CONCESSIONARY AND CORPORACION AMERMIN, S.A. DE C.V., HEREIN REPRESENTED BY ITS
ATTORNEY-IN-FACT, MR. RAMIRO TREVIZO-LEDEZMA, HEREINAFTER REFERRED TO BY HIS
NAME OR AS THE BUYER, ACT WHICH IS SUBJECT TO THE FOLLOWING STATEMENTS AND
CLAUSES.
STATEMENTS
A) The CONCESSIONARY declares as follows:
FIRST: That they are the titleholder of the rights derived from the various
Mining Exploitation Titles listed below:
NAME OF LOT GUADALUPE DE LOS REYES
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD AND SILVER
ARE OF LOT 8 HECTARES
TILE NUMBER 172225
NAME OF LOT EL ROSARIO
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD, SILVER, LEAD, COPPER, AND ZINC
ARE OF LOT 14.0000 HECTARES
TITLE NUMBER 166430
NAME OF LOT SWANWICK
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD, SILVER, AND LEAD
ARE OF LOT 70.1316 HECTARES
TITLE NUMBER 166428
NAME OF LOT LAS TRES S.S.S.
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD, SILVER, AND LEAD
ARE OF LOT 19.1908 HECTARES
TITLE NUMBER 166429
NAME OF LOT LAS TRES B.B.B.
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD, SILVER, AND LEAD
ARE OF LOT 23.0010 HECTARES
TITLE NUMBER 166427
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NAME OF LOT EL CARMEN
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD, SILVER, AND LEAD
ARE OF LOT 59.0864 HECTARES
TITLE NUMBER 166426
NAME OF LOT SAN MIGUEL
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD AND SILVER
ARE OF LOT 12.9458 HECTARES
TITLE NUMBER 166401
NAME OF LOT SANTA CLARA
NUMBER OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD, SILVER, AND LEAD
ARE OF LOT 15 HECTARES
TITLE NUMBER 166425
NAME OF LOT SANGRE DE CRISTO
NUMBER OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD, SILVER, AND LEAD
ARE OF LOT 41 HECTARES
TITLE NUMBER 166424
NAME OF LOT EMPALME
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD AND SILVER
ARE OF LOT 6 HECTARES
TITLE NUMBER 166423
NAME OF LOT SAN LUIS
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD, SILVER, AND LEAD
ARE OF LOT 4 HECTARES
TITLE NUMBER 166422
NAME OF LOT SAN JUAN
LOCATION OF LOT GUAZAPARES MUNICIPALITY
STATE OF CHIHUAHUA
SUBSTANCES COVERED GOLD AND SILVER
ARE OF LOT 3 HECTARES
TITLE NUMBER 166402
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SECOND: That on the above-mentioned titles weighs no obligation or lien, they
are not subject to any type of exploration or exploitation agreement or of
option or promise to enter into any of those mining contracts or of any
another nature. She declares that on the rights derived from the titles there
is no lawsuit or controversy with other individuals or with authorities that
could hinder the free exercise of the rights that might be derived from the
exploitation title and that all concessions are grouped in the so-called
AGRUPAMIENTO SAN MIGUEL.
THIRD: That they have complied with work and investments described in the
Exploitation Titles according to the effective date stated therein.
B) The BUYER declares as follows:
1. That they are usually engaged in business activities in general and
specifically investing in the mining field in Mexico.
a) That they have the knowledge, contacts, financial and technical resources
required to carry out the execution of the agreement herein.
FOURTH: Both parties jointly state that it is their own free will to enter
into this agreement, committing themselves to its total compliance, subject to
the following:
CLAUSES
FIRST: COMPANIA MINERA NAVOJOA, S.A. de C.V. (limited liability company)
acting as CONCESSIONARY, represented by its Attorney-in-Fact, Mrs. MARIA DEL
CARMEN VALENZUELA-BREACH DE CABALLERO, sells with DOMAIN RESERVE to
CORPORACION AMERMIN, S.A. DE C.V., represented by its Attorney-in-Fact, RAMIRO
TREVIZO-LEDEZMA, the rights derived from the mining concessions described in
item A), number 1, in the Statements Chapter herein.
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SECOND: The sales price is the amount of US$700,000.00 (SEVEN HUNDRED
THOUSAND DOLLARS AND 00/100 U.S. CY.), sum that will be paid to the BUYER as
follows:
A) The amount of US$300,000.00 (THREE HUNDRED THOUSAND DOLLARS AND 99/100
U.S. CY.) on the date of execution of the agreement herein.
B) The amount of US$100,000.00 (ONE HUNDRED DOLLARS AND 00/100 U.S. CY.)
that is to be paid by the BUYER six (6) months after the date of execution of
the agreement herein.
C) The amount of US$100,000.00 (ONE HUNDRED DOLLARS AND 00/100 U.S. CY.)
that the BUYER is bound to pay twelve (12) months after the execution of the
agreement herein.
D) The amount of US$100,000.00 (ONE HUNDRED DOLLARS AND 00/100 U.S. CY.)
that the BUYER is bound to pay eighteen (18) months after the execution of the
agreement herein.
E) The amount of US$100,000.00 (ONE HUNDRED DOLLARS AND 00/100 U.S. CY.)
that the BUYER is bound to pay twenty-four (24) months after the execution of
the agreement herein.
For compliance purposes regarding agreed payments, both CONTRACTING PARTIES
point out as their address that located at 1301 (one three zero one) Jimenez
Street on business days, which are considered to be from Monday to Friday,
working hours from 9:00 a.m. to 5:00 p.m.
On the date total payment is received on the above-mentioned dates or before
the agreed date if total payment is made in advance, the CONCESSIONARY is
bound to cancel the DOMAIN RESERVE described herein due to payment compliance.
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THIRD: Upon expiration of the terms of the present agreement and in the event
that the BUYER has not incurred in any agreement annulment cause or if the
BUYER has met payment terms according to the amounts described in the
preceding clause, the CONCESSIONARY is bound to assign the rights over the
mining concessions issue of this agreement in favor of the person or persons
that the BUYER assigns. Total expenses generated on account of the transferal
of the rights over the mining concessions through a juridical act instrumented
for such purposes shall be fully paid by the BUYER or by whoever acquires
these rights, holding the CONCESSIONARY free from any payment liability.
Total expenses of these values including Income Tax for which the
CONCESSIONARY may be liable which should be paid by the BUYER on behalf of the
CONCESSIONARY since payments made are free from any liability or lien for the
CONCESSIONARY.
FOURTH: The CONCESSIONARY shall make available to the BUYER the mentioned
mining lots so that they may start exploring and exploiting activities therein
beginning from the date the agreement herein or de juridical act performed for
the transfer of rights over the mining lots is ratified before Notary Public
and after having made the first payment described under the terms of the Third
Clause herein.
FIFTH: The BUYER may willingly WITHDRAW from exploration and exploiting
activities on the mining lots at any time if they deem exploitation of said
lots to be not feasible, in which case any work performed and any improvements
that might have been carried out therein shall remain in benefit of the mining
lots and of the CONCESSIONARY at no charge. Any payments received up to that
date by the CONCESSIONARY shall remain in her power free from payment of any
fiscal charges or other derived from said payments, and the BUYER shall give
the CONCESSIONARY the technical and geological information obtained from any
tests performed during the time the BUYER occupied the mining lots.
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SIXTH: The BUYER is bound to pay for any sort of taxes to maintain in force
the rights over the reference mining lots, as well as to comply at its own
expense and on behalf the CONCESSIONARY the obligations imposed by the Mining
Act and its Regulations for due compliance of said legal dispositions and of
those derived from the exploration and exploitation of the mining lots issue
of the agreement herein.
SEVENTH: Termination of the agreement herein may be as follows:
a) Due to advance termination when the BUYER terminates the agreement herein
giving prior notice to the CONCESSIONARY with at least thirty (30) natural
days in advance. From the date said notice is received and verified, the
obligation to make payment described in the Third Clause herein by the BUYER
shall stop and the mining lots shall be returned to the CONCESSIONARY.
b) Upon conclusion of business, after the BUYER has met its obligations and
has exercised its option to acquire the mining concessions and the obligation
to enter into a juridical act to transfer the mining lots to its name or to in
favor of the individual or company assigned for said purposes. The BUYER
shall notify the CONCESSIONARY within a (thirty) 30-natural day term about the
individual or individuals in whose favor the mining concessions are to be
transferred and about the juridical act that should be legalized for
transferring purposes, for which the BUYER shall be responsible. The sole
obligation of the CONCESSIONARY shall be that of checking and accepting it in
order to comply with this obligation and to proceed to the corresponding
execution.
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c) Due to failure to comply with obligations set forth in the agreement
herein by either the BUYER or the CONCESSIONARY. Main failure to comply is,
on one part, the fact that the CONCESSIONARY does not allow the BUYER to carry
out exploration and exploitation work on the mining lots covered by the mining
concessions and, on the other, the fact that the BUYER does not meet one or
several of the payments for which they are liable, as well as obligations of
both parties derived from the agreement herein.
EIGHTH: Failure to comply with any obligations described in the clauses of
the agreement herein or restatement of annulment causes on the part of the
BUYER shall consequently bind the BUYER to pay for any damage caused from the
date of said failure to comply until the date the mining lots covered by the
mining concessions are returned, regardless of the right of the CONCESSIONARY
to annul the agreement or to terminate it and recover the mining lots.
Payments made for the exploitation of the mining lots shall be deemed as
having been met.
The above is regardless of the fact that advance expiration causes will be
restated as contemplated in articles 1842 (one eight four two) of the Civil
Code in force in the State of Chihuahua.
NINTH: For purposes of recording the existence of annulment and advance
expiration causes of the term granted to the CONCESSIONARY to make payments
and to comply with obligations contained in the agreement herein in addition
to legal accessories, both parties expressly agree that the CONCESSIONARY
shall request the services of a Notary Public or jurisdictional organs at
discretion of the CONCESSIONARY.
TENTH: Both parties agree that after the CONCESSIONARY has recorded the
existence of the annulment or advance expiration cause, they may choose to
exercise the Summary or the Ordinary means to collect payment to their
discretion and to be subject to the competent tribunals of the city of
Chihuahua, regardless of any other tribunal to which they might be entitled
due to their present or future addresses.
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ELEVENTH: Both parties are formally bound to help each other during the life
of the agreement herein or until business has concluded with regard to any
procedure before authorities or individuals that require their intervention
and to mutually back up each other in performing any sort of transaction in
benefit of either of the two parties.
TWELFTH: Any kind of notice that must be given between the parties in
conformity with the agreement herein shall be made legitimately, not allowing
any doubts, in writing and at the address that the parties point out for that
purpose. The parties will inform each other about any notice they receive
from mining authorities no later that the day after receiving it.
THIRTEENTH: Expenses and taxes generated or originated in the future, if
any, derived from the juridical act legalized for the transfer of mining funds
will be at the expense of the BUYER or by the individual or company assigned
by the BUYER, including taxes levied on any profit or income received by the
CONCESSIONARY on account of the agreement herein, and said payment shall be
made by the BUYER or the individual or company assigned by the latter for the
CONCESSIONARY.
FOURTEENTH: In the event of conflict in construing and compliance of the
agreement herein, both parties are expressly subject to the Competent
Tribunals of the city of Chihuahua, State of Chihuahua, expressly forfeiting
territorial or personal competence to which they might be entitled on account
of their address. For all legal effects derived from the agreement herein,
both parties state that their addresses for notification purposes and their
representatives are as follows:
BUYER:
NAME: PENDING AT THE DATE THE AGREEMENT HEREIN WAS DRAWN.
ADDRESS: PENDING AT THE DATE THE AGREEMENT HEREIN WAS DRAWN.
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CONCESSIONARY:
NAME: MARIA DEL CARMEN VALENZUELA BREACH DE CABALLERO, Attorney-at-Law.
ADDRESS: 1301 Jimenez Street (one three zero one), Colonia Obrera, Zip code
31350 (three one three five zero).
DRAWN IN THE CITY OF CHIHUAHUA, STATE OF CHIHUAHUA, ON THE TWELFTH DAY OF MAYO
TWO THOUSAND FIVE. IN WITNESS WHEREOF.
CONCESSIONARY
/s/ Maria Del Carmen Valenzuela
-------------------------------------
(signature)
COMPANIA MINERA NAVOJOA, S.A. DE C.V.
MARIA DEL CARMEN VALENZUELA-
BREACH DE CABALLERO
ATTORNEY-IN-FACT
PROMISSORY BUYER
/s/ Ramiro Trevizo-Ledezma
----------------------------------------
(signature)
CORPORACION AMERMIN, S.A. DE C.V.
RAMIRO TREVIZO-LEDEZMA
ATTORNEY-IN-FACT