Exhibit 10.2
EAGLE BAY RESOURCES N.L.
and
RMMI AUSTRALIA PTY LTD
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JOINT VENTURE HEADS OF AGREEMENT
AUSTRALIAN NICKEL J.V.
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RMMI / EAGLE BAY JOINT VENTURE HEADS OF AGREEMENT
THIS AGREEMENT is dated 6th December 2006
BETWEEN:
EAGLE BAY RESOURCES N.L. (ACN 051 212 429) of
Level 1, 14 Outram St, West Perth WA 6005 ("EBR")
AND
RMMI AUSTRALIA PTY LTD (ACN 122 077 105)
Level 25, 500 Collins Street, Melbourne Vic 3000 ("RMMI")
RECITALS:
A. The parties wish to associate themselves for the purpose of exploration
for sulphide nickel deposits in Australia.
B. The parties now agree to form a joint venture on the terms and conditions
set out in this Agreement.
AGREED as follows
1. INTERPRETATION
1.1 In this Agreement unless the context otherwise requires:
"ASX" means Australian Stock Exchange Limited;
"Commencement Date" means 1st November 2006
"Expert" means an independent expert appointed by the Participants
or, in the absence of agreement, by the President of AusIMM;
"Joint Venture" means the joint venture constituted under clause 2.1
of this Agreement;
"Joint Venture Expenditure" means all Outgoings and the costs of all
Joint Venture Operations including (without limitation) all costs,
expenses and liabilities incurred in connection with the
exploration, development and mining of the Tenements for minerals,
accounted for in accordance with accounting principles accepted in
Australia;
"Joint Venture Interest" means in relation to a Participant:
(a) its interest (from time to time) as tenant in common in the
Joint Venture Property and in all other rights conferred by
this Agreement; and
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(b) its right to take in kind a share of minerals derived from the
Tenements subject to the liabilities and obligations attaching
to the foregoing and imposed by this Agreement;
"Joint Venture Operations" means all activities as are necessary or
desirable in order to implement and give full effect to the
provisions and purposes of this Agreement;
"Joint Venture Property" means all property of whatsoever kind held,
developed, acquired or created by or on behalf of the Participants
for the purpose of the Joint Venture including (without
limitations):
(a) the Tenements;
(b) Mining information; and
(c) minerals, concentrate and ore prior to their being taken in
kind by the Participants;
"Manager" means the Participant appointed to conduct Joint Venture
Operations pursuant to clause 3.1 but reference to the Manager do
not include references to that Participant in any other capacity;
"Mining Act" means the Mining Act 1978 (W.A.) as amended;
"Mining Information" means all technical and other information
including (without limitation) geological, geochemical and
geophysical reports, surveys, mosaics, aerial photographs, samples,
drill core, drill logs, drill pulp, assay results, maps and plans
relating to the Tenements or to Joint Venture Operations, whether in
physical, written or electronic form;
"Operating Committee" means the Operating Committee formed under
clause 4.1 of this Agreement;
"Outgoings" means all rents, rates, survey fees and other fees and
charges under the Mining Act or otherwise in connection with the
Tenements;
"Participants" means EBR and RMMI or their permitted successors and
assigns;
"Parties" means EBR and RMMI or their successors and assigns holding
a joint venture interest;
"Related Body Corporate" means with respect to any Participant a
related body corporate of that Participant within the meaning of the
Corporations Act;
"Tenement Area" means the land over which the relevant Tenements
have been granted.
"Tenements" means any tenements acquired by the Joint Venture,
together with any extensions, renewals, consolidations, replacements
or amendments to those tenements and all rights associated with
those tenements including the right to treat mineral bearing
material located in the tenements.
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1.2 In this Agreement, unless the context requires otherwise:
(a) reference to a recital, clause, schedule, annexure or exhibit
is to a recital, clause, schedule, annexure or exhibit of or
to this Agreement;
(b) a reference to this Agreement or another instrument includes
any variation or replacement of any of them;
(c) a reference to any statute shall include any amendment,
replacement or re-enactment thereof for the time being in
force and any by-laws, statutory instruments, rules,
regulations, notices, orders, directions, consents or
permissions made thereunder and any conditions attaching
thereto;
(d) the singular includes the plural and vice versa;
(e) a reference to any gender includes all genders;
(f) a reference to a person includes a reference to the person's
executors, administrators, substitutes, successors and
permitted assigns;
(g) a covenant, representation or warranty in favour of two or
more persons is for the benefit of them jointly and severally;
(h) a covenant, representation or warranty on the part of two or
more persons binds them jointly and severally; and
(i) a reference to currency is to the currency of Australia.
2. JOINT VENTURE
2.1 The Participants hereby associate in an unincorporated joint venture
for the purpose of exploring and, if warranted, developing and
mining sulphide hosted nickel in Australia.
2.2 The Joint Venture shall commence on the Commencement Date and on
that date the Joint Venture Interests of the Participants are:
EBR 50%
RMMI 50%
The Joint Venture will hire a competent nickel geologist who will
operate out of EBR's offices in West Perth and whose cost will be
borne 50% by the Carr Boyd Joint Venture and then pro rata to the
participants in this Joint Venture so long as the Carr Boyd Joint
Venture remains extant.
2.3 Nothing in this Agreement shall make a Participant a partner of any
other Participant nor, except as expressly provided in this
Agreement, constitute any Participant the agent or representative of
any other Participant or to create any fiduciary relationship
between them.
2.4 No Participant shall have any authority to act on behalf of any
other Participant, except as expressly provided in this Agreement.
Where a
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Participant acts on behalf of another without authority, such
Participant shall indemnify the other from any losses, claims,
damages and liabilities arising out of any such act.
2.5 Each Participant has the right to take in kind and separately
dispose of, in proportion to its Joint Venture Interest, all
minerals produced by the Joint Venture.
2.6 The liabilities of the Participants to each other and to third
parties shall be several in proportion to their respective Joint
Venture Interests from time to time and shall not be either joint or
joint and several. Each Participant hereby indemnifies the other
against any claim or liability incurred by the other in excess of
the other's Joint Venture Interest.
3. MANAGER
3.1 RMMI shall be the Manager and shall be entitled to remain the
Manager (subject to clause 3.2) while it holds a Joint Venture
Interest of 50% or greater.
3.2 The Manager:
(a) may resign on 30 days' notice to the Participants; or
(b) may be removed by resolution of the Operating Committee or if
it commits gross negligence or wilful default; and
upon retirement or removal of the Manager, the Participants shall
appoint a Manager by agreement between them, or, failing this,
by resolution of the Operating Committee.
3.3 The Manager shall prepare programmes and budgets for consideration
by the Operating Committee. Programmes and budgets shall be prepared
for periods each of 6 months duration commencing on 1 September and
1 March.
3.4 The Manager:
(a) shall carry out the Joint Venture activities in accordance
with programmes and budgets approved by the Operating
Committee;
(b) may not exceed an approved budget by more than 15% without the
prior consent of the Operating Committee, except in relation
to emergency expenditure;
(c) shall be responsible for all day to day operations of the
Joint Venture which shall include managing and supervising all
approved programmes and budgets;
(d) shall carry out Joint Venture activities in accordance with
good mining industry practice, with reasonable care, skill and
diligence and in accordance with all applicable laws and
regulations;
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(e) shall promptly carry out the instructions and directions of
the Operating Committee; and
(f) shall maintain complete and accurate books, records and
accounts of all transactions relating to the Joint Venture
which shall be open for inspection and audit by the
Participants.
3.5 The Manager shall furnish concise reports to the Participants, on a
quarterly basis, which shall contain all relevant technical and
financial information concerning the joint venture. The cost of
providing such reports shall be Joint Venture Expenditure.
3.6 All statutory reports concerning the Tenements released by the
Manager shall be provided to the Participants and the costs of
providing such reports shall be Joint Venture Expenditure.
3.7 The Manager shall, on receiving reasonable notice from any of the
Participants, provide that Participant with copies of any relevant
project data, provided that any such report or relevant project data
is provided at the cost of the Participant requesting it.
3.8 The Manager shall not be liable to any Participant for any losses
sustained or liability incurred by the Joint Venture and each
Participant shall be liable to indemnify the Manager in proportion
to their respective Joint Venture Interests in respect of the same
except where any such loss or liability arises as a direct result of
the Manager's wilful misconduct or gross negligence.
3.9 Each Participant appoints the Manager and each of its directors from
time to time (severally) its lawful attorney to sign all forms and
documents and do everything necessary to maintain the Tenements in
good standing and in full force, and to comply with the provisions
of the Mining Act.
4. OPERATING COMMITTEE
4.1 As soon as practicable the Participants shall form and then maintain
a committee which shall meet not less than once in each calendar
quarter unless otherwise agreed.
4.2 Each of the Participants shall be entitled to appoint a
representative as a member of the Operating Committee and to remove
any person so appointed and to appoint another person in their
place. Any appointment or removal is to be effected by notice in
writing to the other Participants.
4.3 The Operating Committee may review and give directions to the
Manager as to Joint Venture Operations and shall consider and
approve (subject to modification or otherwise) the nature and
content of programmes and budgets relating to Joint Venture
Operations as proposed by the Manager.
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4.4 The voting power of each Participant's representative at meetings of
the Operating Committee shall be one vote for each percentage point
of that Participant's Joint Venture Interest as at the date of the
meeting.
4.5 In the event of a deadlock in voting on matters requiring majority
vote:
(a) the Participants (through their respective senior management)
shall meet and in good faith attempt to resolve the deadlock;
(b) while the deadlock continues, operations shall continue at the
same rate as previously; and
(c) after a 3 month period, the decision of whichever Participant
is the Manager shall prevail.
4.6 All matters for decision before the Operating Committee shall
require a majority vote by one or more of the Participants except
for passage of any decision regarding the ceasing of mining
operations that are providing a positive return on investment for
all Participants, which shall require a 75% majority vote of one or
more of the Participants.
4.7 A decision by the Operating Committee will not be effective to amend
the terms of this Agreement.
5. CASH CALLS
5.1 Subject to clause 3.2 (a):
(a) the Manager shall within 30 days after the end of each month,
issue to each Participant a cash call for its share of Joint
Venture Expenditure paid or incurred during the preceding
month;
(b) the Manager may, not more than 30 days prior to the
commencement of any month issue cash calls for estimated costs
which the Manager anticipates will be incurred during that
month;
(c) all cash calls must be paid within 14 days of receipt; and
(d) all Participants shall be liable to contribute to Joint
Venture Expenditure in proportion to their Joint Venture
Interests from time to time.
5.2 A Participant that does not pay a cash call by the due date shall
pay interest thereon at a rate equal to 3% above the Westpac Banking
Corporation Indicator Lending Rate from time to time.
5.3 The Manager shall be entitled to recover moneys owing by a
defaulting party in any court of competent jurisdiction
5.4 If a Participant defaults in the payment of a cash call properly
issued to it and if default continues for more that 30 days, the
other Participants may elect to dilute the Joint Venture Interest of
the defaulting Participant, in which case the defaulting
Participant's Joint Venture
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Interest shall be diluted at the rate of 150% of the rate prescribed
in clause 6.2
6. DILUTION
6.1 The following shall apply in relation to voluntary dilution by a
Participant, which dilution may only occur prior to a Decision to
Mine:
(a) within 21 days after approval by the Operating Committee of a
programme and budget, any Participant may elect not to
contribute to the programme or budget. If a Participant makes
such an election, the other Participant may amend the approved
programmed and budget to take account of the non-contribution;
(b) the Participant that elected not to contribute ("Diluting
Participant") shall have its Joint Venture Interest diluted in
accordance with the dilution formula set out in clause 6.2;
(c) notwithstanding anything in this clause, voluntary dilution is
not permitted in respect of any programme and budget which is
necessary to maintain the Tenements.
6.2 The Joint Venture Interest of a Diluting Participant shall be
diluted and recalculated from time to time in accordance with the
following formula:
New Joint Venture Interest = A x 100
-------
B
Where:
A = the total amount of Joint Venture Expenditure
contributed by the Diluting Participant at the date
of calculation plus the deemed contribution of the
Diluting Participant;
B = the total amount of Joint Venture Expenditure
contributed by the Participants at the date of
calculation, plus the deemed contributions of both
Participants.
For the purposes of the formula, the deemed contribution of
each of EBR and RMMI shall be $300,000
7. CONFIDENTIALITY
7.1 Unless otherwise agreed by the Participants or required by law or
the listing Rules of the ASX, all information obtained in relation
to the Joint Venture and which is not in the public domain shall be
kept confidential and shall not be disclosed by the Participants.
7.2 If required by any Participant, the Manager must give to the
Participants all information the Participant requires to comply with
the Listing Rules of the ASX and the Participants agree that such
information may be given to the ASX for release to the market if
necessary for the
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Participants to comply with the Listing Rules, provided that all
Participants have been given a reasonable period of time, bearing in
mind the circumstances, to comment on the draft announcement to ASX.
8. ASSIGNMENT
8.1 Subject to clause 8.4, any Participant may assign all or any of its
Joint Venture Interest to any related Body Corporate without each
other Participant's consent but subject to the assignee company
agreeing to assign the Joint Venture Interest back to the assignor
in the event that it ceases to fulfil its obligations.
8.2 Subject to clause 8.1, no Participant ("Assigning Participant") may
assign all or any of its Joint Venture Interest unless the Assigning
Participant first offers to assign such interest to the other
Participants ("Non-Assigning Participants") pro rata upon the same
terms and conditions (as determined by clause 8.3) as the proposed
terms and conditions of the assignment to the third party and such
offer has not been accepted by the Non-Assigning Participants within
30 days after the making of the offer.
8.3 For the purposes of clause 8.2, the identity of the proposed third
party assignee, the proposed purchase price and other terms and
conditions upon which the Assigning Participant is prepared to sell
or dispose of all or part of its Joint Venture Interest shall be
furnished to the Non- Assigning Participants at the time of delivery
of the offer and the proposed consideration must be in cash and or
joint venture expenditure or if not in cash or joint venture
expenditure, be of a value to be agreed between the Participants. If
the Participants cannot agree upon such value the matter shall be
determined by an Expert whose decision shall be final.
8.4 Where an assignment is made to a Related Body Corporate or a third
party, such assignment shall have no force or effect whatsoever
until such time as the Related Body Corporate or the third party has
entered into a covenant with the other Participants binding it to
observe and perform all the terms and conditions of this Agreement.
8.5 No Participant shall assign, encumber, part with possession of,
grant any power of attorney over or in any other directly or
indirectly deal with its Joint Venture Interest or any part thereof
(or any right to earn a Joint Venture Interest) save as expressly
permitted by the terms of this Agreement.
8.6 A Participant may create or permit the creation of an encumbrance
over the whole or part of its Joint Venture Interest but only if it
complies with each of the following requirements:
(a) the encumbrance is a mortgage, charge or other recognised form
of security;
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(b) the encumbrance is to secure moneys borrowed for the purpose
of meeting its obligations under this Agreement; and
(c) the person taking the encumbrance executes a chargee's
priority deed in a form reasonably acceptable to the other
Participant, agreeing that the rights of that person under the
encumbrance are subject to the provisions of this Agreement.
9. WITHDRAWAL
9.1 Any Participant may withdraw from the Joint Venture by giving 12
months' notice in writing to the other Participants. Where a budget
has been approved and is relevant to a period remaining of less than
12 months, then notice may be given with such lesser time notice
period.
9.2 Upon a withdrawal or deemed withdrawal from the Joint Venture, then,
unless otherwise provided in this Agreement, the withdrawing
Participant shall thereupon assign to the other Participants pro
rata all its Joint Venture Interest for nil consideration.
9.3 Any withdrawal pursuant to this clause 9 shall be without prejudice
to any rights or obligations of the Participants arising prior to
the withdrawal.
10. HOLDING AND TRANSFER OF JOINT VENTURE PROPERTY
10.1 The Joint Venture Property shall be held by the Participant or
Participants for the time being having legal title thereto upon
trust for the Participants as tenants in common in undivided shares
in accordance with their respective Joint Venture Interests.
10.2 Any Participant having a beneficial interest in Joint Venture
Property may at any time and at its expense require a transfer from
the other Participants, of the legal title to that beneficial
interest.
10.3 The transfer of any interest in the Tenements pursuant to this
Agreement is subject to any necessary consent or approval under the
Mining Act or under any other law or regulation and the Participants
shall use all reasonable efforts to promptly obtain all necessary
consents and approvals.
11. CAVEATS
11.1 Any Participant shall be entitled to lodge such caveats pursuant to
the Mining Act as it thinks fit to protect its beneficial interest
in the Tenements from time to time.
12. FURTHER ASSURANCES
12.1 The Participants shall sign all such documents, forms and notices
and do all such things as may be reasonably necessary to give effect
to the terms of this Agreement.
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13. NOTICES
13.1 A notice approval, consent or other communication in connection with
this Agreement:
(a) must be in writing;
(b) must be marked for the attention of the person specified in
clause 13.2 or, if a Participant notifies another person, then
to that person; and
(c) must be left at the address of the addressee, or sent by
prepaid ordinary post (airmail if posted to or from a place
outside Australia) to the address of the addressee or sent by
facsimile to the facsimile number of the addressee which is
specified in clause 13.2 or, if the addressee notifies another
address or facsimile number, then to that address of facsimile
number.
13.2 The address and facsimile number of, and specified person for, each
Participant is:
(a) EBR
Attention: Managing Director
Address: 1st Floor, 14 Outram St
West Perth WA 6872
Facsimile: (08) 9481 3330
(b) RMMI
Attention: Managing Director
Address: 25th Floor, 500 Collins St
Melbourne Vic 3000
Facsimile: (03) 8610 4799
13.3 A notice, approval, consent or other communication takes effect from
the time it is received unless a later time is specified in it. A
posted letter or facsimile is taken to be received:
(a) in the case of a posted letter, on the third (seventh, if
posted to or from a place outside Australia) Business Day
after posting; and
(b) in the case of facsimile, on production, by the machine from
which the facsimile was sent, of a transmission report which
indicates that the facsimile was sent in its entirety and in
an error free form to the facsimile number of the recipient
notified for the purpose of this clause.
14. NO PARTITION
14.1 Unless otherwise agreed between the Participants, no Participant and
no person claiming through a Participant shall during the life of
the Joint
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Venture seek partition, whether by any court or otherwise howsoever
of any Joint Venture Property.
15. FORCE MAJEURE
15.1 In this Agreement, Force Majeure means:
(a) declared or undeclared war, revolution, act of public enemies
riots or civil commotions;
(b) strike, lockout, stoppage or restraint of labour or other
industrial disputes;
(c) fire or explosion, Act of God, flood, storm or washaway, in
each case which could not have been reasonably foreseen or
with due diligence avoided;
(d) act or restraint of any Government, Governmental agency or
authority, including expropriation, prohibition, intervention,
direction, embargo, or regulation so that the ability of a
party to perform its obligations is substantially adversely
affected; and
(e) any other cause which by the exercise of reasonable foresight
or due diligence the party is unable to prevent or overcome.
15.2 A party shall be excused from the performance of an obligation under
this Agreement, other than an obligation to pay money, to the extent
and for so long as the failure is caused by Force Majeure.
15.3 A party claiming to be excused from performance of an obligation
shall:
(a) within 48 hours give notice to the other party of the event of
Force Majeure relied on; and
(b) use its best endeavours to resume compliance with the
obligation as soon as reasonably possible but no party shall
be obliged to settle an industrial dispute on terms not
acceptable to it.
15.4 If a party is excused from performance of an obligation by reason of
Force Majeure, then the time for performance by each party of its
obligations under this Agreement shall be extended by such time as
is reasonable in the circumstances.
16. FORMAL JOINT VENTURE AGREEMENT
16.1 If requested by any Participant, the Manager shall prepare a formal
joint venture agreement setting out the arrangements and commitments
herein contained together with such provisions as are normally found
in joint venture agreements and are not inconsistent with this
Agreement will be negotiated in good faith between the Participants
but until such a formal agreement is executed the Participants shall
be bound by the provisions of this Agreement. If the Participants
fail to reach agreement
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on any matter, either Participant may require the matter to be
referred to an Expert whose decision shall be final and binding.
17. COSTS
24.1 Each Participant shall be responsible for its own legal costs in
connection with the preparation of this Agreement.
18. GST
18.1 Definitions
For the purposes of this clause 18:
"Consideration" has the same meaning as in the GST Act but does not
include the GST amount payable;
"GST" means a tax, import or duty on goods or services or other
things introduced by the Commonwealth of Australia or any State of
Australia or any similar tax;
"GST Act" means a New Tax System (Goods and Services Tax) Act 1999;
and
"Supply" has the same meaning as in section 9.10 of the GST Act.
18.2 GST Component
Any Supply pursuant to or arising out of this Agreement and the
Joint Venture shall be upon the basis that the Consideration for
that Supply is increased by the amount of GST payable.
18.3 GST Obligation
The Participants and the Manager shall duly comply with all GST
obligations.
18.4 GST Joint Venture
The Participants will in good faith consider taking action to
register the Joint Venture as a "GST Joint Venture".
19. GOVERNING LAW
19.1 This Agreement shall be governed by and construed in accordance with
the laws of the State of Western Australia and the Participants
agree to submit to the jurisdiction of the courts of that State.
20. APPLICATION FOR TENEMENT - AREA OF INTEREST
20.1 The Participants acknowledge that any mineral tenement targeting
nickel sulphide acquired by any party to this agreement within
Western Australia, other than the Carr Boyd Joint Venture tenements
and
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related area of interest, shall firstly be offered at no cost to the
Joint Venture partners pro rata and if not accepted, shall remain
with the acquirer.
Executed by the Participants as an Agreement.
EXECUTED for and on behalf of )
EAGLE BAY RESOURCES N.L. )
/s/ A. Rechner
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Director
A. RECHNER
______________________
Print name
EXECUTED for and on behalf of )
RMMI AUSTRALIA PTY LTD )
/s/ M.A. Muzzin
- ----------------------
Director
M.A. MUZZIN
______________________
Print name
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