U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
HUDSON VENTURES INC.
---------------------------
(Exact name of Registrant as specified in its charter)
NEVADA 1040 APPLIED FOR
- - ------------ ------------------------- -------------------
(State or other Standard Industrial (IRS Employer
jurisdiction of Classification Identification
incorporation or Number)
organization)
DANA NEILL UPTON
444 EAST COLUMBIA STREET
NEW WESTMINSTER,
BRITISH COLUMBIA, CANADA V3L 3W9
- - ------------------------ -------
(Name and address of principal (Zip Code)
executive offices)
Registrant's telephone number,
including area code: (604)506-8301
Fax: (604)519-1681
--------------
Approximate date of
commencement of proposed
sale to the public: as soon as practicable after
the effective date of this
Registration Statement.
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |__|
If delivery of the prospectus is expected to be made pursuant to Rule
434, check the following. |__|
CALCULATION OF REGISTRATION FEE
- - ----------------------------------------------------------------------
TITLE OF EACH PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES OFFERING AGGREGATE AMOUNT OF
TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE (1) PRICE (2) FEE (2)
- - ----------------------------------------------------------------------
Common Stock 1,587,000 shares $0.50 $793,500.00 $73.00
- - ----------------------------------------------------------------------
(1) Based on the last sales price on July 8, 2002
(2) Estimated solely for the purpose of calculating the registration
fee in accordance with Rule 457 under the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES
THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL
THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.
Agent for Service of Process:
Nevada Agency and Trust
50 Liberty Street Suite 880
Reno Nevada, USA 89501
SUBJECT TO COMPLETION, Dated August 28, 2002
PROSPECTUS
HUDSON VENTURES INC.
1,587,000 SHARES
COMMON STOCK
----------------
The selling shareholders named in this prospectus are offering all of
our shares of common stock offered through this prospectus.
Hudson Ventures Inc. will not receive any proceeds from this
offering.
Our common stock is presently not traded on any market or securities
exchange.
----------------
The purchase of the securities offered through this prospectus
involves a high degree of risk. See section entitled "Risk Factors"
on pages 5 - 9.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities
or passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
----------------
The Date Of This Prospectus Is: August 28,2002
Table Of Contents
PAGE
Summary ....................................................... 5
Risk Factors .................................................. 6
Risks Related To Our Financial Condition and Business Model
- - -----------------------------------------------------------
- If we do not obtain additional financing, our business
will fail ................................................ 6
- If we do not complete the required option payments and
capital expenditure requirements mandated in our option,
we will lose our interests in the Wheaton River Property and
McConnell River Property our business may fail .............6
- Because we have not commenced business operations, we face
a high risk of business failure .......................... 6
- Because of the speculative nature of exploration of mining
properties, there is substantial risk that this business
will fail ................................................ 6
- Because of the inherent dangers involved in mineral
exploration, there is a risk that we may incur liability or
damages as we conduct our business ....................... 7
- Even if we discover commercial reserves of precious metals
on our optioned mineral properties, we may not be able to
successfully obtain commercial production ................ 7
- We need to continue as a going concern if our business is
to succeed ............................................... 7
Risks Related To Our Market And Strategy
- - ----------------------------------------
- If we do not obtain clear title to the mining properties,
our business may fail .................................... 7
Risks Related To Legal Uncertainty
- - ----------------------------------
- If we become subject to burdensome government regulation
or other legal uncertainties, our business will be
negatively effected ...................................... 7
Risks Related To This Offering
- - ------------------------------
- Because our Directors, own 49.6% of our
outstanding stock, they will control and make corporate
decisions that may be disadvantageous to other minority
stockholders ............................................. 8
- Because our president has other business interests,
he may not be able or willing to devote a sufficient
amount of time to our business operations, causing our
business to fail ......................................... 8
- Because management has only limited experience in mineral
exploration, the business has a higher risk of failure ... 8
- If a market for our common stock does not develop,
shareholders may be unable to sell their shares .......... 8
- If a market for our common stock develops, our stock
price may be volatile .................................... 9
- If the selling shareholders sell a large number of
shares all at once or in blocks, the market price of our
shares would most likely decline ......................... 9
- A purchaser is purchasing penny stock which limits the
sell the ability to stock ................................ 9
Use of Proceeds ............................................... 10
Determination of Offering Price ............................... 10
Dilution ...................................................... 10
Selling Shareholders .......................................... 10
Plan of Distribution .......................................... 13
Legal Proceedings ............................................. 15
Directors, Executive Officers, Promoters and Control Persons .. 16
Security Ownership of Certain Beneficial Owners and Management 17
Description of Securities ..................................... 18
Interest of Named Experts and Counsel ......................... 19
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities .................................... 19
Organization Within Last Five Years ........................... 20
Description of Business ....................................... 20
Plan of Operations ............................................ 25
Description of Property ....................................... 26
Certain Relationships and Related Transactions ................ 27
Market for Common Equity and Related Stockholder Matters ...... 27
Executive Compensation ........................................ 28
Financial Statements .......................................... 30
Changes in and Disagreements with Accountants ................. 31
Available Information ......................................... 31
Until ______, all dealers that effect transactions in these
securities whether or not participating in this offering, may be
required to deliver a prospectus. This is in addition to the dealer'
obligation to deliver a prospectus when acting as underwriters and
with respect to their unsold allotments or subscriptions.
Summary
Hudson Ventures Inc.
We are in the business of mineral exploration; yet to date, we have
not conducted any exploration activities. We have obtained an option
to acquire a 90% interest in two mineral claims located in the Whitehorse
and Watson Lake Mining Districts, Yukon Territory, Canada. We refer to
these mineral claims as the Wheaton River Property and the McConnell River
Property. These options are exercisable by us completing further cash
payments to the optionor and by completing minimum required exploration
expenditures on the Wheaton River and McConnell River Properties.
Our objective is to conduct mineral exploration activities on the
Wheaton River Property and the McConnell River Property in order to assess
whether these claims possess commercially exploitable reserves of gold and
or silver. We have not, as yet, identified any commercially exploitable
reserves. Our proposed exploration program is designed to search for
commercially exploitable deposits.
We were incorporated on November 30, 2001 under the laws of the state of
Nevada. Our principal offices are located at 444 East Columbia Street, New
Westminster, British Columbia, Canada.
The Offering
Securities Being Offered Up to 1,587,000 shares of common stock.
The offering price will be determined by
market factors and the independent
decisions of the selling shareholders.
Offering Price We will not determine the offering price.
The offering price will be determined by
market factors and the independent
decisions of the selling shareholders.
Terms of the Offering The selling shareholders will determine
when and how they will sell the common
stock offered in this prospectus.
Termination of the Offering The offering will conclude when all of the
1,587,000 shares of common stock have been
sold, the shares no longer need to be
registered to be sold or we decide to
terminate the registration of shares.
Securities Issued
And to be Issued 3,087,000 shares of our common stock are
issued and outstanding as of the date of
this prospectus. All of the common stock
to be sold under this prospectus will be
sold by existing shareholders.
Use of Proceeds We will not receive any proceeds from the
sale of the common stock by the selling
shareholders.
Risk Factors
An investment in our common stock involves a high degree of risk.
You should carefully consider the risks described below and the other
information in this prospectus before investing in our common stock.
If any of the following risks occur, our business, operating results
and financial condition could be seriously harmed. The trading price
of our common stock could decline due to any of these risks, and you
may lose all or part of your investment.
Risks Related To Our Financial Condition And Business Model
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.
Our current operating funds are less than necessary to complete the
exploration of the optioned mineral claims, and therefore we will
need to obtain additional financing in order to complete our business
plan. As of July 31, 2002, we had cash in the amount of $28,181.00. We
currently do not have any operations and we have no income. Our business
plan calls for significant expenses in connection with the exploration of
our optioned mineral claims. While we have sufficient funds to carry out
phase one of the recommended exploration program on the Wheaton River
Property, we will require additional financing in order to complete the
full-recommended exploration program. We will also require additional
financing if the costs of the exploration of our optioned mineral claims
are greater than anticipated. We will require additional financing to
sustain our business operations if we are not successful in earning
revenues once exploration is complete. We do not currently have any
arrangements for financing and we can provide no assurance to investors
that we will be able to find such financing if required. Obtaining
additional financing would be subject to a number of
factors, including the market prices for gold and silver, investor
acceptance of our property, and investor sentiment. These factors may make
the timing, amount, terms or conditions of additional financing unavailable
to us.
The most likely source of future funds presently available to us is
through the sale of equity capital. Any sale of share capital will
result in dilution to existing shareholders. The only other
anticipated alternative for the financing of further exploration
would be the offering by us of an interest in our properties to be
earned by another party or parties carrying out further exploration
thereof, which is not presently contemplated.
IF WE DO NOT COMPLETE THE REQUIRED OPTION PAYMENTS AND CAPITAL EXPENDITURE
REQUIREMENTS MANDATED IN OUR OPTION AGREEMENT, WE WILL LOOSE OUR INTEREST
IN THE WHEATON RIVER PROPERTY AND MCCONNELL RIVER PROPERTY AND OUR BUSINESS
WILL FAIL.
We are obligated to make additional option payments and incur
exploration expenditures on the optioned mineral claims in order to
exercise the option and obtain a 90% interest in the Wheaton River Property
and the McConnell River Property. We must incur exploration expenditures in
the amount of $195,000 on the Wheaton River Property and $25,000 on the
McConnell River Property in order to exercise these options. While our
existing cash reserves are sufficient to enable us to complete phase one of
the geological exploration program recommended on the Wheaton River
Property, we will require substantial additional capital to fund the
continued exploration of our optioned mineral claims and exercise the
option. If we do not make the additional option payments or meet the
exploration expenditures required by the option agreement, we will forfeit
our interest in the optioned mineral claims and will have no interest in
the optioned mineral claims. We have no agreements for additional
financing and we can provide no assurance to investors that additional
funding will be available to us on acceptable terms, or at all, to continue
operations, to fund new business opportunities or to execute our business
plan. If we lose our interest in the optioned mineral claims, then there is
a substantial risk that our business will fail.
BECAUSE WE HAVE NOT COMMENCED BUSINESS OPERATIONS, WE FACE A HIGH
RISK OF
BUSINESS FAILURE.
We have not begun the initial stages of exploration of our
optioned mineral claim, and thus have no way to evaluate the
likelihood that we will be able to operate the business successfully.
We were incorporated on November 30, 2001 and to date have been
involved primarily in organizational activities and the acquisition
of the optioned mineral claims. We have not earned any revenues as of
the date of this prospectus. Potential investors should be aware of
the difficulties normally encountered by new mineral exploration
companies and the high rate of failure of such enterprises. The
likelihood of success must be considered in light of the problems,
expenses, difficulties, complications and delays encountered in
connection with the exploration of the mineral properties that we
plan to undertake. These potential problems include, but are not
limited to, unanticipated problems relating to exploration, and
additional costs and expenses that may exceed current estimates.
Prior to completion of our exploration stage, we anticipate that we
will incur increased operating expenses without realizing any
revenues. We therefore expect to incur significant losses into the
foreseeable future. We recognize that if we are unable to generate
significant revenues from the exploration of our optioned mineral
claim and the production of minerals thereon, if any, we will not be
able to earn profits or continue operations.
There is no history upon which to base any assumption as to the
likelihood that we will prove successful, and we can provide
investors with no assurance that we will generate any operating
revenues or ever achieve profitable operations. If we are
unsuccessful in addressing these risks, our business will most likely
fail.
BECAUSE OF THE SPECULATIVE NATURE OF THE EXPLORATION OF MINING PROPERTIES,
THERE IS A SUBSTANTIAL RISK THAT NO COMMERCIALLY EXPLOITABLE MINERALS
WILL BE FOUND AND THE BUSINESS WILL FAIL.
The search for valuable minerals as a business is extremely risky. We
can provide investors with no assurance that the mineral claims that
we have optioned contain commercially exploitable reserves of gold and
silver. Exploration for minerals is a speculative venture necessarily
involving substantial risk. The expenditures to be made by us in the
exploration of the optioned mineral properties may not result in the
discovery of commercial quantities of ore.
Problems such as unusual or unexpected formations and other conditions are
involved in mineral exploration and often result in unsuccessful
exploration efforts. In such a case, we would be unable to complete
our business plan.
BECAUSE OF THE INHERENT DANGERS INVOLVED IN MINERAL EXPLORATION,
THERE IS A RISK THAT WE MAY INCUR LIABILITY OR DAMAGES AS WE
CONDUCTOUR BUSINESS.
The search for valuable minerals involves numerous hazards. As a
result, we may become subject to liability for such hazards,
including pollution, cave-ins and other hazards against which we
cannot insure or against which we may elect not to insure. The
payment of such liabilities may have a material adverse effect on our
financial position.
EVEN IF WE DISCOVER COMMERCIAL RESERVES OF PRESCIOUS METALSON OR
OPTIONED MINERAL PROPERTIES, WE MAY NOT BE ABLE TO OBTAIN COMMERCIAL
PRODUCTION.
The optioned mineral properties do not contain any known bodies of
ore. If our exploration programs are successful in establishing ore
of commercial tonnage and grade, we will require additional funds in
order to place the Wheaton River Property and the McConnell River Property
into commercial production. At this time we can provide investors with no
assurance that we will be able to obtain such financing. We need to
continue as a going concern if our business is to succeed.
The Independent Auditor's Report to Hudson Ventures Inc. audited
financial statements for the period ended July 31, 2002, indicates that
there are a number of factors that raise substantial doubt about the
ability of Hudson Ventures Inc. to continue as a going concern. Such
factors identified in the report are: Hudson Ventures Inc. is in a net loss
position; Hudson Ventures Inc. has not obtained profitable operations; and
Hudson Ventures Inc. is dependent upon obtaining adequate financing. If
Hudson Ventures Inc. is not able to continue as a going concern, it is
likely investors will lose their investments.
Risks Related To Our Market And Strategy
IF WE DO NOT OBTAIN CLEAR TITLE TO THE MINING PROPERTIES, OUR BUSINESS
MAY FAIL.
While we have obtained geological reports with respect to the
optioned mineral properties, this should not be construed as a guarantee of
title. The properties may be subject to prior unregistered agreements or
transfers or native land claims, and title may be affected by undetected
defects. Our optioned mining properties have not been surveyed and
therefore, the precise locations and areas of the properties may be in
doubt.
Risks Related To Legal Uncertainty
IF WE BECOME SUBJECT TO BURDENSOME GOVERNMENT REGULATIONS OR OTHER LEGAL
UNCERTAINTIES, OUR BUSINESS WILL BE NEGATIVELY AFFECTED.
There are several governmental regulations that materially restrict
the use of ore. Under the Yukon Courts Mining Act of Parliament of 1921,
to engage in certain types of exploration will require work permits, the
posting of bonds, and the performance of remediation work for any
physical disturbance to the land.
Also, to operate a working mine, the Environmental Regulations Act and
Inland Water Act may require an environmental review process.
In addition, the legal and regulatory environment that pertains to
the exploration of ore is uncertain and may change. Uncertainty and
new regulations could increase our costs of doing business and
prevent us from exploring for ore deposits. The growth of demand for
ore may also be significantly slowed. This could delay growth in
potential demand for and limit our ability to generate revenues. In
addition to new laws and regulations being adopted, existing laws may
be applied to mining that have not as yet been applied. These new
laws may increase our cost of doing business with the result that our
financial condition and operating results may be harmed.
Risks Related To This Offering
BECAUSE OUR DIRECTORS OWN 48.60% OF OUR OUTSTANDING COMMON STOCK,
THEY WILL MAKE AND CONTROL CORPORATE DECISIONS THAT MAY BE
DISADVANTAGES TO OTHER MINORITY SHAREHOLDERS.
Mr. Dana Upton , a director and President, owns approximately 24.30%of the
outstanding shares of our common stock. Accordingly, he will have a
significant influence in determining the outcome of all corporate
transactions or other matters, including mergers, consolidations and the
sale of all or substantially all of our assets, and also the power to
prevent or cause a change in control. The interests of Mr. Upton may differ
from the interests of the other stockholders and thus result in corporate
decisions that are disadvantageous to other shareholders.
BECAUSE OR PRESIDENT HAS OTHER BUSINESS INTERESTS, HE MAY NOT BE ABLE
OR
WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS
OPERATIONS,CAUSING OUR BUSINESS TO FAIL.
Our president, Mr. Upton is presently required to spend only 25% of
his business time on business management services for our company.
While Mr. Upton presently possesses adequate time to attend to our
interests, it is possible that the demands on Mr. Upton from his
other obligations could increase with the result that he would no
longer be able to devote sufficient time to the management of our
business. In addition, Mr. Upton may not possess sufficient time
for our business if the demands of managing our business increased
substantially beyond current levels.
BECAUSE MANAGEMENT HAS ONLY LIMITED EXPERIENCE IN MINERAL
EXPLORATION, THE BUSINESS HAS A HIGHER RISK OF FAILURE.
Our management has only limited experience in mineral exploration. As
a result of this inexperience, there is a higher risk of our being
unable to complete our business plan in the exploration and
exploitation of our optioned mineral property. If a market for our common
stock does not develop, shareholders may be unable to sell their shares.
There is currently no market for our common stock and we can provide no
assurance that a market will develop. We currently plan to apply for
listing of our common stock on the NASD over the counter bulletin board
upon the effectiveness of the registration statement of which this
prospectus forms a part. However, we can provide investors with no
assurance that our shares will be traded on the bulletin board or, if
traded, that a public market will materialize. If no market is ever
developed for our shares, it will be difficult for shareholders to sell
their stock. In such a case, shareholders may find that they are unable
to achieve benefits from their investment.
If a market for our common stock develops, our stock price may be
volatile.
If a market for our common stock develops, we anticipate that the
market price of our common stock will be subject to wide fluctuations
in response to several factors, including:
(1) actual or anticipated variations in our results of operations;
(2) our ability or inability to generate new revenues;
(3) increased competition; and
(4) conditions and trends in the mining industry.
Further, if our common stock is traded on the NASD over the counter
bulletin board, our stock price may be impacted by factors that are
unrelated or disproportionate to our operating performance. These
market fluctuations, as well as general economic, political and
market conditions, such as recessions, interest rates or
international currency fluctuations may adversely affect the market
price of our common stock.
If the selling shareholders sell a large number of shares all at once
or in blocks, the market price of our shares would most likely decline.
The selling shareholders are offering 1,587,000 shares of our common
stock through this prospectus. The selling shareholders are not
restricted in the price they can sell the common stock. Our common
stock is presently not traded on any market or securities exchange,
but should a market develop, shares sold at a price below the current
market price at which the common stock is trading will cause that
market price to decline. Moreover, the offer or sale of a large
numbers of shares at any price may cause the market price to fall.
The outstanding shares of common stock covered by this prospectus
represents approximately 51.60% of the common shares outstanding as of the
date of this prospectus.
A purchaser is purchasing penny stock which limits the ability to sell
the stock.
The shares offered by this prospectus constitute penny stock under
the Securities and Exchange Act. The shares will remain penny stock
for the foreseeable future. The classification of penny stock makes
it more difficult for a broker-dealer to sell the stock into a
secondary market, which makes it more difficult for a purchaser to
liquidate his or her investment. Any broker-dealer engaged by the
purchaser for the purpose of selling his or her shares in
Hudson Ventures Inc. will be subject to rules 15g-1 through 15g-10
of the Securities and Exchange Act. Rather than creating a need to
comply with those rules, some broker-dealers will refuse to attempt
to sell penny stock.
Forward-Looking Statements
This prospectus contains forward-looking statements that involve
risks and uncertainties. We use words such as anticipate, believe,
plan, expect, future, intend and similar expressions to identify such
forward-looking statements. You should not place too much reliance
on these forward-looking statements. Our actual results are most
likely to differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced
by us described in the this Risk Factors section and elsewhere in this
prospectus.
Use Of Proceeds
We will not receive any proceeds from the sale of the common stock
offered through this prospectus by the selling shareholders.
Determination Of Offering Price
We will not determine the offering price of the common stock. The
offering price will be determined by market factors and the
independent decisions of the selling shareholders.
Dilution
The common stock to be sold by the selling shareholders is common
stock that is currently issued and outstanding. Accordingly, there
will be no dilution to our existing shareholders.
Selling Shareholders
The selling shareholders named in this prospectus are offering all of
the 1,587,000 shares of common stock offered through this prospectus.
These shares were acquired from us in a private placement that was
exempt from registration under Regulation S of the Securities Act of
1933.
The following table provides as of July 31, 2002, information
regarding the beneficial ownership of our common stock held by each
of the selling shareholders, including:
1. the number of shares owned by each prior to this offering;
2. the total number of shares that are to be offered for each;
3. the total number of shares that will be owned by each upon
completion of the offering; and
4. the percentage owned by each upon completion of the offering.
Total Number
Of Shares To Total Shares Percentage of
Be Offered For to Be Owned Shares owned
Name Of Shares Owned Selling Upon Upon
Selling Prior To This Shareholders Completion Of Completion of
Stockholder Offering Account This Offering This Offering
IKKEE BATTLE 100,000 100,000 Nil Nil
39-9101 FORESTGROVE
BURNABY BC,
CANADA
STEVE BEKROPOULOS 100,000 100,000 Nil Nil
2833-40TH STREET SW
CALGARY ALBERTA,
CANADA
STUART BLAIR 3,000 3,000 Nil Nil
212 DEERCROFT
PLACE SE
CALGARY ALBERTA,
CANADA
Table is continued from page 11
Total Number
Of Shares To Total Shares Percent
Be Offered For Be Owned Owned Upon
Name Of Shares Owned Selling Upon Completion
Selling Prior To This Shareholders Completion Of Of This
Stockholder Offering Account This Offering Offering
________________________________________________________________________
ROY BUXBAUM 150,000 150,000 Nil Nil
1838 SHORE CRESCENT
ABBOTSFORD BC,
CANADA
REY CHATEL 1,000 1,000 Nil Nil
3-2035 BOUCHERIE
ROAD
WESTBANK BC
CANADA
DANBY FINANCIAL 500 500 Nil Nil
MANAGEMENT CORP.
ROBERT DANVERS
444 E. COLUMBIA
STREET
NEW WESTMINSTER
BC, CANADA
LEIGH ELLIOTT 100,000 100,000 Nil Nil
121 DURHAM STREET
NEW WESTMINSTER BC,
CANADA
FARLINE
INVESTMENT CORP. 150,000 150,000 Nil Nil
WILLIAM INY
3408 WEST 28TH AVENUE
VANCOUVER BC
FOX CREEK 3,000 3,000 Nil Nil
INVESTMENTS
ROB REUKL
PO BOX 1185
MANITOWADGE
ONTARIO, CANADA
GORDON FULLER 500 500 Nil Nil
6-929-42ND AVENUE
CALGARY ALBERTA,
CANADA
VERN GERLITZ 34,000 34,000 Nil Nil
604-734-7TH
AVENUE SW
CALGARY ALBERTA,
CANADA
Table is continued from page 12
Total Number
Of Shares To Total Shares Percent
Be Offered For Owned Upon Owned Upon
Name Of Shares Owned Selling Completion Completion
Selling Prior To This Shareholders of this Of This
Stockholder Offering Account Offering Offering
HARVEY GREEN 3,000 3,000 Nil Nil
3440 GLENCOE ROAD
WESTBANK BC,
CANADA
BRENDA HANSON 500 500 Nil Nil
543 EAST COLUMBIA
STREET
NEW WESTMINSTER
BC, CANADA
WAYNE HANSON 500 500 Nil Nil
543 EAST COLUMBIA
STREET
NEW WESTMINSTER
BC, CANADA
COLE HENRY 100,000 100,000 Nil Nil
122 CEDARWOOD DRIVE
PORT MOODY BC,
CANADA
MIKE IVERSON 500 500 Nil Nil
24549-53RD AVENUE
LANGLEY BC, CANADA
SUSAN IVERSON 500 500 Nil NiL
24549-53RD AVENUE
LANGLEY BC, CANADA
MICHAEL KERSTER 150,000 150,000 Nil Nil
1156 WEST SHORE DRIVE
MISSISSAUGA ONTARIO,
CANADA
KENNEDY KERSTER 150,000 150,000 Nil Nil
704-6TH STREET, SUITE 6
NEW WESTMINSTER BC,
CANADA
LANCE LARSEN 500 500 Nil Nil
254-16 MIDLAKE
BOULEVARD SE
CALGARY ALBERTA,
CANADA
RYAN LONGE 500 500 Nil NiL
3-2935 BOUCHERIE
ROAD
WESTBANK BC,
CANADA
Table is continued from page 13
Total Number
Of Shares To Total Shares Percentage
Be Offered For Owned Owned Upon
Name Of Shares Owned Selling Upon Completion
Selling Prior To This Shareholders Completion Of Of This
Stockholder Offering Account This Offering Offering
PAMELA LUKOWICH 3,000 3,000 Nil Nil
5 HAWKBURG
PLACE NW
CALGARY ALBERTA,
CANADA
JUDY LUKOWICH 3,000 3,000 Nil Nil
5 HAWKBURG
PLACE NW
CALGARY ALBERTA
CANADA
LYLE NASH 3,000 3,000 Nil Nil
1006-5TH STREET WEST
HIGH RIVER ALBERTA,
CANADA
RON NITTRITZ 500 500 NiL Nil
8926 SHEHERD WAY
DELTA BC, CANADA
MICHAEL PATTERSON 140,000 140,000 Nil Nil
608 BOSWORTH ST
COQUITLAM BC,
CANADA
DON PIDSKALNEY 3,000 3,000 Nil Nil
716 BARTLETT DRIVE
PENTICTION BC,
CANADA
LAURA PIDSKALNEY 3,000 3,000 Nil Nil
716 BARTLETT DRIVE
PENTICTION BC,
CANADA
JAMES ROMANO 150,000 150,000 Nil Nil
5719 GRANLEY DRIVE
WEST VANCOUVER BC,
CANADA
LYNN SEVERTSON 3,000 3,000 Nil Nil
195 COVINGTON
CLOSE NE
CALGARY ALBERTA,
CANADA
JILL SHARP 70,000 70,000 Nil Nil
13214 KETCH COURT
COQUITLAM BC,
CANADA
Table is continued from page 14
Total Number
Of Shares To Total Shares Percentage
Be Offered For Owned Owned Upon
Name Of Shares Owned Selling Upon Completion
Selling Prior To This Shareholders Completion Of Of This
Stockholder Offering Account This Offering Offering
EDWARD SYLVAN 150,000 150,000 Nil Nil
208-321 RAILWAY STREET
VANCOUVER BC
NOLA TOMPKINS 500 500 Nil Nil
4424 MARINE DRIVE
WEST VANCOUVER
BC, CANADA
GEORGE UPTON 500 500 Nil Nil
1795 RUFUS DRIVE
NORTH VANCOUVER
BC, CANADA
SARAH UPTON 500 500 Nil Nil
1795 RUFUS DRIVE
NORTH VANCOUVER
BC, CANADA
ERNEST ZACHER 3,000 3,000 Nil NIL
267 CANTERVILLE
DRIVE SW
CALGARY ALBERTA,
CANADA
MICHAEL ZACHER 3,000 3,000 Nil Nil
2304-7451 SPRINGBANK
BOULEVARD SW
CALGARY ALBERTA,
CANADA
385321 ALBERTA 3,000 3,000 Nil NiL
LTD.
KEITH HAMPTON
2009-39th AVENUE
NE CALGARY
ALBERTA, CANADA
The named party beneficially owns and has sole voting and investment
power over all shares or rights to these shares. The numbers in this
table assume that none of the selling shareholders sells shares of
common stock not being offered in this prospectus or purchases
additional shares of common stock, and assumes that all shares
offered are sold. The percentages are based on 3,087,000 shares of
common stock outstanding on July 31,2002.
To our knowledge, none of the selling shareholders
(1) has had a material relationship with us other than as a
shareholder at any time within the past three years;
with the exception of Sarah And George Upton, they are the
daughter and son of our President Dana Upton.
(2) has ever been one of our officers or directors.
Plan Of Distribution
The selling shareholders may sell some or all of their common stock
in one or more transactions, including block transactions:
1. On such public markets or exchanges as the common stock may from
time to time be trading;
2. In privately negotiated transactions;
3. Through the writing of options on the common stock;
4. In short sales; or
5. In any combination of these methods of distribution.
The sales price to the public may be:
1. The market price prevailing at the time of sale;
2. A price related to such prevailing market price; or
3. Such other price as the selling shareholders determine from
time to time.
The shares may also be sold in compliance with the Securities and
Exchange Commission's Rule 144.
The selling shareholders may also sell their shares directly to
market makers acting as principals or brokers or dealers, who may act
as agent or acquire the common stock as a principal. Any broker or
dealer participating in such transactions as agent may receive a
commission from the selling shareholders, or, if they act as agent
for the purchaser of such common stock, from such purchaser. The
selling shareholders will likely pay the usual and customary
brokerage fees for such services. Brokers or dealers may agree with
the selling shareholders to sell a specified number of shares at a
stipulated price per share and, to the extent such broker or dealer
is unable to do so acting as agent for the selling shareholders, to
purchase, as principal, any unsold shares at the price required to
fulfill the respective broker's or dealer's commitment to the selling
shareholders. Brokers or dealers who acquire shares as principals may
thereafter resell such shares from time to time in transactions in a
market or on an exchange, in negotiated transactions or otherwise, at
market prices prevailing at the time of sale or at negotiated prices,
and in connection with such re-sales may pay or receive commissions
to or from the purchasers of such shares. These transactions may
involve cross and block transactions that may involve sales to and
through other brokers or dealers. If applicable, the selling
shareholders may distribute shares to one or more of their partners
who are unaffiliated with us. Such partners may, in turn, distribute
such shares as described above. We can provide no assurance that all
or any of the common stock offered will be sold by the selling
shareholders.
We are bearing all costs relating to the registration of the common
stock. The selling shareholders, however, will pay any commissions
or other fees payable to brokers or dealers in connection with any
sale of the common stock.
The selling shareholders must comply with the requirements of the
Securities Act and the Securities Exchange Act in the offer and sale
of the common stock. In particular, during such times as the selling
shareholders may be deemed to be engaged in a distribution of the
common stock, and therefore be considered to be an underwriter, they
must comply with applicable law and may, among other things:
1. Not engage in any stabilization activities in connection with
our common stock;
2. Furnish each broker or dealer through which common stock may be
offered, such copies of this prospectus, as amended from time to
time, as may be required by such broker or dealer; and
3. Not bid for or purchase any of our securities or attempt to
induce any person to purchase any of our securities other than
as permitted under the Securities Exchange Act.
The Securities Exchange Commission has also adopted rules that
regulate broker-dealer practices in connection with transactions in
penny stocks. Penny stocks are generally equity securities with a
price of less than $5.00 (other than securities registered on certain
national securities exchanges or quoted on the Nasdaq system,
provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or
system).
The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from those rules, deliver a
standardized risk disclosure document prepared by the Commission,
which:
* contains a description of the nature and level of risk in the
market for penny stocks in both public offerings and secondary
trading;
* contains a description of the broker's or dealer's duties to the
customer and of the rights and remedies available to the customer
with respect to a violation to such duties or other requirements of
* contains a brief, clear, narrative description of a dealer market,
including "bid" and "ask" prices for penny stocks and the
significance of the spread between the bid and ask price;
* contains a toll-free telephone number for inquiries on
disciplinary actions;
* defines significant terms in the disclosure document or in the
* conduct of trading penny stocks; and
* contains such other information and is in such form (including
* language, type, size, and format) as the Commission shall require
* by rule or regulation;
The broker-dealer also must provide, prior to effecting any
transaction in a penny stock, the customer:
* with bid and offer quotations for the penny stock;
* the compensation of the broker-dealer and its salesperson in the
transaction;
* the number of shares to which such bid and ask prices apply, or
other comparable information relating to the depth and liquidity
of the market for such stock; and
* monthly account statements showing the market value of each penny
stock held in the customer's account.
In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from those rules;
the broker-dealer must make a special written determination that the
penny stock is a suitable investment for the purchaser and receive
the purchaser's written acknowledgment of the receipt of a risk
disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability
statement. These disclosure requirements will have the effect of
reducing the trading activity in the secondary market for our stock
because it will be subject to these penny stock rules. Therefore,
stockholders may have difficulty selling those securities.
Legal Proceedings
We are not currently a party to any legal proceedings. Hudson Ventures
Inc.'s address for service of process in Nevada is 50 Liberty Street West,
Suite 880 Reno Nevada.
Directors, Executive Officers, Promoters And Control Persons
Our executive officers and directors and their respective ages as of
July 31, 2002 are as follows:
Directors:
Name of Director Age
- - ---------------------- -----
Dana Neill Upton 49
Nikoloas Bekropoulos 52
Philip Taneda 42
Executive Officers:
Name of Officer Age Office
- --------------------- ----- -------
Dana Neill Upton 49 President
Secretary, Treasurer
And Director
Nikolaos Bekropoulos 52 Director
Philip Stanley Taneda 42 Director
Biographical Information
Set forth below is a brief description of the background and business
experience of each of our executive officers and directors for the
past five years.
Dana Neill Upton:
Mr. Upton attended the University of British Columbia School of engineering
where, Mr. Upton majored in mining engineering.
In the past Mr. Upton has worked with several different mining companies
In their engineering department, including, Faro Mining Corp, Burro Creek
Minerals, Construction Aggregates, and Placid Oil Company.
Currently, Mr. Upton is a partner in Skyward Marking Systems and during the
last 10 years Mr. Upton was responsible for establishing distributors and
OEMs for Marsh Ink Jet Systems. His activities were directed primarily at
the management of major accounts including Nabob, B.C. Packers, Abbot Labs,
Shell, etc.
Mr. Upton has a diverse background in equipment and systems, including the
pulp and paper industry, mining, food and drug industry, and various
consulting and engineering firms.
Nikolaos Bekropoulos:
Currently, Mr. Bekropoulos owns and operates a successful Sports bar and
Restaurant, called Gator's Sports Bar. Mr. Bekropoulos has owned and
operated Gator's for the last twelve years and prior to owning Gator's
Mr. Bekropoulos owned four restaurants and was the Manager of the Calgary
Exhibition and Stampede.
Philip Stanley Taneda:
For the past ten years Mr. Taneda has has worked primarily in the
Advertising and Marketing industry in both the private and public Sectors,
including Renaissance Golf, BioKronix and Aqua Pure Ventures Inc. and in
1999 Mr. Taneda was Canada's National Karate champion.
Term of Office
Our Directors are appointed for a one-year term to hold office until
the next annual general meeting of our shareholders or until removed
from office in accordance with our bylaws. Our officers are
appointed by our board of directors and hold office until removed by
the board.
Significant Employees
We have no significant employees other than the officers and
directors described above.
Conflicts of Interest
We do not have any procedures in place to address conflicts of
interest that may arise in our directors between our business and
their other business activities.
Security Ownership Of Certain Beneficial Owners And Management
The following table provides the names and addresses of each person
known to us to own more than 5% of our outstanding common stock as of
July 31, 2002, and by the officers and directors, individually and as
a group. Except as otherwise indicated, all shares are owned
directly.
Amount of
Title of Name and address beneficial Percent
Class of beneficial owner ownership of class
_
Dana Neill Upton 750,000 24.29%
President, Secretary, Treasurer
And a Director
444 East Columbia Street
New Westminster, British Columbia
Canada
Title of Name and address beneficial Percent
Class of beneficial owner ownership of class
________________________________________________________________________
Common Nikoloas Bekropoulos 750,000 24.29%
Stock Director
20 Woodfield Green S.W.
Calgary, AB T2W 3T9
Canada
Common All Officers and Directors 1,500,000 shares 48.58%
Stock as a Group that consists of
two people
The percent of class is based on 3,087,000 shares of common stock
issued and outstanding as of July 31, 2002.
Description Of Securities
General
Our authorized capital stock consists of 60,000,000 shares of common
stock at a par value of $0.001 per share.
Common Stock
As of July 31, 2002, there were 3,087,000 shares of our common stock
issued and outstanding that were held by approximately Forty (40)
stockholders of record.
Holders of our common stock are entitled to one vote for each share
on all matters submitted to a stockholder vote. Holders of common
stock do not have cumulative voting rights. Therefore, holders of a
majority of the shares of common stock voting for the election of
directors can elect all of the directors. Holders of our common
stock representing a majority of the voting power of our capital
stock issued, outstanding and entitled to vote, represented in person
or by proxy, are necessary to constitute a quorum at any meeting of
our stockholders. A vote by the holders of a majority of our
outstanding shares is required to effectuate certain fundamental
corporate changes such as liquidation, merger or an amendment to our
Articles of Incorporation.
Holders of common stock are entitled to share in all dividends that
the board of directors, in its discretion, declares from legally
available funds. In the event of a liquidation, dissolution or
winding up, each outstanding share entitles its holder to participate
pro rata in all assets that remain after payment of liabilities and
after providing for each class of stock, if any, having preference
over the common stock. Holders of our common stock have no pre-
emptive rights, no conversion rights and there are no redemption
provisions applicable to our common stock.
Dividend Policy
We have never declared or paid any cash dividends on our common
stock. We currently intend to retain future earnings, if any, to
finance the expansion of our business. As a result, we do not
anticipate paying any cash dividends in the foreseeable future.
Share Purchase Warrants
We have not issued and do not have outstanding any warrants to
purchase shares of our common stock.
Options
We have not issued and do not have outstanding any options to
purchase shares of our common stock.
Convertible Securities
We have not issued and do not have outstanding any securities
convertible into shares of our common stock or any rights convertible
or exchangeable into shares of our common stock
Interests Of Named Experts And Counsel
No expert or counsel named in this prospectus as having prepared or
certified any part of this prospectus or having given an opinion upon
the validity of the securities being registered or upon other legal
matters in connection with the registration or offering of the common
stock was employed on a contingency basis, or had, or is to receive,
in connection with the offering, a substantial interest, direct or
indirect, in the registrant or any of its parents or subsidiaries.
Nor was any such person connected with the registrant or any of its
parents or subsidiaries as a promoter, managing or principal
underwriter, voting trustee, director, officer, or employee.
Arthur J. Frost, our independent legal counsel, has provided an opinion on
the validity of our common stock.
The financial statements included in this prospectus and the
registration statement have been audited by Morgan and Company
chartered accountants, to the extent and for the periods set forth in
their report appearing elsewhere in this document and in the
registration statement filed with the SEC, and are included in
reliance upon such report given upon the authority of said firm as
experts in auditing and accounting.
Disclosure Of Commission Position Of Indemnification For
Securities Act Liabilities
Our directors and officers are indemnified as provided by the Nevada
Revised Statutes and our Bylaws. We have been advised that in the
opinion of the Securities and Exchange Commission indemnification for
liabilities arising under the Securities Act is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities is
asserted by one of our directors, officers, or controlling persons in
connection with the securities being registered, we will, unless in the
opinion of our legal counsel the matter has been settled by controlling
precedent, submit the question of whether such indemnification is against
public policy to court of appropriate jurisdiction. We will then be
governed by the court's decision.
Organization Within Last Five Years
We were incorporated on November 30, 2001 under the laws of the state
of Nevada.
We own two options to acquire a 90% interest in certain mineral
claims situated in the Yukon Territory, Canada on January 21, 2002 and
January 22, 2002.
Mr. Dana Upton, our president, secretary, treasurer and a director,
Mr. Nikolaos Bekropoulos, and Mr. Philip Taneda have been our sole
promoters since our inception. Mr. Upton and Mr. Bekropoulos Purchased
750,000 shares each of our common stock at a price of $0.001 US per share
on December 10, 2001. Mr. Upton and Mr. Bekropoulos paid a total purchase
price of $750.00 each for these shares.
Description Of Business
In General
We are an exploration stage company. We plan to ultimately engage in
The further acquisition, and exploration of mineral properties and exploit
mineral deposits demonstrating economic feasibility. We own two
options to acquire an interest in the mineral claims described below
under the heading Wheaton River Property Option Agreement and McConnell
River Property Option Agreement. Our plan of operations is to carry out
exploration work on the Wheaton River And McConnell River Properties in
order to ascertain whether these claims possess commercially exploitable
quantities of gold and or silver. There can be no assurance that a
commercially exploitable mineral deposit, or reserve, exists on the Wheaton
River and McConnell River Properties until appropriate exploratory work is
done and an economic evaluation based on such work concludes there is
economic feasibility.
Wheaton River Property Option Agreement
We have obtained the option to acquire a 90% interest in mineral
claims situated in the Yukon Territory, Canada. We refer
to these mineral claims as the Wheaton River Property. We acquired our
interest in the Wheaton River Property pursuant to an agreement dated
January 21, 2002 between Glen Macdonald and us. Glen Macdonald is the owner
of the Wheaton River Property. We paid a cash consideration to Glen
Macdonald for the grant of the option and geological report in the amount
of $7,500 on January 21, 2002 upon execution of the option agreement. The
option agreement was negotiated as an arms length transaction. We are
entitled to exercise the option to acquire the 90% interest in the Wheaton
River Property when we have:
(A) paid Glen Macdonald $7,500(paid upon the execution of
the option agreement);
(B) incur an aggregate of $195,000 of property exploration expenditures on
the Wheaton River Property within the following Periods.
(1) $15,000 on or before December 31, 2002;
(2) a further $180,000 on or before December 31, 2003;
In the event that we spend, in any of the above periods, less than
the required sum, we may, at our option, pay to Glen Macdonald the
difference between the amount actually spent and the required
exploration expenditure in full satisfaction of the exploration
expenditures to be incurred. In the event that we spend, in any
period, more than the required sum, then the excess will be carried
forward and applied to the required exploration expenditures to be
incurred in subsequent periods. If we fail to make any required
payment, or incur any required exploration expenditures, our option will
terminate and we will have no further rights to the Wheaton River Property.
Property exploration expenditures include all costs of acquisition and
maintenance of the property, all expenditures on the exploration and
development of the property and all other costs and expenses of whatsoever
kind or nature, including those of a capital nature, incurred or chargeable
with respect to the exploration of the
property. In addition, until we have secured a 90% interest in the
Wheaton River Property, we are obligated to maintain in good standing the
Wheaton River Property by:
(A) the doing and filing of assessment work or making of payments in
lieu thereof;
(B) the performance of all other actions necessary to keep our
mineral claims free and clear of all liens and other charges.
All payments necessary to maintain the Wheaton River Property in good
standing with the Yukon Territory for the next twelve-month period have
been made.
McConnell River Property Option Agreement
We have obtained the option to acquire a 90% interest in mineral
claims situated in the Watson Lake Mining District, Yukon Territory,
Canada. We refer to these mineral claims as the McConnell River Property.
We acquired our interest in the McConnell River Property pursuant to an
agreement dated January 22, 2002 between Glen Macdonald and us. Glen
Macdonald is the owner of the McConnell River Property. We paid a cash
consideration to Glen Macdonald for the grant of the option and geological
report in the amount of $2,500 on January 22, 2002 upon execution of the
option agreement. The option agreement was negotiated as an arms length
transaction. We are entitled to exercise the option to acquire the 90%
interest in the McConnell River Property when we have:
(A) paid Glen Macdonald $2,500(paid upon the execution of
the option agreement);
(B) incurred an aggregate of $25,000 of property exploration
expenditures on the McConnell River Property within the following
Periods
(1) $25,000 on or before June 17, 2003;
In the event that we spend, in any of the above periods, less than
the required sum, we may, at our option, pay to Glen Macdonald the
difference between the amount actually spent and the required
exploration expenditure in full satisfaction of the exploration
expenditures to be incurred. In the event that we spend, in any
period, more than the required sum, then the excess will be carried
forward and applied to the required exploration expenditures to be
incurred in subsequent periods. If we fail to make any required
payment, or incur any required exploration expenditures, our option will
terminate and we will have no further rights to the McConnell River
Property. Property exploration expenditures include all costs of
acquisition and maintenance of the property, all expenditures on the
exploration and development of the property and all other costs and
expenses of whatsoever kind or nature, including those of a capital nature,
incurred or chargeable with respect to the exploration of the
property. In addition, until we have secured a 90% interest in the
McConnell River Property, we are obligated to maintain in good standing the
McConnell River Property by:
(A) the doing and filing of assessment work or making of payments in
lieu thereof;
(B) the performance of all other actions necessary to keep our
mineral claims free and clear of all liens and other charges.
All payments necessary to maintain the McConnell River Property in good
standing with the Yukon Territory the next twelve-month period have been
made.
Description of the Wheaton River Property
The Wheaton River Property comprises nine claims in
the Whitehorse Mining District of the Yukon Territory, Canada. Mr. Barclay
Macdonald recorded the claim on February 19, 2000. The claims expire on
August 19, 2003. The claims can be extended for one year by conducting
work on the claims equal to $100 per claim unit. Accordingly, our claims
will be extended for one year if we conduct $900 worth of work on the
claims on or before August 19, 2003.
Description of the McConnell River Property
The McConnell River Property comprises of four claims in
the Watson Lake Mining District of the Yukon Territory, Canada. Mr. Graham
Davidson recorded these claims on December 17, 2000. The claims expire on
June 17th, 2003. The claims can be extended for one year by conducting
work on the claims equal to $100 per claim unit. Accordingly, our claims
will be extended for one year if we conduct $400 worth of work on the
claims on or before June 17, 2003.
Location of the Wheaton River Property
The Wheaton River Property covers a broad northwest trending ridge south of
Pugh Peak (referred to locally as "Gold Hill"), extending from the Wheaton
River to Hodnett Lakes on NTS Map Sheet 105D-6. The property lies 40 km
south of Whitehorse at geographical coordinates 60 16'N latitude, 135 06'W
longitude (see Figures 1 and 2).The Alaska and Klondike Highways, and the
Wheaton River-Mount Skukum all-season gravel road provide access to the
area. A four-wheel drive road follows Thompson Creek from the Wheaton Road
to the property.
Location of the McConnell River Property
The McConnell River property is located 260 km northeast of Whitehorse,
Yukon and 40 km south of Ross River, Yukon at latitude 61 35' N and
longitude 132 35W (Figure 1). The claims straddle the headwaters of Seagull
Creek and McConnell River and are situated 30 km east of the South Canol
Road (Hwy 8).A 20 km four-wheel drive road originating from the South Canol
Road provides access to south Seagull Lake in the claims area. The main
showing is connected to the access road by a 10 km four-wheel drive road.
Access during the 2000 exploration season was by all-terrain vehicle
initially, and then by road using 4x4 pickup trucks.
History of the Wheaton River Property
The Wheaton River/Lake Bennett district was first explored by prospectors
travelling along the major lakes and Rivers of southwestern Yukon in the
early 1890's. The original claims recorded in the district were those of
prospectors Corwin and Rickman who, in 1893, located antimony showings on
Carbon Hill and gold-silver bearing quartz veins at an undisclosed site.
The Klondike Gold Rush brought a great influx of people to the Yukon, many
of whom crossed Lake Bennett en route to Dawson City these individuals
strayed into the Wheaton Valley, locating claims in the Schnabel Creek
drainage in 1903. More intensive exploration began in 1906 after the
discovery of free gold and gold-silver tellurides on Gold Hill by D.
Hodnett and J. Stagar, and the rediscovery of the Corwin-Rickman antimony-
silver showings on Carbon and Chieftain Hills. Wagon roads were built along
the Wheaton River, Thompson Creek and Stevens Creek to provide access to
numerous adits and pits on Mount Anderson. Limited mining of high grade
gold and silver bearing ore occurred on the Gold Reef vein at the
northeastern end of Gold Hill and on the Becker-Cochran (Whirlwind)
property on the west face of Mount Anderson. Adits and shafts on Mount
Stevens and Wheaton Mountain were probably exploratory; no record of ore
production exists.
The Tally-Ho Mine on Tally-Ho Mountain was the most significant operation
during the early years of activity in the area. For example, there is a
record of a shipment in 1918, of 14 tons of hand-sorted ore grading 2.35
oz/ton gold, 5.1 oz/ton silver and 7% lead which was smelted at Tacoma.
On Montana Mountain, Colonel Conrad and associates developed several gold
and silver bearing quartz veins on the slope above Windy Arm, Tagish Lake.
A small mill on the shore of Windy Arm processed ore extracted from the
Venus, Montana and Big Thing quartz veins between 1906 and 1920.
From the mid-1920's to the late 1960's, little exploration of significance
took place. By 1970's, many of the old showings were restaked as an
increase in the value of base and precious metals rekindled the interest of
prospectors and mining companies in the area. The Venus and Arctic mines
operated on Montana Mountain between 1969-1971. The Venus Mine was again
rehabilitated during 1980-1981 and a new mill was installed at the southern
end of Windy Arm.
The discovery and development of the Mount Skukum Mine, coupled with a
dramatic rise in the price of gold and silver caused a methodical staking
rush in the Wheaton Valley-Bennett Lake district in the 1980's. The area
has developed into a mining camp and presently there are over 1,000 mineral
claims in good standing. Exploration and development work has continued at
the Goodell and Omni properties.
On the area covered by the Hudson Ventures Inc. claims, recent exploration
started in 1984-1985 when Wheaton River Joint Venture performed
prospecting, grid development, mapping, geochemical and geophysical
surveys, and bulldozer trenching and road building. Mineralized quartz
veins and stockworks were discovered in several locations along the 5
kilometre long ridge. During 1987 and 1988 Ranger Pacific Minerals Ltd. and
others performed additional geochemical and geophysical survey work, and
blast trenching to better define target zones previously identified and to
further explore the property. During the period 1991 to 2000 exploration
work done by the owners has included bulldozer trenching, road
construction, geological mapping and prospecting. Exploration and
development costs incurred to date, on the property have a replacement
value exceeding US $400,000 with some US $200,000 being expended since
1996.
History of the McConnell River Property
The McConnell River district was first explored by placer gold miners
travelling along the major lakes and Rivers of southwestern Yukon in the
early 1890's, prior to the discovery of gold in the Klondike (1896). The
first major exploration of the district commenced following the
construction of the Canol Pipeline road as part of the World War II effort.
The region has been subject of several exploration booms since 1945 led by
major mining companies including Noranda, RioTinto, Anaconda, Utah Mines,
Equity Silver, Hudson Bay Mining and others. As a result of these regional
exploration programs, several major mineral deposits were defined and an
effective data base developed for the area.
The area now covered by Hudson Ventures' McConnell River claims has been
included in various projects at different times since massive sulphide
material was first located in 1962. The property or portions thereof have
been explored by:
- - the Pelly Minerals Syndicate (Canex, KerrAddison, Noranda and
Homestake), which conducted hand trenching, mapping and a magnetic survey
in 1963;
- - Mayo Silver Mines Limited and Canol Mines Limited which bulldozer
trenched and drilled 1452 metres (7 holes) in 1969;
- - Seagull Joint Venture (Great Western Petroleum Corp. and Lornex Mines
Ltd.) which carried out mapping and geochemical sampling in 1981;
- - Equity Silver Mines Ltd., and Fairfield Mines Ltd. performed mapping,
geochem sampling, geophysical surveying (Magnetics, I.P. and VLF) in 1987
and constructed 6.4 kilometres of roads and diamond drilled 8 holes in
1988.
The claims were acquired by the present owners who conducted geophysical
(EM and Magnetics) and geochemical surveys, constructed a new access road
and conducted bulldozer trenching from 1996 to 2000.
During the 2000 season a four-man exploration crew, based from Ross River,
conducted a soil geochemical survey and VLF-EM and magnetometer geophysical
survey's over part of the B1-4 claims. The surveys were undertaken to try
to locate the source of gold-silver bearing float mineralization located
earlier and to extend known massive sulphide mineralization. A bulldozer
was utilized to rebuild part of a 4x4 access trail, and to trench sulphide
showings. Geological mapping to investigate new target areas was carried
out.
Geological Report: Wheaton River Property
We have obtained a geological evaluation report on the Wheaton River
Property. The geological report was prepared by William Timmins. of
Vancouver British Columbia, Canada. The geological report
summarizes the results of the prior exploration of the Wheaton River
Property and the geological formations on the property that were identified
as a result of this prior exploration.
In his geological report, Mr. Timmins recommends proceeding with a
two-phase, staged exploration program on the Wheaton River Property based
on his conclusion that prospecting, geophysical surveys and soil and rock
sampling are the exploration techniques that have been the most
successful in locating gold and silver mineralization in the region.
The initial phase of the recommended geological work program is
comprised of Geological review and Geophysical surveys
of the Wheaton River Property in order to make a preliminary assessment of
mineralization. A budget of $15,000 is estimated to be required to support
this initial geological work program. The components of the budget for
this initial geological work program are as follows:
Geological Review $2,000
Sampling and Assaying $1,000
Consulting and Report Writing $2,000
Geophysical Surveys
- -Induced Polarization
- -Ground Magnetometer
- -Max-Min (EM) $10,000
- ----------------------- -----------
Total $15,000
Mr. Timmins recommended that the second phase of the exploration
program consist of Diamond drilling, core logging and assay sampling. This
second phase of the geological work program is estimated to require a
budget of $180,000. Mr. Timmins concluded in his geological report that the
decision to proceed with each subsequent phase of the exploration program
should be contingent upon reasonable encouragement having
been gained from the results of the previous exploration program.
We have decided to accept the recommendation of the geological report
and proceed with this initial geological work program. We will make
a decision whether to proceed with phase two of the staged
exploration program upon completion of this initial geological work
program and an analysis of the results of this first phase of the
exploration program.
Should we determine at any time not to proceed to the next phase of
the geological work program, we will use our remaining operating
capital, if any, to obtain an option or options on other mineral
claims. Funds will then be used to conduct mineral exploration
activities on those claims. It is likely we will need further
financing to pay for that exploration.
The two phase program recommended in the report constitutes a
reconnaissance exploration program, which is only an initial phase of
a full exploration effort. If we complete both phases of the
exploration program and the results of these efforts are positive, we
will still have to undertake an extensive and additional exploration
program which might consist of further soil sampling, geophysical
surveys, trenching or drilling before we will be able to identify
commercially-viable reserves. The costs of these subsequent programs
will be significantly more than the costs set forth above for the
initial two phase exploration program.
Geological Report: McConnell River Property
We have obtained a geological evaluation report on the McConnell River
Property. The geological report was prepared by William Timmins. of
Vancouver British Columbia, Canada. The geological report
summarizes the results of the prior exploration of the McConnell River
Property and the geological formations on the property that were identified
as a result of this prior exploration.
In his geological report, Mr. Timmins recommends proceeding with a
two-phase, staged exploration program on the McConnell River Property based
on his conclusion that prospecting, geophysical surveys and soil and rock
sampling are the exploration techniques that have been the most
successful in locating gold and silver mineralization in the region.
The initial phase of the recommended geological work program is a
Geological review including sampling and Geophysical Surveys
of the McConnell River Property in order to make a preliminary assessment
of mineralization. A budget of $25,000 is estimated to be required to
support this initial geological work program. The components of the budget
for this initial geological work program are as follows:
- -Geological Review $2,000
- -Sampling and Assaying $2,000
- -Exploration Grid $4,000
- -Geological Mapping $4,000
Geophysical Surveys
- -Induced Polarization
- -Ground Magnetometer
- -Max-Min (EM) $10,000
- -Consulting and Report Writing $3,000
- ----------------------- -----------
Total $25,000
Grid emplacement involves dividing a portion of the property being explored
into small sections. The geologist overseeing the exploration program will
record results based on the section from which a sample is taken, or
various surveys are performed.
Geological mapping and sampling will consist of a geologist and his
assistant gathering chip samples and grab samples from grid areas with the
most potential to host economically significant mineralization based on
their observation of any surface rocks. Grab samples are soil samples or
pieces of rock that appear to contain precious metals such as gold and
silver. All samples gathered are sent to a laboratory where they are
crushed and analysed for metal content.
contingent upon reasonable encouragement having been gained from the
results of the previous exploration program.
We have decided to accept the recommendation of the geological report
and proceed with this initial geological work program. We will make
a decision whether to proceed with phase two of the staged exploration
program upon completion of this initial geological work program and an
analysis of the results of this first phase of the exploration program by a
qualified geologist.
Should we determine at any time not to proceed to the next phase of
the geological work program, we will use our remaining operating capital,
if any, to obtain an option or options on other mineral claims. Funds will
then be used to conduct mineral exploration activities on those claims. It
is likely we will need further financing to pay for that exploration.
If we complete both phases of the exploration program and the results of
these efforts are positive, we will still have to undertake an extensive
and additional exploration program which might consist of further soil
sampling, geophysical surveys, trenching or drilling before we will be able
to identify commercially-viable reserves. The costs of these subsequent
programs will be significantly more than the costs set forth above for the
initial two phase exploration program.
Mr. Timmins recommended that the second phase of the exploration
program consist of Diamond drilling, core logging and assay sampling. This
second phase of the geological work program is estimated to require a
budget of $145,000.
Drilling involves extracting a long cylinder of rock from the ground to
determine amounts of metals contain in rock located at different depths.
Pieces of the rock obtained, known as drill core, are analysed for mineral
content.
Mr. Timmins concluded in his geological report that the
decision to proceed with each subsequent phase of the exploration
program should be contingent upon reasonable encouragement having
been gained from the results of the previous exploration program.
We have decided to accept the recommendation of the geological report
and proceed with this initial geological work program. We will make
a decision whether to proceed with phase two of the staged
exploration program upon completion of this initial geological work
program and an analysis of the results of this first phase of the
exploration program.
Should we determine at any time not to proceed to the next phase of
the geological work program, we will use our remaining operating
capital, if any, to obtain an option or options on other mineral
claims. Funds will then be used to conduct mineral exploration
activities on those claims. It is likely we will need further
financing to pay for that exploration.
The two phase program recommended in the report constitutes a
reconnaissance exploration program, which is only an initial phase of
a full exploration effort. If we complete both phases of the
exploration program and the results of these efforts are positive, we
will still have to undertake an extensive and additional exploration
program which might consist of further soil sampling, geophysical
surveys, trenching or drilling before we will be able to identify
commercially-viable reserves. The costs of these subsequent programs
will be significantly more than the costs set forth above for the
initial two phase exploration program.
Compliance with Government Regulation
We will commence business in the Yukon Territory when we commence the
first phase of our planned exploration program. We will be required
to register as an extra-provincial company under the Company Act prior to
conducting business in the Yukon Territory .
The anticipated cost of the extra-provincial registration is approximately
$500. We have not as yet registered as an extra-provincial company under
the Company Act of the Yukon Territory, but will do so sometime prior to
commencing our exploration program.
We will be required to conduct all mineral exploration activities in
accordance with the Yukon Courts Mining Act, an Act of Parliament of 1921 .
We will be required to obtain work permits from the Ministry of
Energy, Mines and Resources for any exploration work that results in a
physical disturbance to the land. We will be required to obtain additional
work permits if we proceed with the second phase of our
exploration program. There is no charge to obtain a work permit under
the Mining Act. We will incur the expense of our consulting
geologist to prepare the required submission to the Ministry of
Energy Mines and Resources. As the exploration program proceeds to
the trenching, drilling and bulk-sampling stages, we may be required
to post small bonds and file statements of work with the Ministry of
Energy Mines and Resources. We will be required by the Environmental
Regulations Act and Inland Water Act to undertake remediation work on any
work that results in physical disturbance to the land.
The cost of remediation work will vary according to the degree of physical
disturbance.
We have budgeted for regulatory compliance costs in the proposed
exploration program recommended by the geological report. As
mentioned above we will have to sustain the cost of reclamation and
environmental mediation for all exploration and other work
undertaken.
The amount of these costs is not known at this time as
we do not know the extent of the exploration program that will be
undertaken beyond completion of the recommended exploration program.
Because there is presently no information on the size, tenor, or
quality of any resource or reserve at this time, it is impossible to
assess the impact of any capital expenditures on earnings or our
competitive position.
An environmental review is not required under the Environmental
Regulations Act and Inland Water act to proceed with the recommended
exploration program on our mineral claims.
Employees
We have no employees as of the date of this prospectus other than our
two Directors.
Research and Development Expenditures
We have not incurred any exploration expenditures to date. We have
not incurred any other research or development expenditures since our
incorporation.
Subsidiaries
We do not have any subsidiaries.
Patents and Trademarks
We do not own, either legally or beneficially, any patents or
trademarks.
Plan Of Operations
Our current business plan is to conduct exploration sufficient to
determine whether there is reason to begin an extensive and costly
exploration program. This constitutes phase one of the exploration
program recommended by the geological report. We anticipate that
phase one of the recommended geological exploration program will cost
approximately $15,000 on the Wheaton River Property.
Specifically, we anticipate spending the following over the next
six months:
* $8,000 on professional fees, including professional fees payable
in connection with the filing of this registration statement;
* $15,000 on exploration expenses, consisting of $15,000 for the
first phase of the exploration program on the Wheaton River
Property;
Total expenditures over the next six months are therefore expected
to be approximately $23,000.
We are able to proceed with phase one of the exploration program on the
Wheaton River Property without additional financing. Completion of these
exploration expenditures will also enable us to meet the exploration
expenditure requirement under the option agreement for the period through
December 31, 2002.
We plan on proceeding with phase one of the exploration program on the
Wheaton River Property, as soon as we can obtain the necessary permits and
clearances. We anticipate proceeding with phase two of the exploration
program in the spring of 2003. We will obtain
a geological report upon the completion of each phase summarizing the
results of that phase. The costs of the geological reports are
included in the cost of the exploration program.
We will assess whether to proceed to phase two of the recommended
geological exploration program upon completion of an assessment of
the results of phase one of the geological exploration program. We
will require additional funding in the event that we decide to
proceed with phase two of the exploration program. The anticipated
cost of phase two of the exploration program is $180,000, which is well
beyond our projected cash reserves. We anticipate that additional funding
will be required in the form of equity financing from the sale of our
common stock. However, we cannot provide investors with any assurance that
we will be able to raise sufficient funding from the sale of our common
stock to fund all three phases of the exploration program. We believe that
debt financing will not be an alternative for funding the complete
exploration program. We do not have any arrangements in place for any
future equity financing.
Our cash reserves are not sufficient to meet our obligations for the
next twelve-month period. As a result, we will need to seek
additional funding in the near future. We currently do not have a
specific plan of how we will obtain such funding; however, we
anticipate that additional funding will be in the form of equity
financing from the sale of our common stock. We may also seek to
arrange a short-term loan through our President, although no such
arrangement has, as yet, been made. At this time, we cannot provide
investors with any assurance that we will be able to raise sufficient
funding from the sale of our common stock or through a loan from our
President to meet our obligations over the next twelve months. We do
not have any arrangements in place for any future equity financing.
If we do not complete the cash payments or the exploration
expenditures required under the option agreement for the Wheaton River
Property, then our option in will terminate and we will lose all
our rights and interest in the Wheaton River Property . If we do not
secure additional financing to incur the required exploration
expenditures, we may consider bringing in a joint venture partner to
provide the required funding. We have not undertaken any efforts to
locate a joint venture partner. In addition, we cannot provide
investors with any assurance that we will be able to locate a joint
venture partner who will assist us in funding the exploration of the
Wheaton River Property. We may also pursue acquiring interests in
alternate mineral properties in the future.
Results Of Operations For Period Ending July 31, 2002
We did not earn any revenues during the period ending July 31, 2002. We do
not anticipate earning revenues until such time as we have entered into
commercial production of our mineral properties. We are presently in the
exploration stage of our business and we can provide no assurance that we
will discover commercially exploitable levels of mineral resources on our
properties, or if such resources are discovered, that we will enter into
commercial production of our mineral properties.
We incurred operating expenses in the amount of $25,419.00 for the
period from inception to July 31, 2002. These operating expenses
were comprised primarily of professional fees attributable to our
corporate organization, the preparation and filing of this
registration statement, administrative services and the acquisition
of our options to acquire the Wheaton River and McConnell River Properties.
We have not attained profitable operations and are dependent upon
obtaining financing to pursue exploration activities. For these
reasons our auditors stated in their report that they have
substantial doubt Hudson Ventures Inc. will be able to continue as
a going concern.
Description Of Properties
We own two options to acquire a 90% interest in the Wheaton River and
McConnell River Properties , as described in detail in this Prospectus
under the title Wheaton River Property Option Agreement and McConnell River
Option Agreement. We do not own or lease any property other than our
options to acquire an interest in the Wheaton River Property and the
McConnell River Property.
The Wheaton River Property comprises nine claims in the Whitehorse Mining
District of the Yukon Territory, Canada. The McConnell River Property
comprises of four claims and Mr. Glen Macdonald is the registered owner of
both the claims. The claims expire on August 19, 2003 and June 17, 2003.
There are no mines or physical equipment or property located
on the mineral claim. There is no source of power to the mineral
claim.
Certain Relationships And Related Transactions
None of the following parties has, since our date of incorporation,
had any material interest, direct or indirect, in any transaction
with us or in any presently proposed transaction that has or will
materially affect us:
* Any of our directors or officers;
* Any person proposed as a nominee for election as a director;
* Any person who beneficially owns, directly or indirectly, shares
carrying more than 10% of the voting rights attached to our
outstanding shares of common stock;
* Any of our promoters;
* Any relative or spouse of any of the foregoing persons who has the
same house address as such person.
Market For Common Equity And Related Stockholder Matters
No Public Market for Common Stock
There is presently no public market for our common stock. We
anticipate applying for trading of our common stock on the over the
counter bulletin board upon the effectiveness of the registration
statement of which this prospectus forms a part. However, we can
provide no assurance that our shares will be traded on the bulletin
board or, if traded, that a public market will materialize.
Stockholders of Our Common Shares
As of the date of this registration statement, we had forty (40)
registered shareholders.
Rule 144 Shares
A total of 1,500,000 shares of our common stock will be available for
resale to the public after December 10, 2002 in accordance with the
volume and trading limitations of Rule 144 of the Act. In general,
under Rule 144 as currently in effect, a person who has beneficially
owned shares of a company's common stock for at least one year is
entitled to sell within any three month period a number of shares
that does not exceed the greater of:
1. 1% of the number of shares of the company's common stock then
outstanding which, in our case, will equal approximately 30,870
Shares as of the date of this prospectus; or
2. the average weekly trading volume of the company's common stock
during the four calendar weeks preceding the filing of a notice on
form 144 with respect to the sale.
Sales under Rule 144 are also subject to manner of sale provisions
and notice requirements and to the availability of current public
information about the company.
Under Rule 144(k), a person who is not one of the company's
affiliates at any time during the three months preceding a sale, and
who has beneficially owned the shares proposed to be sold for at
least two years, is entitled to sell shares without complying with the
manner of sale, public information, volume limitation or notice provisions
of Rule 144.
As of the date of this prospectus, persons who are our affiliates
hold all of the 1,500,000 shares that may be sold pursuant to Rule
144 after December 10, 2002.
Stock Option Grants
To date, we have not granted any stock options.
Registration Rights
We have not granted registration rights to the selling shareholders
or to any other persons.
Dividends
There are no restrictions in our articles of incorporation or bylaws
that prevent us from declaring dividends. The Nevada Revised
Statutes, however, do prohibit us from declaring dividends where,
after giving effect to the distribution of the dividend:
1. we would not be able to pay our debts as they become due in the
usual course of business; or
2. our total assets would be less than the sum of our total
liabilities plus the amount that would be needed to satisfy the
rights of shareholders who have preferential rights superior to
those receiving the distribution.
We have not declared any dividends, and we do not plan to declare any
dividends in the foreseeable future.
Executive Compensation
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or
paid to our executive officers by any person for all services
rendered in all capacities to us for the fiscal period ended July
31, 2002.
Annual Compensation
Other Restricted Options
Annual Stock * SARs Other
Name Title Year Mgmt. Bonus Comp. Awarded #) ($)
Comp. Fees
________________________________________________________________________
Dana Pres., 2001 $3400 0 0 0 0 0
Upton Sec., 2002
Tre.&
Dir.
Nikolaos
Bekropoulos Dir., 2001 $0 0 0 0 0 0
2002
Philip
Taneda Dir., 2002 $ 700 0 0 0 0 0
Stock Option Grants
We did not grant any stock options to the executive officers during
our most recent fiscal year which ends December 31, 2002.
Consulting and or Management Agreements
We do not have an employment contract or consulting agreement
With Mr. Upton. However, we have paid Mr. Upton the Amount of $3400
in management fees since inception.
We do not have any employment or consulting agreement with Mr. Bekropoulos
and we do not pay Mr. Bekropoulos any amount for acting as a director of
the Company.
We do not have any employment or consulting agreement with Mr.
Taneda, however, we have paid Mr. Taneda the amount of $700 for Travel and
minimal expenses during the term of his directorship.
Financial Statements
Index to Financial Statements:
1. Auditors' Report;
2. Audited Financial Statements for the period ending July 31,2002
including:
a. Balance Sheet
b. Statement of Loss and Deficit
c. Statement of Cash Flows
d. Statement of Stockholders' Equity
e. Notes to Financial Statements
HUDSON VENTURES INC.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
JULY 31, 2002
(Stated in U.S. Dollars)
AUDITORS' REPORT
To the Directors
Hudson Ventures Inc.
(An Exploration Stage Company)
We have audited the balance sheet of Hudson Ventures Inc. (an exploration
stage company) as at July 31, 2002 and the statements of loss and deficit
accumulated during the exploration stage, cash flows, and stockholders'
equity for the period from November 30, 2001 (date of inception) to July
31, 2002. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with United States generally accepted
auditing standards. Those standards require that we plan and perform an
audit to obtain reasonable assurance whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at July 31, 2002 and the
results of its operations and cash flows for the period from November 30,
2001 (date of inception) to July 31, 2002 in accordance with United States
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 1(c) to the
financial statements, the Company incurred a net loss of $25,419 since
inception, has not attained profitable operations and is dependent upon
obtaining adequate financing to fulfil its exploration activities. These
factors raise substantial doubt that the Company will be able to continue
as a going concern. Management's plans in regard to these matters are also
discussed in Note 1(c). The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Vancouver, BC
"Morgan & Company"
August 9, 2002
Chartered Accounts
HUDSON VENTURES INC.
(An Exploration Stage Company)
BALANCE SHEET
JULY 31, 2002
(Stated in U.S. Dollars)
ASSETS
Current
Cash $ 28,181
Prepaid expenses 2,500
30,681
Mineral Property Interest (Note 3) -
$ 30,681
LIABILITIES
Current
Accounts payable and accrued liabilities $ 1,000
SHAREHOLDERS' EQUITY
Share Capital
Authorized:
100,000,000 common shares, par value $0.001 per share
10,000,000 preferred shares, par value $0.001 per
share
Issued and outstanding:
3,087,000 common shares 3,087
Additional paid-in capital 52,013
Deficit Accumulated During The Exploration Stage (25,419)
29,681
$ 30,681
HUDSON VENTURES INC.
(An Exploration Stage Company)
STATEMENT OF LOSS AND DEFICIT
PERIOD FROM DATE OF INCEPTION, NOVEMBER 30, 2001, TO JULY 31, 2002
(Stated in U.S. Dollars)
Expenses
Consulting fees $ 8,000
Office and sundry 119
Professional fees 3,200
Management fees 4,100
Mineral property option payments 10,000
Net Loss For The Period 25,419
Deficit Accumulated During The Exploration Stage, -
Beginning Of Period
Deficit Accumulated During The Exploration Stage, $25,419
End Of Period
Loss Per Share $ (0.01)
Weighted Average Number Of Shares Outstanding 2,568,392
HUDSON VENTURES INC.
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
PERIOD FROM DATE OF INCEPTION, NOVEMBER 30, 2001, TO JULY 31, 2002
(Stated in U.S. Dollars)
Cash Flows From Operating Activities
Net loss for the period $ (25,419)
Adjustments To Reconcile Net Loss To Net Cash Used By
Operating Activities
Prepaid expenses (2,500)
Accounts payable and accrued liabilities 1,000
(26,919)
Cash Flows From Financing Activity
Share capital issued 55,100
Increase In Cash 28,181
Cash, Beginning Of Period -
Cash, End Of Period $ 28,181
HUDSON VENTURES INC.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
JULY 31, 2002
(Stated in U.S. Dollars)
COMMON STOCK
ADDITIO
NAL
SHARES AMOUNT PAID-IN DEFICIT TOTAL
CAPITAL
Opening balance,
November 30, 2001 - $- $ - $ - $ -
December 2001 -
Shares issued for 1,500,000 1,500 - - 1,500
cash at $0.001
January 2002 - Shares
issued for cash at 1,510,000 1,510 13,590 - 15,100
$0.01
July 2002 - Shares
issued for cash at 77,000 77 38,423 - 38,500
$0.50
Net loss for the - - - (25,419) (25,419)
period
Balance, July 31, 3,087,000 $3,087 $ 52,013 $ (25,419) $ 29,681
2002
HUDSON VENTURES INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2002
(Stated in U.S. Dollars)
1. NATURE OF OPERATIONS
a) Organization
The Company was incorporated in the State of Nevada, U.S.A., on
November 30, 2001. The Company's intended year end is July 31, 2002.
b) Exploration Stage Activities
The Company has been in the exploration stage since its formation and
has not yet realized any revenues from its planned operations. It is
primarily engaged in the acquisition and exploration of mining
properties. Upon location of a commercial minable reserve, the
Company expects to actively prepare the site for its extraction and
enter a development stage.
c)Going Concern
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern.
As shown in the accompanying financial statements, the Company has
incurred a net loss of $25,419 for the period from November 30, 2001
(inception) to July 31, 2002, and has no sales. The future of the
Company is dependent upon its ability to obtain financing and upon
future profitable operations from the development of its mineral
properties. Management has plans to seek additional capital through a
private placement and public offering of its common stock. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts
of and classification of liabilities that might be necessary in the
event the Company cannot continue in existence.
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in accordance
with generally accepted accounting principles in the United States.
Because a precise determination of many assets and liabilities is
dependent upon future events, the preparation of financial statements
for a period necessarily involves the use of estimates which have been
made using careful judgement.
The financial statements have, in management's opinion, been properly
prepared within reasonable limits of materiality and within the
framework of the significant accounting policies summarized below:
HUDSON VENTURES INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2002
(Stated in U.S. Dollars)
2.SIGNIFICANT ACCOUNTING POLICIES (Continued)
a)Mineral Property Option Payments and Exploration Costs
The Company expenses all costs related to the maintenance and
exploration of mineral claims in which it has secured exploration
rights prior to establishment of proven and probable reserves. To
date, the Company has not established the commercial feasibility of
its exploration prospects, therefore, all costs are being expensed.
b)Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities, and disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of
revenues and expenses for the reporting period. Actual results could
differ from these estimates.
c)Income Taxes
The Company has adopted Statement of Financial Accounting Standards
No. 109 - "Accounting for Income Taxes" (SFAS 109). This standard
requires the use of an asset and liability approach for financial
accounting, and reporting on income taxes. If it is more likely than
not that some portion or all of a deferred tax asset will not
realized, a valuation allowance is recognized.
d)Net Loss Per Share
The loss per share is calculated using the weighted average number of
common shares outstanding during the year. Diluted loss per share is
not presented, as the impact of the exercise of options is anti-
dilutive.
3.MINERAL PROPERTY INTEREST
The Company has entered into two option agreements, dated January 21,
2002 and January 22, 2002 respectively, to acquire a 90% interest in a
total of thirteen mineral claims located in the Whitehorse and Watson
Lake Mining Districts in Yukon Territories, Canada
HUDSON VENTURES INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2002
(Stated in U.S. Dollars)
3.MINERAL PROPERTY INTEREST (Continued)
In order to earn its interests, the Company made cash payments totalling
$10,000 on signing and must incur exploration expenditures totalling
$220,000 as follows:
Exploration expenditures:
- - $15,000 by December 31, 2002;
- - A further $25,000 by June 30, 2003;
- - A further $180,000 by December 31, 2003.
The properties are subject to a 1% net smelter return royalty.
4. CONTINGENCY
Mineral Property
The Company's mineral property interests have been acquired pursuant to
option agreements. In order to retain its interest, the Company must
satisfy the terms of the option agreements described in Note 3.
5.RELATED PARTY TRANSACTIONS
During the period ended July 31, 2002, the Company incurred $4,100 for
management services provided by two directors of the Company.
Changes In And Disagreements With Accountants
We have had no changes in or disagreements with our accountants.
Available Information
We are filing this registration statement on form SB-2 under the
Securities Act of 1933 with the Securities and Exchange Commission
with respect to the shares of our common stock offered through this
prospectus. This prospectus filed contains all information
and exhibits. Statements made in this registration statement are summaries
of the material terms of the referenced contracts, agreements or documents
of the company. We refer you to our registration statement and each exhibit
attached to it for a more detailed description of matters involving the
company, and the statements we have made in this prospectus are qualified
in their entirety by reference to these additional materials. You may
inspect the registration statement, exhibits and schedules filed with the
Securities and Exchange Commission at the Commission's principal office in
Washington, D.C. Copies of all or any part of the registration statement
may be obtained from the Public Reference Section of the Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the Commission at 1-800- SEC-0330 for further information on
the operation of the public reference rooms. The Securities and Exchange
Commission also
maintains a web site at http://www.sec.gov that contains reports,
proxy statements and information regarding registrants that file
electronically with the Commission. Our registration statement and
the referenced exhibits can also be found on this site.
Information Not Required In The Prospectus
Indemnification Of Directors And Officers
Our officers and directors are indemnified as provided by the Nevada
Revised Statutes and our bylaws.
Under the NRS, director immunity from liability to a company or its
shareholders for monetary liabilities applies automatically unless it
is specifically limited by a company's articles of incorporation that
is not the case with our articles of incorporation. Excepted from
that immunity are:
(1) a willful failure to deal fairly with the company or its
shareholders in connection with a matter in which the director
has a material conflict of interest;
(2) a violation of criminal law (unless the director had reasonable
cause to believe that his or her conduct was lawful or no
reasonable cause to believe that his or her conduct was
unlawful);
(3) a transaction from which the director derived an improper
personal profit; and
(4) willful misconduct.
Our bylaws provide that we will indemnify our directors and officers to
the fullest extent not prohibited by Nevada law; provided, however,
that we may modify the extent of such indemnification by individual
contracts with our directors and officers; and, provided, further,
that we shall not be required to indemnify any director or officer in
connection with any proceeding (or part thereof) initiated by such
person unless:
(1) such indemnification is expressly required to be made by law;
(2) the proceeding was authorized by our Board of Directors;
(3) such indemnification is provided by us, in our sole discretion,
pursuant to the powers vested us under Nevada law; or
(4) such indemnification is required to be made pursuant to the
bylaws.
Our bylaws provide that we will advance to any person who was or is a
party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or
was a director or officer, of the company, or is or was serving at
the request of the company as a director or executive officer of
another company, partnership, joint venture, trust or other
enterprise, prior to the final disposition of the proceeding,
promptly following request therefore, all expenses incurred by any
director or officer in connection with such proceeding upon receipt
of an undertaking by or on behalf of such person to repay said
amounts if it should be determined ultimately that such person is not
entitled to be indemnified under our bylaws or otherwise.
Our bylaws provide that no advance shall be made by us to an officer
of the company, except by reason of the fact that such officer is or
was a director of the company in which event this paragraph shall not
apply, in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, if a determination is reasonably and
promptly made: (a) by the board of directors by a majority vote of a
quorum consisting of directors who were not parties to the
proceeding, or (b) if such quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, that the facts known to the
decision-making party at the time such determination is made
demonstrate clearly and convincingly that such person acted in bad
faith or in a manner that such person did not believe to be in or not
opposed to the best interests of the company.
Other Expenses Of Issuance And Distribution
The estimated costs of this offering are as follows:
Securities and Exchange Commission registration fee $ 73
Federal Taxes $ NIL
State Taxes and Fees $ NIL
Transfer Agent Fees $ 600
Accounting fees and expenses $3,200
Legal fees and expenses $8,000
Blue Sky fees and expenses $ NIL
Miscellaneous $ NIL
--------
Total $11,873.00
========
All amounts are estimates other than the Commission's registration
fee.
We are paying all expenses of the offering listed above. No portion
of these expenses will be borne by the selling shareholders. The
selling shareholders, however, will pay any other expenses incurred
in selling their common stock, including any brokerage commissions or
costs of sale.
Recent Sales Of Unregistered Securities
We issued 1,500,000 shares of common stock on December 10, 2001 to Mr.
Dana Upton our president, secretary and treasurer and Mr. Nikolaos
Bekropoulos our director. Mr. Upton and Mr. Bekropoulos acquired 1,500,000
shares at a price of $0.001 per share for total proceeds to us of
$1,500.00. These shares were issued pursuant to
Section 4(2) of the Securities Act of 1933 (the "Securities Act") and
are restricted shares as defined in the Securities Act.
We initiated two other offerings totaling 1,900,000 shares of our common
stock at prices of $0.01 and $0.50 per share, of which 1,510,000 shares
were subscribed for at a price $0.01 and 77,000 shares at a price of $0.50
to a total of thirty eight purchasers between December 10, 2001 and July 8,
2002. The total amount received from these offerings were $53,600.00.
These offerings were pursuant to Regulation S of the Securities Act. Each
purchaser represented to us that he was a non-US person as defined in
Regulation S. We did not engage in a distribution of this offering in the
United States. Each purchaser represented his intention to acquire the
securities for investment only and not with a view toward distribution.
Appropriate legends will be affixed to the stock certificate when issued to
each purchaser in accordance with Regulation S. Each investor was given
adequate access to sufficient information about us to make an informed
investment decision. None of the securities were sold through an
underwriter and accordingly, there were no underwriting discounts or
commissions involved. No registration rights were granted to any of the
purchasers.
Exhibits
Exhibit
Number Description
1.1 Articles of Incorporation
2.1 By-Laws
3.1 Subscription Agreements
3.1a Directors Subscription Agreement
3.1b Subscription Agreement $0.01
3.1c Subscription Agreement $0.50
3.2 Disclosure Statement
4.1 Legal opinion by Arthur J. Frost Attorney at
Law with consent to use.
5.1 Option Agreement dated January 21, 2002
5.2 Joint Venture Agreement
5.3 Option Agreement dated January 22,2002
5.4 Joint Venture Agreement
5.5 Geological Report (Wheaton River), Prepared by William
Timmins P. Eng.
5.6 Geological Report (McConnell River), Prepared by William
Timmins P. Eng.
6.1 Consent of Morgan and Company, Chartered Accountants
EXHIBIT 1.1
ARTICLES OF INCORPORATION
OF
HUDSON VENTURES INC.
**************************************************************
The undersigned, acting as incorporator, pursuant to the provisions of
the laws of the State of
Nevada relating to private corporations, hereby adopts the
following Articles of Incorporation:
ARTICLE ONE. (NAME)
The name of the corporation is HUDSON VENTURES INC.
ARTICLE TWO. (RESIDENT AGENT) The initial agent for service
of process is THE NEVADA AGENCY and TRUST COMPANY, 50 WEST
LIBERTY STREET, SUITE 880, RENO NV 89501
ARTICLE THREE. (PURPOSES) The purposes for which the
corporation is organized are to engage in any activity or business not in
conflict with the laws of the State of Nevada or of the United States of
America, and without limiting the generality of the foregoing,
specifically:
I. (OMNIBUS). To have to exercise all the powers now
or hereafter conferred by the laws of the State of
Nevada upon corporations organized pursuant to the laws
under which the corporation is organized and any and
all acts amendatory thereof and supplemental thereto.
II. (CARRYING ON BUSINESS OUTSIDE STATE). To conduct
and carry on its business or any branch thereof in any
state or territory of the United States or in any
foreign country in conformity with the laws of such
state, territory, or foreign country, and to have and
maintain in any state, territory, or foreign country a
business office, plant, store or other facility.
III. (PURPOSES TO BE CONSTRUED AS POWERS). The purposes
specified herein shall be construed both as purposes
and powers and shall be in no wise limited or
restricted by reference to, or inference from, the
terms of any other clause in this or any other article,
but the purposes and powers specified in each of the
clauses herein shall be regarded as independent
purposes and powers, and the enumeration of specific
purposes and powers shall not be construed to limit or
restrict in any manner the meaning of general terms or
of the general powers of the corporation; nor shall the
expression of one thing be deemed to exclude another,
although it be of like nature not expressed.
ARTICLE FOUR. (CAPITAL STOCK) The corporation shall have
authority to issue an aggregate of SIXTY MILLION(110,000,000) shares
of stock, par value ONE MILL ($0.001) per share divided into two (2)
classes of stock as follows for a total capitalization of SIXTY
THOUSAND ($60,000).
(A) NON-ASSESSABLE COMMON STOCK: FIFTY MILLION (50,000,000) shares of
Common stock, Par Value ONE MILL ($0.001) per share, and
(B) PREFERRED STOCK: TEN MILLION (10,000,000) shares of Preferred stock,
Par Value ONE MILL ($0. 001) per share.
All capital stock when issued shall be fully paid and non-assessable.
No holder of shares of capital stock of the corporation shall be entitled
as such to any pre-emptive or preferential rights to subscribe to any
unissued stock, or any other securities, which the corporation may now or
hereafter be authorized to issue.
The corporation's capital stock may be issued and sold from time to
time for such consideration as may be fixed by the Board of Directors,
provided that the consideration so fixed is not less than par value.
Holders of the corporation's Common Stock shall not possess cumulative
voting rights at any shareholders meetings called for the purpose of
electing a Board of Directors or on other matters brought
before stockholders meetings, whether they be annual or special.
ARTICLE FIVE. (DIRECTORS). The affairs of the corporation
shall be governed by a Board of Directors of not more than fifteen (15) nor
less than one (1) person. The name and address of the first Board of
Directors is:
NAME
ADDRESS
Dana Upton 444
East Columbia Street
New Westminster BC
Canada V3L 3W9
Nikolaos Bekropoulos
20 Woodfield Green SW
Calgary AB, Canada
T2W 3T9
ARTICLE SIX. (ASSESSMENT OF STOCK). The
capital stock of the corporation, after the amount of the subscription
price or par value has been paid in, shall not be subject to pay debts of
the corporation, and no paid up stock and no stock issued as fully paid up
shall ever be assessable or assessed.
ARTICLE SEVEN. (INCORPORATOR). The name and address of
the incorporator of the corporation is as follows:
NAME ADDRESS
Dana Upton 444
East Columbia Street
New Westminster BC
Canada V3L 3W9
ARTICLE EIGHT. (PERIOD OF EXISTENCE). The period of
existence of the Corporation shall be perpetual.
ARTICLE NINE. (BY-LAWS) Its Board of Directors shall adopt
the initial By-laws of the corporation. The power to alter, amend, or
repeal the By-laws, or to adopt new By-laws, shall be vested in the Board
of Directors, except as otherwise may be specifically provided in the By-
laws.
ARTICLE TEN. (STOCKHOLDERS' MEETINGS). Meetings of
stockholders shall be held at such place within or without the State of
Nevada as may be provided by the By-laws of the corporation. The President
or any other executive officer of the corporation, the Board of Directors,
or any member may call special meetings of the stockholders thereof, or by
the record holder or holders of at least ten percent (10%) of all shares
entitled to vote at the meeting. Any action otherwise required to be taken
at a meeting of the stockholders, except election of directors, may be
taken without a meeting if a consent in writing, setting forth the action
so taken, shall be signed by stockholders having at least a majority of the
voting power.
ARTICLE ELEVEN. (CONTRACTS OF CORPORATION) No contract or
other transaction between the corporation and any other corporation,
whether or not a majority of the shares of the capital stock of such other
corporation is owned by this corporation, and no act of this corporation
shall be any way be affected or invalidated by the fact that any of the
directors of this corporation are pecuniarily or otherwise interested in,
or are directors or officers of such other corporation. Any director of
this corporation, individually, or any firm of which such director may be a
member, may be a party to, or may be pecuniarily or otherwise interested in
any contract or transaction of the corporation; provided, however, that the
fact that he or such firm is so interested shall be disclosed or shall have
been known to the Board of Directors of this corporation, or a majority
thereof; and any director of this corporation who is also a director or
officer of such other corporation, or who is so interested, may e counted
in determining the existence of a quorum at any meeting of the Board of
Directors of this corporation that shall authorize such contract or
transaction, and may vote thereat to authorize such contract or
transaction, with like force and effect as if he were no such director or
officer of such other corporation or not so interested.
ARTICLE TWELVE. (LIABILITY OF DIRECTORS AND OFFICERS) No
director or officer shall have any personal liability to the corporation or
its stockholders for damages for breach of fiduciary duty as a director or
officer, except that this Article Twelve shall not eliminate or limit the
liability of a director or officer for (I) acts or omissions which involve
intentional misconduct, fraud or a knowing violation of law, or (ii) the
payment of dividends in violation of the Nevada Revised Statutes.
IN WITNESS WHEREOF. The undersigned incorporator has
hereunto affixed his/her signature at Vancouver , British Columbia, Canada
DANA UPTON, PRESIDENT
HUDSON VENTURES INC. /S/ DANA UPTON
EXHIBIT 1.2
BYLAWS OF
HUDSON VENTURES INC.
CONTENTS OF INITIAL BYLAWS
ARTICLE PAGE
1.00 CORPORATE CHARTER AND BYLAWS
1.0 Corporate Charter Provisions 1
1.02 Registered Agent or Office Requirement
of Filing Changes with Secretary of State 1
1.03 Initial Business Office 1
Amendment of Bylaws 1
2.0 DIRECTORS AND DIRECTORS MEETINGS
2.01 Action Without Meeting 1
2.02 Telephone Meeting 1
2.03 Place of Meeting 2
2.04 Regular Meeting 2
2.05 Call of Special Meeting 2
2.06 Quorum 2
2.07 Adjournment Notice of Adjourned Meetings 2
2.08 Conduct of Meetings 3
2.09 PoIs of the Board of Directors 3
2.10 Board Committees Authority to Appoint 3
2.11 Transactions with Interested Director 3
2.12 Number of Directors 3
2.13 Term of Office 3
2.14 Removal of Directors 4
2.15 Vacancies 4
2.15 (a) Declaration of Vacancy 4
2.15 (b) Filling Vacancies by Directors 4
2.15 (c) Filling Vacancies by Shareholders 4
2.16 Compensation 4
2.17 Indemnification of Directors and Officers 4
2.18 Insuring Directors, Officers, and Employees 5
3.00 SHAREHOLDERS` MEETINGS
3.01 Action Without Meeting 5
3.02 Telephone Meetings 5
3.03 Place of Meeting 5
3.04 Notice of Meetings 5
3.05 Voting List 5
3.06 Votes per Share 6
3.07 Cumulative Voting 6
3.08 Quorum 6
3.09 (a) Quorum of Shareholders 6
3.09 (b) Adjourn for Lack or Loss of Quorum 6
3.10 Voting by Voice or Ballot 6
Article Page
3.11 Conduct of Meetings 6
3.12 Annual Meeting 7
3.13 Failure to Hold Annual Meeting 7
3.14 Special Meetings 7
4.00 OFFICERS
4.01 Title and Appointment 7
4.01 (a) Chairman 7
4.01 (b) President 7
4.01 (c) Vice President 8
4.01 (d) Secretary 8
4.01 (e) Treasurer 8
4.01 (f) Assistant Secretary or Assistant Treasurer 8
4.02 Removal and Resignation 8
4.03 Vacancies 9
4.04 Compensation 9
5.00 AUTHORITY TO EXECUTE INSTRUMENTS
5.01 No Authority Absent Specific Authorization 9
5.02 Execution of Certain Instruments 9
6.00 ISSUANCE AND TRANSFER OF SHARES
6.01 Classes and Series of Shares 9
6.02 Certificates for Fully Paid Shares 9
6.03 Consideration for Shares 10
6.04 Replacement of Certificates 10
6.05 Signing Certificates Facsimile Signatures 10
6.06 Transfer Agents and Registrars 10
6.07 Conditions of Transf 10
6.08 Reasonable Doubts as to Right to Transfer 10
7.00 CORPORATE RECORDS AND ADMINISTRATION
7.01Minutes of Corporate Meetings 11
7.02 Share Register 11
7.03 Corporate Seal 11
7.04 Books of Account 11
7.05 Inspection of Corporate Records 11
7.06 Fiscal Year 11
7.07 Waiver of Notice 12
8.00ADOPTION OF INITIAL BYLAWS 12
ARTICLE ONE CORPORATE CHARTER AND BYLAWS
1.01 CORPORATE CHARTER PROVISIONS
The Corporations Charter authorizes one hundred and ten million (110,000,000)
shares to be issued. The officers and transfer agents issuing shares of the
Corporation shall ensure that the total number of shares outstanding at any
given time does not exceed this number. Such officers and agents shall
advise the Board at least annually of the authorized shares remaining
available to be issued. No shares shall be issued for less than the par
value stated in the Charter. Each Charter provision shall be observed until
amended by Restated Articles or Articles of Amendment duly filed with the
Secretary of State.
1.02 REGISTERED AGENT AND OFFICE REQUIREMENT OF FILING CHANGES
WITH SECRETARY OF STATE
The name of the Registered Agent of the Corporation at such address, as set
forth in its Articles of Incorporation, is: The Nevada Agency and Trust
Company 50 Liberty Street Suite 880 Reno Nevada, USA 89501.
The Registered Agent or Office may be changed by filing a Statement of
Change of Registered Agent or Office or both with the Secretary of State,
and not otherwise. Such filing shall be made promptly with each change.
Arrangements for each change in Registered Agent or Office shall ensure
that the Corporation is not exposed to the possibility of a default
judgment. Each successive Registered Agent shall be of reliable character
and Ill informed of the necessity of immediately furnishing the papers of
any lawsuit against the Corporation to its attorneys.
1.03 INITIAL BUSINESS OFFICE
The address of the initial principal business office of the Corporation is
hereby established as:444 East Columbia Street, New Westminster British
Columbia Canada . The Corporation may have additional business offices
within the State of Nevada and where it may be duly qualified to do
business outside of Nevada, as the Board of Directors may from time to time
designate or the business of the Corporation may require.
1.04 AMENDMENT OF BYLAWS
The Shareholders or Board of Directors, subject to any limits imposed by
the Shareholders, may amend or repeal these Bylaws and adopt new Bylaws.
All amendments shall be upon advice of counsel as to legality, except in
emergency. Bylaw changes shall take effect upon adoption unless otherwise
specified. Notice of Bylaws changes shall be given in or before notice
given of the first Shareholders' meeting following their adoption.
ARTICLE TWO DIRECTORS AND DIRECTORS' MEETINGS
2.01 ACTION BY CONSENT OF BOARD WITHOUT MEETING
Any action required or permitted to be taken by the Board of Directors may
be taken without a meeting, and shall have the same force and effect as a
unanimous vote of Directors, if all members of the Board consent in writing
to the action. Such consent may be given individually or collectively.
2.02 TELEPHONE MEETINGS
Subject to the notice provisions required by these Bylaws and by the
Business Corporation Act, Directors may participate in and hold a meeting
by means of conference call or similar communication by which all persons
participating can hear each other. Participation in such a meeting shall
constitute presence in person at such meeting, except participation for the
express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
2.03 PLACE OF MEETINGS
Meetings of the Board of Directors shall be held at the business office of
the Corporation or at such other place within or without the State of
Nevada as may be designated by the Board.
2.04 REGULAR MEETINGS
Regular meetings of the Board of Directors shall be held, without call or
notice, immediately following each annual Shareholders' meeting, and at
such other regularly repeating times as the Directors may determine.
2.05 CALL OF SPECIAL MEETING
Special meetings of the Board of Directors for any purpose may be called at
any time by the President or, if the President is absent or unable or
refuses to act, by any Vice President or any two Directors. Written notices
of the special meetings, stating the time and place of the meeting, shall
be mailed ten days before, or telegraphed or personally delivered so as to
be received by each Director not later than two days before, the day
appointed for the meeting. Notice of meetings need not indicate an agenda.
Generally, a tentative agenda will be included, but the meeting shall not
be confined to any agenda included with the notice.
Meetings provided for in these Bylaws shall not be invalid for lack of
notice if all persons entitled to notice consent to the meeting in writing
or are present at the meeting and do not object to the notice given.
Consent may be given either before or after the meeting.
Upon providing notice, the Secretary or other officer sending notice shall
sign and file in the Corporate Record Book a statement of the details of
the notice given to each Director. If such statement should later not be
found in the Corporate Record Book, due notice shall be presumed.
2.06 QUORUM
The presence throughout any Directors' meeting, or adjournment thereof, of
a majority of the authorized number of Directors shall be necessary to
constitute a quorum to transact any business, except to adjourn. If a
quorum is present, every act done or resolution passed by a majority of the
Directors present and voting shall be the act of the Board of Directors.
2.07 ADJOURNMENT AND NOTICE OF ADJOURNED MEETINGS
A quorum of the Directors may adjourn any Directors' meeting to meet again
at a stated hour on a stated day. Notice of the time and place where an
adjourned meeting will be held need not be given to absent Directors if the
time and place is fixed at the adjourned meeting. In the absence of a
quorum, a majority of the Directors present may adjourn to a set time and
place if notice is duly given to the absent members, or until the time of
the next regular meeting of the Board.
2.08 CONDUCT OF MEETINGS
At every meeting of the Board of Directors, the Chairman of the Board, if
there is such an officer, and if not, the President, or in the President's
absence, a Vice President designated by the President, or in the absence of
such designation, a Chairman chosen by a majority of the Directors present,
shall preside. The Secretary of the Corporation shall act as Secretary of
the Board of Directors' meetings. When the Secretary is absent from any
meeting, the Chairman may appoint any person to act as Secretary of that
meeting.
2.09 POWERS OF THE BOARD OF DIRECTORS
The business and affairs of the Corporation and all corporate power shall
be exercised by or under authority of the Board of Directors, subject to
limitations imposed by law, the Articles of Incorporation, any applicable
Shareholders' agreement, and these Bylaws.
2.10 BOARD COMMITTEES AUTHORITY TO APPOINT
The Board of Directors may designate an executive committee and one or more
other committees to conduct the business and affairs of the Corporation to
the extent authorized. The Board shall have the powers at any time to
change the powers and membership of, fill vacancies in, and dissolve any
committee. Members of any committee shall receive such compensation as the
Board of Directors may from time to time provide. The designation of any
committee and the delegation of authority thereto shall not operate to
relieve the Board of Directors, or any member thereof, of any
responsibility imposed by law.
2.11 TRANSACTIONS WITH INTERESTED DIRECTORS
Any contract or other transaction between the Corporation and any of its
Directors (or any corporation or firm in which any of its Directors are
directly or indirectly interested) shall be valid for all purposes
notwithstanding the presence of that Director at the meeting during which
the contract or transaction was authorized, and notwithstanding the
Directors' participation in that meeting. This section shall apply only if
the contract or transaction is just and reasonable to the Corporation at
the time it is authorized and ratified, the interest of each Director is
known or disclosed to the Board of Directors, and the Board nevertheless
authorizes or ratifies the contract or transaction by a majority of the
disinterested Directors present. Each interested Director is to be counted
in determining whether a quorum is present, but shall not vote and shall
not be counted in calculating the majority necessary to carry the vote.
This section shall not be construed to invalidate contracts or transactions
that would be valid in its absence.
2.12 NUMBER OF DIRECTORS
The number of Directors of this Corporation shall be no more than fifteen
(15) or less than one (1). No Director need be a resident of Nevada or a
Shareholder. The number of Directors may be increased or decreased from
time to time by amendment to these Bylaws. Any decrease in the number of
Directors shall not have the effect of shortening the tenure, which any
incumbent Director would otherwise enjoy.
2.13 TERM OF OFFICE
Directors shall be entitled to hold office until their successors are
elected and qualified. Election for all Director positions, vacant or not
vacant, shall occur at each annual meeting of the Shareholders and may be
held at any special meeting of Shareholders called specifically for that
purpose.
2.14 REMOVAL OF DIRECTORS
The entire Board of Directors or any individual Director may be removed
from office by a vote of Shareholders holding a majority of the outstanding
shares entitled to vote at an election of Directors. However, if less than
the entire Board is to be removed, no one of the Directors may be removed
if the votes cast against his removal would be sufficient to elect him if
then cumulatively voted at an election of the entire Board of Directors. No
director may be so removed except at an election of the class of Directors
of which he is a part. If any or all Directors are so removed, new
Directors may be elected at the same meeting. Whenever a class or series of
shares is entitled to elect one or more Directors under authority granted
by the Articles of Incorporation, the provisions of this Paragraph apply to
the vote of that class or series and not to the vote of the outstanding
shares as a whole.
2.15 VACANCIES
Vacancies on the Board of Directors shall exist upon the occurrence of any
of the following events: (a) the death, resignation, or removal of any
Director; (b) an increase in the authorized number of Directors; or (c) the
failure of the Shareholders to elect the full authorized number of
Directors to be voted for at any annual, regular, or special Shareholders'
meeting at which any Director is to be elected.
2.15(a) DECLARATION OF VACANCY
A majority of the Board of Directors may declare vacant the office of a
Director if the Director: (a) is adjudged incompetent by a court order; (b)
is convicted of a crime involving moral turpitude; (c) or fails to accept
the office of Director, in writing or by attending a meeting of the Board
of Directors, within thirty (30) days of notice of election.
2.15(b) FILLING VACANCIES BY DIRECTORS
Vacancies other than those caused by an increase in the number of Directors
may be filled temporarily by majority vote of the remaining Directors,
though less than a quorum, or by a sole remaining Director. Each Director
so elected shall hold office until a qualified successor is elected at a
Shareholders' meeting.
2.15(c) FILLING VACANCIES BY SHAREHOLDERS
Any vacancy on the Board of Directors, including those caused by an
increase in the number of Directors shall be filled by the Shareholders at
the next annual meeting or at a special meeting called for that purpose.
Upon the resignation of a Director tendered to take effect at a future
time, the Board or the Shareholders may elect a successor to take office
when the resignation becomes effective.
2.16 COMPENSATION
Directors shall receive such compensation for their services as Directors
as shall be determined from time to time by resolution of the Board. Any
Director may serve the Corporation in any other capacity as an officer,
agent, employee, or otherwise, and receive compensation therefor.
2.17 INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Board of Directors shall authorize the Corporation to pay or reimburse
any present or former Director or officer of the Corporation any costs or
expenses actually and necessarily incurred by that officer in any action,
suit, or proceeding to which the officer is made a party by reason of
holding that position, provided, however, that no officer shall receive
such indemnification if finally adjudicated therein to be liable for
negligence or misconduct in office. This indemnification shall extend to
good-faith expenditures incurred in anticipation of threatened or proposed
litigation. The Board of Directors may in proper cases, extend the
indemnification to cover the good-faith settlement of any such action,
suit, or proceeding, whether formally instituted or not.
2.18 INSURING DIRECTORS, OFFICERS, AND EMPLOYEES
The Corporation may purchase and maintain insurance on behalf of any
Director, officer, employee, or agent of the Corporation, or on behalf of
any person serving at the request of the Corporation as a Director,
officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against any liability asserted against
that person and incurred by that person in any such corporation, whether or
not the Corporation has the poIr to indemnify that person against liability
for any of those acts.
ARTICLE THREE SHAREHOLDERS' MEETINGS
3.01 ACTION WITHOUT MEETING
Any action that may be taken at a meeting of the Shareholders under any
provision of the Colorado Business Corporation Act may be taken without a
meeting if authorized by a consent or waiver filed with the Secretary of
the Corporation and signed by all persons who would be entitled to vote on
that action at a Shareholders' meeting. Each such signed consent or waiver,
or a true copy thereof, shall be placed in the Corporate Record Book.
3.02 TELEPHONE MEETINGS
Subject to the notice provisions required by these Bylaws and by the
Business Corporation Act, Shareholders may participate in and hold a
meeting by means of conference call or similar communication by which all
persons participating can hear each other. Participation in such a meeting
shall constitute presence in person at such meeting, except participation
for the express purpose of objecting to the transaction of any business on
the ground that the meeting is not lawfully called or convened.
3.03 PLACE OF MEETINGS
Shareholders' meetings shall be held at the business office of the
Corporation, or at such other place within or without the State of Colorado
as may be designated by the Board of Directors or the Shareholders.
3.04 NOTICE OF MEETINGS
The President, the Secretary, or the officer or persons calling a
Shareholders' Meeting. shall give notice, or cause it to be given, in
writing to each Director and to each Shareholder entitled to vote at the
meeting at least ten (10) but not more than sixty (60) days before the date
of the meeting. Such notice shall state the place, day, and hour of the
meeting, and, in case of a special meeting, the purpose or purposes for
which the meeting is called. Such written notice may be given personally,
by mail, or by other means. Such notice shall be addressed to each
recipient at such address as appears on the Books of the Corporation or as
the recipient has given to the Corporation for the purpose of notice.
Meetings provided for in these Bylaws shall not be invalid for lack of
notice if all persons entitled to notice consent to the meeting in writing
or are present at the meeting in person or by proxy and do not object to
the notice given, Consent may be given either before or after the meeting.
Notice of the reconvening of an adjourned meeting is not necessary unless
the meeting is adjourned more than thirty days past the date stated in the
notice, in which case notice of the adjourned meeting shall be given as in
the case of any special meeting. Notice may be waived by written waivers
signed either before or after the meeting by all persons entitled to the
notice.
3.05 VOTING LIST
At least ten (10), but not more than sixty (60), days before each
Shareholders' meeting, the officer or agent having charge of the
Corporation's share transfer books shall make a complete list of the
Shareholders entitled to vote at that meeting or any adjournment thereof,
arranged in alphabetical order, with the address and the number of shares
held by each. The list shall be kept on file at the Registered Office of
the Corporation for at least ten (10) days prior to the meeting, and shall
be subject to inspection by any Director, officer, or Shareholder at any
time during usual business hours. The list shall also be produced and kept
open at the time and place of the meeting and shall be subject, during the
whole time of the meeting, to the inspection of any Shareholder. The
original share transfer books shall be prima facie evidence as to the
Shareholders entitled to examine such list or transfer books or to vote at
any meeting of Shareholders. However, failure to prepare and to make the
list available in the manner provided above shall not affect the validity
of any action taken at the meeting.
3.06 VOTES PER SHARE
Each outstanding share, regardless of class, shall be entitled to one (1)
vote on each matter submitted to a vote at a meeting of Shareholders,
except to the extent that the voting rights of the shares of any class or
classes are limited or denied pursuant to the Articles of Incorporation. A
Shareholder may vote in person or by proxy executed in writing by the
Shareholder, or by the Shareholder's duly authorized attorney-in-fact.
3.07 CUMULATIVE VOTING
Cumulative voting is expressly forbidden
3.08 PROXIES
A Shareholder may vote either in person or by proxy executed in writing by
the Shareholder or his or her duly authorized attorney in fact. Unless
otherwise provided in the proxy or by law, each proxy shall be revocable
and shall not be valid after eleven (11) months from the date of its
execution,
3.09 QUORUM
3.09(a) QUORUM OF SHAREHOLDERS
As to each item of business to be voted on, the presence (in person or by
proxy) of the persons who are entitled to vote a majority of the
outstanding voting shares on that matter shall constitute the quorum
necessary for the consideration of the matter at a Shareholders' meeting.
The vote of the holders of a majority of the shares entitled to vote on the
matter and represented at a meeting at which a quorum is present shall be
the act of the Shareholders' meeting.
3.09(b) ADJOURNMENT FOR LACK OR LOSS OF QUORUM
No business may be transacted in the absence of a quorum, or upon the
withdrawal of enough Shareholders to leave less than a quorum; other than
to adjourn the meeting from time to time by the vote of a majority of the
shares represented at the meeting.
3.10 VOTING BY VOICE OR BALLOT
Elections for Directors need not be by ballot unless a Shareholder demands
election by ballot before the voting begins.
3.11 CONDUCT OF MEETINGS
Meetings of the Shareholders shall be chaired by the President, or, in the
President's absence, a Vice President designated by the President, or, in
the absence of such designation, any other person chosen by a majority of
the Shareholders of the Corporation present in person or by proxy and
entitled to vote. The Secretary of the Corporation, or, in the Secretary's
absence, an Assistant Secretary, shall act as Secretary of all meetings of
the Shareholders. In the absence of the Secretary or Assistant Secretary,
the Chairman shall appoint another person to act as Secretary of the
meeting.
3.12 ANNUAL MEETINGS
The time, place, and date of the annual meeting of the Shareholders of the
Corporation, for the purpose of electing Directors and for the transaction
of any other business as may come before the meeting, shall be set from
time to time by a majority vote of the Board of Directors. If the day fixed
for the annual meeting shall be on a legal holiday in the State of
Colorado, such meeting shall be held on the next succeeding business day.
If the election of Directors is not held on the day thus designated for any
annual meeting, or at any adjournment thereof, the Board of Directors shall
cause the election to be held at a special meeting of the Shareholders as
soon thereafter as possible.
3.13 FAILURE TO HOLD ANNUAL MEETING
If, within any 13-month period, an annual Shareholders' Meeting is not
held, any Shareholder may apply to a court of competent jurisdiction in the
county in which the principal office of the Corporation is located for a
summary order that an annual meeting be held.
3.14 SPECIAL MEETINGS
A special Shareholders' meeting may be called at any time by. (a) the
President; (b) the Board of Directors; or (c) one or
more Shareholders holding in the aggregate one-tenth or more of all the
shares entitled to vote at the meeting. Such meeting may be called for any
purpose. The party calling the meeting may do so only by written request
sent by registered mail or delivered in person to the President or
Secretary. The officer receiving the written request shall within ten (10)
days from the date of its receipt cause notice of the meeting to be sent to
all the Shareholders entitled to vote at such a meeting. If the officer
does not give notice of the meeting within ten (10) days after the date of
receipt of the written request, the person or persons calling the meeting
may fix the time of the meeting and give the notice. The notice shall be
sent pursuant to Section 3.04 of these Bylaws. The notice of a special
Shareholders' meeting must state the purpose or purposes of the meeting
and, absent consent of every Shareholder to the specific action taken,
shall be limited to purposes plainly stated in the notice, notwithstanding
other provisions herein.
ARTICLE FOUR OFFICERS
4.01 TITLE AND APPOINTMENT
The officers of the Corporation shall be a President and a Secretary, as
required by law. The Corporation may also have, at the discretion of the
Board of Directors, a Chairman of the Board, one or more Vice Presidents, a
Treasurer, one or more Assistant Secretaries, and one or more Assistant
Treasurers. One person may hold any two or more offices, including
President and Secretary. All officers shall be elected by and hold office
at the pleasure of the Board of Directors, which shall fix the compensation
and tenure of all officers.
4.01(a) CHAIRMAN OF THE BOARD
The Chairman, if there shall be such an officer, shall, if present, preside
at the meetings of the Board of Directors and exercise and perform such
other powers and duties as may from time to time be assigned to the
Chairman by the Board of Directors or prescribed by these Bylaws.
4.01(b) PRESIDENT
Subject to such supervisory powers, if any, as may be given to the
Chairman, if there is one, by the Board of Directors, the President shall
be the chief executive officer of the Corporation and shall, subject to the
control of the Board of Directors, have general supervision, direction, and
control of the business and officers of the Corporation. The President
shall have the general powers and duties of management usually vested in
the office of President of a corporation; shall have such other powers and
duties as may be prescribed by the Board of Directors or the Bylaws; and
shall be ex officio a member of all standing committees, including the
executive committee, if any. In addition, the President shall preside at
all meetings of the Shareholders and in the absence of the Chairman, or if
there is no Chairman, at all meetings of the Board of Directors.
4.01(c) VICE PRESIDENT
Any Vice President shall have such powers and perform such duties as from
time to time may be prescribed by these Bylaws, by the Board of Directors,
or by the President. In the absence or disability of the President, the
senior or duly appointed Vice President, if any, shall perform all the
duties of the President, pending action by the Board of Directors when so
acting, such Vice President shall have all the powers of, and be subject to
all the restrictions on, the President.
4.01(d) SECRETARY
The Secretary shall:
A. See that all notices are duly given in accordance with the provisions
of these Bylaws and as required by law. In case of the absence or
disability of the Secretary. or the Secretary's refusal or neglect to act,
notice may be given and served by an Assistant Secretary or by the
Chairman, the President, any Vice President, or by the Board of Directors.
B. Keep the minutes of corporate meetings, and the Corporate Record Book,
as set out in Section 7.01 hereof.
C. Maintain, in the Corporate Record Book, a record of all share
certificates issued or canceled and all shares of the Corporation
canceled or transferred.
D. Be custodian of the Corporation's records and of any seal, which the
Corporation may from time to time adopt. when the Corporation
exercises its right to use a seal, the Secretary shall see that the
seal is embossed on all share certificates prior to their issuance and
on all documents authorized to be executed under seal in accordance
with the provisions of these Bylaws.
E. In general, perform all duties incident to the office of Secretary, and
such other duties as from time to time may be required by Sections 7.01,
7.02, and 7.03 of these Bylaws, by these Bylaws generally, by the Board of
Directors, or by the President.
4.01(e) TREASURER
The Treasurer shall:
F. Have charge and custody of, and be responsible for, all funds and
securities of the Corporation, and deposit all funds in the name of
the Corporation in those banks, trust companies, or other depositories
that shall be selected by the Board of Directors.
G. Receive, and give receipt for, monies due and payable to the
Corporation.
H. Disburse or cause to be disbursed the funds of the Corporation as may
be directed by the Board of Directors, taking proper vouchers for
those disbursements.
I. If required by the Board of Directors or the President, give to the
Corporation a bond to assure the faithful performance of the duties of
the Treasurer's office and the restoration to the Corporation of all
corporate books, papers, vouchers, money, and other property of
whatever kind in the Treasurer's possession or control, in case of the
Treasurer's death, resignation, retirement, or removal from office.
Any such bond shall be in a sum satisfactory to the Board of
Directors, with one or more sureties or a surety company satisfactory
to the Board of Directors.
J. In general, perform all the duties incident to the office of Treasurer
and such other duties as from time to time may be assigned to the
Treasurer by Sections 7.O4 and 7.05 of these Bylaws, by these Bylaws
generally, by the Board of Directors, or by the President.
4.01(f) ASSISTANT SECRETARY AND ASSISTANT TREASURER
The Assistant Secretary or Assistant Treasurer shall have such powers and
perform such duties as the Secretary or Treasurer, respectively, or as the
Board of Directors or President may prescribe. In case of the absence of
the Secretary or Treasurer, the senior Assistant Secretary or Assistant
Treasurer, respectively, may perform all of the functions of the Secretary
or Treasurer.
4.02 REMOVAL AND RESIGNATION
Any officer may be removed, either with or without cause, by vote of a
majority of the Directors at any regular or special meeting of the Board,
or, except in case of an officer chosen by the Board of Directors, by any
committee or officer upon whom that power of removal may be conferred by
the Board of Directors. Such removal shall be without prejudice to the
contract rights, if any, of the person removed. Any officer may resign at
any time by giving written notice to the Board of Directors, the President,
or the Secretary of the Corporation. Any resignation shall take effect on
the date of the receipt of that notice or at any later time specified
therein, and, unless otherwise specified therein, the acceptance of that
resignation shall not be necessary to make it effective.
4.03 VACANCIES
Upon the occasion of any vacancy occurring in any office of the
Corporation, by reason of death, resignation, removal, or otherwise, the
Board of Directors may elect an acting successor to hold office for the
unexpired term or until a permanent successor is elected.
4.04 COMPENSATION
The compensation of the officers shall be fixed from time to time by the
Board of Directors, and no officer shall be prevented from receiving a
salary by reason of the fact that the officer is also a Shareholder or a
Director of the Corporation, or both.
ARTICLE FIVE - AUTHORITY TO EXECUTE INSTRUMENTS
5.01 NO AUTHORITY ABSENT SPECIFIC AUTHORIZATION
These Bylaws provide certain authority for the execution of instruments.
The Board of Directors, except as otherwise provided in these Bylaws, may
additionally authorize any officer or officers, agent or agents, to enter
into any contract or execute and deliver any instrument in the name of and
on behalf of the Corporation, and such authority may be general or
confined to specific instances. Unless expressly authorized by these Bylaws
or the Board of Directors, no officer, agent, or employee shall have any
power or authority to bind the Corporation by any contract or engagement
nor to pledge its credit nor to render it peculiarly liable for any purpose
or in any amount.
5.02 EXECUTION OF CERTAIN INSTRUMENTS
Formal contracts of the Corporation, promissory notes, deeds, deeds of
trust, mortgages, pledges, and other evidences of indebtedness of the
Corporation, other corporate documents, and certificates of ownership of
liquid assets held by the Corporation shall be signed or endorsed by the
President or any Vice President and by the Secretary or the Treasurer,
unless otherwise specifically determined by the Board of Directors or
otherwise required by law.
ARTICLE SIX - ISSUANCE AND TRANSFER OF SHARES
6.01 CLASSES AND SERIES OF SHARES
The Corporation may issue one or more classes or series of shares, or both.
Any of these classes or series may have full, limited, or no voting rights,
and may have such other preferences, rights, privileges, and restrictions
as are stated or authorized in the Articles of Incorporation. All shares of
any one class shall have the same voting, conversion, redemption, and other
rights, preferences, privileges, and restrictions, unless the class is
divided into series, If a class is divided into series, all the shares of
any one series shall have the same voting, conversion, redemption, and
other. rights, preferences, privileges, and restrictions. There shall
always be a class or series of shares outstanding that has complete voting
rights except as limited or restricted by voting rights conferred on some
other class or series of outstanding shares.
6.02 CERTIFICATES FOR FULLY PAID SHARES
Neither shares nor certificates representing shares may be issued by the
Corporation until the full amount of the consideration has been received
when the consideration has been paid to the Corporation, the shares shall
be deemed to have been issued and the certificate representing the shares
shall be issued to the shareholder.
6.03 CONSIDERATION FOR SHARES
Shares may be issued for such consideration as may be fixed from time to
time by the Board of Directors, but not less than the par value stated in
the Articles of Incorporation. The consideration paid for the issuance of
shares shall consist of money paid, labor done, or property actually
received, and neither promissory notes nor the promise of future services
shall constitute payment nor partial payment for shares of the Corporation.
6.04 REPLACEMENT OF CERTIFICATES
No replacement share certificate shall be issued until the former
certificate for the shares represented thereby shall have been surrendered
and canceled, except that replacements for lost or destroyed certificates
may be issued, upon such terms, conditions, and guarantees as the Board may
see fit to impose, including the filing of sufficient indemnity.
6.05 SIGNING CERTIFICATES-FACSIMILE SIGNATURES
All share certificates shall be signed by the officer(s) designated by the
Board of Directors. The signatures of the foregoing officers may be
facsimiles. If the officer who has signed or whose facsimile signature has
been placed on the certificate has ceased to be such officer before the
certificate issued, the certificate may be issued by the Corporation with
the same effect as if he or she Ire such officer on the date of its
issuance.
6.06 TRANSFER AGENTS AND REGISTRARS
The Board of Directors may appoint one or more transfer agents or transfer
clerks, and one or more registrars, at such times and places as the
requirements of the Corporation may necessitate and the Board of Directors
may designate. Each registrar appointed, if any, shall be an incorporated
bank or trust company, either domestic or foreign.
6.07 CONDITIONS OF TRANSFER
The party in whose name shares of stock stand on the books of the
Corporation shall be deemed the owner thereof as regards the Corporation,
provided that whenever any transfer of shares shall be made for collateral
security, and not absolutely, and prior written notice thereof shall be
given to the Secretary of the Corporation, or to its transfer agent, if
any, such fact shall be stated in the entry of the transfer.
6.08 REASONABLE DOUBTS AS TO RIGHT TO TRANSFER
When a transfer of shares is requested and there is reasonable doubt as to
the right of the person seeking the transfer, the Corporation or its
transfer agent, before recording the transfer of the shares on its books or
issuing any certificate there for, may require from the person seeking the
transfer reasonable proof of that person's right to the transfer. If there
remains a reasonable doubt of the right to the transfer, the Corporation
may refuse a transfer unless the person gives adequate security or a bond
of indemnity executed by a corporate surety or by two individual sureties
satisfactory to the Corporation as to form, amount, and responsibility of
sureties. The bond shall be conditioned to protect the Corporation, its
officers, transfer agents, and registrars, or any of them, against any
loss, damage, expense, or other liability for the transfer or the issuance
of a new certificate for shares.
ARTICLE SEVEN - CORPORATE RECORDS AND ADMINISTRATION
7.01 MINUTES OF CORPORATE MEETINGS
The Corporation shall keep at the principal office, or such other place as
the Board of Directors may order, a book recording the minutes of all
meetings of its Shareholders and Directors, with the time and place of each
meeting, whether such meeting was regular or special, a copy of the notice
given of such meeting, or of the written waiver thereof, and, if it is a
special meeting, how the meeting was authorized. The record book shall
further show the number of shares present or represented at Shareholders'
meetings, and the names of those present and the proceedings of all
meetings.
7.02 SHARE REGISTER
The Corporation shall keep at the principal office, or at the office of the
transfer agent, a share register showing the names of the Shareholders,
their addresses, the number and class of shares issued to each, the number
and date of issuance of each certificate issued for such shares, and the
number and date of cancellation of every certificate surrendered for
cancellation. The above information may be kept on an information storage
device such as a computer, provided that the device is capable of
reproducing the information in clearly legible form. If the Corporation is
taxed under Internal Revenue Code Section 1244 or Subchapter S, the Officer
issuing shares shall maintain the appropriate requirements regarding
issuance.
7.03 CORPORATE SEAL
The Board of Directors may at any time adopt, prescribe the use of, or
discontinue the use of, such corporate seal as it deems desirable, and the
appropriate officers shall cause such seal to be affixed to such
certificates and documents as the Board of Directors may direct.
7.04 BOOKS OF ACCOUNT
The Corporation shall maintain correct and adequate accounts of its
properties and business transactions, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, surplus, and
shares. The corporate bookkeeping procedures shall conform to accepted
accounting practices for the Corporation's business or businesses. subject
to the foregoing, The chart of financial accounts shall be taken from, and
designed to facilitate preparation of, current corporate tax returns. Any
surplus, including earned surplus, paid-in surplus, and surplus arising
from a reduction of stated capital, shall be classed by source and shown in
a separate account. If the Corporation is taxed under Internal Revenue Code
Section 1244 or Subchapter S, the officers and agents maintaining the books
of account shall maintain the appropriate requirements.
7.05 INSPECTION OF CORPORATE RECORDS
A Director or Shareholder demanding to examine the Corporation's books or
records may be required to first sign an affidavit that the demanding party
will not directly or indirectly participate in reselling the information
and will keep it confidential other than in use for proper purposes
reasonably related to the Director's or Shareholder's role. A Director who
insists on examining the records while refusing to sign this affidavit
thereby resigns as a Director.
7.06 FISCAL YEAR
The fiscal year of the Corporation shall be as determined by the Board of
Directors and approved by the Internal Revenue Service. The Treasurer shall
forthwith arrange a consultation with the Corporation's tax advisers to
determine whether the Corporation is to have a fiscal year other than the
calendar year. If so, the Treasurer shall file an election with the
Internal Revenue Service as early as possible, and all correspondence with
the IRS, including the application for the Corporation's Employer
Identification Number, shall reflect such non-calendar year election.
7.07 WAIVER OF NOTICE
Any notice required by law or by these Bylaws may be waived by execution of
a written waiver of notice executed by the person entitled to the notice.
The waiver may be signed before or after the meeting
ARTICLE EIGHT - ADOPTION OF INITIAL BYLAWS
The Board of Directors adopted the foregoing bylaws on November 30, 2001
/s/: Dana Upton
Director, President
Attested to, and certified by: /S/: Dana Upton, Secretary
EXHIBIT 3.1a
SUBSCRIPTION AGREEMENT
HUDSON VENTURES, INC.
SUBSCRIPTION AGREEMENT made as of this day of DECEMBER, 2001 between
HUDSON VENTURES, INC., a Nevada corporation (the "Company") and
(the "Subscriber").
WHEREAS:
A. The Subscriber is a director of the Company.
B. The Subscriber desires to acquire shares of common stock
of the Company at a price of $0.001 US per share (the "Shares").
(1) The Company desires to accept the Subscriber's subscription for the
Shares.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto do hereby agree as
follows:
1. SUBSCRIPTION FOR SHARES
1.1 Subject to the terms and conditions hereinafter set forth, the
Subscriber hereby subscribes for and agrees to purchase the Shares from the
Company at a price equal to $0.001 US per Share and the Company agrees to
sell the Shares to the Subscriber
1.2 The purchase price is payable by the Subscriber to the Company
contemporaneously with the execution and delivery of this Subscription
Agreement.
1.3 The certificates representing the Shares sold pursuant to this
Offering will be "restricted shares", as contemplated under United States
Securities Act of 1933, and will be endorsed with the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT"), AND HAVE BEEN ISSUED IN RELIANCE UPON EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS OF THE ACT. SUCH
SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR
OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE
APPLICABLE PROVISIONS OF THE ACT OR ARE EXEMPT FROM SUCH
REGISTRATION."
1.4 The Subscriber hereby authorizes and directs the Company to
deliver the securities to be issued to such Subscriber pursuant to this
Subscription Agreement to the Subscriber's address indicated herein.
2. REPRESENTATIONS AND WARRANTIES BY SUBSCRIBER
2.1 The Subscriber hereby severally represents and warrants to
the Company as follows:
(1) The Subscriber recognizes that the purchase of Shares involves a high
degree of risk in that the Company has only recently commenced its
proposed business and may require substantial funds in addition to
the proceeds of this subscription;
(2) an investment in the Company is highly speculative and only investors
who can afford the loss of their entire investment should consider
investing in the Company and the Shares;
(3) the Subscriber has such knowledge and experience in finance,
securities, investments, including investment in non-listed and non
registered securities, and other business matters so as to be able to
protect its interests in connection with this transaction;
(4) the Subscriber is a company controlled by a director of the Company;
(5) the Subscriber acknowledges that no market for the Shares presently
exists and none may develop in the future and accordingly the Subscriber
may not be able to liquidate its investment.
(6) The Subscriber hereby acknowledges that this offering of Shares by the
Company has not been reviewed by the United States Securities and Exchange
Commission ("SEC") and that the Shares are being issued by the Company
pursuant to an exemption from registration provided by Section 4(2) to the
United States Securities Act.
(7) the Subscriber is acquiring the Shares as principal for the
Subscriber's own benefit;
(8) the Subscriber is not aware of any advertisement of the Shares.
(9) Subscriber is acquiring the Shares subscribed to hereunder as an
investment for Subscriber's own account, not as a nominee or agent, and not
with a view toward the resale or distribution of any part thereof, and
Subscriber has no present intention of selling, granting any participation
in, or otherwise distributing the same;
(10) Subscriber does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to
such person, or to any third person, with respect to any of the Shares sold
hereby;
(11) Subscriber has full power and authority to enter into this Agreement
which constitutes a valid and legally binding obligation, enforceable in
accordance with its terms;
(12) Subscriber can bear the economic risk of this investment, and was not
organized for the purpose of acquiring the Shares;
3. REPRESENTATIONS BY THE COMPANY
3.1 The Company represents and warrants to the Subscriber that:
(A) The Company is a corporation duly organized, existing and in good
standing under the laws of the State of Nevada and has the
corporate power to conduct the business which it conducts and
proposes to conduct.
(B) Upon issue, the Shares will be duly and validly issued, fully
paid and non-assessable common shares in the capital of the
Company.
4. MISCELLANEOUS
4.1 Notwithstanding the place where this Subscription Agreement
may be executed by any of the parties hereto, the parties expressly
agree that all the terms and provisions hereof shall be construed in
accordance with and governed by the laws of the State of Nevada.
4.2 The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out the purposes
and intent of this Subscription Agreement.
IN WITNESS WHEREOF, this Subscription Agreement is executed as of the
day and year first written above.
Number of Shares
Subscribed For:
Signature of Authorized
Signatory of
Subscriber:
Name of Subscriber:
Address of Subscriber:
ACCEPTED BY:
HUDSON VENTURES, INC.
Signature of Authorized Signatory:
Name of Authorized Signatory: DANA UPTON
Position of Authorized Signatory: President/Secretary/Treasurer
Date of Acceptance:
EXHIBIT 3.1b
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND ARE
PROPOSED TO BE ISSUED IN RELIANCE UPON AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY
REGULATION S PROMULGATED UNDER THE ACT. UPON ANY SALE,
SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR
OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE
REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE ACT.
SUBSCRIPTION AGREEMENT
HUDSON VENTURES, INC.
SUBSCRIPTION AGREEMENT made as of this day of
, 200 between HUDSON VENTURES, INC., a Nevada corporation with its
registered office at 50 West Liberty Street, Suite 880, Reno, Nevada
89501 (the "Company") and the undersigned (the "Subscriber").
WHEREAS:
A. The Company desires to issue a maximum of 1,800,000
shares of common stock of the Company at a price of $0.01
US per share (the "Offering") pursuant to Regulation S of
the United States Securities Act of 1933 (the "Act").
B. The Subscriber desires to acquire the number of shares
of the Offering set forth on the signature page hereof (the
"Shares") on the terms and subject to the conditions of
this Subscription Agreement.
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants hereinafter set forth, the parties hereto do hereby
agree as follows:
3. SUBSCRIPTION FOR SHARES
1.1 Subject to the terms and conditions hereinafter set forth,
the Subscriber hereby subscribes for and agrees to purchase from the
Company such number of Shares as is set forth upon the signature page
hereof at a price equal to $0.01 US per Share. Upon execution, the
subscription by the Subscriber will be irrevocable.
1.2 The purchase price is payable by the Subscriber
contemporaneously with the execution and delivery of this
Subscription Agreement.
1.3 Upon execution by the Company, the Company agrees to sell
such Shares to the Subscriber for said purchase price subject to the
Company's right to sell to the Subscriber such lesser number of
Shares as it may, in its sole discretion, deem necessary or
desirable.
1.4 Any acceptance by the Company of the Subscriber is conditional
upon compliance with all securities laws and other applicable laws of
the jurisdiction in which the Subscriber is resident. Each
Subscriber will deliver to the Company all other
documentation, agreements, representations and government
forms required by the lawyers for the Company as required to comply
with all securities laws and other applicable laws of the
jurisdiction of the Subscriber. The Company will not grant any
registration or other qualification rights to any Subscriber.
4. REGULATION S AGREEMENTS OF THE SUBSCRIBER
2.1 The Subscriber agrees to resell the Shares only in accordance
with the provisions of Regulation S of the Act pursuant to
registration under the Act, or pursuant to an available exemption
from registration pursuant to the Act.
2.2 The Subscriber agrees not to engage in hedging transactions
with regard to the Shares unless in compliance with the Act.
2.3 The Subscriber acknowledges and agrees that all certificates
representing the Shares will be endorsed with the following legend
in accordance with Regulation S of the Act:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "ACT"), AND HAVE BEEN ISSUED IN RELIANCE UPON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE
ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE
OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S,
PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT,
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS
IN COMPLIANCE WITH THE ACT"
2.4 The Subscriber and the Company agree that the Company will
refuse to register any transfer of the Shares not made in accordance
with the provisions of Regulation S of the Act, pursuant to
registration under the Act, or pursuant to an available exemption
from registration.
3. REPRESENTATIONS AND WARRANTIES BY SUBSCRIBER
3.1 The Subscriber represents and warrants to the Company and
acknowledges that the Company is relying upon the Subscriber's
representations and warranties in agreeing to sell the Shares to the
Subscriber that:
The Subscriber is not a "U.S. Person" as defined by Regulation S
of the Act and is not acquiring the Shares for the account or
benefit of a U.S. Person.
A "U.S. Person" is defined by Regulation S of the Act to
be any person who is:
(1) any natural person resident in the United States;
(2) any partnership or corporation organized or incorporated under
the laws of the United States;
(3) any estate of which any executor or administrator is a U.S.
person;
(4) any trust of which any trustee is a U.S. person;
(5) any agency or branch of a foreign entity located in the United
States;
(6) any non-discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary organized,
incorporate, or (if an individual) resident in the United States; and
(7) any partnership or corporation if:
1. organized or incorporated under the laws of any foreign
jurisdiction; and
2. formed by a U.S. person principally for the purpose of investing
in securities not registered under the Act, unless it is organized
or incorporated, and owned, by accredited investors [as defined in
Section 230.501(a) of the Act] who are not natural persons, estates
or trusts.
The Subscriber recognizes that the purchase of Shares
involves a high degree of risk in that the Company has only
recently commenced its proposed business and may require
substantial funds in addition to the proceeds of this
private placement;
An investment in the Company is highly speculative and only
investors who can afford the loss of their entire
investment should consider investing in the Company and the
Shares;
The Subscriber has had full opportunity to review information
regarding the business and financial condition of the
Company with the Subscriber's legal and financial advisers
prior to execution of this Subscription Agreement;
The Subscriber has such knowledge and experience in finance,
securities, investments, including investment in non-listed
and non registered securities, and other business matters
so as to be able to protect its interests in connection
with this transaction.
The Subscriber acknowledges that no market for the Shares
presently exists and none may develop in the future and
accordingly the Subscriber may not be able to liquidate its
investment.
The Subscriber hereby acknowledges that this offering of
Shares has not been reviewed by the United States
Securities and Exchange Commission (the "SEC") and that the
Shares are being issued by the Company pursuant to an
exemption from registration provided by Regulation S
pursuant to the United States Securities Act.
The Subscriber is acquiring the Shares as principal for the
Subscriber's own benefit;
The Subscriber is not aware of any advertisement of the
Shares.
The Subscriber is acquiring the Shares subscribed to
hereunder as an investment for the Subscriber's own
account, not as a nominee or agent, and not with a view
toward the resale or distribution of any part thereof, and
the Subscriber has no present intention of selling,
granting any participation in, or otherwise distributing
the same;
The Subscriber does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer
or grant participation to such person, or to any third
person, with respect to any of the Shares sold hereby;
The Subscriber has full power and authority to enter into
this Agreement which constitutes a valid and legally
binding obligation, enforceable in accordance with its
terms;
Subscriber can bear the economic risk of this investment, and
was not organized for the purpose of acquiring the Shares;
The Subscriber has satisfied himself or herself as to the
full observance of the laws of his or her jurisdiction in
connection with any invitation to subscribe for the Shares
and/or any use of this Agreement, including (i) the legal
requirements within his/her jurisdiction for the purchase
of the Shares, (ii) any foreign exchange restrictions
applicable to such purchase, (iii) any governmental or
other consents that may need to be obtained, and (iv) the
income tax and other tax consequences, if any, that may be
relevant to the purchase, holding, redemption, sale, or
transfer of the Shares.
(8) REPRESENTATIONS BY THE COMPANY
4.1 The Company represents and warrants to the Subscriber that:
(A) The Company is a corporation duly organized, existing and
in good standing under the laws of the State of Nevada and
has the corporate power to conduct the business which it
conducts and proposes to conduct.
(B) Upon issue, the Shares will be duly and validly issued,
fully paid and non-assessable common shares in the capital
of the Company.
(C) The issued and outstanding shares of the Company consists of
1,500,000 shares of the Company's common stock prior to the
completion of the issue of any shares of the Company's common stock
pursuant to this Offering.
TERMS OF SUBSCRIPTION
5.1 Pending acceptance of this subscription by the Company, all
funds paid hereunder shall be deposited by the Company and
immediately available to the Company for the purposes set forth in
the disclosure statement. In the event the subscription is not
accepted, the subscription funds will constitute a non-interest
bearing demand loan of the Subscriber to the Company.
5.2 The Subscriber hereby authorizes and directs the Company to
deliver the securities to be issued to such Subscriber pursuant to
this Subscription Agreement to the Subscriber's address indicated
herein.
5.3 The Subscriber acknowledges and agrees that the
subscription for the Shares and the Company's acceptance of the
subscription is not subject to any minimum subscription for the
Offering.
MISCELLANEOUS
6.1 Any notice or other communication given hereunder shall be
deemed sufficient if in writing and sent by registered or certified
mail, return receipt requested, addressed to the Company, at its
registered office, at 50 West Liberty Street, Suite 880, Reno, Nevada
89501, Attention: Mr. Dana Upton, President, and to the Subscriber
at his address indicated on the last page of this Subscription
Agreement. Notices shall be deemed to have been given on the date of
mailing, except notices of change of address, which shall be deemed
to have been given when received.
6.2 Notwithstanding the place where this Subscription Agreement
may be executed by any of the parties hereto, the parties expressly
agree that all the terms and provisions hereof shall be construed in
accordance with and governed by the laws of the State of Nevada.
6.3 The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out the purposes
and intent of this Subscription Agreement.
7 REPRESENTATIONS BY ALBERTA, BRITISH COLUMBIA, ONTARIO AND
QUEBEC RESIDENTS
7.1 If the Subscriber is a resident of Canada, the Subscriber
represents to the Company that the Subscriber is a resident of the
Province of Alberta, British Columbia, Ontario or Quebec and the
Subscriber is (Residents of Alberta, British Columbia, Ontario or
Quebec must circle one, as appropriate, and add the name of the
senior officer or director of the Company):
(i) a spouse, parent, brother, sister or child of
_______________________, a senior officer or director of
the Company ;
(ii) a close friend or business associate of
___________________________, a senior officer or director
of the Company , or
(iii) a company, all of the voting securities of
which are beneficially owned by one or more of a spouse, brother,
.. sister, child or close personal friend or
business associate of , ______________________, a senior officer
or director of the Company .
IN WITNESS WHEREOF, this Subscription Agreement is executed as of the
day and year first written above.
Number of Shares common shares
Subscribed For:
Signature of
Subscriber:
Name of Subscriber:
Address of Subscriber:
Subscriber's Social
Security Number:
ACCEPTED BY:
HUDSON VENTURES, INC.
Signature of Authorized Signatory:
Name of Authorized Signatory: DANA N. UPTON
Position of Authorized Signatory: PRESIDENT
Date of Acceptance:
EXHIBIT 3.1c
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND ARE
PROPOSED TO BE ISSUED IN RELIANCE UPON AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY
REGULATION S PROMULGATED UNDER THE ACT. UPON ANY SALE, SUCH
SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR
OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE
REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE ACT.
SUBSCRIPTION AGREEMENT
HUDSON VENTURES, INC.
SUBSCRIPTION AGREEMENT made as of this _____ day of _________, 2002
between HUDSON VENTURES, INC., a Nevada corporation with its
registered office at 50 West Liberty Street, Suite 880, Reno, Nevada
89501 (the "Company") and the undersigned (the "Subscriber").
WHEREAS:
A. The Company has entered into an option agreement dated January
21, 2002 with Glen Macdonald, (the "Option Agreement") for the
acquisition of a 90% interest of certain mineral claims known as the
Wheaton River Property in the Whitehorse Mining District in the Yukon
Territories (the "Property"). The Company has completed cash
payments to Glen Macdonald totaling $7,500 as required to maintain
its interest in the Option Agreement. The Company is required to
complete exploration expenditures on the Property totaling $15,000 by
December 31, 2002 and, in aggregate, $195,000 by December 31, 2003 in
order to exercise its option.
B. The Company has received a geological report on the Wheaton
River Property mineral claims which are the subject of the Option
Agreement (the "Geological Report") dated January 23, 2002. The
Geological Report recommends a two phase work program on the
Property. The Company has determined to proceed with phase one of
the geological work program with an estimated cost of $15,000.
C. The Company has also entered into an option agreement dated
January 22, 2002 with Glen Macdonald, (the "Option Agreement") for
the acquisition of a 90% interest of certain mineral claims known as
the McConnell River Property in the Watson Lake Mining District in
the Yukon Territories (the "Property"). The Company has completed
cash payments to Glen Macdonald totaling $2,500 as required to
maintain its interest in the Option Agreement. The Company is
required to complete exploration expenditures on the Property
totaling $25,000 by June 30, 2003 in order to exercise its option.
D. The Company has received a geological report on the McConnell
River Property mineral claims which are the subject of the Option
Agreement (the "Geological Report") dated January 22, 2002. The
Geological Report recommends a two phase work program on the
Property. The Company has determined to seek out potential Joint
Venture Partners for this project to reduce the risk to the Company
as exploration advances.
E. The Company desires to issue a maximum of 100,000 shares of
common stock of the Company at a price of $0.50 US per share (the
"Offering") pursuant to Regulation S of the United States Securities
Act of 1933 (the Act) in order to finance phase one of the
recommended work program on the Wheaton River Property and to provide
working capital for the Company's operations.
F. The Company has delivered to the Subscriber a copy of the
Company's disclosure statement dated January 24, 2002 (the
"Disclosure Statement").
G. The Subscriber desires to acquire the number of shares of the
Offering set forth on the signature page hereof (the "Shares") on the
terms and subject to the conditions of this Subscription Agreement.
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants hereinafter set forth, the parties hereto do hereby
agree as follows:
4. SUBSCRIPTION FOR SHARES
1.1 Subject to the terms and conditions hereinafter set forth,
the Subscriber hereby subscribes for and agrees to purchase from the
Company such number of Shares as is set forth upon the signature page
hereof at a price equal to $0.50 US per Share. Upon execution, the
subscription by the Subscriber will be irrevocable.
1.2 The purchase price is payable by the Subscriber
contemporaneously with the execution and delivery of this
Subscription Agreement.
1.3 Upon execution by the Company, the Company agrees to sell
such Shares to the Subscriber for said purchase price subject to the
Company's right to sell to the Subscriber such lesser number of
Shares as it may, in its sole discretion, deem necessary or
desirable.
1.4 Any acceptance by the Company of the Subscriber is
conditional upon compliance with all securities laws and other
applicable laws of the jurisdiction in which the Subscriber is
resident. Each Subscriber will deliver to the Company all other
documentation, agreements, representations and requisite government
forms required by the lawyers for the Company as required to comply
with all securities laws and other applicable laws of the
jurisdiction of the Subscriber. The Company will not grant any
registration or other qualification rights to any Subscriber.
2. REGULATION S AGREEMENTS OF THE SUBSCRIBER
2.1 The Subscriber agrees to resell the Shares only in
accordance with the provisions of Regulation S of the Act pursuant to
registration under the Act, or pursuant to an available exemption
from registration pursuant to the Act.
2.2 The Subscriber agrees not to engage in hedging transactions
with regard to the Shares unless in compliance with the Act.
2.3 The Subscriber acknowledges and agrees that all
certificates representing the Shares will be endorsed with the
following legend in accordance with Regulation S of the Act:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "ACT"), AND HAVE BEEN ISSUED IN RELIANCE UPON AN
EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY
REGULATION S PROMULGATED UNDER THE ACT. SUCH
SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR
OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE
REGISTRATION UNDER THE ACT, OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT.
HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT
BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT"
2.4 The Subscriber and the Company agree that the Company will
refuse to register any transfer of the Shares not made in accordance
with the provisions of Regulation S of the Act, pursuant to
registration under the Act, or pursuant to an available exemption
from registration.
3. REPRESENTATIONS AND WARRANTIES BY SUBSCRIBER
3.1 The Subscriber represents and warrants to the Company and
acknowledges that the Company is relying upon the Subscriber's
representations and warranties in agreeing to sell the Shares to the
Subscriber that:
(1) The Subscriber is not a "U.S. Person" as defined by Regulation S
of the Act and is not acquiring the Shares for the account or benefit
of a U.S. Person.
A "U.S. Person" is defined by Regulation S of the Act to
be any person who is:
(a) any natural person resident in the United States;
(b) any partnership or corporation organized or incorporated under
the laws of the United States;
(c) any estate of which any executor or administrator is a U.S.
person;
(d) any trust of which any trustee is a U.S. person;
(e) any agency or branch of a foreign entity located in the United
States;
(f) any non-discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary organized,
incorporate, or (if an individual) resident in the United States;
and
(g) any partnership or corporation if:
1. organized or incorporated under the laws of any foreign
jurisdiction; and
2. formed by a U.S. person principally for the purpose of investing
in securities not registered under the Act, unless it is organized or
incorporated, and owned, by accredited investors [as defined in
Section 230.501(a) of the Act] who are not natural persons, estates
or trusts.
(2) The Subscriber recognizes that the purchase of Shares involves a
high degree of risk in that the Company has only recently commenced
its proposed business and may require substantial funds in addition
to the proceeds of this private placement.
(3) An investment in the Company is highly speculative and only
investors who can afford the loss of their entire investment should
consider investing in the Company and the Shares.
(4) The Subscriber has received and has had full opportunity to
review the Company's Disclosure Statement, a copy of Option
Agreement, a copy of the Geological Report and information regarding
the business and financial condition of the Company with the
Subscriber's legal and financial advisers prior to execution of this
Subscription Agreement.
(5) The Subscriber has such knowledge and experience in finance,
securities, investments, including investment in non-listed and non
registered securities, and other business matters so as to be able to
protect its interests in connection with this transaction.
(6) The Subscriber acknowledges that no market for the Shares
presently exists and none may develop in the future and accordingly
the Subscriber may not be able to liquidate its investment.
(7) The Subscriber hereby acknowledges that this offering of Shares
has not been reviewed by the United States Securities and Exchange
Commission (the "SEC") and that the Shares are being issued by the
Company pursuant to an exemption from registration provided by
Regulation S pursuant to the United States Securities Act.
(8) The Subscriber is acquiring the Shares as principal for the
Subscriber's own benefit.
(9) The Subscriber is not aware of any advertisement of the Shares.
(10) The Subscriber is acquiring the Shares subscribed to hereunder
as an investment for the Subscriber's own account, not as a nominee
or agent, and not with a view toward the resale or distribution of
any part thereof, and the Subscriber has no present intention of
selling, granting any participation in, or otherwise distributing the
same.
(11) The Subscriber does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participation to such person, or to any third person, with respect
to any of the Shares sold hereby.
(12) The Subscriber has full power and authority to enter into this
Agreement which constitutes a valid and legally binding obligation,
enforceable in accordance with its terms.
(13) Subscriber can bear the economic risk of this investment, and
was not organized for the purpose of acquiring the Shares.
(14) The Subscriber has satisfied himself or herself as to the full
observance of the laws of his or her jurisdiction in connection with
any invitation to subscribe for the Shares and/or any use of this
Agreement, including (i) the legal requirements within his/her
jurisdiction for the purchase of the Shares, (ii) any foreign
exchange restrictions applicable to such purchase, (iii) any
governmental or other consents that may need to be obtained, and (iv)
the income tax and other tax consequences, if any, that may be
relevant to the purchase, holding, redemption, sale, or transfer of
the Shares.
(9) REPRESENTATIONS BY THE COMPANY
4.1 The Company represents and warrants to the Subscriber that:
(1) The Company is a corporation duly organized, existing and
in good standing under the laws of the State of Nevada and
has the corporate power to conduct the business which it
conducts and proposes to conduct.
(2) Upon issue, the Shares will be duly and validly issued,
fully paid and non-assessable common shares in the capital
of the Company.
(3) The issued and outstanding shares of the Company consists
of 3,010,000 shares of the Company's common stock prior to
the completion of the issue of any shares of the Company's
common stock pursuant to this Offering.
(10) TERMS OF SUBSCRIPTION
5.1 Pending acceptance of this subscription by the Company, all
funds paid hereunder shall be deposited by the Company and
immediately available to the Company for the purposes set forth in
the disclosure statement. In the event the subscription is not
accepted, the subscription funds will constitute a non-interest
bearing demand loan of the Subscriber to the Company.
5.2 The Subscriber hereby authorizes and directs the Company to
deliver the securities to be issued to such Subscriber pursuant to
this Subscription Agreement to the Subscriber's address indicated
herein.
5.3 The Subscriber acknowledges and agrees that the
subscription for the Shares and the Company's acceptance of the
subscription is not subject to any minimum subscription for the
Offering.
(11) MISCELLANEOUS
6.1 Any notice or other communication given hereunder shall be
deemed sufficient if in writing and sent by registered or certified
mail, return receipt requested, addressed to the Company, at its
registered office, at 50 West Liberty Street, Suite 880, Reno, Nevada
89501, Attention: Mr. Dana Upton, President, and to the Subscriber at
his address indicated on the last page of this Subscription
Agreement. Notices shall be deemed to have been given on the date of
mailing, except notices of change of address, which shall be deemed
to have been given when received.
6.2 Notwithstanding the place where this Subscription Agreement
may be executed by any of the parties hereto, the parties expressly
agree that all the terms and provisions hereof shall be construed in
accordance with and governed by the laws of the State of Nevada.
6.3 The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out the purposes
and intent of this Subscription Agreement.
(12) REPRESENTATIONS BY ALBERTA, BRITISH COLUMBIA, ONTARIO AND
QUEBEC
RESIDENTS
7.1 If the Subscriber is a resident of Canada, the Subscriber
represents to the Company that the Subscriber is a resident of the
Province of Alberta, British Columbia, Ontario or Quebec and the
Subscriber is (Residents of Alberta, British Columbia, Ontario or
Quebec must circle one, as appropriate, and add the name of the
senior officer or director of the Company):
(i) a spouse, parent, brother, sister or child of
_______________________, a senior officer or director of
the Company;
(ii) a close friend or business associate of
_________________________, a senior officer or director of
the Company, or
(iii) a company, all of the voting securities of which are
beneficially owned by one or more of a spouse, parent, brother,
sister, child or close personal friend or business associate of
____________________, a senior officer or director of the
Company.
IN WITNESS WHEREOF, this Subscription Agreement is executed as of the
day and year first written above.
Number of Shares common shares
Subscribed For:
Signature of Subscriber:
Name of Subscriber:
Address of Subscriber:
Subscribers Social
Security Number:
ACCEPTED BY:
HUDSON VENTURES, INC.
Signature of Authorized
Signatory:
Name of Authorized DANA N. UPTON
Signatory:
Position of Authorized PRESIDENT
Signatory:
Date of Acceptance:
EXHIBIT 3.2
DISCLOSURE STATEMENT
HUDSON VENTURES, INC.
A NEVADA CORPORATION
DATE OF DISCLOSURE STATEMENT: January 24, 2002
TYPE OF SECURITIES OFFERED: Shares of Common Stock of the
Company (the "Common Stock")
NUMBER OF SECURITIES OFFERED: Up to 100,000 Shares of
Common Stock (the "shares")
PRICE: $0.50 per Share
Offering Commissions Proceeds to
Price Company
Per Share $0.50 NIL $0.50
Total $50,000 NIL $50,000
The securities offered are offered on a best efforts basis. Sales of
Common Stock will commence on the date of this Disclosure Statement
and will terminate on July 10, 2002 unless the period of the Offering
is extended by the Company's Board of Directors. There is no minimum
number of Shares to be sold.
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT"), AND ARE PROPOSED TO BE ISSUED IN
RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE ACT. UPON ANY
SALE, SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR
OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT, OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT.
HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE ACT.
INVESTMENT IN THE COMMON STOCK OFFERED BY THE COMPANY INVOLVES A HIGH
DEGREE OF RISK. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY
ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING,
INCLUDING THE MERITS AND RISKS INVOLVED. PROSPECTIVE INVESTORS SHOULD
RETAIN THEIR OWN PROFESSIONAL ADVISORS TO REVIEW AND EVALUATE THE
FINANCIAL, ECONOMIC, TAX AND OTHER CONSEQUENCES OF THIS INVESTMENT.
INVESTORS SHOULD NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS THEY
CAN AFFORD TO LOSE THEIR INVESTMENT IN ITS ENTIRETY.
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION HAS NOT PASSED
UPON THE MERITS OF THIS OFFERING OR GIVEN ITS APPROVAL TO ANY
SECURITIES OFFERED OR TO THE TERMS OF THE OFFERING. THE UNITED
STATES SECURITIES COMMISSION HAS NOT PASSED UPON THE ACCURACY OR
COMPLETENESS OF THIS DISCLOSURE STATEMENT. THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION HAS NOT MADE AN INDEPENDENT
DETERMINATION THAT THE SECURITIES OFFERED HEREUNDER ARE EXEMPT FROM
REGISTRATION. NO SECURITIES COMMISSION OR SIMILAR REGULATORY
AUTHORITY IN CANADA HAS PASSED ON THE MERITS OF THE SECURITIES
OFFERED NOR HAS IT REVIEWED THIS DISCLOSURE STATEMENT AND ANY
REFERENCE TO THE CONTRARY IS AN OFFENCE.
THE SECURITIES WILL BE DISTRIBUTED IN CANADA PURSUANT TO EXEMPTIONS
FROM THE PROSPECTUS REQUIREMENTS OF THE SECURITIES ACT (BRITISH
COLUMBIA), SECURITIES ACT (ALBERTA),THE SECURITIES ACT (ONTARIO) AND
THE SECURITIES ACT (QUEBEC). THE COMPANY IS NOT AND MAY NEVER BE A
REPORTING ISSUER IN THE PROVINCE OF BRITISH COLUMBIA, THE PROVINCE OF
ALBERTA, THE PROVINCE OF ONTARIO OR THE PROVINCE OF QUEBEC. THE
COMMON SHARES OF THE COMPANY MAY NOT BE RESOLD IN THE PROVINCE OF
BRITISH COLUMBIA, THE PROVINCE OF ALBERT OR THE PROVINCE OF ONTARIO
OR THE PROVINCE OF QUEBEC, EXCEPT UNDER A PROSPECTUS OR STATUTORY
EXEMPTION AVAILABLE ONLY IN SPECIFIC AND LIMITED CIRCUMSTANCES UNLESS
AND UNTIL THE ISSUER BECOMES A REPORTING ISSUER IN THE PROVINCE OF
BRITISH COLUMBIA, THE PROVINCE OF ALBERTA, THE PROVINCE OF ONTARIO OR
THE PROVINCE OF QUEBEC, AS APPLICABLE, AND SUCH COMMON SHARES ARE
HELD THEREAFTER FOR THE APPLICABLE HOLD PERIOD. AS THERE IS NO
MARKET FOR THESE SECURITIES, IT MAY BE DIFFICULT OR EVEN IMPOSSIBLE
FOR THE PURCHASER TO SELL THEM IN CANADA.
INVESTOR REVIEW AND FINANCIAL RISK
IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THIS OFFERING, INCLUDING
THE MERITS AND RISKS INVOLVED. INVESTORS ARE ADVISED TO CONSULT WITH
THEIR LEGAL COUNSEL AND A TAX ADVISOR WITH RESPECT TO ANY INVESTMENT
IN THIS OFFERING. NOTE FURTHER, THAT THE PRICE OF THE COMMON STOCK
WAS ARTIFICIALLY DETERMINED BY THE COMPANY AND BEARS NO RELATIONSHIP
TO THE ASSETS, NET WORTH, BOOK VALUE OR POTENTIAL BUSINESS OPERATIONS
OF THE COMPANY. UPON CLOSING OF THIS OFFERING, THERE WILL BE NO
PUBLIC MARKET FOR THE COMMON SHARES DESCRIBED HEREIN. CONSEQUENTLY,
INVESTORS WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT INDEFINITELY.
CONFIDENTIALITY AND LIMITATIONS OF THIS DISCLOSURE STATEMENT
This document contains information that is proprietary to the
Company. It discusses trade and business secrets of the Company and
is intended for use only by the party to whom it is transmitted by
employees or agents of the Company, and only for the purpose of
permitting such persons to decide whether to purchase the Common
Stock described herein. This document may not be reproduced in whole
or in part or used for any other purpose; nor may any of its contents
be disclosed without the prior written consent of the Company, and
the recipient agrees to return it to the Company immediately upon
request. Acceptance of this document constitutes agreement to the
above conditions.
The information contained in this document may at times represent the
Company=s best estimates of its future financial and business
performance, based upon assumptions believed to be reasonable. No
representation or warranty is made, however, as to the accuracy or
completeness of such assumptions, and nothing contained herein should
be relied upon as a promise or representation as to any future
performance or events. In addition, investors should take note that
the information contained herein is only offered to be accurate as of
the date of this Disclosure Statement. Neither the delivery of this
Disclosure Statement, nor any sale made hereunder, shall, under any
circumstances, create the implication that there has been no change
in the affairs of the Company, or that the information contained
herein is correct as of any date other than the date of its creation
referenced above. See "RISK FACTORS."
THIS DISCLOSURE STATEMENT MUST BE TREATED AS CONFIDENTIAL BY THE
PERSON TO WHOM IT IS DELIVERED. ANY DISTRIBUTION OR DIVULGENCE OF ANY
OF ITS CONTENTS IS UNAUTHORIZED.
THE DISTRIBUTION OF THIS CONFIDENTIAL DISCLOSURE STATEMENT AND THE
OFFERING OF THE COMMON STOCK DESCRIBED HEREIN MAY BE RESTRICTED BY
LAW IN CERTAIN JURISDICTIONS. THIS DISCLOSURE STATEMENT DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY IN
ANY JURISDICTION OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
AN OFFER OR SOLICITATION.
INFORMATION PROVIDED OUTSIDE THIS DISCLOSURE STATEMENT
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE
CONTAINED IN THIS CONFIDENTIAL DISCLOSURE STATEMENT, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY.
TABLE OF CONTENTS
Page
SUMMARY 5
RISK FACTORS 7
TERMS OF OFFERING AND PLAN OF DISTRIBUTION 11
USE OF PROCEEDS 15
DESCRIPTION OF BUSINESS AND PROPERTY 16
DIRECTORS, OFFICERS AND SIGNIFICANT EMPLOYEES 18
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY OWNERS 19
SECURITIES BEING OFFERED 20
LITIGATION 21
FINANCIAL STATEMENTS 21
ADDITIONAL ATTACHMENTS 21
SUMMARY
The following summary is qualified in its entirety by the more
detailed information and financial statements appearing elsewhere in
this Disclosure Statement and the exhibits hereto. Prospective
investors are urged to read this Disclosure Statement in its
entirety.
The Company
HUDSON VENTURES, INC. (the "Company") is a Nevada corporation
incorporated on November 30, 2001. The Company has entered into an
option agreement dated January 21, 2002 with Glen Macdonald (the
"Option Agreement") whereby it has acquired an option (the "Option")
to acquire a 90% interest in certain mineral claims located in the
Whitehorse Mining District in the Yukon Territories (the "Wheaton
River Property"). The Company is pursuing this Offering in order to
raise funds for an exploration work program on the Wheaton River
Property. The Company plans to pursue the exploration program as
recommended in a geological report on the Wheaton River Property,
which the Company has received.
The Company has also entered into an option agreement dated January
22, 2002 with Glen Macdonald (the "Option Agreement") whereby it has
acquired an option (the "option") to acquire a 90% interest in
certain mineral claims located in the Watson Lake Mining District in
the Yukon Territory (the "McConnell River Property"). The Company
has determined to seek out potential Joint Venture Partners for this
project to fund the project and to reduce the risk to the Company as
exploration advances.
The Offering
Securities Being Offered Up to 100,000 shares of Common Stock of the
Company at a price of $0.50 US per share; See
"DESCRIPTION OF SHARES."
Purchase Price $0.50 US per Share. See "TERMS OF THE
OFFERING AND PLAN OF DISTRIBUTION."
Regulation S: The Shares are being offered pursuant
to Regulation S of the United States Securities
Act of 1933 (the "Act") to persons who are not
"U.S. Persons". See "TERMS OF OFFERING AND PLAN
OF DISTRIBUTION.
Securities Issued As of the date of this Document, there are
3,010,000 shares of Common Stock issued and
outstanding. Upon the completion of this
offering, there will be 3,110,000 shares of
Common Stock issued and outstanding if all of the
offered Shares are fully sold. See "SECURITIES
BEING OFFERED" and "TERMS OF THE OFFERING AND
PLAN OF DISTRIBUTION."
Use of Proceeds The gross proceeds to the Company from the
sale of the Shares will be approximately
$50,000.00 US, assuming all Shares are sold. Such
proceeds will be utilized to complete exploration
expenditures on the Wheaton River Property and
for working capital. See "USE OF PROCEEDS."
Plan of Distribution The Offering is being sold by officers
and directors of the Company to persons in Canada
who are residents of the Provinces of British
Columbia, Alberta, Ontario or Quebec and who are:
(A) a spouse, parent, brother, sister or child
of a senior officer or director of the
Company ;
(B) a close friend or business associate of a
senior officer or director of the Company;
or
(C) a company, all of the voting securities of
which are beneficially owned by one or more
of a spouse, parent, brother, sister, child
or close personal friend or business
associate of a senior officer or director of
the Company.
Dilution Investors in this offering will
experience substantial dilution. Dilution
represents the difference between the offering
price and the net tangible book value per share
after the offering. Additional dilution may
result from future offerings or from the exercise
of future options pursuant to any stock option
plan or warrants that may be established by the
Company.
Risk Factors The securities offered hereby involve a
high degree of risk and should not be purchased
by anyone who cannot afford the loss of their
entire investment. Prospective investors should
carefully review and consider the factors set
forth in the following section of this Document
entitled "RISK FACTORS," as well as the other
information set-forth herein, before subscribing
for any of the Shares offered hereby.
Local Jurisdictions The Offering and any subscription for Shares
is subject to compliance with all applicable
securities laws and other applicable laws of the
province or foreign jurisdiction in which any
Subscriber for the Offering is resident. Each
Subscriber will deliver to the Company all other
documentation, agreements, representations and
requisite government forms required by the
lawyers for the Company, in addition to the
Subscription Agreement, as required to comply
with all securities laws and other applicable
laws of the jurisdiction of the Subscriber.
RISK FACTORS
An investment in the Shares offered herein is highly speculative and
subject to a high degree of risk. Only those persons who can bear the
risk of the entire loss of their investment should participate. An
investor should carefully consider the risks described below and the
other information in this Disclosure before investing in the
Company's Common Stock. The risks described below are not the only
ones faced. Additional risks that the Company is aware of or that
the Company currently believes are immaterial may become important
factors that affect the Company=s business. If any of the following
risks occur, or if others occur, the Company=s business, operating
results and financial condition could be seriously harmed and the
investor may lose all of its investment.
1. Need for Additional Financing, Limited Operating History, Risks
of New Business Venture
While the proceeds of the Offering will be sufficient in order
to enable the Company to complete phase one of the geological
work program recommended on the Wheaton River Property, the
Company will require substantial additional capital to fund the
continued exploration of the Wheaton River Property in order to
exercise the Option. If the Company does not meet the
exploration expenditures required by the Option Agreement, then
it will forfeit its interest in the Option and will have no
interest in the Wheaton River Property. In addition, other
events or circumstances that are not presently anticipated may
reduce the time period for which the funds will be sufficient.
Other than the Offering, completion of which cannot be assured,
the Company has no agreements for additional financing and there
can be no assurance that additional funding will be available to
the Company on acceptable terms, or at all, to continue
operations to the date referred to above, to fund new business
opportunities or to execute its business plan. The Company was
incorporated in November, 2001 and to date has been involved
primarily in organizational activities and has had no revenues.
Potential investors should be aware of the difficulties normally
encountered by mineral exploration companies and the high rate
of failure of such enterprises. The likelihood of success must
be considered in light of the problems, expenses, difficulties
complications and delays encountered in connection with the
exploration of its mineral properties which the Company plans to
undertake. These include, but are not limited to, unanticipated
problems relating to exploration and development, and additional
costs and expenses that may exceed current estimates. There is
no history upon which to base any assumption as to the
likelihood that the Company will prove successful, and there can
be no assurance that the Company will generate any operating
revenues or ever achieve profitable operations. See "Use of
Proceeds" and "Description of Business and Property.
2. Exploration Risk
Exploration for minerals is a speculative venture necessarily
involving substantial risk. There is not any certainty that the
expenditures to be made by the Company in the acquisition of the
interests described herein will result in discoveries of
commercial quantities of ore. Hazards such as unusual or
unexpected formations and other conditions are involved in
mineral exploration and development. The Company may become
subject to liability for pollution, cave-ins or hazards against
which it cannot insure or against which it may elect not to
insure. The payment of such liabilities may have a material
adverse effect on the Company's financial position.
3. No Known Bodies of Ore
There are not any known bodies of ore on the Company's
properties. The purpose of the present offering is to raise
funds to carry out further exploration with the objective of
establishing ore of commercial tonnage and grade. If the
Company's exploration programs are successful, additional funds
will be required for the development of economic reserves and to
place them in commercial production. The only source of future
funds presently available to the Company is through the sale of
equity capital. Any sale of share capital will result in
dilution to existing shareholders. The only alternative for the
financing of further exploration would be the offering by the
Company of an interest in its properties to be earned by another
party or parties carrying out further exploration or development
thereof, which is not presently contemplated.
4. No Dividends
Payment of dividends on the Common Stock is within the
discretion of the Board of Directors and will depend upon the
Company's future earnings, its capital requirements and
financial condition, and other relevant factors. The Company
does not intend to declare any dividends on its Common Stock for
the foreseeable future.
5. Concentration of Ownership
Upon completion of this Offering, current stockholders of the
Company will own a majority of the Company's Common Stock. As a
result, such persons will have the ability to elect the Board of
Directors of the Company and therefore control the Company and
direct its affairs and business.
6. Dilution
The Offering price is substantially higher than the book value
per share. Investors purchasing the Shares in this Offering will
therefore incur immediate substantial dilution.
7. Offering Price
The offering price of the Shares was arbitrarily determined by
the Company. Among the factors considered in determining the
price of the Shares were the uncertain prospects of the Company,
the backgrounds of the directors and the current conditions in
the financial markets. There is, however, no relationship
whatsoever between the offering price of the Shares and the
Company's assets, earnings, book value or any other objective
criteria of value.
8. Title Issues
While the Company has obtained geological report with respect to
its properties, this should not be construed as a guarantee of
title. The properties may be subject to prior unregistered
agreements or transfers or native land claims, and title may be
affected by undetected defects. The Company's mining properties
have not been surveyed and therefore, the precise locations and
areas of the properties may be in doubt.
9. Competitiveness of Industry
The mining industry, in general, is intensively competitive and
there is not any assurance that even if commercial quantities of
ore are discovered, a ready market will exist for sale of same.
Numerous factors beyond the control of the Company may affect
the marketability of any substances discovered. These factors
include market fluctuations, the proximity and capacity of
natural resource markets and processing equipment, government
regulations, including regulations relating to prices, taxes,
royalties, land tenure, land use, importing and exporting of
minerals and environmental protection. The exact effect of
these factors cannot be accurately predicted, but the
combination of these factors may result in the Company not
receiving an adequate return on invested capital.
10. Lack of Marketability and Liquidity
There will be no market for the Shares after the Offering and no
market may develop in the future. Purchasers of the Shares must
be prepared to hold their shares and be able to bear the
economic risks of their investment for an indefinite period of
time. The Shares have not been registered under the Act or the
securities laws of any state. The Company is under no obligation
to register the Shares. There can be no assurance that a market
or purchasers for the Shares will be available.
11. Potential Legal, Regulatory, and/or Compliance Risk
The Company may, with regard to governmental and/or regulatory
agencies, be required to comply with certain regulations, and/or
potential future regulations, rules, and/or directives. Due to
the regulated nature of mineral exploration and the industry,
there is no guarantee that certain regulations may not, in the
future, be imposed. Moreover, potential regulatory conditions
and/or compliance therewith and the effects of such to the
Company, may have a materially adverse affect upon the Company,
its business operations, prospects and/or financial condition.
Exploration of mineral resources may require approval from
governmental regulatory agencies. There can be no assurance
that such approval will be obtained, and the cost and delay
involved in attempting to obtain approval cannot be known in
advance.
12. Absence of Audited Financial Statements
The Company has only minimal capitalization and since its
inception has realized no revenues. There are no audited
financial statements for the Company. Purchasers evaluating an
investment in the Company's securities should consider this
fact.
13. Best Efforts Offering
There can be no assurance that this Offering will be completely
sold. If less than the maximum proceeds are available to the
Company, the Company's ability to exercise the Option and
complete exploration on the Wheaton River Property could be
adversely effected. There is no minimum number of Shares to be
sold in this Offering. Therefore, the proceeds received from
this Offering can be immediately used by the Company.
14. Option Agreement
The Company's interest in the Wheaton River Property is an option
to acquire a 90% interest in the Wheaton River Property. The
Company must complete exploration expenditures on the Wheaton
River Property in the amount of $15,000 by December 31, 2002 and
an aggregate amount of $195,000 by December 31, 2003 in order that
the Company may exercise the option and earn a 90% interest in the
Wheaton River Property. If the Company fails to incur the required
exploration expenditures within the required time frames, the
Company will lose its interest in the Wheaton River Property.
The Company's interest in the McConnell River Property is an
option to acquire a 90% interest in the McConnell River Property.
The Company must complete exploration expenditures on the
McConnell River Property in the amount of $25,000 by June 30, 2003
in order that the Company may exercise the option and earn a 90%
interest in the McConnell River Property. If the Company fails to
incur the required exploration expenditures within the required
time frame, the Company will lose its interest in the McConnell
River Property.
FOR ALL OF THE AFORESAID REASONS AND OTHERS SET-FORTH AND NOT SET-
FORTH HEREIN, THE SHARES OFFERED INVOLVE A CERTAIN DEGREE OF RISK.
ANY PERSON CONSIDERING THE PURCHASE OF THESE SHARES SHOULD BE
AWARE
OF THESE AND OTHER FACTORS SET-FORTH IN THIS OFFERING DOCUMENT AND
SHOULD CONSULT WITH HIS/HER LEGAL, TAX AND FINANCIAL ADVISORS PRIOR
TO MAKING AN INVESTMENT IN THE COMPANY. THE SHARES SHOULD ONLY BE
PURCHASED BY PERSONS WHO CAN AFFORD TO LOSE ALL OF THEIR TOTAL
INVESTMENT.
TERMS OF OFFERING AND PLAN OF DISTRIBUTION
Securities Offered
The Offering consists of the offering of up to 100,000 shares of
Common Stock of the Company, par value $0.001 per share (each a
Share), at a price of $0.50 US per Share (the "Offering").
Sales of Common Stock pursuant to the Offering will commence on the
date of this Disclosure Statement and will terminate on April 15,
2002, unless extended by the board of directors of the Company.
There is no minimum number of Shares to be sold.
Regulation S
The Offering is being made pursuant to Regulation S of the United
States Securities Act of 1933 (the "Act"). The Offering is made to
persons who are not U.S. Persons as defined by Regulation S of the
Act. A U.S. Person is defined by Regulation S of the Act to be any
person who is:
any natural person resident in the United States;
Any partnership or corporation organized or incorporated under
the laws of the United States;
any estate of which any executor or administrator is a U.S.
person;
any trust of which any trustee is a U.S. person;
any agency or branch of a foreign entity located in the United
States;
any non-discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary
organized, incorporate, or (if an individual) resident in
the United States; and
any partnership or corporation if:
(13) organized or incorporated under the laws of any foreign
jurisdiction; and
(14) formed by a U.S. person principally for the purpose of investing
in securities not registered under the Act, unless it is organized or
incorporated, and owned, by accredited investors [as defined in
Section 230.501(a) of the Act] who are not natural persons, estates
or trusts.
By execution of the Subscription Agreement, each subscriber for
shares (a "Subscriber") will represent to the Company that the
Subscriber is not a U.S. Person and will agree with the Company as
follows as a condition of the Company selling Shares to any
Subscriber:
(1) The Subscriber will resell the Shares only in accordance with
the provisions of Regulation S of the Act pursuant to registration
under the Act, or pursuant to an available exemption from
registration pursuant to the Act;
(2) The Subscriber will not to engage in hedging transactions with
regard to the Shares unless in compliance with the Act;
(3) The Subscriber will acknowledge and agree that all certificates
representing the Shares will be endorsed with the following legend in
accordance with Regulation S of the Act:
"THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT"), AND
HAVE BEEN ISSUED IN RELIANCE UPON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE ACT PROVIDED BY REGULATION S
PROMULGATED UNDER THE ACT. SUCH SECURITIES
MAY NOT BE REOFFERED FOR SALE OR RESOLD OR
OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE
WITH THE PROVISIONS OF REGULATION S,
PURSUANT TO AN EFFECTIVE REGISTRATION UNDER
THE ACT, OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM REGISTRATION UNDER THE ACT.
HEDGING TRANSACTIONS INVOLVING THE
SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE ACT"
(4) The Company will refuse to register any transfer of the Shares
not made in accordance with the provisions of Regulation S of the
Act, pursuant to registration under the Act, or pursuant to an
available exemption from registration.
The Subscribers for the Shares will not be entitled to any
registration rights.
Plan of Distribution
The Offering is being sold by officers and directors of the Company
to persons who, if residents of Canada, are residents of the
Provinces of British Columbia, Alberta, Ontario or Quebec and who
are:
(A) a spouse, parent, brother, sister or child of a senior
officer or director of the
Company ;
(B) a close friend or business associate of a senior officer or
director of the Company; or
(C) a company, all of the voting securities of which are
beneficially owned by one or more of a spouse, parent,
brother, sister, child or close personal friend or business
associate of a senior officer or director of the Company.
No commissions or other offering remuneration will be paid.
Closing
The Company may complete the Offering by multiple closings at any
time during the period of the Offering. The Company may reject or
accept any subscription in whole or in part at the discretion of the
Company. The Company may close the Offering or any portion of the
Offering without notice to subscribers.
Upon acceptance of a subscription by the Company, the Company will
deliver to the Subscriber an executed copy of the agreement
evidencing the number of Shares subscribed for. If the Company does
not accept any subscription or any portion of a subscription, the
amount of the subscription not accepted will remain a non-interest
payable loan to the Company payable on demand.
Provincial and Foreign Securities Laws
The Offering and any subscription for Shares is subject to compliance
with the securities laws and other applicable laws of any province or
foreign jurisdiction in which any Subscriber for the Offering is
resident, including applicable minimum subscription requirements to
ensure availability of prospectus exemptions. Each Subscriber will
deliver to the Company all other documentation, agreements,
representations and requisite government forms required by the
lawyers for the Company, in addition to the Subscription Agreement,
as required to comply with all securities laws and other applicable
laws of the jurisdiction of the Subscriber.
Best Efforts Basis
The Shares are being offered by the Company on a best efforts@. There
is no minimum number of Shares to be sold pursuant to this Offering.
The Company may immediately use proceeds obtained from this Offering.
All proceeds received by the Company from subscribers for the Shares
offered hereby will be available to the Company immediately.
Subscription Agreement
Subscription for the Shares shall be made pursuant to a subscription
agreement (the "Subscription Agreement") in the form attached to this
Disclosure Statement. The Subscription Agreement contains, among
other things, customary representations and warranties by the
Company, covenants of the Company reflecting the information set
forth herein, representations by the investors and appropriate
conditions to closing.
Investor Suitability Standards
Investment in the Shares involves a high degree of risk. (See "RISK
FACTORS"). Accordingly, investment in the Shares is suitable only
for persons of adequate financial means who have no need for
liquidity with respect to their investment and have sufficient net
worth to sustain a complete loss with respect to their investment.
Shares will be sold only to persons who have knowledge and experience
in financial and business matters that such investor is capable of
evaluating the merits and risks of the investment in the Company, or
is relying upon a qualified offeree representative in making the
investment decision.
Each prospective investor should retain the advice of such investor's
attorney, tax consultant and business advisor with respect to legal,
tax, and business aspects of this investment prior to subscribing to
Shares.
USE OF PROCEEDS
The proceeds to the Company from the sale of the Shares will be
$50,000 US if the maximum number of Shares are sold. The Company
will use the proceeds of sale to complete phase one of the geological
work program recommended on the Wheaton River Property. The
anticipated cost of this work program is $15,000. The balance of the
proceeds will be used for general working capital.
The actual expenditures of the proceeds of the Offering may differ
substantially from the estimated use of proceeds. The actual
expenditures of the proceeds of the Offering will be according to the
expenditures deemed by the Company and its board of directors to be
in the best interests of advancing the business of the Company. The
actual expenditures will also vary from the estimated use of proceeds
if less than all of the Shares are sold.
The Company anticipates that the net proceeds from the Offering will
be sufficient to meet its financial requirements for only a short
period of time. The Company, therefore, will require substantial
additional capital to fund its contemplated business plan in the near
future.
DESCRIPTION OF BUSINESS AND PROPERTY
Organization
The Company is a Nevada corporation incorporated on November 30, 2001.
The Company is a natural resource company engaged in the acquisition,
exploration and development of mineral properties. The Company has
an interest in the properties described below under the heading
"Option Agreements". The Company intends to carry out exploration
work on the Wheaton River Property in order to ascertain whether the
Wheaton River Property possesses commercially developable quantities
of gold, silver and other precious minerals. The Company also
intends to seek out potential Joint Venture Partners for the
McConnell River Property to finance the work program and reduce the
risk to the Company as exploration advances.
Option Agreements (# 1)
The Company has entered into an option agreement dated January 21,
2002 (the "Option Agreement") with Glen Macdonald (the "Optionor")
whereby it has acquired an option to acquire a 90% interest in
certain mineral claims located in the Whitehorse Mining District in
the Yukon Territories (the Wheaton River Property"). Under the
Option Agreement, the Optionor granted Hudson the exclusive right and
option to acquire an undivided 90% right, title and interest in and
to the Wheaton River Property (the "Option") for total consideration
consisting of cash payments to the Optionor totaling $7,500 US and
the incurrence of exploration and development expenditures on the
Wheaton River Property (the "Property Expenditures") totaling
$195,000 US to be made as follows:
(1) upon execution of the Option Agreement, the payment to the
Optionor of the sum of $2,500 US (this payment has been
made);
(2) upon delivery of the Geological Report in a form acceptable
to Hudson, the payment to the Optionor of the sum of $5,000
US (this payment has been made);
(3) by December 31, 2002, the incurrence of Property
Expenditures in the amount of $15,000 US;
(4) by December 31, 2003, the incurrence of Property
Expenditures in the further amount of $180,000 US for total
aggregate Property Expenditures of $195,000 by December 31,
2003, provided that any Property Expenditures incurred
prior to December 31, 2002 which are in excess of $15,000
will be applied to the further required amount of $180,000.
The Optionor has delivered to Hudson a geological report on the
Wheaton River Property (the Geological Report). The Geological Report
is, for the purposes of the Option Agreement, acceptable to Hudson
and accordingly, Hudson has made the payment of $5,000 required by
the Option Agreement in order to maintain the Option. Accordingly,
Hudson has completed all cash payments required to be made to the
Optionor and is now entitled to exercise the Option by completing the
exploration expenditures in the total amount of $195,000, as set
forth in paragraphs (3) and (4) above.
Upon completion of the property exploration expenditures as specified
in the Option Agreement, Hudson will acquire an undivided 90% right,
title and interest in and to the McConnell River Property. If Hudson
does acquire a 90% interest in the Wheaton River Property, the Option
Agreement provides that Hudson and the Optionor will enter into a
joint venture agreement for the joint exploration and development of
the Wheaton River Property.
Description of Properties
The mineral claims comprising the Wheaton River Property consist of
nine mineral claims located in the Whitehorse Mining District in the
Yukon Territories, Canada. The claims are described as follows:
NTS 105 D-6
Latitude 60 16' North, Longitude 135 06' West
WHITEHORSE MINING DISTRICT
YUKON TERRITORY
CANADA
List of Claims
CLAIM NAME GRANT NUMBERS CURRENT EXPIRY DATE
AAV 1-9 YC 19166 - 174 AUGUST 19, 2003
Option Agreements (# 2)
The Company has also entered into an option agreement dated January
22, 2002 (the "Option Agreement") with Glen Macdonald (the
"Optionor") whereby it has acquired an option to acquire a 90%
interest in certain mineral claims located in the Watson Lake
District in the Yukon Territories (the "McConnell River Property").
Under the Option Agreement, the Optionor granted Hudson the exclusive
right and option to acquire an undivided 90% right, title and
interest in and to the McConnell River Property (the "Option") for
total consideration consisting of cash payments to the Optionor
totaling $2,500 US and the incurrence of exploration and development
expenditures on the McConnell River Property (the "Property
Expenditures") totaling $25,000 US to be made as follows:
(1) upon execution of the Option Agreement, the payment to the
Optionor of the sum of $2,500 US, this amount being
refundable pending delivery of the Geological Report in a
form acceptable to Hudson (this payment has been made).
(2) by June 30, 2003, the incurrence of Property Expenditures
in the amount of $25,000 US;
The Optionor has delivered to Hudson a geological report on the
Wheaton River Property (the Geological Report@). The Geological
Report is, for the purposes of the Option Agreement, acceptable to
Hudson and accordingly, Hudson has relinquished the payment of $2,500
required by the Option Agreement in order to maintain the Option.
Accordingly, Hudson has completed all cash payments required to be
made to the Optionor and is now entitled to exercise the Option by
completing the exploration expenditures in the total amount of
$15,000, as set forth in paragraphs (1) and (2) above.
Upon completion of the property exploration expenditures as specified
in the Option Agreement, Hudson will acquire an undivided 90% right,
title and interest in and to the Wheaton River Property.
Description of Properties
The mineral claims comprising the McConnell River Property consist of
four mineral claims located in the Watson Lake Mining District in the
Yukon Territories, Canada. The claims are described as follows:
NTS 105 F-10
Latitude 61 35' North, Longitude 132 35' West
WATSON LAKE MINING DISTRICT
YUKON TERRITORY
CANADA
List of Claims
CLAIM NAME GRANT NUMBERS CURRENT EXPIRY DATE
B1-B4 YB 92568 - YB 92571 June 17, 2003
McConnell River Claim Plan 105F-10
District Watson Lake Mining
District
Plan of Operations
WHEATON RIVER PROPERTY
The Company's business plan is to proceed with the exploration of the
Wheaton River Property to determine whether there are commercially
exploitable reserves of gold and silver on the Wheaton River
Property. The Company has determined to proceed with Phase One of
the exploration program outlined in the Geological Report. This
exploration program will consist of a geological survey, which would
include prospecting, geological mapping, testing of soil samples and
night-time ultra-violet lamping. Today's detailed geophysical
surveys utilizing new and more sensitive geophysical techniques serve
to enhance the data base on the presently known mineralized areas at
depth. The objective of Phase One of the geological work program is
to define geochemical anomalies on the Wheaton River Property and to
identify drill targets for the drill program which will commence in
Phase Two of the recommended work program. The Company will assess
whether to proceed to Phase Two of the recommended geological work
program upon completion of an assessment of the results of Phase One
of the geological work program.
MCCONNELL RIVER PROPERTY
The Company's business plan is to proceed with the exploration of the
McConnell River Property through the acquisition of a joint venture
partner to determine whether there are commercially exploitable
reserves of gold and silver on the McConnell River Property. The
Company has determined to proceed with Phase One of the exploration
program outlined in the Geological Report through a joint venture
partner who will provide the necessary cash requirements to conduct
phase one of exploration and subsequently earn an interest in this
project. The Phase One program will employ detailed geophysical
surveys utilizing new and more sensitive geophysical techniques that
serve to enhance the data base on the presently known mineralized
areas at depth. The objective of Phase One of the geological work
program is to define geochemical anomalies on the McConnell River
Property and to identify drill targets for the drill program which
will commence in Phase Two of the recommended work program. The
Company will assess whether to proceed to Phase Two of the
recommended geological work program upon completion of an assessment
of the results of Phase One of the geological work program.
Phase One of the recommended geological work programs will cost
approximately $15,000 for the Wheaton River Property and $25,000 for
the McConnell River Property. Prior to this Offering, the Company
had approximately $2,000 in cash reserves. The Company has raised
$16,600 by prior private placement offerings and has applied $10,000
of these funds to acquisition of the Options and approximately $5,000
to legal fees and expenses of organization.
The Company anticipates that it will have sufficient funds to
complete Phase One of the geological work program for Wheaton River
if all the Shares offered by the Company in this Offering are sold.
The Company will require additional funds after the completion of
this Offering if the Company is to be able to proceed with Phase Two
of the geological work program. There is no assurance that the
Company will be able to raise the additional funds. If the Company
does not complete the required exploration expenditures of $15,000
for the Wheaton River property by December 31, 2002 or $195,000 in
aggregate by December 31, 2003, then the Wheaton River Option will
terminate and the Company will lose all its interest in the Wheaton
River Property.
The Company is presently relying on sourcing a viable Joint Venture
Partner to fund the McConnell River project. If the Company fails to
secure a Joint Venture Partner and/or does not complete the required
exploration expenditures of $25,000 for the McConnell River property
by June 30, 2003 then the McConnell River Option will terminate and
the Company will lose all its interest in the McConnell River
Property.
Copies of Option Agreement and Geological Report
A copy of each of the Option Agreement and the Geological Report are
available to any subscriber or potential subscriber upon request from
Mr. Dana Upton, President.
DIRECTORS, OFFICERS AND SIGNIFICANT EMPLOYEES
The following information sets forth the names of the officers and
directors of the Company and their present positions with the
Company:
Name Office(s) Held
Dana N. Upton Director and President,
Secretary and Treasurer
Philip Taneda Director
Nikolaos Bekropoulos Director
SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN SECURITY OWNERS
The following table sets forth, as of January 23, 2002, the
beneficial ownership of the Company's Common Stock by each officer
and director of the Company, by each person known by the Company to
beneficially own more than 10% of the Company's Common Stock
outstanding and by the officers and directors of the Company as a
group. Except as otherwise indicated, all shares are owned directly.
Name and address Number of Shares Percentage of
Title of class of beneficial owner
of Common Stock
Common Stock(1)
Common Stock
Dana N. Upton 750,000 24.9%
Director and President,
Secretary and Treasurer
Common Stock
Nikolaos Bekropoulos 750,000 24.9%
Director
Common Stock
Directors and Officers 1,500,000 49.8%
(2 Persons)
(1) Based on 3,010,000 shares of Common Stock of the Company issued
and outstanding on January 24, 2002.
SECURITIES BEING OFFERED
The securities being offered are the shares of the Company's common
stock, par value $0.001 per share. Under the Company's Articles of
Incorporation, the total number of shares of all classes of stock
that the Company shall have authority to issue is 50,000,000 shares
of common stock, par value $0.001 per share (the "Common Stock") and
10,000,000 shares of preferred stock, par value $0.001 per share (
the "Preferred Stock"). As of January 24, 2002, a total of
3,010,000 shares of Common Stock are issued and outstanding. All
issued and outstanding shares of the Common Stock are fully paid and
non-assessable.
Common Stock
Holders of Common Stock have the right to cast one vote for each
share held of record on all matters submitted to a vote of holders of
Common Stock, including the election of directors. Holders of Common
Stock do not have cumulative voting rights in the election of
directors. Holders of a majority of the voting power of the capital
stock issued and outstanding and entitled to vote, represented in
person or by proxy, are necessary to constitute a quorum at any
meeting of the Company's stockholders, and the vote by the holders of
a majority of such outstanding shares is required to effect certain
fundamental corporate changes such as liquidation, merger or
amendment of the Company's Articles of Incorporation.
Holders of Common Stock are entitled to receive dividends pro rata
based on the number of shares held, when, as and if declared by the
Board of Directors, from funds legally available therefor. In the
event of the liquidation, dissolution or winding up of the affairs of
the Company, all assets and funds of the Company remaining after the
payment of all debts and other liabilities shall be distributed, pro
rata, among the holders of the Common Stock. There are no redemption
or sinking fund provisions applicable to the Common Stock. All
outstanding shares of Common Stock are fully paid and non-assessable.
Share Purchase Warrants and Options
The Company has not issued and does not have outstanding any warrants
to purchase shares of the Common Stock. The Company has not issued
and does not have outstanding any options to purchase shares of the
Common Stock.
Convertible Securities
The Company has not issued and does not have outstanding any
securities convertible into shares of Common Stock or any rights
convertible or exchangeable into shares of Common Stock.
Recent Issuances of Securities
The Company has completed the issuance of 1,500,000 shares of the
Company's common stock pursuant to Section 4(2) of the Securities Act
of 1933 (the "1933 Act") on December 11, 2001. 750,000 shares were
issued to Mr. Dana Upton, the President and a director of the
Company, at a price of $0.001 per share. 750,000 shares were issued
to Mr. Stephen Jackson, a director of the Company, at a price of
$0.001 per share.
The Company has completed a private placement of 1,510,000 shares of
the Company's common stock pursuant to Regulation S of the 1933 Act
on January 18, 2002. All shares were issued at a price of $0.01 per
share.
LITIGATION
The Company is not party to any legal proceedings. Management of the
Company is not aware of any threatened legal proceedings which, if
successful against the Company, would have a materially adverse
effect on the Company.
FINANCIAL STATEMENTS
The Company has not at this time prepared any financial statements.
ADDITIONAL ATTACHMENTS
The following additional attachments are attached to this Disclosure
Statement:
Attachment Description
No. 1 Subscription Agreement
EXHIBIT 4.1
July 23, 2002
Hudson Ventures Inc.
444 East Columbia Street
New Westminster, British Columbia, Canada
Attention: Dana Neill Upton, President
Re: Hudson Ventures Inc.'s Registration Statement on Form SB-2
Ladies and Gentlemen:
I have acted as independent counsel for Hudson Ventures Inc., a Nevada
corporation (the "Company"), in connection with the Company's
registration statement on Form SB-2 (the"Registration Statement")to be
filed with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Act of 1933, as amended (the "Act"), relating
to the offering of certain shares of the Company's common stock.
In rendering the opinion set forth below, I have reviewed: (a) the
Registration Statement and the exhibits attached thereto; (b) the
Company's Articles of Incorporation; (c) the Company's Bylaws; (d)
certain records of the Company's corporate proceedings as reflected in
its minute books; and (e) such statutes, records and other documents as
I have deemed relevant. In my examination, I have assumed the
genuineness of all signatures, the authenticity of all documents
submitted to myself as originals, and conformity with the originals of
all documents submitted to myself as copies thereof. In addition, I have
made such other examinations of law and fact as I have deemed relevant
in order to form a basis for the opinion hereinafter expressed.
Based upon the foregoing, I am of the opinion that the common stock to
be sold by the selling shareholders is validly issued, fully paid and
nonassessable. This opinion is based on Nevada
general corporate law.
Very truly yours,
/S/ ARTHUR J. FROST
Arthur J Frost, Attorney at Law
Hudson Ventures Inc.
July 23, 2001
Page 2
I hereby consent to the use of this opinion as an Exhibit to the
Registration Statement and to all references to myself under the caption
"Interests of Named Experts and Counsel" in the
Registration Statement.
Very truly yours,
/S/ ARTHUR J. FROST
Arthur J. Frost , Attorney at Law
EXHIBIT 5.1
OPTION AGREEMENT - WHEATON RIVER
THIS AGREEMENT is dated for reference the 21st day of January, 2002.
BETWEEN:
GLEN MACDONALD
a British Columbia resident with an address at
303-1334 Cardero Street
Vancouver, British Columbia V6G 2J3
(the "Optionor")
OF THE FIRST PART
AND:
HUDSON VENTURES, INC.
a Nevada corporation with its registered address at
50 West Liberty Street, Suite 880
Reno, Nevada 89501
("Hudson")
OF SECOND PART
WHEREAS:
A. The Optionor is the owner of an undivided 100% right, title and
interest in and to mineral claims described in this Agreement;
B. Hudson wishes to acquire the option to acquire a 90% interest in
the Optionor's property on the terms and subject to the conditions
contained in this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises and the mutual covenants and agreements hereinafter contained,
the parties hereto agree as follows:
1. DEFINITIONS
1.1 In this Agreement, the following terms will have the meaning set
forth below:
(A) "Exploration and Development" means any and all activities
comprising or undertaken in connection with the exploration and
development of the Property, the construction of a mine and mining
facilities on or in proximity to the Property and placing the
Property into commercial production;
(B) "Property" means and includes:
(i) the mining claims in the Whitehorse Mining District of Yukon
Territory listed in Schedule A to this Agreement; and
(ii) all rights and appurtenances pertaining to the mining claims listed
in Schedule A, including all water and water rights, rights of way,
and easements, both recorded and unrecorded, to which the Optionor
is entitled;
(C) "Property Expenditures" means all reasonable and necessary monies
expended on or in connection with Exploration and Development as
determined in accordance with generally accepted accounting
principles including, without limiting the generality of the
foregoing:
(i) the cost of entering upon, surveying, prospecting and drilling on
the Property;
(ii) the cost of any geophysical, geochemical and geological reports or
surveys relating to the Property;
(iii)all filing and other fees and charges necessary or advisable
to keep the Property in good standing with any regulatory authorities
having jurisdiction;
(iv) all rentals, royalties, taxes (exclusive of all income taxes and
mining taxes based on income and which are or may be assessed against
any of the parties hereto) and any assessments whatsoever, whether the
same constitute charges on the Property or arise as a result of the
operation thereon;
(v) the cost, including rent and finance charges, of all buildings,
machinery, tools, appliances and equipment and related capital items
that may be erected, installed and used from time to time in
connection with Exploration and Development;
(vi) the cost of construction and maintenance of camps required for
Exploration and Development;
(vii) the cost of transporting persons, supplies, machinery and
equipment in connection with Exploration and Development;
(viii)all wages and salaries of persons engaged in Exploration and
Development and any assessments or levies made under the authority
of any regulatory body having jurisdiction with respect to such
persons or supplying food, lodging and other reasonable needs for
such persons;
(ix) all costs of consulting and other engineering services including
report preparation;
(x) the cost of compliance with all statutes, orders and regulations
respecting environmental reclamation, restoration and other like work
required as a result of conducting Exploration and Development; and
(xi) all costs of searching for, digging, working, sampling,
transporting, mining and procuring diamonds, other minerals, ores, and
metals from and out of the Property;
2. OPTION
2.1 The Optionor hereby grants to Hudson the exclusive right and option
to acquire an undivided 90% right, title and interest in and to the
Property (the "Option") for total consideration consisting of a 1% Net
Smelter Return attached as schedule "C" hereto, cash payments to the
Optionor totalling $7,500 US and the incurrence of Property Expenditures
totalling $195,000 US to be made as follows:
(A) upon execution of this Agreement, the payment to the Optionor of
the sum of $2,500 US, which amount will be refundable pending delivery
of the Geological Report in a form acceptable to Hudson;
(B) upon delivery of the Geological Report in a form acceptable to
Hudson, the payment to the Optionor of the sum of $5,000 US;
(C) by December 31, 2002, the incurrence of Property Expenditures in
the amount of $15,000 US;
(D) by December 31, 2003, the incurrence of Property Expenditures in
the further amount of $180,000 US for total aggregate Property
Expenditures of $195,000 by December 31, 2003, provided that any
Property Expenditures incurred prior to December 31, 2002 which are in
excess of $15,000 will be applied to the further required amount of
$180,000.
The Optionor will prepare a geological report on the Property (the
"Geological Report") and will deliver the Geological Report to Hudson by
not later than February 1, 2002. If the Geological Report is acceptable
to Hudson, then Hudson will be required to make the payment required by
Paragraph 2.1(B) in order to maintain the Option. If the Geological
Report is not acceptable to Hudson, then Hudson will give notice of
termination of this Agreement to the Optionor and the Optionor will
refund to Hudson the amount paid on account of the Option pursuant to
Paragraph 2.1(A).
Upon making the cash payments and Property Expenditures as specified in
Paragraph 2.1, Hudson shall have acquired an undivided 90% right, title
and interest in and to the Property.
This Agreement is an option only and the doing of any act or the making
of any payment by Hudson shall not obligate Hudson to do any further
acts or make any further payments.
3. TRANSFER OF TITLE
3.1 Upon execution of this Agreement, Hudson shall be entitled to
record this Agreement against title to the Property.
3.2 Upon making the cash payments and Property Expenditures as
specified in Paragraph 2.1, the Optionor shall deliver to Hudson a duly
executed bill of sale or quit claim deed and such other executed
documents of transfer as required, in the opinion of Hudson's lawyers,
for the transfer of an undivided 90% interest in the Property to Hudson.
4. JOINT VENTURE
4.1 Upon Hudson acquiring an interest in the Property pursuant to
paragraph 2.1, the Optionor and Hudson agree to join and participate in
a single purpose joint venture ( the "Joint Venture") for the purpose of
further exploring and developing and, if economically and politically
feasible, constructing and operating a mine on the Property. The Joint
Venture shall be governed by an agreement which shall be in the form of
joint venture agreement attached as Schedule B hereto.
5. RIGHT OF ENTRY
5.1 During the currency of this Agreement, Hudson, its servants, agents
and workmen and any persons duly authorised by Hudson, shall have the
right of access to and from and to enter upon and take possession of and
prospect, explore and develop the Property in such manner as Hudson in
its sole discretion may deem advisable for the purpose of incurring
Property Expenditures as contemplated by Section 2, and shall have the
right to remove and ship therefrom ores, minerals, metals, or other
products recovered in any manner therefrom.
6.
COVENANTS OF HUDSON
6.1 Hudson covenants and agrees that:
(A) during the term of this Agreement, Hudson shall keep the Property
clear of all liens, encumbrances and other charges and shall keep the
Optionor indemnified in respect thereof;
(B) Hudson shall carry on all operations on the Property in a good and
workmanlike manner and in compliance with all applicable governmental
regulations and restrictions including but not limited to the posting of
any reclamation bonds as may be required by any governmental regulations
or regulatory authorities;
(C) during the term of the option herein, Hudson shall pay or cause to
be paid any rates, taxes, duties, royalties, workers' compensation or
other assessments or fees levied with respect to its operations thereon
and in particular Hudson shall pay the yearly claim maintenance payments
necessary to maintain the claims in good standing;
(D) Hudson shall maintain books of account in respect of its
expenditures and operations on the Property and, upon reasonable notice,
shall make such books available for inspection by representatives of the
Optionor;
(E) Hudson shall allow any duly authorised agent or representative of
the Optionor to inspect the Property at reasonable times and intervals
and upon reasonable notice given to Hudson, provided however, that it is
agreed and understood that any such agent or representative shall be at
his own risk in respect of, and Hudson shall not be liable for, any
injury incurred while on the Property, howsoever caused;
(F) Hudson shall allow the Optionor access at reasonable times to all
maps, reports, sample results and other technical data prepared or
obtained by Hudson in connection with its operations on the Property;
(G) Hudson shall indemnify and save the Optionor harmless of and from
any and all costs, claims, loss and damages whatsoever incidental to or
arising out of any work or operations carried out by or on behalf of
Hudson on the Property, including any liability of an environmental
nature.
7. REPRESENTATIONS AND WARRANTIES
7.1 The Optionor hereby represents and warrants that:
(A) the Property is in good standing with all regulatory authorities
having jurisdictions and all required claim maintenance payments have
been made;
(B) it has not done anything whereby the mineral claims comprising the
Property may be in any way encumbered;
(C) it has full corporate power and authority to enter into this
Agreement and the entering into of this Agreement does not conflict with
any applicable laws or with its charter documents or any contract or
other commitment to which it is party; and
(D) the execution of this Agreement and the performance of its terms
have been duly authorised by all necessary corporate actions including
the resolution of its Board of Directors.
7.2 Hudson hereby represents and warrants that:
(A) it has full corporate power and authority to enter into this
Agreement and the entering into of this Agreement does not conflict with
any applicable laws or with its charter documents or any contract or
other commitment to which it is party; and
(B) the execution of this Agreement and the performance of its terms
have been duly authorised by all necessary corporate actions including
the resolution of its Board of Directors.
8. ASSIGNMENT
8.1 With the consent of the other party, which consent shall not be
unreasonably withheld, Hudson and the Optionor has the right to assign
all or any part of its interest in this Agreement and or in the
Property, subject to the terms and conditions of this Agreement. It
shall be a condition precedent to any such assignment that the assignee
of the interest being transferred agrees to be bound by the terms of
this Agreement, insofar as they are applicable.
9. CONFIDENTIALITY OF INFORMATION
9.1 Each of Hudson and the Optionor shall treat all data, reports,
records and other information of any nature whatsoever relating to this
Agreement and the Property as confidential, except where such
information must be disclosed for public disclosure requirements of a
public company.
10. TERMINATION
10.1 Until such time as Hudson has acquired an undivided 90% interest in
the Property pursuant to Section 2, this Agreement shall terminate upon
any of the following events:
(A) upon the failure of Hudson to make a payment or incur Property
Expenditures required by and within the time limits prescribed by
Paragraph 2.1;
(B) in the event that Hudson, not being at the time in default under
any provision of this Agreement, gives 30 day's written notice to the
Optionor of the termination of this Agreement;
(C) in the event that Hudson shall fail to comply with any of its
obligations hereunder, other than the obligations contained in Paragraph
2.1, and subject to Paragraph 11.1, and within 30 days of receipt by
Hudson of written notice from the Optionor of such default, Hudson has
not:
(i) cured such default, or commenced proceedings to cure such default
and prosecuted same to completion without undue delay; or
(ii) given the Optionor notice that it denies that such default has
occurred.
(D) delivery of notice of termination by Hudson pursuant to Paragraph
2.1 in the event the Geological Report is not acceptable;
In the event that Hudson gives notice that it denies that a default has
occurred, Hudson shall not be deemed in default until the matter shall
have been determined finally through such means of dispute resolution as
such matter has been subjected to by either party.
10.2 Upon termination of this Agreement under Paragraph 10.1, Hudson
shall:
(A) transfer any interest in title to the Property, in good standing to
the Optionor free and clear of all liens, charges, and encumbrances;
(B) turn over to the Optionor copies of all maps, reports, sample
results, contracts and other data and documentation in the possession of
Hudson or, to the extent within Hudson's control, in the possession of
its agents, employees or independent contractors, in connection with
its operations on the Property; and
(C) ensure that the Property is in a safe condition and complies with
all environmental and safety standards imposed by any duly authorised
regulatory authority.
10.3 Upon the termination of this Agreement under Paragraph 10.1, Hudson
shall cease to be liable to the Optionor in debt, damages or otherwise
save for the performance of those of its obligations which theretofore
should have been performed, including those obligations in Paragraph
10.2.
10.4 Upon termination of this Agreement, Hudson shall vacate the
Property within a reasonable time after such termination, but shall have
the right of access to the Property for a period of six months
thereafter for the purpose of removing its chattels, machinery,
equipment and fixtures.
11. FORCE MAJEURE
11.1 The time for performance of any act or making any payment or any
expenditure required under this Agreement shall be extended by the
period of any delay or inability to perform due to fire, strikes, labour
disturbances, riots, civil commotion, wars, acts of God, any present or
future law or governmental regulation, any shortages of labour,
equipment or materials, or any other cause not reasonably within the
control of the party in default, other than lack of finances.
12. REGULATORY APPROVAL
12.1 If this Agreement is subject to the prior approval of any
securities regulatory bodies, then the parties shall use their best
efforts to obtain such regulatory approvals.
13. NOTICES
13.1 Any notice, election, consent or other writing required or
permitted to be given hereunder shall be deemed to be sufficiently given
if delivered or mailed postage prepaid or if given by telegram, telex or
telecopier, addressed as follows:
In the case of the Optionor: Glen Macdonald
303-1334
Cardero Street
Vancouver, British Columbia
Canada V6G 2J3
Telecopier: (604) 852-6201
In the case of Hudson : Hudson Ventures, Inc.
444 E. Columbia Street
New Westminster, BC
Canada V3L 3W9
Telecopier: (604) 519-1681
and any such notice given as aforesaid shall be deemed to have been
given to the parties hereto if delivered, when delivered, or if mailed,
on the third business day following the date of mailing, or, if
telegraphed, telexed or telecopied, on the same day as the telegraphing,
telexing or telecopying thereof PROVIDED HOWEVER that during the period
of any postal interruption in Canada any notice given hereunder by mail
shall be deemed to have been given only as of the date of actual
delivery of the same. Any party may from time to time by notice in
writing change its address for the purposes of this Paragraph 13.1.
14. GENERAL TERMS AND CONDITIONS
14.1 The parties hereto hereby covenant and agree that they will execute
such further agreements, conveyances and assurances as may be requisite,
or which counsel for the parties may deem necessary to effectually carry
out the intent of this Agreement.
14.2 This Agreement shall constitute the entire agreement between the
parties with respect to the Property. No representations or inducements
have been made save as herein set forth. No changes, alterations or
modifications of this Agreement shall be binding upon either party until
and unless a memorandum in writing to such effect shall have been signed
by all parties hereto. This Agreement shall supersede all previous
written, oral or implied understandings between the parties with respect
to the matters covered hereby.
14.3 Time shall be of the essence of this Agreement.
14.4 The titles to the sections in this Agreement shall not be deemed to
form part of this Agreement but shall be regarded as having been used
for convenience of reference only.
14.5 Unless otherwise noted, all currency references contained in this
Agreement shall be deemed to be references to United States funds.
14.6 Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable
law, but if any provision shall be prohibited by or be invalid under
applicable law, such provision shall be ineffective only to the extent
of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
14.7 The Schedules to this Agreement shall be construed with and as an
integral part of this Agreement to the same extent as if they were set
forth verbatim herein.
14.8 Defined terms contained in this Agreement shall have the same
meanings where used in the Schedules.
14.9 This Agreement shall be governed by and interpreted in accordance
with the laws of British Columbia and the laws of Canada applicable
therein.
14.10 This Agreement shall enure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
WITNESS WHEREOF this Agreement has been executed by the parties hereto
as of the day and year first above written.
GLEN MACDONALD
_/S/ GLEN MACDONALD________
Signature of Authorised Signatory
______________________________
Name of Authorised Signatory
______________________________
Position of Authorised Signatory
HUDSON VENTURES, INC.
by its authorised signatory:
__/S/ DANA UPTON_____
Signature of Authorised Signatory
______________________________
Name of Authorised Signatory
___PRESIDENT________
Position of Authorised Signatory
SCHEDULE "A"
PROPERTY DESCRIPTION
NTS 105 D-6
Latitude 60 16' North, Longitude 135 06' West
WHITEHORSE MINING DISTRICT
YUKON TERRITORY
CANADA
List of Claims
CLAIM NAME GRANT NUMBERS CURRENT EXPIRY DATE
AAV 1-9 YC 19166 - 174 AUGUST 19, 2002
SCHEDULE "B"
JOINT VENTURE AGREEMENT
SCHEDULE "C"
NET SMELTER RETURNS
For the purposes of this agreement, the term "Net Smelter Returns" shall
mean the net proceeds actually paid to Hudson from the sale by Hudson of
minerals mined and removed from the Property, after deduction of the
following:
(a) smelting costs, treatment charges and penalties including, but not
being limited to, metal losses, penalties for impurities and charges for
refining, selling and handling by the smelter, refinery or other
purchaser; provided, however, in the case of leaching operations or
other solution mining or beneficiation techniques, where the metal being
treated is precipitated or otherwise directly derived from such leach
solution, all processing and recovery costs incurred by Hudson, beyond
the point at which the metal being treated is in solution, shall be
considered as treatment charges;
(b) costs of handling, transporting and insuring ores, minerals and
other materials or concentrates from the Property or from a
concentrator, whether situated on or off the Property, to a smelter,
refinery or other place of treatment; and
(c) ad valorem taxes and taxes based upon production, but not income
taxes.
In the event Hudson commingles minerals from the Property with minerals
from other properties, Hudson shall establish procedures, in accordance
with sound mining and metallurgical techniques, for determining the
proportional amount of the total recoverable metal content in the
commingled minerals attributable to the input from each of the
properties by calculating the same on a metallurgical basis, in
accordance with sampling schedules and mining efficiency experience, so
that production royalties applicable to minerals produced from the
Property may reasonably be determined.
EXHIBIT 5.2
OPTION AGREEMENT - McCONNELL RIVER
THIS AGREEMENT is dated for reference the 22 day of January, 2002.
BETWEEN:
GLEN MACDONALD
a British Columbia resident with an address at
303-1334 Cardero Street
Vancouver, British Columbia V6G 2J3
(the "Optionor")
OF THE FIRST PART
AND:
HUDSON VENTURES, INC.
a Nevada corporation with its registered address at
50 West Liberty Street, Suite 880
Reno, Nevada 89501
("Hudson")
OF SECOND PART
WHEREAS:
C. The Optionor is the owner of an undivided 100% right, title and
interest in and to mineral claims described in this Agreement;
D. Hudson wishes to acquire the option to acquire a 90% interest in
the Optionor's property on the terms and subject to the conditions
contained in this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises and the mutual covenants and agreements hereinafter contained,
the parties hereto agree as follows:
15. DEFINITIONS
15.1 In this Agreement, the following terms will have the meaning set
forth below:
(D) "Exploration and Development" means any and all activities
comprising or undertaken in connection with the exploration and
development of the Property, the construction of a mine and mining
facilities on or in proximity to the Property and placing the Property
into commercial production;
(E) "Property" means and includes:
(iii) the mining claims in the Watson Lake Mining District of Yukon
Territory listed in Schedule A to this Agreement; and
(iv) all rights and appurtenances pertaining to the mining claims listed
in Schedule A, including all water and water rights, rights of way, and
easements, both recorded and unrecorded, to which the Optionor is
entitled;
(F) "Property Expenditures" means all reasonable and necessary monies
expended on or in connection with Exploration and Development as
determined in accordance with generally accepted accounting principles
including, without limiting the generality of the foregoing:
(xii) the cost of entering upon, surveying, prospecting and drilling
on the Property;
(xiii) the cost of any geophysical, geochemical and geological
reports or surveys relating to the Property;
(xiv) all filing and other fees and charges necessary or advisable
to keep the Property in good standing with any regulatory authorities
having jurisdiction;
(xv) all rentals, royalties, taxes (exclusive of all income taxes and
mining taxes based on income and which are or may be assessed against
any of the parties hereto) and any assessments whatsoever, whether the
same constitute charges on the Property or arise as a result of the
operation thereon;
(xvi) the cost, including rent and finance charges, of all
buildings, machinery, tools, appliances and equipment and related
capital items that may be erected, installed and used from time to
time in connection with Exploration and Development;
(xvii) the cost of construction and maintenance of camps required for
Exploration and Development;
(xviii) the cost of transporting persons, supplies, machinery and
equipment in connection with Exploration and Development;
(xix) all wages and salaries of persons engaged in Exploration and
Development and any assessments or levies made under the authority of
any regulatory body having jurisdiction with respect to such persons or
supplying food, lodging and other reasonable needs for such persons;
(xx) all costs of consulting and other engineering services including
report preparation;
(xxi) the cost of compliance with all statutes, orders and
regulations respecting environmental reclamation, restoration and other
like work required as a result of conducting Exploration and
Development; and
(xxii) all costs of searching for, digging, working, sampling,
transporting, mining and procuring diamonds, other minerals, ores, and
metals from and out of the Property;
16. OPTION
16.1 The Optionor hereby grants to Hudson the exclusive right and option
to acquire an undivided 90% right, title and interest in and to the
Property (the "Option") for total consideration consisting of cash
payments to the Optionor totalling $2,500 US and the incurrence of
Property Expenditures totalling $25,000 US to be made as follows:
(E) upon execution of this Agreement, the payment to the Optionor of
the sum of $2,500 US, which amount will be refundable pending delivery
of the Geological Report in a form acceptable to Hudson no later than
February 1, 2002;
(F) by June 30, 2003, the incurrence of Property Expenditures in the
amount of $25,000 US;
Upon making the cash payments and Property Expenditures as specified in
Paragraph 2.1, Hudson shall have acquired an undivided 90% right, title
and interest in and to the Property.
This Agreement is an option only and the doing of any act or the making
of any payment by Hudson shall not obligate Hudson to do any further
acts or make any further payments.
17. TRANSFER OF TITLE
17.1 Upon execution of this Agreement, Hudson shall be entitled to
record this Agreement against title to the Property.
17.2 Upon making the cash payments and Property Expenditures as
specified in Paragraph 2.1, the Optionor shall deliver to Hudson a duly
executed bill of sale or quit claim deed and such other executed
documents of transfer as required, in the opinion of Hudson's lawyers,
for the transfer of an undivided 90% interest in the Property to Hudson.
18. JOINT VENTURE
18.1 Upon Hudson acquiring an interest in the Property pursuant to
paragraph 2.1, the Optionor and Hudson agree to join and participate in
a single purpose joint venture ( the "Joint Venture") for the purpose of
further exploring and developing and, if economically and politically
feasible, constructing and operating a mine on the Property. The Joint
Venture shall be governed by an agreement which shall be in the form of
joint venture agreement attached as Schedule B hereto.
19. RIGHT OF ENTRY
19.1 During the currency of this Agreement, Hudson, its servants, agents
and workmen and any persons duly authorised by Hudson, shall have the
right of access to and from and to enter upon and take possession of and
prospect, explore and develop the Property in such manner as Hudson in
its sole discretion may deem advisable for the purpose of incurring
Property Expenditures as contemplated by Section 2, and shall have the
right to remove and ship therefrom ores, minerals, metals, or other
products recovered in any manner therefrom.
[ The balance of this page left intentionally blank]
20.
COVENANTS OF HUDSON
20.1 Hudson covenants and agrees that:
(H) during the term of this Agreement, Hudson shall keep the Property
clear of all liens, encumbrances and other charges and shall keep the
Optionor indemnified in respect thereof;
(I) Hudson shall carry on all operations on the Property in a good and
workmanlike manner and in compliance with all applicable governmental
regulations and restrictions including but not limited to the posting of
any reclamation bonds as may be required by any governmental regulations
or regulatory authorities;
(J) during the term of the option herein, Hudson shall pay or cause to
be paid any rates, taxes, duties, royalties, workers' compensation or
other assessments or fees levied with respect to its operations thereon
and in particular Hudson shall pay the yearly claim maintenance payments
necessary to maintain the claims in good standing;
(K) Hudson shall maintain books of account in respect of its
expenditures and operations on the Property and, upon reasonable notice,
shall make such books available for inspection by representatives of the
Optionor;
(L) Hudson shall allow any duly authorised agent or representative of
the Optionor to inspect the Property at reasonable times and intervals
and upon reasonable notice given to Hudson, provided however, that it is
agreed and understood that any such agent or representative shall be at
his own risk in respect of, and Hudson shall not be liable for, any
injury incurred while on the Property, howsoever caused;
(M) Hudson shall allow the Optionor access at reasonable times to all
maps, reports, sample results and other technical data prepared or
obtained by Hudson in connection with its operations on the Property;
(N) Hudson shall indemnify and save the Optionor harmless of and from
any and all costs, claims, loss and damages whatsoever incidental to or
arising out of any work or operations carried out by or on behalf of
Hudson on the Property, including any liability of an environmental
nature.
21. REPRESENTATIONS AND WARRANTIES
21.1 The Optionor hereby represents and warrants that:
(E) the Property is in good standing with all regulatory authorities
having jurisdictions and all required claim maintenance payments have
been made;
(F) it has not done anything whereby the mineral claims comprising the
Property may be in any way encumbered;
(G) it has full corporate power and authority to enter into this
Agreement and the entering into of this Agreement does not conflict with
any applicable laws or with its charter documents or any contract or
other commitment to which it is party; and
(H) the execution of this Agreement and the performance of its terms
have been duly authorised by all necessary corporate actions including
the resolution of its Board of Directors.
21.2 Hudson hereby represents and warrants that:
(C) it has full corporate power and authority to enter into this
Agreement and the entering into of this Agreement does not conflict with
any applicable laws or with its charter documents or any contract or
other commitment to which it is party; and
(D) the execution of this Agreement and the performance of its terms
have been duly authorised by all necessary corporate actions including
the resolution of its Board of Directors.
22. ASSIGNMENT
22.1 With the consent of the other party, which consent shall not be
unreasonably withheld, Hudson and the Optionor has the right to assign
all or any part of its interest in this Agreement and or in the
Property, subject to the terms and conditions of this Agreement. It
shall be a condition precedent to any such assignment that the assignee
of the interest being transferred agrees to be bound by the terms of
this Agreement, insofar as they are applicable.
23. CONFIDENTIALITY OF INFORMATION
23.1 Each of Hudson and the Optionor shall treat all data, reports,
records and other information of any nature whatsoever relating to this
Agreement and the Property as confidential, except where such
information must be disclosed for public disclosure requirements of a
public company.
24. TERMINATION
24.1 Until such time as Hudson has acquired an undivided 90% interest in
the Property pursuant to Section 2, this Agreement shall terminate upon
any of the following events:
(E) upon the failure of Hudson to make a payment or incur Property
Expenditures required by and within the time limits prescribed by
Paragraph 2.1;
(F) in the event that Hudson, not being at the time in default under
any provision of this Agreement, gives 30 day's written notice to the
Optionor of the termination of this Agreement;
(G) in the event that Hudson shall fail to comply with any of its
obligations hereunder, other than the obligations contained in Paragraph
2.1, and subject to Paragraph 11.1, and within 30 days of receipt by
Hudson of written notice from the Optionor of such default, Hudson has
not:
(iii) cured such default, or commenced proceedings to cure such
default and prosecuted same to completion without undue delay; or
(iv) given the Optionor notice that it denies that such default has
occurred.
(H) delivery of notice of termination by Hudson pursuant to Paragraph
2.1 in the event the Geological Report is not acceptable;
In the event that Hudson gives notice that it denies that a default has
occurred, Hudson shall not be deemed in default until the matter shall
have been determined finally through such means of dispute resolution as
such matter has been subjected to by either party.
24.2 Upon termination of this Agreement under Paragraph 10.1, Hudson
shall:
(D) transfer any interest in title to the Property, in good standing to
the Optionor free and clear of all liens, charges, and encumbrances;
(E) turn over to the Optionor copies of all maps, reports, sample
results, contracts and other data and documentation in the possession of
Hudson or, to the extent within Hudson's control, in the possession of
its agents, employees or independent contractors, in connection with
its operations on the Property; and
(F) ensure that the Property is in a safe condition and complies with
all environmental and safety standards imposed by any duly authorised
regulatory authority.
24.3 Upon the termination of this Agreement under Paragraph 10.1, Hudson
shall cease to be liable to the Optionor in debt, damages or otherwise
save for the performance of those of its obligations which theretofore
should have been performed, including those obligations in Paragraph
10.2.
24.4 Upon termination of this Agreement, Hudson shall vacate the
Property within a reasonable time after such termination, but shall have
the right of access to the Property for a period of six months
thereafter for the purpose of removing its chattels, machinery,
equipment and fixtures.
25. FORCE MAJEURE
25.1 The time for performance of any act or making any payment or any
expenditure required under this Agreement shall be extended by the
period of any delay or inability to perform due to fire, strikes, labour
disturbances, riots, civil commotion, wars, acts of God, any present or
future law or governmental regulation, any shortages of labour,
equipment or materials, or any other cause not reasonably within the
control of the party in default, other than lack of finances.
26. REGULATORY APPROVAL
26.1 If this Agreement is subject to the prior approval of any
securities regulatory bodies, then the parties shall use their best
efforts to obtain such regulatory approvals.
27. NOTICES
27.1 Any notice, election, consent or other writing required or
permitted to be given hereunder shall be deemed to be sufficiently given
if delivered or mailed postage prepaid or if given by telegram, telex or
telecopier, addressed as follows:
In the case of the Optionor:
Glen Macdonald
303-1334 Cardero Street
Vancouver, British Columbia
Canada V6G 2J3
Telecopier: (604) 852-6201
In the case of Hudson : Hudson Ventures, Inc.
444 E. Columbia Street
New Westminster, BC
Canada V6M 2Z2
Telecopier: (604) 519-1681
and any such notice given as aforesaid shall be deemed to have been
given to the parties hereto if delivered, when delivered, or if mailed,
on the third business day following the date of mailing, or, if
telegraphed, telexed or telecopied, on the same day as the telegraphing,
telexing or telecopying thereof PROVIDED HOWEVER that during the period
of any postal interruption in Canada any notice given hereunder by mail
shall be deemed to have been given only as of the date of actual
delivery of the same. Any party may from time to time by notice in
writing change its address for the purposes of this Paragraph 13.1.
28. GENERAL TERMS AND CONDITIONS
28.1 The parties hereto hereby covenant and agree that they will execute
such further agreements, conveyances and assurances as may be requisite,
or which counsel for the parties may deem necessary to effectually carry
out the intent of this Agreement.
28.2 This Agreement shall constitute the entire agreement between the
parties with respect to the Property. No representations or inducements
have been made save as herein set forth. No changes, alterations or
modifications of this Agreement shall be binding upon either party until
and unless a memorandum in writing to such effect shall have been signed
by all parties hereto. This Agreement shall supersede all previous
written, oral or implied understandings between the parties with respect
to the matters covered hereby.
28.3 Time shall be of the essence of this Agreement.
28.4 The titles to the sections in this Agreement shall not be deemed to
form part of this Agreement but shall be regarded as having been used
for convenience of reference only.
28.5 Unless otherwise noted, all currency references contained in this
Agreement shall be deemed to be references to United States funds.
28.6 Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable
law, but if any provision shall be prohibited by or be invalid under
applicable law, such provision shall be ineffective only to the extent
of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
28.7 The Schedules to this Agreement shall be construed with and as an
integral part of this Agreement to the same extent as if they were set
forth verbatim herein.
28.8 Defined terms contained in this Agreement shall have the same
meanings where used in the Schedules.
28.9 This Agreement shall be governed by and interpreted in accordance
with the laws of British Columbia and the laws of Canada applicable
therein.
28.10 This Agreement shall enure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
WITNESS WHEREOF this Agreement has been executed by the parties hereto
as of the day and year first above written.
GLEN MACDONALD
__/S/ GLEN MACDONALD_____
Signature of Authorised Signatory
______________________________
Name of Authorised Signatory
______________________________
Position of Authorised Signatory
HUDSON VENTURES, INC.
by its authorised signatory:
__/S/ DANA UPTON_____________
Signature of Authorised Signatory
______________________________
Name of Authorised Signatory
__PRESIDENT__________________
Position of Authorised Signatory
SCHEDULE "A"
PROPERTY DESCRIPTION
NTS 105 F-10
Latitude 61 35' North, Longitude 132 35' West
WATSON LAKE MINING DISTRICT
YUKON TERRITORY
CANADA
List of Claims
CLAIM NAME GRANT NUMBERS CURRENT EXPIRY DATE
B1-B4 YB 92568 - YB 92571 JUNE 17, 2003
McConnell River Claim Plan 105F-10
District Watson Lake Mining
District
SCHEDULE "B"
NET SMELTER RETURNS
For the purposes of this agreement, the term "Net Smelter Returns" shall
mean the net proceeds actually paid to Hudson from the sale by Hudson of
minerals mined and removed from the Property, after deduction of the
following:
(d) smelting costs, treatment charges and penalties including, but not
being limited to, metal losses, penalties for impurities and charges for
refining, selling and handling by the smelter, refinery or other
purchaser; provided, however, in the case of leaching operations or
other solution mining or beneficiation techniques, where the metal being
treated is precipitated or otherwise directly derived from such leach
solution, all processing and recovery costs incurred by Hudson, beyond
the point at which the metal being treated is in solution, shall be
considered as treatment charges;
(e) costs of handling, transporting and insuring ores, minerals and
other materials or concentrates from the Property or from a
concentrator, whether situated on or off the Property, to a smelter,
refinery or other place of treatment; and
(f) ad valorem taxes and taxes based upon production, but not income
taxes.
In the event Hudson commingles minerals from the Property with minerals
from other properties, Hudson shall establish procedures, in accordance
with sound mining and metallurgical techniques, for determining the
proportional amount of the total recoverable metal content in the
commingled minerals attributable to the input from each of the
properties by calculating the same on a metallurgical basis, in
accordance with sampling schedules and mining efficiency experience, so
that production royalties applicable to minerals produced from the
Property may reasonably be determined.
EXHIBIT 5.31
EXPLORATION JOINT VENTURE AGREEMENT
THIS AGREEMENT made as of the * day of *, 20*
BETWEEN:
GLEN MACDONALD
a British Columbia resident with an address at
303-1334 Cardero Street
Vancouver, British Columbia V6G 2J3
(the "Optionor")
OF THE FIRST PART
AND:
HUDSON VENTURES, INC.
a Nevada corporation with its registered address at
50 Liberty Street, Suite 880
Reno, Nevada 89501
("Hudson")
OF SECOND PART
WHEREAS:
A. Hudson owns a 90% and GLEN MACDONALD owns a 10% undivided
right, title and interest in and to the Property;
B. The parties wish to create a joint venture to carry out the
continued exploration of the Property on the terms and subject to the
conditions hereinafter set forth;
C. The parties have agreed that, if following the completion of
such exploration a Feasibility Report is prepared which recommends
placing the Property into commercial production, they will negotiate and
settle a further joint venture agreement for the development and placing
of the Property into commercial production;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises, and of the mutual covenants and agreements herein contained,
the parties hereto have agreed and do hereby agree as follows:
1. DEFINITIONS
1.1 In this Agreement, including the Recitals and Schedules hereto
the following words and expressions shall have the following meanings:
(a) "Affiliate" shall have the same meaning as under the Company Act
(British Columbia) as at the date hereof;
(b) "Agreement" means this Joint Venture Agreement as amended from
time to time;
(c) "Costs" means all items of outlay and expense whatsoever, both
direct and indirect incurred by or on behalf of the parties, in
connection with the Property, the exploration and development
thereof and expenses in respect of the Feasibility Report;
(d) "Feasibility Report" means a detailed written report of the
results of a comprehensive study on the economic feasibility of
placing the Property or a portion thereof into commercial
production and shall include a reasonable assessment of the
mineral ore reserves and their amenability to metallurgical
treatment, a description of the work, equipment and supplies
required to bring the Property or a portion thereof into
commercial production and the estimated cost thereof, a
description of the mining methods to be employed and a financial
appraisal of the proposed operations supported by an explanation
of the data used therein;
(e) "Interest" means the undivided beneficial percentage interest
from time to time of a party in the Joint Venture, the Property,
and Mineral Products, as set out hereunder;
(f) "Joint Venture" means the joint venture created pursuant to this
Agreement;
(g) "Management Committee" means the committee of representatives of
the parties to this Agreement constituted in accordance with the
provisions of article 5 to manage or supervise the management of
the business and affairs of the Joint Venture;
(h) "Mineral Products" means the end products derived from operating
the Property as a mine;
(i) "Net Profits" shall mean net profits calculated in accordance
with Schedule "B" hereto;
(j) "Operator" means the operator appointed pursuant to article 6;
(k) "Other Tenements" means all surface rights of and to any lands
within or outside the Property including surface held in fee or
under lease, licence, easement, right of way or other rights of
any kind (and all renewals, extensions and amendments thereof or
substitutions therefor) acquired by or on behalf of the parties
with respect to the Property;
(l) "Program" means a plan, including budgets, for the Project or any
part thereof as approved by the Management Committee pursuant to
this Agreement;
(m) "Project" means the exploration and development of the Property
and preparation and delivery of a Feasibility Report;
(n) "Property" means those certain mining claims and related rights
and interests set out and more particularly described in Schedule
"A" hereto and Other Tenements and shall include any renewal
thereof and any form of substitute or successor title thereto;
and
(o) "Royalty" shall mean a royalty on the Net Profits calculated and
paid in accordance with Schedule "B" hereto.
2. REPRESENTATIONS AND WARRANTIES
2.1 Hudson represents to GLEN MACDONALD that:
(a) it is the legal and beneficial owner of a 90% Interest free and
clear of all liens, charges and encumbrances; and
(b) save and except as set out herein, there is no adverse claim or
challenge against or to the ownership of or title to Hudson's
Interest or any portion thereof, nor is there any basis therefor,
and there are no outstanding agreements or options to acquire or
purchase Hudson's Interest or any portion thereof.
2.2 GLEN MACDONALD represents to Hudson that:
(a) it is the legal and beneficial owner of a 10% Interest free and
clear of all liens, charges and encumbrances; and
(b) save and except as set out herein, there is no adverse claim or
challenge against or to the ownership of or title to GLEN
MACDONALD's Interest or any portion thereof, nor is there any
basis therefor, and there are no outstanding agreements or
options to acquire or purchase GLEN MACDONALD's Interest or any
portion thereof.
2.3 Each of the parties represents to the other that:
(a) it is a company duly incorporated, organized and validly
subsisting under the laws of its incorporating jurisdiction;
(b) it has full power and authority to carry on its business and
enter into this Agreement and any agreement or instrument
referred to or contemplated by this Agreement and to carry out
and perform all of its obligations hereunder;
(c) it has duly obtained all corporate authorizations for the
execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated, and the
execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated will not
conflict with or result in any breach of any covenants or
agreements contained in, or constitute a default under, or result
in the creation of any encumbrance, lien or charge under the
provisions of its constating documents or any indenture,
agreement or other instrument whatsoever to which it is a party
or by which it is bound or to which it may be subject and will
not contravene any applicable laws.
2.4 The representations and warranties hereinbefore set out are
conditions on which the parties have relied in entering into this
Agreement, are to be construed as both conditions and warranties and shall,
regardless of any investigation which may have been made by or on behalf of
any party as to the accuracy of such representations and warranties,
survive the closing of the transactions contemplated hereby and each of the
parties will indemnify and save the other harmless from all loss, damage,
costs, actions and suits arising out of or in connection with any breach of
any representation or warranty contained in this Agreement and each party
shall be entitled, in addition to any other remedy to which it may be
entitled, to set off any such loss, damage or costs suffered by it as a
result of any such breach against any payment required to be made by it to
the other party hereunder.
3. PURPOSE AND CREATION OF THE JOINT VENTURE
3.1 The parties agree each with the other to use their best efforts
to explore and develop the Property with the goal of eventually putting the
Property into commercial production should a Feasibility Report
recommending commercial production be obtained and a decision to commence
commercial production be made, which Feasibility Report and decision have
not, at the date of this Agreement, been obtained or made and for this
purpose hereby agree to associate and participate in a single purpose joint
venture to carry out all such acts which are necessary or appropriate,
directly or indirectly, to carry out the Project.
3.2 The parties have not created a partnership and nothing contained
in this Agreement shall in any manner whatsoever constitute a party the
partner, agent or legal representative of any other party or create any
fiduciary relationship between them for any purpose whatsoever. No party
shall have any authority to act for or to assume any obligations or
responsibility on behalf of any other party except as may be, from time to
time, agreed upon in writing between the parties or as otherwise expressly
provided.
3.3 The rights and obligations of each party shall be in every case
several and not joint or joint and several.
3.4 Beneficial ownership of the Property shall remain in each party
in proportion to its respective Interest and any legal title to the
Property held by any party shall be subject to this Agreement. All
property held, acquired or contributed by or on behalf of the parties under
or pursuant to this Agreement shall be beneficially owned by the parties as
tenants in common in proportion to their respective Interests.
3.5 Each party shall make available its Interest exclusively for the
purposes of the Project and, in particular, each party agrees to grant a
mortgage, charge, lien or other encumbrance on, or any security interest
in, its Interest to and in favour of any lender to facilitate financing of
the Project or any portion thereof.
3.6 The rights and obligations of the parties created under this
Agreement shall be strictly limited to the Project and shall not be
extended by implication or otherwise, except with the unanimous written
consent of the parties.
3.7 Except as may be otherwise expressly provided in this Agreement,
nothing herein shall restrict in any way the freedom of any party, except
with respect to its Interest, to conduct as it sees fit any business or
activity whatsoever, including the development or application of any
process, and the exploration for, development, mining, extraction,
production, handling, processing or any treatment, transportation or
marketing of any ore, mineral or other product for any other purpose,
without any accountability to any other party.
3.8 Each party shall do all things and execute all documents
necessary in order to maintain the Property and the Project in good
standing provided that all Costs need only be met by each party in
proportion to its Interest.
3.9 Except as may be otherwise expressly specified in this Agreement,
each party, in proportion to its Interest, shall indemnify and hold
harmless each other party and each director, officer, employee, agent and
representative of each other party, from and against any claim of or
liability to any third person asserted on the ground that action taken
under this Agreement has resulted in or will result in any loss or damage
to such third person to the extent, but only to the extent,that such claim
or liability is paid by such other party in the amount in excess of that
amount payable by reason of such other party's Interest, but the foregoing
shall not prejudice any claim of any party against the Operator.
3.10 Each party covenants and agrees with the other:
(a) to perform or cause to be performed its obligations and
commitments under this Agreement and, without limiting the
generality of the foregoing, to pay Costs in proportion to its
Interest except as may be otherwise provided in article 4 hereof;
(b) not to engage either alone or in association with others in any
activity in respect of the Property or the Project except as
provided or authorized by this Agreement.
4. DILUTION
4.1 Upon formation of the Joint Venture, Hudson shall be deemed to
have incurred Costs of $202,500 and GLEN MACDONALD to have incurred Costs
of $20,250.
4.2 The respective Interests of the parties shall be subject to
variation from time to time in the event:
(a) of failure by a party to pay its proportionate share of Costs;
(b) subject to section 8.6 hereof, of the election by a party not to
participate in a Program; or
(c) subject to section 8.6 hereof, of the election by a party to pay
less than its proportionate share of Costs in respect of a
Program adopted by the Management Committee.
4.3 Upon the happening of any of the events set forth in subsection
4.2 hereof, each party's Interest shall be varied to equal the product
obtained by multiplying 100% by a fraction of which the numerator shall be
the amount of Costs paid by such party and of which the denominator shall
be the total amount of Costs paid by all parties. For the purposes of this
section, the amount of Costs paid by a party shall include the amount of
Costs deemed to have been paid by that party as set forth in section 4.1.
4.4 In the event that a party's Interest is reduced to 5% or less by
the operation of section 4.3 hereof, such party shall forfeit its Interest
to the other party and shall receive as consideration therefor a Royalty
equal to 2% of Net Profits payable within 60 days after the end of each
calendar quarter. If, as a result of such forfeiture, one party has an
Interest equal to 100% the Joint Venture shall terminate.
5. MANAGEMENT COMMITTEE
5.1 A Management Committee, consisting of one representative of each
party, and one or more alternate representatives, shall be constituted and
appointed forthwith after the formation of the Joint Venture. The
Management Committee shall manage, or supervise the management of, the
business and affairs of the Joint Venture and shall exercise all such
powers and do all such acts as the Joint Venture may exercise and do. The
Management Committee shall meet within 15 days of its constitution and may
otherwise meet at such places as it thinks fit for the dispatch of
business, adjourn and otherwise regulate its meetings and proceedings as
the members thereof deem fit. The Chairman of all meetings shall be a
representative of the Operator. Matters decided at any meeting of the
Management Committee shall be decided by a simple majority of votes with
each party's representatives being entitled to cast that number of votes
which is equal to that party's Interest, and, in the case of an equality of
votes, the dispute shall be referred to arbitration pursuant to article 20.
Unless agreed to in writing by the parties hereto, all meetings of the
Management Committee shall be held in Vancouver, British Columbia. Any
meetings may, if both parties so consent, be held by conference telephone.
5.2 A quorum for any meeting of the Management Committee shall
consist of a representative or representatives of a party or parties whose
Interests aggregate equal to or in excess of 95%. No business other than
the election of a chairman, if any, and the adjournment or termination of
the meeting shall be dealt with if a quorum is not present at the
commencement of the meeting but the quorum need not be present throughout
the meeting. A meeting at which a quorum is not present shall be adjourned
to the same time and place one week later at which adjourned meeting a
quorum shall be one representative of a party.
5.3 A meeting of the Management Committee at which a quorum is
present shall be competent to exercise all or any of the authorities,
powers and discretion bestowed upon the Management Committee in this
Agreement.
5.4 No questions submitted to the Management Committee need be
seconded and the chairman, if any, of the meeting shall be entitled to
submit the questions.
5.5 The decision on any matter evidenced by the consent in writing of
the representatives of all parties shall be as valid as if it had been
decided at a duly called and held meeting of the Management Committee.
Each written consent may be signed in counterparts each consented to in
writing by one or more representatives which together shall be deemed to
constitute one consent.
5.6 At the time of any decision by the Management Committee to adopt
a Program, the parties shall, subject to the provisions of article 8
hereof, pay their proportionate share of the estimated Costs of such
Program by depositing the same into the interest bearing bank account
opened and maintained pursuant to section 5.7 hereof.
5.7 The Operator shall open and maintain an interest bearing bank
account with a Canadian Chartered bank in the name of the Joint Venture and
shall use the funds on deposit therein for the purposes of the Joint
Venture. The Operator shall appoint signing officers on the said account
as shall be required and shall advise the parties of the particulars of the
said account.
5.8 Each of the parties hereby agree that any interest earned on any
sums deposited in the bank account opened and maintained pursuant to
section 5.7 hereof shall be shared in proportion to their respective
Interests.
5.9 If the Operator fails to do so, any party (the "Paying Party")
may pay any reasonable Costs due to maintain the Property in good standing
and the other party shall, in proportion to its Interest and within 15 days
of being given notice of such payment, reimburse the Paying Party for such
payment, failing such reimbursement the party not paying shall forfeit its
Interest to the Paying Party and this Agreement shall terminate.
5.10 At any time during the currency of this Agreement the Management
Committee may cause a Feasibility Report to be prepared by a substantial
and well recognized Canadian engineering firm in such form as the
Management Committee may require. The Management Committee shall,
forthwith upon receipt of a Feasibility Report, provide each of the parties
with a copy thereof. Upon request of any party and at reasonable intervals
and times the parties shall meet in order to discuss the Feasibility
Report.
6. OPERATOR
6.1 The initial Operator shall be GLEN MACDONALD, which shall
continue as operator until changed pursuant to section 8.2 or by a decision
of the Management Committee with parties representing Interests of 75% or
more voting in favour. If the Operator has failed to perform in a manner
that is consistent with good mineral exploration and development practice
or is in default of its duties and responsibilities under this Agreement,
and the Management Committee or the other party has given to the Operator
written notice setting forth particulars of the Operator's default and the
Operator has not within 30 days of such notice commenced to remedy the
default and thereafter to proceed continuously and diligently to complete
all required remedial action the other party shall become the Operator.
6.2 The Operator may at any time on 60 days' notice to the Management
Committee resign as Operator, in which event the Management Committee shall
select another party or person to be Operator upon the 30th day after
receipt of the Operator's notice of resignation or such sooner date as the
Management Committee may establish and give notice of to the resigning
Operator. The resigning Operator shall thereupon be released and
discharged from all its duties and obligations as Operator on the earlier
of those dates save only as to those duties and obligations that it
theretofore should have performed.
6.3 Upon the Operator making a voluntary or involuntary assignment
into bankruptcy or taking advantage of any legislation for the winding-up
or liquidation of the affairs of insolvent or bankrupt companies the
Operator shall automatically cease to be the Operator and the other party
or its nominee appointed as Operator.
6.4 The new Operator shall assume all of the rights, duties,
obligations and status of the Operator as provided in this Agreement, other
than the previous Operator's Interest, if any, without obligation to retain
or hire any of the employees of the former Operator or to indemnify the
former Operator for any costs or expenses which the previous Operator will
incur as a result of the termination of employment of any of its employees
resulting from this change of Operator, and shall continue to act as
Operator until its replacement or resignation.
6.5 The Operator shall be paid by the Joint Venture, as compensation
for general overhead expenses which the Operator may incur, an amount equal
to 10% of all Costs in each year but only 5% of Costs paid by the Operator
under any contract involving payments by it in excess of $100,000 in one
year.
7. POWERS, DUTIES AND OBLIGATIONS OF OPERATOR
7.1 Subject to the control and direction of the Management Committee,
the Operator shall have full right, power and authority to do everything
necessary or desirable to carry out a Program and the Project and to
determine the manner of exploration and development of the Property and,
without limiting the generality of the foregoing, the right, power and
authority to:
(a) regulate access to the Property subject only to the right of
representatives of the parties to have access to the Property at
all reasonable times for the purpose of inspecting work being
done thereon but at their own risk and expense;
(b) employ and engage such employees, agents and independent
contractors as it may consider necessary or advisable to carry
out its duties and obligations hereunder and in this connection
to delegate any of its powers and rights to perform its duties
and obligations hereunder, but the Operator shall not enter into
contractual relationships with a party except on terms which are
commercially competitive;
(c) execute all documents, deeds and instruments, do or cause to be
done all such acts and things and give all such assurances as may
be necessary to maintain good and valid title to the Property and
each party hereby irrevocably constitutes the Operator its true
and lawful attorney to give effect to the foregoing and hereby
agrees to indemnify and save the Operator harmless from any and
all costs, loss or damage sustained or incurred without gross
negligence or bad faith by the Operator directly or indirectly as
a result of its exercise of its powers pursuant to this
subsection;
(d) conduct such title examination and cure such title defects as may
be advisable in the reasonable judgment of the Operator.
7.2 The Operator shall have the following duties and obligations
during the term hereof:
(a) to diligently manage, direct and control all exploration and
development operations in and under the Property in a prudent and
workmanlike manner and in compliance with all applicable laws,
rules, orders and regulations;
(b) to prepare and deliver to each of the parties during the periods
of active field work, quarterly progress reports of the work in
progress, on or before the day which is 45 days following each
calendar quarter with respect to work done in such quarter and on
or before March 31st of every year comprehensive annual reports
covering the activities hereunder and the results obtained during
the 12 month period ending on December 31 immediately preceding;
(c) to prepare and deliver to each of the parties copies of all
assays, maps and drill logs immediately upon their preparation or
receipt;
(d) subject to the terms and conditions of this Agreement, to keep
the Property in good standing, free and clear of all liens,
charges and encumbrances of every character arising from
operations (except for those which are in effect on the date of
this Agreement or are created pursuant to this Agreement, liens
for taxes not yet due, other inchoate liens and liens contested
in good faith by the Operator) and to proceed with all diligence
to contest or discharge any lien that is filed by reason of the
Operator's failure to perform its obligations hereunder;
(e) to maintain true and correct books, accounts and records of
operations hereunder separate and apart from any other books,
accounts and records maintained by the Operator;
(f) to permit one representative of the parties, appointed in
writing, at all reasonable times and at their expense to inspect,
audit and copy the Operator's accounts and records relating to
the Project for any fiscal year of the Operator within nine
months following the end of such fiscal year;
(g) to obtain and maintain and cause any contractor engaged hereunder
to obtain and maintain during any period in which active work is
carried out hereunder such insurance coverage as the Management
Committee deems advisable;
(h) to permit the parties or their representatives, appointed in
writing, at all reasonable times, at their own expense and risk,
reasonable access to the Property and all data derived from
carrying out a Program;
(i) to open and maintain on behalf of the Joint Venture such bank
account or bank accounts as the Management Committee may direct
with a Canadian chartered bank;
(j) to prosecute and defend, but not to initiate without the consent
of the Management Committee, all litigation or administrative
proceedings arising out of the Property, or Project;
(k) to transact, undertake and perform all transactions, contracts,
employments, purchases, operations, negotiations with third
parties and any other matter or thing undertaken by or on behalf
of the Joint Venture hereunder in the Operator's name and to
promptly pay all expenditures incurred in connection therewith
when due; and
(l) to maintain in good standing those mineral claims comprised in
the Property by the doing and filing of all assessment work or
the making of payments in lieu thereof and by the payment of all
taxes and other like charges and payments.
7.3 Subject to any specific provisions of this Agreement, the
Operator, in carrying out its duties and obligations hereunder, shall at
all times be subject to the direction and control of the Management
Committee and shall perform its duties hereunder in accordance with the
instructions and directions as from time to time communicated to it by the
Management Committee and shall make all reports to the Management Committee
except where otherwise specifically provided herein.
7.4 The Operator shall commence and diligently complete the Project
and without limiting the generality of the foregoing, may retain an
independent consulting geologist acceptable to all parties to prepare a
report in respect of the Project, the results thereof, the conclusions
derived therefrom and the recommendation as to whether or not further work
should be conducted on the Property.
8. PROGRAMS
8.1 Costs shall only be incurred under and pursuant to Programs
prepared by the Operator, approved by the Management Committee and
delivered to the parties as provided in this article. Any Feasibility
Report shall be prepared pursuant to a separate Program.
8.2 The Operator shall prepare and submit to the parties a Program
within 180 days of the completion of the previous Program. If the Operator
does not prepare a Program within the time limited, then the other party
shall have the right to prepare a Program for submission to the other party
at which time the party submitting the Program shall become the Operator.
8.3 Within 30 days of the receipt by the parties of a Program, each
party shall give written notice to the Operator stating whether or not they
elect to contribute their proportionate share of Costs of such Program or
requesting the Operator to revise the Program provided that each party may
only make such requests once in respect of each Program. Subject to
subsection 8.6, failure by either of the parties to give notice pursuant to
this subsection within such 30 day period shall be deemed an election by
that party not to contribute to such Program.
8.4 If a party elects or is deemed to have elected not to contribute
its proportionate share of the Costs of a Program, the other party may give
notice in writing to the Operator stating that it will contribute all
expenditures under or pursuant to such Program and the Operator will
proceed with such Program and thereafter the Interests of the parties shall
be adjusted in accordance with article 4. The Operator will not proceed
with any Program which is not fully subscribed.
8.5 If the parties elect to contribute their proportionate share of
the Costs of a Program, the Operator will then proceed with the Program.
8.6 If either party elects or is deemed to have elected not to
contribute to a Program its Interest will not be subject to adjustment
thereunder if, within 60 days of such election or deemed election, it
elects to pay to the contributing party 150% of what would otherwise have
been its contribution to the Costs of such Program, but any amount so paid
in excess of what would otherwise have been its contribution to such
Program shall be deemed not to be a contribution to Costs by the party
making it.
8.7 An election by a party to contribute to the Costs of a Program
shall make that party liable to pay its proportionate share of the Costs
actually incurred under or pursuant to the Program including Program
Overruns, as hereinafter defined, of up to but not exceeding 10%.
8.8 After having elected to contribute its proportionate share of the
Costs of a Program which is proceeded with, a party shall, within 15 days
after being requested in writing to do so by the Operator, pay such portion
of its share of Costs as the Operator may require but the Operator shall
not require payment of any funds in advance if the party provides the
Operator with reasonable assurance and evidence that it has secured
financing by way of the issuance of "flow-through" shares sufficient to pay
its proportionate share of the Costs of a Program and such financing
requires that party to incur the Costs before funds are advanced to the
party. At any other time the Operator shall not require payment of funds
more than one month in advance.
8.9 If it appears that Costs will exceed by greater than 10% those
estimated under a Program the Operator shall immediately give written
notice to the party or parties contributing to that Program outlining the
nature and extent of the additional costs and expenses ("Program
Overruns"). If Program Overruns are approved by the party or parties
contributing to that Program, then within 15 days after the receipt of a
written request from the Operator, the party or parties contributing to
that Program shall provide the Operator with their respective shares of
such Program Overruns. If Program Overruns are not approved by the party
or parties contributing to that Program, the Operator shall have the right
to curtail or abandon the portion of such Program relating to the Program
Overruns.
8.10 If either party at any time fails to pay its proportionate share
of Costs in accordance with subsections 8.8 or 8.9, the Operator may give
written notice to that party demanding payment, and if the party has not
paid such amount within 15 days of the receipt of such notice, that party
shall:
(a) be deemed to be in default under subsection 8.8 or 8.9 as
applicable; and
(b) forfeit its Interest to the other party and shall receive as
consideration therefore a Royalty equal to 2% of Net Profits
payable within 60 days after the end of each calendar quarter.
If, as a result of such forfeiture, one party has an Interest
equal to 100% the Joint Venture shall terminate.
9. INFORMATION AND DATA
9.1 At all times during the subsistence of this Agreement the duly
authorized representatives of each party shall have access to the Property
and the Project at its and their sole risk and expense and at reasonable
intervals and times, and shall further have access at all reasonable times
to all technical records and other factual engineering data and information
relating to the Property and the Project in the possession of the
Management Committee or the Operator. In exercising the right of access to
the Property or the Project the representatives of a party shall abide by
the rules and regulations laid down by the Management Committee and by the
Operator relating to matters of safety and efficiency. If any
representative of a party is not a director, senior officer or employee of
a party, the party shall so advise the Operator so that the Operator may
require the representative, before giving him access to the Property or the
Project or to data or information relating thereto, to sign an undertaking
in favour of the Joint Venture, in form and substance satisfactory to the
Operator, to maintain confidentiality to the same extent as each party is
required to do under section 9.2 hereof.
9.2 All records, reports, accounts and other documents referred to
herein with respect to the Property and the Project and all information and
data concerning or derived from the Property and the Project shall be kept
confidential and each party shall take or cause to be taken such reasonable
precautions as may be necessary to prevent the disclosure thereof to any
person other than each party, the Operator, an Affiliate, their respective
legal, accounting and financial or other professional advisors, and any
financial institution or other person having made, making or negotiating
loans to one or more of the foregoing or any trustee for any such person,
or as may be required by securities or corporate laws and regulations or by
the policies of any securities commission or stock exchange, or in
connection with the filing of an offering memorandum, rights offering
circular, prospectus or statement of material facts by a party, an
Affiliate or the Operator or to a prospective assignee as permitted
hereunder, or as may be required in the performance of obligations under
this Agreement without prior consent of all parties, which consent shall
not be unreasonably withheld.
10. PARTITION
10.1 No party shall, during the term of this Agreement, exercise any
right to apply for any partition of the Property or for sale thereof in
lieu of partition.
11. TAXATION
11.1 Each party on whose behalf any Costs have been incurred shall be
entitled to claim all tax benefits, write-offs and deductions with respect
thereto.
12. RIGHT OF FIRST REFUSAL
12.1 Save and except as provided in section 3.5 and article 4 hereof,
neither party shall transfer, convey, assign, mortgage or grant an option
in respect of or grant a right to purchase or in any manner transfer or
alienate all or any portion of its Interest or rights under this Agreement
otherwise than in accordance with this article.
12.2 Nothing in this article shall prevent:
(a) a sale by a party of all of its Interest or an assignment of all
its rights under this Agreement to an Affiliate provided that
such Affiliate first complies with the provisions of section
12.10 and agrees with the other party in writing to retransfer
such Interest to the originally assigning party before ceasing to
be an Affiliate of such party;
(b) a variation pursuant to section 4.3; or
(c) a disposition pursuant to an amalgamation or corporate
reorganization which will have the effect in law of the
amalgamated or surviving company possessing all the property,
rights and interests and being subject to all the debts,
liabilities and obligations of each amalgamating or predecessor
company.
12.3 Should a party (the "transferring party") intend to dispose of
all or any portion of its Interest or rights under this Agreement it shall
first give notice in writing to the other parties (the "other parties") of
such intention together with the terms and conditions on which the
transferring party intends to dispose of its Interest or a portion thereof
or rights under this Agreement.
12.4 If a party (the "transferring party") receives any offer to
dispose of all or any portion of its Interest or rights under this
Agreement which it intends to accept, the transferring party shall not
accept the same unless and until it has first offered to sell such Interest
or rights to the other parties (the "other parties") on the same terms and
conditions as in the offer received and the same has not been accepted by
the other parties in accordance with section 12.6.
12.5 Any communication of an intention to sell pursuant to section
12.3 and 12.4 (the "Offer") shall be in writing delivered in accordance
with article 14 and shall:
(a) set out in reasonable detail all of the terms and conditions of
any intended sale;
(b) if it is made pursuant to section 12.3, include a photocopy of
the Offer; and
(c) if it is made pursuant to section 12.4, clearly identify the
offering party and include such information as is known by the
transferring party about such offering party;
and such communication will be deemed to constitute an Offer by the
transferring party to the other parties to sell the transferring party's
Interest or its rights (or a portion thereof as the case may be) under this
Agreement to the other parties on the terms and conditions set out in such
Offer. For greater certainty it is agreed and understood that any Offer
hereunder shall deal only with the disposition of the Interest or rights of
the transferring party hereunder and not with any other interest, right or
property of the transferring party and such disposition shall be made
solely for a monetary consideration.
12.6 Any Offer made as contemplated in section 12.5 shall be open for
acceptance by the other parties for a period of 60 days from the date of
receipt of the Offer by the other parties.
12.7 If the other parties accept the Offer within the period provided
for in section 12.6, such acceptance shall constitute a binding agreement
of purchase and sale between the transferring party and the other parties,
in proportion to their Interests, for the Interest or its rights (or a
portion thereof as the case may be) under this Agreement on the terms and
conditions set out in such Offer.
12.8 If the other parties do not accept the Offer within the period
provided for in section 12.6, the transferring party may complete a sale
and purchase of its Interest or a portion thereof on terms and conditions
no less favorable to the transferring party than those set out in the Offer
and, in the case of an Offer under section 12.4, only to the party making
the original offer to the transferring party and in any event such sale and
purchase shall be completed within nine months from the expiration of the
right of the other parties to accept such Offer or the transferring party
must again comply with the provisions of this article.
12.9 If the other parties do accept the Offer within the period
provided for in section 12.6 but fail to close the transaction contemplated
thereby within 90 days following receipt of such Offer, the transferring
party may complete a sale and purchase of its Interest or a portion thereof
on any terms and conditions but in any event such sale and purchase shall
be completed within nine months from the expiration of the right of the
other parties to accept such Offer or the transferring party must again
comply with the provisions of this article.
12.10 While any Offer is outstanding no other Offer may be made until
the first mentioned Offer is disposed of and any sale resulting therefrom
completed or abandoned in accordance with the provisions of this article.
12.11 Before the completion of any sale by the transferring party of
its Interest or rights or any portion thereof under this Agreement, the
purchasing party shall enter into an agreement with the parties agreeing
not to sell except on the same terms and conditions as set out in this
Agreement.
130 FORCE MAJEURE
13.1 No party will be liable for its failure to perform any of its
obligations under this Agreement due to a cause beyond its reasonable
control (except those caused by its own lack of funds) including, but not
limited to acts of God, fire, flood, explosion, strikes, lockouts or other
industrial disturbances, laws, rules and regulations or orders of any duly
constituted governmental authority or non-availability of materials or
transportation (each an "Intervening Event").
13.2 All time limits imposed by this Agreement will be extended by a
period equivalent to the period of delay resulting from an Intervening
Event.
13.3 A party relying on the provisions of section 13.1 will take all
reasonable steps to eliminate any Intervening Event and, if possible, will
perform its obligations under this Agreement as far as practical, but
nothing herein will require such party to settle or adjust any labour
dispute or to question or to test the validity of any law, rule, regulation
or order of any duly constituted governmental authority or to complete its
obligations under this Agreement if an Intervening Event renders completion
impossible.
140 NOTICE
14.1 Any notice, direction, cheque or other instrument required or
permitted to be given under this Agreement shall be in writing and may be
given by delivery or by sending by telecopier, in each case addressed to
the intended recipient at the address of the respective party set out on
the front page hereof.
14.2 Any notice, direction, cheque or other instrument aforesaid will,
if delivered, be deemed to have been given and received on the day it was
delivered, and, if sent by telecopier, be deemed to have been given or
received on the day it was so sent.
14.3 Any party may at any time give to the other notice in writing of
any change of address of the party giving such notice and from and after
the giving of such notice the address or addresses therein specified will
be deemed to be the address of such party for the purposes of giving notice
hereunder.
150 WAIVER
15.1 If any provision of this Agreement shall fail to be strictly
enforced or any party shall consent to any action by any other party or
shall waive any provision as set out herein, such action by such party
shall not be construed as a waiver thereof other than at the specific time
that such waiver or failure to enforce takes place and shall at no time be
construed as a consent, waiver or excuse for any failure to perform and act
in accordance with this Agreement at any past or future occasion.
160 FURTHER ASSURANCES
16.1 Each of the parties hereto shall from time to time and at all
times do all such further acts and execute and deliver all further deeds
and documents as shall be reasonably required in order to fully perform and
carry out the terms of this Agreement. For greater certainty this section
shall not be construed as imposing any obligation on any party to provide
guarantees.
170 USE OF NAME
17.1 No party shall, except when required by this Agreement or by any
law, by-law, ordinance, rule, order or regulation, use, suffer or permit to
be used, directly or indirectly, the name of any other party for any
purpose related to the Property or the Project.
180 ENTIRE AGREEMENT
18.1 This Agreement embodies the entire agreement and understanding
among the parties hereto and supersedes all prior agreements and
undertakings, whether oral or written, relative to the subject matter
hereof.
190 AMENDMENT
19.1 This Agreement may not be changed orally but only by an agreement
in writing, executed by the party or parties against which enforcement,
waiver, change, modification or discharge is sought.
200 ARBITRATION
20.1 If any question, difference or dispute shall arise between the
parties or any of them in respect of any matter arising under this
Agreement or in relation to the construction hereof the same shall be
determined by the award of three arbitrators to be named as follows:
(a) the party or parties sharing one side of this dispute shall name
an arbitrator and give notice thereof to the party or parties
sharing the other side of the dispute;
(b) the party or parties sharing the other side of the dispute shall,
within 14 days of receipt of the notice, name an arbitrator; and
(c) the two arbitrators so named shall, within 15 days of the naming
of the latter of them, select a third arbitrator.
The decision of the majority of these arbitrators shall be made
within 30 days after the selection of the latter of them. The expense of
the arbitration shall be borne by the parties to the dispute as determined
by the arbitrators. If the parties on either side of the dispute fail to
name their arbitrator within the time limited or proceed with the
arbitration, the arbitrator named may decide the question. The arbitration
shall be conducted in accordance with the provisions of the Commercial
Arbitration Act (British Columbia) and the decision of the arbitrator or a
majority of the arbitrators, as the case may be, shall be conclusive and
binding upon all the parties.
210 RIGHT TO AUDIT
21.1 Any party acquiring a Royalty pursuant to this Agreement shall
have the right to audit at its expense the books and records in respect of
such Royalty of the Operator or the other party, if it is not the Operator
in respect of such Royalty.
220 TIME
22.1 Unless earlier terminated by agreement of all parties or as a
result of one party acquiring a 100% Interest, the Joint Venture and this
Agreement shall remain in full force and effect for so long as any part of
the Property or Project is held in accordance with this Agreement.
Termination of the Agreement shall not, however, relieve any party from any
obligations theretofore accrued but unsatisfied.
230 RULE AGAINST PERPETUITIES
23.1 If any right, power or interest of any party in any Property
under this Agreement would violate the rule against perpetuities, then such
right, power or interest shall terminate at the expiration of 20 years
after the death of the last survivor of all the lineal descendants of her
Majesty, Queen Elizabeth II of the United Kingdom, living on the date of
this Agreement.
240 DOCUMENT RETENTION ON TERMINATION
24.1 Prior to the distribution of the Property or the Project or the
net revenues received on the disposal thereof on termination of this
Agreement, the Management Committee shall meet and may approve a procedure
for the retention, maintenance and disposal of documents maintained by the
Management Committee (the "Documents") and shall appoint such party as may
consent thereto to ensure that all proper steps are taken to implement and
maintain that procedure. If a quorum is not present at the meeting or if
the Management Committee fails to approve a procedure as aforesaid, the
Operator, if a party, otherwise the party holding the largest Interest as
at the day immediately preceding the date the Management Committee was
called to meet, shall retain, maintain and dispose of the Documents
according to such procedure, in compliance with all applicable laws, as it
deems fit. The party entrusted with the retention, and expenses incidental
thereto, shall be entitled to receive payment of those costs and expenses
prior to any distribution being made of the Property and Project or the net
revenues received on the disposal thereof.
250 ENUREMENT
25.1 This Agreement shall enure to the benefit of and be binding upon
the parties hereto and their respective successors and permitted assigns.
260 GOVERNING LAW
26.1 This Agreement shall be governed by and interpreted in accordance
with the laws of the Province of British Columbia.
270 SEVERABILITY
27.1 If any one or more of the provisions contained herein should be
invalid, illegal or unenforceable in any respect in any jurisdiction, the
validity, legality and enforceability of such provision shall not in any
way be affected or impaired thereby in any other jurisdiction and the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
280 NUMBER AND GENDER
28.1 Words used herein importing the singular number only shall
include the plural, and vice versa, and words importing the masculine
gender shall include the feminine and neuter genders, and vice versa, and
words importing persons shall include firms and corporations.
290 HEADINGS
29.1 The division of this Agreement into articles and sections and the
insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement.
300 TIME OF THE ESSENCE
30.1 Time shall be of the essence in the performance of this
Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day, month and year first above written.
GLEN MACDONALD
by its authorised signatory:
______________________________
Signature of Authorised Signatory
______________________________
Name of Authorised Signatory
______________________________
Position of Authorised Signatory
HUDSON VENTURES, INC.
by its authorised signatory:
______________________________
Signature of Authorised Signatory
______________________________
Name of Authorised Signatory
______________________________
Position of Authorised Signatory
SCHEDULE "A"
to that certain Joint Venture Agreement between * and * made as of the *
day of *, 20*
THE PROPERTIES
The mineral claims comprising the Wheaton River Property consist of nine
mineral claims located in the Whitehorse Mining District in the Yukon
Territories, Canada. The claims are described as follows:
NTS 105 D-6
Latitude 60 16' North, Longitude 135 06' West
WHITEHORSE MINING DISTRICT
YUKON TERRITORY
CANADA
CLAIM NAME GRANT NUMBERS CURRENT EXPIRY DATE
AAV 1-9 YC 19166 - 174 AUGUST 19, 2003
The mineral claims comprising the McConnell River Property consist of four
mineral claims located in the Watson Lake Mining District in the Yukon
Territories, Canada. The claims are described as follows:
NTS 105 F-10
Latitude 61 35' North, Longitude 132 35' West
WATSON LAKE MINING DISTRICT
YUKON TERRITORY
CANADA
CLAIM NAME GRANT NUMBERS CURRENT EXPIRY DATE
B1-B4 YB 92568 - YB 92571 June 17, 2003
McConnell River Claim Plan 105F-10
District Watson Lake Mining
District
SCHEDULE "B"
To that agreement dated as of the * day of *, 20* between * and *.
1. "Net Profits" means the aggregate of:
(a) all revenues from the sale or other disposition of ores, metals
or minerals mined or extracted from the Property or any portion
thereof and any concentrates produced therefrom;
(b) all revenues from the operation, sale or other disposition of any
Facilities the cost of which is included in the definition of
"Operating Expenses", "Capital Expenses" or "Exploration
Expenses"; and
(c) Working Capital deducted in the calculation of Net Profits for
the prior period,
less (without duplication) Working Capital, Operating Expenses, Capital
Expenses and Exploration Expenses.
2. "Working Capital" means the amount reasonably necessary to
provide for the operation of the mining operation on the Property and for
the operation and maintenance of the Facilities for a period of six months.
3. "Operating Expenses" means all costs, expenses, obligations,
liabilities and charges of whatsoever nature or kind incurred or chargeable
directly or indirectly in connection with commercial production from the
Property and in connection with the maintenance and operation of the
Facilities, all in accordance with generally accepted accounting
principles, consistently applied, including, without limiting the
generality of the foregoing, all amounts payable in connection with mining,
handling, processing, refining, transporting and marketing of ore,
concentrates, metals, minerals and other products produced from the
Property, all amounts payable for the operation and maintenance of the
Facilities including the replacement of items which by their nature require
periodic replacement, all taxes (other than income taxes), royalties and
other imposts and all amounts payable or chargeable in respect of
reasonable overhead and administrative services.
4. "Capital Expenses" means all expenses, obligations and
liabilities of whatsoever kind (being of a capital nature in accordance
with generally accepted accounting principles) incurred or chargeable,
directly or indirectly, with respect to the development, acquisition,
redevelopment, modernization and expansion of the Property and the
Facilities, including, without limiting the generality of the foregoing,
interest thereon from the time so incurred or chargeable at a rate per
annum from time to time equal to the "prime rate" of the Royal Bank of
Canada plus 2% per annum, but does not include Operating Expenses nor
Exploration Expenses.
5. "Exploration Expenses" means all costs, expenses, obligations,
liabilities and charges of whatsoever nature or kind incurred or
chargeable, directly or indirectly, in connection with the exploration and
development of the Property all determined in accordance with generally
accepted accounting principles including, without limiting the generality
of the foregoing, all costs reasonably attributable, in accordance with
generally accepted accounting principles, to the design,planning, testing,
financing, administration, marketing, engineering, legal, accounting,
transportation and other incidental functions associated with the
exploration and mining operation contemplated by this Agreement and with
the Facilities, but does not include Operating Expenses nor Capital
Expenses.
6. "Facilities" means all plant, equipment, structures, roads, rail
lines, storage and transport facilities, housing and service structures,
real property or interest therein, whether on the Property or not, acquired
or constructed exclusively for the mining operation on the Property
contemplated by this Agreement.
7. Installments of the Royalty payable shall be paid by the Operator
as follows:
(a) within 45 days after the end of each of the first three calendar
quarters in each fiscal year and within 60 days of the end of the
last calendar quarter in each year, the Operator shall pay to the
royalty holder an amount equal to 25% of the estimated Royalty,
if any, for the fiscal year, adjusted if necessary after the
first quarter of any fiscal year to reflect any change during the
fiscal year in estimated Royalty; and
(b) within 120 days after the end of the calendar year, the balance,
if any, of Royalty payable in respect of the fiscal year last
completed.
Should the Operator not pay the royalty holder the installment of
the Royalty payable within the time specified then such unpaid installment
of Royalty shall bear interest equal to the "prime rate" of the Royal Bank
of Canada plus 2% per annum calculated from the last day of the calendar
quarter in which the liability for the payment of the installment of
Royalty arose.
8. The Operator shall, within 45 days after the end
of each calendar quarter, furnish to the royalty holder
quarterly unaudited statements respecting operations on the
Property, together with a statement showing the calculation
of Royalty for the calendar quarter last completed.
9. Within 120 days after the end of each calendar
year, the accounts of the Operator relating to operations on
the Property and the statement of operations, which shall
include the statement of calculation of Royalty for the year
last completed, shall be audited by the auditors of the
Operator, at its expense. The royalty holder shall have 45
days after receipt of such statements to question the
accuracy thereof in writing and, failing such objection, the
statements shall be deemed to be correct and unimpeachable
thereafter.
10. If the audited financial statements furnished
pursuant to paragraph 9 disclose any overpayment of Royalty
by the Operator during the year, the amount of the
overpayment shall be deducted from future installments of
Royalty payable hereunder.
11. If the audited financial statements furnished
pursuant to paragraph 9 disclose any underpayment of Royalty
by the Operator during the year, the amount thereof shall be
paid to the royalty holder forthwith after determination
thereof.
12. The Operator agrees to maintain, for each mining
operation on the Property, up-to-date and complete records
relating to the production and sale of minerals, ore,
bullion and other product from the Property, including
accounts, records, statements and returns relating to
treatment and smelting arrangements of such product, and the
royalty holder or its agents shall have the right at all
reasonable times, including for a period of 12 months
following the expiration or termination of this Agreement,
to inspect such records, statements and returns and make
copies thereof at its own expense for the purpose of
verifying the amount of Royalty payments to be made by the
Operator to the royalty holder pursuant hereto. The royalty
holder shall have the right, at its own expense, to have
such accounts audited by independent auditors once each
year.
OPTION AGREEMENT - McCONNELL RIVER
THIS AGREEMENT is dated for reference the 22 day of January, 2002.
BETWEEN:
GLEN MACDONALD
a British Columbia resident with an address at
303-1334 Cardero Street
Vancouver, British Columbia V6G 2J3
(the "Optionor")
OF THE FIRST PART
AND:
HUDSON VENTURES, INC.
a Nevada corporation with its registered
address at
50 West Liberty Street, Suite 880
Reno, Nevada 89501
("Hudson")
OF SECOND PART
WHEREAS:
E. The Optionor is the owner of an undivided 100% right,
title and interest in and to mineral claims described in
this Agreement;
F. Hudson wishes to acquire the option to acquire a 90%
interest in the Optionor's property on the terms and subject
to the conditions contained in this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the premises and the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
29. DEFINITIONS
29.1 In this Agreement, the following terms will have the
meaning set forth below:
(G) "Exploration and Development" means any and all
activities comprising or undertaken in connection with the
exploration and development of the Property, the
construction of a mine and mining facilities on or in
proximity to the Property and placing the Property into
commercial production;
(H) "Property" means and includes:
(v) the mining claims in the Watson Lake Mining District of
Yukon Territory listed in Schedule A to this Agreement; and
(vi) all rights and appurtenances pertaining to the mining
claims listed in Schedule A, including all water and water
rights, rights of way, and easements, both recorded and
unrecorded, to which the Optionor is entitled;
(I) "Property Expenditures" means all reasonable and
necessary monies expended on or in connection with
Exploration and Development as determined in accordance with
generally accepted accounting principles including, without
limiting the generality of the foregoing:
(xxiii) the cost of entering upon, surveying, prospecting
and drilling on the Property;
(xxiv) the cost of any geophysical, geochemical and
geological reports or surveys relating to the Property;
(xxv) all filing and other fees and charges necessary or
advisable to keep the Property in good standing with any
regulatory authorities having jurisdiction;
(xxvi) all rentals, royalties, taxes (exclusive of all
income taxes and mining taxes based on income and which are
or may be assessed against any of the parties hereto) and
any assessments whatsoever, whether the same constitute
charges on the Property or arise as a result of the
operation thereon;
(xxvii) the cost, including rent and finance charges, of
all buildings, machinery, tools, appliances and equipment
and related capital items that may be erected, installed and
used from time to time in connection with Exploration and
Development;
(xxviii) the cost of construction and maintenance of camps
required for Exploration and Development;
(xxix) the cost of transporting persons, supplies,
machinery and equipment in connection with Exploration and
Development;
(xxx) all wages and salaries of persons engaged in
Exploration and Development and any assessments or levies
made under the authority of any regulatory body having
jurisdiction with respect to such persons or supplying food,
lodging and other reasonable needs for such persons;
(xxxi) all costs of consulting and other engineering
services including report preparation;
(xxxii) the cost of compliance with all statutes, orders
and regulations respecting environmental reclamation,
restoration and other like work required as a result of
conducting Exploration and Development; and
(xxxiii) all costs of searching for, digging, working,
sampling, transporting, mining and procuring diamonds, other
minerals, ores, and metals from and out of the Property;
30. OPTION
30.1 The Optionor hereby grants to Hudson the exclusive
right and option to acquire an undivided 90% right, title
and interest in and to the Property (the "Option") for total
consideration consisting of cash payments to the Optionor
totalling $2,500 US and the incurrence of Property
Expenditures totalling $25,000 US to be made as follows:
(G) upon execution of this Agreement, the payment to the
Optionor of the sum of $2,500 US, which amount will be
refundable pending delivery of the Geological Report in a
form acceptable to Hudson no later than February 1, 2002;
(H) by June 30, 2003, the incurrence of Property
Expenditures in the amount of $25,000 US;
Upon making the cash payments and Property Expenditures as
specified in Paragraph 2.1, Hudson shall have acquired an
undivided 90% right, title and interest in and to the
Property.
This Agreement is an option only and the doing of any act or
the making of any payment by Hudson shall not obligate
Hudson to do any further acts or make any further payments.
31. TRANSFER OF TITLE
31.1 Upon execution of this Agreement, Hudson shall be
entitled to record this Agreement against title to the
Property.
31.2 Upon making the cash payments and Property Expenditures
as specified in Paragraph 2.1, the Optionor shall deliver to
Hudson a duly executed bill of sale or quit claim deed and
such other executed documents of transfer as required, in
the opinion of Hudson's lawyers, for the transfer of an
undivided 90% interest in the Property to Hudson.
32. JOINT VENTURE
32.1 Upon Hudson acquiring an interest in the Property
pursuant to paragraph 2.1, the Optionor and Hudson agree to
join and participate in a single purpose joint venture ( the
"Joint Venture") for the purpose of further exploring and
developing and, if economically and politically feasible,
constructing and operating a mine on the Property. The
Joint Venture shall be governed by an agreement which shall
be in the form of joint venture agreement attached as
Schedule B hereto.
33. RIGHT OF ENTRY
33.1 During the currency of this Agreement, Hudson, its
servants, agents and workmen and any persons duly authorised
by Hudson, shall have the right of access to and from and to
enter upon and take possession of and prospect, explore and
develop the Property in such manner as Hudson in its sole
discretion may deem advisable for the purpose of incurring
Property Expenditures as contemplated by Section 2, and
shall have the right to remove and ship therefrom ores,
minerals, metals, or other products recovered in any manner
therefrom.
[ The balance of this page left intentionally blank]
34.
COVENANTS OF HUDSON
34.1 Hudson covenants and agrees that:
(O) during the term of this Agreement, Hudson shall keep
the Property clear of all liens, encumbrances and other
charges and shall keep the Optionor indemnified in respect
thereof;
(P) Hudson shall carry on all operations on the Property in
a good and workmanlike manner and in compliance with all
applicable governmental regulations and restrictions
including but not limited to the posting of any reclamation
bonds as may be required by any governmental regulations or
regulatory authorities;
(Q) during the term of the option herein, Hudson shall pay
or cause to be paid any rates, taxes, duties, royalties,
workers' compensation or other assessments or fees levied
with respect to its operations thereon and in particular
Hudson shall pay the yearly claim maintenance payments
necessary to maintain the claims in good standing;
(R) Hudson shall maintain books of account in respect of
its expenditures and operations on the Property and, upon
reasonable notice, shall make such books available for
inspection by representatives of the Optionor;
(S) Hudson shall allow any duly authorised agent or
representative of the Optionor to inspect the Property at
reasonable times and intervals and upon reasonable notice
given to Hudson, provided however, that it is agreed and
understood that any such agent or representative shall be at
his own risk in respect of, and Hudson shall not be liable
for, any injury incurred while on the Property, howsoever
caused;
(T) Hudson shall allow the Optionor access at reasonable
times to all maps, reports, sample results and other
technical data prepared or obtained by Hudson in connection
with its operations on the Property;
(U) Hudson shall indemnify and save the Optionor harmless
of and from any and all costs, claims, loss and damages
whatsoever incidental to or arising out of any work or
operations carried out by or on behalf of Hudson on the
Property, including any liability of an environmental
nature.
35. REPRESENTATIONS AND WARRANTIES
35.1 The Optionor hereby represents and warrants that:
(I) the Property is in good standing with all regulatory
authorities having jurisdictions and all required claim
maintenance payments have been made;
(J) it has not done anything whereby the mineral claims
comprising the Property may be in any way encumbered;
(K) it has full corporate power and authority to enter into
this Agreement and the entering into of this Agreement does
not conflict with any applicable laws or with its charter
documents or any contract or other commitment to which it is
party; and
(L) the execution of this Agreement and the performance of
its terms have been duly authorised by all necessary
corporate actions including the resolution of its Board of
Directors.
35.2 Hudson hereby represents and warrants that:
(E) it has full corporate power and authority to enter into
this Agreement and the entering into of this Agreement does
not conflict with any applicable laws or with its charter
documents or any contract or other commitment to which it is
party; and
(F) the execution of this Agreement and the performance of
its terms have been duly authorised by all necessary
corporate actions including the resolution of its Board of
Directors.
36. ASSIGNMENT
36.1 With the consent of the other party, which consent
shall not be unreasonably withheld, Hudson and the Optionor
has the right to assign all or any part of its interest in
this Agreement and or in the Property, subject to the terms
and conditions of this Agreement. It shall be a condition
precedent to any such assignment that the assignee of the
interest being transferred agrees to be bound by the terms
of this Agreement, insofar as they are applicable.
37. CONFIDENTIALITY OF INFORMATION
37.1 Each of Hudson and the Optionor shall treat all data,
reports, records and other information of any nature
whatsoever relating to this Agreement and the Property as
confidential, except where such information must be
disclosed for public disclosure requirements of a public
company.
38. TERMINATION
38.1 Until such time as Hudson has acquired an undivided 90%
interest in the Property pursuant to Section 2, this
Agreement shall terminate upon any of the following events:
(I) upon the failure of Hudson to make a payment or incur
Property Expenditures required by and within the time limits
prescribed by Paragraph 2.1;
(J) in the event that Hudson, not being at the time in
default under any provision of this Agreement, gives 30
day's written notice to the Optionor of the termination of
this Agreement;
(K) in the event that Hudson shall fail to comply with any
of its obligations hereunder, other than the obligations
contained in Paragraph 2.1, and subject to Paragraph 11.1,
and within 30 days of receipt by Hudson of written notice
from the Optionor of such default, Hudson has not:
(v) cured such default, or commenced proceedings to cure
such default and prosecuted same to completion without undue
delay; or
(vi) given the Optionor notice that it denies that such
default has occurred.
(L) delivery of notice of termination by Hudson pursuant to
Paragraph 2.1 in the event the Geological Report is not
acceptable;
In the event that Hudson gives notice that it denies that a
default has occurred, Hudson shall not be deemed in default
until the matter shall have been determined finally through
such means of dispute resolution as such matter has been
subjected to by either party.
38.2 Upon termination of this Agreement under Paragraph
10.1, Hudson shall:
(G) transfer any interest in title to the Property, in good
standing to the Optionor free and clear of all liens,
charges, and encumbrances;
(H) turn over to the Optionor copies of all maps, reports,
sample results, contracts and other data and documentation
in the possession of Hudson or, to the extent within
Hudson's control, in the possession of its agents, employees
or independent contractors, in connection with its
operations on the Property; and
(I) ensure that the Property is in a safe condition and
complies with all environmental and safety standards imposed
by any duly authorised regulatory authority.
38.3 Upon the termination of this Agreement under Paragraph
10.1, Hudson shall cease to be liable to the Optionor in
debt, damages or otherwise save for the performance of those
of its obligations which theretofore should have been
performed, including those obligations in Paragraph 10.2.
38.4 Upon termination of this Agreement, Hudson shall vacate
the Property within a reasonable time after such
termination, but shall have the right of access to the
Property for a period of six months thereafter for the
purpose of removing its chattels, machinery, equipment and
fixtures.
39. FORCE MAJEURE
39.1 The time for performance of any act or making any
payment or any expenditure required under this Agreement
shall be extended by the period of any delay or inability to
perform due to fire, strikes, labour disturbances, riots,
civil commotion, wars, acts of God, any present or future
law or governmental regulation, any shortages of labour,
equipment or materials, or any other cause not reasonably
within the control of the party in default, other than lack
of finances.
40. REGULATORY APPROVAL
40.1 If this Agreement is subject to the prior approval of
any securities regulatory bodies, then the parties shall use
their best efforts to obtain such regulatory approvals.
41. NOTICES
41.1 Any notice, election, consent or other writing required
or permitted to be given hereunder shall be deemed to be
sufficiently given if delivered or mailed postage prepaid or
if given by telegram, telex or telecopier, addressed as
follows:
In the case of the Optionor:
Glen Macdonald
303-1334 Cardero Street
Vancouver, British Columbia
Canada V6G 2J3
Telecopier: (604) 852-6201
In the case of Hudson :
Hudson Ventures, Inc.
444 E. Columbia Street
New Westminster, BC
Canada V6M 2Z2
Telecopier: (604) 777-8801
and any such notice given as aforesaid shall be deemed to
have been given to the parties hereto if delivered, when
delivered, or if mailed, on the third business day following
the date of mailing, or, if telegraphed, telexed or
telecopied, on the same day as the telegraphing, telexing or
telecopying thereof PROVIDED HOWEVER that during the period
of any postal interruption in Canada any notice given
hereunder by mail shall be deemed to have been given only as
of the date of actual delivery of the same. Any party may
from time to time by notice in writing change its address
for the purposes of this Paragraph 13.1.
42. GENERAL TERMS AND CONDITIONS
42.1 The parties hereto hereby covenant and agree that they
will execute such further agreements, conveyances and
assurances as may be requisite, or which counsel for the
parties may deem necessary to effectually carry out the
intent of this Agreement.
42.2 This Agreement shall constitute the entire agreement
between the parties with respect to the Property. No
representations or inducements have been made save as herein
set forth. No changes, alterations or modifications of this
Agreement shall be binding upon either party until and
unless a memorandum in writing to such effect shall have
been signed by all parties hereto. This Agreement shall
supersede all previous written, oral or implied
understandings between the parties with respect to the
matters covered hereby.
42.3 Time shall be of the essence of this Agreement.
42.4 The titles to the sections in this Agreement shall not
be deemed to form part of this Agreement but shall be
regarded as having been used for convenience of reference
only.
42.5 Unless otherwise noted, all currency references
contained in this Agreement shall be deemed to be references
to United States funds.
42.6 Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision shall be
prohibited by or be invalid under applicable law, such
provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of
this Agreement.
42.7 The Schedules to this Agreement shall be construed with
and as an integral part of this Agreement to the same extent
as if they were set forth verbatim herein.
42.8 Defined terms contained in this Agreement shall have
the same meanings where used in the Schedules.
42.9 This Agreement shall be governed by and interpreted in
accordance with the laws of British Columbia and the laws of
Canada applicable therein.
42.10 This Agreement shall enure to the benefit of and
be binding upon the parties hereto and their respective
heirs, executors, administrators, successors and assigns.
WITNESS WHEREOF this Agreement has been executed by the
parties hereto as of the day and year first above written.
GLEN MACDONALD
______________________________
Signature of Authorised Signatory
______________________________
Name of Authorised Signatory
______________________________
Position of Authorised Signatory
HUDSON VENTURES, INC.
by its authorised signatory:
______________________________
Signature of Authorised Signatory
______________________________
Name of Authorised Signatory
______________________________
Position of Authorised Signatory
SCHEDULE "A"
PROPERTY DESCRIPTION
NTS 105 F-10
Latitude 61 35' North, Longitude 132 35' West
WATSON LAKE MINING DISTRICT
YUKON TERRITORY
CANADA
List of Claims
CLAIM NAME GRANT NUMBERS CURRENT EXPIRY
DATE
B1-B4 YB 92568 - YB 92571 JUNE 17, 2003
McConnell River Claim Plan 105F-10
District Watson Lake Mining
District
SCHEDULE "B"
NET SMELTER RETURNS
For the purposes of this agreement, the term "Net Smelter
Returns" shall mean the net proceeds actually paid to Hudson
from the sale by Hudson of minerals mined and removed from
the Property, after deduction of the following:
(g) smelting costs, treatment charges and penalties
including, but not being limited to, metal losses, penalties
for impurities and charges for refining, selling and
handling by the smelter, refinery or other purchaser;
provided, however, in the case of leaching operations or
other solution mining or beneficiation techniques, where the
metal being treated is precipitated or otherwise directly
derived from such leach solution, all processing and
recovery costs incurred by Hudson, beyond the point at which
the metal being treated is in solution, shall be considered
as treatment charges;
(h) costs of handling, transporting and insuring ores,
minerals and other materials or concentrates from the
Property or from a concentrator, whether situated on or off
the Property, to a smelter, refinery or other place of
treatment; and
(i) ad valorem taxes and taxes based upon production, but
not income taxes.
In the event Hudson commingles minerals from the Property
with minerals from other properties, Hudson shall establish
procedures, in accordance with sound mining and
metallurgical techniques, for determining the proportional
amount of the total recoverable metal content in the
commingled minerals attributable to the input from each of
the properties by calculating the same on a metallurgical
basis, in accordance with sampling schedules and mining
efficiency experience, so that production royalties
applicable to minerals produced from the Property may
reasonably be determined.
Exhibit 5.5
for
Hudson Venture Inc.
444 E. Columbia Street
New Westminster, British Columbia
V3L 3W9
by
W. TIMMINS, P.Eng.
January 23, 2002
GEOLOGICAL REPORT
on the
WHEATON RIVER PROPERTY
NTS 105 D-6
Latitude 60 16'N, Longitude 135 06' W
Whitehorse Mining District
TABLE OF CONTENTS
Page
EXECUTIVE SUMMARY.............................................iii
INTRODUCTION 1
LOCATION AND ACCESS 1
PHYSIOGRAPHY, VEGETATION AND CLIMATE 2
PROPERTY 3
HISTORY OF EXPLORATION 3
REGIONAL GEOLOGY 5
MINERALIZATION 7
PROPERTY GEOLOGY 8
DISCUSSION OF ROCK UNITS 10
ECONOMIC GEOLOGY 14
CONCLUSIONS 15
RECOMMENDATIONS 17
APPENDIX A - CERTIFICATE OF QUALIFICATIONS
APPENDIX B - REFERENCES
Following
LIST OF FIGURES AND TABLES Page
Figure 1 Location Map 1
Figure 2 Claim Plan 3
Figure 3 Regional Geology 5
Figure 4 Location of Major Eocene Rhyolite Intrusions 7
Figure 5A,B Property Geology 9
LIST OF TABLES
Table 1 Table of Claims page 2
Table 2 Table of Formations following page 5
Table 3 Table of Vein Characteristics following page 7
Table 4 List of Mineral Occurrences page 14
EXECUTIVE SUMMARY
Hudson Ventures Inc. has acquired the AAV 1-9 mineral claims located in
Canada's Yukon Territory. The property is situated some 40 kilometres south
of Whitehorse, Yukon Territory's capital city.
The claims are accessible via an all-weather gravel and paved government
maintained road system which includes a tidewater port road link to
Skagway, Alaska. The claims are linked by a secondary road with the Mt.
Skukum gold mill approximately 20 kilometres away, although a minor amount
of new road construction would shorten the distance appreciably.
The Mount Skukum mill is a modern 500 ton per day gold silver production
facility that is capable of producing both bars and metal concentrates
depending on the type of ore being processed. The mill is currently idle
while it's owners develop new reserves at nearby underground - mineable
deposits on their own claims.
The property has been progressively explored since 1983 with work to date
including road construction, bulldozer trenching, grid controlled
geophysical, geochemical, and geological surveying and prospecting. Work to
date has a replacement value exceeding US $ 400,000.
The Wheaton River Project of Hudson Ventures has the potential to host two
or more Mt. Skukum style high grade gold silver occurrences. Of particular
interest is an area where extensive mineralized boulder "trains" occur down
slope from a geophysical/geochemical anomaly. A second target occurs where
one trench tested a geochemical anomaly, achieved bedrock exposure and
assayed 341 grams per tonne (11.0 oz/ton) silver over a 5 metre (16.5 feet)
silicified limestone horizon.
If a significant precious metal zone can be outlined at the Hudson Ventures
Wheaton River Property, the Mt Skukum milling and mining operation would be
available to act as project operator in order to secure additional mill
feed for what is now being organized as a regional custom milling
operation. The Mt Skukum concept is to develop their own two larger scale
mining operations to supply the bulk of the ore production with smaller
satellite operations of their own and others, including Hudson Venture's
prospects, increasing efficiency of the milling operation by supplying mill
feed to operate at full capacity.
INTRODUCTION
Hudson Ventures Inc. has agreed to purchase the "AAV 1-9"
property, located in the Wheaton River District of Southwest
Yukon. The claims, totaling 9, cover occurrences of gold and
silver mineralization in at least two environments. Some of the
mineralization is related to Eocene Skukum Group volcanics, which
hosted the Mt. Skukum Gold Mine nearby. Previous exploration by
other groups at AAV 1-9 includes soil geochemical and VLF-EM
geophysical surveys, geological mapping, bulldozer and blast
trenching and (prior to World War II) underground drifting. The
Hudson Ventures Inc.'s property is considered to represent a
geological environment permissive to contain significant gold-
silver occurrences. A program of exploration is hereby
recommended. The author is familiar with the claims having
consulted on exploration programs conducted there during the
1980's and visited the property in 1999.
LOCATION INFRASTRUCTURE AND ACCESS
Hudson Ventures Inc.'s Wheaton River claims cover a broad
northwest trending ridge south of Pugh Peak (referred to locally
as "Gold Hill"), extending from the Wheaton River to Hodnett
Lakes on NTS Map Sheet 105D-6. The property lies 40 km south of
Whitehorse at geographical coordinates 60 16'N latitude, 135 06'W
longitude (see Figures 1 and 2).
The Alaska and Klondike Highways, and the Wheaton River-Mount
Skukum all-season gravel road provide access to the area. A four-
wheel drive road follows Thompson Creek from the Wheaton Road to
the property. Presently access to the claims is on foot or by
helicopter because the road is closed by a slide. The claims are
linked by a secondary road with the Mt. Skukum gold mill
approximately 20 kilometres away, although a minor amount of new
road construction would shorten the distance appreciably.
The town of Whitehorse, Yukon Territory's capital city has an
experienced work force that is familiar with mining and all
aspects of mineral development.
The Mount Skukum mill is a modern 500 ton per day gold silver
production facility that is capable of producing both bars
and metal concentrates depending on the type of ore being
processed. The mill is currently idle while it's owners develop
new reserves at nearby underground - mineable deposits on their
own claims. The Mt Skukum concept is to develop their own two
larger scale mining operations to supply the bulk of the ore
production with smaller satellite operations of their own and
others increasing efficiency of the milling operation by
supplying mill feed to operate at full capacity.
PHYSIOGRAPHY, CLIMATE AND VEGETATION
The Wheaton River district lies in the Boundary Ranges of the
Coast Mountains, a rolling uplands area featuring prominent peaks
and steep-walled stream and river valleys. Glacial action has
modified major river valleys to deep U-shaped drainages with
terrace and outwash deposits. Topographically, the area becomes
progressively more severe to the southwest, culminating in
2,500 m mountains and ice fields at the headwaters of the Wheaton
and Watson Rivers.
A maximum elevation of 1,850 metres is reached on the Hudson
Ventures Inc. claims while the lowest lying feature is Wheaton
River at 884 metres. The claims cover a barren northwest-trending
ridge extending from the Wheaton River to Hodnett Lakes. Outcrop
is common on steep slopes descending from the rounded ridge top.
The effects of local alpine glaciation are evident on the
northern side of Pugh Peak, where cirques and tarns are present.
Southwestern Yukon has a dry sub-arctic climate, locally modified
by the Pacific Ocean. Summer temperatures average 12oC and
annual precipitation totals 40 cm. The exploration season lasts
from May until October. Vegetation in the upland consists of
dwarf grasses, moss and lichen. Timber is restricted to the main
valleys at elevations below 1,200 metres.
PROPERTY
Hudson Ventures Inc.'s Wheaton River claims are located in the
Whitehorse Mining District of Yukon Territory. The property
consists of 9 claims as detailed in Table 1 of this report, and
shown on Figure 2.
TABLE 1
CLAIM STATUS
Claim Name Grant Numbers Current Expiry Date
AAV 1-9 YC 19166 - 174 August 19, 2003
HISTORY OF EXPLORATION
The Wheaton River/Lake Bennett district was first explored by
prospectors travelling along the major lakes and rivers of
southwestern Yukon in the early 1890's. The original claims
recorded in the district were those of prospectors Corwin and
Rickman who, in 1893, located antimony showings on Carbon Hill
and gold-silver bearing quartz veins at an undisclosed site. The
Klondike Gold Rush brought a great influx of people to the Yukon,
many of whom crossed Lake Bennett en route to Dawson City these
individuals strayed into the Wheaton Valley, locating claims in
the Schnabel Creek drainage in 1903.
More intensive exploration began in 1906 after the discovery of
free gold and gold-silver tellurides on Gold Hill by D. Hodnett
and J. Stagar, and the rediscovery of the Corwin-Rickman antimony-
silver showings on Carbon and Chieftain Hills. Wagon roads were
built along the Wheaton River, Thompson Creek and Stevens Creek
to provide access to numerous adits and pits on Mount Anderson.
Limited mining of high grade gold and silver bearing ore occurred
on the Gold Reef vein at the northeastern end of Gold Hill and on
the Becker-Cochran (Whirlwind) property on the west face of Mount
Anderson. Adits and shafts on Mount Stevens and Wheaton Mountain
were probably exploratory; no record of ore production exists.
The Tally-Ho Mine on Tally-Ho Mountain was the most significant
operation during the early years of activity in the area. For
example, there is a record of a shipment in 1918, of 14 tons of
hand-sorted ore grading 2.35 oz/ton gold, 5.1 oz/ton silver and
7% lead which was smelted at Tacoma.
On Montana Mountain, Colonel Conrad and associates developed
several gold and silver bearing quartz veins on the slope above
Windy Arm, Tagish Lake. A small mill on the shore of Windy Arm
processed ore extracted from the Venus, Montana and Big Thing
quartz veins between 1906 and 1920.
From the mid-1920's to the late 1960's, little exploration of
significance took place. By 1970's, many of the old showings
were restaked as an increase in the value of base and precious
metals rekindled the interest of prospectors and mining companies
in the area. The Venus and Arctic mines operated on Montana
Mountain between 1969-1971. The Venus Mine was again
rehabilitated during 1980-1981 and a new mill was installed at
the southern end of Windy Arm.
The discovery and development of the Mount Skukum Mine, coupled
with a dramatic rise in the price of gold and silver caused a
methodical staking rush in the Wheaton Valley-Bennett Lake
district in the 1980's. The area has developed into a mining camp
and presently there are over 1,000 mineral claims in good
standing. Exploration and development work has continued at the
Goodell and Omni properties
On the area covered by the Hudson Ventures Inc. claims, recent
exploration started in 1984-1985 when Wheaton River Joint Venture
performed prospecting, grid development, mapping, geochemical and
geophysical surveys, and bulldozer trenching and road building.
Mineralized quartz veins and stockworks were discovered in
several locations along the 5 kilometre long ridge.
During 1987 and 1988 Ranger Pacific Minerals Ltd. and others
performed additional geochemical and geophysical survey work, and
blast trenching to better define target zones previously
identified and to further explore the property.
During the period 1991 to 2000 exploration work done by the
owners has included bulldozer trenching, road construction,
geological mapping and prospecting. Exploration and development
costs incurred to date, on the Hudson Ventures Inc. property have
a replacement value exceeding US $400,000 with some US $200,000
being expended since 1996.
REGIONAL GEOLOGY
The geology of the Bennett Lake district was initially mapped by
D.D. Cairnes of the GSC, published in Memoir 31 (1912); and later
by J. Wheelter, published in Memoir 312 (1961). Recently the
region has been remapped by R.A. Doherty & C.J.R. Hart and
released as Open File 1988-2. Figure 3 shows the regional
geology.
The Wheaton River/Bennett Lake district overlies the boundary
between two terrains: (1) the Whitehorse Trough consisting of
Mesozoic and Paleozoic folded metavolcanic and metasedimentary
rocks, and (2) crystalline rocks of the Coast Plutonic Complex
and Yukon Crystalline Terrane, consisting of metasedimentary
rocks of the Late Precambrian or Paleozoic Yukon Group intruded
by Mid-Cretaceous granite or granodiorite plutons. Both terrains
are intruded and overlain by Early Tertiary volcanic rocks of the
Skukum Group. Figure 3 shows the regional geology.
The Whitehorse Trough features a complex assemblage of deformed
volcanic and sedimentary rocks consisting of the Triassic Lewes
River Group, the Lower Jurassic Laberge Group and the Jurassic
Tantalus Group. The Lewes River Group consists of andesite,
basalt and pyroclastic flows, and foliated marine sedimentary
rocks. A narrow but continuous unit of limestone, limestone
breccia and quartzite has been traced in a northwesterly
direction from the west side of Mount Stevens across Tally-Ho
Mountain and Gold Hill to the Hodnett Lakes. Interbedded schists
occur with the limestone and volcanic rocks of the Lewes River
Group. A narrow band of Tantalus Group conglomerates and Laberge
Group siltstones outcrops on Folle Mountain and Idaho Hill;
however, rocks of these groups primarily outcrop north and east
of the Wheaton River/Bennett Lake district.
Cretaceous granitic rocks of the Coast Plutonic Complex are the
most common in the district; typically, they consist of fresh
quartz monzonite, granodiorite or quartz diorite. Pendants and
masses of Yukon Group quartz-mica schist, gneisses and
crystalline limestone occur in the granitic intrusives. The Yukon
Group is of Early Paleozoic and Late Precambrian age.
A younger series of andesite and rhyolite flows, tuffs and
agglomerates, mapped as the Tertiary Mount Skukum Group, intrude
and overlie granitic rocks forming volcanic complexes at Mount
Skukum and Mount Macauley. Also, Skukum Group rhyolite and
granite porphyry dykes and plugs intrude Lewes River Group rocks
and Cretaceous granodiorites throughout the Wheaton River area.
Distribution of these Eocene rocks is shown regionally on Figure
4.
Mesozoic and Paleozoic sedimentary and volcanic rocks of the
Whitehorse Trough Terrane are deformed and generally
metamorphosed to at least lower green schist facies. These units
trend north to northwest and are internally complex.
Structurally, the area features major faults, primarily along
river valleys, associated with movement in the Coast Plutonic
Complex and with Early Tertiary volcanism at Mount Skukum, Mount
Macauley and Montana Mountain. The Skukum Group volcanic rocks
are equivalent to the Sloko Group of northern British Columbia
and the Mount Nansen Group of central Yukon. Late stage features
of Skukum Group volcanism include dacite, rhyolite and granite
porphyry dykes, emplaced in fracture and fault zones around the
volcanic complexes, and quartz or quartz carbonate veining with
significant precious and base metal mineralization.
MINERALIZATION
Three types of mineralized veins are recognized in the Wheaton
River area (Doherty & Hart, 1988). The following descriptions are
from Open File 1988-2, pg. 54.
1) Epithermal gold-silver veins associated with northeast-
trending normal faults hosted with bi-modal calc-alkaline
andesitic volcanics of the Skukum Group and associated with
Eocene rhyolite porphyry dykes outside the volcanic complex.
2) Antimony-silver veins with silver in argentiferous galena
and with or without sphalerite, jamesonite, gold,
arsenopyrite and pyrite. The veins are in important east-
west trending normal faults cutting Late Triassic and
younger granitic rocks.
3) Gold-silver and telluride bearing quartz veins spatially
related to the "Tally-Ho Shear Zone", sheared and
chloritized mafic volcanic rocks and nearby sheared or
unsheared granitic rocks and Jurassic Laberge Group arkosic
sedimentary rocks.
The characteristics of the three types of vein systems are
summarized in Table 3.
Mineralization on the AAV 1-9 claims occur as either Type 1 or
Type 3 veins and siliceous stockworks.
PROPERTY GEOLOGY
The area covered by the AAV 1-9 claims primarily underlain by
Cretaceous granodiorite of the Coast Plutonic Complex and a
northwesterly trending belt of Triassic Lewes River Group
metasedimentary and metavolcanic rocks. Dykes and plugs of Early
Tertiary Skukum Group volcanic rocks intrude the Mesozoic and
Paleozoic rocks.
Porphyry dykes and fracture systems associated with the volcanic
center at Mt. Skukum pass through the claim area.
Geology of the property area is shown in Figure 5A and 5B.
The oldest rocks occurring on the AAV 1-9 claims are limestone,
limestone breccia, quartzite, schist, greywacke and argillite,
overlain and possibly interbedded with andesitic and basaltic
flow rocks, breccias and tuff, collectively known as the Lewes
River Group. The limestone unit is generally less than 100
meters wide and is locally deformed by cross-faulting and felsic
dykes. Low grade regional metamorphism and deformation of the
Lewes River Group has left a widespread schistosity and brittle
fracture in the rock.
Mid-Cretaceous plutonic rocks of the Coast Range Complex intrude
the older stratified units and consist of equigranular biotite-
hornblende granodiorite, with occasional granitic, aplitic,
gneissic and pegmatitic phases. Triassic sedimentary rocks were
probably silicified and metamorphosed during the intrusive
events.
Early Tertiary Skukum Group rhyolite, trachyte and andesite plugs
and dykes have intruded the Lewes River Group and the
granodiorite along a fracture system crossing the Gold Hill area
in a north to northwesterly trend. These felsic volcanic rocks
were accompanied by hydrothermal fluids which locally silicified
and brecciated the limestone and in the last stages introduced
silica-rich fluids into fractures and zones of weakness in
Mesozoic and Paleozoic rocks.
DISCUSSION OF ROCK UNITS
Triassic Lewes River Group
Limestone, Limestone Breccia, Quartzite
Limestone, limestone breccia and quartzite with some interbedded
pelitic horizons occur in a continuous belt of Triassic rocks
passing through Gold Hill. Grey-weathering limestone outcrops at
the north and south ends of Gold Hill and on the east flank of
Gold Hill above Dail Creek. It is also exposed in the bulldozer
trenches excavated on the North and 4500N grids.
The limestone is a fine to medium grained, white to blue grey
rock occasionally brecciated by narrow quartz and calcite veins
or silicified to "quartzite". Minor amounts of siderite, barite
and sulphide minerals occasionally occur in the narrow quartz-
calcite veins.
At the north end of Gold Hill and on the east face overlooking
Dail Creek, the limestone unit is only 5-10 metres wide and is
displaced and intruded by granitic and volcanic rocks. On the
south end of Gold Hill, the limestone and limestone breccia unit
widens to over 100 metres - containing interbedded schist,
siltstone and argillite. At the south end of the property,
crystalline limestone outcrops in a belt at least 50 metres wide
and contains lenses of rusty quartz-carbonate breccia.
In numerous trenches, wide intersections of limestone, limestone
breccia and quartzite are well exposed. Notably, in Trench 84-10
a block of limestone occurring between two rhyolite porphyry
dykes is brecciated by numerous quartz veins and, in places,
altered to a white or orange clay gouge containing fragments of
quartz.
Schist, Argillite and Siltstone
Dark grey metasedimentary rocks of the Lewes River Group are
interbedded with andesite, basalt and limestone in trenches
excavated on the North and 4500N grids. Quartz-sericite schist
and graphitic schist occur with brecciated limestone on the 4500N
and North grids. Argillite and siltstone are foliated in a
northwest direction and contain quartz veins and pods developed
along remnant bedding planes and foliations. Local
silicification occurs in these metasedimentary units at contacts
with Tertiary felsic dykes. Pyritic graphite schist occurs at the
south end of Gold Hill with limestone near rhyolite porphyry
dykes.
On the northeast face of Gold Hill, the Triassic metasedimentary
rocks are intruded by several Tertiary rhyolite dykes. There
they are pyritized and silicified, weathering a rusty red colour.
The Gold Reef quartz vein occurs in these rocks.
Metavolcanic Rocks
Triassic volcanic rocks ("greenstones") outcrop extensively at
the north end of Gold Hill and on the east face of Gold Hill
above Dail Creek. Typically, they are massive green to black,
slightly foliated andesite and basalt flows, breccias and tuffs
and may contain narrow quartz veins in more foliated sections.
Phenocrysts of quartz and feldspar occur in porphyritic andesite
at the north end of Gold Hill.
Coast Plutonic Complex
Granodiorite
Cretaceous granodiorite talus and outcrop is extensive on the
east side of Gold Hill, in the steep walled valleys at the head
of Thompson Creek and around Pugh Peak. Aplitic and microgranite
phases are common west of Pugh Peak and on the ridge south of the
Hodnett Lakes.
Typically, the intrusive rock is a homogeneous, medium grained,
biotite-hornblende granodiorite or quartz diorite containing
minor magnetite. Bulldozer trenching has exposed fresh
granodiorite along the western side of Gold Hill where no outcrop
is present.
White quartz veins bearing gold and silver mineralization occur
in fractures in the granodiorite at the head of Dail Creek and on
Gold Hill, Pugh Peak and the ridge south of the Hodnett Lakes.
skukum group
Felsic Volcanic Rocks
Skukum Group felsic volcanic rocks occur as rhyolite, trachyte
and dacite porphyry dykes and plugs outcropping on the north face
of Gold Hill, south of Pugh Peak and along the ridge top of Gold
Hill. Megascopically they weather a light grey to orange colour
and contain phenocrysts of quartz, feldspar and occasionally
mafic minerals in a fine grained rhyolitic groundmass. Fresh
surfaces are buff to brown in colour and contain minor pyrite as
an accessory mineral.
On the Gold Hill ridge top, much of the float material is
rhyolite and trachyte porphyry, probably derived from several
dykes intruding granodiorite in the middle section of Gold Hill.
These dykes trend north to northwesterly and are up to 15 metres
wide. Minor silicification occurs at contacts with granodiorite.
On the north face of Gold Hill, the rhyolite porphyry dykes
weather buff to rusty orange and intrude silicified
metasedimentary rocks. Spatially the dykes lie close to the Gold
Reef quartz vein; this does not necessarily imply a close genetic
relationship.
South of Pugh Peak, a plug of rhyolitic and dacitic porphyritic
rocks form extensive talus and outcrop around the head of
Schnabel Creek (Folle Intrusion of Smith, 1981; and Pride and
Clark, 1985). Quartz veins with cox-comb texture occur in the
rhyolite.
In several of the bulldozer trenches, rhyolite porphyry dykes
intrude limestone and metasedimentary rocks. Zones of narrow
quartz veins and silicification are common in the older rocks
near the contacts. An unusual andesitic breccia or pyroclastic
rock containing chalcedony, quartz and fragments of limestone,
quartzite and rhyolite intrudes limestone in the 4500N grid
(Trench 84-10). It is closely associated with nearby rhyolite
porphyry dykes and in places is of dacitic composition. The
pyroclastic rock (dyke) is probably of Early Tertiary age.
ECONOMIC GEOLOGY
Gold and silver occur on the AAV 1-9 claims in at least two
distinct styles of mineralization. Precious metal values to date
have occurred in two types of quartz veins: (1) quartz veins up
to 2 metres wide in granite and metasedimentary / metavolcanic
rocks, and (2) narrow quartz and/or quartz-calcite veins in
limestones, quartzites and schists; and silver occurs
disseminated in siliceous pyritic schist (Showing No. 10).
Quartz veins in the first group have a general northwest
orientation and are continuous over long distances. The Gold
Reef vein is considered a typical example, and has been traced by
underground workings, and surface pits for over 300 metres where
the average width has been 1.5 metres.
Quartz and quartz-calcite veins appear less continuous and have
more random orientations; and are generally spatially related to
Eocene intrusive rocks.
Occurrences are shown on the Geology Plan and are indicated by
numbers summarized in Table 3. Veins No. 1, 2 and float trains
("FT") No. 3, 4, 5, 6 occur at the north end of Gold Hill and are
generally similar to the Gold Reef vein. Veins No. 1 and 2 have
been traced for approximately 25-30 metres in outcrop and/or hand
trench.
Occurrence No. 9 is unique and consists of galena-bearing quartz-
calcite veinlets in micro-fractured, hematized, propylitically
altered granodiorite.
The occurrence is peripheral to the Dawson Charlie fracture, a
major northeast trending fault zone.
Occurrence No. 10 is significant because it represents an
important width (over 5 metres) of "stratabound" schist
replacement grading 341.0 grams/t silver.
Alteration and accessory minerals present around the vein systems
include clays (kaolinite, alunite) black and green chalcedonic
breccias, fluorite, barite, pyrite and hematite. Morin notes the
presence of highly anomalous tellurium in his samples from Gold
Reef and Dail Creek veins. Carbonatization is common in
andesitic rocks near veins; and carbonatization and massive
chloritization are present in the shear zones in andesitic rocks.
CONCLUSIONS
1) Moderate gold-silver and silver-lead soil geochemical
anomalies occur on the North grid; intense "spot" highs are
present.
2) A moderate to strong VLF-EM conductor traces the contact
between silicified limestone and granodiorite on the North
grid; between rusty schist, limestone and rhyolite porphyry
on the 4500N grid, and between limestone breccia and
silicified metavolcanic rocks on the south end of Gold Hill.
Gold-silver bearing galena and tetrahedrite mineralization
has been developed along these contacts.
3) Significant gold and silver values in quartz veins carrying
galena and tetrahedrite occur in the gully at the north end
of Gold Hill and in float trains on the ridgetop of Gold
Hill. Bulldozer trenching has not yet succeeded in locating
this material in bedrock, probably because solifluction
transport has been more extensive and more effective than
anticipated.
4) Important silver values occur in silicified limestone
breccia and schist cut by numerous quartz veins. Galena
and/or tetrahedrite in the narrow quartz veins produced
silver values at 10.99 ounces per ton in Trench 84-1 on the
North grid and several rock samples contained up to 36.5
ounces per ton silver elsewhere on Gold Hill.
5) Silica-rich fluids were introduced into fractures primarily
in limestone and metasedimentary rocks presumably in the
late stages of Skukum Group volcanism.
6) Base and precious metals accompanied the silica-rich fluids
during emplacement into the Triassic rocks, possibly in a
multi-phase process of fracturing and fluid injection.
7) Modern exploration methods applied to previous explored
mineralized occurrences on the surface of both the Omni and
Goodell properties led, subsequently to the discovery of
larger mineralized zones at depth (see Appendix C - A Case
Study of Goodell Property).
RECOMMENDATIONS
A program of exploration is recommended for Hudson Ventures
Inc.'s property. Initially, detailed geophysical surveys
utilizing new and more sensitive geophysical techniques to
enhance the data base on the presently known mineralized areas at
depth. A drilling program of 1200 metres to evaluate the data
acquired during these geophysical surveys should follow.
RECOMMENDED BUDGET
US$
Phase I Geological Review $ 2,000
Sampling and Assaying $ 1,000
Consulting and Report Writing $ 2,000
Geophysical Surveying $10,000
Phase I Total $15,000
Phase II Drilling 1400 Metres HQ $100/metre $140,000
Geological Mapping $ 10,000
Geophysical Surveying $30,000
=======
Grand Total $195,000
The Recommended Budget includes provision for mobilization
and support costs.
REFERENCES
Cairnes, D.D., 1916
Wheaton District, Southern Yukon. GSC Memoir 31.
Davidson, G. & Robertson, R., 1986
Report on 1985 Exploration Activities - Wheaton River Joint Venture.
Doherty, R.A. & Hart, C., 1988
Preliminary Geology of Map Sheets 105 D-3 and 105 D-6. Open File
1988-2.
Lambert, M.B., 1974
The Bennett Lake Cauldron Subsidence Complex, British Columbia and
Yukon Territory. GSC Bulletin 227.
TABLE 4
SUMMARY OF MINERAL OCCURRENCES
Assays (g/t)
Name Coordinates Occurrence Au Ag Length
(approx) Numbers (if any)
MM vein 6700N / 4625E 1 10.20 555.4 0.48 m
203.99 3325.6 0.90 m
4.50 233.1 0.60 m
RR vein 6800N / 4800E 2 2.60 12.4 -
11.47 394.9 -
FT A 6325N-6525N/5020E 3 0.90 40.0 -
FT B 6490N / 4935E 4 14.63 496.0 -
FT C 6510N / 4930E 5 26.6 908.3 -
FT D 5550N-5700N / 5300E 6 3.5 51.4 -
3.7 36.0 -
GD vein 5500N/5500E 7 2.2 N/A 0.2 m
Gold Reef 5990N / 5460E 8 3.5 51.4 2.0 m
vein (portal) 3.7 36.0 2.0 m
GM vein 5300N / 4450E 9 2.3 55.2 stwk
DI 10 tr 341.0 5.0
Summarized from Davidson, Robertson 1986
Exhibit 5.6
GEOLOGICAL REPORT
on the
McCONNELL RIVER PROPERTY
NTS 105 D-6
Latitude 61 35'N, Longitude 132 35' W
Watson Lake Mining District
for
Hudson
Ventures Inc.
444 E. Columbia Street
New Westminster, British Columbia
V3L 3W9
by
W. TIMMINS, P.Eng.
January 22, 2002
TABLE OF CONTENTS
Page
EXECUTIVE SUMMARY............................................iii
INTRODUCTION 1
LOCATION AND ACCESS 1
PHYSIOGRAPHY, VEGETATION AND CLIMATE 2
PROPERTY 3
HISTORY OF EXPLORATION 3
REGIONAL GEOLOGY 5
MINERALIZATION 7
PROPERTY GEOLOGY 8
DISCUSSION OF ROCK UNITS 10
ECONOMIC GEOLOGY 14
CONCLUSIONS 15
RECOMMENDATIONS 1
Following
LIST OF FIGURES Page
Figure 1 Location Map 1
Figure 2 Claim Plan 2
Figure 3 Regional Geology 4
Figure 4 Property Geology and Summary Geophysics 7
LIST OF TABLES
Table 1 Table of Claims page 2
APPENDICES
A Certificate of Qualification
B Rock Unit Description
C References
EXECUTIVE SUMMARY
The Hudson Ventures Inc. Company has agreed to purchase the B1 - B4
property in the McConnell River district, located 260 kilometres northeast
of Whitehorse, Yukon Territory, Canada. The four claim property covered by
Grant No. YB 92568 - YB 92571 on Claim Plan 105F-10 Whitehorse Mining
District consists of 208 acres. The property accessible by 4-wheel drive
covers an area of known massive sulphide mineralization and gold and silver
bearing float.
Located in the St. Cyr Range of the Pelly Mountains, the area was first
explored in the late 19th Century. Exploration in the latter part of the
20th Century discovered significant mineralization in the region and a
2000 exploration program to follow up on that mineralization was completed.
Prior exploration expenditures would have a replacement cost in excess of
$1 million.
Located southeast of the Tintina Fault, the region is underlain by late
Proterozoic to Triassic age clastic, volcanic and carbonate rocks.
Structural up lift possibly related to buried Cretaceous intrusives or as a
part of a cauldron is associated with the area's mineralized zones. Syenite
dikes affiliated with the intrusives or the "cauldron facies" are spatially
linked to the mineralization of the district.
Syenite on the property has intruded the Mississippian volcanic flows and
tuffs but is in some cases undistinguishable from them. Carbonate rocks are
widespread and where altered to skarn associated with mineralization.
Massive sulphide mineralization intersected by core drilling was hosted in
syenite dikes altered or coarse grained carbonate rocks.
The showing area was delineated by soil sampling and numerous areas of
anomalous soil geochemistry were related to boulders of mineralized float
that was found in place in the rocks above.
Geophysical surveys including I.P., magnetics and electromagnetics were
conducted over the massive sulphide showing. Some of the anomalous trends
in each survey were confirmed by the other survey methods as zones of weak
response associate with disseminated mineralization.
Trenching completed in 2000 identified the presence of "manto" and vein
type mineralization that require follow up work to further the property
evaluation. An initial budget of US$ 25,000 is proposed.
INTRODUCTION
Hudson Ventures Inc.. has agreed to purchase the "B1-4" property, located
in the McConnell River District of Southeastern Yukon. The claims,
totaling 4, cover occurrences of gold-silver bearing float mineralization
located earlier and known massive sulphide mineralization. Previous
exploration by other groups at B1-4 includes soil geochemical and VLF-EM
geophysical surveys, geological mapping and bulldozer trenching. The
Hudson Ventures Inc.'s property is considered to represent a geological
environment permissive to contain significant gold-silver occurrences. A
program of exploration is hereby recommended. The author is familiar with
the claims having consulted on exploration programs conducted there during
the 1980's and visited the property in 1999.
LOCATION INFRASTRUCTURE AND ACCESS
The McConnell River property is located 260 km northeast of Whitehorse,
Yukon and 40 km south of Ross River, Yukon at latitude 61 35' N and
longitude 132 35W (Figure 1). The claims straddle the headwaters of Seagull
Creek and McConnell River and are situated 30 km east of the South Canol
Road (Hwy 8).
A 20 km four-wheel drive road originating from the South Canol Road
provides access to south Seagull Lake in the claims area. The main showing
is connected to the access road by a 10 km four-wheel drive road. Access
during the 2000 exploration season was by all-terrain vehicle initially,
and then by road using 4x4 pickup trucks.
PHYSIOGRAPHY, CLIMATE AND VEGETATION
The McConnell River property is located within the St. Cyr Range of the
Pelly Mountains. Moderate to steep mountainous terrain is cut by broad,
brush-filled valleys. Elevations on the property range from 1060 meters to
3050 metres above sea level. Vegetation consists of spruce and dwarf balsam
fir, juniper, alder and willow. Wildlife seen on the property is adapted to
the short, warm summers and long, cold winters. Precipitation year-round is
moderate. The best months for exploration work are mid-June through
September inclusive.
PROPERTY
The property consists of 4 claims as detailed in Table 1 of this report,
and shown on Figure 2. The four claim property on Claim Plan 105F-10 Watson
Lake Mining District Yukon Territory consists of 208 acres.
TABLE 1
CLAIM STATUS
Claim NameGrant Numbers Current Expiry Date
B1-4YB 92568 - YB 92571 June 17, 2003
HISTORY OF EXPLORATION
The McConnell River district was first explored by placer gold miners
travelling along the major lakes and rivers of southwestern Yukon in the
early 1890's, prior to the discovery of gold in the Klondike (1896). The
first major exploration of the district commenced following the
construction of the Canol Pipeline road as part of the World War II effort.
The region has been subject of several exploration booms since 1945 led by
major mining companies including Noranda, RioTinto, Anaconda, Utah Mines,
Equity Silver, Hudson Bay Mining and others. As a result of these regional
exploration programs, several major mineral deposits were defined and an
effective data base developed for the area.
The area now covered by Hudson Ventures' McConnell River claims has been
included in various projects at different times since massive sulphide
material was first located in 1962. The property or portions thereof have
been explored by:
- - the Pelly Minerals Syndicate (Canex, KerrAddison, Noranda and
Homestake), which conducted hand trenching, mapping and a magnetic survey
in 1963;
- - Mayo Silver Mines Limited and Canol Mines Limited which bulldozer
trenched and drilled 1452 metres (7 holes) in 1969;
- - Seagull Joint Venture (Great Western Petroleum Corp. and Lornex Mines
Ltd.) which carried out mapping and geochemical sampling in 1981;
- - Equity Silver Mines Ltd., and Fairfield Mines Ltd. performed mapping,
geochem sampling, geophysical surveying (Magnetics, I.P. and VLF) in 1987
and constructed 6.4 kilometres of roads and diamond drilled 8 holes in
1988.
The claims were acquired by the present owners who conducted geophysical
(EM and Magnetics) and geochemical surveys, constructed a new access road
and conducted bulldozer trenching from 1996 to 2000.
During the 2000 season a four-man exploration crew, based from Ross River,
conducted a soil geochemical survey and VLF-EM and magnetometer geophysical
survey's over part of the B1-4 claims. The surveys were undertaken to try
to locate the source of gold-silver bearing float mineralization located
earlier and to extend known massive sulphide mineralization. A bulldozer
was utilized to rebuild part of a 4x4 access trail, and to trench sulphide
showings. Geological mapping to investigate new target areas was carried
out.
Hudson Ventures Inc. acquired the property in 2002.
REGIONAL GEOLOGY
The McConnell River property lies in the St. Cyr Range of the Pelly
Mountains, southeast of -the Tintina Fault. The geology and mineral
deposits of the area have been studied by Wheeler et al, 1960;
Tempelman-Kluit et al, 1974, 1975, 1976; Tempelman-Kluit 1977, 1979; Morin,
1981; Cordilleran Engineering, 1985; and Abbott, 1986, as well as a host of
mining companies
The Goldwin property is on the western side of the Ketza-Seagull District
as defined by Abbott (1986). The district is underlain by a miogeoclinical
succession of clastic, volcanic and carbonate rocks, late Proterozoic to
Triassic in age, deposited during shallow marine conditions near the margin
of a stable continental platform (Tempelman-Kluit et al, 1976). This
package has been foreshortened by large northeast directed thrust faults.
The majority of the deposits on the Ram property are associated with the
Seagull Uplift, and occur between the Lower Seagull and Upper Ram Thrusts
(Figure 3). Abbott has postulated that the uplift was a result of doming,
caused by buried Cretaceous intrusions, and has inferred that the
mineralization in the district was derived from these intrusions.
Morin (1981) proposed a model that related "cauldron facies" geology to
associated mineralization in the belt of rocks between Seagull Creek and
McConnell River. The "cauldron facies" is represented by near surface
syenite intrusions, commonly postulated to be coeval with the Mississippian
volcanic rocks in this area. Veins, skarns, breccia pipes, sediments and
carbonates are spatially associated with the syenite bodies.
PROPERTY GEOLOGY
The geology of the property is presented on Figure 4. During the year 2000,
the geology of the property re-examined and locally remapped. In most cases
the rock nomenclature was confirmed and the structural relationship of the
various units was reinterpreted. Outcrop distribution is typical of
mountainous terrain with 95% occurring on ridges and peaks above the 1600
metre elevation. Below tree line outcrops are very sporadic and difficult
to find.
The lithologies found in the property area are presented in Appendix B and
are the unit numbers used in Figure 4.
The syenite has been described as coeval with the Mississippian volcanic
flows and tuffs, and associated derived sediments. Evidence was found this
season that the sediments have been thermally metamorphosed where they are
in contact with syenite beneath the Klippa on the grid. Also,
Tempelman-Kluit (1977) published a K/Ar age for syenite of 185 m.y. From
the above it is concluded that the syenite is younger than the
Mississippian sediments, and is probably of Lower Jurassic age.
The find grained to aphanitic syenite/trachyte found as a border phase near
intrusion contacts is very difficult to distinguish meagascopically from
the Mississippian felsic flows of rhyodacite composition. Both are white to
light grey on a fresh surface, fine grained to aphanitic, and contain minor
to locally abundant pyrite. It is possible that much of what has been
mapped as 7b near syenite intrusions may be trachyte. The intermediate
flows and tuffs are usually easily distinguishable because of their
greenish colour.
The carbonate units could usually be distinguished with little difficulty,
with the exception of the limestone underlying the skarn showings on the
South grid. It varied from light grey to black but was uniformly find
grained and unfossiliferous. It was locally silty or had siltstone or
quartzite interbeds. This limestone horizon has been tentatively placed in
unit 3, and designated 3a. The Silurian quartzite and buff dolomite are
very distinctive units, useful as marker horizons.
The skarn mineralization referred to above was developed in dolomitic to
locally calcareous quartzite (unit 3). The contact between the quartzite
and the overlying Mississippian volcanic/sedimentary rocks (unit 7) could
be a thrust plane or mark a major uniformity.
Blocks of older rocks mapped previously as being bounded by normal faults
are now believed to be klippen or the edges of thrust sheets. These thrusts
correlate with the Ram Thrusts of Abbott (1986). To the west of the
property, the Seagull Creek Fault juxtaposes Cambro-Ordovician
meta-sediments and Devono-Mississippian shale.
Diamond drill core from five of the seven holes drilled in 1969 in the
vicinity of the massive sulphide showings was re-logged and integrated with
the revised surface geology (Figure 7). It was found that much of what had
been logged as dolomite (Canol Mines, 1969) was in fact altered syenite,
and that the sulphides were hosted by syenite, marble or coarse grained
calcite/dolomite. Both holes 5 and 6 intersected quartzite in the first 6
m. The marble/calcite may be the re-crystallized equivalent of the
limestone found in the Silurian quartzite hosting the Skarn showings to the
south. The Loon massive sulphide between the Skarn showings and the main
showing, is also associated (hosted?) by coarse grained calcite.
SOIL GEOCHEMISTRY
The massive sulphide area (Ag, Au, Pb) was delineated previously by soil
sampling. It extended northwesterly from the main showing to the Pika
showing. Intermediate lines were sampled in 1987, for Au and Ag, confirmed
the presence and extend of this anomaly. Mapping in the area determined
that the anomaly was underlain by talus and scree containing numerous
pieces of ankerite-quartz vein material variably mineralized with pyrite
and/or galena. Veins of similar composition were found cutting the syenite
in the bluffs above the anomaly.
No distinctive geochemical pattern was noted but it appears that soil
geochemistry would be an effective exploration tool.
GEOPHYSICAL SURVEYS
A wide variety of geophysical techniques have been employed in this area,
including IP and apparent resistivity, mise a la masse, total field
magnetic, VLF electromagnetic and horizontal loop electromagnetic surveys.
Geophysical surveys conducted over the massive sulphide zones in 2000
included VLF EM and magnetometer systems.
Summary Results are presented on Figure 4.
Two zones of anomalous I.P. and resistivity results were interpreted to be
present on the claims.
Zone A is interpreted to strike across all of the detail grid survey lines,
in a roughly north-south direction. The most anomalous I.P. effects are
recorded on Line 220ON, in the vicinity of the main Grayling massive
sulphide showing (#1 Figure 4). This IP zone is highlighted on Figure 4.
Zone B appears to be quite different from Zone A. It is generally a very
broad feature, especially on the southern half of the grid, and is typified
by large magnitude I.P. effects in conjunction with low apparent
resistivity values. The large lateral extent of the zone suggests that a
change in rock type, rather than a discrete feature of possible economic
interest, maybe responsible for the observed readings.
The VLF-EM data interpretation has identified one conductor axis near the
eastern end of the grid. This axis is approximately coincident with the
western side of I.P. Zone B. It is felt that the same cause is responsible
for both the low apparent resistivity values in the I.P. and resistivity
data as well as the interpreted conductor axis in the VLF-EM data. The HLEM
data suggests the presence of a single, very poor conductor and/or thin
conductor located in the southeast corner of the grid, appears to mark the
western flank of IP Zone B.
IP Zone B and the related EM conductors are not delineated on Figure 4.
A number of geophysical methods have been used on the more wide
ranging set of lines which constitute the reconnaissance grid. These
include induced polarization and apparent resistivity, total field
magnetics and VLF electromagnetics.
The main showing, consisting of three exposed sulphide bodies, was chosen
as the test site for the geophysical techniques. VLF results were flat over
the known mineralization, but may indicate a change in rock type in the
valley bottom to the east of the showings. This "contact" is approximately
aligned with the western edge of a strong IP anomaly which may be due to
graphite or disseminated sulphides in a buried clastic or volcanic unit
(graphite shale or pyretic 7b).
Sulphides intersected in diamond drill holes in the vicinity of the main
sulphide showings were all highly oxidized and thus poor electrical
conductors. The geophysically indicated lack of continuity between sulphide
bodies may THUS be more apparent than real.
Other areas on the property were surveyed by magnetometer and VLF. A broad
magnetic "anomaly" was defined coincident with a soil geochemical anomaly
on the ridge east of the main showing. This anomalous area is at a contact
between syenite and volcanics; no cause could be found in outcrop.
Three I.P. anomalies appear to be roughly coincident with weak VLF-EM
anomalies. This could indicate the presence of a band of relatively
conductive sulphide mineralization.
Results of the mise a la masse survey to test for the possible subsurface
continuation of the Grayling showing mineralization, which is observed in
outcrop near Station 2925E on Line 2200N, indicate that the massive
sulphides constituting the showing are restricted to the immediate vicinity
of the exposed mineralization. This conclusion is consistent with the
results of the I.P. and resistivity survey, which suggests the presence of
a polarizable, but non-conducting zone of mineralization striking through
the area of the Grayling showing.
The total field magnetics data, apart from several isolated points,
appear to indicate the absence of any significant amount of magnetic
mineralization.
CONCLUSIONS
The year 2000 exploration program at the McConnell River claims owned by
Consolidated Goldwin Ventures Inc. confirmed the presence of "'manto" and
vein-style mineral occurrence with significant potential on the property.
Work programs to date have significantly narrowed down target areas
permissive to host gold mineralization found locally as float boulders, and
defined anomalous regions which may reflect
Almanto style silver-lead-zinc occurrences. Further exploration work
including diamond drilling, is warranted and recommended for the property.
RECOMMENDATIONS
A program of exploration is recommended for Hudson Ventures Inc.'s
property. Initially, detailed geophysical surveys utilizing new and more
sensitive geophysical techniques to enhance the data base on the presently
known mineralized areas at depth. A drilling program of 1200 metres to
evaluate the data acquired during these geophysical surveys should follow.
RECOMMENDED BUDGET
US$
Phase I Geological Review $ 2,000
Sampling and Assaying $ 2,000
Exploration Grid $ 4,000
Geological Mapping $ 4,000
Geophysical Surveys
Induced Polarization
Ground Magnetometer
Min - Max (EM) $10,000
Consulting and Report Writing $ 3,000
Phase I Total $25,000
Phase II Drilling 1200 Metres HQ $100/metre $120,000
Geological Mapping $ 5,000
Geophysical Surveying $ 20,000
=======
Grand Total $170,000
The Recommended Budget includes provision for mobilization
and support costs.
EXHIBIT 6.1
INDEPENDENT AUDITORS' CONSENT
We consent to the use in the Registration Statement of
Hudson Ventures Inc. on Form SB-2 of our Auditors' Report,
dated August 9, 2002, on the balance sheet of Hudson
Ventures Inc. as at July 31, 2002, and the related statement
of loss and deficit accumulated during the exploration
stage, statement of cash flows and statement of
stockholders' equity for the period from inception on
November 30, 2001 to July 31, 2002.
In addition, we consent to the reference to us under the
heading "Interests Of Named Experts And Counsel" in the
Registration Statement.
Vancouver, Canada
"Morgan & Company"
August 14, 2002
Chartered Accountants
Undertakings
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising
after the effective date of this registration statement, or
most recent post-effective amendment, which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this registration statement; and
(c) To include any material information with respect to the plan
of distribution not previously disclosed in this
registration statement or any material change to such
information in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered hereby which
remain unsold at the termination of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers and
controlling persons pursuant to the provisions above, or otherwise,
we have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act, and is, therefore,
unenforceable.
Hudson Ventures Inc.
By: /s/ Dana Upton, President, Secretary
And Treasurer
/s/ Nikolaos Bekropoulos, director
/s/ Philip Taneda, Director