Exhibit 10
MINERAL PROPERTY OPTION AGREEMENT
THIS AGREEMENT dated for reference June 26, 2008.
BETWEEN:
T.L. SADLIER-BROWN, with an office at 1209, 409 Granville Street,
Vancouver, British Columbia, V6C 1T2 ;
(the "Optionor")
OF THE FIRST PART
AND:
LAKE FOREST MINERALS, INC., a company incorporated pursuant to the
laws of the State of Nevada; Suite #4 - 711 South Carson Street,
Carson City, Nevada, USA, 89701;
("LFM")
OF THE SECOND PART
W H E R E A S :
A. T.L. SADLIER-BROWN is the registered and beneficial owner of a mineral
property claim group, which claims are more particularly described in Schedule
"A" attached hereto which forms a material part hereof (collectively, the
"Claims");
B. The Optionor has agreed to grant to LFM the sole and exclusive right,
privilege and option to explore the Claims together with the sole and exclusive
right, privilege and option to purchase the Claims upon the terms and conditions
hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual
covenants and provisos herein contained, THE PARTIES HERETO AGREE AS FOLLOWS:
1. OPTIONOR REPRESENTATIONS
1.1 The Optionor represents and warrants to LFM that:
(a) The Optionor is the registered and beneficial owner of the Claims and
hold the right to explore and develop the Claims;
(b) The Optionor hold the Claims free and clear of all liens, charges and
claims of others, and the Optionor have a free and unimpeded right of
access to the Claims and have use of the Claims surface for the herein
purposes;
(c) The Claims have been duly and validly located and recorded in a good
and miner-like manner pursuant to the laws of British Columbia and are
in good standing in British Columbia as of the date of this Agreement;
(d) There are no adverse claims or challenges against or to the Optionor
ownership of or title to any of the Claims nor to the knowledge of the
Optionor is there any basis therefore, and there are no outstanding
agreements or options to acquire or purchase the Claims or any portion
thereof;
(e) The Optionor has the full right, authority and capacity to enter into
this Agreement without first obtaining the consent of any other person
or body corporate and the consummation of the transaction 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 under the provisions of
any indenture, agreement or other instrument whatsoever to which
either Optionor is a party or by which they are bound or to which they
are subject; and
(f) No proceedings are pending for, and the Optionor is unaware of any
basis for, the institution of any proceedings which could lead to the
placing of the Optionor in bankruptcy, or in any position similar to
bankruptcy.
1.2 The representations and warranties of the Optionor set out in paragraph 1.1
above form a part of this Agreement and are conditions upon which LFM has relied
in entering into this Agreement and shall survive the acquisition of any
interest in the Claims by LFM.
2. LFM'S REPRESENTATIONS
LFM warrants and represents to the Optionor that it is a body corporate, duly
incorporated under the laws of the State of Nevada with full power and absolute
capacity to enter into this Agreement and that the terms of this Agreement have
been authorized by all necessary corporate acts and deeds in order to give
effect to the terms hereof.
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3. GRANT OF OPTION
The Optionor hereby give and grant to LFM the sole and exclusive right and
option to acquire a l00% undivided right, title and interest in and to the
Claims (the "Option"), subject to a 2% net smelter returns royalty reserved in
favour of the Optionor, by performing the acts and deeds and paying the sums
provided for in paragraph 4.
4. CONSIDERATION FOR THE GRANT OF OPTION
4.1 In order to keep the Option granted to LFM in respect of the Claims in good
standing and in force and effect, LFM shall be obligated to:
Cash Payments
(a) Pay to the Optionor a total of $15,000 in the following manner:
(i) $2,500 by June 30, 2008;
(ii) an additional $5,000 by June 30, 2009; and
(iii) an additional $7,500 by June 30, 2010;
4.2 In order to keep the Option granted to LFM in respect of the Claims in good
standing and in force and effect, the Optionor shall be obligated to:
Property Payments and Assessment Work
(b) Pay, or cause to be paid, on behalf of LFM, all Claims payments and
fees associated with filing assessment work required to keep the
Claims, pursuant to the laws of British Columbia, and this Option in
good standing during the term of this Agreement.
5. COVENANTS OF LFM
5.1 LFM shall perform all work on the Claims in a miner-like manner and shall
comply with all laws, regulations and permitting requirements of Canada and the
Province of British Columbia including compliance with all:
(a) environmental statutes, guidelines and regulations;
(b) work permit conditions for lakes and streams; and
(c) work restrictions relating to forest fire hazards.
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6. RIGHT TO ABANDON PROPERTY INTERESTS
Should LFM, in its sole discretion, determine that any part of the Claims no
longer warrants further exploration and development, then LFM may abandon such
interest or interests without affecting its rights or obligations under this
Agreement, so long as LFM provides the Optionor with 30 days notice of its
intention to do so. Upon receipt of such notice, the Optionor may request LFM to
retransfer the title to such interest or interests to them, and LFM hereby
agrees to do so, and upon expiry of the 30 days, or upon the earlier transfer
thereof, such interests shall cease to be part of the Claims for the purposes of
this Agreement.
7. TERMINATION OF OPTION
7.1 Subject to paragraph 7.2, the Option shall terminate if LFM fails to make
the required cash payments or to complete required assessment work in accordance
with paragraph 4.1 herein within the time periods specified therein. LFM, when
it has paid the sum of $2,500 as provided for in subparagraph 4.1(a) hereof, may
terminate this Option by giving the Optionor 30 days' notice.
7.2 If LFM shall be in default of any requirement set forth in paragraph 4.1
herein, the Optionor shall give written notice to LFM specifying the default and
LFM shall not lose any rights granted under this Agreement, unless within 30
days after the giving of notice of default by the Optionor, LFM has failed to
take reasonable steps to cure the default by the appropriate performance.
7.3 If the Option is terminated in accordance with paragraphs 7.1 and 7.2
herein, LFM shall have no interest in or to the Claims, and all expenditures and
payments made by LFM to or on behalf of the Optionor under this Agreement shall
be non-refundable by the Optionor for which LFM shall have no recourse.
8. ACQUISITION OF INTERESTS IN THE PROPERTY
At such time as LFM has made all of the required cash payments in accordance
with paragraph 4.1 herein, within the time periods specified therein, then the
Option shall be deemed to have been exercised by LFM, and LFM shall have
thereby, without any further act, acquired an undivided 100% interest in and to
the Claims, subject to a 2% net smelter returns royalty in favour of the
Optionor.
9. RIGHT OF ENTRY
For so long as the Option continues in full force and effect, LFM, its
employees, agents, permitted assigns and independent contractors shall have the
right to:
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(a) enter upon the Claims;
(b) incur expenditures;
(c) bring upon and erect upon the Claims such mining facilities as LFM may
consider advisable; and
(d) remove material from the Claims for testing purposes up to 2 tonnes
for a bulk sample.
10. NET SMELTER RETURNS ROYALTY
10.1 For the purposes of this Agreement, "net smelter returns" shall mean the
net amount shown due by the smelter or other place of sale from the sale of
mineral products, as indicated by its returns or settlement sheets, after
payment of:
(a) all freight charges from the shipping point to the smelter or other
place of sale;
(b) all other proper treatment or other charges at such smelter or other
place of sale; and
(c) provincial or federal royalties due and payable on production, if any.
10.2 For the purposes of paragraph 10, "commercial production" shall not include
milling of ores for the purpose of testing or milling by a pilot plant or
milling during an initial tune-up period of a plant.
10.3 On the date LFM commences commercial production on the Claims, the Optionor
shall be entitled to receive and LFM shall pay to the Optionor 2% of net smelter
returns, to a maximum of $1,000,000.
10.4 LFM shall be under no obligation whatsoever to place the Claims into
commercial production and in the event they are placed into commercial
production, LFM shall have the right, at any time, to curtail or suspend such
production as it, in its absolute discretion, may determine.
10.5 Net smelter returns and the payments payable to the Optionor hereunder
shall be adjusted and paid quarterly, and within 90 days after the end of each
fiscal year during which the Claims were in commercial production, the records
relating to the calculation of net smelter returns during that fiscal year shall
be audited and any adjustments shall be made forthwith, and the audited
statements shall be delivered to the Optionor who shall have 60 days after
receipt of such statements to question in writing their accuracy and failing
such question, the statements shall be deemed correct.
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10.6 The Optionor or their representatives duly appointed in writing shall have
the right at all reasonable times, upon written request, to inspect those books
and financial records of LFM which are relevant to the determination of net
smelter returns, and, at the expense of the Optionor, to make copies thereof.
11. OPERATOR
After the execution of this Agreement, LFM, or at LFM's option, its respective
associate or nominee or such other unrelated entity as it may determine, will
act as the operator of the Claims under this Agreement. LFM, if operator, may
resign as the operator at any time by giving 30 calendar days prior written
notice to the Optionor, and within such 30 day period, LFM may appoint another
party who covenants to act as the operator of the Claims upon such terms as LFM
sees fit.
12. POWER AND AUTHORITY OF THE OPERATOR
After the execution of this Agreement, the Operator shall have full right, power
and authority to do everything necessary or desirable in connection with the
exploration and development of the Claims and to determine the manner of
operation of the Claims as a mine.
13. REGISTRATION OF PROPERTY INTERESTS
Upon the request of LFM, the Optionor shall assist LFM to record this Agreement
with the appropriate mining recorder and, when required, the Optionor shall
further provide LFM with such recordable documents as LFM and its counsel shall
require to record its due interest in respect of the Claims.
14. FURTHER ASSURANCES
The parties hereto agree to do or cause to be done all acts or things necessary
to implement and carry into effect the provisions and intent of this Agreement.
15. FORCE MAJEURE
If LFM is prevented from or delayed in complying with any provisions of this
Agreement by reasons of strikes, labour disputes, lockouts, labour shortages,
power shortages, fires, wars, acts of God, governmental regulations restricting
normal operations or any other reason or reasons beyond the control of LFM, the
time limited for the performance of the various provisions of this Agreement as
set out above shall be extended by a period of time equal in length to the
period of such prevention and delay, and LFM, insofar as is possible, shall
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promptly give written notice to the Optionor of the particulars of the reasons
for any prevention or delay under this section, and shall take all reasonable
steps to remove the cause of such prevention or delay and shall give written
notice to the Optionor as soon as such cause ceases to exist.
16. CONFIDENTIAL INFORMATION
No information furnished by LFM to the Optionor hereunder in respect of the
activities carried out on the Claims by LFM, or related to the sale of mineral
products derived from the Claims, shall be published by the Optionor without the
prior written consent of LFM, but such consent in respect of the reporting of
factual data shall not be unreasonably withheld.
17. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement to date between the parties
hereto and supersedes every previous agreement, communication, expectation,
negotiation, representation or understanding, whether oral or written, express
or implied, statutory or otherwise, between the parties hereto with respect to
the subject matter of this Agreement.
18. NOTICE
18.1 Any notice required to be given under this Agreement shall be deemed to be
well and sufficiently given if delivered, or if mailed by registered mail in
Canada, in the case of the Optionor addressed to them as follows:
T.L. SADLIER-BROWN
1209, 409 Granville Street, Vancouver, British Columbia, V6C 1T2;
and in the case of LFM addressed as follows:
LAKE FOREST MINERALS INC.
Suite #4 - 711 South Carson Street, Carson City, Nevada, USA, 89701
and any notice given as aforesaid shall be deemed to have been given, if
delivered, when delivered, or if mailed, on the third business day after the
date of mailing thereof.
18.2 Either party hereto may from time to time by notice in writing change its
address for the purpose of this section.
19. OPTION ONLY
Until the Option is exercised, this is an option only and except as specifically
provided otherwise, nothing herein contained shall be construed as obligating
LFM to do any acts or make any payments hereunder and any acts or payments made
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hereunder shall not be construed as obligating LFM to do any further acts or
make any further payments.
20. RELATIONSHIP OF PARTIES
Nothing contained in this Agreement shall, except to the extent specifically
authorized hereunder, be deemed to constitute either party hereto a partner,
agent or legal representative of the other party.
21. TIME OF ESSENCE
Time shall be of the essence of this Agreement.
22. TITLES
The titles to the respective sections hereof shall not be deemed a part of this
Agreement but shall be regarded as having been used for convenience only.
23. CURRENCY
All funds referred to under the terms of this Agreement shall be funds
designated in the lawful currency of the United States of America.
24. SEVERABILITY
In the event that any of the paragraphs contained in this Agreement, or any
portion of thereof, is unenforceable or is declared invalid for any reason
whatsoever, such unenforceability or invalidity shall not affect the
enforceability or validity of the remaining terms or portions thereof contained
in this Agreement and such unenforceable or invalid paragraph, or portion
thereof, shall be severable from the remainder of the Agreement.
25. APPLICABLE LAW
The situs of the Agreement is Carson City, Nevada, and for all purposes this
Agreement will be governed exclusively by and construed and enforced in
accordance with the laws prevailing in the State of Nevada.
26. ENUREMENT
This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns.
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IN WITNESS WHEREOF this Agreement has been executed as of the day and year first
above written.
T.L. SADLIER-BROWN LAKE FOREST MINERALS INC.
"T.L. SADLIER-BROWN" "JEFFREY D. TAYLOR"
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T.L. SADLIER-BROWN JEFFREY D. TAYLOR
Authorized Signatory Authorized Signatory
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