Exhibit 10.3
LETTER OF INTENT
This letter of intent (the "Agreement") is made on March 16, 2009 by and
between:
Cerro Rico Ventures LLC, a Nevada limited liability company ("Lessor") and
Lithium Corp., a private company ("Lessee")
Whereas,
Lessor has certain prior and proprietary knowledge regarding the occurrence of
lithium-rich materials (the "Property") in certain area of Nevada, and
Lessor is willing to disclose and utilize such information to acquire such
Property on Lessee's behalf, and
Whereas,
Lessee has the ability, interest, and desire to enter into the Agreement to
acquire such Property, and
Lessee is financially capable of entering into this Agreement for acquisition of
the Property.
Now, therefore, Lessor and Lessee agree as follows:
1. Lessee agrees to finance the initial acquisition of claims, as
directed by Lessor.
2. Lessee agrees to deposit funds sufficient to cover the staking and
filing cost into Lessor's account, to be provided upon signing to
Lessee, and prior to initiation of acquisition.
3. Lessor agrees to acquire, on a best faith basis, by claim staking on
US federal ground administered by the Bureau of Land Management,
approximately 2,500 acres.
4. Lessee's initial acquisition cost per claim is estimated to be US $125
for staking, and US $175 for filing, for an approximate total cost of
US $40,000.
5. Lessor agrees to acquire the Property on behalf of the Lessee, and
6. Lessor agrees to hold the Property exclusively on behalf of the
Lessee.
Additional Terms
1. Lessor agrees to maintain accounting records sufficient to verify
expenditures on staking and filing costs for the acquired claims, and
to provide such accounting to Lessee.
2. Lessee shall remit to Lessor US $20,000 as an initial annual lease
payment. Lessee agrees to the following annual lease schedule:
a. Upon 1st anniversary of confirmation- $ 25,000
b. Upon 2nd anniversary- $ 30,000
c. Upon 3rd through 10th anniversary- $ 50,000
d. Upon 11th through 20th- $ 75,000
e. At any time upon commercial sustained
production a one-time final lease payment of $250,000
e.1 any such production payment as set forth in section "e"
above shall supersede annual lease payments, which will
cease so long as production is maintained. Upon cessation of
production for any period in excess of 6 months, the annual
lease payment schedule shall resume.
3. Lessor reserves and maintains a 3% net smelter royalty (the "NSR"),
subject to the following
a. Lessee may purchase 1% of the NSR within 5 years of $500,000
b. Lessee may purchase an additional 1% of the NSR within 10 years
for $1,000,000
c. Lessee may purchase the remainder for the NSR within 15 years for
an additional sum of $2,000,000
4. Lessee agrees to maintain the property in good standing and to comply
with all laws pertinent to activities on the Property.
Lessor and Lessee agree that this Agreement and any following formal lease shall
not constitute a partnership.
Lessor and Lessee agree, on a good faith basis, to negotiate a formal lease
agreement embodying the above terms and other such mutually agreeable clauses as
a standard and necessary for the orderly exploration and development of the
Property, and maintenance of the lease status by and between Lessor and Lessee.
Any notices required or authorized shall be delivered by commercial courier,
facsimile, certified U.S. Mail, postage prepaid and return receipt requested,
addressed to the proper party at the address stated below:
If to Lessor: Cerro Rico Ventures LLC
5004 E. Albuquerque Road
Reno, NV 89
If to Lessee: Lithium Corp.
9443 Axlund Road
Lynden, WA 98264
Lessor and Lessee agree that time is of the essence in the performance of the
mutual agreements, obligations, and covenants set forth in this Agreement. The
parties have executed this Agreement effective the date first written above.
Lessor Managing Member
/s/
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Cerro Rico Ventures LLC Title
Lesee Director
/s/
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Lithium Corp. Title