ALBERTA STAR DEVELOPMENT CORP.
200 - 675 West Hastings Street
Vancouver, British Columbia V6B 1N2
Telephone: (604) 681-3131
Facsimile: (604) 801-5499
November 14, 2002
Tyhee Development Corp.
401- 675 West Hastings Street
Vancouver, British Columbia
V6B 1N2
Attention: Dr. D.R. Webb, President
Dear Sirs:
Re: Longtom Property, Northwest Territories
We confirm the following:
A. Pursuant to an Option Agreement dated February 12, 1998 (the
"Option Agreement"), Alberta Star Development Corp. ("Alberta
Star") has earned an undivided 50% interest in and to the Longtom
Property (as defined in the Option Agreement) (the "Property");
and
B. Tyhee Development Corp. ("Tyhee") is the beneficial owner of the
remaining undivided 50% interest in and to the Property, which
is held in trust for Tyhee by Dr. Dave Webb, the registered
owner of Tyhee's interest in the claims comprising the Property.
Further to our recent discussions concerning Alberta Star's acquisition of
Tyhee's 50% undivided interest in the Property, we confirm our agreement as
follows:
1. In this Agreement:
(a) "Expenditures" mean exploration expenditures that Alberta Star,
its joint venture partners or any optionees incur on the
Property, commencing on the date of this Agreement, that
qualify as Canadian Exploration Expense as defined in the
Canada Income Tax Act;
(b) "Notice Date" means the earlier of:
(i) the date that Alberta Star advises Tyhee in writing that
it will complete the purchase of Tyhee's 50% interest in
the Property; and
(ii) the date that Alberta Star has incurred Expenditures on
the Property totalling $5,000,000.
2. Upon the execution of this Agreement, Tyhee shall cause Dr. Dave
Webb to transfer its undivided 50% interest in the Property to
Alberta Star. In consideration of this transfer, Alberta Star
agrees to pay $315,000 (the "Purchase Price") to Tyhee within
90 days of the Notice Date.
3. Alberta Star shall have no obligation to pay the Purchase Price
to Tyhee unless the Notice Date is triggered. If Alberta Star
abandons its interest in the Property, it shall have no
obligation to pay the Purchase Price to Tyhee, provided that
Alberta Star transfers to Tyhee a 50% interest in the Property,
subject to the 2% net smelter returns royalty described in
the Option Agreement (the "Royalty"), should Tyhee request such
transfer upon receiving notice of the proposed abandonment.
Any Property returned to Tyhee pursuant to this request shall
be in good standing for a minimum of one year from the date
Alberta Star notifies Tyhee of abandonment.
4. Alberta Star's 100% interest in the Property shall be subject to
the Royalty. Tyhee agrees to assist Alberta Star in attempting
to secure a purchase of this Royalty from its current owner.
5. Alberta Star may, at its option, pay the Purchase Price either:
(a) in cash; or
(b) 50% in cash and 50% in common shares in the capital of Alberta
Star. The deemed price of Alberta Star's common shares shall be
the average TSX Venture Exchange closing market price of Alberta
Star's common shares on the five trading days immediately
preceding and the five trading days immediately following the
Notice Date.
6. Upon execution of this Agreement, Alberta Star shall have the
right to enter into a joint venture or option agreement with a
third party, which joint venture or option may include a
disposition of Tyhee's former interest in the Property, provided
that such interest is subject to the Royalty. This interest
must be confirmed in writing to Tyhee prior to being effective.
7. Except as amended by this Agreement, all other terms and
conditions of the Febraury 12, 1998 Option Agreement shall
remain in effect and in force and shall survive the sale of
Tyhee's interest. (this includes continuing escrow releases,
notices, maintenance of the property, indemnities etc.)
8. This Agreement shall be subject to TSX Venture Exchange
acceptance for filing.
9. Alberta Star acknowledges that it does not possess any
undisclosed material facts pertaining to the Longtom Property as
of the date of this Agreement.
Please acknowledge your acceptance of the terms of this Agreement by signing
below and returning a duly executed copy of this letter to us, whereupon there
will be a binding agreement between us.
Yours truly,
AGREED AND ACCEPTED this 14th day of
November, 2002 by:
ALBERTA STAR DEVELOPMENT CORP. TYHEE DEVELOPMENT CORP.
PER: /s/ Tim Coupland PER: /s/ David Webb
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Authorized Signatory Authorized Signatory