THIS PURCHASE AGREEMENT BETWEEN:
ZANDARIA VENTURES LIMITED
Suite 600
535 Thurlow Street
Vancouver, BC V6E 3C2
Attention: Steve Cozine
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and
Richard Simpson
Suite 1201
1188 Quebec Street
Vancouver, BC V6A 4B3
Re: SALE AND Acquisition of Mineral Claims,
SOUTHWESTERN BRITISH COLUMBIA, CANADA
The following terms and conditions are applicable for the sale of 3 mineral
claims near Goldbridge, British Columbia, Canada by Richard Simpson (herein
after referred to as "RS") to Zandaria Ventures Limited (herein after referred
to as "ZVL"). Both RS and ZVL agree to the following:
a) RS will transfer title to three (3) mineral claims listed in
Exhibit "A" and outlined in Exhibit "B" to ZVL within 60 days of this
agreement. These claims are contiguous hard rock mineral claims
covering 1106.331 hectares.
b) RS will provide to ZVL within 60 days of this agreement a
geological report summarizing the mineral claims, particulars of recent
sampling and geological investigation, copies of all records, a budget
for further work and recommendations, and all other information and
material relevant to a geological report requisite for filing with the
regulatory bodies.
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c) RS will ensure that the claims shall be maintained in good
standing for up to 10 months from the date of agreement and can provide
geological consulting services for the claims. All assessment costs
will be borne by ZVL.
d) RS shall sell 100% (one hundred percent) interest in the claims
to ZVL subject to a 2 1/2% Net Smelter Royalty (NSR) and a 7 1/2% Gross
Rock Royalty (GRR) for a total of $20,000.00. 1 1/2% of the NSR can be
acquired for $1.0 million within 12 months from commencement of
commercial production. Advance royalties of $25,000 shall be paid
annually commencing 36 months from date of signature of this agreement.
e) If ZVL fails to make the advance royalty payments on the 36
month anniversary of the signature of this agreement, as described in
(d) above, then ZVL agrees to transfer ownership of the subject mining
claims to RS within no less than a 10 day period.
ZVL shall:
i) Pay $2,500 to RS on or before April 15, 2005 and a further $17,500 on
or before April 5, 2006.
ii) Provide the name and number of an individual or corporate Free Miner
Certificate to transfer the claims into.
By signature witnessed below, the undersigned hereby acknowledge that they have
read and understood and agree to the aforementioned terms.
Dated at Vancouver, British Columbia, Canada this 5th day of April, 2005.
/s/ Steven Cozine /s/ Richard Simpson
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per Zandaria Ventures Limited Richard Simpson
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Footnotes to Agreement
1) All dollar figures are denoted in the currency of the United States of
America.
2) The total to be paid by ZVL to RS, his agents or appointed or third
parties for the claims is $20,000 exclusive of assessment.
3) To maintain claims in British Columbia annual assessment work
is required of $0.40 per hectare (CDN) in year 1-3 per claim, followed
by $0.80 per hectare thereafter. There is a filing fee of
$0.04/hectare.
4) Attached are definitions of NSR and GRR.
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Advance Royalty Payments means from time to time payments to the Optionor by the
Optionee before Commencement of Commercial Production of Minerals.
Commencement of Commercial Production, with respect to Minerals or Rock, as the
case may be, means:
(a) if a mill is located on the subject property, the last
day of a period of forty (40) consecutive days in which, for
not less than thirty (30) days, the mill processed Mineral or
Rock from the Property at 60% of its rated capacity; or
(b) if no Mill is located on the Property, the last day of
the first period of thirty (30) consecutive days during which
Mineral or Rock has been shipped from the Property on a
reasonably regular basis for the purpose of earning revenues;
or
(c) with respect to Rock, following the 30th day of extraction for
commercial use.
No period of time during which ore or concentrate is shipped from the Property
for testing purposes or during which milling operations are undertaken as
initial tune-up will be taken into account in determining the date of
Commencement of Commercial Production.
Gross Rock Revenue means, for any period, the gross proceeds received by the
Optionee in that period from the sale of Rock produced from the Property less
any treatment, beneficiation or other changes or penalties deducted by the
purchase to whom such Rock is shipped, less:
(a) all costs of the Optionee associated with such sales
involving handling, weighing, sampling, determination of water
content, insuring, packaging and transporting Rock;
(b) the costs of marketing, including rebates or allowances made
or given; and
(c) any sales, severance, gross production, privilege or similar
taxes (other than income taxes or mining taxes based on
income).
Minerals means the ores or concentrates of minerals, as that term is defined in
the Mineral Tenure Act (British Columbia), and the rock that is part of such
ores and concentrates sold by the Optionee.
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Net Smelter Return means, for any period the difference between:
(a) the sum of:
(i) the gross proceeds received by the Optionee in
that period from the sale of Minerals produced from
the property to a party that is arm's length to the
Optionee, or that would have been received by the
Optionee if the purchase of the Minerals were at
arm's length to the Optionee; and
(ii) in the case of the sale of Minerals that are ores
that have not been processed in a Mill, the estimated
cost that would have been incurred in crushing and
beneficiating such Minerals in a Mill as agreed by
the parties or otherwise determined by a competent
mining or metallurgical engineer;
and
(b) the sum of:
(i) all amounts paid on account of Advance Royalty Payments;
(ii) any insurance costs in connection with shipping such Minerals;
(iii) any costs of transport;
(iv) all costs of the Optionee associated with such sales involving
handling, weighing, sampling, determination of water content, insuring
and packaging;
(v) the costs of marketing, adjusted for rebates or allowance made or
given;
(vi) any sales, severance, gross production, privilege or similar taxes
(other than income taxes or mining taxes based on income) assessed
on or in connection with the Minerals or the value thereof; and
(vii) any treatment, beneficiation or other charges or penalties deducted
by any smelter or refinery to which such Minerals are shipped that
have not been previously deducted in the computation of gross
proceeds.
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Net Smelter Royalty means the percentage of Net Smelter Return from time to time
payable to the Optionor after Commencement of Commercial Production from the
sale of Minerals.
Rock means all substances that are mined from the Property and sold by the
Optionee that are not Minerals.
Rock Royalty means the amount of royalty from time to time payable to the
Optionor after Commencement of Commercial Production from the sale of Rock
pursuant to Section 11.06.
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Exhibit A:
Mineral Claims
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MINERAL TITLES ONLINE VIEWER
Tenure Detail
Tenure Number ID 510121 View Tenure
Termination Type
Title Type MCX
Tenure Sub Type C
Tenure Type M
Mining Division
Good To Date 2006/APR/03
Issue Date 2005/APR/03
Termination Comments
Termination Date
Tag Number
Claim Name CHIP 1
Old Tenure Code
Area In Hectares 491.787
Map Numbers:
092J
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Owners:
124748 RICHARD STUART SIMPSON 100.0%
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Agents:
124748 RICHARD STUART SIMPSON CEXT (4025034)
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MINERAL TITLES ONLINE VIEWER
Tenure Detail
Tenure Number ID 510122 View Tenure
Termination Type
Title Type MCX
Tenure Sub Type C
Tenure Type M
Mining Division
Good To Date 2006/APR/03
Issue Date 2005/APR/03
Termination Comments
Termination Date
Tag Number
Claim Name CHIP 2
Old Tenure Code
Area In Hectares 307.271
Map Numbers:
092J
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0wners:
124748 RICHARD STUART SIMPSON 100.00%
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Agents:
124748 RICHARD STUART SIMPSON CEXT (4025035)
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MINERAL TITLES ONLINE VIEWER
Tenure Detail
Tenure Number ID 510126 View Tenure
Termination Type
Title Type MCX
Tenure Sub Type C
Tenure Type M
Mining Division
Good To Date 2006/APR/03
Issue Date 2005/APR/03
Termination Comments
Termination Date
Tag Number
Claim Name CHIP 3
Old Tenure Code
Area In Hectares 307.273
Map Numbers:
092J
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0wners:
124748 RICHARD STUART SIMPSON 100.00%
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Agents:
124748 RICHARD STUART SIMPSON CEXT (4025039)
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EXHIBIT B:
Claim Map
See Attached PDF File
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