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THIS PURCHASE AGREEMENT BETWEEN:
PEI PIONEER EXPLORATION INC.
#620 - 800 West Pender Street
Vancouver, BC
V6C 2V6
Attention: Tom Brady
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and
DAVID DEERING
7954 - 18th Avenue
Burnaby, BC
V3N 1J6
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 Yale, British Columbia, Canada by David Deering (herein after
referred to as "DD") to PEI Pioneer Exploration Inc. (herein after referred to
as "PEI"). Both DD and PEI agree to the following:
a) DD will transfer title to three (3) mineral claims listed in Exhibit
"A" and outlined in Exhibit "B" to PEI within 60 days of this
agreement. These claims are contiguous hard rock mineral claims
covering _____ hectares.
b) DD will provide to PEI 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) DD will ensure that the claims shall be maintained in good standing for
up to 3 months from the date of agreement and can provide geological
consulting services for the claims. All assessment costs are the
responsibility of PEI.
d) DD shall sell 100% (one hundred percent) interest in the claims to PEI
subject to a 2% Net Smelter Royalty (NSR) for a total of $7,500. of
which $3,750 is due within 60 days of signature and the balance of
$3,750 due within 180 days of signature.
PEI shall:
i) Pay $3,750 to DD on or before October 25, 2005.
ii) Provide the name and number of an individual or corporate Free Miner
Certificate to transfer the claims into.
iii) Pay $3,750 to DD on or before February 25, 2006.
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 _____ day of ______________,
2005.
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per PEI Pacific Exploration Inc. David Deering
Witness Witness
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Print name Print Name
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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 PEI to DD, or his agents or appointed third
parties, for the claims is $7,500 inclusive 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 per
hectare.
4) Attached are definitions of NSR.
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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:
Claim Transfers and FMC
SEE ATTACHED PDF FILE EXHIBIT 10.1 PDF
Page 11 of 12
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Exhibit B:
Claim Map
SEE ATTACHED PDF FILE EXHIBIT 10.1 PDF