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OPTION TO PURCHASE, JOINT VENTURE AND ROYALTY AGREEMENT
GOOD HOPE PROPERTY
THIS AGREEMENT made as of the 26TH day of FEBRUARY 2004.
BETWEEN:
CONSOLIDATED GLOBAL MINERALS LTD., a company duly
incorporated under the laws of the Province of Alberta,
having an office at 3003 - 438 Seymour Street,
Vancouver, British Columbia V6B 6H4
(hereinafter called "Global")
OF THE FIRST PART
AND:
DYNAMIC VENTURES LTD., a company duly incorporated under
the laws of the Province of Alberta, having an office at
200 - 675 West Hastings Street, Vancouver, British
Columbia V6B 1N2
(hereinafter called the "Dynamic")
OF THE SECOND PART
WHEREAS:
A. Global is the beneficial owner of 100% of the right, title and interest
in and to 97 unpatented lode mining claims situated in Elko County,
Nevada, which claims are more particularly described in Schedule "A"
attached hereto and forming part hereof (hereinafter together with any
form of successor or substitute mineral tenure called the "Claims");
B. The parties now wish to enter into an agreement granting to Dynamic the
exclusive right and option to acquire an undivided 60% of the right, title
and interest of Global in and to the Claims on the terms and conditions as
hereinafter set forth.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
the mutual promises, covenants and agreements herein contained, the parties
hereto agree as follows:
1. INTERPRETATION
1.1 In this Agreement:
(a) "Cease Trade Order" means the cease trade order issued against
Dynamic by the Alberta Securities Commission on July 22, 1999;
(b) "Claims" means those Claims listed in Schedule "A" of this
Agreement;
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(c) "dollars" means legal currency of the United States of America;
(d) "Effective Date" means the date that all parties have signed this
Agreement;
(e) "Expenditures" shall include all expenditures and costs made or
incurred by Dynamic or its affiliates or assigns relating directly
or indirectly to the Claims, including without limitation all
expenditures and costs made or incurred: in doing geophysical,
geochemical, land, airborne, environmental and/or geological
examinations, assessments, assays, audits and/or surveys; in
linecutting, mapping, trenching and staking; in searching for,
digging, trucking, sampling, working, developing, mining and/or
extracting ores, minerals and metals; in doing diamond and other
drilling; in obtaining, providing, erecting, mining and milling
including, without limitation, installing and operating mining
plant, milling or other treatment plant, ancillary facilities,
buildings, machinery, tools, appliances and/or equipment; in
construction of access roads and other facilities on or for the
benefit of the Claims or any part thereof, in transporting
personnel, supplies, mining, milling or other treatment plant,
buildings, machinery, tools, appliances or equipment in, to or from
the Claims or any part thereof, in paying reasonable wages and
salaries (including "fringe benefits") of personnel directly engaged
in performing work on or with respect to the Claims; in payment of
assessments or contributions under applicable employment legislation
relating to workers' compensation, unemployment insurance and other
applicable legislation or ordinances relating to such personnel; in
supplying food, lodging and other reasonable needs for such
personnel; in obtaining and maintaining any insurance; in the
management of and accounting for work and providing supervisory,
legal, accounting, consulting and other contract or professional
services or facilities relating to work performed or to be performed
hereunder, in paying any taxes, fees, charges, payments or rentals
(including payments made in lieu of assessment work) or otherwise
incurred to transfer the Claims or any part thereof or interest
therein pursuant to this Agreement and to keep the Claims or any
part thereof in good standing; in acquiring access and surface
rights to the Claims; in carrying out any negotiations and
preparing, settling and executing any agreements or other documents
relating to environmental or indigenous peoples' claims,
requirements or matters; in carrying out any requirements or
prerequisites in order to obtain and obtaining all necessary or
appropriate approvals, permits, consents or permissions relating to
the carrying out of work, including, without limitation,
environmental permits, approvals or consents; in carrying out
reclamation or remediation; in improving, protecting, or perfecting
title in the Claims or any part thereof, in carrying out mineral,
soil, water, air or other testing; in preparing engineering,
geological, financing, marketing or environmental studies and/or
reports and test work related thereto; and in preparing one or more
feasibility studies including any work or reports preliminary or
supplementary thereto.
Where Expenditures are charged to Dynamic by an affiliate of Dynamic
for services rendered by such affiliate, such Expenditures shall not
exceed the fair market value of the services rendered.
The certificate of an officer of Dynamic or its affiliate setting
forth the Expenditures incurred by Dynamic in reasonable detail
shall be primafacie evidence of the same.
(f) "Joint Venture" means the joint venture which may be formed by the
parties pursuant to Subsection 6.1;
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(g) "Joint Venture Agreement" means the joint venture agreement to be
entered into between the parties and containing the terms and
conditions set out in Schedule "B";
(h) "Mineral Products" means the products derived from operating the
Claims as a mine;
(i) "NSR Royalty" means a 3% net smelter returns royalty to be paid by
Dynamic pursuant to Subsection 12.1, all as further set out in
Schedule "C";
(j) "Net Smelter Returns" has the meaning set out in Schedule "C";
(k) "Operator" has the meaning set forth in the Joint Venture Agreement;
(l) "Option" means the option granted by Global to Dynamic pursuant to
Subsection 3.1;
(m) "Post-Consolidated Shares" means up to 1,000,000 (ONE MILLION)
common shares without par value in the capital stock of Dynamic, as
constituted after Dynamic has completed the consolidation of its
share capital on the basis of ten (10) existing shares being
consolidated into one new share, to be allotted and issued to Global
pursuant to Subsection 3.1.
2. REPRESENTATIONS AND WARRANTIES
2.1 Each party represents and warrants to the other party hereto that:
(a) it is a body corporate duty incorporated, organized and validly
subsisting under the laws of its incorporating jurisdiction;
(b) it has full power and authority to carry on its business and to
enter into this Agreement and any agreement or instrument referred
to or contemplated by this Agreement;
(c) neither the execution and delivery of this Agreement nor any of the
agreements referred to herein or contemplated hereby, nor the
consummation of the transactions hereby contemplated will conflict
with, result in the breach of or accelerate the performance required
by any agreement to which it is a party; and
(d) the execution and delivery of this Agreement and the agreements
contemplated hereby will not violate or result in the breach of laws
of any jurisdiction applicable or pertaining thereto or of its
constating documents.
2.2 Global represents and warrants to Dynamic that:
(a) the Claims have been duly and validly staked and recorded, are
accurately described in Schedule "A", are presently in good standing
under the laws of the jurisdiction in which they are located and,
except as set forth herein, are free and clear of all liens, charges
and encumbrances;
(b) Global is the sole beneficial owner of a 100% interest in and to the
Claims and has the exclusive right to enter into this Agreement and
all necessary authority to dispose of an undivided 60% interest in
and to the Claims in accordance with the terms of this Agreement;
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(c) Global is the registered owner of the Claims;
(d) no person, firm or corporation has any proprietary or possessory
interest in the Claims other than Global and no person is entitled
to any royalty or other payment in the nature of rent or royalty on
any minerals, ores, metals or concentrates or any other such
products removed from the Claims;
(e) there are no actions, suits, investigations or proceedings before
any court, arbitrator, administrative agency or other tribunal or
governmental authority, whether current, pending or threatened,
which directly or indirectly relate to or affect the Claims or the
interests of Global therein nor is Global aware of any acts which
would lead it to suspect that the same might be initiated or
threatened;
(f) there are no outstanding agreements or options to purchase or
otherwise acquire the Claims or any portion thereof or any interest
therein; and
(g) to the best of the knowledge, information and belief of Global,
there are no obligations or commitments for reclamation, closure or
other environmental corrective, clean-up or remediation action
directly or indirectly relating to the Claims.
2.3 The representations and warranties hereinbefore set out are conditions on
which the parties have relied in entering into this Agreement and will
survive the acquisition of any interest in the Claims by Dynamic and each
party will indemnify and save the other party harmless from all loss,
damage, costs, actions and suits arising out of or in connection with any
breach or any representation, warranty, covenant, agreement or condition
made by the other party and contained in this Agreement.
3. OPTION
3.1 Global hereby gives and grants to Dynamic the sole and exclusive right and
option to acquire an undivided 60% of the right, title and interest of
Global in and to the Claims in accordance with the terms of this Agreement
for and in consideration of the following:
(a) cash payments by Dynamic to Global totaling $90,000 and payable as
follows:
(i) on the EFFECTIVE DATE - $ 15,000
(ii) on or before the first anniversary of
the EFFECTIVE DATE - 20,000
(iii) on or before the second anniversary of
the EFFECTIVE DATE - 25,000
(iv) on or before the third anniversary of
the EFFECTIVE DATE - 30,000
TOTAL $ 90,000
(b) the issuance to Global and the delivery of certificates for a total
of 1,000,000 Post - Consolidated Shares as follows:
(i) on MAY 1, 2004 - 500,000
(ii) on or before NOVEMBER 1, 2004 - 500,000
TOTAL 1,000,000
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(c) aggregate Expenditures of not less than $600,000 to be incurred by
Dynamic, or its successors or assigns, on the Claims on or before
the third anniversary of the EFFECTIVE DATE, and subject to
Subsection 4.1, as follows:
(i) on or before the first anniversary of
the EFFECTIVE DATE - $ 100,000
(ii) on or before the second anniversary of
the EFFECTIVE DATE - $ 300,000
in the aggregate
(iii) on or before the third anniversary of
the EFFECTIVE DATE - $ 600,000
in the aggregate
3.2 The Post-Consolidated Shares to be issued to Global will be subject to
applicable hold periods imposed under the laws of the relevant
jurisdiction.
4. EXPENDITURES
4.1 Global understands and confirms that the amounts required to be spent
within the periods referred to in paragraph 3.1(c) are cumulative,
aggregate amounts and that, accordingly, all Expenditures incurred in a
particular period, including any excess in the amount of Expenditures
required to be incurred to maintain the Option during such period, shall
be carried over and included in the aggregate amount of Expenditures for
the subsequent period.
4.2 Unless Global is the Operator, within 60 DAYS following the anniversary of
the Effective Date each year, Dynamic shall deliver to Global a statement
showing in reasonable detail the Expenditures incurred by Dynamic during
the period just expired and the aggregate Expenditures incurred to the end
of such period and Global shall have 45 DAYS from the time of receipt of
such statement to question the accuracy thereof in writing, failing which
such statement shall be deemed to be correct and unimpeachable thereafter.
If Global is the Operator, a statement of Expenditures will not be
required.
4.3 If a statement is delivered pursuant to Subsection 4.2 and is questioned
by Global:
(a) Global shall have TWO (2) MONTHS from the time of delivery of the
statement to have such audited,
(b) the audited results shall be final and determinative of the amount
of Expenditures incurred for the audited period; provided that, if
such audit discloses a deficiency in the amount of Expenditures
required to be incurred to maintain its option in good standing,
Dynamic may pay to Global the amount of such deficiency within 15
DAYS following receipt of notice of such audited results, whereupon
such amount shall be deemed to have been Expenditures incurred
during the audited period, and
(c) the costs of the audit shall be borne by Global if Dynamic's
statement was accurate within 1% and shall be borne by Dynamic if
such statement was not accurate within 1%.
4.4 Notwithstanding paragraph 3.1(c), if Dynamic has not incurred the
requisite Expenditures to maintain its option in good standing prior to
the anniversary of the Effective Date of any given year, Dynamic may pay
to Global, within 60 DAYS following the expiry of such period, the amount
of the deficiency and such amount shall thereupon be deemed to have been
Expenditures incurred by Dynamic during such period.
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5. OPERATOR
5.1 Global will be the Operator until such time as the Joint Venture has been
formed after which time the Operator shall be appointed in accordance with
the terms of the Joint Venture Agreement.
5.2 The Operator shall be entitled to charge for management, supervision and
administrative services, the full amount of which shall be included as
Expenditures, as follows:
(a) five percent (5%) of all expenditures or costs made or incurred by
the Operator with a third party; and
(b) ten percent (10%) of all expenditures or costs made or incurred by
the Operator internally.
5.3 The Operator shall be responsible for preparing exploration programs and
budgets and for carrying out the exploration programs on the Claims. Prior
to carrying out any exploration program, the Operator shall first submit
the proposed program and budget in writing to Global for approval by
Global.
6. JOINT VENTURE
6.1 Upon the exercise of the Option, Global will then have a period of 120
days in which to provide Dynamic with a written notice electing to either:
(a) form the Joint Venture in which event the parties shall be deemed to
have associated themselves as at the date thereof into a 60
(Dynamic) / 40 (Global) Joint Venture and enter into the Joint
Venture Agreement containing substantially the terms and conditions
set forth in Schedule "B"; or
(b) not participate in a Joint Venture with Dynamic in which event
Dynamic will be deemed to have earned an undivided 100% of the
right, title and interest of Global in the Claims and Global shall
be granted the NSR Royalty, as set out in Section 12.
7. RIGHT OF ENTRY
7.1 During the currency of this Agreement, Dynamic, its employees, agents and
independent contractors, will have the sole and exclusive right and option
to:
(a) enter upon the Claims;
(b) have exclusive and quiet possession thereof,
(c) do such prospecting, exploration, development or other mining work
thereon and thereunder as Dynamic in its sole discretion may
consider advisable;
(d) bring and erect upon the Claims such facilities as Dynamic may
consider advisable.
8. TERMINATION
8.1 Subject to Subsection 22.1, this Agreement and the Option will terminate:
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(a) on MAY 1, 2004, unless on or before that date, Dynamic has allotted,
issued and delivered to Global Certificates representing 500,000
Post-Consolidated Shares registered in the name of Global and
Dynamic has paid to Global the sum of $15,000;
(b) on the first anniversary of the EFFECTIVE DATE, unless Dynamic has
paid Global the further sum of $20,000 and has incurred Expenditures
of $100,000 on the Claims;
(c) on NOVEMBER 1, 2004, unless Dynamic has allotted, issued, and
delivered to Global Certificates representing a further 500,000
Post-Consolidated Shares registered in the name of Global;
(d) on the second anniversary of the EFFECTIVE DATE, unless Dynamic has
paid Global the further sum of $25,000 and has incurred Aggregate
Expenditures of $300,000 on the Claims; and
(e) on the third anniversary of the EFFECTIVE DATE, unless Dynamic has
paid Global the further sum of $30,000 and has incurred aggregate
Expenditures of $600,000 on the Claims.
8.2 Notwithstanding any other provision of this Agreement, Dynamic shall have
the right at any time after payment and issuance of the amounts set out in
sub-paragraphs 3.1(a)(i) and 3.1(b)(i) and prior to its exercise of the
Option to give notice to Global terminating the Option and this Agreement.
If Dynamic gives such notice of termination, then the Option and this
Agreement shall terminate and Dynamic shall, subject to the provisions of
Section 13, have no further rights or interest in the Claims and no
further obligations or liabilities to Global (including in respect of any
cash payments as contemplated in paragraph 3.1(a), any Expenditures as
contemplated in paragraph 3.1(c) and the issuance of any Post-Consolidated
Shares as contemplated in paragraph 3.1(b) which have not been made or
issued).
9. COVENANTS OF GLOBAL
9.1 During the currency of this Agreement and the Option, Global will:
(a) not do any act or thing which would or might in any way adversely
affect the rights of Dynamic hereunder to earn an undivided 60%
interest in the Claims;
(b) make available to Dynamic and its representatives all records and
files in the possession of Global relating to the Claims, and permit
Dynamic and its representatives at its own expense to take abstracts
therefrom and make copies thereof; and
(c) promptly provide Dynamic with any and all notices and correspondence
from government agencies in respect of the Claims.
10. COVENANTS OF DYNAMIC
10.1 During the currency of this Agreement and the Option, Dynamic will:
(a) keep the Claims free and clear of all liens, charges and
encumbrances arising from its operations hereunder and in good
standing by the doing and filing of all necessary work and by the
doing of all other acts and things and making all other payments
which may be necessary in that regard;
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(b) permit Global, or its representatives duly authorized by it in
writing, at its own risk and expense, access to the Claims at all
reasonable times and to all records prepared by Dynamic in
connection with work done on or with respect to the Claims;
(c) conduct all work on or with respect to the Claims in a careful and
minerlike manner and in compliance with all applicable Federal,
Provincial and local laws, rules, orders and regulations, and
indemnify and save Global harmless from any and all claims, suits,
actions made or brought against it as a result of work done by
Dynamic on or with respect to the Claims;
(d) obtain and maintain, or cause any contractor engaged hereunder to
obtain and maintain, during any period in which active work is
carried out hereunder, adequate insurance; and
(e) make all filings and disclosures as required and within the time
periods specified under all applicable securities legislation with
respect to the allotment and issuance of the Shares pursuant to
Subsection 3.1 of this Agreement.
11. EXERCISE OF OPTION
11.1 Once Dynamic has made the payments totaling $90,000 as set out in
paragraph 3.1(a), issued certificates for 1,000,000 Post-Consolidated
Shares as set out in paragraph 3.1(b) and incurred or deemed to have
incurred Expenditures totaling $600,000 as set out in paragraph 3.1(c),
Dynamic will be deemed to have exercised the Option and to have earned an
undivided 60% interest in and to the Claims and in all rights of Global
with respect thereto.
11.2 Once Dynamic has exercised the Option, Global will have 120 days to
provide Dynamic with the written notice of election set out in Subsection
6.1.
12. NSR ROYALTY
12.1 If Global elects not to form the Joint Venture and elects to receive the
NSR Royalty, Dynamic will pay to Global an annual royalty equal to THREE
PERCENT (3.0%) of Net Smelter Returns, subject to Subsection 12.4.
12.2 Payment of the NSR Royalty will be made quarterly within 30 DAYS after the
end of each yearly quarter based upon a year commencing on the 1ST day of
MAY and expiring on the 30TH day of APRIL in any year in which production
occurs. Within 60 DAYS after the end of each year for which the NSR
Royalty is payable, the records relating to the calculation of Net Smelter
Returns for such year will be audited by Dynamic and any adjustments in
the payment of the NSR Royalty will be made forthwith after completion of
the audit. All payments of the NSR Royalty for a year will be deemed final
and in full satisfaction of all obligations of Dynamic in respect thereof
if such payments or calculations thereof are not disputed by Global within
60 DAYS after receipt by Global of the said audit statement. Dynamic will
maintain accurate records relevant to the determination of Net Smelter
Returns and Global, or its authorized agent, shall be permitted the right
to examine such records at all reasonable times.
12.3 The determination of Net Smelter Returns royalty hereunder is based on the
premise that production will be developed solely on the Claims except that
Dynamic will have the right to commingle ore mined from the Claims with
ore mined and produced from other properties provided Dynamic will adopt
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and employ reasonable practices and procedures for weighing, sampling and
assaying, in order to determine the amounts of products derived from,
or attributable to ore mined and produced from the Claims. Dynamic will
maintain accurate records of the results of such sampling, weighing and
analysis with respect to any ore mined and produced from the Claims.
Global or its authorized agent will be permitted the right to examine
at all reasonable times such records pertaining to commingling of ore
or to the calculation of Net Smelter Returns.
12.4 Dynamic shall have the right at any time to purchase up to two of the
THREE royalty percentage points, and thus reduce the NSR Royalty from 3.0%
to 1.0%, by paying to Global the sum of $1,000,000 for each royalty
percentage point so purchased.
13. OBLIGATIONS OF DYNAMIC AFTER TERMINATION
13.1 In the event of the termination of the Option, Dynamic will:
(a) leave the Claims in good standing for a minimum of TWELVE (12)
MONTHS under all applicable legislation, free and clear of all
liens, charges and encumbrances arising from this Agreement or their
operations hereunder and in a safe and orderly condition; and
(b) deliver to Global within 60 DAYS of its written request a
comprehensive report on all work carried out by Dynamic on the
Claims (limited to factual matter only) together with copies of all
maps, drill logs, assay results and other technical data compiled by
Dynamic with respect to the Claims; and
(c) have the right, and obligation on demand made by Global, to remove
from the Claims within SIX (6) MONTHS of the effective date of
termination all facilities erected, installed or brought upon the
Claims by or at the instance of Dynamic provided that at the option
of Global, any or all of facilities not so removed will become the
property of Global; and
(d) deliver to Global a duly executed transfer in registrable form of an
undivided 100% right, title and interest in and to the Claims in
favour of Global, or its nominee.
14. TRANSFER OF TITLE
14.1 Upon the request of Dynamic, Global will deliver to Dynamic a duly
executed transfer in registrable form of an undivided 60% right, title and
interest in and to the Claims in favour of Dynamic which Dynamic will be
entitled to register against title to the Claims provided that transfer of
legal title to the Claims as set forth in this Subsection 14.1 is for
administrative convenience only and beneficial ownership of an undivided
60% interest in the Claims will pass to Dynamic only in accordance with
the terms and conditions of this Agreement.
15. REGISTRATION OF AGREEMENT
15.1 Notwithstanding Subsection 14.1 of this Agreement, Dynamic or Global will
have the right at any time to register this Agreement or a Memorandum
thereof against title to the Claims.
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16. DISPOSITION OF CLAIMS
16.1 Dynamic may at any time sell, transfer or otherwise dispose of all or any
portion of its interest in and to the Claims and this Agreement provided
that, at any time, Dynamic has first obtained the consent in writing of
Global, such consent not to be unreasonably withheld and further provided
that, at any time during the currency of this Agreement, any purchaser,
grantee or transferee of any such interest will have first delivered to
Global its agreement related to this Agreement and to the Claims,
containing:
(a) a covenant with Global by such transferee to perform all the
obligations of Dynamic to be performed under this Agreement in
respect of the interest to be acquired by it from Dynamic, and
(b) a provision subjecting any further sale, transfer or other
disposition of such interest in the Claims and this Agreement or any
portion thereof to the restrictions contained in this Subsection
16.1.
16.2 The provisions or Subsection 16.1 of this Agreement will not prevent
Dynamic from entering into an amalgamation or corporate reorganization
which will have the effect in law of the amalgamated or surviving company
possessing all the property, rights and interests and being subject to all
the debts, liabilities and obligations of each amalgamating or predecessor
company.
17. ABANDONMENT OF PROPERTY
17.l At any time prior to the exercise of the Option, Dynamic shall have the
unfettered right at any time to abandon all or any part of its interest in
the Claims by delivering a notice in writing of its intention to do so to
Global, such notice to list the part or parts of the Claims to be
abandoned, and if within 30 DAYS of receipt of such notice Global delivers
to Dynamic a notice ("Reacquisition Notice") stating its intention to
reacquire all or part or parts of the Claims, Dynamic will deliver to
Global duly executed recordable transfers of its interest in such part or
parts of the Claims as Global has set forth in the Reacquisition Notice,
such part or parts to be in good standing for at least twelve months
beyond the date of delivery of such transfers and to be free and clear of
all liens, charges, and encumbrances arising from the operations of
Dynamic or its agents or subcontractors hereunder.
18. CONFIDENTIAL NATURE OF INFORMATION
18.1 The parties agree that all information obtained from the work carried out
hereunder and under the operation of this Agreement will be the exclusive
property of the parties and will not be used other than for the activities
contemplated hereunder except as required by law or by the rules and
regulations of any regulatory authority having jurisdiction, or with the
written consent of both parties, such consent not to be unreasonably
withheld. Notwithstanding the foregoing, it is understood and agreed that
a party will not be liable to the other party for the fraudulent or
negligent disclosure of information by any of its employees, servants or
agents, provided that such party has taken reasonable steps to ensure the
preservation of the confidential nature of such information.
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19. FURTHER ASSURANCES
19.1 The parties hereto agree that they and each of them will execute all
documents and do all acts and things within their respective powers to
carry out and implement the provisions or intent of this Agreement.
20. NOTICE
20.1 Any notice, direction or other instrument required or permitted to be
given under this Agreement will be in writing and will be given by the
delivery or the same or by mailing the same by prepaid registered or
certified mail in each case addressed as follows:
(a) if to Dynamic
200 - 675 West Hastings Street
Vancouver, B.C. V6B 1N2
Attention: Robert Fedun
(b) if to Global
3003 - 438 Seymour Street
Vancouver, B.C. V6B 6H4
Attention: George Heard
20.2 Any notice, direction or other instrument aforesaid will, if delivered, be
deemed to have been given and received on the day it was delivered, and if
mailed, be deemed to have been given and received on the tenth business
day following the day of mailing, except in the event of disruption of the
postal services in which event notice will be deemed to be received only
when actually received.
20.3 Any party may at any time give to the other notice in writing of any
change of address of the party giving such notice and from and after the
giving of such notice, the address or addresses therein specified will be
deemed to be the address of such party for the purpose of giving notice
hereunder.
21. HEADINGS
21.1 The headings to the respective sections herein will not be deemed part of
this Agreement but will be regarded as having been used for convenience
only.
22. DEFAULT
22.1 If any party (a "Defaulting Party") is in default of any requirement
herein set forth, the party affected by such default will give written
notice to the defaulting Party specifying the default and the Defaulting
Party will not lose any rights under this Agreement, if within 30 DAYS
after the giving of notice of default by the affected party the Defaulting
Party has cured the default by the appropriate performance and if the
Defaulting Party fails within such period to cure any such default, the
affected party will be entitled to seek any remedy it may have on account
of such default.
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23. PAYMENT
23.1 All references to monies hereunder will be in United States funds except
where otherwise designated. All payments to be made to any party
hereunder will be mailed or delivered to such party at its address for
notice purposes as provided herein, or for the account of such party at
such bank or banks in Canada or the United States as such party may
designate from time to time by written notice. Said bank or banks will be
deemed the agent of the designating party for the purpose of receiving,
collecting and receiving such payment.
24. ENUREMENT
24.1 This Agreement will enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
25. TERMS
25.1 The terms and provisions of this Agreement shall be interpreted in
accordance with the laws of British Columbia.
26. FORCE MAJEURE
26.1 No party will be liable for its failure to perform any of its obligations
under this Agreement due to a cause beyond its control (except those
caused by its own lack of funds) including, but not limited to acts of
God, fire, flood, explosion, strikes, lockouts or other industrial
disturbances, laws, rules and regulations or orders of any duly
constituted governmental authority or non-availability of materials or
transportation (each an "Intervening Event").
26.2 All time limits imposed by this Agreement will be extended by a period
equivalent to the period of delay resulting from an Intervening Event
described in Subsection 26.1.
26.3 A party relying on the provisions of Subsection 26.1 will take all
reasonable steps to eliminate an Intervening Event and, if possible, will
perform its obligations under this Agreement as far as practical, but
nothing herein will require such party to settle or adjust any labour
dispute or to question or to test the validity of any law, rule,
regulation or order of any duly constituted governmental authority or to
complete its obligations under this Agreement if an Intervening Event
renders completion impossible.
27. ENTIRE AGREEMENT
27.1 This Agreement constitutes the entire agreement between the parties and
replaces and supersedes all prior agreements, memoranda, correspondence,
communications, negotiations and representations, whether verbal or
written, express or implied, statutory or otherwise between the parties
with respect to the subject matter herein.
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28. OPTION ONLY
28.1 This Agreement provides for an option only, and except for the cash
payment of $15,000 set out in paragraph 3.1(a)(i) hereof and the issuance
of 500,000 Post-Consolidated Shares set out in paragraph 3.1(b)(i) (both
of which are firm commitments), nothing herein contained shall be
construed as obligating Dynamic to do any acts or make any payment
hereunder and any act or acts or payment or payments as shall be made
hereunder shall not be construed as obligating Dynamic to do any further
act or make any further payment.
29. CONDITION PRECEDENT
29.1 This Agreement is subject to the revocation of the Cease Trade Order on or
before May 1, 2004.
30. TIME OF ESSENCE
30.1 Time will be of the essence in this Agreement.
31. ARBITRATION
31.1 Disputes between the parties arising out of or in connection with this
Agreement or its interpretation shall be settled in accordance with this
Section 31 and shall be settled in the first instance available. If
amicable settlement cannot be reached within thirty (30) days following
written notice by one party to the other party of the existence of any
such dispute, the matter will be submitted to binding arbitration in
accordance with the provisions of this Section 31.
31.2 Following the expiry of the thirty (30) day notice period, any party may
refer any matter to arbitration by written notice to the others and,
within ten days after receipt of such notice, the parties will agree on
the appointment of an arbitrator. No person will be appointed as an
arbitrator hereunder unless such person agrees in writing to act.
31.3 If the parties cannot agree on a single arbitrator as provided in
Subsection 31.2 either party may submit the matter to arbitration (before
a single arbitrator) in accordance with the Commercial Arbitration Act of
the Province of British Columbia (the "Act").
31.4 Except as specifically provided in this Section 31, an arbitration
hereunder shall be conducted in accordance with the Act. The arbitrator
shall fix a time and place in Vancouver, British Columbia for the purpose
of hearing the evidence and representations of the parties and he shall
preside over the arbitration and determine all questions of procedure not
provided for under such Act or this Section 31. After hearing any evidence
and representations that the parties may submit, the arbitrator shall make
an award and reduce the same to writing and deliver one copy thereof to
each of the parties. The decision of the arbitrator will be made within 45
days after his appointment, subject to any reasonable delay due to
unforeseen circumstances. The expense of the arbitration shall be paid as
specified in the award. The parties agree that the award of the single
arbitrator shall be final and binding upon each of them and shall not be
subject to appeal.
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32. ENFORCEMENT OF AGREEMENT
32.1 The covenants, promises, terms and conditions contained herein will be
binding upon the parties jointly and severally and may be enforced by each
as against each other inter se.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
DYNAMIC VENTURES LTD.
Per: /s/ Robert Fedun
--------------------
Authorized Signatory
CONSOLIDATED GLOBAL MINERALS LTD.
Per: /s/ George Heard
--------------------
Authorized Signatory
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SCHEDULE "A"
to OPTION TO PURCHASE, JOINT VENTURE AND ROYALTY AGREEMENT
GOOD HOPE PROPERTY
made as of the 26th day of February 2004
between
Dynamic Ventures Ltd. and Consolidated Global Minerals Ltd.
- 16 -
SCHEDULE "B"
to OPTION TO PURCHASE, JOINT VENTURE AND ROYALTY AGREEMENT
GOOD HOPE PROPERTY
made as of the 26th day of February 2004
between
Dynamic Ventures Ltd. and Consolidated Global Minerals Ltd.
- 17 -
SCHEDULE "C"
to OPTION TO PURCHASE, JOINT VENTURE AND ROYALTY AGREEMENT
GOOD HOPE PROPERTY
made as of the 26th day of February 2004
between
Dynamic Ventures Ltd. and Consolidated Global Minerals Ltd.
PRODUCTION ROYALTIES
Upon commencing production of valuable minerals from the property, Dynamic shall
pay Global a royalty on production equal to three percent (3%) of net smelter
returns. The term "net smelter returns" shall mean the gross value of ores or
concentrates shipped to a smelter or other processor (as reported on the smelter
settlement sheet) less the following expenses actually incurred and borne by
Dynamic:
a) Sales, use, gross receipts, severance, and other taxes, if any,
payable with respect to severance, production, removal, sale or
disposition of the minerals from the property, but excluding any
taxes on net income;
b) Charges and costs, if any, for transportation from the mine or mill
to places where the minerals are smelted, refined, and/or sold; and
c) Charges, costs (including assaying and sampling costs specifically related
to smelting and/or refining), and all penalties, if any, for smelting
and/or refining.
In the event smelting or refining are carried out in facilities owned or
controlled, in whole or in part, by Dynamic, charges, costs and penalties for
such operations shall mean the amount Dynamic would have incurred if such
operations were carried out at facilities not owned or controlled by Dynamic
then offering comparable services for comparable products on prevailing terms.