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Document Preview Mining Venture Agreement |
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Title: |
Mining Venture Agreement |
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Entities: |
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Date: |
2004 |
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Size: |
Preview shows 19KB of 153KB total |
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Price: |
$45 |
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ID: |
#1345585 |
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<SEQUENCE>2
<FILENAME>doc2.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
MINING VENTURE AGREEMENT
--------------------------
(SUNNY SLOPE GOLD PROPERTY)
BETWEEN
WESTERN GOLDFIELDS, INC.
AND
321GOLD, INC.
DATED: NOVEMBER 28, 2004
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
<S> <C>
I - DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.1 "Accounting Procedure". . . . . . . . . . . . . . . . . . . . . . . 6
1.2 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.3 "Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.4 "Area of Interest . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.5 "Assets". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.6 "Budgets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.7 "Development" . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.8 "Exploration" . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.9 "Initial Contribution". . . . . . . . . . . . . . . . . . . . . . . 7
1.10 "Joint Account" . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.11 "Management Committee". . . . . . . . . . . . . . . . . . . . . . . 7
1.12 "Manager" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.13 "Mining". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.14 "Operations". . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.15 "Participant" and "Participants". . . . . . . . . . . . . . . . . . 7
1.16 "Participating Interest". . . . . . . . . . . . . . . . . . . . . . 7
1.17 "Prime Rate". . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.18 "Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.19 "Program" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.20 "Properties". . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.21 "Transfer". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.22 "Venture" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
II - REPRESENTATIONS AND WARRANTIES; TITLE TO ASSETS. . . . . . . . . . . . . . . 8
2.1 Capacity of Participants. . . . . . . . . . . . . . . . . . . . . . 8
2.2 Representations and Warranties. . . . . . . . . . . . . . . . . . . 8
2.3 Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4 Record Title. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.5 Joint Loss of Title . . . . . . . . . . . . . . . . . . . . . . . . 9
III - NAME, PURPOSES AND TERM . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.2 Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3 Purposes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.4 Limitation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.5 Effective Date and Term . . . . . . . . . . . . . . . . . . . . . . 9
IV - RELATIONSHIP OF THE PARTICIPANTS. . . . . . . . . . . . . . . . . . . . . . 10
4.1 No Partnership. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Federal Tax Elections and Allocations . . . . . . . . . . . . . . . 10
4.3 State Income Tax. . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.4 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2
<PAGE>
4.5 Other Business Opportunities. . . . . . . . . . . . . . . . . . . . 10
4.6 Waiver of Right to Partition. . . . . . . . . . . . . . . . . . . . 10
4.7 Transfer of Termination of Rights to Properties . . . . . . . . . . 11
4.8 Implied Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 11
V - CONTRIBUTIONS BY PARTICIPANTS. . . . . . . . . . . . . . . . .. . . . . . 11
5.1 Participants' Initial Contributions . . . . . . . . . . . . . . . . 11
5.2 Company's Failure to Make Initial Contribution. . . . . . . . . . . 11
5.3 Additional Cash Contributions . . . . . . . . . . . . . . . . . . . 11
VI - INTERESTS OF PARTICIPANTS . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.1 Initial Participating Interests . . . . . . . . . . . . . . . . . . 11
6.2 Changes in Participating Interests. . . . . . . . . . . . . . . . . 12
6.3 Voluntary Reduction in Participation; WGI's NSR . . . . . . . . . . 12
6.4 Default in Making Contribution. . . . . . . . . . . . . . . . . . . 12
6.5 Elimination of Minority Interest. . . . . . . . . . . . . . . . . . 13
6.6 Continuing Liabilities upon Adjustments of Participating Interests. 13
6.7 WGI's Right to Increase Its Participating Interests . . . . . . . . 13
VII - MANAGEMENT COMMITTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.1 Organization and Composition. . . . . . . . . . . . . . . . . . . . 14
7.2 Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.3 Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.4 Action Without Meeting. . . . . . . . . . . . . . . . . . . . . . . 14
7.5 Matters Requiring Approval. . . . . . . . . . . . . . . . . . . . . 14
VIII -MANAGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.2 Powers and Duties of Manager. . . . . . . . . . . . . . . . . . . . 14
8.3 Standard of Care. . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.4 Resignation; Deemed Offer to Resign . . . . . . . . . . . . . . . . 17
8.5 Payments to Manager . . . . . . . . . . . . . . . . . . . . . . . . 18
8.6 Transactions With Affiliates. . . . . . . . . . . . . . . . . . . . 18
8.7 Activities During Deadlock. . . . . . . . . . . . . . . . . . . . . 18
IX - PROGRAMS AND BUDGETS. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.1 Initial Program and Budget. . . . . . . . . . . . . . . . . . . . . 18
9.2 Operations Pursuant to Programs and Budgets . . . . . . . . . . . . 18
9.3 Presentation of Programs and Budgets. . . . . . . . . . . . . . . . 18
9.4 Review and Approval of Proposed Programs and Budgets. . . . . . . . 18
9.5 Election to Participate . . . . . . . . . . . . . . . . . . . . . . 19
9.6 Deadlock on Proposed Programs and Budgets . . . . . . . . . . . . . 19
9.7 Budget Overruns; Programs Changes . . . . . . . . . . . . . . . . . 19
9.8 Emergency or Unexpected Expenditures. . . . . . . . . . . . . . . . 19
X - ACCOUNTS AND SETTLEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3
<PAGE>
10.1 Monthly Statement . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.2 Cash Calls. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.3 Failure to Meet Cash Calls. . . . . . . . . . . . . . . . . . . . . 20
10.4 Audits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
XI - DISPOSITION OF PRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . 20
11.1 Taking in Kind. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11.2 Failure of Participant to Take in Kind. . . . . . . . . . . . . . . 20
XII - WITHDRAWAL AND TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . 20
12.1 Termination by Expiration or Agreement. . . . . . . . . . . . . . . 20
12.2 Termination by Deadlock . . . . . . . . . . . . . . . . . . . . . . 20
12.3 Withdrawal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
12.4 Continuing Obligations. . . . . . . . . . . . . . . . . . . . . . . 21
12.5 Disposition of Assets on Termination. . . . . . . . . . . . . . . . 21
12.6 Non-Compete Covenants . . . . . . . . . . . . . . . . . . . . . . . 21
12.7 Right to Data After Termination . . . . . . . . . . . . . . . . . . 21
12.8 Continuing Authority. . . . . . . . . . . . . . . . . . . . . . . . 22
XIII -ACQUISITIONS WITHIN AREA OFINTEREST. . . . . . . . . . . . . . . . . . . . 22
13.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
13.2 Notice to Non-acquiring Participant . . . . . . . . . . . . . . . . 22
13.3 Option Exercised. . . . . . . . . . . . . . . . . . . . . . . . . . 22
13.4 Option Not Exercised. . . . . . . . . . . . . . . . . . . . . . . . 22
XIV - ABANDONMENT AND SURRENDER OF PROERTIES. . . . . . . . . . . . . . . . . . . 23
14.1 Surrender or Abandonment of Property. . . . . . . . . . . . . . . . 23
14.2 Reacquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
XV - TRANSFER OF INTEREST. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
15.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
15.2 Limitations on Free Transferability . . . . . . . . . . . . . . . . 23
15.3 Preemptive Right. . . . . . . . . . . . . . . . . . . . . . . . . . 24
15.4 Exceptions to Preemptive Right. . . . . . . . . . . . . . . . . . . 25
XVI - DISPUTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
16.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
XVII -CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
17.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
17.2 Exceptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
17.3 Duration of Confidentiality . . . . . . . . . . . . . . . . . . . . 26
XVIII GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
18.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4
<PAGE>
18.2 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
18.3 Modification. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
18.4 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
18.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
18.6 Rule Against Perpetuities . . . . . . . . . . . . . . . . . . . . . 27
18.7 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . 27
18.8 Survival of Terms and Conditions. . . . . . . . . . . . . . . . . . 27
18.9 Entire Agreement; Successors and Assigns. . . . . . . . . . . . . . 27
18.10 Memorandum... . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
<TABLE>
<CAPTION>
EXHIBITS
--------
<S> <C>
EXHIBIT A - 29
PART 1. Properties and Title Exceptions
PART 2 Area of Interest
EXHIBIT B ACCOUNTING PROCEDURE 30
EXHIBIT C TAX MATTERS 36
EXHIBIT D INSURANCE 42
EXHIBIT E INITIAL PROGRAM AND BUDGET 43
</TABLE>
5
<PAGE>
MINING VENTURE AGREEMENT
------------------------
(Sunny Slope Gold Property)
THIS AGREEMENT made as of the 28th day of November, 2004 between Western
Goldfields, Inc., an Idaho corporation, ("WGI") and 321Gold, Inc., a Florida
Corporation , ("Company").
RECITALS
--------
A. WGI owns certain Properties in Mineral County, State of Nevada which
Properties are described in Exhibit A and defined in Section 1.20.
B. Company wishes to participate with WGI in the exploration, evaluation,
development and mining of mineral resources within the Properties or any other
properties acquired pursuant to the terms of this Agreement, and WGI is willing
to grant such right to Company.
NOW, THEREFORE, consideration of the covenants and agreements contained
herein, WGI and Company agree as follows:
ARTICLE I
---------
DEFINITIONS
-----------
1.1 "Accounting Procedure" means the procedures set forth in Exhibit B.
1.2 "Affiliate" means any person, partnership, joint venture, corporation
or other form of enterprise which directly or indirectly controls, is controlled
by, or is under common control with, a Participant. For purposes of the
preceding sentence, "control" means possession, directly or indirectly, of the
power to direct or cause direction of management and policies through ownership
of voting securities, contract, voting trust or otherwise.
1.3 "Agreement" means this Venture Agreement, including all amendments and
modifications thereof, and all schedules and exhibits, which are incorporated
herein by this reference.
1.4 "Area of Interest" means the area described in Part 2 of Exhibit A.
1.5 "Assets" means the Properties, Products and all other real and personal
property, tangible and intangible, held for the benefit of the Participants
hereunder.
1.6 "Budget" means a detailed estimate of all costs to be incurred by the
Participants with respect to a Program and a schedule of cash advances to be
made by the Participants.
6
<PAGE>
1.7 "Development" means all preparation for the removal and recovery of
Products, including the construction or installation a mill or any other
improvements to be used for the mining, or other beneficiation of Products.
1.8 "Exploration" means all activities directed toward ascertaining the
existence, location, quantity, quality or commercial value of deposits of
Products.
1.9 "Initial Contribution" means that contribution each Participant has
made or agrees to make pursuant to Section 5.1.
1.10 "Joint Account" means the account maintained in accordance with the
Accounting Procedure showing the charges and credits accruing to the
Participants.
1.11 "Management Committee" means the committee established under Article
VII.
1.12 "Manager" means the person or entity appointed under Article VIII to
manage Operations, or any successor Manager.
1.13 "Mining" means the mining, extracting, producing, handling, milling or
other processing of Products.
1.14 "Operations" means the activities carried out under this Agreement.
1.15 "Participant" and "Participants" mean the persons or entities that
from time to time have Participating Interests.
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