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Title: |
Earn - in Agreement |
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Date: |
2003 |
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Preview shows 12KB of 211KB total |
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$55 |
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ID: |
#379731 |
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EARN - IN AGREEMENT
between
RODEO CREEK GOLD INC.
GREAT BASIN GOLD LTD. (as Guarantor)
and
HECLA VENTURES CORP.
HECLA MINING COMPANY (as Guarantor)
HOLLISTER DEVELOPMENT BLOCK VENTURE
{PAGE}
TABLE OF CONTENTS
EARN - IN AGREEMENT
ARTICLE I DEFINITIONS....................................................2
ARTICLE II REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS .............5
ARTICLE III TERM OF EARN IN AGREEMENT ....................................8
ARTICLE IV RELATIONSHIP OF THE PARTIES....................................8
ARTICLE V INITIAL CONTRIBUTION..........................................10
ARTICLE VI MAINTENANCE AND ABANDONMENT OF PROPERTIES.....................13
ARTICLE VII AREA OF INTEREST .............................................15
ARTICLE VIII WITHDRAWAL AND TERMINATION....................................15
ARTICLE IX OPERATIONS AND GOVERNANCE.....................................17
ARTICLE X RECLAMATION OBLIGATIONS.......................................28
ARTICLE XI REPORTING, INSPECTION AND AUDIT...............................29
ARTICLE XII MEMORANDUM....................................................30
ARTICLE XIII DEFAULTS......................................................30
ARTICLE XIV CONFIDENTIALITY...............................................30
ARTICLE XV TAXES.........................................................32
ARTICLE XVI COOPERATION...................................................32
ARTICLE XVII GENERAL PROVISIONS............................................32
EXHIBITS
EXHIBIT A: PROPERTIES AND TERMINATION & RELEASE AGREEMENT
EXHIBIT B: ACCOUNTING PROCEDURES
EXHIBIT B1 INSURANCE
EXHIBIT C: FORM OF QUITCLAIM DEED AND ASSIGNMENT
EXHIBIT D: FORM OF MEMORANDUM OF AGREEMENT
EXHIBIT E: EXPENDITURE SCHEDULE AND INITIAL
PROGRAM & BUDGET
EXHIBIT F: OPERATING AGREEMENT
EXHIBIT G: HECLA MINING WARRANT AGREEMENT
EXHIBIT H: GREAT BASIN WARRANT AGREEMENT
{PAGE}
- 1 -
EARN - IN AGREEMENT
This Earn - in Agreement is made as of August 2, 2002, ("Effective Date")
between HECLA VENTURES CORP., a Nevada corporation duly qualified to do business
and in good standing in the state of Nevada, whose principal address is 6500
Mineral Drive, Coeur d'Alene, Idaho 83815 - 8788 (hereinafter referred to as
"Hecla Ventures") and its Guarantor, Hecla Mining Company and RODEO CREEK GOLD
INC., a Nevada corporation whose address is C/O Richard Harris, Ste. 260 - 6121
Lakeside Drive, Reno, NV 89511 (hereinafter referred to as "Rodeo Creek") who is
qualified to do business and is in good standing in the State of Nevada and its
Guarantor, Great Basin Gold Ltd.
RECITALS
A. WHEREAS, Rodeo Creek owns certain mining claims and other real property
interests more specifically described in Exhibit A, attached hereto and
incorporated herein by this reference (hereinafter referred to as the
"Properties");
B. WHEREAS, Hecla Ventures desires to acquire an undivided interest in the
Properties by spending the Earn - in Expenditures on or for the benefit of the
Properties unless terminated pursuant to the terms hereof; and
C. WHEREAS, upon completion of a Earn - in Activities (as that term is defined
below) by Hecla Ventures, Hecla Ventures and Rodeo Creek; enter into the
Operating Agreement attached hereto as Exhibit F;
D. WHEREAS, Hecla Mining Company ("Hecla Mining"), as Guarantor has agreed to
guarantee the due performance of all of the obligations of Hecla Ventures
hereunder. E. WHEREAS, Great Basin Gold Ltd. ("Great Basin"), as Guarantor has
agreed to guarantee the due performance of all the obligations of Rodeo Creek
hereunder.
NOW, THEREFORE, in consideration of the payments provided for herein and the
mutual promises set forth below, all the Parties hereto agree to the provisions
of this Earn - in Agreement.
ARTICLE I
DEFINITIONS
1.1 "Accounting Procedures" means the procedures set forth in Exhibit B.
1.2 "Affiliate" means any person, partner, partnership, joint venture, limited
liability company, corporation or other form of enterprise which directly or
indirectly controls, is controlled by, or is under common control with a party
to this Agreement. 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 "Area of Interest" means an area commonly known as the Hollister Development
Block with the three dimensional coordinates 34,000 E to 40,000 E;35,000 N to
42,000 N; and from surface to 4,000 feet above sea level. (A map of the
Hollister Development Block is attached to this Earn - in Agreement as Exhibit
A).
1.4 "Assets" means all materials, supplies, equipment, and personal property
required to conduct Earn - in Activities.
1.5 "Currency", "$", means US dollars unless otherwise stated.
1.6 "Commercial Production" means greater than or equal to 400 tonnes mined on
average per day over a 21 day calendar period or such longer time as is
consistent with the Feasibility Study.
1.7 "Default" means a Party's failure to perform its obligations required under
this Earn - in Agreement.
1.8 "Earn - in Activities" means all activities on or for the benefit of the
Properties giving rise to Earn - in Expenditures which are duly incurred and
paid as herein provided.
1.9 "Earn - in Agreement" means this Earn - in Agreement together with all
Exhibits and other information appended hereto.
1.10 "Earn - in Expenditures" means the issuance of the Hecla Mining Warrants
(subject to the issuance of the Great Basin Warrants) and other expenditures
including Assets acquired by Hecla Ventures for Earn - - in Activities for the
benefit of the Properties.
1.11 "Effective Date" means the date set forth on Page 1 of this Earn - in
Agreement.
1.12 "Expenditure Commitment" means the minimum sum Hecla Ventures must spend on
Earn - in Expenditures (pursuant to the Expenditure Schedule that is found in
Exhibit E) during each Annual Expenditure Commitment Period.
1.13 "Expenditure Commitment Period" means each year (set out in the Expenditure
Schedule that is found in Exhibit E and/or an approved Program and Budget under
Section 9.3) during which the corresponding Annual Expenditure Commitment is to
be spent.
1.14 "Expenditure Schedule" means Exhibit E.
1.15 "Feasibility Study" means a study of the feasibility of developing and
operating one or more mine(s) on the Properties, including an analysis of
economic, geological, engineering, environmental, regulatory and other
considerations, and containing the level of detail customary in the industry for
a feasibility study presented to financial institutions for the purpose of
seeking and obtaining financing for the development of a mine (with all
estimates developed to an accuracy within +/-10%).
1.16 "Guarantors" means Great Basin Gold Ltd. ("Great Basin") and Hecla Mining
Company ("Hecla Mining").
1.17 "Initial Feasibility Study" or "Prefeasibility Study" means a study of the
feasibility of developing and operating a mine on the Properties, including an
analysis of economic, engineering, geological, environmental, regulatory and
other considerations, and containing the level of detail customary in the
industry to determine whether the veins, ore bodies or other targets identified
in Stage I of Earn - in Activities are of sufficient interest to the Parties to
proceed with Stage II of Earn - in Activities (with all estimates developed to
an accuracy within +/- 15%).
1.18 "Operating Agreement" means that agreement, attached to this Earn - in
Agreement as Exhibit F, which is to be effective between Rodeo Creek and Hecla
Ventures upon Hecla Ventures' fulfillment of the requirements set out in Article
V, Section 5.1 of this Earn - in Agreement.
1.19 "Participating Interest" means the percentage interest of a Participant in
the Properties, Products and all other rights and obligations arising under this
Earn - in Agreement. From the Effective Date hereof through completion of Earn -
in Activities, and only for purposes of implementing Earn - in Activities, Hecla
Ventures and Rodeo Creek shall each be deemed to have a fifty percent (50%)
Participating Interest.
1.20 "Parties" means Rodeo Creek and Hecla Ventures and any other persons or
entities that become subject to this Earn - In Agreement in accordance with the
provisions hereof. Great Basin and Hecla Mining are Parties to this Earn - In
Agreement only with regard to their respective obligations:
(1) as Guarantors under Recitals D and E, and Sections 2.3 and 2.6;
(2) under Sections 2.4 and 2.7 concerning certain representations and
warranties; and
(3) to issue their respective Warrants pursuant to Article V and Exhibits E, G
and H.
1.21 "Participants" means Rodeo Creek and Hecla Ventures.
1.22 "Payments" means those payments identified in Exhibit E.
1.23 "Prime Rate" means a prime rate listed in the Wall Street Journal (source:
Federal Reserve).
1.24 "Products" means all ores, minerals and mineral resources produced from the
Properties under this Earn - In Agreement.
1.25 Programs and Budgets are as defined under Section 9.3.
1.26 "Property or Properties" means those interests in real property and all
mineral estates (and portions thereof) therein described in Exhibit A and all
other interests in real property within the Area of Interest which are made
subject to this Agreement subject to the obligations pertaining thereto under
applicable law or pursuant to Underlying Agreements noted on Exhibit A.
1.27 "Term" means the term of this Earn - in Agreement as defined in Article
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