Attached files
| file | filename |
|---|---|
| 10-K/A - CAPITAL GOLD CORP | v201876_10ka.htm |
| EX-31.2 - CAPITAL GOLD CORP | v201876_ex31-2.htm |
| EX-23.2 - CAPITAL GOLD CORP | v201876_ex23-2.htm |
| EX-32.2 - CAPITAL GOLD CORP | v201876_ex32-2.htm |
| EX-32.1 - CAPITAL GOLD CORP | v201876_ex32-1.htm |
| EX-31.1 - CAPITAL GOLD CORP | v201876_ex31-1.htm |
| EX-23.1 - CAPITAL GOLD CORP | v201876_ex23-1.htm |
| EX-10.33 - CAPITAL GOLD CORP | v201876_ex10-33.htm |
| EX-10.32 - CAPITAL GOLD CORP | v201876_ex10-32.htm |
| EX-10.34 - CAPITAL GOLD CORP | v201876_ex10-34.htm |
ROYALTY
AGREEMENT
THIS AGREEMENT MADE as of the
30th
day of January, 2004.
BETWEEN:
NAYARIT GOLD INC., a
corporation incorporated under the
laws of the Province of Ontario
(hereinafter referred to as the
"Corporation")
OF THE FIRST PART,
and
BELITUNG LIMTED, a corporation
incorporated under the laws of the Province of Ontario
(hereinafter referred to as the "Royalty Holder")
OF THE SECOND PART,
WHEREAS the Corporation has
acquired the Property as defined herein subject to the terms of a Royalty as
defined herein; and
AND WHEREAS it is necessary to
document the Royalty provided for herein;
NOW THEREFORE THIS AGREEMENT
WITHNESSETH that in consideration of the premises and mutual covenants
and agreements herein contained the parties covenant and agree as
follows:
ARTICLE
I: INTERPRETATION
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1.01
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Definitions
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In this Agreement, unless something in
the subject matter or context is inconsistent therewith:
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a)
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"Affiliate"
means a corporation or other entity which, in relation to another
corporation or other entity, is controlled by or controls such other
corporation or entity or is controlled by the same person, group of
persons or certain of them or by the same corporation or entity which
controls such other corporation or entity and where two or more
corporations or other entities are Affiliates of the same corporation or
entity they are Affiliates of each
other;
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b)
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"Control",
"Controls", "Controlled" or similar expression mean the holding by a
person or group of persons, directly or indirectly, of securities of a
corporation or entity or comparable beneficial interests in an entity (for
purposes hereof, "securities" shall include such interests) to which are
attached more than 50% of the votes or similar rights of decision that may
be cast to elect directors or any similar managing body of the corporation
or entity, if such votes or rights are sufficient, if exercised, to elect
a majority of the directors or similar managing body of the corporation or
entity, other than holding such securities by way of security only,
provided that control in fact of such corporation or entity, whether
directly through the ownership of securities or a right or option to
acquire securities or indirectly through a trust, contract, the ownership
of securities of any other corporation or entity or otherwise, is not
primarily exercised by a person or group of persons other than the holder
of the said securities rather than by such holder, in which case such
other person or group of persons shall be deemed to control such
corporation or entity for all purposes hereof, and provided that for
purposes hereof persons who act in concert in regard to the voting of
securities or otherwise in regard to the business and affairs of a
corporation or entity shall be considered a group of
persons;
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c)
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"Dollars"
or "$" means dollars of Canada unless specified
otherwise;
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d)
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"Fair
Market Value" of Product means the price for such Product quoted by the
London Metal Exchange or, if such Product is not traded on or quoted by
the London Metal Exchange, the price for such Product quoted by another
recognized public exchange on which such Product is
traded;
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e)
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"Net
Smelter Return" and "NSR" means the aggregate amount received from the
sale of Product to a third party less all charges made by the smelter or
refinery purchaser including, without limitation, charges for treatment,
sampling and penalties; provided that if any Product is sold to a party
that is a shareholder of the Corporation or is an Affiliate of the
Corporation or of any shareholder of the Corporation the amount received
for the sale of such Product shall be the Fair Market Value thereof
determined as of the date of the sale and the deductions for smelter
charges shall be the weighted average of the charges made by a
representative group of smelters or refineries which are capable of taking
and treating such Product and which offer terms which are not less
favourable to the seller than are reasonably available in the market; and
further provided that if the Corporation or any Affiliate of the
Corporation or of any shareholder of the Corporation take any Product in
kind or Product is delivered in kind pursuant to a contract or agreement
with a third party, the amount received and the smelter charges for such
Product shall be computed as of the date of delivery of such Product as
though such delivery constituted a sale of such Product by the Corporation
or to such Affiliate or such third party, as the case may be and the
provisions of the preceding proviso shall
apply;
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f)
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"Product"
means all ores, minerals, concentrates, metals, including precious metals
and by-products mined and/or produced from any of the
Property;
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g)
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"Property"
means the Orion Property which may be described as
follows:
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CLAIM NAME
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TITLE NO.
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AREA/HECTARES
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ORION
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205616
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527.5021
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h)
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"Royalty"
means the royalty described in Section
2.01.
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1.02
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Sections
and Headings
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The division of this Agreement into
Articles and Sections and insertions of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement. The terms "this Agreement", "hereof" "hereunder" and
similar expressions refer to this Royalty Agreement and not to any particular
Article, Section or other portion hereof and not to any agreement or instrument
supplemental or ancillary hereto. Unless something in the subject
matter or context is inconsistent therewith, references herein to Articles and
Sections are to Articles and Sections of this Agreement.
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1.03
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Number
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Words importing the singular number
only shall include the plural and vice versa, words importing the masculine
gender shall include the feminine and neuter genders and vice versa, and words
importing persons shall include individuals, partnerships, associations, trusts,
unincorporated organizations and corporations and vice versa.
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1.04
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Accounting
Principles
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Wherever in this Agreement reference is
made to generally accepted accounting principles, such reference shall be deemed
to be the generally accepted accounting principles from time to time approved by
the Canadian Institute of Chartered Accountants, or any successor institute,
applicable as at the date on which such calculation is made or required to be
made in accordance with generally accepted accounting
principals.
3
ARTICLE II: NET SMELTER
RETURN
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2.01
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Grant
of Royalty
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The Corporation does hereby grant to
Royalty Holder a royalty (the "Royalty") in the Property calculated as 3.5% of
the Net Smelter Return from the Property.
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2.02
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Payment
of Royalty and Statements
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The Corporation shall pay to Royalty
Holder the Royalty to which it is entitled for all Product delivered during each
quarter year within 15 days after the end of the quarter year to which the
payment relates. Each payment shall be accompanied by a statement
showing the calculation of the Net Smelter Return for the relevant quarter year
including particulars of the nature, quality and quantity of Product extracted,
produced, processed, sold and delivered and the computation of the Net Smelter
Return. Within 90 days after the end of each calendar year the
Corporation shall provide Royalty Holder with a statement of the Net Smelter
Return for such year duly certified by an outside auditor for the Corporation
accompanied by payment of any balance (the "Balance") owing for such
year. Any overpayment made in any year shall be deducted from the
payments due in any subsequent year. The Corporation shall deliver to
Royalty Holder within 90 days after the end of each calendar year, an annual
report setting out in reasonable detail forecasts for and results of the mining
operations, levels of production and deliveries and other relevant information
and shall notify Royalty Holder on a timely basis of any material change or
expected change in the mining operations, production levels or delivery
levels.
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2.03
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Access
to Books, Records and Data
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a)
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The
Corporation shall at all times keep and maintain full and complete books
and records of all matters affecting the mining operations, maintenance of
the Property and the computation of the Net Smelter
Return. Royalty Holder shall have the right, at its own risk
and expense, to have its representative or auditor inspect and audit the
books and records of the Corporation and make copies and extracts
thereof.
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b)
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The
Corporation shall provide information and data regularly to Royalty Holder
and in any event quarterly on all activities proposed to be conducted and
activities that have been conducted by the Corporation and the results
thereof. Such information and data reports shall be provided
for each quarter by the 30th day of the month next
following.
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c)
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The
Corporation shall permit Royalty Holder and its representatives to have
access, at Royalty Holder's cost and risk, to the Property and the data
and records of the Corporation.
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2.04
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Dealing
with Property
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The Corporation shall not sell, assign,
transfer or dispose of any of the Property or any interest therein without first
obtaining from the purchaser or assignee, as the case may be, a covenant and
agreement in favour of Royalty Holder to assume the Royalty and the obligations
of the Corporation to Royalty Holder under this Agreement and to deliver to
Royalty Holder a copy of such covenant and agreement which covenant and
agreement shall be in form and substance satisfactory to Royalty
Holder. The Corporation shall maintain all the Property in good
standing and shall not abandon any of the Property without the prior consent of
Royalty Holder, which consent will not be unreasonably withheld. The
Corporation shall comply with all requirements of the Republic of Mexico with
regard to operations on and maintenance of the Property. Royalty
Holder may register or record against the title to the Property this Agreement
or notice of its Royalty interest in the Property as provided in this Agreement
and the Corporation shall co-operate and assist Royalty Holder to effect such
registration including, without limitation, the execution of any documents or
instruments which may be required to evidence the Royalty interest of Royalty
Holder in the Property.
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2.05
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Buyback
of Royalty
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The
Corporation shall have the right at any time to purchase the Royalty for a value
of Cdn. $250,000 (the “Royalty Buyback Price”). For greater certainty
the right to purchase the Royalty provided for herein is at the sole option of
the Corporation. The Corporation has the option to pay the Royalty
Buyback Price to the Royalty Holder as follows:
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(a)
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delivery
to the Royalty Holder of a certified cheque or bank draft in the amount of
the Royalty Buyback Price; or
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(b)
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issuance
to the Royalty Holder of that number of fully paid and non-assessable
common shares (the "Shares") of the Corporation as such Shares shall be
constituted at the time of purchase which equals the Royalty Buyback Price
divided by the “Market Price” except that, in any event, the maximum
number of Shares which may be issued hereunder shall not exceed 500,000
shares. For the purpose of this Royalty, "Market Price" means
the weighted average trading price of the Shares on the TSX Venture
Exchange, or other published market if the Shares are not then listed on
the TSX Venture Exchange, for each of the business days on which there was
a closing price falling not more than twenty (20) business days
immediately prior to the date of notice of purchase of the
Royalty. In the event that the Shares trade on the TSX Venture
Exchange or such other published market for fewer than ten (10) of such
twenty (20) business days, the Market Price shall be based upon the simple
average of the following prices established for each of such twenty (20)
bussiness days:
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(i) the
average of the bid and ask prices for each day on which there was no trading;
and
(ii) the
weighted average trading price of the Shares for each day that there was
trading.
No
fractional certificates shall be issued and if any issuance of Shares in
consideration for purchase of the Royalty would result in the Royalty Holder
being entitled to receive a fraction of a Share, the Corporation shall issue the
next greater number of whole Shares.
ARTICLE
III: GENERAL
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3.01
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Entire
Agreement
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This agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and cancels and supersedes any prior understandings and agreements between the
parties hereto with respect to the subject matter hereof. There are
no representations, warranties, terms, conditions, undertakings or collateral
agreements, expressed, implied or statutory, between the parties other than as
expressly set forth in this Agreement.
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3.02
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Amendments
and Waivers
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No amendment to this Agreement shall be
valid or binding unless set forth in writing and duly executed by parties
hereto. No waiver of any breach of any provision of this Agreement
shall be effective or binding unless made in writing and signed by the party
purporting to give the same and, unless otherwise provided in the written
waiver, shall be limited to the specific breach waived.
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3.03
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Assignment
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Except as may be expressly provided in
this Agreement, neither party shall assign its respective rights or obligations
under this Agreement without prior written consent of the other.
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3.04
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Benefit
of the Agreement
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This Agreement shall enure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.
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3.05
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Further
Assurances
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Each of the parties shall execute and
deliver all such documents, deeds and instruments and give such further
assurance and do or cause to be done all such acts and things as may be
requested by the other party to fully and effectively implement the intention
and purpose of this Agreement.
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3.06
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Notices
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Any notice, request, demand, invoice or
other communication (the "Notice") required or permitted to be given hereunder
shall be in writing and may be delivered personally or by prepaid mail or by
telex or facsimile communication with return receipt requested addressed to a
party.
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In
the case of Royalty Holder:
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330
Bay Street
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Suite
830
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Toronto,
Ontario
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M5H
2S8
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Tel:
(416) 368-7041
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Fax:
(416) 368-2579
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In
the case of
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the
Corporation:
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Suite
600
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15
Toronto Street
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Toronto,
Ontario
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M5C
2E3
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Tel:
(416) 368-3332
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Fax: (416)
368-8957
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or at
such other address or to such other telex or facsimile number as a party may,
from time to time, advise the other party by notice. A notice shall
be deemed to be received if served personally on the date of delivery; if
mailed, five days following the date of mailing and if sent by telex or
facsimile communication, on the business day following the transmission
thereof.
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3.07
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Governing
Law
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This Agreement shall be governed by and
construed in accordance with the laws of the Province of Ontario,
Canada.
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3.08
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Arbitration
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Any dispute which may arise under this
Agreement or in the interpretation hereof which cannot be settled by the parties
shall be finally settled by arbitration which shall be conducted in accordance
with the Rules of Arbitration under the International Commercial Arbitration Act
of Ontario, Canada and if such rules do not apply the arbitration shall be
conducted in accordance with the Rules of Arbitration under the Arbitration Act
of Ontario, Canada. A party may submit a dispute to arbitration by
notice to the other party appointing an arbitrator and the two arbitrators
shall, within 30 days of the appointment of the second arbitrator, appoint a
third arbitrator and failing agreement on the appointment of the third
arbitrator, the third arbitrator shall be appointed by a Justice of the Ontario
Court (General Division). The arbitration shall be conducted in
English in Toronto, Ontario, Canada and the decision of a majority of the
arbitrators shall be final and binding on the parties. The submission
of the dispute to arbitration shall not delay or otherwise affect the
performance of this agreement which shall continue while the arbitration
proceeds.
IN WITNESS WHEREOF the parties
have executed this Agreement.
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NAYARIT
GOLD INC.
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Per:
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/s/ authorized signatory
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BELITUNG
LIMITED
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Per:
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/s/ authorized
signatory
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Belitung
Royalty
8