Attached files
EXHIBIT 10.1
OPTION AGREEMENT
This Option Agreement dated August 8, 2012 by and between Development Resources
LLC, (hereinafter "DEVELOPMENT RESOURCES") a Utah LLC, and Nevada Gold Corp.
(hereinafter "NEVADA GOLD"), a Delaware corporation, wherein both companies are
also known as the "PARTIES", wherein the Parties agree to the following:
WHEREAS:
A. Development Resources has located and controls approximately 40,000 acres of
prime mineral lease properties all located in the Long Canyon Gold Trend in
north east Nevada for the purpose of exploration for gold, silver and other
mineralization deposits.
B. Nevada Gold desires to acquire an interest in four sections (2,560 acres),
consisting of approximately 120 BLM Mineral Lease Claims from Development
Resources to participate in the exploration and development of the potential
gold, silver and other mineral deposits in the Property. See Schedule 'A'
property map (the "Property").
C. Property Description
1) The Development Resources BLM mineral lease claims group for a total
of 120 Claims located on Sections 5, 6, 7 and 8 in Township 33N and
Range 64E with Meridian MDR&M
2) Development Resources also herein allows Nevada Gold an `option' to
acquire a similar interest in and to an additional 4 sections of 2,560
acres of approximately 120 claims held by Development Resources all
located adjacent to and adjoining the first 4 sections listed in #1
above for a period of one year from the execution of this Agreement.
D. Development Resources confirms that all references in this Agreement to
retained interest in the Property mean the net proceeds actually paid from the
sale of minerals mined and removed from the Property, after deduction of the
following:
(i) smelting costs, treatment charges and penalties including, but not
being limited to, metal losses, penalties for impurities and charges
for refining, selling and handling by the smelter, refinery or other
purchaser; provided, however, in the case of leaching operations or
other solution mining or beneficiation techniques, where the metal
being treated is precipitated or otherwise directly derived from such
leach solution, all processing and recovery costs incurred by the
Nevada Gold, beyond the point at which the metal being treated is in
solution, shall be considered as treatment charges;
(ii) costs of handling, transporting and insuring ores, minerals and other
materials or concentrates from the Property or from a concentrator,
whether situated on or off the Property, to a smelter, refinery or
other place of treatment; and
(iii)ad valorem taxes and taxes based upon production, but not income
taxes.
THEREFORE in consideration of the mutual covenants and agreements in this
Agreement, the parties agree as follows:
A. GRANT OF OPTION
1) On August 12th Nevada Gold shall notify Development Resources of
Nevada Gold's intent to `Exercise The Option' to secure the interest
in the Property or to discontinue `The Option' and relinquish their
rights to exercise `The Option' to secure the described interest in
the Property.
2) In the event Nevada Gold determines to `Exercise The Option' a cash
payment to Development Resources of $47,400 shall be made to
Development Resources no later than August 14th, 2012 for the full
county, state and BLM fees to keep the Property in good standing with
all agencies by the required filing date of September 1, 2012. This
payment will keep the Property of these first four sections in good
standing with all agencies until September 1, 2013. Development
resources shall itemize such required payments and provide receipts.
3) Upon the `Exercise of The Option' on August 12th 2012, Nevada Gold
will issue cash payments and shares of its common stock to Development
Resources and a work commitment under the following terms and
conditions:
3.1) Nevada Gold will provide to Development Resources a payment, on
terms, of $125,000 USD cash to be issued, as directed by
Development Resources, for a 51% controlling interest acquisition
in and to Sections 5, 6, 7 and 8 properties as follows:
a) $25,000 by September 15th 2012.
b) $25,000 by October 15th 2012
c) $75,000 by November 15th 2012
3.2) In addition, Nevada Gold will issue to Development Resources
three million (3,000,000) shares of its restricted common stock
as directed by Development Resources for this acquisition
interest. These shares shall be distributed by Nevada Gold to
Development Resources as directed by Development Resources within
60 days of `Exercising The Option' or not later than October 10th
2012.
3.3) Upon the full payment of cash and the full distribution of these
shares on the above timetable schedule, Nevada Gold will receive
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the full 51% interest free and clear in and to Sections 5, 6, 7
and 8 of the Property from Development Resources and Development
Resources will own a 49% interest in the Property. Nevada Gold
shall have the 'right' to register it's interest at it's
discretion.
3.4) Nevada Gold will also have the right to increase this interest to
an 80% interest by performing a 'work commitment' as specified in
Section B below.
B. WORK COMMITMENT AND INCREASE IN INTEREST OWNERSHIP
1) Nevada Gold agrees that Development Resources shall be in charge of
`all exploration programs' conducted on the Property at all times on a
'commercially acceptable basis' during the required 'work commitment'
phase. Nevada Gold shall become the operator after the work commitment
payments have been completed on the Property to both Parties'
satisfaction.
2) Additional funds, other than the `cash acquisitions funds' previous
described, will be provided by Nevada Gold to Development Resources
for the initial exploration evaluations, a geological 43-101 report
and the first phase drilling funds specified as following:
2.1 Nevada Gold shall provide to Development Resources a cash work
commitment for the exploration of the Property. Nevada Gold shall
pay to Development Resources $200,000 against an agreed to budget
within the first 180 days of `Exercising The Option', for the
Phase One Exploration Program on Sections 5, 6,7 and 8.
2.2 This work program will provide for the collection of surface rock
chip samples, sediment stream samples, mapping, IP/resistivity
testing and assay programs and any other geological programs to
provide an initial Geological Report of the Property and to
define potential drill targets on the Property. These funds will
also provide for a qualified 43-101 report on the Property.
2.3 Nevada Gold has the option to make this payment in advance of
this180 day period to perform this work to provide a 43-101
Report for Nevada Gold.
2.4 In addition, Nevada Gold agrees to pay to Development Resources a
minimum of $1,000,000 against an agreed to budget for the Phase
Two Exploration program for drilling on the drill targets to be
defined in the Phase One Exploration Report. This Phase Two Drill
Program can only begin after the Phase One Exploration Program is
completed. The Exploration work commitment schedule and costs
will be outlined in a separate report.
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3) Upon the full `work commitment payments' of $1,200,000, the interest
to Nevada Gold in these first four sections will increase to an 80%
interest with Development Resources holding the 20% interest in the
Property at all times.
4) The Parties agree that upon successful drill report assays of
acceptable gold, silver and base metal mineralization values on the
Property, additional funds will be, for the further drilling
exploration and development of the Property.
5) In a future option agreement, Nevada Gold can acquire a similar 51%
interest in and to 4 additional sections from Development Resources
all located adjoining to the first 4 sections acquired by Nevada Gold
on Spruce Ridge. This interest can also be increased to an 80%
interest with a work commitment on the property. A similar agreement
as to #1 - #4 in item (D) herein as to a cash payment, shares of stock
and a work commitment under mutual agreement between the Parties shall
be arranged at a future date.
C. FIELD OPERATIONS
Subject to E-1 the Parties agree that Development Resources shall be the
controlling operator for all exploration work to be contracted for on the
Property at all times. Development Resources will submit to Nevada Gold all data
for such exploration programs and costs on a reasonable timetable for such
reports. All samples collected in the Phase One Exploration Program and Phase
One Drill Program will be submitted to the ALS/Chemex Labs in Elko Nevada for
qualified tests.
D. CLAIM MAINTENANCE FEES
Nevada Gold shall be responsible for all of the payments required to keep the
Property in good standing with all agencies.
The first fees will be due and payable by Nevada Gold to Development Resources
by August 14th 2012 and estimated to be $47,400. This is an approximate figure
as the State of Nevada fees may change by the fall of 2012.
Development Resources shall be responsible to provide to Nevada Gold an
expenditure budget on a timely basis for the expected costs to maintain the
Property in good standing with all agencies at all times.
E. 20% DEVELOPMENT RESOURCES MAINTAINED INTERESTS
Development Resources shall hold a 20% interest in the Property at all times
after Nevada Gold has completed its work commitment outlined in Section B. The
Parties agree that Nevada Gold shall have a `first right of refusal' to acquire
some or all of this `Interest' under terms and conditions acceptable to both
Parties.
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F. THIRD PARTY INTERESTS
The Parties agree that the interest rights each Partly holds in the Property can
be sold, assigned, transferred or conveyed in whole or in part to any bona fide
third party as long as both Parties agree to such transfer. Each or either Party
to this Option Agreement shall have `first right of refusal' for 12 days to
acquire this interest prior to the transfer or sale of `any interest' to any
`third party'.
Each or either Party to this Option Agreement must be informed as to all of the
details for such a transfer and agree in writing to such a transfer to any
`third party' for the transfer of `any interest' in the Property.
Each Party will have the express right to negotiate for their interest transfer
to the same third party or to any `other third party' potential acquisition in
the event the transferring Party receives a `clearance' and written denial of
their `First Rights' to acquire this `interest' from the `other Party' to this
Option Agreement prior to any transfer.
G. FIRST RIGHT FOR TRANSFER OF INTERESTS
In the event either Party desires to sell their held interest in the Property,
the other Party shall have `first right of refusal' to acquire this interest on
terms and conditions agreeable between the Parties prior to the interest being
offered to third parties.
H. FEASIBILITY STUDY COSTS
In the event the property values from exploration work define a potential
mineable ore body which will require a major `feasibility study' including
environmental studies, the Parties agree it shall be the responsibility of
Nevada Gold to pay for all of the costs of such studies to perfect this
`feasibility study' to define a mining plan. It is also agreed between the
Parties that both Parties shall have full access to all data and information
supplied by such `feasibility study' at all times.
I. MUTUAL INTEREST
Both Parties agree to work together in a `mutual interest' for the exploration
and development of these mineral lease claims for the benefit of both Parties
and agree to complete and deliver all documents and agreements reasonably
necessary to complete same.
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J. PUBLIC DISCLOSURE
The Parties shall advise each other, in advance, of any public statement, which
is proposed to be made in respect to any transaction, provided that no Party
shall be prevented from making any disclosure statement, which is required to be
made by any regulatory policy. If upon the execution of this Agreement any Party
is required or wishes to issue a press release, each of the Parties shall have
the ability to review, comment and approve upon the content of such press
release prior to issuance.
K. TERMINATION
This Option Agreement shall terminate at 12:01 pm on the 15th (fifteenth) day
following any non payment by Nevada Gold to Development Resources for the
schedule of payments listed in Sections (B) and (D) above, and/or the delivery
of the stock required is not delivered on a timely basis or any alternative
payment acceptable to Development Resources has not been agreed to and paid to
Development Resources by Nevada Gold.
L. LEGAL FEES
Each Party shall bear its own legal costs and expenses with respect to this
transaction.
M. CONDUCT OF BUSINESS
From the date hereof until the date of termination, the Parties shall carry on
their respective businesses in the ordinary course and will not, without the
prior written consent of the other, enter into any material contracts or
obligations not in the ordinary course of business regards to these claims.
The Parties are not 'partners' in this agreement or 'venture'.
N. JURISDICTION
For purposes of any and all legal disputes or arbitration in regards to any
disputes the state of jurisdiction shall be the State or Nevada.
O. ENUREMENT
All rights and obligations of the Parties hereto will be binding upon and enure
to the benefit of and be enforceable by each of the Parties hereto and their
respective successors and permitted assigns.
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P. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the Parties relating to
the subject matter hereof and supersedes all prior agreements, understanding,
negotiations and discussions, whether oral or written, among the Parties.
EXECUTION- This Agreement may be validly executed by email or by facsimile and
in counterpart
IN WITNESS THEREOF each of the Parties have executed this Agreement effective
the date first above written.
Signed,
/s/ Lee Eastman
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Development Resources LLC
Lee Eastman Manager / Member
/s/ Merrill Moses
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Nevada Gold Corp.
Merrill Moses, President
