4. Joint Venture Agreements
On January 12, 2011, the Company entered
into a Joint Venture Agreement with Gravhaven Limited whereby the parties were to work together to develop the Nkwanta and the
Asuogya mining concessions located in Ghana that are owned by Netas Mining Company (Netas). Gravhaven Limited had
the right to acquire a 65% ownership interest in Netas pursuant to the terms of a Joint Venture Agreement dated April 5, 2010 it
entered into with Netas and Emmanuel Adolf Tagoe, a shareholder of Netas. Under the terms of its joint venture
agreement with Gravhaven, the Company was to contribute $2,000,000 towards the development of Netas concessions in exchange
for a 20% ownership in Netas.
To date, the Company has not made any
capital contributions to this joint venture.
On January 21, 2011, the Company entered
into a Joint Venture Agreement with Gregory Investments Corp. (Gregory) whereby the parties were to work together
to develop certain mining concessions located in Tanzania that are owned by Chisu Gold Mines Limited (Chisu), which
is owned 60% by Gregory. The Joint Venture Agreement provided that the Company was to pay Gregory an initial amount
of $100,000 and was to conduct due diligence within 90 days. Also, the Company was to contribute an additional $400,000
within 90 days, an additional $2,000,000 over 2 years (in exchange for a 20% ownership interest in Chisu), and an additional $3,000,000
within 3 years of the date of completion of the feasibility study (in exchange for an additional 30% ownership interest in Chisu). On
March 30, 2011, the Company decided not to proceed with this joint venture.
On January 24, 2011 and February 23,
2011, we made payments to Ivana Obrenic of $25,000 and $100,000, respectively, pursuant to this joint venture. Effective
February 28, 2011, we recorded a $125,000 provision for impairment of investment in Tanzania joint venture.
On May 25, 2011, the Company entered
into a Joint Venture Agreement with OverThrust Mining Corporation (OverThrust) whereby the parties were to work together
to develop certain mining properties known as the Brown1 and Brown2 properties, located in the Township of Schefferville, Quebec
(the Properties). The Joint Venture Agreement provided that the Company was to contribute a total of $750,000
to the joint venture, $250,000 per year for 3 years.
To date, the Company has not made any capital contributions
to this joint venture.