Management Ltd. 2153-349
W Georgia St.
Vancouver. BC V6B
3V3 Tel 604 669-9000
Fax 604 899-8827
Gene Nellis, Hartmut Baitis and lnga Baitis
Management Ltd. and/or Nominee ("Magna")
the terms and conditions of this MOU, Magna shall have exclusive
proprietary marketing rights (the "Rights") for the "Pony" property located near Pony, Montana owned by
the Owners (the "Property") which is described in the attached Exhibit
A. In order to acquire and retain the
Rights, Magna shall pay the Owners the sum of $20,000 USD upon execution of
this MOU and the sum of $20,000
USD on the 5th day of each succeeding
month beginning on June 5, 2012 through October 5, 2012 for a total of six
payments which are non-refundable but which will be applied to the final payment
of the total consideration required to be paid under
section 1 below. Provided, however,
notwithstanding the foregoing, in the event that Magna obtains approval from the
Canadian stock exchange (the "43-101 Approval") prior to October 5, 2012, the first
payment described in section 1 below shall be due within ten (10) days
after receipt of the 43-101 Approval.
That Magna shall follow the
following parameters in the event of a "vend-in" to a public company:
That the total consideration is $3,000,000 USD in cash paid
in equal payments quarterly beginning on the earlier of November 5, 2012 or ten (10)
days after receipt of the 43-101 Approval (the "Closing Date") with
each quarterly payment in the amount of $250,000
USD which shall include interest at the rate imputed under IRS
regulations. The total consideration shall
be paid over a period of three years. Each payment is
non-refundable and allows Magna or its nominee the right to exercise possessory rights to the. Property
so long as the payments are timely made.
2. That the
Property shall be made available for
a 43-101 that may be immediately commenced after
the first $20,000 USD monthly payment is made.
shall not pay any broker or finder or other person a commission, finder's fee,
brokerage fee or any . similar
fee in connection with this MOU or
4. At least ten
(10) days prior to the Closing Date, Magna shall submit to Owners a
definitive Mining Lease and Option Agreement for Owners'
consideration. The parties shall enter into a definitive Mining Lease and
Option Agreement prior to the Closing Date.
5. All net revenues received
from a third party processor (such as Golden Sunlight Mine-Barrick) from processing
ore stockpiles, tailings and dumps from the Property shall be paid to Owners and applied
to the total consideration owed to Owners.
6. Owners retain a perpetual
royalty on production from the Property
of a 2% NSR (the "Royalty"). The Royalty also applies to production
on all unpatented claims that are located by Magna or its assigns at
any time that are located within one (1) mile of the exterior
boundaries of the Property.
Ltd. 2153-349 W Georgia St. Vancouver. BC V6B 3V3 Tel 604 669-9000 Fax 604 899-8827
That this Memorandum of Understanding
will be formalized at the option of the parties with their respective lawyers.
|/s/ Marlene Moen
|/s/ Gene Nellis
|/s/ Hartmut Baitis
|/s/ Inga Baitis
|/s/ Magna Management Ltd.
|Magna Management Ltd. and/or Associate