I can't believe they are thinking of acquiring more mineral rights instead of exploration and mining on the massive amount of land they already control.
We may exercise the initial option to acquire a thirty-three percent interest in the Mineral Rights by fulfilling the following conditions:
? Issuance of 500,000 shares of our common stock to Temasek within thirty
(30) days from the Effective Date (issued March 19, 2010);
? Payment of $250,000 to Temasek within twelve months of the Effective Date (paid on January 24, 2011); and
? Issuance of 1,000,000 shares of our common stock to Temasek or its designee within twelve months of the Effective Date (issued January 27, 2011).
In the first quarter of 2011 we exercised the initial thirty-three percent option and acquired a thirty-three percent interest in the Mineral Rights by paying to Temasek the balance of the consideration required to exercise the initial thirty-three percent option. Since the execution of the Option Agreement, we have satisfied the requirement to pay $250,000 by the issuance of 2,500,000 shares and warrants and have issued 1,500,000 shares of our common stock to Temasek in accordance with the terms of the Option Agreement.
We may exercise the second option to acquire the second, thirty-three percent interest in the Mineral Rights, resulting in the acquisition of a sixty-six percent interest in the Mineral Rights, by fulfilling the following conditions:
? Exercise of the initial option to acquire a thirty-three percent interest in the Mineral Rights;
? Payment of an additional $1,000,000 to Temasek within twenty-four months of the Effective Date (January 25, 2012); and
? Issuance of an additional 1,000,000 shares of our common stock to Temasek or its designee within twenty-four months from the Effective Date (January 25, 2012).
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We may exercise the third option to acquire the final, thirty-four percent interest in the Mineral Rights, resulting in the acquisition of a one-hundred percent interest in the Mineral Rights, by fulfilling the following conditions:
? Exercise of the first and second options to acquire an aggregate sixty-six percent interest in the Mineral Rights;
? Payment of an additional $2,000,000 to Temasek within thirty-six months of the Effective Date (January 25, 2013); and
? Issuance of an additional 2,000,000 shares of our common stock to Temasek or its designee within thirty-six months from the Effective Date (January 25, 2013).
Upon our acquisition of a 100% interest in the Mineral Rights, Temasek is entitled to an annual 2.5% net returns royalty. However, if we pay Temasek an additional $2,000,000 within ninety (90) days of its acquisition of a 100% interest in the Mineral Rights, Temasek will only be entitled to an annual 1.0% net returns royalty from us.
If we exercise the second, thirty-three percent option, resulting in the acquisition of a sixty-six percent interest in the Mineral Rights, but fail to exercise the final option and fail to acquire a 100% interest in the Mineral Rights, we and Temasek will form a joint venture in which we will be wholly responsible for developing a feasible mining project and all necessary facilities and Temasek shall retain a carried free interest in the mining rights. If we do not develop a feasible mining project within three years of the Effective Date, we will be required to pay Temasek an advance minimum mining royalty of $500,000 per year, which will be deducted from Temasek's net return royalty.
