The Champion Mine
On November 2, 2012, the Company entered into a Contract for Purchase of the Champion Mine. The terms of the Contract provide that the Company:
a.
Issue to Jo Grant Mining Company, Inc. Twenty Four Million (24,000,000) four-year restricted shares of CGFIA Class A Common Stock on or before January 6, 2013.
b.
The Purchaser shall pay $3,000,000 to Jo Grant Mining, Inc. only for the purpose of consummating Seller’s Contract to Buy and Sell Real Estate (Land), between Jo Grant Mining, Inc. (as the Buyer), and a Texas limited liability company, (as the Seller), dated October 9, 2012, no later than January 6, 2013; and
c.
To pay to Jo Grant Mining Company, Inc a sum of $50,000, no later than January 6, 2013.
d.
Provide Jo Grant Mining Company for a period of 99 years a 5% Net Smelter Royalty (“NSR”), with a minimum of $10 per ton for the first 54,350 tons of ore produced from the Silver Wing Mining Claims listed in Exhibit A. The payment of the NSR shall be made not more than 45 days after the close of the month during which the payment is received from the smelter or buyer on which such NSR is calculated.
2
The Champion Mine consists of approximately 354 acres located in the San Juan Mountains at Silverton, Colorado. The Mine is located within the historically productive rim (i.e. over $700 million in gold, silver and base metals produced since 1874) of the Silverton Caldera complex at the southwestern extremity of the very prolific Colorado Mineral Belt. Several major narrow (i.e. average 3 to 6 feet wide with stopes up to 9,000 feet long and vertical extent of at least 2,500 feet) vein deposits each up to 10 million tons or more have previously operated profitably in the district.
The property has been intermittently developed and mined by numerous separate operators between 1876 and 1942, during which period an estimated 375,000 ounces of gold and 15,000,000 ounces of silver have been produced from a northwesterly trending and steeply south dipping vein system. Production was halted in 1942 as a result of the US Government's Gold Mine Closing Order, brought on by World War II.
Both contracts provide in part that:
Seller hereby agrees that for a period commencing on the issuance date of the Class A Common Stock that the Class A Common Stock issued pursuant to paragraph 3.1 of this Agreement and expiring four years from the purchase agreement date, he, she or it will not, directly or indirectly, issue, offer, agree or offer to sell, sell, grant an option for the purchase or sale of, transfer, pledge, assign, hypothecate, distribute or otherwise encumber or dispose of any securities of the Company issued pursuant to this Agreement, including common stock or options, rights, warrants or other securities underlying, convertible into, exchangeable or exercisable for or evidencing any right to purchase or subscribe for any common stock (whether or not beneficially owned by the undersigned), or any beneficial interest therein (collectively, the “Securities”).
AI
