cant touch it LOL (ifLOL);The Bouse Gold property includes 360 acres of mining claims (18 lode claims) in the Plomosa Mining District, two miles west of the town of Bouse, in La Paz County, Arizona. The land is administered by the US Bureau of Land Management (BLM). It is a former Homestake Gold (Barrick) project which includes the historic Little Butte, Flat Fault and Arrastre Mines. There are numerous shafts, pits and dumps on the property. Reportedly, a majority of the Plomosa Mining District’s historic gold production came from the Company’s Little Butte Mine. At Bouse, a Mid-Tertiary system of epithermal mineralization was introduced into a stacked sequence of lithotectonic units that are located on the northern side of the Plomosa Detachment Fault. Complex epithermal gold, barite and fluorite mineralization is superimposed on earlier copper-specularite mineralization. Gold occurs in laterally extensive breccias and in steeply dipping amethystine-quartz veins.
Past drilling by Tenneco, US Borax and Homestake at Bouse found significant gold bearing intervals in both the breccias and high angle structures. Bouse Gold has copies of drill results for 50+ boreholes. Gold values were found at the Little Butte Mine and at the Arrastre Mine. Most significantly, gold was found in several drill-holes along a 2,500+ foot northwesterly trend from the four large tanks on the property northwest to the Flat Fault Mine. This area roughly coincides with the site of a previous 19 hole shallow drill campaign in the early 1980’s which reportedly outlined 5,000,000 tons of material ranging from .05 ounces to .3 ounces gold per ton. The Company’s plans had included the compilation of all existing exploration materials on the property, followed by additional geological work viewed as necessary or desirable to identify targets for renewed drilling at the property.
“South Copperstone”
The South Copperstone Gold Project is situated on 480 acres of mining claims (24 lode claims) located in the Moon Mountains Mining District, La Paz County, Arizona, about midway between the towns of Parker and Quartzsite. The land is administered by the US Department of Land Management (BLM). The Company’s claim block is immediately south of the Copperstone Mine, which it adjoins. Copperstone was the biggest Arizona gold discovery in more than 50 years. The Company acquired South Copperstone because of the potential for additional Copperstone ore bodies. The known Copperstone deposit (not owned by the Company) had a 500,000 ton open pit resource of .1 ounce per ton gold that was mined by Cyprus Gold in the 1980’s. A reported underground gold resource at Copperstone is presently being explored by another mining company. This neighboring project has a completed positive feasibility study, and production may begin as early as 2010.
The western portion of the Company’s South Copperstone claim block has exposed gold – bearing bedrock consisting of banded quartz latite flows intruded by granite. This unit crops out intermittently for over a mile all the way from a small hill adjoining Drill Hole No. 1 at the northern end of the property to the southern boundary of the Company’s mining claims.
Initial drilling by Callahan Mining at South Copperstone (including Drill Hole No. 1) found anomalous gold hosted by quartz and altered quartz latite. However, Callahan’s drilling was not deep enough to penetrate the mineralized breccia unit that hosts the gold resource at the Copperstone Mine to the north. Induced polarization (IP) geophysical work by Callahan found anomalous chargeability values in the southern portion of the Company’s claim block and on trend with the historic Valenzuela mine, which is located immediately west of the Company’s claims. The Company had intended to follow up with a full IP grid in order to locate additional drill targets.
The Bouse Gold, Inc. property is comprised of 18 unpatented lode mining claims. The mining claims cover the “Little Butte Mine”, the “Arrastre Mine” and the “Flat Fault Mine”. The “Little Butte” Claims were located in September 2004. The “Arrastre” and the “Flat Fault” Claims were located in 2004 and relocated in September 2009. Some additional in-fill claims were also located in September 2009. The 18 Bouse Gold, Inc. claims were intended to cover all unpatented ground where past drill holes by Homestake and others had encountered gold mineralization.
Bouse Gold Mining and Exploration Project:- Dr Wayne P Colliston prepared this report, in August, 2004 on the 1,300 acre Bouse gold (silver ? copper) property situated in the La Paz area of western Arizona, USA, near the California border. At the gold price of approximately US$400/oz (in August 2004), this provides a value estimate for the deposit in the range of up to $600 million. This estimated gold resource is for the little Butte area only, and does not include any potential from the remainder of the property. At the current Gold price of circa US$800/oz, the revised and updated valuation report , will be significantly higher.
So based on this valuation, today the value should be close to a billion $ with the price of gold at + $1100.00.
BACKGROUND ON "BOUSE" AND "SOUTH COPPERSTONE":-
"Bouse" and "South Copperstone" are both located in gold-rich La Paz County, Arizona, and represent a class of deposits known as detachment fault deposits. This type of deposit is prevalent on both sides of the Colorado River in both Arizona and California, and mineable resource is typically in the 500,000 ounces to 5 million ounces gold range, with a grade of .05 to .2 ounces of gold per ton.
The detachment fault type of deposit was first recognized in the 1980’s with the discovery of the Copperstone gold deposit, from which Cyprus Minerals mined 500,000 ounces of gold by open pit. Another mining company is presently exploring the remaining underground resource (which is believed to exceed 400,000 ounces) and is assessing feasibility of reopening the mine. The nearby Mesquite deposit, located in Imperial County, California, is also viewed as a detachment fault deposit. Mesquite is several times the size of the Copperstone Deposit and was mined for many years by Newmont; Mesquite is presently operated by Western Goldfields.
The South Copperstone property is a large contiguous claim block immediately south of the Copperstone Mine. Past drilling has identified gold in quartz latite, as well as a geophysical anomaly in the center of the South Copperstone Claim block. Further geophysical (including magnetic) work is planned to develop future drill targets.
The Bouse property was previously explored by Homestake Gold (now part of Barrick), which found gold mineralization throughout the property. Drill data is available for approximately 80 Homestake drill holes. Previous work by another mining company identified a 500,000 ton resource along two high angle faults that were not extensively drilled by Homestake. Exploration plans include integration of results from the previous exploration and new geophysical (including magnetic) work to identify additional drill targets, particularly along the high angle structures, with a view toward increasing the resource.
from ffgo 8k look it up///////
Bouse Property, a Mid-Tertiary system of epithermal mineralization was introduced into a stacked sequence of lithotectonic units that are located on the northern side of the Plomosa Detachment Fault. Complex epithermal gold, barite and fluorite mineralization is superimposed on earlier copper-specularite mineralization. Gold occurs in laterally extensive breccias and in steeply dipping amethystine-quartz veins. Past district production (over 2/3 of which was from the Little Butte Mine) averaged over .4 oz/T gold. Strong likelihood of a major detachment fault associated gold/copper deposit, similar to the proven and mined Copperstone and Mesquite deposits. Past drilling by Tenneco, U.S. Borax and Homestake found significant gold bearing intervals in both the breccias and high angle structures.
Project Summary
The Bouse Project involves an important new type of Arizona gold deposit, called a "detachment fault" deposit. Detachment fault deposits were first recognized as a separate form of gold deposit in the 1980's. Enclosed within this pack is an article by noted Arizona geologist Joe Wilkins Sr., which describes the leading theory about how they formed. The best example of an Arizona detachment gold deposit is Copperstone, which is about 20 miles from Bouse. It was the biggest gold discovery in Arizona in at least 50 years. Cyprus Gold profitably mined the 500,000 oz open pit resource during the 1980's. American Bonanza is presently doing underground drilling. It looks like the underground high grade resource is even larger. Enclosed are some materials on the Copperstone for your general information on its history and American Bonanza's present activities there, which are the major news in Arizona gold exploration at this time. Unlike Copperstone, Bouse is an historic gold producer. 5,000 ounces were produced from high grade ore early in the 20th century. It was also worked as an underground copper mine. Most of this production was from the Little Butte Mine, which is the centrepiece of our land position.
Starting in the 1980's there has been a lot of exploration work at Bouse. Per Arizona Department of Mines and Mineral Resources records, prior to 1983 a 16 hole drill program blocked out 5,000,000 tons of material ranging from .05 to .30 ounces gold per ton. These drill-holes were in the immediate vicinity of the Little Butte underground mine and the Little Butte open pit. The drill hole locations are indicated as drill holes of an "Unknown" exploration company on the enclosed Homestake Mining map.
Next, Fischer Watt exploration, a well regarded company based in Butte, Montana, leased the Little Butte mine. They estimated the resource more conservatively, at 2,000,000 tons of .07 ounce per ton rock. They drilled exactly one 290 foot hole near the Little Butte underground mine and encountered 7 gold bearing intervals.
Tenneco then took over the project. They drilled 17 holes and found gold bearing intervals in 10 of them. Not only did Tenneco find gold at the Little Butte underground mine and open pit, but they also found gold at the Arrastre Mine, the Blue Slate Mine and the Flat Fault Mine, all of which are included in our project.
During 1984 U.S. Borax drilled 18 holes in the pediment to the west of the historic mining district along the inferred course of the Plomosa detachment fault. Three of these holes met with success. We have a lot of material from this project, and it is included for your review. These are the packets and maps from Corn & Ahearn and PCMI. While we have not viewed this area as a high priority, some of it has been included in our present land position.
Starting in 1987, Homestake Mining leased the central part of the district (called the Brindle claims -- these are the core of our present land position) and acquired an option to purchase the smaller patented group to the west called the Paradise Mine, which is not included in our project. Homestake drilled over 50 holes over a 4 year period. They found significant gold mineralization everywhere that Tenneco did at the Little Butte mine and open pit, the Blue Slate Mine and the Flat Fault Mine. They also put down seven drill holes in the vicinity of the detachment fault. Enclosed is a pack which we obtained from Barrick which includes all of Homestake's drill logs and assay results. The map at the rear section entitled "Alteration, Mineralization and Drill Holes" includes all of the drill information for the previous work by Fischer Watt, US Borax and Tenneco. What does the future hold for this gold deposit? While a gold deposit this big will take a substantial amount of work to turn into a large proven reserve, this should be a simple and straight forward effort if the drill programs focus on the core deposit, rather than concentrating on peripheral areas. The core deposit may be visualized as an inverted "V" with the Little Butte underground mine near the apex, the Little Butte open pit, Flat Fault mine and Blue Slate mine along the left leg, and the Airfield deposit at the bottom of the right leg. If, as we believe, the entire area of the inverted "V" turns out to be a mineable open pit resource this would be a far larger gold deposit than the 1,000,000 +/- oz Copperstone, and may be closer to the 10,000,000 oz size of the Mesquite mine, which is another detachment fault deposit in California.
Another high priority area is the granite block located within the confines of the inverted "V." There is high grade gold mineralization at the Arrastre Mine, which is near the southern end of the granite block about 4,000 feet south of the Little Butte underground mine. Homestake did not even bother to map this area in detail, which is surprising given the extensive surface shows of copper oxide and the abundant quartz.
Also included are the two major geological reports on the district. (1) The Jemmett report, from 1966, is included because it gives some good descriptions of the individual mines. While Jemmett is not very enthusiastic about the mineral possibilities of the district, his report predates the discovery of the detachment fault model of gold mineralization, which turned Western Arizona into a "hot" area for mineral exploration. (2) The second report by Duncan was funded by Homestake. An important conclusion (p.37) is that the high gold and copper values are in a NE/SW band corresponding to the left leg of the inverted "V" referred to above.
Included with the projects is the Burnt Well property, also located in La Paz County. We have acquired about 640 acres along the Bullard detachment fault in the vicinity of the Silver Lining Mine, and plan to add at least another 480 acres. While Cominco drilled the Bullard deposit to the east along this fault, Burnt Well escaped the attention of the majors during the 1980's gold exploration boom. A limited amount of material is included from the Arizona Geological Survey and the Arizona Department of Mines and Mineral Resources. Preliminary surface sampling shows similar grade (approximately .1 oz gold per ton) as the open pit resource at Copperstone. There is no recorded production for this district. However, from the size of the dumps, it is obvious that there must have been substantial production in the past.
Gold in goethite Origin: Bouse, La Paz County, Arizona, U.S.A. Sample size: 5.9 x 3.9 x 2.5 cm
bouse; The core deposit may be visualized as an inverted "V" with the Little Butte underground mine near the apex, the Little Butte open pit, Flat Fault mine and Blue Slate mine along the left leg, and the Airfield deposit at the bottom of the right leg. If, as we believe, the entire area of the inverted "V" turns out to be a mineable open pit resource this would be a far larger gold deposit than the 1,000,000 +/- oz Copperstone, and may be closer to the 10,000,000 oz size of the Mesquite mine, which is another detachment fault deposit in California.http://findarticles.com/p/articles/mi_m0EIN/is_2007_Dec_19/ai_n27479746/pg_3/
Dr Colliston has an impressive set of credentials and an internationally recognized PhD degree in geology from the University of the Free State (UFS) in 1990.He is a fellow of the Geological Society of London; he is also a registered Pr Sci Nat with SACNAS (South African Council for Natural Professions; registered since 1983), which qualifies him as a Competent Person and enables him to be the author of Competent Persons's Reports for evaluation and investment purposes.
Dr Colliston is currently employed as a senior lecturer in the Geology Department of the University of the Free State in South Africa and was also an appointed Research Associate at the Royal School of Mines, Imperial College of Science, University of London.He has been involved in the study, teaching, research, application and consulting in the geological sciences for the past 24 years.He is the author of 146 scientific contributions and has addressed geological audiences at conferences both nationally and internationally. http://www.zoominfo.com/people/Colliston_Wayne_547597192.aspx
His professional experience in the geological field is primarily in South Africa, Namibia, United Kingdom, Australia, Brazil, Israel, Western and Southern Europe, Turkey and the Southwestern USA.Part of this experience also covers Exploration Geology in base metals, gold and diamonds and includes remote sensing applications and the interpretation of satellite imagery and aerial photo analysis, hydrogeology, geophysics, geochemistry, and geostatistics.
Dr Colliston has specialised knowledge in the fields of structural, metamorphic and economic- geology, the tectonics and structure of gneiss terrains, fold and thrust belts, geological mapping, geological synthesis, and in the economic evaluation of mineral projects.
Research and consulting work has covered diverse topics and areas: ... Dr Colliston has consulted for a number of companies e.g. Anglo American, Anglo Vaal, Gold Fields of SA, Randgold Expl., Rio Tinto, Falconbridge, Billiton, Harmony Gold, KDMC Ltd, Tradeline Namibia (Pty) LTD, the Institute of Groundwater Studies, Water Research Commission, and has research collaboration with institutes such as the Royal School of Mines, University of the Witwatersrand, University of Pretoria and University of Vienna. ... Dr Colliston is a Director of Dwyka Diamonds (Pty) Limited, a company established to explore for new diamond fields in South Africa.He is also a Director of Dwyka Investments (Pty) Limited, a company established to develop diamond projects in South Africa, and a Director of Haraambe Mining (Pty) Limited, a South African Black Empowerment Mining Company established to develop various Mining Projects in that country.
fromsep 2004 THERE'S GOLD OUT THERE
Bouse - West Africa Gold is continuing to re-evaluate their mining properties in western Arizona. They recently announced the revaluation of the Mockingbird project in Mohave County. On Tuesday, they released their findings at the Bouse property in La Paz County. Geologist Dr. Wayne Colliston identified a “detachment fault” at the Bouse property similar to the one found recently on the Mockingbird project. The “detachment fault” style of deposit is best seen at Copperstone, the biggest gold discovery in Arizona in the past 50 years. A value estimate for the gold deposit is in the range of up to $600 million, and that does not include any silver or copper also found on the Bouse property. http://cache.zoominfo.com/CachedPage/?archive_id=0&page_id=859705108&page_url=%2f%2fwww.goldenshores.net%2fgsnewsarc%2fgsnews40910.html&page_last_updated=12%2f21%2f2005+5%3a14%3a33+AM&firstName=Wayne&lastName=Colliston
I am not sure as to your question? Western Diversified Mining Resources, Inc. is wholly owned by Fortress Financial Group, Inc. and it holds the Company’s interests in both the “Bouse” and the “South Copperstone” Gold Properties.
Pete Bezzano
The stockholding in the “Bouse” Gold Exploration Project as At November 10, 2009:
Eligible Dividend Recipients as at November 7, 2005: 899,967,718 40.91 % Searchlight Exploration, LLC: 219,997,800 9.99 % Fortress Financial Group, Inc.*: 510,923,545 23.22 % Other Stockholders: (Note 1) 569,110,937 25.88 %
TOTAL ISSUED: 2,200,000,000
NOTE 1: The Company transferred an amount of US$302,607,268 (Three hundred and two million six hundred and seven thousand two hundred and sixty eight dollars) representing 519,497,456 (Five hundred and nineteen million four hundred and ninety seven thousand four hundred and fifty six) shares in the “Bouse” Gold Exploration Property to repurchase shares of the Company’s Common Stock.
The stockholding in the “South Copperstone” Gold Exploration Project as At November 10, 2009:
Eligible Dividend Recipients as at December 2, 2005: 899,581,199 40.89 % Searchlight Exploration, LLC: 219,997,800 9.99 % Fortress Financial Group, Inc.*: 1,030,421,001 46.84 % Other Stockholders: 50,000,000 2.28 %
TOTAL ISSUED: 2,200,000,000
*Fortress Financial Group, Inc. holds its interests through its wholly owned Investment Corporation, Western Diversified Mining Resources, Inc
SOUTH COPPERSTONE
PROJECT ACQUISITION AGREEMENT
BETWEEN
COPPERSTONE MINING LIMITED
AND
SEARCHLIGHT EXPLORATION, LLC.
Dated as of October 7, 2005
PROJECT ACQUISITION AGREEMENT
This PROJECT ACQUISITION AGREEMENT (this "Agreement"), dated as of October 7, 2005 is made by and between Copperstone Mining Limited, a company incorporated in the United Kingdom and Wales having offices at c/0 St James Resource Management Limited, 16 Hanover Square, London, W1S 1HT, United Kingdom ("Company") and Searchlight Exploration LLC, an Arizona limited liability company with offices at 9212 Empire Rock Street., Las Vegas, NV 89143 U.S.A. ("Searchlight" or "Claimholder") .
1. Grant of Lease, Purchase Option and 75% Net Profits Interest. In consideration for the sum of US$10,000 to be paid by Company to Claimholder on or before October 31, 2005 (the "Initial Payment"), the further payments of $10,000 to be paid by Company to Claim holder quarterly during the Lease Term ("Quarterly Payments"), in as many shares in Copperstone Mining, Inc. representing 9.99% of the Company's capital stock on a fully diluted basis) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Claimholder hereby leases the unpatented placer and / or lode mining claims known as the South Copperstone Project and more particularly described in Exhibit A hereto (the "Property") to Company (the "Lease") and grants to Company a 75% net profits interest and an exclusive irrevocable option (the "Purchase Option") to purchase the Property, each on the terms and conditions set forth below. Provided the Initial Payment has been made, the term of the Lease shall commence on October 7, 2005 and, provided that all Quarterly Payments are made, shall run to and including September 30, 2008 (the "initial term"), with the right of Company at its option to extend the Lease for up to three (3) additional three year terms on the same terms and conditions to and including September 30, 2017 (an "extended term") (the initial and extended terms being hereinafter referred to as the "Lease Term"). Company shall have the right to sooner terminate the Lease pursuant to Section 6 and, subject to Section 15 below, to exercise the Purchase Option pursuant to Section 7 at any time during the Lease Term. The Purchase Option may be exercised by Company only upon the delivery to Claimholder of each of (a) a "positive" feasibility study for the Property, (b) corporate resolution of the Company (and any parent company thereof) evidencing an affirmative production decision for the Property and (c) evidence satisfactory to Claimholder that Company has obtained the financing necessary to develop and operate the Property. Upon transfer of title pursuant to exercise of the Purchase Option, the Lease shall terminate.
2. Title to the Property.
A. Claimholder hereby represents and warrants to Company as follows:
(i) Claimholder owns or is able to convey a full and undivided interest in and to each of the unpatented mining claims included in the Property as of the date hereof;
(ii) To the best of the knowledge, information and belief of Claimholder, all such claims have been validly located and maintained in accordance with all applicable laws and regulations;
(iii) All such claims are free and clear of all liens, claims, and encumbrances whatsoever, subject only to the paramount interest of the United States of America and / or the State of Arizona; all taxes, if any, which may be or which may become a lien upon the Property, as of the date hereof, have been paid;
(iv) The Property is not in any manner encumbered as a result of any conduct or activity of Claimholder;
(vi) Having secured the approval of its sole member to the terms and conditions of this Agreement, Claimholder has full and complete authority to execute this Agreement and to grant the rights herein conferred on Company; and
(vii) Claimholder has no knowledge that any of the mining claims comprising the Property are invalid, or that, except for any patented ground lying within the Project Area, there are other senior mining claims in conflict with any of such claims. The foregoing notwithstanding, it is acknowledged and agreed that it is not possible to determine whether there are conflicting unpatented claims for a period of 90 days from the date of claim location as any conflicting claimants have 90 days in which to file their claim notices with the BLM. In the event that senior conflicting unpatented claims are filed within 90 days of claim location, Claimholder shall use its reasonable efforts to (1) acquire such claims and incorporate them in the project under this agreement, (2) replace such claims with additional claims of similar acreage within the Project Area or (3) replace the entire Project with another project reasonably acceptable to Company.
3. Lease Payments and Other Payments.
A. During the Lease Term, Company shall make the following payments to Claimholder, which shall constitute a portion of the purchase price for the Property:
(i) The Initial Payment of $10,000, on or before October 31, 2005; and
(ii) The Quarterly Payments each in the amount of $10,000, payable on January 1, April 1, July 1 and October 1 of each year during the Lease Term, commencing with January 1, 2006.
B. Following Company's exercise of the Purchase Option under Section 7 and resulting termination of the Lease as provided in Section 1, Company shall pay to Claimholder (i) the Claimholder's net profits interest (NPI) under Section 8A and (ii) the Claimholder's net smelter return (NSR) royalty under Section 8B. Company's obligation to make payment under Section 8A and Section 8B shall cease to accrue on the first to occur of (i) completion by Company of mining operations, residual leaching and reclamation in the Project Area or (ii) other decision of Company to terminate operations in the Project Area and, if Claimholder so desires, to reconvey the property to Claimholder once reclamation and other environmental obligations have been satisfied, although this provision shall not relieve Company from its obligation to make payments that accrued prior to such occurrence.
C. All payments shall be paid in U $dollars in immediately available funds. D. Company hereby represents and warrants to Claimholder that it has adequate financial resources to make the payments required under this Section 3, as well as the Work Expenditures required under Section 4. E. Company shall also issue within 30 business days of execution of this Agreement to Searchlight shares of Copperstone Mining, Inc.'s common stock (representing 9.99% of the Company's capital stock, fully diluted. For no additional consideration, the Company shall, from time to time, issue to Searchlight such additional shares as shall be necessary to maintain Searchlight's 9.99% interest in the Company). The shares shall be validly issued, fully paid and nonassessable. The shares shall be restricted and eligible for resale pursuant to Rule 144 in accordance with said rule. Company, following its initial public offering, shall use its best efforts to comply with its reporting obligations under applicable securities law so as to enable Searchlight to utilize Rule 144 for resale of the shares following the applicable holding period.
4. Work Expenditures. During the Lease Term, until terminated by Company under Section 6 or until the Purchase Option is exercised under Section 7, Company shall make work expenditures ("Work Expenditures") on or for the benefit of the Property in the following amounts:
A. The sum of $100,000 on or before December 31, 2006. This is a firm commitment. If Company fails to perform the total amount of such Work Expenditures, Company shall pay Claimholder the deficiency in immediately available funds.
B. The sum of $100,000 on or before September 30, 2007.
C. The sum of $100,000 on or before September 30 of each year thereafter.
Any excess of Work Expenditures in any year shall be carried forward to the succeeding year. If Work Expenditures in any year after the period ended December 31, 2006 are deficient and Company desires to maintain the Lease and Purchase Option in effect, Company shall pay Claimholder in immediately available funds a sum equal to the deficiency in lieu of the Work Expenditure shortfall. For purposes of this Agreement, "Work Expenditures" is defined as sums spent or incurred by Company directly on the Property for exploration and development of the Property, including drilling, geochemical sampling, geophysical or seismic survey, assaying, and ore reserve calculation; metallurgical and engineering analyses; environmental and permitting analyses and activities; feasibility studies; and financing investigations; plus 5% of such direct costs in lieu of headquarters overhead and general and administrative expenditures.
5. Rights and Obligations During Lease Term. The parties shall have the following rights and obligations during the Lease Term:
A. Access to Property and Provision of Data. Company shall have full access to the Property to conduct such investigations and examinations as Company may deem desirable and to all information and data in Claimholder's possession and control pertaining to the Property necessary or desirable to enable Company to fully evaluate the Property and its commercial feasibility. Claimholder agrees to cooperate fully with Company in its investigation.
B. Activities by Company. Company shall have exclusive possession of the Property, subject to the paramount rights of the United States and / or the State of Arizona with respect to unpatented mining claims included in the Property, and shall have the exclusive right to conduct such exploration, evaluation, and development activities on the Property (including bulk sampling) as Company may desire. Claimholder shall provide at Company's expense all reasonable assistance to Company for the obtaining of any permits, licenses, and third party consents needed for such work. Company shall also have the right to contact the pertinent federal, state, and local permitting agencies, and to negotiate with such agencies.
C. Maintenance of Property. Company shall maintain in good standing all unpatented mining claims that comprise the Property. Company shall, as required by the Federal Government with respect to unpatented mining claims on federal lands, perform required assessment work or timely pay all claim maintenance or rental fees and all required property taxes, and shall timely make all filings and recordings in the appropriate governmental offices required in connection with such payments. In the event Claimholder makes any such payment (although it shall have no obligation to do so), Company shall promptly reimburse Claimholder for payment of such holding costs upon receipt by Company of evidence of such payment. Company shall have the right to amend or relocate in the name(s) of Claimholder any unpatented mining claims included in the Property, to locate different types of claims on ground covered by existing claims, and to locate any fractions.
D. Sharing of Data. During each year of the Lease Term, Company will share with Claimholder all information (including interpretive and non-interpretive data, subject to typical disclaimers regarding interpretive data and statements that Claimholder may not rely upon the same) obtained from the exploration, evaluation, and development activities pertaining to the Property, including providing a copy of any geological and other principal reports relating to the Property, and will report to Claimholder in writing at least quarterly regarding the progress of the exploration and evaluation work and Work Expenditures made during the period.
E. Claimholder Access to Property. Claimholder may have access to the Property at its sole risk on reasonable notice, and shall be entitled to conduct tours of the Property for investor relations and financing activities. Claimholder's exercise of its access rights shall not interfere in any way with Company's operations on the Property, which shall take precedence in the event of any conflict.
F. Conduct of Operations by Company at the Property. All of the exploration, development, mining, milling and related work and any other activities which may be performed by Company or its agents or contractors hereunder shall be performed in accordance with all of the terms and conditions of this Agreement and good mining practices, but the timing, nature, manner and extent of any exploration, development or any other operations or activities hereunder shall be in the sole discretion of Company, and there shall be no implied covenant to begin or continue any such operations or activities.
G. Indemnity. Except for damages sustained by Claimholder while on the Property pursuant to Section 5F., Company agrees to indemnify and hold Claimholder and its affiliates, and their respective, officers, directors, employees, agents, members, partners and agents harmless from and against any loss, liability, cost, expense or damage (including reasonable attorney's fees) that may be incurred for injury to or death of persons or damage to property, or otherwise, as a result of Company or its agents or contractors conducting any operations on or in connection with the Property.
H. Insurance. Company agrees to carry such insurance, covering all persons working at or on the Property for Company, as will fully comply with the requirements of the statutes of the State of Arizona pertaining to worker's compensation and occupational disease and disabilities as are now in force or as may be hereafter amended or enacted. In addition, Company agrees to carry liability insurance with respect to its operations at the Property in reasonable amounts in accordance with accepted industry practices. Company agrees that Claimholder shall be named as an additional insured on all such policies, and agrees to forward to Claimholder certificates of such insurance policies not later than 10 days prior to the date that Company commences any such activities on the Property. Company shall have no right to commence any such activities until such certificates are delivered to Claimholder.
I. Compliance with Laws. Company agrees to conduct and perform all of its operations at the Property during the term of this Agreement in compliance with all valid and applicable federal, state and local laws, rules and regulations, including without limitation laws, rules and regulations pertaining to environmental protection, human health and safety, social security, unemployment compensation, wages and hours and conditions of labor, and Company shall indemnify and hold Claimholder harmless from and against any loss, liability, cost, expense or damage (including reasonable attorney's fees) arising from or related to Company's failure to comply with said laws.
J. Taxes. During the term of this Agreement, Company shall be responsible for payment of all taxes levied or assessed upon or against the Property, as well as any facilities or improvements located thereon.
K. Liens and Encumbrances. Company shall keep title to the Property free and clear of all liens and encumbrances resulting from its operations hereunder; provided, however, that Company may refuse to pay any claim asserted against it which it disputes in good faith. At its sole cost and expense, Company shall contest any suit, demand or action commenced to enforce such a claim and, if the suit, demand or action is decided by a court or other authority of ultimate and final jurisdiction against Company or the Property, Company shall promptly pay the judgment and shall post any bond and take all other action necessary to prevent any sale or loss of the Property or any part thereof. Company shall permit Claimholder to post Notices of Non-Responsibility at the collars of any shafts and in other locations required under Arizona law in order to prevent certain liens from attaching to the Property, and Company shall take all actions reasonably necessary to keep such notices posted in these locations.
L. Reclamation and Remediation. Company shall reclaim the Property, to the extent disturbed by Company during the term of this Agreement, in accordance with and as required by applicable federal, state and local laws, rules and regulations.
6. Right to Terminate.
A. Termination.
(1) By the Company. Company may terminate this Agreement or the Lease at any time at its sole option by giving Claimholder 30 days' prior written notice, upon which all rights and obligations of the parties under this Agreement shall cease, except for any limitation of liability, indemnification, and confidentiality provisions set forth herein; provided, however, that (i) if Company terminates this Agreement after April 1 of any year, Company agrees to pay governmental fees and make all governmental filings necessary to maintain the unpatented mining claims for the assessment year commencing on September 1 next following such notice of termination and (ii) if Company terminates this Agreement or the Lease on or before April 30, 2006, Company shall remain obligated to comply with Section 4A.
(2) By Claimholder. In the event that (i) Company shall fail to pay any of its monetary obligations under this Agreement when due and shall not pay same within 14 days following notice thereof by Claimholder or (ii) Company shall fail to perform any of its nonmonetary obligations under this Agreement and shall not cure its failure within 30 days following notice thereof by Claimholder (in each case an "uncured default"), Claimholder may terminate this Agreement upon three days written notice to Company. Termination pursuant to this Section 6.A.(2) shall not excuse Company from any of its obligations which accrued prior to the date of termination, and Claimholder shall retain all of its rights in law or in equity with respect thereto.
B. Return of Data. As soon as practicable upon the termination of this Agreement, Company shall return to Claimholder copies of all title, environmental, metallurgical, geological, geophysical, milling and other data concerning the Property and furnished by Claimholder or previous owners of the Property or their agents or consultants to Company. At such time, Company shall also make available to Claimholder for examination and copying all survey maps, drill hole logs, sample locations and assays developed by Company with respect to the Property during the term of this Agreement and not previously made available to Claimholder and shall transfer custody to Claimholder of all drill cores.
C. Release. Upon termination of this Agreement, Company will promptly execute and deliver to Claimholder appropriate documents of conveyance releasing and conveying its interest in the Property to Claimholder.
D. Surrender of Possession and Removal of Equipment. Upon termination of this Agreement, Company shall surrender possession of the Property, subject to the condition that Company shall have the right at any time within one year (or such longer period as Company can demonstrate is reasonably necessary) after such surrender or termination of this Agreement to (i) complete any reclamation obligations required of Company under this Agreement or by governmental law or regulation and (ii) remove all of its tools, equipment, machinery, supplies, fixtures, buildings, structures and other property erected or placed on such property by Company, excepting only timber, chutes and ladders in place for underground entry and support. Title to such property not removed within the time period set forth above shall, at the election of Claimholder, pass to Claimholder. Alternatively, at the end of the time period set forth above, Claimholder may remove any such property from the Property and dispose of same in a commercially reasonable manner, all at the expense of Company.
7. Exercise of Purchase Option. If Company decides to exercise the Purchase Option, upon each of (a) the completion of a "positive" feasibility study for the Property, (b) the making of an affirmative production decision for the Property by Company's and any parent corporation's Boards of Directors and (c) presentation to Claimholder of evidence satisfactory to Claimholder that Company has obtained the financing necessary to develop and operate the Property, Company shall give Claimholder notice thereof. Within 10 days after such notice, Claimholder shall deliver to Company a special warranty deed in form satisfactory to Company transferring title to a 100% interest in the Property, and reserving to Claimholder the net profits interest ("NPI") in production from the Property and the net smelter returns royalty ("NSR"), each as set forth in Section 8 below, and Company shall deliver to Claimholder the sum of $10.00.
8. Claimholder NPI and NSR Royalty.
A. Claimholder NPI. Upon completion of the payments under Section 3.A., Company shall have a 75% NPI in the Property and Claimholder shall have a 25% NPI in the Property. Upon termination of this Lease (other than as a result of Company's exercise of its Purchase Option, Company's NPI shall be reduced permanently to zero (-0-%) and Claimholder's shall be increased permanently to 100%. For purposes of Claimholder's and Company's respective NPI, "Net Profits" shall be calculated pursuant to generally accepted accounting principles in the United States of America, provided, however, that the calculation of net profits shall not include any benefit or loss from price hedging and price protection arrangements conducted by or on behalf of Company and, provided, further, that Company shall be entitled to deduct from revenues only the following percentages of total operating costs in lieu of headquarters overhead and headquarters general and administrative expenses: 3% during the development/construction stage of operations and 1% during the mining and processing stage of operations and, provided, further, that no deduction shall be made for depletion or depreciation. Claimholder's NPI shall be a fully carried interest, and Claimholder shall not be required to fund any expenses relating to the Property or its exploration , development, production or reclamation.
B. Net Smelter Returns Royalty. In addition to Claimholder's NPI, Claimholder hereby reserves a five (5%) percent net smelter returns royalty ("NSR Royalty") for all commodities produced. For purposes of this Agreement, the "net smelter return" is defined as the amount of money which the smelter or refinery, as the case may be, pays the Company for the commodity based on the then current spot price of the commodity, with deductions for costs associated with further processing but without deductions for taxes, calculated on an FOB mine site basis.
C. Payable in Kind; Payable Quarterly. Claimholder may elect to receive in kind its NPI or its NSR Royalty (as described below). Both royalties shall be payable quarterly.
9. "Project Area" / Area of Interest. If either party or if any affiliate of a party, or any officer, director, employee, partner, member or agent thereof, now has or hereafter acquires any property interest within the boundaries of Twp 5N Range 19W, Twp 5N Range 20W, Twp 6N Range 19W or Twp 6N Range 20W, GSRBM, Arizona, or within one mile of the perimeter of such boundaries (but excepting patented ground owned or acquired by the McIntyre / Bauman New Jersey Trust) (the "Project Area"), such party shall give prompt notice to the other party and such property interests shall, at the option of the other party, exercised within 45 days after notice of such acquisition by the acquiring party, become part of the Property and become subject to this Agreement (the "Additional Property. If Company does not exercise the Purchase Option and the Lease is terminated, Claimholder shall have the right to retain any Additional Property acquired by Company at no cost to Claimholder.
10. Cross - Indemnity. Each party ("Indemnifying Party") agrees to defend, indemnify and hold harmless the other party, its successors, affiliates, assigns, officers, directors and employees, members, partners and agents ("Indemnitees") from and against any and all claims, actions suits, losses, liabilities, damages, assessments, judgments, costs and expenses, including reasonable attorney's fees, arising out of or pertaining to (i) any breach by the indemnifying party of any representation, warranty or obligation under this Agreement or (ii) any activities conducted by the Indemnifying Party or its agents on the Property.
11. Assignment. Neither party may assign its rights and obligations under this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld, provided, however, that Claimholder may assign its interest at any time after October 31, 2005 to a third party without the consent of Company if such third party agrees to assume all of Claimholder's obligations under this Agreement, and provided further that Company may assign its interest to an affiliated company or a successor without the consent of Claimholder, provided that the assignee agrees to assume all of Company's obligations under this Agreement and has a tangible net worth no less than that of Company prior to the assignment.
12. Governing Law. Consent to Jurisdiction. This Agreement shall be governed by the laws of the State of Arizona, excluding any conflicts of laws principles. Each party consents to the exclusive jurisdiction and venue of the federal and state courts sitting in La Paz County, Arizona, U.S.A. over any dispute, claim, lawsuit or proceeding arising from or pertaining to this Agreement, and waives any argument that such courts are an "inconvenient forum."
13. Affiliated Companies. Each party shall take such actions as may be necessary to cause its affiliates to comply with the obligations contemplated herein. "Affiliate" of a party means any person, partnership, joint venture, corporation, or other form of enterprise that directly or indirectly controls, is controlled by, or is under common control with, the party.
14. Notices. All notices required or permitted to be given hereunder shall be in writing and shall be delivered to the parties by personal delivery, registered or certified mail, facsimile transmission, or express delivery service at the addresses set forth below, or to such other address as the parties may later designate by like notice to each other:
Company:
Copperstone Mining Limited C/o St James Resource Management Limited 16 Hanover Square London, W1S 1HT United Kingdom Attn: Stephen C Lumb
Searchlight:
Searchlight Exploration LLC 9212 Empire Rock Street Las Vegas, NV 89143 U.S.A. Phone: 702.396-5292 FAX: 702.396-2347 Attn: Frederick C. Bauman
All notices required or permitted to be given hereunder shall be deemed to have been given on the date of actual receipt.
15. Rule Against Perpetuities. Anything in this Agreement to the contrary notwithstanding, Company may not exercise its Purchase Option, which shall thereupon become null and void, later than 21 years after the end of the life of the last to survive of Frederick C. Bauman, Barbara McIntyre Bauman, John B. McIntyre, Betty M. McIntyre, Gail Neyland, John Neyland, George Hyatt and James Bauman, who are locators of claims owned or being explored by Searchlight.
16. Dollars. All dollar ($) amounts used in this Agreement or any Exhibit or Schedule hereto are U.S. $ Dollars.
17. Other Business Opportunities. This Agreement is, and the rights of the parties are, strictly limited to the matters set forth herein. Subject to the provisions of Section 9 relating to Additional Property in the Project Area, the parties shall have the free and unrestricted right to independently engage in and receive the full benefits of any and all business ventures of any sort whatever, whether or not competitive with the matters contemplated hereby, without consulting the other or inviting or allowing the other to participate therein.
18. Confidentiality. Except as set forth in Section 20, the parties hereto agree to treat all data, reports, records and other information developed under this Agreement and applicable to the Property as confidential, and unless any party is required by any law, rule, regulation or order to disclose any of such information, it shall not be disclosed to any person other than consultants, contractors or potential investors or assignees, without the written agreement of both parties, which will not unreasonably be withheld.
19. Memorandum for Recording. Simultaneous with the receipt by Claimholder of the all payments pursuant to Section 3.A., the parties agree to execute for recording purposes a written Short Form of Exploration and Development Lease / Option Agreement, setting forth the basic terms and conditions of this Agreement as necessitated or permitted by Arizona law.
20. Public Announcements. Disclosure of information relating to this Agreement or the Property may be made by either party if such information is required to be disclosed to any federal, state, provincial or local government or appropriate agencies and departments thereof or if such information is required by law, stock exchange rule or regulation to be publicly announced. Otherwise, public announcements or reports by either party of information relating to this Agreement or the Property shall be made only on the basis of agreed texts upon the prior written consent of the other party, which consent shall not unreasonably be withheld. Each of Claimholder and Company accordingly agrees that it will, not less than forty-eight hours in advance of making public any information referred to in the preceding sentence, give the other party written notice of the text of the proposed report and provide the non-disclosing party with the opportunity to object to the form and content thereof before the same is issued. The non-disclosing party shall respond within forty-eight hours of receipt of such notice, or its silence will constitute a waiver of objection to the terms of the proposed text.
21. Waiver; Amendment. Any of the terms or conditions of this Agreement may be waived at any time by the party which is entitled to the benefit thereof, but such waiver must be in writing and signed by the party granting the waiver. No such waiver shall affect or impair the right of the waiving party to require observance, performance or satisfaction of any other term or condition thereof. Any of the terms or provisions of this Agreement may be amended or modified at any time, but only in a writing signed by each of the parties hereto.
22. Severability. In the event that any one or more of the provisions contained in this Agreement or in any other instrument or agreement contemplated hereby shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any such other instrument or agreement.
23. Attorney's Fees. In the event of any controversy, claim or dispute between the parties hereto, arising out of or pertaining to this Agreement or the breach thereof, the prevailing party shall be entitled to recover from the losing party reasonable expenses, attorney's fees and costs.
24. Further Assurances. At the request of either party, the parties shall execute and deliver any further instruments, agreements, documents or other papers reasonably requested by either party to effect the purposes of this Agreement and the transactions contemplated hereby.
25. Counterparts. This Agreement may be executed in multiple counterparts, and all such counterparts taken together shall be deemed to constitute one and the same instrument.
26. No Brokers or Finders. Each party represents and warrants to the other party that all negotiations relative to this Agreement and the transactions contemplated hereby have been carried on by it in such manner as not to give rise to any valid claim against either party, or any third party, for a brokerage commission, finder's fee or other fee or commission arising by reason of the transactions contemplated by this Agreement.
IN WITNESS WHEREOF, the parties hereto, through their duly authorized representative, have executed and delivered this Agreement as of the day and year first above written.
SEARCHLIGHT EXPLORATION LLC, an Arizona limited liability company
By_______________________________ Frederick C. Bauman Manager and sole member
Copperstone Mining Limited A Company incorporated in England and Wales
By________________________________
Name: Stephen Craig Lumb
Title: Director
Exhibit A South Copperstone Project Moon Mountain (Copperstone) Mining District