Exhibit 10.3

 
PROPERTY OPTION AGREEMENT

 
THIS AGREEMENT made and entered into as of the 15 day of January 2010
 
BETWEEN:
MinQuest Inc., a company having a mailing address at 4235 Christy Way, Reno,
Nevada, 89519, U.S.A.
 
 
 
(herein called the “Optionor”)

 
OF THE FIRST PART
 
AND:
Star Gold Corporation , a company having an office at 6240 East Seltice Way,
Suite C, Post Falls, Idaho, 83854, USA
 
 
 
(herein called the “Optionee”)

 
OF THE SECOND PART
 
WHERAS the Optionor has represented that it is the sole recorded and beneficial
owner in and to the property called the Longstreet Project (the “Property)
described in Schedule “A” attached hereto;
 
AND WHEREAS the Optionor, subject to the Net Smelter Royalty reserved to the
Optionor, now wishes to grant to the Optionee the exclusive right and option to
acquire an undivided 100% right, title and interest in and to the Property on
the terms and conditions hereinafter set forth;
 
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises,
the mutual covenants herein set forth and the sum of One Dollar ($1.00) of
lawful money of U.S. currency now paid by the Optionee to the Optionor (the
receipt whereof is hereby acknowledged), the Parties hereby mutually covenant
and agree as follows:
 
1.
Definitions

 
 The following words, phrases and expressions shall have the following meanings:
 
 
(a)
“After Acquired Properties” means any and all mineral interests staked, located,
granted or acquired by or on behalf of either of the parties hereto during the
currency of this Agreement which are located, in the whole or in part, within
one (1) mile of the existing perimeter of the Property;

 
 
(b)
“Exchange” means any stock Exchange;

 
1

 
 
 
(c)
“Expenditures” includes all direct or indirect expenses [net of government
incentives and not including payments to the Optionor pursuant to section 4,
paragraphs (a), (b)(ii), (c)(ii), (d)(ii), (e)(ii), (f)(ii), (g)(ii), (h)(ii),
(i)(ii), (j)(ii), and (k)(ii) hereof ] of or incidental to Mining Operations.
The certificate of the Controller or other financial officer of the Optionee,
together with a statement of Expenditures in reasonable detail shall be prima
facie evidence of such Expenditures; the parties hereto agree that Property
payments and Property expenditures are separate payments as outlined in
paragraph 4;

 
 
(d)
“Facilities” means all mines and plants, including without limitation, all pits,
shafts, adits, haulageways, raises and other underground workings, and all
buildings, plants, facilities and other structures, fixtures and improvements,
and all other property, whether fixed or moveable, as the same may exist at any
time in, or on the Property and relating to the operator of the Property as a
mine or outside the Property if for the exclusive benefit of the Property only;

 
 
(e)
“Force Majeure” means an event beyond the reasonable control of the Opionee that
prevents or delays it from conducting the activities contemplated by this
Agreement other than the making of payments referred to in Section 4 herein.
Such events shall include but not be limited to acts of God, war, insurrection,
action of governmental agencies reflecting a clear and marked instability in
government procedures unacceptable to both Option or and Optionee;

 
 
(f)
“Mineral Products” means the commercial end products derived from operating the
Property as a mine:

 
 
(g)
“Mining Operations” includes:

 
 
(i)
every kind of work done on or with respect to the Property by or under the
direction of the Optionee during the Option Period or pursuant to an approved
Work Program; and

  
 
(ii)
without limiting the generality of the foregoing, including all work capable of
receiving assessment credits pursuant to the Mines and Minerals act of Nevada
and the work of assessment, geophysical, geochemical and geological surveys,
studies and mapping, investigating, drilling, designing, examining equipping,
improving, surveying, shaft sinking, raising, cross-cutting and drifting,
searching for, digging, trucking, sampling, working and procuring minerals, ores
and metals, in surveying and bringing any mineral claims to lease or patent, in
doing all other work usually considered to be prospecting, exploration,
development, a feasibility study, mining work, milling concentration,
beneficiation or ores and concentrates, as well as the separation and extraction
of Mineral Products and all reclamation, restoration and permitting activities;

 
2

 
 
 
(h)
“Net Smelter Royalty” means that Net Smelter Royalty as defined in Schedule “B”
attached hereto (“NSR”);

 
 
(i)
“Option” means the option granted by the Optionor to the Optionee to acquire,
subject to the NSR reserved to the Optionor, an undivided 100% right, title and
interest in and to the Property as more particularly set forth in Section 4;

 
 
(j)
“Option Period” means the period from the date hereof to the date at which the
Optionee has performed its obligations to acquire its 100% interest in the
Property as set out in Section 4 hereof, which ever shall be the lesser period;

 
 
(k)
“Property” means the mineral claims described in Schedule “A” and any future
claims included through item (a) above;

 
 
(l)
“Filing Fees” means all fees, payments and expenses necessary to keep the
mineral claims in good standing with federal, state and local government
entities;

 
 
(m)
“Work Program” means a program of work reasonably acceptable to both parties in
respect of a particular Property, contained in a written document setting out in
reasonable detail;

  
 
(i)
An outline of the Mining Operations proposed to be undertaken and conducted on
the Property, specifically stating the period of time during which the work
contemplated by the proposed program is to be done and performed;

 
 
(ii)
The estimated cost of such Mining Operations including a proposed budget
providing for estimated monthly cash requirements in advance and giving
reasonable details; and

 
 
(iii)
The identity and credentials of the person or persons undertaking the Mining
Operations so proposed if not the Optionor, reasonably acceptable to both
parties hereto.

 

2.
Headings

 
 
Any heading, caption or index hereto shall not be used in any way in construing
or interpreting any provision hereof.

 
3

 
 
3.
Singular, Plural

 
 
Whenever the singular or masculine or neuter is used in this Agreement, the same
shall be construed as meaning plural or feminine or body politic or corporate or
vice versa, as the context so requires.

 
4.
Option

 
 
The Optionor hereby grants to the Optionee the sole and exclusive right to lease
(“Option”) the Property under the terms as follows:

 
(a)
At signing, the Optionee paying the sum of $20,000 USD to the Optionor by way of
cash, issue 25,000 shares of stock, 25000 stock options based on “Fair Market
Price” and reimburse all holding costs and expenses of location of mining
claims, such expenses to be identified in Schedule “C”;

 
(b)
On or before the First Anniversary

 
 
(i)
The Optionee incurring Expenditures of $200,000 USD on the property;

 
 
(ii)
The Optionee paying $20,000 USD and issuing 25,000 shares of stock and 25000
stock options based on “Fair Market Price”  to the Optionor;

 
(c)
On or before Second Anniversary

 
 
(i)
The Optionee incurring Expenditures of $250,000 USD on the Property in addition
to the expenditures referred to in clause (b)(i);

 
 
(ii)
The Optionee paying $20,000 U.S and issuing 25,000 shares of stock and 25000
stock options based on “Fair Market Price”  to the Optionor;

 
(d)
On or before Third Anniversary

 
 
(i)
The Optionee incurring Expenditures of $350,000 USD on the Property in addition
to the expenditures referred to in clauses (b)(i) and (c)(i) hereof; and

 
 
(ii)
The Optionee paying $30,000 USD and issuing 25,000 shares of stock and 25000
stock options based on “Fair Market Price”  to the Optionor;

 
4

 
 
(e)
On or before Fourth Anniversary

 
 
(i)
The Optionee incurring Expenditures of $450,000 USD on the Property in addition
to the expenditures referred to in clauses (b)(i), (c)(i) and (d)(i) hereof; and

 
 
(ii)
The Optionee paying $30,000 USD and issuing 25,000 shares of stock and 25000
stock options based on “Fair Market Price” to the Optionor;

 
(f)
On or before the Fifth Anniversary

 
 
(i)
The Optionee incurring Expenditures of $550,000 USD on the Property in addition
to the expenditures referred to in clauses (b)(i), (c)(i), (d)(i) and (e)(i)
hereof;

 
 
(ii)
The Optionee paying $50,000 USD to the Optionor and issuing 25,000 shares of
stock and 25000 stock options based on “Fair Market Price”;

 
(g)
On or before the Sixth Anniversary

 
 
(i)
The Optionee incurring Expenditures of $750,000 USD on the Property in addition
to the expenditures referred to in clauses (b)(i), (c)(i), (d)(i) and (e)(i) and
(f)(i) hereof

 
 
(ii)
The Optionee paying $50,000 USD to the Optionor and issuing 25,000 shares of
stock and 25000 stock options based on “Fair Market Price”  to the Optionor;

 
(h)
On or before the Seventh Anniversary

 
 
(i)
The Optionee incurring Expenditures of $1,000,000 USD on the Property in
addition to the expenditures referred to in clauses (b)(i), (c)(i), (d)(i),
(e)(i), (f)(i) and (g)(i) hereof;

 
 
(ii)
The Optionee paying $50,000 USD to the Optionor; and issuing 25,000 shares of
stock and 25000 stock options based on “Fair Market Price” to the Optionor.
 Following which the Optionee shall receive from Optionor a quitclaim for 100%
interest in and to the property with the exception of a retained 3% NSR to the
Optionor as defined in Schedule B.

 
(i)
The Optionor and Optionee understand and confirm that all Expenditures incurred
in a particular period, including any excess in the amount of Expenditures
required to be incurred to maintain the Option during such period, shall be
carried over and included in the aggregate amount of Expenditures for the
subsequent period, but not to exceed more than three (3) consecutive years.

 
5

 
 
(j)
Notwithstanding paragraphs (b)(i), (c)(i), (d)(i), (e)(i), (f)(i), (g)(i),
(h)(i), if the Optionee has not incurred the requisite Expenditures to maintain
its option in good standing prior to the anniversary of any given year, the
Optionee may pay to the Optionor within 60 days following the expiry of such
period, the amount of the deficiency and such amount shall thereupon be deemed
to have been Expenditures incurred by the Optionee during such period.

 
(k)
The doing of any act or the incurrence of any cash payments by the Optionee
shall not obligate the Optionee to do any further acts or make any further
payments with the exception of fees and expenses to keep said property in good
standing as per paragraph 8b.

 
6.
Mining Operations during Option

 
 
During the Option Period, the Optionor may provide its mineral exploration
expertise on the Property, on a consultation basis for and on behalf of the
Optionee, at the election of the Optionee.  However, the Optionee has the
exclusive right to determine what Expenditures and Mining Operations it will
perform, when they will be performed, and by whom. If the Optionee elects to use
the mineral expertise and consulting services of the Optionor, then the Optionor
shall invoice for time for consulting services and related travel expenses from
time to time and the prompt payment of such invoices when due shall constitute a
portion of Expenditures by the Optionee as contemplated under Section 4 hereof.

 
 
During the currency of this Agreement, the Optionee, its servants, agents and
workmen and any persons duly authorized by the Optionee, shall have the right of
access to and from and to enter upon and take possession of and prospect,
explore and develop the Property in such manner as the Optionee in its sole
discretion may deem advisable and shall have the right to remove and ship
therefrom ores, minerals, metals, or other products recovered in any manner
therefrom.

 
7.
Assignment

 
 
During the Option Term, both parties shall have the right to sell, transfer, or
assign its interest in this Agreement or its right or interest in the Property.
It will be a condition of any assignment under this Agreement that such assignee
shall agree in writing to be bound by the terms of this Agreement applicable to
the assignor.

 
6

 
 
8.
Termination

 
 
This Agreement shall forthwith terminate in circumstances where:

 
 
(a)
The Optionee shall fail to comply with any of its obligations hereunder, subject
to Force Majeure, and within 30 days of receipt by the Optionee of written
notice from the Optionor of such default, the Optionee has not:

 
 
(i)
cured such default, or commenced proceedings to cure such default and prosecuted
same to completion without undue delay; or

 
 
(ii)
given the Optionor notice that it denies that such default has occurred.

 
 
In the event that the Optionee gives notice that it denies that a default has
occurred, the Optionee shall not be deemed to be in default until the matter
shall have been determined finally through such means of dispute resolution as
such matter has been subjected to by either party so long as the Optionee
continues to maintain the property in good standing with all government
entities; or

 
 
(b)
The Optionee gives notice of termination to the Optionor, which it shall be at
liberty to do at any time after the execution of this Agreement. If and when the
Optionee elects to terminate this Agreement, or terminate one of the projects
comprising the Property, at such time the Property or the specific project will
be returned to the Optionor and all claim fees, payments and expenses will be
paid in order to maintain the property in good standing for one year after
termination.

  
 
Upon the termination of this Agreement under this Section 8, the Optionee shall
cease to be liable to the Optionor in debt, damages, or otherwise, other than to
pay the claim fees as described in paragraph (b) of this Section 8 and all
liabilities referred to in Section 11.

 
 
Upon termination of this Agreement under this Section 8, the Optionee shall
return the Property, including all property within the designated boundary of
the area of interest, to the Optionor. The Optionee shall vacate the Property
within a reasonable time after such termination and relinquishment, but shall
have the right of access to the Property for a period of six months thereafter
for the purpose of removing its chattels, machinery, equipment and fixtures.

 
9.
Representations and Covenants of the Optionor

 
 
The Optionor represents and covenants to and with the Optionee as follows:

 
 
(a)
The Optionor is a company duly organized validly existing and in good standing
under the laws of Nevada;

 
 
(b)
The Optionor has full power and authority to carry on its business and to enter
into this Agreement and any agreement or instrument referred to or contemplated
by this Agreement;

 
7

 
 
 
(c)
Neither the execution and delivery of this Agreement, nor any of the agreements
referred to herein or contemplated hereby, nor the consummation of the
transactions hereby contemplated hereby, nor the consummation of the
transactions hereby contemplated conflict with, result in the breach of or
accelerate the performance required by, any agreement to which it is a party;

 
 
(d)
The execution and delivery of this Agreement and the agreements contemplated
hereby will not violate or result in the breach of the laws of any jurisdiction
applicable or pertaining thereto or of its constating documents;

 
 
(e)
The Agreement constitutes a legal, valid and binding obligation of the Optionor;

 
 
(f)
The Property is accurately described in Schedule “A”, is in good standing under
the laws of the jurisdiction in which it is located and is free and clear of all
liens, charges and encumbrances;

 
 
(g)
The Optionor is the sole recorded and beneficial owner of the Property and has
the exclusive right to enter into this Agreement and all necessary authority to
transfer its interest in the Property in accordance with the terms of this
Agreement;

 
 
(h)
No Person, firm or corporation has any proprietary or possessorty interest in
the Property other than the Optionor, and no person, firm or corporation is
entitled to any royalty or other payment in the nature of rent or royalty on any
minerals, ores, metals or concentrates or any other such products removed from
the Property other than the government of the state of Nevada pursuant to
statute; notwithstanding any Federal, State or County royalties or net proceeds
tax derived from mining operations.

 
 
(i)
Upon request by the Optionee, and at the sole cost of the Optionee, the Optionor
shall deliver or cause to be delivered to the Optionee copies of all available
maps and other documents and data in its possession respecting the Property.
Nothing will be withheld, hidden, or kept from the Optionee; and

 
 
(j)
Subject to performance by the Optionee of its obligations under Section 4,
during the Option Period, the Optionee will keep the Property in good standing,
free and clear of all liens, charges and encumbrances, will carry out all Mining
Operations on the Property in a miner-like fashion if the Optionee elects to use
the mining expertise and consulting services of the Optionor, will obtain all
necessary licenses and permits as shall be necessary and will file all
applicable work up to the legal limits as assessment work under the Mines and
Mineral Act (Nevada)

 
8

 
 
10.
Representations and Covenants of the Optionee

 
 
The Optionee represents and covenants to and with the Optionor that:

 
 
(a)
The Optionee is a company duly organized validly existing and in good standing
under the laws of Nevada;

 
 
(b)
The Optionee has full power and authority to carry on its business and to enter
into this Agreement and any agreement or instrument referred to or contemplated
by this Agreement;

 
 
(c)
Neither the execution and delivery of this Agreement, nor any of the agreements
referred to herein or contemplated hereby, nor the consummation of the
transactions hereby contemplated conflict with, result in the breach of or
accelerate the performance required by, any agreement to which it is a party;

 
 
(d)
The execution and delivery of this Agreement and the agreements contemplated
hereby will not violate or result in the breach of the laws of any jurisdiction
applicable or pertaining thereto or of its constating documents; and

 
 
(e)
This Agreement constitutes a legal, valid and binding obligation of the
Optionee.

 
11.
Indemnity and Survival of Representation

 
 
The representation herein before set out are conditions on which the parties
have relied in entering into this Agreement and shall survive the acquisition of
any interest in the Property by the Optionee and each of the parties will
indemnify and save the other harmless from all loss, damage, costs, actions and
suits arising out of or in connection with any breach of any representation,
option, covenant, agreement or condition made by them and contained in this
Agreement.

 
 
The Optionor agrees to indemnify and save harmless the Optionee from any
liability to which it may be subject arising from any Mining Operations carried
out by the Optionor or at its direction on the Property. The Optionee agrees to
indemnify and save harmless the Optionor from any liability to which it may be
subject arising from any Mining Operations carried out by the Optionee or at its
direction on the Property.

 
9

 
 
 
The Optionor agrees to indemnify and save harmless the Optionee from any
liability arising from any and every kind of work done on or with respect to the
Property prior to the signing of this Agreement (the “Prior Operations”).
Without limiting the generality of the foregoing, Prior Operations includes all
work capable of receiving assessment credits pursuant to The Mines and Minerals
Act of Nevada and the work of assessment, geophysical, geochemical and
geological surveys, studies and mapping, investigating, drilling, designing,
examining equipping, improving, surveying, shaft sinking, raising, cross-cutting
and drifting, searching for, digging, trucking, sampling, working and procuring
minerals, ores and metals, in surveying and bringing any mineral claims to lease
or patent, in doing all other work usually considered to be prospecting,
exploration, development, a feasibility study, mining work, milling,
concentration, beneficiation of ores and concentrates, as well as the separation
and extraction of Mineral Products and all reclamation, restoration and
permitting activities.

 
12.
Confidentiality

 
 
The parties hereto agree to hold in confidence all information obtained in
confidence in respect of the Property or otherwise in connection with this
Agreement other than in circumstances where a party has an obligation to
disclose such information in accordance with applicable securities legislation,
in which case such disclosure shall only be made after consultation with the
other party.

 
13.
Notice

 
 
All notices, consents, demands and requests (in this Section 13 called the
“Communication”) required or permitted to be given under this Agreement shall be
in writing and may be delivered personally sent by telegram, by fax or other
electronic means or may be forwarded by first class prepaid registered mail to
the parties at their addresses first above written. Any Communication delivered
personally or sent by fax or other electronic means including email shall be
deemed to have been given and received on the second business day next following
the date of sending. Any Communication mailed as aforesaid shall be deemed to
have been given and received on the fifth business day following the date it is
posted, addressed to the parties at their addresses first above written or to
such other address or addresses as either party may from time to time specify by
notice to the other; provided, however, that if there shall be a mail strike,
slowdown or other labor dispute which might effect delivery of the Communication
by mail, then the Communication shall be effective only if actually delivered.
For purposes of this agreement and as a definition of address the Optionor’s
email shall be defined as rrkern@charter.net and the Optionor’s fax number is
775-746-0938. The Optionee’s email shall be defined as admin.stargold@gmail.com
and the Optionee’s fax number is ________. Notice will be provided to each party
should their respective email address change.

 
10

 
 
14.
Further Assurances

 
 
Each of the parties to this Agreement shall from time to time and at all times
do all such further acts and execute and deliver all further deeds and documents
as shall be reasonably required in order to fully perform and carry out the
terms of this Agreement

 
15.
Entire Agreement

 
 
The parties hereto acknowledge that they have expressed herein the entire
understanding and obligation of this Agreement and it is expressly understood
and agreed that no implied covenant, condition, term or reservation, shall be
read into this Agreement relating to or concerning any matter or operation
provided for herein

 
16.
Proper Law and Arbitration

 
 
This Agreement will be governed by and construed in accordance with the laws of
the State of Nevada and the laws of the United States of America. The parties
hereto hereby irrevocably attorn to the jurisdiction of the Courts of Nevada.
All disputes arising out of or in connection with this Agreement, or in respect
of any defined legal relationship associated therewith or derived therefrom,
shall be referred to and finally resolved by a sole arbitrator by arbitration
under the rules of The Arbitration Act of Nevada.

 
17.
Enurement

 
 
This Agreement will ensure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.

 
18.
After Acquired Properties

 
 
(i)
The parties covenant and agree, each with the other, that any and all After
Acquired Properties shall be subject to the terms and conditions of this
Agreement and shall be added to and deemed, for the purposes hereof, to be
included in the Property. Any costs incurred by the Optionor in staking,
locating, recording or otherwise acquiring any “After Acquired Properties” will
be deemed to be Mining Operations for which the Optionor will be entitled to
reimbursements as part of the Expenditures payable by the Optionee hereunder.

 
 
(ii)
Any additional claims agreed by the Optionee to be staked by the Optionor within
one (1) mile from the existing perimeter of the Property boundaries shall form
party of this Agreement. The Optionee will reimburse the Optionor for the costs
of staking the additional claims, unless the Optionee does not elect to have the
additional claims subject to this Agreement.

 
11

 
 
19.
Default

 
 
Notwithstanding anything in this Agreement to the contrary if any party (a
“Defaulting Party”) is in default of any requirement herein set forth the party
affected by such default shall give written notice to the Defaulting Party
specifying the default and the Defaulting Party shall not lose any rights under
this Agreement, unless thirty (30) days after the giving of notice of default by
the affected party the Defaulting Party has failed to take reasonable steps to
cure the default by the appropriate performance and if the Defaulting Party
fails within such period to take reasonable steps to cure any such default, the
affected party shall be entitled to seek any remedy it may have on account of
such default including, without limiting, termination of this Agreement.

 
20.
Payment

 
 
All references to monies herein shall be in US funds unless otherwise specified.
The Optionee shall make payments for the Expenditures incurred by the Optionor
no later than 30 days after the receipt of invoices delivered by the Optionee to
do any acts or make any payments hereunder, and any act or payment or payments
as shall be made hereunder shall not be construed as obligating the Optionee to
do any further act or make any further payment or payments.

 
21.
Supersedes Previous Agreements

 
 
This Agreement supersedes and replaces all previous oral or written agreements,
memoranda, correspondence or other communications between the parties hereto
relating to the subject matter hereof.

 
IN WITNESS WHEREOF the Parties hereto have duly executed this Agreement
effective as of the ___ day of January, 2010
 
MinQuest Inc.
 
Per:
 (-s- Richard Kern) [sg001_v1.jpg]
 
 
Richard  Kern, President
 

 
Star Gold Corporation.
 
Per
(-s- Lindsay Gorrill) [sg002_v1.jpg]
 
 
Lindsay Gorrill, President
 

 
12

 
 
SCHEDULE “A”
 
Sections 9, 10, 15  and 16, T6N, R47E, MDB&M, Nye County, Nevada
 
CLAIM NAME
 
CLAIMANT’S NAME
 
NMC NUMBER
 
 
 
 
 
Longstreet 1A
 
MinQuest Inc.
 
799562
Longstreet 2A
 
MinQuest Inc.
 
799563
Longstreet 3A
 
MinQuest Inc.
 
799564
Longstreet 6A
 
MinQuest Inc.
 
799565
Longstreet 7A
 
MinQuest Inc.
 
799566
Longstreet 8A
 
MinQuest Inc.
 
799567
Longstreet 9A
 
MinQuest Inc.
 
799568
Longstreet 16A
 
MinQuest Inc.
 
799569
Longstreet 13
 
MinQuest Inc.
 
799570
Longstreet 32
 
MinQuest Inc.
 
799571
Longstreet 34
 
MinQuest Inc.
 
799572
Longstreet 4A
 
MinQuest Inc.
 
836168
Longstreet 5A
 
MinQuest Inc.
 
836169
Longstreet 8
 
MinQuest Inc.
 
836170
Longstreet 10
 
MinQuest Inc.
 
836171
Longstreet 10A
 
MinQuest Inc.
 
836172
Longstreet 28
 
MinQuest Inc.
 
836173
Longstreet 30
 
MinQuest Inc.
 
836174
Longstreet 36
 
MinQuest Inc.
 
836175
Longstreet 37
 
MinQuest Inc.
 
836176
Longstreet 39
 
MinQuest Inc.
 
836177
Longstreet 41
 
MinQuest Inc.
 
836178
Longstreet 43
 
MinQuest Inc.
 
836179
Longstreet 45
 
MinQuest Inc.
 
836180
Longstreet 47
 
MinQuest Inc.
 
836181
Longstreet 49
 
MinQuest Inc.
 
836182
Longstreet 101
 
MinQuest Inc.
 
836183
Longstreet 102
 
MinQuest Inc.
 
836184
Longstreet 103
 
MinQuest Inc.
 
836185
Longstreet 104
 
MinQuest Inc.
 
836186
Longstreet 105
 
MinQuest Inc.
 
836187
Longstreet 106
 
MinQuest Inc.
 
836188
Longstreet 107
 
MinQuest Inc.
 
836189
Longstreet 108
 
MinQuest Inc.
 
836190
Longstreet 12
 
MinQuest Inc.
 
843867
Longstreet 14
 
MinQuest Inc.
 
843868
Longstreet 16
 
MinQuest Inc.
 
843869
Longstreet 18
 
MinQuest Inc.
 
843870
Longstreet 20
 
MinQuest Inc.
 
843871
Longstreet 26
 
MinQuest Inc.
 
843872

 
13

 
 
CLAIM NAME
 
CLAIMANT’S NAME
 
NMC NUMBER
 
 
 
 
 
Longstreet 42
 
MinQuest Inc.
 
843873
Longstreet 44
 
MinQuest Inc.
 
843874
Longstreet 46
 
MinQuest Inc.
 
843875
Longstreet 48
 
MinQuest Inc.
 
843876
Longstreet 50
 
MinQuest Inc.
 
843877
Longstreet 40
 
MinQuest Inc.
 
851568
Longstreet 109
 
MinQuest Inc.
 
855021
Longstreet 110
 
MinQuest Inc.
 
855022
Longstreet 111
 
MinQuest Inc.
 
855023
Longstreet 112
 
MinQuest Inc.
 
855024
Longstreet 113
 
MinQuest Inc.
 
855025
Longstreet 114
 
MinQuest Inc.
 
855026
Longstreet 115
 
MinQuest Inc.
 
855027
Longstreet 118
 
MinQuest Inc.
 
851569
Longstreet 119
 
MinQuest Inc.
 
851570
Longstreet 120
 
MinQuest Inc.
 
851571
Longstreet 121
 
MinQuest Inc.
 
851572
Longstreet 122
 
MinQuest Inc.
 
851573
Longstreet 123
 
MinQuest Inc.
 
851574
Longstreet 124
 
MinQuest Inc.
 
851575
 
 
 
 
 
 
 
 
 

 
14

 
 
SCHEDULE “B”
 
“Net Smelter Return” shall mean the aggregate proceeds received by the Optionee
from time to time from any smelter or other purchaser from the sale of any ores,
concentrates, metals or any other material of commercial value produced by and
from the Property after deducting from such proceeds the following charges only
to the extent that they are not deducted by the smelter or other purchaser in
computing the proceeds:
 
 
(a)
The cost of transportation of the ores, concentrates or metals from the Property
to such smelter or other purchaser, including related insurance;

 
 
(b)
Smelting and refining charges including penalties; and

 
The Optionee shall reserve and pay to the Optionor a NSR equal to three (3%)
percent of Net Smelter Return.
 
Payment of NSR payable to the Optionor hereunder shall be made quarterly within
thirty (30) days after the end of each calendar quarter during which the
Optionee receives Net Smelter Returns in USD dollars or in kind bullion at the
discretion of the Optionor. Within (60) days after the end of each calendar
quarter for which the NSR for such year shall be audited by the Optionee and any
adjustments in the payments of NSR to the Optionor shall be made forthwith after
completion of the audit. All payments of NSR to the Optionor for a calendar year
shall be deemed final and in full satisfaction of all obligations of the
Optionee in respect thereof if such payments or the calculations thereof are not
disputed by the Optionor of the same audited statement. The Optionee shall
maintain accurate records relevant to the determination of the NSR and the
Optionor or its authorized agent, shall be permitted the right to examine such
records at all reasonable times.
 
 
 
 
 
 
 
 
 
 
 
15

 
 
SCHEDULE “C”
 
BLM claim filing fees 2009 (60 x $140)
 
$
8,400.00
 
 
 
 
 
 
County claim filing fees 2009 (60 x $10.50 + $4.00)
 
$
634.00
 
 
 
 
 
 
Total
 
$
9,034.00
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
16