BINDING TERMS SHEET

 

PRIVATE AND CONFIDENTIAL

This binding terms sheet (Terms Sheet) sets out the terms and conditions upon
which Burey Gold Limited (Burey), Panex Resources Inc and its subsidiary,
Everton Resources (BVI) Ltd (together Panex)and the shareholders of Amani
Consulting sprl (Amani Vendors) come to a binding agreement for the acquisition
of 85% of the issued shares in Amani Consulting sprl (Amani) by Burey.

This Terms Sheet supersedes any and all previous correspondence, agreements or
understandings between the parties in relation to the transaction the subject of
this Terms Sheet.

1.

Recitals

(a)

Amani has entered into an agreement (“Association Agreement) dated on or around
3 January 2012 with Societe Miniere De Kilo Moto (“Sokimo”) to form a joint
venture.  The joint venture is in the form of an incorporated entity, Giro
Goldfields Exploration sprl (“Giro”).  Amani and Sokimo hold 65% and 35% of the
shares in Giro respectively. Giro is the registered and beneficial holder of two
mineral exploitation permits, PE 5046 & PE 5049 (Giro Project), covering 610sqkm
in North East Democratic Republic of Congo (“DRC”).

(b)

Panex has entered into an agreement (“Share Purchase Agreement”) dated on or
around 7 December 2013 to acquire 85% of the issued shares in Amani (Sale
Shares) from the Amani Vendors.  The Share Purchase Agreement has not settled as
at the date of this Terms Sheet and Panex is not the holder of the Sale Shares

(c)

Since the execution of the Share Purchase Agreement, Panex has been providing
loans to Amani (Panex Loans) for the purposes of funding exploration expenditure
at the Giro Project.

(d)

On or around 21 March 2014, Panex received loan funds of US$300,000 from Cong
Dong Hui (“March 2014 Loan”) which funds were then on-lent by Panex to Amani for
the purposes of funding exploration expenditure for the Giro Project.

 

2.

The Transaction

Under the terms and conditions expressed in this Terms Sheet:

(a) Panex agrees to assign all its rights under the Share Purchase Agreement to
Burey and Amani and the Amani Vendors consent to the assignment;

(b) Panex agrees to assign the Panex Loans to Burey. Amani consents to that
assignment and expressly acknowledges that upon completion of the transaction
the subject of the Terms Sheet, it shall be liable to Burey for the amounts
advanced under the Panex Loans;

(c) Panex agrees to assign to Burey any loans that it has provided directly to
Giro.

(d) Burey agrees to assume the March 2014 Loan from Panex and Panex warrants
that it has received consent from Cong Dong Hui for the March 2014 Loan to be
assumed by Burey.  

(e) Amani Vendors agree to the sale of Sale Shares to Burey.

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3.

Consideration for the Transaction

As consideration for the transaction referred to in (2) above, Burey will issue
shares (Burey Shares) in its capital as follows:

a)

to Panex (or its nominee) 55,705,232 Burey Shares; and

b)

to Amani Vendors (or their nominees) 62,367,769 Burey Shares.

In addition, Burey will issue to the Amani Vendors (or their nominees)
47,500,000 options to acquire Burey Shares at an exercise price of Aud$0.05 with
an expiry date of 31 December 2016.  Exercise of these options shall be subject
to the following conditions precedent:

i.

the date by which a feasibility study must be completed under the terms of the
Association Agreement shall be extended from January 2016 to January 2018;

ii.

Clause 9.2 of the Association Agreement shall be deleted so that Giro’s royalty
payment obligations upon commencement of a commercial mining operation shall
only be to the DRC Government and not to Sokimo; and

iii.

Provisions in the Association Agreement (including but not limited to clauses
10.9 & 10.10) which have the effect of restricting Amani to only one commercial
mining operation within the Giro Project area and which give Sokimo the right to
invite other parties to develop and exploit other mining operations within the
Giro Project area without compensation to Amani, shall be removed without
qualification.

4.

Further Consideration

(a)

Under the Share Purchase Agreement Panex has an obligation to pay an amount of
US$300,000 to the Amani Vendors.  Subject to completion of the transaction the
subject of this Terms Sheet, Burey will assume that obligation and will remit
US$300,000 to the Amani Vendors within 7 business days after settlement of the
transaction. The Amani Vendors may elect to have this amount settled by issue of
Burey Shares at a price equivalent to the issue price at which Burey may conduct
a capital raising following the execution of this Terms Sheet.

(b)

Under the Share Purchase Agreement Panex has an obligation to pay an amount of
US$5,350,000 (Discovery Consideration) to the Amani Vendors upon discovery of at
least three million ounces (3Moz) of measured and indicated resources of gold at
a grade of at least two and a half grams per tonne (2.5g/t)on the Giro Project
(Hurdle Resource).  Subject to completion of the transaction the subject of this
Terms Sheet, Burey will assume that obligation.

Burey’s obligation to pay the Discovery Consideration is contingent upon an
independent competent person certifying the Hurdle Resource under the
requirements of the JORC Code.  Further, the Discovery Consideration shall only
fall due for payment upon draw-down of development funds for a commercial mining
operation at the Giro Project. At the time, the Discovery Consideration falls
due for payment, Burey at its sole discretion may make an election to settle 50%
of the Discovery Consideration by an issue of Burey Shares at the then market
value of Burey Shares (by reference to the 20 trading day volume weighted
average price of Burey Shares trading on the ASX).

Burey’s obligation to pay the Discovery Consideration is also contingent on it
continuing to retain a majority interest in Amani.  Burey undertakes that if it
disposes a majority interest in Amani prior to discovery of the Hurdle Resource
at the Giro Project, the sale terms will include a covenant by the purchaser to
assume Burey’s obligation to pay the Discovery Consideration upon discovery of
the Hurdle Resource.  In the absence of such a covenant, Burey will be liable to
settle the Discovery Consideration from the proceeds of sale of its Amani
investment. 

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5.

Conditions Precedent

Completion of the transaction contemplated by this Terms Sheet is subject to and
conditional upon the satisfaction of the following conditions precedent:

(a)

Burey completing its own due diligence investigations in relation to the Giro
Project and being satisfied with the outcome of its due diligence enquiries
within 60 days of execution of this Terms Sheet;

(b)

Burey obtaining shareholder approval, within 60 days of execution of this Terms
Sheet, as required under ASX Listing Rules; and

(c)

Receipt of such regulatory approvals as may be required under DRC laws,
including from Sokimo if required.

6.

Giro Project Funding

Following the execution of this Terms Sheet and prior to the completion of the
transaction, Burey will provide loan funds to Amani for the purposes of
exploration at the Giro Project.  In the event that the transaction does not
complete, Panex will refund the loan funds to Burey within 4 months of execution
of this Terms Sheet.

7.

Obligations prior to completion & maintaining Status Quo

Other than as contemplated in this Terms Sheet, or with the prior written
approval of Burey, Amani, the Amani Vendors and Panex agree that, until the
earlier of termination of this Terms Sheet and settlement of the transaction,
they shall conduct systematic exploration activity on the Giro Project and shall
not make any material decisions in relation to any matters which relate to the
Giro Project including the corporate structures of Amani and Giro.

8.

Warranties and Representations

The parties give the warranties and make the representations in Appendix A,
which forms part of this Terms Sheet.

9.

Legally Binding

& Formal Agreement

The parties agree that this Terms Sheet is legally binding on the parties.

Notwithstanding the fact that this Terms Sheet is legally binding on the
parties, the parties agree that they shall enter into formal share sale and
shareholders agreements if considered necessary by any of the parties. The
formal agreements shall be consistent with the terms of this Terms Sheet and
shall contain representations and warranties usual for agreements of their kind.

The parties agree to bear their own costs in relation to the preparation of such
agreements.

10.

Confidentiality

This Terms Sheet and any other information disclosed by the parties to each
other (Confidential Information) is confidential and each party shall ensure
that the Confidential Information remains confidential, except that the parties
may make disclosure to their relevant advisors or as otherwise required by law
(including ASX rules).

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11.

Further Assurance

Each party shall sign and execute and do all deeds, acts, documents and things
as may reasonably be required by the other party to effectively carry out and
give effect to the terms and intentions of this Terms Sheet.

 

12.

Governing Law

The agreement constituted by this Terms Sheet shall be governed by and construed
in accordance with the law from time to time in the Democratic Republic of
Congo.  The parties agree to submit to the non-exclusive jurisdiction of the
Courts of Democratic Republic of Congo.

 

13.

Assignment

Neither party may assign or encumber any of its rights or obligations under this
Terms Sheet without the consent of the other party.

 

14.

Costs

Each party shall bear their own legal costs of and incidental to the
preparation, negotiation and execution of this Terms Sheet.

 

15.

Severance

If any provision of this Terms Sheet is invalid and not enforceable in
accordance with its terms, all other provisions which are self-sustaining and
capable of separate enforcement without regard to the invalid provision, shall
be and continue to be valid and forceful in accordance with their terms.

 

16.

Counterparts

This Terms Sheet may be executed in any number of counterparts, each of which
when executed and delivered to the other party shall constitute an original, but
all counterparts together shall constitute one and the same agreement.

 

17.

Good Faith

In progressing the matters envisaged by this Term Sheet and in advancing the
parties benefits and obligations contained in this Term Sheet the parties agree
at all times to use their best endeavours and act in good faith.

 

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EXECUTED by the parties as an agreement.

DATED:

EXECUTED by Panex Resources Inc in accordance with its constituent documents :

)
)
)
)

 

  /s/ Mark Gasson

 

 

 

 

 

Signature of director

 

Signature of director/company secretary

Mark Gasson

 

 

Name of director

 

Name of director/company secretary

EXECUTED by Everton Resources (BVI) Ltd in accordance with its constituent
documents :

)
)
)
)

 

  /s/ Klaus Eckhof

 

  /s/ Ross Doyle

 

 

 

Signature of director

 

Signature of director/company secretary

Klaus Eckhof

 

Ross Doyle

Name of director

 

Name of director/company secretary

EXECUTED by Amani Consulting sprl in accordance with its constituent documents :

)
)
)
)

 

  /s/ Cong Mao Huai

 

 

 

 

 

Signature of director

 

Signature of director/company secretary*

Cong Mao Huai

 

 

Name of director

 

Name of director/company secretary*

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EXECUTED by the Amani Vendors

  /s/ Cong Mao Huai

  /s/ signed

Cong Mao Huai

Witness Name:

119 Boulevard Tshatshi

Kinshasa Gombe

Democratic Republic of Congo

  /s/ Mbaya Bamwanya Didier

  /s/ signed

Mbaya Bamwanya Didier

Witness Name:

47, 2nd Avenue

Talboton, Johannesburg

South Africa 2192

  /s/ Bellarmin Mwanza Nshimba

  /s/ signed

Bellarmin Mwanza Nshimba

Witness Name:

47, 2nd Avenue

Talboton, Johannesburg

South Africa 2192

EXECUTED by BUREY GOLD LIMITED
ACN 113 507 203
in accordance with section 127 of the Corporations Act 2001 (Cth):

)
)
)
)

 

  /s/ Ron Gajewski

 

  /s/ Susmit Shah

 

 

 

Signature of director

 

Signature of director/company secretary

Ron Gajewski

 

Susmit Shah

Name of director

 

Name of director/company secretary

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APPENDIX A

WARRANTIES AND REPRESENTATIONS

Amani and Amani Vendors Representations and Warranties

Amani and the Amani Vendors jointly and severally represent and warrant to Burey
(which representations and warranties shall survive termination of this Terms
Sheet) that:

(a) the shareholders of Amani have full right, power and authority to sell,
assign and transfer the Sale Shares to Burey and such assignment conveys to
Burey lawful, valid and unencumbered beneficial title to the Sale Shares;

(b) the shareholder of Amani holds the absolute beneficial interest to the Sale
Shares and no other person has any rights of any nature in respect of the Sale
Shares;

(c) Amani is free from all mortgages, charges, liens and other encumbrances of
whatsoever nature;

(d) Amani and the Amani Vendors have not committed an act of bankruptcy or
attempted to make any composition or arrangement with its creditors or taken
advantage of any legislation for the time being in force for insolvent debtors;

(e) there is no litigation or proceeding of any nature concerning Amani, pending
or threatened against Amani or any other person which may defeat, impair,
detrimentally affect or reduce the right, title and interest of Amani in Giro,
including any plaint seeking forfeiture of the Giro Project;

(f) the exploitation permits (EPs) comprising the Giro Project are duly granted
and recorded in accordance with all relevant mining legislation;

(g) the EPs are in full force and effect and in good standing and not liable to
cancellation or forfeiture for any reasons and Amani and Giro are not in breach
or contravention of any of the terms and conditions upon which the EPs were
granted or of any other rule, regulation or provision of any applicable mining
legislation or any other statute concerning, affecting or relating to the EPs;

(h) there are no other agreements or dealings in respect of the Sale Shares that
had either been lodged at a relevant Governmental department but remained
unregistered or had not been lodged at the relevant Governmental department;

(i) there is not in existence any current compensation agreement with the owner
or occupier of any land which is subject to the EPs;

(j) there are no environmental liabilities relating to or affecting the EPs, nor
are there any circumstances relating to the EPs which may reasonably be expected
to give rise to future environmental liabilities;

(k) all mining information in relation to the EPs is complete and accurate in
all material respects;

(l) the EPs have been granted in respect of all of the ground described in
Exploitation Licence; and

(m) all documentation, prior binding contracts, constitutions, incorporation
documents, agreements and any other signed documents have been provided to
Burey, comprising the commitments of Amani towards Sokimo, and the commitments
and obligations of Giro towards Sokimo, the DRC Treasury and third parties.

Amani, Amani Vendors and Panex Representations and Warranties in relation to the
Association Agreement

Amani,  Amani Vendors and Panex jointly and severally represent and warrant to
Burey (which representations and warranties shall survive termination of this
Terms Sheet) that the following matters the subject of the Association Agreement
have been amended or clarity provided as described below AND that these
amendments and clarifications are the subject of properly executed
documentation:

(a)

Clause 9.1 - The outstanding “goodwill” amounts payable by Amani are US$2.5M to
the DRC Government and US$0.7M to Sokimo.  These amounts fall due for payment in
the context of completion of feasibility studies on the Giro Project.

(b)

Clause 10.1 - The deadline for completion of a Feasibility Study by 3 January
2014 has now been extended to 3 January 2016.

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Panex Representations and Warranties

Panex represents and warrants that since entering into the Share Purchase
Agreement it has not become aware of any matter that would render invalid any of
the representations made and warranties given by Amani and the Amani Vendors
above.

Indemnity by Amani, the Amani Vendors and Panex

Amani, the Amani Vendors and Panex shall indemnify and keep indemnified Burey
from and against and in respect of:

(a) any claims, demands, actions, losses, costs, expenses, proceedings or
liabilities of whatsoever nature suffered or incurred by Burey as a result of
any acts or omissions of Amani,  the Amani Vendors and Panex in connection with
or relating in any way prior to or on the date of this Terms Sheet; and

(b) all loss, damage and costs suffered by Burey arising in consequence of any
of the representations or warranties set out herein being false, misleading or
incorrect.

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