Exhibit 10.1 

 

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480 – 1500 West Georgia Street

 

Vancouver, B.C. V6G 2Z6

 

July 14, 2020

Golden Minerals Company
350 Indiana Street, Suite 650

GMC, Colorado, 80401

 

Attention: Warren Rehn, CEO

 

Dear Sirs:

 

Re:Option To Purchase Agreement in respect of the Santa Maria Mine in the State
of Chihuahua, Mexico involving Fabled Copper Corp. (“Fabled”) and Golden
Minerals Company. (“GMC”)

 

GMC and Fabled (referred to herein as the “Parties”, and individually as a
Party) have entered into discussions in respect of the grant of an Option to
Purchase by GMC to Fabled concerning mining claims that make up the Santa Maria
Mine in the State of Chihuahua, Mexico.

 

This letter of intent (this "Letter of Intent”) is to confirm the essential
terms and conditions upon which Fabled will acquire the Property. Upon execution
of this Letter of Intent, the Parties shall instruct legal counsel to prepare a
Definitive Agreement (as hereinafter defined) which upon execution shall replace
and supersede this Letter of Intent. Until such execution, this Letter of Intent
shall continue in full force and effect unless otherwise terminated under the
terms hereof.

 

In consideration of the mutual covenants contained herein, the Parties agree as
follows:

 

1.Definitions   

(a)“Closing” means the completion of the Transaction and related transactions;
   

(b)“Closing Date” means that date designated by the Parties which is within five
business days after the receipt of final acceptance from the TSXV for the
Transaction;    

(c)“Definitive Agreement” means a formal agreement containing the terms in this
Letter Agreement and such other terms, conditions, representations, warranties,
conditions, indemnities and agreements as are customary for transactions of this
nature;    

(d)“Due Diligence Period” means a period commencing on the date of execution of
this Letter and ending on July 24, 2020;

 

 

 

(e)“Effective Date” means the date of the completion of the Transaction;    

(f)"Encumbrances" means mortgages, charges, pledges, security interests, liens,
encumbrances, actions, claims, demands and equities of any nature, including
without limitation, any liability for accrued but unpaid taxes;    

(g)“Fabled Shares” means common shares in the capital of Fabled;    

(h)“Geological Report” means a current Geological Report on the Property issued
to Fabled, and compliant with National Instrument 43-101 – Standards of
Disclosure for Mineral Projects;    

(i)“GMC” means Golden Minerals Company, a Delaware Corporation    

(j)“Private Placement” means an equity private placement by Fabled to raise
aggregate gross proceeds to a minimum of CAD$5,000,000 at a price commensurate
with market conditions;    

(k)“Property” means the mining claims that make up the Santa Maria Mine in the
State of Chihuahua, Mexico as further described in Schedule “A”;    

(l)“Securities Laws” means the securities legislation having application, the
regulations and rules thereunder and all administrative policy statements,
instruments, blanket orders, notices, directions and rulings issued or adopted
by the applicable securities regulatory authority, all as amended;    

(m)“Transaction” means the issuance of the option to acquire the Property by
Fabled; and    

(n)“TSXV” means the TSX Venture Exchange.    

2.List of Schedules

 

2.1Description Schedule       Property Description “A”  Issued and Outstanding
Share Capital of Fabled “B”

 

3.Completion of Transaction   

3.1Relying upon the representations and warranties herein contained, and subject
to the terms and conditions hereof, at the Closing, the parties will use
commercially reasonable efforts to complete the Transaction.   

4.The Transaction   

4.1On the Closing Date, GMC will grant Fabled an option to acquire the Property
on the following terms:   

(a)Fabled will pay to GMC on Closing USD$500,000 in cash and issue to GMC,
1,000,000 Fabled Shares;    

(b)Fabled will pay to GMC USD$1,500,000 in cash 12 months after Closing;

 

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(c)Fabled will pay to GMC USD$2,000,000 in cash 24 months after Closing;    

(d)Upon exercise of the option, Fabled will grant to GMC a 1% NSR royalty on the
Santa Maria and Punto Com concessions, in form and substance reasonably
satisfactory to GMC.    

4.2The Parties agree to use their commercially reasonable efforts to enter into
a Definitive Agreement, on or before August 12, 2020 and prepare all necessary
documentation and apply for and obtain TSXV approval of the Transaction and all
other consents, orders or approvals as counsel may advise are necessary or
desirable for the implementation of the Transaction.   

5.Fabled Regulatory Requirements   

5.1GMC acknowledges that:   

(a)the Transaction will be subject to the acceptance of the TSXV, which will be
contingent on satisfaction of a number of regulatory requirements including:    

(i)Fabled having delivered the Geological Report that is acceptable to the TSXV;
   

(ii)Fabled having delivered a suitable title opinion on the Property in a form
acceptable to the TSXV;    

(iii)Fabled having gained the approval of its shareholders for the Transaction;
and    

(iv)the TSXV accepting the Private Placement and the Transaction in accordance
with the rules and policies of the TSXV; and    

(b)the 1,000,000 Fabled Shares to be issued to GMC pursuant to the Transaction
will be subject to resale restrictions under applicable securities laws and the
rules and policies of the TSXV and may also be subject to escrow requirements or
other resale restrictions under the rules and policies of the TSXV.    

6.Due Diligence   

6.1Fabled and GMC agree that:   

(a)within five business days from the date of execution of this Letter of
Intent, Fabled will provide a complete, final and commercially reasonable
request for due diligence materials. GMC shall use commercial reasonable best
efforts to provide to Fabled the requested due diligence materials within ten
business days of receipt of the request for such due diligence materials or as
soon as practicable thereafter.    

(b)GMC will use commercially reasonable efforts to cooperate with Fabled in
complying with the reasonable requirements of Fabled, and with any auditor or
advisor of Fabled including but not limited to providing information for the
Geological Report;    

(c)Fabled shall have the Due Diligence Period to determine, acting reasonably,
whether its review has uncovered materially adverse information which makes it
commercially unfeasible to complete the Transaction as originally contemplated
by the Parties, at which time Fabled will advise GMC in writing whether, acting
reasonably, it intends to terminate the Transaction on the basis of such
information and if so, this Letter of Intent shall terminate and be of no
further force and effect;

 

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(d)within five business days from the date of execution of this Letter of
Intent, GMC will provide a complete, final and commercially reasonable request
for due diligence materials. Fabled shall use commercial reasonable best efforts
to provide to GMC the requested due diligence materials within ten business days
of receipt of the request for such due diligence materials or as soon as
practicable thereafter;    

(e)Fabled will use commercially reasonable efforts to cooperate with GMC in
complying with the reasonable requirements of GMC, and with any auditor or
advisor of GMC;    

(f)GMC shall have the Due Diligence Period to determine, acting reasonably,
whether its review has uncovered materially adverse information which makes it
commercially unfeasible to complete the Transaction as originally contemplated
by the Parties, at which time GMC will advise Fabled in writing whether, acting
reasonably, it intends to terminate the Transaction on the basis of such
information and if so, this Letter of Intent shall terminate and be of no
further force and effect; and    

(g)Fabled and GMC agree to keep all information and documents provided or
otherwise acquired pursuant to this Section 6 confidential, except to the extent
required to be disclosed by law or TSXV rules.    

7.Standstill   

7.1From the date of execution of this Letter of Intent until completion of the
transactions contemplated herein or the earlier termination hereof, GMC will
not, directly or indirectly, solicit, initiate, assist, facilitate, promote or
encourage proposals or offers from, entertain or enter into discussions or
negotiations with any persons, entity or group in connection with the
acquisition or distribution of the Property, or any amalgamation, merger,
consolidation, arrangement, restructuring, refinancing, or sale of any material
assets or part thereof, unless such action, matter or transaction is part of the
transactions contemplated in this Letter of Intent or is satisfactory to, and is
approved in writing in advance by the other Party hereto (with such approval not
being unreasonably withheld or delayed) or is necessary to carry on the normal
course of business; provided however, that this Section 7 shall not apply to any
transaction involving the securities of GMC.   

8.[INTENTIONALLY DELETED]   

9.Representations, Warranties and Covenants of GMC   

9.1GMC represents, warrants and covenants to Fabled as of the date hereof and at
the Closing that:   

(a)GMC is a corporation duly incorporated, validly existing and in good standing
under the laws of the state of Delaware and has the power, authority and
capacity to enter into this Letter of Intent, to carry out its terms and has all
necessary corporate power to own the rights to the Property;    

(b)The contracts which give GMC the rights to the Property are in good standing
and GMC is not in default under such contracts;

 

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(c)Warren Rehn, CEO of GMC, has sufficient authority to execute and deliver this
Letter of Intent;;    

(d)neither the execution and delivery of this Letter of Intent, nor the
completion of the transactions contemplated hereby will conflict with or result
in any breach of any of the terms and provisions of, or constitute a default
under, the constating documents, director or shareholder minutes of GMC, or any
agreement or instrument to which GMC is a party or by which the Property are
bound or any order, decree, statute, regulation, covenant or restriction
applicable to GMC;    

(e)GMC shall use its commercially reasonable efforts to obtain required consents
to the Transaction of relevant third parties in respect of the Property; and    

(f)GMC shall use its commercially reasonable efforts to assist Fabled in the
preparation of the Geological Report.    

10.Representations, Warranties and Covenants of Fabled   

10.1Fabled represents and warrants to and agrees with GMC as of the date hereof
and on the Closing that:   

(a)Fabled is a corporation duly incorporated and validly existing under the laws
of the Province of British Columbia and is in good standing with respect to the
filing of annual returns, and has the power, authority and capacity to enter
into this Letter of Intent and to carry out its terms and to conduct its
business as such businesses is now being conducted;    

(b)Fabled is a “reporting issuer” within the meaning of securities laws in
British Columbia, Alberta and Saskatchewan, and is not in default of any
requirement of any applicable securities laws and neither the TSXV or any other
regulatory authority having jurisdiction has issued any order preventing or
suspending trading of any securities of Fabled;    

(c)the common shares of Fabled are listed for trading on the TSXV;    

(d)the execution and delivery of this Letter of Intent have been duly authorized
by the board of directors of Fabled;    

(e)the authorized share capital of Fabled consists of an unlimited number of
common shares without par value of which as of the date of this Letter of Intent
44,009,760 Fabled Shares are issued and outstanding as fully paid and
non-assessable shares, subject only to the issuance of additional Fabled Shares
upon exercise of outstanding options described in Schedule “B”;    

(f)Fabled will use its commercially reasonable efforts to complete the Private
Placement prior to or concurrent with Closing;    

(g)as soon as possible following the execution of this Letter of Intent, Fabled
shall use its commercially reasonable efforts to prepare the Geological Report
pertaining to the Property;    

(h)as soon as possible following the execution of this Letter of Intent and in
any event within 10 days of receipt of the Geological Report, Fabled shall use
its commercially reasonable efforts to complete and file its application
including, but not limited to the Geological Report pertaining to the Property
with the TSXV for acceptance for filing of the Transaction; and

 

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11.General Conditions Precedent   

11.1The respective obligations of the Parties hereto to consummate the
transactions contemplated hereby are subject to the satisfaction, on or before
the Closing Date, of the following conditions any of which may be waived by the
mutual consent of such Parties without prejudice to their rights to rely on any
other or others of such conditions:   

(a)the TSXV shall have accepted the Transaction;    

(b)the Transaction shall have been approved or consented to by the shareholders
of Fabled and GMC if and to the extent required;    

(c)the Definitive Agreement, shall have been duly executed and delivered by GMC
and Fabled and the consent of all other relevant parties shall have been
received;    

(d)where applicable Fabled shall have completed the Fabled Consolidation;    

(e)A minimum of CAD$4,000,000 shall have been raised by Fabled via the Private
Placement;    

(f)there shall not be in force any order or decree restraining or enjoining the
consummation of the transactions contemplated by this Letter of Intent,
including, without limitation, the Transaction; and all consents, orders and
approvals required or necessary or desirable for the completion of the
transactions provided for in this Letter of Intent shall have been obtained or
received from the persons, authorities or bodies having jurisdiction in the
circumstances, all on terms satisfactory to each of the Parties hereto, acting
reasonably; and    

(g)Fabled and GMC shall have received from each other any legal opinions from
counsel and certificates from officers with respect to such matters as counsel
of Fabled and GMC may require, acting reasonably.    

12.Conditions Precedent in favour of Fabled   

12.1Fabled’s obligation to complete the Transaction is subject to the following
conditions precedent which are to be satisfied, as applicable, on or before the
Closing:   

(a)Fabled having obtained the consent or approval of any parties from whom
consent to the Transaction is required, including the TSXV;    

(b)Fabled having had a reasonable opportunity to review and approve of all
material documentation in connection with the Transaction, including without
limitation, the Geological Report pertaining to the Property;    

(c)Fabled having been able to obtain a suitable Title Opinion, as such term is
defined in the policies of the TSXV, in respect of the Property;    

(d)Fabled having successfully incorporated a wholly owned subsidiary in Mexico;

 

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(e)the representations and warranties of GMC contained in this Letter of Intent
and the Definitive Agreement will be true and correct in all material respects
at and as of the Closing;    

(f)all covenants, agreements and obligations hereunder or under the Definitive
Agreement on the part of GMC to be performed or complied with at or prior to the
Closing contained herein will have been performed and complied with in all
material respects; and    

The conditions set forth in section 12 of this Letter of Intent are for the
exclusive benefit of Fabled and may be unilaterally waived by Fabled to the
extent permitted by applicable laws or regulatory requirements in whole or in
part at any time.

 

13.Conditions Precedent in favour of GMC   

13.1The obligations of GMC to complete the Transaction are subject to the
following conditions precedent, which are to be satisfied, as applicable, on or
before the Closing, or such earlier date as may be indicated:   

(a)GMC having had a reasonable opportunity to approve of all documentation in
connection with the filings with the TSXV for acceptance of this Transaction;
   

(b)Fabled shall have furnished GMC with a conditional approval letter from the
TSXV conditionally accepting the Transaction;    

(c)the representations and warranties of Fabled contained herein will be true
and correct in all material respects at and as of the Closing;    

(d)all covenants, agreements and obligations hereunder on the part of Fabled to
be performed or complied with at or prior to the Closing contained herein will
have been performed and complied with in all material respects; and    

(e)Fabled shall have made the option payment due to J. Cervantes on or about
August 4, 2020 in the amount of US$40,000.    

The conditions set forth in section 13 of this Letter of Intent are for the
exclusive benefit of GMC and may be waived by GMC in whole or in part at any
time.

 

14.Public Disclosure   

14.1No disclosure or announcement, public or otherwise, in respect of this
Letter of Intent or the transactions contemplated herein will be made by any
Party without the prior written agreement of the other Parties as to timing,
content and method, providing that the obligations herein will not prevent
either Party from making, after consultation with the other Parties, such
disclosure as its counsel advises is required by applicable laws or the rules
and policies of the TSXV.   

14.2Unless and until the transactions contemplated in this Letter of Intent will
have been completed, except with the prior written consent of the other Parties,
each of the Parties and its respective employees, officers, directors,
shareholders, agents, advisors and other representatives will hold all
information received from the other Party in strictest confidence, except such
information and documents already available to the public or as are required to
be filed or disclosed by applicable law.

 

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14.3All such information and documents in any form or medium whatsoever,
including but without limitation copies thereof and derivative materials made
therefrom will be returned to the Party originally delivering them, or at the
direction of such Party, destroyed in the event that the transactions provided
for in this Letter of Intent are not completed.   

15.Termination   

15.1This Letter of Intent may be terminated by mutual agreement of the
respective Parties hereto.   

15.2Unless otherwise agreed in writing by Fabled and GMC, this Letter of Intent
shall terminate without further notice or agreement in the event that:   

(a)the Transaction is rejected by the TSXV and all recourse or rights of appeal
have been exhausted;    

(b)any conditions precedent set out in Sections 11, 12 and 13 hereof are not
satisfied, released or waived on or before the Effective Date or such earlier
date indicated therein; or    

(c)the Effective Date has not occurred on or before September 30, 2020 or such
later date as may be approved in writing by Fabled and GMC.    

15.3Unless otherwise agreed in writing by Fabled and GMC, Fabled may terminate
this Letter of Intent by notice to GMC if it elects not to make the payment set
forth in Section 13.1(e), provided, however, that if such notice of termination
has not been received prior to July 31, 2020, then Fabled shall be obligated to
make such payment or reimburse GMC if it makes such payment, regardless of
whether the Transaction is consummated or the option is exercised.   

16.General   

16.1The representations, warranties and covenants made by Fabled and GMC in this
Letter of Intent will survive the Closing and, notwithstanding such Closing or
any investigation made by or on behalf of either Fabled and GMC or any other
person acting on their behalf, will continue in full force and effect for a
period of one year after the Closing.   

16.2Each of Fabled and GMC agree that, whether or not the Transaction is
consummated, each will pay its own and its representatives’ fees and expenses,
including any fee for advice or opinions incurred in connection with the
negotiation, preparation, execution and delivery of this Letter of Intent
Agreement and any other agreements, documents, opinions or evaluations
contemplated hereby, including the Definitive Agreement.   

16.3This Letter of Intent will enure to the benefit of and be binding upon the
Parties hereto and their respective successors and permitted assigns. This
Letter of Intent may not be assigned by any Party without the prior written
consent of the others.   

16.4This Letter of Intent may be executed in several counterparts, each of which
will be deemed to be an original and all of which will together constitute one
and the same instrument. Delivery of a copy by facsimile or other electronic
means will be deemed to be delivery of an original.   

16.5This Letter of Intent is intended to be a binding agreement between the
Parties subject to the terms and conditions hereof.

 

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16.6Time is of the essence of this Letter of Intent.   

16.7This Letter of Intent will be governed by and construed in accordance with
the laws of the Province of British Columbia and the laws of Canada applicable
therein.   

16.8If any provision of this Letter of Intent is invalid, illegal, or incapable
of being enforced by reason of any rule of law or public policy, then such
provision will be severed from and will not affect any other provision of this
Letter of Intent. Upon such determination, the Parties will negotiate in good
faith to modify such terms or provisions so as to affect the original intent of
the Parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
All other provisions of this Letter of Intent will, nevertheless, remain in full
force and effect and no provision will be deemed dependent upon any other
provision unless so expressed.

 

[Signature page follows.]

 

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If you agree to the above terms, kindly sign two copies of this letter
signifying your approval and acceptance and return one fully executed letter to
the writer at your earliest convenience. Upon acceptance this offer becomes a
binding agreement subject to its terms.

 

  Yours truly,       FABLED COPPER CORP.       Per: /s/ David. W. Smalley  
David W. Smalley, Lead Director

 

The undersigned hereby agrees to the foregoing terms and conditions of this
Letter of Intent this 14th day of July, 2020.

 

GOLDEN MINERALS COMPANY

 

Per: /s/ Warren Rehn   Warren Rehn, CEO  

 

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