Exhibit 10.1

 

UNILATERAL PURCHASE OPTION CONTRACT

FOR MINING PROPERTIES

 

MINERA POLYMET LIMITADA

 

TO

 

GEOACTIVA SPA

 

Appearing in SANTIAGO DE CHILE, on April 30, 2013 are: as one party, GEOACTIVA
SPA, a mining company, RUT No.76.158.615-7, represented by Juan Paulo Bambach
Salvatore, Chilean, lawyer, married, national identity card No.7.010.465-2, and
Nicolás Noguera Correa, Chilean, married, commercial engineer, national identity
card No. 13.471.180-9, both domiciled at 5335 Avenida Presidente Riesco, 21st
floor, office 2104, Las Condes, hereinafter “Geoactiva” or “the Beneficiary”;
and as the other party, MINERA POLYMET LIMITADA, a legal entity as named, RUT
No. 76.975.260-9, represented by Kevin Mitchell, Canadian, married, businessman,
national identity card No. 14.498.971-1, both domiciled at 3260 Baldomero Lillo,
Vallenar, non-resident in this city, hereinafter the “Owner”; and all of the
above shall be referred to as the “Parties”. The appearing parties are of legal
age and have verified their identities with the aforementioned identity cards
and declare:

 

I:     Mining Properties

 

The Owner is the exclusive owner of the following mining properties for
exploitation, manifestations, and any other rights that arise from said
properties that are identified as follows:

 

1)

Exploitation concession “Perth 1 to 36”, registered on page 7, number 6, of the
2003 Property Register of the Freirina Registrar of Mines;

2)

Manifestation “Lancelot I 1 to 30”, registered on page 1,272, number 669, of the
2008 Discoveries Register of the Freirina Registrar of Mines;

3)

Manifestation “Lancelot II 1-20”, registered on page 1,274, number 670, of the
2008 Discoveries Register of the Freirina Registrar of Mines;

4)

Manifestation “Rey Arturo 1 to 30”, registered on page 1,276, number 671, of the
2008 Discoveries Register of the Freirina Registrar of Mines;

5)

Manifestation “Merlín I 1 to 24”, registered on page 1,563, number 824, of the
2010 Discoveries Register of the Freirina Registrar of Mines;

6)

Manifestation “Merlín I 1 to 10”, registered on page 1,560, number 823, of the
2010 Discoveries Register of the Freirina Registrar of Mines;

7)

Manifestation “Galahad I 1 to 10”, registered on the back of page 10,538, number
8,385, of the 2010 Discoveries Register and title in the name of the Owner is
registered on page 3,927, number 2,910, of the 2011 Discoveries Register, both
of the Copiapó Registrar of Mines;

 

 
 

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8)

Manifestation “Galahad IA 1 to 46”, registered on the back of page 10,540,
number 8,386, of the 2010 Discoveries Register and title in the name of the
Owner is registered on page 3,928, number 2,911 of the 2011 Discoveries
Register, both of the Copiapó Registrar of Mines;

9)

Manifestation “Tristán II 1 to 30”, registered on the back of page 10,536,
number 8,384, of the 2010 Discoveries Register and title in the name of the
Owner is registered on page 3,925, number 2,908 of the 2011 Discoveries
Register, both of the Copiapó Registrar of Mines;

10)

Manifestation “Tristán II A 1 to 5”, registered on page 10,942, number 8,702, of
the year 2010 and title in the name of the Owner is registered on page 3,926,
number 2,909, of the year 2011, both of the Discoveries Register of the Copiapó
Registrar of Mines;

11)

Manifestation “Percival III 1 to 30”, registered on the back of page 10,542,
number 8,387, of the year 2010 and title in the name of the Owner is registered
on page 3,929, number 2,912, of the year 2011, both of the Discoveries Register
of the Copiapó Registrar of Mines; and

12)

Manifestation “Camelot 1 to 60”, registered on page 11,529, number 8,546, of the
2011 Discoveries Register of the Copiapó Registrar of Mines.

For the purposes of the present document, all of the rights and mining
concessions referred to above shall be designated the “Mining Concessions”

 

II:     Essential Facts and Declarations

 

With respect to the Mining Concessions, the Owner declares that:

 

1)

it has sole and exclusive ownership of the Mining Concessions;

2)

there exists no overlap of any third party rights that may enable this third
party to explore the same terrain of the Mining Concessions;

3)

the Mining Concessions are free from mortgages, liens, prohibitions, promises or
options of any nature, prohibitions, litigations, and other third party rights
as in all other legal, judicial or voluntary measures that may affect, disturb
or hinder their free disposal or transfer;

4)

there exists no pending litigation in which the Owner may be a party or third
party and there is no known reason to initiate judicial action nor pending
judicial action that affects, may affect, be related or may be related in any
way to the Mining Concessions, or that affect or may affect the ownership of the
Owner;

5)

there neither exists nor is there knowledge of other mining concessions nor
mineral rights of the owner and/or other related persons - understood as such,
for all purposes of this contract, as that which is referred to in Article 100
of Law 18045 - that are currently valid on the area that comprises the
superficial face of the Mining Concessions, hereinafter “Area of Interest”;

 

 
 

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6)

the Mining Concessions have not been the object of other currently valid
contracts for promise of sale or mining option, nor have they been leased,
contracted, nor any title assigned to a third party; and

7)

the Mining Concessions are validly established, and those which are being
processed are currently valid, and none are affected by expiration or nullity of
any kind, nor is there any knowledge that any third party has tried to form
opposition, action of expiration or nullity against them, having fully and
timely paid the taxes and mining patents necessary for their establishment and
protection. The circumstances and facts to which the preceding declaration
refers have the essential and decisive nature for the execution of the present
contract and the exercising of the option contained herein.

III:      Mining Option

 

By the present act, the Owner grants to the Beneficiary an irrevocable option to
purchase, under the terms of Article 169 of the Mining Code, over the Mining
Concessions identified in clause I of this contract. The Beneficiary, for his
part, in this act declares to have received the offer and option to purchase and
reserves the power to freely exercise it within the terms and conditions
stipulated in the present contract (the “Contract” or “Option Contract”).

 

Moreover, understood as the purpose of the present Contract are:

(i)

the rights of any nature over the superficial lands, including ownership and/or
obligations, as well as water rights that correspond or will correspond to the
Mining Concessions and/or the Owner or related persons obtained for profit from
the Mining Concessions;

(ii)

any other pediment or manifestation that the Owner or related persons may make
in the Area of Interest, as well as the mining concessions originating
thereupon; and

(iii)

in general, all of the other rights and property that actually belong or will
belong in the future to the Owner, or related persons, and that may be necessary
or advisable to construct and/or carry out and/or exploit a mine and/or a
factory and may be found in the Area of Interest.

All of the rights and properties previously mentioned are understood to be
assigned and transferred from the Owner to the Beneficiary at the time
Geoactiva, without additional cost, exercises its option and without damage for
which, to practically fulfil that which is agreed to as soon as possible, the
Offeror must:

 

 

(i)

obtain transfer in its favour from related persons of those rights and
properties mentioned above that may figure in the designation or whose
possession, use, enjoyment or mere tenancy may be in the possession of said
related persons, in order to include them in the Contract at a later date;

 

(ii)

submit all of the legal records regarding said rights and properties to
Geoactiva;

 

(iii)

sign, together with the Beneficiary, any public or private documents that may be
required to expressly include such rights and properties in the Contract; and

 

 
 

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(iv)

give proof, at the time of including them in the Contract, that the facts
identified in clause II are effected and as such, carry out evidentiary
declarations as to the contents in the recently alluded to clause. All of the
above, with the conditions that are identified in the following clauses.

 

IV:          Standards and Conditions to Exercise the Option

 

The parties agree that the present Option Contract shall be governed by that
which is stipulated in this same document and by that which is set out in
Article 169 of the Mining Code.

 

The Beneficiary shall be absolutely empowered to state or not state consent, but
in any event is required to state acceptance by public document granted before
the same Notary, or whomsoever is substitute or replacement in the future, that
authorized this document, within the term of 48 months from the date of the
present document and complete full payment of the price, to the full
satisfaction of the Owner, by means established in the following clause.

 

The Beneficiary may at any time pay in advance for the exercising of the option
by way of pre-paying the full amount of the price that is outstanding.

 

The non-payment of any one of the price installments eliminates all right of the
Beneficiary to purchase. It shall be understood that the failure to pay
constitutes a decline by the Beneficiary and a withdrawal from the option to
purchase. Whether the withdrawal is expressed or derived from the non-payment of
any one of the price installments, the Owner will retain for itself, without
obligation of repayment, all of the sums received from the Beneficiary prior to
the decline or withdrawal, express or implied; amounts of any nature derived
from this Contract and from the decline or withdrawal of the Beneficiary, with
respect to the purchase and sale of the Mining Concessions, will be considered
sufficient compensation for the Owner by the fact of the Owner not having been
able to exploit its concessions or carry out other negotiations while this
Contract remained valid.

 

The Beneficiary’s obligation to pay shall be understood to be fully carried out
if, upon exercising the option in the manner previously mentioned, a bank cheque
in the name of the Owner is submitted with the document of acceptance to the
Notary that authorizes this document, with instructions to submit it at such
time as the Notary verifies that the Mining Concessions are registered in the
name of the Beneficiary and are free from mortgages, liens, bans, interdictions
and litigations.

 

The Beneficiary may opt for the offered sale with respect to all or some of the
Mining Concessions identified in clause I, being able to exclude one or more of
the concessions. Geoactiva will be free to designate which Mining Concessions,
rights, and goods will be the object of the final purchase and sale. In any
event, whichever of the Mining Concessions, rights or properties that the
Beneficiary designates, the price of sale agreed to in clause V shall remain
invariable. Without damage to the above, in the event that any of the
manifestations that are the object of this contract suffer from a defect that
may result in the expiration of the manifestation or the loss of preferential
rights, the Beneficiary may exclude it from the present contract, proportionally
discounting the value of the manifestation excluded from the total price.

 

 

 
 

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If this Contract is terminated for any reason, a simple requirement of the Owner
is that Geoactiva must issue, within a term of 30 business days, a public
document by which it lifts and cancels all registrations, subregistrations and
annotations that have been performed at the corresponding Registry of the
Registrar of Mines as a result of this Contract or in relation to it. Without
damage to the above and in the same event mentioned, the Beneficiary authorizes
and grants power of attorney to Juan Paulo Bambach Salvatore, and to Cristina
Olavarría Moral, so that either one, acting individually and separately, may
sign the referred to public document of cancellation and lifting.

 

V:     Price and Conditions of Payment

 

The sole price of the proposed purchase and sale is the amount of one million US
dollars (US $1,000,000.00), which is paid and shall be paid in the amounts and
dates detailed as follows:

 

a)

the amount of 17,727,325 pesos, equivalent to US $37,500 which will be paid with
this act to the Owner who will declare having received it to its full and
complete satisfaction;

b)

the amount of US $37,500, within the term of six (6) months from the date of the
present document, that is to say, no later than October 30, 2013;

c)

the amount of US $50,000, within the term of 12 months from the date of the
present document, that is to say, no later than April 30, 2014;

d)

the amount of US $50,000, within the term of 18 months from the date of the
present document, that is to say, no later than October 30, 2014;

e)

the amount of US $100,000, within the term of 24 months from the date of the
present document, that is to say, no later than April 30, 2015;

f)

the amount of US $100,000, within the term of 30 months from the date of the
present document, that is to say, no later than October 30, 2015;

g)

the amount of US $125,000, within the term of 36 months from the date of the
present document, that is to say, no later than April 30, 2016;

h)

the amount of US $250,000, within the term of 42 months from the date of the
present document, that is to say, no later than October 30, 2016;

i)

the amount of US $250,000, within the term of 48 months from the date of the
present document, that is to say, no later than April 30, 2017.

It shall be express proof that the payment of the sums indicated in letters (b)
to (i) will authorize the Beneficiary in the sense that the sums must be paid
only if it is decided to maintain the validity of and to exercise the option to
purchase the Mining Concessions; understanding, as already stated, that the
non-payment of any one of the instalments qualifies as a decline or withdrawal
of the option on the part of the Beneficiary.

 

 

 
 

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All of the payments will be carried out in national currency pesos, according to
the observed exchange rate published by the Banco Central, or whosoever replaces
it, two days prior to the payment date. The payments will be carried out at this
same Notary by means of a bank cheque made out in the name of the Owner and, at
the moment of being processed, a public document will be issued that gives
account of the same.

 

For the purpose of determining the individual price of each of the Mining
Concessions, the total amount established in the present clause shall be
understood to be divided among each of the Mining Concessions.

 

VI:     Royalty

 

In addition to the price of the purchase and sale indicated in this document,
once the option is exercised, the Beneficiary will pay the Owner, without
forming part of the purchase price and subject to the fulfilment of the
conditions mentioned hereinafter, a royalty (“Royalty”, ” Royalty NSR” or “NSR
Royalty”).

 

1)

The Royalty, to which the present clause refers, consists of an amount of money
equivalent to 1.5% of the net returns of smelting or “Net Smelter Return” or
“NSR”, that Geoactiva receives from the sale of extracts, gold metal, ingots and
other products obtained from the recovery of fine contents of gold, copper, and
cobalt extracted from the Mining Concessions (the “Royalty”, “Royalty NSR” or
“NSR Royalty”).

2)

The Royalty mentioned will accrue only if all of the following occur:

 

a.

Geoactiva initiates Commercial Production on the Mining Concessions, according
to that which is understood by this and that which is indicated hereinafter;

 

b.

from such Mining Concessions, minerals are extracted as profit from the mine
that Geoactiva constructs or from third party installations, that are of enough
benefit to be concentrations, gold metal, ingots and other products obtained
from the recovery of the fine contents of gold, copper, and cobalt;

 

c.

returns are received that – once the corresponding deductions that are indicated
hereinafter are carried out – produce the net smelting returns mentioned. The
Royalty NSR will accrue under the conditions above and will remain in place for
the time that concentrations or agglomerates are produced by the referred to
Mine.

3)

It shall be understood that “net smelting returns” are the gross amount that
Geoactiva has received from the sale of concentrations, gold metal, ingots, and
other products obtained from the recovery of fine contents of gold, copper, and
cobalt, originating from the properties that Geoactiva has acquired directly as
a result of the Contract, less, successively:

 

i)

all of the costs, expenses or adjustments corresponding to and appropriate to
the smelting, refining, management, and sale, which the smelting, refining or
other final purchaser has incurred;

 

 
 

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ii)

expenses for security and transportation from the properties or the factory for
profit, as long as the latter occurred on or off the properties to the factory,
refinery or other processing location;

 

iii)

all of the expenses for sampling and assaying carried out or incurred in
relation to the sampling and assaying carried out after the concentrations have
been isolated for the purpose of determining their composition; and

 

iv)

taxes and rights ad valorem for the production of that which is exported.

“Commercial Production”, and as such the date of initiation, shall be understood
as the commencement of the first sale to a Chilean or foreigner of concentrates,
gold metal, ingots and other products obtained from the recovery of fine
contents of gold, copper, and cobalt originating from the Mining Concessions.
Whether or not it is considered on an industrial level, the extraction carried
out for the purpose of obtaining minerals to carry out metallurgical tests that
Geoactiva considers advisable and, in general, serves to evaluate the site. Even
so, prior to Commercial Production, the Beneficiary shall not extract or sell at
any time mineral substances extracted from the Mining Concessions, except for
the purposes of metallurgical testing indicated above.

4)

The Royalty NSR shall accrue biannually, and once accrued shall be paid within
60 business days following the end of the previous six calendar months. For such
purposes, the Beneficiary will prepare a twice yearly liquidation with
sufficient records to determine its source of origin, which will be made
available to the Owner or the Owner’s representatives, together with the value
corresponding to the Royalty NSR. If the Owner does not make observances
regarding the liquidation within 30 business days following the submission on
the part of Geoactiva, it shall be understood that said liquidation has been
totally and definitively approved and payment has completed the required
compensation. The Owner will have the right to solicit an independent audit to
verify the liquidation carried out and its records.

5)

The Owner declares that the obligations stipulated in this clause are understood
to have modal character, since they are subject, as much to certain facts or
conditions that depend on one of the reports as well as the specific cases of
exploration or mining exploitation activity. Therefore, and furthermore, the
Owner states express consent that Geoactiva – agreeing to the contractual
position of purchaser that will eventually have and in due consideration of the
technical suitability and professional experience of its administration- may
decide at its sole discretion whether or not to initiate construction of a Mine
that includes one or more of the Mining Concessions, which Mining Concessions to
include in the exploitation or, for purposes that are considered opportune or
advisable, whether or not to begin Commercial Production, the class, size, type,
category, techniques, time, periods and any other particulars of the Mine and
Commercial Production.

6)

a) The Beneficiary must notify the Owner of the fulfilment of the conditions or
facts that cause the initiation of payment of the Royalty NSR, as soon as they
occur.

b) The payment of the Royalty NSR shall be carried out at the offices of the
Notary that authorizes this Contract, or whosoever succeeds or replaces.

 

 
 

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c) The twice yearly payment of the Royalty NSR shall be carried out by means of
a cashier’s cheque.

d) The payment shall be made in national currency pesos, according to the
observed dollar published by the Banco Central, or whosoever replaces, two days
prior to the payment.

7)

At any moment from the exercising of the option and subject to that which has
been completed in the Project Exploration Expenses under the terms prepared in
clause VII that follows, the Beneficiary may acquire 100% of the NSR Royalty.
The price of purchase of such right is fixed as follows:

 

a.

With respect to gold, by means of a sole payment of US $5 for each inferred
ounce of gold that is present in the Mining Concessions at the time of the
exercising of this rights, in conformity with the definition of “Inferred
Mineral Resource” in the “CIM Definition Standards on Mineral Resources and
Mineral Reserves”, which must be certified by a third party elected by mutual
agreement of the Parties. In the event of a lack of agreement regarding the
election, said third party will be elected by a designated arbitrator in
conformity with that which is discussed in clause XV of this Contract.

 

b.

With respect to copper, by means of a sole payment of US $0.005 per inferred
pound of copper that is present in the Mining Concessions at the time of the
exercising of this rights, in conformity with the definition of “Inferred
Mineral Resource” in the “CIM Definition Standards on Mineral Resources and
Mineral Reserves”, which must be certified by a third party elected by mutual
agreement of the Parties. In the event of a lack of agreement regarding the
election, said third party will be elected by a designated arbitrator in
conformity with that which is discussed in clause XV of this Contract.

Upon acquisition by Geoactiva of the NSR Royalty with respect to gold, copper or
both, the Royalty that is paid with respect to cobalt shall terminate
immediately; extinguishing all and any obligation of the Beneficiary in this
respect.

The procedure for the acquisition of the Royalty NSR by the Beneficiary shall be
the following:

 

a.

The Beneficiary must give written notice to the Owner of the intention to
certify the inferred reserves existing in the Mining Concessions and proposing
the third party to perform said certification. The notice must be delivered by
hand, with proof of receipt on the part of the Owner, or by means of a notarial
letter sent to the domicile of the Owner established at the beginning of the
present document, or as indicated later for these purposes.

 

b.

The Owner will have a term of ten (10) business days to declare its agreement or
disagreement with respect to the proposed third party for the certification,
which must be done in writing in the manner previously indicated in the
paragraph above. Upon not receiving communication within the term referred to,
it shall be understood that the designation has been accepted. In the event that
there may be no agreement as to the designation, the parties will meet for the
purpose of reaching an agreement within a maximum of five (5) business days from
the receipt of the written communication on the part of the Owner declaring its
disagreement. If agreement between the parties cannot be reached in this
instance, intervention is required by an arbitrator under the terms provided for
in clause XV that follows.

 

 
 

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c.

Agreement having been reached by the Parties, or once the third party has been
designated by an arbitrator, the measurement of the inferred reserved existing
on the Mining Concessions must proceed. The term for the issue of a report by
the third party designated in this respect must not exceed 180 business days.

 

d.

Once the report has been issued, the Beneficiary shall decide whether or not he
wants to exercise the right to acquire the Royalty and in the event that it is
decided to exercise the right, a written notice shall be given to the Owner
informing of the situation and setting a date to meet with the Notary
corresponding to the act of signing. In the communication the date and time of
the execution of the contract for the purchase of rights must be indicated. The
purchase and sale must be executed before the same Notary that executes the
present document, unless the parties are in agreement and decide on something
else.

 

e.

The price of the purchase and sale must be paid together with the execution of
the sale. In the event that the Owner does not appear at the execution of the
purchase and sale of rights conforming to that which is indicated in the present
clause, it is a situation that is not necessary to verify before third parties.
The Owner agrees to grant special power of attorney, as broad as the
corresponding rights to the Beneficiary, so that in name and in representation
of the Owner, the Beneficiary may sign and appear in the public document of
purchase and sale of the Royalty. The Beneficiary may agree to each and all of
the clauses and arrangements of the public document referred to, and its
supplementary documents, including being able to agree to the mediation clauses,
to waive resolutory action, to execute notarial instructions and all others that
may be necessary for the purposes indicated previously. The document of purchase
and sale shall be annotated in the margin of the present document for the
purpose of making public the fact of having materialized the purchase of rights.

8)

Without damage to that which is stipulated above, the Parties expressly
establish that by virtue of the present document the Owner is obligated to
abstain from selling, transferring or establishing any type of right or
obligation with respect to the NSR Royalty and to refrain from entering into any
act or contract with third parties, without first offering it to the
Beneficiary, maintaining this as the primary option to purchase. At no time
shall the Owner sell its NSR Royalty to a third party with terms and conditions
of price more favourable for the eventual purchaser than those offered to the
Beneficiary. If the Owner wishes to sell, cede, assign, or transfer the NSR
Royalty, the Beneficiary shall have a preferential right to purchase the NSR
Royalty, in conformity with what is established as follows:

 

a.

The Owner must give written notice to the Beneficiary of its intention to sell,
cede, assign, or transfer the NSR Royalty. The notice must be delivered by hand,
with proof of receipt on the part of the Beneficiary, or by means of a notarial
letter sent to the domicile of the Beneficiary established in the appearing
section of the present document, or as indicated later for these purposes. In
the communication the price, terms and conditions of the sale of the NSR Royalty
must be indicated.

 

 
 

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b.

The Beneficiary, within the 60 days following the date on which the notice was
received, may communicate the decision to purchase the NSR Royalty under the
terms and conditions identified in the notice of the Owner. The sale of the NSR
Royalty must be entered into before the same Notary who authorizes this
document, or whosoever succeeds or replaces, within the term of 30 days
following the date on which the Beneficiary sends the communication of
acceptance of the offer of sale. In the same communication, the Beneficiary must
indicate the date and time on which the purchase and sale was entered into and
citing the agreement of the Notary corresponding to the act of signing.

 

c.

The price of the sale must be paid together with the execution of the purchase
and sale. In the event where the Owner does not appear at the execution of the
purchase and sale of rights conforming to that which is indicated in the present
clause, it is a situation that is not necessary to verify before third parties.
The Owner agrees to grant special power of attorney, as broad as the
corresponding rights to the Beneficiary, so that in name and representation, the
Beneficiary may sign and appear in the public document of purchase and sale of
the Royalty. The Beneficiary may agree to each and all of the clauses and
arrangements of the public document referred to, and its supplementary
documents, including being able to include agreement with the mediation clauses,
to waive resolutory action, to sign notarial instructions and all others that
may be necessary for the purposes indicated previously. The document of purchase
and sale shall be annotated in the margin of the present document for the
purpose of making public the fact of having materialized the purchase and sale
of rights.

 

d.

If the Beneficiary does not communicate the intention to purchase the NSR
Royalty, the Owner may sell the NSR Royalty under terms and conditions equal or
more advantageous for the Owner within the term of 30 days from the expiration
of the maximum term for acceptance of the offer made by the Owner. Likewise, if
the Beneficiary sends a communication of acceptance of the offer to purchase and
does not agree with the day and time indicated for the execution of the document
of purchase and sale of the NSR Royalty, the Owner may, within the term of 30
days from said date, sell, assign, or transfer the NSR Royalty to any third
party under terms freely agreed to. Without damage to the above, in any event
the Beneficiary shall maintain the right conceded in number 7 above, having to
record this situation in the contract that serves as title for the acquisition
by the third party, furthermore declaring that this contract and all of the
obligations that the transferor has contracted by virtue of the present Contract
in relation to the Royalty shall be fulfilled exactly under the same terms as if
this Contract had been entered into by the transferee and being obligated to
impose equal obligations to any future transferee.

 

e.

If the Owner does not sell, cede or transfer the NSR Royalty to a third party
within the terms indicated above, it must newly initiate the process established
in the present numeral for any future sale.

 

 
 

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9)

The Owner expressly agrees to give up any resolutory action that may eventually
correspond to the payment of the royalty established in the present clause.

VII:     Exploration and Development Investment

 

During the term of the Option Contract, Geoactiva must carry out certain minimal
investments and expenses in exploration on the “Project”, defined by the limits
established in Annex A, that is attached to this Contract and is executed as of
this date under number [____] at this same Notary and include as much the Mining
Concessions as other concessions, hereinafter the “Exploration Expenses” in
conformity with the following schedule:

 

 

a)

in the period of 12 months from the date of the execution of the Option
Contract, the amount of US$500,000.

 

b)

upon the expiration of the period of 24 months from the execution of the Option
Contract, the accumulated amount of US$1,500,000.

 

c)

upon the expiration of the period of 36 months from the execution of the Option
Contract, the accumulated amount of US$2,500,000.

 

d)

upon the expiration of the period of 48 months from the execution of the Option
Contract, the total amount of US$3,500,000.

If Geoactiva does not invest all or part of the amount referred to in
Exploration Expenses, it will be authorized to fulfil this obligation by means
of a payment to the Owner of the unpaid amounts for the respective period.

 

For the purposes of this article, Exploration Expenses will be considered, among
others, as the following:

 

 

(i)

expenses incurred during activities for which the purpose is to confirm the
existence, location, quantity, quality or commercial value of mineral deposits
in relation with the mining concessions spanned by the Project (the “Project
Concessions”), including all type of geological, microscopic, geochemical and
geophysical measurements, core sampling, camp expenses, logistics, drilling,
geochemical outcrop sampling, soil, sediment and other samples in general, as
well as tests and maps for the purpose of identifying, surveying, exploring,
locating and delineating those deposits;

 

(ii)

expenses incurred to maintain the Project Concessions, including the payment of
mining patents;

 

(iii)

contribution payments, sales, import, export and customs taxes related to the
property, equipment and investments for the Project Concessions;

 

(iv)

payments made to the owners of the surface lands in order to obtain the right to
explore, develop and carry out the labour of mining on the Project Concessions;

 

(v)

payments made to third parties to use and/or acquire and/or for resolving any
dispute or request or any other in relation to the Project Concessions;

 

 
 

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(vi)

expenses for licencing, registration and inspection of the Project Concessions;

 

(vii)

expenses incurred for the amendment of titles for the Project Concessions;

 

(viii)

expenses associated with the acquisition of pending interest on any part of the
Project Concessions;

 

(ix)

all of the expenses related to service provided by third parties that relate to
the Project Concessions;

 

(x)

lawyer and consultant fees relating to any of the items identified above;

 

(xi)

reasonable travel and vehicle expenses incurred during the time in which they
were used for the exploration and development of the Project Concessions;

 

(xii)

all of the expenses incurred for promotion of and publicity for the Project
Concessions;

 

(xiii)

the expenses associated with environmental reparation, environmental studies,
metallurgic tests, studies, and feasibility analysis; brought about in relation
to the exploration, evaluation and analysis of the Project Concessions; and

 

(xiv)

reasonable administration expenses in an amount relating directly to the
Project.

The Beneficiary must inform the Owner, in a period of 30 days from the
expiration of the periods referred to above, with respect to the amounts
invested and the activities carried out in each period. It shall be understood
that the expenses have been totally approved by the Owner if it does not protest
the expenses within 10 days from the date the communication previously referred
to is sent.

 

VIII:     Study of Mining Concessions

 

During the option period, the Beneficiary will have the right, free from all
charge or compensation, to study the Mining Concessions, its reserves,
possibilities of exploitation and technical characteristics. This right may be
exercised on the surface and subsurface occupied by the Mining Concessions,
within its boundaries, from the date of the signing of this Option Contract.
Upon the exercising of the rights indicated, the Beneficiary may enter the area
of the Mining Concessions with its personnel, contractors, assessors, material,
equipment and other means, to apply them for the purposes indicated, to carry
out sampling, drilling, running galleries and carrying out other mining work, to
the degree that may be necessary or advisable to capably execute the studies
identified. The activity of exploration may be carried out daily for 24 hours as
deemed advisable, according to operational rules. The samples and testings
obtained by the Beneficiary during studies will not be considered mineral and
will be the property of the Beneficiary.

 

In the case of abandonment, the Beneficiary shall submit to the Owner, within a
reasonable term and without any charge, all of the information obtained as a
result of the exploration carried out on the Mining Concessions. This
information shall include the reports containing the complete or partial results
of the geological, geochemical, metallurgical and hydrological studies, drilling
samples, geophysical plans and reports and all of the interpretive information
obtained from the labour of exploration and exploitation carried out.

 

 

 
 

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The Beneficiary, in mining work and activity of any nature that is carried out
on the Mining Concessions, must conform to all current Chilean procedures and
regulations for mining and environmental safety, being the exclusive
responsibility of the Beneficiary any accident, damage or destruction caused to
the properties or people.

 

For its part, the Owner will be solely responsible for and must maintain
indemnity to the Beneficiary for any damage, loss, responsibility, fines,
penalties, and expenses or other responsibility stemming from the operations
that have been carried out by the Owner on the Mining Concessions at any time
prior to the date on which the Beneficiary may exercise this Option Contract.

 

IX:     Information

 

For the purpose of the Owner being able to fulfil the applicable regulations in
conformity with the United States of America “Securities and Exchange
Commission”, the Beneficiary must inform the Owner in writing quarterly of the
work or activity carried out by the Beneficiary that relates to the exploration
and exploitation of the Mining Concessions. This notification must be sent to
the Owner no later than January 31, April 31, July 31, and October 31 of each
year that the Contract remains in force.

 

X:     Mining and Processing Patents

 

The Parties agree that the mining patents accrued during the current term of the
mining option, of which account is given in this document, shall be current,
being supported by the Beneficiary, sums which shall be reimbursed to the Owner
against the presentation of the receipt giving account of the corresponding
payment. Likewise, the Parties agree that the expenses associated with the
processing, establishment, defense and maintenance of the Mining Concessions
that occur during the period in which the mining option, of which account is
given in this document, is in force, will be reimbursed by the Beneficiary to
the Owner, upon presentation of the corresponding receipts of payment and as
long as the option referred to in this document is valid. Without damage to the
above, the Parties agree and give proof that the Owner will be solely
responsible for the procedures of establishment, publication and registration of
the Mining Concessions, as well as for the defence and maintenance of the same,
during the option term, having to exercise and process each and every one of the
judicial actions and appeals necessary and/or advisable to protect and maintain
the validity of the Mining Concessions, including the obligation to infer
opposition, expiration dates and invalidity and to contest those who file
oppositions.

 

Despite this, the Beneficiary may personally carry out all of the actions and
exercise the actions that are deemed pertinent for the preservation of the
Mining Concessions, a fact that will not in any event implicate that the Owner
is free of its responsibility.

 

In view of the above, in this act, the Owner grants special power of attorney to
the Beneficiary, so that it may, acting by way of its representatives or power
of attorneys especially designated for such purposes, represent it in all
judicial actions that relate to the protection of the Mining Concessions,
conferring on the Beneficiary the authorization set out in both sections of
Article VII of the Code of Civil Procedure, especially authorizing the
Beneficiary to cease the filed action, accept the opposing demand, answer
interrogatories, refuse appeals or legal terms, cede or compromise, bestow
arbitrational powers on arbitrators, approve and receive agreements.

 

 

 
 

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XI:     Prohibition

 

The Owner, in this act, establishes in favour of the Beneficiary a prohibition
from mortgaging, transferring and entering into acts and contracts over each and
every one of the Mining Concessions, without previous written consent from the
Beneficiary, and likewise over all of the manifestations, pediments and/or
mining concessions for exploration or exploitation that the Owner may solicit,
acquire and/or of which may be the owner as of this date in the Area of
Interest.

 

XII:     State of the Property

 

The Mining Concessions, as well as any other mining right, shall be sold in kind
or as real estate, in the state in which they are found, which is known by the
Beneficiary, and with all of their active or passive uses, customs, rights, and
obligations with all of their patents up-to-date, free from mortgages,
encumbrances, prohibitions, litigations, restrictions, contracts of purchase and
sale of minerals in situ, leases or any other type of acts or contracts,
mortgages or actual or personal rights that may impede the free use, enjoyment,
disposal and application of the Mining Concessions.

 

XIII:     Material Submission

 

The material submission of the Mining Concessions is made in this act, for the
purposes of authorized study and exploitation, all according to that which is
set out in the present document. All of the above is without damage to the
declaration of such at the moment of the definitive acceptance of the option to
purchase.

 

XIV:      Assignments and Transfers to Third Parties

 

The Beneficiary may sell, assign, transfer or dispose of in any other form, in
all or in part, of its rights in this Contract, providing that the purchaser or
assignee of the Beneficiary’s rights declares in the contract that serves as
acquisition of title that they will exactly fulfil all and the same obligations
that the transferor has contracted by virtue of the present Contract, under the
same terms and as if the Contract had been entered into by said assignee and
being obligated to impose equal obligations to any future assignee. Likewise,
the Beneficiary shall be authorized to exercise the option to purchase directly
or through a company designated by the Beneficiary for said purpose. The owner
may assign the rights and obligations corresponding to this Contract with prior
written consent from the Beneficiary.

 

XV:     Expenses

 

The expenses and rights from the execution of the present document and
eventually those of the document of acceptance and the expenses corresponding to
the registrations at the Registrar of Mines will be the responsibility of the
Beneficiary and the cost of the copies will be the responsibility of the party
who requests them. Each party will assume the taxes and other personal expenses
that are derived from the option and the purchase and sale mentioned.

 

 

 
 

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XVI:     Arbitration

 

Any difficulty or controversy produced between the contracting parties with
respect to the application, interpretation, duration, validity or execution of
this Contract or any other cause shall be submitted to arbitration, conforming
to the Procedural Arbitration Rule of the Arbitration and Mediation Centre of
Santiago, valid at the moment of request.

 

The parties grant irrevocable special power of attorney to the Santiago A. G.
Chamber of Commerce, so that, at written request from any party, it may
designate a mixed arbitration made up of members of the arbitrational body of
the Arbitration and Mediation Centre of Santiago.

 

There shall be no recourse against the resolutions of the arbitrator, the
parties having expressly given up recourse. The arbitrator is especially
authorized to resolve all matters related to their competency and/or
jurisdiction.

 

XVII:     Withdrawal, Modifications, Full Agreement

If a party does not insist on the strict fulfilment of any resolution of this
Contract, or if a right, authorization or appeal is not exercised upon incurring
an infractions, this shall not constitute a withdrawal of any of the resolutions
of this Contract, nor shall it limit the right of the party at any time in the
future to make necessary any resolution or the exercising of any right. No
modification of any type of this Contract shall be valid unless it is made in
writing and duly signed by the parties. This Contract contains the full
agreement of the parties and replaces all previous agreements and understandings
between the parties related to the topic that is the object of this Contract.
This Contract will be mandatory for the parties and will be transferred in
benefit of the respective successors and transferees permitted by the parties

 

XVIII: Authorization to Enter the Area of Interest

 

While the term for the Option Contract is in force, the Owner may always enter
the Area of Interest, having unrestricted access to all of the sectors contained
within the Area of Interest, and likewise to any of the sites on which the
Beneficiary may be carrying out activities of any nature. The visits shall be
coordinated with 48 hours prior written notice to the Beneficiary and must occur
on business days, between 9:00 and 18:00 hrs., at all times observing the
security measures imparted by the Beneficiary. The Beneficiary shall not be
responsible for any accident that may occur to the Owner’s assistants or
representatives during said visits.

 

XIX:          Option Contract over Calizas 1 – 20

 

The parties give proof that as of this date the Beneficiary has a signed
unilateral purchase option contract with Toronto Trust S.A. for the acquisition
of the mining concessions designated Calizas 1 – 20, located in the same area in
which the Mining Concessions are located. In this act the Beneficiary agrees to
assign said contract to the Owner, without any cost to the Owner, in the event
that the Beneficiary decides to withdraw from the present Option as well as the
option contract referred to and provided that it was not the intention to assign
said contracts to a third party for any of the titles.

 

 

 
 

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XX:     Authorization for the Holder and Special Power of Attorney

 

The holder of a certified copy of the present document is authorized to request
registrations, subregistrations and annotations made in the respective
registries. The lawyers Juan Paulo Bambach Salvatore y Cristina Olivarría Moral
are also authorized so that, acting individually, either one of them may correct
the citation or omissions errors which the parties may have incurred in this
Contract, being able to present, for such purposes, one or more bills before the
respective registrar and/or to grant or sign the necessary or advisable public
or private documents.

 

XXI:     Applicable Legislation and Domicile

 

The present Contract is governed by the laws of the Republic of Chile. For all
legal purposes the parties establish their domicile in the community and city of
Santiago. 

 

Legal Capacity

 

The legal capacity of Nicolás Noguera Correa and Juan Paulo Bambach Salvatore to
represent GEOACTIVA SPA consists of public document dated September 6, 2012,
signed at the Notary María Gloria Acharán Toledo. The legal capacity of Kevin
Mitchel to act in representation of MINERA POLYMET LIMITADA, consists of public
document of constitution granted on July 17, 2007, before the Notary of
Vallenar, Ricardo Olivares Pizarro.