OPTION TO PURCHASE AGREEMENT

 

THIS AGREEMENT

made as of the 18th day of January, 2007.

BETWEEN:

BEESTON ENTERPRISES LTD.,

a Nevada Corporation, having an office at #200-1687 West Broadway, Vancouver,
British Columbia, Canada V6J 1X2

(Hereinafter referred to as the "Optionor")

OF THE FIRST PART

 

AND:

KRANTI RESOURCES INC.,

a Nevada Corporation, having an office at #103-

8318 120th Street, Surrey, British Columbia, Canada V3W 3N4

 

(Hereinafter referred to as the "Optionee")

OF THE SECOND PART

WHEREAS:

A.

The Optionor is the owner of a certain mineral property located in the Clinton
Mining Division of British Columbia, Canada and more particularly known and
described in Schedule "A" attached hereto and forming part of this Agreement
(the "Property").

B.

The Optionor has agreed to grant the Optionee the right to explore and develop,
and if the Optionee so elects, to acquire the Property from the Optionor on the
terms and subject to the conditions hereinafter set forth.

NOW THEREFORE THIS AGREEMENT WITNESSETH

that in consideration of the premises and the representations, warranties,
covenants and agreements herein contained the parties hereto covenant, agree,
represent and warrant each with the other as follows:

DEFINITIONS

The following words, phrases and expressions shall have the following meanings
in this Agreement:

(a) "Expenditures" shall mean all direct or indirect expenses of or incidental
to Mining Operations;

(b) "Dollars" and "$" shall mean lawful money of Canada unless otherwise
specifically provided;

(c) "Net Smelter Returns" shall mean the net amount of money received by the
Optionee for its own account from the sale of ore, or ore concentrates or other
products from the Property to a smelter or other ore buyer after deduction of
smelter and/or refining charges, ore treatment charges, penalties and any and
all charges made by the purchaser of ore or concentrates, less any and all
transportation costs which may be incurred in connection with the transportation
of ore or concentrates; and

(d) "Mining Operations" shall mean every kind of work done on or in respect of
the Property or the products therefrom by or under the directions of the
Optionee and, without limiting the generality of the foregoing, includes the
work of assessment, geophysical, geochemical and geological surveys, studies and
mapping, investigating, drilling, designing, examining, equipping, improving,
surveying, shaft sinking, raising, crosscutting and drifting, searching for,
digging, trucking, sampling, working and procuring minerals, ores and metals, in
doing all other work usually considered to be prospecting ,exploration,
development and mining work; in paying wages and salaries of men engaged in such
work, and in supplying food, lodging, transportation and other reasonable needs
of such men; in paying assessments or premiums for workers compensation
insurance, contributions for employment insurance or other pay allowances or
benefits customarily paid in the district to such men; in paying rentals,
license renewal fees, taxes, maintenance fees and other governmental charges
required to keep the Property in good standing, in purchasing or renting plant,
buildings, machinery, tools, appliances, equipment or supplies and in
installing, erecting, detaching and removing the same or any of them; in the
management of any work which may be done on the Property or in other respect
necessary in the opinion of the Optionee for carrying out such prospecting,
exploration, development and mining work.

REPRESENTATIONS AND WARRANTIES OF THE OPTIONOR

The Optionor, represents and warrants to the Optionee that:

(a) It is a body corporate, duly incorporated, validly existing and in good
standing under the laws of the State of Nevada;

(b) It has full power, authority and capacity to enter into this Agreement and
to carry out the transactions contemplated hereby, all of which have been duly
and validly authorized by all necessary corporate proceedings;

(c) The Property is free and clear of all liens, charges and encumbrances
whatsoever;

> > (d) The Property has been duly and validly located and recorded in
> > accordance with laws of the Province of British Columbia governing the
> > locating and registration of mineral claims, and the Property is, and at the
> > time of transfer to the Optionee as may be required hereunder, will be,
> > valid and subsisting mineral claims; and
> > 
> > 
> > 
> > (e) There are no adverse claims or challenges against or to the ownership of
> > or title to the Property, nor to the knowledge of the Optionor, is there any
> > basis therefore, and, subject to paragraph 12. herein, there are no
> > outstanding agreements or options to acquire or purchase any interest in the
> > Property or any portion thereof, and in particular, but without limitation,
> > and except as provided under paragraph 10. herein, no other person has any
> > royalty or other interests whatsoever in production from the Property.

The representations and warranties of the Optionor hereinbefore set out form a
part of this Agreement and are conditions upon which the Optionee has relied in
entering into this Agreement and shall survive the execution of this Agreement
and any reorganization, amalgamation, sale or transfer of control of any of the
parties hereto.

REPRESENTATIONS AND WARRANTIES OF THE OPTIONEE

3.

The Optionee represents and warrants to the Optionor that:

(a) It is a body corporate, duly incorporated, validly existing and in good
standing under the laws of the State of Nevada; and

(b) It has full power, authority and capacity to enter into this Agreement and
to carry out the transactions contemplated hereby, all of which have been duly
and validly authorized by all necessary corporate proceedings.

The representations and warranties of the Optionee hereinbefore set out form a
part of this Agreement and are conditions upon which the Optionor has relied in
entering into this Agreement and shall survive the execution of this Agreement
and any reorganization, amalgamation, sale or transfer of control of any of the
parties hereto.

OPTION TO PURCHASE

4.

In consideration of the covenants and agreements contained herein, the Optionor
hereby grants to the Optionee the option to acquire, subject to the terms and
conditions of this Agreement, an undivided one hundred percent (100%) right,
title and interest in and to the Property (the "Option") by making the payment
and incurring the Expenditures, on or before the times and in the amounts, as
hereinafter provided.

OPTION PURCHASE PRICE

5.

The Option shall be exercised upon the Optionee:

(a) Paying the sum of TWENTY THOUSAND DOLLARS ($20,000.00) of lawful money of
the United States of America to the Optionor at the time of signing of this
agreement;

(b) Incurring Expenditures of TWENTY-FIVE THOUSAND DOLLARS ($25,000.00) on the
Property on or before the first anniversary date of this Agreement;

(c) Incurring Expenditures of TWENTY-FIVE THOUSAND DOLLARS ($25,000.00) on the
Property on or before the second anniversary date of this Agreement;

(d) Incurring Expenditures of FIFTY THOUSAND DOLLARS ($50,000.00) on the
property on or before the third anniversary date of this Agreement; and

(e) Incurring Expenditures of SEVENTY-FIVE THOUSAND DOLLARS ($75,000.00) on the
Property on or before the fourth anniversary date of this Agreement.

Notwithstanding the above, the Optionee may make an equivalent cash payment to
the Optionor, in lieu of incurring part or all of the Expenditures required to
be incurred to exercise the Option hereunder this Agreement, and any such
payments made by the Optionee to the Optionor will be deemed to be part of the
Expenditures required to be incurred to exercise the Option hereunder this

Agreement.

TRANSFER OF TITLE

6.

Upon the exercise of the Option as provided in paragraph 5. herein, the Optionor
shall transfer all right, title and interest in and to the Property to the
Optionee.

RIGHT OF ACCESS TO PROPERTY

7.

The Optionor hereby grants to the Optionee the sole and exclusive right,
commencing from the date of signing of this Agreement and thereafter during the
continuance of the Option hereunder this Agreement, to enter upon and conduct
such Mining Operations on the Property as the Optionee in its sole discretion
may decide, and to have quiet and exclusive possession thereof, with full power
and authority to the Optionee, its servants, agents, workmen or contactors to
carry on Mining Operations in searching for minerals in such manner as the
Optionee in its discretion may determine, including the right to erect, bring
and install thereon all such buildings, plant, machinery, equipment, tools,
appliances or supplies as the Optionee shall deem necessary to remove therefrom
reasonable quantities of rocks, ores and/or minerals and to transport the same
for the purpose of sampling, metallurgical testing and assaying.

CONDUCT OF EXPLORATION WORK

8.

The Optionee shall perform all Mining Operations relating to the Property in a
good and workmanlike manner and in compliance with all applicable federal,
provincial, municipal or local laws, by-laws, ordinances, rules, regulations and
directives relating to the environment or occupational health or safety.

MAINTENANCE OF PROPERTY

9.

During the continuance of the Option hereunder this Agreement, and subject to
sub-paragraph 12. herein, the Optionee shall maintain the Property in good
standing by the filing of assessment work and/or the making of payments of
assessment fees in lieu thereof, and any filed assessment work or payments of
assessment fees made by the Optionee in lieu of the filing of assessment work on
the Property will be deemed to be part of the Expenditures required to be
incurred to exercise the Option hereunder this Agreement, and not in addition to
such Expenditures.

ROYALITIES

10.

Upon the exercise of the Option hereunder this Agreement, the Optionee agrees to
pay the following royalties:

(a) A royalty of TWO PERCENT (2%) of Net Smelter Returns to Candorado Operating
Company Ltd. ("Candorado") a British Columbia corporation, which royalty may be
reduced to ONE PERCENT (1%) upon payment of FIVE HUNDRED THOUSAND DOLLARS
($500,000.00) to Candorado at any time, and may be paid out in full and
terminated upon the payment of a further FIVE HUNDRED THOUSAND DOLLARS
($500,000.00) to Candorado at any time; and

(b) An additional royalty of TWO PERCENT (2%) of Net Smelter Returns to the
Optionor, which royalty may be reduced by ONE PERCENT (1%) upon payment of ONE
MILLION DOLLARS ($1,000,000.00) to the Optionor at any time, and may be paid out
in full and terminated upon the payment of a further ONE MILLION DOLLARS
($1,000,000.00) to the Optionor at any time.

INDEMNIFICATION

11.

The Optionee shall, during the continuance of the Option hereunder this
Agreement, indemnify and save harmless the Optionor from and against all suits,
claims, demands, losses and expenses which the Optionor may suffer by reason of
any act or thing done or omitted to be done by the Optionee in relation to its
Mining Operations on the Property and shall cause to be paid all workmen and
wage earners employed by it or its contractors on the Property, and for all
materials purchased in connection therewith, and will keep the Property free
from claims for liens with respect thereto, and in the event of a lien being
recorded, the Optionee will on this fact becoming known to the Optionee
forthwith take proceedings to have such lien removed, and to have the same
removed as soon as possible; provided the Optionee may, in good faith, dispute
and contest any such suits, claims, demands, losses and expenses.

 

TERMINATION UPON DEFAULT OF MAINTENACE OF PROPERTY

12.

Pursuant to a prior right granted by the Optionor to Candorado Operating Company
Ltd. ("Candorado"), a British Columbia company, if prior to August 7, in any
year that Optionor shall fail to file assessment work and/or pay assessment fees
which are sufficient to maintain the Property in good standing for a further
period of one (1) year, Candorado may, at its option, upon notice to the
Optionor, pay the assessment fees necessary to maintain the Property in good
standing for a further period of one (1) year. The Optionor then has until the
close of business on the 6th day of September of such year to pay Candorado an
amount equal to any such assessment fees paid by Candorado as aforesaid,
otherwise, the Optionor shall be deemed to have surrendered the Property to
Candorado and shall be required to transfer all right, title and interest in the
Property to Candorado. Accordingly, notwithstanding any other provision
contained herein to the contrary, if the Optionee shall, prior to the 7th day of
August in any year during the continuance of the Option hereunder this
Agreement, fail to file assessment work and/or pay assessment fees which are
sufficient to maintain the Property in good standing for a further period of one
(1) year beginning from the 6th day of September in any such year this Agreement
and the Option provided for hereunder shall terminate and no longer be of any
force and effect, save and except for the obligations of the Optionee to the
Optionor as provided in sub-paragraphs 15. (b) and (c) herein.

ABANDONMENT OF PROPERTY

13.

The Optionee covenants and agrees that if it shall, at any time subsequent to
the exercise of the Option hereunder this Agreement, determine to abandon the
Property, it shall immediately transfer all right, title and interest in and to
the Property back to the Optionor. The Optionee further covenants and agrees
that if it shall, prior to the 7th day of August in any year subsequent to the
exercise of the Option hereunder this Agreement, fail to file assessment work
and/or pay assessment fees which are sufficient to maintain the Property in good
standing for a further period of one (1) year beginning from the 6th day of
September in any such year, the Optionee shall be deemed to have abandoned the
Property and the Optionee shall immediately transfer all right, title and
interest in and to the Property back to the Optionor.

TERMINATION OF AGREEMENT

14.

Subject to paragraph 12. herein, this Agreement and the Option granted hereunder
may be terminated by:

(a) The Optionee upon giving thirty (30) days notice to the Optionor to that
effect at any time; and

(b) The Optionor upon giving notice to the Optionee to that effect if the
Optionee shall fail to make any payment, incur any Expenditures or observe any
of the requirements provided for herein, and such failure shall continue for
thirty (30) days after the Optionor has given such notice.

 

EFFECT OF TERMINATION

15.

If this Agreement and the Option granted hereunder is terminated pursuant to
paragraph 14. hereunder, the Optionee shall:

(a) Leave the Property in good standing for a period of at least one (1) year
from the date of termination of this Agreement and the Option granted hereunder,
and free and clear of all liens, charges, encumbrances and claims whatsoever;

(b) Indemnify and save the Optionor harmless as provided under paragraph 11.
herein for any and all suits, claims, demands, losses, damages, charges and
expenses arising out of the Optionee's Mining Operations relating to the
Property up to the date of termination of this Agreement and the Option granted
hereunder; and

(c) Deliver at no cost to the Optionor within ninety (90) days of such
termination, copies of all reports, maps, assay results and other relevant
technical data complied by, prepared at the direction of or, in the possession
of the Optionee with respect to the Property and not theretofore furnished to
the Optionor.

ASSIGNMENT

16.

This Agreement and the Option granted hereunder shall not be assignable by the
Optionee. The Optionee may at any time after the exercise of the Option granted
hereunder dispose of all or any part of its interest in the Property to any
third party (the "Assignee") provided that the Assignee shall, prior to and as a
condition precedent to such disposition, deliver to the Optionor its covenant
with and to the Optionor that:

(a) to the extent of the disposition, the Assignee agrees to be bound by
paragraphs 10. and 13. of this Agreement as if it had been an original party
hereto; and

(b) it will subject any further disposition of the interest acquired to the
condition contained in this paragraph.

GENERAL

17.

Wherever in this agreement it shall be required or permitted that notice be
given or served by either party to or on the other, the notice shall be in
writing and shall be delivered personally to the party to whom it is given or
sent by prepaid, registered mail, or transmitted by facsimile, at the address or
to the facsimile number as follows:

 

> > TO THE OPTIONOR:
> > 
> > 
> > 
> > BEESTON ENTERPRISES LTD.
> > 
> > #200-1687 West Broadway
> > 
> > Vancouver, British Columbia
> > 
> > Canada V6J 1X2
> > 
> > Facsimile: (604) 738-8116
> > 
> > 
> > 
> > TO THE OPTIONEE:
> > 
> > 
> > 
> > KRANTI RESOURCES INC.
> > 
> > #103-8318 120th Street
> > 
> > Surrey, British Columbia
> > 
> > Canada V3W 3N4
> > 
> > Facsimile: (604) 594-2772

and each such notice shall be deemed given on the date of delivery in the case
of delivery, five (5) days after mailing in the case of mail and the next day
after the date of transmission in the case of a facsimile. No notice may be
given by mail during a real or apprehended mail strike in Canada. The addresses
provided herein this paragraph may be changed from time to time by either party
by notices as above provided.

18.

Time is expressly declared to be of the essence of this Agreement and each of
the terms and conditions of this Agreement.

19.

Each of the parties hereto will execute and deliver all such further documents,
instruments and assurances and do such acts and things as may be reasonably
required by the other party to carry out the full meaning and intent of this
Agreement and to effect the transactions contemplated hereunder, including, but
without limitation, complying with the requirements of any security regulatory
authorities having jurisdiction over the parties hereto.

20.

This Agreement shall enure to the benefit of and be binding upon the parties
hereto, and their respective successors and permitted assigns.

21.

This Agreement shall be governed by and interpreted in accordance with the laws
of the Province of British Columbia, Canada

22.

The validity of any particular provision of this Agreement shall not affect any
other provision herein, and in such event, this Agreement shall be construed as
if such invalid provision was omitted.

23.

Words of the singular number and masculine gender shall include words of the
plural number, feminine or neuter genders, or firms and corporations, and vice
versa.

24.

This Agreement constitutes the entire Agreement between the parties hereto in
respect to the Option granted hereunder this Agreement and there are no
representations, warranties, terms or conditions, expressed or implied,
statutory or otherwise and no agreements collateral hereto other than or
expressly set forth or referred to herein.

IN WITNESS WHEREOF

this Agreement has been executed by the parties hereto as of the day and year
first written above.

 

BEESTON ENTERPRISES LTD.

 

 

/s/ Brian Smith                                       

Authorized Signatory

 

KRANTI RESOURCES INC.

 

 

/s/ Ben Gill                                               

Authorized Signatory

 

 

 

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SCHEDULE "A"

DESCRIPTION OF MINERAL PROPERTY

 

Tenure Number

540512

Tenure Type

Mineral

Claim Name

CDO 6

Map Number

092P

Good To Date

2007/SEP/06

Area

(ha*)

478.495

 

            *ha= hectares