ex_10-8.htm


    
      

      

    

    Exhibit
10.8

     

     

    
      Index
No. 952

      GIA

      


      Option
to Purchase Contract for Mining Property

       

      from

       

      Minera
Farellón Limitada

       

      to

       

      Minera
Polymet Limitada

      


       

      In
Vallenar, República de Chile on October 10th, 2008, appearing before me, Ricardo
Olivares Pizarro, Lawyer, Notary Public and Official Registrar of
Commerce and Mines, with an office at 960 calle Prat, local 14, is Kevin
Robert Mitchell, Canadian, married, separate asset marriage, miner,
foreigner identity card no.14 498 917-1, representing both Minera
Farellón Limitada, a Chilean mining company, Rol Único Tributario no.76
814 170-3, both located at 3260 Baldomero Lilio, Villa El Manantial, Comuna de
Vallenar, hereinafter also “Minera Farellón” and Minera
Polymet Limitada, a Chilean mining company, Rol Único Tributario no. 76
975 260-9, also located at 3260 Baldomero Lilio, Villa El Manantial, comuna de
Vallenar, hereinafter also “Minera Polymet”.  The appearing parties
are of legal age and have verified their identities with the aforementioned
identity cards and declare that:  By virtue of the present document,
they have come to enter into the following option to purchase contract for
mining properties, in conformity with that which is stipulated in article 169
and any other applicable articles of the Mining Code.

      


      Article
I: Identification of
Properties:  The company “Minera Farellón Limitada” is
the sole and exclusive owner of the following gold, copper and silver producing
mining properties located in Sierra La Colorada, Comuna de Vallenar, Provincia
de Huasco, Tercera Región de Atacama:  1)“Che Uno uno – ocho” (Che Uno
1-8), Rol Nacional no. 033012279-K whose measure has been registered on page 77,
no.42 of the 1993 Registro de Propiedad de Minas(Mining Property Register) of
the Conservador de Minas (Mining Registrar) of Vallenar.  They cover a
total area of 32 hectares, 4 hectares corresponding to each one of
them.  2)“Che Dos uno al diez” (Che Dos
1-10), Rol Nacional no. 0330122803, whose measure has been registered on the
back of page 181, no.43 of the 1993 Registro de Propiedad de Minas (Mining
Property Register) of the Conservador de Minas ( Mining Registrar) of
Vallenar.  They cover an area of 44 hectares, 4 properties of which
each consist of 5 hectares and 6 of which each consist of 4
hectares.  The mining properties identified above will be designated,
hereinafter and altogether, as “Mining Properties”.  Minera Farellón
acquired the Mining Properties via contract of sale from Jaime Antonio Caballero
Castillo, according to public document of sale of mining properties dated June
25, 2008, granted by the Notary Public of Vallenar, Ricardo Olivares
Pizarro.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      


      Article
II: 1. Option
Offer:  By the present act, Minera Farellón, by way of its
representative Kevin Mitchell, gives to Minera Polymet the offer to purchase and
offers irrevocably to sell, cede and transfer to Minera Polymet the Mining
Properties identified in Article I of this document. 2. Price of the Offered Contract of
Sale: The price
of the contract of sale is the amount of $20,000 US to be paid in conformity
with that which is denoted in Article VII that follows.  The Mining
Properties and the minerals contained in them will be sold and transferred with
all of their uses, rights, customs and obligations, free from any lien,
prohibition, condition subsequent, pending restriction or litigation, contracts
of sale of minerals in situ, rents, as well as any other type of personal or
actual encumbrance that may constitute  an impediment that may affect
their free use, possession and disposal, and free from all overlapping and with
their mining patents fully paid.  The seller or offering party is
responsible for the clearance in conformity with the law.  3. Option Term:  The
term for the option, within which Minera Polymet will be able to freely accept
or reject the offer of sale of the Mining Properties, expires on April 10,
2009.  4.Option
Price:  The price of the option is the sum in national currency
pesos equivalent to $444US, that will be paid within the period denoted in
article V of this document.

      


      Article
III:  Kevin Robert
Mitchell, representing Minera Polymet Limitada, accepts, under the terms of
article 169 and other applicable articles of the Mining Code, the stipulations
of this contract whereby its second article grants to Minera Polymet the power
to accept or reject the offer made by Minera Farellón.  Therefore,
Minera Polymet will be able to decide to accept the contract of sale for the
Mining Properties at any time, from the date of this document and until the
expiration of the term indicated in number 3 of article II of this document,
under the terms indicated in this contract.

      


      Article
IV: Transfer of
Royalty: By the public document of sale mentioned in the first article of
this document, Jaime Antonio Caballero Castillo and Minera Farellón agreed to
the payment of a Royalty in addition to the payment of the price agreed to in
said document.  The royalty is equal to 1% of the net or liquid value
that Minera Farellón may receive or obtain from the mineral extracted from the
properties that are the object of said contract; the royalty that will be paid
directly by Minera Farellón if the processing of the minerals is carried out by
Minera Farellón or by whomsoever acquires them from Minera Farellón if they are
sold to a third party.  According to that which was agreed to, this
Royalty will be paid until the sum, in national currency pesos, equivalent to
$100,000 US is fulfilled, taking into account the settlement of the royalty’s
value at the observed price on the date of each payment until the cited sum is
fulfilled.  By the present contract, Minera Farellón Limitada,
represented by Kevin Mitchell, promises to cede and transfer to Minera Polymet
Limitada, who promises to accept and acquire, the contractual position and all
of the rights and obligations that arise for Minera Farellón from the obligation
undertaken in article IV of the public document of contract of sale of mining
properties mentioned in the first article of this document and that relates to
the payment of a royalty under the terms previously indicated. The promise of
transfer contract must be entered into by public document together with the
acceptance of the offer made to Minera Polymet by the present act, whose
deadline to accept expires on April 10, 2009.  The price of the
promise of transfer made to Minera Polymet by the present act is the sum of 1
peso.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      


      Article
V: Payment of the Price
of the Option to Purchase the Mining Properties:  The price of
the option contract for the purchase of the Mining Properties is the amount of
$444 US, equivalent to 271,000 pesos, as of today, that Minera Polymet pays in
cash with this act and Minera Farellón declares having received the payment to
its complete satisfaction. 2)
Transfer of the obligation of future payments in the event of
relinquishment:  If Minera Polymet declines to accept the offer
of sale, of which this document gives account, before the expiration of the term
indicated in number 3 of article II above, the obligation of Minera Polymet to
carry out payment of the offered sale price will cease immediately.

      


      Article
VI:  Acceptance of the
offer: If, within the negotiated term,  Minera Polymet decides
to accept the offer it will state such intentions with the issuance of a public
document declaring its acceptance.  With the same purpose, Minera
Polymet will submit, to the Notary that authorizes the acceptance document, a
bank cashier’s cheque made to the order of Minera Farellón or its
transferee, for the amount, in national currency pesos, equivalent to $20,000
US.  The Notary will not submit to Minera Farellón the cashier’s
cheque referred to, unless it is with the signing of a corresponding public
document of receipt.  The corresponding Conservador de Minas (Mine
Registrar) will register the Mining Properties indicated in the document of
acceptance in the name of Minera Polymet Limitada upon having seen a copy of the
present document, consisting of the submission of the aforementioned cashier’s
cheque to the authorized Notary and a copy of the acceptance document issued by
Minera Polymet. All of this is by virtue of that which is stipulated by the
final paragraph of article 169 of the Mining Code, according to which, and
regarding the rights of the purchase option contract that are specially
regulated by said Code, the sole acceptance of the irrevocable offer will
suffice so that the offered contract of sale may be concluded, with the sole
requirement that both the offer and the acceptance be registered by public
document.

      


      Article
VII: Payment of the sale
price: The price of the contract of sale is the sum equivalent to $20,000
US that Minera Polymet will pay in national currency pesos to Minera Farellón on
April 10, 2009, payable when the purchase option, of which this document gives
account, is exercised.

      


      Article
VIII:
Irrevocability:  This contract will have the characteristics of
the mining option to purchase of the contract denoted in article 169 of the
Mining Code and agrees with the nature of irrevocability so that Minera Farellón
will be able to neither regret nor withdraw its offer.  Consequently,
the sole acceptance at any time of the irrevocable offer on the part of Minera
Polymet Limitada, that is formulated by this act, will suffice to conclude the
sale.  In the event that the deadline of the term of the option
expires and Minera Polymet has not accepted the offer of sale of the Mining
Properties to which this document refers, it shall be understood that Minera
Polymet has declined to exercise the option granted to it in this
document.  To this effect, Minera Polymet or whoever has derived
rights in this contract must issue a public document of removal and
cancellation, requiring the cancellation of the registration of this contract in
the corresponding register of the respective Conservador de Minas (Mining
Registrar).

       

      
        
          
          

        

        
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      Article
IX:
Authorizations:  In representation of Minera Farellón, Kevin
Mitchell irrevocably authorizes Minera Polymet so that, from the date of the
signing of the present document and while the term to exercise the option
granted to it is pending, it may carry out, at its exclusive cost and risk, the
legally appropriate explorations, surveillances, prospecting and exploitations
that it desires.  Minera Polymet also being able to carry out all of
its own work and labour with the express declaration that Minera Polymet will be
able to exercise all of the active obligations that benefit said properties,
leaving the seller to request them if Minera Polymet asks upon deeming it
necessary, and will likewise be able to dispose of the minerals extracted as a
result of its labours.  Minera Polymet will be solely responsible for
the mining worksites for exploration and/or exploitation that may be made on the
properties, as well as for the effects that such worksites provide, having to
give observance to all of the applicable legal regulations in
kind.  No part of that which is indicated in the present article may
be interpreted as if Minera Polymet has the obligation to carry out determined
studies or reports of whatever the nature these may be.

      


      Article
X: Non-Repayment:
If Minera Polymet declines to accept the offer of sale of the Mining Properties,
its obligation to pay the offered price of sale will cease immediately, but
Minera Farellón will not be obligated to repay any payment already received that
corresponds to the option price, those which Minera Farellón will retain as sole
and exclusive indemnity for losses of any nature, type or amount that may have
caused the act of having impeded, during the option term, the exploration and
exploitation as well as third party negotiation for the Mining Properties or
that may have caused Minera Polymet to not accept the offer or that may stem
from any other cause or reason related to the contract that this document
contains.

      


      Article
XI:
Relinquishment:  At any time Minera Polymet will be able to
issue a declaration by public document, making a note in the margin of the
original copy of this document, expressing its decision to not accept the offer
that was made in this document and from the date of this marginal notation all
of the obligations contracted by virtue of this contract, of any nature or type
and in particular the obligation to carry out payment as referred to in no.2 of
article II and article VII of this document, will cease.

      


      Article
XII:  Maintenance of the
properties:  Minera Farellón must take, at its exclusive cost,
all of the judicial and non-judicial steps necessary for the current maintenance
of the rights that arise from the Mining Properties indicated in the first
article of this document and to defend those rights, and the minerals contained
in the properties, from any third party claim.  Without damage to that
stipulated above, Minera Polymet Limitada will repay to Minera Farellón all of
the amounts paid out for payment of  mining patents that protect the
properties and the mining rights that are the object of this option and that
have been incurred during the option term.

       

      
        
          
          

        

        
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      Article
XIII:  Prohibitions and
restrictions: (the
original contract has this heading as Article III.  The word “décimo”
is most likely missing in the original) 1: Minera Farellón is
obligated not to sell, tax, transfer, cede, promise sale, mortgage, offer, give
option or enter into acts or contracts, of any nature, about the mining rights
originating from the Mining Properties referred to in this document or about the
minerals contained on them while the term that Minera Polymet has to exercise
the option is pending.  If, in spite of the previous
prohibitions,  any act is executed or any contract is entered into
that limits or affects or may limit or affect the landownership, possession or
property of the Mining Properties, or the minerals contained on them, that act
or contract will be terminated ipso facto once Minera Polymet accepts the
irrevocable offer made in this document, all in conformity with article 169 of
the Mining Code and without damage to the rights that arise for Minera Polymet
from this contract and the Law.  2:  The offering
party, during the option term, is obligated to maintain under strict
confidentiality all of the information, technical data that may be dealt with in
the exploration, and know-how, as well as all other information related to the
work that Minera Polymet or its contractors carry out on the Mining
Properties.  This obligation of confidentiality will remain with
respect to the mining concessions that Minera Polymet may have acquired by means
of the exercising of the option to purchase.  3:  Without damage
to that which was stipulated in number 1 of this article, Minera Farellón is,
during the term of the option discussed in this document, obligated not to
present new pediments or demonstrations or establish new exploration and/or
exploitation concessions, in the area covered by the Mining Properties
identified in the first article of this document, without the advance
authorization in writing from Minera Polymet.  4:  Minera Farellón
shall not completely or partially cede or transfer the rights and authorizations
deal with in this contract.  5:  Minera Polymet,
at any time following written notification to Minera Farellón, can sell, cede,
transfer or dispose of, in any manner, all of or part of  its rights
in this contract, provided that the purchaser or transferee declares in the
contract that serves as the title of acquisition that it will exactly fulfil the
same and all of the obligations that Minera Polymet has contracted in this
document under the same terms and as if this contract had been entered into with
said transferee, promising to impose equal obligations to any future
transferee.

      


      Article
XIV:  Present to this
act appears Jaime Antonio Caballero Castillo, Chilean, married, separate asset
marriage, miner, national identity card no. 9 190 760-7, located at 1930 calle
General Ibañez, Población General Baquedano, comuna de Vallenar, signing party
of the Contract of Sale of the Mining Properties mentioned in Article I above,
who declares: 1.- To
know and accept the promise of transfer of contractual position and of rights
and obligations with respect to the payment of a royalty that stem from the
Contract of Sale of Mining Properties already indicated in Article I above and
is considered as notified of the promise of transfer.  2.- To accept without
reservation the definitive transfer of rights and contractual position with
respect to the obligation of payment of a royalty, and as of now authorizing the
entering into of this contract, without which his future authorization or
notification would be necessary.  3.- That he has fully and
satisfactorily received all of the payments that Minera Farellón was obligated
to make, up to the date of the present document, by virtue of the Contract of
Sale of the Mining Properties indicated in Article I above.

       

      
        
          
          

        

        
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      Article
XV: Exchange
rate:  The amounts of money expressed in this document in US
dollars will be paid in national currency pesos at the exchange rate designated
“dólar observado”(observed dollar) published by the Banco Central de Chile in
the Diario Oficial (Official Gazette) on the day on which the payment must be
made, in agreement with no.6 of the First Chapter of the Compendio de Normas de
Cambios Internacionales (Compendium of International Foreign Exchange
Regulations).

      


      Article
XVI: Residence:
For all legal purposes, the parties establish their residence in the city and
comuna of Vallenar.

      


      Article
XVII: Expenses:
The notary expenses, of the Registrar and others, and the taxes that originate
from the granting of this option contract, and of the documents that must be
issued on the occasion of or as a result of the completion of the obligations
derived from this same option contract, shall be the responsibility of Minera
Polymet.

      


      Article
XVIII:
Arbitration:  Any difficulties that are caused between the
parties relating to the interpretation, application, fulfilment, validity, term,
termination, resolution, attainment, efficiency or clearing of the present
option contract and of the proposed sale, shall be resolved by a joint
arbitrator that the contracting parties declare to know and accept, conforming
to the regulations of the Reglamento Centro de Arbitrajes (Regulating
Centre of Arbitration) of the Cámara de Comercio (Chamber of Commerce) of
Santiago A.G..  The parties grant irrevocable mandate to the Chamber
of Commerce of Santiago A.G. so that, at written request from either party, it
may appoint an arbitrator  from within the body of arbitrating members
of the Arbitration Centre of that Chamber.  There will be no recourse
against the resolutions of the arbitrator, so the parties shall expressly defer
to the arbitrator, only excepting the recourse of
complaint.   The arbitrator will be especially empowered to
resolve all matters related to his/her ability and/or jurisdiction
..

      


      Article
XIX:
Power:  The holder of an authorized copy of the present
document is empowered to request the registrations, subregistrations and
annotations that may be pertinent from the respective Registrar.

      


      Article
XX: Special Power:  The selling and purchasing parties give special
power to the lawyers Enrique Benítez Urrutia and Gonzalo Nieto Valdés, both
located at 3250 Avenida Isidora Goyenechea, piso 9, Las Condes, Santiago, so
that either one of them may grant all of the complementary documents that may be
necessary to rectify any error or omission existing in the clauses related to
the correct identification of the mining properties that are the object of the
present contract, as well as any registration of ownership, method of
acquisition, etc., for the sole purpose that the Conservadores de Bienes Raíces
(Registrars of Real Estate) may perform the proper registrations and
annotations.  The attorney is expressly empowered to sign all manner
of request, declaration, lawyer’s bill and public or private document necessary
for the fulfilment of their duty.  The legal capacity of Kevin Robert
Mitchell to represent Minera Farellón Limitada, consists of public document of
constitution of said company dated February 22, 2007, granted before this same
Notary.  The legal capacity of Kevin Robert Mitchell to represent
Minera Polymet Limitada consists of public document of constitution of said
company dated July 16, 2007 granted before this same Notary.  The
legal capacity documents previously cited are not inserted here because they are
know by both parties and the authorizing Notary.  Conforming to the
bill drawn up by the lawyer Enrique Benítez.  After having read and
understood the appearing parties sign.  Copies are
given.  Annotated in the index under No.952.  -I
swear.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      /s/Kevin
Robert Mitchell

      Kevin
Robert Mitchell

      C.I.E. 14
498 917-1

      p.p.
Minera Farellón Limitada

      p.p.
Minera Polymet Limitada

      


      Stamp

      


      /s/
Ricardo Olivares Pizarro

      Ricardo
Olivares Pizarro

      Notary

      


      Stamp

       

      
        
          
          

        

        
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      Amendment
No. 1

      


      To

      


      Option to
Purchase Contract for Mining Property

      From
Minera Farellón Limitada

      To Minera
Polymet Limitada

      Dated
October 10, 2008

      Signed in
Vallenar on October 10, 2008

      


      


      As of
October 10, 2008, for valuable consideration, the parties agreed to amend
Article V: Payment of the Price of the Option to Purchase the Mining Properties
to delete the words “The price of the option contract for the purchase of the
Mining Properties is the amount of $444 US, equivalent to 271,000 pesos, as of
today, that Minera Polymet pays in cash with this act and Minera Farellón
declares having received the payment to its complete satisfaction” and to insert
the words “The price of the option contract for the purchase of the Mining
Properties is the amount of $444 US, equivalent to 271,000 pesos, as of today,
that Minera Polymet must pay in cash by December 2, 2008”.  All other
terms and conditions of the option to purchase are unchanged except as they must
be changed to accommodate these changes.

      
 

      /s/
Kevin Robert Mitchell

      Kevin
Robert Mitchell

      CIE 14
498 917-1

      Representing
Minera
Farellón Limitada

      RUT 76
814 170-3

      


      


      /s/
Kevin Robert Mitchell

      Kevin
Robert Mitchell

      CIE 14
498 917-1

      Representing
Minera
Polymet Limitada

      RUT
76 975 260-9

       

       

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