Royal Mines And Minerals Corp.: Exhibit 10.5 - Filed by newsfilecorp.com





SETTLEMENT AND SECURITY RELEASE AGREEMENT

THIS SETTLEMENT AND SECURITY RELEASE AGREEMENT (the
“Agreement”) made the 27th day of September 2013.

AMONG:

Golden Anvil S.A. de C.V., a
Mexico corporation, having an office at RFC: GAN-980527-IV9, Amapa #124; Col.
San Juan; Tepic, Nay 63130

(the “Company”)

AND:

Royal Mines and Minerals Corp.,
a Nevada corporation, having an office at 2580 Anthem Village Dr.
Henderson, NV 89052

(the “Creditor”)

WHEREAS:

A. The Company and Gainey Capital Corp. (“Gainey”) have entered
into an Amended and Restated Asset Purchase Agreement dated as of June 3, 2013,
as amended July 10, 2013 (the “Asset Purchase Agreement”) pursuant to which
Gainey will purchase certain assets of the Company (the “Transaction”) in
consideration for the issuance by Gainey of: (i) 12,000,000 common shares in the
Capital of Gainey (the “Gainey Shares”) to the Company; and (ii) the issuance of
a special warrant of Gainey which is convertible for no additional
consideration, from time to time, into an aggregate maximum of 3,000,000 common
shares of Gainey; 

B. Closing of the Transaction is subject to a number of
conditions including the final approval of the TSX Venture Exchange; 

C. The Creditor entered into a number of agreements with the
Company including but not limited to the loan agreement dated August 25, 2010,
the toll processing agreement dated December 3, 2009, the letter of intent dated
October 21, 2009, and the memorandum of understanding dated October 19, 2010
(collectively the “Loan Agreements”) pursuant to which the creditor loaned
USD$983,055 (the “Principal”);

D. Under the Loan Agreements, the Creditor acquired a security
interest in certain of the assets being acquired by Gainey (the “Secured
Assets”) under the Asset Purchase Agreement.

E. The Company wishes to settle the Principal and interest
thereon (the “Interest”) (the Principal and the Interest collectively referred
to herein as the “Debt”) and terminate the Loan Agreements and Gainey wishes to
obtain a release of the Creditors Interest in the Assets in consideration of
2,000,000 Gainey Shares (the “Consideration Shares”) to be issued to the
Creditor upon closing of the Transaction; and 

F. The Creditor is prepared to accept the Consideration Shares
as full and final satisfaction of the Debt and to release its security interest
in the Secured Assets. 

NOW THEREFORE THIS AGREEMENT WITNESSES that, in
consideration of the premises and of the covenants and agreements set out in
this Agreement, the parties agree as follows:

	1. 	
      ACKNOWLEDGMENT OF DEBT

	 	 
	1.1 	
      The Company acknowledges and agrees that it is indebted
      to the Creditor in the amount of the Debt.







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	2. 	
      SETTLEMENT OF DEBT AND ISSUANCE OF CONSIDERATION
      SHARES

	 	 
	2.1 	
      The Creditor agrees to accept the Consideration Shares as
      full and final settlement of the Debt and the Creditor agrees that the
      Debt will be fully satisfied and extinguished when Gainey issues the
      Consideration Shares to the Creditor, and subject only to the issuance of
      the Consideration Shares to the Creditor, the Creditor releases and
      forever discharges the Company and Gainey, their subsidiaries, if any, and
      their respective directors, officers, employees, representatives and
      advisors from and against any and all claims, actions, obligations, and
      damages whatsoever which the Creditor may have against any of them
      relating to the Debt and agrees to execute and deliver to the Company, at
      Closing (as defined below), the release in the form attached hereto as
      Schedule “A” (the “Release”).

	 	 
	3. 	
      WARRANTIES REPRESENTATIONS AND ACKNOWLEDGEMENTS OF THE
      CREDITOR

	 	 
	3.1 	
      The Creditor represents, warrants and acknowledges to the
      Company that:




	 	(a) 	
      the Debt constitutes the entire outstanding indebtedness
      of the Company to the Creditor including Principal and Interest to the
      date hereof and costs;

	 	 	 
	 	(b) 	
      the Creditor has not conveyed, transferred or assigned
      any portion of the Debt to any third party, and has full right, power and
      authority to enter into this Agreement and to accept the Consideration
      Shares in full and final satisfaction of the Debt;

	 	 	 
	 	(c) 	
      no third party has any right to payment of all or any
      portion of the Debt;

	 	 	 
	 	(d) 	
      the Creditor has no claims or potential claims against
      the Company on account of any matter whatsoever, other than the
    Debt;

	 	 	 
	 	(e) 	
      all necessary corporate or other action has been taken by
      the Creditor to approve this Agreement;

	 	 	 
	 	(f) 	
      the Creditor is a U.S. Person ( a “US Person”) as such
      term is defined in Regulation S of the Securities Act of 1933 and has
      executed a US Representation Letter in the form attached as Schedule “B”
      hereto (the “US Representation Letter”) and the warranties,
      representations and covenants contained therein will be true at Closing
      (as defined below);

	 	 	 
	 	(g) 	
      the Consideration Shares will be subject to resale
      restrictions as required by applicable securities law and the certificates
      representing the Consideration Shares will bear appropriate legends and
      the Creditor will seek its own independent legal advice regarding such
      resale restrictions imposed on the Consideration Shares;

	 	 	 
	 	(h) 	
      as a condition of the Asset Purchase Agreement the
      Creditor is required to enter into a voluntary pooling agreement with
      Gainey in the form attached as Schedule “C” hereto pursuant to which,
      among other things, the Creditor will be restricted in assigning,
      pledging, selling, trading or otherwise transferring the Consideration
      Shares for a period of one year from the date of issuance of the final
      exchange bulletin of the TSX Venture Exchange following Closing of the
      Transaction;

	 	 	 
	 	(i) 	
      The Creditor is acquiring the Consideration Shares as
      principal or is deemed to be acquiring the Consideration Shares as
      principal in accordance with applicable Canadian securities
laws;

	 	 	 
	 	(j) 	
      as a condition of the Asset Purchase Agreement the
      Creditor is required to enter into a surplus escrow agreement with Gainey
      in the form attached as Schedule “D” hereto pursuant to which the
      Consideration Shares will be subject to certain escrow conditions
      including, among other things, that the escrowed Consideration Shares will
      be cancelled if the asset, property, business or interest therein in
      consideration of which the securities were issued, is lost, or abandoned,
      or the operations or development of such asset, property or business is
      discontinued;







- 3 -

	 	(k) 	
      the Creditor is not a person created or used solely to
      purchase or hold securities in order to comply with an exemption from the
      prospectus requirements of applicable securities laws and if the Creditor
      is not an individual, it pre-existed this Agreement and has a bona fide
      purpose other than investment in the Consideration Shares; and

	 	 	 
	 	(l) 	
      there are risks associated with the acquisition of the
      Consideration Shares and the Creditor is knowledgeable or experienced in
      business and financial matters and is capable of evaluating the merits and
      risks of an investment in the Consideration Shares and is capable of
      bearing the economic risk of the investments.




	3.2 	
      The Company’s obligation to complete the transactions
      contemplated hereby is subject to the foregoing representations and
      warranties being true and correct at the date of this Agreement and at the
      time of delivery of the Consideration Shares by Gainey to the Creditor.
      Such representations and warranties will survive the closing of the
      transactions contemplated hereby and will continue in full force and
      effect for the benefit of the Company for a period of five years from the
      date of issuance of the Consideration Shares to the Creditor. The Creditor
      will indemnify the Company from and against any and all claims, damages,
      losses and costs arising from such representations and warranties being
      incorrect or breached.

	 	 
	4. 	
      CLOSING

	 	 
	4.1 	
      Closing of this Agreement (“Closing”) will take
      place on the closing date of the Definitive Agreement or such other date
      as the parties to this Agreement may agree.

	 	 
	4.2 	
      At or before Closing, the Creditor shall deliver to the
      Company:




	 	(a) 	
      a completed and executed US Representation Letter and/or
      a Representation Letter as applicable.

	 	 	 
	 	(b) 	
      a duly executed Release, which shall be deemed effective
      upon the issuance of the Consideration Shares to the Creditor.

	 	 	 
	 	(c) 	
      a duly executed voluntary pooling agreement in the form
      of Schedule “C” hereto; and

	 	 	 
	 	(d) 	
      a duly executed escrow agreement in the form attached as
      Schedule “D” hereto.




	5. 	
      GENERAL PROVISIONS

	 	 
	5.1 	
      Time will be of the essence of this Agreement.

	 	 
	5.2 	
      The Company and the Creditor will sign all other
      documents and do all other things reasonably necessary to carry out this
      Agreement.

	 	 
	5.3 	
      The provisions contained in this Agreement constitute the
      entire agreement between the parties and supersede all previous
      understandings, communications, representations, and agreements, whether
      written or verbal, between the parties regarding the subject matter of
      this Agreement.

	 	 
	5.4 	
      This Agreement may only be amended in writing with the
      mutual consent of each party hereto.

	 	 
	5.5 	
      This Agreement will be governed by and construed in
      accordance with the laws of British Columbia exclusively. Each party
      irrevocably attorns to the exclusive jurisdiction of the courts of British
      Columbia, with respect to any legal proceedings arising
herefrom.

	 	 
	5.6 	
      If any provision of this Agreement is or will become
      illegal, unenforceable or invalid for any reason whatsoever, such illegal,
      unenforceable or invalid provisions will be severable from the remainder
      of this Agreement and will not affect the legality, enforceability or
      validity of the remaining provisions of this
Agreement.







- 4 -

	5.7 	
      All dollar amounts referred to in this Agreement are
      expressed in United States currency, unless otherwise indicated.

	 	 
	5.8 	
      The parties hereto acknowledge and agree that they have
      been requested to and given an opportunity to obtain independent legal
      advice with respect to the subject matter of this Agreement prior to
      signing this Agreement, and further, the parties hereby represent and
      warrant to each other that they fully understand the terms of this
      Agreement and the obligations hereunder. If a party signs this Agreement
      without first obtaining independent legal advice, it waives its right to
      obtain independent legal advice.

	 	 
	5.9 	
      This Agreement will enure to the benefit of and be
      binding on each of the parties and their respective heirs, executors,
      administrators, successors, and assigns.

	 	 
	5.10 	
      This Agreement may be executed in counterparts, both of
      which will constitute one complete agreement.



IN WITNESS WHEREOF the parties have signed this Agreement as of
the date written on the first page of this Agreement.

	GOLDEN ANVIL S.A. de C.V. 	 	ROYAL MINES AND MINERALS CORP.
    
	 	  	 	 	  
	 	  	 	 	  
	 	  	 	 	  
	 		 	 	
	Per: 	/s/ Marco Antonio Roncon Valdes 	 	Per: 	/s/ Jason S. Mitchell 
	 	Authorized Signatory 	 	 	Authorized Signatory 
	 	  	 	 	  
	 	  	 	 	  
	 	  	 	 	  
	 	  	 	 	  
	 	GAINEY CAPITAL CORP. 	 	 	  
	 	  	 	 	  
	 	  	 	 	  
	 	  	 	 	  
	 		 	 	  
	Per: 	/s/ David G. Coburn 	 	 	  
	 	Authorized Signatory 	 	 	  






Schedule A 

Release

1. GENERAL RELEASE AND TERMINATION

KNOW ALL MEN BY THESE PRESENTS that Royal Mines and Minerals
Corp. (the “Creditor”), on its own behalf and also on behalf of its heirs,
executors, administrators, successors and assigns and all persons or legal
entities entitled to make any subrogated claims on its behalf or in its name
(all of whom are hereinafter collectively referred to as the “Releasors”), for
and in consideration of 2,000,000 common shares (the “Shares”) in the capital of
GAINEY CAPITAL CORP. (“Gainey’) and all other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, do hereby remise,
release, forever discharge, hold harmless and indemnify Golden Anvil S.A. de
C.V. (“Golden Anvil”) and Gainey, and all of their past or present
administrators, employees, officers, directors, adjusters, solicitors, agents,
successors and assigns, as applicable, (all of whom are hereinafter collectively
referred to as the “Releasees”), of and from any and all manner of actions,
causes of action, suits, debts, sums of money, dues, expenses, general damages,
special damages, costs, claims and demands of any and every kind and nature
whatsoever including all types of subrogated claims and claims for indemnity or
contribution, at law or in equity, or under any statute, which the Releasors,
any of them or anyone else claiming through them or in their name ever had, now
have or which they hereafter may have against the Releasees or any of them, and
without restricting the generality of the forgoing, by reason of or arising out
of or in any way connected to any liability of the Releasees whether associated
with or related to: (i) the Debt (as such term is defined in the Settlement and
Security Release Agreement between the Creditor, Golden Anvil and Gainey dated
September 27 2013; (ii) the following agreements between the Creditor and Golden
Anvil: the loan agreement dated August 25, 2010, the toll processing agreement
dated December 3, 2009, the letter of intent dated October 21, 2009, and the
memorandum of understanding dated October 19, 2010 (collectively the “Loan
Agreements”) (iii) any debt or sum of money owing under or pursuant to the Loan
Agreements or; (iv) as a result of any dealings or relations whatsoever between
the Releasors, or any of them and the Releasees, or any of them, notwithstanding
anything to the contrary stated herein, this Release shall not be effective
until Gainey has issued the Shares to the Creditor. 

The parties hereto agree that effective upon the Closing of the
transactions set out in the Amended and Restated Asset Purchase Agreement
between Gainey and Golden Anvil dated as of June 3, 2013, as amended July 10,
2013, the Loan Agreements are hereby terminated and of no further force or
effect, notwithstanding any provision contained therein.

2. FACTS CURRENTLY KNOWN

All parties to this Release acknowledge that the facts in
respect of which this Release is made may prove to be other than, or different
from, the facts now known or believed to be true. All parties to this Release
accept and assume the risk of the facts being different and agree that this
Release shall in all respects be enforceable and not subject to termination,
rescission, or variation by discovery of any difference in facts or by discovery
of any new facts.

3. ENTIRE AGREEMENT

This Release contains the entire agreement between all parties
to this Release and cancels and supersedes any prior understandings and
agreements between the parties. There are no representations, warranties, forms,
conditions, undertakings or collateral agreements, express, implied or statutory
between the parties other than as expressly set forth in this Release. 

4. UNENFORCEABLE PROVISIONS

If any paragraph or section or any portion of any paragraph or
section of this Release is determined to be unenforceable or invalid for any
reason by a Court of competent jurisdiction, that unenforceability or invalidity
will not affect the enforceability or validity of the remaining portions of this
Release, and such unenforceable paragraph or section or portion thereof will be
severed from the remainder of this Release and the remaining paragraphs or
sections thereof will be and remain in full force and effect. The Creditor will
execute and deliver all such further 




agreements and documents and do such further acts and things as
may be reasonably required to give effect to this Release subject to
reimbursement of reasonable legal expenses incurred by the Creditor in
connection therewith.

5. INDEPENDENT LEGAL ADVICE

The parties hereto acknowledge and agree that they have been
requested to and given an opportunity to obtain independent legal advice with
respect to the subject matter of this Release prior to signing this Release, and
further, the parties hereby represent and warrant to each other that they fully
understand the terms of this Release and the obligations hereunder. If a party
signs this Release without first obtaining independent legal advice, it waives
its right to obtain independent legal advice.

6. CAPACITY TO EXECUTE

All parties to this Release covenant that they have sufficient
capacity to execute this Release and have read this Release and know the
contents thereof, and hereby execute this Release of their own free act and
will, fully understanding the contents hereof, and say that they have not been
influenced to any extent whatsoever in making this Release by any
representations or statements by any of the parties to this Release or by any
person or persons representing any of the parties to this Release or acting on
its behalf. The Releasors further declare that they have carefully read this
Release, the terms of which are contractual and not a mere recital, that the
entire contents hereof are fully understood by them and that the same is being
executed as their own free act and without any pressure or duress of any
description. 

7. GOVERNING LAW

This Release shall be governed by and constructed in accordance
with the laws of the Province of British Columbia exclusively. Each party
irrevocably attorns to the exclusive jurisdiction of the courts of British
Columbia, with respect to any legal proceedings arising herefrom.

IN WITNESS WHEREOF the undersigned, on his own behalf and also
on behalf of the Releasors as defined herein, have executed this Release, at
2580 Anthem Village Dr., Henderson, Nevada 89052 this 27th day of
September 2013.

	ROYAL MINES AND MINERALS CORP. 	 
	 	  	 
	 	  	 
	 		 
	Per: 	/s/ Jason S. Mitchell 	 
	 	Authorized Signatory 	 






Schedule B

REPRESENTATION LETTER OF U.S. CREDITOR




Schedule C

VOLUNTARY POOLING AGREEMENT




Schedule D

ESCROW AGREEMENT