exh4-3_agmt.htm


 










 


 


 


 


 


 


EXHIBIT 4.3


 


LETTER AGREEMENT DATED SEPTEMBER 21, 2010 WITH


TEMEX RESOURCES CORP RE: OPTION AND JOINT VENTURE ON THE


CROXALL PROPERTY, CANCELLATION OF DECEMBER 12, 2007


OPTION AND JOINT VENTURE JAMES BAY LOWLANDS




 




  





  











  








TEMEX RESOURCES CORP.


1660-141 Adelaide Street West


Toronto, Ontario CANADA  M5H 3L5


tel: 416-862-2246 fax: 416-862-2244


website: www.temexcorp.com


email: info@temexcorp.com

















September 21, 2010












Mill City Gold Corp.


4719 Chapel Road NW


Calgary, AB   T2L 1A7












Attention:  James R. Brown, President












Dear Jim:







Re:  Option and Joint Venture on the Croxall Property,


Cancellation of December 12, 2007 Option and Joint Venture James Bay Lowlands












Temex Resources Corp. (“Temex”) is pleased to confirm the basis upon which they will grant to Mill City Gold Corp. (“Mill City”) an option to earn an undivided 75% participating interest (the “Option”) in the Croxall Property.  The subject matter of this letter agreement is the Croxall Property comprising 59 mining claims totalling 60 claim units (the “Claims”) currently recorded in the name of Temex Resources Corp. but held by Temex Resources Corp. pursuant to an agreement dated June 22, 2009 with the vendors of the Croxall property namely, James E. Croxall, Margaret M. Kangas, and Robert John DeCarle, a true and complete copy of which is enclosed herewith (the “Croxall Agreement”).  The Croxall Property (as more particularly described on Schedule A and depicted on Figure 1 hereto annexed) is located near Timmins in Northern Ontario within Ogden, Price and Thorneloe townships in the Porcupine Mining Division.







To exercise the Option, Mill City shall be required:



	
  

	
1.

	
subject to TSX-V approval, to issue 250,000 Mill City common shares to Temex within 30 days of execution and delivery (“upon signing”) hereof;








	
  

	
2.

	
to incur not less than $250,000 of exploration expenditures on or in respect of the Croxall Property before the first anniversary of signing;








	
  

	
3.

	
to incur not less than an additional $500,000 (an aggregate of $750,000 inclusive of the $250,000 firm commitment referred to in paragraph 2) of exploration expenditures on or in respect of the Croxall Property before the fourth anniversary of signing; and







 


 




  





  











  






 


 


 


 



	
  

	
4.

	
to make all remaining cash payments in a timely manner as required under the Croxall Agreement (items 2.2.3 and 2.2.4 and any advanced royalty payments required in the Croxall Agreement). Temex shall be responsible to issue the Temex shares due to the vendors under the Croxall Agreement;








	
  

	
5.

	
to execute a document agreeing to immediately and finally terminate its agreement with Temex regarding the “Option and Joint Venture Agreement dated December 12, 2007 covering 1012 claim units in the Sachigo Greenstone Belt in the James Bay Lowlands in northern Ontario (the Northern and Southern Star Eagle claims) for no additional consideration







 


provided that, the obligations set forth in paragraphs 1 and 2 and 5 are firm commitments made by Mill City to Temex , and the obligations set forth in paragraphs 3, 4 and are optional in the sole discretion of Mill City, and Mill City shall be entitled to accelerate such obligations at any time in its sole discretion.







Mill City shall be entitled to extend for one year the time for completion of each milestone of the Work Commitment, by notice to Temex if given prior to the applicable anniversary of signing.  Each extension shall require Mill City, subject to TSX-V approval, to allot and issue to Temex 125,000 Mill City Shares.  For greater certainty, if an extension of time is granted by Temex to Mill City for completion of a specified cumulative level of exploration expenditures by a particular anniversary date, it shall operate to defer the time of performance of each subsequent anniversary expenditure milestone by one year and require Mill City to allot and issue to Temex 125,000 Mill City Shares.  If no extension is granted to Mill City in accordance with the foregoing then Mill City shall exercise the Option on or before the fourth anniversary of signing (the expiration of the “Earn-in Period”) provided that each such extension which is granted to Mill City shall extend the Earn-in Period by one year.







Temex is currently the Operator of the Croxall Property, and Mill City will replace Temex as Operator during the Earn-in Period and shall appoint Temex as its agent (“Agent”) to carry out all exploration programs to be funded by Mill City under this letter agreement or other replacement document.  As Agent, Temex is entitled to charge an overhead allowance for managing exploration programs equal to 10% of all exploration expenditures, except where the cost of an individual item exceeds $100,000, in which case such overhead allowance is reduced to 5% of the cost of such items.











  





  











  








If during the Earn-in Period Mill City satisfies all its obligations set forth in paragraphs 1 through 5 inclusive, which are conditions precedent to the exercise of the Option, Mill City shall be entitled to give notice to Temex of the exercise of the Option by certifying compliance with the terms in paragraphs 1 through 5.  If the Option is exercised there shall be a novation of the Croxall Joint Venture Agreement whereby Mill City shall be deemed to have acquired a Participating Interest (as therein defined) in the Croxall Joint Venture giving Mill City an undivided 75% interest in the Croxall Property, and the Participating Interest of Temex shall be 25%.







Temex shall then have 60 days from the date of exercise of the Option to elect either:



	
  

	
(a)

	
to continue to participate in the Croxall Joint Venture with Mill City for the further exploration and development of the Croxall Property; or








	
  

	
(b)

	
Temex shall allow its interest in the Joint Venture to be diluted by Mill City







provided that, Temex shall have the right to participate at any time until its interest is diluted to less than 10% at which time its interest in the Croxall Property shall automatically and for no further consideration be reduced to zero.







For clarity of matters relating to the Joint Venture on the Croxall Property and the operations to be carried out thereupon, the parties agree to negotiate the framework for the Joint Venture on the Croxall Property in good faith subsequent to the exercise of the Option by Mill City. In the absence of such agreement for any reason, the parties agree that the document dated December 12, 2007 between the parties referred to above shall provide the terms and conditions that will govern the parties in relation to this property (with the appropriate changes to claim numbers etc. contained herein).







Any advance royalty payments due after the formation of the Joint Venture shall be an expense of the Joint Venture.







If Temex elects to continue to participate in the Croxall Joint Venture with Mill City for the further exploration and development of the Croxall Property, then Temex shall be deemed to have an initial investment in the Croxall Joint Venture of $750,000, and Mill City shall be deemed to have an initial investment of $750,000 as at the date of exercise of the Option, for the purposes of establishing dilution under the Croxall Joint Venture Agreement.







Temex agrees to, while this agreement or any subsequent agreement relating to the Croxall Property remains in full force and effect, vote any and all of its Mill City shares in favour of the then current management.


 




  





  











  








 


If you concur with the foregoing please so signify by signing and returning a copy hereof to Temex.







Yours very truly,







TEMEX RESOURCES CORP.







Ian Campbell, President and CEO


 


 


/s/ Ian Campbell









Agreed to and accepted this    21st   day of September, 2010


by and on behalf of

















MILL CITY GOLD CORP.







 


/s/ James R. Brown






 


James R. Brown, President and CEO











  





  











  








SCHEDULE A:  Claims Description







Recorded Holder:  Temex Resources Corp. 100%








	  	
Claim

	
Township/Area

	
G-Plan

	
Units

	
Acres

	
Recording Date

	
Claim Due Date


	  	  	  	  	  	  	  	  
	
1

	
849065

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-14

	
2016-Feb-14


	
2

	
849066

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-14

	
2016-Feb-14


	
3

	
849067

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-14

	
2016-Feb-14


	
4

	
849068

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-14

	
2016-Feb-14


	
5

	
849069

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-28

	
2016-Feb-28


	
6

	
871790

	
PRICE

	
M-0307

	
1

	
40

	
1986-Mar-17

	
2016-Mar-17


	
7

	
871791

	
PRICE

	
M-0307

	
1

	
40

	
1986-Mar-17

	
2016-Mar-17


	
8

	
871792

	
PRICE

	
M-0307

	
1

	
40

	
1986-Mar-17

	
2016-Mar-17


	
9

	
871793

	
PRICE

	
M-0307

	
1

	
40

	
1986-Mar-17

	
2016-Mar-17


	
10

	
871794

	
PRICE

	
M-0307

	
1

	
40

	
1986-Mar-17

	
2016-Mar-17


	
11

	
871795

	
PRICE

	
M-0307

	
1

	
40

	
1986-Apr-01

	
2016-Apr-01


	
12

	
871796

	
PRICE

	
M-0307

	
1

	
40

	
1986-Apr-01

	
2016-Apr-01


	
13

	
871797

	
PRICE

	
M-0307

	
1

	
40

	
1986-Apr-01

	
2016-Apr-01


	
14

	
880296

	
THORNELOE

	
G-3229

	
1

	
40

	
1986-Feb-14

	
2016-Feb-14


	
15

	
880297

	
THORNELOE

	
G-3229

	
1

	
40

	
1986-Feb-14

	
2016-Feb-14


	
16

	
880298

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-28

	
2016-Feb-28


	
17

	
880299

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-28

	
2016-Feb-28


	
18

	
880300

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-28

	
2016-Feb-28


	
19

	
880301

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-28

	
2016-Feb-28


	
20

	
880302

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-28

	
2016-Feb-28


	
21

	
880303

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-28

	
2016-Feb-28


	
22

	
880304

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-28

	
2016-Feb-28


	
23

	
880305

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-28

	
2016-Feb-28


	
24

	
880306

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-28

	
2016-Feb-28


	
25

	
880307

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-28

	
2016-Feb-28


	
26

	
880308

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-28

	
2016-Feb-28


	
27

	
880309

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-28

	
2016-Feb-28


	
28

	
880310

	
PRICE

	
M-0307

	
1

	
40

	
1986-Feb-28

	
2016-Feb-28


	
29

	
889259

	
PRICE

	
M-0307

	
1

	
40

	
1986-Mar-26

	
2016-Mar-26


	
30

	
889260

	
PRICE

	
M-0307

	
1

	
40

	
1986-Mar-26

	
2016-Mar-26


	
31

	
889261

	
PRICE

	
M-0307

	
1

	
40

	
1986-Mar-26

	
2016-Mar-26


	
32

	
889262

	
PRICE

	
M-0307

	
1

	
40

	
1986-Mar-26

	
2016-Mar-26


	
33

	
889263

	
PRICE

	
M-0307

	
1

	
40

	
1986-Mar-26

	
2016-Mar-26


	
34

	
889264

	
PRICE

	
M-0307

	
1

	
40

	
1986-Mar-26

	
2016-Mar-26


	
35

	
900409

	
PRICE

	
M-0307

	
1

	
40

	
1986-Apr-01

	
2016-Apr-01


	
36

	
900410

	
PRICE

	
M-0307

	
1

	
40

	
1986-Apr-01

	
2016-Apr-01


	
37

	
900411

	
PRICE

	
M-0307

	
1

	
40

	
1986-Apr-01

	
2016-Apr-01


	
38

	
900412

	
PRICE

	
M-0307

	
1

	
40

	
1986-Apr-01

	
2016-Apr-01


	
39

	
900413

	
PRICE

	
M-0307

	
1

	
40

	
1986-Apr-01

	
2016-Apr-01


	
40

	
900414

	
PRICE

	
M-0307

	
1

	
40

	
1986-Apr-01

	
2016-Apr-01





 


 




  





  











  






 


 


	
41

	
900415

	
PRICE

	
M-0307

	
1

	
40

	
1986-Apr-01

	
2016-Apr-01


	
42

	
905586

	
THORNELOE

	
G-3229

	
1

	
40

	
1986-Aug-19

	
2016-Aug-19


	
43

	
905587

	
THORNELOE

	
G-3229

	
1

	
40

	
1986-Aug-18

	
2016-Aug-18


	
44

	
905588

	
PRICE

	
M-0307

	
1

	
40

	
1986-Aug-19

	
2016-Aug-19


	
45

	
988131

	
PRICE

	
M-0307

	
1

	
40

	
1987-May-06

	
2016-May-06


	
46

	
988132

	
PRICE

	
M-0307

	
1

	
40

	
1987-May-06

	
2016-May-06


	
47

	
988133

	
PRICE

	
M-0307

	
1

	
40

	
1987-May-06

	
2016-May-06


	
48

	
998017

	
OGDEN

	
G-3979

	
1

	
40

	
1987-Aug-11

	
2016-Aug-11


	
49

	
998021

	
OGDEN

	
G-3979

	
1

	
40

	
1987-Aug-11

	
2016-Aug-11


	
50

	
998246

	
OGDEN

	
G-3979

	
1

	
40

	
1987-Jul-28

	
2016-Jul-28


	
51

	
998247

	
OGDEN

	
G-3979

	
1

	
40

	
1987-Jul-28

	
2016-Jul-28


	
52

	
998248

	
OGDEN

	
G-3979

	
1

	
40

	
1987-Jul-28

	
2016-Jul-28


	
53

	
1033734

	
PRICE

	
M-0307

	
1

	
40

	
1988-Mar-31

	
2016-Mar-31


	
54

	
1033736

	
PRICE

	
M-0307

	
1

	
40

	
1988-Mar-31

	
2016-Mar-31


	
55

	
1033737

	
PRICE

	
M-0307

	
1

	
40

	
1988-Mar-31

	
2016-Mar-31


	
56

	
1126672

	
PRICE

	
M-0307

	
1

	
40

	
1994-Mar-02

	
2016-Mar-02


	
57

	
1159644

	
THORNELOE

	
G-3229

	
1

	
40

	
1991-Feb-18

	
2016-Feb-18


	
58

	
1159645

	
THORNELOE

	
G-3229

	
1

	
40

	
1991-Feb-18

	
2016-Feb-18


	
59

	
1177832

	
THORNELOE

	
G-3229

	
2

	
80

	
1993-May-25

	
2016-May-25


	
59

	  	  	  	
60

	
2400