Untitled Document








 





Exhibit
10.5


 


AMENDMENT

TO

LONGSTREET PROPERTY OPTION
AGREEMENT

 

This Property
Option Agreement Amendment (the “2016 Amendment”) is
executed this 5th day of January, 2016 by and between MinQuest,
Inc., a Nevada corporation (“MinQuest’) and Star Gold
Corp., a Nevada corporation (“Star Gold”) (each a
“Party”
and together the “Parties”).

 


RECITALS

 


	
 

	
A.

	
MinQuest and Star
Gold entered into a Property Option Agreement (the
“Option
Agreement”), dated January 15, 2010, for the property
referred to in the Option Agreement as the “Longstreet
Property” (the “Property”);






 


	
 

	
B.

	
Minquest and Star
Gold subsequently entered into an Amendment to Longstreet Property
Option Agreement (the “2014 Amendment), dated December 10,
2014:






 


	
 

	
C.

	
Section 4 of the
Option Agreement requires Star Gold to incur certain levels of
Expenditures on the Property, make certain cash payments to
MinQuest and issue to MinQuest certain numbers of options to
purchase Star Gold common stock (the “Options”), according to
the schedules set forth therein;






 


	
 

	
D.

	
Section 2 of the
2014 Amendment adjusts the timing and amounts of the required
Expenditures, cash payments and option grants in the original
Option Agreement;






 


	
 

	
E.

	
The Parties now
desire to further revise portions of the 2014 Amendment to adjust
the timing and amounts of the required Expenditures, cash payments
and option grants required by Section 2 of the Option
Agreement,






 

NOW, THEREFORE, in
consideration of the covenants, agreements, representations and
warranties set forth in this 2015 Amendment, the Parties hereby
covenant, agree, represent and warrant as follows.

 


AGREEMENT

 


	
1.

	
DEFINITIONS.






 

All capitalized
terms not defined in this 2016 Amendment shall have the meaning
ascribed to those terms in the Purchase Agreement.



 

1






 





 


	
2.

	
AMENDMENTS.






 

Section 4 of the
Option Agreement shall be amended to provide for the following
schedule for Star Gold to incur the listed Expenditures, make the
listed cash payments and grant the listed Options to
MinQuest:

 


	
 

	
(a)

	
Between January 17,
2015 and January 16, 2016 Star Gold shall:






 


	
 

	
(i)

	
incur Expenditures
on the Property (including any surplus Expenditures incurred prior
to January 17, 2015) of one hundred thousand and no/100 dollars
($100,000.00); and






 


	
 

	
(ii)

	
make cash payments
to MinQuest (independent of any required cash payments made prior
to January 17, 2015) totaling twenty thousand and no/100 dollars
($20,000.00). Payment shall be made no later than January 16, 2016;
and






 


	
 

	
(iii)

	
grant MinQuest
twenty five thousand (25,000) Options (independent of any Options
previously granted) to be exercised at the Fair Market
Price.






 


	
 

	
(b)

	
Between January 17,
2016 and January 16, 2017 Star Gold shall:






 


	
 

	
(i)

	
incur Expenditures
on the Property (including any surplus Expenditures incurred prior
to January 17, 2016) of one hundred fifty thousand and no/100
dollars ($150,000.00); and






 


	
 

	
(ii)

	
make cash payments
to MinQuest (independent of any required cash payments made prior
to January 17, 2016) totaling twenty five thousand and no/100
dollars ($25,000.00). Payment shall be made no later than January
16, 2017; and






 


	
 

	
(iii)

	
grant MinQuest
twenty five thousand (25,000) Options (independent of any Options
previously granted) to be exercised at the Fair Market
Price.






 


	
 

	
(c)

	
Between January 17,
2017 and January 16, 2018 Star Gold shall:






 


	
 

	
(i)

	
incur Expenditures
on the Property (including any surplus Expenditures incurred prior
to January 17, 2017) of three hundred thousand and no/100 dollars
($300,000.00); and






 


	
 

	
(ii)

	
make cash payments
to MinQuest (independent of any required cash payments made prior
to January 17, 2017) totaling thirty five thousand and no/100
dollars ($35,000.00). Payment shall be made no later than January
16, 2018; and






 


	
 

	
(iii)

	
grant MinQuest
forty thousand (40,000) Options (independent of any Options
previously granted) to be exercised at the Fair Market
Price.






 


	
 

	
(d)

	
Between January 17,
2018 and January 16, 2019 Star Gold shall:






 


	
 

	
(i)

	
incur Expenditures
on the Property (including any surplus Expenditures incurred prior
to January 17, 2018) of five hundred thousand and no/100 dollars
($500,000.00); and






 


	
 

	
(ii)

	
make cash payments
to MinQuest (independent of any required cash payments made prior
to January 17, 2018) totaling forty thousand and no/100 dollars
($40,000.00). Payment shall be made no later than January 16, 2019;
and






 


	
 

	
(iii)

	
grant MinQuest
forty five thousand (45,000) Options (independent of any Options
previously granted) to be exercised at the Fair Market
Price.








 

2






 





 


	
 

	
(e)

	
Between January 17,
2019 and January 16, 2020 Star Gold shall:






 


	
 

	
(i)

	
incur Expenditures
on the Property (including any surplus Expenditures incurred prior
to January 17, 2019) of seven hundred thousand and no/100 dollars
($700,000.00); and






 


	
 

	
(ii)

	
make cash payments
to MinQuest (independent of any required cash payments made prior
to January 17, 2019) totaling forty thousand and no/100 dollars
($40,000.00). Payment shall be made no later than January 16, 2020;
and






 


	
 

	
(iii)

	
grant MinQuest
fifty thousand (50,000) Options (independent of any Options
previously granted) to be exercised at the Fair Market
Price.






 


	
 

	
(f)

	
Upon satisfaction
of cumulative required Expenditures and transfer of property to
Star Gold Corp. by MinQuest, Star Gold shall:






 


	
 

	
(i)

	
make cash payments
to MinQuest totaling eighty five thousand and no/100 dollars
($85,000.00). Payment shall be made no later than January 16,
2021.






 


	
3.

	
MISCELLANEOUS.






 

3.1       No
Third Parties Benefited. This Amendment is between and for
the sole benefit of Star Gold and MinQuest and their successors and
assigns, and creates no rights whatsoever in favor of any other
person or entity and no other person or entity will have any rights
to rely hereon.

 

3.2       Notices.
All notices or other written communications hereunder will be
deemed to have been properly given (i) upon delivery, if delivered
in person or by facsimile transmission with receipt of an
electronic confirmation thereof, (ii) one Business Day after having
been deposited for overnight delivery with any reputable overnight
courier service, or (iii) three Business Days after having been
deposited in any post office or mail depository regularly
maintained by the U.S. Postal Service and sent by registered or
certified mail, postage prepaid, return receipt requested,
addressed as follows:

 


	
If to Star
Gold:

	
Attn: Lindsay E.
Gorrill

611 E. Sherman Avenue

Coeur d’ Alene, ID 83814

Phone: (208) 664-5066

Fax: (208) 765-8520


	
 

	
 


	
With a copy
to:

	
Parsons/Burnett/Bjordahl/Hume,
LLP

Attn: Robert J. Burnett

505 W. Riverside Avenue, Suite 500

Spokane, Washington 99201

Phone: (509) 252-5066

Fax: (509) 252-5067


	
 

	
 


	
If to
MinQuest:

	
Attn:
Richard Kern

4325
Christy Way

Reno,
NV 89519

Phone:
(775) ______________

Fax: (___) ________________

 


	
With a copy
to:

	
Herb Duerr

1680 Greenfield Drive

Reno, NV 89509

Phone: (775) 825-8215








 

3






 





 

3.3       Additional
Documents. Each Party shall execute such additional
documents as may reasonably be requested by the other Party to
effectuate the provisions of this Amendment.

 

3.4       Assignment.
No Party may assign its rights or obligations under this Amendment
without the prior written consent of the other Party. Any purported
assignment without the other Party’s prior written consent
will be void ab initio.

 

3.5       Authorization;
Binding Effect. Each Party represents to the other that its
execution of this Amendment has been authorized by all necessary
corporate action and that this Amendment constitutes a binding
obligation of such Party. Each individual who executes this
Amendment on behalf of a Party represents to all Parties that he or
she is authorized to do so. This Amendment will bind each
Party’s successors and permitted assigns.

 

3.6       Attorneys’
Fees. If a Party is in default under this Amendment the
other Party will have the right, at the expense of the defaulting
Party, to retain an attorney to make demand, enforce remedies, or
otherwise protect or enforce the rights of the non-defaulting
Party. A Party in default shall pay all attorneys’ fees and
costs so incurred.

 

3.7       Consents
and Approvals. Unless specifically stated to the contrary in
this Amendment (i.e., by stating that a Party’s consent or
approval may be granted or withheld in its sole discretion),
whenever any provision of this Amendment requires a Party to
provide its consent or approval, such Party will not unreasonably
condition, withhold or delay such consent or approval, provided
that the Party seeking the consent is not in default under the
Agreement.

 

3.8       Consent
Required to Amend or Waive. No amendment or modification of
any provision of this Amendment will be effective unless made in
writing and signed by each of the Parties.

 

3.9       Counterparts.
This Amendment may be executed in counterparts each of which will
be deemed an original and such counterparts when taken together
shall constitute but one agreement.

 

 

 

 

 

 



 

4






 





 

3.10       Entire
Agreement. This Amendment sets forth the entire
understanding of the Parties with respect to the subject matter of
this Amendment and supersedes all prior agreements and
understandings between the Parties regarding the subject matter of
this Amendment. No other amendments to the Option Agreement are
contemplated or intended by this Amendment except such other
amendments as may be required to carry out the specific terms and
intent of this Amendment.

 

3.11       Governing
Law; Consent to Jurisdiction. This Amendment and its
interpretation and enforcement are governed by the laws of the
state of Nevada. Each Party agrees that venue for any dispute
arising out of or in connection with this Amendment will be in
Mineral County, Nevada and each Party waives any objections it may
now or hereafter have regarding such venue.

 

3.12       No
Waiver. No waiver by any Party of any right or default under
this Amendment will be effective unless in writing and signed by
the waiving Party. No such waiver will be deemed to extend to any
prior or subsequent right or default or affect in any way any
rights arising by virtue of any prior or subsequent such
occurrence.

 

3.13       Relationship
of the Parties. The relationship of the Parties is strictly
one of Optionor and Optionee. This Amendment is neither intended
to, nor will it be construed as, an agreement to create a joint
venture, partnership, or other form of business association between
the Parties.

 

3.14       Severability.
If for any reason any provision of this Amendment is determined by
a tribunal of competent jurisdiction to be legally invalid or
unenforceable, the validity of the remainder of the Amendment will
not be affected and such provision will be deemed modified to the
minimum extent necessary to make such provision consistent with
applicable law and, in its modified form, such provision will then
be enforceable and enforced.

 

3.15       Terminology.
Unless specifically indicated to the contrary: (i) wherever from
the context it appears appropriate, each term stated in either the
singular or the plural will include the plural and the masculine
gender will include the feminine and neuter genders; (ii) the term
“or” is not exclusive; (iii) the term
“including” (or any form thereof) will not be limiting
or exclusive; (iv) the words “Amendment,”
“herein,” “hereof,”
“hereunder,” or other words of similar import refer to
this Amendment as a whole, including exhibits and schedules (if
any), as the same may be modified, amended or supplanted. The
headings in this Amendment have no independent
meaning.

 

3.16       Disclaimer—Preparation
of Amendment. This Amendment was originally prepared by
counsel for Star Gold. The Parties agree, however, that this fact
shall not create any presumption in favor or against any Party in
respect of the interpretation or enforcement of this Amendment.
Each other Party is advised to have this Amendment reviewed by
independent legal and tax counsel prior to its execution. By
executing this Amendment each such Party represents (i) that it has
read and understands this Amendment, (ii) that it has had the
opportunity to obtain independent legal and tax advice regarding
this Amendment and (iii) that it has obtained such independent
advice or has freely elected not to do so.



 

5






 





 



 

 

 

 

 

[SIGNATURE PAGE TO
FOLLOW - AMENDMENT TO LONGSTREET PROPERTY

OPTION AGREEMENT]

 

[SIGNATURE PAGE -
AMENDMENT TO LONGSTREET PROPERTY OPTION

AGREEMENT]

 

IN WITNESS WHEREOF,
the Parties hereto have caused this Amendment to be executed as of
the date first written above.

 


	
STAR GOLD
CORP.

	
 

	
 

	
 


	
 

	
 

	
 

	
 


	
BY:

	
 

	


	
 


	
 

	
 

	
Lindsay E. Gorrill,
Chairman

	
 


	
 

	
 

	
 

	
 


	
MINQUEST,
INC.

	
 

	
 

	
 


	
 

	
 

	
 

	
 


	
BY:

	
 

	


	
 


	
 

	
 

	
Richard R.
Kern

	
 


	
 

	
 

	
 

	
 


	
MINQUEST,
INC.

	
 

	
 

	
 


	
 

	
 

	
 

	
 


	
BY:

	
 

	


	
 


	
 

	
 

	
Herb
Duerr

 

 

 

 

 

 

 

 

 

	
 








 

6






 





 


EXHIBIT A – PAYMENT SCHEDULE

 

The schedule of
payments in Exhibit A is presented for purposes of clarification.
The overriding payment schedule is the narrative described in Sec 2
(a) to (f).

 


	
Required annual

expenditure between:

	
 

	
Required

expenditure

	
 

	
 

	
Annual stock

option grant to

Minquest

	
 

	
 

	
Annual

Payment Due to

Minquest

	
 

	
 

	
Annual stock

option grant and

Payment to

Minquest due

date


	
1/17/15

	
 

	
1/16/16

	
 

	
$

	
100,000

	
 

	
 

	
 

	
25,000

	
 

	
 

	
$

	
20,000

	
 

	
 

	
1/16/16


	
1/17/16

	
 

	
1/16/17

	
 

	
$

	
150,000

	
 

	
 

	
 

	
25,000

	
 

	
 

	
$

	
25,000

	
 

	
 

	
1/16/17


	
1/17/17

	
 

	
1/16/18

	
 

	
$

	
300,000

	
 

	
 

	
 

	
40,000

	
 

	
 

	
$

	
35,000

	
 

	
 

	
1/16/18


	
1/17/18

	
 

	
1/16/19

	
 

	
$

	
500,000

	
 

	
 

	
 

	
45,000

	
 

	
 

	
$

	
40,000

	
 

	
 

	
1/16/19


	
1/17/19

	
 

	
1/16/20

	
 

	
$

	
700,000

	
 

	
 

	
 

	
50,000

	
 

	
 

	
$

	
45,000

	
 

	
 

	
1/16/20


	
Upon transfer of
property

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
$

	
85,000

	
 

	
 

	
Payment due upon
transfer but no later than 1/16/21


	
TOTAL

	
 

	
$

	
1,750,000

	
 

	
 

	
 

	
185,000

	
 

	
 

	
$

	
250,000

	
 

	
 

	
 






 

All allowable
expenditures in excess of the required annual expenditure shall be
carried-over to the subsequent year.

 

 

 

 

 

 

 

 

 

 

 

 

 




 

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