Document:

Unassociated Document

EXHIBIT 10.7

 

AGREEMENT TO PURCHASE INTEREST IN CLAIMS

 

THIS AGREEMENT effective as of the 28th day of February, 2014 (the “Effective Date”).

 

	
BETWEEN:

	
ENERGIZER RESOURCES INC., a corporation existing under the laws of the State of Minnesota and having a place of business at 141 Adelaide Street West, Suite 520, Toronto, Ontario, M5H 3L5

	
  

	
(hereinafter referred to as the “Vendor”)

	
AND:

	
HONEY BADGER EXPLORATION INC., a corporation existing under the laws of Ontario and having a place of business at 141 Adelaide Street West, Suite 520, Toronto, Ontario, M5H 3L5

	
  

	
(hereinafter referred to as the “Purchaser”)

WHEREAS the Vendor is the beneficial and duly registered owner of 377 mining claims located in the Province of Québec, Canada, known as the Sagar Property, as more particularly described in Schedule “A” attached hereto to form part hereof (the “Claims”);

WHEREAS Virginia Mines Inc. (the “Virginia”) currently holds a 1.5% net smelter return royalty (the “Virginia Royalty”) affecting certain of the Claims, as more particularly described in Schedule “B” attached hereto, the whole pursuant to the terms and conditions of that certain letter of intent entered into between the Vendor and Virginia as of April 27, 2006 (the “Virginia Agreement”) pursuant to which the Vendor acquired its interest in the Claims that are subject to the Virginia Royalty;

WHEREAS pursuant to the Virginia Agreement, should the Vendor discover a potentially exploitable Gold Deposit (as defined in the Virginia Agreement) with an indicated resource outlined (defined according to NI 43-101 – Standards of Disclosure for Mineral Projects) of no less than 500,000 ounces of contained gold equivalent (for all precious metals), Virginia shall have, within 90 days of notice of the Vendor of the discovery of such Gold Deposit, a one-time right (the “Back-In Right”) to re-acquire a 51% interest in the Claims that are subject to the Virginia Royalty, by issuing a cash payment or common shares of Virginia equivalent to that amount equal to two and a half times the Current Expenditures (as defined in the Virginia Agreement) incurred by the Vendor on the discovery prior to Virginia’s election;

WHEREAS pursuant to the Virginia Agreement, Virginia has a right of first refusal on any sale, assignment or transfer of the Vendor’s interests in the Claims (the “Right of First Refusal”);

WHEREAS Pierre Poisson (50%) and Joanne Jones (50%) currently hold a 1% net smelter return royalty (the “First Royalty”) affecting certain of the Claims, as more particularly described in Schedule “C” attached hereto to form part hereof, of which 0.5% may be re-purchased by the Vendor for $200,000, the whole pursuant to the terms and conditions of that certain option agreement entered into among Virginia, Pierre Poisson and Joanne Jones as of May 27, 1992 (the “Poisson Agreement”) pursuant to which Virginia acquired its interest in the Claims acquired pursuant to the Poisson Agreement;

 

  

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WHEREAS Pierre Poisson (50%) and Joanne Jones (50%) currently hold a 0.5% net smelter return royalty (the “Second Royalty”) affecting certain of the Claims, as more particularly described in Schedule “D” attached hereto to form part hereof, of which 0.25% may be repurchased by the Vendor for $100,000, the whole pursuant to the terms and conditions of that certain amendment agreement entered into amongst Virginia, Pierre Poisson and Joanne Jones as of November 3, 1992 (the “Amending Agreement”);

WHEREAS the Purchaser has agreed to purchase a 75% undivided interest in all of the rights, title and interests of the Vendor in and to the Claims and the Vendor has agreed to sell a 75% undivided interest in all of its rights, title and interests in and to such Claims to the Purchaser, subject to the terms and conditions set forth in this agreement (the “Transaction”); and

WHEREAS Virginia has waived its Right of First Refusal pursuant to the Virginia Agreement in connection with the Transaction provided that the Purchaser and the Vendor complete the Transaction within one year from the date hereof; should the Transaction not close within one year from the date hereof, Virginia shall have a fresh and new Right of First refusal in respect thereof, pursuant to the Virginia Agreement.

NOW, THEREFORE, THIS AGREEMENT WITNESSETH that, in consideration of the premises and the mutual covenants and agreements expressed herein, the Vendor and the Purchaser (hereinafter collectively referred to as the “Parties” and, individually, a “Party”) hereby agree as follows:

	
1.  

	
Reciprocal Representations and Warranties

	
1.1  

	
Each Party hereby represents and warrants to each of the other Parties that, as of the date hereof:

	
(a)  

	
it is a body corporate duly incorporated or continued, as the case maybe, and in good standing under the laws of its jurisdiction of incorporation or continuation, as the case may be, is qualified to do business and is in good standing in those jurisdictions where necessary in order to carry out its purposes;

	
(b)  

	
all corporate and other actions required to authorize it to enter into and perform this agreement, the Transaction and all other transactions contemplated by this agreement have been properly taken, with the exception of the regulatory approvals and filings which are a condition of Closing (as defined in Section 7 hereof) (the “Regulatory Approvals”);

	
(c)  

	
it has all requisite corporate power to own, lease and operate its assets and to carry on its business as now conducted;

 

  

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(d)  

	
it has the capacity to enter into this agreement, the Transaction, all other transactions contemplated by this agreement and all other documents contemplated herein;

	
(e)  

	
subject to the Regulatory Approvals, it will not breach any other agreement or arrangement to which it is a party or be in violation of any law to which it is subject, by entering into or performing this agreement, the Transaction, all other transactions contemplated by this agreement and all other documents contemplated herein;

	
(f)  

	
this agreement has been duly executed and delivered by it and is valid and binding upon it in accordance with its terms; and

	
(g)  

	
except as otherwise set forth herein, no consent from a lender or any third party is necessary to authorize it to execute this agreement, to complete the Transaction and all other transactions contemplated by this agreement, and to execute and deliver all related documents.

	
2.  

	
Representations and Warranties of the Vendor

	
2.1  

	
The Vendor hereby represents and warrants to the Purchaser that, as of the date hereof:

	
(a)  

	
it is the beneficial and registered owner of a 100% interest in the Claims, free and clear of all defects, liens, adverse claims, demands, charges, restrictions, encumbrances, royalties and liabilities of any nature and quality whatsoever, existing or threatened, except for the First Royalty, the Second Royalty, the Virginia Royalty, the Back-In-Right and the Right of First Refusal (hereinafter collectively, the “Liens”), and the Purchaser shall acquire good, legal and marketable title to the Claims and beneficial ownership thereof; and

	
(b)  

	
it is not aware of any material facts or circumstances which have not been disclosed in this agreement and which should be disclosed in order to prevent the representations and warranties in this agreement from being materially misleading.

	
2.2  

	
With respect to the Claims, the Vendor hereby represents and warrants to the Purchaser that, as of the date hereof:

	
(a)  

	
Subject to the Liens, it is the exclusive and absolute owner of all mining and proprietary rights attaching to the Claims and proper evidence of such ownership has been duly filed, registered or recorded wherever necessary to perfect and preserve the Vendor's rights, title and interest thereto;

	
(b)  

	
all mining and proprietary rights have been properly staked or otherwise properly constituted, as applicable, and are valid, in good standing and free and clear of all liens, except for the Liens and public utilities,;

 

  

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(c)  

	
it does not owe any amount in connection with the First Royalty, the Second Royalty and the Virginia Royalty as of the Effective Date;

	
(d)  

	
it has delivered to the Purchaser all relevant information concerning title to each Claim;

	
(e)  

	
to the best of the Vendor's knowledge and belief, all activities and operations on any of the Claims, prior to the date hereof, have been performed in a manner consistent with the laws and regulations in effect at the relevant time and all filings required in order to maintain the mining rights in good standing have been properly and timely recorded or filed with the appropriate government agencies;

	
(f)  

	
there is no judgment, decree, injunction, ruling or order of any court, governmental department, commission, agency, instrumentality or arbitrator and no claim, suit, action, litigation, arbitration or governmental proceeding in progress, pending or threatened against or relating to, or affecting any of the Claims which could prevent the Vendor from entering into this agreement and performing its obligations hereunder and from completing the Transaction;

	
(g)  

	
to the best of the Vendor's knowledge and belief, each Claim is free and clear of any hazardous or toxic material, pollution, or other adverse environmental conditions which may give rise to any environmental liability;

	
(h)  

	
it has full authority to grant, sell, assign, and transfer to the Purchaser, as applicable, the mining and proprietary rights attaching to each Claim and its rights and obligations under each of the First Royalty, the Second Royalty and the Virginia Royalty, as contemplated herein; and

	
(i)  

	
it is not in default or violation of any agreement, lease, license, permit, certificate, instrument, regulation, statute or decree applicable to it, which default or violation could adversely affect its ownership of any of the Claims, its right to conduct mineral exploration thereon or its performance or operations in respect thereof.

	
2.3  

	
The Vendor represents and warrants to the Purchaser that each of the representations and warranties set forth in any provision of this Section 2 is true, correct and complete as at the date of this agreement and shall be true and accurate as of the Closing Date (as described in Section 7 hereof) as if given as of such date.

	
2.4  

	
The Vendor recognizes that the accuracy and completeness of each representation and warranty set forth in any provision of this Section 2 is a condition upon which the Purchaser is relying and without which the Purchaser would not have agreed to complete the Transaction.

	
2.5  

	
No investigation or inquiry made by or on behalf of the Purchaser shall have the effect of waiving or diminishing any of the representations and warranties set forth in any provision of this Section 2.

 

  

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3.  

	
Representations and Warranties of the Purchaser

	
3.1  

	
The Purchaser hereby represents and warrants to the Vendor that, as of the date hereof, it is not aware of any material facts or circumstances which have not been disclosed in this agreement and which should be disclosed in order to prevent its representations and warranties in this agreement from being materially misleading.

	
3.2  

	
This Agreement has been duly authorized by the board of directors of the Purchaser and no other corporate proceedings on the part of the Purchaser are necessary to authorize this Agreement, any related agreements to which the Purchaser is a party or the transactions contemplated hereby and thereby. This Agreement and all related agreements to which the Purchaser is a party have been duly executed and delivered by the Purchaser and constitute legal, valid and binding obligations of the Purchaser, enforceable against the Purchaser by the Vendor in accordance with their terms, except as enforcement may be limited by bankruptcy, insolvency and other laws affecting the rights of creditors generally and except that equitable remedies may be granted only in the discretion of a court of competent jurisdiction.

	
3.3  

	
The execution and delivery by the Purchaser of this Agreement and all related documents to which the Purchaser is a party, the performance by the Purchaser of its obligations hereunder and thereunder and the completion of the transactions herein and therein provided for will not result in the violation of, or constitute a default under or cause the acceleration of any obligation of the Purchaser under:

	
(a)  

	
any agreement to which the Purchaser is a party or by which it is bound;

	
(b)  

	
any provision of the constating documents or by-laws or resolutions of the board of directors (or any committee thereof) or shareholders of the Purchaser (and no conflict with the same will be caused thereby);

	
(c)  

	
any judgment, decree, order or award of any agency or arbitrator; or

	
(d)  

	
any applicable laws of Canada, Ontario or any jurisdictions where the Purchaser is qualified or required to be qualified to do business or where it carries on business.

	
3.4  

	
There is no requirement for the Purchaser to make any filing with, give any notice to or obtain any Permit of, any agency as a condition to the lawful consummation of the transactions contemplated by this Agreement

	
3.5  

	
Shares:

 

	
(a)  

	
Upon issuance, the Initial Vendor Shares and the Additional Vendor Shares (collectively, the “Shares”) will be duly authorized and validly issued as fully paid and non-assessable shares in the capital of the Purchaser.

	
(b)  

	
No prospectus is required nor are any other documents required to be filed, proceedings taken or approvals, permits, consents or authorizations obtained under the Ontario Securities Act and the rules and regulations thereunder ("Ontario Securities Laws") to permit the Vendor to trade the Shares in the Province of Ontario, either through registrants or dealers registered under Ontario Securities Laws who comply with such laws or in circumstances in which there is an exemption from the registration requirements under Ontario Securities Laws, provided that:

 

  

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(i)  

	
at the time of such trade, the Purchaser is and has been a "reporting issuer" (as defined under Ontario Securities Laws) in the Province of Ontario for the four months immediately preceding the trade;

	
(ii)  

	
at the time of such trade, at least four months have elapsed from the Closing Date;

	
(iii)  

	
a certificate representing the Shares has been issued that carries a legend in the form prescribed by National Instrument 45-102 – Resale of Securities ("NI 45-102");

	
(iv)  

	
the trade is not a "control distribution" (as such term is defined in NI 45-102) and the seller is not a "promoter" within the meaning of Ontario Securities Laws;

	
(v)  

	
no unusual effort is made to prepare the market or to create a demand for the Shares;

	
(vi)  

	
no extraordinary commission or consideration is paid to a person or company in respect of the trade; and

	
(vii)  

	
if the selling security holder is an insider or officer of the Purchaser, the selling security holder has no reasonable grounds to believe that the Purchaser is in default of "securities legislation" (as such term is defined in National Instrument 14-101).

	
(c)  

	
The Purchaser is, and has been for a period of four months, a "reporting issuer" (as defined under Ontario Securities Laws) in the Province of Ontario.

	
3.6  

	
In the past twelve month period, the Purchaser has made all securities filings that it was required to file under any applicable securities laws on a timely basis (the "Securities Filings"). As of their respective dates, each of the Securities Filings complied with all requirements of the applicable securities laws, and none of the Securities Filings contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Purchaser included in the Securities Filings: (i) comply with applicable accounting requirements and with the published rules and regulations of applicable securities laws with respect thereto; (ii) have been prepared in accordance with IFRS or Canadian GAAP, as applicable, during the period involved (except as may be indicated in the notes thereto or, in the case of unaudited financial statements, as permitted by applicable securities laws); and (iii) fairly present (subject, in the case of any unaudited statements, to recurring audit adjustments normal in nature and amount) the consolidated financial position of the Purchaser at the date thereof and the consolidated results of its operations and cash flows or changes in financial position for the periods then ended.

 

  

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4.  

	
Consideration

In order to complete the Transaction and as consideration for the purchase and sale of the 75% undivided interest in the Claims, the Purchaser agrees to the following:

	
4.1  

	
Cash Payments

	
(a)  

	
pay to the Vendor, by certified cheque, wire transfer or other form of payment acceptable to the Purchaser, the sum of $1,500,000 in cash (the “Initial Cash Payment”) within 15 days upon the earlier of (i) the completion of a financing, in accordance with Section 10.6 hereof, or (ii) nine months following the Effective Date; and

	
(b)  

	
pay to the Vendor, by cheque, wire transfer or other form of payment acceptable to the Purchaser, an additional sum of $1,500,000 in cash (the “Additional Cash Payment”) within 18 months of the Effective Date (the “Second Cash Payment”).

	
4.2  

	
Issuance of Shares

	
(a)  

	
issue and deliver to the Vendor within 15 days after the Initial Cash Payment, an amount of fully paid and non-assessable common shares of the Purchaser (the “Initial Vendor Shares”), which represents 9.5% of the Purchaser’s total number of issued and outstanding common shares at the time of issuance, to a maximum of 15,000,000 common shares;

	
(b)  

	
issue and deliver to the Vendor fully paid and non-assessable common shares of the Purchaser (the “Additional Vendor Shares”), within 15 days after the later of (i) receipt of the approval of the shareholders of the Purchaser and (ii) the Second Cash Payment an amount of common shares that in aggregate (Initial Vendor Shares plus Additional Vendor Shares) does not represent a number of common shares greater than 15% (the “Vendor’s Equity Position”) of the Purchaser’s issued and outstanding common shares at the time of issuance, to an aggregate maximum of 35,000,000 common shares, which is inclusive of the Initial Vendor Shares.

For clarity, the maximum Additional Vendor Share issuance would be the lesser of 20,000,000 common shares or a number of shares that when added to the Initial Vendor Shares previously issued to the Vendor represents an aggregate number of shares equal to 15% of the Purchaser’s issued and outstanding shares at the time of issuance;

 

  

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(c)  

	
if regulatory or shareholder approval for the issuance of the Additional Vendor Shares has not been received and therefore, the Additional Vendor Shares cannot be issued to the Vendor pursuant to the terms of this agreement, the Purchaser shall pay to the Vendor an additional sum of $750,000 in lieu of the Additional Vendor Shares to acquire the initial 75% interest in the Claims and will submit a request to the TSX Venture Exchange («TSXV») to issue an amount of shares that when added to the Initial Vendor Shares previously issued to the Vendor does not represent an aggregate number of common shares greater than 9.5% of the Purchaser’s issued and outstanding common shares at the time of issuance, to a maximum of 20,000,000 common shares; and

	
(d)  

	
the Initial Vendor Shares and the Additional Vendor Shares to be issued pursuant to Section 4.2 hereof shall be issued under a private placement exemption and subject to a four-month restricted period stipulated in a legend and any other restrictions under applicable securities laws or TSXV rules, before becoming freely tradable, the issuance of which shall be subject to prior acceptance for listing by the TSXV.

	
5.  

	
Right of First Refusal

The Purchaser hereby acknowledges and agrees that Virginia has waived its Right of First Refusal pursuant to the Virginia Agreement in connection with the Transaction provided that the Purchaser and the Vendor complete the Transaction within one year from the date hereof; should the Transaction not close within one year from the date hereof, Virginia shall have a fresh and new Right of First refusal in respect thereof, pursuant to the Virginia Agreement.

	
6.  

	
Assignment of the Virginia Agreement, Poisson Agreement and Amending Agreement

	
6.1  

	
The Purchaser acknowledges and agrees that the Claims are subject to the Virginia Agreement, the Poisson Agreement and the Amending Agreement (collectively, the “Assigned Contracts”) and effective as of Closing, the Vendor hereby assigns and transfers unto the Purchaser a 75% undivided interest in all of its rights, interests, duties and obligations under each of the Assigned Contracts, and the Purchaser hereby accepts the assignment and transfer of the Assigned Contracts effective as of Closing and covenants and agrees that, from and after the Closing Date, the Purchaser will observe, perform and fulfil each and every covenant, provision, obligation, term and condition of, or applicable to the Vendor under the Assigned Contracts as if it was an original party thereto, and following such assignment and transfer, the Vendor shall be relieved of liability thereunder.

	
6.2

	
The Purchaser agrees to execute such further and other agreements, including with the parties to the Assigned Contracts, to evidence that the Purchaser has agreed to assume the obligations of the Vendor under the Assigned Contracts.

 

  

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7.  

	
Closing Date

Closing of the Transaction (the “Closing”), being the completion of the acquisition by the Purchaser of the Claims, shall take place on or prior to November 30, 2014 or such other date as may be agreed upon between the Vendor and the Purchaser (the “Closing Date”).

	
8.  

	
Covenants

	
8.1  

	
Covenants of the Purchaser:

	
(a)  

	
With respect to the issuance, sale and delivery of the Shares to the Vendor hereunder, the Purchaser covenants to use all reasonable commercial efforts to obtain all necessary approvals from the TSXV and comply with all necessary requirements of any applicable securities laws; and upon the issuance of the Shares to the Vendor, the Purchaser will have received all necessary approvals from the TSXV, and complied with all necessary requirements of any applicable securities laws, with respect to the issuance, sale and delivery of the Shares to the Vendor hereunder;

	
(b)  

	
The Purchaser shall present a resolution to its shareholders at its next annual meeting of shareholders scheduled for June 2014, to authorize and approve the aggregate issuance of up to 19.5% of the issued and outstanding capital of the Purchaser to the Vendor as required pursuant to this agreement

	
(c)  

	
the Purchaser shall use its best efforts to maintain its status as a "reporting issuer" under Canadian securities laws for a period of two (2) years following the Closing, and shall use its best efforts to maintain its listing of its common shares on the TSXV for a period of two (2) years following Closing.

	
9.  

	
Conditions of Closing

The Transaction shall be subject to the following conditions, which may be waived by the Purchaser or the Vendor, where applicable, in whole or in part:

	
9.1  

	
Due Diligence. Forthwith upon execution of this agreement, the Vendor shall arrange to provide the Purchaser and its authorized representatives and agents, free access, during reasonable business hours, to such information and records, which the Purchaser may reasonably request in order to obtain the information necessary to evaluate the Claims and to prepare the documentation necessary to obtain the Regulatory Approvals. The Vendor agrees to use reasonable commercial efforts to cause the officers, senior employees and other personnel and consultants of the Vendor to meet and collaborate with the Purchaser and its representatives in this regard. The Transaction is conditional upon the Purchaser being satisfied, in its sole and absolute discretion, with the results of such due diligence review.

 

  

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9.2  

	
Approvals. Before the Closing Date, all regulatory approvals, authorizations and other consents with respect to the Closing which may be required by law, together with all such permits, licenses and other authorizations as may be reasonably required in order to close the Transaction shall have been obtained, including, without limiting the generality of the foregoing, approval from the Toronto Stock Exchange for the Vendor and from TSXV for the Purchaser, failing which this agreement shall terminate and the parties shall have no further obligations thereunder, with the exception of those contained in Sections 15 and 166 hereof.

	
9.3  

	
Consents. Prior to the Closing Date, the Vendor shall have obtained all consents, permits and approvals from parties to any contracts or other agreements that may be required in connection with the Transaction, without limiting the generality of the foregoing, the consent of Virginia as contemplated in Section 5 hereof.

	
9.4  

	
Transfer of Documents. On the Closing Date, all necessary transfer forms, agreements, instruments, conveyances, assignments, releases and other document required or useful in the opinion of the Purchaser' legal advisors to properly convey the Claims to the Purchaser shall have been executed.

	
10.  

	
Delivery of Documents

The transactions contemplated herein and the purchase of the Claims by the Purchaser hereunder shall be conditional upon the delivery of the following documents at or before the Closing Date:

	
10.1  

	
Following the performance by the Purchaser of its obligations pursuant to Section 4 hereof, the Vendor shall execute, acknowledge and deliver to the Purchaser a Transfer of Mining Rights prepared by the Purchaser and satisfactory to the Vendor in proper form for registration in the Public Register of Real and Immovable Mining Rights maintained at the ministère des Ressources naturelles (Québec) in favour of the Purchaser pursuant to which the Vendor transfers to the Purchaser a 75% undivided interest in all of its right, title and interest in the Claims, with registration fees in connection with this transfer to be paid by the Purchaser.

	
10.2  

	
The Purchaser shall deliver or cause to be delivered to the Vendor an assignment, assumption and release agreement among the Vendor, the Purchaser, Pierre Poisson and Joanne Jones pursuant to which (i) the Vendor assigns to the Purchaser a 75% undivided interest in all its rights, interests, duties and obligations under each of the Poisson Agreement and the Amending Agreement in connection with each of the First Royalty and the Second Royalty; and (ii) the Purchaser agrees to observe and be bound by all of the provisions each of the Poisson Agreement and the Amending Agreement with respect to the rights, interests and obligations assigned to or assumed by the Purchaser in the place and stead of the Vendor in connection with the First Royalty and the Second Royalty.

 

  

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10.3  

	
The Purchaser shall deliver or cause to be delivered to the Vendor an assignment, assumption and release agreement among the Vendor, the Purchaser and Virginia pursuant to which (i) the Vendor assigns to the Purchaser a 75% undivided interest in all its rights, interests, duties and obligations under the Virginia Agreement including in connection with the Virginia Royalty and the Back-In-Right; and (ii) the Purchaser agrees to observe and be bound by all of the provisions of the Virginia Agreement with respect to the rights, interests and obligations assigned to or assumed by the Purchaser in the place and stead of the Vendor.

	
10.4  

	
The Parties shall have received evidence that all requisite approvals, consents and acceptances of the appropriate regulatory authorities and the Toronto Stock Exchange and the TSXV required to be made or obtained by either one of the Parties in order to complete the Closing have been made or obtained on terms satisfactory to each of the Parties, acting reasonably.

	
10.5  

	
The Purchaser shall deliver or cause to be delivered to the Vendor evidence satisfactory to the Vendor that the shareholders of the Purchaser have approved the Transaction, if such approval is required by the TSXV, corporate laws or by securities regulations.

	
10.6  

	
The Purchaser shall have raised capital through the completion of placement of its securities for gross proceeds of a minimum of $3,000,000 on such terms and conditions as may be determined by the Parties (the “Financing”), it being understood that the Purchaser shall use reasonable commercial efforts to complete the Financing.

	
10.7  

	
The Purchaser shall deliver or cause to be delivered to the Vendor by cheque, wire transfer or other form of payment acceptable to the Vendor, the Initial Cash Payment pursuant to Section 4.1(a) hereof.

	
10.8  

	
The Purchaser shall deliver or cause to be delivered to the Vendor a common share certificate representing the Initial Vendor Shares pursuant to Section 4.2(a) hereof.

	
11.  

	
Post-Closing

The Transaction shall also be subject to the following post-Closing conditions and documents, which may be waived by the Purchaser or the Vendor, where applicable, in whole or in part:

	
11.1  

	
The Purchaser shall deliver or cause to be delivered to the Vendor by cheque, wire transfer or other form of payment acceptable to the Vendor, the Additional Cash Payment pursuant to Section 4.1(b) hereof.

	
11.2  

	
The Purchaser shall deliver or cause to be delivered to the Vendor a common share certificate representing the Additional Vendor Shares pursuant to Section 4.2(b) hereof or, in lieu of the Additional Vendor Shares, the $750,000 cash payment pursuant to Section 4.2(c) hereof, by cheque, wire transfer or other form of payment acceptable to the Vendor.

 

  

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12.  

	
Default

If the Purchaser does not issue the shares or make the payments required in accordance with Section 4 hereof, then the Vendor may provide written notice to the Purchaser of its failure. If the Purchaser does not make the outstanding payment or issue that number of outstanding common shares of the Purchaser in accordance with Section 4 hereof within 90 days of such notice, then its rights and obligations under this agreement shall automatically terminate and be of no further force and effect and the Purchaser shall transfer back to the Vendor its undivided interest in the Claims, and the Purchaser shall bear all fees, costs and other expenses that may be incurred in connection therewith.

	
13.  

	
Option

	
13.1  

	
If and when the Purchaser has made all the Cash Payments and the Issuance of all Shares (or cash in lieu thereof, as permitted or required herein) in accordance with Section 4 hereof, the Vendor will grant to the Purchaser a three (3) year term option to purchase the remaining 25% interest in the Claims (the “Option”), for the period beginning on the date that is the later of (i) June 1, 2015 and (ii) the Vendor satisfying all of the purchase conditions as described herein. The Option will automatically terminate on a date that is three (3) years from the later of (i) or (ii) above. In order to exercise the Option, the Purchaser shall:

	
(a)  

	
pay to the Vendor an additional sum of $1,000,000; assuming the applicable shareholder approval has been received, issue an additional amount of the Purchaser’s common shares (the “Option Shares”) that in aggregate (Initial Vendor Shares plus Additional Vendor Shares plus Option Shares), does not represent a number of common shares greater than 19.5% of the Purchaser’s issued and outstanding common shares at the time of issuance of the Option Shares, to an aggregate maximum of 60,000,000 common shares. For clarity, the maximum Option Shares issued would be the lesser of 25,000,000 common shares or a number of shares that when added to all the previous share issuances to the Vendor as outlined above represents an aggregate number of shares equal to 19.5% of the Purchaser’s issued and outstanding shares at the time of issuance;

	
(b)  

	
or, in the event that shareholder approval is required for the issuance of the Option Shares and the Purchaser has not received such shareholder approval, the Purchaser shall pay an additional sum of $1,875,000 in lieu of the Option Shares in order to acquire the remaining 25% interest in the Claims;

	
(c)  

	
grant the Vendor a pre-emptive right to participate in any further equity financing of the Purchaser in order to allow the Vendor to maintain the Vendor’s equity position in the Purchaser’s share capital (the “Pre-Emptive Right”) at the time of the contemplated equity financing. The Pre-Emptive Right shall be exercisable by the Vendor at any time until 5:00 p.m. (Eastern Standard Time) on the date that is five business days following written notice by the Purchaser to the Vendor that it is proceeding with a proposed financing. The Pre-Emptive Right to be granted to the Vendor upon exercise of the Option shall automatically terminate on the earliest to occur of the following; (i) should the Vendor’s equity position in the Purchaser’s share capital at any time be less than 5% of the Purchaser’s issued and outstanding common shares; (ii) should the Vendor decline to participate in two consecutive equity financings of the Purchaser; or (iii) 5 years from the date of this agreement.

 

  

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13.2  

	
At any time from the date of this agreement, the Vendor or its successor will not increase, directly or indirectly, its aggregate ownership interest of the Purchaser to more than 19.5% of all issued and outstanding common shares of the Purchaser, without the prior written approval of the Purchaser.

	
13.3  

	
Notwithstanding the exercise of the Option by the Purchaser, the Vendor shall retain a 2% net smelter returns royalty (“NSR”) in the form attached hereto as Schedule “E” in respect of the Claims, of which 1% may be repurchased by the Purchaser, at any time and from time to time, in consideration for payment of $1,000,000 in cash or immediately available funds.

	
13.4  

	
If the Option is not exercised by the Purchaser within the timing outlined in 13.1, then the Parties agree to enter into a joint venture agreement consistent with industry norms for such agreements including a standard dilution clause for non-participation. The Vendor would then be entitled to a free carried interest on its 25% participating interest until the delivery by the Purchaser of a bankable feasibility study or equivalent on the Claims.

	
14.  

	
Conduct of Business

Up to the Closing Date, there shall have been no material adverse changes on the Claims, nor shall there be any change in the operations of the Vendor which would materially adversely affect the Claims and on or before the Closing Date, each of the conditions and undertakings contained in this agreement, shall have been entirely respected.

	
15.  

	
Expenses

Each Party shall bear all fees, costs and other expenses that may be incurred in connection with (i) the preparation, negotiation, execution and delivery of this agreement and any other agreements or documents required to consummate the Transaction and (ii) the preparation, completion, delivery or execution of all documents and regulatory filings related thereto.

	
16.  

	
Confidentiality

All information, records and documents obtained by the Purchaser and its authorized representatives and agents in connection with the Transaction and relating to this agreement shall be deemed to be of a confidential nature and shall be treated as such by the Purchaser until the Closing Date or for a period of one year after the date hereof in the event there is no Closing. The Purchaser hereby undertakes to keep confidential such documents, information and records, both during negotiations and thereafter, until the Closing Date, except for such documents, records or information which were already in the public domain or which are subsequently obtained by third parties through no fault or without the intervention (directly or indirectly) of the Purchaser.

 

  

- 13 -

  

 

	
17.  

	
Exclusivity

The Vendor agrees that it will not offer to, or solicit offers from, or enter into any negotiations with, any third party for the sale of the Claims, or any part thereof until the expiration of the date provided for the Closing Date as set forth above.

	
18.  

	
Indemnification

	
18.1  

	
Indemnification by the Vendor

The Vendor shall indemnify and save harmless the Purchaser, its directors, officers, shareholders, affiliates, employees and agents (the "Purchaser Indemnified Parties") from and against any and all claims, demands, proceedings, losses, damages, obligations, liabilities, deficiencies, fines, costs and expenses (including all legal and other professional fees and disbursements, interest, penalties and amounts paid in settlement) (collectively, "Losses") suffered or incurred by the Purchaser Indemnified Parties as a result of or arising directly or indirectly out of or in connection with:

	
(a)  

	
any breach by the Vendor of or any inaccuracy of any representation or warranty of the Vendor contained in this Agreement or in any agreement, certificate or other document executed and delivered by the Vendor; or

	
(b)  

	
any breach or non-performance by the Vendor of any covenant to be performed by it which is contained in this Agreement or in any agreement, certificate or other document executed and delivered by the Vendor.

	
18.2  

	
Indemnification by the Purchaser

The Purchaser shall indemnify and save harmless the Vendor, its directors, officers, shareholders, affiliates, employees and agents (the "Vendor Indemnified Parties") from and against any and all Losses suffered or incurred by the Vendor Indemnified Parties as a result of or arising directly or indirectly out of or in connection with:

 

	
(a)  

	
any breach by the Purchaser of or any inaccuracy of any representation or warranty contained in this Agreement or in any agreement, certificate or other document executed and delivered by the Purchaser; or

	
(b)  

	
any breach or non-performance by the Purchaser of any covenant to be performed by it which is contained in this Agreement or in any agreement, certificate or other document executed and delivered by the Purchaser (including the Assigned Contracts).

	
18.3 

	
The Vendor’s and the Purchaser's indemnification obligations under this agreement shall be limited to an amount equal to the dollar value, from time to time, of the consideration received pursuant to this agreement. Notwithstanding the foregoing, there will be no limit on a party’s liability for indemnification hereunder to the extent the claim arises from fraud.

 

  

- 14 -

  

	
19.  

	
General Provisions

	
19.1  

	
Assignment. This agreement shall enure to the benefit of and be binding upon the respective successors and permitted assigns of the Parties. Neither Party shall assign its rights or delegate its obligations hereunder voluntarily or by operation of law, without the prior written consent of the other Party.

	
19.2  

	
Waiver of Rights. The failure of a Party to insist on the strict performance of any provision of this agreement or to exercise any right, power or remedy upon a breach hereof shall not constitute a waiver of any provision of this agreement or limit the Party's right thereafter to enforce any provision or exercise any right.

	
19.3  

	
Amendments. No modification or amendment to this agreement shall be valid unless made in writing and duly executed by the Parties.

	
19.4  

	
Entire Agreement. This agreement, contains the entire understanding of the Parties and cancels and replaces all prior understandings between the Parties relating to the subject matter hereof, and all prior agreements.

	
19.5  

	
Arbitration. Any dispute or conflict between the parties concerning this Agreement which cannot be settled by them shall be submitted firstly to a mutually agreeable mediator who will have no authority to bind the parties and, in the event that mediation efforts are unsuccessful, to a single arbitrator pursuant to the provisions of the Arbitration Act (Ontario), or, if the parties cannot agree upon a single arbitrator, to three arbitrators, one appointed by the Vendor, one appointed by the Purchaser and a third appointed by the arbitrators appointed by the Vendor and the Purchaser. The arbitrator or arbitrators, as the case may be, may order any party to produce documents prior to the arbitration or to submit a witness to discovery. Arbitration proceedings shall take place in Toronto, Ontario at such place as the arbitrator or arbitrators shall determine.

	
19.6  

	
Severability. If any term, part or provision of this agreement is declared unenforceable, illegal, or in conflict with any laws to which this agreement is subject, such term, part or provision shall be considered severed from this agreement, the remaining portions thereof shall not be affected and this agreement shall be construed and enforced as if it did not contain that term, part or provision.

	
19.7  

	
Time. Time is of the essence of this agreement and all related documents.

	
19.8  

	
Further Assurances. Each of the Parties hereby undertakes to refrain from performing any act or entering into any transaction or negotiation which would interfere or be inconsistent with the terms of this agreement and the due completion of the Transaction.

	
19.9  

	
Currency. All monetary amounts expressed in dollars in this agreement shall be determined and payable in Canadian currency, unless otherwise expressly provided.

	
19.10  

	
Public Announcements. A Party desiring to make a disclosure, statement or press release concerning this agreement shall first consult with the other Party prior to making such disclosure, statement or press release, and the Parties shall use all reasonable efforts, acting expediently and in good faith, to agree upon a text for such statement or press release which is satisfactory to the Parties.

 

  

- 15 -

  

	
19.11  

	
Notice. Any notice or other required communications hereunder shall be given in writing and delivered by hand, registered air mail, telefax, or by overnight courier. Any such notice shall be given to each of the Parties at their following addresses:

	
  

	
TO THE VENDOR:

	
ENERGIZER RESOURCES INC.

	
  

	
141 Adelaide Street West 

Suite 520

Toronto, Ontario M5H 3L5

 

	
  

	
Attention: Richard E. Schler

                                                

	
  

	
TO THE PURCHASER: 

	
HONEY BADGER EXPLORATION INC.

	
  

	
141 Adelaide Street West 

Suite 520

Toronto, Ontario M5H 3L5

 

	
  

	
Attention: Peter Liabotis

	
  

	
or to any other addresses that any Party may at any time designate by written notice to the other Party.

	
  

	
All notices shall be effective and shall be deemed delivered (i) if by hand, or by overnight courier, on the date of delivery if delivered during normal business hours, and, if not delivered during normal business hours, on the next business day following delivery, (ii) if by electronic communication, on the next business day following receipt of the electronic communication, and (iii) if by mail, on the next business day after actual receipt.

	
19.12  

	
Counterparts. This agreement may be executed in any number of counterparts, and it shall not be necessary that the signatures of all Parties be contained on any counterpart. Each counterpart shall be deemed an original, but all counterparts together shall constitute one and the same instrument.

	
19.13  

	
Independent Legal Advice. The Parties expressly declare that they have been given sufficient time to seek such independent legal or other advice as they deem appropriate with respect to this matter and the terms of this agreement and the Parties voluntarily accept the said terms.

	
19.14  

	
Governing Law. This agreement is made under and shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.

 

[SIGNATURE PAGE FOLLOWS]

 

  

- 16 -

  

 

IN WITNESS WHEREOF, the Parties have duly executed this agreement as of the date first above written.

 

	ENERGIZER RESOURCES INC.	 	HONEY BADGER EXPLORATION INC.
	 	 	 	 	 
	 	 	 	 	 
	
By:

	
“Peter Harder”

	 	
By:

	
“J.P. Desrochers”

	
Name:

	
Peter Harder

	 	
Name:

	
J.P. Desrochers

	
Title:

	
Chairman of the Board

	 	
Title:

	
Director

 

	
By:

	
“Richard Schler”

	  	
By:

	
“Peter Liabotis”

	
Name:

	
Richard Schler

	  	
Name:

	
Peter Liabotis

	
Title:

	
Chief Executive Officer

	  	
Title:

	
Chief Financial Officer

 

 

[Signature Page – Agreement to Purchase Claims]

 

  

- 17 -

  

 

SCHEDULE “A”

 

Description of the Sagar Property

 

	
CDC 36315

	 	
CDC 1043890

	 	
CDC 1043925

	 	
CDC 1043960

	 	
CDC 1044170

	 	
CDC 1132961

	
CDC 36316

	 	
CDC 1043891

	 	
CDC 1043926

	 	
CDC 1043961

	 	
CDC 1103333

	 	
CDC 1132962

	
CDC 36317

	 	
CDC 1043892

	 	
CDC 1043927

	 	
CDC 1043962

	 	
CDC 1103334

	 	
CDC 1132963

	
CDC 36318

	 	
CDC 1043893

	 	
CDC 1043928

	 	
CDC 1043963

	 	
CDC 1103335

	 	
CDC 1132964

	
CDC 36319

	 	
CDC 1043894

	 	
CDC 1043929

	 	
CDC 1043964

	 	
CDC 1103336

	 	
CDC 1132965

	
CDC 36320

	 	
CDC 1043895

	 	
CDC 1043930

	 	
CDC 1043965

	 	
CDC 1103337

	 	
CDC 1132966

	
CDC 36321

	 	
CDC 1043896

	 	
CDC 1043931

	 	
CDC 1043966

	 	
CDC 1103338

	 	
CDC 1132967

	
CDC 36322

	 	
CDC 1043897

	 	
CDC 1043932

	 	
CDC 1043967

	 	
CDC 1103339

	 	
CDC 1132968

	
CDC 36323

	 	
CDC 1043898

	 	
CDC 1043933

	 	
CDC 1043968

	 	
CDC 1132934

	 	
CDC 1132969

	
CDC 36324

	 	
CDC 1043899

	 	
CDC 1043934

	 	
CDC 1043969

	 	
CDC 1132935

	 	
CDC 1132970

	
CDC 36325

	 	
CDC 1043900

	 	
CDC 1043935

	 	
CDC 1043970

	 	
CDC 1132936

	 	
CDC 1132971

	
CDC 36326

	 	
CDC 1043901

	 	
CDC 1043936

	 	
CDC 1043971

	 	
CDC 1132937

	 	
CDC 1132972

	
CDC 36327

	 	
CDC 1043902

	 	
CDC 1043937

	 	
CDC 1043972

	 	
CDC 1132938

	 	
CDC 1132973

	
CDC 1043868

	 	
CDC 1043903

	 	
CDC 1043938

	 	
CDC 1043973

	 	
CDC 1132939

	 	
CDC 1132974

	
CDC 1043869

	 	
CDC 1043904

	 	
CDC 1043939

	 	
CDC 1043974

	 	
CDC 1132940

	 	
CDC 1132975

	
CDC 1043870

	 	
CDC 1043905

	 	
CDC 1043940

	 	
CDC 1043975

	 	
CDC 1132941

	 	
CDC 1132976

	
CDC 1043871

	 	
CDC 1043906

	 	
CDC 1043941

	 	
CDC 1043976

	 	
CDC 1132942

	 	
CDC 1132977

	
CDC 1043872

	 	
CDC 1043907

	 	
CDC 1043942

	 	
CDC 1043977

	 	
CDC 1132943

	 	
CDC 1132978

	
CDC 1043873

	 	
CDC 1043908

	 	
CDC 1043943

	 	
CDC 1043978

	 	
CDC 1132944

	 	
CDC 1132979

	
CDC 1043874

	 	
CDC 1043909

	 	
CDC 1043944

	 	
CDC 1043979

	 	
CDC 1132945

	 	
CDC 1132980

	
CDC 1043875

	 	
CDC 1043910

	 	
CDC 1043945

	 	
CDC 1043980

	 	
CDC 1132946

	 	
CDC 2097640

	
CDC 1043876

	 	
CDC 1043911

	 	
CDC 1043946

	 	
CDC 1043981

	 	
CDC 1132947

	 	
CDC 2097641

	
CDC 1043877

	 	
CDC 1043912

	 	
CDC 1043947

	 	
CDC 1043982

	 	
CDC 1132948

	 	
CDC 2097642

	
CDC 1043878

	 	
CDC 1043913

	 	
CDC 1043948

	 	
CDC 1043983

	 	
CDC 1132949

	 	
CDC 2097643

	
CDC 1043879

	 	
CDC 1043914

	 	
CDC 1043949

	 	
CDC 1043984

	 	
CDC 1132950

	 	
CDC 2097644

	
CDC 1043880

	 	
CDC 1043915

	 	
CDC 1043950

	 	
CDC 1043985

	 	
CDC 1132951

	 	
CDC 2097645

	
CDC 1043881

	 	
CDC 1043916

	 	
CDC 1043951

	 	
CDC 1043986

	 	
CDC 1132952

	 	
CDC 2097646

	
CDC 1043882

	 	
CDC 1043917

	 	
CDC 1043952

	 	
CDC 1043987

	 	
CDC 1132953

	 	
CDC 2097647

	
CDC 1043883

	 	
CDC 1043918

	 	
CDC 1043953

	 	
CDC 1043988

	 	
CDC 1132954

	 	
CDC 2097648

	
CDC 1043884

	 	
CDC 1043919

	 	
CDC 1043954

	 	
CDC 1043989

	 	
CDC 1132955

	 	
CDC 2097649

	
CDC 1043885

	 	
CDC 1043920

	 	
CDC 1043955

	 	
CDC 1043990

	 	
CDC 1132956

	 	
CDC 2097650

	
CDC 1043886

	 	
CDC 1043921

	 	
CDC 1043956

	 	
CDC 1043991

	 	
CDC 1132957

	 	
CDC 2097651

	
CDC 1043887

	 	
CDC 1043922

	 	
CDC 1043957

	 	
CDC 1043992

	 	
CDC 1132958

	 	
CDC 2097652

	
CDC 1043888

	 	
CDC 1043923

	 	
CDC 1043958

	 	
CDC 1043993

	 	
CDC 1132959

	 	
CDC 2120537

	
CDC 1043889

	 	
CDC 1043924

	 	
CDC 1043959

	 	
CDC 1043994

	 	
CDC 1132960

	 	
CDC 2120538

 

  

- 18 -

  

 

	
CDC 2120539

	 	
CDC 2377789

	 	
CDC 2384943

	 	
CDC 2384982

	 	
CDC 2388395

	 	 
	
CDC 2120540

	 	
CDC 2377790

	 	
CDC 2384944

	 	
CDC 2384983

	 	
CDC 2388396

	 	 
	
CDC 2120541

	 	
CDC 2377791

	 	
CDC 2384945

	 	
CDC 2384984

	 	
CDC 2388397

	 	 
	
CDC 2120542

	 	
CDC 2377792

	 	
CDC 2384946

	 	
CDC 2384985

	 	
CDC 2388398

	 	 
	
CDC 2120543

	 	
CDC 2377793

	 	
CDC 2384947

	 	
CDC 2384986

	 	
CDC 2388399

	 	 
	
CDC 2120544

	 	
CDC 2377794

	 	
CDC 2384948

	 	
CDC 2384987

	 	
CDC 2389191

	 	 
	
CDC 2120545

	 	
CDC 2377795

	 	
CDC 2384949

	 	
CDC 2384988

	 	
CDC 2389192

	 	 
	
CDC 2120546

	 	
CDC 2377796

	 	
CDC 2384950

	 	
CDC 2384989

	 	
CDC 2389193

	 	 
	
CDC 2120547

	 	
CDC 2377797

	 	
CDC 2384951

	 	
CDC 2384990

	 	
CDC 2389194

	 	 
	
CDC 2120548

	 	
CDC 2377798

	 	
CDC 2384952

	 	
CDC 2384991

	 	
CDC 2389195

	 	 
	
CDC 2120549

	 	
CDC 2377799

	 	
CDC 2384953

	 	
CDC 2384992

	 	
CDC 2389196

	 	 
	
CDC 2120550

	 	
CDC 2377800

	 	
CDC 2384954

	 	
CDC 2384993

	 	 	 	 
	
CDC 2120551

	 	
CDC 2377801

	 	
CDC 2384955

	 	
CDC 2385416

	 	 	 	 
	
CDC 2120552

	 	
CDC 2377802

	 	
CDC 2384956

	 	
CDC 2385417

	 	 	 	 
	
CDC 2120553

	 	
CDC 2377803

	 	
CDC 2384957

	 	
CDC 2385418

	 	 	 	 
	
CDC 2120554

	 	
CDC 2377804

	 	
CDC 2384958

	 	
CDC 2385419

	 	 	 	 
	
CDC 2120555

	 	
CDC 2377805

	 	
CDC 2384959

	 	
CDC 2385420

	 	 	 	 
	
CDC 2120556

	 	
CDC 2377806

	 	
CDC 2384960

	 	
CDC 2385421

	 	 	 	 
	
CDC 2120557

	 	
CDC 2377807

	 	
CDC 2384961

	 	
CDC 2385422

	 	 	 	 
	
CDC 2120558

	 	
CDC 2377808

	 	
CDC 2384962

	 	
CDC 2385423

	 	 	 	 
	
CDC 2120559

	 	
CDC 2377809

	 	
CDC 2384963

	 	
CDC 2385424

	 	 	 	 
	
CDC 2120560

	 	
CDC 2377810

	 	
CDC 2384964

	 	
CDC 2385425

	 	 	 	 
	
CDC 2120561

	 	
CDC 2377811

	 	
CDC 2384965

	 	
CDC 2385426

	 	 	 	 
	
CDC 2120562

	 	
CDC 2377812

	 	
CDC 2384966

	 	
CDC 2386856

	 	 	 	 
	
CDC 2120563

	 	
CDC 2377813

	 	
CDC 2384967

	 	
CDC 2386857

	 	 	 	 
	
CDC 2120564

	 	
CDC 2377814

	 	
CDC 2384968

	 	
CDC 2386858

	 	 	 	 
	
CDC 2120565

	 	
CDC 2377815

	 	
CDC 2384969

	 	
CDC 2386859

	 	 	 	 
	
CDC 2120566

	 	
CDC 2377816

	 	
CDC 2384970

	 	
CDC 2386860

	 	 	 	 
	
CDC 2120567

	 	
CDC 2384932

	 	
CDC 2384971

	 	
CDC 2386861

	 	 	 	 
	
CDC 2120568

	 	
CDC 2384933

	 	
CDC 2384972

	 	
CDC 2388385

	 	 	 	 
	
CDC 2120569

	 	
CDC 2384934

	 	
CDC 2384973

	 	
CDC 2388386

	 	 	 	 
	
CDC 2120571

	 	
CDC 2384935

	 	
CDC 2384974

	 	
CDC 2388387

	 	 	 	 
	
CDC 2120572

	 	
CDC 2384936

	 	
CDC 2384975

	 	
CDC 2388388

	 	 	 	 
	
CDC 2120573

	 	
CDC 2384937

	 	
CDC 2384976

	 	
CDC 2388389

	 	 	 	 
	
CDC 2120574

	 	
CDC 2384938

	 	
CDC 2384977

	 	
CDC 2388390

	 	 	 	 
	
CDC 2120575

	 	
CDC 2384939

	 	
CDC 2384978

	 	
CDC 2388391

	 	 	 	 
	
CDC 2120576

	 	
CDC 2384940

	 	
CDC 2384979

	 	
CDC 2388392

	 	 	 	 
	
CDC 2120577

	 	
CDC 2384941

	 	
CDC 2384980

	 	
CDC 2388393

	 	 	 	 
	
CDC 2377788

	 	
CDC 2384942

	 	
CDC 2384981

	 	
CDC 2388394

	 	 	 	 

 

  

- 19 -

  

 

SCHEDULE “B”

Description of the Claims that are subject to the Virginia Royalty

 

	
CDC 1043868

	 	
CDC 1043903

	 	
CDC 1043938

	 	
CDC 1043973

	 	
CDC 1132939

	 	
CDC 1132974

	
CDC 1043869

	 	
CDC 1043904

	 	
CDC 1043939

	 	
CDC 1043974

	 	
CDC 1132940

	 	
CDC 1132975

	
CDC 1043870

	 	
CDC 1043905

	 	
CDC 1043940

	 	
CDC 1043975

	 	
CDC 1132941

	 	
CDC 1132976

	
CDC 1043871

	 	
CDC 1043906

	 	
CDC 1043941

	 	
CDC 1043976

	 	
CDC 1132942

	 	
CDC 1132977

	
CDC 1043872

	 	
CDC 1043907

	 	
CDC 1043942

	 	
CDC 1043977

	 	
CDC 1132943

	 	
CDC 1132978

	
CDC 1043873

	 	
CDC 1043908

	 	
CDC 1043943

	 	
CDC 1043978

	 	
CDC 1132944

	 	
CDC 1132979

	
CDC 1043874

	 	
CDC 1043909

	 	
CDC 1043944

	 	
CDC 1043979

	 	
CDC 1132945

	 	
CDC 1132980

	
CDC 1043875

	 	
CDC 1043910

	 	
CDC 1043945

	 	
CDC 1043980

	 	
CDC 1132946

	 	 
	
CDC 1043876

	 	
CDC 1043911

	 	
CDC 1043946

	 	
CDC 1043981

	 	
CDC 1132947

	 	 
	
CDC 1043877

	 	
CDC 1043912

	 	
CDC 1043947

	 	
CDC 1043982

	 	
CDC 1132948

	 	 
	
CDC 1043878

	 	
CDC 1043913

	 	
CDC 1043948

	 	
CDC 1043983

	 	
CDC 1132949

	 	 
	
CDC 1043879

	 	
CDC 1043914

	 	
CDC 1043949

	 	
CDC 1043984

	 	
CDC 1132950

	 	 
	
CDC 1043880

	 	
CDC 1043915

	 	
CDC 1043950

	 	
CDC 1043985

	 	
CDC 1132951

	 	 
	
CDC 1043881

	 	
CDC 1043916

	 	
CDC 1043951

	 	
CDC 1043986

	 	
CDC 1132952

	 	 
	
CDC 1043882

	 	
CDC 1043917

	 	
CDC 1043952

	 	
CDC 1043987

	 	
CDC 1132953

	 	 
	
CDC 1043883

	 	
CDC 1043918

	 	
CDC 1043953

	 	
CDC 1043988

	 	
CDC 1132954

	 	 
	
CDC 1043884

	 	
CDC 1043919

	 	
CDC 1043954

	 	
CDC 1043989

	 	
CDC 1132955

	 	 
	
CDC 1043885

	 	
CDC 1043920

	 	
CDC 1043955

	 	
CDC 1043990

	 	
CDC 1132956

	 	 
	
CDC 1043886

	 	
CDC 1043921

	 	
CDC 1043956

	 	
CDC 1043991

	 	
CDC 1132957

	 	 
	
CDC 1043887

	 	
CDC 1043922

	 	
CDC 1043957

	 	
CDC 1043992

	 	
CDC 1132958

	 	 
	
CDC 1043888

	 	
CDC 1043923

	 	
CDC 1043958

	 	
CDC 1043993

	 	
CDC 1132959

	 	 
	
CDC 1043889

	 	
CDC 1043924

	 	
CDC 1043959

	 	
CDC 1043994

	 	
CDC 1132960

	 	 
	
CDC 1043890

	 	
CDC 1043925

	 	
CDC 1043960

	 	
CDC 1044170

	 	
CDC 1132961

	 	 
	
CDC 1043891

	 	
CDC 1043926

	 	
CDC 1043961

	 	
CDC 1103333

	 	
CDC 1132962

	 	 
	
CDC 1043892

	 	
CDC 1043927

	 	
CDC 1043962

	 	
CDC 1103334

	 	
CDC 1132963

	 	 
	
CDC 1043893

	 	
CDC 1043928

	 	
CDC 1043963

	 	
CDC 1103335

	 	
CDC 1132964

	 	 
	
CDC 1043894

	 	
CDC 1043929

	 	
CDC 1043964

	 	
CDC 1103336

	 	
CDC 1132965

	 	 
	
CDC 1043895

	 	
CDC 1043930

	 	
CDC 1043965

	 	
CDC 1103337

	 	
CDC 1132966

	 	 
	
CDC 1043896

	 	
CDC 1043931

	 	
CDC 1043966

	 	
CDC 1103338

	 	
CDC 1132967

	 	 
	
CDC 1043897

	 	
CDC 1043932

	 	
CDC 1043967

	 	
CDC 1103339

	 	
CDC 1132968

	 	 
	
CDC 1043898

	 	
CDC 1043933

	 	
CDC 1043968

	 	
CDC 1132934

	 	
CDC 1132969

	 	 
	
CDC 1043899

	 	
CDC 1043934

	 	
CDC 1043969

	 	
CDC 1132935

	 	
CDC 1132970

	 	 
	
CDC 1043900

	 	
CDC 1043935

	 	
CDC 1043970

	 	
CDC 1132936

	 	
CDC 1132971

	 	 
	
CDC 1043901

	 	
CDC 1043936

	 	
CDC 1043971

	 	
CDC 1132937

	 	
CDC 1132972

	 	 
	
CDC 1043902

	 	
CDC 1043937

	 	
CDC 1043972

	 	
CDC 1132938

	 	
CDC 1132973

	 	 

 

  

- 20 -

  

 

SCHEDULE “C”

 

Description of the Claims that are subject to the First Royalty

 

	
CDC 1043868

	  	
CDC 1043903

	  	
CDC 1043938

	  	
CDC 1043973

	  	
CDC 1132946

	
CDC 1043869

	  	
CDC 1043904

	  	
CDC 1043939

	  	
CDC 1043974

	  	
CDC 1132947

	
CDC 1043870

	  	
CDC 1043905

	  	
CDC 1043940

	  	
CDC 1043975

	  	
CDC 1132948

	
CDC 1043871

	  	
CDC 1043906

	  	
CDC 1043941

	  	
CDC 1043976

	  	
CDC 1132949

	
CDC 1043872

	  	
CDC 1043907

	  	
CDC 1043942

	  	
CDC 1043977

	  	
CDC 1132950

	
CDC 1043873

	  	
CDC 1043908

	  	
CDC 1043943

	  	
CDC 1043978

	  	
CDC 1132951

	
CDC 1043874

	  	
CDC 1043909

	  	
CDC 1043944

	  	
CDC 1043979

	  	
CDC 1132952

	
CDC 1043875

	  	
CDC 1043910

	  	
CDC 1043945

	  	
CDC 1043980

	  	
CDC 1132953

	
CDC 1043876

	  	
CDC 1043911

	  	
CDC 1043946

	  	
CDC 1043981

	  	
CDC 1132954

	
CDC 1043877

	  	
CDC 1043912

	  	
CDC 1043947

	  	
CDC 1043982

	  	
CDC 1132955

	
CDC 1043878

	  	
CDC 1043913

	  	
CDC 1043948

	  	
CDC 1043983

	  	
CDC 1132956

	
CDC 1043879

	  	
CDC 1043914

	  	
CDC 1043949

	  	
CDC 1043984

	  	
CDC 1132957

	
CDC 1043880

	  	
CDC 1043915

	  	
CDC 1043950

	  	
CDC 1043985

	  	
CDC 1132958

	
CDC 1043881

	  	
CDC 1043916

	  	
CDC 1043951

	  	
CDC 1043986

	  	
CDC 1132959

	
CDC 1043882

	  	
CDC 1043917

	  	
CDC 1043952

	  	
CDC 1043987

	  	
CDC 1132960

	
CDC 1043883

	  	
CDC 1043918

	  	
CDC 1043953

	  	
CDC 1043988

	  	
CDC 1132961

	
CDC 1043884

	  	
CDC 1043919

	  	
CDC 1043954

	  	
CDC 1043989

	  	
CDC 1132962

	
CDC 1043885

	  	
CDC 1043920

	  	
CDC 1043955

	  	
CDC 1043990

	  	
CDC 1132963

	
CDC 1043886

	  	
CDC 1043921

	  	
CDC 1043956

	  	
CDC 1043991

	  	
CDC 1132964

	
CDC 1043887

	  	
CDC 1043922

	  	
CDC 1043957

	  	
CDC 1043992

	  	
CDC 1132965

	
CDC 1043888

	  	
CDC 1043923

	  	
CDC 1043958

	  	
CDC 1043993

	  	
CDC 1132966

	
CDC 1043889

	  	
CDC 1043924

	  	
CDC 1043959

	  	
CDC 1043994

	  	
CDC 1132967

	
CDC 1043890

	  	
CDC 1043925

	  	
CDC 1043960

	  	
CDC 1044170

	  	
CDC 1132968

	
CDC 1043891

	  	
CDC 1043926

	  	
CDC 1043961

	  	
CDC 1132934

	  	
CDC 1132969

	
CDC 1043892

	  	
CDC 1043927

	  	
CDC 1043962

	  	
CDC 1132935

	  	
CDC 1132970

	
CDC 1043893

	  	
CDC 1043928

	  	
CDC 1043963

	  	
CDC 1132936

	  	
CDC 1132971

	
CDC 1043894

	  	
CDC 1043929

	  	
CDC 1043964

	  	
CDC 1132937

	  	
CDC 1132972

	
CDC 1043895

	  	
CDC 1043930

	  	
CDC 1043965

	  	
CDC 1132938

	  	
CDC 1132973

	
CDC 1043896

	  	
CDC 1043931

	  	
CDC 1043966

	  	
CDC 1132939

	  	
CDC 1132974

	
CDC 1043897

	  	
CDC 1043932

	  	
CDC 1043967

	  	
CDC 1132940

	  	
CDC 1132975

	
CDC 1043898

	  	
CDC 1043933

	  	
CDC 1043968

	  	
CDC 1132941

	  	
CDC 1132976

	
CDC 1043899

	  	
CDC 1043934

	  	
CDC 1043969

	  	
CDC 1132942

	  	
CDC 1132977

	
CDC 1043900

	  	
CDC 1043935

	  	
CDC 1043970

	  	
CDC 1132943

	  	
CDC 1132978

	
CDC 1043901

	  	
CDC 1043936

	  	
CDC 1043971

	  	
CDC 1132944

	  	
CDC 1132979

	
CDC 1043902

	  	
CDC 1043937

	  	
CDC 1043972

	  	
CDC 1132945

	  	
CDC 1132980

 

  

- 21 -

  

 

SCHEDULE “D”

 

Description of the Claims that are subject to the Second Royalty

 

	
CDC 1103333

	
CDC 1103334

	
CDC 1103335

 

  

- 22 -

  

 

SCHEDULE “E”

Net Smelter Returns Royalty

 

Net Smelter Return Royalty (“NSRR”) shall mean any and all amounts received by the Purchaser from a third party, from time to time, for the product extracted from ore mined from the Claims, deducting therefrom:

	
a)  

	
If the product is treated by an arm’s length party at a smelter, refinery or mint, all expenses relating thereto, including all costs and charges for the treatment, tolling, smelting, refining or minting of such product and all costs associated therewith such as transporting, insuring, handling, weighing, sampling, assaying and marketing, as well as all penalties, representation charges, referee’s fees and expenses, import taxes and export taxes, that is to say the net amount received by the Purchaser from the smelter, refinery or mint, as the case may be, less all costs associated therewith or;

	
b)  

	
If the product is treated at a smelter, refinery or mint owned, operated or controlled by the Purchaser or an affiliate of it, all costs, charges and expenses relating thereto or associated therewith, excluding any capital costs incurred in the mining and milling of the product by including the expenses in (a) above, such charges by similar smelters, refineries or mints as the case may be, in arm’s length transactions for the treatment of like quantities and quality of product.

Any dispute or difference between the parties with respect to the determination of Net Smelter Returns shall, if objections made by the Vendor with the timeframe stipulated herein be submitted to arbitration in accordance with the Arbitration Act of the Province of Ontario.

The Net Smelter Return Royalty shall not be calculated or payable until the first anniversary of the commencement of commercial production. The Net Smelter Return Royalty shall become payable on all production subsequent to that date. Calculations shall be made at the end of each subsequent calendar quarter in which ores or concentrates from the Claims are sold or otherwise deemed disposed of and payment to the Vendor shall be made within 30 days after the end of each quarter.

The Net Smelter Return Royalty holders, on the 30-day prior notice to the Purchaser may effect that the payment of their proportionate share of the Net Smelter Return Royalty shall be satisfied by the delivery In Kind to or to the order of the Vendor of their said proportionate share of the metals and/or minerals received by the Net Smelter Return Royalty holders of the smelting, refining and other treatment of the ore extracted from the Claims. At the time of such delivery, the Purchaser shall have deducted their said proportionate share of all charges and costs noted in this paragraph which are deducted in the course of calculating the Net Smelter Return Royalty herein.

 

 

- 23 -Unassociated Document

EXHIBIT 10.8

 

 

 

 

Sale & Purchase Agreement

 

Energizer Resources Inc.

Purchaser

 

and

 

Malagasy Minerals Limited

Vendor

 

and

 

Madagascar-ERG Joint Venture (Mauritius) Ltd

Company

 

 

 

 

	
Jackson McDonald

140 St Georges Terrace

Perth WA 6000

	
t:

f:

w:

	
+61 8 9426 6611 

+61 8 9481 8649

www.jacmac.com.au

	
Contact: 

Reference: 

	
Will Moncrieff

7141864

  

 

  

 

	 	 	
Sale & Purchase Agreement

	 	 	 

 

Table of contents

 

	
1.

	Definitions and interpretation	
2

	 	
1.1

	
Definitions

	
2

	 	
1.2

	
Interpretation

	
8

	
2.

	Sale and purchase	
9

	 	
2.1

	
Agreement to sell and purchase

	
9

	 	
2.2

	
Consideration

	
9

	 	
2.3

	
Payment of Purchase Price

	
9

	 	
2.4

	
Escrow

	
10

	
3.

	Conditions to Completion	
10

	 	
3.1

	
Conditions precedent

	
10

	 	
3.2

	
Best endeavours

	
10

	 	
3.3

	
Waiver of Conditions precedent

	
10

	 	
3.4

	
Non-satisfaction of Conditions

	
11

	
4.

	Completion	
11

	 	
4.1

	
Time and place of Completion

	
11

	 	
4.2

	
Obligations of Vendor at Completion

	
11

	 	
4.3

	
Meeting of directors of the Company

	
12

	 	
4.4

	
Obligations of Purchaser at Completion

	
12

	 	
4.5

	
Completion simultaneous

	
12

	 	
4.6

	
Title, property and risk

	
13

	 	
4.7

	
Termination of the Joint Venture Agreement and release

	
13

	
5.

	Pre-Completion conduct	
13

	 	
5.1

	
Conduct pending Completion

	
13

	 	
5.2

	
Vendor’s assistance prior to Completion

	
14

	
6.

	Period after Completion	
14

	 	
6.1

	
Mineral Rights Agreement

	
14

	 	
6.2

	
Production Payments

	
14

	 	
6.3

	
Escrow

	
15

	 	
6.4

	
Royalty

	
15

	
7.

	Representations and warranties	
15

	 	
7.1

	
Representations and warranties by Purchaser

	
15

	 	
7.2

	
Representations and warranties by the Vendor

	
16

	 	
7.3

	
Disclaimer of liability by the Vendor

	
17

 

	
 

	
Confidential and Legally Privileged

	
 page i

 

  

 

  

 

	 	 	
Sale & Purchase Agreement

	 	 	 

 

	
8.

	Termination	
18

	 	
8.1

	
Termination

	
18

	 	
8.2

	
Consequences of Termination before Completion

	
18

	
9.

	Confidentiality and public announcements	
18

	 	
9.1

	
Confidentiality

	
18

	 	
9.2

	
Conditions

	
20

	 	
9.3

	
Notice to other Parties

	
21

	 	
9.4

	
Indemnities

	
21

	 	
9.5

	
Survival of confidentiality obligations

	
21

	 	
9.6

	
Use of Mining Information in respect to Other Mineral Rights

	
21

	 	
9.7

	
Notices

	
21

	
10.

	Miscellaneous	
23

	 	
10.1

	
Governing law

	
23

	 	
10.2

	
Amendments

	
23

	 	
10.3

	
Primacy of this Agreement

	
23

	 	
10.4

	
Waiver

	
23

	 	
10.5

	
Consents

	
23

	 	
10.6

	
Counterparts

	
23

	 	
10.7

	
No representation or reliance

	
23

	 	
10.8

	
Expenses

	
24

	 	
10.9

	
Entire agreement

	
24

	 	
10.10

	
Indemnities

	
24

	 	
10.11

	
Severance and enforceability

	
24

	 	
10.12

	
No merger

	
25

	 	
10.13

	
Power of attorney

	
25

	 	
10.14

	
Taxes

	
25

	Schedule 1 – Industrial Minerals	
26

	Schedule 2 – Net Smelter Return Royalty	
27

	Annexure A – Mineral Rights Agreement	
33

 

	
 

	
Confidential and Legally Privileged

	
 page ii

 

  

 

  

 

	 	 	
Sale & Purchase Agreement

	 	 	 

 

Sale & Purchase Agreement

 

	Date 	
2014

 

Parties

 

	
Energizer Resources Inc.

Purchaser

	
141 Adelaide Street, West Suite 520, Toronto, Ontario, Canada

	 	 
	
Malagasy Minerals Limited

ACN 121 700 105

Vendor

	
15, Lovegrove Close, Mount Claremont Western Australia

	 	 
	
Madagascar-ERG Joint Venture (Mauritius) Ltd

Company Number: 106367

Company

	
6th Floor, Newton Tower, Sir William Newton Street, Port Louis, Republic of Mauritius

 

Recitals

 

	
A.  

	
Pursuant to a Joint Venture Agreement dated 15 December 2011:

 

	
(i)  

	
the Purchaser acquired a 75% interest in the JV Industrial Mineral Rights; and

 

	
(ii)  

	
the Company was established as the joint venture company for the Joint Venture and the holder of the JV Industrial Mineral Rights and the Purchaser and the Vendor own three shares and one share respectively in the Company.

 

	
B.  

	
By the Memorandum of Understanding, the Vendor has agreed, inter alia, to sell to the Purchaser and the Purchaser has agreed to buy from the Vendor

 

	
(i)  

	
the Vendor Share in the Company; and

 

	
(ii)  

	
the Additional Industrial Mineral Rights.

 

	
C.  

	
The MGY Subsidiaries, which are subsidiaries of the Vendor, are the sole registered and beneficial holders of the Additional Exploration Permits.

 

	
D.  

	
The Vendor has agreed, inter alia, to procure the MGY Subsidiariesto transfer the Additional Industrial Mineral Rights to the Company in the manner set out in the Mineral Rights Agreement.

 

	
E.  

	
The Parties have agreed to formalise the sale and purchase proposed in the Memorandum of Understanding on the terms and conditions contained in this Agreement, together with the Mineral Rights Agreement and the Green Giant JVA.

 

	
 

 

	
Confidential and Legally Privileged

	
 page 1

 

  

  

  

 

	 	 	
Sale & Purchase Agreement

	 	 	 

 

Agreement

 

	
1.  

	
Definitions and interpretation

 

	
1.1  

	
Definitions

 

In this Agreement, unless the context requires otherwise, the following expressions will have the following meanings:

 

	 	
Additional Exploration Permits has the meaning given to that term in the Mineral Rights Agreement.

 

	 	
Additional Exploitation Permits has the meaning given to that term in the Mineral Rights Agreement.

 

	 	
Additional Industrial Mineral Rights has the meaning given to that term in the Mineral Rights Agreement.

 

	 	
Additional Permit Holders has the meaning given to that term in the Mineral Rights Agreement.

 

	 	
Additional Permits has the meaning given to that term in the Mineral Rights Agreement.

 

	 	
Agreement means this Sale and Purchase Agreement, including any Schedules or annexures, as amended from time to time.

 

	 	
ASX means the ASX Limited (ACN 008 624 691) trading as the Australian Securities Exchange.

 

	 	
Authority means any government department, local government council, government or statutory authority or any other party under a Law or the listing rules of a securities exchange or stock exchange, which has a right to impose a requirement or whose consent is required with respect to any matter or thing arising under, or affected by, this Agreement.

 

	 	
Business Day means a day other than a Saturday or Sunday on or public holiday in Ontario, Canada or Perth, Western Australia.

 

	 	
Cash Consideration means C$400,000.

 

	 	
Claim means in relation to a Party, any demand, claim, action or proceeding made or brought by or against the Party, howsoever arising and whether present, unascertained, immediate, future or contingent.

 

	 	
Completion means completion of the sale and purchase of the Vendor Share and the Additional Industrial Mineral Rights under this Agreement.

 

	
 

	
Confidential and Legally Privileged

	
 page 2

 

  

 

  

 

	 	 	
Sale & Purchase Agreement

	 	 	 

 

Completion Date means:

 

	
(a)  

	
the date that is the fourteen (14) days afterthe satisfaction or waiver of the Conditions; or

 

	
(b)  

	
any other date which is agreed in writing by the Parties.

 

	 	
Conditions means the conditions specified clause 3.1 and Condition means any one of them.

 

	 	
Conditions Satisfaction Date means dates for satisfaction of the Conditions, as specified in clause 3.4.

 

	 	
Confidential Information means all information, documents, maps, reports, records, studies, forms, specifications, processes, statements, formulae, trade secrets, drawings and other data (and copies and extracts made of or from any such data) in written or electronic form and whether reduced to writing or not, and at any time in the possession or under the control of or readily accessible to any Party, including the Mining Information, concerning:

 

	
(a)  

	
the existence or contents of this Agreement;

 

	
(b)  

	
Joint Venture Property;

 

	
(c)  

	
the operations and transactions of a Party;

 

	
(d)  

	
the organisation, finance, customers, markets, suppliers, intellectual property and know-how of a Party or a Related Body Corporate of a Party; and

 

	
(e)  

	
any other information obtained in performance of this Agreement,

 

	 	
that is not in the public domain (except by failure of a Party to perform and observe its covenants and obligations under this Agreement) and that has been obtained by a Party during the negotiations preceding the making of this Agreement or the Memorandum of Understanding by or through or by being a Party to this Agreement or the Memorandum of Understanding.

 

Development Area has the meaning given to it in the Mineral Rights Agreement.

 

	 	
Dispose means in relation to a person and any property, means to sell, transfer, assign, surrender, create an Encumbrance over, declare oneself a trustee of or part with the benefit or otherwise dispose of that property (or any interest in it or any party of it) whether done before, on or after the person obtains any interest in the property, including without limitation in relation to a share, to enter into a transaction in relation to the share (or any interest in the share) which results in a person other than the registered holder of the share:

 

	
(a)  

	
acquiring or having an equitable or beneficial interest in the share, including, without limitation, an equitable interest arising under a declaration of trust, an agreement for sale and purchase or an option agreement or an agreement creating a charge or other Encumbrance over the share; or

 

	
(b)  

	
acquiring or having any right to receive (directly or indirectly) any dividends or other distribution or proceeds of disposal payable in respect of the share or any right to receive an amount calculated by reference to any of them; or

 

	
(c)  

	
acquiring or having any rights of pre-emption, first refusal or other direct or indirect control over the disposal of the share; or

 

	
 

	
Confidential and Legally Privileged

	
 page 3

 

  

 

  

 

	 	 	
Sale & Purchase Agreement

	 	 	 

 

	
(d)  

	
acquiring or having any rights of (direct or indirect) control over the exercise of any voting rights or rights to appoint Directors attaching to the share; or

 

	
(e)  

	
otherwise acquiring or having equitable rights against the registered holder of the share (or against a person who directly or indirectly controls the affairs of the registered holder of the shares) which have the effect of placing the other person in substantially the same position as if the person had acquired a legal or equitable interest in the share itself,

 

but excludes:

 

	
(f)  

	
a transaction expressly permitted by this Agreement; or

 

	
(g)  

	
a transaction conditional on each Party consenting to it.

 

	 	
Encumbrances means any mortgage, bill of sale, lien, charge, pledge, writ, warrant, production royalty, caveat (and all claims stated in the caveat), assignment by way of security, security interest, title retention, preferential right or trust arrangement, Claim, covenant, profit a pendre, easement, or any other security arrangement or other right or interest of any third party and includes any other arrangement having the same effect.

 

	 	
Energex means Energex SARL, a company incorporated under the laws of Madagascar and a wholly owned subsidiary of the Vendor

 

	 	
Environmental Law means any law concerning environmental matters which regulates or affects the Additional Exploration Permits, and includes, but is not limited to, laws concerning land use, development, pollution, waste disposal, toxic and hazardous substances, conservation of natural or cultural resources and resource allocation including any law relating to exploration for or development of any natural resource

 

	 	
Environmental Liabilities means any obligation, expense, penalty or fine under Environmental Law, including rehabilitation and rectification work of whatsoever nature or kind.

 

	 	
ERG Project Permits has the meaning given to that term in the Mineral Rights Agreement.

 

	 	
ERG Project Area has the meaning given to that term in the Mineral Rights Agreement.

 

	 	
Good Standing means in relation to anAdditional Exploration Permit, that:

 

	
(a)  

	
such permit is and remains in full force and effect;and

 

	
(b)  

	
such permit:

 

	
(i)  

	
is and remains not liable to cancellation, forfeiture or non-renewal; or

 

	
(ii)  

	
is liable to cancellation, forfeiture or non-renewal where such liabilityis:

 

	
 

 

	
Confidential and Legally Privileged

	
 page 4

 

  

 

  

 

	 	 	
Sale & Purchase Agreement

	 	 	 

 

	
(A)  

	
not a result of the default of the holder of the permit or its subsidiaries;

 

	
(B)  

	
solely a result of a compulsory surrender under the Mining Code; or

 

	
(C)  

	
solely a result of a Political Event.

 

	 	
Governmental Agency means any government or any governmental, semi-governmental, administrative, fiscal or judicial body, responsible minister, department, office, commission, delegate, authority, instrumentality, tribunal, board, agency, entity or organ of government, whether federal, state, territorial or local, statutory or otherwise, in respect of a sovereign state and includes any of them purporting to exercise any jurisdiction or power outside that sovereign state.

 

	 	
Green Giant JVA means a document entitled “Green Giant Project Joint Venture Agreement” between Energizer and Malagasy, to be entered into on terms acceptable to each of the Parties.

 

	 	
Industrial Minerals means the minerals listed in Schedule 1of this Agreement.

 

Insolvency Event means any one or more of the following:

 

	
(a)  

	
a Party being or stating that it is unable to pay its debts when they fall due;

 

	
(b)  

	
any valid attempt to enforce any Encumbrance over a Party’s assets;

 

	
(c)  

	
an administrator being appointed or any step taken to appoint an administrator in respect of a Party;

 

	
(d)  

	
a receiver, receiver and manager, official manager, trustee administrator, liquidator or other controller or similar officer being appointed over the assets of a Party; or

 

	
(e)  

	
an event having a substantially similar effect to clauses (a) to (d) occurring in connection with a Party under the law of any jurisdiction.

 

	 	
Joint Venture means the joint venture formed between Energizer and Malagasy pursuant to the Joint Venture Agreement.

 

	 	
Joint Venture Agreement means the document entitled “Joint Venture Agreement” and dated 15 December 2011 between the Vendor, the Purchaser and the Company.

 

	 	
Joint Venture Property means all assets of the Company, including (without limitation) the following:

 

	
(a)  

	
the JV Industrial Mineral Rights;

 

	
(b)  

	
MadagascarCo’srights under any JV Sublease;

 

	
(c)  

	
any JV Permits held by the Company or MadagascarCo;

 

	
 

	
Confidential and Legally Privileged

	
 page 5

 

  

 

  

 

	 	 	
Sale & Purchase Agreement

	 	 	 

 

	
(d)  

	
all plant and equipment held by the Company, MadagascarCo, Malagasy or Energizer on behalf of the Joint Venture;

 

	
(e)  

	
all debts owed to the Company;

 

	
(f)  

	
any unearned income of the Company;

 

	
(g)  

	
the Mining Information; and

 

	
(h)  

	
all rights and benefits of the Company under all agreements, leases, contracts and arrangements to which the Company is a party in whole or in part, as at Completion.

 

	 	
JV Industrial Mineral Rights has the meaning given to that term in the Mineral Rights Agreement.

 

	 	
JV Permits has the meaning given to that term in the Mineral Rights Agreement.

 

	 	
JV Sublease has the meaning given to that term in the Mineral Rights Agreement.

 

Law means any statute, ordinance, code, regulation, law, by-law, local law, plan, planning scheme, local structure plan, official directive, order, instrument, undertaking, judicial, administrative or regulatory decree, judgement, ruling or order.

 

	 	
Loss means any loss, damage, liability, expense or cost but does not include Consequential Loss.

 

	 	
Madagascar Co has the meaning given to that term in the Mineral Rights Agreement.

 

	 	
Material Adverse Effect means an unfavourable or adverse event, occurrence or circumstance, or the result thereof, that causes the actual value of the ERG Project Permits orERG Project Area to be materially impaired or devalued but does not include anything that occurs as a result of a Political Event.

 

	 	
Mazoto means Mazoto Minerals SARL, a company incorporated under the laws of Madagascar and a wholly owned subsidiary of the Vendor.

 

	 	
MDA means Mada-Aust SARL, a company incorporated under the laws of Madagascar and a wholly owned subsidiary of the Vendor.

 

	 	
Memorandum of Understanding has the meaning given to that term in the Mineral Rights Agreement.

 

	 	
MGY Subsidiaries has the meaning given to that term in the Mineral Rights Agreement.

 

	 	
Mineral Rights Agreement means the document entitled “ERG Project Mineral Rights Agreement” in the form set out in Annexure A, to be entered into on or about the date of this Agreement.

 

Mining Code has the meaning given to that term in the Mineral Rights Agreement.

 

	
 

	
Confidential and Legally Privileged

	
 page 6

 

  

 

  

 

	 	 	
Sale & Purchase Agreement

	 	 	 

 

	 	
Mining Information means all technical information including (without limitation) geological, geochemical and geophysical reports, surveys, mosaics, aerial photographs, samples, drill cores, drill logs, drill pulp, assay results, maps and plans relating to the Industrial Minerals in the ERG Project Area, whether in physical, written or electronic form.

 

	 	
Party means a party to this Agreement and Parties means the parties to this Agreement.

 

	 	
Political Event means any act, event or cause which is beyond the reasonable control of the Party concerned (other than lack of or inability to use funds) resulting from the action or inaction of any Governmental Agency including expropriation, restraint, prohibition, intervention, requisition, requirement, direction or embargo by legislation, regulation or other legally enforceable order.

 

Production Payments are the payments described in clause 6.2.

 

Purchase Price means:

 

	
(a)  

	
the Cash Consideration;

 

	
(b)  

	
the Share Consideration;

 

	
(c)  

	
the right to the Production Payments; and

 

	
(d)  

	
grant of the Royalty.

 

Related Bodies Corporate means in relation to a Party, a corporation that is:

 

	
(a)  

	
a holding company of the Party;

 

	
(b)  

	
a subsidiary of the Party; or

 

	
(c)  

	
a subsidiary of a holding company of the Party.

 

Related Entity has the same meaning that it has in the Corporations Act.

 

	 	
Restriction Agreement means an agreement in a form acceptable to the Purchaser and the Vendor (acting reasonably) or in such form as is required by the relevant Authorities, whereby the Vendor agrees that the Share Consideration will be restricted from trading in accordance with the requirements of clause 2.4 or 6.3 (as applicable).

 

Royalty has the meaning in clause 6.4.

 

Share means a fully paid common share in the Company.

 

Share Consideration means:

 

	
(a)  

	
2,500,000 ordinary shares in the Purchaser; and

 

	
(b)  

	
3,500,000 warrants to subscribe for ordinary shares in the Purchaser, exercisable at a price equal to the volume weighted average price of the Purchaser’s ordinary shares traded on TSX during the five (5) days prior to the date of this Agreement and expiring on the date five (5) years from the date of this Agreement.

 

	
 

	
Confidential and Legally Privileged

	
 page 7

 

  

 

  

 

	 	 	
Sale & Purchase Agreement

	 	 	 

 

TSX means the Toronto Stock Exchange.

 

	 	
Vendor Share means the Share held by the Vendor, being the only share held by the Vendor in the Company.

 

	
1.2  

	
Interpretation

 

	
(a)  

	
headings are for convenience; and

 

unless the context indicates otherwise:

 

	
(b)  

	
an obligation or a liability assumed by, or a right conferred on, 2 or more persons binds or benefits them jointly and severally;

 

	
(c)  

	
a word or phrase in the singular number includes the plural, a word or phrase in the plural number includes the singular, and a word indicating a gender includes every other gender;

 

	
(d)  

	
if a word or phrase is given a defined meaning, any other part of speech or grammatical form of that word or phrase has a corresponding meaning;

 

	
(e)  

	
a reference to:

 

	
(i)  

	
a party, clause, schedule, exhibit, attachment or annexure is a reference to a party, clause, schedule, exhibit, attachment or annexure to or of this Agreement;

 

	
(ii)  

	
a party includes that party’s executors, administrators, successors, permitted assigns, including persons taking by way of novation and, in the case of a trustee, includes a substituted or an additional trustee;

 

	
(iii)  

	
an agreement includes any undertaking, deed, agreement and legally enforceable arrangement whether in writing or not, and is to that agreement as varied, novated, ratified or replaced from time to time;

 

	
(iv)  

	
a document includes an agreement in writing and any deed, certificate, notice, instrument or document of any kind;

 

	
(v)  

	
a document in writing includes a document recorded by any electronic, magnetic, photographic or other medium by which information may be stored or reproduced;

 

	
(vi)  

	
a document (including this Agreement) includes a reference to all schedules, exhibits, attachments and annexures to it, and is to that document as varied, novated, ratified or replaced from time to time;

 

	
(vii)  

	
legislation or to a provision of legislation includes any consolidation, amendment, re-enactment, substitute or replacement of or for it, and refers also to any regulation or statutory instrument issued or delegated legislation made under it;

 

	
(viii)  

	
a person includes an individual, the estate of an individual, a corporation, an authority, an unincorporated body, an association or joint venture (whether incorporated or unincorporated), a partnership and a trust;

 

	
 

	
Confidential and Legally Privileged

	
 page 8

 

  

 

  

 

	 	 	
Sale & Purchase Agreement

	 	 	 

 

	
(ix)  

	
a right includes a power, remedy, authority, discretion or benefit;

 

	
(x)  

	
conduct includes an omission, statement or undertaking, whether in writing or not;

 

	
(xi)  

	
an agreement, representation or warranty in favour of two or more persons is for the benefit of them jointly and severally; and

 

	
(xii)  

	
an agreement, representation or warranty on the part of two or more persons binds them jointly and severally;

 

	
(f)  

	
the word “includes” in any form is not a word of limitation;

 

	
(g)  

	
the words “for example” or “such as” when introducing an example do not limit the meaning of the words to which the example relates to that example or to examples of a similar kind;

 

	
(h)  

	
a reference to a day is to a period of time commencing at midnight and ending 24 hours later;

 

	
(i)  

	
if a period of time dates from a given day or the day of an act or event, it is to be calculated exclusive of that day; and

 

	
(j)  

	
a reference to “C$”, “$” or “dollar” is to Canadian currency except where otherwise expressly indicated.

 

	
2.  

	
Sale and purchase

 

	
2.1  

	
Agreement to sell and purchase

 

Subject to the satisfaction or waiver of the Conditions, the Vendor agrees to sell and the Purchaser agrees to purchase the Vendor Share. for the Purchase Price free from Encumbrances or other adverse interests on the terms and conditions set out in this Agreement.

 

	
2.2  

	
Consideration

 

The consideration payable by the Purchaser to the Vendor for the purchase of the Vendor Share and the Additional Industrial Mineral Rights is the Purchase Price.

 

	
2.3  

	
Payment of Purchase Price

 

	
(a)  

	
The Cash Consideration is to be paid by the Purchaser to the Vendor on Completion.

 

	
 

	
Confidential and Legally Privileged

	
 page 9

 

  

 

  

 

	 	 	
Sale & Purchase Agreement

	 	 	 

 

	
(b)  

	
The Share Consideration is to be issued by the Purchaser to the Vendor on Completion.

 

	
(c)  

	
The right to the Production Payments and the grant of the Royalty are described in clauses 6.2 and 6.4 respectively.

 

	
2.4  

	
Escrow

 

The Vendor acknowledges and agrees that the issue of the Share Consideration will be subject to:

 

	
(a)  

	
any escrow or resale restrictions or both imposed by any relevant Authority; and

 

	
(b)  

	
a voluntary escrow period of 12 months, which period shall run concurrently with any hold periods imposed by a relevant Authority.

 

	
3.  

	
Conditions to Completion

 

	
3.1  

	
Conditions precedent

 

Completion of the sale and purchase of the Vendor Share under this Agreement is subject to and conditional upon the satisfaction of the following conditions precedent (each a “Condition”):

 

	
(a)  

	
the Parties having obtained all shareholder and regulatory approvals necessary to achieve Completion under this Agreement including:

 

	
(i)  

	
TSX approvals;

 

	
(ii)  

	
ASX approvals; and

 

	
(iii)  

	
all necessary approvals under the relevant laws of Ontario, Canada, the United States of America and Australia,

 

	
(b)  

	
the Purchaser, Vendor and Company executing the Mineral Rights Agreement:

 

	
(c)  

	
the Purchaser and Vendor executing the Green Giant JVA.

 

	
3.2  

	
Best endeavours

 

Each of the Parties must use its best endeavours to procure satisfaction of the Conditions as soon as practicable following the date of this Agreement and, in any event, not later than the Conditions Satisfaction Date.

 

	
3.3  

	
Waiver of Conditions precedent

 

The Conditions in clause 3.1are included for the benefit of both Parties and may only be waived by mutual agreement of the Parties.

 

	
 

	
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3.4  

	
Non-satisfaction of Conditions

 

In the event that the Conditions in clause 3.1 are not satisfied or waived within 60 days following the date of this Agreement or such later date as the Parties may agree in writing (Conditions Satisfaction Date), then either Party may terminate this Agreement by giving written notice to the other Party to that effect.

 

	
4.  

	
Completion

 

	
4.1  

	
Time and place of Completion

 

Completion is to occur on the Completion Date at a time and place agreed by the Parties.

 

	
4.2  

	
Obligations of Vendor at Completion

 

At Completion, the Vendor must

 

	
(a)  

	
deliver to the Purchaser the following documents:

 

	
(i)  

	
(share certificates) the share certificate(s) in respect of the Vendor Share;

 

	
(ii)  

	
(Restriction Agreement) a Restriction Agreement duly executed by the Vendor;

 

	
(iii)  

	
(sharetransfer instruments) instruments of transfer for the Vendor Share naming the Purchaser as the transferee, duly executed by the Vendor and in registrable form;

 

	
(iv)  

	
(company documents) all copies in the Vendor’s possession of cheque books, financial and accounting records, agreements, and all other records, papers, books and documents of the Company;

 

	
(v)  

	
(permits and licenses) all originals and copies in the Vendor’s possession of current permits, licences, leases, subleases and other documents issued to the Company under any legislation or ordinance relating to the ERG Project Area;

 

	
(vi)  

	
(Mining Information) copies of all Mining Information in the Vendor’s possession; and

 

	
(vii)  

	
(other documents) any other document which the Purchaser reasonably requires to obtain good title to the Vendor Shareand to enable the Purchaser to cause the registration of the Vendor Share in the name of the Purchaser.

 

	
(b)  

	
(execution of agreements) if not already done, execute the:

 

	
(i)  

	
the Mineral Rights Agreement; and

 

	
(ii)  

	
the Green Giant JVA.

 

	
 

	
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4.3  

	
Meeting of directors of the Company

 

The Vendor and the Company must take all steps necessary to ensure thata duly convened meeting of the directors of the Company is held at Completion (Meeting) and resolutions are passed at that Meeting to effect the approval of:

 

	
(a)  

	
the registration of the transfer of the Vendor Share;

 

	
(b)  

	
the issue of a new share certificate for the Vendor Share in the name of the Purchaser; and

 

	
(c)  

	
the cancellation of the existing share certificate(s) in the name of the Vendor for the Vendor Share.

 

	
4.4  

	
Obligations of Purchaser at Completion

 

At Completion the Purchaser must:

 

	
(a)  

	
(Cash Consideration) pay the Cash Consideration to the Vendor;

 

	
(b)  

	
(Share Consideration) issue the Share Consideration to the Vendor free from any Encumbrances or other third party rights and enter the Vendor on the Purchaser’s share register as the holder of the Share Consideration;

 

	
(c)  

	
(Purchaser’s shares) do all things necessary and within its power to ensure that ordinary shares in the Purchaser issued pursuant to the Share Consideration are admitted to quotation on the TSX or other equivalent stock exchange and, subject to the clause 2.4, are freely tradeable;

 

	
(d)  

	
(holding statements) deliver or cause to be delivered to the Vendor:

 

	
(i)  

	
certificates or holding statements in respect of the Share Consideration (delivery to occur as soon as possible following Completion); and

 

	
(ii)  

	
any other document which the Vendor requires to obtain or evidence good title to the Share Consideration,

 

	
(e)  

	
(execution of agreements) if not already done, execute the Green Giant JVA and the Mineral Rights Agreement; and

 

	
(f)  

	
(other acts) do and execute all other acts and documents which this Agreement requires the Purchaser to do or execute at Completion.

 

	
4.5  

	
Completion simultaneous

 

The actions to take place at Completion as contemplated by clauses 4.2, 4.3 and 4.4 are interdependent and must take place, as nearly as possible, simultaneously.If one action does not take place, then without prejudice to any rights available to any Party as a consequence:

 

	
(a)  

	
there is no obligation on any Party to undertake or perform any of the other actions;

 

	
 

	
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(b)  

	
to the extent that such actions have already been undertaken, the Parties must do everything reasonably required to reverse those actions; and

 

	
(c)  

	
each Party must return to the other all documents delivered to it under this clause 4, and must each repay to the other all payments received by it under this clause 4, without prejudice to any other rights any Party may have in respect of that failure.

 

	
4.6  

	
Title, property and risk

 

	
(a)  

	
The title to, property in and risk of the Vendor Share and the Additional Industrial Mineral Rights:

 

	
(i)  

	
until Completion, remains solely with the Vendor; and

 

	
(ii)  

	
passes to the Purchaser on and from Completion.

 

	
(b)  

	
The title to, property in and risk of the Additional Industrial Mineral Rights shall pass to the Purchaser in accordance with the terms of the Mineral Rights Agreement.

 

	
4.7  

	
Termination of the Joint Venture Agreement and release

 

Upon Completion:

 

	
(a)  

	
the Joint Venture Agreement will immediately terminate in accordance with clause 28.1(b) of the Joint Venture Agreement; and

 

	
(b)  

	
subject to the terms of this Agreement, each Party acknowledges and agrees that:

 

	
(i)  

	
it shall have no rights whatsoever against the other Parties for any payment or Claim arising under or in connection with the Joint Venture Agreement; and

 

	
(ii)  

	
it unconditionally releases and forever discharges each of the other Parties from any Claims they may now have or but for this Agreement at any time in the future may have had directly or indirectly against the other Parties arising under or in connection with the Joint Venture Agreement whether such Claims are known, unknown or incapable of being known at the time of execution of this Agreement.

 

	
5.  

	
Pre-Completion conduct

 

	
5.1  

	
Conduct pending Completion

 

	
 

	
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From the date of this Agreement until Completion or the termination of this Agreement, whichever occurs first, the Vendor:

 

	
(a)  

	
(disposal of Shares) must not, without the prior written consent of the Purchaser, Dispose or agree to Dispose of the Vendor Share;

 

	
(b)  

	
(disposal of Additional Permits) must procure that the MGY Subsidiaries do not, without the prior written consent of the Purchaser, Dispose or agree to Dispose of the Additional Permits;

 

	
(c)  

	
(no Encumbrances) must not create any Encumbrance or any adverse claim or interest concerning:

 

	
(i)  

	
the Joint Venture Property;

 

	
(ii)  

	
the Vendor Share;

 

	
(iii)  

	
the Additional Industrial Mineral Rights; or

 

	
(iv)  

	
the Company,

 

in favour of any third party in any capacity whatsoever; and

 

	
(d)  

	
(Good Standing) must ensure that the Additional Permit Holders make all payments necessary to maintain the Additional Exploration Permits in Good Standing and pay any and all rates, rents and taxes until Completion, including making applications and doing all things necessary as may be required by relevant Laws.

 

	
5.2  

	
Vendor’s assistance prior to Completion

 

Until the earlier of Completion or the termination of this Agreement, the Vendor must supply to the Purchaser, and any person who has the Purchaser’s written authority, any information or document in its possession or control reasonably requested concerning the Additional Industrial Mineral Rights.

 

	
6.  

	
Period after Completion

 

	
6.1  

	
Mineral Rights Agreement

 

On and from Completion, the terms set out in the Mineral Rights Agreement will apply to the conduct ofall exploration and mining activities conducted by the Parties within the ERG Project Area.

 

	
6.2  

	
Production Payments

 

	
(a)  

	
Upon the Purchaser completing a bankable feasibility study in respect of the exploitation of Industrial Minerals within the ERG Project Area andmaking a public announcement on the TSX regarding the results of that study, the Purchaser must:

 

	
(i)  

	
within 30 days of the date of the announcement pay to the Vendor the amount of C$700,000 in cash; and

 

	
(ii)  

	
subject to receiving relevant TSX approvals and other necessary approvals (which the Purchaser agrees to seek within 5 Business Days of the date of the announcement) and immediately upon receiving such approvals, issue to the Vendor 1,000,000 ordinary sharesof the Purchaser at a price equal to the volume weighted average price of the Purchaser’s ordinary shares traded on TSX during the five (5) days immediately prior the date of issue.

 

	
 

	
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(b)  

	
On the commencement of commercial production of Industrial Minerals from the ERG Project Area, the Purchaser must, within 30 days, pay to the Vendor the amount of C$1,000,000 in cash.

 

	
6.3  

	
Escrow

 

	
(a)  

	
The Vendor acknowledges and agrees that the issue of the Purchaser’s common shares pursuant to clause 6.2(a)(ii) will be subject to:

 

	
(i)  

	
any escrow or resale restrictions or both imposed by any relevant Authority; and

 

	
(ii)  

	
a voluntary escrow period of 12 months, which period shall run concurrently with any hold periods imposed by relevant Authorities.

 

	
(b)  

	
The issue of the Purchaser’s common shares shall be subject to the Vendor delivering to the Purchaser a Restriction Agreement, duly executed by the Vendor.

 

	
6.4  

	
Royalty

 

On and from the commencement of commercial production of Industrial Minerals from the ERG Project Area, the Purchaser must pay to the Vendor a royalty of an amount equal to one and a half percent (1.5%) of net smelter returns of all Industrial Minerals produced from the ERG Project Area calculated in accordance with Schedule 2 (Royalty).

 

	
7

	
Representations and warranties

 

	
7.1  

	
Representations and warranties by Purchaser

 

The Purchaser represents and warrants to the Vendor as at both the date of this Agreement and at Completion that:

 

	
(a)  

	
it is validly incorporated and subsisting under the laws of Minnesota, USA;

 

	
(b)  

	
the execution and delivery of this Agreement has been duly and validly authorised by all necessary corporate action;

 

	
(c)  

	
it has corporate power and lawful authority to execute and deliver this Agreement and to observe and perform or cause to be observed and performed all of its obligations in and under this Agreement;

 

	
(d)  

	
there is no litigation or proceeding of any nature concerning the Purchaser, pending or threatened against them or a Related Body Corporate which may prevent or impair the Purchaser’s ability to enter into or perform its obligations in and under this Agreement;

 

	
 

	
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(e)  

	
this Agreement does not conflict with or constitute or result in a material breach of or default under any agreement, deed, writ, order, injunction, judgment, law, rule or regulation to which it is a party or is subject or by which it is bound in a manner which may materially and adversely affect the rights and interests of a Party under this Agreement; and

 

	
(f)  

	
it has not suffered an Insolvency Event.

 

	
7.2  

	
Representations and warranties bythe Vendor

 

The Vendor represents and warrants to the Purchaser as at both the date of this Agreement and at Completion that:

 

	
(a)  

	
it is the registered legal and beneficial owner of the Vendor Share;

 

	
(b)  

	
it is validly incorporated and subsisting under the laws of Australia;

 

	
(c)  

	
the execution and delivery of this Agreement has been duly and validly authorised by all necessary corporate action;

 

	
(d)  

	
it has corporate power and lawful authority to execute and deliver this Agreement and to observe and perform or cause to be observed and performed all of its obligations in and under this Agreement;

 

	
(e)  

	
there is no litigation or proceeding of any nature concerning the Vendor, pending or threatened against the Vendor or a Related Body Corporate which may prevent or impair the Vendor’s ability to enter into or perform its obligations in and under this Agreement;

 

	
(f)  

	
this Agreement does not conflict with or constitute or result in a material breach of or default under any agreement, deed, writ, order, injunction, judgment, law, rule or regulation to which it is a party or is subject or by which it is bound in a manner which may materially and adversely affect the rights and interests of a Party under this Agreement;

 

	
(g)  

	
it has not suffered an Insolvency Event;

 

	
(h)  

	
subject to the Bureau du Cadastre Minier de Madagascar approving the Vendor’s application to include Industrial Mineral Rights under the Additional Permits, it has the full right, power and authority to sell the Additional Industrial Mineral Rights and to procure the MGY Subsidiaries to transfer the legal and beneficial interest to the Additional Industrial Mineral Rights to the Purchaser in accordance with the Mineral Rights Agreement;

 

	
(i)  

	
one or more of the MGY Subsidiaries arethe registered and beneficial holders of the Additional Exploration Permits;

 

	
(j)  

	
no person other than the Purchaser, the Vendor and their Related Bodies Corporate has any proprietary rights of any nature in respect of the Additional Exploration Permits and they have not granted to any person any rights to own or possess any interest or any rights to explore or prospect for minerals or to mine the same in any part of the land comprising the Additional Exploration Permits;

 

	
 

	
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(k)  

	
the Additional Exploration Permits are free of any Encumbrances except to the extent of any conditions imposed under the Mining Code;

 

	
(l)  

	
there is no litigation or proceeding of any nature concerning the Additional Exploration Permits, pending or threatened againstor any other person which may defeat, impair, detrimentally affect or reduce the right, title and interest of the Company or the Additional Permit Holders in theAdditional Exploration Permits or the interest therein, including any plaint seeking forfeiture of the Additional Exploration Permits;

 

	
(m)  

	
to the best of its knowledge, the Additional Exploration Permits have been duly marked off, granted and applied for in accordance with the Mining Code;

 

	
(n)  

	
the Additional Exploration Permits are in Good Standing under the Mining Code and they are not in breach or contravention of any of the terms and conditions upon which the Additional Exploration Permits were granted or of any other rule, regulation or provision of the Mining Code or any other statute concerning, affecting or relating to the Additional Exploration Permits;

 

	
(o)  

	
to the best of the Vendor’s knowledge, information and belief, there are no facts or circumstances that could, under the currently applicable laws of Madagascar, give rise to the cancellation, forfeiture or suspension or grant of the Additional Exploration Permits when renewed, that could have a Material Adverse Effect;

 

	
(p)  

	
except as disclosed to thePurchaser before the date of this Agreement, there are no agreements or dealings in respect of the Additional Exploration Permits;

 

	
(q)  

	
there is not in existence any current compensation agreement with the owner or occupier of any land which is subject to the Additional Exploration Permits;

 

	
(r)  

	
there are no Environmental Liabilities relating to or affecting the Additional Exploration Permits, nor are there any circumstances relating to the Exploration Permits which may reasonably be expected to give rise to future Environmental Liabilities, except to the extent of any report, study or assessment required to be lodged pursuant to the Mining Code or other regulation in relation to the Additional Exploration Permits;

 

	
(s)  

	
the Mining Information is complete and accurate in all material respects as it relates to the Additional Exploration Permits; and

 

	
(t)  

	
the Additional Exploration Permits have been granted in respect of all of the ground described in the Additional Exploration Permits other than as a result of a compulsory surrender required under the Mining Code or other law affecting the Additional Exploration Permits.

 

	
7.3  

	
Disclaimer of liability by the Vendor

 

The Vendor is not liable for any loss arising from a breach of the warranties and representations in clause 7.2 to the extent such loss is:

 

	
(a)  

	
incurred as a result of a Political Event;

 

	
 

	
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(b)  

	
disclosed by the Vendor to the Purchaser or is known by the Purchaser at or prior to Completion;

 

	
(c)  

	
in excess of the total amount of the Purchase Price; or

 

	
(d)  

	
caused or contributed to by a breach by the Purchaser or the Company ortheir respective obligations under this Agreement.

 

	
8.

	
Termination

 

	
8.1

	
Termination

 

Either Party may terminate this Agreement at any time prior to Completion,by giving notice to the other Parties to that effect if, the Party:

 

	
(a)  

	
commits any serious breach or non-observance of any of the provisions of this Agreement that is not capable of being remedied;

 

	
(b)  

	
fails to remedy a breach of this Agreement that is capable of being remedied within fourteen (14) days of being requested (in writing) by the non-defaulting Party to remedy that breach; or

 

	
(c)  

	
suffers an Insolvency Event.

 

	
8.2

	
Consequences of Termination before Completion

 

If this Agreement is terminated in accordance with clause 8.1 or otherwise:

 

	
(a)  

	
no Party has any liability to the other Parties except for antecedent breaches of this Agreement; and

 

	
(b)  

	
clause 9 will continue to operate to the extent applicable.

 

	
9.  

	
Confidentiality and public announcements

 

	
9.1  

	
Confidentiality

 

Subject to this clause 9, each Party (for this clause Recipient) who is in possession or control of or has access to Confidential Information of another Party or a Related Body Corporate of another Party (Owner) must use that Confidential Information only for the purposes of acts contemplated by this Agreement, and keep that Confidential Information confidential and not disclose it or allow it to be disclosed to any third party except:

 

	
(a)  

	
if the information is at the time generally and publicly available other than as a result of breach of confidence by the Recipient;

 

	
(b)  

	
if the information is at the time lawfully in the possession of the proposed recipient of the information through sources other than the Recipient;

 

	
(c)  

	
by the Recipient to legal and other professional advisers and other consultants and officers and employees of:

 

	
 

	
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(i)  

	
the Recipient; or

 

	
(ii)  

	
the Recipient's Related Bodies Corporate,

 

in any case requiring the information for the purposes of this Agreement or any transaction contemplated by it, or for the purpose of advising that Party in relation thereto;

 

	
(d)  

	
with the prior writtenconsent of the Owner;

 

	
(e)  

	
to the extent required by law or by a lawful requirement of any Governmental Agency having jurisdiction over the Recipient or any of its Related Bodies Corporate;

 

	
(f)  

	
if required in connection with legal proceedings or arbitration relating to this Agreement or for the purpose of advising the Recipient in relation thereto;

 

	
(g)  

	
if and to the extent that it may be necessary or desirable to disclose to any Governmental Agency in connection with applications for consents, approvals, authorities or licenses in relation to this Agreement;

 

	
(h)  

	
to the extent required by a lawful requirement of any stock exchange having jurisdiction over the Recipient or any of its Related Bodies Corporate;

 

	
(i)  

	
if necessary to be disclosed in any prospectus or information memorandum to investors or proposed or prospective investors:

 

	
(i)  

	
for an issue or disposal of any shares or options in the Recipient or any of its Related Bodies Corporate;

 

	
(ii)  

	
for an issue of debt instruments of the Recipient or any of its Related Bodies Corporate; or

 

	
(iii)  

	
for the purposes of the Recipient obtaining a listing on any stock exchange of any shares, options or debt instruments;

 

	
(j)  

	
if necessary to be disclosed to a professional investor or investment adviser for the purposes of enabling an assessment to be made about the merits or otherwise of an investment in the Recipient or any of its Related Bodies Corporate;

 

	
(k)  

	
if necessary to be disclosed to an existing or bona fide proposed or prospective:

 

	
(i)  

	
financier of the Recipient or of any of its Related Bodies Corporate; or

 

	
(ii)  

	
rating agency in respect of the Recipient or of any of its Related Bodies Corporate;

 

	
(l)  

	
if necessary to be disclosed to any bona fide proposed or prospective:

 

	
 

	
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(i)  

	
transferee of any property to which the information relates or of any shares in the Recipient or any Related Body Corporate of the Recipient;

 

	
(ii)  

	
financier of such transferee providing or proposing or considering whether to provide financial accommodation; or

 

	
(iii)  

	
assignee of rights under the Recipient's financing documents; or

 

	
(m)  

	
if necessary to be disclosed to legal and other professional advisers and other consultants and officers or employees of any of the persons referred to in clause 9.1(j), 9.1(k), or 9.1(l).

 

	
9.2  

	
Conditions

 

	
(a)  

	
In the case of a disclosure under clause 9.1(c) or 9.1(d) and, where appropriate, under clause 9.1(e) or 9.1(f), the Party wishing to make the disclosure must inform the proposed recipient of the confidentiality of the information and the Party must take such precautions as are reasonable in the circumstances to ensure that the proposed recipient keeps the information confidential.

 

	
(b)  

	
In the case of a disclosure under clause 9.1(g) 9.1(h) or 9.1(i), the Party wishing to make the disclosure may only do so:

 

	
(i)  

	
with the written consent of both Parties, which must not be unreasonably withheld or delayed; or

 

	
(ii)  

	
to the extent required by law, the official rules of any the relevant stock exchange or any Governmental Agency, but if any Party is required to make any such announcement, it must promptly notify the other Party, where reasonably practicable and lawful to do so, before the announcement is made and must confer with the other Party and consider any comments of the other Partyregarding the timing and content of such announcement or any action which the other Party may reasonably elect to take to challenge the validity of such requirementsubject at all times to the disclosing Party’s obligations under law, the official rules of the relevant stock exchange or any Governmental Agency.

 

	
(c)  

	
In the case of a disclosure under clause 9.1(j), 9.1(k) or 9.1(l) or (in the case of legal and other professional advisers and other consultants only) 9.1(m) the Party wishing to make the disclosure must not make any disclosure unless:

 

	
(i)  

	
in the case of a disclosure under clause 9.1(j), 9.1(k) or 9.1(l) the proposed recipient has first entered into and delivered to the Recipient a confidentiality undertaking in a form acceptable to the other Party; or

 

	
(ii)  

	
in the case of a disclosure under clause 9.1(m) the principal or employer of the proposed recipient has first entered into and delivered to the Recipient a confidentiality undertaking in a form acceptable to the other Party which will incorporate a warranty by the principal or employer of the proposed recipient that the proposed recipient is under an obligation of confidentiality to the principal or employer and that the principal or employer will enforce that obligation to the fullest extent that the law or equity allows upon being called upon to do so by any of the Parties.

 

	
 

	
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9.3  

	
Notice to other Parties

 

Each Party must:

 

	
  

	
(a)

	
promptly inform each other Party of any request received by that Party from any person described in clause 9.1(e) to disclose information under that clause;

 

	
  

	
(b)

	
inform all other Parties as soon as reasonably practicable after information is disclosed by the Party under clause 9.1(e); and

 

	
  

	
(c)

	
not disclose any information under clause 9.1 unless all other Parties have been informed of the proposed disclosure.

 

	
9.4  

	
Indemnities

 

Each Party indemnifies each other Party against any costs, losses, damages and liabilities suffered or incurred by that other Party arising out of or in connection with any disclosure by the first-mentioned Party of information in contravention of this clause 9.

 

	
9.5  

	
Survival of confidentiality obligations

 

The obligations of confidentiality imposed by this clause 9 survive the termination of this Agreement and any person who ceases to be a Party continues to be bound by those obligations.

 

	
9.6  

	
Use of Mining Information in respect to Other Mineral Rights

 

Nothing in this clause 9 prevents the Vendor from using the Mining Information in relation to the exploration and development of the Other Minerals.

 

	
9.7  

	
Notices

 

Each communication (including each notice, consent, approval, request and demand) under or in connection with this Agreement:

 

	
(a)  

	
must be in writing;

 

	
(b)  

	
must be addressed as follows (or otherwise notified by that Party to the other Party from time to time):

 

	
 

	
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 page 21

 

  

 

  

 

	 	 	
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	To Energizer	Energizer Resources Inc
	 	 
	 	Attention:	
Chief Executive Officer

	 	 	 
	 	
Address: 

	
Energizer Resources Inc.

141 Adelaide Street

West Suite 520

Toronto, Ontario

CANADA

	 	Facsimile: 	+1 416.364.2753
	 	 	 
	To Malagasy	Malagasy Minerals Limited
	 	 
	 	Attention:	Company Secretary
	 	 	 
	 	
Address:

	
Malagasy Minerals Limited

15 Lovegrove Close

Mount Claremont

Western Australia 6010

AUSTRALIA

	 	Facsimile:	+61 8 9284 3801

 

	
(c)  

	
must be signed by the Party making it or (on that party’s behalf) by the solicitor for or any attorney, director, secretary or authorised agent of that Party;

 

	
(d)  

	
must be delivered by hand or posted by prepaid post to the address, or sent by fax to the number, of the addressee; and

 

	
(e)  

	
is taken to be received by the addressee:

 

	
(i)  

	
(in the case of prepaid post sent to an address in the same country) on the third day after the date of posting;

 

	
(ii)  

	
(in the case of prepaid post sent to an address in another country) on the fifth day after the date of posting;

 

	
(iii)  

	
(in the case of fax) at the time in the place to which it is sent equivalent to the time shown on the transmission confirmation report produced by the fax machine from which it was sent; and

 

	
(iv)  

	
(in the case of delivery by hand) on delivery,

 

	
 

	
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but if the communication is taken to be received on a day that is not a working day or after 5.00 pm, it is taken to be received at 9.00 am on the next working day (“working day” meaning a day that is not a Saturday, Sunday or public holiday, and is a day on which banks are open for business generally, in the place to which the communication is posted, sent or delivered).

 

	
10.  

	
Miscellaneous

 

	
10.1  

	
Governing law

 

This Agreement is governed by and must be construed according to the law applying in Ontario, Canada.

 

	
10.2  

	
Amendments

 

This Agreement may only be varied by a document signed by or on behalf of each of the Parties.

 

	
10.3  

	
Primacy of this Agreement

 

The Parties agree that this Agreement has primacy over any ancillary agreement contemplated by this Agreement and, in the case of inconsistency, the terms and conditions of this Agreement will prevail. Each Party agrees that it will procure that any subsidiary of it will comply with the terms of this Agreement notwithstanding any inconsistency between this Agreement any ancillary agreement contemplated by this Agreement which a subsidiary of a Party is a party to.

 

	
10.4  

	
Waiver

 

	
(a)  

	
Failure to exercise or enforce, or a delay in exercising or enforcing, or the partial exercise or enforcement, of a right provided by law or under this Agreement by a Party does not preclude, or operate as a waiver of, the exercise or enforcement, or further exercise or enforcement, of that or any other right provided by law or under this Agreement.

 

	
(b)  

	
A waiver or consent given by a Party under this Agreement is only effective and binding on that Party if it is given or confirmed in writing by that Party.

 

	
(c)  

	
No waiver of a breach of a term of this Agreement operates as a waiver of another breach of that term or of a breach of any other term of this Agreement.

 

	
10.5  

	
Consents

 

A consent required under this Agreement from a Party may be given or withheld, or may be given subject to any conditions, as that Party in its absolute discretion thinks fit, unless this Agreement expressly provides otherwise.

 

	
10.6  

	
Counterparts

 

This Agreement may be executed in any number of counterparts and by the Parties on separate counterparts. Each counterpart constitutes an original of this Agreement and all together constitute one agreement.

 

	
10.7  

	
No representation or reliance

 

	
 

	
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(a)  

	
Each Party acknowledges that neither Party (nor any person acting on a Party’s behalf) has made any representation or other inducement to it to enter into this Agreement except for representations or inducements expressly set out in this Agreement.

 

	
(b)  

	
Each Party acknowledges and confirms that it does not enter into this Agreement in reliance on any representation or other inducement by or on behalf of the other Party, except for representations or inducements expressly set out in this Agreement.

 

	
10.8  

	
Expenses

 

Except as otherwise provided in this Agreement, each Party must pay its own costs and expenses in connection with negotiating, preparing, executing and performing this Agreement.

 

	
10.9  

	
Entire agreement

 

To the extent permitted by law, in relation to its subject matter this Agreement:

 

	
(a)  

	
embodies the entire understanding of the Parties, and constitutes the entire terms agreed by the Parties; and

 

	
(b)  

	
supersedes any prior written or other agreement of the Parties.

 

	
10.10  

	
Indemnities

 

	
(a)  

	

Each indemnity in this Agreement is a continuing obligation, separate and independent from the other obligations of the Parties, and survives termination, completion or expiration of this Agreement.

 

	
(b)  

	

It is not necessary for a Party to incur expense or to make any payment before enforcing a right of indemnity conferred by this Agreement.

 

	
(c)  

	

A Party must pay on demand any amount it must pay under an indemnity in this Agreement.

 

	
10.11  

	
Severance and enforceability

 

Any provision, or the application of any provision, of this Agreement that is void, illegal or unenforceable in any jurisdiction does not affect the validity, legality or enforceability of that provision in any other jurisdiction or of the remaining provisions of this Agreement in that or any other jurisdiction.

 

	
 

	
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10.12  

	
No merger

 

The rights and obligations of the Parties under this Agreement do not merge on completion of any transaction under this Agreement, and survive the execution and delivery of any assignment or other document entered into for the purpose of implementing any transaction under this Agreement.

 

	
10.13  

	
Power of attorney

 

	
(a)  

	

Each attorney who signs this Agreement on behalf of a Party declares that the attorney has no notice from the Party who appointed him that the power of attorney granted to him, under which the attorney signs this Agreement, has been revoked or suspended in any way.

 

	
(b)  

	

Each Party represents and warrants to each other that its respective attorney or authorised officer who signs this Agreement on behalf of that Party has been duly authorised by that Party to sign this Agreement on its behalf and that authorisation has not been revoked.

 

	
10.14  

	
Taxes

 

	
(a)  

	
For the purpose of this clause 10.14, Tax means a tax including any value added or goods and services taxes (including TVA), rate, levy, duty (other than a tax on the net overall income of a Party) and any interest penalty fine or expense relating to any of them.

 

	
(b)  

	
Subject to clause 10.14(c), any Taxes that may be imposed by any authorities in connection with this Agreement and any Taxes, fees or costs in relation to the registration of this Agreementwill be paid by the Purchaser.

 

	
(c)  

	
Any Taxes which may be imposed by any authorities in connection with the transfer of the Vendor Share under this Agreement, will be apportioned equally between the Purchaser and the Vendor.

 

	
(d)  

	
The Purchaser will indemnify and hold the Vendor harmless against any liability for the Purchaser’s obligations set out in clauses10.14(b) and 10.14(c) above, provided that under no circumstances will the Purchaser be liable or accountable for any capital gains tax or income tax liability of the Vendor.

 

	
 

	
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Sale & Purchase Agreement

	 	 	 

 

Schedule 1– Industrial Minerals

 

Vanadium

Lithium

Aggregates

Alunite

Barite

Bentonite

Vermiculite

Carbonatites

Corundum

Dimension stone, other than labradorite

Feldspar, other than labradorite

Fluorspar

Granite

Graphite

Gypsum

Kaolin

Kyanite

Limestone / Dolomite

Marble

Mica

Olivine

Perlite

Phosphate

Potash –Potassium minerals

Pumice

Quartz

Staurolite

Zeolites

 

	
 

	
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Schedule 2 – Net Smelter Return Royalty

 

The royalty referred to in clause 6.4 of the Agreement is to be calculated and paid by the Payer to a Payee in accordance with this Schedule 2.

 

	
S2.1  

	
Definitions

 

In this Schedule, unless otherwise defined below or the context requires otherwise, expressions defined in the Agreement of which this Schedule forms part have the same meaning as in the Agreement and the following expressions will have the following meanings:

 

Adjustment means any adjustment that may bemade by the Payer to the Royalty Records:

 

	
(a)  

	
which arise from a subsequent adjustment to the amount paid to a Payer based on the actual Products recovered after refining;

 

	
(b)  

	
tocorrect any accounting or recording errors from previous Quarters;

 

	
(c)  

	
which are otherwise made in accordance with this Agreement; or

 

	
(d)  

	
which are agreed by the Parties.

 

Carried Forward Deduction means the amount of Deductions that exceeds the Gross Revenue in a Quarter, which may then be carried forward and deducted from Gross Revenue in subsequent Quarters.

 

	 	
Deductions means all costs paid or incurred by the Payer, in US dollars or in US Dollar Equivalent, in relation to the sale of Product extracted and recovered from the Development Area after mining and milling or other initial processing within or adjacent to the Development Area, and include:

 

	
(a)  

	
all costs of smelting and refining and retorting the ore and minerals extracted from the Development Area, including Penalties for impurities and all umpire charges and other processor deductions;

 

	
(b)  

	
all road, sea and rail freight, transportation, security and incidental costs and expenses, including forwarding, shipping, demurrage, delay and insurance costs, incurred between the outer boundary of, or adjacent to, the Development Area and the point of delivery of the Products into a Refinery, including the cost of transport to and between any Refinery or other places of treatment;

 

	
(c)  

	
handling and incidental costs and expenses including agency, banking, assaying, sampling, weighing, loading, unloading, stockpiling and storage;

 

	
(d)  

	
actual sales costs, and reasonable marketing, representation, agency and brokerage costs in respect of the Product subject to the Royalty;

 

	
 

	
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(e)  

	
administrative and other general overhead costs that are directly attributable and reasonably allocable to the costs set out in paragraphs (a) to (d) above, as agreed with the Payee;

 

	
(f)  

	
Carried Forward Deductions;

 

	
(g)  

	
shipping agency fees;

 

	
(h)  

	
bank charges on sales receipts and payments;

 

	
(i)  

	
government charges on banking transactions;

 

	
(j)  

	
all taxes (excluding taxes based on income of the Payer), royalties, duties, levies and charges lawfully imposed by an Authority, including carbon emission licence fees, charges, fuel excise (net of any fuel tax credits) and carbon trading taxes in any way connected with the transportation or sale of the Product from the Mining Area, including any value added or goods and services taxes (but not if subject to an input tax credit, which is actually claimed and received);

 

	
(k)  

	
any other incidental charge or expense incurred between the outer boundary of, or adjacent to, the Development Area up to the point of delivery of the Products into a Refinery, including on-site transport and storage,

 

but does not include:

 

	
(l)  

	
any exploration, development, construction, mining, crushing, treatment or concentrating costs incurred by the Payer within or adjacent to the Development Area; or

 

	
(m)  

	
where Products are loaded, treated, milled, processed, transported or unloaded outside the ERG Project Area in a Refinery wholly or partially owned by the Payer or a shareholder, Related Body Corporate or Related Entity of the Payer, any costs and expenses that are in excess of those which would be paid or incurred by the Payer on arm’s length terms, or which would not be Deductions if those Products were processed by a third party.

 

	 	
Development Area means the area within the ERG Project Area existing at the date of this Agreement where mining activities are conducted from time to time during the term of this Agreement.

 

	 	
Exchange Rate means the average of the spot rate of exchange during the relevant period for the purchase of one currency against another currency as set by the usual bank for the Payer or another recognised and reputable banking institution chosen by the Payer, acting reasonably.

 

Gross Revenue in respect of an expired Quarter means the aggregate of:

 

	
(a)  

	
the total amounts actually received by the Payer from the sale of Product to the owner or operator of a Refinery, in US dollars, or in US Dollar Equivalent, (Sales) including the proceeds received from an insurer in the case of loss of, or damage to, the Products (net of any excess paid in respect of that loss),during the expired Quarter, less any refunds, claims or discount, where Sales are effected on an arms-length basis on normal commercial terms; and

 

	
 

	
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(b)  

	
if Sales are effected on any other basis than on an arms-length basis on normal commercial terms, or if Product is disposed of otherwise than by sale (whether immediate or for future delivery) during the expired Quarter, the fair market value of the Product so sold or otherwise disposed of during the expired Quarter in US dollars, or in US Dollar Equivalent,as determined in accordance with paragraph S2.8.

 

Month means calendar month.

 

	 	
Net Smelter Return means Gross Revenue and Adjustments (whether plus or minus) for the relevant Quarter minus Deductions for that Quarter.

 

	 	
Payee means the Vendor, or any subsequent party entitled in accordance with this Agreement to receive payment of the Royalty.

 

	 	
Payer means the Purchaser, or any subsequent mining development company established by the Purchaser and ERG for the exploitation of Industrial Minerals within the Development Area.

 

	 	
Penalty means a charge made by a Refinery, in addition to normal refining costs, for removing from the Product minerals or other substances where the cost of the removal exceeds the value of those minerals or other substances.

 

Refinery means a smelter, refinery or other processing facility.

 

	 	
Product means any Industrial Minerals, or any product derived from the processing of Industrial Minerals extracted and recovered from the ERG Project Area which is capable of being sold or otherwise disposed of, including those described in Schedule 1.

 

	 	
Quarter means the period of three consecutive Months commencing 1 January, 1 April, 1 July or 1 October in any year, other than the first Quarter which commences on the date the Payee become entitled to the Royalty under clause 6.4 of the Agreement and expires on the date immediately preceding the next to occur of 1 January, 1 April, 1 July or 1 October, and Quarterly has the corresponding meaning.

 

Royalty means 1.5% of the Net Smelter Return.

 

	 	
US Dollar Equivalent means, where sum to which this Agreement relates is not stated in US dollars, the amount determined by converting the amount in foreign currency into US dollars at the Exchange Rate existing when the relevant revenue was earned or receivable, or the relevant expenditure was incurred, by the Payer.

 

	
S2.2  

	
Calculation of Net Smelter Return

 

	 	
The Payer will calculate the Net Smelter Return Quarterly from the date on which Product is first produced from the Development Area.

 

	
 

	
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S2.3  

	
Reporting

 

Within 30 days of the end of each Quarter, the Payer will provide the Payee with a statement setting out in reasonable detail the calculation of the Royalty due to the Payee from the Payer for the previous Quarter and any adjustments occasioned by errors in any previous accounting.

 

	
S2.4  

	
Time for payment of Royalty

 

Within 30 days of the end of each Quarter, the Payer must pay to the Payee the Royalty plus or minus any adjustments in accordance with paragraph S2.3.

 

	
S2.5  

	
Audits and adjustments

 

	
(a)  

	
The Payer’s records that relate to the calculation of the Net Smelter Return and the Royalty for a Quarter (Royalty Records) shall be open to inspection and review by the Payee’s external auditors for a period of 12 Months after the end of such Quarter, at the Payee’s cost. If not reviewed in that 12 Month period the Royalty payment for that Quarter will be taken to be in full and final satisfaction of the Payer’s obligations in respect of that payment.

 

	
(b)  

	
If an audit carried out pursuant to paragraph S2.5(a) (Audit) discloses that the Payer has made an overpayment of the Royalty or has made an underpayment of the Royalty of 5% or less, then the Payee will be responsible for payment of the costs of the Audit and the Payer will (as the case may be):

 

	
(i)  

	
deduct the amount of any such overpayment from its next Royalty payment to the Payee; or

 

	
(ii)  

	
add the amount of any such underpayment to the next Royalty payment it makes to the Payee.

 

	
(c)  

	
If an Audit discloses an underpayment by the Payer of more than 5%, then the costs of the Audit shall be borne by the Payer and the amount of the underpayment will be paid by the Payer to the Payee within 14 days after delivery of the Audit report to the Payer.

 

	
S2.6  

	
Assignment

 

	
(a)  

	
The Payer must not sell, assign or otherwise dispose of or encumber the whole or part of its interest in the Development Area without first requiring the assignee or other such party to enter into a covenant with the Payee on terms to the satisfaction of the Payee (acting reasonably) binding it to observe and perform all the terms and conditions of these procedures as from the effective date of assignment or encumbrance.

 

	
(b)  

	
The Payee may only assign, sell or otherwise dispose of the whole (but not a part) of its rights and interest in or under the Royalty (Relevant Interest), other than to a Related Body Corporate of the Payee to which this paragraph (b) does not apply, if it first offers to the Payer the opportunity to acquire the Relevant Interest for consideration equal to that offered by the proposed assignee. If the Payer does not accept the offer within 30 days,the Payee may proceed with the assignment, sale or disposal to the proposed assignee within 90 days and on terms no more favourable to the proposed assignee than those offered to the Payer. If the Payer accepts the offer then settlement of the assignment of the Relevant Interest to the Payer shall occur within 60 days thereafter.

 

	
 

	
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S2.7  

	
Hedging and Disposal of Intermediate Product

 

	
(a)  

	
All profits and losses resulting from the Payer engaging in any commodity futures trading, option trading, metals trading, gold loans or any combination thereof, or other hedging or price protection arrangements or mechanisms are excluded from calculations of the Net Smelter Return.

 

	
(b)  

	
The Payer must not dispose of, or allow for commingling of, any ore from the Development Area or any intermediate product unless it has ensured that it has access to all information necessary in order to calculate the Royalty.

 

	
S2.8  

	
Reference to expert

 

	
(a)  

	
If any dispute or difference arises between the Parties in connection with, the calculation of the Net Smelter Return or the Royalty, the Parties undertake with each other to use all reasonable endeavours, in good faith, to settle the dispute or difference by negotiation.

 

	
(b)  

	
If any dispute referred to in paragraph S2.8(a) has not been resolved within a reasonable time of not less than 21 days, either Party may refer the matter in issue to an independent expert for determination.

 

	
(c)  

	
Prior to resolution of the dispute, the Parties must continue to perform their respective obligations under this Agreement including all pre-existing obligations the subject of the dispute, except only:

 

	
(i)  

	
an obligation to make a payment to the other Party, where that payment is a subject of the dispute; or

 

	
(ii)  

	
to the extent that lack of resolution of the dispute prevents such performance.

 

	
(d)  

	
Nothing in this clause prevents a Party from commencing proceedings in any court where proceedings are required to obtain urgent interlocutory relief.

 

	
 

	
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Sale & Purchase Agreement

	 	 	 

 

Executed as an agreement

 

	
Signed as an agreement by Energizer 

Resources Inc.

	
)

)

)

	 
	 	 	 
	
/s/ Peter Liabotis

	 	
/s/ Richard Schler

	
Signature

	 	
Signature

	 	 	 
	
Peter Liabotis

	 	
Richard Schler

	
Print name

	 	
Print name

	 	 	 
	
CFO

	 	
CEO

 

	
Signed as an agreement by Malagasy

Minerals Limited (ACN 121 700 105)

	
)

)

)

	 
	 	 	 
	
/s/ Graeme Raymond Boden

	 	
/s/ Natasha Lee Forde

	
Signature

	 	
Signature

	 	 	 
	
Graeme Raymond Boden

	 	
Natasha Lee Forde

	
Print name

	 	
Print name

	 	 	 
	
Director

	 	
Company Secretary

 

	
Signed as an agreement by Madagascar-

ERG Joint Venture (Mauritius) Ltd

	
)

)

)

	 
	 	 	 
	
/s/ Peter Liabotis

	 	
/s/ Richard Schler

	
Signature

	 	
Signature

	 	 	 
	
Peter Liabotis

	 	
Richard Schler

	
Print name

	 	
Print name

	 	 	 
	
Director

	 	
Company Secretary / Director

 

	
 

	
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Annexure A – Mineral Rights Agreement

 

 

 

 

 

 

 

 

 

 

 

 

	
 

	
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