Document:

ex_10-8.htm

    
      

      

    

    Exhibit 10.8

     

     

    
      OPTION
AGREEMENT

       

      TO
ACQUIRE MINING CONCESSION

       

      Camila
Breccia

       

      This
option agreement dated for reference 1st February 2008 is between Minera Farellón
Limitada, a Chilean company with an office at Baldomero Lillo 3260,
Vallenar, Huasco, III Region, Chile (“Farellón”), and Minera Polymet
Limitada, a Chilean company formed by Red Lake Exploration, Inc., a
Nevada corporation with a registered office at 711 South Carson Street, Suite 4,
Carson City, Nevada 89701 (“Polymet”).

       

      Whereas
Farellón has an option to purchase the Camila mining holdings in Chile from
Hernán Alcides Iribarren Torres and Ingenieria de Proyectos, Desarrollo,
Estudios y Servicios H.I.T Limitada, dated 7th December 2007, attached as
exhibit A (the “Camila Agreement”), and has agreed to assign the Camila
Agreement to Polymet, for valuable consideration, the receipt and sufficiency of
which are acknowledged, the parties agree that:

       

      
        	
                1.  

              	
                Farellón
      grants Polymet the option to buy the Camila Agreement on the following
      terms (“Option”):

              

      

      
        	
                a.  

              	
                The
      Option begins on the date of this agreement and ends on 21st November 2008
      (the “Term”).

              

      

      
        	
                b.  

              	
                As
      consideration for granting the Option, Polymet will pay Farellón $5,000
      when this agreement is signed and $50,000 by 23rd May
  2008.

              

      

      
        	
                c.  

              	
                Farellón
      will pay the patentes due at the end of March 2008 and any other property
      costs that are due during the Term to keep the Camila Agreement in good
      standing, and Polymet will reimburse Farellón on
  request.

              

      

      
        	
                d.  

              	
                Polymet
      can exercise the option at any time until the end of the Term by notifying
      Farellón in writing that it intends to exercise the Option and paying
      Farellón $50,000 by the close of business on 21st November
      2008.

              

      

      
        	
                e.  

              	
                The
      Option ends if Polymet fails to make any of the payments required during
      the Term or on 21st November 2008 if Polymet fails to notify Farellón that
      it intends to exercise the Option.

              

      

      
        	
                f.  

              	
                All
      currency amounts are stated in United States
  dollars.

              

      

       

      
        	
                2.  

              	
                When
      Farellón receives the exercise notice and payment required in paragraph
      1(d), Farellón will irrevocably assign the Camila Agreement to Polymet and
      Polymet will accept the assignment and assume all of Farellón’s rights and
      obligations under the Camila Agreement as though Polymet were the original
      party to the Camila Agreement.

              

      

       

      
        	
                3.  

              	
                The
      parties will use their best efforts to ensure that the terms of this
      agreement are legalized in Chile and recorded in the register of the
      Conservador de Minas in Vallenar as soon as reasonably
      possible.  In the case of any conflict between the provisions of
      this agreement and the provisions of the agreement recorded in Vallenar,
      the terms of the agreement recorded in Vallenar
  govern.

              

      

       

      
        	
                4.  

              	
                Farellón
      represents and warrants to Polymet
that:

              

      

      
        	
                a.  

              	
                It
      is duly formed under the laws of Chile and has the authority and right to
      assign the Camila Agreement.

              

      

      
        	
                b.  

              	
                It
      has made all of the payments required and fulfilled all other obligations
      under the Camila Agreement to the date of this
  agreement.

              

      

      
        	
                c.  

              	
                It
      has not assigned any interest in the Camila Agreement to any other
      party.

              

      

      
        	
                d.  

              	
                The
      Camila Agreement is in good standing and free of any claims or potential
      claims from third parties as of the date of this
  agreement.

              

      

       

      
        	
                5.  

              	
                Polymet
      represents and warrants that it is duly formed under the laws of Chile and
      has the authority to make this
agreement.

              

      

       

      
        	
                6.  

              	
                Time
      is of the essence of this agreement and of any amendment to
      it.

              

      

       

      
        
           

        

        
           

          
            
 

        

        
           

        

      

       

      
        	
                7.  

              	
                If
      either party must perform under this agreement on a day that is not a
      business day in Chile, then the party must perform on the next business
      day in Chile.

              

      

       

      
        	
                8.  

              	
                Any
      notice that must be given under this agreement must be in writing and
      delivered by hand or overnight courier to the party at the address given
      for the party on page 1or transmitted by fax or email to the fax number or
      email address that the parties will give each other.  Notice is
      deemed to have been received when it is delivered or transmitted if it is
      delivered or transmitted during normal business hours in Chile and on the
      next business day if it is delivered or transmitted outside of normal
      business hours.

              

      

       

      
        	
                9.  

              	
                This
      agreement is the entire agreement between the parties and its terms may be
      waived or amended only in writing.  No waiver of any term
      operates to waive any other term.

              

      

       

      
        	
                10.  

              	
                This
      agreement does not create a partnership or joint venture or any other kind
      of business association between the parties and neither party has the
      power to bind the other in any way.

              

      

       

      
        	
                11.  

              	
                Polymet
      may not assign its interest in this agreement without Farellón’s written
      consent.

              

      

       

      
        	
                12.  

              	
                This
      agreement is binding on the parties and upon their respective successors
      and assigns.

              

      

       

      
        	
                13.  

              	
                This
      agreement must be construed in accordance with the laws of Chile on the
      same terms as provided in the Purchase
  Agreement.

              

      

       

      
        	
                14.  

              	
                No
      finding by a court of competent jurisdiction that any provision of this
      agreement is invalid, illegal, or otherwise unenforceable operates to
      impair or affect the remaining provisions which remain effective and
      enforceable.

              

      

       

      
        	
                15.  

              	
                This
      agreement may be signed in counterparts and delivered to the parties by
      any means; and the counterparts together are deemed to be one original
      document.

              

      

       

      The
parties’ signatures below are evidence of their agreement.

       

      
        
          
            	Minera
      Farellón Limitada	 	 	Minera Polymet
      Limitada	 
	 	 	 	 	 
	
                    /s/ Kevin
      Robert Mitchell

                  	 	 	
                    /s/ Kevin
      Robert Mitchell

                  	 
	
                    Kevin Robert Mitchell

                     

                    
                      Signed
      on February 1, 2008

                    

                  	 	 	
                    Kevin Robert Mitchell

                     

                    
                      Signed
      on February 1, 2008

                    

                  	 

          

        

         

         

         

        2ex_10-9.htm

    
      

      

    

    Exhibit
10.9

    
    

     

    
      	EDUARDO
      AVELLO CONCHA 	 	
               Exhibit A

            
	 	 	 
	    NOTARY
      PUBLIC	 	 
	 	 	 
	Orrego Lucio
      0153 – Providencia	 	 
	 	 	 
	OT. No.
      24.644.-	 	 
	 	 	 
	 	 	 
	OD 	
              DIGEST No.
      19.600-2007

            	
              5c

            

    

    
 

    
      Seal:
Eduardo Avello Concha, Notary Public, Notary No. 27, Santiago,
Initials

      

      CONTRACT
FOR THE OPTION TO PURCHASE MINING HOLDINGS

      

      INGENIERIA
DE PROYECTOS, DESARROLLO, ESTUDIOS Y SERVICIOS

      H.I.T.
LIMITADA AND OTHERS

      

      TO

      

      MINERA
FARELLON LIMITADA

      

      In
Santiago de Chile, the seventh of December of two thousand and seven, before me,
EDUARDO AVELLO CONCHA, Attorney, Titleholder of the Twenty-Seventh Notary of
Santiago, with an office at Orrego Luco No. zero one hundred and fifty-three,
Providencia, appeared: HERNAN ALCIDES IRIBARREN TORRES, Chilean, married, mining
engineer, National I.D. No. four million three hundred and twenty thousand five
hundred and one dash three, acting on his own behalf and, in addition, as the
representative of INGENIERIA DE PROYECTOS, DESARROLLO, ESTUDIOS Y SERVICIOS
H.I.T. LIMITADA (Project Engineering, Development, Studies and Services H.I.T.
Limited), a company engaged in what is indicated in the company name, Sole
Taxation List No. seventy-seven million two hundred and ninety-two thousand two
hundred dash zero, both with the address Sucre two hundred and twenty, Office
No. five hundred and ten, Commune of Antofagasta, hereafter jointly called “the
Offering Party”; and KEVIN ROBERT MITCHELL, Canadian, married, separation of
goods, miner, I.D.

      
        
           

        

        
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      Document
for Foreigners No. fourteen million four hundred and ninety-eight thousand nine
hundred and seventeen dash one. He is representing the company, MINERA FARELLON
LIMITADA, a Chilean company engaged in what is indicated in the company name,
Sole Taxation List No. seventy-six million eight hundred and fourteen thousand
one hundred and seventy dash three, both with the address Prat one thousand and
fifty-one, Office No. four, commune of Vallenar, hereafter known as “Minera
Farellon”. The persons appearing are of legal age and verified their identity
with the above-mentioned I.D. Documents and stated: That in virtue of this
document, they have come to execute the following contract for the option to purchase mining holdings, in agreement with what is
stipulated in Articles one hundred and sixty-nine and the others that are
applicable of the Mining Code. FIRST ARTICLE:
Individualization of the Holdings: A) Hernan Alcides Iribarren Torres, as
the representative of Ingenieria de Proyectos, Desarrollo, Estudios y Servicios
H.I.T. Limitada, hereafter and indistinctly called “H.I.T. LTDA.”, declares that
the company that he is representing is the sole and exclusive owner of the
following mining holdings: One) “CAMILA DOS, Uno al Veinte”, located in Quebrada
Jilguero, Commune of Vallenar, Province of Huasco, Third Region of Atacama, the
declaration of which is registered on Page No. one thousand nine hundred and
twenty-one, No. one thousand five hundred and thirty-six of the Registry of
Discoveries of the Conservator of Mines of Vallenar for the year two thousand
and five; Two) “CAMILA TRES, Uno al Veinte”, located in Quebrada Jilguero,
Commune of Vallenar, Province of Huasco, Third Region of Atacama, the
declarations of which are registered on the back of Page No. two thousand five
hundred and fifty-three, No. two thousand and forty-two of the Registry of
Discoveries of the Conservator of Mines of Vallenar for the year two thousand
and six; Three) “CAMILA CUATRO, Uno al Veinte”, located in Quebrada Jilguero,
Commune of Vallenar, Province of Huasco, Third Region of Atacama, the
declaration of which is registered on Page No. two thousand five hundred and
fifty-two, No. two thousand and forty-one of the Registry of Discoveries of the
Conservator of Mines of Vallenar for the year two thousand and six; B) Hernan
Alcides Iribarren Torres declares, in turn, that he is the sale and exclusive
owner of the mining holdings “CAMILA, Uno al Veinte”, located in the Sector of
Quebrada El Jilguero, Commune of Vallenar, Province of Huasco, Third Region of
Atacama, the measuring
document of which is registered on Page No. thirteen, No. three, of the Property
Registry of the Conservator of Mines of 

       

      
        
          
          

        

        
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      Vallenar
for the year two thousand. The mining holdings in the process of constitution
indicated in Letter A, and the mining holdings detailed in Letter B of this
article shall be called, hereafter and jointly, “Mining Holdings”. Included in
this denomination shall also be the concessions for exploitation that could be
constituted from the detailed declarations registered in Letter A referred to
above. Once they are registered, the measurement document and the constitutive
decision for the holdings that originate from the above-mentioned declarations,
this option contract shall be noted in the margin of these registrations. SECOND ARTICLE: One. Option
Offer: In virtue of this document, Hernan Alcides Iribarren Torres, for
himself and as the representative for which he is appearing, grants to Minera
Farellon the option to purchase and irrevocably offers to sell, cede and
transfer to Minera Farellon the mining holdings detailed in the First Article of
this document. Two.
Price of the Purchase/Sale Offered: The price of the purchase/sale
offered regarding each one of the mining concessions detailed in the article
above, is the equivalence in pesos national currency to the amount of three
hundred thousand dollars of the United States of America, which comes to a total
price for the purchase/sale offered of one million and two hundred thousand
dollars of the United States of America. Notwithstanding the above, in the case
where the option to purchase the Mining Holdings is exercised before the term
for the expiration of the purchase option indicated in No. Three below, the
price of the purchase/sale offered shall increase in the amount of the price of
the option that has not accrued interest and been paid, in agreement with what
is stipulated in the Fifteenth Article. The mining holdings and the minerals
that they contain shall be sold and transferred with all of their uses, rights,
customs and easements, free from all encumbrances, prohibitions, resolutory
conditions, embargos or pending litigation, as well as any other impediment
whatsoever that could affect their free use, enjoyment and disposition; free
from all superposition, and with their mining patents totally paid. The vendor
or Offering Party is responsible for the Warranty of Title and Right of
Possession according to the Law. Three. Option Term:
The term of the option, within which Minera Farellon shall be able to freely
accept or refuse the purchase/sale offer of the holdings, shall expire the
seventh of December of two thousand and nine. Four: Option Price:
The price of
the option is the sum in pesos, national currency, equivalent to two hundred
thousand 

       

      
        
          
          

        

        
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      dollars
of the United States of America, which shall be paid under the terms that are
indicated in the Fourth Article of this document. THIRD ARTICLE: Mr.
Kevin Robert Mitchell, as the representative of Minera Farellon Limitada,
accepts the stipulations of this contract for the company that he is
representing under the terms of Article one hundred and sixty-nine and the
others that are applicable of the Mining Code, in virtue of the fact that the
Second Article grants Minera Farellon the power to accept or reject the offer
made by the Offering Party. Therefore, Minera Farellon shall be able, at any
time whatsoever counted from the date of this document and up to the expiration
of the term indicated in No. Three of the Second Article of this document, to
decide to accept the purchase/sale of the Mining Holdings under the terms
indicated in this contract. FOURTH ARTICLE. One) Price
of the Option to Purchase the Mining Holdings: The price of the option
contract to purchase the Mining Holdings is the amount of two hundred thousand
dollars of the United States of America, payable in pesos, national currency, in
the following amounts and payment periods: /a/ the amount of fifty thousand
dollars of the United States of America, which Minera Farellon shall pay on the
seventh of June of two thousand and eight to Hernan Alcides Iribarren Torres,
for himself and as the representative of H.I.T. LTDA., in the proportions of a
fourth part for the first and three quarters for the second, which are the
proportions into which all of the payments that are made in agreement with this
document shall be distributed; /b/ the amount in pesos national currency
equivalent to the sum of fifty thousand dollars of the United States of America,
which shall be paid on the seventh of December of two thousand and eight; and
/c/ the amount in pesos national currency equivalent to the sum of one hundred
thousand dollars of the United States of America, which shall be paid on the
seventh of June of two thousand and nine. Two) Form and Place of Payment of
the Quotas: The quotas indicated in Letters /a/, /b/, and /c/ above shall
be paid on their expiration date, through the delivery to the Notary that is
authorizing this document, or to whoever substitutes, replaces him or carries
out his duties, through a bank Sight Draft, payable to the order of Hernan
Alcides Iribarren Torres, or to the individual that replaces him as the
representative of H.I.T. LTDA, or to the common representative of the
successors, continuers or transferees, for the corresponding amount. The Notary
shall not deliver
the above-mentioned Sight Draft unless the 

       

      
        
          
          

        

        
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      corresponding
public document is signed as the receipt. The Notary rights that are generated
because of these payments shall be paid by Minera Farellon. Three) Cessation of the obligation
of future payments in the event of a withdrawal: If Minera Farellon
withdraws from accepting the purchase/sale offer that this document refers to,
before the expiration of any of the terms indicated in Letters /a/, /b/, and /c/
above, the obligation that Minera Farellon has to pay the remaining quotas of
the option that have not accrued interest on the date of the withdrawal shall
cease immediately, without prejudice to what is stipulated below in this
document. FIFTH
ARTICLE. Acceptance of the Offer: If Minera Farellon decides to accept
the offer within the term agreed on to do so, the company shall state the desire
to do so through a public document drawn up in this same Notary declaring that
it wishes to accept the offer. With the same objective, Minera Farellon shall
deliver to the Notary that authorizes this document, or to the individual that
substitutes, replaces him or carries out his duties, a bank Sight Draft made out
to the order of Hernan Alcides Iribarren Torres, or to the person that replaces
him as the representative of H.I.T. LTDA., or the common representative of the
successors, continuers or transferees for the amount in pesos national currency
equivalent to two hundred thousand dollars of the United States of America,
readjusted as necessary, according to what is agreed on in the Sixth Article
below, the amount that corresponds to the Fixed Part of the price for the
purchase/sale. According to what is indicated in the Second Article No. Two of
this document, this amount shall increase in the amount of the quotas of the
price for the option that could still be unpaid, in the event that Minera
Farellon accepts the offer of the sale and exercises the option to purchase the
Mining Holdings prior to the dates indicated in Letters /a/, /b/, and /c/ of the
Fourth Article. The Notary shall not deliver the above-mentioned Sight Draft
unless the corresponding public document is signed as the receipt. Minera
Farellon shall pay the Notary fees that are generated because of this payment.
The corresponding Conservator of Mines, with the copy of this document before
him, verifying the delivery of the above-mentioned Sight Draft to the
appropriate Notary, and a copy of the document regarding the acceptance that
Minera Farellon is granting, shall register the Mining Holding indicated in the
acceptance document in the name of Minera Farellon Limitada. All of this is in
virtue of what is stipulated in the final section of Article
one hundred and sixty-nine of the Mining Code according to which, for a contract
for the option to purchase the rights especially regulated by said 

       

      
        
          
          

        

        
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      Code, it
shall be sufficient to have the sole acceptance of the irrevocable offer for the
purchase/sale offered to be perfected, with the sole requirement being that the
offer as well as the acceptance are verified in a public document. SIXTH ARTICLE. Payment of
Purchase/Sale Price: The price of the purchase/sale of the Mining
Holdings is the amount of one million and two hundred thousand dollars of the
United States of America, which shall be paid readjusted in the same proportion
that the Consumer Prices Index of the United States of America has varied,
taking as a basis the index appearing in the publication of the same immediately
prior to the date of this document and comparing it with the index appearing in
the publication immediately prior to the date of the corresponding payment. If
the index is not available, the method that shall be applied is the method of
the calculation of the variation of the internal prices of the United States of
America that in the corresponding opportunity is employed in Chile and is more
favourable to the creditor. The price of the purchase/sale is made up of the
part that is called the “Fixed Part”, and the other part that is called the
“Varied Part”: /a/ Fixed Part: The fixed Part of the purchase/sale is the sum in
pesos equivalent to two hundred thousand dollars of the United States of
America, which Mineral Farellon shall pay at the moment of the exercising of the
option to purchase, with the corresponding readjustment, in the manner expressed
in the Fifth Article of this document; and /b/ Varied Part: The Varied Part of
the purchase/sale price is the amount in pesos equivalent to the sum of one
million United States Dollars that shall be paid, duly readjusted, once Minera
Farellon initiates the exploitation of any of the Mining Holdings whatsoever,
through monthly payments until the amount of the one million dollars duly
readjusted is paid, from the royalties – hereafter the “Royalties” – of six
percent of the value corresponding to the net sale of minerals that are
extracted from the Mining Holdings and are paid by the National Mining Company,
hereafter and indistinctly called “Enami” or by any other purchaser whatsoever.
Nevertheless, in the event that the term of four year counted from the date of
this option contract transpires, whether the exploitation on the mining holdings
purchased has begun or not, and the total amount of the Varied Part of the price
of the purchase/sale has not been paid, any unpaid amount of the total amount
shall be payable immediately. As of
that moment, the term shall be considered to have expired and interest shall be
accrued in favour of the creditors, or those 

       

      
        
          
          

        

        
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      that
represent those rights. The interest that shall be paid is the maximum interest
for credit obligations in foreign currency that the law allows, to be stipulated
to the date on which the indicated four-year period ends. This interest shall
run from the date indicated on the entire unpaid amount, up to the date of the
total payment. The payment and liquidation of the Royalties shall be effected
monthly within the ten days following the date on which Enami or another
purchaser has made the respective payment. For this purpose, Minera Farellon
shall prepare the report regarding the monthly payment of the Royalties
including sufficient information to determine the amount, including the
calculation of the readjustment at the applicable rate, which shall be delivered
to Hernan Alcides Iribarren Torres, or to the individual that replaces him as
the representative of H.I.T. LTDA., or to the common representative for their
successors, continuers or transferees, jointly, with the amount corresponding to
the Royalty. If there are no observations regarding the payment within the ten
working days following the delivery by Minera Farellon, it shall be understood
that final and total approval is being granted for said liquidation and the
corresponding payment. Included in the sufficient information that shall have to
be provided by Minera Farellon, shall be the invoices for the sale to Enami or
another purchaser, together with the respective shipping logs, and a legalized
copy from the source employed for the calculation of the readjustment applied to
the quota for the balance of the price. In the case where there are observations
regarding said documents, upon a request from the interested parties, Minera
Farellon shall have to authorize them to have access to the information
regarding the same. At any time whatsoever before the four years transpire from
the date of this document, and while the payments have not been completed for
the amount indicated in Letter /b/ of this clause, Minera Farellon shall be able
to terminate the obligation of the payment of Royalties indicated above, paying
Hernan Alcides Iribarren Torres, or to the common representative for their
successors, continuers or transferees, the difference that exists between the
amount effectively paid to that date on account for the Royalties and what
remains to be paid to complete the payment of one million dollars of the United
States of America, indicated in Letter /b/ of this article along with the
corresponding readjustment. SEVENTH ARTICLE.
Irrevocability: This contract shall have the nature of a contract for
the
option to purchase mining holdings

       

      
        
          
          

        

        
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      indicated
in Article one hundred and sixty-nine of the Mining Code. It is irrevocable and
the Offering Parties shall not be able to reconsider nor withdraw their offer.
Therefore, it shall be sufficient to have the sole acceptance of MINERA FARELLON
LIMITADA, at any time whatsoever, of the irrevocable offer that is prepared in
this legal action, for the purchase/sale to be perfected. Nevertheless, if the
term of effectiveness of the option has expired, and Minera Farellon has not
accepted the offer of the sale of the Mining Holdings that is referred to in
this document, it shall be understood that Minera Farellon has decided not to
exercise the option that is granted in this document. If any of the quotas of
the price of the option are not paid within the terms indicated in the Fourth
Article of this document, it shall be understood that Minera Farellon is
withdrawing from the option, without any unpaid amount of the quota being
payable. If any of the events stated above occur, the Offering Party shall be
able to request the cancellation of the registrations that may have been made in
virtue of this contract. EIGHTH ARTICLE.
Authorizations: Hernan Alcides Iribarren Torres, for himself or as the
representative of H.I.T., LTDA. irrevocably authorizes Minera Farellon, while
the term for exercising the option that is granted herein is pending, to be able
to carry out on the Mining Holdings detailed in this document, at their own
exclusive cost and risk, the explorations, examinations and prospecting that it
wishes to carry out and are legally forthcoming, being able to carry out all of
the works and projects with the express declaration that Minera Farellon shall
be able to exercise all of the active easements that benefit said holdings, with
the Offering Party obligated to apply for them, to be paid by Minera Farellon,
if requested by the company because they are deemed to be necessary. Minera
Farrellon shall be exclusively responsible for the mining works of exploration
that it carries out on the holdings, as well as the effects that are forthcoming
from said works, duly fulfilling all of the legal dispositions that are
applicable in this regard, and expressly prohibited from initiating the
exploitation of the Mining Holdings. NINTH ARTICLE. No
Restitution: If Minera Farellon decides not to accept the offer that is
being made regarding the sale of the Mining Holdings, the obligation regarding
the payment of any type whatsoever according to what is indicated in the final
part of the Fourth Article shall cease immediately, but Hernan Iribarren Torres
and H.I.T. LTDA. Or its successors, continuers or transferees, when applicable,
shall not have the obligation of returning
the payments corresponding to the price of the option that may have already been
received. These shall be retained 

       

      
        
          
          

        

        
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      as the
sole and exclusive indemnity for damages of any type whatsoever, in kind or in
amount, that could have been caused by the fact of having been impeded from
exploring and exploiting, as well as from negotiating these holdings with third
parties during the life of the option, or caused by the decision of Minera
Farellon not to accept the offer or derived from any other causes or reasons
whatsoever related to the contract contained in this document. TENTH ARTICLE.
Withdrawal: At any time whatsoever, Minera Farellon shall be able to make
a declaration through a public document, which shall have to be granted in this
same Notary Office, which shall be noted in the margin of the original version
of this document, expressing the decision not to accept the offer that is being
made in this document and, from the date of this marginal notation, all of the
obligations contracted in virtue of this document shall cease for Minera
Farellon, of any type whatsoever, particularly the obligations regarding making
the payments that are referred to in the Fourth Article of this document. In the
case of a withdrawal, Minera Farellon shall respective provide for Hernan
Alcides Iribarren Torres and H.I.T. LTDA., their successors, continuers or
transferees or their own representatives with sufficient powers, without any
cost whatsoever, all of the information that may have been obtained from the
exploration that may have been made on the Mining Holdings. This information
shall include the reports that contain the complete or partial results from the
studies – if any were done – geological, geochemical, metallurgical, and
hydrological, exploration reports, geophysical plans and reports and all of the
interpretive information obtained from the works of exploration and exploitation
carried out. None of what is indicated in this article may be interpreted as
Minera Farellon having the obligations to carry out studies or write reports,
whatever the nature of these may be. ELEVENTH ARTICLE.
Maintenance of Holdings: Hernan Alcides Iribarren Torres and H.I.T.,
Ingenieria Ltda. shall have to adopt, at their own exclusive cost, all of the
judicial and extra-judicial measures that may be necessary to duly keep in
effect the rights emanating from the Mining Holdings detailed in Letters A and B
of the First Article of this document and to defend these rights and minerals
that the holdings contain from any pretensions of third parties whatsoever.
H.I.T. Ingenieria Ltda. shall, in addition, have to continue to process the
judicial files for the constitution of the holdings in Letter
A of the First Article, until they are duly constituted. Without 

       

      
        
          
          

        

        
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      prejudice
to what is stipulated above, Minera Farellon Limitada shall respectively
reimburse Hernan Alcides Iribarren Torres and H.I.T. Ingenieria Ltda. for all of
the amounts paid for the concept of the payment of mining patents that support
the holdings and mining rights object of this option, which were duly incurred
during the life of the option. TWELFTH ARTICLE.
Prohibitions, Restrictions and Suspension of Terms: One: The Offering
Party promises to not sell, encumber, transfer, promise to sell, mortgage, grant
an option or execute documents or contracts of any type whatsoever regarding the
Mining Holdings that are referred to in this document, regarding the mining
rights that originate from them or regarding the minerals that they contain,
while the term for Minera Farellon to exercise the respective option is in
effect. If in spite of the above prohibitions, any other document is executed or
any contract whatsoever is executed that limits or affects, or could limit or
affect the holding, possession or ownership of the Mining Holdings or the
minerals that they contain, the document or contract shall be resolved ipso
facto once Minera Farellon accepts the irrevocable offer that is being made in
this document. All of this is in agreement with Article one hundred and
sixty-nine of the Mining Code, without prejudice to the other rights that
emanate from this contract and the law for Minera Farellon. Two: The Offering
Party promises to maintain strict confidentiality regarding all of the
information, technical data that could be used in the exploration and know-how
during the life of the option contained in this document, as well as all of the
other information related to the works that Minera Farellon or its contractors
develop on the Mining Holdings. This obligation regarding confidentiality shall
subsist with respect to the mining concessions that Minera Farellon acquires
through the exercising of the option to purchase. Three: Without
prejudice to what is stipulated in No. One of this Article, the Offering Party
promises, during the life of the option that is indicated in this document, to
not present new petitions or manifestations, or constitute new concessions for
exploration and/or exploitation in the are made up of the Mining Holdings
detailed in the First Article of this document, without prior written consent
from Minera Farellon. Four: Hernan Alcides
Iribarren Torres and H.I.T. LTDA. shall not be able to totally or partially cede
or transfer the rights and authorizations that are indicated in this contract,
without prior written consent from Minera Farellon. Five: Minera Farellon
shall, at any time whatsoever

       

      
        
          
          

        

        
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      with a
written consent from the Hernan Alcides Iribarren Torres and/or H.I.T. LTDA.,
sell, cede, transfer or in any other way whatsoever exercise of all or part of
the rights in this contract, if and when the purchaser or the transferee
declares in the contract that serves as the title for the acquisition that it
will exactly fulfill each and every one of the obligations that Minera Farellon
has contracted in this document, under the same terms, as if this contract had
been executed by said transferee, promising to impose equal obligations on any
later transferee whatsoever. Six: The parties
agree that in the event that due to any reason outside of their control,
including an Act of God contemplated in the forty-fifth Article of the Civil
Code, Minera Farellon is impeded from carrying out the works of exploration,
examination and prospecting on the Mining Holdings, the term indicated in the
Second Article, No. Three and the Fourth Article, and the respective
obligations, shall be suspended while the impediment lasts. The above-mentioned
term shall be extended for all of the days in which they were suspended. For the
purpose of the calculation of the suspension and later extension of the terms,
in the event that, due to any reason outside of their control, including the
above-mentioned Act of God, Minera Farellon is impeded from carrying out any of
the work indicated above, the company shall have to report said circumstances in
writing to the Offering Party, through a Notary Public, at the address indicated
in the appearance, no later than within forty-eight hours following the
manifestation of the impediment. Without prejudice to the above, the parties
promise to make their best efforts to quickly overcome the impediments that
occur, which limit or disturb the work that Minera Farellon pretends to carry
out on the Mining Holdings. No later than within the forty-eight hours after the
day on which Minera Farellon starts to work once again, the company shall send a
written report to the Offering Party reporting this, in the manner and to the
address indicated above, with the understanding that the suspension was in
effect from the day of the manifestation of the impediment up to the day on
which Minera Farellon started to work once again, duly extending the terms
indicated for all of the days that transpired between the manifestation of the
impediment and the date on which the work was begun once again. THIRTEENTH ARTICLE. Rate of
Exchange: The amounts of money in this document that are expressed in
dollars of the United States of America shall be paid in pesos, national
currency, at the rate of exchange called the “observed dollar” published by the
Central Bank of Chile in the
Official Gazette, according to No. six of the First Chapter of the Compendium of
Norms for 

       

      
        
          
          

        

        
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      International
Rates of Exchange. FOURTEENTH ARTICLE.
Address: For all legal purposes, the parties establish their address in
the city and commune of Santiago. FIFTEENTH ARTICLE.
Expenses: Minera Farellon shall pay the expenses for the Notary,
Conservator and others, and the taxes that are originated because of the
granting of this option contract, and for the documents that must be granted due
to or because of the fulfillment of the obligations that are derived from the
same. SIXTEENTH
ARTICLE. Arbitration: Any difficulties whatsoever that arise between the
parties, related to the interpretation, application, fulfillment, validity,
period of effectiveness, termination, resolution, scope, efficiency or holes in
this option contract and the one for the proposed purchase/sale shall be
resolved through mixed arbitration, in agreement with the norms of the
Regulation for the Arbitration Centre of the Chamber of Commerce of Santiago,
A.G., which the contracting parties declare that they know and accept. The
parties grant an irrevocable Power of Attorney to the Chamber of Commerce of
Santiago A.G. so that, upon a written request from any of them, they may
designate an arbitrator from those that are part of the arbitration body of the
Arbitration Centre of the Chamber of Commerce. No recourse whatsoever shall be
able to be brought against the resolution of the arbitration, therefore, the
parties expressly renounce them, except for the recourse of making a complaint.
The arbitrator shall be especially empowered to resolve all matters related to
their competence and/or jurisdiction. SEVENTEENTH ARTICLE. Power
of Attorney: The holder of an authorized copy of this document is
empowered to require the registrations, inscriptions and notations that are
pertinent in the respective Conservator. EIGHTEENTH ARTICLE. Special
Power of Attorney: The vendor and the purchaser grant a Special Power of
Attorney to the attorneys Enrique Benitez Urrutia and Gonzalo Nieto Valdes, both
with the address Avenida Isidora Goyenechea three thousand two hundred and
fifty, ninth floor, Las Condes, Santiago, so that either one of them may grant
all of the complementary documents that may be necessary in order to rectify any
error or omission whatsoever existing in the clauses related to the correct
individualization of the Mining Holdings object of this contract, registration
of control, method for acquisition, etc., with the sole purpose that the
Conservator of Real Estate may make the registrations and annotations that may
be forthcoming. The holder of the Power of
Attorney is especially 

       

      
        
          
          

        

        
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      empowered
to sign all types of applications, declarations, rough drafts, public and
private documents that may be necessary for the fulfillment of the commitment.
The authorization for Kevin Robert Mitchell to represent Minera Farellon
Limitada is verified in the public document for the constitution of said
company, dated the twenty-second of February of two thousand and seven, granted
before the same Notary. The authorization for Hernan Alcides Iribarren Torres to
represent the company, Ingenieria de Proyectos, Desarrollo, Estudios y Servicios
H.I.T. Limitada, is verified in the Seventh Clause of the Public Document for
the constitution of said company, dated the twentieth of March of the year two
thousand, granted before the Notary of Antofagasta, Maria Soledad Santos Muñoz.
The authorization document mentioned above is not inserted because the parties
and the Notary that is authorizing know the document. As verification, after
being read, the persons appearing signed. A copy is given. I Swear.
Initials.

      

      One
Notary Seal and Signature on the front of each page. Eduardo Avello Concha,
Notary Public, Notary No. 27, Santiago.

      

      Signature

      HERNAN
ALCIDES IRIBARREN TORRES

      For
Ingenieria de Proyectos, Desarrollo, Estudios y Servicios H.I.T.
Limitada.

      
        	I.D. No.
      77.292.200-0	Fingerprint

      

       

       

      Signature

      HERNAN
ALCIDES IRIBARREN TORRES

      
        
          	I.D. No.
      4.320.501-3 	Fingerprint

        

         

      

       

      Signature

      KEVIN
ROBERT MITCHELL

      Citizenship
I.D. No. 14.498.917-1

      Signing
for: MINERA FARELLON LIMITADA

      
        
          
            	I.D. No.
      76.814.170-3 	Fingerprint

          

        

      

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

       

      In the
right margin: Document granted based on the Minutes drawn up by the attorney,
Alejandra Perez Rossi.

      

      Square
Stamp: Digest No. 19600-2007

       

      
        
          
          

        

        
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      RICARDO
OLIVARES PIZARRO

      CONSERVATOR
OF MINES

      VALLENAR

      

      THIS
CONSERVATOR OF MINES CERTIFIES THAT ON THIS DATE, ON PAGE No. 6, No. 2, OF THE
REGISTRY OF MORTGAGES AND ENCUMBRANCES FOR THE YEAR 2008, A CONTRACT WAS
REGISTERED FOR THE OPTION TO BUY MINING HOLDINGS GRANTED BY INGENIERIA DE
PROYECTOS, DESARROLLO, ESTUDIOS Y SERVICIOS H.I.T. LIMITADA AND OTHERS TO MINERA
FARELLON LIMITADA, AND ON PAGE No. 1, No. 1, OF THE REGISTRY OF PROHIBITIONS AND
INTERDICTIONS FOR THE YEAR 2008, A PROHIBITION WAS REGISTERED IN FAVOUR OF
MINERA FARELLON LIMITADA REGARDING THE FOLLOWING MINING HOLDINGS CALLED: 1)
“CAMILA DOS, Uno al Veinte”; 2) “CAMILA TRES, Uno al Veinte”; 3) “CAMILA CUATRO,
Uno al Veinte”, and 4) “CAMILA, UNO AL VEINTE”. IN ADDITION, A NOTATION WAS MADE
IN THE MARGIN REGARDING THE FOLLOWING REGISTRATIONS: A) PAGE No. 1921, No. 1536
OF THE REGISTRY OF DISCOVERIES FOR THE YEAR 2005; B) PAGE No. 2553 BACK, No.
2042 OF THE REGISTRY OF DISCOVERIES FOR THE YEAR 2006; C) PAGE No. 2552, No.
2041, OF THE REGISTRY OF DISCOVERIES FOR THE YEAR 2006, AND D) PAGE No. 13, No.
03, OF THE PROPERTY REGISTRY FOR THE YEAR 2000, ALL OF THESE OF THE CONSERVATOR
OF MINES.

      VALLENAR,
THE 7th OF
FEBRUARY OF 2008.

      

      Signature

      

      Seal:
Ricardo Olivares Pizarro, Notary and Conservator of Commerce and Mines,
Vallenar

       

       

      15

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