Document:

Purchase Contract [203-10-27070-P] effective December 3, 2010

 Exhibit 10.2 

 
 

 
 DON DAVID GOLD S.A. DE C.V. 
 Macedonio Alcala No. 201-105 
 Col Centro, Oaxaca, Oaxaca 

Mexico 
 Lucerne, 3 December 2010 / ERF /
ak 
  

			
	  

PURCHASE CONTRACT
  
	  	  

203-10-27070-P

 

 This contract is concluded on the 27th day of October 2010 (the “Effective Date”) between DON DAVID GOLD S.A. DE C.V., Macedonio
Alcala No. 201-105, Col Centro, Oaxaca, Oaxaca, Mexico (the “Seller”) and TRAFIGURA BEHEER B.V., Amsterdam, Branch Office Lucerne, Zürichstrasse 31, 6002 Lucerne, Switzerland (the “Buyer”).

  

	1.	SCOPE OF THE CONTRACT 

 The Seller
agrees to sell silver/gold concentrate and the Buyer agrees to buy silver/gold concentrate at the terms and conditions set out below: 
  

	2.	DEFINITIONS 

  

			
	1 kilogram means:	    	1,000 grams;
		
	1 ounce means:	    	1 troy ounce of 31.1035 grams;
		
	1 pound means:	    	453.593 grams;
		
	1 ton means:	    	1 metric ton of 1,000 kilograms or 2204.62 lbs;
		
	1 unit means:	    	1% of the dry net weight;
		
	Affiliates means:	    	in relation to any company or corporation, a Subsidiary or Holding Company of that company or corporation or any other Subsidiary of that company or corporation or of that
Holding Company;
		
	Banking Day and Business Day mean:	    	any day except a Saturday or Sunday on which banks in the city of New
		    	York, New York, USA, are generally open for the conduct of business;
		
	Holding Company:	    	has the meaning given to it in the definition of Subsidiary;
		
	IMO/BC Code means:	    	the International Maritime Organisation Code of Safe Practice for Solid Bulk Cargoes prevailing at the time of delivery;
		
	INCOTERMS 2000 means:	    	the 2000 edition of the standard trade definitions published by the
		    	International Chamber of Commerce;
		
	LBMA means:	    	London Bullion Market Association;
		
	LME means:	    	London Metal Exchange;
		
	Subsidiary means:	    	a company or corporation which, in relation to another company or corporation (a “Holding Company”): (a) is controlled, directly or indirectly, by the Holding Company;
(b) more than half the issued share capital of which is beneficially owned, directly or indirectly by the Holding Company; or (c) which is a Subsidiary of another Subsidiary of

 TRAFIGURA BEHEER B.V., AMSTERDAM, BRANCH
OFFICE LUCERNE 
 REGISTERED AND MAILING
ADDRESS: ZÜRICHSTRASSE 31, POSTFACH 4268, 6002 LUCERNE, SWITZERLAND 

					
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		  	the Holding Company; and for this purpose, a company or corporation shall be treated as being controlled by a Holding Company if the Holding Company is able to direct its affairs
and/or to control the composition of its board of directors or equivalent body;
		
	US$ means:	  	the lawful currency of the United States of America;
		
	Valid TML means:	  	Transportable Moisture Limit valid for the current shipment;
		
	Valid FMP means:	  	Flow Moisture Point valid for the current shipment.

  

	3.	QUANTITY 

 100% (one hundred percent) of
the El Aguila production of silver/gold concentrate produced during November and December 2010, estimated to be approximately 300 (three hundred) wet metric tons per month (the “Concentrate”). 

 

	4.	QUALITY 

 El Aguila gold/silver
concentrate, assaying as follows: 
  

			
	Gold	  	200-400 g/dmt
	Silver	  	3,000-5,000 g/dmt
	Arsenic	  	1,500-2,000 g/dmt
	Antimony	  	200-300 g/dmt
	Bismuth	  	15-30 g/dmt
	Mercury	  	0.05-0.10 g/dmt
	Tellurium	  	30-45 g/dmt

 The Concentrate shall otherwise be free from deleterious impurities harmful to the smelting and / or refining processes
and shall be able to withstand the voyage, upon all customary forms of transportation, to the destination intended by the Buyer. The Concentrate shall conform to all local regulations and the IMO / BC Code of Safe Practice for Solid Bulk Cargoes.
Seller shall promptly present valid TML, FMP and moisture certificates if so requested by Buyer. 
  

	5.	SHIPMENT 

 Shipment is scheduled as
follows: 
  

	 	•	 	 Approximately 300 (three hundred) metric tons during November 2010; and 

 

	 	•	 	 Approximately 300 (three hundred) metric tons during December 2010. 

 

	6.	DELIVERY 

 FOB (Incoterms 2000) one safe
port and berth Manzanillo, Mexico or parity. 
 For the avoidance of doubt: a) all loading costs are for Seller’s account; and b) Seller
shall be responsible for custom clearing the Concentrate for export from Mexico and all customs clearance and export charges shall be for Seller’s account. 

  
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	7.	PRICE 

 The price per dry metric ton of
the Concentrate shall be the sum of the payments less the deductions specified below: 
 Payments 

Silver 
 Pay for 95% (ninety-five percent)
of the final silver content, subject to a minimum deduction of 50 (fifty) grams per dry metric ton of the Concentrate at the official LBMA spot quotation for silver, as published in the Metal Bulletin in US$ and averaged over the quotational period.

 Gold 
 Pay for 95%
(ninety-five percent) of the final gold content, subject to a minimum deduction of 1.5 (one point five) grams per dry metric ton of the Concentrate and at the mean of the official LBMA PM quotation for gold, as published in the Metal Bulletin in US$
and averaged over the quotational period. 
 Deductions 
 Treatment Charge 
 US$ 300.00 (US$ three hundred) per dry metric ton of the Concentrate
delivered FOB Manzanillo, Mexico or parity. 
 Refining Charges 

 

			
	Silver:	    	  US$ 1.20 (US$ one point two zero) per payable ounce of silver.

 This refining charge is based on a silver price of US$15/oz and shall be increased by US$0.05 for each US$1.0 dollar that
the final silver prices is over US$15/oz. 
  

			
	Gold:	    	    US$ 8.00 (US$ eight) per payable ounce of gold.

 Impurities 
 Arsenic and Antimony 
 US$ 3.00 (US$ three) per dry metric ton of the Concentrate for each
0.10% (zero point one zero percent) by which the final arsenic and antimony content exceeds 0.4% (zero point four percent), fractions pro rata. 

Bismuth 
 US$ 1.50 (US$ one point five
zero) per dry metric ton of the Concentrate for each 0.01% (zero point zero one percent) by which the final bismuth content exceeds 0.1% (zero point one percent), fractions pro rata. 

 

	8.	QUOTATIONAL PERIOD 

 The
quotational period for all payable metals shall be the average of the first month following the month of delivery at Buyer’s designated warehouse (M+l). 

  
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 For the avoidance of doubt, the month of delivery (M) shall be the month of the closing date of
the lot delivered to the designated warehouse. 
  

	9.	PAYMENT 

 All payments shall be
made in US$ by telegraphic transfer. 
 Provisional Payment 
 The provisional payment shall be effected as follows: 
 90% (ninety percent) of the provisional
value of the Concentrate, based on the bill of lading wet weight, provisional moisture, provisional assays and the metal quotations applicable on the bill of lading date (or on the last LME market day prior to the bill of lading date if the bill of
lading date does not fall on an LME market day), shall be paid against the presentation of the following documents: 
  

	1.	3/3 original ‘clean on board’ Charter Party bills of lading, made out to order, blank endorsed and marked freight payable as per Charter Party;

	2.	Seller’s provisional invoice; 

	3.	Seller’s provisional weight and moisture certificate; 

	4.	Seller’s provisional assay certificate. 

Final Payment 
 Final payment
shall be made by the party so owing latest 3 (three) Banking Days after the date final assays, weights and prices are known against presentation of the final invoice. 
  

	10.	TITLE AND RISK 

 Title shall pass
from the Seller to the Buyer upon Buyer’s provisional payment. 
 Risk shall pass from Seller to Buyer when the Concentrate passes the
ship’s rail at the port of loading. 
  

	11.	INSURANCE 

 Insurance for the
Concentrate shall be covered by Seller up to the passing of risk from Seller to Buyer. 
  

	12.	WEIGHING, SAMPLING AND MOISTURE DETERMINATION 

 The operations of weighing, sampling and moisture determination shall be carried out at the Buyer’s warehouse in the usual technical manner. The moisture and the weight thus determined less a weight
franchise of 0.50% (zero point five zero percent) shall be final and binding for settlement purposes, save for fraud or manifest error. 

Seller and Buyer shall appoint an internationally recognised supervision company on a joint basis to conduct these operations. The costs of these
operations shall be shared equally between the parties. 

  
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 The size of the lots for sampling purposes shall be approximately 30 (thirty) wet metric tons. Sample
portions shall be made from each such sample lot and distributed as follows: 
  

	-	2 sets of sealed samples for the Seller: 

  

	-	1 set of sealed samples to be retained by an internationally recognised supervision company for use by the umpire in the event one is appointed.

 The final contents for all elements shall be calculated on a lot-by-lot basis. The sum of the individual lot contents will
constitute the total of the shipment. 
  

	13.	ASSAYING 

 Assays shall be
determined one of the following mutually greed internationally recognized independent laboratories at the port of loading: 
 Alfred H.
Knight de Mexico, S.A. de C.V. 
 Fdo. Montes de Oca No. 183 
 Col. Independencia, C/P. 03630 
 Mexico, D. F 

Stewart Inspection and Analysis Limited 

Caddick Road 
 Knowsley Business Park 

Prescot 
 L34 9ER 

England 
 SGS Nederland B.V., 

Mineral Services 
 Malledijk 18 

3200 AE Spijkenisse 
 The Netherlands 

The results so obtained shall be final and binding for settlement purposes, save for fraud or manifest error. The assays shall be unadjusted for cupel
absorption and slag loss. The cost of these operations shall be shared equally between the parties. 
  

	14.	FORCE MAJEURE 

 If either party is
prevented, hindered or delayed from performing in whole or in part any obligation or condition of this contract by reason of force majeure (the “Affected Party”), the Affected Party shall give written notice to the other party
promptly and in any event within 3 (three) Business Days after receiving notice of the occurrence of a force majeure event giving, to the extent reasonably practicable, the details and expected duration of the force majeure event and the quantity of
Concentrate affected (the “Force Majeure Notice”). 
 Provided that a Force Majeure Notice has been given, for so long
as the event of force majeure exists and to the extent that performance is prevented, hindered or delayed by the event of force majeure, neither party shall be liable to the other and the Affected Party may suspend performance of its obligations
under this contract (a “Force Majeure Suspension”). During the period of a Force Majeure Suspension, the other party may suspend the performance of all or a part of its obligations to the extent that such suspension is commercially
reasonable. 
 The Affected Party shall use commercially reasonable efforts to avoid or remove the event of force majeure and shall promptly
notify the other party when the event of force majeure is terminated. 
 If a Force Majeure Suspension occurs, the time for performance of the
affected obligations and, if 

  
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 If the period of the Force Majeure Suspension is equal to or exceeds 3 months from the date of the
Force Majeure Notice, and so long as the force majeure event is continuing, either party may, in its sole discretion and by written notice, terminate this contract or, in the case of multiple deliveries under this contract, terminate the affected
deliveries. Upon termination in accordance with this clause, neither party shall have any further liability to the other in respect of this contract or, as the case may be, the terminated deliveries except for any rights and remedies previously
accrued under the Contract, including any payment obligations. 
 “Force Majeure” means any cause or event reasonably beyond the
control of a party, including, but not limited to fires, earthquakes, lightning, floods, explosions, storms, adverse weather, landslides and other acts of natural calamity or acts of god; navigational accidents or maritime peril; vessel damage or
loss; strikes, grievances, actions by or among workers or lock-outs (whether or not such labour difficulty could be settled by acceding to any demands of any such labour group of individuals); accidents at, closing of, or restrictions upon the use
of mooring facilities, docks, ports, harbours, railroads or other navigational or transportation mechanisms; disruption or breakdown of, storage plants, terminals, machinery or other facilities; acts of war, hostilities (whether declared or
undeclared), civil commotion, arrest and/or detention of the Concentrate and/or vessel, embargoes, blockades, terrorism, sabotage or acts of the public enemy; any act or omission of any governmental authority; good faith compliance with any order,
request or directive of any governmental authority; or any other cause reasonably beyond the control of a party, whether similar or dissimilar to those above and whether foreseeable or unforeseeable, which, by the exercise of due diligence, such
party could not have been able to avoid or overcome. A party’s inability economically to perform its obligations under the Contract shall not constitute an event of force majeure. 
 This clause shall not apply to any obligations to pay, indemnify or provide security or to any Concentrate for which vessel, truck or rail wagon space has been booked, pricing has been established, the
quotational period has commenced or payment has been made unless the Buyer has expressly consented in writing. 
  

	15.	SUSPENSION OF QUOTATIONS 

 The
metal prices and currency quotations specified under this contract are the quotations in general use for the pricing of the metal content of concentrate. 
 In the event that any of these price quotations cease to exist or cease to be published or should no longer be internationally recognised as the basis for the settlement of concentrate contracts, then
upon the request of either party, Seller and Buyer will promptly consult together with a view to agree on a new pricing basis and on the date for bringing such basis into effect. The basic objective will be to secure the continuity of fair pricing.

  

	16.	DISPUTE RESOLUTION 

 Subject to the
option set out in this clause below, all claims, disputes or differences whatsoever between the parties arising out of or in connection with this contract, including without limitation to any question regarding its existence, validity or
termination, (a “Dispute”) shall be referred to arbitration in London, England, in accordance with the Arbitration Act 1996 (or any subsequent amendment or re-enactment thereof) (the “Act”). 

The claiming party shall appoint one arbitrator and give written notice to the other party of the appointment (“Arbitration Notice”).
The defending party shall appoint and give notice to the claiming party of the second arbitrator within 14 calendar days of the Arbitration Notice. The third arbitrator shall be appointed by the two arbitrators so appointed within 14 calendar days
of the defending party’s notice. Failing appointment of an arbitrator by the defending party in accordance with this clause, the claiming party’s arbitrator may act as sole arbitrator, at the claiming party’s option. The arbitrator(s)
shall have experience of commodities trading matters. 

  
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 Subject to any right of appeal under the Act, any arbitral award rendered by the tribunal shall be
final and binding upon the parties and judgment may be entered thereon or any order of enforcement obtained in any courts having jurisdiction. 

Notwithstanding the provisions of this clause, Buyer shall have the right to commence and pursue proceedings for interim or conservatory relief against
the Seller in any court in any jurisdiction and the commencement and pursuit of such proceedings in any one court or jurisdiction shall not preclude Buyer commencing or pursuing proceedings in any other court or jurisdiction (whether concurrently or
not) if and to the extent permitted by the applicable law. 
 Notwithstanding the foregoing arbitration provisions, Buyer shall have the option
of referring any Dispute to the High Court of Justice in London, England, or any other court having jurisdiction over the Dispute (the “Court”). If Buyer is the defending party, such option must be declared within 14 calendar days
of an Arbitration Notice and, upon such declaration, the parties shall procure that the arbitration be discontinued (without an award being given). 
 If Buyer exercises its option, the parties waive any objection now or later to any proceedings relating to the contract being brought in the Court and the parties hereby irrevocably submit to the
exclusive jurisdiction of the Court. 
 Promptly upon Buyer exercising its option, Seller shall notify Buyer of an address for service of
proceedings in the jurisdiction and the contact details of lawyers in the jurisdiction appointed to represent the other party. 
 A judgment
relating to this contract which is given or would be enforced by a Court shall be conclusive and binding on the parties and may be enforced without review in any other jurisdiction. 

 

	17.	CHOICE OF LAW 

 The contract shall
be governed by and construed in accordance with the laws of England, without regard to principles of choice of law. 
 The United Nations
Convention on Contracts for the International Sale of Goods (1980) shall not apply to this contract. 
  

	18.	TAXES AND TARIFFS 

 Any taxes,
tariffs and duties whether existing or new on the Concentrate or contained metals or on commercial documents relating thereto or on the cargo itself, imposed in the country of origin shall be borne by the Seller. 

Any taxes, tariffs and duties whether existing or new on the Concentrate or contained metals or on commercial documents relating thereto or on the cargo
itself, imposed in the country of discharge and/or the importing country shall be borne by Buyer. 
  

	19.	LICENCES 

 Seller undertakes that
all the necessary export licences and all other authorisations required for the Concentrate have been obtained (and/or will be obtained) for the entire quantity covered by this contract 

  
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	20.	ASSIGNMENT 

 Without the prior
written consent of the other party, which shall not be unreasonably withheld, neither party may assign or create a trust or otherwise transfer its rights or obligations under this contract in full or in part, except that the Buyer and its assigns
may without such consent assign all or a portion of their rights to receive and obtain payment under this contract in connection with bank funding arrangements. 
  

	21.	THIRD PARTY RIGHTS 

 Any person who
is not a party to this contract may not enforce any term of it. The parties agree that the Contracts (Rights of Third Parties) Act 1999 shall not apply to this contract or any other agreement entered pursuant to it. 

 

	22.	DEFAULT 

 Strictly without
prejudice to the rights and remedies of the parties in law, the parties shall have the following additional rights and remedies upon the occurrence of an event of default. 
 For the purposes of this clause, an event of default (“Event of Default”) shall mean any of the following: 
  

	(i)	The failure of the Seller to comply with any terms under this contract or any other contract with the Buyer or any of its Affiliates and such failure remains uncured
for 3 (three) Business Days following written notice thereof; 

  

	(ii)	The inability or admitted inability or declared inability of a party to pay its debts as they fall due or declaration under any applicable law or if the value of a
party’s assets is at any time less than the amount of its liabilities (taking into account contingent and prospective liabilities); 

  

	(iii)	The institution or commencement or the threat of commencement of any corporate action or legal proceedings in respect of a party in relation to the suspension of
payments, any moratorium of any indebtedness, dissolution, administration, reorganization, composition, compromise, arrangement with creditors, winding up, liquidation, receivership, compulsory management or bankruptcy or any analogous procedure in
any jurisdiction; 

  

	(iv)	The occurrence of a material adverse change in the financial standing or creditworthiness of the Seller, or of any party supporting or purporting to support, guarantee
and/or fulfil any of the obligations of the Seller whether by means of a credit support instrument or otherwise (the “Credit Support Provider”) when compared to the Seller’s or a Credit Support Provider’s financial
standing as at the date of this contract, which change, in the sole opinion of the Buyer, affects the Seller’s or the Credit Support Provider’s ability to perform its financial obligations in respect of this contract;

  

	(v)	The failure by the Seller to provide a written assurance (to the satisfaction of the Buyer), within 3 (three) Business Days following a reasonable request by the Buyer,
that it will comply with any or all of its obligations under this contract or any other contract. 

 For the purposes of this
clause, the terms “Defaulting Party” and “Seller” shall include any of the Seller’s Affiliates. 
 Upon the occurrence
of an Event of Default with respect to a party (the “Defaulting Party”) and irrespective of whether or not an Event of Default is continuing, the other party (the “Non-Defaulting Party”) may in its sole and absolute
discretion and notwithstanding any implied terms arising by virtue of prior contrary course of dealing or rule of law or doctrine to the contrary. 

  
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	(i)	Notify the Defaulting Party of a delivery termination date (which shall be no earlier than the date of such Notice and no later than twenty (20) Days after the
date of such Notice) on which the delivery in respect of which the Event of Default has occurred shall terminate (the “Delivery Termination Date”); and/or 

 

	(ii)	Notify the Defaulting Party of a contract termination date (which shall be no earlier than the date of such notice and no later than 20 days after the date of such
notice) on which this contract and the transactions contemplated hereunder shall terminate (the “Contract Termination Date”); and/or 

  

	(iii)	Withhold any payments due to the Defaulting Party until such Event of Default is cured: and/or 

 

	(iv)	Suspend performance of its obligations under this contract until such Event of Default is cured. 

 If a notice of a Delivery Termination Date or a Contract Termination Date (a “Termination Date”) is given under this clause: (i) the Termination Date will occur on the designated
date whether or not the relevant Event of Default is then continuing; and (ii) any accrued rights or obligations that have arisen prior to the Termination Date shall not be affected. 
 If an Event of Default occurs and/or a Termination Date is established, the Non-Defaulting Party may (in its absolute discretion) set off any or all amounts whether present or future, actual or contingent
which the Defaulting Party owes to the Non-Defaulting Party (whether under this or any other contract and/or on any other account whatsoever) against any or all amounts which the Non-Defaulting Party owes to the Defaulting Party (whether under this
or any other contract and/or on any other account whatsoever). Notwithstanding any rule or provision in this contract to the contrary, the Non-Defaulting Party shall not be required to pay to the Defaulting Party any net amount due to a delivery
termination or a contract termination until the Non-Defaulting Party receives confirmation satisfactory to it in its reasonable discretion that (i) all amounts due and payable as of the Termination Date by the Defaulting Party under this
contract and/or on any account whatsoever with the Non-Defaulting Party have been fully and finally paid, and (ii) all other obligations of any kind whatsoever of the Defaulting Party to make any payments (including but not limited to payments
of damages) to the Non-Defaulting Party under this contract and/or on any account whatsoever which are due and payable as of or as a consequence of the Termination Date have been fully and finally performed. 

 

	23.	LIMITATION OF LIABILITY 

 Neither
the Seller nor the Buyer shall be liable, whether in contract or in tort or otherwise, for indirect, consequential or special damages or losses of whatsoever nature, however caused. 
 Under no circumstances shall Buyer’s liability exceed the value of the Concentrate as at the date of shipment. 
  

	24.	INCOTERMS 

 Insofar as not
inconsistent herewith INCOTERMS 2000 (and any later amendments thereto) shall apply to this contract. 
  

	25.	CHANGE OF CONTROL 

 In the event of
any actual or prospective change in the organisation, control or management of the Buyer or the Seller, including without limitation, a change to the majority shareholding or privatisation or equivalent process, subject always to clause 23. DEFAULT,
this contract will not be changed or in any way modified and shall continue in full force and effect. 

  
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	26.	NOTICES 

 No notice or
communication with respect to this contract shall be effective unless it is given in writing and delivered or sent by facsimile or electronic mail to the other party at the address set out herein, or to such other address as each party otherwise
notifies the other party. 
 Notices given by first class mail shall be deemed to have been delivered when received. Notices sent by facsimile
or electronic mail shall be deemed to have been received upon completion of successful transmission if sent during normal office hours at the place of receipt. Any facsimile or electronic mail transmitted outside of normal office hours at the place
of receipt shall be deemed to have been received on the next Business Day. 
 All notices, requests and other communications hereunder shall be
addressed: 
  

			
	If to Seller:	  	 DON DAVID GOLD S.A. DE C.V.
 Macedonio Alcala No. 201-105
 Col Centro, Oaxaca, Oaxaca

Mexico
 Phone:     +52
951 5216 82 58

		
	If to Buyer:	  	 TRAFIGURA BEHEER B.V.,

Amsterdam, Branch Office Lucerne

Zürichstrasse 31, 6002 Lucerne, Switzerland

Phone:     +41 41 419 4343
 Fax:         +41 41 419 4344

Telex:      868001 TRAF CH

  

	27.	WAIVERS 

 No amendment,
modification or waiver of any provision of this contract or of any right, power or remedy shall be effective unless made expressly and in writing. 
 No waiver of any breach of any provision of this contract shall: (a) be considered to be a waiver of any subsequent or continuing breach of that provision; or (b) release, discharge or prejudice
the right of the waiving party to require strict performance by the other party of any other provisions of this contract. 
  

	28.	SET OFF 

 Notwithstanding any other
provision of this contract, if, at any time, Seller and/or any of its Affiliates fails to make any payment due to Buyer and/or any of its Affiliates, whether under this contract or any other contracts between the parties, Buyer shall be entitled to
withhold, set off or deduct any sum either under this contract or any other contracts then in force; provided that such deduction shall not exceed the aggregate value of the goods and the sums due under the contracts. Such withholdings or deduction
may be applied by Buyer automatically in diminution of its claims against Seller in respect of any such failure to pay or perform any part of a contract. 
  

	29.	SEVERABILITY 

 The invalidity,
illegality or unenforceability of any one or more of the provisions of this contract shall in no way affect or impair the validity and enforceability of the other provisions of this contract. 

  
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	30.	CONFIDENTIALITY 

 The existence of
and terms of this contract shall be held confidential by the parties save to the extent that such disclosure is made to a party’s banks, accountants, auditors, legal or other professional advisers, or as may be required by law, a competent
court or a liquidator or administrator of a party, or the other party has consented in writing to such disclosure. 
  

	31.	ENTIRE AGREEMENT 

 This contract
constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous agreements between the parties relating to the subject matter. Each party acknowledges and represents that it has not relied
on or been induced to enter into this contract by any representation, warranty or undertaking other than those expressly set out in this contract. A party is not liable to the other party for a representation, warranty or undertaking of whatsoever
nature that is not expressly set out in this contract. 
 IN WITNESS WHEREOF the parties have executed this document as of the respective
dates specified below with effect from the Effective Date specified on the first page of this document. 
  

					
	 Accepted:
 

  
	 		  	 

 TOMAS FINSCHI
 AUTHORISED SIGNATURE

	 DON DAVID GOLD S.A. DE C.V.
 (signed by fully authorised signatory)
	 		  	 TRAFIGURA BEHEER B.V.,

Amsterdam, Branch Office Lucerne
 (signed by
fully authorized signatory)

			
	Place and Date: 21 Diciembre 2010	 		  	Place and Date: Lucerne, 3 December 2010Purchase Contract [103-11CMX-019-0-P] effective March 28, 2011

 Exhibit 10.3 
 CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V. 
 a Trafigura
Group Company 
 DON DAVID GOLD S.A. DE C.V 
 Macedonio Alcala No. 201-105 
 Col. Centro, Oaxaca, Oaxaca 

Lucerne, 28 March 2011 
  

			
	  

PURCHASE CONTRACT

 
	  	  

103-11CMX-019-0-P

 

 This contract is concluded on the 25th day of March 2011 (the “Effective Date”) between DON DAVID GOLD S.A. DE C.V., Macedonio Alcala
No. 201-105 Col. Centro, Oaxaca, Oaxaca, Mexico (the “Seller”) and CONSORCIO MINERO DE MEXICO CORMIN MEX, S.A. DE C.V., Reforma 115 piso 21, despacho 2102, Col. Lomas de Chapultepec, Mexico D.F., Mexico (the
“Buyer”). 
 SCOPE OF THE CONTRACT 
 The Seller agrees to sell zinc concentrate and the Buyer agrees to buy zinc concentrate at the terms and conditions set out below: 
 DEFINITIONS 
  

			
	1 ounce means:	  	1 troy ounce of 31.1035 grams;
		
	1 ton means:	  	1 metric ton of 1,000 Kilograms or 2204.62 lbs;
		
	1 unit means:	  	1% of the dry net weight;
		
	Affiliates means:	  	in relation to any company or corporation, a Subsidiary or Holding Company of that company or corporation or any other Subsidiary of that company or corporation or of that
Holding Company;
		
	 Banking Day and Business
 Day mean:
	  	any day except a Saturday or Sunday on which banks in the city of New York, New York, USA, are generally open for the conduct of business;
		
	Holding Company means:	  	in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary;
		
	IMO/BC Code means:	  	the International Maritime Organisation Code of Safe Practice for Solid Bulk Cargoes prevailing at the time of delivery;
		
	INCOTERMS 2000 means:	  	the 2000 edition of the standard trade definitions published by the International Chamber of Commerce;
		
	LBMA means:	  	London Bullion Market Association;
		
	LME means:	  	London Metal Exchange;
		
	Month of Scheduled Shipment (MOSS) means:	  	in respect of any shipment of the concentrate, the calendar month in which shipment has been scheduled as per the clause SHIPMENT or as otherwise agreed in writing between the
parties;
		
	Subsidiary means:	  	in relation to any company or corporation, a company or corporation which is controlled, directly or indirectly, by the first mentioned company or corporation; more than half the
issued share capital of which is beneficially owned, directly or indirectly by the first mentioned company or corporation; or which is a Subsidiary of another Subsidiary of the first mentioned company or corporation; and for this purpose, a company
or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board of directors or equivalent body;
		
	US$ means:	  	the lawful currency of the United States of America;
		
	Valid TML means:	  	Transportable Moisture Limit valid for the current shipment;
		
	Valid FMP means:	  	Flow Moisture Point valid for the current shipment.

  
  

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540
2203 
  

 CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V. 

a Trafigura Group Company 
  

					
	PURCHASE CONTRACT	  	        103-11CMX-019-0-P	  	

  
  

 
 QUANTITY AND QUALITY 

100% March to May 2011 production of Aguila zinc concentrate assaying as follows (the “Concentrate”): 

 

			
	 Zn
	  	60%
	 Ag
	  	230 gr/dmt
	 Au
	  	4 gr/dmt
	 Fe
	  	> 6%
	 SiO2
	  	> 3%
	 Cd
	  	> 0.4%
	 As+Sb
	  	> 0.5%

 In the event the actual assays deviate from the contractual assays both parties agree to discuss in good faith to reach a
solution in line with prevailing market terms. 
 The Concentrate shall otherwise be free from deleterious impurities harmful to the smelting
and / or refining processes and shall be able to withstand the voyage, upon all customary forms of transportation, to the destination intended by the Buyer. The Concentrate shall conform to all local regulations and the IMO / BC Code of Safe
Practice for Solid Bulk Cargoes. Seller shall promptly present valid TML, FMP and moisture certificates if so requested by Buyer. 
 DELIVERY

 DAP (Delivery At Place) impala warehousing Manzanillo or Parity (Incoterms 2000) 

DAP – Seller delivers the goods when they are placed at the disposal of the buyer on the arriving means of transport ready for
unloading at the named place of destination. Risks transfer at this point from seller to buyer. 
 All export charges and the cost of loading
the concentrate into the carrying vessel shall be for Buyer’s account, Seller shall have the right to collect the 16% VAT. 
 PRICE

 Payments 
 Zinc

 Pay for 85% (eighty-five percent) of the final zinc content, subject to a minimum deduction of 8 (eight) units, at the official London
Metal Exchange cash settlement quotation for Special High Grade Zinc, as published in the Metal Bulletin in US$ and averaged over the quotational period. 
 Silver 
 Deduct 3 (three) ounces per dry metric ton of the Concentrate and pay for 70%
(seventy percent) of the balance of the final silver content at the LBMA spot quotation for silver, as published in the Metal Bulletin in US$ and averaged over the quotational period. 
 Gold 
 Deduct 2 (two) grams per dry metric ton of the Concentrate and pay for 70% (seventy
percent) of the balance of the final Gold content at the LONDON FINAL quotation for gold, as published in the Metal Bulletin in US$ and averaged over the quotational period. 

 

	
	 Av. Paseo de la Reforma No.
115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

  
 2 

 CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V. 

a Trafigura Group Company 
  

					
	PURCHASE CONTRACT	  	        103-11CMX-019-0-P	  	

  
  

 
 Deduction 

Treatment Charge 
 US$218 (US$ two hundred
and eighteen) per dry metric ton of the Concentrate delivered basis DAP Manzanillo, Mexico or parity. 
 This treatment charge is based on an
applicable zinc price of US$2,300 per dry metric ton and will be: 
  

	 	•	 	 Increased US$0.12 for each US$1.00 (US$ one) the applicable zinc price exceeds US$2,300 per dry metric ton; 

All fractions pro rata. 
 Penalties

 None one, subject to maximum contents as follow: 

Fe          < 6% 

SiO2      < 3% 

Cd          < 0.4% 

As+Sb    < 0.5% 
 QUOTATIONAL PERIOD 
 The quotational period for all payable metals shall be the month
following the Month of arrival at the warehouse (M+I). 
 PAYMENT 
 All payments shall be made in US$ by telegraphic transfer. 
 Provisional Payment

 90% (ninety percent) of the provisional invoice value of the Concentrate, based on the final wet weight, final moisture, provisional
assays and the metal forward LME prices referred to the contractual QP at the date of invoice is issued, shall be paid 10 (ten) calendar days after the closing date of lot delivery to the Manzanillo warehouse against the presentation of the
following documents: 
  

	1.	Holding certificate as per Appendix 1 hereto; 

	2.	Seller’s provisional invoice; 

	3.	Seller’s provisional weight and moisture certificate; 

	4.	Seller’s provisional assay certificate; 

	5.	Original Certificate of Origin issued and legalised by the local Chamber of Commerce of EUR. 1 certificate, if required. 

Final Payment 
 Final payment
shall be made by the party so owing latest 3 (three) Banking Days after the date final assays, weights and prices are known against presentation of the final invoice. 
 In case Seller is indebted to Buyer by reason of having received provisional payment in excess of the amount of the final invoice, this difference shall be re-paid by Seller to Buyer by telegraphic
transfer within 3 (three) Banking Days of final weights, final assays and final prices being known. 
  

	
	 Av. Paseo de la Reforma No.
115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

  
 3 

 CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V. 

a Trafigura Group Company 
  

					
	PURCHASE CONTRACT	  	        103-11CMX-019-0-P	  	

  
  

 
 TITLE AND RISK 

Title and Risk in the concentrate shall pass from seller to buyer when the concentrate has been delivered to the buyer’s nominated warehouse in
Manzanillo, Mexico 
 WEIGHING, SAMPLING AND MOISTURE DETERMINATION 
 The operations of weighing, sampling and moisture determination shall be carried out at the Manzanillo warehouse in the usual technical manner. The moisture and the wet weight determined less a weight
franchise of 0.5% (zero point five percent) shall be final and binding for settlement purposes. 
 Seller and Buyer shall appoint an
internationally recognized supervision company on a joint basis to represent them during these operations. The costs of these operations shall be shared equally between the parties. 
 The size of the lots for sampling purposes shall be approximately 30 (thirty hundred) wet metric tons. Sample portions shall be made from each such sample lot and distributed as follows: 

 

	 	-	 	 2 sets of sealed samples for the Seller; 

	 	-	 	 2 sets of sealed samples for the Buyer; 

	 	-	 	 1 set of sealed samples to be reserved by an internationally recognised supervision company for eventual umpire purposes. 

The final contents for all elements shall be calculated on a lot-by-lot basis. The sum of the individual lot contents will constitute the total of the
shipment. 
 ASSAYING 
 Assays
shall be determined by an independent laboratory at loading port and shall be considered as finals for both parties 
 Seller and buyer will
determine by mutual agreement one of the following laboratories for assays determination, and will be chosen on a rotational basisi 

Laboratory Services International B.V. 

Geijssendorfferweg 54 
 3088 GK Rotterdam

 SGS Laboratory Services 

Malledijk 18 
 3200 AE Spijkenisse 

The Netherlands 
 Alfred H. Knight
International Ltd. 
 Eccleston Grange 
 Prescot Road 
 St. Helens 
 Merseyside WA10 3BQ 
 England 

 

	
	 Av. Paseo de la Reforma No.
115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

  
 4 

 CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V. 

a Trafigura Group Company 
  

					
	PURCHASE CONTRACT	  	        103-11CMX-019-0-P	  	

  
  

 
 Silver and gold assays shall be determined unadjusted for cupel absorption
and slag loss 
 FORCE MAJEURE 

If either party is prevented, hindered or delayed from performing in whole or in part any obligation or condition of this contract by reason of force
majeure (the “Affected Party”), the Affected Party shall give written notice to the other party promptly and in any event within 3 (three) Business Days after receiving notice of the occurrence of a force majeure event giving, to
the extent reasonably practicable, the details and expectable duration of the force majeure event and the quantity of Concentrate affected (the “Force Majeure Notice”). 
 Provided that a Force Majeure Notice has been given, for so long as the event of force majeure exists and to the extent that performance is prevented, hindered or delayed by the event of force majeure,
neither party shall be liable to the other and the Affected Party may suspend performance of its obligations under this contract (a “Force Majeure Suspension”). During the period of a Force Majeure Suspension, the other party may suspend
the performance of all or a part of its obligations to the extent that such suspension is commercially reasonable. 
 The Affected Party shall
be use commercially reasonable efforts to avoid or remove the event of force majeure and shall promptly notify the other party when the event of force majeure is terminated. 
 If a Force Majeure Suspension occurs, the time for performance of the affected obligations and, if applicable, the term of this contract shall be extended for a period equal to the period of suspension.

 If the period of the Force Majeure Suspension is equal to or exceeds 3 months from the date of the Force Majeure Notice, and so long as the
force majeure event is continuing, either party may, in its sole discretion and by written notice, terminate this contract or, in the case of multiple deliveries under this contract, terminate the affected deliveries. Upon termination in accordance
with this clause, neither party shall have any further liability to the other in respect of this contract or, as the case may be, the terminated deliveries except for any rights and remedies previously accrued under the Contract, including any
payment obligations. 
 “Force Majeure” means any cause or event reasonably beyond the control of a party, including, but not limited
to fires, earthquakes, lightning, floods, explosions, storms, adverse weather, landslides and other acts of natural calamity or acts of god; navigational accidents or maritime peril; vessel damager or loss; strikes, grievances, actions by or among
workers or lock-outs (whether or not such labour difficulty could be settled by acceding to any demands of any such labour group of individuals); accidents at, closing of, or restrictions upon the use of mooring facilities, docks, ports, harbours,
railroads, or other navigational or transportation mechanisms; disruption or breakdown of, storage plants, terminals, machinery or other facilities; acts of war, hostilities (whether declared or undeclared), civil commotion, embargoes, blockades,
terrorism, sabotage or acts of the public enemy; any act or omission of any governmental authority; good faith compliance with any order, request or directive of any governmental authority; or any other cause reasonably beyond the control of a
party, whether similar or dissimilar to those above and whether foreseeable or unforeseeable, which, by the exercise of due diligence, such party could not have been able to avoid or overcome. A party’s inability economically to perform its
obligations under the Contract shall not constitute an event of fore majeure. 
 This clause shall not apply to any obligations to pay,
indemnify or provide security or to any Concentrate for which vessel, truck or rail wagon space has been booked, pricing has been established, the quotational period has commenced or payment has been made unless the Buyer has expressly consented in
writing. 
  

	
	 Av. Paseo de la Reforma No.
115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

  
 5 

 CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V. 

a Trafigura Group Company 
  

					
	PURCHASE CONTRACT	  	        103-11CMX-019-0-P	  	

  
  

 
 SUSPENSION OF QUOTATIONS 

The metal prices and currency quotations specified under this contract are the quotations in general use for the pricing of the metal content of
concentrate. 
 In the event that any of these price quotations cease to exist or cease to be published or should no longer be internationally
recognised as the basis for the settlement of concentrate contracts, then upon the request of either party, Seller and Buyer will promptly consult together with a view to agree on a new pricing basis and on the date for bringing such basis into
effect. The basic objective will be to secure the continuity of fair pricing. 
 DISPUTE RESOLUTION 

Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred
to and finally resolved by arbitration under the Rules of the New York Court of International Arbitration (“NYCIA”), which Rules are deemed to be incorporated by reference into this clause. The tribunal shall consist of three arbitrators,
all of whom shall have experience in shipping and trading matters. One arbitrator shall be appointed by Buyer, one by Seller and a third by the President of the NYCIA. The third arbitrator shall always be a particing barrister or solicitor. In case
either party fails to nominate its arbitrator then he will be appointed by the President of the LCIA. However, it is understood that both parties shall be entitled to take any reasonable measures for the protection of rights accrued to them by this
contract without prejudice to the provisions of this clause. The arbitration shall be held in New York, US. The tribunal shall state in its award in detail the facts of the case and reasons for its decision. The award shall be final and binding and
not subject to appeal. 
 CHOICE OF LAW 
 This contract shall be governed by and constructed in accordance with New York law. 
 The United
Nations Convention on Contracts for the International Sale of Goods (1980) shall not apply to this contract. 
 TAXES AND TARIFFS

 Any taxes, tariffs and duties whether existing or new on the Concentrate or contained metals or on commercial documents relating thereto
or on the cargo itself, imposed in the country of origin shall be borne by the Seller. 
 Any taxes, tariffs and duties whether existing or new
on the Concentrate or contained metals or on commercial documents relating thereto or on the cargo itself, imposed in the country of discharge and/or the importing country shall be borne by Buyer. 

LICENSES 
 Seller undertakes that all the
necessary export licences and all other authorisations required for the Concentrate have been obtained (and/or will be obtained) for the entire quantity covered by this contract. Seller furthermore guarantees that such licences will remain in force
for the full life of this contract. 
  

	
	 Av. Paseo de la Reforma No.
115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

  
 6 

 CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V. 

a Trafigura Group Company 
  

					
	PURCHASE CONTRACT	  	        103-11CMX-019-0-P	  	

  
  

 
 ASSIGNMENT 
 Without the prior written consent of the other party, which shall not be unreasonably withheld, neither party may assign or create a trust or otherwise transfer its rights or obligations under this
contract in full or in part. 
 THIRD PARTY RIGHTS 
 Any person who is not a party to this contract may not enforce any term of it. The parties agree that the Contracts (Rights of Third Parties) Act 1999 shall not apply to this contract or any other
agreement entered pursuant to it. 
 LIMITATION OF LIABILITY 
 Neither the Seller nor the Buyer shall be liable, whether in contract or in tort or otherwise, for indirect, consequential or special damages or losses of whatsoever nature, however caused. 

Under no circumstances shall Buyer’s liability exceed the value of the Concentrate as at the date of shipment. 

INCOTERMS 
 Insofar as not inconsistent
herewith INCOTERMS 2000 (and any later amendments thereto) shall apply to this contract. 
 CHANGE OF CONTROL 

In the event of any actual or prospective change in the organisation, control or management of a party, including without limitation, a change to the
majority shareholding or privatisation or equivalent process, subject always to DEFAULT, this contract will not be changed or in any way modified and shall continue in full force and affect. 
 NOTICES 
 No notice or communication with respect to this contract shall be effective unless
it is given in writing and delivered or sent by facsimile or electronic mail to the other party at the address set our herein, or to such other address as each party otherwise notifies the other party. 

Notices given by first class mail shall be deemed to have been delivered when received. Notices sent by facsimile or electronic mail shall be deemed to
have been received upon completion of successful transmission if sent during normal office hours at the place of receipt. Any facsimile or electronic mail transmitted outside of normal office hours at the place of receipt shall be deemed to have
been received on the next Business Day. 
 All notices, requests and other communications hereunder shall be addressed: 

 

			
	 If to Seller:
	  	DON DAVID GOLD S.A. DE C.V.
		  	Macedonio Alcala No. 201-105
		  	Col. Centro, Oaxaca, Oaxaca
		  	Mexico
		  	Phone: +52 951 5216 82 58

  

	
	 Av. Paseo de la Reforma No.
115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

  
 7 

 CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V. 

a Trafigura Group Company 
  

					
	PURCHASE CONTRACT	  	        103-11CMX-019-0-P	  	

  
  

 
  
  

			
	 If to Buyer:
	  	CONSORCIO MINERO DE MEXICO, CORMIN MEX, S.A. DE C.V.
		  	Reforma 115 piso 21, despacho 2012
		  	Col. Lomas de Chapultepec, del. Miguel Hidalgo
		  	Mexico D.F., Mexico
		  	Phone: +52 55 4021 69

 WAIVERS 

No waiver by Buyer of any right, power or remedy or of any provision of this contract and no amendment of any provision of this contract shall be
effective unless and to the extent that it is expressly made and reduced to writing. 
 SEVERABILITY 

The invalidity, illegality or unenforceability of any one or more of the provisions of this contract shall in no way affect or impair the validity and
enforceability of the other provisions of this contract. 
 CONFIDENTIALITY 
 The existence of and terms of this contract shall be held confidential by the parties save to the extent that such disclosure is made to a party’s banks, accountants, auditors, legal or other
professional advisers, or as may be required by law, a competent court or a liquidator or administrator of a party, or the other party has consented in writing to such disclosure. 
 ENTIRE AGREEMENT 
 This contract constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes any previous agreements between the parties relating to the subject matter. Each party acknowledges and represents that it has not relied on or been induced to enter into this contract by any
representation, warranty or undertaking other than those expressly set out in this contract. A party is not liable to the other party for a representation, warranty or undertaking of whatsoever nature that is not expressly set out in this contract.

 FUTURE PRODUCTION 
 Both
parties agree to discuss in good faith a commercial take off agreement for the delivery of polymetallic concentrates (Cu/Au, Pb/Ag and Zn) to begin to be shipped in June 2011, once the production is stabilized and the seller declared the commercial
production for each concentrate, copper, zinc and lead. The discussion should be done during june 2011 by both parties in order to establish a mutual agreement in good faith for the terms and conditions for the next period. 

International Market Terms from the main mining and smelter companies in the world will be taken into consideration to determine the terms and conditions
of the take off agreement. The previous one will be subject to a satisfactory agreement to both parties. 
  

	
	 Av. Paseo de la Reforma No.
115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

  
 8 

 CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V. 

a Trafigura Group Company 
  

					
	PURCHASE CONTRACT	  	        103-11CMX-019-0-P	  	

  
  

 
 IN WITNESS WHEREOF the parties have executed this document as of the
respective dates specified below with effect from the Effective Date specified on the first page of this document. 
  

					
	Accepted:	 		  	
	 

	 		  	 

	DON DAVID GOLD. S.A. DE C.V.	 		  	CONSORCIO MINERO DE MEXICO
	(signed by fully authorised signatory)	 		  	CORMIN MEX S.A. DE C.V.
		 		  	(signed by fully authorised signatory)
			
	 Place and Date: USA
	 		  	Place and Date: Mexico

  

	
	 Av. Paseo de la Reforma No.
115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

  
 9

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