Document:

ex105.htm

JOINT VENTURE/OPTION AGREEMENT

 

THIS AGREEMENT made as of the day of the 27th day of May, 2009 between

 

Warrior Ventures Incorporated (the "Optionor")

6 Jensen Heights Place

Airdrie, AB T4B 2J3

 

Corporate Legal Counsel

David Guichon

MacLoed Dixon

3700 Canterra Tower

400 Third Ave. SW.

Calgary, AB

 

and 

 

Coastal Pacific Mining Corp. (the "Optionee")

927 Drury Ave. NE

Calgary, AB T2E OM3

 

Corporate Legal Advisor

Caroline Winsor

International Securities Group

1530-9th Ave SE

Calgary, AB

 

Whereas:

The Optionor is the recorded and beneficial holder of a 100% un-divided interest in certain mining claims/property ( the "Property") situated in McNeil and Robertson Townships located south-east of Timmins, Ontario as outlined in attached schedule "A".

The Optionee wishes to earn a 40% undivided interest in the "Property" through the exercised and entire completion of the terms of this agreement.

  

1

  

1. Interpretation

 

Definitions.

 

The following terms, wherever used in this agreement, shall have the meanings set forth below:

 

	
  
	
A.
	
"Acts" means all legislation, as amended from time to time, of the jurisdiction in which the Property is located, applicable to the Property, including all Mining Exploration Operations.

	
  
	
B.
	
"Affiliate" shall have the meaning attributed to it in the Canada Business Corporations Act, R.S.C. 1985, c. C-44, as amended;

	
  
	
C.
	
"Assets" means all tangible and intangible goods, chattels, improvements, or other items including, without limiting the generality of the foregoing, land, buildings, and equipment.

	
                        D.
	
"Costs" means all items of outlay and expense whatsoever, direct or indirect, with respect to mining exploration operations, recorded by the Operator in accordance with this agreement.

	
  
	
E.
	
"Currency" means all dollar amounts expressed in this agreement in lawful currency of Canada.

	
  
	
F.
	
"Expenditures" means all costs, expenses and charges, direct and indirect, of or incidental to the Mining Exploration Operations incurred by the Optionee including, without limiting the generality of the foregoing, a charge for administrative services of the Option agreement not exceeding [10%] of the amount of the costs, expenses and charges of the 2 million dollar expenditure budget.

	
  
	
G.
	
"Interest" means the undivided beneficial percentage interest of each party retained or earned as a result of this agreement in the Property.

	
 H.     
	
"Minerals" shall mean the end products derived from the operations of mining processes and mining operations upon the Property as a mine;

	
  
	
I.
	
"Mining Exploration Operations" means every kind of work done on or in respect of the Property, during the subsistence of the Option by or under the direction of the Optionee/Operator including, without limiting the generality of the foregoing, the work of assessment, geophysical, geochemical and geological surveys, studies and mapping, investigating, drilling, designing, examining, equipping, improving, surveying,
searching for, digging, trucking, sampling, working and procuring mineral ores and metals, surveying and all other work usually considered to be prospecting, exploration, resource development and mining exploration.

	
  
	
J.
	
"Operator" means the party appointed as the Operator in accordance with this agreement, as being David L. Gibson/Gibson and Associates or assigns of the Operator.

	
  
	
K.
	
"Optionor" means Warrior Ventures Incorporated.

	
  
	
L.
	
"Optionee" means Coastal Pacific Mining Corp.

	
                        M. 
	
"Program" means any program to carry our work and incur Costs on the Property and includes as the context requires:

	
  
	
i.
	
a document or documents wherein there is specified in reasonable detail an outline of any and all research, prospecting and exploration and development work proposed to be carried out during the program, the estimated Costs as to be incurred in carrying out the work is to be undertaken and

  

2

  

	
  
	
ii.
	
the preparation of any feasibility report, and shall include any amendments to a program as may be agreed upon by the Optionor and Optionee.

	
  
	
N.
	
"Property" means all of the mineral claims outlined and described in schedule "A".

	
  
	
O.
	
"this Option Agreement" refers to and collectively includes this agreement and every schedule attached.

 

2.  Authority. All transactions, contracts, employments, purchases, operations, negotiations with third parties and any other matter or act undertaken on behalf of or in connection with the Property shall be done, transacted, undertaken or performed in the name of and
by the Operator only.

3.  Grant of Option to earn Interest. The Optionor grants to the Optionee the right to earn a 40% interest in the Property through the entire completion of the terms of this agreement, for a period of 2 years from the date of signing of this agreement. No partial interest
will be incurred through partial completion of this agreement. This right may be exercised in the manner referred to in item 12.

4.  Exercise of Option. In order to maintain in force the working right of the option granted to it, and to exercise the Option, the Optionee must complete in full the following terms within 2 years from the date of signing this agreement:

(i) Incur 2 million dollars within the first year, in expenditure in performance of an exploration work program upon the Property conducted by the Operator.

(ii) A total of $150,000.00 in cash payments made in four instalments.

(iii) The first payment of $30,000.00 due upon the execution of the Option Agreement and the delivery of2 million dollars in work program expenditure capital to an approved trust agent for distribution.

(iv) The remainder of the three cash payments of $40,000.00 will be made on 6 month anniversary dates from the date of execution,

(v) 2nd payment 6 months from date of execution,

(vi) 3rd payment 12 months from date of execution and

(vii) 4th payment due upon 18 months from date of execution.

(viii) Issuance of 250,000 common trading shares upon signing, in Coastal Pacific Mining Corp.

5. Headings. The headings of this Option Agreement and the schedules are solely for convenience of reference and do not affect the interpretation of it or define, limit or construe the contents of any provision of this Option Agreement.

6. Governing Law. This Option Agreement and the rights and obligations and relations of the parties shall be governed by and construed in accordance with the laws of the Province of Alberta and the federal laws of Canada applicable therein (but without giving effect to any conflict
of law rules). The parties agree that the courts of Alberta shall have exclusive jurisdiction to entertain any action or other legal proceedings based on any provisions of this agreement.

7. Initial Operator. The Party holding the single largest interest shall be the initial Operator and shall be entitled to act as the Operator of the exploration programs upon the Property here-in named as Warrior Ventures Incorporated or its assigns.

8. Exploration Program.

	
(a)  
	
Expenditures. The Optionee agrees under the terms of this agreement to fund a 2 million dollars exploration program within the first year of signing the agreement upon the Property through a prepared mining exploration work program. Costs shall only be incurred under and pursuant to Programs prepared
by the Operator. The Operator shall be entitled to an allowance for a cost overrun of [10%] in addition to any budgeted costs.

  

3

  

	
(b)  
	
Preparation of Programs. The Operator shall prepare, or have prepared, a designated work program, containing a statement in reasonable detail the proposed mining exploration operations to be conducted along with estimates of all costs to be incurred.

	
(c)  
	
Commencement of Program. The Operator will proceed with the work upon election of an approved exploration program design and budget in conjunction with the secured financing of the Optionee's work commitment expenditure of2 million dollars.

	
(d)  
	
Program Update. The Operator will supply progress and program updates to the Optionee and Optionor on a weekly to bi-weekly basis.

	
(e)  
	
Distribution of Funds. The 2 million dollars will be placed in trust with a designated trust agent selected by the Operator for distribution in accordance with the on-going expenditures incurred during the process of the designated work program(s). The Operator will submit to the trust agent invoices
on a bi-weekly basis for payment of costs incurred payable upon receipt. An advance of30% of the funds held in trust, will be forwarded to the Operator for distribution to the contractors for the commencement of work program (s), know as startup capital.

	
  
	
9. Title to and Option of the claims.

	
  
	
Optionor's representations and warranties.

	
  
	
The Optionor represents and warrants to the Optionee that:

(A) it is the beneficial and registered or recorded owner of a 100% interest in the Property.

(B) The Property is in good standing, free and clear of all encumbrances,

(C) All of the claims comprising the Property have been validly and properly located, staked, tagged and recorded in accordance with the Ontario Mining Act.

(D) It has the full and undisputed right to deal with the Property as provided in this Option Agreement.

	
  
	
10. Grant of Option to earn Interest. The Optionor grants to the Optionee the right to earn a 40% interest in the Property through the entire completion of the terms of this agreement, for a period of 2 years from the date of signing of this agreement. No partial interest will be incurred through partial completion of this agreement. This right may be exercised
in the manner referred to in item 12.

	
  
	
11. Lapse of Acceleration of the Option. The Optionee let the working right lapse by failing to make any of the payments referred to in Item 4, or may accelerate any or all of these payments or expenditures as outlined in Item 4 to complete the terms of this agreement.

	
  
	
12. Maintenance of the Property. The Optionee agrees that during the currency of the Option, the Operator shall file all work from the designated work program(s), in the form of assessment work, to maintain the Property in good standing and pay all taxes, assessment fees, and other charges lawfully levied
or assessed against the Property from the 2 million dollar work expenditure budget, except for any part of the Property abandoned pursuant to Item 13. The Optionor shall transmit promptly to the Operator any notices pertaining to the taxes, assessments and other charges.

	
  
	
13. Abandonment. The Optionee may at any time, during the currency of the Option, abandon anyone or more of the claims, which comprise the Property. The Optionee shall give the Optionor notice in writing of any abandonment. In the event that any of the claims comprising the Property are abandoned (including the termination of this Option Agreement without the Optionee
having exercised the Option), the Optionee will ensure that the claims are in good standing for a period of at least 6 months from the notice of abandonment.

	
  
	
14. Assessment work. The Operator shall file, on behalf of the Optionee, in whole, the assessment credits as may become available from the mining exploration operations conducted upon the Property during the currency of this agreement.

  

4

  

	
  
	
15. Indemnity. The Optionee shall indemnify and save the Optionor harmless from and against all losses, liabilities, claims, demands, damages, expenses, suits, injury or death in any way referable to the formation of this agreement, provided, that the Optionor shall not be indemnified for any losses, liabilities, claims, demands, damages, expenses, suits, injury
or death resulting from negligence or willful misconduct of the Optionor or its employees, agents, directors, officers, or contractors. The Operator will indemnify and save the Optionor and the Optionee harmless from and against all losses, liabilities, claims, demands, damages, expenses, suits, injury or death arising from the conducted work program(s).

	
  
	
16. Interest Earned. If the Optionee has, on or before the 28th of May 2011 made the payments referred to in Item 4 (ii), and incurred the Expenditures referred to in Item 4 (i), and issuance of capital stock in Coastal Pacific Mining Corp. as referred to in Item 4, the Optionee shall
have the right, by giving written notice to the Optionor on or before the 27th of May, 2011, to become the owner of a 40% undivided interest in all or that part(s) of the Property as the Optionee elects and will be registered upon title of the Property upon full completion oft he agreement.

	
  
	
17. Assignment of Interest. During the currency of the Optionee and Optionor shall not, except as set out, sell, transfer nor assign this Option Agreement or their right or beneficial interest in the Property without the consent of the other party. Either party shall be permitted to assign this Option agreement to an Affiliate on the assigning party providing a
guarantee, in form satisfactory to the Agreement. Any assignment shall be subject to the assignee entering into an agreement, in forma and substance satisfactory to counsel for the other party.

	
  
	 

	
  
	
18. Area of Interest. The area of interest shall be deemed to comprise that area which is included within 3 kilometers of the outermost boundary of the mineral properties which constitute the Property as outlined in Schedule A.

	
  
	 

	
  
	
19. Encumbrances. During the currency of the Option the Optionor and Optionee shall not pledge, mortgage, charge, or otherwise encumber their beneficial interest in the Property or their rights under this Option Agreement.

	
  
	
20. Limitations of Obligations of Optionee. It is understood and agreed that:

	
  
	
(a) that the Optionee shall make cash payments, issue capital stock in Coastal Pacific Mining Corp. and incur expenditure as outlined in Item 4.

	
  
	
(b) Subject to the terms of this agreement, the Optionee may at any time abandon the working right in the option as in Item 13.

	
  
	
(c) In the event that the Optionee abandons the Option agreement or fails to complete the terms of the agreement then no fractional or partial interest in the Property will be granted and no monies will be refunded or returned to the Optionee for cash payments made and expenditures incurred upon the Property.

	
  
	
21. Equipment. In the event that the Optionee abandons the working right and option agreement all buildings, plant, equipment, machinery, tools, appliances and supplies which the Optionee may have brought on the Property, either before or during the period of the working option, may be removed by the Optionee at any time not later than six months after the abandonment
of the option. Any buildings, plant, equipment, machinery, tools, appliances and supplies left on the Property during the six month period shall be at the Optionee's sole risk and, if not removed after the six-month period, shall be removed by the Optionor at expenses to the Optionee.

	
  
	
22. Information. All information in the form of maps, plans, drill logs, and surveys will become the property of the Optionor, and shall be delivered to the Optionee upon completion of the Option agreement.

	
  
	
23. Time. Time shall be of the essence of this agreement and of every part of it and no extension or variation of this agreement shall operate as a waiver of this provision.

  

5

  

	
  
	
24. Confidentiality of information. All information and data concerning or derived from the mining exploration operations shall be kept confidential and, except to the extent required by law, regulation or policy of any Securities Commission or Stock Exchange, or in connection with the filing of an annual information form, or prospectus or statement of material
facts by any party or any of its affiliates, shall not disclose to any person other than an affiliate without the prior consent of the Operator any information related to the exploration of the Property.

	
  
	
25. Entire Agreement. With respect to the subject-matter of this agreement, this agreement:

	
  
	
(a) Sets forth the entire agreement between the parties and any person who have in the past or who are now representing either of the parties;

	
  
	
(b) Supersedes all prior understandings and communications between the parties or any of them, oral or written and

	
  
	
(c) Constitutes the entire agreement between the parties.

  

6

  

Each party acknowledges that this agreement is entered into after full investigation and that no party is relying on any statement or representation made by any other, which is not embodied in this agreement. Each party acknowledges that it shall have no right to rely on ay amendment, promise, modification, statement or representation made
or occurring subsequent to the execution of this agreement unless it is in writing and executed by each party.                                                                                 

 

By initialling each page and signing below both parties representing the Optionor and Optionee agree to the terms and conditions of this agreement:                                                                      

                                                                                                                                                                         

	 Optionor 	 	 	 Optionee	 
	 Warrior Ventures Inc. 	 	 	 Coastal Pacific Mining Corp.	 
	 222 Main Street  	 	 	 927 Drury Ave. NE	 
	 Airdrie, AB     	 	 	 Calgary, AB  T2E 0M3	 
	 	 	 	 	 
	
/s/D. Gibson
	 	 	
/s/ J.K. Berscht
	 
	
Name: D. Gibson, President     
	 	 	
Name: J.K. Berscht, President  
	 
	
Date: May 27/09
	 	 	
Date: May 27/09
	 

  

7

  

Schedule A

 

	
Township/Area
	
Claim Number
	
Recording Date
	
Claim Due Date
	
Status
	
Percent Option
	
Work Required
	
Total Applied
	
Total Reserve
	
Claim Bank

	
MCNEIL
	
1204585
	
2003-Jul-08
	
2010-Feb-03
	
A
	
100 %
	
$ 4,000
	
$ 12,000
	
$ 1,378
	
$ 0

	
MCNEIL
	
1219237
	
2003-Dec-08
	
2010-Jul-06
	
A
	
100 %
	
$ 3,200
	
$ 9,600
	
$ 1,838
	
$ 0

	
MCNEIL
	
1219273
	
2003-Dec-08
	
2010-Jul-06
	
A
	
100 %
	
$ 1,200
	
$ 3,600
	
$ 0
	
$ 0

	
MCNEIL
	
1237005
	
2006-Oct-02
	
2010-Oct-02
	
A
	
100 %
	
$ 6,000
	
$ 12,000
	
$ 891
	
$ 0

	
MCNEIL
	
1237006
	
2007-May-23
	
2010-May-23
	
A
	
100 %
	
$ 2,800
	
$ 2,800
	
$ 0
	
$ 0

	
MCNEIL
	
1237010
	
2007-May-23
	
2010-May-23
	
A
	
100 %
	
$ 6,400
	
$ 6,400
	
$ 0
	
$ 0

	
MCNEIL
	
1237100
	
2007-May-23
	
2010-May-23
	
A
	
100 %
	
$ 6,400
	
$ 6,400
	
$ 0
	
$ 0

	
MCNEIL
	
1237409
	
2007-May-23
	
2010-May-23
	
A
	
100 %
	
$ 6,400
	
$ 6,400
	
$ 0
	
$ 0

	
MCNEIL
	
1248527
	
2003-Oct-21
	
2010-May-19
	
A
	
100 %
	
$ 4,000
	
$ 12,000
	
$ 81
	
$ 0

	
MCNEIL
	
3010873
	
2003-Feb-21
	
2010-Sep-19
	
A
	
100 %
	
$ 6,000
	
$ 24,000
	
$ 3,776
	
$ 0

	
MCNEIL
	
3010874
	
2003-Feb-21
	
2010-Sep-19
	
A
	
100 %
	
$ 3,200
	
$ 12,800
	
$ 2,690
	
$ 0

	
MCNEIL
	
3012718
	
2003-Jul-17
	
2010-Feb-12
	
A
	
100 %
	
$ 6,400
	
$ 19,200
	
$ 26,855
	
$ 0

	
MCNEIL
	
3012719
	
2003-Jul-17
	
2010-Feb-12
	
A
	
100 %
	
$ 4,800
	
$ 14,400
	
$ 1,378
	
$ 0

	
MCNEIL
	
4211423
	
2006-May-03
	
2010-May-03
	
A
	
100 %
	
$ 6,400
	
$ 12,800
	
$ 0
	
$ 0

	
MCNEIL
	
4211424
	
2006-May-03
	
2010-May-03
	
A
	
100 %
	
$ 6,400
	
$ 12,800
	
$ 0
	
$ 0

	
MCNEIL
	
4214664
	
2007-Apr-03
	
2010-Apr-03
	
A
	
100 %
	
$ 3,200
	
$ 3,200
	
$ 2,216
	
$ 0

	
MCNEIL
	
4214920
	
2007-Apr-03
	
2010-Apr-03
	
A
	
100 %
	
$ 6,400
	
$ 6,400
	
$ 1,379
	
$ 0

	
ROBERTSON
	
1219270
	
2003-Dec-08
	
2010-Jul-06
	
A
	
100 %
	
$ 6,400
	
$ 19,200
	
$ 0
	
$ 0

	
ROBERTSON
	
1219271
	
2003-Dec-08
	
2010-Jul-06
	
A
	
100 %
	
$ 6,400
	
$ 19,200
	
$ 0
	
$ 0

	
ROBERTSON
	
1219272
	
2003-Dec-08
	
2010-Jul-06
	
A
	
100 %
	
$ 6,400
	
$ 19,200
	
$ 0
	
$ 0

  

8ex106.htm

Option Agreement

 

This Option Agreement (“Agreement”) is made and entered into as of May 15, 2009 (the “Effective Date”) by and between Coastal Pacific Mining Corp. (“CPM”), a company incorporated in the Province of Alberta, Canada, and Trio Gold Corp (“TRIO”), a company incorporated in the Province of Alberta,
Canada (collectively, the “Parties”).

 

RECITALS

 

	
A.  
	
TRIO has leased and has an option to purchase a 100% interest in 29 unpatented lode mining claims located in Nevada within the Carlin Gold Trend (the “Claims” or the “Property”).  This Mineral Lease and Purchase Option Agreement (the “Mineral Lease”) held by TRIO is attached as Exhibit A. The Claims are also
subject to an exchange agreement between TRIO and McWatters Mining Inc., granting McWatters a 1.5% Net Smelter Return, said agreement attached hereto as Exhibit B (the “Exchange Agreement”).

 

	
B.  
	
TRIO desires to grant to CPM and CPM desires to earn a 45% undivided interest in the Claims, with an option to earn a total 75% interest in the Claims by providing, at their sole cost (including all lease maintenance fees and costs), a bankable feasibility within three years from the date of their election to provide such feasibility.

 

	
C.  
	
When CPM has been deemed to have earned its final undivided interest in the Property of either 45% if it elects not to complete a bankable feasibility study, or 75% if it elects to complete a bankable feasibility study, it is contemplated that CPM and TRIO shall enter into a formal joint venture agreement (the “Joint Venture”).

 

DUE DILIGENCE PERIOD

 

TRIO hereby grants CPM until July 15th, 2009 to conduct its due diligence (“due diligence period”). On or before July 15th, 2009, CPM must notify TRIO of its election to either:

 

	
A.  
	
Elect to earn its respective interest pursuant to this Option Agreement, or

 

	
B.  
	
Elect not to proceed with the right to earn an interest in the Claims, in which case CPM will have no further right or entitlement to earn an interest in the Claims.

 

  

1

  

 

AGREEMENT

 

	
1.  
	
Formation of a Management Committee

 

	
1.1.  
	
During the option period, CPM and TRIO shall form a management committee to oversee exploration of the claims and each party will have equal representation on the committee. The initial size of the committee shall be four, two representatives appointed by CPM and two representatives appointed by TRIO. The size of the committee may be changed at anytime
through unanimous agreement of the Parties provided that CPM and TRIO retain equal representation on the committee. Either party may change its representatives at anytime by providing written notification to the other party of the change. In the event of a tie vote from the management committee during the option period, then TRIO will have the deciding vote.

 

	
1.2.  
	
The management committee shall have full control over the approval of work plans and annual expenditure amounts. Such approval shall not be unreasonably withheld.

 

	
1.3.  
	
The management committee shall remain in effect during and after the option period until such time that it is superseded by the Joint Venture.

 

	
2.  
	
TRIO’s Role as Operator

 

	
2.1.  
	
During the option period, TRIO shall be the operator of the Property and shall be granted all rights necessary or incident to or for the performance of its activities under this Agreement, including, but not limited to, the authority to apply for all necessary permits, licenses and other approvals from the United States of America, the State of Nevada
or any other governmental or other entity having regulatory authority over any part of the Property.

 

	
2.2.  
	
During the option period, TRIO and its employees, agents and independent contractors shall have the exclusive right to enter upon the Property and to conduct such prospecting, exploration, or other mining work as they desire and as is permitted by Federal and Nevada laws.  In addition TRIO shall have the right to bring upon and erect upon the
Property such buildings, plants, machinery and equipment as TRIO may deem necessary or desirable to carry out such activities.

 

	
2.3.  
	
In the conduct of its exploration, development and other activities on the Property, TRIO shall be responsible for compliance with applicable laws and regulations in Nevada, including laws and regulations related to exploration, development, mining and reclamation.

 

  

2

  

 

	
2.4.  
	
During the option period TRIO shall be responsible to make timely payments of required claim maintenance fees, royalties, property taxes, and any other payments required to maintain the Claims.  TRIO shall also be responsible for timely filing and recording of all documents required to evidence the payment of required claim maintenance fees.

 

	
2.5.  
	
Exploration and Claim maintenance costs defined herein are collectively referred to as “Operational Costs”.

 

	
2.6.  
	
TRIO shall permit CPM, or its representative duly authorized in writing, to visit and inspect the Property at all reasonable times and intervals, and data obtained by TRIO as a result of its operations thereon, provided always that CPM or its representative will abide by the rules and regulations laid down by TRIO relating to matters of safety and efficiency
in its operations.

 

	
2.7.  
	
TRIO shall ensure that all work performed by TRIO and its contractors on the Property is done in a good and workmanlike manner and in accordance with all applicable laws, regulations, orders and ordinances of any governmental authority.

 

	
2.8.  
	
TRIO shall deliver to CPM, forthwith upon receipt thereof, copies of all reports, maps, assay results and other technical data compiled by or prepared at the direction of TRIO with respect to the Property. TRIO will provide a weekly progress report to CPM.

 

	
2.9.  
	
Not later than March 31 of each calendar year, TRIO shall deliver to the management committee a work plan and budget for exploration of the Property during that calendar year. The work plan shall describe the exploration goals and general scope of work and the budget shall identify the Operational Costs to be expended and the anticipated schedule of funding
requirements. The management committee shall have final approval authority for the work plan and budget.

 

	
3.  
	
CPM’s Obligations under This Agreement

 

	
3.1.  
	
CPM shall provide $2.0M in funding to cover Operational Costs subject to approval by the management committee defined in Section 1 according to the following schedule:

 

	
·  
	
$1,000,000 on or before July 15th, 2009

 

	
·  
	
$1,000,000 on or before July 15th, 2010

 

  

3

  

 

	
3.2.  
	
Once CPM has provided $2.0M in funding for the project, and provided CPM does not elect to proceed with the bankable feasibility study, then CPM and TRIO shall fund the Operational Costs jointly, with CPM providing 45% of the funds and TRIO providing 55% of the funds. In the event that CPM elects to proceed with a bankable feasibility study, it has to
notify TRIO of its decision to do so within 90 days from the date it has spent the $2.0M in Operational Costs. From that point forward it shall incur all expenses (including all lease maintenance fees and costs) relating to the completion of the bankable feasibility study. Thereafter, the Operational Costs will be shared CPM 75%, and TRIO 25%.

 

	
3.3.  
	
Provided CPM elects to proceed with the Option Agreement to earn an interest in the Claims, then CPM shall issue to TRIO 300,000 shares of its common stock (these shares will be subject to SEC Rule 144). Furthermore, TRIO, as operator of the Claims, will receive an operating fee of 10% of the total Operational Costs.

 

	
4.  
	
TRIO’s Obligations under This Agreement

 

	
4.1.  
	
TRIO shall continue to perform its obligations under the terms of the Mineral Lease.

 

	
5.  
	
Joint Venture after the Option Period

 

	
5.1.  
	
Upon completion of the Option Period, a Joint Venture is to be formed between the Parties.

 

	
6.  
	
Representations and Warranties made by CPM

CPM represents and warrants to TRIO that:

 

	
6.1.  
	
CPM is duly incorporated, validly existing and in good standing under the laws of the Province of Alberta, Canada, and is qualified to do business and is in good standing. CPM has the requisite corporate authority and capacity to carry on business as presently conducted, to enter into this Agreement, and to perform all of its obligations hereunder.

 

	
6.2.  
	
The entering into of this Agreement and the performance by CPM of its obligations hereunder will not violate or conflict with any applicable law or any order, decree or notice of any court or other governmental agency, nor conflict with, or result in a breach of, or accelerate the performance required by any contract or other commitment to which CPM is
a party or by which it is bound.

 

	
6.3.  
	
The CPM Shares will, at the time of delivery to TRIO, be duly authorized and validly allotted and issued as fully paid and non-assessable, free of any liens, charges or encumbrances.

 

  

4

  

 

	
6.4.  
	
No order ceasing or suspending trading in securities of CPM or prohibiting the sale or issuance and delivery of such securities is outstanding, and no proceedings for such purpose are pending or, to the best of the knowledge of CPM, threatened.

 

	
6.5.  
	
On the date of receipt by TRIO of the certificate or certificates representing the CPM Shares, every consent, approval, authorization, order or agreement of the Regulatory Authorities that is required for the issuance of the CPM Shares and the delivery to TRIO of such certificate or certificates to be valid will have been obtained and will be in effect.

 

	
6.6.  
	
The CPM Shares are part of a class of shares of CPM that is currently listed and posted for trading on a recognized Exchange and, at the time of the delivery of the certificates representing the CPM Shares to TRIO, will have been approved and listed on a recognized Exchange.

 

	
6.7.  
	
All requisite corporate action on the part of CPM, and on the part of its officers, directors and shareholders, necessary for the execution, delivery and performance by it of this Agreement and all other agreements contemplated hereby, have been taken.

 

	
7.  
	
Representations and Warranties made by TRIO

TRIO represents and warrants to CPM to the best of its knowledge and understanding that:

 

	
7.1.  
	
The Mineral Lease provided as in Exhibit “A” is valid and in full force and TRIO is not in violation of any of the terms of the agreement.  Furthermore, the Property is free and clear of any other liens, claims, or encumbrances other than those identified in the Mineral Lease and the Exchange Agreement as per Exhibit B.

 

	
7.2.  
	
All operations and activities conducted by or on behalf of TRIO on the Claims have been conducted in compliance with applicable federal, state and local laws, rules and regulations.

 

	
7.3.  
	
TRIO is in good standing under the laws of the Province of Alberta.

 

	
7.4.  
	
All requisite action on the part of TRIO, and on the part of its officers and members, necessary for the execution, delivery, and performance by it of this Agreement and all other agreements contemplated hereby, have been taken.

 

	
8.  
	
Termination of this Option Agreement

	
8.1.  
	
CPM may in its sole discretion terminate this Agreement at any time by giving not less than 30 days prior written notice to that effect to TRIO.  Upon expiry of the 30 day notice period,

 

  

5

  

or if the Agreement is terminated pursuant to any other provision of this Agreement, the Agreement will be of no further force and effect.  Upon such termination, CPM shall have no further obligation to incur Operational Costs, however, it will be responsible for the payment of all outstanding Operational Costs incurred up to and
including the termination date, and shall have no further obligations or liabilities to TRIO under this Agreement or with respect to the Property. CPM will be responsible to reclaim (in accordance with applicable law) any disturbances of the Property made while this Agreement was in effect.

 

	
8.2.  
	
In the event that CPM is in default in providing the funds pursuant to clause 3.1 of this Agreement, then TRIO may notify CPM of the default, and upon receipt of this default notice from TRIO, CPM will have a period of 30 days to cure said default, failing which this Agreement will automatically terminate.

 

	
9.  
	
Assignment

	
9.1.  
	
This Agreement shall be binding upon and inure to the benefit of the parties and their permitted successors and assigns.

 

	
9.2.  
	
CPM may, upon the prior written approval of TRIO, which approval shall not be unreasonably withheld, assign this Agreement to other parties that are not affiliated with CPM at any time, provided that the assignee agrees in writing to assume all CPM’s obligations under this Agreement.  Upon such assignment, or an assignment to an affiliate
(as described below), CPM shall have no further obligations or liabilities under this Agreement.

 

	
9.3.  
	
At any time, and without the consent of TRIO, CPM may assign this Agreement (a) to one or more of its affiliates upon the affiliate assuming all of CPM’s obligations under this Agreement (affiliate meaning any entity which directly or indirectly controls or is controlled by, or under common control with CPM); (b) in connection with a pledge
by CPM for financing purposes, (c) in connection with a corporate merger or reorganization involving CPM, or (d) in connection with a sale of all or substantially all of CPM’s assets.

 

	
9.4.  
	
TRIO may, upon the prior written approval of CPM, which approval shall not be unreasonably withheld, assign its interest in the Property and this Agreement to other parties that are not affiliated with TRIO at any time, provided that the assignee agrees in writing to assume all TRIO’s obligations under this Agreement.  Upon such assignment,
or an assignment to an affiliate (as described below), TRIO shall have no further obligations or liabilities under this Agreement.

 

  

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9.5.  
	
At any time, and without the consent of CPM, TRIO may assign its interest in the Property and this Agreement (a) to one or more of its affiliates upon the affiliate assuming all of TRIO’s obligations under this Agreement (affiliate meaning any entity which directly or indirectly controls or is controlled by, or under common control with, TRIO);
(b) in connection with a pledge by TRIO for financing purposes, (c) in connection with a corporate merger or reorganization involving TRIO, or (d) in connection with a sale of all or substantially all of TRIO’s assets.

 

	
10.  
	
Dispute Resolution

	
10.1.  
	
If the Parties are unable to resolve a dispute arising under this Agreement, then either party may request that the matter be determined by binding arbitration. The parties shall first endeavor to select a single arbitrator who, by virtue of education and experience, has knowledge and expertise regarding gold exploration contracts and the conduct of gold
exploration, development, mining, and processing activities. If the parties are unable to agree upon a single arbitrator within fifteen (15) days, then each party shall select one arbitrator, and the two arbitrators will choose a third arbitrator. Arbitration proceedings will be conducted in Reno, Nevada in accordance with the Rules and Procedures of the American Arbitration Association. The arbitrators may, in their discretion, direct one party to pay all or some part of the attorney's fees and costs incurred
by the other party. The parties may conduct discovery in accordance with the Nevada Rules of Civil Procedure. The arbitrators' decision shall be final and binding, and the prevailing party may submit the arbitrators' decision to a court for enforcement.

 

	
11.  
	
Entire Agreement

	
11.1.  
	
This Agreement contains the entire agreement between the parties relating to the Property.

 

	
12.  
	
General

	
12.1.  
	
Notice to CPM or to TRIO shall be sufficiently given if delivered personally, or if sent by prepaid mail or reputable overnight courier, or if transmitted by facsimile to such party:

 

In the case of a notice to CPM at:

 

Coastal Pacific Mining Corp.

              727 Drury Ave. NE

              Calgary, Alberta T2E-0M3

 

  

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Facsimile number:  (403) ___-____

                                Attention:  John Kenney Berscht

 

In the case of a notice to TRIO at:

 

Trio Gold Corp

                                        Suite 145, 251 Midpark Blvd. SE

                                        Calgary, AB T2X-1S3

 

Facsimile number:  (403) 262-9759

                                       Attention:  Harry Ruskowsky

 

or at such other address or addresses as the party to whom such notice or other writing is to be given shall have last notified the party giving the same in the manner provided in this section.  Any notice or other writing delivered to the party to whom it is addressed as set forth above shall be deemed to have been given and received
on the day it is so delivered at such address, provided that if such day is not a business day in the city where the notice is delivered, then such notice or other writing shall be deemed to have been given and received on the next following business day.  Any notice or other writing submitted by facsimile or other form of recorded communication shall be deemed to have been given and received on the first business day after its transmission.

 

	
12.2.  
	
Each of CPM and TRIO shall, with reasonable diligence, do all such things and provide all such reasonable assurances and assistance as may be required to consummate the transactions contemplated by this Agreement and each party shall provide such further documents or instruments required by the other party as may reasonably be necessary or desirable in
order to give effect to the terms and conditions of this Agreement and carry out its provisions at, before or after the Effective Date.

 

	
12.3.  
	
This Agreement may be executed by each of CPM and TRIO in counterparts and by facsimile, each of which when so executed and delivered shall be an original, but both such counterparts, whether executed and delivered in the original or by facsimile, shall together constitute one and the same agreement.

 

	
12.4.  
	
All dollar references in this Agreement are to the United States dollars.

 

	
12.5.  
	
This Agreement may not be amended or modified, nor may any obligation hereunder be waived, except by writing duly executed on behalf of all Parties, and unless otherwise specifically provided in such writing, any amendment, modification, or waiver shall be effective only in the specific instance and for the purpose it is given.

 

  

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13.  
	
Signatures

IN WITNESS WHEREOF, the parties have executed this Exploration and Development Agreement effective as of the date first set forth above.

 

	
for Coastal Pacific Mining Corp.

“Signed”   John Kenney Berscht

	
John Kenney Berscht

President and Chief Executive Officer

 

 

	
for TRIO GOLD CORP.

“Signed”   Harry Ruskowsky

	
Harry Ruskowsky

President and Chief Executive Officer

 

  

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