Document:

ex_10-6.htm

    
      

      

    

    Exhibit 10.6

     

     

    
      OPTION
AGREEMENT

       

      TO
ACQUIRE MINING CONCESSION

       

      Santa
Rosa

       

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

       

      Whereas
Farellón has an option to purchase the Santa Rosa mining holdings in Chile
(“Property”) from Antolin Amadeo Crespo García, dated 10th September 2007,
recorded in the register of the Conservador de Minas in Freirina on 13th
September 2007, and attached as exhibit A (the “Crespo Agreement”), and has
agreed to assign the Crespo Agreement to Polymet, for valuable consideration,
the receipt and sufficiency of which are acknowledged, the parties agree
that:

       

      
        	
                1.  

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

              

      

      
        	
                a.  

              	
                The
      Option begins on the date of this agreement and ends on 5th August 2008
      (the “Term”).

              

      

      
        	
                b.  

              	
                As
      consideration for granting the Option, Polymet will pay Farellón $9,500
      when this agreement is signed and $8,500 per month on the fifth day of the
      month for five months ending on 5th July 2008, for a total payment of
      $52,000.

              

      

      
        	
                c.  

              	
                During
      the Term, Polymet may conduct any exploration permitted by the Crespo
      agreement except extraction for
exploitation.

              

      

      
        	
                d.  

              	
                Farellón
      will pay any Property costs that are due during the Term and required to
      keep the Crespo Agreement in good standing, and Polymet will reimburse
      Farellón on request.

              

      

      
        	
                e.  

              	
                Polymet
      can exercise the option at any time until the end of the Term by notifying
      Farellón in writing that it intends to exercise the Option and paying
      Farellón $50,000 by the close of business on 5th August
    2008.

              

      

      
        	
                f.  

              	
                The
      Option ends if Polymet fails to make any of the payments required during
      the Term or on 5th August 2008 if Polymet fails to notify Farellón that it
      intends to exercise the Option and pay the $50,000
  due.

              

      

      
        	
                g.  

              	
                All
      currency amounts are stated in United States
  dollars.

              

      

       

      
        	
                2.  

              	
                Farellón

              

      

      
        	
                a.  

              	
                may
      continue to mine the Property and exploit any minerals extracted during
      the Term and will pay Polymet a royalty equal to 5% of the net proceeds
      that it receives from Enami or other
processor,

              

      

      
        	
                b.  

              	
                will
      deliver to Polymet monthly statements disclosing the ore delivered for
      processing and the net proceeds realized from the sale by the end of the
      month in which Farellón receives its payment from Enami,
    and

              

      

      
        	
                c.  

              	
                will
      pay the patentes due at the end of March
2008.

              

      

       

      
        	
                3.  

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

              

      

       

      
        	
                4.  

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

              

      

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

         

      

      
        	
                5.  

              	
                Farellón
      represents and warrants to Polymet
that:

              

      

      
        	
                a.  

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

              

      

      
        	
                b.  

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

              

      

      
        	
                c.  

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

              

      

      
        	
                d.  

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

              

      

       

      
        	
                6.  

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

              

      

       

      
        	
                7.  

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

              

      

       

      
        	
                8.  

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

              

      

       

      
        	
                9.  

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

              

      

       

      
        	
                10.  

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

              

      

       

      
        	
                11.  

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

              

      

       

      
        	
                12.  

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

              

      

       

      
        	
                13.  

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

              

      

       

      
        	
                14.  

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

              

      

       

      
        	
                15.  

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

              

      

       

      
        	
                16.  

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

              

      

       

      The
parties’ signatures below are evidence of their agreement.

       

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

                  	 	 	
                    /s/ Kevin Robert
      Mitchell

                  	 
	
                    Kevin Robert Mitchell

                     

                    
                      Signed
      on February 1, 2008

                    

                  	 	 	
                    Kevin Robert Mitchell

                     

                    
                      Signed
      on February 1, 2008

                    

                  	 

          

        

      

      
 

       

      2ex_10-7.htm

    
      

      

    

    Exhibit
10.7

     

    

      NOTARY

      Ricardo
Olivares Pizarro

      A. Prat
No. 960 – Locale 14 – Fax Phone (51) 610121

      E-mail:
notariaolivares@terra.cl

      Vallenar
– III Region

      

      Digest
No. 943

      Yor//

      

      Seal:
Notary Public, Ricardo Olivares Pizarro, Vallenar - Signature

      

      CONTRACT
FOR THE OPTION TO PURCHASE MINING HOLDINGS

      

      ANTOLIN
AMADEO CRESPO GARCIA

      

      TO

      

      MINERA
FARELLON LIMITADA

      

      - - - - -
- - - - - - - - - - - - - - - - -

      

      In
Vallenar, Republic of Chile, on the tenth of September of two thousand and
seven, before me, RICARDO OLIVARES PIZARRO, Attorney, Notary Public and
Conservator of Commerce and Mines, Titleholder, with an office at Prat Street
No. nine hundred and sixty, locale fourteen, Vallenar, appeared: Mr. ANTOLIN
AMADEO CRESPO GARCIA, Chilean, married, separation of goods, industrial miner,
National I.D. No. four million eight hundred and seventy-eight thousand five
hundred and seventy-four dash three, residing at Carlos Dittborn No. four
hundred and twenty-one, Town of Los Alemanes, Vallenar, hereafter the “Offering
Party”; and Mr. KEVIN ROBERT MITCHELL, Canadian, married, separation of goods,
miner, I.D. Document for Foreigners No. fourteen million four hundred and
ninety-

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      eight
thousand nine hundred and seventeen dash one. He is representing the company,
MINERA FARELLON LIMITADA, a Chilean company engaged in what is indicated in the
company name, Sole Taxation List No. seventy-six million eight hundred and
fourteen thousand one hundred and seventy dash three, both with the address Prat
one thousand and fifty-one, Office No. four, hereafter known as “Minera
Farellon”. The persons appearing are of legal age and verified their identity
with the above-mentioned I.D. Documents and stated: That in virtue of this
document, they have come to execute the following contract for the option to
purchase Mining Holdings, in agreement with what is stipulated in Articles one
hundred and sixty-nine and the others that are applicable of the Mining Code.
FIRST ARTICLE:
Individualization of the Holdings: Mr. Antolin Amadeo Crespo Garcia
declares that he is the sole and exclusive owner of the following Mining
Holdings: One) SANTA ROSA UNO AL SEIS, located in Sierra Cordon El Tomate,
Quebrada de Agua Grande, Commune of Freirina, Province of Huasco, Third Region
of Atacama. The measurement document is registered on Page No. fifty-eight No.
fifteen, of the Property Registry of the Conservator of Mines of Freirina for
the year nineteen eighty-nine. The control in the name of the Owner is
registered on Page No. fifty-eight, No. thirty-five of the Registry of Mining
Property of the Conservator of Mines of Freirina for the years two thousand and
one; and Two) PORFIADA UNO AL DIEZ, located to the North of Sierra Cordon, El
Tomate, Commune of Freirina, Province of Huasco, Third Region of Atacama,
registered on Page No. fifteen, No. seven, of the Property Registry of the
Conservator of Mines of Freirina for the year two thousand and four. The mining
concessions for exploitation or holdings detailed above shall hereafter jointly
be called “Mining Holdings” and/or “Properties”. SECOND ARTICLE: One. Option
Offer: In virtue of this document, the Offering Party grants to Minera
Farellon the option to purchase and irrevocably offers to sell, cede and
transfer to Minera Farellon the Mining Holdings detailed in the First Article of
this document. Two.
Price of the Purchase/Sale Offered: The price of the purchase/sale
offered is the amount in pesos, national currency, equivalent to six hundred
thousand dollars of the United States of America. Notwithstanding the above, in
the case where the purchase option is exercised before the term for the
expiration of the purchase option indicated in the following number, the price
for the purchase/sale offered shall increase in the amount of the price for the
option that has not accrued inters and been paid, in agreement with the
Fifteenth Article below.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

         

      

      The
Mining Holdings and the minerals that they contain shall be sold and transferred
with all of their uses, rights, customs and easements, free from all
encumbrances, prohibitions, resolutory conditions, embargos or pending
litigation, as well as any other impediment whatsoever that could affect their
free use, enjoyment and disposition: free from all superposition, and with their
mining patents totally paid. The vendor or Offering Party is responsible for the
Warranty of Title and Right of Possession according to the Law. Three. Option Term:
The term of the option, within which Minera Farellon shall be able to freely
accept or refuse the purchase/sale offer of the holdings, shall expire the
twentieth of July of two thousand and eleven. Four: Option Price:
The price of the option indicated in this document is the sum in
pesos, national currency, equivalent to four hundred thousand dollars of the
United States of America, which shall be paid under the terms that are indicated
in the Fourth Article of this document. THIRD ARTICLE: Mr.
Kevin Robert Mitchell, as the representative of Minera Farellon Limitada,
accepts the stipulations of this contract for the company that he is
representing under the terms of Article one hundred and sixty-nine and the
others that are applicable of the Mining Code, in virtue of the fact that the
Third Clause grants Minera Farellon the power to accept or reject the offer made
by the Offering Party. Therefore, Minera Farellon shall be able, at any time
whatsoever counted from the date of this document and up to the expiration of
the term indicated in No. Three of the Second Article of this document, to
decide to accept the purchase/sale of the Mining Holdings under the terms
indicated in this contract. FOURTH ARTICLE. Option
Payment: The price of the option contract that is indicated in this
document is the amount of four hundred thousand dollars of the United States of
America, payable in pesos, national currency, in the following amounts and
times: /a/ the sum of seven thousand and five hundred dollars of the United
States of America, equivalent on this date to the sum of three million nine
hundred and nine thousand one hundred and fifty pesos national currency that
Minera Farellon paid prior to this legal action in cash, with the Offering Party
declaring that it was received to his complete satisfaction; /b/ the sum in
pesos on the day of payment equivalent to seven thousand and five hundred
dollars of the United States of America to be paid on the twentieth of October
of the year two thousand and seven; /c/ the sum in pesos on the day of payment
equivalent to seven 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      thousand
and five hundred dollars of the United States of America to be paid on the
twentieth of November of the year two thousand and seven, or the following
working day if that day falls on a statutory holiday or non-working day; /d/ the
sum in pesos on the day of payment equivalent to seven thousand and five hundred
dollars of the United States of America to be paid on the twentieth of December
of the year two thousand and seven, or the following working day if that day
falls on a statutory holiday or non-working day; /e/ the sum in pesos on the day
of payment equivalent to seven thousand and five hundred dollars of the United
States of America to be paid on the twentieth of January of the year two
thousand and eight, or the following working day if that day falls on a
statutory holiday or non-working day; /f/ the sum in pesos on the day of payment
equivalent to seven thousand and five hundred dollars of the United States of
America to be paid on the twentieth of February of the year two thousand and
eight, or the following working day if that day falls on a statutory holiday or
non-working day; /g/ the sum in pesos on the day of payment equivalent to seven
thousand and five hundred dollars of the United States of America to be paid on
the twentieth of March of the year two thousand and eight, or the following
working day if that day falls on a statutory holiday or non-working day; /h/
the sum
in pesos on the day of payment equivalent to seven thousand and five hundred
dollars of the United States of America to be paid on the twentieth of April of
the year two thousand and eight, or the following working day if that day falls
on a statutory holiday or non-working day; /i/ the sum in pesos on the day of
payment equivalent to seven thousand and five hundred dollars of the United
States of America to be paid on the twentieth of May of the year two thousand
and eight, or the following working day if that day falls on a statutory holiday
or non-working day; /j/ the sum in pesos on the day of payment equivalent to
seven thousand and five hundred dollars of the United States of America to be
paid on the twentieth of June of the year two thousand and eight, or the
following working day if that day falls on a statutory holiday or non-working
day; /k/ the sum in pesos on the day of payment equivalent to seven thousand and
five hundred dollars of the United States of America to be paid on the twentieth
of July of the year two thousand and eight, or the following working day if that
day falls on a statutory holiday or non-working day; /l/ the sum in pesos on the
day of payment equivalent to seven thousand and five hundred dollars of the
United States of America to be paid on the twentieth of August of the year two
thousand and eight, or the following working 

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

         

      

      day if
that day falls on a statutory holiday or non-working day; /m/ the sum in pesos
on the day of payment equivalent to seven thousand and five hundred dollars of
the United States of America to be paid on the twentieth of September of the
year two thousand and eight, or the following working day if that day falls on a
statutory holiday or non-working day; /n/ the sum in pesos on the day of payment
equivalent to seven thousand and five hundred dollars of the United States of
America to be paid on the twentieth of October of the year two thousand and
eight, or the following working day if that day falls on a statutory holiday or
non-working day; /ñ/ the sum in pesos on the day of payment equivalent to seven
thousand and five hundred dollars of the United States of America to be paid on
the twentieth of November of the year two thousand and eight, or the following
working day if that day falls on a statutory holiday or non-working day; /o/ the
sum in pesos on the day of payment equivalent to seven thousand and five hundred
dollars of the United States of America to be paid on the twentieth of December
of the year two thousand and eight, or the following working day if that day
falls on a statutory holiday or non-working day; /p/ the sum in pesos on the day
of payment equivalent to seven thousand and five hundred dollars of the United
States of America to be paid on the twentieth of January of the year two
thousand and nine, or the following working day if that day falls on a statutory
holiday or non-working day; /q/ the sum in pesos on the day of payment
equivalent to seven thousand and five hundred dollars of the United States of
America to be paid on the twentieth of February of the year two thousand and
nine, or the following working day if that day falls on a statutory holiday or
non-working day; /r/ the sum in pesos on the day of payment
equivalent to seven thousand and five hundred dollars of the United States of
America to be paid on the twentieth of March of the year two thousand and nine,
or the following working day if that day falls on a statutory holiday or
non-working day; /s/ the sum in pesos on the day of payment equivalent to seven
thousand and five hundred dollars of the United States of America to be paid on
the twentieth of April of the year two thousand and nine, or the following
working day if that day falls on a statutory holiday or non-working day; /t/ the
sum in pesos on the day of payment equivalent to seven thousand and five hundred
dollars of the United States of America to be paid on the twentieth of May of
the year two thousand and nine, or the following working day if that day

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

         

      

      falls on
a statutory holiday or non-working day; /u/ the sum in pesos on the day of
payment equivalent to seven thousand and five hundred dollars of the United
States of America to be paid on the twentieth of June of the year two thousand
and nine, or the following working day if that day falls on a statutory holiday
or non-working day; /v/ the sum in pesos on the day of payment equivalent to
seven thousand and five hundred dollars of the United States of America to be
paid on the twentieth of July of the year two thousand and nine, or the
following working day if that day falls on a statutory holiday or non-working
day; /w/ the sum in pesos on the day of payment equivalent to seven thousand and
five hundred dollars of the United States of America to be paid on the twentieth
of August of the year two thousand and nine, or the following working day if
that day falls on a statutory holiday or non-working day; /x/ the sum in pesos
on the day of payment equivalent to ten thousand dollars of the United States of
America to be paid on the twentieth of September of the year two thousand and
nine, or the following working day if that day falls on a statutory holiday or
non-working day; /y/ the sum in pesos on the day of payment equivalent to ten
thousand dollars of the United States of America to be paid on the twentieth of
October of the year two thousand and nine, or the following working day if that
day falls on a statutory holiday or non-working day; /z/ the sum in pesos on the
day of payment equivalent to ten thousand dollars of the United States of
America to be paid on the twentieth of November of the year two thousand and
nine, or the following working day if that day falls on a statutory holiday or
non-working day; /aa/ the sum in pesos on the day of payment equivalent to ten
thousand dollars of the United States of America to be paid on the twentieth of
December of the year two thousand and nine, or the following working day if that
day falls on a statutory holiday or non-working day; /bb/ the sum in pesos on
the day of payment equivalent to ten thousand dollars of the United States of
America to be paid on the twentieth of January of the year two thousand and ten,
or the following working day if that day falls on a statutory holiday or
non-working day; /cc/ the sum in pesos on the day of payment equivalent to ten
thousand dollars of the United States of America to be paid on the twentieth of
February of the year two thousand and ten, or
the following working day if that day falls on a statutory holiday or
non-working day; /dd/ the sum in pesos on the day of payment equivalent to ten
thousand dollars of the

       

      
        
          
          

        

        
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       United
States of America to be paid on the twentieth of March of the year two thousand
and ten, or the following working day if that day falls on a statutory holiday
or non-working day; /ee/ the sum in pesos on the day of payment equivalent to
ten thousand dollars of the United States of America to be paid on the twentieth
of April of the year two thousand and ten, or the following working day if that
day falls on a statutory holiday or non-working day; /ff/ the sum in pesos on
the day of payment equivalent to ten thousand dollars of the United States of
America to be paid on the twentieth of May of the year two thousand and ten, or
the following working day if that day falls on a statutory holiday or
non-working day; /gg/ the sum in pesos on the day of payment equivalent to ten
thousand dollars of the United States of America to be paid on the twentieth of
June of the year two thousand and ten, or the following working day if that day
falls on a statutory holiday or non-working day; /hh/ the sum in pesos on the
day of payment equivalent to ten thousand dollars of the United States of
America to be paid on the twentieth of July of the year two thousand and ten, or
the following working day if that day falls on a statutory holiday or
non-working day; /ii/ the sum in pesos on the day of payment equivalent to ten
thousand dollars of the United States of America to be paid on the twentieth of
August of the year two thousand and ten, or the following working day if that
day falls on a statutory holiday or non-working day; /jj/ the sum in pesos on
the day of payment equivalent to ten thousand dollars of the United States of
America to be paid on the twentieth of September of the year two thousand and
ten, or the following working day if that day falls on a statutory holiday or
non-working day; /kk/ the sum in pesos on the day of payment equivalent to ten
thousand dollars of the United States of America to be paid on the twentieth of
October of the year two thousand and ten, or the following working day if that
day falls on a statutory holiday or non-working day; /ll/ the sum in pesos on
the day of payment equivalent to ten thousand dollars of the United States of
America to be paid on the twentieth of November of the year two thousand and
ten, or the following working day if that day falls on a statutory holiday or
non-working day; /mm/ the sum in pesos on the day of payment equivalent to ten
thousand dollars of the United States of America to be paid on the twentieth of
December of the year two thousand and ten, or the following working day if that
day falls on a statutory holiday or non-working day; /nn/ the sum in pesos on
the day of payment equivalent to ten thousand dollars of the United States of
America to be paid on the twentieth of January of the year two thousand and
eleven, 

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      or the
following working day if that day falls on a statutory holiday or non-working
day; /ññ/ the sum in pesos on the day of payment equivalent to ten thousand
dollars of the United States of America to be paid on the twentieth of February
of the year two
thousand and eleven, or the following working day if that day falls on a
statutory holiday or non-working day; /oo/ the sum in pesos on the day of
payment equivalent to ten thousand dollars of the United States of America to be
paid on the twentieth of March of the year two thousand and eleven, or the
following working day if that day falls on a statutory holiday or non-working
day; /pp/ the sum in pesos on the day of payment equivalent to ten thousand
dollars of the United States of America to be paid on the twentieth of April of
the year two thousand and eleven, or the following working day if that day falls
on a statutory holiday or non-working day; /qq/ the sum in pesos on the day of
payment equivalent to ten thousand dollars of the United States of America to be
paid on the twentieth of May of the year two thousand and eleven, or the
following working day if that day falls on a statutory holiday or non-working
day; and /rr/ the sum in pesos on the day of payment equivalent to ten thousand
dollars of the United States of America to be paid on the twentieth of June of
the year two thousand and eleven, or the following working day if that day falls
on a statutory holiday or non-working day. If Minera Farellon decides not to
accept the purchase/sale offer indicated in this document before the due date of
any of the terms indicated in letters /b/ to /rr/ above, both included, the
obligation that Minera Farellon has to pay the following quotas of seven
thousand and five hundred dollars and/or ten thousand dollars of the United
States of America shall cease immediately. These are the payments listed in
letters /b/ to /rr/ above, both included, of which the due date may be after the
withdrawal date. FIFTH
ARTICLE. Acceptance of the Offer: If Minera Farellon decides to accept
the offer within the term agreed on to do so, the company shall state the desire
to do so through a public document declaring that it wishes to accept the offer.
In the event that Minera Farellon accepts the offer to sell and exercise the
option to purchase prior to the date indicated in letter /rr/ of the Fourth
Article, it shall be necessary to pay, as an increase in the purchase/sale price
and in agreement with what is indicated in the Second Article Number Two, all of
the sums indicated in letters /b/ to /rr/ of the Fourth Article above that may
not have been paid prior to the date of 

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

         

      

      the
acceptance of the offer, under the same terms indicated in the above-mentioned
letters. The corresponding Conservator of Mines, after seeing a copy of this
document and a copy of this document and a copy of the document showing the
acceptance by Minera Farellon, shall register the Mining Holdings indicated in
the acceptance document in the name Minera Farellon Limitada. All of this is in
virtue of what is stipulated in the final section of Article one hundred and
sixty-nine of the Mining Code according to which, when it has to do with an
option contract for the purchase of rights specifically regulated by said Code,
it shall be sufficient to have the sole acceptance of the irrevocable offer for
the purchase/sale offered to be perfected. The sole requirement is that the
offer as well as the acceptance must be verified in a public document.
SIXTH ARTICLE. Payment of
Purchase/Sale Price: Sixth One) The price of the purchase/sale indicated
in this document shall be paid, if the purchase offer mentioned in this document
is exercised, through monthly payments until the amount of the six hundred
thousand dollars mentioned above is paid, from the royalties – hereafter the
“Royalties” – of one point five percent of the value corresponding to the net
sale of minerals that are extracted from the holdings and are paid by the
National Mining Company, hereafter and indistinctly called “Enami” or by any
other purchaser whatsoever. The payment and liquidation of the Royalties shall
be effected monthly within the ten days following the date on which Enami or
another purchaser has made the respective payment. Through this document, the
parties agree on a minimum guaranteed monthly payment equivalent to one thousand
dollars of the United States of America, from the date on which Minera Farellon
begins the exploitation of the holdings after the option is exercised. For this
purpose, Minera Farellon shall prepare the report regarding the monthly payment
of the Royalties including sufficient information to determine the amount, which
shall be delivered to Mr. Antolin Amadeo Crespo Garcia, together with the amount
corresponding to the Royalties. If Mr. Antolin Amadeo Crespo Garcia does not
make any observations regarding the payment within the seven days following this
delivery by Minera Farellon, it shall be understood that final and total
approval has been given to said liquidation and the corresponding payment.
Included in the sufficient information that shall have to be provided by Minera
Farellon, shall be the invoices for the sale to Enami or another purchaser,
together with the respective

       

      
        
          
          

        

        
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      shipping
logs. In the case where Mr. Antolin Amadeo Crespo Garcia has observations to
make regarding said documents, he shall be able to apply to Minera Farellon for
authorization to have access to the information related to the Royalties and
shall have to send the request the required amount of time in advance. At any
time whatsoever, until the amount indicated in this article is totally paid,
Minera Farellon shall be able to terminate the payment of the Royalties
mentioned above, for which the company shall have to pay Mr. Antolin Amadeo
Crespo Garcia the difference that exists between what was effectively paid to
said date on account for the Royalties and what remains to be paid to complete
the six hundred thousand dollars indicated above. Sixth. Two) In the event that
Minera Farellon begins the exploitation of the Mining Holdings prior to the date
of the exercising of the purchase option, it shall have to pay the Offering
Party the Royalties indicated above. If after having initiated the exploitation
of the Mining Holdings, Minera Farellon decides to accept the offer for the sale
and exercise the option to purchase the Mining Holdings, the amounts paid for
the concept of the Royalties in the case described in this number, shall be
considered as an advance payment towards the price of the purchase/sale. In
addition, in the event where Minera Farellon decides not to accept the offer of
the sale and not to exercise the option to purchase the Mining Holdings,
the sums paid for the concept of Royalties in the case described in this number
shall be kept by the Offering Party as an indemnity paid for damages. SEVENTH ARTICLE.
Irrevocability: This contract shall have the nature of a contract for the
option to purchase Mining Holdings indicated in Article one hundred and
seventy-nine of the Mining Code and it is agreed on with the nature of being
irrevocable. Therefore, it shall be sufficient to have the sole acceptance of
MINERA FARELLON LIMITADA, at any time whatsoever, of the irrevocable offer that
is presented in this legal action, for the purchase/sale to be perfected.
Nevertheless, if the term of effectiveness of the option has expired, and Minera
Farellon has not accepted the offer of the sale of the holdings that are
referred to in this document, it shall be understood that Minera Farellon has
decided not to exercise the option that is granted in this document. If any of
the quotas of the price of the option is not paid within the terms indicated in
the Fourth Article of this document, it shall be understood that Minera Farellon
has withdrawn from the option, without the above-mentioned unpaid amounts of the
quota being payable. In this event, the Offering Party shall be able to require
the cancellation of the registrations that may have been 

       

      
        
          
          

        

        
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      made in
virtue of this contract in relation to the Mining Holdings indicated. EIGHTH ARTICLE.
Authorizations: Antolin Amadeo Crespo Garcia irrevocably authorizes
Minera Farellon, while the term for exercising the option that is granted herein
is pending, to be able to carry out on the Mining Holdings detailed in this
document the explorations, examinations, prospecting and exploitations, being
able to carry out all of the works and projects with the express declaration
that Minera Farellon shall be able to exercise all of the active easements that
benefit said holdings and that, in addition, they shall also be able to make use
of the minerals that are extracted because of their works. Minera Farellon shall
be exclusively responsible for the mining works of exploration and exploitation
that it carries out on the holdings, as well as the effects that are forthcoming
from said works, duly fulfilling all of the legal dispositions that are
applicable in this regard. NINTH ARTICLE. No
Restitution: If Minera Farellon decides not to accept the offer that is
being made regarding the Mining Holdings referred to in this document, the
obligation regarding the payments of any type whatsoever according to what is
indicated in the Fourth Article shall cease immediately, but the Offering Party
shall not have the obligation of returning the payments corresponding to the
price of the option that may have already been received. These shall be retained
as the sole and exclusive indemnity for damages of any type whatsoever, in kind
or in amount, that could have been caused by the fact of having been impeded
from exploring and exploiting, as well as from negotiating these holdings with
third parties during the life of the option, or caused by the decision of Minera
Farellon not to accept the offer or derived from any other causes or reasons
related to the contract contained in this document. TENTH ARTICLE.
Withdrawal: At any
time whatsoever, Minera Farellon shall be able to make a declaration through a
public document, which shall be noted in the margin of the original version of
this document, expressing the decision not to accept the offer that is being
made in this document and, from the date of this marginal notation, all of the
obligations contracted in virtue of this document shall cease for Minera
Farellon, of any type whatsoever, particularly the obligations regarding making
the payments that are referred to in the Fourth Article of this document. In the
case of withdrawal, Minera Farellon shall provide for the Offering Party,
without any cost whatsoever, all of the information that may have been obtained
from the exploration that may have been 

       

      
        
          
          

        

        
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      made on
the holdings. This information shall include the reports that contain the
complete or partial results from the studies – if any were done – geological,
geochemical, metallurgical, and hydrological, exploration reports, geophysical
plans and reports and all of the interpretive information obtained from the
works of exploration and exploitation carried out. None of what is indicated in
this article may be interpreted as Minera Farellon having the obligations to
carry out studies or write reports, whatever the nature of these may be. ELEVENTH ARTICLE.
Maintenance of Holdings: The Offering Party shall have to adopt, at its
own exclusive cost, all of the judicial and extra-judicial measures that may be
necessary to duly keep constituted and in effect the rights emanating from the
Mining Holdings detailed in this document and to defend these rights and
minerals that the holdings contain from any pretensions of third parties.
Without prejudice to what is stipulated above, Minera Farellon Limitada shall
reimburse the Offering Party for all of the amounts paid for the concept of the
payment of mining patents that support the holdings object of this option, which
were duly incurred during the life of the option. TWELFTH ARTICLE.
Prohibitions and Restrictions: One: The Offering
Party promises not to sell, encumber, transfer, promise to sell, mortgage, grant
an option or execute documents or contracts of any type whatsoever regarding the
Mining Holdings that are referred to in this document, with reference to the
mining rights that originate from them or regarding the minerals that they
contain, while the term for Minera Farellon to exercise the respective option is
in effect. If in spite of the above prohibitions, any other document is executed
or any contract whatsoever is executed that limits or affects, or could limit or
affect the holding, possession or ownership of the holdings, or the minerals
that they contain, the document or contract is resolved ipso facto once Minera
Farellon accepts the irrevocable offer that is being made in this document. All
of this is in agreement with Article one hundred and sixty-nine of the Mining
Code, without prejudice to the other rights that emanate from this contract and
the law for Minera Farellon. Two: Antolin Amadeo
Crespo Garcia promises to maintain strict confidentiality regarding all of the
information and technical data that could be used in the exploration,
exploitation and know-how, as well as all of the
other information related to the works that Minera Farellon or its contractors
develop on the Mining Holdings. Three: Without
prejudice to what is stipulated in No. One

       

      
        
          
          

        

        
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      of this
Article, Antolin Amadeo Crespo Garcia promises, during the life of the option
that is indicated in this document, not to present new petitions or
manifestation, or constitute new concessions for exploration and/or exploitation
in the area made up of the Mining Holdings detailed in the First Clause of this
document, without prior written consent from Minera Farellon. Four: Antolin Amadeo
Crespo Garcia shall not be able to totally or partially cede or transfer the
rights and authorizations that are indicated in this contract, without prior
written consent from Minera Farellon. Five: Minera Farellon shall, at any time
whatsoever with a written consent from the Offering Party, be able to sell,
cede, transfer or in any other way whatsoever exercise of all or part of the
rights in this contract, if and when the purchaser or the transferee declares in
the contract that serves as the title for the acquisition that it will fulfill
each and every one of the obligations that Minera Farellon has contracted in
this document, under the same terms, as if this contract had been executed by
said transferee, promising to impose equal obligations on any later transferee
whatsoever. THIRTEENTH
ARTICLE. Rate of Exchange: The amounts of money in this document that are
expressed in dollars of the United States of America shall be paid in pesos,
national currency, at the rate of exchange called the “observed dollar”
published by the Central Bank of Chile in the Official Gazette, according to No.
six of the First Chapter of the Compendium of Norms for International Rates of
Exchange. FOURTEENTH
ARTICLE. Address: For all legal purposes, the parties establish their
address in the city and commune of Santiago. FIFTEENTH ARTICLE.
Expenses: Minera Farellon shall pay the expenses for the Notary,
Conservator and others, and the taxes that are originated from the same because
of the granting of this option contract. SIXTEENTH ARTICLE. Power of
Attorney: The holder of an authorized copy of this document is empowered
to require the registrations, inscriptions and notations that are pertinent in
the respective Conservator. SEVENTEENTH ARTICLE. Special
Power of Attorney: The vendor and the purchaser grant a Special Power of
Attorney to the attorneys Enrique Benitez Urrutia and Gonzalo Nieto Valdes, both
with the address Avenida Isidora Goyenechea three thousand two hundred and
fifty, ninth floor, Las Condes, Santiago, so that either one of them may grant
all of the complementary documents that may be necessary in order to rectify any
error or omission whatsoever existing in the clauses related 

       

      
        
          
          

        

        
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      to the
correct individualization of the Mining Holdings object of this contract,
registration of control, method for acquisition, etc., with the sole purpose
that the Conservator of Real Estate may make the registrations and annotations
that may be forthcoming. The holder of the Power of Attorney is especially
empowered to sign all types of applications, declarations, rough drafts, public
and private
documents that are necessary for the fulfillment of the commitment. The
authorization for Mr. Kevin Robert Mitchell to represent Minera Farellon
Limitada is verified in the public document for the constitution of said
company, dated the twenty-second of February of two thousand and seven, granted
before the same Notary. The authorization document mentioned above is not
inserted because the parties and the Notary that is authorizing know the
document. As verification, after being read, the persons appearing signed. A
copy is given. Noted in the Digest under No. 943. I Swear.

      

      Two
Notary Seals and Signatures on the front of each page. Ricardo Olivares Pizarro,
Notary Public, Vallenar.

      

      ANTOLIN
AMADEO CRESPO GARCIA

      Signature

      I.D. No.
4.878.574-3

      Fingerprint

      

      Signature

      KEVIN
ROBERT MITCHELL

      Citizenship
I.D. No. 14.498.917-1

      Signing
for: MINERA FARELLON LIMITADA

      I.D. No.
76.814.170-3

      Fingerprint

      

      I sign
and seal this copy that is a true Certified Copy of the original. Vallenar,
11th
of September of 2007.

      Seal:
Ricardo Olivares Pizarro, Notary Public, Vallenar

       

      
        
          
          

        

        
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      CONTRACT FOR THE OPTION TO
PURCHASE MINING HOLDINGS

      Noted in
the Digest under No. 654 and registered on this date on Page 85, No. 13, of the
Registry of Mortgages and Encumbrances of the Conservator of Mines.

      Freirina,
(illegible) of September of 2007

      Seal:
Juan Jorge Solis Soto, Notary and Conservator of Real Estate, Commerce and
Mines, Titleholder, Freirina - Signature

      

      PROHIBITION

      Noted in
the Digest under No. 655 and registered on this date on Page 15, No. 9, of the
Registry of Prohibitions and Interdictions of the Conservator of
Mines.

      Freirina,
13th
of September of 2007

      Seal:
Juan Jorge Solis Soto, Notary and Conservator of Real Estate, Commerce and
Mines, Titleholder, Freirina - Signature

       

       

      15

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