Document:

ex10.1

 

 EXHIBIT 10.1
 

 

 EMPLOYMENT AGREEMENT BETWEEN
 BIO-MATRIX SIENTIFIC GROUP, INC.
 AND
 THOMAS ICHIM
 

 THIS EMPLOYMENT AGREEMENT (the "Agreement") dated as of June 15, 2012 is entered into between Bio-Matrix Scientific Group, Inc., a Delaware corporation, (the "Company") and Thomas Ichim ("Employee").
 

 WITNESSETH:
 WHEREAS, Employee and the Company desire to enter into an agreement providing for the employment by the Company of Employee upon the terms provided herein. 
 REPRESENTATIONS AND WARRANTIES
 

 (A) Company hereby represents and warrants to Employee as follows; 
 (i) Corporate Existence of Company. Company:
 (a)
 is a corporation duly formed, validly existing and in good standing under the laws of the State of Delaware and 
 (b) has all requisite power and authority, and has all governmental licenses, authorizations, consents and approvals necessary to execute and deliver this Agreement and to consummate the transactions contemplated by this Agreement. 
 (ii) No Conflicts. None of the execution, delivery and performance of this Agreement by Company, or the consummation or the transactions contemplated hereby and thereby 
 (a) constitute or will constitute a violation of the organizational documents of Company, 
 (b) constitutes or will constitute a breach or violation of, or a default (or an event which, with notice or lapse of time or both, would constitute such a default) under, any indenture, mortgage, deed of Company, loan agreement, lease or other agreement or instrument to which Company is a party or by which Company or any of its properties may be bound, 
 (c) violates or will violate any statute, law or regulation or any order, judgment, decree or injunction of any court or Governmental Authority directed to Company or any of its properties in a proceeding to which its property is or was a party. 
 

 

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 (B) Employee hereby represents and warrant to Company as follows: 
 (i) No Conflicts. None of the execution, delivery and performance of this Agreement by Employee, or the consummation of the transactions contemplated hereby and thereby 
 (a) constitutes or will constitute a breach or violation of, or a default (or an event which, with notice or lapse of time or both, would constitute such a default) under, any indenture, mortgage, deed of Trust, loan agreement, lease or other agreement or instrument to which Employee is a party or by which Employee or any of its properties may be bound, 
 (b) violates or will violate any statute, law or regulation or any order, judgment, decree or injunction of any court or Governmental Authority directed to Employee or any of their properties in a proceeding to which its property is or was a party. 
 

 AGREEMENT: 
 NOW, THEREFORE, in consideration of the foregoing and the mutual promises and agreements set forth herein, the parties hereto, intending to be legally bound, hereby agree as follows: 
 1. Employment. During the Employment Period (as defined in Section 2), the Company hereby employs Employee and Employee hereby accepts employment. 
 2. Term. The Term of this Agreement shall commence on June 15, 2012 and shall expire on June 14, 2015 unless sooner terminated in accordance with the provisions of Section 6 hereof; provided, however, that the term of this Agreement may be extended by mutual agreement. The period from the commencement of the term of this Agreement to the date of its expiration or sooner termination shall be considered to be the “Employment Period" hereunder. 
 

 3. Duties. Employee shall be granted the title of Chief Scientific Officer and Director of Research With the Company’s wholly owned subsidiary, Regen BioPharma Inc. Subject to the authority of the Board of Directors of the Company (the "Board") and the Company's Chief Executive Officer (the "CEO"), Employee shall perform such duties commensurate with his offices and as directed by the Board and/or the CEO such duties to include, but not be limited to: 
 See Schedule 1. 
 During the Employment Period, Employee shall perform his duties hereunder in a diligent manner, subject to the provisions of Schedule 1 of this Agreement; devoting such amount of his business time, attention and efforts to the affairs of the Company within the scope of his employment as is necessary for the proper rendition of such service and shall use his best efforts to promote the best interests of the Company. Employee's services shall be rendered when and as 
 

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 required by the Board and/or the CEO and in accordance with its and/or their instructions, direction and control. 
 

 It is agreed that Employee will only devote such time as to effectively conduct duties and responsibilities associated with this position pursuant to this agreement.  
 

 4. Compensation Salary. During the Employment Period, Company shall pay Employee salary at the rate of (i) $10,000 per month prorated for any partial employment month ("Salary"). Salary shall be paid on a monthly basis (“Payday”) or, in the event that Payday falls on a Saturday, Sunday or holiday, on the next business day. Salary may be paid, at the Company’s sole discretion, either in 
 

 (a)        cash, or 
 (b)        shares of the Company’s common stock (“Stock Payment”) 
 

 Employee acknowledges that any Stock Payments  issued pursuant to this Agreement that are not registered pursuant to the Securities Act of 1933 shall constitute “restricted securities” as that term is defined in Rule 144 promulgated under the Securities Act of 1933, and shall contain the following restrictive legend:
 

 THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT OR SUCH LAWS AND, IF REQUESTED BY THE COMPANY, UPON DELIVERY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER IS EXEMPT FROM THE ACT OR SUCH LAWS.
 

 The Company may register any Stock Payment pursuant to the Securities Act of 1933, but is not obligated to do so pursuant to this Agreement.
 

 

 

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 5. Benefits. 
 a.
 During the Employment Period, Employee shall be entitled to participation in any profit sharing plan, retirement plan, group life insurance plan or other insurance plan, medical expense plan, medical and dental insurance and other benefit arrangements maintained by the Company for its employees generally and, if applicable, their family members. In addition, Employee shall be entitled to two weeks paid vacation (“Vacation”) subject to (i) the completion of 12 full months of employment pursuant to this Agreement and (ii) having given fourteen days prior notice to the Company of Employee’s intent to Vacation.
 b.   Stock Compensation.  Employee shall receive 12 million newly issued common shares of the Company upon execution of this agreement (“Signing Shares”).  The shares shall be subject to a vesting schedule (see Schedule 2.).
 

 Employee acknowledges that any Signing Shares  issued pursuant to this Agreement will not be  registered pursuant to the Securities Act of 1933 , shall constitute “restricted securities” as that term is defined in Rule 144 promulgated under the Securities Act of 1933 and shall contain the following restrictive legend:
 

 THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT OR SUCH LAWS AND, IF REQUESTED BY THE COMPANY, UPON DELIVERY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER IS EXEMPT FROM THE ACT OR SUCH LAWS.
 

 6. Termination. 
 

 a.
 Employee's employment hereunder shall terminate upon the earlier of: 
 (i) the expiration of the Employment Period, 
 (ii) the death of Employee, 
 (iii) the expiration of a continuous period of thirty (30) calendar days during which Employee is unable to perform his material duties due to physical or mental incapacity, 
 (iv) termination by the Company due to “just cause,” 
 (v) termination by Employee due to a material breach of this Agreement by the Company ("good reason”). The exercise of the 
 

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 right of the Company or Employee to terminate this Agreement pursuant to clauses (iv) or (v) hereof, as the case may be, shall not abrogate the rights and remedies of the terminating party in respect of the breach giving rise to such termination.
 

 b.
 "Just cause" hereunder shall be defined and limited to mean:
 (i) Employee's failure or refusal, as determined by either the CEO and/or the Board in his or their sole discretion, to perform specific directives of the Board which are consistent with the scope and nature of Employee's duties and responsibilities as set forth herein (including the duties described in Section 3), which failure or refusal continues after notice thereof and a reasonable time to cure; such reasonable time to be determined by either the CEO or the Board. 
 (ii) Employee's conviction for a felony or any crime involving moral turpitude, fraud, or misrepresentation, or the presentation of proof satisfactory to the Board in the exercise of its reasonable judgment of Employee's misappropriation or embezzlement of funds or assets from the Company;   
 (iii) any intentional act having the purpose and effect of injuring the reputation, business or business relationships of the Company in any material respect; and 
 (iv) any breach by Employee of any material provision of this Agreement, including, without limitation, the restrictive covenants contained in Section 7 hereof. 
 

 c.
 In the event of any dispute regarding the existence of Employee's incapacity hereunder, the matter wil1 be resolved by the determination of a physician qualified to practice medicine in California selected by the CEO or the Board. For this purpose, Employee will submit to appropriate medical examinations.
 d.
 If Employee's employment hereunder is terminated pursuant to Section 
 5, the Company shall have no further obligations or liabilities hereunder.
 

 7. Restrictive Covenant.
 

 a.
 Nondisclosure. Employee has, and during the Employment Period will have, access to confidential information and trade secrets of the Company and its subsidiaries (the "Confidential Information") that may include, among other things:
 

 (i)
 Financial information
 

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 (ii)
 Supply and services information
 (iii)
 Marketing information
 (iv)
 Personnel information
 (v)
 Customer information
 (vi)
 Product information
 (vii)
 The Company’s procedures, systems, policies and processes of operation.
 Employee shall at all times during his employment by the Company and thereafter hold in strictest confidence any and all Confidential Information that may have come or may come into Employee's possession or within Employee's knowledge. Employee agrees that neither he nor any person or entity, directly or indirectly, controlled by or under common control with the Employee (an "Affiliate") will for any reason, except in the course of performing his duties hereunder, for himself or any other person, use or disclose to anyone, exclusive of Company employees, agents, representatives, or independent consultants to the Company or any of its subsidiaries or Affiliates of the Company, any Confidential Information; provided, however, that Employee may disclose Confidential Information which (i) has become generally available to the public other than as a result of a breach of this Agreement by Employee or (ii) Employee is compelled to disclose pursuant to subpoena or an order by a court competent jurisdiction; provided that, if Employee is so required to disclose any Confidential Information pursuant to the foregoing clause (ii), Employee shall provide advance written notice to the Company, to the extent possible, to allow the Company to seek an appropriate protective order therefore (iii) Potential advisors, employees, or investors of the Company where there is a reasonable expectation of confidentiality. All Confidential Information shall remain the Company's property and shall be returned (or, at the Company's option, destroyed) upon the Company's written request.
 

 b.
 Non-Solicitation of Employees. Employee agrees that from the date hereof and continuing for a period of three years following the termination of this Agreement for whatever reason (the "Non-Compete Period"), neither Employee nor any Affiliate of Employee will solicit or hire for employment any officer, director or employee of the Company who was employed by the Company at any time within twelve months prior to the act of solicitation.
 c.
 Non-Competition. Employee agrees that, other than with the 
 

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 approval of the Board, which approval shall not be unreasonably withheld, during the Employment Period, neither Employee nor any Affiliate of Employee will, directly or indirectly, become a shareholder, director, officer, agent, partner or employee of, or otherwise hold any ownership interest in, any person, firm or entity engaged in any Competitive Business (as defined below), engage as a sole proprietor in any Competitive Business, act as a consultant to or assist any of the foregoing or otherwise engage or participate in any Competitive Business; provided, however, that the foregoing shall not prohibit the ownership by Employee of less than ten  percent (10%) of the outstanding shares of the stock of any corporation engaged in any Competitive Business, which shares are regularly traded on a national securities exchange or in any over-the-counter market. For the purpose hereof, "Competitive Business" means the ownership, operation, development, marketing of the services related to, or management of cellular therapeutics within the United States. 
 

 d.
 Consideration, Relief, Reformation; Severability. The Company has specifically bargained for the covenants set forth in this Section 6 in consideration for the compensation, experience, and information that Employee will gain or receive in connection with his employment by the Company. Employee agrees that the covenants set forth herein will not preclude Employee from engaging in any lawful profession, trade or business or from being gainfully employed necessary to provide Employee, his family members and dependents a standard of living to which he and they have been accustomed and may expect. Employee acknowledges and agrees that the restrictive covenants in this Section 6 have been specifically negotiated, are reasonable in all respects, including, without limitation, their geographic scope and duration, and may be enforced by specific performance or otherwise. Employee shall not raise any issue of reasonableness as a defense in any proceeding to enforce any of such covenants. Notwithstanding the foregoing, in the event that a covenant included in this Agreement shall be deemed by any court to be unreasonably broad in any respect, it shall be modified or limited in its geographic scope, duration or otherwise to the extent necessary to make it reasonable while preserving its restrictive nature to the maximum degree possible and shall be enforced accordingly; provided however, that if, notwithstanding the foregoing, a court of competent jurisdiction shall hold any of the covenants contained in Sections 6 (a), (b) or (c) to be unenforceable (as so modified), then the unenforceable covenant shall be deemed eliminated from the provisions of this Agreement for the purpose of those proceedings to the extent necessary to permit the remaining covenants to be enforced so that the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected thereby.
 

 8. Developments. 
 

 

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 Employee hereby assigns to the Company his entire right, title and interest in all know how, discoveries and improvements, customer lists, trade secrets and ideas, writings and copyrightable material, which may be conceived by Employee or developed or acquired by him during the term of this Agreement, which may pertain directly to the Company's business and were developed with Company resources. Employee agrees to promptly and fully disclose in writing all such developments. Employee will, upon the Company's request, execute, acknowledge and deliver to the Company all instruments and do all other acts which are necessary or desirable to entitle the Company to all rights in the foregoing and enable the Company to file and prosecute applications for, and to acquire, maintain and enforce all letters, trademark registrations or copyrights with respect to the foregoing in all countries.
 

 9. Remedies. 
 Employee acknowledges that any material breach of this Agreement will cause irreparable harm to the Company, that such harm will be difficult if not impossible to ascertain, and that the Company shall be entitled to equitable relief, including injunction, against any actual or threatened breach hereof, without bond and without liability should such relief be denied, modified or vacated. Neither the right to obtain such relief nor the obtaining of such relief shall be exclusive of or preclude the Company from any other remedy.
 

 10. Legal Counsel. 
 Employee acknowledges that Employee has carefully read this Agreement and understands all of the terms hereof and that Employee has been given the opportunity to discuss this Agreement with Employee's private legal counsel and has availed himself of that opportunity to the extent Employee wishes to do so.
 

 11. Notices. 
 All notices, requests and other communications under this Agreement shall be in writing and shall be deemed to have been received five business days after having been deposited in the United States Mail and enclosed in a registered or certified post-paid envelope; one day after having been sent by overnight courier on a business day or otherwise at the open of business on the next succeeding business day; when personally delivered or sent by facsimile communications equipment of the sending party on a business day or otherwise at the open of business on the next succeeding business day; and, in each case, addressed to the respective parties at the addresses stated below or to such other changed addresses that the parties may have fixed by notice in accordance herewith. 
 If to the Company: 
 Bio-Matrix Scientific Group, Inc.
 4700 Sprint Street, Suite 304
 

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 La Mesa, CA 91942
 

 Attn: David Koos, CEO 
 

 

 If to Employee:
 Thomas Ichim
 5350 Toscana Way, #E410
 San Diego, CA 92122
 

 12. Waiver of Breach. 
 A waiver by the Company or Employee of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by the other party. 
 13. Entire Agreement. 
 

 This instrument contains the entire agreement of the parties with respect to the subject matter hereof and supersedes any prior agreements of the parties with respect to the subject matter hereof. It may be changed only by an agreement in writing signed by a party against whom enforcement of any waiver, change, modification, extension or discharge is sought. 
 

 14. Applicable Law. 
 

 The terms and conditions of this Agreement shall be governed by and construed in accordance with the laws of the State or California. Any action to enforce this Agreement shall be brought in the state courts located in San Diego County, State of California. 
 IN WHITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. 
 

 

 By: /s/David R. Koos
 David R. Koos
 Chief Executive Officer
 

 

 By: /s/ Thomas Ichim
 Thomas Ichim, PhD
 

 

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 Schedule 1.
 

 Employer: Regen BioPharma, Inc. 
 

 Location: Company Headquarters and Contracted Research Facilities 
 

 Description: 
 

 The Director of Scientific Research day to day duties include:
 
 ·
 Coordinating the company’s research projects;
 
 ·
 Sourcing Principal Researchers;
 
 ·
 Identifying intellectual property relevant to the company’s interests;
 
 ·
 Identifying research facilities and negotiating contracts with contract research organizations;
 
 ·
 Analyzing Scientific Data;
 
 ·
 Writing reports of Scientific Experiments;
 
 ·
 Submitting grant proposals and presenting findings to various governmental agencies, including but not limited to the FDA
 Position Responsibilities: 
 

 1.
 Plan, develop, organize, implement, direct and evaluate intellectual property for Company in-licensing. 
 

 2.
 Coordinate all aspects of the company’s research activities.
 

 3.
 Source outside researchers, partners and facilities in order to conduct the company’s business with final approval regarding the retention of researchers, entry into agreements with partners, or purchase or lease of facilities to be granted by the Company’s CEO in his sole discretion.    .
 

 4.
 Advise, negotiate, manage and administer research contracts in which the company may enter.
 

 5.
 Lead and direct the development, communication and implementation of research related effective growth strategies and processes.
 

 6.
 Perform other duties as required. Perform other responsibilities as mandated by and any other pertinent local, state or federal regulations. 
 

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 Schedule 2.
 

 

 VESTING SCHEDULE FOR SIGNING SHARES
 

 Signing Shares may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of by Employee (“ Transfer Restriction”) except as follows:
 

 (a)
 Monthly vesting of shares:
 

 

 Upon the expiration of one month from the date of the grant of the Signing Shares, Transfer Restrictions shall no longer apply to 1,000,000 of the Signing Shares.
  
 Upon the expiration of two months from the date of the grant of the Signing Shares, Transfer Restrictions shall no longer apply to an additional 1,000,000 of the Signing Shares.
 

 Upon the expiration of three months from the date of the grant of the Signing Shares, Transfer Restrictions shall no longer apply to an additional 1,000,000 of the Signing Shares.
 

 Upon the expiration of four months from the date of the grant of the Signing Shares, Transfer Restrictions shall no longer apply to an additional 1,000,000 of the Signing Shares.
 

 Upon the expiration of five months from the date of the grant of the Signing Shares, Transfer Restrictions shall no longer apply to an additional 1,000,000 of the Signing Shares.
 

 Upon the expiration of six month from the date of the grant of the Signing Shares, Transfer Restrictions shall no longer apply to an additional 1,000,000 of the Signing Shares.
 

 (b)
 Milestone Vesting of shares:   Transfer Restrictions shall no longer apply to 6,000,000 of the Signing Shares (“Milestone Shares”) upon the achievement of the following events (“Milestones”) during the course of the Employee’s employment with the Company: 
 (1)
 Upon the addition to the Scientific Advisory Board of the Company or any subsidiary of the Company  of five Researchers approved by the CEO of the Company to act as members of Scientific Advisory Board of the Company or any subsidiary of the Company, prior to December 31, 2012, Transfer Restrictions shall no longer apply to 1,000,000 shares Milestone Shares
 (2)
 Upon the identification of five separate intellectual properties (“IPs”), 
 

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 prior to May 4, 2013, which are, in the sole discretion of the CEO of the Company, deemed to be suitable IPs for the Company or any subsidiary of the Company to consider licensing for commercial use Transfer Restrictions shall no longer apply to 1,000,000 Milestone Shares.
 (3)
 Upon execution, prior to May 4, 2013, of binding agreements whereby the Company or any of its subsidiaries have secured commercial licensing rights to all of the IPs listed above prior to May 4, 2013, Transfer Restrictions shall no longer apply to 1,000,000 Milestone Shares.
 (4)
 Upon retention by the Company or any of its subsidiaries, prior to May 4, 2013,  of both of appropriate researchers and an appropriate Contract Research Organization, the purpose of such retention being the commencement of clinical trials and  the preparation of an Investigational New Drug Application pursuant to applicable law, Transfer Restrictions shall no longer apply to 1,000,000 Milestone Shares.
 (5)
 Upon commencement, prior to December 31, 2013, of a “Phase I” clinical trial by the Company or any subsidiary of the Company, to be performed in connection with an Investigational New Drug Application submitted by the Company and in accordance with applicable law, Transfer Restrictions shall no longer apply to 2,000,000 Milestone Shares.
 

 

 In the event that Employee is no longer employed by the Company or any subsidiary of the Company, any Signing Shares (including Milestone Shares) still subject to Transfer Restrictions shall be forfeited by the Employee, and ownership of those Signing Shares shall be transferred back to the Company. 
 

 In the event that any Milestone listed above is not achieved by the date so indicated, those Milestone Shares for which Transfer Restrictions would no longer apply upon achievement of the applicable Milestone shall be forfeited by the Employee, and ownership of the Milestone Shares shall be transferred back to the Company.
 

 

 

 

 

 12ex10.1

  
 Exhibit 10.1
 

 LOAN AGREEMENT
 THIS LOAN AGREEMENT is made and entered into as of the 22 day of June 2012, by and between WILDCAT MINING CORPORATION, a Nevada corporation and wholly-owned subsidiary of Borrower ("Wildcat"), VARCA VENTURES, INC., a Nevada corporation ("Varca," and collectively with Wildcat "Borrower") and SARASOTA VARCA II LLC ("Lender").
 R E C I T A L S:
 WHEREAS, Lender has agreed, on the terms and subject to the conditions hereinafter set forth, to lend Borrower the aggregate amount of Six Hundred Thousand and No/100 Dollars ($600,000.00) payable in three installments of Two Hundred Thousand and No/100 Dollars ($200,000.00) (the "Loan");
 WHEREAS, Borrower desires to receive the Loans from Lender; and 
 NOW, THEREFORE, in consideration of the premises and the mutual covenants herein set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
 ARTICLE 1
DEFINITION OF TERMS
 Definitions.
   Capitalized terms used in this Agreement and not otherwise defined shall have the respective meanings as follows:
 "Agreement" shall mean this Loan Agreement and all modifications, alterations, amendments and supplements hereto made in accordance with the provisions hereof.
 “Collateral” shall mean: (a) all surface and subsurface ore stockpiles located at the Site, as described in that certain Evaluation of Selected Mineralized Stockpiles prepared by David Gonzales, dated May 25, 2012 (attached hereto as Exhibit “E”); (b) all minerals from the west wall of the main stope in May Day Mine Level No.1, as described in that certain Summary of Potential Mineralization in the West Wall of May Day Mine Level No. 1 prepared by David Gonzales, dated May 31, 2012 (attached hereto as Exhibit “F”); and (c) all contracts and contract rights of Borrower related to the mining operation, as more particularly described in the Security Agreement and the Collateral Assignment of Permits and Contract Rights.
 

 "Default Rate" shall mean the lesser of:  (a) 18% per annum; or (b) the highest applicable lawful rate.
 "Interest Rate" shall mean 10% per annum.  
 "Maturity Date" shall mean the earlier of (a) December 1, 2013; or (b) 30 days after the date when all subsurface ore stockpiles at the Site have been removed and milled.
 

 
 "Loan Documents" shall mean this Agreement, Secured Note,  the Royalty Deed, Security Agreement, UCC-1 Financing Statement, and Collateral Assignment of Permits and Contracts Rights and any other instruments or documents delivered pursuant to this Agreement to secure, to evidence or otherwise related to the Loan.
 "Note" shall mean the secured promissory note executed by Borrower in favor of Lender in connection with the Loan, and all amendments and modifications thereto, in the form attached as Exhibit A.
 "Obligations" shall mean: (a) the due and punctual payment in full of the Principal Balance, and the interest thereon, when due and payable, according to the terms of this Agreement and the Note, whether at stated maturity, by reason of acceleration or otherwise; and (b) the due and punctual payment in full of all other indebtedness, sums and charges which may at any time be due and payable in accordance with, or under the terms of, this Agreement and the Note, whether at stated maturity, by reason of acceleration or otherwise; and the rights vested in Lender to purchase gold at a discount as further referenced in Section 4.03 herein.  
 "Person" or "person" shall mean any individual, firm, corporation, trust or other organization or association or other enterprise or any governmental or political subdivision, agency, department or instrumentality thereof.
 "Principal Balance" shall mean the aggregate principal amount of the Note.
 "Royalty Deed" shall mean that certain Perpetual Non-Participating Production Royalty Deed executed by Wildcat in favor of Lender of even date herewith, and all amendments and modifications thereto, in the form attached as Exhibit C.    
 "Security Agreements" shall mean that certain Security Agreement executed by Borrower in favor of Lender of even date herewith, as further evidenced by that certain UCC-1 filing on behalf of Lender and all amendments and modifications thereto, in the form attached as Exhibit B.    
 “Site” shall mean Borrower’s property interests located, or otherwise associated with the May Day and Idaho mining claims, in La Plata County, Colorado where it currently or in the future intends to conduct mining operations, as more particularly identified in the attached Exhibit D.
 Interpretation.
   Unless the context clearly requires otherwise, words of masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa.  This Agreement and all the terms and provisions hereof (a) shall not be construed strictly in favor of or against either party hereto; and (b) shall be construed to effectuate the purpose set forth herein and to sustain the validity hereof. 
 

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 ARTICLE 2
REPRESENTATIONS, WARRANTIES AND AFFIRMATIVE COVENANTS OF THE PARTIES
 Representations and Warranties of Borrower.
   Borrower represents and warrants to Lender as follows:
 Existence.
   Borrower is a corporation organized in the State of Nevada, with full power to enter into the Loan Documents to perform its obligations thereunder and to issue and deliver the Note and the Security Agreements to Lender.  The making, execution and performance of the Loan Documents on the part of Borrower and the issuance and delivery of the Note, the Security Agreements and the Collateral Assignment of Permits and Contract Rights have been duly authorized by all necessary action on the part of Borrower and will not violate or conflict with any agreement, indenture or other instrument by which Borrower or any of its material properties is bound.
 (b)
 Validity, Etc. The Loan Documents are or will be valid and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms, except to the extent that enforceability may be subject to valid bankruptcy, insolvency, financial emergency, reorganization, moratorium or similar laws relating to or from time to time affecting the enforcement of creditors' rights and except to the extent that the availability of certain remedies may be precluded by general principles of equity.
 (c)
 Authority.  There are no provisions of Borrower's articles of incorporation and/or bylaws nor are there any provisions of any existing contract, lease or agreement binding on Borrower or affecting it which would conflict with or in any way prevent the execution, delivery, enforcement, or carrying out the terms of the Loan Documents or otherwise materially impact the business of Borrower as it is now being operated and presently contemplated to be developed and operated. 
 Licenses
 .  Wildcat is in the process of obtaining all licenses, permits, franchises, consents and approvals necessary or desirable for Wildcat to operate its business as currently contemplated (collectively, the "Permits").  
 (e)
 Activities. The Site will be the first area on which Borrower intends to conduct mining activities.
 Section 2.02 Representations and Warranties of Lender.
   Lender represents and warrants to Borrower as follows: 
 (a)
 Lender has full authority to enter into, deliver and perform this Agreement and to consummate the transactions contemplated herein.  
 

 (b)
 Validity, Etc.  This Agreement has been duly executed and delivered by the Lender, and this Agreement constitutes the legal, valid and binding obligation of the Lender 
 

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 enforceable against the Lender in accordance with its terms, except as the enforceability thereof may be limited by the effect of the applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors' rights generally and by general principles of equity (regardless of whether considered in a proceeding at law or in equity).
 

 (c)
 Authority.  The execution, delivery and performance of this Agreement by the Lender and the consummation of the transactions contemplated herein, do not and will not (i) require the Lender to obtain any consent, approval, authorization or order of, or to make any filing, registration or qualification with, any court, governmental authority or third Person; or (ii) conflict with or result in the violation of, or default under, any provision of any mortgage, indenture, lease, agreement or other instrument, judgment, order or permit to which the Lender is a party or by which it's properties are bound.  
 

 ARTICLE 3
THE LOAN; THE NOTE
 The Loan. 
 The Loan shall be disbursed in three increments of $200,000.00. The first disbursement shall be the date of this Agreement, or such later date as agreed to by Borrower.  The second disbursement shall be made on July 2, 2012.  The third and final disbursement shall be September 4, 2012.  The proceeds of the Loan shall be used by Borrower solely for the following purposes and no other: loan closing expenses (including attorney and accountant fees), D&O insurance, permitting, site preparation, geotech and lab consulting, well drilling, road development and portal repair.  Further, the proceeds may not be used for officer or director salaries until such time as Borrower has received positive net revenues.
 

 The Note.
   The obligation of Borrower to repay the Loan shall be evidenced by the Note.  The Note shall have such variations, omissions and insertions as may be necessary, desirable and authorized or permitted by this Agreement.  The general terms of the Note shall be as follows:
 Interest.
   The Note shall bear interest at the Interest Rate.  Interest on the Note shall be calculated on the basis of the actual number of days elapsed over an assumed year consisting of 365 days.
 Maturity Date.
   The entire Principal Balance, plus all accrued and unpaid interest, shall be due and payable in full on the Maturity Date.
 

 Prepayments.
   The Note may be prepaid by Borrower, in whole or in part, at anytime prior to the Maturity Date without a penalty. However, any such prepayment prior to Maturity Date shall require Borrower to first give Lender forty five (45) days advanced written notice of its intent to 
 

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 prepay. In the event of a prepayment, Borrower shall pay to Lender the Principal Balance, plus any accrued interest due thereon as of the date of such prepayment.
 (d)
 Conversion of Balloon Payment. Lender shall have the option to convert part or all of the balloon payment due on the Maturity Date into shares of common stock of Varca at a conversion rate of $.25 per share (conversion rate is based on a Company valuation of  $17,000,000 and 70,000,000 outstanding unregistered common shares)  to be issued to Lender or its members if so designated. Lender must notify Varca of its intent to convert the balloon payment at least 30 days prior to the Maturity Date or the prepayment date, and provide the requisite representation that the transferee so named in the conversion notice is an accredited investor as defined by the Securities Act of 1933, as amended.  
    
 (e)
 Interest Payments. Payments of interest only shall be due the earlier of: (i)within 30 days of Borrower’s receipt of net revenue from its mining operations at the Site, or (ii) no later than December 1, 2012, and continue monthly until the Maturity Date.
 

 Security for the Obligations.
   As security for the due performance and payment of the Loan and the Obligations, the Loan shall be secured by the Collateral.
 

 Section 3.04 
 Royalty Deed.
   In connection with the Loan, Wildcat shall execute and file with the La Plata County, Colorado recording office the Royalty Deed.  
 ARTICLE 4
ADDITIONAL COVENANTS OF BORROWER
 Performance of Covenants.
   Borrower covenants that it will perform faithfully at all times it's covenants, undertakings and agreements contained in the Loan Documents.
 Payment of Note
 .  Borrower covenants that it will promptly pay the Principal Balance, and all accrued interest, at the place, on the date and in the manner provided herein and in the Note, in accordance with the terms thereof.
 Future Gold Purchase Discount
 

 .  Lender shall have the right and option to be repaid in milled gold, in lieu of cash, at a 20% discount from price offered to Borrower by an independent mill, up to a aggregate maximum of the Principal Balance and accrued interest. Lender shall further have the right to direct that a portion of any requested repayment in milled gold be paid directly to the members of Lender. Lender shall provide notice to Borrower of its intention to exercise said right and 
 

 5
 

 
 option by giving 15 days advance notice to Borrower of said election and specific directions if the milled gold is to be repaid directly to a member of Lender. 
 ARTICLE 5
EVENTS OF DEFAULT AND REMEDIES
 Events of Default.
   Each of the following is hereby declared an "Event of Default:"
 (a)
 payment of the Principal Balance shall not be made when the same shall become due and payable;
 (b)
 Borrower shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Loan Documents and such default shall continue for 30 days after written notice shall have been given to Borrower by Lender specifying such default and requiring the same to be remedied; provided, however, that if, in the reasonable judgment of Lender, Borrower shall proceed to take such curative action which, if begun and prosecuted with due diligence, cannot be completed within a period of 30 days, then such period shall be increased to such extent as shall be necessary to enable Borrower to diligently complete such curative action; or
 (c)
 any representation, covenant or warranty of Borrower contained in the Loan Documents or in any certificate or other closing document executed and delivered by Borrower in connection with the closing of the Loan shall prove to have been untrue or misleading in any material respect; or
 (d)
 any default under those certain loan documents between Sarasota Varca Associates LLC and Borrower dated January 2012 (hereinafter the “Sarasota Varca I Loan”), shall be a default under this Loan and a default under this Loan shall be a default under the Sarasota Varca I Loan.
 

 Exercise of Remedies
 .  Upon the occurrence and during the continuance of an Event of Default, Lender may declare the Principal Balance (if not then due and payable) to be immediately due and payable, and upon such declaration, the same shall be immediately due and payable.  Upon the occurrence and during the continuance of an Event of Default, Lender may proceed to protect and enforce its rights as a secured party under all applicable law or under the Loan Documents by such suits, actions or special proceedings in equity or at law, either for the specific performance of any covenant or agreement contained herein or in aid or execution of any power herein granted or for the enforcement of any proper legal or equitable remedy, as Lender shall deem most effective to protect and enforce such rights.  Lender shall have all rights, powers and remedies available under the terms of the Loan Documents and all applicable law.
 

 6
 

 
 

 ARTICLE 6
MISCELLANEOUS PROVISIONS
 Successors and Assigns.
   This Agreement shall inure to the benefit of, and shall be binding upon, Borrower, its successors and assigns, and the Lender and its successors and assigns. 
 

 Term of Agreement.
   This Agreement shall be in full force and effect from the date hereof until the Principal Balance and all other sums payable to Lender hereunder have been paid in full.  
 Amendments and Supplements.
   This Agreement may be amended or supplemented from time to time only by a writing duly executed by Borrower and Lender.
 Notices.
   All notices, requests, demands, claims, certificates and other communications hereunder shall be in writing and (1) delivered personally by hand or a nationally-recognized overnight courier; (2) mailed by registered or certified mail (postage prepaid), return receipt requested; (3) sent via facsimile; or (4) sent via email delivery of a ".pdf" format data file to the appropriate party at the address set forth below:  All such notices and other written communication will be effective: (i) if delivered personally or mailed, upon delivery; and (ii) if sent via facsimile or via email delivery of ".pdf" format data file, upon confirmation of receipt. Any of the parties may, by notice in writing given to the others, designate new or different addresses, facsimile numbers or email addresses to which communications shall be sent.  
 	 	
	 (a)
 As to Borrower:
	 Varca Ventures, Inc.

	  
	 1630 Ringling Blvd.
 Sarasota, FL 34236
 Fax: (941) 951-0864
 Email: randalloser@gmail.com

	  
	 Attention: Randall Oser, President

	 With a Copy To:
	 GrayRobinson, P.A.

	  
	 P.O. Box 2328 
 Fort Lauderdale, Florida 33303-9998

	  
	 Fax 954-761-8112

	  
	 Email: Jeff.Bahnsen@gray-robinson.com

	  
	 Attention:  Jeffery A. Bahnsen

 

 

 7
 

 
 

 	 	
	 (b)
 As to Lender:
	 Sarasota Varca II LLC

	  
	 1220 S. Orange Ave.

	  
	 Sarasota FL 34239

	  
	 Fax: (941) 953-2880

	  
	 Email: jlibby@hllibbycorp.com

	  
	 Attn: James Libby, Managing Member

	  
	  

	 With a Copy To:
	 Van Winkle & Sams P.A.

	  
	 3859 Bee Ridge Road, Suite 202
 Sarasota, Florida 34233

	  
	 Fax (941) 923-0174

	  
	 Email:  lauriesams@comcast.net

	  
	 Attention:  Laurie B. Sams

 

 Benefits Exclusive.
   Except as herein otherwise expressly provided, nothing in this Agreement, expressed or implied, is intended or shall be construed to confer upon any Person other than Borrower and Lender, any right, remedy or claim, legal or equitable, under or by reason of this Agreement or any provision hereof, this Agreement and all its provisions being for the sole and exclusive benefit of Borrower and Lender.
 Severability.
   In case any one or more of the provisions of this Agreement, any amendment or supplement hereto or of the Note shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Agreement, any amendment or supplement hereto or the Note, but this Agreement, any amendment or supplement hereto and the Note shall be construed and enforced at the time as if such illegal or invalid provisions had not been contained therein, nor shall such illegality or invalidity affect any legal and valid application thereof from time to time.  
 Counterparts.
   This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and together shall constitute one and the same instrument.  A facsimile transmission or e-mail delivery of a ".pdf" format data file shall be given the same legal force and effect as original signatures.
 Governing Law.
   This Agreement shall be governed exclusively by and construed in accordance with the applicable laws of the State of Florida.
 Entire Agreement.
   This Agreement constitutes the full understanding between the parties hereto with respect to the subject matter hereof, and no statements, written or oral, made prior to or at the signing hereof shall vary or modify the terms hereof.  
 

 8
 

 
 
 Section 6.10
 Titles and Headings.  The titles and headings of the Articles and Sections of this Agreement, which have been inserted for convenience of reference only and are not to be considered a part hereof, shall not in any way modify or restrict any of the terms and provisions hereof, and shall not be considered or given any effect in construing this Agreement or any provision hereof or in ascertaining intent, if any question of intent should arise.
 ADVICE OF COUNSEL
 .  EACH PARTY ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY ITS OWN ATTORNEY OR HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY WITH RESPECT TO THE TRANSACTION GOVERNED BY THIS AGREEMENT.
 WAIVER OF JURY TRIAL
 .  LENDER AND BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY.  LENDER ACKNOWLEDGES THAT THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO BORROWER ACCEPTING CREDIT FROM LENDER, THAT BORROWER WOULD NOT HAVE ACCEPTED SUCH CREDIT WITHOUT THIS JURY TRIAL WAIVER, AND THAT EACH LENDER HAS BEEN REPRESENTED BY AN ATTORNEY OR HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY IN CONNECTION WITH THIS JURY TRIAL WAIVER AND UNDERSTANDS THE LEGAL EFFECT OF THIS WAIVER.
 

 

 

 

 9
 

 
 

 IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be duly executed as of the date first set forth herein.
 	 	
	  
	 BORROWER:
 VARCA VENTURES, INC., a Nevada corporation

	  
	 By:  __/s/ Randall Oser

	  
	         Randall Oser

	  
	         President

 

 	 	
	  
	 WILDCAT MINING CORPORATION, a Nevada corporation 

	  
	 By:  __/s/ Randall Oser

	  
	         Randall Oser

	  
	         President

 

 	 	
	  
	 LENDER:
 SARASOTA VARCA II LLC, a Florida limited liability company

	  
	 By:  __/s/ James Libby

	  
	         James Libby, Managing Member
 

 By: __/s/ Robert Libby
         Robert Libby, Managing Member

	  
	  

 

 

 

 

 

 

 

 10
 

 
 EXHIBIT A
 PROMISSORY NOTE
 [SEE ATTACHED]
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 11
 

 
 

 SECURED PROMISSORY NOTE
 

 

 U.S. $600,000.00
 June 22, 2012
 

 1.
 FOR VALUE RECEIVED, the undersigned, jointly and severally, (collectively,
 "Borrower") promises to pay SARASOTA VARCA II LLC, or assignee ("Note Holder") the principal sum of Six Hundred Thousand ($600,000.00) U.S. Dollars ("Principal Amount"), with interest thereon from the date of disbursement, until paid, at the rate of 10% per annum.  The Principal Amount shall be disbursed in three increments of $200,000.00. The first disbursement shall be June 1, 2012.  The second disbursement shall be made on July 2, 2012.  The third and final disbursement shall be September 4, 2012. Interest shall accrue on the Principal Amount disbursed accruing from the date of such disbursement. Accrued interest shall be payable monthly as set forth in Section 7 below.  The entire Principal Amount and all accrued and unpaid interest thereon shall be due and payable in full on or before the Maturity Date. Capitalized terms used herein shall have the same meaning as used in that certain Loan Agreement between Note Holder as Lender and Borrower of even date. 
 

 2.
 The Balloon Payment shall be made by check and payable to the order of Note Holder at the address of Note Holder set forth in Section 6.04 of that certain Loan Agreement, or wire transfer. Notwithstanding the forgoing, the Note Holder may at its sole option, convert the balloon payment due on the Maturity Date to common stock of Varca Ventures Inc.(AVarca@) at a conversion rate of $ .25 per share (conversion rate is based on a Company valuation of  $17,000,000 and 70,000,000 outstanding unregistered common shares), in the name of Lender or its members, by sending Varca written notice of its intent to elect such option at least thirty (30) days prior to the Maturity Date or the prepayment date.
 

 12
 

 
 

 3.
 If any Payment is not paid when due, or if any default under any Security Agreement securing this Note occurs, the entire principal amount outstanding and accrued interest thereon shall at once become due and payable at the option of the Note Holder; and the indebtedness shall bear interest at the rate of 18% per annum from the date of default.  Note Holder shall be entitled to collect all reasonable costs and expenses of collection and/or suit, including, but not limited to reasonable attorneys' fees.
 

 4.
 Borrower may prepay the principal amount outstanding under this Note, in whole, or part, at any time without a penalty. However, Borrower shall give Note Holder forty five (45) Days advanced written notice of its intent to prepay.  In the event of a prepayment, Borrower shall pay to Note Holder the principal balance, plus any accrued interest due thereon as of the date of such prepayment.
 

 5.
 Borrower and all other makers, sureties, guarantors, and endorses hereby waive presentment, notice of dishonor and protest, and they hereby agree to any extensions of time of payment and partial payments before, at, or after maturity.  This Note shall be the joint and several obligation of Borrower and all other makers, sureties, guarantors and endorsers, and their successors and assigns.
 

 6.
 Any notice to Borrower provided for in this Note shall be in writing and shall be given and be effective in accordance with Section 6.04 of the Loan Agreement.  
 

 7.
 Payments of interest only shall be due the sooner of the following: (i) within 30 days of Borrower=s receipt of net revenue from its mining operation at the Site, or (ii)  no later than December 1, 2012, and continue monthly until the Maturity Date. Further, Note Holder shall have the option to be repaid in milled gold, at a discount, in lieu of such payments, as further described in Section 4.03 of the Loan Agreement.
 

 

 13
 

 
 
 8.
 The indebtedness evidenced by this Note is secured by a Security Agreement of even date and until released said Security Agreement contains additional rights of Note Holder.  Such rights may cause acceleration of the indebtedness evidenced by this Note.  Reference is made to said Security Agreement for such additional terms.  Said Security Agreement grants rights in the  Collateral described therein. 
 

 

 EXECUTED BY BORROWER
 

 	 	
	 

 

	 VARCA VENTURES, INC.
 a Nevada corporation
 

 

 By:___________________________
       Randall Oser, President
       
 WILDCAT MINING CORPORATION
 a Nevada corporation
 

 

 By:___________________________
       Randall Oser, President

 

 Borrower's Address: 1630 Ringling Blvd., Sarasota, FL 34236
 

 

 

 

 

 14
 

 
 VARCA VENTURES, INC.
 

 

 NOTICE OF ELECTION 
 TO
 RECEIVE PAYMENT
 IN
 SHARES OF COMMON STOCK
 

 The undersigned hereby elects, as of __________, 201__:
 

 To receive $______________ , being a ___ portion of the final balloon payment and accrued interest on the outstanding principal balance on the secured promissory note issued by Varca Ventures, Inc. ("Varca") and Wildcat Mining Corporation on June ___, 2012 in the name of the undersigned (the "Note") in shares of Varca common stock, in accordance with the terms and conditions set forth in the Note, to be issued in the name of _________________________________,with an address of __________________________________________________________________________. 
 

 Signature:
 

 Print Name:
 

 Entity (if applicable):
 

 Title (if applicable):
 

 Address:
 

 Date:
 

 

 

 

 

 
 EXHIBIT B
 SECURITY AGREEMENT
 [SEE ATTACHED]
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 SECURITY AGREEMENT
 

 BY THIS Agreement, Sarasota Varca II LLC, a Florida limited liability company herein called Lender, and Wildcat Mining Corporation, a Nevada corporation (“Wildcat”) and Varca Ventures, Inc., a Nevada corporation, (“Varca”), collectively herein called Borrower, agree that:
 

 1.  SECURITY INTEREST.  Borrower grants a security interest to Lender in the collateral described in paragraph 2 to secure performance of this Agreement and payment of the debt identified in paragraph 3.
 

 2.  COLLATERAL.   The collateral consists of the following located at or related to the May Day Idaho mining site in La Plata County, Colorado: (a) all surface and subsurface ore stockpiles, as described in that certain Evaluation of Selected Mineralized Stockpiles prepared by David Gonzales, dated May 25, 2012 (attached as Exhibit “E” to the Loan Agreement between Borrower and Lender of even date herewith (the “Loan Agreement”)); (b) all minerals from the west wall of the main stope in May Day Mine Level No. 1, as described in that certain Summary of Potential Mineralization in the West Wall of May Day Mine Level No. 1 prepared by David Gonzales, dated May 31, 2012 (attached as Exhibit “F” to the Loan Agreement); and (c) all contracts and contract rights of Borrower related to the May Day Idaho mining operations in La Plata County, Colorado.
 

 3.
 DEBT.  This Security Agreement is given to secure to Lender:
 

 (a)
 the repayment of the indebtedness evidenced by a secured promissory note executed by Borrower in the aggregate principal sum of $600,000.00 (the "Note"), with interest on the unpaid principal balance from the date of each disbursement until paid, at the rate of 10% percent per annum, with the entire principal amount and accrued and unpaid interest due and payable in full at the address set forth in the Note, or such other place as Lender may designate, on or before December 1, 2013.  
 

 (b)
 the payment of all other sums, with interest thereon at 10% per annum, disbursed by Lender in accordance with this Agreement to protect the Collateral; and
 

 (c)
 the performance of the covenants and agreements of Borrower herein contained.
 

 4.   TITLE. Borrower covenants that it owns and has the right to grant and convey the Collateral, and warrants title to the same, subject to the third party interests as set forth on Schedule 1 attached hereto.
 

 5.   USE.  Until default, Borrower may have possession of the Collateral and use it in any lawful manner consistent with this Agreement.  Borrower shall keep the collateral free from all encumbrances, liens, claims and demands other than those in existence as of the date of this Agreement.  Borrower shall mine and mill and otherwise use the collateral in compliance with all laws, ordinances and regulations of any governmental authority having jurisdiction.  Borrower may not in any way transfer or sell the collateral except in the ordinary course of business, without the written consent of Lender.
 

 6.  TAXES.  Borrower shall pay all taxes, assessments and levies now accrued or that may accrue hereafter on the collateral, this Agreement or the Note or debt that it secures.
 

 

 

 
 

 7.  WARRANTIES.  Borrower warrants that Borrower has the right to transfer all interest in collateral, that it is not subject to any interests of third persons, except as set forth on Schedule 1 attached hereto, that all financial or credit statements given to Lender before, contemporaneously with or subsequent to the execution of this Agreement are or shall be true and complete at the date of each and that Borrower will defend the collateral against the claims and demands of all third persons.
 

 8.  DEFAULT.  (a) Borrower shall be in default under this Agreement if: (i) Borrower fails to make payment as required under the Note which this Agreement secures, or (ii) Borrower does not comply with any material provision of this Agreement, or (iii) files a petition under any bankruptcy or insolvency law, or if bankruptcy or insolvency proceedings or an application for a receiver is filed against Borrower, or if Borrower makes a general assignment for the benefit of creditors or otherwise becomes insolvent, or (iv) if a judgment is entered against Borrower that is not covered by adequate indemnification, or (v) if an attachment or garnishment is issued against Borrower, or (vi) if a lien is filed against the collateral, or(vii) if a governmental authority has taken possession of a substantial part of Borrower's property, or viii) on the dissolution, merger, consolidation or reorganization of a corporate Borrower, or (ix) Borrower’s default under that certain loan dated January 2012 between Borrower and Sarasota Varca Associated LLC.  
 

 If Lender should declare Borrower in default under this Agreement:
 

 (b)  Lender may set off sums, if any, owed by Lender to Borrower on default.
 

 (c)  If Lender retains the collateral for Lender's use, Lender waives the right to a deficiency.  If Lender sells it to a third person, the proceeds shall be applied to costs and expenses, attorney's fees, interest and principal secured by this Agreement in that order and Borrower remains liable for any deficiency.
 

 (d) If an action is commenced to enforce this Agreement or to determine its validity or priority and Lender does not retake possession of the collateral, Lender is entitled to appointment of a receiver for the collateral pending the action without notice as a matter of right, regardless of the adequacy of the value of the collateral or the solvency of Borrower.
 

 (e)  If Lender holds another security Agreement on the collateral, a default under the other security Agreement is a default under this Agreement and vice versa.
 

 (f)  If Borrower fails to comply with paragraphs 4, 5, 6, 7 and 8, or any part of them, Lender may do so and take possession of the collateral, or either, without waiving the right to enforce this Agreement because of the default.  Any payments made by Lender shall bear interest at the maximum rate permitted by law.
 

 (g)  At Lender's option all sums secured by this Agreement shall become due immediately after thirty (30) days after any default under this Agreement, occurs, and Borrower fails to correct same.  Failure to accelerate or enforce a default or obligation under this Agreement does not waive the right to do so on a future default.
 

 

 

 
 

 (h)  If it is judicially determined that Borrower failed to perform a part of this Agreement, Borrower shall pay all costs of enforcing or construing it with reasonable attorney's fees for trial, appeal or otherwise.
 

 9.  JOINT AND SEVERAL.  The rights and obligations under this Agreement are joint and several.  Parties in the same category under this Agreement may, but are not required to, be joined in an action or proceeding with another party in that category when this Agreement is sought to be enforced or construed. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of Lender and Borrower. All covenants and agreements of Borrower shall be joint and several.
 

 10.  DOCUMENTS.  Borrower shall execute and pay the cost of recording all financing statements on Lender's request.  If evidence of title is issued on any part of the collateral, Borrower shall cause Lender's interest to be noted on it at Borrower's expense.  Borrower shall perform all acts and execute and deliver all documents at Lender's request to protect or enforce Lender's interest or rights under this Agreement.  Borrower shall not allow any adverse financing statement covering part or all of the collateral to be on file in any public office, except as herein stated.
 

 11.  SEVERABILITY.  If part of this Agreement is adjudged invalid, the remaining parts are not affected.
 

 12.  CUMULATIVE REMEDIES.  Each remedy afforded by this Agreement is cumulative to all remedies provided in it or by law.
 

 

 Executed this ___ day of June 2012.
 

 

 

 

 

 

 WILDCAT MINING CORPORATION
 ATTEST: 
 a Nevada corporation
 

 

 By:             ______________________ 
 By:___________________________
       Torii K. Goar
       Randall Oser
       Secretary 
       President
 

 

 

 

 

 
 

 VARCA VENTURES, INC.
 ATTEST: 
 a Nevada corporation
 

 

 By:             ______________________ 
 By:___________________________
       Torii K. Goar
       Randall Oser
       Secretary 
       President
 

 

     
 STATE OF _______________
 )
 )  ss.
 COUNTY OF ______________
 )
  
  
 
The foregoing instrument was acknowledged before me this ____ day of June, 2012, by Randall Oser, the President of Wildcat Mining Corporation, on behalf of the company; who is personally known to me or who has produced _________________________ as identification. 
 

 

 Printed Name:
 Notary Public
 My Commission Expires:
 

 STATE OF _______________
 )
 )  ss.
 COUNTY OF ______________
 )
  
  
 
The foregoing instrument was acknowledged before me this ____ day of June, 2012, by Randall Oser, the President of Varca Ventures Inc., on behalf of the company; who is personally known to me or who has produced _________________________ as identification. 
 

 

 Printed Name:
 Notary Public
 My Commission Expires:
 

 

 

 

 

 

 
 SCHEDULE 1 TO SECURITY AGREEMENT
 

 

 1.
 Wildcat Mining Corporation has a leasehold interest in several patented lode mining claims pursuant to a mining lease with Fairview Land Company dated June 1, 2006.  Furthermore, the mining lease provides for payment to Fairview of a royalty interest of between 5% and 9.5% of the net proceeds with respect to all minerals contained in the patented lode mining claims subject to the lease, including minerals contained in ore stockpiles located on such patented lode mining claims. 
 

 2.
 Pursuant to a Stockpile Royalty Agreement dated October 7, 2011 between Wildcat Mining Corporation and several investors, Wildcat is required to pay a production royalty equal to 3% of the net proceeds with respect to all minerals contained in surface ore stockpiles located at the Site (as defined in the Loan Agreement).   
 

 3.
 Pursuant to a Production Royalty Deed recorded February 24, 2011 between Wildcat Mining Corporation and Aaron and Sharon Taylor, Wildcat is required to pay a production royalty equal to 7% of the net proceeds with respect to all minerals contained in certain patented lode mining claims owned by Wildcat and located on the Site, including minerals contained in ore stockpiles located on such patented lode mining claims.   
 

 4.
 Pursuant to a Modification of Promissory Note and Deed of Trust recorded February 24, 2011 between Wildcat Mining Corporation and Old Idaho Properties, LLC, Old Idaho has a security interest in certain patented lode mining claims located on the Site in connection with a note in the principal amount of $425,000 payable by Wildcat to Old Idaho on or before February 22, 2014.  Old Idaho's security interest includes minerals contained in the patented lode mining claims located on the Site and owned by Wildcat, including ore stockpiles located on such patented lode mining claims.
 

 5.
 Pursuant to a Deed of Trust recorded February 2, 2012 between Wildcat Mining Corporation and Sarasota Varca Associates, LLC, Sarasota has a subordinated security interest in certain patented lode mining claims located on the Site in connection with a note in the principal amount of $400,000 payable by Wildcat and Varca Ventures, Inc. to Sarasota on or before July 31, 2013.  Sarasota's security interest includes minerals contained in the patented lode mining claims located on the Site and owned by Wildcat, including ore stockpiles located on such patented lode mining claims.
 

 6.
 Pursuant to a Production Royalty Deed recorded February 2, 2012 between Wildcat Mining Corporation and Sarasota Varca Associates, LLC, Wildcat is required to pay a production royalty equal to 1% of the net proceeds with respect to all minerals contained in certain patented lode mining claims owned by Wildcat and located on the Site, other than minerals contained in ore stockpiles identified as of that date and located on such patented lode mining claims.   
 

 

 

 

 

 

 

 
 EXHIBT C
 PERPETUAL NON-PARTICIPATING PRODUCTION ROYALTY DEED
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 Space above this line reserved for Recorder’s use
 PERPETUAL NON-PARTICIPATING PRODUCTION ROYALTY DEED
 For a good and valuable consideration, the receipt and sufficiency of which is hereby admitted and acknowledged, WILDCAT MINING CORPORATION, whose address is 1630 Ringling Blvd., Sarasota, FL 34236 (hereinafter referred to as "Grantor") hereby grants and conveys to SARASOTA VARCA II LLC, a Florida limited liability company, whose address is 1220 S. Orange Ave. Sarasota FL 34239 (hereinafter referred to as "Grantee") a perpetual, non-participating production royalty on all of the Subject Minerals produced from the Premises (as those terms are hereinafter defined), in the amounts and upon the terms and conditions hereinafter set forth.
 

 1.
 Definitions.  The following terms shall have the meanings set forth below unless the context otherwise requires:
 (a)
 "Subject Minerals" means all minerals of every kind and character whatsoever other than minerals contained in ore stockpiles that have been identified as of the date this Perpetual Non-Participating Production Royalty Deed is executed.  
 (b)
 "Production Royalty" means the royalty payable on the Subject Minerals calculated as set forth in Section 2 below.
 (c)
 "Premises" means those certain patented lode mining claims situate and being in the California Mining District, La Plata County, Colorado, to-wit: 
 	 	
	 NAME OF CLAIM (Patented Lode)
	 PATENT U.S. SURVEY NUMBER

	 Idaho Millsite 
	 18320

	 Idaho Millsite No.1 
	 18321

	 Idaho Millsite No.2 
	 18321

	 Alpine
	 18321

	 Lord Kitchener
	 17108

	 Hartford
	 17108

	 Gertrude
	 16616

	 Good Hope
	 17124

	 Sunrise
	 17124

	 Cathryn
	 16616

	 Midnight
	 19646

	 Helen
	 19515

	 Midnight No.2
	 19646

	 Pay Day
	 19516 "A"

	 Pay Day Millsite
	 19516 "B"

 
 2.
 Production Royalty.  The Production Royalty payable with respect to the Subject Minerals from the Premises shall be determined and calculated as follows:
 

 

 

 
 

 (a)
 Whether Wildcat elects to sell the Subject Minerals in raw form, before any processing or beneficiation, or elects to process the Subject Minerals through a smelter or other processing facility, the Production Royalty shall be equal to one and a half  percent (1.5%) of the "net proceeds" received by Wildcat from the purchaser, smelter or other processing facility. As used herein, "net proceeds" shall mean the gross amount received by Wildcat from the purchaser, smelter or other processing facility less deductions for: (i) if applicable, actual smelting or other processing costs (to the extent the smelter or other processor has not already deducted them before making payment); (ii) actual transportation costs from the Property to the point of sale, smelter or other processing facility; and (iii) penalties and sampling or assaying costs imposed by the purchaser, smelter or other processing facility. No deductions shall be made for mining costs.
 (b)
 The Production Royalty payments shall accrue monthly at the end of each month, and shall become due and payable monthly on the 15th day of the following month.  The Production Royalty payments shall be accompanied by a settlement sheet showing in reasonable detail the quantities and grades of the Subject Minerals processed for the preceding month, the proceeds of sale, costs and other deductions, and other pertinent information in sufficient detail to explain the calculation of the Production Royalty payments, including data pertaining to the weighing, sampling, and assaying of the Subject Minerals for the calculation of the Production Royalty due hereunder.
 3.
 Nature of Interest.  The parties hereto agree that the interest herein granted does not provide Grantee or Grantee's respective agents, heirs, successors, or assigns with the right, power or privilege to: (a) enter onto the Premises; (b) sell, remove, drill for or produce any Subject Minerals from the Premises; or (c) seek partition of the mineral estate in the Premises. Grantee shall be liable for and pay all income taxes on money paid to them.
 IN WITNESS WHEREOF, Grantor has executed this Perpetual Non-Participating Production Royalty Deed as of the ___ day of June 2012.
 	 	
	 WITNESSES:
 

 

 Print Name:
 

 

 Print Name:
	 WILDCAT MINING CORPORATION
 a Nevada corporation
 

 

 By:___________________________
       Randall Oser
       President

 

 

 STATE OF _______________
 )
 )  ss.
 COUNTY OF ______________
 )
 

 The foregoing instrument was acknowledged before me this ____ day of June, 2012, by Randall Oser, the President of Wildcat Mining Corporation, on behalf of the company; who is personally known to me or who has produced _________________________ as identification.
 

 

 Printed Name:
 Notary Public
 My Commission Expires: 
 

 

 

 
 EXHIBIT D
 

 SITE
 

 

 Mining Claims Owned and Leased as of June 15, 2012 
 All of the following described patented lode mining claims are located in the California Mining District, La Plata County, Colorado.
 OWNED
 Name of Claim (Patented Lode)
 Patent U.S. Survey Number
 Idaho Millsite
 18320
 Idaho Millsite No. 1
 18321
 Idaho Millsite No. 2
 18321
 Alpine
 18321
 Lord Kitchener
 17108
 Hartford
 17108
 Gertrude
 16616
 Good Hope
 17124
 Sunrise
 17124
 Cathryn
 16616
 Midnight
 19646
 Helen
 19515
 Midnight No. 2
 19646
 Pay Day
 19516 "A"
 Pay Day Millsite
 19516 "B"
 LEASED
 Name of Claim (Patented Lode)
 Patent U.S. Survey Number
 Gilmore Lode
 16985
 May Day Lode
 16985
 Golden Rule Lode
 16985
 Hesperus Lode
 16985
 Pat Lode
 16985
 Kenton Lode
 16985
 Cimarron Lode
 16985
 Tunnel Lode
 19078
 Tram Lode
 19078
 Boston Lode
 19078
 Brooklyn Lode
 20171
 Golden Rule Lode
 8824
 

 All of the Lessors interest in N/2 SW/4 and S2 NW/4 of Sec.28, T.  S. R. 11 W., N.M.P.M. except that portion which is west of line 17-18 of the Golden Rule Placer MS 8824
 

 

 

 

 

 
 

 EXHIBT E
 

 EVALUATION OF SELECTED MINERALIZED STOCKPILES 
 

 [SEE ATTACHED]
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 AN EVALUATION OF SELECTED MINERALIZED STOCKPILES ON THE MAY DAY- IDAHO PROPERTY, SOUTHERN LA PLATA MOUNTAINS, LA PLATA COUNTY, SOUTHWESTERN COLORADO, U.S.A
 

 

 REPORT SUBMITTED ON BEHALF OF
 WILDCAT MINING CORPORATION
 

 

 DAVID A. GONZALES (CPG-11266)
 May25, 2012
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 Surface Stockpile Material on Idaho Property
 Since 2008, an effort has been made to gain control on the tonnage and grade of stockpiled material on the Idaho property within the boundaries of the Mayday-Idaho complex held by Wildcat Mining Corporation.  Two piles (ID SP#1 and ID SP#2) were determined to contain gold-silver bearing rock with concentrations of gold and silver to make them viable targets (Figures 1-3).  The exact source of these stockpiles is uncertain, but an effort is underway to determine where these materials originated.  Preliminary measurements and assays were collected in 2008, and additional trenching (Tables 1 and 2) and sampling (Tables 3 and 4) of both stockpiles was completed in December 2011.  In additional bulk density of 80.48 pcf was determined for a composite sample from stockpiles by Trautner Geotech LLC (refer to attachment).
 In 2008 a rough estimate from surface dimensions was used to determine an approximate tonnage of ~2000 tons for the larger of the two stockpiles (ID SP#1); this was a poorly controlled measurement since a bulk density for the stockpile had to be assumed and the volume was not well controlled.  Arithmetic mean concentrations of 0.26 opt Au and 0.86 opt Ag were determined from 14 grab samples out of pile ID SP#1 (Table 3).  The gross tonnage of the large stockpile (ID SP#1) was recalculated at about 1200 tons from trenching and more detailed measurements on the dimensions of the pile, and the bulk density calculation (Table 2).  Trench sampling across the larger stockpile determined a weighted-mean average concentrations of 0.21 opt Au and 0.22 opt Ag (Table 4).
 In 2008 the smaller of the stockpiles (ID SP#2) was trenched and a volume of about 1246 cubic feet was determined with a gross tonnage of 50 tons (Table 1).  Arithmetic mean concentrations of 0.30 opt Au and 0.63 opt Ag were determined from 14 grab samples from ID SP#2 (Table 3).  Field measurements made in 2011 confirm the gross tonnage of the smaller stockpile (ID SP#2) at 53 tons with weighted-mean average concentrations of 0.20 opt Au and 0.20 opt Ag (Tables 2 and 4).  Note that the smaller of the volumes presented on tables 1 and 2 is preferred since it was determined by a multiple trench end-area method that provided more accurate results.
 With the new data from material in the two stockpiles, the grades and gross tonnages are sufficiently defined for these piles to be considered a proven reserve that 
 

 

 

 
 can be moved and processed.  NOTE: The cost of the extraction, transport, and beneficiation of these stockpiled materials is yet to be determined, and has not been factored into the interpretations and conclusions of this report.
 

 Level No. 1, In-Drift Stockpiles on May Day Property
 On the floor of the May Day Level 1 main stope there is a pile of broken rock left from historical mining that is roughly 20 x 100 x 25 feet in dimension for a total volume of 50,000 cubic feet.  This stockpile contains about 2700 tons of mineralized rock (Table 6) that can be milled using a density factor of 107 pcf (measured by Trautner Geotech LLC on May 24, 2012).  The in-drift stockpile is heterogeneous and composed of material that has fallen from the walls and back of the drift for at least 40 years.  The fragments in this pile range from less than 1 inch to several feet in dimension.  The degree of mineralization in this material varies both vertically and laterally.  Ten grab samples taken from the pile contain from no detectable Au to 1 opt Au with an average grade of 0.28 opt Au (Table 7).  Although the concentrations of Au and Ag are quite variable, three of the samples have gold concentrations of ~0.7 opt Au.  Silver values from these analyses ranged from 0.5 to 27 opt with an arithmetic average grade of 8.89 (Table 7) opt Ag.  Not enough in-field samples have been collected in a proper fashion to determine a weighted mean average for grade.  This material is already broken and can be easily moved for milling.  The dimensions of these deposits are roughly defined, and samples have been taken from different depths of the pile.  More surveys are needed, however, to get better control on the actual tonnage and grade of the material.
 

 

 

 

 

 

 

 

 

 
 

 Table 1: A summary of calculations used to determine tonnage of stockpile ID SP#2 on the basis of four trenches cut across the width of the pile and using the End Area Method of volume determination for each section.  This method gives a more accurate estimate of the volume of the pile.
 

 	 	 	 	 	 	 	 	 	
	 Stockpile
	 Volume Trenches 1-2 (cubic feet)
	 Volume Trenches 2-3 (cubic feet)
	 Volume Trenches 3-4 (cubic feet)
	 Volume of Small Conical Pile 
	 Total Volume (cubic feet)
	 Dry Rodded Bulk Density (pounds per cubic foot)
	 Pounds Material
	 Short Tons of Material (2000 pounds per ton)

	 ID SP#2
	 249
	 489
	 356
	 152
	 1246
	 104
	 129584
	 65

 

 Table 2: A summary of calculations used to determine tonnages of the stockpiles in December 2011 as discussed in this report.  Area for these calculations was determined using Google Earth Pro and field measurements.  Average depths were determined by trenching and field measurements.
 

 	 	 	 	 	 	 	
	 Stockpile
	 Area (square feet)
	 Average Depth (feet)
	 Volume (cubic feet)
	 Dry Rodded Bulk Density (pounds per cubic foot)
	 Pounds Material
	 Short Tons of Material (2000 pounds per ton)

	 ID SP#1
	 2932
	 10
	 29320
	 105
	 3078600
	 1539

	 ID SP#2
	 826
	 1.6
	 1322
	 104
	 129530
	 69

 

 Table 3: A summary of calculations used to determine arithmetic mean grades of the stockpiles.  ND indicates that the value was below detection and not measurable.  The bold values at the bottom of the table are mean arithmetic values.  The assays from the stockpiles were from two labs, including the certified Activation Laboratories Ltd.  All samples for assay were submitted with standards and blanks.
 

 	 	 	 	 	
	 ID SP#1 Au Assays
	 ID SP#1 Ag Assays
	  
	 ID SP#2 Au Assays
	 ID SP#2 Ag Assays

	 0.2481
	 ND
	  
	 0.263
	 0.53

	 0.1221
	 ND
	  
	 0.3284
	 0.92

	 0.0802
	 0.41
	  
	 0.2887
	 0.67

	 0.0421
	 0.74
	  
	 0.2165
	 0.62

	 0.0227
	 0.45
	  
	 0.2183
	 0.72

	 0.0766
	 0.51
	  
	 0.3212
	 0.65

	 0.2982
	 0.82
	  
	 0.32
	 0.71

	 0.0644
	 0.62
	  
	 0.316
	 0.43

	 1.002
	 1.65
	  
	 0.1921
	 0.14

	 0.9235
	 1.45
	  
	 0.2485
	 0.27

	 0.2886
	 0.71
	  
	 0.32
	 0.29

	 0.2264
	 0.43
	  
	 0.06
	 5.34

	 0.2775
	 0.79
	  
	 0.25
	 0.26

	 0.20
	 0.16
	  
	 0.27
	 0.42

	 0.08
	 0.16
	  
	  
	  

	 1.10
	 0.13
	  
	  
	  

	 0.05
	 0.35
	  
	  
	  

	  
	  
	  
	  
	  

	 Average opt = 0.26
	 Average opt = 0.86
	  
	 Average opt = 0.30
	 Average opt = 0.63

 

 

 

 

 
 

 Table 4: A summary of calculations used to determine mean-weighted grades of the stockpiles.  All of the samples from the stockpiles in the most recent work were analyzed by Activation Laboratories Ltd.
 

 	 	 	 	 	 	 	 	 	 	
	 ID SP#1
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 F = Distance Factor (2 feet)
	 W = width of sampling cut
	 opt Au
	 opt Ag
	 W * F
	 W * F * Au opt
	 W * F * Ag opt
	 (W * F)/F
	 Weighted Mean Average Au opt
	 Weighted Mean Average Ag opt

	 1
	 1
	 0.194
	 0.193
	 1
	 0.194
	 0.193
	 1.000
	 0.21
	 0.22

	 2
	 1
	 0.19
	 0.193
	 2
	 0.38
	 0.386
	  
	  
	  

	 2
	 1
	 0.117
	 0.193
	 2
	 0.234
	 0.386
	  
	  
	  

	 2
	 1
	 0.163
	 0.225
	 2
	 0.326
	 0.45
	  
	  
	  

	 2
	 1
	 0.27
	 0.193
	 2
	 0.54
	 0.386
	  
	  
	  

	 2
	 1
	 0.331
	 0.257
	 1
	 0.662
	 0.514
	  
	  
	  

	 2
	 1
	 0.219
	 0.257
	 2
	 0.438
	 0.514
	  
	  
	  

	 1
	 1
	 0.149
	 0.225
	 1
	 0.149
	 0.225
	  
	  
	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 14
	 8
	  
	  
	 14
	 2.923
	 3.054
	  
	  
	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

 

 	 	 	 	 	 	 	 	 	 	
	 ID SP#2
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 F = Distance Factor (2 feet)
	 W = width of sampling cut
	 opt Au
	 opt Ag
	 W * F
	 W * F * Au opt
	 W * F * Ag opt
	 (W * F)/F
	 Weighted Mean Average Au opt
	 Weighted Mean Average Ag opt

	 1
	 1
	 0.246
	 0.161
	 1
	 0.246
	 0.161
	 1.000
	 0.199
	 0.195

	 2
	 1
	 0.105
	 0.096
	 2
	 0.21
	 0.192
	  
	  
	  

	 2
	 1
	 0.067
	 0.096
	 2
	 0.134
	 0.192
	  
	  
	  

	 2
	 1
	 0.048
	 0.001
	 2
	 0.096
	 0.002
	  
	  
	  

	 2
	 1
	 0.024
	 0.129
	 2
	 0.048
	 0.258
	  
	  
	  

	 2
	 1
	 0.668
	 0.579
	 1
	 1.336
	 1.158
	  
	  
	  

	 2
	 1
	 0.274
	 0.322
	 2
	 0.548
	 0.644
	  
	  
	  

	 1
	 1
	 0.168
	 0.129
	 1
	 0.168
	 0.129
	  
	  
	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 14
	 8
	  
	  
	 14
	 2.923
	 3.054
	  
	  
	  

 

 

 

 

 

 

 

 

 

 
 

 Table 5: A summary of proven reserves determined form stockpiles on the Idaho section of the Mayday-Idaho complex.
 	 	 	 	 	 	
	 Mineralized Stockpiles on the Idaho Property

	 Nature of Evaluation
	 Evaluator
	 Type of Data Used
	 Calculated Tonnages of Economic Material
	 Average Grade in Ounces/Ton of Au
	 Average Grade in Ounces/Ton of Ag

	 Stockpile Measurements and Sampling
	 Wildcat Mining Corporation
	 Field Measurements, Assays
	 1604
	 0.21 
	 0.21

 

 Table 6: A summary of calculations used to determine tonnages of the in-drift stockpiles on the May Day #1 level.  The total volume for this pile is estimated from rough measurements, and are not well constrained by trenching or test holes.
 

 	 	 	 	 	 	 	
	 Stockpile
	 ~Area (ft2)
	 ~Average Depth (feet)
	 Volume (ft2)
	 Dry Rodded Bulk Density (pounds per cubic foot)
	 Pounds Material
	 Short Tons of Material (2000 pounds per ton)

	 MD#1
	 2500
	 20
	 50,000
	 107
	 5350000
	 2675

 

 Table 7: A summary of assays for samples collected from the in-drift stockpile in the May Day #1 level.
 

 	 	 	 	
	 Sample Number
	 Assay Company
	 Au opt 
	 Ag opt

	 MD1-DG5.1-081708
	 Brownstone Mining Assay
	 0.71
	 21.63

	 MD1-DG5.2-081708
	 Brownstone Mining Assay
	 0.08
	 0.63

	 MD1-DG5.3-081708
	 Brownstone Mining Assay
	 0.08
	 1.21

	 MD1-DG5.4-081708
	 Brownstone Mining Assay
	 0.06
	 0.62

	 MD1-DG5.5-081708
	 Brownstone Mining Assay
	 0.06
	 0.46

	 MD1-DG5.6-081708
	 Brownstone Mining Assay
	 0.06
	 0.55

	 MD1-DG5.7-081708
	 Brownstone Mining Assay
	 0.07
	 0.48

	 MD1-V5.1D-DG-082808
	 Activation Laboratories
	 0.71
	 27.30

	 MD1-V5.1M-DGM-082808
	 Activation Laboratories
	 0.70
	 27.17

	 MD1-V5.1M-DG-090408
	 Activation Laboratories
	 0.00
	 0.01

	  
	  
	  
	  

	  
	  
	 Average opt = 0.28 
	 Average opt = 8.89 

 

 

 

 

 

 

 
 

 
 

 Figure 1: Map showing the location of the La Plata district and main roadway in the area (taken from Cappa, 1998).  The star indicates the approximate location of the Mayday-Idaho complex.
 

 

 

 

 

 
 

 
 

 Figure 2: Topographic map showing the approximate location (star) of the two stockpiles on the Mayday-Idaho complex. 
 

 

 

 

 

 

 
 

 
 Figure 3: Map showing the locations to stockpiles ID SP#1 and ID SP#2 at Mayday-Idaho complex.
 

 

 

 
 EXHIBT F
 

 SUMMARY OF POTENTIAL MINERALIZATION IN THE WEST WALL OF MAYDAY MINE LEVEL NO.  O
 

 [SEE ATTACHED]
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 A SUMMARY OF POTENTIAL MINERALIZATION IN THE WEST WALL OF MAY DAY MINE LEVEL NO. 1, THE MAY DAY- IDAHO PROPERTY, SOUTHERN LA PLATA MOUNTAINS, LA PLATA COUNTY, SOUTHWESTERN COLORADO, U.S.A
 

 

 REPORT SUBMITTED ON BEHALF OF
 WILDCAT MINING CORPORATION
 

 

 DAVID A. GONZALES (CPG-11266)
 May 31, 2012
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 The west wall of the stope in the No. 1 level of the May Day Mine (Figure 1) has been a site of interest for geologic exploration since 2008.  Geologic surveys in this zone have established an extensive zone of mineralized calcite and quartz veins adjacent to the north-trending May Day vein (Figure 1).  In this zone, sandstone of the Entrada Formation is cut by a diorite-monzonite porphyry dike that dips nearly 90 ̊ and is up to 7 m (~ 20 feet) thick.  The mineralization in the west wall of the May Day No. 1 stope is spotty and discontinuous, occurring as stockwork breccia pods and stringers.  Mineralization increases from the sandstone wall rock into the dike.  The sandstone wall rock generally has 5 to 15% sulfide and Au-Ag telluride minerals whereas the intrusive has 20 to 40% ore-mineral assemblages.  Previous exploratory blasting in the west wall to a depth of ~6 m (~20 feet) exposed a ~10 m zone (~30 feet) of mineralization developed in the dike and its margins.  Assay results for samples taken from mineralized zones at various points on west wall of the stope are presented in Table 1.
  
 A two-foot channel sample was taken across the mineralized dike exposed on the west wall.  This sample included ~2 m of brecciated sandstone wall rock on both margins of the dike.  Twelve samples collected at 2-foot intervals (TO17a to TO17g and TO17.5 to TO17f) in this channel sample yielded a weighted mean average of 0.9 opt Au and 3.1 opt Ag.  Sampling also revealed that Au-Ag grades increase on the margins of the intrusive and are as high as 3.9 to 4.4 oz/ton Au with Ag grades as high as 30 oz/ton.
  
 The zone of mineralization in the No. 1 stope extends on the exposed wall for at least ~25 m (~75 feet) above the current floor of the stope.  Veins in these upper workings are fairly continuous and well developed.  Twenty-six samples collected from the bottom to the top of this zone (Table 1) yielded an arithmetic mean of 0.3 opt gold and 0.82 opt silver.  Six of the samples that were collected contain 0.5 and 1.5 opt gold (Table 1).
  
 Our preliminary data indicate that the gold and silver concentrations in the west wall of the May Day No. 1 stope are increasing with depth into the wall (west on Figure 1).  No in-wall drilling has been done at this location to confirm the spatial dimensions of the zone of mineralization in the dike and adjacent host rock, but Eckel (1949) projects this dike on an east-west trend into the west wall for about 50+ m (150+ feet) (Figure 1).  If the mineralization does extend to this depth then ~18000 tons of mineralized rock with multi-ounce Au could be realized.  Again, this is an unconfirmed estimate of tonnage until drilling of the wall is done.
 

 

 

 
 The mineralization found on the west wall of the May Day No. 1 stope also extends to the east wall of the stope.  This zone has not been extensively sampled, but a survey with a hand-held XRF reveals numerous pockets and blebs with Au-Ag concentrations similar to those determined on the west wall.  Precious-metals mineralization in both walls of the stope hold a great deal of potential and will be further explored.
 

 

 
  
 Figure 1: Geologic map of the No. 1 level of the May Day Mine as compiled by Eckel (1949).  The west wall of the stope in this level, as discussed in this report, is outlined by the oval.
 

 

 

 

 

 

 
 

 Table 1: Fire assay data collected from the west wall of the May Day No. 1 level from 2008 to 2011.  All samples were analyzed by Activation Laboratories except Hazen HAZ-01-08-11-11.  Analyses with > 0.5 opt Au are highlighted in yellow.  ND indicates that concentrations were lower than detection limits of the fire-assay methods applied.
 

 	 	 	 	 	 	
	 Sample Number
	 Sample Location
	 Au g/tonne
	 Ag g/tonne
	 Au opt
	 Ag Opt

	  
	  
	  
	  
	  
	  

	 MD1-DG17a-071309
	 main stope west wall
	 1.95
	 < 3
	 0.1
	 ND

	 MD1-DG17b-071309
	 main stope west wall
	 37.9
	 23
	 1.2
	 0.7

	 MD1-DG17c-071309
	 main stope west wall
	 < 0.03
	 < 3
	 ND
	 ND

	 MD1-DG17d-071309
	 main stope west wall
	 0.26
	 < 3
	 ND
	 ND

	 MD1-DG17e-071309
	 main stope west wall
	 < 0.03
	 < 3
	 ND
	 ND

	 MD1-DG17K-072409
	 main stope west wall
	 < 0.03
	 < 3
	 ND
	 ND

	 MD1-DG17G-072409
	 main stope west wall
	 0.2
	 < 3
	 0.0
	 ND

	 MD1-DG17H-073109
	 main stope west wall
	 < 0.03
	 < 3
	 ND
	 ND

	 MD1-DG17I-073109
	 main stope west wall
	 < 0.03
	 < 3
	 ND
	 ND

	 MD1-DG17J-073109
	 main stope west wall
	 < 0.03
	 < 3
	 ND
	 ND

	 TO10V-070509
	 main stope west wall
	 0.59
	 < 3
	 0.0
	 ND

	 MD1-TO11V-080409
	 west wall main stope breccia
	 19.3
	 27.0
	 0.6
	 0.9

	 MD1-TO12V-080409
	 west wall main stope breccia
	 < 0.03
	 < 3
	 ND
	 ND

	 MD1-TO14V-080409
	 west wall main stope breccia
	 < 0.03
	 < 3
	 ND
	 ND

	 MD1-TO15V-080409
	 west wall main stope breccia
	 < 0.03
	 < 3
	 ND
	 ND

	 MD1-TO17A-080709
	 west wall main stope breccia
	 2.8
	 8.0
	 0.1
	 0.3

	 MD1-TO17B-080709
	 west wall main stope breccia
	 122.0
	 1070.0
	 3.9
	 34.4

	 MD1-TO17C-080709
	 west wall main stope breccia
	 0.6
	 3.0
	 0.0
	 0.1

	 MD1-TO17D-080709
	 west wall main stope breccia
	 0.2
	 < 3
	 0.0
	 ND

	 MD1-TO17E-080709
	 west wall main stope breccia
	 < 0.03
	 < 3
	 ND
	 ND

	 MD1-TO17G-080709
	 west wall main stope breccia
	 138.0
	 49.0
	 4.4
	 1.6

	 MD1-TO17 A.5-082009
	 west wall main stope breccia
	 13.5
	 11.0
	 0.4
	 0.4

	 MD1-TO17 D H-082009
	 west wall main stope breccia
	 < 0.03
	 < 3
	 ND
	 ND

	 MD1-TO17 H-082009
	 west wall main stope breccia
	 22.2
	 12.0
	 0.7
	 0.4

	 MD1-TO17 H.9-082009
	 west wall main stope breccia
	 35.4
	 38.0
	 1.1
	 1.2

	 MD1-TO17 F.-082009
	 west wall main stope breccia
	 < 0.03
	 < 3
	 ND
	 ND

	 MD1-TO17 A.9-082009
	 west wall main stope breccia
	 1.5
	 5.0
	 0.0
	 0.2

	 MD1-DG18A-082809
	 west wall main stope breccia
	 6.3
	 16.0
	 0.2
	 0.5

	 MD1-DG18B-082809
	 west wall main stope breccia
	 5.8
	 7.0
	 0.2
	 0.2

	 MD1-DG18C-082809
	 west wall main stope breccia
	 11.8
	 5.0
	 0.4
	 0.2

	 MD1-DG18D-082809
	 west wall main stope breccia
	 48.7
	 23.0
	 1.6
	 0.7

	 MD1-MC1-090709
	 west wall main stope breccia
	 < 0.03
	 < 3
	 ND
	 ND

	 MD1-MC2-090709
	 west wall main stope breccia
	 12.1
	 10.0
	 0.4
	 0.3

	 MD1-MC3-092409
	 west wall main stope breccia zone 50' up on wall
	 1.2
	 < 3
	 0.0
	 ND

	 MD1-MC4-092409
	 west wall main stope breccia zone 50' up on wall
	 7.2
	 21.0
	 0.2
	 0.7

	 MD1-T020B-092409
	 west wall main stope breccia zone
	 0.4
	 12.0
	 0.0
	 0.4

	 MD1-T021A-092409
	 west wall main stope high wall 50' up on breccia zone
	 4.0
	 5.0
	 0.1
	 0.2

	 MD1-T021B-092409
	 west wall main stope high wall 45' up on breccia zone
	 6.3
	 6.0
	 0.2
	 0.2

	 MD1-TO21C-092409
	 west wall main stope high wall 40' up on breccia zone where black intrusive intersects in roof
	 3.7
	 < 3
	 0.1
	 ND

	 MD1-TO24-100809
	 Upper dog hole west wall main stope approx 70ft up on west wall going south
	 3.5
	 10.0
	 0.1
	 0.3

	 MD1-TO25-100809
	 Upper dog hole west wall main stope approx 70ft up on west wall going south
	 18.7
	 15.0
	 0.6
	 0.5

	 MD1-TO26-100809
	 Upper dog hole west wall main stope approx 70ft up on west wall going south
	 20.6
	 31.0
	 0.7
	 1.0

	 MD1-TO27C-100809
	 Upper dog hole west wall main stope approx 70ft up on west wall going south
	 <.03
	 5.0
	 ND
	 0.2

	 MD1-TO28C-100809
	 Upper dog hole west wall main stope approx 70ft up on west wall going south
	 0.8
	 <3
	 0.0
	 ND

	 MD1-TO29A-100809
	 Upper dog hole west wall main stope approx 70ft up on west wall going south
	 1.5
	 14.0
	 0.0
	 0.5

	 MD1-TO30-100809
	 Upper dog hole west wall main stope approx 70ft up on west wall going south
	 3.9
	 6.0
	 0.1
	 0.2

	 MD1-TO31C-100809
	 Upper dog hole west wall main stope approx 70ft up on west wall going south
	 5.5
	 30.0
	 0.2
	 1.0

	 MD1-MDB1-100709
	 Upper dog hole west wall main stope approx 70ft up on west wall going south
	 < 0.03
	 < 3
	 ND
	 ND

	 MD1-T031-101809
	 vein in S.S. south of  west wall breccia zone
	 22.0
	 7.0
	 0.7
	 0.2

	 MD1-T018-101809
	 left side of west wall breccia zone
	 2.2
	 12.0
	 0.1
	 0.4

	 MD1-TO35A-011610
	 MD1 (?)
	 < 0.03
	 < 3
	 ND
	 ND

	 MD1-TO35B-011610
	 MD1 (?)
	 0.2
	 < 3
	 0.0
	 ND

	 MD2-TO36A-011610
	 MD1 (?)
	 4.68
	 150
	 0.2
	 4.8

	 MD1-TO36B-011610
	 MD1 (?)
	 29.6
	 525
	 1.0
	 16.9

	 MD1-TO36C-011610
	 MD1 (?)
	 4.25
	 119
	 0.1
	 3.8

	 MC 78
	 main stope
	 3.11
	 15
	 0.1
	 0.5

	 MC 79
	 main stope
	 1.18
	 < 3
	 0.0
	 ND

	 MC 76
	 main stope
	 31.5
	 31
	 1.0
	 1.0

	 MC 77
	 main stope
	 < 0.03
	 < 3
	 ND
	 ND

	 MC 75
	 main stope
	 0.5
	 < 3
	 0.0
	 ND

	 MC -A
	 main stope
	 < 0.03
	 < 3
	 ND
	 ND

	 MC -B
	 main stope
	 11.5
	 14
	 0.4
	 0.5

	 MC -C
	 main stope
	 < 0.03
	 < 3
	 ND
	 ND

	 MC 75-79 D
	 main stope
	 7.43
	 10
	 0.2
	 0.3

	 MC 75-79 C
	 main stope
	 14.2
	 16
	 0.5
	 0.5

	 MC 75-79 B
	 main stope
	 5.07
	 8
	 0.2
	 0.3

	 MC 75-79 A
	 main stope
	 4.83
	 8
	 0.2
	 0.3

	 MC A-C #1
	 main stope
	 1.88
	 3
	 0.1
	 0.1

	 MC A-C #2
	 main stope
	 3.33
	 6
	 0.1
	 0.2

	 MC A-C #3
	 main stope
	 2.76
	 4
	 0.1
	 0.1

	 MC A-C #4
	 main stope
	 2.43
	 < 3
	 0.1
	 ND

	 MD1-MC6-011610
	 MD1 (?)
	 0.14
	 < 3
	 0.0
	 ND

	 DG-MD1-070811
	 west wall main stope breccia in dike
	 51.5
	 219
	 1.7
	 7.0

	 Actlabs-1001-08-2011
	 west wall main stope breccia in dike
	 29.6
	 73
	 1.0
	 2.3

	 Hazen HAZ-01-08-11-11
	 west wall main stope breccia in dike
	  
	  
	 0.906
	 1.6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00205-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00205-of-00352.parquet"}]]