<PAGE 1>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
EXPLORE TECHNOLOGIES, INC.
(Exact name of Company as specified in its charter)
NEVADA 88-0419476
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 505, 1155 Robson Street
Vancouver, British Columbia, Canada V6E 1B5
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
604-689-1659
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Common Stock None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Shares, par value $0.001 per share
(Title of class)
<PAGE 2>
TABLE OF CONTENTS
Page
COVER PAGE.................................................1
TABLE OF CONTENTS..........................................2
PART I.....................................................3
DESCRIPTION OF BUSINESS....................................3
DESCRIPTION OF PROPERTY...................................11
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES...11
REMUNERATION OF DIRECTORS AND OFFICERS....................13
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN SECURITYHOLDERS ................................14
INTEREST OF MANAGEMENT AND OTHERS IN
CERTAIN TRANSACTIONS ................................... 14
SECURITIES BEING OFFERED................................. 14
PART II ............................................... 16
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS ............ 16
LEGAL PROCEEDINGS........................................ 16
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ........... 16
RECENT SALES OF UNREGISTERED SECURITIES ................. 16
INDEMNIFICATION OF DIRECTORS AND OFFICERS ............... 17
PART F/S ................................................ 18
FINANCIAL STATEMENTS .................................... 18
PART III ................................................ 18
INDEX TO EXHIBITS ....................................... 18
SIGNATURES ...............................................19
<PAGE 3>
PART I
The issuer has elected to follow Form 10-SB, Disclosure
Alternative 2.
Item 6. Description of Business
Organization
Explore Technologies, Inc. (the "Company") was organized as a
Nevada corporation on December 18, 1998.
Business
The Company is a natural resource company engaged in the
acquisition, exploration and development of mineral properties.
The Company has an interest in the properties described below
under the heading "Miranda Property Option Agreement". The
Company intends to carry out exploration work on the Miranda
Property in order to ascertain whether the Miranda Property
possesses commercially developable quantities of gold and other
precious minerals.
Miranda Property Option Agreement
By an agreement made as of December 22, 1998 between the Company
and Miranda Industries Inc. of Suite 505 - 1155 Robson Street,
Vancouver, British Columbia ("Miranda"), the Company acquired
from Miranda the option (the "Option") to acquire a 50% interest
in certain mineral claims situated in the State of Nevada (the
"Miranda Property"). The consideration paid by the Company to
Miranda for the grant of the Option was $1,000 US.
The Option is exercisable by the Company incurring the following
property exploration expenditures on the Miranda Property:
1. initial exploration expenditures in the amount of
$10,000 US by December 31, 1999; and
2. cumulative exploration expenditures in the amount of
$150,000 US by December 31, 2001.
Property exploration expenditures include all reasonable and
necessary monies expended on or in connection with the
exploration and development of the Miranda Property determined in
accordance with generally accepted accounting principles. In
addition, until the Company shall have secured a 50% interest in
the Miranda Property, the Company is obligated to make all
payments to Larry McIntosh pursuant to the Underlying Option
Agreement as required to enable Miranda to exercise the
Underlying Option to acquire the Miranda property from McIntosh,
as discussed below.
Upon the Company acquiring a 50% interest in the Miranda Property
by exercise of the Option, the Company and Miranda will enter
into a joint venture for the purpose of further exploring and
<PAGE 4>
developing and, if economically and politically feasible,
constructing and operating a mine on the Miranda Property.
The Company's Option is subject to an underlying option agreement
dated the 20th day of November, 1997 (the "Underlying Option
Agreement") between Miranda and Larry McIntosh of P.O. Box 1388,
Gardnerville, Nevada ("McIntosh") whereby Miranda acquired the
option to acquire the Miranda Property from McIntosh (the
"Underlying Option") by staking the mining claims comprising the
Miranda Property and making the following payments to McIntosh,
totalling $138,500 US, by the dates indicated below:
1. $2,500 US by November 20, 1998;
2. $7,000 US by November 20, 1999;
3. $9,000 US by November 20, 2000;
4. $10,000 US by November 20, 2001;
5. $10,000 US by November 20, 2002;
6. $20,000 US by November 20 of each of the years 2003 through
2007.
Miranda has represented to the Company that the mineral claims
comprising the Miranda Property have been staked and the initial
payment of $2,500 made to McIntosh, each as required to maintain
the Underlying Option in good standing. As stated above, until
the Company shall have secured a 50% interest in the Miranda
Property, the Company has agreed to make the necessary payments
to McIntosh in order to maintain the Underlying Option in good
standing. Upon completion of all payments required under the
Underlying Option, McIntosh will transfer to Miranda a 100%
interest in the Miranda Property and the claims comprising the
Miranda Property will be registered in the name of Miranda.
In addition, Miranda will be required to pay to McIntosh a
royalty equal to 2.5% of net smelter returns on the gross
proceeds received by the Company from the sale of any ore from
the mining of the Property, less costs of transportation,
refining and insurance costs. Upon payment of the total sum of
$500,000 US, the royalty will be reduced to 1.0% of net smelter
returns. Upon exercise of the Option by the Company, the Company
and Miranda will be obligated to pay this royalty to McIntosh in
equal shares as joint venture partners.
Miranda Property
The eleven lode claims comprising the Miranda Property have been
located and filed by Miranda on land administered by the U.S.
Bureau of Land Management. The claims are named Dune 1 - 8 and
22 - 24 and they are situated in sections 3, 4, 9, and 10 of T16N
and R32E.
The Miranda Property is located in the Stillwater Range about 2
miles (3.2 km) West of Sand Springs Pass on U.S. Highway 50 and
30 highway miles east of Fallon on U.S. 50 (48 km) in Churchill
County, Nevada. The property is approximately one half mile (0.8
km) north of the highway. The property is located approximately
23 miles (37 km) north of the Rawhide mine (1,600,000 ounces
gold) and 38 miles (61 km) south-southwest of Fondaway Canyon.
<PAGE 5>
Exploration History of the Miranda Property
The Miranda Property is an early stage exploration property
located in the Sand Springs Mining District, of Churchill County,
Nevada. The District has seen a long history of production
starting in 1905 and continuing until the mid-1960's. District
wide production has been approximately 21,000 ounces gold and
1,300,000 ounces silver.
Pegasus Gold Corporation had an exploration program on the
Miranda Property in 1992-1993. Their program consisted of
collecting 108 rock chip samples, cursory geologic mapping, and
drilling 13 reverse circulation drill holes. They intersected
anomalous gold in one drill hole and anomalous copper in two
other drill holes. Pegasus never followed up these anomalies.
Cordex Exploration also explored the area briefly, though did not
acquire it. Miranda became interested in the property in
September 1997. Miranda's program consisted of detailed geologic
mapping, rock chip and soil sampling, and conducting a ground
magnetometer survey.
Lithologies existing at the Miranda property include a Triassic
limestone overlain by an interbedded unit of phyllite, schist,
and metaconglomerate. Overlying the metasediments are Teritary
ryholite tuffs and extensive basalt flows. The limestone and
metasediments are intruded by a Cretaceous diorite. At the
contact of the limestone and diorite, in the western part of the
property, there is a major north-northeast striking shear zone.
The shear zone cuts the diorite and limestone and to the south of
these units it cuts the overlying ryholite.
The Miranda Property represents an opportunity of discovering a
skarn-hosted gold deposit near the contact of the Triassic
limestone and a Cretaceous diorite. In addition to the skarn
mineralization, there are numerous high-grade gold-bearing quartz
+/- tourmaline veins which cut the lower limestone unit and the
diorite. These discontinuous vein structures strike north-
northeast and dip steeply west. The limestone and diorite that
host these two styles of mineralization are located at the site
of a major north-northeast striking shear zone. Immediately
to the south of the limestone and diorite, the rocks are in fault
contact with an overlying Tertiary rhyolite. The rhyolite has
been downdropped a minimum of 400-500 feet (120-150 meters).
This block has been intersected by shearing but has not been cut
by north-northeast striking quartz +/- tourmaline veining. This
rhyolite block is also the host for at least one northwest
striking epithermal quartz vein structure. This vein is weakly
anomalous in gold but is strongly anomalous in mercury. This
northwest striking vein and the north-northeast striking shear
zone represents another target on the property.
Regional Geography
The Stillwater Range trends northerly through the center of
Churchill County, from Sand Springs Summit on U.S. 50 into
Pershing County. The range contains several units of deformed
Mesozoic rocks separated by thrust faults and is the center of a
large complex of Cretaceous mafic igneous rocks and a succession
of volcanic and intrusive rocks of Cenozoic age (Willden and
Speed, 1974). Fold axes in the layered Cenozoic rocks trend
northward.
<PAGE 6>
The principal rock units in the Sand Springs Range, the
continuation of the Stillwater Range south of the highway, are
volcanic sedimentary rocks of Triassic and Jurassic age,
Cretaceous granitic rocks, and Tertiary volcanic rocks. The Sand
Springs Range contains the largest exposed pluton in Churchill
County, a composite body of granodiorite and quartz monzonite
radiometrically dated at 76-80 m.y. (Nevada Bureau of Mines,
1964). Tertiary volcanic rocks overlie the intrusive complex in
the vicinity of Sand Springs Summit.
Geological Work Program
Miranda completed an exploration work program on the Miranda
Property consisting of the following:
1. Rock Chip Samples
Miranda collected 34 rock chip samples during their studies of
the area. The highest gold assays were in samples collected from
the quartz +/- tourmaline veins. Assay results from the quartz
+/- tourmaline veins ranged from 7 ppb Au to a high of 7,367 ppb
Au (0.21 oz Au/t). Six of the 13 (46%) quartz +/- tourmaline
veins contained greater than 1,000 ppb gold. The highest gold
value in skarn was 2,211 ppb. Two out of seven (28%) skarn
samples contained greater than 500 ppb gold. Two of the
epithermal quartz veins in the southwestern part of the property
contained 272 ppb Au and 296 ppb Au but were strongly anomalous
in mercury containing 14.994 ppm and 34.940 ppm respectively.
The highest copper value of 1.2% came from skarn. All together,
18 of the 34 samples (54%) contained greater than 100 ppb gold
and 4 of the 34 samples (12%) contained greater than 0.1% Cu.
The quartz +/- tourmaline veins contain the highest gold values
and the skarn contains moderate gold anomalies. Neither of these
areas had strongly anomalous mercury. Mercury was most anomalous
in the volcanic hosted epithermal zone to the southwest.
2. Soil Samples
Gold anomalies in the soil samples were confined to the soil
lines that were over the metasedimentary rocks and the diorite
which were the norther 2 lines (10600N, 11200N). These 2 lines
had the highest copper and arsenic anomalies. Gold, copper, and
arsenic anomalies ranged from 52-540 ppb, 112-1835 ppm, and
102-1351 ppm respectively. Contours of these elements trend
northeast. Mercury exhibits the best anomalies over the entire
soil grid. Highs are between 0.5 - 5 ppm and when contoured they
form a strong north-northeast trending mercury zone that
correlates with the shear zone that strikes the same direction.
<PAGE 7>
3. Magnetometer Survey
A magnetometer survey was conducted during December 1997. A
total of 19 line miles (30 km) was surveyed. The lines were
oriented N65W and were spaced 200 feet (60 meters) apart.
Station spacing on the lines was 50 feet (15 meters).
The magnetometer survey primarily picked-up the post-mineral
basalt flows that cover parts of the rhyolite tuffs and the
metasediments throughout the project area. In particular,
neither the diorite intrusive or the skarn alteration areas were
magnetically anomalous. They had no more than a 60 gamma
increase over the surrounding area. The major northwest striking
fault that separates the diorite and limestone from the ryholite
tuff to the south shows as a weak magnetic low. Associated with
this low is a high soil mercury anomaly. There is also a weak
low on the southern part of the property which strikes northwest.
There is also a mercury anomaly associated with this magnetic
low.
Overall, the results of the magnetic survey show none to weak
responses over rocks that on the surface are mineralized and
altered. It would be hard to pick out targets based on the
magnetics alone.
Conclusion and Recommendations of Geological Report
Evaluation of the Miranda Property has resulted in the discovery
of two gold-bearing areas in the western and southwestern part of
the claim block. In the western area, high-grade gold is hosted
in the quartz +/- tourmaline veins hosted in the diorite and
limestone and skarn mineralized zones in the limestone adjacent
to the diorite. The target for this style of mineralization
would be the skarn mineralization in the limestone at the diorite
contact. This target is a near surface target and could be
tested with drill holes of less than 300 feet (90 meters).
The southwestern target would be along the southern trend of the
shear zone under the rhyolite tuff cover. This target would
extend from the northwest striking fault contact of the diorite
and limestone with the rhyolite to the south near the
intersection of the northwest striking epithermal quartz vein.
This target has low gold in rock chip samples but has strongly
anomalous mercury in rock and soil. The low gold geochem anomaly
and the downdropped displacement along the northwest fault
suggests that mineralized rock is deeper and that drill testing
this target will require drilling in excess of 500 feet (150
meters).
The copper anomalies intersected in Pegasus' drill holes
PSS-12-93 and PSS-13-93 were not followed-up. The intercepts in
the two holes are along a north-northeast strike and it would be
a straight forward proposition to test this anomalous zone along
trend.
Skarn mineralization has been previously tested by drilling, but
only two drill holes were located in what appears to be the best
target of the area. One of those holes (PSS-94-4) intersected 10
feet (3 meters) of 0.14 ounces Au/ton. This mineralized intercept
was never followed up. The second drill hole (PSS-94-1) did not
intersect any significant mineralization. This leaves the skarn
mineralized
<PAGE 8>
target and the quartz +/- tourmaline vein zone open for discovery.
The rhyolite tuff covered target has never been drill tested and
it is likely that it has never been explored.
Positive results from Miranda's exploration program suggests that
there is evidence of a skarn-hosted gold deposit on the property
and that untested drill targets remain and need to be tested.
The following table summarizes the costs involved in a
three-phased trench and drill program at the Miranda Property, as
recommended in the Geological Report. The first phase involves a
trenching program that will be used to locate and justify a
two-phased drilling program.
- ------------------------------------------------------------------
Work Program Proposed by Geological Report
- ------------------------------------------------------------------
Phase I Cost/unit Total Description
- ------- --------- ------ ---------------
Geologist 10 days $300 $3,000 Permitting and
the work
Expenses 6 days $80 $480 Room and Board
6 days $50 $300 Backhoe
$3,240 Trenches
Assaying 50 samples $25 $1,250 Reporting
$700 Final Report
Contingency $900 Road reclaim,
------ revegetation
Total Phase I $9,870
Phase II Cost/unit Total Description
- --------- --------- ----- -------------
Geologist 10 days $300 $3,000 Drill site
location,
supervision
Permitting 1 day $300 $300 BLM permitting
Road Work 2 days $1,200 $2,400 Road
construction,
reclamation
Drilling 3,000 feet $10 $30,000 Drilling
Assays 600 samples $10 $6,000 Au, Ag, Cu
Land/Claim $1,800 Maintenance fee
Reporting 5 days $250 $1,250 Final report
--------
Sub-Total $44,750
Contingency 5% $2,237
--------
Total Phase II $46,987
<PAGE 9>
Phase III Cost/unit Total Description
- ---------- --------- ------- -----------------
Geologist 20 days $300 $6,000 Drill Supervision
Drilling 6,000 feet $10 $60,000 Drilling
Assays 1,200 samples $10 $12,000 Au, Ag, Cu
Reporting 5 days $250 $1,250 Final Report
Reclamation 2 days $1,200 $2,400 Road reclaim,
------- revegetation
Sub-Total $81,650
Contingency 5% $4,082
-------
Total Phase III $85,732
Company's Plan of Operation
The Company has determined to proceed with Phase One of the
exploration program on the Miranda Property. The Company has
raised sufficient funds from prior offerings of its securities,
as set forth in Item 4 of Part II of this Registration Statement,
to proceed with Phase One of the exploration program. The
Company will assess whether to proceed with Phase Two of the
exploration program upon completion of Phase One and an
evaluation of the results of the Phase One program.
Administration
The Company has entered into a management contract dated December
28, 1998 with Senate Capital Group Inc. whereby Senate Capital
has agreed to provide office administration services to the
Company for a fee of $750 US per month for a one-year term
commencing January 1, 1999. The services include reception,
secretarial services, accounting services, investor relations and
general office services.
Competition and Marketing
The mining industry, in general, is intensively competitive and
there is not any assurance that even if commercial quantities of
ore are discovered, a ready market will exist for sale of same.
Numerous factors beyond the control of the Company may affect the
marketability of any substances discovered. These factors
include market fluctuations, the proximity and capacity of
natural resource markets and processing equipment, government
regulations, including regulations relating to prices, taxes,
royalties, land tenure, land use, importing and exporting of
minerals and environmental
<PAGE 10>
protection. The exact effect of these factors cannot be
accurately predicted, but the combination of these factors may
result in the Company not receiving an adequate return on invested
capital.
Compliance with Government Regulation
The Company will be required to comply with all regulations,
rules and directives of governmental authorities and agencies
applicable to the exploration of minerals in the State of
Nevada. In addition, production of minerals in the State of
Nevada will require prior approval of applicable governmental
regulatory agencies. There can be no assurance that such
approvals will be obtained. The cost and delay involved in
attempting to obtain such approvals cannot be known in advance.
Exploration Risk
Exploration for minerals is a speculative venture necessarily
involving substantial risk. There is not any certainty that the
expenditures to be made by the Company in the acquisition of the
interests described herein will result in discoveries of
commercial quantities of ore. Hazards such as unusual or
unexpected formations and other conditions are involved in
mineral exploration and development. The Company may become
subject to liability for pollution, cave-ins or hazards against
which it cannot insure or against which it may elect not to
insure. The payment of such liabilities may have a material
adverse effect on the Company's financial position.
No Known Bodies of Ore
There are not any known bodies of ore on the Company's
properties. The business plan of the Company is to raise funds
to carry out further exploration with the objective of
establishing ore of commercial tonnage and grade. If the
Company's exploration programs are successful, additional funds
will be required for the development of economic reserves and to
place them in commercial production. The only source of future
funds presently available to the Company is through the sale of
equity capital. The only alternative for the financing of
further exploration would be the offering by the Company of an
interest in its properties to be earned by another party or
parties carrying out further exploration or development thereof,
which is not presently contemplated.
Research and Development Expenditures
During the past two fiscal years, the Company has not completed
any research or development expenditures. Miranda Industries
Inc., the vendor of the Miranda Property, has completed the
geological exploration program on the Miranda Property, as
discussed above.
<PAGE 11>
Subsidiaries
The Company has no subsidiaries.
Employees
The Company has no employees. The Company conducts its business
through agreements with consultants and arms-length third
parties.
Patents and Trademarks
The Company does not own, either legally or beneficially, any
patent or trademark.
Item 7. Description of Property
The Company has an option to acquire a 50% interest in the
Miranda Property, as described in detail in Item 6 of Part I of
this Registration Statement under "Miranda Property Option
Agreement".
The Company does not own or lease any property other than the
Miranda Property. The Company has entered into an office
administration contract dated December 28, 1998 with Senate
Capital Group Inc. whereby Senate Capital has agreed to provide
office administration services to the Company for a fee of $750
US per month for a one-year term commencing January 1, 1999. The
services include reception, secretarial services, accounting
services, investor relations and general office services.
Item 8. Directors, Executive Officers and Significant Employees
The following information sets forth the names of the directors,
executive officers and significant employees of the Company,
their present positions with the Company, and their biographical
information.
1. Directors and Officers
Name of Director Age Position Term of Office
- ---------------- --- -------------- --------------
Peter William Bell 63 President/Sec.
Treasurer One year
Ross William
Johnston Bailey 37 One year
Richard Douglas Wilson 41 One year
Neil Murray-Lyon 52 One year
<PAGE 12>
Mr. Peter William Bell is a director and is President of the
Company. Mr. Bell is a self-employed consultant and is a
director of Current Technology Corporation. Mr. Bell has a
Bachelor of Science Degree in Pharmacy from the University of
Manitoba and a Masters in Business Administration from the
University of Western Ontario. Mr. Bell practiced as a
licensed pharmacist until 1968. Mr. Bell has provided a wide
range of consultant services to health care companies and
organizations. Mr. Bell has been a director and member of a
number of health care companies and professional organizations.
Mr. Bell was appointed to the Board of Directors of the Company
on December 29, 1998.
Mr. Ross William Johnston Bailey is a director of the Company and
has a Bachelors Degree in Mechanical Engineering from the
University of Victoria and is enrolled in the Masters in
Business Administration program at Simon Fraser University. Mr.
Bailey has been employed with Ballard Power Systems as a
manufacturing engineer since 1995. Mr. Bailey was appointed
to the Board of Directors of the Company on December 29, 1998.
Richard Douglas Wilson is a director of the Company and has been
managing publicly traded companies for the past 12 years on the
Vancouver Stock Exchange. He has been instrumental in raising
needed capital for several mineral resource companies. He is
President of International Chargold Resources which is building a
precious metals refinery in Ghana, West Africa. Mr. Wilson was
appointed to the Board of Directors of the Company on December
29, 1998.
Mr. Neil G. Murray-Lyon is a director of the Company and is the
President, Chief Executive Officer, Chief Financial Officer and a
Director of Wotan Capital Inc. He was the Secretary of Colt
Energy Inc. ("Colt"), a junior capital pool corporation that
completed its Major Transaction to become a public oil and gas
company listed on the Alberta Stock Exchange (the "ASE") until
December, 1998 when Colt completed an arrangement with KeyWest
Energy Corporation. He is currently the Chairman and one of the
controlling shareholders of Tokenhouse Capital & Research Inc.,
an investor-relations firm from November, 1994 until July, 1998
when it became an investment company. Mr. Murray-Lyon was also
an independent investor relations consultant from 1987 to 1994.
From October, 1994 to March, 1996, he was the Secretary of
Patshare Capital Inc., a junior capital pool corporation listed
on the ASE that completed its Major Transaction and changed its
name to EveryWare Development Canada Corp. He was also a past
Director of Allrich Energy Group Inc., a junior capital pool
corporation listed on the ASE that completed its Major
Transaction and changed its name to AltaRex Corp. Mr. Murray-Lyon
was appointed to the Board of Directors of the Company on
December 29, 1998.
<PAGE 13>
2. Significant Employees
The Company does not have any significant employees.
Item 9. Remuneration of Directors and Officers
The following table sets forth certain information as to the
Company's three highest paid executive officers and directors for
the fiscal year which will end on January 31, 2000 As indicated
below, the Company does not presently pay any compensation to any
of its officers and directors. The Company may during the course
of the current year decide to compensate its officers and
directors for their services. No other compensation is
anticipate to paid any such officers other than the cash
compensation set forth below.
Summary Compensation Table
Name Position Year Salary
- --------------------------- --------- ----- ------
Peter Bell President 1999 Nil
Ross William Johnston Bailey Director 1999 Nil
Richard Douglas Wilson Director 1999 Nil
Neil Murray-Lyon Director 1999 Nil
The Company does not pay to its directors any compensation for
each director serving on the Company's board of directors.
<PAGE 14>
Item 10. Security Ownership of Management and Certain Security
Holders
The following table sets forth information as of the date hereof,
based on information obtained from the persons named below, with
respect to the beneficial ownership of the Common Stock by (i)
each person known by the Company to own beneficially 5% or more
of the Common Stock, (ii) each director and officer and (iii) all
directors and officers as a group:
Amount of
Name and Address Beneficial Percent
Title of Class of Beneficial Owner Ownership of Class
- -------------- ------------------- ---------- --------
Common Stock Peter William Bell 1,000,000 16.53%
Common Stock Ross W.J. Bailey 100,000 1.65%
Common Stock Richard Douglas Wilson 100,000 1.65%
Common Stock Neil Murray-Lyon 225,000 3.72%
Common Stock Directors and Officers 1,425,000 23.55%
As a Group
Item 11. Interest of Management and Others in Certain
Transactions
None of the directors or officers of the Company, nor any
proposed nominee for election as a director of the Company, nor
any person who beneficially owns, directly or indirectly, shares
carrying more than 10% of the voting rights attached to all
outstanding shares of the Company, nor any promoter of the
Company, nor any relative or spouse of any of the foregoing
persons has any material interest, direct or indirect, in any
transaction since the date of the Company's incorporation or in
any presently proposed transaction which, in either case, has or
will materially affect the Company.
Item 12. Securities Being Offered
Common Stock
The Company has authorized 25,000,000 common shares par value
$0.001 of Common Stock, of which 6,050,000 are currently
outstanding.
Holders of Common Stock have the right to cast one vote for each
share held of record on all matters submitted to a vote of
holders of Common Stock, including the election of directors.
There is no right to cumulate votes for the election of
directors. Stockholders holding a majority of the voting power
of the capital stock issued and outstanding and entitled to vote,
represented in person or by proxy, are necessary to constitute a
quorum at any meeting of the Company's stockholders, and the
<PAGE 15>
vote by the holders of a majority of such outstanding shares is
required to effect certain fundamental corporate changes such as
liquidation, merger or amendment of the Company's Certificate of
Incorporation.
Holders of Common Stock are entitled to receive dividends pro
rata based on the number of shares held, when, as and if declared
by the Board of Directors, from funds legally available therefor,
subject to the rights of holders of any outstanding preferred
stock. In the event of the liquidation, dissolution or winding up
of the affairs of the Company, all assets and funds of the
Company remaining after the payment of all debts and other
liabilities, subject to the rights of the holders of any
outstanding preferred stock, shall be distributed, pro rata,
among the holders of the Common Stock. Holders of Common Stock
are not entitled to pre-emptive or subscription or conversion
rights, and there are no redemption or sinking fund provisions
applicable to the Common Stock. All outstanding shares of Common
Stock are, and the shares of Common Stock offered hereby will be
when issued, fully paid and non-assessable.
Warrants
The Company does not have any warrants to purchase securities of
the Company outstanding.
Options
The Company does not have any options to purchase securities of
the Company outstanding. The Company may in the future establish
an incentive stock option plan for its directors, officers,
employees and consultants.
Transfer Agent
Pacific Stock Transfer of Las Vegas, Nevada is the transfer agent
for the Shares.
<PAGE 16>
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Stockholder Matters
The Company anticipates applying for a listing on the OTC
Bulletin Board upon effectiveness of this registration statement.
Currently, there is no public market for the Company's stock and
there is no assurance that a public market will materialize.
As of the date of this registration statement, there were
forty-five (45) registered shareholders in the Company. There
are no dividend restrictions in the Company.
None of the holders of the Company's common shares or warrants or
options to purchase common shares have any right to require the
Company to register its common shares pursuant to the Securities
Act of 1933.
Item 2. Legal Proceedings
There are no legal proceedings pending or threatened against the
Corporation.
Item 3. Changes in and Disagreements with Accountants
The Company has had no changes in or disagreements with its
accountants since its inception in December, 1998.
Item 4. Recent Sales of Unregistered Securities
The Company completed an offering of 1,000,000 common shares at a
price of $0.01 per share on December 29, 1998 pursuant to Rule
504 of Regulation D of the Act, and Section 46(j) of the
Securities Act of British Columbia.
The Company completed an offering of 5,000,000 common shares at a
price of $0.01 per share on January 19, 1999. The offering was
completed pursuant to Rule 504 of Regulation D of the Act, and
Section 46(j) of the Securities Act of British Columbia, Section
66(a) of the Securities Act of Alberta, Sections 35(2) and
73(1)(9) of the Securities Act of Ontario and Section 3 of the
Securities Act of Quebec.
The Company completed an offering of 50,000 common shares at a
price of $0.10 per share on January 25, 1999. The offering was
completed pursuant to Rule 504 of Regulation D of the Act, and
Section 46(j) of the Securities Act of British Columbia, Section
66(a) of the Securities Act of Alberta, Sections 35(2) and
73(1)(9) of the Securities Act of Ontario and Section 3 of the
Securities Act of Quebec.
<PAGE 17>
Item 5. Indemnification of Directors and Officers
The officers and directors of the Company are indemnified as
provided under the Nevada Revised Statutes (the "NRS") and the
Bylaws of the Company.
Under the NRS, director immunity from liability to a corporation
or its shareholders for monetary liabilities applies
automatically unless it is specifically limited by a
corporation's articles of incorporation (which is not the case
with the Company's Articles of Incorporation). Excepted from that
immunity are: (i) a willful failure to deal fairly with the
corporation or its shareholders in connection with a matter in
which the director has a material conflict of interest; (ii) a
violation of criminal law (unless the director had reasonable
cause to believe that his or her conduct was lawful or no
reasonable cause to believe that his or her conduct was
unlawful); (iii) a transaction from which the director derived an
improper personal profit; and (iv) willful misconduct.
The By-laws of the Company provide that the Company will
indemnify its directors and officers to the fullest extent not
prohibited by the Nevada General Corporation Law; provided,
however, that the Company may modify the extent of such
indemnification by individual contracts with its directors and
officers; and, provided, further, that the Company shall not be
required to indemnify any director or officer in connection with
any proceeding (or part thereof) initiated by such person unless
(i) such indemnification is expressly required to be made by law,
(ii) the proceeding was authorized by the Board of Directors of
the corporation, (iii) such indemnification is provided by the
Company, in its sole discretion, pursuant to the powers vested
in the corporation under the Nevada General Corporation Law or
(iv) such indemnification is required to be made pursuant to the
By-laws.
The By-laws of the Company provide that the Company will advance
to any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director
or officer, of the corporation, or is or was serving at the
request of the corporation as a director or executive officer of
another corporation, partnership, joint venture, trust or other
enterprise, prior to the final disposition of the proceeding,
promptly following request therefor, all expenses incurred by any
director or officer in connection with such proceeding upon
receipt of an undertaking by or on behalf of such person to repay
said amounts if it should be determined ultimately that such
person is not entitled to be indemnified under the By-laws of the
Company or otherwise.
The By-laws of the Company provide that no advance shall be made
by the Company to an officer of the Company (except by reason of
the fact that such officer is or was a director of the Company in
which event this paragraph shall not apply) in any action, suit
or proceeding, whether civil, criminal, administrative or
investigative, if a determination is reasonably and promptly made
(i) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the proceeding,
or (ii) if such quorum is not obtainable, or, even if obtainable,
a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, that the facts known to the
decision-making party at the time such determination is made
demonstrate clearly and convincingly that such person acted in
bad faith or in a manner that such person did not believe to be
in or not opposed to the best interests of the Company.
<PAGE 18>
PART F/S
FINANCIAL STATEMENTS
The Company's audited Financial Statements, as described below,
are attached hereto.
1. Audited financial statements for the period ending January 31,
1999, including:
(a) Balance Sheet;
(b) Statement of Loss and Deficit;
(c) Statement of Stockholders' Equity;
(d) Statement of Cash Flows;
(e) Notes to Financial Statements.
2. Consent of Independent Accountant to use of financial
statements.
PART III
INDEX TO EXHIBITS
Exhibit 1: Articles of Incorporation
Exhibit 2: By-Laws of the Company
Exhibit 3: Miranda Property Option Agreement
Exhibit 4: Miranda Property Option Agreement with McIntosh
Exhibit 5: Option Facilities and Service Contract
Exhibit 6: Geological Report on the Miranda Property
Exhibit 7: Consent of Geological Consultant to use of Report
<PAGE 19>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized.
EXPLORE TECHNOLOGIES, INC.
Date: February ____, 1999
By:/S/ Peter Bell
PETER BELL, Director, President
Chief Executive Officer
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
JANUARY 31, 1999
(Stated in U.S. Dollars)
<PAGE 2>
Morgan & Company
Chartered Accountants
PO Box 10007, Pacific Centre
Suite 1730 - 700 West Georgia Street
Vancouver, B.C. V7Y 1A1
Telephone (604) 687-5841
Fax (604) 687-0075
AUDITORS' REPORT
To the Directors
Explore Technologies, Inc.
We have audited the balance sheet of Explore Technologies, Inc.(an exploration
stage company) as at January 31, 1999 and the statements of loss and deficit
accumulated during the development stage, cash flows and stockholders' equity
for the period then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with United States and Canadian generally
accepted auditing standards. Those standards require that we plan and perform
an audit to obtain reasonable assurance whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at January 31, 1999 and the
results of its operations and the cash flows for the period then ended in
accordance with United States generally accepted accounting principles.
Vancouver, B.C. /S/ Morgan & Company
February 4, 1999 Chartered Accountants
<PAGE 3>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
BALANCE SHEET
JANUARY 31, 1999
(Stated in U.S. Dollars)
- ----------------------------------------------------------------
ASSETS
Current
Cash $ 60,170
Mineral property (Note 3) 1,000
--------
$ 61,170
- ----------------------------------------------------------------
LIABILITIES
Current
Accounts payable $ 3,571
--------
SHAREHOLDERS' EQUITY
Share Capital
Authorized:
25,000,000 Common shares, par value
$0.001 per share
Issued and outstanding:
6,050,000 Common shares 6,050
Additional paid in capital 58,950
Deficit Accumulated During The Exploration
Stage (7,401)
--------
57,599
$61,170
Approved by the Directors:
/s/Peter Bell /s/Rick Wilson
<PAGE 4>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
STATEMENT OF LOSS AND DEFICIT
(Stated in U.S. Dollars)
- ------------------------------------------------------------------------------
Period From Date
Of Organization Inception
December 18, 1998 December 18, 1998
To January 31, 1999 To January 31, 1999
- ------------------------------------------------------------------------------
Expenses
Bank charges $ 14 $ 14
Office and sundry 154 154
Office facilities and services 750 750
Professional fees 6,483 6,483
------- -------
Net Loss For The Period 7,401 $ 7,401
-------
Deficit Accumulated During
The Exploration Stage,
Beginning Of Period -
-------
Deficit Accumulated During
The Exploration Stage,
End Of Period $ 7,401
--------
Net Loss Per Share $0.01
--------
Weighted Average Number
of Shares Outstanding 2,126,136
<PAGE 5>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
(Stated in U.S. Dollars)
- ------------------------------------------------------------------------------
Period From Date
Of Organization Inception
December 18, 1998 December 18, 1998
To January 31, 1999 To January 31, 1999
- ------------------------------------------------------------------------------
Cash Flow From Operating Activities
Net loss for the period $ (7,401) $ (7,401)
Adjustments To Reconcile Net Loss
To Net Cash Used By Operating Activities
Change in accounts payable 3,571 3,571
---------------------------------
(3,830) (3,830)
---------------------------------
Cash Flow From Investing Activities
Mineral property (1,000) (1,000)
---------------------------------
Cash Flow From Financing Activities
Share capital issued 65,000 65,000
---------------------------------
Increase In Cash 60,170 60,170
Cash, Beginning Of Period - -
Cash, End Of Period $ 60,170 $ 60,170
<PAGE 6>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS'EQUITY
January 31, 1999
(Stated in U.S. Dollars)
Common Stock
--------------------------------
Additional
Shares Amount Paid-in Capital Deficit Total
------------------------------------------------------
Shares issued for
cash @ $0.01 6,000,000 $6,000 $54,000 $ - $60,000
Shares issued for
cash @ $0.10 50,000 50 4,950 - 5,000
Net loss for the
period - - - (7,401) (7,401)
------------------------------------------------------
Balance, January
31, 1999 6,050,000 $6,050 $58,950 $ (7,401) $57,599
<PAGE 7>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1999
(Stated in U.S. Dollars)
1. NATURE OF OPERATIONS
a) Organization
The Company was incorporated in the State of Nevada, U.S.A. on December 18,
1998.
b) Exploration Stage Activities
The Company is in the process of exploring its mineral property and has not
yet determined whether the property contains ore reserves that are
economically recoverable.
The recoverability of amounts shown as mineral property and related deferred
exploration expenditures is dependent upon the discovery of economically
recoverable reserves, confirmation of the Company's interest in the underlying
mineral claims and the ability of the Company to obtain profitable production
or proceeds from the disposition thereof.
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States. Because a
precise determination of many assets and liabilities is dependent upon future
events, the preparation of financial statements for a period necessarily
involves the use of estimates which have been made using careful judgement.
The financial statements have, in management's opinion, been properly prepared
within reasonable limits of materiality and within the framework of the
significant accounting policies summarized below:
a) Mineral Property and Related Deferred Exploration
Expenditures
The Company defers all direct exploration expenditures on mineral properties
in which it has a continuing interest to be amortized over the recoverable
reserves when a property reaches commercial production. On abandonment of any
property, applicable accumulated deferred exploration expenditures will be
written off. To date none of the Company's properties have reached commercial
production.
At least annually, the net deferred cost of each mineral property is compared
to management's estimation of the net realizable value, and a write-down is
recorded if the net realizable value is less than the cumulative net deferred
costs.
<PAGE 8>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1999
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
a) Income Taxes
The Company has adopted Statement of Financial Accounting Standards No. 109 -
"Accounting for Income Taxes" (SFAS 109). This standard requires the use of
an asset and liability approach for financial accounting and reporting on
income taxes. If it is more likely than not that some portion or all of a
deferred tax asset will not be realized, a valuation allowance is recognized.
b) Financial Instruments
The Company's financial instruments consist of cash and accounts payable.
Unless otherwise noted, it is management's opinion that this Company is not
exposed to significant interest or credit risks arising from these financial
instruments. The fair value of these financial instruments approximate their
carrying values, unless otherwise noted.
c) Net Loss Per Share
Net loss per share is based on the weighted average number of common shares
outstanding during the period plus common share equivalents, such as options,
warrants and certain convertible securities. This method requires primary
earnings per share to be computed as if the common share equivalents were
exercised at the beginning of the period or at the date of issue and as
if the funds obtained thereby were used to purchase common shares of the
Company at its average market value during the period.
3. MINERAL PROPERTY
The Company has entered into an option agreement to acquire a 50% interest,
subject to a 2.5% net smelter royalty, in the Sand Springs, Nevada property
for the following consideration:
- - cash payment of U.S. $1,000;
- - exploration expenditures totalling U.S. $150,000 by December 31, 2001, U.S.
$10,000 of which must be expended by December 31, 1999.
Consideration paid to date $ 1,000
<PAGE 9>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1999
(Stated in U.S. Dollars)
4. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information
using year 2000 dates is processed. In addition, similar problems may arise
in some systems which use certain dates in 1999 to represent something other
than a date. The effects of the Year 2000 Issue may be experienced before,
on, or after January 1, 2000, and, if not addressed, the impact on operations
and financial reporting may range from minor errors to significant systems
failure which could affect an entity's ability to conduct normal business
operations. It is not possible to be certain that all aspects of the Year 2000
Issue affecting the entity, including those related to the efforts of
customers, suppliers, or other third parties, will be fully resolved.
Morgan & Company
Chartered Accountants
PO Box 10007, Pacific Centre
Suite 1730 - 700 West Georgia Street
Vancouver, B.C. V7Y 1A1
Telephone (604) 687-5841
Fax (604) 687-0075
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion of our audit report dated February 4, 1999,
on the financial statements of Explore Technologies Inc. for the period ended
January 31, 1999 in the Company's Form 10 - SB. We also consent to the
application of such report to the financial information in the Form 10 - SB,
when such financial information is read in conjunction with the financial
statements referred to in our report.
Vancouver, Canada /S/ Morgan & Company
February , 1999 Chartered Accountants
FILED Articles of Incorporation
In the office of the (PURSUANT TO NRS 78)
Secretary of State of the STATE OF NEVADA
STATE OF NEVADA Secretary of State
DEC 17 1998
C 29506-98
(For filing office use) (For filing office use)
- -------------------------------------------------------------------
- -------------------------------------------------------------------
IMPORTANT: Read instructions on reverse side before completing
this form.
TYPE OR PRINT (BLACK INK ONLY)
1. NAME OF CORPORATION: Explore Technologies, Inc.
2. RESIDENT AGENT: (designated resident agent and his STREET
ADDRESS in Nevada where process may be served)
Name of Resident Agent: Michael A. Cane
Street Address: 101 Convention Center Dr.
Suite 1200
Las Vegas, NV 89109
3. SHARES: (number of shares the corporation is authorized to
issue)
Number of shares with par value: 25 Million Par value: $.001
No. without par value:
4. GOVERNING BOARD: shall be styled as (check one): X Directors
Trustees
The FIRST BOARD OF DIRECTORS shall consist of 1 member(s) and
the names and addresses are as follows:
Michael A. Cane 101 Convention Center Dr.
Suite #1200
Las Vegas, NV 89109
5. PURPOSE:(optional): The purpose of the corporation shall be:
6. OTHER MATTERS: This form includes the minimal statutory
requirements to incorporate under NRS 78. You may attach
additional information pursuant to NRS 78.037 or any other
information you deem appropriate. If any of the additional
information is contradictory to this form it cannot be filed
and will be returned to you for correction. Number of pages
attached 0 .
7. SIGNATURES OF INCORPORATORS: The names and addresses of each
of the incorporators signing the articles.
Michael A. Cane
P.O. Box 12927, Las Vegas, NV 89112
/S/ Michael A. Cane
Signature
State of Nevada, County of Clark
This instrument was acknowledged before me
on December 17, 1998 by
Michael A. Cane
as incorporator of
Explore Technologies, Inc.
/S/Notary Public
(affix notary stamp or seal)
8. CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT:
I, Michael A. Cane hereby accept appointment as Resident
Agent for the above named corporation.
/S/ Michael A. Cane 12-17-98
Signature of Resident Agent Date
BYLAWS
OF
EXPLORE TECHNOLOGIES, INC.
(A NEVADA CORPORATION)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
corporation in the State of Nevada shall be in the City of Las
Vegas, State of Nevada.
Section 2. Other Offices. The corporation shall also have
and maintain an office or principal place of business at such
place as may be fixed by the Board of Directors, and may also have
offices at such other places, both within and without the State of
Nevada as the Board of Directors may from time to time determine
or the business of the corporation may require.
ARTICLE II
CORPORATE SEAL
Section 3. Corporate Seal. The corporate seal shall consist
of a die bearing the name of the corporation and the inscription,
"Corporate Seal-Nevada." Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or
otherwise.
ARTICLE III
STOCKHOLDERS' MEETINGS
Section 4. Place of Meetings. Meetings of the stockholders
of the corporation shall be held at such place, either within or
without the State of Nevada, as may be designated from time to
time by the Board of Directors, or, if not so designated, then at
the office of the corporation required to be maintained pursuant
to Section 2 hereof.
Section 5. Annual Meeting.
(a) The annual meeting of the stockholders of the
corporation, for the purpose of election of directors and for such
other business as may lawfully come before it, shall be held on
such date and at such time as may be designated from time to time
by the Board of Directors.
(b) At an annual meeting of the stockholders, only such
business shall be conducted as shall have been properly brought
before the meeting. To be properly brought before an annual
meeting, business must be: (A) specified in the notice of meeting
(or any supplement thereto) given by or at the direction of the
Board of Directors,(B)otherwise properly brought before the
meeting
<PAGE 2>
by or at the direction of the Board of Directors, or (C)
otherwise properly brought before the meeting by a stockholder.
For business to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof
in writing to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received
at the principal executive offices of the corporation not later
than the close of business on the sixtieth (60th) day nor earlier
than the close of business on the ninetieth (90th) day prior to
the first anniversary of the preceding year's annual meeting;
provided, however, that in the event that no annual meeting was
held in the previous year or the date of the annual meeting has
been changed by more than thirty (30) days from the date
contemplated at the time of the previous year's proxy statement,
notice by the stockholder to be timely must be so received not
earlier than the close of business on the ninetieth (90th) day
prior to such annual meeting and not later than the close of
business on the later of the sixtieth (60th) day prior to such
annual meeting or, in the event public announcement of the date of
such annual meeting is first made by the corporation fewer than
seventy (70) days prior to the date of such annual meeting, the
close of business on the tenth (10th) day following the day on
which public announcement of the date of such meeting is first
made by the corporation. A stockholder's notice to the Secretary
shall set forth as to each matter the stockholder proposes to
bring before the annual meeting: (i) a brief description of the
business desired to be brought before the annual meeting and the
reasons for conducting such business at the annual meeting, (ii)
the name and address, as they appear on the corporation's books,
of the stockholder proposing such business, (iii) the class and
number of shares of the corporation which are beneficially owned
by the stockholder, (iv) any material interest of the stockholder
in such business and (v) any other information that is required to
be provided by the stockholder pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended (the "1934 Act"),
in his capacity as a proponent to a stockholder proposal.
Notwithstanding the foregoing, in order to include information
with respect to a stockholder proposal in the proxy statement and
form of proxy for a stockholder's meeting, stockholders must
provide notice as required by the regulations promulgated under
the 1934 Act. Notwithstanding anything in these Bylaws to the
contrary, no business shall be conducted at any annual meeting
except in accordance with the procedures set forth in this
paragraph (b). The chairman of the annual meeting shall, if the
facts warrant, determine and declare at the meeting that business
was not properly brought before the meeting and in accordance with
the provisions of this paragraph (b), and, if he should so
determine, he shall so declare at the meeting that any such
business not properly brought before the meeting shall not be
transacted.
(c) Only persons who are confirmed in accordance with the
procedures set forth in this paragraph (c) shall be eligible for
election as directors. Nominations of persons for election to the
Board of Directors of the corporation may be made at a meeting of
stockholders by or at the direction of the Board of Directors or
by any stockholder of the corporation entitled to vote in the
election of directors at the meeting who complies with the notice
procedures set forth in this paragraph (c). Such nominations,
other than those made by or at the direction of the Board of
Directors, shall be made pursuant to timely notice in writing to
the Secretary of the corporation in accordance with the provisions
of paragraph (b) of this Section 5. Such stockholder's notice
shall set forth (i) as to each person, if any, whom the
stockholder proposes to nominate for election or re-election as a
director: (A) the name, age, business address and residence
address of such person, (B) the principal occupation or employment
of such person, (c) the class and number of shares of the
corporation which are beneficially owned by such person, (D) a
description of all arrangements or
<PAGE 3>
understandings between the stockholder and each nominee and any
other person or persons (naming such person or persons) pursuant
to which the nominations are to be made by the stockholder, and
(E) any other information relating to such person that is required
to be disclosed in solicitations of proxies for election of
directors, or is otherwise required, in each case pursuant to
Regulation 14A under the 1934 Act (including without limitation
such person's written consent to being named in the proxy
statement, if any, as a nominee and to serving as a director if
elected); and (ii) as to such stockholder giving notice, the
information required to be provided pursuant to paragraph (b) of
this Section 5. At the request of the Board of Directors, any
person nominated by a stockholder for election as a director shall
furnish to the Secretary of the corporation that information
required to be set forth in the stockholder's notice of nomination
which pertains to the nominee. No person shall be eligible for
election as a director of the corporation unless nominated in
accordance with the procedures set forth in this paragraph (c).
The chairman of the meeting shall, if the facts warrant, determine
and declare at the meeting that a nomination was not made in
accordance with the procedures prescribed by these Bylaws, and if
he should so determine, he shall so declare at the meeting, and
the defective nomination shall be disregarded.
(d) For purposes of this Section 5, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones
News Service, Associated Press or comparable national news service
or in a document publicly filed by the corporation with the
Securities and Exchange Commission pursuant to Section 13, 14 or
15(d) of the Exchange Act.
Section 6. Special Meetings.
(a) Special meetings of the stockholders of the corporation
may be called, for any purpose or purposes, by (i) the Chairman of
the Board of Directors, (ii) the Chief Executive Officer, or (iii)
the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directors (whether or
not there exist any vacancies in previously authorized
directorships at the time any such resolution is presented to the
Board of Directors for adoption), and shall be held at such place,
on such date, and at such time as the Board of Directors, shall
determine.
(b) If a special meeting is called by any person or persons
other than the Board of Directors, the request shall be in
writing, specifying the general nature of the business proposed to
be transacted, and shall be delivered personally or sent by
registered mail or by telegraphic or other facsimile transmission
to the Chairman of the Board of Directors, the Chief Executive
Officer, or the Secretary of the corporation. No business may be
transacted at such special meeting otherwise than specified in
such notice. The Board of Directors shall determine the time and
place of such special meeting, which shall be held not less than
thirty-five (35) nor more than one hundred twenty (120) days after
the date of the receipt of the request. Upon determination of the
time and place of the meeting, the officer receiving the request
shall cause notice to be given to the stockholders entitled to
vote, in accordance with the provisions of Section 7 of these
Bylaws. If the notice is not given within sixty (60) days after
the receipt of the request, the person or persons requesting the
meeting may set the time and place of the meeting and give the
notice. Nothing contained in this paragraph (b) shall be
construed as limiting, fixing, or affecting the time when a
meeting of stockholders called by action of the Board of Directors
may be held.
<PAGE 4>
Section 7. Notice of Meetings. Except as otherwise provided
by law or the Articles of Incorporation, written notice of each
meeting of stockholders shall be given not less than ten (10) nor
more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting, such notice to
specify the place, date and hour and purpose or purposes of the
meeting. Notice of the time, place and purpose of any meeting of
stockholders may be waived in writing, signed by the person
entitled to notice thereof, either before or after such meeting,
and will be waived by any stockholder by his attendance thereat in
person or by proxy, except when the stockholder attends a meeting
for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is
not lawfully called or convened. Any stockholder so waiving
notice of such meeting shall be bound by the proceedings of any
such meeting in all respects as if due notice thereof had been
given.
Section 8. Quorum. At all meetings of stockholders, except
where otherwise provided by statute or by the Articles of
Incorporation, or by these Bylaws, the presence, in person or by
proxy duly authorized, of the holder or holders of not less than
one percent (1%) of the outstanding shares of stock entitled to
vote shall constitute a quorum for the transaction of business.
In the absence of a quorum, any meeting of stockholders may be
adjourned, from time to time, either by the chairman of the
meeting or by vote of the holders of a majority of the shares
represented thereat, but no other business shall be transacted at
such meeting. The stockholders present at a duly called or
convened meeting, at which a quorum is present, may continue to
transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
Except as otherwise provided by law, the Articles of Incorporation
or these Bylaws, all action taken by the holders of a majority of
the votes cast, excluding abstentions, at any meeting at which a
quorum is present shall be valid and binding upon the corporation;
provided, however, that directors shall be elected by a plurality
of the votes of the shares present in person or represented by
proxy at the meeting and entitled to vote on the election of
directors. Where a separate vote by a class or classes or series
is required, except where otherwise provided by the statute or by
the Articles of Incorporation or these Bylaws, a majority of the
outstanding shares of such class or classes or series, present in
person or represented by proxy, shall constitute a quorum entitled
to take action with respect to that vote on that matter and,
except where otherwise provided by the statute or by the Articles
of Incorporation or these Bylaws, the affirmative vote of the
majority (plurality, in the case of the election of directors) of
the votes cast, including abstentions, by the holders of shares of
such class or classes or series shall be the act of such class or
classes or series.
Section 9. Adjournment and Notice of Adjourned Meetings.
Any meeting of stockholders, whether annual or special, may be
adjourned from time to time either by the chairman of the meeting
or by the vote of a majority of the shares casting votes,
excluding abstentions. When a meeting is adjourned to another
time or place, notice need not be given of the adjourned meeting
if the time and place thereof are announced at the meeting at
which the adjournment is taken. At the adjourned meeting, the
corporation may transact any business which might have been
transacted at the original meeting. If the adjournment is for
more than thirty (30) days or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the
adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
<PAGE 5>
Section 10. Voting Rights. For the purpose of
determining those stockholders entitled to vote at any meeting of
the stockholders, except as otherwise provided by law, only
persons in whose names shares stand on the stock records of the
corporation on the record date, as provided in Section 12 of these
Bylaws, shall be entitled to vote at any meeting of stockholders.
Every person entitled to vote shall have the right to do so either
in person or by an agent or agents authorized by a proxy granted
in accordance with Nevada law. An agent so appointed need not be
a stockholder. No proxy shall be voted after three (3) years from
its date of creation unless the proxy provides for a longer
period.
Section 11. Joint Owners of Stock. If shares or other
securities having voting power stand of record in the names of two
(2) or more persons, whether fiduciaries, members of a
partnership, joint tenants, tenants in common, tenants by the
entirety, or otherwise, or if two (2) or more persons have the
same fiduciary relationship respecting the same shares, unless the
Secretary is given written notice to the contrary and is furnished
with a copy of the instrument or order appointing them or creating
the relationship wherein it is so provided, their acts with
respect to voting shall have the following effect: (a) if only one
(1) votes, his act binds all; (b) if more than one (1) votes, the
act of the majority so voting binds all; (c) if more than one (1)
votes, but the vote is evenly split on any particular matter, each
faction may vote the securities in question proportionally, or may
apply to the Nevada Court of Chancery for relief as provided in
the General Corporation Law of Nevada, Section 217(b). If the
instrument filed with the Secretary shows that any such tenancy is
held in unequal interests, a majority or even-split for the
purpose of subsection (c) shall be a majority or even-split in
interest.
Section 12. List of Stockholders. The Secretary shall
prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote
at said meeting, arranged in alphabetical order, showing the
address of each stockholder and the number of shares registered in
the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not specified, at
the place where the meeting is to be held. The list shall be
produced and kept at the time and place of meeting during the
whole time thereof and may be inspected by any stockholder who is
present.
Section 13. Action Without Meeting. No action shall be
taken by the stockholders except at an annual or special meeting
of stockholders called in accordance with these Bylaws, or by the
written consent of all stockholders.
Section 14. Organization.
(a) At every meeting of stockholders, the Chairman of the
Board of Directors, or, if a Chairman has not been appointed or is
absent, the President, or, if the President is absent, a chairman
of the meeting chosen by a majority in interest of the
stockholders entitled to vote, present in person or by proxy,
shall act as chairman. The Secretary, or, in his absence, an
Assistant Secretary directed to do so by the President, shall act
as secretary of the meeting.
<PAGE 6>
(b) The Board of Directors of the corporation shall be
entitled to make such rules or regulations for the conduct of
meetings of stockholders as it shall deem necessary, appropriate
or convenient. Subject to such rules and regulations of the Board
of Directors, if any, the chairman of the meeting shall have the
right and authority to prescribe such rules, regulations and
procedures and to do all such acts as, in the judgment of such
chairman, are necessary, appropriate or convenient for the proper
conduct of the meeting, including, without limitation,
establishing an agenda or order of business for the meeting, rules
and procedures for maintaining order at the meeting and the safety
of those present, limitations on participation in such meeting to
stockholders of record of the corporation and their duly
authorized and constituted proxies and such other persons as the
chairman shall permit, restrictions on entry to the meeting after
the time fixed for the commencement thereof, limitations on the
time allotted to questions or comments by participants and
regulation of the opening and closing of the polls for balloting
on matters which are to be voted on by ballot. Unless and to the
extent determined by the Board of Directors or the chairman of the
meeting, meetings of stockholders shall not be required to be held
in accordance with rules of parliamentary procedure.
ARTICLE IV
DIRECTORS
Section 15. Number and Qualification. The authorized
number of directors of the corporation shall be not less than one
(1) nor more than twelve (12) as fixed from time to time by
resolution of the Board of Directors; provided that no decrease in
the number of directors shall shorten the term of any incumbent
directors. Directors need not be stockholders unless so required
by the Articles of Incorporation. If for any cause, the directors
shall not have been elected at an annual meeting, they may be
elected as soon thereafter as convenient at a special meeting of
the stockholders called for that purpose in the manner provided in
these Bylaws.
Section 16. Powers. The powers of the corporation shall
be exercised, its business conducted and its property controlled
by the Board of Directors, except as may be otherwise provided by
statute or by the Articles of Incorporation.
Section 17. Election and Term of Office of Directors.
Members of the Board of Directors shall hold office for the terms
specified in the Articles of Incorporation, as it may be amended
from time to time, and until their successors have been elected as
provided in the Articles of Incorporation.
Section 18. Vacancies. Unless otherwise provided in the
Articles of Incorporation, any vacancies on the Board of Directors
resulting from death, resignation, disqualification, removal or
other causes and any newly created directorships resulting from
any increase in the number of directors, shall unless the Board of
Directors determines by resolution that any such vacancies or
newly created directorships shall be filled by stockholder vote,
be filled only by the affirmative vote of a majority of the
directors then in office, even though less than a quorum of the
Board of Directors. Any director elected in accordance with the
preceding sentence shall hold office for the remainder of the full
term of the director for which the vacancy was created or occurred
and until such director's successor shall have been elected and
qualified. A vacancy in the Board of Directors
<PAGE 7>
shall be deemed to exist under this Bylaw in the case of the
death, removal or resignation of any director.
Section 19. Resignation. Any director may resign at any
time by delivering his written resignation to the Secretary, such
resignation to specify whether it will be effective at a
particular time, upon receipt by the Secretary or at the pleasure
of the Board of Directors. If no such specification is made, it
shall be deemed effective at the pleasure of the Board of
Directors. When one or more directors shall resign from the Board
of Directors, effective at a future date, a majority of the
directors then in office, including those who have so resigned,
shall have power to fill such vacancy or vacancies, the vote
thereon to take effect when such resignation or resignations shall
become effective, and each director so chosen shall hold office
for the unexpired portion of the term of the director whose place
shall be vacated and until his successor shall have been duly
elected and qualified.
Section 20. Removal. Subject to the Articles of
Incorporation, any director may be removed by:
(a) the affirmative vote of the holders of a majority of the
outstanding shares of the Corporation then entitled to vote, with
or without cause; or
(b) the affirmative and unanimous vote of a majority of the
directors of the Corporation, with the exception of the vote of
the directors to be removed, with or without cause.
Section 21. Meetings.
(a) Annual Meetings. The annual meeting of the Board of
Directors shall be held immediately after the annual meeting of
stockholders and at the place where such meeting is held. No
notice of an annual meeting of the Board of Directors shall be
necessary and such meeting shall be held for the purpose of
electing officers and transacting such other business as may
lawfully come before it.
(b) Regular Meetings. Except as hereinafter otherwise
provided, regular meetings of the Board of Directors shall be held
in the office of the corporation required to be maintained
pursuant to Section 2 hereof. Unless otherwise restricted by the
Articles of Incorporation, regular meetings of the Board of
Directors may also be held at any place within or without the
state of Nevada which has been designated by resolution of the
Board of Directors or the written consent of all directors.
(c) Special Meetings. Unless otherwise restricted by the
Articles of Incorporation, special meetings of the Board of
Directors may be held at any time and place within or without the
State of Nevada whenever called by the Chairman of the Board, the
President or any two of the directors.
(d) Telephone Meetings. Any member of the Board of
Directors, or of any committee thereof, may participate in a
meeting by means of conference telephone or similar communications
<PAGE 8>
equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting by
such means shall constitute presence in person at such meeting.
(e) Notice of Meetings. Notice of the time and place of all
special meetings of the Board of Directors shall be orally or in
writing, by telephone, facsimile, telegraph or telex, during
normal business hours, at least twenty-four (24) hours before the
date and time of the meeting, or sent in writing to each director
by first class mail, charges prepaid, at least three (3) days
before the date of the meeting. Notice of any meeting may be
waived in writing at any time before or after the meeting and will
be waived by any director by attendance thereat, except when the
director attends the meeting for the express purpose of objecting,
at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened.
(f) Waiver of Notice. The transaction of all business at
any meeting of the Board of Directors, or any committee thereof,
however called or noticed, or wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice,
if a quorum be present and if, either before or after the meeting,
each of the directors not present shall sign a written waiver of
notice. All such waivers shall be filed with the corporate
records or made a part of the minutes of the meeting.
Section 22. Quorum and Voting.
(a) Unless the Articles of Incorporation requires a greater
number and except with respect to indemnification questions
arising under Section 43 hereof, for which a quorum shall be one-
third of the exact number of directors fixed from time to time in
accordance with the Articles of Incorporation, a quorum of the
Board of Directors shall consist of a majority of the exact number
of directors fixed from time to time by the Board of Directors in
accordance with the Articles of Incorporation provided, however,
at any meeting whether a quorum be present or otherwise, a
majority of the directors present may adjourn from time to time
until the time fixed for the next regular meeting of the Board of
Directors, without notice other than by announcement at the
meeting.
(b) At each meeting of the Board of Directors at which a
quorum is present, all questions and business shall be determined
by the affirmative vote of a majority of the directors present,
unless a different vote be required by law, the Articles of
Incorporation or these Bylaws.
Section 23. Action Without Meeting. Unless otherwise
restricted by the Articles of Incorporation or these Bylaws, any
action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken
without a meeting, if all members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and
such writing or writings are filed with the minutes of proceedings
of the Board of Directors or committee.
Section 24. Fees and Compensation. Directors shall be
entitled to such compensation for their services as may be
approved by the Board of Directors, including, if so approved, by
resolution of the Board of Directors, a fixed sum and expenses of
attendance, if any, for attendance at each regular or special
meeting of the Board of Directors and at any meeting of a
committee of
<PAGE 9>
the Board of Directors. Nothing herein contained shall be
construed to preclude any director from serving the corporation in
any other capacity as an officer, agent, employee, or otherwise
and receiving compensation therefor.
Section 25. Committees.
(a) Executive Committee. The Board of Directors may by
resolution passed by a majority of the whole Board of Directors
appoint an Executive Committee to consist of one (1) or more
members of the Board of Directors. The Executive Committee, to
the extent permitted by law and provided in the resolution of the
Board of Directors shall have and may exercise all the powers and
authority of the Board of Directors in the management of the
business and affairs of the corporation, including without
limitation the power or authority to declare a dividend, to
authorize the issuance of stock and to adopt a certificate of
ownership and merger, and may authorize the seal of the
corporation to be affixed to all papers which may require it; but
no such committee shall have the power or authority in reference
to amending the Articles of Incorporation (except that a committee
may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board
of Directors fix the designations and any of the preferences or
rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation or the
conversion into, or the exchange of such shares for, shares of any
other class or classes or any other series of the same or any
other class or classes of stock of the corporation or fix the
number of shares of any series of stock or authorize the increase
or decrease of the shares of any series), adopting an agreement of
merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the
stockholders a dissolution of the corporation or a revocation of a
dissolution, or amending the bylaws of the corporation.
(b) Other Committees. The Board of Directors may, by
resolution passed by a majority of the whole Board of Directors,
from time to time appoint such other committees as may be
permitted by law. Such other committees appointed by the Board of
Directors shall consist of one (1) or more members of the Board of
Directors and shall have such powers and perform such duties as
may be prescribed by the resolution or resolutions creating such
committees, but in no event shall such committee have the powers
denied to the Executive Committee in these Bylaws.
(c) Term. Each member of a committee of the Board of
Directors shall serve a term on the committee coexistent with such
member's term on the Board of Directors. The Board of Directors,
subject to the provisions of subsections (a) or (b) of this Bylaw
may at any time increase or decrease the number of members of a
committee or terminate the existence of a committee. The
membership of a committee member shall terminate on the date of
his death or voluntary resignation from the committee or from the
Board of Directors. The Board of Directors may at any time for
any reason remove any individual committee member and the Board of
Directors may fill any committee vacancy created by death,
resignation, removal or increase in the number of members of the
committee. The Board of Directors may designate one or more
directors as alternate members of any committee, who may replace
any absent or disqualified member at any meeting of the committee,
and, in addition, in the absence or disqualification of any member
of a committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not
<PAGE 10>
he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the
place of any such absent or disqualified member.
(d) Meetings. Unless the Board of Directors shall otherwise
provide, regular meetings of the Executive Committee or any other
committee appointed pursuant to this Section 25 shall be held at
such times and places as are determined by the Board of Directors,
or by any such committee, and when notice thereof has been given
to each member of such committee, no further notice of such
regular meetings need be given thereafter. Special meetings of
any such committee may be held at any place which has been
determined from time to time by such committee, and may be called
by any director who is a member of such committee, upon written
notice to the members of such committee of the time and place of
such special meeting given in the manner provided for the giving
of written notice to members of the Board of Directors of the time
and place of special meetings of the Board of Directors. Notice
of any special meeting of any committee may be waived in writing
at any time before or after the meeting and will be waived by any
director by attendance thereat, except when the director attends
such special meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. A
majority of the authorized number of members of any such committee
shall constitute a quorum for the transaction of business, and the
act of a majority of those present at any meeting at which a
quorum is present shall be the act of such committee.
Section 26. Organization. At every meeting of the
directors, the Chairman of the Board of Directors, or, if a
Chairman has not been appointed or is absent, the President, or if
the President is absent, the most senior Vice President, or, in
the absence of any such officer, a chairman of the meeting chosen
by a majority of the directors present, shall preside over the
meeting. The Secretary, or in his absence, an Assistant
Secretary directed to do so by the President, shall act as
secretary of the meeting.
ARTICLE V
OFFICERS
Section 27. Officers Designated. The officers of the
corporation shall include, if and when designated by the Board of
Directors, the Chairman of the Board of Directors, the Chief
Executive Officer, the President, one or more Vice Presidents, the
Secretary, the Chief Financial Officer, the Treasurer, the
Controller, all of whom shall be elected at the annual
organizational meeting of the Board of Direction. The Board of
Directors may also appoint one or more Assistant Secretaries,
Assistant Treasurers, Assistant Controllers and such other
officers and agents with such powers and duties as it shall deem
necessary. The Board of Directors may assign such additional
titles to one or more of the officers as it shall deem
appropriate. Any one person may hold any number of offices of the
corporation at any one time unless specifically prohibited
therefrom by law. The salaries and other compensation of the
officers of the corporation shall be fixed by or in the manner
designated by the Board of Directors.
<PAGE 11>
Section 28. Tenure and Duties of Officers.
(a) General. All officers shall hold office at the pleasure
of the Board of Directors and until their successors shall have
been duly elected and qualified, unless sooner removed. Any
officer elected or appointed by the Board of Directors may be
removed at any time by the Board of Directors. If the office of
any officer becomes vacant for any reason, the vacancy may be
filled by the Board of Directors.
(b) Duties of Chairman of the Board of Directors. The
Chairman of the Board of Directors, when present, shall preside at
all meetings of the stockholders and the Board of Directors. The
Chairman of the Board of Directors shall perform other duties
commonly incident to his office and shall also perform such other
duties and have such other powers as the Board of Directors shall
designate from time to time. If there is no President, then the
Chairman of the Board of Directors shall also serve as the Chief
Executive Officer of the corporation and shall have the powers and
duties prescribed in paragraph (c) of this Section 28.
(c) Duties of President. The President shall preside at all
meetings of the stockholders and at all meetings of the Board of
Directors, unless the Chairman of the Board of Directors has been
appointed and is present. Unless some other officer has been
elected Chief Executive Officer of the corporation, the President
shall be the chief executive officer of the corporation and shall,
subject to the control of the Board of Directors, have general
supervision, direction and control of the business and officers of
the corporation. The President shall perform other duties
commonly incident to his office and shall also perform such other
duties and have such other powers as the Board of Directors shall
designate from time to time.
(d) Duties of Vice Presidents. The Vice Presidents may
assume and perform the duties of the President in the absence or
disability of the President or whenever the office of President is
vacant. The Vice Presidents shall perform other duties commonly
incident to their office and shall also perform such other duties
and have such other powers as the Board of Directors or the
President shall designate from time to time.
(e) Duties of Secretary. The Secretary shall attend all
meetings of the stockholders and of the Board of Directors and
shall record all acts and proceedings thereof in the minute book
of the corporation. The Secretary shall give notice in conformity
with these Bylaws of all meetings of the stockholders and of all
meetings of the Board of Directors and any committee thereof
requiring notice. The Secretary shall perform all other duties
given him in these Bylaws and other duties commonly incident to
his office and shall also perform such other duties and have such
other powers as the Board of Directors shall designate from time
to time. The President may direct any Assistant Secretary to
assume and perform the duties of the Secretary in the absence or
disability of the Secretary, and each Assistant Secretary shall
perform other duties commonly incident to his office and shall
also perform such other duties and have such other powers as the
Board of Directors or the President shall designate from time to
time.
<PAGE 12>
(f) Duties of Chief Financial Officer. The Chief Financial
Officer shall keep or cause to be kept the books of account of the
corporation in a thorough and proper manner and shall render
statements of the financial affairs of the corporation in such
form and as often as required by the Board of Directors or the
President. The Chief Financial Officer, subject to the order of
the Board of Directors, shall have the custody of all funds and
securities of the corporation. The Chief Financial Officer shall
perform other duties commonly incident to his office and shall
also perform such other duties and have such other powers as the
Board of Directors or the President shall designate from time to
time. The President may direct the Treasurer or any Assistant
Treasurer, or the Controller or any Assistant Controller to assume
and perform the duties of the Chief Financial Officer in the
absence or disability of the Chief Financial Officer, and each
Treasurer and Assistant Treasurer and each Controller and
Assistant Controller shall perform other duties commonly incident
to his office and shall also perform such other duties and have
such other powers as the Board of Directors or the President shall
designate from time to time.
Section 29. Delegation of Authority. The Board of
Directors may from time to time delegate the powers or duties of
any officer to any other officer or agent, notwithstanding any
provision hereof.
Section 30. Resignations. Any officer may resign at any
time by giving written notice to the Board of Directors or to the
President or to the Secretary. Any such resignation shall be
effective when received by the person or persons to whom such
notice is given, unless a later time is specified therein, in
which event the resignation shall become effective at such later
time. Unless otherwise specified in such notice, the acceptance
of any such resignation shall not be necessary to make it
effective. Any resignation shall be without prejudice to the
rights, if any, of the corporation under any contract with the
resigning officer.
Section 31. Removal. Any officer may be removed from
office at any time, either with or without cause, by the
affirmative vote of a majority of the directors in office at the
time, or by the unanimous written consent of the directors in
office at the time, or by any committee or superior officers upon
whom such power of removal may have been conferred by the Board of
Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
OF SECURITIES OWNED BY THE CORPORATION
Section 32. Execution of Corporate Instrument. The Board
of Directors may, in its discretion, determine the method and
designate the signatory officer or officers, or other person or
persons, to execute on behalf of the corporation any corporate
instrument or document, or to sign on behalf of the corporation
the corporate name without limitation, or to enter into contracts
on behalf of the corporation, except where otherwise provided by
law or these Bylaws, and such execution or signature shall be
binding upon the corporation.
Unless otherwise specifically determined by the Board of
Directors or otherwise required by law, promissory notes, deeds of
trust, mortgages and other evidences of indebtedness of the
<PAGE 13>
corporation, and other corporate instruments or documents
requiring the corporate seal, and certificates of shares of stock
owned by the corporation, shall be executed, signed or endorsed by
the Chairman of the Board of Directors, or the President or any
Vice President, and by the Secretary or Treasurer or any Assistant
Secretary or Assistant Treasurer. All other instruments and
documents requiting the corporate signature, but not requiring the
corporate seal, may be executed as aforesaid or in such other
manner as may be directed by the Board of Directors.
All checks and drafts drawn on banks or other depositaries on
funds to the credit of the corporation or in special accounts of
the corporation shall be signed by such person .or persons as the
Board of Directors shall authorize so to do.
Unless authorized or ratified by the Board of Directors or
within the agency power of an officer, no officer, agent or
employee shall have any power or authority to bind the corporation
by any contract or engagement or to pledge its credit or to render
it liable for any purpose or for any amount.
Section 33. Voting of Securities Owned by the
Corporation. All stock and other securities of other corporations
owned or held by the corporation for itself, or for other parties
in any capacity, shall be voted, and all proxies with respect
thereto shall be executed, by the person authorized so to do by
resolution of the Board of Directors, or, in the absence of such
authorization, by the Chairman of the Board of Directors, the
Chief Executive Officer, the President, or any Vice President.
ARTICLE VII
SHARES OF STOCK
Section 34. Form and Execution of Certificates.
Certificates for the shares of stock of the corporation shall be
in such form as is consistent with the Articles of Incorporation
and applicable law. Every holder of stock in the corporation
shall be entitled to have a certificate signed by or in the name
of the corporation by the Chairman of the Board of Directors, or
the President or any Vice President and by the Treasurer or
Assistant Treasurer or the Secretary or Assistant Secretary,
certifying the number of shares owned by him in the corporation.
Any or all of the signatures on the certificate may be facsimiles.
In case any officer, transfer agent, or registrar who has signed
or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued with the same
effect as if he were such officer, transfer agent, or registrar at
the date of issue. Each certificate shall state upon the face or
back thereof, in full or in summary, all of the powers,
designations, preferences, and rights, and the limitations or
restrictions of the shares authorized to be issued or shall,
except as otherwise required by law, set forth on the face or back
a statement that the corporation will furnish without charge to
each stockholder who so requests the powers, designations,
preferences and relative, participating, optional, or other
special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences
and/or rights. Within a reasonable time after the issuance or
transfer of uncertificated stock, the corporation shall send to
the registered owner thereof a written notice containing the
information required to be
<PAGE 14>
set forth or stated on certificates pursuant to this section or
otherwise required by law or with respect to this section a
statement that the corporation will furnish without charge to each
stockholder who so requests the powers, designations, preferences
and relative participating, optional or other special rights of
each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
Except as otherwise expressly provided by law, the rights and
obligations of the holders of certificates representing stock of
the same class and series shall be identical.
Section 35. Lost Certificates. A new certificate or
certificates shall be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have
been lost, stolen, or destroyed, upon the making of an affidavit
of that fact by the person claiming the certificate of stock to be
lost, stolen, or destroyed. The corporation may require, as a
condition precedent to the issuance of a new certificate or
certificates, the owner of such lost, stolen, or destroyed
certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require or to give
the corporation a surety bond in such form and amount as it may
direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been
lost, stolen, or destroyed.
Section 36. Transfers.
(a) Transfers of record of shares of stock of the
corporation shall be made only upon its books by the holders
thereof, in person or by attorney duly authorized, and upon the
surrender of a properly endorsed certificate or certificates for a
like number of shares.
(b) The corporation shall have power to enter into and
perform any agreement with any number of stockholders of any one
or more classes of stock of the corporation to restrict the
transfer of shares of stock of the corporation of any one or more
classes owned by such stockholders in any manner not prohibited by
the General Corporation Law of Nevada.
Section 37. Fixing Record Dates.
(a) In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board of Directors
may fix, in advance, a record date, which record date shall not
precede the date upon which the resolution fixing the record date
is adopted by the Board of Directors, and which record date shall
not be more than sixty (60) nor less than ten (10) days before the
date of such meeting. If no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be at
the close of business on the day next preceding the day on which
notice is given, or if notice is waived, at the close of business
on the day next preceding the day on which the meeting is held. A
determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
(b) In order that the corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders
entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose
<PAGE 15>
of any other lawful action, the Board of Directors may fix, in
advance, a record date, which record date shall not precede the
date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty (60) days prior
to such action. If no record date is filed, the record date for
determining stockholders for any such purpose shall be at the
close of business on the day on which the Board of Directors
adopts the resolution relating thereto.
Section 38. Registered Stockholders. The corporation shall
be entitled to recognize the exclusive right of a person
registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and shall not be bound to
recognize any equitable or other claim to or interest in such
share or shares on the part of any other person whether or not it
shall have express or other notice thereof, except as otherwise
provided by the laws of Nevada.
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
Section 39. Execution of Other Securities. All bonds,
debentures and other corporate securities of the corporation,
other than stock certificates (covered in Section 34), may be
signed by the Chairman of the Board of Directors, the President or
any Vice President, or such other person as may be authorized by
the Board of Directors, and the corporate seal impressed thereon
or a facsimile of such seal imprinted thereon and attested by the
signature of the Secretary or an Assistant Secretary, or the Chief
Financial Officer or Treasurer or an Assistant Treasurer;
provided, however, that where any such bond, debenture or other
corporate security shall be authenticated by the manual signature,
or where permissible facsimile signature, of a trustee under an
indenture pursuant to which such bond, debenture or other
corporate security shall be issued, the signatures of the persons
signing and attesting the corporate seal on such bond, debenture
or other corporate security may be the imprinted facsimile of the
signatures of such persons. Interest coupons appertaining to any
such bond, debenture or other corporate security, authenticated by
a trustee as aforesaid, shall be signed by the Treasurer or an
Assistant Treasurer of the corporation or such other person as may
be authorized by the Board of Directors, or bear imprinted thereon
the facsimile signature of such person. In case any officer who
shall have signed or attested any bond, debenture or other
corporate security, or whose facsimile signature shall appear
thereon or on any such interest coupon, shall have ceased to be
such officer before the bond, debenture or other corporate
security so signed or attested shall have been delivered, such
bond, debenture or other corporate security nevertheless may be
adopted by the corporation and issued and delivered as though the
person who signed the same or whose facsimile signature shall have
been used thereon had not ceased to be such officer of the
corporation.
<PAGE 16>
ARTICLE IX
DIVIDENDS
Section 40. Declaration of Dividends. Dividends upon the
capital stock of the corporation, subject to the provisions of the
Articles of Incorporation, if any, may be declared by the Board of
Directors pursuant to law at any regular or special meeting.
Dividends may be paid in cash, in property, or in shares of the
capital stock, subject to the provisions of the Articles of
Incorporation.
Section 41. Dividend Reserve. Before payment of any
dividend, there may be set aside out of any funds of the
corporation available for dividends such sum or sums as the Board
of Directors from time to time, in their absolute discretion,
think proper as a reserve or reserves to meet contingencies, or
for equalizing dividends, or for repairing or maintaining any
property of the corporation, or for such other purpose as the
Board of Directors shall think conducive to the interests of the
corporation, and the Board of Directors may modify or abolish any
such reserve in the manner in which it was created.
ARTICLE X
FISCAL YEAR
Section 42. Fiscal Year. The fiscal year of the corporation
shall be fixed by resolution of the Board of Directors.
ARTICLE XI
INDEMNIFICATION
Section 43. Indemnification of Directors, Executive
Officers, Other Officers, Employees and Other Agents.
(a) Directors Officers. The corporation shall indemnify its
directors and officers to the fullest extent not prohibited by the
Nevada General Corporation Law; provided, however, that the
corporation may modify the extent of such indemnification by
individual contracts with its directors and officers; and,
provided, further, that the corporation shall not be required to
indemnify any director or officer in connection with any
proceeding (or part thereof) initiated by such person unless (i)
such indemnification is expressly required to be made by law, (ii)
the proceeding was authorized by the Board of Directors of the
corporation, (iii) such indemnification is provided by the
corporation, in its sole discretion, pursuant to the powers vested
in the corporation under the Nevada General Corporation Law or
(iv) such indemnification is required to be made under subsection
(d).
(b) Employees and Other Agents. The corporation shall have
power to indemnify its employees and other agents as set forth in
the Nevada General Corporation Law.
<PAGE 17>
(c) Expense. The corporation shall advance to any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or officer, of the
corporation, or is or was serving at the request of the
corporation as a director or executive officer of another
corporation, partnership, joint venture, trust or other
enterprise, prior to the final disposition of the proceeding,
promptly following request therefor, all expenses incurred by any
director or officer in connection with such proceeding upon
receipt of an undertaking by or on behalf of such person to repay
said mounts if it should be determined ultimately that such person
is not entitled to be indemnified under this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined
pursuant to paragraph (e) of this Bylaw, no advance shall be made
by the corporation to an officer of the corporation (except by
reason of the fact that such officer is or was a director of the
corporation in which event this paragraph shall not apply) in any
action, suit or proceeding, whether civil, criminal,
administrative or investigative, if a determination is reasonably
and promptly made (i) by the Board of Directors by a majority vote
of a quorum consisting of directors who were not parties to the
proceeding, or (ii) if such quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, that the facts
known to the decision-making party at the time such determination
is made demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe
to be in or not opposed to the best interests of the corporation.
(d) Enforcement. Without the necessity of entering into an
express contract, all rights to indemnification and advances to
directors and officers under this Bylaw shall be deemed to be
contractual rights and be effective to the same extent and as if
provided for in a contract between the corporation and the
director or officer. Any right to indemnification or advances
granted by this Bylaw to a director or officer shall be
enforceable by or on behalf of the person holding such right in
any court of competent jurisdiction if (i) the claim for
indemnification or advances is denied, in whole or in part, or
(ii) no disposition of such claim is made within ninety (90) days
of request therefor. The claimant in such enforcement action, if
successful in whole or in part, shall be entitled to be paid also
the expense of prosecuting his claim. In connection with any
claim for indemnification, the corporation shall be entitled to
raise as a defense to any such action that the claimant has not
met the standard of conduct that make it permissible under the
Nevada General Corporation Law for the corporation to indemnify
the claimant for the amount claimed. In connection with any claim
by an officer of the corporation (except in any action, suit or
proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such officer is or was a
director of the corporation) for advances, the corporation shall
be entitled to raise a defense as to any such action clear and
convincing evidence that such person acted in bad faith or in a
manner that such person did not believe to be in or not opposed in
the best interests of the corporation, or with respect to any
criminal action or proceeding that such person acted without
reasonable cause to believe that his conduct was lawful.
Neither the failure of the corporation (including its Board of
Directors, independent legal counsel or its stockholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in
the Nevada General Corporation Law, nor an actual determination by
the corporation (including its
<PAGE 18>
Board of Directors, independent legal counsel or its stockholders)
that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that
claimant has not met the applicable standard of conduct. In any
suit brought by a director or officer to enforce a right to
indemnification or to an advancement of expenses hereunder, the
burden of proving that the director or officer is not entitled to
be indemnified, or to such advancement of expenses, under this
Article XI or otherwise shall be on the corporation.
(e) Non-Exclusivity of Rights. The rights conferred on any
person by this Bylaw shall not be exclusive of any other right
which such person may have or hereafter acquire under any statute,
provision of the Articles of Incorporation, Bylaws, agreement,
vote of stockholders or disinterested directors or otherwise, both
as to action in his official capacity and as to action in another
capacity while holding office. The corporation is specifically
authorized to enter into individual contracts with any or all of
its directors, officers, employees or agents respecting
indemnification and advances, to the fullest extent not prohibited
by the Nevada General Corporation Law.
(f) Survival of Rights. The rights conferred on any person
by this Bylaw shall continue as to a person who has ceased to be a
director, officer, employee or other agent and shall inure to the
benefit of the heirs, executors and administrators of such a
person.
(g) Insurance. To the fullest extent permitted by the
Nevada General Corporation Law, the corporation, upon approval by
the Board of Directors, may purchase insurance on behalf of any
person required or permitted to be indemnified pursuant to this
Bylaw.
(h) Amendments. Any repeal or modification of this Bylaw
shall only be prospective and shall not affect the rights under
this Bylaw in effect at the time of the alleged occurrence of any
action or omission to act that is the cause of any proceeding
against any agent of the corporation.
(i) Saving Clause. If this Bylaw or any portion hereof
shall be invalidated on any ground by any court of competent
jurisdiction, then the corporation shall nevertheless indemnify
each director and officer to the full extent not prohibited by any
applicable portion of this Bylaw that shall not have been
invalidated, or by any other applicable law.
(j) Certain Definitions. For the purposes of this Bylaw,
the following definitions shall apply:
(i) The term "proceeding" shall be broadly construed
and shall include, without limitation, the investigation,
preparation, prosecution, defense, settlement, arbitration
and appeal of, and the giving of testimony in, any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative.
(ii) The term "expenses" shall be broadly construed and
shall include, without limitation, court costs, attorneys'
fees, witness fees, fines, amounts paid in settlement or
judgment and any other costs and expenses of any nature or
kind incurred in connection with any proceeding.
<PAGE 19>
(iii) The term the "corporation" shall include, in
addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority
to indemnify its directors, officers, and employees or
agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as
a director, officer, employee or agent or another
corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under the
provisions of this Bylaw with respect to the resulting or
surviving corporation as he would have with respect to such
constituent corporation if its separate existence had
continued.
(iv) References to a "director," "executive officer,"
"officer," "employee," or "agent" of the corporation shall
include, without limitation, situations where such person is
serving at the request of the corporation as, respectively, a
director, executive officer, officer, employee, trustee or
agent of another corporation, partnership, joint venture,
trust or other enterprise.
(v) References to "other enterprises" shall include
employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to an
employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a
director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee
benefit plan, its participants, or beneficiaries; and a
person who acted in good faith and in a manner he reasonably
believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interests of
the corporation" as referred to in this Bylaw.
ARTICLE XII
NOTICES
Section 44. Notices.
(a) Notice to Stockholders. Whenever, under any provisions
of these Bylaws, notice is required to be given to any
stockholder, it shall be given in writing, timely and duly
deposited in the United States mail, postage prepaid, and
addressed to his last known post office address as shown by the
stock record of the corporation or its transfer agent.
(b) Notice to directors. Any notice required to be given to
any director may be given by the method stated in subsection (a),
or by facsimile, telex or telegram, except that such notice other
than one which is delivered personally shall be sent to such
address as such director shall have filed in writing with the
Secretary, or, in the absence of such filing, to the last known
post office address of such director.
<PAGE 20>
(c) Affidavit of Mailing. An affidavit of mailing, executed
by a duly authorized and competent employee of the corporation or
its transfer agent appointed with respect to the class of stock
affected, specifying the name and address or the names and
addresses of the stockholder or stockholders, or director or
directors, to whom any such notice or notices was or were given,
and the time and method of giving the same, shall in the absence
of fraud, be prima facie evidence of the facts therein contained.
(d) Time Notices Deemed Given. All notices given by mail,
as above provided, shall be deemed to have been given as at the
time of mailing, and all notices given by facsimile, telex or
telegram shall be deemed to have been given as of the sending time
recorded at time of transmission.
(e) Methods of Notice. It shall not be necessary that the
same method of giving notice be employed in respect of all
directors, but one permissible method may be employed in respect
of any one or more, and any other permissible method or methods
may be employed in respect of any other or others.
(f) Failure to Receive Notice. The period or limitation of
time within which any stockholder may exercise any option or
right, or enjoy any privilege or benefit, or be required to act,
or within which any director may exercise any power or right, or
enjoy any privilege, pursuant to any notice sent him ill the
manner above provided, shall not be affected or extended in any
manner by the failure of such stockholder or such director to
receive such notice.
(g) Notice to Person with Whom Communication Is Unlawful.
Whenever notice is required to be given, under any provision of
law or of the Articles of Incorporation or Bylaws of the
corporation, to any person with whom communication is unlawful,
the giving of such notice to such person shall not be require and
there shall be no duty to apply to any governmental authority or
agency for a license or permit to give such notice to such person.
Any action or meeting which shall be taken or held without notice
to any such person with whom communication is unlawful shall have
the same force and effect as if such notice had been duly given.
In the event that the action taken by the corporation is such as
to require the filing of a certificate under any provision of the
Nevada General Corporation Law, the certificate shall state, if
such is the fact and if notice is required, that notice was given
to all persons entitled to receive notice except such persons with
whom communication is unlawful.
(h) Notice to Person with Undeliverable Address. Whenever
notice is required to be given, under any provision of law or the
Articles of Incorporation or Bylaws of the corporation, to any
stockholder to whom (i) notice of two consecutive annual meetings,
and all notices of meetings or of the taking of action by written
consent without a meeting to such person during the period between
such two consecutive annual meetings, or (ii) all, and at least
two, payments (if sent by first class mail) of dividends or
interest on securities during a twelve-month period, have been
mailed addressed to such person at his address as shown on the
records of the corporation and have been returned undeliverable,
the giving of such notice to such person shall not be required.
Any action or meeting which shall be taken or held without notice
to such person shall have the same force and effect as if such
notice had been duly given. If any such person shall deliver to
the corporation a written notice setting forth his then current
address, the requirement that notice be given to such
<PAGE 21>
person shall be reinstated. In the event that the action taken by
the corporation is such as to require the filing of a certificate
under any provision of the Nevada General Corporation Law, the
certificate need not state that notice was not given to persons to
whom notice was not required to be given pursuant to this
paragraph.
ARTICLE XII
AMENDMENTS
Section 45. Amendments.
The Board of Directors shall have the power to adopt, amend,
or repeal Bylaws as set forth in the Articles of Incorporation.
ARTICLE XIV
LOANS TO OFFICERS
Section 46. Loans to Officers. The corporation may lend
money to, or guarantee any obligation of, or otherwise assist any
officer or other employee of the corporation or of its
subsidiaries, including any officer or employee who is a Director
of the corporation or its subsidiaries, whenever, in the judgment
of the Board of Directors, such loan, guarantee or assistance may
reasonably be expected to benefit the corporation. The loan,
guarantee or other assistance may be with or without interest and
may be unsecured, or secured in such manner as the Board of
Directors shall approve, including, without limitation, a pledge
of shares of stock of the corporation. Nothing in these Bylaws
shall be deemed to deny, limit or restrict the powers of guaranty
or warranty of the corporation at common law or under any statute.
ARTICLE XV
RESTRICTIONS ON SHARE TRANSFER
Section 47. Restrictions on Share Transfer. The Company
will be governed by each of the following restrictions:
(A) No shares may be transferred except with the prior
approval of the directors, who may in their absolute discretion
refuse to register the transfer of any shares, such approval to be
evidenced by a resolution of the directors;
(B) There shall not be any invitation to the public to
subscribe for any shares or debt obligations of the Company.
<PAGE 22>
(C) The number of shareholders of the Company exclusive of:
(1) persons who are in the employment of the Company or
of an affiliate of the Company;
(2) persons who, having formerly been in the employment
of the Company or an affiliate of the Company,
were, while in that employment, shareholders of the
Company and have continued to be shareholders of
the Company after termination of that employment,
is limited to not more than 50 persons, two or more persons who
are joint registered owners of one or more shares being counted as
one shareholder.
Declared as the By-Laws of EXPLORE TECHNOLOGIES, INC. as of the
19TH day of December, 1998.
Signature of Officer: /s/ Peter Bell
Name of Officer: Peter W. Bell_______________________
Position of Officer: President and Director
MINERAL PROPERTY OPTION AGREEMENT
THIS AGREEMENT is dated for reference the 22nd day of
December, 1998.
BETWEEN: MIRANDA INDUSTRIES INC.
Suite 505 - 1155 Robson Street
Vancouver, B.C.
V6E 1B5
(the "Optionor") OF THE FIRST PART
AND: EXPLORE TECHNOLOGIES, INC.
Suite 1880, Royal Centre
1055 West Georgia Street
Vancouver, B.C.
V6E 3P3
("Explore Tech") OF THE SECOND PART
WHEREAS the Optionor holds the option to acquire an undivided
100% right, title and interest in and to certain mineral claims
under the Underlying Agreement as hereinafter defined;
AND WHEREAS Explore Tech is desirous of acquiring a 50% right,
title and interest in and to the Property as hereafter defined on
the terms and conditions contained in this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of
the premises and the mutual covenants and agreements hereinafter
contained, the parties hereto agree as follows:
1. DEFINITIONS
1.01 In this Agreement:
(a) "Exploration and Development" means any and all
activities comprising or undertaken in connection
with the exploration and development of the
Property, the construction of a mine and mining
facilities on or in proximity to the Property and
placing the Property into commercial production;
(b) "Net Smelter Returns" shall have the meaning
ascribed by Schedule B of the Underlying Agreement
attached hereto:
(c) "Property" means and includes:
(i) the mining claims more particularly described
in Schedule AA attached hereto and forming part
hereof; and
(ii) all rights and appurtenances pertaining to the
mining claims more particularly described in
Schedule AA including all water and water
rights, rights of way, and easements, both
recorded and unrecorded, to which the Optionor
is entitled in respect thereof;
<PAGE 2>
(d) "Property Acquisition Costs" means and includes all
cash payments due to McIntosh under the terms of the
Underlying Agreement;
(e) "Property Expenditures" means all reasonable and
necessary monies expended on or in connection with
Exploration and Development as determined in
accordance with generally accepted accounting
principles including, without limiting the generality
of the foregoing:
(i) the cost of entering upon, surveying,
prospecting and drilling on the Property;
(ii) the cost of any geophysical, geochemical and
geological surveys relating to the Property;
(iii) all filing and other fees and charges
necessary or advisable to keep the Property
or any part or parts thereof in good standing with
any regulatory authorities having jurisdiction;
(iv) all rentals, royalties, taxes (exclusive of
all income taxes and mining taxes based on income
and which are or may be assessed against any of
the parties hereto) and any assessments
whatsoever, whether the same constitute charges on
the Property or arise as a result of the operation
thereon;
(v) the cost, including rent and finance
charges, of all buildings, machinery, tools,
appliances and equipment and related capital items
that may be erected, installed and used from time
to time in connection with Exploration and
Development;
(vi) the cost of construction and maintenance
of camps required for Exploration and Development;
(vii) the cost of transporting persons,
supplies, machinery and equipment in connection
with Exploration and Development;
(viii) all wages and salaries (including fringe
benefits as are usually paid in Canadian mineral
exploration business) of persons engaged in
Exploration and Development and any assessments or
levies made under the authority of any regulatory
body having jurisdiction with respect to such
persons or supplying food, lodging and other
reasonable needs for such persons;
(ix) all costs of consulting and other
engineering services including report
preparation;
(x) the cost of compliance with all statutes,
orders and regulations respecting environmental
reclamation, restoration and other like work
required as a result of conducting Exploration and
Development; and
(xi) all costs of searching for, digging, working,
sampling, transporting, mining and procuring
diamonds, other minerals, ores, and metals from
and out of the Property;
(f) "Underlying Agreement" means that certain agreement
with respect to the Property
<PAGE 3>
dated November 20, 1997 between Larry McIntosh
("McIntosh") and Miranda Industries Inc. and attached
hereto as Schedule BB.
2. ACQUISITION OF INTEREST
2.01 The Optionor hereby grants to Explore Tech the
exclusive right and option to acquire an undivided 50% right,
title and interest in and to the Property for total consideration
consisting of cash payments to the Optionor totalling $1000 and
the incurrence of Property Expenditures totalling $150,000 to be
made as follows:
(a) upon execution of this Agreement, the payment
to the Optionor of the sum of $1000;
(b) by December 31, 1999 the incurrence of Property
Expenditures in the amount of $10,000;
(c) by December 31, 2001, the incurrence of
Property Expenditures in the cumulative amount
of $150,000.
2.02 Explore Tech shall pay all Property Acquisition Costs
until Explore Tech has earned an undivided 50% right, title and
interest in and to the Property pursuant to paragraph 2.01.
2.03 The Optionor shall be the operator with respect to the
incurrence of Property Expenditures pursuant to subparagraphs
2.01(b) and (c). The Optionor agrees to conduct its operatorship
of the Property in a diligent and workmanlike fashion at a cost
no greater than standard industry rates.
2.04 Upon making the cash payments, Property Maintenance
Costs, and Property Expenditures as specified in paragraph 2.01,
Explore Tech shall have acquired an undivided 50% right, title
and interest in and to the Property, subject to the royalties
referred to in section 3.
2.05 This Agreement is an option only and the doing of any
act or the making of any payment by Explore Tech shall not
obligate Explore Tech to do any further acts or make any further
payments.
2.06 Explore Tech recognizes that this agreement is subject
to an Underlying Agreement whereby the Optionor has the option to
acquire its 100% interest in the Property. Explore Tech hereby
agrees that this Agreement is subject to the terms of the
Underlying Agreement and Explore Tech hereby agrees to be bound
by the terms of the Underlying Agreement, insofar as it is
applicable.
3. ROYALTY
3.01 Explore Tech agrees that the Property shall be subject
to a Net Smelter Return royalty pursuant to section 4 of the
Underlying Agreement.
4. TRANSFER OF TITLE
4.01 Upon execution of this Agreement, Explore Tech shall be
entitled to record this Agreement against title to the Property.
4.02 Upon completion by Explore Tech of the Property
Expenditures referred to in subparagraph 2.01 (c), the Optionor
shall deliver to Explore Tech a duly executed Quitclaim Deed for
the transfer of an undivided 50% interest in and to the Property
to Explore Tech.
5. JOINT VENTURE
<PAGE 4>
5.01 Upon Explore Tech acquiring an interest in the Property
pursuant to paragraph 2.01, the Optionor and Explore Tech agree
to join and participate in a single purpose joint venture ( the "
Joint Venture") for the purpose of further exploring and
developing and, if economically and politically feasible,
constructing and operating a mine on the Property. The Joint
Venture shall be governed by an agreement which shall be entered
into by the parties incorporating the principles outlined in
Schedule CC hereto.
6. RIGHT OF ENTRY
6.01 During the currency of this Agreement, Explore Tech,
its servants, agents and workmen and any persons duly authorized
by Explore Tech, shall have the right of access to and from and
to enter upon and take possession of and prospect, explore and
develop the Property in such manner as Explore Tech in its sole
discretion may deem advisable for the purpose of incurring
Property Expenditures as contemplated by section 2, and shall
have the right to remove and ship therefrom ores, minerals,
metals, or other products recovered in any manner therefrom for
testing or sampling purposes only.
7. COVENANTS OF EXPLORE TECH
7.01 Explore Tech covenants and agrees that:
(a) during the term of the option herein, Explore Tech
shall keep the Property clear of all liens,
encumbrances and other charges and shall keep the
Optionor and McIntosh indemnified in respect
thereof;
(b) Explore Tech shall carry on all operations on the
Property in a good and workmanlike manner and in
compliance with all applicable governmental
regulations and restrictions including but not
limited to the posting of any reclamation bonds as
may be required by any governmental regulations or
regulatory authorities;
(c) during the term of the option herein, Explore Tech
shall pay or cause to be paid any rates, taxes,
duties, royalties, Workers' Compensation or other
assessments or fees levied with respect to its
operations thereon and in particular Explore Tech
shall pay the yearly claim maintenance payments
necessary to maintain the claims in good standing;
(d) Explore Tech shall maintain books of account in
respect of its expenditures and operations on the
Property and, upon reasonable notice, shall make
such books available for inspection by
representatives of the Optionor or McIntosh;
(e) Explore Tech shall allow any duly authorized agent
or representative of the Optionor or McIntosh to
inspect the Property at reasonable times and
intervals and upon reasonable notice given to
Explore Tech, provided however, that it is agreed
and understood that any such agent or representative
shall be at his own risk in respect of, and Explore
Tech shall not be liable for, any injury incurred
while on the Property, howsoever caused;
(f) Explore Tech shall allow the Optionor or McIntosh
access at reasonable times to all maps, reports,
sample results and other technical data prepared or
obtained by Explore Tech in connection with its
operations on the Property;
<PAGE 5>
(g) Explore Tech shall indemnify and save the Optionor
and McIntosh harmless of and from any and all costs,
claims, loss and damages whatsoever incidental to or
arising out of any work or operations carried out by
or on behalf of Explore Tech on the Property,
including any liability of an environmental nature.
8. REPRESENTATIONS AND WARRANTIES
8.01 The Optionor hereby represents and warrants that:
(a) the Underlying Agreement is in good standing;
(b) it has not done anything whereby the mineral claims
comprising the Property may be in any way
encumbered, other than by the Underlying Agreement
and the royalties specified in section 3;
(c) it has full corporate power and authority to enter
into this Agreement and the entering into of this
Agreement does not conflict with any applicable laws
or with its charter documents or any contract or
other commitment to which it is party; and
(d) the execution of this Agreement and the performance
of its terms have been duly authorized by all
necessary corporate actions including the resolution
of its Board of Directors.
8.02 Explore Tech hereby represents and warrants that:
(a) it has full corporate power and authority to enter
into this Agreement and the entering into of this
Agreement does not conflict with any applicable laws
or with its charter documents or any contract or
other commitment to which it is party; and
(b) the execution of this Agreement and the performance
of its terms have been duly authorized by all
necessary corporate actions including the resolution
of its Board of Directors.
9. ASSIGNMENT
9.01 With the consent of the other party, which consent
shall not be unreasonably withheld, Explore Tech, the Optionor
and McIntosh each has the right to assign all or any part of its
interest in this Agreement and or in the Property, subject to the
terms and conditions of this Agreement. It shall be a condition
precedent to any such assignment that the assignee of the
interest being transferred agrees to be bound by the terms of
this Agreement, insofar as they are applicable.
10. CONFIDENTIALITY OF INFORMATION
10.01 The parties to this Agreement (the "Parties")
shall treat all data, reports, records and other information of
any nature whatsoever relating to this Agreement and the Property
as confidential, except where such information must be disclosed
for public disclosure requirements of a public company.
11. TERMINATION
11.01 Until such time as Explore Tech has acquired an
undivided 50% interest in the Property pursuant to section 2,
this Agreement shall terminate upon any of the following events:
(a) upon the failure of Explore Tech to make a payment
or incur Property Expenditures
<PAGE 6>
required by and within the time limits prescribed by
paragraph 2.01;
(b) in the event that Explore Tech, not being at the
time in default under any provision of this
Agreement, gives 30 day's written notice to the
Optionor of the termination of this Agreement;
(c) in the event that Explore Tech shall fail to comply
with any of its obligations hereunder, other than
the obligations contained in paragraph 2.01, and
subject to paragraph 12.01, and within 30 days of
receipt by Explore Tech of written notice from the
Optionor of such default, Explore Tech has not:
(i) cured such default, or commenced
proceedings to cure such default and
prosecuted same to completion without
undue delay; or
(ii) given the Optionor notice that it denies
that such default has occurred.
In the event that Explore Tech gives notice that it denies that a
default has occurred, Explore Tech shall not be deemed in
default until the matter shall have been determined finally
through such means of dispute resolution as such matter has been
subjected to by either party.
11.02 Upon termination of this Agreement under paragraph 11.01,
Explore Tech shall:
(a) transfer its interest in title to the Property, in
good standing to the Optionor free and clear of all
liens, charges, and encumbrances;
(b) turn over to the Optionor copies of all maps,
reports, sample results, contracts and other data
and documentation in the possession of Explore
Tech or, to the extent within Explore Tech's
control, in the possession of its agents,
employees or independent contractors, in
connection with its operations on the Property;
and
(c) ensure that the Property is in a safe condition
and complies with all environmental and safety
standards imposed by any duly authorized
regulatory authority.
11.03 Upon the termination of this Agreement under
paragraph 11.01 , Explore Tech shall cease to be liable to the
Optionor in debt, damages or otherwise save for the performance
of those of its obligations which theretofore should have been
performed, including those obligations in paragraph 11.02.
11.04 Upon termination of this Agreement, Explore Tech
shall vacate the Property within a reasonable time after such
termination, but shall have the right of access to the Property
for a period of six months thereafter for the purpose of
removing its chattels, machinery, equipment and fixtures.
12 FORCE MAJEURE
12.01 The time for performance of any act or making any
payment or any expenditure required under this Agreement shall be
extended by the period of any delay or inability to perform due
to fire, strikes, labour disturbances, riots, civil commotion,
wars, acts of God, any present or future law or governmental
regulation, any shortages of labour, equipment or materials, or
any other cause not reasonably within the control of the party
in default, other than lack of finances.
<PAGE 7>
13. REGULATORY APPROVAL
13.01 If this Agreement is subject to the prior approval
of any securities regulatory bodies, then the Parties shall use
their best efforts to obtain such regulatory approvals.
14. NOTICES
14.01 Any notice, election, consent or other writing
required or permitted to be given hereunder shall be deemed to be
sufficiently given if delivered or mailed postage prepaid or if
given by telegram, telex or telecopier, addressed as follows:
In the case of the Optionor: Miranda Industries Inc.
Suite 505 - 1155 Robson Street
Vancouver, B.C.
V6E 1B5
Telecopier: (604)689-1722
In the case of Explore Technologies, Inc.:
Explore Technologies, Inc.
Suite 1880 Royal Centre
1055 West Georgia Street
Vancouver, B.C.
V6E 3P3
Telecopier: (604) 687-6650
and any such notice given as aforesaid shall be deemed to have
been given to the parties hereto if delivered, when delivered, or
if mailed, on the third business day following the date of
mailing, or, if telegraphed, telexed or telecopied, on the same
day as the telegraphing, telexing or telecopying thereof PROVIDED
HOWEVER that during the period of any postal interruption in
Canada any notice given hereunder by mail shall be deemed to have
been given only as of the date of actual delivery of the same.
Any party may from time to time by notice in writing change its
address for the purposes of this paragraph 14.01.
15. GENERAL TERMS AND CONDITIONS
15.01 The parties hereto hereby covenant and agree that
they will execute such further agreements, conveyances and
assurances as may be requisite, or which counsel for the parties
may deem necessary to effectually carry out the intent of this
Agreement.
15.02 This Agreement shall constitute the entire
agreement between the parties with respect to the Property. No
representations or inducements have been made save as herein set
forth. No changes, alterations or modifications of this
Agreement shall be binding upon either party until and unless a
memorandum in writing to such effect shall have been signed by
all parties hereto. This Agreement shall supersede all previous
written, oral or implied understandings between the parties with
respect to the matters covered hereby.
15.03 Time shall be of the essence of this Agreement.
15.04 The titles to the sections in this Agreement shall
not be deemed to form part of this Agreement but shall be
regarded as having been used for convenience of reference only.
<PAGE 8>
15.05 Unless otherwise noted, all currency references
contained in this Agreement shall be deemed to be references to
United States funds.
15.06 Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision shall be
prohibited by or be invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
15.07 The Schedules to this Agreement shall be construed
with and as an integral part of this Agreement to the same extent
as if they were set forth verbatim herein. Defined terms
contained in this Agreement shall have the same meanings where
used in the Schedules.
15.08 This Agreement shall be governed by and interpreted in
accordance with the laws of British Columbia and the laws of
Canada applicable therein.
15.09 This Agreement shall enure to the benefit of and
be binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
IN WITNESS WHEREOF this Agreement has been executed by the
parties hereto as of the day and year first above written.
THE COMMON SEAL OF MIRANDA
INDUSTRIES INC. was hereunto affixed C/S
in the presence of:
/s/ Dennis Higgs
/s/ Aileen Fehr
THE COMMON SEAL OF EXPLORE C/S
TECHNOLOGIES, INC. was hereunto affixed
in the presence of:
/s/ Peter Bell
<PAGE 9>
SCHEDULE "AA"
PROPERTY DESCRIPTION
Claim Name: File Date: NMC# Sec: T & R
Dune #1 November 18, 1997 781565 3 T16N R32E
Dune #2 November 18, 1997 781566 3 T16N R32E
Dune #3 November 18, 1997 781567 3 T16N R32E
Dune #4 November 18, 1997 781568 3 T16N R32E
Dune #5 November 18, 1997 781569 3 T16N R32E
Dune #6 November 18, 1997 781570 3 T16N R32E
Dune #7 November 18, 1997 781571 3 T16N R32E
Dune #8 November 18, 1997 781572 3 T16N R32E
Dune #22 October 21, 1998 796395 3,4 T16N R32E
Dune #23 October 21, 1998 796396 3,4 T16N R32E
Dune #24 October 21, 1998 796397 3 T16N R32E
<PAGE 10>
SCHEDULE "BB"
ATTACHMENT: AGREEMENT DATED
NOVEMBER 20, 1997, BETWEEN LARRY MCINTOSH
AND MIRANDA INDUSTRIES INC.
<PAGE 11>
SCHEDULE "CC"
PRINCIPLES TO BE INCORPORATED IN
JOINT VENTURE AGREEMENT
1. The initial beneficial interest of the parties (the "Joint
Venturers") in the Joint Venture, including the mineral claims
comprising the property, any mining leases, surface rights,
building, equipment, plant, installations, infrastructure,
housing, airport and all other facilities, rights and
interests shall be Explore Tech as to 50% and the Optionor as
to 50%. The deemed contribution of each party to the Joint
Venture shall be $200,000.
2. Upon the formation of the Joint Venture, a Management
Committee consisting of a representative of each Joint
Venturer shall be formed to manage the activities of the
Operator on the Claim or in relation thereto, including but
not limited to production decisions and considering and
approving all work programs.
3. Each Joint Venturer's representative to the Management
Committee shall be entitled to cast that number of votes which
is equal in number to the percentage beneficial interest in
the Joint Venture held by the respective Joint Venturer in
accordance with this Schedule CC. All decisions and approvals
shall be made by a simple majority of the votes cast.
Notwithstanding the foregoing, if a Joint Venturer at any time
fails to contribute, pro rata according to its beneficial
interest in the Joint Venture, to any annual work program
other than one to which it has elected not to contribute
pursuant to paragraph 6 of this Schedule CC, the Management
Committee shall immediately be deemed to be and shall be
composed only of the representative of the other Joint
Venturers.
4. The initial Operator of the Joint Venture shall be Explore
Tech unless and until such time as Explore Tech's beneficial
interest in the Joint Venture is reduced below 50%, at which
point the Management Committee shall appoint an Operator. The
Operator shall report to and take instructions from the
Management Committee.
5. After formation of the Joint Venture, unless a Joint Venturer
has elected not to participate or has elected to participate
to a lesser extent than its then existing beneficial interest
in a program pursuant to paragraph 6 of this Schedule CC, each
Joint Venturer shall participate in funding future Property
Costs in proportion to its respective beneficial interest in
the Joint Venture. A Joint Venturer may elect to participate
in a program to a lesser extent than its then existing
respective beneficial interest in the Joint Venture. For the
purposes of this Schedule CC, "Property Costs" shall mean all
funds required following formation of the Joint Venture to
acquire, explore for, develop, build, operate and maintain an
efficient mine on the Claim as called for by the Operator in
accordance with the directives of the Management
<PAGE 12>
Committee of the Joint Venture.
6. The Operator shall submit an annual work program to the
Management Committee for approval. If the Operator fails to
submit such a program, the Non-Operator may submit such a
program. Before a production decision is made with respect
to the Property, a Joint Venturer may elect not to participate
or to participate to a lesser extent than its then existing
beneficial interest in any annual work program before costs
have been incurred thereunder, in which event the provisions
of paragraphs 7 and 8 of this Schedule CC shall govern. The
election of any party to participate must be made within 30
days of the submission of an annual work program and budget,
failing which such party shall be deemed to have elected not
to participate in such program.
7. If the Joint Venturer elects not to participate or to
participate to a lesser extent than its then existing
beneficial interest in any annual work program pursuant to
paragraph 6 of this Schedule CC, that Joint Venturer's
beneficial interest in the Joint Venture shall be reduced
while that of the other Joint Venturer is increased so that,
subject to paragraph 9 and 10 of this Schedule CC, the
beneficial interest of each Joint Venturer shall be at all
times proportionate to the sum of the total Property Costs of
both Joint Venturers.
8. If a Joint Venturer elects not to participate or to
participate to a lesser extent than its then existing
beneficial interest in any annual work program pursuant to
paragraph 6 of this Schedule CC, and provided that its
beneficial interest has not been reduced below 5%, that Joint
Venturer may elect to participate in the funding of future
Property Costs, commencing with the next annual work program,
to the extent of its then existing beneficial interest in the
Joint Venture.
9. If the beneficial interest of a Joint Venturer (the "Diluted
Venturer") is reduced below 5%, the Diluted Venturer shall be
deemed to have assigned and conveyed its beneficial and legal
interest in the Joint Venture to the other Joint Venturer and
shall be entitled thereafter, in lieu of a Joint Venture
interest, to a royalty from the Property equivalent to 2% of
net smelter returns. The Property shall be immediately
transferred into the other Joint Venturer's name alone and the
Joint Venture Agreement shall thereby be terminated subject to
any then outstanding liabilities between the parties.
10. If a Joint Venturer (the "Non-Contributing Venturer") at any
time fails to contribute, pro rata according to its beneficial
interest in the Joint Venture, to any annual work program
other than one to which it has elected not to contribute
pursuant to paragraph 6 of this Schedule CC, the Non-
Contributing Venturer shall be deemed to have assigned and
conveyed its beneficial and legal interest in the Joint
Venture to the other Joint Venturer and shall be entitled
thereafter, in lieu of a Joint Venture interest to a royalty
from the Property equivalent to 2 % of net smelter returns.
The Property shall be immediately transferred into the other
Joint Venturers name alone and the Joint Venture Agreement
shall be terminated subject to any then outstanding
liabilities between the parties.
<PAGE 13>
11. Each Joint Venturer shall provide to the other all reports,
maps, logs or other data whatsoever relating to the Property
in their possession or otherwise under their control.
12. Any dispute arising under this agreement shall be forthwith
submitted to a single arbitrator in accordance with the
provisions of the Commercial Arbitration Act (British
Columbia).
MINERAL PROPERTY OPTION AGREEMENT
THIS AGREEMENT is dated for reference the 20th day of November,
1997.
BETWEEN: LARRY McINTOSH
P.O. Box 1388
Gardnerville, Nevada
89410
("McIntosh")
OF THE FIRST PART
AND: MIRANDA INDUSTRIES INC.
Suite 505 - 1155 Robson Street
Vancouver, B.C.
V6E 1B5
("Miranda")
OF THE SECOND PART
WHEREAS McIntosh has identified a mineral prospect suitable for
staking which the parties have agreed will be staked in the name
of Miranda on the terms and conditions contained in this
Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of
the premises and the mutual convenants and agreements hereinafter
contained, the parties hereto agree as follows:
1. DEFINITIONS
1.01 In this Agreement:
(a) "Exploration and Development" means any and all
activities comprising or undertaken in connection
with the exploration and development of the
Property, the construction of a mine and mining
facilities on or in proximity to the Property and
placing the Property into commercial production;
(b) "Net Smelter Returns" shall have the meaning
ascribed by Schedule B attached hereto.
(c) "Property" means and includes:
(i) those mining claims staked by Miranda which,
once filed, will be described in a Schedule A
to be initialled by the parties and appended to
this agreement;
(ii) all rights and appurtenances pertaining to the
mining claims including all water and water
rights of way, and easements, both recorded and
unrecorded, to which Miranda is entitled in
respect thereof;
(d) "Property Expenditures" means all reasonable and
necessary monies expended on or in connection with
Exploration and Development as determined in
accordance with generally accepted accounting
principles including, without limiting the generality
of the
<PAGE 2>
foregoing:
(i) the cost of entering upon, surveying,
prospecting and drilling on the Property;
(ii) the cost of any geophysical, geochemical and
geological surveys relating to the Property;
(iii) all filing and other fees and charges
necessary or advisable to keep the
Property or any part or parts thereof in good
standing with any regulatory authorities having
jurisdiction;
(iv) all rentals, royalties, taxes (exclusive of
all income taxes and mining taxes based on
income and which are or may be assessed against
any of the parties hereto) and any assessments
whatsoever, whether the same constitute charges
on the Property or arise as a result of the
operation thereon;
(v) the cost, including rent and finance charges,
of all buildings, machinery, tools, appliances
and equipment and related capital items that may
be erected, installed and used from time to time
in connection with Exploration and Development;
(vi) the cost of construction and maintenance
of camps required for Exploration and
Development;
(vii) the cost of transporting persons,
supplies, machinery and equipment in
connection with Exploration and Development;
(viii)all wages and salaries (including fringe
benefits as are usually paid in Canadian mineral
exploration business) of persons engaged in
Exploration and Development and any assessments
or levies made under the authority of any
regulatory body having jurisdiction with respect
to such persons or supplying food, lodging and
other reasonable needs for such persons;
(ix) all costs of consulting and other
engineering services including report
preparation;
(x) the cost of compliance with all statutes,
orders and regulations respecting environmental
reclamation, restoration and other like work
required as a result of conducting Exploration
and Development; and
(xi) all costs of searching for, digging, working,
sampling, transporting, mining and procuring
diamonds, other minerals, ores, and metals from
and out of the Property;
2. ACQUISITION OF INTEREST
2.01 McIntosh hereby grants to Miranda the exclusive right
and option to acquire an undivided 100% right, title and interest
in and to the Property for total consideration consisting of the
staking of the Property and cash payments to McIntosh totalling
$138,500 to be made as follows:
(a) the staking of at least fourteen mining claims
covering the prospect identified by McIntosh
and made known to Miranda, to be described in Schedule
A hereto:
(b) on or before November 20, 1998, the payment to
McIntosh of $2,500;
<PAGE 3>
(c) on or before November 20, 1999, the payment to
McIntosh of $7,000;
(d) on or before November 20, 2000, the payment to
McIntosh of $9,000;
(e) on or before November 20, 2001, the payment to
McIntosh of $10,000;
(f) on or before November 20, 2002, the payment to
McIntosh of $10,000; and
(g) on or before November 20, in each of the years 2003
through 2007, inclusive, the payment to McIntosh of
$20,000.
2.02 This Agreement is an option only and the doing of any
act or the making of any payment by Miranda shall not obligate
Miranda to do any further acts or make any further payments.
3. COVENANTS OF MIRANDA
3.01 Miranda covenants and agrees with McIntosh that during the
term of this Agreement:
(a) Miranda shall, as required by the State of Nevada,
record or cause to be recorded as assessment work all
work conducted on the property and otherwise shall
maintain the Property in good standing at all times
during the currency of this Agreement;
(b) Miranda shall carry on all operations on the Property
in a good and workmanlike manner and in compliance
with all applicable governmental regulations and
restrictions including but not limited to the posting
of any reclamation bonds and the conduct of all
reclamation work as may be required by any
governmental regulations or regulatory authorities;
(c) Miranda shall pay or cause to be paid any rates,
taxes, duties, royalties, Workers Compensation or
other assessments or fees levied with respect to the
Property or Miranda's operations thereon;
(d) Miranda shall maintain books of account in respect of
its expenditures and operations of the Property and,
upon reasonable notice, shall make such books
available for inspection by representatives of
McIntosh;
(e) Miranda shall allow any duly authorized agent or
representative of McIntosh to inspect the Property at
reasonable times and intervals and upon reasonable
notice given to Miranda, provided however that it is
agreed and understood that any such agent or
representative shall be at his own risk in respect
of, and Miranda shall not be liable for, any injury
incurred while on the Property, howsoever caused; and
(f) Miranda shall provide to McIntosh, semi-annually, a
summary report outlining Miranda's progress on the
Property and shall provide to McIntosh, annually, a
copy of all factual, non-interpretive data derived
from Miranda's operations on the Property.
4. ROYALTY
4.01 Miranda agrees that the Property shall be subject to a
royalty in favour of McIntosh equal to 2.5% of Net Smelter
Returns until such time as McIntosh has received therefrom the
total sum of $500,000 and 1% of Net Smelter Returns thereafter,
to be calculated and paid according to and otherwise governed by
Schedule B hereto. At any time prior to the receipt by McIntosh
of $500,000 in royalty payments, the Optionor's 2.5% Net Smelter
Returns royalty can be bought down to 1% by the payment by
Miranda to McIntosh of the difference between $500,000 and the
amount actually received in royalty payments by McIntosh to that
point in time.
5. TRANSFER OF TITLE
5.01 Upon execution of this Agreement, and the staking of the
claims comprising the Property, the
<PAGE 4>
claims shall be recorded in the name of Miranda, and the Property
shall be registered in the name of Miranda.
5.02 Upon Miranda making the payments pursuant to article 2,
McIntosh shall have no further rights to the Property other than
the royalty interest pursuant to article 4.
6. RIGHT OF ENTRY
6.01 During the currency of this Agreement, Miranda, its
servants, agents and workmen and any persons duly authorized by
Miranda, shall have the right of access to and from and to enter
upon and take possession of and prospect, explore and develop the
Property in such manner as Miranda in its sole discretion may
deem advisable and shall have the right to remove and ship
therefrom ores, minerals, metals, or other products recovered in
any manner therefrom.
6.02 Miranda shall be provided access to all maps, reports,
assay results and other technical data in the possession or under
the control of McIntosh with respect to the Property and shall be
entitled to take copies thereof.
7. REPRESENTATIONS AND WARRANTIES
7.01 McIntosh hereby represents and warrants that:
(a) upon staking of the Property, Miranda will be the sole
and exclusive registered and beneficial owner of the
mineral claims comprising the Property;
(b) McIntosh has not done anything whereby the mineral
claims comprising the Property may be in any way
encumbered.
7.02 Miranda hereby represents and warrants that:
(a) Miranda has full corporate power and authority to
enter into this Agreement and the entering into of
this Agreement does not conflict with any applicable
laws or with the charter documents of Miranda or any
contract or other commitment to which Miranda is
party; and
(b) the execution of this Agreement and the performance of
its terms have been duly authorized by all necessary
corporate actions including the resolution of the
Board of Directors of Miranda.
8. CONFIDENTIALITY OF INFORMATION
8.01 McIntosh shall treat all data, reports, records and other
information of any nature whatsoever relating to this Agreement
and the Property as confidential. While this Agreement is in
effect, McIntosh shall not, without the express written consent
of Miranda, disclose to any third party any information
concerning the Property or any operations thereon, nor shall
McIntosh buy, sell or otherwise deal in the shares of Miranda
while any material, confidential information in its possession
relating to this Agreement or the Property remains undisclosed to
the general public.
9. ASSIGNMENT
9.01 With the consent of the other party, which consent shall
not be unreasonably withheld, each party has the right to assign
all or any part of its interest in this Agreement and in the
Property, subject to the terms and conditions of this Agreement.
It shall be a condition precedent to any such assignment that
the assignee of the interest being transferred agrees to be bound
by the terms of this Agreement, insofar as they are applicable.
Notwithstanding the foregoing, Miranda has the unfettered right
to assign the benefit
<PAGE 5>
of this Agreement and its interest in the Property to its wholly-
owned U.S. subsidiary.
10. TERMINATION
10.01 This Agreement shall terminate upon the occurrence of
one of the following events:
(a) in the event that Miranda, not being at the time in
default under any provision of this Agreement, gives
30 days' written notice to McIntosh of the
termination of this Agreement;
(b) in the event that Miranda shall fail to comply with
any of the requirements to make cash payments in the
amounts and within the time limits set forth in
article 2;
(c) in the event that Miranda shall fail to comply with
any of its obligations hereunder, other than the
obligations referred to in subparagraph 10.01(b), and,
subject to paragraph 11.01, within 30 days of receipt
by Miranda of written notice from McIntosh of such
default, Miranda has not:
(i) cured such default, or commenced proceedings to
cure such default and prosecuted same to
completion without undue delay; or
(ii)given McIntosh notice that it denies that such
fault has occurred.
In the event that Miranda gives notice that it denies that a
default has occurred, Miranda shall not be deemed in default
until the matter shall have been determined finally through such
means of dispute resolution as such matter has been subjected to
by either party.
10.02 Upon termination of this Agreement under paragraph
10.01, Miranda shall:
(a) if termination occurs after May 31 of the year in
which it occurs, have paid the annual maintenance fees
on the Property for that year to the Bureau of Land
Management;
(b) transfer title to the Property to McIntosh free and
clear of all liens, charges and encumbrances;
(c) turn over to McIntosh copies of all non-interpretive
maps, reports, sample results, contracts and other
data and documentation in the possession of Miranda
or, to the extent within Miranda's control, in the
possession of its agents, employees or independent
contractors, in connection with its operations on the
Property; and
(d) ensure that the Property is in a safe condition and
complies with all environmental and safety standards
imposed by any duly authorized regulatory authority.
10.03 Upon the termination of this Agreement under paragraph
10.01, Mirada shall cease to be liable to McIntosh in debt,
damages or otherwise save for the performance of those
obligations in paragraph 10.02.
10.04 Upon termination of this Agreement under paragraph
10.01, Miranda shall vacate the Property within a reasonable time
after such termination, but shall have the right of access to the
property for a period of six months thereafter for the purpose of
removing its chattels, machinery, equipment and fixtures.
11. FORCE MAJEURE
11.01 The time for performance of any act or making any
payment or any expenditure required under
<PAGE 6>
this Agreement or the underlying Agreement shall be extended by
the period of any delay or inability to perform due to fire,
strikes, labour disturbances, riots, civil commotion, wars, acts
of God, any present or future law or governmental regulation, any
shortages of labour, equipment or materials, or any other cause
not reasonably within the control of the party in default, other
than lack of finances.
12. RIGHT OF FIRST REFUSAL
12.01 In the event that Miranda hereafter elects to joint
venture the Property, Miranda shall first offer to Cordex
Exploration Company of 573 East 2nd Street, Reno, Nevada, 89502,
the one-time first right to become Miranda's joint venture
partner on the Property, on such reasonable terms and conditions
as Miranda shall specify.
13. AFTER-ACQUIRED PROPERTY
13.01 In the event that at any time hereafter either party
shall acquire any mining claim, lease, or other mineral right or
interest within a one mile radius of the outside boundary of the
Property to be described in Schedule A hereto, such interest
shall be deemed to have been acquired on behalf of and for the
benefit of the parties, pursuant to the terms of this Agreement
and such after-acquired interest as aforesaid shall be included
in and shall form a part of the definition of "Property"
contained in paragraph 1.01 and shall be subject to this
Agreement as if it had been originally so included.
14. NOTICES
14.01 Any notice, election, consent or other writing required
or permitted to be given hereunder shall be deemed to be
sufficiently given if delivered or mailed postage prepaid or if
given by telegram, telex or telecopier, addressed as follows:
In the case of McIntosh: LARRY McINTOSH
P.O. Box 1388
Gardnerville, Nevada
89410
Fax: (702) 782-4034
In the case of Miranda: MIRANDA INDUSTRIES INC.
Suite 505
1155 Robson Street
Vancouver, British Columbia
V6E 1B5
Fax: (604) 689-1722
and any such notice given as aforesaid shall be deemed to have
been given to the parties hereto if delivered, when delivered, or
if mailed, on the third business day following the date of
mailing, or, if telegraphed, telexed or telecopied, on the same
day as the telegraphing, telexing or telecopying thereof provided
however that during the period of any postal interruption in
Canada or the United States any notice given hereunder by mail
shall be deemed to have been given only as of the date of actual
delivery of the same. Any party may from time to time by notice
in writing change its address for the purposes of this paragraph
14.01.
15. GENERAL TERMS AND CONDITIONS
15.01 The parties hereto hereby covenant and agree that they
will execute such further agreements, conveyances and assurances
as may be requisite, or which counsel for the parties may deem
necessary to
<PAGE 7>
effectually carry out the intent of this Agreement.
15.02 This Agreement shall constitute the entire agreement
between the parties with respect to the Property. No
representations or inducements have been made save as herein set
forth. No changes, alterations or modifications of this
Agreement shall be binding upon either party until and unless a
memorandum in writing to such effect shall have been signed by
all parties hereto. This Agreement shall supersede all previous
written, oral or implied understandings between the parties with
respect to the matters hereby.
15.03 Time shall be of the essence of this Agreement.
15.04 The titles to the articles in this Agreement shall not
be deemed to form part of this Agreement but shall be regarded as
having been used for convenience of reference only.
15.05 All currency references contained in this Agreement
shall be deemed to be references to United States funds.
15.06 Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision shall be prohibited by
or be invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
15.07 The Schedules to this Agreement shall be construed with
and as an integral part of this Agreement to the same extent as
if they were set forth verbatim herein. Defined terms contained
in this Agreement shall have the same meanings where used in the
Schedules.
15.08 This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Nevada and the laws
of the United States of America applicable therein.
15.09 This Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
IN WITNESS WHEREOF this Agreement has been executed by the
parties hereto as of the day and year first above written.
SIGNED,SEALED and DELIVERED
by LARRY McINTOSH in the
presence of:
/s/ Susan McIntosh /s/ Larry McIntosh
THE COMMON SEAL OF MIRANDA c/s
INDUSTRIES INC. was hereunto
affixed in the presence of:
/s/ Dennis Higgs
<PAGE 8>
SCHEDULE "A"
Claim Name: File Date: NMC# Sec: T & R:
Dune #1 November 18, 1997 781565 3 T16N R32E
Dune #2 November 18, 1997 781566 3 T16N R32E
Dune #3 November 18, 1997 781567 3 T16N R32E
Dune #4 November 18, 1997 781568 3 T16N R32E
Dune #5 November 18, 1997 781569 3 T16N R32E
Dune #6 November 18, 1997 781570 3 T16N R32E
Dune #7 November 18, 1997 781571 3 T16N R32E
Dune #8 November 18, 1997 781572 3 T16N R32E
Dune #9 November 18, 1997 781573 3 T16N R32E
Dune #10 November 18, 1997 781574 3 T16N R32E
Dune #11 November 18, 1997 781575 3,10 T16N R32E
Dune #12 November 18, 1997 781576 3 T16N R32E
Dune #13 November 18, 1997 781577 3,10 T16N R32E
Dune #14 November 18, 1977 781578 3,10 T16N R32E
<PAGE 9>
SCHEDULE "B"
NET SMELTER RETURNS
1. "Net Smelter Returns" shall mean all proceeds, received or
deemed received from any mint, smelter, refinery, reduction
works or other purchaser from the sale of ores, metals,
concentrates or other mineral products produced or deemed to
be produced from the Property after deducting from such
proceeds to the extent that they are actually incurred and
were not deducted by the purchaser in computing payment:
treatment, smelting and refining charges; penalties; costs of
transportation of ores, metals, concentrates or other mineral
products from the Property to any mint, smelter refinery,
reduction works or other purchaser; and insurance on such
ores, metals, concentrates or other mineral products.
2. The amount of Net Smelter Returns shall be calculated as
follows:
(a) For gold produced from the Property, the Net Smelter
Returns shall be calculated by determining, without
duplication, the number of ounces of fine gold
delivered to or to the order of Miranda by, purchased
by, or outturned to Miranda's pool account or accounts
by, any mint or refinery and the number of ounces of
gold otherwise sold to any purchaser during any calendar
quarter, and multiplying such number of ounces by the
average of the daily London Bullion Brokers PM Gold
Fixing during such quarter, less the deductions
specified in paragraph 1, as applicable.
(b) For silver produced from the Property, the Net Smelter
Returns shall be calculated by determining, without
duplication, the number of ounces of silver delivered to
or to the order of Miranda by, purchased by, or
outturned to Miranda's pool account or accounts by , any
mint or refinery and the number of ounces of silver
otherwise sold to any purchaser during any calendar
quarter, and multiplying such number of ounces by the
average of the daily Handy & Harmon Noon Silver
Quotation during such quarter, less the deductions
specified in paragraph 1, as applicable.
(c) For minerals other than gold and silver produced from
the Property the Net Smelter Returns shall be
calculated based on the amounts actually received during
any calendar quarter from the sale of ores, metals,
concentrates or other mineral products, less the
deductions specified in paragraph 1, as applicable.
(d) Net Smelter Returns shall be calculated quarterly and
the amount of the Net Smelter Returns calculated in
respect of any calendar quarter shall be paid to
McIntosh within 30 days of the end of the quarter.
Payments shall be made in U.S. dollars and shall be
accompanied by detailed calculations and supporting
documentation showing the amounts payable.
(e) For the purposes of subparagraph (a) and (b) above, the
average price of gold or silver for any calendar
quarter shall be determined by dividing the sum of all
daily prices posted during the quarter by the number of
days during the quarter that the prices were posted.
The posted price shall be obtained from The Wall Street
Journal, Reuters, E. & MJ or another reliable source.
3. Payments of Net Smelter Returns for a calendar year shall be
subject to adjustment within 3 months after the end of the
calendar year based on an audit. The year end calculation of
Net Smelter Returns shall be audited by a firm of Chartered
Accountants designated by Miranda (which may be Miranda's
auditor) and:
<PAGE 10>
(a) copies of the audited reports shall be delivered to
Miranda and McIntosh by the chartered accounting firm;
and
(b) either party shall have three (3) months after receipt
of any audited report to object thereto in writing to
the other party, and failing such objection, such report
shall be deemed correct; and
(c) in the event of a reaudit, all costs relating to such
reaudit shall be paid by Miranda unless the reaudit is
requested by McIntosh and the original audit is found to
be substantially correct, in which case such costs shall
be paid by McIntosh.
OFFICE FACILITIES AND SERVICE CONTRACT
AGREEMENT dated for reference the 28th day of December,
1998.
BETWEEN: SENATE CAPITAL GROUP INC., a company
incorporated under the laws of British Columbia
(hereinafter called "Senate")
OF THE FIRST PART
AND: EXPLORE TECHNOLOGIES, INC., a company
incorporated under the laws of the State of Nevada
(hereinafter called "Explore")
OF THE SECOND PART
WHEREAS Senate maintains an office with reception,
secretarial services, accounting services, investor
relations, office administration services including
telephone and computer services at Suite 505 - 1155 Robson
Street, Vancouver, B.C., V6E 1B5.
AND WHEREAS Explore requires reception, secretarial
services, accounting services, investor relations, office
administration services including telephone and computer
services and wishes Senate to provide same to Explore;
NOW THEREFORE THE PARTIES HAVE AGREED and do hereby agree as
follows:
1. Senate hereby agrees to provide reception, secretarial
services, accounting services, investor relations, office
administration services including telephone and computer
services to Explore;
2. In consideration of Senate providing all the above
mentioned services to Explore, Explore agrees to pay to
Senate, $750.00 U.S. per month payable on the 1st day of
each month.
3. In addition to the above expense stated above, Explore
agrees to reimburse Senate for any expenses directly
attributable to Explore including, without limiting the
generality of the foregoing, reception, secretarial
services, accounting services, investor relations,
telephone and computer services, photocopying charges,
stationary, travel or printing expenses;
<PAGE 2>
4. Explore shall pay any directly attributable expenses on
receipt of an invoice from Senate;
5. This Agreement shall be for a term of one year commencing
January 1, 1999 and ending December 31, 1999.
6. No amendment or termination of this Agreement shall be
valid unless it is in writing and executed by both
parties;
7. Time shall be of the essence of this Agreement.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the day and year first above written.
SENATE CAPITAL GROUP INC. ) C/S
by its authorized signatory )
)
/s/ Dennis Higgs )
)
)
)
EXPLORE TECHNOLOGIES, INC. ) C/S
by its authorized signatory )
)
/s/ Peter Bell )
)
)
PETER BELL )
)
SAND SPRINGS PROJECT
CHURCHILL COUNTY, NEVADA
1998 PROJECT REPORT
John A Rice
For
MIRANDA INDUSTRIES INC.
December 1998
<INSERT>
AUTHOR'S CERTIFICATE
I, John A. Rice, of Reno, Nevada do hereby certify:
1) That I am a consulting geologist whose address is P.O. Box
20074, Reno, Nevada, 89515.
2) That I have practiced my profession as a geologist for 18
years.
3) That I am a graduate of Colorado State University with a
Bachelor of Science degree in Geology (1978) and a Masters of
Science degree in Economic Geology (1984) from the same
university.
4) That I consent to the use of this report dated December 1998,
entitled "Sand Springs Project, Churchill County, Nevada".
5) This report was prepared by myself from data collected during
the 1997 field season.
John A. Rice
/s/ John A. Rice
Consulting Geologist
<PAGE 2>
Table of Contents
SUMMARY 3
INTRODUCTION 3
LOCATION 4
HISTORY 4
WORK ACCOMPLISHED 6
REGIONAL GEOLOGY 8
LOCAL GEOLOGY 8
Stratigraphy 8
Structure 11
Alteration 12
Mineralization 13
RESULTS 13
Rock Chip Samples 13
Soil Samples 14
Magnetometer Survey 14
CONCLUSION AND RECOMMENDATIONS 14
REFERENCES 17
Figures
FIGURE 1 - LOCATION MAP 5
FIGURE 2 - SAMPLE LOCATION MAP 7
FIGURE 3 - GEOLOGIC MAP 9
FIGURE 4 - CROSS-SECTION 10
Appendices
APPENDIX 1 - ROCK CHIP ASSAYS 18
APPENDIX 2 - SOIL ASSAYS 19
Plates
PLATE 1 - GOLD SOIL GEOCHEM MAP 20
PLATE 2 - COPPER SOIL GEOCHEM MAP 21
PLATE 3 - MERCURY SOIL GEOCHEM MAP 22
<PAGE 3>
SUMMARY
The Sand Springs project is an early stage exploration
property located in the Sand Springs Mining District, of
Churchill County, Nevada. The district has seen a long history of
production starting in 1905 and continuing until the mid-1960's.
District wide production has been approximately 21,000 ounces
gold and 1,300,000 ounces silver.
Pegasus Gold Corporation had an exploration program on the
property in 1992-1993. Their program consisted of collecting 108
rock chip samples, cursory geologic mapping, and drilling 13
reverse circulation drill holes. They intersected anomalous gold
in one drill hole and anomalous copper in 2 other drill holes.
Pegasus never followed up these anomalies. Cordex Exploration
also explored the area briefly, though did not acquire it.
Miranda USA became interested in the property in September 1997.
Their program consisted of detailed geologic mapping, rock chip
and soil sampling, and conducting a ground magnetometer survey.
Lithologies existing at the Sand Springs property include a
Triassic limestone overlain by an interbedded unit of phyllite,
schist, and metaconglomerate. Overlying the metasediments are
Teritary ryholite tuffs and extensive basalt flows. The limestone
and metasediments are intruded by a Cretaceous diorite. At the
contact of the limestone and diorite, in the western part of the
property, there is a major north-northeast striking shear zone.
The shear zone cuts the diorite and limestone and to the south of
these units it cuts the overlying ryholite.
The Sand Springs project represents an opportunity of
discovering a skarn-hosted gold deposit near the contact of the
Triassic limestone and a Cretaceous diorite. In addition to the
skarn mineralization, there are numerous high-grade gold-bearing
quartz +/- tourmaline veins which cut the lower limestone unit
and the diorite. These discontinuous vein structures strike
north-northeast and dip steeply west. The limestone and diorite
that host these two styles of mineralization are located at the
site of a major north-northeast striking shear zone. Immediately
to the south of the limestone and diorite, the rocks are in fault
contact with an overlying Tertiary rhyolite. The rhyolite has
been downdropped a minimum of 400-500 feet (120-150 meters). This
block has been intersected by shearing but has not been cut by
north-northeast striking quartz +/- tourmaline veining.This
rhyolite block is also the host for at least one northwest
striking epithermal quartz vein structure. This vein is weakly
anomalous in gold but is strongly anomalous in mercury. This
northwest striking vein and the north-northeast striking shear
zone represents another target on the property.
INTRODUCTION
The Sand Springs property is an early-stage exploration
property in the Sand Springs Mining District. The Sand Springs
District includes the Summit King-Dan Tucker, Summit Queen, and
Twilight mines. The Sand Springs property lies approximately 2
miles (3.2 kms.) west of the Summit King mine. Gold was first
discovered in the area in 1905 at the Dan Tucker mine. Little
work was done on the property until 1912 when work on a 100 foot
shaft was
<PAGE 4>
initiated. Production started in 1919 (Vanderburg,
1940). Most of the production has come from the Summit Queen-Dan
Tucker mines. District wide production has been approximately
21,000 ounces. gold and 1,300,000 ounces. silver (Willden and
Speed, 1974). Some tungsten has been produced but the amount is
not known.
Limited scale production on the Summit King-Dan Tucker mines
is scheduled to begin in the summer of 1998 (Bill Campbell,
personal communication). A gentleman named John Wacker from
California is the operator/owner of the mine.
The majority of the field work and report preparation was
completed by John Rice, an independent geologist. The geophysical
survey was completed by Tom Carpenter, a consulting geophysicist,
and surveying was conducted by Grand River Exploration.
LOCATION
The Sand Springs property is located in the Stillwater Range
about 2 miles (3.2 kms.) west of Sand Springs Pass on U. S.
Highway 50 and 30 highway miles east of Fallon on U. S. 50 (48
kms.) in Churchill County, Nevada (Fig. 1). The property is
approximately one half mile (0.8 km.) north of the highway. The
property is located approximately 23 miles (37 kms.) north of the
Rawhide mine (1,600,000 ounces gold) and 38 miles (61 kms.)
south-southwest of Fondaway Canyon.
Eleven lode claims have been located and filed by Miranda
USA on land administered by the U. S. Bureau of Land Management.
The claims are named Dune 1-8, 22-24 and they are situated in
sections 3, 4, 9, and 10 of T16N and R32E.
HISTORY
The Sand Springs district has had a long history of
exploration and production. The following historical account was
taken from Arizona Geological Society's 1987 Walker Lane Report.
In 1905, two prospectors discovered vein mineralization
at the site of the Dan Tucker mine. Development on the
vein began in 1912 and production began in 1919. The
Martin Brothers, Co. leased the mine from the
prospectors. They initially produced 150 tons of ore
worth between $125-$300 per ton. The company explored
other east-west striking parallel vein structures that
contained rich cerargyrite ore. In 1924, the property
was acquired by Senator N. H. Getchell. In 1934, the
Dan Tucker mine was leased to Rosetta Mines Co. who
continued production and reportedly discovered a
"middle vein" of 9 foot (3 m) width located 1000 feet
(305 meters) east of the main shaft. There was no
recorded production from 1942-1947. After this time the
district saw intermittent
<PAGE 5>
FIGURE 1 - LOCATION MAP
<PAGE 6>
production from several mines until 1951. There is no
recorded production after 1952. Recent years has seen
many examinations and limited exploration for porphyry
copper in section 3, for tungsten along the southern
edge of the district associated with skarn
mineralization, and for precious metals along the
principal vein system.
WORK ACCOMPLISHED
Pegasus Gold Corporation had an exploration program in the
Sand Springs area in 1992-1993. Their program consisted of
collecting 108 rock chip samples with anomalous samples assaying
as high as 10,160 ppb (0.30 oz./t) gold and 9% Cu (Fig. 2).
Forty-two out of the 108 samples (38%) contained greater than 100
ppb gold and 26 of the 108 samples (24%) contained greater than
0.1% Cu. A ground magnetic survey consisting of 32.45 miles (52
kms.) line miles was completed, and 13 reverse circulation holes
were drilled for a total of 4,630 feet (1,410 meters). Pegasus'
exploration work was concentrated to the northeast of the area
that Miranda USA is working.
Pegasus' drilling found that the diorite intrusive
underlying the metasedimentary rocks is more widespread than
surface mapping indicated. The metasedimentary rocks were found
to be mainly a thin roof pendant on the diorite (Pegasus drill
report, 1993). Drill hole PSS-4-93 intersected 10 feet (3 meters)
of 0.15 ozs Au/t between 290-300 feet (88-91 meters) within high
temperature calc-silicate skarn and quartz microveining. Drill
holes PSS-12-93 and PSS-13-93 had anomalous Cu mineralization.
Hole PSS-12-93 encountered 30 feet (9 meters) of 0.73% Cu between
60-90 feet (18.3-27.4 meters) and PSS-13-93 encountered 30 feet
(9 meters) of 0.44% Cu between 200-230 feet (60-70 meters). Drill
holes PSS-12-93 and PSS-13-93 are approximately 600 feet (185
meters) apart, along a north-northeast trend, which is the main
trend of structures and mineralization in the area.
Pegasus Gold Corporation never followed up these drill hole
anomalies even though their drill report recommended further work
in the area should be conducted.
Cordex explored the Sand Springs area also but never
acquired the property. They collected 25 rock chip samples with
anomalous samples assaying as high as 31,722 ppb gold (0.93 ozs
Au/t). Fifteen of the 25 samples (60%) assayed greater than 100
ppb gold. Their high silver value was 142.8 ppm (4.2 ozs/t).
Cordex did not analyze for base metals.
Miranda USA became interested in the area when Larry
McIntosh brought it to their attention. Ed Chipp did a field
review of the area in September 1997 with Larry McIntosh and
recommended to Miranda USA that they conduct more detailed work
on the property. Detailed geologic mapping was completed along
with collecting 34 rock chip samples and collecting 242 soil
samples. In addition to the mapping and geochem sampling,
nineteen line miles (30 kms.) of ground magnetic survey were
completed. Lines were 4,200 feet (1,280 meters) long and oriented
N65W. Lines were 200 feet (61 meters) apart and station spacing
was 50 feet (15 meters). Field
<PAGE 7>
FIGURE 2 - SAMPLE LOCATION MAP
<PAGE 8>
work on the property was conducted during the months of November
and December of 1997.
REGIONAL GEOLOGY
The Stillwater Range trends northerly through the center of
Churchill County, from Sand Springs Summit on U. S. 50 into
Pershing County. The range contains several units of deformed
Mesozoic rocks separated by thrust faults and is the center of a
large complex of Cretaceous mafic igneous rocks and a succession
of volcanic and intrusive rocks of Cenozoic age (Willden and
Speed, 1974). Fold axes in the layered Cenozoic rocks trend
northward (Page 1965).
The principal rock units in the Sand Springs Range, the
continuation of the Stillwater Range south of the highway, are
volcanic sedimentary rocks of Triassic and Jurassic age,
Cretaceous granitic rocks, and Tertiary volcanic rocks. The Sand
Springs Range contains the largest exposed pluton in Churchill
County, a composite body of granodiorite and quartz monzonite
radiometrically dated at 76-80 m.y. (Nevada Bureau of Mines,
1964). Tertiary volcanic rocks overlie the intrusive complex in
the vicinity of Sand Springs Summit.
LOCAL GEOLOGY
Stratigraphy
Willden and Speed (1974) have assigned 4 map units to a
Triassic or Jurassic age based on stratigraphic position, fossil
content, and similarities to lithologies of known age. These map
units are: 1) volcaniclastic rocks and limestone; 2) hornfels,
phyllite, and schist; 3) limestone and marble and; 4) basaltic
tuffs. The first unit is known to be no older than Triassic.
Granitic rocks are primarily of Jurassic age with some minor
Tertiary-aged granitic rocks exposed on the east slope of the
Stillwater Range. Tertiary units consist of rhyolite tuffs to
welded tuffs that are overlain by younger basalts.
The above units represented on the Sand Springs property
include the unit 1 Triassic limestone, unit 2 phyllite and
schist, Jurassic rocks of diorite composition, Tertiary rhyolite
tuffs and basalt flows (Fig. 3). The unit 1 limestone forms the
lower most sedimentary rock exposed in the project area. The
limestone is light to medium gray, is medium to thick bedded, and
is locally marbleized adjacent to the intrusive diorite contact.
It crops out in an area approximately 1,600 feet (490 meters)
long in a north-northeast direction by a maximum of 800 feet (245
meters) in width. The stratigraphic thickness of limestone as
exposed at the Sand Springs property is approximately 225 feet
(70 meters). The limestone is bounded to the west and north by
diorite. Overlying the limestone are metasedimentary rocks
consisting of phyllite, biotite schist, and metaclastic
conglomerate (Fig. 4). In the lower part of the metasedimentary
section the principal rock is the quartz-muscovite phyllite,
which is a light gray to greenish gray rock that is interbedded
with a dark brown, fine to medium grained, quartz pebble
metaconglomerate. This metaconglomerate is schistose in
appearance, especially near shear structures. The biotite schist
<PAGE 9>
FIGURE 3 - GEOLOGIC MAP
<PAGE 10>
FIGURE 4 - CROSS SECTION MAP
<PAGE 11>
is most common in the upper part of the metasedimentary section
that occurs on the property. This rock is dark gray to black,
fine grained, and calcareous. The stratigraphic thickness of the
metasedimentary rocks is a minimum of 1800 feet (550 meters) as
exposed in the project area. The limestone and metasedimentary
units strike N10?E to N40?E and dip 35? to 40? E.
The diorite intrudes the metasedimentary rocks and is
presumed to be Jurassic to Cretaceous in age. It has not been
observed intruding the volcanic rocks. The diorite is dark gray
to dark greenish gray, coarse grained crystalline, and commonly
pyritized throughout the area.
Tertiary rhyolite tuffs and welded tuffs are widespread in
the western and southern part of the project area. Tuffs strike
easterly and dip shallowly to the north. Overlying the rhyolite
tuffs and capping the metasedimentary rocks locally are an
extensive layer of thick Tertiary basalts. The basalts primarily
occur in the western part of the project area and westward and
are post-mineral.
Structure
Mesozoic structures of Early and Middle Jurassic age in the
Stillwater Range are primarily folds and thrust faults oriented
along a west-northwest axial trend with a vertical to south dip
(Willden and Speed, 1974). These structures are in turn folded
and faulted by a younger tectonic episode that has a northerly
axial trend. Cretaceous age diorite intrusions in the project
area has deformed and metamorphosed the sedimentary sequence of
rocks and has made it difficult to follow any continuity of
structures.
In the Sand Springs project area the most apparent structure
is a north-northeast striking shear zone that cuts the limestone
and diorite intrusive along the western part of the property. The
shear zone can be followed for at least 2,200 feet (670 meters)
in length in these two rock units and is up to 600 feet (185
meters) wide. The shear zone is marked by abundant quartz veins
and quartz-tourmaline veins. The veins strike north-northeast and
dip steeply west 60? to 85?. The veins range in thickness from a
few inches to 2 feet (0.6 meter). The longest quartz ? tourmaline
vein zone can be found in the diorite along a ridge near the
limestone contact. This particular vein is approximately 600 feet
(185 meters) long and is 1 foot (.3 meter) thick. Most of the
quartz-tourmaline veins are discreet veins which can not be
followed for more than a few tens of feet. Veins can be inferred
to be more continuous due to the continuity of shear and fault
structures.
There is strong evidence that the shearing has continued to
the south-southwest into the rhyolite tuffs that bound the
limestone and diorite along their southern contact. The rhyolite
tuffs are strongly sheared but there are no quartz +/- tourmaline
veins filling any of the sheer structures.
Low-angle ductile shears related to emplacement of the
diorite intrusive body form in the
<PAGE 12>
overlying limestone unit. These shears are discontinuous and are
up 10 feet thick (3 meters). There are also an abundant amount of
west-northwest striking faults and joints throughout the project
area. In the southwestern part of the project there is an
epithermal vein that also strikes west-northwest. The contact
between the limestone and diorite with the rhyolite tuff to the
south is a major post-mineral fault. This fault strikes N60?W and
is covered by alluvium to the southeast and is covered by basalt
to the northwest. Mapping of the basalt capped hills to the west
of the project area indicates that displacement along the fault
could be in the range of 400-500 feet (120-150 meters). The
southern block is the downdropped block.
Alteration
Besides the apparent metamorphism of the sediments by the
emplacement of the Cretaceous diorite intrusive there is
alteration related to skarn mineralization. Skarn alteration
occurs primarily in the lower part of the limestone unit adjacent
to the diorite intrusion. Skarn-altered areas are narrow and
elongated zones that strike north-northeast and dip easterly
which mimics the attitude of the limestone beds. Like the quartz
+/- tourmaline veins, the skarn altered zones are discontinuous
but can be followed up to 300 feet (90 meters) in length. Skarn
minerals include diopside, epidote, and garnet. The skarn is also
pyritic throughout the entire area. Skarn is locally anomalous in
gold.
Strong oxidation along faults and shears is common
throughout the project area and well beyond its limits. Anomalous
gold values are often associated with gossan deposits which occur
locally on north-northeast striking structures and along ductile
shears.
Silicification is a minor alteration component of the
mineralizing system. The gossanous zones are often variably
silicified. Wallrock immediately adjacent to the quartz-
tourmaline veins is also silicified. No significant jasperoid
bodies were found within the limestone. Some strong
silicification, but minor in extent, was associated with the
northwest striking quartz vein found in the rhyolite in the
southwestern part of the area.
The rhyolites are bleached and argillized throughout the
area in varying amounts. The pervasive and widespread character
of argillization may be an indication of the size and intensity
of the mineralizing system. In the project area, the rhyolite
tuffs crop out in all corners of the claim block. The rhyolites
also extend to the west, far beyond the limits of the claim
block. All of them are argillized to some extent. The Tertiary
rhyolite tuffaceous rocks that occur adjacent to the diorite,
either west or south, are strongly argillized. Farther south, in
the southwestern part of the project in the vicinity of the
northwest-striking vein there are many northwest and north-
northeast striking faults and fractures that are strongly
argillized while the wallrock is only weakly altered to not
altered at all.
The widespread extent of argillic alteration and oxidation
strongly suggests that the mineralizing system is large. The
strongly-argillized faults and fractures of the southwestern part
<PAGE 13>
of the area indicates that mineralization might be deep, but does
occur as reflected in rock chip geochemistry being anomalous in
gold and mercury.
Mineralization
Gold mineralization is associated with quartz +/- tourmaline
veins and skarn mineralization. As mentioned above the most
prominent quartz +/- tourmaline vein is approximately 600 feet
(185 meters) long and 1 foot (0.3 meters) thick. Other veins
range in thickness from a few inches to 2 feet (0.6 meters) thick
but are considerably shorter. The quartz +/- tourmaline veins are
anomalous in gold and weakly anomalous in mercury but not in
silver.
Gold mineralization in skarn is associated with pyrite-
bearing altered rock. Skarn mineralization occurs in the lower
parts of the limestone that is adjacent to the diorite as
previously mentioned. Gold anomalies in the skarn are weaker than
in the quartz +/- tourmaline veins. In the northwestern part of
the property the quartz-tourmaline veins and skarn mineralization
represent the primary gold-bearing features.
In the southwestern part of the area mineralization is
represented by a small epithermal quartz vein that is weakly
anomalous in gold but strongly anomalous in mercury.
RESULTS
Rock Chip Samples
Miranda collected 34 rock chip samples during their studies
of the area. The highest gold assays were in samples collected
from the quartz +/- tourmaline veins. Assay results from the
quartz +/- tourmaline veins ranged from 7 ppb Au to a high of
7,367 ppb Au (0.21ozs Au/t). Six of the 13 (46%)quartz +/-
tourmaline veins contained greater than 1,000 ppb gold. The
highest gold value in skarn was 2,211 ppb. Two out of 7 (28%)
skarn samples contained greater than 500 ppb gold. Two of the
epithermal quartz veins in the southwestern part of the property
contained 272 ppb Au and 296 ppb Au but were strongly anomalous
in mercury containing 14.994 ppm and 34.940 ppm respectively. The
highest copper value of 1.2 % came from skarn. All together, 18
of the 34 samples (53%) contained greater than 100 ppb gold and 4
of the 34 samples (12%) contained greater than 0.1% Cu.
The quartz +/- tourmaline veins contain the highest gold
values and the skarn contains moderate gold anomalies. Neither of
these areas had strongly anomalous mercury. Mercury was most
anomalous in the volcanic hosted epithermal zone to the
southwest.
<PAGE 14>
Soil Samples
Gold anomalies in the soil samples were confined to the soil
lines that were over the metasedimentary rocks and the diorite
which were the northern 2 lines (10600N, 11200N). These 2 lines
had the highest copper and arsenic anomalies. Gold, copper, and
arsenic anomalies ranged from 52-540 ppb, 112-1835 ppm, and 102-
1351ppm respectively. Contours of these elements trend northeast
(Plates 1, 2, and 3). Mercury exhibits the best anomalies over
the entire soil grid. Highs are between 0.5-5 ppm and when
contoured they form a strong north-northeast trending mercury
zone that correlates with the shear zone that strikes the same
direction.
Magnetometer Survey
A magnetometer survey was conducted during December 1997. A
total of 19 line miles (30 kms.) was surveyed. The lines were
oriented N65W and were spaced 200 feet (60 meters) apart. Station
spacing on the lines was 50 feet (15 meters).
The magnetometer survey primarily picked-up the post-mineral
basalt flows that cover parts of the rhyolite tuffs and the
metasediments throughout the project area. In particular, neither
the diorite intrusive or the skarn alteration areas were
magnetically anomalous. They had no more than a 60 gamma increase
over the surrounding area. The major northwest striking fault
that separates the diorite and limestone from the rholite tuff to
the south shows as a weak magnetic low. Associated with this low
is a high soil mercury anomaly. There is also a weak low on the
southern part of the property which strikes northwest. There is
also a mercury anomaly associated with this magnetic low.
Overall, the results of the magnetic survey show none to
weak responses over rocks that on the surface are mineralized and
altered. It would be hard to pick out targets based on the
magnetics alone.
CONCLUSION AND RECOMMENDATIONS
Evaluation of the Sand Springs property has resulted in the
discovery of two gold-bearing areas in the western and
southwestern part of the claim block. In the western area, high-
grade gold is hosted in the quartz +/- tourmaline veins hosted in
the diorite and limestone and skarn mineralized zones in the
limestone adjacent to the diorite. The target for this style of
mineralization would be the skarn mineralization in the limestone
at the diorite contact. This target is a near surface target and
could be tested with drill holes of less than 300 feet (90
meters).
<PAGE 15>
The southwestern target would be along the southern trend of
the shear zone under the rhyolite tuff cover. This target would
extend from the northwest striking fault contact of the diorite
and limestone with the rhyolite to the south near the
intersection of the northwest striking epithermal quartz vein.
This target has low gold in rock chip samples but has strongly
anomalous mercury in rock and soil. The low gold geochem anomaly
and the downdropped displacement along the northwest fault
suggests that mineralized rock is deeper and that drill testing
this target will require drilling in excess of 500 feet (150
meters).
The copper anomalies intersected in Pegasus? drill holes
PSS-12-93 and PSS-13-93 were not followed-up. The intercepts in
the two holes are along a north-northeast strike and it would be
a straight forward proposition to test this anomalous zone along
trend.
Skarn mineralization has been previously tested by drilling,
but only 2 drill holes were located in what appears to be the
best target of the area. One of those holes (PSS-94-4)
intersected 10 feet (3 meters) of 0.14 ounces Au/ton. This
mineralized intercept was never followed up. The second drill
hole (PSS-94-1) did not intersect any significant mineralization.
This leaves the skarn mineralized target and the quartz +/-
tourmaline vein zone open for discovery. The rhyolite tuff
covered target has never been drill tested and it is likely that
it has never been explored.
Positive results from Miranda's exploration program suggests
that there is evidence of a skarn-hosted gold deposit on the
property and that untested drill targets remain and need to be
tested. The following table summarizes the costs involved in a
three-phased trench and drill program at Sand Springs. The first
phase involves a trenching program that will be used to locate
and justify a two phased drilling program.
Proposed Work Program
Cost/unit Total Description
Phase I
Geologist 10 days $300 $3,000 Permitting and the work
Expenses 6 days $ 80 $ 500 Room and Board
6 days $ 50 $ 300
Backhoe $3,240 Trenches
Assaying 50 samples $ 25 $1,300
Reporting $ 700 Final Report
Contingency $ 900 Road reclaim, revegetation
Total Phase I $9,940
------
<PAGE 16>
Cost/unit Total Description
Phase II
Geologist 10 days $300 $3,000 Drill site location, supervision
Permitting 1 day $300 $ 300 BLM permitting
Road Work 2 day $1,200 $2,400 Road consturction, reclamation
Drilling 3000 feet $ 10 $30,000 Drilling
Assays 600 samples $ 10 $ 6,000 Au, Ag, Cu
Land/Claim $ 1,800 Maintenance fee
Reporting 5 days $250 $ 1,250 Final report
-------
Sub-Total $44,750.00
Contingency 5% $ 2,237.50
----------
Total Phase II $46,987.50
-----------
- -------------------------------------------------------------------------
Phase III
Geologist 20 days $300 $ 6,000 Drill Supervision
Drilling 6,000 feet $ 10 $60,000 Drilling
Assays 1,200 samples $ 10 $12,000 Au, Ag, Cu
Reporting 5 days $250 $ 1,250 Final Report
Reclamation 2 days $1,200 $ 2,400 Road reclaim, revegetation
-------
Sub-Total $81,650.00
Contingency 5% $ 4,082.50
----------
Total Phase III $85,732.50
----------
- -------------------------------------------------------------------------
<PAGE 17>
REFERENCES
Arizona Geological Society, 1987, Walker Lane Report
Campbell, Bill, 1997, Security Guard at Summit King Mine
Page, B. M., 1965, Preliminary geologic map of part of the
Stillwater Range, Churchill County, Nevada: Nevada Bureau
of Mines, Map 28
Pegasus Gold Corporation, 1993, Sand Springs Project Drill
Summary
Vanderburg, W. O., 1940, Reconnaissance of mining districts in
Churchill County, Nevada: U. S. Bureau of Mines, Information
Circular 7093
Willden, Ronald, and Speed, Robert C., 1974, Geology and Mineral
Deposits of Churchill County, Nevada: Nevada Bureau of Mines
and Geology: Bulletin 83
APPENDIX A - ROCK CHIP ASSAYS
APPENDIX B - SOIL ASSAYS
PLATE 1 - GOLD SOIL GEOCHEM MAP
PLATE 2 - COPPER SOIL GEOCHEM MAP
PLATE 3 - MERCURY SOIL GEOCHEM MAP
JOHN A. RICE
P.O. Box 20074
Reno, Nevada
89515
EXPLORE TECHNOLOGIES, INC.
Vancouver, British Columbia
CONSENT OF GEOLOGICAL CONSULTANT
I hereby consent to the inclusion of my report dated December 1998
entitled "Sand Springs Project, Churchill County, Nevada" with the
Form 10-SB Registration Statement to be filed by Explore
Technologies, Inc. with the United States Securities and Exchange
Commission.
Dated the 24TH day of February, 1999
/s/ John A. Rice
John A. Rice,
Consulting Geologist
<PAGE 1>
