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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
COPPER VALLEY MINERALS LTD.
(Exact name of Company as specified in its charter)
NEVADA 98-0207554
- ------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 1880, 1055 West Georgia Street
Vancouver, British Columbia, Canada V6E 3P3
- ------------------------------------ ------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 604-687-7962
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
- ------------------- ------------------------------
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Shares, par value $0.001 per share
(Title of class)
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TABLE OF CONTENTS
Page
COVER PAGE ............................................. 1
TABLE OF CONTENTS ...................................... 2
PART I ................................................. 3
DESCRIPTION OF BUSINESS ........................... 3
DESCRIPTION OF PROPERTY ........................... 12
DIRECTORS, EXECUTIVE OFFICERS
AND SIGNIFICANT EMPLOYEES ....................... 12
REMUNERATION OF DIRECTORS AND OFFICERS ............ 13
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN
SECURITYHOLDERS ................................. 14
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN
TRANSACTIONS .................................... 14
DESCRIPTION OF SECURITIES ......................... 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 ............................................... 19
FINANCIAL STATEMENTS ................................... 19A
PART III ............................................... 20
INDEX TO EXHIBITS ...................................... 20
SIGNATURES ............................................. 21
2
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PART I
The issuer has elected to follow Form 10-SB, Disclosure
Alternative 2.
Item 6. Description of Business
Organization
- ------------
Copper Valley Minerals Ltd. (the "Company") was organized as a
Nevada corporation on June 11, 1998. The name of the Company
was changed from "Recon Rubber Corporation" to "Copper Valley
Minerals Ltd." by the filing of a Certificate of Amendment of
the Articles of Incorporation with the Nevada Secretary of State
effective July 1, 1999.
Business
- --------
The Company is a natural resource company engaged in the acquisition,
exploration and development of mineral properties. The Company has an
option to acquire an interest in the properties described below under the
heading "New York Canyon Property Option Agreement". The Company intends
to carry out exploration work on the New York Canyon Property in order to
ascertain whether the New York Canyon Property possesses commercially
exploitable quantities of copper and ancillary precious minerals,
including gold and silver. There can be no assurance that a commercially
exploitable mineral deposit, or reserve, exists in the New York Canyon
Property until appropriate exploratory work is done and an economic
evaluation based on such work concludes economic feasibility.
New York Canyon Property Option Agreement
- -----------------------------------------
The Company has acquired an option (the "Option") to acquire a 51%
interest in certain mineral claims situated in the State of Nevada (the
"New York Canyon Property"). The Company acquired the Option pursuant to
an agreement dated March 31, 1999 between the Company, Kleinebar
Resources Ltd. ("Kleinebar"), Bill Henderson and Kurt Schendel
(Kleinebar, Bill Henderson and Kurt Schendel are referred to as the
"Optionors"). The consideration paid by the Company to the Optionor for
the grant of the Option was $1,000 US.
The Option is exercisable by the Company completing the following
payments to the Optionors and incurring the following required
exploration expenditures on the New York Canyon Property:
1. paying to the Optionors an aggregate of $300,000 in accordance with
the following schedule:
1. $50,000 on or before March 31, 2000;
2. $75,000 on or before March 31, 2001;
3. $75,000 on or before March 31, 2002;
4. $100,000 on or before March 31, 2003; and
2. incurring an aggregate of $1,009,000 of property exploration
expenditures on the New York Canyon Property within the following
periods:
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1. $9,000 US on or before April 1, 2000;
2. $150,000 US on or before April 1, 2001;
3. $150,000 US on or before April 1, 2002;
4. $240,000 US on or before April 1, 2003;
5. $450,000 US on or before April 1, 2004.
In the event that the Company spends, in any of the above periods,
less than the required sum, the Company may, at its option, pay to
the Optionors the difference between the amount actually spent and
the required exploration expenditure in full satisfaction of the
exploration expenditures to be incurred. In the event that the
Company spends, in any period, more than the required sum, then the
excess will be carried forward and applied to the required
exploration expenditures to be incurred in subsequent periods.
If the Company fails to make any required payment or incur any
required exploration expenditure, the Option will terminate and
the Company will have no further rights to the New York Canyon
Property.
Property exploration expenditures include all costs of acquisition
and maintenance of the property, all expenditures on the
exploration and development of the property and all other costs
and expenses of whatsoever kind or nature, including those of a
capital nature, incurred or chargeable with respect to the
exploration of the property. In addition, until the Company shall
have secured a 51% interest in the New York Canyon Property,
the Company is obligated to maintain in good standing all mineral
claims comprising the New York Canyon Property by the doing and
filing of assessment work or making of payments in lieu thereof,
by the payment of taxes and rentals, and the performance of all
other actions which may be necessary in that regard and in order
to keep the mineral claims free and clear of all liens and other
charges. The Company has made all payments necessary to maintain
the minerals claims for the subsequent twelve-month period.
Upon the Company acquiring a 51% interest in the New York Canyon
Property by exercise of the Option, the Company and the Optionors
will enter into a joint venture for the purpose of further
exploring and developing and, if economically and politically feasible,
constructing and operating a mine on the New York Canyon Property.
New York Canyon Property
- ------------------------
The New York Canyon Property is comprised of thirty seven (37) mineral
claims located in the Sante Fe mining district in Mineral County in the
State of Nevada (the "Mineral Claims"). The Mineral Claims consist of
twenty (20) continuous claims centered over what is locally referred to
as the "Long Shot Ridge" and seventeen (17) contiguous claims centered
over what is locally referred to as the "Copper Queen" mineral
occurrence.
The Mineral Claims were staked by Kleinebar in October, 1998. The
Mineral Claims and their locations are summarized as follows:
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- -----------------------------------------------------------
CLAIM NAME DATE LOCATED Location # of
Clms
- -----------------------------------------------------------
NYC 1,3,5,7, October 17, 1998 Sec 33,34 7
9,11,13 T8N R35E
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NYC 2,4,6,8, October 17, 1998 Sec 33, 7
10,12,14 T8N R35E
- -----------------------------------------------------------
NYC 35 October 17, 1998 Sec 4, 1
T7N R35E
- -----------------------------------------------------------
NYC 36 October 17, 1998 Sec 3, 1
T7N R35E
- -----------------------------------------------------------
NYC 37 October 17, 1998 Sec 33, 1
T8N R35E
- -----------------------------------------------------------
NYC 38 October 17, 1998 Sec 34, 1
T8N R35E
- -----------------------------------------------------------
NYC 39,40 October 17, 1998 Sec 34, 2
T8N R35E
- -----------------------------------------------------------
20
- -----------------------------------------------------------
- -----------------------------------------------------------
CLAIM NAME DATE LOCATED Location # of
Clms
- -----------------------------------------------------------
NYC 15-18 October 16, 1998 Sec 6 4
T7N R35E
- -----------------------------------------------------------
NYC 19-31 October 16, 1998 SEC 31 13
T8N R35E
- -----------------------------------------------------------
17
- -----------------------------------------------------------
The New York Canyon Property is located in the southeastern
portion of Mineral County, Nevada, thirty miles east of the
county seat of Hawthorne. Access to the Mineral Claims is
via Highway 95 from Hawthorne to Luning. From Luning, a seven
(7) mile gravely country road provides access to the New York
Canyon Property.
Geological Report
- -----------------
The Company has obtained a geological report on the New York
Canyon Property prepared by Mr. Wes C. Hanson, Professional
Geologist of 12161-228 Street, Maple Ridge, British Columbia,
Canada (the "Geological Report"). The Geological Report is
attached hereto as Exhibit 6. The Geological Report summarizes
the exploration history of the New York Canyon Property, the
regional geology of the New York Canyon Property and provides
conclusions and recommendations for a work program on the New
York Canyon Property. These results of the Geological Report
are summarized below.
A copy of the Geological Report is attached to this Registration
Statement as an Exhibit. The information provided in this
Registration Statement with respect to the Geological Report is
qualified in its entirety by reference to the complete text of
this report.
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Exploration History of the New York Canyon Property
- ---------------------------------------------------
The Geological Report states that geological exploration in the
vicinity of the New York Canyon Property commenced in the 1870's
with the discovery of the Santa Fe Silver Mine in the Santa Fe
mining district. This discovery led to silver production from a
number of other silver, silver-lead and silver-copper deposits in
the district. The discovery of significant copper deposits,
identified around 1893, saw mining activity focus on the large
copper deposits in the area. These deposits, mined via short
tunnels and open cuts, superceded the small silver mining
operations scattered throughout the area. The Geological Report
states that commercial copper production in the Santa Fe mining
district was achieved from 1906 to 1935.
Modern exploration of the area began in 1964 and continued until
1994. The exploration during this period is summarized in the
Geological Report. The area has seen little exploration since
1994 due to poor copper prices. The New York Canyon Property
became available for staking in September, 1998 due to the
failure of the previous owner to pay maintenance fees. The New
York Canyon Property was staked by Kleinebar at this time.
New York Canyon Property Geology
- --------------------------------
The geology of the New York Canyon Property is summarized in the
Geological Report. The Geological Report identifies copper as the
principal economic mineral in the area of the New York Canyon Property.
The Geological Report concludes that the New York Canyon Property has
significant potential for copper resources. In particular, the Long Shot
Ridge deposit appears to be amenable to processing copper ore. The
remainder of the New York Canyon Property offers good sulphide potential.
The Geological Report also concluded that while it is unlikely that a
"stand alone" gold or silver deposit exists, there is good potential to
enhance the overall net present value of any existing copper resources
with gold and/or silver mineralization. The potential for the property
to host significant gold and silver content is based on the following
observations:
1. Silver production was realized from this district and from operating
mines on the property in the past;
2. Anomalous gold and silver values have been identified from surface
rock sampling programs;
3. The Santa Fe Gold Mine operated by Homestake lies approximately 5
miles south-southeast of the Kleinebar claims.
4. The structural, geological and chemical conditions that caused the
skarnification and deposited low grade copper enrichment, are also
favorable conditions for the deposition of gold and silver
mineralization.
5. With the exception of a limited number of surface (and drill
samples), the property remains largely untested for precious metal
potential.
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Notwithstanding these conclusions, it should be noted that no
assurance can be given that there will be sufficient quantities
of gold, silver or other minerals to justify commercial mining
of the Property.
Conclusions and Recommendations of the Geological Report
The author of the Geological Report concluded that the New York
Canyon Property offers an excellent opportunity for both improving
the existing copper resource and developing additional value from
gold and/or silver mineralization.
The New York Canyon Property has been affected by favorable
geological conditions for copper, gold and silver deposition. The
claims remain largely untested for gold and silver mineralization,
even though historic information indicates anomalous gold and
silver values from surface rock chip samples.
The Geological Report recommended proceeding with a limited
exploration program proposed by Kleinebar, as described below.
In particular, the Geological Report recommended proceeding with
the collection of an additional 150 samples in order to further
determine the potential for gold and silver associated with
the copper mineralization on the property.
The limited exploration program proposed by Kleinebar is a one
phase geological exploration program summarized as follows:
Proposed Year 1 Budget - Work Program
- -------------------------------------
Description Quantity Amount
- ------------ -------- ------
Geological Mapping @ $325/day 1 x 3 days $975.00
Geo-chemical Samplers @ $160/day 1 x 3 days $480.00
Room & Board for Above @ $100/day 2 x 3 days $600.00
Lab Analysis @ $15.00/sample 150 samples $2,250.00
Car Rental & Gas @ $125/day 3 days $375.00
Travel - Airfare 1 x $400 $400.00
Miscellaneous $90.00
---------
TOTAL: $5,170.00
=========
Company's Plan of Operation
- ---------------------------
The Company has determined to proceed with the limited exploration
program on the New York Canyon Property as recommended by the
Geological Report. The Company has raised sufficient funds from
recent sales of its securities, as set forth in Item 4 of Part II
of this Registration Statement, to proceed with this limited
exploration program. The Company will assess whether to
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proceed with further exploration programs upon completion of the
limited exploration program and an evaluation of the results of
the limited exploration program.
The Company had cash on hand in the amount of $41,000 as of
August 15, 1999. The Company believes that these cash reserves
are sufficient to enable the Company to complete Phase One of
the exploration program. The Company believes that its cash
reserves are also sufficient to meet its obligations for the
next twelve month period to C.H.M. Consulting Inc. under the
Management Agreement, as described below, and to pay for the
legal and accounting expense of complying with its obligations
as a reporting issuer under the Securities Exchange Act of 1934,
in addition to the cost of completing Phase One of the
exploration program.
The Company will require additional funding in the event that
the Company determines to proceed with further exploration upon
reviewing the results of Phase One of the exploration program.
The Company anticipates that the cost of any additional
exploration program is in excess of the projected cash reserves
of the Company upon completion of Phase One of the exploration
program. The Company anticipates that additional funding will
be in the form of equity financing from the sale of the Company's
common stock. There is no assurance that the Company will be
able to achieve additional sales of its common stock sufficient
to fund additional phases of the exploration program. The Company
believes that debt financing will not be an alternative for
funding an additional exploration program. The Company does not
have any arrangements in place for future equity financing of the
Company.
If the Company does not secure additional financing, the Company
will not be able to complete any additional exploration programs
or complete the required payments to Kleinebar or the required
exploration expenditures under the Option. The Company will be
required to abandon the Option in the event that the Company is
unable to achieve sufficient financing as required to complete
the exploration expenditures on the New York Canyon Property or
complete the required payments to Kleinebar. The Company will
consider bringing in a joint venture partner for the New York
Canyon Property if the Company is unable to achieve sufficient
funding by itself to proceed with the required exploration
expenditures and the Company does not want to abandon the New
York Canyon Property. The Company will pursue acquiring interests
in alternate mineral properties in the event of termination of
the Option due to a failure to incur the required exploration
expenditures.
Management Agreement
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The Company has entered into a management agreement dated April 1,
1999 with C.H.M. Consulting Inc., a company controlled by
J. Stephen Barley, President of the Company, whereby C.H.M.
Consulting Inc. has agreed to provide management and
administration services to the Company for a fee of $750 US per
month for a one-year term commencing April 1, 1999 (the
"Management Agreement"). The services include the management
services of Mr. Barley, reception, secretarial services,
accounting services, investor relations and general office
services.
A copy of the Management Agreement is attached to this
Registration Statement as an Exhibit. The information provided
in this Registration Statement with respect to the Management
Agreement is qualified in its entirety by reference to the
complete text of that agreement.
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Competition and Marketing
- -------------------------
The mining industry, in general, is intensely competitive. There
can be no assurance that even if commercial quantities of ore
are discovered, a ready market will exist for its sale. 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 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 United States generally and
in the State of Nevada, specifically. 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.
During the exploration phase of the New York Canyon Property,
the Company will be subject to regulation by the Bureau of Land
Management, a branch of the US Department of the Interior. The
Company has budgeted for regulatory compliance costs in the
proposed work program recommended by the Geological Report.
The Company will have to sustain the cost of reclamation and
environmental mediation for all exploration (and development)
work undertaken. The amount of these costs is not known at this
time as the Company does not know the extent of the exploration
program it will undertake, beyond completion of the recommended
work program, or if it will enter into production on the New York
Canyon Property. Because there is presently no information on the
size, tenor, or quality of any resource or reserve, it is
impossible to assess the impact of any capital expenditures on the
Company, its earnings or competitive position in the event a
potentially-economic deposit is discovered.
If the Company enters the production phase, the cost of complying
with permit and regulatory environment laws will be greater because
the impact on the project area is greater. Permits and regulations
will control all aspects of the production program if the project
continues to that stage. Examples of regulatory requirements
include:
* Water discharge will have to meet drinking water standards (State
Water Quality Control Board);
* Dust generation will have to be minimal or otherwise re-mediated
(State Air Quality Control Board);
* Dumping of material on the surface will have to be re-contoured and
re-vegetated with natural vegetation (Bureau of Land Management);
* An assessment of all material to be left on the surface will need to
be environmentally benign (Bureau of Land Management);
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* Ground water will have to be monitored for any potential
contaminants (State Water Quality Control Board);
* The socio-economic impact of the project will have to be evaluated
and if deemed negative, will have to be re-mediated (County
Agencies); and
* There will have to be an impact report of the work on the local
fauna and flora including a study of potentially endangered species
(Bureau of Land Management).
Exploration Risk
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Exploration for minerals is a speculative venture necessarily
involving substantial risk. There is no 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.
The Company cannot give any assurance as to what would be
considered a "commercial quantity" of ore for the New York Canyon
Property. A "commercial quantity" of ore is a quantity of ore
which is sufficient to economically justify commercial
exploitation. In determining whether a body of ore economically
justifies exploitation, the Company will assess those factors
which impact on the economics of production of the New York
Canyon Property, including prevailing mineral prices, the
concentration of minerals within the ore, cost of mining and
production, costs of money, costs of environmental compliance
and general economic conditions.
No Known Bodies of Ore
- ----------------------
There are no known bodies of ore on the Company's optioned
property. 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 optioned property 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.
Subsidiaries
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The Company has no subsidiaries.
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Employees
- ---------
The Company has no paid or full time employees, other than
Mr. J. Stephen Barley, President, Secretary and Treasurer of
the Company. The Company conducts its business through agreements
with consultants and arms-length third parties. The only officer
of the Company, J. Stephen Barley, provides his services on a
part-time basis as required for the business of the Company
pursuant to the Management Agreement. Mr. Barley presently commits
approximately 15% of his business time to the business of the
Company. C.H.M. Consulting Inc., a company controlled by Mr.
Barley, is paid a management fee of $750 per month pursuant to
the Management Agreement for these services.
Patents and Trademarks
- ----------------------
The Company does not own, either legally or beneficially, any
patent or trademark.
YEAR 2000 RISK
- --------------
Background
Computer systems, software packages, and microprocessor dependent
equipment may cease to function or generate erroneous data when
the Year 2000 arrives. The problem affects those systems or
products that are programmed to accept a two-digit code in date
code fields. To correctly identify the Year 2000, a four-digit
date code field will be required to be what is commonly termed
"Year 2000 compliant."
Readiness
The Company has completed an assessment of all internal systems
and operations to determine Year 2000 compliance. The Company
does not own any computer hardware or license any computer
software in its operations as a geological exploration company.
As such, the Company does not anticipate any material adverse
operational issues to arise from the Year 2000 problem affecting
internal systems and operations.
The Company has investigated the Year 2000 compliance of all
computer hardware and computer software used by the Company's
consultants in the Company's business operations. The Company
has relied upon the verbal representations of each of its
consultants that third party software used by the consultant is
Year 2000 compliant. The Company has relied upon verbal
representations by consultants that all computer hardware
purchased is Year 2000 compliant. The Company cannot give any
assurance that all computer hardware and software used by its
consultants will be Year 2000 compliant. Accordingly, there is
no assurance that the Company will not be affected by Year 2000
problems arising from problems with the Year 2000 problems
experienced by its consultants.
Risks
The Company may realize exposure and risk if the systems for which
it is dependent upon to conduct day-to-day operations are not year
2000 compliant. The Company's worst case scenario would be the
loss of data regarding its property and business operations and
the inability of its
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consultants to provide consultant services
to the Company until such time as computer hardware and software
was upgraded.
Estimated Year 2000 Costs
The Company estimates that its total internal cost for ensuring
Year 2000 compliance for all internal systems to date to be less
than $5,000. The Company anticipates incurring internal costs of
less than $10,000 in completing its Year 2000 compliance plan.
The Company has not incurred any external cost in ensuring Year
2000 compliance in view of the fact that the Company has only
recently commenced operations and has relied upon representations
of its consultants as to Year 2000 compliance.
Contingency Planning
The Company's contingency plan consists of a back-up of all
computer databases and documentation.
Item 7. Description of Property
The Company has an option to acquire a 51% interest in the New
York Canyon Property, as described in detail in Item 6 of Part
I of this Registration Statement under "New York Canyon Property
Option Agreement". The Company does not own or lease any property
other than its option to acquire an interest in the New York
Canyon Property.
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 Age Office Term of Office
- ---- --- ------ --------------
J. Stephen Barley 43 President/Sec./Treas./ One year
Director
Geoffrey N. Goodall 38 Director One year
Mr. J. Stephen Barley is a director and is President of the
Company. Mr. Barley received his Bachelor of Commerce degree
from the Mount Allison University in New Brunswick, Canada in
1979. He received his law degree from Dalhousie University in
Nova Scotia, Canada in 1982. Mr. Barley practiced as a lawyer
with Casey & O'Neill and successor firms from 1984 to 1991.
Mr. Barley practiced as a lawyer with J. Stephen Barley Law
Corporation from 1992 to 1997. Mr. Barley specialized in the
areas of corporate and securities law during the time of his
private practice as a lawyer with Casey & O'Neill and J. Stephen
Barley Law Corporation. Mr. Barley's clients included a number
of publicly traded companies involved in the business of mineral
exploration. Mr. Barley has been involved as a corporate finance
consultant and as a director and investor in
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several private business ventures since 1997. Mr. Barley is a
member in good standing of the Law Society of British Columbia
and the Law Society of Alberta.
Mr. Geoffrey N. Goodall is a director of the Company. Mr.
Goodall received his Bachelor of Science, Geology, from the
University of British Columbia in 1984. Mr. Goodall is a member
of the Association of Professional Engineers and Geoscientists
of British Columbia and is a fellow of the Geological Association
of Canada. Mr. Goodall worked as a geologist with Fox Geological
Services Inc. of Vancouver, British Columbia, Canada from May,
1984 to May, 1997. Mr. Goodall's responsibilities as a geologist
with Fox Geological Services Inc. increased throughout this period
from conducting geological field surveys to senior geologist in
charge of project management. Mr. Goodall's experience covers all
aspects of mineral exploration from concept design and
implementation of reconnaissance exploration to detailed drilling
and preliminary ore reserve calculations. Mr. Goodall was
Vice-President, Exploration of Leigh Resources Corporation of
Vancouver, British Columbia, Canada from June, 1997 to September,
1998. Leigh Resources Corporation is a public company, the shares
of which are traded on the Vancouver Stock Exchange. Mr. Goodall
was responsible for the design, implementation, and supervision of
mineral exploration projects for Leigh Resources. Mr. Goodall
worked with Homestake Mining Inc. of San Francisco, California
from September to December, 1998. Mr. Goodall's work with
Homestake was as a contract geologist and duties included a
review of exploration programs and operations of Homestake
Mining in Bulgaria.
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 period from
commencement of the Company's business on April 1, 1999 to July 31, 1999
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 anticipated to be paid to any
such officers other than the cash compensation set forth below.
- -------------------------------------------------------------------
Summary Compensation Table
- -------------------------------------------------------------------
Name Position Year Management Fee
- ---- -------- ---- --------------
J. Stephen Barley President 1999 $3,000
- ------------------------------------------------------------------
The services of Mr. Barley are provided pursuant to the Management
Agreement with C.H.M. Consulting Inc. See Item 6 - "Description of
Business - Management Agreement".
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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:
Name and Address Amount of Percent
Title of Class of Beneficial Owner Beneficial Ownership of Class
- -------------- ------------------- -------------------- --------
Common Stock J. Stephen Barley 1,200,000 59.0%
2060 Gisby Street
West Vancouver, BC
Canada V7V 4N3
Common Stock Geoffrey N. Goodall NIL 0.0%
1315 Arborlynn Drive
North Vancouver, BC
Canada V7J 2V6
Common Stock Directors and Officers 1,200,000 59.0%
As a Group
Item 11. Interest of Management and Others in Certain Transactions
Except as set forth below, 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.
The Company has entered into the Management Agreement with C.H.M.
Consulting Inc., a company controlled by Mr. J. Stephen Barley,
President of the Company. Under the Management Agreement, the
Company has agreed to pay to C.H.M. Consulting Inc. a management
fee of $750 per month for a one year term in consideration for
management and administration services to be provided by C.H.M.
Consulting Inc. to the Company. See Item 6 of Part I of this
Registration Statement under "Management Agreement".
Item 12. Description of Securities
Common Stock
The Company has authorized 100,000,000 common shares par value $0.001 of
Common Stock, of which 2,033,000 are currently outstanding.
14
<Page >
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 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.
15
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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 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 Company of Las Vegas, Nevada is the transfer
agent for the Shares.
15
<Page >
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-seven (47) registered shareholders in the Company. There
are no dividend restrictions in the Company.
None of the holders of the Company's common shares have any right
to require the Company to register its common shares pursuant
to the Securities Act of 1933.
The issuance of dividends to shareholders is at the discretion
of the board of directors of the Company. The Company has not
issued any dividends since its inception and does not have plans
to do so in the foreseeable future.
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 June, 1998.
Item 4. Recent Sales of Unregistered Securities
The Company completed an offering of 1,200,000 common shares at
a price of $0.005 per share on April 1, 1999 pursuant to Section
4(2) of the Securities Act of 1933. All of these shares were
sold to J. Stephen Barley, the President, Secretary/ Treasurer
and Director of the Company, and are "restricted shares" within
the meaning of the Securities Act of 1933.
The Company completed an offering of 800,000 common shares at
a price of $0.05 per share on April 1, 1999 to a total of
thirteen (13) investors, each of which investors was known to an
officer and director of the Company. The offering was completed
pursuant to Rule 504 of Regulation D of the Act which provides an
exemption for issues of stock up to $1,000,000, in the aggregate,
by companies with a specific business plan and that are not
subject to the reporting requirements of the Securities and
Exchange Act of 1934. The offering was also completed pursuant
to exemptions provided by Section 46(j) of the Securities Act
of British Columbia.
The Company completed an offering of 33,000 common shares at
a price of $0.25 per share on April 5, 1999 to a total of thirty
three (33) investors, each of which investors was known to an
officer and director of the Company. The offering was completed
pursuant to Rule 504 of Regulation D of the Act which provides
an exemption for issues of stock up to $1,000,000, in the
aggregate, by companies with a specific business plan and that
are not subject to the reporting requirements of
16
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the Securities and Exchange Act of 1934. The offering was also
completed pursuant to exemptions provided by Section 46(j) of
the Securities Act of British Columbia.
The aggregate of these offerings, if integrated under Rule 502 of
Regulation D of the Act is less than the $1,000,000 limit the
exemption allows.
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
17
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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.
18
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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 April
30, 1999, including:
(a) Balance Sheet;
(b) Statement of Loss and Deficit;
(c) Statement of Cash Flows;
(d) Statement of Stockholders' Equity;
(e) Notes to Financial Statements.
2. Consent of Auditor
19
<Page >
RECON RUBBER CORPORATION
(An Exploration Stage Company)
FINANCIAL STATEMENTS
APRIL 30, 1999
(Stated in U.S. Dollars)
<Page >
------------------------------
Morgan & Company
------------------------------
Chartered Accountants
------------------------------
P.O. 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
Recon Rubber Corporation
We have audited the balance sheet of Recon Rubber Corporation
(an exploration stage company) as at April 30, 1999 and the
statements of loss and deficit accumulated during the
exploration 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 April 30, 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
July 20, 1999 Chartered Accountants
<Page >
RECON RUBBER CORPORATION
(An Exploration Stage Company)
BALANCE SHEET
APRIL 30, 1999
(Stated in U.S. Dollars)
- ------------------------------------------------------------------
ASSETS
Current
Cash $ 48,961
Mineral Property (Note 3) 1,000
----------
$ 49,961
==================================================================
LIABILITIES
Current
Accounts payable $ 1,132
SHAREHOLDERS' EQUITY
Share Capital
Authorized:
100,000,000 Common shares, par value
$0.001 per share
Issued and outstanding:
2,033,000 Common shares 2,033
Additional paid in capital 52,217
Deficit Accumulated During The Exploration Stage (5,421)
----------
48,829
----------
$ 49,961
==================================================================
Approved by the Directors:
\s\ J. Stephen Barley
- -------------------------------- ----------------------------
<Page >
RECON RUBBER CORPORATION
(An Exploration Stage Company)
STATEMENT OF LOSS AND DEFICIT
(Stated in U.S. Dollars)
- ------------------------------------------------------------------
Period From
Date Of
Organization Inception
June 12 June 12
1998 1998
To April 30 To April 30
1999 1999
- ------------------------------------------------------------------
Expenses
Office and sundry $ 752 $ 752
Mineral property exploration
expenditures 3,829 3,829
Professional fees 840 840
Net Loss For The Period 5,421 $ 5,421
===========
Deficit Accumulated During The
Exploration Stage, Beginning Of Period -
-----------
Deficit Accumulated During The
Exploration Stage, End Of Period $ 5,421
===========
Net Loss Per Share $ 0.03
===========
Weighted Average Number of Shares
Outstanding 188,897
==========
<Page >
RECON RUBBER CORPORATION
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
(Stated in U.S. Dollars)
- ------------------------------------------------------------------
Period From
Date Of
Organization Inception
June 12 June 12
1998 1998
To April 30 To April 30
1999 1999
- ------------------------------------------------------------------
Cash Flow From Operating Activities
Net loss for the period $ (5,421) $ (5,421)
Adjustments To Reconcile Net Loss
To Net Cash Used By Operating
Activities
Change in accounts payable 1,132 1,132
----------- -----------
(4,289) (4,289)
Cash Flow From Investing Activities
Mineral property (1,000) (1,000)
----------- -----------
Cash Flow From Financing Activities
Share capital issued 54,250 54,250
----------- -----------
Increase In Cash 48,961 48,961
Cash, Beginning Of Period - -
----------- -----------
Cash, End Of Period $ 48,961 $ 48,961
==================================================================
<Page >
RECON RUBBER CORPORATION
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
APRIL 30, 1999
(Stated in U.S. Dollars)
Common Stock
--------------------------
Additional
Paid-in
Shares Amount Capital Deficit Total
------------------------------------------------
Shares issued for
cash @ $0.005 1,200,000 $ 1,200 $ 4,800 $ - $ 6,000
Shares issued for
cash @ $0.05 800,000 800 39,200 - 40,000
Shares issued for
cash @ $0.25 33,000 33 8,217 - 8,250
Net loss for the
period - - - (5,421) (5,421)
------------------------------------------------
Balance, April 30,
1999 2,033,000 $ 2,033 $ 52,217 $(5,421) $ 48,829
================================================
<Page >
RECON RUBBER CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 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 June 12, 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 >
RECON RUBBER CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
b) 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.
c) 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.
d) 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
51% interest in the 37 mineral claims located in Mineral
County, Nevada.
In order to earn its interest, the Company must make cash
payments and incur exploration expenditures as follows:
Cash payments:
- - $1,000 on execution of the agreement (paid)
- - $50,000 on the first anniversary of the agreement
- - $75,000 on the second anniversary of the agreement
- - $75,000 on the third anniversary of the agreement
- - $100,000 on the fourth anniversary of the agreement
- - $120,000 per year thereafter until the property is placed
into commercial production
<Page >
RECON RUBBER CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999
(Stated in U.S. Dollars)
3. MINERAL PROPERTY (Continued)
The Company has the option to buyout the $120,000 yearly
minimum payment by making a one time payment of $1,000,000 in
cash or shares at not less than $0.50 per share.
Exploration expenditures:
- - $9,000 by April 1, 2000
- - a further $150,000 by April 1, 2001
- - a further $150,000 by April 1, 2002
- - a further $240,000 by April 1, 2003
- - a further $450,000 by April 1, 2004
Consideration paid to date: $ 1,000
=======
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.
5. SUBSEQUENT EVENT
Subsequent to April 30, 1999, the Company's name was changed to
Copper Valley Minerals Ltd.
<Page >
------------------------------
Morgan & Company
------------------------------
Chartered Accountants
------------------------------
P.O. 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 July 22, 1999, on the financial statements of Copper
Valley Minerals Ltd. (formerly Recon Rubber Corporation)
for the period ended April 30, 1999 in the Company's
Registrations Statement on Form 10-SB. We also consent to
the application of such report to the financial
information in the Registration Statement on 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
August 24, 1999 Chartered Accountants
<Page >
PART III
INDEX TO EXHIBITS
Exhibit 1: Articles of Incorporation
Exhibit 2: Certificate of Amendment of the Articles of
Incorporation
Exhibit 3: Bylaws of the Company
Exhibit 4: New York Canyon Property Option Agreement
Exhibit 5: Management Contract between the Company and C.H.M.
Consulting Inc.
Exhibit 6: Geological Report on the New York Canyon Property
Exhibit 7: Consent of Geological Consultant to use of Report
20
<Page >
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this Form 10-SB registration statement
to be signed on its behalf by the undersigned, thereunto duly
authorized.
COPPER VALLEY MINERALS LTD.
Date: August 24, 1999
\s\ J. Stephen Barley
By: __________________________________
J. STEPHEN BARLEY, Director, President
Chief Executive Officer
<Page >
ARTICLES OF INCORPORATION
OF
ReCon Rubber Corporation
------------------------
KNOW ALL MEN BY THESE PRESENTS: That the undersigned,
pursuant to Chapter 78 of the Nevada Revised Statutes, has
this day made and filed these Articles of Incorporation and DOES
HEREBY CERTIFY:
1. Name. The name of the Corporation shall be:
ReCon Rubber Corporation
2. Principal Office. The principal office or place of
business for the corporation shall be located at 6121 Lakeside
Drive, Suite 260, Reno, Nevada 89511-8527. The corporation may
also maintain offices, transact corporate business, and hold
meetings of directors and shareholders at other places in Nevada
or outside the State. The name and address of its Resident Agent
are Richard W. Harris, Esq., 6121 Lakeside Drive, Suite 260, Reno,
Nevada 89511-8527.
3. Purpose. The nature of the business, objects, and
purposes to be transacted, promoted, and carried out by the
corporation shall be: To engage in any lawful activity within or
without the State of Nevada.
4. Term. The corporation shall have perpetual
existence.
5. Capitalization. The amount of the total authorized
capital of the
-1-
<Page >
corporation shall consist of ONE HUNDRED MILLION (100,000,000)
shares with a par value of $0.001 per share. All of the shares
shall be of one class, without series or other distinction, and
shall be designated as "Common Stock".
6. Assessments. The capital stock, after the amount of
the subscription price has been fully paid, shall not be subject
to assessment for any purpose whatsoever.
7. Directors. The governing board of the corporation
shall be styled "Directors", and the first Board shall be one (1)
in number. The number of directors shall not be reduced to fewer
than one, and may, at any time or times, be increased or decreased
in such manner as provided in the By-Laws of the corporation.
The names and addresses of the first Board of Directors
are as follows:
Name Address
---- -------
J. Stephen Barlev 2060 Gisby Street
West Vancouver, British Columbia
Canada V7V 4N3
8. Election of Directors. At all elections of
directors of the corporation each stockholder possessing voting
power is entitled to as many votes as equal the number of
directors to be elected. He or she may cast all of such votes for
a single director or may distribute them among the number to be
voted upon or any two or more of them, as he or she may see fit.
-2-
<Page >
9. Powers of Directors. In furtherance, and not in
limitation of the power conferred by statute, the Board of
Directors is expressly authorized:
a. To make, alter, amend and rescind the By-Laws of
the corporation.
b. To fix the amount to be reserved as working
capital.
c. To fix the times for the declaration and payment of
dividends.
d. To authorize and cause to be executed mortgages and
liens upon the real and personal property of the corporation.
e. To sell, assign, transfer or otherwise dispose of
the property of thecorporation as an entirety with the
consent in writing or pursuant to the affirmative vote of the
holders of a majority of the stock issued and outstanding, at
a stock-holders' meeting duly called for that purpose.
f. To sell, assign, transfer, lease and in any lawful
manner dispose of such portions of said property as the Board
of Directors shall deem advisable, and to use and apply the
funds received in payment therefor to the surplus account for
the benefit of the corporation, or the payment of dividends,
or otherwise; provided that a majority of the whole Board
concur therein, and further provided that the capital stock
shall not be decreased except in accordance with the laws of
Nevada.
-3-
<Page >
g. By a resolution passed by a majority of the whole
Board, under suitable provision of the By-Laws, to designate two
or more of their numbers to constitute an executive committee,
which committee shall have and exercise any and all of the powers
of the Board of Directors which may be lawfully delegated in the
management of the business and affairs of the corporation, and
shall have the authority to cause the seal of the corporation to
be affixed to all papers which may require it.
h. To determine from time to time whether (and if allowed,
under what conditions and regulations) the accounts and books
of the corporation (other than the books required by law to be
kept at the principal office of the corporation in Nevada), or
any of them shall be open to the inspection of the stockholders,
and the stockholders' rights in this respect are and shall be
restricted or limited accordingly.
10. Liability of Directors and Officers. An officer or director
of the corporation shall have no personal liability to the
corporation or its stockholders for damages for breach of fiduciary
duty as an officer or director except for (a) acts or omissions
which involve intentional misconduct, fraud, or a knowing
violation of the law and (b) the payment of dividends in
violation of N.R.S. 78.300.
11. Indemnification of Officers and Directors. Every person
who was or is a party to, or is threatened to be made a party to,
or is involved in any
-4-
<Page >
action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that he or she or a person
of whom he or she is the legal representative 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 officer of another corporation,
or as its representative in a partnership, joint venture, trust or
other enterprise, shall be indemnified and held harmless to the
fullest extent legally permissible under the laws of the State of
Nevada from time to time against all expenses, liability and loss
(including attorney's fees, judgments, fines and amounts paid or
to be paid in settlement) reasonably incurred or suffered by him
or her in connection therewith. Such right of indemnification
shall be a contract right which may be enforced in any manner
desired by such person. Such right of indemnification which such
directors, officers, or representatives may have or hereafter
acquire shall extend to all actions undertaken on behalf of the
corporation; and, without limiting the generality of such
statement, they shall be entitled to their respective rights of
indemnification under any By-Laws, agreement, vote of stockholders,
provision of law or otherwise, as well as their rights under
this Article.
Without limiting the application of the foregoing, the Board of
Directors may adopt By-Laws from time to time with respect to
indemnification to provide at all times the fullest indemnification
permitted by the laws of the State of Nevada and may cause the
corporation to purchase and maintain insurance on
-5-
<Page >
behalf of any person who 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 officer of another corporation,
or as its representative in a partnership, joint venture, trust
or other enterprises against any liability asserted against such
person and incurred in any such capacity or arising out of such
status, whether or not the corporation would have the power to
indemnify such person.
12. Amendment. The corporation reserves the right to amend,
alter or repeal any provisions contained in these Articles of
Incorporation in the manner now or hereafter prescribed by
statute, and all rights conferred on stockholders herein are
granted subject to this reservation.
13. Incorporator. The name and post office address of the person
signing these Articles of Incorporation are as follows:
Kathleen Sue Trimmer
6121 Lakeside Drive, Suite 260
Reno. Nevada 89511-8527
IN WITNESS WHEREOF, I have hereunto set my hand this 10th day of
June, 1998, hereby declaring and certifying that the facts stated
hereinabove are true and correct to the best of my knowledge.
\s\ Kathleen Sue Trimmer
------------------------
KATHLEEN SUE TRIMMER
-6-
<Page >
CERTIFICATE OF ACCEPTANCE OF
APPOINTMENT BY RESIDENT AGENT
-----------------------------
I, RICHARD W. HARRIS, ESQ., hereby certify that on the 11th day
of June, 1998, I accepted appointment as Resident Agent of ReCon
Rubber Corporation in accordance with NRS 78.090. The principal
office in the State is located at 6121 Lakeside Drive, Suite 260,
Reno, Nevada 89511-8527, Washoe County, Nevada.
DATED this 11th day of June, 1998.
Kathleen Sue Trimmer
--------------------------
KATHLEEN SUE TRIMMER
For Richard W. Harris, Esq.
STATE OF NEVADA )
)ss.
COUNTY OF WASHOE )
On this 11th day of June, 1998, personally appeared before me,
a Notary Public, KATHLEEN SUE TRIMMER, personally known to me,
who acknowledged to me that she executed the foregoing Articles
of Incorporation.
\s\ Betty Carlson
----------------------
NOTARY PUBLIC
NOTARY SEAL
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CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock)
Recon Rubber Corporation
The undersigned, President and Secretary of ReCon Rubber Corporation
(the "Corporation") does certify:
THAT the Board of Directors of said Corporation at a meeting duly
convened, held on the 1st day of April, 1999, adopted a resolution
to amend the original articles as follows:
Article I is hereby amended as follows:
The name of this corporation is COPPER VALLEY MINERALS LTD.
The number of shares of the Corporation outstanding and entitled
to vote on an amendment to the Articles of Incorporation is
1,200,000 common shares. Said change has been consented to and
approved by a unanimous vote of the shareholders of each class of
stock outstanding and entitled to vote thereon.
\s\ J. Stephen Barley
----------------------------
Signature
Province of British Columbia )
) ss.
Country of Canada )
On June 17, 1999, personally appeared before me, a
Notary Public, J. Stephen Barley, who acknowledged
that they executed the above instrument.
\s\ Michael H. Taylor
- ---------------------
Signature of Notary
Michael H. Taylor
Barrister & Solicitor
Suite 1880, Royal Centre
1055 West Georgia Street, Box 11122
Vancouver, B.C.
V6E 3P3
(Notary Stamp or seal)
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BY-LAWS
OF
COPPER VALLEY MINERALS LTD.
(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
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by or at the direction of the Board of Directors, (B) otherwise
properly brought before the meeting 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
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corporation which are beneficially owned by such person, (D)
a description of all arrangements or 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.
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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.
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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.
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(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
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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
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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
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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
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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.
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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.
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(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
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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
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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
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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.
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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.
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(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
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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 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.
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(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.
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(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
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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.
Declared as the Amended By-Laws of Copper Valley Minerals Ltd. as
of the 1st day of July, 1999.
\s\ J. Stephen Barley
Signature of Officer: ________________________
Name of Officer: J. STEPHEN BARLEY
Position of Officer: President, Secretary, Treasurer
and Director
21
<Page >
OPTION AGREEMENT
THIS AGREEMENT made as of the 31st day of March, 1999
BETWEEN:
KLEINEBAR RESOURCES LTD., BILL HENDERSON; and
KURT SCHENDEL all of 3000 Walton Avenue,
Coquitlam, British Columbia
(collectively referred to as the "Optionor")
OF THE FIRST PART
AND:
RECON RUBBER CORPORATION, of Suite 1880-1055
West Georgia Street, Vancouver, British
Columbia V6E 3P3
(the "Optionee")
OF THE SECOND PART
WHEREAS:
A. The Optionor is the owner of certain mineral claims
located in Mineral County, Nevada;
B. The Optionor has agreed to grant an exclusive option to
the Optionee to acquire an interest in and to the Property, on the
terms and conditions hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of
the sum of $1.00 now paid by the Optionee to the Optionor (the
receipt of which is hereby acknowledged), the parties agree as
follows:
<Page >
-2-
DEFINITIONS
- -----------
1. For the purposes of this Agreement the following words
and phrases shall have the following meanings, namely:
(a) "Exploration Expenditures" means the sum of:
(i) all costs of acquisition and maintenance of
the Property, all expenditures on the exploration and
development of the Property; and all other costs
and expenses of whatsoever kind of nature
including those of a capital nature, incurred or
chargeable by the Optionee with respect to the
exploration of the Property;
(b) "Option" means the option to acquire a 51% undivided
interest in and to the Property as provided in this
Agreement;
(c) "Option Period" means the period from the date of this
Agreement to and including the date of exercise or
termination of the Option;
(d) "Property" means the mineral claims described in
Schedule "A" hereto including any replacement or
successor claims, and all mining leases and other
mining interests derived from any such claims. Any
reference herein to any mineral claim comprising the
Property includes any mining leases or other interests
into which such mineral claim may have been converted;
(e) "Property Rights" means all licenses, permits,
easements, rights-of-way, certificates and other
approvals obtained by either of the parties either
before or after the date of this Agreement and
necessary for the exploration of the Property.
<Page >
-3-
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE OPTIONOR
- ---------------------------------------------------------
2. (a) The Optionor represents and warrants to and
covenants with the Optionee that:
(i) it is legally entitled to hold the
Property and the Property Rights and will remain so
entitled until the interest of the Optionor in the Property
which is subject to the Option has been duly transferred to the
Optionee as contemplated hereby;
(ii) it is, and at the time of each transfer
to the Optionee of an interest in the mineral claims
comprising the Property pursuant to the exercise
of the Option it will be, the recorded holder and
beneficial owner of all of the mineral claims
comprising the Property free and clear of all
liens, charges and claims of others, except as
noted on Schedule "A", and no taxes or rentals are
or will be due in respect of any of the mineral
claims;
(iii) the mineral claims comprising the Property
have been to the best of the Optionor's knowledge and
belief duly and validly located and recorded pursuant to
the laws of the jurisdiction in which the Property is situate
and, except as specified in Schedule "A" and accepted by the
Optionee, are in good standing with respect to all filings,
fees, taxes, assessments, work commitments or other
conditions on the date hereof and until the dates set
opposite the respective names thereof in Schedule "A";
(iv) there are not any adverse claims or challenges
against or to the ownership of or title to any of
the mineral claims comprising the Property, nor to
the knowledge of the Optionor is there any basis
therefor, and there are no
<Page >
-4-
outstanding agreements or options to acquire or purchase
the Property or any portion thereof, and no person has any
royalty or other interest whatsoever in production from
any of the mineral claims comprising the Property other
than as set out in Schedule "A";
(v) no proceedings are pending for, and
Bill Henderson and/or Kurt Schendel is unaware of any basis for
the institution of any proceedings leading to the placing of
the Bill Henderson and/or Kurt Schendel in bankruptcy or
subject to any other laws governing the affairs of insolvent
persons;
(vi) Kleinebar Resources Ltd. has been duly
incorporated, amalgamated or continued and validly exists
as a corporation in good standing under the laws of its
jurisdiction of incorporation, amalgamation or continuation;
(vii) Kleinebar Resources Ltd. has duly obtained all
corporate authorizations for the execution of this Agreement
and for the performance of this Agreement by it, and the
consummation of the transactions herein contemplated will not
conflict with or result in any breach of any covenants or
agreements contained in, or constitute a default under, or
result in the creation of any encumbrance under the provisions
of the Articles or the constating documents of Kleinebar
Resources Ltd. or any shareholders' or directors' resolution,
indenture, agreement or other instrument whatsoever to which
Kleinebar Resources Ltd. is a party or by which it is bound or to
which it or the Property may be subject;
(viii) the Property is not the whole or
substantially the whole of the undertaking of the
Kleinebar Resources Ltd.; and
<Page >
-5-
(ix) no proceedings are pending for, and
Kleinebar Resources Ltd. is unaware of any basis for the
institution of any proceedings leading to, the
dissolution or winding up of Kleinebar Resources
Ltd. or the placing of Kleinebar Resources Ltd. in
bankruptcy or subject to any other laws governing
the affairs of insolvent corporations.
(b) The representations and warranties contained
in this section are provided for the exclusive benefit of the
Optionee, and a breach of any one or more thereof may
be waived by the Optionee in whole or in part at any
time without prejudice to its rights in respect of any
other breach of the same or any other representation or
warranty, and the representations and warranties
contained in this section shall survive the execution
of this Agreement and of any transfers, assignments,
deeds or further documents respecting the Property.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE OPTIONEE
- ---------------------------------------------------------
3. (a) The Optionee represents and warrants to and covenants
with the Optionor that:
(i) it has been duly incorporated, amalgamated
or continued and validly exists as a corporation in
good standing under the laws of its jurisdiction
of incorporation, amalgamation or continuation;
(ii) it is lawfully authorized to hold mineral
claims and real property under the laws of the
jurisdiction in which the Property is situate;
(iii) it has duly obtained all corporate
authorizations for the execution of this Agreement and
for the performance of this Agreement by it, and the
consummation of the transactions herein
contemplated will not conflict with or result in
any breach of any covenants or agreements
contained in,
<Page >
-6-
or constitute a default under, or
result in the creation of any encumbrance under
the provisions of the Articles or the constating
documents of the Optionee or any shareholders' or
directors' resolution, indenture, agreement or
other instrument whatsoever to which the Optionee
is a party or by which it is bound or to which it
or the Property may be subject;
(iv) no proceedings are pending for, and
the Optionee is unaware of any basis for the institution
of any proceedings leading to, the dissolution or winding
up of the Optionee or the placing of the Optionee
in bankruptcy or subject to any other laws
governing the affairs of insolvent corporations;
(b) The representations and warranties contained in this
section are provided for the exclusive benefit of the
Optionor and a breach of any one or more thereof may be
waived by the Optionor in whole or in part at any time
without prejudice to its rights in respect of any other
breach of the same or any other representation or
warranty, and the representations and warranties
contained in this section shall survive the execution
hereof.
GRANT AND EXERCISE OF OPTION
- ----------------------------
4. (a) The Optionor hereby grants to the Optionee
the sole and exclusive right and option to acquire a 51%
undivided interest in and to the Property free and clear
of all charges, encumbrances and claims, except for those set
out in Schedule "A".
(b) The Option shall be exercised by the Optionee:
<Page >
-7-
(i) paying the Optionor $1,000 US on the execution of
this Agreement, the receipt of which is hereby
acknowledged by the Optionor;
(ii) paying the Optionor $300,000 US as follows:
(A) $50,000 US on or before the first anniversary
of the date of this Agreement;
(B) an additional $75,000 on or before the second
anniversary of the date of this Agreement;
(C) an additional $75,000 on or before the third
anniversary of the date of this Agreement;
and
(D) an additional $100,000 on or before the
fourth anniversary of the date of this Agreement.
Following the above cash payments the Optionee shall
pay the Optionor yearly payments of $120,000 until such
time as the Property is placed into commercial
production or the Option is terminated by the Optionee.
The Optionee shall have the option to buyout this
$120,000 yearly minimum payment by paying a one time
payment of $1,000,000 or shares of the Optionee with an
equivalent value with not less than a $0.50 per share
value.
(iii) incurring Exploration Expenditures of $1,009,000
US on the Property as follows:
(A) $9,000 US on or before April 01, 2000;
(B) a further $150,000 on or before April 01,
2001;
<Page >
-8-
(C) a further $150,000 on or before April 01,
2002;
(D) a further $240,000 on or before April 01,
2003; and
(E) a further $450,000 on or before April 01,
2004.
In the event that the Optionee spends, in any of the
above periods, less than the specified sum, it may pay
to the Optionor the difference between the amount it
actually spent and the specified sum before the expiry
of that period in full satisfaction of the Exploration
Expenditures to be incurred. In the event that the
Optionee spends, in any period, more than the specified
sum, the excess shall be carried forward and applied to
the Exploration Expenditures to be incurred in
succeeding periods.
(c) If and when the Option has been exercised:
(i) a 51% undivided right, title and
interest in and to the Property shall vest in the
Optionee free and clear of all charges, encumbrances
and claims except for those set out in Schedule "A"; and
(ii) the Optionor and the Optionee shall enter
into a joint venture and be bound by that joint venture
agreement.
RIGHT OF ENTRY
- --------------
5. Throughout the Option Period the Optionor and its
servants, agents and independent contractors, shall have the right
in respect of the Property to:
(a) enter thereon;
<Page >
-9-
(b) have exclusive and quiet possession thereof;
(c) do such prospecting, exploration, development and
other mining work thereon and thereunder as the Optionor in
its sole discretion may determine advisable;
(d) bring upon and erect upon the Property such
buildings, plant, machinery and equipment as the Optionor may
deem advisable; and
(e) remove therefrom and dispose of reasonable
quantities of ores, minerals and metals for the purposes of
obtaining assays or making other tests.
OBLIGATIONS OF THE OPTIONOR DURING OPTION PERIOD
- ------------------------------------------------
6. During the Option Period the Optionor shall:
(a) based upon payments received from the Optionee
maintain in good standing those mineral claims comprising the
Property by the doing and filing of assessment work or
the making of payments in lieu thereof, by the payment
of taxes and rentals, and the performance of all other
actions which may be necessary in that regard and in
order to keep such mineral claims free and clear of all
liens and other charges arising from the Optionor's
activities thereon except those at the time contested
in good faith by the Optionor;
(b) record all exploration work carried out on the
Property by the Optionor as assessment work;
<Page >
-10-
(c) permit the directors, officers, employees and
designated consultants of the Optionee, at their own
risk and expense, access to the Property at all
reasonable times, and the Optionee agrees to indemnify
the Optionor against and to save it harmless from all
costs, claims, liabilities and expenses that the
Optionor may incur or suffer as a result of any injury
(including injury causing death) to any director,
officer, employee or designated consultant of the
Optionee while on the Property;
(d) do all work on the Property in a good and
workmanlike fashion and in accordance with all applicable
laws, regulations, orders and ordinances of any governmental
authority;
(e) indemnify and save the Optionee harmless in
respect of any and all costs, claims, liabilities and expenses
arising out of the Optionor's activities on the
Property, but the Optionor shall incur no obligation
hereunder in respect of claims arising or damages
suffered after termination of the Option if upon
termination of the Option any workings on or
improvements to the Property made by the Optionor are
left in a safe condition;
(f) permit the Optionee, at its own expense, reasonable
access to the results of the work done on the Property
during the last completed calendar year;
(g) deliver to the Optionee, forthwith upon receipt
thereof, copies of all reports, maps, assay results and
other technical data compiled by or prepared at the
direction of the Optionor with respect to the Property.
TERMINATION OF OPTION BY OPTIONEE
- ---------------------------------
7. (a) The Option shall terminate:
<Page >
-11-
(i) upon the Optionee failing to incur or make any
expenditure or payment which must be incurred or
made in exercise of the Option; or
(ii) at any other time, by the Optionee giving notice
of such termination to the Optionor.
(b) If the Option is terminated the Optionee shall:
(i) leave in good standing for a period of
at least 6 months from the termination of the Option Period
those mineral claims comprising the Property;
(ii) deliver or make available at no cost
to the Optionor within 90 days of such termination, all
drill core, copies of all reports, maps, assay
results and other relevant technical data compiled
by, prepared at the direction of, or in the
possession of the Optionee with respect to the
Property and not theretofore furnished to the
Optionor.
POWER TO CHARGE PROPERTY
- ------------------------
8. At any time after the Optionee has exercised the
Option, the Optionee may grant mortgages, charges or liens (each
of which is herein called a "mortgage") of and upon the Property
or any portion thereof, any mill or other fixed assets located
thereon, and any or all of the tangible personal property located
on or used in connection with the Property to secure financing of
development of the Property, provided that, unless otherwise
agreed to by the Optionor, it shall be a term of each mortgage
that the mortgagee or any person acquiring title to the Property
upon enforcement of the mortgage shall hold the same subject to
the right of the Optionor to receive the Royalty hereunder as if
the mortgagee or any such person had executed this Agreement.
<Page >
-12-
TRANSFERS
- ---------
9. (a) The Optionee may at any time either during
the Option Period or thereafter, sell, transfer or otherwise
dispose of all or any portion of its interest in and to
the Property and this Agreement provided that any
purchaser, grantee or transferee of any such interest
shall have first delivered to the Optionor its
agreement relating to this Agreement and to the
Property, containing:
(i) a covenant to perform all the obligations
of the Optionee to be performed under this Agreement in
respect of the interest to be acquired by it from
the Optionee to the same extent as if this Agreement
had been originally executed by such purchaser, grantee
or transferee; and
(ii) a provision subjecting any further sale,
transfer or other disposition of such interest in the
Property and this Agreement or any portion thereof
to the restrictions contained in this paragraph (a).
(b) No assignment by the Optionee of any interest
less than its entire interest in this Agreement and in the
Property shall, as between the Optionee and the
Optionor, discharge it from any of its obligations
hereunder, but upon the transfer by the Optionee of the
entire interest at the time held by it in this
Agreement, whether to one or more transferees and
whether in one or in a number of successive transfers,
the Optionee shall be deemed to be discharged from all
obligations hereunder save and except for the
fulfillment of contractual commitments accrued due
prior to the date on which the Optionee shall have no
further interest in this Agreement.
(c) If the Optionor should receive a bona fide
offer from an independent third party (the "Proposed Purchaser")
dealing at arm's length with the Optionor to purchase
<Page >
-13-
all or a part of its interest in the Property, which
offer the Optionor desires to accept, or if the
Optionor intends to sell all or a part of its interest
in the Property:
(i) The Optionor shall first offer (the "Offer")
such interest in writing to the Optionee upon terms no
less favourable than those offered by the Proposed Purchaser
or intended to be offered by the Optionor, as the case may be.
(ii) The Offer shall specify the price, terms and
conditions of such sale, the name of the Proposed Purchaser
and shall, in the case of an intended offer by the Optionor,
disclose the person or persons to whom the Optionor intends to
offer its interest and, if the offer received by the
Optionor from the Proposed Purchaser provides for any
consideration payable to the Optionor otherwise than in cash,
the Offer shall include the Optionor's good faith estimate of
the cash equivalent of the non-cash consideration.
(iii) If within a period of 60 days of the
receipt of the Offer the Optionee notifies the Optionor in
writing that it will accept the Offer, the Optionor shall
be bound to sell such interest to the Optionee on the terms
and conditions of the Offer. If the Offer so accepted
by the Optionee contains the Optionor's good faith estimate
of the cash equivalent of the non cash consideration as
aforesaid, and if the Optionee disagrees with the
Optionor's best estimate, the Optionee shall so
notify the Optionor at the time of acceptance and
the Optionee shall, in such notice, specify what
it considers, in good faith, the fair cash
equivalent to be and the resulting total purchase
price. If the Optionee so notifies the Optionor,
the acceptance by the Optionee shall be effective
and binding upon the Optionor and the Optionee,
and the cash equivalent of any such non-cash
<Page >
-14-
consideration shall be determined by binding
arbitration and shall be payable by the Optionee,
subject to prepayment as hereinafter provided,
within 60 days following its determination by
arbitration. The Optionee shall in such case pay
to the Optionor, against receipt of an absolute
transfer of clear and unencumbered title to the
interest of the Optionor being sold, the total
purchase price which is specified in its notice to
the Optionor and such amount shall be credited to
the amount determined following arbitration of the
cash equivalent of any non-cash consideration.
(iv) If the Optionee fails to notify the
Optionor before the expiration of the time limited
therefor that it will purchase the interest offered,
the Optionor may sell and transfer such interest to
the Proposed Purchaser at the price and on the
terms and conditions specified in the Offer for a
period of 60 days, but the terms of this paragraph
shall again apply to such interest if the sale to
the Proposed Purchaser is not completed within
such 60 days.
(v) Any sale hereunder shall be conditional upon the
Proposed Purchaser delivering a written
undertaking to the Optionee, in form and substance
satisfactory to its counsel, to be bound by the
terms and conditions of this Agreement.
SURRENDER OF PROPERTY INTERESTS PRIOR TO TERMINATION OF AGREEMENT
- -----------------------------------------------------------------
10. The Optionor may at any time during the Option Period
elect to abandon any one or more of the mineral claims comprised
in the Property by giving notice to the Optionee of such
intention. Any claims so abandoned shall be in good standing
under the laws of the jurisdiction in which they are situate for
at least 6 months from the date of abandonment. Upon
<Page >
-15-
any such abandonment, the mineral claims so abandoned shall
for all purposes of this Agreement cease to form part of the
Property.
AREA OF COMMON INTEREST
- -----------------------
11. If the Optionee and/or associated companies acquires,
through staking, properties located within the following area of
influence; extending one and a half ("1.5") miles in an easterly,
northerly and westerly direction, and two ("2") miles in a
southerly direction from the perimeter of the Property, these
properties will be included under the terms of this Agreement.
FORCE MAJEURE
- -------------
12. (a) If the Optionor is at any time either during the Option
Period or thereafter prevented or delayed in complying
with any provisions of this Agreement by reason of
strikes, lock-outs, labour shortages, power shortages,
fuel shortages, fires, wars, acts of God, governmental
regulations restricting normal operations, shipping
delays or any other reason or reasons, other than lack
of funds, beyond the control of the Optionee, the time
limited for the performance by the Optionee of its
obligations hereunder shall be extended by a period of
time equal in length to the period of each such
prevention or delay, but nothing herein shall discharge
the Optionee from its obligations hereunder to maintain
the Property in good standing;
(b) The Optionee shall give prompt notice to the Optionor
of each event of force majeure and upon cessation of
such event shall furnish to the Optionor with notice to
that effect together with particulars of the number of
days by which the obligations of the Optionee hereunder
have been extended by virtue of such event of force
majeure and all preceding events of force majeure.
CONFIDENTIAL INFORMATION
<Page >
-16-
13. No information furnished by the Optionee to the
Optionor hereunder in respect of the activities carried out on the
Property by the Optionee shall be published or disclosed by the
Optionor without the prior written consent of the Optionee, but
such consent in respect of the reporting of factual data shall not
be unreasonably withheld, and shall not be withheld in respect of
information required to be publicly disclosed pursuant to
applicable securities or corporation laws, regulations or
policies.
ARBITRATION
- -----------
14. (c) All questions or matters in dispute under this
Agreement shall be submitted to arbitration pursuant to
the terms hereof.
(d) It shall be a condition precedent to the right
of any party to submit any matter to arbitration pursuant to
the provisions hereof, that any party intending to
refer any matter to arbitration shall have given not
less than 10 days' prior notice of its intention to do
so to the other party, together with particulars of the
matter in dispute. On the expiration of such 10 days,
the party who gave such notice may proceed to refer the
dispute to arbitration as provided in paragraph (c).
(e) The party desiring arbitration shall appoint one
arbitrator, and shall notify the other party of such
appointment, and the other party shall, within 15 days
after receiving such notice, either consent to the
appointment of such arbitrator which shall then carry
out the arbitration or appoint an arbitrator, and the
two arbitrators so named, before proceeding to act,
shall, within 30 days of the appointment of the last
appointed arbitrator, unanimously agree on the
appointment of a third arbitrator to act with them and
be chairman of the arbitration herein provided for. If
the other party shall fail to appoint an arbitrator
within 15 days after receiving notice of the
appointment of the first arbitrator, the first
arbitrator shall be the only arbitrator. If the two
arbitrators appointed by the parties shall be unable to
<Page >
-17-
agree on the appointment of the chairman, the chairman
shall be appointed under the provisions of the
Commercial Arbitration Act of British Columbia. Except
as specifically otherwise provided in this section, the
arbitration herein provided for shall be conducted in
accordance with such Act. The chairman, or in the case
where only one arbitrator is appointed, the single
arbitrator, shall fix a time and place in Vancouver,
British Columbia, for the purpose of hearing the
evidence and representations of the parties, and he
shall preside over the arbitration and determine all
questions of procedure not provided for under such Act
or this section. After hearing any evidence and
representations that the parties may submit, the single
arbitrator, or the arbitrators, as the case may be,
shall make an award and reduce the same to writing, and
deliver one copy thereof to each of the parties. The
expense of the arbitration shall be paid as specified
in the award.
(f) The parties agree that the award of a majority
of the arbitrators, or in the case of a single arbitrator, of
such arbitrator, shall be final and binding upon each
of them.
DEFAULT
- -------
15. If at any time during the Option Period the Optionee
is in default of any provision in this Agreement (other than the
provisions of sub-paragraph 4(b) for which no notice of default
need be given), the Optionor may terminate this Agreement, but
only if:
(g) it shall have first given to the Optionee a notice of
default containing particulars of the obligation which
the Optionee has not performed, or the warranty
breached; and
<Page >
-18-
(h) the Optionee has not, within 45 days following
delivery of such notice of default, cured such default or
commenced proceedings to cure such default by
appropriate payment or performance, the Optionee hereby
agreeing that should it so commence to cure any default
it will prosecute the same to completion without undue
delay.
Should the Optionee fail to comply with the provision
of sub-paragraph (b), the Optionor may thereafter terminate this
Agreement by giving notice thereof to the Optionee.
RULE AGAINST PERPETUITIES
- -------------------------
16. If any right, power or interest held by or to be
acquired by any party in the Property under this Agreement would
violate the rule against perpetuities, then such right, power or
interest shall terminate at the expiration of 20 years after the
date of this Agreement.
NOTICES
- -------
17. Each notice, demand or other communication required or
permitted to be given under this Agreement shall be in writing and
shall be delivered, telegraphed or telecopied to such party at the
address for such party specified above. The date of receipt of
such notice, demand or other communication shall be the date of
delivery thereof if delivered or telegraphed or, if given by
telecopier, shall be deemed conclusively to be the next business
day. Either party may at any time and from time to time notify
the other party in writing of a change of address and the new
address to which notice shall be given to it thereafter until
further change.
GENERAL
- -------
<Page >
-19-
18. (i) This Agreement shall supersede and replace any
other agreement or arrangement, whether oral or written,
heretofore existing between the parties in respect of
the subject matter of this Agreement.
(j) No consent or waiver expressed or implied by either
party in respect of any breach or default by the other
in the performance by such other of its obligations
hereunder shall be deemed or construed to be a consent
to or a waiver of any other breach or default.
(k) The parties shall promptly execute or cause to be
executed all documents, deeds, conveyances and other
instruments of further assurance and do such further
and other acts which may be reasonably necessary or
advisable to carry out fully the intent of this
Agreement or to record wherever appropriate the
respective interest from time to time of the parties in
the Property.
(l) This Agreement shall enure to the benefit of and be
binding upon the parties and their respective
successors and permitted assigns.
(m) This Agreement shall be governed by and construed in
accordance with the laws of British Columbia and shall
be subject to the approval of all securities regulatory
authorities having jurisdiction.
(n) Time shall be of the essence in this Agreement.
(o) Wherever the neuter and singular is used in this
Agreement it shall be deemed to include the plural,
masculine and feminine, as the case may be.
(p) Any reference in this Agreement to currency shall be
deemed to be U.S. currency.
<Page >
-20-
IN WITNESS WHEREOF the parties hereto have executed this Agreement
as of the day and year first above written.
THE CORPORATE SEAL OF )
KLEINEBAR RESOURCES LTD. )
was hereunto affixed in the )
presence of: )
) C/S
\s\ Robert Weicker )
- ------------------------- )
)
- ------------------------- )
)
SIGNED, SEALED AND DELIVERED )
BY BILL HENDERSON in the )
presence of: )
)
\s\ Janice S. Henderson ) \s\ Bill Henderson
- ------------------------- ) ----------------------
) Bill Henderson
- ------------------------- )
)
SIGNED, SEALED AND DELIVERED )
BY KURT SCHENDEL in the )
presence of: )
)
\s\ Tamara Wykes Schendel ) \s\ Kurt Schendel
- ------------------------- ) ----------------------
) Kurt Schendel
)
RECON RUBBER CORPORATION
per: \s\ J. Stephen Barley
--------------------------
<Page >
SCHEDULE "A"
------------
- -----------------------------------------------------------
CLAIM NAME DATE LOCATED BLM # Location # of
Clms
- -----------------------------------------------------------
NYC 1,3,5,7, October 17, 1998 Sec 33,34 7
9,11,13 T8N R35E
- -----------------------------------------------------------
NYC 2,4,6,8, October 17, 1998 Sec 33, 7
10,12,14 T8N R35E
- -----------------------------------------------------------
NYC 35 October 17, 1998 Sec 4, 1
T7N R35E
- -----------------------------------------------------------
NYC 36 October 17, 1998 Sec 3, 1
T7N R35E
- -----------------------------------------------------------
NYC 37 October 17, 1998 Sec 33, 1
T8N R35E
- -----------------------------------------------------------
NYC 38 October 17, 1998 Sec 34, 1
T8N R35E
- -----------------------------------------------------------
NYC 39,40 October 17, 1998 Sec 34, 2
T8N R35E
- -----------------------------------------------------------
20
- -----------------------------------------------------------
- -----------------------------------------------------------
CLAIM NAME DATE LOCATED BLM # Location # of
Clms
- -----------------------------------------------------------
NYC 15-18 October 16, 1998 Sec 6 4
T7N R35E
- -----------------------------------------------------------
NYC 19-31 October 16, 1998 SEC 31 13
T8N R35E
- -----------------------------------------------------------
17
- -----------------------------------------------------------
<Page >
MANAGEMENT AGREEMENT
AGREEMENT dated for reference the 1st day of April, 1999.
BETWEEN: C.H.M. CONSULTING INC., a company incorporated
under the laws of British Columbia
(hereinafter called "CHM")
OF THE FIRST PART
AND: COPPER VALLEY MINERALS LTD., a company
incorporated under the laws of the State of
Nevada
(hereinafter called "Copper Valley")
OF THE SECOND PART
WHEREAS CHM has business and management expertise and
maintains an office with reception services, secretarial
services and office administration services, including
telephone and computer services;
AND WHEREAS Copper Valley requires management services,
reception services, secretarial services, office
administration services, including telephone and computer
services, and wishes CHM to provide same to Copper Valley;
NOW THEREFORE THE PARTIES HAVE AGREED and do hereby agree as
follows:
1. CHM hereby agrees to provide the management services of
J. Stephen Barley as President of the Copper Valley to
carry out management and direction of the business of the
Company, including managing and supervising any mineral
exploration activities carried out by Copper Valley.
2. CHM hereby agrees to provide reception services,
secretarial services and office administration services,
including telephone and computer services, to Copper
Valley.
3. In consideration of CHM providing all the above mentioned
services to Copper Valley, Copper Valley agrees to pay to
CHM, $750.00 U.S. per month payable on the 1st day of each
month.
4. In addition to the above expense stated above, Copper
Valley agrees to reimburse CHM for any expenses directly
attributable to performing its obligations to Copper Valley
pursuant to this Agreement.
<Page >
5. Copper Valley shall pay any directly attributable expenses
on receipt of an invoice from CHM.
6. This Agreement shall be for a term of one year commencing
April 1, 1999 and ending March 31, 2000.
7. No amendment or termination of this Agreement shall be
valid unless it is in writing and executed by both parties.
8. 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.
C.H.M. CONSULTING INC.
by its authorized signatory
\s\ J. Stephen Barley
- ---------------------------------
Signature of Authorized Signatory
J. Stephen Barley
- ---------------------------------
Name of Authorized Signatory
COPPER VALLEY MINERALS LTD.
by its authorized signatory
\s\ J. Stephen Barley
- ---------------------------------
Signature of Authorized Signatory
J. Stephen Barley
- ---------------------------------
Name of Authorized Signatory
<Page >
SUMMARY REPORT
ON THE
NEW YORK CANYON PROPERTY
OF
KLEINEBAR RESOURCES LTD.
FOR
RECON RUBBER CORPORATION
By
W.C.Hanson
12161-228 Street, Maple Ridge BC, V2X 6M2
June 12, 1999
<Page >
TABLE OF CONTENTS
INTRODUCTION 1
PROPERTY DESCRIPTION, LOCATION & INFRASTRUCTURE 2
CLIMATE AND PHYSIOGRAPHY 4
HISTORY 4
GEOLOGY 10
REGIONAL GEOLOGY 10
PROPERTY GEOLOGY 11
STRUCTURE 12
ALTERATION 12
MINERALIZATION 13
MINERAL RESOURCE ESTIMATES 16
EXPLORATION POTENTIAL 17
CONCLUSIONS AND RECOMMENDATIONS 18
REFERENCES 19
AUTHOR"S CERTIFICATE 20
2
<Page >
LIST OF TABLES
TABLE 1 Historic Gold, Silver and Copper Production
Santa Fe mining district, Mineral County, Nevada 6
TABLE 2 Summary of Surface Rock Sampling of the
New York Canyon Area 15
LIST OF FIGURES
FIGURE 1 General Location Plan of the
New York Canyon Property 3
FIGURE 1 General Site Plan
New York Canyon Property 9
3
<Page >
INTRODUCTION:
- -------------
In June, 1999, Mr. Stephen Barley requested a summary
report on behalf of Recon Rubber Corporation (Recon) on
Kleinebar Resources Ltd. (Kleinebar) "New York Canyon"
properties, located in Mineral County, NV. USA. In
October, 1998, Kleinebar staked title to two blocks of
unpatented mineral claims in the area. The first, is a
contiguous block of 20 claims centered over what is locally
known as the Long Shot Ridge and New York mineral
occurrences, the other, is a contiguous block of 17 mineral
claims centered over the Copper Queen mineral occurrence.
Historically, this district produced copper and silver from
several small mines. Copper production was significant,
reaching a peak during World War I. Modern exploration
activity in the area commenced in 1964 when Banner Mining
Company ( later bought out by Amax Inc.) drilled the Copper
Queen deposit. Modern exploration activity in the area
initially concentrated on the discovery of porphyry copper
deposits.
In the mid 1980's, Coca Mines Ltd. (Coca) acquired the
claims and conducted some limited exploration work,
including surface rock, geochemical sampling, evaluating
the area for its precious metal potential. Coca also
completed a limited number of reverse circulation drill
holes on the claims.
1
<Page >
This report is based on a review of the documentation,
data and promotional materials available on the property,
most of which is public domain.
PROPERTY DESCRIPTION, LOCATION & INFRASTRUCTURE:
- ------------------------------------------------
Kleinebar's "New York Canyon" properties are located in
the southeastern portion of Mineral County, Nevada, thirty
(30) miles east of the county seat of Hawthorne. Figure 1
shows the location of, and access to the property.
Hawthorne has the necessary infrastructure to support
exploration and mining activity in the area. The Southern
Pacific Railroad maintains a railhead at Thorne,
approximately eight (8) miles north of Hawthorne. Access to
the claims is via Highway 95, Hawthorne to Luning, a
distance of 25 miles. From Luning, a seven (7) mile gravel
county road provides access to the property.
The property falls within the Santa Fe mining district
which was discovered in the late 1800's. Commercial
production of silver and later copper was realized from the
district in the late 1800's. The claims lie approximately
five miles south-southeast of the Santa Fe Gold Mine, a
former heap leach gold mining operation owned by Corona
Gold (later Homestake Mining Company).
2
<Page >
CLIMATE AND PHYSIOGRAPHY:
- -------------------------
The climate is typically arid to semiarid, characteristic
of the of the Great Basin area. Summers are hot and dry,
with cool nights. Winters are usually mild with clear skies
and occasional freezing temperatures, especially at higher
elevations.
The topography is typical of the Great Basin area with
alkali soda flats leading to the irregular alluvial canyons
and linear to irregular mountain ranges. The area is at an
elevation of 6,500 feet, which is approximately 2,000 feet
above the floor of the soda flats.
Sagebrush and other desert shrubs dominate the flat lands
and canyons. As the elevation increases in the mountain
ranges, the vegetation gradually changes with the emergence
of juniper and pinion pine forests.
HISTORY:
- --------
The Santa Fe Silver Mine, established this mining district
on it's discovery in 1879. This discovery led to silver
production from a number of other silver, silver-lead and
silver-copper deposits in the district. The discovery of
significant copper deposits, identified around 1893, saw
mining activity focus on the large copper deposits in the
area. These deposits, mined via short tunnels and open
cuts, superceded the small silver mining operations
scattered throughout the area.
3
<Page >
Copper production from the district exceeded 4,454 tons
during the period 1906 through 1935. Table 1 is a summary
of the copper production for the Santa Fe mining district
for the period 1906 through 1935. The table also included
state statistics on gold and silver for the same period.
As shown in Table 1, there was significant silver
production from the district during this period, especially
during the war years when copper production reached it's
zenith. It is believed that the silver was a byproduct of
copper production in the area. During World War I, a total
of five (5) mines were active in the immediate vicinity of
the Kleinebar claim blocks. The New York, Turk, Vacation,
Boston Electric and Wall Street copper deposits all saw
commercial production during this period. The average grade
of copper during this period was as high as 8%, a grade
that was maintained by hand cobbing and sorting of the ore.
Modern exploration of the area began in 1964 when Banner
Mining Company (Banner) drilled the Copper Queen and
Champion mineral occurrences. In the 1970's, Amax Inc
(Amax), and later Conoco Inc. (Conoco) both conducted
significant exploration programs, which included the
completion of 24 holes, totaling 20,226 feet. This included
a total of 15 holes which were drilled to test the Long
Shot Ridge occurrence from which a mineral resource of 13.2
million tons grading 0.55% Cu was identified by Conoco.
4
<Page >
In 1981, after reviewing Conoco's drill results from the
Copper Queen area, Amax noted that the samples from one
hole showed gold grades increasing to 0.77 ppm at the
bottom of the hole. This prompted Amax to resample the
coarse rejects from this hole to verify the gold analysis.
Amax concluded that this gold enrichment at depth was due
to contamination. Nevertheless, Amax collected several
surface rock chip samples from various locations on the
property, evaluating the precious metal potential of the
area.
Later (1983), a series of follow up surface rock chip
samples were collected by Todilto Exploration and
Development Corp. (Todilto) and Great Basin Exploration and
Mining (Great Basin). Both sampling regimes were directed
at evaluating the precious metal potential of the area.
In the mid 80's, Coca Mines (Coca) carried out some limited
exploration work in the district, searching for gold
deposits with heap leach potential. In the late 80's most
of the claims in the area were acquired by Princeton Mining
(Princeton). Princeton acquired the ground from Coca and
also purchased the patented claims from Amax, but did no
further work on the claims.
In 1991 - 92, the property, and all shares in the holding
company Jaycor, were purchased by Kookaburra Gold Corp
(Kookaburra). At the same time, Kookaburra also purchased
Coca Mines' (later bought out by Hecla Mining) 15% net
profit royalty. In 1992-93, Kookaburra drilled a total of
10 core (2,432 ft.) and 29 reverse circulation (5,327 ft.)
in fill holes drilled to verify Conoco's resource
5
<Page >
estimate for the Long Shot Ridge deposit, and determine it's
suitability for Solvent Extraction - Electro Winning (SX-
EW) technology.
Kookaburra's infill drilling program confirmed Conoco's
resource estimate with a slight increase in tonnage. As a
result of Kookaburra's drilling, the mineral resource was
increased to 16.1 million tons grading 0.55% Cu. Core
Engineering And Associates completed an independent review
on the resources of the Long Shot Ridge deposit confirming
Kookaburra's results.
In 1993, Phelps Dodge (Phelps Dodge) optioned a portion of
the property, also intent on evaluating the area for
potential gold mineralization.
Poor copper prices in late 1993 and early 1994, prompted
Kookabura to place the property on hold while Kookaburra
focused their attention elsewhere. The property has seen
little additional work since 1993 and in September, 1998
nine square miles came open for staking due to a failure to
pay the 1999 Maintenance Fees. Kleinebar staked the
property at this time. Figure 2 is a general map of the
area showing the location of Kleinebar's claims.
Kleinebar owns clear title to the two unpatented mineral
claim groups as previously noted. The claims are in good
standing at the time of this writing. Kleinebar has entered
into an option agreement with Recon Rubber Corporation
(Recon) whereby Recon can earn a 51% interest in the
properties providing the outlined conditions are met,
including a limited geological mapping and sampling program
proposed as the Phase I Work Program.
6
<Page >
GEOLOGY:
- --------
REGIONAL GEOLOGY:
- -----------------
The Santa Fe district is dominated by Triassic and Jurassic
aged sedimentary rocks, Cretaceous aged granitic rocks and
volcanic flows of Tretiary age. Quaternary alluvium and
colluvium are common in the valleys and canyons of the
area.
The district is underlain mainly by Mesozoic carbonate
rocks which have been intruded by Cretaceous aged granitic
plutons creating locally formed porphyry and skarn type
copper deposits.
In a report titled " Report on the Geology and Ore Reserve
Estimate of the Long Shot Ridge Copper Oxide Deposit "
(Nebocat, 1992) the regional geology is described as
follows:
The basal sequence, known as the Luning Formation is a
thick series of bedded limestone and dolomites of Triassic
age. The Gabbs Formation (late Triassic) conformably
overlies the Luning and consists of three members of thinly
bedded carbonaceous and fossiliferous limestones,
calcareous and tuffaceous siltstones and argillaceous
limestones.
The Sunrise Formation (Jurrasic) overlies the Gabbs and
consists of five members, the lower three of which are
found underlying the area. Dikes, sills and stocks of
granodiorite, quartz monzonite, monzonite and rhyolite
intrude the aforementioned formations.
7
<Page >
PROPERTY GEOLOGY:
- -----------------
Locally, the area is dominated by interbedded garnet /
diopside skarn which hosts the bulk of copper resources in
the immediate area. Mineralization tends to be more
abundant in the diopside skarn possibly due to its more
brittle nature allowing for greater development of
fractures through which mineralizing solutions could pass
through the unit. The skarn occurs entirely within the
Gabbs Formation and probably comprises all three members
though the exact contacts are indistinct.
Thick, consistent hornfelsed tuffs and argillites overlie
the Gabbs skarn sequence. Locally, these lithologies can
host significant pyrite mineralization. The basal portion
consists of thin bedded garnet / diopside skarn, similar to
the Gabbs skarn assemblage. However, this unit is separated
from the Gabbs skarn by a distinct, traceable weathering
contact. The upper contact with the hornfels is abrupt.
Higher in the succession a massive garnet skarn, overlain
by thinner bedded garnet / diopside layers hosts the old
Mayflower Mine. This skarn grades into a tan, sandy
limestone to the southeast. Grey to black, thinnly bedded
argillites overlie the skarn horizon and tend to be
unaltered. These units mapped as members of the Sunrise
Formation.
Towards the western edge of the Central Zone, a small
brecciated and hematitic carbonate unit outcrops. This unit
appears to be fault related and postdates the mineralizing
event(s). Another outcrop of hematitic dolomite occurs at
the eastern
8
<Page >
edge of the area, straddling a fault gully
separating the Central and North Zones. This unit hosts
numerous jasperoid veins up to several feet thick. The
jasperoid contains fine grained silica, hematite, goethite,
limonite and some oxide copper.
The Central and South Zones are transected by a series of
granodiorite porphyry sills and dikes. Copper
mineralization appears to be genetically and spatially
related to the intrusive sills and dikes.
STRUCTURE:
- ----------
On average, bedding planes indicate that the majority of
the rock units strike east-northeast with gentle dips of
approximately 35 degrees to the south (075 degrees/-35 degrees S)
The property has been affected by block faulting, with
steeply dipping faults developed roughly parallel to the
bedding. Steep, sub-vertical faults exhibit post mineral
movement which consistently down drops the north side of
the blocks by as much as 50 -200 feet. The faults are
believed to be associated with the major basin and range
fault systems which formed the Soda Springs Valley floor to
the west of the property.
ALTERATION:
- -----------
The calc-silicate skarnification of the Gabbs Formation is
recognized as the earliest stage of alteration affecting
the property. The skarnification occurred very early in
the genesis of the deposits and appears to control copper
mineralization. It is widely accepted that block faulting
opened channels through
9
<Page >
the Luning and Gabbs Formations, allowing hydrothermal fluids
to percolate throughout the more brittle Gabbs Formation and
producing the skarn assemblage. The Gabbs Formations, a succession
of mostly impure porous, carbonate bearing siltstones and
sandstones, provides an ideal horizon for widespread alteration
(skarn) and low grade mineral enrichment.
In old mine workings in the Luning Formation, high grade
copper mineralization, with intense serpentine-talc-garnet-
magnetite alteration, is localized along steep fissures.
This style of mineralization is essentially confined to the
fault structures due to the massive nature of the
limestones and dolomites of the Luning.
MINERALIZATION:
- ---------------
In a report on the property for Kookaburra, J. Nebocat
(Nebocat) notes that Conoco completed mineralogical
analysis of the rocks in the area, indicating that
chrysocolla is the dominant oxide copper mineral found in
the Long Shot Ridge seposit. Malachite, neotocite and
azurite are also noted (Nebocat). Goethite was also
identified by Conoco in microprobe analysis of core
samples.
Late stage quartz and carbonate veins cut the deposit with
varying orientations, these generally tend to be less than
an inch in thickness. At least some of the carbonate has
been remobilized from unaltered sections of the deposits
and the underlying Luning Formation.
Copper is the principal economic mineral in the area,
however, several sampling programs (Amax 1981, Todilto
Exploration and Development 1983 and Great
10
<Page >
Basin Exploration & Mining 1992) were directed at evaluating the
precious metal potential of this area. Results indicate the
presence of anomalous gold and silver values from rock chip
samples collected on the property. Table 2 summarizes the
results of the surface sampling programs. Gold values
greater than 200 ppb and silver values returning greater
than 30 ppm are highlighted. Figure 2 (page 9), shows all
the sample locations, with the exception of the samples
collected by Great Basin for which no location map was
provided.
In all, out of a total of 63 rock samples collected on the
surface of the claims, 16 (25%) returned anomalous values
for gold or silver. Gold values ranged from trace amounts
to a high of 681 ppb. Silver values range from trace to a
high of 550 ppm.
11
<Page >
MINERAL RESOURCE ESTIMATES:
- ---------------------------
The most advanced project in terms of resource evaluation
is the Long Shot Ridge deposit. Both Conoco and Kookaburra
completed separate resource estimates on this deposit. The
Long Shot Ridge deposit is predominantly a copper oxide
deposit, believed to be amenable to SX-EW extraction. The
Conoco and Kookaburra estimates are supported by two
estimates completed by independent engineers, (Nebocat,
1992 and Cowdery, 1993). All the estimates are in close
agreement and were completed using manual methods. Results
of the last estimate (Cowdery) are stated as:
17.7 Million Tons @ 0.57% Cu.
Kookaburra press releases refer to a mineral resource for
the Santa Fe South property, consisting of the Copper Queen
and Champion deposits. Copper, as both oxide and sulphide
ores are hosted in this skarn deposit and Kookaburra refers
to potential molybdenum and gold credits in association
with the copper based on limited drill hole analysis.
Kookaburra states that the Santa Fe South deposit
potentially hosts:
142.0 Million Tons @ 0.35-0.40% Cu
It should be noted that to the authors' knowledge, no
independent verification of the resource estimate of the
Santa Fe South deposit has been completed.
12
<Page >
EXPLORATION POTENTIAL:
- ----------------------
There is little doubt that the New York Canyon has
significant potential for increasing the copper resource.
In particular, the Long Shot Ridge deposit appears to be
amenable to SX-EW processing of the ore. (Nebocat) refers
to metallurgical testwork by Conoco indicating recoveries
of approximately 80%. The remainder of the property offers
good copper sulphide potential. A significant area remains
largely untested, providing an opportunity to increase the
copper resources of the property.
Based on the results of limited surface sampling, the
property does have some potential for precious metal
enrichment. Although it is unlikely that a "stand alone"
gold or silver deposit exists, there is good potential to
enhance the overall NPV of the existing copper resources
with potential gold and / or silver mineralization.
The potential for the property to host significant gold and
silver content is based on the following observations:
1. Silver production was realized from this district and
from operating mines on the property in the past;
2. Anomalous gold and silver values have been identified
from surface rock sampling programs;
3. The Santa Fe Gold Mine (Homestake), lies approximately
5 miles south-southeast of the Kleinebar claims.
13
<Page >
4. The structural, geological and chemical conditions
that caused the skanification and deposited low grade
copper enrichment, are also favorable conditions for
the deposition of gold and silver mineralization.
5. With the exception of a limited number of surface (and
drill samples), the property remains largely untested
for precious metal potential.
CONCLUSIONS AND RECOMMENDATIONS:
Based on the review of the available documentation, it is
the writer's opinion that the New York Canyon properties of
Kleinebar Resources offer an excellent opportunity for both
improving the existing copper resource and developing
additional value from gold and / or silver mineralization.
The property has been affected by favorable geological
conditions for copper, gold and silver deposition. The
claims remain largely untested for gold and silver
mineralization, even though historic information indicates
anomalous gold and silver values from surface rock chip
samples.
The limited exploration program proposed by Kleinebar is
highly recommended. In particular, the collection of an
additional 150 samples will further determine the potential
for gold and silver associated with the copper
mineralization on the property.
14
<Page >
REFERENCES:
- -----------
Nebocat, John Report on the Geology and Ore Reserve
Estimate of the Longshot Ridge Copper Oxide
Deposit. June, 1992
Cowdery, P.H. Report on the Longshot Ridge Copper Oxide
Project April, 1993
Ross, D.C. Geology and Mineral Deposits of Mineral
County Nevada USGS Bulletin #58, 1961
15
<Page >
AUTHOR"S CERTIFICATE:
- ---------------------
The undersigned hereby states that:
1. Is a resident of British Columbia, currently residing
at 12161-228th Street, Maple Ridge, B.C., Canada, V2X
6M2;
2. Graduated from Mount Allison University with a B.Sc.
in Geology in 1982;
3. has practiced professionally as an exploration and
mining geologist continuously since graduation;
4. does not own or expect to receive any interest
(direct, indirect or contingent) in the property
described herein, nor in the securities of the Issurer
in respect of services rendered in the preparation of
this report;
5. has not conducted a site visit to the property
described herein;
6. has not independently verified any of the analytical
and / or reserve estimates referred to in this
report.
Wes Hanson June 17, 1999
16
<Page >
Table 1
- -------------------------------------------------------------------
"Historic Gold, Silver and Copper Production"
"of the Santa FE mining district, Mineral County, Nevada"
- -------------------------------------------------------------------
Ounces Average Ounces Average Pounds Average
Year Tons Au grade Ag grade Copper grade
Au opt Ag opt Cu %
- -------------------------------------------------------------------
1906 7,000 1,685.24 0.24 2,857 0.41 0 0.00%
1907 9,489 2,023.53 0.21 8,056 0.85 105,199 0.55%
1908 2,143 713.10 0.33 3,102 1.45 24,334 0.57%
1909 409 261.42 0.64 19,088 46.67 34,877 4.26%
1910 1,120 151.08 0.13 10,022 8.95 3,521 0.16%
1911 158 57.63 0.36 2,902 18.37 1,256 0.40%
1912 3,080 352.14 0.11 17,415 5.65 311,559 5.06%
1913 9,087 76.22 0.01 14,358 1.58 646,812 3.56%
1914 1,426 20.51 0.01 4,313 3.02 190,193 6.67%
1915 2,726 144.47 0.05 6,802 2.50 384,258 7.05%
1916 17,665 59.09 0.00 46,755 2.65 2,547,058 7.21%
1917 19,932 97.17 0.00 50,007 2.51 2,590,756 6.50%
1918 12,897 46.09 0.00 42,012 3.26 1,923,259 7.46%
1919 534 0.14 0.00 2,008 3.76 85,470 8.00%
1920 157 8.50 0.05 1,717 10.94 1,018 0.32%
1921 206 249.17 1.21 1,600 7.77 27 0.01%
1922 204 159.96 0.78 2,079 10.19 372 0.09%
1923 37 1.31 0.04 527 14.24 0 0.00%
1924 13 1.22 0.09 319 24.54 48 0.18%
1925 50 4.71 0.09 2,469 49.38 0 0.00%
1926 0 0.00 0.00 0 0.00 0 0.00%
1927 175 35.44 0.20 1,736 9.92 22,310 6.37%
1928 350 188.58 0.54 1,809 5.17 6,251 0.89%
1929 317 28.15 0.09 1,358 4.28 29,130 4.59%
1930 7 18.37 2.62 23 3.29 0 0.00%
1931 0 0.00 0.00 0 0.00 0 0.00%
1932 0 0.00 0.00 0 0.00 0 0.00%
1933 0 0.00 0.00 0 0.00 0 0.00%
1934 145 49.53 0.34 518 3.57 0 0.00%
1935 219 90.18 0.41 170 0.78 51 0.01%
=================================================================
Totals 89,546 6,522.95 0.07 244,022 2.73 8,907,759 4.97%
- -----------------------------------------------------------------
<Page >
Table 2
Summary of Surface Rock Sampling of the New York Canyon Area
Amax Todilto Exp & Dev.
- ------------------------------------------------------------------
Sample # Au ppb As ppm Sb ppm Sample # Au ppb Ag ppm
- ------------------------------------------------------------------
B42056 10 87 46.0 388 65 1.2
B42057 10 115 44.0 389 185 8.3
B42058 70 243 69.5 390 90 38.0
B42059 60 161 61.0 391 350 42.0
B42061 10 83 12.0 392 150 18.8
B42062 100 96 89.0 393 400 32.0
B42063 20 126 55.5 394 210 45.0
B42064 10 130 62.0 395 600 165.0
B42065 50 8 Tr 396 25 0.4
B42066 20 323 22.0 397 25 1.7
B42067 20 76 45.0 398 140 44.0
B42068 40 761 60.5 399 150 18.8
B42069 100 64 33.0 400 25 1.7
B42071 10 25 0.5 401 250 3.7
B42072 Tr 183 18.0 402 105 83.0
B42073 110 187 129.5 403 25 7.0
B42074 220 309 146.0 404 200 550.0
B42075 540 791 235.0 405 95 160.0
B42076 20 67 58.0 406 500 138.0
B42077 220 2174 698.0
B42078 10 20 85.0
B42079 20 28 35.5
B42081 10 46 1.5
B42082 10 46 2.5
B42083 10 9 Tr
B42084 10 38 1.5
B42085 Tr 14 Tr
B42086 10 71 3.0
B42087 10 19 0.5
B42088 10 32 2.0
B42089 Tr 23 1.0
B42091 70 1046 150.0
B42092 360 295 24.0
B42093 10 167 5.5
B42094 10 29 1.0
B42095 10 16 0.5
B42096 10 24 1.0
- ------------------------------------------------------------------
Great Basin Exploration & Mining
- ------------------------------------------------------------------
Sample # Au ppb Ag ppm As ppm Cu ppm Pb ppm Sb ppm Zn ppm
- ------------------------------------------------------------------
K1 681 30.2 1780 16000 15 10 211
K2 91 3.2 328 5600 21 172 360
K3 7 0.6 12 780 4 4 40
K4 87 8.1 6 12000 2 Tr 261
K5 4 0.7 123 820 260 28 390
K6 6 1.1 65 520 7 Tr 22
K7 5 1.2 8 2360 1 Tr 33
- ------------------------------------------------------------------
<PAGE>
W.C. HANSON
12161 - 228th Street
Maple Ridge, British Columbia
Canada V2X 6M2
COPPER VALLEY MINERALS LTD.
Vancouver, British Columbia
CONSENT OF GEOLOGICAL CONSULTANT
--------------------------------
I hereby consent to the inclusion of my report dated June 12, 1999
entitled "Summary Report on the New York Canyon Property of
Kleinebar Resources Ltd." with the Form 10-SB Registration
Statement to be filed by Copper Valley Minerals Ltd. with the
United States Securities and Exchange Commission.
Dated the 18th day of August, 1999
\s\ W.C. Hanson
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W.C. Hanson,
Consulting Geologist
