<PAGE> 1
PROXY STATEMENT
PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
- --------------------------------------------------------------------------
CONSOLIDATED SILVER CORPORATION
(Name of Registrant as Specified in Its Charter)
MICHAEL B. WHITE, Secretary
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(j)(2).
[ ] $500 per Each Party to the Controversy Pursuant to Exchange Act Rule
14a-6(i)(3).
[X] Fee Computed on Table Below Per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of Each Class of Securities to Which Transaction Applies:
NONE
(2) Aggregate Number of Securities to Which Transaction Applies: NONE
(3) Per Unit Price or Other Underlying Value of Transaction Computed
Pursuant to Exchange Act Rule 0-11: $750,000 PROPERTY SALE
(4) Proposed Maximum Aggregate Value of Transaction: $750,000
Set Forth the Amount on Which the Filing Fee Is Calculated and State How It
Was Determined.
Filing Fee: $150
PURSUANT TO 0-11(C)(2), THE FILING FEE IS 1/50 OF ONE PERCENT (1%)
OF THE AGGREGATE CASH VALUE TO BE RECEIVED BY THE REGISTRANT WHICH
IS $750,000. 1/50 OF ONE PERCENT (1%) OF $750,000 IS $150.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule, or Registration Statement No:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
CONSOLIDATED SILVER CORPORATION
6500 Mineral Drive
Coeur d'Alene, Idaho 83814-8788
September 15, 1995
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of
Shareholders of Consolidated Silver Corporation, which will be held
at 10:00 a.m., Pacific Daylight Time, on Wednesday, October 18,
1995, in the lower level conference facility at Washington Mutual
Financial Center, 601 West Main Avenue, Spokane, Washington.
At the Annual Meeting, Shareholders will be asked to approve the
sale of certain mining properties, consisting of patented and
unpatented mining claims together with certain plant, facilities,
and equipment located thereon ("Silver Summit Mine"), to Sunshine
Precious Metals, Inc.; to elect six directors to the Board of
Directors; to approve certain amendments to the Amended Articles of
Incorporation; and approve the appointment of Coopers & Lybrand as
the Company's independent auditors. For information with respect
to these matters, please refer to the Notice of Meeting and Proxy
Statement which are enclosed. In addition, reports of the
Corporation's operations and other matters of interest will be made
at the meeting.
Your Board of Directors respectfully recommends that you vote to
approve the sale of the Silver Summit Mine to Sunshine Precious
Metals, Inc.; to elect the directors nominated; to approve the
amendments to the Amended Articles of Incorporation; and to approve
the appointment of Coopers & Lybrand.
It is important that your shares be represented at the meeting
whether or not you are personally able to attend. You are,
therefore, urged to complete, date, and sign the accompanying Proxy
and mail it in the enclosed, postage-paid envelope as promptly as
possible.
Thank you for your cooperation.
Sincerely,
/s/ Ralph R. Noyes
- -------------------------------
Ralph R. Noyes, President
<PAGE> 3
CONSOLIDATED SILVER CORPORATION
6500 Mineral Drive
Coeur d'Alene, Idaho 83814-8788
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 18, 1995
TO THE SHAREHOLDERS OF CONSOLIDATED SILVER CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Consolidated Silver Corporation will be held on Wednesday, October
18, 1995, in the lower level conference facility at Washington
Mutual Financial Center, 601 West Main Avenue, Spokane, Washington,
at 10 a.m., Pacific Daylight Time, for the following purposes:
1. To consider and vote upon the sale of Silver Summit Mine (as
defined in Proxy Statement) to Sunshine Precious Metals, Inc.
2. To elect six members to the Board of Directors to serve for
one-year terms or until their respective successors are
elected and qualified.
3. To consider and vote upon the adoption of certain amendments
to the Amended Articles of Incorporation (except as set forth
in proposition 4, below).
4. To consider and vote upon the adoption of an amendment to the
Amended Articles of Incorporation eliminating cumulative
voting rights of common shares in the election of Directors.
5. To consider and vote upon the selection of Coopers & Lybrand
as the Company's independent auditors for 1995.
6. To transact such other business as may properly come before
the Annual Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on September
1, 1995, as the record date for the determination of the
Shareholders entitled to notice of, and to vote at, the Annual
Meeting and any adjournment or adjournments thereof. The stock
transfer books of the Corporation will not be closed.
Shareholders are requested to complete, sign, and return the
enclosed Proxy in the enclosed envelope. Your prompt response will
be appreciated.
By order of the Board of Directors,
MICHAEL B. WHITE, Secretary
September 15, 1995
Whether or not you plan to attend the Annual Meeting, please
complete, sign and date the accompanying Proxy and mail it at
once in the enclosed envelope, which requires no additional
postage if mailed in the United States. Your proxy will be
revocable, either in writing or by voting in person at the
Annual Meeting, at any time prior to its exercise.
<PAGE> 4
CONSOLIDATED SILVER CORPORATION
PROXY STATEMENT
SUMMARY OF CERTAIN PORTIONS OF THE PROXY STATEMENT
There are several matters to be considered at this Annual
Meeting of Shareholders. The first matter to be acted
upon is the sale of certain mining properties, consisting
of patented and unpatented mining claims together with
certain plant, facilities and equipment located thereon
(hereinafter "Silver Summit Mine") to Sunshine Precious
Metals, Inc. ("Sunshine"). A copy of the Purchase
Agreement is attached to the Proxy Statement as Exhibit
I. After careful deliberation, the Board of Directors
has decided to sell the Silver Summit Mine and redirect
the Company's efforts to an aggressive program of
exploration of silver projects in Mexico. The first
step in that process is the sale of the Silver Summit
Mine to provide the needed cash for the acquisition of
the Ojo Caliente Property from Hecla Mining Company. It
is the Company's intent to immediately apply for listing
of the Company 's stock for trading on the Vancouver
Stock Exchange ("VSE"). It is management's belief that
listing the Company's stock on the VSE will both provide
a measure of liquidity to Shareholders which they have
not enjoyed for several years and give the Company access
to a key source of venture capital funding for junior
resource companies engaged in Latin American mineral
exploration.
In addition to action upon the sale to Sunshine, the
Shareholders will be asked to consider and vote upon the
election of six (6) directors to the Board of Directors,
various amendments to the Articles of Incorporation, and
the appointment of Coopers & Lybrand as the Company's
independent auditor and public accountant.
<PAGE> 5
CONSOLIDATED SILVER CORPORATION
6500 Mineral Drive
Coeur d'Alene, Idaho 83814-8788
---------------------------------------------
PROXY STATEMENT
Relating to
Annual Meeting of Shareholders
to be held on October 18, 1995
----------------------------------------------------
INTRODUCTION
This Proxy Statement is being furnished by the Board of Directors
of Consolidated Silver Corporation (the "Company") to holders of
shares of the Company's Common Stock, par value $.10 per share (the
"Common Stock") in connection with the solicitation by the Board of
Directors of Proxies to be voted at the Annual Meeting of
Shareholders of the Company to be held on October 18, 1995, and any
adjournment or adjournments thereof (the "Annual Meeting") for the
purposes set forth in the accompanying Notice of Annual Meeting.
This Proxy Statement is first being mailed to Shareholders on or
about September 15, 1995.
PURPOSES OF ANNUAL MEETING
SALE OF MINERAL PROPERTY
At the Annual Meeting, Shareholders entitled to vote (See "Voting
at Annual Meeting") will be asked to consider and vote upon the
sale of the Silver Summit Mine to Sunshine Precious Metals, Inc.
(see "1. Sale of Silver Summit Mine to Sunshine").
ELECTION OF DIRECTORS
At the Annual Meeting, Shareholders will be asked to consider and
to take action on the election of six members to the Board of
Directors to serve for one-year terms or until their respective
successors are elected and qualified (see "2. Election of
Directors").
AMENDMENTS TO AMENDED ARTICLES OF INCORPORATION
At the Annual Meeting, Shareholders will be asked to consider and
vote upon the adoption of the amendments to the Company's Amended
Articles of Incorporation, except as set forth below with respect
to eliminating cumulative voting rights of common shares (see "3.
Amendments to Amended Articles of Incorporation").
<PAGE> 6
AMENDMENT TO AMENDED ARTICLES OF INCORPORATION ELIMINATING
CUMULATIVE VOTING RIGHTS OF COMMON SHARES
At the Annual Meeting, Shareholders will be asked to consider and
vote upon the adoption of an amendment to the Company's Amended
Articles of Incorporation to eliminate cumulative voting rights of
common shares in the election of Directors (see "4. Amendment to
the Company's Amended Articles of Incorporation Eliminating
Cumulative Voting Rights of Common Shares in the Election of
Directors").
SELECTION OF INDEPENDENT AUDITORS
At the Annual Meeting, Shareholders will be asked to consider and
vote upon the selection of Coopers & Lybrand as the Company's
independent auditors for 1995 (see "5. Approval of Auditors").
AS YOUR VOTE IS IMPORTANT, IT IS REQUESTED THAT YOU COMPLETE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE RETURN ENVELOPE
PROVIDED. Shares cannot be voted at the meeting unless the owner
is present to vote or is represented by Proxy.
VOTING AT ANNUAL MEETING
1. RECORD DATE. The Board of Directors of the Company has fixed
the close of business on September 1, 1995, as the record date
for the purpose of determining Shareholders of the Company
entitled to notice of and to vote at the Annual Meeting. At
the close of business on that date, the Company had 9,455,683
issued and outstanding shares of Common Stock (see "Recent
Market Prices"). A majority of such shares will constitute a
quorum for the transaction of business at the Annual Meeting.
Proxies which are submitted but are not voted for or against
(because of abstention, broker nonvotes or otherwise) will be
treated as present for all matters considered at the meeting.
2. SOLICITATION OF PROXIES. The accompanying Proxy is solicited
on behalf of the Board of Directors of the Company, and the
cost of solicitation will be borne by the Company. Following
the original mailing of the Proxies and soliciting materials,
directors, officers and employees of the Company may, but do
not presently intend, to solicit proxies by mail, telephone,
telegraph, or personal interviews. The Company may request
brokers, custodians, nominees, and other record holders to
forward copies of the proxies and soliciting materials to
persons for whom they hold shares of the Company and to
request authority for the exercise of proxies. In such cases,
the Company will reimburse such holders for their reasonable
expenses. The Company does not intend to utilize the services
of an outside proxy solicitation firm.
3. REVOCATION OF PROXY. Any proxy delivered in the accompanying
form may be revoked by the person executing the proxy by
written notice to that effect received by the Secretary of the
Company at any time before the authority thereby granted is
<PAGE> 7
exercised, by execution of a proxy bearing a later date
presented at the meeting, or by attendance of such person at
the Annual Meeting.
4. HOW PROXIES WILL BE VOTED. Proxies received by the Board of
Directors in the accompanying form will be voted at the Annual
Meeting as specified therein by the person giving the proxy.
If no specification is made with respect to the matters to be
voted upon at the meeting, the shares represented by such
proxy will be voted FOR the approval of the Sale of the Silver
Summit Mine to Sunshine Precious Metals, Inc.; FOR the
nominees to the Board of Directors in the election of
Directors; FOR the approval of the amendments to the Amended
Articles of Incorporation; FOR approval of the amendment to
the Company's Amended Articles of Incorporation eliminating
cumulative voting rights of common shares in the election of
Directors; and FOR approval of the appointment of Coopers &
Lybrand as the Company's independent auditors for the year
1995.
All shares represented by valid proxy will be voted at the
discretion of the proxy holders on any other matters that may
properly come before the meeting. However, the Board of
Directors does not know of any matters to be considered at the
meeting other than those specified in the Notice of Meeting.
5. VOTING POWER. Shareholders of the Common Stock of the Company
are entitled to one vote for each share held.
In the election of directors, owners of Common Stock have
cumulative voting rights. Under cumulative voting procedures,
each Shareholder has the right to vote in person or by proxy
the number of shares registered in his name for as many
persons as there are directors to be elected, or to cumulate
such shares and to give one candidate as many votes as shall
equal the number of directors to be elected multiplied by the
number of his shares, or distribute the votes so cumulated
among as many candidates as he may desire.
6. PRINCIPAL SHAREHOLDERS. The following table sets forth the
identity of the record owners of more than five percent (5%)
of the outstanding shares of any class of the Company as of
September 1, 1995:
<TABLE>
<CAPTION>
COMMON
STOCK PERCENT
SHAREHOLDER OWNED OUTSTANDING
<S> <C> <C>
Hecla Mining Company . . . . . . . 7,418,300 78.45%
</TABLE>
The Company does not know of any other person who held more than
five percent (5%) of the Company's outstanding Common Stock as of
September 1, 1995, or as of the date of the preparation of this
Proxy Statement.
7. REQUIRED APPROVALS. At a meeting of the Board of Directors of
the Company held June 16, 1995, the Directors unanimously
<PAGE> 8
adopted a resolution approving the sale of the Silver Summit
Mine to Sunshine Precious Metals, Inc., and an amendment to
the Company's Amended Articles of Incorporation increasing the
authorized shares of Common Stock from 10,000,000 to
20,000,000 shares. At a meeting of the Board of Directors of
the Company held August 31, 1995, the Directors unanimously
adopted resolutions approving the slate of directors for
election; all other proposed amendments of the Amended
Articles of Incorporation; and the appointment of Coopers &
Lybrand as the Company's independent auditors for the year
1995.
The election of directors will be accomplished by determining the
six nominees receiving the highest total votes. Although each of
the companies that were parties to the consolidation of the
Company's properties are entitled to a representative on the Board
pursuant to the Amended Articles of Incorporation so long as the
Company retains thirty percent (30%) of the shares originally
received, all parties holding such right have agreed to waive that
right in light of the proposed amendment to the Amended Articles of
Incorporation abolishing that right.
Approval of the amendments to the Amended Articles of Incorporation
(except as to the elimination of cumulative voting for directors)
and approval of auditors will be determined by the affirmative vote
of a majority of the shares entitled to vote thereon. The
amendment relating to the elimination of cumulative voting will
require the affirmative vote of the holders of at least three-
fourths (3/4) of the shares entitled to vote thereon.
RECENT MARKET PRICES
The Common Stock of the Company is traded on the over-the-counter
market and quotations are published on the National Association of
Securities Dealers Automated Quotation (NASDAQ) Bulletin Board and
in the National Quotation Bureau "pink sheets" under the symbol
CSLV. There has not been an established trading market for the
Common Stock and the below-described quotations, when available, do
not constitute a reliable indication of the price that a holder of
the Common Stock could expect to receive upon sale of any
particular quantity thereof.
The following table sets forth the high and low bid and ask prices
of the Company's Common Stock as provided by the National Quotation
Bureau for the quarterly periods indicated. The prices reported by
the National Quotation Bureau represent prices between dealers, do
not include retail markups, markdowns, or commissions and do not
necessarily represent actual transactions.
<TABLE>
<CAPTION>
Bid Asked
-------------- ----------------
High Low High Low
1995
<S> <C> <C> <C> <C>
January 3-March 31 $ .50 $ .25 $1.00 $ .625
April 3-June 30 $ .75 $ .55 $ .85 $ .65
August 31, 1995 $1.125 $1.06 $1.375 $1.375
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
1994
<S> <C> <C> <C> <C>
January 3-March 31 $ .50 $ .25 $1.00 $ .75
April 4-June 30 $ .50 $ .25 $1.00 $ .875
July 1-September 30 $ .50 $ .25 $1.00 $ .8125
October 3-December 30 $ .50 $ .25 $1.00 $ .8125
1993
January 4-March 31 $ .0625 $ .0625 $ .50 $ .50
April 1-June 30 $ .375 $ .0625 $ .75 $ .50
July 1-September 30 $ .50 $ .25 $ .875 $ .75
October 1-December 31 $ .50 $ .125 $ .875 $ .625
</TABLE>
The approximate number of holders of record of the Company's common
stock as of September 1, 1995, were 3,600.
THE FOLLOWING PROPOSALS ARE SUBMITTED TO THE SHAREHOLDERS FOR
CONSIDERATION AT THE ANNUAL MEETING OF SHAREHOLDERS:
1. SALE OF SILVER SUMMIT MINE TO SUNSHINE
HISTORY
The Company was formed for the purpose of consolidating contiguous
mineral properties located in the central portion of the Silver
Belt, Evolution Mining District, Shoshone County, Idaho, so that
further deep level development of the area could be undertaken
without concern for potential conflicts of ore ownership which
might otherwise arise due to complicated extralateral and
intralimital rights problems which would have existed had the
consolidation not occurred. The consolidation was completed on
January 31, 1969.
The mining properties consist of approximately 1,019 acres. The
properties are more particularly described in Exhibit A to the
Purchase Agreement appended hereto as Exhibit I (collectively
herein the properties are referred to as "Silver Summit Mine" or
the "Property").
The Silver Summit Mine property, currently a part of Consolidated
Silver Corporation, consists of a 300-ton-per-day flotation mill,
various surface support buildings and equipment, a mile-long adit
(tunnel) providing access to the top shaft level at which point a
hoist serves a 5,500 foot production shaft. A 1,000 foot offset
winze, equipped with a hoist, located 1,500 feet from the bottom of
the 3,000 foot level of the main shaft also provides access to the
4,000 foot level (approximately 1,338 feet below sea level) which
was the lowest producing level in the Silver Summit Mine. The mine
also serves as a secondary exit for the Sunshine mine, which
connects with the Consolidated Silver property.
The Company's properties are bordered on the west by the Sunshine
Unit Area and on the east by the Coeur d'Alene Mines Corporation's
Coeur Mine. All of the Company's holdings are south of the Osburn
fault, the major regional structural feature in the Coeur d'Alene
<PAGE> 10
District. The Polaris fault and the Chester and Silver Summit vein
systems are the principal structures within the area. These
geologic features trend east-west through the Company's holdings.
On August 1, 1980, the Shareholders of the Company approved a lease
of the properties to a joint venture composed of certain
substantial shareholders of the Company. This lease was terminated
by the Lessees effective February 11, 1988. On November 1, 1988,
the Company entered into a new Mining Lease and Agreement (the
"Agreement") of its properties to ASARCO. Due to continued
depressed metals prices and lack of exploration success, the
Agreement between the Company and ASARCO was terminated effective
August 17, 1992.
On July 13, 1993, the Company terminated an agreement entered into
with Merger Mines Corporation on July 2, 1968, for the lease of
approximately 288 acres consisting of 13 patented and five
unpatented mining claims.
There had been no ore production since the Company was formed in
1969 until the final months of 1980. Total production amounted to
1,998 tons of ore in 1980 and 27,584 tons of ore in 1981. The
Lessees, under the 1980 lease agreement suspended ore production in
early 1982 due to depressed metals prices. There are currently
about 70,000 tons of mineralized material averaging 20 ounces of
silver per ton, mostly located above the 4,000 foot level.
However, it is the Company's belief a considerable increase in the
price of silver in combination with the discovery of additional
reserves are needed for the mineralized material to be mined
profitably.
In excess of $17.2 million was expended on the project by the
lessee, under the 1980 lease agreement, since it commenced work in
the spring of 1980. Work consisted of rehabilitation of existing
mine workings and surface plant, shaft sinking, and exploration and
development activities primarily on the 5,400 feet level of the
mine. In addition, 25,824 feet of exploration diamond drilling was
completed. The only mineralization of consequence found in the
program was considered by the joint venture to be inadequate for
commercial production. On November 16, 1987, the joint venture
announced its election to terminate the lease which became
effective February 11, 1988. The net book value of the Company's
cost basis in the property, plant, and equipment was zero at
December 31, 1994. Because of the previous unsuccessful
exploration, the high cost of additional deep exploration on the
Property and the considerable increase in silver prices required to
develop deep reserves, management decided to seek a purchaser for
the Property and focus its efforts on exploration for larger and
lower cost silver reserves in Mexico.
TERMS OF AGREEMENT
The agreement to sell the Silver Summit Mine to Sunshine Precious
Metals, Inc. ("Sunshine") provides for the conveyance of the sub-
surface mineral rights and the mill site to Sunshine for $750,000
and a retained variable production royalty based on defined Net
Smelter Returns from any future production from the Property. The
<PAGE> 11
terms of the Royalty are set forth in Exhibit B to the Agreement
which is attached as Exhibit I.
Sunshine has acknowledged that the Company has advised Sunshine
that the Property was used by Consolidated Silver Corporation and
previous owners or lessees for mining activities; and that due to
past and present use of the Property, there may be Hazardous
Substances, as defined, or environmental conditions associated with
the Property. Except as specifically provided or disclosed in the
Agreement, the Company makes no warranty or representation of any
type or character, written or implied, regarding Hazardous
Substances situated on or environmental conditions associated with
the Property, or that the Company has complete knowledge or
information about these matters. Sunshine has agreed to accept the
Property in an "as is" condition.
The Company and Sunshine have agreed to an allocation of their
respective environmental liabilities whereby: (1) Sunshine assumes
all environmental, reclamation, and permit-related
responsibilities, obligations, and liabilities occurring on the
Property which arise from or relates to any Hazardous Substance Law
caused by, or arising from, or relating to activities on or
operations or ownership of or conditions existing on the Property,
whether prior to or after the Closing Date of the Agreement; (2)
the Company assumes all environmental and reclamation liability
occurring off-site (i.e., at any location except on the Property)
which arises from or relates to any Hazardous Substance caused by,
or arising from, or relating to activities on or operations or
ownership of or conditions existing on the Property prior to the
Closing Date of the Agreement; and (3) Sunshine assumes all
environmental and reclamation liability occurring off-site (i.e.,
at any location except on the Property) which arises from or
relates to any Hazardous Substance caused by, or arising from, or
relating to activities on or operations or ownership of or
conditions existing on the Property on or after the Closing Date of
the Agreement.
In entering into the terms set out in the Agreement, neither the
Company nor Sunshine admitted any liability to any third parties
regarding the matters addressed. The Company and Sunshine also
agreed and acknowledged that invocation of the cross indemnities
outlined therein may, depending on the facts, require the parties
to allocate between them responsibility for certain claims,
obligations, or liabilities.
POSSESSION. Sunshine currently has possession of the Property for
which it is paying a monthly fee of $5,000 to be credited toward
the Purchase Price.
CLOSING. Closing is to take place on the first business day
following approval of the Agreement by the Company's Shareholders
but in no event later than November 1, 1995, unless mutually
extended.
AN AFFIRMATIVE VOTE OF HOLDERS OF A MAJORITY OF THE COMMON STOCK
ENTITLED TO VOTE AT THE MEETING IS REQUIRED FOR APPROVAL OF THE
SALE. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE SALE OF THE
SILVER SUMMIT MINE. (SEE "DISSENTERS' RIGHTS").
<PAGE> 12
OJO CALIENTE PROJECT
Consolidated Silver plans to use the proceeds of the sale and other
available cash to invest in silver exploration projects. In this
regard, the Company also announced that it has entered into an
agreement to acquire Hecla Mining Company's right to earn a 50
percent interest in Minera El Morro, S.A. de C.V., which holds the
Ojo Caliente silver exploration project in Zacatecas, Mexico. The
agreement will be effective upon shareholder approval of the
transaction with Sunshine. The other investor in the project is
Minera Portree de Zacatecas, S.A. de C.V., a Mexican exploration
company. Consolidated Silver will acquire Hecla's interest in the
project by reimbursing Hecla an amount equal to that spent on the
property by Hecla.
The Ojo Caliente project includes at least four zones of
mineralization that have never been systematically explored. The
main veins have been mapped and sampled recently by Hecla. The
geology is similar to veins in the nearby Zacatecas District, which
has produced more than 600 million ounces of silver. Past
underground silver production in the Ojo Caliente area occurred in
the 1600s. The exploration plan for 1995 consists of 12 drill
holes totaling about 7,000 feet, which will test two of the four
vein systems at depth.
The Company will pay to Hecla in cash at Closing the aggregate of
all expenditures incurred by Hecla or Minera Hecla in its
acquisition and exploration costs related to the Ojo Caliente
Project to date in consideration of Hecla's grant of its rights
pursuant to the Ojo Caliente Agreement. Hecla's expenditures are
expected to be less than $800,000. In return, should the Company
decide to seek a partner to assist in developing the Ojo Caliente
Project or putting it into production, Hecla will have the first
opportunity to provide that assistance.
The Closing of the transactions pursuant to the Ojo Caliente
Agreement is to take place within three (3) business days after the
later of the Company's Annual Meeting of Shareholders or the
closing of the Company's agreement with Sunshine, but in no event
later than November 15, 1995.
NOTICE OF DISSENTERS' RIGHTS
RIGHT OF SHAREHOLDERS TO DISSENT AND OBTAIN PAYMENT FOR SHARES
Pursuant to Idaho Code 30-1-80(a)(2), any shareholder of a
corporation shall have the right to dissent from and to obtain
payment for his shares in the event of any sale, lease, exchange or
other disposition of all or substantially all of the property and
assets of the corporation not made in the usual or regular course
of its business. The sale of the Silver Summit Mine to Sunshine
meets this criteria for the right of Shareholders to dissent and
obtain payment for their shares. Shareholders who wish to dissent
and demand payment for their shares must refrain from voting their
shares in favor of the proposed sale.
<PAGE> 13
A shareholder's failure to vote against this proposal will not
constitute a waiver of appraisal or similar rights, and a vote
against the proposal will be deemed to satisfy notice requirements
pursuant to Idaho law. A further notice of Dissenter's Rights and
form for Demand of Payment will be sent to all Shareholders who
refrained from voting in favor of the proposed sale.
A copy of Idaho Code 30-1-80 and 30-1-81 is annexed to this Proxy
Statement as Exhibit II.
2. ELECTION OF DIRECTORS
At the meeting, six (6) Directors are to be elected who shall hold
office until the next Annual Meeting of Shareholders and until
their respective successors shall have been elected and qualified.
There were no meetings of the Board of Directors in 1994, and are
no standing audit, nominating or compensation committees of the
Board of Directors.
The proxies appointed in the accompanying Proxy intend to vote,
unless directed to the contrary therein, in their discretion,
cumulatively for the election to the Board of Directors of the six
persons named below, all of whom management believe are willing to
serve the Company in such capacity. However, if any nominee at the
time of election is unable or unwilling to serve, or is otherwise
unavailable for election, such that substitute nominees are
designated, the proxies in their discretion intend to vote
cumulatively for all or a lesser number of such other nominees.
The nominees for Directors, together with certain information with
respect to them, are as follows:
<TABLE>
<CAPTION>
COMMON SHARES OWNED
YEAR FIRST BECAME BENEFICIALLY, DIRECTLY OR
NAME AGE A DIRECTOR INDIRECTLY, AS OF SEPT. 1, 1995
<S> <C> <C> <C>
Ralph R. Noyes 47 1991 5,000
Michael B. White 44 1989 1,000
Gerald G. Carlson 49 Proposed None
Robert Stuart Angus 46 Proposed None
William J. Weymark 42 Proposed None
Charles F. Asher 73 1992 None
</TABLE>
RALPH R. NOYES has been President of the Company since 1991 and
Vice President of Metal Mining with Hecla Mining Company since
1988.
MICHAEL B. WHITE has been Vice President of the Company since 1992
and Secretary of the Company since 1982. Mr. White is Vice
President-General Counsel and Secretary of Hecla Mining Company.
GERALD G. CARLSON, PhD., P.ENG., has served as Vice President of
the Company since June 16, 1995. Prior to this, he was Vice
President of Exploration and Director of Dentonia Resources Ltd.
from February 1994. He is also a director of Ballatar Explorations
Ltd. He has previously been involved in managing and financing a
number of other junior exploration companies, has acted as an
independent consultant, and until 1993, was Adjunct Professor in
Economic Geology at the University of British Columbia. He has
<PAGE> 14
extensive experience in exploration in North, South, and Central
America; Australia; and Asia.
ROBERT STUART ANGUS is an attorney and partner in the Canadian law
firm of Smith, Lyons, Torrance, Stevenson & Mayer. He is located
in Vancouver, British Columbia. He serves on the board of
directors of Yamana Resources Inc., a Canadian mining exploration
company focusing on South American properties.
WILLIAM J. WEYMARK, B.SC., P.ENG. has been Vice President,
Operations, of Vancouver Wharves since 1991. Prior to that, he was
Vice President and General Manager of Curraugh Resources, a large
lead, zinc and silver open-pit mine in the Yukon. He is also a
director of Gold City Resources Ltd.
CHARLES F. ASHER is President of Plainview Mining Company. He has
served as a director of Merger Mines Corporation and Verna Mae
Mining Company since 1987.
COMPENSATION OF DIRECTORS AND OFFICERS
During the past three fiscal years, none of the officers have
received any compensation directly or indirectly for service to
the Company in such positions. Directors receive an attendance fee
of $150 per director's meeting attended. There were no meetings
of the Board of Directors in 1994.
OTHER TRANSACTIONS WITH MANAGEMENT
Hecla Mining Company receives a fee for general and administrative
expenses provided to the Company. During the years ended December
31, 1994 and 1993, the company received $26,885, $28,082,
respectively.
3. AMENDMENTS TO AMENDED ARTICLES OF INCORPORATION
AMENDMENT OF THE COMPANY'S AMENDED ARTICLES OF
INCORPORATION TO CHANGE CORPORATE NAME.
RESOLVED: That Article I of the Amended Articles of Incorporation
shall be amended as follows:
I.
Name
The name of this corporation is and shall be ConSil Corp.
DISCUSSION
The decision to change the name of the Company stems from the
Company's desire to list the Company on the Vancouver Stock
Exchange. There presently exists a British Columbia corporation
with a name so similar to the Company's current name as to prevent
listing the Company under its present name. The Board of Directors
have chosen a new corporate name as similar as possible. It is the
Directors' belief that the name change will have no adverse impact
or loss of good will to the Company. This is especially so in light
<PAGE> 15
of the fact that Shareholders and the brokerage community routinely
refer to the Company as "ConSil".
AMENDMENT OF THE COMPANY'S AMENDED ARTICLES OF
INCORPORATION TO CHANGE CORPORATE REGISTERED OFFICE IN
THE STATE OF IDAHO.
RESOLVED: That Article II of the Amended Articles of Incorporation
shall be amended to read as follows:
II.
The location and post office address of the corporation's
registered office in the State of Idaho shall be 6500 Mineral
Drive, Coeur d'Alene, Idaho 83814-8788.
AMENDMENT OF THE COMPANY'S AMENDED ARTICLES OF
INCORPORATION TO REWORD THE CORPORATE PURPOSE.
RESOLVED: That Article IV of the Amended Articles of Incorporation
shall be amended to read as follows:
IV.
Purpose
The purpose of this corporation shall be to transact any and all
lawful business for which corporations may be incorporated under
the Idaho Business Corporation Act, in general, to have and
exercise all the powers conferred by the laws of Idaho upon
corporations formed under the Idaho Business Corporation Act, and
to do any and all things herein set forth to the same extent as
natural persons might or could do.
DISCUSSION
This amendment is not intended to alter the Company's purpose in
any manner. Its purpose is merely for the sake of corporate
flexibility and simplification of the Amended Articles of
Incorporation.
AMENDMENT OF THE COMPANY'S AMENDED ARTICLES OF
INCORPORATION TO INCREASE AUTHORIZED COMMON STOCK AND
ALTER THE TERMS OF PREFERRED STOCK.
RESOLVED: That Article V shall be amended as follows:
V.
Shares
The authorized capital stock of the corporation shall consist of
two classes of stock, designated as "Common Stock" and "Preferred
Stock."
The total number of shares of Common Stock that the corporation
will have authority to issue is Twenty Million (20,000,000), $.10
<PAGE> 16
per share par value. All of the Common Stock authorized herein
shall have equal voting rights and powers without restrictions in
preference.
The total number of shares of Preferred Stock that the corporation
will have authority to issue is Ten Million (10,000,000). The
Preferred Stock shall have a stated value of $.25 per share. The
Preferred Stock shall be entitled to preference over the Common
Stock with respect to the distribution of assets of the corporation
in the event of liquidation, dissolution or winding-up of the
corporation, whether voluntarily or involuntarily, or in the event
of any other distribution of assets of the corporation among its
shareholders for the purpose of winding-up its affairs. The
authorized but unissued shares of Preferred Stock may be divided
into and issued in designated series from time to time by one or
more resolutions adopted by the Board of Directors. The Directors
in their sole discretion shall have the power to determine the
relative powers, preferences, and rights of each series of
Preferred Stock issued by the corporation.
DISCUSSION
The Company is currently authorized to issue 10,000,000 shares of
its Common Stock, par value $.10 per share, of which 9,455,683
shares were issued and outstanding and held of record by
approximately 3,600 Shareholders as of September 1, 1995, and
approximately no shares are reserved for issuance upon the exercise
of outstanding options, warrants, and conversion of outstanding
notes.
The Board of Directors has determined that it would be advisable
and in the best interest of the Company to increase the number of
authorized shares of Common Stock from 10,000,000 shares to
20,000,000 shares in order to provide the Company with an adequate
supply of authorized but unissued shares of Common Stock for
general corporate needs including obtaining additional financing,
possible stock dividends, employee incentive and benefit plans or
consummation of acquisitions at times when the Board, in its
discretion, deems it advantageous to do so. At present, the
Company has no commitment for the issuance of additional shares.
Accordingly, on June 16, 1995, the Company's Board of Directors
approved an amendment to the Company's Amended Articles of
Incorporation which would authorize an increase in the Company's
capital stock from 10,000,000 shares to 20,000,000 shares. If the
amendment is approved by the Shareholders, the Amended Articles of
Incorporation will be amended to reflect the increase.
All shares of Common Stock are equal to each other with respect to
voting, liquidation, dividend and other rights. Owners of shares
of Common Stock are entitled to one vote for each share they own
at any Shareholders' meeting. Holders of shares of Common Stock
are entitled to receive such dividends as may be declared by the
Board of Directors out of funds legally available therefor, and
upon liquidation are entitled to participate pro rata in a
distribution of assets available for such a distribution to
Shareholders. There are no conversion, preemptive or other
subscription rights or privileges with respect to any shares.
<PAGE> 17
The additional authorized shares of Common Stock resulting from the
proposal would, when issued, have the same rights as the issued and
outstanding existing shares of Common Stock. Shareholders of the
Company do not have preemptive rights nor will they as a result of
the proposal.
If the proposal is approved, the additional, authorized Common
Stock, as well as the currently authorized but unissued Common
Stock, would be available for issuance in the future for such
corporate purposes as the Board of Directors deems advisable from
time to time without the delay and expense incident to obtaining
shareholder approval, unless such action is required by applicable
law or by the rules of the National Association of Securities
Dealers, Inc., or of any stock exchange upon which the Company's
shares may then be listed. It should be noted that subject to the
limitations discussed above, all of the types of Board action with
respect to the issuance of additional shares of Common Stock that
are described in the preceding paragraphs can currently be taken
and that the power of the Board of Directors to take such actions
would not be enhanced by the proposal, although the proposal would
increase the number of shares of Common Stock that are available
for the taking of such action.
While the Board of Directors is seeking this authority from the
Shareholders at this time, other than as stated herein, it has no
present agreement, commitment, plan or intent to issue any of the
additional shares provided for in the proposal. If, however, the
need arises in the future to issue additional shares, there may not
be sufficient time to call a Shareholders' meeting to approve the
increase in authorized Common Stock.
On August 31, 1995, the Company's Board of Directors approved an
amendment to the Company's Amended Articles of Incorporation that
would authorize the Company to issue, from time to time as
determined by the Board of Directors, up to 10,000,000 shares of
Preferred Stock, with a par value of $.25 per share ("Preferred
Shares"). This proposal is intended to replace the existing
preferred shares as currently structured.
The current preferred shares are redeemable and are required to be
redeemed by the Company from a "fund" equal to 40 percent of the
retained net earnings of the Company after payment of all dividends
on preferred shares, but before payment of dividends on common
shares. Dividends on the preferred shares are cumulative and
payable at the rate of $6 per share beginning with the year in
which the Company receives income by reason of production from the
Company's property.
The Directors are of the opinion that the current preferred share
structure is unduly burdensome to the Company and could severely
restrict the Company's future financing efforts. In connection
with this proposed amendment to the Articles of Incorporation,
Hecla Mining Company exchanged its 12,500 shares of preferred stock
for 1,250,000 shares of the Company's Common Stock. On the date
hereof, no shares of preferred stock are outstanding.
<PAGE> 18
If the proposed amendment is approved, the Board of Directors would
be empowered without the necessity of further action or
authorization by the Company's Shareholders (unless such action or
authorization is required in a specific case by applicable laws or
regulations or stock exchange rules) to authorize the issuance of
the Preferred Shares from time to time in one or more series or
classes, and to fix by resolution the designations, preferences,
limitations, and relative rights of each such series or class.
Each series or class of Preferred Shares would, as determined by
the Board of Directors at the time of issuance, rank senior to the
Company's shares of Common Stock with respect to dividends and
redemption and liquidation rights. Although Preferred Shares are
currently authorized by the Company's Amended Articles of
Incorporation, no shares of Preferred Stock are currently
outstanding. The existing rights and preferences of the Preferred
Stock will be eliminated pursuant to the proposed amendment.
The Preferred Shares will provide authorized and unissued shares of
preferred stock which may be used by the Company for any proper
corporate purpose. Such purpose might include, without limitation,
issuance as part or all of the consideration required to be paid by
the Company in the acquisition of other businesses or properties,
or issuance in public or private sales for cash as a means of
obtaining additional capital for use in the Company's business and
operations. There are no transactions currently under review by
the Board of Directors which contemplate the issuance of Preferred
Shares.
It is not possible to state the precise effects of the
authorization of the Preferred Shares upon the rights of the
holders of the Company's Common Stock until the Board of Directors
determines the respective preferences, limitations and relative
rights of the holders of each class or series of the Preferred
Shares. Such effects might include, however: (a) reduction of the
amount otherwise available for payment of dividends on Common Stock
to the extent dividends are payable on any issued Preferred Shares;
(b) restrictions on dividends on the Common Stock; (c) dilution of
the voting power of the Common Stock to the extent that the
Preferred Shares had voting rights; (d) conversion of the Preferred
Shares into Common Stock at such prices as the Board determines,
which could include issuance at below the fair market value or
original issue price of the Common Stock; and (e) the holders of
Common Stock not being entitled to share in the Company's assets
upon liquidation until satisfaction of any liquidation preference
granted to holders of the Preferred Shares.
Although the Board of Directors would authorize the issuance of
additional Preferred Shares based on its judgment as to the best
interests of the Company and its Shareholders, the issuance of
authorized Preferred Shares could have the effect of diluting the
voting power and book value per share of the outstanding Common
Stock. In addition, the Preferred Shares could, in certain
instances, render more difficult or discourage a merger, tender
offer or proxy contest and thus potentially have an "anti-takeover"
effect, especially if Preferred Shares were issued in response to
a potential takeover. In addition, issuances of authorized
Preferred Shares can be implemented, and have been implemented by
some companies in recent years, with voting or conversion
<PAGE> 19
privileges intended to make acquisition of the Company more
difficult or more costly. Such an issuance could deter the types
of transactions which may be proposed or could discourage or limit
Shareholders' participation in certain types of transactions that
might be proposed (such as a tender offer), whether or not such
transactions were favored by the majority of the Shareholders, and
could enhance the ability of officers and directors to retain their
positions.
AMENDMENT OF THE COMPANY'S AMENDED ARTICLES OF
INCORPORATION TO CHANGE ELECTION OF DIRECTORS.
VI.
Directors
The number of directors of this corporation, who need not be
Shareholders, shall be not less than three, but in no event shall
the number of directors exceed nine. The number, qualifications,
terms of office, manner of elections, time and place of meeting and
the powers and duties of the directors shall be such as are
prescribed by the Bylaws of this corporation.
DISCUSSION
The Company is interested in becoming a listed company on the
Vancouver Stock Exchange. While there can be no assurance that the
Company's attempts to be listed on the Vancouver Stock Exchange
will be successful, the Directors are mindful of current provisions
of the Amended Articles of Incorporation that guarantee certain
shareholders the right to a position on the Company's Board of
Directors would be deemed unacceptable to the Vancouver Stock
Exchange. Pursuant to that end, the Board believes this amendment
to be necessary to eliminate potential conflicts with the
Vancouver Stock Exchange's listing requirements. The parties
affected by this amendment have all consented to this amendment.
AMENDMENT OF THE COMPANY'S AMENDED ARTICLES OF INCORPORATION
WITH REGARD TO INDEMNIFICATION AND LIABILITY OF DIRECTORS.
IX.
Indemnification and Liability of Directors
A Director of the Company shall not be personally liable to the
Company or its Shareholders for monetary damages as a Director
except for liability as specifically set forth in the Idaho
Business Corporations Act. Further, the Company is authorized to
indemnify, agree to indemnify, or obligate itself to advance or
reimburse expenses incurred by its Directors, Officers, employees,
or agents to the full extent of the laws of the State of Idaho as
may now or hereafter exist.
<PAGE> 20
AMENDMENT TO THE COMPANY'S AMENDED ARTICLES OF INCORPORATION
GIVING THE BOARD OF DIRECTORS POWER TO MODIFY OR ALTER
EXISTING BYLAWS OR ADOPT NEW BYLAWS SUBJECT TO RATIFICATION BY
THE SHAREHOLDERS AT THE NEXT ANNUAL OR SPECIAL MEETING.
X.
Bylaws
The Board of Directors shall have the power to modify and alter
existing Bylaws or adopt new Bylaws subject to ratification by the
Shareholders at the next Annual or Special Meeting.
THE AFFIRMATIVE VOTE OF HOLDERS OF A MAJORITY OF THE COMMON SHARES
ENTITLED TO VOTE AT THE MEETING IS REQUIRED FOR APPROVAL OF THE
ABOVE-DESCRIBED AMENDMENTS TO THE AMENDED ARTICLES OF INCORPORATION
AS SET FORTH IN THIS PROPOSAL. THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR APPROVAL OF THE PROPOSAL.
4. AMENDMENT TO THE COMPANY'S AMENDED ARTICLES OF INCORPORATION
ELIMINATING CUMULATIVE VOTING RIGHTS OF COMMON SHARES IN THE
ELECTION OF DIRECTORS TO THE COMPANY'S BOARD OF DIRECTORS.
XI.
Voting
The holders of any of the Corporation's capital stock shall possess
voting power for the election of Directors and for all other
purposes, subject to such limitations as may be imposed by law and
by any provision of the Articles of Incorporation in the exercise
of their voting power. The holders of capital stock shall be
entitled to one vote for each share held. Cumulative voting for
the election of Directors is hereby expressly prohibited.
DISCUSSION
In the election of directors, owners of Common Stock have
cumulative voting rights. Under cumulative voting procedures, each
Shareholder has the right to vote in person or by proxy the number
of shares registered in his name for as many persons as there are
directors to be elected, or to cumulate such shares and to give one
candidate as many votes as shall equal the number of directors to
be elected multiplied by the number of his shares, or distribute
the votes so cumulated among as many candidates as he may desire.
The Common Stock of the Company does now, but if this proposal is
approved will not, have cumulative voting rights which means that
the holders of more than 50 percent of the shares voting in an
election of directors may elect all of the directors if they choose
to do so. In such event, the holders of the remaining shares
aggregating less than 50 percent would not be able to elect any
directors.
<PAGE> 21
THE AFFIRMATIVE VOTE OF THE HOLDERS OF THREE-FOURTHS (3/4) OF THE
COMMON SHARES ENTITLED TO VOTE IS REQUIRED FOR THE APPROVAL OF THIS
PROPOSAL. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF
THE PROPOSAL.
5. SELECTION OF AUDITORS
From the Company's inception through the year ended December 31,
1994, the Company has retained Coopers & Lybrand as its independent
auditors. It shall be the Company's practice to refer to the
Shareholders the selection of the firm to audit its annual
financial statements.
The Board of Directors recommends a vote for the appointment of
Coopers & Lybrand as the independent auditors for the Company for
the year 1995. It is expected that a representative of Coopers &
Lybrand will be present at the Annual Meeting, will have an
opportunity to make a statement, and there will be an opportunity
to ask questions of the representative.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who
beneficially own more than ten percent (10%) of a registered class
of the Company's equity securities, to file reports of ownership
and changes in ownership with the SEC. Officers, directors and
greater than ten percent (10%) beneficial owners are required by
SEC regulation to furnish the Company with copies of all Section
16(a) forms filed by them.
Based solely on its review of copies of such forms furnished to the
Company, on written representations that no filings on Form 5
reports were required, and that all other required reports were
timely filed, the Company believes that during the fiscal year
ended December 31, 1994, the Company's officers, directors and
greater than ten percent (10%) beneficial owners complied with all
Section 16(a) filing requirements applicable to them.
ADDITIONAL SHAREHOLDER INFORMATION
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Any proposal which a shareholder intends to present at the next
Annual Meeting of Shareholders must be received by the Company
within a reasonable time prior to the next annual meeting, if it is
to be included in the Company's proxy statement and form of proxy
relating to the next annual meeting.
<PAGE> 22
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
The Company's Annual Report to the Securities and Exchange
Commission (Form 10-K) is available to Shareholders on the record
date free of charge for the Company's most recent fiscal year.
Requests should be addressed to:
Michael B. White
Consolidated Silver Corporation
6500 Mineral Drive
Coeur d'Alene, Idaho 83814-8788.
<PAGE> 23
EXHIBIT I
PURCHASE AGREEMENT
between
CONSOLIDATED SILVER CORPORATION
-and-
SUNSHINE PRECIOUS METALS, INC.
DATED: July 1, 1995
<PAGE> 24
PURCHASE AGREEMENT
INDEX
SECTION PAGE
1 Purchase And Sale Of Property............................1
2 Property.................................................1
3 Assumption Of Obligations And Liabilities By Sunshine....1
4 Purchase Price...........................................2
5 Possession...............................................2
6 Representations And Warranties Of Con Sil
a. Organization.........................................2
b. Qualification........................................2
c. Authorization and Approval of Agreement..............2
d. Ability to Carry Out Agreement.......................3
e. Governmental Licenses, Permits and Approvals.........3
f. Legal Proceedings; Compliance with Laws..............3
g. Broker's Fee.........................................4
h. Machinery and Equipment..............................4
i. Material Agreements and Instruments..................4
j. Title to Real Property...............................4
7 Representations And Warranties Of Sunshine
a. Organization.........................................5
b. Authorization and Approval of Agreement..............5
c. Ability to Carry Out Agreement.......................5
d. Broker's Fee.........................................6
8 Covenants Of Con Sil
a. Conduct of Business..................................6
b. Access to Properties, Books and Records..............6
c. Liens................................................7
d. Closing Letter.......................................7
9 Covenants Of Sunshine
a. Conduct of Business..................................7
b. Compliance with Law and Permits......................7
c. Maintenance of Property..............................7
d. Liens................................................7
e. Indemnity............................................8
f. Confidentiality......................................8
<PAGE> 25
PURCHASE AGREEMENT
INDEX (Continued)
SECTION PAGE
10 Closing..................................................8
11 Transfers And Deliveries By Sunshine
a. The Consideration....................................9
b. Written Opinion......................................9
c. Executed Counterparts...............................10
12 Transfers And Deliveries By Con Sil
a. Physical Possession.................................10
b. Bill of Sale........................................10
c. Deed................................................10
d. Written Opinion.....................................10
e. Certificates of Title or Origin.....................11
f. Closing Letter......................................11
13 Prorations
a. Ad Valorem Taxes....................................11
b. Utilities...........................................11
c. Other Proratable Expenses...........................11
14 Conditions To Obligations Of Sunshine
a. Shareholder Approval................................11
b. Satisfactory Proceedings............................11
c. Representations and Warranties Correct..............11
15 Conditions To Obligations Of Con Sil
a. Shareholder Approval................................12
b. Satisfactory Proceedings............................12
c. Representations and Warranties Correct..............12
d. Assumption..........................................12
16 Further Assurances Of Con Sil And Sunshine..............12
17 Books, Records, And Miscellaneous.......................12
<PAGE> 26
PURCHASE AGREEMENT
INDEX (Continued)
SECTION PAGE
18 Fees And Expenses
a. Fees................................................13
b. Expenses............................................13
19 Survival Of Representations And Warranties; Covenants
And Agreements
a. Representations and Warranties......................13
b. Covenants, Conditions and Agreements................13
20 Indemnification.........................................13
21 Environmental Matters...................................14
22 Shareholder Consent.....................................17
23 Termination Of Agreement................................17
24 Liability On Termination................................17
25 Surrender Of Possession On Termination..................17
26 Miscellaneous
a. Exhibits and Schedules..............................18
b. No Assignment, Successors, Assigns, Etc.............18
c. Governing Law.......................................18
d. Counterparts........................................19
e. Notices.............................................19
f. Amendment...........................................19
g. Entire Agreement....................................19
h. Waiver..............................................19
Exhibit A - Properties
Exhibit B - Royalty Deed
Exhibit C - Licenses and Permits
Exhibit D - Legal Proceedings
Exhibit E - Agreements and Instruments
Exhibit F - Deed
<PAGE> 27
PURCHASE AGREEMENT
THIS AGREEMENT is made the 1st day of July, 1995, between
Consolidated Silver Corporation, an Idaho corporation ("Con Sil"),
and Sunshine Precious Metals, Inc., a Delaware corporation
("Sunshine").
RECITALS
WHEREAS, Con Sil is the owner of certain mining properties
consisting of patented and unpatented mining claims, together with
certain plant, equipment and facilities located thereon; and
WHEREAS, Sunshine desires to purchase from Con Sil and Con Sil
desires to sell to Sunshine those certain assets owned by Con Sil
located in Shoshone County, Idaho, upon the terms and subject to
the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual promises, covenants and conditions herein contained, the
parties hereto agree as follows:
1. PURCHASE AND SALE OF PROPERTY. Upon the terms and subject to
the conditions set forth herein, Con Sil hereby agrees to
sell, convey, assign, transfer and deliver to Sunshine and
Sunshine hereby agrees to purchase, acquire and accept from
Con Sil as of 12:01 a.m. PST (the "Effective Time") on the
Closing Date, as defined in Section 10, all right, title and
interest in and to the Property, as defined in Section 2
hereof.
2. PROPERTY. The assets to be sold by Con Sil to Sunshine
pursuant to this Agreement (the "Property") shall include,
without limitation, all of Con Sil's transferable right, title
and interest in and to all property and assets, real and
personal, set forth in Exhibit "A" attached hereto and by this
reference incorporated herein.
3. ASSUMPTION OF OBLIGATIONS AND LIABILITIES BY SUNSHINE. Except
as set forth in this Agreement or the exhibits hereto,
Sunshine shall not assume or be responsible for any obligation
or liability of Con Sil whether fixed or contingent, known or
unknown, except to the extent required by agreement(s) between
Sunshine and another party or parties. Sunshine shall be
entitled to claim and assert any defense by way of
counterclaim, off-set, statute of limitations, or otherwise,
or any other rights of Con Sil with respect to any and all
such debts, obligations and liabilities of Con Sil, to the
same extent as Con Sil would be entitled to do absent the
assumption thereof by Sunshine.
<PAGE> 28
4. PURCHASE PRICE. The Purchase Price payable to Con Sil as
consideration for the sale of the Property shall be paid as
follows:
a. SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($750,000) to be
paid at the rate of FIVE THOUSAND DOLLARS ($5,000) per
month from the date hereof with the balance due at
Closing.
b. As additional consideration Sunshine shall pay Con Sil a
Production Royalty under the terms of the Royalty Deed
set forth in Exhibit "B" attached hereto.
5. POSSESSION. Sunshine shall be entitled to immediate
possession of the Property upon execution of this Agreement.
Sunshine shall have free and unrestricted access to the
Property and shall have the exclusive right to enter upon and
occupy the Property for all purposes reasonably incident to
exploring for, developing, mining (by underground mining,
surface mining or any other method), extracting, milling,
stockpiling, storing, processing, removing and marketing
therefrom all ores, minerals and materials of every nature or
sort including the right of placing, constructing,
maintaining, using and, thereafter, removing such structures,
facilities, equipment, roadways, haulageways and other
improvements as may be necessary, useful or convenient for the
full enjoyment of all of the rights granted to Sunshine
herein.
6. REPRESENTATIONS AND WARRANTIES OF CON SIL. Con Sil represents
and warrants to Sunshine that:
a. ORGANIZATION. Con Sil is a corporation duly organized,
validly existing and in good standing under the laws of
the State of Idaho and has all requisite power and
authority (corporate and other) to own, use or deal in
the Property.
b. QUALIFICATION. Con Sil is duly qualified to do business
and is in good standing in those states or other
jurisdictions where qualification is required in
connection with the ownership of, use of or dealing in
the Property.
c. AUTHORIZATION AND APPROVAL OF AGREEMENT. The execution,
delivery and performance by Con Sil of this Agreement and
all documents contemplated hereby have been duly and
effectively authorized by all necessary corporate action
on the part of Con Sil, and, except for approval by its
directors and stockholders, no consent, approval or other
action is required by Con Sil's Certificate of
Incorporation, By-Laws or otherwise.
<PAGE> 29
d. ABILITY TO CARRY OUT AGREEMENT. Con Sil is not a party
to, subject to or bound by any judgment, order, writ,
injunction or decree of any court or governmental body
which would (i) prevent the carrying out of this
Agreement, or (ii) materially adversely affect its
ownership and use of the Property. Neither the execution
and delivery of this Agreement by Con Sil, nor the
performance of Con Sil's obligations hereunder, will
constitute a violation of, or be in conflict with, or
result in the breach of, or constitute a default under,
or create (or cause the acceleration of the maturity of)
any debt, obligation or liability pursuant to, or result
in the creation or imposition of any security interest,
lien or other encumbrance upon the Property under (i) any
term or provision of the Certificate of Incorporation or
By-Laws of Con Sil, (ii) any obligation of Con Sil under
any loan or financing agreement, lease or other agreement
or instrument of any kind to which Con Sil is a party.
No consent or approval of any federal, state or local
authority is required for Con Sil's consummation of the
sale of the Property.
e. GOVERNMENTAL LICENSES, PERMITS AND APPROVALS. Con Sil
has attached as Exhibit "C" hereto a list of all federal,
state and local governmental licenses, permits,
contracts, agreements and approvals currently held or
being applied for by Con Sil pertaining to the Property
and all agreements and contracts between or among any
federal, state or local governmental authority, agency or
instrumentality and Con Sil relating to the Property and
which are not listed on other Exhibits hereto. All such
licenses, permits, contracts, agreements and approvals
are in full force and effect unless otherwise indicated
in Exhibit "C";
f. LEGAL PROCEEDINGS; COMPLIANCE WITH LAWS. Except as set
forth in Exhibit "D", attached hereto, no litigation,
proceedings or governmental investigation is pending or,
to the knowledge of a principal officer of Con Sil or Con
Sil, threatened with respect to Con Sil or the Property,
nor is Con Sil operating under or subject to, or in
default with respect to, any order, writ, injunction, or
decree of any court or governmental agency or body as of
the date of this Agreement. To the best of Con Sil's
knowledge, it has substantially complied with all laws,
rules and regulations, federal, state and local, which
affect the Property. There are no outstanding material
commitments to federal, state or local governmental
authorities for corrective action which require Con Sil
to act with respect to health, safety or the environment
and which relate to the operation or condition of the
Property, except as disclosed in Exhibits "C" and "D".
<PAGE> 30
The disclosures in Exhibit "D" relate to certain
environmental investigations and proceedings and the
possibility that claims relating to such investigations
and proceedings may be asserted in the future with
respect to the Property. Prior to the date hereof, Con
Sil has not received any notice or claim that it is a
potentially responsible party in any proceedings set
forth in Exhibit "D" and, to the best of its knowledge,
Con Sil is not aware that any such claims have been made
against Con Sil.
g. BROKER'S FEE. Con Sil has not caused to be incurred for
or by Sunshine any liability for any fee or commission in
the nature of a finder's, originator's or broker's fee in
connection with the subject matter of this Agreement.
h. MACHINERY AND EQUIPMENT. All machinery, equipment,
supplies, fixtures, vehicles and all other personal
property located in or on the Property are sold in the
condition existing at the Effective Time. Con Sil makes
no warranty or representation, express or implied, as to
merchantability, fitness for a particular purpose or
otherwise.
i. MATERIAL AGREEMENTS AND INSTRUMENTS. Except as set forth
in other Exhibits to this Agreement, Con Sil has attached
as Exhibit "E" hereto a list and brief description of all
contracts, indentures, guarantees, agreements, or other
instruments relating to the Property to which Con Sil is
a party as of the date hereof and which are to be
assigned and assumed by Sunshine pursuant to this
Agreement. Con Sil is not in default or breach, in any
material respects, under any of the foregoing and to the
best of Con Sil's knowledge no event has occurred which,
with the lapse of time or the giving of notice or both
would constitute such a material default or breach by Con
Sil except as set forth in Exhibit "E". Con Sil has
provided to Sunshine copies of all such material
contracts, indentures, guarantees, agreements, or other
instruments listed in Exhibit "E".
j. TITLE TO REAL PROPERTY. As to the real property
described in Exhibit "A", with the exception of the
unpatented mining claims, Con Sil warrants as follows:
i) Con Sil has, to the best of its knowledge, good and
marketable title in fee simple or such lesser
estate indicated on Exhibit "A".
ii) Con Sil has not, prior to the time of this
Agreement, conveyed any interest in said property
<PAGE> 31
to any third party except as indicated on Exhibit
"A".
iii) The property is free from all liens, encumbrances
and charges done, made, or suffered by Con Sil or
its agents, except for a) current taxes and
assessments not delinquent, and b) liens,
encumbrances, and charges which do not materially
detract from the value of or interfere with the use
of the properties subject thereto or affected
thereby.
iv) Sunshine shall have quiet enjoyment against Con Sil
and its agents.
v) As to the unpatented mining claims, Con Sil
warrants that, to the best of its knowledge,
information and belief, said claims have been
located and maintained in compliance with all
applicable laws in the State of Idaho and the
United States of America; that the land subject to
the unpatented claims has not now been claimed by
any third party; that Con Sil has filed all
required proofs of labor with respect to the same;
provided, however, Con Sil does not warrant against
a claim of invalid discovery by any third party.
7. REPRESENTATIONS AND WARRANTIES OF SUNSHINE. Sunshine
represents and warrants to Con Sil that:
a. ORGANIZATION. Sunshine is a corporation duly organized,
validly existing and in good standing under the laws of
the State of Delaware and has all requisite power and
authority (corporate and other) to carry on its business
as now being conducted.
b. AUTHORIZATION AND APPROVAL OF AGREEMENT. The execution,
delivery and performance by Sunshine of this Agreement
and all documents contemplated hereby have been duly and
effectively authorized by all necessary corporate action
on the part of Sunshine, and no consent, approval or
other action by its stockholders is required by
Sunshine's Certificate of Incorporation, By-Laws or
otherwise.
c. ABILITY TO CARRY OUT AGREEMENT. Sunshine is not a party
to, subject to, or bound by any judgment, order, writ,
injunction, or decree of any court or governmental body
which would prevent the carrying out of this Agreement.
Neither the execution and delivery of this Agreement nor
the performance of Sunshine's obligations hereunder will
constitute a violation of, or be in conflict with, or
<PAGE> 32
result in the breach of, or constitute a default under
(i) any term or provision of the Certificate of
Incorporation or By-Laws of Sunshine, (ii) any obligation
of Sunshine under any loan or financing agreement, lease
or other agreement or instrument of any kind to which
Sunshine is a party, or (iii) any statute or law. No
consent or approval of any Federal, state or local
authority is required for the consummation or validity
of the purchase of the Property.
d. BROKER'S FEE. Sunshine has not caused to be incurred for
or by Con Sil any liability for any fee or commission in
the nature of a finder's, originator's or broker's fee in
connection with the subject matter of this Agreement.
8. COVENANTS OF CON SIL. It is covenanted and agreed that
between the date hereof and the Closing Date:
a. CONDUCT OF BUSINESS. Con Sil shall not, without the
prior written consent of Sunshine:
i. enter into any agreement (other than agreements
entered into in the ordinary course of business)
which will become an obligation of Sunshine or
would otherwise affect the Property;
ii. lease, mortgage, or otherwise encumber any of the
Property; or
iii. enter into discussions or negotiations with any
third party concerning the sale of any of the
Property or timber rights associated with the
Property prior to the Closing Date, or grant
options or rights, or enter into any contract or
commitment to sell any of the Property or timber
rights.
b. ACCESS TO PROPERTIES, BOOKS AND RECORDS. Con Sil has
made and will, during normal business hours and subject
to reasonable notification by Sunshine to Con Sil, and
subject to Con Sil's reasonable requirements and rules,
permit Sunshine and Sunshine's authorized officers,
employees, attorneys, engineers, accountants and other
agents and representatives to have access to the
properties, books and records, and documents relating to
the Property. Con Sil shall have the right, in lieu
thereof, where such information is included within Con
Sil's other corporate records, to make copies of or
provide such information from such books and records and
documents as Sunshine may from time to time reasonably
request.
<PAGE> 33
c. LIENS. Con Sil will have discharged or released by the
Closing Date all mortgages, liens (except liens, if any,
for taxes not yet due and inchoate liens of materialmen,
mechanics, workmen, repairmen, employees or other similar
liens arising in the ordinary course of business which
are not delinquent or which are bonded, all of which it
agrees to discharge in due course unless such are to be
assumed by Sunshine as provided herein), security
interests and encumbrances on the Property and
properties.
d. CLOSING LETTER. Con Sil shall provide Sunshine a letter
from the Vice President of Con Sil at Closing to the
effect that from the date of signing this Agreement to
the Effective Time there has been no material change in
respect to the Property, except for changes resulting
from Sunshine's activities pursuant to its right of
possession of the Property, and that all disclosures in
Exhibits "A", "C", "D", and "E" are current as of the
Effective Time.
9. COVENANTS OF SUNSHINE. It is covenanted and agreed that
between the date hereof and the Closing Date:
a. CONDUCT OF BUSINESS.
i. Sunshine shall perform or cause to be performed all
work upon the Property in a good and workmanlike
manner and in accordance with sound mining and
engineering practices.
ii. Sunshine shall not, without the prior written
consent of Con Sil, lease, mortgage, or otherwise
encumber or assign any interest in the Property.
b. COMPLIANCE WITH LAW AND PERMITS. All work performed or
caused to be performed by Sunshine upon the property
shall be in substantial compliance with all applicable
federal, state and local laws, rules and regulations and
Sunshine shall comply with all licenses and permits set
forth in Exhibit "C".
c. MAINTENANCE OF PROPERTY. Sunshine shall take or cause to
be taken such steps as shall be necessary to maintain the
Property in good standing.
d. LIENS. Sunshine agrees to keep the Property free and
clear from any liens arising from Sunshine's operations
and pay promptly for all labor performed, and for all
supplies, material and equipment used or placed on the
Property by or for it, provided that any such lien placed
upon the Property shall not be a breach of this section
<PAGE> 34
provided that Sunshine, in good faith, is diligently
contesting the validity of such lien.
e. INDEMNITY. Sunshine shall indemnify and save harmless
Con Sil from and against any and all claims, demands,
suits or causes of action in law or equity of whatsoever
kind and character resulting from any act, operations or
negligence of Sunshine on the Property or in connection
therewith between the date hereof and the Closing Date.
f. CONFIDENTIALITY. In the event of the termination of this
Agreement, Sunshine shall promptly return to Con Sil all
documents, work papers, and other material obtained by
Sunshine or on its behalf from Con Sil or Con Sil's
representatives as a result of this Agreement or in
connection herewith, whether so obtained before or after
the execution hereof, and Sunshine shall not retain any
copy or other reflection of any such documents, work
papers and other material. Sunshine shall at all times
prior to the Closing Date, and in the event of
termination of this Agreement, cause any information so
obtained to be kept confidential and will not use, or
permit the use of, such documents, work papers and other
materials in its business or in any other manner or for
any other purpose, unless such information (i) becomes
generally available to the public other than as a result
of a disclosure by Sunshine or its representatives, (ii)
was available to Sunshine on a non-confidential basis
prior to its disclosure to Sunshine by Con Sil or its
representatives, or (iii) becomes available to Sunshine
on a non-confidential basis from a source other than Con
Sil or its representatives, provided that such source is
not bound by a confidentiality agreement with Con Sil or
its representatives; provided, further, that to the
extent information obtained by Sunshine as a result of
this Agreement, whether so obtained before or after the
execution hereof, relates to Con Sil or any affiliate,
Sunshine's obligation hereunder shall survive for a
period of three years from the date of this Agreement and
shall not terminate on the Closing Date or upon
termination of this Agreement.
g. Sunshine shall permit Con Sil's representative access to
the Property and to all information (including, without
limitation, all exploration results) generated or
acquired by Sunshine with respect to the Property.
10. CLOSING. The Closing shall take place at 9:00 a.m., local
time, in the offices of Con Sil located at 6500 Mineral Drive,
Coeur d'Alene, Idaho, 83814, on the first business day
following approval of the Agreement by the Con Sil
shareholders, or such other date mutually agreed upon in
<PAGE> 35
writing by the parties hereto (the "Closing Date"), provided
that the Closing must occur prior to November 1, 1995, unless
extended by mutual written agreement.
11. TRANSFERS AND DELIVERIES BY SUNSHINE. Sunshine shall execute,
where applicable, and deliver to Con Sil at the Closing the
following:
a. The Consideration provided for in Section 4 hereto
consisting of:
i. Seven hundred fifty thousand dollars ($750,000) less the
sum of the monthly five thousand dollars ($5,000)
payments made from the date of this Agreement until
Closing; and
ii. the Royalty Deed set forth in Exhibit "B".
b. Written Opinion of the legal counsel of Sunshine, dated
as of the Closing Date, substantially stating, in his
opinion, that Sunshine's corporate existence and good
standing are as represented in Section 7 hereof; that
Sunshine has taken all corporate action necessary to
authorize the execution and performance of this
Agreement; that this Agreement and the instruments
delivered by Sunshine to Con Sil pursuant to or in
connection with this Agreement have been duly executed
and delivered by Sunshine and are valid, binding and
enforceable against Sunshine in accordance with their
respective terms (except to the extent that enforcement
is affected by laws pertaining to bankruptcy,
reorganization, insolvency and creditors' rights and by
the availability of injunctive relief and specific
performance); that neither the execution and delivery by
Sunshine of this Agreement nor its compliance herewith,
will conflict with Sunshine's Certificate of
Incorporation or By-Laws, or to his knowledge will result
in a default under or breach of the terms, conditions or
provisions of any agreement or instrument to which
Sunshine is a party or by which it may be bound; and that
neither the execution and delivery of this Agreement by
Sunshine nor its compliance herewith will result in a
violation of any statute, regulation, law, ordinance, or,
to the best of his knowledge, order, writ, judgment or
decree of any court, agency or governmental authority;
that Sunshine is not a party to or affected by any
pending legal, administrative or other action which
materially affects Sunshine's execution, delivery and
performance of this Agreement.
<PAGE> 36
c. Executed Counterparts of all transfers and assignments
and assumptions (where required) to transfer or assign to
Sunshine the Property.
12. TRANSFERS AND DELIVERIES BY CON SIL. Con Sil shall execute,
where applicable, and deliver to Sunshine at the Closing,
unless otherwise provided herein, the following:
a. Physical Possession of all tangible property constituting
part of the Property.
b. Bill of Sale for such, if any, of the personal property
requiring a transfer of title to Sunshine.
c. Deed conveying to Sunshine the interests in patented
mining claims, certain fee property and unpatented mining
claims to be conveyed hereunder, in the form of Exhibit
"F" hereto.
d. Written Opinion of legal counsel for Con Sil, dated as of
the Closing Date, substantially stating, in his opinion,
that Con Sil's corporate existence and good standing are
as stated in Section 6 hereof; that Con Sil has taken all
corporate action necessary to authorize the execution and
performance of this Agreement; that this Agreement and
the instruments delivered by Con Sil to Sunshine pursuant
to or in connection with this Agreement have been duly
executed and delivered by Con Sil and are valid, binding
and enforceable against Con Sil in accordance with their
terms (except to the extent that enforcement is affected
by laws pertaining to bankruptcy, reorganization,
insolvency and creditors' rights and by the availability
of injunctive relief and specific performance); that
neither the execution and delivery by Con Sil of this
Agreement nor its compliance herewith will conflict with
Con Sil's Certificate of Incorporation or By-Laws or
result in the creation or imposition of any lien, charge
or encumbrance upon the Property or, to the best of his
knowledge, result in a default under, or a breach of the
terms, conditions or provisions of, any agreement or
instrument affecting ownership and use of the Property
to which Con Sil is a party or by which it is bound; that
Con Sil is not a party to, nor subject to or bound by,
any judgment, injunction or decree of any court or
governmental authority which may restrict or interfere
with the performance of this Agreement or such other
instruments and documents; that except as set forth in
Exhibit "D" hereto, to the best of his knowledge, Con Sil
is not a party to, or affected by, any pending legal,
administrative or other action, which materially
adversely affects the Property;
<PAGE> 37
e. Certificates of Title or Origin (or like documents) with
respect to any item of equipment for which a certificate
of title or origin is required;
f. Closing Letter as provided for in Section 8d.
13. PRORATIONS. Expenses which will require proration will be
prorated as follows:
a. AD VALOREM TAXES. All ad valorem taxes (both real and
personal property) shall be prorated between the parties
as of the Closing Date and cash settlement therefore
shall be made at Closing.
b. UTILITIES. Con Sil will request that utility companies
take meter readings or follow similar procedures to
invoice Con Sil for services provided through the
Effective Time, which invoices shall be paid by Con Sil.
Other utility bills received after the Effective Time
which require proration will be paid by Sunshine.
Sunshine will invoice Con Sil for its pro rata share of
such invoices and will be promptly reimbursed by Con Sil.
c. OTHER PRORATABLE EXPENSES. Invoices received after the
Effective Time for other proratable expenses will be paid
by Sunshine. Sunshine will invoice Con Sil for its pro
rata share of such invoices and will be promptly
reimbursed by Con Sil.
14. CONDITIONS TO OBLIGATIONS OF SUNSHINE. The obligation of
Sunshine to close under this Agreement is subject to the
satisfaction at or prior to the Closing Date of each of the
following conditions precedent, unless waived by Sunshine:
a. SHAREHOLDER APPROVAL. The Con Sil Shareholders shall
have approved this Agreement.
b. SATISFACTORY PROCEEDINGS. All actions to be taken by Con
Sil in connection with the transactions contemplated
hereby and all instruments and documents required to be
delivered by Con Sil in connection therewith or incident
thereto shall be satisfactory to Sunshine and its
counsel.
c. REPRESENTATIONS AND WARRANTIES CORRECT. The
representations and warranties of Con Sil contained in
Section 6 of this Agreement shall be true and correct on
and as of the Closing Date in all material respects.
<PAGE> 38
15. CONDITIONS TO OBLIGATIONS OF CON SIL. The obligation of Con
Sil to close under this Agreement is subject to the
satisfaction at or prior to the Closing Date of each of the
following conditions precedent, unless waived by Con Sil:
a. SHAREHOLDER APPROVAL. The Con Sil Shareholders shall have
approved this Agreement and the holders of no more than
333,000 shares of Con Sil Common Stock shall have
exercised dissenters' rights.
b. SATISFACTORY PROCEEDINGS. All actions to be taken by
Sunshine in connection with the transactions contemplated
hereby and all instruments and documents required to be
delivered by Sunshine in connection therewith or incident
thereto shall be satisfactory to Con Sil and its counsel.
c. REPRESENTATIONS AND WARRANTIES CORRECT. All
representations and warranties of Sunshine contained in
Section 7 of this Agreement shall be true and correct on
and as of the Closing Date in all material respects.
d. ASSUMPTION. Sunshine shall have assumed the contracts,
permits, leases and obligations set forth in Sections C and E.
16. FURTHER ASSURANCES OF CON SIL AND SUNSHINE. After the Closing
Date, Con Sil shall perform such other actions, and shall
execute, acknowledge and deliver such assignments, transfers,
consents and other documents as Sunshine reasonably requests
to convey title to purchaser and protect Sunshine's right,
title and interest in, and enjoyment of, the Property intended
to be assigned and transferred to Sunshine pursuant to this
Agreement; and Sunshine shall perform all such other action
and shall execute, acknowledge and deliver all such other
documents as Con Sil may reasonably request to perfect and
protect Con Sil's rights under this Agreement. Each party
agrees to cooperate with the other party, at its own cost and
expense, with respect to the defense of any claims or
litigation commenced by any third party against the other
party subsequent to the Closing Date which relates to Con Sil
or the Property, and shall provide such witnesses and
documents as the other party reasonably requests.
17. BOOKS, RECORDS, AND MISCELLANEOUS. On the Closing Date, or as
soon thereafter as is practicable, Con Sil shall turn over to
Sunshine all of the books, records, maps, personal property
tax returns and files, or copies thereof (the "Documents")
which relate solely to the Property. Both prior to and after
the Closing Date, Con Sil agrees to make its books and
records relating to the Property available for inspection by
Sunshine at any reasonable time upon reasonable request, or,
in lieu thereof and at Con Sil's option, shall make such
<PAGE> 39
copies or provide such information from such books and records
as Sunshine may from time to time reasonably request. After
the Closing Date, the Documents will be retained by Sunshine
in part for Con Sil's benefit and will be available for review
and copying by Con Sil for any proper purpose upon reasonable
notice during Sunshine's normal business hours. Con Sil or
Sunshine, as the case may be, shall use their best efforts not
to destroy any Documents without 30 days prior written notice
to the other, for a period of 5 years after the Closing Date.
18. FEES AND EXPENSES.
a. FEES. Sunshine shall pay all transfer fees payable in
connection with the purchase and sale hereunder, and all
recordation and filing fees and other fees relating to
the documents.
b. EXPENSES. Each of the parties hereto will pay its own
expenses incident to the preparation and carrying out of
this Agreement and the expenses and fees involved in the
preparation and delivery of all documents, reports and
opinions required to be delivered by or on behalf of it
hereunder, whether or not the transactions contemplated
hereby are consummated.
19. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; COVENANTS AND
AGREEMENTS.
a. REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in Sections 6 and 7 shall survive
the Closing Date from the Effective Time until December
31, 1996, at which time they shall automatically
terminate and shall not merge into any of the deeds,
assignments, bill of sale or other instruments delivered
at Closing.
b. COVENANTS, CONDITIONS AND AGREEMENTS. The Covenants and
Conditions set forth in Sections 8 and 9 (except for
Sections 8c, 8e, 9e, and 9f), shall terminate as of and
shall not survive the Closing Date.
c. Except as otherwise provided in Sections 19a and 19b, all
the obligations of each party under Section 20 shall
survive the Closing Date.
20. INDEMNIFICATION. The parties hereto shall be indemnified as
follows:
a. Con Sil shall defend, indemnify and hold harmless
Sunshine, its officers, directors, successors and assigns
against all damages, claims, losses, liabilities, costs
and expenses which arise out of the breach of the
<PAGE> 40
representations and warranties, the covenants and
agreements which survive the Closing pursuant to Section
19 except for loss of profits; consequential, incidental
or special damages.
b. Sunshine shall defend, indemnify and hold harmless Con
Sil, its officers, directors, successors and assigns
against all damages, claims, losses, liabilities, costs
and expenses which arise out of the breach of the
representations and warranties, the covenants and
agreements which survive the Closing pursuant to Section
19 except for loss of profits; consequential, incidental
or special damages.
c. The right of either party to indemnification hereunder is
contingent on receipt by the indemnifying party of a
promptly delivered written notice of a claim for
indemnification from the party seeking such
indemnification.
d. Upon receipt of a notice claiming indemnification the
indemnifying party shall proceed to assume the defense
with respect to any third party litigation then pending
with respect to such claims.
e. The party seeking indemnification for any third party
claims pursuant to this Section shall have the right, at
its sole cost and expense, to participate in any legal
action in respect of which indemnification is sought,
provided, however, that the party from whom
indemnification is sought shall have the sole right to
settle or otherwise dispose of such legal action in any
manner it deems appropriate without the consent of the
other party.
f. In the event that, after receipt of notice under Section
20c above, the indemnifying party fails to assume the
defense of any action brought by a third party where the
obligation to defend is owed to the party seeking
indemnification, then the party seeking indemnification
shall be entitled to its reasonable attorney's fees in
addition to recoveries allowed under this Section.
21. ENVIRONMENTAL MATTERS. Sunshine acknowledges that Con Sil has
advised Sunshine that: (i) the Property was used by Con Sil
and previous owners or lessees for mining activities; and (ii)
due to the past and present use of the Property, there may be
Hazardous Substances or environmental conditions associated
with the Property. Except as specifically provided or
disclosed in this Section 21, Con Sil makes no warranty or
representation of any type or character, written or implied,
regarding Hazardous Substances situated on or environmental
<PAGE> 41
conditions associated with the Property, or that Con Sil has
complete knowledge or information about these matters.
Sunshine hereby agrees to accept the Property in an "as is"
condition.
Con Sil and Sunshine hereby agree to an allocation of their
respective environmental liabilities whereby: (1) Sunshine
hereby assumes all environmental, reclamation, and permit-
related responsibilities, obligations and liabilities
occurring on the Property which arises from or relates to any
Hazardous Substance Law caused by or arising from or relating
to activities on or operations or ownership of or conditions
existing on the Property, whether prior to or after the
Closing Date; (2) Con Sil hereby assumes all environmental
and reclamation liability occurring off-site (i.e., at any
location except on the Property) which arises from or relates
to any Hazardous Substance caused by or arising from or
relating to activities on or operations or ownership of or
conditions existing on the Property prior to the Closing Date;
and (3) Sunshine hereby assumes all environmental and
reclamation liability occurring off-site (i.e., at any
location except on the Property) which arises from or relates
to any Hazardous Substance caused by or arising from or
relating to activities on or operations or ownership of or
conditions existing on the Property on or after the Closing
Date.
In the case of (1) or (3) above, Sunshine agrees to protect,
indemnify, and hold harmless Con Sil and shall have the right
and duty to defend Con Sil against all claims and actions by
governmental agencies and other third parties, and to
discharge all obligations and liabilities of Sunshine or Con
Sil to such governmental agencies and other third parties. In
the case of (2) above, Con Sil agrees to protect, indemnify,
and hold harmless Sunshine and shall have the right and duty
to defend Sunshine against all claims and actions by
governmental agencies and other third parties, and to
discharge all obligations and liabilities of Con Sil or
Sunshine to such governmental agencies and other third
parties.
Any indemnification sought under this Section 21 shall be
governed in applicable part by the provisions of Section 20 c
through f.
In entering into the agreements set out in this Section,
neither Con Sil nor Sunshine is admitting any liability to any
third parties regarding the matters addressed in this Section.
Con Sil and Sunshine also agree and acknowledge that
invocation of the cross indemnities outlined here may,
depending on the facts, require the parties to allocate
<PAGE> 42
between themselves responsibility for certain claims,
obligations or liabilities.
As used herein "Hazardous Substance" means any substance,
material, or waste (i) which contains gasoline, diesel fuel,
or other petroleum hydrocarbons, (ii) which is flammable,
explosive, radioactive, corrosive, carcinogenic, hazardous,
toxic, or a pollutant or contaminant, (iii) the presence of
which on the Property causes or threatens to cause a nuisance
or health hazard affecting the Property, or (iv) the presence
of which on the Property requires investigation or remediation
under any Hazardous Substance Law, as the same may hereafter
be amended, and shall include without limitation:
a. those substances included within the definitions of
"hazardous substances", "hazardous materials", "toxic
substances", "pollutant or contaminant" or "solid waste"
in CERCLA, RCRA, and the Hazardous Materials
Transportation Act, 49 U.S.C. Sections 1801, et seq., as
amended, and in the regulations promulgated pursuant to
said laws,
b. those substances listed in the United States Department
of Transportation Table (49 C.F.R. 172.101 and amendments
thereto) or by the Environmental Protection Agency (or
any successor agency) as hazardous substances or
materials (40 C.F.R. part 302 and amendments thereto),
c. such other substances, materials, and wastes which are or
become regulated under applicable local, state, or
federal law, or the United States government, or which
are classified as hazardous, dangerous, infectious or
toxic under federal, state or local laws or regulations,
d. any material, waste or substance which is (A) petroleum,
(B) asbestos, (C) polychlorinated biphenyls or (D)
designated as a "hazardous substance" or "oil" pursuant
to Section 311 of the Clean Water Act, 33 U.S.C. Sections
1251, et seq., (33 U.S.C. 1321) or listed pursuant to
Section 307 of the Clear Water Act (33 U.S.C. 1317), and
e. any "pesticide" as defined in the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. 136(U);
"Hazardous Substance Law" means CERCLA; the RCRA; the
Hazardous Materials Transportation Act, 49 U.S.C. Sections
1801, et seq., as amended; the Clean Water Act, 33 U.S.C.
Sections 1251, et seq., as amended; the Clean Air Act, 42
U.S.C. Sections 7401, et seq., as amended; the Toxic
Substances Control Act, 15 U.S.C. Sections 2601, et seq., as
amended; the National Environmental Policy Act, 42 U.S.C.
Sections 4321, et seq., as amended; the Occupational Safety
<PAGE> 43
and Health Act, 29 U.S.C. Sections 651, et seq., as amended;
the Hazardous Materials Transportation Act, 49 U.S.C. Sections
1801, et seq., as amended; and any other federal, state, or
local law, common law, ordinance, regulation, rule or
interpretation thereof, whether currently in force or enacted
in the future, which pertains to health, public welfare,
industrial hygiene, hazardous waste or environmental
conditions or which regulates or proscribes the use, storage,
disposal, clean-up, transportation, release or threatened
release into the environment or presence of materials or
substances which have been determined to be a nuisance or
dangerous, toxic or hazardous or a pollutant or contaminant.
The term includes any licenses, permits, plans, or approvals
generated pursuant to or as a result of any of the above.
22. SHAREHOLDER CONSENT. The parties acknowledge that
consummation of the sale of the Property contemplated by this
Agreement is subject to the approval by the holders of a
majority of the issued and outstanding shares of Con Sil.
23. TERMINATION OF AGREEMENT. This Agreement and the transactions
contemplated hereby will terminate as follows:
a. On October 1, 1995, if the shareholders of Con Sil shall
not have approved the Agreement
b. On November 1, 1995, if the Closing shall not have taken
place, unless such date is extended by mutual agreement.
c. On the Closing Date by Sunshine if the conditions set
forth in Section 14 shall not have been met or waived;
d. On the Closing Date by Con Sil if the conditions set
forth in Section 15 shall not have been met or waived; or
e. At any time, by mutual consent of the parties hereto;
24. LIABILITY ON TERMINATION. In the event of termination of this
Agreement pursuant to Section 23, neither of the parties
hereto shall have any liability of any kind to the other
except that Sunshine shall return all books, records and
documents furnished to it by Con Sil and remain bound by the
obligations contained herein in Section 9e and 9f hereof.
25. SURRENDER OF POSSESSION ON TERMINATION. Upon termination of
this Agreement for any reason:
a. Sunshine will surrender peaceable possession of the
Property, and Con Sil shall thereupon have the right to
take full and complete possession thereof, without
further consideration, subject to the rights of Sunshine
to go upon the Property for a period not to exceed six
<PAGE> 44
months for the purpose of removing and disposing of the
buildings, structures, improvements, machinery, equipment
and supplies erected or placed in or upon the Property by
Sunshine. Any such property not removed within the time
provided shall become the sole property of Con Sil and
Sunshine shall have no further right, title or interest
with respect thereto, except the termination of this
Agreement shall have no effect on the validity of the
Amended Agreement and Easement dated January 8, 1979 by
and between Sunshine and Con Sil.
b. Sunshine shall have the right of reasonable ingress to
and egress from the Property for so long after
termination of this Agreement as is necessary for
Sunshine to accomplish reclamation or restoration of the
Property pursuant to law for activities of Sunshine on
the Property, or to make such inspections as may be
required of Sunshine by state or federal law.
c. Within a reasonable time after termination, Sunshine
agrees to provide Con Sil with copies of all factual data
generated by Sunshine's activities on the Property prior
to termination; however, Sunshine shall not be liable to
Con Sil for the completeness or accuracy thereof.
d. Con Sil shall be entitled to retain all monthly payments
made pursuant to Section 4a. to date of termination.
26. MISCELLANEOUS
a. EXHIBITS AND SCHEDULES. All Exhibits and Schedules
attached to this Agreement shall be deemed part of this
Agreement and incorporated herein, where applicable, as
if fully set forth herein.
b. NO ASSIGNMENT, SUCCESSORS, ASSIGNS, ETC. The terms and
conditions of this Agreement shall inure to the benefit
of, and shall be binding upon, the parties hereto, their
respective successors and assigns; provided, however,
that this Agreement shall not be assigned or conveyed by
any party to any person or entity without the prior
written consent of the other party hereto, except that
Sunshine may assign this Agreement without consent to any
corporation controlling or controlled by it (the term
control shall mean an ownership and controlling interest
of greater than 50.1%). In the event of an assignment,
the assigning party shall not be relieved of any of its
obligations and undertakings contracted for herein.
c. GOVERNING LAW. This Agreement shall be construed in
accordance with, and governed by, the law of the state of
Idaho applicable to agreements made and to be performed
<PAGE> 45
wholly within this jurisdiction. Venue to enforce any
claim arising from any provision of this Agreement shall
lie in Kootenai County, Idaho.
d. COUNTERPARTS. This Agreement may be executed
simultaneously in any number of counterparts, each of
which shall be deemed an original and all of which shall
constitute one and the same instrument.
e. NOTICES. Any notices or other communications, including
a notice of change in address, shall be in writing and
shall be considered to have been duly given on the
earlier of (1) the date of actual receipt or (2) three
days after deposit in the first-class certified U.S.
mail, postage prepaid, return receipt requested:
If to Con Sil, to:
Consolidated Silver Corporation
6500 Mineral Drive
Coeur d'Alene, Idaho 83814-8788
Attention: President
If to Sunshine, to:
Sunshine Precious Metals, Inc.
877 West Main - Suite 600
Boise, Idaho 83702
f. AMENDMENT. This Agreement may be amended at any time
prior to Closing by written instrument executed by the
parties hereto.
g. ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties hereto relating to the
subject matter herein.
h. WAIVER. Any default, misrepresentation or breach of any
covenant or warranty by a party in connection with this
Agreement may be waived in writing by the other party. No
such waiver shall be deemed to extend to any prior or
subsequent default, misrepresentation or breach of any
covenant or warranty, or affect any rights arising by
virtue of any prior or subsequent default,
misrepresentation or breach of any covenant or warranty.
<PAGE> 46
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers,
all as of the day and year first above written.
CONSOLIDATED SILVER SUNSHINE PRECIOUS
CORPORATION METALS, INC.
By: /s/ Ralph Noyes By: /s/ John S. Simko
--------------------------- -------------------------
President President
<PAGE> 47
EXHIBIT II
30-1-80. RIGHT OF SHAREHOLDERS TO DISSENT AND OBTAIN PAYMENT FOR
SHARES.
(a) Any shareholder of a corporation shall have the right to
dissent from and to obtain payment for his shares in the event
of any of the following corporate actions:
(1) Any plan of merger or consolidation to which the
corporation is a party, except as provided in subsection
(c) of this section;
(2) Any sale, lease, exchange, or other disposition of all or
substantially all of the property and assets of the
corporation not made in the usual or regular course of
its business, including a sale in dissolution, but not
including a sale pursuant to an order of a court having
jurisdiction in the premises or a sale for cash on terms
requiring that all or substantially all of the net
proceeds of sale be distributed to the shareholders in
accordance with their respective interests within one (1)
year after the date of sale;
(3) Any plan of exchange to which the corporation is a party,
as the corporation the shares of which are to be
acquired;
(4) Any amendment of the articles of incorporation which
materially and adversely affects the rights appurtenant
to the shares of the dissenting shareholder in that it:
(i) Alters or abolishes a preferential right of such
shares; (ii) Creates, alters or abolishes a right in
respect of the redemption of such shares, including a
provision respecting a sinking fund for the redemption or
repurchase of such shares; (iii) Alters or abolishes a
preemptive right of the holder of such shares to acquire
shares or other securities; (iv) Excludes or limits the
right of the holder of such shares to vote on any matter,
or to cumulate his votes, except as such right may be
limited by dilution through the issuance of shares or
other securities with similar voting rights; or
(5) Any other corporate action taken pursuant to a
shareholder vote with respect to which the articles of
incorporation, the bylaws, or a resolution of the board
of directors directs that dissenting shareholders shall
have a right to obtain payment for their shares.
(b) (1) A record holder of shares may assert dissenter's rights
as to less than all of the shares registered in his name
only if he dissents with respect to all the shares
beneficially owned by any one (1 ) person, and discloses
the name and address of the persons on whose behalf he
dissents. In that event, his rights shall be determined
as if the shares as to which he has dissented and his
other shares were registered in the names of different
shareholders.
<PAGE> 48
(2) A beneficial owner of shares who is not the record holder
may assert dissenter's rights with respect to shares held
on his behalf, and shall be treated as a dissenting
shareholder under the terms of this section and section
30-1-31, Idaho Code, if he submits to the corporation at
the time of or before the assertion of these rights a
written consent of the record holder.
(c) The right to obtain payment under this section shall not apply
to the shareholders of the surviving corporation in a merger
if a vote of the shareholders of such corporation is not
necessary to authorize such merger.
(d) A shareholder of a corporation who has a right under this
section to obtain payment for his shares shall have no right
at law or in equity to attack the validity of the corporate
action that gives rise to his right to obtain payment, nor to
have the action set aside or rescinded, except when the
corporate action is unlawful or fraudulent with regard to the
complaining shareholder or to the corporation.
30-1-81. PROCEDURES FOR PROTECTION OF DISSENTERS' RIGHTS.
(a) As used in this section:
(1) "Dissenter" means a shareholder or beneficial owner who
is entitled to and does assert dissenters' rights under
section 30-1-80, Idaho Code, and who has performed every
act required up to the time involved for the assertion of
such rights.
(2) "Corporation" means the issuer of the shares held by the
dissenter before the corporate action or the successor by
merger or consolidation of that issuer.
(3) "Fair value" of shares means their value immediately
before the effectuation of the corporate action to which
the dissenter objects, excluding any appreciation or
depreciation in anticipation of such corporate action
unless such exclusion would be inequitable.
(4) "Interest" means interest from the effective date of the
corporate action until the date of payment at the average
rate currently paid by the corporation on its principal
bank loans, or, if none, at such rate as is fair and
equitable under all the circumstances.
(b) If a proposed corporate action which would give rise to
dissenters' rights under subsection (a) of section 30-1-80,
Idaho Code, is submitted to a vote at a meeting of
shareholders, the notice of meeting shall notify all
shareholders that they have or may have a right to dissent and
obtain payment for their shares by complying with the terms of
this section, and shall be accompanied by a copy of sections
30-1-80 and 30-1-81, Idaho Code.
<PAGE> 49
(c) If the proposed corporate action is submitted to a vote at a
meeting of shareholders, any shareholder who wishes to dissent
and obtain payment for his shares shall refrain from voting
his shares in approval of such action. A shareholder who
votes in favor of such action shall acquire no right to
payment for his shares under this section or section 30-1-80,
Idaho Code.
(d) If the proposed corporate action is approved by the required
vote at a meeting of shareholders, the corporation shall mail
a further notice to all shareholders who refrained from voting
in favor of the proposed action. If the proposed corporate
action is to be taken without a vote of shareholders, the
corporation shall send to all shareholders who are entitled to
dissent and demand payment for their shares a notice of the
adoption of the plan of corporate action. The notice shall:
(1) State where and when a demand for payment must be sent
and certificates of certificated shares must be deposited
in order to obtain payment;
(2) Inform holders of uncertificated shares to what extent
transfer of shares will be restricted from the time that
demand for payment is received;
(3) Supply a form for demanding payment which includes a
request for certification of the date on which the
shareholder, or the person on whose behalf the
shareholder dissents, acquired beneficial ownership of
the shares; and
(4) Be accompanied by a copy of sections 30-1-80 and 30-1-81,
Idaho Code. The time set for the demand and deposit
shall be not less than thirty (30) days from the mailing
of the notice.
(e) A shareholder who fails to demand payment, or fails (in the
case of certificated shares) to deposit certificates, as
required by a notice pursuant to subsection (d) of this
section shall have no right under this section or section 30-
1-80, Idaho Code, to receive payment for his shares. If the
shares are not represented by certificates, the corporation
may restrict their transfer from the time of receipt of demand
for payment until effectuation of the proposed corporate
action, or the release of restrictions under the terms of
subsection (f) of this section. The dissenter shall retain all
other rights of a shareholder until these rights are modified
by effectuation of the proposed corporate action.
(f) (1) Within sixty (60) days after the date set for demanding
payment and depositing certificates, if the corporation
has not effectuated the proposed corporate action and
remitted payment for shares pursuant to paragraph (3) of
this subsection, it shall return any certificates that
have been deposited, and release uncertificated shares
from any transfer restrictions imposed by reason of the
demand for payment.
<PAGE> 50
(2) When uncertificated shares have been released from
transfer restrictions, and deposited certificates have
been returned, the corporation may at any later time send
a new notice conforming to the requirements of subsection
(d) of this section, with like effect.
(3) Immediately upon effectuation of the proposed corporate
action, or upon receipt of demand for payment if the
corporate action has already been effectuated, the
corporation shall remit to dissenters who have made
demand and (if their shares are certificated) have
deposited their certificates, the amount which the
corporation estimates to be the fair value of the shares,
with interest if any has accrued. The remittance shall be
accompanied by: (i) The corporation's closing balance
sheet and statement of income for a fiscal year ending
not more than sixteen (16) months before the date of
remittance, together with the latest available interim
financial statements; (ii) A statement of the
corporation's estimate of fair value of the shares; and
(iii) A notice of the dissenter's right to demand
supplemental payment.
(g) (1) If the corporation fails to remit as required by
subsection (f) hereof, or if the dissenter believes that
the amount remitted is less than the fair value of his
shares, or that the interest is not correctly determined,
he may send the corporation his own estimate of the value
of the shares or of the interest and demand payment of
the deficiency.
(2) If the dissenter does not file such an estimate within
thirty (30) days after the corporation's mailing of its
remittance, he shall be entitled to no more than the
amount remitted.
(h) (1) Within sixty (60) days after receiving a demand for
payment pursuant to subsection (g) hereof, if any such
demands for payment remain unsettled, the corporation
shall file in an appropriate court a petition requesting
that the fair value of the shares and interest thereon be
determined by the court.
(2) An appropriate court shall be the district court in the
county of this state where the registered office of the
corporation is located. If, in the case of a merger or
consolidation or exchange of shares, the corporation is
a foreign corporation without a registered office in this
state, the petition shall be filed in the county where
the registered office of the foreign corporation was last
located. If there is no known registered office, the
petition may be filed in Ada County, Idaho.
(3) All dissenters, wherever residing, whose demands have not
been settled shall be made parties to the proceeding as
in an action against their shares. A copy of the
petition shall be served on each such dissenter. If a
dissenter is a nonresident, the copy may be served on him
<PAGE> 51
by registered or certified mail or by publication as
provided by law.
(4) The jurisdiction of the court shall be plenary and
exclusive. The court may appoint one (1) or more persons
as appraisers to receive evidence and recommend a
decision on the question of fair value. The appraisers
shall have such power and authority as shall be specified
in the order of their appointment or in any amendment
thereof. The dissenters shall be entitled to discovery
in the same manner as parties in other civil suits.
(5) All dissenters who are made parties shall be entitled to
judgment for the amount by which the fair value of their
shares is found to exceed the amount previously remitted,
with interest.
(6) If the corporation fails to file a petition as provided
in paragraph (1) of this subsection (h), each dissenter
who made a demand and who has not already settled his
claim against the corporation shall be paid by the
corporation the amount demanded by him, with interest,
and may sue therefor in an appropriate court.
(i) (1) The costs and expenses of any proceeding under subsection
(h) of this section, including the reasonable
compensation and expenses of appraisers appointed by the
court, shall be determined by the court and assessed
against the corporation, except that any part of the
costs and expenses may be apportioned and assessed as the
court may deem equitable against all or some of the
dissenters who are parties and whose action in demanding
supplemental payment the court finds to be arbitrary,
vexatious, or not in good faith.
(2) Fees and expenses of counsel and of experts for the
respective parties may be assessed as the court may deem
equitable against the corporation and in favor of any or
all dissenters if the corporation failed to comply
substantially with the requirements of this section, and
may be assessed against either the corporation or a
dissenter, in favor of any other party, if the court
finds that the party against whom the fees and expenses
are assessed acted arbitrarily, vexatiously, or not in
good faith in respect to the rights provided by this
section and section 30-1-80, Idaho Code.
(3) If the court finds that the services of counsel for any
dissenter were of substantial benefit to other dissenters
similarly situated and should not be assessed against the
corporation, it may award to counsel reasonable fees to
be paid out of the amounts awarded to the dissenters who
were benefitted.
<PAGE> 52
(j) (1) Notwithstanding the foregoing provisions of this section,
the corporation may elect to withhold the remittance
required by subsection (f) of this section from any
dissenter with respect to shares of which the dissenter
(or the person on whose behalf the dissenter acts) was
not the beneficial owner on the date of the first
announcement to news media or to shareholders of the
terms of the proposed corporate action. With respect to
such shares, the corporation shall, upon effectuating the
corporate action, state to each dissenter its estimate of
the fair value of the shares, state the rate of interest
to be used (explaining the basis thereof), and offer to
pay the resulting amounts on receiving the dissenter's
agreement to accept them in full satisfaction.
(2) If the dissenter believes that the amount offered is less
than the fair value of the shares and interest determined
according to this section, he may within thirty (30) days
after the date of mailing of the corporation's offer,
mail the corporation his own estimate of fair value and
interest, and demand their payment. If the dissenter
fails to do so, he shall be entitled to no more than the
corporation's offer.
(3) If the dissenter makes a demand as provided in paragraph
(2) of this subsection (j), the provisions of subsections
(h) and (i) of this section shall apply to further
proceedings on the dissenter's demand.
<PAGE> 53
CONSOLIDATED SILVER CORPORATION
6500 Mineral Drive
Coeur d'Alene, ID 83814-8788
PROXY
This Proxy Is Solicited on Behalf of the Board of Directors.
The undersigned hereby appoints Ralph R. Noyes and Michael B. White as Proxies,
each with the power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated below, all the shares of Common Stock of
Consolidated Silver Corporation held on record by the undersigned on
September 1, 1995, at the annual meeting of shareholders to be held on
October 18, 1995, or any adjournment thereof.
1. SALE OF SUMMIT SILVER MINE TO SUNSHINE PRECIOUS METALS, INC.
FOR / / AGAINST / / ABSTAIN / /
2. ELECTION OF DIRECTORS (check one): FOR ALL NOMINEES LISTED BELOW (except
as marked to the contrary below)*. / /
WITHHOLD AUTHORITY for Proxies to vote for all nominees listed
below . . . . . . / /
*INSTRUCTION: To withhold authority to vote for any individual nominee check
the nominee's name below.
Ralph R. Noyes / / Michael B. White / / Gerald G. Carlson / /
Robert Stuart Angus / / William J. Weymark / / Charles F. Asher / /
3. AMENDMENTS TO THE COMPANY'S AMENDED ARTICLES OF INCORPORATION
(EXCEPT AS SET FORTH IN PROPOSITION 4, BELOW):
FOR / / AGAINST / / ABSTAIN / /
4. AMENDMENT TO THE COMPANY'S AMENDED ARTICLES OF INCORPORATION
ELIMINATING CUMULATIVE VOTING RIGHTS OF COMMON SHARES IN THE
ELECTION OF DIRECTORS:
FOR / / AGAINST / / ABSTAIN / /
5. APPROVAL OF COOPERS & LYBRAND AS INDEPENDENT AUDITORS FOR
THE COMPANY:
FOR / / AGAINST / / ABSTAIN / /
<PAGE> 54
6. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made,
this proxy will be voted for Proposals 1-6.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor,
administrator, trustee, or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
DATED: , 1995.
-----------------------------------------------
PLEASE MARK, SIGN, DATE, AND RETURN
THE PROXY CARD PROMPTLY USING THE ---------------------------------------
ENCLOSED ENVELOPE Signature
---------------------------------------
Signature if held jointly
