The Letter Agreement: The principal changes under the Letter Agreement, are that the Company's interest in the Cieneguita shall be increased from 40% to 80%, the Company shall direct the preparation of the feasibility study, and the current small-scale mining operation shall cease on December 31 st, 2012.B. Feasibility Study
- The Company will issue MM 3,333,333 shares of restricted Common Stock in exchange for its 6 % ownership interest in the Cieneguita project (not including the right to receive revenues attributable to 6% of operations on the first 15 meters, if any, through December 31, 2012).
- MM will assume all outstanding debt owed by the Company to Mr. Ayub, MRT and Robert Knight (approximately $490,000).
- In consideration for the debt assumption, MM will receive half of all monthly Net Cash Flows the Company is entitled to receive from the first 15 meters until the sooner of December 31, 2012 or the date on which the aggregate amount of Net Cash Flows from half of the Company's portion so received by MM equals $490,000. After December 31, 2012, MM's percentage interest in the Net Cash Flows is reduced to 0% and the Company's percentage interest is increased to 80%.
- The above mentioned assumption of debt owed by the Company to Mr. Ayub, MRT and Robert Knight will be in full satisfaction including any and all accrued interest with respect to the outstanding debt.
- If the Company places its ownership interest in the Cieneguita project up for sale, MRT must, if directed by the Company, agree to offer to sell its ownership interest to any bona fide third party buyer on the same terms as are being offered by the Company.
- If the Company elects to sell its ownership interest in the Cieneguita project, MRT will be required to sell its ownership interest if offered similar terms based on its pro rata ownership.
- If MRT elects to sell its ownership interest in the Cieneguita project, it must offer the Company a first right to purchase the ownership interest.