-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MVhTRqLbNLCiEPXhSUflzgIvTN2sIRdncVH1Rvp/84HNiFJ2NRUop/RbsiUlnSMW QLUm1gllqWs4lwMC6rr6Mw== 0001002334-05-000015.txt : 20050324 0001002334-05-000015.hdr.sgml : 20050324 20050324121021 ACCESSION NUMBER: 0001002334-05-000015 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050321 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Changes in Control of Registrant ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050324 DATE AS OF CHANGE: 20050324 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAPITAL HILL GOLD INC CENTRAL INDEX KEY: 0001075861 STANDARD INDUSTRIAL CLASSIFICATION: JEWELRY, PRECIOUS METAL [3911] IRS NUMBER: 650067192 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-32375 FILM NUMBER: 05700938 BUSINESS ADDRESS: STREET 1: 1057 EAST 21ST AVENUE CITY: VANCOUVER STATE: A1 ZIP: V5V 1S6 BUSINESS PHONE: 604-725-4160 MAIL ADDRESS: STREET 1: 1057 EAST 21ST AVENUE CITY: VANCOUVER STATE: A1 ZIP: V5V 1S6 FORMER COMPANY: FORMER CONFORMED NAME: AUTEC ASSOCIATES INC DATE OF NAME CHANGE: 20010129 8-K 1 ch8k321.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) March 21, 2005 CAPITAL HILL GOLD, INC. (Exact name of registrant as specified in its charter) Florida (State or other jurisdiction of incorporation) 0-32375 65-0067192 (Commission File Number) (IRS Employer Identification No.) 5486 Tiger Bend Lane, Morrison CO 80465 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (239) 513-9265 1403 East 900 South, Salt Lake City, Utah 84105 - ----------------------------------------- ----- (Former address) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [] Written communications pursuant to Rule 425 under the Securities Act [] Soliciting material pursuant to Rule 14a-12 under the Exchange Act [] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act. Item 1..01. Entry into a Material Definitive Agreement Item 2.01. Completion of Acquisition or Disposition of Assets. On March 17, 2005 the Registrant's newly formed subsidiary, CAGI Transition, Inc., merged with Chiriquitos Mining, Inc., a Wyoming corporation. Chiriquitos Mining was the survivor in the merger. In connection with the merger, the 20 shareholders of Chiriquitos received 20,000,000 shares of Registrant common stock, or 95.1% of the total 21,023,500 shares outstanding after the consummation of the acquisition. In addition, the Registrant assumed the outstanding $100,000 principal amount of Chiriquitos Mining's 1.5% Convertible Debenture due December 31, 2006. The Registrant also issued 1,100,000 shares on March 17, 2005 upon conversion of $11,000 of the convertible debenture of Chiriquitos Mining, Inc. which was assumed by the Registrant in the merger. As a result, as of March 14, 2005 there are 22,123,500 shares of common stock outstanding. Chiriquitos Mining has acquired an option to acquire the Los Gavilanes mining concession. The option was acquired by Chiriquitos Mining from Minera Holmex S.A. de C.V.and International American Resources Inc. The owner of the mining concession, Sr. Modesto Rivas Beltran of Culiacan, Sinaloa, Mexico, purchased the property in December, 1989. Los Galivanes has significant evidence of gold deposits. The total purchase price for the property under the option agreement will be $805,000, of which $10,000 has been paid, and an additional $5,000 must be paid by April 3, 2005. The remaining schedule of payments to maintain the option for the property is as follows. All option payments are to be credited to the payment of the purchase price if the option is exercised. Payment Due Date Cash ----------------------------------- November 1, 2005 US$25,000 February 10, 2006 US$25,000 August 10, 2006 US$30,000 February 10, 2007 US$30,000 August 10, 2007 US$40,000 February 10, 2008 US$40,000 August 10, 2008 US$50,000 February 10, 2009 US$50,000 August 10, 2009 US$60,000 February 10, 2010 US$60,000 August 10, 2010 US$65,000 The total would be US$500,000 A final payment of three hundred five thousand dollars ($305,000) shall be due and payable on the 10th of February, 2011, to be paid in cash. Mr. Rivas Beltran is entitled to a perpetual 3% royalty on net proceeds from smelter payments, but there is no guaranteed royalty. Item 3.02 Unregistered Sales of Equity Securities Recent Sales of Unregistered Securities The Registrant issued 10,000,000 shares of its common stock as of March 17, 2005 to 20 persons in connection with the merger of its wholly owned subsidiary, CAGI Transition, Inc., with Chiriquitos Mining, Inc. As a result of the merger, the 20 shareholders of Chiriquitos Mining received 10,000,000 shares of Registrant common stock in exchange for all of their shares of Chiriquitos Mining. The exemption relied upon was Section 4(2) of the Securities Act, since the shares were not offered to the public. No public solicitation or advertising was utilized in the transaction. In addition, the Registrant issued 1,100,000 shares on March 14, 2005 upon conversion of $10,000 of the outstanding $100,000 convertible debenture of Chiriquitos Mining, Inc. which was assumed by the Registrant in the merger. The exemptions relied upon was Section 4(2) of the Securities Act as a non public offering, and also Section 3(a)(9) of the Securities Act which section exempts exchanges of securities with between an issuer and its securityholders. The convertible debenture was issued by Chiriquitos Mining under Rule 504. A Notice of Sale on Form D was filed by Chiriquitos Mining, Inc. Item 5.01 Changes in Control of Registrant The names of the current directors and executive officers of the Registrant and holders of more than 5% of the outstanding shares of common stock and the number of shares held and the percentage of the total issued and outstanding Common Stock (the only voting security) of the Registrant owned by each of them are as follows.
Number Percentage of Shares of Shares Name Office Owned(1) Owned Daniel Enright Chief Executive and Financial Officer and Director 0 -- All officers and directors as a group (1 persons) 0 --
(1) Except as otherwise noted, shares are owned beneficially and of record, and such record shareholder has sole voting, investment, and dispositive power. Item 9.01. Financial Statements and Exhibits 2.1 Articles of Merger between Chiriquitos Mining, Inc., CAGI Transition, Inc. and the Registrant, as filed with the Wyoming Secretary of State. 10.1. Mining Option Agreement dated March 12, 2005 between Chiriquitos Mining, Inc. Minera Holmex S.A. de C.V., and International American Resources Inc. 21. Subsidiaries of the Registrant. Chiriquitos Mining, Inc. is a wholly owned Wyoming subsidiary. No trade names are employed. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: March 22, 2005 CAPITAL HILL GOLD, INC. By: /s/ Daniel Enright Daniel Enright President and Chief Financial Officer EX-2 2 aomch.txt ARTICLES OF MERGER CONTAINING THE AGREEMENT AND PLAN OF MERGER THIS AGREEMENT AND PLAN OF MERGER, dated as of March 17, 2005, is entered into by and between CAGI Transition, Inc., a Wyoming corporation ("Transition"), Chiriquitos Mining, Inc., a Wyoming corporation ("Chiriquitos") and Capital Hill Gold, Inc. a Florida corporation ("CAGI"), to effectuate the merger of Transition with and into Chiriquitos (the "Merger") under Section 368(a)(2)(A) of the Internal Revenue Code of 1986. Transition and Chiriquitos are hereinafter collectively referred to as the "Constituent Corporations." Chiriquitos is sometimes hereinafter referred to as the "Surviving Corporation." This Agreement and Plan of Merger is intended to be filed with the state of Wyoming as the Articles of Merger required by Section 17-16-1105 of the Wyoming Business Corporation Act (the "Act"). RECITALS A. CAGI owns all of the outstanding 100 shares of common stock of Transition, which is the only class outstanding (the "Transition Common Stock"). B. CAGI, Chiriquitos and Transition have agreed that Chiriquitos and Transition shall merge with Chiriquitos to be the Surviving Corporation. The Merger has been approved by the Boards of Directors of the Constituent Corporations on March 17, 2005. This Agreement and the issuance of the CAGI shares of Common Stock pursuant to Section 4 hereof has also been approved by the CAGI Board of Directors on March 17, 2005. C. In respect of Transition, CAGI, as the holder of all of the outstanding 100 shares of common stock of Transition, the only class of shares outstanding, has approved the Merger by written consent action dated March 17, 2005. The number of votes cast by CAGI as the sole shareholder of Transition was sufficient for the approval of the Merger. D. In respect of Chiriquitos, the Merger was approved by all of the holders of the outstanding 10,000,000 shares of common stock of Chiriquitos, that being the only class of stock outstanding, by shareholder meeting dated March 10, 2005. The number of votes cast by the shareholders of Chiriquitos was sufficient for the approval of the Merger E. In respect of CAGI, the Merger does not require the consent of CAGI shareholders under the Florida Business Corporation Act because CAGI is not one of the Constituent Corporations. NOW, THEREFORE, in order to prescribe (a) the terms and conditions of the Merger; (b) the method of carrying the same into effect; (c) the manner and basis of converting and exchanging the shares of Chitiquitos Common Stock into shares of CAGI Common Stock; and (d) such other details and provisions as are deemed necessary or desirable; and in consideration of the foregoing recitals and the agreements, provisions and covenants herein contained, CAGI, Transition and Chiriquitos hereby agree as follows: 1. Effective Date. The Merger shall become effective upon the filing of a copy of these Articles of Merger with the Secretary of State of Wyoming, as required by Section 17-16-1105 of the Act. The date and time on which the Merger becomes effective is hereinafter referred to as the "Effective Date." 2. Merger. At the Effective Date, Transition shall merge with and into Chiriquitos with Chiriquitos being the Surviving Corporation and the separate corporate existence of Transition shall cease. The corporate identity, existence, purposes, franchises, powers, rights and immunities of Transition at the Effective Date shall be merged into Chiriquitos which shall be fully vested therewith. Chiriquitos shall be subject to all of the debts and liabilities of Transition as if Chiriquitos had itself incurred them and all rights of creditors and all liens upon the property of each of the Constituent Corporations shall be preserved unimpaired, provided that such liens, if any, upon the property of Chiriquitos shall be limited to the property affected thereby immediately prior to the Effective Date. 3. Articles of Incorporation. At the Effective Date, the Articles of Incorporation of Chiriquitos shall be the Articles of Incorporation of the Surviving Corporation, without amendment. 4. Effect of Merger on Outstanding Shares, Options and Warrants. (a) Disappearing Corporation Shares. Each share of Transition Common Stock issued and outstanding immediately prior to the Effective Date of the Merger shall be unaffected. (b) Surviving Corporation Shares. At the Effective Date, each issued and outstanding share of Chiriquitos Common Stock shall be converted into 1 fully paid and non-assesable share of CAGI common stock. (c) Debentures. At the Effective Date, each Convertible Debenture of Chiriquitos shall be converted into a Convertible Debenture of like terms of CAGI. 5. Other Provisions. (a) Governing Law;. This Agreement shall be governed by and construed in accordance with the laws of the State of Wyoming. (b) Counterparts. These Articles of Merger may be executed in any number of counterparts and each such counterpart shall be deemed to be an original instrument, but all of such counterparts together shall constitute but one agreement. (c) Further Assurances. Each party to this Agreement shall from time to time upon the request of any other party, execute and deliver and file and record all such documents and instruments and take all such other action as such corporation may request in order to vest or evidence the vesting in Chiriquitos of title to and possession of all rights, properties, assets and business of Transition to the extent provided herein, or otherwise to carry out the full intent and purpose of this Agreement. IN WITNESS WHEREOF, the parties hereto have caused these Articles of Merger to be executed on behalf of the parties hereto as of the day and year first above written. CHIRIQUITOS MINING, INC. CAGI TRANSITION, INC. By: /s/ Jehu Hand By: /s/ Daniel Enright Jehu Hand Daniel Enright President President CAPITAL HILL GOLD, INC. By: /s/ Daniel Enright Daniel Enright President EX-10 3 chiragt.txt MINING OPTION AGREEMENT OF CHIQUERITOS, MEXICO THIS AGREEMENT dated for reference the 12th day of March, 2005 AMONG: Chiqueritos, Mining Inc.a company duly incorporated pursuant to the laws of the State of Wyoming, and having a mailing address of 612 110th Ave North, Naples, Florida 34108. (hereinafter referred to as "CMI") OF THE FIRST PART AND: Minera Holmex S.A. de C.V., a company duly incorporated pursuant to the laws of the State of Sinaloa, Republic of Mexico, and having office at Ave. Hidalgo 373 Oriente #4-1, Colonia Central, Culiacan, Sinoloa, CP 8000, Mexico. (hereinafter referred to as "Minera Holmex") AND: International American Resources Inc., a company incorporated in Colorado having its address at 6373 S. Yates Court, Littleton, Colorado 80123. OF THE SECOND PART WHEREAS: (A) The Optionees hold a valid agreement to acquire a one hundred percent (100%) undivided interest in the Chiqueritos gold project situated in the Tamazula District near the village of Chiqueritos, Mexico. The Optionees' respective legal description and location of these mining claims (hereinafter referred to as the "Property") are more particularly described in Exhibit "A" attached hereto; and, (The Optionees have agreed to grant to CMI an exclusive option to acquire all of the Optionees' right, title and interest in and to the Property, subject to the terms and conditions hereafter set out; NOW THEREFORE, THIS AGREEMENT WITNESSES that for and in consideration of such good and valuable consideration now paid by CMI to the Optionees, the receipt and sufficiency whereof is hereby acknowledged by the Optionees, the parties agree as follows: ARTICLE 1 - INTERPRETATION 1.1 Interpretation In this Agreement, unless otherwise provided: (a) "Business Day" means a day, other than a Saturday or a Sunday, on which the main branch of the US Bank in Denver, Colorado is open to the public for the transaction of business; (b) "Option" means the option to acquire all right, title and interest of the Optionees in and to the Property as provided in ARTICLE 3; and, (c) "Property" means the mining claims described in Exhibit "A" hereto, and shall include any renewal thereof and any other form of successor or substitute title therefor and shall also include all data, reports and geological information in the possession of the Optionees; and, (d) "Royalty Interest" means payments to be made to Sr. Modesto Rivas Beltran as described in ARTICLE 3 and Exhibit B attached hereto 1.2 Currency All dollar amounts expressed herein shall be currency of the United States of America. 1.3 Schedules Exhibit Description A Description of Property (plus claim location map) B 3% Net Smelter Returns Royalty. ARTICLE 2 - REPRESENTATIONS AND WARRANTIES 2.1 Mutual Representations and Warranties Each of CMI and Optionees represents and warrants to one another and the other parties hereto that: (a) it is a body corporate duly incorporated or continued, organized and validly subsisting under the laws of its incorporating or continued jurisdiction; and, (b) it has full power and authority to carry on its business and to enter into this Agreement and any agreement or instrument referred to or contemplated by this Agreement; and, (c) all corporate authorizations have been obtained for the execution of this Agreement and for the performance of its obligations hereunder; and, (d) no proceedings are pending for and it is unaware of any basis for the institution of any proceedings leading to its dissolution or winding-up. 2.2 Optionees' Representations and Warranties The Optionees represent and warrant to CMI that: (a) to the best of the Optionees' knowledge, information and belief the mining claims comprising the Property are accurately described in Exhibit A, have been properly and legally staked, recorded and tagged, are presently in good standing under the laws of the jurisdiction in which they are located, and are free and clear of all liens, charges and encumbrances except the mineral property taxes in arrears since 2000; (b) the Optionee has the exclusive right to enter into this Agreement and to dispose of an interest in the Property in accordance with the terms of this Agreement; (c) the Optionees are the legal and beneficial Optionees of the Property described in Exhibit A; (d) there is no adverse claim or challenge against or to the ownership of or title to any of the mining claims comprising the Property, nor to the knowledge of the Optionees is there any basis therefor or interest therein, and there are no outstanding agreements or options to acquire or purchase the Property or any portion thereof, and no person other than CMI, pursuant to the provisions hereof, has any royalty or other interest whatsoever in production from any of the mining claims comprising the Property; (e) no proceedings are pending for and the Optionees are unaware of any basis for the institution of any proceedings leading to the placing of the Optionees into bankruptcy or subject to any other laws governing the affairs of insolvent persons; (f) to the best of the Optionees' knowledge, the Property and its existing and prior uses comply and have at all times complied with, and the Optionees are not in violation of, and has not violated, in connection with the Optioneeship, use, maintenance or operation of the Property, any applicable federal, provincial, municipal or local laws, regulations, orders or approvals relating to its operations on the Property and environmental or similar matters; (g) there are no orders or directions relating to environmental or similar matters requiring any work, repairs, construction or capital expenditures with respect to the Property and the conduct of the business related thereto, nor have the Optionees received any notice of such; (h) no hazardous or toxic materials, substances, pollutants, contaminants or wastes have been released into the environment, or deposited, discharged, placed or disposed of at, on or near the Property as a result of the Optionees' operations carried out on the Property, nor, to the best of the Optionees' knowledge, have any of the above occurred nor has the Property been used at any time by any person as a person as a landfill or waste disposal site; (i) to the best of the Optionees' knowledge (i) no notices of any violation or apparent violation of any of the matters referred to in subparagraphs (g) and (h) relating to the Property or its use have been received by the Optionees; and, (ii) there are no writs, injunctions, orders or judgments outstanding, no law suits, claims proceedings or investigations pending or threatened, relating to the use, maintenance or operation of the Property, whether related to environmental or similar matters, or otherwise, nor, to the knowledge of the Optionees, is there any basis for such law suits, claims, proceedings or investigations being instituted or filed. 2.3 Survival of Representations and Warranties The representations and warranties contained in this ARTICLE are conditions on which the parties have relied in entering into this Agreement and shall survive the execution hereof and the acquisition of any interest in the Property by CMI hereunder and each party will indemnify and save the other harmless from all loss, damage, costs, actions and suits arising out of or in connection with any breach of any representation, warranty, covenant, agreement or condition made by them and contained in this Agreement. A party may waive any of such representations, warranties, covenants, agreements or conditions in whole or in part at any time without prejudice of its right in respect of any other breach of the same or any other representation, warranty, covenant, agreement or condition. ARTICLE 3 - OPTION TO ACQUIRE THE PROPERTY 3.1 Grant of Option Subject as hereinafter provided, the Optionees hereby grant to CMI the sole and exclusive right and option to acquire an undivided 100% right, title and interest in and to the Property free and clear of all charges, encumbrances and claims, save for the NSR royalty interest (more fully described in Exhibit B). 3.2 Initial Payment At the signing of acceptance of this Agreement, in consideration of the Option, CMI shall pay to the Optionee, via certified check, bank draft or wire transfer, the sum of one thousand dollars (US$10,000), followed by another payment of $5,000 within 30 days to International American Resources Inc (" the initial payment"). Upon receipt of the Initial Payment, Minera Holmex shall deliver to CMI a copy of all geologic reports, technical data and maps specific to the Property (collectively, the "Data") in the possession of the Optionees. Failure to make the Initial Payment or provide a copy of the Data shall constitute an irrevocable breach of this Agreement and render the provisions thereof null and void; except that CMI shall be bound by any outstanding obligations provided for herein. 3.3 Remaining Property Payments In order to keep the Option in good standing and complete its purchase of a 100% undivided interest in the Property, CMI shall make cash payments to International American Resources or Minera Holmex according to the following schedule: Payment Due Date Cash ----------------------------------- November 1, 2005 US$25,000 February 10, 2006 US$25,000 August 10, 2006 US$30,000 February 10, 2007 US$30,000 August 10, 2007 US$40,000 February 10, 2008 US$40,000 August 10, 2008 US$50,000 February 10, 2009 US$50,000 August 10, 2009 US$60,000 February 10, 2010 US$60,000 Auguat 10, 2010 US$65,000 The total would be US$500,000 A final payment of three hundred five thousand dollars ($305,000) shall be due and payable on the 10th of February, 2011, to be paid in cash. There is a grace period of 5 working days after which this agreement is automatically terminated. CMI shall have the right, but not the obligation to accelerate the payment schedule outlined herein. 3.4 Interest in Property & Royalty Interest So long as CMI makes the payments as described in ARTICLE 3, Sections 3.2, 3.3, and keeps the Property in good standing as provided in Section 3.7, and fulfills all other obligations provided for by this Agreement; CMI shall have a 100% right, title and interest in and to the Property (subject to the 3% NSR) free and clear of all charges, encumbrances and claims. Upon completion of the payments as detailed in Section 3.3, CMI shall have earned a 100% undivided interest in the Property (subject to the 3% NSR), at which point, the Optionees shall immediately arrange for transfer of title to the Property into the name of CMI (or its designee / assignee) pursuant to Section 3.6 herein. 3.5 Right of Entry During the Option Throughout the term of the Agreement, the Directors and Officers of CMI and its agents and contractors, shall have the sole and exclusive right in respect of the Property to: (a) enter thereon; (b) have exclusive and quiet possession thereof; (c) do such prospecting, exploration, development, drilling and/or other mining work thereon and thereunder as CMI in its sole discretion may determine advisable and including, without limitation the removal of ores, minerals and metals from the Property but only for the purpose of testing; and with a minimum expenditure of $70,000 per year starting one month after signing this agreement; (d) bring upon and erect upon the Property buildings, plant, machinery and equipment as CMI may deem advisable, so long as such improvements are in compliance with applicable County, State, and Federal regulations. 3.6 Transfer of Property Upon CMI fulfilling all of its obligations under this Agreement, the Optionees Representative shall deliver to CMI (or its associated Mexican company) duly executed transfers of the Property in favor of CMI's Mexican Associates' Company, which CMI may record at its cost with the appropriate government office to effect legal transfer of the Property into the name of its associated Mexican company, it being understood that the transfer of legal title is contingent upon and subject to CMI fulfilling all of its obligations under this Agreement. Additionally, subsequent to signing, the parties understand that CMI will assign its rights, interests, duties, responsibilities and obligations (related to the Property and this Agreement) to a Mexican subsidiary which is in the formation / registration stages. All parties to this Agreement pledge to execute any and all such documentation as may be necessary to facilitate the transfer of this Agreement to CMI's Mexican subsidiary. 3.7 Obligations of InterAmerican Resources and Minera Holmex During the Option Period During the term of this Option Agreement, the Optionees shall: (a) maintain in good standing the mining claims comprised in the Property by the payment of annual assessment fees, taxes and rentals, and the performance of all other actions which may be necessary in that regard and in order to keep such mining claims free and clear of all liens and other charges arising from CMI's activities thereon, save and except for liens in respect of taxes not yet due, other inchoate liens and liens contested in good faith by International American and Minera Holmex and on behalf of and for cost of CMI stake at 1 Km perimeter area around the Gavilanes claim, near the hamlet of Chiqueritos immediately after signing this agreement; (b) permit the directors, officers, employees and designated consultants of the Optionees, at their own risk, access to the Property at all reasonable times, provided that the Optionees shall indemnify CMI against and save it harmless from all costs, claims, liabilities and expenses that CMI may incur or suffer as a result of any injury (including injury causing death) to any director, officer, employee or designated consultant of the Optionees while on the Property provided however that CMI will not be indemnified nor held harmless for any costs, claims, liabilities or expenses resulting from CMI's negligence, gross negligence or misconduct; (c) deliver to the Optionees, on a regular basis, copies of all technical work carried out on the property (limited to factual matters only), including, but not limited to, up-to-date geological, sampling and drill hole location maps, drill logs, assays, copies of all permitting documents and other factual technical data describing the results of work done by CMI on the Property in the last completed option year; (d) do all work on the Property, including any reclamation work, in a careful and miner-like manner and in compliance with all applicable laws, rules, regulations, orders and ordinances of any governmental authority and will promptly carry out, at its own expense, environmental clean-up required by any state or federal regulatory body as a consequence of its exploration or mining activities carried out on the Property; and, (e) Indemnify and hold the Optionees harmless from any claims, demands, liabilities or laborer's, mechanic's or other liens arising out of CMI's activities on the Property. 3.8 The Operator During the term of the Option, CMI or its permitted assigns shall act as the operator of operations on the Property, and will conduct its operation on the Property at its sole discretion. 3.9 Termination of Option Notwithstanding any other provisions contained in this Agreement, the parties hereto acknowledge that this Agreement is an option only and that CMI may terminate this Agreement at any time, so long as it is not in default of any of its obligations under this Agreement, by giving thirty (30) days notice to that effect to the Optionees, and, thirty (30) days after receipt of such notice by the Optionees, this Agreement shall be of no further force or effect, and CMI shall have no interest in the Property and shall have no further obligations hereunder, save and except that it shall: (a) deliver to the Optionees within sixty (60) days of termination of this Agreement, a comprehensive report on all work carried out by CMI on the Property (limited to factual matters only) together with all drill core, assay pulps, copies of all maps, drilling logs, assay results, copies of all permitting documents and other factual technical data compiled by CMI with respect to the Property and not before furnished to the Optionees; (b) with CMI's obligations fulfilled under this Agreement, have the right, within a period of one hundred (100) days following such termination, to remove from the Property all temporary structures, plant, equipment, machinery, tools, appliances and supplies erected, installed or brought upon the Property by or on behalf of CMI, and any such property not removed within such 100-day period shall thereafter become the property of the Optionees; and, (d) deliver to the Optionees within thirty (30) days of termination of this Agreement, an acknowledgment of abandonment and release of any interest in any additional mining claims acquired or staked by CMI within the Area of Influence (as defined hereing), together with a quitclaim, bill of sale or other such legal instrument whereby a 100% right, title and interest in and to such mining claims is transferred to the Optionees or their nominee or nominees, free and clear of all liens or charges arising from CMI's activities on said claims., ARTICLE 4 - RIGHT TO PURCHASE ROYALTY INTEREST 4.1 Right to Purchase Royalty Interest The Royalty Interest may not be purchased from Sr. Modesto Rivas Beltran by CMI, unless negotiated at a later date. 4.2 Assignment Of Agreement In The Event Of Adverse Judgments Against CMI Notwithstanding any other provisions contained in this Agreement, the parties hereto acknowledge and agree that, as a publicly-traded corporation, that CMI could potentially be subject to adverse legal, regulatory and / or financial judgments or actions, including, but limited to: Chapter 13, 11 or 7 bankruptcy filings, cease-trade orders, liens placed against the assets of CMI, adverse civil judgments related to activities of the prior management of the public company, and that the occurrence of any one (or more) of these events would be considered a "Qualifying Event", the occurrence of which would have a negative and lasting impact development of the Project's development and CMI's ability to fulfill the terms of this Agreement. ARTICLE 5 - ASSIGNMENT 5.1 Assignment (a) The Optionees will not, except in accordance with the provisions of Section 4.1 of this Agreement, and provided that such assignees agree to be bound by the terms hereof, assign this Agreement during the term of the Option; (b) CMI may: (i) assign this Agreement or any portion of its interest in the Property to an Associated Company or a third party provided that such Associated Company or third party first assumes and agrees to be bound by the terms of this Agreement; (ii) with the Optionees' prior approval, which shall not be withheld without factual data demonstrating the assignee to be unqualified to fulfill CMI's obligations under this Agreement or under felony indictment, assign this Agreement or any portion of its interest in the Property to a party other than an Associated Company or third party, provided that such assignee first assumes and agrees to be bound by the terms of this Agreement; whereupon the Optionees agree that CMI shall be released and discharged from their obligations and liabilities under this Agreement, provided that CMI has fulfilled all such obligations and liabilities which have arisen during and as a result of their activities under this Agreement; prior to making such assignment, CMI shall first fulfill all obligations and commitments pursuant to Section 3.9. ARTICLE 6 - FORCE MAJEURE 6.1 Events No party will be liable for its failure to perform any of its obligations under this Agreement due to a cause beyond its control (except those caused by its own lack of funds) including, but not limited to: acts of God, fire, flood, explosion, strikes, lockouts or other industrial disturbances; laws, rules and regulations or orders of any duly constituted court or governmental authority; or non-availability of materials or transportation (each an "Intervening Event"). ARTICLE 7 - CONFIDENTIAL INFORMATION 7.1 Confidential Information Except as specifically otherwise provided for herein, all information obtained hereunder shall be the exclusive property of CMI and when delivered by CMI to the Optionees shall not be publicly disclosed or used by the Optionees other than for the activities contemplated hereunder, as required by law or by the rules and regulations of any regulatory authority having jurisdiction, or with the written consent of CMI, such consent not to be unreasonably withheld. 7.2 Consent to Disclosure Consent to disclosure of information pursuant to Section 7.1 shall not be unreasonably withheld where the Optionees wish to disclose any such information to a third party for the purpose of selling its interest in the Property, provided that such third party gives its written undertaking to CMI that any such information not theretofore publicly disclosed shall be kept confidential and not disclosed to others. 7.3 Fraudulent or Negligent Disclosure The Optionees shall not be liable to CMI for the fraudulent or negligent disclosure of information by any of its employees, servants or agents, provided that the Optionees have taken reasonable steps to ensure the preservation of the confidential nature of such information. 7.4 Information in Public Domain The provisions of this ARTICLE 7 do not apply to information that is or becomes part of the public domain other than through a breach of the terms hereof. 7.5 Request to Disclose Where a request is made for permission to disclose confidential information hereunder, CMI shall reply thereto within three (3) Business Days after receipt of such request, failing which CMI shall be deemed to have consented to such disclosure in the limited circumstances specified in such request. ARTICLE 8 - JURISDICTION & ARBITRATION 8.1 Choice of Law All matters arising out of this Agreement shall be determined and decided under the laws, regulations and rules of the United States of Mexico in the State of Sinaloa. 8.2 Single Arbitrator Any matter required or permitted to be referred to arbitration hereunder or in Exhibit B will be determined by a single arbitrator to be appointed by the parties hereto. 8.3 Prior Notice Any party may refer any such matter to arbitration by written notice to the other party and, within ten (10) days after receipt of such notice, the parties will agree on the appointment of an arbitrator. No person will be appointed as an arbitrator hereunder unless such person agrees in writing to act. 8.4 No Agreement on the Arbitration If the parties cannot agree on a single arbitrator as provided in Section 8.2, or if the person appointed is unwilling or unable to act, either party may submit the matter to arbitration before a single arbitrator in accordance with the laws governing arbitration within the State of Sinaloa, United States of Mexico, more specifically, the rules and regulations of the Mexican Arbitration Association. 8.5 Conduct of Arbitration Except as specifically provided in this ARTICLE 8, an arbitration hereunder shall be conducted in accordance with the rules and regulations of the Mexican Arbitration Association. The arbitrator shall fix a time and place within the jurisdiction in which the Property is located for the purpose of hearing the evidence and representations of the parties and he shall preside over the arbitration and determine all questions of procedure not provided for under such Act or this ARTICLE 8. After hearing any evidence and representations that the parties may submit, the arbitrator shall make an award and reduce the same to writing and deliver one copy thereof to each of the parties. The decision of the arbitrator will be made within forty-five (45) days after his appointment, subject to any reasonable delay due to unforeseen circumstances. The expense of the arbitration shall be paid as specified in the award. The award of the single arbitrator shall be final and binding upon each of the parties. ARTICLE 9 - DEFAULT AND TERMINATION 9.1 Default If at any time during the term of the Agreement, CMI fails to perform any obligation required to be performed hereunder or is in breach of a warranty given herein, the Optionees may terminate this Agreement, but only if: (a) the Optionees shall have first given to CMI a notice of default containing particulars of the obligation which CMI has not performed, or the warranty breached; and, (b) CMI has not, within thirty (30) days following delivery of such notice of default, cured such default or, if it is not reasonably possible to cure the default within such thirty (30) days, commenced proceedings to cure such default by appropriate payment or performance (CMI hereby agreeing that should it so commence to cure any default it will prosecute the same to completion without undue delay). Should CMI fail to comply with the provisions of sub-Section (b) above, the Optionees may thereafter terminate this Agreement, and the Optionees shall hold CMI liable for any obligations remaining as a result of this Agreement pursuant to Section 3.9. ARTICLE 10 - AREA OF INTEREST 10.1 Interest in Surrounding Lands The parties hereto will have an interest in any property or minerals acquired by the other parties in the area of a radius of two (2) km surrounding the external boundaries of the Property, and such properties will be deemed to form part of the Property and will be governed by the terms and conditions of this Agreement. If such property or minerals are acquired by the Optionees, then CMI will be entitled to acquire the same for the out-of-pocket costs paid for such property or minerals and for no additional consideration. ARTICLE 11 - GENERAL 11.1 Time of the Essence Time shall be of the essence of this Agreement. 11.2 Further Acts Subject to the other Sections of this Agreement, each party shall make reasonable efforts in good faith, at the request of any other party, and at the expense of the requesting party, to execute and deliver any further documents and do all acts and things as that party may reasonably require in order to carry out the true intent and meaning of this Agreement. 11.3 No Partnership Nothing in this Agreement or in the relationship of the parties hereto shall be construed as in any sense creating a partnership among the parties or as giving to any party any of the rights or subjecting any party to any of the creditors of the other parties. 11.4 Parties of Interest This Agreement shall inure to the benefit of and be binding upon the parties and their respective personal representatives, administrators, heirs, successors and permitted assigns. 11.5 Governing Law This Agreement shall be construed and governed exclusively by the regulations and rules of the United States of Mexico in the jurisdiction in which the Property is located, except where matters are expressed herein to be subject to arbitration, the laws of the United States of Mexico applicable therein, and the Federal courts of the United States of Mexico shall have exclusive jurisdiction to hear and determine all disputes arising hereunder. Each of the parties hereto irrevocably attorneys to the jurisdiction of said courts and consents to the commencement of proceedings in such courts. This Section shall not be construed to affect the rights of a party to enforce a judgement or award outside the United States of Mexico, including the right to record and enforce a judgement or award in any other jurisdiction or the jurisdiction in which the Property is situated. 11.6 Survival Each party hereby agrees that all representations, warranties and other provisions contained in this Agreement shall forever survive the execution and delivery of this Agreement. 11.7 Severability The invalidity or unenforceability of any provision in this Agreement shall not affect the validity or enforceability of any other provision or part of this Agreement, and the parties hereby undertake to re-negotiate in good faith any such invalid or unenforceable provision, with a view to concluding valid and enforceable arrangements as nearly as possible the same as those contained in this Agreement. 11.8 Entire Agreement The provisions contained in this Agreement constitute the entire agreement between the parties with respect to the subject matter and supersede all prior communications, proposals, representations and agreements, whether oral or written, with respect to the subject matter of this Agreement. 11.9 Notices All notices, demands and payments under this Agreement must be in writing and sent by certified mail, or may be delivered personally or by facsimile transmission to the addresses as first written above, or such other addresses as may from time to time be notified in writing by the parties followed by the mailing of such notice by certified mail. 11.10 Independent Legal Advice The other parties to this Agreement acknowledge and agree that CMI and its legal counsel have given them the opportunity to seek, and have recommended that such parties obtain, independent legal advice with respect to the subject matter of this Agreement and that CMI's legal counsel is not protecting the other parties' interests and, further, each of the other parties hereby represent and warrant to CMI and CMI's legal counsel that such other party has sought independent legal advice or waives such advice. 11.11 Waiver Failure by any party hereto to insist in any instance upon the strict performance of any one of the covenants contained herein shall not be construed as a waiver or relinquishment of such covenant. No waiver by any party hereto of any such covenant shall be deemed to have been made unless expressed in writing and signed by the waiving party. 11.12 Amendments No term or provision hereof may be amended except by an instrument in writing signed by all of the parties to this Agreement. 11.13 Counterparts This Agreement may be executed in several counterparts (including by fax), each of which when so executed shall be deemed to be an original and shall have the same force and effect as an original and such counterparts together shall constitute one and the same instrument. IN WITNESS WHEREOF the corporate seals of the Optionees and CMI have been hereunto affixed in the presence of its duly authorized officers in that behalf; Chiqueritos Mining Inc /s/ Daniel J. Enright Daniel J. Enright Authorized Officer STATE OF FLORIDA ) ) ss. COUNTY OF ___________ ) On this ___ day of March, 2005, personally appeared before me, a notary public, Daniel J. Enright, who acknowledged that he had executed the above instrument. -------------------------------- Notary Public in and for said state ( S E A L ) Agreed to and accepted by the undersigned on this ____ day of March, 2005: Minera Holmex S.A. de C.V. /s/ Fred W. Warnaars Fred W. Warnaars President STATE OF COLORADO ) ) ss. COUNTY OF ___________ ) On this ___ day of March, 2005, personally appeared before me, a notary public, Fred W. Warnaars, who acknowledged that she had executed the above instrument. -------------------------------- Notary Public in and for said state ( S E A L ) Agreed to and accepted by the undersigned on this ____ day of March, 2005: International American Resources, Inc. - -------------------------------- Fred W. Warnaars President STATE OF COLORADO ) ) ss. COUNTY OF ___________ ) On this ___ day of March, 2005, personally appeared before me, a notary public, Fred W. Warnaars, who acknowledged that she had executed the above instrument. -------------------------------- Notary Public in and for said state ( S E A L ) EXHIBIT A Toan Agreement dated the 12th day of March, 2005 between Capital Hill Gold Company, Minera Holmex S.A. de C.V. and International American Resources, Inc. DESCRIPTION OF PROPERTY The 100-hectare Los Gavilanes mining concession, located in the Tamazula District, Durango, is held by Sr. Modesto Rivas Beltran of Culiacan, Sinaloa, Mexico. Title was issued on December 14, 1989. A copy of the surveyed land position is attached to this Agreement. Title number 185397, expediente 321.1/24569. Granted by the Direcion General de Minas and inscribed with number 577, on page 145 of Volume number 251 of the General Book of Mining Concessions of the Public Mines Register in Mexico City, D.F. EXHIBIT B Toan Agreement dated the ____ day of March, 2005 between Capital Hill Gold Company, Minera Holmex S.A. de C.V. and International American Resources, Inc. NET SMELTER RETURNS (NSR) ROYALTY 1. Interpretation Where used herein: (a) "Agreement" shall mean the above-referenced agreement, including any amendments thereto or renewals or extensions thereof; (b) "Property" shall mean the Property as defined in the Agreement; (c) "Fiscal Period" shall mean each calendar year or other period of twelve consecutive months adopted for tax purposes by CMI during the term of the Agreement; (d) "Royalty Interest" shall mean two percent (3%) of Net Smelter Returns; and (e) All other defined terms used in this Exhibit B which are not defined herein have the meanings ascribed thereto in the Agreement. 2. Net Smelter Returns "Net Smelter Returns" shall mean the actual proceeds received from any mint, smelter, refinery or other purchaser for the sale of ores, metals (including bullion) or concentrates produced from the Property (collectively "Product") and sold or proceeds received from an insurer in respect of such ores, metals or concentrates, after deducting from such proceeds the following charges to the extent that they were not deducted by the purchaser in computing payments: (a) smelting and refining charges; (b) penalties, smelter assay costs and umpire assay costs; (c) cost of freight and handling of ores, metals or concentrates from the Property to any mint, smelter, refinery, or other purchaser; (d) marketing costs; (e) costs of insurance on all such ores, metals or concentrates; and, (f) customs duties, severance tax, royalties, ad valorem or mineral taxes or the like and export and import taxes or tariffs payable in respect of said ores, metals or concentrates. 3. Payment The Royalty Interest shall be: (a) calculated and paid to Sr. Modesto Rivas Beltran on a quarterly basis within forty-five (45) days after the end of each fiscal quarter in respect of the actual proceeds received in such fiscal quarter; and, (b) each payment to Sr. Modesto Rivas Beltran hereunder shall be accompanied by an unaudited statement indicating the calculation of the Royalty Interest hereunder and Sr. Modesto Rivas Beltran shall receive, within three (3) months of the end of each Fiscal Period, a summary unaudited statement of the calculation of the Royalty Interest for the last completed Fiscal Period. Sr. Modesto Rivas Beltran shall have forty-five (45) days from the time of receipt of the summary statement to question the accuracy thereof in writing and, failing such objection, the summary statement shall be deemed to be correct and unimpeachable thereafter. If the summary statement is questioned by Sr. Modesto Rivas Beltran. Sr. Modesto Rivas Beltran will have twelve (12) months from the time of receipt of the summary statement to have such audited. The audited results will be final and determinative of the calculation of the Royalty Interest for the audited period and will be binding on CMI, and Sr. Modesto Rivas Beltran shall be entitled to examine, on reasonable notice and during normal business hours, such books and records as are reasonably necessary to verify the payment of the Royalty Interest to it from time to time. 4. Purchase of Royalty Interest The Royalty Interest may not be purchased from Sr. Modesto Rivas Beltran byCMI, unless negotiated at a later date. 5. Segregation of Property The determination of the Royalty Interest hereunder is based on the premise that production will be developed solely on the Property. If other properties are incorporated in a single mining project and metals, ores or concentrates pertaining to each are not readily segregated on a practical or equitable basis, the allocation of actual proceeds received and deductions therefrom shall be negotiated between the parties and, if the parties fail to agree on such allocation, shall be referred to arbitration pursuant to ARTICLE 8 of the Agreement. The arbitrator shall have reference first to the Agreement and this Exhibit B, and then, if necessary, to practices used in mining operations that are of a similar nature. The arbitrator shall be entitled to retain such independent mining consultants as he considers necessary. The decision of the arbitrator shall be final and binding on the parties hereto. 6. Non-Arm's Length Sale of Product For the purposes of calculating the amount of Royalty Interest payable to Sr. Modesto Rivas Beltran hereunder, if, after the date of commencement of Commercial Production, CMI sells any Product to a subsidiary or affiliate and if the sale price of such product is not negotiated on an arm's length basis, CMI shall, for the purposes of calculating the Royalty Interest and notwithstanding the actual amount of such sale price, add to the proceeds from the sale of such Product an amount, if any, which would be sufficient to make such sale price represent a reasonable net sale price for such Product as if negotiated at arm's length and after taking into account all pertinent circumstances (including, without limitation, the then current market conditions relating to ore, concentrates or other materials or products similar to the Product). CMI shall notify Sr. Modesto Rivas Beltran of the quantum of such reasonable net sale price and if Sr. Modesto Rivas Beltran does not object thereto within sixty (60) days after receipt of such notice, such quantum shall be final and binding for the purposes of this Exhibit. If Sr. Modesto Rivas Beltran objects to such stated reasonable net sale price, the matter will be referred to arbitration pursuant to ARTICLE 8 of the Agreement. -----END PRIVACY-ENHANCED MESSAGE-----