3. MINERAL PROPERTY OPTION AGREEMENT
On November 15, 2011, the Company through
its wholly-owned Quebec subsidiary, 9252-4768 Quebec Inc., entered into a Property Option Agreement with 9228-6202 Quebec Inc.,
a Quebec corporation (the Optionor). Pursuant to the option agreement, the Company received the exclusive option
to acquire an undivided 100% right, title and interest in and to certain mineral claims located in Portland Township, Outaouais,
Quebec subject to a royalty reserved to the Optionor. To fully exercise the option and acquire an undivided 100% right, title and
interest in and to the Property, the Company was required to: 1) pay an aggregate sum of two hundred and five thousand dollars
($205,000) to Optionor; 2) incur an aggregate of at least sixty-five thousand dollars ($65,000) of expenditures on or with respect
to the Property; and 3) issue to Optionor an aggregate number of restricted shares of common stock of the Company equal to twenty
thousand US dollars ($20,000). The cash payments, expenditures and stock issuance were scheduled to be completed as follows:
Cash Payments: The Company
was required to pay the cash payments to Optionor, in the following amounts and by the dates described below:
||$50,000 within 2 business days of the execution of the Option Agreement|
||$70,000 within 30 days following the First Option Payment|
||$70,000 within 30 days following the Second Option Payment|
||$15,000 within 30 days following the Third Option Payment|
All these payments had been made by
March 31, 2012.
Expenditures: The Company
is required to incur not less than $65,000 by way of exploration on or before November 15, 2012. The Company has spent $17,815
for initial exploration during the fiscal year ended September 30, 2012.
Stock Issuances: The Company
was required to issue an aggregate number of restricted shares of common stock of the Company equal to twenty thousand US dollars
($20,000) pursuant to the terms and conditions of the Property Option Agreement, The Company was required to issue the shares within
10 days of the completion of the forward split or no later than 90 days of execution of the Property Option Agreement. The Company
issued the shares on May 8, 2012 and issued a total of 200,000 shares of common stock at a deemed price of $0.10 per share which
was the first trading price of the stock after the completion of the forward split.
Upon satisfaction of the foregoing terms
and conditions, the Company will have fully exercised the Option and will have acquired an undivided 100% right, title and interest
in and to the property, subject to a 2% net smelter return. If the Company fails to comply with all these requirements within the
time periods set forth above, the Option shall terminate 30 days after the Optionor provides written notice to the Company of such
failure, subsequent to which the Company has 60 days from the receipt of the notice of default to cure.
During the fiscal year ended September
30, 2012, the Company made cash payments in the amount of $205,000 and issued a total of 200,000 shares of common stock at a deemed
price of $0.10 per share to 9228-6202 Quebec Inc. pursuant to the cash payment and stock payment schedule noted above, which amount
was capitalized as option costs on the mineral property. At the close of the period ended September 30, 2012, the Company evaluated
the recoverability of the amount paid for the option and determined to impair the amount in full, as the Company is currently in
the exploration phase, with no proven or probable reserves having yet been determined.