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Extractive Industries
3 Months Ended
Dec. 31, 2011
Extractive Industries  
Mineral Industries Disclosures [Text Block]

NOTE 7.  MINERAL PROPERTY

 

Pursuant to a mineral property option agreement dated June 3, 2005, the Company was granted an option to acquire the sole and exclusive right, privilege and option to explore the claim together with the sole and exclusive right, privilege and option to purchase the mineral rights under certain terms and conditions.

 

a)            Cash Payments

 

Cash payment of $2,000 upon execution of the agreement.

 

b)            Property Payments and Assessment Work

 

Pay, or cause to paid, to grantor, or on grantor’s behalf as the Company may determine, all property payments and assessment work required to keep the Concessions and this Option in good standing during the term of this agreement.

 

The Company entered Mineral Rights Revenue Sharing Agreement with Mr. Almarez. Under the terms of the Mineral Rights Revenue Sharing Agreement (as amended on December 8, 2010), Mr. Almarez gives and grants to Placer Del Mar the sole and exclusive right to establish mineral claims on the Property, recorded as an asset of the company with a related liability, subject to a payment of $400,000 (present value is $262,727) by Placer to Mr. Almarez to be paid in equal payments over sixty (60) months in the amount of $6,666 beginning no later than June 1, 2011 for the exclusive right to begin extracting only Conchuela from the Property commencing December 8, 2010. According to a letter from Mr. Almarez on December 1, 2011, he agreed to extend the payment due date from June 30, 2011 to April 1, 2012. The monthly amount of $6,666 will continue to accrue as of June 1, 2011 and if the Company is able to make payments before April 1, 2012 the Company will do so. If no payments are made prior to April 1, 2012 the amounts due on that date will be $73,326.  Such payments shall be lieu of the original 1% Net Smelter Returns royalty originally reserved in favour of Mr. Almarez in the Mineral Rights Revenue Sharing Agreement dated April 24, 2006 and relate only to the mining and extraction of Conchuela.  All minerals, other than Conchuela, mined or extracted from the Property remain subject to the 1% Net Smelter Returns royalty as stated in the original Mineral Rights Revenue Sharing Agreement dated April 24, 2006.

 

The term of the option shall be for a period of 30 years from the signing date of this agreement, renewable upon the anniversary date of this agreement for an additional 30 year period at the sole discretion of the Company for a one-time payment of $100,000.

 

The total estimated square footage of the Conchuela reserves is not known at this time.  The Company recorded $334,666 as mineral rights license and amortizes them for 30 year option period.

 

On July 13, 2011 an addendum was signed by Mr. Almarez and the Company agreeng that Mr. Almarez is the registered and beneficial owner of property located at Mendedero Parte Alta, Parecela #55, Jose Garnica, Baja California Mexico (the "Property #2"); that Mr. Almarez has agreed to grant to Placer the right to free access and exploration of Property #2 for Mexican Shellstone-Limestone (“Conchuela”); and Mr. Almarez has agreed to grant to Placer the right to assign specific mineral extraction activities to Roca Cantera Y Marmol, Canteras Acabados Finos related only to the extraction of Conchuela from Property #2 under the terms and conditions set forth in the Mineral Rights Revenue Sharing Agreement dated April 24, 2006, as amended on December 8, 2010.

 

NOTE 8.  MINERAL EXTRACTION AGREEMENT FOR CONCHUELA

 

On December 8, 2010 the Company entered into a Mineral Extraction Agreement with Roca Cantera Y Marmol, Canteras Acabados Finos related to the extraction of only Mexican Shellstone-Limestone (“Conchuela”) on the property.  Payments to Placer for the extraction of Conchuela began in the fourth quarter of 2010 for the exclusive right to extract only Conchuela from the Property.  The term of this Mineral Extraction Rights Agreement is for a period of five years, renewable upon the anniversary date of the agreement for an additional 25 year period at the sole discretion of Placer del Mar for a one-time payment of $55,000.

 

Under the terms of the Mineral Extraction Agreement Roca Cantera Y Marmol, Canteras Acabados Finos will pay Placer del Mar $0.88 per square foot for all Conchuela extracted from the Property for its mineral extraction activities which began in the fourth quarter of 2010.  The first section consists of one acre with a surface area of 43,560 square feet and is one of 46.2 acres included in this Agreement.  Payments shall be calculated on the total number of square feet extracted each month from the Property and due and payable to us within thirty days, with a minimum monthly payment of $8,000.  In an addendum to the Agreement dated July 1, 2011, upon mutual consent of both parties, Placer and Roca Cantera Y Marmol, agreed that the minimum monthly payment of $8,000 may be waived from time to time, with written consent of both parties.  As of December 31, 2011 the Company has generated $197,927 in revenue from the Conchuela extraction and has an outstanding receivable balance of $127,927.