Note 6. Property Option Agreement

12 Months Ended

May 31, 2016

Notes

Note 6. Property Option Agreement

Note 6. PROPERTY OPTION AGREEMENT

On April 1, 2009, the Company entered into a Property Option Agreement with Patriot Gold Corporation (“Patriot”) whereby Patriot could have acquired an undivided right in the Company’s patented Bruner claim, subject to an existing 2% net smelter return in favor of the prior property owners and a 1.5% net smelter return reserved by the Company. The option required annual payments to the Company ranging from $45,000 to $60,000, due on or before April 1 of each year, with a final payment of $1,185,000 due on or before April 1, 2016, for a total payment amount of $1,500,000. A payment of $60,000 was received during the year ended May 31, 2015. During the current year, Patriot transferred its option rights to a third party and the Company agreed to accept $744,391 from the third party in full settlement of the option.  The Company retained its right to a 1.5% net smelting return.