Strategic Alliance Agreement

Exhibit 10.10 STRATEGIC ALLIANCE AGREEMENT This Agreement is made as of April 27, 2006, between


CANACO RESOURCES INC., a corporation incorporated under the laws of British Columbia, Canada (the "Purchaser")


and


DOUGLAS LAKE MINERALS INC., a corporation incorporated under the laws of Nevada, United States (the "Vendor")


RECITALS A. The Vendor is the registered and beneficial owner of a 100% undivided interest in all of the properties legally described in Schedule "A" attached hereto (the "Portfolio"). B. In exchange for financial and technical assistance to be provided by the Purchaser to the Vendor, the Purchaser wishes to acquire up to a seventy percent (70%) undivided interest in properties of its choice from the Portfolio, in accordance with the terms of this Agreement. FOR VALUE RECEIVED, the parties agree as follows: Section 1 - interpretation 1.1 Definitions In this Agreement: "Agreement" means this agreement including any recitals and schedules to this agreement, as amended, supplemented or restated from time to time; "Aggregate Expenditure" means the aggregate amount of Expenditure spent from time to time by the Purchaser during the Term and Renewal Term, if applicable on one or more properties in the Portfolio (including any and all Removed Properties); "Arbitrator" has the meaning given to it in Section 12.3. "Applicable Law" means, with respect to any Person, property, transaction, event or other matter, (i) any constitution, treaty, law, statute, regulation, code, ordinance, principle of common law, rule, municipal by-law, order or other requirement (including a requirement arising at common law) having the force of law, or (ii) any published policy statements of securities regulators, whether or not having the force of law, relating or applicable to such Person, property, transaction, event or other matter; "Business Day" means any day on which banks are open for business in the City of Vancouver, British Columbia, but does not include a Saturday, Sunday or holiday in the Province of British Columbia; "Business" means the business of a mining, exploration and development company as now conducted by the Vendor. "Confidential Information" has the meaning given to it in Section 13.1. "Dispute Period" has the meaning given to it in Section 3.3. "Dispute Notice" has the meaning given to it in Section 3.3. "Effective Date" means the date that the first five (5) properties have been added to the Portfolio in accordance with Section 3.1. "Encumbrance" means any charge, mortgage, lien, pledge, claim, restriction, security interest or other encumbrance whether created or arising by agreement, statute or otherwise at law, attaching to property, interests or rights and shall be construed in the widest possible terms and principles known under the law applicable to such property, interests or rights and whether or not they constitute specific or floating charges as those terms are understood under the laws of the Province of British Columbia. "Expenditure" means all Initial Technical Assessment expenses, and other obligations and liabilities of whatever kind or nature spent or incurred directly or indirectly in connection with the exploration and development of any of the properties forming part of the Portfolio at any time during the Term, including, an overhead charge equal to fifteen percent (15%) of all Expenditures. For the purposes of the foregoing, Expenditures shall include, without limiting the generality of the foregoing: insurance premiums, moneys expended in maintaining properties in good standing, moneys expended in doing and filing assessment work, expenses paid for or incurred in connection with any Initial Technical Assessment and submissions to government agencies with respect to production permits, in paying the fees and travelling ex penses of all outside Persons engaged in work with respect to and for the benefit of the properties in the Portfolio. "Expenditure Update" has the meaning given to it in Section 7.1(1). "Governmental Authority" means any domestic or foreign government, including any federal, provincial, state, territorial or municipal government, and any government agency, tribunal, commission or other authority exercising or purporting to exercise executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, government. "Initial Technical Assessment" means a study conducted by the Purchaser of a property in the Portfolio and is comprised at a minimum of: (i) an on-sight inspection of the property in the Portfolio; (ii) Expenditure of $5,000; and (iii) a written report containing recommendations to the Vendor based on the Expenditures and inspection. "Notice" means any notice, approval, demand, direction, consent, designation, request, document, instrument, certificate or other communication required or permitted to be given under this Agreement. "Notice of Arbitration" has the meaning given to it in Section 12.3. "Option Agreement" has the meaning given to it in Section 3.2(1)(b). "Optioned Property" has the meaning given to it in Section 5.1(1). "Optioned Property Notice" has the meaning given to it in Section 5.1(1). "Options" has the meaning given to it in Section 5.1(1). "Party" or "Parties" means Douglas Lake and/or Canaco and/or any successors or permitted assignees. "Penalty Payment" has the meaning given to it in Section 8(1). "Penalty Property" has the meaning given to it in Section 8(1). "Person" means any natural person, sole proprietorship, partnership, corporation, trust, joint venture, any Governmental Authority or any incorporated or unincorporated entity or association of any nature. "Portfolio" means all of the properties legally described in Schedule A attached hereto as the same may be updated from time to time in accordance with this Agreement. This definition of Portfolio includes all Minerals in the Portfolio and all surface rights, including real and personal property, all easements, water and water rights associated with or attributable thereto. "Price" has the meaning given to it in Section 4. "Removed Property" has the meaning given to it in Section 3.2(1). "Renewal Term" has the meaning given to it in Section 11.1. "Term" has the meaning given to it in Section 2. "Updated Portfolio" has the meaning given to it in Section 3.3. 1.2 Headings and Table of Contents The division of this Agreement into sections, the insertion of headings and the provision of a table of contents are for convenience of reference only and are not to affect the construction or interpretation of this Agreement. 1.3 Number and Gender Unless otherwise specified, words importing the singular include the plural and vice versa and words importing gender include all genders. SECTION 2 - TERM Unless otherwise terminated pursuant to Section 11.2 or by agreement of the parties, this Agreement shall be for a term of two (2) years (the "Term") from the Effective Date. SECTION 3 - THE PORTFOLIO 3.1 Additions to the Portfolio (1) During the Term, the Vendor shall submit all properties in Tanzania that it acquires an undivided 100% legal and beneficial interest in and to, to the Purchaser and, subject to Section 3.1(2), such property shall immediately form part of the Portfolio, subject to any pre-existing Prospector's Mining Licenses that exist on such property, provided that the Vendor gives the Purchaser prior written Notice detailing same. (2) Notwithstanding anything contained herein, no property shall be included in the Portfolio until the Vendor's title to the property is established, in the sole and absolute discretion of the Purchaser, acting reasonably, and all permits, licenses and regulatory approvals and consents required to conduct work on the property have been obtained. Upon its acquisition of each property in Tanzania, the Vendor shall provide Notice thereof to the Purchaser, which shall include the following:


(a) copies of a title report or other evidence of the Vendor's title thereto acceptable to the Purchaser, acting reasonably; (b) all permits and licenses in the name of the Vendor; and (c) any and all technical or other information relating to such property.


(3) Upon the addition of a property to the Portfolio, all rights of the Purchaser in and to the Portfolio shall automatically extend to such additional property without any further action or payment required by the Purchaser. 3.2 Removals from the Portfolio (1) A property shall be removed (a "Removed Property") from the Portfolio upon the following:


(a) provided that the Purchaser has completed an Initial Technical Assessment on the property in accordance with Section 6, at the sole and absolute discretion of the Purchaser, by providing Notice to the Vendor of such removal, in the form attached as Schedule "C" hereto. The Notice will provide a release of any and all of the Purchaser's right, title and interest in such Removed Property; (b) upon the exercise by the Purchaser of the option contained herein in accordance with Section 5.1 with respect to such property, at which time the rights and obligations of the parties hereto with respect to such property, shall be governed by an option agreement, substantially in the form and substance as the option agreement attached as Schedule "B" hereto (the "Option Agreement"); (c) at the option of the Purchaser, in accordance with Section to Section 8(1)(b); or (d) automatically, in accordance with Section 8(2).


(2) A Removed Property may not be added back to the Portfolio Properties by the Vendor, without the prior written approval of the Purchaser, which may be arbitrarily withheld. (3) Notwithstanding anything contained herein, Expenditures with respect to a Removed Property, including, without limiting the generality of the foregoing, any Expenditure incurred in respect of a Removed Property which becomes the subject of an Option Agreement, will remain included in the Aggregate Expenditure. (4) If a property becomes a Removed Property pursuant to Section 3.2(1), the Purchaser shall forthwith deliver to the Vendor all data and factual information, if any, generated by the Purchaser through its Initial Technical Assessment, if any, in connection with the Removed Property. 3.3 Updating the Portfolio On the last day of every quarter, the Purchaser shall provide Notice to the Vendor of the properties comprising the Portfolio (the "Updated Portfolio"). Upon receipt of the Notice, the Vendor shall have ten (10) Business Days ("Dispute Period") to dispute the information contained therein. If the Vendor confirms the Updated Portfolio or does not notify the Purchaser of a dispute within the Dispute Period, the Purchaser shall replace Schedule "A" attached hereto with the Updated Portfolio. If the Vendor disagrees with the information contained in the Updated Portfolio the Vendor shall provide Notice (the "Dispute Notice") thereof to the Purchaser within the Dispute Period, indicating the properties that the Vendor considers should be or should not be included in the Updated Portfolio. The Vendor and the Purchaser, each acting reasonably, shall have ten (10) Business Days from the date of the Purchaser's receipt of the Dispute Notice to agree upon an Updated Portfolio. If the V endor and Purchaser are unable to agree upon an Updated Portfolio within such time, the dispute will be resolved in accordance with Section 12. SECTION 4 - PRICE 4.1 The Price The aggregate consideration for the rights and benefits contemplated by this Agreement shall be the sum of $350,000 (the "Price"), payable on the Effective Date by certified cheque, bank draft or wire transfer from the Purchaser to the Vendor or as the Vendor shall direct. 4.2 Allocation of the Price The Vendor agrees that under each Option Agreement entered into pursuant to Section 5.2, the Price may be allocated, at the sole and absolute discretion of the Purchaser and in any amount up to the Price, to cash consideration payments required under an Option Agreement for an Optioned Property, with the exception of the cash payment made at the Effective Date of the Option Agreement. For greater certainty, any amount of the Price allocated to the cash consideration under an Option Agreement pursuant to this Section 4.2 may not be allocated to the cash consideration under another Option Agreement for a different Optioned Property. SECTION 5 - OPTION 5.1 Option (1) From and including the Effective Date, the Purchaser shall have a continuous right during the Term or Renewal Term to exercise one (1) or more exclusive options (collectively, the "Options") to acquire up to a seventy percent (70%) undivided interest in and to one or more properties in the Portfolio (each property, an "Optioned Property"), provided that the Purchaser has, with respect to each Optioned Property has provided Notice thereof, in the form attached as Schedule "C" hereto (the "Optioned Property Notice") to the Vendor. (2) For greater certainty, the exercise by the Purchaser of an option pursuant to Section 5.1(1) shall not limit the Purchaser from exercising additional Options with respect to any property or properties in the Portfolio during the Term or Renewal Term. 5.2 Option Agreement The Purchaser and the Vendor shall enter into an Option Agreement for each Optioned Property substantially in the form attached as Schedule B hereto within ten (10) Business Days of the Purchaser delivering the applicable Optioned Property Notice to the Vendor. SECTION 6 - INITIAL TECHNICAL ASSESSMENT The Purchaser shall conduct an Initial Technical Assessment on each property in the Portfolio. Following the completion of an Initial Technical Assessment on a property in the Portfolio, the Purchaser shall elect to either:


(i) exercise the option contained herein in accordance with Section 5.1 with respect to such property; or (ii) remove such property from the Portfolio in accordance with Section 3.1(1).


SECTION 7 - EXPENDITURES 7.1 Expenditures (1) Other than the Expenditure to conduct an Initial Technical Assessment on each property in the Portfolio pursuant to Section 6, the Purchaser has no obligation to incur any Expenditures on any property in the Portfolio. Notwithstanding the foregoing, the Purchaser may, in its sole and absolute discretion, incur additional Expenditures on any property in the Portfolio, but the total Aggregate Expenditure shall not exceed $2,000,000. (2) The amount of Aggregate Expenditure by the Purchaser shall be updated (the "Expenditure Update") quarterly by the Purchaser providing Notice thereof to the Vendor. (3) The Vendor agrees that under each Option Agreement entered into pursuant to Section 5.2, Expenditures made pursuant to this Agreement may be allocated, at the sole and absolute discretion of the Purchaser and in any amount up to the Aggregate Expenditure, to expenditure under an Option Agreement for an Optioned Property. For greater certainty, any Expenditure allocated to expenditure under an Option Agreement for an Optioned Property pursuant to this Section 7.1 may not be allocated to another Option Agreement for a different Optioned Property. (4) Notwithstanding anything contained herein, the Aggregate Expenditure shall include, without limiting the generality of the foregoing, all Expenditure allocated pursuant to Section 7.1. 7.2 Audit The Vendor, upon notice in writing to the Purchaser, shall have the right to audit the Purchaser's accounts and records maintained for the Expenditure for any calendar year within the three (3) month period next following the end of such calendar year using external independent accountants or its own staff. Any discrepancies disclosed by such audit shall be made in writing to the Purchaser within the said three (3) month period. Within one (1) month after the date of claim the Purchaser shall reply in writing to the Vendor detailing the grounds and the reasons for the disclosed discrepancies. If the Vendor is not satisfied with the Purchaser's reply, the matter shall be resolved in accordance with Section 12. The cost of any audits pursuant to this Section 7.2 shall be borne by the Vendor. 7.3 Access (1) While this Agreement is in force, the Vendor agrees that the Purchaser, its servants, employees, representatives and contractors, shall have the right to enter in, under or upon the properties in the Portfolio to carry out an Initial Technical Assessment and to bring upon the properties in the Portfolio such machinery, tools and equipment (including, without limitation, drilling equipment) as the Purchaser considers necessary to carry out an Initial Technical Assessment. The Purchaser may remove from the Portfolio for the purpose of assaying or testing and to dispose of ores, any minerals or metals. (2) The Purchaser shall, for a period of one hundred eighty (180) days after the date that this Agreement is terminated, have the right to enter upon any property in the Portfolio and to remove therefrom all equipment, appliances, tools, machinery, mining plant and/or buildings brought or erected upon such property by the Purchaser or any of its servants, employees, representatives or contractors, and if any of the same are not so removed such equipment, appliances, tools, machinery, mining plant and/or buildings shall become the property of the Vendor without payment of any consideration therefore. (3) The Purchaser shall, for a period of one hundred eighty (180) days after a property becomes a Removed Property in accordance with Section 3.2 of this Agreement, have the right to enter upon the Removed Property and to remove therefrom all equipment, appliances, tools, machinery, mining plant and/or buildings brought or erected upon the Removed Property by the Purchaser or any of its servants, employees, representatives or contractors, and if any of the same are not so removed such equipment, appliances, tools, machinery, mining plant and/or buildings shall become the property of the Vendor without payment of any consideration therefore. SECTION 8 - PENALTY (1) If the Purchaser has not incurred Expenditure on a property in the Portfolio within six (6) months from the date such property was added to the Portfolio in accordance with Section 3.1, the Purchaser shall pay to the Vendor the sum of $25,000 (a "Penalty Payment") on or before the last day in such successive six (6) month period. Notwithstanding anything contained in this Agreement, any property for which the Purchaser has made a Penalty Payment (a "Penalty Property") shall, at the sole option of the Purchaser, either:


(a) subject to Error! Reference source not found., remain in the Portfolio; or (b) be removed from the Portfolio.


(2) Notwithstanding anything contained in this Agreement, if the Purchaser has not completed an Initial Technical Assessment on a Penalty Property within six (6) months from the date that the Penalty Payment was due and owing to the Vendor, the Penalty Property shall automatically be removed from the Portfolio in accordance with Section 3.2(1), without any right of the Purchaser to make a payment pursuant to this Section 8 and have the Penalty Property remain in the Portfolio. SECTION 9 - REPRESENTATIONS AND WARRANTIES OF THE VENDOR The Vendor represents and warrants to the Purchaser as stated below and acknowledges that the Purchaser is relying on the accuracy of each such representation and warranty in entering into this Agreement and completing the transaction herein. The Vendor agrees to provide a certificate of an Officer of the Vendor certifying that the representations and warranties contained below are true and accurate with the same effect as if made on the date of this Agreement with each Notice submitting a property to the Portfolio pursuant to Section 3.1(1). 9.1 Corporate Matters (1) Status and Capacity of Vendor. The Vendor has been duly incorporated and organized, is a subsisting corporation under the laws of Nevada, United States and has the corporate power and capacity to execute and deliver this Agreement and otherwise perform its obligations under this Agreement. (2) Authorization of Purchase. The execution and delivery of this Agreement and the transactions contemplated hereunder have been duly and validly authorized by the Vendor and, if applicable, by its shareholders and no other corporate proceedings or approvals on the part of the Vendor or its shareholders are necessary to authorize this Agreement. (3) Enforceability. This Agreement has been duly and validly executed and delivered by the Vendor and is a valid and legally binding obligation of the Vendor enforceable against the Vendor in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency and other laws affecting creditors' rights generally and to general principles of equity. (4) Residence. The Vendor is not a non-resident of Canada within the meaning of the Income Tax Act (Canada). (5) Licences and Permits. The Vendor holds all licences, permits and authorizations requisite for, and has complied with all Applicable Laws applicable to the Portfolio Properties. 9.2 Portfolio Properties (1) Properties. Schedule "A" lists all the properties included in the Portfolio Properties as of the date of this Agreement and sets forth the legal description thereof. (2) Legal Title.


(a) Subject to any Prospector's Mining Licenses disclosed by the Vendor in the Notice adding a property to the Portfolio in accordance with Section 3.1, the Vendor is the absolute legal and beneficial owner of, and has good and marketable title in fee simple to, the Portfolio Properties (including all buildings and structures thereon or appurtenant thereto), free and clear of any and all Encumbrances. (b) There are no agreements, options, contracts or commitments to sell, transfer or otherwise dispose of the Portfolio Properties or which would restrict the ability of the Vendor to acquire a seventy percent (70%) undivided interesting in and to the Portfolio Properties. (c) The Vendor is not in breach of any of the covenants, conditions and agreements contained in any agreements related to the Portfolio Properties. (d) There are no expropriation, condemnation or similar proceedings pending or, to the best of the Vendor's knowledge, threatened, with respect to any of the Portfolio Properties or any part thereof.


(3) Environmental Matters.


(a) For the purposes of this Section 9.2(3)(a):


(i) Contaminant means any substance, product, element, radiation, vibration or matter included in any definition of "hazardous product", "dangerous goods", "waste", "toxic substance", "contaminant", "pollutant", "deleterious substance" or words of similar import under any Environmental Law, or the presence of which in the environment is likely to affect adversely the quality of the environment in any way. (ii) Environmental Claim includes a claim, notice, administrative order, citation, complaint, summons, writ, proceeding or demand relating to remediation, investigation, monitoring, emergency response, decontamination, restoration or other action under any Environmental Law or any notice, claim, demand or other communication alleging or asserting liability, either direct or indirect, and either in whole or by way of contribution or indemnity, for investigatory, monitoring or cleanup costs, Governmental Authority response costs, damages, personal injuries, fines, penalties or for other relief, and arising out of, based on or resulting from (A) the presence, or Release into the environment, of any Contaminant, or (B) any non-compliance or alleged non-compliance with any Environmental Law. (iii) Environmental Laws means all applicable statutes, regulations, ordinances, by-laws, and codes and all international treaties and agreements, now or hereafter in existence in Tanzania, Malawi or the Democratic Republic of Congo as the case may be, relating to the protection and preservation of the environment, occupational health and safety, product safety, product liability or Hazardous Substances. (iv) Environmental Permits includes all orders, permits, certificates, approvals, consents, registrations and licences issued by any authority of competent jurisdiction under Environmental Laws. (v) Release means any release, spill, leak, emission, pumping, injection, deposit, discharge, dispersal, leaching, migration, spraying, abandonment, pouring, emptying, throwing, dumping, placing or exhausting of a Contaminant, and when used as a verb has a like meaning.


(b) The Vendor, the operation of the Business, the Portfolio Properties and the use, maintenance and operation thereof have been and are in compliance with all Environmental Laws. The Vendor has complied with all reporting and monitoring requirements under all Environmental Laws. The Vendor has not received any notice of any non-compliance with any Environmental Laws, and the Vendor has never been convicted of an offence for non-compliance with any Environmental Laws or been fined or otherwise sentenced or settled such prosecution short of conviction. (c) To the best of the Vendor's knowledge, there is no existing, pending or threatened Environmental Claim against the Vendor. (d) The Vendor has obtained all Environmental Permits and all other licenses, approvals, permits and authorizations necessary to conduct the Business and to own, use and operate the Portfolio Properties.


(4) Work Orders and Deficiencies. There are no outstanding work orders, non-compliance orders, deficiency notices or other such notices relative to the Portfolio Properties or the Business which have been issued by any police or fire department, sanitation, environment, labour, health or other Governmental Authorities. There are no matters under discussion with any such department or authority relating to work orders, non-compliance orders, deficiency notices or other such notices. The Business is not being operated in a manner which is in contravention of any statute, regulation, rule, code, standard, policy or other Applicable Law. 9.3 General Matters (1) Compliance with Constating Documents, Agreements and Laws. The execution, delivery and performance of this Agreement and each of the other agreements contemplated or referred to herein by the Vendor, and the transactions contemplated by this Agreement, will not constitute or result in a violation or breach of or default under, or cause the acceleration of any obligations of the Vendor under:


(a) any term or provision of any of the articles, by-laws or other constating documents of the Vendor; (b) the terms of any agreement (written or oral), indenture, instrument or understanding or other obligation or restriction to which the Vendor is a party, or (c) any term or provision of any of licenses or permits referred to in Section 9.1(5), any order of any court or Governmental Authority or regulatory body or any Applicable Law of any jurisdiction in which the Business is carried on.


(2) Litigation. There are no actions, suits, investigations or proceedings before any court, arbitrator, administrative agency or other tribunal or governmental authority, whether current, pending or threatened, which directly or indirectly relate to or affect the Portfolio Properties (including ownership and existing or past uses thereof and the compliance with Applicable Law), nor is the Vendor aware of any facts which would lead the Vendor to suspect that the same might be initiated or threatened. SECTION 10 - REPRESENTATIONS AND WARRANTIES OF THE PURCHASER The Purchaser represents and warrants to the Vendor as stated below and acknowledges that the Vendor is relying on the accuracy of each such representation and warranty in entering into this Agreement. 10.1 Status The Purchaser is a subsisting corporation under the laws of British Columbia and has full corporate power and authority to execute and deliver this Agreement. 10.2 Due Authorization The execution and delivery of this Agreement and the transactions contemplated hereunder have been duly and validly authorized by the Purchaser and no other corporate proceedings on the part of the Purchaser are necessary to authorize this Agreement. 10.3 Enforceability This Agreement has been duly and validly executed and delivered by the Purchaser and is a valid and legally binding agreement of the Purchaser enforceable against the Purchaser in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency and other laws affecting creditors' rights generally and to general principles of equity. SECTION 11 - RENEWAL AND TERMINATION 11.1 Renewal The Purchaser shall have the right to renew the Term for one (1) further period of two (2) years (the "Renewal Term"), by providing Notice thereof to the Vendor at least sixty (60) days prior the end of the Term, subject to the following terms and conditions:


(a) the Purchaser shall not be entitled to any right of renewal if, at the time of giving Notice of exercise thereof, the Purchaser is in material default of any material obligation hereunder; (b) this Agreement shall be renewed for the Renewal Term on the same terms and conditions as are contained in this Agreement, except that at the end of the Renewal Term, there shall be no further right to renew.


11.2 Termination (1) From the Effective Date, the Vendor may termina ...