I finally read the whole agreement. For whatever it's worth, here's how I interprete it. It's similar to Chunky's reading I think. However, the contract is not what I would call a model of clarity and other interpretations are certainly possible.

The obligation to tranfer the Laird interests is triggered by the Feasiblity Notice under Section 5.4. The Feasibility Notice is notice of completing a Positive Bankable Feasibility Study. That term is defined in Section 5.5. If the study meets the requirements of Section 5.5(b)(i) (the 12% discount), it qualifies as a Positive Bankable Feasibility Study. If it meets the requirements of Section 5.5(b)(ii) (the 8 % discount) but not Section 5.5(b)(i), Teck "may elect . . . , in its sole discretion, to deem the report to be a positive feasiblity study." Teck has 30 days to make this determination.

CUU did not purport to give notice of a report that meets the requirements of Section 5.5(b)(i). Accordingly, the report will be considered a Positive Bankable Feasibility Study only if Teck elects to do so "in its sole discretion" as a Section 5.5(b)(ii) report. Two conclusions: First, the notice CUU gave to Teck is not a Feasibility Notice (at least not yet) because it's not a notice of Positive Bankable Feasibility Study since Teck has not "in its sole discretion" deemed it to be one. This seems to mean that the obligation to transfer the Laird interest is not yet perfected. Stated otherwise, CUU has no right to the Laird interets until it has given notice of a Positive Bankable Feasibility Study and that has not yet occured.

Second, the "in its sole discretion" language appears to give Teck complete freedom to consider the study not to be a Positive Bankable Feasibility Study for whatever reason it wants. I don't think it matters how well the study was prepared. Since the study did not meet the requirements of Section 5.5(b)(i), Teck can decide not to treat it as a Positive Bankable Feasibility Study. Chunky makes the interesting observation that maybe we could agrue Teck "implicitly" accepted it through their conduct but, as he notes, that would be difficult. In fact, unless Teck somehow lead CUU astray regarding the contract, I think Teck would be on pretty solid ground in just advising CUU that it did not consider the study to be a Positive Bankable Feasibility Study and would not need to provide reason.

Read in this way, it's really up to Teck to decide whether they want to back in now or whether they would rather hit the ball back into CUU's court. If Teck decides not to treat the study as a Positive Bankable Feasibility Study, CUU would appear to have two basic options. It could go back to drawing board and come up with a study that meets Section 5.5(b)(i) and submit that to Teck at a later date or it could exercise its rights under Section 6.3 to give notice of termination of the option for the Laird interests and just keep what it has now (the 70% direct participating interest). If CUU terminated the option for the Laird interests, under Section 5.4, Teck would no longer have a back in right at that point and under Section 8.2 could elect to recieve a net smelter royalty or some CUU shares. CUU could apparently then make a production decision without Teck under Section 5.4 but this would be subject to Laird carried interests held by Teck or otherwise outstanding.

Just my thoughts,

regards,

Volpino