Santa Barbara Resources Ltd V.SBL

Barrick

[tpaymans]

Rio have the right to earn in for a round 50% but Barrack also has right to earn 56% intrest if a resources report stating a measured and indicated resource of greater than 3 million ounces gold (including gold equivalent silver)

That brings back Santa Barbara's intrest to only 22 % of the possible income!

Is this correct? (22%)

Option Agreement

Santa Barbara can acquire a 100% interest in the Barrick Concessions, subject to Barrick's back-in rights as described below, by completing a total staged exploration expenditure of US$ 1.6 million over 4.5 years and by issuing 500.000 shares to Barrick. Subsequent to Santa Barbara's vesting its 100 % interest in the project Barrick holds the right to a 1.75 % Net Smelter Return royalty, a claw-back option of 51% after a resources report stating a measured and indicated resource of greater than 3 million ounces gold (including gold equivalent silver) in exchange for three times Santa Barbara's exploration expenditure and a further option to fund a bankable feasibility study for a mining project of >200,000 oz/pa gold to earn a 56% interest within 4 years. If Barrick elects not to complete the feasibility study Barrick will transfer 2% back at no cost and Santa Barbara will then hold a 51% of the project and would be the operator. After the 51% claw-back is completed the partners fund their share of expenses (except Barrick's Feasibility study option) or either would be diluted according to a standard JV formula. Further details of the transaction can be found in the Long Form Prospectus filed at www.sedar.com on May 31, 2010.

[tpaymans]

If i am not wrong it could be 66% from 44% because 56% is Barrick deal. That leaves Santa with only 15% or have I made a mistake somewhere? Or is it 56% from 34% (because Rio's 66%)? In both cases around16%

[bwk1]

. If Barrick exercises its back-in right after Rio Alto has earned an interest, Santa Barbara and Rio Alto will be diluted pro rata and the back-in purchase price will be paid proportionally to their participation in the joint venture at the time of the Barrick back-in, subject to Santa Barbara recovering three times its expenditures in the Sancos project prior to the date of the signature of the

[bwk1]

Sounds like both rio and sbl lose a peice of the pie