Common use of NSR ROYALTY Clause in Contracts

NSR ROYALTY. 5.1 The Optionee pay to the Optionor a royalty (the “NSR Royalty” ) equal to a 1% percent in aggregate of Net Smelter Returns (as defined in Subsection 1.1), subject to §5.4 of this Agreement. This NSR Royalty will be payable for so long as the Optionee and/or its successors and assigns hold any interest in the Leases. 5.2 Payment of the NSR Royalty will be made quarterly 70 days after the end of each quarter of the Optionee. Within 70 days after the end of each quarter for which the NSR Royalty is payable, the records relating to the calculation of the NSR Royalty for such quarter will be paid by the Optionee and any adjustments in the payment of the NSR Royalty will be made forthwith after completion of the annual audit. All payments of the NSR Royalty for a year will be deemed final and in full satisfaction of all obligations of the Optionee in respect thereof if such payments or calculations thereof are not disputed by the Optionor within 30 days after receipt by the Optionor of the said payment. The Optionee will maintain accurate records relevant to the determination of the NSR Royalty and the Optionor, or its authorized agent, shall be permitted the right to examine such records at all reasonable times. 5.3 The determination of the NSR Royalty hereunder is based on the premise that production will be developed solely on the Leases except that the Optionee will have the right to commingle ore mined from the Leases with ore mined and produced from other properties provided the Optionee will adopt and employ reasonable practices an procedures weighing, sampling and assaying, in order to determine the amounts of products derived from, or attributable to ore mined and produced from the Leases. The Optionee will deliver the Optionor a description of Optionee’s commingling plan not less than 30 days before commencing of commingling. The Optionee will maintain accurate records of the results of such sampling, weighing and analysis with respect to any ore mined and produced from the Leases. The Optionor or its authorized agents will be permitted the right to examine at all reasonable time such records pertaining to commingling of ore or to the calculation of Net Smelter Returns. 5.4 The Optionee shall have the right to purchase the 1% NSR Royalty for US$1,000,000, at any time.

NSR ROYALTY. 5.1 The Optionee 11.1 Candente will pay to the Optionor a Lushcott Group an annual royalty (the “NSR Royalty” ) equal to a 1% two and one-half percent in aggregate (2.5%) of Net Smelter Returns (as defined in Subsection 1.1)Returns, subject to §5.4 of this Agreement. This NSR Royalty will be payable for so long as the Optionee and/or its successors Sections 11.4 and assigns hold any interest in the Leases11.6. 5.2 Payment 11.2 After the exercise of the Option, payment of the NSR Royalty will be made quarterly 70 within 30 days after the end of each yearly quarter based upon a year commencing on the 1st day of May and expiring on the Optionee30th day of April in any year in which production occurs. Within 70 60 days after the end of each quarter year for which the NSR Royalty is payable, the records relating to the calculation of the NSR Royalty Net Smelter Returns for such quarter year will be paid audited by the Optionee Candente and any adjustments in the payment of the NSR Royalty will be made forthwith after completion of the annual audit. All payments of the NSR Royalty for a year will be deemed final and in full satisfaction of all obligations of the Optionee Candente in respect thereof if such payments or calculations thereof are not disputed by the Optionor Lushcott Group within 30 60 days after receipt by the Optionor Lushcott Group of the said paymentaudit statement. The Optionee Candente will maintain accurate records relevant to the determination of the NSR Royalty Net Smelter Returns and the OptionorLushcott Group, or its authorized agent, shall be permitted the right to examine such records at all reasonable times. 5.3 11.3 The determination of the NSR Royalty Net Smelter Returns royalty hereunder is based on the premise that production will be developed solely on the Leases Claims except that the Optionee Candente will have the right to commingle ore mined from the Leases Claims with ore mined and produced from other properties provided the Optionee Candente will adopt and employ reasonable practices an and procedures for weighing, sampling and assaying, in order to determine the amounts of products derived from, or attributable to ore mined and produced from the LeasesClaims. The Optionee will deliver the Optionor a description of Optionee’s commingling plan not less than 30 days before commencing of commingling. The Optionee Candente will maintain accurate records of the results of such sampling, weighing and analysis with respect to any ore mined and produced from the LeasesClaims. The Optionor Lushcott Group or its authorized agents agent will be permitted the right to examine at all reasonable time times such records pertaining to commingling of ore or to the calculation of Net Smelter Returns. 5.4 The Optionee a.1 Candente shall have the right at any time to purchase one of the 1% two and one-half royalty percentage points, and thus reduce the NSR Royalty for US$from 2.5% to 1.5%, by paying to the Lushcott Group the sum of $1,000,000, at any time.

NSR ROYALTY. 5.1 The Optionee 6.1 Upon the Commencement of Commercial Production (as defined in Schedule “B”), the Purchaser shall pay to the Optionor a royalty (Vendor the “NSR Royalty” ) equal , being equal, in aggregate, to a 12% percent in aggregate of the Net Smelter Returns (as defined in Subsection 1.1Schedule “B”), subject on the terms and conditions as set out in this Section and Schedule “B” hereto, such terms and conditions to §5.4 of this Agreement. This NSR Royalty will be payable for so long as the Optionee and/or its successors finalized in a formal royalty agreement in accordance with Article 6 hereof and assigns hold any interest in the Leasesform of Schedule “B” hereto prior to the Commencement of Commercial Production. 5.2 Payment 6.2 Installments of the NSR Royalty will be made quarterly 70 days after the end of each quarter of the Optionee. Within 70 days after the end of each quarter for which the NSR Royalty is payable, the records relating to the calculation of the NSR Royalty for such quarter will payable shall be paid by the Optionee and any adjustments in Purchaser to the payment of Vendor immediately upon the NSR Royalty will be made forthwith after completion of the annual audit. All payments of the NSR Royalty for a year will be deemed final and in full satisfaction of all obligations of the Optionee in respect thereof if such payments or calculations thereof are not disputed by the Optionor within 30 days after receipt by the Optionor Purchaser of the said paymentpayment from the smelter, refinery or other place of treatment of the proceeds of sale of the minerals, ore, concentrates or other product from the Property. The Optionee Purchaser will maintain accurate records relevant to estimate in good faith the determination amount of the NSR Royalty and pay the OptionorNSR Royalty based on such estimate. 6.3 No later than March 1st of each calendar year, or its authorized agentcommencing with the year in which Commencement of Commercial Production occurs, the accounts of the Purchaser relating to operations on the Property and the statement of operations, which shall include the statement of calculation of NSR Royalty for the year last completed, shall be permitted audited by the auditors of the Purchaser at its expense and delivered to the Vendor. The Vendor shall have 45 days after receipt of such statements to question the accuracy thereof in writing and, failing such objection, the statements shall be deemed to be correct and unimpeachable thereafter. 6.4 If such audited financial statements disclose any overpayment of NSR Royalty by the Purchaser during the fiscal year, the amount of the overpayment shall be deducted from future installments of NSR Royalty payable. 6.5 If such audited financial statements disclose any underpayment of NSR Royalty by the Purchaser during the year, the amount thereof shall be paid to the Vendor together with interest accruing from the original due date for the payment of the said underpaid royalty at the prime rate plus two (2%) percent of the Purchaser’s principal banker forthwith after determination thereof. 6.6 The Purchaser agrees to maintain for each mining operation on the Property, up-to-date and complete records relating to the production and sale of minerals, ore, bullion and other product from the Property, including accounts, records, statements and returns relating to treatment and smelting arrangements of such product, and the Vendor or its agents shall have the right to examine such records at all reasonable times. 5.3 The determination , including for a period of 12 months following the expiration or termination of this Agreement, to inspect such records, statements and returns and make copies thereof at its own expense for the purpose of verifying the amount of NSR Royalty hereunder is based on payments to be made by the premise that production will be developed solely on Purchaser to the Leases except that the Optionee will have the right to commingle ore mined from the Leases with ore mined and produced from other properties provided the Optionee will adopt and employ reasonable practices an procedures weighing, sampling and assaying, in order to determine the amounts of products derived from, or attributable to ore mined and produced from the LeasesVendor pursuant hereto. The Optionee will deliver the Optionor a description of Optionee’s commingling plan not less than 30 days before commencing of commingling. The Optionee will maintain accurate records of the results of such sampling, weighing and analysis with respect to any ore mined and produced from the Leases. The Optionor or its authorized agents will be permitted the right to examine at all reasonable time such records pertaining to commingling of ore or to the calculation of Net Smelter Returns. 5.4 The Optionee Vendor shall have the right to purchase have such accounts audited by independent auditors at its own expense once each fiscal year. 6.7 In the 1% event the Vendor considers that an underpayment of the NSR Royalty for US$1,000,000has been made, the Vendor at any timetime may audit the books of the Purchaser relating to production and the sale of product from the Property at their own expense. If such audit determines that there has been an underpayment of 3% or more, the Purchaser will pay all costs of said audit, and will pay the amount of the underpayment together with interest of two (2%) per month on the underpaid amount from the date it should have been paid to the date of payment.

NSR ROYALTY. 5.1 The Optionee 9.1 Candente will pay to the Optionor a Hecla an annual royalty (the “NSR Royalty” ) equal to a 1% two and one-half percent in aggregate (2.5%) of Net Smelter Returns (as defined in Subsection 1.1)Returns, subject to §5.4 of this Agreement. This NSR Royalty will be payable for so long as the Optionee and/or its successors and assigns hold any interest in the LeasesSubsection 9.4. 5.2 Payment a.1 After the exercise of the Option, payment of the NSR Royalty will be made quarterly 70 within thirty (30) days after the end of each yearly quarter based upon a year commencing on the 1st day of May and expiring on the Optionee30th day of April in any year in which production occurs. Within 70 sixty (60) days after the end of each quarter year for which the NSR Royalty is payable, the records relating to the calculation of the NSR Royalty Net Smelter Returns for such quarter year will be paid audited by the Optionee Candente and any adjustments in the payment of the NSR Royalty will be made forthwith after completion of the annual audit. All payments of the NSR Royalty for a year will be deemed final and in full satisfaction of all obligations of the Optionee Candente in respect thereof if such payments or calculations thereof are not disputed by the Optionor Hecla within 30 sixty (60) days after receipt by the Optionor Hecla of the said paymentaudit statement. The Optionee Candente will maintain accurate records relevant to the determination of the NSR Royalty Net Smelter Returns and the OptionorHecla, or its authorized agent, shall be permitted the right to examine such records at all reasonable times. 5.3 a.2 The determination of the NSR Net Smelter Returns Royalty hereunder is based on the premise that production will be developed solely on the Leases Claims except that the Optionee Candente will have the right to commingle ore mined from the Leases Claims with ore mined and produced from other properties provided the Optionee Candente will adopt and employ reasonable practices an and procedures for weighing, sampling and assaying, in order to determine the amounts of products derived from, or attributable to ore mined and produced from the LeasesClaims. The Optionee will deliver the Optionor a description of Optionee’s commingling plan not less than 30 days before commencing of commingling. The Optionee Candente will maintain accurate records of the results of such sampling, weighing and analysis with respect to any ore mined and produced from the LeasesClaims. The Optionor Hecla or its authorized agents agent will be permitted the right to examine at all reasonable time times such records pertaining to commingling of ore or to the calculation of Net Smelter Returns. 5.4 The Optionee 9.4 Candente shall have the right at any time to purchase one and one-half of the 1% two and one-half royalty percentage points, and thus reduce the NSR Royalty from 2.5% to 1.0%, by paying to Hecla the sum of $1,500,000. 9.5 If Candente sells, assigns, options or otherwise disposes of any interest in the Claims or in this Agreement to another party and receives consideration for US$1,000,000such disposition, at 25% of any timecash payment or shares of any company after deducting annual vigencia payments (the “Consideration”) received by Candente for such disposition shall be for the account of Hecla within the first year after the Effective Date of this agreement, 20% in the second year, 15% in the third year and 10% in the fourth year. Candente shall deliver Hecla’s share of the Consideration to Hecla within fifteen (15) days of Candente receiving the Consideration. The cash equivalent value of the Consideration paid by Candente to Hecla pursuant to this Subsection 9.5 shall be applied to and deemed to be part of the $1,500,000 payment referred to in Subsection 9.4.

NSR ROYALTY. 5.1 11.1 The Optionee will pay to the Optionor Sub a royalty (the “NSR Royalty” ) equal to a 1% two percent (2.0%) in aggregate of Net Smelter Returns net smelter returns royalty (as defined in Subsection 1.1), subject to §5.4 of this AgreementSubsection 11.4. This The NSR Royalty will be payable for so long as the Optionee and/or its successors and assigns hold any interest in the LeasesClaims. 5.2 11.2 Payment of the NSR Royalty will be made quarterly 70 within 30 days after the end of each yearly quarter based upon a year commencing on the 1st day of January and expiring on the Optionee31st day of December in any year in which ore is produced or removed from the Claims. Within 70 60 days after the end of each quarter year for which the NSR Royalty is payable, the records relating to the calculation of the NSR Royalty for such quarter year will be paid audited by the Optionee and any adjustments in the payment of the NSR Royalty will be made forthwith after completion of the annual audit. All payments of the NSR Royalty for a year will be deemed final and in full satisfaction of all obligations of the Optionee in respect thereof if such payments or calculations thereof are not disputed by the Optionor within 30 60 days after receipt by the The Optionor of the said paymentaudit statement. The Optionee will maintain accurate records relevant to the determination of the NSR Royalty and the Optionor, or its authorized agent, shall be permitted the right to examine such records at all reasonable times. 5.3 11.3 The determination of the NSR Royalty hereunder is based on the premise that production will be developed solely on the Leases Claims except that the Optionee will have the right to commingle ore mined from the Leases Claims with ore mined and produced from other properties provided the Optionee will adopt and employ reasonable practices an and procedures for weighing, sampling and assaying, in order to determine the amounts of products derived from, or attributable to ore mined and produced from the Leases. The Optionee will deliver the Optionor a description of Optionee’s commingling plan not less than 30 days before commencing of comminglingClaims. The Optionee will maintain accurate records of the results of such sampling, weighing and analysis with respect to any ore mined and produced from the LeasesClaims. The Optionor or its authorized agents will be permitted the right to examine at all reasonable time times such records pertaining to commingling of ore or to the calculation of Net Smelter Returns. 5.4 11.4 The Optionee shall have the right at any time to purchase up to 100% of the 1% NSR Royalty on the Golden Arc Claims by paying to the Optionor the sum of $1,000,000 for US$1,000,000each one of the two percentage points of the NSR Royalty on the Golden Arc Claims. 11.5 The Optionee shall pay advance royalty payments (the “Advance Royalty Payments”) as follows: (a) $10,000 by the first anniversary of the date of this Agreement; (b) $10,000 by the second anniversary of the date of this Agreement; (c) $20,000 by the third anniversary of the date of this Agreement; and (d) $20,000 by each successive anniversary of the date of this Agreement until production commences from the Claims and continues uninterrupted for a period of 12 consecutive months, at any timewhich time all further obligations to pay Advance Royalties will terminate, except for those Advance Royalties, previously unpaid by the Optionee. 11.6 All Advance Royalty Payments will be deducted from the NSR Royalty payments otherwise needed to be made under this Agreement. 11.7 It is acknowledged that the Optionor Sub is responsible for paying a royalty to Golden Arc under the Underlying Option Agreement relating to the Golden Arc Claims and, possibly, the Underlying Additional Claims. Each of the Optionor, the Optionor Sub and the Optionee will use their best efforts to make reasonable arrangements between them from time to time to ensure that payments of royalty under this Agreement to the Optionor Sub, will also be paid by the Optionor Sub to Golden Arc to the extent necessary to ensure that the royalty payments of the Optionor Sub to Golden Arc are keep in good standing. 11.8 The Optionor Sub hereby agrees that it will make reasonable efforts to reduce the advance royalty payments to be paid under the Underlying Option Agreement and, in the event that the Underlying Optionor does agree to reduce those advance royalty payments, then the resulting benefit will be in turn provided to the Optionee and the Optionor, Optionor Sub and the Optionee will enter into an amending agreement to amend Section 11.5 of this Agreement.

NSR ROYALTY. 5.1 The Optionee 10.1 Candente will pay to the Optionor a Kriask Syndicate an annual royalty (the “NSR Royalty” ) equal to a 1% two and one-half percent in aggregate (2.5%) of Net Smelter Returns (as defined in Subsection 1.1)Returns, subject to §5.4 of this Agreement. This NSR Royalty will be payable for so long as the Optionee and/or its successors Sections 10.4 and assigns hold any interest in the Leases10.6. 5.2 Payment 10.2 After the exercise of the Option, payment of the NSR Royalty will be made quarterly 70 within 30 days after the end of each yearly quarter based upon a year commencing on the 1st day of May and expiring on the Optionee30th day of April in any year in which production occurs. Within 70 60 days after the end of each quarter year for which the NSR Royalty is payable, the records relating to the calculation of the NSR Royalty Net Smelter Returns for such quarter year will be paid audited by the Optionee Candente and any adjustments in the payment of the NSR Royalty will be made forthwith after completion of the annual audit. All payments of the NSR Royalty for a year will be deemed final and in full satisfaction of all obligations of the Optionee Candente in respect thereof if such payments or calculations thereof are not disputed by the Optionor Kriask Syndicate within 30 60 days after receipt by the Optionor Kriask Syndicate of the said paymentaudit statement. The Optionee Candente will maintain accurate records relevant to the determination of the NSR Royalty Net Smelter Returns and the OptionorKriask Syndicate, or its authorized agent, shall be permitted the right to examine such records at all reasonable times. 5.3 10.3 The determination of the NSR Royalty Net Smelter Returns royalty hereunder is based on the premise that production will be developed solely on the Leases Claims except that the Optionee Candente will have the right to commingle ore mined from the Leases Claims with ore mined and produced from other properties provided the Optionee Candente will adopt and employ reasonable practices an and procedures for weighing, sampling and assaying, in order to determine the amounts of products derived from, or attributable to ore mined and produced from the LeasesClaims. The Optionee will deliver the Optionor a description of Optionee’s commingling plan not less than 30 days before commencing of commingling. The Optionee Candente will maintain accurate records of the results of such sampling, weighing and analysis with respect to any ore mined and produced from the LeasesClaims. The Optionor Kriask Syndicate or its authorized agents agent will be permitted the right to examine at all reasonable time times such records pertaining to commingling of ore or to the calculation of Net Smelter Returns. 5.4 The Optionee 10.4 Candente shall have the right at any time to purchase one of the two and one-half royalty percentage points, and thus reduce the NSR Royalty from 2.5% to 1.5%, by paying to the Kriask Syndicate the sum of $1,000,000. 10.5 If Candente sells, assigns, options or otherwise disposes of any interest in the Claims or in this Agreement to another party and receives consideration for such disposition, 10% of any cash payment or shares of any company (the "Consideration") received by Candente for such disposition shall be for the account of the Kriask Syndicate. Candente shall deliver the Kriask Syndicate's 10% share of the Consideration to the Kriask Syndicate within 15 days of Candente receiving the Consideration. The cash equivalent value of the Consideration paid by Candente to the Kriask Syndicate pursuant to this Subsection 10.5 shall be applied to and deemed to be part of the $1,000,000 payment referred to in Subsection 10.4. 10.6 If Candente exercises the option in Subsection 10.4 to purchase one royalty percentage point, the Kriask Syndicate shall then have the right, exercisable only upon completion of a bankable feasibility study by Candente, to require Candente to purchase a further one of the then remaining one and one-half royalty percentage points, and thus reduce the NSR Royalty from 1.5% to 0.5%. In order to exercise such right, the Kriask Syndicate must give written notice to Candente of its intention within 60 days of receiving a copy of the bankable feasibility study. The price to be paid by Candente to purchase the 1% NSR Royalty for additional one royalty percentage point shall be a fixed dollar amount per ounce of gold multiplied by the number of ounces of gold calculated in the mineable reserve set out in the bankable feasibility study. For the purposes of the above calculation, the fixed dollar amount per ounce of gold shall be determined as follows, based upon the trading price of gold on the London Metals Exchange on the date of the bankable feasibility study: Up to US$1,000,000, at any time.349 US $1.00 US$350 - US$449 US$1.25 US$450 - US$524 US$1.50 US$525 - US$599 US$1.75 US$600 or above US$2.00

NSR ROYALTY. 5.1 The 11.1 Subject to Subsection 7.1(b)(ii), the Optionee will pay to the Optionor a royalty (the “NSR Royalty” ) equal to a 1% one and one-half percent (1.5%) in aggregate of Net Smelter Returns net smelter returns royalty (as defined in Subsection 1.1), subject to §5.4 Subsection 11.4 of this Agreement. This NSR Royalty will be payable for so long as the Optionee and/or its successors and assigns hold any interest in the Leases. 5.2 11.2 Payment of the NSR Royalty will be made quarterly 70 within 30 days after the end of each yearly quarter based upon a year commencing on the 1st day of January and expiring on the Optionee31st day of December in any year in which ores, concentrates or minerals are removed from the Licences. Within 70 60 days after the end of each quarter year for which the NSR Royalty is payable, the records relating to the calculation of the NSR Royalty for such quarter year will be paid audited by the Optionee and any adjustments in the payment of the NSR Royalty will be made forthwith after completion of the annual audit. All payments of the NSR Royalty for a year will be deemed final and in full satisfaction of all obligations of the Optionee in respect thereof if such payments or calculations thereof are not disputed by the Optionor within 30 60 days after receipt by the The Optionor of the said paymentaudit statement. The Optionee will maintain accurate records relevant to the determination of the NSR Royalty and the Optionor, or its authorized agent, shall be permitted the right to examine such records at all reasonable times. 5.3 11.3 The determination of the NSR Royalty hereunder is based on the premise that production will be developed solely on the Leases Licences except that the Optionee will have the right to commingle ore mined from the Leases Licences with ore mined and produced from other properties provided the Optionee will adopt and employ reasonable practices an and procedures for weighing, sampling and assaying, in order to determine the amounts of products derived from, or attributable to ore mined and produced from the Leases. The Optionee will deliver the Optionor a description of Optionee’s commingling plan not less than 30 days before commencing of comminglingLicences. The Optionee will maintain accurate records of the results of such sampling, weighing and analysis with respect to any ore mined and produced from the LeasesLicences. The Optionor or its authorized agents will be permitted the right to examine at all reasonable time times such records pertaining to commingling of ore or to the calculation of Net Smelter Returns. 5.4 11.4 The Optionee shall have the right at any time to purchase up to 50% of the 1% NSR Royalty (0.75%) by paying to the Optionor $250,000 for US$1,000,000each 0.25% of the NSR Royalty, at any timesuch that the Optionee will have to pay an aggregate sum of $750,000 for 50% of the NSR Royalty.

NSR ROYALTY. 5.1 13.1 The Optionee will pay to the Optionor Sub a royalty (the “NSR Royalty” ) equal to a 1% two percent (2.0%) in aggregate of Net Smelter Returns NSR Royalty (as defined in Subsection 1.1), subject to §5.4 of this AgreementSubsection 13.4. This The NSR Royalty will be payable for so long as the Optionee and/or its successors and assigns hold any interest in the LeasesClaims. 5.2 13.2 Payment of the NSR Royalty will be made quarterly 70 within 30 days after the end of each yearly quarter based upon a year commencing on the 1st day of January and expiring on the Optionee31st day of December in any year in which ore is produced or removed from the Claims. Within 70 60 days after the end of each quarter year for which the NSR Royalty is payable, the records relating to the calculation of the NSR Royalty on the Golden Arc Claims and on the other Claims (which must be reported separately) for such quarter year will be paid audited by the Optionee and any adjustments in the payment of the NSR Royalty will be made forthwith after completion of the annual audit. All payments of the NSR Royalty for a year will be deemed final and in full satisfaction of all obligations of the Optionee in respect thereof if such payments or calculations thereof are not disputed by the Optionor within 30 days one year after receipt by the Optionor Sub of the said paymentaudit statement. The Optionee will maintain accurate records relevant to the determination of the NSR Royalty on the Golden Arc Claims and on the other Claims (which must be reported separately) and the OptionorOptionor Sub, or its authorized agent, shall be permitted the right to examine such records at all reasonable times. 5.3 13.3 The determination of the NSR Royalty hereunder is based on the premise that production will be developed solely on the Leases Claims except that the Optionee will have the right to commingle ore mined from the Leases Claims with ore mined and produced from other properties provided the Optionee will adopt and employ reasonable practices an and procedures for weighing, sampling and assaying, in order to determine the amounts of products derived from, or attributable to ore mined and produced from the LeasesClaims. The Optionee will deliver to the Optionor Optionors a description of Optionee’s commingling plan not less than 30 days before commencing commencement of commingling. The Optionee will maintain accurate records of the results of such sampling, weighing and analysis with respect to any ore mined and produced from the LeasesGolden Arc Claims and the other Claims (which must be recorded and reported separately). The Optionor Sub or its authorized agents will be permitted the right to examine at all reasonable time times such records pertaining to commingling of ore or to the calculation of Net Smelter ReturnsNSR Royalty. 5.4 13.4 The Optionee shall have the right at any time to purchase up to 100% of the 1% NSR Royalty on the Golden Arc Claims by paying to the Optionor Sub the sum of $1,000,000 for US$1,000,000each one of the two percentage points of the NSR Royalty on the Golden Arc Claims. 13.5 The Optionee shall pay advance royalty payments (the “Advance Royalty Payments”) as follows: (a) $10,000 by March 16, 2006 (which payment has been made); (b) $10,000 by December 3, 2006; (c) $20,000 by December 3, 2007; and (d) $20,000 by each successive December 3 of the term of this Agreement until production commences from the Claims and continues uninterrupted for a period of 12 consecutive months, at any timewhich time all further obligations to pay Advance Royalties will terminate, except for those Advance Royalties, previously unpaid by the Optionee. 13.6 All Advance Royalty Payments will be deducted from the NSR Royalty payments otherwise needed to be made under this Agreement. 13.7 It is acknowledged that the Optionor Sub is responsible for paying a royalty to Golden Arc under the Underlying Golden Arc Option Agreement relating to the Golden Arc Claims. Each of the Optionor, the Optionor Sub and the Optionee will use their best efforts to make reasonable arrangements between them from time to time to ensure that payments of royalty under this Agreement to the Optionor Sub, will in turn be paid by the Optionor Sub to Golden Arc to the extent necessary to ensure that the royalty payments of the Optionor Sub to Golden Arc are keep in good standing. 13.8 In the event that the Optionor Sub transfers to a third party its right or part of its right to obtain the NSR Royalty, then Optionor Sub will first provide written notice to the Optionee of such transfer and until receipt of notice of such transfer, then Optionee may make payment of the NSR Royalty to the Optionor Sub.

NSR ROYALTY. 5.1 The Optionee 12.1 If Global elects not to form the Joint Venture and elects to receive the NSR Royalty, Dynamic will pay to the Optionor a Global an annual royalty (the “NSR Royalty” ) equal to a 1% percent in aggregate THREE PERCENT (3.0%) of Net Smelter Returns (as defined in Subsection 1.1)Returns, subject to §5.4 of this Agreement. This NSR Royalty will be payable for so long as the Optionee and/or its successors and assigns hold any interest in the LeasesSubsection 12.4. 5.2 12.2 Payment of the NSR Royalty will be made quarterly 70 days within 30 DAYS after the end of each yearly quarter based upon a year commencing on the 1ST day of MAY and expiring on the Optionee30TH day of APRIL in any year in which production occurs. Within 70 days 60 DAYS after the end of each quarter year for which the NSR Royalty is payable, the records relating to the calculation of the NSR Royalty Net Smelter Returns for such quarter year will be paid audited by the Optionee Dynamic and any adjustments in the payment of the NSR Royalty will be made forthwith after completion of the annual audit. All payments of the NSR Royalty for a year will be deemed final and in full satisfaction of all obligations of the Optionee Dynamic in respect thereof if such payments or calculations thereof are not disputed by the Optionor Global within 30 days 60 DAYS after receipt by the Optionor Global of the said paymentaudit statement. The Optionee Dynamic will maintain accurate records relevant to the determination of the NSR Royalty Net Smelter Returns and the OptionorGlobal, or its authorized agent, shall be permitted the right to examine such records at all reasonable times. 5.3 12.3 The determination of the NSR Royalty Net Smelter Returns royalty hereunder is based on the premise that production will be developed solely on the Leases Claims except that the Optionee Dynamic will have the right to commingle ore mined from the Leases Claims with ore mined and produced from other properties provided the Optionee Dynamic will adopt and employ reasonable practices an and procedures for weighing, sampling and assaying, in order to determine the amounts of products derived from, or attributable to ore mined and produced from the LeasesClaims. The Optionee will deliver the Optionor a description of Optionee’s commingling plan not less than 30 days before commencing of commingling. The Optionee Dynamic will maintain accurate records of the results of such sampling, weighing and analysis with respect to any ore mined and produced from the LeasesClaims. The Optionor Global or its authorized agents agent will be permitted the right to examine at all reasonable time times such records pertaining to commingling of ore or to the calculation of Net Smelter Returns. 5.4 The Optionee 12.4 Dynamic shall have the right at any time to purchase up to two of the 1% THREE royalty percentage points, and thus reduce the NSR Royalty from 3.0% to 1.0%, by paying to Global the sum of $1,000,000 for US$1,000,000, at any timeeach royalty percentage point so purchased.