Common use of PURCHASE OF CLAIMS Clause in Contracts

PURCHASE OF CLAIMS. 2.01 The Vendor hereby sells to the Purchaser a 70% legal and beneficial interest in and to the Claims in consideration of the sum of $6,000, due and payable on the signing of this Agreement. 2.02 The Purchaser agrees to pay 100% of all ongoing Claim exploration development, production costs and advance royalty payments (collectively the “Production Costs”) until commercial production is first reached from the Claims. 2.03 The Purchaser has the right to receive 100% of any cash flow from commercial production from the Claims until such time as it has recouped its entire Production Costs at which time cash flow will be allocated as 70% to the Purchaser and 30% to the Vendor in accordance with their carried interests hereunder. 2.04 The Claims are subject to the retention by the Vendor of a 1% Gross Overriding Royalty (“XXXX”) as set out on Schedule “B” attached hereto and a 2.0% net smelter royalty return (“NSR”) as set out on Schedule “C” attached hereto. 2.05 The Purchaser shall pay to the Vendor advance royalty payments on an annual basis of $25,000 per year commencing thirty-six (36) months and forty-eight (48) months from the date of the Agreement. The Purchase shall pay to the Vendor advance royalty payments on an annual basis of $50,000 per year commencing sixty (60) months and continuing until commercial production is from the date of this Agreement. 2.06 In the event that the Purchaser does not pay the advance royalty payments to the Vendor for any two (2) consecutive years all of the Purchaser’s rights in and to the Claims shall revert back to the Vendor within 30 days of the date of the second defaulted advance royalty payment.

PURCHASE OF CLAIMS. 2.01 The Vendor hereby sells to the Purchaser a 70% legal and beneficial interest in and to the Claims in consideration of the sum of $6,0006,000.00, due and payable on the signing of this Agreement. 2.02 The Purchaser agrees to pay 100% of all ongoing Claim exploration development, production costs and advance royalty payments (collectively the “Production Costs”) until commercial production is first reached from the Claims. 2.03 The Purchaser has the right to receive 100% of any cash flow from commercial production from the Claims until such time as it has recouped its entire Production Costs at which time cash flow will be allocated as 70% to the Purchaser and 30% to the Vendor in accordance with their carried interests hereunder. 2.04 The Claims are subject to the retention by the Vendor of a 1% Gross Overriding Royalty (“XXXX”) as set out on Schedule “B” attached hereto and a 2.0% net smelter royalty return (“NSR”) as set out on Schedule “C” attached hereto. 2.05 The Purchaser shall pay to the Vendor advance royalty payments on an annual basis of $25,000 per year commencing thirty-six (36) months and forty-eight (48) months from the date of the Agreement. The Purchase shall pay to the Vendor advance royalty payments on an annual basis of $50,000 per year commencing sixty (60) months and continuing until commercial production is from the date of this Agreement. 2.06 In the event that the Purchaser does not pay the advance royalty payments to the Vendor for any two (2) consecutive years all of the Purchaser’s rights in and to the Claims shall revert back to the Vendor within 30 days of the date of the second defaulted advance royalty payment.