EXHIBIT 99.3
TOLL MILLING AGREEMENT
THIS AGREEMENT is made and entered into as of the 11th day of November,
2003, ("EFFECTIVE DATE") by and between Echo Bay Minerals Company, a Delaware
corporation ("ECHO BAY"), and Crown Resources Corporation, a Washington
corporation ("CROWN").
RECITALS
A. Echo Bay is the owner and operator of equipment and facilities at
the site of its Kettle River Operations in Ferry County, Washington,
constituting a mill utilized for the extraction of metallic gold and associated
metallic silver from gold-bearing ores utilizing a carbon-in-xxxxx process (the
"KETTLE RIVER MILL").
B. Crown is the owner of mining properties in Okanogan County,
Washington from which it intends to mine gold- and silver-bearing ores at a mine
referred to as the "BUCKHORN MT. MINE".
C. Crown desires to ship ores from the Buckhorn Mt. Mine to Echo
Bay's Kettle River Mill for processing and recovery of metallic gold and silver
contained therein and Echo Bay is willing to perform such services, all in
accordance with the provisions hereof.
AGREEMENT
In consideration of the mutual benefits and obligations herein provided
and other good and valuable consideration, Echo Bay and Crown agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. In addition to the terms defined elsewhere in this
Agreement, as used herein the words and phrases defined in this Article shall
have the meanings given below. Whenever the singular or plural number, or the
masculine, feminine, or neuter gender is used in this Agreement, it shall
equally, where the context admits, include the others.
"AFFILIATE" means any Person that directly or indirectly Controls, is
Controlled by, or is under common Control with a Party.
"AGREEMENT" means this Toll Milling Agreement, as it may be modified or
amended from time to time, together with all annexes to it.
"BUCKHORN MT. MINE PROPERTIES" means the mining properties held by Crown
and/or one or more Affiliates of Crown in Okanogan County, Washington, described
in Annex 1 attached hereto.
"CONFIDENTIAL INFORMATION" means the terms of this Agreement, all
Technical Data, and any other information concerning any matters affecting or
relating to the Kettle River Mill and the Buckhorn Mt. Mine and the performance
of this Agreement, except to the extent that such information has already been
publicly released as allowed herein by the Party providing such information or
that the recipient of such information can demonstrate was previously publicly
released by a Person who did not do so in violation or contravention of any duty
or agreement.
"CONTROL" means when used with respect to an Entity, an interest which
gives the holder the ability, directly or indirectly through one or more
intermediaries, to direct or cause the direction of the management and policies
of such
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Entity through (i) the legal or beneficial ownership of voting securities or
membership interests; (ii) the right to appoint managers, directors, or
corporate management; (iii) contract; (iv) operating agreement; (v) voting
trust; or (vi) otherwise; and, when used with respect to an individual person,
means the actual or legal ability to control the actions of another, through
family relationship, agency, contract, or otherwise.
"DOLLARS" or "$" means currency of the United States of America unless
otherwise specifically indicated.
"DORE PRODUCTS" means metallic gold and silver recovered from Treatment
Ores after Milling in the form of dore bars that are ready to be shipped to a
refinery for refining.
"ENCUMBRANCE" or "ENCUMBRANCES" means mortgages, deeds of trust, security
interests, pledges, liens, or other encumbrances or burdens of any nature
whether imposed by contract or operation of law and whether registered or
unregistered.
"ENTITY" means any corporation (including any non-profit corporation),
company, limited liability company, limited duration company, general
partnership, limited partnership, limited liability partnership, joint venture,
joint stock association, estate, trust, cooperative foundation, union,
syndicate, league, consortium, coalition, committee, society, firm, or other
enterprise, association, organization, or entity of any nature.
"FED TO PROCESS" means the introduction of Treatment Ores into the
grinding process at the Kettle River Mill.
"FORCE MAJEURE" is defined in Section 9.5.
"GOVERNMENTAL AUTHORITY" means any governmental authority, any local
authority and any political subdivision of any of the foregoing, any
multi-national organization or body, any agency, department, commission, board,
bureau, court or other authority thereof, or any quasi-governmental or private
body exercising, or purporting to exercise, any executive, legislative,
judicial, administrative, police, regulatory or taxing authority or power of any
nature.
"GOVERNMENTAL AUTHORIZATION" means any License, franchise, approval,
certificate, consent, ratification, permission, confirmation, endorsement,
waiver, certification, registration, transfer, qualification or other
authorization issued, granted, given or otherwise made available by or under the
authority of any Governmental Authority or pursuant to any Legal Requirement.
"GRADE" means the concentration by weight of gold in the substance being
tested after it has been dried. Grade shall be expressed in Xxxx ounces per Ton.
"INDEMNIFY" when stated as a covenant of a Party in a provision of this
Agreement in respect of claims, damages, losses, and liabilities means the
undertaking by such Party of an obligation to indemnify, defend, and hold
harmless the other Party and any other parties who are to be indemnified
pursuant to such provision, and its or their Affiliates, and their respective
directors, officers, agents, and representatives (collectively "INDEMNITEES"),
from and against any claims, demands or suits by any Person, losses,
liabilities, damages, obligations, payments, costs and expenses (including,
without limitation, damages or losses incurred by the Indemnitees and the costs
and expenses of defending any and all actions, suits, proceedings, demands and
assessments and of enforcing the indemnification obligation, which shall include
reasonable attorneys' fees and court costs, but excluding any incidental or
consequential damages or loss of profits) resulting from, relating to, arising
out of, or incurred in connection with the covenant, agreement, action, risk, or
other cause with respect to which the indemnification is given, provided,
however, that such indemnification shall not be applicable to such claims,
demands, etc. to the extent that they result from the negligence or willful
misconduct of the indemnified Party.
"LEGAL REQUIREMENT" means any law, statute, ordinance, decree,
requirement, order, treaty, proclamation, convention, rule or regulation (or
official interpretation of any of the foregoing) of any Governmental Authority
and the terms of any Governmental Authorization.
"LICENSES" means all licenses, permits, and other authorizations
necessary for the conduct of Milling.
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"MILLING" means all undertakings, activities, and operations engaged in
by Echo Bay in the performance of treating Treatment Ores at the Kettle River
Mill and processing the same to the stage when Dore Products are recovered and
delivered to a refinery.
"PARTY" or "PARTIES" means Echo Bay and/or Crown, as the case may be.
"PERSON" means any individual, Entity, or Governmental Authority.
"PRIME RATE" means the prime interest rate as quoted and published as
"Prime" in the Wall Street Journal under the heading "Money Rate", as the rate
may change from day to day.
"PRODUCTION ORES" means all ores extracted at the Buckhorn Mt. Mine that
are designated for further treatment in order to recover the gold and/or silver
contained therein.
"TECHNICAL DATA" means engineering studies and working papers,
consultants' reports and working papers, assays, samples, analyses,
environmental studies, correspondence with governmental officials and entities,
metallurgical studies and reports, and all other information and data in printed
or electronic form concerning the condition, operational characteristics and
performance of, or other technical matters related to, the Kettle River Mill and
the performance of Milling hereunder.
"TON" when used with reference to Production Ores and Treatment Ores Fed
to Process means a dry weight of 2,000 pounds avoirdupois.
"TREATMENT ORES" is defined in Section 3.2.
ARTICLE 2
OBLIGATIONS TO DELIVER
AND TO MILL BUCKHORN ORES
2.1 CROWN OBLIGATION TO DELIVER. Crown agrees that it will deliver to
Echo Bay for Milling at the Kettle River Mill pursuant to the provisions hereof
all of the Production Ores produced at the Buckhorn Mt. Mine. Based upon its
current mining plan, Crown estimates that such deliveries of Production Ores
will average approximately 1,500 Tons per day commencing December 31, 2005.
2.2 ECHO BAY OBLIGATION TO TREAT. Echo Bay agrees that it will accept
deliveries of Production Ores made pursuant to Section 2.1 and proceed to
conduct Milling in accordance with the provisions of this Agreement of those
portions of such Production Ores that are determined to be Treatment Ores
pursuant to Section 3.2 and to deliver Dore Products recovered therefrom to a
refinery pursuant to Section 4.4.
ARTICLE 3
DELIVERIES OF PRODUCTION ORES BY CROWN
3.1 DELIVERIES OF PRODUCTION ORES. Crown will deliver Production Ores
to ore stockpile areas at the Kettle River Mill by truck in loads of
approximately 30 tons. The Production Ores will be dumped by Crown at sites
designated by Echo Bay. Crown represents and warrants (i) that it will have at
the time of delivery good right and lawful authority to remove, transport, and
deliver such Production Ores to Echo Bay; (ii) that it will have good title and
lawful possession of such Production Ores; and (iii) that such Production Ores
will be free of any Encumbrances except any royalty obligations or liens related
to the financing of the Buckhorn Mt. Mine, which shall be its duty to discharge.
Crown will advise Echo Bay periodically of its anticipated schedule of
production of Production Ores and corresponding deliveries to Echo Bay.
3.2 STANDARDS. Production Ores delivered by Crown must be 90% passing
a 24-inch screen, have moisture content not to exceed 5%, and be as clean as
reasonably possible, free of wood, vegetation, scrap metal,
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and other debris ("ORE QUALITY STANDARDS") in order to ensure acceptance by Echo
Bay for Milling. Crown shall provide Echo Bay with copies of its own analyses of
the quantities, Grade, and other characteristics that are relevant to the
application of the Ore Quality Standards in respect of delivered Production
Ores. Echo Bay will conduct separate analyses and may at its sole discretion
accept or reject Production Ores with characteristics that are determined by
Echo Bay not to meet the Ore Quality Standards (referred to as "DEFICIENT
ORES"). Echo Bay must give notice to Crown of the existence of any Deficient
Ores and its election not to accept them for Milling within five days after such
Deficient Ores are delivered at the Kettle River Mill. If Echo Bay does not give
such notice within the prescribed time, Echo Bay will be deemed to have accepted
such Deficient Ores for treatment notwithstanding that they fail to meet the Ore
Quality Standards. Any Deficient Ores rejected by Echo Bay will remain
segregated and left for pickup by Crown. Crown shall load and remove such
Deficient Ores within 10 days after receiving the aforementioned notice from
Echo Bay. Production Ores that meet the Ore Quality Standards and Production
Ores that are accepted by Echo Bay for Milling notwithstanding that they are
determined to be Deficient Ores are referred to herein as "TREATMENT ORES".
3.3 WEIGHING AND SAMPLING PROCEDURES. Trucks containing Production
Ores will be weighed in and out on Echo Bay's scale at the Kettle River Mill to
calculate the tonnages delivered to stockpile. Copies of weight tickets and
related calculations will be made available to Crown. All weighing and sampling
of Production Ores will be conducted by Echo Bay in accordance with Echo Bay's
standard operational procedures at the Kettle River Mill, applied consistently
to Production Ores and any other ores that may be commingled with the Production
Ores as provided in Section 4.2.
3.4 LIABILITIES. Echo Bay shall provide Crown with copies of Echo
Bay's applicable safety standards in respect of the entry of Crown's delivery
trucks upon the Kettle River Mill property and dumping of Production Ores and
retrieval of Deficient Ores and Crown shall ensure that such safety standards
are complied with. Crown shall be responsible for, and shall Indemnify Echo Bay
in respect of, any claims, damages, losses, or liabilities arising from Crown's
activities upon the Kettle River Mill property.
3.5 PERMITS AND LICENSES; GENERAL INDEMNIFICATION. Crown shall obtain
all permits and Licenses required under applicable Legal Requirements, and shall
be responsible for compliance with all other applicable Legal Requirements, in
respect of mining, crushing, treating, storing, loading, hauling, and delivering
Production Ores to the point where they are dumped into stockpile at the Kettle
River Mill. Crown shall, upon written request by Echo Bay, supply Echo Bay with
appropriate evidence that it has the permits and Licenses required to be
obtained by Crown. Crown shall Indemnify Echo Bay in respect of any claims,
damages, losses, and liabilities arising from Crown's failure to obtain and/or
comply with such permits and Licenses or with such other Legal Requirements and
in respect of any other claims, damages, losses, and liabilities arising in
respect of the Production Ores prior to delivery by Crown pursuant to Section
3.1.
ARTICLE 4
MILLING OF TREATMENT ORES BY ECHO BAY
4.1 MILLING BY ECHO BAY. Echo Bay shall, subject to Section 9.5 in
respect of Force Majeure, perform Milling of any Treatment Ores delivered by
Crown pursuant to Sections 3.1 and 3.2; provided, however, that Echo Bay shall
be free to operate the Kettle River Mill in accordance with Echo Bay's ordinary
operation schedule (each such day of operation being referred to as an
"OPERATING DAY") and Echo Bay shall not be obligated to perform Milling of
Treatment Ores at a rate in excess of 1,500 Tons per Operating Day.
4.2 COMMINGLING. Echo Bay shall be entitled, if it so desires, to
commingle for purposes of Milling, at any point in the Milling process,
Treatment Ores (including any intermediate products after the treatment thereof)
with other ores (including intermediate products after the treatment thereof)
processed in the Kettle River Mill, so long as the data necessary to determine
the weight, percentage of moisture, grade, and estimated recovery rate for the
minerals to be extracted for both the Treatment Ores (or intermediate products
thereof) and the other ores (or intermediate products thereof) are obtained by
Echo Bay, acting reasonably, before commingling. Echo Bay shall use such data to
determine Crown's interest in the metals ultimately recovered from the
commingled ore or products. Echo Bay may use any sound weighing, sampling,
analysis, and allocation procedures (referred to collectively as "ALLOCATION
PROCEDURES") generally acceptable in the mining and metallurgical industry,
which are reasonably accurate, provided that such Allocation Procedures are
applied consistently to Treatment Ores and other
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ores. In addition, comparable procedures may be used by Echo Bay to apportion
among the commingled ores any penalty charges imposed by the refiner on
commingled ores or concentrates. Echo Bay shall keep and store for three years
from their respective creation such representative samples of Treatment Ores and
complete and accurate records showing weights, mineral contents, estimated
mineral recovery rates, and percentage of moisture of Treatment Ores and other
ores commingled with Treatment Ores in a manner consistent with sound and
generally accepted industry standards.
4.3 GRADES. Subject to Section 4.2, Echo Bay will determine feed
Grades in accordance with Echo Bay's standard practices. At the request of
Crown, a split of each sample will be obtained and provided to Crown. Echo Bay
will perform assays of such samples in accordance with Echo Bay's standard
practices and at the request of Crown will retain an additional split of
pre-assay pulps for Crown.
4.4 REFINING OF DORE PRODUCTS. Subject to Section 4.2, Echo Bay shall
deliver Dore Products recovered after the completion of Milling of Treatment
Ores to a refinery of Echo Bay's choice. Echo Bay shall be responsible for
security of Dore Products until delivery to the refinery. The refinery shall be
responsible for Dore Products thereafter. Each Party's interest in the metals
ultimately recovered after refining as determined by Echo Bay pursuant to
Section 4.2 shall be credited to that Party by the refinery.
4.5 RECOVERY OF GOLD. Echo Bay shall attempt in good faith to maximize
the recovery of gold and silver contained in the Treatment Ores by utilizing
good practices at the Kettle River Mill, subject to Crown's obligation to
satisfy the Ore Quality Standards, but shall not be required to modify the
Kettle River Mill or to implement procedures that differ significantly from
procedures utilized in the Milling of ores from Echo Bay's Kettle River Mine.
Echo Bay will consider in good faith proposals made by Crown for modification of
the Kettle River Mill or implementation of procedures that differ significantly
from procedures utilized in the Milling of ores from Echo Bay's Kettle River
Mine for the purpose of enhancing the recovery of gold from Buckhorn Mt. Mine
Treatment Ores. Any such modifications or implementations of new procedures
would be achieved at Crown's sole cost and would be evaluated with consideration
given to adverse effects upon the efficiency, schedule, and costs of processing
Echo Bay's ores.
4.6 STANDARD OF CARE. Echo Bay shall in good faith perform Milling in
accordance with good metallurgical practices but shall have no liability to
Crown for losses of metals contained in Treatment Ores that are Fed to Process
or for any act or omission in the course of Milling resulting in damage, loss,
cost, or expense to Crown except to the extent caused by Echo Bay's gross
negligence or willful misconduct.
4.7 TITLE TO ORES IN PROCESS. Title to Production Ores delivered by
Crown pursuant to Section 3.1, to Deficient Ores, to Treatment Ores Fed to
Process, to Dore Products, and constituents thereof derived during Milling and
refining shall remain with Crown except for constituents that are discarded as
mill tailings or other forms of waste. Title to constituents discarded as mill
tailings or other forms of waste shall pass to Echo Bay when they are segregated
from other constituent products that are retained for further treatment in the
Milling process.
4.8 ACCESS. Echo Bay shall allow representatives of Crown to enter the
Kettle River Mill, at reasonable times and hours and upon not less than 24
hours' notice, for the purpose of reasonably inspecting the Milling operations
in respect of this Agreement; provided, however, that Crown shall Indemnify Echo
Bay in respect of any claims, damages, losses, or liabilities resulting from
such inspections. In addition, any such representative shall, if requested by
Echo Bay, execute a written waiver releasing Echo Bay from liability for
personal injury or property damage experienced by such representative while on
the premises.
4.9 LICENSES; GENERAL INDEMNIFICATION. Subject to Crown's obligations
to load and remove Deficient Ores in Section 3.2, Echo Bay shall obtain all
Licenses required under applicable Legal Requirements, and shall be responsible
for compliance with all other applicable Legal Requirements, in respect of
storing, handling, and Milling Production Ores after they are delivered by Crown
pursuant to Section 3.1, including the discarding of tailings and other waste
products generated during Milling. Subject to Section 4.6, Echo Bay shall
Indemnify Crown in respect of any claims, damages, losses, and liabilities
arising from Echo Bay's failure to obtain and/or comply with such Licenses or
with such other Legal Requirements and in respect of any other claims, damages,
losses, and liabilities arising from Milling of Production Ores after the
delivery thereof by Crown pursuant to Section 3.1 and prior to delivery of Dore
Products to the refinery pursuant to Section 4.4 as to such Dore Products.
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4.10 INDEPENDENT CONTRACTOR. Echo Bay is and shall be an independent
contractor in the performance of the services to be rendered by it under this
Agreement.
ARTICLE 5
TREATMENT CHARGES
5.1 TOLLING CHARGES. Crown shall pay Echo Bay the sum of $20.00 for
each Ton of Treatment Ore Fed to Process (the "TONNAGE CHARGE"). Subject to the
requirements of Section 4.2, the weight of Treatment Ores Fed to Process shall
be determined by Echo Bay in accordance with Echo Bay's standard operational
procedures at the Kettle River Mill.
5.2 REAGENT COST INCREASES. The Tonnage Charge is based on the
Parties' assumption that certain amounts of reagents will be required for
Milling of the Treatment Ores and that the Treatment Ores Fed to Process will be
within the Ore Quality Standards. If more than three pounds of cyanide (NaCN)
per Ton of Treatment Ore Fed to Process (as determined by laboratory bench xxxxx
testing) is consumed in Milling, then the Tonnage Charge shall be increased by
the Reagent Surcharge for additional quantities of NaCN consumed. If more than
five pounds of lime (Ca(OH)2) per Ton of Treatment Ore Fed to Process (as
determined by laboratory bench xxxxx testing) is consumed in Milling, then the
Tonnage Charge shall be increased by the Reagent Surcharge for additional
quantities of Ca(OH)2 consumed. If significantly more than the normal required
amount of any other reagent ("OTHER REAGENT") is consumed in Milling Treatment
Ores (as demonstrated by data provided by Echo Bay), then the Tonnage Fee shall
be increased by the Reagent Surcharge for additional quantities of such Other
Reagent consumed. For purposes of this Section, the term "REAGENT SURCHARGE"
means the cost per ton of Treatment Ore to Echo Bay of purchasing quantities of
cyanide (NaCN), lime (Ca(OH)2), and Other Reagents in excess of the base amounts
described above, plus 15% of such cost.
5.3 CAPITAL CHARGE. Crown shall make a one-time payment of $5 million
to Echo Bay as a charge for the capital investment in the Kettle River Mill. The
payment shall be due on or before the last day of the calendar month following
the month during which deliveries of Production Ores begin.
5.4 PAYMENT PROCEDURES. Echo Bay shall xxxx Crown for the payments due
under Sections 5.1 and 5.2 monthly. Payment shall be due within 10 days after
receipt.
5.5 DELAYS IN PAYMENT. Interest at the Prime Rate plus 6% shall be
payable to Echo Bay by Crown on any delayed payments (or at the maximum rate
permitted by law if such interest exceeds such maximum rate). Notwithstanding
any other provision herein, if Crown becomes more than 45 days delinquent with
respect to any payment due hereunder, then Echo Bay shall, without waiver of
other remedies, be entitled to suspend Milling of Treatment Ores until such
delinquency has been properly cured.
5.6 RECORDS AND AUDIT. Echo Bay shall maintain full, complete, and
accurate books, records, and accounts with respect to the testing of the
Production Ores and the commingling, processing, and recovery of refined metals
from the Treatment Ores under this Agreement. Not more than one time during each
calendar year, upon ten days' prior notice from Crown to Echo Bay, Echo bay
shall make such books, records, and accounts available for inspection, copying,
and/or for audit by Crown or its authorized representatives at an office in
Washington designated by Echo Bay and during normal business hours. Echo Bay
shall reimburse Crown for the expense of the audit if the audit determines that
the charges incurred by Crown under this Agreement and or deliveries of refined
metals to Crown by Echo Bay under this Agreement during the calendar year
audited were inaccurate by more than three and one-half percent (3.5%). In any
case, the charges and deliveries in question shall be adjusted to reflect the
results of the audit. A full and complete copy of each such audit shall be
provided to Echo Bay upon completion. If any party disagrees with the result of
any such audit, the disagreement shall be resolved by binding arbitration as
provided in Section 9.14.
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ARTICLE 6
TERM AND TERMINATION
6.1 TERM. This Agreement is effective as of the Effective Date and
shall continue, subject to the possibility of earlier termination as provided
herein, until plans for the development of the Buckhorn Mt. Mine end or until
operations at the Buckhorn Mt. Mine permanently cease; provided, however, that
such term shall expire in any event upon the 5th anniversary of the Effective
Date unless extended by the Parties.
6.2 TERMINATION FOR FAILURE TO COMPLETE INTENDED ACQUISITION.
(a) If the intended acquisition by Kinross Gold Corporation of
Crown described in the letter of intent dated October 7, 2003, between Kinross
Gold Corporation, the parent company of Echo Bay, and Crown (the "ACQUISITION")
fails because of a decision by Crown not to complete or to take actions
necessary to complete the Acquisition, or because Crown has breached the
definitive agreements relating to the Acquisition, Echo Bay may, within 30 days
after the Acquisition has been determined to have failed, terminate this
Agreement by notice to Crown.
(b) If the Acquisition fails because of a decision by Kinross
Gold Corporation not to complete or to take actions necessary to complete the
Acquisition, or because Kinross Gold Corporation has breached the definitive
agreements relating to the Acquisition, Crown may, within 30 days after the
Acquisition has been determined to have failed, terminate this Agreement by
notice to Echo Bay.
6.3 TERMINATION FOR OTHER CAUSES. Either Party may terminate this
Agreement upon 30 days notice if any of the following events occur:
(a) Production of Production Ores at the Buckhorn Mt. Mine has
not for any reason commenced by December 31, 2006.
(b) Production of Production Ores, once commenced, ceases for a
continuous period of 12 months.
(c) Crown is unable to deliver Production Ores treatable
economically at the Kettle River Mill because of characteristics that do not
comport with the Ore Quality Standards or because of unforeseen adverse
metallurgical characteristics.
The Parties may also terminate this Agreement at any time upon mutual
written consent.
6.4 PROCEDURES UPON TERMINATION. During the termination notice period
provided for in Section 6.3(c), Crown may at its election continue to make
deliveries of Treatment Ores pursuant to Sections 3.1 and 3.2 and Echo Bay shall
continue to perform Milling of delivered Treatment Ores pursuant to Section 4.1.
Echo Bay shall cease Milling as of the effective date of termination except as
necessary to complete Milling of materials in process. Crown shall remove any
Production Ores remaining in stockpile at the Kettle River Mill within 30 days
after the effective date of termination.
ARTICLE 7
CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS
7.1 GENERAL. Except as provided in Section 7.2, Confidential
Information shall not be disclosed by any Party to any third party or the public
without the prior written consent of the other Party, which consent shall not be
unreasonably withheld.
7.2 EXCEPTIONS. The consent required by Section 7.1 shall not apply to
a disclosure of Confidential Information:
(a) To government agencies as required by applicable Legal
Requirements.
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(b) To employees or to an Affiliate, consultant, contractor or
subcontractor of a Party that has a bona fide need to be informed.
(c) To a governmental agency, stock exchange, or to the public
which the disclosing Party believes in good faith is required by pertinent law
or regulation or the rules of any stock exchange.
(d) To actual or potential lenders, underwriters, or
investors, who have a bona fide need or right to be informed.
(e) To independent accountants or legal counsel engaged by a
Party for the purpose only of enabling such accountants or legal counsel to give
appropriate advice to the Party in respect of matters arising under this
Agreement.
In any case to which any of Sections 7.2(a), (c), or (d) is applicable,
the disclosing Party shall give notice to the other Party concurrently with the
making of such disclosure. As to any disclosure pursuant to Section 7.2 (b),
(d), or (e), only such Confidential Information as such third party shall have a
legitimate business need to know shall be disclosed and in the case of Section
7.2(d) such third party shall first agree in writing to protect the Confidential
Information from further disclosure to the same extent as the Parties are
obligated under this Article 7. Each Party shall be responsible for ensuring
that any Confidential Information disclosed pursuant to Sections 7.2(b) or (e)
is kept confidential by the recipients.
7. 3 PUBLIC ANNOUNCEMENTS. Each Party shall, in advance of making, or
any of its Affiliates making, a public announcement to a stock exchange or
otherwise concerning Milling operations, advise the other Party of the text of
the proposed report and provide the other Party with the opportunity to make
comment upon the form and content thereof before the same is issued; provided,
however, that a Party or an Affiliate may make a public disclosure it believes
in good faith is required by applicable law or any listing or trading agreement
concerning the publicly traded securities of its direct or indirect parent (in
which case the disclosing Party will use its reasonable best efforts to advise
the other Party prior to the disclosure). If the other Party does not respond
within forty-eight hours (excluding weekends and holidays) or such lesser time
specified as the maximum by the issuing Party or Affiliate, the announcement or
report may be issued. The final text of same, and timing, manner, and mode of
release, shall be the sole responsibility of the issuing Party who shall
Indemnify the other Party harmless in respect of any claims, damages, losses,
and liabilities arising therefrom.
7.4 DURATION OF CONFIDENTIALITY. The provisions of this Article 7
shall apply during the term of this Agreement and for one year following
termination of this Agreement pursuant to Article 6.
ARTICLE 8
CAPACITY OF THE PARTIES
8.1 CAPACITY OF PARTIES. As of the Effective Date and at all times
while this Agreement remains in effect, Echo Bay warrants and represents to
Crown and Crown warrants and represents to Echo Bay that:
(a) It is duly organized and in good standing in its place of
incorporation;
(b) It has the capacity to enter into and perform this
Agreement and all transactions contemplated herein and all corporate and other
actions required to authorize it to enter into and perform this Agreement have
been properly taken;
(c) It will not breach any other agreement or arrangement by
entering into or performing this Agreement;
(d) It is not subject to any governmental order, judgment,
decree, debarment, sanction or law that would preclude the execution or
implementation of this Agreement;
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(e) This Agreement has been duly executed and delivered by it
and is valid and binding upon it in accordance with its terms; provided,
however, that no representation is made as to (i) the remedy of specific
performance or other equitable remedies for the enforcement of this Agreement,
or (ii) limitations on remedies established by applicable bankruptcy,
insolvency, moratorium, and other similar laws affecting generally the rights of
creditors and secured parties;
(f) To the best of its knowledge after reasonable inquiry, the
execution, delivery, and performance of this Agreement will not violate any
provision of any indenture, agreement, or other instrument to which it is a
party or by which its properties are bound, except for such matters as would not
have a material adverse effect on this Agreement taken as a whole;
(g) To the best of its knowledge after reasonable inquiry, it
has obtained all consents, approvals, or authorizations required by a
Governmental Authority or other Person in connection with its execution and
performance of this Agreement; and
(h) It has incurred no obligation or liability, contingent or
otherwise, for brokers' or finders' fees or the like that will in any way become
an obligation of, or result in a valid claim against, the other Party with
respect to the matters provided for in this Agreement.
8.2 INDEMNIFICATION. Each of the Parties shall Indemnify the other in
respect of any claims, damages, losses, and liabilities that are a result of any
breach by such Party of its representations and warranties under Section 8.1 and
in the case of Crown for any breach of its representations and warranties under
Section 3.1.
ARTICLE 9
GENERAL PROVISIONS
9.1 NOTICES. All notices, payments and other required communications
("NOTICES") to the Parties shall be in writing, and shall be addressed
respectively as follows:
"Echo Bay" Echo Bay Minerals Company
Kettle River Operations
000 Xxxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Manager
"Crown" Crown Resources Corporation
Buckhorn Mt. Project
000 Xxxxxxx Xxx.
Xxxxxxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Manager
All Notices shall be given (i) by personal delivery to the Party, or (ii) by
telecopier, or (iii) by certified mail return receipt requested. All Notices
shall be effective and shall be deemed delivered (i) if by personal delivery, on
the date of delivery if delivered during normal business hours, and if not
delivered during normal business hours, on the next business day following
delivery, (ii) if by telecopier, on the next business day following receipt, and
(iii) if solely by mail, on the next business day after actual receipt. A Party
may change its address by Notice to the other Party.
9.2 ASSIGNMENT. No Party may assign its interest in this Agreement,
except in accordance with Sections 9.2(a) and (b), without the prior written
consent of the other Party in its sole discretion. Subject to such limitation
and to the provisions of Sections 9.2(a) and (b), this Agreement shall be
binding upon and inure to the benefit of the respective successors and permitted
assigns of the Parties.
9
(a) This Agreement shall be binding upon the successors and
assigns of Crown (and/or Affiliates of Crown) as the owner of the Buckhorn Mt.
Mine and the Buckhorn Mt. Mine Properties. Crown agrees that it will cause any
assignee or other transferee of the Buckhorn Mt. Mine and/or the Buckhorn Mt.
Mine Properties or any portion thereof to agree in writing to be bound by the
terms of this Agreement and to enter into a covenant with Echo Bay in form and
substance acceptable to Echo Bay and its attorneys evidencing and confirming
such agreement.
(b) This Agreement shall be binding upon the successors and
assigns of Echo Bay as the owner of the Kettle River Mill. Echo Bay agrees that
it will cause any assignee or other transferee of the Kettle River Mill to agree
in writing to be bound by the terms of this Agreement and to enter into a
covenant with Crown in form and substance acceptable to Crown and its attorneys
evidencing and confirming such agreement.
9.3 WAIVER. The failure of a Party to insist upon the strict
performance of any provision of this Agreement, or to exercise any right, power
or remedy upon a breach hereof, shall not constitute a waiver of any provision
of this Agreement or limit the Party's right thereafter to enforce any provision
or exercise any right.
9.4 MODIFICATION. No modification of this Agreement shall be valid
unless made in writing and duly executed by the Parties.
9.5 FORCE MAJEURE. Except for the obligation to make payments when due
hereunder, including all payments to be made by Crown pursuant to Article 5, the
obligations of a Party shall be suspended to the extent and for the period that
performance is prevented by any cause other than lack of funds, whether
foreseeable or unforeseeable, beyond its reasonable control, including, without
limitation, labor disputes (however arising and whether or not employee demands
are reasonable or within the power of the Party to grant); acts of God; laws,
regulations, orders, proclamations, instructions or requests of any government
or governmental entity; judgments or orders of any court; inability to obtain,
inability to obtain on reasonably acceptable terms, or unreasonable delays in
obtaining, any public or private license, permit or other authorization;
curtailment or suspension of activities to remedy or avoid an actual or alleged,
present or prospective violation of federal, state or local environmental
standards; acts of war or conditions arising out of or attributable to war,
whether declared or undeclared; riot, civil strife, insurrection or rebellion;
fire, explosion, earthquake, storm, flood, sink holes, drought or other adverse
weather condition; delay or failure by suppliers or transporters of materials,
parts, supplies, services or equipment or by contractors' or subcontractors'
shortage of, or inability to obtain, labor, transportation, materials,
machinery, equipment, supplies, utilities or services; accidents; breakdown of
equipment, machinery or facilities; or any other cause, whether similar or
dissimilar to the foregoing ("FORCE MAJEURE"). The time for performance of all
obligations hereunder (except for the obligation to make payments when due)
shall be extended for a period equivalent to any period(s) of Force Majeure, as
described above. The affected Party shall promptly give notice to the other
Party of the suspension of performance, stating therein the nature of the
suspension, the reasons therefor, and the expected duration thereof. The
affected Party shall resume performance as soon as reasonably possible,
provided, however, that the affected Party shall not be required to settle any
strikes, lockouts, or other labor difficulties in a manner that is not
acceptable to the affected Party.
9.6 DEFAULT. The Party defaulting under this Agreement shall be
referred to as the "DEFAULTING PARTY," and the other Party shall be referred to
as the "NON-DEFAULTING PARTY." The Non-Defaulting Party shall have the right to
give the Defaulting Party a written Notice of Default, which shall describe the
default in reasonable detail and state the date by which the default must be
cured, which date shall be at least 30 days after receipt of the Notice of
Default, except in the case of a failure to advance funds, in which case the
date shall be 10 days after receipt of the Notice of Default. Failure of the
Non-Defaulting Party to give a Notice of Default shall not release the
Defaulting Party from any of its duties under this Agreement. If within the
applicable notice period the Defaulting Party cures the default, or if the
failure is one (other than the failure to make payments) that cannot in good
faith be corrected within such period and the Defaulting Party begins to correct
the default within the applicable notice period and continues corrective efforts
with reasonable diligence until a cure is effected, the Notice of Default shall
be inoperative. If, within the specified period, the Defaulting Party does not
cure the default or begin to cure the default as provided above, the
Non-Defaulting Party at the expiration of the applicable period may pursue its
remedies; provided, however, that if the Defaulting Party in good faith contests
the alleged default, the Defaulting Party may give notice of the contest to the
Non-Defaulting Party within the
10
applicable notice period. If such notice is given, the Parties shall proceed to
arbitration pursuant to Section 9.14 to determine whether the Defaulting Party
is in fact in default. If the arbitrator(s) finds that the default alleged in
the Non-Defaulting Party's notice occurred and that the Defaulting Party
contested the alleged default in good faith, the Defaulting Party shall have 30
days after the date of such finding to cure the default in accordance with the
provisions of this Section 9.6.
9.7 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall be
governed by and interpreted in accordance with the laws of the State of Nevada,
except for its rules pertaining to conflicts of laws. The Parties hereto hereby
irrevocably attorn and submit to the non-exclusive jurisdiction of the courts of
Nevada, including the Federal District Court for the District of Nevada,
respecting all matters relating to this Agreement concerning the rights and
obligations of the Parties hereunder.
9.8 RULE AGAINST PERPETUITIES. If any provision of this Agreement
would violate the Rule Against Perpetuities or some analogous statutory
provision or any other statutory or common law rule imposing time limits, then
such provision shall continue only until 21 years, less one day, after the death
of all the individuals who execute this Agreement on behalf of the Parties or
shall otherwise be reformed to the extent necessary to render this Agreement
enforceable.
9.9 FURTHER ASSURANCES. Each of the Parties agrees to take from time
to time such actions and execute such additional instruments as may be
reasonably necessary or convenient to implement and carry out the intent and
purpose of this Agreement.
9.10 SURVIVAL OF TERMS AND CONDITIONS. Provisions of this Agreement
which by their context continue beyond termination, shall survive the
termination of this Agreement to the full extent necessary for their enforcement
and the protection of the Party in whose favor they run.
9.11 ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the Parties and supersedes all prior agreements and understandings, whether
written or verbal, between the Parties relating to the subject matter hereof.
9.12 INTERPRETATION. The headings in this Agreement are for convenience
only; they form no part of this Agreement and shall not affect its
interpretation. References to Articles and Sections herein shall be to Articles
and Sections of this Agreement unless otherwise specified. In the event of any
conflict between this Agreement and any Annex attached hereto, the terms of this
Agreement shall be controlling. Wherever the term "including" is used, it shall
be deemed to mean "including without limitation," and wherever the phrase "which
shall include" is used, it shall mean "which shall include, without limitation."
Time shall be of the essence of this Agreement. By entering into this Agreement,
no Party has created any obligation for the benefit of any third party, promised
any performance to any third party, or otherwise created or vested in any third
party a right to enforce all or any portion of this Agreement except in respect
of indemnifications specifically extending to third parties.
9.13 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law. If any provision of this Agreement shall be or becomes
prohibited or invalid in whole or in part for any reason whatsoever, that
provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remaining portion of that provision or the
remaining provisions of this Agreement and the Parties shall enter into such
agreements and arrangements as may be necessary to give effect to their
intentions hereunder.
9.14 ARBITRATION. All disputes, controversies, or claims arising out of
or relating to this Agreement shall be submitted to binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and such arbitration shall be governed by the provisions of the
Nevada Uniform Arbitration Act (Nev. Rev. Stat. Sec. 38.015 ET SEQ.) or any
successor Nevada law, provided, however, that if it is determined by counsel for
the Parties, or by other competent authority, that the arbitrator lacks or would
lack authority to award the relief sought, or to be sought, in such arbitration,
then an appropriate action may be brought in a court with jurisdiction.
Otherwise this arbitration agreement shall be specifically enforceable. The
following provisions shall apply to such arbitration:
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i) If Echo Bay or Crown with respect to any dispute comprises more
than one party, such parties collectively as to each of Echo Bay
and Crown shall be deemed to be a single party with respect to the
selection of arbitrators.
ii) There shall be one arbitrator if the Parties mutually agree on the
selection of such arbitrator within 30 days following receipt of
the written request from the Party requesting arbitration. If the
Parties do not reach agreement on a single arbitrator within such
period, there shall be three arbitrators, two of whom shall be
designated individually by each Party and the two arbitrators so
designated shall appoint the third arbitrator who shall preside
over the arbitration tribunal. All arbitrators shall be neutral.
iii) If a Party fails to appoint an arbitrator within 15 days following
the expiration of the 30-day period provided above for selection
of a single arbitrator, or if each Party has designated an
arbitrator and the two arbitrators fail to designate a third
arbitrator within another 15 days after they both have been
designated, then the arbitrator to be selected shall be determined
upon petition by a Party to the Nevada state court of general
jurisdiction in Washoe County, Nevada.
iv) The arbitrators shall be instructed that time is of the essence in
proceeding with their determination of any dispute, claim,
question or difference, and in any event the arbitration award
must be rendered within 60 days of the completion of selection of
the arbitrators.
v) The arbitration shall take place in Reno, Nevada at a time and
place set by the arbitrators.
vi) The arbitration award shall be given in writing and shall be final
and binding on the Parties, not subject to any appeal, and shall
deal with the question of costs of arbitration and all matters
related thereto.
vii) Judgment upon the award rendered may be entered in any court
having jurisdiction, or, application may be made to such court for
a judicial recognition of the award or an order of enforcement
thereof, as the case may be.
viii) Pending settlement of any dispute, the Parties shall abide by
their obligations under this Agreement without prejudice to a
final adjustment in accordance with an award rendered in an
arbitration settling such dispute.
9.15 COUNTERPARTS. This Agreement may be executed in counterparts, all
of which taken together shall constitute a single and complete contract.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the Effective Date.
"Echo Bay" "Crown"
Echo Bay Minerals Company, Crown Resources Corporation,
a Delaware corporation a Washington corporation
By: /s/ Xxxx Xxxxx By: /s/ Xxxxxxxxxxx Herald
----------------------- ----------------------
Title: Director Title: President and CEO
Date: November 11, 2003 Date: November 11, 2003
12
ANNEX 1
to
Toll Milling Agreement
between
Crown Resources Corporation
and Echo Bay Minerals Company
DESCRIPTION OF BUCKHORN MT. MINE PROPERTIES
Following are mining claims situated in Okanogan County, Washington that
constitute the Buckhorn Mt. Mine Properties:
PATENTED CLAIMS
---------------
A&R
Umatilla
Panhandle
UNPATENTED CLAIMS
-----------------
Name Blm File Number
---- ---------------
MAG 30 ORMC 134663
MAG 31 ORMC 134664
MAG 32 ORMC 134665
MAG 33 ORMC 134666
MAG 34 ORMC 134667
MAG 39 ORMC 134672
MAG 40 ORMC 134673
MAG 41 ORMC 134674
MAG 42 ORMC 134675
MAG 53 ORMC 134686
13
