EXHIBIT 10.02
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
MONTANA PGM VENTURE
JOINT VENTURE AGREEMENT
Dated February 1, 2000
BETWEEN
IDAHO CONSOLIDATED METALS CORPORATION
AND
CHROME CORPORATION OF AMERICA
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS.................................................... 1
ARTICLE 2. REPRESENTATIONS AND WARRANTIES; TITLE TO ASSETS................ 5
2.1. Capacity of Participants .................................... 5
2.2. Representations and Warranties Relating to Property.......... 5
2.3. Remedies for Breach of Representations and Warranties
of Title to the Properties.................................. 6
2.3.1. Loss of Title ....................................... 6
2.3.2. Less than 100% Interest.............................. 7
2.3.3. Third Party Claims................................... 7
2.4. Disclosures.................................................. 7
2.5. Record Title................................................. 8
ARTICLE 3. NAME, PURPOSES AND TERM........................................ 8
3.1. General...................................................... 8
3.2. Name ........................................................ 8
3.3. Purposes..................................................... 8
3.4. Limitation .................................................. 8
3.5. Effective Date and Term...................................... 8
ARTICLE 4. RELATIONSHIP OF THE PARTICIPANTS............................... 9
4.1. No Partnership............................................... 9
4.2. U.S. and State Tax Elections and Allocations................. 9
4.3. Other Business Opportunities................................. 9
4.4. Waiver of Right to Partition ................................ 10
4.5. Transfer or Termination of Rights to Properties.............. 10
4.6. Implied Covenants ........................................... 10
ARTICLE 5. CONTRIBUTIONS BY PARTICIPANTS.................................. 10
5.1. Participants' Initial Contributions.......................... 10
5.2. Obligations Prior to Earn-In ................................ 10
5.2.1. Annual and Cumulative Exploration
Expenditures Commitment.............................. 11
5.2.2. Overhead Charges During Earn-In...................... 11
5.2.3. Carryforward of Excess Cumulative
Exploration Expenditures............................ 11
5.2.4. Maintenance of Properties During Earn-In............. 11
5.3. Payments By ICMC to CCA...................................... 11
5.3.1. Payment at Closing................................... 11
5.3.2. Annual Payment of Stock.............................. 11
5.3.3. Crescent Creek Net Smelter Return.................... 12
5.4. Termination of ICMC's Obligation to Make Initial
Contribution................................................ 12
5.5. Additional Cash Contributions................................ 12
5.6. Earn-In...................................................... 12
5.7. Reports...................................................... 12
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
ARTICLE 6. INTERESTS OF PARTICIPANTS:
DEFAULTS AND REMEDIES...................................................... 13
6.1. Participating Interests...................................... 13
6.2. Elections at Time of Earn-In................................. 13
6.3. Deemed Expenditures.......................................... 13
6.4 Changes in Participating Interests........................... 13
6.5 Voluntary Reduction in Participation......................... 14
6.6. Default in Making Contributions ............................. 15
6.7. Conversion of Interest....................................... 15
6.8. Continuing Liabilities Upon Adjustments of
Participating Interests..................................... 15
ARTICLE 7. MANAGEMENT COMMITTEE........................................... 16
7.1. Organization and Composition................................. 16
7.2. Decisions.................................................... 16
7.3. Meetings..................................................... 16
7.4. Action Without Meeting....................................... 17
7.5. Matters Requiring Approval................................... 17
ARTICLE 8. MANAGER........................................................ 17
8.1. Appointment.................................................. 17
8.2. Powers and Duties of Manager................................. 17
8.3. Standard of Care............................................. 21
8.4. Resignation; Deemed Offer to Resign.......................... 21
8.5. Payments to Manager.......................................... 22
8.6. Transactions With Affiliates................................. 22
8.7. Activities During Deadlock................................... 22
ARTICLE 9. PROGRAMS AND BUDGETS........................................... 22
9.1. Initial Program and Budget .................................. 22
9.2. Operations Pursuant to Programs and Budgets.................. 22
9.3. Presentation of Programs and Budgets......................... 22
9.4. Review and Approval of Proposed Programs and Budgets......... 22
9.5. Election to Participate...................................... 23
9.6. Deadlock on Proposed Programs and Budgets.................... 23
9.7. Budget Overruns; Program Changes............................. 23
9.8. Emergency or Unexpected Expenditures......................... 23
ARTICLE 10. ACCOUNTS AND SETTLEMENTS...................................... 24
10.1. Matters of Accounts and Settlements.......................... 24
ARTICLE 11. DISPOSITION OF PRODUCTION..................................... 24
11.1. Taking in Kind............................................... 24
11.2. Failure of Participant to Take in Kind....................... 24
ARTICLE 12. WITHDRAWAL AND TERMINATION.................................... 24
12.1. Termination by Expiration or Agreement....................... 24
12.2. Withdrawal................................................... 25
12.3. Continuing Obligations....................................... 25
12.4. Disposition of Assets on Termination......................... 25
12.5. Right to Data after Termination.............................. 25
12.6. Continuing Authority......................................... 26
12.7. Non-Compete Covenants........................................ 26
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
12.8. Mutual Withdrawal............................................ 26
12.9. Rights to Data After Termination............................. 26
ARTICLE 13. SURRENDER OF PROPERTIES....................................... 27
13.1. Surrender of Properties...................................... 27
13.2. Reacquisition................................................ 27
ARTICLE 14. TRANSFER OF INTEREST.......................................... 27
14.1. General...................................................... 27
14.2. Limitations on Free Transferability.......................... 27
14.3. Right of First Refusal....................................... 28
14.4. Exceptions to Right of First Refusal ........................ 29
ARTICLE 15. CONFIDENTIALITY AND RELEASES.................................. 29
15.1. General...................................................... 29
15.2. Exceptions................................................... 29
15.3. Duration of Confidentiality.................................. 30
ARTICLE 16. AREA OF INTEREST.............................................. 30
16.1. Acquisitions in Area of Interest............................. 30
ARTICLE 17. GENERAL PROVISIONS............................................ 31
17.1. Notices...................................................... 31
17.2. Waiver....................................................... 33
17.3. Modification................................................. 33
17.4. Force Majeure................................................ 33
17.5. Economic Force Majeure....................................... 33
17.6. Governing Law ............................................... 33
17.7. Rule Against Perpetuities.................................... 34
17.8. Further Assurances........................................... 34
17.9. Survival of Terms and Conditions............................. 34
17.10. Entire Agreement; Successors and Assigns..................... 34
17.11. Memorandum................................................... 34
17.12. Funds........................................................ 34
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
LIST OF EXHIBITS
EXHIBIT A PROPERTIES
Exhibit A-1 Nickel/Copper Lease
Exhibit A-2 Chrome Lease
Exhibit A-3 Crescent Creek Claims
EXHIBIT B ACCOUNTING PROCEDURES
EXHIBIT C NET SMELTER RETURN ROYALTY
EXHIBIT D INSURANCE
EXHIBIT E AREA OF INTEREST
EXHIBIT F NICKEL/COPPER LEASE
EXHIBIT G CHROME LEASE
EXHIBIT H MINING DEED AND ASSIGNMENT
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
JOINT VENTURE AGREEMENT
THIS AGREEMENT, made effective as of February 1, 2000, is between IDAHO
CONSOLIDATED METALS CORPORATION ("ICMC") with an address of X.X. Xxx 0000,
Xxxxxxxx, Xxxxx 00000 and CHROME CORPORATION OF AMERICA ("CCA") with aaddress of
0000 X. Xxxxxx Xx., Xxxxxxxxx, Xxxxxxxx 00000-0000.
RECITALS
A. ICMC and CCA entered into a Memorandum of Understanding dated January
18, 2000 agreeing to form a Joint Venture to explore and develop property leased
by or owned by CCA.
B. ICMC wishes to participate with CCA in exploration, evaluation ,
development and mining of minerals within the property and CCA is willing to
grant such right to ICMC.
NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, ICMC and CCA agree as follows:
ARTICLE 1. DEFINITIONS
"Accounting Procedure" means the procedures set forth in Exhibit B.
"Affiliate" means any person, partnership, joint venture, corporation or other
form of enterprise which directly or indirectly controls, is controlled by, or
is under common control with, a Participant. For purposes of the preceding
sentence, "control" means possession, directly or indirectly, of the power to
direct or cause direction of management and policies through ownership of voting
securities, contract, voting trust or otherwise.
"Agreement" means this Joint Venture Agreement, including all amendments and
modifications thereof, and all schedules and exhibits, which are incorporated
herein by this reference.
"Area of Interest" means the Stillwater Complex of Montana excluding claims
filed by ICMC prior to the date of this Agreement and the Platinum Fox Lease
Agreement entered into by ICMC on July 16, 1999 and as shown in Exhibit E.
"Assets" means the Properties, Products and all other real and personal
property, tangible and intangible, held for the benefit of the Participants
hereunder.
"Budget" means a detailed estimate of all costs to be incurred by the
Participants with respect to a Program and a schedule of cash advances to be
made by the Participants.
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
"Commencement of Commercial Production" means the date upon which the production
and processing facilities developed under this Agreement achieve an ore
production and processing rate for a continuous thirty-day period equal to at
least seventy percent (70%) of the design rate established in a Feasibility
Study.
"Development" means all preparation for the removal and recovery of Products,
including the construction or installation of a mill or any other improvements
to be used for the mining, handling, milling, processing or other beneficiation
of Products, and all Exploration work conducted subsequent to a decision to
commence Development as contemplated by a Feasibility Study.
"Earn-In" means the date upon which ICMC earns its interest in the Venture
pursuant to Section 5.6.
"Exploration" means all activities directed toward ascertaining the existence,
location, quantity, quality or commercial value of deposits of Products.
"Exploration Expenditures" means the cost of evaluation of the Properties,
defined as further exploring and developing the Properties, including drilling,
excavating and searching by recognized prospecting techniques, sampling,
assaying, testing and evaluating materials removed from the Properties, mapping,
plotting, surveying, constructing and maintaining camps, roads, works and
structures necessary to carry out such evaluation, sampling or testing, all
studies including but not limited to a Feasibility Study required to develop a
mine and all work that may be required in preparing a mine for operating, the
cost or payments to maintain the Properties, including costs to locate and/or
relocate the unpatented mining claims, costs to maintain the underlying
agreements through which the Property is acquired and lease payments reimbursed
by ICMC to CCA for maintaining the Xxxxx Leases, Property acquisition costs,
taxes and/or fees to maintain Property and filings together with an allowance
for overhead and administrative expenses as described in Section 5.3.1. These
expenditures include both exploration costs as defined in Section 617 of the
Internal Revenue Service Code and development expenditures as defined in Section
616 of the Internal Revenue Service Code.
"Feasibility Study" means a detailed study compiled by Manager or an independent
third party conducted to determine commercial feasibility and viability of
placing a prospective orebody or deposit into production and may include, but
not be limited to:
(i) such geophysical, geochemical, geological, aerial or other survey as
may be necessary to provide a reasonable estimate of the quality and
extent of the deposit;
(ii) such technical or assay reports as may be necessary to evaluate any
proposed method of extraction and processing;
(iii) the area required for optimum development of the orebody or deposit;
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
(iv) a mine construction program setting forth the descriptions of the
work, permits, equipment, facilities, supplies and mines required to bring
the prospective orebody or deposits of Products into Commercial
Production, and the estimated costs thereof or a schedule of expenditures
by year of the costs necessary to bring the project into production;
(v) details of a proposed annual program for initial development of the
deposit;
(vi) a plan for such reclamation of the Properties as is required by law
and the estimated costs hereof;
(vii) conclusions and recommendations regarding the economic feasibility
and timing for bringing the prospective orebody or deposits of Products
into Commercial Production, taking into account items (i) through (vi)
above;
(viii) such other information as the Management Committee may deem
appropriate to allow banking or other financial institutions familiar with
the mining business to make a decision to loan funds sufficient to
construct the proposed mine with security based solely on the reserves and
mine described in a Feasibility Study.
"Initial Contribution" means that contribution each Participant has made or
agrees to make pursuant to Section 5.1.
"Joint Account" means the account maintained in accordance with the Accounting
Procedure showing the charges and credits accruing to the Participants.
"Management Committee" means the committee established under Article 7.
"Manager" means ICMC during the Earn-In phase or the person or entity appointed
under Article 8 to manage Operations, or any successor Manager.
"Mining" means the mining, extracting, producing, handling, milling or other
processing of Products.
"Xxxxx Leases" are the Nickel/Copper Lease as attached in Exhibit F and the
Chrome Lease as attached in Exhibit G.
"Operations" means the activities carried out under this Agreement after
Earn-In.
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
"Participant" and "Participants" means the persons or entities that have a
Participating Interest.
"Participating Interest" means the percentage interest representing the
operating ownership interest of a Participant in Assets, and all other rights
and obligations arising under this Agreement, as such interest may from time to
time be adjusted hereunder. Participating Interests shall be calculated to three
decimal places and rounded to two (e.g., 1.519% rounded to 1.52%). Decimals of
.005 or more shall be rounded up to .01, decimals of less than .005 shall be
rounded down. The initial Participating Interests of the Participants are set
forth in Section 6.1.
"Prime Rate" means the prime interest rate quoted as "Prime" by the Wall Street
Journal as said rate may change from day to day (which quoted rate may not be
the lowest rate averaged on a month-to-month basis at which a financing
institution loans funds).
"Production Decision" means a decision by the Management Committee to commence
Development and put the Properties into production.
"Products" means all ores, minerals, and mineral resources produced from the
Properties prior to treatment. It also includes all concentrates, precipitates
and products produced from the Properties under this Agreement.
"Program" means a description in reasonable detail of the activities of the
Venture which are to be conducted by the Manager during a period.
"Properties" means those interests in properties described in Exhibits X-0, X-0
xxx X-0 and all other interests in real property acquired after February 1, 2000
and held subject to this Agreement. Exhibits X-0, X-0 xxx X-0 may be
collectively referred to as Exhibit A.
"Simple Majority" means a decision by the Management Committee by greater than
50% of the votes entitled to be cast.
"Transfer" means sell, grant, assign, encumber, pledge or otherwise commit or
dispose of.
"Venture" means the business arrangement of the Participants under this
Agreement.
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
ARTICLE 2. REPRESENTATIONS AND WARRANTIES; TITLE TO ASSETS
2.1. Capacity of Participants Each of the parties hereto represents and warrants
as follows:
2.1.1. That it is a corporation duly incorporated and in good standing in
its state or province of incorporation and that it is qualified to do
business and is in good standing in those jurisdictions where necessary in
order to carry out the purposes of this Agreement;
2.1.2. That it has the capacity to enter into and perform this Agreement
and all transactions contemplated herein and that all corporate and other
actions required to authorize it to enter into and perform this Agreement
have been properly taken;
2.1.3. That it will not breach any other agreement or arrangement by
entering into or performing this Agreement; and
2.1.4. That this Agreement has been duly executed and delivered by it and
is valid and binding upon it in accordance with its terms.
2.2. Representations and Warranties Relating to Property CCA makes the following
representations and warranties effective the date hereof:
2.2.1. CCA has the full and exclusive right and power to act on behalf of
CCA, and on behalf of any other interested person or entities, to enter
into this Agreement and to grant the rights granted by CCA hereunder.
2.2.2. The Xxxxx Leases are valid leases covering 107 unpatented mineral
claims and 32 patented claims. CCA has the right to extend the Xxxxx
Leases as described in Exhibit F and Exhibit G. CCA has notified the
lessors of this Agreement.
2.2.3. To the best of its knowledge and belief with respect to unpatented
mining claims set forth in Exhibit A and that are included within the
Properties, subject to the paramount title of the United States and except
as disclosed in writing to ICMC:
(i) the unpatented mining claims were properly laid out and monumented;
(ii) all required location and validation work was properly performed;
(iii) location notices and certificates were properly recorded and filed
with appropriate governmental agencies;
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
(iv) the claims are free and clear of defects, liens and encumbrances
arising by, through or under CCA, except those of record, state and
federal environmental and development laws, rules and regulations,
or disclosed in writing to ICMC as listed in Exhibits F and G and in
this Agreement and defects, liens, and any such encumbrances that do
not materially affect ICMC's rights under this Agreement;
(v) CCA has not received notice from anyone asserting conflicting
claims; and
(vi) the unpatented mining claims are in good standing and compliance
with all federal and state regulations in force as of the effective
date of this Agreement.
Nothing in this Section 2.2.2, however, shall be deemed to be a
representation or a warranty that any of the mining claims contains a
discovery of minerals.
2.2.4. CCA knows of no violation of any applicable federal, state,
regional, or county law or regulation relating to zoning, land use,
environmental protection, or otherwise with respect to the Properties or
activities relating thereto; and,
2.2.5. With respect to the Properties, CCA knows of no pending or
threatened actions, suits, claims or proceedings.
2.2.6 CCA has granted ICMC access to all information concerning title to
the Properties in CCA's possession or control, including but not limited
to, true and correct copies of all leases, other contracts and abstracts
relating to the Properties of which CCA has knowledge.
The representations and warranties set forth above shall survive the execution
and delivery of any documents of Transfer provided under this Agreement.
2.3. Remedies for Breach of Representations and Warranties of Title to the
Properties 2.3.1.
Loss of Title Any failure or loss of title to the Properties, and all
costs of defending title, shall be charged to the Joint Account, except
that all costs and losses arising out of or resulting from breach of the
representations and warranties of CCA shall be charged to CCA and all such
costs and losses arising out of gross negligence by ICMC or the Manager
shall be charged to ICMC or the Manager as the case may be. ICMC shall
have the right, but not the obligation, to undertake to cure such defects
or to defend or to initiate litigation to defend such defects.
2.3.2. Less than 100% Interest In the event it is determined that CCA
controls less than the full undivided interest therein, CCA's interest
hereunder shall bear the same proportion to 100% as its total actual
interest bears to the full undivided whole.
2.3.3. Third Party Claims
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
(a) If CCA fails to satisfy and discharge any mortgage, lien, tax levy
or encumbrance (an "Encumbrance") chargeable solely or in part to CCA on
the claims listed on Exhibit A or the underlying agreements, or suffers or
permits any Encumbrance to be imposed upon such, ICMC at its option may,
but shall not be obligated to, pay for and discharge any Encumbrance and
set off such payment by withholding and retaining from any payments due
CCA any amounts so paid by ICMC, without prejudice to any right of ICMC to
recover from CCA the amount of such payment, in any manner or by any
remedy whatsoever, and ICMC shall have all the rights and remedies against
CCA which the mortgagor, lienor or creditor had immediately prior to the
time of such payment. Upon the request of ICMC, CCA shall promptly make,
execute, acknowledge and deliver to ICMC any and all instruments (in a
form and substance satisfactory to ICMC) that ICMC in its sole judgment
may deem necessary or desirable to fully effectuate the provisions of this
section 2.3.
(b) If any person or entity not a party hereto asserts to have a claim
of ownership in the claims listed on Exhibit A or the underlying
agreements, or a claim to a share in the production from the claims listed
on Exhibit A (an "Adverse Claim"), ICMC at its sole discretion, after
written notice to CCA, may suspend its obligation to make payments as
provided herein, and in lieu thereof, may deposit in an interest-bearing
account payments equivalent to payments which may otherwise become due
CCA. Such deposit or deposits shall remain in such interest-bearing
account until the claim or controversy is resolved or settled by final
court decision, by arbitration, negotiation or otherwise. When ICMC is
required or elects to make any payments to such persons or entities not a
party hereto as a result of, or in settlement of, any such Adverse Claim,
either by way of contract, settlement, compromise, final court judgment,
or otherwise, ICMC may recover from, or credit against, any payments
thereafter becoming due CCA hereunder, the amount of such payments of all
other costs and expenses (including reasonable attorneys fees) paid or
incurred by ICMC as a result of any such Adverse Claim.
2.4. Disclosures. Each of the Participants represents and warrants that it is
unaware of any material facts or circumstances which have not been disclosed in
this Agreement, which would be disclosed to the other Participant in order to
prevent the representations in this Article 2 from being materially misleading.
2.5. Record Title. Title to the Assets shall be held by the Venture after ICMC
has earned its interest.
ARTICLE 3. NAME, PURPOSES AND TERM
3.1. General . CCA and ICMC hereby enter into this Agreement for the purposes
hereinafter stated, and they agree that all of their rights and all of the
Operations on or related to with the Properties shall be subject to and governed
by this Agreement.
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
3.2. Name . The name of this Venture shall be the Montana PGM Venture. The
Manager shall accomplish any registration required by applicable assumed or
fictitious name statutes and similar statutes.
3.3. Purposes . This Agreement is entered into for the following purposes and
for no others, and shall serve as the exclusive means by which the Participants,
or either of them, accomplish such purposes:
(i) to conduct Exploration within the Properties,
(ii) to evaluate the possible Development of the Properties,
(iii) to engage in Development and Mining Operations on the Properties,
if feasible.
(iv) to engage in marketing Products, but only to the extent permitted
by Article 11, and
(v) to perform any other activity necessary, appropriate, or incidental
to any of the foregoing.
3.4. Limitation . Unless the Participants otherwise agree in writing, the
Operations shall be limited to the purposes described in Section 3.3, and
nothing in this Agreement shall be construed to enlarge such purposes.
3.5. Effective Date and Term. The effective date of this Agreement shall be the
date first recited above. The term of this Agreement shall be for 20 years from
the effective date and for so long thereafter as Products are produced from the
Properties, unless the Agreement is earlier terminated as provided herein.
ARTICLE 4. RELATIONSHIP OF THE PARTICIPANTS
4.1. No Partnership. Nothing contained in this Agreement shall be deemed to
constitute either Participant the partner of the other, nor, except as otherwise
herein expressly provided, to constitute either Participant the agent or legal
representative of the other, nor to create any fiduciary relationship between
them. It is not the intention of the Participants to create, nor shall this
Agreement be construed to create, any mining, commercial or other partnership.
Neither Participant shall have any authority to act for or to assume any
obligation or responsibility on behalf of the other Participant, except as
otherwise expressly provided herein. The rights, duties, obligations and
liabilities of the Participants shall be several and not joint or collective.
Each Participant shall be responsible only for its obligations as herein set out
and shall be liable only for its share of the costs and expenses as provided
herein, it being the express purpose and intention of the Participants that
their ownership of Assets and the rights acquired hereunder shall be as tenants
in common. Each Participant, its directors, officers, employees, agents and
attorneys shall be indemnified from and against any and all losses, claims,
damages and liabilities arising out of any act or any assumption of liability by
the indemnifying Participant,
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
or any of its directors, officers, employees, agents and attorneys done or
undertaken, or apparently done or undertaken, on behalf of the other
Participant, except pursuant to the authority expressly granted herein or as
otherwise agreed in writing between the Participants.
4.2. U.S. and State Tax Elections and Allocations . Without changing the effect
of Section 4.1, the Participants agree that their relationship shall constitute
a tax partnership within the meaning of Section 761(a) of the United States
Internal Revenue Code of 1986, as amended. The parties hereto agree to execute
or join in such instruments as are necessary to make such election effective,
and hereby authorize and direct Manager to take such action as is necessary to
effectuate such purpose, including filing of the partnership tax return required
by Treasury Regulation ss.1.761-2(b)(2). Each party shall be entitled to claim
all tax benefits, write-offs, and deductions with respect to all and any costs
which it has incurred.
The Participants also agree that, to the extent permissible under applicable
law, their relationship shall be treated for state income tax purposes in the
same manner as it is for federal income tax purposes.
The Manager shall be the Tax Matters Partner and shall prepare and file, after
approval of the Management Committee, any tax returns or other tax forms
required.
4.3. Other Business Opportunities . Except as expressly provided in this
Agreement, each Participant shall have the right independently to engage in and
receive full benefits from business activities, whether or not competitive with
the Operations, without consulting the other. The doctrines of "corporate
opportunity" or "business opportunity" shall not be applied to any other
activity, venture, or operation of either Participant. Unless otherwise agreed
in writing, no Participant shall have any obligation to mill, beneficiate or
otherwise treat any Products or any other Participant's share of Products in any
facility owned or controlled by such Participant, other than a facility
established to treat the Products of the Venture.
4.4. Waiver of Right to Partition . The Participants hereby waive and release
all rights of partition, or of sale in lieu thereof, or other division of
Assets, including any such right provided by statute.
4.5. Transfer or Termination of Rights to Properties, Except as otherwise
provided in this Agreement, neither Participant shall transfer all or any part
of its interest in the Assets or this Agreement or otherwise permit or cause
such interest to terminate.
4.6. Implied Covenants . There are no implied covenants contained in this
Agreement other than those of good faith and fair dealing.
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
ARTICLE 5. CONTRIBUTIONS BY PARTICIPANTS
5.1. Participants' Initial Contributions. CCA, as its Initial Contribution,
hereby contributes the Properties described in Exhibit A to the purposes of this
Agreement. ICMC, as its Initial Contribution, shall contribute the Exploration
Expenditures and payment as hereinafter set forth.
5.2. Obligations Prior to Earn-In . Prior to earning its interest in the
Venture, and subject to the termination provisions contained herein, ICMC shall
be required, but not obligated to make the following Exploration Expenditures on
or for the benefit of the Properties to extend this Agreement into the next
period.
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
5.2.1. Annual and Cumulative Exploration Expenditures Commitment:
ICMC shall expend, as a minimum, the following annual and cumulative
Exploration Expenditures:
Year Annual Cumulative
Expenditure Expenditure
One $200,000 $200,000
Two $400,000 $600,000
Three $500,000 $1,100,000
Four $500,000 $1,600,000
Five $500,000 $2,100,000
Total $2,100,000
Year 1 for purposes of calculating annual expenditures shall end on March
31, 2001 and each subsequent year will end on March 31.
5.2.2. Overhead Charges During Earn-In. Five percent (5%) of all
Exploration Expenditures, except property payments, taxes and/or fees to
maintain the Properties, to cover ICMC' overhead and administrative costs
shall be charged by ICMC and shall qualify as Exploration Expenditures
This overhead charge is the same as overhead chargeable in accordance with
the Accounting Procedure.
5.2.3. Carryforward of Excess Cumulative Exploration Expenditures. All
Exploration Expenditures shall be cumulative and any Exploration
Expenditures in excess of the minimum required in any period shall be
credited and applied toward any Exploration Expenditures required in any
subsequent period.
5.2.4. Maintenance of Properties During Earn-In. During the Earn-in period
ICMC shall be responsible for maintaining the underlying agreements in
good standing and for maintaining the unpatented lode claims which
comprise the Properties and may relocate any of the unpatented claims
which ICMC believes may be defective. Additionally ICMC agrees to
reimburse CCA for the lease payments incurred by CCA pursuant to the Xxxxx
Leases.
5.3. Payments By ICMC to CCA:
5.3.1. Payment at Closing. Upon execution of this Agreement, ICMC shall
pay Five Thousand Dollars ($5,000) to CCA.
5.3.2. Annual Payment of Stock Upon signature of this Agreement and on
each of the following four anniversary dates, ICMC shall issue one hundred
thousand (100,000) shares of ICMC's unrestricted, registered common stock
to CCA to keep this Agreement in good standing. Said stock will be
delivered by January 31 of each year commencing on January 31, 2001 or
upon termination by ICMC, whichever occurs sooner.
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
5.3.3. Crescent Creek Net Smelter Return A three and one half percent (3.5
% ) Net Smelter Return in those unpatented claims in the Crescent Creek
area known as the Ram claims and wholly owned by CCA as listed in Exhibit
A-3.
5.4. Termination of ICMC's Obligation to Make Initial Contribution.
ICMC may terminate this Agreement at any time during the Earn-In period for any
reason or no reason by providing CCA sixty (60) days written notice of such
termination. Until ICMC has earned its interest in the Venture, ICMC shall have
complete discretion in conducting exploration activities, maintaining the
Properties and shall conduct operations according to its own plans. ICMC shall
hold CCA harmless from any liabilities resulting from ICMC's activities on the
Properties during the Earn-In period.
Upon ICMC's termination under the provisions of this Section 5.4, ICMC shall
have no further right, title or interest in the Venture. ICMC's withdrawal shall
be effective upon such failure, but such withdrawal shall not relieve ICMC of
its obligation to fund and satisfy any liabilities to third persons incurred or
payments due to CCA prior to ICMC's withdrawal.
5.5. Additional Cash Contributions . At such time as ICMC has earned its
fifty-five percent (55%) interest in the Venture, pursuant to Section 5.2, the
Participants, subject to any election permitted by Sections 6.1, 6.2 and 6.3,
shall be obligated to contribute funds to adopted Programs and Budgets in
proportion to their respective Participating Interest.
5.6. Earn-In . ICMC shall earn a fifty-five percent (55%) Participating Interest
in the Venture upon completion of the Exploration Expenditures and payment set
forth under Section 5.2. If ICMC expends the $2,100,000 commitment in Section
5.2 prior to the end of year five, it will be deemed to have earned its
Participating Interest at that time. Except as provided for in Section 6.2,
subsequent to ICMC earning a fifty-five percent (55%) interest in the Venture,
all expenditures for the benefit of the Properties shall be contributed by the
Parties in accordance to their Participating Interest. Immediately upon ICMC
satisfying its Earn-In requirements under Section 5.2, CCA shall execute and
deliver to ICMC such documents as are listed in Exhibit H that are necessary to
transfer CCA's interest in and to the Properties to the Venture. ICMC shall
issue and deliver to CCA the balance of the 500,000 shares of ICMC common stock
not previously issued pursuant to Section 5.3.2 at the time ICMC has earned its
Participating Interest.
5.7. Reports . ICMC shall, during the Earn-In period, provide CCA with copies of
periodic reports describing its activities on the Properties and shall conduct a
semi-annual review with CCA to discuss the progress ICMC has made during the
preceding period as well as the plans and programs being contemplated for the
next period.
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
ARTICLE 6. INTERESTS OF PARTICIPANTS:
DEFAULTS AND REMEDIES
6.1. Participating Interests . ICMC shall have no Participating Interest unless
and until it has completed the Exploration Expenditures set forth in Section 5.2
during the Earn-In period. The Participants shall have the following
Participating Interests upon ICMC's completion of the obligations set forth in
Section 5.2:
ICMC - 55%
CCA - 45%
6.2. Elections at Time of Earn-In. At such time as ICMC completes the
obligations set forth in Section 5.2 and has earned its fifty five percent (55%)
Participating Interest in the Venture, CCA and ICMC shall have a period of sixty
(60) days to either:
(i) elect to continue to participate in the Venture and contribute to each
Program and Budget for their entire respective Participating Interest, or
(ii) to elect to withdraw from the Venture and convert to a Net Smelter
Return as set out in Exhibit C.
In no event shall the cumulative Net Smelter Return payable to the withdrawing
party, whether one or more, exceed an aggregate of five percent (5%).
6.3. Deemed Expenditures. At Earn-In ICMC and CCA shall, irrespective of their
actual expenditures on or with respect to the Properties, be deemed to have
incurred expenditures as follows:
ICMC $2,100,000
CCA $1,750,000
6.4 Changes in Participating Interests. A Participant's Participating Interest
shall be changed as follows:
(i) As provided in Sections 6.2 or 6.7; or
(ii) Upon an election by a Participant pursuant to Section 6.5 to
contribute less to an adopted Program and Budget than the
percentage reflected by its Participating Interest; or
(iii) In the event of default by a Participant in making its
agreed-upon
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
contribution to an adopted Program and Budget; or
(iv) Transfer by a Participant of less than all its
Participating Interest in accordance with Article XIV; or
(v) Acquisition of less than all of the Participating Interest
of the other Participant, however arising.
6.5 Voluntary Reduction in Participation. Except with respect to a Participant's
obligation to make its Initial Contribution, as to which no election is
permitted, a Participant may elect, as provided in Section 9.5, to limit its
contributions to an adopted Program and Budget as follows:
(i) To some lesser amount than its respective Participating
Interest; or
(ii) Not at all.
If a Participant elects to contribute to an adopted Program and Budget some
lesser amount than its respective Participating Interest, or not at all, the
Participating Interest of that Participant shall be recalculated at the time of
election by dividing:
(i) the sum of
(a) the value of the Participant's Initial Contribution as per
Section 6.3,
(b) the total of all of the Participant's contributions under
Section 5.3, and
(c) the amount, if any, the Participant elects to contribute to the
adopted
Program and Budget;
by
(ii) the sum of (a), (b) and (c) above for all Participants;
and then multiplying the result by one hundred.
The Participating Interest of the other Participant shall thereupon become the
difference between 100% and the recalculated Participating Interest.
6.6. Default in Making Contributions .If a Participant defaults in making a
contribution or cash call required by an approved Program and Budget, the
non-defaulting Participant may advance the defaulted contribution on behalf of
the defaulting Participant and treat the same,
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
together with any accrued interest, as a demand loan bearing interest from the
date of the advance at the Prime Rate plus two percent (2%) compounded
quarterly. The failure to repay said loan upon demand shall be a default. Each
Participant hereby grants to the other a lien upon its interest in the Venture
and the Properties and a security interest in its rights under this Agreement
and in its Participating Interest in other Assets, and the proceeds therefrom,
to secure any loan made hereunder, including interest thereon, reasonable
attorneys' fees and all other reasonable costs and expenses incurred in
recovering the loan with interest and in enforcing such lien or security
interest, or both. A non-defaulting Participant may elect the applicable remedy
under this Section 6.6, or, to the extent a Participant has a lien or security
interest under applicable law, it shall be entitled to its rights and remedies
at law and in equity. All such remedies shall be cumulative. The election of one
or more remedies shall not waive the election of any other remedies. Each
Participant hereby irrevocably appoints the other its attorney-in- fact to
execute, file and record all instruments necessary to perfect or effectuate the
provisions hereof.
6.7. Conversion of Interest . If at any time the Participating Interest of a
Participant is reduced to ten percent (10%) or less by an affirmative election
not to contribute all or some portion of its share pursuant to a Program and
Budget as provided in Article 9, the diluted Participant shall be deemed to have
withdrawn from the Venture and this Agreement shall terminate; provided,
however, the diluting Participant shall have the right to receive an amount
equal to one hundred and fifteen percent (115%) of the diluting Participant's
actual or deemed expenditures contributed hereunder, whichever is greater only
from a five percent (5%) of Net Smelter Return Royalty, as set out in Exhibit C.
Upon receipt of such amount the diluting Participant shall thereafter have no
further right, title, or interest under this Agreement or in the Assets.
6.8. Continuing Liabilities Upon Adjustments of Participating Interests . Any
reduction of a Participant's Participating Interest under this Section 6 shall
not relieve such Participant of its share of any liability, whether it accrued
before or after such reduction, arising out of Operations conducted prior to
such reduction. For purposes of this Article 6, such Participant's share of such
liability shall be equal to its Participating Interest at the time such
liability was incurred. The increased Participating Interest accruing to a
Participant as a result of the reduction of the other Participant's
Participating Interest shall be free of royalties, liens or other encumbrances
arising by, through or under such other Participant, other than those existing
at the time the Properties were acquired or those to which both Participants
have given their written consent. An adjustment to a Participating Interest need
not be evidenced during the term of this Agreement by the execution and
recording of appropriate instruments, but each Participant's Participating
Interest shall be shown in the books of the Manager. However, either
Participant, at any time upon the request of the other Participant, shall
execute and acknowledge instruments necessary to evidence such adjustment in
form sufficient for recording in the jurisdiction where the Properties are
located.
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
ARTICLE 7. MANAGEMENT COMMITTEE
7.1. Organization and Composition . Prior to completion of ICMC's' Earn-In and
the election by CCA and ICMC to participate in the Venture as provided in
Section 6.2, the Participants shall establish a Management Committee to
determine overall policies, objectives, procedures, methods and actions under
this Agreement. The Management Committee shall consist of one member appointed
by ICMC and one member appointed by CCA. Each Participant may appoint one or
more alternates to act in the absence of a regular member. Any alternate so
acting shall be deemed a member. Appointments shall be made or changed by notice
in writing to the other Participant.
7.2. Decisions. Prior to completion of ICMC's Earn-In, each Participant, acting
through its appointed member(s), shall have an equal vote. In the event of a
deadlock, the Manager shall hold the deciding vote. After completion of ICMC's
Earn-In, each Participant shall have a vote equal to its Participating Interest
in the Venture. Decisions of the Management Committee shall be decided by Simple
Majority of the Participating Interests.
7.3. Meetings. The Management Committee shall hold regular meetings at least
annually at mutually agreed places. The Manager shall give thirty (30) days'
written notice to the Participants of such regular meetings. Additionally,
either Participant may call a special meeting upon thirty (30) days' written
notice to the Manager and the other Participant. In case of emergency,
reasonable notice of a special meeting shall suffice. There shall be a quorum if
at least one member representing each Participant is present. The Management
Committee shall not transact any business at a meeting unless a quorum is
present at the commencement of the meeting. If a quorum is not present at the
commencement of the meeting or within one-half hour after the time fixed for the
commencement of the meeting, the meeting shall be adjourned to the same time and
day of the next week at the same place. If a quorum is not present at the
commencement of the adjourned meeting, one representative shall be deemed to
constitute a quorum. Each notice of a meeting shall include an itemized agenda
and detailed back-up information prepared by the Manager in the case of a
regular meeting, or by the Participant calling the meeting in the case of a
special meeting, but any matters may be considered with the consent of all
Participants. The Manager shall prepare minutes of all meetings and shall
distribute copies of such minutes to the Participants within thirty (30) days
after the meeting. The minutes, when signed by all Participants, shall be the
official record of the decisions made by the Management Committee and shall be
binding on the Manager and the Participants. If personnel employed in Operations
are required to attend a Management Committee meeting, reasonable costs incurred
in connection with such attendance shall be a Venture cost. All other costs
shall be paid by the Participants individually.
7.4. Action Without Meeting. In lieu of meetings, the Management Committee may
hold telephone conferences, so long as all decisions are immediately confirmed
in writing by the Participants.
7.5. Matters Requiring Approval . Except as otherwise delegated to the Manager
in Section
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
8.2, the Management Committee shall have exclusive authority to determine all
management matters related to this Agreement.
ARTICLE 8. MANAGER
8.1. Appointment Following signature of this Agreement, ICMC shall be the
initial Manager.
8.2. Powers and Duties of Manager
Subject to the terms and provisions of this Agreement, the Manager shall have
the following powers and duties which shall be discharged in accordance with
adopted Programs and Budgets:
8.2.1. The Manager shall manage, direct and control Operations.
8.2.2. The Manager shall implement the decisions of the Management
Committee, shall make all expenditures necessary to carry out adopted
Programs and Budgets, and shall promptly advise the Management Committee
if it lacks sufficient funds to carry out its responsibilities under this
Agreement.
8.2.3. The Manager shall:
(i) purchase or otherwise acquire all material, supplies, equipment,
water, utility and transportation services required for Operations,
such purchases and acquisitions to be made on the best terms
available, taking into account all of the circumstances;
(ii) obtain such customary warranties and guarantees as are
available in connection with such purchases and acquisitions; and
(iii) keep the Assets free and clear of all liens and encumbrances,
except for those existing at the time of, or created concurrent
with, the acquisition of such Assets, or mechanic's or materialmen's
liens which shall be released or discharged in a diligent manner, or
liens and encumbrances specifically approved by the Management
Committee.
8.2.4. The Manager shall conduct such title examinations and cure such
title defects as may be advisable in the reasonable judgment of the
Manager.
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
8.2.5. The Manager shall:
(i) make or arrange for all payments required by leases, licenses,
permits, contracts and other agreements related to the Assets;
(ii) pay all taxes, assessments and like charges on Operations and
Assets except taxes determined or measured by a Participant's sales
revenue or net income. If authorized by the Management Committee,
the Manager shall have the right to contest in the courts or
otherwise, the validity or amount of any taxes, assessments or
charges if the Manager deems them to be unlawful, unjust, unequal or
excessive, or to undertake such other steps or proceedings as the
Manager may deem reasonably necessary to secure a cancellation,
reduction, readjustment or equalization thereof before the Manager
shall be required to pay them, but in no event shall the Manager
permit or allow title to the Assets to be lost as the result of the
nonpayment of any taxes, assessments or like charges; and
(iii) shall do all other acts reasonably necessary to maintain the
Assets.
8.2.6. The Manager shall:
(i) apply for all necessary permits, licenses and approvals;
(ii) comply with applicable federal, provincial, municipal and
local laws and regulations;
(iii) notify promptly the Management Committee of any allegations
of substantial violation thereof; and
(iv) prepare and file all reports or notices required for
Operations.
The Manager shall not be in breach of this provision if a violation has
occurred in spite of the Manager's good faith efforts to comply, and the
Manager has timely cured or disposed of such violation through
performance, or payment of fines and penalties.
8.2.7. The Manager shall prosecute and defend, but shall not initiate
without consent of the Management Committee, all litigation or
administrative proceedings greater than $50,000 arising out of Operations.
The non-managing Participant shall have the right to participate, at its
own expense, in such litigation or administrative proceedings. The non-
managing Participant's approval shall be required in advance of any
settlement involving payments, commitments or obligations, if the
non-managing Participant's share is in
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
excess of Twenty-Five Thousand Dollars ($25,000) in cash or value.
8.2.8. The Manager shall provide insurance for the benefit of the
Participants as provided in Exhibit D.
8.2.9. The Manager may dispose of Assets, whether by release, abandonment,
surrender or Transfer in the ordinary course of business, except that
Properties may be released, abandoned or surrendered only as provided in
Article 13. However, without prior authorization from the Management
Committee, the Manager shall not:
(i) dispose of Assets in any one transaction having a value in
excess of $250,000:
(ii) enter into any sales contracts or commitments for Product,
except as permitted in Section 11.2;
(iii) begin a liquidation of the Venture; or
(iv) dispose of all or a substantial part of the Assets necessary
to achieve the purposes of the Venture.
8.2.10 The Manager shall have the right to carry out its responsibilities
hereunder through agents, affiliates or independent contractors.
8.2.11. The Manager shall be obligated to perform or cause to be performed
during the term of this Agreement all obligations required by law in order
to maintain the Properties which obligations shall be included in Programs
and Budgets.
8.2.12. The Manager shall keep and maintain all required accounting and
financial records pursuant to the Accounting Procedure and in accordance
with customary cost accounting practices in the mining industry.
8.2.13. The Manager shall keep the Management Committee advised of all
Operations by submitting in writing to the Management Committee:
(i) monthly progress reports which include statements of
expenditures and comparisons of such expenditures to the adopted
Budget;
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
(ii) periodic summaries of data acquired;
(iii) copies of reports concerning Operations;
(iv) a detailed final report within forty-five (45) days after
completion of each Program and Budget, which shall include
comparisons between actual and budgeted expenditures and comparisons
between the objectives and results of Programs; and
(v) such other reports as the Management Committee may reasonably
request.
At all reasonable times the Manager shall provide the Management Committee
or the representative of any Participant, upon the request of any member
of the Management Committee, access to, and the right to inspect and copy
all maps, drill logs, core tests, reports, surveys, assays, analyses,
production reports, operations, technical, accounting and financial
records, and other information acquired in Operations. In addition, the
Manager shall allow the non-managing Participant, at the latter's sole
risk and expense, and subject to reasonable safety regulations, to inspect
the Assets and Operations at all reasonable times, so long as the
inspecting Participant does not unreasonably interfere with Operations.
8.2.14. The Manager shall undertake all other activities reasonably
necessary to fulfill the foregoing.
The Manager shall not be in default of any duty under this Section 8.2 if its
failure to perform results from the failure of the non-managing Participant to
perform acts or to contribute amounts required of it by this Agreement.
8.3. Standard of Care The Manager shall conduct all Operations in a good,
workmanlike and efficient manner, in accordance with all applicable laws, sound
mining and other applicable industry standards and practices, and in accordance
with the terms and provisions of leases, licenses, permits, contracts and other
agreements pertaining to Assets. The Manager shall not be liable to the
non-managing Participant for any act or omission resulting in damage or loss
except to the extent caused by or attributable to the Manager's willful
misconduct or gross negligence.
8.4. Resignation; Deemed Offer to Resign . The Manager may resign upon thirty
(30) days prior notice to the other Participant. If any of the following shall
occur, the Manager shall be deemed to have offered to resign, which offer shall
be accepted by the other Participant, if at all, within ninety (90) days
following such deemed offer:
8.4.1. The Participating Interest of the Manager becomes less than fifty
percent (50%);
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
or
8.4.2. The Manager fails to perform a material obligation imposed upon it
under this Agreement and such failure continues for a period of thirty
(30) days after written notice from the other Participant demanding
performance; or
8.4.3. The Manager fails to pay or contest in good faith its bills within
thirty (30) days after receiving written notice that they are due; or
8.4.4. A receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official for a substantial part of its assets is appointed and
such appointment is neither made ineffective nor discharged within sixty
(60) days after receiving written notice of the making thereof, or such
appointment is consented to, requested by, or acquiesced in by the
Manager; or
8.4.5. The Manager commences a voluntary case under any applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or
consents to the entry of an order for relief in an involuntary case under
any such law or to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or other similar
official of any substantial part of its assets; or makes a general
assignment for the benefit of creditors; or fails generally to pay its or
Venture debts as such debts become due; or takes corporate or other action
in furtherance of any of the foregoing; or
8.4.6. Entry is made against the Manager of a judgment, decree or order
for relief affecting a substantial part of its assets by a court of
competent jurisdiction in an involuntary case commenced under any
applicable bankruptcy, insolvency or other similar law of any jurisdiction
now or hereafter in effect.
8.5. Payments to Manager . The Manager shall be compensated for its services and
reimbursed for its costs hereunder in accordance with the Accounting Procedure.
8.6. Transactions With Affiliates . If the Manager engages Affiliates to provide
services hereunder, it shall do so on terms no more favorable than would be the
case with unrelated persons in arm's-length transactions.
8.7. Activities During Deadlock . If the Management Committee for any reason
fails to adopt a Program and Budget, subject to the contrary direction of the
Management Committee and to the receipt of necessary funds, the Manager shall
continue Operations at levels comparable with the last adopted Program and
Budget. For purposes of determining the required contributions of the
Participants and their respective Participating Interests, the last adopted
Program and Budget shall be deemed extended.
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
ARTICLE 9. PROGRAMS AND BUDGETS
9.1. Initial Program and Budget . The initial Program and Budget will be
provided by the Management Committee within ninety (90) days of ICMC's Earn-In.
9.2. Operations Pursuant to Programs and Budgets . Except as otherwise provided
in Section 9.8 and Article 16, Operations shall be conducted, expenses shall be
incurred, and Assets shall be acquired only pursuant to approved Programs and
Budgets.
9.3. Presentation of Programs and Budgets . Proposed Programs and Budgets shall
be prepared by the Manager for a period of up to one year. Each adopted Program
and Budget, regardless of length, shall be reviewed at least once a year at the
annual meeting of the Management Committee. During the period encompassed by any
Program and Budget, and at least two months prior to its expiration, a proposed
Program and Budget for the succeeding period shall be prepared by the Manager
and submitted to the Management Committee.
9.4. Review and Approval of Proposed Programs and Budgets . Within thirty (30)
days after submission of a proposed Program and Budget to the Management
Committee, the Management Committee shall:
(i) Approve the proposed Program and Budget; or
(ii) Propose modifications of the proposed Program and Budget; or
(iii) Reject the proposed Program and Budget.
If the Management Committee makes the elections pursuant to Section 9.4.(ii) or
9.4.(iii), then the Manager will review the modifications and/or any
recommendations of the Management Committee and will resubmit a Program and
Budget within thirty (30) days.
9.5. Election to Participate By written notice to the Management Committee
within thirty (30) days after approving a Program and Budget except as provided
for in Section 6.1, a Participant may elect to contribute to such Program and
Budget in an amount equal to its Participating Interest or a lesser amount as
provided for in Section 6.5. If a Participant fails to so notify the Management
Committee, the Participant shall be deemed to have elected not to contribute to
such Program and Budget and the provisions of Section 6.4 shall apply. If a
Participant elects not to participate in the Program and Budget and the other
Participant elects to contribute to the Program and Budget the provisions of
Section 6.5 shall apply.
9.6. Deadlock on Proposed Programs and Budgets . If the Participants, acting
through the Management Committee, fail to approve a Program and Budget by the
beginning of the period
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
to which the proposed Program and Budget applies, the provisions of Section 8.7
shall apply.
9.7. Budget Overruns; Program Changes . The Manager shall immediately notify the
Management Committee of any material departure from an adopted Program and
Budget. If the Manager exceeds an adopted Budget by more than ten percent (10%),
then such excess over ten percent (10%) shall be for the sole account of the
Manager, not creditable to the calculation of Participating Interests, unless
such excess amount is directly caused by an emergency or unexpected expenditure
made pursuant to Section 9.8 or is otherwise authorized by the approval of the
Management Committee. Budget overruns of ten percent (10%) or less shall be
borne by the Participants in proportion to their respective Participating
Interests as of the time the overrun occurs.
9.8. Emergency or Unexpected Expenditures . In case of emergency, the Manager
may take any reasonable action it deems necessary to protect life, limb or
property, to protect the Assets or to comply with law or government regulation.
The Manager may also make reasonable expenditures for unexpected events which
are beyond its reasonable control and which do not result from a breach by it of
its standard of care. The Manager shall promptly notify the Participants of the
emergency or unexpected expenditures, and the Manager shall be reimbursed for
all resulting costs by the Participants in proportion to their respective
Participating Interests at the time the emergency or unexpected expenditures are
incurred.
ARTICLE 10. ACCOUNTS AND SETTLEMENTS
10.1. Matters of Accounts and Settlements These items are governed by the
provisions in Exhibit "B" (Accounting Procedures) attached hereto.
ARTICLE 11. DISPOSITION OF PRODUCTION
11.1. Taking in Kind . Each Participant shall take in kind or separately dispose
of its share of all Products in accordance with its Participating Interest. Any
extra expenditure incurred in the taking in kind or separate disposition by any
Participant of its proportionate share of Products shall be borne by such
Participant. Nothing in this Agreement shall be construed as providing, directly
or indirectly, for any joint or cooperative marketing or selling of Products or
permitting the processing of Products of any parties other than the Participants
at any processing facilities constructed by the Participants pursuant to this
Agreement. The Manager shall give the Participants notice at least ten (10) days
in advance of the delivery date upon which their respective shares of Products
will be available.
11.2. Failure of Participant to Take in Kind . If a Participant fails to take in
kind, the Manager shall have the right, but not the obligation, for a period of
time consistent with the
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
minimum needs of the industry, but not to exceed one year, to purchase the
Participant's share for its own account or to sell such share as agent for the
Participant at not less than the prevailing market price in the area. Subject to
the terms of any such contracts of sale then outstanding, during any period that
the Manager is purchasing or selling a Participant's share of production, the
Participant may elect by notice to the Manager to take in kind. The Manager
shall be entitled to deduct from proceeds of any sale by it for the account of a
Participant reasonable expenses incurred in such a sale.
ARTICLE 12. WITHDRAWAL AND TERMINATION
12.1. Termination by Expiration or Agreement . This Agreement shall terminate as
expressly provided in this Agreement, unless earlier terminated by written
agreement.
12.2. Withdrawal . A Participant may elect to withdraw as a Participant from
this Agreement by giving notice to the other Participant of the effective date
of withdrawal, which shall be the later of the end of the then current Program
and Budget or at least 45 days after the date of the notice. Upon such
withdrawal, this Agreement shall terminate, and the withdrawing Participant
shall be deemed to have transferred to the remaining Participant, without cost
and free and clear of royalties, liens or other encumbrances arising by, through
or under such withdrawing Participant, except those exceptions to title
described in Exhibits F and G and those to which both Participants have given
their written consent after the date of this Agreement, all of its Participating
Interest in the Assets and in this Agreement. Any withdrawal under this Section
12.2 shall not relieve the withdrawing Participant of its share of liabilities
to third persons (whether such accrues before or after such withdrawal) arising
out of Operations conducted prior to such withdrawal. For purposes of this
Section 12.2, the withdrawing Participant's share of such liabilities shall be
equal to its Participating Interest at the time such liability was incurred.
12.3. Continuing Obligations . On termination of this Agreement under Section
12.1 or 12.2, the Participants shall remain liable for continuing obligations
hereunder until final settlement of all accounts and for any liability, whether
it accrues before or after termination, if it arises out of Operations during
the term of the Agreement.
12.4. Disposition of Assets on Termination . Promptly after termination under
Section 12.1, the Manager shall take all action necessary to wind up the
activities of the Venture, and all costs and expenses incurred in connection
with the termination of the Venture shall be expenses chargeable to the Venture.
Any Participant that has a negative Joint Account balance when the Venture is
terminated for any reason shall contribute to the Assets of the Venture an
amount sufficient to raise such balance to zero. The Assets shall first be paid,
applied, or distributed in satisfaction of all liabilities of the Venture to
third parties and then to satisfy any debts, obligations, or liabilities owed to
the Participants. Before distributing any funds or Assets to Participants, the
Manager shall have the right to segregate amounts which, in the Manager's
reasonable judgment, are necessary to discharge continuing obligations or to
purchase for the account of Participants, bonds or other securities for the
performance of such obligations. The foregoing shall not be construed to include
the repayment of any Participant's contributions or
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
Joint Account balance. Thereafter, any remaining cash and all other Assets,
including property shall be distributed (in undivided interests unless otherwise
agreed) to the Participants, first in the ratio and to the extent of their
respective Joint Accounts and then in proportion to their respective
Participating Interests, subject to any dilution, reduction, or termination of
such Participating Interests as may have occurred pursuant to the terms of this
Agreement. No Participant shall receive a distribution of any interest in
Products or proceeds from the sale thereof if such Participant's Participating
Interest therein has been terminated pursuant to this Agreement.
12.5. Right to Data after Termination . After termination of this Agreement
pursuant to Section 12.1, each Participant shall be entitled to copies of all
information acquired hereunder before the effective date of termination not
previously furnished to it, but a terminating or withdrawing Participant shall
not be entitled to any such copies in respect to a later termination or
withdrawal.
12.6. Continuing Authority . On termination of this Agreement under Section 12.1
or the deemed withdrawal of a Participant pursuant to Sections 5.2 and 6.4, the
Manager shall have the power and authority, subject to control of the Management
Committee, if any, to do all things on behalf of the Participants which are
reasonably necessary or convenient to: (a) wind up Operations and (b) complete
any transaction and satisfy any obligation, unfinished or unsatisfied, at the
time of such termination or withdrawal, if the transaction or obligation arises
out of Operations prior to such termination or withdrawal. The Manager shall
have the power and authority to grant or receive extensions of time or change
the method of payment of an already existing liability or obligation, prosecute
and defend actions on behalf of the Participants and the Venture, mortgage
Assets, and take any other reasonable action in any matter with respect to which
the former Participants continue to have, or appear or are alleged to have, a
common interest or a common liability.
12.7. Non-Compete Covenants . A Participant that withdraws pursuant to Section
12.2, or is deemed to have withdrawn pursuant to Sections 6.2 or 6.7 shall not
directly or indirectly acquire any interest in property within the Area of
Interest for two (2) years after the effective date of withdrawal. If a
withdrawing Participant, or an Affiliate of a withdrawing Participant, breaches
this Section 12.7, such Participant or Affiliate shall be obligated to offer to
convey to the non-withdrawing Participant, without cost, any such property or
interest so acquired. Such offer shall be made in writing and can be accepted by
the non-withdrawing Participant at any time within forty-five (45) days after it
is received by such non-withdrawing Participant.
12.8. Mutual Withdrawal . If a Participant elects to withdraw from this
Agreement pursuant to Section 12.2, the other Participant may also elect to
withdraw as a Participant by giving written notice thereof to the other
Participant within thirty (30) days after receipt of the first Participant's
notice of withdrawal, in which event the Participants shall be deemed to have
agreed to terminate the Venture as of the first date of withdrawal pursuant to
Section 12.1.
12.9. Rights to Data After Termination . After termination of this Agreement
pursuant to Sections 12.1 or 12.2 project data shall be distributed as follows:
25
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
(i) All proprietary data provided by CCA covering data on the Properties
and other Stillwater Complex lands and all copies thereof will be returned
to CCA within 30 days of the termination date. This data includes
geological and related data provided by the Xxxxx family interests.
(ii) Copies, including but not limited to, of any and all raw data
developed by ICMC about or on the Properties, any geological data,
computer generated data, notes, summaries, maps, surveys, assays, drill
hole logs or other documentation generated by ICMC during the life of the
Venture will be provided to CCA.
ARTICLE 13. SURRENDER OF PROPERTIES
13.1. Surrender of Properties .The Management Committee may authorize the
Manager to surrender part or all of the Properties. If the Management Committee
authorizes any such surrender over the objection of a Participant, the
Participant that desires to surrender shall assign to the objecting Participant,
without cost to the objecting Participant, all of the surrendering Participant's
interest in the Properties to be surrendered, and the surrendered Properties
shall cease to be part of the Properties.
13.2. Reacquisition. If any Properties are surrendered under the provisions of
this Article 13, then, unless this Agreement is earlier terminated, neither
Participant nor any Affiliate thereof shall acquire any interest in such
Properties or a right to acquire such Properties for a period of two years
following the date of such surrender. If a Participant reacquires any Properties
in violation of this Section 13.2, the other Participant may elect by notice to
the reacquiring Participant within forty-five (45) days after it has actual
notice of such reacquisition, to have such Properties made subject to the terms
of this Agreement. In the event such an election is made, the reacquired
properties shall thereafter be treated as Properties, and the costs of
reacquisition shall be borne pro rata by the Participants and shall be included
for purposes of calculating the Participants' respective Participating
Interests.
ARTICLE 14. TRANSFER OF INTEREST
14.1. General . A Participant shall have the right to Transfer to any third
party all or any part of its interest in or to this Agreement, its Participating
Interest, or the Assets solely as provided in this Article 14.
14.2. Limitations on Free Transferability . The Transfer right of a Participant
in Section 14.1 shall be subject to the following terms and conditions:
26
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
14.2.1. No transferee of all or any part of the interest of a Participant
in this Agreement, any Participating Interest, or the Assets shall have
the rights of a Participant unless and until the transferring Participant
has provided to the other Participant notice of the Transfer, and except
as provided in Sections 14.2.3. and 14.2,4., the transferee, as of the
effective date of the Transfer, has committed in writing to be bound by
this Agreement to the same extent as the transferring Participant;
14.2.2. No Transfer permitted by this Article 14 shall relieve the
transferring Participant of its share of any liability, whether accruing
before or after such Transfer, which arises out of Operations conducted
prior to such Transfer;
14.2.3. In the event of a Transfer of less than all of a Participating
Interest, the transferring Participant and its transferee shall act and be
treated as one Participant;
14.2.4. Except as provided in Section 14.4.3, no Participant shall
transfer any interest in this Agreement or the Assets except by Transfer
of part or all of its Participating Interest;
14.2.5. From the date of execution of this Agreement, if the Transfer is
the grant of a security interest by mortgage, deed of trust, pledge, lien
or other encumbrance of any interest in this Agreement, any Participating
Interest or the Assets to secure a loan or other indebtedness of a
Participant in a bona fide transaction, such security interest shall be
subordinate to the terms of this Agreement and the rights and interests of
the other Participant hereunder. Upon any foreclosure or other enforcement
of rights in the security interest the acquiring third party shall be
deemed to have assumed the position of the encumbering Participant with
respect to this Agreement and the other Participant, and it shall comply
with and be bound by the terms and conditions of this Agreement; and
14.2.6. If a sale or other commitment or disposition of Products or
proceeds from the sale of Products by a Participant upon distribution to
it pursuant to Article 11 creates in a third party a security interest in
Products or proceeds therefrom prior to such distribution, such sales,
commitment or disposition shall be subject to the terms and conditions of
this Agreement; and
14.2.7 No Participant, without the consent of the other Participant, shall
make a Transfer which shall cause termination of the tax partnership
established by the provisions of Section 4.2;
14.3. Right of First Refusal . Except as otherwise provided in Section 14.4, if
either Participant receives an offer to Transfer or otherwise dispose of all or
a part of its Participating Interest in the Venture and/or Assets to a third
party, including CCA's 100% interest in the "G" and "H" Chromites not subject to
this Joint Venture, prior to accepting such offer the transferring Participant
shall first offer the interest to the non-transferring Participant at the same
terms and conditions as set forth in the third party offer. The non-transferring
Participant may
27
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
accept the offer by written notice to the transferring Participant given within
sixty (60) days of receipt of the transferring Participant's offer. If the
non-transferring Participant does not accept the offer, then the transferring
Participant may sell or otherwise dispose of its interest under terms and
conditions not less favorable to it than those set forth in the third party
offer, provided that the sale or other disposition is effectuated within one
hundred and eighty (180) days from the effective date of the third party offer.
14.4. Exceptions to Right of First Refusal . Section 14.3 shall not apply to the
following:
14.4.1. Transfer by a Participant of all or any part of its interest in
this Agreement, any Participating Interest, or the Assets to an Affiliate;
14.4.2. Incorporation of a Participant, or corporate merger,
consolidation, amalgamation or reorganization of a Participant by which
the surviving entity shall possess substantially all of the stock, or all
of the property rights and interests, and be subject to substantially all
of the liabilities and obligations of that Participant;
14.4.3. The grant by a Participant of a security interest in any interest
in this Agreement, any Participating Interest, or the Assets by mortgage,
deed of trust, pledge, lien or other encumbrance which shall be
subordinate as set forth above; or
14.4.4. A sale or other commitment or disposition of Products or proceeds
from sale of Products by a Participant upon distribution to it pursuant to
Article 11.
ARTICLE 15. CONFIDENTIALITY AND RELEASES
15.1. General . The financial terms of this Agreement and all information
obtained in connection with the performance of this Agreement are valuable trade
secrets and shall be the exclusive property of the Participants and shall be
maintained on a confidential basis. Neither Participant shall make any
disclosure to any third party or the public or give out any publicity, press
release or written material relating to confidential information, the Venture or
the terms of this Agreement without the prior written consent of the other
Participant, which consent shall not be unreasonably withheld.
15.2. Exceptions. The consent required by Section 15.1 shall not apply to a
disclosure:
15.2.1. To an Affiliate, consultant, contractor or subcontractor that has
a bona fide need to be informed;
15.2.2. To any third party to whom the disclosing Participant contemplates
a Transfer
28
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
of all or any part of its interest in or to this Agreement, its
Participating Interest, or the Assets; or
15.2.3. Which the disclosing Participant is required by pertinent law or
regulation or the rules of any stock exchange to disclose, provided that
in any case to which this Section 15.2 is applicable, the disclosing
Participant shall give written notice to the other Participant prior to
the making of any such disclosure. The disclosing Participant shall allow
the other party twenty-four (24) hours to comment on the nature and extent
of such required disclosure.
15.2.4. As necessary to administer or enforce this Agreement.
As to any disclosure pursuant to Section 15.2.1 or 15.2.2, only such
confidential information as such third party shall have a legitimate business
need to know shall be disclosed and such third party shall first agree in
writing to protect the confidential information from further disclosure to the
same extent as the Participants are obligated under this Article 15.
15.3. Duration of Confidentiality . The provisions of this Article 15 shall
apply during the term of this Agreement and for two (2) years following a
termination pursuant to Section 12.1 or following withdrawal pursuant to Section
12.2, and shall continue to apply to any Participant who withdraws, who is
deemed to have withdrawn, or who Transfers its Participating Interest, for two
years following the date of such occurrence.
ARTICLE 16. AREA OF INTEREST
16.1. Acquisitions in Area of Interest . If at any time during the existence of
this Agreement any Participant or any former Participant that has a production
royalty interest as provided for herein, (in this section only called the
"Acquiring Party") stakes or otherwise acquires any right to or interest in any
properties within the Area of Interest, the Acquiring Party shall forthwith give
notice to the other parties of such acquisition, the total cost thereof and all
details in the possession of that Participant with respect to the details of the
acquisition, the nature of the property and the known mineralization. Each other
Participant may, within thirty (30) days of receipt of the Acquiring Party's
notice, elect, by notice to the Acquiring Party, to require that the properties
and the right or interest acquired be held equally by the parties and be
included in and thereafter form part of the Properties for all purposes of this
Agreement.
In the event properties or interests in properties are acquired by an Acquiring
Party through a joint venture in the Area of Interest after the Effective Date
of this Agreement, any such acquired properties or interest in acquired
properties, shall be held equally by ICMC and CCA unless otherwise agreed.
29
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
If the election aforesaid is made, the other Participants shall reimburse the
Acquiring Party for that portion of the cost of acquisition which is equivalent
to their respective Participating Interests. If no other Participant makes the
election aforesaid within that period of thirty (30) days, the right or interest
acquired shall not form part of the Properties and the Acquiring Party shall be
solely entitled thereto.
ARTICLE 17. GENERAL PROVISIONS
17.1. Notices . All notices, payments and other required communications
("Notices") to the Participants shall be in writing, and shall be addressed
respectively as follows:
17.1.1. If to ICMC:
Idaho Consolidated Metals Corporation
X.X. Xxx 0000
Xxxxxxxx, Xxxxx 00000
Attn: Del Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
30
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
17.1.2. If to CCA:
Chrome Corporation of America
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
All Notices shall be given:
(i) by personal delivery to the Participant, or
(ii) by electronic communication or facsimile, with a confirmation sent by
registered or certified mail return receipt requested,
(iii) by registered or certified mail return receipt requested or
(iv) by express mail.
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 electronic communication or facsimile on the next business day
following receipt of the electronic communication or facsimile, and
(iii) if solely by mail on the next business day after actual receipt.
A Participant may change its address by Notice to the other Participant.
17.2. Waiver . The failure of a Participant to insist on the strict performance
of any provision
31
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
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
Participant's right thereafter to enforce any provision or exercise any right.
17.3. Modification . No modification of this Agreement shall be valid unless
made in writing and duly executed by the Participants.
17.4. Force Majeure . Except for the obligation to make payments when due
hereunder, the obligations of a Participant shall be suspended to the extent and
for the period that performance is prevented by any cause, whether foreseeable
or unforeseeable, beyond its reasonable control, including, without limitation,
lack of satisfactory market, labor disputes (however arising and whether or not
employee demands are reasonable or within the power of the Participant 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 on reasonably acceptable terms 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, provincial 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.
The affected Participant shall promptly give notice to the other Participant of
the suspension of performance, stating therein the nature of the suspension, the
reasons therefor, and the expected duration thereof and this Agreement shall be
extended by the total period of such delays or suspension. The affected
Participant shall resume performance as soon as reasonably possible. During the
period of suspension the obligations of the Participants to advance funds
pursuant to Section 9.2 shall be reduced to levels consistent with Operations.
17.5. Economic Force Majeure . Following the Earn-In Period and if at any time
after the Management Committee reaches a determination, in its reasonable
judgment, that the minerals encompassed within the Properties cannot be
profitably mined under the terms and conditions of this Agreement as it is then
in effect, the Management Committee may declare that a condition of Force
Majeure exists as provided in Section 17.4, above; provided, that in no event
shall a condition of Force Majeure declared pursuant to this Section 17.5 be in
effect for more than five (5) consecutive years.
17.6. Governing Law . This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Montana.
17.7. Rule Against Perpetuities . Any right or option to acquire any interest in
real or personal property under this Agreement must be exercised, if at all, so
as to vest such interest in the acquirer within twenty-one (21) years after the
effective date of this Agreement.
32
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
17.8. Further Assurances. Each of the Participants 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.
17.9. Survival of Terms and Conditions . The following Sections shall survive
the termination of this Agreement to the full extent necessary for their
enforcement and the protection of the Participant in whose favor they run:
Sections 2.2, 4.3, 6.6, 6.8, 12.2, 12.3, 12.4, 12.5, 12.7, 13.2, 17.6 and 1.3.3
of the Accounting Procedure.
17.10. Entire Agreement; Successors and Assigns . This Agreement contains the
entire understanding of the Participants and supersedes all prior agreements and
understandings between the Participants relating to the subject matter hereof.
This Agreement shall be binding upon and inure to the benefit of the respective
successors and permitted assigns of the Participants. In the event of any
conflict between this Agreement and any Exhibit attached hereto, the terms of
this Agreement shall be controlling.
17.11. Memorandum . At the request of either Participant, a Memorandum or short
form of this Agreement, as appropriate, which shall not disclose financial
information contained herein, shall be prepared and recorded by Manager. This
Agreement shall not be recorded.
17.12. Funds . All references to dollar amounts contained in this Agreement are
references to United States dollars.
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
effective as of the day and year first above written.
CHROME CORPORATION OF AMERICA
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxxx X. Xxxxxx
Title:Executive Vice President
Tax ID#; 00-0000000
33
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
IDAHO CONSOLIDATED METALS CORPORATION
By : /s/ Del Xxxxxxx
-------------------------------------
Del Xxxxxxx
Title: President
Tax ID#: 00-0000000
34
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
EXHIBIT A-1
NICKEL/COPPER LEASE
Attached to and made part of that certain Joint Venture Agreement
dated the 1st day of February, 2000 between
Idaho Consolidated Metals Corporation and Chrome Corporation of America.
The following patented and unpatented mining claims located in Stillwater
County, State of Montana.
EAST OF THE STILLWATER RIVER WEST OF THE STILLWATER RIVER
(18 Patented Lode Claims) (13 Patented Lode Claims)
Big Ben Red Bird
Lucky T Mountain View
L.T.X. Big Thing
H.E.D. Rough Rock
Copper Rough Rock #2
Gold Tip Brooklyn
Beauty Avalanche
Patent Cataract
Pada #1 New Wabeliski
Pada #2 Summit
Opal Something
Xxxx Stillwater
Emerald Pine
Perseverance (7 Unpatented Lode Claims)
H.R.H. Smelter
Blue Xxx Red Bird #2
Copper Bottom Gap
Xxxxx Xxx
(1 Unpatented Lode Claim) Xxxx
Giant Xxxxxx
Xxxxxxxx
A-1-1
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
A-1-2
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
EXHIBIT A-2
CHROME LEASE
Attached to and made part of that certain Joint Venture Agreement
dated the 1st day of February, 2000 between
Idaho Consolidated Metals Corporation and Chrome Corporation of America.
The following patented and unpatented mining claims located in Stillwater and
Sweet Grass Counties, State of Montana.
MOUNTAIN VIEW CLAIMS-
--------------------
PATENTED MINERAL CLAIM
Bald Eagle
A-2-1
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
CLAIMS INCLUDED IN PATENT APPLICATION MTM81443
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
------ ---- ---- ---- -------- -----
M XX 00000 SUSU 25 78 Misc. 887 11/07/79 T5S R15E 19
Amended 83 Misc. 744 11/25/81
M XX 00000 SUSU 28 78 Misc. 893 11/07/79 T5S R15E 20
Amended 83 Misc. 750 11/25/81
M XX 00000 SUSU 29 78 Misc. 895 11/07/79 T5S R15E 20
Amended 83 Misc. 752 11/25/81
M XX 00000 XXX 19 76 Misc. 182 5/26/78 T5S R15E 20
Amended 77 Misc. 13 2/26/79
Amended 83 Misc. 533 11/06/81
M XX 00000 XXX 20 76 Misc. 184 5/26/78 T5S R15E 20
Amended 77 Misc. 15 2/26/79
Amended 83 Misc. 535 11/06/81
M XX 00000 XXX 21 76 Misc. 186 5/26/78 T5S R15E 20
Amended 77 Misc. 17 2/20/79
Amended 83 Misc. 537 11/06/81
M MC 186404 Xxxxx 0 Xxxx 00 000 9/24/91 T5S R15E 19
M MC 186405 Xxxxx 0 Xxxx 00 000 9/24/91 T5S R15E 19
M MC 186406 Xxxxx 0 Xxxx 00 000 9/25/91 T5S R15E 19
M MC 186407 Xxxxx 0 Xxxx 00 000 9/24/91 T5S R15E 19/20
M MC 186408 Xxxxx 0 Xxxx 00 000 9/25/91 T5S R15E 19/20
M MC 186409 Xxxxx 0 Xxxx 00 000 9/25/91 T5S R15E 19/20
M MC 186410 Xxxxx 0 Xxxx 00 000 9/29/91 T5S R15E 20
M MC 186411 Xxxxx 0 Xxxx 00 000 9/27/91 T5S R15E 20
M MC 186412 Xxxxx 0 Xxxx 00 000 9/27/91 T5S R15E 20
M MC 186413 Xxxxx 00 Xxxx 00 000 9/29/91 T5S R15E 20
M MC 186414 Xxxxx 00 Xxxx 00 000 9/27/91 T5S R15E 20
M MC 186415 Xxxxx 00 Xxxx 00 000 9/27/91 T5S R15E 20
M MC 186416 Xxxxx 00 Xxxx 00 000 9/27/91 T5S R15E 20
M MC 186417 Xxxxx 00 Xxxx 00 000 9/27/91 T5S R15E 00
X XX 000000 XXXX XXXXXX 97 238 4/21/92 T5S R15E 20
A-2-2
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
UNPATENTED CLAIMS
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M XX 00000 XXX 1 33 Misc. 445-446 10/30/67 T5S R15E 21
Amended 76 Misc. 146
Amended 76 Misc. 930
Amended 82 Misc. 767
M XX 00000 XXX 2 33 Misc. 447-448 10/30/67 T5S R15E 21
Amended 76 Misc. 148
Amended 76 Misc. 932
Amended 82 Misc. 765
M XX 00000 XXX 3 33 Misc. 449-450 10/30/67 T5S R15E 21
Amended 76 Misc. 150
Amended 76 Misc. 934
M XX 00000 XXX 13 00 Xxxx. 000 X0X X00X 20
Amended 77 Misc. 1
Amended 83 Misc. 525
M XX 00000 XXX 14 00 Xxxx. 000 X0X X00X 20
Amended 77 Misc. 3
Amended 83 Misc. 527
M XX 00000 XXX 15 00 Xxxx. 000 X0X X00X 20NE/4
Amended 77 Misc. 5
Amended 83 Misc. 529
M XX 00000 XXX 16 00 Xxxx. 000 X0X X00X 20NE/4
Amended 77 Misc. 7
Amended 83 Misc. 531
M XX 00000 XXX 17 00 Xxxx. 000 X0X X00X 20NE/4
Amended 77 Misc. 9
Amended 82 Misc. 698
A-2-3
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M XX 00000 XXX 18 00 Xxxx. 000 X0X X00X 20
Amended 77 Misc. 11
M XX 00000 XXX 25 00 Xxxx. 000 X0X X00X 17
Amended 77 Misc. 25
Amended 84 Misc. 82
M XX 00000 XXX 112 00 Xxxx. 000 X0X X00X 21/28
Amended 77 Misc. 159
M XX 00000 XXX 113 00 Xxxx. 000 X0X X00X 21/28
Amended 77 Misc. 161
M XX 00000 XXX 114 00 Xxxx. 000 X0X X00X 21/28
Amended 77 Misc. 163
M XX 00000 XXX 115 00 Xxxx 000 X0X X00X 21/28
Amended 77 Misc. 165
M XX 00000 XXX 116 00 Xxxx. 000 X0X X00X 21/28
Amended 77 Misc. 167
M XX 00000 XXX 117 00 Xxxx. 000 X0X X00X 21/28
Amended 77 Misc. 169
M XX 00000 XXX 125 76 Misc. 744 T5S R15E 21
Amended 77 Misc. 183
M XX 00000 XXX 126 76 Misc. 742 T5S R15E 21
Amended 77 Misc. 185
M XX 00000 GYPSUM 0 Xxxx. 000 X0X X00X 15, 16
M XX 00000 DUKE 00 Xxxx. 000 X0X X00X 15, 16
M XX 00000 XXX 3 f 00 Xxxx. 000-000 X0X X00X 29/30
M XX 00000 XXX 4 58 Misc. 452-453 T5S R15E 29
M MC 35962 XXX 4A 59 Misc. 53- 54 T5S R15E 20/29
M XX 00000 XXX 5 58 Misc. 454-455 T5S R15E 20/29/19
M XX 00000 XXX 5A 59 Misc. 55- 56 T5S R15E 19/20
M XX 00000 XXX 6 59 Misc. 26- 27 T5S R15E 19/30
M XX 00000 XXX 6A 59 Misc. 57- 58 T5S R15E 19
A-2-4
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M XX 00000 XXX 7 59 Misc. 28- 29 T5S R15E 19/30
M XX 00000 XXX 8 59 Misc. 33- 34 T5S R15E 30
M XX 00000 XXX 9 59 Misc. 35- 36 T5S R15E 19/30
M XX 00000 XXX 10 59 Misc. 37- 38 8/14/67 T5S R15E 19SW/4
M XX 00000 XXX 11 59 Misc. 39- 40 8/14/67 T5S R15E 19W/2
M XX 00000 XXX 12 59 Misc. 41- 42 T5S R15E 19
M XX 00000 XXX 13 59 Misc. 43- 44 T5S R15E 19
M XX 00000 XXX 14 59 Misc. 45 T5S R14&15E 19&24
M XX 00000 XXX 15 59 Misc. 47 T5S R14&15E 19/24
M XX 00000 XXX 39 59 Misc. 187-188 T5S R15E 19/30
M XX 00000 XXX 44 59 Misc. 197-198 T5S R15E 21
M XX 00000 GAY 1 65 Misc. 104-105 T5S R15E 21
Amended 82 Misc. 676-677
M XX 00000 GAY 2 65 Misc. 106-107 T5S R15E 21
Amended 82 Misc. 678-679
M XX 00000 GAY 6 65 Misc. 114-115 T5S R15E 20/21
Amended 82 Misc. 684-685
M XX 00000 GAY 7 65 Misc. 116-117 T5S R15E 20/21
Amended 82 Misc. 686-687
M XX 00000 GAY 11 65 Misc. 124-125 T5S R15E 20
Amended 82 Misc. 692-693
M XX 00000 GAY 12 65 Misc. 126-127 T5S R15E 20
Amended 82 Misc. 694-695
M XX 00000 GAY 15 65 Misc. 132-133 T5S R15E 19/20
Amended 83 Misc. 523-524
M XX 00000 GAY 16 65 Misc. 134-135 T5S R15E 17/18/19/20
Amended 84 Misc. 80- 81
M MC 36360 Book Tunnel 00 Xxxx. 000 X0X X00X 19
& Tunnel Site
A-2-5
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M XX 00000 Mountain View34 Misc. 513-514 T5S R15E 20
Chrome Co.
M XX 00000 No. 5 Tunnel 00 Xxxx. 000 X0X X00X 19
& Tunnel Site
M MC 36385 Monte Alto 7 159 T5S R15E 20/21
M XX 00000 MIN No. 2 22 6 T5S R15E 28
M XX 00000 MIN Xx. 0 00 00- 00 X0X X00X 28
M XX 00000 Xxxx 0 000 X0X X00X 21
M MC 00000 XXX 00 000 X0X X00X 21/28
M XX 00000 Xxx Xxxx Xx. 0 000 X0X X00X 29
M XX 00000 XXXX X. 7 Misc. 118 7/11/18 T5S R15E 21W/2
Amended 24 Misc. 287 10/17/41
M XX 00000 Xxxx 24 Misc. 574 7/27/42 T5S R15E 19SW/4
M XX 00000 XXX Xx. 0 00 0 X0X X00X 28/21
M XX 00000 Verdi Placer 24 Misc. 513 7/27/42 T5S R15E 19S/2
M XX 00000 SUSU 16 00 Xxxx. 000 X0X X00X 19
Amended 83 Misc. 726
M XX 00000 SUSU 17 00 Xxxx. 000 X0X X00X 19N/2
Amended 83 Misc. 728
M XX 00000 SUSU 18 00 Xxxx. 000 X0X X00X 19N/2
Amended 83 Misc. 730
M XX 00000 SUSU 19 00 Xxxx. 000 X0X X00X 19N/2
Amended 83 Misc. 732
M XX 00000 SUSU 20 78 Misc. 877 11/07/79 T5S R15E 19N/2
Amended 83 Misc. 734 11/25/81
M XX 00000 SUSU 21 78 Misc. 879 11/07/79 T5S R15E 19N/2
Amended 83 Misc. 736 11/25/81
M XX 00000 SUSU 22 78 Misc. 881 11/07/79 T5S R15E 19NE/4
Amended 83 Misc. 738 11/25/81
A-2-6
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M XX 00000 SUSU 23 78 Misc. 883 11/07/79 T5S R15E 19NE/4
Amended 83 Misc. 740 11/25/81
M XX 00000 SUSU 24 78 Misc. 885 11/07/79 T5S R15E 19NE/4
Amended 83 Misc. 742 11/25/81
M XX 00000 SUSU 26 78 Misc. 889 11/07/79 T5S R15E 19NE/420NW/4
Amended 83 Misc. 746 11/25/81
M XX 00000 SUSU 27 78 Misc. 891 11/07/79 T5S R15E 19NE/420NW/4
Amended 83 Misc. 748 11/25/81
M XX 00000 XXX fr. 33 Misc. 443-444 10/30/67 T5S R15E 21
Amended 82 Misc. 877
M XX 00000 GAY fr. 00 Xxxx. 000-000 X0X X00X 21
M XX 00000 XXX 00 00 00 X0X X00X 20
A-2-7
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
Located in Stillwater and Sweet Grass Counties, Montana
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M XX 00000 XXX 16 59 Misc. 49 T5S R14&15E 19/24
M XX 00000 XXX 17 59 Misc. 59 T5S R14&15E 19/24
Amended 83 Misc. 754
M XX 00000 XXX 18 59 Misc. 61 T5S R14&15E 19/24
Amended 83 Misc. 756
M XX 00000 XXX 40 59 Misc. 189 T5S R14&15E 19/24
M XX 00000 XXX 41 59 Misc. 191 T5S R14&15E 19/24
Amended 83 Misc. 758
A-2-8
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
EXHIBIT A-3
CRESCENT CREEK CLAIMS
Attached to and made part of that certain Joint Venture Agreement
dated the 1st day of February, 2000 between
Idaho Consolidated Metals Corporation and Chrome Corporation of America.
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M MC 128417 RAM 1 44 297 9/17/86 T5S R14E 21
M MC 128418 RAM 2 44 301 9/17/86 T5S R14E 21
M MC 128420 RAM 4 44 241 9/19/86 T5S R14E 20/21
M XX 000000 RAM 5 44 243 9/19/86 T5S R14E 21
M MC 128423 RAM 7 44 247 9/21/86 T5S R14E 20
M MC 128424 RAM 8 44 249 9/21/86 T5S R14E 20/21
M XX 000000 RAM 11 44 255 9/22/86 T5S R14E 20
M MC 128428 RAM 12 44 257 9/22/86 T5S R14E 20
M MC 128430 RAM 14 44 261 9/24/86 T5S R14E 19/20
M XX 000000 RAM 15 44 263 9/24/86 T5S R14E 19/20
M XX 000000 RAM 17 44 237 9/17/86 T5S R14E 21 SE/4
Amended 44 341 6/18/87
M XX 000000 RAM 18 44 239 9/17/86 T5S R14E 21 SE/4
Amended 44 337
M MC 128435 RAM 19 44 267 9/27/86 T5S R14E 18/19
M XX 000000 RAM 20 44 269 9/27/86 T5S R14E 20 NW/4
Amended 44 339 T5S R14E 17 SW/4
M XX 000000 RAM 24 44 277 9/27/86 T5S R14E 18
M MC 134180 RAM 44 44 363 6/20/87 T5S R14E 20 NW/4
M XX 000000 RAM 45 44 365 6/20/87 T5S R14E 20 N/2
Note: The descriptive words after Crescent Creek Claims have been added since
the signature of the agreement.
A-3-1
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
A-3-2
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
EXHIBIT B.
ACCOUNTING PROCEDURES
Attached to and made part of that certain Joint Venture Agreement
dated the 1st day of February, 2000 between
Idaho Consolidated Metals Corporation and Chrome Corporation of America.
The purpose of these Accounting Procedures is to establish equitable
methods for determining charges and credits applicable to Operations under the
captioned Agreement (the "Agreement"). It is the intent of the Manager and any
Participant that is not acting as the Manager ("the non-Manager") that neither
of them shall gain nor lose by reason of their duties and responsibilities as
the Manager or the non-Manager but that the Manager should be reimbursed for the
value of services provided hereunder. If any method proves unfair or inequitable
to the Manager or the non-Manager, the Participants shall meet and in good faith
endeavor to agree upon changes deemed necessary to correct the unfairness or
inequity. In the event of a conflict between the provisions of these Accounting
Procedures and those of the Agreement, the provisions of the Agreement shall
control.
ARTICLE 1.
GENERAL PROVISIONS
1.1. Definitions. The definitions set forth in the Agreement shall apply
to these Accounting Procedures and shall have the same meanings as used herein.
Additional terms used in these Accounting Procedures are set forth below shall
have the following meanings:
1.1.1."Material" shall mean personal property, including but not
limited to supplies and non-depreciable equipment, acquired and held for use in
Operations.
1.1.2."Outsider" shall mean participants other than "Participant" to
the Agreement and their affiliates.
1.1.3."Personal Expenses" shall mean travel and other reasonable
reimbursable expenses of employees of the Manager or its Affiliates.
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
1.1.4."Technical Employees" shall mean those employees having
special and specific engineering, geological, legal, or other professional
skills, and whose primary function in Operations is the handling of specific
matters for the benefit of Operations.
1.2. Accounting Records.
1.2.1.The Manager shall maintain accounting records for the Joint
Account in accordance with generally accepted accounting principles consistently
applied and used in the mining industry.
1.2.2.The Manager shall take advantage of and credit the Venture
with all cash and trade discounts, freight allowances and equalizations, annual
volume or other allowances, credits, salvages, commissions, insurance discount
dividends and retroactive premium adjustments, and any other benefits which
accrue to the Manager wholly or in part because of Operations.
1.3. Statements, Billings and Adjustments.
1.3.1.The Manager shall promptly submit to the Management Committee
monthly statements of account reflecting in reasonable detail the charges and
credits to the Joint Account during the preceding month.
1.3.2.On the basis of the adopted Program and Budget, the Manager
shall submit to each Participant prior to the last day of each month, a billing
for estimated cash requirements for the next month. Within ten (10) days after
receipt of each billing, each Participant shall advance to the Manager its
proportionate share of the estimated amount. Time is of the essence of payment
of such billings. The Manager shall at all times maintain a cash balance
approximately equal to the rate of disbursement for up to forty-five (45) days.
1.3.3.A Participant that fails to meet cash calls in the amount and
at the times specified in Section 1.3(b) shall be in default, and the amount of
the defaulted cash call shall bear interest from the date due at an annual rate
equal to two (2) percentage points over the Prime Rate, but in no event shall
said rate of interest exceed the maximum permitted by law. The non- defaulting
Participant shall have those rights, remedies and elections specified in Section
6.4 of the Agreement.
1.3.4.Payment of bills shall not prejudice the right of the
non-Manager to protest
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
or question the correctness thereof; however, all bills and statements rendered
during any calendar year shall be presumed conclusively to be true and correct
after twelve (12) months following the end of any such calendar year unless,
within the said twelve-month period, the non- Manager takes written exception
thereto and makes claim on the Manager for adjustment. No adjustment favorable
to the Manager shall be made unless it is made within the same prescribed period
or in connection with an adjustment in favor of the non-Manager. The provisions
of this paragraph shall not prevent adjustments resulting from a physical
inventory of the Assets.
1.3.4.1. Advances and Payments.
0.0.0.Xx provided for in this Exhibit "B", the non-Manager shall
advance its share of the estimated cash outlay for the succeeding month's
operation. If the non-Manager's advances exceed its share of actual
expenditures, subsequent cash calls will be adjusted downward or the Manager
will refund to the non-Manager excess funds that are not necessary for
subsequent Operations.
1.3.6.The Manager shall base its estimates of cash advance
requirements on the latest information available and shall take into account
cash on hand which may be applied to satisfy such requirements in order to
reduce the amounts to be advanced. It is the intent of the Participants to
provide adequate funds for the Operations and to maintain bank balances at
minimum levels.
1.3.7.If the Manager does not request the non-Manager to advance its
share of estimated cash requirements, the non-Manager shall pay its share of
expenditures within thirty (30) days following receipt of the Manager's billing.
1.3.8.Except as provided in Section 6.4 of the Agreement, all
payments shall be made on or before the due date by wire transfer in immediately
available funds to bank accounts designated by the Manager. If not so paid, the
unpaid balance shall bear interest after the due date at the rate of Prime Rate
plus two percent (2%) for each thirty (30) day period or portion thereof until
such amount is paid, plus attorneys' fees, court costs, and other costs related
to the collection of the unpaid amounts.
1.3.9.Funds received by the Manager from the non-Manager Participant
shall be segregated or maintained by the Manager as a separate fund, and may not
be commingled with the Manager's own funds, except with the consent of the
non-Manager Participant.
1.3.10. Audits. Upon notice in writing to the Manager, the
non-Manager shall have
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
the right to audit the accounts and records relating to the accounting made
under this Agreement for any calendar year within the twelve (12) month period
following the end of such calendar year; provided, however, the making of an
audit shall not extend the time for the taking of written exception to and the
adjustments of accounts pursuant to Section 1.3 (d). The non- Manager may
arrange for audits by its own staff or outside professional and qualified
independent auditors. Audits shall be conducted in a manner so as to cause the
minimum inconvenience to the Manager. The Manager shall bear no portion of
non-Manager's audit costs unless agreed to by the Manager in advance of such
audit. Notwithstanding the above, in the event the non- Manager does not audit
the accounts and records relating to the accounting made under this Agreement
the Manager shall have conducted annually an audit of the accounts and records
relating to the accounting made under this Agreement. Such audit shall be for
the account of the Venture. If the non-Manager does have an audit performed as
provided herein, the Manager shall not be required to perform an additional
audit.
ARTICLE 2.
CHARGEABLE COSTS
Subject to the provisions of the Agreement, the Manager shall charge the
Joint Account with all costs incurred by it as necessary and proper for the
conduct of Operations or maintenance of the Assets. Such costs shall be
reasonable and comparable with similar projects in the area. Except as otherwise
provided in the Agreement, the Manager shall charge the Joint Account with: (1)
exploration expenditures made for the exploration activities within the
Properties, (2) expenditures made for engineering, environmental, planning,
Development and construction related to the Properties and for the equipment and
facilities necessary for Operations, including all working capital and
sustaining capital for ongoing Operations and for the expansion and updating of
Operations, and (3) costs and expenses of mining, processing, reclamation,
restoration, worker's compensation and other claims upon closing of the mines,
and any other costs following the mine closing. Such costs include, but are not
limited to the following:
2.1. Property Payments. Property payments, rentals, royalties and other
payments out of production (unless such royalties or other payments shall burden
the ownership interests of only one Participant) and fees, paid by the Manager
for Operations including permits, fees, and other charges which are assessed by
various governmental agencies. Such costs also include acquisition of easements,
rights of way, and surface rights.
2.2. Labor.
2.2.1.Salaries and wages of the Manager's employees directly engaged
in and
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
the conduct of and for the benefit of Operations, whether temporarily or
permanently assigned. The proportion of salaries and wages charged will be
prorated proportionate to the time spent by employees for the benefit of
Operations. Salaries and wages shall include everything constituting gross pay
to employees as reflected on the Manager's payroll, including travel time and
overtime.
2.2.2.The Manager's cost of holidays, rest days, vacations,
disability benefits, sickness, and other customary allowances and reasonable
expenses which are paid or reimbursed under the Manager's usual practice. Such
amounts may be charged either on a "percentage assessment" of salaries and
wages, or on a cash basis.
2.2.3.Costs of expenditures or contributions made pursuant to
assessments imposed by governmental authority which are applicable to the
Manager's cost of salaries and wages.
2.2.4.Personal Expenses of employees whose salaries and wages are
chargeable to the Joint Account under Section 2.2 (a), but only to the extent
that such Personal Expenses are incurred in connection with their efforts while
directly engaged in the conduct of and for the benefit of Operations.
2.2.5.The Manager's actual costs of established plans for employees'
group life insurance, hospitalization, medical, dental, pension, retirement,
stock purchase, profit sharing, thrift, bonus, and other benefit plans of a
similar nature applicable to the Manager's labor cost chargeable to the Joint
Account.
2.2.6.If a percentage assignment is used for Section 2.2 (b) and
(e), the rate shall be based on actual cost experience for the previous year.
Such rate shall be determined during the first quarter of each year and shall be
applied in current year operations.
2.2.7.Relocation costs of employees permanently or temporarily
assigned and directly engaged in the conduct of Operations. Such costs shall
include transportation of employees' families and their personal and household
effects and all other relocation costs in accordance with the Manager's usual
practice.
2.3. Material. Material purchased or furnished by the Manager for use in
Operations as provided under Article 3. So far as is reasonably practical, and
consistent with efficient and economical operations, only such Material shall be
purchased or transferred for use in Operations as may be required for immediate
use.
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
2.4. Transportation.
2.4.1.Transportation of material and other related costs such as
expediting, crating, freight, and unloading at destination.
2.4.2.Transportation of employees as required in the conduct of
Operations.
2.5. Services.
2.5.1.The cost of consultants, contract labor, services, equipment,
and utilities procured from Outsiders.
2.5.2.Technical or research services, such as, but not limited to,
laboratory analysis, drafting, geophysical and geological interpretation,
engineering, reserve studies and related computer services, and data processing,
which may be delegated to and performed by the specialized staffs of one of the
Participants or their Affiliate. Such professional services shall be on a cost
of service basis and charges shall not exceed the cost of comparable quality
services by qualified Outsiders. Charges to the Joint Account for services
directly benefitting Operations shall be in addition to any charges allowed
under Sections 2.11 and 2.12.
0.0.0.Xx the event the Manager from time to time utilizes skilled
personnel of the Participants or their Affiliates for performance of services
either within the Properties or elsewhere for the benefit of Operations, whose
time in full or in part is not otherwise charged hereunder, a proper proportion
of the direct and indirect salary, employee benefits, and travel expenses of
such personnel shall be charged to the Joint Account, provided such work is
pursuant to written authorization by the Manager. Such professional services
shall be on a cost of service basis and charges shall not exceed the cost of
comparable quality services by qualified Outsiders.
2.5.4.Use of the Manager's and the non-Manager's separately owned
equipment and facilities for benefit of Operations. Such use shall be charged to
the Joint Account at rates commensurate with the Manager's actual and full costs
of ownership and operation and such rates shall include cost of maintenance,
repairs, other operating expense, insurance, taxes (other than income taxes),
depreciation, and other overhead. These charges shall not exceed the prevailing
commercial rates in the area.
0.0.0.Xxxx processing and computer services acquired for the benefit
of
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
Operations may be contracted through Outsiders, or by arrangement for computer
services from one of the Participants, or their Affiliates, even though such
facilities are not physically located within the Properties. Charges to the
Joint Account under this provision for services directly benefiting Operations
shall be in addition to any charges allowed under Section 2.11 and 2.12. Such
professional services shall be on a cost of service basis and charges shall not
exceed the cost of comparable quality services by qualified Outsiders.
2.5.6.Any technical services, skilled personnel, equipment,
facilities or data processing services provided to Operations by the
non-Manager, at the request of the Manager, shall be charged on the same basis
as provided in Sections 2.5 (b), (c) (d) and (e) above. The non-Manager shall
xxxx the Manager in accordance with Section 1.4 (c) of the Accounting
Procedures. The Manager may audit the records of the non-Manager with regard to
such services in accordance with the procedure set forth in Section 1.5.
2.6. Repair and Replacement of Property. All costs or expenses (net of the
recoveries from insurance for which the premiums have been charged to the Joint
Account, if any) necessary for the repair or replacement of property resulting
from damages or losses incurred by fire, flood, storm, theft, accident, or any
other cause, excepting the Manager's gross negligence or willful misconduct. The
Manager shall furnish to the non-Manager written notice of damages or losses in
excess of Fifteen Thousand Dollars ($15,000) as soon as practicable. Such costs
and expenses include the costs to combat and control the actions of the hazard.
2.7. Insurance.
2.7.1.Premiums paid for Workers' Compensation or Employer's
Liability Insurance required to be carried for Operations. Premiums paid for an
insurance program covering such property, business interruption, casualty, and
fidelity risks as are deemed prudent by the Manager based on sound business
judgment, which judgment shall be subject to review and revision by the
Management Committee. Premiums paid for other insurance as requested by the
Management Committee. Each Participant may procure and maintain, at its own cost
and expense, such other insurance as it may determine to be necessary to protect
its interests, and any such insurance so procured and maintained shall inure
solely to the benefit of the Participant procuring the same.
2.7.2.Actual expenditures incurred in the investigation, defense,
and settlement of all losses, claims, damages, judgments, and other expenses for
the benefit of Operations, excepting those resulting from the Manager's gross
negligence or willful misconduct.
2.8. Litigation and Claims. All costs or expenses of handling, investigation and
settling litigation or claims arising by reason of Operations or necessary to
protect or recover
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
property, including, but not limited to, attorneys' fees, court costs, cost of
investigation or procuring evidence and amounts paid in settlement or
satisfaction of any such litigation or claims. In the event actions or claims
affecting Operations shall be handled by the legal staff of one of the
Participants, a charge commensurate with the cost of providing such service is
chargeable to the Joint Account.
2.9. Taxes. All taxes (except taxes based on or determined with reference
to income), fees, and governmental assessments of every kind and nature. If the
Manager is required hereunder to pay ad valorem taxes based in whole or in part
upon separate valuations of each Participant's Interest, then notwithstanding
anything to the contrary herein, charges to the Joint Account shall be made and
paid by the Participants hereto in accordance with the percentage of tax value
generated by each Participant's Interest.
2.10. Fines. All fines resulting from non-compliance with applicable laws,
rules, and regulations, except to the extent that such fines were due to the
gross negligence or willful misconduct of the Manager.
2.11. Direct Administrative Costs. The net cost of maintaining and
operating any offices (excepting the corporate headquarters office), suboffices,
camps, warehouses, housing, and other facilities directly serving Operations
shall be charged to the Joint Account. If such facilities serve operations in
addition to Operations, the net costs shall be allocated to all operations
served on an equitable basis mutually agreed to by the Participants.
2.12. Manager's Management Fee. A charge to reimburse the Manager for
overhead and other general and administrative services of the Manager's
corporate headquarters office equal to the following percentages applied to
costs and expenses determined on a monthly basis under the provisions of
Paragraphs 2 through 7, 11 and 13 through 15 of this Article 2:
2.12.1.Five percent (5%) of all cash expenditures incurred prior to
Development.
2.12.2.Five percent (5%) of all cash expenditures incurred following
commencement of Development.
Notwithstanding the above, such Manager's fees shall not be charged
on the overhead of any contractors or agents. The overhead rates set out above
shall be reviewed annually at the request of either party. If a detailed
analysis of the Manager's actual cost experiences establishes that higher or
lower overhead expenses were incurred or are likely to be incurred, and if
higher, are reasonable in the circumstances, then the rates shall be amended by
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
the Management Committee. Such amendment shall be on the basis that the Manager
neither profits nor loses as a result thereof.
2.13. Storage of Production Inventories. Each Participant will bear the
cost incurred for handling and storage of merchantable ore or concentrates as
follows:
2.13.1.Personal property taxes on ore or concentrates in storage for
a Participant within the Properties shall be charged to such Participant.
2.13.2.The cost of loading out such ore in storage for a Participant
from the Properties shall be charged to such Participant.
2.13.3.Cost associated with providing storage of ore or concentrates
within the Properties will be charged on a pro rata basis determined by the
Participants.
2.13.4.Other costs arising out of storage or handling of ore or
concentrates shall be charged to the Participant owning such Materials.
2.13.5. Project Assets. The cost of all capital expenses of the Assets
which are normally depreciable, depletable, or amortizable, including but not
limited to land acquisition, exploration, development, pre-mine development and
stripping, machinery, equipment, plant, buildings, rail facilities and
equipment, improvements, camp and port facilities, townsites and other
infrastructure, whether incurred or acquired prior to or after Commencement of
Commercial Production.
2.14. Other Necessary Expenses. Any other chargeable expenditures not
covered or dealt with in the foregoing provisions which are necessary and proper
for the conduct of Operations.
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
ARTICLE 3.
PRICING OF JOINT ACCOUNT MATERIAL PURCHASES,
TRANSFERS, AND DISPOSITION
The Manager is responsible for Joint Account Material and shall make
proper and timely charges and credits for all Material movements affecting the
Properties. The Manager shall provide all Material for use within the
Properties, however, at the Manager's option, such Material may be supplied by
the non-Manager.
3.1. Purchases. Material purchased shall be charged at the price paid by
the Manager after deduction of all discount received. In case of Material found
to be defective or returned to vendor for any other reason, credit shall be
passed to the Joint Account when adjustment has been received by the Manager.
3.2. Transfer and Dispositions. Material furnished to the Properties and
Material transferred from the Properties or disposed of by the Manager, unless
otherwise agreed to by the Participants, shall be priced at its current fair
market value.
3.2.1.Premium Prices. Whenever Material is not readily obtainable at
published or listed prices because of national emergencies, strikes, or other
unusual causes over which the Manager has no control, the Manager may charge the
Joint Account for the required Material at the Manager's actual cost incurred in
providing such Material, in making it suitable for use, and in moving it to the
Properties.
3.3. Warranty of Material. The Manager shall not be held responsible for
defects in Material furnished for Operations. In the event Material is
defective, credit shall not be passed to the Joint Account until the adjustment
has been received by the Manager from the manufacturer or its agents.
ARTICLE 4.
DISPOSAL OF SURPLUS MATERIAL
4.1. Distribution Generally. The disposition of major items of surplus
Material shall be decided upon by the Manager. The Manager may purchase, but
shall be under no obligation to purchase, the interests of the non-Manager in
surplus Material.
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
4.2. Purchase by Participants. Surplus Material purchased by either the
Manager or the non-Manager shall be credited by the Manager to the Joint Account
at its fair market value.
4.3. Distribution to Participants. Division of Material in kind, if made
between the Manager and the non-Manager, shall be in proportion to their
respective interests in such Material. Each Participant will thereupon be
charged individually with the value of the Material received or receivable by
each Participant, and corresponding credits will be made by the Manager to the
Joint Account. Such credits shall appear in the monthly statement of operations.
4.3.1.Sales. Sales to Outsiders of Material from the Properties shall be
credited by the Manager to the Joint Account at the net amount collected by the
Manager from vendee, which shall be priced on the basis of the best available
market price. Any claim by vendee for defective Materials or otherwise shall be
charged back to the Joint Account if and when paid by the Manager.
ARTICLE 5.
INVENTORIES
5.1. Periodic Inventories. The Manager shall take physical inventory of
Joint Account Material at reasonable intervals in accordance with generally
accepted accounting principles but not less than once a year. The non-Manager
may be represented when any inventory shall bind the non-Manager to accept the
inventory taken by the Manager.
5.2. Reconciliation. Reconciliation of inventories with the Joint Account
shall be made by the Manager, and a list of overages and shortages shall be
furnished to the non-Manager within ninety (90) days following the taking of
inventory. Inventory adjustments shall be made by the Manager to the Joint
Account for overages and shortages, but the Manager shall be held accountable to
the non-Manager only for shortages due to the lack of reasonable diligence.
5.3. Special Inventories. Whenever there is a sale or change of Interest
in the Mineral Rights, the Properties or the Assets, a special inventory may be
taken by the Manager, provided the seller or purchaser or such Interest requests
such inventory and agrees to bear all of the expense thereof. In such cases,
both the seller and the purchaser shall be entitled to be represented. A special
inventory shall be required when there is a change in the Manager. The cost of
the latter inventory will be charged to the Joint Account when the change in the
Manager does not come about as the result of a sale of the former Manager's
Interest.
5.4. Expenses. The expense incurred by the Manager in conducting periodic
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
inventories shall be charged to the Joint Account.
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
EXHIBIT "C"
NET SMELTER RETURN ROYALTY
Attached to and made part of that certain Joint Venture Agreement
dated February 1, 2000, by and between Idaho Consolidated Metals Corporation
and Chrome Corporation of America.
1. The royalty which may be payable to Chrome Corporation of America
(hereinafter called the "Payee") pursuant to paragraph ?? of the Assignment of
Interests agreement by Idaho Consolidated Metals Corporation (hereinafter called
the "Payor") will be a percentage of one hundred percent (100%) of the Net
Smelter Revenue (as hereinafter defined) and will be calculated and paid to the
Payee in accordance with the terms of the Agreement and this Schedule. Terms
having defined meanings in the Agreement and used herein will have the same
meanings in this Schedule as assigned to them in the Assignment of Interest
Agreement unless otherwise specified or the context otherwise requires.
2. The Net Smelter Revenue will be calculated on a calendar quarterly basis and
will, subject to paragraph 7 of this Schedule, be equal to gross revenue less
permissible deductions for such quarter.
3. The following words will have the following meanings:
3.1.1."Gross Revenue" means the aggregate of the following amounts
received in each quarterly period following the commencement of
commercial production from the Mining Properties:
3.1.1.1. The revenue received by the Payor from arm's-length
purchasers of all Products;
3.1.1.2. the fair market value of all Products sold by the payor in
such period to persons not dealing at arm's-length with the
payor; and
3.1.1.3. Any proceeds of insurance on Products;
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Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
3.1.2."Ore" means all materials from the mining properties, the nature and
composition of which justifies either:
3.1.2.1. Mining or removing from place and shipping and selling such
material, or delivering such material to a processing plant for
physical or chemical treatment; or
3.1.2.2. Leaching such material in place;
3.1.3."Permissible Deductions" means the aggregate of the following
charges (to the extent that they are not deducted by any purchaser
in computing payment) that are paid in each quarterly period:
3.1.3.1. Sales charges levied by any sales agent on the sale of
Products,
3.1.3.2. Transportation costs for Products from the Mining
Properties to the place of beneficiation, processing or treatment
and thence to the place of delivery of product to a purchaser
thereof, including shipping, freight, handling and forwarding
expenses;
3.1.3.3. All costs, expenses and charges of any nature whatsoever
which are either paid or incurred by Payor in connection with
refinement, beneficiation of Product after leaving the Properties,
including all weighing, sampling, assaying and representation costs,
metal losses, any umpire charges and any penalties charged by the
processor, refinery or smelter, and
3.1.3.4. All insurance costs on Products, and any government
royalties, production taxes, severance taxes and sales and other
taxes levied on Ore, Products or on the production or value thereof
(other than any Federal or State taxes levied on the income or
profit of the Payor);
3.1.4."Products" means:
3.1.4.1. All ore shipped and sold prior to treatment, and
C-2
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
3.1.4.2. All concentrates, precipitates and products produced from
Ore.
4. The payment on account of the royalty for each calendar quarter will be
calculated and paid within 60 days after the end of each calendar quarter.
Smelter settlement sheets, if any, and a statement setting forth calculations in
sufficient detail to show the payments derivation (the "Statement") must be
submitted with the payment.
5. In the event that final amounts required for the calculation of the payment
on the account of the royalty are not available within the time frame referred
to in section 4 of this Schedule, then provisional amounts will be estimated and
such payment will be paid on the basis of this provisional calculation. Positive
or negative adjustments will be made to the payment on account of the royalty
for the succeeding quarter.
6. All payments on account of the royalty will be considered final and in full
satisfaction of all obligations of the Payor with respect thereto, unless the
Payee delivers to the Payor a written notice (the "Objection Notice") describing
and setting forth a specific objection to the calculation thereof within 60 days
after receipt by the Payee of the Statement. If the Payee objects to a
particular Statement as herein provided, the Payee will, for a period of 60 days
after the Payor's receipt of such objection notice, have the right, upon
reasonable notice and at a reasonable times, to have the Payor's accounts and
records relating to the calculation of the payment in question audited by the
auditors of the Payee. If such audit determines that there has been a deficiency
or an excess in payment due to the Payee, such deficiency or excess will be
resolved by adjusting the next quarterly payment due hereunder. The Payee will
pay for the costs and expenses of such audit unless the deficiency of five (5)
percent or more of the amount due is determined to exist. The Payor will pay the
costs and expenses of such audit if a deficiency of five (5) percent or more of
the amount due is determined to exist. Failure on the part of the Payee to make
a claim against the Payor for adjustment in such 60 day period by delivery of an
Objection Notice will conclusively establish the correctness and sufficiency of
the Statement and payment on account of the royalty for such quarter.
7. All profits and losses resulting from the Payor engaging in any commodity
futures trading, options trading, metals trading, precious metals loans or any
combination thereof, and any other hedging transactions with respect to the
Products which is a precious metal (collectively, "Hedging Transactions") are
specifically excluded from calculations of the payment on account of the royalty
pursuant to this Schedule but it being the intent of the Participants that the
Payor will have the unrestricted right to market and sell Products to third
parties in any manner it chooses and that the Payee will not have any right to
participate in such marketing activities or to share in profit or losses
therefrom. All Hedging Transactions by the Payor and all profit or losses
associated therewith, if any, will be solely for the Payor's account. The amount
of Net Smelter Revenue derived from all Products subject to Hedging Transactions
by the Payor will be determined pursuant to the provisions of this Paragraph 7
and not to Paragraph 2. As to precious metals subject to Hedging Transactions by
the Payor, Net Smelter Revenue will be determined without reference to Hedging
Transactions and will be determined by using the quarterly average
C-3
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
price of the metal, which will be calculated by dividing the sum of all the
London Bullion Market Association P.M. Metal Fix prices reported for the
calendar quarter in question by the number of days for which such prices were
quoted. Any Products subject to Hedging Transactions will be deemed to be sold,
and revenues received therefrom, only on the date of the final settlement of the
amount of refined Products allocated to the account of the Payor by a third
party refinery in respect of such transactions. Furthermore, the Payor will have
no obligations to fulfill any futures contracts, forward sales, gold loans or
other Hedging Transactions which the Payor may hold with Products.
8. If the royalty becomes payable to two or more parties, those parties will
appoint, and will deliver to the Payor a document executed by all of those
parties appointing a single agent or trustee of all such parties to whom the
Payor will make all payments on account of the royalty. The Payor will have no
responsibility as to the division of the royalty payments to such parties, and
if the Payor makes a payment or payments on account of the royalty in accordance
with the provisions of this Paragraph 8, it will be conclusively deemed that
such payment or payments have been received by the Payee. All charges of the
agent or trustee will be borne solely by the parties receiving payments on
account of the royalty.
C-4
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
EXHIBIT "D"
INSURANCE
Attached to and made part of that certain Joint Venture Agreement
dated February 1, 2000, by and between
Idaho Consolidated Metals Corporation and
Chrome Corporation of America
The Manager shall, at all times while conducting Operations, comply fully
with the applicable worker's compensation laws and purchase protection for the
Participants comparable to that provided under standard form insurance policies
for (i) comprehensive public liability and property damage with combined limits
of Two Million Dollars for bodily injury and property damage; (ii) automobile
insurance with combined limits of Two Million Dollars; and (iii) adequate and
reasonable insurance against risk of fire and other risks ordinarily insured
against in similar operations. Each Participant may self-insure or purchase for
its own account such additional insurance as it deems necessary.
D-1
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
D-2
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
EXHIBIT "E"
MAP OF AREA OF INTEREST
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
EXHIBIT "F"
NICKEL COPPER LEASE
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
EXHIBIT "G"
CHROME LEASE
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
EXHIBIT "H"
MINING DEED AND ASSIGNMENT
Attached to and made part of that certain Joint Venture Agreement dated February
1, 2000, by and between Idaho Consolidated Metals Corporation and Chrome
Corporation of America.
When Recorded, Return to:
--------------------------
MINING DEED AND ASSIGNMENT
This Mining Deed and Assignment is made as of ____________________ 20__ by
CHROME CORPORATION OF AMERICA, a Delaware corporation (hereinafter called
"Grantor") to MONTANA PGM VENTURE, a Montana joint venture comprised of Chrome
Corporation of America, a Delaware corporation, and Idaho Consolidated Metals
Corporation, a British Columbia corporation (hereinafter called "Grantee").
KNOW ALL MEN BY THESE PRESENTS that Grantor, for and in consideration of $10.00
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by Grantor, does hereby grant and convey to Grantee all
of the right, title and interest of the Grantor in and to the patented and
unpatented lode, tunnel site and placer claims in Stillwater and Sweet Grass
Counties, Montana, more particularly described in Exhibit A (hereinafter
collectively called the"Properties").
FURTHER, Grantor does hereby grant, convey, assign and transfer to Grantee all
of the right, title and interest of the Grantor in and to those certain mineral
leases more particularly described in Exhibits D and E attached hereto
(hereinafter collectively called the "Underlying Agreements") concerning parts
of the Properties.
TOGETHER WITH all and singular the tenements, hereditaments and appurtenances
H-1
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
thereunto belonging or in anywise appertaining, including all extralateral
rights and all ores, waste and rock therein or thereon, and together with all
right, title and interest therein which Grantor may hereafter acquire.
EXCEPTING AND RESERVING unto Grantor and to Grantor's successors and assigns the
chromite, ferrochromium and chromium minerals within Units G and H (as described
in Exhibit C attached hereto) of the Properties, together with the right to
explore for, develop and commercially exploit such minerals, subject to the
limitations and restrictions as hereinafter set forth (hereinafter called the
"Chrome Project").
SUBJECT TO current taxes, assessments, reservations in patents, and the
Underlying Agreements.
GRANTOR REPRESENTS AND WARRANTS to Grantee that Grantor has full power and
authority to execute this Deed and to transfer and assign the Underlying
Agreements.
1. Grantor further represents and warrants to Grantee the following as
of the date hereof:
(a) Grantor is a corporation duly organized and validly existing
under the laws of the State of Delaware qualified to transact
business in the State of Montana and has the requisite power and
authority to convey the Properties in accordance with the terms
of this Deed.
(b) The person(s) executing this Deed on behalf of Grantor is (are)
duly authorized so to do.
(c) Grantor is the sole holder of the lessee's interest, as
applicable, under the Underlying Agreements.
(d) The Underlying Agreements are valid leases and Grantor has the
right to extend the Underlying Agreements as noted in Exhibits D
and E.
(e) To the best of Grantor's knowledge and belief with respect to
unpatented mining claims set forth in Exhibit A and that are
included within the Properties, subject to the paramount title
of the United States and except as disclosed in writing to the
Grantee:
H-2
(i) the unpatented mining claims were properly laid out and
monumented;
(ii) all required location and validation work was properly
performed;
(iii) location notices and certificates were properly recorded
and filed with appropriate governmental agencies;
(iv) the claims are free and clear of defects, liens and
encumbrances arising by, through or under Grantor,
except those of record, state and federal environmental
and development laws, rules and regulations, or
disclosed in writing to Grantee as listed in Exhibits D
and E and in this Agreement and defects, liens, and any
such encumbrances that do not materially affect
Grantee's rights under this Agreement;
(v) Grantor has not received notice from anyone asserting
conflicting claims; and
(vi) the unpatented mining claims are in good standing and
compliance with all federal and state regulations in
force as of the effective date of this Agreement.
Nothing in this paragraph, however, shall be deemed to be a
representation or a warranty that any of the mining claims
contains a discovery of minerals.
(f) Grantor knows of no violation of any applicable federal, state,
regional, or county law or regulation relating to zoning, land
use, environmental protection, or otherwise with respect to the
Properties or activities relating thereto; and,
(g) With respect to the Properties, Grantor knows of no pending or
threatened actions, suits, claims or proceedings.
2. Grantor, as owner of the Chrome Project and its successors and
assigns of all or any part thereof or interest therein, shall have
the following rights and privileges and shall be bound by the
following covenants, conditions and restrictions:
H-3
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
(a) Neither Grantor with respect to the Chrome Project nor Grantee
with respect to its operations on or in the Properties, shall be
required or permitted to share improvements, workings,
facilities or equipment with the other except upon the express
written consent of the parties.
(b) Grantee shall have the right but not the obligation to cure any
default of Grantor under the Underlying Agreements as such
default pertains to the Chrome Project in acordance with the
provisions of Section 3 of this Article.
3. Any failure or loss of title to the Properties, and all costs of
defending title, shall be paid by the Grantee, except that all costs
and losses arising out of or resulting from breach of the
representations and warranties of Grantor shall be charged to
Grantor and all such costs and losses arising out of gross
negligence by Grantee shall be charged to Grantee as the case may
be. Grantee shall have the right, but not the obligation, to
undertake to cure such defects or to defend or to initiate
litigation to defend such defects.
With respect to third party claims:
(a)If Grantor fails to satisfy and discharge any mortgage, lien,
tax levy or encumbrance (an "Encumbrance") chargeable solely
or in part to Grantor on the claims listed on Exhibit A or the
underlying agreements, or suffers or permits any Encumbrance
to be imposed upon such, Grantee at its option may, but shall
not be obligated to, pay for and discharge any Encumbrance and
set off such payment by withholding and retaining from any
payments due Grantor any amounts so paid by Grantee, without
prejudice to any right of Grantee to recover from Grantor the
amount of such payment, in any manner or by any remedy
whatsoever, and Grantee shall have all the rights and remedies
against Grantor which the mortgagor, lienor or creditor had
immediately prior to the time of such payment. Upon the
request of Grantee, Grantor shall promptly make, execute,
acknowledge and deliver to Grantee any and all instruments (in
a form and substance satisfactory to Grantee) that Grantee in
its sole judgment may deem necessary or desirable to fully
effectuate the provisions of this paragraph.
(b)If any person or entity not a party hereto asserts to have a
claim of ownership in the claims listed on Exhibit A or the
Uderlying Agreements, or a claim to a share in the production
from the claims listed on Exhibit A (an "Adverse Claim"),
Grantee at its sole discretion, after written notice to
Grantor, may suspend its obligation to make payments as
provided herein, and in lieu thereof, may deposit in an
interest-bearing account payments equivalent to
H-4
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
payments which may otherwise become due Grantor. Such deposit
or deposits shall remain in such interest-bearing account
until the claim or controversy is resolved or settled by final
court decision, by arbitration, negotiation or otherwise. When
Grantee is required or elects to make any payments to such
persons or entities not a party hereto as a result of, or in
settlement of, any such Adverse Claim, either by way of
contract, settlement, compromise, final court judgment, or
otherwise, Grantee may recover from, or credit against, any
payments thereafter becoming due Grantor hereunder, the amount
of such payments of all other costs and expenses (including
reasonable attorneys fees) paid or incurred by Grantee as a
result of any such Adverse Claim.
DATED: , 20
------------------- ----
CHROME CORPORATION OF AMERICA
a Delaware corporation,
Attest_____________________________
By________________________________________
Xxxxx X. Xxxxxx Xxxxxxxx X. Xxxxxx
Secretary-Treasurer Executive Vice President
H-5
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
STATE OF_______________ )
County of _____________ ) ss.
The foregoing instrument was acknowledged before me on ___________, 20____ by
_________________ as the__________________________of CHROME CORPORATION OF
AMERICA, a Delaware corporation, on behalf of the corporation.
Notary Public
My Commission Expires:
H-6
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
EXHIBIT A
NICKEL/COPPER LEASE
The following patented and unpatented mining claims located in Stillwater
County, State of Montana.
EAST OF THE STILLWATER RIVER WEST OF THE STILLWATER RIVER
(18 Patented Lode Claims) (13 Patented Lode Claims)
Big Ben Red Bird
Lucky T Mountain View
L.T.X. Big Thing
H.E.D. Rough Rock
Copper Rough Rock #2
Gold Tip Brooklyn
Beauty Avalanche
Patent Cataract
Pada #1 New Wabeliski
Pada #2 Summit
Opal Something
Xxxx Stillwater
Emerald Pine
Perseverance (7 Unpatented Lode Claims)
H.R.H. Smelter
Blue Xxx Red Bird #2
Copper Bottom Gap
Xxxxx Xxx
(1 Unpatented Lode Claim) Xxxx
Giant Xxxxxx
Xxxxxxxx
A-1-1
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
CHROME LEASE
The following patented and unpatented mining claims
located in Stillwater and Sweet Grass Counties,
State of Montana.
MOUNTAIN VIEW CLAIMS -
PATENTED MINERAL CLAIM
Bald Eagle
CLAIMS INCLUDED IN PATENT APPLICATION MTM81443
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M XX 00000 SUSU 25 78 Misc. 887 11/07/79 T5S R15E 19
Amended 83 Misc. 744 11/25/81
M XX 00000 SUSU 28 78 Misc. 893 11/07/79 T5S R15E 20
Amended 83 Misc. 750 11/25/81
M XX 00000 SUSU 29 78 Misc. 895 11/07/79 T5S R15E 20
Amended 83 Misc. 752 11/25/81
M XX 00000 XXX 19 76 Misc. 182 5/26/78 T5S R15E 20
Amended 77 Misc. 13 2/26/79
Amended 83 Misc. 533 11/06/81
M XX 00000 XXX 20 76 Misc. 184 5/26/78 T5S R15E 20
Amended 77 Misc. 15 2/26/79
Amended 83 Misc. 535 11/06/81
A-1-2
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M XX 00000 XXX 21 76 Misc. 186 5/26/78 T5S R15E 20
Amended 77 Misc. 17 2/20/79
Amended 83 Misc. 537 11/06/81
M MC 186404 Xxxxx 0 Xxxx 00 000 9/24/91 T5S R15E 19
M MC 186405 Xxxxx 0 Xxxx 00 000 9/24/91 T5S R15E 19
M MC 186406 Xxxxx 0 Xxxx 00 000 9/25/91 T5S R15E 19
M MC 186407 Xxxxx 0 Xxxx 00 000 9/24/91 T5S R15E 19/20
M MC 186408 Xxxxx 0 Xxxx 00 000 9/25/91 T5S R15E 19/20
M MC 186409 Xxxxx 0 Xxxx 00 000 9/25/91 T5S R15E 19/20
M MC 186410 Xxxxx 0 Xxxx 00 000 9/29/91 T5S R15E 20
M MC 186411 Xxxxx 0 Xxxx 00 000 9/27/91 T5S R15E 20
M MC 186412 Xxxxx 0 Xxxx 00 000 9/27/91 T5S R15E 20
M MC 186413 Xxxxx 00 Xxxx 00 000 9/29/91 T5S R15E 20
M MC 186414 Xxxxx 00 Xxxx 00 000 9/27/91 T5S R15E 20
M MC 186415 Xxxxx 00 Xxxx 00 000 9/27/91 T5S R15E 20
M MC 186416 Xxxxx 00 Xxxx 00 000 9/27/91 T5S R15E 20
M MC 186417 Xxxxx 00 Xxxx 00 000 9/27/91 T5S R15E 00
X XX 000000 XXXX XXXXXX 97 238 4/21/92 T5S R15E 20
A-1-3
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
UNPATENTED CLAIMS
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M XX 00000 XXX 1 33 Misc. 445-446 10/30/67 T5S R15E 21
Amended 76 Misc. 146
Amended 76 Misc. 930
Amended 82 Misc. 767
M XX 00000 XXX 2 33 Misc. 447-448 10/30/67 T5S R15E 21
Amended 76 Misc. 148
Amended 76 Misc. 932
Amended 82 Misc. 765
M XX 00000 XXX 3 33 Misc. 449-450 10/30/67 T5S R15E 21
Amended 76 Misc. 150
Amended 76 Misc. 934
M XX 00000 XXX 13 00 Xxxx. 000 X0X X00X 20
Amended 77 Misc. 1
Amended 83 Misc. 525
M XX 00000 XXX 14 00 Xxxx. 000 X0X X00X 20
Amended 77 Misc. 3
Amended 83 Misc. 527
M XX 00000 XXX 15 00 Xxxx. 000 X0X X00X 20NE/4
Amended 77 Misc. 5
Amended 83 Misc. 529
M XX 00000 XXX 16 00 Xxxx. 000 X0X X00X 20NE/4
Amended 77 Misc. 7
Amended 83 Misc. 531
A-1-4
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M XX 00000 XXX 17 00 Xxxx. 000 X0X X00X 20NE/4
Amended 77 Misc. 9
Amended 82 Misc. 698
M XX 00000 XXX 18 00 Xxxx. 000 X0X X00X 20
Amended 77 Misc. 11
M XX 00000 XXX 25 00 Xxxx. 000 X0X X00X 17
Amended 77 Misc. 25
Amended 84 Misc. 82
M XX 00000 XXX 112 00 Xxxx. 000 X0X X00X 21/28
Amended 77 Misc. 159
M XX 00000 XXX 113 00 Xxxx. 000 X0X X00X 21/28
Amended 77 Misc. 161
M XX 00000 XXX 114 00 Xxxx. 000 X0X X00X 21/28
Amended 77 Misc. 163
M XX 00000 XXX 115 00 Xxxx. 000 X0X X00X 21/28
Amended 77 Misc. 165
M XX 00000 XXX 116 00 Xxxx. 000 X0X X00X 21/28
Amended 77 Misc. 167
M XX 00000 XXX 117 00 Xxxx. 000 X0X X00X 21/28
Amended 77 Misc. 169
A-1-5
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M XX 00000 XXX 125 76 Misc. 744 T5S R15E 21
Amended 77 Misc. 183
M XX 00000 XXX 126 76 Misc. 742 T5S R15E 21
Amended 77 Misc. 185
M XX 00000 GYPSUM 0 Xxxx. 000 X0X X00X 15, 16
M XX 00000 DUKE 00 Xxxx. 000 X0X X00X 15, 16
M XX 00000 XXX 3 fr. 00 Xxxx. 000-000 X0X X00X 29/30
M XX 00000 XXX 4 58 Misc. 452-453 T5S R15E 29
M MC 35962 XXX 4A 59 Misc. 53- 54 T5S R15E 20/29
M XX 00000 XXX 5 58 Misc. 454-455 T5S R15E 20/29/19
M XX 00000 XXX 5A 59 Misc. 55- 56 T5S R15E 19/20
M XX 00000 XXX 6 59 Misc. 26- 27 T5S R15E 19/30
M XX 00000 XXX 6A 59 Misc. 57- 58 T5S R15E 19
M XX 00000 XXX 7 59 Misc. 28- 29 T5S R15E 19/30
M XX 00000 XXX 8 59 Misc. 33- 34 T5S R15E 30
M XX 00000 XXX 9 59 Misc. 35- 36 T5S R15E 19/30
M XX 00000 XXX 10 59 Misc. 37- 38 8/14/67 T5S R15E 19SW/4
M XX 00000 XXX 11 59 Misc. 39- 40 8/14/67 T5S R15E 19W/2
M XX 00000 XXX 12 59 Misc. 41- 42 T5S R15E 19
M XX 00000 XXX 13 59 Misc. 43- 44 T5S R15E 19
M XX 00000 XXX 14 59 Misc. 45 T5S R14&15E 19&24
M XX 00000 XXX 15 59 Misc. 47 T5S R14&15E 19/24
M XX 00000 XXX 39 59 Misc. 187-188 T5S R15E 19/30
M XX 00000 XXX 44 59 Misc. 197-198 T5S R15E 21
M XX 00000 GAY 1 65 Misc. 104-105 T5S R15E 21
Amended 82 Misc. 676-677
A-1-6
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M XX 00000 GAY 2 65 Misc. 106-107 T5S R15E 21
Amended 82 Misc. 678-679
M XX 00000 GAY 6 65 Misc. 114-115 T5S R15E 20/21
Amended 82 Misc. 684-685
M XX 00000 GAY 7 65 Misc. 116-117 T5S R15E 20/21
Amended 82 Misc. 686-687
M XX 00000 GAY 11 65 Misc. 124-125 T5S R15E 20
Amended 82 Misc. 692-693
M XX 00000 GAY 12 65 Misc. 126-127 T5S R15E 20
Amended 82 Misc. 694-695
M XX 00000 GAY 15 65 Misc. 132-133 T5S R15E 19/20
Amended 83 Misc. 523-524
M XX 00000 GAY 16 65 Misc. 134-135 T5S R15E 17/18/19/20
Amended 84 Misc. 80- 81
M MC 36360 Book Tunnel 00 Xxxx. 000 X0X X00X 19
& Tunnel Site
A-1-7
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M MC 36376 Mountain View 34 Misc. 513-514 T5S R15E 20
Chrome Co.
M XX 00000 No. 5 Tunnel 00 Xxxx. 000 X0X X00X 19
& Tunnel Site
M MC 36385 Monte Alto 7 159 T5S R15E 20/21
M XX 00000 MIN No. 2 22 6 T5S R15E 28
M XX 00000 MIN Xx. 0 00 00- 00 X0X X00X 28
M XX 00000 Xxxx 0 000 X0X X00X 21
M MC 00000 XXX 00 000 X0X X00X 21/28
M XX 00000 Red Bird No. 3 8 169 T5S R15E 29
M XX 00000 XXXX X. 7 Misc. 118 7/11/18 T5S R15E 21W/2
Amended 24 Misc. 287 10/17/41
M XX 00000 Xxxx 24 Misc. 574 7/27/42 T5S R15E 19SW/4
M XX 00000 XXX Xx. 0 00 0 X0X X00X 28/21
M XX 00000 Verdi Placer 24 Misc. 513 7/27/42 T5S R15E 19S/2
M XX 00000 SUSU 16 00 Xxxx. 000 X0X X00X 19
Amended 83 Misc. 726
M XX 00000 SUSU 17 00 Xxxx. 000 X0X X00X 19N/2
Amended 83 Misc. 728
M XX 00000 SUSU 18 00 Xxxx. 000 X0X X00X 19N/2
Amended 83 Misc. 730
M XX 00000 SUSU 19 00 Xxxx. 000 X0X X00X 19N/2
Amended 83 Misc. 732
M XX 00000 SUSU 20 78 Misc. 877 11/07/79 T5S R15E 19N/2
Amended 83 Misc. 734 11/25/81
M XX 00000 SUSU 21 78 Misc. 879 11/07/79 T5S R15E 19N/2
Amended 83 Misc. 736 11/25/81
M XX 00000 SUSU 22 78 Misc. 881 11/07/79 T5S R15E 19NE/4
Amended 83 Misc. 738 11/25/81
M XX 00000 SUSU 23 78 Misc. 883 11/07/79 T5S R15E 19NE/4
Amended 83 Misc. 740 11/25/81
A-1-8
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
M XX 00000 SUSU 24 78 Misc. 885 11/07/79 T5S R15E 19NE/4
Amended 83 Misc. 742 11/25/81
M XX 00000 SUSU 26 78 Misc. 889 11/07/79 T5S R15E 19NE/420NW/4
Amended 83 Misc. 746 11/25/81
M XX 00000 SUSU 27 78 Misc. 891 11/07/79 T5S R15E 19NE/420NW/4
Amended 83 Misc. 748 11/25/81
M XX 00000 XXX fr. 33 Misc. 443-444 10/30/67 T5S R15E 21
Amended 82 Misc. 877
M XX 00000 GAY fr. 00 Xxxx. 000-000 X0X X00X 21
M XX 00000 XXX 00 00 00 X0X X00X 20
A-1-9
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
Located in Stillwater and Sweet Grass Counties, Montana
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M XX 00000 XXX 16 59 Misc. 49 T5S R14&15E 19/24
M XX 00000 XXX 17 59 Misc. 59 T5S R14&15E 19/24
Amended 83 Misc. 754
M XX 00000 XXX 18 59 Misc. 61 T5S R14&15E 19/24
Amended 83 Misc. 756
M XX 00000 XXX 40 59 Misc. 189 T5S R14&15E 19/24
M XX 00000 XXX 41 59 Misc. 191 T5S R14&15E 19/24
Amended 83 Misc. 758
A-1-10
Montana PGM Venture Agreement February 1, 0000 XXXXXXXXXXXX
XXXXXXXX XXXXX CLAIMS
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M MC 128417 RAM 1 44 297 9/17/86 T5S R14E 21
M MC 128418 RAM 2 44 301 9/17/86 T5S R14E 21
M MC 128420 RAM 4 44 241 9/19/86 T5S R14E 20/21
M XX 000000 RAM 5 44 243 9/19/86 T5S R14E 21
M MC 128423 RAM 7 44 247 9/21/86 T5S R14E 20
M MC 128424 RAM 8 44 249 9/21/86 T5S R14E 20/21
M XX 000000 RAM 11 44 255 9/22/86 T5S R14E 20
M MC 128428 RAM 12 44 257 9/22/86 T5S R14E 20
M MC 128430 RAM 14 44 261 9/24/86 T5S R14E 19/20
M XX 000000 RAM 15 44 263 9/24/86 T5S R14E 19/20
M XX 000000 RAM 17 44 237 9/17/86 T5S R14E 21 SE/4
Amended 44 341 6/18/87
M XX 000000 RAM 18 44 239 9/17/86 T5S R14E 21 SE/4
Amended 44 337
M MC 128435 RAM 19 44 267 9/27/86 T5S R14E 18/19
M XX 000000 RAM 20 44 269 9/27/86 T5S R14E 20 NW/4
Amended 44 339 T5S R14E 17 SW/4
M XX 000000 RAM 24 44 277 9/27/86 T5S R14E 18
M MC 134180 RAM 44 44 363 6/20/87 T5S R14E 20 NW/4
M XX 000000 RAM 45 44 365 6/20/87 T5S R14E 00 X/0
X-0-00
Xxxxxxx XXX Xxxxxxx Agreement February 1, 2000 CONFIDENTIAL
A-1-12
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
EXHIBIT B
UNDERLYING AGREEMENTS
1. Lease Agreement dated August 5, 1988 and subsequent amendments by and
between Xxxxxxx X. XX XXXXXX, individually and as trustee under the 1985
Xxxxxxxx X. Xx Xxxxxx Living Trust, Xxxxxxx X. XXXXX, individually and as
trustee, Xxxx X. XXXXX, Xxxxxx X. XXXXX, Xxxxx X. XXXXXXXX, Xxx XXXX,
Xxxxxxx XXXXXX, Xxxx XXXXXXXX, Xxxxxxx XXXXX, Xxxx X. XXXXXXX and Xxxxx X.
XXXXXXX, Xxxxxx XXXXX, Xxxxx XXXXX, Xxxxx X. XXXXXXXX and XXXXX NICKEL
MINES, INC. (collectively as the Lessors) and CHROME CORPORATION OF
AMERICA, INC., a Delaware corporation (lessee) concerning patented and
unpatented mining claims and tunnel sites in Stillwater and Sweet Grass
Counties, Montana, for which a Notice of Lease Agreement was recorded
November 2, 1988 in Misc. Book 94, page 44, records of Stillwater County,
Montana and recorded November 21, 1988 in Misc. Book 59, page 22, records
of Sweet Grass County, Montana. A copy of this lease (with amendments) is
attached as Exhibit E.
2. Lease Agreement dated January 18, 2000 by and between XXXXX NICKEL MINES
INC., Xxxxxxx X. XXXXX, individually and as Trustee, and FORT STOCKTON
INVESTMENTS, INC. (collectively as the Lessors) and CHROME CORPORATION OF
AMERICA, a Delaware corporation (Lessee) concerning patented and
unpatented mining claims in Stillwater County, Montana covering 31
patented claims and eight unpatented claims. A copy of this lease is
attached as Exhibit D.
A-1-13
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
A-1-14
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
EXHIBIT C
THE CHROME PROJECT
The Chrome Project will be the exploration, development, mining and processing
of Chrome from the historically defined G and H chromitite units, as they are
presently known, extending along a strike length of approximately 13 miles
within the Properties.
The G and H chromitite units are the Chrome bearing seams within the Properties
that have been historically mined for Chrome and for which commercial production
records are available. These units are characterized by the fact that in any
particular section they:
o Generally occur stratigraphically in the middle of the ultramafic
series (Page and Nockleburg 1979, Xxxxxxx, et. al. 1986).
o Are the thickest and laterally most persistent units.
o Have distinctive Cr/Fe ratios which average 1.78.
o Have a very low (less than .5 ppm) sulfur content and low to
non-detectable Platinum Group Metals geochemical values.
o Have a distinctive sulfur-deficient chondrite normalized signature.
Capitalized words above have the same meaning as attributed to them in the
Agreement to which this Exhibit is attached.
The foregoing chemical data represent the current best understanding of the
parties, and although accurate as of the Effective Date, they may not remain
entirely accurate over time.
A-1-15
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
A-1-16
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
EXHIBIT D
THE NICKEL/COPPER LEASE
As per Exhibit F of Joint Venture Agreement
A-1-17
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
A-1-18
Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
EXHIBIT E
THE CHROME LEASE
As per Exhibit G of Joint Venture Agreement
A-1-19
EXHIBIT 10.03
XXXXX FAMILY STILLWATER COMPLEX MINERAL CLAIMS
REVISED AGREEMENT DATED MAY 1, 1999
This REVISED AGREEMENT (the "1999 Agreement") is made and entered into effective
this first day of March 1999 by and between the Lessors to the 1996 AMENDED
EXTENSION AGREEMENT (the "1996 Agreement"), their successors and assigns and
Chrome Corporation of America Inc., a Delaware corporation ("CCA"), as Lessee.
This 1999 Agreement further amends and extends the 1996 Agreement. All
definitions as used or referenced in the 1996 Agreement apply unless amended
herein.
CCA therefore advises that:
CCA shall continue to hold its 100% leasehold interest in the chromite
claims identified in the Amended Extension Agreement to the Lease
Agreement dated August 5, 1988 and according to the terms of that
Agreement subject only to the following:
(i) CCA will continue to pay all government imposed fees
(presently set at $100 per claim) required to maintain the
unpatented mineral claims in good standing.
(ii) CCA will continue to pay for the annual spraying of noxious
weeds as required by law.
(iii) Item 3. on Page 2 of the 1996 Amended Extension Agreement
(Payment of Lease Fees) is deleted.
(iv) Item 4. on Page 2 of the 1996 Amended Extension Agreement
becomes Item 3 and shall read as follows:
"Upon a decision to commence construction leading to
production CCA will pay the Xxxxx group a one time payment of
US five hundred thousand dollars ($500,000) which will
automatically extend the 1999 Agreement to August 5, 2006".
Item (iv) above brings forward a lump sum payment to the time of the decision to
commence construction leading to production rather than delay until production
commences. In addition, the payment is increased from $100,000 to $500,000 to
compensate for the elimination of the payment of an annual lease fee.
This 1999 Agreement may be executed in counterpart, and shall be binding upon
each party upon execution by that party, and shall be effective as if all
parties had signed the same document. The parties to this 1999 Agreement have
caused this Agreement to be duly executed as of the day and year first above
written.
Revised Agreement Dated May 1, 1999
LESSEE:
Chrome Corporation of America
Attest:
[ILLEGIBLE SIGNATURE] Xxxxxxxx X . Xxxxxx
Executive Vice President
Dated: 4/29/99
LESSORS:
Fort Stockton Investments, Inc.
Laurenne Xxx X'Xxxxxxx
President
Dated:
Xxxxx Nickel Mines, Inc.
Laurenne Xxx X'Xxxxxxx
President
Dated:
Revised Agreement Dated May 1, 1999
Xxxxxxx X. Xxxxx Xxxx X. xx Xxxxxx
Xxxx X. Xxxxx Xxxxxx X. Xxxxx
Xxxxx X. Xxxxxxxx Xxxxx Xxxx
Xxxxxx X. Xxxxxx Xxxx Xxxxxxxx
Xxxxxxx Xxxxx Xxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx Xxxxxx Xxxxx
Xxxxxx X. Xxxxx Xxxxx X. Xxxxxxxx
EXHIBIT 10.04
AMENDED EXTENSION AGREEMENT TO LEASE AGREEMENT DATED
AUGUST 5, 1988
This AMENDED EXTENSION AGREEMENT (the "1996 Agreement") is made and entered into
effective this fifth day of August 1996 by and between the Lessors to the 1988
Lease Agreement dated August 5, 1988 (the "1988 Lease"), their successors and
assigns and Chrome Corporation of America, Inc., a Delaware corporation,
("CCA"), as Lessee. This 1996 Agreement further amends and extends the 1988
Lease and all definitions as used in the 1988 Lease apply unless amended herein.
CCA continues to focus on the production of chromite from the Mt. View area in
the Stillwater Complex, Montana. As previous lessees have experienced, this task
is not easy even though the Mt. View area is the most accessible and easily
mined chromite resource in the Stiliwater Complex. Although the Xxxxxx area
hosts significant chromite, it will not be mined in advance of the Mt. View
resource.
The 1988 Lease was modified and extended in 1991 and again in 1993. After
dropping claims in 1993 and 1996, and as intimated in the August 2, 1996 letter
from CCA (the "1996 Letter"-attached), CCA will lease those certain patented and
unpatented mining claims, mill and tunnel sites as listed in:
o Attachment A -
21 mineral claims that are the subject of the Xxxxx patent application.
CCA will pay the filing fees for these claims although as you
appreciate, and as in previous years, these fees are paid under
protest.
o Attachment B -
83 unpatented claims that CCA wishes to retain in this 1996 Amended
Extension Agreement. These claims cover chromite mineralization west of
the Stillwater River. CCA has paid the 1996/97 rentals for these
claims.
Attachments C and D list those Xxxxx and CCA claims being relinquished by CCA.
o Attachment C -
36 unpatented Xxxxx lode claims have been relinquished. These include
isolated mineral claims in Xxx Basin that should have been returned to
the Xxxxx group along with the mineral claims CCA relinquished in 1993.
In addition, Attachment C includes a block of chrome claims east of the
Xxxxxx patented claim group. CCA believes that these claims do not have
a short-to-medium term economic justification for retention.
Amended Extension Agreement Effective August 5, 1996
o Attachment D -
32 unpatented lode claims controlled independently by CCA have been
relinquished. The ART claims covered the eastern limits of the
Stillwater Complex in the Fishtail Creek area where it is concealed
beneath thick glacial overburden. The Roo claims are claims formerly
controlled by Cyprus Minerals that hold a significant, low grade Ni/Cu
resource. These claims are centered on Chrome Lake. CCA believes that
neither claim group has value at this time.
The Xxxxx claims included in, and subject to, the 1988 Lease and subsequent
amendments are:
Unpatented Patented
1988 282 11
1993 172 11
1996 104 11
In summary CCA has paid rental fees for a total of 104 Xxxxx group claims west
of the Stillwater River, in return for the Xxxxx group granting an extension to
the 1988 Lease as amended previously and herein.
As part of a telephone conversation between Laurenne Xxx X'Xxxxxxx and CCA on
July 9, 1996 and in the 1996 Letter, CCA indicated that it could not justify
paying the $450,000 deferred extension and advance royalty payments described in
the 1988 Lease. This letter confirms that understanding.
Proposed changes to the 1993 amended lease agreement are:
1. The Subject Properties are those claims in Attachments A & B to this
letter agreement together with the patented claims, water rights and
other rights contained in the 1988 Lease.
2. The extended term is a five year period ending August 5, 2001.
3. The rental payments will be $6,600 per month until production
commences.
4. At the time production commences, CCA will pay the Xxxxx group a one
time payment of $100,000.
5. Production royalties shall remain as per the 1988 Lease except Lessee
can offset 50% (fifty percent) of any royalty payment that might be
required to be paid to the federal government as a result of changes
in the mining law.
Amended Extension Agreement Effective August 5, 1996
6. The parties understand that assessment work is no longer required to
hold the claims listed in Attachments A and B. CCA will pay the annual
rental fees to the federal government as required by law (currently
$100 per claim).
7. Other payments in the 1988 Lease no longer apply.
This 1996 Agreement may be executed in counterparts, and shall be binding upon
each party upon execution by that party, and shall be effective as if all
parties had signed the same document. The parties to this 1996 Agreement have
caused this agreement to be duly executed as of the day and year first above
written.
LESSEE:
Chrome Corporation of America
[ILLEGIBLE SIGNATURE]
SECRETARY Xxxxxxxx X. Xxxxxx
Executive Vice President
Dated: 9/9/96
LESSORS:
Fort Stockton Investments, Inc.
Laurenne Xxx X'Xxxxxxx
President
Dated: 9/18/96
Xxxxx Nickel Mines, Inc.
Laurenne Xxx X'Xxxxxxx
President
Dated: 9/18/96
Xxxxxxx X. Xxxxx Xxxx X. Xxxxxx
Amended Extension Agreement Effective August 5, 1996
Xxxx X Xxxxx Xxxxxx X Xxxxx
Xxxxx X. Xxxxxxxx Xxxxx Xxxx
Xxxxxx Xxxxxx Xxxx Xxxxxxxx
Xxxxxxx Xxxxx Xxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx Xxxxxx Xxxxx
ATTACHMENT A
CLAIMS INCLUDED IN PATENT APPLICATION MTMS 1443
Located in Stillwater County, Montana
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M XX 00000 SUSU 25 78 Misc. 887 11/07/79 T5S R15E 19
Amended 83 Misc. 744 11/25/81
M XX 00000 SUSU 28 78 Misc. 893 11/07/79 T5S R15E 20
Amended 83 Misc. 750 11/25/81
M XX 00000 SUSU 29 78 Misc. 895 11/07/79 T5S R15E 20
Amended 83 Misc. 752 11/25/81
M XX 00000 XXX 19 76 Misc. 182 5/26/78 T5S R15E 20
Amended 77 Misc. 13 2/26/79
Amended 83 Misc. 533 11/06/81
M XX 00000 XXX 20 76 Misc. 184 5/26/78 T5S R15E 20
Amended 77 Misc. 15 2/26/79
Amended 83 Misc. 535 11/06/81
M XX 00000 XXX 21 76 Misc. 186 5/26/78 T5S R15E 20
Amended 77 Misc. 17 2/20/79
Amended 83 Misc. 537 11/06/81
M MC 186404 Xxxxx 0 Xxxx 00 000 9/24/91 TSS R15E 19
M MC 186405 Xxxxx 0 Xxxx 00 000 9/24/91 T5S R15E 19
M MC 186406 Xxxxx 0 Xxxx 00 000 9/25/91 TSS R15E 19
M MC 186407 Xxxxx 0 Xxxx 00 000 9/24/91 T5S R15E 19/20
M MC 186408 Xxxxx S Lode 96 749 9/25/91 T5S R15E 19/20
M MC 186409 Xxxxx 0 Xxxx 00 000 9/25/91 T5S R15E 19/20
M MC 186410 Monat 7 Lode 96 745 9/29/91 T5S R15E 20
M MC 186411 Xxxxx 0 Xxxx 00 000 9/27/91 T5S R15E 20
M MC 186412 Xxxxx 0 Xxxx 00 000 9/27/91 TSS R15E 20
M MC 186413 Xxxxx 00 Xxxx 00 000 9/29/91 T5S R15E 20
M MC 186414 Xxxxx 00 Xxxx 00 000 9/27/91 T5S R15E 20
M MC 186415 Xxxxx 00 Xxxx 00 000 9/27/91 T5S R15E 20
M MC 186416 Xxxxx 00 Xxxx 00 000 9/27/91 TSS R15E 20
M MC 186417 Xxxxx 00 Xxxx 00 000 9/27/91 T5S R15E 00
X XX 000000 XXXX XXXXXX 97 238 4/21/92 TSS R15E 20
ATTACHMENT B
UNPATENTED CLAIMS BEING HELD- 1996
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
Located in Stillwater County, Montana
M XX 00000 AMY1 33 Misc. 445-446 10/30/67 TSS R15E 21
Amended 76 Misc. 146
Amended 76 Misc. 930
Amended 82 Misc. 767
M XX 00000 XXX 2 33 Misc. 447-448 10/30/67 TSS Rl5E 21
Amended 76 Misc. 148
Amended 76 Misc. 932
Amended 82 Misc. 765
M XX 00000 XXX 3 33 Misc. 449-450 10/30/67 TSS R15E 21
Amended 76 Misc. 150
Amended 76 Misc. 934
M XX 00000 XXX 13 76 Misc. 170 TSS R15E 20
Amended 77 Misc. 1
Amended 83 Misc. 525
M XX 00000 XXX 14 76 Misc. 172 TSS R15E 20
Amended 77 Misc. 3
Amended 83 Misc. 527
M XX 00000 XXX IS 76 Misc. 174 TSS R15E 20NE/4
Amended 77 Misc. 5
Amended 83 Misc. 529
M XX 00000 XXX 16 00 Xxxx. 000 X0X X00X 20NE/4
Amended 77 Misc. 7
Amended 83 Misc. 531
M XX 00000 XXX 17 76 Misc. 178 TSS R15E 2ONE/4
Amended 77 Misc. 9
Amended 82 Misc. 698
M XX 00000 XXX 18 76 Misc. 180 TSS R15E 20
Amended 77 Misc. 11
M XX 00000 XXX 25 76 Misc. 188 TSS R15E 17
Amended 77 Misc. 25
Amended 84 Misc. 82
M XX 00000 XXX 112 76 Misc. 441 TSS R15E 21/28
Amended 77 Misc. 159
M XX 00000 XXX 113 00 Xxxx. 000 X0X X00X 21/28
Amended 77 Misc. 161
M XX 00000 XXX 114 76 Misc. 445 TSS R15E 21/28
Amended 77 Misc. 163
M XX 00000 XXX 115 76 Misc. 447 TSS R15E 21/28
Am ended 77 Misc. 165
M MC 11289 XXX 116 76 Misc. 449 TSS R15E 21/28
Amended 77 Misc. 167
M XX 00000 XXX 117 76 Misc. 451 TSS R15E 21/28
Amended 77 Misc. 169
Total Claims listed on this page: 16
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M XX 00000 XXX 125 76 Misc. 744 T55 R15E 21
Amended 77 Misc. 183
M XX 00000 XXX 126 76 Misc. 742 T55 R15E 21
Amended 77 Misc. 185
M MC 351S6 GYPSUM 0 Xxxx. 000 X0X X00X 15, 16
M XX 00000 DUKE 00 Xxxx. 000 X0X X00X 15, 16
M XX 00000 XXX 3 fr. 58 Misc. 450-451 TSS R15E 29/30
M XX 00000 XXX 4 58 Misc. 452-453 T55 R15E 29
M XX 00000 XXX 4A 59 Misc. 53-54 T55 R15E 20/29
M XX 00000 XXX 5 58 Misc. 454-455 T55 R15E 20,29/19
M XX 00000 XXX 5A 00 Xxxx. 00-00 X0X X00X 19/20
M XX 00000 XXX 6 00 Xxxx. 00-00 X00 X00X 19/30
M XX 00000 XXX 6A 00 Xxxx. 00-00 X0X X00X 19
M XX 00000 XXX 7 00 Xxxx. 00-00 X0X X00X 19/30
M XX 00000 XXX 8 00 Xxxx. 00-00 X00 X00X 30
M XX 00000 XXX 9 00 Xxxx. 00-00 X0X X00X 19/30
M XX 00000 XXX 10 00 Xxxx. 00-00 X0X X00X 19SW/4
M XX 00000 XXX 11 59 Misc. 39-40 8/14/67 T5S R15E 19W/2
M XX 00000 XXX 12 59 Misc. 41-42 8/14/67 TSS R15E 19
M MC 3S973 XXX 13 59 Misc. 43-44 TSS R15E 19
M MC 35974 XXX 14 59 Misc. 45 T5S R14&15E 19&24
M XX 00000 XXX 15 00 Xxxx. 00 X0X X00&0XX 19/24
M XX 00000 XXX 39 59 Misc. 187-188 TSS R15E 19,30
M XX 00000 XXX 44 59 Misc. 197-198 T5S R15E 21
M XX 00000 XXXx 65 Misc. 104-105 T5S R15E 21
Amended 82 Misc. 676-677
M XX 00000 GAY 2 65 Misc. 106-107 T55 R15E 21
Amended 82 Misc. 678-679
M XX 00000 GAY 6 65 Misc. 114-115 T55 R15E 20/21
Amended 82 Misc. 684-685
M XX 00000 GAY 7 65 Misc. 116-117 TSS R15E 20/21
Amended 82 Misc. 686-687
M XX 00000 GAY 11 65 Misc. 124-125 T55 R15E 20
Amended 82 Misc. 692-693
M XX 00000 GAY 12 65 Misc. 126-127 TSS R15E 20
Amended 82 Misc. 694-69S
M XX 00000 GAY 15 65 Misc. 132-133 T55 R15E 19/20
Amended 83 Misc. 523-524
M XX 00000 GAY 16 65 Misc. 134-135 TSS R15E 17/18/19/20
Amended 84 Misc. 80-81
M XX 00000 Book Tunnel 24 Misc. 580 TSS R15E 19
& Tunnel Site
M MC 36376 Mountain View 34 Misc. 513-514 TSS R15E 20
Chrome Co.
M XX 00000 No. 5 Tunnel 25 Misc. 247 T55 R15E 19
& Tunnel Site
Total claims listed on this page: 33
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
M XX 00000 Monte Alto 7 159 TSS R15E 20/21
M XX 00000 MIN No. 2 22 6 TSS R15E 28
M XX 00000 MIN Xx. 0 00 00-00 X0X X00X 00
X MC 36393 PINE 8 167 TSS R15E 21
M MC 36394 RAM 25 424 TSS R15E 21/28
M XX 00000 Red Bird No. 3 8 169 T5S R15E 29
M XX 00000 SMELTER 2 385 TSS R15E 21
M MC 36403 XXX 16 325 TSS R15E 21
M XX 00000 Xxxxxx 7 Misc. 242 10/17/18 T5S R15E 20E/2
M XX 00000 XXXX X. 7 Misc. 118 7/11/18 T5S R15E 21W/2
Amended 24 Misc. 287 10/17/41
M XX 00000 GAP 24 Misc. 219 7/31/41 TSS R15E 29
Amended 24 Misc. 290 10/17/41
M XX 00000 Xxxx 24 Misc. 574 7/27/42 T5S R15E 19SW/4
M XX 00000 XXX Xx. 0 00 0 X0X X00X 28/21
M XX 00000 Verdi Placer 24 Misc. 513 7/27/42 T5S R15E 000/0
X XX 00000 XXXX XXXX 7 Misc. 116 7/11/18 TSS R15E?
M XX 00000 SUSU 16 78 Misc. 869 TSS R15E 19
Amended 83 Misc. 726
M XX 00000 SUSU 17 78 Misc. 871 TSS R15E 19Nf2
Amended 83 Misc. 728
M XX 00000 SUSU 18 78 Misc. 873 TSS R15E 19N/2
Amended 83 Misc. 730
M XX 00000 SUSU 19 78 Misc. 875 TSS R15E 19N/2
Amended 83 Misc. 732
M XX 00000 SUSU 20 78 Misc. 877 11/07/79 T5S R15E 19N/2
Amended 83 Misc. 734 11/25/81
M XX 00000 SUSU 21 78 Misc. 879 11/07/79 T5S R15E 19N/2
Amended 83 Misc. 736 11/25/81
M XX 00000 SUSU 22 78 Misc. 881 11/07/79 T5S R15E I9NE/4
Amended 83 Misc. 738 11/25/81
M XX 00000 SUSU 23 78 Misc. 883 11/07/79 T5S R15E 19NE/4
Amended 83 Misc. 740 11/25/81
M XX 00000 SUSU 24 78 Misc. 885 11/07/79 T5S R15E I9NE/4
Amended 83 Misc. 742 11/25/81
M XX 00000 SUSU 26 78 Misc. 889 11/07/79 T5S R15E I9NE/420NW/4
Amended 83 Misc. 746 11/25/81
M XX 00000 SUSU 27 78 Misc. 891 11/07/79 T55 R15E I9NE/420NW/4
Amended 83 Misc. 748 11/25/81
M XX 00000 XXX fr. 33 Misc. 443-444 10/30/67 T5S R15E 21
Amended 82 Misc. 877
M XX 00000 GAY fr. 82 Misc. 879-880 TSS R15E 21
M MC 84655 NEW 13 88 79 TSS R15E 20
Total claims listed on this page: 29
UNPATENTED CLAIMS BEING HELD- 1996
BLM DATE LOCATION
SERIAL OF OF
NUMBER NAME BOOK PAGE LOCATION CLAIM
Located in Stillwater and Sweet Grass Counties, Montana
M MC 35976 XXX 16 59 Misc. 49 T5S R14&15E 19/24
M XX 00000 XXX 17 59 Misc. 59 TSS R14&15E 19/24
Amended 83 Misc. 754
M XX 00000 XXX 18 59 Misc. 61 TSS R14&15E 19/24
Amended 83 Misc. 756
M XX 00000 XXX 40 59 Misc. 189 TSS R14&1SE 19/24
M XX 00000 XXX 41 00 Xxxx. 000 X0X X00&0XX 19/24
Amended 83 Misc. 758
Located Entirely in Sweet Grass County, Montana
M MC 128417 RAM 1 44 297 9/17/86 T5S R14E 21
M MC 128418 RAM 2 44 301 9/17/86 T5S R14E 21
M MC 128420 RAM 4 44 241 9/19/86 T5S R14E 20/21
M XX 000000 RAM 5 44 243 9/19/86 T5S R14E 21
M MC 128423 RAM 7 44 247 9/21/86 T5S R14E 20
M MC 128424 RAM 8 44 249 9/21/86 TSS R14E 20/21
M XX 000000 RAM 11 44 255 9/22/86 T5S R14E 20
M MC 128428 RAM 12 44 257 9/22/86 TSS R14E 20
M MC 128430 RAM 14 44 261 9/24/86 TSS R14E 19/20
M XX 000000 RAM 15 44 263 9/24/86 T5S R14E 19/20
M XX 000000 RAM 17 44 237 9/17/86 TSS R14E 21 SE/4
Amended 44 341 6/18/87
M XX 000000 RAM 18 44 239 9/17/86 T5S RI4E 21 SE/4
Amended 44 337
M MC 128435 RAM 19 44 267 9/27/86 TSS RI4E 18/19
M MC 128436 RAM 20 44 269 9/27/86 TSS R14E 20 NW/4
Amended 44 339 TSS R14E 17 SW/4
M XX 000000 RAM 24 44 277 9/27/86 TSS R14E 18
M MC 134180 RAM 44 44 363 6/20/87 TSS R14E 20 NW/4
M XX 000000 RAM 45 44 365 6/20/87 TSS R14E 20 N/2
Total claims listed on this page: 22
CHROME CORPORATION OF AMERICA
00000 X. Xxxxx Xxxxx Xxxxx X
Xxxxxxxx, Xxxxxxxx 00000
(000) 000-0000 Fax: (000) 000-0000
August 2,1996
Via Fax and Federal Express
Xx. Xxxxxxx X. Xxxxx, Trustee
0000 Xxxxx Xxx. X.
Xxxxxxxx, XX 00000
Dear Xxxx-
As explained in my phone message today, Alistair planned to negotiate with you
the extension of the Stiliwater lease which expires August 5, 1996 upon his
return from his trip to Australia and New Zealand. Alistair decided to extend
his time in New Zealand by a week in order to have more time with his mother and
will not return until August 7th.
As Alistair indicated in prior conversations with you and other parties to the
lease, Chrome Corporation of America wishes to extend this lease on the same
basis as the current lease with the exception of probably dropping some of the
claims from the lease and eliminating the $450,000 payment.
In order to give Alistair time to return to the states and to meet with you in
Billings, I recommend we extend the lease for a one-month period. We will make a
$6,600 payment this month.
If you are in agreement with this, please sign the acknowledgement and return
one copy for our files.
Sincerely,
Chrome Corporation of America
Xxxxx X. Xxxxxx , Treasurer
Acknowledeement
The undersigned, as Trustee for all Lessors, agrees that the Lease entered into
August 5, 1988 by and between Xxxxxxx X. xx Xxxxxx, et. al. and Chrome
Corporation of America should be extended for a one month period.
Dated: August 5, 1996
XXXXXXX X. XXXXX
Trustee for all Lessors
LAW OFFICES
XXXXXXX X. XXXXX
SUITE 817
WESTERN FEDERAL SAVING BUILDING
BILLINGS, MONTANA 59101
TELEPHONE:(000) 000-0000
FAX Number: (000) 000-0000
FACSIMILE COVER SWEET
TO: Xxxxxxxx Xxxxxx - Boulder Gold
Location: Lakewood, Colorado
FAX Number: (000) 000-0000
Today's Date: 7/16/93
Time: 9:00 AM
Number of Pages (including Cover Sheet): 2
The accompanying letter was mailed to members of the xxxxx group on 7/23/93
XXXXXXX X. XXXXX
LAW OFFICES
XXXXXXX X. XXXXX
SUITE 817
WESTERN FEDERAL SAVING BUILDING
BILLINGS, MONTANA 59101
TELEPHONE:(000) 000-0000
FAX Number: (000) 000-0000
FACSIMILE COVER SWEET
TO: Xxxxx Xxxxx
KPMG - Peat Marwick
2300 ARCO Tower
000 - 00xx. Xxxxxx
Xxxxxx, XX 00000
Location:
FAX Number: (000) 000-0000
Today's Date: 8/20/93 Time: 10:15 A.M.
Number of Pages (Including Cover Sheet) 1
The Lease dated August 5, 1989, between Chrome Corporation of America,
Inc., as Lessee and the Xxxxx group as Lessors, has been modified effective
August 5, 1993, to continue the lease payments of $6,600 per month for three
years, to drop some of the claims from the lease and to defer the $450,000
payment due August 5, 1993, for three years, subject to further discussion.
XXXXXXX X. XXXXX
for the Xxxxx Group
July 23, 1993
To: All interest holders in claims leased to Chrome Corp.:
Enclosed is a letter dated July 12, 1993, from Chrome Corporation of
America which I believe is self-explanatory; also, a copy of Report by CCA
reflecting certain work done and progress made by it from the time it leased the
chrome claims from us on August 5, 1988. Also enclosed are copies of letters
from Xx. Xxxxxx dated 7/20/93 and 7/21/93 and received today.
For reasons outlined in the enclosed letters, CCA is requesting that we
grant it some relief from some of the lease requirements, the foremost of which
is the $45O,OO0 due August 5, 1993, and the dropping of some of the claims in
the present lease. CCA proposes to continue making the $6,600 monthly payments
for the term of a proposed 3-year extension of the lease. The claims to be
retained and relinquished are listed in the FAX sheets received today and
enclosed herewith. The list of claims to be retained does not specifically
include the 21 chrome claims included in our present patent application but they
will be retained.
I think we should act quickly on this matter to decide what to do. As
you know, the Government requires that $200 per claim be paid by September 1st
of this year in order to maintain claims in good standing until September 1,
l994. Performing annual assessment work will no longer suffice to hold a
claim. The question of making annual payments in lieu of performing assessment
work to hold claims in the future is uncertain after September 1, 1994. We
only know that it applies now for the years ending September 1, 1993 and
September 1, 1994.
COA's letter dated July 12, 1993, recites that "The $450,000 due this
August 5th cannot be justified". I do not know whether or not CCA would be
willing to defer for 3 years the present requirement of making this payment or
whether they want to eliminate it altogether. We should suggest the deferment
rather than the elimination of this requirement. (See Xx. Xxxxxx'x reference to
this matter in his letter dated 7/20/93).
Xx. Xxxxxx, in his 7/12/93 letter, refers to our group as the Xxxxx
Estate. This term is not precisely correct, but we realize it is intended to
mean the Xxxxx group who leased the claims to Boulder Gold on August 5, 1988.
It is my impression that if we accept CCA's proposal we will be
extending the term of the lease by three years and dropping certain claims from
the lease that have questionable value. Also, CCA will make the payments to the
Government of $200 per claim this year as rental fee on claims retained, and
will pay, as long as is necessary, the required rental fee on the claims for
which patent application has been made.
The foregoing shall not alter the terms of the 9/14/88 lease except as
herein set forth.
If you agree with CCA's proposal, as modified in this letter, please
indicate your acceptance below, and return the acceptance portion to my office.
Very truly yours,
XXXXXXX X. XXXXX
The foregoing letter dated July 23, 1993, is agreeable and is accepted
this ______ day of ___________, 1993.
CHROME CORPORATION OF AMERICA
00000 X Xxxxx Xxxxx Xxxxx X
Xxxxxxxx, Xxxxxxxx 00000
(000) 000-0000 Fax: (000) 000-0000
Xx. Xxxxxxx X. Xxxxx
Individually and as Trustee
Representing Owners of Stillwater Mining Claims
0000 Xxxxx Xxx. N.
000 Xxxxx Xxxxxxx Xxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Dear Xxxx:
As a result of our discussions during the last two weeks and of
discussions we have had together and separately with the Bureau of Land
Management we agree as follows:
* That certain lands under lease from Xxxxxxx X. Xxxxx and the Xxxxx-Xxxx
and Laurenne--Xxx X'Xxxxxxx family trust (The X'Xxxxxxx Trust) and from
Xxxxxxx X. Xxxxx and individual Mouat family members (Family Group) to
Chrome Corporation of America (CCA) should be surveyed and submitted to
the Bureau of Land Management for an application for patent.
* That you will transfer the two ownerships into a single Trust that would
then make application for the patent. This would greatly simplify the
application process and the following calculations are made on this basis.
It is CCA's recommendation that we immediately begin the work necessary to
patent the Apex Claims defined below and stake four additional claims. Depending
on the outcome of new legislation and the success of the patent application on
the Apex claim, consideration could be given to applying for patent on the
Extralateral Rights Claims. The segregation of the claims into Apex Claims and
Extralateral Rights Claims are as follows:
Apex Claims
The Susu lode claims numbered 25, 28 and 29
The Sun lode claim
The Toe lode claim
The Xxx xxxx claims numbered 19, 20 and 21
The Lake Placer claim
The Soup lode claim
The Westlake lode claim
The Gap lode claim
The Xxxx xxxx claim
The Star lode claim
The Old Lady lode claim
The Xxxxxx lode claim
Xxxxx - Letter - August 5, 1991 Page 2
The Denver lode claim
The Link lode claim
The Skunk lode claim
The Princtons lode claim
The Xxxxx xxxx claim
Extralateral Rights Claims
The Susu lode claims numbered 17, 18, 19, 20, 21, 22, 23, 24,
26 and 27
The Xxx xxxx claims numbered 10 and 11
The Xxxx xxxx claim
The Xxx xxxx claims numbered 15, 16 and 17
The Verdi Placer lode claim
The Apex Claims should have priority over the Extralateral Rights
Claims.
In addition we have discussed the staking of four lode claims; three
lode claims over open areas on the Verdi Placer claim and a fourth lode claim
over a triangular open area east of the Verdi Placer claim. The three claims on
the Verdi Placer should be considered as Apex Claims for patent purposes. The
fourth claim can be considered as an Extralateral Rights Claim.
With these three new Apex Claims a total of 23 lode claims and one
placer claim are considered high priority for patent purposes.
It was confirmed by Xx. Xxxx Xxxxxxxx of the Bureau of Land Management,
Billings Office, that fees for application for a cadastral survey prior to an
application for patent are $700 for the first claim and $500 for each subsequent
claim in a contiguous group that has common ownership. However, because of
timing, the four claims that should be staked within the open areas would need
to be applied for patent in two separate and subsequent applications because
they are not contiguous. Three claims in the Verdi Placer claim would constitute
one application and the fourth claim, to the east, a second. It is anticipated
that each existing claim will cost $1,500 to survey and that each of the four
new claims will cost $2,000 to stake and survey.
Therefore, upon approval by the new Trustee, three applications will be
required for all claims to be patented. The costs of applying for the survey and
the survey costs are estimated as follows:
Apex and Extralateral Rights Claims
One application (38 claims) Application fees $19,200
Survey costs 57,000
------
76,200
Xxxxxxx X. Xxxxx - Letter - August 5, 1991 Page 3
New Claims
----------
1st Application (3 claims) Application fees $ 1,700
Survey costs 6,000
-----------
7,700
2nd Application (1 claim) Application fees $ 700
Survey costs 2,000
-----------
2,700
-----------
Combined Total $86,600
===========
If all claims were to be applied for patent total combined costs are
estimated to be $86,600. This is without any title work, patent application
fees, organizational, management, supervision, and administrative costs.
If we separate the Apex Claims from the Extralateral Rights Claims and
apply for patents on the Apex Claims only, the following costs would apply:
Apex Claims
One application (21 claims) Application fees $10,700
Survey costs 31,500
-----------
42,200
New Claims
1st Application (3 claims) Application fees $ 1,700
Survey costs 6,000
-----------
7,700
-----------
$49,900
===========
Survey for patent application fees and survey costs, without
considering title, organizational, management, supervision, and administrative
costs are therefore $49,900.
If we were to concentrate on patenting only the Apex Claims and
staking the four new claims on the open areas, there would be money left to
complete the title work on all of the claims. Assuming we spend $49,900 for
filing applications, surveying and staking the Apex Claims and the New Claims,
there would be $29,300 left to apply towards the title work. This equates to
$700 for each of the 42 claims.
It is our belief that the incremental costs of doing the title work on
the Extralateral Rights Claims at the same time the work is being done on the
Apex Claims would not be very great. Once this title work is done on the
Extralateral Rights Claims, we should be able to inexpensively update the
information and get actual certificates issued when we decide to patent these
claims.
Xxxxxxx X. Xxxxx - Letter - August 5, 1991 Page 4
CCA, as lessor, has no long term interest in these mineral claims upon
termination of the lease agreement dated 5th August 1988. The successful
completion of the patent process does, however, inure to the benefit of the
ownership groups. CCA therefore believes that the ownership groups should be
responsible for costs involved in the patent process in order that they may
guarantee their rightful long term potential for income from future royalties on
chrome and platinum group mineral production.
According to our existing 1988 agreement CCA's lease fees due August
5, 1991 are $75,000. We propose that:
* CCA pays a total of $6,600 per month which represents the amortization
of the $75,000 rental payment over a twelve month period. The
effective annual interest rate is about 10.2% compounded monthly. The
first payment will be made immediately upon acceptance of the terms of
this letter.
* From the monthly payments, the Trust will pay the agreed upon patent
costs as they become due. If the cumulative payments CCA has made at
any time throughout the year do not equal or exceed the expenses the
Trust is incurring to proceed with the patent process, CCA will make
up any difference and recover that difference from future monthly
payments due to the Trust.
* The Trust's exposure for patent costs shall not exceed the cumulative
payments made to the Trust during the year. It is also agreed that
both parties will endeavor to restrict the total costs spent in the
next twelve months on this project to $79,200.
* CCA will provide its administrative and technical services at no cost.
* Expenditures, if any, that are additional to the costs agreed upon in
this letter and that may arise in the future in connection with the
patenting process must be agreed upon by all parties to this agreement
before being incurred.
Between 1962 and 1988 the Xxxxx family interests in the chromite
resource in the Stillwater Complex languished. Since 1985 CCA has aggressively
pursued the economic production of chromite from the Xxxxx interests claim
blocks through drilling to increase reserves, researching new technology for the
economic production of chromium products, rehabilitating existing mine openings,
undertaking extensive environmental base--line studies and drill testing new
potential resources including platinum group minerals. CCA has added
considerable value to the Xxxxx interests in the Stillwater Complex. It and its
joint venture partners have spent in excess of $10,000,000 in pursuing the goal
of production profitable to all parties.
Xxxxxxx X. Xxxxx - Letter - August 5, 1991 Page 5
Attached please find recent announcements that explain our present
position and hopes for the near future.
I trust that you will accept the proposals outlined in this letter in
the best interests of an aggressive move to protect the Xxxxx family and CCA's
economic future in the Stillwater Complex.
If you do concur please sign in the manner provided below. Sincerely yours,
Xxxxxxxx X. Xxxxxx
Executive Vice President
ART : cam
Agreed to:
8/9/91 Xxxxxxx X. Xxxxx
Date Trustee and as Trustee and
Representative
MEMORANDUM OF LEASE AGREEMENT
NOTICE is hereby given that XXXXXXX X. xx XXXXXX, individually and as
Trustee under the 1985 XXXXXXXX X. xx XXXXXX LIVING TRUST, XXXXXXX X. XXXXX,
individually and as Trustee, XXXX X. XXXXX, XXXXXX X. NOUAT. XXXXX X. LANOSTON,
XXX XXXX, XXXXXXX XXXXXX, XXXX XXXXXXXX, XXXXXXX XXXXX, XXXX X. XXXXXXX and
XXXXX X. XXXXXXX, XXXXXX XXXXX, XXXXX XXXXX, XXXXX X. XXXXXXXX and XXXXX NICKEL
NINES, INC. (therein and hereinafter referred to collectively as the "Lessors")
and CHROME CORPORATION OF AMERICA, INC., a Delaware corporation, having offices
at 00000 Xxxx Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000 (therein and hereinafter
referred to as the "Lessee"), have entered into that Lease Agreement dated
August 5, 1988. with respect to certain patented and unpatented mining claims,
millsites and tunnel sites located in Stillwater and Sweet Grass Counties of
Montana (therein and hereinafter referred to as "Subject Premises") described in
Schedule A attached hereto and incorporated herein by this reference.
For good and valuable consideration under the terms of the Lease Agreement
for an initial term of five years from the date thereof, with an option to
extend said initial term for an additional two years. and so long thereafter as
ore--bearing materials are produced from the Subject Premises in commercial
quantities, as that term is defined and used in the Lease Agreement, Lessors
have granted and do hereby grant Lessee the following rights:
(a) the right to explore, develop, mine, extract and remove or sell
chromite, or other chromium bearing ores, and all other minerals, metals,
precious stones, or rocks found in, on or under the Subject Premises;
(b) the right, during the continuance of this Lease, to take and use
any material suitable for backfilling, or other mining purposes, and any
limestone found in the premises;
(c) the right to use all existing facilities, except the hoist and
crusher that are currently on the Subject Premises, and the right to construct
all xxxxx, plants, tracks, traruways, roads, buildings, and other improvements;
(d) the right to use and develop any and all excavations, openings,
tunnels, ditches, flumes, drains and other improvements on the Subject Premises;
(e) the right to use all water and water rights identified in Schedule
B, attached to and incorporated in the Lease Agreement, and to develop
additional water and water rights appurtenant to the Subject Premises;
(f) the right to do all other acts and things which are, or may become
necessary or suitable in the discretion of Lessee, including without limitation
the right to use or disturb so much of the surface and surface resources of the
Subject Premises as Lessee may deem desirable, for the mining and removing of
chromite or other ores, metals, minerals, rocks and precious stones, the
milling, beneficiating, concentrating, smelting, refining, or leac,ing of such
ores, metals, minerals and other materials, or the concentrates thereof;
(g) the right to cut and use timber and other raw materials found
upon, or in said premises for any purpose in connection with the operations to
be carried on under this Lease; and
(h) such rights of surface and underground access for men, equipment,
supplies, utilities and water as nay be necessary or convenient for the conduct
of Lesse&s operations on any portion of the Subject Premises or on other lands,
including necessary access under, upon, and across any other contiguous land
owned or controlled by Lessors or which Lessors may have dominion or control.
The Lease Agreement is incorporated herein by this reference and made
a part hereof. Copies of the Lease Agreement are in the possession of:
Xxxxxxx X. Xxxxx
317 First Federal Savings Building
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Chrome Corporation of America, Inc.
00000 Xxxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
IN WITNESS WHEREOF, this Memorandum of Lease Agreement has been
executed as of Auqust 5, 1988.
LESSORS:
XXXXXXX X. xx XXXXXX, individually
and as Trustee under the 1985
XXXXXXXX X. xx XXXXXX LIVING TRUST
XXXXXXX X. XXXXX
individually and as Trustee
XXXX X. XXXXX
XXXXXX X. XXXXX
XXXXX X. XXXXXXXX
XXX XXXX
XXXXXXX XXXXXX
XXXX XXXXXXXX
XXXXXXX XXXXX
XXXX X. XXXXXXX
XXXXX X. XXXXXXX
SCHEDULE "A"
Mining Claims situated in Stillwater County, Montana
PATENTED LODE CLAIMS (1)
BALD EAGLE 69 D
UNPATENTED LODE CLAIMS (19)
ORIGINAL LOCATION DATE BLM SERIAL
RECORDING DATA NUMBER
BOOK PAGE
Mountain View Chrome 23 Misc. 43 9/22/39 MMC 36417
Company No. 1*
Mountain View Chrome 23 Misc. 434 8/31/40 MMC 36418
Company No. 2*
Soup 24 Misc. 273 10/03/41 MMC 36427
Xxxx* 7 Misc. 122 7/11/18 MMC 36422
Old Lady 7 Misc. 114 7/11/18 MMC 36420
Star 7 Misc. 229 10/07/18 MMC 36428
Princetons 24 Misc. 122 5/08/41 MMC 36423
Xxxxxxx 24 Misc. 126 5/08/41 MMC 36424
Xxxxxx* 7 Misc. 122 7/11/18 MMC 36425
Denver* 7 Misc. 233 10/07/18 MMC 36409
Xxxx 25 Misc. 289 11/17/43 MMC 36411
Skunk 24 Misc. 128 5/08/41 MMC 36426
Oldco 24 Misc. 124 5/08/41 MMC 36419
Sun 24 Misc. 249 8/23/41 MMC 36429
Toe 24 Misc. 614 8/28/42 MMC 36404
Xxxx 24 Misc. 207 7/19/41 MMC 36406
Xxxxx 24 Misc. 571 7/27/42 MMC 36421
Xxxx 24 Misc. 574 7/27/42 MMC 36413
Link 24 Misc. 209 7/19/41 MMC 36415
UNPATENTED PLACER CLAIMS (2)
Lake* Place 23 Misc. 400 7/16/40 MMC 36414
Verdi 24 Misc. 573 7/27/42 MMC 36430
* Amended Location, also see detailed claim list, Xxxxx Estate
SCHEDULE A (continued)
CLAIM LIST - WEST OF SILLWATER RIVER
PATENTED LODE CLAIMS
Cataract 69C
Avalanche 69B
Brooklyn 69A
MILL SITE + TUNNEL SITE CLAIMS
Mountain View Chrome Co. Mill Site
Book Tunnel & Dump Site
No. 5 Tunnel & Dump Site
UNPATENTED LODE CLAIMS
ORIGINAL LOCATION DATE BLM SERIAL
RECORDING DATA NUMBER
BOOK PAGE
XXX 25* 76 Misc. 188 MMC 10212
XXX 13* 76 Misc. 170 MMC 10203
XXX 14* 76 Misc. 172 MMC 10204
XXX 15* 76 Misc. 174 MMC 10205
XXX 16* 76 Misc. 176 MMC 10206
XXX 20* 76 Misc. 184 MMC 10210
XXX 18* 76 Misc. 180 MMC 10208
XXX 21* 76 Misc. 186 MMC 10211
XXX 19* 76 Misc. 182 MMC 10209
GAY 15* 65 Misc. 132-133 MMC 36295
GAY 16* 65 Misc. 134-135 MMC 36296
XXX 3 fr.
XXX 42 fr. 59 Misc. 193-194 MMC 36002
XXX 3 58 Misc. 452-453 MMC 35961
XXX 4A 59 Misc. 53- 54 MMC 35962
RED BIRD No.3 8 Misc. 169 MMC 36396
XXX 5 58 Misc. 454-455 MMC 35963
XXX 5A 59 Misc. 55- 56 MMC 35964
XXX 6 59 Misc. 26- 27 MMC 35965
XXX 6A 59 Misc. 57- 58 MMC 35966
XXX 7 59 Misc. 28- 29 MMC 35967
XXX 9 59 Misc. 35- 36 MMC 35969
XXX 10 59 Misc. 37- 38 MMC 35970
EMA 11 33LL 475-476 MMC 36066
EMA 13 33LL 479-480 MMC 36068
EMA 18 33LL 489-490 MMC 36073
EMA 12 33LL 477-478 MMC 36067
* Amended Location; see also detailed claims list, Xxxxx Estate.
SCHEDULE A (continued)
ORIGINAL LOCATION DATE BLM SERIAL
RECORDING DATA NUMBER
BOOK PAGE
EMA 15 33LL 483-484 MMC 36070
FLO 18 35LL 00- 00 XXX 00000
SUSU 26* 78 Misc. 889 MMC 53590
SUSU 27* 78 Misc. 891 MMC 53591
SUSU 28* 78 Misc. 893 MMC 53592
SUSU 29* 78 Misc. 895 MMC 53593
SUSU 22* 78 Misc. 881 MMC 53586
SUSU 23* 78 Misc. 883 MMC 53587
SUSU 24* 78 Misc. 885 MMC 53588
SUSU 25* 78 Misc. 887 MMC 53589
SUSU 18* 78 Misc. 873 MMC 53582
SUSU 19* 78 Misc. 875 MMC 53583
SUSU 20* 78 Misc. 877 MMC 53584
SUSU 21* 78 Misc. 879 MMC 53585
XXX 11 59 Misc. 39- 40 MMC 35971
XXX 12 59 Misc. 41- 42 MMC 35972
XXX 13 59 Misc. 43- 44 MMC 35973
XXX 39 59 Misc. 187-188 MMC 35999
SUSU 16* 78 Misc. 869 MMC 53580
SUSU 17* 78 Misc. 871 MMC 53581
XXX 14 59 Misc. 45 MMC 35974
XXX 15 59 Misc. 47 MMC 35975
EMA 16 33LL 485-486 MMC 36071
EMA 17 33LL 487-488 MMC 36072
EMA 10 33LL 473-474 MMC 36065
EMA 20 33LL 493-494 MMC 36075
FLO 20 35LL 79- 80 MMC 36063
EMA 21 33LL 495-496 MMC 36076
XXX 43 59 Misc. 195-196 MMC 36003
SCHEDULE A (continued)
MINING CLAIMS SITUATED IN STILLWATER AND SWEETGRASS COUNTIES, MONTANA
ORIGINAL LOCATION DATE BLM SERIAL
RECORDING DATA NUMBER
BOOK PAGE
PATENTED LODE CLAIMS
NEW WABELISKI 68B
UNPATENTED LODE CLAIMS
XXX 16 59 Misc. 49 MMC 35976
XXX 17 59 Misc. 59 MMC 35977
XXX 18 59 Misc. 61 MMC 35978
XXX 40 59 Misc. 189 MMC 36000
XXX 41* 59 Misc. 191 MMC 36001
SUSU 1* 43LL 205 MMC 53568
SUSU 4* 43LL 197 MMC 53571
MINING CLAIMS SITUATED IN SWEETGRASS COUNTY, MONTANA
PATENTED LODE CLAIMS
Summit 68A
UNPATENTED LODE CLAIMS
XXX 19 33QL 367 MMC 35979
XXX 20 33QL 369 MMC 35980
SUSU 5* 43LL 199 MMC 53572
SUSU 2* 43LL 207 MMC 53569
XXX 23 33QL 375-376 MMC 35983
XXX 22 33QL 373-374 MMC 35982
XXX 21 33QL 371-372 MMC 35081
SUSU 6* 43LL 201 MMC 53573
SUSU 3* 43LL 209 MMC 53570
XXX 24 33LL 377-378 MMC 35984
XXX 25 33LL 379-380 MMC 35985
XXX 26 33LL 381-382 MMC 35986
EMA 3 33LL 459-460 MMC 36058
EMA 1 33LL 459-460 MMC 36056
EMA 5 33LL 459-460 MMC 36060
EMA 2 33LL 459-460 MMC 36057
* Amended Location; also see detailed claim list, Xxxxx Estate.
SCHEDULE A (continued)
ORIGINAL LOCATION DATE BLM SERIAL
RECORDING DATA NUMBER
BOOK PAGE
EMA 4 33LL 461-462 MMC 36059
EMA 6 33LL 465-466 MMC 36061
EMA 7 33LL 467-468 MMC 36062
EMA 9 33LL 471-472 MMC 36064
EMA 8 33LL 469-470 MMC 36063
EMA 19 33LL 491-492 MMC 36074
EMA 14 33LL 481-482 MMC 36069
FLO 19 35LL 77- 88 MMC 36262
EMA 22 33LL 497-498 MMC 36077
FLO 31 35LL 101-102 MMC 36274
FLO 21 35LL 81- 82 MMC 36264
FLO 17 35LL 73- 74 MMC 36260
EMA 25 33LL 503-504 MMC 36080
SUSU 7* 43LL 219 MMC 53574
SUSU 8 43LL 000 XXX 00000
SUSU 10 43LL 000 XXX 00000
SUSU 11 43LL 000 XXX 00000
SUSU 12 43LL 000 XXX 00000
SUSU 13 43LL 217 MMC 53579
SCHEDULE A (continued)
CLAIM LIST - INDUSTRIAL/INFRASTRUCTURE ACREAGE
PATENTED LODE CLAIMS
STILLWATER 63E
SOMETHING 72B
PATENTED PLACER CLAIMS
PATENTED MILL SITES
UNPATENTED LODE CLAIMS
ORIGINAL LOCATION DATE BLM SERIAL
RECORDING DATA NUMBER
BOOK PAGE
XXX fr. 82 Misc. 877 MMC 78928
XXX 1* 76 Misc. 146 MMC 10191
XXX 2* 76 Misc. 148 MMC 10192
XXX 3* 76 Misc. 150 MMC 10193
GAY 1* 65 Misc. 104-105 MMC 36281
GAY 2* 65 Misc. 106-107 MMC 36282
GAY 6* 65 Misc. 114-115 MMC 36286
GAY 7* 65 Misc. 116-117 MMC 36287
XXX 17* 76 Misc. 178 MMC 10207
GAY 11* 65 Misc. 124-125 MMC 36291
GAY 12* 65 Misc. 126-127 MMC 36292
PINE 8 67 MMC 36333
SMELTER 2 385 MMC 36401
XXX 125* 76 Misc. 744 MMC 17294
XXX 126* 76 Misc. 742 MMC 17295
XXX 112* 76 Misc. 441 MMC 11285
XXX 113* 76 Misc. 443 MMC 11286
XXX 114* 76 Misc. 445 MMC 11287
XXX 115* 76 Misc. 447 MMC 11288
AXE 37 59 Misc. 131 MMC 36042
AXE 34 59 Misc. 122 MMC 36039
AXE 33 59 Misc. 120 MMC 36038
* Amended Location; also see detailed claim list, Xxxxx Estate.
SCHEDULE A (continued)
ORIGINAL LOCATION DATE BLM SERIAL
RECORDING DATA NUMBER
BOOK PAGE
XXX 116* 76 Misc. 449 MMC 11289
XXX 117* 76 Misc. 451 MMC 11290
XXX 44 59 Misc. 197--198 MMC 36004
XXX 16 325 MMC 36403
RAM 25 424 MMC 36394
XXX 118* 76 Misc. 453 MMC 11291
XXX 119* 76 Misc. 455 MMC 11292
XXX 120* 76 Misc. 457 MMC 11293
XXXX 24 418 MMC 36383
XXXXX 16 324
XXX 121* 76 Misc. 459 MMC 11294
XXX 127* 76 Misc. 127 MMC 17296
MALO 24 Misc. 205 MMC 36384
XXX 59 Misc. 51-- 52 MMC 35957
XXX 27 59 Misc. 163--164 MMC 35987
XXX 38 59 Misc. 185--186 MMC 35998
XXX 128* 76 Misc. 738 MMC 17297
XXX 123* 76 Misc. 461 MMC 11295
XXX 124* 76 Misc. 463 MMC 11296
AXE 36 59 Misc. 129 MMC 26041
AXE 35 59 Misc. 127 MMC 36040
XXX 12 76* Misc. 168--169 MMC 10202
XXX 140* 76 Misc. 716--717 MMC 17309
GAY fr. 82 Misc. 879--880 MMC 78929
UNTPATENTED PLACER CLAIMS
-------------------------
MIN NO. 2 22 6 MMC 36387
(portion not leased
to SMC)
MIN XX. 0 00 0 XXX 00000
XXX XX. 5 22 10-- 11 MMC 36389
(portion not leased
to SMC)
GYPSUM 6 Misc. 358 MMC 35156
DUKE 19 Misc. 337 MMC 35157
SCHEDULE A (continued)
CLAIMS LIST - EAST OF STILLWATER RIVER
PATENTED LODE CLAIMS
PADA 10,782
PADA No. 2 10,782
Perserverance 70A
UNPATENTED LODE ClAIMS
ORIGINAL LOCATION DATE BLM SERIAL
RECORDING DATA NUMBER
BOOK PAGE
AXE 32 59 Misc. 118 MMC 36037
ADZ 9 fr. 59 Misc. 000 XXX 00000
AXE 13 59 Misc. 268 MMC 35951
GIANT 6 33 MMC 36382
ADZ 10 fr 59 Misc. 262 MMC 35948
ADZ 12 fr. 59 Misc. 266 MMC 35950
AXE 12 59 Misc. 65 MMC 36017
XXX 26* 76 Misc. 252--253 MMC 10770
ADZ 11 fr. 59 Misc. 264 MMC 35944
XXX 41* 76 Misc. 274--275 MMC 10781
XXX 139* 76 Misc. 714--715 MMC 17308
XXX 140* 76 Misc. 716--717 MMC 17309
XXX 27* 76 Misc. 254--255 MMC 10771
XXX 31* 76 Misc. 260--261 MMC 10774
XXX 42* 76 Misc. 376--277 MMC 10782
XXX 50* 76 Misc. 284--295 MMC 10786
XXX 28* 76 Misc. 256--257 MMC 10772
XXX 32* 76 Misc. 262--263 MMC l0775
XXX 137* 76 Misc. 720--721 MMC 17306
XXX 51* 76 Misc. 286--287 MMC 10787
XXX 29* 76 Misc. 258--259 MMC 10773
XXX 33* 76 Misc. 264--265 MMC 10776
AXE 16 59 Misc. 73 MMC 36021
XXX 52* 76 Misc. 288--289 MMC 10788
XXX 129* 76 Misc. 736--737 MMC 17298
XXX 134* 76 Misc. 726--727 MMC 17303
AXE 17 59 Misc. 75 MMC 36022
XXX 130* 76 Misc. 734--735 MMC 17299
* Amended Location; also see detailed claim list, Xxxxx Estate.
ORIGINAL LOCATION DATE BLM SERIAL
RECORDING DATA NUMBER
BOOK PAGE
AXE 24 59 Misc. 89 MMC 36029
XXX 45* 76 Misc. 278-279 MMC 10783
XXX 55* 76 Misc. 290-291 MMC 10789
XXX 131* 76 Misc. 732-733 MMC 17300
XXX 34* 76 Misc. 266-267 MMC 10777
XXX 46* 76 Misc. 280-281 MMC 10784
XXX 56* 76 Misc. 292-293 MMC 10790
XXX 132* 76 Misc. 730-731 MMC 17301
XXX 35* 76 Misc. 268-269 MMC 10778
XXX 47* 76 Misc. 282-283 MMC 10785
XXX 57* 76 Misc. 294-295 MMC 10791
XXX 133* 76 Misc. 729-729 MMC 17302
XXX 36* 76 Misc. 270-271 MMC 10799
XXX 138* 76 Misc. 718-719 MMC 17307
AXE 6 59 Misc. 16 MMC 36011
AXE 28 59 Misc. 110 MMC 36033
AXE 27 59 Misc. 108 MMC 36032
XXX 37* 76 Misc. 272-273 MMC 10780
AXE 14 59 Misc. 69 MMC 36019
AXE 4 59 Misc. 12 MMC 36009
AXE 26 59 Misc. 106 MMC 36031
XXX 135* 76 Misc. 724-725 MMC 17304
AXE 15 59 Misc. 71 MMC 36020
XXX 60* 76 Misc. 296-297 MMC 10792
XXX 136* 76 Misc. 722-723 MMC 17305
AXE 11 59 Misc. 63 MMC 36016
XXX 61* 76 Misc. 298-299 MMC 10793
XXX 62* 76 Misc. 300-301 MMC 10794
ADZ 13 fr. 59 Misc. 268 MMC 35951
ADZ 14 fr. 59 Misc. 270 MMC 35952
ADZ 3 fr. 59 Misc. 199 MMC 35941
AXE 5 59 Misc. 14 MMC 36010
AXE 3 59 Misc. 10 MMC 36008
XXX 65 76 Misc. 302-303 MMC 10795
XXX 66* 76 Misc. 304-305 MMC 10796
XXX 67* 76 Misc. 306-307 MMC 10797
AXE 7 59 Misc. 18 MMC 36012
AXE 8 59 Misc. 20 MMC 36012
HRH 1 65 Misc. 287-288 MMC 36367
XXX 68* 76 Misc. 308-309 MMC 10798
XXX 69* 76 Misc. 310-311 MMC 10799
XXX 70* 76 Misc. 312-313 MMC 10800
XXX 71* 76 Misc. 314-315 MMC 10801
XXX 72* 76 Misc. 316-317 MMC 10802
AMY 73* 76 Misc. 318-319 MMC 10803
AMY 74* 76 Misc. 320-321 MMC 10804
ORIGINAL LOCATION DATE BLM SERIAL
RECORDING DATA NUMBER
BOOK PAGE
AMY 75* 76 Misc. 322-323 MMC 10805
ADZ 6 fr. 59 Misc. 205 MMC 35944
AMY 76* 76 Misc. 324-325 MMC 10806
AMY 77* 76 Misc. 326-327 MMC 10807
AMY 78* 76 Misc. 328-329 MMC 10808
ADZ 7 fr. 59 Misc. 222 MMC 35945
ADZ 8 tr. 59 Misc. 224 MMC 35946
AXE 38 59 Misc. 226 MMC 36043
AXE 39 59 Misc. 228 MMC 36044
AMY 79* 76 Misc. 330-331 MMC 10809
AMY 80* 76 Misc. 332-333 MMC 10810
AXE 44 59 Misc. 238 MMC 36049
AXE 42 59 Misc. 234 MMC 36047
AXE 40 59 Misc. 230 MMC 36045
AMY 82* 76 Misc. 334-335 MMC 10811
AMY 83* 76 Misc. 336-337 MMC 10812
AMY 85* 76 Misc. 338-339 MMC 10813
AMY 86* 76 Misc. 340-341 MMC 10814
AMY 87* 76 Misc. 342-343 MMC 10815
AXE 45 59 Misc. 240 MMC 36050
AXE 43 59 Misc. 236 MMC 36048
AXE 41 59 Misc. 232 MMC 36046
AMY 88* 76 Misc. 344-345 MMC 10816
AMY 89* 76 Misc. 346-347 MMC 10817
AMY 90* 76 Misc. 348-349 MMC 10818
AMY 91* 76 Misc. 350-351 MMC 10819
AMY 92* 76 Misc. 352-353 MMC 10820
AMY 93* 76 Misc. 354-355 MMC 10821
AMY 94* 76 Misc. 356-357 MMC 10822
AMY 95* 76 Misc. 358-359 MMC 10823
AMY 96* 76 Misc. 360-361 MMC 10824
AMY 97* 76 Misc. 362-363 MMC 10825
AMY 98* 76 Misc. 364-365 MMC 10826
AMY 99* 76 Misc. 366-367 MMC 10827
AMY 100* 76 Misc. 368-369 MMC 10828
AMY 101' 76 Misc. 370-371 MMC 10829
AMY 102' 76 Misc. 372-373 MMC 10830
AMY 103' 76 Misc. 374-375 MMC 10831
AMY 104' 76 Misc. 376-377 MMC 10832
AMY 105* 76 Misc. 378-379 MMC 10833
AXE 9 59 Misc. 22 MMC 36014
PET 24 576 MMC 36392
NEAR & FAR 25 127 MMC 36390
UP & DOWN 25 129 MMC 36405
RE-EAST 24 508 MMC 36373
* Amended Location; also see detailed claim list, Mouat Estate.
EXHIBIT 10.06
LEASE AGREEMENT
THIS LEASE AGREEMENT (hereinafter "Lease") is made and entered into
this 5th day of August, 1988, by and between WILLIAM C. de LANNOY, individually
and as Trustee under the 1985 MARGARET E. de LANNOY LIVING TRUST, WILLIAM G.
MOUAT, individually and as Trustee, JOHN C. MOUAT, DONALD D. MOUAT, ELLEN A.
LANGSTON, JAY DUBA, DOLORES NELSON, ANNE FUJIWARA, WILLARD FERCH, IVER J.
HJELVIK and DONNA F. HJELVIK, ROBERT MOUAT, DAVID MOUAT, ELLEN L. SCHOEMER and
MOtJAT NICKEL MINES, INC. (hereinafter referred to collectively as the
"Lessors") and CHROME CORPORATION OF AMERICA, INC., a Delaware corporation,
having offices at 12640 West Cedar Drive, Lakewood, Colorado 80228 (hereinafter
referred to as the "Lessee").
I. GRANT OF LEASE
For and in consideration of the sum of ten dollars ($10.00) cash in
hand paid by the Lessee to the Lessors, the receipt of which is hereby
acknowledged, in consideration of the royalties and payments herein covenanted
to be paid by Lessee, and in consideration of the mutual covenants hereinafter
set forth, Lessors do hereby demise, lease and let unto the Lessee those certain
patented and unpatented mining claims, mill sites and tunnel sites (hereinafter
referred to collectively as the "Subject Premises") all listed in Schedule "A",
attached and incorporated herein by this reference, situated in Stillwater and
Sweet Grass Counties, Montana, together with such of Lessors' water and water
rights as
identified in Schedule "B", attached and incorporated herein by this reference
(Lessors do not warrant any particular volume or flow-rate), and as Lessee
shall require for its operations.
In connection with and as part of the leasehold estate hereby
granted, Lessee shall have and may exercise the following rights for the benefit
of all lands owned, leased or controlled by Lessee: (a) the right to explore,
develop, mine, extract and remove or sell chromite, or other chromium bearing
ores, and all other minerals, metals, precious stones, or rocks found in, on or
under the Subject Premises; (b) the right, during the continuance of this Lease,
to take and use any material suitable for backfilling, or other mining purposes,
and any limestone found in the premises; (c) the right to use all existing
facilities, except the hoist and crusher that are currently on the Subject
Premises, and the right to construct all mills, plants, tracks, tramways, roads,
buildings, and other improvements; (d) the right to use and develop any and all
excavations, openings, tunnels, ditches, flumes, drains and other improvements
on the Subject Premises; (e) the right to use all water and water rights
identified in Schedule B and to develop additional water and water rights
appurtenant to the Subject Premises; (f) the right to do all other acts and
things which are, or may become necessary or suitable in the discretion of
Lessee, including without limitation the right to use or disturb so much of the
surface and surface resources of the Subject Premises as Lessee may deem
desirable, for the mining and removing of chromite or other ores, metals,
-2-
minerals, rocks and precious stones, the milling, beneficiating, concentrating,
smelting, refining, or leaching of such ores, metals, minerals and other
materials, or the concentrates thereof; (g) the right to cut and use timber and
other raw materials found upon, or in said premises for any purpose in
connection with the operations to be carried on under this Lease; and (h) such
rights of surface and underground access for men, equipment, supplies, utilities
and water as may be necessary or convenient for the conduct of Lessee's
operations on any portion of the Subject Premises or on other lands, including
necessary access under, upon, and across any other contiguous land owned or
controlled by Lessors or which Lessors may have dominion or control.
II. PRIMARY TERM AND LEASE PAYMENTS
A. Term. Unless sooner terminated by the provisions hereof, this
Lease shall remain in full force and effect for an initial term of five (5)
years from the date hereof (the "Primary Term") and so long thereafter as
ore-bearing materials are produced from the Subject Premises in commercial
quantities, as that term is defined in Article VI of this Lease.
B. Annual Rental Payment. Lessee agrees to pay Lessors fifty thousand
dollars ($50,000.00) per year during the first three years of the Primary Term
and seventy-five thousand dollars ($75,000.00) per year during the final two
years of the Primary Term, payable on or before the anniversary date of this
Lease, except as provided in Article II.D. These Annual Rental
-3-
Payments are expressly intended by the parties to negate and remove any
obligation on the part of the Lessee, express or implied, to explore, develop
and mine the Subject Premises with reasonable diligence during said five-year
Primary Term or during the two-year extension provided in Article II.C.
C. Lessee, so long as it shall not be in default under the terms and
provisions of this Lease, and so long as it is not already producing from the
Subject Premises in commercial quantities as defined in Article VI, shall have
the exclusive right, privilege and option to extend the Primary Term for an
additional term of two (2) years upon the following terms and conditions:
1. Written notice of Lessee's intent to extend the Primary Term shall
be given by Lessee to Lessors at least sixty (60) days prior to the expiration
of the initial five-year Primary Term.
2. Lessee at the time of giving its notice of extension, shall make
one lease payment in the amount of two hundred thousand dollars ($200,000.00) to
Lessors as consideration for the two-year extension of the Primary Term.
3. During the term of the lease extension period (the 6th and 7th
years of this Lease), Lessee agrees to pay Lessors an advance royalty of two
hundred and fifty thousand dollars ($250,000.00) per year, on the anniversary
dates of the Lease during such years. These Advance Royalties are expressly
intended by the parties to negate and remove any obligation on the part of the
Lessee, express or implied, to explore, develop
-4-
or mine the Subject Premises with reasonable diligence. Fifty percent (50%) of
the Advance Royalties paid for any year shall be deemed an advance upon, and
credited against, any royalties payable upon later production from the Subject
Premises. Such fifty percent of the Advance Royalties shall be recouped by
Lessee through direct deduction of such payment amounts from the royalties
provided by Article IV as they accrue.
D. On the date of execution of this Lease, Lessee will pay to
Lessors, and Lessors hereby acknowledge receipt of, the sum of fifty thousand
dollars ($50,000.00) which payment shall constitute payment in full for the
first Annual Rental Payment due pursuant to Article II.B.
E. Beginning with the second year of the Primary Term, the Annual
Rental Paymnents shall be adjusted upward or downward annually in direct
proportion to the percentage increase or decrease in the Consumer Price Index
U.S. for all items (Urban), for each succeeding calendar year over the base year
(1988) index, using the Consumer Price Index of January 1988 as the base
year index.
F. All payments of Annual Rental Payments, Advance Royalties,
Production Royalties or other money payable under this Lease shall be paid to
the Lessors by mailing or delivering a cashiers check to William G. Mouat,
Trustee, herein designated by Lessors as their representative and depository,
the Lessors hereby granting to said depository full power and authority on
behalf of the Lessors, their successors and assigns to collect, and distribute
all sums of money due and payable hereunder. Adequate payment by Lessee to such
-5-
designated representative and depository shall be deemed full and adequate
payment to all Lessors. Notwithstanding the death of any Lessor or the transfer,
division, or hypothecation of his royalty interest, payment, or tender of annual
rental payments and all royalties to the depository as herein designated shall
be binding upon all Lessors, their heirs, personal representatives, transferees
and assignees. Change of designated representative and depository by Lessors
shall not be effective nor binding upon Lessee until written notice is received
by Lessee of such changed designated representative and depository.
G. Lessors may elect, by 60 days prior notice to Lessee, to take
their Production Royalty in kind, and the cost, if any, of doing so shall be
borne entirely by Lessors.
H. If Lessors own less than 100% of the mineral estate, whether in
fee or under mining claim, lease, or contract in the Subject Premises, or any
portion thereof, subject to the paramount title of the United States, then the
Annual Rental Payments, Production Royalties and Advance Royalties which are
payable under this Lease shall be reduced in the proportion which Lessors'
interest bears to 100% of the mineral estate of the Subject Premises.
III. TITLE
A. Representations and Warranties. Lessors make the following
representations and warranties effective as of the date of this Lease:
-6-
1. With respect to the patented claims, Lessors are in actual and
exclusive possession and own such claims free and clear of all defects, liens
and encumbrances arising by, through or under Lessors.
2. With respect to unpatented mining claims located by Lessors, or
any one of them, that are included in the Subject Premises, except as provided
in part 1 of Schedule "A" and subject to the paramount title of the United
States, to the best of their knowledge and belief:
a. The unpatented mining claims were properly laid out and
monumented;
b. All required location validation work was properly
performed;
c. Location notices and certificates were properly
recorded and filed with appropriate governmental agencies;
d. All assessment work required to hold the unpatented
mining claims has been performed for the assessment years ending
September 1, 1986 and 1987; and
e. All affidavits of assessment work and other filings
required to maintain the claims in good standing have been properly
and timely recorded or filed with appropriate governmental agencies
for the assessment years ending September 1, 1986 and 1987.
3. With respect to those unpatented mining claims that were not
located by Lessors, but are included within the Subject Premises, and with
respect to completion of assessment work and filing of affidavits of assessment
work for all
-7-
unpatented mining claims for all assessment years not specified above, Lessors
make the foregoing representations to the best of their knowledge and belief.
4. With respect to all unpatented mining claims and millsite claims
included in the Subject Premises, Lessors warrant that the claims are free and
clear of liens and encumbrances arising by, through or under Lessors, or any one
of them; and Lessors have no knowledge of adverse claims.
5. With respect to the Subject Premises1 Lessors have no knowledge of
threatened actions, suits, claims or proceedings.
6. Lessors have delivered or will deliver to Lessee all information
reasonably requested by Lessee concerning title to the Subject Premises in
Lessors' possession.
The representations and warranties set forth above shall survive the
execution and delivery of any documents of transfer provided under this Lease.
Nothing in this Article III, however, shall be deemed to be a representation or
a warranty that any of the unpatented mining claims contains a discovery of
minerals.
B. Lessors' Covenants. Lessors covenant that during the term of this
Lease, Lessors shall maintain their interests in the Subject Premises free and
clear of any liens and encumbrances, not in existence on the date hereof and not
resulting from Lessee's operations and activities hereunder.
C. Disclosures. Lessors and Lessees represent and warrant that they
are unaware of any material facts or
-8-
circumstances which have not been disclosed in this Lease, which should be
disclosed to the other party in order to prevent the representations in this
Article III from being materially misleading.
IV. PRODUCTION ROYALTIES
A. Chromite. Lessee shall pay to Lessors a Production Royalty of
twelve cents (l2~) per unit of twenty pounds of chromium oxide (Cr2O3) contained
in ore or concentrate produced, removed and sold from the Subject Premises. The
said price of 12 cents per unit shall be adjusted annually in direct proportion
to the percentage increase or decrease, which percentage shall be calculated by
the following formula:
CP-P
A= ---- X 100
P
A = annual percentage adjustment
CP = weighted average sales price for chromite
under Lessee's contracts FOB the refinery
P = base price of 50.25 cents per pound ferrochrome.
An example calculation using this formula is as follows:
The weighted average sales price (CP) is the average price received
for each unit (ton or pound) of sales, weighted to reflect such unit of sales.
Accordingly, assume that in year X, sales for the year are 130,000 tons and are
to four different customers, each with a different tonnage and contract price:
70,000 tons @ 70 cents per lb.
40,000 tons @ 65 cents per lb.
10,000 tons @ 85 cents per lb.
10,000 tons @ 60 cents per lb.
-9-
Then the weighted average sales price (CP) is calculated by multiplying
each tonnage by its price to obtain revenue, then adding the total revenues and
dividing by the total tons:
70,000 x 0.70 $49,000
40,000 x 0.65 $26,000
10,000 x 0.85 $ 8,500
10,000 x 0.60 $ 6,000
-------
Total Revenue $89,500
Total tons is 130,000
Weighted average sales price (CP) = $89,500/130,000
= 68.85 cents per lb.
CP, therefore, would equal 68.85. Assume further that P = 50 cents per
pound. The annual percentage adjustment (A) would then be calculated to be:
A = 68.85- 50
--------- X 100
50
= 18.85
----- X 100
50
= 37.7%
B. All Other Minerals. Lessee shall also pay to Lessors a Production
Royalty of five percent (5%) of the net smelter returns (if sold to a mill or
smelter) or net income (if not sold to a mill or smelter), whichever is
applicable, from the sale of all ores or concentrates, other than chromite ores
or concentrates, from the Subject Premises. Lessors may take in kind pursuant to
Article II.G. By net smelter returns" is meant the amount received from the mill
or smelter, upon the sale of such ores or concentrates after deducting from
-10-
the gross value thereof the cost of milling, smelting and transportation to the
mill or smelter. By "net income1' is meant the amount received by Lessee from a
purchaser of ores or concentrates other than a mill or smelter, less costs of
milling and transportation (if any) charges.
C. Ores and Concentrates Not Sold. If ores, concentrates or other
products are taken in kind (produced and removed, but not sold) by Lessee, then
Lessee shall nevertheless pay the Production Royalty for chromite ores and
concentrates as specified above, and for other ores and concentrates, the
amounts received by Lessee (for purposes of calculating net smelter returns or
net income) shall be deemed to be no less than the amounts Lessee would have
received if a sale had been made. Payments shall be made in accordance with the
provision in Article IV.D. Ores, minerals or other products produced by Lessee
from the Subject Premises that are used by Lessee or its agents in the
processing or refining of ferrochrome shall not be deemed to be products taken
in kind by Lessee, and no royalty need be paid upon such products.
D. Payment. Royalty payments may be paid to the Lessors in accordance
with Articles II.F and 11.11 above and shall be payable within a period of
twenty-one (21) days after the shipment and/or removal of chromite ore or
concentrates produced from the Subject Premises and/or receipt of proceeds from
sale of other minerals during each mining period of one month. Accompanying each
payment, Lessee shall furnish to
-11-
Lessor a statement of the production used as a basis for computing royalties.
V. MAINTENANCE OF MINING CLAIMS
During the continuance of this Lease, Lessee agrees to comply with
the requirements of the state and federal statutes with respect to Assessment
Work upon the unpatented claims within the Subject Premises described in
Schedule "A" each year beginning with the Assessment Year 1987-1988. Lessee
shall not, however, be liable or responsible for any claim or claims which may
be lost as a result of insufficient performance of assessment work, so long as
Lessee has made a good faith attempt to perform the required assessment work.
Lessee will provide to Lessor a copy of the operating plan submitted to the
National Forest Service with respect to the Subject Premises.
This Lease shall cover and extend to any further or additional
right, title, interest or estate acquired by Lessors, or any of them, in or to
the Subject Premises or any portion thereof.
Lessee agrees to carry on its operations hereunder, diligently and
in a good and minerlike manner, and in accordance with accepted mining practices
in the State of Montana, and Lessee agrees that all mining operations shall be
carried on in a systematic, orderly and economical manner so as to realize
insofar as is practicable, the full ore resources of the Subject Premises.
-12-
VI. PRODUCTION COMMERCIAL QUANTITIES
For the purposes of this Lease, the term "commercial quantities"
shall mean production of not less than 100,000 tons (being short tons equal to
2,000 pounds each) of ore in any production year of 365 days from the Subject
Premises; provided that, if Lessee in any production year of 365 days produces
in excess of 100,000 tons of ore, 50% of the production in excess of 100,000
shall be credited toward production of Lessee in any subsequent 18-month period
(or periods so long as such periods are not consecutive) occurring during the
term of this Lease in which Lessee's annual production is less than 100,000
tons; provided, however, Lessee conducts mine development activities including
without limitation drifting, stoping, raising, raise-boring or shaft-sinking
during such 18-month periods.
VII. TAXES. ENCUMBRANCES AND INJURIES
A. Taxes. Lessee agrees to pay and discharge any and all taxes levied
against the Subject Premises during the life of this Lease, except that in those
cases in which said taxes cover a period during only a part of which this Lease
is in force, Lessee shall pay and discharge only its pro rata share thereof
determined by a comparison of such part with the total period covered.
B. Lessee's Encumbrances. Lessee will not permit any liens or
encumbrances on the unpatented and patented mining claims of the Subject
Premises. Notwithstanding anything to the contrary in this section, the parties
agree that Lessee has the right to encumber, as it deems necessary or
convenient, its
-13-
leasehold interest including without limitation its share of production and
proceeds, so as not to interfere with Lessors' royalties.
C. Injuries from Lessee's Operations. Lessee shall save Lessors
harmless from any and all damages, claims, costs and expenses arising from or
growing out of any or all injuries resulting from the operations of Lessee, or
in connection therewith, on the Subject Premises and occurring during the life
of this Lease except as provided in Article XII herein.
VIII. TERMINATION
A. The Lease may be terminated by Lessee at any time after the
expiration of three (3) years from the date of execution of this Lease by notice
in writing thereof to Lessors, to take effect from such date as may be
stipulated by Lessee in such notice, without, subject to the following
paragraph, the Lessee incurring any further liability whatsoever as regards
Annual Rental Payments, Advance Royalties, or other payments.
B. Subject to the foregoing paragraph, upon such termination, Lessee
shall have no further interest or right in the Subject Premises, save the right
to remove its property as provided in Article XI, including all stockpiles of
ore and concentrates on which royalty shall have been paid, and shall have no
obligation or duties with respect to the Subject Premises, except for
reclamation of lands disturbed by Lessee and required by governmental authority
to be reclaimed, and except as herein specifically provided and as to
obligations
-14-
which have accrued hereunder prior to such termination, but all fences or
enclosures protecting open pits, shafts, tunnels, etc., shall be left intact and
Lessors shall be entitled to retain the entire amount of any moneys paid under
this Lease up to the effective date of termination.
C. This Lease shall not terminate for nonpayment by Lessee of annual
rental payments or royalties, unless such nonpayment continues for 60 days after
payment was due, subject further to Article XVII.
IX. FORCE MAJEURE
Lessee shall be excused from the performance of its obligations of
every kind, except necessary Annual Assessment work and the Annual Rental
Payments set forth in Article II during such period or periods as performance
may be made impossible by force majeure. By this it is intended to mean that the
Lessee shall be excused from the performance of any provision of this Agreement
for such period of time as performance of such provision is prevented by fire,
flood, earthquake, explosion, lack of transportation facilities, Act of God,
shortage of power or water, strike or similar labor difficulties, insurrection
or mob violence, requirement or regulation of government, or other causes beyond
the reasonable control of Lessee. For purposes of this Lease, force majeure
shall include a drop in the price of ferrochrome to a point below which it is
uneconomic to produce chromite.
-15-
X. RECORDS
Within a reasonable time, not to exceed six (6) months, following the
termination of this Lease for any cause, Lessee shall furnish to Lessors a copy
of its factual maps, drilling records, drill core and assay and smelter reports
relating to the Subject Premises.
Lessors agree, upon reasonable request by Lessee, to furnish to
Lessee such maps, records, reports and documents, as Lessors may possess
relating to the Subject Premises. Such maps, records, reports and documents
shall be returned, if requested, to Lessors within a reasonable time not to
exceed 90 days.
XI. REMOVAL
Upon the termination of this Lease for any reason, Lessee shall have
the right to remove from the Subject Premises, at any time within the 12-month
period following such termination, all stockpiles of ore and concentrates upon
which royalties shall have been paid, and all of its machinery, equipment,
tools, structures or other property and improvements, fixtures and structures
constructed, erected or placed on the Subject Premises, or any portion thereof,
by Lessee; provided, however, Lessee shall leave in place all timbering, framing
or enclosures protecting open pits, shafts, tunnels and underground trackage;
and provided that removal of improvements, fixtures and structures shall not
damage the structures remaining on the Subject Premises.
-16-
XII. POSSESSORY RIGHTS
While this Lease is in effect, Lessee shall be entitled to exclusive
possession of the Subject Premises, except that Lessors and their
representatives, successors and assigns, at any reasonable time, may go upon the
Subject Premises to inspect the operations of Lessee thereon. Lessors are
further entitled to access to claims not included under this Lease ("Lessors'
Claims") across the Subject Premises for men, equipment, supplies, utilities,
water and all other items as may be reasonably necessary for the exploration,
development and operation of Lessors' Claims; provided, however, that in so
doing Lessors shall not unreasonably hinder Lessees' work; and provided further
that the Lessors hereby release Lessee from liability for any personal-injury or
death of employee or representative of Lessors while on the Subject Premises and
the Lessors agree that they will indemnify and save harmless Lessee from
liability for any personal injury to or death of any person or persons, or
damage or destruction of property of Lessee or others done or caused by any
employee or representative of Lessors while so visiting or traversing the
Subject Premises. Lessors further agree to hold Lessee harmless from any
liability and to indemnify Lessee for any claims, costs, expenses and fees
arising from Lessors' activities on Lessors' Claims.
XIII. RELOCATION AND AMENDMENT
Lessee shall have the right at any time or times during the term of
this Lease, upon written notice to Lessors, to
-17-
amend the location of any one or more of the unpatented mining claims whenever
such amendment is deemed necessary or desirable to correct errors or omissions
in the location of the claim. Lessee shall have the further right, upon written
notice to Lessors, to relocate any one or more of said claims whenever such
action is deemed to be necessary or desirable. All such relocations or
amendments shall be made by Lessee as agent for Lessors, placing all such
amendments and relocations in the name of Lessors.
Lessee shall have the further right at its discretion to repair or
replace any claim location monument or marking which has been damaged or
destroyed, although Lessee shall not be obligated to perform such repairs or
replacements.
XIV. PATENTING
Upon request of Lessee at any time or times during the term of this
Lease, Lessors agree to undertake and obtain patent to any and all of the mining
claims which are subject to this Lease, as designated by Lessee, and Lessee
shall prepare all documents and compile all data and comply in all respects with
the applicable law, all at the expense of Lessee. Any patent issued shall be in
Lessors' names. Lessors shall execute any and all documents required for this
purpose and shall cooperate fully with Lessee in the patent application and
proceedings subsequent thereto. If Lessors begin patent proceedings and Lessee
thereafter requests Lessors to discontinue such proceedings, or if this Lease is
terminated while patent proceedings are pending, Lessee shall have no
-18-
further obligations with respect thereto, except to pay any unpaid expenses
accrued in such proceedings prior to its request to discontinue, or prior to
termination, whichever occurs first.
XV. COMMINGLING
Lessee shall have the right to commingle ore and minerals from the
Subject Premises, or any portion thereof.
XVI. DRAFTING OF DOCUMENT - MUTUAL
This Lease has been drafted through the joint efforts of the Lessors
and Lessee and their respective attorneys, and neither of the parties hereto
shall be permitted to claim that the drafting of this Lease was performed or
accomplished to a greater extent by the other party.
The parties acknowledge that they have retained or employed their own
respective attorneys or counsel in the preparation and/or examination of this
document.
XVII. DEFAULT
In the event that Lessee shall default in the performance of any of
the terms and provisions of this Lease, then, after written notice of such
default from Lessors to Lessee, if Lessee does not either:
A. Cure such default within sixty (60) days after such notice, or
B. Commence promptly within the said period of sixty (60) days to
rectify such default and continue thereafter to use due diligence to rectify
such default until it is fully remedied or cured, Lessors may terminate this
Agreement at any
-19-
time thereafter during the continuance of such default by giving written notice
to Lessee of their election to terminate.
XVIII. NOTICE
Any notice required or permitted to be given or served by one of the
parties hereto shall be sufficiently given or served by a communication in
writing, sent by registered mail, to the other party at the address given below:
FOR THE LESSORS:
William G. Mouat
317 First Federal Savings Building
2929 Third Avenue North
Billings, Montana 59101
FOR THE LESSEE:
Chrome Corporation of America, Inc.
12640 West Cedar Drive
Lakewood, Colorado 80228
Each party may change the address by giving written notice of such
change to the other party.
XIX. ASSIGNMENT
Lessee's assignment of the benefit of this Lease may only be made
with the consent of the Lessors, which consent will not be unreasonably
withheld.
XX. CONFIDENTIALITY
Lessors agree that all information developed or acquired by Lessee
as a result of work under this Lease and conveyed to Lessors, or any one of
them, including but not limited to information relating to ore reserves, mineral
discoveries, mining or processing methods, plans, production schedules and
-21-
other information shall be kept strictly confidential by Lessors until released
or made public by Lessee.
XXI. TIME OF ESSENCE; BINDING EFFECT
Time is of the essence in this Lease. Each obligation set forth
herein shall extend to and be binding upon and every benefit inure to the heirs,
personal representatives, successors or assigns of the parties hereto.
XXII. FURTHER ASSURANCES
The parties agree to execute and deliver such other documents as may
be necessary to effectuate the intents and purposes of this Lease.
XXIII. ENTIRE AGREEMENT
This Lease may not be amended except in writing by duly authorized
representatives of the parties. This Lease constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements with respect to all matters covered hereby.
XXIV. GOVERNING LAW
This Lease shall be governed by Montana Law and the parties hereby
submit to the jurisdiction of the Montana courts, including the federal courts
of the district of Montana.
XXV. MEMORANDUM OF AGREEMENT
This Lease shall not be recorded without the consent of both
parties. Upon the request of either party, both parties shall execute a
Memorandum of this Lease in recordable form, which memorandum may be recorded.
-21-
XXVI. COUNTERPARTS
This Lease may be executed in counterparts, no one of which needs to
be executed by all Lessors, and shall be binding upon each party upon execution
by that party, and shall be effective as if all parties had signed the same
document.
IN WITNESS WHEREOF, the parties hereto have caused this Lease to be
duly executed as of the day and year first above written.
LESSORS:
WILLIAM C. de LANNOY, individually
and as Trustee under the 1985
MARGARET E. de LANNOY LIVING TRUST
WILLIAM G. MOUAT, individually and
as Trustee
JOHN C. MOUAT
DONALD D. MOUAT
ELLEN A. LANGSTON
- 22 -
JAY DUBA
DOLORES NELSON
ANNE FUJIWARA
WILLARD FERCH
IVER J. HJELVIK
DONNA F. HJELVIK
ROBERT MOUAT
DAVID MOUAT
ELLEN L. SCHOEMER
MOUAT NICKEL MINES, INC.
ATTEST:
WILLIAM S. MOUAT By: WILLIAM C. deLANNOY,
SECRETARY VICE PRESIDENT
-23-
SCHEDULE "A"
TO INCLUDE ALL PATENTED AND UNPATENTED MINING CLAIMS (WITHIN ALL
LEASE BLOCKS), AS WELL AS ALL MILLSITES.
SCHEDULE "A"
Mining Claims situated in Stillwater county, Montana
PATENTED LODE CLAIMS (1)
BALD EAGLE 69 D
UNPATENTED LODE CLAIMS (19)
ORIGINAL LOCATION
RECORDING DATA
------------------- BLM SERIAL
BOOK PAGE DATE NUMBER
--------- ---- ------- -----------
Mountain View Chrome
Company No. 1* 23 Misc. 43 9/22/39 MMC 36417
Mountain View Chrome
Company No. 2* 23 Misc. 434 8/31/40 MMC 36418
Soup 24 Misc. 273 10/03/41 MMC 36427
Pete* 7 Misc. 122 7/11/18 MMC 36422
Old Lady 7 Misc. 114 7/11/18 MMC 36420
Star 7 Misc. 229 10/07/18 MMC 36428
Princetons 24 Misc. 122 5/08/41 MMC 36423
Sampson 24 Misc. 126 5/08/41 MMC 36424
Scully* 7 Misc. 122 7/11/18 MMC 36425
Denver* 7 Misc. 233 10/07/18 MMC 36409
Hess 25 Misc. 289 11/17/43 MMC 36411
Skunk 24 Misc. 128 5/08/41 MMC 36426
Oldco 24 Misc. 124 5/08/41 MMC 36419
Sun 24 Misc. 249 8/23/41 MMC 36429
Toe 24 Misc. 614 8/28/42 MMC 36404
Adam 24 Misc. 207 7/19/41 MMC 36406
Peggy 24 Misc. 571 7/27/42 MMC 36421
Joan 24 Misc. 574 7/27/42 MMC 36413
Link 24 Misc. 209 7/19/41 MMC 36415
UNPATENTED PLACER CLAIMS (2)
Lake* 23 Misc. 400 7/16/40 MMC 36414
Verdi 24 Misc. 573 7/27/42 MMC 36430
* Amended Location; also see detailed claim list, Mouat Estate.
2
SCHEDULE A (continued)
CLAIM LIST - WEST OF STILLWATER RIVER
PATENTED LODE CLAIMS
Cataract 69C
Avalanche 69B
Brooklyn 69A
MILL SITE + TUNNEL SITE CLAIMS
Mountain View Chrome Co. Mill Site
Book Tunnel & Dump Site
No. 5 Tunnel & Dump Site
UNPATENTED LODE CLAIMS
ORIGINAL LOCATION
RECORDING DATA
------------------ BLM SERIAL
BOOK PAGE DATE NUMBER
--------- ---- ------- -----------
AMY 25* 76 Misc. 188 MMC 10212
AMY 13* 76 Misc. 170 MMC 10203
AMY 14* 76 Misc. 172 MMC 10204
AMY 15* 76 Misc. 174 MMC 10205
AMY 16* 76 Misc. 176 MMC 10206
AMY 20* 76 Misc. 184 MMC 10210
AMY 18* 76 Misc. 180 MMC 10208
AMY 21* 76 Misc. 186 MMC 10211
AMY 19* 76 Misc. 182 MMC 10209
GAY 15* 65 Misc. 132-133 MMC 36295
GAY 16* 65 Misc. 134-135 MMC 36296
ANN 3 fr.
ANN 42 fr. 59 Misc. 193-194 MMC 36002
ANN 4 58 Misc. 452-453 MMC 35961
ANN 4A 59 Misc. 53-54 MMC 35962
RED BIRD No.3 8 Misc. 169 MMC 36396
ANN 5 58 Misc. 454-455 MMC 35963
ANN SA 59 Misc. 55-56 MMC 35964
ANN 6 59 Misc. 26-27 MMC 35965
ANN 6A 59 Misc. 57-58 MMC 35966
ANN 7 59 Misc. 28-29 MMC 35967
ANN 9 59 Misc. 35-36 MMC 35969
ANN 10 59 37-38 MMC 35970
EMA 11 33LL 475-476 MMC 36066
EMA 13 33LL 479-480 MMC 36068
EMA 18 33LL 489-490 MMC 37073
EMA 12 33LL 477-478 MMC 36067
*Amended Location; also see detailed claim list, Mouat Estate.
2
SCHEDULE A (continued)
ORIGINAL LOCATION
RECORDING DATA
----------------------- BLM SERIAL
BOOK PAGE DATE NUMBER
--------- ------- ---- ----------
EMA 15 33LL 483-484 MMC 36070
FLO 18 35LL 75-76 MMC 36261
SUSU 26* 78 Misc. 889 MMC 53590
SUSU 27* 78 Misc. 891 MMC 53591
SUSU 28* 78 Misc. 893 MMC 53592
SUSU 29* 78 Misc. 895 MMC 53593
SUSU 22* 78 Misc. 881 MMC 53586
SUSU 23* 78 Misc. 883 MMC 53587
SUSU 24* 78 Misc. 885 MMC 53588
SUSU 25* 78 Misc. 887 MMC 53589
SUSU 18* 78 Misc. 873 MMC 53582
SUSU 19* 78 Misc. 875 MMC 53583
SUSU 20* 78 Misc. 877 MMC 53584
SUSU 21* 78 Misc. 879 MMC 53585
ANN 11 59 Misc. 39-40 MMC 35971
ANN 12 59 Misc. 41-42 MMC 35972
ANN 13 59 Misc. 43-44 MMC 35973
ANN 39 59 Misc. 187-188 MMC 35999
SUSU 16* 78 Misc. 869 MMC 53580
SUSU 17* 78 Misc. 871 MMC 53581
ANN 14 59 Misc. 45 MMC 35974
ANN 15 59 Misc. 47 MMC 35975
EMA 16 33LL 485-486 MMC 36071
ENA 17 33LL 487-488 MMC 36072
EMA 10 33LL 473-47 4 MMC 36065
EMA 20 33LL 493-494 MMC 36075
FLO 20 35LL 79-80 MMC 36263
EMA 21 33LL 495-496 MMC 36076
ANN 43 59 195-196 MMC 36003
3
SCHEDULE A (continued)
MINING CLAIMS SITUATED IN STILLWATER AND SWEETGRASS COUNTIES. MONTANA
ORIGINAL LOCATION
RECORDING DATA
----------------------- BLM SERIAL
BOOK PAGE DATE NUMBER
--------- ------- ---- ----------
PATENTED LODE CLAIMS
NEW WABELISKI 68B
UNPATENTED LODE CLAIMS
ANN 16 59 Misc. 49 MMC 35976
ANN 17 59 Misc. 59 MMC 35977
ANN 18 59 Misc. 61 MMC 35978
ANN 40 59 Misc. 189 MMC 36000
ANN 41* 59 Misc. 191 MMC 36001
SUSU 1* 43LL 205 MMC 53568
SUSU 4* 43LL 197 MMC 53571
MINING CLAIMS SITUATED IN SWEETGRASS COUNTY. MONTANA
PATENTED LODE CLAIMS
SUMMIT 68A
UNPATENTED LODE CLAIMS
ANN 19 33QL 367 MMC 35979
ANN 20 33QL 369 MMC 35980
SUSU 5* 43LL 199 MMC 53572
SUSU 2* 43LL 207 MMC 53569
ANN 23 33LL 375-376 MMC 35983
ANN 22 33LL 373-374 MMC 35982
ANN 21 33LL 371-372 MMC 35981
SUSU 6* 43LL 201 MMC 53573
SUSU 3* 43LL 209 MMC 53570
ANN 24 33LL 377-378 MMC 35984
ANN 25 33LL 379-380 MMC 35985
ANN 26 33LL 381-382 MMC 35986
EMA 3 33LL 459-460 MMC 36058
EMA 1 33LL 455-456 MMC 36056
EMA 5 33LL 463-464 MMC 36060
EMA 2 33LL 457-458 MMC 36057
*Amended Location; also see detailed claim list, Mouat Estate.
4
SCHEDULE A (continued)
ORIGINAL LOCATION
RECORDING DATA
----------------------- BLM SERIAL
BOOK PAGE DATE NUMBER
--------- ------- ---- ----------
EMA 4 33LL 461-462 MMC 36059
EMA 6 33LL 465-466 MMC 36061
EMA 7 33LL 467-468 MMC 36062
EMA 9 33LL 471-472 MMC 36064
EMA 8 33LL 469-470 MMC 36063
EMA 19 33LL 491-492 MMC 36074
EMA 14 33LL 481-4 82 MMC 36069
FLO 19 35LL 77-88 MMC 36262
EMA 22 33LL 497-4 98 MMC 36077
FLO 31 35LL 101-102 MMC 36274
FLO 21 35LL 81-82 MMC 36264
FLO 17 35LL 73-74 MMC 36260
EMA 25 33LL 503-504 MMC 36080
SUSU 7* 43LL 219 MMC 53574
SUSU 8 43LL 203 MMC 53575
SUSU 10 43LL 211 MMC 53576
SUSU 11 43LL 213 MMC 53577
SUSU 12 43LL 215 MMC 53578
SUSU 13 43LL 217 MMC 53579
5
SCHEDULE A (continued)
CLAIM LIST - INDUSTRIAL/INFRASTRUCTURE ACREAGE
PATENTED LODE CLAIMS
STILLWATER 63E
SOMETHING 72B
PATENTED PLACER CLAIMS
PATENTED MILL SITES
UNPATENTED LODE CLAIMS
ORIGINAL LOCATION
RECORDING DATA
----------------------- BLM SERIAL
BOOK PAGE DATE NUMBER
--------- ------- ---- ----------
AMY fr. 82 Misc. 877 MMC 78928
AMY 1* 76 Misc. 146 MMC 10191
AMY 2* 76 Misc. 148 MMC 10192
AMY 3* 76 Misc. 150 MMC 10193
GAY 1* 65 Misc. 104-105 MMC 36281
GAY 2* 65 Misc. 106-107 MMC 36282
GAY 6* 65 Misc. 114-115 MMC 36286
GAY 7* 65 Misc. 116-117 MMC 36287
AMY 17* 76 Misc. 178 MMC 10207
GAY 11* 65 Misc. 124-125 MMC 36291
GAY 12* 65 Misc. 126-127 MMC 36292
PINE 8 67 MMC 36393
SMELTER 2 385 MMC 36401
AMY 125* 76 Misc. 744 MMC 17294
AMY 126* 76 Misc. 742 MMC 17295
AMY 112* 76 Misc. 441 MMC 11285
AMY 113* 76 Misc. 443 MMC 11286
AMY 114* 76 Misc. 445 MMC 11287
AMY 115* 76 Misc. 447 MMC 11288
AXE 37 59 Misc. 131 MMC 36042
AXE 34 59 Misc. 122 MMC 36039
AXE 33 59 Misc. 120 MMC 36038
* Amended Location; also see detailed claim list, Mouat Estate.
6
SCHEDULE A (continued)
ORIGINAL LOCATION
RECORDING DATA
----------------------- BLM SERIAL
BOOK PAGE DATE NUMBER
--------- ------- ---- ----------
AMY 116* 76 Misc. 449 MMC 11289
AMY 117* 76 Misc. 451 MMC 11290
ANN 44 59 Misc. 197-198 MMC 36004
SUE 16 325 MMC 36403
RAM 25 424 MMC 36394
AMY 118* 76 Misc. 453 MMC 11291
AMY 119* 76 Misc. 455 MMC 11292
AMY 120* 76 Misc. 457 MMC 11293
JOHN 24 418 MMC 36383
MARIE 16 324
AMY 121* 76 Misc. 459 MMC 11294
AMY 127* 76 Misc. 127 MMC 17296
MALO 24 205 MMC 36384
ANN 59 Misc. 51-52 MMC 35957
ANN 27 59 Misc. 163-164 MMC 35987
ANN 38 59 Misc. 185-186 MMC 35998
AMY 128* 76 Misc. 738 MMC 17297
AMY 123* 76 Misc. 461 MMC 11295
AMY 124* 76 Misc. 463 MMC 11296
AXE 36 59 Misc. 129 MMC 26041
AXE 35 59 Misc. 127 MMC 36040
AMY 12 76* Misc. 168-169 MMC 10202
AMY 140* 76 Misc. 716-717 MMC 17309
GAY fr. 82 Misc. 879-880 MMC 78929
UNPATENTED PLACER CLAIMS
MIN NO. 2
(portion not
leased to SMC) 22 6 MMC 36387
MIN NO. 4 22 9 MMC 36416
MIN NO. 5
(portion not
leased to SMC) 22 10-11 MMC 36389
GYPSUM 6 Misc. 358 MMC 35156
DUKE 19 Misc. 337 MMC 35157
7
SCHEDULE A (continued)
CLAIM LIST - EAST OF STILLWATER RIVER
PATENTED LODE CLAIMS
PADA 10,782
PADA No. 2 10,782
Perserverance 70A
ORIGINAL LOCATION
RECORDING DATA
----------------------- BLM SERIAL
BOOK PAGE DATE NUMBER
--------- ------- ---- ----------
AXE 32 59 Misc. 118 MMC
ADZ 9 fr. 59 Misc. 260 MMC
AXE 13 59 Misc. 268 MMC
GIANT 6 33 MMC
ADZ 10 fr. 59 Misc. 262 MMC
ADZ 12 fr. 59 Misc. 266 MMC
AXE 12 59 Misc. 65 MMC
AMY 26* 76 Misc. 252-253 MMC
ADZ 11 fr. 59 Misc. 264 MMC
AMY 41* 76 Misc. 274-275 MMC
AMY 129* 76 Misc. 714-715 MMC
AMY 140* 76 Misc. 716-717 MMC
AMY 27* 76 Misc. 254-255 MMC
ANY 31* 76 Misc. 260-261 MMC
AMY 42* 76 Misc. 276-277 MMC
AMY 50* 76 Misc. 284-285 MMC
AMY 28* 76 Misc. 256-257 MMC
AMY 32* 76 Misc. 262-263 MMC
AMY 137* 76 Misc, 720-721 MMC
ANY 51* 76 Misc. 286-287 MMC
AMY 29* 76 Misc. 258-259 MMC
ANY 33* 76 Misc. 264-265 MMC
AXE 16 59 Misc. 73 MMC
AMY 52 * 76 Misc. 288-229 MMC
AMY 129* 76 Misc. 736-737 MMC
AMY 134* 76 Misc. 726-727 MMC
AXE 17 59 Misc. 75 MMC
AMY 130* 76 Misc. 734-735 MMC
* Amended Location; also see detailed claim list, Mouat Estate.
8
SCHEDULE A (continued)
ORIGINAL LOCATION
RECORDING DATA
----------------------- BLM SERIAL
BOOK PAGE DATE NUMBER
--------- ------- ---- ----------
AXE 24 59 Misc. 89 MMC 36029
AMY 45* 76 Misc. 278-279 MMC 10782
AMY 55* 76 Misc. 290-291 MMC 10789
AMY 131* 76 Misc. 732-733 MMC 17300
AMY 34* 76 Misc. 266-267 MMC 10777
AMY 46* 76 Misc. 280-281 MMC 10784
AMY 56* 76 Misc. 292-293 MMC 10790
AMY 132* 76 Misc. 730-731 MMC 17301
AMY 35* 76 Misc. 268-269 MMC 10778
AMY 47* 76 Misc. 282-283 MMC 10785
AMY 57* 76 Misc. 294-295 MMC 10791
AMY 133* 76 Misc. 728-729 MMC 17302
AMY 36* 76 Misc. 270-271 MMC 10799
AMY 138* 76 Misc. 718-719 MMC 17307
AXE 6 59 Misc. 16 MMC 36011
AXE 28 59 Misc. 110 MMC 36033
AXE 27 59 Misc. 108 MMC 36032
AMY 37* 76 Misc. 272-273 MMC 10780
AXE 14 59 Misc. 69 NMC 36019
AXE 4 59 Misc. 12 MMC 36009
AXE 26 59 Misc. 106 MMC 36031
AMY 135* 76 Misc. 724-725 MNC 17304
AXE 15 59 Misc. 71 MNC 36020
AMY 60* 76 Misc. 296-297 MMC 10792
AMY 136* 76 Misc. 722-723 MMC 17305
AXE 11 59 Misc. 63 MMC 36016
AMY 61* 76 Misc. 298-299 MMC 10793
AMY 62* 76 Misc. 300-301 MMC 10794
ADZ 13 fr. 59 Misc. 268 MMC 35951
ADZ 14 fr. 59 Misc. 270 MMC 35952
ADZ 3 fr. 59 Misc. 199 MMC 35941
AXE 5 59 Misc. 14 MMC 36010
AXE 3 59 Misc. 10 MMC 36008
AMY 65 76 Misc. 302-303 MMC 10795
AMY 66* 76 Misc. 304-305 MMC 10796
AMY 67* 76 Misc. 306-307 MMC 10797
AXE 7 59 Misc. 18 MMC 36012
AXE 8 59 Misc. 20 MMC 36013
HRH 1 65 287-288 MMC 36367
AMY 68* 76 Misc. 308-309 MMC 10798
AMY 69* 76 Misc. 310-311 MMC 10799
AMY 7Q* 76 Misc. 312-313 MMC 10800
AMY 71* 76 Misc. 314-315 MMC 10801
AMY 72* 76 Misc. 316-317 MMC 10802
AMY 73* 76 Misc. 318-319 MMC 10803
AMY 74* 76 Misc. 320-321 MMC 10804
9
SCHEDULE A (continued)
ORIGINAL LOCATION
RECORDING DATA
----------------------- BLM SERIAL
BOOK PAGE DATE NUMBER
--------- ------- ---- ----------
AMY 75* 76 Misc. 322-323 MMC 10805
ADZ 6 fr. 59 Misc. 205 MMC 35944
AMY 76* 76 Misc. 324-325 MMC 10806
AMY 77* 76 Misc. 326-327 MMC 10807
AMY 78* 76 Misc. 328-329 MMC 10808
ADZ 7 fr. 59 Misc. 222 MMC 35945
ADZ 8 ft. 59 Misc. 224 MMC 35946
AXE 38 59 Misc. 226 MMC 36043
AXE 39 59 Misc. 228 MMC 36044
AMY 79* 76 Misc. 330-331 MMC 10809
AMY 80* 76 Misc. 332-333 MMC 10810
AXE 44 59 Misc. 238 MMC 36049
AXE 42 59 Misc. 234 MMC 36047
AXE 40 59 Misc. 230 MMC 36045
AMY 82* 76 Misc. 334-335 MMC 10811
AMY 83* 76 Misc. 336-337 MMC 10812
AMY 85* 76 Misc. 338-339 MMC 10813
AMY 86* 76 Misc. 340-341 MMC 10814
AMY 87* 76 Misc. 342-343 MMC 10815
AXE 45 59 Misc. 240 MMC 36050
AXE 43 59 Misc. 236 MMC 36048
AXE 41 59 Misc. 232 MMC 36046
AMY 88* 76 Misc. 344-345 MMC 10816
AMY 89* 76 Misc. 346-347 MMC 10817
AMY 90* 76 Misc. 348-349 MMC 10818
AMY 91* 76 Misc. 350-351 MMC 10819
AMY 92* 76 Misc. 352-353 MMC 10820
AMY 93* 76 Misc. 354-355 MMC 10821
AMY 94* 76 Misc. 356-357 MMC 10822
AMY 95* 76 Misc. 358-359 MMC 10823
AMY 96* 76 Misc. 360-361 MMC 10824
AMY 97* 76 Misc. 362-363 MMC 10825
AMY 98* 76 Misc. 364-365 MMC 10826
AMY 99* 76 Misc. 366-367 MMC 10827
AMY 100* 76 Misc. 368-369 MMC 10828
AMY 101* 76 Misc. 370-371 MMC 10829
AMY 102* 76 Misc. 372-373 MMC 10830
AMY 103* 76 Misc. 374-375 MMC 10831
AMY 104* 76 Misc. 376-377 MMC 10832
AMY 105* 76 Misc. 378-379 MMC 10833
AXE 9 59 Misc. 22 MMC 36014
PET 24 576 MMC 36392
NEAR & FAR 25 127 MMC 36390
UP & DOWN 25 129 MMC 36405
RE-EAST 24 508 MMC 36373
* Amended Location; also see detailed claim list, Mouat Estate.
10
SCHEDULE A (continued)
ORIGINAL LOCATION
RECORDING DATA
----------------------- BLM SERIAL
BOOK PAGE DATE NUMBER
--------- ------- ---- ----------
24 45 MMC 36399
PATENTED PLACER CLAIMS
27 425 6/5/54 MMC 36402
[] in Nye Basin
[] sed to SMC) 37 427 6/5/54 MMC 36379
[] in Nye Basin
[] sed to SMC) 23 21 MMC 36377
24 153 MMC 36398
* Amended Location; also see detailed claim list, Mouat Estate.
[] Unreadable Text
11
SCHEDULE "B"
WATER RIGHTS:
(1) Lessors' Water Right Number 43C-W-189530-00
Source: Mountain View Lake - SW 1/4 NE 1/4 Sec/20, Twp 5 S., Rge
15 E., M.P.M., Stillwater County, Montana
Indicated Flow Rate: 1.34 CFS
Indicated Volume: 486.27 acre feet per year
Purpose (Use): Industrial.
(2) Lessors' Water Right Number 43C-W-189532-OO
Source: Verdigris Creek- S 1/2 SW 1/4 NE 1/4 Sec. 20, Twp. 5 S.,
Rge 15 E., M.P.M., Stillwater County, Montana
Indicated Flow Rate: 0.09 CFS
Indicated Volume: 49.79 acre feet per year
Purpose (Use): Domestic (multiple)
EXHIBIT 10.07
STILL WATER COMPLEX BASAL ZONE
LEASE AGREEMIENT
THIS LEASE AGREEMENT (hereinafter "Lease") is made and entered into this 18th
day of January, 2000, by and between MOUAT NICKEL MINES INC., WILLIAM G. MOUAT,
individually and as Trustee, and FORT STOCKTON INVESTMENTS, INC. (hereinafter
referred to collectively as the "Lessors") and CHROME CORPORATION OF AMERICA
(hereinafter referred to as the "Lessee"), having offices at 5613 S. Prince
Street, Littleton, Colorado 80120.
I. GRANT OF LEASE
For and in consideration of the sum of ten dollars ($10.00) cash in hand paid by
the Lessee to the Lessors, the receipt of which is hereby acknowledged, in
consideration of the Production Royalty and Monthly Lease Payments herein
covenanted to be paid by Lessee, and in consideration of the mutual covenants
hereinafter set forth, Lessors do hereby demise, lease and let unto the Lessee
those certain patented and unpatented mining claims, mill sites and tunnel sites
(hereinafter referred to collectively as the "Subject Premises") all listed in
Schedule "A", attached and incorporated herein by this reference, situated in
Stillwater County, Montana.
In connection with and as part of the leasehold estate hereby granted, Lessee
shall have and may exercise the following rights for the benefit of all lands
owned, leased or controlled by Lessee:
A. The right to explore, develop, mine, extract and remove or sell
ores, concentrates or other products found in, on or under the Subject Premises;
B. The right, during the continuance of this Lease to take and use any
material suitable for backfilling, or other mining purposes, and any limestone
found in the premises;
C. The right to use all existing facilities, and the right to
construct all mills, plants, tracks, tramways, roads, buildings, and other
improvements;
D. The right to use and develop any and all excavations, openings,
tunnels, ditches, flumes, drains~and other improvements on the Subject Premises;
E. The right to do all other acts and things which are, or may become
necessary or suitable in the discretion of Lessee, including without limitation
the right to use or disturb so much of the surface and surface resources of the
Subject Premises as Lessee may deem desirable, for the mining and removing of
ores, metals, minerals, rocks and precious stones, the milling, beneficiating,
concentrating, smelting, refining, or leaching of such ores, metals, minerals
and other materials, or the concentrates thereof;
2000 Basal Zone Lease
F. The right to cut and use timber and other raw materials found upon,
or in said premises for any purpose in connection with the operations to be
carried on under this Lease;
G. Such rights of surface and underground access for men, equipment,
supplies, utilities and water as may be necessary or convenient for the conduct
of Lessee's operations on any portion of the Subject Premises or on other lands,
including necessary access under, upon, across any other contiguous land owned
or controlled by Lessors or which Lessors may have dominion or control;
H. Any buildings on the leased properties shall remain the property of
the Lessor. The Lessee's activities on the leased properties shall not restrict
the Lessor's access to the buildings.
II. PRIMARY TERM AND LEASE PAYMENTS
A. Term. Unless sooner terminated by the provisions hereof, this Lease
shall remain in full force and effect for an initial term of five (5) years from
the date hereof (the "Primary Term") and so long thereafter as ore-bearing
materials are produced from the Subject Premises in commercial quantities, as
that term is defined in Article VI of this Lease.
B. Monthly Rental Payment. Lessee agrees to pay Lessors on or before
the first day of each month of the Primary Term of the Lease and as provided in
Article II.D the following Monthly Rental Payments:
First twelve months $1,000 per month
Second twelve months $2,000 per month
Subsequent months $2,500 per month
These Monthly Rental Payments are expressly intended by the parties to negate
and remove any obligation on the part of the Lessee, express or implied, to
explore, develop and mine the Subject Premises with reasonable diligence during
said five-year Primary Term or during the five-year extension provided in
Article II.C.
C. Lessee, so long as it shall not be in default under the terms and
provisions of this Lease, shall have the exclusive right, privilege and option
to extend the Primary Term for an additional term of five (5) years. Written
notice of Lessee's intent to extend the Primary Term shall be given by Lessee to
Lessors at least sixty (60) days prior to the expiration of the initial
five-year Primary Term.
1000 Basal Zane Lease
D. On the date of execution of this Lease, Lessee will pay to Lessors,
and Lessors hereby acknowledge receipt of, the sum of One Thousand dollars
($1,000.00) which payment shall constitute payment in full for the first Monthly
Rental Payment due pursuant to Article II.B.
E. All payments of Monthly Rental Payments, Production Royalty or
other money payable under this Lease shall be paid to the Lessors by mailing or
delivering a check to William G. Mouat, Trustee, herein designated by Lessors as
their representative and depository, the Lessors hereby granting to said
depository full power and authority on behalf of the Lessors, their successors
and assigns to collect, and distribute all sums of money due and payable
hereunder. Adequate payment by Lessee to such designated representative and
depository shall be deemed full and adequate payment to all Lessors.
Notwithstanding the death of any Lessor or the transfer, division, or
hypothecation of such Production Royalty interest, payment, or tender of Monthly
Rental Payments and the Production Royalty to the depository as herein
designated shall be binding upon all Lessors, their heirs, personal
representatives, transferees and assignees. Change of designated representative
and depository by Lessors shall not be effective nor binding upon Lessee until
written notice is received of such changed designated representative and
depository.
F. Lessors may elect, by sixty (60) days' prior notice to Lessee, to
take their Production Royalty in kind, and the cost, if any, of doing so shall
be borne entirely by Lessors.
G. If Lessors own less than 100% of the mineral estate, whether in fee
or under mining claim, lease, or contract in the Subject Premises, or any
portion thereof, subject to the paramount title of the United States, then the
Monthly Rental Payments and Production Royalty which are payable under this
Lease shall be reduced in the proportion which Lessors' interest bears to 100%
of the mineral estate of the Subject Premises.
III. TITLE
A. Representations and Warranties. Lessors make the following
representations and warranties effective as of the date of this Lease:
1. With respect to the patented claims, Lessors are in actual and
exclusive possession and own such claims free and clear of all defects, liens
and encumbrances arising by, through or under Lessors.
2. With respect to the Subject Premises, Lessors have no knowledge of
threatened actions, suits, claims, or proceedings.
3. Lessors have delivered or will deliver to Lessee all information
reasonably
2000 Basal Zone Lease
requested by Lessee concerning title to the Subject Premises in Lessors'
possession.
The representations and warranties set forth above shall survive the execution
and delivery of any documents of transfer provided under this Lease.
B. Lessors' Covenants. Lessors covenant that during the term of this
Lease, Lessors shall maintain their interest in the Subject Premises free and
clear of any liens and encumbrances, not in existence on the date hereof, and
not resulting from Lessee's operations and activities hereunder.
C. Disclosures. Lessors and Lessees represent and warrant that they
are unaware of any material facts or circumstances which have not been disclosed
in this Lease, which should be disclosed to the other party in order to prevent
the representations in this Article LII from being materially misleading.
IV. PRODUCTION ROYALTY
A. Ores and Concentrates Sold. Lessee shall pay to Lessors a
Production Royalty of five percent (5%) of the Net Smelter Returns (if sold to a
mill, smelter, or refinery) or Net income (if not sold to a mill or smelter),
whichever is applicable, from the sale of all ores or concentrates from the
Subject Premises. Lessors may take in kind pursuant to Article II.G. By "Net
Smelter Returns" is meant the amount received from the mill or smelter, upon the
sale of such ores or concentrates after deducting from the gross value thereof
the cost of milling, concentrating, processing, smelting and transportation to
the smelter or refinery. By "Net Income" is meant the amount received by Lessee
from a purchaser of ores or concentrates other than from a mill or smelter, less
costs of milling, concentrating, processing, refining and transportation (if
any).
B. Ores and Concentrates Not Sold. If ores, concentrates or other
products are taken in kind (produced and removed, but not sold) by Lessee, then
Lessee shall nevertheless pay the Production Royalty for ores and concentrates
as specified above, the amounts received by Lessee (for purposes of calculating
Net Smelter Returns or Net Income) shall be deemed to be no less than the
amounts Lessee would have received if a sale had been made. Payments shall be
made in accordance with the provision in Article IV.C. Ores, minerals or other
products produced by Lessee from the Subject Premises that are used by Lessee or
its agents in the processing or refining of metals shall not be deemed to be
products taken in kind by Lessee, and no Production Royalty need be paid upon
such products.
C. Payment Production Royalty shall be paid to the Lessors in
accordance with Articles lL.E. and II.G. above and shall be payable within a
period of twenty-one (21) days after receipt of proceeds from sale of ore
concentrates produced from the Subject Premises during
2000 Basal Zone Lease
each mining period of one month. Accompanying each payment, Lessee shall furnish
to Lessor a statement of the production used as a basis for computing Production
Royalty.
V. MAINTENANCE OF MINING CLAIMS
During the continuance of this Lease, Lessee agrees to comply with the
requirements of the state and federal statutes with respect to patented and
unpatented claims within the Subject Premises described in Schedule "A". Lessee
agrees to pay any and all federal and/or state government fees required for the
unpatented claims described in Schedule "A". Lessee will provide to Lessor a
copy of any operating plan(s) submitted to the National Forest Service with
respect to the Subject Premises.
This Lease shall cover and extend to any further or additional right, title,
interest or estate acquired by Lessors, or any of them, in or to the Subject
Premises or any portion thereof.
Lessee agrees to carry on its operations hereunder, diligently and in a good
mjner-like manner, and in accordance with accepted mining practices in the State
of Montana, and Lessee agrees that all mining operations shall be carried on in
a systematic, orderly and economical manner so as to realize, insofar as is
practicable, the full ore resources of the Subject Premises.
VI. TAXES, ENCUMBRANCES AND INJURIES
A. Taxes. Lessee agrees to pay and discharge any and all taxes levied
against the Subject Premises during the life of this Lease, except that in those
cases in which said taxes cover a period during only a part of which this Lease
is in force, Lessee shall pay and discharge only its pro rata share thereof
determined by a comparison of such part with the total period covered.
B. Lessee's Encumbrances. Lessee will not permit any liens or
encumbrances on the patented mining claims of the Subject Premises.
Notwithstanding anything to the contrary in this section, the parties agree that
Lessee has the right to encumber, as it deems necessary or convenient, its
leasehold interest including without limitation its share of production and
proceeds, so as not to interfere with Lessor's Production Royalty.
C. Injuries from Lessee's Operations. Lessee shall save Lessors
harmless from any and all damages, claims, costs and expenses arising from or
growing out of any or all injuries resulting from the operations of Lessee, or
in connection therewith, on the Subject Premises and occurring during the life
of this Lease except as provided in Article XII herein.
2000 Basal Zone Lease
VII. TERMINATION
A. This Lease may be terminated by Lessee at any time after the
expiration of one (1) year from the date of execution of this Lease by notice in
writing thereof to Lessors, to take effect from such date as may be stipulated
by Lessee in such notice, without, subject to the following paragraph, the
Lessee incurring any further liability whatsoever as regards Monthly Rental
Payments, Production Royalty, or other payments.
B. Subject to the foregoing paragraph, upon such termination, Lessee
shall have no further interest or right in the Subject Premises, save the right
to remove its property as provided in Article X, including all stockpiles of
ores and concentrates on which a Production Royalty shall have been paid, and
shall have no obligation or duties with respect to the Subject Premises, except
for reclamation of lands disturbed by Lessee and required by governmental
authority to be reclaimed, and except as herein specifically provided and as to
obligations which have accrued hereunder prior to such termination, but all
fences or enclosures protecting open pits, shafts, tunnels, etc., shall be left
intact and Lessors shall be entitled to retain the entire amount of any moneys
paid under this Lease up to the effective date of termination.
C. This Lease shall not terminate for nonpayment by Lessee of Monthly
Rental Payments or Production Royalty, unless such nonpayment continues for
sixty (60) days after payment was due, subject further to Article XVI.
VIII. FORCE MAJEURE
Lessee shall be excused from the performance of its obligations of every kind,
except the Monthly Rental Payments set forth in Article II during such period or
periods as performance may be made impossible by force nwjeure. By this it is
intended to mean that the Lessee shall be excused from the performance of any
provision of this Agreement for such period of time as performance of such
provision is prevented by fire, flood, earthquake, explosion, lack of
transportation facilities, Act of God, shortage of power or water, strike or
similar labor difficulties, insurrection or mob violence, requirement or
regulation of government, or other causes beyond the reasonable control of
Lessee.
IX. RECORDS
Within a reasonable time, not to exceed six (6) months, following the
termination of this Lease for any cause, Lessee shall furnish to Lessors a copy
of its factual maps, drilling records, drill core and assay and smelter reports
relating to the Subject Premises.
Lessors agree, upon reasonable request by Lessee, to furnish to Lessee such
maps, records,
2000 Basal Zone Lease
reports and documents, as Lessors may possess relating to the Subject Premises.
Such maps, records, reports and documents shall be returned, if requested, to
Lessors within a reasonable time not to exceed ninety (90) days.
X. REMOVAL
Upon the termination of this Lease for any reason, Lessee shall have the right
to remove from the Subject Premises, at any time within the 12-month period
following such termination, all stockpiles of ore and concentrates upon which a
Production Royalty shall have been paid, and all of its machinery, equipment,
tools, structures or other property and improvements, fixtures and structures
constructed, erected or placed on the Subject Premises, or any portion thereof,
by Lessee; provided, however, Lessee shall leave in place all timbering, framing
or enclosures protecting open pits, shafts, tunnels and underground trackage;
and provided that removal of improvements; fixtures and structures shall not
damage the structure remaining on the Subject Premises.
XI. POSSESSORY RIGHTS
While this Lease is in effect, Lessee shall be entitled to exclusive possession
of the Subject Premises, except that Lessors and their representatives,
successors and assigns, at any reasonable time, may go upon the Subject Premises
to inspect the operations of Lessee thereon. Lessors are further entitled to
access to claims not included under this Lease ("Lessors' Claims") across the
Subject Premises for men, equipment, supplies, utilities, water and all other
items as may be reasonably necessary for the exploration, development and
operation of Lessor's Claims; provided, however, that in so doing Lessors shall
not unreasonably hinder Lessee's work; and provided further that the Lessors
hereby release Lessee from liability for any personal injury or death of
employee or representative of Lessors while on the Subject Premises and the
Lessors agree that they will indemnify and save harmless Lessee from liability
for any personal injury to or death of any person or persons, or damage or
destruction of property of Lessee or others done or cause by any employee or
representative of Lessors while so visiting or traversing the Subject Premises.
Lessors further agree to hold Lessee harmless from any liability and to
indemnify Lessee for any claims, cost, expenses and fees arising from Lessors'
activities on Lessors' Claims.
XII. RELOCATION AND AMENDMENT
Lessee shall have the right at any time or times during the term of this Lease,
upon written notice to Lessors, to relocate any one or more of the unpatented
mining claims formerly held but since relinquished by Mouat family interests
whenever such location is deemed necessary or desirable. All such relocations
shall be made by Lessee as agent for Lessors, placing all such amendments and
relocations in the name of Lessors.
2000 Basal Zone Lease
Lessee shall have the further right at its discretion to repair or replace any
claim location monument or marking which has been damaged or destroyed, although
Lessee shall not be obligated to perform such repairs or replacements.
XIII. PATENTING
Upon request of Lessee at any time or times during the term of this Lease,
Lessors agree to undertake and obtain patent to any and all of the mining claims
which are subject to this Lease, as designated by Lessee, and Lessee shall
prepare all documents and compile all data and comply in all respects with the
applicable law, all at the expense of Lessee. Any patent issued shall be in
Lessors' names. Lessors shall execute any and all documents required for this
purpose and shall cooperate fully with Lessee in the patent application and
proceedings subsequent thereto. If Lessors begin patent proceedings and Lessee
thereafter requests Lessors to discontinue such proceedings, or if this Lease is
terminated while patent proceedings are pending, Lessee shall have no further
obligations with respect thereto, except to pay any unpaid expenses to
discontinue, or prior to termination, whichever occurs first.
XIV. COMMINGLING
Lessee shall have the right upon written notice to Lessor to commingle ore and
minerals from the Subject Premises, or any portion thereof.
XIV. DRAFTING OF DOCUMENT - MUTUAL
This Lease has been drafted through the joint efforts of the Lessors and Lessee
and neither of the parties hereto shall be permitted to claim that the drafting
of this Lease was performed or accomplished to a greater extent by the other
party.
XVI. DEFAULT
in the event that Lessee shall default in the performance of any of the terms
and provisions of this Lease, then, after written notice of such default from
Lessors to Lessee, if Lessee does not either:
A. Cure such default within sixty (60) days after such notice; or
B. Commence promptly within said period of sixty (60) days to rectify
such default and continue thereafter to use due diligence to rectify such
default until it is fully remedied or cured, Lessors may terminate this
Agreement at any time thereafter during the continuance of such default by
giving written notice to Lessee of their election to terminate.
2000 Basal Zone Lease
XVII. NOTICE
Any notice required or permitted to be given or served by one of the parties
hereto shall be sufficiently given or served by a communication in writing, sent
by registered mail, to the other party at the address given below:
FOR THE LESSORS:
William C. Mouat
825 Parkhill Drive
Billings, Montana 59102
FOR THE LESSEE:
Alistair R. Turner
5613 5. Prince Street
Littleton, Colorado 80220
Each party may change the address by giving written notice of such
change to the other party.
XVIII. ASSIGNMENT
Lessor agrees that Lessee may assign the benefit of this lease to a joint
venture between Lessee and Idaho Consolidated Metals, Inc. Lessee's assignment
of the benefit of this Lease to other parties may only be made with the consent
of the Lessors, which consent will not be unreasonably withheld.
XIX. CONfIDENTIALITY
Lessors agree that all information developed or acquired by Lessee as a result
of work under this Lease and conveyed to Lessors, or any one of them, including
but not limited to information relating to ore reserves, mineral discoveries,
mining or processing methods, plans, production schedules and other information
shall be kept strictly confidential by Lessors until released or made public by
Lessee.
Neither the Lessee or the Lessor shall make any disclosure to any third party or
the public or give out any publicity, press release or written material relating
to confidential information or this agreement except:
A. To a governmental agency or to the public which the disclosing
party believes in good faith is required by pertinent law or regulation or the
applicable rules of the stock
20(X) Basal Zone Lease
exchange; or
B. Information which is now or hereafter becomes part of the public
domain through no fault of the disclosing participant.
XX. TIME OF ESSENCE; BINDING EFFECT
Time is of the essence in this Lease. Each obligation set forth herein shall
extend to and be binding upon and every benefit inure to the heirs, personal
representatives, successors or assigns of the parties hereto.
XXI. FURTHER ASSURANCES
The parties agree to execute and deliver such other documents as may be
necessary to effectuate the intents and purposes of this Lease.
XXII. ENTIRE AGREEMENT
This Lease may not be amended except in writing by duly authorized
representatives of the parties. This Lease constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements with respect to all matters covered hereby.
XXIII GOVERNING LAW
This Lease shall be governed by Montana Law and the parties hereby submit to the
jurisdiction of the Montana courts, including the federal courts of the district
of Montana.
XXIV. MEMORANDUM OF AGREEMENT
This Lease shall not be recorded without the consent of both parties. Upon the
request of either party, both parties shall execute a Memorandum of this Lease
in recordable form, which memorandum may be recorded.
XXV. COUNTERPARTS
This Lease may be executed in counterparts, no one of which needs to be executed
by all Lessors, and shall be binding upon each party upon execution by that
party, and shall be effective as if all parties had signed the same document.
2000 Basal Zone Lease
IN WITNESS WHEREOF, the parties the day and year first above written. hereto
have caused this Lease to be duly executed as of the day and year first above
written.
LESSORS:
ATTEST
1/19/00 LAURENNE SUE O'DORISIO, President
WILLIAM 0. MOUAT, individually and
as Trustee
ATTEST FORT STOCKTON INVESTMENTS, INC.
1/19/00 LAURENNE SUE O'DORISIO, President
LESSEE:
CHROME CORPORATION OF AMERICA
By: ALISTAIR R. TURNER
Executive Vice President
2000 Basal Zone Lease
IN WITNESS WHEREOF, the parties hereto have caused this Lease to be duly
executed as of the day and year first above written.
LESSORS:
ATTEST MOUAT NICKEL MINES, INC.
LAURENNE SUE O'DORISIO, President
WILLIAM G. MOUAT, individually
and as Trustee
FORT STOCKTON INVESTMENTS, INC.
LAURENNE SUE O'DORISIO, President
LESSEE:
CHROME CORPORATiON OF AMERiCA
By: ALISTAIR R. TURNER
Executive Vice President
2000 Basal Zone Lease
SCHEDULE A
MINING CLAIMS SITUATED IN STILLWATER COUNTY MONTANA
EAST OF THE STLILLWATER RIVER WEST OF THE STLILLWATER RIVER
(18 Patented Lode Claims) (13 Patented Lode Claims)
Big Ben Red Bird
Lucky T Mountain View
L.T.X. Big Thing
H.E.D. Rough Rock
Copper Rough Rock #2
Gold Tip Brooklyn
Beauty Avalanche
Patent Cataract
Pada #1 New Wabeliski
Pada #2 Summit
Opal Something
Dave Stillwater
Emerald Pine
Perseverance (7 Unpatented Lode Claims)
H.R.H. Smelter
Blue Jay Red Bird #2
Copper Bottom Gap
Ridge Sue
(1 Unpatented Lode Claim) Jame
Giant Billie
Westlake
