PROPERTY OPTION AGREEMENT
THIS
AGREEMENT made and entered into as of the 15th day of
March, 2008
BETWEEN: MinQuest
Inc., a company having a mailing address at 0000 Xxxxxxx Xxx,
Xxxx, Xxxxxx, 00000, X.X.X.
(herein called the
“Optionor”)
OF
THE FIRST PART
AND: Patriot
Gold Corp., a company having an office at #000-0000 Xxxxxxxx Xxx., Xxxx
Xxxxxxxxx, X.X., Xxxxxx X0X 0X0
(herein called the
“Optionee”)
OF
THE SECOND PART
WHERAS
the Optionor has represented that it is the sole recorded and beneficial owner
in and to the property called the NK Project (the “Property) described in
Schedule “A” attached hereto;
AND
WHEREAS the Optionor, subject to the Net Smelter Royalty reserved to the
Optionor, now wishes to grant to the Optionee the exclusive right and option to
acquire an undivided 100% right, title and interest in and to the Property on
the terms and conditions hereinafter set forth;
NOW
THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises, the
mutual covenants herein set forth and the sum of One Dollar ($1.00) of lawful
money of U.S. currency now paid by the Optionee to the Optionor (the receipt
whereof is hereby acknowledged), the Parties hereto do hereby mutually covenant
and agree as follows:
1. Definitions
The
following words, phrases and expressions shall have the following
meanings:
(a) “After
Acquired Properties” means any and all mineral interests staked, located,
granted or acquired by or on behalf of either of the parties hereto during
the currency of this Agreement which are located, in the whole or in part,
within one mile of the existing perimeter of the Property;
(b) “Exchange”
means OTCBB Venture Exchange;
1
(c) “Expenditures”
includes all direct or indirect expenses [net of government incentives
and not including payments to the Optionor pursuant to section 4,
paragraphs (a), (b)(ii), (c)(ii), (d)(ii), (e)(ii), (f)(ii), (g)(ii), (h)(ii),
(i)(ii), (j)(ii), and
(k)(ii) hereof ] of or incidental to Mining Operations. The certificate of the
Controller
or other financial officer of the Optionee, together with a statement of
Expenditures
in reasonable detail shall be prima facie evidence of such Expenditures;
the parties hereto agree that Property payments and Property expenditures
are separate payments as outlined in paragraph 4;
(d) “Facilities”
means all mines and plants, including without limitation, all pits,
shafts, adits, haulageways, raises and other underground workings, and all
buildings, plants, facilities and other structures, fixtures and improvements,
and all other property, whether fixed or moveable, as the same may
exist at any time in, or on the Property and relating to the operator
of the Property as a mine or outside the Property if for the exclusive
benefit of the Property only;
(e) “Force
Majeure” means an event beyond the reasonable control of the Opionee
that prevents or delays it from conducting the activities contemplated
by this Agreement other than the making of payments referred
to in Section 4 herein. Such events shall include but not be limited
to acts
of God, war, insurrection, action of governmental agencies reflecting
an instability in government procedures, or delay in permitting unacceptable
to both Optionor and Optionee;
(f) “Mineral
Products” means the commercial end products derived from operating
the Property as a mine:
(g) “Mining
Operations” includes:
(i) every
kind of work done on or with respect to the Property by or under the
direction of the Optionee during the Option Period or pursuant
to an approved Work Program; and
(ii) without
limiting the generality of the foregoing, including all work capable
of receiving assessment credits pursuant to the Mines and Minerals
act of Nevada and the work of assessment, geophysical,
geochemical and geological surveys, studies and mapping,
investigating, drilling, designing, examining equipping, improving,
surveying, shaft sinking, raising, cross-cutting and drifting,
searching for, digging, trucking, sampling, working and procuring
minerals, ores and metals, in surveying and bringing any mineral
claims to lease or patent, in doing all other work usually considered
to be prospecting, exploration, development, a feasibility
study, mining work, milling concentration, beneficiation or ores
and concentrates, as well as the separation and extraction of Mineral
Products and all reclamation, restoration and
permittingactivities;
2
(h) “Net
Smelter Royalty” means that Net Smelter Royalty as defined in Schedule
“B” attached hereto (“NSR”);
(i) “Option”
means the option granted by the Optionor to the Optionee to acquire,
subject to the NSR reserved to the Optionor, an undivided 100% right,
title and interest in and to the Property as more particularly set forth
in
Section 4;
(j) “Option
Period” means the period from the date hereof to the date at which the
Optionee has performed its obligations to acquire its 100% interest
in the Property as set out in Section 4 hereof, which ever shall be the
lesser period;
(k) “Property”
means the mineral claims described in Schedule “A”;
(l) “Filing
Fees” means all fees, payments and expenses necessary to keep the mineral claims
in good standing with federal, state and local government entities;
(m) “Work
Program” means a program of work reasonably acceptable to both parties
in respect of a particular Property, contained in a written document
setting
out in reasonable detail;
(i) An
outline of the Mining Operations proposed to be undertaken and
conducted on the Property, specifically stating the period of time
during which the work contemplated by the proposed program
is to be done and performed;
(ii) The
estimated cost of such Mining Operations including a proposed
budget providing for estimated monthly cash requirements
in advance and giving reasonable details; and
(iii) The
identity and credentials of the person or persons undertaking the
Mining Operations so proposed if not the Optionor, reasonably
acceptable to both parties hereto.
2. Headings
Any heading, caption or index hereto
shall not be used in any way in construing or
interpreting any provision hereof.
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3. Singular,
Plural
Whenever the singular or masculine or
neuter is used in this Agreement, the same shall be
construed as meaning plural or feminine or body politic or corporate or vice
versa, as
the context so requires.
4. Option
The Optionor hereby grants to the
Optionee the sole and exclusive right and option
(the “Option”) to earn a 100% interest in the Property exercisable as
follows:
(a) The
Optionee paying the sum of $20,000 USD to the Optionor by way of cash and
reimburse all holding costs and expenses of location of mining claims, such
expenses to be identified in Schedule “C”;
(b) On
or before March 15th,
2009
(i) The
Optionee incurring Expenditures of $50,000 USD on the property;
(ii) The
Optionee paying $20,000 USD to the Optionor;
(c) On
or before March 15th,
2010
(i) The
Optionee incurring Expenditures of $150,000 USD on the Property
in addition to the expenditures referred to in clause (b)(i);
(ii) The
Optionee paying $20,000 U.S to the Optionor;
(d) On
or before March 15th,
2011
(i) The
Optionee incurring Expenditures of $200,000 USD on the Property
in addition to the expenditures referred to in clauses (b)(i)
and (c)(i) hereof; and
(ii) The
Optionee paying $35,000 USD to the Optionor;
(e) On
or before March 15th,
2012
(i) The
Optionee incurring Expenditures of $350,000 USD on the Property
in addition to the expenditures referred to in clauses (b)(i),
(c)(i) and (d)(i) hereof; and
(ii) The
Optionee paying $45,000 USD to the Optionor; and
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(f) On
or before March 15th,
2013
(i) The
Optionee incurring Expenditures of $200,000 USD on the Property
in addition to the expenditures referred to in clauses (b)(i),
(c)(i), (d)(i) and (e)(i) hereof;
(ii) The
Optionee paying $50,000 USD to the Optionor.
(g) On
or before March 15th,
2014
(i) The
Optionee incurring Expenditures of $200,000 USD on the Property
in addition to the expenditures referred to in clauses (b)(i),
(c)(i), (d)(i) and (e)(i) and (f)(i) hereof
(ii) The
Optionee paying $50,000 USD to the Optionor; and
(h) On
or before March 15th,
2015
(i) The
Optionee incurring Expenditures of $200,000 USD on the Property
in addition to the expenditures referred to in clauses (b)(i),
(c)(i), (d)(i), (e)(i), (f)(i) and (g)(i) hereof;
(ii) The
Optionee paying $50,000 USD to the Optionor; and
(i) On
or before March 15th,
2016
(i) The
Optionee incurring Expenditures of $200,000 USD on the Property
in addition to the expenditures referred to in clauses (b)(i),
(c)(i), (d)(i), (e)(i), (f)(i), (g)(i) and (h)(i) hereof;
(ii) The
Optionee paying $50,000 USD to the Optionor; and
(j) On
or before March 15th,
2017
(i) The
Optionee incurring Expenditures of $200,000 USD on the Property
in addition to the expenditures referred to in clauses (b)(i),
(c)(i), (d)(i), (e)(i), (f)(i), (g)(i), (h)(i) and (i)(i) hereof;
(ii) The
Optionee paying $50,000 USD to the Optionor; and
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(k) On
or before March 15th,
2018
(i) The
Optionee incurring Expenditures of $750,000 USD on the Property
in addition to the expenditures referred to in clauses (b)(i),
(c)(i), (d)(i), (e)(i), (f)(i), (g)(i), (h)(i), (i)(i) and (j)(i)
hereof;
(ii) Optionee
paying $100,000 USD to the Optionor. Following which the
Optionee shall be deemed to have exercised the Option (the “Exercise
Date”) and shall be entitled to an undivided 100% right, title and
interest in and to the Property with the full right and authority
to equip the Property for production and operate the Property
as a mine subject to the rights of the Optionor to receive the
NSR.
The
Optionee shall have the one time right exercisable for 90 days following
completion of a bankable feasibility study to buy up to one half (50%) of the
Optionor’s NSR interest (i.e. an amount equal to 1.5% of the NSR interest) for
USD $2,250,000. The right to purchase the said NSR interest shall be exercised
by the Optionee providing the Optionor with notice of the purchase accompanied
by payment in the amount of USD $2,250,000.
The
Optionor and Optionee understand and confirm that all Expenditures incurred in a
particular period, including any excess in the amount of Expenditures required
to be incurred to maintain the Option during such period, shall be carried over
and included in the aggregate amount of Expenditures for the subsequent period,
but not to exceed more than three (3) consecutive years.
Notwithstanding
paragraphs (b)(i), (c)(i), (d)(i), (e)(i), (f)(i), (g)(i), (h)(i), (i)(i),
(j)(i) and (k)(i) if the Optionee has not incurred the requisite Expenditures to
maintain its option in good standing prior to March 15th of
any given year, the Optionee may pay to the Optionor within 60 days following
the expiry of such period, the amount of the deficiency and such amount shall
thereupon be deemed to have been Expenditures incurred by the Optionee during
such period.
(l) The
doing of any act or the incurrence of any cash payments by the Optionee
shall not obligate the Optionee to do any further acts or make any
further payments with the exception of fees and expenses to keep said property
in good standing as per paragraph 8b.
5. Transfer
of Title
Upon Optionee’s completion of all
requirements to earn a 100 percent interest in the Property, the Optionor will
deliver or cause to be delivered to the Optionee’s solicitors a duly executed
transfer of Property in favor of the Optionee (the “Optionee Transfer”). The
Optionee shall be entitled to record the Optionee Transfer with the appropriate
government offices to effect transfer of legal title of the Property into its
own name upon
the full and complete exercise of the Option by the Optionee. In the event the
Optionee Transfer is recorded the Optionor shall be entitled to record notice of
its NSR interest.
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6. Mining
Operations during Option
During the Option Period, the Optionor
may provide its mineral exploration expertise on the Property, on a consultation
basis for and on behalf of the Optionee, at the election of the
Optionee. However, the Optionee has the exclusive right to determine
what Expenditures and Mining Operations it will perform, when they will be
performed, and by whom. If the Optionee elects to use the mineral expertise and
consulting services of the Optionor, then the Optionor shall invoice for time
for consulting services and related travel expenses from time to time and the
prompt payment of such invoices when due shall constitute a portion of
Expenditures by the Optionee as contemplated under Section 4
hereof.
During the currency of this Agreement,
the Optionee, its servants, agents and workmen and any persons duly authorized
by the Optionee, shall have the right of access to and from and to enter upon
and take possession of and prospect, explore and develop the Property in such
manner as the Optionee in its sole discretion may deem advisable and shall have
the right to remove and ship therefrom ores, minerals, metals, or other products
recovered in any manner therefrom.
7. Assignment
During the Option Term, both parties
shall have the right to sell, transfer, assign, mortgage, pledge its interest in
this Agreement or its right or interest in the Property. It will be a condition
of any assignment under this Agreement that such assignee shall agree in writing
to be bound by the terms of this Agreement applicable to the
assignor.
8. Termination
This Agreement shall forthwith
terminate in circumstances where:
(a) The
Optionee shall fail to comply with any of its obligations hereunder,
subject
to Force Majeure, and within 30 days of receipt by the Optionee of written
notice from the Optionor of such default, the Optionee has not:
(i) cured
such default, or commenced proceedings to cure such default
and prosecuted same to completion without undue delay;
or
(ii) given
the Optionor notice that it denies that such default has
occurred.
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In the
event that the Optionee gives notice that it denies that a default has occurred,
the Opionee shall not be deemed to be in default until the matter shall have
been determined finally through such means of dispute resolution as such matter
has been subjected to by either party; or
(b) The
Optionee gives notice of termination to the Optionor, which it shall be at
liberty to do at any timeafter the execution of this Agreement. If and when the
Optionee elects to terminate this Agreement, or terminate one of the projects
comprising the Property, at such time the Property or the specific project will
be returned to the Optionor and all claim fees, payments and expenses will be
paid in order to maintain the property in good standing for one year after
termination.
Upon the
termination of this Agreement under this Section 8, the Optionee shall cease to
be liable to the Optionor in debt, damages, claim fees or otherwise, other than
to pay the claim fees as described in paragraph (b) of this Section 8 and all
liabilities referred to in Section 11.
Upon
termination of this Agreement under this Section 8, the Optionee shall return
the Property, including all property within the designated boundary of the area
of interest, to the Optionor. The Optionee shall vacate the Property within a
reasonable time after such termination and relinquishment, but shall have the
right of access to the Property for a period of six months thereafter for the
purpose of removing its chattels, machinery, equipment and
fixtures.
9. Representations,
Optionies and Covenants of the Optionor
The Optionor represents, options and
covenants to and with the Optionee as follows:
(a) The
Optionor is a company duly organized validly existing and in good
standing under the laws of Nevada;
(b) The
Optionor has full power and authority to carry on its business and to
enter
into this Agreement and any agreement or instrument referred to or contemplated
by this Agreement;
(c) Neither
the execution and delivery of this Agreement, nor any of the agreements referred
to herein or contemplated hereby, nor the consummation of the transactions
hereby contemplated hereby, nor the consummation
of the transactions hereby contemplated conflict with, result in
the breach of or accelerate the performance required by, any agreement
to which it is a party;
(d) The
execution and delivery of this Agreement and the agreements contemplated hereby
will not violate or result in the breach of the laws of any
jurisdiction applicable or pertaining thereto or of its constating documents;
8
(e) The
Agreement constitutes a legal, valid and binding obligation of the
Optionor;
(f) The
Property is accurately described in Schedule “A”, is in good standing under the
laws of the jurisdiction in which it is located and is free and clear of all
liens, charges and encumbrances;
(g) The
Optionor is the sole recorded and beneficial owner of the Property and has
the exclusive right to enter into this Agreement and all necessary authority
to transfer its interest in the Property in accordance with the terms of this
Agreement;
(h) No
Person, firm or corporation has any proprietary or possessorty interest
in the
Property other than the Optionor, and no person, firm or corporation is entitled
to any royalty or other payment in the nature of rent or royalty on any
minerals, ores, metals or concentrates or any other such products removed from
the Property other than the government of the state of Nevada pursuant to
statute; notwithstanding any Federal, State or County royalties or net proceeds
tax derived from mining operations.
(i) Upon
request by the Optionee, and at the sole cost of the Optionee, the Optionor
shall deliver or cause to be delivered to the Optionee copies of all available
maps and other documents and data in its possession respecting the Property.
Nothing will be withheld, hidden, or kept from the Optionee, whether the data or
information is held or not by the Optionor; and
(j) Subject
to performance by the Optionee of its obligations under Section 4, during the
Option Period, the Optionor will keep the Property in good standing, free and
clear of all liens, charges and encumbrances, will carry out all Mining
Operations on the Property in a miner-like fashion if the Optionee elects to use
the mining expertise and consulting services of the Optionor, will obtain all
necessary licenses and permits as shall be necessary and will file all
applicable work up to the legal limits as assessment work under the Mines and
Mineral Act (Nevada)
10. Representations,
Optionies and Covenants of the Optionee
The
Optionee represents, Options and covenants to and with the Optionor
that:
(a) The
Optionee is a company duly organized validly existing and in good standing under
the laws of Nevada;
9
(b) The
Optionee has full power and authority to carry on its business and to enter into
this Agreement and any agreement or instrument referred to or contemplated by
this Agreement;
(c) Neither
the execution and delivery of this Agreement, nor any of the agreements referred
to herein or contemplated hereby, nor the consummation of the transactions
hereby contemplated conflict with,
result in the breach of or accelerate
the performance required by, any agreement to which it is a party;
(d) The
execution and delivery of this Agreement and the agreements contemplated hereby
will not violate or result in the breach of the laws of any jurisdiction
applicable or pertaining thereto or of its constating documents;
and
(e) This
Agreement constitutes a legal, valid and binding obligation of the
Optionee.
11. Indemnity
and Survival of Representation
The representation and Optionies
hereinbefore set out are conditions on which the parties have relied in entering
into this Agreement and shall survive the acquisition of any interest in the
Property by the Optionee and each of the parties will indemnify and save the
other harmless from all loss, damage, costs, actions and suits arising out of or
in connection with any breach of any representation, option, covenant, agreement
or condition made by them and contained in this Agreement.
The Optionor agrees to indemnify and
save harmless the Optionee from any liability to which it may be subject arising
from any Mining Operations carried out by the Optionor or at its direction on
the Property. The Optionee agrees to indemnify and save harmless the Optionor
from any liability to which it may be subject arising from any Mining Operations
carried out by the Optionee or at its direction on the Property.
The Optionor agrees to indemnify and
save harmless the Optionee from any liability arising form any and every kind of
work done on or with respect to the Property prior to the signing of this
Agreement (the “Prior Operations”). Without limiting the generality of the
foregoing, Prior Operations includes all work capable of receiving assessment
credits pursuant to The Mines and Minerals Act of Nevada and the work of
assessment, geophysical, geochemical and geological surveys, studies and
mapping, investigating, drilling, designing, examining equipping, improving,
surveying, shaft sinking, raising, cross-cutting and drifting, searching for,
digging, trucking, sampling, working and procuring minerals, ores and metals, in
surveying and bringing any mineral claims to lease or patent, in doing all other
work usually considered to be prospecting, exploration, development, a
feasibility study, mining work, milling, concentration, beneficiation of ores
and concentrates, as well as the separation and extraction of Mineral Products
and all reclamation, restoration and permitting activities.
10
12. Confidentiality
The parties hereto agree to hold in
confidence all information obtained in confidence in respect of the Property or
otherwise in connection with this Agreement other than in circumstances where a
party has an obligation to disclose such information in accordance with
applicable securities legislation, in which case such disclosure shall only be
made after consultation with the other party.
13. Notice
All notices, consents, demands and
requests ( in this Section 13 called the “Communication”) required or permitted
to be given under this Agreement shall be in writing and may be delivered
personally sent by telegram, by telex or telecopier or other electronic means or
may be forwarded by first class prepaid registered mail to the parties at their
addresses first above written. Any Communication delivered personally or sent by
telegram, telex or telecopier or other electronic means including email shall be
deemed to have been given and received on the second business day next following
the date of sending. Any Communication mailed as aforesaid shall be deemed to
have been given and received on the fifth business day following the date it is
posted, addressed to the parties at their addresses first above written or to
such other address or addresses as either party may from time to time specify by
notice to the other; provided, however, that if there shall be a mail strike,
slowdown or other labor dispute which might effect delivery of the Communication
by mail, then the Communication shall be effective only if actually delivered.
For purposes of this agreement and as a definition of address the Optionor’s
email shall be defined as xxxxxx@xxxxxxx.xxx
and the Optionor’s telecopier number is 000-000-0000. The Optionee’s email shall
be defined as xxxx@xxxxxxxxxxxxxxx.xxx
and the Optionee’s telecopier number is 000-000-0000. Notice will be provided to
each party should their respective email address change.
14. Further
Assurances
Each of the parties to this Agreement
shall from time to time and at all times do all such further acts and execute
and deliver all further deeds and documents as shall be reasonably required in
order to fully perform and carry out the terms of this Agreement
15. Entire
Agreement
The parties hereto acknowledge that
they have expressed herein the entire understanding and obligation of this
Agreement and it is expressly understood and agreed that no implied covenant,
condition, term or reservation, shall be read into this Agreement relating to or
concerning any matter or operation provided for herein
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16. Proper
Law and Arbitration
This
Agreement will be governed by and construed in accordance with the laws of the
State of Nevada and the laws of the United States of America. The parties hereto
hereby irrevocably attorn to the jurisdiction of the Courts of Nevada. All
disputes arising out of or in connection with this Agreement, or in respect of
any defined legal relationship associated therewith or derived therefrom, shall
be referred to and finally resolved by a sole arbitrator by arbitration under
the rules of The Arbitration Act of Nevada.
17. Enurement
This Agreement will ensure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.
18. After
Acquired Properties
(i) The
parties covenant and agree, each with the other, that any and all After Acquired
Properties shall be subject to the terms and conditions of this Agreement
and shall be added to and deemed, for the purposes hereof, to be
included in the Property. Any costs incurred by the Optionor in staking,
locating, recording or otherwise acquiring any “After Acquired Properties” will
be deemed to be Mining Operations for which the Optionor will be entitled to
reimbursements as part of the Expenditures payable by the Optionee
hereunder.
(ii) Any
additional claims agreed by the Optionee to be staked by the Optionor within 1
mile from the existing perimeter of the Property boundaries shall form party of
this Agreement. The Optionee will reimburse the Optionor for the costs of
staking the additional claims, unless the Optionee does not elect to have the
additional claims subject to this Agreement.
19. Default
Notwithstanding anything in this
Agreement to the contrary if any party (a “Defaulting Party”) is in default of
any requirement herein set forth the party affected by such default shall give
written notice to the Defaulting Party specifying the default and the Defaulting
Party shall not lose any rights under this Agreement, unless thirty (30) days
after the giving of notice of default by the affected party the Defaulting Party
has failed to take reasonable steps to cure the default by the appropriate
performance and if the Defaulting Party fails within such period to take
reasonable steps to cure any such default, the affected party shall be entitled
to seek any remedy it may have on account of such default including, without
limiting, termination of this Agreement.
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20. Payment
All references to monies herein shall
be in US funds unless otherwise specified. The Optionee shall make payments for
the Expenditures incurred by the Optionor no later than 30 days after the
receipt of invoices delivered by the Optionee to do any acts or make any
payments hereunder, and any act or payment or payments as shall be made
hereunder shall not be construed as obligating the Optionee to do any further
act or make any further payment or payments.
21. Supersedes
Previous Agreements
This Agreement supersedes and replaces
all previous oral or written agreements, memoranda, correspondence or other
communications between the parties hereto relating to the subject matter
hereof.
IN WITNESS WHEREOF the Parties
hereto have duly executed this Agreement effective as of the 15th day of
March, 2008
MinQuest
Inc.
Per: /S/ Xxxxxxx X.
Xxxx,
Xxxxxxx
X. Xxxx, President
Per: /S/ Xxxxxx
Xxxxx
Xxxxxx
Xxxxx, President
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SCHEDULE
“A”
Sections
13, 24, 25, T14N, R34E, MDB&M, Mineral County, Nevada
CLAIM
NAME NMC
NUMBER
NK
1
Pending
NK
2
Pending
NK
3
Pending
NK
4
Pending
NK
5
Pending
NK
6
Pending
NK
7
Pending
NK
8
Pending
NK
9
Pending
NK
10 Pending
NK
11 Pending
NK
12 Pending
NK
13 Pending
NK
14 Pending
NK
15 Pending
NK
16 Pending
NK
17 Pending
NK
18 Pending
NK
19 Pending
NK
20 Pending
NK
21 Pending
NK
22 Pending
NK
23 Pending
NK
24 Pending
NK
25 Pending
NK
26 Pending
NK
27 Pending
NK
28 Pending
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SCHEDULE
“B”
“Net
Smelter Return” shall mean the aggregate proceeds received by the Optionee from
time to time from any smelter or other purchaser from the sale of any ores,
concentrates, metals or any other material of commercial value produced by and
from the Property after deducting from such proceeds the following charges only
to the extent that they are not deducted by the smelter or other purchaser in
computing the proceeds:
(a) The
cost of transportation of the ores, concentrates or metals from the Property to
such smelter or other purchaser, including related insurance;
(b) Smelting
and refining charges including penalties; and
The
Optionee shall reserve and pay to the Optionor a NSR equal to three (3%) percent
of Net
Smelter Return.
Payment
of NSR payable to the Optionor hereunder shall be made quarterly within thirty
(30) days
after the end of each calendar quarter during which the Optionee receives
Net
Smelter Returns in USD dollars or in kind bullion at the iscretion of the
Optionor. Within
(60) days after the end of each calendar quarter for which the NSR for such
year
shall be audited by the Optionee and any adjustments in the payments of NSR
to the
Optionor shall be made forthwith after completion of the audit. All payments of
NSR to
the Optionor for a calendar year shall be deemed final and in full satisfaction
of all
obligations of the Optionee in respect thereof if such payments or the
calculations thereof
are not disputed by the Optionor of the same audited statement. The Optionee
shall
maintain accurate records relevant to the determination of the NSR and the
Optionor or its
authorized agent, shall be permitted the right to examine such records at all
reasonable
times.
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SCHEDULE
“C”
|
Claim
expenses 28 claims @ $100/claim
|
$ | 2,800.00 | ||
|
BLM
Location filing fees 28 @ $170
|
$ | 4,760.00 | ||
|
County
Location fees 28 @ $35.50
|
$ | 994.00 | ||
|
Annual
filing fees BLM, County
|
$ | 0.00 | ||
|
Total
|
$ | 8,554.00 |
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