AGREEMENT
This Agreement made and effective this first day of January, 1997, by and
between TRI-CON MINING INC. (hereinafter "TCMI") an Alaska corporation whose
address is 000 Xx. Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxx, 00000
and
SILVERADO MINES (U.S.) INC. (hereinafter "Silverado") an Alaska corporation
whose address is X.X. Xxx 00000, Xxxxxxxxx, Xxxxxx, 00000.
WITNESSETH:
A. WHEREAS, Silverado desires to retain TCMI to serve as administrator and
operator of mining claims situate within the State of Alaska, and
B. WHEREAS, TCMI desires to serve as administrator and operator for Silverado
on the said claims,
NOW THEREFORE, in consideration of these premises, Silverado hereby appoints
TCMI as administrator and operator, and TCMI hereby accepts such appointment,
subject to the terms and conditions hereinafter set forth.
1. TERM
The term of this Agreement shall be perpetual, unless cancelled by thirty
days advance written notice by one party to the other.
2. WARRANTIES AND REPRESENTATIONS
Silverado warrants that it has the full right and power to enter into
this Agreement on the terms and conditions contained herein.
3. UNDERTAKINGS BY TCMI
3.1 TCMI undertakes to administer, explore, develop, operate, and reclaim
the said claims in a professional and workmanlike manner. Further, at
Silverado's specific written direction, TCMI also agrees to assist Silverado in
vending its claims to those prospective purchasers specifically identified to
TCMI by Silverado.
3.2 TCMI may construct, maintain, use and at its election remove such
structures, facilities, equipment, roadways, haulageways and such other
improvements located on the said claims as it may deem necessary, useful or
convenient in the conduct of its operations upon the said claims.
3.3 TCMI may also use and consume so much of the surface of the said claims
as may be necessary, useful, or convenient for carrying out the purposes of this
Agreement.
3.4 TCMI shall make available, for use in connection with the operations on
the said claims, the knowledge and experience of such officers and employees
as are reasonably required for the proper performance of such services.
3.5 TCMI acknowledges that its operation on the said claims shall always be
subject to general directions from Silverado.
4. PAYMENTS TO TCMI FOR ADMINISTRATION AND OPERATION
4.1 TCMI shall administer said claims for a base fee of Ten Thousand
Dollars ($10,000.00) per month, plus costs, below.
4.2 TCMI shall explore, develop, mine, and reclaim said claims at
Silverado's cost. For the purpose of this Agreement, the term "cost" shall mean
115% of all costs incurred by TCMI which are reasonably attributable to
its operations on the said claims including but not limited to the following:
a) the cost of all full time and part time employees; and cost of
contractors;
b) the actual costs incurred in mobilization and demobilization;
c) reasonable travel and lodging expenses;
d) insurance premiums;
e) the cost of renting equipment;
f) the actual costs of material and supplies consumed by the work;
g) support charges - a sum equal to twenty-five percent (25%) per annum
on all project acquisition, exploration, and development expenditures;
fifteen percent (15%) annum for all operating expenditures; and
fifteen percent (15%) per annum for all reclamation expenditures.
Capital purchases shall be exempt from additional charges.
h) a "stand by" charge of 150% of (a)-(g) when TCMI is on site and
prepared to perform work, but unable to do so for causes attributable
to Silverado;
i) a charge of one hundred dollars ($150.00) per hour for the time spent
by each of TCMI's officers on Silverado's behalf;
j) notwithstanding any of the above, no TCMI employee who serves as a
director on Silverado's behalf shall xxxx Silverado for any of his
time.
4.3 Silverado shall make payments to the account of TCMI
substantially in accordance with a budget submitted to and accepted by
Silverado. Silverado shall from time to time advance to TCMI's account funds to
cover anticipated costs in conjunction with the requirements of the approved
budget. TCMI may draw from such account the costs incurred by it at cost plus
fifteen percent (15%), and shall account monthly in writing to Silverado for the
amounts drawn in sufficient detail to enable Silverado to determine the
correctness thereof. Amounts unpaid by Silverado to TCMI within 30 days of the
date the subject cost is incurred by TCMI shall be deemed as an unsecured loan
from TCMI to Silverado, with interest due and payable at a rate of twelve
percent (12%) per annum.
4.4 TCMI will submit to Silverado written progress reports on the
operations on the development of the said claims.
4.5 Silverado shall have the right to enter upon the said claims and
inspect the same at all times with or without notice to TCMI, at Silverado's
sole risk and expense.
4.6 Within ninety (90) days after the end of each calendar year, TCMI shall
submit an annual cost report to Silverado, at which time Silverado will have
thirty (30) additional days to notify TCMI of Silverado's intention to audit the
report, at its own cost and expense. If notice of an audit is not received by
TCMI within 30 days of delivery of its report to Silverado, then the costs of
the work, and all reports, reconciliation's, and invoices of TCMI shall be
conclusively deemed to be true and correct.
5. COST ADJUSTMENT
5.1 TCMI may increase its hourly rates each year beginning one year after
the effective date of this agreement, by the percentage increase in the CPI
where "CPI" means the "Consumer Price Index" as published by the Department of
Labor of the State of Alaska.
6. OBLIGATION AND INDEMNITY BY PARTIES
6.1 TCMI agrees to comply with valid and applicable local, state, and
federal laws and regulations governing its operations hereunder.
6.2 TCMI shall pay all expenses incurred by it in its operations on the
said claims and shall allow no liens to remain upon the said claims;
provided however, that if TCMI disputes the validity or amount of any lien
asserted against the said claims, it shall not be required to discharge the
same until the amount and validity thereof have been finally determined.
6.3 TCMI shall indemnify and defend Silverado against any suit, claim,
judgment or demand whatsoever arising out of the negligence of TCMI,
provided however that this provision shall not apply to any such suit,
claim, judgment or demand caused in whole or in part by Silverado.
6.4 During the term of this Agreement and any extension thereof, TCMI shall
procure and maintain comprehensive general liability insurance having the
following coverage limits per occurrence:
Property Damage Insurance: $1,500,000.00
Comprehensive General Liability: $1,000,000.00
TCMI shall cause Silverado to be added to such policy as an additional
named insured.
7. TERMINATION
7.1 TCMI shall have the right to terminate this Agreement in its entirety
at any time upon 30 days advance written notice to Silverado in the manner
provided in paragraph 12.
7.2 Upon the date sixty (60) days after notice of termination, all rights
and interest of TCMI under this Agreement shall terminate and TCMI shall not
be required to perform any further obligations hereunder concerning the said
claims, except as to obligations, if any, the occurrence of which precedes
termination.
8. PROTECTION OF PROPRIETARY INFORMATION
Nothing contained herein is intended to prevent TCMI from performing
services for other companies similar to those undertaken herein; provided that
the performance of such services shall not interfere with the proper and
efficient performance by TCMI or the services to be rendered hereunder; provided
further that TCMI shall not make use of or divulge to others any trade
information of proprietary nature of which it becomes aware as a result of
this Agreement with Silverado.
9. FORCE MAJEURE
9.1 TCMI shall not be liable for failure to perform any of its obligations
hereunder during periods in which performance is prevented by any cause
hereinafter called "force majeure"
9.2 For purpose of the Agreement, the term force majeure shall include Acts
of God, fire, flood, undue shortage of power, strikes, insurrection or mob
violence, requirements or regulations of the government and other causes of a
similar nature.
10. DISPUTES NOT TO INTERRUPT OPERATIONS, ARBITRATION
10.1 In the event of any dispute between parties hereto, operations shall
be continued in the same manner as prior to the dispute until the matters in
dispute have been finally resolved between the parties.
10.2 The parties hereto may agree to submit any dispute arising out of, or
relating to, this Agreement to arbitration in accordance with the Arbitration
Rules of the American Arbitration Association and the provision of Title 9
Alaska Statues, Chapter 43, in which case judgment upon the award rendered by
the Arbitrators(s) may be entered in any court having jurisdiction thereof.
10.2.1. The place of any such arbitration shall be at Fairbanks,
Alaska.
10.2.2. The right to invoke arbitration is not in derogation of any
other rights that the parties may have to settle disputes
through compromise or litigation.
11. NOTICE
11.1 Any notice or communication required or permitted hereunder shall be
in writing and shall be effective when personally delivered or shall be
effective when addressed:
If to Silverado:
----------------
Silverado Mines Ltd.
000 - 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Silverado Mines (U.S.), Inc.
X.X. Xxx 00000
Xxxxxxxxx, XX 00000
If to TCMI:
-----------
Tri-Con Mining Inc.
000 Xx. Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Tri-Con Mining Ltd.
000 - 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
and deposited, postage prepaid, certified, in the United States or Canadian
mail.
11.2 Either party may, by notice to the other as aforesaid, change its
mailing address for future notice hereunder.
12. BINDING EFFECT, ASSIGNMENT
12.1 If Silverado assigns the said claims in whole or in part to any third
party, the provisions hereof shall inure to the benefit of and be binding upon
its respective successors and assigns, but no change or division of ownership
of the said claims however accomplished, shall operate to enlarge the
obligations or diminish the rights of TCMI hereunder.
12.2 TCMI shall have no right to assign its rights or obligations
under this Agreement without the express prior written consent of Silverado.
13. CONSTRUCTION: ENTIRE AGREEMENT
13.1 The Agreement shall be construed in accordance with the laws of the
State of Alaska.
13.2 The headings and subheadings used herein are for convenience only and
shall not be deemed to be a part of the Agreement for purposes of
construction thereof.
13.3 All of the agreements and understandings of the parties with reference
to the said claims are embodied in this Agreement, which supersedes all prior
Agreements or understandings between the parties with reference thereto.
13.4 The compensation herein provided shall be deemed to be full payment to
TCMI for its operations hereunder.
13.5 Should any part of this Agreement be declared invalid for any reason
by a court of competent jurisdiction such declaration shall not affect the
balance of this Agreement.
13.6 All dollar amounts herein are stated in United States currency.
IN WITNESS WHEREOF, the parties have executed this Agreement at Vancouver,
British Columbia, the day and year first above written.
Tri-Con Mining Ltd. by: Silverado Mines (U.S.) Inc. by:
/s/ Alex Homenuke /s/ Xxxxx X. Xxxxxxx
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Its Senior Vice President Its President
