EXHIBIT 10.3
AGREEMENT NO. L99026
UNICO INC.
AND
ASARCO Incorporated
LEAD CONCENTRATES
DATED: JUNE 1, 1999
AGREEMENT NO. L99026
UNICO INC., 000 X. Xxxxxxx Xxxx., #000, Xxx Xxxxx XX 00000, hereinafter called
"UNICO." agrees to sell and deliver . . . . . .
AND
ASARCO Incorporated, 000 Xxxxxx Xxxx, Xxx Xxxx, XX 00000, hereinafter called
"ASARCO," agrees to buy . . . . . . . .
1. PRODUCT
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Product shall be lead concentrates produced from the Deer Trail Mine owned by
UNICO.
2. QUALITY & ANALYSIS
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The product shall be of substantially the following analysis:
Pb: 55 - 65% Fe: 3-5% CaO: 0.2%
Cu: 1 - 3% Sb: <0.1% S: 18- 22%
Cd: <0.1% Ag: 40- 80 opst Zn: 5-10%
As: <0.10% Au: 0.02- 0.1 opst Hg: <10 ppm
Bi: <0.10% Al2O3: 1- 2%
Si02: 3-5% MgO: 0.2%
ASARCO reserves the right to discontinue receipt of product and/or return
product at the shipper's expense in the event that the product differs
substantially from the analysis contained herein.
3. QUANTITY
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The quantity shall be approximately 1200 dry short tons per year to be shipped
at a rate of 100 tons per month.
4. DURATION
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The period of this agreement shall commence with product delivered on or after
August 1, 1999 and shall continue through and including July 31, 2000.
However, this agreement can be canceled by ASARCO on no less than sixty (60)
days written notice.
5. DELIVERY
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Freight prepaid F.O.B. truck at ASARCO's East Helena,
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UNICO, INC. AGREEMENT NO. L99026
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Montana plant. The delivery is to be scheduled by appointment, details of
which will be mutua1ly arranged with East Helena via fax or telephone through
Xx. Xxx Xxxxxxx at (000) 000-0000 or (000) 000-0000. Truck receiving hours are
presently from 8:00 a.m. to 2:00 p.m., Monday through Friday, major holidays
excepted.
6. SHIPMENT
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Material to be shipped in bulk in trucks.
7. TITLE & RISKS
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Title and all risks of loss shall pass to ASARCO upon delivery of product.
8. DATE OF DELIVERY
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The date of delivery of product is the date the last truck of each lot arrives
at East Helena.
9. PRICE
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The purchase price of the product is the sum of the payments less the sum of
the deductions specified below.
PAYMENTS
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10. SILVER
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Deduct 1.0 xxxx ounce per short dry ton of product from the silver assay and
pay for 95% of the remaining silver content at the London Spot quotation for
refined silver, as published in Xxxxx'x Metals Week, averaged for the
Quotational Period, less a deduction of $0.43 per xxxx ounce of payable
silver.
11. GOLD
----
Deduct 0.02 xxxx ounces per ton and pay for 95% of the remaining gold
content at the daily London Final Gold quotation, as published in Xxxxx'x
Metals Week, averaged for the Quotational Period, less a deduction of $10.00
per payable xxxx ounce.
12. LEAD
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Deduct 1.5 unit and pay for 95% of the lead content at the average of the four
LME quotations for refined lead, as officially quoted by the London Metal
Exchange and published in Xxxxx'x Metals Week (currently LME CASH and LME
THR-MO), averaged for the quotational
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UNICO, INC. AGREEMENT NO. L99026
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period. Notwithstanding the foregoing, the maximum quotation for lead payment
above shall be the London Metal Exchange Settlement quotation (currently LME
SETTLEMENT), as published in Xxxxx'x Metals Week, averaged for the quotational
period.
13. QUOTATIONAL PERIOD
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The quotational period for silver, gold and lead shall be the fourth calendar
month following the month of arrival at ASARCO's East Helena, Montana smelter.
No payment or accountability will be made for any metal or content except as
above specified. From the total of the above, make the following:
DEDUCTIONS
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13. TREATMENT DEDUCTION
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The base treatment deduction shall be $220.00 per dry short ton of
product basis a lead price of $0.25 per pound. Increase the base treatment
charge by $3.00 per dry short ton for each $0.01 per pound the lead price is
above $0.25 per pound, fractions in proportion.
14. ADDITIONAL DEDUCTIONS
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The deductions specified above are for product free of deleterious impurities.
Product delivered containing such impurities shall be subject to additional
deductions in accordance with the schedule below:
Antimony: Deduct $35.00 per ton for each 1% that the antimony assay
exceeds 0.5%, fractions in proportion.
Bismuth: Deduct $100.00 per ton for each 1% that the bismuth assay
exceeds 0.01%, fractions in proportion.
If product should contain any deleterious impurities which, in ASARCO'S
sole judgment, preclude economic treatment of the product, then ASARCO may
terminate this contract unless mutual agreement is reached as to appropriate
deduction for such impurities.
15. WEIGHING, SAMPLING AND ASSAYING
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Weighing, sampling and determination of moisture (at which UNICO or UNICO's
representative may be present)
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as done by ASARCO according to ASARCO's standard practice, will be accepted as
final. The absence of UNICO or UNICO's representative shall be deemed a waiver
of this right in each instance. After sampling, and receipt by ASARCO, the
product may be placed in process, commingled or otherwise disposed of by
ASARCO. The dry pulp sample of each lot to be used for determination of metal
content shall be divided into not less than four equal parts; one to be
retained by ASARCO, one to be forwarded to UNICO, one to be retained for
umpire purposes, and one to be held in reserve. Each party shall assay its
part and the assay results shall be exchanged. When the difference between the
assays of ASARCO and UNICO is within the splitting limits designated below,
the exact mean of the assays shall be the settlement assay. When the
difference between the assays of ASARCO and UNICO is greater than the
splitting limits specified, an umpire shall be selected in rotation from the
list designated below, whose assay shall be the settlement assay if within the
limits of the assays of the two parties; and, if not, the assay of the party
nearer to the umpire shall be the settlement assay. The cost of the umpire
shall be borne by the party whose assay is furthest from the umpire assay;
and, in the event the umpire assay is the exact mean of the assays of the
parties, then the cost shall be borne equally by both parties. In case of
UNICO's failure to submit assays within sixty (60) days from the date samples
are available to UNICO, ASARCO's assay shall govern. The splitting limits and
the umpire assayers shown below shall be subject to change by mutual
agreement. Silver assays are to be determined by commercial fire assay method,
unadjusted for slag loss and cupel absorption and the umpire assayers will be
informed by ASARCO.
Splitting limits
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Ag: 0.5 xxxx oz./ton Au: 0.02 xxxx oz./ton
Pb: 0.5% Bi: 0.1%
Sb: 0.1%
Umpire Assayers
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X.X. Xxxxxx Xxxxx Xxxxxxxxxxxxxx, Inc.
X.X. Xxx 000 X.X. Xxx 000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
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16. SETTLEMENT
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ASARCO shall make a 70% provisional payment to UNICO on the tenth (10th)
business day of the calendar month following the first calendar month after
delivery. Final settlement when all information is known.
17. FORCE MAJEURE
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Prevention or delay in the performance hereof caused by cessation,
interruption or curtailment of operations at ASARCO's plant designated to
receive the product covered by the Agreement for any reason or at the UNICO's
Mine for failure of ore supply or other operating requirements or for any
other reason, or, without regard to the foregoing enumeration, any disabling
causes beyond the control of either party, caused by act of nature, strike,
fire, flood, traffic interruption, delay in transportation, war insurrection
or mob violence, requirement or regulation of government, or any other cause
which cannot be overcome by means normally employed in performance of this
agreement, shall entitle the party affected to suspend this agreement. Party
immediately affected by such cause shall give prompt written notice to the
other party of such cause and shall also give written notice to the other
party when the cause ceases to have effect. A suspension of performance
pursuant to this agreement shall not have the effect of abrogating the
agreement, but immediately upon the termination of the cause of disability,
this agreement shall again come into full force and effect. Any suspension
under this clause shall not operate to extend this agreement beyond the
expiration date as determined under Clause 4. DURATION. The product
affected by such suspension shall be excluded from this agreement. ASARCO
shall not be obliged to process such product at any time and Unico shall be
free to dispose elsewhere of such product not shipped during the entire period
of such suspension.
18. DEFINITIONS
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A ton means a dry short ton or 2,000 dry pounds avoirdupois.
A unit means a 1% of a ton or 20 pounds.
A calendar month means a named month in the calendar.
A business day means a named day in the calendar,
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Saturdays, Sundays, and major holidays excepted.
A lot means 100 dry short tons.
19. TAXES
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The terms of this agreement are based on the taxes and other governmental
charges to which ASARCO is subject as of August 1, 1999. All income taxes
assessed ASARCO shall be excluded from this clause. Any substantial tax
increases, new tax or governmental charges of nature not existing as of August
1, 1999 imposed on the activity of ASARCO hereunder, shall be subject to
negotiation between the parties to determine if any proportionate part of such
tax or charges should be for the account of UNICO.
20. DIVERSION
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ASARCO may at its sole option sell or divert the product to another person and
plant and subject to the other provisions of this clause, any increase or
decrease in freight as against delivery as provided herein shall be for
ASARCO'S account. UNICO shall have the obligation to comply with ASARCO's
diversion instructions including but not limited to shipping instructions in
accordance with applicable freight tariffs governing such diversion. Any
additional costs incurred by reason of UNICO'S failure to comply with said
instructions and freight tariffs shall be for UNICO's account. In case of such
diversion, weighing and sampling shall be performed at the receiving plant and
date of delivery of product shall be the date of arrival of the last truck of
each lot at the receiving plant. All other provisions of the agreement shall
apply in all other respects as if no diversion had occurred. Notwithstanding
the foregoing, ASARCO shall in no case, including an event of force majeure at
plant designated to receive product, be under any obligation to divert the
product.
In the pricing of product or any metal contained therein, if one or more
suspensions of quotations occur for any cause resulting in the absence of the
quotation for more than three (3) days during the quotational period specified
in this agreement, then the beginning or said period (or the balance thereof
if suspension begins during the period) shall be deferred a number of
quotational days equal to the number of quotational
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days occurring during the entire time of suspension, whether before, during or
after said quotational period. When the normal number of quotations for the
period specified in this agreement have been thus obtained, such quotations
shall be averaged for pricing. One or more suspensions of quotations
aggregating three (3) days or less during a quotational period shall be
disregarded and the remaining quotations shall be averaged for pricing. In
case any firm or publication whose quotations are the basis for pricing any
metal under this agreement shall go out of business, cease publication, or
discontinue the quotations, then the quotations by such other firm or
publication, as the parties shall agree upon shall be used.
22. NOTICES
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All notices, requests and other communications hereunder shall be in writing
and shall be deemed to have been duly given or made when sent by first-class
mail, postage prepaid, addressed:
If to ASARCO: ASARCO Incorporated
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Director, Raw Materials
Telephone: 000- 000-0000
Telecopy: 212- 510-2054
Copy to: ASARCO Incorporated
East Helena Plant
Xxx 0000
Xxxx Xxxxxx, XX 00000
Attention: Manager
Telephone: 000-000-0000
Telecopy: 000-000-0000
And if to UNICO: Unico Inc.
000 X. Xxxxxxx Xxxx., #000
Xxx Xxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxx
Telephone: 000-000-0000
Telefax: 000-000-0000
or in each case, at other such address as may be hereafter or has been
designated most recently in
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writing by the addressee to the addressor.
Any notice given hereunder may be given by telefax and confirmed by mail in
due course in which case such notice shall be deemed given or served when sent
in telegraphic form.
23. SUCCESSION
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This Agreement shall bind and inure to the benefit of the parties hereto,
their legal representatives, successors and assigns. This agreement shall not
be assignable by either party hereto without the written consent of the other.
Such consent shall not be unreasonably withheld.
24. WAIVER
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Waiver of any breach of any provision hereof shall not be deemed to be a
waiver of any other provision hereof or of any subsequent breach of such
provision.
This Agreement shall take effect as a contract made in accordance with the
governed by the laws of the State of New York and shall come into full force
and effect as of August 1, 1999.
UNICO INC. ASARCO Incorporated
By /s/ Xxx Xxxxx
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Vice President, Commercial
