Common use of Change in Rates Clause in Contracts

Change in Rates. Both MSR and Contractor acknowledge that MSR’s Mining Plan and Feasibility Study are based on Contractor’s rates for mining and equipment set forth in Appendix A, and the standby rates set forth in Appendix E. MSR and Contractor also acknowledge that the mining rates set forth in Appendix A may need to be adjusted for inflation, and are subject to change after February 1, 2007. MSR and Contractor agree that, as long as the Notice to Proceed is received by Contractor on or before November 1, 2006, with a specified date of commencement of the Work not later than February 1, 2007, the mining rates set forth in Appendix A shall apply; provided, however, that those mining rates shall be adjusted as described in this Section 21.2 for the rate of inflation between September 23, 2005 and the date of commencement of the Work, calculated using the escalation formula set forth in Section 5.5. For Sinergia Obras Civiles y Mineras, S.A. de C.V. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, CEO August 2, 2006 purposes of this Section 21.2, the baseline numbers for tires, lubricants, replacement parts, interest rates and labor are as set forth in Appendix K hereto. For purposes of this Section 21.2, if the escalation percentage between September 23, 2005 and the date of commencement of the Work is four percent or less, the mining rates set forth in Appendix A shall remain unchanged. If that escalation percentage is greater than four percent, the mining rates set forth in Appendix A shall be increased by an amount equal to one half of the percentage increase in excess of four percent (so that, for example, if that escalation percentage turns out to be six percent, the mining rates for Year 1 and each subsequent year in Appendix A would be increased by one percent). After any initial adjustments made to the mining rates pursuant to this Section 21.2, subsequent adjustments will be made pursuant to Section 5.5. MSR and Contractor further agree that if the Notice to Proceed (as that term is defined in Section 21.1) has not been received by Contractor on or before 5:00 p.m. Pacific Time on November 1, 2006, Contractor shall have the right to terminate this Mining Contract. Otherwise, Contractor shall have no right to terminate this Contract prior to November 1, 2006. Alternatively, if Contractor has not received the Notice to Proceed by November 1, 2006, and if Contractor subsequently increases any of its mining, equipment or standby rates, MSR shall have no obligation to proceed with Contractor under this Mining Contract, and may terminate this Mining Contract at any time after it receives a notice from Contractor indicating that any of these rates will be increased and prior to the date it delivers the Notice to Proceed. Upon termination of this Mining Contract pursuant to this Section 21.2, MSR shall have no obligation or liability to Contractor for any payments under Sections 5.7 or 5.8, or any other obligations or liabilities to Contractor pursuant to this Mining Contract, Contractor shall have no obligations or liabilities to MSR under this Mining Contract, and MSR shall be free to enter into negotiations for contract mining at the Mine with any third party. In consideration of the amendments to the Mining Contract, Capital Gold Corporation (“CGC”) has agreed to wire funds in the amount of $200,000 USD to the below account belonging to Sinergia: Sinergia Obras Civiles y Mineras, S.A. de C.V. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, CEO August 2, 2006 Bank: ▇▇ ▇▇▇▇▇▇ Bank, New York ABA: ▇▇▇▇▇▇▇▇▇ Beneficiary Bank (Mexico): BBVA Bancomer Mexico Swift Code: ▇▇▇▇▇▇▇▇▇▇▇ Mexico Account #: 012760001456790796 Name of Beneficiary: Sinergia Obras Civiles y Mineras SA DE CV By receipt of the above funds, Sinergia agrees to the following additional conditions set forth below: 1. Immediately following Sinergia’s receipt of the funds transfer above of $200,000 USD, Sinergia will provide written confirmation on the receipt of these funds into account above. In addition, Sinergia will provide written confirmation on the transfer of the $200,000 USD to Caterpillar’s bank account to satisfy certain past due balances Sinergia possesses with Caterpillar. 2. The $200,000 USD advance payment will be applied against the Advance Payment of $520,000 USD payable under Section 5.8 of the Mining Contract.

Change in Rates. Both MSR and Contractor acknowledge that MSR’s 's Mining Plan and Feasibility Study are based on Contractor’s 's rates for mining and equipment set forth in Appendix A, and the standby rates set forth in Appendix E. MSR and Contractor also acknowledge that the mining rates set forth in Appendix A may need to be adjusted for inflation, and are subject to change after February September 1, 20072006. MSR and Contractor agree that, as long as the Notice to Proceed is received by Contractor on or before November June 1, 2006, with a specified date of commencement of the Work not later than February September 1, 20072006, the mining rates set forth in Appendix A shall apply; provided, however, that those mining rates shall be adjusted as described in this Section 21.2 for the rate of inflation between September 23, 2005 and the date of commencement of the Work, calculated using the escalation formula set forth in Section 5.5. For Sinergia Obras Civiles y Mineras, S.A. de C.V. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, CEO August 2, 2006 purposes of this Section 21.2, the baseline numbers for tires, lubricants, replacement parts, interest rates and labor are as set forth the ones described in Appendix K hereto. For purposes of this Section 21.2, if the escalation percentage between September 23, 2005 and the date of commencement of the Work is four percent or less, the mining rates set forth in Appendix A shall remain unchanged. If that escalation percentage is greater than four percent, the mining rates set forth in Appendix A shall be increased by an amount equal to one one-half of the percentage increase in excess of four percent (so that, for example, if that escalation percentage turns out to be six percent, the mining rates for Year 1 and each subsequent year in Appendix A would be increased by one percent). After any initial adjustments made to the mining rates pursuant to this Section 21.2, subsequent adjustments will be made pursuant to Section 5.5. MSR and Contractor further agree that if the Notice to Proceed (as that term is defined in Section 21.1) has not been received by Contractor on or before 5:00 p.m. Pacific Time on November June 1, 2006, Contractor shall have the right to terminate this Mining Contract. Otherwise, Contractor shall have no right to terminate this Contract prior to November June 1, 2006. Alternatively, if Contractor has not received the Notice to Proceed by November June 1, 2006, and if Contractor subsequently increases any of its mining, equipment or standby rates, MSR shall have no obligation to proceed with Contractor under this Mining Contract, and may terminate this Mining Contract at any time after it receives a notice from Contractor indicating that any of these rates will be increased and prior to the date it delivers the Notice to Proceed. Upon termination of this Mining Contract pursuant to this Section 21.2, MSR shall have no obligation or liability to Contractor for any payments under Sections 5.7 or 5.8, or any other obligations or liabilities to Contractor pursuant to this Mining Contract, Contractor shall have no obligations or liabilities to MSR under this Mining Contract, and MSR shall be free to enter into negotiations for contract mining at the Mine with any third party. In consideration of the amendments to the Mining Contract, Capital Gold Corporation (“CGC”) has agreed to wire funds in the amount of $200,000 USD to the below account belonging to Sinergia: Sinergia Obras Civiles y Mineras, S.A. de C.V. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, CEO August 2, 2006 Bank: ▇▇ ▇▇▇▇▇▇ Bank, New York ABA: ▇▇▇▇▇▇▇▇▇ Beneficiary Bank (Mexico): BBVA Bancomer Mexico Swift Code: ▇▇▇▇▇▇▇▇▇▇▇ Mexico Account #: 012760001456790796 Name of Beneficiary: Sinergia Obras Civiles y Mineras SA DE CV By receipt of the above funds, Sinergia agrees to the following additional conditions set forth below: 1. Immediately following Sinergia’s receipt of the funds transfer above of $200,000 USD, Sinergia will provide written confirmation on the receipt of these funds into account above. In addition, Sinergia will provide written confirmation on the transfer of the $200,000 USD to Caterpillar’s bank account to satisfy certain past due balances Sinergia possesses with Caterpillar. 2. The $200,000 USD advance payment will be applied against the Advance Payment of $520,000 USD payable under Section 5.8 of the Mining Contract.-------------------------------------------------------------------------------- H-47