Common use of Disposition of Production Clause in Contracts

Disposition of Production. On a monthly basis, all Products produced from the Mine during the month shall be apportioned between USI and Sprott in accordance with their Participating Interests on the last day of the month, with the portion apportioned to USI referred to as “USI Products,” and the portion apportioned to Sprott referred to as “Sprott Products.” Except as otherwise set forth in this Section 11.1, the Manager shall sell Products under such arrangements as may be approved by the Management Committee from time to time. Products shall be sold in the order in which produced, and the proceeds of each sale of Products shall be distributed to the Participants in accordance with their Participating Interests. 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 owned by any third party at any processing facilities constructed by the Participants pursuant to this Agreement. If a Participant either (a) elects not to contribute to a Program and Budget as provided in Subsection 9.5(a), (b) fails to contribute to an adopted Program and Budget that provides for cash contributions for operating costs, or (c) fails to make required cash calls for operating costs pursuant to Section 10.2, then the Manager may sell that Participant’s share of Products and apply the proceeds from such sales to pay that Participant’s share of such operating costs. Any balance remaining from the noncontributing Participant’s share of the proceeds from such sales shall be remitted to that Participant. In the event of such a sale by the Manager on behalf of a noncontributing Participant, that Participant’s Participating Interest shall not be reduced pursuant to Subsection 9.5(b), unless and only to the extent that the proceeds from such sales are insufficient to pay that Participant’s share of operating costs. For purposes of this Section 11.1, “operating costs” shall not include any capital expenditures, other than replacement capital costs.

Disposition of Production. On a monthly basis, Taking In Kind 10.1 Each Participant shall take in kind or separately dispose of its share of all Products produced from the Mine during the month shall be apportioned between USI and Sprott in accordance with their its Participating Interests on the last day of the month, with the portion apportioned to USI referred to as “USI Products,” and the portion apportioned to Sprott referred to as “Sprott Products.” Except as otherwise set forth in this Section 11.1, the Manager shall sell Products under such arrangements as may be approved by the Management Committee from time to timeInterest. Products shall be sold Any extra expenditure incurred in the order taking in which produced, and the proceeds kind or separate disposition by any Participant of each sale its proportionate share of Products shall be distributed to the Participants in accordance with their Participating Interestsborne 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 owned by any third party of anyone 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 calendar days in advance of the delivery date upon which their respective shares of Products will be available. Failure of Participant to Take in Kind 10.2 If a Participant either fails to take its share of Products in kind, the Manager may, but is not obligated, to sell such share on behalf of that Participant at not less than the prevailing market price in the area for a period of time not to exceed one year from the date of notice under §10. 1. Subject to the terms of any such contracts of sale then outstanding, during any period that the Manager is 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. Hedging 10.3 Neither Participant shall have any obligation to account to the other Participant for, nor have any interest or right of participation in any profits or proceeds, nor have any obligation to share in any losses from, future contracts, forward sales, trading inputs, calls, options or any similar hedging, price protection or marketing mechanism employed by a Participant with respect to its proportionate share of any Products produced or to be produced from the Property. 10.4 For purposes of determining the value of Mineral Products taken in kind pursuant to §10.1, each Participant's share of Products shall be valued at the time of delivery to the Participants at a value equal to that received by the other party for its share of the Products after deduction of: (a) elects not to contribute to a Program all smelting and Budget as provided in Subsection 9.5(a), other refining costs incurred with an independent third party smelter or other refining facility; (b) fails all costs of transporting Products, including insurance, from the Property to contribute to an adopted Program and Budget that provides for cash contributions for operating costs, or the place of delivery designated by the purchaser of the Products; (c) fails to make required cash calls a reasonable charge for operating costs marketing Products as is consistent with generally accepted industry marketing practices; and (d) all taxes (other than income taxes). royalties or other charges or imposts provided for pursuant to Section 10.2, then any law or legal obligation imposed by any government if paid by the Manager may sell that Participant’s Participant in connection with the disposition of Products taken in kind. 10.5 Any extra expenditure incurred by reason of the taking in kind or separate disposition by a Participant of its proportionate share of Products shall be borne by that Participant and apply the proceeds from such sales that Participant shall he required to pay that Participant’s construct, operate and maintain, at its own expense, any and all facilities which may be necessary to receive, store and dispose of its share of such operating costs. Any balance remaining from the noncontributing Participant’s Products, including any costs incurred in respect of security for receiving, storing or disposing of its share of the proceeds from such sales shall be remitted to that Participant. In the event of such a sale by the Manager on behalf of a noncontributing Participant, that Participant’s Participating Interest shall not be reduced pursuant to Subsection 9.5(b), unless and only to the extent that the proceeds from such sales are insufficient to pay that Participant’s share of operating costs. For purposes of this Section 11.1, “operating costs” shall not include any capital expenditures, other than replacement capital costsProducts.

Disposition of Production. On a monthly basis11.01 For any periods after the commencement of Commercial Production and provided that each Participant has paid to the Operator its respective Costs for that period or the Operator has deducted each Participants pro-rata contribution to the Cost, all Products produced from the Mine during the month Participants shall be apportioned between USI entitled to take in cash or kind and Sprott in accordance with their Participating Interests on the last day dispose of the month, with the portion apportioned to USI referred to as “USI Products,” and the portion apportioned to Sprott referred to as “Sprott Products.” Except as otherwise set forth in this Section 11.1, the Manager shall sell Products under such arrangements as may be approved by the Management Committee from time to time. Products shall be sold in the order ratio of their respective Interests. 11.02 For purposes of determining the value of Products taken in which producedkind pursuant to paragraph 11.03, and the proceeds of each sale Participant's share of Products shall be distributed valued at the time of delivery to the Participants in accordance with their Participating Interests. 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 owned by any third party at any processing facilities constructed purchase by the Participants Operator pursuant to this Agreement. If paragraph 11.05) at a Participant either (a) elects not value equal to contribute to a Program and Budget as provided in Subsection 9.5(a), (b) fails to contribute to an adopted Program and Budget that provides received by the Optionee for cash contributions for operating costs, or (c) fails to make required cash calls for operating costs pursuant to Section 10.2, then the Manager may sell that Participant’s share of Products and apply the proceeds from such sales to pay that Participant’s its share of such operating costs. Any balance remaining Products after deduction of all Costs, as defined in paragraph 1.01(f). 11.03 The Operator will deduct the Costs of Commercial Production from the noncontributing Participant’s sale of Product, however, for a period after commencement of Commercial Production the Operator may require the Costs to be paid prior to the sale of the Products, and the Operator may request each Participant to contribute their pro-rata share of the proceeds from such sales Costs, the Operator shall be remitted entitled to pay the unpaid share of Costs of that Participant. In , and if the event of Operator makes such a sale by the Manager payment on behalf of a noncontributing Participant, Participant it shall have the prior and preferred right to receive that Participant’s Participating Interest shall not be reduced 's share of Products pursuant to Subsection 9.5(b)paragraph 11.01 until the Operator has received Products in kind of a value equal to two hundred percent (200%) of the actual payment made as provided in paragraph 11.02. 11.04 Any extra expenditure incurred by reason of the taking in kind or separate disposition by a Participant of its proportionate share of Products shall be borne by that Participant and that Participant shall be required to construct, unless operate and only maintain, at its own expense, any and all facilities which may be necessary to receive, store and dispose of its share of Products. 11.05 If any Participant fails to make the necessary arrangements to take in kind or separately dispose of its proportionate share of Products, the Operator as agent for the Participant may purchase for its own account or sell such share, subject to the extent right of the Participant owning such share to revoke at will the Operator's authority under this paragraph in respect of Products not then purchased by the Operator or committed for sale to others, and the Operator shall be entitled to deduct from the sale proceeds all costs of or related to marketing such Products including, without limitation. transportation, storage, commissions, and discounts, but all contracts of sale executed by the Operator for a Participant's share of Products shall be only for such reasonable periods of time as are consistent with the minimum needs of the industry under the circumstances and in no event shall any such contract be for a period in excess of one year. 11.06 Proceeds, if any, from the sale by the Operator of Products pursuant to paragraph 11.05 shall be calculated by the Operator separately for each Participant at the end of each calendar month and shall be paid to each Participant monthly within twenty (20) days after the end of each such calendar month following payment to the Operator by each Participant of its respective share of Costs outstanding as at the end of that calendar month. 11.07 If a Participant fails to pay to the Operator its respective share of Costs for any period after commencement of Commercial Production as set out in paragraph 11.03, the Operator shall charge interest to that Participant on such unpaid Costs at the rate of the greater of twelve percent (12%) per annum, and the prime lending of the Operator's Bank charged from time to time to its most preferred commercial borrowers plus three percent (3%) per annum. 11.08 If the Optionee, any Affiliate of the Optionee or any person with whom the Optionee is not dealing at arms length is a purchaser of Products form the Optionee, and if the value of such Products is used to determine any matter arising under this Section, the Optionee shall be deemed to receive competitive prices for all Products so sold. 12.01 The records relating to Products taken in kind or to the calculation of proceeds from the sale thereof shall be audited annually at the end of each fiscal year of the Operator and: (a) any adjustments required by such sales are insufficient audit shall be made forthwith; (b) a copy of the audited statements shall be delivered to pay that Participant’s share the Participants within 140 days of operating costssuch year end; and (c) the Participants, or either of them, at reasonable times and upon notice in writing to the Operator, shall have the right to inspect, audit and copy the Operator's accounts and records relating to the account for Products taken in kind or to the determination of proceeds from the sale thereof for any calendar year within twelve (12) months following the end of such calendar year. For purposes All such accounts and records shall be deemed to be correct and accurate unless questioned by a party within eighteen (18) months following the end of this Section 11.1, “operating costs” each calendar year to which the accounts relate. The Participants shall not include any capital expenditures, other than replacement capital costsmake all reasonable efforts to conduct audits in a manner which will result in a minimum of inconvenience to the Operator.

Disposition of Production. On a monthly basis, Taking In Kind 10.1 Each Participant shall take in kind or separately dispose of its share of all Products produced from the Mine during the month shall be apportioned between USI and Sprott in accordance with their its Participating Interests on the last day of the month, with the portion apportioned to USI referred to as “USI Products,” and the portion apportioned to Sprott referred to as “Sprott Products.” Except as otherwise set forth in this Section 11.1, the Manager shall sell Products under such arrangements as may be approved by the Management Committee from time to timeInterest. Products shall be sold Any extra expenditure incurred in the order taking in which produced, and the proceeds kind or separate disposition by any Participant of each sale its proportionate share of Products shall be distributed to the Participants in accordance with their Participating Interestsborne 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 owned by any third party of anyone 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 days in advance of the delivery date upon which their respective shares of Products will be available. Failure of Participant to Take in Kind 10.2 If a Participant either fails to take its share of Products in kind, the Manager may, but is not obligated, to sell such share on behalf of that Participant at not less than the prevailing market price in the area for a period of time not to exceed one year from the date of notice under §10. 1. Subject to the terms of any such contracts of sale then outstanding, during any period that the Manager is 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. Hedging 10.3 Neither Participant shall have any obligation to account to the other Participant for, nor have any interest or right of participation in any profits or proceeds, nor have any obligation to share in any losses from, future contracts, forward sales, trading inputs, calls, options or any similar hedging, price protection or marketing mechanism employed by a Participant with respect to its proportionate share of any Products produced or to be produced from the Property. 10.4 For purposes of determining the value of Mineral Products taken in kind pursuant to §10.1, each Participant's share of Products shall be valued at the time of delivery to the Participants at a value equal to that received by the other party for its share of the Products after deduction of: (a) elects not to contribute to a Program all smelting and Budget as provided in Subsection 9.5(a), other refining costs incurred with an independent third party smelter or other refining facility; (b) fails all costs of transporting Products, including insurance, from the Property to contribute to an adopted Program and Budget that provides for cash contributions for operating costs, or the place of delivery designated by the purchaser of the Products; (c) fails to make required cash calls a reasonable charge for operating costs pursuant to Section 10.2, then the Manager may sell that Participant’s share of marketing Products and apply the proceeds from such sales to pay that Participant’s share of such operating costs. Any balance remaining from the noncontributing Participant’s share of the proceeds from such sales shall be remitted to that Participant. In the event of such a sale by the Manager on behalf of a noncontributing Participant, that Participant’s Participating Interest shall not be reduced pursuant to Subsection 9.5(b), unless and only to the extent that the proceeds from such sales are insufficient to pay that Participant’s share of operating costs. For purposes of this Section 11.1, “operating costs” shall not include any capital expenditures, other than replacement capital costs.as is consistent with generally accepted industry marketing practices; and

Disposition of Production. On a monthly basis11.01 For any periods after the commencement of Commercial Production and provided that each Participant has paid to the Operator its respective Costs for that period or the Operator has deducted each Participants pro-rata contribution to the Cost, all Products produced from the Mine during the month Participants shall be apportioned between USI entitled to take in cash or kind and Sprott in accordance with their Participating Interests on the last day dispose of the month, with the portion apportioned to USI referred to as “USI Products,” and the portion apportioned to Sprott referred to as “Sprott Products.” Except as otherwise set forth in this Section 11.1, the Manager shall sell Products under such arrangements as may be approved by the Management Committee from time to time. Products shall be sold in the order ratio of their respective Interests. 11.02 For purposes of determining the value of Products taken in which producedkind pursuant to paragraph 11.03, and the proceeds of each sale Participant’s share of Products shall be distributed valued at the time of delivery to the Participants (or purchase by the Operator pursuant to paragraph 11.05) at a value equal to that received by the Optionee for its share of such Products after deduction of all Costs, as defined in accordance with paragraph 1.01(f). 11.03 The Operator will deduct the Costs of Commercial Production from the sale of Product, however, for a period after commencement of Commercial Production the Operator may require the Costs to be paid prior to the sale of the Products, and the Operator may request each Participant to contribute their Participating Interests. Nothing in this Agreement pro-rata share of the Costs, the Operator shall be construed as providingentitled to pay the unpaid share of Costs of that Participant, directly or indirectly, for any joint or cooperative marketing or selling and if the Operator makes such payment on behalf of Products or permitting the processing of Products owned by any third party at any processing facilities constructed by the Participants pursuant to this Agreement. If a Participant either (a) elects not it shall have the prior and preferred right to contribute to a Program and Budget as provided in Subsection 9.5(a), (b) fails to contribute to an adopted Program and Budget that provides for cash contributions for operating costs, or (c) fails to make required cash calls for operating costs pursuant to Section 10.2, then the Manager may sell receive that Participant’s share of Products pursuant to paragraph 11.01 until the Operator has received Products in kind of a value equal to two hundred percent (200%) of the actual payment made as provided in paragraph 11.02. 11.04 Any extra expenditure incurred by reason of the taking in kind or separate disposition by a Participant of its proportionate share of Products shall be borne by that Participant and apply that Participant shall be required to construct, operate and maintain, at its own expense, any and all facilities which may be necessary to receive, store and dispose of its share of Products. 11.05 If any Participant fails to make the necessary arrangements to take in kind or separately dispose of its proportionate share of Products, the Operator as agent for the Participant may purchase for its own account or sell such share, subject to the right of the Participant owning such share to revoke at will the Operator’s authority under this paragraph in respect of Products not then purchased by the Operator or committed for sale to others, and the Operator shall be entitled to deduct from the sale proceeds from all costs of or related to marketing such sales to pay that Products including, without limitation, transportation, storage, commissions, and discounts but all contracts of sale executed by the Operator for a Participant’s share of Products shall be only for such operating costs. Any balance remaining reasonable periods of time as are consistent with the minimum needs of the industry under the circumstances and in no event shall any such contract be for a period in excess of one year. 11.06 Proceeds, if any, from the noncontributing Participant’s share of the proceeds from such sales shall be remitted to that Participant. In the event of such a sale by the Manager on behalf Operator of a noncontributing Participant, that Participant’s Participating Interest shall not be reduced Products pursuant to Subsection 9.5(b), unless paragraph 11.05 shall be calculated by the Operator separately for each Participant at the end of each calendar month and only shall be paid to each Participant monthly within twenty (20) days after the end of each such calendar month following payment to the extent Operator by each Participant of its respective share of Costs outstanding as at the end of that the proceeds from such sales are insufficient calendar month. 11.07 If a Participant fails to pay that Participant’s to the Operator its respective share of operating costs. For purposes Costs for any period after commencement of Commercial Production as set out in paragraph 11.03, the Operator shall charge interest to that Participant on such unpaid Costs at the rate of the greater of twelve percent (12%) per annum, and the prime lending of the Operator’s Bank charged from time to time to its most preferred commercial borrowers plus three percent (3%) per annum. 11.08 If the Optionee, any Affiliate of the Optionee or any person with whom the Optionee is not dealing at arms length is a purchaser of Products form the Optionee, and if the value of such Products is used to determine any matter arising under this Section 11.1Section, “operating costs” the Optionee shall not include any capital expenditures, other than replacement capital costsbe deemed to receive competitive prices for all Products so sold.