Common use of Exercise of First Option Clause in Contracts

Exercise of First Option. ELECTION TO EITHER (A) PROCEED TO ATTEMPT TO EXERCISE THE SECOND OPTION OR (B) COMMENCE THE JOINT VENTURE FAILURE TO EXERCISE SECOND OPTION JOINT VENTURE AGREEMENT 7.1 Provided that the Optionee has exercised the First Option, the Optionee will not later than July 31, 2014, either: (a) deliver to the Optionor a notice in writing (the “Election to Proceed to Second Option Notice”) that it has elected to proceed to attempt to exercise the Second Option; or (b) deliver to the Optionor a notice in writing (the “Election to Enter Into the Joint Venture Notice”) that it has elected not proceed to attempt to exercise the Second Option but instead to join and participate in a joint operation for the purposes of further exploring the Property and if deemed warranted, of developing, constructing and operating a mine on the Property or a portion thereof (the “Joint Venture”). 7.2 In the event that the Optionee fails to deliver by the date set out in Section 7.1 either the Election to Proceed to Second Option Notice set out in Section 7.1(a) or the Election to Enter Into the Joint Venture Notice set out in Section 7.1(b), then the Optionee will be deemed to have delivered to the Optionor the Election to Proceed to Second Option. 7.3 In the event that the Optionee has delivered to the Optionor the Election to Proceed to Second Option Notice or has been deemed to have delivered to the Optionor the Election to Proceed to Second Option Notice and the Second Option expires without being exercised, then the Optionee will then be deemed to have delivered to the Optionor the Election to Enter Into the Joint Venture. 7.4 In the event that: (a) the Optionee has delivered the Optionor the Election to Enter Into the Joint Venture Notice in accordance with Section 7.1(b);or (b) the Optionee has been deemed to have delivered to the Optionor the Election to Enter into the Joint Venture Notice pursuant to Section 7.3, then the Optionee and the Optionor will be deemed to join in a Joint Venture. The Joint Venture shall be conducted in accordance with an agreement (the “Joint Venture Agreement”), the material terms of which are set out in “Part I – Exercise of the First Option Only” in the attached Schedule “C”. 7.5 In the event that the Second Option is exercised, then the Optionee and the Optionor will be deemed to join in a Joint Venture. The Joint Venture shall be conducted in accordance with an agreement (the “Joint Venture Agreement”), the material terms of which are set out in “Part II – Exercise of the First Option and the Second Option in the attached Schedule “C”. 7.6 The Optionor and the Optionee will use their best efforts to negotiate the terms of the formal joint venture agreement representing the Joint Venture Agreement and then execute the form of Joint Venture Agreement. 7.7 In the event that the Optionor and the Optionee do not agree on the terms of the Joint Venture Agreement, then the Optionor and the Optionee will enter into arbitration pursuant to Section 20 and the Arbitrator will determine the terms of the Joint Venture Agreement.

Exercise of First Option. ELECTION TO EITHER (A) PROCEED TO ATTEMPT TO EXERCISE THE SECOND OPTION OR (B) COMMENCE THE JOINT VENTURE FAILURE TO EXERCISE SECOND OPTION JOINT VENTURE AGREEMENT 7.1 Provided that the Optionee has exercised the First Option, the Optionee will not later than July 31, 2014, either: (a) deliver to the Optionor a notice in writing (the “"Election to Proceed to Second Option Notice”") that it has elected to proceed to attempt to exercise the Second Option; or (b) deliver to the Optionor a notice in writing (the “"Election to Enter Into the Joint Venture Notice”") that it has elected not proceed to attempt to exercise the Second Option but instead to join and participate in a joint operation for the purposes of further exploring the Property and if deemed warranted, of developing, constructing and operating a mine on the Property or a portion thereof (the “"Joint Venture”"). 7.2 In the event that the Optionee fails to deliver by the date set out in Section 7.1 either the Election to Proceed to Second Option Notice set out in Section 7.1(a) or the Election to Enter Into the Joint Venture Notice set out in Section 7.1(b), then the Optionee will be deemed to have delivered to the Optionor the Election to Proceed to Second Option. 7.3 In the event that the Optionee has delivered to the Optionor the Election to Proceed to Second Option Notice or has been deemed to have delivered to the Optionor the Election to Proceed to Second Option Notice and the Second Option expires without being exercised, then the Optionee will then be deemed to have delivered to the Optionor the Election to Enter Into the Joint Venture. 7.4 In the event that: (a) the Optionee has delivered the Optionor the Election to Enter Into the Joint Venture Notice in accordance with Section 7.1(b);or (b) the Optionee has been deemed to have delivered to the Optionor the Election to Enter into the Joint Venture Notice pursuant to Section 7.3, then the Optionee and the Optionor will be deemed to join in a Joint Venture. The Joint Venture shall be conducted in accordance with an agreement (the “"Joint Venture Agreement”"), the material terms of which are set out in “"Part I – - Exercise of the First Option Only” " in the attached Schedule “"C”". 7.5 In the event that the Second Option is exercised, then the Optionee and the Optionor will be deemed to join in a Joint Venture. The Joint Venture shall be conducted in accordance with an agreement (the “"Joint Venture Agreement”"), the material terms of which are set out in “"Part II – - Exercise of the First Option and the Second Option in the attached Schedule “"C”". 7.6 The Optionor and the Optionee will use their best efforts to negotiate the terms of the formal joint venture agreement representing the Joint Venture Agreement and then execute the form of Joint Venture Agreement. 7.7 In the event that the Optionor and the Optionee do not agree on the terms of the Joint Venture Agreement, then the Optionor and the Optionee will enter into arbitration pursuant to Section 20 and the Arbitrator will determine the terms of the Joint Venture Agreement.