Common use of Initial Operator Clause in Contracts

Initial Operator. (a) The Parties agree that Black Shield will be the initial Operator, but will engage Cariboo to manage and undertake the exploration and development of the Property under the direction of Black Shield, until such time as Black Shield may otherwise, in its sole discretion, determine. (b) The Parties agree that during such time as Cariboo is managing exploration and development of the Property in accordance with 5.2(a): (i) Cariboo will be required to apply the payments with respect to Expenditures received from Black Shield solely to fund the Expenditures; (ii) within 90 days following the expiry of a Payment Period in which Black Shield has paid Cariboo the amount of the applicable Expenditures for such Payment Period to incur Expenditures on behalf of Black Shield, Cariboo will provide Black Shield with an itemized statement of Expenditures (the “Cariboo Statement”) incurred by Cariboo during that Payment Period; (iii) the Cariboo Statement will be conclusive evidence of the making by Cariboo of the Expenditures recorded in the Cariboo Statement unless, within 30 days after receipt of such Cariboo Statement, Black Shield delivers a written and detailed objection to the Cariboo Statement to Black Shield; (iv) if Black Shield delivers such an objection to Cariboo, then Black Shield will be entitled to request that an independent auditor selected by Black Shield (that will, at minimum, be a medium sized accounting firm with experience in the mining industry) audit the Expenditures recorded in the Cariboo Statement; and (v) at the conclusion of that audit, the costs of the audit will be paid by Black Shield, unless the auditor determines that the Expenditures set out in the Cariboo Statement were overstated by more than 10%, in which case: (A) Cariboo will pay all costs of the audit, and (B) Cariboo will be required to either repay Black Shield the amount of the overstatement or apply the amount of such overstatement to Black Shield’s required Expenditures for the next Payment Period.

Initial Operator. (a) The Parties agree that Black Shield BRS will be the initial Operator, but will engage Cariboo ▇▇▇▇▇▇▇ ▇▇▇▇ to manage and undertake the exploration and development of the Property under the direction of Black Shield, BRS until such time as Black Shield BRS may otherwise, in its sole discretion, determine, provided that Cariboo Rose’s period of engagement has reached or exceeded the second anniversary during which time services will be invoiced at market industry rates which will include a 5% overriding management fee (excepting large third party invoices which will be paid directly by BRS. (b) The Parties agree that during such time as Cariboo ▇▇▇▇▇▇▇ ▇▇▇▇ is managing exploration and development of the Property in accordance with 5.2(a):6.2(a): DocuSign Envelope ID: C38CA006-E1A2-4EF7-A438-219FC6F058A4 (i) Cariboo Rose will be required to apply the payments with respect to Expenditures received from Black Shield BRS solely to fund the Expenditures; (ii) within 90 days following the expiry of a Payment Period in which Black Shield BRS has paid Cariboo Rose the amount of the applicable Expenditures for such Payment Period to incur Expenditures on behalf of Black ShieldBRS, Cariboo Rose will provide Black Shield BRS with an itemized statement of Expenditures (the “Cariboo Cowtrail Statement”) incurred by Cariboo Rose during that Payment Period; (iii) the Cariboo Cowtrail Statement will be conclusive evidence of the making by Cariboo ▇▇▇▇▇▇▇ ▇▇▇▇ of the Expenditures recorded in the Cariboo Cowtrail Statement unless, within 30 days after receipt of such Cariboo Cowtrail Statement, Black Shield BRS delivers a written and detailed objection to the Cariboo Cowtrail Statement to Black ShieldCariboo Rose; (iv) if Black Shield BRS delivers such an objection to CaribooCariboo Rose, then Black Shield BRS will be entitled to request that an independent auditor selected by Black Shield (BRS that will, at minimum, be a medium sized accounting firm with experience in the mining industry) audit the Expenditures recorded in the Cariboo Cowtrail Statement; and (v) at the conclusion of that audit, the costs of the audit will be paid by Black ShieldBRS, unless the auditor determines that the Expenditures set out in the Cariboo Cowtrail Statement were overstated by more than 10%, in which case: (A) Cariboo Rose will pay all costs of the audit, and (B) Cariboo Rose will be required to either repay Black Shield BRS the amount of the overstatement or apply the amount of such overstatement to Black ShieldBRS’s required Expenditures for the next Payment Period.