Common use of Net Smelter Return Royalty Clause in Contracts

Net Smelter Return Royalty. 5.1 There is hereby reserved to the Owners out of the transfer of the Claims to the Optionee and, subject to the exercise of the Option by the Optionee, the Owners will be entitled to receive and the Optionee will pay to the Owners, a royalty equal to TWO (2%) PERCENT of the net smelter returns from all Products, calculated and paid in accordance with Schedule "C". 5.2 For and in consideration of payment of the sum of ONE ($1.00) DOLLAR by the Optionee to the Owners on the execution of this agreement (the receipt and sufficiency of which are hereby acknowledged by the Owners), the Optionee will have, and the Owners hereby give and grant to the Optionee, the option (the "NSR Call Option") to purchase from the Owners, at any time after the date hereof, all of the right, title and interest of the Owners in and to one-half (being 1% percent) of the Royalty, for a total consideration of ONE MILLION ($1,000,000) DOLLARS (the "NSR Call Option Price"). The Optionee may exercise the NSR Call Option at any time during the period commencing on the Acceptance Date and ending on the day which is TWENTY (20) years after the Acceptance Date, by delivering notice to that effect to the Owners. The closing of purchase and sale will occur on the sixty-first (61st) day following the date of receipt of such notice and, on closing, the Optionee will deliver a certified cheque or bank draft in payment of the full NSR Call Option Price and the Owners will, at the expense of the Optionee, do or cause to be done all such acts, execute and deliver all such instruments, deeds or agreements and give all such further assurances as may be reasonably necessary to give effect to the exercise of the NSR Call Option and the transfer to the Optionee of all of the right, title and interest of the Owners in and to one-half, being one (1%) percent, of the Royalty. 5.3 From and after the exercise of the NSR Call Option, the Royalty herein reserved to the Owners will be reduced to one (1%) percent and the Optionee will pay such reduced Royalty to the Owners.

Net Smelter Return Royalty. 5.1 (a) There is hereby reserved shall accrue for each Quarter following the date of the Commencement of Commercial Production an amount in dollars equal to two (2%) percent of the Net Sales Revenue. Each sum so accrued shall be payable by the Optionee to the Owners Optionor in accordance with the provisions of paragraph 2 below. (b) The Optionee shall, as soon as practicable after the end of each Quarter following the date of Commencement of Commercial Production and in any event within thirty (30) business days, determine the Net Smelter Return Royalty for the previous Quarter in accordance with this Section 1(a) and shall deliver to the Optionor promptly thereafter a statement (the "NET SMELTER RETURN STATEMENT") showing such Net Smelter Return Royalty and setting out in detail its calculations of such Net Smelter Return Royalty. (c) If the amount of Net Smelter Returns is not ascertainable for a calendar quarter, it shall be estimated as nearly as possible at the time for payment and an adjustment shall be made at the end of each calendar year. Within ninety (90) days following the end of each calendar year, commencing with the year in which the date of the transfer Commencement of Commercial Production falls, the Optionee shall deliver a statement of the Claims Net Smelter Returns for the year duly certified as correct by an independent Chartered Accountant appointed by the Optionee for such purposes. The Optionor shall have the right within a period of three (3) months from receipt of such certified statement to conduct an independent audit at its own cost and expense, the right to review the Optionee's books and records relating thereto and an opportunity to discuss issues raised with the independent Chartered Accountant. The Optionee shall immediately pay to the Optionee and, subject Optionor any additional Net Smelter Return Royalty found by such independent audit to the exercise be payable in respect of the Option previous calendar year. In the event such audit indicates that the Optionee's statements were more than five (5%) percent different than that assessed by the independent audit, then the cost of such independent audit shall be borne by the Optionee. (d) If any portion of the Product extracted and derived from the Property are sold to a purchaser owned or controlled by the Optionee or treated by a smelter owned or controlled by the Optionee, the Owners will actual proceeds received shall be entitled deemed to receive be an amount equal to what could be obtained from a purchaser or a smelter not so owned or controlled in respect of Product of like quality and the Optionee will pay quantity after deducting therefrom a charge equal to the Owners, a royalty equal transportation cost which would have been incurred had the material been sold to TWO (2%) PERCENT of the net smelter returns from all Products, calculated and paid in accordance with Schedule "C"such third party purchaser or smelter. 5.2 For and in consideration of payment of the sum of ONE ($1.00) DOLLAR by the Optionee to the Owners on the execution of this agreement (the receipt and sufficiency of which are hereby acknowledged by the Owners), the Optionee will have, and the Owners hereby give and grant to the Optionee, the option (the "NSR Call Option") to purchase from the Owners, at any time after the date hereof, all of the right, title and interest of the Owners in and to one-half (being 1% percent) of the Royalty, for a total consideration of ONE MILLION ($1,000,000) DOLLARS (the "NSR Call Option Price"). The Optionee may exercise the NSR Call Option at any time during the period commencing on the Acceptance Date and ending on the day which is TWENTY (20) years after the Acceptance Date, by delivering notice to that effect to the Owners. The closing of purchase and sale will occur on the sixty-first (61st) day following the date of receipt of such notice and, on closing, the Optionee will deliver a certified cheque or bank draft in payment of the full NSR Call Option Price and the Owners will, at the expense of the Optionee, do or cause to be done all such acts, execute and deliver all such instruments, deeds or agreements and give all such further assurances as may be reasonably necessary to give effect to the exercise of the NSR Call Option and the transfer to the Optionee of all of the right, title and interest of the Owners in and to one-half, being one (1%) percent, of the Royalty. 5.3 From and after the exercise of the NSR Call Option, the Royalty herein reserved to the Owners will be reduced to one (1%) percent and the Optionee will pay such reduced Royalty to the Owners.

Net Smelter Return Royalty. 5.1 There is hereby reserved to the Owners out of the transfer of the Claims to the Optionee and, subject to the exercise of (a) If the Option by the Optioneeis exercised, the Owners will Optionor shall be entitled to receive and the Optionee will pay to Net Smelter Return Royalty from the OwnersOptionee, a royalty equal to TWO (2%) PERCENT payable from the date of the net smelter returns from all ProductsCommencement of Commercial Production, calculated and paid in accordance with Schedule "C"B" attached hereto, provided that if the Optionor exercises its Back-in Right in accordance with Section 14 hereof, the Optionor's right to receive the Net Smelter Return Royalty shall terminate. 5.2 For and in consideration of payment of the sum of ONE ($1.00b) DOLLAR The Net Smelter Return Royalty shall be payable by the Optionee in Canadian Dollars and shall be paid quarterly in arrears within sixty (60) days of the end of the quarter to which it relates. (c) To the extent permitted by the applicable law, the Net Smelter Return Royalty shall run with, attach to, and bind the land underlying the Property. Upon becoming entitled to the Owners Net Smelter Return Royalty, and subject to the Optionor's exercise of the Back-in Right, nothing contained in this Agreement shall be construed as conferring on the execution Optionor any right to or interest in the Property, except the right to receive the Net Smelter Return Royalty as and when due. (d) All payments of this agreement (the receipt Net Smelter Return Royalty to the Optionor shall be deemed final and sufficiency in full satisfaction of which all obligations of the Optionee in respect thereof if such payments or the calculation thereof are hereby acknowledged not disputed by the Owners), the Optionee will have, and the Owners hereby give and grant to the Optionee, the option Optionor within sixty (the "NSR Call Option"60) to purchase from the Owners, at any time days after the date hereof, all receipt of the rightNet Smelter Return Royalty payment and statement. (e) Unless the Optionor has exercised its Back-in Right, title and interest any decision regarding the Commencement of the Owners in and to one-half (being 1% percent) of the Royalty, for a total consideration of ONE MILLION ($1,000,000) DOLLARS (the "NSR Call Option Price"). The Optionee may exercise the NSR Call Option at any time during the period commencing on the Acceptance Date and ending on the day which is TWENTY (20) years after the Acceptance Date, by delivering notice to that effect to the Owners. The closing of purchase and sale will occur on the sixty-first (61st) day following the date of receipt of such notice and, on closing, the Optionee will deliver a certified cheque or bank draft in payment of the full NSR Call Option Price and the Owners will, Commercial Production shall be at the expense sole discretion of the Optionee, do or cause to be done all such acts, execute and deliver all such instruments, deeds or agreements and give all such further assurances as may be reasonably necessary to give effect to the exercise of the NSR Call Option and the transfer to the Optionee of all of the right, title and interest of the Owners in and to one-half, being one (1%) percent, of the Royalty. 5.3 From and after the exercise of the NSR Call Option, the Royalty herein reserved to the Owners will be reduced to one (1%) percent and the Optionee will pay shall be under no obligation, and nothing in this Agreement shall be construed as creating an obligation upon the Optionee, to place the Property into production and, in the event the Property is placed into production and operated as a mine, the Optionee shall have the unfettered right to suspend or curtail any such reduced Royalty to the Ownersoperation as it in its sole discretion may determine.