Common use of Net Smelter Return Royalty Clause in Contracts

Net Smelter Return Royalty. (a) The Corporation will grant to the Executive a net smelter returns royalty (“NSR”) equal to: (i) one (1%) percent over all prospects generated by the Executive which are acquired, by way of staking (each a “Staked Prospect”), for the beneficial ownership of the Corporation or any of its affiliates; and (ii) one half (1/2%) percent over all prospects generated by the Executive which are acquired, by way of lease (each a “Leased Prospect”), for the beneficial ownership of the Corporation or any of its affiliates, provided that: (A) such Leased Prospect carries a maximum NSR of four (4%) percent to the underlying owner/lessee; and (B) such Leased Prospect is not adjacent to any claims from which the Executive is otherwise is entitled to receive or participate in a NSR or other royalty interest. (b) The Corporation will have the right to purchase, at any time, the one half (1/2%) percent NSR contemplated in subsection 18(a)(ii) in respect of any Leased Prospect for a purchase price of $500,000 per Leased Prospect. (c) Any NSR granted by the Corporation to the Executive in respect of a Staked Prospect or Leased Prospect (each a “Prospect”) shall be owned in perpetuity for the benefit of the Executive, his heirs, executors, administrators or assigns, and will carry through any change or transfer of ownership of the Prospect. The Corporation shall notify the Executive of its intent to drop a Prospect or any claim or lease comprised therein at least 30 days prior to any applicable annual claim filing and/or required lease payment.