MONMOUTH AGREEMENT
THIS
AGREEMENT is dated effective the 31st day of August, 2007.
BETWEEN:
▇▇▇▇
▇▇▇▇▇
(hereinafter
called “Owner”)
AND:
(hereinafter
called “2146281 Ontario”)
WHEREAS:
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A.
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Owner
owns certain Claims located in the Province of Ontario,
Canada.
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B.
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2146281
Ontario is interested in acquiring an undivided one hundred (100%)
per
cent interest in such Claims.
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C.
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Owner
is prepared to grant 2146281 Ontario an option to acquire an undivided
one
hundred (100%) per cent interest in such Claims on the terms and
conditions hereinafter set forth.
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NOW
THEREFORE, in consideration of the premises and the mutual obligations
hereinafter described, and intending to be legally bound, the parties agree
as
follows:
ARTICLE 1
INTERPRETATION
AND DEFINITIONS
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1.1
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Definitions
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As
used
in this Agreement, the following words and phrases have the following
meanings:
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(a)
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“Affiliate”
means any person, partnership, limited liability company, joint venture,
corporation, or other form of enterprise which controls, is controlled
by,
or is under common control with a party to this
Agreement.
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(b)
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“Agreement”
means this agreement as the term is defined in Section 1.3
hereof.
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(c)
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“Force
Majeure” means any event beyond a party’s reasonable control
including laws which prohibit a party’s ability to comply with its
obligations; action or inaction of civil or military authority; mining
casualty; damage to or destruction of mine, plant or facility; fire;
explosion; flood; insurrection; riot; labour disputes; and acts of
God,
but does not include a party’s inability to make any payments required
under this Agreement.
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(d)
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“Claims”
means all mineral rights constituting the claim units marked as such
on
Schedule A attached to this
Agreement.
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(e)
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“NMR”
means the net mineral royalty reserved by Owner and calculated in
accordance with Schedule B
hereto.
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(f)
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“Option”
has the meaning given that term by Section
2.1.
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(g)
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“Option
Payments” has the meaning given that term by Section
2.1.
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(h)
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“Option
Period” means the period of time from the execution of this
Agreement to the exercise, abandonment or termination of the Option
in
accordance with the terms and conditions of this
Agreement.
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1.2
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Schedule
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The
following schedules are attached to and form part of this
Agreement:
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Schedule A
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List
of Claims
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Schedule B
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Calculation
of NMR
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1.3
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Entire
Agreement
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This
agreement and the attached schedules and all properly executed amendments are
hereinafter collectively referred to as this
“Agreement”. This Agreement constitutes the entire
agreement between the parties and supersedes all previous agreements and
undertakings relating to the subject matter. The parties acknowledge
that there are no agreements, undertakings, representations, warranties or
conditions collateral to this Agreement except as specifically stated otherwise
in this Agreement.
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1.4
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Caption
and Headings
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The
division of this Agreement into articles and sections and the insertion of
headings is for convenience of reference only and shall not affect the
interpretation of this Agreement. Any reference to a section or
article shall be a reference to a section or article of this Agreement unless
specifically stated otherwise.
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1.5
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Extended
Meanings
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In
this
Agreement, where the context so requires or permits, the masculine gender shall
include the feminine and neuter genders, the plural shall include the singular
and vice versa, and the words “person” and “persons” shall include corporations,
partnerships, and all other entities of whatever description.
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1.6
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Currency
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In
this
Agreement all statements of and references to dollar amounts shall mean United
States dollars.
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1.7
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Governing
Law
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This
Agreement shall be interpreted in accordance with the laws of the Province
of
Ontario, Canada, and the federal laws of Canada as applicable
therein.
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1.8
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Severability
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If
any
provision of this Agreement is found invalid, illegal, or incapable of
enforcement by any Court of competent jurisdiction, such provision and the
remaining provisions of the Agreement shall continue to be enforceable to the
extent permitted by such Court against any person(s) and in any circumstance(s)
other than those to whom it has been found invalid, illegal or incapable of
enforcement.
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1.9
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Amendments
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No
amendments to this Agreement shall be of any force and effect unless executed
in
writing by all the parties to this Agreement.
ARTICLE 2
GRANT
AND EXERCISE OF OPTION
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2.1
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Option
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Owner
grants 2146281 Ontario an exclusive and irrevocable option (the
“Option”) to acquire an undivided one hundred (100%) per cent
interest in the Claims by making the following payments (the “Option
Payments”) to the Owner:
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(a)
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(b)
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$5,000
which was paid to the owner upon signing of the term sheet subject
to 60
day due diligence, the receipt of which is hereby
acknowledged;
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(c)
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$15,000
which was paid to Owner on or before May 14, 2007, the receipt of
which is
hereby acknowledged;
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(d)
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$40,000
will be paid to Owner by no later than May 14,
2008;
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(e)
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$60,000
will be paid to Owner by no later than May 14, 2009;
and
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(f)
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$80,000
will be paid to Owner by no later than May 14,
2010.
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2.2
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Exercise
of Option
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(a)
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The
Option shall be automatically exercised and the Claims vested in
2146281
Ontario making all the Option Payments set forth in Section
2.1. Upon exercise of the Option in accordance with that
Section, 2146281 Ontario shall have earned and acquired an undivided
hundred (100%) per cent ownership interest in and to the Claims free
and
clear of any mortgages, liens, charges, pledges, security interests,
encumbrances and any other claims of any description, but subject
to a 3%
NMR, determined and paid in accordance Schedule B
hereto.
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(b)
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The
3% NMR may be partially purchased (the “Buyout”) by
2146281 Ontario at any time (as to 50% thereof - leaving Owner with
an NMR
equal to 1.5%) by 2146281 Ontario paying to Owner
$1,500,000. This purchase will not affect the NMR that is
otherwise due to Owner at the date of the
Buyout.
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2.3
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Results
of Prior Exploration Work
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(a)
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Immediately
following the execution of this Agreement, Owner shall deliver to
2146281
Ontario all technical data for the Claims in its possession including,
but
without limitation, drilling, geophysics and geological information
held
by Owner.
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(b)
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Should
this Agreement be terminated, for whatever reason, prior to vesting,
then
2146281 Ontario will return and forward to Owner copies of data and
information received from Owner but 2146281 Ontario will not be obliged
to
return any Claims data otherwise acquired by 2146281 Ontario during
the
Option Period.
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2.4
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Title
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Claims
will be transferred to 2146281 Ontario upon receipt of the 500,000 common shares
referred to in Clause 2.1(a). Within thirty (30) days following the
delivery of the common stock, Owner will provide 2146281 Ontario with executed
transfers of an undivided hundred (100%) percent interest in the Claims and
will
provide any additional assistance required by 2146281 Ontario or its nominee
to
legally record the transfers.
ARTICLE 3
REPRESENTATIONS
AND WARRANTIES
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3.1
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Representations
and Warranties by Owner
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Owner
acknowledges, represents and warrants that:
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(a)
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Owner
has all requisite power and authority to perform his obligations
under
this Agreement;
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(b)
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all
necessary action has been taken by Owner to execute and allow the
proper
performance of the terms of this Agreement, and this Agreement constitutes
a valid and binding obligation of Owner enforceable in accordance
with its
terms;
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(c)
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to
the best of Owner’s knowledge the location of each of the Claims on the
ground conforms to the description appearing on records in the appropriate
records office, and the Claims were properly located according to
the laws
of Ontario and will be in good standing for at least 180-days days
after
the execution of this Agreement;
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(d)
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Owner
has not received notice of any violation of or investigation relating
to
any federal, provincial or local environmental or pollution law,
regulation or ordinance with respect to the
Claims;
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(e)
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to
the best of Owner’s knowledge there are no reclamation liabilities in
connection with the Claims and, in particular, there are no obligations
to
monitor or clean up any preexisting mine sites or mine waste dumps
or
tailings;
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(f)
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Owner’s
interest in the Claims is free and clear of any mortgages, liens,
charges,
pledges, security interests, encumbrances or other claims of any
description and, upon exercise of the Option by 2146281 Ontario,
2146281
Ontario will acquire an undivided one hundred percent (100%) interest
in
the Claims free and clear of any mortgages, liens, charges, pledges,
security interests, encumbrances or other claims of any description,
except for the NMR set out in Section 2.2 and Schedule B of this
Agreement;
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(g)
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no
person has any right or agreement, option, understanding, prior commitment
or privilege capable of becoming an agreement for the purchase or
acquisition from Owner of any interest in the
Claims;
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(h)
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all
assessment work required to maintain the Claims in full force and
effect
has been performed as of the execution of this
Agreement;
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(i)
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there
are no royalties or other latent interests in the Claims owing to
any
other parties, except as outlined in Section 2.2 and Schedule B of
this Agreement;
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(j)
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none
of the Shares have been registered under the 1933 Act, or under any
state
securities or “blue sky” laws of any state of the United States, and,
unless so registered, may not be offered or sold in the United States
or,
directly or indirectly, to U.S. Persons, as that term is defined in
Regulation S under the 1933 Act (“Regulation S”),
except in accordance with the provisions of Regulation S, pursuant
to an
effective registration statement under the 1933 Act, or pursuant
to an
exemption from, or in a transaction not subject to, the registration
requirements of the 1933 Act;
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(k)
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the
decision to execute this Agreement and acquire the Shares hereunder
has
not been based upon any oral or written representation as to fact
or
otherwise made by or on behalf of
Owner;
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(l)
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no
securities commission or similar regulatory authority has reviewed
or
passed on the merits of the Shares;
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(m)
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there
is no government or other insurance covering the
Shares;
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(n)
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Owner
has not acquired the Shares as a result of, and will not itself engage
in,
any “directed selling efforts” (as defined in Regulation S under the ▇▇▇▇
▇▇▇) in the United States in respect of any of the Shares which would
include any activities undertaken for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the market
in
the United States for the resale of any of the Shares; provided,
however,
that Owner may sell or otherwise dispose of any of the Shares pursuant
to
registration thereof under the 1933 Act and any applicable state
securities laws or under an exemption from such registration
requirements;
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(o)
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no
representation has been made to Owner that any of the Shares will
become
listed on any stock exchange or automated dealer quotation system,
except
that certain market makers may maintain a quotation for the parent
corporation’s shares of common stock on the NASD Inc.’s Over the Counter
Bulletin Board;
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(p)
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Owner
will refuse to register any transfer of the Shares not made in accordance
with the provisions of Regulation S, pursuant to an effective registration
statement under the 1933 Act or pursuant to an available exemption
from
the registration requirements of the 1933
Act;
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(q)
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the
statutory and regulatory basis for the exemption claimed for the
offer
Shares, although in technical compliance with Regulation S, would
not be
available if the offering is part of a plan or scheme to evade the
registration provisions of the 1933
Act;
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(r)
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Owner
has been advised to consult Owner’s own legal, tax and other advisors with
respect to the merits and risks of an investment in the Shares and
with
respect to applicable resale restrictions, and the Owner is solely
responsible (and 2146281 Ontario is not in any way responsible) for
compliance with:
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(i)
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any
applicable laws of the jurisdiction in which Owner is resident in
connection with the distribution of the Shares hereunder,
and
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(ii)
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applicable
resale restrictions;
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(s)
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Owner
is not a U.S. Person;
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(t)
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Owner
is not acquiring the Shares for the account or benefit of, directly
or
indirectly, any U.S. Person;
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(u)
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Owner
is acquiring the Shares for investment only and not with a view to
resale
or distribution and, in particular, Owner has no intention to distribute
either directly or indirectly any of the Shares in the United States
or to
U.S. Persons;
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(v)
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Owner
is outside the United States when receiving and executing this
Subscription Agreement and is acquiring the Shares as principal for
Owner’s own account, for investment purposes only, and not with a view
to,
or for, resale, distribution or fractionalisation thereof, in whole
or in
part, and no other person has a direct or indirect beneficial interest
in
such Shares;
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(w)
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Owner
acknowledges that he has not acquired the Shares as a result of,
and will
not himself engage in, any “directed selling efforts” (as defined in
Regulation S under the ▇▇▇▇ ▇▇▇) in the United States in respect
of any of
the Shares which would include any activities undertaken for the
purpose
of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for the resale of any
of the
Shares; provided, however, that Owner may sell or otherwise dispose
of any
of the Shares pursuant to registration of any of the Shares pursuant
to
the 1933 Act and any applicable state securities laws or under an
exemption from such registration requirements and as otherwise provided
herein;
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(x)
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Owner
is not aware of any advertisement of any of the Shares;
and
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(y)
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no
person has made to Owner any written or oral
representations:
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(i)
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that
any person will resell or repurchase any of the
Shares;
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(ii)
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that
any person will refund the purchase price of any of the
Shares;
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(iii)
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as
to the future price or value of any of the Shares;
or
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(iv)
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that
any of the Shares will be listed and posted for trading on any stock
exchange or automated dealer quotation system or that application
has been
made to list and post any of the Shares of 2146281 Ontario on any
stock
exchange or automated dealer quotation
system.
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3.2
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Survival
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Owner
acknowledges that 2146281 Ontario is relying on the representations and
warranties contained in Section 3.1 in entering into this Agreement and that
such representations and warranties are continuing and survive the execution
of
this Agreement.
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3.3
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Representations
and Warranties by 2146281
Ontario
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2146281
Ontario represents and warrants that:
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(a)
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it
has been duly incorporated and is a validly subsisting corporation
under
the laws of the Province of Nova Scotia and has all corporate power
and
authority to perform its obligations under this Agreement;
and
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(b)
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all
necessary corporate action has been taken by 2146281 Ontario to authorize
the execution, delivery and performance of this Agreement, and this
Agreement constitutes a valid and binding obligation of 2146281 Ontario
enforceable in accordance with its
terms.
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3.4
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Indemnity
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Each
party will indemnify and save the other party and its directors, officers,
employees, agents, representatives, subcontractors and Affiliates harmless
from
all losses, damages, costs, actions, and suits arising out of or in connection
with any breach by that party of any representation, warranty,
covenant or agreement contained in this Agreement. This indemnity
shall survive the termination of this Agreement.
ARTICLE 4
EXPLORATION
AND DEVELOPMENT ACTIVITIES
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4.1
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Right
to Explore and Develop
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Owner
grants to 2146281 Ontario, its employees, directors, officers, agents,
representatives and contractors, the exclusive right to enter upon the property
comprising the Claims for the purpose of exploration, development, mining and
such other operations as 2146281 Ontario considers necessary during the Option
Period, the nature, manner and extent of which operations will be in 2146281
Ontario’s sole discretion.
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4.2
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Conduct
of Exploration and Development
Work
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2146281
Ontario shall perform its exploration and development work on the Property
comprising the Claims in accordance with good mining practice and shall comply
with all applicable laws and regulations.
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4.3
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Installation
of Equipment
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2146281
Ontario may install, maintain, replace and remove any and all mining machinery,
equipment, tools, and facilities which it may desire to use in connection with
its exploration and development activities on the property comprising the
Claims. Upon termination of this Agreement for any reason, 2146281
Ontario shall within a period of six (6) months following such termination
remove its equipment at its sole cost and expense from the Claims, having
Owner’s permission to enter onto the property comprising the Claims for such
purpose.
ARTICLE 5
2146281
ONTARIO’S OBLIGATIONS
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5.1
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Reporting
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By
no
later than each anniversary of this Agreement, 2146281 Ontario shall provide
a
copy of any geological report that has been prepared respecting exploration
conducted on the Claims in the previous year.
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ARTICLE 6
ASSIGNMENTS
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6.1
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Assignments
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2146281
Ontario shall be entitled to assign its rights and obligations under this
Agreement without the prior written consent of Owner.(the owner will object
to
this)
ARTICLE 7
TERMINATION
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7.1
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2146281
Ontario’s Right to
Terminate
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2146281
Ontario shall have the right to terminate this Agreement and its interest in
the
Claims at any time during the Option Period upon written notice to the Owner
thirty (30) days prior to the contemplated termination date.
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7.2
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Termination
for Default
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If
at any
time during the Option Period, 2146281 Ontario fails to duly pay or cure any
default in the performance of any obligation of this Agreement within a period
of thirty (30) days after receipt of a default notice from Owner, Owner may
terminate the Option. Exercise of such right by Owner shall be
without prejudice to any other rights or remedies Owner may have at law or
in
equity as a result of such default of this Agreement by 2146281
Ontario. Any Claims transferred to 2146281 Ontario prior to all
Option Payments being made will revert and be transferred back to Owner in
the
event of a default.
ARTICLE 8
FORCE
MAJEURE
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8.1
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Suspension
of Obligation
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If
2146281 Ontario is prevented by Force Majeure from timely performance of any
of
its obligations under this Agreement (other than the payment of any of the
Option Payments), such failure shall be excused and the period for performance
and the Option Period shall be extended for an additional period of time equal
to the duration of such Force Majeure. Upon the occurrence and upon
the termination of a Force Majeure, 2146281 Ontario shall promptly notify Owner
in writing. 2146281 Ontario shall use reasonable efforts to remedy
any Force Majeure, but shall not hereunder be obligated to contest the validity
of any law or regulation, nor any action or inaction of any civil or military
authority.
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ARTICLE 9
MISCELLANEOUS
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9.1
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Notices
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Any
notice under this Agreement will be given in writing, by delivery in person
to a
named representative or by mail or facsimile, properly addressed to each
party. A notice given will be deemed given only when received by the
party to whom such notice is directed; except that any notice given by facsimile
properly addressed to the party, to whom given, shall be deemed given to and
received by the party, to whom directed, 48 hours after such notice is
successfully faxed or ten days after it is mailed, provided there is no postal
disruption at the time. Each party’s address will be the following
until such party specifies another address by written notice:
To
Owner:
▇▇▇▇
▇▇▇▇▇
▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇
Tel.:
Facsimile:
To
2146281 Ontario:
2146281
Ontario Inc.
▇/▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ – ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇.▇. ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Tel (604)
687 – 5700
Fax
(604)
687 – 6314
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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9.2
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Area
of Influence
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Owner
agrees that there shall be an area of influence (the “Area of
Influence”) respecting any additional claims staked or recorded by
Owner which are contiguous to the Claims and any such claims will fall under
the
terms of this Agreement. In the event that 2146281 Ontario acquires
additional claims within the Area of Influence from Owner pursuant to this
Section, 2146281 Ontario agrees to pay Owner $150.00 per additional claim unit
so acquired.
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9.3
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Relationship
of Parties
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This
Agreement is not intended to create any partnership or agency relationship
between the parties or fiduciary obligations of any description, and this
Agreement shall not be construed so as to render the parties liable as partners
or as creating a partnership, and no party shall be or shall be deemed to be,
or
shall hold itself out to be an agent of any other party.
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9.4
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Successors
and Assigns
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This
Agreement shall be binding upon and inure to the benefit of the respective
successors and permitted assigns of the parties.
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9.5
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Regulatory
Approval
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This
Agreement and the obligations of 2146281 Ontario hereunder are subject to
regulatory approval, as applicable.
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9.6
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Prior
Agreements
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The
Agreement contains the entire agreement and understanding of the parties and
replaces all prior agreements bearing on the subject matter hereof.
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9.7
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Counterparts
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This
Agreement may be executed in counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties hereto may execute
this Agreement by signing any such counterpart.
IN
WITNESS WHEREOF the parties make this Agreement effective as of the
date first above written.
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2146281
ONTARIO INC.
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OWNER:
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Per:
/s/ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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/s/▇▇▇▇
▇▇▇▇▇
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|
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
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▇▇▇▇
▇▇▇▇▇
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SCHEDULE A
to
List
of Claims
Mining
Claims Representing ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mining Division, Monmouth
Township, Ontario, Canada)
4211944
(4 units) – lot 5 con 7 and lot 6 con 7
4211945
(1 unit) – ▇▇▇ ▇ ▇▇▇ ▇ (▇▇▇▇▇ ▇)
▇▇▇▇▇▇▇
(2 units) – lot 8 con 7
4211947
(8 units) – lots 5, 6, 7 and 8 con 6
4211948
(12 units) – lots 3, 5, 5, 6, 7 and 8 con 5
4211949
(12 units) – lots 3, 5, 5, 6, 7 and 8 con 4
4220033
(5 units) – ▇▇▇▇ ▇, ▇, ▇▇▇▇ ½ of Lot 5, con 3422034 (2 units) – Lot 2, con
4
4220034
(2 units) – all of Lot 2, con 4
4220035
(11 units) – East ½ of ▇▇▇ ▇, ▇▇▇▇ ▇,▇,▇,▇,▇▇, con 3
4220036
(4 units) – ▇▇▇▇ ▇, ▇▇, ▇▇▇ ▇
▇▇▇▇▇▇▇
(2 units) – Lot 9, con 5
4220038
(4 units) – ▇▇▇▇ ▇▇, ▇▇, ▇▇▇ ▇
▇▇▇▇▇▇▇
(4 units) – ▇▇▇▇ ▇, ▇▇, ▇▇▇ ▇
▇▇▇▇▇▇▇▇ ▇
to
Net
Mineral Royalty
|
1.
|
Definitions
|
Where
used herein:
|
|
(a)
|
“Agreement”
means the agreement to which this schedule is
attached.
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(b)
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“Claims”
means those mineral claims set forth in Schedule A to the
Agreement.
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(c)
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“Fiscal
Period” means a three month period ending on the last day of
March, June, September and December of each calendar
year;
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(d)
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“Net
Mineral Royalty” or “NMR” means the Revenue
received by 2146281 Ontario from the sale of Product from mining
operations on the Claims.
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(e)
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“Ore”
means any material containing a mineral or minerals of commercial
economic
value mined from the Claims;
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(f)
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“Product”
means Ore mined from the Claims and any concentrates or other materials
or
products derived therefrom; provided that if any such Ore, concentrates
or
other materials or products are further treated as part of the mining
operation in respect of the Claims, such Ore, concentrates or other
materials or products shall not be considered to be
“Product” until after they have been so
treated.
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(g)
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“Revenue”
means gross revenues during each Fiscal Period received by the Royalty
Payer from the sale of Product by the Royalty Payer to the smelter,
refiner or other purchaser, plus any bonuses and subsidies less all
penalties, umpire assaying, assaying, transportation costs from mine
site,
sampling charges, and insurance costs, whether deducted by such purchaser
or otherwise paid or incurred by Royalty Payer. Where revenue otherwise
to
be included under this subsection is received by Royalty Payer in
a
transaction with a party with whom it is not dealing at arm’s length, the
revenue to be included shall be based on the fair market value under
the
circumstances and at the time of the
transaction.
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(h)
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“Royalty
Interest” means the NMR payable to Royalty Holder pursuant to the
Agreement;
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(i)
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“Royalty
Holder” means “Owner”, as defined in the
Agreement, his heirs, executors and
assigns;
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(j)
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“Royalty
Payer” means “2146281 Ontario”, as defined in
the Agreement, its successors and
assigns.
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Capitalized
terms which are not specifically defined in this Schedule shall have the meaning
given to them in the Agreement.
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2.
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Net
Mineral Royalty
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For
each
Fiscal Period, Royalty Payer shall pay Royalty Holder the Royalty Interest
specified by the Agreement, calculated and paid in accordance with this
Schedule.
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3.
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Calculation
of Net Mineral Royalty
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The
NMR
shall be computed at the end of each Fiscal Quarter. On or before the
last day of the first month following each Fiscal Quarter, a statement shall
be
furnished setting forth in reasonable detail the computation of the NMR for
the
previous Fiscal Quarter and the Royalty Interest due to the Royalty Holder,
if
any. Payment for the Royalty Interest due, if any, shall be enclosed
with such statement.
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4.
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Audit
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The
Royalty Holder, upon written notice to the Royalty Payer shall have the right
to
have an independent firm of chartered accountants audit the records that relate
to the calculation of the Royalty Interest within twenty-four (24) months after
receipt of each payment described in this Schedule.
The
Royalty Holder shall be deemed to have waived any right it may have had to
object to a payment made for any calendar year unless it provides notice in
writing of such an objection within twenty-four (24) months after receipt of
each payment. If the parties are unable to resolve any such dispute
within sixty (60) days after receipt of such notice, the dispute shall be
resolved by arbitration.
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5.
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Commingling
of Ore
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Before
any Products from the Claims are commingled with ores and minerals from other
properties, the Products from the Claims shall be measured and sampled in
accordance with sound mining and metallurgical practices for moisture, metal,
commercial minerals and other appropriate content. Representative samples of
the
Products shall be retained by the Royalty Payer and assays (including penalty
substances) and other appropriate analyses of these samples shall be made before
commingling to determine metal, commercial minerals and other appropriate
content. Detailed records shall be kept by Royalty Payer showing
measures, moisture, assays of metal, commercial and other appropriate content
and penalty substances, and gross metal content of the Products. From
this information, Royalty Payer shall determine the amount payable to Royalty
Holder from Products from the Claims commingled with ores and minerals from
other properties.