Exhibit 10.1

 

Certain portions of this Lease, for which confidential treatment has been
requested, have been omitted and filed separately with the Securities and
Exchange Commission. Sections of the agreement where portions have been omitted
have been identified in the text.

 

STATE OF ALASKA

DEPARTMENT OF NATURAL RESOURCES

MENTAL HEALTH TRUST LAND OFFICE

718 L Street, Suite 202

Anchorage, Alaska 99501

 

UPLAND MINING LEASE

 

MHT NO. 9400248

 

THIS UPLAND MINING LEASE (defined below as “Lease”) is made by and between:
(1) the Alaska Mental Health Trust Authority (“Trust Authority”), a public
corporation within the Alaska Department of Revenue (AS 47.30.011 et seq.),
acting by and through the State of Alaska, Department of Natural Resources,
Mental Health Trust Land Office (“TLO”), pursuant to AS 37.14.009(a)(2) and AS
38.05.801 (the Trust Authority and the TLO are collectively the Lessor and
referred to herein as the “TLO”), and (2) AngloGold (U.S.A.) Exploration Inc.,
the Lessee, a Delaware corporation, whose address is 7400 E. Orchard Road,
Greenwood Village, Colorado 80111, referred to herein as “AngloGold”. This Lease
is effective as of July 1, 2004 (defined below as the “Effective Date”).

 

This Lease includes this Preamble, the following Recital and Definitions,
Numbered Paragraphs 1 through 25, Attachments A, B, C, and D hereto, and
Schedules 1 through 3 attached hereto.

 

RECITAL

 

The TLO has determined that it is in the best interests of the beneficiaries of
the Alaska Mental Health Trust to lease to AngloGold pursuant to this Lease the
lands described in Attachment A hereto (defined below as the “Leased Area”), and
AngloGold desires to lease the Leased Area from the TLO pursuant to this Lease.

 

DEFINITIONS

 

As used in this Lease, the following terms have the following meanings:

 

“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

 

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Control with another person, partnership, limited liability company, joint
venture, corporation, or other form of enterprise.

 

“Commercial Production” means the production of Minerals for sale from the
Leased Area for at least ninety (90) consecutive days during any three (3) year
period in quantities sufficient to yield a return in excess of operating costs,
even though capital costs already incurred may never be repaid and the
undertaking considered as a whole may ultimately result in a loss.

 

“Control” used as a verb means as follows: when used with respect to an entity,
the ability, directly or indirectly through one or more intermediaries, to
direct or cause the direction of the management and policies of such entity
through (i) the legal or beneficial ownership of voting securities or membership
interests, (ii) the right to appoint managers, directors or corporate
management, (iii) contract, (iv) operating agreement, (v) voting trust, or
otherwise; when used with respect to a person, the actual or legal ability to
control the actions of another, through family relationship, agency, contract,
or otherwise. “Control” used as a noun means an interest which gives the holder
the ability to exercise any of the foregoing powers.

 

“Effective Date” means July 1, 2004.

 

“Force Majeure” means any cause beyond AngloGold’s reasonable control, including
but not necessarily limited to the following: acts of God (e.g., earthquake,
fire, flood, volcanic eruption); unusually severe weather; acts of war,
insurrection, riots or terrorism; strikes, lockouts, or other labor disputes;
inability to obtain necessary labor or materials or to obtain necessary permits,
approvals, or consents; damage to, destruction of, or unavoidable shutdown of
necessary facilities or equipment; acts or failures to act on the part of
federal, state, or local governmental authorities (including courts).

 

“Information” means all factual non-interpretive geological, geochemical, and
geophysical data and information, including but not limited to maps, drill logs,
sample logs, assay results, etc.

 

“Lease” means this Upland Mining Lease between the TLO and AngloGold, including
Attachments A, B, C, and D and Schedules I through 3 attached hereto.

 

“Lease Year” means the period commencing on July 1 and ending on the following
June 30.

 

“Leased Area” means the lands described in Attachment A hereto, as modified from
time to time pursuant to this Lease.

 

“Materials” means all rock, stone, gravel, sand, and other similar materials but
excluding Minerals.

 

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“Minerals” means all locatable minerals subject to 11 AAC 99.100.

 

“Net Smelter Returns” means, for any particular calendar month, the sum of the
following:

 

(1)                                 [***]*;

 

(2)                                 [***]*;

 

(3)                                 [***]*.

 

[***]*;

 

(i)                                     [***]*; and

 

(ii)                                  [***]*;

 

(iii)                               [***]*;

 

(iv)                              [***]*.

 

[***]*.

 

“Plan of Operations” means a plan of operations submitted to and approved by the
TLO pursuant to Paragraph 11 of this Lease. The application for a Plan of
Operations (a) shall satisfy the requirements of 11 AAC 96.030 (regardless of
whether the proposed activity is of a type described in 11 AAC 96.020 for which
no application or permit would be required under 11 AAC 96.030) or 11 AAC 86.800
(if the TLO elects to require AngloGold to comply therewith or if AngloGold
otherwise elects to comply therewith) and (b) shall include such supplemental
information as the TLO reasonably requests.

 

“Price of Gold” means the average, for the particular calendar month for which
net smelter returns are being calculated, of the daily London Bullion Market
Association P. M. Gold Fixing (or if such price is unavailable, the daily COMEX
spot price for gold (or if such price is unavailable, another published price
for gold that is generally used and accepted by the industry)), as established
from time to time during said calendar month.

 

“Reclamation Plan” means a reclamation plan submitted to and approved by the
Commissioner of the Alaska Department of Natural Resources pursuant to, in
accordance with, and to the extent required by AS 27.19.010-27.19.100 and 11 AAC
97.

 

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*  CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION

 

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“State Mining Claim” means a mining claim, a leasehold location, or a mining
lease initiated or granted under AS 38.05.195, AS 38.05.205, or AS 38.05.275.

 

“Support Lands” (N/A)

 

“Surface-Disturbing Activity” means an activity for which a miscellaneous land
use permit must be obtained under 11 AAC 96 before conducting such activity on a
State Mining Claim not covered by a plan of operations approved under 11 AAC
86.800.

 

“Trading Activities” means forward sales, future trading or commodity options
trading, and other price hedging, price protection, gold and silver loans,
financing, and speculative arrangements which may involve the possible delivery
of Minerals produced from the Leased Area but do not result in the actual sale
and delivery of Minerals produced from the Leased Area.

 

“Work Expenditures” means [***]*.

 

AGREEMENT

 

1.                                      Grant of Lease.

 

a)                                     Subject to the royalty reserved under
Paragraph 7 hereof and to the other provisions of this Lease, the TLO hereby
grants to AngloGold the following rights, to have and to hold for the term set
out in Paragraph 5 hereof:

 

i)                                         the exclusive right to explore for,
mine, remove, and dispose of all Minerals situated on, in, or under the Leased
Area, together with any and all rights appurtenant thereto including but not
necessarily limited to water rights and express and implied access rights; and

 

ii)                                      the right to extract and use Materials
situated on, in, or under the Leased Area in connection with the foregoing; and

 

iii)                                   the right to conduct reclamation on, in,
and under the Leased Area.

 

b)                                     Subject to the other provisions of this
Lease (including but not limited to Paragraphs 10 and 11 hereof), AngloGold may
mine and remove Minerals by any method consistent with good mining practice,
including but not limited to underground, surface, or in situ mining. The rights
granted to AngloGold by this Lease shall be exercised in a manner that will not
unreasonably interfere with the reserved rights of the TLO or of its permittees,
lessees, or grantees.

 

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*  CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION

 

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c)                                      If a survey of the Leased Area is
performed subsequent to the Effective Date, then upon completion thereof the
legal description set out in Attachment A will be modified as necessary to
conform the Leased Area to the survey.

 

d)                                     If the TLO’s ownership of the Minerals
within the Leased Area is less than the entire and undivided interest, then
(i) the grant under this Lease is effective only as to the TLO’s interest in the
Minerals within the Leased Area, (ii) the advance royalties due under this Lease
shall be paid to the TLO in the proportion that the TLO’s interest bears to the
entire undivided interest, and (iii) the production royalty due under this Lease
shall be due only on that portion of the Minerals extracted from the Leased Area
that is attributable to the interest of the TLO in the Leased Area.

 

2.                                      Surface Lease or Purchase for Support
Facilities

(N/A)

 

3.                                      Area of Interest.

(N/A)

 

4.                                      Reserved Rights.

 

a)                                     The TLO, for itself and others, reserves
all rights not expressly granted to AngloGold by this Lease. These reserved
rights include the following:

 

i)                                         the right to explore for, remove, and
dispose of from the Leased Area all resources other than Minerals;

 

ii)                                      the right to establish or grant
easements and rights-of-way upon, in, across, or through the Leased Area for any
lawful purpose, including roads, railroads, well sites, pipelines, utility
lines, drill holes, shafts, and tunnels necessary or convenient for the working
of the Leased Area for resources other than Minerals, or necessary or convenient
for access to or the working of other land for any useful purpose;

 

iii)                                   the right to manage and to convey to
third parties by grant, lease, permit, or otherwise, any and all interests in
the Leased Area other than those granted by this Lease, provided that any such
conveyance to a third party shall be made subject to AngloGold’s rights under
this Lease.

 

b)                                     The rights reserved pursuant to Paragraph
4(a) hereof shall not be exercised in any manner that unreasonably interferes
with AngloGold’s rights or operations under this Lease. The TLO shall provide
AngloGold with prior notice of the TLO’s intent to exercise any such reserved
rights, the TLO and AngloGold shall

 

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work cooperatively to identify potential conflicts, and the TLO shall require,
as a condition to the exercise by any permittee, AngloGold, or grantee of the
TLO of any of the TLO’s reserved rights, such stipulations as appear necessary
to avoid unreasonable interference with AngloGold’s enjoyment of this Lease or
endangerment of AngloGold’s operations. The exercise of any of the TLO’s
reserved rights shall be subject to the consent of AngloGold, which consent
shall not be unreasonably withheld. If at any time the exercise of any of the
TLO’s reserved rights must cease or a change must be made in the manner or place
of such exercise in order to avoid unreasonable interference with AngloGold’s
enjoyment of this Lease or endangerment of AngloGold’s operations, such
cessation or change shall occur at no cost to AngloGold.

 

5.                                      Term.

 

Unless sooner terminated pursuant to the terms of this Lease or extended per
Paragraph 7(a), this Lease shall remain in effect for three (3) years from the
Effective Date. It may be extended for two (2) extensions of three (3) years
each upon timely written request for extension given by AngloGold and written
acceptance thereof given by the TLO. Acceptance will not be unreasonably denied
provided AngloGold is in compliance with the terms of this Lease. It shall
continue in effect for so long thereafter as Commercial Production of Minerals
from the Leased Area continues. If AngloGold desires to secure an extension, it
shall so notify the TLO not less than ninety (90) days prior to the date this
Lease would otherwise expire.

 

6.                                      Work Commitment.

 

In order to keep this Lease in full force and effect, AngloGold must incur the
following Work Expenditures for or during each of the following Lease Years:

 

a)                                     Lease Years 1-3: $10 per acre per year

b)                                     Lease Years 4-6: $20 per acre per year

c)                                      Lease Years 7-9: $30 per acre per year

 

If the Lease is extended beyond Year 9 (as provided for in Paragraph 7), further
work commitment requirements will be negotiated.

 

[***]*.

 

[***]*.

 

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*  CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION

 

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7.                                      Advance Royalty; Production Royalty.

 

a)                                     Advance Royalty. Unless and until this
Lease expires or is sooner terminated, and commencing on the date of execution
of the Lease, AngloGold shall pay to the TLO on or before the first day of each
Lease Year during the term of this Lease an advance royalty payment in
accordance with the following schedule:

 

i)                                         Lease Years 1-3:  $5 per acre per
year

ii)                                      Lease Years 4-6:  $15 per acre per year

iii)                                   Lease Years 7-9:  $25 per acre per year

 

The obligation of AngloGold to make the Advance Minimum Royalty (AMR) payments
shall cease upon the earlier of (i) the commencement of production royalty
payments or (ii) the termination or expiration of the Lease.

 

In the event that commercial production begins but is later suspended, AngloGold
may extend the Lease by paying [***]*.

 

In the event that production is not occurring by the end of the third term, the
Lease may be extended by paying a flat annual fee of 125% of the last rate paid
for Advanced Minimum Royalties, unless AngloGold is not diligently pursuing
development of the Lease, in which case the Lease can be terminated at the TLO’s
discretion. The fee will be credited against future royalty payments.

 

b)                                     Production Royalty.

 

1)    The TLO hereby reserves, and AngloGold shall pay to the TLO (except as
provided in Paragraph 7(a) hereof), a royalty on all Minerals produced, saved,
removed, and sold from the Leased Area equal to the percentage of Net Smelter
Returns applicable to said Minerals determined in accordance with the following:

 

Price of Gold (per ounce)

 

Production Royalty

 

Below $300.00

 

2.5

%

$300.01 - 350.00

 

3.0

%

$350.01 - 400.00

 

3.5

%

$400.01 - 450.00

 

4.0

%

$450.01 - 500.00

 

4.5

%

Above $500.00

 

5.0

%

 

2)             For so long as this Lease remains in effect, AngloGold agrees to
grant to the TLO a one percent (1%) Net Smelter Return (NSR) royalty on
production from the federal unpatented mining claims AngloGold has leased, a

 

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*  CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION

 

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description of which is included as Attachment D to this Lease. Additionally,
AngloGold agrees to grant a royalty interest in production from any claims that
AngloGold may lease or otherwise control from Alaska Placer Development Company,
also known as Livengood Placers, Inc. This royalty interest will be a 0.5% Net
Smelter Return royalty for all gold mined and sold from the royalty lands when
the gold is sold for a price below $[***]* per ounce, and a 1% NSR for that
which is sold at $[***]* per ounce and above, regardless of whether the claims
from which gold is produced and sold are located on state, federal, or Trust
land, without consideration of other royalty requirements that may be associated
with those claims.

 

c)                                      Commingling. AngloGold may commingle
ores or products from the Leased Area with ores or products from other
properties, either before or after concentration or beneficiation, so long as
AngloGold ensures that adequate surveys of those portions of the Leased Area to
be mined and those portions of other areas to be mined have been completed and
that reasonable and sound mining and metallurgical practices and procedures are
adopted and employed by AngloGold for weighing, determining moisture content,
sampling, assaying, and determining recovery factors for the ores or products to
be commingled. AngloGold shall keep and make available to the TLO at all
reasonable times accurate records (including surveys) of the foregoing,
including but not limited to (a) the actual locations mined, (b) the tonnage or
volume of ores or products from the Leased Area to be commingled, (c) the
tonnage or volume of ores or products from the other properties to be
commingled, and (d) the analyses made thereof. Such information shall be used to
determine, in accordance with reasonable and sound mining and metallurgical
practices and procedures, the quantity of Minerals produced, saved, removed, and
sold from the Leased Area and thus to determine the production royalty to be
paid to the TLO hereunder.

 

d)                                     Accrual; Payment. The obligation to pay
production royalty pursuant to Paragraph 7(b) hereof accrues upon the removal
from the Leased Area of Minerals (or ores or products containing Minerals). Net
Smelter Returns shall be calculated for each calendar month in which any Net
Smelter Returns are realized, and such royalty as may be due thereon shall be
paid within thirty (30) days following the end of the calendar month in which
the Net Smelter Returns are realized. Such payments shall be accompanied by a
statement summarizing the computation of Net Smelter Returns and any deductions
made by AngloGold to recover any unrecovered advance royalty payments made to
the TLO pursuant to Paragraph 7(a) hereof. All production royalty payments shall
be made as required by Paragraph 9 hereof. Monthly production royalty payments
will be provisional and subject to adjustment at the end of AngloGold’s
accounting year. If no written objection is made by the TLO to the correctness
of a production royalty payment or its

 

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*  CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION

 

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accompanying statement within three years from the date of such payment, such
statement shall be deemed conclusively to be correct and such payment sufficient
and complete, and no exception or claim for adjustment shall thereafter be
permitted.

 

e)                                      Duty To Market; Royalty in Kind.
AngloGold shall market in a reasonable and timely manner all Minerals produced
and saved from the Leased Area. The TLO reserves the right to take all or a
portion of production royalty in kind. This right may be exercised after giving
sufficient notice to AngloGold and agreeing on how such a transaction will take
place.

 

f)                                       No Exploration Credit. AngloGold shall
not be entitled to apply exploration credits under AS 27.30.010 as to any
advance royalty or production royalty payments due hereunder.

 

g)                                      Trading Activities. AngloGold shall have
the right to engage in Trading Activities. The TLO acknowledges that the
proceeds of Trading Activities shall not be considered part of or included in
the amounts paid to or received by (or deemed to be paid to or received by)
AngloGold for Minerals for purposes of determining Net Smelter Returns, and that
the TLO shall be neither entitled to participate in the proceeds nor obligated
to share in any losses generated by any Trading Activities.

 

8.                                      Records.

 

a)                                     AngloGold shall keep all records
necessary for calculation of production royalty payments for a period of three
years and shall, upon receipt of written request from the TLO, make available
copies of those records for inspection and copying at a convenient location.

 

b)                                     The TLO will keep information submitted
to the TLO under this Paragraph 8 confidential in accordance with 11 AAC 99.120.

 

9.                                      Payments.

 

All payments due hereunder shall be made payable to the Mental Health Trust Land
Office or as otherwise directed by the TLO, shall refer to this Lease by the MET
number which appears on the first page hereof, and unless otherwise specified
shall be tendered either to the TLO at the following address:

 

Mental Health Trust Land Office

Dept. of Natural Resources

718 L Street, Suite 202

Anchorage, Alaska 99501

 

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or, upon at least sixty (60) days advance written notice to AngloGold, to any
depository designated by the TLO.

 

10.                               Conduct of Operations.

 

AngloGold shall perform all activities under this Lease in a lawful, prudent,
and miner-like manner under and in conformance with a Plan of Operations, a
Reclamation Plan (if required by law), and such other permits and authorizations
as may be required by federal, state, or local law.

 

AngloGold will submit to the TLO a true copy of each application filed by it for
any Reclamation Plan, permit, or other authorization relating to the Leased
Area, of any supplement thereto, and of each decision approving, disapproving,
or otherwise relating to any such application.

 

AngloGold shall notify the TLO of AngloGold’s receipt of any notices of
violation or similar notices received in connection with its activities
hereunder, shall carry out at AngloGold’s expense all lawful orders and
requirements of any governmental authority respecting AngloGold’s activities
hereunder, and shall notify the TLO in writing of the measures being taken by
AngloGold to dispute, remedy, or otherwise resolve the matters raised thereby.
If AngloGold shall fail to resolve any such notice of violation or other similar
notice or to carry out any such lawful order or requirement, the TLO shall have
the right, together with any other available legal recourse (including those
available under Paragraph 17 hereof in case of default), to enter the Leased
Area for the purpose of satisfying (at AngloGold’s expense) AngloGold’s
obligations under this Paragraph 10 and taking (at AngloGold’s expense) such
other actions as may necessary to remedy or prevent additional damage to or
waste of the Leased Area.

 

11.                               Plan of Operations.

 

Before AngloGold may undertake any activities under this Lease, and by April 1
of each Lease Year thereafter, a Plan of Operations that describes the
activities to be conducted in the upcoming operating season must be submitted to
and approved by the TLO. Approval by the TLO of a proposed Plan of Operations
will not be unreasonably withheld, nor will it be construed to have satisfied
any regulatory or other requirements that may be associated with the proposed
operations. At the TLO’s discretion, a Plan of Operations may be developed and
approved in conjunction with a plan of operations submitted to and approved by
the State of Alaska Department of Natural Resources pursuant to 11 AAC 86.800.

 

12.                               The TLO’s Warranties.

 

The TLO hereby represents and warrants that, as of the Effective Date, title to
the Leased Area is free and clear of any interests arising by, through, or under
the TLO since designation of the Leased Area as Mental Health Trust Lands on
June 24, 1994, pursuant to 1994 FSSLA ch. 5 as amended by 1994 SSSLA ch. I. The
TLO hereby expressly disclaims (1) any other representations or warranties
respecting title to the Leased Area, (ii) any representations or

 

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warranties respecting the existence or availability of legal or practical access
to the Leased Area, and (iii) any representations or warranties respecting the
condition of the Leased Area or the suitability of the Leased Area for any
particular purpose.

 

13.                               AngloGold’s Warranties.

 

AngloGold represents and warrants, as of the Effective Date, all of the
following:

 

a)                                     AngloGold is a wholly-owned subsidiary of
AngloGold North America Inc., a Colorado corporation;

 

b)                                     AngloGold has the capacity to enter into
and perform all of its obligations under this Lease and all transactions
contemplated herein, and all corporate and other actions required to authorize
AngloGold to enter into and perform hereunder have been properly taken;

 

c)                                      AngloGold will not violate any law or
regulation applicable to it or breach any other agreement to which it is a party
by entering into or performing under the terms of this Lease; and

 

d)                                     This Lease has been properly authorized
and duly executed and delivered by AngloGold and is valid and binding upon
AngloGold in accordance with the terms hereof, including AngloGold’s
representations and warranties as set forth herein.

 

14.                               Inspection; Reporting; AngloGold’s Obligation
of Confidentiality.

 

a)                                     At all reasonable times AngloGold shall
keep available for inspection (i) the Leased Area, (ii) improvements and
fixtures on the Leased Area, and (iii) all reports and records required by law
or by Paragraph 8 hereof.

 

b)                                     AngloGold shall keep the TLO orally
apprised of when field operations are taking place and shall provide the TLO
with reasonable opportunities to observe field operations.

 

c)                                      AngloGold hereby agrees to meet with the
TLO at the TLO’s office in Anchorage at least once during each Lease Year
commencing with the third Lease Year hereunder to provide the TLO with an
opportunity to discuss with AngloGold such matters of interest or concern to the
TLO relating to AngloGold’s operations under this Lease.

 

d)                                     By March 1 of each Lease Year, and within
two months after the expiration or termination of this Lease, AngloGold shall
deliver to the TLO the following:

 

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1)                                     a report describing the location, nature,
extent, and results of operations conducted by AngloGold during the previous
operating season on or for the benefit of the Leased Area;

 

2)                                     copies of all of the information
generated or obtained by AngloGold during said Lease Year respecting the Leased
Area;

 

provided, however, that AngloGold shall not be obligated to provide any
information respecting any proprietary or confidential interpretive methods; and
provided further, however, that AngloGold makes no representations respecting,
and shall have no liability for, any Information provided hereunder or for any
reliance thereon by the TLO or its successors and transferees. The TLO will keep
information submitted to the TLO under this Paragraph 14 confidential in
accordance with 11 AAC 99.120.

 

e)                                      As long as this Lease remains in effect,
no data pertaining to the Leased Lands shall be divulged or made available to
persons who are not parties hereto without the written consent of both parties.
It is agreed that data may be divulged or made available to a party’s data
processor, reproduction company, interpretive consultants, and other persons
providing necessary services chosen by a party subject to such persons’ agreeing
to be bound by a confidentiality agreement. The foregoing restrictions shall not
apply to a disclosure by either party or its corporate affiliate(s) in which it
shall have a twenty percent (20%) or more ownership or control or to third
parties as may be necessary or desirable for purposes of effecting a merger,
buyout, sale of assets, loan transaction, lease, joint bidding agreement,
farm-out, or joint venture. However, prior to either party’s release of the data
to any third party, written notice must be given to the other party hereto and
such third party must agree in writing to be bound by a confidentiality
agreement. In this event, a copy of the confidentiality agreement evidencing
such commitment shall be delivered to the party receiving the notice within
seven (7) days after receipt of such notice.

 

f)                                       In the event that this Lease is
terminated, expires, or is not renewed by AngloGold, AngloGold agrees that no
data pertaining to the Leased Lands will be divulged or made available to anyone
without the written permission of the TLO, which permission may be withheld at
the TLO’s discretion. Upon termination of the Lease, any data submitted or due
to the TLO pursuant to this Lease becomes the property of the TLO and may be
used at the TLO’s discretion.

 

g)                                      AngloGold acknowledges that the data to
be provided to the TLO is a special asset of the TLO. In the event that
AngloGold fails to deliver the data as required by this Lease or allows or
suffers any unauthorized disclosure of the data, such breach shall result in an
immediate breach of the Lease. The TLO may not have an adequate remedy at law
for such a breach and therefore, in addition to any other remedy at law or
equity that it may have, the TLO shall be entitled to injunctive relief to
enforce the provisions hereof.

 

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15.                               Transfer; Binding Effect.

 

a)                                     This provision applies to any transfer of
any interest under this Lease, except for transfers to AngloGold North America
Inc. or any of its affiliates, so long as the Corporate Guaranty in Attachment C
to this Lease remains in place, or another form of performance guaranty is
agreed to between the parties as a condition of assignment approval. For the
purposes of this provision, a “Transfer” includes, but is not limited to,
(1) assignment of any right under this Lease, (2) delegation of any duty owed by
AngloGold or any other party under this Lease, (3) substitution of a new party
as the Lessee, (4) sublease, (5) mortgage, (6) any change in interest as a
result of bankruptcy, or (7) if the Lessee is an entity such as a corporation,
partnership, or limited liability company rather than a natural person, any
change in the actual control of the entity through ownership or contractual
relationship, including, for example but not by way of limitation, the sale,
pledge or other disposition of a controlling interest in stock or partnership
units.

 

b)                                     AngloGold shall not voluntarily or by
operation of law Transfer or encumber all or any part of AngloGold’s interest in
this Lease except in strict compliance with this Paragraph 15. Any attempted
Transfer without such compliance shall be void, and shall constitute a breach of
this Lease.

 

c)                                      AngloGold may Transfer any interest in
or rights under this Lease, only upon the prior written approval of the TLO
which shall only be granted if the TLO determines within its sole discretion and
under applicable law that such Transfer is in the best interest of the Trust as
determined under a Trust Benefit analysis and that the proposed transferee is
qualified as determined under applicable regulations and as defined below.

 

d)                                     A Qualified Transferee is any person or
entity, including a corporate successor of AngloGold, whose net worth on the
date of assignment is equal to or greater than AngloGold’s net worth at the
commencement of this Lease or who can otherwise demonstrate to the TLO, in the
TLO’s exercise of prudent business judgment, that he or it is financially
capable of meeting AngloGold’s obligations under this Lease. Net worth shall
mean the amount by which the total of all assets of the person or entity exceeds
the total of all his or its liabilities as determined by an independent,
certified public accountant, in accordance with generally accepted accounting
principles.

 

e)                                      In order to effect a proposed Transfer
of interest, AngloGold shall submit a written request to the TLO at least 30
days in advance of the proposed Transfer date. This request shall include
appropriate documentation sufficient in detail to describe the proposed
Transfer, including disclosure of the full consideration to be received by
AngloGold from the proposed Transfer.

 

13

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f)                                       In the event that approval of a
Transfer is granted by the TLO, and unless otherwise agreed, AngloGold shall pay
either (a) a transfer fee equal to a percentage of the full consideration (if
the net present value can be determined) received by AngloGold from the
transferee, or (b) some other amount that the parties agree is appropriate, if
the net present value in (a) cannot be determined. The percentage amount in
(a) shall be the same as the royalty percentage agreed to in Paragraph 7(b).

 

g)                                      In the event of a Transfer that
substitutes a new lessee for the transferor AngloGold, unless otherwise provided
by the TLO in approving the Transfer, the transferor will have no continuing
liability to the TLO with respect to any obligation that is imposed by the Lease
after the effective date of the Transfer or that is based on an act or omission
of the new lessee occurring after the effective date of the Transfer. In the
case of any other Transfer, the transferor and the transferee will have joint
liability to the TLO for all obligations arising under or associated with the
Lease regardless of when they arise or the identity of the party whose conduct
gives rise to them.

 

h)                                     In connection with Transfers proposed to
be made to persons that the TLO must determine to be “qualified”, the transferor
shall reimburse the TLO for up to $5,000 in out-of-pocket costs incurred by the
TLO in making the required determination.

 

16.                               Voluntary Surrender.

 

AngloGold may at any time surrender all or part of the Leased Area by providing
to the TLO a recordable instrument effecting the same not less than ninety (90)
days prior to the end of the Lease Year; provided, however, that partial
surrender of any portion of the Leased Area may not unduly affect the
manageability of either the remaining Leased Area or the surrendered portion
(compared to the manageability of such portions on the Effective Date). Upon
receipt by the TLO of a recordable instrument effecting a surrender of all of
the Leased Area, or upon receipt and acceptance by the TLO of a recordable
instrument effecting a surrender of part of the Leased Area, all rights,
obligations, and liabilities of AngloGold under this Lease with respect to the
surrendered portion of the Leased Area shall cease except for rights,
obligations, and liabilities that accrued prior to such surrender and except as
provided by Paragraph 18 hereof.

 

17.                               Default and Termination.

 

a)                                     The failure of AngloGold to timely abide
by any provisions of this Lease or to timely perform any obligation under this
Lease shall constitute a default. If the TLO believes that a default has
occurred, it shall deliver written notice thereof to AngloGold. If AngloGold
thereafter fails to commence to cure the default within 30 days of notice, or
within 48 hours in the case of obligations which the TLO or an authorized
regulatory agency has declared to be of an emergency nature, or does not
continue to cure the default diligently and within a reasonable period of

 

14

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time, the TLO in its discretion may terminate this Lease or order suspension of
activities on the Leased Area until compliance is achieved and may take such
other actions as may be authorized by law, all by delivering written notice
thereof to AngloGold. Failure of the TLO to strictly enforce at any time any of
the provisions of this Lease shall not be construed to be a waiver or affect the
right of the TLO to thereafter strictly enforce such provisions.

 

b)                                     If AngloGold in good faith disputes
(i) that a default has occurred, (ii) that a default is not being cured
diligently or is continuing, or (iii) that a particular action taken by the TLO
in response to an alleged default is authorized by this Lease or by law,
AngloGold shall deliver a written notice to that effect (setting forth the
evidence and arguments of law upon which AngloGold bases its position) within 20
days after AngloGold’s receipt of written notice of the same from the TLO. The
delivery of any such notice by AngloGold shall constitute a request for
reconsideration by the TLO of the particular decision, determination, or action
of the TLO. The TLO shall have 20 days following receipt of any such notice from
AngloGold in which to reconsider its prior decision, determination, or action.
If the TLO grants reconsideration within said 20-day period, it shall issue such
orders regarding the submission of additional evidence and argument as appear
necessary and thereafter shall proceed to reconsider the matter. If the TLO
denies reconsideration of its prior decision, determination, or action within
said 20-day period, such denial shall constitute the final agency action of the
TLO as contemplated by 11 AAC 99.060(a). If the TLO fails to grant
reconsideration of its prior decision, determination, or action within said
20-day period, such failure shall constitute a denial of such request for
reconsideration, which denial shall constitute the final agency action of the
TLO as contemplated by 11 AAC 99.060(a). Following any such actual or deemed
denial of any request for reconsideration, AngloGold may appeal the matter to
the Superior Court for the State of Alaska.

 

c)                                      Upon effective termination of this Lease
for any reason, all rights, obligations, and liabilities of AngloGold under this
Lease shall cease except for rights, obligations, and liabilities that accrued
prior to such termination and except as provided by Paragraph 18 hereof, and the
TLO may (notwithstanding any bond issued pursuant to Paragraph 21 hereof) take
possession of the Leased Area subject, however, to the provisions of Paragraph
18 hereof.

 

18.                               Rights and Obligations Upon Termination.

 

Within one year after either the partial or complete surrender or termination of
this Lease or the completion of all required reclamation activities on the
surrendered or terminated portion of the Leased Area (whichever is later),
AngloGold shall remove to the extent ordered by the TLO, and otherwise may
remove, from the surrendered or terminated portion of the Leased Area all
equipment, improvements, and fixtures owned, placed, or suffered to be placed
on, in, or under said surrendered or terminated portion of the Leased Area by
AngloGold. Unless

 

15

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otherwise provided by the TLO, the provisions of this Lease relating to the
conduct of operations, Plans of Operations, Reclamation, indemnification,
bonding, insurance, and guaranty shall continue in effect during such removal
period. Upon the expiration of such removal period, at the option of the TLO,
any equipment, improvements, and fixtures which AngloGold has not removed from
the surrendered or terminated portion of the Leased Area shall either be removed
by the TLO at AngloGold’s expense within one year or shall become the property
of the TLO.

 

19.                               Reclamation.

 

AngloGold shall timely perform all required reclamation and deliver up the
Leased Area or surrendered portion thereof in good condition with all required
reclamation timely performed in accordance with the Plan of Operations, any
approved Reclamation Plan, and any other regulatory requirements.

 

20.                               Indemnification.

 

AngloGold shall indemnify, defend, and hold harmless the State of Alaska, the
Trust Authority, and the TLO from and against any and all damages, losses,
claims, demands, or liabilities arising out of or resulting in any way from the
operations of AngloGold under this Lease, except to the extent that any such
damage, loss, claim, demand, or liability is a result of the sole negligence or
willful misconduct of the State of Alaska, the Trust Authority, or the TLO.
Without limiting the survival of any other promises made in this Lease, the
parties hereby agree that the promise contained in this Paragraph 20 shall
survive the expiration or termination of this Lease.

 

21.                               Bonds.

 

In order to secure return of the Leased Area in good condition, AngloGold shall
furnish a bond or evidence of an existing bond in an amount determined as set
forth in Schedule 2 attached hereto and shall maintain such bond in effect at
all times during the term of this Lease and for such time thereafter as the TLO
may require pursuant to Paragraph 18 hereof. In lieu of the bond required under
the preceding sentence AngloGold may, with the TLO’s written approval, furnish
and maintain a statewide bond, in accordance with any applicable regulations.

 

22.                               Insurance.

 

Without limiting AngloGold’s indemnification, AngloGold shall purchase, at its
own expense, and maintain in force at all times during the term of this Lease
and for such time thereafter as the TLO may require pursuant to Paragraph 18
hereof, the policies of insurance specified in Schedule 3 attached hereto. Where
specific limits are shown, it is understood that they shall be the minimum
acceptable limits. If AngloGold’s policy contains higher limits, the TLO shall
be entitled to coverage to the extent of such higher limits. Certificates of
insurance evidencing the foregoing coverages must be furnished to the TLO upon
execution of this Lease. Each policy of insurance maintained pursuant to this
Paragraph 22 shall include, by endorsement, the following cancellation or change
clause:

 

16

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This insurance will not be cancelled, non-renewed, or mutually altered, nor
shall any change be made in the policy which changes, restricts, or reduces the
insurance provided or changes the name of any “Insured” or any “Additional
Insured” without first giving 30 days’ written notice to [the TLO].

 

The TLO shall be listed as an “Additional Insured” on all policies of insurance
maintained pursuant to this Paragraph 22. Each policy of insurance maintained
pursuant to this Paragraph 22 also shall include, by endorsement, a waiver of
subrogation in favor of the TLO and the following cross liability clause or
another cross liability or severability of intent clause acceptable to the TLO:

 

In the event of bodily injury or damage to property belonging to any one or more
Insured or Additional Insured parties for which another Insured or Additional
Insured is or may be liable, then this policy shall cover such Insured or
Additional Insured against whom the claim is made or may be made in the same
manner as if separate policies had been issued to each Insured and Additional
Insured.

 

The obligations to maintain in effect during the term of this Lease the policies
of insurance required to be maintained pursuant to this Paragraph 22 and to
furnish satisfactory certificates of insurance therefor are material obligations
of this Lease.

 

23.                               Guaranty

 

In order for this Lease to become effective, AngloGold shall procure the
execution and delivery to the TLO of a guaranty in the form attached hereto as
Attachment C.

 

24.                               Force Majeure

 

If AngloGold is prevented by an event of Force Majeure from the exercise of any
of its rights hereunder or from the timely performance of any of its obligations
hereunder, the time for the exercise of such rights or for the performance of
such obligations, together with the term of this Lease, shall be extended for a
period equal to the duration of the event of Force Majeure. AngloGold shall
promptly notify the TLO of the existence or occurrence of any event of Force
Majeure, shall use reasonable diligence under the circumstances to alleviate,
overcome, or bring about the cessation of an event of Force Majeure, and shall
promptly notify the TLO when such event of Force Majeure has ended.
Notwithstanding the foregoing, (a) AngloGold shall not be required to challenge
(by protest, petition, appeal, or any other means) or to consent to any actions
or inactions of any federal, state, or local governmental authority or court, or
of any officer or official acting under color of governmental authority, or to
settle any strikes, lockouts, and other labor disputes (actions with respect to
all of which shall be within AngloGold’s sole discretion), and (b) nothing
herein shall excuse any failure by AngloGold or extend the time for performance
by AngloGold to make timely advance royalty payments and production royalty
payments under Paragraph 7 hereof, or AngloGold’s obligations to make timely
payments of taxes or insurance premiums.

 

17

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25.                               General.

 

a)                                     Notice

 

i)                                         Authorized Representatives. The
Executive Director of the Mental Health Trust Land Office, Department of Natural
Resources, State of Alaska, or such other person as the Executive Director may
designate in a written notice to the TLO, and the individual executing this
Lease on behalf of AngloGold, or such other person as AngloGold may designate in
a written notice to the TLO, shall be the authorized representatives of their
respective principals for the purposes of administering this Lease. In addition,
if AngloGold’s authorized representative is not resident in Alaska when
activities are being conducted on the Leased Area under a Plan of Operations or
Reclamation Plan, AngloGold shall designate by name, job title, address, and
telephone, an authorized representative who will be present in Alaska during the
conduct of such activities. Either party may from time to time change the
authorized representative or the address to which notices to that representative
are to be sent by delivering a written notice to that effect to the other party.

 

ii)                                      Delivery of Notices. Any notice
required or permitted under this Lease must be in writing and must be given
personally or by registered or certified mail, return receipt requested, or by
facsimile transmission producing a permanent record addressed as follows:

 

To the TLO:

 

Alaska Department of Natural Resources

Mental Health Trust Land Office

Attention: Executive Director

718 L Street, Suite 202

Anchorage, Alaska 99501

Facsimile: 907-269-8905

 

To AngloGold:

 

AngloGold (U.S.A.) Exploration Inc.

Attn: Jerry Bateman

7400 Orchard Road, Suite 350

Greenwood Village, Colorado 80111

Facsimile: 303-889-0707

 

iii)                                   Any notice given in an authorized manner
described above shall be effective when received by the authorized
representative.

 

18

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b)                                     Entire Agreement. This Lease embodies the
entire agreement and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter hereof.

 

c)                                      Modification of Agreement. This Lease
may be modified or amended only by a document in writing executed by all the
parties hereto.

 

d)                                     Waiver. The failure of any party to this
Lease to insist upon the strict performance of any provision of this Lease or to
exercise any right, power, or remedy consequent upon a breach thereof or failure
thereunder shall not constitute a waiver by said party of any such provision,
right, power, remedy, breach, or failure unless the same is given in writing and
expressly waives such provision, right, power, remedy, breach, or failure. Any
such waiver extends only to the particular provision, right, power, remedy,
breach, or failure expressly waived and does not limit the rights, powers, or
remedies of the waiving party with respect to any future breach of or failure
under the same or any different provision.

 

e)                                      Remedies. Except as otherwise provided
in this Lease, the parties hereto shall be entitled to any and all remedies
provided by law.

 

f)                                       Severability. If any provision of this
Lease or any application thereof shall be invalid or unenforceable, the
remainder of this Lease and any other application of such provision shall not be
affected thereby.

 

g)                                      No Discrimination. In exercising any
rights hereunder neither AngloGold nor any of its contractors or subcontractors
shall discriminate against any employee or applicant because of race, religion,
marital status, change in marital status, pregnancy, parenthood, physical
handicap, color, sex, age, or national origin as set out in AS 18.80.220.

 

h)                                     Interest in Real Property. It is the
intention of the parties that the rights granted to AngloGold by this Lease
constitute an interest in real property in the Leased Area.

 

i)                                         Recording of Short Form. Upon the
execution of this Lease, the TLO and AngloGold shall execute and acknowledge a
memorandum of lease in the form of Attachment B hereto. AngloGold shall cause
said memorandum of lease to be recorded in the Fairbanks Recording District,
State of Alaska, and AngloGold shall pay any and all required recording fees
relating thereto. This Lease shall not be recorded.

 

j)                                        Governing Law. This Lease shall be
interpreted, construed, and enforced in accordance with, and otherwise governed
in all respects by, the laws of the State of Alaska. This Lease is subject to
all applicable federal, state, and local statutes, rules, and ordinances in
effect on the Effective Date of this Lease and, to the

 

19

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extent constitutionally permissible and otherwise consistent with AS 38.05.801
and 11 AAC 99, to all such statutes, rules, and ordinances enacted or
promulgated after the Effective Date of this Lease. This Lease shall be
interpreted and construed in a manner which furthers the purposes of the Alaska
Mental Health Trust as defined in 11 AAC 99.990(1). All words and phrases used
in this lease are to be interpreted in conformance with AS 01.10.040.

 

k)                                     Counterparts. Multiple originals of this
Lease may be executed, each of which shall be deemed an original and all of
which, taken together, shall constitute a single agreement.

 

l)                                         Further Actions. The parties hereby
agree to take any and all actions and to execute, acknowledge, and deliver any
and all documents reasonably necessary to effect the purposes of this Lease.

 

m)                                 Paragraph Headings. The descriptive paragraph
headings throughout this Lease are for convenience and reference only, and the
words contained therein shall not be used to expand, modify, or amplify the
meaning of this Lease or to aid in the interpretation or construction of this
Lease.

 

n)                                     Venue. Venue for any appeal from an
administrative decision of the TLO relating to this Lease shall be in the
Superior Court for the State of Alaska in Anchorage, Alaska. Venue for any other
legal action arising under or relating to this Lease shall be in the Superior
Court for the State of Alaska in either Fairbanks or Anchorage, Alaska.

 

************************************

 

20

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IN WITNESS WHEREOF, the parties hereto have executed, delivered, and accepted
this Lease effective as of the Effective Date.

 

ALASKA MENTAL HEALTH TRUST AUTHORITY

 

ANGLOGOLD (U.S.A.)

 

 

EXPLORATION INC.

By: State of Alaska

 

 

Department of Natural Resources

 

 

Mental Health Trust Land Office

 

 

 

 

 

By:

 

/s/ [Illegible]

 

By:

 

/s/ Jeffrey Pontius

Executive Director

 

Its: Exploration Manager N.A.

Mental Health Trust Land Office

 

 

 

 

 

 

 

 

STATE OF ALASKA

 

)

 

 

 

 

) ss.

 

 

THIRD JUDICIAL DISTRICT

 

)

 

 

 

This certifies that on the 25th day of June, 2004, the foregoing instrument was
acknowledged before me by [illegible], Executive Director of the MENTAL HEALTH
TRUST LAND OFFICE within the State of Alaska Department of Natural Resources, on
behalf of said officer acting pursuant to AS 37.14.009(a)(2) and AS 38.05.801 on
its own behalf and for the ALASKA MENTAL HEALTH TRUST AUTHORTY.

 

 

 

/s/ [Illegible]

 

Notary Public for the State of Alaska

 

My commission expires 11-15-07

 

 

 

 

 

 

STATE OF COLORADO

 

)

 

 

 

) ss.

 

 

 

)

 

 

 

 

 

 

This certifies that on the 4th day of June, 2004, the foregoing instrument was
acknowledged before me by Jeffrey Pontius of AngloGold (U.S.A.) Exploration
Inc., a Delaware corporation, on behalf of said corporation.

 

 

 

/s/ Rosemarie G. Patterson

 

Notary Public for the State of Colorado

 

My commission expires 3/14/08

 

21

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List of Attachments and Schedules

 

Attachment A: Description of Leased Area

Attachment B: Memorandum of Lease

Attachment C: Guaranty

Attachment D: Description of Federal claims leased by AngloGold and subject to
royalty interest granted to the TLO

 

Schedule 1:                       Site-Specific Operating Stipulations

Schedule 2:                       Bond Requirements

Schedule 3:                       Insurance Requirements

 

22

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ATTACHMENT A

 

Description of Leased Area

 

T. 008 N., R. 004 W., FAIRBANKS MERIDIAN, ALASKA

 

SECTION 5: LOTS 1 THROUGH 7, INCLUSIVE, NE1/4NE1/4, S1/2NE1/4, N1/2SW1/4, SE 1/4

SECTION 6: LOTS 1 THROUGH 12, INCLUSIVE, NE1/4SE1/4

SECTION 7: LOTS 1 THROUGH 9, INCLUSIVE, SW1/4NE1/4, E1/2NW1/4, E1/2SW1/4,
W1/2SE1/4, SE1/4SE1/4

SECTION 8: LOTS 1 THROUGH 7, INCLUSIVE, NE1/4, E1/2SE1/4

SECTION 17: LOTS 1 THROUGH 4, INCLUSIVE, NE1/4, S1/2

SECTION 18: LOTS 1 THROUGH 4, INCLUSIVE, E1/2, E1/2W1/2

SECTION 19: LOTS 1 THROUGH 4, INCLUSIVE, E1/2, EI/2W1/2

SECTION 20: ALL

SECTION 27: ALL

SECTION 28: ALL

SECTION 29: ALL

SECTION 30: LOTS 1 THROUGH 4, INCLUSIVE, E1/2, E1/2W1/2

SECTION 33: ALL

SECTION 34: ALL

EXCLUDING MINING CLAIMS RECORDED UNDER F-37586 THROUGH F-37596, F-43162,
F-43163, F-43706, F-45706 THROUGH F-45708, F-57086, F¬60588 THROUGH F-60606,
F-61269 THROUGH F-61272, F-61316 THROUGH F-61318, F-61380 THROUGH F-61390,
F-61392, F-61499 THROUGH F-61501, F-62089, F-62090, F-63464, F-63465, F-64359
AND F-64360, WHICH APPEAR TO FALL WITHIN SECTIONS 4 THROUGH 9, 17, 19, 28, AND
30 THROUGH 33;

 

T. 008 N., R. 005 W., FAIRBANKS MERIDIAN, ALASKA

 

SECTION 1: LOTS 1 THROUGH 5, INCLUSIVE, N1/2, N1/2SW1/4

SECTION 2: LOT 1, N1/2, SW1/4, N1/2SE1/4, SW1/4SE1/4

SECTION 3: ALL

SECTION 10: LOTS 1 THROUGH 4, INCLUSIVE, N1/2, WI/2SW1/4

 

23

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SECTION 11: LOTS 1 THROUGH 10, INCLUSIVE, NE1/4SE1/4, S1/2SE1/4

SECTION 12: LOTS 1 THROUGH 8, INCLUSIVE, NE1/4, E1/2SE1/4

SECTION 13: ALL

SECTION 14: LOT 1, NE1/4, E1/2NW1/4, SW1/4NW1/4, S1/2

SECTION 15: LOTS 1 THROUGH 8, INCLUSIVE, NW1/4NW1/4, SE1/4SW1/4, SE1/4

SECTION 16: LOTS 1 AND 2, N1/2, SW1/4, W1/2SE1/4

SECTION 21: ALL

SECTION 22: LOTS I THROUGH 4, INCLUSIVE, N1/2NE1/4, E1/2NW1/4, SW1/4NW1/4,
SW1/4, W1/2SE1/4, SE1/4SE1/4

SECTION 23: LOTS 1 AND 2, E1/2, E1/2NW1/4, SW1/4

SECTION 24: ALL

SECTION 25: LOTS 1 THROUGH 9, INCLUSIVE, N1/2NE1/4, E1/2NW1/4, NE1/4SW1/4,
S1/2SW1/4

SECTION 26: LOTS 1 THROUGH 5, INCLUSIVE, W1/2E1/2, W1/2

SECTION 27: ALL

SECTION 28: ALL

SECTION 33: ALL

SECTION 34: ALL

EXCLUDING MINING CLAIM RECORDATIONS F-37580 THROUGH F-37585, F-52058, F-52059,
F-55452 THROUGH F-55471, F-61249, F-61250, F-61256 THROUGH F-61270, F-61273
THROUGH F-61278, F-61319 THROUGH F-61379, F-61381, F-61382, F-61477, F-61495,
F-61498, F-61677 TROUGH F-61708, F-61709 THROUGH F-61714, F-62097, F-62098,
F-63466, AND F-63707, WHICH APPEAR TO FALL WITHIN SECTIONS THROUGH 16, 21
THROUGH 26, 28, 29, 35, AND 36; T. 009 N., R. 004 W., FAIRBANKS MERIDIAN, ALASKA

 

T. 009 N., R. 004 W., FAIRBANKS MERIDIAN, ALASKA

 

SECTION 31, 32, AND 33: ALL;

EXCLUDING U.S. MINERAL SURVEY NOS. 1609 AND 1641, EXCLUDING MINING CLAIM
RECORDATIONS F-61279 THROUGH F-61315, F-61389 THROUGH F-61396, F-61399, F-61400,
F-61402 THROUGH F-61420, F-61478 THROUGH F-61494, F-61502 THROUGH F-61508,
F-63461, F-63462, F-74190, AND F-74191, WHICH APPEAR TO FALL WITHIN SECTIONS 14,
16, 20, 21, 27 THROUGH 29, AND 31 THROUGH 33;

 

ALSO EXCLUDING FROM ALL OF THE ABOVE, THE FOLLOWING MINING CLAIMS:

 

24

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ADL 330941, ADL 330942, ADL 330943, ADL 330946, ADL 330947, ADL 330948, ADL
330951, ADL 330952, ADL 330953, ADL 330954, ADL 330957, ADL 330958, ADL 330959,
ADL 330960, ADL 330963, ADL 330964, ADL 330965, ADL 330970, ADL 330971, ADL
330972, ADL 330977, ADL 338477, ADL 338478, ADL 338481, ADL 338482, ADL 338483,
ADL 338487, ADL 338488, ADL 338489, ADL 338490, ADL 338497, ADL 338498, ADL
338499, ADL 338500, ADL 338501, ADL 338511, ADL 338512, ADL 338513, ADL 338520,
ADL 338521, ADL 338522, ADL 347945, ADL 347946, ADL 347949, ADL 347950, ADL
347951, ADL 347952, ADL 347953, ADL 347957, ADL 347958, ADL 347959, ADL 347960,
ADL 347961, ADL 347969, ADL 347970, ADL 347971, ADL 347972, ADL 347973, ADL
347974, ADL 347975, ADL 353555, ADL 353556, ADL 353557, ADL 353558, ADL 353559,
ADL 353560, ADL 353561, ADL 353562, ADL 353563, ADL 353564, ADL 353565, ADL
355559, ADL 361326, ADL 361327, ADL 361328, ADL 361330, ADL 361332, ADL 361333,
ADL 361334, ADL 361335, ADL 361366, ADL 558105, ADL 558106, ADL 558814, ADL
559056, ADL 559057, ADL 559058, ADL 559059, ADL 559060, ADL 338479, ADL 338480,
ADL 338484, ADL 338485, ADL 338486, ADL 338491, ADL 338492, ADL 338493, ADL
338494, ADL 338495, ADL 338496, ADL 338503, ADL 338504, ADL 338505, ADL 338506,
ADL 338507, ADL 338508, ADL 338509, ADL 338510, ADL 338514, ADL 338515, ADL
338516, ADL 338517, ADL 338518, ADL 338519, ADL 347955, ADL 347956, ADL 347962,
ADL 347963, ADL 347964, ADL 347965, ADL 347966, ADL 347967, ADL 347968, ADL
347976, ADL 347977, ADL 347978, ADL 347979, ADL 347980, ADL 348802, ADL 348803,
ADL 348804, ADL 348805, ADL 348806, ADL 348807, ADL 348808, ADL 348809, ADL
348810, ADL 348811, ADL 348812, ADL 348813, ADL 348814, ADL 348815, ADL 348816,
ADL 348817, ADL 348818, ADL 348819, ADL 348820, ADL 348821, ADL 348822, ADL
348823, ADL 348824, ADL 348825, ADL 348826, ADL 348827, ADL 348828, ADL 348829,
ADL 348830, ADL 348831, ADL 348832, ADL 361329, ADL 361331, ADL 361349, ADL
361350, ADL 361351, ADL 361352, ADL 361353, ADL 361354, ADL 361355, ADL 361356,
ADL 361357, ADL 361358, ADL 361359, ADL 361360, ADL 361361, ADL 361362, ADL
361363, ADL 361364, ADL 361365, ADL 505036, ADL 506391, ADL 506392, ADL 532022,
ADL 532026, ADL 535710, ADL 535711, ADL 535712, ADL 535713, ADL 535714, ADL
535715, ADL 535716, ADL 538220, ADL 538221, ADL 538222, ADL 538223, ADL 538224,
ADL 538225, ADL 538226, ADL 538227, ADL 538230, ADL 538231, ADL 538232, ADL
538233, ADL 538234, ADL 538235, ADL 539877, ADL 539878, ADL 539879, ADL 555900,
ADL 556252, ADL 558604, ADL 558605, ADL 558606, ADL 558607, ADL 559157, ADL
570259, ADL 570260, ADL 570261, ADL 570262, ADL 570263, ADL 570264, ADL 570265,
ADL 570266, ADL 570267, ADL 570268, ADL 570269, ADL 570270, ADL 570271, ADL
570272, ADL 570273, ADL 570274, ADL 570275, ADL 570276, ADL 570277, ADL 570278,
ADL 570279, ADL 570280, ADL 570281, ADL 570282, ADL 570283, ADL 570284, ADL
570285, ADL 361365, ADL 361366, ADL 361367, ADL 361368, ADL 330936, ADL 330937,
ADL 330938, ADL 330939, AND ADL 330940;

 

25

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CONTAINING 8,600.00 ACRES, MORE OR LESS.

 

ACCORDING TO THE SURVEY PLATS ACCEPTED BY THE UNITED STATES DEPARTMENT OF THE
INTERIOR, BUREAU OF LAND MANAGEMENT IN ANCHORAGE, ALASKA ON NOVEMBER 5, 1987 AND
JANUARY 7, 1991

 

26

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ATTACHMENT B

 

Memorandum of Lease

 

[to be drafted after Lease is finalized] [will incorporate Lease; will recite
all relevant grants, reservations, and term; will NOT recite financial terms]

 

27

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ATTACHMENT C

 

Guaranty of AngloGold North America Inc.

 

GUARANTY OF ANGLOGOLD NORTH AMERICA INC.

 

AngloGold North America Inc. (“Guarantor”), a Colorado corporation, the address
of which is 7400 Orchard Road, Suite 350, Greenwood Village, Colorado
80111-2799, at the request of its affiliate, AngloGold (U.S.A.) Exploration
Inc., a Delaware corporation registered to do business in Alaska under the name
AngloGold (U.S.A.) Exploration Inc., the address of which is 7400 Orchard Road,
Suite 350, Greenwood Village, Colorado 80111, and in accordance with that
certain Upland Mining Lease (“Lease”) by and between: (1) the Alaska Mental
Health Trust Authority (“Trust Authority”), a public corporation within the
Alaska Department of Revenue (AS 47.30.011 et seq.), acting by and through the
State of Alaska, Department of Natural Resources, Mental Health Trust Land
Office (“TLO”), pursuant to AS 37.14.009(a)(2) and AS 38.05.801 (the Trust
Authority and the TLO are collectively the Lessor and are referred to herein as
“the TLO”), and (2) AngloGold (U.S.A.) Exploration Inc. (the Lessee referred to
herein as “AngloGold”), to which a form of this Guaranty is attached as
Attachment C, hereby irrevocably and unconditionally guarantees to the TLO the
full performance, fulfillment, and satisfaction of all of the duties,
obligations, and liabilities of AngloGold arising under or pursuant to the
Lease.

 

If for any reason any such duty, obligation, or liability of AngloGold is not
performed, fulfilled, or satisfied by AngloGold or a successor or transferee
thereof within the time or in the manner required under the Lease, Guarantor
shall perform, fulfill, or satisfy (or cause to be performed, fulfilled, or
satisfied) each of such duties, obligations, and liabilities; provided, however,
that (1) the TLO must first make demand upon AngloGold or said successor or
transferee before making demand upon Guarantor, (2) if AngloGold or said
successor or transferee in good faith denies that any such duty, obligation, or
liability exists or has not been performed, fulfilled, or satisfied by AngloGold
or said successor or transferee within the time or in the manner required under
the Lease, the TLO must establish its rights as against AngloGold or said
successor or transferee before demanding performance, fulfillment, or
satisfaction from Guarantor, and (3) Guarantor shall be entitled to any and all
benefits arising by virtue of any defense, set-off, counterclaim, or cross-claim
available to AngloGold or said successor or transferee.

 

Guarantor agrees that this Guaranty shall not be discharged, limited, or reduced
except by complete performance of the duties, obligations, and liabilities of
AngloGold (including successors or transferees thereof) guaranteed hereby or
upon the approval by the TLO, in connection with a transfer made pursuant to
Paragraph 15 of the Lease, of the assumption of the duties, obligations, and
liabilities of AngloGold (including successors or transferees thereof)
guaranteed hereby by a person which the TLO determines to be capable of
satisfying in a responsible manner all such duties, obligations, and
liabilities.

 

28

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This Guaranty shall be in addition to and without prejudice to any other
security given by anyone (including but not limited to AngloGold) to the TLO and
held at any time by the TLO in connection with any such duty, obligation, or
liability.

 

This Guaranty shall be interpreted, construed, and enforced in accordance with
the laws of the State of Alaska.

 

Venue for any appeal from an administrative decision of the TLO relating to this
Guaranty shall be in the Superior Court for the State of Alaska in Anchorage,
Alaska. Venue for any other legal action arising under or relating to this
Guaranty shall be in the Superior Court for the State of Alaska in either
Fairbanks, or Anchorage, Alaska.

 

This Guaranty shall be binding upon the Guarantor and the successors and assigns
of the Guarantor and shall inure to the benefit of the TLO and its successors
and assigns.

 

All notices required or permitted to be given pursuant to this Guaranty shall be
in writing and shall be addressed respectively as follows:

 

Guarantor:

AngloGold North America Inc.

 

7400 Orchard Road, Suite 350

 

Greenwood Village, Colorado 80111-2799

 

Facsimile: 303-889-0792

 

Telephone: 303-889-0700

 

 

The TLO:

Alaska Department of Natural Resources

 

Mental Health Trust Land Office

 

Attention: Executive Director

 

718 L Street, Suite 202

 

Anchorage, Alaska 99501

 

Facsimile: 907-269-8905

 

Telephone: 907-269-8658

 

All notices shall be given (a) by personal delivery to the addressee, (b) by
electronic communication, with a confirmation sent by registered or certified
mail return receipt requested, or (c) by registered or certified mail return
receipt requested. All notices shall be effective and shall be deemed delivered
(a) if by personal delivery, on the date of delivery if delivered during normal
business hours or on the next business day following delivery if not delivered
during normal business hours, (b) if by electronic communication, on the next
business day following the day of receipt (said day of receipt being the day of
receipt at the office of the recipient) of the electronic communication, and
(c) if solely by mail, on the next business day after actual receipt.

 

29

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EXECUTED this 4th day of June, 2004, but effective for all purposes as of the
Effective Date (as defined in the Lease) of the Lease.

 

 

 

 

ANGLOGOLD NORTH AMERICA INC,

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Donald C. Ewigleben

 

 

 

Its:

 

President

 

 

 

 

STATE OF COLORADO

 

)

 

 

 

) ss.

 

 

 

)

 

 

This certifies that on the 4th day of June, 2004, the foregoing instrument was
acknowledged before me by Donald C. Ewigleben of AngloGold (U.S.A.) Exploration
Inc., a Delaware corporation, on behalf of said corporation.

 

 

 

/s/ Rosmarie Patterson

 

Notary Public for the State of Colorado

My commission expires 3/14/08

 

 

30

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Attachment D

 

Claim Name

 

Federal Serial Number

 

 

 

Sharon

 

FF055452

Dorothea

 

FF055453

Lenora

 

FF055454

Foster

 

FF055455

Vance

 

FF055456

Twerpit

 

FF055457

Saunders

 

FF055458

Nickie

 

FF055459

Patrick

 

FF055460

White Rock

 

FF055461

Sunshine #1

 

FF055462

Sunshine #2

 

FF055463

Old Smoky

 

FF055464

Wittrock

 

FF055465

Black Rock

 

FF055466

Trapline

 

FF055467

Patricia

 

FF055468

Anne

 

FF055469

Eileen

 

FF055470

Bridget

 

FF055471

 

31

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SCHEDULE 1

 

Site-Specific Operating Stipulations

 

NONE

 

32

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SCHEDULE 2

 

Bond Requirements

 

AngloGold shall have in place at all times during the term of this Lease a bond
that (1) meets the requirements of AS 27.19.010-27.19.100, 11 AAC 97, and the
Reclamation Plan, (2) is for an amount, as determined and adjusted from time to
time under the Reclamation Plan, equal to the estimated cost of performing all
accrued but not yet satisfied obligations under the Reclamation Plan, and
(3) secures AngloGold’s performance of such accrued but not yet satisfied
obligations under the Reclamation Plan.

 

33

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SCHEDULE 3

 

Minimum Insurance Requirements

 

Coverage

 

Limits

 

 

 

Workers’ Compensation (“WC”) and

 

WC:

Statutory Limits

 

 

 

 

Employers’ Liability (“EL”) Insurance, with broad form “all states” endorsement:

 

EL:

$2,000,000 per occurrence

 

 

 

Business Automobile Liability Insurance, including all owned, non-owned, and
hired vehicles utilized in connection with this Agreement:

 

$2,000,000 combined single limit per occurrence for bodily injury, death, and
property damage

 

 

 

Commercial General Liability Insurance on an occurrence form, including blanket
contractual and owner’s and contractor’s liability:

 

$2,000,000 for injury or death of any one person in any one accident or
occurrence or property damage, including fire damage, with an aggregate coverage
of $4,000,000

 

 

 

Excess Liability (covering matters covered by Employers’ Liability Insurance,
Business Automobile Liability Insurance, and Commercial General Liability
Insurance):

 

$5,000,000

 

34

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