Exhibit 10.13

 

 

 

AGREEMENT

 

Between

 

Thompson Creek Metals Company

 

And

 

Sojitz Corporation

 

Executed

 

September 28, 2005

 

 

 

 

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TABLE OF CONTENTS

 

 

Page

ARTICLE I DEFINITIONS; INTERPRETATION

1

1.1                       Definitions

l

ARTICLE II TERM

4

2.1                       Term

4

ARTICLE III PURCHASE AND SALE OF PRODUCT

4

3.1                       Purchase and Sale

4

ARTICLE IV PRICE AND PAYMENT

4

4.1                       Price

4

4.2                       Invoices

5

4.3                       Payment

5

4.4                       Taxes

5

4.5                       Records; Audit

6

ARTICLE V DELIVERY

6

5.1                       Shipping Terms

6

5.2                       Title and Risk of Loss

6

5.3                       Warehousing Fees

6

5.4                       Deliveries

7

5.5                       Freight and Insurance

7

ARTICLE VI WEIGHTS AND ASSAYS; NON-CONFORMING SOJITZ PRODUCT

7

6.1                       Weights and Assays

7

6.2                       Non-Conforming Sojitz Product

7

6.3                       Claims

7

ARTICLE VII WARRANTIES

8

7.1                       Representations and Warranties of TCMC

8

7.2                       Representations, Warranties and Covenants of Sojitz

9

ARTICLE VIII MINE PLANS; BUDGETS; CONDUCT OF PHASE 6 OPERATIONS

10

8.1                       Mine Plans and Budgets

10

8.2                       Reports

10

8.3                       Conduct of Phase 6 Operations

10

 

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Page

ARTICLE IX FORCE MAJEURE

10

9.1                       Force Majeure

10

ARTICLE X OTHER COVENANTS OF THE PARTIES

11

10.1                Default

11

10.2                No Partnership

11

10.3                Tax Matters

11

10.4                Dispute Resolution

11

10.5                Confidentiality

12

10.6                Sojitz’ Right to Inspect Property

12

10.7                Trademarks and Intellectual Property

13

10.8                No Implied Covenants

13

10.9                No Third Party Beneficiaries

13

10.10         Parties in Interest

13

10.11         Assignment

13

10.12         Survival

14

10.13         Notices

14

10.14         Governing Law; Venue; Waiver of Trial by Jury

14

10.15         Entire Agreement

15

10.16         Modification; Waiver

15

10.17         Mutual Agreement

15

10.18         Severability

15

10.19         Headings

15

10.20         Counterparts

15

 

EXHIBIT A — Budget

 

EXHIBIT B — Mine Plan

 

 

ii

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AGREEMENT

 

THIS AGREEMENT (the “Agreement”) is made and entered into this 28th day of
September, 2005 (the “Execution Date”), by and between THOMPSON CREEK METALS
COMPANY, a Colorado corporation having its principal office and place of
business at 945 West Kenyon Avenue, Unit B, Englewood, Colorado 80110-8135
(“TCMC”), and SOJITZ CORPORATION, a Japanese corporation having its principal
office and place of business at 1-20, Akasaka 6-chome, Minato-ku, Tokyo
107-8655, Japan (“Sojitz”).

 

RECITALS

 

A.                      TCMC, through its indirect, wholly-owned subsidiary,
owns certain fee lands, patented and unpatented mining claims, and other real
property interests located near Challis, in Custer County, Idaho (the
“Property”). TCMC conducts molybdenum mining and beneficiation operations at its
Thompson Creek Mine on the Property (the “Mine”).

 

B.                        TCMC has identified additional reserves of molybdenum
ore within and below existing mining operations at the Mine. Development and
production of these reserves will require extensive stripping operations to
remove the overburden and waste rock over the course of approximately two years,
followed by approximately five years of production and beneficiation of
molybdenum ore from these reserves. The development and production of these
additional reserves is referred to in this Agreement as “Phase 6.”

 

C.                        Sojitz and TCMC desire to enter into this Agreement
setting forth the terms and conditions pursuant to which TCMC shall sell and
deliver to Sojitz, and Sojitz shall purchase and receive from TCMC, a portion of
the technical grade molybdic oxide produced from the Thompson Creek Mine during
Phase 6.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants,
conditions and obligations set forth herein, and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
TCMC and Sojitz hereby agree as follows:

 

Article I
DEFINITIONS; INTERPRETATION

 

1.1.                 Definitions. For purposes of this Agreement, the following
terms shall have the meaning given to them in this Section 1.1.

 

1.1.1.                        Actual Cost of Production shall mean TCMC’s actual
full cost to produce Product, as reflected by TCMC’s accounting books and
records for the period under consideration, expressed in cost per pound of
molybdenum contained in Product. For the avoidance of doubt, “Actual Cost of
Production” shall: (i) include (A) an allocation of the costs of the Stripping
Program in accordance with the Budget, together with all costs to mine and
beneficiate the Reserves, transport molybdenum disulfide concentrates produced
at the Mine from the Reserves to Langeloth, and convert such molybdenum
disulfide into Product at

 

 

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Langeloth; and (B) actual reclamation costs to the extent such costs are
attributable solely to Phase 6; but (ii) shall exclude beneficiation costs
directly attributable to the lubricant grade molybdenum disulfide products
produced by TCMC known as “HPM,” “Grade A,” and “Grade B.” Furthermore, to the
extent that capital expenditures or investments in the Property and/or the Mine
are required, only those portions of such capital expenditures or investments
that are actually allocable to Phase 6 (in whole or in part) shall be allocated
to the Actual Cost of Production (in whole or in part); and any other portions
more properly allocable to other operations or activities on the Property and/or
at the Mine shall not be allocated to Actual Cost of Production.

 

1.1.2.                Agreement shall mean this Agreement and all Exhibits
attached hereto, as the same may be amended and modified in writing from time to
time pursuant to the terms hereof.

 

1.1.3.                        Budget shall mean the initial or annual budget,
and any periodic updates thereto, setting forth, among other things, TCMC’s
Budgeted Cost of Production for the period represented by the Budget. The
initial Budget is attached to this Agreement as Exhibit A.

 

1.1.4.                        Budgeted Cost of Production shall mean TCMC’s
estimate of the full cost to produce Product, identified as “Phase 6 Estimated
Total Costs” in the Budget, and expressed in cost per pound of molybdenum
contained in Product. For the avoidance of doubt, “Budgeted Cost of Production”
shall: (i) include (A) an allocation of the costs of the Stripping Program in
accordance with the Budget, together with all costs to mine and beneficiate the
Reserves, transport molybdenum disulfide concentrates produced at the Mine from
the Reserves to Langeloth, and convert such molybdenum disulfide into Product at
Langeloth; and (B) actual reclamation costs to the extent such costs are
attributable solely to Phase 6; but (ii) shall exclude beneficiation costs
directly attributable to the lubricant grade molybdenum disulfide products
produced by TCMC known as “HPM,” “Grade A,” and “Grade B.” Furthermore, to the
extent that capital expenditures or investments in the Property and/or the Mine
are required, only those portions of such capital expenditures or investments
that are actually allocable to Phase 6 (in whole or in part) shall be allocated
to the Budgeted Cost of Production (in whole or in part); and any other portions
more properly allocable to other operations or activities on the Property and/or
at the Mine shall not be allocated to Budgeted Cost of Production.

 

1.1.5.                        Business Day shall mean a day on which the
commercial banks located in Tokyo, Japan, New York, New York, and Denver,
Colorado, are open for business.

 

1.1.6.                        Confidential Information shall mean and include,
without limitation: (i) all knowledge and information regarding TCMC, the
Property, the Mine, and the business and operations of TCMC on the Property,
whether acquired or developed by TCMC, Sojitz, or any agent, vendor, contractor,
or employee of any of them; (ii) all knowledge and information regarding Sojitz
and its business, operations, and customers, whether acquired or developed by
TCMC, Sojitz, or any agent, vendor, contractor, or employee of any of them;
(iii) any proprietary, confidential or trade secret design or process belonging
to TCMC; (iv) all Mine Plans, Budgets, and all financial, production and
operating reports provided by TCMC to Sojitz in accordance with Article VIII,
below; and (v) the terms and conditions of this Agreement.

 

1.1.7.                        Effective Date shall have the meaning given to it
in Section 2.1, below.

 

 

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1.1.8.                        Execution Date shall mean the date on which this
Agreement was executed by the Parties, namely September 28, 2005.

 

1.1.9.                        Langeloth shall mean TCMC’s molybdenum disulfide
roasting facility located in Langeloth, Pennsylvania.

 

1.1.10.                  Mine shall mean the Thompson Creek Mine owned and
operated by TCMC and located on the Property.

 

1.1.11.                  Mine Plan shall mean the Mine Plan, attached hereto as
Exhibit B, as the same may be amended from time to time by TCMC. The Mine Plan
shall include a schedule of TCMC’s anticipated production from the Mine during
the period covered by the Mine Plan.

 

1.1.12.                  Party and Parties shall mean Sojitz or TCMC, or both of
them, as the context requires.

 

1.1.13.                  Phase 6 shall mean development and production of the
Reserves from the Mine, including without limitation the conduct and completion
of the Stripping Program and the Production Program between the benches on the
8100 and 6500 levels.

 

1.1.14.                  Product shall mean technical grade molybdic oxide
meeting the Replacement Specification which is produced by TCMC from Reserves
during Phase 6.

 

1.1.15.                  Production Program shall mean the program to be carried
out during Phase 6, for mining the Reserves, beneficiating the
molybdenum-containing ore within the Reserves, and producing Product.

 

1.1.16.                  Property shall mean the fee lands, patented and
unpatented mining claims, and other real property interests owned by TCMC and
located near Challis, in Custer County, Idaho.

 

1.1.17.                  Rejection Specification shall mean a minimum molybdenum
content of 57%; copper content not to exceed 0.50%; sulfur content not to exceed
0.1%; lead content not to exceed 0.05%; and phosphorous content not to exceed
0.05%.

 

1.1.18.                  Replacement Specification shall mean the chemical and
physical analysis of all technical grade molybdic oxide as and when produced at
Langeloth from time to time during Phase 6; it being the intent of the parties
that the quality of Sojitz Product be consistent with the quality of Product
produced at Langeloth for TCMC’s account from time to time during Phase 6.

 

1.1.19.                  Reserves shall mean the amount of material within the
Phase 6 boundaries containing .05% molybdenum or greater, estimated on the
Execution Date to be approximately 80 million pounds of recoverable molybdenum.

 

1.1.20.                  Sojitz shall mean Sojitz Corporation, a Japanese
corporation, and a Party to this Agreement.

 

1.1.21.                  Sojitz Product shall mean all Product sold to Sojitz
pursuant to this Agreement.

 

 

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1.1.22.                  Stripping Program shall mean the capital stripping
program required to be carried out during Phase 6, for removing approximately 57
million tons of Waste from the Mine.

 

1.1.23.                  TCMC shall mean Thompson Creek Metals Company, a
Colorado corporation, and a Party to this Agreement,

 

1.1.24.                  TCMC Trademarks shall have the meaning given to it in
Section 10.7, below,

 

1.1.25.                  Term shall mean the duration of this Agreement as set
forth in Section 2.1, below.

 

1.1.26.                  Waste shall mean all overburden and waste rock removed
from the Mine during the Stripping Program.

 

Article II
TERM

 

2.1                    Term.  This Agreement shall become effective on
January 1, 2008 (the “Effective Date”). This Agreement shall continue in full
force and effect from the Effective Date until TCMC has sold and delivered to
Sojitz that quantity of Product which TCMC is obligated to sell and deliver to
Sojitz in accordance with Section 3.1, below, unless: (i) this Agreement is
terminated earlier in accordance with the terms and conditions set forth herein;
or (ii) Sojitz, in its sole discretion, terminates this Agreement because:
(A) TCMC, in its sole and absolute discretion, permanently ceases production at
the Mine or temporarily suspends production from the Mine for a period in excess
of one hundred and eighty (180) consecutive calendar days; or (B) the Production
Program has not commenced on or prior to September 1, 2007.

 

Article III
PURCHASE AND SALE OF PRODUCT

 

3.1                    Purchase and Sale.  TCMC agrees to sell and deliver, and
Sojitz agrees to purchase and receive, ten percent (10%) of all Product as and
when produced by TCMC from time to time during Phase 6; provided, however, that
TCMC shall not be obligated to sell and deliver more than one million
(1,000,000) pounds of molybdenum contained in Product in any calendar year, nor
more than four million (4,000,000) pounds of molybdenum contained in Product
during the Term.

 

Article IV
PRICE AND PAYMENT

 

4.1                    Price.  The price to be paid by Sojitz for Sojitz Product
shall be the sum of the Actual Cost of Production, plus thirty-five percent
(35%) of the Actual Cost of Production; provided, however, that such price shall
never be less than US$4.50 per pound of molybdenum contained in Sojitz Product,
nor greater than US$7,50 per pound of molybdenum contained in Sojitz Product.

 

 

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4.2 Invoices.

 

4.2.1  Provisional Invoices. On or before the fifth calendar day of each
calendar month, TCMC shall submit to Sojitz a provisional invoice for all Sojitz
Product delivered to Sojitz during the preceding calendar month. The Budgeted
Cost of Production reflected in each invoice shall be that identified in the
then-current Budget.

 

4.2.2  Quarterly True-Up Statements. Within thirty (30) calendar days following
the first calendar day of each calendar quarter, or as soon thereafter as
sufficient information is available to TCMC, TCMC shall submit a statement to
Sojitz setting forth a comparison of: (i) the Budgeted Cost of Production
invoiced to Sojitz during the preceding calendar quarter; and (ii) TCMC’s Actual
Cost of Production during the preceding calendar quarter.

 

4.2.2.1 If the Budgeted Cost of Production invoiced to Sojitz exceeds TCMC’s
Actual Cost of Production during the preceding calendar quarter, then such
statement shall show a credit to Sojitz in the amount determined by multiplying:
(i) the number of pounds of Sojitz Product invoiced to Sojitz during such
quarter by (ii) the difference between (A) the Budgeted Cost of Production
invoiced to Sojitz during such quarter, and (B) the Actual Cost of Production
for such quarter. Any credit to Sojitz shown in a quarterly true-up statement
shall be applied to the next monthly invoice.

 

4.2.2.2 If the Budgeted Cost of Production invoiced to Sojitz is less than
TCMC’s Actual Cost of Production during the preceding calendar quarter, then
such statement shall show an amount due from Sojitz in the amount determined by
multiplying: (i) the number of pounds of Sojitz Product invoiced to Sojitz
during such quarter by (ii) the difference between (A) the Budgeted Cost of
Production invoiced to Sojitz during such quarter, and (B) the Actual Cost of
Production for such quarter.

 

4.3                    Payment. Sojitz shall pay all provisional invoices, and
all amounts shown as due in quarterly true-up statements, within fourteen (14)
Business Days following the date of Sojitz’ receipt of the same. Payment shall
be made by wire transfer of immediately available funds to Account Number
194310709580 at US Bank National Association, Denver, Colorado, ABA #102000021.
TCMC acknowledges and agrees that payment in full by Sojitz’ affiliate, Sojitz
Noble Alloys Corporation, of any financial obligation owed to TCMC by Sojitz
hereunder shall constitute full and final satisfaction of that same Sojitz
obligation.

 

4.4                    Taxes. All fees, taxes and other governmental impositions
(except for income taxes of TCMC), including those resulting from future changes
and amendments to existing tax laws, which are imposed on the manufacture,
transportation, delivery, sale, or use of Sojitz Product, shall be for the
account of Sojitz in addition to the price of the Sojitz Product. In the event
TCMC shall be required to pay any such fee or tax, or shall do so as a
convenience to Sojitz, Sojitz promptly shall reimburse TCMC for the same. If
Sojitz claims exemption from any such tax or fee, Sojitz shall furnish to TCMC
copies of the appropriate fully-executed exemption certificates in accordance
with the laws and regulations of the authority levying such fee or tax. Should
such exemption be denied, Sojitz shall assume and pay all such fees or taxes,
together with penalties and interest, as may be assessed against TCMC.

 

 

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4.5                    Records; Audit.

 

4.5.1 Generally. TCMC shall maintain detailed cost accounting records, including
general ledgers, supporting and subsidiary journals, invoices, checks and other
customary documentation, sufficient to permit an accurate calculation of TCMC’s
Actual Cost of Production. Such records shall be retained for the period
necessary to comply with tax or other regulatory requirements.

 

4.5.2 Sojitz’ Right to Audit Accounting Books and Records. Sojitz, at its sole
election and expense, shall have the right to inspect TCMC’s accounting books
and records relating to TCMC’s calculation of Actual Cost of Production. Such
inspection may be made by Sojitz itself or by any authorized representative of
Sojitz. Any such inspection shall be for a reasonable length of time during
regular business hours, at a mutually convenient time, upon reasonable written
notice by Sojitz; provided, however, that Sojitz shall be limited to one such
inspection during any TCMC fiscal year; and provided, further, that any such
inspection shall be concluded on or prior to the expiration of six (6) months
following Sojitz’ receipt of TCMC’s reviewed financial statements for the fiscal
year just ended in accordance with Section 8.2, below (the “Audit Termination
Date”). TCMC’s determination of Actual Cost of Production shall be considered
final and in full accord and satisfaction of all obligations of TCMC with
respect thereto, unless Sojitz gives written notice describing and setting forth
a specific objection to such determination on or prior to the Audit Termination
Date.

 

4.5.3 Sojitz’ Right to Audit Assay Records. In connection with any claim made by
Sojitz for failure of material to conform with the Replacement Specification
pursuant to Section 6.2, below, Sojitz shall have the right to inspect such of
TCMC’s assay records as reasonably may be necessary to determine whether the
quality of the material which is the subject of such claim is consistent with
the quality of Product produced at Langeloth for TCMC’s account at the time when
the material which is the subject of such claim was produced; provided, however,
that in no event shall TCMC be required to maintain its assay records for a
period longer than twelve (12) months from the date of assay.

 

Article V
DELIVERY

 

5.1                    Shipping Terms. All sales of Sojitz Product hereunder
shall be made C.I.F. Major Japanese Ports.

 

5.2                    Title and Risk of Loss. Title to and risk of loss of
Sojitz Product shall pass from TCMC to Sojitz when Sojitz Product passes the
ship’s rail at the United States port of departure.

 

5.3                    Warehousing Fees. TCMC shall store Sojitz Product in its
Langeloth warehouse at no charge for a maximum period of forty-five (45) days
from the date on which Sojitz Product was placed into the warehouse. Sojitz
Product stored beyond forty-five (45) days at Sojitz’ request or instruction
shall be assessed a storage fee of US$0.006 per pound of molybdenum contained in
Sojitz Product per month, or part thereof, plus a fee of US$0.015 per pound of
molybdenum contained in Sojitz Product for transportation arranged by TCMC to a
convenient warehouse. All additional transportation, storage or other costs
shall be for the account of Sojitz.

 

 

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5.4                    Deliveries. TCMC shall use reasonable efforts to deliver
Sojitz Product to Sojitz in approximately equal monthly quantities.

 

5.5                    Freight and Insurance. Sojitz acknowledges and agrees
that: (i) the price to be paid by Sojitz for Sojitz Product in accordance with
Section 4.1, above, does not include cost, insurance and freight for
transportation of Sojitz Product from Langeloth to Major Japanese Ports; and
(ii) Sojitz shall promptly reimburse TCMC for all costs associated with
transporting Sojitz Product from Langeloth to Major Japanese Ports, including
without limitation all freight and insurance costs, charges, premiums and fees,
and all export and import duties, taxes, and charges.

 

Article VI
WEIGHTS AND ASSAYS; NON-CONFORMING SOJITZ PRODUCT

 

6.1                    Weights and Assays. Subject to the provisions of
Section 6.2, below, TCMC weights and assays for Sojitz Product shall be
considered final and binding for all purposes. Within five (5) calendar days
following the end of each calendar month during the Term, TCMC shall provide
Sojitz with copies of all assays for molybdenum, copper, lead, phosphorous, and
sulfur taken from Sojitz Product produced at Langeloth during the preceding
calendar month.

 

6.2                    Non-Conforming Sojitz Product. Sojitz shall notify TCMC
of any claim for short delivery or for failure of material to conform with the
Rejection Specification or the Replacement Specification within thirty (30)
calendar days following arrival of the material in question at the Major
Japanese Port, or any claim shall be waived. TCMC shall be permitted to sample
any material that is the subject of such claim; and in the event that the
analyses of Sojitz and TCMC disagree, a mutually acceptable independent testing
authority shall be retained to test the material alleged to be non-conforming.
The analysis of such authority shall be binding on the parties hereto and the
cost of such testing shall be borne by the party whose analysis is furthest from
that of the independent testing authority. Sojitz assumes all risk,
responsibility, and liability for non-conforming material which it accepts or
sells to third parties.

 

6.3                    Claims. All claims as to the quality, quantity, weight,
loss of or damage to material delivered hereunder, or for short delivery, shall
be resolved in accordance with this Section 6.3.

 

6.3.1 Rejection Specification. If, pursuant to Section 6.2, above, it is finally
determined that material shipped to Sojitz does not conform to the Rejection
Specification, then: (i) Sojitz shall have no obligation to purchase such
non-conforming material; (ii) Sojitz and TCMC shall enter into good faith
negotiations for disposition of the non-conforming material; (iii) for purposes
of Article III of this Agreement, material finally determined not to conform
with the Rejection Specification shall be included in the determination of the
quantity of Product produced during Phase 6; and (iv) in respect of such
non-conforming material, TCMC shall have no obligation to sell and deliver
additional Sojitz Product in satisfaction of TCMC’s obligations pursuant to
Article III.

 

6.3.2 Replacement Specification. If, pursuant to Section 6.2, above, it is
finally determined that material shipped to Sojitz does not conform to the
Replacement Specification, then: (i) TCMC shall replace that portion of the
material shipped to Sojitz which is determined to have been non-conforming;
(ii) for purposes of Article III of this Agreement, material finally determined
not to conform with Replacement Specification shall not be included in the

 

 

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determination of the quantity of Product produced during Phase 6; and (iii) only
the Sojitz Product delivered as replacement for such non-conforming material
shall be considered in satisfaction of TCMC’s obligations pursuant to
Article III.

 

6.3.3 Short Delivery. TCMC shall have the right to satisfy any claim for short
delivery by the shipment of Product conforming to the Replacement Specification.

 

6.3.4 Sole Remedies. The remedies set forth in this Section 6.3 shall be the
only remedies available to Sojitz for any claim as to the quality, quantity,
weight, loss of or damage to material delivered hereunder, or for short
delivery. Sojitz expressly waives its right to effect a “cover” in accordance
with applicable provisions of the Uniform Commercial Code adopted in the State
of New York.

 

Article VII
REPRESENTATIONS AND WARRANTIES

 

7.1                    Representations and Warranties of TCMC. TCMC hereby
represents and warrants to Sojitz as follows:

 

7.1.1 Organization and Good Standing. TCMC is a corporation duly organized,
validly existing and in good standing in the State of Colorado, and is qualified
to do business in the State of Idaho.

 

7.1.2 Authority. TCMC has all requisite corporate power and authority to enter
into this Agreement and to perform all of its covenants, duties, and obligations
hereunder.

 

7.1.3 Binding Agreement. All requisite corporate action on the part of TCMC and
its officers and directors necessary for the execution, delivery and performance
of this Agreement and the other agreements and instruments to be delivered by
TCMC hereunder has been taken. This Agreement and all agreements and instruments
to be executed and delivered by TCMC hereunder are, and when executed and
delivered will be, the legal, valid and binding obligations of TCMC enforceable
against TCMC in accordance with their respective terms.

 

7.1.4 Product Warranty. All Sojitz Product delivered to Sojitz hereunder shall
conform to the Replacement Specification.

 

7.1.5 Disclaimers. All of the representations and warranties made by TCMC to
Sojitz are set forth in this Section 7.1, and there are no representations or
warranties whatsoever, whether express or implied, made by TCMC to Sojitz other
than as set forth in this Section 7.1. TCMC MAKES NO AND EXPRESSLY DISCLAIMS ALL
OTHER REPRESENTATIONS OR WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, IN
FACT OR BY LAW, WHETHER OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE
OR USE OR OTHERWISE, CONCERNING THE PRODUCT TO BE DELIVERED HEREUNDER. TCMC
SHALL NOT BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES ARISING UNDER THIS AGREEMENT OR THE USE OF THE PRODUCT SINGULARLY OR IN
COMBINATION WITH OTHER PRODUCTS OR OTHERWISE. TCMC’S LIABILITY FOR RETURN OF
NON-CONFORMING PRODUCT SHALL IN NO EVENT EXCEED REPLACEMENT OF NON-CONFORMING
PRODUCT AND

 

 

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ALL SHIPPING COSTS INCURRED TO RETURN AND REPLACE THE NON-CONFORMING PRODUCT.

 

In addition to the foregoing disclaimers, TCMC MAKES NO, AND EXPRESSLY DISCLAIMS
ANY, REPRESENTATION OR WARRANTY TO SOJITZ WHATSOEVER, WHETHER EXPRESS OR
IMPLIED, WHETHER BY COMMON LAW, STATUTE, OR OTHERWISE, RELATING TO: (i) THE
QUANTITY OR THE PHYSICAL OR CHEMICAL CHARACTERISTICS OF THE RESERVES AND THE
QUANTITY OF PRODUCT WHICH MAY BE PRODUCED THEREFROM; (ii) THE DATE ON WHICH THIS
AGREEMENT SHALL BECOME EFFECTIVE OR THE DURATION OF THE TERM; (iii) THE ACTUAL
COST OF PRODUCTION, OR THAT THE ACTUAL COST OF PRODUCTION ULTIMATELY IS THE SAME
AS, LESS THAN, OR GREATER THAN THE BUDGETED COST OF PRODUCTION; (iv) THE TAX
EFFECTS ON SOJITZ OR ANY OF ITS RELATED AND AFFILIATED ENTITIES RESULTING FROM
SOJITZ ENTERING INTO THIS AGREEMENT, PERFORMING ITS DUTIES AND OBLIGATIONS
HEREUNDER, AND RECEIVING THE BENEFITS AFFORDED IT HEREUNDER; OR (v) THE RELATIVE
MARKET CONDITIONS FOR MOLYBDENUM AND MOLYBDENUM PRODUCTS AT ANY TIME DURING THE
TERM OF THIS AGREEMENT.

 

7.2                    Representations, Warranties and Covenants of Sojitz.
Sojitz hereby represents, warrants, and covenants to TCMC as follows:

 

7.2.1 Organization and Good Standing. Sojitz is a corporation duly organized,
validly existing and in good standing in Japan.

 

7.2.2 Authority. Sojitz has all requisite corporate power and authority to enter
into this Agreement and to perform all of its covenants, duties, and obligations
hereunder.

 

7.2.3 Binding Agreement. All requisite corporate action on the part of Sojitz
and its officers and directors necessary for the execution, delivery and
performance of this Agreement and the other agreements and instruments to be
delivered by Sojitz hereunder has been taken. This Agreement and all agreements
and instruments to be executed and delivered by Sojitz hereunder are, and when
executed and delivered will be, the legal, valid and binding obligations of
Sojitz enforceable against Sojitz in accordance with their respective terms.

 

7.2.4 Disclaimer. All of the representations and warranties made by Sojitz to
TCMC are set forth in this Section 7.2, and there are no representations or
warranties whatsoever, whether express or implied, made by Sojitz to TCMC other
than as set forth in this Section 7.2.

 

7.2.5 Use of Sojitz Product. To the fullest extent allowed by applicable law,
Sojitz shall assume all risk, responsibility and liability, and shall indemnify,
defend, and hold harmless TCMC, for any loss, damage or injury to persons or
property, of Sojitz or others, arising out of the possession, handling, storage,
transportation, use or sale, either singly or in combination with other
substances, of any material delivered hereunder.

 

 

9

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Article VIII
MINE PLANS AND BUDGETS; REPORTS; CONDUCT OF PHASE 6 OPERATIONS

 

8.1                    Mine Plans and Budgets. TCMC shall prepare all Budgets
and Mine Plans. Sojitz acknowledges its receipt of the initial Budget and Mine
Plan, copies of which are attached to this Agreement as Exhibits A and B,
respectively. TCMC shall have the right from time to time in its sole discretion
to amend the Budget and Mine Plan then in effect. TCMC shall provide Sojitz with
copies of all final amendments to TCMC’s Mine Plans and Budgets, and such final
amendments shall: (i) be prepared in a level of detail comparable to the initial
Budget and Mine Plan; and (ii) supercede and replace all prior versions of the
Budget and Mine Plan previously attached as Exhibits to this Agreement. In the
event TCMC determines that capital expenditures materially in excess of those
set forth in the then-current Budget are required for the benefit of Phase 6, or
in the event TCMC determines to make a material change in the production
schedule set forth in the then-current Mine Plan, then TCMC shall notify Sojitz
of such changes promptly following TCMC’s determination.

 

8.2                    Reports. TCMC shall provide to Sojitz on a timely basis
copies of the monthly mine production report, monthly mill operating report, and
monthly Langeloth production report prepared by TCMC in the ordinary course of
its business. TCMC also shall provide to Sojitz copies of the Thompson Creek
Mine Monthly Report to assist Sojitz in its review of TCMC’s Actual Cost of
Production. On or before the fifth calendar day following TCMC’s receipt of
reviewed financial statements from the auditors performing such review, TCMC
shall provide Sojitz with TCMC’s reviewed financial statements for the fiscal
year then ended.

 

8.3                    Conduct of Phase 6 Operations. TCMC shall have exclusive
control over all development, mine planning, mining, sorting, beneficiation,
reclamation operations, and all other operations, at the Mine during Phase 6.
Notwithstanding the foregoing, TCMC shall use reasonable best efforts to conduct
all operations hereunder in accordance with: (i) the Mine Plan and Budget then
in effect; (ii) all applicable permits, licenses, laws, rules, regulations and
ordinances; and (iii) that degree of efficiency, care and skill ordinarily
exercised by qualified and reputable mine operators at comparable mining
operations in North America.

 

Article IX
FORCE MAJEURE

 

9.1                    Force Majeure. Either party hereto shall be relieved from
liability for delay in performance of or failure to perform any of the
obligations herein imposed, except the obligation to pay for Sojitz Product
already delivered, for the time and to the extent such delay or failure
(including Sojitz’s failure to take delivery or TCMC’s failure to make delivery)
is occasioned by voluntary or involuntary compliance with any law, order,
regulation, recommendation, or request of any governmental authority, whether
federal, state, or municipal, including the preempting of Product by said
authorities; breakdown or other failure of facilities (whether its own or those
of others) used for manufacture, transportation, or processing of Product;
shortages of labor, power, fuel, or raw materials; inability to obtain raw
materials from normal and reasonable sources of supply or normal and reasonable
alternate sources of supply; inability of TCMC to operate its plant and
equipment; acts of God, or acts of public enemy; strike, lockout, or other
industrial disturbances; riots, floods, hurricanes, fire, or explosion; or any
other cause or causes of any kind or character, in any case beyond the
reasonable control of the party delayed or failing to perform,

 

 

10

--------------------------------------------------------------------------------

 

whether such cause is similar to or dissimilar from the enumerated causes, which
by the exercise of reasonable diligence the party is unable to prevent (any such
cause herein called “Force Majeure”). Either party shall have the right to
terminate this Agreement upon thirty (30) days prior written notice in the event
that the other party shall have suffered an event of Force Majeure for a period
of at least one hundred and eighty (180) continuous calendar days.

 

Article X
OTHER COVENANTS OF THE PARTIES

 

10.1              Default.

 

10.1.1 Default by Sojitz. TCMC may declare a default by Sojitz in the event that
Sojitz: (i) becomes insolvent, admits in writing its inability to pay debts
generally as the same become due, or in the event that any proceedings in
bankruptcy, whether voluntary or involuntary, are instituted against or in the
name of Sojitz, and such proceedings are not dismissed within sixty (60)
calendar days; or (ii) fails to make payment for Sojitz Product within ten
(10) Business Days following written notice by TCMC to Sojitz that Sojitz is
delinquent in its payment obligations to TCMC, which notice shall specify the
details of Sojitz’ delinquency. In case of any default by Sojitz pursuant to
this Section 10.1.1, then TCMC, at its election, may postpone or refuse to make
any further shipments and/or terminate this Agreement as to further shipments
without prejudice to asserting such other remedies as may be afforded TCMC by
law.

 

10.1.2 Default by TCMC. If (i) Sojitz gives TCMC written notice of TCMC s breach
of a material obligation of TCMC hereunder, and (ii) TCMC fails to remedy such
breach within thirty (30) calendar days following the date of Sojitz’ written
notice (or, if such breach is not capable of remedy within such time, fails to
commence and diligently pursue a remedy of such breach within such time), then
Sojitz, at its election and without prejudice to asserting such other remedies
as may be afforded to Sojitz, may terminate this Agreement upon written notice
stating the effective date of such termination.

 

10.1.3 Damages. In no event shall one party to this Agreement be liable to the
other party for any special, indirect, incidental, or consequential damages
howsoever arising under this Agreement.

 

10.2                         No Partnership. Nothing contained in this Agreement
shall be deemed to constitute either Party the partner or the venturer of the
other, or, except as otherwise herein expressly provided, to constitute either
Party the agent or legal representative of the other, or to create any fiduciary
relationship between them. The Parties do not intend to create, and this
Agreement shall not be construed to create, any mining, commercial or other
partnership or joint venture.

 

10.3                         Tax Matters. Except as set forth in Section 4.4,
each Party shall be solely responsible and liable for any and all federal, state
and local taxes of whatever kind or nature (to include all taxes, fines, and
penalties) assessed or imposed against it. Each Party covenants to indemnify,
defend and hold harmless the other Party for any breach of this Section 10.3 by
the indemnifying Party.

 

10.4                         Dispute Resolution. Except as set forth in Sections
6.1 and 6.2 above, all disagreements and disputes arising out of or related to
this Agreement, shall first be the subject

 

 

11

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of good faith negotiations among the Parties. If initial negotiations are
unsuccessful in resolving such disagreement or dispute within fifteen (15)
calendar days following written notice thereof (or within such shorter period as
may be specified herein), the matter shall be referred for resolution to a panel
consisting of one senior executive of each Party having at least the title of
Vice President, General Manager, or their equivalent. If such senior executives
fail, after reasonable good faith efforts, to arrive at a satisfactory
resolution of such disagreement or dispute within thirty (30) calendar days
following the date of the initial written notice of dispute, or if no such
officer of a party is made available to confer within that period, then any of
the parties may pursue any of its rights and remedies available at law or in
equity. Nothing set forth herein shall require either party to observe the
dispute resolution procedures set forth in this Section 10.4 prior to seeking
appropriate injunctive or declaratory relief before any court or governmental
authority when, in its reasonable discretion, such injunctive or declaratory
relief is required in emergency situations, including without limitation the
preservation of human health and safety or the prevention of damage to the
environment.

 

10.5              Confidentiality.

 

10.5.1 Use and Disclosure of Confidential Information. Sojit and TCMC shall
maintain the confidentiality of the Confidential Information. At all times while
Confidential Information belonging to one Party is in the possession of the
other Party, the Party in possession shall maintain strict security over the
same, and shall not divulge the same directly or indirectly to any person;
provided, however, that Sojitz may disclose Confidential Information: (i) to
Sojitz’ lenders, financial institutions and other legal, tax, financial, and
technical advisors upon the prior written consent of TCMC; and (ii) as required
by applicable laws or by any order of any court or governmental authority. Any
person or entity to whom Confidential Information is disclosed pursuant to
Section 10.5.1 (i), above, shall be informed of the confidential nature of the
Confidential Information so disclosed, and shall agree in writing to keep the
same confidential.

 

10.5.2 Return of Confidential Information. Any or all of the Confidential
Information shall be turned over to the Party to whom it belongs: (i) upon
request by the owner thereof; (ii) upon termination of this Agreement; or
(iii) otherwise in accordance with the terms and conditions of this Agreement.

 

10.5.3 Public Announcements. Prior to making or issuing any press release or
other public announcement or disclosure concerning this Agreement or the
transactions contemplated herein, the Party contemplating such disclosure first
shall consult with the other Party, and the Parties together shall agree upon
the content and timing of such announcement or disclosure; provided, however,
that disclosure prior to such agreement maybe made if, in the good faith
judgment of the disclosing Party, there is not sufficient time to consult with
and obtain agreement from the other Party before such announcement or disclosure
must be made under applicable laws. In the case where disclosure is made prior
to the Parties’ agreement on content and timing, the disclosing Party shall
notify the other Party before such announcement or disclosure is made if at all
reasonably possible; but if not, then as soon as reasonably possible thereafter.

 

10.6              Sojitz’ Right to Inspect Property. Sojitz and its authorized
agents who are experienced in mining operations, at Sojitz’s sole risk and
expense, shall have the right, exercisable during regular business hours, at a
mutually convenient time, in a reasonable manner conforming to TCMC’s safety
rules and regulations, and so as not to interfere with TCMC’s operations on the
Property, to go upon the Property for the purpose of confirming that TCMC is

 

 

12

--------------------------------------------------------------------------------

 

conducting its operations in the manner required by this Agreement. Sojitz shall
furnish TCMC with prior written notice of the time and place of any inspection
by Sojitz pursuant to this Section 10.6. Sojitz shall indemnify, defend and hold
harmless TCMC from any and all claims for damages, including injury or damage to
other persons or property, arising out of any death, personal injury or property
damage sustained by Sojitz, its agents vendors, contractors and other
representatives, and the employees of any of them, while in or upon the
Property, whether or not such persons and entities are in or upon the Property
pursuant to this Section 10.6, which death, injury or damage does not result
from TCMC’s gross negligence or willful misconduct. If requested by TCMC, Sojitz
and its agents, vendors, contractors and other representatives, and the
employees of any of them, will confirm in writing their waiver of claims against
TCMC in a manner consistent with the terms of this Section 10.6.

 

10.7                    Trademarks and Intellectual Property. TCMC grants to
Sojitz, and Sojitz shall have, the right to use the name “Thompson Creek Metals
Company” in connection with its marketing and resale of Sojitz Product. Except
as set forth in the preceding sentence, Sojitz expressly acknowledges that
Sojitz shall not acquire any other right, title or interest in, and shall not
use any, words, names, logos, trade names, or trademarks belonging to TCMC and
its affiliates, including the names “Thompson Creek Metals Company,” “Thompson
Creek Mining Company,” “Cyprus Thompson Creek Mining Company,” “Thompson Creek
Mining, Ltd.,” “Langeloth Metallurgical Company, LLC,” or any derivative or
combination of such words and names (the “TCMC Trademarks”). Sojitz further
acknowledges that the TCMC Trademarks constitute property of a unique and
special kind and value to TCMC and its related and affiliated entities, and that
any unpermitted use thereof will result in substantial and irreparable damage to
TCMC and its related and affiliated entities not compensable by mere monetary
damages. Accordingly, Sojitz consents to injunctive or other appropriate
equitable relief, including specific performance, upon initiation of proceedings
by TCMC for breach of Sojitz’s obligations set forth in this Section 10.7. Such
remedy shall not be deemed to be the exclusive remedy for any breach of such
obligations, but shall be in addition to all other remedies available at law or
in equity to TCMC.

 

10.8                    No Implied Covenants. There are no implied covenants
contained in this Agreement other than those of good faith and fair dealing.

 

10.9                    No Third Party Beneficiaries. This Agreement shall be
construed to benefit the Parties and their respective successors and permitted
assigns only; and except as expressly permitted herein, shall not be construed
to create third party beneficiary rights in any other party or in any
governmental authority. Nothing set forth herein shall give any person or entity
not a party hereto any right, remedy, or claim under or in respect of this
Agreement.

 

10.10              Parties in Interest. This Agreement shall be binding upon the
parties hereto and their respective successors and permitted assigns.

 

10.11              Assignment. Neither Party shall assign this Agreement or any
portion hereof without the prior written consent of the other Party, which
consent shall not be unreasonably withheld. Notwithstanding the foregoing, TCMC
may assign, and Sojitz hereby consents to the assignment of, this Agreement as
security for any financing provided to TCMC by any financial institution in
connection with the Property or the business and operations conducted thereon;
and Sojitz agrees to execute such further consents to assignment.

 

 

13

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10.12              Survival. The duties, obligations and covenants of the
parties set forth in Articles III, IV, V, VI and VII above, and in this
Article X, shall survive the termination or expiration of this Agreement until
the same shall have been performed to the reasonable satisfaction of the party
to whom the benefit of such covenant is owed, or until such party shall waive
performance thereof in a written notice given pursuant to Section 10.13 below.

 

10.13              Notices. Any notice required or desired to be given hereunder
shall be effective if made in writing and delivered in person or by recognized
overnight courier, sent by facsimile transmission, or sent by certified or
registered U.S. mail, return receipt requested, to the following addresses or to
such other person or address as such party may have specified in a notice duly
given in accordance with this Section 10.13.

 

If to TCMC:

If to Sojitz:

 

 

Thompson Creek Metals Company

Sojitz Corporation

945 West Kenyon Avenue, Unit B

1-20, Akasaka 6-chome

Englewood, Colorado 80110-8135

Minato-ku, Tokyo, 107-8655 Japan

Attn: Kevin Loughrey

Attn: Shigeru Ohno, General Manager

Fax: (303) 761-7420

         Iron Ore & Ferro Alloys Dept.

 

Fax: +81-3-5520-3517

 

 

 

With copy to:

 

 

 

Sojitz Noble Alloys Corporation

 

1211 Avenue of the Americas

 

New York, New York 10036

 

Attn: Kiyotaka Tomita

 

Fax: (212) 704-6630

 

10.14              Governing Law; Venue; Waiver of Trial by Jury. This Agreement
shall be governed by and construed in accordance with the internal laws of the
State of New York, without regard to principles of conflict of laws. In the
event of litigation arising hereunder, the parties agree that the venue for such
litigation shall be the state and federal courts in New York, New York having
jurisdiction over the parties and the dispute. The parties irrevocably waive any
objection, which any of them may now or hereafter have to the bringing of any
such action or proceeding in such jurisdictions, including any objection to the
laying of venue based on the grounds of forum non-conveniens and any objection
based on the grounds of lack of in-personam jurisdiction. IN ANY LITIGATION
ARISING FROM OR RELATED TO THIS AGREEMENT, THE PARTIES HERETO EACH HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EACH MAY HAVE TO A
TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF EITHER PARTY TO THE
AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR TCMC AND SOJITZ TO ENTER
INTO THIS AGREEMENT. Should it become necessary for either party hereto to
enforce rights and/or obligations outlined herein, the prevailing party shall be
entitled to recover all reasonable costs associated therewith, including
reasonable legal fees.

 

 

14

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10.15              Entire Agreement. All Exhibits attached to this Agreement, as
the same may be amended from time to time by the written agreement of the
Parties, are by this reference incorporated into this Agreement for all
purposes. This Agreement, including all Exhibits attached hereto, constitute the
entire agreement and understanding of the parties relating to the subject matter
hereof, and the same shall supercede and replace all prior agreements,
understandings, representations or warranties, whether written or oral,
including all drafts of this Agreement, relating to the same subject matter.
Notwithstanding the foregoing, and for the avoidance of doubt, Sojitz expressly
acknowledges and agrees that Exhibits A and B concerning the Budget and Mine
Plan, respectively, contain TCMC’s estimates and forecasts of the data and
information presented therein; and TCMC makes no, and expressly disclaims all,
representations and warranties concerning such estimates and forecasts. To the
extent that Sojitz relies on any of the data and information presented in
Exhibits A and B, it does so at its sole risk.

 

10.16              Modification; Waiver. This Agreement shall not be modified or
amended, and no term, condition or provision hereof shall be waived, in whole or
in part, except in a writing executed by a duly authorized representative of
each party hereto.

 

10.17              Mutual Agreement. The terms and conditions of this Agreement
have been determined by the mutual negotiation of the parties hereto, and no
provision hereof shall be construed against one party or in favor of another
party merely by reason of the party who prepared or was responsible for the
draftsmanship.

 

10.18              Severability. In the event any provision of this Agreement
conflicts with the law under which this Agreement shall be construed, such
provision shall be deleted from this Agreement, and the Agreement shall be
construed to give effect to the remaining provisions hereof.

 

10.19              Headings. The headings in this Agreement are inserted for
convenience of reference only, shall not be considered a part of this Agreement,
and shall not affect the validity or interpretation of this Agreement.

 

10.20              Counterparts. This Agreement may be executed in one or more
counterparts, all of which together shall constitute one and the same agreement.
Once executed, the parties may exchange executed signature pages by facsimile
transmission; and upon receipt by each party of the signature page duly executed
by the other party, the parties shall be bound as fully as if each party was in
possession of a fully-executed original of this Agreement. Promptly following
such exchange by facsimile transmission, if made, the parties agree to exchange
the executed originals of this entire Agreement by U.S. Mail or overnight mail,
so that each party ultimately is in possession of at least one fully-executed
original hereof.

 

IN WITNESS WHEREOF, TCMC and Sojitz have executed this Agreement on the
Execution Date.

 

THOMPSON CREEK METALS

 

SOJITZ CORPORATION, a Japanese

COMPANY, a Colorado corporation

 

corporation

 

 

 

By: 

/s/ Kevin Loughrey

 

By: 

/s/ Shigeru Ohno

Title: 

PRESIDENT

 

Title: 

GENERAL MANAGER

 

 

15

--------------------------------------------------------------------------------

 

EXHIBIT A

To

Agreement

Between

Thompson Creek Metals Company

And

Sojitz Corporation

 

 

--------------------------------------------------------------------------------

 

Budget

 

--------------------------------------------------------------------------------

 

 

 

 

A-1

--------------------------------------------------------------------------------

 

Exhibit A - Phase 6 Mine Budget

 

 

 

2004/2005

 

2005/2006

 

2006/2007

 

2007/2008

 

2008/2009

 

2009/2010

 

2010/2011

 

Total

 

Direct Operating Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Phase 6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mining

 

$

13,277,306

 

$

18,539,974

 

$

16,353,095

 

$

11,010,610

 

$

10,060,425

 

$

10,033,562

 

$

8,113,035

 

$

87,388,008

 

Crushing & Conveying

 

$

0

 

$

14,552

 

$

703,292

 

$

1,104,840

 

$

1,102,614

 

$

1,102,614

 

$

718,112

 

$

4,746,024

 

Milling

 

 

 

$

157,436

 

$

8,530,109

 

$

14,796,653

 

$

15,673,439

 

$

15,941,969

 

$

12,499,719

 

$

67,599,325

 

Subtotal Phase 6

 

$

13,277,306

 

$

18,711,961

 

$

25,586,496

 

$

26,912,104

 

$

26,836,478

 

$

27,078,145

 

$

21,330,865

 

$

159,733,357

 

General and Administrative Operating Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Phase 6

 

$

3,052,801

 

$

4,220,639

 

$

5,890,663

 

$

7,558,725

 

$

8,679,195

 

$

9,357,716

 

$

5,314,174

 

$

44,073,713

 

Total Operating Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Phase 6, $

 

$

16,329,906.64

 

$

22,932,600.38

 

$

31,477,159.31

 

$

34,470,829.09

 

$

35,515,673.35

 

$

36,435,861.43

 

$

26,645,039.47

 

$

203,807,070

 

$/lb Phase 6 Production

 

$

0.00

 

$

449.48

 

$

5.09

 

$

2.40

 

$

1.72

 

$

1.50

 

$

1.75

 

$

2.53

 

Freight Costs if shipped to Langeloth, $/lb (not included in above operating
costs)

 

$

0.114

 

$

0.114

 

$

0.114

 

$

0.114

 

$

0.114

 

$

0.114

 

$

0.114

 

 

 

 

August 2005#1, Sojitz Purchase Contract, Phase 6 Est Costs. xls9/28/2005

 

--------------------------------------------------------------------------------

 

 

Exhibit A (continued)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Phase-6 Estimated Costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization on a Units of Production Basis

 

2006/2007

 

2007/2008

 

2008/2009

 

2009/2010

 

2010/2011

 

Total

 

 

Mo production Lbs in Conc (000’s)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Phase 6

 

6,178

 

14,345

 

20,631

 

24,339

 

15,213

 

80,706

 

 

Phase 5

 

8,403

 

 

 

 

 

 

 

 

 

 

 

 

Thompson Creek Mine, $ millions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Phase 6 Waste Pre-stripping Cost

 

$

3.4

 

$

8.0

 

$

11.5

 

$

13.6

 

$

8.5

 

$

45.0

 

Units of Production

Cash Production Cost

 

$

25.7

 

$

34.5

 

$

35.5

 

$

36.4

 

$

26.6

 

$

158.8

 

 

Cash Operating Costs

 

$

29.2

 

$

42.5

 

$

47.0

 

$

50.0

 

$

35.1

 

$

203.8

 

 

Capital Expenditures

 

$

1.7

 

$

3.9

 

$

5.6

 

$

6.6

 

$

4.1

 

$

22.0

 

Units of Production

Depreciation Expense

 

$

1.3

 

$

3.0

 

$

3.0

 

$

3.0

 

$

3.0

 

$

13.3

 

Yearly Depreciation Allocated in Proportion to the Phase 5 & 6 Yearly Production

Operating Costs Thompson Creek

 

$

32.1

 

$

49.4

 

$

55.6

 

$

59.6

 

$

42.3

 

$

239.1

 

 

Langeloth, $ millions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Freight Thompson Creek to Langeloth

 

$

0.7

 

$

1.6

 

$

2.4

 

$

2.8

 

$

1.7

 

$

9.2

 

 

Roasting Cost

 

$

2.0

 

$

4.7

 

$

6.8

 

$

8.0

 

$

5.0

 

$

26.6

 

 

Depreciation Expense

 

$

0.5

 

$

0.5

 

$

0.5

 

$

0.5

 

$

0.5

 

$

2.4

 

Uits of Production Allocation of Roasting & Packaging Related Depreciation

Packing Cost in Supersacks

 

$

0.2

 

$

0.4

 

$

0.6

 

$

0.8

 

$

0.5

 

$

2.5

 

 

Operating Cost Langeloth

 

$

3.4

 

$

7.3

 

$

10.3

 

$

12.0

 

$

7.7

 

$

40.7

 

 

Total Operating Costs

 

$

35.6

 

$

56.7

 

$

65.9

 

$

71.7

 

$

50.0

 

$

279.8

 

 

Sojitz Purchase

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mo Purchased -10 Percent Phase 6

 

618

 

1,435

 

2,063

 

2,434

 

1,521

 

8,071

 

 

Production of Lbs in Conc (000’s)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sojitz’s Share of Costs

 

$

3.6

 

$

5.7

 

$

6.6

 

$

7.2

 

$

5.0

 

$

28.0

 

 

Markup 35%, $ millions

 

$

1.2

 

$

2.0

 

$

2.3

 

$

2.5

 

$

1.7

 

$

9.8

 

 

Phase 6 Estimated Total Cost, $ Millions

 

$

4.8

 

$

7.7

 

$

8.9

 

$

9.7

 

$

6.7

 

$

37.8

 

 

Sojitz Unit Cost ($ per lb Mo) FOB Langeloth, in Supersacks Before Cap or Floor
Price Limits

 

$

7.77

 

$

6.33

 

$

4.31

 

$

3.98

 

$

4.44

 

$

4.68

 

 

 

August 2005#1, Sojitz Purchase Contract, Phase 6 Est Costs. xls9/28/2005

 

--------------------------------------------------------------------------------

 

EXHIBIT B

To

Agreement

Between

Thompson Creek Metals Company

And

Sojitz Corporation

 

--------------------------------------------------------------------------------

 

Mine Plan

 

--------------------------------------------------------------------------------

 

 

 

B-1

--------------------------------------------------------------------------------

 

Exhibit B - Phase 6 Mine Plan and Production Summary

 

 

 

2004/2005

 

2005/2006

 

2006/2007

 

2007/2008

 

2008/2009

 

2009/2010

 

2010/2011

 

Total

 

Mine

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Phase 6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ore, tons (000)

 

 

 

65

 

6,393

 

7,924

 

7,439

 

7,439

 

3,838

 

33,096

 

Grade, % Mo

 

 

 

0.043

 

0.069

 

0.103

 

0.151

 

0.177

 

0.184

 

0.133

 

Waste, tons (000)

 

17,107

 

26,039

 

14,273

 

837

 

—

 

255

 

356

 

58,867

 

Total, tons (000)

 

17,107

 

26,103

 

20,666

 

8,761

 

7,439

 

7,693

 

4,194

 

91,963

 

Phase 6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LG Ore to Stockpile, tons (000)

 

 

 

 

 

1,831

 

315

 

 

 

 

 

—

 

2,146

 

Grade, % Mo

 

 

 

 

 

0.055

 

0.058

 

 

 

 

 

—

 

0.056

 

LG Ore from Stockpile, tons (000)

 

 

 

 

 

—

 

—

 

 

 

 

 

2,153

 

2,153

 

Grade, % Mo

 

 

 

 

 

—

 

—

 

 

 

 

 

0.056

 

0.056

 

Phase 6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ore Milled, tons (000)

 

 

 

65

 

4,562

 

7,610

 

7,439

 

7,439

 

5,990

 

33,103

 

Grade, % Mo

 

 

 

0.043

 

0.075

 

0.104

 

0.151

 

0.177

 

0.138

 

0.133

 

Recovery, % Mo

 

90.88

 

92.45

 

90.80

 

90.25

 

91.85

 

92.55

 

91.95

 

 

 

Molybdenum Production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Phase 6 lbs (000)

 

—

 

51

 

6,178

 

14,345

 

20,631

 

24,339

 

15,213

 

80,756

 

 

August 2005#1, Sojitz Purchase Contract, Phase 6 Est Costs. xls9/28/2005

 

--------------------------------------------------------------------------------

 

Exhibit B (continued) - Thompson Creek Mine
Phase 6 Mine Plan Reserves by Mine Bench

 

 

 

Total

 

Phase 6

 

Total

 

Phase 6

 

 

 

 

 

Phase 6

 

Cumulative

 

Phase 6

 

Cumulative

 

 

 

 

 

Waste

 

Waste

 

Ore

 

Ore

 

Avg Ore Grade

 

Bench

 

(M tons)

 

(M tons)

 

(M tons)

 

(M tons)

 

(% Mo)

 

8050

 

856

 

856

 

—

 

—

 

 

 

8000

 

1,232

 

2,088

 

—

 

—

 

 

 

7950

 

1,478

 

3,566

 

—

 

—

 

 

 

7900

 

1,505

 

5,071

 

—

 

—

 

 

 

7850

 

1,541

 

6,612

 

—

 

—

 

 

 

7800

 

1,744

 

8,356

 

—

 

—

 

 

 

7750

 

1,950

 

10,306

 

—

 

—

 

 

 

7700

 

2,370

 

12,676

 

—

 

—

 

 

 

7650

 

3,029

 

15,705

 

—

 

—

 

 

 

7600

 

3,612

 

19,317

 

—

 

—

 

 

 

7550

 

3,352

 

22,669

 

—

 

—

 

 

 

7500

 

3,656

 

26,325

 

—

 

—

 

 

 

7450

 

3,673

 

29,998

 

—

 

—

 

 

 

7400

 

3,795

 

33,793

 

—

 

—

 

 

 

7350

 

3,833

 

37,626

 

—

 

—

 

 

 

7300

 

4,085

 

41,711

 

—

 

—

 

 

 

7250

 

3,729

 

45,440

 

—

 

—

 

 

 

7200

 

3,959

 

49,399

 

114

 

114

 

0.052

 

7150

 

3,504

 

52,903

 

457

 

571

 

0.058

 

7100

 

2,628

 

55,531

 

1,191

 

1,762

 

0.067

 

7050

 

1,469

 

57,000

 

2,135

 

3,897

 

0.067

 

7000

 

821

 

57,821

 

2,729

 

6,626

 

0.074

 

6950

 

400

 

58,221

 

3,042

 

9,668

 

0.092

 

6900

 

146

 

58,367

 

3,253

 

12,921

 

0.111

 

6850

 

—

 

58,367

 

3,196

 

16,117

 

0.127

 

6800

 

—

 

58,367

 

2,932

 

19,049

 

0.146

 

6750

 

—

 

58,367

 

2,860

 

21,909

 

0.167

 

6700

 

103

 

58,470

 

3,000

 

24,909

 

0.171

 

6650

 

104

 

58,574

 

2,645

 

27,554

 

0.184

 

6600

 

89

 

58,663

 

3,019

 

30,573

 

0.187

 

6550

 

118

 

58,781

 

1,551

 

32,124

 

0.191

 

6500

 

197

 

58,978

 

888

 

33,012

 

0.149

 

 

 

58,978

 

 

 

33,012

 

 

 

0.1333

 

 

August 2005#1, Sojitz Purchase Contract, Phase 6 Est Costs. xls9/28/2005

 

--------------------------------------------------------------------------------