Exhibit 10.1

 

Bunker Hill Mining Lease with Option to Purchase

 

THIS MINING LEASE (the “lease”), effective as of the 1st day of November, 2017
(the “Effective Date"), regardless of the actual times of signing and
acknowledgment, between Placer Mining Corporation, a Nevada corporation,
hereinafter called Lessor or Seller, and Liberty Silver Corp. a Nevada
Corporation, hereinafter called Lessee or Purchaser.

 

WITNESSETH:

 

ARTICLE 1.  DESCRIPTION OF THE PROPERTY. Lessor represents that it is the owner
of the property consisting of all that real property, mineral interests and
patented and unpatented lode mining claims situated in Shoshone County, Idaho,
further described and listed on Exhibit A, together with all tenements,
hereditaments, improvements, appurtenances, privileges and easements which are
located on such mining claims and/or parcels of real property, and/or used in
connection with and/or belong to Lessor in connection with exploring, mining,
treating, extracting, storing, shipping, removing and/or marketing minerals, and
all other interests associated with the property for the effective use and
operation of the mine (including without limitation all access rights, rights of
way, roads, haulways, leases, water rights and/or permits, all buildings,
structures, fixtures, underground fixtures, air flumes, all equipment (wherever
located), all personal property used in connection with mining, milling and/or
exploration for minerals, all timber and trees thereon, and all mining claims,
maps, reports and plans) (cumulatively such property is referred to herein as
the “Bunker Hill Mine” or the “Leased Premises”).

 

ARTICLE 2. GRANT OF LEASE AND PAYMENTS. Lessor hereby grants, demises, leases
and lets exclusively unto Lessee, its successors and assigns the Bunker Hill
Mine. Upon signing of this lease by all parties, the Lessee shall make a payment
of $100,000 to cover the maintenance expenses and upkeep of the mine for the
month of September, 2017. Lessor shall make a payment of $100,000 on October 1,
2017 to cover care and maintenance expenses and upkeep of the mine for the month
of October, 2017. The term of the lease shall begin on November 1, 2017 and on
or prior to that date, the Lessee shall make a payment of $200,000 for the
months of November, 2017 and December, 2017. Thereafter the Lessee shall make
the payments on a quarterly basis. For example, the Lessee shall pay Lessor a
quarterly payment of $300,000 on January 1, 2018, which shall cover the monthly
rent for the months of January, February and March of 2018. Said quarterly
payments shall begin on January 1, 2018 and continue throughout the term of the
lease. None of the lease payments or deposits shall be credited against the
purchase price.

 

Additionally, no later than November 15, 2017, the Lessee shall make a bonus
payment to Lessor of $500,000 and an additional bonus payment of $500,000 on
December 15, 2017. These latter payments shall be considered bonus payments and
not an advance against royalties or against a future purchase of the Bunker Hill
Mine.  

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ALL WIRE TRANSFERS TO LESSOR COMING FROM CANADA (OR ANY INTERNATIONAL LOCATION)
NEED TO BE INITIATED TWO BUSINESS DAYS PRIOR TO THE DUE DATE AND A WIRE
CONFIRMATION NUMBER SHALL BE FORWARDED TO THE LESSOR VIA EMAIL ON THE DATE OF
THE WIRE TRANSFER. ALL DOMESTIC BUSINESS WIRES TO LESSOR SHALL BE MADE ONE
BUSINESS DAY PRIOR TO THE DUE DATE AND A WIRE CONFIRMATION NUMBER SHALL BE
FORWARDED TO THE LESSOR VIA EMAIL ON THE DATE OF THE WIRE TRANSFER.

 

ARTICLE 3.  TERM OF LEASE. The primary term of the lease shall be twenty-four
months to begin on November 1, 2017 and end on October 31, 2019. Upon written
notice, which must be sent to Lessor at least thirty (30) days prior to the
expiration of the primary term in order to be effective, Lessee may extend this
lease for up to twelve months by paying to Lessor an additional bonus payment of
$600,000 and by continuing to pay the monthly payments of $100,000 per month.

 

ARTICLE 4. PURCHASE OPTION. For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Lessor hereby exclusively
grants to Lessee, its successors and assigns the right to purchase the Bunker
Hill Mine during the primary lease term and any extension thereto.

 

(a)Notice of Exercise. To exercise the purchase option, Lessee must give written
notice to the Lessor of its intent to exercise such purchase option. Lessor must
receive such notice 120 days prior to the date on which the Lessee intends to
close the purchase (the “Closing Date”). Lessee must also give similar written
notice to the U.S. Department of Justice and the U.S. Environmental Protection
Agency (“U.S. E.P.A.”) of its intention to exercise its purchase option. During
the period between the notification of exercise of the purchase option and the
closing date, the Lessee and Lessor shall to the best of their abilities prepare
all final documents necessary for closing (including a mortgage and note),
finalize and receive approval of the settlement agreement between the United
States and the Seller, and finalize and receive approval of a bona fide
prospective purchaser agreement/release of lien and covenant not to sue between
the United States and the Purchaser.  

 

(b)Exercise After Production is Initiated. In the event that Lessee is in
production for a minimum period of twelve months and at an average production
rate at or exceeding 500 tons per day Lessor may, upon thirty days written
notice to the Lessee, require the Lessee to exercise the purchase option. 

 

(c)Purchase Price. The agreed and binding purchase price for the Bunker Hill
Mine is $45,000,000.00 (Forty-Five Million Dollars) to be paid in accordance
with the following schedule: 

 

Date

Payment to Lessor

Payment to U.S. E.P.A.

On Closing

$4,000,000

$3,000,000

One year after closing

$3,000,000

$3,000,000

Two years after closing

$3,000,000

$3,000,000

Three years after closing

$3,000,000

$3,000,000

Four years after closing

$2,000,000

$3,000,000

Five years after closing

$1,670,000

$1,670,000

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Six years after closing

$1,670,000

$1,670,000

Seven years after closing

$1,670,000

$1,660,000

Eight years after closing

$1,670,000

 

Nine years after closing

$1,670,000

 

Ten years after closing

$1,650,000

 

 

 

 

Total

$25,000,000

$20,000,000

 

 

(d)Payments to U.S. E.P.A. The payments being made to the U.S. E.P.A. by
Lessee/Purchaser in the above table reflect the agreed settlement payments that
have been tentatively accepted by the U.S. Department of Justice and U.S.
E.P.A. 

 

(e)Classification of Payments. All of the tabulated payments in Article 4 (b)
above are considered by the Purchaser to be payments for the Bunker Hill Mine
purchase. The Seller considers the payments to be $25,000,000 for the purchase
of the Bunker Hill Mine, and $20,000,000 for settlement of past response costs
incurred by the United States in treatment of water outflows from the Bunker
Hill Mine. 

 

(f)The parties recognize that the financial terms of this option are enforceable
by Lessee/Purchaser.  Any subsequent purchase agreement by the parties shall
ultimately supersede this lease agreement upon exercise of the purchase option
and closing of the purchase. LESSOR AND LESSEE AGREE TO NEGOTIATE in good faith
AND COMPLETE ALL the remaining and unfinished TERMS OF THE PURCHASE agreement.
The terms of the payments are already negotiated and set out in this lease and
option agreement and shall remain the same in the final definitive purchase
agreement.  

 

(g)FOR CLARITY, “COMPLETION” IS CONSIDERED BY THE PARTIES TO MEAN THAT THE
DOCUMENT AND ALL EXHIBITS AND SUPPORTING DOCUMENTATION IS PREPARED SUCH THAT IN
EVENT THE PURCHASE OPTION IS EXERCISED, CLOSING OF THE PURCHASE COULD OCCUR
WITHIN FIVE BUSINESS DAYS. 

 

ARTICLE 5. PROPERTY PROVISIONS

 

(a) POSSESSION AND CONTROL OF PROPERTY. Lessee shall have, and it is hereby
given and granted, the right to enter upon and take over, at the beginning of
the primary term hereof, operational control and possession and of the Leased
Premises and the whole and every part thereof, and, during the term of this
lease, to remain in operational control and  possession thereof; to investigate,
measure, sample, examine, test, develop, work, mine, operate, use, manage and
control the same and the water and water rights appurtenant thereto; to mine,
extract and remove from said property the ores and minerals therein and
appurtenant and belonging thereto; to treat, mill, ship, sell or otherwise
dispose of the same and receive the full proceeds therefrom; and to erect,
construct, maintain, use and operate thereon and therein buildings, structures,
machinery and equipment, including milling, processing and tailings facilities.
 The time, nature, location and extent of such or any or all

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the above activities and mining or mining operations and the cessation and
resumption thereof shall be at the sole discretion of Lessee, and may include,
without limitation, underground or solution mining methods (but no open pit or
strip mining methods may be used) together with the right to use so much of the
surface as may be necessary, useful or convenient for the enjoyment of all
rights herein granted, including construction of ingress and egress into and out
of the underground workings, construction of a surface waste rock dump and a
tailings impoundment facility or facilities, if necessary, for development of
the Leased Premises.  Any surface mine waste dump or tailings impoundment
facilities constructed during the life of this lease shall be reclaimed to
industry standards by Lessee at lease termination unless the purchase option is
exercised. Lessee acknowledges that Lessor shall continue to have the rights to
ingress and egress both underground and on the surface of the Leased Premises
for purposes of conducting its own exploration and possible development of
mineral resources which Lessor continues to own and control. Each party agrees
to use best efforts to coordinate the activities of the parties to minimize
interference with the work-related activities of the other party. Lessee shall,
upon 72 hours notice by Lessor, ensure that the KT rail haulage is available for
ore haulage and other materials handling if so required by Lessor.

 

(b) UNPATENTED MINING CLAIM PAYMENTS. If applicable, during the lease term
Lessee shall be responsible for all mining claim fee payments to the U.S. Bureau
of Land Management (“BLM”) on all unpatented mining claims listed in Exhibit A
and any other unpatented mining claims acquired by Lessee during the lease
period. Lessee shall be responsible for the filing of all reports and forms with
BLM and with Shoshone County, Idaho during the lease term. Lessor shall remain
responsible for all taxes and fees on the patented mining claims and real
property during the term of the lease.

 

(c) DATA. Lessor and Lessee shall mutually make all data relating to the Leased
Premises available to each other, whether existing now or developed in the
future, which either party may copy or reproduce at their own expense.  Such
data shall include without limitation, in hard copy or electronic form, any and
all data and information relating to exploration, planning, mining, metallurgy,
processing, land, mineral rights, water rights, timber rights, permits, taxes,
claim fees and status, economic data or projections, geologic, geochemical and
geophysical data including reports, maps, sections and drill logs, core and/or
cuttings; any and all assays, analyses, reports, processes, trade secrets; and
any and all other data, records or reports relating to the Leased Premises.

 

(d) SCRAP MATERIALS – In the event any scrap material is removed from the mine
from the Lessee, Lessor retains ownership and shall receive any sale proceeds
from the disposition of scrap material which shall not be a credit to the lease
or purchase payments.

 

ARTICLE 6.  MANNER OF WORK. Lessee agrees to cause all work, development and
mining to be done in a careful and miner-like manner and to conform in all
respects to the mining laws and regulations of the United States and the State
of Idaho.

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ARTICLE 7.  ROYALTY PAYMENTS DURING THE LEASE PERIOD. Lessor hereby reserves and
Lessee hereby agrees to pay as a production royalty 3% of the Net Smelter Return
(as defined and accounted for in Article 8 below) of all ores or concentrates of
mineralized material mined and shipped from the Leased Premises (the "Lease
Production Royalty"). Lessor/Seller warrants and represents that no other
royalties are due to any other party from minerals produced from the Bunker Hill
Mine.

 

ARTICLE 8.  DEFINITION OF NET SMELTER ROYALTY

 

a)As used herein, "Net Smelter Return" means the amount paid by any smelter or
other ore purchaser for ores or concentrates sold less actual costs of
transportation and other costs in the course of handling, assumed by or charged
to Lessee/Purchaser (including freight, insurance and tax) in making shipments
from the Bunker Hill Mine to the smelter or other purchaser, less all charges
for refining, smelting, sampling, assaying, and penalties; less all royalties or
overriding royalties burdening the Bunker Hill Mine that exist on the date of
this lease or are created by Lessor/Seller after the date hereof; and less gross
production, severance, general property and other taxes attributable to
production from the Bunker Hill Mine. 

b)The Lease Production Royalty shall be accounted for and paid monthly to Lessor
within 30 days after the end of each calendar month within which the mineralized
materials are sold. All payments shall be accompanied by a statement explaining
the manner in which payment was calculated. No royalty shall be due or payable
on any mineralized material stockpiled on the Bunker Hill Mine until the sale or
disposition thereof. Within 90 days after receiving the above-described
statement of account, Lessor/Seller shall give notice of any objections to the
statement, for any reason, touching upon its accuracy or inaccuracy, by mailing
such objections to Lessee as provided in Article 25 below; and in default
thereof, any inaccuracies in such statement shall be deemed waived by
Lessor/Seller. 

c)Disputes Regarding Royalties. Lessor/Seller shall be deemed to have waived any
right the Lessor/Seller may have to object to the royalty settlement made by
Lessee/Purchaser for any calendar quarter, unless Lessor/Seller notifies
Lessee/Purchaser in writing of such objection within twelve (12) months after
such royalty is due.  If Lessor/Seller and Lessee/Purchaser are unable to
resolve the royalty settlement dispute by agreement within thirty (30) days
after Lessee/Purchaser's receipt of Lessor/Seller’s notice, the dispute shall be
resolved by arbitration, in accordance with the provisions of Article 23.  

d)Once the lessor exercise the purchase option, Placer shall be granted an Net
Smelter  Royalty which is payable only from production as it is described in the
LOI amended agreement between the parties dated March 29, 2017, and initialed by
Bob Hopper and John Ryan. 

 

 

ARTICLE 9.  TAILINGS AND BENEFICIATION

 

(a) Lessee shall have the right, but shall not be required, to beneficiate,
concentrate, and otherwise treat, in any manner, either wholly or in part at a
plant or plants on the Leased Premises (either on the surface or underground) or
on other lands, any mineralized material

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or other materials, including waste rock, which are mined or produced from the
Leased Premises. Such treatment shall be conducted in a careful and workmanlike
manner. The tailings and residue from such treatment shall be deemed waste and
may be deposited on the Leased Premises or on other lands.

 

ARTICLE 10.  LESSEE EXCLUSIONS/LESSOR MINING RIGHTS

 

(a)LESSEE EXCLUSIONS. The Lessee is excluded from mining or other activity in
the Caledonia Mine area and in the Crystal Stope Mine area. These areas shall
remain under the exclusive possession and control of the Lessor. 

 

(b)LESSOR MINING RIGHTS. Lessor is hereby granted the right, if it so desires,
to mine or remove from the areas listed herein in Exhibit B any ores, waste,
water and other materials existing therein or thereon or in any part thereof,
through or by means of shafts, tunnels, drifts, raises, or other openings, now
existing or installed by Lessor. Lessor may stockpile any ores, waste, or other
materials and/or concentrated products of ores or materials from the areas
listed herein in Exhibit B, upon agreed stockpile grounds situated upon nearby
property, not, however, preventing or interfering with the mining or removal of
ore from the Leased Premises by the Lessee.  If Lessee executes the purchase
option and Lessor is exploring, mining or developing properties thereto, Lessor
and Lessee agree that future activities of Lessor shall be governed by
provisions provided for in the Final Purchase Agreement. 

 

ARTICLE 11.  RECORDS, INSPECTION AND ACCESS TO LEASED PREMISES. Lessee's
engineering progress maps and all factual exploration, development and
production data including drill core and assay results (but excluding
interpretive information or data) from the Leased Premises shall be available
upon reasonable request for Lessor's inspection.  The Lessor may enter said
property at reasonable times for the purpose of inspecting the same or for the
purposes described in Articles 4(b) and 4(c), and Lessee shall facilitate such
inspection and entry in reasonable ways, but Lessor shall enter upon said Leased
Premises at Lessor's own risk and so as not to hinder unreasonably the
operations of Lessee; and the Lessor shall indemnify and hold harmless the
Lessee from any damage, claim or demand by reason of injury to or the presence
of the Lessor or the Lessor's agents, representatives, licensees, or guests on
the Leased Premises or approaches thereto.

 

ARTICLE 12.  TAXES. Lessor shall remain responsible for all taxes and fees on
the Leased Premises. Lessee shall pay, before they are delinquent, all taxes
levied or assessed against any or all personal property, machinery and equipment
placed upon the Leased Premises by the Lessee during the term of this lease.
 Lessee shall pay any severance tax and all other taxes that are now or may be
hereafter levied and computed on the amount or value of ores produced from the
Leased Premises.

 

ARTICLE 13.  STATE AND FEDERAL LAWS AND REGULATIONS.  Lessee shall comply with
the Workmen's Compensation laws of Idaho and with Social Security, Unemployment
Insurance and all other state and federal laws and regulations relating to
Lessee's

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operations and shall save Lessor harmless from any claim for damages or
liability by reason thereof.

 

ARTICLE 14.  PROTECTION FROM LIENS AND DAMAGES. Lessee shall keep the Leased
Premises and the whole and every part thereof free and clear of liens for labor
done or work performed upon the Leased Premises or materials furnished to it for
the development or operation thereof under this lease while the same is in force
and effect, and will save and hold harmless Lessor from all costs, losses or
damages which may arise by reason of injury to any persons employed by Lessee in
or upon the Leased Premises or any part thereof or which may arise by reason of
injury to any persons or damage to any property as the result of any work or
operations of the Lessee or of its possession and occupancy of the Leased
Premises.  A lien upon the property shall not constitute a default if the Lessee
in good faith disputes the validity of the claim, in which event the existence
of the lien shall constitute a default only from and after the validity of the
lien has been adjudicated.

 

ARTICLE 15. INSURANCE REQUIREMENTS. During the Lease term, Lessee shall pay for
and maintain commercial general liability insurance. This policy shall name
Lessor as an additional insured and shall insure Lessee’s activities and against
loss, damage or liability for personal injury or bodily injury (including death)
or loss or damage to property with a liability limit of not less than
$2,000,000.

 

ARTICLE 16.  FORCE MAJEURE. If Lessee is unable to perform any of the terms or
covenants of this lease by reason of damage or delay resulting from disaster,
labor disturbances, shortage of labor, strikes, lockouts, act of God, or from
any regulations or restrictions of any governmental agency, or on account of any
eventuality beyond the reasonable control of Lessee, including state and federal
environmental statute or regulation, Lessee shall be excused from performance
during the period of such prevention and the time for performance of such
obligations shall be extended for a period equal to the period or periods of
prevention. In the event Lessee or its purchaser of concentrates or crude ore
is, becomes or believes it is about to become subject, at any time, to
environmental regulations (which shall include any governmental law, rule,
order, regulation, policy, proposal or restriction relating to environmental
pollution) which will prohibit or materially affect any operation Lessee is
carrying out, or planning to carry out hereunder, Lessee shall have the right to
declare the existence of a condition of force majeure during the period in which
it is in good faith seeking a feasible method to comply with, be exempted from,
modify, obtain necessary permits or licenses under, or prevent the enactment or
promulgation of said environmental regulations.  Lessee agrees to use reasonable
diligence to remove causes of force majeure as may occur from time to time, but
shall not be required to settle strikes or other labor difficulties contrary to
its own judgment.

 

ARTICLE 17.  DEFAULT. The failure of Lessee to make or cause to be made any of
the material payments herein provided for or to keep or perform any material
agreement on its part to be kept or performed according to the terms and
provisions of this lease, shall, at the election of the Lessor, constitute an
event of default and grounds for termination of this Lease; provided, however,
that in the event of a default on the part of the Lessee, the Lessor shall give
to the Lessee a written notice of its intention to declare an event of default
of this lease and to terminate the same on account thereof, or of its intention
to take other action to enforce this lease,

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specifying the particular default or defaults relied upon by it, and Lessee
shall have a reasonable time (which in any case shall not be less than fifteen
(15) days) after receipt of such notice in which to cure such default or
defaults, in which event there shall be no default therefor, and no other action
may be taken for enforcement.  Lessee shall not dispute an event of default that
is a missed payment.  For any other default, if Lessee disputes that such
default occurred, it shall so advise Lessor in writing within fifteen (15) days
after receipt of the notice of default.  If, within fifteen (15) days
thereafter, the parties have not resolved the dispute by mutual agreement, the
issue of default shall then be submitted to arbitration under Article 23 below.
 In the event that Lessor does terminate this lease on account of a breach by
Lessee, Lessee shall be under no further obligation or liability hereunder to
Lessor from and after the date of such termination except for the performance of
obligations and the satisfaction of liabilities to Lessor or third parties or
respecting the Leased Premises which have accrued to the date of such
termination.

 

ARTICLE 18.  CANCELLATION. Notwithstanding any provision herein to the contrary,
Lessee may at any time upon 60 days’ written notice, cancel and terminate this
lease in its entirety.  Upon total cancellation and termination of this lease,
Lessee shall be under no further obligation of whatsoever kind or nature to the
Lessor except for the making of payments which have already accrued to the date
of such cancellation and termination, including governmental rental fees for
unpatented claims and for the payment of any royalties which are owed to the
Lessor for production during the term of the lease.

 

ARTICLE 19.  SURRENDER OF PROPERTY. In the event of a valid forfeiture,
cancellation, or other termination of this lease, Lessee shall surrender to
Lessor peaceable possession of the Leased Premises and at the written request of
Lessor shall deliver to the Lessor a written relinquishment hereof, together
with a copy, if requested by Lessor within thirty (30) days after termination of
this lease, of its engineering progress maps showing any workings made or
uncovered by Lessee on the Leased Premises.  The Lessee's factual exploration,
development and production data including drill core and assay results (but
excluding interpretive information or data) from the Leased Premises shall be
available upon request to the Lessor.

 

ARTICLE 20.  REMOVAL OF EQUIPMENT. Lessee shall have and is hereby given and
granted three (3) months after a valid forfeiture, cancellation or other
termination of this lease to remove from said property all mobile equipment and
personal property of the Lessee and its employees, consultants and contractors.
 If Lessee is hampered by snowdrifts, washouts, inclement weather, or other
climatic conditions from completing the removal of said property and equipment
within the time specified, then Lessor agrees to extend the time by a reasonable
period if requested by Lessee.

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ARTICLE 21. OTHER PAYMENTS DURING LEASE. In addition to lease payments, Lessee
agrees specifically to pay the following additional payments:

 

Payee

Amount ($)

Actual or Estimated

Frequency

 

 

 

 

United States EPA (water treatment)

$240,000

Estimated

Quarterly

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Mine (KT) Maintenance Crew

$33,000

Actual

Monthly

Robert Hopper

$4,000

Actual

Monthly

Thomas Hopper

$4,000

Actual

Monthly

Dave Kriederman

$4,000

Actual

Monthly

Avista (Electric Utilities)

$12,000

Estimated

Monthly

 

ARTICLE 22. ADDITIONAL COVENANTS.  

 

(a) Lessor hereby warrants and represents that as of the effective date of the
lease, the Bunker Hill Mine is free and clear of all liens, judgments and any
and all other interests that may adversely impact the rights and privileges of
Lessee hereunder (including without limitation Lessee’s right to purchase the
Leased Property), with the exception of the U.S. E.P.A. lien. Lessor further
represents and warrants that Lessor will not, during the term of the lease or
any extension thereto, take out any mortgage, deed of trust and/or take any
other action that could result in the Bunker Hill Mine (or any portion thereof)
being subject to a lien, judgment or any other interest that could impact or
impair the rights and privileges of Lessee hereunder.

 

(b) Lessor warrants and represents that the execution of the lease will not
result in a violation of any court order, any existing contract or any other
obligation of Lessor.

 

(c) Lessor shall indemnify, defend, and hold Lessee harmless from any and all
liability, claim, damage, loss, injury, expense, cause of action, dispute and
cost (including payment of attorney fees) that may arise from or relate to a
breach of any of Lessor’s representations, warranties or covenants in this
lease. Furthermore, Lessor shall indemnify, defend and hold Lessee harmless from
any and all liability, claim, damage, loss, injury, expense, cause of action,
dispute and cost (including payment of attorney fees) that may arise from or
relate to conduct of the Lessor.

 

(d) Lessee shall indemnify, defend, and hold Lessor harmless from any and all
liability, claim, damage, loss, injury, expense, cause of action, dispute and
cost (including payment of attorney fees) that may arise from or relate to a
breach of any of Lessee’s representations, warranties or covenants in this
lease. Furthermore, Lessee shall indemnify, defend and hold Lessor harmless from
any and all liability, claim, damage, loss, injury, expense, cause of action,
dispute and cost (including payment of attorney fees) that may arise from or
relate to conduct of the Lessee.

 

(e) The parties warrant and represent that they have the authority to enter into
this lease, and that the terms hereof are binding.

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ARTICLE 23.  ARBITRATION OF DISPUTES. Any controversy, dispute or claim arising
out of or from this lease, or alleged breach thereof, shall be settled by
arbitration pursuant to the Uniform Arbitration Act of the State of Idaho
(Sections 7-901, et. seq., Idaho Code) as amended and as in effect on the date
either party commences arbitration proceedings.  Said Act shall control the
substantive and procedural aspects of the proceedings unless otherwise agreed in
this lease.  Judicial review may be had pursuant to said Act.

 

(a) Proceedings shall be initiated by the complaining party serving upon the
other party a complaint, as would be done in court proceedings.  The allegations
regarding the circumstances giving rise to the issues to be arbitrated shall be
stated in detail and with particularity.  The party upon whom the complaint is
served shall answer or otherwise respond with a pleading just as is required by
the Idaho Rules of Civil Procedure for a court action.  Except, however, the
response shall be served upon the initiating party within 30 days from the date
of service of the complaint.

 

(b) The parties shall agree upon an arbitrator, who is neutral, competent and
willing to serve and, if possible, who has experience in cases involving mining
and mining contracts.  Should the parties fail to reach agreement on appointment
of an arbitrator within 20 days from the date proceedings are initiated, either
party may apply to the court for appointment of an arbitrator who meets the
criteria set forth herein pursuant to the provisions of section 7-903 Idaho
Code.

 

(c) Prehearing discovery shall not be allowed except upon order of the
arbitrator for good cause shown, the parties being in agreement that the expense
and time associated with discovery should be minimized, and that this desire
should, however, be balanced against the need for each party to be able to
effectively present its case.

 

(d) Each party to the arbitration proceedings shall bear one-half of the
arbitrator's fees and expenses, which shall be promptly paid by each party
monthly within 15 days from the submission by the arbitrator to the parties of
his/her reasonably detailed and itemized statement for services rendered, which
statement shall be submitted by the arbitrator at the end of each month.

 

(e) Each party shall bear its own attorney's fees and costs of litigation for
the proceedings before the arbitrator.  This subparagraph (e) is not applicable
to court proceedings, in which event the parties recognize that applicable law
shall govern and the matter will be decided by the court.

 

ARTICLE 24.  RECORDATION OF SHORT FORM NOTICE.  Lessee and Lessor agree to
execute short-form notices of this lease and production royalties, as
applicable, which notice shall be for purposes of recordation in the real
property records of Shoshone County, Idaho.

 

ARTICLE 25.  NOTICES. Any notices required or permitted to be given to the
Lessor hereunder shall be considered as delivered forty-eight (48) hours after
the same shall have been deposited in the United States mail, duly registered,
with postage thereon prepaid.  All notices given hereunder shall be addressed to
the respective addresses given below:

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If to Lessee:

 

Liberty Silver Corp.

c/o John Ryan

P.O. Box 57

Kellogg, Idaho 83837

 

With a copy to:

 

Luke O’Dowd

Lyons O’Dowd PLLC

P.O. Box 131

Coeur d’Alene, Idaho 83816

 

and if to Lessor:

 

Placer Mining Corp.

1 Mine Road

Kellogg, Idaho 83837

 

With a copy to:

 

James McMillan PLLC

415 7th Street #7

Wallace, Idaho 83873

 

 

Said addresses for receiving notices may be changed by either party upon five
(5) days previous notice to the other party.

 

ARTICLE 26.  INUREMENT. These presents shall inure to the benefit of and be
binding upon the respective heirs, executors, administrators, successors and
assigns of the parties hereto.

 

ARTICLE 27. ASSIGNMENT.  The rights of either party hereunder may be assigned in
whole or in part and the provisions hereof shall extend to their successors and
assigns, but no change or division in ownership of the Bunker Hill Mine or the
Lease Production Royalty or the Production Royalty, however accomplished, shall
operate to enlarge the obligations or diminish the rights of either party under
this lease. Lessee shall have the right to subcontract with others for the
performance of exploration, development and mining work hereunder, subject to
all of the terms of this lease, but no such subcontract shall relieve Lessee of
its obligations to Lessor hereunder.

 

ARTICLE 27.  CONSTRUCTION. Titles to the respective articles hereof shall not be
deemed a part of this lease but shall be regarded as having been used for
convenience only.

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ARTICLE 28 The terms and rights of the lessor which are granted in the current
LOI are to remain in effect through the term of this lease and after the
exercise of the purchase option.

The land package as described (i.e., Kurt Hoffman) in the current LOI Schedule ?
shall remain in effect.

 

IN WITNESS WHEREOF, the parties hereto have executed this lease as of the day
and year first above written.

 

LESSOR

 

Placer Mining Corporation

 

/s/ Robert Hopper                             

By Robert Hopper, President

 

 

STATE OF IDAHO )  

        )  ss.  

COUNTY OF SHOSHONE)  

 

On this 17th day of August, 2017, before me, _____________, the undersigned, a
Notary Public in and for the State of Idaho, personally appeared Robert Hopper,
known to me to be the President of Placer Mining Corporation, and whose name is
subscribed to the within instrument, and acknowledged to me that he executed the
same on behalf of said corporation.

 

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.

 

____________________________

Notary Public for Idaho

Residing at ___________________

My Commission expires ________________________

 

LESSEE:

 

Liberty Silver Corp.

 

By /s/ Bruce Reid                                          

    Bruce Reid, Chief Executive Officer

 

STATE OF IDAHO)  

) ss.  

COUNTY OF SHOSHONE)  

 

On this 17th day of August, 2017, before me, ________________, the undersigned,
a Notary Public in and for the __________________________, personally appeared,
Bruce Reid, who

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13

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stated to me to be the Vice President of Liberty Silver Corp., and whose name is
subscribed to the within instrument, and acknowledged to me that he executed the
same on behalf of said corporation.

 

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.

 

______________________

Notary Public for

Residing at

My Commission expires _____________________

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EXHIBIT A

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Picture 1 [liberty_ex10z11.jpg] 

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Picture 2 [liberty_ex10z12.jpg] 

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Picture 3 [liberty_ex10z13.jpg] 

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Picture 4 [liberty_ex10z14.jpg] 

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Picture 5 [liberty_ex10z15.jpg] 

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Picture 6 [liberty_ex10z16.jpg] 

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Picture 7 [liberty_ex10z17.jpg] 

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Picture 8 [liberty_ex10z18.jpg] 

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Picture 9 [liberty_ex10z19.jpg] 

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Picture 10 [liberty_ex10z110.jpg] 

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Picture 11 [liberty_ex10z111.jpg] 

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26

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Picture 12 [liberty_ex10z112.jpg] 

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Picture 13 [liberty_ex10z113.jpg] 

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Picture 14 [liberty_ex10z114.jpg] 

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Picture 15 [liberty_ex10z115.jpg] 

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Picture 16 [liberty_ex10z116.jpg] 

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Picture 17 [liberty_ex10z117.jpg] 

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Picture 18 [liberty_ex10z118.jpg] 

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Picture 19 [liberty_ex10z119.jpg] 

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Picture 20 [liberty_ex10z120.jpg] 

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35

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Picture 21 [liberty_ex10z121.jpg] 

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36

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Picture 22 [liberty_ex10z122.jpg] 

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37

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Picture 23 [liberty_ex10z123.jpg] 

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38

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Picture 24 [liberty_ex10z124.jpg] 

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Picture 25 [liberty_ex10z125.jpg] 

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Picture 26 [liberty_ex10z126.jpg] 

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Picture 27 [liberty_ex10z127.jpg] 

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42

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Picture 28 [liberty_ex10z128.jpg] 

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43

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Picture 29 [liberty_ex10z129.jpg] 

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Picture 30 [liberty_ex10z130.jpg] 

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Picture 31 [liberty_ex10z131.jpg] 

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Picture 32 [liberty_ex10z132.jpg] 

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EXHIBIT B

 

INSERT AREAS TO BE ACCESSED/MINED BY PLACER DURING LEASE PERIOD

 

 

The following areas may be accessed and mined by Placer Mining Corporation
during the lease period and are excluded from the purchase option:

 

1.The Crystal Vug Stope, 

2.The East Hanging Wall target of the historic Caledonia Mine, and 

3.The Silver Ridge Claims. 

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