EXHIBIT 10.1

EXPLORATION, DEVELOPMENT AND MINE OPERATING AGREEMENT

This Agreement is made effective as of March 9, 2009 (“Effective Date”) between
MGC RESOURCES INC., a Nevada corporation, whose address for the purpose of this
agreement is 600 Lola Street Suite 10, Helena, Montana 59601 (“MGC”), and
BARRICK GOLD EXPLORATION INC., a Delaware corporation with an office at 293
Spruce Road, Elko, Nevada 89801 (“Barrick”).

RECITALS

A.        MGC owns record title to or holds a leasehold or other contractual
interest in certain fee lands and unpatented mining claims and millsites in
Pershing County, State of Nevada, which properties are described in Exhibit A
and defined in Exhibit C (the “Properties”).

B.        MGC desires to grant exclusively to Barrick all of MGC’s rights to
explore, to develop and to exercise all other uses of the Properties incident to
the exploration and development thereof, including without limitation, the
reclamation of the Properties.

C.        MGC further desires to grant to Barrick an exclusive right to earn an
interest in and to enter into a joint venture with MGC for the purposes of
developing and, if justified, mining of mineral resources within the Properties,
all as set forth in this Agreement.

D.        Barrick desires to explore, to develop, and to exercise all other uses
of the Properties incident to the exploration thereof, including without
limitation, the reclamation of the Properties.

E.        Barrick further desires to earn an interest in and to enter into a
joint venture with MGC for the purposes of developing and, if justified, mining
of mineral resources within the Properties, all as set forth in this Agreement.

NOW THEREFORE, in consideration of the covenants and conditions contained
herein, MGC and Barrick agree as follows:

ARTICLE I

DEFINITIONS AND CROSS-REFERENCES

A.        Definitions. The terms defined in Exhibit C and elsewhere shall have
the defined meaning wherever used in this Agreement, including in Exhibits.

B.        Cross-References. References to “Exhibits,” “Articles,” “Sections” and
“Subsections” refer to Exhibits, Articles, Sections and Subsections of this
Agreement. References to “Paragraphs” and “Subparagraphs” refer to paragraphs
and subparagraphs of the referenced Exhibits.

 

 

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

C.        Interpretation. Use of the word “including” in this Agreement shall
mean “including without limitation.”

ARTICLE II

NAME, PURPOSES AND TERM

D.        General. MGC and Barrick hereby enter into this Agreement for the
purposes hereinafter stated. All of the rights and obligations of the
Participants in connection with the Assets, the Area of Interest and all
Operations shall be subject to and governed by this Agreement.

E.        Name. If the Participants elect to enter into a joint venture as
provided in Section 5.4, the Assets shall be managed and operated by the
Participants under the name of the Spring Valley Venture. The Manager shall
accomplish any registration required by applicable assumed or fictitious name
statutes and similar statutes.

F.        Purposes. This Agreement is entered into for the following purposes
and for no others, and shall serve as the exclusive means by which each of the
Participants accomplishes such purposes:

 

1.

to conduct Exploration on the Properties or within the Area of Interest,

 

2.

to acquire additional interests in the Properties or within the Area of
Interest.

 

3.

to evaluate the possible Development and Mining of the Properties, and, if
justified, to engage in Development and Mining,

 

4.

to engage in Operations on the Properties,

 

5.

to engage in marketing Products, to the extent provided by Article XI,

 

6.

to complete and satisfy all Environmental Compliance obligations and Continuing
Obligations affecting the Properties, and

 

7.

to perform any other activity necessary, appropriate, or incidental to any of
the foregoing.

G.        Limitation. Unless the Participants otherwise agree in writing, the
Operations shall be limited to the purposes described in Section 2.3, and
nothing in this Agreement shall be construed to enlarge such purposes or to
change the relationships of the Participants as set forth in Article IV.

H.        Term. Unless earlier terminated as provided herein, the term of this
Agreement shall be for 20 years from the Effective Date and for so long
thereafter as Products are produced from the Properties on a continuous basis,
and thereafter until all materials, supplies, equipment and infrastructure have
been salvaged and disposed of, any required Environmental Compliance

 

2

 

 

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

is completed and accepted and the Participants have agreed to a final
accounting, unless this Agreement is earlier terminated as herein provided. For
purposes hereof, Products shall be deemed to be produced from the Properties on
a “continuous basis” so long as production in commercial quantities is not
halted for more than 365 consecutive days.

ARTICLE III

REPRESENTATIONS AND WARRANTIES; TITLE TO ASSETS; INDEMNITIES

I.              Representations and Warranties of Both Participants. As of the
Effective Date, each Participant warrants and represents to the other that:

 

1.

it is a corporation duly organized and in good standing in its state of
incorporation and is qualified to do business and is in good standing in those
states where necessary in order to carry out the purposes of this Agreement;

 

2.

it has the capacity to enter into and perform this Agreement and all
transactions contemplated herein and that all corporate, board of directors,
shareholder, surface and mineral rights owner, lessor, lessee and other actions
required to authorize it to enter into and perform this Agreement have been
properly taken;

 

3.

it will not breach any other agreement or arrangement by entering into or
performing this Agreement;

 

4.

it is not subject to any governmental order, judgment, decree, debarment,
sanction or Laws that would preclude the permitting or implementation of
Operations under this Agreement; and

 

5.

this Agreement has been duly executed and delivered by it and is valid and
binding upon it in accordance with its terms. ; provided, however, that no
representation is made as to (i) the remedy of specific performance or other
equitable remedies for the enforcement of this Agreement or any other agreement
contemplated hereby or (ii) rights to indemnity under this Agreement for
securities law liability, and this representation is limited by applicable
bankruptcy, insolvency, moratorium, and other similar laws affecting generally
the rights and remedies of creditors and secured parties.

J.            Representations and Warranties of MGC. As of the Effective Date,
MGC makes the following representations and warranties to Barrick:

 

1.

With respect to those Properties MGC owns in fee simple, if any, except as
otherwise set forth in Exhibit A, MGC is in exclusive possession of such
Properties and owns such Properties free and clear of all Encumbrances or
defects in title arising by, through or under MGC except those specifically
identified in Exhibit A.

 

3

 

 

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

 

2.

With respect to those Properties in which MGC holds an interest under the Mining
Leases or other contracts: (i) MGC is in exclusive possession of such
Properties, except as otherwise set forth in Exhibit A; (ii) MGC has not
received any notice of default of any of the terms or provisions of such Mining
Leases and other contracts; (iii) MGC has the authority under such Mining Leases
or other contracts to perform fully its obligations under this Agreement;
(iv) to MGC’s knowledge, such Mining Leases and other contracts are valid and
are in good standing; (v) MGC has no knowledge of any act or omission or any
condition on the Properties which could be considered or construed as a default
under any such Mining Leases or other contracts; and (vi) to MGC’s knowledge,
such Properties are free and clear of all Encumbrances or defects in title
arising by, through, or under MGC except for those Encumbrances specifically
identified in Exhibit A.

 

3.

MGC has delivered to or made available for inspection by Barrick all Existing
Data in its possession or control, and true and correct copies of all leases or
other contracts relating to the Properties.

 

4.

With respect to unpatented mining claims and millsites located by MGC (the “MGC
Located Claims”) that are included within the Properties, as identified in
Exhibit A, except as provided in Exhibit A and subject to the paramount title of
the United States: (i) the unpatented mining claims were properly laid out and
monumented; (ii) all required location and validation work was properly
performed; (iii) location notices and certificates were properly recorded and
filed with appropriate governmental agencies; (iv) all assessment work required
to hold the unpatented mining claims has been performed and all Governmental
Fees have been paid in a manner consistent with that required of the Manager
pursuant to Subsection 8.2(k) as required to hold the MGC Located Claims through
the assessment year ending September 1, 2009; (v) all affidavits of assessment
work, evidence of payment of Governmental Fees, and other filings required to
maintain the claims in good standing have been properly and timely recorded or
filed with appropriate governmental agencies; (vi) the claims are free and clear
of Encumbrances or defects in title arising by, through, or under MGC; and
(vii) MGC has no knowledge and has not been notified by a third party of
conflicting mining claims held or asserted by third parties. Nothing in this
Subsection, however, shall be deemed to be a representation or a warranty that
any of the MGC Located Claims contains a valuable mineral deposit or that the
MGC Located Claims constitute a compact group of contiguous claims free of
interior gaps or fractions.

 

5.

With respect to unpatented mining claims and millsites not located by MGC (the
“MGC Acquired Claims”) but which are included within the Properties, as
identified in Exhibit A, except as provided in Exhibit A and subject to the
paramount title of the United States: (i) all assessment work required to hold
the unpatented mining claims has been performed and all Governmental Fees have

 

4

 

 

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

been paid in a manner consistent with that required of the Manager pursuant to
Subsection 8.2(k) as required to hold the MGC Acquired Claims through the
assessment year ending September 1, 2009; (ii) all affidavits of assessment
work, evidence of payment of Governmental Fees, and other filings required to
maintain the claims in good standing have been properly and timely recorded or
filed with appropriate governmental agencies; (iii) the claims are free and
clear of Encumbrances or defects in title arising by, through, or under MGC; and
(iv) MGC has no knowledge and has not been notified by a third party of
conflicting mining claims. Nothing in this Subsection, however, shall be deemed
to be a representation or a warranty that any of the MGC Acquired Claims
contains a valuable discovery of minerals, or that the MGC Acquired Claims
constitute a compact group of contiguous claims free of interior gaps or
fractions.

 

6.

With respect to the Properties, except as set forth in Exhibit A, to MGC’s
knowledge, there are no pending or threatened actions, suits, claims or
proceedings, and there have been no previous transactions pertaining to the
Properties to which MGC was a party which have not been for fair consideration.

 

7.

Except as to matters otherwise disclosed in writing (whether transmitted
electronically, by facsimile, by courier, by mail, or in person) to Barrick
prior to the Effective Date,

(i)        to MGC’s knowledge, the conditions existing on or with respect to the
Properties and its ownership and operation of the Properties are not in
violation of any Laws (including without limitation any Environmental Laws), nor
causing or permitting any damage (including Environmental Damage, as defined
below) or impairment to the health, safety, or enjoyment of any person at or on
the Properties or in the general vicinity of the Properties, other than as may
be allowed under the Existing Permits;

(ii)       to MGC’s knowledge, there have been no past violations by it or by
any of its predecessors in title of any Environmental Laws or other Laws
affecting or pertaining to the Properties, nor any past creation of damage or
threatened damage to the air, soil, surface waters, groundwater, flora, fauna,
or other natural resources on, about or in the general vicinity of the
Properties (“Environmental Damage”), other than as may be allowed under the
Existing Permits; and

(iii)      MGC has not received inquiry from or notice of a pending
investigation from any governmental agency or of any administrative or judicial
proceeding concerning the violation of any Laws.

 

5

 

 

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

The representations and warranties set forth above shall survive the execution
and delivery of any documents of Transfer provided under this Agreement. For a
representation or warranty made to a Participant’s “knowledge,” the term
“knowledge” shall mean actual knowledge on the part of the officers, employees,
and agents of the representing Participant or of facts that would reasonably
lead to the indicated conclusions, without independent inquiry.

K.        Disclosures. Each of the Participants represents and warrants that it
is unaware of any material facts or circumstances that have not been disclosed
in this Agreement, which should be disclosed to the other Participant in order
to prevent the representations and warranties in this Article from being
materially misleading. MGC has disclosed to Barrick all information it
reasonably believes to be relevant concerning the Assets and has provided to or
made available for inspection by Barrick all such information, but does not make
any representation or warranty, express or implied, as to the accuracy,
reliability or completeness of the information (except as provided in Section
3.2) or as to the boundaries or value of the Assets. Each Participant represents
to the other that in negotiating and entering into this Agreement it has relied
solely on its own appraisals and estimates as to the value of the Assets and any
mineral potential or mineralization associated therewith, and upon its own
geologic and engineering interpretations related thereto.

L.        Record Title. Until Barrick has earned its interest in the Properties
as provided in Section 5.3, title to the Assets shall be held by MGC. If the
Participants enter into a joint venture as provided in Section 5.4, title to the
Assets shall be held by the Participants as tenants in common, subject to the
terms and conditions of this Agreement, as their Participating Interests are
determined pursuant to this Agreement.

M.       Loss of Title. Prior to the time that Barrick has completed its Initial
Contribution, any failure or loss of title to the Assets caused by the gross
negligence or willful misconduct of Barrick, and all costs associated therewith,
shall be borne solely by Barrick and not included in Exploration Expenditures.
All costs of curing or defending title to the Assets with respect to claims
asserted or litigation commenced during the Exploration Period shall be borne by
Barrick and may be included in Exploration Expenditures. Any costs of curing or
defending title to the Assets relating to claims asserted or litigation
commenced prior to the Effective Date shall be borne solely by Midway. Upon
completion of Barrick’s Initial Contribution, any failure or loss of title to
the Assets, and all costs of defending title, shall be charged to the Business
Account, except that throughout the term of this Agreement all costs and losses
arising out of or resulting from breach of the representations and warranties of
MGC as to title shall be charged to MGC.

N.        Royalties, Production Taxes and Other Payments Based on Production.
All required payments of production royalties, taxes based on production of
Products, and other payments out of production to private parties and
governmental entities shall be determined and made by the Manager on behalf of
each Participant in proportion to its Participating Interest, and charged
against each Participant’s interest in the production of Products.

 

6

 

 

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

 

O.

Indemnities/Limitation of Liability.

 

1.

Each Participant shall defend, indemnify and hold the other Participant, its
directors, officers, employees, agents and attorneys, and Affiliates
(collectively “Indemnified Participant”) harmless from and against the entire
amount of any Material Loss. A “Material Loss” shall mean all costs, expenses,
damages or liabilities, including reasonable attorneys’ fees and other costs of
litigation (either threatened or pending) arising out of or based on a breach by
a Participant (“Indemnifying Participant”) of any representation, warranty or
covenant contained in this Agreement, including without limitation:

(iv)      any Material Loss arising out of Operations conducted by it during the
Exploration Period;

(v)       any action taken for or obligation or responsibility assumed on behalf
of the other Participant, its directors, officers, employees, agents and
attorneys, or Affiliates by a Participant, any of its directors, officers,
employees, agents and attorneys, or Affiliates, in violation of Section 4.1;

(vi)      failure of a Participant or its Affiliates to comply with the
non-compete or provisions of Section 12.6;

(vii)     failure of a Participant or its Affiliates to comply with the
preemptive right under Section 15.3 and Exhibit G.

A Material Loss shall not be deemed to have occurred until, in the aggregate, an
Indemnified Participant incurs losses, costs, damages or liabilities in excess
of Two Hundred Thousand Dollars ($200,000.00) relating to breaches of
warranties, representations and covenants contained in this Agreement.

 

2.

If any claim or demand is asserted against an Indemnified Participant in respect
of which such Indemnified Participant may be entitled to indemnification under
this Agreement, written notice of such claim or demand shall promptly be given
to the Indemnifying Participant. The Indemnified Participant’s failure to
provide such notice promptly, however, shall not relieve the Indemnifying
Participant of any of its obligations under this Section 3.7 unless the
Indemnifying Participant is materially prejudiced by such failure. At the
request of any Indemnified Participant, the Indemnifying Participant shall
defend the Indemnified Participant against any Liabilities for which the
Indemnifying Participant is required to indemnify and hold harmless the
Indemnified Parties pursuant to the indemnity provisions set forth in this
Agreement. Subject to the Indemnified Participant’s approval, which shall not be
unreasonably withheld, delayed or conditioned, the Indemnifying Participant
shall retain legal counsel for the purpose of defending any Indemnified
Participant in such suit or action. The Indemnified Participant

 

7

 

 

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

shall have the right to retain legal counsel, at its expense, to participate in
the defense of any such suit or action. No such suit or action shall be settled,
discontinued, nor shall judgment be permitted to be entered without the written
consent of the Indemnified Participant, which consent shall not be unreasonably
withheld, delayed or conditioned. Any damages to the assets or business of the
Indemnified Participant caused by a failure by the Indemnifying Participant to
defend, compromise, or settle a claim or demand in a reasonable and expeditious
manner requested by the Indemnified Participant, after the Indemnifying
Participant has given notice that it will assume control of the defense,
compromise, or settlement of the matter, shall be included in the damages for
which the Indemnifying Participant shall be obligated to indemnify the
Indemnified Participant. Any settlement or compromise of a matter by the
Indemnifying Participant shall include a full release of claims against the
Indemnified Participant which has arisen out of the indemnified claim or demand.

ARTICLE IV

RELATIONSHIP OF THE PARTICIPANTS

P.        No Partnership. Nothing contained in this Agreement shall be deemed to
constitute either Participant the partner or the venturer of the other, or,
except as otherwise herein expressly provided, to constitute either Participant
the agent or legal representative of the other, or to create any fiduciary
relationship between them. The Participants do not intend to create, and this
Agreement shall not be construed to create, any mining, commercial or other
partnership or joint venture. Neither Participant, nor any of its directors,
officers, employees, agents and attorneys, or Affiliates, shall act for or
assume any obligation or responsibility on behalf of the other Participant,
except as otherwise expressly provided herein, and any such action or assumption
by a Participant’s directors, officers, employees, agents and attorneys, or
Affiliates shall be a breach by such Participant of this Agreement. The rights,
duties, obligations and liabilities of the Participants shall be several and not
joint or collective. Each Participant shall be responsible only for its
obligations as herein set out and shall be liable only for its share of the
costs and expenses as provided herein, and it is the express purpose and
intention of the Participants that their ownership of Assets and the rights
acquired hereunder shall be as tenants in common.

Q.        Federal Tax Elections and Allocations. The Participants elect to be
excluded from Subchapter K of Section 761(a) of the United States Internal
Revenue Code of 1986, as amended. The Participants shall make such filings as
are required to exclude the Business from Subchapter K and shall report their
shares of tax items of the Business in a manner consistent with an election out
of Subchapter K.

R.        State Income Tax. To the extent permissible under applicable law, the
relationship of the Participants shall be treated for state income tax purposes
in the same manner as it is for federal income tax purposes.

 

8

 

 

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

S.        Other Business Opportunities. Except as expressly provided in this
Agreement, each Participant shall have the right to engage in and receive full
benefits from any independent business activities or operations, whether or not
competitive with the Business, without consulting with, or obligation to, the
other Participant. The doctrines of “corporate opportunity” or “business
opportunity” shall not be applied to the Business nor to any other activity or
operation of either Participant. Neither Participant shall have any obligation
to the other with respect to any opportunity to acquire any property outside the
Area of Interest at any time, or, except as otherwise provided in Section 12.6,
within the Area of Interest after the termination of the Agreement. Unless
otherwise agreed in writing, neither Participant shall have any obligation to
mill, beneficiate or otherwise treat any Products in any facility owned or
controlled by such Participant.

T.        Waiver of Rights to Partition or Other Division of Assets. The
Participants hereby waive and release all rights of partition, or of sale in
lieu thereof, or other division of Assets, including any such rights provided by
Law.

U.        Transfer or Termination of Rights to Properties. Except as otherwise
provided in this Agreement, neither Participant shall Transfer all or any part
of its interest in the Assets or this Agreement or otherwise permit or cause
such interests to terminate.

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

W.       No Third Party Beneficiary Rights. This Agreement shall be construed to
benefit the Participants and their respective successors and assigns only, and
shall not be construed to create third party beneficiary rights in any other
party or in any governmental organization or agency.

ARTICLE V

CONTRIBUTIONS BY PARTICIPANTS

X.        Exploration Rights and Obligations. During the Exploration Period and
subject to Barrick making the Exploration Expenditures as provided in Section
5.2, MGC grants to Barrick the exclusive right to conduct Exploration on the
Properties and the option to earn an undivided sixty percent (60%) interest in
the Properties.

 

1.

Except as to the first year’s Exploration Expenditures, which is a firm
commitment, and subject to Barrick incurring the minimum required annual
Exploration Expenditures under Section 5.2 below, Barrick shall have the sole
right to determine the nature, timing, scope, extent and method of all
Operations during the Exploration Period, without any obligation to hold
meetings of the Management Committee, to prepare Programs and Budgets for
review, comment or approval by MGC, or to obtain the approval or consent of MGC
or the Management Committee. Barrick shall conduct all such Operations in a
manner consistent with the standards set forth in the first sentence of
Section 8.3, and in

 

9

 

 

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

conducting such Operations Barrick shall be required to fulfill all of the
applicable obligations of the Manager set forth in Subsections 8.2(c), (e), (f),
(g(i)), and (q). In addition, until Barrick has completed its Initial
Contribution it shall not be entitled (without MGC’s prior written consent) or
required to perform the activities described in Subsections 8.2(g), (i), and (l)
that would otherwise require consent of the Management Committee or of both
participants as applicable. For all such Operations, Barrick shall provide for
accrual of reasonably anticipated Environmental Compliance expenses, which may
be included as Exploration Expenditures, and upon completion of its Initial
Contribution, Barrick shall transfer any accrued but unexpended amounts to the
Environmental Compliance Fund established under Paragraph 2.14 of Exhibit B.
Prior to completion of its Initial Contribution, Barrick, in lieu of any
reporting requirements under Section 8.2, shall:

(i)        within 60 days following each anniversary of the Effective Date,
provide MGC with a reasonably detailed written report of all Operations
conducted during the preceding Agreement year, with a copy of all data, in
digital format, including PDF, JPG, ASCII, DXF, Access, Excel, PowerPoint
software/file formats copied to an Annual, Comprehensive Project Data update CD
or DVD. The annual report will also include a statement of Exploration
Expenditures incurred during the annual period in question (as well as such
back-up information as is reasonably necessary for MGC to confirm the reported
amounts and nature of the reported Exploration Expenditures) and a summary of
the upcoming year’s planned Operations;

(ii)       provide MGC with quarterly update reports, including all material
data received during the period, including assays, drill logs and drill hole
locations within thirty (30) days following the end of each calendar quarter,
which shall include a current estimate of Exploration Expenditures incurred; and

(iii)      make available for inspection and copying by MGC when reasonably
requested by MGC all factual data and information and interpretive reports,
studies and analyses concerning the Properties, and make all core and other
samples available for inspection by MGC.

Barrick makes no representation or warranty, express or implied, as to the
accuracy of the data and information provided to MGC in accordance with (i),
(ii) and (iii) above, but does represent and warrant that the data and
information will be complete, in a form that can be independently verified as
per industry standards and timely, and will consist of all of the material data
and information available for the periods covered.

 

2.

MGC shall provide Barrick with written notice of any exceptions it may have to
the annual statement of Exploration Expenditures submitted to it as provided

 

10

 

 

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

above within three months after receipt of the statement. Failure to provide
such notice within the three-month period shall constitute acceptance by MGC of
the stated Exploration Expenditures. During that three-month period, as
reasonably requested by MGC, Barrick shall make available to MGC and its
representatives all back-up data and information used by Barrick to calculate
the reported Exploration Expenditures, in order to allow MGC to confirm the
amounts and nature of the reported Exploration Expenditures. If MGC identifies
any shortfall in Exploration Expenditures for an annual period, it shall notify
Barrick, and the amount of any such shortfall shall be paid by Barrick to MGC
within 30 days after Barrick’s receipt of such notice.

 

3.

During the Exploration Period, MGC and its representatives, at MGC’s sole risk
and expense, shall have the right, exercisable during regular business hours, at
a mutually convenient time, and in a reasonable manner conforming to Barrick’s
safety rules and regulations and so as not to unreasonably interfere with
Barrick’s operations, to go upon the Properties for the purpose of inspecting
those Operations and confirming that Barrick is conducting its Operations in the
manner required by this Agreement.

 

4.

Barrick and MGC each agrees to carry such insurance, covering its respective
employees conducting Operations at or on the Properties for Barrick, and will
fully comply with the requirements of the statutes of the State of Nevada
pertaining to worker’s compensation and occupational disease and disabilities as
are now in force or as may be hereafter amended or enacted. In addition, during
the Exploration Period, Barrick agrees to comply with the insurance standards
set forth in Exhibit F.

 

Y.

Barrick’s Obligations During the Exploration Period.

 

1.

During the Exploration Period, to maintain its option to earn a 60% interest in
the Properties under this Agreement, Barrick shall incur the amounts of
Exploration Expenditures by the dates set forth below. The obligation to incur
at least $4,000,000 in Exploration Expenditures during the first period
beginning on Effective Date and ending on December 31, 2009 is a firm
commitment. In subsequent periods, Barrick is not obligated to make any
additional Exploration Expenditures.

Date

Exploration Expenditures

Aggregate

By December 31, 2009

$ 4,000,000

$ 4,000,000

By December 31, 2010

$ 5,000,000

$ 9,000,000

By December 31, 2011

$ 7,000,000

$ 16,000,000

By December 31, 2012

$ 7,000,000

$ 23,000,000

By December 31, 2013

$ 7,000,000

$ 30,000,000

 

 

11

 

 

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

 

 

2.

At its sole discretion, if Barrick has timely incurred the required amounts of
Exploration Expenditures to earn a 60% interest in the Properties, then Barrick
will have the exclusive option to earn an additional 10% interest in the
Properties (70% total) by incurring an additional $8,000,000 in Exploration
Expenditures on or before December 31, 2014, for an aggregate of $38,000,000 in
Exploration Expenditures. Barrick shall give MGC written notice as to whether or
not Barrick intends to earn the additional 10% interest no later than 30 days
after earning a 60% interest and confirmation or deemed confirmation by MGC of
acceptance of the expenditures. If Barrick fails to timely provide such notice,
then Barrick shall be deemed to have made an election not to acquire the
additional 10% interest, and the provisions of Subsection 5.4(a)(i) shall apply.

 

3.

If Barrick has timely incurred the required amounts of Exploration Expenditures
to earn a 70% interest in the Properties, and MGC has exercised its option to
enter into a joint venture pursuant to Subsection 5.4(a), then MGC at its sole
discretion will have the exclusive option (the “Carry Option”) to require
Barrick to: (i) fund MGC’s proportionate share of the Exploration Expenses in
excess of $38,000,000 that are incurred prior to a decision by the Management
Committee to approve a Program and Budget for the Development and construction
of a mine based on the Management Assessment Study by Barrick; and (ii) arrange
financing for MGC Development Costs until the commencement of Commercial
Production. If Barrick complies with those obligations, it will earn an
additional 5% Participating Interest (75% total). If MGC elects to exercise the
Carry Option, MGC shall give Barrick written notice of its election no later
than 120 days after MGC has given notice to Barrick of MGC’s confirmation that
Barrick has incurred a total of $38,000,000 in Exploration Expenditures. If
Barrick earns the additional 5% interest, Barrick shall recover the MGC
Development Costs that it incurs, plus accrued interest as described below,
from, but only from, 90% of MGC’s share of Products from the Properties. The
amount of MGC Development Costs advanced by Barrick shall bear interest from the
date incurred until recovered at an annual rate equal to the Prime Rate plus 2%.

 

4.

Any Exploration Expenditures incurred in any period in excess of the amount
required for that period shall apply against any future year’s obligation.

 

5.

Except as otherwise set forth in Subsection 5.2(f), in the event of a shortfall
in Exploration Expenditures is anticipated by Barrick during any period, Barrick
may elect to maintain this Agreement in force by paying to MGC the difference
between the required and actual Exploration Expenditures for the period no later
than the end of the period.

 

6.

Barrick’s failure to make Exploration Expenditures in accordance with the
provisions of Subsection 5.2(a) above, or to pay cash in lieu under Subsections

 

12

 

 

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

5.1(b) or 5.2(e) above, if not cured within 30 days after notice by MGC of such
default, shall be deemed to be a withdrawal of Barrick from the Business, and
this Agreement shall terminate. Upon such event, Barrick shall have no further
right, title or interest in the Assets and it shall take such actions as are
necessary to ensure that all Assets are free and clear of any Encumbrances
arising by, through or under it, except for such Encumbrances to which the
Participants may have agreed. Subject to Subsection 5.2(g) below, Barrick’s
withdrawal shall be effective upon such failure, but such withdrawal shall not
relieve Barrick of its obligation to MGC to fund Operations up to the amount of
Barrick’s contractual obligations to third parties, nor shall such withdrawal
relieve Barrick of its responsibility to fund and satisfy Barrick’s liabilities
to third persons (regardless of whether such liabilities accrue before or after
such withdrawal), including Environmental Liabilities, Continuing Obligations
and Environmental Compliance, arising out of Barrick’s Operations with respect
to the Properties under this Agreement prior to Barrick’s withdrawal. In
addition, if such failure pertains to the first annual period after the
Effective Date, then Barrick shall, at MGC’s election, either (i) pay to MGC the
difference between the amount of Exploration Expenditures actually incurred and
$4,000,000, although in that event such a payment shall not allow Barrick to
maintain the Agreement in force, or (ii) complete the expenditure of the
required amount of Exploration Expenditures in a timely and miner-like manner.
Except as provided in this Subsection, Barrick’s withdrawal shall relieve
Barrick from any other obligation to make contributions hereunder.

 

7.

During the Exploration Period, Barrick shall timely perform or cause to be
performed all actions required of MGC under the Mining Leases and other
contracts, timely perform or cause to be performed all assessment and other
work, and timely pay all payments required under the Mining Leases and other
contracts, real property taxes and other costs, including Governmental Fees,
required by Law in order to maintain the unpatented mining claims, mill sites,
tunnel sites and fee properties included within the Properties, and to timely
make all required filings and recordings associated therewith and provide notice
to MGC of the same. If Barrick withdraws from or terminates this Agreement on or
after May 15th of any calendar year during the Exploration Period, Barrick shall
nonetheless be obligated to timely and properly pay all Governmental Fees
required to maintain all of the unpatented mining claims, mill sites and tunnels
sites included within the Properties through the next subsequent assessment
year, and to timely make all required filings and recordings associated
therewith.

 

8.

Barrick acknowledges that there are existing disturbances at the Properties
which are subject to existing reclamation obligations, which Barrick shall
timely perform in conducting Operations during the Exploration Period. Following
the Effective Date, MGC shall, to the extent allowed by applicable Law, maintain
each Existing Permit in full force and effect and MGC shall allow Barrick to use

 

13

 

 

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

and operate under each such Existing Permit until Barrick has obtained a
replacement permit (or any alternative permit as it desires) in its own name.
Barrick and MGC shall use commercially reasonable efforts to obtain replacements
for the Existing Permits (and related Existing Bonds, as defined below) as
expeditiously as possible. MGC shall maintain any related bond, letter of
credit, guarantee or other security or support required by Law for each such
Existing Permit (the “Existing Bonds”) until Barrick has finalized the transfer
or replacement of such Existing Permit and any corresponding Existing Bond.
Barrick agrees to reimburse MGC for bond premiums, fee payments and other direct
costs incurred by MGC in connection with the maintenance of the Existing Permits
and the Existing Bonds after the Effective Date, up to the date that the
transfer or reissuance of the Existing Permit occurs and the Existing Bond
related thereto is released. Such costs (not including any principal amount of
any bond) shall constitute Exploration Expenditures hereunder. If MGC receives a
notice of violation under any Existing Permit following the Effective Date but
before the transfer or replacement of such Existing Permit, which is based on or
arises out of the Operations of Barrick after the Effective Date, MGC will
promptly notify Barrick, and Barrick shall use commercially reasonable efforts
to cure such violation and any obligation or liability associated therewith as
provided in Section 3.7 above. If Barrick fails to incur the Exploration
Expenditures necessary to earn a 60% interest in the Properties as provided in
Section 5.2(a), MGC and Barrick shall use commercially reasonable efforts to
obtain replacements in the name of MGC for the Existing Permits and any new
permits acquired by Barrick (and related Existing Bonds, or new bonds) as
expeditiously as possible.

Z.        Barrick’s Initial Contribution. Barrick shall have the right, but
except as provided in Subsection 5.3(a), not the obligation to make the
following investments as its Initial Contribution.

 

1.

Upon timely incurring Exploration Expenditures in an amount at least equal to
$30,000,000, Barrick shall provide notice thereof to MGC, such notice shall
include a statement setting forth the Exploration Expenditures incurred in
reasonable detail, and, subject to confirmation by MGC of the amount of
Exploration Expenditures incurred, as set forth in Subsection 5.1(a)(i), Barrick
shall earn an interest in the Properties to be determined as follows.

(iv)      If Barrick timely incurs Exploration Expenditures in an amount at
least equal $30,000,000 during the Exploration Period, in accordance with the
provisions of Subsection 5.2(a), but elects not to earn an additional 10%
interest, Barrick shall earn a 60% interest in the Properties. MGC shall convey
or assign (by special warranty deed or other appropriate conveyance of that
nature) to Barrick an undivided 60% interest in the Properties within 10 days
after notifying Barrick that it has

 

14

 

 

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

confirmed that Barrick has timely incurred the required amount of Exploration
Expenditures.

(v)       Upon timely incurring Exploration Expenditures in an amount at least
equal to $38,000,000, Barrick shall provide notice thereof to MGC and such
notice shall include a statement setting forth the Exploration Expenditures
incurred in reasonable detail. If Barrick timely incurs Exploration Expenditures
of at least $38,000,000 during the Exploration Period, in accordance with the
provisions of Subsection 5.2(b), Barrick shall earn a 70% interest in the
Properties. MGC shall convey or assign (by special warranty deed or other
appropriate conveyance of that nature) to Barrick an undivided 70% interest in
the Properties within 10 days after notifying Barrick that it has confirmed that
Barrick has timely incurred the required amount of Exploration Expenditures.

(vi)      If Barrick elects to earn an additional 10% interest in the Properties
as provided in Subsection 5.2(b), but fails to incur Exploration Expenditures of
at least $38,000,000 in the one year immediately following vesting at 60%, then
Barrick’s interest in the Properties shall remain at 60% and MGC shall convey or
assign (by special warranty deed or other appropriate conveyance of that nature)
to Barrick an undivided 60% interest in the Properties within 10 days after
receiving notice from Barrick that Barrick did not incur $38,000,000 in the one
year immediately following vesting at 60%. The provisions of Section 5.4 shall
then apply.

(vii)     Within 45 days of any notice delivered by Barrick pursuant to this
Subsection 5.3(a) Barrick shall submit a proposed Budget for Operations going
forward from and after the date of such proposal through the commencement of
Commercial Production, and a proposed Program and Budget for the next year. With
respect to the proposed Program and Budget for the next year only, unless (A)
Barrick makes the election to earn an additional interest pursuant to
Subsection 5.2(b), or (B) MGC elects not to go forward with a joint venture as
provided in Subsection 5.4(d), MGC shall have a period of 75 days (rather than
30 days) to submit the response called for in Section 9.4.

 

2.

If Barrick has earned a 70% interest in the Properties and MGC elects to
exercise the Carry Option as provided in Subsection 5.2(c), upon completion of
construction of the mine, Barrick shall earn an additional 5% interest in the
Properties. Upon the commencement of Commercial Production, Barrick shall
provide notice thereof to MGC and such notice shall include a statement setting
forth the amount of MGC Development Costs advanced by Barrick in reasonable

 

15

 

 

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

detail. MGC shall convey or assign to Barrick an undivided 5% interest in the
Properties within 10 days after notifying Barrick that it has confirmed that
Barrick has timely incurred the required amount of MGC Development Costs
advanced by Barrick. MGC shall have the right to audit the amount of reported
MGC Development Costs in the same manner as set forth in Subsection 5.1(b).

 

AA.

Joint Venture Option.

 

1.

MGC shall have a period of 120 days from the last of the following events to
occur to elect to enter into a joint venture with Barrick with respect to the
Properties:

(viii)    upon receipt of notice from Barrick as provided in Subsection 5.3(a),
if Barrick elects not to earn an additional 10% interest as provided in
Subsection 5.2(b),

(ix)      upon receipt of notice from Barrick as provided in Subsection
5.3(a)(ii), if Barrick elects to and earns an additional 10% interest as
provided in Section 5.2(b), or

(x)       upon receipt of notice from Barrick as provided in Subsection
5.3(a)(iii), if Barrick fails to timely incur an additional $8,000,000 in
Exploration Expenditures.

 

2.

MGC shall exercise its option to enter into a joint venture by written notice to
Barrick. If MGC fails to give notice to Barrick within the applicable 120-day
period, MGC shall be deemed to have elected to enter into a joint venture with
Barrick with respect to the Properties.

 

3.

If MGC elects or is deemed to have elected to enter into a joint venture this
Agreement shall govern the relationship, obligations and rights of the
Participants in the joint venture and the following shall occur.

(xi)      As its Initial Contribution, MGC shall contribute the Assets described
in Exhibit A to the purposes of this Agreement.

(xii)     As its Initial Contribution, Barrick shall contribute its funding of
Exploration Expenditures to the purposes of this Agreement.

(xiii)    The Participants’ Participating Interests and Equity Accounts shall be
established as follows:

(A)      If Barrick has incurred a total of $30,000,000 in Exploration
Expenditures and has earned a 60% interest in the Properties, then the
Participating Interests of the Participants shall be:

 

16

 

 

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

 

Barrick – 60%

 

MGC – 40%

and the amounts of $36,000,000 and $24,000,000 shall be credited to Barrick’s
and MGC’s Equity Accounts, respectively.

(B)      If Barrick has incurred a total of $38,000,000 in Exploration
Expenditures and has earned a 70% interest in the Properties, then the
Participating Interests of the Participants shall be:

 

Barrick – 70%

 

MGC – 30%

and the amounts of $44,000,000 and $19,000,000 shall be credited to Barrick’s
and MGC’s Equity Accounts, respectively.

 

(xiv)

Barrick shall become the Manager of the Business.

 

4.

If MGC elects not to enter into a joint venture, then one of the following will
occur:

(xv)     Barrick shall have the option to purchase MGC’s interest in the Assets,
which Barrick shall elect by notice to MGC within 365 days after MGC elects not
to enter into a joint venture. If Barrick fails to provide notice to MGC within
the 365-day period, Barrick shall be deemed to have elected not to purchase
MGC’s interest in the Assets. If Barrick elects to purchase MGC’s interest in
the Assets, then there shall be a closing within 30 days of Barrick’s notice. At
the closing, Barrick shall pay to MGC $40,000,000 and grant to MGC a 2% Net
Smelter Return Royalty on Production from the Properties and MGC shall convey
and assign (by special warranty deed or other appropriate conveyance of that
nature) all of its interests in the Assets to Barrick.

(xvi)    If Barrick elects not to purchase MGC’s interest in the Assets, then
the joint venture shall be formed as provided in Subsection 5.4(c). In that
event, (A) MGC shall be deemed to have exercised the Carry Option, effective as
of the date of its original notice to Barrick electing not to enter into a joint
venture, and (B) MGC’s share of any costs of Operations incurred by Barrick
during the 365-day period referred to in Subsection 5.4(d)(i) shall be MGC
Development Costs.

 

5.

During the 120-day period referred to in Subsection 5.4(a), Barrick may continue
to fund Operations. If MGC elects to enter into a joint venture, MGC’s share of
the costs of such Operations shall be treated as MGC Development Costs.

 

17

 

 

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

BB.     Additional Contributions. At such time as Barrick has contributed the
full amount of its Initial Contribution, the Participants, subject to MGC’s
right to exercise the Carry Option and any election permitted by Subsection
9.5(a), shall be obligated to contribute funds to adopted Programs and Budgets
in proportion to their respective Participating Interests.

CC.     Alternative Programs and Budgets. After completion by Barrick of its
Initial Contribution, and if MGC has not elected to exercise the Carry Option,
whenever Barrick proposes a Program and Budget for any annual period of less
than $350,000, MGC shall have a period of 30 days from and after its receipt of
such a proposed Program and Budget to propose a substitute Program and Budget
that calls for expenditures in excess of $350,000. If Barrick elects not to
participate in that substitute Program and Budget at a level that is in
accordance with its Participating Interest (with respect to any substitute
Program and Budget, Barrick shall have the right only to participate fully in
any such substitute Program and Budget, or not at all), then MGC may elect to
require the Management Committee to adopt that Program and Budget, and in that
event MGC’s Participating Interest shall be increased by one percentage point
for each complete $500,000 increment spent by it pursuant to that substitute
Program and Budget. By way of example (but not limitation), if Barrick had
elected only to earn a 60% Participating Interest, and if during the relevant
time period MGC proposed a substitute Program and Budget calling for
expenditures of $1,000,000, and Barrick elected not to participate, upon
completion and full funding of that Program and Budget, MGC’s Participating
Interest would automatically increase from 40% to 42%, and Barrick’s
Participating Interest would automatically decrease from 60% to 58%.
Subsequently, if MGC proposed a substitute Program and Budget calling for
expenditures of $2,500,000, and Barrick elected not to participate, upon
completion and full funding of that Program and Budget MGC’s Participating
Interest would automatically increase from 42% to 45%, and Barrick’s
Participating Interest would automatically decrease from 58% to 55%. The
provisions of this Section 5.6 shall apply until such time, if any, as MGC has
increased its Participating Interest to at least 70%. Thereafter, the standard
dilution formula (as described in Section 9.5) shall apply.

ARTICLE VI

INTERESTS OF PARTICIPANTS

DD.     Changes in Participating Interests. Upon formation of the joint venture,
the Participating Interests shall be eliminated or changed as follows:

 

1.

Upon completion by Barrick of the obligations set forth in Subsection 5.2(b) or
Subsection 5.2(c);

 

2.

Upon withdrawal or deemed withdrawal as provided in Section 6.2 and Article XII;

 

3.

Upon an election by either Participant pursuant to Section 9.5 to contribute
less to an adopted Program and Budget than the percentage equal to its
Participating Interest, or to contribute nothing to an adopted Program and
Budget;

 

18

 

 

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

 

4.

In the event of default by either Participant in making its agreed-upon
contribution to an adopted Program and Budget, followed by an election by the
other Participant to invoke any of the remedies in Section 10.5;

 

5.

Upon Transfer by either Participant of part or all of its Participating Interest
in accordance with Article XV; or

 

6.

Upon acquisition by either Participant of part or all of the Participating
Interest of the other Participant, however arising.

 

EE.

Elimination of Minority Interest.

 

1.

If MGC’s Participating Interest becomes less than 10% MGC shall be deemed to
have withdrawn from the Business and to have assigned to Barrick all of its
Participating Interest free and clear of any Encumbrances arising by, through or
under MGC, except any such Encumbrances listed in Exhibit A or to which the
Participants have agreed. Such relinquished Participating Interest shall be
deemed to have accrued automatically to Barrick. However, MGC shall be deemed to
have reserved a Net Smelter Return Royalty of 2%. The right to receive a Net
Smelter Return Royalty under this Subsection 6.2(a) may be transferred by MGC to
any third party.

 

2.

In addition to the provisions of Subsection 6.2(a), a Reduced Participant whose
Recalculated Participating Interest is reduced to 10% shall be deemed to have
withdrawn from the Business and shall relinquish its entire Participating
Interest free and clear of any Encumbrances arising by, through or under the
Reduced Participant, except any such Encumbrances listed in Exhibit A or to
which the Participants have agreed. Such relinquished Participating Interest
shall be deemed to have accrued automatically to the other Participant. The
Reduced Participant shall have the right to receive 10% of Net Proceeds, if any,
to a maximum amount of 75% percent of the Reduced Participant’s Equity Account
balance as of the effective date of the withdrawal. Upon receipt of such amount,
and subject to Section 6.3, the Reduced Participant shall thereafter have no
further right, title, or interest in the Assets or under this Agreement. In such
event, the Reduced Participant shall execute and deliver an appropriate
conveyance of all of its right, title and interest in the Assets to the
remaining Participant.

 

3.

The relinquishment, withdrawal and entitlements for which this Section provides
shall be effective as of the effective date of the recalculation under
Sections 9.5 or 10.5. However, if the final adjustment provided under Section
9.6 for any recalculation under Section 9.5 results in a Recalculated
Participating Interest of ten percent (10%) or more: (i) the Recalculated
Participating Interest shall be deemed, effective retroactively as of the first
day of the Program Period, to have automatically revested; (ii) the Reduced
Participant shall be reinstated as a Participant, with all of the rights and
obligations pertaining thereto; (iii) the right

 

19

 

 

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

to a Net Smelter Returns Royalty (if applicable) and Net Proceeds under
Subsection 6.2(a) shall terminate; and (iv) the Manager, on behalf of the
Participants, shall make any necessary reimbursements, reallocations of
Products, contributions and other adjustments as provided in Subsection 9.6(d).
Similarly, if such final adjustment under Section 9.6 results in a Recalculated
Participating Interest for either Participant of less than ten percent (10%) for
a Program Period as to which the provisional calculation under Section 9.5 had
not resulted in a Participating Interest of less than ten percent (10%), then
such Participant, at its election within thirty (30) days after notice of the
final adjustment, may contribute an amount resulting in a revised final
adjustment and resultant Recalculated Participating Interest as provided for in
Section 9.6. If no such election is made, such Participant shall be deemed to
have withdrawn under the terms of Subsection 6.2(b) as of the beginning of such
Program Period, and the Manager, on behalf of the Participants, shall make any
necessary reimbursements, reallocations of Products, contributions and other
adjustments as provided in Subsection 9.6(d), including of any Net Proceeds, or
any Net Smelter Returns (if applicable) to which such Participant may be
entitled for such Program Period.

FF.      Continuing Liabilities Upon Adjustments of Participating Interests. Any
reduction or elimination of either Participant’s Participating Interest under
Section 6.2 shall not relieve such Participant of its share of any liability,
including, without limitation, Continuing Obligations, Environmental Liabilities
and Environmental Compliance, whether arising, before or after such reduction or
elimination, out of acts or omissions occurring or conditions existing prior to
the Effective Date or out of Operations conducted during the term of this
Agreement but prior to such reduction or elimination, regardless of when any
funds may be expended to satisfy such liability. For purposes of this Section,
such Participant’s share of such liability shall be equal to its Participating
Interest at the time the act or omission giving rise to the liability occurred,
or, as to such liability arising out of acts or omissions occurring or
conditions existing prior to the Effective Date, equal to such Participant’s
initial Participating Interest. Should the cumulative cost of satisfying
Continuing Obligations be in excess of cumulative amounts accrued or otherwise
charged to the Environmental Compliance Fund as described in Exhibit B, each of
the Participants shall be liable for its proportionate share (i.e.,
Participating Interest at the time of the act or omission giving rise to such
liability occurred of the cost of satisfying such Continuing Obligations,
notwithstanding that either Participant has previously withdrawn from the
Business or that its Participating Interest has been reduced or converted to an
interest in Net Proceeds pursuant to Subsection 6.2(b)).

GG.     Documentation of Adjustments to Participating Interests. Adjustments to
the Participating Interests need not be evidenced during the term of this
Agreement by the execution and recording of appropriate instruments, but each
Participant’s Participating Interest and related Equity Account balance shall be
shown in the accounting records of the Manager, and any adjustments thereto
shall be made monthly. However, either Participant, at any time upon the request
of the other Participant, shall execute and acknowledge instruments necessary to

 

20

 

 

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

evidence such adjustments in form sufficient for filing and recording in the
jurisdiction where the Properties are located.

 

HH.

Grant of Lien and Security Interest.

 

1.

Subject to Section 6.6, and effective only upon completion by Barrick of its
Initial Contribution, each Participant grants to the other Participant a lien
upon and a security interest in its Participating Interest, including all of its
right, title and interest in the Assets, whenever acquired or arising, and the
proceeds from and accessions to the foregoing; provided, however, that where a
Participant’s Participating Interest is adjusted pursuant to the provisions of
Section 10.5 below, then notwithstanding any other provision of this Agreement,
the non-contributing Participant shall have no further liability to the other
Participant for the amount which caused the adjustment.

 

2.

The liens and security interests granted by Subsection 6.5(a) shall secure every
obligation or liability of the Participant granting such lien or security
interest created under this Agreement, including the obligation to repay a Cover
Payment in accordance with Section 10.4. Each Participant hereby agrees to take
all action necessary to perfect such lien and security interest and hereby
appoints the other Participant its attorney-in-fact to execute, file and record
all financing statements and other documents necessary to perfect or maintain
such lien and security interest.

II.        Subordination of Interests. Each Participant shall, from time to
time, take all necessary actions, including execution of appropriate agreements,
to pledge and subordinate its Participating Interest, any liens it may hold
which are created under this Agreement other than those created pursuant to
Section 6.5 hereof, and any other right or interest it holds with respect to the
Assets (other than any statutory lien of the Manager) to any secured borrowings
for Operations approved by the Management Committee, including any secured
borrowings relating to Project Financing, and any modifications or renewals
thereof.

ARTICLE VII

MANAGEMENT COMMITTEE

JJ.        Organization and Composition. If a joint venture is formed as
provided in Section 5.4, the Participants will establish a Management Committee
to determine overall policies, objectives, procedures, methods and actions under
this Agreement. The Management Committee shall consist of two members appointed
by MGC and two members appointed by Barrick. Each Participant may appoint one or
more alternates to act in the absence of a regular member. Any alternate so
acting shall be deemed a member. Appointments by a Participant shall be made or
changed by notice to the other members. Barrick shall designate one of its
members to serve as the chair of the Management Committee.

 

21

 

 

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

 

1.

Decisions. After Barrick has completed its Initial Contribution, each
Participant, acting through its appointed member(s) in attendance at the
meeting, shall have the votes on the Management Committee in proportion to its
Participating Interest. Unless otherwise provided in this Agreement, the vote of
the Participant with a Participating Interest over 50% shall determine the
decisions of the Management Committee. Provided however that the following
decision will require a unanimous vote of the participants: Acquisition of any
asset for the Business which would materially change the conduct of the business
as contemplated by this agreement.

 

KK.

Meetings.

(a)       After Barrick has completed its Initial Contribution, the Management
Committee shall hold regular meetings at least quarterly in Elko, Nevada, or at
other agreed places. The Manager shall give 10 days notice to the Participants
of such meetings. Additionally, either Participant may call a special meeting
upon seven days notice to the other Participant. In case of an emergency,
reasonable notice of a special meeting shall suffice. There shall be a quorum if
at least one member representing each Participant is present; provided, however,
that if a Participant fails to attend two consecutive properly called meetings,
then a quorum shall exist at the second meeting if the other Participant is
represented by at least one appointed member, and a vote of such Participant
shall be considered the vote required for the purposes of the conduct of all
business properly noticed unless such vote would otherwise require unanimity.

 

1.

If business cannot be conducted at a regular or special meeting due to the lack
of a quorum, either Participant may call the next meeting upon two days notice
to the other Participant.

 

2.

Each notice of a meeting shall include an itemized agenda prepared by the
Manager in the case of a regular meeting or by the Participant calling the
meeting in the case of a special meeting, but any matters may be considered if
either Participant adds the matter to the agenda at least five days before the
meeting or with the consent of the other Participant. The Manager shall prepare
minutes of all meetings and shall distribute copies of such minutes to the other
Participant within 30 days after the meeting. Either Participant may
electronically record the proceedings of a meeting with the consent of the other
Participant. The other Participant shall sign and return or object to the
minutes prepared by the Manager within 30 days after receipt, and failure to do
either shall be deemed acceptance of the minutes as prepared by the Manager. The
minutes, when signed or deemed accepted by both Participants, shall be the
official record of the decisions made by the Management Committee. Decisions
made at a Management Committee meeting shall be implemented in accordance with
adopted Programs and Budgets. If a Participant timely objects to minutes
proposed by the Manager, the members of the Management Committee shall seek, for
a period not to exceed 30 days from receipt by the Manager of notice of the
objections, to agree upon minutes

 

22

 

 

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

acceptable to both Participants. If the Management Committee does not reach
agreement on the minutes of the meeting within such 30 day period, the minutes
of the meeting as prepared by the Manager together with the other Participant’s
proposed changes shall collectively constitute the record of the meeting. If
personnel employed in Operations are required to attend a Management Committee
meeting, reasonable costs incurred in connection with such attendance shall be
charged to the Business Account. All other costs shall be paid by the
Participants individually.

LL.      Action Without Meeting in Person. In lieu of meetings in person, the
Management Committee may conduct meetings by telephone or video conference, so
long as minutes of such meetings are prepared in accordance with Subsection
7.3(c). The Management Committee may also take actions in writing signed by all
members.

MM.    Matters Requiring Approval. Except as provided in Subsection 5.1(a) and
as otherwise delegated to the Manager in Section 8.2, the Management Committee
shall have exclusive authority to determine all matters related to overall
policies, objectives, procedures, methods and actions under this Agreement.

ARTICLE VIII

MANAGER

NN.     Appointment. Upon the formation of the joint venture, the Participants
appoint Barrick as the Manager with overall management responsibility for
Operations. Barrick hereby agrees to serve until it resigns as provided in
Section 8.4.

OO.     Powers and Duties of Manager. Subject to the terms and provisions of
this Agreement, the Manager shall have the following powers and duties, which
shall be discharged in accordance with adopted Programs and Budgets.

 

1.

The Manager shall manage, direct and control Operations, and shall prepare and
present to the Management Committee proposed Programs and Budgets as provided in
Article IX.

 

2.

The Manager shall implement the decisions of the Management Committee, shall
make all expenditures necessary to carry out adopted Programs, and shall
promptly advise the Management Committee if it lacks sufficient funds to carry
out its responsibilities under this Agreement.

 

3.

The Manager shall use reasonable efforts to: (i) purchase or otherwise acquire
all material, supplies, equipment, water, utility and transportation services
required for Operations, such purchases and acquisitions to be made to the
extent reasonably possible on the best terms available, taking into account all
of the circumstances; (ii) obtain such customary warranties and guarantees as
are available in connection with such purchases and acquisitions; and (iii) keep
the

 

23

 

 

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

Assets free and clear of all Encumbrances, except any such Encumbrances listed
in Exhibit A and those existing at the time of, or created concurrent with, the
acquisition of such Assets, or mechanic’s or materialmen’s liens (which shall be
contested, released or discharged in a diligent matter) or Encumbrances
specifically approved by the Management Committee.

 

4.

The Manager shall conduct such title examinations of the Properties and cure
such title defects pertaining to the Properties as may be advisable in its
reasonable judgment.

 

5.

The Manager shall: (i) make or arrange for all payments required by leases,
licenses, permits, contracts and other agreements related to the Assets;
(ii) pay all taxes, assessments and like charges on Operations and Assets except
taxes determined or measured by a Participant’s sales revenue or net income and
taxes, including production taxes, attributable to a Participant’s share of
Products, and shall otherwise promptly pay and discharge expenses incurred in
Operations; provided, however, that if authorized by the Management Committee,
the Manager shall have the right to contest (in the courts or otherwise) the
validity or amount of any taxes, assessments or charges if the Manager deems
them to be unlawful, unjust, unequal or excessive, or to undertake such other
steps or proceedings as the Manager may deem reasonably necessary to secure a
cancellation, reduction, readjustment or equalization thereof before the Manager
shall be required to pay them, but in no event shall the Manager permit or allow
title to the Assets to be lost as the result of the nonpayment of any taxes,
assessments or like charges; and (iii) do all other acts reasonably necessary to
maintain the Assets.

 

6.

The Manager shall: (i) apply for all necessary permits, licenses and approvals;
(ii) comply with all Laws; (iii) notify promptly the Management Committee of any
allegations of substantial violation thereof; and (iv) prepare and file all
reports or notices required for or as a result of Operations. The Manager shall
not be in breach of this provision if a violation has occurred in spite of the
Manager’s good faith efforts to comply consistent with its standard of care
under Section 8.3. In the event of any such violation, the Manager shall timely
cure or dispose of such violation on behalf of both Participants through
performance, payment of fines and penalties, or both, and the cost thereof shall
be charged to the Business Account.

 

7.

(i) The Manager shall notify the other Participant promptly of any litigation,
arbitration or administrative proceeding commenced against the Business or with
regard to the Assets or Operations. (ii) The Manager shall prosecute and defend,
but shall not initiate without consent of the Management Committee, all
litigation or administrative proceedings arising out of Operations. The
non-managing Participant shall have the right to participate, at its own
expense, in such litigation

 

24

 

 

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

or administrative proceedings. The non-managing Participant shall approve in
advance any settlement involving payments, commitments or obligations in excess
of $500,000.00 in cash or value.

 

8.

The Manager shall provide insurance for the benefit of the Participants as
provided in Exhibit F or as may otherwise be determined from time to time by the
Management Committee.

 

9.

The Manager may dispose of Assets, whether by abandonment, surrender, or
Transfer in the ordinary course of business, except that Properties may be
abandoned or surrendered only as provided in Article XIII. Without prior
authorization from the Management Committee, however, the Manager shall not:
(i) dispose of Assets in any one transaction (or in any series of related
transactions) having a value in excess of $500,000.00; (ii) enter into any sales
contracts or commitments for Product, except as permitted in Section 11.2.
Without the prior authorization from both Participants, the Manager shall not
(i) begin a liquidation of the Business; or (ii) dispose of all or a substantial
part of the Assets necessary to achieve the purposes of the Business.

 

10.

The Manager shall have the right to carry out its responsibilities hereunder
through agents, Affiliates or independent contractors.

 

11.

The Manager shall perform or cause to be performed all assessment and other
work, and shall pay all Governmental Fees required by Law in order to maintain
the unpatented mining claims, mill sites and tunnel sites included within the
Properties. The Manager shall have the right to perform the assessment work
required hereunder pursuant to a common plan of exploration and continued actual
occupancy of such claims and sites shall not be required. The Manager shall not
be liable on account of any determination by any court or governmental agency
that the work performed by the Manager does not constitute the required annual
assessment work or occupancy for the purposes of preserving or maintaining
ownership of the claims, provided that the work done is pursuant to an adopted
Program and Budget and is performed in accordance with the Manager’s standard of
care under Section 8.3. The Manager shall timely record with the appropriate
county and file with the appropriate United States agency any required
affidavits, notices of intent to hold and other documents in proper form
attesting to the payment of Governmental Fees, the performance of assessment
work or intent to hold the claims and sites, in each case in sufficient detail
to reflect compliance with the requirements applicable to each claim and site.
The Manager shall not be liable on account of any determination by any court or
governmental agency that any such document submitted by the Manager does not
comply with applicable requirements, provided that such document is prepared and
recorded or filed in accordance with the Manager’s standard of care under
Section 8.3.

 

25

 

 

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

 

12.

If authorized by the Management Committee, the Manager may: (i) locate, amend or
relocate any unpatented mining claim or mill site or tunnel site, (ii) locate
any fractions resulting from such amendment or relocation, (iii) apply for
patents or mining leases or other forms of mineral tenure for any such
unpatented claims or sites, (iv) abandon any unpatented mining claims for the
purpose of locating mill sites or otherwise acquiring from the United States
rights to the ground covered thereby, (v) abandon any unpatented mill sites for
the purpose of locating mining claims or otherwise acquiring from the United
States rights to the ground covered thereby, (vi) exchange with or convey to the
United States any of the Properties for the purpose of acquiring rights to the
ground covered thereby or other adjacent ground, and (vii) convert any
unpatented claims or mill sites into one or more leases or other forms of
mineral tenure pursuant to any Law hereafter enacted.

 

13.

The Manager shall keep and maintain all required accounting and financial
records pursuant to the procedures described in Exhibit B and in accordance with
customary cost accounting practices in the mining industry, and shall ensure
appropriate separation of accounts unless otherwise agreed by the Participants.

 

14.

The Manager shall maintain Equity Accounts for each Participant. Each
Participant’s Equity Account shall be credited with the value of such
Participant’s contributions under Subsections 5.4(c), and shall be credited with
amounts credited by each Participant under Section 5.3, or on behalf of MGC
pursuant to Subsection 5.2(c). Each Participant’s Equity Account shall be
charged with the cash and the fair market value of property distributed to such
Participant (net of liabilities assumed by such Participant and liabilities to
which such distributed property is subject). Contributions and distributions
shall include all cash contributions or distributions plus the agreed value
(expressed in dollars) of all in-kind contributions or distributions. Solely for
purposes of determining the Equity Account balances of the Participants, the
value of all Products distributed to the Participants shall be calculated based
on the Spot Price for such Products on the date such Products are shipped to a
smelter or refiner, and such value shall be used regardless of the actual amount
received by each Participant upon disposition of such Products. 

 

15.

Subject to Subsection 5.1(a), the Manager shall keep the Management Committee
advised of all Operations by submitting in writing to the members of the
Management Committee: (i) monthly progress reports that include statements of
expenditures and comparisons of such expenditures to the adopted Budget;
(ii) periodic summaries of data acquired; (iii) copies of reports concerning
Operations; (iv) a detailed final report within 60 days after completion of each
Program and Budget, which shall include comparisons between actual and budgeted
expenditures and comparisons between the objectives and results of Programs; and
(v) such other reports as any member of the Management

 

26

 

 

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

Committee may reasonably request. Subject to Article XVII, at all reasonable
times the Manager shall provide the Management Committee, or other
representative of a Participant upon the request of such Participant’s member of
the Management Committee, access to, and the right to inspect and, at such
Participant’s cost and expense, copies of the Existing Data and all maps, drill
logs and other drilling data, core, pulps, reports, surveys, assays, analyses,
production reports, operations, technical, accounting and financial records, and
other Business Information, to the extent preserved or kept by the Manager,
subject to Article XVII. In addition, the Manager shall allow the non-managing
Participant, at the latter’s sole risk, cost and expense, and subject to
reasonable safety regulations, to inspect the Assets and Operations at all
reasonable times, so long as the non-managing Participant does not unreasonably
interfere with Operations.

 

16.

The Manager shall prepare an Environmental Compliance plan for all Operations
consistent with the requirements of any applicable Laws or contractual
obligations and shall include in each Program and Budget sufficient funding to
implement the Environmental Compliance plan and to satisfy the financial
assurance requirements of any applicable Law or contractual obligation
pertaining to Environmental Compliance. To the extent practical, the
Environmental Compliance plan shall incorporate concurrent reclamation of
Properties disturbed by Operations.

 

17.

The Manager shall undertake to perform Continuing Obligations when and as
economic and appropriate, whether before or after termination of the Business.
The Manager shall have the right to delegate performance of Continuing
Obligations to persons having demonstrated skill and experience in relevant
disciplines. As part of each Program and Budget submittal, the Manager shall
specify in such Program and Budget the measures to be taken for performance of
Continuing Obligations and the cost of such measures. The Manager shall keep the
other Participant reasonably informed about the Manager’s efforts to discharge
Continuing Obligations. Authorized representatives of each Participant shall
have the right from time to time to enter the Properties to inspect work
directed toward satisfaction of Continuing Obligations and audit books, records,
and accounts related thereto.

 

18.

The funds that are to be deposited into the Environmental Compliance Fund shall
be maintained by the Manager in a separate, interest bearing cash management
account, which may include, but is not limited to, money market investments and
money market funds, and/or in longer term investments if approved by the
Management Committee. Such funds shall be used solely for Environmental
Compliance and Continuing Obligations, including the committing of such funds,
interests in property, insurance or bond policies, or other security to satisfy
Laws regarding financial assurance for the reclamation or restoration of the
Properties, and for other Environmental Compliance requirements.

 

27

 

 

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

 

19.

If Participating Interests are adjusted in accordance with this Agreement the
Manager shall propose from time to time one or more methods for fairly
allocating costs for Continuing Obligations in a manner consistent with
Article VI.

 

20.

The Manager shall undertake all other activities reasonably necessary to fulfill
the foregoing, and to implement the policies, objectives, procedures, methods
and actions determined by the Management Committee pursuant to Section 7.1.

PP.      Standard of Care. The Manager shall discharge its duties under Section
8.2 and conduct all Operations in a good, workmanlike and efficient manner, in
accordance with sound mining and other applicable industry standards and
practices, and in accordance with Laws and with the terms and provisions of
leases, licenses, permits, contracts and other agreements pertaining to the
Assets. So long as it is performing all of its obligations under this Agreement,
the Manager shall not be liable to the other Participant for any act or omission
resulting in damage or loss except to the extent caused by or attributable to
the Manager’s willful misconduct or gross negligence. The Manager shall not be
in default of any of its duties under Section 8.2 if its inability or failure to
perform results from the failure of the other Participant to perform acts or to
contribute amounts required of it by this Agreement.

QQ.     Resignation; Deemed Offer to Resign. The Manager may resign upon not
less than three months’ prior notice to the other Participant, in which case the
other Participant may elect to become the new Manager by notice to the resigning
Participant within 30 days after the notice of resignation. If any of the
following shall occur, the Manager shall be deemed to have resigned upon the
occurrence of the event described in each of the following Subsections, with the
successor Manager to be appointed by the other Participant at a subsequently
called meeting of the Management Committee, at which the Manager shall not be
entitled to vote. The other Participant may appoint itself or a third party as
the Manager.

 

1.

The aggregate Participating Interest of the Manager and its Affiliates becomes
less than 50%;

 

2.

The Manager fails to perform a material obligation imposed upon it under this
Agreement and such failure continues for a period of 60 days after notice from
the other Participant demanding performance;

 

3.

The Manager fails to pay or contest in good faith its bills and Business debts
as such obligations become due;

 

4.

A receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for a substantial part of its assets is appointed and such appointment
is neither made ineffective nor discharged within 60 days after the making
thereof, or such appointment is consented to, requested by, or acquiesced in by
the Manager;

 

28

 

 

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

 

5.

The Manager commences a voluntary case under any applicable bankruptcy,
insolvency or similar law now or hereafter in effect; or consents to the entry
of an order for relief in an involuntary case under any such law or to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or other similar official of any substantial
part of its assets; or makes a general assignment for the benefit of creditors;
or takes corporate or other action in furtherance of any of the foregoing; or

 

6.

Entry is made against the Manager of a judgment, decree or order for relief
affecting its ability to serve as Manager, or a substantial part of its
Participating Interest or its other assets by a court of competent jurisdiction
in an involuntary case commenced under any applicable bankruptcy, insolvency or
other similar law of any jurisdiction now or hereafter in effect.

Under Subsections (d), (e) or (f) above, the appointment of a successor Manager
shall be deemed to pre-date the event causing a deemed resignation.

RR.     Payments To Manager. The Manager shall be compensated for its services
and reimbursed for its costs hereunder in accordance with Exhibit B.

SS.      Transactions With Affiliates. If the Manager engages Affiliates to
provide services hereunder, it shall do so on terms no less favorable than would
be the case in arm’s-length transactions with unrelated persons.

TT.      Activities During Deadlock. If the Management Committee for any reason
fails to adopt an Exploration, Pre-Feasibility Study, Management Assessment
Study or Development Program and Budget, the Manager shall continue Operations
at levels sufficient to maintain the Properties. If the Management Committee for
any reason fails to adopt an initial Mining Program and Budget or any Expansion
or Modification Programs and Budgets, the Manager shall continue Operations at
levels sufficient to maintain the then current Operations and Properties. If the
Management Committee for any reason fails to adopt Mining Programs and Budgets
subsequent to the initial Mining Program and Budget, subject to the contrary
direction of the Management Committee and receipt of necessary funds, the
Manager shall continue Operations at levels comparable with the last adopted
Mining Program and Budget. All of the foregoing shall be subject to the contrary
direction of the Management Committee and the receipt of necessary funds.

ARTICLE IX

PROGRAMS AND BUDGETS

UU.     Initial Program and Budget. Upon the formation of the joint venture,
Barrick shall prepare and submit to the Participants an Initial Program and
Budget which will be reviewed and approved as provided in this Article IX.

 

29

 

 

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

VV.     Operations Pursuant to Programs and Budgets. Except as otherwise
provided in Subsection 5.2, Section 9.12, and Article XII, Operations shall be
conducted, expenses shall be incurred, and Assets shall be acquired only
pursuant to adopted Programs and Budgets. Every Program and Budget adopted
pursuant to this Agreement shall provide for accrual of reasonably anticipated
Environmental Compliance expenses for all Operations contemplated under the
Program and Budget.

WW.   Presentation of Programs and Budgets. Proposed Programs and Budgets shall
be prepared by the Manager for a period of one year or any other shorter period
as approved by the Management Committee, and shall be submitted to the
Management Committee for review and consideration. All proposed Programs and
Budgets may include Exploration, Pre-Feasibility Studies, Management Assessment
Study, Development, Mining and Expansion or Modification Operations components,
or any combination thereof, and shall be reviewed and adopted upon a vote of the
Management Committee in accordance with Sections 7.2 and 9.4. Each Program and
Budget adopted by the Management Committee, regardless of length, shall be
reviewed at least once a year at a meeting of the Management Committee. During
the period encompassed by any Program and Budget, and at least two months prior
to its expiration, a proposed Program and Budget for the succeeding period shall
be prepared by the Manager and submitted to the Management Committee for review
and consideration.

XX.     Review and Adoption of Proposed Programs and Budgets. Within 30 days
after submission of a proposed Program and Budget, each Participant shall submit
in writing to the Management Committee:

 

1.

Notice that the Participant approves any or all of the components of the
proposed Program and Budget;

 

2.

Modifications proposed by the Participant to the components of the proposed
Program and Budget; or

 

3.

Notice that the Participant rejects any or all of the components of the proposed
Program and Budget.

If a Participant fails to give any of the foregoing responses within the
allotted time, the failure shall be deemed to be a vote by the Participant for
adoption of the Manager’s proposed Program and Budget. If a Participant makes a
timely submission to the Management Committee pursuant to Subsections 9.4(a),
(b) or (c), then the Manager working with the other Participant shall seek for a
period of time not to exceed 20 days to develop a complete Program and Budget
acceptable to both Participants. The Manager shall then call a Management
Committee meeting in accordance with Section 7.3 for purposes of reviewing and
voting upon the proposed Program and Budget.

 

30

 

 

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

 

YY.

Election to Participate.

 

1.

By notice to the Management Committee within 20 days after the final vote
adopting a Program and Budget, and notwithstanding its vote concerning adoption
of a Program and Budget, a Participant may elect to participate in the approved
Program and Budget: (i) in proportion to its respective Participating Interest,
(ii) in some lesser amount than its respective Participating Interest, or
(iii) not at all. In case of an election under Subsection 9.5(a)(ii) or (iii),
its Participating Interest shall be recalculated as provided in
Subsection 9.5(b) below, with dilution effective as of the first day of the
Program Period for the adopted Program and Budget, provided that such Program
and Budget is actually completed. If a Participant fails to so notify the
Management Committee of the extent to which it elects to participate, the
Participant shall be deemed to have elected to contribute to such Program and
Budget in proportion to its respective Participating Interest as of the
beginning of the Program Period.

 

2.

If a Participant elects to contribute to an adopted Program and Budget some
lesser amount than in proportion to its respective Participating Interest, or
not at all, and the other Participant elects to fund all or any portion of the
deficiency, the Participating Interest of the Reduced Participant shall be
recalculated as follows:

(i)        for an election made before Payout, by dividing: (A) the sum of (1)
the amount credited to the Reduced Participant’s Equity Account with respect to
its Initial Contribution under Section 5.4(c)(iii), (2) the amount of all of the
Reduced Participant’s contributions under Section 5.5, and (3) the amount, if
any, the Reduced Participant elects to contribute to the adopted Program and
Budget; by (B) the sum of (1), (2) and (3) above for both Participants; and then
multiplying the result by one hundred; or

(ii)       for an election made after Payout, by reducing its Participating
Interest in an amount equal to two times the amount by which it would have been
reduced under Subsection 9.5(b)(i) if such election were made before Payout.

The Participating Interest of the other Participant shall be increased by the
amount of the reduction in the Participating Interest of the Reduced
Participant, and if the other Participant elects not to fund the entire
deficiency, the Manager shall adjust the Program and Budget to reflect the funds
available.

 

3.

Whenever the Participating Interests are recalculated pursuant to this
Subsection 9.5, (i) the Equity Accounts of both Participants shall be revised to
bear the same ratio to each other as their recalculated Participating Interests.

 

31

 

 

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

ZZ.      Recalculation or Restoration of Reduced Interest Based on Actual
Expenditures.

 

1.

If a Participant makes an election under Subsection 9.5(a)(ii) or (iii), then
within 30 days after the conclusion of such Program and Budget, the Manager
shall report the total amount of money expended plus the total obligations
incurred by the Manager for such Budget.

 

2.

If the Manager expended or incurred obligations that were more or less than the
adopted Budget, the Participating Interests shall be recalculated pursuant to
Subsection 9.5(b) by substituting each Participant’s actual contribution to the
adopted Budget for that Participant’s estimated contribution at the time of the
Reduced Participant’s election under Subsection 9.5(a).

 

3.

If the Manager expended or incurred obligations of less than seventy-five
percent (75%) of the adopted Budget, within 60 days of receiving the Manager’s
report on expenditures, the Reduced Participant may notify the other Participant
of its election to reimburse the other Participant for the difference between
any amount contributed by the Reduced Participant to such adopted Program and
Budget and the Reduced Participant’s proportionate share (at the Reduced
Participant’s former Participating Interest) of the actual amount expended or
incurred for the Program, plus interest on the difference accruing at the Prime
Rate plus two percentage points. The Reduced Participant shall deliver the
appropriate amount (including interest) to the other Participant with such
notice. Failure of the Reduced Participant to so notify and tender such amount
shall result in dilution occurring in accordance with this Article IX and shall
bar the Reduced Participant from its rights under this Subsection 9.6(c)
concerning the relevant adopted Program and Budget.

 

4.

All recalculations under this Article IX shall be effective as of the first day
of the Program Period for the Program and Budget. The Manager, on behalf of both
Participants, shall make such reimbursements, reallocations of Products,
contributions and other adjustments as are necessary so that, to the extent
possible, each Participant will be placed in the position it would have been in
had its Participating Interests as recalculated under this Section been in
effect throughout the Program Period for such Program and Budget. If the
Participants are required to make contributions, reimbursements or other
adjustments pursuant to this Section, the Manager shall have the right to
purchase or sell a Participant’s share of Products in the same manner as under
Section 11.2 and to apply the proceeds of such sale to satisfy that
Participant’s obligation to make such contributions, reimbursements or
adjustments.

 

5.

Whenever the Participating Interests are recalculated pursuant to this Section,
the Participants’ Equity Accounts shall be revised to bear the same ratio to
each other as their Recalculated Participating Interests.

 

32

 

 

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

 

AAA.

Pre-Feasibility Study Program and Budgets.

 

1.

At such time as either Participant is of the good faith and reasonable opinion
that economically viable Mining Operations may be possible on the Properties,
the Participant may propose to the Management Committee that a Pre-Feasibility
Study Program and Budget, or a Program and Budget that includes Pre-Feasibility
Studies, be prepared. Such proposal shall be made in writing to the other
Participant, shall reference the data upon which the proposing Participant bases
its opinion, and shall call a meeting of the Management Committee pursuant to
Section 7.3. If such proposal is adopted by the Management Committee, the
Manager shall prepare or have prepared a Pre-Feasibility Study Program and
Budget as approved by the Management Committee and shall submit the same to the
Management Committee within 60 days following adoption of the proposal.

 

2.

Pre-Feasibility Studies may be conducted by the Manager, Feasibility
Contractors, or both, or may be conducted by the Manager and audited by
Feasibility Contractors, as the Management Committee determines. A
Pre-Feasibility Study Program shall include the work necessary to prepare and
complete the Pre-Feasibility Study approved in the proposal adopted by the
Management Committee, which may include some or all of the following:

(iii)      analyses of various alternatives for mining, processing and
beneficiation of Products;

(iv)      analyses of alternative mining, milling, and production rates;

(v)       analyses of alternative sites for placement of facilities (i.e., water
supply facilities, transport facilities, reagent storage, offices, shops,
warehouses, stock yards, explosives storage, handling facilities, housing,
public facilities);

(vi)      analyses of alternatives for waste treatment and handling (including a
description of each alternative of the method of tailings disposal and the
location of the proposed disposal site);

(vii)     estimates of recoverable proven and probable reserves of Products and
of related substances, in terms of technical and economic constraints
(extraction and treatment of Products), including the effect of grade, losses,
and impurities, and the estimated mineral composition and content thereof, and
review of mining rates commensurate with such reserves;

(viii)    analyses of environmental impacts of the various alternatives,
including an analysis of the permitting, environmental

 

33

 

 

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

liability and other Environmental Law implications of each alternative, and
costs of Environmental Compliance for each alternative;

(ix)      conduct of appropriate metallurgical tests to determine the efficiency
of alternative extraction, recovery and processing techniques, including an
estimate of water, power, and reagent consumption requirements;

(x)       conduct of hydrology and other studies related to any required
dewatering; and

(xi)      conduct of other studies and analyses approved by the Management
Committee.

 

3.

The Manager shall have the discretion to base its and any Feasibility
Contractors’ Pre-Feasibility Study on the cumulative results of each discipline
studied, so that if a particular portion of the work would result in the
conclusion that further work based on these results would be unwarranted for a
particular alternative, the Manager shall have no obligation to continue
expenditures on other Pre-Feasibility Studies related solely to such
alternative.

BBB.   Completion of Pre-Feasibility Studies and Selection of Approved
Alternatives. As soon as reasonably practical following completion of all
Pre-Feasibility Studies required to evaluate fully the alternatives studied
pursuant to Pre-Feasibility Programs, the Manager shall prepare a report
summarizing all Pre-Feasibility Studies and shall submit the same to the
Management Committee. Such report shall incorporate the following:

 

1.

the results of the analyses of the alternatives and other matters evaluated in
the conduct of the Pre-Feasibility Programs;

 

2.

reasonable estimates of capital costs for the Development and start-up of the
mine, mill and other processing and ancillary facilities required by the
Development and Mining alternatives evaluated (based on flowsheets, piping and
instrumentation diagrams, and other major engineering diagrams), which cost
estimates shall include reasonable estimates of:

(xii)     capitalized pre-stripping expenditures, if an open pit or surface mine
is proposed;

(xiii)    expenditures required to purchase, construct and install all
machinery, equipment and other facilities and infrastructure (including
contingencies) required to bring a mine into Commercial Production, including an
analysis of costs of equipment or supply contracts in lieu of Development costs
for each Development and Mining alternative evaluated;

 

34

 

 

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

(xiv)    expenditures required to perform all other related work required to
commence Commercial Production of Products and, if applicable, process Products
(including reasonable estimates of working capital requirements); and

(xv)     all other direct and indirect costs and general and administrative
expenses that may be required for a proper evaluation of the Development and
Mining alternatives and annual production levels evaluated. The capital cost
estimates shall include a schedule of the timing of the estimated capital
requirements for each alternative;

 

3.

a reasonable estimate of the annual expenditures required for the first year of
Operations after completion of the capital program described in
Subsection 9.8(b) for each Development alternative evaluated, and for subsequent
years of Operations, including estimates of annual production, processing,
administrative, operating and maintenance expenditures, taxes (other than income
taxes), working capital requirements, royalty and purchase obligations,
equipment leasing or supply contract expenditures, work commitments,
Environmental Compliance costs, post-Operations Environmental Compliance and
Continuing Obligations funding requirements and all other anticipated costs of
such Operations. This analysis shall also include an estimate of the number of
employees required to conduct such Operations for each alternative;

 

4.

a review of the nature, extent and rated capacity of the mine, machinery,
equipment and other facilities preliminarily estimated to be required for the
purpose of producing and marketing Products under each Development and Mining
alternative analyzed;

 

5.

an analysis (and sensitivity analyses reasonably requested by either
Participant), based on various target rates of return and price assumptions
requested by either Participant, of whether it is technically, environmentally,
and economically feasible to place a prospective ore body or deposit within the
Properties into Commercial Production for each of the Development and Mining
alternatives analyzed (including a discounted cash flow rate of return
investment analysis for each alternative and net present value estimate using
various discount rates requested by either Participant); and

 

6.

such other information as the Management Committee deems appropriate.

Within 60 days after delivery of the Pre-Feasibility Study summary to the
Participants, a Management Committee meeting shall be convened for the purposes
of reviewing the Pre-Feasibility Study summary and selecting one or more
Approved Alternatives, if any.

CCC.   Programs and Budgets for Management Assessment Study. Within 30 days
following the selection of an Approved Alternative, the Manager shall submit to
the

 

35

 

 

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

Management Committee a Program and a Budget, which shall include necessary
Operations, for the preparation of a Management Assessment Study. A Management
Assessment Study may be prepared by the Manager, Feasibility Contractors, or
both, or may be prepared by the Manager and audited by Feasibility Contractors,
as the Management Committee determines.

DDD.  Development Programs and Budgets. Unless otherwise determined by the
Management Committee, the Manager shall not submit to the Management Committee a
Program and Budget including Development of the mine described in a completed
Management Assessment Study until 90 days following the receipt by Manager of
the Management Assessment Study. The Program and Budget, which includes
Development of the mine described in the completed Management Assessment Study,
shall be based on the estimated cost of Development described in the Management
Assessment Study for the Approved Alternative, unless otherwise directed by the
Management Committee.

EEE.   Expansion or Modification Programs and Budgets. Any Program and Budget
proposed by the Manager involving Expansion or Modification shall be based on a
Management Assessment Study prepared by the Manager, Feasibility Contractors, or
both, or prepared by the Manager and audited by Feasibility Contractors, as the
Management Committee determines. The Program and Budget, which include Expansion
or Modification, shall be submitted for review and approval by the Management
Committee within 90 days following receipt by the Manager of such Management
Assessment Study.

FFF.    Budget Overruns; Program Changes. For Programs and Budgets adopted after
completion of Barrick’s Initial Contribution, the Manager shall immediately
notify the Management Committee of any material departure from an adopted
Program and Budget. If the Manager exceeds an adopted Budget by more than 10% in
the aggregate, then the excess over 10%, unless directly caused by an emergency
or unexpected expenditure made pursuant to Section 9.13 or unless otherwise
authorized or ratified by the Management Committee, shall be for the sole
account of the Manager and such excess shall not be included in the calculations
of the Participating Interests nor deemed a contribution under this Agreement.
Budget overruns of 10% or less in the aggregate shall be borne by the
Participants in proportion to their respective Participating Interests.

GGG.  Emergency or Unexpected Expenditures. In case of emergency, the Manager
may take any reasonable action it deems necessary to protect life or property,
to protect the Assets or to comply with Laws. The Manager may make reasonable
expenditures on behalf of the Participants for unexpected events that are beyond
its reasonable control and that do not result from a breach by it of its
standard of care. The Manager shall promptly notify the Participants of the
emergency or unexpected expenditure, and the Manager shall be reimbursed for all
resulting costs by the Participants in proportion to their respective
Participating Interests.

 

36

 

 

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

ARTICLE X

ACCOUNTS AND SETTLEMENTS

HHH.  Monthly Statements. After completion of Barrick’s Initial Contribution,
and subject to Barrick electing to carry MGC to Commercial Production pursuant
to Subsection 5.2(c) above, the Manager shall promptly submit to the Management
Committee monthly statements of account reflecting in reasonable detail the
charges and credits to the Business Account during the preceding month.

III.       Cash Calls. Unless MGC has elected to exercise the Carry Option, on
the basis of each Program and Budget adopted by the Management Committee, the
Manager shall submit prior to the last day of each month a billing for estimated
cash requirements for the next month. Within 10 days after receipt of each
billing, or a billing made pursuant to Section 9.12 or 12.4, each Participant
shall advance its proportionate share of such cash requirements. The Manager
shall record all funds received in the Business Account. All funds in excess of
immediate cash requirements shall be invested by the Manager for the benefit of
the Business in cash management accounts and investments selected at the
discretion of the Manager, which accounts may include, but are not limited to,
money market investments and money market funds.

JJJ.      Failure to Meet Cash Calls. A Participant that fails to meet cash
calls in the amount and at the times specified in Section 10.2 shall be in
default, and the amounts of the defaulted cash call shall bear interest from the
date due at an annual rate equal to two percentage points over the Prime Rate,
but in no event shall the rate of interest exceed the maximum permitted by Law.
Such interest shall accrue to the benefit of and be payable to the
non-defaulting Participant, but shall not be deemed as amounts contributed by
the non-defaulting Participant in the event dilution occurs in accordance with
Article VI. In addition to any other rights and remedies available to it by Law,
the non-defaulting Participant shall have those other rights, remedies, and
elections specified in Sections 10.4 and 10.5.

KKK.  Cover Payment. If a Participant defaults in making a contribution or cash
call required by an adopted Program and Budget, the non-defaulting Participant
may, but shall not be obligated to, advance some portion or all of the amount in
default on behalf of the defaulting Participant (a ”Cover Payment”). Each and
every Cover Payment shall constitute a demand loan bearing interest from the
date of the advance at the rate provided in Section 10.3. If more than one Cover
Payment is made, the Cover Payments shall be aggregated and the rights and
remedies described herein pertaining to an individual Cover Payment shall apply
to the aggregated Cover Payments. The failure to repay such loan upon demand
shall be a default.

LLL.   Remedies. The Participants acknowledge that if either Participant
defaults in making a contribution required by Section 5.5 or a cash call, or in
repaying a loan, as required under Sections 10.2, 10.3 or 10.4, whether or not a
Cover Payment is made, it will be difficult to measure the damages resulting
from such default (it being hereby understood and agreed that the Participants
have attempted to determine such damages in advance and determined that the
calculation of such damages cannot be ascertained with reasonable certainty).
Both Participants acknowledge and recognize that the damage to the
non-defaulting Participant could be

 

37

 

 

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

significant. In the event of such default, as reasonable liquidated damages, the
non-defaulting Participant may, with respect to any such default not cured
within 90 days after notice to the defaulting Participant of such default, elect
the following remedy of diluting or eliminating the defaulting Participant’s
Participating Interest by giving notice to the defaulting Participant. Such
election may be made with respect to each failure to meet a cash call relating
to a Program and Budget, regardless of the frequency of such cash calls,
provided such cash calls are made in accordance with Section 10.2.

 

1.

The non-defaulting Participant may elect to have the defaulting Participant’s
Participating Interest diluted or eliminated as follows:

(i)        For a default occurring before Payout relating to a Program and
Budget covering in whole or in part Exploration, Pre-Feasibility Study or
Management Assessment Study Operations, the Reduced Participant’s Participating
Interest shall be recalculated by dividing: (X) the sum of (1) the value of the
Reduced Participant’s Initial Contribution under Section 5.4 (c)(iii), (2) the
total of all the Reduced Participant contributed under 5.5, and (3) the amount,
if any, the Reduced Participant contributed to the adopted Program and Budget
with respect to which the default occurred; by (Y) the sum of (1), (2) and (3)
above for both Participants; and then multiplying the result by one hundred. For
such a default occurring after Payout, the Reduced Participant’s Participating
Interest shall be reduced in an amount equal to two times the amount by which it
would have been reduced if such default had occurred before Payout. For such a
default, whether occurring before or after Payout, the Recalculated
Participating Interest shall then be further reduced:

(A)      for a default relating exclusively to an Exploration Program and
Budget, by multiplying the Recalculated Participating Interest by 80%; or

(B)      for a default relating to a Program and Budget covering in whole or in
part Pre-Feasibility Study and/or Management Assessment Study Operations, by
multiplying the Recalculated Participating Interest by 60%.

The Participating Interest of the other Participant shall be increased by the
amount of the reduction in the Participating Interest of the Reduced
Participant, including the further reduction under Subsections 10.5(a)(i)(A)
or (B).

(ii)       For a default relating to a Program and Budget covering in whole or
in part Development or Mining, at the non-defaulting Participant’s election, the
defaulting Participant shall be deemed to have withdrawn and to have
automatically relinquished its interest in the Assets to the non-defaulting
Participant; provided, however, the defaulting

 

38

 

 

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

Participant shall have the right to receive only from 10% of Net Proceeds, if
any, and not from any other source, an amount equal to 75% of the defaulting
Participant’s Equity Account balance at the time of such default. Upon receipt
of such amount the defaulting Participant shall thereafter have no further
right, title or interest in the Assets (except for MGC’s right under Subsection
6.2(a) to receive a Net Smelter Returns Royalty), and shall be relieved from any
further liability to the non-defaulting Participant to the extent that such
amount forms the basis for the reduction or elimination of the defaulting
Participant’s Participating Interest.

(iii)      Dilution under this Subsection 10.5(a) shall be effective as of the
date of the original default, and for greater certainty shall be subject to the
provisions of Section 6.2. The amount of any Cover Payment under Section 10.4
and interest thereon, or any interest accrued in accordance with Section 10.3,
shall be deemed to be amounts contributed by the non-defaulting Participant, and
not as amounts contributed by the defaulting Participant.

(iv)      Whenever the Participating Interests are recalculated pursuant to this
Subsection 10.5(a), the Equity Accounts of both Participants shall be adjusted
to bear the same ratio to each other as their recalculated Participating
Interests.

 

MMM.

Audits.

 

1.

After completion of Barrick’s Initial Contribution, within 90 days after the end
of each calendar year, at the request of a Participant, an audit shall be
completed by certified public accountants selected by, and independent of, the
Manager. The audit shall be conducted in accordance with generally accepted
auditing standards and shall cover all books and records maintained by the
Manager pursuant to this Agreement, all Assets and Encumbrances, and all
transactions and Operations conducted during such calendar year, including
production and inventory records and all costs for which the Manager sought
reimbursement under this Agreement, together with all other matters customarily
included in such audits. All written exceptions to and claims upon the Manager
for discrepancies disclosed by such audit shall be made not more than three
months after receipt of the audit report, unless either Participant elects to
conduct an independent audit pursuant to Subsection 10.6(b) which is ongoing at
the end of such three month period, in which case such exceptions and claims may
be made within the period provided in Subsection 10.6(b). Failure to make any
such exception or claim within such period shall mean the audit is deemed to be
correct and binding upon the Participants. The cost of all audits under this
Subsection shall be charged to the Business Account.

 

39

 

 

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

 

2.

Notwithstanding the annual audit conducted by certified public accountants
selected by the Manager, each Participant shall have the right to have an
independent audit of all Business books, records and accounts, including all
charges to the Business Account. This audit shall review all issues raised by
the requesting Participant, with all costs borne by the requesting Participant.
The requesting Participant shall give the other Participant 30 days prior notice
of such audit. Any audit conducted on behalf of either Participant shall be made
during the Manager’s normal business hours and shall not interfere with
Operations. A Participant shall not have the right to audit records and accounts
of the Business relating to transactions or Operations more than 24 months after
the calendar year during which such transactions, or transactions related to
such Operations, were charged to the Business Account. All written exceptions to
and claims upon the Manager for discrepancies disclosed by such audit shall be
made not more than three months after completion and delivery of such audit, or
they shall be deemed waived.

ARTICLE XI

DISPOSITION OF PRODUCTION

NNN.  Taking In Kind. Each Participant shall take in kind or separately dispose
of its share of all Products in proportion to its Participating Interest. Any
extra expenditure incurred in the taking in kind or separate disposition by
either Participant of its proportionate share of Products shall be borne by such
Participant. Nothing in this Agreement shall be construed as providing, directly
or indirectly, for any joint or cooperative marketing or selling of Products or
permitting the processing of Products owned by any third party at any processing
facilities constructed by the Participants pursuant to this Agreement. The
Manager shall give notice in advance of the anticipated delivery date upon which
Products will be available.

OOO.  Failure of Participant to Take In Kind. If a Participant fails to take its
proportionate share of Products in kind, the Manager shall have the right, but
not the obligation, for a period of time consistent with the minimum needs of
the industry, but not to exceed one year from the notice date described in
Section 11.1, to purchase the Participant’s share for its own account or to sell
such share as agent for the Participant at not less than the prevailing market
price in the area. Subject to the terms of any such contracts of sale then
outstanding, during any period that the Manager is purchasing or selling a
Participant’s share of production, the Participant may elect by notice to the
Manager to take in kind. The Manager shall be entitled to deduct from proceeds
of any sale by it for the account of a Participant reasonable expenses incurred
in such a sale.

PPP.    Hedging. Neither Participant shall have any obligation to account to the
other Participant for, nor have any interest or right of participation in any
profits or proceeds nor have any obligation to share in any losses from, futures
contracts, forward sales, trading in puts, calls, options or any similar
hedging, price protection or marketing mechanism employed by a

 

40

 

 

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

Participant with respect to its proportionate share of any Products produced or
to be produced from the Properties.

ARTICLE XII

WITHDRAWAL AND TERMINATION

QQQ.  Termination by Expiration or Agreement. This Agreement shall terminate as
expressly provided herein, unless earlier terminated by written agreement.

RRR.   Termination by Deadlock. If the Management Committee fails to adopt a
Program and Budget for 12 months after the expiration of the latest adopted
Program and Budget, either Participant may elect to terminate the Business by
giving 90 days notice of termination to the other Participant.

SSS.    Withdrawal. A Participant may elect to withdraw from the Business by
(i) in the case of Barrick, failing to make the Exploration Expenditures as
required by Subsection 5.2, or (ii) giving notice to the other Participant of
the effective date of withdrawal, which shall be the later of the end of the
then current Program Period or 30 days after the date of the notice. Upon such
withdrawal, the Business shall terminate, and the withdrawing Participant shall
be deemed to have transferred to the remaining Participant all of its
Participating Interest, including all of its interest in the Assets, without
cost and free and clear of all Encumbrances arising by, through or under such
withdrawing Participant, except those described in Exhibit A and those to which
both Participants have agreed. The withdrawing Participant shall execute and
deliver all instruments as may be necessary in the reasonable judgment of the
other Participant to effect the transfer of its interests in the Assets to the
other Participant. If within a 60 day period both Participants elect to
withdraw, then the Business shall instead be deemed to have been terminated by
the consent of the Participants pursuant to Section 12.1.

TTT.   Continuing Obligations and Environmental Liabilities. On termination of
the Business under Sections 12.1, 12.2 or 12.3, each Participant shall remain
liable for its respective share of liabilities to third persons (whether such
arises before or after such withdrawal), including Environmental Liabilities and
Continuing Obligations. The withdrawing Participant’s share of such liabilities
shall be equal to its Participating Interest at the time such liability was
incurred, after first taking into account any reduction, readjustment, and
restoration of Participating Interests under Sections 6.2, 9.5, 9.6 and 10.5.

UUU.  Disposition of Assets on Termination. Promptly after termination under
Sections 12.1 or 12.2, the Manager shall take all action necessary to wind up
the activities of the Business. All costs and expenses incurred in connection
with the termination of the Business shall be expenses chargeable to the
Business Account.

VVV.  Non-Compete Covenants. Neither a Participant that withdraws pursuant to
Section 12.3, or is deemed to have withdrawn pursuant to Sections 5.2, 6.3 or
10.5, nor any Affiliate of such a Participant, shall directly or indirectly
acquire any interest or right to explore or mine, or both, on any property any
part of which is within the Area of Interest for 12 months

 

41

 

 

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

after the effective date of withdrawal. If a withdrawing Participant, or the
Affiliate of a withdrawing Participant, breaches this Section 12.6, such
Participant shall be obligated to offer to convey to the non-withdrawing
Participant, without cost, any such property or interest so acquired (or ensure
its Affiliate offers to convey the property or interest to the non-withdrawing
Participant, if the acquiring party is the withdrawing Participant’s Affiliate).
Such offer shall be made in writing and can be accepted by the non-withdrawing
Participant at any time within 10 days after the offer is received by such
non-withdrawing Participant. Failure of a Participant’s Affiliate to comply with
this Section 12.6 shall be a breach by such Participant of this Agreement.

WWW.           Right to Data After Termination. After termination of the
Business pursuant to Sections 12.1 or 12.2, each Participant shall be entitled
to make copies of all applicable information acquired hereunder before the
effective date of termination not previously furnished to it, but a terminating
or withdrawing Participant shall not be entitled to any such copies after any
other termination or withdrawal.

XXX.  Continuing Authority. On termination of the Joint Venture under Sections
12.1, 12.2 or 12.3 or the deemed withdrawal of either Participant pursuant to
Section 10.5, the Participant which was the Manager prior to such termination or
withdrawal (or the other Participant in the event of a withdrawal by the
Manager) shall have the power and authority to do all things on behalf of both
Participants which are reasonably necessary or convenient to: (a) wind up
Operations and (b) complete any transaction and satisfy any obligation,
unfinished or unsatisfied, at the time of such termination or withdrawal, if the
transaction or obligation arises out of Operations prior to such termination or
withdrawal. The Manager shall have the power and authority to grant or receive
extensions of time or change the method of payment of an already existing
liability or obligation, prosecute and defend actions on behalf of both
Participants and the Joint Venture , encumber Assets, and take any other
reasonable action in any matter with respect to which the former Participants
continue to have, or appear or are alleged to have, a common interest or a
common liability.

ARTICLE XIII

ACQUISITIONS WITHIN AREA OF INTEREST

YYY.  General. Any interest or right to acquire any interest in real property
within the Area of Interest either acquired or proposed to be acquired during
the term of this Agreement by or on behalf of either Participant (“Acquiring
Participant”) or any Affiliate of such Participant shall be subject to the terms
and provisions of this Agreement. Barrick and MGC and their respective
Affiliates for their separate account shall be free to acquire lands and
interests in lands outside the Area of Interest and to locate mining claims
outside the Area of Interest. Failure of any Affiliate of either Participant to
comply with this Article XIII shall be a breach by such Participant of this
Agreement.

ZZZ.   Acquisitions During Exploration Period. During the Exploration Period,
Barrick shall promptly notify MGC of any acquisitions by Barrick of any
interests in real property wholly or partially within the Area of Interest, and
all such interests shall automatically

 

42

 

 

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

become part of the Properties and subject to this Agreement. Barrick may include
the costs of such acquisitions as Exploration Expenditures.

AAAA.           Notice to Non-Acquiring Participant. If the Participants have
entered into a joint venture, than the remaining provisions of this Article XIII
shall apply. Within 15 days after the acquisition or proposed acquisition, as
the case may be, of any interest or the right to acquire any interest in real
property or water rights wholly or partially within the Area of Interest (except
real property acquired by the Manager pursuant to a Program), the Acquiring
Participant shall notify the other Participant of such acquisition by it or its
Affiliate; provided further that if the acquisition of any interest or right to
acquire any interest pertains to real property or water rights partially within
the Area of Interest, then all such real property (i.e., the part within the
Area of Interest and the part outside the Area of Interest) shall be subject to
this Article XIII. The Acquiring Participant’s notice shall describe in detail
the acquisition, the acquiring party if that party is an Affiliate, the lands
and minerals covered thereby, any water rights related thereto, the cost
thereof, and the reasons why the Acquiring Participant believes that the
acquisition (or proposed acquisition) of the interest is in the best interests
of the Participants under this Agreement. In addition to such notice, the
Acquiring Participant shall make any and all information concerning the relevant
interest available for inspection by the other Participant.

BBBB.Option Exercised. Within 30 days after receiving the Acquiring
Participant’s notice, the other Participant may notify the Acquiring Participant
of its election to accept a proportionate interest in the acquired interest
equal to its Participating Interest. Promptly upon such notice, the Acquiring
Participant shall convey or cause its Affiliate to convey to the Participants,
in proportion to their respective Participating Interests, by special warranty
deed with title held as described in Section 3.4, all of the Acquiring
Participant’s (or its Affiliate’s) interest in such acquired interest, free and
clear of all Encumbrances arising by, through or under the Acquiring Participant
(or its Affiliate) other than those to which both Participants have agreed. The
acquired interests shall become a part of the Properties for all purposes of
this Agreement immediately upon such notice. The other Participant shall
promptly pay to the Acquiring Participant its proportionate share of the
latter’s actual out of pocket acquisition costs.

CCCC.Option Not Exercised. If the other Participant does not give such notice
within the 30-day period set forth in Section 13.4, it shall have no interest in
the acquired interests, and the acquired interests shall not be a part of the
Assets or continue to be subject to this Agreement.

DDDD.           Water Rights. If either Participant acquires any water rights
for the use on or for the benefit of the Properties, that Participant shall
contribute those acquired water rights for the benefit of the Business, and
shall contribute those water rights to the Business, or if such water rights are
acquired by Barrick and Barrick does not complete its Initial Contribution,
Barrick shall convey such water rights to MGC.

 

43

 

 

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

ARTICLE XIV

ABANDONMENT AND SURRENDER OF PROPERTIES

Either Participant may request the Management Committee to authorize the Manager
to surrender or abandon part or all of the Properties. If the Management
Committee does not authorize such surrender or abandonment, or authorizes any
such surrender or abandonment over the objection of either Participant, the
Participant that desires to surrender or abandon shall assign to the objecting
Participant, by special warranty deed and without cost to the objecting
Participant, all of the abandoning Participant’s interest in the Properties
sought to be abandoned or surrendered, free and clear of all Encumbrances
created by, through or under the abandoning Participant other than those to
which both Participants have agreed. Upon the assignment, such properties shall
cease to be part of the Properties. The Participant that desires to abandon or
surrender shall remain liable for its share (determined by its Participating
Interest as of the date of such abandonment, after first taking into account any
reduction, readjustment and restoration of Participating Interest under
Sections 6.2, 9.5, 9.6 or 10.5) of any liability with respect to such
Properties, including, without limitation, Continuing Obligations, Environmental
Liabilities and Environmental Compliance, whether accruing before or after such
abandonment, arising out of activities prior to the Effective Date and out of
Operations conducted prior to the date of such abandonment, regardless of when
any funds may be expended to satisfy such liability.

ARTICLE XV

TRANSFER OF INTEREST; PREEMPTIVE RIGHT

EEEE. General. A Participant shall have the right to Transfer to a third party
an interest in its Participating Interest, including an interest in this
Agreement or the Assets, solely as provided in this Article XV.

FFFF.  Limitations on Free Transferability. Any Transfer by either Participant
under Section 15.1 shall be subject to the following limitations:

 

1.

Neither Participant shall Transfer any interest in this Agreement or the Assets
(including, but not limited to, any royalty, profits, or other interest in the
Products) except in conjunction with the Transfer of part or all of its
Participating Interest;

 

2.

No transferee of all or any part of a Participant’s Participating Interest shall
have the rights of a Participant unless and until the transferring Participant
has provided to the other Participant notice of the Transfer, and, except as
provided in Subsections 15.2(f) and 15.2(g), the transferee, as of the effective
date of the Transfer, has committed in writing to assume and be bound by this
Agreement to the same extent as the transferring Participant;

 

44

 

 

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

 

3.

Neither Participant, without the consent of the other Participant, shall make a
Transfer that shall violate any Law, or result in the cancellation of any
permits, licenses, or other similar authorization;

 

4.

No Transfer permitted by this Article XV shall relieve the transferring
Participant of its share of any liability, whether accruing before or after such
Transfer, which arises out of Operations conducted prior to such Transfer or
exists on the Effective Date;

 

5.

In the event of a Transfer of less than all of a Participating Interest, the
transferring Participant and its transferee shall act and be treated as one
Participant; provided however, that in order for such Transfer to be effective,
the transferring Participant and its transferee must first:

(i)        agree, as between themselves, that one of them is authorized to act
as the sole agent (“Agent”) on their behalf with respect to all matters
pertaining to this Agreement and the Business; and

(ii)       notify the other Participant of the designation of the Agent, and in
such notice warrant and represent to other Participant that:

(A)      the Agent has the sole authority to act on behalf of, and to bind, the
transferring Participant and its transferee with respect to all matters
pertaining to this Agreement and the Business;

(B)      the other Participant may rely on all decisions of, notices and other
communications from, and failures to respond by, the Agent, as if given (or not
given) by the transferring Participant and its transferee; and

(C)      all decisions of, notices and other communications from, and failures
to respond by, the other Participant to the Agent shall be deemed to have been
given (or not given) to the transferring Participant and its transferee.

The transferring Participant and its transferee may change the Agent (but such
replacement must be one of them) by giving notice to the other Participant,
which notice must conform to Subsection 15.2(e)(ii).

 

6.

If the Transfer is the grant of an Encumbrance in a Participating Interest to
secure a loan or other indebtedness of either Participant in a bona fide
transaction, other than a transaction approved unanimously by the Management
Committee or Project Financing approved by the Management Committee, such
Encumbrance shall be granted only in connection with such Participant’s
financing payment or performance of that Participant’s obligations under this
Agreement and shall be

 

45

 

 

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

subject to the terms of this Agreement and the rights and interests of the other
Participant hereunder (including without limitation under Section 6.7). Any such
Encumbrance shall be further subject to the condition that the holder of such
Encumbrance (“Chargee”) first enter into a written agreement with the other
Participant in form satisfactory to the other Participant, acting reasonably,
binding upon the Chargee, to the effect that:

(iii)      the Chargee shall not enter into possession or institute any
proceedings for foreclosure or partition of the encumbering Participant’s
Participating Interest and that such Encumbrance shall be subject to the
provisions of this Agreement;

(iv)      the Chargee’s remedies under the Encumbrance shall be limited to the
sale of the whole (but only of the whole) of the encumbering Participant’s
Participating Interest to the other Participant, or, failing such a sale, at a
public auction to be held at least 15 days after prior notice to the other
Participant, such sale to be subject to the purchaser entering into a written
agreement with the other Participant whereby such purchaser assumes all
obligations of the encumbering Participant under the terms of this Agreement.
The price of any preemptive sale to the other Participant shall be the remaining
principal amount of the loan plus accrued interest and related expenses, and
such preemptive sale shall occur within 60 days of the Chargee’s notice to the
other Participant of its intent to sell the encumbering Participant’s
Participating Interest. Failure of a sale to the other Participant to close by
the end of such period, unless failure is caused by the encumbering Participant
or by the Chargee, shall permit the Chargee to sell the encumbering
Participant’s Participating Interest at a public sale; and

(v)       the charge shall be subordinate to any then-existing debt, including
Project Financing previously approved by the Management Committee, encumbering
the transferring Participant’s Participating Interest;

 

7.

If a sale or other commitment or disposition of Products or proceeds from the
sale of Products by either Participant upon distribution to it pursuant to
Article XI creates in a third party a security interest by Encumbrance in
Products or proceeds therefrom prior to such distribution, such sales,
commitment or disposition shall be subject to the terms and conditions of this
Agreement including, without limitation, Section 6.7.

GGGG.           Preemptive Right. Any Transfer by either Participant under
Section 15.1 and any Transfer by an Affiliate of Control of either Participant
shall be subject to a preemptive right of the other Participant to the extent
provided in Exhibit G. Failure of a Participant’s

 

46

 

 

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

Affiliate to comply with this Article XV and Exhibit G shall be a breach by such
Participant of this Agreement.

ARTICLE XVI

DISPUTES

HHHH.           Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Nevada, without regard
for any conflict of laws or choice of laws principles that would permit or
require the application of the laws of any other jurisdiction.

IIII.     Dispute Resolution. Any dispute, controversy or claims arising out of
or relating to this Agreement or the breach, termination, interpretation or
invalidity thereof (a “Dispute”) shall be resolved as follows:

 

1.

The Participants shall endeavor for a period of two weeks to resolve the Dispute
by negotiation. This period may be extended by agreement of the Participants.

 

2.

If negotiations are unsuccessful, the Participants shall, at the request of
either Participant, attempt to mediate the Dispute before a mutually acceptable
mediator. The mediation shall be completed within three weeks of the request for
mediation unless the Participants extend the period in writing.

 

3.

In the event the Dispute is not successfully mediated, the Participants agree to
submit the Dispute to binding arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The arbitration shall
be administered by the American Arbitration Association. Unless otherwise agreed
by the Participants, there shall be one arbitrator who shall be a person with an
expertise or background in the subject matter of the Dispute. If the
Participants are unable to select an arbitrator within 30 days of the notice of
arbitration, the arbitrator shall be selected by the American Arbitration
Association. The place of arbitration shall be Reno, Nevada, or another location
mutually agreed upon by the Participants. The arbitrator shall render a decision
in writing not more than 6 months after the appointment of the arbitrator. The
arbitrator’s decision shall be final and binding on the Participants and not
subject to appeal or review. The prevailing Participant shall be entitled to an
award of costs and attorneys’ fees unless the arbitrator determines that each
Participant should bear its own costs and share the common costs of arbitration.

ARTICLE XVII

CONFIDENTIALITY, OWNERSHIP, USE

AND DISCLOSURE OF INFORMATION

JJJJ.    Business Information. All Business Information shall be owned jointly
by the Participants as their Participating Interests are determined pursuant to
this Agreement. Both

 

47

 

 

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

before and after the termination of the Business, all Business Information may
be used by either Participant for any purpose, whether or not competitive with
the Business, without consulting with, or obligation to, the other Participant.
Except as provided in Sections 17.3 and 17.4, or with the prior written consent
of the other Participant, each Participant shall keep confidential and not
disclose to any third party or the public any portion of the Business
Information that constitutes Confidential Information.

KKKK.           Participant Information. In performing its obligations under
this Agreement, neither Participant shall be obligated to disclose any
Participant Information. If a Participant elects to disclose Participant
Information in performing its obligations under this Agreement, such Participant
Information, together with all improvements, enhancements, refinements and
incremental additions to such Participant Information that are developed,
conceived, originated or obtained by either Participant in performing its
obligations under this Agreement (“Enhancements”), shall be owned exclusively by
the Participant that originally developed, conceived, originated or obtained
such Participant Information. Each Participant may use and enjoy the benefits of
such Participant Information and Enhancements in the conduct of the Business
hereunder, but the Participant that did not originally develop, conceive,
originate or obtain such Participant Information may not use such Participant
Information and Enhancements for any other purpose. Except as provided in
Section 17.4, or with the prior written consent of the other Participant, which
consent may be withheld in such Participant’s sole discretion, each Participant
shall keep confidential and not disclose to any third party or the public any
portion of Participant Information and Enhancements owned by the other
Participant that constitutes Confidential Information.

LLLL. Permitted Disclosure of Confidential Business Information. Either
Participant may disclose Business Information that is Confidential Information:

 

1.

to a Participant’s officers, directors, partners, members, employees,
Affiliates, shareholders, agents, attorneys, accountants, consultants,
contractors, subcontractors or advisors, for the sole purpose of such
Participant’s performance of its obligations under this Agreement;

 

2.

to any party to whom the disclosing Participant contemplates a Transfer of all
or any part of its Participating Interest, for the sole purpose of evaluating
the proposed Transfer;

 

3.

to any actual or potential lender, underwriter or investor for the sole purpose
of evaluating whether to make a loan to or investment in the disclosing
Participant (or any of its Affiliates); or

 

4.

to a third party with whom the disclosing Participant (or any of its Affiliates)
contemplates any independent business activity or operation.

The Participant disclosing Confidential Information pursuant to this Section
17.3, shall disclose such Confidential Information to only those parties who
have a bona fide need to have access to

 

48

 

 

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

such Confidential Information for the purpose for which disclosure to such
parties is permitted under this Section 17.3 and who have agreed in writing
supplied to, and enforceable by, the other Participant to protect the
Confidential Information from further disclosure, to use such Confidential
Information solely for such purpose and to otherwise be bound by the provisions
of this Article XVII. Such writing shall not preclude parties described in
Subsection 17.3(b) from discussing and completing a Transfer with the other
Participant. The Participant disclosing Confidential Information shall be
responsible and liable for any use or disclosure of the Confidential Information
by such parties in violation of this Agreement and such other writing.

MMMM.        Disclosure Required By Law. Notwithstanding anything contained in
this Article XVII, a Participant or any of its Affiliates may disclose any
Confidential Information if, in the reasonable opinion of the disclosing
Participant’s legal counsel: (a) such disclosure is legally required to be made
in a judicial, administrative or governmental proceeding pursuant to a valid
subpoena or other applicable order; or (b) such disclosure is legally required
to be made pursuant to the rules or regulations of a stock exchange or similar
trading market applicable to the disclosing Participant or any of its
Affiliates.

Prior to any disclosure of Confidential Information under this Section 17.4, the
disclosing Participant shall give the other Participant at least 10 days prior
written notice (unless less time is permitted by such rules, regulations or
proceeding) and, in making such disclosure, the disclosing Participant shall
disclose only that portion of Confidential Information required to be disclosed
and shall take all reasonable steps to preserve the confidentiality thereof,
including, without limitation, obtaining protective orders and supporting the
other Participant in intervention in any such proceeding.

NNNN.           Public Announcements. Prior to making or issuing any press
release or other public announcement or disclosure of Business Information that
is not Confidential Information, a Participant (or any of its Affiliates) shall
first consult with the other Participant as to the content and timing of such
announcement or disclosure, unless in the good faith judgment of such
Participant, there is not sufficient time to consult with the other Participant
before such announcement or disclosure must be made under applicable Laws; but
in such event, the disclosing Participant shall notify the other Participant, as
soon as possible, of the pendency of such announcement or disclosure, and it
shall notify the other Participant before such announcement or disclosure is
made if at all reasonably possible. Any press release or other public
announcement or disclosure to be issued by either Participant (or any of its
Affiliates) relating to this Business shall also identify the other Participant.
Notwithstanding any of the provisions of the Article XVII to the contrary, the
Participants agree that MGC (or any Affiliate of MGC) may issue quarterly press
releases based on the information provided by Barrick to MGC in the quarterly
reports referred to in Subsection 5.1(a)(ii), in accordance with the provisions
of this Section 17.5.

OOOO.           NI 43-101. Where either Participant or any Affiliate of either
Participant (collectively, the “Discloser”) desires or is required by National
Instrument 43-101 Standards of

 

49

 

 

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

Disclosure for Mineral Projects as amended from time to time (“NI 43-101”) to
file a Technical Report with respect to the Properties:

 

1.

the Discloser may prepare and file such a Technical Report and include in that
Technical Report all information (including Confidential Information) concerning
the Assets and the Properties that is required by Law or applicable stock
exchange rule, notwithstanding any of the provisions of this Article XVI to the
contrary;

 

2.

the Discloser shall not designate the other Participant or any associate,
Affiliate or employee of or retained by the other Participant, or any Qualified
Person of the other Participant, as the Qualified Person of the Discloser,
without the prior written consent of the other Participant;

 

3.

the Discloser shall be responsible for the cost of preparing or providing the
Technical Report;

 

4.

the Discloser shall be entitled to access to all pertinent information related
to the Assets as necessary for it to prepare the Technical Report; and

 

5.

The information generated by a Participant concerning the Assets and Properties
may contain estimates and forecasts that are interpretive and/or speculative in
nature. The accuracy of such estimates and forecasts generated by one
Participant is in no manner warranted to the other Participant. Instead, each
Discloser shall rely only on its own forecasts, interpretations, and estimates
for its business planning and reporting purposes and may release such forecasts,
interpretations and estimates only so long as they are clearly identified as
having been prepared by the Discloser.

ARTICLE XVIII

GENERAL PROVISIONS

PPPP.  Notices. All notices, payments and other required or permitted
communications (“Notices”) to either Participant shall be in writing, and shall
be addressed respectively as follows:

If to MGC:

 

MGC Resources Inc.

600 Lola Street Suite 10

Helena, Montana 59601

 

Attention:

President

 

Telephone:

(406) 475-9595

 

Facsimile:

(406) 475-9596

 

50

 

 

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

With a Copy to:

 

Midway Gold Corp.

Unit 1 – 15782 Marine Drive

White Rock, British Columbia, Canada

V4B 1E6

 

Attention:

Corporate Secretary

 

Telephone:

(604) 536-2711

 

Facsimile:

(604) 536-2788

If to Barrick:

 

Barrick Gold Exploration Inc.

293 Spruce Road

Elko, Nevada 89801

 

Attention:

Vice President, Exploration

 

Telephone:

(775) 738-6751

 

Facsimile:

(775) 738-2804

With a Copy to:

 

Barrick Gold of North America, Inc.

136 East South Temple Street, Suite 1800

Salt Lake City, Utah 84111

 

Attention:

Regional Land Manager, North America

 

Telephone:

(801) 990-3900

 

Facsimile:

(801) 366-9242

All Notices shall be given (a) by personal delivery to the Participant, (b) by
facsimile, (c) by registered or certified mail return receipt requested; or (d)
by overnight or other express courier service. All Notices shall be effective
and shall be deemed given on the date of receipt at the principal address if
received during normal business hours, and, if not received during normal
business hours, on the next business day following receipt. Either Participant
may change its address by Notice to the other Participant.

QQQQ.           Gender. The singular shall include the plural, and the plural
the singular wherever the context so requires, and the masculine, the feminine,
and the neuter genders shall be mutually inclusive.

RRRR.Currency. All references to “dollars” or “$” herein shall mean lawful
currency of the United States of America.

SSSS.  Headings. The subject headings of the Sections and Subsections of this
Agreement and the Paragraphs and Subparagraphs of the Exhibits to this Agreement
are included

 

51

 

 

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

for purposes of convenience only, and shall not affect the construction or
interpretation of any of its provisions.

TTTT. Waiver. The failure of either Participant to insist on the strict
performance of any provision of this Agreement or to exercise any right, power
or remedy upon a breach hereof shall not constitute a waiver of any provision of
this Agreement or limit such Participant’s right thereafter to enforce any
provision or exercise any right.

UUUU.           Modification. No modification of this Agreement shall be valid
unless made in writing and duly executed by both Participants.

VVVV.           Force Majeure. Except for the obligation to make payments when
due hereunder, the obligations of a Participant shall be suspended to the extent
and for the period that performance is prevented by any cause, whether
foreseeable or unforeseeable, beyond its reasonable control, including, without
limitation, labor disputes (however arising and whether or not employee demands
are reasonable or within the power of the Participant to grant); acts of God;
Laws, instructions or requests of any government or governmental entity;
judgments or orders of any court; inability to obtain on reasonably acceptable
terms any public or private license, permit or other authorization; curtailment
or suspension of activities to remedy or avoid an actual or alleged, present or
prospective violation of Environmental Laws; action or inaction by any federal,
state or local agency that delays or prevents the issuance or granting of any
approval or authorization required to conduct Operations beyond the reasonable
expectations of the Participant seeking the approval or authorization
(including, without limitation, a failure to complete any review and analysis
required by the National Environmental Policy Act or any similar state law
within 36 months of initiation of that process); acts of war or conditions
arising out of or attributable to war, whether declared or undeclared; riot,
civil strife, insurrection or rebellion; fire, explosion, earthquake, storm,
flood, sink holes, drought or other adverse weather condition; delay or failure
by suppliers or transporters of materials, parts, supplies, services or
equipment or by contractors’ or subcontractors’ shortage of, or inability to
obtain, labor, transportation, materials, machinery, equipment, supplies,
utilities or services; accidents; breakdown of equipment, machinery or
facilities; actions by native rights groups, environmental groups, or other
similar special interest groups; or any other cause whether similar or
dissimilar to the foregoing. The affected Participant shall promptly give notice
to the other Participant of the suspension of performance, stating therein the
nature of the suspension, the reasons therefor, and the expected duration
thereof. The affected Participant shall resume performance as soon as reasonably
possible. During the period of suspension the obligations of both Participants
to advance funds pursuant to Section 10.2 shall be reduced to levels consistent
with then current Operations.

WWWW.        Rule Against Perpetuities. The Participants do not intend that
there shall be any violation of the Rule Against Perpetuities, the Rule Against
Unreasonable Restraints on the Alienation of Properties, or any similar rule.
Accordingly, if any right or option to acquire any interest in the Properties,
in a Participating Interest, in the Assets, or in any real property exists under
this Agreement, such right or option must be exercised, if at all, so as to vest
such

 

52

 

 

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

interest within time periods permitted by applicable rules. If, however, any
such violation should inadvertently occur, the Participants hereby agree that a
court shall reform that provision in such a way as to approximate most closely
the intent of the Participants within the limits permissible under such rules.

XXXX.           Further Assurances. Each of the Participants shall take, from
time to time and without additional consideration, such further actions and
execute such additional instruments as may be reasonably necessary or convenient
to implement and carry out the intent and purpose of this Agreement or as may be
reasonably required by lenders in connection with Project Financing.

YYYY.           Entire Agreement; Successors and Assigns. This Agreement
contains the entire understanding of the Participants and supersedes all prior
agreements and understandings between the Participants relating to the subject
matter hereof. This Agreement shall be binding upon and inure to the benefit of
the respective successors and permitted assigns of the Participants.

ZZZZ. Memorandum. A Memorandum or short form of this Agreement, and at the
request of either Participant after completion by Barrick of its Initial
Contribution, a Financing Statement(s) (to which copies of the Memorandum or
short form of this Agreement shall be attached) shall be prepared by the
Manager, executed and acknowledged by both Participants, and delivered to the
Manager for recording and filing in those appropriate recording districts and
Uniform Commercial Code filing offices as may be necessary to provide
constructive notice of this Agreement and the rights and obligations of the
Participants hereunder. The Manager shall record and file in the proper
recording districts, county recording offices and Uniform Commercial Code filing
offices, all such documents delivered to it by the Participants. Unless both
Participants agree, this Agreement shall not be recorded.

18.12   Counterparts. This Agreement may be executed in any number of
counterparts, and it shall not be necessary that the signatures of both
Participants be contained on any counterpart. Each counterpart shall be deemed
an original, but all counterparts together shall constitute one and the same
instrument.            

18.13   Inflation/Deflation of Certain Amounts. The dollar amounts set forth in
the following Sections shall be increased or decreased each calendar year by the
percentage of increase or decrease in the Cost Index for the each calendar year
for which the adjustment is made: Sections 8.2(g) and 8.2(i) and Exhibit
B--Sections 2.6 and 2.9.

 

53

 

 

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

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date.

MGC RESOURCES INC.

 

 

 

By

/s/ “Alan D. Branham”

 

Alan D. Branham

 

President

BARRICK GOLD EXPLORATION INC.

 

 

 

By

/s/ “Edward L. Cope”

 

Edward L. Cope

 

Vice President, Exploration

 

 

54

 

 

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

EXHIBIT A

To

EXPLORATION, DEVELOPMENT AND MINE OPERATING AGREEMENT

By And Between

MGC RESOURCES INC.

And

BARRICK GOLD EXPLORATION INC.

ASSETS

1.1

PROPERTIES

 

 

A.

FEE LANDS

 

1.

Mining Deed dated May 5, 2006 between Seymork Investments Ltd., a British
Columbia corporation (Seymork) and MGC Resources Inc., a Nevada corporation,
recorded in Book 408 under Pages 207-213 in the records of Pershing County,
Nevada subject to all reservations and encumbrances set forth therein, covering
the following described lands:

Township 29 North, Range 34 East, MDM, Pershing County, Nevada.

 

Section 25: E½, N½NW¼, SE¼NW¼, E½NE¼SW¼, E½SE¼SW¼.

 

Note:

Parcel contains no surface rights and 75% interest in mineral estate. 480 gross
mineral acres, 360 net mineral acres.

Section 27: SE¼, SE¼SW¼.

 

Note:

100% surface and minerals. 200 gross/net acres.

Section 27: E½NE¼.

 

Note:

Parcel contains no surface rights and 75% interest in mineral estate. 80 gross
mineral acres, 60 net mineral acres.

Section 35: W½NW¼, SE¼NW¼. 100% surface and minerals. 120

gross/net acres

Section 35: NE¼NW¼.

 

Note:

Parcel contains no surface rights and 75% interest in mineral estate. 40 gross
mineral acres, 30 net mineral acres.

 

The Property acquired by MGC pursuant to this Mining Deed is burdened by a 3%
NSR royalty payable to Seymork.

 

 

EXHIBIT A

PAGE 1

 

 

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

 

2.

Corrected Grant, Bargain and Sale Deed (Deed) dated November 14, 2005 between
Nevada Land and Resource Company, LLC, a Nevada limited liability company and
MGC Resources Inc. a Nevada corporation, recorded in Book 402 under Pages
815-818 in the records of Pershing County, Nevada subject to all reservations
and encumbrances set forth therein, covering the surface estate only in the
following described lands:

Township 28 North, Range 34 East, MDM, Pershing County, Nevada.  

 

Section 3: Lots 3,4,5,6,7,8,9,10,11,12, E½ of 15, Lot 16, NE¼SE¼, E½NW¼SE¼,
N½SE¼SE¼, NE¼SW¼SE¼.

 

Note:

Parcel is subject to that certain Minerals Lease dated May 1, 1986 between
Southern Pacific Land Company, a California corporation and SFP Minerals
Corporation, a Nevada corporation. In addition, in the Deed the Grantor reserved
broad rights to use the surface to conduct exploration, development and mining
activities.

 

 

3.

Grant, Bargain and Sale Deed dated August 29, 2006 between Barry Sentman and
Kerry S. Pilot, Co-Successor Trustees of the Survivor’s Trust Share of the
Sentman Family Trust dated July 9, 1990, and MGC Resources Inc. a Nevada
corporation, recorded in Book 412 under Pages 673-676 in the records of Pershing
County, Nevada subject to all reservations and encumbrances set forth therein,
covering the following described lands:

Township 29 North, Range 34 East, MDM, Pershing County, Nevada.  

 

Section 35: NE¼NW¼.

 

Note:

Parcel contains 100% surface rights and 25% interest in mineral estate. 40 gross
mineral acres, 10 net mineral acres.

 

 

B.

UNPATENTED MINING CLAIMS

SEE ATTACHED EXHIBIT A-1 (CLAIM LIST)

 

C.

LEASES AND AGREEMENTS

 

1.

Mining Deed (with reservation and conveyance of royalty) dated August 13, 2007
between Paul G. Schmidt and MGC Resources Inc. a Nevada corporation, recorded in
Book 427, Page 443-449 in the records of Pershing County, Nevada subject to all
reservations and encumbrances set forth therein, covering the following
described lands:

 

 

EXHIBIT A

PAGE 2

 

 

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

Township 29 North, Range 34 East, MDM, Pershing County, Nevada.

 

Unpatented lode mining claims in Sections 33, 34 and 35.

SV 1 – 44 as listed on the EXHIBIT A-1 (CLAIM LIST).

 

The claims acquired by MGC pursuant to this Mining Deed are burdened by a
primary royalty on any commercial production of gold exceeding 500,000 ounces on
a sliding scale NSR which varies from 2.0% to 7.0% percent (according to the
price of gold) payable to Schmidt. Furthermore, MGC granted Schmidt a one
percent (1.0%) NSR perimeter royalty on lands owned by MGC or an affiliate of
MGC and located within intersecting lines drawn parallel to and one-half (1/2)
mile from the outer boundaries of the claims, but excluding the area within the
claims themselves.

 

 

2.

Purchase and Sale Agreement dated January 25, 2006 between Coeur Rochester,
Inc., a Delaware corporation (Coeur) and MGC Resources Inc., a Nevada
corporation, unrecorded. Mining Deed (with reservation of royalty) dated
February 1, 2006 between Coeur Rochester, Inc., a Delaware corporation and MGC
Resources Inc., a Nevada corporation, recorded in Book 404 under Pages 862-869
in the records of Pershing County, Nevada, covering certain unpatented lode
mining claims as listed in the attached EXHIBIT A-1 (CLAIM LIST), subject to
that certain Deed and Assignment dated December 15, 1983 between Asarco
Incorporated, a New Jersey corporation, and Coeur d’Alene Mines Corporation, an
Idaho corporation, as recorded in Book 182 under Pages 440-447 in the records of
Pershing County, Nevada. In the February 1, 2006 Mining Deed, Coeur reserved a
3% NSR royalty which burdens the claims covered thereby.

 

3.

Mineral Lease Agreement and Option to Purchase dated July 17, 2006 between Dave
Rowe and Randall Stoeberl (Lessor) and MGC Resources Inc. a Nevada corporation
(Lessee). Covers the PS Claims as listed on the attached EXHIBIT A-1 (CLAIM
LIST). The PS Claims covered by this lease are burdended by a 3% NSR royalty
payable to the Lessor.

 

4.

Mineral Lease Agreement and Option to Purchase dated June 1, 2007 between George
E. Duffy Jr. (Lessor) and MGC Resources Inc. a Nevada corporation (Lessee).
Covers the Duffy Claims as listed on the attached EXHIBIT A-1 (CLAIM LIST).

 

5.

Option Agreement dated September 1, 2003 between Echo Bay Exploration Inc., a
Delaware corporation (Optionor) and MGC Resources Inc., a Nevada corporation
(Optionee) (successor in interest to Midway Gold Corp. a British Columbia
corporation). Covers certain SV Claims as listed on the attached

 

 

EXHIBIT A

PAGE 3

 

 

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

EXHIBIT A-1 (CLAIM LIST). The SV Claims covered by the Option Agreement are
burdened by a 2% NSR royalty payable to the Optionor.

 

6.

Mineral Lease Agreement and Option to Purchase dated October 30, 2006 between
Dale Chabino and Diana Chabino (Lessor) and MGC Resources Inc. a Nevada
corporation (Lessee). Covers the Freedom Claims as listed on the attached
EXHIBIT A-1 (CLAIM LIST). The Freedom Claims coverd by this lease are burdened
by a 3% NSR royalty payable to the Lessor.

 

7.

Mineral Lease Agreement and Option to Purchase dated April 25, 2006 between
Lamonte J. Duffy (Lessor) and MGC Resources Inc. a Nevada corporation (Lessee).
Covers the Duffy and certain SV Claims as listed on the attached EXHIBIT A-1
(CLAIM LIST). The Claims covered by this lease are burdened by a 3% NSR royalty
payable to the Lessor.

1.2

PERSONAL PROPERTY

 

None of Record

 

1.3

EXISTING PERMITS

 

Nevada Division of Water Resources exploration permit numbers NV 76255 and NV
76256, expiring February 1, 2013.

 

 

BLM Notice #

N-82417 (Limerick Basin)

 

BLM Notice #

N-82698 (American Canyon Project)

 

BLM Notice #

N-84013 (Fitting Exploration)

 

BLM Notice #

N-84038 (Golden Gate Exploration)

 

BLM Notice #

N-85816 (Dry Gulch)

 

BLM Notice #

N-85817 (North Ridge)

 

BLM Plan of Operations #

N-81071 (Spring Valley Exploration)

 

1.4

ADDITIONAL EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES

 

A.        Deed and Assignment dated December 15, 1983 between Asarco
Incorporated, a New Jersey corporation and Coeur d’Alene Mines Corporation, an
Idaho corporation as to the mineral royalty reservation retained by Asarco
Incorporated recorded in Book 182 under Pages 440-447 in the records of Pershing
County, Nevada. Covering the Crown Hills #7 through Crown Hills #10 (NMC39574
through NMC39595) and HMS #4 through HMS #6 (NMC140862 through NMC140864) and
HMS # 84 through HMS # 87 (NMC140941 through NMC140944) unpatented lode claims.

 

 

EXHIBIT A

PAGE 4

 

 

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

B.        License No. SPL-4157 dated February 14, 1986 by and between MGC
Resources Inc., a Nevada corporation (Licensor) (successor in interest to
Southern Pacific Land Company, a California corporation) and Coeur d’Alene Mines
Corp., an Idaho corporation (Licensee) granting rights for construction,
reconstruction, maintenance, and use of a pipeline, electric powerline, and
telephone line over and across Lots 7, 8, 9, 10, E½ of Lot 15, Lot 16, E½NW¼SE¼
and NE¼SW¼SE¼ of Section 3, Township 28 North, Range 34 East, MDM, Pershing
County, Nevada.

C.        Wind Energy Facilities Right-of-Way, N-77992 (Humboldt Range
Anemometer Tower Site and Wind Energy Testing Project Area), held by Power
Partners Southwest LLC, a Delaware corporation, covering the E½ of Section 33,
Township 29 North, Range 34 East; SW¼ of Section 3, and Lots 3, 4, 5, 6, 11, 12,
13, 14, and SE¼ of Section 4, the W½ of Section 10, Township 28 North, Range 34
East, MDM, Pershing County, Nevada.

D.        The rights of third parties to use the surface of unpatented mining
claims under the Multiple Surface Use Act of July 23, 1955 (69 Stat. 367, 30
U.S.C. secs. 601-615).

E.        Potentially conflicting/overlapping Terraco (TGC Holdings Ltd.) claims
in Sections 21 through 28, Township 29 North, Range 34 East, MDM, Pershing
County, Nevada.

 

F.

Grazing rights – the property position encompasses the following:

 

1.

Humboldt Herd Area

 

2.

Star Peak Allotment (NV-118)

 

3.

Coal Canyon-Poker Allotment (NV-104)

 

G.

Deeds of Trust

 

1.

Deed of Trust dated March 19, 1998, executed by Seymork Investments Limited, as
Trustor, in favor of Emma Wagner, as Beneficiary, recorded in the official
records of Pershing County, Nevada on March 31, 1998, at Roll 328, Page 636, as
File No. 217715; and

 

2.

Deed of Trust dated March 19, 1998, executed by Seymork Investments Limited, as
Trustor, in favor of Newel B. Knight, Administrator of the Estate of Warren O.
Wagner, as Beneficiary, recorded in the official records of Pershing County,
Nevada on March 31, 1998, at Roll 328, Page 617, as File No. 217714
(collectively, the Deeds of Trust), said Deeds of Trust having been acquired by
mesne conveyances and now being held by MGC Properties Inc. Those Deeds of Trust
burden all of the

 

 

EXHIBIT A

PAGE 5

 

 

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

properties covered by the Mining Deed described in Part 1.1.A of this Exhibit A.

H.        The Mining Lease described in Part 1.1.C.6 of this Exhibit A gives the
Lessor thereunder certain rights to conduct activities on the surface of the
claims covered thereby and to recover minimal ounces of gold.

I.         The Mining Lease described in Part 1.1.C.8 of this Exhibit A gives
the Lessor thereunder certain rights to conduct activities on the surface of the
claims covered thereby and to recover minimal ounces of gold.

J.         Certain preemptive rights and rights to re-acquire claims were
reserved by Coeur in the Purchase and Sale Agreement referred to in Part 1.1.C.2
of this Exhibit A.

K.        Amended Notice of Appeal filed by Emma Wagner on February 25, 2009 in
Case No. CV 06-10030, in the Sixth Judicial District Court for the State of
Nevada in and for the County of Pershing, said case being more particularly
described in Midway Gold Corp.’s Form 10-Q Quarterly Report for the quarterly
period ended September 30, 2008, filed with the U.S. Securities and Exchange
Commission on November 14, 2008.

L.        All liens, claims and encumbrances disclosed in the public records of
Pershing County and the Bureau of Land Management reviewed by Barrick in
conducting due diligence in connection with entering into this Agreement.

.

 

 

EXHIBIT A

PAGE 6

 

 

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

 

 

 

EXHIBIT A-1

To

EXPLORATION, DEVELOPMENT AND MINE OPERATING AGREEMENT

By And Between

MGC RESOURCES INC.

And

BARRICK GOLD EXPLORATION INC.

List of Unpatented Mining Claims 1.1.B cont.

 

 

 

 

 

 

 

 

 

 

 

 

BLM

Location

 

 

 

 

 

 

 

Claim Name

Prefix

BLM #

Date

Twn.

Range

Sec.

County

State

Book

Page

HMS #4

NMC

140862

12/5/1979

28N

34E

11

Pershing

NV

106

179

HMS #5

NMC

140863

12/5/1979

28N

34E

11

Pershing

NV

106

180

HMS #6

NMC

140864

12/5/1979

28N

34E

11

Pershing

NV

106

181

HMS #84

NMC

140941

1/24/1980

28N

34E

14

Pershing

NV

106

258

HMS #85

NMC

140942

1/24/1980

28N

34E

14

Pershing

NV

106

259

HMS #86

NMC

140943

1/25/1980

28N

34E

14

Pershing

NV

106

260

HMS #87

NMC

140944

1/25/1980

28N

34E

14

Pershing

NV

106

261

SDB #1

NMC

349508

9/5/1985

28N

34E

4

Pershing

NV

173

127

SDB #2

NMC

349509

9/5/1985

28N

34E

4

Pershing

NV

173

128

SDB #3

NMC

349510

9/5/1985

28N

34E

4

Pershing

NV

173

129

SDB #4

NMC

349511

9/5/1985

28N

34E

4

Pershing

NV

173

130

SDB #5

NMC

349512

9/6/1985

28N

34E

4

Pershing

NV

173

131

SDB #6

NMC

349513

9/6/1985

28N

34E

4

Pershing

NV

173

132

SDB #7

NMC

349514

9/6/1985

28N

34E

4

Pershing

NV

173

133

SDB #8

NMC

349515

9/6/1985

28N

34E

4

Pershing

NV

173

134

IDA #12

NMC

364282

3/11/1986

28N

34E

8

Pershing

NV

177

124

IDA #13

NMC

364283

3/11/1986

28N

34E

8

Pershing

NV

177

125

IDA #14

NMC

364284

3/11/1986

28N

34E

8

Pershing

NV

177

126

IDA #15

NMC

364285

3/11/1986

28N

34E

8

Pershing

NV

177

127

IDA #16

NMC

364286

3/11/1986

28N

34E

8

Pershing

NV

177

128

IDA #17

NMC

364287

3/11/1986

28N

34E

17

Pershing

NV

177

129

IDA #18

NMC

364288

3/11/1986

28N

34E

8

Pershing

NV

177

130

IDA #19

NMC

364289

3/11/1986

28N

34E

8

Pershing

NV

177

131

IDA #20

NMC

364290

3/11/1986

28N

34E

8

Pershing

NV

177

132

 

 

 

EXHIBIT A-1

PAGE 1

 

 

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

 

 

 

IDA #21

NMC

364291

3/11/1986

28N

34E

8

Pershing

NV

177

133

IDA #22

NMC

364292

3/11/1986

28N

34E

8

Pershing

NV

177

134

IDA #23

NMC

364293

3/11/1986

28N

34E

8

Pershing

NV

177

135

IDA #25

NMC

364295

3/11/1986

28N

34E

8

Pershing

NV

177

137

SHO #3

NMC

364363

3/19/1986

28N

34E

2

Pershing

NV

177

205

SHO #4

NMC

364364

3/18/1986

28N

34E

2

Pershing

NV

177

206

SHO #5

NMC

364365

3/18/1986

28N

34E

3

Pershing

NV

177

207

SHO #6

NMC

364366

3/20/1986

28N

34E

3

Pershing

NV

177

208

SHO #7

NMC

364367

3/20/1986

28N

34E

3

Pershing

NV

177

209

SHO #8

NMC

364368

3/20/1986

28N

34E

3

Pershing

NV

177

210

 

 

 

 

28N

34E

4

 

 

 

 

SHO #9

NMC

364369

3/20/1986

28N

34E

3

Pershing

NV

177

211

 

 

 

 

28N

34E

4

 

 

 

 

SHO #10

NMC

364370

3/20/1986

28N

34E

3

Pershing

NV

177

212

SHO #11

NMC

364371

3/20/1986

28N

34E

3

Pershing

NV

177

213

 

 

 

 

28N

34E

4

 

 

 

 

SHO #12

NMC

364372

3/20/1986

28N

34E

3

Pershing

NV

177

214

SHO #13

NMC

364373

3/20/1986

28N

34E

3

Pershing

NV

177

215

 

 

 

 

28N

34E

4

 

 

 

 

SHO #14

NMC

364374

3/20/1986

28N

34E

3

Pershing

NV

177

216

SHO #15

NMC

364375

3/20/1986

28N

34E

3

Pershing

NV

177

217

 

 

 

 

28N

34E

4

 

 

 

 

SHO #16

NMC

364376

3/20/1986

28N

34E

3

Pershing

NV

177

218

SHO #17

NMC

364377

3/20/1986

28N

34E

3

Pershing

NV

177

219

 

 

 

 

28N

34E

4

 

 

 

 

SHO #18

NMC

364378

3/20/1986

28N

34E

3

Pershing

NV

177

220

SHO #19

NMC

364379

3/20/1986

28N

34E

3

Pershing

NV

177

221

 

 

 

 

28N

34E

4

 

 

 

 

SHO #20

NMC

364380

3/20/1986

28N

34E

3

Pershing

NV

177

222

SHO #21

NMC

364381

3/20/1986

28N

34E

3

Pershing

NV

177

223

SHO #22

NMC

364382

3/20/1986

28N

34E

3

Pershing

NV

177

224

SHO #23

NMC

364383

3/20/1986

28N

34E

3

Pershing

NV

177

225

SHO #24

NMC

364384

3/19/1986

28N

34E

2

Pershing

NV

177

226

SHO #25

NMC

364385

3/19/1986

28N

34E

2

Pershing

NV

177

227

SHO #26

NMC

364386

3/19/1986

28N

34E

2

Pershing

NV

177

228

SHO #27

NMC

364387

3/19/1986

28N

34E

2

Pershing

NV

177

229

 

 

 

EXHIBIT A-1

PAGE 2

 

 

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

 

 

 

SHO #28

NMC

364388

3/19/1986

28N

34E

2

Pershing

NV

177

230

SHO #29

NMC

364389

3/19/1986

28N

34E

2

Pershing

NV

177

231

SHO #30

NMC

364390

3/19/1986

28N

34E

2

Pershing

NV

177

232

SHO #31

NMC

364391

3/19/1986

28N

34E

2

Pershing

NV

177

233

SHO #32

NMC

364392

3/19/1986

28N

34E

2

Pershing

NV

177

234

SHO #33

NMC

364393

3/19/1986

28N

34E

2

Pershing

NV

177

235

SHO #34

NMC

364394

3/19/1986

28N

34E

2

Pershing

NV

177

236

SHO #35

NMC

364395

3/19/1986

28N

34E

2

Pershing

NV

177

237

SHO #36

NMC

364396

3/19/1986

28N

34E

2

Pershing

NV

177

238

SHO #37

NMC

364397

3/19/1986

28N

34E

2

Pershing

NV

177

239

SHO #38

NMC

364398

3/19/1986

28N

34E

1

Pershing

NV

177

240

 

 

 

 

28N

34E

2

 

 

 

 

 

 

 

 

29N

34E

35

 

 

 

 

SHO #39

NMC

364399

3/19/1986

28N

34E

1

Pershing

NV

177

241

 

 

 

 

28N

34E

2

 

 

 

 

SHO #40

NMC

364400

3/19/1986

28N

34E

2

Pershing

NV

177

242

SHO #41

NMC

364401

3/19/1986

28N

34E

2

Pershing

NV

177

243

SHO #42

NMC

364402

3/19/1986

28N

34E

2

Pershing

NV

177

244

SHO #43

NMC

364403

3/19/1986

28N

34E

2

Pershing

NV

177

245

SHO #44

NMC

364404

3/19/1986

28N

34E

2

Pershing

NV

177

246

SHO #45

NMC

364405

3/19/1986

28N

34E

2

Pershing

NV

177

247

SHO #46

NMC

364406

3/19/1986

28N

34E

2

Pershing

NV

177

248

SHO #47

NMC

364407

3/19/1986

28N

34E

2

Pershing

NV

177

249

SHO #48

NMC

364408

3/19/1986

28N

34E

2

Pershing

NV

177

250

 

 

 

 

29N

34E

35

 

 

 

 

SHO #49

NMC

364409

3/19/1986

29N

34E

35

Pershing

NV

177

251

SHO #50

NMC

364410

3/19/1986

28N

34E

2

Pershing

NV

177

252

 

 

 

 

29N

34E

35

 

 

 

 

SHO #51

NMC

364411

3/19/1986

29N

34E

35

Pershing

NV

177

253

SHO #52

NMC

364412

3/19/1986

28N

34E

2

Pershing

NV

177

254

 

 

 

 

29N

34E

35

 

 

 

 

SHO #53

NMC

364413

3/19/1986

29N

34E

35

Pershing

NV

177

255

SHO #54

NMC

364414

3/19/1986

28N

34E

2

Pershing

NV

177

256

 

 

 

 

29N

34E

35

 

 

 

 

SHO #55

NMC

364415

3/19/1986

29N

34E

35

Pershing

NV

177

257

SHO #56

NMC

364416

3/19/1986

28N

34E

1

Pershing

NV

177

258

 

 

 

EXHIBIT A-1

PAGE 3

 

 

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

 

 

 

 

 

 

 

28N

34E

2

 

 

 

 

SHO #57

NMC

364417

3/19/1986

29N

34E

35

Pershing

NV

177

259

 

 

 

 

29N

34E

36

 

 

 

 

SHO #58

NMC

364418

3/20/1986

29N

34E

35

Pershing

NV

177

260

SHO #59

NMC

364419

3/20/1986

29N

34E

35

Pershing

NV

177

261

 

 

 

 

29N

34E

36

 

 

 

 

Porcupine #1

NMC

371072

6/20/1986

28N

34E

14

Pershing

NV

180

24

Porcupine #2

NMC

371073

6/20/1986

28N

34E

14

Pershing

NV

180

25

Porcupine #3

NMC

371074

6/20/1986

28N

34E

14

Pershing

NV

180

26

Porcupine #4

NMC

371075

6/20/1986

28N

34E

14

Pershing

NV

180

27

Porcupine #5

NMC

371076

6/20/1986

28N

34E

14

Pershing

NV

180

28

Porcupine #6

NMC

371077

6/20/1986

28N

34E

14

Pershing

NV

180

29

Porcupine #7

NMC

371078

6/20/1986

28N

34E

14

Pershing

NV

180

30

Porcupine #8

NMC

371079

6/20/1986

28N

34E

14

Pershing

NV

180

31

Porcupine #9

NMC

371080

6/20/1986

28N

34E

14

Pershing

NV

180

32

Porcupine #10

NMC

371081

6/20/1986

28N

34E

14

Pershing

NV

180

33

Porcupine #11

NMC

371082

6/20/1986

28N

34E

14

Pershing

NV

180

34

Crown Hills #7

NMC

39574

8/22/1972

28N

34E

14

Pershing

NV

42

510

 

 

 

 

28N

34E

15

 

 

 

 

Crown Hills #8

NMC

39593

8/22/1972

28N

34E

14

Pershing

NV

42

511

 

 

 

 

28N

34E

15

 

 

 

 

Crown Hills #9

NMC

39594

8/22/1972

28N

34E

14

Pershing

NV

42

512

 

 

 

 

28N

34E

15

 

 

 

 

Crown Hills #10

NMC

39595

8/22/1972

28N

34E

14

Pershing

NV

42

513

Porcupine 28

NMC

662873

8/27/1992

28N

34E

14

Pershing

NV

267

567

SV 8

NMC

748203

6/5/1996

29N

34E

34

Pershing

NV

304

446

SV 10

NMC

748205

6/5/1996

29N

34E

34

Pershing

NV

304

448

SV 12

NMC

748207

6/5/1996

29N

34E

34

Pershing

NV

304

450

SV 14

NMC

748209

6/5/1996

29N

34E

34

Pershing

NV

304

452

SV 16

NMC

748211

6/5/1996

29N

34E

34

Pershing

NV

304

454

SV 18

NMC

748213

6/5/1996

29N

34E

34

Pershing

NV

304

456

SV 20

NMC

748215

6/5/1996

29N

34E

34

Pershing

NV

304

458

SV 27

NMC

748222

6/5/1996

29N

34E

34

Pershing

NV

304

465

SV 29

NMC

748224

6/5/1996

29N

34E

34

Pershing

NV

304

467

SV 30

NMC

748225

6/5/1996

29N

34E

34

Pershing

NV

304

468

SV 31

NMC

748226

6/5/1996

29N

34E

34

Pershing

NV

304

469

 

 

 

EXHIBIT A-1

PAGE 4

 

 

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

 

 

 

SV 32

NMC

748227

6/5/1996

29N

34E

34

Pershing

NV

304

470

SV 33

NMC

748228

6/5/1996

29N

34E

34

Pershing

NV

304

471

SV 34

NMC

748229

6/5/1996

29N

34E

34

Pershing

NV

304

472

SV 35

NMC

748230

6/5/1996

29N

34E

34

Pershing

NV

304

473

SV 36

NMC

748231

6/5/1996

29N

34E

34

Pershing

NV

304

474

SV 37

NMC

748232

6/5/1996

29N

34E

34

Pershing

NV

304

475

SV 38

NMC

748233

6/5/1996

29N

34E

34

Pershing

NV

304

476

SV 39

NMC

748234

6/5/1996

29N

34E

34

Pershing

NV

304

477

SV 40

NMC

748235

6/5/1996

29N

34E

34

Pershing

NV

304

478

SV 41

NMC

748236

6/5/1996

29N

34E

34

Pershing

NV

304

479

 

 

 

 

29N

35E

35

 

 

 

 

SV 42

NMC

748237

6/5/1996

29N

34E

34

Pershing

NV

304

480

 

 

 

 

29N

35E

35

 

 

 

 

SV 43

NMC

748238

6/5/1996

29N

34E

35

Pershing

NV

304

481

SV 44

NMC

748239

6/5/1996

29N

34E

35

Pershing

NV

304

482

SV 1

NMC

817628

6/21/2000

29N

34E

33

Pershing

NV

352

678

SV 2

NMC

817629

6/21/2000

29N

34E

33

Pershing

NV

352

679

SV 3

NMC

817630

6/21/2000

29N

34E

33

Pershing

NV

352

680

SV 4

NMC

817631

6/21/2000

29N

34E

33

Pershing

NV

352

681

SV 5

NMC

817632

6/21/2000

29N

34E

34

Pershing

NV

352

682

SV 6

NMC

817633

6/21/2000

29N

34E

34

Pershing

NV

352

683

SV 7

NMC

817634

6/21/2000

29N

34E

34

Pershing

NV

352

684

SV 9

NMC

817635

6/21/2000

29N

34E

34

Pershing

NV

352

685

SV 11

NMC

817636

6/21/2000

29N

34E

34

Pershing

NV

352

686

SV 13

NMC

817637

6/21/2000

29N

34E

34

Pershing

NV

352

687

SV 15

NMC

817638

6/21/2000

29N

34E

34

Pershing

NV

352

688

SV 17

NMC

817639

6/21/2000

29N

34E

34

Pershing

NV

352

689

SV 19

NMC

817640

6/21/2000

29N

34E

34

Pershing

NV

352

690

SV 21

NMC

817641

6/21/2000

29N

34E

33

Pershing

NV

352

691

SV 22

NMC

817642

6/21/2000

29N

34E

33

Pershing

NV

352

692

SV 23

NMC

817643

6/21/2000

29N

34E

33

Pershing

NV

352

693

SV 24

NMC

817644

6/21/2000

29N

34E

33

Pershing

NV

352

694

SV 25

NMC

817645

6/21/2000

29N

34E

34

Pershing

NV

352

695

SV 26

NMC

817646

6/21/2000

29N

34E

34

Pershing

NV

352

699

SV 28

NMC

817647

6/21/2000

29N

34E

34

Pershing

NV

352

697

SV 45

NMC

860702

11/21/2007

29N

34E

28

Pershing

NV

429

867

 

 

 

EXHIBIT A-1

PAGE 5

 

 

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

 

 

 

 

 

 

 

29N

34E

33

 

 

 

 

SV 46

NMC

860703

11/9/2003

29N

34E

33

Pershing

NV

380

570

SV 47

NMC

860704

11/21/2007

29N

34E

28

Pershing

NV

429

868

 

 

 

 

29N

34E

33

 

 

 

 

SV 48

NMC

860705

11/9/2003

29N

34E

33

Pershing

NV

380

572

SV 49

NMC

860706

11/21/2007

29N

34E

28

Pershing

NV

429

869

 

 

 

 

29N

34E

33

 

 

 

 

SV 50

NMC

860707

11/9/2003

29N

34E

33

Pershing

NV

380

574

SV 51

NMC

860708

11/21/2007

29N

34E

28

Pershing

NV

429

780

 

 

 

 

29N

34E

33

 

 

 

 

SV 52

NMC

860709

11/9/2003

29N

34E

33

Pershing

NV

380

576

SV 53

NMC

860710

11/9/2003

29N

34E

33

Pershing

NV

380

577

SV 54

NMC

860711

11/9/2003

29N

34E

33

Pershing

NV

380

578

 

 

 

11/9/2003

28N

34E

4

 

 

 

 

SV 55

NMC

860712

11/9/2003

29N

34E

33

Pershing

NV

380

579

SV 56

NMC

860713

11/9/2003

28N

34E

4

Pershing

NV

380

580

 

 

 

 

29N

34E

33

 

 

 

 

SV 57

NMC

860714

11/9/2003

29N

34E

33

Pershing

NV

380

581

SV 58

NMC

860715

11/9/2003

28N

34E

4

Pershing

NV

380

582

 

 

 

 

29N

34E

33

 

 

 

 

SV 59

NMC

860716

11/9/2003

29N

34E

33

Pershing

NV

380

583

SV 60

NMC

860717

11/9/2003

28N

34E

4

Pershing

NV

380

584

 

 

 

 

29N

34E

33

 

 

 

 

SV 61

NMC

860718

11/9/2003

29N

34E

26

Pershing

NV

380

585

SV 62

NMC

860719

11/21/2007

29N

34E

28

Pershing

NV

429

871

SV 63

NMC

860720

11/9/2003

29N

34E

28

Pershing

NV

380

587

SV 64

NMC

860721

11/21/2007

29N

34E

28

Pershing

NV

429

872

SV 65

NMC

860722

11/9/2003

29N

34E

28

Pershing

NV

380

589

SV 66

NMC

860723

11/21/2007

29N

34E

28

Pershing

NV

429

873

SV 67

NMC

860724

11/9/2003

29N

34E

27

Pershing

NV

380

591

SV 68

NMC

860725

11/21/2007

29N

34E

28

Pershing

NV

429

874

SV 69

NMC

860726

11/9/2003

29N

34E

27

Pershing

NV

380

593

SV 70

NMC

860727

11/9/2003

29N

34E

28

Pershing

NV

380

594

SV 71

NMC

860728

11/9/2003

29N

34E

27

Pershing

NV

380

595

SV 72

NMC

860729

11/9/2003

29N

34E

27

Pershing

NV

380

596

SV 73

NMC

860730

11/9/2003

29N

34E

27

Pershing

NV

380

597

 

 

 

EXHIBIT A-1

PAGE 6

 

 

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

 

 

 

SV 74

NMC

860731

11/9/2003

29N

34E

27

Pershing

NV

380

598

SV 75

NMC

860732

11/9/2003

29N

34E

27

Pershing

NV

380

599

SV 76

NMC

860733

11/9/2003

29N

34E

27

Pershing

NV

380

600

SV 77

NMC

860734

11/15/2003

29N

34E

27

Pershing

NV

380

601

SV 78

NMC

860735

11/15/2003

29N

34E

27

Pershing

NV

380

602

SV 84

NMC

872357

5/12/2004

28N

34E

4

Pershing

NV

384

488

 

 

 

 

29N

34E

33

 

 

 

 

SV 85

NMC

872358

5/12/2004

28N

34E

4

Pershing

NV

384

489

SV 86

NMC

872359

5/12/2004

28N

34E

4

Pershing

NV

384

490

SV 87

NMC

872360

5/12/2004

28N

34E

4

Pershing

NV

384

491

SV 88

NMC

872361

5/12/2004

28N

34E

4

Pershing

NV

384

492

SV 89

NMC

872362

5/12/2004

28N

34E

4

Pershing

NV

384

493

SV 90

NMC

872363

5/12/2004

28N

34E

4

Pershing

NV

384

494

SV 91

NMC

872364

5/12/2004

28N

34E

4

Pershing

NV

384

495

SV 92

NMC

872365

5/12/2004

28N

34E

4

Pershing

NV

384

496

SV 93

NMC

872366

5/12/2004

28N

34E

4

Pershing

NV

384

497

SV 94

NMC

872367

5/12/2004

28N

34E

4

Pershing

NV

384

498

SV 95

NMC

872368

5/12/2004

28N

34E

4

Pershing

NV

384

499

SV 96

NMC

872369

5/12/2004

28N

34E

4

Pershing

NV

384

500

SV 97

NMC

872370

5/12/2004

28N

34E

4

Pershing

NV

384

501

SV 98

NMC

872371

5/12/2004

28N

34E

4

Pershing

NV

384

502

SV 99

NMC

872372

5/12/2004

28N

34E

4

Pershing

NV

384

503

 

 

 

 

29N

34E

33

 

 

 

 

SV 100

NMC

887449

10/18/2004

29N

34E

35

Pershing

NV

390

17

SV 101

NMC

887450

10/18/2004

29N

34E

35

Pershing

NV

390

18

SV 102

NMC

887451

10/18/2004

29N

34E

35

Pershing

NV

390

19

SV 103

NMC

887452

10/18/2004

29N

34E

35

Pershing

NV

390

20

SV 104

NMC

887453

10/18/2004

29N

34E

35

Pershing

NV

390

21

SV 105

NMC

887454

10/18/2004

29N

34E

35

Pershing

NV

390

22

 

 

 

 

29N

34E

36

 

 

 

 

SV 106

NMC

887455

10/18/2004

29N

34E

35

Pershing

NV

390

23

 

 

 

 

29N

34E

36

 

 

 

 

SV 107

NMC

887456

10/18/2004

29N

34E

36

Pershing

NV

390

24

SV 108

NMC

887457

10/18/2004

29N

34E

36

Pershing

NV

390

25

SV 109

NMC

887458

10/18/2004

29N

34E

36

Pershing

NV

390

26

SV 110

NMC

887459

10/18/2004

29N

34E

36

Pershing

NV

390

27

 

 

 

EXHIBIT A-1

PAGE 7

 

 

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

 

 

 

SV 111

NMC

887460

10/18/2004

29N

34E

36

Pershing

NV

390

28

SV 112

NMC

887461

10/18/2004

29N

34E

36

Pershing

NV

390

29

SV 113

NMC

887462

10/18/2004

29N

34E

36

Pershing

NV

390

30

SV 114

NMC

887463

10/18/2004

29N

34E

36

Pershing

NV

390

31

SV 115

NMC

887464

10/18/2004

29N

34E

26

Pershing

NV

390

32

 

 

 

 

29N

34E

35

 

 

 

 

SV 116

NMC

887465

10/18/2004

29N

34E

26

Pershing

NV

390

33

 

 

 

 

29N

34E

35

 

 

 

 

SV 117

NMC

887466

10/18/2004

29N

34E

25

Pershing

NV

390

34

 

 

 

 

29N

34E

26

 

 

 

 

SV 118

NMC

887467

10/18/2004

29N

34E

25

Pershing

NV

390

35

 

 

 

 

29N

34E

36

 

 

 

 

SV 119

NMC

887468

10/18/2004

29N

34E

26

Pershing

NV

390

36

 

 

 

 

29N

34E

36

 

 

 

 

SV 120

NMC

887469

10/18/2004

29N

34E

26

Pershing

NV

390

37

 

 

 

 

29N

34E

36

 

 

 

 

SV 121

NMC

887470

10/19/2004

28N

34E

1

Pershing

NV

390

38

 

 

 

 

28N

34E

2

 

 

 

 

SV 122

NMC

887471

10/19/2004

28N

34E

1

Pershing

NV

390

39

 

 

 

 

29N

34E

36

 

 

 

 

SV 123

NMC

887472

10/19/2004

28N

34E

1

Pershing

NV

390

40

 

 

 

 

29N

34E

36

 

 

 

 

SV 124

NMC

887473

10/19/2004

28N

34E

1

Pershing

NV

390

41

 

 

 

 

29N

34E

36

 

 

 

 

SV 125

NMC

887474

10/19/2004

28N

34E

1

Pershing

NV

390

42

 

 

 

 

29N

34E

36

 

 

 

 

SV 126

NMC

889143

11/10/2004

29N

34E

34

Pershing

NV

390

437

 

 

 

 

29N

34E

35

 

 

 

 

SV 127

NMC

889144

11/10/2004

29N

34E

35

Pershing

NV

390

438

SV 128

NMC

889145

11/15/2004

28N

34E

2

Pershing

NV

390

439

 

 

 

 

28N

34E

3

 

 

 

 

SV 129

NMC

889146

11/15/2004

28N

34E

2

Pershing

NV

390

440

 

 

 

 

28N

34E

3

 

 

 

 

SV 130

NMC

889147

11/15/2004

28N

34E

2

Pershing

NV

390

441

SV 131

NMC

889148

11/15/2004

28N

34E

2

Pershing

NV

390

442

 

 

 

 

29N

34E

35

 

 

 

 

 

 

 

EXHIBIT A-1

PAGE 8

 

 

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

 

 

 

SV 132

NMC

889149

11/15/2004

28N

34E

2

Pershing

NV

390

443

SV 133

NMC

889150

11/15/2004

28N

34E

2

Pershing

NV

390

444

 

 

 

 

29N

34E

35

 

 

 

 

SV 134

NMC

889151

11/15/2004

28N

34E

2

Pershing

NV

390

445

SV 135

NMC

889152

11/15/2004

28N

34E

2

Pershing

NV

390

446

 

 

 

 

29N

34E

35

 

 

 

 

SVP 1

NMC

906917

6/16/2005

29N

34E

34

Pershing

NV

398

285

SVP 2

NMC

906918

6/16/2005

29N

34E

34

Pershing

NV

398

286

SVP 3

NMC

906919

6/16/2005

29N

34E

35

Pershing

NV

398

287

SVP 4

NMC

906920

6/16/2005

29N

34E

35

Pershing

NV

398

288

SVP 5

NMC

906921

6/16/2005

29N

34E

35

Pershing

NV

398

289

SVP 6

NMC

906922

6/16/2005

29N

34E

35

Pershing

NV

398

290

SVP 7

NMC

906923

6/16/2005

29N

34E

35

Pershing

NV

398

291

SVP 8

NMC

906924

6/16/2005

29N

34E

35

Pershing

NV

398

292

SVP 9

NMC

906925

6/16/2005

29N

34E

35

Pershing

NV

398

293

SVP 10

NMC

906926

6/16/2005

29N

34E

35

Pershing

NV

398

294

SVP 11

NMC

906927

6/16/2005

29N

34E

34

Pershing

NV

398

295

SVP 12

NMC

906928

6/16/2005

29N

34E

34

Pershing

NV

398

296

SVP 13

NMC

906929

6/16/2005

29N

34E

35

Pershing

NV

398

297

SVP 14

NMC

906930

6/16/2005

29N

34E

35

Pershing

NV

398

298

SVP 15

NMC

906931

6/16/2005

29N

34E

35

Pershing

NV

398

299

SVP 16

NMC

906932

6/16/2005

29N

34E

35

Pershing

NV

398

300

SVP 17

NMC

906933

6/16/2005

29N

34E

35

Pershing

NV

398

301

SVP 18

NMC

906934

6/16/2005

29N

34E

35

Pershing

NV

398

302

SVP 19

NMC

906935

6/16/2005

29N

34E

35

Pershing

NV

398

303

SVP 20

NMC

906936

6/16/2005

29N

34E

35

Pershing

NV

398

304

SVP 21

NMC

906937

6/16/2005

29N

34E

36

Pershing

NV

398

305

SVP 22

NMC

906938

6/16/2005

29N

34E

36

Pershing

NV

398

306

SVP 23

NMC

906939

6/16/2005

29N

34E

36

Pershing

NV

398

307

SVP 24

NMC

906940

6/16/2005

29N

34E

36

Pershing

NV

398

308

SVP 25

NMC

906941

6/16/2005

29N

34E

36

Pershing

NV

398

309

SVP 26

NMC

906942

6/16/2005

29N

34E

36

Pershing

NV

398

310

SVP 27

NMC

906943

6/16/2005

29N

34E

36

Pershing

NV

398

311

SVP 28

NMC

906944

6/16/2005

29N

34E

36

Pershing

NV

398

312

SVP 29

NMC

906945

6/16/2005

28N

34E

2

Pershing

NV

398

313

SVP 30

NMC

906946

6/16/2005

28N

34E

2

Pershing

NV

398

314

 

 

 

EXHIBIT A-1

PAGE 9

 

 

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

 

 

 

SVP 31

NMC

906947

6/16/2005

28N

34E

2

Pershing

NV

398

315

SVP 32

NMC

906948

6/16/2005

28N

34E

2

Pershing

NV

398

316

SVP 33

NMC

906949

6/16/2005

28N

34E

2

Pershing

NV

398

317

SVP 34

NMC

906950

6/16/2005

28N

34E

2

Pershing

NV

398

318

SVP 35

NMC

906951

6/16/2005

28N

34E

2

Pershing

NV

398

319

SVP 36

NMC

906952

6/16/2005

28N

34E

2

Pershing

NV

398

320

SVP 37

NMC

906953

6/16/2005

28N

34E

2

Pershing

NV

398

321

SVP 38

NMC

906954

6/16/2005

28N

34E

2

Pershing

NV

398

322

SVP 39

NMC

906955

6/16/2005

28N

34E

2

Pershing

NV

398

323

SVP 40

NMC

906956

6/16/2005

28N

34E

2

Pershing

NV

398

324

SV 136

NMC

906957

6/9/2005

28N

34E

3

Pershing

NV

398

281

SV 137

NMC

906958

6/9/2005

28N

34E

3

Pershing

NV

398

282

SV 138

NMC

906959

6/9/2005

28N

34E

3

Pershing

NV

398

283

SV 139

NMC

906960

6/9/2005

29N

34E

35

Pershing

NV

398

284

SV 146

NMC

925039

2/11/2006

28N

34E

14

Pershing

NV

407

352

SV 147

NMC

925040

2/11/2006

28N

34E

14

Pershing

NV

407

353

SV 148

NMC

925041

2/11/2006

28N

34E

14

Pershing

NV

407

354

SV 149

NMC

925042

2/11/2006

28N

34E

13

Pershing

NV

407

355

 

 

 

 

28N

34E

14

 

 

 

 

SV 150

NMC

925043

2/11/2006

28N

34E

13

Pershing

NV

407

356

 

 

 

 

28N

34E

14

 

 

 

 

SV 151

NMC

925044

2/11/2006

28N

34E

13

Pershing

NV

407

357

SV 152

NMC

925045

2/11/2006

28N

34E

13

Pershing

NV

407

358

SV 153

NMC

925046

2/11/2006

28N

34E

13

Pershing

NV

407

359

SV 154

NMC

925047

2/11/2006

28N

34E

13

Pershing

NV

407

360

SV 155

NMC

925048

2/9/2006

28N

34E

11

Pershing

NV

407

361

 

 

 

 

28N

34E

14

 

 

 

 

SV 156

NMC

925049

2/9/2006

28N

34E

14

Pershing

NV

407

362

SV 157

NMC

925050

2/9/2006

28N

34E

11

Pershing

NV

407

363

 

 

 

 

28N

34E

14

 

 

 

 

SV 158

NMC

925051

2/9/2006

28N

34E

14

Pershing

NV

407

364

SV 159

NMC

925052

2/9/2006

28N

34E

11

Pershing

NV

407

365

 

 

 

 

28N

34E

14

 

 

 

 

SV 160

NMC

925053

2/9/2006

28N

34E

14

Pershing

NV

407

366

SV 161

NMC

925054

2/9/2006

28N

34E

11

Pershing

NV

407

367

 

 

 

 

28N

34E

14

 

 

 

 

 

 

 

EXHIBIT A-1

PAGE 10

 

 

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

 

 

 

SV 162

NMC

925055

2/9/2006

28N

34E

14

Pershing

NV

407

368

SV 163

NMC

925056

2/9/2006

28N

34E

11

Pershing

NV

407

369

 

 

 

 

28N

34E

14

 

 

 

 

SV 164

NMC

925057

2/9/2006

28N

34E

14

Pershing

NV

407

370

SV 165

NMC

925058

2/9/2006

28N

34E

11

Pershing

NV

407

371

 

 

 

 

28N

34E

14

 

 

 

 

SV 166

NMC

925059

2/9/2006

28N

34E

14

Pershing

NV

407

372

SV 167

NMC

925060

2/9/2006

28N

34E

11

Pershing

NV

407

373

 

 

 

 

28N

34E

12

 

 

 

 

 

 

 

 

28N

34E

13

 

 

 

 

 

 

 

 

28N

34E

14

 

 

 

 

SV 168

NMC

925061

2/9/2006

28N

34E

13

Pershing

NV

407

374

 

 

 

 

28N

34E

14

 

 

 

 

SV 169

NMC

925062

2/9/2006

28N

34E

12

Pershing

NV

407

375

 

 

 

 

28N

34E

13

 

 

 

 

SV 170

NMC

925063

2/9/2006

28N

34E

13

Pershing

NV

407

376

SV 171

NMC

925064

2/9/2006

28N

34E

12

Pershing

NV

407

377

 

 

 

 

28N

34E

13

 

 

 

 

SV 172

NMC

925065

2/9/2006

28N

34E

13

Pershing

NV

407

378

SV 173

NMC

925066

2/9/2006

28N

34E

12

Pershing

NV

407

379

 

 

 

 

28N

34E

13

 

 

 

 

SV 174

NMC

925067

2/9/2006

28N

34E

13

Pershing

NV

407

380

SV 175

NMC

925068

2/9/2006

28N

34E

12

Pershing

NV

407

381

 

 

 

 

28N

34E

13

 

 

 

 

SV 176

NMC

925069

2/9/2006

28N

34E

13

Pershing

NV

407

382

SV 178

NMC

925071

2/9/2006

28N

34E

13

Pershing

NV

407

384

SV 180

NMC

925073

2/9/2006

28N

34E

13

Pershing

NV

407

386

SV 182

NMC

925075

2/9/2006

28N

34E

13

Pershing

NV

407

388

SV 184

NMC

925077

2/9/2006

28N

34E

13

Pershing

NV

407

390

SV 185

NMC

925078

2/11/2006

28N

34E

11

Pershing

NV

407

391

SV 186

NMC

925079

2/11/2006

28N

34E

11

Pershing

NV

407

392

SV 187

NMC

925080

2/10/2006

28N

34E

11

Pershing

NV

407

393

 

 

 

 

28N

34E

12

 

 

 

 

SV 188

NMC

925081

2/10/2006

28N

34E

11

Pershing

NV

407

394

 

 

 

 

28N

34E

12

 

 

 

 

SV 189

NMC

925082

2/10/2006

28N

34E

12

Pershing

NV

407

395

 

 

 

EXHIBIT A-1

PAGE 11

 

 

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

 

 

 

SV 190

NMC

925083

2/10/2006

28N

34E

12

Pershing

NV

407

396

SV 191

NMC

925084

2/10/2006

28N

34E

12

Pershing

NV

407

397

SV 192

NMC

925085

2/10/2006

28N

34E

12

Pershing

NV

407

398

SV 193

NMC

925086

2/10/2006

28N

34E

12

Pershing

NV

407

399

SV 194

NMC

925087

2/10/2006

28N

34E

12

Pershing

NV

407

400

SV 195

NMC

925088

2/10/2006

28N

34E

12

Pershing

NV

407

401

SV 196

NMC

925089

2/10/2006

28N

34E

12

Pershing

NV

407

402

SV 197

NMC

925090

2/10/2006

28N

34E

12

Pershing

NV

407

403

SV 198

NMC

925091

2/10/2006

28N

34E

12

Pershing

NV

407

404

SV 199

NMC

925092

2/10/2006

28N

34E

12

Pershing

NV

407

405

SV 200

NMC

925093

2/10/2006

28N

34E

12

Pershing

NV

407

406

SV 201

NMC

925094

2/10/2006

28N

34E

12

Pershing

NV

407

407

SV 202

NMC

925095

2/10/2006

28N

34E

12

Pershing

NV

407

408

SV 203

NMC

925096

2/10/2006

28N

34E

12

Pershing

NV

407

409

SV 204

NMC

925097

2/10/2006

28N

34E

12

Pershing

NV

407

410

SV 205

NMC

925098

2/10/2006

28N

34E

11

Pershing

NV

407

411

 

 

 

 

28N

34E

12

 

 

 

 

SV 206

NMC

925099

2/10/2006

28N

34E

1

Pershing

NV

407

412

 

 

 

 

28N

34E

12

 

 

 

 

SV 207

NMC

925100

2/10/2006

28N

34E

1

Pershing

NV

407

413

 

 

 

 

28N

34E

12

 

 

 

 

SV 208

NMC

925101

2/10/2006

28N

34E

1

Pershing

NV

407

414

 

 

 

 

28N

34E

12

 

 

 

 

SV 209

NMC

925102

2/10/2006

28N

34E

1

Pershing

NV

407

415

 

 

 

 

28N

34E

12

 

 

 

 

SV 210

NMC

925103

2/10/2006

28N

34E

1

Pershing

NV

407

416

 

 

 

 

28N

34E

12

 

 

 

 

SV 211

NMC

925104

2/10/2006

28N

34E

1

Pershing

NV

407

417

 

 

 

 

28N

34E

12

 

 

 

 

SV 212

NMC

925105

2/11/2006

28N

34E

1

Pershing

NV

407

418

 

 

 

 

28N

34E

12

 

 

 

 

SV 213

NMC

925106

2/11/2006

28N

34E

12

Pershing

NV

407

419

 

 

 

 

28N

34E

11

 

 

 

 

 

 

 

 

29N

34E

32

 

 

 

 

SV 215

NMC

925108

2/11/2006

28N

34E

11

Pershing

NV

407

421

SV 216

NMC

925109

2/17/2006

28N

34E

2

Pershing

NV

407

422

 

 

 

EXHIBIT A-1

PAGE 12

 

 

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

 

 

 

SV 217

NMC

925110

2/17/2006

28N

34E

2

Pershing

NV

407

423

SV 218

NMC

925111

2/17/2006

28N

34E

2

Pershing

NV

407

424

 

 

 

 

28N

34E

11

 

 

 

 

SV 219

NMC

925112

2/17/2006

28N

34E

1

Pershing

NV

407

425

 

 

 

 

28N

34E

2

 

 

 

 

SV 220

NMC

925113

2/17/2006

28N

34E

1

Pershing

NV

407

426

 

 

 

 

28N

34E

2

 

 

 

 

 

 

 

 

28N

34E

11

 

 

 

 

 

 

 

 

28N

34E

12

 

 

 

 

SV 221

NMC

925114

2/12/2006

29N

34E

26

Pershing

NV

407

427

SV 222

NMC

925115

2/12/2006

29N

34E

26

Pershing

NV

407

428

SV 223

NMC

925116

2/12/2006

29N

34E

26

Pershing

NV

407

429

SV 224

NMC

925117

2/12/2006

29N

34E

26

Pershing

NV

407

430

SV 225

NMC

925118

2/12/2006

29N

34E

26

Pershing

NV

407

431

SV 226

NMC

925119

2/12/2006

29N

34E

26

Pershing

NV

407

432

SV 227

NMC

925120

2/12/2006

29N

34E

25

Pershing

NV

407

433

 

 

 

 

29N

34E

26

 

 

 

 

SV 228

NMC

925121

2/12/2006

29N

34E

25

Pershing

NV

407

434

 

 

 

 

29N

34E

26

 

 

 

 

SV 229

NMC

925122

2/12/2006

29N

34E

25

Pershing

NV

407

435

SV 230

NMC

925123

2/12/2006

29N

34E

25

Pershing

NV

407

436

SV 231

NMC

925124

2/12/2006

29N

34E

25

Pershing

NV

407

437

SV 232

NMC

925125

2/12/2006

29N

34E

25

Pershing

NV

407

438

SV 233

NMC

925126

2/12/2006

29N

34E

25

Pershing

NV

407

439

SV 234

NMC

925127

2/12/2006

29N

34E

25

Pershing

NV

407

440

SV 235

NMC

925128

2/12/2006

29N

34E

23

Pershing

NV

407

441

 

 

 

 

29N

34E

26

 

 

 

 

SV 236

NMC

925129

2/12/2006

29N

34E

26

Pershing

NV

407

442

 

 

 

 

29N

34E

27

 

 

 

 

SV 237

NMC

925130

2/12/2006

29N

34E

23

Pershing

NV

407

443

 

 

 

 

29N

34E

26

 

 

 

 

SV 238

NMC

925131

2/12/2006

29N

34E

26

Pershing

NV

407

444

SV 239

NMC

925132

2/12/2006

29N

34E

23

Pershing

NV

407

445

 

 

 

 

29N

34E

26

 

 

 

 

SV 240

NMC

925133

2/12/2006

29N

34E

26

Pershing

NV

407

446

SV 241

NMC

925134

2/12/2006

29N

34E

23

Pershing

NV

407

447

 

 

 

EXHIBIT A-1

PAGE 13

 

 

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

 

 

 

 

 

 

 

29N

34E

26

 

 

 

 

SV 242

NMC

925135

2/12/2006

29N

34E

26

Pershing

NV

407

448

SV 243

NMC

925136

2/12/2006

29N

34E

23

Pershing

NV

407

449

 

 

 

 

29N

34E

26

 

 

 

 

SV 244

NMC

925137

2/12/2006

29N

34E

26

Pershing

NV

407

450

SV 245

NMC

925138

2/13/2006

29N

34E

23

Pershing

NV

407

451

 

 

 

 

29N

34E

26

 

 

 

 

SV 246

NMC

925139

2/13/2006

29N

34E

26

Pershing

NV

407

452

SV 247

NMC

925140

2/13/2006

29N

34E

23

Pershing

NV

407

453

 

 

 

 

29N

34E

26

 

 

 

 

SV 248

NMC

925141

2/13/2006

29N

34E

26

Pershing

NV

407

454

SV 249

NMC

925142

2/13/2006

29N

34E

23

Pershing

NV

407

455

 

 

 

 

29N

34E

26

 

 

 

 

SV 250

NMC

925143

2/13/2006

29N

34E

26

Pershing

NV

407

456

SV 251

NMC

925144

2/13/2006

29N

34E

23

Pershing

NV

407

457

 

 

 

 

29N

34E

26

 

 

 

 

SV 252

NMC

925145

2/13/2006

29N

34E

26

Pershing

NV

407

458

SV 253

NMC

925146

2/12/2006

29N

34E

25

Pershing

NV

407

459

 

 

 

 

29N

34E

26

 

 

 

 

SV 254

NMC

925147

2/12/2006

29N

34E

25

Pershing

NV

407

460

SV 255

NMC

925148

2/12/2006

29N

34E

25

Pershing

NV

407

461

SV 256

NMC

925149

2/17/2006

28N

34E

1

Pershing

NV

407

462

SV 257

NMC

925150

2/17/2006

28N

34E

1

Pershing

NV

407

463

SV 258

NMC

925151

2/17/2006

28N

34E

1

Pershing

NV

407

464

SV 259

NMC

925152

2/17/2006

28N

34E

1

Pershing

NV

407

465

SV 260

NMC

925153

2/17/2006

28N

34E

1

Pershing

NV

407

466

 

 

 

 

28N

34E

2

 

 

 

 

 

 

 

 

29N

34E

35

 

 

 

 

 

 

 

 

29N

34E

36

 

 

 

 

SV 261

NMC

925154

2/17/2006

28N

34E

1

Pershing

NV

407

467

 

 

 

 

29N

34E

36

 

 

 

 

SV 277

NMC

925156

2/14/2006

29N

34E

28

Pershing

NV

407

469

SV 278

NMC

925157

2/14/2006

29N

34E

28

Pershing

NV

407

470

SV 285

NMC

925158

2/14/2006

29N

34E

28

Pershing

NV

407

471

SV 286

NMC

925159

2/14/2006

29N

34E

28

Pershing

NV

407

472

SV 287

NMC

925160

2/14/2006

29N

34E

28

Pershing

NV

407

473

 

 

 

EXHIBIT A-1

PAGE 14

 

 

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

 

 

 

SV 288

NMC

925161

2/14/2006

29N

34E

28

Pershing

NV

407

474

SV 289

NMC

925162

2/14/2006

29N

34E

28

Pershing

NV

407

475

SV 290

NMC

925163

2/14/2006

29N

34E

28

Pershing

NV

407

476

SV 291

NMC

925164

4/12/2006

29N

34E

29

Pershing

NV

407

477

 

 

 

 

29N

34E

32

 

 

 

 

SV 292

NMC

925165

4/12/2006

29N

34E

29

Pershing

NV

407

478

 

 

 

 

29N

34E

32

 

 

 

 

SV 293

NMC

925166

2/15/2006

29N

34E

28

Pershing

NV

407

479

 

 

 

 

29N

34E

29

 

 

 

 

 

 

 

 

29N

34E

32

 

 

 

 

 

 

 

 

29N

34E

33

 

 

 

 

SV 294

NMC

925167

2/15/2006

29N

34E

32

Pershing

NV

407

480

 

 

 

 

29N

34E

33

 

 

 

 

SV 295

NMC

925168

2/15/2006

29N

34E

28

Pershing

NV

407

481

 

 

 

 

29N

34E

33

 

 

 

 

SV 296

NMC

925169

2/15/2006

29N

34E

33

Pershing

NV

407

482

SV 297

NMC

925170

2/15/2006

29N

34E

28

Pershing

NV

407

483

 

 

 

 

29N

34E

33

 

 

 

 

SV 298

NMC

925171

2/15/2006

29N

34E

33

Pershing

NV

407

484

SV 299

NMC

925172

2/15/2006

29N

34E

28

Pershing

NV

407

485

 

 

 

 

29N

34E

33

 

 

 

 

SV 300

NMC

925173

2/15/2006

29N

34E

33

Pershing

NV

407

486

SV 301

NMC

925174

2/15/2006

29N

34E

32

Pershing

NV

407

487

 

 

 

 

29N

34E

33

 

 

 

 

SV 302

NMC

925175

2/15/2006

29N

34E

32

Pershing

NV

407

488

 

 

 

 

29N

34E

33

 

 

 

 

SV 303

NMC

925176

2/15/2006

29N

34E

33

Pershing

NV

407

489

SV 304

NMC

925177

2/15/2006

29N

34E

33

Pershing

NV

407

490

SV 305

NMC

925178

2/15/2006

29N

34E

33

Pershing

NV

407

491

SV 306

NMC

925179

2/15/2006

29N

34E

33

Pershing

NV

407

492

SV 307

NMC

925180

2/15/2006

29N

34E

33

Pershing

NV

407

493

SV 308

NMC

925181

2/15/2006

29N

34E

33

Pershing

NV

407

494

SV 309

NMC

925182

2/15/2006

28N

34E

4

Pershing

NV

407

495

 

 

 

 

28N

34E

5

 

 

 

 

 

 

 

 

29N

34E

32

 

 

 

 

 

 

 

 

29N

34E

33

 

 

 

 

 

 

 

EXHIBIT A-1

PAGE 15

 

 

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

 

 

 

SV 310

NMC

925183

2/15/2006

28N

34E

5

Pershing

NV

407

496

SV 311

NMC

925184

2/15/2006

28N

34E

4

Pershing

NV

407

497

 

 

 

 

29N

34E

33

 

 

 

 

SV 312

NMC

925185

2/15/2006

28N

34E

4

Pershing

NV

407

498

SV 313

NMC

925186

2/15/2006

28N

34E

4

Pershing

NV

407

499

 

 

 

 

29N

34E

33

 

 

 

 

SV 314

NMC

925187

2/15/2006

28N

34E

4

Pershing

NV

407

500

SV 315

NMC

925188

2/17/2006

28N

34E

4

Pershing

NV

407

501

SV 316

NMC

925189

2/17/2006

28N

34E

4

Pershing

NV

407

502

 

 

 

 

28N

34E

9

 

 

 

 

SV 317

NMC

925190

2/17/2006

28N

34E

4

Pershing

NV

407

503

SV 318

NMC

925191

2/17/2006

28N

34E

4

Pershing

NV

407

504

 

 

 

 

28N

34E

9

 

 

 

 

SV 319

NMC

925192

2/14/2006

28N

34E

4

Pershing

NV

407

505

SV 320

NMC

925193

2/15/2006

28N

34E

4

Pershing

NV

407

506

SV 321

NMC

925194

2/15/2006

28N

34E

4

Pershing

NV

407

507

SV 322

NMC

925195

2/15/2006

28N

34E

4

Pershing

NV

407

508

SV 323

NMC

925196

4/11/2006

28N

34E

3

Pershing

NV

407

509

 

 

 

 

28N

34E

4

 

 

 

 

SV 324

NMC

925197

2/15/2006

28N

34E

4

Pershing

NV

407

510

SV 325

NMC

925198

2/15/2006

28N

34E

4

Pershing

NV

407

511

SV 326

NMC

925199

2/15/2006

28N

34E

4

Pershing

NV

407

512

SV 327

NMC

925200

2/15/2006

28N

34E

5

Pershing

NV

407

513

SV 328

NMC

925201

2/15/2006

28N

34E

5

Pershing

NV

407

514

 

 

 

 

28N

34E

8

 

 

 

 

SV 329

NMC

925202

2/15/2006

28N

34E

5

Pershing

NV

407

514 A

SV 330

NMC

925203

2/15/2006

28N

34E

5

Pershing

NV

407

515

 

 

 

 

28N

34E

8

 

 

 

 

SV 331

NMC

925204

2/15/2006

28N

34E

5

Pershing

NV

407

516

SV 332

NMC

925205

2/15/2006

28N

34E

5

Pershing

NV

407

517

 

 

 

 

28N

34E

8

 

 

 

 

SV 333

NMC

925206

2/15/2006

28N

34E

5

Pershing

NV

407

518

SV 334

NMC

925207

2/15/2006

28N

34E

5

Pershing

NV

407

519

 

 

 

 

28N

34E

8

 

 

 

 

SV 335

NMC

925208

2/15/2006

28N

34E

4

Pershing

NV

407

520

 

 

 

 

28N

34E

5

 

 

 

 

 

 

 

EXHIBIT A-1

PAGE 16

 

 

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

 

 

 

SV 336

NMC

925209

2/15/2006

28N

34E

4

Pershing

NV

407

521

 

 

 

 

28N

34E

5

 

 

 

 

 

 

 

 

28N

34E

8

 

 

 

 

 

 

 

 

28N

34E

9

 

 

 

 

SV 337

NMC

925210

2/15/2006

28N

34E

4

Pershing

NV

407

522

SV 338

NMC

925211

2/15/2006

28N

34E

4

Pershing

NV

407

523

 

 

 

 

28N

34E

9

 

 

 

 

SV 339

NMC

925212

2/15/2006

28N

34E

4

Pershing

NV

407

524

SV 340

NMC

925213

2/15/2006

28N

34E

4

Pershing

NV

407

525

 

 

 

 

28N

34E

9

 

 

 

 

SV 341

NMC

925214

2/15/2006

28N

34E

8

Pershing

NV

407

526

SV 342

NMC

925215

2/15/2006

28N

34E

8

Pershing

NV

407

527

SV 343

NMC

925216

2/15/2006

28N

34E

8

Pershing

NV

407

528

SV 344

NMC

925217

2/15/2006

28N

34E

8

Pershing

NV

407

529

SV 345

NMC

925218

2/15/2006

28N

34E

8

Pershing

NV

407

530

SV 346

NMC

925219

2/15/2006

28N

34E

8

Pershing

NV

407

531

SV 347

NMC

925220

2/15/2006

28N

34E

8

Pershing

NV

407

532

SV 348

NMC

925221

2/15/2006

28N

34E

8

Pershing

NV

407

533

SV 349

NMC

925222

2/15/2006

28N

34E

8

Pershing

NV

407

534

SV 350

NMC

925223

2/15/2006

28N

34E

8

Pershing

NV

407

535

SV 351

NMC

925224

2/15/2006

28N

34E

8

Pershing

NV

407

536

SV 352

NMC

925225

2/15/2006

28N

34E

8

Pershing

NV

407

537

SV 353

NMC

925226

2/15/2006

28N

34E

8

Pershing

NV

407

538

 

 

 

 

28N

34E

9

 

 

 

 

SV 354

NMC

925227

2/15/2006

28N

34E

9

Pershing

NV

407

539

SV 355

NMC

925228

4/13/2006

28N

34E

8

Pershing

NV

407

540

SV 356

NMC

925229

4/14/2006

28N

34E

4

Pershing

NV

407

541

 

 

 

 

28N

34E

5

 

 

 

 

SV 357

NMC

925230

4/13/2006

29N

34E

23

Pershing

NV

407

542

 

 

 

 

29N

34E

24

 

 

 

 

 

 

 

 

29N

34E

25

 

 

 

 

 

 

 

 

29N

34E

26

 

 

 

 

SV 266

NMC

929379

5/15/2006

29N

34E

20

Pershing

NV

409

624

 

 

 

 

29N

34E

29

 

 

 

 

SV 267

NMC

929380

5/15/2006

29N

34E

20

Pershing

NV

409

625

 

 

 

 

29N

34E

29

 

 

 

 

 

 

 

EXHIBIT A-1

PAGE 17

 

 

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

 

 

 

SV 268

NMC

929381

4/14/2006

29N

34E

20

Pershing

NV

409

626

 

 

 

 

29N

34E

28

 

 

 

 

SV 269

NMC

929382

4/14/2006

29N

34E

21

Pershing

NV

409

627

 

 

 

 

29N

34E

28

 

 

 

 

SV 270

NMC

929383

4/14/2006

29N

34E

21

Pershing

NV

409

628

 

 

 

 

29N

34E

28

 

 

 

 

SV 271

NMC

929384

4/14/2006

29N

34E

21

Pershing

NV

409

629

 

 

 

 

29N

34E

28

 

 

 

 

SV 272

NMC

929385

4/14/2006

29N

34E

21

Pershing

NV

409

630

 

 

 

 

29N

34E

28

 

 

 

 

SV 273

NMC

929386

4/14/2006

29N

34E

21

Pershing

NV

409

631

 

 

 

 

29N

34E

28

 

 

 

 

SV 274

NMC

929387

4/14/2006

29N

34E

21

Pershing

NV

409

632

 

 

 

 

29N

34E

28

 

 

 

 

SV 275

NMC

929388

4/14/2006

29N

34E

21

Pershing

NV

409

633

 

 

 

 

29N

34E

28

 

 

 

 

SV 276

NMC

929389

4/14/2006

29N

34E

21

Pershing

NV

409

634

 

 

 

 

29N

34E

28

 

 

 

 

SV 283

NMC

929394

4/12/2006

29N

34E

28

Pershing

NV

409

639

 

 

 

 

29N

34E

29

 

 

 

 

SV 284

NMC

929395

4/12/2006

29N

34E

28

Pershing

NV

409

640

 

 

 

 

29N

34E

29

 

 

 

 

Dry 1

NMC

954162

3/27/2007

28N

34E

1

Pershing

NV

423

200

 

 

 

 

28N

35E

6

 

 

 

 

Dry 2

NMC

954163

3/27/2007

28N

34E

1

Pershing

NV

423

201

 

 

 

 

28N

35E

6

 

 

 

 

Dry 3

NMC

954164

3/27/2007

28N

34E

1

Pershing

NV

423

202

 

 

 

 

28N

35E

6

 

 

 

 

SSV 142

NMC

954582

3/29/2007

28N

34E

1

Pershing

NV

423

203

 

 

 

 

29N

34E

36

 

 

 

 

SSV 143

NMC

954583

3/29/2007

28N

34E

1

Pershing

NV

423

204

 

 

 

 

29N

34E

36

 

 

 

 

SSV 144

NMC

954584

3/29/2007

28N

34E

1

Pershing

NV

423

205

SSV 370

NMC

954585

3/29/2007

29N

34E

36

Pershing

NV

423

206

SSV 371

NMC

954586

3/29/2007

29N

34E

36

Pershing

NV

423

207

SSV 372

NMC

954587

3/29/2007

29N

34E

36

Pershing

NV

423

208

 

 

 

EXHIBIT A-1

PAGE 18

 

 

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

 

 

 

SSV 373

NMC

954588

3/29/2007

29N

34E

36

Pershing

NV

423

209

SSV 374

NMC

954589

3/29/2007

28N

34E

1

Pershing

NV

423

210

 

 

 

 

29N

34E

36

 

 

 

 

SSV 375

NMC

954590

3/29/2007

28N

34E

1

Pershing

NV

423

211

 

 

 

 

29N

34E

36

 

 

 

 

SSV 376

NMC

954591

3/29/2007

28N

34E

1

Pershing

NV

423

212

 

 

 

 

29N

34E

36

 

 

 

 

SSV 377

NMC

954592

3/29/2007

28N

34E

1

Pershing

NV

423

213

 

 

 

 

29N

34E

36

 

 

 

 

SSV 378

NMC

954593

3/29/2007

28N

34E

1

Pershing

NV

423

214

 

 

 

 

29N

34E

36

 

 

 

 

SSV 379

NMC

954594

3/29/2007

28N

34E

1

Pershing

NV

423

215

SSV 380

NMC

954595

3/29/2007

28N

34E

1

Pershing

NV

423

216

 

 

 

 

29N

34E

36

 

 

 

 

SSV 381

NMC

954596

3/29/2007

28N

34E

1

Pershing

NV

423

217

SSV 382

NMC

954597

3/29/2007

28N

34E

1

Pershing

NV

423

218

SSV 383

NMC

954598

3/29/2007

28N

34E

1

Pershing

NV

423

219

SSV 385

NMC

954599

3/29/2007

28N

34E

1

Pershing

NV

423

220

SSV 386

NMC

954600

3/29/2007

28N

34E

1

Pershing

NV

423

221

SSV 387

NMC

954601

3/29/2007

28N

34E

1

Pershing

NV

423

222

 

 

 

 

28N

35E

6

 

 

 

 

SV 262

NMC

954602

3/29/2007

28N

34E

1

Pershing

NV

423

223

SV 214

NMC

977866

11/7/2007

28N

34E

11

Pershing

NV

432

395

SVR 1

NMC

987526

3/26/2008

28N

34E

12

Pershing

NV

435

587

SVR 2

NMC

987527

3/26/2008

28N

34E

12

Pershing

NV

435

588

SVR 3

NMC

987528

3/26/2008

28N

34E

12

Pershing

NV

435

589

SVR 4

NMC

987529

3/26/2008

28N

34E

12

Pershing

NV

435

590

SVR 5

NMC

987530

3/26/2008

28N

34E

18

Pershing

NV

435

591

SVR 6

NMC

987531

3/26/2008

28N

34E

18

Pershing

NV

435

592

SVR 7

NMC

987532

3/26/2008

28N

34E

18

Pershing

NV

435

593

SVR 8

NMC

987533

3/26/2008

28N

34E

18

Pershing

NV

435

594

SVR 9

NMC

987534

3/26/2008

28N

34E

18

Pershing

NV

435

595

SVR 10

NMC

987535

3/26/2008

28N

34E

18

Pershing

NV

435

596

SVR 11

NMC

987536

3/26/2008

28N

34E

18

Pershing

NV

435

597

SVR 12

NMC

987537

3/26/2008

28N

34E

18

Pershing

NV

435

598

SVR 13

NMC

987538

3/26/2008

28N

34E

18

Pershing

NV

435

599

 

 

 

EXHIBIT A-1

PAGE 19

 

 

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

 

 

 

SVR 14

NMC

987539

3/26/2008

28N

34E

18

Pershing

NV

435

600

SVR 15

NMC

987540

3/26/2008

28N

34E

13

Pershing

NV

435

601

SVR 16

NMC

987541

3/26/2008

28N

34E

13

Pershing

NV

435

602

Freedom 2

NMC

780754

11/3/1997

28N

34E

8

Pershing

NV

325

50

Freedom 1

NMC

785920

11/3/1997

29N

34E

35

Pershing

NV

325

522

Duffy 1

NMC

811224

1/4/2000

28N

34E

4

Pershing

NV

348

308

Duffy 2

NMC

811225

1/4/2000

28N

34E

4

Pershing

NV

348

309

Duffy 5

NMC

965332

9/5/2007

28N

34E

4

Pershing

NV

427

745

Duffy 6

NMC

965333

9/5/2007

28N

34E

4

Pershing

NV

427

746

Duffy 7

NMC

965334

9/5/2007

28N

34E

4

Pershing

NV

427

747

Duffy 8

NMC

965335

9/5/2007

28N

34E

4

Pershing

NV

427

748

PS 1

NMC

930781

4/20/2006

29N

34E

36

Pershing

NV

410

362

PS 2

NMC

930782

4/20/2006

29N

34E

36

Pershing

NV

410

363

PS 3

NMC

930783

4/20/2006

29N

34E

36

Pershing

NV

410

364

PS 4

NMC

930784

4/20/2006

29N

34E

36

Pershing

NV

410

365

PS 5

NMC

930785

4/20/2006

29N

34E

36

Pershing

NV

410

366

PS 6

NMC

930786

4/20/2006

29N

34E

30

Pershing

NV

410

367

PS 7

NMC

930787

4/20/2006

29N

34E

30

Pershing

NV

410

368

PS 8

NMC

930788

4/20/2006

29N

34E

30

Pershing

NV

410

369

PS 9

NMC

930789

4/20/2006

29N

34E

30

Pershing

NV

410

370

PS 10

NMC

930790

4/20/2006

29N

34E

36

Pershing

NV

410

371

PS 11

NMC

930791

4/20/2006

29N

34E

36

Pershing

NV

410

372

PS 12

NMC

930792

4/20/2006

29N

34E

36

Pershing

NV

410

373

PS 13

NMC

930793

4/20/2006

29N

34E

36

Pershing

NV

410

374

PS 14

NMC

930794

4/20/2006

29N

34E

31

Pershing

NV

410

375

PS 15

NMC

930795

4/20/2006

29N

34E

31

Pershing

NV

410

376

PS 16

NMC

930796

4/20/2006

29N

34E

31

Pershing

NV

410

377

PS 17

NMC

930797

4/20/2006

29N

34E

31

Pershing

NV

410

378

PS 18

NMC

930798

4/20/2006

29N

34E

31

Pershing

NV

410

379

PS 19

NMC

930799

4/20/2006

29N

34E

31

Pershing

NV

410

380

PS 20

NMC

930800

4/20/2006

29N

34E

31

Pershing

NV

410

381

PS 21

NMC

930801

4/20/2006

29N

34E

31

Pershing

NV

410

382

PS 22

NMC

930802

4/20/2006

29N

34E

31

Pershing

NV

410

383

PS 28

NMC

930808

4/20/2006

28N

35E

6

Pershing

NV

410

389

PS 29

NMC

930809

4/20/2006

28N

35E

6

Pershing

NV

410

390

PS 30

NMC

930810

4/20/2006

28N

35E

6

Pershing

NV

410

391

 

 

 

EXHIBIT A-1

PAGE 20

 

 

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

 

 

 

PS 31

NMC

930811

4/20/2006

28N

35E

6

Pershing

NV

410

392

PS 32

NMC

930812

4/20/2006

28N

35E

6

Pershing

NV

410

393

PS 34

NMC

930814

5/17/2006

28N

35E

6

Pershing

NV

410

395

PS 35

NMC

930815

5/17/2006

28N

35E

6

Pershing

NV

410

396

PS 36

NMC

930816

5/17/2006

28N

35E

6

Pershing

NV

410

397

PS 37

NMC

930817

5/17/2006

28N

35E

6

Pershing

NV

410

398

PS 38

NMC

930818

5/17/2006

28N

35E

6

Pershing

NV

410

399

PS 39

NMC

930819

5/17/2006

28N

35E

6

Pershing

NV

410

400

PS 40

NMC

930820

5/17/2006

28N

35E

6

Pershing

NV

410

401

PS 43

NMC

930823

4/20/2006

28N

35E

6

Pershing

NV

410

404

PS 44

NMC

930824

4/20/2006

28N

35E

6

Pershing

NV

410

405

PS 45

NMC

930825

4/20/2006

28N

35E

6

Pershing

NV

410

406

PS 46

NMC

930826

4/20/2006

28N

35E

6

Pershing

NV

410

407

PS 47

NMC

930827

4/20/2006

28N

35E

6

Pershing

NV

410

408

PS 48

NMC

930828

4/20/2006

28N

35E

6

Pershing

NV

410

409

PS 58

NMC

930838

4/20/2006

28N

35E

6

Pershing

NV

410

419

PS 59

NMC

930839

4/20/2006

28N

35E

6

Pershing

NV

410

420

PS 60

NMC

930840

4/20/2006

28N

35E

6

Pershing

NV

410

421

PS 61

NMC

930841

4/20/2006

28N

35E

6

Pershing

NV

410

422

PS 62

NMC

930842

4/20/2006

28N

35E

6

Pershing

NV

410

423

PS 63

NMC

930843

4/20/2006

28N

35E

6

Pershing

NV

410

424

SV 51

NMC

825454

10/4/2001

29N

34E

35

Pershing

NV

362

325

 

 

 

 

28N

34E

2

 

 

 

 

SV 52

NMC

825455

10/4/2001

28N

34E

2

Pershing

NV

362

326

SV 53

NMC

825456

10/4/2001

29N

34E

35

Pershing

NV

362

327

SV 54

NMC

825457

10/4/2001

29N

34E

35

Pershing

NV

362

328

 

 

 

 

28N

34E

2

 

 

 

 

SV 60

NMC

832254

8/10/2002

29N

34E

26

Pershing

NV

369

571

SV 61

NMC

832255

8/10/2002

29N

34E

26

Pershing

NV

369

572

SV 62

NMC

832256

8/10/2002

29N

34E

26

Pershing

NV

369

573

SV 63

NMC

832257

8/10/2002

29N

34E

26

Pershing

NV

369

574

SV 64

NMC

832258

8/10/2002

29N

34E

26

Pershing

NV

369

575

SV 65

NMC

832259

8/10/2002

29N

34E

26

Pershing

NV

369

576

SV 66

NMC

832260

8/10/2002

29N

34E

26

Pershing

NV

369

577

SV 67

NMC

832261

8/10/2002

29N

34E

26

Pershing

NV

369

578

SV 68

NMC

832262

8/10/2002

29N

34E

26

Pershing

NV

369

579

 

 

 

EXHIBIT A-1

PAGE 21

 

 

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

 

 

 

SV 69

NMC

832263

8/10/2002

29N

34E

26

Pershing

NV

369

580

SV 70

NMC

832264

8/10/2002

29N

34E

26

Pershing

NV

369

581

SV 71

NMC

832265

8/10/2002

29N

34E

26

Pershing

NV

369

582

SV 72

NMC

832266

8/13/2002

29N

34E

35

Pershing

NV

369

583

SV 73

NMC

832267

8/13/2002

29N

34E

35

Pershing

NV

369

584

SV 74

NMC

832268

8/13/2002

29N

34E

35

Pershing

NV

369

585

SV 75

NMC

832269

8/13/2002

29N

34E

35

Pershing

NV

369

586

SV 76

NMC

832270

8/9/2002

29N

34E

35

Pershing

NV

369

587

SV 77

NMC

832271

8/9/2002

29N

34E

35

Pershing

NV

369

588

SV 78

NMC

832272

8/9/2002

29N

34E

35

Pershing

NV

369

589

SV 79

NMC

832273

8/9/2002

29N

34E

35

Pershing

NV

369

590

SV 80

NMC

832274

8/30/2002

29N

34E

35

Pershing

NV

369

591

SV 81

NMC

832275

8/30/2002

29N

34E

35

Pershing

NV

369

592

SV 82

NMC

832276

8/30/2002

29N

34E

35

Pershing

NV

369

593

SV 83

NMC

832277

8/30/2002

29N

34E

35

Pershing

NV

369

594

 

 

EXHIBIT A-1

PAGE 22

 

 

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

 

 

EXHIBIT A-2

To

EXPLORATION, DEVELOPMENT AND MINE OPERATING AGREEMENT

By And Between

MGC RESOURCES INC.

And

BARRICK GOLD EXPLORATION INC.

[cryimg1.jpg]

 

 

 

EXHIBIT A-2

PAGE 1

 

 

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

 

 

EXHIBIT B

To

EXPLORATION, DEVELOPMENT AND MINE OPERATING AGREEMENT

By And Between

MGC RESOURCES INC.

And

BARRICK GOLD EXPLORATION INC.

ACCOUNTING PROCEDURES

The financing and accounting procedures to be followed by the Manager and the
Participants under the Agreement are set forth below. All capitalized terms in
these Accounting Procedures shall have the definition attributed to them in the
Agreement, unless defined otherwise herein.

The purpose of these Accounting Procedures is to establish equitable methods for
determining charges and credits applicable to Operations. It is the intent of
the Participants that neither of them shall lose or profit by reason of the
designation of one of them to exercise the duties and responsibilities of the
Manager. The Participants shall meet and in good faith endeavor to agree upon
changes deemed necessary to correct any unfairness or inequity. In the event of
a conflict between the provisions of these Accounting Procedures and those of
the Agreement, the provisions of the Agreement shall control.

ARTICLE I

GENERAL PROVISIONS

1.1       General Accounting Records. The Manager shall maintain detailed and
comprehensive cost accounting records in accordance with these Accounting
Procedures, including general ledgers, supporting and subsidiary journals,
invoices, checks and other customary documentation, sufficient to provide a
record of revenues and expenditures and periodic statements of financial
position and the results of Operations for managerial, tax, regulatory or other
financial, regulatory, or legal reporting purposes related to the Business. Such
records shall be retained for the duration of the period allowed the
Participants for audit or the period necessary to comply with tax or other
regulatory requirements. The records shall reflect all obligations, advances and
credits of the Participants.

1.2       Cash Management Accounts. The Manager shall maintain one or more
separate cash management accounts for the payment of all expenses and the
deposit of all cash receipts for the Business.

 

 

EXHIBIT B

PAGE 1

 

 

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

 

 

1.3       Statements and Billings. The Manager shall prepare statements and bill
the Participants as provided in Article X of the Agreement. Payment of any such
billings by either Participant, including the Manager, shall not prejudice such
Participant’s right to protest or question the correctness thereof for a period
not to exceed 24 months following the calendar year during which such billings
were received by such Participant. All written exceptions to and claims upon the
Manager for incorrect charges, billings or statements shall be made upon the
Manager within such 24 month period. The time period permitted for adjustments
hereunder shall not apply to adjustments resulting from periodic inventories as
provided in Paragraphs 5.1 and 5.2.

ARTICLE II

CHARGES TO BUSINESS ACCOUNT

Subject to the limitations hereinafter set forth, the Manager shall charge the
Business Account with the following:

2.1       Properties Acquisition Costs, Rentals, Royalties and Other Payments.
All property acquisition and holding costs, including Governmental Fees, filing
fees, license fees, costs of permits and assessment work, delay rentals,
production royalties, including any required advances, lease payments, real
property taxes and all other payments made by the Manager which are necessary to
acquire or maintain title to the Assets.

 

2.2

Labor and Employee Benefits

(a)       Salaries and wages of the Manager’s employees directly engaged in
Operations, including salaries or wages of employees who are temporarily
assigned to and directly employed by same.

(b)       The Manager’s cost of holiday, vacation, sickness and disability
benefits, and other customary allowances applicable to the salaries and wages
chargeable under Subparagraph 2.2(a) and Paragraph 2.12. Such costs may be
charged on a “when and as paid basis” or by “percentage assessment” on the
amount of salaries and wages. If percentage assessment is used, the rate shall
be applied to wages or salaries excluding overtime and bonuses. Such rate shall
be based on the Manager’s cost experience and it shall be periodically adjusted
at least annually to ensure that the total of such charges does not exceed the
actual cost thereof to the Manager.

(c)       The Manager’s actual cost of established plans for employees’ group
life insurance, hospitalization, pension, retirement, thrift, bonus (except
production or incentive bonus plans under a union contract based on actual rates
of production, cost savings and other production factors, and similar non-union
bonus plans customary in the industry or necessary to attract competent
employees, which bonus payments shall be considered salaries and wages under
Subparagraph 2.2(a) or Paragraph 2.12 rather than employees’ benefit plans) and
other benefit plans of a like

 

 

EXHIBIT B

PAGE 2

 

 

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

 

 

nature applicable to salaries and wages chargeable under Subparagraphs 2.2(a) or
Paragraph 2.12, provided that the plans are limited to the extent feasible to
those customary in the industry.

(d)       Cost of assessments imposed by governmental authority that are
applicable to salaries and wages chargeable under Subparagraph 2.2(a) and
Paragraph 2.12, including all penalties except those resulting from the willful
misconduct or gross negligence of the Manager.

(e)       All payments made by Barrick to MGC for the use of full-time and
part-time Midway Personnel, as set forth in that Service Agreement between
Barrick and MGC of even date herewith.

2.3       Materials, Equipment and Supplies. The cost of materials, equipment
and supplies (herein called “Material”) purchased from unaffiliated third
parties or furnished by either Participant as provided in Paragraph 3.1. The
Manager shall purchase or furnish only so much Material as may be required for
immediate use in efficient and economical Operations. The Manager shall also
maintain inventory levels of Material at reasonable levels to avoid unnecessary
accumulation of surplus stock.

2.4       Equipment and Facilities Furnished by Manager. The cost of machinery,
equipment and facilities owned by the Manager and used in Operations or used to
provide support or utility services to Operations charged at rates commensurate
with the actual costs of ownership and operation of such machinery, equipment
and facilities. Such rates shall include costs of maintenance, repairs, other
operating expenses, insurance, taxes, depreciation and interest at a rate not to
exceed Prime Rate plus three percent (3%) per annum. Such rates shall not exceed
the average commercial rates currently prevailing in the vicinity of the
Operations.

2.5       Transportation. Reasonable transportation costs incurred in connection
with the transportation of employees and material necessary for Operations.

2.6       Contract Services and Utilities. The cost of contract services and
utilities procured from outside sources, other than services described in
Paragraphs 2.9 and 2.13. If contract services are performed by the Manager or an
Affiliate thereof, the cost charged to the Business Account shall not be greater
than that for which comparable services and utilities are available in the open
market within the vicinity of Operations. The cost of professional consultant
services procured from outside sources in excess of $100,000.00 per annum per
contract shall not be charged to the Business Account unless approved by the
Management Committee.

2.7       Insurance Premiums. Net premiums paid for insurance required to be
carried for Operations for the protection of the Participants. When Operations
are conducted in an area where the Manager may self-insure for Worker’s
Compensation and/or Employer’s Liability under state law, the Manager may elect
to include such risks in its self-insurance program and shall charge its

 

 

EXHIBIT B

PAGE 3

 

 

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

 

 

costs of self-insuring such risks to the Business Account provided that such
charges shall not exceed published manual rates.

2.8       Damages and Losses. All costs in excess of insurance proceeds
necessary to repair or replace damage or losses to any Assets resulting from any
cause other than the willful misconduct or gross negligence of the Manager. The
Manager shall furnish the Management Committee with written notice of damages or
losses as soon as practicable after a report thereof has been received by the
Manager.

2.9       Legal and Regulatory Expense. Except as otherwise provided in
Paragraph 2.13, all legal and regulatory costs and expenses incurred in or
resulting from Operations or necessary to protect or recover the Assets of the
Business, including costs of title investigation and title curative services.
All attorneys fees and other legal costs to handle, investigate and settle
litigation or claims, and amounts paid in settlement of such litigation or
claims in excess of $100,000.00 per annum shall not be charged to the Business
Account unless approved by the Management Committee.

 

2.10

Audit. Cost of annual audits under Subsection 10.6(a).

2.11     Taxes. All taxes, assessments and like charges on Operations and Assets
which have been paid by the Manager for the benefit of the Participants. Each
Participant is separately responsible for taxes determined or measured by a
Participant’s sales revenue or net income.

2.12     District and Camp Expense (Field Supervision and Camp Expenses). A pro
rata portion of: (i) the salaries and expenses of the Manager’s superintendent
and other employees serving Operations to the extent their time is spent
directly on such Operations, and (ii) the costs of maintaining and operating an
office and any necessary suboffice, and (iii) all necessary camps, including
housing facilities for employees, used for Operations. The expense of those
facilities, less any revenue therefrom, shall include depreciation or a fair
monthly rental in lieu of depreciation of the investment. The total of such
charges for all Properties served by the Manager’s employees and facilities
shall be apportioned to the Business Account on the basis of a ratio to be
approved by the Management Committee.

 

2.13

Administrative Charge.

(a)       Each month, the Manager shall charge the Business Account a sum for
each phase of Operations as provided below, which shall be a liquidated amount
to reimburse the Manager for its home office overhead and general and
administrative expenses to conduct each phase of Operations, and which shall be
in lieu of any management fee and for taxes based on production of Products:

 

(i)

Exploration Phase -

5% of Allowable Costs.

 

 

EXHIBIT B

PAGE 4

 

 

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

 

 

 

(ii)

Development Phase -

3% of Allowable Costs.

 

(iii)

Major Construction Phase - 1% of Allowable Costs.

 

(iv)

Mining Phase - 5% of Allowable Costs.

(b)       The term “Allowable Costs” as used in this Paragraph for a particular
phase of Operations shall mean all charges to the Business Account excluding:

(i) the administrative charge referred to herein;

(ii) depreciation, depletion or amortization of tangible or intangible Assets;

(iii) amounts charged in accordance with Paragraphs 2.1 and 2.9, and

(iv) marketing costs.

(v) The Manager shall attribute such Allowable Costs to a particular phase of
Operations by applying the following guidelines:

(A)      The Exploration Phase shall cover those Operations conducted to
ascertain the existence, location, extent or quantity of any deposit of ore or
mineral.

(B)      The Development Phase shall cover those Operations, including
Pre-Feasibility and Management Assessment Study Operations, conducted to assess
a commercially feasible ore body or to extend production of an existing ore
body, and to construct or install related fixed Assets.

(C)      The Major Construction Phase shall include all Operations involved in
the construction of a mill, smelter or other ore processing facilities.

(D)      The Mining Phase shall include all other Operations activities not
otherwise covered above, including activities conducted after Mining Operations
have ceased.

(c)       Various phases of Operations may be conducted concurrently, in which
event the administrative charge shall be calculated separately for Allowable
Costs attributable to each phase.

(d)       The monthly administration charge determined for each phase of
Operations shall be a liquidated amount to reimburse Manager for its home office
overhead and general and administrative expenses for its conduct of Operations,
and shall be equitably apportioned among all

 

 

EXHIBIT B

PAGE 5

 

 

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

 

 

of the properties served during such monthly period on the basis of a ratio
approved by the Management Committee.

(e)       The following is a representative list of items that constitute the
Manager’s principal business office expenses that are expressly covered by the
administrative charge provided in this Paragraph, except to the extent that such
items are directly chargeable to the Business Account under other provisions of
this Article II:

(i)        Administrative supervision, which includes all services rendered by
managers, department supervisors, officers and directors of the Manager for
Operations.

(ii)       Accounting, data processing, personnel administration, billing and
record keeping in accordance with governmental regulations and the provisions of
the Agreement, and preparation of reports;

(iii)      The services of tax counsel and tax administration employees for all
tax matters, including any protests, except any outside professional fees which
the Management Committee may approve as a direct charge to the Business Account;

(iv)      Routine legal services rendered by outside sources and the Manager’s
legal staff not otherwise charged to the Business Account under Paragraph 2.9,
including property acquisition, attorney management and oversight, and support
services provided by Manager’s legal staff concerning any litigation; and

(v)       Rentals and other charges for office and records storage space,
telephone service, office equipment and supplies.

(f)        The Management Committee shall annually review the administrative
charges and shall amend the methodology or rates used to determine such charges
if they are found to be insufficient or excessive based on the principles that
the Manager shall not make a profit or suffer a loss and that it should be
fairly and adequately compensated for its costs and expenses.

2.14     Environmental Compliance Fund. Costs of reasonably anticipated
Environmental Compliance which, on a Program basis, shall be determined by the
Management Committee and shall be based on proportionate contributions in an
amount sufficient to establish a fund, which through successive proportionate
contributions during the life of the Business, will pay for ongoing
Environmental Compliance conducted during Operations and which will aggregate
the reasonably anticipated costs of mine closure, post-Operations Environmental
Compliance and Continuing Obligations. The Manager shall invest such amounts on
behalf of the Participants as provided in Subsection 8.2(r).

 

 

EXHIBIT B

PAGE 6

 

 

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

 

 

2.15     Other Expenditures. Any reasonable direct expenditure, other than
expenditures which are covered by the foregoing provisions, incurred by the
Manager for the necessary and proper conduct of Operations.

ARTICLE III

BASIS OF CHARGES TO BUSINESS ACCOUNT

3.1       Purchases. Material purchased and services procured from third parties
shall be charged to the Business Account by the Manager at invoiced cost,
including applicable transfer taxes, less all discounts taken. If any Material
is determined to be defective or is returned to a vendor for any other reason,
the Manager shall credit the Business Account when an adjustment is received
from the vendor.

3.2       Material Furnished by a Participant for Use in the Business. Any
Material furnished by either Participant for use in the Business or distributed
to either Participant by the Manager shall be priced on the following basis:

(a)       New Material: New Material furnished by either Participant shall be
priced F.O.B. the nearest reputable supply store or railway receiving point,
where like Material is available, at the current replacement cost of the same
kind of Material, exclusive of any available cash discounts, at the time it is
furnished (herein called “New Price”).

 

(b)

Used Material.

(i)        Used Material in sound and serviceable condition and suitable for
reuse without reconditioning shall be priced as follows:

(A)      Used Material furnished by either Participant shall be priced at 75% of
the New Price;

(B)      Used Material distributed to either Participant shall be priced (i) at
75% of the New Price if such Material was originally charged to the Business
Account as new Material, or (ii) at 65% of the New Price if such Material was
originally charged to the Business Account as good used Material at 75% of the
New Price.

(ii)       Other used Material that, after reconditioning, will be further
serviceable for original function as good secondhand Material, or that is
serviceable for original function but not substantially suitable for
reconditioning, shall be priced at fifty percent (50%) of New Price. The cost of
any reconditioning shall be borne by the transferee.

 

 

EXHIBIT B

PAGE 7

 

 

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

 

 

(iii)      Bad-Order Material which is no longer usable for its original purpose
without excessive repair cost but further usable for some other purpose shall be
priced on a basis comparable with items normally used for that purpose.

(iv)      All other Material, including junk, shall be priced at a value
commensurate with its use or at prevailing prices.

(c)       Obsolete Material. Any Material that is serviceable and usable for its
original function, but its condition is not equivalent to that which would
justify a price as provided above, shall be priced by the Management Committee.
Such price shall be set at a level that will result in a charge to the Business
Account equal to the value of the service to be rendered by such Material.

3.3       Premium Prices. Whenever Material is not readily obtainable at
published or listed prices because of national emergencies, strikes or other
unusual circumstances over which the Manager has no control, the Manager may
charge the Business Account for the required Material on the basis of the
Manager’s direct cost and expenses incurred in procuring such Material and
making it suitable for use. The Manager shall give written notice of the
proposed charge to the Participants prior to the time when such charge is to be
billed, whereupon either Participant shall have the right, by notifying the
Manager within 10 days of the delivery of the notice from the Manager, to
furnish at the usual receiving point all or part of its share of Material
suitable for use and acceptable to the Manager.

3.4       Warranty of Material Furnished by the Manager or Participants. Neither
Participant warrants any Material furnished beyond any dealer’s or
manufacturer’s warranty and no credits shall be made to the Business Account for
defective Material until adjustments are received by the Manager from the
dealer, manufacturer or their respective agents.

ARTICLE IV

DISPOSAL OF MATERIAL

4.1       Disposition Generally. The Manager shall have no obligation to
purchase either Participant’s interest in Material. The Management Committee
shall determine the disposition of major items of surplus Material, provided the
Manager shall have the right to dispose of normal accumulations of junk and
scrap Material either by sale or by transfer to the Participants as provided in
Paragraph 4.2.

4.2       Distribution to Participants. Any Material to be distributed to the
Participants shall be made in proportion to their respective Participating
Interests, and corresponding credits shall be made to the Business Account on
the basis provided in Paragraph 3.2.

 

 

EXHIBIT B

PAGE 8

 

 

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

 

 

4.3       Sales. Sales of Material to third parties shall be credited to the
Business Account at the net amount received. Any damages or claims by the
Purchaser shall be charged back to the Business Account if and when paid.

ARTICLE V

INVENTORIES

5.1       Periodic Inventories, Notice and Representations. At reasonable
intervals, inventories shall be taken by the Manager, which shall include all
such Material as is ordinarily considered controllable by operators of mining
properties, and the expense of conducting such periodic inventories shall be
charged to the Business Account. The Manager shall give written notice to the
Participants of its intent to take any inventory at least 30 days before such
inventory is scheduled to take place. A Participant shall be deemed to have
accepted the results of any inventory taken by the Manager if the Participant
fails to be represented at such inventory.

5.2       Reconciliation and Adjustment of Inventories. Reconciliation of
inventory with charges to the Business Account shall be made, and a list of
overages and shortages shall be furnished to the Management Committee within
6 months after the inventory is taken. Inventory adjustments shall be made by
the Manager to the Business Account for overages and shortages, but the Manager
shall be held accountable to the Business only for shortages due to lack of
reasonable diligence.

 

 

EXHIBIT B

PAGE 9

 

 

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

 

 

EXHIBIT C

To

EXPLORATION, DEVELOPMENT AND MINE OPERATING AGREEMENT

By And Between

MGC RESOURCES INC.

And

BARRICK GOLD EXPLORATION INC.

DEFINITIONS

“Accounting Procedures” means the procedures set forth in Exhibit B.

“Affiliate” means any person, partnership, limited liability company, joint
venture, corporation, or other form of enterprise which Controls, is Controlled
by, or is under common Control with a Participant.

“Agreement” means this Exploration, Development and Mine Operating Agreement,
including all amendments and modifications, and all schedules and exhibits, all
of which are incorporated by this reference.

“Approved Alternative” means a Development and Mining alternative selected by
the Management Committee from various Development and Mining alternatives
analyzed in the Pre-Feasibility Studies.

“Area of Interest” means any interest in real properties within the area
depicted on the map attached hereto as Exhibit A-2.

“Assets” means the Properties, Products, Business Information, and all other
real and personal property, tangible and intangible, including existing or
after-acquired properties and all contract rights held for the benefit of the
Participants hereunder.

“Budget” means a detailed estimate of all costs to be incurred and a schedule of
cash advances to be made by the Participants with respect to a Program.

“Business” means the contractual relationship of the Participants under this
Agreement.

“Business Account” means the account maintained by the Manager for the Business
in accordance with Exhibit B.

 

 

EXHIBIT C

PAGE 1

 

 

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

 

 

“Business Information” means the terms of this Agreement, and any other
agreement relating to the Business, the Existing Data, and all information,
data, knowledge and know-how, in whatever form and however communicated
(including, without limitation, Confidential Information), developed, conceived,
originated or obtained by either Participant in performing its obligations under
this Agreement. The term “Business Information” shall not include any
improvements, enhancements, refinements or incremental additions to Participant
Information that are developed, conceived, originated or obtained by either
Participant in performing its obligations under this Agreement.

“Commercial Production” means (i) the operation of the Properties or any portion
thereof as a producing mine and the production of Products therefrom, for a
minimum period of 60 consecutive days at an average rate of not less than
seventy-five percent (75%) of the initial rated capacity of the mining
facilities, as set out in a Management Assessment Study, or (ii) the date of
first shipment of Products in commercial quantities to off-site processing
facilities (other than for testing purposes) if the plans for the Business do
not include the construction of on-site processing facilities. For greater
certainty, Commercial Production does not include milling for the purpose of
testing, milling by a pilot plant, or milling during an initial tune-up period
of the processing facilities;

“Confidential Information” means all information, data, knowledge and know-how
(including, but not limited to, formulas, patterns, compilations, programs,
devices, methods, techniques and processes) that derives independent economic
value, actual or potential, as a result of not being generally known to, or
readily ascertainable by, third parties and which is the subject of efforts that
are reasonable under the circumstances to maintain its secrecy, including
without limitation all analyses, interpretations, compilations, studies and
evaluations of such information, data, knowledge and know-how generated or
prepared by or on behalf of either Participant.

“Continuing Obligations” mean obligations or responsibilities that are
reasonably expected to continue or arise after Operations on a particular area
of the Properties have ceased or are suspended, including future monitoring,
stabilization, or Environmental Compliance.

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

 

 

EXHIBIT C

PAGE 2

 

 

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

 

 

“Cost Index” means the Consumer Price Index for All Items (Series ID CUUR0000SA0
or replacement thereof), not seasonally adjusted, published by the United States
Department of Labor, Bureau of Statistics.

“Cover Payment” shall have the meaning as set forth in Section 10.4 of the
Agreement.

“Development” means all preparation (other than Exploration) for the removal and
recovery of Products, including construction and installation of a mill or any
other improvements to be used for the mining, handling, milling, processing, or
other beneficiation of Products, and all related Environmental Compliance.

“Effective Date” means the date set forth in the preamble to this Agreement.

“Encumbrance” or “Encumbrances” means mortgages, deeds of trust, security
interests, pledges, liens, net profits interests, royalties or overriding
royalty interests, other payments out of production, or other burdens of any
nature.

“Environmental Compliance” means actions performed during or after Operations to
comply with the requirements of all Environmental Laws or contractual
commitments related to reclamation of the Properties or other compliance with
Environmental Laws.

“Environmental Laws” means Laws aimed at reclamation or restoration of the
Properties; abatement of pollution; protection of the environment; protection of
wildlife, including endangered species; ensuring public safety from
environmental hazards; protection of cultural or historic resources; management,
storage or control of hazardous materials and substances; releases or threatened
releases of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances as wastes into the environment, including without
limitation, ambient air, surface water and groundwater; and all other Laws
relating to the manufacturing, processing, distribution, use, treatment,
storage, disposal, handling or transport of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances or wastes.

“Environmental Liabilities” means any and all claims, actions, causes of action,
damages, losses, liabilities, obligations, penalties, judgments, amounts paid in
settlement, assessments, costs, disbursements, or expenses (including, without
limitation, attorneys’ fees and costs, experts’ fees and costs, and consultants’
fees and costs) of any kind or of any nature whatsoever that are asserted
against either Participant, by any person or entity other than the other
Participant, alleging liability (including, without limitation, liability for
studies, testing or investigatory costs, cleanup costs, response costs, removal
costs, remediation costs, containment costs, restoration costs, corrective
action costs, closure costs, reclamation costs, natural resource damages,
property damages, business losses, personal injuries, penalties or fines)
arising out of, based on or resulting from (i) the presence, release, threatened
release, discharge or emission into the environment of any hazardous

 

 

EXHIBIT C

PAGE 3

 

 

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

 

 

materials or substances existing or arising on, beneath or above the Properties
and/or emanating or migrating and/or threatening to emanate or migrate from the
Properties to off-site properties; (ii) physical disturbance of the environment;
or (iii) the violation or alleged violation of any Environmental Laws.

“Equity Account” means the account maintained for each Participant by the
Manager in accordance with Subsection 8.2(n) of the Agreement.

“Existing Data” means maps, drill logs and other drilling data, core tests,
pulps, reports, surveys, assays, analyses, production reports, operations,
technical, accounting and financial records, and other material information
developed in operations on the Properties prior to the Effective Date.

“Existing Permits” means those governmental permits, licenses and other
approvals that are currently in place pertaining to the Properties, as set forth
in Part 3 of Exhibit A.

“Expansion” or “Modification” means (i) a material increase in mining or
production capacity; (ii) a material change in the recovery process; or (iii) a
material change in waste or tailings disposal methods. An increase or change
shall be deemed “material” if it is anticipated to cost more than 75% of
original capital costs attributable to the Development of the mining or
production capacity, recovery process or waste or tailings disposal facility to
be expanded or modified.

“Exploration” means all activities directed toward ascertaining the existence,
location, quantity, quality or commercial value of deposits of Products,
including but not limited to additional drilling required after discovery of
potentially commercial mineralization, and including related Environmental
Compliance.

“Exploration Expenditures” means all costs, fees, expenses, liabilities and
charges paid or incurred by Barrick which are directly related to Exploration,
including all costs of land holdings, evaluation, exploration and development of
the Assets and Property, drilling, drifting and tunneling costs, machinery,
equipment and supply costs, salaries, benefits and wages of employees,
contractor charges and fees (including any costs incurred under the service
agreement between the Participants), assay, metallurgical and other lab fees,
permitting and environmental compliance costs, land maintenance costs, bonding
and insurance costs (but not including the principal amount of any bond), local
office and camp expenses, utility and infrastructure costs, and all costs that
would be chargeable to the Business Account as provided in Article II of Exhibit
B (excluding paragraph 2.10 of Exhibit B).

“Exploration Period” means the period of time commencing on the Effective Date
and continuing until December 31, 2013, unless Barrick elects to earn an
additional interest in the Properties as provided in Subsection 5.2(b) of the
Agreement, in which case the Exploration

 

 

EXHIBIT C

PAGE 4

 

 

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

 

 

Period shall extend until December 31, 2014. Provided, however, that the
Exploration Period shall terminate upon the withdrawal of Barrick prior to the
completion of Barrick’s Initial Contribution or upon Barrick earning an interest
in the Properties by completing its Initial Contribution pursuant to the
provisions of Section 5.2 of the Agreement. Notwithstanding the foregoing, the
Exploration Period shall be deemed to have commenced (i) on January 1, 2009 with
respect to the use of Midway Personnel under Section 4.9, and (ii) on October
17, 2008 with respect to title work performed by or on behalf of Barrick
relating to the Properties, the parties having agreed that such activities will
be included as Exploration Expenditures and subject to the terms of this
Agreement.

“Feasibility Contractors” means one or more engineering firms approved by the
Management Committee for purposes of preparing or auditing any Pre-Feasibility
Study or Management Assessment Study.

“Governmental Fees” means all location fees, mining claim rental fees, mining
claim maintenance payments and similar payments required by Law to locate and
hold unpatented mining claims and millsites.

“Initial Contribution” means that contribution each Participant has made or
agrees to make pursuant to Section 5.4 of the Agreement.

“Law” or “Laws” means all applicable federal, state and local laws (statutory or
common), rules, ordinances, regulations, grants, concessions, franchises,
licenses, orders, directives, judgments, decrees, and other governmental
restrictions, including permits and other similar requirements, whether
legislative, municipal, administrative or judicial in nature.

“Management Assessment Study” means a detailed report to be prepared following
selection by the Management Committee of one or more Approved Alternatives,
which may but need not be in the form of a feasibility study shall include a
review of information presented in any Pre-Feasibility Studies concerning the
Approved Alternative(s). The Management Assessment Study shall be in a form and
of a scope as is necessary to meet the standards of North American financial
institutions for the purpose of determining the advisability of providing
project financing on a commercial, competitive basis, taking into consideration
all relevant criteria deemed to be both normal and prudent for the mining
industry at that time.

“Management Committee” means the committee established under Article VII of the
Agreement.

“Manager” means the Participant appointed under Article VIII of the Agreement to
manage Operations, or any successor Manager.

 

 

EXHIBIT C

PAGE 5

 

 

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

 

 

“MGC Development Costs” means MGC’s share (30%) of the Project Financing and
costs of Operations incurred through the Major Construction Phase, as defined in
Exhibit B, Subparagraph 2.13(b)(v)(C), of a project approved by the Management
Committee, and thereafter up to the date that Commercial Production of Products
has been established.

“Midway Personnel” means an employee or employees of MGC.

“Mining” means the mining, extracting, producing, beneficiating, handling,
milling or other processing of Products.

“Mining Leases” means those mining leases to which MGC is a party identified in
Exhibit A.

“Net Proceeds” means certain amounts calculated as provided in Exhibit E, which
may be payable to a Participant under the Agreement.

“Net Smelter Returns Royalty” means certain amounts calculated as provided in
Exhibit D, which may be payable to MGC under the Agreement.

“Operations” means the activities carried out under this Agreement.

“Participant” means MGC or Barrick, or any permitted successor or assign of MGC
or Barrick under the Agreement.

“Participant Information” means all information, data, knowledge and know-how,
in whatever form and however communicated (including, without limitation,
Confidential Information but excluding the Existing Data), which, as shown by
written records, was developed, conceived, originated or obtained by a
Participant: (a) prior to entering into this Agreement, or (b) independent of
its performance under the terms of this Agreement.

“Participating Interest” means the percentage interest representing the
ownership interest of a Participant in the Assets assuming a joint venture is
formed under Section 5.4 of the Agreement, and all other rights and obligations
arising under this Agreement, as such interest may from time to time be adjusted
hereunder. Participating Interests shall be calculated to three decimal places
and rounded to two decimal places as follows: Decimals of .005 or more shall be
rounded up (e.g., 1.519% rounded to 1.52%); decimals of less than .005 shall be
rounded down (e.g., 1.514% rounded to 1.51%). The initial Participating
Interests of the Participants are set forth in Section 6.1 of the Agreement.

“Payout” means the date on which the Equity Account balance of each of the
Participants has become zero or a negative number, regardless of whether the
Equity Account balance of either

 

 

EXHIBIT C

PAGE 6

 

 

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

 

 

or both Participants subsequently becomes a positive number. If one
Participant’s Equity Account balance becomes zero or a negative number before
the other Participant’s, “Payout” shall not occur until the date that the other
Participant’s Equity Account balance first becomes zero or a negative number.

“Pre-Feasibility Studies” means one or more studies prepared to analyze whether
economically viable Mining Operations may be possible on the Properties.

“Prime Rate” means the interest rate quoted and published as “Prime” as
published in The Wall Street Journal, under the heading “Money Rate,” as the
rate may change from day to day.

“Products” means all ores, minerals and mineral resources produced from the
Properties.

“Program” means a description in reasonable detail of Operations to be conducted
and objectives to be accomplished by the Manager for a period determined by the
Management Committee.

“Program Period” means the time period covered by an adopted Program and Budget.

“Project Financing” means any financing approved by the Management Committee and
obtained by the Participants for the purpose of placing a mineral deposit
situated on the Properties into Commercial Production, including any financing
arranged for by Barrick on behalf of MGC to fund MGC Development Costs, but
shall not otherwise include any financing obtained individually by either
Participant to finance payment or performance of its obligations under the
Agreement.

“Properties” means those interests in real property described in Exhibit A and
all other interests in real property that are acquired and held subject to the
Agreement.

“Qualified Person” means an individual who (a) is an engineer or geoscientist
with at least five years experience in mineral exploration, mine development or
operation or mineral project assessment, or any combination of these; (b) has
experience relevant to the subject matter of the mineral project and the
Technical Report; and (c) is a member in good standing of a statutorily
recognized self-regulating professional organization with disciplinary powers.
The parties acknowledge and agree that the definition of “Qualified Person”
under this Agreement will be deemed to be automatically modified if the
definition of that term is modified in the National Instrument 43 101,
“Standards of Disclosure for Mineral Projects” applicable to all companies
listed on a Canadian stock exchange.

“Recalculated Participating Interest” means the reduced Participating Interest
of a Participant as recalculated under the Agreement.

 

 

EXHIBIT C

PAGE 7

 

 

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

 

 

“Reduced Participant” means a Participant whose Participating Interest is
reduced under the Agreement.

“Spot Price” means: In the case of gold, the London PM fixing in U.S. Dollars
for refined gold (as shown in the column of the Wall Street Journal entitled
“Cash Prices” under the sub-entry entitled “Precious Metals”) for the trading
day on which Products are shipped to the refinery, or the next subsequent
trading day if Products are shipped on a day when no London P.M. fixing is
quoted. In the case of silver, the Handy & Harmon base price for silver in U.S.
Dollars (as shown in the column of the Wall Street Journal entitled “Cash
Prices” under the sub-entry entitled “Precious Metals”) for the trading day on
which Products are shipped to the refinery, or the next subsequent trading day
if Products are shipped on a day when no Handy & Harmon base price is quoted. If
either of such fixings or prices are discontinued, the daily calculated spot
COMEX closing prices for such shipping date (or the next subsequent daily
calculated spot COMEX closing prices if those prices are not quoted on any
shipping date) shall be used. Spot Price for other minerals shall be determined
from a source mutually agreed to by the Participants and generally accepted in
the industry as accurately reflecting the price of such mineral on the open
market at the date and at the place of shipment

“Technical Report” means a report prepared, filed and certified in accordance
with this Agreement and National Instrument 43-101F (as the same may be amended
or replaced from time to time), applicable to all companies listed on a Canadian
stock exchange.

“Transfer” means, when used as a verb, to sell, grant, assign, create an
Encumbrance, pledge or otherwise convey, or dispose of or commit to do any of
the foregoing, or to arrange for substitute performance by an Affiliate or third
party (except as permitted under Subsection 8.2(j) and Section 8.6 of the
Agreement), either directly or indirectly; and, when used as a noun, means such
a sale, grant, assignment, Encumbrance, pledge or other conveyance or
disposition, or such an arrangement.

 

 

EXHIBIT C

PAGE 8

 

 

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

 

 

EXHIBIT D

To

EXPLORATION, DEVELOPMENT AND MINE OPERATING AGREEMENT

By And Between

MGC RESOURCES INC.,

And

BARRICK GOLD EXPLORATION INC.

NET SMELTER RETURNS ROYALTY CALCULATION

 

1.

Net Smelter Returns shall mean:

 

(a) In the case of Products refined into gold or silver of a purity of at least
.995 in the case of gold and at least .999 in the case of silver (collectively
“Refined Precious Metals”), the net number of troy ounces of Refined Precious
Metals delivered or credited to the account of the remaining Participant, or its
order, as the case may be, as evidenced by the metals return statements received
from the refinery, subject in each case to final adjustments with the refinery,
multiplied by the Deemed Sales Price as defined below, less the deductions as
provided in Paragraph 1(d).

 

(b) In the case of Products (including refined metals) that are not Refined
Precious Metals and which are sold by the remaining Participant, the gross
amount actually received by the remaining Participant from the purchaser for the
Products so sold, less the deductions as provided in Paragraph 1(d). If the
purchaser of any such Products is an Affiliate of the seller, the Products will
be valued at fair market value. If the parties fail to agree on such fair market
value, the matter shall be resolved as provided in Article XVI of the Agreement.

 

(c) “Deemed Sales Price” means: In the case of gold, the average of the London
PM fixings in U.S. Dollars for refined gold (as shown in the column of the Wall
Street Journal entitled “Cash Prices” under the sub-entry entitled “Precious
Metals”) for each trading day during the calendar month in which the final
settlement date with the refinery falls, such date to be evidenced by the
refinery metal return statements and, for any subsequent adjustment, for the
calendar month in which such adjustment is made. In the case of silver, the
average of the Handy & Harmon base price for silver in U.S. Dollars (as shown in
the column of the Wall Street Journal entitled “Cash Prices” under the sub-entry
entitled “Precious Metals”) for each trading day during the calendar month in
which the final settlement date with the refinery falls, such date to be
evidenced by the refinery metal return statements and, for any subsequent
adjustment, for the calendar month in which such adjustment is made. If either
of such fixings or prices are not available for any reason for more than half of
the trading days in the relevant month, or are

 

 

EXHIBIT D

PAGE 1

 

 

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

 

 

discontinued, the average of the daily calculated spot COMEX closing prices for
such month shall be used.

 

(d) The remaining Participant shall deduct from Net Smelter Returns, but only to
the extent actually incurred and borne by the remaining Participant:

 

(i) sales, use, gross receipts, severance, ad valorem, goods and services taxes,
or any similar tax provided it is not subject to an input tax credit which is
actually claimed and received, and other taxes, if any, however denominated,
payable with respect to the existence, severance, production, removal, sale or
disposition of Products, but excluding any taxes on net income, net proceeds,
and any royalty or tax or lease payment based on units of production;

 

(ii) charges and costs, if any, for transportation to places where Products are
smelted, refined and sold;

 

(iii) charges, costs and penalties, if any, for smelting, refining and

marketing; and

 

(iv) royalties, rentals, fees and charges payable to the Government with respect
to the Products.

 

In the event smelting or refining are carried out in facilities owned or
controlled, in whole or in part, by the remaining Participant, charges, costs
and penalties with respect to such operations, including transportation, shall
mean reasonable charges, costs and penalties for such operations but not in
excess of the amounts that the remaining Participant would have incurred if such
operations were carried out at facilities not owned or controlled by the
remaining Participant then offering comparable custom services.

 

In the event the remaining Participant receives insurance proceeds for any loss
of Products production, the remaining Participant shall pay to the royalty
recipient the Net Smelter Returns Royalty on such Products, based upon a deemed
sale of such Products deemed to have been made on the date such proceeds are
received by the remaining Participant.

 

(e) All royalty payments shall be made in cash. Royalties shall be paid (i) for
Refined Precious Metals on or before the 30th day after the last day of the
calendar quarter in which the final settlement date for such Refined Precious
Metals falls and (ii) for Products that are not Refined Precious Metals on or
before the 30th day after the last day of the calendar quarter in which the
remaining Participant or its Affiliates actually receives payment for such
Products. Each such payment shall be provisional and subject to adjustment as of
the end of the remaining Participant’s fiscal year. All royalty payments shall
be accompanied by a statement and

 

 

EXHIBIT D

PAGE 2

 

 

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

 

 

settlement sheet showing the quantities and grades of metals, ores, minerals, or
materials mined and sold from the Properties, proceeds of sale, costs assays and
other information in sufficient detail to explain calculation of the royalty
payment.

(f) Within 90 days after the end of each calendar year, the remaining
Participant shall deliver to the royalty recipient an unaudited statement of
royalties paid during the year and the calculation thereof. All year-end
statements shall be deemed true and correct six months after presentation,
unless within that period the royalty recipient delivers notice to the remaining
Participant specifying with particularity the grounds for each exception. The
royalty recipient shall be entitled at the royalty recipient’s expense to an
annual independent audit of the statement by a certified public accountant of
recognized standing acceptable to the remaining Participant, but only if the
royalty recipient delivers a demand for audit to the remaining Participant
within three months after presentation of the related year-end statement. The
remaining Participant shall account for any agreed upon excess or deficit in any
payment made to the royalty recipient hereunder by adjusting the next quarterly
royalty payment following completion of such audit to account for such excess or
deficit. If the results of such audit reveal an underpayment of royalties in
excess of ten percent (10%) of the amount that was otherwise owed, the remaining
participant shall reimburse the royalty recipient for the reasonable costs of
such audit.

 

(g) The remaining Participant may commingle ores and minerals from the
Properties with other ores and minerals. Before commingling, the remaining
Participant shall weigh (or calculate by volume), sample and assay such ores and
minerals in accordance with sound mining and metallurgical practices for
moisture and payable content. The remaining Participant shall keep records of
such determination for one year after the end of the calendar year in which such
determinations are made.

 

(h)  The royalty recipient shall have the inspection rights set forth in
Subsection 5.1(c) of the Agreement.

 

(i)  All profits and losses resulting from the remaining Participant engaging in
any commodity futures trading, option trading, or metals trading, or any
combination thereof, and any other hedging transactions (collectively “hedging
transactions”) are specifically excluded from Net Smelter Returns Royalty
calculation. All hedging transactions by the remaining Participant, and any
profits or losses associated therewith, shall be solely for the remaining
Participant’s account.

 

(j)  Not later than March 1 of each year the remaining Participant shall provide
to the royalty recipient an annual report of all activities and operations
conducted upon or with respect to the Properties during the preceding calendar
year. Such annual report shall include estimates

 

 

EXHIBIT D

PAGE 3

 

 

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

 

 

of proposed expenditures upon, anticipated production from, and estimated
remaining ore reserves on the Properties as of the end of the preceding calendar
year.

 

                

 

 

EXHIBIT D

PAGE 4

 

 

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

 

 

EXHIBIT E

To

EXPLORATION, DEVELOPMENT AND MINE OPERATING AGREEMENT

By And Between

MGC RESOURCES INC.

And

BARRICK GOLD EXPLORATION INC.

NET PROCEEDS CALCULATION

1.1       Income and Expenses. Net Proceeds shall be calculated by deducting
from the Gross Revenue (as defined below) realized (or deemed to be realized),
such costs and expenses attributable to Exploration, Development, Mining, the
marketing of Products and other Operations as would be deductible under
generally accepted accounting principles and practices consistently applied,
including without limitation:

(a)       All costs and expenses of replacing, expanding, modifying, altering or
changing from time to time the Mining facilities. Costs and expenses of
improvements (such as haulage ways or mill facilities) that are also used in
connection with workings other than the Properties shall be charged to the
Properties only in the proportion that their use in connection with the
Properties bears to their total use;

(b)       Ad valorem real property and unsecured personal property taxes, and
all taxes, other than income taxes, applicable to Mining of the Properties,
including without limitation all state mining taxes, sales taxes, severance
taxes, license fees and governmental levies of a similar nature;

(c)       Allowance for overhead in accordance with Paragraph 2.13 of Exhibit B;

(d)       All expenses incurred relative to the sale of Products, including an
allowance for commissions at rates which are normal and customary in the
industry;

(e)       All amounts payable to the remaining Participant during Mining
pursuant to any applicable operating or similar agreement in force with respect
thereto;

(f)        The actual cost of investment under the Agreement but prior to
beginning of Mining, which shall include all expenditures for Exploration and
Development of the

 

 

EXHIBIT E

PAGE 1

 

 

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

 

 

Properties incurred by the non-withdrawing Participant both prior and subsequent
to the withdrawing Participant acquiring a Net Proceeds interest;

(g)       Interest on monies borrowed or advanced for costs and expenses, but in
no event in excess of the maximum permitted by law;

 

(h)

An allowance for reasonable working capital and inventory;

(i)        Costs of funding the Environmental Compliance Fund as provided in
Paragraph 2.14 of Exhibit B;

 

(j)

Actual costs of Operations; and

 

(k)

Rental, royalty, production, and purchase payments.

For purposes hereof, the term “Gross Revenue” shall mean the sum of (i) gross
receipts from sale of Products, less any charges for sampling, assaying, or
penalties; (ii) gross receipts from the sale or other disposition of Assets;
(iii) insurance proceeds; (iv) compensation for expropriation of Assets; and
(v) judgment proceeds. Gross receipts for sale of Products shall mean: in the
case of gold, the London PM fixing in U.S. Dollars for refined gold (as shown in
the column of the Wall Street Journal entitled “Cash Prices” under the sub-entry
entitled “Precious Metals”) for the date of sale; in the case of silver, the
Handy & Harmon base price for silver in U.S. Dollars (as shown in the column of
the Wall Street Journal entitled “Cash Prices” under the sub-entry entitled
“Precious Metals”) for the date of sale; and for all other Products, the gross
amount actually received by the remaining Participant from the purchaser for the
Products so sold.

It is intended that the remaining Participant shall recoup from Gross Revenue
all of its on-going contributions for Exploration, Development, Mining,
Expansion and Modification and marketing Products before any Net Proceeds are
distributed to any person holding a Net Proceeds interest. No deduction shall be
made for income taxes, depreciation, amortization or depletion. If in any year
after the beginning of Mining of the Properties an operating loss relative
thereto is incurred, the amount thereof shall be considered as and be included
with outstanding costs and expenses and carried forward in determining Net
Proceeds for subsequent periods. If Products are processed by the remaining
Participant, or are sold to an Affiliate of the remaining Participant, then, for
purposes of calculating Net Proceeds, such Products shall be deemed conclusively
to have been sold at a price equal to fair market value to an arm’s length
purchaser FOB the concentrator for the Properties, and Net Proceeds relative
thereto shall be calculated without reference to any profits or losses
attributable to smelting or refining.

 

 

EXHIBIT E

PAGE 2

 

 

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

 

 

1.2       Payment of Net Proceeds. Payments of Net Proceeds shall commence in
the calendar quarter following the calendar quarter in which Net Proceeds are
first realized, and shall be made forty-five (45) days following the end of each
calendar quarter during which Net Proceeds are realized, and shall be subject to
adjustment, if required, at the end of each calendar year. The recipient of such
Net Proceeds payments shall have the right to audit such payments following
receipt of each payment by giving notice to the remaining Participant and by
conducting such audit in accordance with Section 10.6 of the Agreement. Costs of
such an audit shall be borne by the holder of the Net Proceeds interest
described herein.

1.3       Definitions. All capitalized words and terms used herein have the same
meaning as in the Agreement.

 

 

EXHIBIT E

PAGE 3

 

 

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

 

 

EXHIBIT F

To

EXPLORATION, DEVELOPMENT AND MINE OPERATING AGREEMENT

By And Between

MGC RESOURCES INC.

And

BARRICK GOLD EXPLORATION INC.

INSURANCE

The Manager shall, at all times while conducting Operations, comply fully with
the applicable worker’s compensation laws and purchase, or provide protection
for the Participants comparable to that provided under standard form insurance
policies for the following risk categories: (i) comprehensive public liability
and property damage with combined limits of not less than $5,000,000 for bodily
injury and property damage; (ii) automobile insurance with combined limits of
not less than $5,000,000; and (iii) adequate and reasonable insurance against
risk of fire and other risks ordinarily insured against in similar operations.
If the Manager elects to self-insure, it shall charge to the Business Account an
amount equal to the premium it would have paid had it secured and maintained a
policy or policies of insurance on a competitive bid basis in the amount of such
coverage. Each Participant shall self-insure or purchase for its own account
such additional insurance as it deems necessary.

 

 

EXHIBIT F

PAGE 1

 

 

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

 

 

EXHIBIT G

To

EXPLORATION, DEVELOPMENT AND MINE OPERATING AGREEMENT

By And Between

MGC RESOURCES INC.

And

BARRICK GOLD EXPLORATION INC.

PREEMPTIVE RIGHTS

1.1       Preemptive Rights. If either Participant intends to Transfer all or
any part of its Participating Interest, or an Affiliate of either Participant
intends to Transfer Control of such Participant (“Transferring Entity”), but not
in the event of a proposed acquisition of Control of an Affiliate of a
Participant, such Participant shall promptly notify the other Participant of
such intentions. The notice shall state the price and all other pertinent terms
and conditions of the intended Transfer, and shall be accompanied by a copy of
the offer or the contract for sale. If the consideration for the intended
transfer is, in whole or in part, other than monetary, the notice shall describe
such consideration and its monetary equivalent (based upon the fair market value
of the nonmonetary consideration and stated in terms of cash or currency). The
other Participant shall have 30 days from the date such notice is delivered to
notify the Transferring Entity (and the Participant if its Affiliate is the
Transferring Entity) whether it elects to acquire the offered interest at the
same price (or its monetary equivalent in cash or currency) and on the same
terms and conditions as set forth in the notice. If it does so elect, the
acquisition by the other Participant shall be consummated promptly after notice
of such election is delivered;

(a)       If the other Participant fails to so elect within the period provided
for above, the Transferring Entity shall have 120 days following the expiration
of such period to consummate the Transfer to a third party at a price and on
terms no less favorable to the Transferring Entity than those offered by the
Transferring Entity to the other Participant in the aforementioned notice;

(b)       If the Transferring Entity fails to consummate the Transfer to a third
party within the period set forth above, the preemptive right of the other
Participant in such offered interest shall be deemed to be revived. Any
subsequent proposal to Transfer such interest shall be conducted in accordance
with all of the procedures set forth in this Paragraph.

 

EXHIBIT G

PAGE 1

 

 

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

 

 

1.2       Exceptions to Preemptive Right. Paragraph 1.1 above shall not apply to
the following:

 

(a)       Transfer by either Participant of all or any part of its Participating
Interest to an Affiliate;

(b)       Incorporation of either Participant, or corporate consolidation or
reorganization of either Participant by which the surviving entity shall possess
substantially all of the stock or all of the property rights and interests, and
be subject to substantially all of the liabilities and obligations of that
Participant;

(c)       Corporate merger or amalgamation involving either Participant by which
the surviving entity or amalgamated company shall possess all of the stock or
all of the property rights and interests, and be subject to substantially all of
the liabilities and obligations of that Participant; provided, however, that the
value of the merging or amalgamating Participant’s Net Worth does not exceed 50%
percent of the Net Worth of the surviving entity or amalgamated company;

(d)       the transfer of Control of either Participant by an Affiliate to such
Participant or to another Affiliate;

(e)       subject to Subsection 14.2(f) of the Agreement, the grant by either
Participant of a security interest in its Participating Interest by Encumbrance;

(f)        the creation by any Affiliate of either Participant of an Encumbrance
affecting its Control of such Participant;

(g)       a sale or other commitment or disposition of Products or proceeds from
sale of Products by either Participant upon distribution to it pursuant to
Article XI of the Agreement; or

(h)       a transfer by an Affiliate of either Participant of direct Control of
such Participant to a third party, provided the Net Worth of such Participant
does not exceed 50% of the Net Worth of the transferring Affiliate, or does not
exceed 50% of the Net Worth of Transferee.

For purposes hereof, the term “Net Worth” shall mean the remainder after total
liabilities are deducted from total assets. In the case of a corporation, Net
Worth includes both capital stock and surplus. In the case of a limited
liability company, Net Worth includes member contributions. In the case of a
partnership or sole proprietorship, Net Worth includes the original investment
plus accumulated and reinvested profits.

 

 

EXHIBIT G

PAGE 2