Exhibit 10.1
AMENDED AND RESTATED FUNDING AGREEMENT
 
SOCIÉTÉ DES MINES DE TAPARKO (SOMITA, SA)
and
ROYAL GOLD, INC.
 
Taparko — Bouroum Project
Republic of Burkina Faso
$35,000,000
Dated as of February 22, 2006

 

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TABLE OF CONTENTS

                                      Page   ARTICLE I DEFINITIONS AND
REFERENCES     2  
 
                        Section 1.1   Defined Terms     2       Section 1.2  
Exhibits and Schedules; Additional Definitions     11       Section 1.3  
Amendment of Defined Instruments     11       Section 1.4   References and
Titles     12       Section 1.5   Joint Preparation; Construction of Indemnities
and Releases     12       Section 1.6   Currency     12  
 
                    ARTICLE II THE FUNDING     12  
 
                        Section 2.1   Commitment to Fund     12      
Section 2.2   Requests for Tranches     13       Section 2.3   Use of Funds    
13       Section 2.4   Security     13       Section 2.5   Project Engineer    
13  
 
                    ARTICLE III CONDITIONS PRECEDENT AND SUBSEQUENT TO FUNDING  
  14  
 
                        Section 3.1   Conditions to Disbursement of First
Tranche     14       Section 3.2   Conditions to Disbursement of Second Tranche
    15       Section 3.3   Additional Conditions Precedent     18      
Section 3.4   Condition to Disbursement of Tranches After March, 2006     19    
  Section 3.5   Condition Subsequent     19  
 
                    ARTICLE IV REPRESENTATIONS AND WARRANTIES     19  
 
                        Section 4.1   Organization and Good Standing     19    
  Section 4.2   Power; Authorization     20       Section 4.3   No Conflicts or
Consents     20       Section 4.4   Enforceable Obligations     20      
Section 4.5   Other Obligations and Restrictions     20       Section 4.6  
Financial Condition     20       Section 4.7   Capitalization of Somita     21  
    Section 4.8   Relationship Between Somita and its Parent Companies     21  
    Section 4.9   Full Disclosure     22  
 
  Section 4.10       Litigation     22  
 
  Section 4.11       Labor Disputes and Acts of God     22  
 
  Section 4.12       Subsidiaries     22  
 
  Section 4.13       Bank Accounts     22  
 
  Section 4.14       Easements, Property Interests, Permits, Utilities, Etc    
22  
 
  Section 4.15       Environmental Matters     23  

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                page  
 
  Section 4.16       Project Cost and Project Completion     23  
 
  Section 4.17       Projections     23  
 
  Section 4.18       Interest in Land     23  
 
  Section 4.19       Project Documents     23  
 
  Section 4.20       No Sovereign Immunity     24  
 
  Section 4.21       Taxes and Reports     24  
 
  Section 4.22       Defaults     24  
 
                    ARTICLE V AFFIRMATIVE COVENANTS     24  
 
                        Section 5.1   Project Completion     24      
Section 5.2   Company Operations; Maintenance of Project     25      
Section 5.3   Payment and Performance     25       Section 5.4   Compliance with
Agreements and Law     25       Section 5.5   Books, Financial Statements and
Reports     25       Section 5.6   Access and Inspections     27      
Section 5.7   Notice of Material Events     28       Section 5.8   Maintenance
of Existence and Qualifications     28       Section 5.9   Payment of Trade
Liabilities, Taxes, etc.     28  
 
  Section 5.10       Insurance     29  
 
  Section 5.11       Studies, Protocols and Action Plans     30  
 
  Section 5.12       Government Approvals and Notices     31  
 
  Section 5.13       Refining Contracts     31  
 
  Section 5.14       Evidence of Compliance     31  
 
  Section 5.15       HRG Fundings     31  
 
  Section 5.16       Further Assurances     32  
 
                    ARTICLE VI NEGATIVE COVENANTS     32  
 
                        Section 6.1   Indebtedness     32       Section 6.2  
Limitation on Liens     32       Section 6.3   Project Abandonment     32      
Section 6.4   Limitation on Mergers, Issuances of Securities     32      
Section 6.5   Limitation on Asset Disposition     33       Section 6.6  
Limitation on Dividends and Redemptions     33       Section 6.7   Limitation on
Investments and New Businesses     33       Section 6.8   Transactions with
Affiliates     33       Section 6.9   Contracts     34  
 
  Section 6.10       No Subsidiaries     34  
 
  Section 6.11       Satisfaction of Conditions Precedent     34  
 
                    ARTICLE VII EVENTS OF DEFAULT AND REMEDIES     34  
 
                        Section 7.1   Events of Default     34       Section 7.2
  Remedies     36  

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                                        Page   ARTICLE VIII MISCELLANEOUS     37
 
 
                        Section 8.1   Waivers and Amendments; Acknowledgments  
  37       Section 8.2   Survival of Agreements; Cumulative Nature     38      
Section 8.3   Notices     38       Section 8.4   Payment of Expenses; Indemnity
    39       Section 8.5   Parties in Interest; Assignments     40      
Section 8.6   Confidentiality     41       Section 8.7   Governing Law     41  
    Section 8.8   Limitation on Interest     41       Section 8.9   Termination;
Limited Survival     42  
 
  Section 8.10       Severability     42  
 
  Section 8.11       Counterparts; Facsimile Execution     42  
 
  Section 8.12       Dispute Resolution.     42  
 
  Section 8.13       Service of Process.     44  
 
  Section 8.14       English Language.     45  
 
  Section 8.15       Termination of Agreement.     45  
 
  Section 8.16       Good Faith and Fair Dealing.     45  

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SCHEDULES AND EXHIBITS

         
Schedule I
  —   Bouroum Permit
Schedule II
  —   Taparko Permit
Schedule III
  —   Completion Test and Process
Schedule IV
  —   Taparko Mining Convention
Schedule V
  —   Tranche Funding Schedule
Schedule VI
  —   Project Milestones Schedule
Schedule 4.13
  —   Bank Accounts

         
Exhibit A-1
  —   Form of Guaranty I
Exhibit A-2
  —   Form of Guaranty II
Exhibit B-1
  —   Form of Pledge I
Exhibit B-2
  —   Form of Pledge II
Exhibit C
  —   Form of CAT Agreement
Exhibit D-1
  —   Form of Conveyance of Production Payments
Exhibit D-2
  —   Form of Conveyance of Tail Royalty and Grant of Milling Fee
Exhibit E
  —   Form of Funding Request
Exhibit F
  —   Form of Project Engineer Certificate
Exhibit G
  —   Form of Responsible Officer Certificate
Exhibit H
  —   Form of Legal Opinions to be delivered at Second Funding
Exhibit I
  —   Form of Certificate Accompanying Financial Statements
Exhibit J
  —   Form of Monthly Construction Report
Exhibit K
  —   Form of Monthly Operations Report
Exhibit L
  —   Form of Contribution Agreement

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AMENDED AND RESTATED FUNDING AGREEMENT
     This AMENDED AND RESTATED FUNDING AGREEMENT (this “Agreement”) dated as of
February 22, 2006, is by and between Société des Mines de Taparko, also known as
SOMITA, SA, a société anonyme formed under the laws of the Republic of Burkina
Faso (“Somita”), and ROYAL GOLD, INC., a corporation formed under the laws of
Delaware, USA (“Royal Gold”).
Recitals
     A. Somita is developing the Taparko/Bouroum gold mine project in the
Republic of Burkina Faso, which will include construction of a mine, support
facilities and CIL plant capable of milling and processing one million
(1,000,000) tonnes of ore per year.
     B. Somita desires to obtain funding in the amount of US $35,000,000 to be
used in connection with development of the Taparko/Bouroum gold mine project and
has requested that Royal Gold provide such funding.
     C. Royal Gold is in the business of acquiring and managing precious metals
royalty interests and providing funding to enterprises in exchange for such
interests.
     D. HRG is the indirect owner of 90% of the issued and outstanding shares of
Somita, through its subsidiary, Shareholder. The Government of the Republic of
Burkina Faso is the owner of the remaining 10% of the issued and outstanding
shares of Somita.
     E. Somita and Royal Gold entered into a Funding Agreement dated as of
December 1, 2005, (the “Original Funding Agreement”) as amended by First
Amendment to Funding Agreement dated as of February 8, 2006, (the “First
Amendment”). Pursuant to the Original Funding Agreement, Royal Gold agreed to
provide funding to Somita in the amount of $35,000,000 to be used in the
development of the Project (defined below) in Burkina Faso.
     F. Prior to the date of this Agreement, Royal Gold has provided Somita the
amount of $9,414,000 under the First Tranche pursuant to the terms and
conditions of the Original Funding Agreement, as amended by the First Amendment.
     G. Due to circumstances beyond the control of Somita, the estimate of the
cost to achieve Project Completion has increased. Somita intends to continue the
development of the Project, and HRG has guaranteed that Somita will have
sufficient funds, in addition to the funds to be provided by Royal Gold pursuant
to this Agreement, to achieve Project Completion on schedule.
     H. In connection with the Original Funding Agreement and the initial
disbursement of the First Tranche, HRG executed a guaranty of Somita’s
obligation to repay the First Tranche, which was secured by a pledge of shares
of stock of Intrepid Minerals Corporation and Pelangio Mines Inc. HRG has agreed
to pledge those shares to Royal Gold to secure HRG’s obligation to

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provide funding and to provide additional security for performance by Senet
under the Construction Contract with Somita.
     I. Under the terms of the Original Funding Agreement, as amended by the
First Amendment, it is a condition precedent to Royal Gold’s obligation to fund
the Second Tranche that HRG deliver a guaranty of Somita’s obligation to
complete the Project and a pledge executed by HRG and Shareholder of all of the
stock of Shareholder and all of Shareholder’s shares of stock in Somita. HRG and
Shareholder have agreed that such pledge will also secure the obligation of HRG
described in Recital H above.
     J. Royal Gold is agreeable to continuing to provide up to $35,000,000 of
funding to Somita on the terms and conditions set forth herein.
Agreement
     In consideration of the mutual covenants and agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS AND REFERENCES
     Section 1.1 Defined Terms. As used in this Agreement, each of the following
terms has the meaning given to such term in this Section 1.1 or in the sections
and subsections referred to below:
     “Affiliate” means, as to any Person, each other Person that directly or
indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person. A Person shall be
deemed to be “controlled by” any other Person if such other Person possesses,
directly or indirectly, power to:
     (a) vote 5% or more of the securities or other equity interests (on a fully
diluted basis) having ordinary voting power for the election of directors, the
managing general partner or partners or the managing member or members; or
     (b) direct or cause the direction of the management and policies of such
Person, whether by contract or otherwise.
     “Agreement” means this Amended and Restated Funding Agreement.
     “Availability Period” means the period commencing on the Closing Date and
ending on the earliest to occur of (i) June 30, 2007, (ii) the Completion Date
(provided, however, that Somita shall have the right to request disbursement of
the full amount of the Funding if the Completion Date occurs prior to June 30,
2007, and total amount of the Funding has not yet been disbursed to Somita), or
(iii) the date on which Royal Gold has disbursed the total amount of the Funding
to Somita.

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     “Average Gold Price” means, for any calendar month, the average daily P.M.
price fixed for gold by the London Bullion Association as reported in the Wall
Street Journal or any other agreed-upon successor publication for the applicable
calendar month.
     “Bouroum Mining Convention” means the mining investment convention to be
executed by HRG and the Minister for Energy and Mines on behalf of the
Government, at a date not later than as set forth in the Project Milestones
Schedule.
     “Bouroum Permit” means Decree No. 2005-342/PRES/PM/MCE/MFB issued by the
Government on June 21, 2005, a copy of which is attached hereto as Schedule I.
     “Bouroum Lands” means all of the land included in the Bouroum Permit, being
approximately 11.7 square kilometers, which land is more particularly described
in Schedule I attached hereto.
     “Business Day” means any day, other than a Saturday, Sunday or a legal
holiday in Colorado or Ontario or Ouagadougo or a day on which banking
institutions are required or authorized to close in any of such cities.
     “Canadian GAAP” means those generally accepted accounting principles and
practices which are set out from time to time in the Handbook of the Canadian
Institute of Chartered Accountants (or any generally recognized successor) If
any change in any accounting principle or practice is required by the Canadian
Institute of Chartered Accountants (or any such successor) in order for such
principle or practice to continue as a generally accepted accounting principle
or practice, all reports and financial statements required hereunder or in
connection herewith may be prepared in accordance with such change, but all
calculations and determinations to be made hereunder may be made in accordance
with such change only after notice of such change is given to Royal Gold.
     “CAT” means Caterpillar Financial Services Corporation or such other
equipment financier as suggested by Somita and accepted by Royal Gold, acting
reasonably.
     “CAT Agreement” means the CAT Agreement entered into or to be entered into
between Somita and CAT, substantially in the form of Exhibit C.
     “Change of Control” means the occurrence of any of the following: (a) the
adoption of a plan relating to the merger, consolidation, liquidation or
dissolution of Somita, or (b) HRG shall cease to own, directly or indirectly, at
least 51%, in the aggregate, of the stock or voting interests of Somita.
     “Closing Date” means December 1, 2005.
     “Completion Date” means the date on which Project Completion occurs.
     “Completion Test” means the requirements described on Schedule III.

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     “Construction Contract” means the Taparko/Bouroum Project Contract
Agreement, dated as of February 3, 2006, between Senet and Somita.
     “Contribution Agreement” means the Contribution Agreement in Support of
Somita Funding Agreement, dated as of the date hereof, between HRG and Royal
Gold, in form and substance as set forth in Exhibit L hereto.
     “Conveyance of Production Payments” means the Conveyance of Production
Payments, which contains the grant of PP1 and PP2 production payments, to be
executed by Somita in form and substance as set forth in Exhibit D-1 hereto.
     “Conveyance of Tail Royalty and Grant of Milling Fee” means the Conveyance
of Tail Royalty and Grant of Milling Fee, which contains the grant of the Tail
Royalty and the agreement to pay the Milling Fee, to be executed by Somita in
form and substance as set forth in Exhibit D-2 hereto.
     “Corrupt Practices Laws” means (a) the Foreign Corrupt Practices Act of
1977 (Pub.L. No. 95-213, Sections 101-104), as amended, and (b) any other law,
regulation, order, decree or directive having the force of law and relating to
bribery, kick-backs, or similar business practices.
     “Default” means any Event of Default and any default, event or condition
which would, with the giving of any requisite notices and the passage of any
requisite periods of time, constitute an Event of Default.
     “Development Plan” or “Plan” means the Bankable Feasibility Study for the
Taparko/Bouroum Gold Project prepared by HRG dated May 2004, which describes,
among other things, details for the completion and installation of the
processing plant, equipment and related infrastructure, together with the
updates to the financial projections contained therein as have been furnished to
Royal Gold prior to the date hereof.
     “Distribution” means (a) any dividend or other distribution made by Somita
on or in respect of any stock, partnership interest, membership interest, or
other equity interest in Somita (including any option or warrant to buy such an
equity interest) or (b) any payment made by Somita to purchase, redeem, acquire
or retire any stock, partnership interest, membership interest or other equity
interest in Somita (including any such option or warrant).
     “Dollars” or “$” means the lawful money of the United States of America.
     “Environmental Laws” means any and all Laws of the Government of the
Republic of Burkina Faso relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes.

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     “Events of Default” has the meaning given to such term in Section 7.1.
     “Financial Model” means the cash flow model, which shall reflect all
relevant pre and post construction and operating information from the
Development Plan.
     “Financial Statements” means, with respect to any Person, such Person’s
quarterly or annual balance sheet and statements of income, retained earnings,
and sources and application of funds for such fiscal period, together with all
notes thereto and with comparable figures for the corresponding period of its
previous Fiscal Year, each prepared in Dollars (except those prepared in respect
of HRG, which are prepared in Canadian dollars) in accordance with Canadian
GAAP, provided, however, that any such quarterly balance sheets or statements of
income, retained earnings or sources and application of funds will be unaudited,
will be subject to normal year-end audit adjustments and, to the extent that
they will not include footnotes, need not be in accordance with Canadian GAAP.
     “First Tranche” means the initial Tranche of the Funding in the amount of
$9,414,000, which tranche has been funded by Royal Gold.
     “Fiscal Quarter” means a three-month period ending on March 31, June 30,
September 30 or December 31 of any year.
     “Fiscal Year” means a twelve-month period ending on December 31 of any
year.
     “Funding” means on any date, the aggregate of the amount of the Tranches
disbursed by Royal Gold.
     “Funding Documents” means this Agreement, the Initial Guaranty, the Initial
Pledge, Guaranty I, Pledge I, Guaranty II, Pledge II, the Contribution
Agreement, the Somita Assignments and all other agreements, certificates,
documents, notices, instruments and writings delivered pursuant to Sections 3.1
through 3.3 and all other writings executed by Somita, HRG, International or
Shareholder and delivered in connection herewith or therewith, including,
without limitation, the Original Funding Agreement, the First Amendment and the
Consent of Guarantor, dated as of February 8, 2006, by HRG in favor of Royal
Gold.
     “Funding Request” means a written request, or a telephonic request followed
by a written confirmation, made by Somita which meets the requirements of
Section 2.2.
     “Government” means the Government of the Republic of Burkina Faso,
including, without limitation, the executive, legislative and judicial branches
thereof, and each and every ministry, board, bureau, department and commission
thereof, including, without limitation, the Ministry for Energy and Mines.
     “Guaranty I” means the Guarantee Agreement by HRG for the benefit of Royal
Gold, which, among other things, shall provide an additional guarantee of
performance by Senet under the Construction Contract, in form and substance set
forth in Exhibit A-1 hereto.

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     “Guaranty II” means the Guaranty by HRG, in form and substance set forth in
Exhibit A-2 hereto.
     “HRG” means High River Gold Mines Ltd., a corporation formed under the
federal laws of Canada.
     “HRG Equity Commitment” means the contribution by HRG, or other arrangement
for funding by third parties, which shall be in a total cumulative amount of at
least $33,000,000, of which the net amount of $22,152,617 has been contributed
by HRG as of the date of this Agreement, as detailed in the Financial Model.
     “ICC” has the meaning set forth in Section 8.12.
     “Indebtedness” of any Person means Liabilities in any of the following
categories (without duplication):
     (a) Liabilities for borrowed money or arising out of any credit facility,
including without limitation, any obligation or credit facility denominated in
gold or any other commodity;
     (b) Liabilities constituting an obligation to pay the deferred purchase
price of property or services;
     (c) Liabilities evidenced by a bond, debenture, note or similar instrument;
     (d) Liabilities which (i) would under Canadian GAAP be shown on such
Person’s balance sheet as a liability, and (ii) are payable more than one year
from the date of creation or incurrence thereof (other than reserves for taxes
and reserves for contingent obligations);
     (e) Liabilities arising under conditional sales or other title retention
agreements with respect to property acquired by such Person;
     (f) Liabilities owing under direct or indirect guaranties of Liabilities of
any other Person or otherwise constituting obligations to purchase or acquire or
to otherwise protect or insure a creditor against loss in respect of Liabilities
of any other Person (such as obligations under working capital maintenance
agreements, agreements to keep-well, or agreements to purchase Liabilities,
assets, goods, securities or services), but excluding endorsements in the
ordinary course of business of negotiable instruments in the course of
collection;
     (g) Liabilities consisting of an obligation to purchase or redeem
securities or other property, if such Liabilities arise out of or in connection
with the sale or issuance of the same or similar securities or property (for
example, obligations of such type under repurchase agreements, mandatorily
redeemable preferred stock and sale/leaseback agreements);
     (h) Liabilities with respect to letters of credit or applications or
reimbursement agreements therefor;
     (i) Liabilities with respect to banker’s acceptances; or

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     (j) Liabilities with respect to other obligations to deliver goods or
services in consideration of advance payments therefor;
provided, however, that the “Indebtedness” of any Person shall not include
Liabilities that were incurred by such Person on ordinary trade terms to
vendors, suppliers, or other Persons providing goods and services for use by
such Person in the ordinary course of its business, unless and until such
Liabilities are outstanding more than 120 days after the date the respective
goods are delivered or the respective services are rendered, other than
Liabilities contested in good faith by appropriate proceedings, if required, and
for which adequate reserves are maintained on the books of such Person in
accordance with Canadian GAAP.
     “Initial Guaranty” means the Guarantee Agreement by HRG for the benefit of
Royal Gold, dated as of December 1, 2005.
     “Initial Pledge” means Pledge of Securities by HRG for the benefit of Royal
Gold, dated as of December 1, 2005.
     “International” means High River Gold Mines (International) Ltd., a
corporation formed under the laws of the Cayman Islands.
     “Investment” means any investment, made directly or indirectly, in any
Person, whether by purchase or acquisition of equity interests, indebtedness or
other obligations or securities or by extension of credit, loan, advance,
capital contribution or otherwise and whether made in cash, by the transfer of
property, or by any other means.
     “Law” means any statute, law (including Environmental Laws), regulation,
ordinance, rule, treaty, judgment, order, decree, permit, concession, franchise,
license, agreement or other governmental restriction of the Republic of Burkina
Faso, the United States, or Canada or any securities exchange, province, state
or political subdivision thereof or of any other foreign country or any
department, province or other political subdivision thereof having jurisdiction.
Any reference to a Law includes any amendment or modification to such Law, and
all regulations, rulings, and other Laws promulgated under such Law.
     “Liabilities” means, as to any Person, all indebtedness, liabilities and
obligations of such Person, whether matured or unmatured, liquidated or
unliquidated, primary or secondary, direct or indirect, absolute, fixed or
contingent, and whether or not required to be considered pursuant to Canadian
GAAP.
     “LIBOR” means the rate per annum (rounded upwards if necessary to the
nearest whole one-sixteenth of one percent (1/16%)) equal to (a) the average of
the offered rates as of 11:00 a.m., London time, on the date of determination
appearing on the display designated as page “LIBO” on the Reuter Monitor Money
Rates Service (or such other page as may replace the LIBO page on that service
for the purpose of displaying London interbank offered rates of major banks) for
Dollar deposits for the relevant period of time, or (b) if fewer than two
offered rates appear o the display referred to in clause (a) above, the rate
determined by the Lender (which determination shall be conclusive in the absence
of manifest error) to be the average of the rates

7

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at which banks are offered Dollar deposits for the relevant period of time in
the interbank Eurodollar market at about 11:00 a.m., London time.
     “Lien” means, with respect to any property or assets, any right or interest
therein of a creditor to secure Liabilities owed to it or any other arrangement
with such creditor which provides for the payment of such Liabilities out of
such property or assets or which allows such creditor to have such Liabilities
satisfied out of such property or assets prior to the general creditors of any
owner thereof, including any lien, mortgage, security interest, pledge, deposit,
production payment, rights of a vendor under any title retention or conditional
sale agreement or lease substantially equivalent thereto, tax lien, mechanic’s
or materialman’s lien, or any other charge or encumbrance for security purposes,
whether arising by Law or agreement or otherwise, but excluding any right of
offset which arises without agreement in the ordinary course of business. “Lien”
also means any filed financing statement, any registration of a pledge (such as
with an issuer of uncertificated securities), or any other arrangement or action
which would serve to perfect a Lien described in the preceding sentence,
regardless of whether such financing statement is filed, such registration is
made, or such arrangement or action is undertaken before or after such Lien
exists.
     “Material Adverse Effect” means a material and adverse change in (i) the
Project, (ii) the business, operations, prospects, condition (financial or
otherwise), or property of Somita or (until the Completion Date) HRG, (iii) the
ability of Somita or any other party to perform in a timely manner its material
obligations under any of the Funding Documents, (iv) the validity or
enforceability of any material provision of any Funding Document, or (v) the
rights and remedies of Royal Gold under any of the Funding Documents.
     “Maximum Amount” means the amount of $35,000,000, or such other amount to
which the parties to the Agreement may agree in writing.
     “Milling Fee” means the mill throughput fee identified as the “Milling Fee”
in the Conveyance of Tail Royalty and Grant of Milling Fee.
     “Mining Law” means, collectively, the Kiti Decree No. AN VIII-0328 of
4/6/91 on land reform in Burkina Faso as amended by decree 93-252; Act
No. 14-93/ADP instituting a mining investments code; Decree No. 2000-629
relating to operations conducted under mining titles; and Act No. 031-2003/AN
instituting a new mining code.
     “Mining Rights” means all interests in the surface of any lands, the
minerals in or that may be extracted from any lands, all water rights, all
easements, rights-of-way, inurements and other rights and interests used by
Somita or necessary or advisable to implement the Development Plan and operate
the Project.
     “Obligations” means all Liabilities from time to time owing by Somita or
any Responsible Party to Royal Gold under or pursuant to any of the Funding
Documents, and “Obligation” means any part of the Obligations.

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     “Parties” means Royal Gold and Somita, together with any other Person that
may be a party to this Agreement from time to time.
     “Permitted Liens” means:
     (a) Liens created pursuant to this Agreement or the other Funding
Documents;
     (b) Liens imposed by statute for amounts not yet due and payable;
     (c) Liens imposed by the Taparko Mining Convention or governing law for
taxes, assessments or charges not yet due and payable;
     (d) Carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s,
landlord’s, or other like Liens which do not secure Indebtedness arising in the
ordinary course of business for amounts which are not more than sixty (60) days
past due or the validity of which is being contested in good faith and by
appropriate proceedings, if necessary, and for which adequate reserves are
maintained on the books of Somita in accordance with Canadian GAAP;
     (e) Liens in respect of purchase money obligations, operating leases, and
equipment financing, provided that such Indebtedness is permitted under
Section 7.1; or
     (f) Liens arising under or pursuant to the CAT Agreement, provided such
Liens affect only the equipment financed thereby.
     “Person” means an individual, corporation, general partnership, limited
partnership, limited liability company, association, joint stock company, trust
or trustee thereof, estate or executor thereof, Tribunal, or any other legally
recognizable entity.
     “Pledge I” means the Pledge of Securities by HRG for the benefit of Royal
Gold, which shall secure the obligations of HRG under Guaranty I and Guaranty II
and the performance of HRG with respect to the HRG Equity Commitment with a
pledge of shares of Intrepid Minerals Corporation and Pelangio Mines Inc., in
form and substance as set forth in Exhibit B-1 hereto.
     “Pledge II” means the Pledge Agreement to be executed by International,
Shareholder and Royal Gold in form and substance as set forth in Exhibit B-2
hereto.
     “PP1” means the production payment identified as “PP1” in the Conveyance of
Production Payments.
     “PP2” means the production payment identified as “PP2” in the Conveyance of
Production Payments.
     “PP1 and PP2 Obligations” means all obligations and amounts owing under PP1
and PP2.
     “Project” means the development and exploitation of the Taparko Lands and
the Bouroum Lands for production of gold and associated precious metals,
including construction of

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a mine, support facilities and a plant capable of milling and processing
1,000,000 tonnes of ore per year, all as more particularly set forth in the
Development Plan.
     “Project Assets” means all properties, assets or other rights, whether real
or personal, tangible or intangible, now owned or hereafter acquired by or for
the benefit of Somita, which are used or intended for use in or forming part of
the Project.
     “Project Completion” means satisfaction of all requirements of the
Completion Test.
     “Project Engineer” has the meaning set forth in Section 2.5.
     “Project Milestones Schedule” means the milestones to be completed in the
construction of the Project and the dates therefor set forth in Schedule VI
hereto.
     “Properties” means the Taparko Lands and the Bouroum Lands, collectively.
     “Refining Contracts” means, at any time, all agreements then in force
pursuant to which Somita has the right to sell, or to have toll refined, gold,
gold dore or gold ore.
     “Request for Arbitration” has the meaning set forth in Section 8.12.
     “Responsible Officer” means, with respect to Persons other than Somita, a
Director, President, Vice President or Chief Financial Officer of such Person,
and with respect to Somita, a Director of Somita.
     “Responsible Party” means in respect of each of the Funding Documents, each
of Somita, HRG, International and Shareholder who is a signatory to such Funding
Document, and their respective successors and assigns.
     “Royal Gold” has the meaning set forth in the Preamble.
     “Rules” has the meaning set forth in Section 8.12.
     “Second Tranche” means the second Tranche of the Funding, the request for
which shall be received by Royal Gold in a Funding Request and shall be
disbursed by Royal Gold to Somita following the satisfaction or waiver by Royal
Gold of all of the conditions precedent set forth in Section 3.2 and
Section 3.3, together with any other restriction placed upon the funding of
Tranches in this Agreement.
     “Secretariat” has the meaning set forth in Section 8.12.
     “Senet” means Senet CC, a corporation formed under the laws of the Republic
of South Africa.
     “Shareholder” means High River Gold Mines (West Africa) Ltd., a corporation
formed under the laws of the Cayman Islands.
     “Somita” has the meaning set forth in the Preamble.

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     “Somita Assignments” means, collectively, the Conveyance of Production
Payments and the Conveyance of Tail Royalty and Grant of Milling Fee.
     “Subsidiary” means, with respect to any Person, any corporation,
association, partnership, limited liability company, joint venture, or other
business or corporate entity, enterprise or organization which is directly or
indirectly (through one or more intermediaries) controlled by or owned fifty
percent or more by such Person.
     “Tail Royalty” means the royalty identified as the “Tail Royalty” in the
Conveyance of Tail Royalty and Grant of Milling Fee.
     “Taparko Mining Convention” means the mining investment convention signed
by HRG and the Minister for Energy and Mines on behalf of the Government on
December 15, 1995, a copy of which is attached here to as Schedule IV.
     “Taparko Permit” means Decree No. 2004-329/PRES/PM/MCE/MFB/ MEDE/MECV
issued by the Government on August 6, 2004, a copy of which is attached hereto
as Schedule II.
     “Taparko Lands” means that portion of the land included in the Taparko
Permit that is more particularly described in Schedule II hereto, being
approximately 34.7 square kilometers out of the total 666.5 square kilometers
included in such permit.
     “Tranche” means the amount of each disbursement of the Funding by Royal
Gold, as set forth in the Tranche Funding Schedule, including, without
limitation, the First Tranche and the Second Tranche.
     “Tranche Funding Schedule” means the amounts and the dates on which such
amounts are to be funded, subject to the conditions set forth in this Agreement,
set forth on Schedule V hereto.
     “Tribunal” means any government, any arbitration panel, any court or any
governmental department, commission, board, bureau, agency or instrumentality of
the Republic of Burkina Faso, the United States of America, Canada or any other
country having jurisdiction, or any state, province, commonwealth, nation,
territory, possession, county, parish, town, township, village or municipality
thereof, whether now or hereafter constituted or existing.
     Section 1.2 Exhibits and Schedules; Additional Definitions. All Exhibits
and Schedules attached to this Agreement are a part hereof for all purposes.
     Section 1.3 Amendment of Defined Instruments. Unless the context otherwise
requires or unless otherwise provided herein the terms defined in this Agreement
which refer to a particular agreement, instrument or document also refer to and
include all renewals, extensions, modifications, amendments and restatements of
such agreement, instrument or document, provided that nothing contained in this
section shall be construed to authorize any such renewal, extension,
modification, amendment or restatement.

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     Section 1.4 References and Titles. All references in this Agreement to
Exhibits, Schedules, articles, sections, subsections and other subdivisions
refer to the Exhibits, Schedules, articles, sections, subsections and other
subdivisions of this Agreement unless expressly provided otherwise. References
to any document, instrument, or agreement (a) shall include all exhibits,
schedules, and other attachments thereto, and (b) shall include all documents,
instruments, or agreements issued or executed in replacement thereof. Titles
appearing at the beginning of any subdivisions are for convenience only and do
not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions. The words “this
Agreement,” “this instrument,” “herein,” “hereof,” “hereby,” “hereunder” and
words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited. The phrases “this section”
and “this subsection” and similar phrases refer only to the sections or
subsections hereof in which such phrases occur. The word “or” is not exclusive,
and the word “including” (in its various forms) means “including without
limitation.” Pronouns in masculine, feminine and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
requires. Accounting terms have the meanings assigned to them by Canadian GAAP,
as applied by the accounting entity to which they refer. References to “days”
shall mean calendar days, unless the term “Business Day” is used. Unless
otherwise specified, references herein to any particular Person also refer to
its successors and permitted assigns.
     Section 1.5 Joint Preparation; Construction of Indemnities and Releases.
This Agreement and the other Funding Documents have been reviewed and negotiated
by sophisticated parties with access to legal counsel and no rule of
construction shall apply hereto or thereto which would require or allow any
Funding Document to be construed against any party because of its role in
drafting such Funding Document. All indemnification and release provisions of
this Agreement shall be construed broadly (and not narrowly) in favor of the
Persons receiving indemnification or being released.
     Section 1.6 Currency. All amounts stated herein are in Dollars unless
specifically stated otherwise.
ARTICLE II
THE FUNDING
     Section 2.1 Commitment to Fund. Subject to the terms and conditions hereof,
Royal Gold shall disburse Tranches to Somita upon Somita’s request during the
Availability Period, up to the Maximum Amount. As consideration for the Funding,
Somita shall deliver to Royal Gold the Somita Assignments. Notwithstanding
anything contained herein to the contrary, in the event that Project Completion
is achieved prior to disbursement of the total amount of the Funding to Somita,
and provided that all conditions precedent to funding of a Tranche have been
satisfied, Somita shall be entitled to request, on or before June 30, 2007,
disbursement of the undisbursed amount of the Funding.

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     Section 2.2 Requests for Tranches. Subject to the conditions set forth in
Article III, Somita may request Tranches to be disbursed in accordance with the
Tranche Funding Schedule. To request the disbursement of a Tranche (other than
the First Tranche), Somita shall deliver to Royal Gold a funding request (a
“Funding Request”) in the form set forth as Exhibit E, together with a Project
Engineer Certificate in the form set forth as Exhibit F and a Certificate from a
Responsible Officer of Somita in the form set forth as Exhibit G. Each Funding
Request must be received by Royal Gold not later than 10:00 a.m., Denver,
Colorado time, at least five (5) Business Days prior to the date on which such
Tranche is requested to be made. Unless Royal Gold shall have notified Somita
within five (5) Business Days after receipt of such Funding Request of a reason
why such funding should not be made (such as failure of a condition precedent),
Royal Gold shall disburse such Tranche to Somita on the requested funding date
by wire transfer to High River’s Toronto bank account, the details of which
shall be provided in the Funding Request. Somita hereby directs Royal Gold to
disburse each Tranche to HRG on behalf of Somita, to be used by Somita as
provided in Section 2.3 below. For greater certainty, in the event that the
Project Engineer has not responded within five (5) Business Days to Somita in
respect of any Project Engineer Certificate submitted to the Project Engineer
for approval as part of the request process set forth herein, the Project
Engineer shall be deemed to have approved the form and content of such Project
Engineer Certificate.
     Section 2.3 Use of Funds. Somita shall use each Tranche only for repayment
of intercompany loans, as contemplated by the Tranche Funding Schedule, and
development and operation of the Project pursuant to the Development Plan.
     Section 2.4 Security. As security for the Funding, Somita shall cause
Shareholder and International to execute and deliver Pledge II to Royal Gold on
the date of disbursement of the Second Tranche. As additional security for the
completion of the Project, Somita shall cause HRG to execute and deliver
Guaranty I and Pledge I on or before the date of disbursement of the Second
Tranche. As security for the First Tranche, Somita caused HRG to execute and
deliver the Initial Guaranty and Initial Pledge to Royal Gold on the Closing
Date.
     Section 2.5 Project Engineer.
     (a) Until the Completion Test shall have been satisfied, Royal Gold, at the
expense of HRG, shall engage Don Beesley as the project engineer (“Project
Engineer”); provided that Royal Gold may engage any other person in replacement
of Don Beesley, at the expense of HRG, with the consent of Somita and HRG, not
to be unreasonably withheld, to act on behalf of Royal Gold as the Project
Engineer.
     (b) Royal Gold shall engage the Project Engineer, to do, without
limitation, the following: (i) review the Development Plan, (ii) review requests
for disbursement of Tranches, (iii) monitor the application of proceeds of the
Funding, (iv) monitor the pace and quality of construction of the Project under
the construction plan, (v) monitor and provide certification that the terms of
the Completion Test have been passed satisfactorily, (vi) conduct a detailed
technical, social and environmental review of the Project and the completeness
and appropriateness of the provisions in all material Project contracts and any
warranty provisions contained therein, (vii) review the updates to the
Development Plan, (viii) certify the

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achievement of items under the Project Milestones Schedule, and (ix) review all
monthly reports produced by Somita and major contractors for the Project.
     (c) Until the Completion Test shall have been satisfied, the Project
Engineer shall conduct site visits in accordance with Section 5.6.
     (d) Royal Gold shall request that the Project Engineer (i) submit all
reports in connection with the Project simultaneously to HRG and Royal Gold for
comment, and (ii) deliver to HRG a copy of all finalized reports as submitted to
Royal Gold.
ARTICLE III
CONDITIONS PRECEDENT AND SUBSEQUENT TO FUNDING
     Section 3.1 Conditions to Disbursement of First Tranche. The agreement of
Royal Gold to disburse the First Tranche, which has been disbursed in accordance
with the Tranche Funding Schedule, was subject to the following conditions
precedent and the conditions precedent set forth in Section 3.3, which were
satisfied or waived in writing by Royal Gold, or made subject to post-closing
covenants:
     (a) Due Diligence. The results of technical, financial and legal due
diligence shall be acceptable to Royal Gold, including:
          (i) a technical review of the Development Plan by the Project
Engineer;
          (ii) Project Engineer confirmation that the Development Plan is
designed to meet all applicable local laws, and is in accordance with acceptable
industry practice including maintaining a minimum of local standards and World
Bank environmental guidelines (applicable under, World Bank and IFC Pollution,
Prevention and Abatement Guidelines and the applicable IFC Safeguard Policies),
and where practicable, the International Cyanide Code and the Equator
Principles;
          (iii) review by or on behalf of Royal Gold of the Financial Model
prior to the Closing Date to the satisfaction of Royal Gold, acting reasonably,
which shall include verification of the following inputs: capital expenditure,
operating costs, working capital and production; and
          (iv) confirmation to the satisfaction of Royal Gold and warranty by
HRG that all necessary authorizations have been obtained for the execution and
performance of this Agreement, the Initial Guaranty and the Initial Pledge,
including, without limitation, all authorizations required by each of Somita’s
and HRG’s organizational documents.
     (b) Required Documents. Royal Gold shall have received the following
documents, duly executed and delivered and in form, substance and date
satisfactory to Royal Gold:
          (i) this Agreement;

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          (ii) the Initial Guaranty (which shall be released and returned to HRG
upon disbursement of the Second Tranche);
          (iii) the Initial Pledge (which shall be released and returned to HRG
upon disbursement of the Second Tranche); and
          (iv) any other documents to be executed to ensure the effectiveness of
(i) – (iii) above.
     (c) Legal Opinions. Royal Gold shall have received the executed legal
opinions of legal counsel to Somita and/or HRG reasonably acceptable to Royal
Gold with respect to matters under the laws of Canada and the Republic of
Burkina Faso.
     (d) Additional Certificates. Royal Gold shall have received an “Omnibus
Certificate” of the Responsible Officers of each of Somita and HRG, which shall
contain the names and signatures of the officers of such entity authorized to
execute Funding Documents and which shall certify to the truth, correctness and
completeness of the following exhibits attached thereto: (i) a copy of
resolutions duly adopted by the members or board of directors of such entity and
in full force and effect at the Closing Date, authorizing the execution of this
Agreement and the other Funding Documents delivered or to be delivered on the
Closing Date in connection herewith and the consummation of the transactions
contemplated herein and therein, and (ii) certified or notarial or otherwise
conformed copies of constituent documents and all amendments thereto, certified
by the appropriate official of such entity’s place of organization.
     (e) Material Adverse Effect. No Material Adverse Effect, nor any event or
circumstance that could have a Material Adverse Effect, shall have occurred with
respect to Somita, HRG, International or Shareholder on or before the Closing
Date.
     Section 3.2 Conditions to Disbursement of Second Tranche. The agreement of
Royal Gold to disburse the Second Tranche shall become effective on the date on
which the following conditions precedent shall have been satisfied (unless
(i) another time period is specified herein, or (ii) such condition precedent
was satisfied on the Closing Date and the continuing satisfaction of such
condition precedent in connection with the disbursement of the Second Tranche is
not required by Royal Gold), or shall have been waived in writing by Royal Gold:
     (a) Due Diligence. The results of technical, financial and legal due
diligence shall be acceptable to Royal Gold, including:
          (i) a technical review of the Development Plan by the Project Engineer
(to the extent of any changes since the Closing Date);
          (ii) Project Engineer confirmation that the Development Plan is
designed to meet all applicable local laws, and is in accordance with acceptable
industry practice including maintaining a minimum of local standards and World
Bank environmental guidelines (applicable under, World Bank and IFC Pollution,
Prevention and Abatement Guidelines and the applicable

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     IFC Safeguard Policies), and where practicable, the International Cyanide
Code and the Equator Principles;
          (iii) evidence that all Tribunal and third party consents, licenses,
approvals and authorizations necessary in connection with the commencement of
construction of the Project are in place, and Somita and, to the best knowledge
of Somita, contractors for the Project are in compliance therewith;
          (iv) review by or on behalf of Royal Gold of the Financial Model prior
to the date of disbursement of the Second Tranche to the satisfaction of Royal
Gold, acting reasonably, which shall include verification of the following
inputs: capital expenditure, operating costs, working capital and production;
          (v) Project Engineer and Royal Gold satisfaction, acting reasonably
and without delay, with the terms and conditions of any proposed construction,
materials supply or services contracts for the Project (but only if available in
form being considered by Somita for execution), including, without limitation,
Royal Gold’s approval of the primary contractor and significant subcontractors
to be retained for Project construction, and inclusion of performance and delay
liquidated damages provisions satisfactory to Royal Gold in such contracts; and
          (vi) confirmation to the satisfaction of Royal Gold and warranty by
HRG that (A) the Taparko Mining Convention is valid and in full force and
effect, as set forth therein, (B) Somita enjoys the benefits of the Taparko
Mining Convention, which HRG holds for the benefit of HRG and Somita, with all
rights thereunder indirectly through HRG as if Somita were a party to such
agreement, and (C) all necessary authorizations have been obtained for the
execution and performance of Pledge II, including, without limitation, all
authorizations required by Somita’s organizational documents and the Taparko
Mining Convention, including, without limitation, Article 8.2 of the Taparko
Mining Convention.
     (b) Required Documents. Royal Gold shall have received the following
documents, duly executed and delivered and in form, substance and date
satisfactory to Royal Gold:
          (i) Guaranty I;
          (ii) Pledge I;
          (iii) Guaranty II;
          (iv) Pledge II;
          (v) the Contribution Agreement;
          (vi) the Somita Assignments;
          (vii) any other documents to be executed to ensure the effectiveness
of (i) — (vi) above;

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          (viii) any document related to Project construction requested by Royal
Gold;
          (ix) all such other agreements, documents or actions which in the
opinion of Royal Gold or legal counsel to Royal Gold in the Republic of Burkina
Faso are necessary or advisable to secure the payment of all amounts due or to
become due hereunder and under the Somita Assignments;
          (x) all other agreements and instruments pursuant to the terms of
which Somita has or could in the future have any obligation or liability,
contingent or actual, to HRG or any Affiliate of HRG (other than agreements or
instruments for compensation of officers of Somita for their services as such at
a rate established on an arm’s length basis); and
          (xi) other construction, supply, lease, management or other relevant
contracts reasonably required as conditions of Funding.
     (c) Legal Opinions. Royal Gold shall have received the executed legal
opinions of legal counsel to Somita and/or HRG reasonably acceptable to Royal
Gold with respect to matters under the laws of Canada, the Republic of Burkina
Faso and the Cayman Islands, in the forms attached hereto as Exhibit H.
     (d) Evidence of Insurance. Royal Gold shall have received certificates or
binders, acceptable to Royal Gold in its reasonable discretion, evidencing that
insurance as required by Section 5.10 is in effect on the date of disbursement
of the Second Tranche.
     (e) Additional Certificates. Royal Gold shall have received an “Omnibus
Certificate” of the Responsible Officers of each of Somita, HRG, International
and Shareholder, which shall contain the names and signatures of the officers of
such entity authorized to execute Funding Documents and which shall certify to
the truth, correctness and completeness of the following exhibits attached
thereto: (i) a copy of resolutions duly adopted by the members or board of
directors of such entity and in full force and effect as of the date of the
disbursement of the Second Tranche, authorizing the execution of the Funding
Documents delivered or to be delivered in connection therewith and the
consummation of the transactions contemplated therein, and (ii) certified or
notarial or otherwise conformed copies of constituent documents and all
amendments thereto, certified by the appropriate official of such entity’s place
of organization.
     (f) Material Adverse Effect. No Material Adverse Effect, nor any event or
circumstance that could have a Material Adverse Effect, shall have occurred with
respect to Somita, HRG, International or Shareholder on or before the date of
disbursement of the Second Tranche.
     (g) Government Approvals. To the extent that Royal Gold shall have
requested the same, and if available, Royal Gold shall have received copies,
certified by a Responsible Officer of Somita as true and complete and in full
force and effect, of any registration, declaration, filing, governmental
consent, license, approval, authorization, or permit required by the Government
or,

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in the opinion of legal counsel to Royal Gold in the Republic of Burkina Faso,
necessary or advisable to implement and complete the Development Plan and
operate the Project.
     (h) Rights in Project Assets and Mining Rights. Royal Gold shall have
received evidence in form and substance satisfactory to it that Somita has good
title to (i) all of the Project Assets and Mining Rights that it owns or
purports to own, free and clear of all liens or claims (other than Permitted
Liens) and (ii) such other surface and other rights as are necessary for access
rights, water rights, plant sites, tailings disposal, waste dumps, ore dumps,
abandoned heaps or ancillary facilities which are required in connection with
the development of the Project substantially in accordance with the Development
Plan. All such Project Assets, Mining Rights and other rights shall be
sufficient in scope and substance for the development of the Project as
contemplated by the Development Plan.
     (i) Development Plan. Royal Gold shall have received and approved all
updates to the Development Plan to the extent such updates were not provided on
the Closing Date.
     (j) Construction Contractor. Royal Gold shall have received evidence of
(i) an executed agreement with Senet with respect to the Project, and
(ii) completion guarantees, bonds and/or cash deposits to be provided by Senet
and major contractors and subcontractors, all of which shall be satisfactory in
form, substance and amount to Royal Gold, and with financial institutions or
other issuers acceptable to Royal Gold.
     Section 3.3 Additional Conditions Precedent. Royal Gold shall have no
obligation to disburse any Tranche (including the First Tranche), unless the
following conditions precedent have been satisfied:
     (a) All representations, warranties and covenants made by any Responsible
Party in this Agreement and any other Funding Document shall be true and
accurate on and as of the date of disbursement of such Tranche as if such
representations, warranties and covenants had been made as of the date of
disbursement of such Tranche, except to the extent that such representation,
warranty or covenant was made as of a specific date or updated, modified or
supplemented as of a subsequent date with the consent of Royal Gold.
     (b) No Default shall exist at the date of disbursement of such Tranche.
     (c) No Material Adverse Effect, nor any event or circumstance that could
have a Material Adverse Effect, shall have occurred.
     (d) The disbursement of such Tranche shall not be prohibited by any Law and
shall not subject Royal Gold to any penalty or other onerous condition under or
pursuant to any such Law.
     (e) A “Compliance Certificate” of a Responsible Officer of Somita, of even
date with each disbursement of a Tranche, in which such officers certify to the
satisfaction of the conditions set out in subsections (a), (b), (c) and (d) of
this Section 3.3.
     (f) All requirements of Somita in Section 2.2 shall have been met.

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     (g) Royal Gold shall have received all documents and instruments that it
has then reasonably requested, in addition to those described in Section 3.1 in
connection with the First Tranche and Section 3.2 in connection with the Second
Tranche (including opinions of legal counsel for the Responsible Parties;
corporate documents and records; documents evidencing governmental
authorizations, consents, approvals, licenses and exemptions; and certificates
of public officials and of officers and representatives of the Responsible
Parties), as to (i) the accuracy and validity of or compliance with all
representations, warranties and covenants made by Responsible Officers in this
Agreement and the other Funding Documents, (ii) the satisfaction of all
conditions contained herein or therein, and (iii) all other matters pertaining
hereto and thereto. All such additional documents and instruments shall be
reasonably satisfactory to Royal Gold in form, substance and date.
For further certainty, disbursements of Tranches after disbursement of the First
Tranche and the Second Tranche shall only be subject to the conditions set forth
in this Section 3.3.
     Section 3.4 Condition to Disbursement of Tranches After March, 2006. Royal
Gold shall have no obligation to disburse any Tranche beyond the March, 2006
Tranche listed in the Tranche Funding Schedule unless and until HRG has
fulfilled all of its obligations under the Contribution Agreement.
     Section 3.5 Condition Subsequent. Somita shall reimburse Royal Gold for all
amounts then funded by Royal Gold under the Funding, together with interest
thereon at the annual rate of LIBOR plus 2.00%, unless, by February 28, 2006, or
such later date up to 30 days set by Royal Gold in its sole discretion, all
conditions precedent to the funding of the Second Tranche shall have been
satisfied. If by such date, all of (i) the conditions precedent to disbursement
of the Second Tranche have not been satisfied, or have not been waived by Royal
Gold, (ii) Somita shall have reimbursed Royal Gold as set forth in this
Section 3.5, (iii) Somita shall have paid all amounts due under Section 8.4(a),
and (iv) no Default shall have occurred and be continuing, this Agreement shall
terminate and shall be of no further force and effect, and neither Party shall
have any further obligation to the other hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
     Somita represents and warrants to Royal Gold, as of the Closing Date and at
all times that this Agreement is in effect, as follows:
     Section 4.1 Organization and Good Standing. Somita is duly organized,
validly existing and in good standing under the Laws of the Republic of Burkina
Faso, having all powers required to carry on its business and enter into and
carry out the transactions contemplated hereby. Somita is duly qualified, in
good standing, and authorized to do business in all other jurisdictions wherein
the character of the properties owned or held by it or the nature of the
business transacted by it makes such qualification necessary, except where the
failure to so qualify could not have a Material Adverse Effect.

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     Section 4.2 Power; Authorization. Somita has the requisite power to own and
operate its properties, to carry on its business and the Project, to obtain
funding and to create and assign royalties, production payments and milling fees
in connection with its rights, properties and assets as and to the extent
contemplated by the Funding Documents and to execute, deliver, and perform this
Agreement and each of the other Funding Documents to which it is or will be a
party. Somita has duly taken all action necessary to authorize the execution and
delivery by it of the Funding Documents to which it is a party and to authorize
the consummation of the transactions contemplated thereby and the performance of
its obligations thereunder.
     Section 4.3 No Conflicts or Consents. The execution and delivery by Somita
of the Funding Documents to which it is a party, the performance of its
obligations under such Funding Documents, and the consummation of the
transactions contemplated by the various Funding Documents, do not and will not
(a) conflict with any provision of (i) any Law, (ii) its organizational
documents, or (iii) any material agreement, judgment, license, order or permit
applicable to or binding upon it or to which its assets are subject, (b) result
in the acceleration of any Indebtedness owed by it, or (c) result in or require
the creation of any Lien upon any assets or properties owned by it except as
expressly contemplated or permitted in the Funding Documents. Except as
expressly contemplated in the Funding Documents, no permit, consent, approval,
authorization or order of, and no notice to or filing with, any Tribunal or
third party is required (x) in connection with the execution, delivery or
performance of any Funding Document, (y) to consummate any transactions
contemplated by the Funding Documents, or (z) for continuous performance of the
Project.
     Section 4.4 Enforceable Obligations. This Agreement is, and the other
Funding Documents when duly executed and delivered will be, legal, valid and
binding obligations of Somita, enforceable in accordance with their terms except
as such enforcement may be limited by bankruptcy, insolvency or similar Laws of
general application relating to the enforcement of creditors’ rights.
     Section 4.5 Other Obligations and Restrictions. Somita (a) does not have
any outstanding Liabilities of any kind (including contingent obligations, tax
assessments, and unusual forward or long-term commitments) which are, in the
aggregate, material to Somita or material with respect to Somita’s financial
condition, and (b) is not subject to or restricted by any franchise, contract,
deed, charter restriction, or other instrument or restriction which could have a
Material Adverse Effect.
     Section 4.6 Financial Condition.
     (a) Somita’s Financial Statements, dated December 31, 2005, which have been
furnished to Royal Gold, are complete and correct and fairly present, in all
material respects, its financial condition and results of its operations for the
period then ended. Somita has no contingent obligation, liability for taxes,
material or long-term commitment, or outstanding Indebtedness of any kind except
as disclosed in such Financial Statements other than liabilities not in excess
of $100,000 in the aggregate outstanding at any one time incurred in ordinary
course of business which would not be required to be disclosed in such Financial
Statements in accordance with Canadian GAAP. Since the date of such Financial
Statements there has been no

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change in Somita’s financial condition or prospects that could have a Material
Adverse Effect, and as of the date of this Agreement Somita has not made any
Distribution.
     (b) Following the execution of the Funding Documents by Somita and the
consummation of the transactions contemplated hereby, (a) Somita will be solvent
(as such term is used in applicable federal and state bankruptcy, liquidation,
receivership, insolvency or similar Laws), (b) the sum of the absolute and
contingent liabilities of Somita, including the Obligations or guarantees
thereof, will not exceed the fair market value of Somita’s assets, and (c) the
capital of Somita will be adequate for the businesses in which Somita is engaged
and intends to be engaged. Somita has not incurred (whether under the Funding
Documents or otherwise), does not intend to incur or believe that it will incur,
debts which will be beyond its ability to pay as such debts mature. Somita, by
executing, delivering or performing its obligations under the Funding Documents
or other documents to which it is a party or by taking any action with respect
thereto, does not intend to hinder, delay or defraud either its present or
future creditors.
     Section 4.7 Capitalization of Somita.
     (a) The authorized capital of Somita consists of 1,000 ordinary shares
having a par value of 10,000 CFA (Central Franc Afrique) per share of which
1,000 shares are issued and outstanding. All such issued and outstanding shares
have been duly authorized and validly issued and are fully paid and
nonassessable. Ninety percent (90%) of the issued and outstanding shares are
owned beneficially and of record by Shareholder, and ten percent (10%) the
issued and outstanding shares are owned beneficially and of record by the
Government. There are no outstanding subscriptions, options, warrants, calls,
agreements, preemptive rights, acquisition rights, redemption rights or any
other rights or claims of any character that restrict the transfer of, require
the issuance of, or otherwise relate to any class of the capital stock of
Somita.
     (b) One hundred percent (100%) of the issued and outstanding shares of
capital stock of Shareholder is owned beneficially and of record by
International, and all such issued and outstanding shares of capital stock have
been duly authorized and validly issued and are fully paid and non-assessable.
There are no outstanding subscriptions, options, warrants, calls, agreements,
preemptive rights, acquisition rights, redemption rights or any other rights or
claims of any character that restrict the transfer of, require the issuance of,
or otherwise relate to any class of the capital stock of Shareholder.
     Section 4.8 Relationship Between Somita and its Parent Companies. Other
than (a) subrogation rights of the HRG arising from Guaranty I and Guaranty II,
(b) arrangements for compensation of officers, employees or directors of Somita
for their services as such at a rate established on an arm’s length basis,
(c) intercompany indebtedness as referred to in the Financial Statements
described in Section 4.6 and (d) fees payable in respect of the Project as per
the Financial Model, Somita has no obligation or liability, contingent or
actual, to HRG or any Affiliate of HRG, and there are no agreements or
arrangements in existence pursuant to the terms of which Somita could in the
future have any obligation or liability, contingent or actual, to HRG or any
Affiliate of HRG.

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     Section 4.9 Full Disclosure. No certificate, written statement or other
written information (taken as a whole), provided by Somita or HRG, delivered
herewith or heretofore by Somita or HRG to Royal Gold in connection with the
negotiation of this Agreement or in connection with any transaction contemplated
hereby, contains any untrue statement of a material fact or omits to state any
material fact known to Somita or HRG necessary to make the statements contained
herein or therein, in light of the circumstances under which they were made and
taken together, not materially misleading as of the date made or deemed made.
All certificates, written statements and other written reports and information
provided by an officer of Somita or HRG after the date hereof by or on behalf of
Somita or HRG to Royal Gold in connection with this Agreement and the other
Funding Documents and the transactions contemplated hereby and thereby (taken as
a whole) will be true, complete and accurate in every material respect in light
of the circumstances in which made, or based on reasonable estimates on the date
as of which such information is stated or certified. There is no fact known to
Somita or HRG that has not been disclosed to Royal Gold in writing which could
have a Material Adverse Effect.
     Section 4.10 Litigation.
     (a) There are no actions, suits or legal, equitable, arbitrative or
administrative proceedings pending, or to the knowledge of Somita threatened,
against Somita or affecting the Properties (including any which challenge or
otherwise pertain to Somita’s ownership of the interests in the Properties)
before any Tribunal.
     (b) There are no outstanding judgments, injunctions, writs, rulings or
orders by any such Tribunal against Somita or affecting any part of the
Properties or any of Somita’s assets or property.
     (c) There is, to the best knowledge of Somita, no remedial work required to
comply with any Law, license or approval.
     Section 4.11 Labor Disputes and Acts of God. Neither the business nor the
properties of Somita has been affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act
of God or of the public enemy or other casualty (whether or not covered by
insurance), which could have a Material Adverse Effect.
     Section 4.12 Subsidiaries. Somita does not presently have any Subsidiaries.
Somita has no equity investments in any other Person.
     Section 4.13 Bank Accounts. Somita has no bank accounts except those listed
on Schedule 4.13 of the Disclosure Schedule and the to-be-established Citibank
NA account in London, England specified in the Conveyance of Production
Payments.
     Section 4.14 Easements, Property Interests, Permits, Utilities, Etc. All
easements, leasehold and other property interests, permits and authorizations
(whether from private third parties or governmental entities) and all utility
and other services, means of transportation, facilities, other materials and
other rights that can reasonably be expected to be necessary for the

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construction, completion and operation of the Project in accordance with
applicable requirements of Law and the Funding Documents (including, without
limitation, gas, electrical, water and sewage services and facilities) have been
procured or are commercially available for the Project, and, to the extent
appropriate, arrangements have been made on commercially reasonable terms for
such easements, interests, services, means of transportation, facilities,
materials and rights. No material licenses, trademarks, patents or other similar
agreements are necessary for the construction, ownership, operation and
maintenance of the Project.
     Section 4.15 Environmental Matters. Somita has duly complied, in all
material respects, with, and its business, operations, assets, equipment,
property, leaseholds, and other facilities are materially in compliance with,
the provisions of all applicable environmental, health and safety laws, codes,
ordinances and directives, and all rules and regulations promulgated thereunder.
Somita (a) has been issued and will maintain all required permits, licenses,
certificates and approvals relating to, and (b) has received no complaint,
order, directive, claim, citation or notice by any governmental authority with
respect to: (i) air emissions, (ii) discharges to surface water or ground water,
(iii) noise emissions, (iv) solid or liquid waste disposal, (v) the use,
generation, storage, transportation or disposal of toxic or hazardous substances
or wastes, or (vi) other environmental, health or safety matters.
     Section 4.16 Project Cost and Project Completion. Somita’s good faith
estimate of the total cost of the Project (including provisions for
contingencies) is $73,047,000 and Somita’s good faith estimate of the date by
which it will achieve Project Completion is September 30, 2007.
     Section 4.17 Projections. The projections of the cash flows of Somita set
forth in the Financial Model, a copy of which has been provided to Royal Gold
before the date hereof, are Somita’s best good faith estimates of the cash flows
of Somita for the period(s) covered therein.
     Section 4.18 Interest in Land. Somita, either directly or indirectly, has
complete rights to use the land necessary for the Project, subject only to
Permitted Liens.
     Section 4.19 Project Documents.
     (a) The Taparko Mining Convention, the Taparko Permit and the Bouroum
Permit are valid and binding obligations of the Government, enforceable in
accordance with their terms. Somita has all rights as a party under each of the
Taparko Permit and the Bouroum Permit, and Somita has all rights in the Taparko
Mining Convention indirectly through HRG as a party as if Somita had been a
signatory to agreement. Neither Somita nor, to the best knowledge of Somita, the
Government is in breach of any provision of the Taparko Mining Convention, the
Taparko Permit or the Bouroum Permit.
     (b) Somita has complied with terms of all mining leases and/or licenses and
all other agreements relating to the Properties, and there is no subsisting
failure to comply with any term or condition thereof, except where failure to
comply could not have a Material Adverse Effect.

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     (c) True, correct and complete copies of all material documents related to
the Project have been provided to Royal Gold.
     Section 4.20 No Sovereign Immunity. Somita is subject to civil and
commercial law with respect to its obligations under this Agreement and each of
the other Funding Documents to which it is a party, that the making and
performance of this Agreement and such other Funding Documents by Somita
pursuant hereto constitute private and commercial acts rather than governmental
or public acts and that neither Somita nor any of its properties or revenues has
any right of immunity from suit, court jurisdiction, attachment prior to
judgment, attachment in aid of execution of a judgment, set-off, execution of a
judgment or from any other legal process with respect to its obligations under
this Agreement and such other Funding Documents. To the extent that Somita may
hereafter be entitled, in any jurisdiction in which judicial proceedings may at
any time be commenced with respect to this Agreement or any other Funding
Document to which it is a party, to claim for itself or its revenues or assets
any such immunity, and to the extent that in any such jurisdiction there may be
attributed to Somita such an immunity (whether or not claimed), Somita hereby
irrevocably agrees not to claim and hereby irrevocably waives such immunity. The
foregoing waiver of immunity shall have effect under the United States Foreign
Sovereign Immunities Act of 1976.
     Section 4.21 Taxes and Reports. All tax returns and reports of Somita
required by law to be filed in the Republic of Burkina Faso, and each
governmental subdivision thereof, have been duly filed for periods ending prior
to the date of this Agreement, and all Taxes, assessments, fees and other
governmental charges due or reasonably anticipated to become due in respect of
Somita, or any assets, income, or franchises of Somita, that if not paid could
have a Material Adverse Effect, have been duly paid or have been adequately
provided for on the books of Somita.
     Section 4.22 Defaults. No Event of Default, and no event or condition that
with the passage of time or the giving of notice, or both, could constitute an
Event of Default, has occurred and is continuing. Neither Somita nor, to the
best knowledge of Somita, any other party is in breach of any provision of any
contract to which Somita is a party, which breach could have a Material Adverse
Effect.
ARTICLE V
AFFIRMATIVE COVENANTS
     To conform with the terms and conditions under which Royal Gold is willing
to continue to provide the Funding to Somita, and to induce Royal Gold to enter
into this Agreement and continue to provide the Funding hereunder, Somita
covenants and agrees as follows:
     Section 5.1 Project Completion. Somita shall construct and implement the
Project promptly, shall apply the proceeds of the Funding exclusively to the
Project and in accordance with the Tranche Funding Schedule, and shall use its
best efforts to cause Project Completion to be achieved on or prior to
September 30, 2007. If Somita becomes unable to achieve the

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completion undertakings set out in the preceding sentence, or becomes unable to
meet its other obligations prior to Project Completion, Somita shall promptly so
notify Royal Gold.
     Section 5.2 Company Operations; Maintenance of Project.
     (a) Somita shall duly and punctually perform its obligations under this
Agreement and each of the other Funding Documents to which it is a party. Somita
shall conduct its operations on the basis of customary commercial practice and
arm’s-length arrangements, with due diligence and efficiency and under the
supervision of qualified and experienced management. Somita shall update the
Financial Model with its updated budget on an annual basis.
     (b) Somita shall maintain, preserve, protect, and keep the Project and all
other material property used or useful in the conduct of its business in good
condition (ordinary wear and tear and obsolescence excepted) in accordance with
prudent industry standards, and in compliance with all applicable Laws, in
conformity with all applicable contracts, servitudes, leases and agreements, and
shall from time to time make all repairs, renewals and replacements needed to
enable the business and operations carried on in connection therewith to be
promptly and advantageously conducted at all times, except where failure to do
so could not have a Material Adverse Effect.
     Section 5.3 Payment and Performance. Somita shall pay all amounts due for
which Somita is obligated under the Funding Documents, in accordance with the
terms thereof, and will observe, perform and comply with every covenant, term
and condition of each Funding Document.
     Section 5.4 Compliance with Agreements and Law. Somita shall perform all
obligations it is required to perform under the terms of the Funding Documents
and each other lease, agreement, contract or other instrument or obligation to
which it is a party or by which it or any of its properties is bound except
where failure to comply could not have a Material Adverse Effect. Somita shall
conduct its business and affairs, including the Project, (a) in compliance with
all Laws applicable thereto except where failure to comply could not have a
Material Adverse Effect; (b) in all material respects in accordance with the
Development Plan; (c) in accordance with acceptable industry practice including
maintaining a minimum of local standards and World Bank environmental guidelines
(applicable under, World Bank and IFC Pollution, Prevention and Abatement
Guidelines and the applicable IFC Safeguard Policies), and where practicable,
the International Cyanide Code and the Equator Principles; and (d) in
compliance, and causing its affiliates, subsidiaries, agents, employees,
subcontractors, directors and officers to be in compliance, with the Corrupt
Practices Laws. Somita shall obtain and cause all licenses and permits necessary
or appropriate for the conduct of its business and the ownership and operation
of its property used and useful in the conduct of its business to be at all
times maintained in good standing and in full force and effect, except where
failure to comply could not have a Material Adverse Effect.
     Section 5.5 Books, Financial Statements and Reports. Somita shall at all
times maintain full and accurate books of account and records. Somita shall
maintain a standard

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system of accounting, will maintain its Fiscal Year, and will furnish the
following statements and reports to Royal Gold at Somita’s expense:
     (a) As soon as available, and in any event within one hundred twenty
(120) days after the end of each Fiscal Year, complete financial statements of
Somita together with all notes thereto, prepared in reasonable detail in
accordance with Canadian GAAP, reviewed using generally accepted standards by an
independent certified public accounting firm selected by Somita and reasonably
acceptable to Royal Gold. These financial statements shall contain a balance
sheet as of the end of such Fiscal Year and statements of earnings, of cash
flows, and of changes in owners’ equity for such Fiscal Year, each setting forth
in comparative form the corresponding figures for the preceding Fiscal Year.
     (b) As soon as available, and in any event within forty-five (45) days
after the end of each of the first three Fiscal Quarters of each Fiscal Year,
Somita’s balance sheet as of the end of such Fiscal Quarter and statements of
Somita’s earnings and cash flows for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter, all in reasonable detail
and prepared in accordance with Canadian GAAP, subject to changes resulting from
normal year-end adjustments and without footnotes. In addition Somita shall,
together with each such set of financial statements and each set of financial
statements furnished under subsection (a) of this section, furnish a certificate
in the form attached hereto as Exhibit I signed by the chief financial officer
of Somita stating that such financial statements are accurate and complete in
all material respects (subject to normal year-end adjustments), stating that he
has reviewed the Funding Documents, and stating that no Default exists at the
end of such Fiscal Quarter or at the time of such certificate or specifying the
nature and period of existence of any such Default.
     (c) Until Somita shall have achieved Project Completion, a report within
20 days after the end of each month certified by a Responsible Officer setting
forth in reasonable detail the progress of the Project, including
(i) expenditures of funds, (ii) estimated future costs, (iii) unexpended funds
available to Somita, (iv) the progress and percentage of completion of the major
phases of Project construction and the total construction work of the Project,
(v) the monthly report(s) provided to Somita by its major contractor(s) on the
Project, and (vi) the acquisition of fixtures and equipment, to be reviewed by
the Project Engineer, in the format attached hereto as Exhibit J;
     (d) Until Somita shall have achieved Project Completion, within 45 days
after the end of each Fiscal Year, a report certified by a Responsible Officer
setting forth in reasonable detail all transactions during such Fiscal Year
between (i) Somita and (ii) HRG or Affiliates of HRG (other than arrangements
for compensation of officers, employees or directors of Somita for their
services as such at a rate established on an arm’s length basis).
     (e) Within 30 days after Somita is required to make any report to the
Government, a copy of each such report.
     (f) Until satisfaction of the PP1 and PP2 Obligations, not later than
30 days prior to the beginning of each Fiscal Year, an annual operating forecast
for Somita, including its

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projected quarterly Financial Statements for such Fiscal Year, together with a
statement of the assumptions on which such forecast is based.
     (g) Within 90 days after the end of each Fiscal Year, an environmental
compliance report summarizing the environmental performance of the Project
during such Fiscal Year and providing sufficient information for Royal Gold to
monitor the performance of the Project with respect to environmental protection,
including, at a minimum, narrative summaries of (i) the results of any
environmental monitoring or sampling activity conducted at the Project,
(ii) accidents at the Project impacting the environment or resulting in the loss
of life, and (iii) environmental deficiencies at the Project identified by the
Republic of Burkina Faso environmental regulatory authorities and any remedial
actions taken or proposed to be taken with respect thereto.
     (h) Within 90 days after the date of effectiveness of any amendment to any
Mining Law, a copy of such amendment together with a statement from Somita’s
legal counsel in the Republic of Burkina Faso describing in reasonable detail
what effect (if any) such amendment will have on Somita and the Project.
     (i) Copies of all other annual or interim audit reports and management
letters submitted to the Company by its independent accountants and such other
information and data with respect to its operations (including without
limitation supporting information as to compliance with this Agreement and the
other Funding Documents) as Royal Gold may reasonably request from time to time.
     (j) After Project Completion, Somita shall also provide monthly operating
reports, to be reviewed by the Project Engineer, in the format attached hereto
as Exhibit K;
     (k) Somita shall provide Royal Gold, quarterly reports on drilling and
exploration results, ore reserve calculations and engineering and economic
studies, to the extent such items are prepared by or on behalf of Somita, within
15 Business Days of Somita’s receipt of same; and
     (l) Somita shall provide Royal Gold with copies of the annual business plan
and budget, operating forecast and mineral reserve and resource report for the
Properties.
     Section 5.6 Access and Inspections. Somita shall permit representatives
appointed by Royal Gold (including independent accountants, auditors, agents,
attorneys, appraisers and any other Persons) to visit and inspect during normal
business hours any of Somita’s property, including its books of account, other
books and records, and any facilities or other business assets, and to make
extra copies therefrom and photocopies and photographs thereof, and to write
down and record any information such representatives obtain, and Somita shall
permit Royal Gold or its representatives to investigate and verify the accuracy
of the information furnished to Royal Gold in connection with the Funding
Documents and to discuss all such matters with its officers and, upon prior
notice to Somita, its employees and representatives (so long as Somita’s
officers and other representatives are entitled to be present), provided that so
long as no Event of Default has occurred that is continuing, Royal Gold shall
provide reasonable advance notice to

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Somita. Royal Gold and such representatives shall maintain the confidentiality
of all such information in accordance with Section 8.6. For greater certainty,
the fees and expenses of all professionals appointed by Royal Gold (except the
Project Engineer) shall be for the account of Royal Gold.
     Section 5.7 Notice of Material Events. Somita will promptly notify Royal
Gold in writing, and in no event later than two (2) Business Days after any
officer of Somita has knowledge thereof, stating that such notice is being given
pursuant to this Agreement, of:
     (a) any matter that could have a Material Adverse Effect;
     (b) the occurrence of any Default,
     (c) any default by Somita under any Funding Document or any indenture,
mortgage, agreement, contract or other instrument to which it is a party or by
which it or any of its properties is bound;
     (d) any force majeure event affecting the Project;
     (e) the filing of any suit or proceeding, or the assertion in writing of a
claim against Somita or with respect to the Project;
     (f) any decision to accelerate, expand or reduce the level of production
beyond the levels outlined in the Development Plan; and
     (g) any proposed material change in mining or processing methods with
respect to the Project.
     Upon the occurrence of any of the foregoing, Somita shall take all
necessary or appropriate steps to remedy promptly any such Material Adverse
Effect, Default, acceleration or default, to protect against any such adverse
claim, to defend any such suit or proceeding, and to resolve all controversies
on account of any of the foregoing.
     Section 5.8 Maintenance of Existence and Qualifications. Each of Somita,
HRG, International and Shareholder shall maintain and preserve its existence and
its rights and franchises in full force and effect and will qualify to do
business in all states or jurisdictions where required by applicable Law, except
where the failure so to qualify could not have a Material Adverse Effect.
     Section 5.9 Payment of Trade Liabilities, Taxes, etc. Somita shall
(a) timely file all required tax returns including any extensions; (b) timely
pay all taxes, assessments, and other governmental charges or levies imposed
upon it or upon its income, profits or property before the same become
delinquent; (c) pay before the same become delinquent all Liabilities owed by it
on ordinary trade terms to vendors, suppliers and other Persons providing goods
and services used by it in the ordinary course of its business; (d) pay and
discharge when due all other Liabilities now or hereafter owed by it; and
(e) maintain appropriate accruals and reserves for all of the foregoing in
accordance with Canadian GAAP. Somita may, however, delay paying or

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discharging any of the foregoing so long as it is in good faith contesting the
validity thereof by appropriate proceedings, if necessary, and has set aside on
its books adequate reserves therefor.
     Section 5.10 Insurance.
     (a) Somita shall, at its expense, obtain, maintain or cause to be
maintained in effect insurance with respect to the Project insuring against
liability for death of, or loss, injury or damage to, the person or property of
others, and with respect to equipment or other assets being acquired for use in
the Project as to which Somita has an insurable interest, against such hazards
(including, without limitation, fire, lightning, collapse, wind and hail,
explosion, smoke, aircraft and vehicles, riot, civil commotion, terrorism,
vandalism, other extended coverage risks, marine cargo losses, flood and
earthquake, environmental impairment liability and environmental remediation,
and any other hazards to the extent that properties of a nature similar to those
included in the Project and in the same or similar localities are usually
insured), in such form (including the form of the loss payable clauses) as is
normally considered to be covered under an “all risks” policy, and with such
insurers as shall be selected by Somita and approved by Royal Gold (such
approval not to be withheld unreasonably), such insurance to be in such amount
as Somita would, in the prudent management of its property, maintain, or would
be maintained by others similarly situated in respect of property similar to the
Project; provided, however, that (i) the amount of such insurance with respect
to the Project shall not at any time be less than the greater of the total cost
of the construction and acquisition of the Project (other than the cost of the
land underlying the Project) or $35,000,000; and (ii) such insurance shall be on
a “no co-insurance/agreed-amount” basis.
     (b) Somita shall carry workers’ compensation insurance, disability benefits
insurance, and such other form of insurance which Somita is required by law to
provide, covering loss resulting from injury, sickness, disability, or death of
the employees of Somita in such amounts as is customary in Burkina Faso in the
gold mining business.
     (c) Somita shall carry business interruption insurance covering risk of
loss as a result of the cessation or material interruption of the business of
Somita which insurance shall be in force once Somita has commenced operations.
     (d) All insurance policies required hereby covering business interruption,
loss or damage to the Project shall name Somita and Royal Gold as additional
insureds as their interests may appear and, prior to achievement of Project
Completion, shall provide that any payment thereunder for any loss or damage
shall be made to Royal Gold and HRG jointly. Such proceeds shall be first used
to pay $35,000,000 as advance payments of amounts payable under the Somita
Assignments, and the remainder to Somita.
     (e) All policies shall (i) be primary and non-contributory over any other
insurance carried by or on behalf of Royal Gold; (ii) insure the interests of
Royal Gold regardless of any breach or violation by Somita of warranties,
declarations or conditions contained in such policies or any action or inaction
of Somita or others; (iii) expressly provide that all provisions thereof, except
the limits of liability (which shall be applicable to all insureds as a group),
shall operate in the same manner as if there were a separate policy covering
each such insured; (iv) waive any

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right of subrogation of the insurers to any rights of Somita or Royal Gold in
respect of any liability of Somita or Royal Gold and any right of the insurers
to any setoff or counterclaim or any other deduction, whether by attachment or
otherwise, in respect of any liability of Somita or Royal Gold; (v) provide
that, if such insurance is canceled, terminated or materially changed for any
reason whatsoever (other than non-payment of premium), the insurers will
promptly notify Somita and Royal Gold in writing and any such cancellation,
termination or change shall not be effective as to Somita or Royal Gold for
30 days after receipt of such notice, and appropriate certification shall be
made to Somita and Royal Gold by each insurer with respect thereto; (vi) carry
appropriate loss payee endorsements acceptable to Royal Gold; and (vii) provide,
or each insurer shall agree with Royal Gold, that the insurer shall give Royal
Gold 35 days’ prior written notice of the expiration of insurance under such
policy in accordance with its terms if Somita has failed by such time to pay any
premium due in respect of the renewal of insurance under such policy.
     (f) Somita shall cause the insurers with whom it maintains such insurance
to agree to advise Somita and Royal Gold in writing promptly of any default in
the payment of any premiums or any other act or omission on the part of Somita
of which they have knowledge and which might invalidate or render unenforceable,
in whole or in part, any such insurance.
     (g) In the event Somita fails to take out or maintain the full insurance
coverage required by this Agreement or fails to keep the Project in good order
and repair and in as reasonably safe condition as its operations permit, Royal
Gold, upon 30 days’ written notice (unless the aforementioned insurance would
lapse within such period in which event notice should be given as soon as
reasonably possible) to Somita of any such failure on its part, may (but shall
not be obligated to) take out the required policies of insurance and pay the
premiums on the same, pay such taxes or other charges or complete the Project or
make such repairs, renewals and replacements as may be necessary to maintain the
Project in good order and repair and in as reasonably safe conditions as
Somita’s operations permit. All amounts so advanced therefor by Royal Gold shall
become additional obligations of Somita to Royal Gold, and Somita will forthwith
pay such amounts to Royal Gold, together with interest thereon at the annual
rate of LIBOR plus 3.00% from the date so advanced.
     Section 5.11 Studies, Protocols and Action Plans. On or before Project
Completion, Somita shall conclude the existing studies, reports, protocols and
action plans, all in form and substance reasonably satisfactory to Royal Gold,
in the following areas:
     (a) Social Action Plan. The Social Action Plan shall (i) address short and
long term plans for meetings, interactions, training, etc. for local and
indigenous people, including (A) meeting plans and logs of minutes of meetings
and (B) indigenous sacred sites – impacts, access enhancement, and preservation;
and (ii) plan to address issues identified to date, or evolving from meetings,
including (A) a plan regarding compensation for relocation or removal of lands
from farming and artisanal mining activities.
     (b) Environmental Action Plan. The Environmental Action Plan shall consist
of (i) hydrologic study, ground water chemical characteristics, local water
supply impacts, including (A) dewatering, which shall include (1) water quality
and (2) disposition (i.e., Where does this

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water go? What is the storage plan? What are the alternatives if water volume is
too great?), and (B) local water supply impacts, which shall include (1) plans
for monitoring and (2) plans for mitigation; (ii) threatened and endangered
species, including (A) a statement of those potentially present, (B) impacts and
(C) an action plan; (iii) chemical inventory action plan, including (A)
transport policy, (B) storage policy and (C) containment facilities, and spill
containment and response plans; (iv) waste rock and tailings characterization
(acid-base accounting and kinetic leach characteristics) and impacts, including
(A) a proactive plan to generate sufficient data (acid-base accounting and
kinetic leach characterization) to address waste rock, tailings and abandoned
pit lake issues; and (v) a concurrent reclamation plan.
     (c) Closure Plan. The Closure Plan shall consist of (i) issue
identification and mitigation plan, including (A) waste rock, tailings, pit lake
and local water supply issues; and (ii) a closure cost estimate.
     Section 5.12 Government Approvals and Notices. Somita shall (i) obtain, and
shall at all times maintain in full force and effect, all material
registrations, declarations, filings, governmental consents, licenses,
approvals, authorizations, and permits necessary for the performance by Somita
of this Agreement and each of the other Funding Documents to which it is or will
be a party, and (ii) undertake reasonable efforts to arrange for Royal Gold to
receive from the Government and any Tribunal copies of all correspondence,
notices, decrees, orders and other writings issued by the Government or any
Tribunal to Somita or HRG regarding the Project or the Properties, but in any
event, Somita shall send copies of such materials to Royal Gold promptly after
receipt thereof.
     Section 5.13 Refining Contracts. Upon Project Completion and during the
entire term of the Somita Assignments, Somita shall maintain in full force and
effect Refining Contracts with smelters and/or refiners reasonably acceptable to
Royal Gold. Somita shall use its best efforts to cause such Refining Contracts
to provide for, where possible, payment by the refiner and/or smelter directly
to Royal Gold of amounts due under PP1, PP2, the Tail Royalty and the Milling
Fee, in cash or, at Royal Gold’s request and where possible, in kind.
     Section 5.14 Evidence of Compliance. Each of Somita and HRG shall furnish
to Royal Gold, at Somita’s expense, all evidence that Royal Gold from time to
time reasonably requests in writing as to the accuracy and validity of or
compliance with all representations, warranties and covenants made by each of
Somita and HRG in the Funding Documents, the satisfaction of all conditions
contained therein, and all other matters pertaining thereto.
     Section 5.15 HRG Fundings.
     (a) Somita hereby agrees and acknowledges that, pursuant to the terms of
the Contribution Agreement, beginning not later than April 1, 2006, HRG shall
make monthly fundings to Somita for each of April, May, June and July of 2006 in
accordance with the timetable set forth in the Contribution Agreement, in a
timely matter and until HRG has met all of its funding obligations under the
Contribution Agreement.

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     (b) Somita hereby irrevocably grants Royal Gold the right to make funding
requests to HRG on behalf of Somita for cost overruns in connection with the
Project in the event (i) Somita is unable to achieve a Project Milestone without
additional funding and (ii) Somita fails to make the related funding request
within a reasonable time, as determined by Royal Gold in its reasonable
discretion.
     Section 5.16 Further Assurances. Somita shall, and shall cause HRG,
International and Shareholder to, promptly cure any defects, errors or omissions
in the execution and delivery of the Funding Documents and, upon notice, take
such other action and immediately execute and deliver to Royal Gold all such
other and further instruments as may be reasonably required or desired by Royal
Gold from time to time in compliance with the covenants and agreements made in
this Agreement and the other Funding Documents.
ARTICLE VI
NEGATIVE COVENANTS
     To conform with the terms and conditions under which Royal Gold is willing
to continue to provide the Funding to Somita, and to induce Royal Gold to enter
into this Agreement and continue to provide the Funding hereunder, Somita
covenants and agrees as follows, unless Royal Gold shall have previously agreed
in writing otherwise:
     Section 6.1 Indebtedness. Until Project Completion, Somita shall not in any
manner owe or be liable for Indebtedness except:
     (a) Indebtedness under the CAT Agreement not to exceed 6,200,000 Euros;
     (b) Additional Indebtedness not to exceed one million dollars ($1,000,000),
which is incurred in the ordinary course of business; and
     (c) Refinancings, renewals or extensions of any of the foregoing without
any increase in the principal amount thereof.
     Section 6.2 Limitation on Liens. Except for Permitted Liens, until
satisfaction of the PP1 and PP2 Obligations, Somita shall not create, assume or
permit to exist any material Lien, encumbrance or unsatisfied judgment upon any
of the properties or assets which it now owns or hereafter acquires.
     Section 6.3 Project Abandonment. Until satisfaction of the PP1 and PP2
Obligations, Somita shall not abandon the Project, which shall include, without
limitation, suspension of construction, operation or maintenance of the Project,
except for cessation of operations under care and maintenance.
     Section 6.4 Limitation on Mergers, Issuances of Securities. Until
satisfaction of the PP1 and PP2 Obligations, Somita shall not (a) enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution); or (b) acquire any
business or property from, or capital stock of, or be a party to

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any acquisition of, any Person except for purchases of property to be sold or
used in the ordinary course of business and Investments permitted under
Section 6.7 hereof; or (c) issue any additional shares of its capital stock,
membership or partnership interests or other securities or any options, warrants
or other rights to acquire such additional shares, interests or other
securities; provided, however, that with respect to clause (c), Somita may make
such issuances after Project Completion so long as the same could not result in
a Change of Control.
     Section 6.5 Limitation on Asset Disposition. Until satisfaction of the PP1
and PP2 Obligations, Somita shall not sell, transfer, lease, exchange, alienate
or dispose of any of its material assets or properties or any material interest
therein, including any sale or other transfer or issuance of any equity
interests of Somita (except as permitted pursuant to Section 6.4 above), or
discount, sell, pledge or assign any notes payable to it, accounts receivable or
future income, except:
     (a) material assets or properties not to exceed five hundred thousand
dollars ($500,000) in the aggregate in any year, or a greater amount if the
Project Engineer has agreed with Somita, acting reasonably, that such material
assets above such $500,000 aggregate are not necessary for the Project;
     (b) equipment which is worthless or obsolete or no longer necessary or
useful to the proper conduct of its business or which is replaced by equipment
of equal suitability and value; and
     (c) assets, lands and permits that are unrelated to the Lands or the
Project, in the ordinary course of business.
     Section 6.6 Limitation on Dividends and Redemptions. Except as expressly
provided in this Section 6.6, Somita will not declare, pay or make, whether in
cash or other property, any Distribution on, or purchase, redeem or otherwise
acquire for value, any of its capital stock. Notwithstanding the foregoing,
Somita shall be entitled to make Distributions provided that at the time of
making any such Distribution (i) it is current with respect its obligations
under the PP1 and PP2 Obligations and the Conveyance of Tail Royalty and Grant
of Milling Fee, (ii) there is no Default or Event of Default hereunder and
(iii) the making of such Distribution will not cause a Default or Event of
Default hereunder.
     Section 6.7 Limitation on Investments and New Businesses. Until Project
Completion, Somita shall not (a) make any expenditure or commitment or incur any
obligation or enter into or engage in any transaction except in the ordinary
course of business, (b) engage directly or indirectly in any business or conduct
any operations except in connection with or incidental to the Project or other
business of Somita as of the Closing Date, or (c) make any acquisitions of or
capital contributions to or other Investments in any Person.
     Section 6.8 Transactions with Affiliates. Somita will not engage in any
material transaction with any of its Affiliates on terms which are less
favorable to it than those which would have been obtainable at the time in
arm’s-length dealing with Persons other than such Affiliates.

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     Section 6.9 Contracts. Until satisfaction of the PP1 and PP2 Obligations,
Somita shall not amend or permit any amendment to, or waiver or termination of,
any material contract, agreement, permit or lease without the prior written
consent of Royal Gold, which consent shall not be unreasonably withheld.
     Section 6.10 No Subsidiaries. Until Project Completion, Somita shall
neither form nor own any Subsidiaries.
     Section 6.11 Satisfaction of Conditions Precedent. Somita shall use
commercially reasonable best efforts to cause all of the conditions precedent
set forth in Article III to be satisfied.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
     Section 7.1 Events of Default. Each of the following events constitutes an
Event of Default under this Agreement:
     (a) Somita fails to pay any amounts earned under PP1 or PP2 or any other
amount to be paid to Royal Gold when due and payable;
     (b) The Project is abandoned prior to satisfaction of the Completion Test,
the Completion Date has not occurred by December 31, 2007, or a Material Adverse
Effect occurs;
     (c) Any “default” or “event of default” occurs under any Funding Document
which defines either such term, and the same is not remedied within the
applicable period of grace (if any) provided in such Funding Document;
     (d) Somita fails to duly observe, perform or comply with any covenant,
agreement or provision of Article V or Article VI;
     (e) Any of Somita, HRG, International or Shareholder fails (other than as
referred to in subsections (a), (b), (c) or (d) above) to duly observe, perform
or comply with any covenant, agreement, condition or provision of any Funding
Document, and such failure remains unremedied for a period of fifteen (15) days
after notice of such failure is given by Royal Gold to Somita;
     (f) Any representation or warranty previously, presently or hereafter made
in writing by any of Somita, HRG, International or Shareholder in connection
with any Funding Document shall prove to have been false or incorrect in any
material respect on any date on or as of which made, or any Funding Document or
any material obligation thereunder at any time ceases to be valid, legal,
binding and enforceable for any reason other than its release by Royal Gold, or
any material agreement, concession, mining lease, approval or license relating
to the Project is terminated, expropriated, suspended, revoked or varied;

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     (g) Somita shall default in the payment when due of any principal of or
interest on any of its Indebtedness in excess of $100,000 in the aggregate
(other than Indebtedness the validity of which is being contested in good faith
by appropriate proceedings and for which adequate reserves with respect thereto
are maintained on the books of Somita in accordance with Canadian GAAP), or any
event specified in any note, agreement, indenture or other document evidencing
or relating to any such Indebtedness shall occur if the effect of such event is
to cause, or (with the giving of any notice or the lapse of time or both) to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, such Indebtedness to become due, or
to be prepaid in full (whether by redemption, purchase, offer to purchase or
otherwise), prior to its stated maturity;
     (h) Until satisfaction of the obligations of Somita with respect to
payments under PP1 and PP2, (i) any Change of Control occurs, or (ii) any
successor to Somita or HRG fails to assume all obligations and liabilities of
Somita or HRG, as applicable;
     (i) Until Project Completion, HRG or Somita fails to continue to employ
Daniel Vanin in his current or similar position, provided HRG or Somita does not
employ an individual to replace Daniel Vanin who is consented to by Royal Gold,
acting reasonably;
     (j) Either Somita or HRG, and, until Project Completion, either
International or Shareholder:
          (i) suffers the entry against it of a judgment, decree or order for
relief by a Tribunal of competent jurisdiction in an involuntary proceeding
commenced under any applicable bankruptcy, insolvency or other similar Law of
any jurisdiction now or hereafter in effect, including the Bankruptcy Code of
any country, as from time to time amended, or has any such proceeding commenced
against it which remains undismissed for a period of sixty days; or
          (ii) commences a voluntary case under any applicable bankruptcy,
insolvency or similar Law now or hereafter in effect, including the Bankruptcy
Code of any country, as from time to time amended; or applies for or consents to
the entry of an order for relief in an involuntary case under any such Law; or
makes a general assignment for the benefit of creditors; or is generally unable
to pay (or admits in writing its inability to pay) its debts as such debts
become due; or takes corporate or other action to authorize any of the
foregoing; or
          (iii) suffers the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
all or a substantial part of its assets or the Shares in a proceeding brought
against or initiated by it, and such appointment or taking possession is neither
made ineffective nor discharged within sixty days after the making thereof, or
such appointment or taking possession is at any time consented to, requested by,
or acquiesced to by it; or
          (iv) suffers the entry against it of a final judgment for the payment
of money in excess of $100,000, unless the same is discharged within thirty days
after the date of entry thereof or an appeal or appropriate proceeding for
review thereof is taken within such period and a stay of execution pending such
appeal is obtained; provided, however, that any such judgment

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or order shall not be an Event of Default under this Section 7.1(j)(iv) if and
for so long as the amount of such judgment or order is covered by a valid and
binding policy of insurance between the defendant and the insurer covering
payment of such amount (less any portion of any deductible payable in respect of
such judgment or order under such policy), as confirmed by Royal Gold; or
          (v) suffers a writ or warrant of attachment or any similar process to
be issued by any Tribunal against all or any substantial part of its assets or
any part of the Project, and such writ or warrant of attachment or any similar
process is not stayed or released within thirty days after the entry or levy
thereof or after any stay is vacated or set aside;
     (k) One of the following events shall occur with respect to, or in
connection with, the Project: (i) confiscation, expropriation, nationalization,
(ii) cancellation of concession, (iii) selective discrimination, (iv) forced
divestiture, (v) forced abandonment, (vi) export embargo, (vii) import embargo,
(viii) contingent currency inconvertibility and exchange transfer, and (ix)
political violence including war on land;
     (l) The security interest created granted under the Initial Pledge, Pledge
I or Pledge II shall become invalid in any material respect or any obligation of
Somita under any Funding Document shall become invalid in any material respect
and, with respect to both of the foregoing, the same remains unremedied for
30 days after an executive officer of Somita has knowledge thereof, or the
validity of such security interest or obligation shall be challenged by Somita
in writing;
     (m) The Taparko Mining Convention, the Bouroum Mining Convention, the
Taparko Permit or the Bouroum Permit shall be amended or terminated without
Royal Gold consent, or Somita shall violate any term of the Taparko Mining
Convention, the Bouroum Mining Convention, the Taparko Permit or the Bouroum
Permit that would result in the termination thereof or give the Government the
right to terminate any thereof; or
     (n) Any governmental authority condemns, nationalizes, seizes or otherwise
expropriates any substantial portion of the assets or the capital stock of
Somita or takes any other action that would prevent Somita from carrying on any
material part of its business or operations.
     Section 7.2 Remedies. If any Default shall occur and be continuing, Royal
Gold may protect and enforce its rights under the Funding Documents by any
appropriate proceedings, including proceedings for specific performance of any
covenant or agreement contained in any Funding Document, and Royal Gold may
enforce the payment of any amounts due it or enforce any other legal or
equitable right which it may have, including, without limitation, if Project
Completion is not achieved by December 31, 2007, Royal Gold may elect in its
sole and absolute discretion (a) to foreclose on the Shareholder’s shares of
Somita, or (b) require Somita to reimburse any and all of the Funding made by
Royal Gold prior to such date. All rights, remedies and powers conferred upon
Royal Gold under the Funding Documents shall be deemed cumulative and not
exclusive of any other rights, remedies or powers available under the Funding
Documents or at Law or in equity.

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ARTICLE VIII
MISCELLANEOUS
Section 8.1 Waivers and Amendments; Acknowledgments.
     (a) Waivers and Amendments. No failure or delay (whether by course of
conduct or otherwise) by Royal Gold in exercising any right, power or remedy
which Royal Gold may have under any of the Funding Documents shall operate as a
waiver thereof or of any other right, power or remedy, nor shall any single or
partial exercise by Royal Gold of any such right, power or remedy preclude any
other or further exercise thereof or of any other right, power or remedy. No
waiver of any provision of any Funding Document and no consent to any departure
therefrom shall ever be effective unless it is in writing and signed as provided
below in this section, and then such waiver or consent shall be effective only
in the specific instances and for the purposes for which given and to the extent
specified in such writing. No notice to or demand on Somita, HRG, International
or Shareholder shall in any case of itself entitle such party to any other or
further notice or demand in similar or other circumstances. This Agreement and
the other Funding Documents set forth the entire understanding between the
parties hereto with respect to the transactions contemplated herein and therein
and supersede all prior discussions and understandings with respect to the
subject matter hereof and thereof, and no waiver, consent, release, modification
or amendment of or supplement to this Agreement or the other Funding Documents
shall be valid or effective against any party hereto unless the same is in
writing and signed by (i) if such party is Somita, HRG, International or
Shareholder, by such party and (ii) if such party is Royal Gold, by Royal Gold.
     (b) Acknowledgments and Admissions. Somita hereby represents, warrants,
acknowledges and admits that (i) it has been advised by counsel in the
negotiation, execution and delivery of the Funding Documents, (ii) it has made
an independent decision to enter into this Agreement and the other Funding
Documents, without reliance on any representation, warranty, covenant or
undertaking by Royal Gold, whether written, oral or implicit, other than as
expressly set out in this Agreement or in another Funding Document delivered on
or after the date hereof, (iii) there are no representations, warranties,
covenants, undertakings or agreements by Royal Gold as to the Funding Documents
except as expressly set out in this Agreement or in another Funding Document
delivered on or after the date hereof, (iv) Royal Gold has no fiduciary
obligation toward any of Somita, HRG, International or Shareholder with respect
to any Funding Document or the transactions contemplated thereby, (v) no
partnership or joint venture exists with respect to the Funding Documents
between Somita and Royal Gold, (vi) should an Event of Default or Default occur
or exist, Royal Gold will determine in its sole discretion and for its own
reasons what remedies and actions it will or will not exercise or take at that
time, (vii) without limiting any of the foregoing, Somita is not relying upon
any representation or covenant by Royal Gold, or any representative thereof, and
no such representation or covenant has been made, that Royal Gold will, at the
time of an Event of Default or Default, or at any other time, waive, negotiate,
discuss, or take or refrain from taking any action permitted under the Funding
Documents with respect to any such Event of Default or Default or any other
provision of the Funding Documents, and (viii) Royal Gold has relied upon the
truthfulness of the

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acknowledgments in this section in deciding to execute and deliver this
Agreement and to become obligated hereunder.
     (c) Joint Acknowledgment. This Agreement and the other Funding Documents
represent the final agreement between the parties and may not be contradicted by
evidence of prior, contemporaneous, or subsequent oral agreements of the
parties. There are no unwritten oral agreements between the parties.
     Section 8.2 Survival of Agreements; Cumulative Nature. All of the various
representations, warranties, covenants and agreements of each of Somita, HRG,
International and Shareholder in the Funding Documents shall survive the
execution and delivery of this Agreement and the other Funding Documents and the
performance hereof and thereof. All statements and agreements contained in any
certificate or other instrument delivered by an officer of any of Somita, HRG,
International or Shareholder to Royal Gold under any Funding Document shall be
deemed representations and warranties by such party or agreements and covenants
of such party under this Agreement. The representations, warranties,
indemnities, and covenants made by any of Somita, HRG, International or
Shareholder in the Funding Documents, and the rights, powers, and privileges
granted to Royal Gold in the Funding Documents, are cumulative, and, except for
expressly specified waivers and consents, no Funding Document shall be construed
in the context of another to diminish, nullify, or otherwise reduce the benefit
to Royal Gold of any such representation, warranty, indemnity, covenant, right,
power or privilege. In particular and without limitation, no exception set out
in this Agreement to any representation, warranty, indemnity, or covenant herein
contained shall apply to any similar representation, warranty, indemnity, or
covenant contained in any other Funding Document, and each such similar
representation, warranty, indemnity, or covenant shall be subject only to those
exceptions which are expressly made applicable to it by the terms of the various
Funding Documents.
     Section 8.3 Notices. All notices, requests, consents, demands and other
communications required or permitted under any Funding Document shall be in
writing, unless otherwise specifically provided in such Funding Document, and
shall be deemed sufficiently given or furnished if delivered by personal
delivery, by facsimile or other electronic transmission, or by delivery service
with proof of delivery, to any of the Parties at the address below (unless
changed by similar notice in writing given by the particular Person whose
address is to be changed):
     To Royal Gold:
Royal Gold, Inc.
1660 Wynkoop Street, Suite 1000
Denver, CO 80202
Attention: President
Facsimile: 303-595-9385

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     To Somita:
Somita SA
01 B.P. 2509 OUAGADOUGOU 01
1648 Boulevard Tansoba TAB-KOM,
Secteur 25
Burkina Faso
Attention: Directeur Generale
Facsimile: 226-50-358187
     with a copy to HRG:
High River Gold Mines Ltd.
155 University Avenue
Suite 1700
Toronto, Ontario M5H 3B7
Attention: President
Facsimile: (416) 360-0010
     with a copy to Cassels Brock & Blackwell LLP:
Cassels Brock & Blackwell LLP
2100 Scotia Plaza, 40 King Street W.
Toronto, Ontario M5H 3C2
Attention: David Poynton
Facsimile: (416) 644-9348
Any such notice or communication shall be deemed to have been given (a) in the
case of personal delivery or delivery service, as of the date of first attempted
delivery during normal business hours at the address provided herein, (b) in the
case of facsimile, upon receipt, or (c) in the case of other electronic
transmission, upon acknowledgment of receipt by the recipient within twenty-four
(24) hours of first attempted delivery; provided, however, that no Funding
Request shall become effective until actually received by Royal Gold.
     Section 8.4 Payment of Expenses; Indemnity.
     (a) Payment of Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, Somita will promptly (and in any event, within
thirty (30) days after any invoice or other statement or notice) pay: (i) all
transfer, stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of this Agreement or
any of the other Funding Documents or any other document or transaction referred
to herein or therein, (ii) all reasonable costs and expenses incurred by or on
behalf of Royal Gold (including reasonable attorneys’ fees, consultants’ fees
and engineering fees, travel costs, other costs related to its due diligence
process and miscellaneous expenses) in connection with (A) the negotiation,
preparation, execution and delivery of the Funding Documents, and any and all
consents, waivers or other documents or instruments relating thereto, (B) the
filing,

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recording, refiling and re-recording of any Funding Documents and any other
documents or instruments or further assurances required to be filed or recorded
or refiled or re-recorded by the terms of any Funding Document, (C) the due
diligence with respect to the Project, (D) monitoring or confirming (or
preparation or negotiation of any document related to) the compliance of any of
Somita, HRG, International or Shareholder with any covenants or conditions
contained in this Agreement or in any Funding Document, and (E) all reasonable
costs and expenses incurred by or on behalf of Royal Gold (including without
limitation attorneys’ fees, consultants’ fees and accounting fees) in connection
with the preservation of any rights under the Funding Documents or the defense
or enforcement of any of the Funding Documents (including this section), any
attempt to cure any breach thereunder by Somita, or the defense of Royal Gold’s
exercise of its rights thereunder.
     (b) Indemnity. Somita agrees to indemnify Royal Gold, upon demand, from and
against any and all liabilities, obligations, broker’s fees, claims, losses,
damages, penalties, fines, actions, judgments, suits, settlements, costs,
expenses or disbursements (including reasonable fees of attorneys, accountants,
experts and advisors) of any kind or nature whatsoever (in this section
collectively called “liabilities and costs”) which to any extent (in whole or in
part) may be imposed on, incurred by, or asserted against such party arising or
resulting from or in any other way associated with the Project, the Funding
Documents and the transactions and events (including the enforcement or defense
thereof) at any time associated therewith or contemplated therein (whether
arising in contract or in tort or otherwise). Among other things, the foregoing
indemnification covers all liabilities and costs incurred by Royal Gold related
to any breach of a Funding Document by any of Somita, HRG, International or
Shareholder, any bodily injury to any Person or damage to any Person’s property.
The foregoing indemnification shall apply whether or not such liabilities and
costs are in any way or to any extent owed, in whole or in part, under any claim
or theory of strict liability or caused, in whole or in part by any negligent
act or omission of any kind by Royal Gold,
provided only that Royal Gold shall not be entitled under this section to
receive indemnification for that portion, if any, of any liabilities and costs
which is proximately caused by its own individual gross negligence or willful
misconduct, as determined in a final judgment. If any Person (including any
Somita or any Affiliate of Somita) ever alleges such gross negligence or willful
misconduct by Royal Gold, the indemnification provided for in this section shall
nonetheless be paid upon demand, subject to later adjustment or reimbursement,
until such time as a court of competent jurisdiction enters a final judgment as
to the extent and effect of the alleged gross negligence or willful misconduct.
As used in this section the term “Royal Gold” shall refer not only to each
Person designated as such in Section 1.1 but also to each director, officer,
agent, trustee, attorney, employee, representative and Affiliate of or for such
Person.
     Section 8.5 Parties in Interest; Assignments.

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     (a) All grants, covenants and agreements contained in the Funding Documents
shall bind and inure to the benefit of the parties thereto and their respective
successors and assigns; provided, however, that, prior to Project Completion,
neither Somita nor HRG shall assign or transfer any of its rights or delegate
any of its duties or obligations under any Funding Document without the prior
written consent of Royal Gold.
     (b) Until the Maximum Amount under the Funding has been funded, but in no
event later than April 30, 2007, Royal Gold shall not assign or transfer any of
its rights or delegate any of its duties or obligations under any Funding
Document without the prior written consent of Somita; provided, however, that,
upon the occurrence of an Event of Default by Somita or High River under any
Funding Document, Royal Gold shall have no restrictions on its assignment or
transfer of the Funding Documents. In addition, Royal Gold agrees to notify
Somita in the event Royal Gold decides to solicit third parties for the purpose
of assigning or transferring any of its rights or delegating any of its duties
or obligations under any Funding Document.
     Section 8.6 Confidentiality. Each of the Parties agrees to keep
confidential any information furnished or made available to it by the other
Party pursuant to this Agreement; provided that nothing herein shall prevent a
Party from disclosing such information (a) to an Affiliate, or any officer,
director, employee, agent, or advisor of an Affiliate, (b) to any other Person
if reasonably incidental to the administration of the funding provided herein,
(c) as required by any Law, (d) upon the order of any court or administrative
agency, (e) upon the request or demand of any Tribunal, (f) that is or becomes
available to the public or that is or becomes available to such Party other than
as a result of a disclosure by such Party prohibited by this Agreement, (g) in
connection with any litigation to which such Party or any of its Affiliates may
be a party, (h) to the extent necessary in connection with the exercise of any
right or remedy under this Agreement or any other Funding Document, and
(i) subject to provisions substantially similar to those contained in this
section, to any actual or proposed participant or assignee or any actual or
proposed contractual counterparty (or its advisors) to any securitization,
hedge, or other derivative transaction relating to the parties’ obligations
hereunder. Any Person required to maintain the confidentiality of information
described in this section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such information as such Person would accord to
its own confidential information.
     Section 8.7 Governing Law. Except with respect to any security or title
matters, which shall be governed by the appropriate law and jurisdiction, the
Funding Documents shall be deemed contracts and instruments made under the laws
of the State of Colorado and shall be construed and enforced in accordance with
and governed by the laws of the State of Colorado and the laws of the United
States of America, without regard to principles of conflicts of law.
     Section 8.8 Limitation on Interest. Royal Gold and Somita intend to
contract in strict compliance with applicable usury Law from time to time in
effect. In furtherance thereof such persons stipulate and agree that none of the
terms and provisions contained in the Funding Documents shall ever be construed
to provide for interest in excess of the maximum amount of interest permitted to
be contracted for, charged, or received by applicable Law from time to time in
effect. Neither Somita nor any present or future guarantors, endorsers, or other
Persons

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hereafter becoming liable for payment of any Obligation shall ever be liable for
unearned interest thereon or shall ever be required to pay interest thereon in
excess of the maximum amount that may be lawfully contracted for, charged, or
received under applicable Law from time to time in effect, and the provisions of
this section shall control over all other provisions of the Funding Documents
which may be in conflict or apparent conflict herewith.
     Section 8.9 Termination; Limited Survival. Notwithstanding the foregoing or
anything herein to the contrary, any waivers or admissions made by Somita or HRG
in any Funding Document, and any obligations which any Person may have to
indemnify or compensate Royal Gold shall survive any termination of this
Agreement or any other Funding Document. At the request and expense of Somita,
Royal Gold shall prepare and execute all necessary instruments to reflect and
effect such termination of the Funding Documents.
     Section 8.10 Severability. If any term or provision of any Funding Document
shall be determined to be illegal or unenforceable all other terms and
provisions of the Funding Documents shall nevertheless remain effective and
shall be enforced to the fullest extent permitted by applicable Law.
     Section 8.11 Counterparts; Facsimile Execution. This Agreement may be
separately executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to constitute one and the same Agreement. This Agreement and the Funding
Documents may be validly executed and delivered by facsimile or other electronic
transmission.
     Section 8.12 Dispute Resolution.
     (a) Arbitration Conducted by International Chamber of Commerce. All
disputes between the Parties (which for purposes of this Section 8.12 includes
the Parties and their respective parents, affiliates and subsidiaries) that
arise out of, relate to or are in connection with this Agreement or any related
agreement, will be exclusively, finally and conclusively settled by binding
international arbitration under the Rules of Arbitration of the International
Chamber of Commerce (the “ICC”) then in effect (the “Rules”), except as
specifically modified by this Agreement. The Parties shall continue to perform
their respective obligations under this Agreement pending conclusion of any such
arbitration.
     (b) Initiation of Arbitration.
          (i) Prior to initiating an arbitration proceeding with the ICC, the
Parties shall negotiate in good faith to resolve the dispute. To that end, the
Party wishing to initiate negotiations shall notify the other Party in writing
about its intention to do so, including a brief summary of the disputed issue,
its estimate of the amount in controversy, and suggesting a date and venue for a
first meeting, at which the Parties shall be represented by officers duly
empowered to resolve the dispute. In the event that the Parties are unable to
resolve the dispute within a period of 15 days after commencement of such good
faith negotiations, or upon agreement by the Parties to submit the dispute to
arbitration, either Party may commence an arbitration proceeding by delivering a
Request for Arbitration (the “Request for Arbitration”) to

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the Secretariat of the ICC (the “Secretariat”) in accordance with the terms of
this Section 8.12 and the Rules.
          (ii) For all disputes, the arbitration hereunder shall be by three
independent and impartial arbitrators. Royal Gold and Somita shall each appoint
one arbitrator within 30 days after the Request for Arbitration has been
delivered to the Secretariat and the two arbitrators so appointed shall select a
third arbitrator within 60 days after the Request for Arbitration has been
delivered to the Secretariat. In the event that the Parties or the arbitrators
fail to select arbitrators as required above, the ICC shall select such
arbitrators in accordance with the terms of this Section 8.12.
          (iii) Each of the Parties acknowledges and agrees that the other Party
would be damaged irreparably in the event any of the provisions of this
Agreement are not performed in accordance with their specific terms.
Accordingly, notwithstanding the provisions of Section 8.12(b)(i), pending
completion of arbitration pursuant to this Section 8.12, either Royal Gold or
Somita shall have the right to seek a temporary restraining order, injunctive
relief or other interim or provisional relief on the ground that such relief
would otherwise be available at law or in equity. If any such relief is
obtained, the arbitration panel will address the continuance, modification or
termination of such relief and their order and any such decision regarding
relief shall be binding on the Parties
     (c) Arbitration Procedures.
          (i) The arbitration shall be conducted in the English language in
London, England or at such other location as the Parties may agree.
          (ii) All disputes arising out of or in connection with this Agreement
and relating to the Parties’ rights and obligations in connection with this
Agreement (including without limitation the validity of the agreement of the
Parties to arbitrate, the arbitrability of the issues submitted to arbitration
hereunder, the existence and validity of the Agreement, and any conflict of laws
issues arising in connection with the Agreement or this agreement to arbitrate)
shall be finally settled in accordance with the Rules. In addition, where the
Rules are silent, the proceedings before the “Arbitral Tribunal” (as defined in
the Rules) shall be governed by the procedural rules established by the Arbitral
Tribunal.
          (iii) The arbitration panel shall conduct a hearing no later than
90 days after delivery of the Request for Arbitration, and a decision shall be
rendered by the arbitration panel within 30 days after the final hearing.
          (iv) At the hearing, the Parties shall present such evidence and
witnesses as they may choose, with or without counsel. Adherence to formal rules
of evidence shall not be required but the Arbitral Tribunal shall consider any
evidence and testimony that it determines to be relevant, in accordance with
procedures that it determines to be appropriate.

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     (d) Arbitral Awards.
          (i) The arbitration award shall be in writing and shall specify the
factual and legal bases for the award.
          (ii) Neither Royal Gold nor Somita shall be entitled to, and no award
shall include any amount for, lost profits or revenues, lost business
opportunities, business interruption, or punitive or exemplary damages for any
claim arbitrated pursuant to this Section 8.12.
          (iii) The arbitrators shall be entitled to a fee commensurate with
their fees for professional services requiring similar time and effort. The fees
of the arbitrators and other costs of the arbitration shall be borne equally by
the Parties, except when the arbitrators decide to impose the total cost on the
defeated Party.
     (e) Enforcement. All decisions of the Arbitral Tribunal shall be final and
binding on the Parties and may be entered against them in any court of competent
jurisdiction. Any judgment rendered by the Arbitral Tribunal against a Party may
be executed against such Party’s assets in any jurisdiction where the Party has
assets. Each of the Parties irrevocably submits to the non-exclusive
jurisdiction of the appropriate courts in the State of Colorado in any legal
action or proceeding relating to such execution of judgment.
     (f) Limitations.
          (i) Any dispute brought pursuant to the terms of this Section 8.12
must be brought within two years of the date that the Party aggrieved by the
event or condition, or notice of such event or condition giving rise to the
dispute becomes aware of the same.
          (ii) This agreement to arbitrate shall survive the rescission or
termination of this Agreement.
     Section 8.13 Service of Process. Service of process in any matter shall be
made to Somita at the following address:
Somita SA
01 B.P. 2509 OUAGADOUGOU 01
1648 Boulevard Tansoba TAB-KOM,
Secteur 25
Burkina Faso
Attention: Directeur Generale
Facsimile: 226-50-358187
     with a copy to Cassels Brock & Blackwell LLP:
Cassels Brock & Blackwell LLP
2100 Scotia Plaza, 40 King Street W.
Toronto, Ontario M5H 3C2
Attention: David Poynton

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Facsimile: (416) 644-9348
Somita agrees that service of process, writ, judgment, or other notice of legal
process at the address above shall be (i) deemed and held in every respect to be
effective personal service upon it, and (ii) deemed sufficiently given or
furnished if delivered by personal delivery, by facsimile or other electronic
transmission, or by delivery service with proof of delivery. Somita shall
maintain a presence at the address above (unless changed by similar notice in
writing given by Somita) continuously at all times while Somita is obligated
under this Agreement or any of the other Funding Documents. Nothing herein shall
affect Royal Gold’s right to serve process in any other manner permitted by
applicable law.
     Section 8.14 English Language. All documents to be furnished or
communications to be given or made under this Agreement and each of the other
Funding Documents to which Somita is a party shall be in the English language
or, if in another language, shall be accompanied by a translation into English
certified by a Responsible Officer of Somita, which translation shall be the
governing version between Royal Gold and Somita; provided, however, that the
foregoing shall not apply to (a) documents with or communications to or from the
Government of Burkina Faso or (b) documents or communications to or with third
parties in the ordinary course of Somita’s business.
     Section 8.15 Termination of Agreement. This Agreement shall terminate and
be of no further force and effect upon satisfaction of the PP1 and PP2
Obligations, provided that no Default shall then be continuing.
     Section 8.16 Good Faith and Fair Dealing. The Parties shall conduct their
activities hereunder with respect to each other in accordance with principles of
good faith and fair dealing.
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     This Agreement is executed as of the date first written above.

                  SOCIÉTÉ DES MINES DE TAPARKO    
 
           
 
  By:   /s/ David Mosher    
 
           
 
      David Mosher    
 
      Director    
 
           
 
  By:   /s/ Daniel Vanin    
 
           
 
      Daniel Vanin
Director    
 
                ROYAL GOLD, INC.    
 
           
 
  By:   /s/ Donald Baker    
 
           
 
           
 
  Name:   Donald Baker    
 
           
 
           
 
  Title:   V.P. Corporate Development    
 
           

[EXECUTION PAGE TO AMENDED AND RESTATED FUNDING AGREEMENT]