exh4-167.htm


    EXHIBIT 4.167

      


       

      SEWELL EAST
PROPERTY

       

       

      This
Agreement is dated for reference the 5th day
of August 2009

       

      BETWEEN:

       

      LARRY
GERVAIS

       

      P.O. Box
43

       

      Timmins  Ontario  P4N
7C

       

      Telephone:  (705)
266-0184                                                                        (as
to 75%)

       

      JOHN
DER WEDUWEN

       

      PO Box
1353, 191 Main Street

       

      South
Porcupine Ontario P0N 1H0

       

      Telephone:
(705)
235-9669                                                                       (as
to 25%)

       

      (the
above hereinafter referred to as the "Optionors")

       

      OF
THE FIRST PART

       

      AND:

       

      AMADOR
GOLD CORP.

       

      #711 - 675 West Hastings
Street

       

      Vancouver,
British Columbia  V6B 1N2

       

      (the
above hereinafter referred to as the "Optionee")

       

      OF
THE SECOND PART

       

      WITNESSES THAT WHEREAS
Optionors are the recorded and beneficial owner of a 100% legal and beneficial
interest in and to certain mining claims situated in Ontario, more particularly
described in Schedule "A" attached hereto (collectively the
"Property");

       

      AND WHEREAS the Optionors
desire to grant and the Optionee is desirous of obtaining an option to acquire a
100% undivided interest in and to the Property upon terms and subject to the
conditions herein contained.

       

      NOW THEREFORE in consideration
of the premises and the mutual covenants and agreements herein contained, the
parties agree as follows:

       

      
        	
                1.

              	
                GRANT
      OF OPTION

              


      

       

      The
Optionors grant to the Optionee the sole, exclusive and irrevocable right and
option (the “Option”) to acquire an undivided 100% right, title and interest in
and to the Property, in accordance with the terms of this
Agreement.

       

      
        	
                2.

              	
                OPTION
      ONLY

              


      

       

      This is
an option only and except as specifically provided otherwise, nothing herein
contained shall be construed as obligating the Optionee to do any acts or make
any payments hereunder and any act or acts, or payment or payments as shall be
made hereunder shall not be construed as obligating the Optionee to do any
further act or make any further payment.  If the Option is terminated
before the Option is exercised, the Optionee shall not be bound thereafter in
debt, damages or otherwise under this Agreement, except as provided for in this
Agreement, and all payments theretofore paid by the Optionee shall be retained
by the Optionors for their own use absolutely.

       

      
        	
                3.

              	
                TERMS
      OF THE OPTION

              


      

       

      In order
to maintain the Option in good standing and earn a 100% right, title and
undivided interest in and to the Property, the Optionee, subject to paragraph 2,
shall:

       

      
        	
                 
      

              	
                (a)

              	
                pay
      to the Optionors $5,000 upon
signing;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                pay
      to the Optionors $5,000 on or before the October 5,
  2009;

              


      

       

      
        	
                 
      

              	
                (c)

              	
                pay
      to the Optionors $15,000 on or before the date which is 12 months from the
      date of regulatory approval;

              


      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       

      
        	
                 
      

              	
                (d)

              	
                pay
      to the Optionors a further $25,000 on or before the date which is 24
      months from the date of regulatory
approval;

              


      

       

      
        	
                 
      

              	
                (e)

              	
                issue
      to the Optionors 100,000 common shares of the Optionee upon receipt of
      regulatory approval;

              


      

       

      
        	
                 
      

              	
                (f)

              	
                issue
      to the Optionors 100,000 common shares of the Optionee 12 months from the
      date of regulatory approval; and

              


      

       

      
        	
                 
      

              	
                (g)

              	
                issue
      to the Optionors a further 100,000 common shares of the Optionee 24 months
      from the date of regulatory
approval.

              


      

       

      
        	
                 
      

              	
                (h)

              	
                incur
      $400 in exploration expenses annually per Property unit.  For
      the purposes of this Agreement, ”exploration expenses” means all costs,
      expenses and charges of whatsoever kind or nature incurred by the Optionee
      in connection with the exploration, development and maintenance of the
      Property, determined in accordance with Canadian generally accepted
      accounting practices.

              


      

       

      
        	
                4.

              	
                EXERCISE
      OF THE OPTION

              


      

       

      If the
Optionee has paid $50,000 and issued 300,000 shares of the Optionee to the
Optionors incurred exploration expenses as identified in section 3(h), the
Optionee shall be deemed to have exercised the Option and will have acquired an
undivided 100% right, title and interest in and to the Property, subject only to
the Royalty Interest reserved to the Optionors pursuant to paragraph 6
hereof.

       

      
        	
                5.

              	
                OPERATOR

              


      

       

      During
the term of the Option, the Optionee shall be the operator for purposes of
developing and executing exploration programs.

       

      
        	
                6.

              	
                ROYALTY
      INTEREST

              


      

       

      The
Optionors shall be entitled to receive and the Optionee shall pay to the
Optionors a royalty equal to 3% of the net smelter returns (the “Royalty
Interest”) calculated and payable from the Property in accordance with the
provisions of Schedule “B” attached hereto.

       

      The
Optionee may at any time purchase one-third (1%) of the Royalty Interest from
the Optionor for $1,000,000, thereby leaving the Optionor with a 2% Royalty
Interest.

       

      The
Optionee shall issue to the Optionor a further 100,000 common shares of the
Optionee after the completion of a positive feasibility study.

       

      
        	
                7.

              	
                RIGHT
      OF ENTRY

              


      

       

      During
the currency of the Option the Optionee and its employees, agents and any person
duly authorized by the Optionors shall have the sole and exclusive right
to:

       

      
        	
                 
      

              	
                (a)

              	
                enter
      in, under and upon the Property;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                have
      exclusive and quiet possession thereof subject to the rights of the
      Optionors hereunder;

              


      

       

      
        	
                 
      

              	
                (c)

              	
                do
      such prospecting, exploration, development or other mining work thereon
      and thereunder as the Optionee in its sole discretion may consider
      desirable;

              


      

       

      
        	
                 
      

              	
                (d)

              	
                bring
      upon and erect upon the Property such mining facilities as the Optionee
      may consider advisable; and

              


      

       

      
        	
                 
      

              	
                (e)

              	
                remove
      from the Property and dispose of reasonable quantities of ores, minerals
      and metals for the purposes of sampling, obtaining assays or making other
      tests.

              


      

       

      
        	
                8.

              	
                NOTICE
      OF DEFAULT AND TERMINATION BY
OPTIONORS

              


      

       

      If the
Optionee should be in default in making any payments or performing any other of
its obligations hereunder, the Optionors may give written notice to the Optionee
specifying the default.  The Optionee shall not lose any rights
granted under this Agreement so long as, within thirty (30) days after the
giving of such notice of default by the Optionors, the Optionee shall cure the
specified default.  If the Optionee fails to cure the default within
the thirty (30) day period, this Agreement shall terminate.  Upon
termination of this Agreement by the Optionors, the provisions of the paragraph
in this Agreement entitled “Termination Prior to Acquisition of Interest” shall
apply.


      
        
           


        

        
          2

          
            

          

        

        
           


        

      


       

      9.           NO
PRODUCTION OBLIGATION

       

      The
Optionee shall be under no obligation whatsoever to place the Property into
production.

       

      
        	
                10.

              	
                EXCLUSION
      OF PROPERTY

              


      

       

      The
Optionee shall have the right at any time and from time to time to elect to
exclude from this Agreement any portion of the Property by not less than thirty
(30) days prior written notice to the Optionors of this election; provided that
any portion of the Property so excluded shall be in good standing, free and
clear of all liens, charges and encumbrances, and provided further that the
Optionee, if requested by the Optionors in writing, shall deliver to the
Optionors recorded transfers of any mineral claims and other property interests
which are included in the portion of the Property so excluded in favour of the
Optionors.  Upon termination of a portion of the Property, the
terminated portion of the Property shall be subject to the provisions of the
paragraph in this Agreement entitled “Termination Prior to Acquisition of
Interest”.

       

      
        	
                11.

              	
                COVENANTS
      OF THE OPTIONEE

              


      

       

      During
the currency of this Agreement, the Optionee shall:

       

      
        	
                 
      

              	
                (a)

              	
                keep
      the Property in good standing by doing and filing of all assessment work
      and by the doing all other acts and things and making all other payments
      which may be necessary in that
regard;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                permit
      the Optionors, or their representative, duly authorized by it in writing,
      at its own risk and expense, access to the Property at all reasonable
      times and to all records prepared by the Optionee in connection with work
      done or with respect to the Property, provided the Optionors shall not,
      without the prior written consent of the Optionee, such consent not to be
      unreasonably withheld, disclose any information obtained by it or
      communicated to it, to any third party except as may be required by
      regulatory bodies having jurisdiction over it;
  and

              


      

       

      
        	
                 
      

              	
                (c)

              	
                conduct
      all work on or with respect to the Property in a careful and workmanlike
      manner and in compliance with the applicable laws of the jurisdiction in
      which the Property is located and indemnify and save the Optionors
      harmless from any and all claims, suits or actions made or brought against
      the Optionors as a result of work done by the Optionee on or with respect
      to the Property.

              


      

       

      
        	
                12.

              	
                COVENANTS
      OF THE OPTIONORS

              


      

       

      During
the currency of this Agreement, the Optionors covenant and agree with the
Optionee to:

       

      
        	
                 
      

              	
                (a)

              	
                not
      do or permit or suffer to be done any act or thing which would or might in
      any way adversely affect the rights of the Optionee
    hereunder;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                make
      available to the Optionee and its representatives all records and files
      relating to the Property in its possession and permit the Optionee and its
      representatives to take abstracts therefrom and make copies
      thereof;

              


      

       

      
        	
                 
      

              	
                (c)

              	
                co-operate
      with the Optionee in obtaining any water appropriation license, surface
      licenses and any other rights or licenses on or related to the Property,
      the Optionee deems necessary or desirable;
and

              


      

       

      
        	
                 
      

              	
                (d)

              	
                promptly
      provide the Optionee with any and all notices and correspondence from
      government or regulatory agencies in respect of the
    Property.

              


      

       

      
        	
                13.

              	
                REPRESENTATIONS
      AND WARRANTIES OF THE OPTIONORS

              


      

       

      The
Optionors hereby represent and warrant to the Optionee that:

       

      
        	
                 
      

              	
                (a)

              	
                the
      Optionors are the legal and beneficial owner of the
    Property;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                the
      Property consists of those mining claims more particularly described in
      Schedule “A”, all of which were duly and validly located and recorded in
      accordance with the applicable laws of Ontario and are valid and
      subsisting as of the date of execution and delivery of this
      Agreement;

              


      

       

      
        	
                 
      

              	
                (c)

              	
                the
      Property is in good standing, free and clear of all liens, charges and
      encumbrances;

              


      

       

      
        	
                 
      

              	
                (d)

              	
                there
      are no pending or threatened actions, suits, claims or proceedings
      regarding the Property; and

              


      


      
        
           


        

        
          3

          
            

          

        

        
           


        

      


       

      
        	
                 
      

              	
                (e)

              	
                the
      Optionors have the exclusive right and authority to enter into this
      Agreement and to dispose of the Property in accordance with the terms
      hereof, and that no other person, firm or corporation has any proprietary
      or other interest in the same.

              


      

       

      The
representations and warranties of the Optionors herein before set out, form a
part of this Agreement and are conditions upon which the Optionee has relied on
in entering into this Agreement and shall survive the exercise of the Option by
the Optionee.  The Optionors shall indemnify and save the Optionee
harmless from all loss, damage, costs, actions and suits arising out of or in
connection with any breach of any representation, warranty, covenant, agreement
or condition contained in this Agreement.  The Optionors acknowledge
and agree that the Optionee has entered into this Agreement relying on the
warranties and representations and other terms and conditions of this Agreement
and that no information which is now known or which may hereafter become known
to the Optionee or its officers, directors or professional advisors shall limit
or extinguish the right to indemnity hereunder.  The Optionee may
deduct the amount of any such loss or damage from any amounts payable by it to
the Optionors hereunder.

       

      
        	
                14.

              	
                TERMINATION
      PRIOR TO ACQUISITION OF INTEREST

              


      

       

      If the
Option is terminated, or if this Agreement is terminated prior to the exercise
of the Option by the Optionee, the Optionee shall return to the Optionors
forthwith exclusive and quiet possession of the following claims, :

       

      P-4250586
and P4250587, such claims to be returned in good standing for a period of one
year, free and clear of all liens, charges and encumbrances.

       

      
        	
                15.

              	
                ADDITIONAL
      TERMINATION

              


      

       

      In
addition to any other termination provisions contained in this Agreement, the
Optionee shall at any time have the right to terminate its rights and future
obligations under this Agreement by giving notice in writing of such termination
to the Optionors, and in the event of such termination, the Optionee shall not
earn any interest in the Property, and this Agreement, save and except for the
provisions of the paragraph in this Agreement entitled “Termination Prior to
Acquisition of Interest” hereof, shall be of no further force and
effect.

       

      
        	
                16.

              	
                FORCE
      MAJEURE

              


      

       

      If the
Optionee is prevented or delayed in complying with any provisions of this
Agreement by reason of strikes, lockouts, labour shortages, power shortages,
fires, wars, acts of God, governmental regulations restricting normal operations
or any other reason or reasons beyond the control of the Optionee, the time
limited for the performance of the various provisions of this Agreement as set
out above shall be extended by a period of time equal in length to the period of
such prevention and delay.  The Optionee, insofar as is possible,
shall promptly give written notice to the Optionors of the particulars of the
reasons for any prevention or delay under this paragraph, and shall take all
reasonable steps to remove the cause of such prevention or delay and shall give
written notice to the Optionors as soon as such cause ceases to
subsist.

       

      
        	
                17.

              	
                NOTICE

              


      

       

      Any
notice required to be given under this Agreement shall be deemed to be well and
sufficiently given if delivered or if mailed by registered mail in Canada, (save
and except during the period of any interruption in the normal postal service
within Canada) or sent by facsimile transfer to either party at the addresses
first set out above and any notice given as aforesaid shall be deemed to have
been given, if delivered or sent by facsimile transfer, when delivered or faxed,
or if by mail, on the third business day after the date sent by mail
..  Either party may from time to time by notice in writing change its
address for the purpose of this paragraph.

       

      
        	
                18.

              	
                FURTHER
      ASSURANCES

              


      

       

      The
parties hereto agree to execute all such further or other assurances and
documents and to do or cause to be done all acts necessary to implement and
carry into effect the provisions and intent of this Agreement.

       

      
        	
                19.

              	
                TIME
      OF ESSENCE

              


      

       

      Time
shall be of the essence of this Agreement.

       

      
        	
                20.

              	
                TITLES

              


      

       

      The
titles to the respective paragraphs hereof shall not be deemed to form part of
this Agreement but shall be regarded as having been used for convenience of
reference only.


      
        
           


        

        
          4

          
            

          

        

        
           


        

      


       

      21.           SCHEDULES

       

      The
Schedules to this Agreement shall be construed with and as an integral part of
this Agreement to the same extent as if they were contained in the body
hereof.

       

      
        	
                22.

              	
                VOID
      OR INVALID PROVISION

              


      

       

      If any
term, provision, covenant or condition of this Agreement, or any application
thereof, should be held by a court of competent jurisdiction to be invalid, void
or unenforceable, all provisions, covenants and conditions of this Agreement,
and all applications thereof not held invalid, void or unenforceable shall
continue in full force and effect and in no way be affected, impaired or
invalidated thereby.

       

      
        	
                23.

              	
                SUCCESSORS
      AND ASSIGNS

              


      

       

      This
Agreement shall enure to the benefit of and be binding upon the parties hereto
and their respective successors, assigns, heirs, executors or administrators as
the case may be.

       

      
        	
                24.

              	
                APPROVALS

              


      

       

      The
Optionee and the Optionors hereby acknowledge that this Agreement shall be
subject to all necessary regulatory approvals.

       

      
        	
                25.

              	
                ARBITRATION

              


      

       

      If any
question, difference or dispute shall arise between the parties or any of them
in respect of any matter arising under or in connection with the subject matter
of this Agreement, or in relation to the construction hereof, the same shall be
determined by the award of a single arbitrator under the Commercial Arbitration
Act of the

       

      Province
of Ontario, and the decision of the arbitrator shall in all respects be
conclusive and binding upon all the parties.

       

      
        	
                26.

              	
                ASSIGNMENT

              


      

       

      This
Agreement and any Agreement contemplated hereby may not be assigned by the
Optionee without the written consent of the Optionors, such consent not to be
unreasonably withheld.

       

      
        	
                27.

              	
                AFTER-ACQUIRED
      PROPERTY

              


      

       

      The area
which is included within two kilometres of the outer most boundary of the
Property shall be deemed to be an area of interest (“Area of
Interest”).  During the term of this Agreement any mineral claim
staked by or on behalf of the Optionee or the Optionors within the Area of
Interest shall be deemed to have been acquired on behalf of and for the benefit
of the parties pursuant to the terms of this Agreement.  This
Agreement shall not extend beyond the Area of Interest and shall not affect
mineral properties which the parties now hold or hereafter stake or acquire
adjacent to the Area of Interest.

       

      
        	
                28.

              	
                GOVERNING
      LAW

              


      

       

      This
Agreement shall be governed by and interpreted in accordance with the laws of
the Province of Ontario.

       

      
        	
                29.

              	
                PRIOR
      AGREEMENTS

              


      

       

      This
Agreement contains the entire agreement between the parties in respect of the
Property and supersedes all prior agreements between the parties hereto with
respect to the Property, which said prior agreements shall be deemed to be null
and void upon the execution hereof.

       

      
        	
                30.

              	
                EXECUTION
      IN COUNTERPARTS

              


      

       

      This
Agreement may be executed in any number of counterparts with the same effect as
if all parties had signed the same document.


      
        
           


        

        
          5

          
            

          

        

        
           


        

      


       

      IN WITNESS WHEREOF the parties
hereto have executed these presents as of the day and year first above
written.

       

      


      
        	
                SIGNED,
      SEALED and DELIVERED by

              	
                )

              	 
      
	
                LARRY GERVAIS in the
      presence of:

              	
                )

              	 
      
	
                 

                /s/ Diane Taylor             

              	
                )

                )

              	 
      
	
                Witness
      Signature

              	
                )

              	
                /s/ Larry Gervais 

              
	 
      	
                )

              	
                LARRY
      GERVAIS

              
	
                Diane Taylor 

              	
                )

              	 
      
	
                Witness
      Name (printed)

              	
                )

              	 
      
	
                Union Securities Limited, Timmins, ON 

              	
                )

                )

              	 
      
	
                Address

              	
                )

              	 
      
	 
      	 
      	 
      
	
                JOHN DER WEDUWEN in the
      presence of:

              	
                )

              	 
      
	
                 

                /s/ Diane Taylor             

              	
                )

                )

              	 
      
	
                Witness
      Signature

              	
                )

              	
                /s/ John Der Weduwen 

              
	 
      	
                )

              	
                JOHN
      DER WEDUWEN

              
	
                Diane Taylor 

              	
                )

              	 
      
	
                Witness
      Name (printed)

              	
                )

              	 
      
	
                Union Securities Limited, Timmins, ON 

              	
                )

                )

              	 
      
	
                Address

              	
                )

              	 
      
	 
      	 
      	 
      
	
                AMADOR
      GOLD CORP.

              	
                )

              	 
      
	
                 

                 

                Per:
      /s/ Alan D. Campbell          

              	
                )

                )

                )

              	 
      
	
                Alan D. Campbell,
      CFO

              	
                )

              	 
      


      

      



      
        
           


        

        
          6

          
            

          

        

        
           


        

      


       

      SCHEDULE
"A"

      
        


         

        REFERRED
TO IN THE AGREEMENT DATED FOR REFERENCE THE 5TH DAY
OF AUGUST 2009 BETWEEN LARRY
GERVAIS, JOHN DER WEDUWEN AND AMADOR GOLD
CORP.

      

       

      The
Property consists of the following claims in the Porcupine Mining Division,
Ontario:

      


      
        	
                Township

              	
                Claim
      Number

              	
                #
      of Units

              	
                Recording
      Date

              	
                Due
      Date

              
	
                Sewell

              	
                P-4250586

              	
                16

              	
                June
      29, 2009

              	
                June
      29, 2011

              
	
                Sewell

              	
                P-4250587

              	
                16

              	
                June
      29, 2009

              	
                June
      29, 2011

              
	
                Total
      Units

              	 
      	
                32

              	 
      	 
      


      


      
        
           


        

        
          7

          
            

          

        

        
           


        

      


       

      SCHEDULE
"B"

      
        


         

        REFERRED
TO IN THE AGREEMENT DATED FOR REFERENCE THE 5th DAY
OF AUGUST 2009 BETWEEN LARRY
GERVAIS, JOHN DER WEDUWEN AND AMADOR GOLD
CORP.

      

       

      


       

      NET SMELTER
RETURNS

       

      
        	
                1.

              	
                For
      all diamonds, gems and other precious and semi-precious stones (“Stone
      Products”) mined or produced from the Property, the Optionee shall pay to
      the Vendor a Royalty equal to a percentage of the net sales returns
      (“NSAR”) realized from the sale or disposition of the Stone
      Products.

              


      

       

      
        	
                2.

              	
                For
      all metals, bullion or concentrates (“Other Products”) mined or produced
      from the Property, the Optionee shall pay to the Vendor a Royalty equal to
      a percentage of the net smelter returns (“NSMR”) realized or deemed to be
      realized as hereinafter provided, from the sale or disposition of the
      Other Products.

              


      

       

      
        	
                3.

              	
                The
      aforementioned percentage of the NSAR and percentage of the NSMR shall be
      that determined in accordance with the provisions of Section 4 of the
      Agreement to which this Schedule B forms a part; and in the calculation of
      the Royalty, such percentage is applied to 100% of the NSAR or NSMR, as
      the case may be, regardless of dilution of the Optionee’s working interest
      or entitlement with respect to the Agreement, the Property or the
      Products.

              


      

       

      
        	
                4.

              	
                For
      the purposes of this Schedule B, the term “Products” shall be interpreted
      as a collective reference to Stone Products and Other Products and the
      term “Royalty” shall be interpreted as a collective reference to the NSAR
      Royalty and the NSMR Royalty.

              


      

       

      
        	
                5.

              	
                Net
      Sales Returns Royalty – Stone
Products

              


      

       

      
        	
                 
      

              	
                a.

              	
                Net
      sales returns means the gross proceeds from the sale or disposition of
      Stone Products to an independent purchaser, after deducting therefrom the
      cost of Valuation, Sorting, Shipping and Insurance in connection with the
      Stone Products as well as any sales, excise, production, export and other
      duties, levies, assessments and taxes (except income taxes) payable on the
      production or sale of Stone Products (but not income taxes), and for the
      purposes hereof:

              


      

       

      
        	
                 
      

              	
                i.

              	
                “Valuation”
      means the establishing of a value for each lot or group of sorted Stone
      Products for purposes of reference when negotiating with a potential
      purchaser of the same;

              


      

       

      
        	
                 
      

              	
                ii.

              	
                “Sorting”
      means separation of Stone Products from waste materials and dividing them
      into groups according to quality, size, or other characteristics, and then
      the division of such groups into appropriate lots or groups for valuing
      and/or sale, it being acknowledged that in the case of gem quality Stone
      Products, a group or lot may be a single
stone;

              


      

       

      
        	
                 
      

              	
                iii.

              	
                “Shipping”
      means all methods of transportation or places of storage of Stone Products
      from the moment they leave the Property until the passing of title thereto
      or risks therefore (whichever is the later) to an independent purchaser,
      including, without limitation, any cost that may be incurred by reason of
      such methods or places used or any sorting or valuation facilities being
      situated off the Property; and

              


      

       

      
        	
                 
      

              	
                iv.

              	
                “Insurance”
      means all insurance that the Optionee considers advisable to protect all
      or part of the Stone Products in the possession or control of the Optionee
      (including, without limitation, during shipping) until the passing of
      title thereto or risks therefore (whichever is the later) and including,
      without limitation, the insurance or bonding of any person who does or may
      come into contact with any such Stone Products at any point during the
      operations of the Optionee whether such person is an employee of the
      Optionee or otherwise.

              


      

       

      
        	
                 
      

              	
                b.

              	
                If
      Stone Products are sold to any entity with which the Optionee does not
      deal at arm’s length, the Stone Products shall for the purposes hereof be
      deemed to have been sold at prices determined by an independent valuator
      chosen by the Vendor.

              


      

       

      
        	
                 
      

              	
                c.

              	
                the
      Optionee shall not have the right to commingle Stone Products produced
      from the Property with similar products produced from other
      properties.

              


      


      
        
           


        

        
          8

          
            

          

        

        
           


        

      


       

      
        	
                6.

              	
                Net
      Smelter Returns Royalty – Other
Products

              


      

       

      
        	
                 
      

              	
                a.

              	
                Net
      smelter returns means the gross proceeds from the sale or disposition of
      Other Products removed from the Property after deducting the costs of
      treatment, tolling, smelting, refining and minting of such products and
      all costs associated therewith such as transporting, insuring, handling,
      weighing, sampling, assaying and marketing, as well as all penalties,
      representation charges, referee’s fees and expenses, import taxes and
      export taxes; and the term "smelter" shall mean conventional smelters as
      well as any other type of production plant used in lieu of a conventional
      smelter to reduce concentrates.

              


      

       

      
        	
                 
      

              	
                b.

              	
                If
      smelting, refining, treatment, assay or sampling of Other Products is
      performed by facilities owned or controlled by the Optionee or any of its
      affiliates, all charges, costs and penalties therefore to be deducted
      pursuant to the foregoing paragraph shall be equal to and not exceed
      actual costs incurred by the Optionee in carrying out such processes and
      shall not exceed such amounts which the Optionee would have incurred if
      such operations were conducted at facilities operating at arm’s length to
      the Optionee, and which were then offering comparable services for
      comparable quantities and quality of Other
  Products.

              


      

       

      
        	
                 
      

              	
                c.

              	
                The
      Optionee shall have the right to commingle Other Products produced from
      the Property with metals, bullion or concentrates produced from other
      properties.  Before commingling, Other Products from the
      Property shall be weighed, sampled, assayed, measured or gauged by the
      Optionee in accordance with sound mining and metallurgical practices for
      moisture, penalty substances and payable content.  Records shall
      be kept by the Optionee for a reasonable time showing weights, moisture
      and assays of payable content. Prior to commingling, the Optionee shall
      give thirty (30) days notice to the Vendor specifying its decision to
      commingle and outlining the procedures it proposes to
    follow.

              


      

       

      
        	
                 
      

              	
                7.

              	
                General

              


      

       

      
        	
                 
      

              	
                a.

              	
                Royalties
      shall accrue at the time of sale or deemed sale, as applicable, and they
      shall become due and payable in cash on a calendar quarter basis, on the
      twentieth (20th) day of the month next following the calendar quarter in
      which they accrue.

              


      

       

      
        	
                 
      

              	
                b.

              	
                At
      the time of making each Royalty payment to the Vendor, the Optionee shall
      provide the Vendor with a certificate of a senior officer of the Optionee
      certifying as to the accuracy of the calculations of the Royalty payment
      and setting out the method of the calculation thereof to which shall be
      attached a true copy of the related smelter or sales receipt or
      receipts.

              


      

       

      
        	
                 
      

              	
                c.

              	
                Net
      sales returns and net smelter returns upon the respective Products shall
      be calculated exclusively as provided herein, and the Royalty computed
      thereon shall be determined without regard to any “hedging”, “forward”,
      “futures” or comparable sales (collectively referred to as “future
      trading”) of such Products by or on behalf of the Optionee. The Vendor
      shall not be entitled to any benefit of or be subject to any loss
      attributable to such future trading by the
  Optionee.

              


      

       

      
        	
                 
      

              	
                d.

              	
                The
      Optionee shall cause to be kept proper books of account, records and
      supporting materials covering all matters relevant to the calculation of
      Royalties payable to the Vendor, and the reasonable verification thereof;
      and the Vendor shall have, from time to time, the unfettered right, during
      regular business hours and on reasonable notice, to carry out at its sole
      cost and expense an audit by established independent professionals chosen
      by the Vendor, of the methodology and manner of calculating all Royalty
      payments hereunder and the Optionee shall provide, during regular business
      hours and on reasonable notice, unrestricted access to its books,
      accounts, records, vouchers, smelter settlements, sales receipts and
      related documentation for this purpose.  Should there be any
      difference in the amount of the Royalty payment or payments which are
      ultimately determined by the process to be in the Vendor’s favour, which
      exceed three (3%) percent of the amount of the Royalty paid to the Vendor,
      then the cost of said audit, to the extent reasonable, shall be reimbursed
      to the Vendor by the Optionee.

              


      

       

      
        	
                 
      

              	
                e.

              	
                Any
      dispute relating to the quantum or methodology of calculating all
      Royalties payable hereunder shall be settled by arbitration pursuant to
      the provisions of the Agreement.

              


      

       

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