exh4-168.htm


    Exhibit 4.168

      PATENT
GOLD REINSTATEMENT AGREEMENT

       

      This
Agreement is dated for reference the 25th day
of August 2009

       

      BETWEEN:

       

      OF
THE FIRST PART

       

      FREDERICK J. ROSS of 958 Park
Avenue, Timmins, Ontario  P4N 7K9

      Telephone:  (705)
267-1791                     (as to 50%)

       

      GARRY WINDSOR of 756 McClinton
Drive, Timmins, Ontario  P4N 4P8

      Telephone:  (705)
268-0095                     (as to 25%)

       

      BRUCE DURHAM of P.O. Box 1330,
Timmins, Ontario  P4N 7J8

      Telephone:  (416)
414-2144                     (as to 25%)

       

      (hereinafter
collectively referred to as the "Optionors")

       

      AND:

       

      AMADOR GOLD CORP. of Suite 711
- 675 West Hastings Street, Vancouver, British Columbia  V6B
1N2

       

      (referred
to as the "Optionee")

       

      OF
THE SECOND PART

       

      
        WHEREAS the Optionors and the
Optionee entered into an option agreement dated for reference the 2nd day
of May 2006 and amended the 27th day
of July 2007 and (collectively, the “Patent Agreement”).  The
agreement was terminated on December 9, 2008 and the parties wish to reinstate
the Patent Agreement.

         

        WITNESSES THAT WHEREAS the
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 $15,000 by May 12, 2006 (paid);

         

        
          	
                  (b)

                	
                  pay
      to the Optionors a further $15,000 on or before July 10, 2007
      (paid);

                


        

         

        
          	
                  (c)

                	
                  pay
      to the Optionors a further $20,000 on or before August 31,
      2009;

                


        

         

        
          	
                  (d)

                	
                  pay
      to the Optionors a further $20,000 on or before August 31,
      2010;

                


        

         

        
          	
                  (e)

                	
                  pay
      to the Optionors a further $20,000 on or before August 31,
      2011;

                


        

         

        
          	
                  (f)

                	
                  issue
      to the Optionors 50,000 common shares of the Optionee on or before August
      10, 2006 (issued);

                


        

         

        
          	
                  (g)

                	
                  issue
      to the Optionors a further 50,000 common shares of the Optionee on or
      before July 10, 2007 (issued);

                


        

         

        
          	
                  (h)

                	
                  issue
      to the Optionors a further 75,000 common shares of the Optionee on or
      before July 10, 2008 (issued);

                


        

         

        
          	
                  (i)

                	
                  issue
      to the Optionors a further 75,000 common shares of the Optionee on or
      before September 30, 2009;

                


        

         

        
          	
                  (j)

                	
                  incur
      at least an aggregate of $130,000 in exploration expenses on the Property
      on or before July 10, 2009
(incurred);

                


        

         

        
          	
                  (k)

                	
                  incur
      at least an aggregate of $180,000 in exploration expenses on the Property
      on or before August 31, 2010;

                


        

         

        
          	
                  (l)

                	
                  incur
      at least an aggregate of $280,000 in exploration expenses on the Property
      on or before August 31, 2011; and

                


        

         

        
          	
                  (m)

                	
                  incur
      at least an aggregate of $380,000 in exploration expenses on the Property
      on or before August 31, 2012.

                


        

         

        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 $90,000, issued 250,000 common shares to the Optionor, and
incurred an aggregate of $380,000 in exploration expenses, 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 two-thirds (2%) of the Royalty Interest from
the Optionors for $1,000,000, thereby leaving the Optionors with a 1% Royalty
Interest.

         

        The
Optionor grants to the Optionee the right of first refusal on any sale of the
Royalty Interest.

         

        
          	
                  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;

                


        


        
          
             


          

          
            2

            
              

            

          

          
             


          

        


         

        
          	
                   
      

                	
                  (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.

         

        
          	
                  9.

                	
                  NO
      PRODUCTION OBLIGATION

                


        

         

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

         

        
          	
                  10.

                	
                  TRANSFER
      OF PROPERTY

                


        

         

        The
Property will be transferred when the provisions in paragraph 3 have been
met.

         

        
          	
                  11.

                	
                  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”.

         

        
          	
                  12.

                	
                  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.

                


        

         

        
          	
                  13.

                	
                  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

                


        


        
          
             


          

          
            3

            
              

            

          

          
             


          

        


         

        
          	 	
                  (d)

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

                


        

         

        
          	
                  14.

                	
                  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

                


        

         

        
          	
                   
      

                	
                  (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.

         

        
          	
                  15.

                	
                  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-3005388; P-4202901; P-4220807; P-1236943; P-3005387;
P-3017352; P-4209634; P-4209636; P-4209637; P-4209638; P-4209635 (or any
restaking thereof); such claims to be returned in good standing for a period of
one year, free and clear of all liens, charges and encumbrances.

         

        
          	
                  16.

                	
                  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.

         

        
          	
                  17.

                	
                  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.

         

        
          	
                  18.

                	
                  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


        
          
             


          

          
            4

            
              

            

          

          
             


          

        


         

        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.

         

        
          	
                  19.

                	
                  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.

         

        
          	
                  20.

                	
                  TIME
      OF ESSENCE

                


        

         

        Time
shall be of the essence of this Agreement.

         

        
          	
                  21.

                	
                  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.

         

        
          	
                  22.

                	
                  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.

         

        
          	
                  23.

                	
                  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.

         

        
          	
                  24.

                	
                  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.

         

        
          	
                  25.

                	
                  APPROVALS

                


        

         

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

         

        
          	
                  26.

                	
                  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.

         

        
          	
                  27.

                	
                  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.

         

        
          	
                  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

                  FREDERICK ROSS in the
      presence of:

                	
                  )

                  )

                	 
      
	 
      	
                  )

                  )

                  )

                	 
      
	
                  Witness
      Signature

                	
                  )

                  )

                  )

                	
                  /s/
      Frederick Ross                                                          

                  FREDERICK
      ROSS

                
	
                  Witness
      Name (printed)

                   

                   

                	
                  )

                  )

                  )

                	 
      
	
                  Address

                	
                  )

                	 
      
	 
      	 
      	 
      
	
                  GARRY WINDSOR in the
      presence of:

                	
                  )

                	 
      
	 
      	
                  )

                  )

                	 
      
	
                  Witness
      Signature

                   

                   

                	
                  )

                  )

                  )

                	
                  /s/ Garry
      Windsor                                                          

                  GARRY
      WINDSOR

                
	
                  Witness
      Name (printed)

                	
                  )

                  )

                  )

                	 
      
	
                  Address

                	
                  )

                	 
      
	 
      	 
      	 
      
	
                  BRUCE DURHAM in the
      presence of:

                	
                  )

                  )

                  )

                	 
      
	
                  Witness
      Signature

                	
                  )

                  )

                  )

                	
                  /s/ Bruce
      Durham                                                          

                  BRUCE
      DURHAM

                
	
                  Witness
      Name (printed)

                	
                  )

                  )

                  )

                	 
      
	
                  Address

                	
                  )

                	 
      
	 
      	 
      	 
      
	
                  AMADOR
      GOLD CORP.

                	
                  )

                  )

                  )

                	 
      
	
                  Per:     /s/ Alan
      D. Campbell________________

                  Alan D. Campbell, CFO &
      Director

                	
                  )

                  )

                	 
      


        

      

      
        


        
 


        
          
             


          

          
            6

            
              

            

          

          
             


          

        


        SCHEDULE
"A"

        
          


           

          Referred
to in the Amendment Agreement dated for Reference the 25th day
of August 2009 between AMADOR
GOLD CORP. and FREDERICK
J. ROSS, GARRY WINDSOR, BRUCE DURHAM

        

         

        PROPERTY

         

         

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

         

        


        

          
            	
                    Township

                  	
                    Claim
      Number

                  	
                    #
      of Units

                  	
                    Recording
      Date

                  	
                    Expiry
      Date

                  
	
                    Sewell

                  	
                    P-3005388

                  	
                    16

                  	
                    November
      29, 2005

                  	
                    November
      29, 2012

                  
	
                    Sewell

                  	
                    P-4202901

                  	
                    12

                  	
                    June
      1, 2005

                  	
                    June
      1, 2012

                  
	
                    Sewell

                  	
                    P-4220807

                  	
                    1

                  	
                    July
      12, 2007

                  	
                    July
      12, 2012

                  
	
                    Sewell

                  	
                    P-1236943

                  	
                    1

                  	
                    July
      4, 2000

                  	
                    July
      4, 2011

                  
	
                    Sewell

                  	
                    P-3005387

                  	
                    1

                  	
                    October
      28, 2005

                  	
                    October
      28, 2010

                  
	
                    Sewell

                  	
                    P-3017352

                  	
                    1

                  	
                    September
      21, 2005

                  	
                    September
      21, 2011

                  
	
                    Sewell

                  	
                    P-4209634

                  	
                    9

                  	
                    February
      13, 2006

                  	
                    February
      13, 2012

                  
	
                    Sewell

                  	
                    P-4209636

                  	
                    3

                  	
                    February
      13, 2006

                  	
                    February
      13, 2012

                  
	
                    Sewell

                  	
                    P-4209637

                  	
                    8

                  	
                    February
      13, 2006

                  	
                    February
      13, 2012

                  
	
                    Sewell

                  	
                    P-4209638

                  	
                    16

                  	
                    February
      13, 2006

                  	
                    February
      13, 2010

                  
	
                    Reeves

                  	
                    P-4209635

                  	
                    16

                  	
                    February
      13, 2006

                  	
                    February
      13, 2012

                  
	 
      	 
      	
                    84

                  	 
      	 
      


          




        



        
          
             


          

          
            7

            
              

            

          

          
             


          

        


        SCHEDULE
"B"

        
          


           

          REFERRED
TO IN THE AGREEMENT DATED FOR REFERENCE THE 25th DAY
OF AUGUST 2009 BETWEEN FREDERICK J. ROSS, GARRY WINDSOR,
BRUCE DURHAM AND AMADOR
GOLD CORP.

        

         

        ROYALTIES

         

        
          	
                   
      

                	
                  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 Optionor 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, concentrates or ores (“Other Products”) mined
      or produced from the Property, the Optionee shall pay to the Optionor 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 4.1 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 the final
      separation of Stone Products 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
      therefor (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 therefor (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 Optionor.

                


        

         

        
          	
                   
      

                	
                  c.

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

                


        

         

        
          	
                   
      

                	
                  6.

                	 Net
      Smelter Returns Royalty – Other
Products


        


        
          
             


          

          
            8

            
              

            

          

          
             


          

        


         

        
          	
                   
      

                	
                  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 ores or
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 therefor 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 ores and minerals 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
      Optionor 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 Optionor, the Optionee
      shall provide the Optionor with a certificate of a senior officer of the
      Optionor 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 Optionor 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 Optionor, and the reasonable verification
      thereof; and the Optionor 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 Optionor, 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 described in Article 8 of the
      Agreement to be in the Optionor’s favour, which exceed three (3%) percent
      of the amount of the Royalty paid to the Optionor, then the cost of said
      audit, to the extent reasonable, shall be reimbursed to the Optionor 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 Article 24 of the
Agreement.

                


        

        



        
          
             


          

          
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