Hecla Mining Company Exhibit 10.2 to Form 8-K, Dated March 2, 2006






Exhibit 10.2  



EARN-IN AGREEMENT
AMENDMENT 



        This
Earn-in Agreement Amendment (“EIA Amendment”) is made as of February 28, 2006
between HECLA VENTURES CORP., a Nevada corporation duly qualified to do business and in
good standing in the state of Nevada, whose principal address is 6500 Mineral Drive, Coeur
d’Alene, Idaho 83815-8788 (hereinafter referred to as “Hecla Ventures”) and
its Guarantor and parent company, Hecla Mining Company and RODEO CREEK GOLD INC., a Nevada
corporation whose address is c/o Richard Harris, Ste. 260-6121 Lakeside Drive, Reno, NV
89511 (hereinafter referred to as “Rodeo Creek”) which is qualified to do
business and is in good standing in the State of Nevada and its Guarantor and indirect
parent company, Great Basin Gold Ltd. 




RECITALS 



             A.       
          WHEREAS the Parties entered into an Earn-in Agreement effective August 2, 2002
          (the “Earn-In Agreement”) which the parties desire to amend hereby; 



             B.       
          AND WHEREAS the Parties are engaged in a legal dispute in connection with the
          Earn-in Agreement which this EIA Amendment will resolve and settle; 



        NOW,
THEREFORE, in consideration of the payments provided for herein and the mutual promises
set forth below, the Parties hereby agree to the provisions of this EIA Amendment. 





PART I 



DEFINITIONS 



        1.1      
Capitalized terms herein shall have the meanings set forth in the Earn-in Agreement except
as hereby amended. 



        1.2      
“Feasibility Study” the existing definition in the Earn-in Agreement is hereby
amended by adding to the existing definition the following sentence: “The Feasibility
Study shall be either produced by, or endorsed by, an internationally recognized mining
engineering firm which is independent of the parties.” 



        1.3      
“Commercial Production” the existing definition in the Earn-in Agreement is
hereby deleted and replaced  with
the following: “Commercial Production” means the establishment of a mine on the
Properties in the manner and at the production level recommended by the Feasibility Study
and achievement of Commercial Production shall be deemed to occur upon the first operation
of such mine at a minimum of 75% of the life of mine scheduled average production rate
provided for in the Feasibility Study during any consecutive 30 day period. 
















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PART II  



TERM OF EARN-IN
AGREEMENT 



        2.1      
     Article III of the Earn-in Agreement is amended by substituting the following in its
entirety: 




“ARTICLE III



TERM OF EARN-IN
AGREEMENT 



	  	          
  The
Term of this Earn-in Agreement shall commence as of the Effective Date and shall
automatically terminate on the earlier of (i) August 2, 2009 or (ii) the date that Hecla
Ventures vests in its 50% Interest pursuant to Article V, unless this Earn-in Agreement is
earlier terminated pursuant to Article VIII, or earlier terminated pursuant to Article
XIII on account of Hecla Ventures failing to meet the requirements of Article V, or unless
this Earn-in Agreement is extended by amendment hereof upon the Parties’ mutual
written agreement. 







	  	          
  The
parties hereby agree deadlines included in this article shall be extended for a period of
time equal to the time that Hecla Ventures determines, acting reasonably, it is prohibited
from advancing or completing the requirements of this article (for example, lack of legal
access), by the action or inaction of Great Basin Gold, Rodeo Creek, or any third party
who holds an interest in or a contractual right effecting any portion of the Properties.
During any period in which Hecla Ventures determines, acting reasonably, it is prohibited
from advancing the activities associated with Stage II and/or vesting by lack of legal
access to any portion of the Properties due to action or inaction of Great Basin Gold or
Rodeo Creek or any third party who holds an interest in or a contractual right effecting
any portion of the Properties, Rodeo Creek will pay 100% of the Project’s holding
costs, as well as all costs during a 60-day remobilization period at the recommencement of
operations. 








	  	          
  The
language in the preceding paragraph shall also apply to Hecla Ventures’ obligations
under section 3.1 below, and any other provisions in the Earn-in Agreement. The provisions
in section 2.1 shall not restrict or preclude Hecla Ventures’ from exercising any
other rights or remedies provided for at law or under the Earn-in Agreement. 







        2.2       
Section 8.4 of the Earn-in Agreement is hereby deleted from the Agreement and Hecla agrees
that completion by it of the Attachment A activities is no longer optional but a
commitment and that material changes from Attachment A (which supersedes Exhibit E to the
EIA) will only be made with Rodeo Creek’s consent. 

















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PART III 



INITIAL CONTRIBUTION
AND REQUIRED EARN-IN EXPENDITURES 



        3.1      
     Section 5.1(c) of the Earn-in Agreement is hereby deleted and substituted with the
following: 



	  	
“5.1      (c)      Hecla
Ventures hereby commits to complete and fund, at whatever cost, 100% of the
remaining Stage I Earn-in Activities and to complete all such activities (except
preparation and delivery of the Feasibility Study) by March 31, 2007, failing which Rodeo
Creek may, in addition to any other rights it may have, terminate Hecla Ventures’
Earn-in rights hereunder pursuant to Article XIII. Hecla Ventures also agrees that it is a
condition to Hecla Ventures vesting in a 50% Participating Interest in the Properties that
it achieves Commercial Production by August 2, 2009 failing which Hecla Venture’s
Earn-in rights under this Agreement may also be terminated by Rodeo Creek pursuant to
Article XIII. 







	  	
Each
party will be obligated to fund its share of the Stage II Earn-in Activities. However,
Hecla Ventures shall fund Rodeo Creek’s portion of Stage II Expenditures towards
achieving Commercial Production until the later of (i) 30 days after Hecla has delivered
to Rodeo Creek the Feasibility Study and (ii) the date on which the amount Hecla
Ventures’ Stage II Earn-in Expenditures, when aggregated with its Stage I Earn-in
Expenditures, exceeds $21.8 million. Thereupon Rodeo Creek shall be obligated to pay its
portion of Hecla’s Ventures’ Stage II Expenditures. In addition, no later than
120 days after Hecla has delivered to Rodeo Creek the Feasibility Study, Rodeo Creek will
be obligated to repay Hecla Ventures for any and all Stage II expenditures that Hecla
Ventures funded on behalf of Rodeo Creek. Hecla Ventures will send Rodeo Creek invoices
for 50% of Stage II costs following the submission of the Feasibility Study. If Rodeo
Creek fails to remit full payment of the invoices within 30 days of the invoice date for
their share of Stage II Expenditures, the failure to pay will be deemed a default in
making a cash call and Hecla Ventures shall have all rights and remedies as provided in
section 10.3 and 6.4 of Exhibit F to the Earn-In Agreement (the Joint Operating
Agreement). In lieu of the rights and remedies provided in sections 10.3 and 6.4, Hecla
Ventures shall have the right to elect to be repaid for any amounts due and in default
from Rodeo Creek hereunder by retaining and marketing Rodeo Creek’s first share of
production under the Joint Operating Agreement until Hecla Ventures has received four
times the amount of the default. In the event Rodeo Creek funds 100% of any Stage II
activities and Hecla Ventures does not pay its portion, Rodeo Creek retains the same
rights and remedies against Hecla Ventures as stated above. All expenditures incurred by
Hecla Ventures in furtherance of Commercial Production, other than those expenditures
specifically incurred in connection with the completion of the Stage I Earn-in Activities
described in Attachment A, shall be deemed to be incurred for Stage II Earn-in Activities
and they (plus the Feasibility Study) shall require the prior approval of the Management
Committee as if Article VII of the Joint Operating Agreement were in effect and
notwithstanding that Hecla Ventures has not yet vested and the Joint Operating Agreement
is not otherwise effective. On approval of a Stage II development budget, and commencement
of Stage II underground excavations or construction of Stage II infrastructure by Hecla
Ventures, it shall, within ten (10) days thereafter, issue to Great Basin one million
(1,000,000) Hecla Mining Warrants, (“Tranche 2”) in the form of the Warrant
Agreement in Exhibit G exercisable at the Exercise Price and in accordance with the terms
and conditions of the Warrant Agreement.” 

















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        3.2      
     Sections 5.2, 5.4 and 5.5 of the Earn-in Agreement are hereby deleted and
substituted with the following:





	  	
“5.2      Reasonable Earn-in
Activities.  Hecla Ventures’ Stage I Earn-in Activities shall be
conducted in accordance with Attachment A hereto. The Parties hereby approve the
program and budget for Stage I Earn-in Activities 






	  	
5.4      Completion of Required Earn-in
Expenditures.  Upon completion of Stage I Earn-in Activities, excluding
preparation and delivery of the Feasibility Study, Hecla Ventures shall provide
notice to Rodeo Creek that it (i) has completed Stage I Earn-in activities, (ii)
intends to begin Stage II activities, and (iii) submits a proposed budget for
Stage II activities. Together with the notice, Hecla Ventures shall provide to
Rodeo Creek with a certification of expenses incurred during Stage I activities.
Rodeo Creek may, at its own expense, commence an audit of Hecla Ventures’
Stage I expenditures by a licensed accounting firm. If Rodeo Creek chooses to
audit Stage I expenditures, Hecla Ventures must be given written notice of Rodeo
Creek’s intent to audit within 30 days of delivery of the Feasibility
Study, and the audit engagement must commence within 45 days of delivery of the
Feasibility Study. Unless such notice is received within 30 days, all
expenditures for Stage I activities are deemed approved. Hecla Ventures shall
provide a similar certification, and Rodeo Creek shall provide similar notices
and abide by the same time frames upon the completion of Stage II Earn-in
Activities. 






	  	
5.5      Stage II Earn-in Activities and
Transfer of Property.  Hecla shall have earned a vested undivided
Participating Interest in the Properties subject to the Joint Operating
Agreement by (i) completing all Stage I Earn-in Activities (except the
Feasibility Study) by March 31, 2007, (ii) delivering the Feasibility
Study, (iii) achieving Commercial Production by August 2, 2009, and (iv)
issuing to Great Basin an additional one million (1,000,000) Hecla Mining
Warrants (“Tranche 3”) the date Commercial Production is achieved, in
the form of the Warrant agreement in Exhibit G. The Tranche 3 warrants will be
exercisable at the Exercise Price and in accordance with the terms and
conditions of the Warrant Agreement and dated and priced on the date that Hecla
gives notice under Section 5.4 to Rodeo Creek that Commercial Production has
been achieved. Upon Hecla Ventures vesting: 








          		
       (a)       
               Rodeo Creek shall convey to Hecla Ventures an undivided fifty percent (50%) of
               Rodeo Creek’s interest in the Properties, by executing, acknowledging and
               delivering to Hecla Ventures a good and sufficient conveyance in the form of
               Exhibit C to this Earn-in Agreement; 



               



          		
       (b)       
               Rodeo Creek and Hecla Ventures shall cause to become effective the Joint
               Operating Agreement in the form of the attached Exhibit F, which shall include
               the Properties and shall have an effective date as of the date of the
               above-described vesting; and 



               



          		
       (c)       
               Rodeo Creek shall issue to Hecla Ventures the Great Basin Warrants set forth in
               Exhibit E and H. 



               















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PART IV 



OPERATIONS AND
GOVERNANCE 



        4.1      
Section 9.1(a), Management Committee – Organization and Composition, of the
Earn-In Agreement, is hereby amended by deleting the second sentence of Section 9.1(a) and
substituting the following: 



	  	
“The
Management Committee shall consist of two (2) members appointed by Rodeo Creek, one of
whom shall be Mr. Walter Segsworth or other person acceptable to Hecla, and two (2)
members appointed by Hecla Ventures, one of whom shall be Mr. Art Brown or other person
acceptable to Great Basin.” 






        4.2      
Section 9.5, Parameters for Hecla Ventures’ Earn-in Activities, of the Earn-In
Agreement is hereby amended by deleting the last two sentences thereof and substituting
the following: 



	  	
“Except
as otherwise provided in section 5.1(c), proceeds from all Products (to a maximum of fifty
thousand (50,000) gold ounces or equivalent) produced from the Area of Interest during the
term of this Earn-in Agreement shall be distributed to Hecla Ventures and Rodeo Creek as
follows: (i) one hundred percent (100%) of ounces recovered in connection with Stage I
Earn-in Activities, to Hecla Ventures up to the aggregate of Hecla Ventures’ actual
costs of Stage I Earn-in Activities, not to exceed $21.8 million plus fifteen percent
(15%) and (ii) all other Stage I ounces and all of the ounces recovered in connection with
Stage II Earn-in Activities, as to fifty percent (50%) to each of Hecla Ventures and Rodeo
Creek. All ounces produced after the first 50,000 ounces shall be distributed according to
the Participating Interests of the parties, subject to the Purchase Price Royalty.” 








PART V 



SETTLEMENT OF
LITIGATION AND MUTUAL RELEASES 



        5.1      
On execution of this EIA Amendment, Hecla Ventures and Hecla Mining shall dismiss with
prejudice the legal proceedings initiated by them against Rodeo Creek and Great Basin in
Nevada. By execution hereof, all the Parties agree that there are no longer any
outstanding claims or allegations of default or breaches of the Earn-In Agreement, by or
in respect of any of the Parties, and this EIA Amendment shall constitute a mutual general
release by each of the Parties of each other Party from any action or claim arising to the
date hereof in connection with the Earn-In Agreement. Thereupon, the only rights and
obligations existing between the Parties are as contemplated by the Earn-In Agreement, as
amended by this EIA Amendment. 
















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PART VI 



CONFIRMATION OF OTHER
EARN-IN AGREEMENT TERMS 



        6.1       
In all other respects the representations, warranties and covenants of the Parties
contained in the Earn-in Agreement and the terms and conditions therein provided are
hereby confirmed by the Parties to be in full force and effect, unamended. 



        IN
WITNESS WHEREOF the Parties have executed this EIA Amendment as of the date first above
written. 




	HECLA VENTURES CORP. 		RODEO CREEK GOLD INC.
	 
	By:	/s/ Phillips S. Baker, Jr.		By:	/s/ Ferdi Dippenaar 
		Authorized Signatory			Authorized Signatory
	 
		Phillips S. Baker, Jr.			Ferdi Dippenaar
		Print Name			Print Name
	 
		Director			Director
		Title			Title









        IN
WITNESS WHEREOF the Guarantors have executed this EIA Amendment as of the date first above
written. 



	HECLA MINING COMPANY 		GREAT BASIN GOLD LTD.
	 
	By:	/s/ Phillips S. Baker, Jr.		By:	/s/ Ferdi Dippenaar 
		Authorized Signatory			Authorized Signatory
	 
		Phillips S. Baker, Jr.			Ferdi Dippenaar
		Print Name			Print Name
	 
		President and CEO			President and CEO
		Title			Title