Exploration
Lease Agreement

Lazy Claims 


 


This
Exploration Lease for the Lazy claims (“Agreement”) is made and entered into by and between Tarsis Resources US Inc.,
a Nevada corporation (“Owner”), and Nevada Canyon Gold Corp., a Nevada corporation (“NCG”).


 


Recitals



 


A.
Owner owns the three unpatented lode mining claims situated in Mineral County, Nevada, described as follows: Lazy 1, 2, 3, NMC
854199, 8544200, 8544210 and by this reference incorporated in this Agreement (collectively the “Property”).


 


B.
Owner desires to lease to NCG the Property on the terms and conditions of this Agreement.


 


Now,
therefore, in consideration of their mutual promises, the parties agree as follows:


 


1.
Definitions. The following defined terms, wherever used in this Agreement, shall have the meanings described below:


 


1.1
 “$” or “dollars” shall mean references to the currency of
the United States of America.


 


1.2
 “Effective Date” means August 2, 2017.


 


1.3
 “Governmental Regulations” means all directives, laws, orders, ordinances,
regulations and statutes of any federal, state or local agency, court or office.


 


1.4
 “Gross Returns” means the returns and revenues from the production of
Minerals from the Property as calculated and determined in accordance with Exhibit A attached to this Agreement.


 


1.5
 “Lease Year” means each one (1) year period following the Effective
Date and each anniversary of the Effective Date.


 


1.6
 “Minerals” means all minerals and mineral materials, including, without
limitation, gold, silver, platinum and platinum group metals, base metals (including, for example, antimony, chromium, cobalt,
copper, lead, manganese, mercury, nickel, molybdenum, titanium, tungsten, zinc), and other metals and mineral materials which
are on, in or under the Property.


 


1.7
 “Minimum Payments” means the minimum payments payable by NCG in accordance
with Section 4.1.


 


1.8
 “NCG” means Nevada Canyon Gold Corp., a Nevada corporation, and its
successors and assigns.


 


1.9
“Owner” means Tarsis Resources US Inc., and its successors and assigns.


 



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1.10
 “Property” means the unpatented mining claims situated in Mineral County,
Nevada, more particularly described as the unpatented lode claims Lazy 1, 2, 3, NMC 854199, 8544200, 8544210 in Mineral, County
Nevada.


 


1.11
“Royalty” means the production royalty payable by NCG to Owner in accordance with Section 4.2.


 


2.
Lease and Grant of Rights. Owner leases the Property exclusively to NCG and grants to NCG the rights and privileges
described in this Section.


 


2.1
Lease. Owner leases to NCG and grants to NCG the right to use the Property for the
purposes of exploration for Minerals.


 


2.2
Water Rights. Subject to the regulations of the State of Nevada concerning the appropriation and taking of water,
NCG shall have the right to appropriate and use water, to drill wells for the water on the Property and to lay and maintain
all necessary water lines as may be required by NCG in its operations on the Property.


 


3.
Term. The term of this Agreement shall commence on the Effective Date and shall continue for ten (10) years, subject to
NCG’s right to extend this Agreement for two (2) additional terms of ten (10) years each.


 


4.
Payments. NCG shall make the following payments to Owner:


 


4.1
Annual Minimum Payments. On the Effective Date, NCG shall pay to Owner the sum of one thousand dollars ($1,000.00). On
each subsequent anniversary of the Effective Date, NCG shall pay to Owner the sum of two thousand dollars ($
2,000.00):


 


4.2 Production
Royalty. NCG shall pay to Owner a production royalty (the “Royalty”) based on the Gross Returns from the
production and sale of Minerals from the Property, as further detailed in Exhibit A. The Royalty percentage rate shall be two
percent (2%). If the Royalty payments to Owner are in excess of two thousand dollars ($ 2,000.00) per year, there will be no
minimum annual payment due as described in section 4.1.





 


4.3
Method of Payment. NCG shall pay all payments under this Agreement by wire transfer to an account which Owner designates
..


 


5.
Compliance With The Law. NCG shall, at NCG’s sole cost, comply with all Governmental Regulations relating to the
condition, use or occupancy of the Property by NCG, including but not limited to all exploration and development work
performed by NCG during the term of this Agreement. NCG shall, at its sole cost, promptly comply with all applicable
Governmental Regulations regarding reclamation of the Property. Owner agrees to cooperate with NCG in NCG’s application
for governmental licenses, permits and approvals, the costs of which shall be borne by NCG.


 


6.
NCG’s Work Practices and Reporting. 


 


6.1
Work Practices. NCG shall work the Property in a miner-like fashion.


 



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6.2
Inspection of Data. During the term of this Agreement, Owner and Owner’s representatives shall have the right to
examine and make copies of the technical data regarding the Property in NCG’s possession during reasonable business
hours and upon prior notice, provided, however, that the rights of Owner to examine such data shall be exercised in a manner
that does not interfere with the operations of NCG.


 


6.3
Reports. On or before three (3) months after the end of each Lease Year, NCG shall deliver to Owner digital copies of the
factual data generated during the preceding Lease Year as a result of NCG’s activities conducted on the property,
including information about NCG’s geological, geochemical and geophysical mapping and surveying of the Property,
exploration drilling results and assaying of mineral samples taken from the Property and information about NCG’s
production and sale of Minerals.


 


7.
Scope of Agreement. This Agreement shall extend to and include the unpatented mining claims described in this Agreement
(and any amendments or relocations of the unpatented mining claims), including any unpatented mining claims amended or
located by the parties to fill any fractions or gaps among the unpatented mining claims which constitute the Property or
among the unpatented mining claims and any fee lands adjacent to or near the unpatented mining claims which constitute the
Property. NCG’s obligations under this Section shall not apply to any unpatented mining claims acquired by NCG from an
unaffiliated third party in an arm’s length transaction. NCG agrees and covenants that this Section shall be binding on
NCG and NCG’s affiliates and any assignee of this Agreement and the affiliates of any such assignee.


 


8.
Liens. NCG agrees to pay all indebtedness and liabilities incurred by or for NCG arising from or relating to NCG’s
activities on the Property, except that NCG need not discharge or release any such lien, charge or encumbrance so long as NCG
is contesting the same in good faith, provided that if a judgment is entered which affirms or authorizes foreclosure on the
lien, NCG promptly, and before foreclosure of the lien, shall pay, post a bond to secure payment of the lien, or otherwise
cause the discharge and release of the lien. NCG must comply with the requirements of NRS 108.2403.


 


9.
Taxes. 


 


9.1
Real Property Taxes. Owner shall pay any and all taxes assessed and due against the Property before the Effective Date.
NCG shall pay promptly before delinquency all taxes and assessments, general, special, ordinary and extraordinary, that may
be levied or assessed and due against the Property after the Effective Date and during the term of this Agreement. All such
taxes for the year in which this Agreement is executed and for the year in which this Agreement terminates shall be prorated
between Owner and NCG, except that neither Owner nor NCG shall be responsible for the payment of any taxes which are based
upon income, net proceeds, production or revenues from the Property assessed solely to the other party.


 


9.2
Personal Property Taxes. Each party shall promptly when due pay all taxes assessed against such party’s personal
property, improvements or structures placed or used on the Property.


 









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9.3
Income Taxes. No party shall be liable for any taxes levied on or measured by the other party’s income, net
proceeds or payments under this Agreement or received from the production of minerals from the Property.


 


9.4
Delivery of Tax Notices. If Owner receives tax bills or claims which are NCG’s responsibility, Owner shall promptly
forward them to NCG for payment.


 


10.
Insurance and Indemnity. NCG shall provide, maintain and keep in force comprehensive all risk, public liability insurance
against claims for personal injury, including, without limitation, bodily injury, death or property damage occurring on, in
or about the Property, such insurance to afford immediate minimum protection to a limit of not less than Two Million Dollars
($2,000,000.00) with respect to personal injury or death to any one or more persons or damage to property. NCG shall on
Owner’s request furnish to Owner a certificate of all policies of required insurance which shall identify Owner as a
named or additional insured. Each policy shall contain a provision that the policy will not be cancelled or materially
amended, which terms shall include any reduction in the scope or limits of coverage, without at least fifteen (15)
days’ prior written notice to Owner. If NCG fails to provide, maintain, keep in force or deliver and furnish to Owner
the policies of insurance required under this Section, Owner may, but is not obligated to, procure such insurance or
single-interest insurance for such risks covering Owner’s interest and NCG shall promptly reimburse Owner for all costs
incurred by Owner to obtain the insurance. Owner shall not be liable to NCG and NCG waives all claims against Owner for
injury to or death of any person or damage to or destruction of any personal property or equipment or theft of property
occurring on or about the Property or arising from or relating to NCG’s business conducted on the Property. NCG shall
defend, indemnify and hold harmless Owner and its members, officers, directors, agents and employees from and against any and
all claims, judgments, damage, demands, losses, expenses, costs or liability arising in connection with injury to person or
property from any activity, work, or things done, permitted or suffered by NCG or NCG’s agents, partners, servants,
employees, invitees or contractors on or about the Property, or from any breach or default by NCG in the performance of any
obligation on the part of NCG to be performed under the terms of this Agreement, excluding, however, the negligence of
Owner.


 


11.
Property Maintenance and Work Commitment. 


 


11.1
Annual Assessment Work. To the extent required by law, beginning with the annual assessment work period of September 1,
2017, to September 1, 2018, and for each subsequent following annual assessment work year commencing during the term of this
Agreement, NCG shall perform for the benefit of the Property work of a type customarily deemed applicable as assessment work
and of sufficient value to satisfy the annual assessment work requirements of all applicable federal, state and local laws,
regulations and ordinances, if any, and shall prepare evidence of the same in form proper for recordation and filing, and
shall timely record and/or file such evidence in the appropriate federal, state and local office as required by applicable
federal, state and local laws, regulations and ordinances, provided that if NCG elects to terminate this Agreement more than
two (2) months before the deadline for performance of annual assessment work for the following annual assessment year, NCG
shall have no obligation to perform annual assessment work nor to prepare, record and/or file evidence of the same for the
following annual assessment year.


 









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11.2
Federal Mining Claim Maintenance Fees. If under Governmental Regulations, federal annual mining claim maintenance fees
are required to be paid for the unpatented mining claims which constitute all or part of the Property, beginning with the
annual assessment work period of September 1, 2017, to September 1, 2018, NCG shall pay the federal annual mining claim
maintenance fees no later than two (2) months before the applicable statutory and regulatory deadline, and shall execute and
record or file, as applicable, proof of payment of the federal annual mining claim maintenance fees and of Owner’s
intention to hold the unpatented mining claims which constitute the Property. If NCG elects to terminate this Agreement more
than two (2) months before the deadline for payment of the federal annual mining claim maintenance fees for the following
annual assessment year, NCG shall have no obligation to pay the federal annual mining claim maintenance fees for the Property
for the following assessment year. If NCG does not terminate this Agreement more than two (2) months before the deadline for
payment of the federal annual mining claim maintenance fees for the following annual assessment year, NCG shall pay the
annual maintenance fees for the Property for the following assessment year.


 


12.
Amendment of Mining Laws. The parties acknowledge that legislation for the amendment or repeal of the mining laws of the
United States applicable to the Property has been, and in the future may be, considered by the United States Congress. The
parties desire to insure that any and all interests of the parties in the lands subject to the unpatented mining claims which
comprise all or part of the Property, including any rights or interests acquired in such lands under the mining laws as
amended, repealed or superseded, shall be part of the Property and shall be subject to this Agreement. If the mining laws
applicable to the unpatented mining claims subject to this Agreement are amended, repealed or superseded, the conversion or
termination of Owner’s interest in the Property pursuant to such amendment, repeal or supersession of the mining laws
shall not be considered a deficiency or defect in Owner’s title in the Property, and NCG shall have no right or claim
against Owner resulting from the conversion, diminution, or loss of Owner’s interest in and to the Property, except as
expressly provided in this Agreement. If pursuant to any amendment or supersession of the mining laws Owner is granted the
right to convert its interest in the unpatented mining claims comprising the Property to a permit, license, lease, or other
right or interest, all converted interests or rights shall be deemed to be part of the Property subject to this Agreement.
Upon the grant or issuance of such converted interests or rights, the parties shall execute and deliver an addendum to this
Agreement, in recordable form, by which such converted interests or rights are made subject to this Agreement.


 


13.
Relationship of the Parties. 


 


13.1
No Partnership. This Agreement shall not be deemed to constitute any party, in its capacity as such, the partner, agent
or legal representative of any other party, or to create any joint venture, partnership, mining partnership or other
partnership relationship between the parties.


 


13.2
Competition. Except as expressly provided in this Agreement, each party shall have the free and unrestricted right
independently to engage in and receive the full benefits of any and all business endeavors of any sort outside the Property
or outside the scope of this Agreement, whether or not competitive with the endeavors contemplated under this Agreement,
without consultation with or participation of the other party. In particular, without limiting the foregoing, neither party
to this Agreement shall have any obligation to the other as to any opportunity to acquire any interest, property or right
offered to it outside the scope of this Agreement.


 









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13.3
Limitation. NCG’s performance of its duties and obligations under this Agreement shall not obligate NCG to perform
any additional services to Owner, nor, except as expressly provided in this Agreement, to conduct or to invest any funds of
any nature whatsoever in the exploration of, development or production of minerals on or under the Property. NCG may explore,
conduct geological, geochemical and geophysical investigations, drill, sample or otherwise explore for or develop Minerals in
the manner and to the extent that NCG, in its sole discretion, deems advisable. Only the express duties and obligations
described in this Agreement are binding on NCG and NCG shall have no duties or obligations, implied or otherwise, to explore
for, develop or mine minerals. Owner acknowledges that NCG’s express undertakings under this Agreement and the Minimum
Payments are in lieu of any implied duties or obligations.


 


14.
Inspection. Owner or Owner’s duly authorized representatives shall be permitted to enter on the Property and NCG’s
workings at reasonable times and on five (5) days’ advance notice to NCG for the purpose of inspection, but they shall enter
on the Property at their own risk and in such a manner which does not unreasonably hinder, delay or interfere with NCG’s
operations. If NCG is conducting exploration, development or mining during Owner’s inspection, Owner agrees that Owner will
comply with all of NCG’s safety rules and regulations, including the requirement that Owner and Owner’s representatives
be accompanied by NCG’s representatives during the inspection.


 


15.
Representations.


 


15.1
Title. Except as expressly provided in this Agreement, Owner represents to Owner’s knowledge and belief as follows:
(a) the unpatented mining claims which are part of the Property were properly located in accordance with applicable federal
and state laws and regulations; (b) the unpatented mining claims which are part of the Property are in good standing; and (c)
subject to the paramount title of the United States, the unpatented mining claims are free and clear of adverse claims,
liens, encumbrances, or royalties.


 


15.2 Lesser
Interest. If Owner owns an interest in the Property which is less than the entire and undivided estate in the Property,
the Minimum Payments and the Purchase Price shall not be reduced, however, the Royalty payments shall be reduced
proportionately in accordance with the nature and extent of Owner’s interest such that the Royalty payments shall be
paid to Owner only in the proportion that Owner’s interest bears to the entire and undivided estate in the portion of
the Property from which Minerals are produced.


 


15.3
Escrow for Disputes. If at any time a third party asserts a claim of ownership in the Property or the Minerals which is
adverse to the interest of Owner or NCG, or if NCG is advised by legal counsel for NCG that it appears that a third party may
have such a claim, NCG may deposit any payments which would otherwise be due to Owner into escrow and give notice of such
deposit to Owner. In the event of a dispute as to ownership of the Property, the Minerals, the surface of the Property, or
the Royalty, payment of the Royalty payments may be deferred until twenty (20) days after NCG is furnished satisfactory
evidence that such dispute has been finally settled and all provisions as to keeping this Agreement in force shall relate to
such extended time for payment.


 









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16.
Covenants, Warranties and Representations. Each of the parties covenants, warrants and represents for itself as
follows:


 


16.1
Compliance with Laws. That it has complied with all applicable laws and regulations of any governmental body, federal,
state or local, regarding the terms of and performance of its obligations under this Agreement. Each party shall maintain its
standing as a business entity in accordance with the laws of the jurisdiction of its organization.


 


16.2
No Pending Proceedings. That there are no lawsuits or proceedings pending or threatened which affect its ability to
perform the terms of this Agreement.


 


16.3
Costs. That it shall pay all costs and expenses incurred or to be incurred by it in negotiating and preparing this
Agreement and in closing and carrying out the transactions contemplated by this Agreement.


 


16.4
Brokers. That it has had no dealings with any agent, broker or finder in connection with this Agreement, and shall
indemnify, defend and hold the other party harmless from and against any claims that may be asserted through such party that
any agent’s broker’s or finder’s fee is due in connection with this Agreement. 


 


16.5 Patriot
Act. That it is not on the Specially Designated National & Blocked Persons List of the Office of Foreign Assets
Control of the United States Treasury Department and is not otherwise blocked or banned by any foreign assets office rule or
any other law or regulation, including the USA Patriot Act or Executive Order 13224.


 


17. 
Termination by Owner. Any failure by NCG to perform any of its covenants, liabilities, obligations or
responsibilities under this Agreement shall be a default. Owner may give NCG written notice of a default. If a payment
default is not remedied within five (5) days after receipt of the notice or any other default is not remedied within thirty
(30) days after receipt of the notice, provided the default can reasonably be cured within that time, or, if not, if NCG has
not within that time commenced action to cure the same or does not after such commencement diligently prosecute such action
to completion, Owner may terminate this Agreement by delivering notice to NCG of Owner’s termination of this Agreement,
provided that if NCG contests Owner’s notice of default or Owner’s assertion that NCG has not timely cured or
commenced action to cure the alleged default, Owner may not terminate this Agreement unless and until issues of the alleged
default and failure to cure the alleged default had been determined by a court of competent jurisdiction. In such case, NCG
shall have such time as provided by the decree or order of the court having jurisdiction of the dispute concerning the
alleged default or failure to cure the alleged default. On termination of this Agreement based on NCG’s default, within
ten (10) days NCG shall execute and deliver to Owner a release and termination of this Agreement in form acceptable for
recording.


 


18.
Termination and Surrender of Mining Claims by NCG. NCG may at any time terminate this Agreement by giving written notice
to Owner. If NCG terminates this Agreement, NCG shall perform all obligations and pay all payments which accrue or become due
before the termination date. On NCG’s termination of this Agreement, within ten (10) days NCG shall execute and deliver
to Owner a release and termination of this Agreement in form acceptable for recording.


 









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19.
Force Majeure. Each party’s obligations under this Agreement shall be suspended during the time and to the extent
such party is prevented from compliance, in whole or in part, by war or war conditions (actual or potential), earthquake,
fire, flood, strike, labor stoppage, accident, riot, unavoidable casualty, act or restraint, present or future, or any lawful
authority, statute, act of God, act of public enemy, inability to obtain or delays in obtaining governmental approvals,
consents, licenses or permits (including any of the foregoing relating to the change of the use or points of diversion and
use of water resources), labor or transportation, or other delays or cause of the same or other character beyond the
reasonable control of such party. If a party invokes force majeure, it shall notify the other party in writing within ten
(10) days of the force majeure event and shall diligently attempt to cure, end or remediate the force majeure event. A party
claiming force majeure shall notify the other party in writing within ten (10) days of termination of the force majeure
event.


 


20.
Surrender of Property. On expiration or termination of this Agreement, NCG shall surrender the Property promptly to Owner
and at NCG’s sole cost shall remove from the Property all of NCG’s buildings, equipment and structures. NCG shall
reclaim the Property in accordance with all applicable Governmental Regulations.


 


21.
Data. Promptly following the parties’ execution of this Agreement, Owner shall deliver to NCG copies of all of the
technical and title data Owner possesses regarding the Property and the Area of Interest. Within thirty (30) days following
termination of this Agreement, NCG shall deliver to Owner copies of the technical data regarding the Property in NCG’s
possession at the time of termination which before termination NCG has not furnished to Owner. At Owner’s election, NCG
shall deliver to Owner NCG’s core, cuttings, sample splits, and sample pulps from the Property.


 


22.
Confidentiality. The data and information, including the terms of this Agreement, coming into the parties’
possession by virtue of this Agreement shall be deemed confidential and shall not be disclosed to outside third parties
except as may be required to publicly record or protect title to the Property or to publicly announce and disclose
information under Governmental Regulations or under the rules and regulations of any stock exchange on which the stock of a
party, or the parent or affiliates of a party, is listed. If a party negotiates for a transfer of all or any portion of such
party’s interest in the Property or under this Agreement or negotiates to procure financing or loans relating to the
Property, in order to facilitate any such negotiations such party shall have the right to furnish information to third
parties, provided that each third party to whom the information is disclosed agrees to maintain its confidentiality in the
manner provided in this Section.


 









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23. Assignment.


 


23.1
NCG’s Assignment. NCG shall not assign, convey, encumber, sublease, grant any concession, or license or otherwise
transfer to a third party (each a “Transfer”) all or any part of its interest in this Agreement or the Property,
without, in each case, Owner’s prior written consent, which shall not be withheld unreasonably. Owner shall have the
right to consider the proposed transferee’s financial, legal, operating and technical expertise and history when
determining the suitability of the transferee as the lessee under this Agreement. Owner shall respond to NCG’s request
for consent within ten (10) days following Owner’s receipt of NCG’s request, and if Owner does not timely inform
NCG that Owner does not consent to the proposed Transfer, Owner shall be deemed to have approved the Transfer. Each
transferee of any interest in this Agreement shall execute and deliver an instrument by which the transferee agrees to assume
and perform the obligations of the assignor under this Agreement.


 


23.2
Owner’s Assignment. Owner shall have the right to assign or otherwise transfer all or any part of its interest in
this Agreement or the Property. No change in ownership of Owner’s interest in the Property shall affect NCG’s
obligations under this Agreement unless and until Owner delivers and NCG receives copies of the documents which demonstrate
the change in ownership of Owner’s interest. Until NCG receives Owner’s notice and the documents required to be
delivered under this Section, NCG may continue to make all payments under this Agreement as if the transfer of Owner’s
Ownership interest had not occurred. No division of Owner’s ownership as to all or any part of the Property shall
enlarge NCG’s obligations or diminish NCG’s rights under this Agreement.


 


24.
Memorandum Agreement. The parties shall execute and deliver a memorandum of this Agreement. The execution of the
memorandum shall not limit, increase or in any manner affect any of the terms of this Agreement or any rights, interests or
obligations of the parties.


 


25.
Notices. Any notices required or authorized to be given by this Agreement shall be in writing and shall be sent either by
commercial courier, facsimile, or by certified U.S. mail, postage prepaid and return receipt requested, addressed to the
proper party at the address stated below or such address as the party shall have designated to the other parties in
accordance with this Section. Such notice shall be effective on the date of receipt by the addressee party, except that any
facsimiles received after 5:00 p.m. of the addressee’s local time shall be deemed delivered the next day.


 


	If
    to Owner:	Tarsis
    Resources US Inc. 
	 	c/o
    Alianza Minerals Ltd 
	 	410-325
    Howe St 
	 	Vancouver,
    B.C. Canada V6C1Z7
	 	 
	If
    to NCG:	Nevada
    Canyon Gold Corp 
	 	316
    California Avenue #543 
	 	Reno,
    NV 89501 


 


26.
Binding Effect of Obligations. This Agreement shall be binding upon and inure to the benefit of the respective
parties and their successors or assigns.


 


27.
Entire Agreement. The parties agree that the entire agreement between them is written in this Agreement and in
a memorandum of agreement of even date. There are no terms or conditions, express or implied, other than expressly stated
in this Agreement. This Agreement may be amended or modified only by a written instrument signed by the parties with the
same formality as this Agreement.


 









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28.
Governing Law and Forum Selection. This Agreement shall be construed and enforced in accordance with the laws of
the State of Nevada. The forum for any action regarding the construction or enforcement of this Agreement shall be the
Second Judicial District Court, Washoe County, Reno, Nevada. 


 


29.
Multiple Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be
an original, but all of which shall constitute the same Agreement.


 


30.
Severability. If any part, term or provision of this Agreement is held by a court of competent jurisdiction to be illegal
or in conflict with any Governmental Regulations, the validity of the remaining portions or provisions shall not be affected,
and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be invalid. The parties have executed this Agreement effective as of the Effective
Date.


 


Tarsis
Resources US Inc.


 


	By:	/s/
    Jason Webber	 
	Name:	
    Jason Webber`	 
	Title:	President & CEO	 


 


Nevada
Canyon Gold Corp.


 


	By:	/s/
    Jeffrey Cocks	 
	Name:	
    Jeffrey Cocks	 
	Title: 	President & CEO	 



 

















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Exhibit
A 


 


Gross
Returns

Lazy Claims 


 


	Payor:	Nevada Canyon Gold Corp. 








 






	Recipient:		 







 


1.
Definitions. The terms defined in the instrument to which this Exhibit is attached and made part of shall have the same
meanings in this Exhibit. The following definitions shall apply to this Exhibit.


 


1.1
“Gross Returns” means all income and revenues accrued, received, and realized by Payor from the production of
Minerals and products of Minerals from the Property.


 


1.2 “Property”
means the real property described in the instrument to which these Gross Returns provisions are attached and made a
part. 


 


2.
Payment Procedures. 


 


2.1
Accrual of Obligation. Payor’s obligation to pay the royalty shall accrue and become due and payable upon the sale
or shipment from the Property of unrefined metals, dore metal, concentrates, ores or other Minerals or Minerals products or,
if refined metals are produced, upon the outturn of refined metals meeting the requirements of the specified published price
to Payor’s account.


 


2.2
Futures or Forward Sales, Etc. Gross Returns shall be determined irrespective of any actual arrangements for the sale or
other disposition of Minerals by Payor, specifically including but not limited to forward sales, futures trading or
commodities options trading, and any other price hedging, price protection, and speculative arrangements that may involve the
possible delivery of gold, silver or other metals produced from Minerals.


 


2.3
Quarterly Calculations and Payments. The Royalty shall be determined on a quarterly basis. Payor shall pay Recipient each
quarterly royalty payment on or before the last business day of the quarter immediately following the quarter in which the
royalty payment obligation accrued. Payor acknowledges that late payment by Payor to Recipient of royalty payments will cause
Recipient to incur costs, the exact amount of which will be difficult to ascertain. Accordingly, if any amount due and
payable by Payor is not received by Recipient within ten (10) days after such amount is due, then Payor shall pay to
Recipient a late charge equal to ten percent (10%) of such overdue amount. Recipient’s acceptance of such late charge
shall not constitute a waiver of Payor’s default with respect to such overdue amount, nor prevent Recipient from
exercising any of Recipient’s other rights and remedies. If any amount payable by Payor remains delinquent for a period
in excess of thirty (30) days, Payor shall pay to Recipient, in addition to the late payment, interest from and after the due
date at the statutory interest rate.


 









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2.4
Statements. At the time of payment of the royalty, Payor shall accompany such payment with a statement which shows in
detail the quantities and grades of refined gold, silver or other metals or dore, concentrates or ores produced and sold or
deemed sold by Payor in the preceding quarter. Payor shall pay the Royalty by wire transfer to an account which Recipient
designates.


 


2.5
Audit. Upon reasonable notice and at a reasonable time, the Recipient shall have the right to audit and examine the
Payor’s accounts and records relating to the calculation of the Gross Returns Royalty payments. If such audit
determines that there has been a deficiency or an excess in the payment made to Recipient, such deficiency or excess shall be
resolved by adjusting the next monthly royalty payment due Recipient. Recipient shall pay all costs of such audit unless a
deficiency of three percent (3%) or more of the royalty payment due for the calendar month in question is determined to
exist. All books and records used by Payor to calculate the Royalty payments shall be kept in accordance with generally
accepted accounting principles applicable to the mining industry.


 


2.6
Sampling and Commingling. Payor shall have the right to commingle Minerals and ores from the Property and materials from
other properties, provided, that Payor first informs Recipient, in writing, of Payor’s intention to commingle and
delivers to Recipient a detailed written description of Payor’s commingling plan. Recipient shall have ninety (90) days
during which to review, comment on and approve Payor’s proposed commingling plan. In any and all events, all Minerals
and ores shall be measured and sampled by Payor in accordance with sound mining and metallurgical practices for metal and
mineral content before commingling of any such Minerals or ores with materials from any other property. Representative
samples of materials from the Property intended to be commingled shall be retained by Payor, and assays of these samples
shall be made before commingling to determine the metal content of each ore. Detailed records shall be kept by Recipient
showing measurements, assays of metal content and gross metal content of the materials from the Property are commingled.
Payor shall prepare and maintain records of the production of Minerals from the Property, assays of samples taken from the
Property and all other records reasonably necessary to accurately account for the production of Minerals from the
Property.


 


2.7
Royalty as Burden on the Property. The Royalty shall be a burden on, an interest in, and a covenant which runs with the
Property. The Royalty shall be prior and superior to any interest in the Property or the Agreement of which this Royalty
provision is a part which Payor grants to any third party. Payor agrees and covenants that at Recipient’s request,
Payor, Recipient, and Payor’s refiner or smelter shall enter into an agreement pursuant to which the Royalty shall be
deposited or paid directly to an account in Recipient’s name with the refiner or smelter.


 









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