Document:

Exhibit 10.51

 

	
AGREEMENT FOR

AMENDMENT AND RESTATEMENT

OF

ROYALTY FOR TECHNICAL EXPERTISE

 

                This AGREEMENT FOR AMENDMENT   AND RESTATEMENT OF ROYALTY FOR TECHNICAL EXPERTISE (“this RTE Agreement”)   effective as of the 27th day of May, 2011, is made and entered into   by and among Minas de Oro Nacional S.A. de C.V. (“MON”), formerly known as   O.N.C. de Mexico S.A. de C.V. (“ONCM”), and RG Mexico, Inc., a Delaware   corporation (“Royal”).

 

Recitals

 

A.            A Royalty for Technical Expertise   Agreement dated March 23, 2001 (“Original RTE Agreement”) was executed   and delivered by ONCM, granting to Minera San Augusto, S.A. de C.V. (“MSA”) a   royalty for technical expertise equal to 2.0% of Net Smelter Returns on all   ores, minerals, or other commercially valuable products (“Products”) mined   from property within certain mineral exploitation concessions generally known   as the Mulatos Project (“Property”) defined in more detail below (“Original   RTE”).

 

 

 

B.            The parties to the Original RTE   Agreement intended that the Property was to be pledged as collateral for   payment of the Original RTE, among other obligations.

 

C.            Pursuant to an Assignment and   Assumption Agreement dated March 23, 2001 between MSA, as assignor, and   Kennecott Minerals Company (“KMC”) and Tenedoramex, S.A. de C.V. (“T-Mex”) as   assignees (the “MSA Assignment”), KMC became the owner of a 30% interest in   the Original RTE, T-Mex became the owner of a 70% interest in the Original   RTE, and MSA ceased to own any interest in the Original RTE.

 

 

 

D.            The Original RTE and the MSA   Assignment were registered at number 74, pages 40 and 41, volume 13 of   the Mining Acts, Contracts, and Agreements Book, at the Registry of Mines.

 

E.             ONCM changed its name to MON and   the name change was registered at number 137, page 69, volume XXXVII of   the Mining Corporations Book, at the Registry of Mines.

 

F.             On or near August 21, 2001,   ONCM (now known as and referred to herein as “MON”), T-
    	
 
    	
CONVENIO
   MODIFICATORIO Y DE REFORMULACIÓN
   DE  
   REGALÍAS POR EXPERIENCIA TÉCNICA

 

                CONVENIO   MODIFICATORIO Y DE REFORMULACIÓN DE REGALÍAS POR EXPERIENCIA TÉCNICA (el   “Convenio RTE”) que entra en vigor el 27 de mayo de 2011, celebrado entre   Minas de Oro Nacional S.A. de C.V. (“MON”), anteriormente conocido como   O.N.C. de México S.A. de C.V. (“ONCM”), y RG México, Inc., sociedad de   Delaware (“Royal”).

 

 

Declaraciones

 

A.            ONCM   celebró y entregó un Contrato de Regalía por Experiencia Técnica el 23 de   marzo de 2001 (el “Contrato de RTE Original”), otorgándole a Minera San   Augusto, S.A. de C.V. (“MSA”) una regalía por experiencia técnica equivalente   a 2.0% de los Rendimientos Netos de Fundición sobre todas las menas,   minerales y otros productos comercialmente valiosos (los “Productos”) que se   extraen de las minas que se encuentran dentro de las concesiones de   explotación mineras generalmente conocidas como el Proyecto de Mulatos (la   “Propiedad”) que se define más a detalle a continuación (el “RTE Original”).

 

B.            Las   partes del Contrato de RTE Original desean que la Propiedad se otorgue en   prenda como colateral del pago del RTE Original, entre otras obligaciones.

 

C.            De   acuerdo con el Contrato de Cesión y Aceptación de fecha 23 de marzo de 2001   celebrado entre MSA, como otorgante, y Kennecott Minerals Company (“KMC”) y   Tenedoramex, S.A. de C.V. (“T-Mex”) como cesionarios (la “Cesión de MSA”),   KMC se convertirá en el propietario de una participación del 30% en el RTE   Original, T-Mex se convertirá en el propietario de una participación del 70%   en el RTE Original, y MSA dejó de poseer participaciones en el RTE Original.

 

D.            El   RTE Original y la Cesión de MSA se registraron bajo el número 74, foja s 40 y   41, volumen 13 de las Leyes Mineras, Contratos y Libros de Acuerdos, en el   Registro de Minas.

 

E.             ONCM   cambió su denominación a MON y el cambio de nombre se registró bajo el número   137, foja 69, volumen XXXVII del Libro de Sociedades Mineras, en el Registro   de Minas.

 

F.             El   21 de agosto de 2001 o aproximadamente esa fecha, ONCM (conocido en el
    

 

 

	
Mex   and KMC amended the Original RTE Agreement to grant (a) a royalty for   technical expertise of 2.0% of Net Smelter Returns on Products, other than   Gold and Silver Products; and (b) a sliding scale royalty on Net Smelter   Returns on Gold and Silver Products, in each case as those capitalized terms   are defined herein, by executing a revised Royalty for Technical Expertise   Agreement, dated as of March 23, 2001 (the “March 23, 2001   Amendment to RTE”).

 

 

 

G.            T-Mex assigned its interest in the   Original RTE, as amended, to Placer Exploration Mexico Ltd. (“Placer Mexico”)   by Assignment Agreement dated June 10, 2003 (the “T-Mex Assignment”).

 

H.            KMC sold, assigned and conveyed   all of KMC’s interest in the Original RTE, as amended, to Royal   Gold, Inc., a Delaware corporation, on December 28, 2005 (the “KMC   Assignment”).

 

I.              The Original RTE Agreement, as   amended by the March 23, 2001 Amendment to RTE, was further amended by a   First Amendment to Royalty for Technical Expertise dated March 31, 2006,   executed by MON, Placer Mexico and Royal Gold, Inc. (the Original RTE   Agreement as amended by said amendments being referred to herein as the   “Amended RTE Agreement,” and the Original RTE as amended by the Amended RTE   Agreement being referred to herein as the “Amended RTE”).

 

J.             Placer Mexico assigned its   interest in the Amended RTE to Barrick Gold Corporation (“Barrick”) by   Royalty Conveyance dated March 31, 2008 (the “Placer Mexico   Assignment”), which interest was further conveyed by Barrick to Royal by   Royalty Assignment Agreement dated October 1, 2008 (the “Barrick   Assignment”).

 

 

K.            Royal Gold, Inc. sold, assigned   and conveyed all of its interest in the Amended RTE to Royal on   October 22, 2008 (the “Royal Gold Assignment”).

 

L.             By virtue of the foregoing   assignments, Royal owns on the date hereof a one hundred percent (100%)   interest in and to the Amended RTE (herein now referred to as the “RTE”).

 

 

M.           The RTE continues in full force and   effect as between MON and Royal, and is restated in its entirety as set forth   in this RTE Agreement.
    	
 
    	
presente como “MON”), T-Mex y KMC modificaron el   Contrato de RTE Original para otorgar (a) una regalía por experiencia   técnica de 2.0% de los Rendimientos de Fundición Netos sobre los Productos,   que no sean Productos de Oro y Plata; y (b) una regalía de escala  sobre los Rendimientos de Fundición Netos   de los Productos de Oro y Plata, en cada caso según esos términos con   mayúscula inicial se definen en el presente, al celebrar un Contrato de   Regalía por Experiencia Técnica revisado, de fecha 23 de marzo de 2001 (la   “Modificación del 23 de Marzo de 2001 al RTE”).

 

G.            T-Mex   cedió su participación en el RTE Original, y sus modificaciones, a Placer   Exploration México Ltd. (“Placer México”) mediante un Contrato de Cesión de   fecha 10 de junio de 2003 (la “Cesión T-Mex”).

 

H.            KMC   vendió, cedió y traspasó toda la participación de KMC en el RTE Original, y   sus modificaciones, a Royal Gold, Inc., sociedad de Delaware, el 28 de   diciembre de 2005 (la “Cesión KMC”).

 

I.              El   Contrato de RTE de Original, modificado por la Modificación del 23 de Marzo   de 2001 al RTE, fue modificado, además, por la Primera Modificación a la   Regalía por Experiencia Técnica de fecha 31 de marzo de 2006, celebrada por   MON, Placer México y Royal Gold, Inc. (el Contrato de RTE Original   modificado por esas modificaciones en lo sucesivo el “Contrato de RTE   Modificado”, y el RTE Original, modificado por el Contrato de RTE Modificado   denominado en el presente el “RTE Modificado”).

 

J.             Placer   México cedió su participación en el RTE Modificado a Barrick Gold Corporation   (“Barrick”) a través de un Traspaso de Regalías de fecha 31 de marzo de 2008   (la “Cesión de Placer México”), cuya participación fue traspasada   adicionalmente por Barrick a Royal mediante un Contrato de Cesión de Regalías   de fecha 1 de octubre de 2008 (la “Cesión de Barrick”).

 

K.            Royal   Gold, Inc. vendió, cedió y traspasó todas sus participaciones en el RTE   Modificado a Royal el 22 de octubre de 2008 (la “Cesión de Royal Gold”).

 

L.             En   virtud de las cesiones anteriores, Royal posee, a la fecha del presente una   participación del 100% (cien por ciento) sobre el RTE Modificado (denominado   en el presente como “RTE”).

 

M.           El   RTE continúa en vigor y efecto entre MON y Royal, y se reexpresó en su   totalidad de acuerdo con lo estipulado en este Contrato RTE.
    

 

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N.            The parties, by this instrument,   desire to confirm, amend, restate and register the RTE, the assignments of   the KMC interest in the RTE to Royal Gold, Inc. pursuant to the KMC   Assignment and to Royal pursuant to the Royal Gold Assignment, and the   assignments of the T-Mex interest in the RTE to Placer Mexico pursuant to the   T-Mex Assignment, to Barrick pursuant to the Placer Mexico Assignment, and to   Royal pursuant to the Barrick Assignment.

 

NOW   THEREFORE, FOR Ten Dollars ($10.00) now delivered each party unto the other   and other good and valuable consideration, the receipt and sufficiency of   which are hereby acknowledged, the parties agree as follows:

 

 

ARTICLE I.

Amendment

 

The Amended RTE Agreement is hereby amended and restated in its   entirety as follows:

 

 

1.1           From the date of   Commencement of Commercial Production until such time as the first 2,000,000   ounces of gold have been mined, processed and sold (or deemed sold) from the   Property, MON shall pay Royal the RTE, equal to (in cumulative amount):

 

(a)           2% of the Net Smelter Returns in respect of all Products   mined and sold (or deemed sold) by MON from the Property; and

 

 

(b)           the applicable percentage based upon the Gold Price as   published in The Wall Street Journal for the   calendar quarter in which the royalty is payable of the Net Smelter Returns   in respect of all Silver and Gold Products mined and sold (or deemed sold) by   MON from the Property as follows:
    	
 
    	
N.            Las   partes, mediante este instrumento, desean confirmar, modificar, reformular y   registrar el RTE, las cesiones de la participación de KMC en el RTE a Royal   Gold, Inc. de acuerdo con la Cesión KMC y a Royal de acuerdo con la   Cesión de Royal Gold, y las cesiones de la participación de T-Mex en el RTE a   Placer México de acuerdo con la Cesión T-Mex, a Barrick de acuerdo con la   Cesión de Placer México, y a Royal de acuerdo con la Cesión de Barrick.

 

AHORA POR LO TANTO, por la contraprestación de   USD$10.00 (diez dólares) que cada una de las partes se entrega como una   contraprestación válida y onerosa, cuyo recibo y suficiencia se acusan en   este acto, las partes convienen sujetarse al tenor de lo siguiente:

 

CLÁUSULA I.

Modificación

 

El Contrato de RTE Modificado   por este acto se modifica y reformula en su totalidad de la siguiente forma:

 

1.1           A partir de la fecha del Inicio de la Producción   Comercial hasta la fecha en que las primeras 2,000,000 de onzas de oro se   hayan extraído de la mina, procesado y vendido (o que se consideren vendidas)   de la Propiedad, MON pagará a Royal el RTE, el equivalente a (en un monto acumulativo):

 

(a)           2% de los Rendimientos de Fundición   Netos respecto de los Productos extraídos de la mina y vendidos (o que se   consideren vendidos) por MON de la Propiedad; y

 

(b)           el porcentaje aplicable con base en   el Precio del Oro publicado en The Wall Street Journal para el trimestre calendario en el   que se pague la regalía de los Rendimientos de Fundición Netos respecto de   todos los Productos de Plata y Oro que se extraigan de la mina y se vendan (o   que se consideren vendidos) por MON de la Propiedad de la siguiente forma:
    

 

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Gold Price Range
    	
 
    	
Net Smelter Return
   Royalty
   100% Basis
    	
 
    	
Rango de Precio del Oro
    	
 
    	
Regalía de
   Rendimiento de
   Fundición Neto
   Sobre una Base del
   100%
    
	
US$0.00/oz   to US$299.99/oz
    	
 
    	
1.0%
    	
 
    	
US$0.00/oz a US$299.99/oz
    	
 
    	
1.0%
    
	
US$300.00/oz   to US$324.99/oz
    	
 
    	
1.5%
    	
 
    	
US$300.00/oz a   US$324.99/oz
    	
 
    	
1.5%
    
	
US$325.00/oz   to US$349.99/oz
    	
 
    	
2.0%
    	
 
    	
US$325.00/oz a   US$349.99/oz
    	
 
    	
2.0%
    
	
US$350.00/oz   to US$374.99/oz
    	
 
    	
3.0%
    	
 
    	
US$350.00/oz a   US$374.99/oz
    	
 
    	
3.0%
    
	
US$375.00/oz   to US$399.99/oz
    	
 
    	
4.0%
    	
 
    	
US$375.00/oz a   US$399.99/oz
    	
 
    	
4.0%
    
	
US$400.00/oz   or higher
    	
 
    	
5.0%
    	
 
    	
US$400.00/oz o mayor
    	
 
    	
5.0%
    

 

 

	
1.2           For the purposes   of this RTE Agreement:

 

(a)         “Allowable Deductions”   means the following costs incurred after the doré or concentrate stage:

 

(i)        all smelting and refining costs, sampling, assaying and   treatment charges and penalties including, but not limited to, metal losses,   penalties for impurities and charges for refining, selling and handling by   the smelter, refinery or other purchaser (including price participation   charges by smelters and/or refiners);

 

 

 

 

(ii)       costs of handling, transporting, securing   (security costs) and insuring such material from the Property or from a   concentrator, whether situated on or off the Property, to the place of sale;

 

 

(iii)  taxes based upon sales or production which   cannot be recovered by MON, but not income taxes; and

 

 

(iv)  marketing costs, including sales   commissions, incurred in selling ore, concentrate and metal produced from the   Property,

 

 

provided   that if Products are deemed to have been sold, Allowable Deductions shall include   amounts representing the
    	
 
    	
1.2           Para efectos de este Contrato de RTE:

 

(a)           “Deducciones   Permisibles” significan los siguientes costos incurridos después   de la etapa de dorado o concentrado:

 

(i)       todos los costos de fundición y   refinanciamiento, muestreo, ensayos y cargos de tratamiento así como las   penalizaciones incluyendo, de manera enunciativa mas no limitativa, pérdidas   de metal, penalizaciones por impurezas y cargos por refinación, venta y   manejo por parte del fundidor, la refinería u otro comprador (incluyendo los   cargos de participación de precios por los fundidores y/o refinadores);

 

(ii)      los costos de manejo, transporte,   aseguramiento (costos de seguridad) y aseguramiento de ese material de la   Propiedad o de un concentrador, sea ubicado dentro o fuera de la Propiedad,   al lugar de venta;

 

(iii)     los impuestos con base en las ventas o   producción que no puedan ser recuperados por MON, pero que no sean impuestos   sobre la renta; y

 

(iv)     los costos de comercialización,   incluyendo comisiones de venta, incurridos en la venta de menas, concentrados   y metales producidos de la Propiedad,

 

en la inteligencia que si se considera que los   Productos se han vendido, las Deducciones Permisibles incluirán los 
    

 

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items   enumerated above to the extent that they would have been borne by MON had the   Products actually been sold.

 

 

(b)         “Commencement of   Commercial Production” means April 1, 2006.

 

(c)         “Final Settlement Date”   means the date on which refined gold or silver is available to MON.

 

(d)         “Gold and Silver Products”   means ores, minerals, or other commercially valuable products containing gold   or silver mined from the Property, provided that where such products contain   a combination of gold or silver and other commercially valuable metals or   minerals, Gold and Silver Products shall be deemed to comprise only that   fraction of such products as represents the proportionate commercial value of   the gold and silver contained in such products, with the remaining fraction   of such products deemed to be Products (as such term is defined herein).

 

 

(e)         “Gold Price”   means the price per ounce equal to the average London Bullion Market   Association afternoon gold price fix as published in The Wall   Street Journal for the calendar quarter in which the royalty is   payable.

 

 

(f)          “Net Smelter Returns”   means:

 

 

(i)        in the case of gold or silver processed by a refinery, an   amount equal to the number of ounces credited to MON by the refinery on the   Final Settlement Date multiplied by the Gold Price in the case of ounces of   gold credited to MON, or the Silver Price in the case of ounces of silver   credited to MON, less Allowable Deductions; and

 

 

(ii)           in   all other cases, the amount received by MON from the buyer of the Products   (or, if such Products are deemed to be sold, an amount 
    	
 
    	
montos que representen las partidas enumeradas   anteriormente en la medida que habrían sido sufragadas por MON si los   Productos se hubieran vendido realmente.

 

(b)           “Inicio de   la Producción Comercial” significa el 1 de abril de 2006.

 

(c)           “Fecha de   Acuerdo Final” significa la fecha en la que el oro o la plata   refinada esté disponible para MON.

 

(d)           “Productos   de Oro y Plata” significan menas, minerales u otros productos   comercialmente valiosos que contengan oro o plata extraídos de la mina de la   Propiedad, en la inteligencia que esos productos contengan una combinación de   oro o plata y otros metales o minerales comercialmente valiosos, se   considerará que los Productos de Oro y Plata abarcan únicamente esa fracción   de esos productos que represente el valor comercial proporcional del oro y la   plata incluidos en esos productos, y la fracción restante de esos productos   se considerará Productos (según ese término se define en el presente).

 

(e)           “Precio del   Oro” significa el precio por onza equivalente al precio del oro de   medio día de London Bullion Market Association establecido como se publica en   el The Wall Street Journal para el   trimestre calendario en el que se paga la regalía.

 

(f)            “Rendimientos   de Fundición Netos” significa:

 

(i)       en el caso del oro o la plata procesada   por una refinería, un monto equivalente al número de onzas acreditado a MON   por parte de la refinería en la Fecha de Acuerdo Final multiplicado por el   Precio del Oro en el caso de las onzas de oro acreditadas a MON, o el Precio   de la Plata en el caso de las onzas de plata acreditadas a MON, menos las   Deducciones Permisibles; y

 

(ii)      en todos los demás casos, el monto   recibido por MON del comprador de los Productos (o, si los Productos se   consideran
    

 

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equal to the market value thereof f.o.b. the plant   producing the same (which amount shall be deemed to have been received by MON)), less Allowable   Deductions.

 

 

(g)         “Original Asset Purchase   Agreement” means the Asset Purchase Agreement dated as of December 21,   2000 between and among MSA, ONCM, and National Gold Corporation (as amended   by the Amendment to Asset Purchase Agreement dated March 23, 2001 and   the Second Amendment Agreement dated August 21, 2001).

 

 

(h)         “Products”   means ores, minerals, or other commercially valuable products, except any   fraction thereof comprising or deemed to comprise Gold and Silver Products,   mined from the Property.

 

 

(i)          “Property”   means the property covered by the mining concessions listed in Exhibit A   to this RTE Agreement, which is incorporated by reference, and including   renewals and restaking of the area encompassed by those mining concessions.

 

 

(j)            “RTE” means the royalty for technical expertise as a result   of MSA providing geological and technical information on the Mulatos Project   to ONCM, now MON, created by the Original RTE Agreement, as amended by the   Amended RTE Agreement, and as restated in this RTE Agreement.

 

 

(k)           “Silver Price” means the price per ounce equal to the   average London Bullion Market Association daily silver price fix as published   in The Wall Street Journal for the   calendar quarter in which the royalty is payable.

 

1.3           For the purposes of determining Net Smelter Returns, all   receipts and disbursements in currency other than United States currency shall   be converted into United States currency on the day of receipt or   disbursement, as the case may be.
    	
 
    	
vendidos, un monto   equivalente a su valor de mercado franco a bordo (f.o.b), la planta que lo   produce (monto que se considerará recibido por MON)), menos las Deducciones   Permisibles.

 

(g)           “Contrato   de Compra de Activos Original” significa el Contrato de Compra de   Activos de fecha 21 de diciembre de 2000 entre MSA, ONCM y National Gold   Corporation (modificado por la Modificación al Contrato de Compra de Activos   de fecha 23 de marzo de 2001 y el Segundo Convenio Modificatorio de fecha 21   de agosto de 2001).

 

(h)           “Productos”   significa menas, minerales u otros productos comercialmente valiosos, excepto   cualquier fracción del mismo que abarca o se considera que abarca los   Productos de Oro y Plata, que se obtienen de la mina de la Propiedad.

 

(i)            “Propiedad”   significa la propiedad cubierta por las concesiones mineras mencionadas en el   Anexo A de este Contrato de RTE, incorporado por referencia, y que incluye las   renovaciones y relevantamiento del área que abarca esas concesiones mineras.

 

(j)            “RTE”   significa la regalía por experiencia técnica como resultado de que MSA   proporciona información geológica y técnica sobre el Proyecto de Mulatos a   ONCM, actualmente MON, creado por el Contrato de RTE Original, y modificado   por el Convenio Modificatorio de RTE, y reformulado en este Convenio de RTE.

 

(k)           “Precio de   la Plata” significa el precio por onza equivalente al precio   diario de la plata promedio de London Bullion Market Association publicado en   The Wall Street Journal para el   trimestre calendario en el que se paga la regalía.

 

1.3           Para determinar los Rendimientos de Fundición Netos,   todas las entradas y desembolsos en una moneda distinta a los dólares de los   Estados Unidos se convertirán a dólares de los Estados Unidos el día que se   reciban o desembolsen, según sea el caso.
    

 

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1.4           Net Smelter   Returns shall be calculated by MON at the end of each calendar quarter in which   Gold and Silver Products and Products from the Property are sold or deemed to   be sold.  Quarterly calculations of Net   Smelter Returns, together with payment of the applicable RTE in United States   currency, or in kind if requested by Royal before the end of the applicable   quarter, and calculated using the same basis of valuation and with all   additional costs for payment in kind being borne by Royal, and copies of all   net smelter receipts, shall be delivered to Royal within forty-five (45) days   after the end of the applicable quarter.

 

 

1.5           Royal, at its sole   election and expense, shall have the right to perform audits, whether by   Royal or through any authorized representative of Royal, of MON’s accounts   relating to the RTE.  Any such audit   shall be for a reasonable length of time during regular business hours, at a   mutually convenient time, upon at least ten (10) business days’ prior   written notice by Royal.  Each payment   of the RTE made in any calendar year shall be considered final and binding on   MON and, absent fraud or misrepresentation, shall not be subject to   subsequent modification by MON unless Royal gives written notice describing   and setting forth a specific objection to the calculation thereof on or   before March 31st of the calendar year following the calendar   year which was the subject of the audit.    Such objection shall specify the basis for the objection in reasonable   detail.  MON shall account for any   deficit in payments within ten (10) business days following completion   of such audit.

 

 

1.6           MON may, but shall   not be under any duty to, engage in price protection (hedging) or speculative   transactions such as futures contracts and commodity options in its sole   discretion covering all or part of production from the Property and neither   the profits nor the losses from such transactions shall be taken into account   in calculating Net Smelter Returns.

 

 

1.7           None of the   provisions of this RTE Agreement shall give Royal any right to management of   the Property or any mine established thereupon, nor shall the provisions be   interpreted to do so, in particular, but without limiting the generality of   the preceding statement, MON will plan, manage, control, conduct and   supervise mining and processing operations and any decision relating to the   type, dimensions and location of the mine, its facilities, pits and service   and ancillary establishments, as well as any decision pertaining to the rate   of work, production processes,
    	
 
    	
1.4           Los Rendimientos de Fundición Netos serán calculados por   MON al final de cada trimestre calendario en el que los Productos de Oro y   Plata y los Productos de la Propiedad se vendan o se consideren   vendidos.  Los cálculos trimestrales de   los Rendimientos de Fundición Netos, junto con el pago del RTE aplicable en   moneda de Estados Unidos, o en especie si así lo solicita Royal antes del   final del trimestre correspondiente, y calculados utilizando la misma base de   valuación y con todos los costos adicionales de pago en especie serán   realizados por Royal, y se le entregará a éste copia de todos los recibos de   fundición netos en un periodo de 45 (cuarenta y cinco) días después del final   del trimestre correspondiente.

 

1.5           Royal, a su discreción y a su costo y gasto, tendrá   derecho a realizar auditorías, sea por Royal o a través de cualquier representante   autorizado de éste, de la contabilidad de MON relacionada con el RTE.  Esa auditoría será por un periodo razonable   en horas hábiles normales a la hora mutuamente conveniente con notificación   escrita de al menos 10 (diez) días de antelación por parte de Royal.  Cada uno de los pagos de RTE realizados en   cualquier año calendario se considerarán definitivos y vinculatorios para MON   y, si no existe un fraude o declaración falsa, no estarán sujetos a una   modificación adicional por parte de MON a menos que Royal envíe notificación   escrita que describa y estipule una objeción específica a su cálculo en o   antes del 31 de marzo del año calendario después del año calendario en el que   fue sujeto de auditoría.  Esa objeción   especificará la base de la objeción en detalle razonable.  MON justificará cualquier déficit de pagos   en un periodo de 10 (diez) días hábiles después de la terminación de esa   auditoría.

 

1.6           MON podrá dedicarse, mas no tendrá la obligación de   dedicarse a operaciones de protección (compensación) de precios u operaciones   especulativas como contratos de futuros y opciones de bienes de consumo, a su   exclusiva discreción, que cubran la totalidad o parte de la producción de la   Propiedad y ni las utilidades ni las pérdidas de esas operaciones se tomarán   en cuenta al calcular los Rendimientos de Fundición Netos.

 

1.7           Ninguna de las disposiciones de este Convenio de RTE   darán a Royal el derecho a administrar la Propiedad o cualquier mina   establecida sobre la misma, ni las disposiciones se interpretarán que lo   hacen, en específico, pero sin limitar la generalidad de la declaración   anterior, MON planeará, administrará, controlará, conducirá y supervisará las   operaciones mineras y de procesamiento y cualquier decisión relacionada con   el tipo, las dimensiones y la ubicación de la mina, sus instalaciones, fosas   y establecimiento de servicios y secundarios, así como toda decisión
    

 

7

 

	
expansion of the mine and to temporary or final stoppage of   commercial exploitation and mining operations on the Property, provided that   MON shall conduct all operations on the Property in a good and workmanlike   manner and in accordance with accepted mining practice.

 

 

1.8           The parties   acknowledge that MON is not obligated to maintain in good standing, renew or   otherwise retain any interest in the Property, or application or   reapplication therefor, and that MON may, in its sole discretion, without   penalty, relinquish, drop, abandon or allow to lapse any or all of the   Property, or the applications or reapplications therefor, without further   obligation to Royal except as set forth in the Original Asset Purchase   Agreement and except as otherwise provided by the provisions of this RTE   Agreement.

 

 

1.9           Notwithstanding   the provisions of Section 1.8 of this RTE Agreement, if MON   relinquishes, drops, abandons, allows any portion of the Property to lapse,   and subsequently reacquires a direct or indirect beneficial interest with   respect to such portion of the Property, then such portion of the Property   will once again be subject to the obligation to pay the RTE.

 

 

1.10         Until payment of   the RTE in full MON shall not transfer all or any interest in the Property   unless the proposed transferee agrees with Royal in advance of such transfer   and in writing to be bound by the terms and conditions of this RTE Agreement.

 

 

1.11         From and after the   date of execution of this RTE Agreement, MON shall deliver to Royal the   following data and information relating to operations conducted on or for the   benefit of the Property:

 

(a)           Within twenty (20) calendar days   following the end of each calendar month, the Monthly Summary of Operating   Statistics in the form, and containing the information presented in the form,   of Exhibit B to this RTE Agreement;

 

(b)           The annual reserve and resource   estimate for the Property as and when finalized by MON’s management; and

 

(c)           MON’s   life of mine plan prepared on an annual basis relating to the Property as and   when finalized by MON’s management.
    	
 
    	
inherente al ritmo de   trabajo, procesos de producción, expansión de la mina y al paro temporal o   final de la explotación comercial y las operaciones mineras sobre la   Propiedad, en la inteligencia que MON llevará a cabo todas las operaciones   sobre la Propiedad de forma adecuada y profesional y de conformidad con la   práctica minera aceptada.

 

1.8           Las partes reconocen que MON no se verá obligado a   mantener en buenas condiciones, a renovar ni conservar ninguna participación   en la Propiedad, o en la aplicación o reaplicación de la misma, y que MON, a su   exclusiva discreción, podrá sin penalización, renunciar, dejar, abandonar o   permitir que pase cualquier parte de la Propiedad o la totalidad de la   Propiedad, o las aplicaciones o reaplicaciones de la misma, sin mayor   obligación frente a Royal que no sea la que se estipula en el Contrato de   Compra de Activos Original y excepto por lo que se estipula de otra forma en   las disposiciones de este Contrato de RTE.

 

1.9           No obstante las disposiciones de la Sección 1.8 de este   Contrato de RTE, en caso de que MON renuncie, deje, abandone, permita que   transcurra cualquier parte de la Propiedad, y posteriormente vuelva a   adquirir una participación usufructuaria directa o indirecta respecto a esa   parte de la Propiedad, entonces esa parte de la Propiedad nuevamente estará   sujeta a la obligación de pagar la RTE.

 

1.10         Hasta que se pague la RTE en su totalidad MON no   transferirá la totalidad o parte de la participación en la Propiedad a menos   que el beneficiario de la transferencia propuesto convenga con Royal antes de   esa transferencia y por escrito sujetarse a los términos y condiciones de   este Contrato de RTE.

 

1.11         A partir de y después de la fecha de celebración de este   Contrato de RTE, MON entregará a Royal los siguientes datos e información   relacionados con las operaciones realizadas sobre la Propiedad o para   beneficio de ésta:

 

(a)           En   un periodo de 20 (veinte) días calendario después del final de cada mes   calendario, el Resumen Mensual de Estadísticas de Operación en la forma, y   con la información presentada como Anexo B de este Contrato de RTE;

 

(b)           El   estimado de reserva y recursos anuales para la Propiedad cuando lo finalice   la administración de MON; y

 

(c)           La duración del plan minero de MON   elaborado anualmente con relación a la Propiedad cuando lo termine la administración   de MON.
    

 

8

 

	
Royal,   on behalf of itself and its affiliated entities (for purposes of this   Section 1.11, “Royal”), agrees to treat as confidential and refrain from   disclosing to third parties all data and information disclosed by MON to   Royal pursuant to this Section 1.11 which is confidential or proprietary   to MON and its affiliates (for purposes of this Section 1.11,   “MON”).  Nothing set forth in the   previous sentence shall impair Royal’s right to use or disclose any data or   information which:

 

 

(w)          at the time of disclosure to Royal   is generally available to the public or thereafter becomes generally   available to the public through no act of Royal;

 

(x)            Royal can show was in its   possession prior to disclosure to it and was not acquired, directly or   indirectly, from MON or any other source bound by a confidentiality agreement   with MON;

 

(y)           Royal can show was received by it   after the time of disclosure to Royal from a third party who did not acquire it   from MON under an obligation of confidence and that, without breach of any   obligation, Royal is free to disclose it to others; or

 

(z)            is required to be disclosed by   applicable law, the rules of any stock exchange, or by the order of any   judicial or regulatory authority having jurisdiction over the matter.

 

1.12         Royal or its   authorized agent or representative, on not less than seven days’ notice to   MON, may enter upon all surface and subsurface portions of the Property under   the direction and control of MON for the purpose of inspecting the Property,   all improvements thereto and operations thereon, provided that Royal and its   authorized agents and representatives shall enter the Property at their own   risk and expense and may not unreasonably hinder operations on or pertaining   to the Property.

 

 

1.13         Subject as hereinafter provided, MON   shall indemnify and save Royal harmless from any loss, cost or liability   incurred in its capacity as owner of the RTE (including, without limitation,   reasonable attorneys’ fees) as a result of a claim by a third party and   arising from any failure by MON at all times to comply with all applicable   federal, provincial and local laws, statutes, rules, regulations, permits,   ordinances, certificates, licenses and other regulatory requirements,   policies and guidelines relating to MON’s operations and activities on or   with respect to the Property; provided, however, MON shall have the right to   contest any of the same.
    	
 
    	
Royal, en representación de sí mismo y de sus   filiales (para efectos de esta Sección 1.11, “Royal”), se obliga a tratar   como confidencial y abstenerse de divulgar a terceros todos los datos e   información divulgados por MON a Royal de acuerdo con esta Sección 1.11 que   será confidencial o patrimonial para MON y sus filiales (para efectos de esta   Sección 1.11, “MON”).  Nada contenido   en la oración anterior afectará el derecho de Royal de usar o divulgar   cualquier dato o información que:

 

(w)          al   momento de que se divulgue a Royal esté disponible al público en general o   posteriormente llegue a estar disponible para el público en general sin acto   alguno de Royal;

 

(x)            Royal   puede mostrar que se encontraba en su posesión antes de que se le divulgara y   no fue adquirida, directa o indirectamente, de MON ni ninguna otra fuente   obligada por un acuerdo de confidencialidad con MON;

 

(y)           Royal   puede demostrar que la recibió por divulgación de un tercero que no la   adquirió de MON bajo ninguna obligación de confidencialidad y que, sin violar   ninguna obligación, Royal estará en libertad de divulgarla a otros; o

 

 

(z)            la   ley aplicable, las reglas de cualquier bolsa de valores o alguna otra ley de   alguna autoridad judicial o reglamentaria competente sobre el asunto requiere   que se divulgue.

 

1.12         Royal o su agente o representante autorizado, mediante   notificación con no menos de siete días de antelación a MON, podrá entrar a   toda la superficie y parte de la superficie de la Propiedad bajo la dirección   y el control de MON para inspeccionar la Propiedad, todas sus mejoras y   operaciones, en la inteligencia que Royal y sus agentes y representantes   autorizados entren a la Propiedad bajo su propio riesgo y a su costo y gasto   y no podrán afectar de forma irrazonable las operaciones en la Propiedad o   que inherentes a ésta.

 

1.13         Sujeto   a lo estipulado más adelante, MON indemnizará y mantendrá a Royal en paz y a   salvo de cualquier pérdida, costo o responsabilidad incurrida en su carácter   de propietario de RTE (incluyendo, de manera enunciativa mas no limitativa,   los honorarios legales razonables) como resultado de una reclamación por   parte de un tercero y que surjan de la omisión de MON en todo momento de   cumplir con las leyes, reglas, reglamentos, permisos, ordenamientos,   certificados, licencias y otros requisitos reglamentarios, políticas y   lineamientos federales, de provincia y locales con relación a las operaciones   y actividades de MON sobre o respecto a la Propiedad; en la inteligencia, sin   embargo, que MON tendrá derecho a
    

 

9

 

	
 

 

1.14         Before minerals from   the Property are commingled with minerals from other properties:

 
    	
 
    	
impugnar cualquiera de los   anteriores.

 

1.14         Antes de que los minerales de la Propiedad se mezclen con   minerales de otras propiedades:

 
    
	
(a)           The minerals from the Property shall be measured and   sampled in accordance with sound mining and metallurgical practices for   moisture, metal, and other appropriate content;

 

 

(b)           Representative samples of the minerals shall be taken   and retained by MON together with the results of assays (including penalty   substances) and other appropriate analysis of the samples to determine metal   and other relevant content of and penalty substances in the minerals, which   samples and results will be produced at the request of Royal; and

 

(c)           The amount of the RTE due and payable to Royal from   minerals produced from the Property commingled with minerals from other properties   shall be determined.
    	
 
    	
(a)      Los minerales de la Propiedad se medirán   y se les sacará una muestra de acuerdo con las sanas prácticas mineras y   metalúrgicas para ver su grado de humedad, metal y otro contenido   correspondiente;

 

(b)      MON tomará y conservará las muestras   representativas de los minerales junto con los resultados de las pruebas   (incluyendo sustancias de penalización) y otros análisis adecuados de las   muestras para determinar el contenido de metal y otro contenido relevante de   cualquier sustancia de penalización en los minerales, muestras y resultados   que se presentarán a solicitud de Royal; y

 

(c)      Se determinará el monto de RTE adeudado   y pagadero a Royal de los minerales obtenidos de la Propiedad, mezclados con   los minerales de otras propiedades.
    
	
Following   the expiration of the period for objection described in Section 1.5 of   this RTE Agreement, and absent timely objection by Royal, MON may dispose of   the samples and results required to be kept by this Section.

 

 

1.15         Time shall be of   the essence hereof.

 

1.16         In order to   guarantee the compliance with and timely payment when due of the RTE and each   and all the obligations under this RTE Agreement, simultaneously with the   execution hereof MON shall execute and deliver to Royal a first charge   non-possessory commercial pledge against the Property in first rank and   degree, and shall take all actions required thereunder.

 

1.17         This RTE Agreement   and Royal’s interest in the RTE is assignable by Royal in whole or in part   without the consent of MON.

 

1.18         The exchange rate   applicable to the conversion of any amounts denominated in the lawful   currency of Mexico to U.S. Dollars under this RTE Agreement shall be the   exchange rate reported in the Diario Oficial de la Federación on the date of   the conversion or on the next day on which the Diario Oficial de la   Federación is published if the conversion must be done pursuant to this   Agreement on a day on which the Diario Oficial de la Federación was not   published.
    	
 
    	
Después del vencimiento del periodo de objeción   descrito en la Sección 1.5 de este Contrato de RTE, y si no existe una   objeción oportuna por parte de Royal, MON podrá enajenar las muestras y   resultados cuya conservación es requerida por esta Sección.

 

1.15         El tiempo será esencial.

 

1.16         Para garantizar el cumplimiento y pago oportuno al   vencimiento del RTE y cada una de las obligaciones de este Contrato de RTE,   simultáneamente con su celebración MON celebrará y entregará a Royal la   prenda comercial sin transmisión de posesión de primer cargo contra la   Propiedad en primer rango y grado, y tomará todas las medidas requeridas para   ello.

 

1.17         Este Convenio de RTE y la participación de Royal en el RTE   podrán ser cedidos por Royal en su totalidad o en parte sin consentimiento de   MON.

 

1.18         El tipo de cambio aplicable a la conversión de cualquier   monto denominado en la moneda de curso legal de México a dólares de los   Estados Unidos de acuerdo con este Convenio de RTE será el tipo de cambio   reportado en el Diario Oficial de la Federación en la fecha de conversión o   el siguiente día en el que el Diario Oficial de la Federación se publique si   la conversión debe realizarse de acuerdo con este Contrato en un día en el   que no se publicó el Diario
    

 

10

 

	
 

 

1.19         Without regard to principles of   conflicts of law, this RTE Agreement is made under and shall be interpreted   and enforced in accordance with the laws of the State of Colorado applicable   to contracts made and to be performed entirely within such state and the laws   of the United States of America, except that, to the extent that the law of   the jurisdiction in which the real property is located (or which is otherwise   applicable to the real property) necessarily governs with respect to   procedural and substantive matters relating to the creation and enforcement   of the interests created herein, the law of such other jurisdiction shall   apply.
    	
 
    	
Oficial de la Federación.

 

1.19         Sin considerar los principios de conflictos de ley, este   Convenio de RTE se realiza y será interpretado y aplicado de acuerdo con las   leyes del Estado de Colorado aplicable a los contratos realizados y a ser   realizados en su totalidad dentro de ese estado y las leyes de los Estados   Unidos de América, excepto que, en la medida que la ley de la jurisdicción en   la que se ubique el bien inmueble (o que de otra forma aplique al bien   inmueble) rija necesariamente con respecto a los asuntos procesales y   sustantivos por la creación y aplicación de las participaciones aquí creadas,   aplicará la ley de esa otra jurisdicción.
    
	
ARTICLE II.  
    Attributes of RTE

 

2.1           In view of the   execution of this RTE Agreement, MON shall create a non-possessory commercial   pledge (in first rank and degree) to run with the Property, and any voluntary   or involuntary assignment by MON of any part of the Property or interest   therein shall be subject to the said pledge and to the RTE, and this shall   also be provided in the pledge agreement.

 

2.2           Royal shall be   entitled to assign or encumber all or any part of its interest in the RTE   without the consent of MON.

 

2.3           This RTE Agreement   is executed by the parties for the purposes of acknowledging the assignments   of the RTE described herein, the amendment and restatement of the RTE as set   forth herein, the registration of the RTE, and to give notice to third   parties of the current ownership and essential terms of the RTE.  Promptly upon Royal’s request, the parties   hereto shall sign and ratify before a Notary Public and deliver to Royal a   Spanish version hereof for registration in Mexico, if such registration is or   becomes available. The Spanish version shall also contain the requisite   provisions and formalities to accomplish such registration, and to perfect   under Mexican law all of the covenants contained herein. MON and T-Mex shall   sign and ratify the Spanish version hereof before a Mexican Notary Public. In   the event of any conflict between the English and Spanish version of any   provision of this RTE Agreement, the provision of the English version shall   control.
    	
 
    	
CLÁUSULA   II.
    Atributos de RTE

 

2.1           En vistas de la celebración de este Contrato de RTE, MON   creará una prenda comercial sin transmisión de posesión (en primer rango y   grado) sobre la Propiedad, y cualquier cesión voluntaria o involuntaria de   MON de alguna parte de la Propiedad o sus participaciones estará sujeta a esa   prenda y al RTE, y ésta también se estipulará en el contrato de prenda.

 

2.2           Royal tendrá derecho a ceder o afectar la totalidad o   parte de sus participaciones en el RTE sin consentimiento de MON.

 

2.3           Este   Convenio de RTE será celebrado por las partes para reconocer las cesiones de   RTE aquí descritas, la modificación y reformulación de RTE de acuerdo a lo   estipulado en el presente, el registro de RTE y para enviar notificación a   terceros de los términos de propiedad y términos esenciales actuales de   RTE.  Oportunamente a solicitud de   Royal, las partes por este acto firman y ratifican ante Notario Público y   entregan a Royal una versión en español del presente para su registro en   México, si ese registro está o llega a estar disponible.  La versión en español también incluirá las   disposiciones y trámites necesarios para lograr ese registro y perfeccionar   todos los pactos aquí contenidos de acuerdo con la ley mexicana.  MON y T-Mex firmarán y ratificarán la   versión en español del presente ante Notario Público mexicano. En caso de   cualquier conflicto entre la versión en inglés y en español, de cualquier   disposición de este Convenio de RTE, regirá lo dispuesto en la versión en   inglés. 
    

 

11

 

 

	
EXECUTED   on the day and year first referenced above.
    	
 
    	
CELEBRADO el día y año que se mencionan en el   proemio.
    
	
 
    	
 
    	
 
    
	
MON:
    	
 
    	
MON:
    
	
 
    	
 
    	
 
    
	
MINAS DE ORO NACIONAL S.A. de C.V.,

formerly   known as O.N.C. de Mexico S.A. de C.V.
    	
 
    	
MINAS DE ORO NACIONAL S.A. de C.V.,

anteriormente conocida como O.N.C. de México   S.A. de C.V.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Manley Guarducci
    	
 
    	
 
    	
Por:
    	
/s/ Manley Guarducci
    
	
 
    	
 
    	
Name:
    	
Manley   Guarducci
    	
 
    	
 
    	
 
    	
Nombre:
    	
Manley Guarducci
    
	
 
    	
 
    	
Title:
    	
Director   General
    	
 
    	
 
    	
 
    	
Cargo:
    	
Director General
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Royal:
    	
 
    	
Royal:
    
	
 
    	
 
    	
 
    
	
RG   MEXICO, INC.
    	
 
    	
RG MÉXICO, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tony A. Jensen
    	
 
    	
 
    	
Por:
    	
/s/ Tony A. Jensen
    
	
 
    	
 
    	
Name:
    	
Tony   A. Jensen
    	
 
    	
 
    	
 
    	
Nombre:
    	
Tony A. Jensen
    
	
 
    	
 
    	
Title:
    	
President
    	
 
    	
 
    	
 
    	
Cargo:
    	
Presidente
    
	
 
    	
 
    	
 
    
	
STATE   OF COLORADO
    	
)
    	
 
    	
ESTADO DE COLORADO
    	
)
    
	
 
    	
)   ss.
    	
 
    	
 
    	
) Declaración Jurada
    
	
COUNTY   OF DENVER
    	
)
    	
 
    	
CONDADO DE DENVER
    	
)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
This   instrument was acknowledged before me on the 27th day of May, 2011, by Tony A. Jensen as   President of RG Mexico, Inc., a Delaware corporation.
    	
 
    	
Este instrumento fue reconocido ante mí el 27th   de May de 2011, por Tony A. Jensen como Presidente de RG México, Inc.,   sociedad de Delaware.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
[SEAL]
    	
 
    	
[SELLO]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
My   commission expires:
    	
 
    	
 
    	
Mi nombramiento vence el:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Karen Passavanti Gross
    	
 
    	
 
    	
/s/ Karen Passavanti Gross
    
	
 
    	
Notary   Public
    	
 
    	
 
    	
Notario Público
    
															

 

12

 

EXHIBIT A

TO AGREEMENT FOR

AMENDMENT AND RESTATEMENT

OF

ROYALTY FOR TECHNICAL EXPERTISE

 

MULATOS PROJECT MINING CONCESSIONS

SUBJECT TO ROYALTY FOR TECHNICAL EXPERTISE

 

	
 
    	
 
    	
LOT
    	
 
    	
HOLDER
    	
 
    	
SURFACE
   (Hectares)
    	
 
    	
TITLE
    	
 
    	
TYPE OF
   CONCESSION
    	
 
    	
TERM
    	
 
    	
LOCATION
    
	
1
    	
 
    	
Nuevo   Mulatos
    	
 
    	
MON
    	
 
    	
30.0000
    	
 
    	
180600
    	
 
    	
Exploitation
    	
 
    	
July 12,   2037
    	
 
    	
Sahuaripa,   Sonora
    
	
2
    	
 
    	
San   Miguel 1
    	
 
    	
MON
    	
 
    	
16.7056
    	
 
    	
191139
    	
 
    	
Exploitation
    	
 
    	
April 28,   2041
    	
 
    	
Sahuaripa,   Sonora
    
	
3
    	
 
    	
Cristina
    	
 
    	
MON
    	
 
    	
290.0000
    	
 
    	
191271
    	
 
    	
Exploitation
    	
 
    	
December 18,   2041
    	
 
    	
Sahuaripa,   Sonora
    
	
4
    	
 
    	
Carolina
    	
 
    	
MON
    	
 
    	
347.0000
    	
 
    	
191272
    	
 
    	
Exploitation
    	
 
    	
December 18,   2041
    	
 
    	
Sahuaripa,   Sonora
    
	
5
    	
 
    	
Bety
    	
 
    	
MON
    	
 
    	
453.7237
    	
 
    	
191273
    	
 
    	
Exploitation
    	
 
    	
December 18,   2041
    	
 
    	
Sahuaripa,   Sonora
    
	
6
    	
 
    	
San   Miguel 2
    	
 
    	
MON
    	
 
    	
20.2516
    	
 
    	
195438
    	
 
    	
Exploitation
    	
 
    	
September 13,   2042
    	
 
    	
Sahuaripa,   Sonora
    
	
7
    	
 
    	
La   Central No.1
    	
 
    	
MON
    	
 
    	
81.2560
    	
 
    	
196108
    	
 
    	
Exploitation
    	
 
    	
September 22,   2042
    	
 
    	
Sahuaripa,   Sonora
    
	
8
    	
 
    	
El   Víctor de Mulatos
    	
 
    	
MON
    	
 
    	
18.0000
    	
 
    	
196110
    	
 
    	
Exploitation
    	
 
    	
September 22,   2042
    	
 
    	
Sahuaripa,   Sonora
    
	
9
    	
 
    	
La   Central
    	
 
    	
MON
    	
 
    	
96.0000
    	
 
    	
196111
    	
 
    	
Exploitation
    	
 
    	
September 22,   2042
    	
 
    	
Sahuaripa,   Sonora
    
	
10
    	
 
    	
San   Carlos
    	
 
    	
MON
    	
 
    	
9.0000
    	
 
    	
196112
    	
 
    	
Exploitation
    	
 
    	
September 22,   2042
    	
 
    	
Sahuaripa,   Sonora
    
	
11
    	
 
    	
Salamandra   Fracción 1
    	
 
    	
MON
    	
 
    	
8,072.6559
    	
 
    	
212185
    	
 
    	
Exploitation
    	
 
    	
August 29,   2046
    	
 
    	
Sahuaripa,   Sonora
    
	
12
    	
 
    	
Salamandra   Fracción 2
    	
 
    	
MON
    	
 
    	
1,161.5005
    	
 
    	
212186
    	
 
    	
Exploitation
    	
 
    	
August 29,   2046
    	
 
    	
Sahuaripa,   Sonora
    
	
13
    	
 
    	
Salamandra   Fracción 3
    	
 
    	
MON
    	
 
    	
604.0000
    	
 
    	
212187
    	
 
    	
Exploitation
    	
 
    	
August 29,   2046
    	
 
    	
Sahuaripa,   Sonora
    
	
14
    	
 
    	
Tequila
    	
 
    	
MON
    	
 
    	
18.7440
    	
 
    	
206724
    	
 
    	
Exploitation
    	
 
    	
March 11,   2048
    	
 
    	
Sahuaripa,   Sonora
    
	
15
    	
 
    	
Mirtha
    	
 
    	
MON
    	
 
    	
470.3190
    	
 
    	
206755
    	
 
    	
Exploitation
    	
 
    	
March 11,   2048
    	
 
    	
Sahuaripa,   Sonora
    
	
16
    	
 
    	
El   Jaspe
    	
 
    	
MON
    	
 
    	
78.0000
    	
 
    	
209714
    	
 
    	
Exploitation
    	
 
    	
August 2,   2049
    	
 
    	
Sahuaripa,   Sonora
    
	
17
    	
 
    	
San   Lorenzo
    	
 
    	
MON
    	
 
    	
60.0000
    	
 
    	
210493
    	
 
    	
Exploitation
    	
 
    	
October 7,   2049
    	
 
    	
Sahuaripa,   Sonora
    
	
18
    	
 
    	
San   Lorenzo
    	
 
    	
MON
    	
 
    	
15.6160
    	
 
    	
211573
    	
 
    	
Exploitation
    	
 
    	
June 15,   2050
    	
 
    	
Sahuaripa,   Sonora
    
	
19
    	
 
    	
El   Marrano
    	
 
    	
MON
    	
 
    	
434.0000
    	
 
    	
217518
    	
 
    	
Exploitation
    	
 
    	
July 15,   2052
    	
 
    	
Sahuaripa,   Sonora
    
	
20
    	
 
    	
Capulín   2
    	
 
    	
MON
    	
 
    	
12.0084
    	
 
    	
217556
    	
 
    	
Exploitation
    	
 
    	
July 15,   2052
    	
 
    	
Sahuaripa,   Sonora
    
	
21
    	
 
    	
Alejandra
    	
 
    	
MON
    	
 
    	
405.6606
    	
 
    	
217765
    	
 
    	
Exploitation
    	
 
    	
August 12,   2052
    	
 
    	
Sahuaripa,   Sonora
    

 

 

	
22
    	
 
    	
El   Carricito
    	
 
    	
MON
    	
 
    	
2,176.2872
    	
 
    	
222880
    	
 
    	
Exploitation
    	
 
    	
September 13,   2054
    	
 
    	
Yecora,   Sonora
    
	
23
    	
 
    	
El   Carricito 2
    	
 
    	
MON
    	
 
    	
100.0000
    	
 
    	
212507
    	
 
    	
Exploitation
    	
 
    	
October 30,   2006
    	
 
    	
Yecora,   Sonora
    
	
24
    	
 
    	
Cerro   Pelón
    	
 
    	
MON
    	
 
    	
500.0000
    	
 
    	
213670
    	
 
    	
Exploitation
    	
 
    	
June 7,   2007
    	
 
    	
Sahuaripa,   Sonora
    
	
25
    	
 
    	
Cerro   Pelón 2
    	
 
    	
MON
    	
 
    	
500.0000
    	
 
    	
214866
    	
 
    	
Exploitation
    	
 
    	
December 3,   2007
    	
 
    	
Sahuaripa,   Sonora
    
	
26
    	
 
    	
Los   Compadres
    	
 
    	
MON
    	
 
    	
10.0000
    	
 
    	
218820,   replacement for 201674
    	
 
    	
Exploitation
    	
 
    	
January 20,   2009
    	
 
    	
Sahuaripa,   Sonora
    
	
27
    	
 
    	
Continuación   de Virgencita
    	
 
    	
MON
    	
 
    	
100.0000
    	
 
    	
190634
    	
 
    	
Exploitation
    	
 
    	
April 28,   2041
    	
 
    	
Sahuaripa,   Sonora
    

 

2

 

ANEXO A

DEL CONVENIO 
 MODIFICATORIO Y DE REFORMULACIÓN
 DE 
 REGALÍAS POR EXPERIENCIA TÉCNICA

 

CONCESIONES MINERAS DEL PROYECTO MULATOS 
 SUJETAS A REGALÍAS POR EXPERIENCIA TÉCNICA

 

	
 
    	
 
    	
LOTE
    	
 
    	
TENEDOR
    	
 
    	
SUPERFICIE
   (Hectáreas)
    	
 
    	
TÍTULO
    	
 
    	
TIPO DE
   CONCESIÓN
    	
 
    	
VIGENCIA
    	
 
    	
UBICACIÓN
    
	
1
    	
 
    	
Nuevo   Mulatos
    	
 
    	
MON
    	
 
    	
30.0000
    	
 
    	
180600
    	
 
    	
Explotación
    	
 
    	
12   de julio de 2037
    	
 
    	
Sahuaripa,   Sonora
    
	
2
    	
 
    	
San   Miguel 1
    	
 
    	
MON
    	
 
    	
16.7056
    	
 
    	
191139
    	
 
    	
Explotación
    	
 
    	
28   de abril de 2041
    	
 
    	
Sahuaripa,   Sonora
    
	
3
    	
 
    	
Cristina
    	
 
    	
MON
    	
 
    	
290.0000
    	
 
    	
191271
    	
 
    	
Explotación
    	
 
    	
18   de diciembre de 2041
    	
 
    	
Sahuaripa,   Sonora
    
	
4
    	
 
    	
Carolina
    	
 
    	
MON
    	
 
    	
347.0000
    	
 
    	
191272
    	
 
    	
Explotación
    	
 
    	
18   de diciembre de 2041
    	
 
    	
Sahuaripa,   Sonora
    
	
5
    	
 
    	
Bety
    	
 
    	
MON
    	
 
    	
453.7237
    	
 
    	
191273
    	
 
    	
Explotación
    	
 
    	
18   de diciembre de 2041
    	
 
    	
Sahuaripa,   Sonora
    
	
6
    	
 
    	
San   Miguel 2
    	
 
    	
MON
    	
 
    	
20.2516
    	
 
    	
195438
    	
 
    	
Explotación
    	
 
    	
13   de septiembre de 2042
    	
 
    	
Sahuaripa,   Sonora
    
	
7
    	
 
    	
La   Central No.1
    	
 
    	
MON
    	
 
    	
81.2560
    	
 
    	
196108
    	
 
    	
Explotación
    	
 
    	
22   de septiembre de 2042
    	
 
    	
Sahuaripa,   Sonora
    
	
8
    	
 
    	
El   Víctor de Mulatos
    	
 
    	
MON
    	
 
    	
18.0000
    	
 
    	
196110
    	
 
    	
Explotación
    	
 
    	
22   de septiembre de 2042
    	
 
    	
Sahuaripa,   Sonora
    
	
9
    	
 
    	
La   Central
    	
 
    	
MON
    	
 
    	
96.0000
    	
 
    	
196111
    	
 
    	
Explotación
    	
 
    	
22   de septiembre de 2042
    	
 
    	
Sahuaripa,   Sonora
    
	
10
    	
 
    	
San   Carlos
    	
 
    	
MON
    	
 
    	
9.0000
    	
 
    	
196112
    	
 
    	
Explotación
    	
 
    	
22   de septiembre de 2042
    	
 
    	
Sahuaripa,   Sonora
    
	
11
    	
 
    	
Salamandra   Fracción 1
    	
 
    	
MON
    	
 
    	
8,072.6559
    	
 
    	
212185
    	
 
    	
Explotación
    	
 
    	
29   de agosto de 2046
    	
 
    	
Sahuaripa,   Sonora
    
	
12
    	
 
    	
Salamandra   Fracción 2
    	
 
    	
MON
    	
 
    	
1,161.5005
    	
 
    	
212186
    	
 
    	
Explotación
    	
 
    	
29   de agosto de 2046
    	
 
    	
Sahuaripa,   Sonora
    
	
13
    	
 
    	
Salamandra   Fracción 3
    	
 
    	
MON
    	
 
    	
604.0000
    	
 
    	
212187
    	
 
    	
Explotación
    	
 
    	
29   de agosto de 2046
    	
 
    	
Sahuaripa,   Sonora
    
	
14
    	
 
    	
Tequila
    	
 
    	
MON
    	
 
    	
18.7440
    	
 
    	
206724
    	
 
    	
Explotación
    	
 
    	
11   de marzo de 2048
    	
 
    	
Sahuaripa,   Sonora
    
	
15
    	
 
    	
Mirtha
    	
 
    	
MON
    	
 
    	
470.3190
    	
 
    	
206755
    	
 
    	
Explotación
    	
 
    	
11   de marzo de 2048
    	
 
    	
Sahuaripa,   Sonora
    

 

3

 

	
16
    	
 
    	
El   Jaspe
    	
 
    	
MON
    	
 
    	
78.0000
    	
 
    	
209714
    	
 
    	
Explotación
    	
 
    	
2   de agosto de 2049
    	
 
    	
Sahuaripa,   Sonora
    
	
17
    	
 
    	
San   Lorenzo
    	
 
    	
MON
    	
 
    	
60.0000
    	
 
    	
210493
    	
 
    	
Explotación
    	
 
    	
7   de octubre de 2049
    	
 
    	
Sahuaripa,   Sonora
    
	
18
    	
 
    	
San   Lorenzo
    	
 
    	
MON
    	
 
    	
15.6160
    	
 
    	
211573
    	
 
    	
Explotación
    	
 
    	
15   de junio de 2050
    	
 
    	
Sahuaripa,   Sonora
    
	
19
    	
 
    	
El   Marrano
    	
 
    	
MON
    	
 
    	
434.0000
    	
 
    	
217518
    	
 
    	
Explotación
    	
 
    	
15   de julio de 2052
    	
 
    	
Sahuaripa,   Sonora
    
	
20
    	
 
    	
Capulín   2
    	
 
    	
MON
    	
 
    	
12.0084
    	
 
    	
217556
    	
 
    	
Explotación
    	
 
    	
15   de julio de 2052
    	
 
    	
Sahuaripa,   Sonora
    
	
21
    	
 
    	
Alejandra
    	
 
    	
MON
    	
 
    	
405.6606
    	
 
    	
217765
    	
 
    	
Explotación
    	
 
    	
12   de agosto de 2052
    	
 
    	
Sahuaripa,   Sonora
    
	
22
    	
 
    	
El   Carricito
    	
 
    	
MON
    	
 
    	
2,176.2872
    	
 
    	
222880
    	
 
    	
Explotación
    	
 
    	
13   de septiembre de 2054
    	
 
    	
Yecora,   Sonora
    
	
23
    	
 
    	
El   Carricito 2
    	
 
    	
MON
    	
 
    	
100.0000
    	
 
    	
212507
    	
 
    	
Explotación
    	
 
    	
30   de octubre de 2006
    	
 
    	
Yecora,   Sonora
    
	
24
    	
 
    	
Cerro   Pelón
    	
 
    	
MON
    	
 
    	
500.0000
    	
 
    	
213670
    	
 
    	
Explotación
    	
 
    	
7   de junio de 2007
    	
 
    	
Sahuaripa,   Sonora
    
	
25
    	
 
    	
Cerro   Pelón 2
    	
 
    	
MON
    	
 
    	
500.0000
    	
 
    	
214866
    	
 
    	
Explotación
    	
 
    	
3   de diciembre de 2007
    	
 
    	
Sahuaripa,   Sonora
    
	
26
    	
 
    	
Los   Compadres
    	
 
    	
MON
    	
 
    	
10.0000
    	
 
    	
218820,   reemplazo de 201674
    	
 
    	
Explotación
    	
 
    	
20   de enero de 2009
    	
 
    	
Sahuaripa,   Sonora
    
	
27
    	
 
    	
Continuación   de Virgencita
    	
 
    	
MON
    	
 
    	
100.0000
    	
 
    	
190634
    	
 
    	
Explotación
    	
 
    	
28   de abril de 2041
    	
 
    	
Sahuaripa,   Sonora
    

 

4

 

	
EXHIBIT B

TO AGREEMENT FOR

AMENDMENT AND RESTATEMENT

OF

ROYALTY FOR TECHNICAL EXPERTISE

 

FORM OF MONTHLY SUMMARY OF OPERATING STATISTICS
    	
 
    	
ANEXO B

DEL CONVENIO
   MODIFICATORIO Y DE REFORMULACIÓN
   DE 
   REGALÍAS POR EXPERIENCIA TÉCNICA

 

FORMATO DE RESUMEN MENSUAL DE   ESTADÍSTICAS DE OPERACIÓNExhibit 10.52

 

Dated 1 September 1999

 

RIO TINTO METALS LIMITED

 

- and –

 

MK GOLD COMPANY

 

 

AGREEMENT

 

for the sale and purchase of

all of the issued shares and venture loans

of RioMin Exploraciones SA

 

 

Rio Tinto plc

Legal Department

6 St James’s Square

London SW1Y 4LD

 

 

THIS AGREEMENT is made on 1 September, 1999 

 

BETWEEN:-

 

(1)           RIO TINTO METALS LIMITED (No. 147115) whose registered office is at 6, St James’s Square, London, England (the “Vendor”); and

 

(2)          MK GOLD COMPANY of 60 East South Temple, Salt Lake City, Utah 84111 (the “Purchaser).

 

RECITALS:

 

(A)          By a transfer deed executed before a notary on 31 December 1998, the Vendor acquired the Shares in the Company from Rio Tinto International Holdings Limited. Furthermore, by a transfer deed executed before a Spanish notary on 25 February 1999, the Vendor acquired the Venture Loans (defined below) from Rio Tinto International Holdings Limited;

 

(B)           The Company is a wholly owned subsidiary of Rio Tinto Metals Limited and is the legal and beneficial owner of the Investigation Permits (defined below);

 

(C)           The Purchaser and the Vendor now wish to enter into this agreement to record the terms upon which the Purchaser is to acquire the Shares, and the Venture Loans, from the Vendor.

 

THE PARTIES AGREE AS FOLLOWS:-

 

1.             INTERPRETATION

 

1.1           In this agreement the following words and expressions and abbreviations have the following meanings, unless the context otherwise requires:-

 

“Accounts” means the audited financial statements of the Company, comprising the balance sheet and profit and loss account of the Company together with the directors’ report and auditors certificate, as at and for the financial period ended on the Accounts Date;

 

“Accounts Date” means 31 December 1998;

 

“Business  Day” means a day (excluding Saturdays and Sundays) on which banks generally are open in London, Seville and Salt Lake City for the transaction of normal banking business;

 

“Company” means RioMin Exploraciones S.A., a Spanish corporation whose registered office is located at Ronda de la Exposicion, 39, Seville (Spain) incorporated for an indefinite period by a deed executed by the Notary Public Mr José-Maria Alvarez Vega, of Madrid, on 19 January 1983. The articles of association currently in force were signed before the Notary Public Ms. Maria Isabel Gabarro Miquel, of Barcelona, on 16 November 1998, with protocol number 3596.   The Company is listed in the Companies Register of Seville,

 

2

 

Volume 2612, Folio 222, page SE 31598 and with the tax identification number A-28-814135;

 

“Completion” means the completion of the sale and purchase of the Shares and the Venture Loans in accordance with clause 4;

 

“Completion Date” means the date of execution of this Sale and Purchase Agreement;

 

“Confidential Information” means all information relating to the affairs and activities of the Company including all Technical Data which is not publicly known;

 

“Data Room” means the files of documents relating to the Company and its activities as the same are more particularly described in the Index to the Data Room Documents in agreed terms;

 

“Disclosure Letter” means the letter of today’s date together with the attachments thereto addressed by the Vendor to the Purchaser disclosing exceptions to the Warranties;

 

“Encumbrance” means any mortgage, charge (fixed or floating), pledge, lien, hypothecation, trust, right of set off or other third party right or interest (legal or equitable) including any right of pre-emption, assignment by way of security, reservation of title or any other security interest of any kind however created or arising or any other agreement or arrangement (including a sale and repurchase arrangement) having similar effect;

 

“Feasibility Study” means the report prepared by the Company (together with all supporting documentation and information hereto) on the feasibility of developing a mine and processing facilities at Las Cruces;

 

“Investigation Permits” means the investigation permit (number 7532) granted to the Company on 14 October 1992 by Servicio de Industria, Energiay Minas as renewed for further terms of 3 years on 15 September 1995 and 25 November 1998 together with the surrounding four investigation permits registered with numbers 7531, 7533, 7625 and 7626 (collectively referred to as Faralaes II, Faralaes I, Faralaes III, Vear and Olivares);

 

“Material Agreements” means all existing agreements to which the Company is a party and which are material to the Company’s activities as currently carried on true and complete copies of which are in the Data Room and referred to in the Index to the Data Room Documents in agreed terms;

 

“Properties” means the properties described in schedule 2 or any part or parts thereof and “Property” shall mean any one of them;

 

“Purchaser’s Group” means the Purchaser, its holding companies and the subsidiaries from time to time of such holding companies, all of them and each of them as the context admits;

 

3

 

“Related Person” means in relation to any party its holding companies and the subsidiaries from time to time of such holding companies, all of them and each of them as the context admits;

 

“Shares” means all of the issued shares in the capital of the Company namely 191,500 registered shares, fully paid up with a nominal value of 3254 pesetas each numbers 1 to 191, 500, both included;

 

“Tax” or “tax” means any tax, and any duty, contribution, impost, withholding, levy or charge in the nature of tax, whether domestic or foreign, and any fine, penalty, surcharge or interest connected therewith and includes corporation tax, advance corporation tax, income tax (including income tax required to be deducted or withheld from or accounted for in respect of any payment), national insurance and social security contributions, capital gains tax, inheritance tax, value added tax, customs exercise and import duties, stamp duty, stamp duty reserve tax, insurance premium tax, air passenger duty, rates and water rates, land fill tax, petroleum revenue tax, advance petroleum revenue tax, gas levy and any other payment whatsoever which any person is or may be or become bound to make to any person and which is or purports to be in the nature of taxation;

 

“Technical Data” means all plans, results, geological data, drawings, specifications, operating procedures and other technical data and information of whatever kind in each case owned by the Company including, but without limitation, the Feasibility Study, financial analysis and interpretation of the geological and metallurgical data in respect of the land the subject of the Investigation Permits;

 

“Vendor’s Group” means the Vendor, its holding companies and the subsidiaries, excluding the Company, from time to time of such holding companies, all of them and each of them as the context admits;

 

“Venture Loans” means the loans granted to the Company amounting, in aggregate to 5,390,776,662 pesetas pursuant to the assignment of a credit and venture loan agreement entered into on 25 February 1999, before the notary Mr Francisco Palop Tordera;

 

“Warranties” means the warranties set out in schedule 1.

 

1.2           In this agreement unless otherwise specified, reference to:-

 

(a)           “subsidiary” or “holding company” in respect of the Company it shall be construed in accordance with article 4 of the Ley del Mercado de Valores (Stock Exchange Act) and article 42 of the Código de Commercio (Mercantile Code) and in respect of the Vendor, the Vendor’s Group, the Purchaser or the Purchaser’s Group, the law of the place of incorporation of the relevant entity;

 

(b)           a document in the “agreed terms” is a reference to that document in the form approved and for the purposes of identification signed by or on behalf of each party;

 

4

 

(c)           a “party” means a party to this agreement and includes its assignees (if any) and/or the successors in title to substantially the whole of its undertaking;

 

(d)           a “person” includes any person, individual, company, firm, corporation, government, state or agency of a state or any undertaking (whether or not having separate legal personality and irrespective of the jurisdiction in or under the law of which it was incorporated or exists);

 

(e)           “clauses”, “paragraphs” or “schedules” are to clauses and paragraphs of and schedules to this agreement;

 

(f)            words denoting the singular shall include the plural and vice versa and words denoting any gender shall include all genders;

 

(g)           any reference to US$ is to the currency of the United States of America.

 

1.3           The schedules form part of the operative provisions of this agreement and references to this agreement shall, unless the context otherwise requires, include references to the schedules.

 

2.             SALE AND PURCHASE

 

2.1           Upon the terms of this agreement, the Vendor as legal and beneficial owner shall sell and the Purchaser shall purchase all the Shares and the Venture Loans with effect from Completion free from any Encumbrance together with all accrued benefits and rights attached thereto.

 

2.2           The aggregate consideration for such sale and purchase shall be the total sum of                 to be satisfied in cash on Completion of which US$               shall be the consideration payable for the Shares and US$                shall be the consideration payable for the Venture Loans.

 

2.3           In addition to the consideration referred to in clause 2.2 the Purchaser shall pay to the Vendor a royalty in accordance with the provisions of Schedule 3 (“Royalty”).

 

3.             CONDITIONS

 

Completion is conditional upon fulfilment in all respects by the Purchaser of its obligation to pay the Consideration.

 

4.             COMPLETION

 

4.1           Completion shall take place at the Company’s offices on the Completion Date.

 

4.2           On Completion the Vendor shall deliver to or, if the Purchaser shall so agree, make available to the Purchaser:-

 

(a)         transfers in the agreed form relating to all the Shares and the Venture Loans duly executed in favour of the Purchaser before a Notary Public;

 

5

 

(b)         the original of the transfer deed executed on 31 December 1998 before Spanish Notary Public Maria-Isabel Gabarro Miquel pursuant to which the Vendor acquired the Shares together with the original of transfer deed executed on 25 February 1999 pursuant to which the Vendor acquired the Venture Loans and any reports or documents lodged with any relevant Spanish foreign investment authority concerning the Venture Loans;

 

(c)         resignations in the agreed terms duly executed as deeds of Mr John MacLean and Mr Daniel Roca from their offices as director or secretary of the Company containing a confirmation that they have no claims (whether statutory, contractual or otherwise) against the Company for compensation for loss of office or unpaid emoluments;

 

(d)         the Company’s Memorandum and articles of association, Register of Minutes of meetings of shareholders and directors, Register of agreements with sole shareholder, Shareholders Register, Companies House Certificate and cheque books of the Company;

 

(e)         the documents evidencing the Venture Loans, including any cancelled Loans, the Investigation Permits and all Material Agreements;

 

(f)          the Technical Data and the contents of the Data Room;

 

(g)         the Disclosure Letter duly signed for and on behalf of the Vendor; and

 

4.3           At or prior to Completion (and prior to the taking effect of the resignations of the directors referred to in clause 4.2(c) above) the Vendor shall procure the passing of board and/or shareholder resolutions (as the case may be) in the agreed terms of the Company approving the sale of the Shares and the Venture Loans:-

 

(a)         sanctioning for registration of the transfers in respect of the Shares;

 

(b)         appointing Messrs. G. Frank Joklik, Donald L Babinchak and John C Farmer to be the directors and Mr Charles Coward, to be secretary of the Company;

 

(c)         revoking all mandates to bankers (other than any existing mandates in favour of Mr Mike Doyle, Mr Gobain Ovejero Zappino or any other employee of the Company) and giving authority in favour of the directors appointed under clause 4.3(b) above or such other persons as the Purchaser may nominate to operate the bank accounts thereof; and

 

(d)         revoking all powers of attorney other than such powers granted to existing employees of the Company.

 

4.4         Upon compliance by the Vendor with the provisions of clauses 4.2 and 4.3 the Purchaser shall provide for the transfer by CHAPS of                   to

 

6

 

the Account of Rio Tinto Finance plc at Chase Manhattan Bank , New York, ABA No. 021000021, SWIFT CHASUS33, Account No. 910-2-772986.

 

4.5           If in any respect the obligations of the Vendor (or Purchaser) are not complied with on Completion the party not in default may:-

 

(a)           defer Completion to a date not more than 28 days after Completion (and so that the provisions of this clause 4, apart from this clause 4.5(a), shall apply to Completion as so deferred); or

 

(b)           proceed to Completion so far as practicable (without prejudice to its rights hereunder); or

 

(c)           terminate this agreement without prejudice to the rights and liabilities which accrued prior to termination which shall continue to subsist,

 

by means of a notice to that effect in writing served on the other.

 

5.             WARRANTIES

 

5.1           The Vendor warrants with the Purchaser in the terms of the Warranties as at the Completion Date.

 

5.2           Each of the Warranties shall be construed as a separate Warranty and (save as expressly provided to the contrary) shall not be limited by the terms of any of the other Warranties.

 

5.3           Save in the case of fraud or fraudulent concealment by the Vendor, the Vendor shall be under no liability in respect of any claim under the Warranties and any such claim shall be wholly barred and unenforceable unless written notice of such claim setting out full details of the relevant claim (including the grounds on which such claim is based and the amount claimed to be payable in respect thereof) shall have been served upon the Vendor by the Purchaser:-

 

(a)           in the case of a claim under the Warranties (other than the Warranties relating to Tax) by not later than 5.00 pm on the date which is 12 months after the date hereof; and

 

(b)           in the case of a claim under the Warranties relating to Tax by not later than 5.00 pm on the fourth anniversary of the date hereof

 

and the liability of the Vendor for any claim specified in such notice shall absolutely determine and cease unless the amount payable in respect of the relevant claim has been agreed by the Vendor within six months of the date of such written notice, or

 

(i)            if legal proceedings have not been instituted in respect of such claim by the due service of process on the Vendor within 3 months of the date of such written notice; or

 

7

 

(ii)           in the event that the Vendor shall make in respect thereof a request pursuant to clause 5.12(a)(ii), if legal proceedings have not been instituted by the Purchaser in respect of such claim by the due service of process on the Vendor within three months of the date on which pursuant to clause 5.12(a)(ii) judgement is given by a court of competent jurisdiction in respect of such proceedings as shall have been instituted by the Purchaser pursuant to such request or the date settlement is reached in such third party proceedings with the consent of the Vendor or on which the Vendor and the Purchaser agree that proceedings or other action against the third party shall be abandoned.

 

For the purpose of this clause 5.3 legal proceedings shall not be deemed to have been commenced unless they shall have been properly issued and validly served upon the Vendor.

 

5.4           Save in the case of fraud or fraudulent concealment the Vendor shall be under no liability in respect of any claim under the Warranties:-

 

(a)          where the liability of the Vendor in respect of that claim would (but for this paragraph) have been less than US$25,000;

 

(b)         unless and until and only to the extent that the liability in respect of that claim (not being a claim for which liability is excluded under sub-clause 5.4(a) above) when aggregated with the liability of the Vendor in respect of all other claims shall exceed US$300,000.

 

5.5           Save in the case of fraud or fraudulent concealment the aggregate liability of the Vendor in respect of all claims under this Agreement shall not in any circumstances exceed

 

5.6           The Vendor shall be under no liability whatsoever in respect of any claim under the Warranties if the facts or circumstances giving rise thereto are fully and fairly disclosed in the Disclosure Letter, any of the documents contained in the Data Room or provided for or stated to be exceptions under the terms of this agreement or are otherwise known to the Purchaser at the date hereof.

 

5.7           No liability (whether in contract, tort or otherwise) shall attach to the Vendor in respect of any claim under the Warranties to the extent that:-

 

(a)           the claim or the events giving rise to the claim would not have arisen but for an act, omission or transaction of the Purchaser or which would not have arisen but for any claim, election or surrender or disclaimer made or omitted to be made or notice or consent given or omitted to be given by the Purchaser under the provisions of any statutes relating to Tax;

 

(b)           the claim is based upon a liability which is contingent only, unless and until such contingent liability becomes an actual liability or until the same is finally adjudicated;

 

8

 

(c)           provision or reserve in respect of the matter giving rise to the claim shall have been made in the Accounts or to the extent that the matter giving rise to the claim shall have been noted in the Accounts;

 

(d)           the claim occurs wholly or partly out of or the amount thereof is increased as a result of:-

 

(i)            any change in the accounting principles or practices of the Purchaser introduced or having effect after the date of this agreement unless the same is introduced to bring the accounting principles and practices into line with generally accepted accounting principles and practices in Spain in relation to a business of the type carried on by the Company; or

 

(ii)           any increase in the rates of taxation made after the date hereof; or

 

(iii)          any change in law or regulation or in its interpretation or  administration by the Spanish courts, by the Spanish taxation authorities or by any other fiscal, monetary or regulatory authority (whether or not having the force of law);

 

(e)           the loss or damage giving rise to the claim is recoverable by the Purchaser under any policy of insurance or would have been so recoverable but for any change in the terms of insurance since the date of this agreement; or

 

(f)            the claim relates to a claim or liability for taxation and would not have arisen but for any winding-up or cessation after Completion of any business or trade carried on by the Company or the Purchaser.

 

5.8           The Purchaser shall promptly:-

 

(a)           inform the Vendor in writing of any fact, matter, event or circumstance which comes to its notice whereby it appears that the Vendor is or may be liable to make any payment in respect of any claim under the Warranties or whereby it appears the Purchaser’s Group shall become or may become entitled to recover from some other person a sum which is referable to a payment already made by the Vendor in respect of such a claim; and

 

(b)           thereafter keep the Vendors fully informed of all developments in relation thereto; and

 

(c)           provide all such information and documentation (no matter how it is recorded or  stored) as the Vendor shall request in connection therewith and also in connection with any proceedings instituted by or against the Purchaser’s Group under clause 5.12 and which information or documentation is not the subject to legal professional privilege or

 

9

 

confidential information created or brought into existence by the Purchaser’s Group since Completion.

 

5.9           The only remedies available to the Purchaser in respect of this agreement together with any other documents referred to in this agreement (the “Transaction Documents”) are damages for breach of contract (subject to the limitations set out in this agreement) and, for the avoidance of doubt, it does not have any right to rescind or terminate any Transaction Documents either for breach of contract or for negligent or innocent misrepresentation or otherwise.

 

5.10         The Purchaser hereby represents and warrants that it has no knowledge of any fact which might lead to claims against the Vendor under the Warranties.

 

5.11         The Purchaser’s Group will take or procure the taking of all such steps and action as are necessary or as the Vendor may reasonably require in order to mitigate any claim under the Warranties and the Purchaser’s Group shall act in accordance with such request subject to the Company and the Purchaser being indemnified and adequately secured to the reasonable satisfaction of the Purchaser by the Vendor against all reasonable costs and expenses which may properly be incurred by reason of such action, including reasonable legal costs and expenses on a full indemnity basis. Nothing in this agreement shall or shall be deemed to relieve the Purchaser of any common law or other duty to mitigate any loss or damage incurred by it.

 

5.12         (a)       This clause shall apply in circumstances where:-

 

(i)          any claim is made against the Purchaser which may give rise to a claim by the Purchaser against the Vendor under the Warranties; or

 

(ii)         the Purchaser is or may be entitled to make any recovery from some other person any sum in respect of any facts or circumstances by reference to which the Purchaser has or may have a claim against the Vendor under the Warranties; or

 

(iii)        the Vendor shall have paid to the Purchaser an amount in respect of a claim under the Warranties and subsequent to the making of such payment the Purchaser becomes or shall become entitled to recover from some other person a sum which is referable to that payment.

 

(b)       The Purchaser shall and, where appropriate, the Company shall:-

 

(i)          (prior to taking any action against the Vendor under the Warranties in the case of clause 5.12(a)(i) and clause 5.12(a)(ii) and subject to the Company and the Purchaser being indemnified and adequately secured to the reasonable satisfaction of the Purchaser by the Vendor against all reasonable costs and expenses which may properly be incurred

 

10

 

by reason of such action) promptly and diligently take all such action (including reasonable legal costs and expenses on a full indemnity basis) as the Vendor may reasonably request including the institution of proceedings and the instruction of professional advisers approved by the Vendor {such approval not to be unreasonably withheld) to act on behalf of the Company and the Purchaser (as the case may be) to avoid, dispute, resist, compromise, defend or appeal against any such claim against the Purchaser as is referred to in clause 5.12(a)(i) or to make such recovery by the Purchaser as is referred to in clause 5.12(a)(ii) or clause 5.12(a)(iii), as the case may be, in accordance with the instructions of the Vendor to the intent that such action shall be delegated entirely to the Vendor provided that at all times the Purchaser and the Company shall continue to be indemnified and secured to the reasonable satisfaction of the Purchaser provided that, however, either:

 

(A)        the Purchaser and/or the Company (as the case may be) must consent in writing to the terms and conditions of any settlement or compromise of any claim or dispute; or

 

(B)         (1)       the Purchaser and/or the Company (as the case may be) must receive a full release, signed by all other parties to the dispute or claim, releasing the Purchaser and/or the Company (as the case may be) from all claims and liability arising out of the claim or dispute; and

 

(2)      the settlement or compromise of the claim or dispute must not hinder or impair the ability of the Purchaser and/or the Company (as the case may be) to carry on its or their business or businesses.

 

(ii)         so long as the Vendor shall have given adequate security therefor not settle or compromise any liability or claim to which such action is referable without the prior written consent of the Vendor which consent shall not be unreasonably withheld or delayed; or

 

(iii)        in the case of clause 5.12(a)(iii) only, promptly repay to the Vendor an amount equal to the amount so recovered or, if lower, the amount paid by the Vendor to the Purchaser.

 

5.13         The Vendor hereby agrees to indemnify and keep indemnified the Purchaser against any loss, liability, cost or expense (including, without limitation, environmental and rehabilitation liabilities) it may incur as a direct result of any act or omission of the Vendor and/or the Company prior to Completion in relation to any investigation permits (other than the Investigation Permits) held from time to time by the Company.

 

11

 

6.           CONFIDENTIAL INFORMATION

 

6.1         The Vendor shall:-

 

(a)          not and shall procure that no other member of the Vendor’s Group or any director, officer or employee or adviser or agent of the Vendor’s Group shall use or disclose to any person Confidential Information; and

 

(b)         use all reasonable endeavours to prevent the use or disclosure of Confidential Information by any person other than by members of the Purchaser’s Group.

 

6.2         Clause 6.1 does not apply to:-

 

(a)          disclosure of Confidential Information to or at the written request of the Purchaser;

 

(b)         use or disclosure of Confidential Information required to be disclosed by law or the London Stock Exchange;

 

(c)          disclosure of Confidential Information to professional advisers for the purpose of advising the Vendor; or

 

(d)         Confidential Information which becomes generally known other than by the Vendor’s breach of clause 6.1.

 

7.           ANNOUNCEMENTS

 

7.1         No party shall disclose the making of this agreement nor its terms (except those matters set out in the press release in the agreed terms) and each party shall procure that each of its Related Persons shall not make any such disclosure without the prior consent of the other party unless disclosure is:-

 

(a)         to its professional advisers; or

 

(b)         required by law or the rules of the London Stock Exchange or other regulatory body and disclosure shall then only be made by that party:-

 

(i)           after it has taken all such steps as may be reasonable in the circumstances to agree the contents of such announcement with the other party before making such announcement and provided that any such announcement shall be made only after notice to the other party/parties; and

 

(ii)         to the person or persons and in the manner required by law or the London Stock Exchange or as otherwise agreed between the parties

 

12

 

provided that this clause 7.1 does not apply to announcements, communications or circulars made or sent by the Purchaser after Completion to customers, clients or suppliers of any Group Company to the extent that it informs them of the Purchaser’s acquisition of the Shares or to any announcements containing only information which has become generally available.

 

7.2         The restrictions contained in clause 7.1 shall apply without limit of time and whether or not this agreement is terminated.

 

8.           COSTS

 

Unless expressly otherwise provided in this agreement each of the parties shall bear its own legal, accountancy and other costs, charges and expenses connected with the sale and purchase of the Shares. All Notaries’ costs and any taxes payable as a result of the implementation of anything contemplated hereunder shall be paid in accordance with the appropriate Spanish laws.

 

9.           EFFECT OF COMPLETION

 

9.1         The terms of this agreement (insofar as not performed at Completion and subject as specifically otherwise provided in this agreement) shall continue in force after and notwithstanding Completion.

 

9.2         The remedies of the Purchaser in respect of any breach of any of the Warranties shall continue to subsist notwithstanding Completion.

 

10.         FURTHER ASSURANCES

 

10.1      Following Completion the Vendor shall from time to time forthwith upon request from the Purchaser at the Vendor’s expense do or procure the doing of all acts and/or execute or procure the execution of all such documents in a form reasonably satisfactory to the Purchaser for the purpose of vesting in the Purchaser the full legal and beneficial title to the Shares and the Venture Loans and otherwise giving the Purchaser the full benefit of this agreement.

 

10.2      Without prejudice to the generality of clause 10.1, the Vendor shall for a reasonable period of time after Completion provide the Purchaser with reasonable access during normal business hours to those employees of the Vendor’s Group who have worked on the Las Cruces Project. The Purchaser undertakes to reimburse the Vendor, or the relevant member of the Vendor’s Group, immediately upon production of a invoice, in respect of any costs and expenses incurred as a result of the Vendor complying with its obligations hereunder. For the avoidance of any doubt nothing herein shall oblige the Vendor to comply with its obligations contained in this clause to the extent that such compliance would have a material adverse effect on or would otherwise substantially interfere in the ongoing business and affairs of the Vendor or any other member of the Vendor’s Group.

 

13

 

11.        ENTIRE AGREEMENT

 

Each party on behalf of itself and as agent for each of its Related Persons acknowledges and agrees with the other party (each such party acting on behalf of itself and as agent for each of its Related Persons) that:-

 

(a)         this agreement together with any other documents referred to in this agreement (together the “Transaction Documents”) constitute the entire and only agreement between the parties and their respective Related Persons relating to the subject matter of the Transaction Documents;

 

(b)         neither it nor any of its Related Persons have been induced to enter into any Transaction Document in reliance upon, nor have they been given, any warranty, representation, statement, assurance, covenant, agreement, undertaking, indemnity or commitment of any nature whatsoever other than as are expressly set out in the Transaction Documents and, to the extent that any of them have been, it (acting on behalf of itself and as agent on behalf of each of its Related Persons) unconditionally and irrevocably waives any claims, rights or remedies which any of them might otherwise have had in relation thereto;

 

PROVIDED THAT the provisions of this clause 11 shall not exclude any liability which any of the parties or, where appropriate, their Related Persons would otherwise have to any other party or, where appropriate, to any other party’s Related Persons or any right which any of them may have to rescind this agreement in respect of any statements made fraudulently by any of them prior to the execution of this agreement or any rights which any of them may have in respect of fraudulent concealment by any of them.

 

12.         VARIATIONS

 

This agreement may be varied only by a document signed by each of the Vendor and the Purchaser.

 

13.         WAIVER

 

13.1       A waiver of any term, provision or condition of, or consent granted under, this agreement shall be effective only if given in writing and signed by the waiving or consenting party and then only in the instance and for the purpose for which it is given.

 

13.2       No failure or delay on the part of any party in exercising any right, power or privilege under this agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

 

13.3       No breach of any provision of this agreement shall be waived or discharged except with the express written consent of the Vendor and the Purchaser.

 

14

 

13.4       The rights and remedies herein provided are cumulative with and not exclusive of any rights or remedies provided by law.

 

14.         NOTICES

 

14.1       Any notice, demand or other communication given or made under or in connection with the matters contemplated by this agreement shall be in writing and shall be delivered personally or sent by fax or prepaid first class post (air mail if posted to or from a place outside the United Kingdom):-

 

	
In the case of the Purchaser
    
	
to:-
    	
 
    	
 
    
	
Fax:
    	
 
    	
801   297 6940
    
	
Attention:
    	
 
    	
G.   Frank Joklik
    
	
In the case of the Vendor to:-
    	
 
    	
 
    
	
Fax:
    	
 
    	
0171   930 3249
    
	
Attention:
    	
 
    	
John   MacLean
    

 

and shall be deemed to have been duly given or made as follows:-

 

(a)          if personally delivered, upon delivery at the address of the relevant party;

 

(b)         if sent by first class post, two Business Days after the date of posting;

 

(c)          if sent by air mail, five Business Days after the date of posting; and

 

(d)         if sent by fax, when despatched;

 

provided that if, in accordance with the above provisions, any such notice, demand or other communication would otherwise be deemed to be given or made outside 9.00 a.m. - 5.00 p.m. on a Business Day such notice, demand or other communication shall be deemed to be given or made at 9.00 a.m. on the next Business Day.

 

14.2       A party may notify the other party to this agreement of a change to its name, relevant addressee, address or fax number for the purposes of clause 14.1 provided that such notification shall only be effective on:-

 

(a)         the date specified in the notification as the date on which the change is to take place; or

 

(b)         if no date is specified or the date specified is less than five Business Days after the date on which notice is given, the date falling five Business Days after notice of any such change has been given.

 

15.         COUNTERPARTS

 

This agreement may be executed in any number of counterparts which together shall constitute one agreement.    Any party may enter into this

 

15

 

agreement by executing a counterpart and this agreement shall not take effect until it has been executed by all parties.

 

16.          GOVERNING LAW AND JURISDICTION

 

16.1      This agreement (and any dispute, controversy, proceedings or claim of whatever nature arising out of or in any way relating to this agreement or its formation) shall be governed by and construed in accordance with English law.

 

16.2      Each of the parties to this agreement irrevocably agrees that the courts of England shall have exclusive jurisdiction to hear and decide any suit, action or proceedings, and/or to settle any disputes, which may arise out of or in connection with this agreement (respectively, “Proceedings” and “Disputes”) and, for these purposes, each party irrevocably submits to the jurisdiction of the English Courts.

 

16.3      Without prejudice to any other permitted mode of service the parties agree that service of any writ, notice or other document (“Documents”) for the purpose of any Proceedings begun in England shall be duly served upon it if delivered personally or sent by registered post, in the case of:-

 

(a)         the Vendor to Rio Tinto Metals Limited (marked for the attention of John MacLean); and

 

(b)         the Purchaser to MK Gold Company, 60 East South Temple, Salt Lake City, Utah 84111 (marked for the attention of G. Frank Joklik)

 

or such other person and address in England and/or Wales as the Vendor shall notify the Purchaser in writing or vice versa from time to time.

 

IN WITNESS   whereof this agreement has been executed on the date first above written.

 

16

 

SCHEDULE 1

 

The Warranties

 

For the purposes of this Schedule 1, where a warranty is qualified by the words “so far as the Vendor is aware” and/or “so far as the Company is aware” then the Vendor and/or the Company (as appropriate) shall only be deemed to be aware of those facts within the actual knowledge of either John MacLean, Mike Doyle, Mark Sawyer or Gobain Ovejero Zappino and no other employee, adviser, consultant or officer of the Company or any other member of the Rio Tinto Group. Furthermore it is hereby agreed that the Vendor, the Company and such named individuals shall be under no obligation whatsoever to make any enquiries, outside of information actually obtained in the course of performance of their duties, as to the accuracy of the warranties so qualified.

 

1.          VENDOR’S CAPACITY

 

1.1        Authorisations

 

The Vendor has obtained all corporate authorisations and all other applicable governmental, statutory, regulatory or other consents, licences, waivers or exemptions required to empower it to enter into and to perform its obligations under this agreement.

 

1.2        Proper Execution

 

The Vendor’s obligations under this agreement are enforceable in accordance with their terms.

 

1.3        Third Party Rights

 

The Vendor is able to sell and transfer the Shares and the Venture Loans to the Purchaser without the consent of any person and free of any pre-emptive rights or rights of first refusal.

 

1.4        Vendor’s Disclosure Letter accurate

 

The information in the Disclosure Letter is accurate in all material respects.

 

2.           THE SHARES AND SUBSIDIARIES

 

2.1         The Shares

 

(a)         The Vendor is the only legal and beneficial owner of the Shares.

 

(b)         The Company has not allotted any shares other than the Shares and the Shares are fully paid or credited as fully paid.

 

(c)         There is no Encumbrance in relation to any of the Shares.

 

17

 

(d)         Other than this agreement, there is no agreement, arrangement or obligation requiring the creation, allotment, issue, sale, transfer, redemption or repayment of, or the grant to a person of the right (conditional or not) to require the allotment, issue, sale, transfer, redemption or repayment of, a share in the capital of the Company (including an option or right of pre-emption or conversion).

 

2.2         Venture Loans

 

(a)         The Vendor is the only legal and beneficial owner of the Venture Loans.

 

(b)         The Company has no debts which individually are in excess of US$20,000 (other than trade debts, amounts owed to employees incurred by the Company in the ordinary course of the Company’s activities or the Venture Loans).

 

(c)         There is no Encumbrance in relation to any of the Venture Loans.

 

2.3         Subsidiaries

 

(a)             The Company does not have any subsidiaries. 

 

3.             ACCOUNTS

 

3.1         General

 

The Accounts have been prepared and audited in accordance with the standards, principles and practices specified on the face of the Accounts applied on a consistent basis and subject thereto in accordance with the law and applicable standards, principles and practices generally accepted in Spain consistently applied.

 

3.2         Changes since Accounts Date

 

Since the Accounts Date:-

 

(a)         the Company has not contractually committed to make capital expenditure which is outstanding for fixed assets exceeding in total US$10,000, or contractually committed to incur, a  commitment or connected commitments involving capital expenditure which is outstanding for fixed assets exceeding in total US$5,000;

 

(b)         the Company has not disposed of any of its assets with a book value of more than US$5,000;

 

(c)         the Company has not incurred any material liabilities in aggregate (other than liabilities incurred in the ordinary course of the Company’s activities) in excess of US$10,000.

 

18

 

(d)         no dividends, bonus issues or other distributions or repayments of loans (including Venture Loans) have been declared, made or paid by the Company.

 

4.           ASSETS

 

4.1         The principal assets of the Company are its right, title and interest in the Properties, the investigation Permits, the Technical Data and associated exploration expenditure (“Sale Assets”).

 

4.2         Title

 

(a)                            There are no Encumbrances, nor has the Company agreed to create any Encumbrances, over the Sale Assets or any part of its undertaking or assets and each asset used by the Company (tangible or intangible) is:-

 

(i)           legally and beneficially owned by the Company;

 

(ii)          where capable of possession, in the possession of the Company;

 

(iii)         used solely by the Company; and

 

(iv)        fully paid for or otherwise provided for in the Accounts.

 

4.3         Intellectual Property Rights

 

Details of all intellectual property or know-how owned by third parties (including members of the Vendor’s Group) which were used by the Company in preparing the Feasibility Study are contained in the Data Room.

 

5.           CONTRACTUAL MATTERS

 

5.1        Material Agreements

 

(a)         Copies of all agreements and contracts to which the Company is a party or otherwise bound which are material to the activities undertaken by the Company are contained in the Data Room (“Material Agreements”) and referred to in the Index of Data Room Documents in the agreed terms.

 

(b)         Each Material Agreement constitutes a valid and binding obligation of the Company and:

 

(i)            is within the ordinary course of ordinary activities of the Company;

 

(ii)           is at arm’s length; and

 

19

 

(iii)          is not with the Vendor or any member of the Vendor’s Group.

 

5.2         No  Restrictive Covenants

 

The Company is not a party to any Material Agreement which prevents it from engaging in mining or exploration operations.

 

5.3         Change of Control

 

The Company is not a party to any Material Agreement (including, for the purposes of this waranty, the Investigation Permits) under which any party is entitled or likely, as a result of a change in ownership of the Shares:

 

(a)         to terminate the agreement; or

 

(b)         to require the adoption of terms which are less favourable to the Company than the current terms.

 

5.4         No Default

 

The Company, so far as it is aware is not, and has received no written notice that it is in default or would be in default, but for the requirements of notice or lapse of time, or both under any Material Agreement. So far as the Company is aware, no other party to a Material Agreement is in default, or would be in default but for the requirement of notice or lapse of time, or both, under any Material Agreement.

 

6.            INVESTIGATION PERMITS

 

6.1         Copies of all the Company’s current permits, authorisations and consents including, without limitation, the Investigation Permits which in each case are material and relevant to its current activities are contained in the Data Room (collectively referred to as the “Permits”).

 

6.2         The Company has received no written notice that any of the Permits are not in full force and effect. So far as the Company is aware, each Permit is in full force and effect.

 

6.3         No Breach

 

The Company has received no written notice that it is in breach of, or default under, any of the Permits. So far as the Company is aware, the Company is not in breach of, or default under, any of the Permits.

 

6.4         No Notices

 

The Company has not received written notice from any third party (including any government agency) in respect of any Permit and, so far as the Vendor is aware no proposal has been made:

 

20

 

(a)         in respect of the compulsory acquisition or resumption of any part of the lands the subject of the Investigation Permits (“the Land”); and

 

(b)         requiring expenditure to be made or in respect of the Land in excess of US$10,000.

 

6.5           Royalties

 

So far as the Vendor is aware, none of the land nor any mineral or metal production from the Land is or will be subject to any royalty, production payment or similar right save as or arising under the laws of Spain or this agreement.

 

7.             LIABILITIES

 

7.1           Guarantees and Indemnities

 

The Company is not a party to any guarantee, indemnity or other agreement (including letters of comfort) to secure or incur a financial or other obligation with respect to another person’s obligation.

 

8.             LITIGATION AND COMPLIANCE WITH LAW

 

8.1           Litigation

 

(a)           The Company has not during the six years ending on the date of this agreement been involved, in a civil, criminal or arbitration proceeding in any jurisdiction and, so far as the Vendor is aware no such proceedings are pending or threatened by or against the Company.

 

(b)           There is no outstanding judgement, order, decree, arbitral award or decision of a  court, tribunal, arbitrator or governmental agency in any jurisdiction against the Company.

 

(c)           So far as the Vendor is aware, the Company is not the subject of any investigation by any governmental
 agency.

 

8.2           Corporation Existence

 

The Company:

 

(a)           is a company organised and existing in accordance with the laws of Spain; and

 

(b)           has the power to own its assets and carry on its business as it is now being conducted.

 

21

 

8.3           Compliance with Constituent Documents

 

So far as the Vendor is aware, the business affairs of the Company have been conducted in accordance with its constitution.

 

9.             EMPLOYEES

 

9.1           Particulars of Offers

 

The Data Room contains the names and date of commencement of employment of every employee of the Company.

 

9.2           Remuneration and Benefits

 

The particulars of all employees contained in the Data Room show all remuneration and other benefits:-

 

(a)           actually provided; and

 

(b)           which the Company is bound to provide (whether now or in the future)

 

to each employee of the Company and are true and complete in all material respects and include particulars of and details of participation in all profit sharing, incentive, bonus, commission, share option, medical, permanent health insurance, directors’ and officers’ insurance, travel, car, redundancy and other benefit schemes, arrangements and understandings (the “Schemes”)  operated for all or any employees or former employees of the Company or their dependants whether legally binding on the Company or not.

 

10.           PROPERTIES

 

All Property

 

The Properties comprise all the freehold and leasehold land owned, used or occupied by the Company.

 

11.           TAXATION

 

11.1         Payment of Tax

 

The Company has paid all Tax required to be paid by it as at the date of this Agreement.

 

11.2         Provision in Accounts

 

Adequate provision has been made in the Accounts for any Tax which Vendor or the Company is aware is payable or may become payable but which is unpaid.

 

22

 

11.3         Withholding Tax

 

Any obligation on the Company under any Tax Law to withhold amounts at source including but not limited to withholding Tax, PAYE, Tax, value added tax and royalties has been complied with.

 

11.4         Documents stamped

 

Any Duty payable in any Tax Law in relation to any transaction or agreement to which either the Company is or has been a party to or by which the Company derives, or has derived a substantial benefit, has been paid.

 

11.5         Records

 

So far as the Vendor is aware the Company has maintained proper and adequate records to enable it to comply with its obligations to:

 

(a)        prepare and submit any information, notices, computations, returns and payments required in respect of any Tax Law;

 

(b)        prepare any accounts necessary for the compliance of any Tax Law; and

 

(c)        retain necessary records as required by any Tax Law.

 

11.6         Returns submitted

 

The Company has submitted any necessary information, notices, computations and returns to the relevant government agency in respect of any Tax or any duty relating to its businesses and activities.

 

11.7         No disputes

 

There are no disputes with any government agency in respect of any Tax or duty.

 

12.           SOLVENCY

 

12.1         No liquidation or winding-up

 

The Company has not gone into liquidation or passed a winding-up resolution nor received a notice under any applicable law which will result in the Company being wound up or otherwise being put into liquidation.

 

12.2         No petition

 

No petition or other process for winding-up has been presented or threatened against the Company .

 

23

 

 

12.3        No writ of execution

 

No writ of execution has been issued and served on the Company.

 

12.4        No receiver

 

No receiver or receiver and manager of any part of the undertaking or assets of the Company has been appointed.

 

13.          POWERS OF ATTORNEY

 

All current powers of attorney given by the Company and which are currently in force are contained in the Data Room.

 

14.          SHAREHOLDINGS AND MEMBERSHIPS

 

14.1         Shareholdings

 

The Company is not the holder or the beneficial owner of any shares or other capital or securities convertible into shares or other capital in any other company.

 

14.2         Memberships

 

The Company is not a member of any joint venture, partnership or unincorporated association (other than a recognised trade association).

 

14.3         Restrictive trade practices

 

The Company is not a party to any agreement, contract, arrangement or understanding whether legally enforceable or not which is in breach of any restrictive trade practices legislation and has not engaged in any conduct or practice in breach of that legislation.

 

24

 

SCHEDULE 2

 

Properties

 

	
Identification
    	
 
    	
Address
    	
 
    	
Annual
   Rent (ptas)
   No V.A.T.
    	
 
    	
Amount of
   notice
   required to
   terminate
    	
 
    	
Term
    
	
Cartuja   Office
    	
 
    	
Americo   Vespucio, 39 Isla Cartuja 41092 Sevilla
    	
 
    	
10.800.696
    	
 
    	
3   months
    	
 
    	
31/12/99
    
	
Core   shed
    	
 
    	
Industrial   state Navexpo, 35B y 36 Ctra.Santiponce-Camas KM 4.100 Valenciana de la   Concep. Sevilla
    	
 
    	
4.183.776
    	
 
    	
3   months
    	
 
    	
31/03/00
    
	
Gerena   office
    	
 
    	
Avda.   1° de Mayo, 6 Gerena – Sevilla
    	
 
    	
900.00
    	
 
    	
1   month
    	
 
    	
Each   month
    
	
Gerena   House
    	
 
    	
Urb.   Zarzalejos C/Paloma Torcaz 59 Gerena – Sevilla
    	
 
    	
1.560.000
    	
 
    	
1   month
    	
 
    	
24/10/99
    

 

25

 

SCHEDULE 3 

 

Royalty

 

1.             A Royalty of 1.5% (one and a half per cent) of “Sales Revenue” shall be paid by Purchaser to Vendor in respect of all sales realised in any calendar month in which the “Trigger Price” is exceeded. For the purposes of this Schedule, the “Trigger Price” is exceeded when the official monthly average LME Cash Settlement price for Grade A copper is equivalent to or greater than $0.80 per pound of copper.

 

2.             “Sales Revenue” shall mean:-

 

(A)          in the case of sales of copper metal, whichever is the higher of:

 

either             (1)   the invoiced volume of metal sold in any month multiplied by the actual official monthly average LME Cash Settlement price for Grade A copper for that relevant month; or 

(2)   the invoiced volume of metal sold in any month multiplied by the actual price realised by the Purchaser (including any premium),

 

for all metal produced by the Purchaser from ore mined from the land which is the subject of the Investigation Permits (“the Permit Land”)

 

(B)           in the case of sales of copper produced from the Permit Land which is sold in any form which is partly or not wholly processed, “Sales Revenue” shall mean whichever is the higher of:

 

either             (1)   the actual final invoice value for the volume of partly processed copper sold in the relevant month. (For these purposes, final invoice value shall mean the full value of the cargo as adjusted for final weight, assays and prices); or

 

(2)   the value for the volume of partly processed copper sold which would have been invoiced if the copper price used in calculating the relevant amount was the actual official monthly LME Cash Settlement price for Grade A copper for the month in which the final invoice is settled,

 

for all partly processed copper produced by the Purchaser and mined from the land which is the subject of the Permit Land.

 

In calculating the Sales Revenue for the purposes of paragraphs 2(A) and (B) above the Purchaser may deduct the following costs and expenditures:

 

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(a)           freight, transportation and insurance costs of copper metal from the treatment plant and/or refinery to the point of sale;

 

(b)           the amount of any royalties payable to the Spanish government and any other royalty payable in respect of ore mined, or copper metal produced from the Permit Land;

 

(c)           sales commissions and other sales representation costs in connection with the sales of copper metal incurred on an arms-length basis in the ordinary course of business by the Purchaser,

 

but such costs and expenditures shall not include operating costs (including without limitation mining, operating, refining, financing and related costs, and administration costs).

 

In addition, in calculating the Sales Revenue for the purposes of paragraph 2(B) above the Purchaser may deduct smelting and refining charges or such other deductions which are directly related to the further processing of the product into cathode copper.

 

3.             The Purchaser must maintain proper records of:

 

(a)           tonnes of ore mined;

 

(b)           information or returns regarding the payment of royalties, taxes or other payments to the Spanish government in respect of mining on the Permit Land;

 

(c)           all other information necessary to determine “Sales Revenue” and to allow Royalty to be calculated; and

 

(d)           all amounts paid by the Purchaser to the Vendor under paragraph 4 below,

 

together called the “Purchaser’s Records”.

 

4.             On each occasion the Purchaser is obliged to provide a statement under paragraph 5, and within 12 months thereafter, the Vendor may at its own expense:

 

(a)           upon reasonable notice to the Purchaser request and have access during the Company’s normal business hours at premises maintained by the Company in Spain to inspect the Purchaser’s Records;

 

(b)           require an audit of the Purchaser’s Records to be performed by an auditor nominated by the Vendor. Any such audit of the Purchaser’s records shall be conducted in accordance with accounting principles generally applied in Spain;

 

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(c)           if such an audit discloses a discrepancy between the amount paid by the Purchaser pursuant to paragraph 5 and the amount which should have been paid pursuant to that paragraph, then if there has been an underpayment by the Purchaser, the Purchaser must pay the underpayment immediately, and if there has been an overpayment, then the overpayment may be set off by the Purchaser against any further amounts payable to the Vendor pursuant to paragraph 5.

 

5.             Within 21 (twenty one) days of the end of any applicable calendar month in which the “Trigger Price” has been exceeded, the Purchaser will send to the Vendor a statement summarising:

 

(a)           the quantity of copper metal (expressed in lbs) produced during the calendar month in which the “Trigger Price” is effective from ore mined from the Permit Land;

 

(b)           the Purchaser’s calculation of “Sales Revenue” for the respective calendar month; and

 

(c)           the quantity of copper (metal and concentrate) sold during the relevant month.

 

The Purchaser shall at the same time pay the Vendor the relevant Royalty in US dollars by telegraphic transfer to a bank to be nominated by Vendor.

 

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Executed   by Mr M R Sawyer, duly appointed
    	
 
    	
 
    	
)
    	

    
	
attorney,   for and on behalf of
    	
 
    	
 
    	
)
    
	
RIO TINTO METALS LIMITED
    	
 
    	
 
    	
)
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Attorney
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Executed   by G. Frank Joklik
    	
 
    	
 
    	
)
    	

    
	
for   and on behalf of 
    	
 
    	
 
    	
)
    
	
MK GOLD COMPANY
    	
 
    	
 
    	
)
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Director
    	
 
    	
 
    
						

 

29

 

EXECUTION COPY

 

ASSIGNMENT, NOVATION AND RELEASE AGREEMENT

 

This Assignment, Novation and Release Agreement (this “Assignment and Novation”) is made and entered into as of August 9, 2005 by and between Rio Tinto Metals Limited, a company incorporated under the laws of England (“Rio Tinto”), having a mailing address at 6, St. James’s Square, London SW1Y 4LD, England, Attention: Company Secretary; MK Resources Company formerly known as MK Gold Company, a Delaware corporation (“MK Resources”), having a mailing address at 60 East South Temple, Salt Lake City, Utah 84111, Attention: Chief Financial Officer; and Cobre Las Cruces S.A. (formerly known as RioMin Exploraciones SA), incorporated under the laws of Spain (“CLC”), having a mailing address at Avendia Primero de Mayo, N° 46, 41860, Gerena, Spain.

 

BACKGROUND

 

A.            Rio Tinto and MK Resources are parties to that certain Agreement for the sale and purchase of all of the issued shares and venture loans of CLC (then known as RioMin Exploraciones SA) (the “RioMin Purchase Agreement”) pursuant to which MK Resources purchased all of the outstanding shares of CLC. CLC owns the Las Cruces copper mining project in southern Spain.

 

B.             Pursuant to Section 2.3 and Schedule 3 of the RioMin Purchase Agreement, MK Resources agreed to pay Rio Tinto a 1.5% royalty on any copper sales from the Las Cruces project at a price equal to or exceeding $0.80 per pound (the “Royalty Obligations”).

 

C.             On May 2, 2005, MK Resources and Leucadia National Corporation, which owns 72.1% of MK Resources’s outstanding common stock (“Leucadia”), entered into a Share Purchase Agreement dated May 2, 2005 (the “Share Purchase Agreement”) with Inmet Mining Corporation (“Inmet”) to sell to Inmet 70% of the outstanding common stock of MK Gold Exploration B.V., incorporated under the laws of the Netherlands, which currently owns all the outstanding shares of CLC.

 

D.             The parties to this Assignment and Novation desire to assign the Royalty Obligations to CLC and release MK Resources from the Royalty Obligations.

 

TERMS

 

NOW, THEREFORE, in consideration of the sum of one dollar (receipt of which is hereby acknowledged), the parties agree as follows:

 

1.               Assignment. Effective as of the date of this Assignment (the “Effective Date”). MK Resources hereby assigns, transfers, and conveys to CLC all of MK Resources’ rights and obligations under or in respect of the Royalty Obligations of the RioMin Purchase Agreement.

 

2.               Assumption. Effective as of the Effective Date, CLC hereby accepts the assignment set forth in Section 1 above and assumes and agrees to pay, perform, undertake and fully discharge all of the obligations and duties of and pertaining to the Royalty Obligations of the RioMin Purchase Agreement.

 

 

3.                Release of MK Resources. Rio Tinto hereby releases MK Resources from all its obligations under the Royalty Obligations and will look solely to CLC for the fulfillment of those obligations.

 

4.                Other Terms Unchanged. Except as specifically modified by this Assignment and Novation, the RioMin Purchase Agreement shall be unchanged and remain in full force pursuant to its terms.

 

5.                Miscellaneous Provisions.

 

(a)           Rio Tinto’s Costs. MK Resources and CLC shall be jointly and severally liable for all out-of-pocket costs and expenses reasonably incurred by Rio Tinto in preserving its rights under the RioMin Purchase Agreement in respect of the Royalty Obligations following the assignment and novation the subject of this Assignment and Novation, but only to the extent such costs and expenses are incurred because of or as a result of or arising out of the assignment and novation of the Royalty Obligations to CLC and will pay an amount equal to such costs and expenses upon demand made by Rio Tinto accompanied by reasonable particulars of the costs and expenses in question.

 

(b)           Stamp Duties etc. Any and all stamp duty or similar taxes, free or duties payable in respect of this Assignment and Novation shall be for the account of MK Resources and CLC, and Rio Tinto shall have no liability of any kind for any such duty(ies), taxes or fees.

 

(c)           Entire Agreement; Amendment. This Assignment and Novation, together with the RioMin Purchase Agreement (as modified by this Assignment and Novation), constitutes the entire agreement between the parties relative to the subject matter hereof. Any prior negotiations, correspondence, or understandings relative to the subject matter hereof shall be deemed to be merged into this Assignment and Novation and shall be of no further force or effect. This Assignment and Novation may not be amended or modified except in writing executed by all the parties hereto.

 

(d)           Additional Documents. The parties shall execute all instruments, deeds and documents and take all actions as may be reasonably required to effectuate this Assignment and Novation but the costs of or related to any such execution or action shall be for the sole account of MK Resources and CLC jointly and severally.

 

(e)           Severability. Any term or provision of this Assignment and Novation that is held invalid or unenforceable shall be severed from this Assignment and Novation and the remaining terms and provisions shall survive and constitute the entire agreement of the parties.

 

(f)            Successors. This Assignment and Novation shall be binding upon and inure to the benefit of the parties and their successors.

 

(g)           Governing Law. This Assignment and Novation shall be governed and construed in accordance with the laws of England.

 

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(h)           Counterparts. This Assignment and Novation may be executed in counterparts, each of which shall be deemed to be an original but all of which together shall constitute a single agreement.

 

[The remainder of this page is intentionally left blank.]

 

3

 

IN WITNESS WHEREOF, the parties have executed this Assignment and Novation as of the date first above written.

 

	
 
    	
RIO   TINTO METALS LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   [ILLEGIBLE]
    
	
 
    	
Name:   [ILLEGIBLE]
    
	
 
    	
Title:   Director
    
	
 
    	
 
    
	
 
    	
MK   RESOURCES COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
COBRE   LAS CRUCES S.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

SIGNATURE PAGE TO ASSIGNMENT, NOVATION AND RELEASE AGREEMENT FOR RIO TINTO ROYALTY

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