Document:

ex-10.1

 PROMISSORY NOTE
 

 	 	
	 $310,000.00
	 Lafayette, California

 

 October 14, 2015
 

 FOR VALUE RECEIVED, the undersigned, Blue Earth, Inc., a Nevada corporation, with offices at 2298 Horizon Ridge Parkway, Suite 205, Henderson, Nevada 89052 (“Maker”), hereby unconditionally promises to pay to the order of G. Robert Powell ("Payee"), his successors and assigns, an individual residing at P.O. Box 1204, Lafayette, California 94549 or at such other place as the Payee or any holder hereof may from time to time designate, the principal sum of Three Hundred Ten Thousand Dollars ($310,000.00) with an annual interest rate of nine (9%) percent,  in lawful money of the United States in immediately available funds, as follows:
 

 1.
 Payment.  The principal amount of this Note totals Three Hundred Ten Thousand Dollars ($310,000.00 which sum shall be due and payable in one lump sum payment of principal, accrued interest and any transaction costs due upon the earlier of (a) sixty (60) days from the date hereof, or (b) the next completed equity or debt financing of the Company (the “Maturity Date”).  The proceeds of this loan are to be used by Maker for payroll purposes only.
 

 2.
 Interest.  The principal of this Note shall bear interest at the rate of nine (9%) percent per annum accruing from the date hereof until the Maturity Date.  Interest shall be calculated on a monthly basis commencing with the date hereof, computed on the basis of a three hundred sixty (360) day year and the actual number of days  elapsed, on the unpaid balance at the time of the expiration of each relevant period (the “Interest”).
 

 3.
 Prepayment.  Maker may prepay, at any time, the unpaid principal balance of this Note or any portion thereof, without premium or penalty.  Any prepayment will be applied first against accrued, but unpaid interest and then against the outstanding principal balance.
 

 4.
 Events of Default.  Upon the occurrence of any of the following events (each, an “Event of Default" and collectively, the “Events of Default”):
 

 (a)
 failure by Maker to pay the principal or interest of the Note when due, whether on the date fixed for payment or by acceleration or otherwise; provided, however, that failure to pay any principal or interest when due shall not be an Event of Default if such overdue payment is paid within five (5) business days of such due date; or
 

 (b)
 if Maker shall make a general assignment for the benefit of creditors or consent to the appointment of a receiver, liquidator, custodian, or similar official of all or substantially all of its properties, or any such official is placed in control of such properties, or Maker shall commence any action or proceeding or take advantage of or file under any federal or state insolvency statute, including, without limitation, the United States Bankruptcy Code or any political subdivision thereof, seeking to have an order for relief entered with respect to it or seeking adjudication as a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution, administration, a voluntary arrangement, or other relief with respect to it or its debts; or
 

  
 

 
 

 (c)
 there shall be commenced against Maker any action or proceeding of the nature referred to in paragraph (b) above or seeking issuance of a warrant of attachment, execution, distraint, or similar process against all or any substantial part of the property of Maker, which results in the entry of an order for relief which remains undismissed, undischarged or unbonded for a period of sixty (60) days;
 

 then, in addition to all rights and remedies of Payee under applicable law or otherwise, all such rights and remedies being cumulative, not exclusive and enforceable alternatively, successively and concurrently, at its option, Payee may declare all amounts owing under this Note, to be due and payable, whereupon the then unpaid balance hereof shall forthwith become due and payable plus all costs and expenses of collection or enforcement hereof, including, but not limited to, attorneys' fees and expenses.
 

 5.
 Miscellaneous.
 

 (a)
 Maker (i) waives diligence, demand, presentment, protest and notice of any kind, (ii) agrees that it will not be necessary for any holder hereof to first institute suit in order to enforce payment of this Note and (iii) consents to any one or more extensions or postponements of time of payment, release, surrender or substitution of collateral security or forbearance or other indulgence, without notice or consent.  The pleading of any statute of limitations as a defense to any demand against Maker is expressly hereby waived.
 

 (b)
 All payments shall be made into such account or accounts as the Payee may from time to time specify for that purpose.  All payments to be made to the Payee under this Note shall be made free and clear of and without deduction for or on account of any tax, withholding, charges, set-off or counterclaim.
 

 (c)
 All notices, demands, requests and other communications required or otherwise given under this Note shall be in writing and shall be deemed to have been duly given if: (i) delivered by hand against written receipt therefor, (ii) forwarded by a third party company or governmental entity providing delivery services in the ordinary course of business which guarantees delivery the following business day, (iii) mailed by registered or certified mail, return receipt requested, postage prepaid, or (iv) transmitted by facsimile transmission electronically confirmed for receipt, in full, by the other party no later than 5:00 pm, local time, on the date of transmission to the first above stated addresses, or at such other address as such party shall have furnished to each of the other parties hereto in accordance with this Section 5(c).  Each such notice, demand, request or other communication shall be deemed given (i) on the date of such delivery by hand, (ii) on the first business day following the date of such delivery to the overnight delivery service or facsimile transmission, or (iii) three (3) business days following such mailing. 
 

 (d)
 The provisions of this Note may not be changed, modified or terminated orally, but only by an agreement in writing signed by the party to be charged, nor shall any waiver be applicable except in the specific instance for which it is given.
 

 

 2
 

 
 

 (e)
 This Note shall be governed by and construed under the laws of the State of New York applicable to contracts made and to be performed entirely within the State of California. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of San Francisco, State of California for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.  Maker hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.
 

 (f)
 Successors and Assigns.  The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors (whether by merger or otherwise) and permitted assigns of the Payee.  Maker may not assign this Note or delegate his duties hereunder without the prior written consent of Payee.  This Note shall bind Maker and its permitted assigns.
 

 (g)
 If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect.  Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.
 

 (h)
 If any term or provision of this Note shall be held invalid, illegal or unenforceable, the validity of all other terms and provisions shall in no way be affected thereby.
 

 (i)
 Whenever used herein, the terms "Maker" and "Payee" shall be deemed to include their respective successors and permitted assigns.
 

 IN WITNESS WHEREOF, this Note has been executed and delivered on the date first written above by the duly authorized representative of the Maker.
 

 BLUE EARTH, INC.
 

 By:  /s/ Robert Potts
 Name:  Robert Potts
 Title:   President and Chief Operating Officer
 

 

 

 

 

 3Scandium International Mining Corp.: Exhibit 10.1 - Filed by newsfilecorp.com

 

 

	 	 	Royalty Deed 
	 	 	 
	 	 	Dated
      October 13, 2015 
	 	 	 
	 	 	 
	 	 	Nyngan Scandium Project, NSW, Australia
  
	 	 	 
	 	 	EMC
      METALS AUSTRALIA PTY. LTD. 
	 	 	ABN 80
      160 223 325 (Payer) 
	 	 	 

	 	 	UMGENI
      HOLDINGS INTERNATIONAL LIMITED (Payee) 

 

 

 

Table of Contents 

	1
      	DEFINITIONS
      AND INTERPRETATION 	2
      
	 	 	 
	2
      	ROYALTY
      	11
      
	 	 	 
	3
      	MINING
      OPERATIONS 	14
      
	 	 	 
	4
      	INFORMATION
      AND AUDIT 	15
      
	 	 	 
	5
      	RELINQUISHED
      TENEMENTS 	17
      
	 	 	 
	6
      	REGISTRATION
      	18
      
	 	 	 
	7
      	ASSIGNMENT
      AND ENCUMBRANCES 	18
      
	 	 	 
	9
      	TAX
      	22
      
	 	 	 
	10
      	REPRESENTATIONS
      AND WARRANTIES OF THE PAYER 	22
      
	 	 	 
	11
      	REPRESENTATIONS
      AND WARRANTIES OF THE PAYEE 	23
      
	 	 	 
	12
      	SURVIVAL
      OF REPRESENTATIONS AND WARRANTIES 	24
      
	 	 	 
	13
      	DISPUTE
      RESOLUTION 	24
      
	 	 	 
	14
      	NOTICES
      	25
      
	 	 	 
	15
      	GENERAL
      	27
      
	 	 	 
	SCHEDULE
      A – TENEMENTS 	29
      

	  	Page i 

	Between: 	 
	 	 
	 	EMC METALS AUSTRALIA PTY. LTD.
    
	 	 
	 	(Payer) 
	 	 
	 	Suite 501, 1430 Greg Street 
	 	Sparks, Nevada 
	 	USA 89431 
	And: 	 
	 	 
	 	UMGENI HOLDINGS INTERNATIONAL
      LIMITED 
	 	 
	 	(Payee) 
	 	 
	 	Clifton House 
	 	75 Fort Street 
	 	PO Box 1350 
	 	Grand Cayman 
	 	KY1-1108 
	 	Cayman Islands 

Background: The Payee wishes to acquire the Royalty (as
defined herein) from the Payer, and the Payer wishes to grant the Royalty to the
Payee, on the terms provided in this Royalty Deed. 

	 	Page 1
    

Agreed Terms 

	1
    	
      DEFINITIONS AND
INTERPRETATION

	1.1 	
      Definitions

Unless the context otherwise requires,
the following expressions have the respective meanings in this Deed: 

	 	Accounting Standards 	Means either U.S. Generally Accepted Accounting
      Principles or Canadian Generally Accepted Accounting Principles as
      applicable from time to time pursuant to the reporting requirements of the
      parent company of the Payer, provided that if no such reporting
      requirements apply, then it shall mean Australian Generally Accepted
      Accounting Principles. 
	 	  	  
	 	Adjustment 	means any adjustment to a Royalty payment in
      any particular Quarter: 

	
       
	
      (a) 
	
      which arises from an adjustment to the amount paid to the
      Payer in a previous Quarter, based on the actual Products recovered after
      refining;

	
       
	
       
	
       

	
       
	
      (b) 
	
      to correct any accounting or recording errors from
      previous Quarters;

	
       
	
       
	
       

	
       
	
      (c) 
	
      which arises as a result of a review and reassessment of
      transfer pricing by a Governmental Authority pursuant to (c) of the
      definition of Transfer Price herein;

	
       
	
       
	
       

	
       
	
      (d) 
	
      which is otherwise made in accordance with this Deed;
      or

	
       
	
       
	
       

	
       
	
      (e) 
	
      which is agreed by the
parties.

		Annual Statement 	Means, a statement signed by an authorized
      director or officer of the Payer confirming the accuracy of such statement
      setting out the calculation of the Royalty payment for an annual period
      consisting of four Quarters ending on the last day of the Payer’s fiscal
      year, and including the following information, in each case, in sufficient
      detail and with sufficient supporting documentation, to enable the Payee
      to verify the accuracy thereof: 

	 	(a) 	
      all the information provided for in (a) through (d) of
      the definition of Statement herein, annual period covering the immediately preceding four Quarters
comprising the Payer’s fiscal year, and 

	 	Page 2 

	 	(b) 	
      a certificate of an independent accounting firm
      confirming the information used to provide the information in (a) above is
      (i) consistent with the information used to prepare the annual
      unconsolidated audited financial statements of the Payer for such fiscal
      year, and (ii) consistent with the information used to determine any
      income tax or royalty payable to a Governmental
  Authority;

accompanied by a true and complete
copy of the unconsolidated audited financial statements of the Payer prepared in
accordance with Section 4.2(a) for such fiscal year of the Payer. 

	 	Arm’s Length Terms 	means, for the purposes of calculating the
      Royalty, prices and terms no less favourable to the Payer or any Related
      Person than those which would be agreed to and paid in a similar
      transaction under similar circumstances with a Third Party. 
	 	  	  
	 	Assumption Deed 	means a deed in such form as may be reasonably
      required by the party for whose benefit the deed is to be made (acting in
      a timely and prompt manner) whereby the assignee or other recipient of an
      interest in the Tenements, or any rights in relation to Products extracted
      and recovered from the Mining Area agrees, in favour of the party for
      whose benefit the deed is to be made, to assume, be bound by and perform
      the obligations in this Deed of the party from which it acquires its
      interest and rights, and makes the same representations, warranties as
      those made by the assigning party, in favour of the remaining party.

	 	  	  
	 	Business Day 	means a day on which trading banks are open for
      business in Sydney, New South Wales, Australia. 
	 	  	  
	 	Commencement Date 	means the later of the Execution Date and the
      date on which the extraction or recovery of any Product commences from the
      Mining Area. 
	 	  	  
	 	Concentrate 	means Ore in which any particular mineral (as
      defined in the Mining Act) is the principal component having commercial
  value. 

	 	Page 3 

	 	Confidential Information 	means all confidential, non-public or
      proprietary information of a party regardless of how the information is
      stored or delivered, which is exchanged between the parties before, on or
      after the Execution Date in connection with this Deed, other than
      information: 

	 	(a) 	
      that is in or becomes part of the public domain other
      than through breach of this Deed or an obligation of confidence owed to
      the disclosing party; or

	 	 	 
	 	(b) 	
      which the recipient can prove by credible evidence was
      already known by it at the time of disclosure to it (unless such knowledge
      arose from disclosure of information in breach of an obligation of
      confidentiality).

Without limiting the foregoing, any
information regarding the marketing and pricing of Product, whether or not
refined or upgraded, including information contained in any Statement regarding
the Net Value, Transfer Price, Gross Proceeds and Deductible Expenses, is deemed
to be confidential information.

	 	Control 	means, when used to describe the relationship
      between a particular Person or group of Persons and another Person or
      group of Persons, any circumstance whereby such Person or Persons
      possesses, directly or indirectly, the power to direct or cause the
      direction of the management and policies of the other Person or Persons,
      whether through the ownership of voting securities, by contract or
      otherwise; and the term “Controlled” shall have a similar meaning.
    
	 	 	 
	 	Deductible Expenses	
      means the aggregate amount paid by the Payer, as calculated in US
      Dollars, for the relevant Quarter for: 

      (a) 

	 		 
		(i) 	all road, sea and rail freight, transportation
      and security, including forwarding, shipping, demurrage, delay and
      insurance costs, incurred by the Payer from the Tenements to the first
      point of delivery of the Products to any smelter, refinery or other places
      of processing or treatment of such Products; and 
	 	 	 
	 	(ii) 	all stockpiling and storage of any Product;
  

	 	Page 4 

except that no deduction shall be made
for any costs and expenses listed in (i) and (ii) above, that are incurred as a
result of one or more payments to a Related Person of the Payer and that are in
excess of those that would be paid or incurred by the Payer on Arm’s Length
Terms; and 

(b)          GST, if the aggregate amount paid
to the Payer or any Related Person includes GST. 

	 	Encumbrance 	means any security interest, mortgage, pledge,
      lien, charge, title retention arrangement, trust or power, or other form
      of security or interest having effect as a security for the payment of any
      monetary obligation or the observance of any other obligation whether
      existing or agreed to be granted or created. 
	 	  	  
	 	Encumbrancee 	means a person who is entitled to the benefit
      of an Encumbrance over the Tenements, the Royalty or over a party’s rights
      under this Deed. 
	 	  	  
	 	Exchange Rate 	means, in respect of any foreign currency:
  

	 	(a) 	
      the average of the buy and sell rates for the foreign
      currency in United States dollars, as quoted by any one of the four
      largest (by market share) banks in Australia; or

	 	 	 
	 	(b) 	
      if those rates are not quoted, then the average of the
      buy and sell rates for the foreign currency as quoted by any two major
      Australian trading banks selected by the Payer in good faith and on a
      consistent basis;

on the day on which the Exchange Rate
is to be determined (or, if the Exchange Rate is to be determined on a day that
is not a Business Day, then on the immediately preceding Business Day). 

	 	Execution Date 	means the date of this Deed, being October 13,
      2015. 
	 	  	  
		Governmental Authority 	means any: (i) federal, provincial, state,
      territorial, municipal, local or other governmental or public department,
      central bank, court, commission, board, bureau, agency or instrumentality,
      domestic or foreign; (ii) any subdivision or authority of any of the
      foregoing; or (iii) any quasi- governmental or private body exercising any
      regulatory, expropriation or taxing authority under or for the account of
      any of the above. 

	 	Page 5 

		GST 	Has the meaning given to that term in the A New
      Tax System (Goods and Services Tax) Act 1999 (Cth). 
	 	  	  
		Gross Proceeds 	means, for any particular Quarter, the sum of:
      (i) all consideration, monetary or otherwise, received by the Payer from a
      Third Party, in connection with sales or other disposal of Product to any
      Person in such Quarter; (ii) the aggregate Transfer Price of all sales or
      other dispositions of Product to Related Persons in such Quarter; and
      (iii) the proceeds received from an insurer in the case of loss of, or
      damage to, Products (net of any excess paid in respect of that loss). For
      clarity, where partially upgraded/refined Product is transferred by the
      Payer to a Related Person and thereafter used by the Related Person to
      develop downstream products, only the Transfer Price of the partially
      upgraded/refined Product will be included in the determination of Gross
      Proceeds, and any subsequent market value additions resulting from
      improved or developed downstream Products will not be included in Gross
      Proceeds. 
	 	  	  
		Law 	means, at any particular time in respect of any
      particular Person, property, transaction or event, all laws (including
      common law and equity), statutes, regulations, statutory instruments,
      treaties, judgments and decrees applicable to that Person, property,
      transaction or event (having the force of law) and all applicable
      requirements, requests, official directives, consents, approvals,
      authorizations, guidelines, decisions, rules, orders and policies of any
      Governmental Authority having authority over such Person, property,
      transaction or event. 
	 	  	  
		Mineral 	means any mineral (as that term is defined in
      the Mining Act) that is mined or otherwise removed from the Mining Area,
      whether in the form of Ore, Concentrates, tailings or otherwise and all
      beneficiated or derivative products thereof, including scandium oxide
      (Sc2O3), obtained or obtainable from any Tenements by mining operations
      carried out on or under the surface of any land. 
	 	  	  
	 	Mining Act 	means the Mining Act 1992 (NSW). 
	 	  	  
		Mining Area 	means, collectively, the area within the
      boundaries of the Tenements existing from time to time on or after the
  Execution Date where mining activities are conducted during the
term of this Deed, and the area within the boundaries of any Surrounding Area,
if applicable. 

	 	Page 6 

		Net Value 	means, with respect to any particular Quarter,
      the amount that is equal to A minus B, where: 
	 	 	 
	 	  	“A” is Gross Proceeds for such Quarter;
      and 
	 	 	 
	 	  	“B” is Deductible Expenses for such
      Quarter. 
	 	  	  
		NSW Department 	means the Department of Industry Resources and
      Energy of the Government of the State of New South Wales, or any successor
      department or authority that assumes the responsibilities of such
      Department after the date hereof. 
	 	  	  
		Ore 	means any mineral (as defined in the Mining
      Act) located in or on the Earth's crust at a concentration above
      background level. 
	 	  	  
		Person 	means a natural person, sole proprietorship,
      partnership, limited partnership, limited liability partnership, company,
      body corporate, limited liability company, unlimited liability company,
      joint stock company, trust, trustee, executor, administrator or other
      legal representative, unincorporated association, joint venture, trust,
      governmental, regulatory or other entity, and any other form of entity or
      organization of any kind or nature whatsoever; and pronouns have similarly
      extended meanings. 
	 	  	  
		Product 	means Mineral that is capable of being sold or
      otherwise disposed of. 
	 	  	  
		Quarter 	means, a fiscal quarter consisting of a 3 month
      period, which in the case of the Payer as at the date of this Deed is the
      period commencing on the Execution Date and expiring on the date
      immediately preceding the next to occur of January 1, April 1, July 1 or
      October 1, and each subsequent period of 3 consecutive months commencing
      on January 1, April 1, July 1 or October 1, as applicable, in each year
      thereafter. 
	 	  	  
		Related Person 	means, with respect to any particular Person:
      (a) any other Person who directly or indirectly Controls, is directly or
      indirectly Controlled by, or is under direct or indirect common Control
      with, such Person; (b) a partner, other than a limited partner, of that
      Person; (c) a trust or estate in which that Person has a substantial
      beneficial interest or for which that Person serves as trustee or in a
      similar capacity; (d) a relative, including the spouse, of that Person or of that
Person’s spouse; or (e) any other Person that has a non-arm’s length connection
or relationship with the Payer or any other Person referenced in (a) through (d)
above.

	 	Page 7 

		Representative 	means, with respect to any particular Person,
      the employees, officers, directors, accountants, auditors, financial
      advisers and legal advisers of such Person. 
	 	  	  
		Royalty 	means a gross overriding royalty payable from
      time to time hereafter, in perpetuity, by the Payer to the Payee equal to
      0.7% of the Net Value. 
	 	 	 
	 	Royalty Records 	means the books, accounts and records
      maintained by or on behalf of the Payer showing reasonable detail in
      relation to: 
	 

	
       
	
      (a) 
	
      the quantity and grades of each Product extracted or
      produced in each Quarter;

	
       
	
       
	
       

	
       
	
      (b) 
	
      the quantity and grades of each Product sold in each
      Quarter;

	
       
	
       
	
       

	
       
	
      (c) 
	
      the calculation of the Royalty in each Quarter;

	
       
	
       
	
       

	
       
	
      (d) 
	
      Gross Proceeds from Product sold in each
  Quarter;

	
       
	
       
	
       

	
       
	
      (e) 
	
      Deductible Expenses for each Quarter; and

	
       
	
       
	
       

	
       
	
      (f) 
	
      if there is any commingling of Products in a Quarter with
      materials from areas outside the Mining Area, the measures, moistures,
      assays and other relevant details pertaining to the Minerals in the
      Products prior to such commingling.

		Statement 	means, for any particular Quarter, a statement
      (signed by an authorized director or officer of the Payer confirming the
      accuracy of such Statement) setting out the calculation of the Royalty
      payment for such Quarter and including the following information, in each
      case, in sufficient detail and with sufficient supporting documentation,
      to enable the Payee to verify the accuracy thereof:

	 	(a) 	
      a breakdown of Gross Proceeds from each Product sold in
      such Quarter, such that any applicable Exchange Rate used to determine the
      value of all or any part of such Gross Proceeds in US Dollars can be
      observed;

	 	 	 
	 	(b) 	
      a breakdown of all Deductible Expenses during such
      Quarter;

	 	Page 8 

	 	(c) 	
      a breakdown of any Adjustments made in such
    Quarter;

	 	 	 
	 	(d) 	
      the total amount owing in respect of the Royalty for such
      Quarter; and

	 	 	 
	 	(e) 	
      in the case of a sale of Product to any Person that is a
      Related Person, the basis of how the Transfer Price was
  established;

accompanied by a true and complete
copy of the unconsolidated unaudited financial statements of the Payer prepared
in accordance with Section 4.2(a) for such Quarter.

		Statutory Tenement
      Expenditure 	means the minimum expenditure which the holder
      of a Tenement is required by the Mining Act to incur in respect of that
      Tenement in any given year. 
	 	  	  
		Surrounding Area 	means all tenements and other property rights
      owned, directly or indirectly, in whole or in part by the Payer or any
      Related Person of the Payer, all or any part of which lies within 5 miles
      of any boundary of any tenement listed in Schedule A. 
	 	  	  
		Tailings 	includes tailings, residues, waste rock,
      spoiled leach materials and other materials resulting from mining
      operations and activities conducted on or adjacent to the Mining Area,
      whether such operations and activities took place before or after the
      Commencement Date. 
	 	  	  
		Tenement 	means the authorities under the Mining Act
      forming the Nyngan Scandium project and the Honeybugle Scandium
      properties, the legal description of which is set forth in Schedule A
      Error! Reference source not found. hereto, and any Surrounding
      Area, including any extension, renewal, variation, conversion,
      amalgamation, replacement or substitution thereof or addition thereto,
      that is granted in respect of the whole or part of the area of an
      authority on the application of the Payer or on the authority of the
      Payer. 
	 	  	  
		Third Party 	means a Person that is not a Related Person of
      the Payer (or of any Related Person). 
	 	  	  
		Transfer 	means sell, transfer, grant, assign, convey or
      otherwise voluntarily dispose of. 
	 	  	  
		Transfer Price 	means, the transfer price between the Payer and
      any Related Person, which shall be, with respect to any particular sale of
      Product by the Payer to a Related Person on any particular
date :

	 	Page 9 

	 	(a) 	
      the price at which the Payer or a Related Person of the
      Payer has made comparable sales of Product to a Third Party within the
      proximate time as at which such value is sought to be determined,
  or

	 	 	 
	 	(b) 	
      in the absence of such comparable sales, such other
      evidence of market price for comparable sales of Product made between
      parties dealing at arm’s length, or

	 	 	 
	 	(c) 	
      where the price cannot readily be determined by the
      methods described in either (a) or (b) above, the transfer price accepted
      by applicable Governmental Authority responsible for assessing and
      collecting income taxes or royalties of the
Payer.

	 	US Dollars 	means lawful currency of the United States of
      America. 
	 	  	  
		Withholdings 	means withholding of or deduction for, or on
      account of, any present or future taxes, duties, assessments or
      governmental charges of whatever nature. 

	1.2 	
      Interpretation

In this Deed, except where the context
otherwise requires: 

	
       
	
      (a) 
	
      words importing the singular include the plural and vice
      versa;

	
       
	
       
	
       

	
       
	
      (b) 
	
      an expression importing a natural Person includes any
      company, partnership, joint venture, association, corporation or other
      body corporate;

	
       
	
       
	
       

	
       
	
      (c) 
	
      a reference to anything (including, but not limited to,
      any right) includes a part of that thing but nothing in this sub section
      implies that performance of part of an obligation constitutes performance
      of the obligation;

	
       
	
       
	
       

	
       
	
      (d) 
	
      a reference to a section, part, schedule, exhibit and
      annexure refers to a section, part, schedule, exhibit or annexure of, in
      or to this Deed;

	
       
	
       
	
       

	
       
	
      (e) 
	
      a reference to this Deed includes all schedules, exhibits
      and annexures to this Deed;

	
       
	
       
	
       

	
       
	
      (f) 
	
      a reference to any document (including this Deed) is to
      that document as varied, novated, ratified or replaced from time to
      time;

	
       
	
       
	
       

	
       
	
      (g) 
	
      a reference to an act, statute, regulation, proclamation,
      ordinance or by-law includes all acts, statutes, statutory instruments,
      regulations, proclamations, ordinances or by-laws varying, consolidating
      or replacing it, and a reference to an act includes all regulations,
      proclamations, ordinances and by-laws issued under that act;

	
       
	
       
	
       

	
       
	
      (h) 
	
      a reference to any party means a party to this Deed and
      includes that party's executors, administrators, successors and permitted
      assigns, including any person taking by way of novation and, in the case
      of a trustee, includes any substituted or additional
  trustee;

	 	Page 10 

	
       
	
      (i) 
	
      a reference to conduct includes an omission, statement
      and undertaking, whether or not in writing;

	
       
	
       
	
       

	
       
	
      (j) 
	
      a reference to writing includes a facsimile transmission
      and any means of reproducing words in a tangible and permanently visible
      form;

	
       
	
       
	
       

	
       
	
      (k) 
	
      no provision of this Deed will be construed adversely to
      a party solely on the ground that the party was responsible for the
      preparation of this Deed or that provision;

	
       
	
       
	
       

	
       
	
      (l) 
	
      other parts of speech and grammatical forms of a word or
      phrase defined in this Deed have a corresponding meaning; and

	
       
	
       
	
       

	
       
	
      (m) 
	
      words of inclusion are not words of
  limitation.

	1.3 	
      Business Day

Where the day on which any act is to be
done is not a Business Day, that act must be done on the succeeding Business
Day. 

	1.4 	
      Accounting matters

Unless otherwise agreed by the parties,
all accounting matters are to be determined in accordance with sound accounting
practices customary in the mining industry which are in accordance with
Accounting Standards. 

	2 	ROYALTY 

	2.1 	
      Royalty Purchase and Grant

Payer hereby grants to Payee the
Royalty, in consideration for the payment by the Payee to the Payer of the sum
of TWO MILLION AND SEVENTY THOUSAND UNITED STATES DOLLARS (US$2,070,000),
in cash, payment of which sum has been made by the Payee and received by the
Payer. 

	2.2 	
      Calculation and Payment of
  Royalty

	 	(a) 	
      Within 30 days after the end of each Quarter ending after
      the Commencement Date, the Payer must:

	 	(i) 	
      calculate the Royalty payable for the Quarter, if any;
      and

	 	 	 
	 	(ii) 	
      pay the Royalty payable for the Quarter to the Payee
      without demand, reduction or set-off, and without adjustment or deduction
      (except for any Adjustment or Withholdings permitted hereunder or required
      by Law), which amount will be adjusted in accordance with any Adjustment
      applicable to such Quarter pursuant to Section 2.4, and payable by the
      Payer by wire transfer to an account specified in writing by the Payee,
      which the Payee agrees to so specify prior to the end of the first Quarter
      following the Commencement Date.

	 	Page 11 

All Royalty payments shall be made in
immediately available funds, in US Dollars and, to the extent that any amount
included in the calculation of Net Value is not denominated in US Dollars, such
amount shall be converted into US Dollars using the applicable Exchange Rate
determined as of the last day of the applicable Quarter in respect of which such
Royalty payment is calculated. 

	 	(b) 	
      Without limiting the rights of the Payee in relation to
      any breach of this Deed by the Payer, if the Payer fails to pay a Royalty
      payment due under this Deed in accordance with Section 2.2(a) within ten
      days following the due date for such payment, then the Payer must also pay
      to the Payee immediately on demand:

	 	(A) 	
      interest at the rate of 10% per annum on the amount due
      from such due date to and including the date upon which such Royalty
      payment is paid in full, calculated daily and compounded monthly;
    and

	 	 	 
	 	(B) 	
      all costs and expenses (including legal costs and
      expenses on a full indemnity basis) incurred by the Payee and attributable
      to the Payer’s failure to pay by such due
date.

	2.3 	
      Statement

Commencing on the Commencement Date,
and on or before the later of (i) the date that is 45 days from the last day of
the end of each Quarter other than the last Quarter of a fiscal year of the
Payer and 90 days from the end date of the last Quarter of a fiscal year of the
Payer, and (ii) if the Payer is a controlled subsidiary of a parent company that
is required to publicly file financial reports on a consolidated basis with the
Payer pursuant to securities Law applicable to such parent company, the date
such financial reports are required to be filed in respect of the applicable
Quarter, the Payer must deliver a Statement to the Payee. In addition, on or
before the later of (i) the date that is 90 days from the end date of the last
Quarter of a fiscal year of the Payer, the Payer must deliver an Annual
Statement to the Payer, and (ii) if the Payer is a controlled subsidiary of a
parent company that is required to publicly file financial reports on a
consolidated basis with the Payer pursuant to securities Law applicable to such
parent company, the date such financial reports are required to be filed in
respect of such fiscal year. Delivery to the Payee of the applicable Statement
for such Quarter and payment of the Royalty in accordance with that Statement is
final and in full satisfaction of all obligations of the Payer with respect to
and payment of the Royalty for that Quarter unless: 

	 	(a) 	
      the Payee disputes all or part of any Annual Statement
      that includes such Quarter by providing a Dispute Notice (as defined
      herein) to the Payer within 3 months after the date on which the Payee
      received such Annual Statement; or

	 	Page 12 

	 	(b) 	
      there has been any fraud, deliberate miscalculation or
      reckless miscalculation of the Royalty by the
Payer.

Any payment that is determined to be
owing to the Payee in respect of the Royalty following final resolution of any
dispute relating to an Annual Statement, shall be paid forthwith by the Payer
upon final resolution of such dispute together with all accrued interest thereon
and costs related thereto in accordance with 2.2(b) . 

	2.4 	
      Adjustment

Each Adjustment will be recorded in the
Royalty Records and reflected in the next Statement delivered by the Payer to
the Payee after such Adjustment arises and the amount of each Adjustment in each
Quarter will be added to, or deducted from, as applicable, the amount of the
Royalty payment that would otherwise be payable in respect of such Quarter to
which the Statement relates. 

	2.5 	
      Royalty a continuing
obligation

Unless otherwise provided for in this
Deed, the obligation to pay the Royalty continues, with respect to each
Tenement, for the full term of such Tenement, including any successor Tenement
and throughout the period that any Product is extracted and recovered from such
Tenement by any Person, unless this Deed is previously terminated in accordance
with its terms. 

	2.6 	
      No interest in Tenements

Without derogating from its entitlement
to the Royalty under this Deed, the Payee has no legal or equitable interest in
the Tenements or in the Mining Area. 

	2.7 	
      Further assurances

If the Payer or any Related Person
varies, amalgamates, converts, substitutes or reacquires any Tenement, or
obtains any additional interest in the Mining Area, the Payee may require the
Payer to execute an amendment deed or similar instrument confirming that this
Deed applies to such, varied, amalgamated, converted, substituted or reacquired
Tenement, or acquired additional interest, subject only to any required
government approvals under the Law. The Payer agrees to use all reasonable
commercial efforts to obtain any such requisite governmental approvals. 

	4217000A370_Exhibit
      10.1.docx 	Page 13 

	2.8 	
      Perpetuity period

If the vesting of any interest under
this Deed would, but for this section, be void under the rule against
perpetuities at common law or under any statute imposing perpetuity periods,
then that interest terminates one day before the end of the maximum time from
the date of this Deed permitted at such time by the law of New South Wales for
that interest to be valid. 

	3 	MINING
      OPERATIONS 

	3.1 	
      Maintenance of Tenements in good
  standing

The Payer will take reasonable steps,
at the Payer’s cost, to keep the Tenements valid and in full force and effect
under the Law for the duration of this Deed, including:

	
       
	
      (a) 
	
      observing the provisions of all Laws affecting the
      Tenements and mining operations and activities conducted by the Payer on
      or about the Mining Area, including lodging in good time all required
      reports;

	
       
	
       
	
       

	
       
	
      (b) 
	
      paying all fees, rates, royalties, taxes and rental
      payments due in respect of all of the Tenements;

	
       
	
       
	
       

	
       
	
      (c) 
	
      ensuring all Statutory Tenement Expenditure conditions
      are met or exemptions obtained; and

	
       
	
       
	
       

	
       
	
      (d) 
	
      making all necessary applications for renewals of the
      Tenements.

	3.2 	
      Payer to determine Tenement
  operations

The Payee acknowledges and agrees that
the Payer, subject to required government approvals under the Law: 

	
       
	
      (a) 
	
      owes the Payee no duty to explore, develop or mine any of
      the Tenements, or to do so at any rate or in any manner other than that
      which the Payer may determine in its sole and unfettered
  discretion;

	
       
	
       
	
       

	
       
	
      (b) 
	
      has complete discretion concerning the nature, timing and
      extent of all exploration, development, mining, treating, milling and
      other operations conducted on the Tenements and may suspend operations and
      production on the Tenements at any time it wishes to do so;

	
       
	
       
	
       

	
       
	
      (c) 
	
      may, but is not obliged to, treat, mill, sort,
      concentrate, refine, or otherwise process, beneficiate or upgrade Ores,
      Concentrates, and Products extracted from the Tenements; and

	
       
	
       
	
       

	
       
	
      (d) 
	
      is not liable for any mineral or commercial value lost in
      processing Ores, Concentrates, and Products extracted from the Tenements,
      and no Royalty is due on any such lost value.

	 	Page 14 

	3.3 	
      Commingling

	 	(a) 	
      The Payer may commingle Products extracted from the
      Tenements prior to being dispatched with other Ores, Concentrates or
      products produced elsewhere in accordance with customary good mining and
      metallurgical practice in Australia applied reasonably.

	 	 	 
	 	(b) 	
      The Payer must establish, and record in the Royalty
      Records, the methods and practices adopted by the Payer necessary to
      weigh, sample, assay and perform other measuring or testing necessary to
      fairly allocate to each party the valuable minerals and metals contained
      in the Products extracted and recovered from the Tenements prior to being
      dispatched from the Mining Area.

	3.4 	
      Tailings

If any Tailings held under or pursuant
to any Tenement are processed or reprocessed in the future and result in
Products, those Products are subject to payment of the Royalty. 

	3.5 	
      Samples

The Payer may, without being liable to
pay the Royalty under this Deed, mine, remove and supply small amounts of
Minerals reasonably necessary for sampling, assaying, metallurgical testing and
evaluation of the mineral potential of the Tenements.

	4 	INFORMATION AND AUDIT 

	4.1 	
      Royalty Records

The Payer must keep, or cause to be
kept, true and complete Royalty Records in accordance with the Accounting
Standards and generally accepted international mining industry practice.

	4.2 	
      Inspection and audit of Royalty
  Records

	
       
	
      (a) 
	
      The Payer agrees to prepare unconsolidated unaudited
      financial statements of Payer for each Quarter of the Payer, and
      unconsolidated audited financial statements of the Payer for each fiscal
      year of the Payer audited by an independent nationally recognized
      accounting firm or such other accounting firm as is approved in writing by
      the Payee.

	
       
	
       
	
       

	
       
	
      (b) 
	
      The Payee may, upon reasonable notice to the Payer and at
      reasonable times and at its own cost, appoint a registered company
      auditor, to audit and report on the Royalty Records and any Annual
      Statement.

	
       
	
       
	
       

	
       
	
      (c) 
	
      The Payer shall, subject to reasonable prior notice, give
      the auditor appointed by the Payee pursuant to Section 4.2(b) full and
      free access to the Royalty Records of the Payer at its offices, or elsewhere as agreed, at
reasonable times, in respect of the applicable audit. 

	 	Page 15 

	
       
	
      (d) 
	
      Any audit of an Annual Statement by the Payee must be
      conducted by an auditor appointed by the Payee pursuant to Section 4.2(b)
      hereof and must be completed prior to the expiry of 90 days from the date
      of receipt by the Payee of such Annual Statement, failing which the Annual
      Statement shall be deemed to be correct and accepted by the Payee,
      provided that if the audit of an Annual Statement by the Payee has been
      initiated but has not been completed within the foregoing 90 day period,
      and such audit is being diligently conducted as expeditiously as
      reasonably possible, then the Payer agrees to provide the Payee with a
      reasonable extension of the audit period on written request made by the
      Payee to Payer.

	4.3 	
      Access, inspection and technical
  audit

	
       
	
      (a) 
	
      The Payee may, upon reasonable notice to the Payer and at
      reasonable times but not more frequently than once in every 12 months
      (unless the Payer has materially breached this Deed), and at its own cost
      and risk, inspect any operations carried on within the Mining Area,
      provided that the Payee must ensure that it does not unduly interfere with
      the operations or with the general conduct by the Payer of its business
      and complies with the reasonable requirements of the Payer and its safety
      officers.

	
       
	
       
	
       

	
       
	
      (b) 
	
      This section applies where the Payer is commingling
      Products extracted from the Tenements prior to being dispatched from the
      Mining Area with other Ores, Concentrates, mineral products, metals and
      minerals produced elsewhere. In that event, the Payee may, at reasonable
      times and at its own cost and risk and not more than once in every 12
      months upon reasonable notice to the Payer, by itself or by a qualified
      and recognised mining engineer appointed by it, inspect and conduct a
      technical audit on the methods and practices used by the Payer in
      weighing, sampling, assaying or other measuring or testing extracted from
      the Tenements, and in doing so must comply with the reasonable
      requirements of the Payer and its safety officers.

	
       
	
       
	
       

	
       
	
      (c) 
	
      The Payer must provide, at the Payee’s cost, all
      reasonable access to the Payee and to the mining engineer appointed by the
      Payee sufficient and necessary to reasonably carry out any technical
      audit.

	
       
	
       
	
       

	
       
	
      (d) 
	
      The Payee must ensure that any audit undertaken by, or on
      behalf of, the Payee is conducted and concluded promptly and
      diligently.

	4.4 	
      Consequences of financial
audit

Notwithstanding Section 2.3, if there
is any underpayment or overpayment of the Royalty which the Payee’s auditor, in
its reasonable opinion, considers exists, or an audit determines that any
Royalty paid has been calculated in error, the Payer must, on being provided
with a copy of the report of the Payee’s auditor, make an Adjustment of the Royalty due, which
will be payable at such time as the payment for the next Quarter is due, unless
the Payer gives a Dispute Notice under this Deed in relation to the relevant
Annual Statement within 3 months of receiving the report of the Payee’s auditor. 

	 	Page 16 

	4.5 	
      Consequences of technical
audit

	
       
	
      (a) 
	
      The Payee may give the Payer a copy of any technical
      report arising from a technical audit conducted under this section which
      raises, as a matter of concern, any matter concerning the weighing,
      sampling, assaying or any other measuring or testing practice which is not
      consistent with good mining and metallurgical practice in Australia
      applied reasonably.

	
       
	
       
	
       

	
       
	
      (b) 
	
      If the Payer does not accept that there is a matter of
      mining and metallurgical practice which it is prepared to, and does,
      correct, either party may give a Dispute Notice under this Deed in
      relation to that matter within 3 months of receiving the technical
      report.

	5 	RELINQUISHED TENEMENTS 

	5.1 	
      Total abandonment or surrender of
  Tenements

Subject to the rights arising on
Revival (as defined below), if the Payer intends to relinquish or surrender all
of the Tenements, then, the Payer is permitted to relinquish or surrender those
Tenements after providing the Payee with not less than 30 days prior to the date
of relinquishment or surrender, written notice of its intent to do so and giving
Payee the opportunity to make inquiries as to the reasons for such
relinquishment or surrender. The Payee may within the 30 day notice period
request that the Tenements be transferred to the Payee and thereafter the Payer
will so transfer the Tenements to the Payee or its nominee for no additional
consideration subject to and in accordance with applicable Law, provided that
the Payee will pay for all transfer costs.

	5.2 	
      Revival of obligations under a Relinquished
      Tenement

If any part of the area of any
relinquished or surrendered Tenement that is relinquished or surrendered to the
NSW Department is granted to or acquired by the Payer or a Related Person of the
Payer within 10 years of such relinquishment or surrender (Revival), then
upon such Revival the area of the relinquished or surrendered Tenement again
becomes subject to this Deed and the obligation to pay the Royalty by the Payer.

	5.3 	
      Relinquishment in the normal course of
    business

If portions of the Tenements are
voluntarily relinquished or surrendered to the NSW Department because they are
no longer considered by the Payee to contain commercial quantities of Ore, or
because the NSW Department believes the likelihood of Mineral development is remote and requests return
of specific portions of the Tenements, the Payer is permitted to relinquish or
surrender those Tenements after providing the Payee with not less than 30 days
prior to the date of relinquishment or surrender, written notice of its intent
to do so and giving Payee the opportunity to make inquiries as to the reasons
for such relinquishment or surrender. The Payee may within the 30 day
notice period request that the Tenements be transferred to the Payee, which if
permitted under applicable Law, for no additional consideration, the Payer will
so transfer the Tenements to the Payee or its nominee in accordance with
applicable Law, provided that the Payee will pay for all transfer costs. If the
relinquishment or surrender of the Tenements to the NSW Department is not
voluntary on the part of the Payer, then the Payer will provide the Payee with
written notice of such involuntary relinquishment or surrender as soon as
practical following the Payee receiving written notice from the NSW Department
of such involuntary relinquishment or surrender. 

	 	Page 17 

	6 	REGISTRATION 

The Payer irrevocably consents to the
Payee’s registration of this Deed, or notice hereof, with the Mining Recorder
Unit/Mining Registrar (or any successor thereto, or any other Governmental
Authority, as applicable) and otherwise to such actions as the Payee may see fit
to secure its rights pursuant to this Deed, to the extent allowed by the Law.
The Payer agrees to cooperate and provide reasonable assistance to the Payee for
the purpose of such registration, including the signing of deeds or any
instrument required by any Governmental Authority for the purpose of such
registration and to otherwise act reasonably not to interfere with the Payee’s
securing of its rights pursuant to this Deed. 

	7 	ASSIGNMENT AND ENCUMBRANCES 

	7.1 	
      Transfer by Payer

The Payer shall not Transfer all, part
of, or any interest in, any of the Tenements, or any rights in relation to
Products extracted and recovered or to be extracted and recovered from the
Mining Area to a Third Party or a Related Person except: 

	 	(a) 	
      by a Transfer to a Third Party which is expressly subject
      to the Royalty, and such Third Party transferee has agreed in writing in
      favour of the Payee to assume the obligations of the Payer hereunder
      (including the obligation to pay the Royalty to the Payee) to the extent
      that the transferee acquires all or any part of the Tenements or the
      rights to the Products or Minerals and to execute an Assumption Deed at
      the time at which the transferee acquires any such rights or property;
      or

	 	 	 
	 	(b) 	
      by the sale of Products in the ordinary course of
      business; or

	 	Page 18 

	 	(c) 	
      an abandonment or surrender of the Tenements as
      contemplated in Sections 5.1 and 5.3 of this Deed, and subject to Section
      5.2 hereof.

	7.2 	
      Payer release and
survival

	
       
	
      (a) 
	
      The Payer may be released from its obligations under this
      Deed in respect of a Transfer pursuant to Section 7.1(a) as from the date
      of the Transfer, but only if a Transfer is completed strictly in
      accordance with this Deed, but without affecting its obligations arising
      prior to that date.

	
       
	
       
	
       

	
       
	
      (b) 
	
      The rights of the Payee survive any Transfer and do not
      merge on or by virtue of completion and registration of the
    Transfer.

	7.3 	
      Sale of interest by
Payee

	
       
	
      (a) 
	
      If the Payee wishes to Transfer the whole or a part of
      its rights under this Deed to a Third Party (Available Interest)
      the Payee must first offer to sell the whole of the Available Interest to
      the Payer (Payee's Offer) for cash (Cash Consideration) and
      not for any other consideration, and otherwise on the terms and conditions
      contained in the Payee's Offer.

	
       
	
       
	
       

	
       
	
      (b) 
	
      A Payee's Offer must be open for acceptance within 30
      days after service of the Payee's Offer (Offer Period).

	
       
	
       
	
       

	
       
	
      (c) 
	
      If the Payer accepts the Payee’s Offer by notice in
      writing to the Payee within the Offer Period, the Payer must complete the
      purchase of the Available Interest on the terms set out in the Payee's
      Offer.

	
       
	
       
	
       

	
       
	
      (d) 
	
      If the Payer does not accept the Payee’s Offer within the
      Offer Period or complete the purchase of the Available Interest on the
      terms set out in the Payee’s Offer, the Payee may, at any time, within 210
      days after service of Payee’s Offer, sell the Available Interest, but only
      on terms and conditions not less favourable than the Payees’
  Offer.

	
       
	
       
	
       

	
       
	
      (e) 
	
      The Payee may be released from its obligations under this
      Deed in respect of the interest that is the subject of the Transfer as
      from the date of the Transfer, but only if such Transfer is completed
      strictly in accordance with this Deed, and without affecting any of its
      obligations arising prior to that date.

	
       
	
       
	
       

	
       
	
      (f) 
	
      The Payee may Transfer its interest in and under this
      Deed to a Related Person of the Payee if the Payee first delivers
      to the Payer an Assumption Deed executed by the Related Person which
      includes a covenant that the Related Person has agreed with the Payer
      promptly to offer to re-assign the interest to the Payer if the recipient
      ceases to be a Related Person of the Payee within 3 years after such
      Transfer.

	 	Page 19 

	7.4 	Grant of Encumbrance

Each party covenants in favour of the
other party that it will not grant any Encumbrance over the Tenements or this
Deed unless the Encumbrancee agrees to be bound by the terms of this Deed in
exercising the Encumbrancee’s powers or remedies under the Encumbrance, as if it
was a party to this Deed. The foregoing covenant will not apply to a grant of an
Encumbrance to a Third Party solely in respect of any royalty interest granted
by the Payer to such Third Party, nor will it restrict the Payee from
registering any Encumbrance in respect of its interest in the Royalty or this
Deed pursuant to Section 6.

	7.5 	Change of Control of Payer

The Payer will provide written notice
to the Payee of any proposed change in Control of the Payer not less than 30
days’ prior to the effective date of such change in Control, including identity
and contact information of all Persons involved in such change of Control of the
Payer. 

	7.6 	
      Notice of Assignment or
  Encumbrance

The Payer will provide written notice
to the Payee of any proposed Transfer pursuant to section 7.1 or of any proposed
grant of an Encumbrance over any part of the Tenements or the Product, not less
than 30 days’ prior to the effective date of such proposed Transfer or grant of
an Encumbrance, including the identity and contact information of all
transferees and Encumbrances involved, directly or indirectly, in such Transfer
or grant of Encumbrance, as the case may be. 

	8 	Confidentiality 

	8.1 	
      Non-disclosure of Confidential
  Information

A party must not disclose Confidential
Information except: 

	
       
	
      (a) 
	
      if the disclosure is expressly permitted by this Deed;
      or

	
       
	
       
	
       

	
       
	
      (b) 
	
      to its Representative, or the Representative of a Related
      Person, who requires the information for the purposes of or related to
      this Deed, the Tenements or the Royalty, provided that such Representative
      agrees to keep the disclosed information confidential in accordance with
      this section; or

	
       
	
       
	
       

	
       
	
      (c) 
	
      with the written consent of the party who supplied the
      Confidential Information, which consent may be given or withheld in its
      absolute discretion; or

	
       
	
       
	
       

	
       
	
      (d) 
	
      if the party, or a Related Person of the party, holding
      the Confidential Information is required to do so by Law, including by a
      recognised stock exchange, or in connection with legal proceedings
      relating to this Deed; or

	
       
	
       
	
       

	
       
	
      (e) 
	
      if disclosure is made on a confidential basis to a
      prospective assignee of the party's rights and obligations under this Deed or prospective
financier of the party or its Related Person, or to another Third Party that
proposes to enter into contractual relations with the party; provided the
assignee, financier or other Third Party agrees in writing to keep the disclosed
information confidential in accordance with this section. 

	 	Page 20 

	8.2 	
      Disclosure by Recipient of Confidential
      Information

A party disclosing Confidential
Information as permitted by this Deed must use all reasonable endeavours to
ensure that any person receiving Confidential Information from it does not
disclose the Confidential Information except as permitted by this Deed. 

	8.3 	
      Return of Confidential
  Information

A party who has disclosed Confidential
Information to a prospective assignee, financier or other Third Party as
provided for by this Deed must obtain from that person prior to disclosure an
undertaking that, on the request of the disclosing party, it will immediately
deliver or re-deliver to that party all documents or other materials containing
or referring to the Confidential Information in its possession, power or
control. 

	8.4 	
      Survival of termination

This confidentiality section continues
to bind a person notwithstanding that such person ceases to be a party to this
Deed or this Deed is terminated for any reason, for a period of 5 years from the
date of termination. 

	8.5 	
      Announcements, Press Releases and Public
      Filings

A party must not make press or other
announcements or releases relating to this Deed and the transactions that are
the subject of this Deed without the approval of the other party to the form and
manner of the announcement or release unless and to the extent that the
announcement or release is required to be made by the party, or a Related Person
of the party, by Law before such approval can be obtained, including by a
recognised stock exchange. The Payee understands and agrees that the parent
company of the Payer will publicly announce the grant of this Royalty by press
release and publicly file a copy of this Deed with United States and Canadian
securities regulators pursuant to applicable securities Laws. 

	8.6 	
      Personal Information

Payee understands and agrees that the
Payer or a Related Person of the Payer will be required to disclose personal
information provided herein concerning the Payee to the stock exchange and other
regulatory authorities to the extent required by stock exchange rules or by Law,
and Payee hereby consents to such disclosure, subject to the prior review and
confirmation of accuracy thereof by the Payee. 

	 	Page 21 

	9 	TAX 

	9.1 	
      The Payer shall withhold and remit any applicable
      Withholdings required to be withheld and remitted by applicable Law in
      connection with the payment of the Royalty.

	9.2 	
      GST

	
       
	
      (a) 
	
      Any consideration payable or to be provided for a supply
      made under or in connection with this Deed, unless specifically described
      in this Deed as 'GST inclusive', does not include any amount on account of
      GST. If GST is payable on any supply made under or in connection with this
      Deed (not being a supply the consideration for which is specifically
      described in this Deed as 'GST inclusive'), the recipient of the supply
      must pay to the supplier, an additional amount equal to the GST payable on
      the supply at the same time and in the same manner as the consideration
      for the supply, or the first part of the consideration for the supply (as
      the case may be), is to be provided, provided that the supplier gives the
      recipient a tax invoice for the supply.

	
       
	
       
	
       

	
       
	
      (b) 
	
      If a payment to a party under this Deed is a
      reimbursement or indemnification, calculated by reference to a loss, cost
      or expense incurred by that party, then the payment will be reduced by the
      amount of any input tax credit to which that party, or the representative
      member of the GST group that such party is a member of (as the case may
      be), is entitled for that loss, cost or expense.

	
       
	
       
	
       

	
       
	
      (c) 
	
      If a payment is calculated by reference to or as a
      specified percentage of another amount or revenue stream, that payment
      shall be calculated by reference to or as a specified percentage of the
      amount or revenue stream exclusive of GST.

	
       
	
       
	
       

	
       
	
      (d) 
	
      The parties agree that they have each formed the view
      that the supply made by the Payer to the Payee is GST-free on the basis of
      section 38- 190 of the A New Tax System (Goods and Services Tax) Act
      1999 (Cth) and that, subject to a contrary determination by the
      Commissioner of Taxation, no GST will be payable in relation to the grant
      of the royalty under clause 2.1.

	9.3 	
      Stamp Duty

The Payer is responsible for any stamp
duty payable in respect of this Deed. 

	10 	REPRESENTATIONS AND WARRANTIES OF THE PAYER
  

	10.1 	
      The Payer represents and warrants to the Payee
    that:

	 	(a) 	
      it is a corporation duly incorporated, organized and
      validly existing and in good standing under the Laws of its jurisdiction
      of incorporation;

	 	 	 
	 	(b) 	
      it has all necessary corporate power and authority to
      enter into and perform its obligations under this Deed, to own its
      interest in the Tenements and to carry on its business as presently
      conducted and as currently proposed to be
conducted;

	 	Page 22 

	 	(c) 	
      neither the execution nor delivery of this Deed nor the
      performance by it of its obligations hereunder will conflict with or
      result in a breach of any terms, conditions or provisions of its
      incorporating documents, bylaws, directors’ and shareholders’ resolutions,
      shareholders’ agreements, any law, rule or regulation having the force of
      law, any contract to which it is a party, or any writ, judgement,
      injunction, determination or award that is binding on it;

	 	 	 
	 	(d) 	
      the execution and delivery of this Deed and the
      performance by it of its obligations hereunder have been duly authorized
      by all necessary corporate action and all necessary third party consents
      have been obtained, and this Deed has been duly executed and delivered by
      it and constitutes a valid and legally binding obligation that is
      enforceable against it in accordance with its terms;

	 	 	 
	 	(e) 	
      it has good and marketable title to, and is in exclusive
      possession of the Tenements, and each exploration license, mining lease
      and mining claim constituting or relating to the Tenements is fully and
      accurately disclosed on Schedule A to this Deed, is in good standing and
      has been properly recorded in the name of the Payer (or a predecessor
      thereto, as applicable) in accordance with all applicable Laws;

	 	 	 
	 	(f) 	
      there are no actions, suits or proceedings pending or, to
      the best knowledge of the Payer, threatened against or affecting the Payer
      or any Related Person, the Tenements or any Product, that might materially
      adversely affect the Tenements or the Payer’s interest therein or
      challenge the validity or propriety of the Royalty granted to the Payee
      pursuant to this Deed; and the Payee is not in default in any material
      respect under any applicable Law;

	 	 	 
	 	(g) 	
      the Payer has filed all tax returns that are required to
      be filed by it and has paid all taxes that have become due pursuant to
      such returns or pursuant to any assessment or reassessment received by the
      Payer;

	 	 	 
	 	(h) 	
      the Tenements disclosed in Schedule A to this Deed are
      each in good standing, have been properly recorded in accordance with all
      applicable Law and all Statutory Tenement Expenditures and all other
      amounts owing to any Governmental Authority in respect of each Tenement
      that are payable on or prior to the Execution Date have been paid in
      full.

	11 	REPRESENTATIONS AND WARRANTIES OF THE PAYEE
  

	11.1 	
      The Payee represents and warrants to the Payer
    that:

	 	 	(a) 	
      it is a corporation duly incorporated, organized and
      existing;

	 	 	 	 
	 	 	(b) 	
      it has all necessary corporate power and authority to
      enter into and perform its obligations under this Deed;

	 	 	 	 
	 	 	(c) 	
      neither the execution nor delivery of this Deed nor the
      performance by it of its obligations hereunder will conflict with or
      result in a breach of any terms, conditions or provisions of its charter
      documents or bylaws, any law, rule or regulation having the force of law,
      any contract to which it is a party, or any writ, judgement, injunction,
      determination or award that is binding on it;

	 	Page 23 

	 	
       
	
      (d) 
	
      the execution and delivery of this Deed and the
      performance by it of its obligations hereunder have been duly authorized
      by all necessary corporate action; the Payee has all necessary power and
      authority to enter into and perform his obligations under this Deed;
      and

	 	
       
	
       
	
       

	 	
       
	
      (e) 
	
      this Deed has been duly executed and delivered by the
      Payee and constitutes a valid and legally enforceable obligation of the
      Payee.

	12 	SURVIVAL OF REPRESENTATIONS AND WARRANTIES
  

All representations, warranties,
covenants and agreements of the Payer set forth in this Deed shall survive,
notwithstanding the grant of the Royalty by the Payer and any investigation made
by or on behalf of either party, and all such representations, warranties,
covenants and agreements of the Payer shall continue in perpetuity in full force
and effect for the benefit of the Payee. 

	13 	DISPUTE RESOLUTION 

	13.1 	
      Dispute Resolution

	
       
	
      (a) 
	
      Any dispute, claim, question or difference arises
      (Dispute) between the parties with respect to this Deed or its
      performance, enforcement, breach, termination, validity or otherwise, will
      be subject to binding arbitration, upon written notice (Dispute
      Notice) by either party to the other party, and any such Dispute shall
      not be the subject of an action in any court of law or equity by any party
      hereto unless such Dispute has first been submitted to arbitration and
      finally determined in accordance with the Commercial Arbitration Rules of
      the American Arbitration Association.

	
       
	
       
	
       

	
       
	
      (b) 
	
      The decision of the arbitrator (or arbitrators, as the
      case may be) shall be deemed to conclusively determine the rights and
      liabilities of the parties to the arbitration in respect of the matter in
      dispute and any court action subsequently commenced by any party shall
      only be for judgment based upon the decision of the arbitrator (or
      arbitrators, as the case may be) and costs incidental to such
    action.

	
       
	
       
	
       

	
       
	
      (c) 
	
      The language of the arbitration and the arbitration
      decision will be in English. The arbitration will take place in New South
      Wales, Australia.

	
       
	
       
	
       

	
       
	
      (d) 
	
      Any arbitration shall be conducted by one arbitrator
      appointed by the mutual agreement of the parties within 30 days after the
      date on which the Dispute Notice is received by either party from the
      other party. If the parties fail to agree upon the appointment of the
      arbitrator, each of the parties shall appoint one arbitrator within a
      further 15 days, and the two such arbitrators so appointed shall, within
      15 days after their appointments, select a third arbitrator who shall act
      as the presiding arbitrator. If the two arbitrators appointed by the
      parties hereto fail to agree upon the appointment of the third arbitrator,
      such arbitrator shall be appointed by the American Arbitration Association
      (or if such Association fails to make such appointment, by a court of
      competent jurisdiction) at the request of either party and such selection
      shall be final and binding upon each of the parties hereto.

	
       
	
       
	
       

	
       
	
      (e) 
	
      The arbitrator or arbitrators, as the case may be, shall
      take evidence directly from witnesses and documents presented by the
      parties and all witnesses shall be made available for cross-examination.
      The arbitrator or arbitrators, as the case may be, shall render a written decision, stating reasons
therefor, within three months after the appointment of such arbitrator, or the
last arbitrator, if the arbitration is conducted by a panel of three
arbitrators, as applicable, and such award shall be final and binding upon the
parties to such arbitration. 

	 	Page 24 

	 	(f) 	
      Each party shall be responsible for all costs incurred by
      such party in respect of the preparation for the arbitration proceedings
      and the appointment of the arbitrator or arbitrators. The cost of the
      arbitration proceedings and all related expenses shall be borne by the
      losing party to the arbitration or, if neither party is clearly the losing
      party, the costs of the arbitration proceedings and all related expenses
      shall be shared equally by each party, unless the arbitrator or
      arbitrators, as the case may be, determine that the costs should be
      allocated differently, in which case the decision of the arbitrator or
      arbitrators, as the case may, be shall be
final.

	14 	NOTICES 

	14.1 	
      Form of Notice

Unless expressly stated otherwise in
this Deed, any notice, certificate, consent, approval, waiver or other
communication in connection with this Deed (Notice) must be in writing
and addressed as follows: 

	 	(a) 	If to the Payer: 
	 	 	 
	 	  	          EMC Metals
      Australia Pty. Ltd. 
	 	 	          Suite 501,
      1430 Greg Street  
	 	  	          Sparks,
      Nevada 
	 	  	          USA 89431
  
	 	 	 
	 	 	          Attention:
      George Putnam  
	 	 	 
	 	  	          Telecopier:
      +1.775.355.9506 
	 	  	          email:
      georgeputnam@comcast.net 
	 	 	 
	 	  	with a copy to: 
	 	  	  
	 	  	          Morton Law
      LLP 
	 	  	          Suite 1200,
      750 West Pender Street 
	 		          Vancouver,
      British Columbia  
	 	  	          Canada, V6C
      2T8 
	 	  	 
	 	  	          Attention:
      Edward L. Mayerhofer 
	 	  	 
	 	  	          Telecopier:
      +1.604.681.9652 
	 		          email:
      elm@mortonlaw.ca  
	 	 	 
	 	(b) 	If to the Payee: 
	 	 	 
	 	  	          Umgeni
      Holdings International Limited 
	 	  	          c/o Appleby
      Trust (Cayman Islands) Ltd. 
	 	  	          Clifton
      House 
	 	  	          75 Fort
      Street 

	 	Page 25 

	 	 	          PO Box 1350
    
	 	 	          Grand Cayman
    
	 	 	          KY1-1108
  
	 	 	          Cayman
      Islands 
	 	 	 
	 	 	          Attention:
      Richard McMillan 
	 	 	          Telecopier:
      +1 345.949.4901 
	 	 	          Email:
      rimcmillan@applebyglobal.com 
	 	 	 
	 	 	with a copy to: 
	 	 	  
	 	 	          The Law
      Offices of Gordon L. Jacobs 
	 	 	          73 Mutual
      Street 
	 	 	          Toronto,
      Ontario Canada M5B 2A9 
	 	 	 
	 	 	          Attention:
      Gordon Jacobs 
	 	 	 
	 	 	          Telecopier:
      416 981 0993 
	 	 	          Email:
      gljacobs@sprynet.com 
	 	 	  
	 	 	and with a copy to: 
	 	 	  
	 	 	          Stikeman
      Elliott LLP 
	 	 	          5300
      Commerce Court West 
	 	 	          199 bay
      Street 
	 	 	          Toronto,
      Canada M5L 1B9 
	 	 	 
	 	 	          Attention:
      Elizabeth Breen 
	 	 	          Telecopier:
      416 947 0866 
	 	 	          Email:
      ebreen@stikeman.com 
	 	 	  
			Notwithstanding the foregoing, delivery of any
      Statement pursuant to this Deed need only be delivered to as directed in
      writing by the Payee. 

	14.2 	When Notices are taken to have been given
      and received 

	 	(a) 	Subject to Section 14.2(b), a Notice is
      regarded as given and received: 

	
       
	
      (i) 
	
      if delivered by hand, when left at the address set out in
      section 14.1;

	
       
	
       
	
       

	
       
	
      (ii) 
	
      if sent by pre-paid post, on the 10th day
      following the date of postage;

	
       
	
       
	
       

	
       
	
      (iii) 
	
      if given by fax, on production of a transmission report
      by the machine from which the fax was sent which indicates that the fax
      was sent in its entirety to the recipient’s fax number during the
      recipient’s normal business hours, unless the recipient informs the sender
      that the Notice is illegible or incomplete within 24 hours of it being
      transmitted; and

	
       
	
       
	
       

	
       
	
      (iv) 
	
      if sent by email, at the time shown in the read receipt
      for that email from the recipient's email address or the time shown in any
      reply or response email received by the deliverer in connection with the
      Notice email.

	 	(b) 	
      A Notice delivered or received other than on a Business
      Day of the recipient, or after 5.00pm (recipient’s time) on a Business
      Day, is regarded as received at 9.00am (recipient’s time) on the following Business Day. A
Notice delivered or received before 9.00am (recipient’s time) on a Business Day,
is regarded as received at 9.00am (recipient’s time). 

	 	Page 26 

	15 	GENERAL 

	15.1 	
      Governing law

This Deed is governed by the laws of
the State of New South Wales, Australia and each party irrevocably and
unconditionally submits to the non-exclusive jurisdiction of the courts of the
State of New South Wales, Australia. 

	15.2 	
      Counterparts and Deliver

This Deed may be executed in any number
of counterparts and by different parties on separate counterparts, and delivered
by electronic means, all of which, taken together, shall constitute one Deed.

	15.3 	
      Alterations

This Deed may be altered only in
writing signed by each party. 

	15.4 	
      Survival

Any indemnity or any obligation of
confidence under this Deed is independent and survives termination of this Deed.
Any other term by its nature intended to survive termination of this Deed
survives termination of this Deed.

	15.5 	
      No merger

The rights and obligations of the
parties under this Deed do not merge on completion of any transaction
contemplated by this Deed. 

	15.6 	
      Entire agreement

This Deed constitutes the entire
agreement between the parties in connection with its subject matter and
supersedes all previous agreements or understandings between the parties in
connection with its subject matter. 

	15.7 	
      Further action

Each party must do, at its own expense, everything reasonably
necessary (including executing documents) to give full effect to this Deed and
any matter contemplated by it. 

	15.8 	
      Severability

Any term or part of a term of this Deed
that is illegal or unenforceable may be severed from this Deed and the remaining
terms or parts of the terms of this Deed shall continue in force. 

	 	Page 27 

	15.9 	
      Waiver

A party does not waive a right, power
or remedy if it fails to exercise, or delays in exercising, such right, power or
remedy, except to the extent such party fails to exercise such right, power or
remedy within a specified time period. A single or partial exercise of a right,
power or remedy does not prevent another or further exercise of that or another
right, power or remedy. A waiver of a right, power or remedy must be in writing
and signed by the party giving the waiver. 

	15.10 	
      Relationship

This Deed does not create a relationship of employment, trust,
agency or partnership between the parties. 

Signed and agreed to by the parties
hereto on the date first mentioned above: Executed as Deed; 

Executed by EMC METALS AUSTRALIA PTY. LTD. in accordance
with section 127 of the Corporations Act 2001 (Cth); 

	/s/ George F.
      Putnam 	 	/s/
      Edward Dickinson 
	Signature of Director 	 	Signature of Director 
	  	 	  
	George F. Putnam
    	 	Edward
      Dickinson 
	Print Name 	 	Print Name 

Executed by UMGENI HOLDINGS INTERNATIONAL LIMITED 

	/s/ Fiona Crellin
      and Tanya Dube 	 	/s/
      Fiona Crellin and Tanya Dube 
	Signature of Director 	 	Signature of Director 
	For and On Behalf Of Probitas Limited 	 	For and On Behalf Of Equitas Limited 
	Fiona Crellin and
      Tanya Dube 	 	Fiona
      Crellin and Tanya Dube 
	Print Name 	 	Print Name 

	 	Page 28 

	SCHEDULE A –
      TENEMENTS 

Nyngan Scandium project 

New South Wales exploration licenses:

 EL 6096 (5 units) 

EL 8316 (5 units) 

Honeybugle Scandium property 

New South Wales exploration license: 

EL 7977 (12 units) 

	 	Page 29

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