Document:

Exhibit 10.60

 

Robinson Property Trust

Ancillary Agreement

 

This Robinson Property Trust Ancillary Agreement (this
“Ancillary Agreement”) is entered
into among Kennecott Holdings Corporation (formerly Kennecott Corporation),
Kennecott Rawhide Mining Company, and Kennecott Nevada Copper Company
(collectively, “Kennecott”), and
BHP Copper Inc. (“BHP Copper”),
and BHP Nevada Mining Company (“BHP NMC”)
(collectively, “BHP”) on September 12,
2003.

 

Recitals

 

Whereas, Kennecott was one of several former owners and operators of certain
portions of a mining property commonly known as the “Robinson Property” located in White Pine County, Nevada, and
more particularly described in Exhibit A
to this Ancillary Agreement.

 

Whereas, on December 20, 1989 the Second Judicial Court for the State of
Nevada in and for the County of Washoe (the “Court”)
entered an order enforcing that certain “Stipulation to Dismiss with Prejudice
and to Confirm Settlement Agreement” in Silver
King Mines, Inc., et al. v.  Kennecott
Corporation et al., No. CV 89-4027 Dept. No. 9 (herein
defined, together with all amendments thereto, as the “Stipulation”), to which Kennecott and other
former owners/operators of the Robinson Property were parties. By the
Stipulation, the former owners/operators reached a settlement of a number of
issues concerning the Robinson Property.

 

Whereas, the Stipulation provided, among other provisions, that Kennecott was
to receive a three percent (3%) net smelter return royalty interest in the base
metals and associated metals co-products, including precious metals, produced
from the Robinson Property (the “NSR Royalty”)
and that Kennecott would begin to receive such NSR Royalty after a trust fund
was funded for Reclamation and Remediation (as those terms are defined in the Stipulation)
of the Robinson Property (the “Trust Fund”).

 

Whereas, under the Stipulation, an amount equivalent to the first Twenty
Million Dollars ($20,000,000), inclusive of interest, of the NSR Royalty was to
be deposited into the Trust Fund.

 

 

Whereas, on December 11,
1990, the Court entered an order entitled “Amendment to Stipulation to Dismiss
with Prejudice and to Confirm Settlement Agreement and Order” in Silver King Mines, Inc., et al. v. Kennecott
Corporation et al., No. CV89-4027 Dept. No. 1(9) to
which Kennecott and other certain prior owners and operators of the Robinson
Property were a party (the “First Amendment”).
The First Amendment amended various provisions to the Stipulation concerning
use of the Trust Fund for Reclamation and Remediation obligations.

 

Whereas, under the
terms of a letter of agreement dated December 14, 1990 (the “Letter Agreement”), Magma Copper Company
agreed to assume responsibility for specified indemnification obligations
arising out of the Stipulation and the First Amendment, as more fully described
in paragraphs 5 and 6 of the Second Amendment identified below.

 

Whereas,  pursuant to the
Letter Agreement, on October 25, 1991, Kennecott; Magma Copper Company,
Magma Nevada Mining Company and Magma Limited Partner Company, and the Robinson
Mining Limited Partnership (collectively “Magma”);
and other certain former owners/operators of the Robinson Property entered into
an agreement entitled “Amendment No. 2 to Stipulation to Dismiss with
Prejudice and to Confirm Settlement Agreement and Order” that was approved by
the Court on December 12, 1991 in Silver
King Mines, Inc. et al. v. Kennecott Corp. et al., No. CV89-4027
Dept. No. 1(9) (the “Second
Amendment”).

 

Whereas,  under the terms
of the Second Amendment, Magma assumed specified Reclamation and Remediation
obligations with respect to the Robinson Property and specified indemnity
obligations to Kennecott and received the rights in, and assumed the
obligations relating to, the Trust Fund.

 

Whereas,  in February 1996,
following the acquisition by BHP Sub Inc. of Magma Copper Company’s stock,
Magma Copper Company’s name was changed to BHP Copper Inc. In addition, Magma
Nevada Mining Company’s name was changed to BHP Nevada Mining Company and Magma
Limited Partner Co. became BHP Copper Limited Partner Company. BHP Nevada
Mining Company and BHP Copper Limited Partner Company continued as partners in
the Robinson Mining Limited Partnership.

 

2

 

Whereas, in May 1999,
BHP Copper Limited Partner Co. was merged into BHP Nevada Mining Company,
resulting in the dissolution of the Robinson Mining Limited Partnership, with
the partnership assets and liabilities being assumed by BHP NMC.

 

Whereas, through
various transactions, corporate acquisitions and reorganizations, including
those set forth above, Kennecott and BHP remain parties to the Stipulation.

 

Whereas, on June 29,
1999, operations at the Robinson Property were temporarily terminated due to
economic conditions and the operation has been placed in care and maintenance
resulting in a cessation of royalty accruals.

 

Whereas, since the
inception of its operations, BHP NMC has performed Reclamation and Remediation
work at the Robinson Property to address environmental issues from its operations
and those of its predecessors.

 

Whereas, as among
themselves, Kennecott and BHP (collectively, the “Parties”) intend (i) to more fully define the NSR Royalty
(including a protocol for conducting audits and resolving disputes regarding
the NSR Royalty) and to provide for public recording of the NSR Royalty, (ii) to
more fully define BHP’s obligation to initially fund the Trust Fund (including
a dispute resolution protocol should Kennecott object to the initial amount of
funding); (iii) to provide a protocol governing indemnity claims under the
Stipulation, (iv) to define BHP’s reporting obligations regarding
Reclamation and Remediation expenditures (including a dispute resolution
protocol for any disagreement or dispute related thereto), and (v) to define
the confidentiality obligations of the Parties with respect to information
provided or exchanged pursuant to the Stipulation.

 

NOW
THEREFORE, in exchange for the mutual obligations contained
in this Ancillary Agreement and other consideration, the adequacy and
sufficiency of which the Parties hereby acknowledge, the Parties, intending to
be legally bound, agree as follows:

 

3

 

1.         NSR Royalty. The NSR Royalty shall be calculated as
provided in, and paid in accordance with the provisions of Exhibit B, which exhibit sets forth a
protocol for conducting audits and resolving disputes regarding the NSR
Royalty. To provide record notice of the NSR Royalty, BHP shall execute and
deliver, and Kennecott shall record, the Notice
of Royalty Interest in Robinson Property attached as Exhibit C.

 

2.         Initial Funding of the Trust Fund. BHP Copper shall form the
Trust Fund under that certain September 12, 2003 Robinson Restoration
Trust Agreement between BHP Copper Inc., BHP Nevada Mining Company, Kennecott,
and The Bank of New York (the “Trust
Agreement”). The amount by which BHP Copper initially funds the
Trust Fund (the “Initial Amount”)
shall be the NSR Royalty for the period of February 1996 to December 31,
1999 (“Accrued Royalty”) plus
interest on the Accrued Royalty (“Accrued
Interest”) minus previously incurred Reclamation and Remediation
expenses (“Previous Reclamation Expenses”). Based on the auditing procedure
previously undertaken by BHP Copper and Kennecott, BHP Copper has determined
that the Accrued Royalty is $8,708,948; the Accrued Interest is $1,272,761; and
the Previous Reclamation Expenses are approximately $4,956,032. Therefore, the
Initial Amount funded to the Trust Fund shall be $5,025,677. Within 30 days
after initial funding, Kennecott shall specify and request in writing from BHP
additional relevant materials and data necessary for Kennecott to reasonably
determine the Accrued Royalties and Previous Reclamation Expenses, for purposes
of a final audit of the Initial Amount (“Final Audit Materials”). The requested
Final Audit Materials shall not already be in Kennecott’s possession and shall
not be duplicative of materials and data previously provided by BHP to
Kennecott. BHP shall provide Final Audit Materials, to the extent that they are
reasonably available to BHP, within 30 days of the request. Unless Kennecott
objects within 60 days of receipt of the Final Audit Materials as provided in Section 5
of this Ancillary Agreement, the Initial Amount shall satisfy all NSR Royalty
payment obligations of BHP Copper and/or BHP NMC incurred up through the end of
FY2002; and the Previous Reclamation Expenses and Initial Amount shall be
credited against the NSR Trust Fund obligation amount, pursuant to the Robinson
Stipulation (specifically Sections 5 of the December 14, 1990 Letter
Agreement and 8 of the Second Amendment).

 

4

 

3.         Indemnity
Protocol.

 

(a)        As set forth in Section 1(H) of
the Stipulation and paragraph 6 of the Second Amendment to the Stipulation, the
parties constituting BHP are obligated, jointly and severally, “to save,
indemnify and hold Kennecott and its predecessors and successors free and
harmless from any and all liability for all environmental and reclamation
costs, investigations, demands, and liabilities associated with the Robinson
Property occurring or accruing at any time in an amount equal to the total of
such costs multiplied by the Participating Interest percentage of ... [BHP]
...., but in no event shall ... [the] indemnity to Kennecott and its
predecessors and successors be less than forty percent (40%) of such costs.”

 

(b)       If any third party shall
notify Kennecott with respect to any matter (a “Third Party Claim”) which
may give rise to a claim for indemnification against BHP under the Stipulation,
then Kennecott shall notify BHP thereof in writing, provided however, that
unreasonable delay on the part of Kennecott in notifying BHP that causes actual
prejudice to BHP may relieve BHP from any obligation hereunder. BHP shall have
the right to assume the defense of the Third Party Claim with counsel of its
choice at any time within fifteen (15) days after Kennecott has given notice of
the Third Party Claim; provided however, that Kennecott may retain
separate co-counsel at its sole cost and expense and participate in the defense
of the Third Party Claim. BHP agrees that it will not consent to the entry of
any judgment or enter into any settlement with regard to any Third Party Claim
without the prior written consent of Kennecott (not to be unreasonably
withheld) and Kennecott agrees that it will not consent to the entry of any
judgment or enter into any settlement with respect to any Third Party Claim
without the prior written consent of BHP (not to be unreasonably withheld). In
the event that BHP does not assume and conduct the defense of the Third Party
Claim in accordance with the Stipulation, (i) Kennecott may defend against
and consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim in any manner it reasonably may deem
appropriate (however, Kennecott will consult with, and obtain consent from, BHP
in connection therewith, which consent shall not be unreasonably withheld) and (ii) BHP
will remain responsible for any cost, injury, expense or damage

 

5

 

which Kennecott may suffer
or incur resulting from, arising out of, relating to, or caused by the Third
Party Claim to the fullest extent provided in the Stipulation.

 

4.         Reporting
Reclamation and Remediation Activities & Expenditures.

 

(a)        BHP NMC will provide
Kennecott with a report within thirty (30) days of the end of each calendar
quarter during which Reclamation or Remediation activities have occurred on the
Robinson Property, and which report shall detail information relating to the
Reclamation and Remediation activities and expenditures (“Reclamation
and  Remediation Report”).  Such reports shall be provided
pursuant to Section 7 (“Notices and Consents”) of this Ancillary
Agreement. Each Reclamation and Remediation
Report shall describe the
Reclamation and Remediation conducted during the quarter just ended and the
costs associated with such Reclamation and Remediation activities. Each Reclamation and Remediation Report shall be
in sufficient detail that Kennecott can determine the reasonableness of such
costs and whether such activities constitute Reclamation and/or Remediation. In
addition to the notice recipients identified in Section 7, all Reclamation and Remediation Reports shall
be provided to the Kennecott Nevada Company Director of Health, Safety and
Environmental Quality, or such other recipient as Kennecott may designate in
writing to BHP NMC and BHP Copper.

 

(b)       If Kennecott (i) disagrees
with any Reclamation or Remediation costs or related expenditure information
provided by BHP NMC, (ii) contends that any such costs or related
expenditures are unreasonable, or (iii) disagrees with BHP NMC’s
classification of any environmental activity as Reclamation or Remediation (as
those terms are defined in the Stipulation), Kennecott will so notify BHP
within 90 days of Kennecott’s receipt of the report. Such disputes shall be
subject to dispute resolution per Section 4(e) of this Ancillary
Agreement.

 

(c)        If Kennecott (i) agrees
with BHP NMC’s Reclamation and Remediation
Report for particular Reclamation or Remediation expenditures, (ii) fails
to timely notify BHP of

 

6

 

its disagreement with all or
portions of a Reclamation and Remediation
Report or Kennecott’s disagreement is resolved in favor of BHP
pursuant to dispute resolution under Section 4(e) of this Ancillary
Agreement, such Reclamation or Remediation expenses covered by the Reclamation
and Remediation Report shall thereafter qualify as “Approved Reclamation and/or Remediation.”  Kennecott’s failure to notify BHP of its
disagreement with a calculation, cost, classification or expenditure in a Reclamation  and Remediation Report shall not be a waiver of Kennecott’s
right to dispute similar calculations, costs, or expenditures in future
Reports.

 

(d)       At BHP NMC’s request, before
BHP NMC incurs costs to perform Reclamation or Remediation expenditures,
Kennecott agrees to provide a review and determination of whether a proposed
Reclamation or Remediation expenditure will qualify as Approved Reclamation
and/or Remediation, as defined herein. Kennecott will provide such
determination within 60 days of its receipt of a detailed description of the
proposed activity. Any disagreement concerning Kennecott’s determinations under
this Section 4(d) shall be subject to dispute resolution per Section 4(e) of
this Ancillary Agreement.

 

(e)        Disagreements or disputes
between the Parties concerning this Ancillary Agreement including, without
limitation, a disagreement or dispute concerning any Reclamation and
Remediation activity, classification, expense or report, shall be governed by
this Section 4(e); provided however, that the timing for audits and
resolution of disagreements or disputes regarding the calculation or payment of
the NSR Royalty shall be governed by Exhibit B;
provided further, that Kennecott’s objection, if any, to the Initial
Amount of the Trust Fund shall be governed by section 5 of this Ancillary Agreement.
In the event of a disagreement or dispute, the Parties shall provide one
another with written notice of such disagreement or dispute and shall within 30
days of such notice attempt, in good faith, to resolve the disagreement or
dispute. Each of the Parties shall, within such 30 day period, provide the
other all documentation and records supporting the position it is taking
regarding the dispute. If the Parties cannot resolve the disagreement or
dispute, the Parties agree that their respective senior management shall meet
within 60 days after such notice. If the disagreement or dispute cannot be
resolved

 

7

 

by senior management, the
Parties agree to formally resolve the disagreement or dispute through a binding
arbitration, in the manner provided by Section 4(e)(i-ii) below.

 

(i)          The Parties agree to submit
any disagreement or dispute governed by the provisions of Section 4(e) that
has not been resolved under those provisions to binding arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration
Association except as modified in this Section 4(e)(i-ii) Any such
submittal shall be made within 30 days after the meeting among senior
management referenced in Section 4(e). The arbitrator(s) shall be an
attorney or a panel of no more than three attorneys, actively engaged in the
practice of law for at least ten years, with appropriate expertise in the area
of dispute, such as mining law, environmental law, or accounting. The Parties
shall allow and participate in discovery in accordance with the Nevada Rules of
Civil Procedure for a period of 60 days after the filing of the answer or other
responsive pleading. All discovery disputes shall be resolved by the arbitrator
or the chair of the arbitration panel if the matter has been submitted to a
panel.

 

(ii)         The arbitration hearing
shall be conducted in Reno, Nevada, no later than 90 calendar days after the
filing of the answer or other responsive pleading. The arbitrator(s) shall
render a written decision within the shorter of 30 days after the arbitration
hearing or 120 days after the filing of the answer or other responsive
pleading. The Parties agree to share equally the costs and fees of the
arbitrator(s) and the arbitration proceeding; provided however,
that the prevailing Party shall be entitled to recover all costs incurred,
including reasonable attorneys’ fees, to enforce its rights hereunder. Judgment
on the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof.

 

5.         Resolution of Dispute Regarding Initial Amount. Should
Kennecott not agree that the Initial Amount of $5,025,677 satisfies all of BHP’s
NSR Royalty payment obligations incurred up through the end of FY2002,
Kennecott shall have 60 days from the date of receipt of the Final Audit
Material regarding initial funding of the Trust Fund pursuant to Section 2
hereof, to object in writing to BHP. Upon BHP’s receipt of such objection, the

 

8

 

parties shall submit the
dispute to binding arbitration in the manner provided by Section 5(a-b)
below.

 

(a)        The parties shall submit the
dispute regarding the Initial Amount to binding arbitration in accordance with
the Commercial Arbitration Rules of the American Arbitration Association
except as modified in the Section 5. The arbitrator(s) shall be an
attorney or a panel of no more than three attorneys, actively engaged in the
practice of law for at least ten years, with appropriate expertise in the area of
dispute. The arbitration hearing shall be conducted in Reno, Nevada, no later
than 60 calendar days after the filing of the answer or other responsive
pleading. The arbitrator(s) shall render a written decision within the
shorter of 30 days after the arbitration hearing or 90 days after the filing of
the answer or other responsive pleading.

 

(b)       Should the arbitrator(s) conclude
that the Initial Amount exceeds $5,025,677, BHP shall sufficiently fund the
Trust Fund to make up the difference between $5,025,677 and the amount decided
upon by the arbitrator(s). Should the arbitrator(s) conclude that the
Initial Amount is less than $5,025,677, the Parties shall execute a certificate
of discharge in the form required by the Trust Agreement to reimburse BHP Copper
for the amount by which $5,025,677 exceeds the amount decided upon by the
arbitrator(s).

 

(c)        The Parties agree to share
equally the costs and fees of the arbitrator(s) and the arbitration
proceeding; provided however, that the prevailing Party shall be
entitled to recover all costs incurred, including reasonable attorneys’ fees,
to enforce its rights hereunder. Judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.

 

6.         Confidentiality.

 

(a)        All information and data
provided to any Party under this Ancillary Agreement shall be confidential; provided
however, that the recipient of such confidential information shall have the
right to disclose the same to its parents, affiliates, financial advisors and other
representatives under an obligation of confidentiality. The obligation

 

9

 

of confidentiality shall not
apply to any information that is in the public domain through no fault of the
recipient, which is already in the possession of the recipient, or which is
required to be disclosed as a matter of law or stock exchange rules, or which
is publicly disclosed by the disclosing Party or its affiliates; provided
however, that information that is provided to Kennecott in reports
hereunder, or the equivalent, prior to the date of this Ancillary Agreement, as
a part of the implementation of this Ancillary Agreement, shall be confidential
and protected as such by Kennecott subject to the exceptions described above.

 

(b)       In the event that a party
that receives confidential information pursuant to this Ancillary Agreement (or
a third party that receives such information from a party) becomes legally
compelled to disclose any of the confidential information, the party so
compelled will provide the other party with prompt notice thereof so that the
other party may seek a protective order or other appropriate remedy. In any
event, the party legally compelled to disclose confidential information will
furnish only that portion of the confidential information which is legally
required and will exercise its best efforts to obtain a protective order or
other reliable assurance that confidential treatment will be accorded the
confidential information provided.

 

7.         Notices and Consents.  All notices and consents required by this Ancillary Agreement
shall be in writing, shall be sent by express courier which retains written
records of receipts of packages for same-day, next-business-day or
two-business-day delivery to the Party or Parties entitled to receive such
notice or consent and to all other Parties to this Ancillary Agreement at the
address and to the attention of the individuals listed below or to such other
address as may be provided by written notice pursuant to this section. All
other communications required by this Ancillary Agreement, such as reports, may
be sent by regular mail to the addresses and to the attention of the
individuals listed below.

 

10

 

	
  BHP
  Copper Inc.

  	
  BHP Nevada Mining Company.

  
	
  Ben Wichers, President

  	
  John Kline, Manager

  
	
  200 S. Veterans Memorial
  Blvd.

  	
  7 Miles West of Ely on US
  50

  
	
  San Manuel, AZ 85631

  	
  Ruth, NV 89319

  
	
   

  	
   

  
	
  copy to:

  	
  copy to:

  
	
  Chris Ramey, Legal Counsel

  	
  Chris Ramey, Legal Counsel

  
	
  BHP Billiton

  	
  BHP Billiton

  
	
  1360 Post Oak Boulevard,
  Suite 150

  	
  1360 Post Oak Boulevard,
  Suite 150

  
	
  Houston, Texas 77056

  	
  Houston, Texas 77056

  
	
   

  	
   

  
	
  Kennecott
  Holdings Corporation

  	
  Kennecott
  Rawhide Mining Company

  
	
  General Counsel

  	
  General Counsel

  
	
  8362 West 10200 South

  	
  224 North 2200 West

  
	
  Bingham Canyon, Utah 84006

  	
  Salt Lake City, Utah 84116

  
	
   

  	
   

  
	
  Kennecott
  Nevada Copper Company

  	
   

  
	
  Chief Financial Officer

  	
   

  
	
  224 North 2200 West

  	
   

  
	
  Salt Lake City, Utah 84116

  	
   

  

 

8.         General
Provisions.

 

(a)        Construction
of Ancillary Agreement. This Ancillary
Agreement has been prepared and negotiated jointly by the Parties and their
respective counsel. This Ancillary Agreement shall not be construed against
either Party by reason of the drafting of the Ancillary Agreement or any part
thereof.

 

(b)       Entire
Agreement. This Ancillary Agreement,
together with the Stipulation, embodies the entire agreement and understanding
of the Parties with respect to the matters addressed in the Stipulation and
this Ancillary Agreement.

 

(c)        Governing
Law. This Ancillary Agreement shall be construed and enforced in
accordance with the laws of the State of Nevada, without regard to conflict of
law principles.

 

11

 

(d)       Counterparts. This
Ancillary Agreement may be executed in any number of counterparts, each of
which shall be deemed a duplicate original. However, this Ancillary Agreement
shall not bind any Party until all Parties have signed a counterpart. The
Parties intend that fax signatures may be utilized and, if so, are binding as
fully as original signatures.

 

(e)        Authority. Each of the
undersigned signatories to this Ancillary Agreement certifies his or her full
authority to execute this document and to bind legally the Party he or she
represents.

 

(f)        Retroactive
Effect. This Ancillary Agreement shall apply retroactively
to the date of the Stipulation.

 

(g)       No Third
Party Rights. This Ancillary Agreement is intended solely for
the benefit of the Parties hereto and is not intended to confer any rights upon
any third party or create any third-party beneficiary relationship.

 

(h)       Incorporation
of Recitals and Exhibits. The Recitals to, and
Exhibits identified in, this Ancillary Agreement are incorporated herein
by reference and are specifically made a part hereof.

 

12

 

IN WITNESS
WHEREOF, the Parties have caused this Ancillary Agreement to be executed by
their duly authorized corporate officers.

 

 

	
  BHP
  COPPER INC.

  	
   

  	
  BHP
  NEVADA MINING COMPANY

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ B.K. Wichers

  	
   

  	
  By:

  	
  /s/ B.K. Wichers

  
	
  Title:

  	
  President

  	
   

  	
  Title:

  	
  Chairman &
  President

  
	
  Date:

  	
  9/5/03

  	
   

  	
  Date:

  	
  9/5/03

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  KENNECOTT
  HOLDINGS CORPORATION

  	
   

  	
  KENNECOTT
  RAWHIDE MINING COMPANY

  
	
   

  	
   

  	
   

  
	
  By:

  	
  [Illegible signature]

  	
   

  	
  By:

  	
  [Illegible signature]

  
	
  Title:

  	
  Sr. V.P.

  	
   

  	
  Title:

  	
  President & CEO

  
	
  Date:

  	
  9/12/03

  	
   

  	
  Date:

  	
  9/12/03

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  KENNECOTT
  NEVADA COPPER COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  [Illegible signature]

  	
   

  	
   

  
	
  Title:

  	
  President and CEO

  	
   

  	
   

  
	
  Date:

  	
  9/12/03

  	
   

  	
   

  

 

13

 

EXHIBIT A to ANCILLIARY AGREEMENT

 

Description of Robinson Property

 

Incorporating the property
description contained in Exhibit A from that certain December 17,
1990 Deed and Assignment from
Kennecott Nevada Copper Company, formerly known as Nevmind Inc., Kennecott
Corporation, and Kennecott Nevada Company to Magma Nevada Mining Company, and
as further depicted on that certain January 2001 Map of Robinson Property,
White Pine County, Nevada, prepared by Land Management Services, Inc.,
Reno, Nevada and included in Exhibit Al, specifically excluding the water
distribution and sanitary sewer systems that were conveyed by Kennecott Copper
Corporation to Ruth-McGill Water Company by Quitclaim Deed made the 25th day of January, 1966 and recorded in the
County Recorder’s Office of White Pine County, State of Nevada, in Book 264, pages 434
- 437, a copy of which is included in Exhibit A2.

 

14

 

EXHIBIT B to ANCILLIARY AGREEMENT

 

NSR Royalty

 

A.        Definitions

 

“Net Smelter Return” or “NSR”
shall mean the Gross Value received by BHP Nevada Mining Company (“BHP NMC”)
or its successors or assigns from the sale or other disposition of Minerals,
less the following expenses incurred (without duplication) by BHP NMC or its
successors or assigns with respect to such Minerals after the Minerals have (i) left
the primary process facility on or near the Robinson Property, and (ii) reached
the concentrate stage, or the slimes stage for concentrates requiring further
refinement or any similar product stage:

 

(1)        actual charges for treatment
in the smelting and refining process (including, without limitation, handling,
representation, umpiring, assaying, processing, penalties, impurity charges,
and other processor deductions);

 

(2)        any sales, severance, gross
production, privilege, value added or similar taxes (but specifically excluding
income taxes) assessed on or in connection with the sale or other disposition
of Minerals; and

 

(3)        actual costs of
transportation (including, without limitation, freight, insurance, security
charges, transaction taxes, import and export duties, levies, imposts,
handling, port, demurrage, delay, stowage and forwarding expenses incurred by
reason of or in the course of such transportation) of such Minerals from the
process facility on or near the Robinson Property to the refinery, smelter,
other purchaser, user, or customer.

 

The terms “smelter” or “refinery” means conventional smelters and refineries, as well
as any other type of production plant used in lieu of a conventional smelter or
refinery to further upgrade concentrates slimes, or any sale of other products
from the Robinson Property. BHP NMC or its successors or assigns shall be
permitted to sell concentrates in the form usually

 

15

 

commercially marketable to
an Affiliate of BHP NMC or its successors or assigns, provided that such sales
shall be at prices and on terms no less favorable than those which would be
extended to an unaffiliated third party in a bona fide arm’s length transaction
under similar circumstances and the price thus determined shall be the Gross
Value. Similarly, if, prior to the point at which the Gross Value is
determined, BHP NMC of its successors or assigns or an Affiliate incurs costs
that are deductible or treats concentrates, slimes (for concentrates requiring
further refinement) or similar products prior to a sale, deemed sale or other
disposition in a smelter or refinery that it or such Affiliate owns or
controls, it or such Affiliate may deduct such costs and treatment charges, but
only to the extent they are no more than the amount that BHP NMC or its
successors or assigns or such Affiliate would have charged an unaffiliated
third party in a bona fide arm’s length transaction under similar circumstances
for treatment of similar ore at prevailing terms.

 

“Affiliate
of BHP NMC or its successors or assigns” means any person,
partnership, venture, corporation, or other form of enterprise which directly
or indirectly controls, is controlled by, or is under common control with BHP
NMC or its successors or assigns. “Control” as
used in the previous sentence means the possession, directly or indirectly, of
the power to direct or cause direction of management and policies through
ownership of voting securities, contract, voting trust or otherwise.

 

“Gross
Value” shall be the revenue actually received by BHP NMC or its successors or
assigns from the sale or other disposition of Minerals, including all revenues
received in the form of credits made by the smelter or refinery for associated
metals co-products. Provided however, that if BHP NMC or its successors
or assigns’ sale or disposition is based upon a contract for the sale of
Minerals that fixes a selling price for metals on other than a market price of
the product on the date of delivery to the purchaser (less deductions normally
negotiated as a part of such contracts), specifically including, but not
limited to, forward sales, futures trading, or commodity options trading, and
any other price hedging, price protection, and speculative arrangements not
involving physical delivery of Minerals, such Minerals shall be deemed to have
been sold on the earlier of the date of delivery to the buyer or the date of
outturn from the smelter or refinery. In such event, the Gross Value of such
Minerals shall be based on the payable metal value contained in such material
and on the “Spot Price” for such metals. Spot Price for each
such metal shall be the monthly average of closing prices quoted in Platt’s
Metals Week, as follows:

 

16

 

(1) in the case of
copper the COMEX First Position Settlement Price for High Grade (Premium)
copper for immediate delivery, (2) in the case of silver the London
Bullion Market Association P.M. Silver Fix, or (3) in the case of
gold the London Bullion Market Association P.M. Gold Fix. In the case of
other commodities, the closing price fixed by the London Metal Exchange (“LME”) shall be used. The monthly average Spot Price for a
metal shall be calculated by dividing the sum of all prices so reported for
that metal during the calendar month in which the sale or deemed sale occurred
by the number of days for which such prices were reported during the month. In
the event of cessation or suspension of any such price quotations for a period
of more than five (5) consecutive days in a given month, or if the
commodity price is not fixed by the LME, the parties shall agree on a reputable
substitute quotation mechanism for each affected metal. Should BHP NMC or its
successors or assigns otherwise terminate or “buy-back” any of such price
protection arrangements without actual physical delivery of Minerals, Kennecott
shall not share in any profits or losses therefrom.

 

“Minerals” shall mean base
metals and associated metals co-products, including precious metals, produced
from the Robinson Property and sold, deemed to be sold or otherwise disposed of
by BHP NMC or its successors or assigns, whether sold as refined metals,
cathodes, concentrates, precipitates or any other marketable form.

 

“Produced” shall mean the
mining, saving, stockpiling, extraction from the soil, or other creation of a
marketable product containing Minerals from the Robinson Property.

 

“Robinson
Property” shall mean the property described in Exhibit A of the “Robinson Property
Trust Ancillary Agreement” to which this Exhibit B
is attached.

 

All capitalized terms not
otherwise defined in this Exhibit B shall
have the meaning ascribed to them under the “Robinson Property Trust Ancillary
Agreement” to which this Exhibit B is
attached.

 

B.            Calculation
and Payment.

 

Calculation and payment of
the NSR Royalty shall be made subject to the following terms:

 

17

 

1.             Payment. The amount of
NSR Royalty due on Minerals sold, deemed to be sold or otherwise disposed of
shall be paid to the Robinson Reclamation Trust pursuant to the Robinson
Stipulation, within 30 days after the month end of the month in which the date
such Minerals are sold, deemed to be sold or otherwise disposed of, until BHP
NMC or its successors or assigns have deposited an aggregate amount into the
Trust Fund on a cumulative basis, pursuant to the terms of and in full
satisfaction of the trust funding obligations set forth in the Robinson Stipulation.
Once the Trust Fund has been satisfied pursuant to the Robinson Stipulation,
the NSR Royalty due on Minerals sold, deemed to be sold or otherwise disposed
of shall be paid to Kennecott pursuant to the requirements of the Robinson
Stipulation, within 30 days after the month end of the month in which the date
such Minerals are sold, deemed to be sold or otherwise disposed of. Nothing
herein shall be construed to enlarge or diminish the rights and obligations of
any Party to the Robinson Stipulation. Notwithstanding the foregoing, final
adjustments for assays, prices or other allowable adjustments can be netted
against future payments.

 

2.             Financial Report Information. BHP NMC or
its successors or assigns shall provide Kennecott’s designee copies of all
relevant data relating to the NSR Royalty calculation on a quarterly basis
within 30 days of the end of each calendar quarter (the “Audit Report”).

 

3.             Accounting Principles. The NSR
Royalty shall be calculated in accordance with generally accepted accounting
principles and practices consistently applied using the accrual method.

 

4.             Audit and Disputes. With respect
to payments made after the creation of the Trust, Kennecott, upon written
notice, shall have the right to audit the records that relate to the
calculation of the NSR Royalty within 21 months after receipt of the Audit
Report applicable to each such payment of the NSR Royalty. Kennecott shall be
deemed to have waived any right it may have had to object to a payment made,
unless it provides notice in writing of such objection within 24 months after
receipt of the Audit Report applicable to each payment of the NSR Royalty. If
the Parties are unable to resolve the dispute within 60 days after the receipt
of such notice, the dispute shall be resolved in accordance with the dispute
resolution provisions of Section 4(e) of the “Robinson Property Trust
Ancillary Agreement” except as modified in this Section 4. Unless the
Parties agree to share the costs of arbitration, the arbitrator shall determine

 

18

 

what part of the costs and
expenses incurred in any such proceeding shall be borne by each party
participating in the arbitration. Kennecott’s objection, if any, to the Initial
Amount of the Trust shall be governed solely by section 5 of the “Robinson
Property Trust Ancillary Agreement.”

 

5.             Records. BHP NMC or
its successors or assigns shall keep for period of five [5] year, accurate
records of tonnage, volume of products, analyses of products, weight, moisture,
assays of pay metal content and other records, as appropriate, related to the
computation of the NSR Royalty.

 

6.             Right to Inspect. Kennecott or
its authorized representative, on not less than 30 days’ notice to BHP NMC or
its successors or assigns, may enter upon those surface and subsurface portions
of the Robinson Property necessary to review the accuracy of the records
required to be kept in Section 5 above, and shall have the right to be
represented at any smelter or processing facility at which the weighing,
sampling and assaying of Minerals which will be used for calculating the Gross
Value or the deductible expenses are determined, and may, subject to the
obligations of confidentiality described in Section 6 of the “Robinson
Property Trust Ancillary Agreement,” inspect and copy all records and data
pertaining to the computation of its interest, including without limitation
such records and data which are maintained electronically. Kennecott or its
authorized representative shall enter the Robinson Property at Kennecott’s own
risk and may not unreasonably hinder operations on or pertaining to the
Robinson Property. Kennecott shall indemnify and hold harmless BHP Copper Inc.,
BHP NMC or their successors or assigns and their Affiliates (including without
limitation direct and indirect parent companies), and their respective
directors, officers, shareholders, employees, agents and attorneys, from and
against any liabilities which may be imposed upon, asserted against or incurred
by any of them by reason of injury to Kennecott or any of its agents or
representatives caused by Kennecott’s exercise of its rights herein.

 

7.             Real Property Interest. The NSR
Royalty shall attach to any amendments, relocations or conversions of any
mining claims or leases comprising the Robinson Property, or to any renewals or
extensions of leases thereof. The NSR Royalty shall be a real property interest
that runs with the Robinson Property and shall be applicable to BHP NMC or its
successors or assigns and their successors and assigns.

 

19

 

8.             Commingling. BHP NMC or its
successors or assigns shall have the right to commingle ore, concentrates,
minerals and other material mined and removed from the Robinson Property from
which Minerals are to be produced, with ore, concentrates, minerals and other
material mined and removed from other lands and properties; provided however,
that BHP NMC or its successors or assigns shall calculate from representative
samples the average grade thereof and other measures as are appropriate, and
shall weigh (or calculate by volume) the material before commingling. In
obtaining representative samples, calculating the average grade of the ore and
average recovery percentages, BHP NMC or its successors or assigns may use any
procedures accepted in the mining and metallurgical industry which it
reasonably believes suitable for the type of mining and processing activity
being conducted and, in the absence of fraud or bad faith, its choice of such
procedures shall be final and binding on Kennecott. In addition, comparable
procedures may be used by BHP NMC or its successors or assigns to apportion
among the commingled materials all penalty and other charges and deductions, if
any, imposed by the smelter, refiner, or purchaser of such material.

 

20

 

EXHIBIT C to ANCILLIARY AGREEMENT

 

Notice Of Royalty Interest In Robinson Property

 

NOTICE is hereby given that:

 

1.         Pursuant to the terms of a December 20,
1989, Order of the Court entitled “Stipulation to Dismiss with Prejudice and to
Confirm Settlement Agreement” (the “Stipulation”)  entered in Silver King Mines, Inc., et al. v. Kennecott Corp. et al.,
No. CV 89- 4027 Dept. No. 9 (2nd Judicial Dist, Nevada),
KENNECOTT HOLDINGS CORPORATION, KENNECOTT RAWHIDE MINING COMPANY, and KENNECOTT
NEVADA COPPER COMPANY (collectively “KENNECOTT”),  with an address at 224 North 2200 West,
Salt Lake City, Utah 84116, are the owners of a three percent (3%) net smelter
return royalty on the base metals and associated metals co-products, including
precious metals, produced from that certain property located in White Pine
County, Nevada, that is particularly described on Schedule 1 hereto (the “Robinson Property”),  payable in accordance with the terms set
forth in the Stipulation (the “NSR Royalty”).

 

2.         Under the terms of the Stipulation,
KENNECOTT granted SILVER KING MINES, INC., PACIFIC SILVER CORPORATION, and
ALTA GOLD COMPANY (collectively “ALTA GOLD”)
and WHITE PINE GOLD CORPORATION, SUNNYSIDE GOLD CORPORATION and ECHO BAY MINES
LTD. (collectively “ECHO BAY”), an
option to acquire the Robinson Property (the “Option”),
in consideration for, among other things, the NSR Royalty.

 

3.         On December 11, 1990, the Court
entered an order entitled an “Amendment to Stipulation to Dismiss with
Prejudice and to Confirm Settlement Agreement and Order” (the “First Amendment”). On December 12,
1991, the Court approved an “Amendment No. 2 to Stipulation to Dismiss
with Prejudice and to Confirm Settlement Agreement and Order” (the “Second Amendment”). The First and Second
Amendments amended various terms of the Stipulation, including the terms
governing payment of the NSR Royalty.

 

21

 

4.         As reflected in the Second Amendment,
the Option was exercised and MAGMA COPPER COMPANY, MAGMA NEVADA MINING COMPANY
and MAGMA LIMITED PARTNER CO. and ROBINSON MINING LIMITED PARTNERSHIP, a
Delaware limited partnership (consisting of MAGMA NEVADA MINING CO. as the
general partner and MAGMA LIMITED PARTNER CO. as the limited partner) (“ROBINSON MINING”) succeeded to certain of
the rights and obligations of ECHO BAY and ALTA GOLD under the Stipulation. In
particular, ROBINSON MINING became the owner of the Robinson Property and MAGMA
COPPER COMPANY and ROBINSON MINING assumed the obligation to pay the NSR Royalty.

 

5.         In February 1996, MAGMA COPPER
COMPANY’s name was changed to BHP COPPER INC. At the same time, MAGMA NEVADA
MINING COMPANY’s name was changed to BHP NEVADA MINING COMPANY, and the MAGMA
LIMITED PARTNER CO. name was changed to BHP COPPER LIMITED PARTNER COMPANY. BHP
NEVADA MINING COMPANY and BHP COPPER LIMITED PARTNER COMPANY continued as
partners in ROBINSON MINING. In May 1999, BHP COPPER LIMITED PARTNER CO.
was merged into BHP NEVADA MINING COMPANY, resulting in the dissolution of
ROBINSON MINING, with the partnership assets and liabilities being assumed by
BHP NEVADA MINING COMPANY.

 

6.         On September 12, 2003,
BHP COPPER INC., BHP NEVADA MINING COMPANY and KENNECOTT entered into the
Robinson Property Trust Ancillary Agreement (the “Ancillary Agreement”) pursuant to which KENNECOTT, BHP COPPER
INC., and BHP NEVADA MINING COMPANY more fully defined the NSR Royalty,
provided for this public recording of the NSR Royalty, and defined other
procedures and protocol for implementation of the Stipulation.

 

22

 

	
  Dated the 12th day of September, 2003.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  KENNECOTT
  RAWHIDE MINING COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  [Illegible signature]

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President & CEO

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  KENNECOTT
  NEVADA COPPER COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  [Illegible signature]

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President & CEO

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  KENNECOTT
  HOLDINGS CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  [Illegible signature]

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Sr. V.P.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BHP
  COPPER INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ B.K. Wichers

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BHP NEVADA
  MINING COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ B.K. Wichers

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Chairman &
  President

  	
   

  	
   

  	
   

  

 

23

 

Acknowledgments

 

	
  STATE
  OF UTAH

  	
  )

  
	
   

  	
  )

  
	
  COUNTY
  OF SALT LAKE

  	
  )

  

 

On this 12th day of September, 2003, personally appeared
before me, a Notary Public, Adrian F. Jackman, President & CEO of Kennecott Rawhide Mining Company,
personally known or proved to me to be the person whose name is subscribed to
the above instrument who acknowledged to me that he executed the above instrument
on behalf of Kennecott Rawhide Mining Company.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Leslie Smith

  
	
   

  	
  Notary

  

 

	
  STATE
  OF UTAH

  	
  )

  
	
   

  	
  )

  
	
  COUNTY
  OF SALT LAKE

  	
  )

  

 

On this 12th day of September, 2003, personally appeared
before me, a Notary Public, Adrian F. Jackman, President & CEO of Kennecott Nevada Copper Company, personally
known or proved to me to be the person whose name is subscribed to the above
instrument who acknowledged to me that he executed the above instrument on
behalf of Kennecott Nevada Copper Company.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Leslie Smith

  
	
   

  	
  Notary

  

 

	
  STATE
  OF UTAH

  	
  )

  
	
   

  	
  )

  
	
  COUNTY
  OF SALT LAKE

  	
  )

  

 

On this 12th day of September, 2003, personally appeared
before me, a Notary Public, Adrian F. Jackman, Sr. V.P. of Kennecott Holdings Corporation, personally
known or proved to me to be the person whose name is subscribed to the above
instrument who acknowledged to me that he executed the above instrument on
behalf of Kennecott Holdings Corporation.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Leslie Smith

  
	
   

  	
  Notary

  

 

24

 

 

	
  STATE
  OF ARIZONA

  	
  )

  
	
   

  	
  )

  
	
  COUNTY
  OF PIMA

  	
  )

  

 

On this 15th day of September, 2003, personally appeared
before me, a Notary Public, Ben K. Wichers, President of BHP Copper Inc., personally known or proved
to me to be the person whose name is subscribed to the above instrument who
acknowledged to me that they executed the above instrument on behalf of BHP Copper Inc.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Lynn C. Feldt

  
	
   

  	
  Notary

  

 

 

	
  STATE
  OF ARIZONA

  	
  )

  
	
   

  	
  )

  
	
  COUNTY
  OF PIMA

  	
  )

  

 

On this 15th day of September, 2003, personally appeared
before me, a Notary Public, Ben K. Wichers, Chairman & President of BHP Nevada Mining Company, personally known
or proved to me to be the person whose name is subscribed to the above
instrument who acknowledged to me that he executed the above instrument on
behalf of BHP Nevada Mining Company.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Lynn C. Feldt

  
	
   

  	
  Notary

  

 

25

 

SCHEDULE 1

 

TO

 

EXHIBIT C of ANCILLIARY AGREEMENT

 

Description of Robinson Property

 

Incorporating the property
description contained in Exhibit A from that certain December 17,
1990 Deed and Assignment from
Kennecott Nevada Copper Company, formerly known as Nevmind Inc., Kennecott Corporation,
and Kennecott Nevada Company to Magma Nevada Mining Company, and as further
depicted on that certain January 2001 Map of Robinson Property, White Pine
County, Nevada, prepared by Land Management Services, Inc., Reno, Nevada
and included in Exhibit Al, specifically excluding the water distribution
and sanitary sewer systems that were conveyed by Kennecott Copper Corporation
to Ruth-McGill Water Company by Quitclaim Deed made the 25th day of January, 1966 and recorded in the
County Recorder’s Office of White Pine County, State of Nevada, in Book 264, pages 434
- 437, a copy of which is included in Exhibit A2.

 

26Exhibit 10.61

 

English
Translation

 

SHARES PURCHASE AND SALE
AGREEMENT

 

JAIME UGARTE LEE AND OTHER

TO

COMPAÑIA MINERA BARRICK CHILE
LIMITADA

 

SANTIAGO, CHILE. December 26,
1997, before me, ARTURO CARVAJAL ESCOBAR, attorney, Notary Public, Regular of
the Seventh Notary of this Department domiciled at Catedral Street, No. 1233,
there appear: On the one hand and as “sellers” Mr. JAIME UGARTE ABREGO,
Chilean, engineer, married, identity card number 7742672, domiciled at Ahumada 254, office No. 607, who appears
on his own behalf, and in addition, jointly with Mr. JORGE FRANCISCO
UGARTE ABREGO, Chilean, married, attorney, domiciled at Ahumada 254, office No. 607, national
identity card number 7935161-K, on behalf of Mr. JAIME UGARTE LEE, and on
the other hand and as “purchaser”, COMPAÑIA MINERA BARRICK CHILE LIMITADA, tax
identification number 59710-2, limited liability company, in the business of
mining, represented by Mr. KEVIN ATKINSON TEAR, British, married,
Certified Public Accountant, foreigners identity card number 88241598-9 and Mr. MARCOS
WARNER MUNOZ, Chilean, married, commercial engineer, identity card number 5856211-4, all domiciled at Pedro de
Valdivia 100, 11 floor, Providencia, all of legal age and who evidence their
identity with the above mentioned identity card numbers and state:

 

FIRST: Mr. JAIME
UGARTE LEE is the owner of 2760 shares and Mr. JAIME UGARTE ABREGO is the
owner of 300 shares, in both cases Serie B shares of COMPAÑIA MINERA NEVADA
S.A., hereinafter also “the Company”, corporation incorporated by public deed
dated February 7, 1983 granted before the Santiago Notary, Mr. Patricio
Rios Vergara, alternate Notary to the regular Mr. Mario Farren Cornejo, an
abstract of which was registered in the Registry of Commerce of the Santiago Real Estate Registrar, folio 3261,
number, 1812, year number 1983. COMPAÑIA MINERA NEVADA S.A. was formed as a
result of the transformation 

 

 

of the contractual mining company named COMPAÑIA
MINERA NEVADA, originally incorporated on December 6, 1977, before the Santiago
Notary Public Mr. Raul Undurraga Laso, alternate Notary to the regular Mr. Luis
Azócar Alvarez, registered in folio 415, No.25 of the Property Registry of the Huasco Real State Registrar
corresponding to year 1977.

 

SECOND: Mr. JAIME
UGARTE LEE, sells, assigns and transfers herein 2760 Serie B shares in COMPAÑIA
MINERA NEVADA S.A., which he owns, to COMPAÑIA MINERA BARRICK CHILE LIMITADA,
and whose representatives hereby purchase, accept and acquire.

 

THIRD: Mr. JAIME
UGARTE ABREGO on its turn, sells, assigns and transfers 300 Serie B shares in
COMPAÑIA MINERA NEVADA S.A., which he owns, to COMPAÑIA MINERA BARRICK CHILE
LIMITADA, and whose representatives hereby purchase, accept and acquire.

 

FOURTH: The shares are sold free of any debt, prohibition, lien or encumbrance.
The sellers deliver to the purchaser herein and the purchaser’s representatives
hereby assert to receive the stock certificates representing the shares that
are being transferred.

 

FIFTH: The purchase price of the shares being sold by both Mr. JAIME
UGARTE LEE and Mr. JAIME UGARTE ABREGO, totals the sum of seven million
dollars of the United States of America, plus a variable price which will be
determined according to the formula established in subsection (b) and
subsequent sections of this clause. The sale price is distributed among the
sellers in proportion to the shares that are sold hereby and is to be paid in
the following manner:

 

(a) the sum of seven million dollars, currency
of the United States of America, which the sellers personally and through his
representative, as applicable, assert to receive to their full and complete
satisfaction.

 

2

 

(b) a sum of three million and five hundred
thousand dollars, currency of the United States of America, to be paid within a
maximum of 10 days from the date when COMPAÑIA MINERA NEVADA S.A., or its
successor in title to the mining concessions, has produced at least of 30,000
ounces of troy gold during a 30 consecutive day period.

 

(c) a sum of three million five hundred
thousand dollars, currency of the United States of America, to be paid within
30 days following the date when COMPAÑIA MINERA NEVADA S.A., or its successor
in title to the exploitation mining concessions, has completed 36 months of
production of at least 30,000 ounces of troy gold, in a one month calendar
period, whether they are consecutive or not.

 

(d) a sum equivalent to a variable percentage
of the refined gold sales of COMPAÑIA MINERA NEVADA S.A., or its successor in
title to the exploitation mining concessions, from the exploitation of the
mining concessions owned at this time by that Company, as identified in Annex
A, which is signed by the parties and is considered an integral part of this
agreement, during each calendar quarter of operation, for a term of 120 years
from this date. The value of the sales will be calculated according to the
average daily price of refined gold known as “Cash Settlement” in the “London
Bullion Broker”, “P.M. Fix” or “London Final”, during the respective quarter.
If the “London Bullion Brokers” were to cease to exist or issue daily quotes
for gold, all references to said entity would be understood to be made to the
entity that replaces it and that establishes daily gold prices for gold of immediate
delivery in an open global market.

 

The percentage to be paid will be calculated
according to the following table for quarterly average gold price, determined
as follows.

 

(1) If the average price of gold is US $325
per troy ounce or less, the percentage will be 0.75%.

 

3

 

(2) If the average price of gold is US $350
per troy ounce, the percentage will be 1%.

 

(3) If the average price of gold is US $375
per troy ounce, the percentage will be 1.25%.

 

(4) If the average price of gold is US $400
per troy ounce, the percentage will be 1.5%.

 

(5) If the average price of gold is US $500
per troy ounce, the percentage will be 2.6%.

 

(6) If the average price of gold is US $600
per troy ounce, the percentage will be 3.4%.

 

(7) If the average price of gold is US $700
per troy ounce, the percentage will be 4.2%.

 

(8) If the average price of gold is US $800
per troy ounce or more, the percentage will be 5%.

 

In the event that average gold prices per troy
ounce are not provided specifically in the above table, the percentage to be
paid will be determined using a straight interpolation between the prices and
the percentages provided for in the table, rounding off the results to the
nearest figure to two decimals of one percent.

 

For example, if the average price in a calendar
quarter is US $390 dollars, the percentage to be paid will be 1.4 percent; if
the average price is US $414 dollars, the percentage to be paid will be 1.65 percent; if the average price is
US $415 dollars, the percentage to be paid will be 1.67 percent; and if the
average price is US $535 dollars, the percentage to be paid will be 2.88
percent. For these 

 

4

 

purposes, the amount of gold will be determined by
the number of troy ounces of refined gold produced by COMPAÑIA MNERA NEVADA
S.A., or its successor in title to the exploitation mining concessions, or
delivered to the Company or at its direction, by the Refinery, Smelter, or
another Processor to which the Company has delivered minerals from the
exploitation mining concessions referred to in Annex A, during a calendar
quarter. Refined gold will be defined as the one that meets or exceeds the
normally accepted commercial standards in the “commodities” market of London or
the United States of America, as good delivery gold or “Bullion Gold”.

 

(e) a sum equivalent to a percentage based on
the value of the sales of unrefined gold contained in the minerals or
concentrates, precipitates, cathodes, leached products or any other product,
whether it is final or intermediate, expressly excluding refined gold, that may
have been sold by COMPAÑIA MINERA NEVADA S.A., or its successor in title to the
exploitation mining concessions, from the exploitation of the mining
concessions identified in Annex A. The sellers will have the right to a
percentage from the sale of gold payable to COMPAÑIA MINERA NEVADA S.A., or its
successor in title to the exploitation mining concessions, according to the
settlements between the Company and the Refinery, Smelter and Processor or
other purchaser, in market conditions, based on the exchange of analysis and/or
on the corresponding arbitration or other mechanism to solve disputes as
provided in the respective agreement, during a calendar quarter, without taking
into account the eventual hedging. To determine the variable percentage to
apply in a quarter, in accordance with the table established in the preceding
subsection (d), it will be presumed that the average gold price is equal to the
total price actually paid during the quarter, divided by the number of troy
gold ounces paid according to the final settlements for that quarter.

 

For example, if the value of gold payable received
by COMPAÑIA MINERA NEVADA S.A. or its successor in title to the exploitation
mining concessions, in the quarterly settlements were $1 million dollars, for a total of 2985 payable troy gold
ounces, the average price of gold would be US $335 dollars and the percentage
to 

 

5

 

apply would be 0.85%; if the average payable price
received by COMPAÑIA MINERA NEVADA S.A. or its successor is one quarter were US
$2 million dollars for a total of 4651 payable troy gold ounces, the average
price of gold would be US $430 and the percentage to apply would be 1.83%, and
if the value of gold payable received by COMPAÑIA MINERA NEVADA S.A. or its
successor in a quarter were US $2.5 million
dollars, for a total of 4464 payable troy gold ounces, the average price of
gold would be US $560 dollars and the percentage to apply would be 3.08%.

 

(f) a sum equivalent to a percentage of 1% of
the value of actual sales from January 1, 2017 but not longer than 120
years from the date of this contract, of copper mineral, from COMPAÑIA MINERA
NEVADA S.A., or its successor in title to the exploitation mining concessions,
from such exploitation mining concessions identified in Annex A, during each
calendar quarter of operation following the said date, without taking into
consideration the eventual hedging and the net of the deductions identified
below.

 

The value of sales for the corresponding quarter
will be equivalent to the values payable to COMPAÑIA MINERA NEVADA S.A., or its
successor in title to the exploitation mining concessions for copper, by the
Refinery, Smelter or Processor to whom COMPAÑIA MINERA NEVADA S.A., or an
authorized third party or its successor in title to the exploitation mining
concessions, delivers in market conditions with the following deductions:

 

1) All costs and expenses related to the
transportation of concentrates and/or external processing to COMPAÑIA MINERA
NEVADA S.A. or its successor to the smelter, refinery or destination ports,
that is, ground freight, storing expenses, boarding cost by third parties,
maritime freight, insurance during the transport and other costs connected to
said transportation.

 

2) All lease (maquila) costs
and/or external processing costs to COMPAÑIA MINERA NEVADA S.A., or its
successor, made by third parties, that is, charges for 

 

6

 

metallurgical roasting, copper reductions, charges
for fusion, treatment, fines or penalties for impurities, losses, charges for
refinement of copper and price participation, according to the stipulations
normally found in these sale or lease (maquila)
contracts.

 

3) All external costs and charges directly related
to the sales of copper concentrated or metallic copper resulting from their
leases (maquilas), that is, external fees,
broker and insurance agency fees, storage, third party reviews, chemical
analysis, and costs for arbitration proceedings for differences related to the
metallic contents, if those were to exist.

 

4) Any encumbrance or tax applicable to the sales
or the maritime freight of the products included in the corresponding
statements, from an actual cost, that is, not recoverable by COMPAÑIA MINERA
NEVADA S.A., or its successor. Copper will be considered sold in the quarter
corresponding to the date of its settlement.

 

SIXTH: In the event that COMPAÑIA MINERA NEVADA S.A., or its successor in title
to the exploitation mining concessions produces, acquires, processes or
authorizes the processing of mineral substances that come from exploitation
concessions different from those identified in Annex A, whether that happens
with third parties or companies that are related with COMPAÑIA MINERA NEVADA
S.A. or that said company is affiliated with, or with those where COMPAÑIA
MINERA NEVADA S.A. has direct or indirect interest, the parties agree that such
minerals, metals or metal concentrated from different sources can be mixed or
commingled during the various mining processes or afterwards in any part of the
post mining process, and that in such case, the charges described in the
previous clause, will be made only with respect to the refined gold or
unrefined gold, and after year 2017, for copper obtained or recovered from the
metallic minerals and other mineralogical products, extracted from the
exploitation concessions described in Annex A. For such purpose, COMPAÑIA
MINERA NEVADA S.A. or its successor in title to the exploitation mining
concessions will determine the weight or the volume, and will take samples and
tests of the minerals and materials 

 

7

 

from said concessions before they are mixed or
commingled. The weight, volume, sampling and analysis results will be made
according to generally accepted principles and practices for sampling and
analysis in the mining industry. The referred to weight, volume and test will
serve as the base for the calculations of payments that are to be made
according to this agreement, in the event of a sale of mixed products and
minerals.

 

SEVENTH:
All payments set forth in dollars from the United States of America are to be
made in the national currency of Chile according to the observed dollar
exchange rate set the day prior to the day of actual payment. If the observed
dollar exchange rate ceases to exist, the exchange rate will be the average of
the purchaser exchange rate certified, at the request of the company purchasing
the dollar, for the day of actual payment, from any three of the following
banks: Citibank, N.A., Banco de Chile, Banco Santiago, Banco de Credito e
Inversiones y Banco Santander in Santiago Plaza, The amounts owed will not
accrue interest, except in the event of delay or delinquency in the payment,
where current interest rates will accrue.

 

EIGHTH: The sums to be paid quarterly will be paid within 30 days following the
end of said calendar quarter, in Chilean currency. Each payment will be
accompanied by documentation that supports the decision and calculation of the
amount of refined or unrefined gold, and after year 2017 for copper produced in
the mining concessions identified in Annex A, at the average gold price and at
the agreed percentage. For all legal effects, the settlements disclosed by the
purchasing company are believed to be correctly and properly calculated except
if they are objected to in writing within a maximum term of 90 days following
their presentation. No claims will be accepted after said term, so that the
payments made according to the settlements not timely claimed, will be
considered definitive and final.

 

COMPAÑIA MINERA BARRICK CHILE LIMITADA undertakes
herein to have COMPAÑIA MINERA NEVADA S.A., to allow and put at the disposal of
the joint 

 

8

 

representative of the sellers and/or independent
auditors hired by the sellers, at their cost, all documents corresponding to
the settlements and the production and sales calculations referred to above.
The named auditors must be auditors from a company registered with the Superintendencia de Bancos of the Republic of Chile to
perform audits and financial statements. To exercise this right, the sellers
shall always act by mutual agreement trough a common representative appointed
by public deed. This provision will apply to all successors and assignors of
the sellers of any kind. On its turn, COMPAÑIA MINERA BARRICK CHILE LIMITADA
hereby undertakes to impose to a third party that acquires the stocks in
COMPAÑIA MINERA NEVADA S.A. the obligation to honor and accept all requirements
and stipulations that are herein established in favor of the sellers, its
successors or assignors. Likewise, in case of a transfer of the title to the
exploitation mining concessions identified in Annex A, it commits that the new
title holder will assume the obligation to provide any existing information.

 

NINTH: The sellers, acting by mutual consent, may choose to have the payments
corresponding to the percentage of refined gold Production described in the
proceeding subsection (d), clause five, to be made by the delivery of physical
gold, provided they give at least 60 days notice to the purchaser prior to the
date of the respective payment. This option will only be available provided
that the legal rules and regulations of the Central Bank of Chile allow it
and provided that this does not trigger additional costs. The sellers will not
have the right to this option with respect to unrefined gold that may be found
in minerals concentrated. Likewise, the sellers, acting by mutual consent may
opt to have the payment of the shares purchase price referred to in this
contract made in dollars, currency of the United States of America, but only as
allowed under the rules and regulations of the Central Bank of Chile.

 

TENTH: The parties hereby assert that nothing in this agreement may be
interpreted as an obligation assumed by the purchaser, acting by itself, or on
behalf of COMPAÑIA MINERA NEVADA S.A., or its successor in title to the
exploitation mining concessions, to carry out the exploitation of the mining 

 

9

 

concessions described in Annex A or to assure that
the exploitation will have a predetermined term, characteristic or production.

 

ELEVENTH: For all purposes of this agreement, the references to refined gold or “bullion
gold” or “gold for good delivery” are understood to be made to a mineral gold
with a content of 99.5% of pure gold. Likewise, the references to the “hedging”
concept shall be understood as all actions with the purpose to secure or
determine a future sales price of gold.

 

TWELFTH: The parties assert that Annex A describes both exploitation mining
concessions and exploration mining concessions, understanding for all legal
purposes that the second claims are considered to be included in Annex A as
soon as they turn into exploitation mining concessions, in all or part.

 

THIRTEENTH: Mr. KEVIN
ATKINSON TEAR and MARCOS WARNER MUNOZ, acting also on behalf of BARRICK GOLD
CORPORATION, a corporation organized under the laws of Ontario, Canada with
domicile at Royal Bank Plaza, South Tower, 27 Floor, Toronto, Canada, state
hereby, in the representation they are vested with, that they agree to have
BARRICK GOLD CORPORATION as a joint debtor with COMPAÑIA MINERA BARRICK CHILE
LIMITADA with respect to the obligations that arise for the latter from this
agreement. This guarantee will continue to be in force even if COMPAÑIA MINERA
NEVADA S.A. is no longer affiliated with BARRICK GOLD CORPORATION or in the
event the exploitation mining concessions of Annex A are transferred to a third
party. These stipulations are of the essence of this agreement for the parties
and they have been determinant for its execution.

 

FOURTEENTH:
For all legal purposes, the parties fix their domicile in the city of Santiago
and submit to the jurisdiction of its courts. THE AUTHORITY of Mr. JAIME
AND JORGE UGARTE ABREGO to act on behalf of Mr. JAIME UGARTE LEE, is
evidenced in the general power of attorney granted by public deed before the
Notary of Santiago, Mr. Juan Ricardo San Martin Urrejola on the first of 

 

10

 

September of 1995, which is not inserted at the
request of the parties as it is known to them. THE AUTHORITY of MR. KEVIN
ATKINSON TEAR and MR. MARCOS WARNER MUNOZ to act on behalf of COMPAÑIA MINERA
BARRICK CHILE LIMITADA is evidenced in the public deed granted on July 31,
1997, before the Santiago Notary Mr. EDUARDO AVELLO CONCHA, which is not
inserted at the request of the parties as it is known to them. THE AUTHORITY of
MR. KEVIN ATKINSON TEAR and MR. MARCOS WARNER MUNOZ to act on behalf of BARRICK
GOLD CORPORATION is evidenced in the power of attorney public deed granted
before the Notary Public of Ontario, Canada, Sybill Fisa Veeman dated December 16,
1997 and recorded in the Santiago Notary of Mr. Arturo Carvajal Escobar,
on December 22, 1997, which is not inserted at the request of the parties
as it is known to them.

 

AS PROOF and after reading the document, those
appearing before me hereby sign. COPY IS GIVEN. I WITNESS.

 

11

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