Document:

exv10w4

 

Exhibit 10.4

PLEDGE OF SECURITIES

     This PLEDGE OF SECURITIES (this “Agreement”) dated as of February 22, 2006, is by High River
Gold Mines Ltd., a corporation formed under the federal laws of Canada (the “Guarantor”), in favour
of ROYAL GOLD, INC., a Delaware corporation (the “Secured Party”).

Recitals

     A. Société des Mines de Taparko, also known as SOMITA, SA, a société anonyme formed under the
laws of the Republic of Burkina Faso (the “Debtor”) is indebted and liable to the Secured Party
pursuant to that certain Funding Agreement, dated December 1, 2005, between the Debtor and the
Secured Party (the “Original Funding Agreement”) as amended by First Amendment to Funding Agreement
dated as of February 8, 2006, (the “First Amendment”), and as further amended and
restated by Amended and Restated Funding Agreement dated as of February 22, 2006 (as so amended and
restated, the “Funding Agreement”). Pursuant to the Funding Agreement, the Secured Party agreed to
provide funding to the Debtor in the amount of U.S.$35,000,000 to be used in the development of the
Project (as defined in the Funding Agreement) in the Republic of Burkina Faso. Except as
otherwise specifically noted, all capitalized terms used but not defined in this Agreement shall
have the meanings given to such terms in the Funding Agreement.

     B. The Guarantor is the indirect owner of 90% of the issued and outstanding shares of the
Debtor, through one of its subsidiaries. The Government of the Republic of Burkina Faso is the
owner of the remaining 10% of the issued and outstanding shares of the Debtor.

     C. In connection with the development of the Project, the Debtor has entered into the
Taparko/Bouroum Project Contract Agreement, dated as of February 3, 2006 (the “Construction
Agreement”), between Debtor and Senet CC, a corporation formed under the laws of the Republic of
South Africa (“Senet”).

     D. Pursuant to Section 4.2 of the Construction Agreement, Senet is obligated to provide
Performance Security (as defined in the Construction Agreement) in an amount equal to 10% of the
Accepted Contract Amount (as defined in the Construction Agreement) reducing to 5% upon the
occurrence of certain events stated therein. The Secured Party has required, as a condition
precedent to disbursement of the Second Tranche under the Funding Agreement, that the Guarantor
provide additional performance security for the obligations of Senet under the Construction
Agreement that are the subject of the Performance Security, and the Guarantor has agreed to provide
the additional performance security pursuant to the Guarantee Agreement dated February 22, 2006
(“Guaranty I”) from the Guarantor to and for the benefit of the Secured Party.

     E. Also in connection with the Funding Agreement, the Guarantor has agreed to provide a
guaranty of the obligations of the Debtor to develop and complete the Project, and of other
obligations of the Debtor and of the Guarantor, pursuant to the Guaranty and Agreement in Support
of Somita Funding Agreement dated as of February 22, 2006 (“Guaranty II”), from the

 

2.

Guarantor to and for the benefit of the Secured Party, and has agreed to secure the obligations
under Guaranty II by a pledge of all of the shares of stock of the Shareholder owned by
International and all of the shares owned by the Shareholder of the stock of the Debtor, pursuant
to the Pledge Agreement dated as of February 22, 2006 (“Pledge II”) by and among International,
Shareholder, and the Secured Party.

     F. In addition to other obligations of the Guarantor under the guaranties and pledge described
above, it is a condition precedent to the Secured Party’s obligation to disburse the Second Tranche
under the Funding Agreement that Guarantor has executed and delivered to Secured Party the
Contribution Agreement in Support of Funding Agreement dated as of February 22, 2006 (the
“Contribution Agreement”) from the Guarantor to and for the benefit of the Secured Party, pursuant
to which the Guarantor has committed, among other things, to provide additional funding to the
Debtor for the Project, provided that the obligations of the Guarantor under the Contribution
Agreement are secured by Pledge II and this Agreement.

     G. The board of directors of the Guarantor has determined that (i) the Guarantor will derive
substantial direct and indirect benefit from the transactions contemplated by the Funding Agreement
and the documents related thereto, (ii) the Debtor’s continuing ability to obtain the funding from
the Secured Party under the Funding Agreement is important to the financial success of the Debtor
and the Guarantor, (iii) the Guarantor will derive economic benefit from the financial success of
the Secured Party, and (iv) it is in the best interests of the Guarantor, and necessary and
convenient to the conduct, promotion and attainment of the business of the Guarantor, for the
Guarantor to provide additional performance security for the Obligations as provided in this
Agreement.

     H. This Agreement is executed and delivered to the Secured Party by the Guarantor to induce
the Secured Party to disburse the Second Tranche to the Debtor under the Funding Agreement and in
satisfaction of a condition precedent to the Secured Party providing such funding. The Guarantor
acknowledges and agrees that the Secured Party would not provide the funding to the Debtor under
the Funding Agreement unless the Secured Party executed and delivered this Agreement.

     I. This Agreement is the document referred to as “Pledge I” in the Funding Agreement.

Agreement

     For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor hereby agrees with the Secured Party as follows:

1. Obligations Secured. In consideration of the Secured Party dealing with or extending
credit for the benefit of Debtor, an indirectly owned subsidiary of the Guarantor, and other good
and valuable consideration, the Guarantor hereby enters into this Agreement with the Secured Party
as security for the payment and performance of all Obligations (as hereinafter defined).

 

3.

Insofar as it affects personal property located in Ontario, this Agreement is governed by the PPSA.

2. Definitions and Interpretation. In this Agreement, the following words shall, unless
otherwise provided, have the meanings set out below:

“Agreement” means this Pledge of Securities, executed by Guarantor in favour of Secured
Party;

“Business Day” means a day, other than a Saturday, Sunday or statutory holiday in the
Province of Ontario;

“Charged Securities” means all Securities of the Guarantor charged pursuant to Section 3 of
this Agreement;

“Collateral” means all Securities and other property and assets of the Guarantor and the
Proceeds thereof charged pursuant to Section 3 of this Agreement;

“Money” means a medium of exchange authorized or adopted by the Parliament of Canada as part
of the currency of Canada or by a foreign government as part of its currency;

“Obligation Documents” means, collectively, Guaranty I, Guaranty II and the Contribution
Agreement;

“Obligations” means all present and future liabilities and obligations, direct or indirect,
matured or unmatured, joint or several, absolute or contingent, of the Guarantor arising
pursuant to or in respect of (a) Guaranty I, (b) Guaranty II, (c) the Contribution
Agreement, and (d) the Side Letter;

“Person” means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership or other entity;

“PPSA” means the Personal Property Security Act (Ontario), as amended from time to time, and
any statute substituted therefor and any amendments thereto;

“Proceeds” means identifiable or traceable personal or real property in any form derived
directly or indirectly from any dealing with any of the Collateral or the proceeds
therefrom;

“Security” means a document that is,

	 	(a)	 	issued in bearer, order or registered form,
	 
	 	(b)	 	of a type commonly dealt in upon securities exchanges or markets or commonly
recognized in any area in which it is issued or dealt in as a medium for investment,

 

4.

	 	(c)	 	one of a class or series or by its terms is divisible into a class or series of
documents, and
	 
	 	(d)	 	evidence of a share, participation or other interest in property or in an
enterprise or is evidence of an obligation of the issuer,

and includes an uncertificated security within the meaning of Part VI (Investment
Securities) of the Business Corporations Act (Ontario).

“Security Interest” means the interest in the Collateral created in favour of the Secured
Party by this Agreement that secures or is intended to secure payment or performance by the
Guarantor of the Obligations.

“Side Letter” means the letter agreement dated March 1, 2006 from the Secured Party to the
Guarantor, and signed by each of the Secured Party, the Guarantor and the Debtor, which,
among other things, amends the Funding Agreement and the Contribution Agreement and
addresses the insurance shortfall of the Guarantor and the Debtor as of the date of such
letter agreement with respect to the insurance coverage required by Section 5.10 of the
Funding Agreement.

3. Creation of Security Interest. The Guarantor hereby pledges, grants, mortgages,
charges, hypothecates, transfers assigns and creates to the Secured Party and grants to and in
favour of the Secured Party a security interest in the following:

	 	(a)	 	12,015,000 common shares in the capital stock of Pelangio Mines Inc. (the
“Pelangio Stock”) and 1,790,941 common shares in the capital stock of Intrepid Minerals
Corporation (the “Intrepid Stock”); and
	 
	 	(b)	 	all products, issues, profits, returns, income, supporting obligations and
Proceeds of and from any and all of the foregoing (including, to the extent not
otherwise included, all payments under insurance (whether or not the Secured Party is
the loss payee thereof), or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing).

4. Registration of Charged Securities. With respect to any Charged Securities in
certificated form, the certificates representing such Charged Securities may remain registered in
the name of the Guarantor, and the Guarantor shall at the option of the Secured Party either duly
endorse such certificates in blank for transfer or execute stock powers of attorney in respect
thereof; in either case with signatures guaranteed and with all documentation being in form and
substance satisfactory to the Secured Party and any transfer agent appointed from time to time in
respect of the Charged Securities; provided that the parties hereto agree that prior to the date of
this Agreement that the Guarantor has delivered to the Secured Party the Pelangio Stock and the
Intrepid Stock, together with relevant stock powers of attorney. With respect to any Charged
Securities in uncertificated form evidenced in the records of a clearing agency or custodian or a
nominee of either, the Guarantor shall cause the Security Interest to be recorded in the records of
such clearing agency, custodian, or nominee in a manner which will satisfy the Secured Party that
the Security Interest in such Charged Securities has been perfected by possession. Notwithstanding
the foregoing, at any time and from time to time upon request by the Secured

 

5.

Party, the Guarantor shall cause any or all of the Charged Securities to be registered in the name
of the Secured Party or its nominee, and the Secured Party is hereby appointed the irrevocable
attorney of the Guarantor with full power of substitution to cause any or all of the Charged
Securities to be registered in the name of the Secured Party or its nominee.

5. Further Description of Collateral. Without limiting the generality of the description
of Collateral as set out in Section 3, for greater certainty the Collateral shall include all
present and future Securities described in any schedule now or hereafter attached hereto. The
Guarantor agrees to promptly inform the Secured Party in writing of the acquisition by the
Guarantor of any securities which are received in substitution for, as stock dividends on, or as
Proceeds of any Charged Securities, and the Guarantor hereby irrevocably constitutes and appoints
the Secured Party or any officer thereof as its true and lawful attorney, with full power of
substitution, to attach additional schedules to this Agreement from time to time to identify any
such additional Securities which are so intended by the parties to be subject to the Security
Interest.

6. Attachment. The parties acknowledge that value has been given, the Guarantor has rights
in the Collateral and the parties have not agreed to postpone the time for attachment of the
Security Interest.

7. Voting Rights. Until the Secured Party exercises its remedies under any Funding
Document following an Event of Default, the Guarantor shall be entitled to exercise all voting
rights attached to the Charged Securities and give consents, waivers and ratifications in respect
thereof; provided, however, that no vote shall be cast or consent, waiver or ratification given or
action taken which may adversely affect the interests of the Secured Party or the value of the
Charged Securities or which would impose any restriction on the transferability of any of the
Charged Securities.

All such rights of the Guarantor to vote and give consents, waivers and ratifications hereunder
shall cease immediately upon the Secured Party exercising its remedies under any Funding Document
following an Event of Default.

8. Dealing with Income and Proceeds. Upon the Secured Party exercising its remedies under
any Funding Document following an Event of Default, all dividends, interest and other income in
respect of Collateral and all Proceeds received by the Guarantor in respect of Collateral shall be
received by the Guarantor as trustee for the Secured Party and shall forthwith be paid over to the
Secured Party, to be applied against the Obligations or, at the option of the Secured Party, to be
held as additional security for the Obligations.

9. Representations and Warranties. The Guarantor hereby represents and warrants to the
Secured Party as follows and acknowledges that the Secured Party is relying upon such
representations and warranties in its present and future dealings with the Guarantor and the
Obligations:

	 	(a)	 	the Guarantor has the capacity and authority to incur the Obligations, create
the Security Interest and observe and perform all its obligations under this Agreement;

 

6.

	 	(b)	 	the execution and delivery of this Agreement and the performance by the
Guarantor of its obligations hereunder have been duly authorized by all necessary
proceedings;
	 
	 	(c)	 	except for the Security Interest, the Collateral is owned by the Guarantor free
from any mortgage, lien, charge, encumbrance, pledge, security interest or other claim
whatsoever; and
	 
	 	(d)	 	the chief executive office of the Guarantor is located at the address of the
Guarantor set out on the signing page of this Agreement.

10. Covenants. The Guarantor covenants and agrees with the Secured Party as follows:

	 	(a)	 	it will not, without the Secured Party’s prior written consent, sell, exchange,
transfer, assign, lend, charge, pledge, encumber or otherwise dispose of or deal in any
way with the Collateral or any interest therein save and except to the Secured Party
hereunder, or enter into any agreement or undertaking to do so;
	 
	 	(b)	 	it will do, make, execute and deliver such further and other assignments,
transfers, deeds, security agreements and other documents as may be required by the
Secured Party to grant to the Secured Party the Security Interest with the priority
intended hereby and generally to accomplish the intention of this Agreement;
	 
	 	(c)	 	it will pay all expenses, including solicitors’ and receivers’ fees and
disbursements, incurred by the Secured Party or its agents in connection with the
preparation, perfection, preservation and enforcement of this Agreement; including all
expenses incurred by the Secured Party or such agents in dealing with other creditors
of the Guarantor in connection with the establishment and confirmation of the priority
of the Security Interest; all of which expenses shall be payable by the Guarantor
forthwith upon demand by the Secured Party and shall form part of the Obligations;
	 
	 	(d)	 	it will pay when due any and all calls, subscription monies and other amounts
payable on or in respect of any Collateral and, if the Guarantor fails to do so, the
Secured Party may (but shall not be obligated to) do so and, if the Secured Party does
so, the Guarantor shall, upon demand by the Secured Party, reimburse the Secured Party
for such payment and the Secured Party may debit any account or accounts of the
Guarantor with such amount; and
	 
	 	(e)	 	it will, unless otherwise agreed by the Secured Party in writing, cause all
tangible Collateral to be situated at the Denver, Colorado offices of the Secured Party
at all times including when the Security Interest attaches to such tangible Collateral.

11. Enforcement. The Security Interest shall become enforceable immediately in connection
with the Secured Party exercising its remedies under any Funding Document following an Event of
Default.

 

7.

12. Remedies. Upon the Security Interest becoming enforceable, in addition to any other
remedies available at law or equity or contained in any other agreement between the Guarantor and
the Secured Party, the Secured Party may:

	 	(a)	 	obtain, by any method permitted by law, possession of any Charged Securities
which it does not then already hold;
	 
	 	(b)	 	realize upon, collect, sell, transfer, assign, give options to purchase, or
otherwise dispose of and deal with the Collateral or any part thereof;
	 
	 	(c)	 	notify any parties obligated in respect of any Proceeds to make payment thereof
to the Secured Party;
	 
	 	(d)	 	exercise all voting rights attached to the Charged Securities (whether or not
registered in the name of the Secured Party or its nominee) and give or withhold all
consents, waivers and ratifications in respect thereof and otherwise act with respect
thereto as though it were the absolute owner thereof;
	 
	 	(e)	 	exercise any and all rights of conversion, exchange, subscription or any other
rights, privileges or options pertaining to any of the Charged Securities as if it were
the absolute owner thereof including, without limitation, the right to exchange at its
discretion any and all of the Charged Securities upon the merger, consolidation,
reorganization, recapitalization or other readjustment of any issuer thereof, or upon
the exercise by any issuer of any right, privilege or option pertaining to any of the
Charged Securities, and in connection therewith, to deposit and deliver any of the
Charged Securities with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as it may determine, all without
liability except to account for property actually received by it;
	 
	 	(f)	 	comply with any limitation or restriction in connection with any proposed sale
or other disposition of the Charged Securities as may be necessary in order to comply
with applicable law or regulation or any policy imposed by any stock exchange,
securities commission or other governmental or regulatory authority or official, and
the Guarantor further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner, nor
shall the Secured Party be liable or accountable to the Guarantor for any discount in
the sale price of the Charged Securities which may be given by reason of the fact that
such Charged Securities are sold in compliance with any such limitation or restriction;
and
	 
	 	(g)	 	file proofs of claim and other documents in order to have the claims of the
Secured Party lodged in any bankruptcy, winding-up, or other judicial proceeding
relating to the Guarantor.

13. Failure of Secured Party to Exercise Remedies. The Secured Party shall not be liable
for any delay or failure to enforce any remedies available to it or to institute any proceedings
for such purposes.

 

8.

14.  Standards of Sale. (a) The Guarantor acknowledges that the Charged Securities are
of a type customarily sold on a recognized market, and accordingly the Guarantor agrees that
in connection with any enforcement of the Security Interest, the Secured Party may sell the
Charged Securities pursuant to this agreement on a recognized market without notice to the

	 	(b)	 	The Guarantor and the Secured Party acknowledge that any sale of Charged
Securities must occur in compliance with the relevant provisions of the Securities Act
(Ontario), as amended from time to time and any statute substituted therefor and any
amendments thereto and, as may otherwise be applicable, corresponding legislation in
other jurisdictions (“Securities Laws”), and that the Secured Party shall not be
obliged to effect a public sale of the Charged Securities and may sell the Charged
Securities pursuant to one or more private trades to a restricted group of purchasers
who may be obliged to agree, among other things, to acquire the Charged Securities as
principal and to comply with certain resale restrictions. The Secured Party shall be
under no obligation to delay a sale of such Charged Securities for any period of time
in order to permit the issuer thereof or any other person to qualify such Charged
Securities for public sale under applicable Securities Laws. The Secured Party shall
be under no obligation to sell the Charged Securities as a “control block” or at a
premium to the “market price”, as defined under applicable Securities Laws. The
Guarantor acknowledges that any private sale may be at prices and on other terms which
may be less favourable than a public sale or a control block sale; and the Guarantor
agrees that any such sale shall not, solely by reason of its being a private sale, be
deemed to have been made otherwise than in a commercially reasonable manner. Upon the
Security Interest becoming enforceable, the Guarantor consents, and agrees to use
reasonable efforts to cause the issuer of such Charged Securities to consent, to the
disclosure by the Secured Party to the public generally and to any prospective
purchaser of the Charged Securities of any information relating to the Charged
Securities, whether or not such information may be considered confidential at such
time.
	 
	 	(c)	 	The Secured Party shall be entitled to purchase for itself any or all of the
Collateral, whether in connection with a sale made under the power of sale herein
contained or pursuant to judicial proceedings or otherwise.

15. Dealings by Secured Party. The Secured Party may grant extensions of time and other
indulgences, take and give up securities, grant releases and discharges, and otherwise deal with
the Collateral, the Guarantor and others as the Secured Party may see fit, without prejudice to the
Obligations and the rights of the Secured Party to hold and realize upon the Security Interest.
The Secured Party has no obligation to keep Collateral or any portion thereof identifiable.

16. Notices. Without prejudice to any other method of giving notice, all communications
provided for or permitted hereunder shall be in writing and delivered in the same manner as
provided for notices under the Funding Agreement to the addresses set forth below the signature
blocks in this Agreement.

 

9.

17. Separate Security. This Agreement and the Security Interest are in addition to and not
in substitution for any other security now or hereafter held by the Secured Party in respect of the
Guarantor, the Obligations or the Collateral.

18. Power of Attorney. The Guarantor hereby constitutes and appoints the Secured Party or
any officer thereof as its true, lawful and irrevocable attorney, with full power of substitution,
to execute all documents and take any and all actions as may be necessary or desirable to perform
any obligations of the Guarantor arising pursuant to this Agreement, and in executing such
documents and taking such actions, to use the name of the Guarantor whenever and wherever it may be
considered necessary or expedient. This power of attorney is coupled with an interest and may not
be revoked.

19. Entire Agreement. This Agreement and the Guarantee including any schedules attached
hereto constitutes the entire agreement between the Guarantor and the Secured Party relating to the
subject matter hereof and no amendment to this agreement shall be effective unless it is in writing
and signed by the Guarantor and the Secured Party. There are no representations, warranties or
collateral agreements in effect between the Guarantor and the Secured Party relating to the
Security Interest and the Collateral and possession of an executed copy of this Agreement by the
Secured Party constitutes conclusive evidence that it was executed and delivered by the Guarantor
free of all conditions.

20. Enurement. This Agreement shall enure to the benefit of the Secured Party and its
successors and assigns and shall be binding on the Guarantor and the Guarantor’s successors and
permitted assigns, as may be applicable. The Guarantor shall have no right to assign any benefit
which it may be entitled to hereunder without the prior written consent of the Secured Party.

21. Headings. The headings in this Agreement are included for convenience of reference
only, and shall not constitute a part of this Agreement for any other purpose.

22. Construction. In construing this Agreement, terms herein shall have the same meaning
as defined in the PPSA, unless the context otherwise requires. The word “Guarantor”, the personal
pronoun “it” or “its” and any verb relating thereto and used therewith shall be read and construed
as required by and in accordance with the context in which such words are used. The term
"successors” shall include, without limiting its meaning, any corporation resulting from the
amalgamation of a corporation with another corporation. Where the context so requires, a word
importing the singular shall include the plural and vice versa and a word importing gender shall
include all genders.

23. Governing Law; Venue.

	 	(a)	 	This Agreement shall be construed in accordance with and governed by the laws
of the Province of Ontario. Notwithstanding the foregoing, for the purpose of legal
proceedings, this Agreement has been negotiated, executed and delivered in Denver,
Colorado.
	 
	 	(b)	 	EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NON EXCLUSIVE JURISDICTION OF, AT THE
ELECTION OF

 

10.

	 	 	 	SECURED PARTY, ANY UNITED STATES FEDERAL OR COLORADO STATE COURT SITTING IN DENVER,
COLORADO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. EACH OF
THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL
AFFECT ANY RIGHT THAT SECURED PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AGAINST GUARANTOR OR ITS PROPERTIES IN THE
COURTS OF ANY JURISDICTION. EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO,
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT
REFERRED TO IN THIS SECTION 23(b). EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN
ANY SUCH COURT.

	 	(c)	 	THE GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO THE SERVICE OF
PROCESS IN ANY SUIT, ACTION OR PROCEEDING IN SAID COURTS BY THE MAILING THEREOF IN
ACCORDANCE WITH SECTION 16 OF THIS AGREEMENT. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF ROYAL GOLD TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
	 
	 	(d)	 	Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall not invalidate the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
	 
	 	(e)	 	EXCEPT AS PROHIBITED BY LAW, EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY A JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
DOCUMENTS OR TRANSACTIONS RELATING THERETO.
	 
	 	(f)	 	The Guarantor represents and warrants that it has consulted with its legal
counsel regarding all waivers under this Agreement.

 

11.

24. Release of Charged Securities.

	 	(a)	 	The Secured Party shall, upon reasonable request from the Guarantor and
provided there is no outstanding claim with respect to or in connection with the
Charged Securities, release the Intrepid Stock from the Security Interest created
pursuant to this Agreement following the later of (i) successful results for the Tests
on Completion with respect to the Works as a whole, as determined in accordance with
the Construction Agreement, and (ii) the issuance of the Taking-Over Certificate with
respect to the Works as a whole. For the purposes of this paragraph, the terms “Tests
on Completion,” “Works” and “Taking-Over Certificate” shall have the meanings set forth
in the Construction Agreement on the date originally signed by the parties thereto,
notwithstanding any subsequent changes, amendments, modifications or waivers under the
Construction Agreement.
	 
	 	(b)	 	Following the satisfaction of all obligations under, and the termination of,
Guaranty II, the Secured Party shall, upon reasonable request from the Guarantor and
provided there is no outstanding claim with respect to or in connection with the
Charged Securities, release the Pelangio Stock from the Security Interest created
pursuant to this Agreement

25. Grace Periods. Notwithstanding anything herein to the contrary,

	 	(a)	 	upon the occurrence of an Event of Default under any of the Funding Documents,
the Secured Party agrees that it shall notify the Guarantor at least five (5) Business
Days prior to the sale of any Charged Securities (the “Notice Period”). During such
Notice Period, the Guarantor may (i) provide the Secured Party with suggestions
regarding the disposition and sale of the relevant Charged Securities, provided that
the final determination regarding all aspects of the disposition and sale of the
relevant Charged Securities following expiration of the Notice Period shall be in the
sole and exclusive discretion of the Secured Party, or (ii) deliver to the Secured
Party an amount of cash or marketable securities in exchange for the relevant Charged
Securities, provided that the decision related to whether such amount of cash or
marketable securities is acceptable in exchange for such relevant Charged Securities
shall be in the sole and exclusive discretion of the Secured Party; and
	 
	 	(b)	 	for a period of thirty (30) days following the occurrence of an Event of
Default (as defined in the Contribution Agreement) under the Contribution Agreement,
the Secured Party shall refrain from taking any action with respect to the sale of the
Charged Securities to which it would otherwise be entitled, provided that if the
Guarantor has not fully satisfied, or caused the full satisfaction of, its obligations
with respect to all amounts to be funded by the Guarantor pursuant to the Contribution
Agreement by the end of that thirty (30) day period, Royal Gold shall be entitled to
exercise all remedies with respect to the sale of the Charged Securities provided for
herein and in any of the other Funding Documents

 

12.

	 	 	 	immediately thereafter; provided that the five (5) Business Day period described in
Section 25(a) shall be included in this thirty (30) day period.

26. Miscellaneous.

	 	(a)	 	If one or more of the provisions contained herein shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or impaired
thereby.
	 
	 	(b)	 	In the event that any day, on or before which any action is required to be
taken hereunder, is not a Business Day, then such action shall be required to be taken
on or before the first Business Day thereafter.
	 
	 	(c)	 	The Secured Party may in writing (and not otherwise) waive any breach by the
Guarantor of any provision of this Agreement or any default by the Guarantor in the
observance or performance of any provision of this Agreement; provided always that no
waiver by the Secured Party shall extend to or be taken in any manner whatsoever to
affect any subsequent breach or default, whether of the same or a different nature, or
the rights resulting therefrom.
	 
	 	(d)	 	The Guarantor acknowledges receipt of an executed copy of this Agreement.

Execution Pages Follow

 

 

     This Agreement has been executed and delivered by the Guarantor as of the ___day of
February, 2006.

	 	 	 	 	 	 	 
	 	 	HIGH RIVER GOLD MINES LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	We have the authority to bind the Guarantor	 	 
	 
	 	 	 	 	 	 
	 	 	Guarantor’s Address For Notice Purposes:	 	 
	 
	 	 	 	 	 	 
	 	 	1700-155 University Avenue	 	 
	 	 	Toronto, Ontario	 	 
	 	 	M5H 3B7	 	 
	 
	 	 	 	 	 	 
	 	 	Fax No. 416-360-0010	 	 
	 
	 	 	 	 	 	 
	 	 	With a copy to:	 	 
	 
	 	 	 	 	 	 
	 	 	Cassels Brock & Blackwell LLP	 	 
	 	 	2100 Scotia Plaza, 40 King Street W.	 	 
	 	 	Toronto, Ontario M5H 3C2	 	 
	 	 	Attention: David Poynton	 	 
	 	 	Fax no. 416-644-9348	 	 
	 
	 	 	 	 	 	 
	 	 	Royal Gold’s Address for Notices and Service:	 	 
	 
	 	 	 	 	 	 
	 	 	1600 Wynkoop Street	 	 
	 	 	Suite 1000	 	 
	 	 	Denver, Colorado	 	 
	 	 	USA 80202-1132	 	 
	 	 	Attention: President	 	 
	 	 	Fax no. 303-595-9385	 	 

[EXECUTION PAGE TO PLEDGE OF SECURITIES]

 

 

	 	 	 	 	 	 	 
	 	 	Acknowledged and Agreed:	 	 
	 
	 	 	 	 	 	 
	 	 	ROYAL GOLD, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

[ACKNOWLEDGEMENT AND AGREEMENT PAGE TO PLEDGE OF SECURITIES]exv10w5

 

Exhibit 10.5

CONTRIBUTION AGREEMENT

IN SUPPORT OF SOMITA FUNDING AGREEMENT

     This CONTRIBUTION AGREEMENT IN SUPPORT OF SOMITA FUNDING AGREEMENT (this “Agreement”)
dated as of February 22, 2006, is from HIGH RIVER GOLD MINES LTD., a corporation formed under the
federal laws of Canada (“High River”) to and for the benefit of ROYAL GOLD, INC., a
Delaware corporation (“Royal Gold”).

Recitals

     A. Société des Mines de Taparko, also known as SOMITA, SA, a société anonyme formed under the
laws of the Republic of Burkina Faso (“Somita”) and Royal Gold entered into a Funding
Agreement dated as of December 1, 2005 (the “Original Funding Agreement”), as amended by
First Amendment to Funding Agreement dated as of February 8, 2006, and as further amended and
restated by Amended and Restated Funding Agreement dated as of February 22, 2006 (as so amended and
restated, the “Funding Agreement”). Pursuant to the Funding Agreement, Royal Gold agreed
to provide funding to Somita in the amount of U.S.$35,000,000 to be used in the development of the
Project (defined below) in Burkina Faso.

     B. High River is the indirect owner of 90% of the issued and outstanding shares of Somita,
through its subsidiary High River Gold Mines (West Africa) Ltd., a corporation formed under the
laws of the Cayman Islands (“Shareholder”). The Government of the Republic of Burkina Faso
is the owner of the remaining 10% of the issued and outstanding shares of Somita.

     C. In connection with the funding by Royal Gold, High River has agreed to provide a guaranty
(“Guaranty I”) of performance by Senet CC, a South African corporation, (“Senet”)
of Senet’s obligations under the Taparko/Bouroum Project Contract Agreement dated February 3, 2006,
in addition to the performance bond provided by Senet, and High River has agreed to secure that
guaranty by a pledge of its shares of stock of Intrepid Minerals Corporation and Pelangio Mines
Inc. (“Pledge I”).

     D. Also in connection with the Funding Agreement, High River has agreed to provide a guaranty
of the obligations of Somita to develop and complete the Project, and of other obligations of
Somita and of High River, (“Guaranty II”) and has agreed to secure that guaranty by a
pledge of all of the shares of stock of the Shareholder owned by High River Gold Mines
(International) Ltd. and all of the shares owned by the Shareholder of the stock of Somita
(“Pledge II”).

     E. In addition to other obligations of High River under the guaranties and pledges described
above, it is a condition precedent to Royal Gold’s obligation to disburse the Second Tranche under
the Funding Agreement that (i) High River shall execute and deliver to Royal Gold an undertaking by
High River to fund $10,847,383 of the Project after Royal Gold has funded $13,772,479 pursuant to
the Tranche Funding Schedule (attached to the Funding Agreement as Schedule V), and shall make such
additional fundings as may be required in the

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event of cost overruns and (ii) High River’s obligations under this Agreement shall be secured by
the pledges described above.

     F. The board of directors of High River has determined that (i) High River will derive
substantial direct and indirect benefit from the transactions contemplated by the Funding Agreement
and the documents related thereto, (ii) Somita’s continuing ability to obtain the funding from
Royal Gold under the Funding Agreement is important to the financial success of Somita and High
River, (iii) High River will derive economic benefit from the financial success of Somita, and (iv)
it is in the best interests of High River, and necessary and convenient to the conduct, promotion
and attainment of the business of High River, for High River to provide additional funding for the
Project as provided in this Agreement.

     G. This Agreement is executed and delivered to Royal Gold by High River to induce Royal Gold
to disburse the Second Tranche to Somita under the Funding Agreement and in satisfaction of a
condition precedent to Royal Gold providing such funding. High River acknowledges and agrees that
Royal Gold would not provide the funding to Somita under the Funding Agreement unless High River
executed and delivered this Agreement.

Agreement

     THEREFORE, in consideration of Royal Gold’s providing funding as set forth in the Funding
Agreement, and the benefits to be derived therefrom by High River, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, High River agrees as
follows:

     1. Definitions. Reference is hereby made to the Funding Agreement for all purposes.
All terms used in this Agreement that are defined in the Funding Agreement and not otherwise
defined herein shall have the same meanings when used herein. As used herein, terms defined above
in the recitals shall have the meanings indicated above, and the following terms shall have the
following meanings:

     “Additional RGI Interests” means the additional production payments, tail royalties
and milling fees acquired by Royal Gold pursuant to paragraph 6 below.

     “High River Gold Unit” means one HRG Share and one warrant to purchase one HRG Share,
as more specifically described in paragraph 5 below.

     “HRG Share” means a share of the common stock of High River.

     “Original Milling Fee” means the Milling Fee granted to Royal Gold pursuant to the
Conveyance of Tail Royalty and Grant of Milling Fee.

     “Original Production Payments” means the PP1 and PP2 production payments conveyed to
Royal Gold pursuant to the Conveyance of Production Payments.

     “Original RGI Interests” means the Original Production Payments, the Original Tail
Royalty and the Original Milling Fee, collectively.

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     “Original Tail Royalty” means the Tail Royalty conveyed to Royal Gold pursuant to the
Conveyance of Tail Royalty and Grant of Milling Fee.

     “Project” means development and exploitation of the Taparko Lands and the Bouroum
Lands for production of gold and associated precious metals, including construction of a mine,
support facilities and the Taparko Processing Facility.

     “Share Purchase Price” means, for each HRG Share, the 5-day volume weighted average
trading price (as described in the TSE Company Manual) for such HRG Share, such 5-day period ending
on the date of valuation of such HRG Share.

     “TSE” means the Toronto Stock Exchange.

     2. Funding Obligation.

     (a) Beginning April 1, 2006, High River shall make monthly fundings to Somita totalling
$10,847,383 as shown in the table set forth below, bringing the total contributions to the Project
by High River/Somita to $33,000,000. Further, in the event that Somita experiences cost overruns
above the expected costs set forth in the “Cumulative CAPITAL” column of the Somita Funding
Requirements chart set forth as Schedule I hereto such that Somita is unable to achieve a Project
Milestone without additional funding, High River shall provide Somita with such additional funding.
High River’s funding obligations set forth in this paragraph 2(a) are herein collectively called
the “HRG Fundings” and each is individually called an “HRG Funding.”

	 	 	 	 	 
	Funding for Development During	 	Expected
	Month	 	Funding Amount
	April 2006

	 	$	2,029,796	 
	May 2006

	 	$	3,541,739	 
	June 2006

	 	$	4,732,585	 
	July 2006

	 	$	543,263	 
	TOTAL

	 	$	10,847,383	 

     (b) Each of the HRG Fundings set forth in the table above shall be made on or before the first
day of the respective month. Each HRG Funding to fund cost overruns shall occur within five
Business Days after request for funding by Somita or request by Royal Gold, if Royal Gold makes
such request as provided in the Funding Agreement. Each HRG Funding shall be

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made by wire transfer of immediately available funds into the account designated by Somita, or if
the request for funding was made by Royal Gold, into the account designated by Royal Gold.

     (c) The HRG Fundings are in addition to, and not in lieu of, any and all obligations of High
River under each other Funding Document to which High River is a party.

     3. High River Failure to Fund. If High River shall fail to make any HRG Funding
within five Business Days after request by Somita, or by Royal Gold acting on behalf of Somita,
Royal Gold shall have right, in its sole discretion, to elect, within 15 days after such failure by
HRG, either (a) to provide funding in the amount of the HRG Funding that High River failed to fund,
in which event Royal Gold shall have the options set forth in paragraph 4 below, or (b) to declare
a default hereunder and under the Funding Agreement, in which event Royal Gold shall have all of
its rights and remedies set forth herein and in all of the other Funding Documents and as provided
in equity and at law. Royal Gold may make the election to fund provided herein by delivering
notice in writing to High River designating its election of one of the options set forth in
paragraph 4.

     4. Royal Gold Funding Option. If Royal Gold shall elect to provide funding in the
amount of the HRG Funding that High River failed to fund, Royal Gold may elect to acquire either
High River Gold Units as provided in paragraph 5 below, or Additional RGI Interests as provided in
paragraph 6 below.

     5. Election to Acquire High River Gold Units.

     (a) If Royal Gold elects to acquire High River Gold Units, High River shall promptly deliver
to Royal Gold that number of High River Gold Units as have an aggregate value equal to the amount
of the HRG Funding that High River failed to fund, subject to TSE approval, which approval HRG
shall use best efforts to obtain.

     (b) The value of each High River Gold Unit delivered Royal Gold shall be equal to the Share
Purchase Price of one HRG Share on the date of Royal Gold’s election less the maximum discount
allowed by the TSE off such Share Purchase Price.

     (c) Each warrant included in a High River Gold Unit shall be exercisable for 24 months
following the receipt by Royal Gold of the respective High River Gold Unit, with an exercise price
equal to 125% of the Share Purchase Price for the HRG Share in such High River Gold Unit. Each
warrant delivered to Royal Gold pursuant to this Agreement shall be in the form of Exhibit A
hereto, and subject only to the four-month holding period required by Canadian law, each HRG Share
underlying such warrant shall be freely tradable by Royal Gold without restriction immediately
following the exercise of such warrant by Royal Gold.

     (d) Each HRG Share delivered to Royal Gold shall be represented by a certificate or
certificates, registered in the name of Royal Gold, and shall be issued and delivered to Royal Gold
as soon as practicable after Royal Gold’s election to acquire High River Gold Units. Royal Gold
shall be deemed to have become the holder of record of such shares on the date on which Royal Gold
exercised its election to acquire High River Gold Units, irrespective of the date of delivery of
such certificate or certificates, except that, if the date of such surrender and payment

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is a date when the stock transfer books of the Company are closed, such person shall be deemed
to have become the holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open. Each HRG Share delivered to Royal Gold pursuant to this
Agreement shall be registered on the TSE and, subject only to the four-month holding period
required by Canadian law, shall be freely tradable by Royal Gold immediately following the delivery
thereof.

     (e) No fractional shares shall be issued upon the exercise by Royal Gold of its right to
acquire High River Gold Units as a consequence of any calculation of the number of HRG Shares to be
delivered to Royal Gold pursuant hereto or pursuant to the Warrants. All HRG Shares (including
fractions) issuable upon exercise by Royal Gold pursuant hereto or the Warrants may be aggregated
for purposes of determining whether the exercise would result in the issuance of any fractional
share. High River shall, in lieu of issuance of any fractional share, pay Royal Gold a sum in cash
equal to the product resulting from multiplying the Share Purchase Price of an HRG Share by such
fraction.

     6. Election to Acquire Additional RGI Interests. If Royal Gold shall elect to acquire
Additional RGI Interests, High River shall (a) cause Somita to deliver to Royal Gold assignments of
additional production payments, in form and substance the same as the Original Production Payments,
but in an amount calculated as set forth below, and (b) shall execute and deliver to Royal Gold a
Consideration Agreement in the form of Exhibit B attached hereto agreeing to pay Royal Gold amounts
calculated as set forth below. The amounts of the Additional RGI Interests to be delivered to
Royal Gold shall be equal to the amounts of the Original RGI Interests times the percentage that
results from dividing the amount of the HRG Funding that High River failed to fund by $35,000,000.
For example, if High River fails to make an HRG funding in the amount of $5,000,000, and if Royal
Gold elects to fund such amount in return for Additional RGI Interests, the rates of PP1 and PP2,
and the monetary equivalents of the Tail Royalty and the Milling Fee to be delivered pursuant to
the Additional RGI Interests would be 14.2% of the Original RGI Interests. In addition, the form
of documentation of the Additional RGI Interests will reflect the additional amount of funding
provided by Royal Gold and all limitations set forth in such documentation shall be equal to the
amount of funding provided by Royal Gold.

     7. Representations and Warranties. High River hereby represents and warrants to Royal
Gold as follows:

     (a) High River is a corporation duly organized, validly existing and in good standing under
the federal laws of Canada, having all powers required to carry on business and enter into and
carry out the transactions contemplated hereby. High River is duly qualified, in good standing,
and authorized to do business in all jurisdictions wherein the character of the properties owned or
held by it or the nature of the business transacted by it makes such qualification necessary,
except where the failure to so qualify could not have a Material Adverse Effect.

     (b) High River has the requisite power to own and operate its properties, to carry on business
and to execute, deliver, and perform this Agreement and each of the other Funding Documents to
which it is or will be a party. High River has duly taken all action necessary to

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authorize the execution and delivery by it of the Funding Documents to which it is a party and to
authorize the consummation of the transactions contemplated thereby and the performance of its
obligations thereunder.

     (c) The execution and delivery by High River of this Agreement and the other Funding Documents
to which it is a party, the performance of its obligations hereunder and thereunder and the
consummation of the transactions contemplated hereby and thereby, do not and will not (i) conflict
with any provision of (A) any Law applicable to High River or its business, (B) its organizational
documents, or (C) any material agreement, judgment, license, order or permit applicable to or
binding upon it or to which its assets are subject, (ii) result in the acceleration of any
Indebtedness owed by it, or (iii) result in or require the creation of any Lien upon any assets or
properties owned by it except as expressly contemplated or permitted in this Agreement or the other
Funding Documents. Except as expressly contemplated in this Agreement or the other Funding
Documents, no permit, consent, approval, authorization or order of, and no notice to or filing
with, any Tribunal or third party is required (x) in connection with the execution, delivery or
performance of this Agreement or any other Funding Documents to which it is a party, or (y) to
consummate any transactions contemplated by this Agreement or any other Funding Documents to which
it is a party.

     (d) This Agreement is, and the other Funding Documents to which High River is a party, when
duly executed and delivered will be, legal, valid and binding obligations of High River,
enforceable in accordance with their terms except as such enforcement may be limited by bankruptcy,
insolvency or similar Laws of general application relating to the enforcement of creditors’ rights,
and subject to the qualifications that equitable remedies may only be granted in the discretion of
a court of competent jurisdiction and that rights of indemnity, contribution and waiver of
contribution may be limited under applicable law.

     (e) Upon giving effect to the execution of the other Funding Documents to which High River is
a party and the consummation of the transactions contemplated hereby and thereby (i) High River
will be solvent (as such term is used in applicable bankruptcy, liquidation, receivership,
insolvency or similar Laws), and the sum of High River’s absolute and contingent liabilities,
including the Obligations or guarantees thereof, shall not exceed the fair market value of High
River’s assets, and (ii) High River’s capital will be adequate for the businesses in which High
River is engaged and intends to be engaged. High River has not incurred (whether hereunder, under
the other Funding Documents to which it is a party or otherwise), nor does High River intend to
incur, or believe that it will incur, debts that will be beyond its ability to pay as such debts
mature.

     (f) High River does not have in effect any shareholder rights plan, poison pill or other
agreement (a “Poison Pill”) that could be triggered upon the sale of the High River Gold
Units (including the exercise of the warrants), which could make the HRG Shares or High River’s
financial condition less desirable to Royal Gold as a result of the acquisition of the High River
Gold Units or the exercise of the warrants.

     (g) High River’s contributions to Somita for the Project through the date of this Agreement
total $22,152,617.

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6

 

     8. Covenants. High River hereby covenants and agrees as follows:

     (a) All HRG Shares delivered to Royal Gold shall be validly issued and outstanding, fully paid
and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof.

     (b) High River shall at all times have authorized and reserved, free from preemptive rights, a
sufficient number of shares of the series of equity securities comprising the HRG Shares to provide
for Royal Gold’s exercise of rights set forth in this Agreement. If at any time the number of
authorized but unissued shares of such series of High River’s equity securities shall not be
sufficient to permit Royal Gold to exercise its rights under this Agreement, High River shall take
such corporate action as may be necessary to increase its authorized but unissued shares of such
series of High River’s equity securities to such number of shares as shall be sufficient for such
purposes. High River shall use its best efforts to obtain all consents necessary to issue the High
River Gold Units to Royal Gold.

     (c) High River shall not, by amendment of its governing documents or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue of securities to
shareholders of High River generally or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed hereunder by High River,
but shall at all times in good faith assist in the carrying out of all the provisions of this
Agreement and in the taking of all such action as may be necessary or appropriate in order to
protect the exercise rights of the Royal Gold against impairment. In the case of any
reclassification or change of outstanding securities issuable upon acquisition by Royal Gold of
High River Gold Units, any consolidation or merger of High River with or into another corporation
(other than a merger with another corporation in which High River is a continuing corporation and
which does not result in any reclassification, change or exchange of outstanding securities
issuable upon acquisition of High River Gold Units), or any sale or transfer to another corporation
of all, or substantially all, or the property of High River, then, as a condition to such event,
High River (or such successor or purchasing corporation, as the case may be) shall make lawful and
adequate provisions whereby the number and class of shares available hereunder and under the
warrants in the aggregate and the Share Purchase Price shall be correspondingly adjusted to give
Royal Gold the total number, class, and kind of shares as Royal Gold would have owned hereunder and
as would have been available under the warrants had Royal Gold exercised its right to acquire High
River Gold Units prior to the event and had Royal Gold continued to hold such High River Gold Units
until after the event requiring adjustment. For greater certainty, in the event that High River
adopts or approves a shareholder rights plan or similar plan, no adjustment will be made to the
rights of Royal Gold hereunder or under the warrants until such time as the rights issued pursuant
to such shareholder rights plan or similar plan becomes exercisable. High River shall not effect
any such consolidation, merger or sale unless, prior to the consummation thereof, the successor
corporation (if other than High River) resulting from such consolidation or the corporation
purchasing such assets shall assume, by written instrument executed and mailed or delivered to
Royal Gold the obligation to deliver to Royal Gold such shares of stock, securities or assets as,
in accordance with the foregoing provisions, Royal Gold may be entitled to acquire.

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     (d) If any other event occurs as to which the other provisions of this paragraph 8 are not
strictly applicable or if strictly applicable would not fairly protect the rights of Royal Gold
with respect to the High River Gold Units in accordance with such provisions, then the Board of
Directors of the Company shall make an adjustment in the number and class of HRG Shares available
hereunder and under the warrants, the Share Purchase Price or the application of such provisions,
so as to protect the rights of Royal Gold. The adjustment shall be such as to give Royal Gold upon
exercise the total number, class and kind of HRG Shares as it would have owned and as would have
been available under the warrants had Royal Gold exercised its rights with respect to the High
River Gold Units prior to the event and had it continued to hold such High River Gold Units until
after the event requiring adjustment.

     9. Events of Default. The occurrence and continuation of any of the following shall
constitute an Event of Default hereunder:

     (a) High River fails to fund an HRG Funding Amount on the date due and Royal Gold elects (in
its sole discretion) to declare a default rather than to fund the HRG Funding Amount;

     (b) High River fails to deliver the High River Gold Units, if Royal Gold makes the election to
acquire the same pursuant to paragraph 5, or High River fails to deliver the Additional RGI
Interests, if Royal Gold makes the election to acquire the same pursuant to paragraph 6;

     (c) any representation or warranty made by High River under any Funding Document to which it
is a party shall prove to have been incorrect in any material respect when made;

     (d) High River fails to perform or observe any term, covenant or agreement contained in any
Funding Document to which it is a party;

     (e) High River, International, Shareholder or Somita generally does not pay its debts as such
debts become due, or admits in writing its inability to pay its debts generally, or makes a general
assignment for the benefit of creditors; or any proceeding is instituted by or against High River,
International, Shareholder or Somita seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief of the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial party of its property
and, in the case of any such proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of 60 days, or any of the actions
sought in such proceeding (including, without limitation, the entry of an order for relief against,
or the appointment of a receiver, trustee, custodian or other similar official for it or for any
substantial part of its property) occurs; or High River, International, Shareholder or Somita takes
any corporate action authorizing any of the actions set forth above; or

     (f) any Event of Default shall have occurred under the Funding Agreement.

Upon the occurrence of an Event of Default, Royal Gold shall have all or its rights and remedies
set forth herein and in all of the other Funding Documents and as provided in equity and at law.

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     10. Amendments. No provision or term of this Agreement may be amended, modified,
revoked, supplemented, waived or otherwise changed except by a written instrument duly executed by
High River and Royal Gold and designated as an amendment, supplement or waiver.

     11. Agreement Reinstated. This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of any of the
Obligations is rescinded or must otherwise be restored or returned by Royal Gold, all as though
such payment had not been made.

     12. Notices. Any notice, election, report or other correspondence required or
permitted hereunder shall be in writing and shall be deemed sufficiently given or furnished if
delivered by personal delivery, by facsimile or other electronic transmission, or by delivery
service with proof of delivery, to each of the parties at its address below (unless changed by
similar notice in writing given by the party whose address is to be changed):

     If to High River:

High River Gold Mines Ltd.

155 University Avenue

Suite 1700

Toronto, Ontario M5H 3B7

Attention: President

Facsimile: (416) 360-0010

     with a copy to Cassels Brock & Blackwell LLP:

Cassels Brock & Blackwell LLP

2100 Scotia Plaza, 40 King Street W.

Toronto, Ontario M5H 3C2

Attention: David Poynton

Facsimile: (416) 644-9348

     If to Royal Gold:

Royal Gold, Inc.

1660 Wynkoop St.

Suite 1000

Denver, Colorado 80202-1132

Attention: President

Facsimile Number: 303-595-9385

Any such notice or communication shall be deemed to have been given (a) in the case of personal
delivery or delivery service, as of the date of first attempted delivery during normal

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business hours at the address provided herein, (b) in the case of facsimile, upon receipt, or (c)
in the case of other electronic transmission, upon acknowledgment of receipt by the recipient
within twenty-four (24) hours of first attempted delivery.

     13. Captions and Headings. The captions and headings of the various sections of this
Agreement are for convenience only, and are not to be construed as confining or limiting in any way
the scope or intent of the provisions hereof.

     14. Binding Effect. This Agreement will be binding on High River and its successors
and permitted assigns, and will inure to the benefit of Royal Gold and all successors and permitted
assigns of Royal Gold. High River consents to the assignment of all or any portion of the rights
of Royal Gold hereunder in connection with any permitted assignment of the rights of Royal Gold
under the Funding Agreement or the Conveyances with prior notice to High River.

     15. Waiver. Royal Gold shall not be deemed to have waived any provision of this
Agreement unless such waiver is in writing and is signed by Royal Gold.

     16. Provisions Several/Illegality. The unenforceability or invalidity of any
provision or provisions hereof shall not render any other provision or provisions herein contained
unenforceable or invalid and in lieu of each such illegal, invalid or unenforceable provision there
shall be added automatically as a part of this Agreement a provision as similar in terms to such
illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and
enforceable.

     17. Choice of Law. This Agreement has been negotiated, executed and delivered in
Denver, Colorado, and is intended to be construed in accordance with the laws of the State of
Colorado.

     18. Consent to Jurisdiction; Waiver of Jury Trial, etc..

     (a) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE NON EXCLUSIVE JURISDICTION OF, AT THE ELECTION OF ROYAL GOLD, ANY
UNITED STATES FEDERAL OR COLORADO STATE COURT SITTING IN DENVER, COLORADO IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ROYAL GOLD MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST HIGH RIVER OR
ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST

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EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT IN ANY COURT REFERRED TO IN THIS SECTION 18(a). EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE
OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

     (b) HIGH RIVER HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO THE SERVICE OF PROCESS IN
ANY SUIT, ACTION OR PROCEEDING IN SAID COURTS BY THE MAILING THEREOF IN ACCORDANCE WITH SECTION 19
OF THIS AGREEMENT. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ROYAL GOLD TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW.

     (c) Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction
shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction.

     (d) EXCEPT AS PROHIBITED BY LAW, EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ANY RIGHT IT MAY
HAVE TO A TRIAL BY A JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER DOCUMENTS OR TRANSACTIONS RELATING
THERETO.

     (e) High River represents and warrants that it has consulted with its legal counsel regarding
all waivers under this Agreement.

     19. Service of Process. Service of process in any matter shall be made to High River
at the following address:

High River Gold Mines Ltd.

155 University Avenue

Suite 1700

Toronto, Ontario M5H 3B7

Attention: President

Facsimile: (416) 360-0010

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11

 

     with a copy to Cassels Brock & Blackwell LLP:

Cassels Brock & Blackwell LLP

2100 Scotia Plaza, 40 King Street W.

Toronto, Ontario M5H 3C2

Attention: David Poynton

Facsimile: (416) 644-9348

     High River agrees that service of process, writ, judgment, or other notice of legal process at
the address above shall be (i) deemed and held in every respect to be effective personal service
upon it and (ii) deemed sufficiently given or furnished if delivered by personal delivery, by
facsimile or other electronic transmission, or by delivery of service with proof of delivery. High
River shall maintain a presence at the address above (unless changed by similar notice in writing
given by High River) continuously at all times while High River is obligated under this Agreement
or any of the other Funding Documents to which it is a party. Nothing herein shall affect Royal
Gold’s right to serve process in any other manner permitted by applicable law.

     20. Currency. All dollar amounts set forth herein are in U.S. dollars.

     21. Funding Document. This Agreement is one of the Funding Documents within the
definition set forth in the Funding Agreement.

[Signature page follows]

Execution Version

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     This Agreement has been executed by High River on the date set forth below, to be effective as
of the date first set forth above.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	HIGH RIVER GOLD MINES LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 

Execution Version

13

 

EXHIBIT A

Form of Warrant

[LEGENDS REQUIRED BY SECURITIES LAWS OR TORONTO STOCK EXCHANGE]

HIGH RIVER GOLD LTD.

WARRANT TO PURCHASE COMMON STOCK

			
	 	 	 
	No. [WC-___]
	 	[___], 200_

Void After Two Years from Date of Issuance

     This certifies that, for value received, Royal Gold, Inc., with its principal office at 1660
Wynkoop Street, Suite 1000, Denver, Colorado 80202 USA (the “Holder” or “Purchaser”), is entitled
to subscribe for and purchase at the Exercise Price (defined below) from High River Gold Mines
Ltd., a corporation formed under the federal laws of Canada, with its principal office at 155
University Avenue, Suite 1700, Toronto, Ontario M5H 3B7 Canada (the “Company”), the Exercise Shares
(defined below) upon the terms and subject to the adjustments as provided herein.

1. Issuance.

     This Warrant (this “Warrant”) is being issued in connection with the Contribution Agreement in
Support of Somita Funding Agreement, dated as of February 22, 2006, (the “Contribution Agreement”)
by the Company to and for the benefit of Holder. Capitalized terms used herein but not otherwise
defined shall have the meanings given to them in the Contribution Agreement. The Company and
Holder shall perform, or cause to be performed, all acts, and execute and deliver all agreements,
amendments, instruments and other documents necessary or required to grant Holder the rights and
obligations described herein.

2. Definitions.

     As used herein, the following terms shall have the following respective meanings:

     (i) “Exercise Period” shall mean the time period commencing with the date of this
Warrant and ending two years from date of this Warrant, unless sooner terminated as provided
below.

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     (ii) “Exercise Price” shall be U.S.                    1 per share of the Company’s common
stock (the “Common Stock”), subject to adjustment pursuant to Section 4.

     (iii)
“Exercise Shares” shall mean                    2 shares of the Common Stock,
subject to adjustment pursuant to Section 4.

3. Exercise of Warrant.

     The rights represented by this Warrant may be exercised in whole or in part at any time during
the Exercise Period, by delivery of the following to the Company at its address set forth above (or
at such other address as it may designate by the Company in writing to the Holder):

     (i) an executed Notice of Exercise in the form attached hereto;

     (ii) payment of the Exercise Price, at the option of Holder, (i) in cash, by check, or
by the cancellation of indebtedness or some combination of the foregoing, or (ii) pursuant
to Section 2.1 below; and

     (iii) this Warrant.

     Upon the exercise of the rights represented by this Warrant, a certificate or certificates for
the Exercise Shares so purchased, registered in the name of the Holder or persons affiliated with
the Holder, if the Holder so designates in writing, shall be issued and delivered to the Holder as
soon as practicable after the rights represented by this Warrant shall have been so exercised. In
the event that this Warrant is being exercised for less than all of the then-current number of
Exercise Shares purchasable hereunder, the Company shall, concurrently with the issuance by the
Company of the number of Exercise Shares for which this Warrant is then being exercised, issue a
new Warrant exercisable for the remaining number of Exercise Shares purchasable hereunder.

     The person in whose name any certificate or certificates for Exercise Shares are to be issued
upon exercise of this Warrant shall be deemed to have become the holder of record of such shares on
the date on which this Warrant was surrendered and payment of the Exercise Price was made,
irrespective of the date of delivery of such certificate or certificates, except that, if the date
of such surrender and payment is a date when the stock transfer books of the Company are closed,
such person shall be deemed to have become the holder of such shares at the close of business on
the next succeeding date on which the stock transfer books are open.

     Notwithstanding any provisions herein to the contrary, if the fair market value of one share
of the class and series of the Company’s capital stock to which the Exercise Shares belong

 

			
	1	 	Insert the exercise price, which is calculated as
follows: 125% of the Share Purchase Price, as defined in the Contribution
Agreement.
	 
	2	 	Insert the number of shares to be purchased
pursuant to this Warrant, which will be the same number as the High River Gold
Units delivered to Royal Gold pursuant to paragraph 5(a) of the Contribution
Agreement

Execution Version

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(the “Stock”) is greater than the Exercise Price (at the date of calculation as set forth
below), in lieu of exercising this Warrant by payment of cash, the Holder may elect (the
“Conversion Right”) to receive shares equal to the value (as determined below) of this Warrant (or
the portion thereof being canceled) by surrender of this Warrant at the principal office of the
Company together with the properly endorsed Notice of Exercise, in which event the Company shall
issue to the Holder a number of shares of the applicable class and series of Stock computed using
the following formula:

	 	 	 
	X = Y (A-B)
	   A

	 	 	 	 	 
	 

	 	Where X =
	 	the number of shares of Stock to be issued to the Holder
	 
	 	 	 	 
	 

	 	Y =
	 	the number of shares of Stock then purchasable under the
Warrant or, if only a portion of the Warrant is being exercised, the portion of
the Warrant being canceled (at the date of such calculation)
	 
	 	 	 	 
	 

	 	A =
	 	the fair market value of one share of the Stock (at the date
of such calculation)
	 
	 	 	 	 
	 

	 	B =
	 	Exercise Price (as adjusted to the date of such calculation)

     For purposes of the above calculation, the fair market value of one share of the Stock shall
be (i) the average of the closing prices of the Common Stock on the Toronto Stock Exchange over the
5 day trading period ending three days prior to the date of exercise; (ii) if such Common Stock is
no longer traded on the Toronto Stock Exchange and is actively traded over-the-counter, the value
shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over
the 5 day trading period ending three days prior to the date of exercise; and (iii) if there is no
active public market, the value shall be the fair market value thereof, as determined by the
Company’s Board of Directors in good faith.

4. Covenants of the Company.

     (a) Covenants as to Exercise Shares. The Company covenants and agrees that all
Exercise Shares that may be issued upon the exercise of the rights represented by this
Warrant will, upon issuance, be validly issued and outstanding, fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the issuance
thereof. The Company further covenants and agrees that the Company will at all times during
the Exercise Period, have authorized and reserved, free from preemptive rights, a sufficient
number of shares of the series of equity securities comprising the Exercise Shares to
provide for the exercise of the rights represented by this Warrant. If at any time during
the Exercise Period the number of authorized but unissued shares of such series of the
Company’s equity securities shall not be sufficient to permit exercise of this Warrant, the
Company shall take such corporate action as may be necessary to increase its authorized but
unissued shares of such series of the Company’s equity securities to such number of shares
as shall be sufficient for such purposes.

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     (b) No Impairment. Except and to the extent as waived or consented to by the
Holder, the Company will not, by amendment of its governing documents or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue of securities
to shareholders of the Company generally or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the carrying out of
all the provisions of this Warrant and in the taking of all such action as may be necessary
or appropriate in order to protect the exercise rights of the Holder against impairment.

     (c) Notices of Record Date. In the event of any taking by the Company of a record
of the holders of any class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend or other distribution, the Company shall mail to
the Holder, at least 20 days prior to the date specified herein, a notice specifying the
date on which any such record is to be taken for the purpose of such dividend or
distribution.

5. Adjustment of Exercise Price and Exercise Shares; Effect of Organic Changes.

     (a) Adjustment of Exercise Price. In the event of changes in the applicable class and
series of the outstanding Stock by reason of stock dividends, splits, recapitalizations,
reclassifications, mergers, combinations or exchanges of shares, separations,
reorganizations, liquidations, or the like, the number and class of shares available under
the Warrant in the aggregate and the Exercise Price shall be correspondingly adjusted to
give the Holder of the Warrant, on exercise for the same aggregate Exercise Price, the total
number, class, and kind of shares as the Holder would have owned had the Warrant been
exercised prior to the event and had the Holder continued to hold such shares until after
the event requiring adjustment. The form of this Warrant need not be changed because of any
adjustment in the number of Exercise Shares subject to this Warrant.

     (b) Adjustment on Change of Control. In the case of any reclassification or change of
outstanding securities issuable upon any exercise by the Holder of its rights under this
Warrant, any consolidation or merger of the Company with or into another corporation (other
than a merger with another corporation in which the Company is a continuing corporation and
which does not result in any reclassification, change or exchange of outstanding securities
issuable upon exercise of rights under this Warrant), or any sale or transfer to another
corporation of all, or substantially all, or the property of the Company, then, as a
condition to such event, the Company (or such successor or purchasing corporation, as the
case may be) shall make lawful and adequate provisions whereby the number and class of
Exercise Shares available hereunder in the aggregate and the Exercise Price shall be
correspondingly adjusted to give the Holder the total number, class, and kind of shares as
the Holder would have owned hereunder had the Holder exercised its right to acquire Exercise
Shares prior to the event and had the Holder continued to hold such Exercise Shares until
after the event requiring adjustment. For
greater certainty, in the event that the Company adopts or approves a shareholder rights
plan or similar plan, no adjustment will be made to the rights of the Holder hereunder

Execution Version

A-4

 

until such time as the rights issued pursuant to such shareholder rights plan or similar plan
becomes exercisable. The Company shall not effect any such consolidation, merger or sale
unless, prior to the consummation thereof, the successor corporation (if other than the
Company) resulting from such consolidation or the corporation purchasing such assets shall
assume, by written instrument executed and mailed or delivered to the Holder the obligation
to deliver to the Holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, the Holder may be entitled to acquire.

     (c) Certain Events. If any other event occurs as to which the other provisions of Section 4
and this Section 5 are not strictly applicable or if strictly applicable would not fairly
protect the purchase rights of the Holder in accordance with such provisions, then the Board
of Directors of the Company shall make an adjustment in the number and class of shares
available under the Warrant, the Exercise Price or the application of such provisions, so as
to protect such purchase rights as aforesaid. The adjustment shall be such as to give the
Holder upon exercise for the same aggregate Exercise Price the total number, class and kind
of shares as it would have owned had the Warrant been exercised prior to the event and had
it continued to hold such shares until after the event requiring adjustment.

6. Fractional Shares.

     No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any
adjustment pursuant hereto. All Exercise Shares (including fractions) issuable upon exercise of
this Warrant may be aggregated for purposes of determining whether the exercise would result in the
issuance of any fractional share. If, after aggregation, the exercise would result in the issuance
of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the
Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from
multiplying the then current fair market value of an Exercise Share by such fraction.

7. No Shareholder Rights.

     This Warrant in and of itself shall not entitle the Holder to any voting rights or other
rights as a shareholder of the Company.

8. Transfer of Warrant.

     Subject to applicable laws and any restrictions on transfer set forth in this Warrant, this
Warrant and all rights hereunder are transferable, in whole but not in part, by the Holder in
person or by duly authorized attorney, upon delivery of this Warrant and the form of assignment
attached hereto to any transferee designated by Holder.

9. Lost, Stolen, Mutilated or Destroyed Warrant.

     The Company covenants to the holder hereof that, upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant or any
stock certificate and, in the case of any such loss, theft or destruction, upon receipt of an
indemnity reasonably satisfactory to the Company, or in the case of any such mutilation, upon
surrender and cancellation of such Warrant or stock certificate, the Company will make and

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A-5

 

deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Warrant or stock certificate.

10. Notices, etc.

     Any notice required or permitted under this Warrant shall be given in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by
confirmed facsimile if sent during normal business hours of the recipient; if not, then on the next
business day, (c) five business days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (d) one business day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written verification of receipt.
All communications shall be sent to the Company at High River Gold Mines Ltd., 155 University
Avenue, Suite 1700, Toronto, Ontario M5H 3B7 CANADA, Attention: [Mr. Daniel Vanin]; or to the
Holder at the address set forth above, or at such other address as any such party may designate by
10 days advance written notice to the other parties hereto.

11. Acceptance.

     Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of
the terms and conditions contained herein.

12. Amendment and Waiver.

     This Warrant, together with all the Warrants, may only be amended and any term hereof may only
be waived in a writing signed by the Company and Holder.

13. Governing Law.

     This Warrant and all rights, obligations and liabilities hereunder shall be governed by the
laws of the State of Colorado excluding any conflict of laws principles that would cause the
application of the laws of any other jurisdiction.

[Signature Page Follows]

Execution Version

A-6

 

     In Witness Whereof, the Company has caused this Warrant to be executed by its duly
authorized officer as
of                                                             , 2006.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	HIGH RIVER GOLD MINES LTD., a corporation formed
under the federal laws of Canada	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Execution Version

A-7

 

NOTICE OF EXERCISE

TO : High River Gold Mines Ltd.

o
     The undersigned hereby elects to purchase                      shares of the Common Stock of High River Gold
Mines Ltd. (the “Company”) pursuant to the terms of the attached Warrant, and tenders herewith
payment of the exercise price in full, together with all applicable transfer taxes, if any.

o
     The undersigned hereby elects to
purchase                      shares of the Common Stock of the Company
pursuant to the terms of the net exercise provisions set forth in Section 2.1 of the attached
Warrant, and shall tender payment of all applicable transfer taxes, if any.

Please issue a certificate or certificates representing said shares of Stock in the name of the
undersigned or in such other name as is specified below:

	 	 	 	 	 
	 

	 	 	 	 
	 

(Name)

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

(Address)

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	(Date)

	 	(Signature)	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	(Print Name)	 	 

Execution Version

 

 

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute this form and supply required

information. Do not use this form to purchase shares.)

     For Value Received, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to

Name:    
                                                                                                                                                                                    

(Please Print)

Address:                                                                                                                                                                                    

(Please Print)

Dated:                                        

Signature of Holder’s Authorized Agent:                                                                                                                            

Title of
Authorized
Agent:                                                                    
                                                                                

Holder’s

Address:                                                                                                                                                                                    

NOTE: The signature to this Assignment Form must correspond with the name as
it appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever. Officers of Companies and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to
assign the foregoing Warrant.

Execution Version

 

 

EXHIBIT B

Form of Consideration Agreement

CONSIDERATION AGREEMENT

     This Consideration Agreement (this “Agreement”), dated as of                     , 20            (the
“Effective Date”), is from HIGH RIVER GOLD MINES LTD., a corporation formed under the
federal laws of Canada (“High River”) to ROYAL GOLD, INC., a corporation formed under the
laws of Delaware, USA. (“Royal Gold”).

Recitals

     A. High River is the indirect owner of 90% of the issued and outstanding shares of Société des
Mines de Taparko, also known as SOMITA, SA, a société anonyme formed under the laws of the Republic
of Burkina Faso (“Somita”), through its subsidiary High River Gold Mines (West Africa)
Ltd., a corporation formed under the laws of the Cayman Islands. The Government of the Republic of
Burkina Faso is the owner of the remaining 10% of the issued and outstanding shares of Somita.

     B. Somita is developing the Taparko/Bouroum gold mine project in the Republic of Burkina Faso,
which will include construction of a mine, support facilities and CIL plant capable of milling and
processing one million (1,000,000) tonnes of ore per year (the “Project”).

     C. Somita and Royal Gold entered into an Amended and Restated Funding Agreement dated as of
February 22, 2006 (the “Funding Agreement”), pursuant to which Royal Gold agreed to provide
High River funding in the amount of U.S. $35,000,000 to be used in the development of the Project.

     D. High River has executed and delivered to Royal Gold a Contribution Agreement in Support of
Funding Agreement dated as of February 22, 2006 (the “Contribution Agreement”) pursuant to
which High River has committed, among other things, to provide additional funding to Somita for the
Project. Royal Gold has elected, pursuant to the Contribution Agreement, to fund certain amounts
not funded by High River pursuant thereto in return for Additional RGI Interests (as defined in the
Contribution Agreement).

     E. Somita has heretofore executed and delivered to Royal Gold a Conveyance of Production
Payments dated as of February 22, 2006, (the “Production Payment Conveyance”) and a
Conveyance of Tail Royalty and Grant of Milling Fee dated as of February 22, 2006, (the “Tail
Royalty Conveyance”) both in connection with the Funding Agreement

     F. In consideration of Royal Gold’s agreement to make the additional funding described in
Recital D, pursuant to paragraph 6 of the Contribution Agreement, High River is obligated to cause
Somita to deliver to Royal Gold an additional Agreement of production payments (the “Additional
Production Payment Conveyance”).

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B-1

 

     G. In further consideration of Royal Gold’s agreement to make such additional funding, High
River is to deliver this Agreement to Royal Gold pursuant to paragraph 6 of the Contribution
Agreement.

Agreement

     Therefore, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, High River and Royal Gold agree as follows:

ARTICLE I

Definitions and References

     1.1 General Definitions. As used herein, the terms defined above shall have the
meanings set forth above, and the following terms shall have the following meanings:

     “Average Gold Price” means, for any calendar month, the average daily P.M. price
fixing for gold by the London Bullion Association as reported in The Wall Street Journal or
any other agreed upon successor publication for the applicable calendar month.

     “Bouroum Lands” means all of the land included in the Bouroum Permit, being
approximately 11.7 square kilometers, which land is more particularly described in Schedule A
attached hereto.

     “Bouroum Permit” means Decree No. 2005-342/PRES/PM/MCE/MFB issued by the Government of
the Republic of Burkina Faso on June 21, 2005, a copy of which is attached hereto as Schedule A.

     “Government” means the Government of the Republic of Burkina Faso, including, without
limitation, the executive, legislative and judicial branches thereof, including, without
limitation, the Ministry for Energy and Mines.

     “Somita’s Account” means Somita’s metals account at Citibank NA in London, England, or
such other metals account as Somita may hereafter establish.

     “Interests” means the Tail Royalty Equivalent and the Milling Fee Equivalent,
collectively.

     “Lands” means the Bouroum Lands and the Taparko Lands.

     “Milling Fee Equivalent” has the meaning set forth in Section 2.2.

     “Month” means a calendar month.

     “Tail Royalty Equivalent” has the meaning set forth in Section 2.1.

     “Taparko – Bouroum Project” means development and exploitation of the Taparko Lands
and the Bouroum Lands for production of gold and associated precious metals, including construction
of a mine, support facilities and the Taparko Processing Facility.

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B-2

 

     “Taparko Lands” means that portion of the land included in the Taparko Permit that is
more particularly described in Schedule B hereto, being approximately 34.7 square kilometers out of
the total 666.5 square kilometers included in such permit.

     “Taparko Permit” means Decree No. 2004-329/PRES/PM/MCE/MFB/MEDE/MECV issued by the
Government of the Republic of Burkina Faso on August 6, 2004, a copy of which is attached hereto as
Schedule B.

     “Taparko Processing Facility” means the CIL processing facility to be constructed by
Somita on or adjacent to the Taparko Lands, capable of milling and processing at least 1,000,000
tonnes of ore per year.

     “Through-Put Production” means all production processed through the Taparko Processing
Facility, whether or not the same was mined from the Taparko Lands or the Bouroum Lands.

     “Year” means a calendar year.

     1.2 Exhibits. All Exhibits attached to this Agreement are part hereof for all
purposes.

     1.3 References and Titles. All references in this Agreement to Exhibits, Articles,
Sections, Subsections, and other subdivisions refer to the Exhibits, Articles, Sections,
Subsections and other subdivisions of this Agreement unless expressly provided otherwise. Titles
and headings appearing at the beginning of any subdivision are for convenience only and do not
constitute any part of any such subdivision and shall be disregarded in construing the language
contained in this Agreement. The words “this Agreement,” “herein,” “hereby,” “hereunder” and words
of similar import refer to this Agreement as a whole and not to any particular subdivision unless
expressly so limited. The phrases “this Section” and “this Subsection” and similar phrases refer
only to the Sections or Subsections hereof in which the phrase occurs. The word “or” is not
exclusive. Pronouns in masculine, feminine and neuter gender shall be construed to include any
other gender. Words in the singular form shall be construed to include the plural and words in the
plural form shall be construed to include the singular, unless the context otherwise requires.

ARTICLE II

Agreement 

     2.1 Agreement to Pay Amounts in Lieu of Tail Royalty. Subject to the limitations set
forth in this Article II, High River agrees to pay to Royal Gold an amount equal to                      percent
(                    %) of the value of all gold contained in, on and under and produced from the Lands, such royalty
to be calculated as follows: (i) the total troy ounces of gold produced from the Lands and
contained in Through-Put Production that are outturned to Somita’s Account during a given Month as
reported by the applicable metal refinery, times (ii) the Average Gold Price for such Month, times
(iii)                     percent (                    %) (the “Tail Royalty Equivalent”).

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     2.2 Agreement to Pay Amounts in Lieu of Milling Fee. Subject to the limitations set
forth in this Article II, High River agrees to pay Royal Gold an amount equal to                     % of the total
amount of gold passed through the Taparko Processing Facility that is produced from lands other
than the Lands, calculated as follows: (i) the total troy ounces of gold produced from lands other
than the Lands and contained in Through-Put Production that are outturned to Somita’s Account
during a given Month as reported by the applicable metal refinery, times (ii) the Average Gold
Price for such Month, times (iii)                     % (the “Milling Fee Equivalent”); provided, however,
that the Milling Fee Equivalent shall only apply to the milling and processing of the first one
million (1,000,000) tonnes of ore per Year from lands other than the Lands; provided further that
such amount shall be reduced by the number of tonnes of ore per Year from the Lands (e.g., if in a
given Year, the Taparko Processing Facility processes 800,000 tonnes of ore from the Lands and
500,000 tonnes of ore from Lands other than the Lands, then the Milling Fee would only apply to
200,000 tonnes of ore); provided further that for the Year in which the first payment of the
Milling Fee is made (which is likely to be less than a full calendar year), the 1,000,000 limit
shall be proportionately reduced to the number of days remaining in such year after commencement of
payment of the Milling Fee (e.g., if the payment of the Milling Fee commences on September 14, the
limit of the payment on the Milling Fee would be 108/ 365 of 1,000,000 – i.e., 295,890 – tonnes of
ore during such year).

     2.3 Calculation and Commencement of Payments. The calculation and payment of amounts
owing for the Tail Royalty Equivalent and the Milling Fee Equivalent shall not commence until
satisfaction of all obligations of Somita under the Production Payment Conveyance and the
Additional Production Payment Conveyance.

     2.4 [Intentionally omitted.]

     2.5 Non-Operating, Non-Expense-Bearing Interests. The Tail Royalty Equivalent shall
be calculated in the same manner as a non-operating, non-expense-bearing interest in and to
production from the Lands. The Milling Fee Equivalent shall be calculated in the same manner as a
non-operating, non-expense bearing limited royalty interest in and to the Through-Put Production
from lands other than the Lands. Each of the Interests is limited as set forth above, free of all
cost and expense of production, operations, milling, smelting, refining and delivery prior to being
outturned at High River’s Account. In no event shall Royal Gold ever be liable or responsible in
any way for payment of any costs, expenses or liabilities attributable to the Taparko – Bouroum
Project (or any part thereof) or incurred in connection with the production, operations, milling,
smelting, refining and delivery of Through-Put Production prior to being outturned at Somita’s
Account.

     2.6 Free of Royalties and Other Burdens. The Interests shall be free of (and without
education therefrom of) any and all royalties and other burdens on production and shall bear no
part of same; and High River shall defend, indemnify and hold Royal Gold harmless from and against
any loss or claim with respect to any such royalties and other burdens on production or any claim
by the owners or holders of such royalties and other burdens on production. For greater certainty,
all payments made hereunder shall be net of any withholdings or other amounts, if and to the extent
required by applicable law, in respect of applicable taxes thereon.

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ARTICLE III

Payment Procedures; Reports

     3.1 Payments of Tail Royalty Equivalent and Milling Fee Equivalent. Payments of the
Interests shall be made on a calendar quarter basis, within ten (10) business days after the end of
each calendar quarter, by check or wire transfer, at the election of Royal Gold, to the address set
forth in Section 5.2. The amount of each payment shall be equal to the sum of the monthly amounts
due for each Month during such calendar quarter. All payments shall be accompanied by statements
that describe in reasonable detail the basis of calculation of the amounts paid under the
Interests.

     3.2 Financial Reports. Subject to the confidentiality requirements of Section 4.4,
Royal Gold shall have the right to be supplied monthly with duplicate settlement sheets from any
refinery, mill, smelter or other purchaser of Through-Put Production, whether or not Through-Put
Production has been sold, and shall contain sufficient information as to the value, pricing and
amounts of intermediate product and final product sold for Somita’s account so that Royal Gold will
have access to all information and data that are reasonably necessary and appropriate for it to
determine the amount of the Interests due it under this Agreement.

     3.3 Objection, Finality of Payments: Royal Gold, at its sole election and expense,
shall have the right to perform, not more frequently than once annually following the close of each
calendar year, an audit by any authorized representative of Royal Gold of Somita’s accounts
relating to the Interests. Any such inspection shall be for a reasonable length of time during
regular business hours, at a mutually convenient time, upon at least ten (10) business days’ prior
written notice by Royal Gold. All payments under the Interests made in any Year shall be
considered final and in full accord and satisfaction of all obligations of High River, unless Royal
Gold gives written notice describing and setting forth a specific objection to the calculation
thereof within one (1) year following the end of that Year. High River shall account for any agreed
upon deficit or excess in payments of the Interests made to Royal Gold by adjusting the next
monthly statement and payment following completion of such audit to account for such deficit or
excess. High River shall cause Somita to comply with its obligations set forth herein.

     3.4 Copies of Reports to Government. High River shall provide Royal Gold with copies
of any reports that Somita is required to make to the Government within thirty (30) days after
submitting same to the Government.

     3.5 Annual Environmental Compliance Report. Within ninety (90) days after the end of
each Year, High River shall provide to Royal Gold an environmental compliance report summarizing
the environmental performance of operations at the Taparko-Bouroum Project during that Year and
provide sufficient information for Royal Gold to monitor the performance of such operations with
respect to environmental protection, including, at a minimum, narrative summaries of (i) the
results of any environmental monitoring or sampling activity, (ii) accidents that impact the
environment or result in the loss of life, and (iii) environmental deficiencies that are identified
by environmental regulatory authorities of the Government and any remedial actions taken or
proposed to be taken with respect thereto.

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ARTICLE IV

Additional Rights, Obligations and Covenants of the Parties

     4.1 Commingling of Production.

          (a) Subject to the limitations, conditions and requirements of this Section 4.1, Somita shall
have the right to mix or commingle, either underground, at the surface, or at a processing plant or
any other treatment facilities, any production from the Lands with ores or material derived from
other lands or properties whether or not owned, leased or controlled by Somita.

          (b) Before commingling, High River shall cause Somita to weigh, measure, sample and analyze
the respective ores and materials in accordance with sound mining and metallurgical practices such
that the amount of gold recovered from the Lands can be reasonably and accurately determined. As
products are produced from the commingled ores, High River shall cause Somita to calculate from
representative samples the average percentage recovery of products produced from the commingled
ores during each month. In obtaining representative samples and calculating the average grade of
commingled ores and average percentage of recovery, Somita may use procedures that are in
accordance with best practices in the mining and metallurgical industry. High River shall cause
Somita to retain the records relating to commingled ores and make them available for inspection by
Royal Gold, at Royal Gold’s sole expense, at all reasonable times for a period of one (1) year
after the calendar year in which the commingling occurred.

          (c) Notwithstanding the foregoing provisions of this Section 4.1, High River shall cause
Somita not to commingle production from the Lands with ores or minerals derived from other lands or
properties if such commingling has a reasonable likelihood of reducing the recovery rate of metals
from the Lands below what the recovery rate would have been without commingling. Any disputes
concerning commingling procedures or results or the applicability of the prohibition in the
preceding sentence shall be resolved pursuant to the procedure set forth in Section 5.9.

     4.2 Geological and Other Data and Reports. From and after the date of execution of
this Agreement, High River shall deliver to Royal Gold not less frequently that quarterly, or
otherwise shall make available, the following data and information relating to operations conducted
on or for the benefit of the Lands and with respect to the Taparko Processing Facility:

     (a) The monthly operations and exploration report prepared by Somita for operations on the
Lands and with respect the Taparko Processing Facility;

     (b) The annual reserve report for the Lands prepared by Somita, along with any updates, as and
when any of the same have been finalized and approved by Somita;

     (c) Somita’s life of mine plan relating to the Taparko – Bouroum Project;

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     (d) The annual plan and budget prepared by Somita relating to the Taparko – Bouroum Project
and any amendments thereto, as and when any of the same have been finalized and approved by Somita;
and

     (e) Any additional material engineering or economic studies or analyses prepared by Somita and
relating to the Lands and the Taparko – Bouroum Project as and when any of the same have been
finalized and approved by Somita.

     4.3 Inspection. Royal Gold and its authorized agents who are experienced in mining
operations, at Royal Gold’s sole risk and expense, shall have the right, exercisable at reasonable
intervals and during regular business hours, at a mutually convenient time, and in a reasonable
manner conforming to Somita’s safety rules and regulations and so as not to interfere with Somita’s
operations, to go upon the Lands and the premises of the Taparko Processing Facility for the
purposes of inspecting same. Royal Gold shall furnish Somita with prior written notice of the time
and place of any inspection by Royal Gold pursuant to this Section 4.3. Royal Gold shall defend,
indemnify and hold Somita harmless from and against all costs incurred (including reasonable
attorneys’ fees and the costs of defending any such claims) based on claims for damages, including
injury or damage to other persons or property, arising out of any death, personal injury or
property damage sustained by Royal Gold, its agents or employees, while in or upon the Properties,
unless such death, injury or damage results from Somita’s gross negligence or willful misconduct.

     4.4 Confidentiality. Royal Gold shall not, without the prior written consent of
Somita disclose to any third party (excluding, however, any representative, affiliate, agent,
consultant or contractor of Royal Gold who has a bona fide need to be informed) any information
concerning operations, including exploration, on the Properties which is not generally available to
the public; provided, however, that upon not less than five (5) days’ prior written notice to
Somita setting forth the nature and content of the proposed disclosure, Royal Gold may disclose
information or data pertaining to the Lands, the Taparko – Bouroum Project and the Taparko
Processing Facility to: (a) any third party to whom Royal Gold in good faith anticipates selling or
assigning all or a part of its interest hereunder, or (b) any lender or underwriter from whom Royal
Gold is seeking to obtain funds. Royal Gold shall require those parties to keep the information so
provided confidential. If either Somita or Royal Gold determines in good faith that a disclosure
is required for compliance with applicable laws, rules, regulations or orders of any government
agency or stock exchange having jurisdiction, that party shall provide (and if such party is
Somita, High River shall cause Somita to provide) as much prior notice to the other party of the
nature and contents of the proposed disclosure, for the review and comment of the other party, as
is reasonably possible under the circumstances.

     4.5 Abandonment of Properties. High River shall cause Somita to keep in force and
effect its interests in the Lands and the Taparko Processing Facility until payment in full of both
the Production Payment Conveyance and the Additional Production Payment Conveyance. From and after
satisfaction of the obligations under such documents, Somita may elect at any time to terminate or
abandon its interests in the Lands and the Taparko Processing Facility at any time as it may in its
sole discretion deem appropriate, subject only to the provisions of this Section 4.5. In the event
that Somita wishes to abandon any or all of it interest in the Lands or the Taparko

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Processing Facility, except for cessation of operations under care and maintenance, High River
shall cause Somita to provide Royal Gold with not less than forty-five (45) days prior notice of
its intention to do so and offer to transfer such interests to Royal Gold. At any time during the
forty-five (45) day period, Royal Gold may notify Somita that it elects to accept transfer of such
interests. In that event, High River shall cause Somita to transfer those interests to Royal Gold
by quitclaim deed.

     4.6 Processing of Ore from the Lands. High River hereby covenants and agrees with
Royal Gold that it shall cause Somita to process all ore produced from the Lands in the Taparko
Processing Facility.

     4.7 Refining Contracts. High River hereby covenants and agrees with Royal Gold that
during the entire term of this Agreement, High River shall cause Somita to maintain in full force
and effect refining contracts with smelter and/or refiners reasonably acceptable to Royal Gold.

     4.8 High River Operations and Maintenance of the Taparko-Bouroum Project. High River
shall cause Somita to conduct its operations on the basis of customary commercial practice and
arm’s-length arrangements, with due diligence and efficiency and under the supervision of qualified
and experienced management. High River shall cause Somita to maintain, preserve, protect and keep
the Taparko-Bouroum Project, and all of Somita’s property used or useful in connection therewith,
in good condition (ordinary wear and tear and obsolescence excepted) in accordance with prudent
industry standards, and in compliance with all applicable laws, in conformity with all applicable
contracts, servitudes, leases, permits and agreements, and shall from time to time make all repairs
renewals and replacements needed to enable the business and operations carried on in connection
therewith to be promptly and advantageously conducted at all times, except where failure to do so
could not nave a material adverse effect upon the Taparko-Bouroum Project.

     4.9 Compliance with Agreements and Law. High River shall cause Somita to perform all
obligations it is required to perform under each lease, permit, agreement, contract or other
instrument or obligation to which it is a party with respect to the Taparko-Bouroum Project, except
where the failure to do so could not have a material adverse effect upon its ownership or operation
of same. High River shall cause Somita to conduct its business and affairs with respect to the
Taparko-Bouroum Project, (i) in material compliance with all laws applicable thereto, (ii) in all
material respects in accordance with the Development Plan, as defined in the Funding Agreement,
(iii) in accordance with acceptable industry practice including maintaining a minimum of local
standards and World Bank environmental guidelines (applicable under, World Bank and IFC Pollution,
Prevention and Abatement Guidelines and the applicable IFC Safeguard Policies), and, where
practicable, the International Cyanide Code and the Equator Principles; and (iv) in compliance, and
causing its affiliates, subsidiaries, agents, employees, subcontractors, directors and officers to
be in compliance, with the Foreign Corrupt Practices Act of 1977 (Pub.L. No. 95-213, Sections
101-104), as amended, and any other law, regulation, order, decree or directive having the force of
law and relating to bribery, kick-backs, or similar business practices. High River shall obtain
and cause all licenses and permits necessary or appropriate for the conduct of its business and the
ownership and operation of its property used and useful in the conduct of its business to be at all
times maintained in good

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standing and in full force and effect, except where failure to comply could not have a
material adverse effect upon the Taparko-Bouroum Project.

     4.10 Government Approvals and Notices. High River shall cause Somita to (i) obtain,
and at all times maintain in full force and effect, all material registrations, declarations,
filings, governmental consents, licenses, approvals, authorizations, and permits necessary for
Somita’s operation of the Taparko-Bouroum Project, and (ii) undertake reasonable efforts to arrange
for Royal Gold to receive from the Government copies of all correspondence, notices, decrees,
orders and other writings issued by the Government to Somita regarding the Taparko-Bouroum Project,
but in any event, High River shall send Royal Gold copies of such materials promptly after receipt
thereof.

ARTICLE V

General Provisions

     5.1 Assignment. After Completion (as defined in the Funding Agreement) of the Taparko
– Bouroum Project, Royal Gold may assign its interests under this Agreement freely, in whole or in
part. High River shall not assign this Agreement without the prior written consent of Royal Gold
which may be withheld in Royal Gold’s sole discretion.

     5.2 Notices. Any notice, election, report or other correspondence required or
permitted hereunder shall be in writing and shall be deemed sufficiently given or furnished if
delivered by personal delivery, by facsimile or other electronic transmission, or by delivery
service with proof of delivery, to each of the parties at its address below (unless changed by
similar notice in writing given by the party whose address is to be changed):

If to High River:

High River Gold Mines Ltd.

155 University Avenue

Suite 1700

Toronto, Ontario M5H 3B7

Attention: President

Facsimile: (416) 360-0010

and

Cassels Brock & Blackwell LLP

2100 Scotia Plaza, 40 King Street W.

Toronto, Ontario M5H 3C2

Attention: David Poynton

Facsimile: (416) 644-9348

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If to Royal Gold:

Royal Gold, Inc.

1660 Wynkoop St.

Suite 1000

Denver, Colorado 80202-1132

Attention: President

Facsimile Number: 303-595-9385

     Any such notice or communication shall be deemed to have been given (a) in the case of
personal delivery or delivery service, as of the date of first attempted delivery during normal
business hours at the address provided herein, (b) in the case of facsimile, upon receipt, or (c)
in the case of other electronic transmission, upon acknowledgment of receipt by the recipient
within twenty-four (24) hours of first attempted delivery.

     5.3 Amendments and Waiver. No modifications or waivers of the terms and conditions of
this Agreement shall be binding upon either party unless in writing, dated subsequent to the date
of this Agreement, and executed by an authorized representative of each party. No waiver by either
party of a breach of any of the provisions of this Agreement shall be construed as a waiver of any
subsequent breach, whether of the same or of a different character.

     5.4 Relationship of the Parties. The relationship of the parties hereto is
contractual only. The Interests shall not grant to Royal Gold any rights to participate or
influence management or decision-making regarding operations on the Lands, Taparko – Bouroum
Project or the Taparko Processing Facility, nor shall it obligate the Royal Gold to assume any
responsibilities for costs of Somita’s operations on the Lands, Taparko – Bouroum Project or the
Taparko Processing Facility or any liabilities resulting therefrom.

     5.5 Further Instruments. The parties hereto agree that they will execute any and all
instruments as may be necessary or required to carry out and effectuate any and all of the
provisions of this Agreement.

     5.6 Binding Effect. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns.

     5.7 Continuation. The obligations of High River to Royal Gold under this Agreement
shall continue for so long as Somita, its successors and assigns retain any interest in the Lands,
Taparko – Bouroum Project or the Taparko Processing Facility. Royal Gold’s rights to payments
under the Interests shall not be subordinated to any other person or source by High River or any
related party.

     5.8 Governing Law. Without regard to principles of conflicts of law, this Agreement
is made under and shall be interpreted and enforced in accordance with the laws of the State of
Colorado applicable to contracts made and to be performed entirely within such state and the laws
of the United States of America, except that, to the extent that the law of the jurisdiction in
which the real property is located (or which is otherwise applicable to the real property)

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necessarily governs with respect to procedural and substantive matters relating to the creation and
enforcement of the interests created herein, the law of such other jurisdiction shall apply.

     5.9 Arbitration Conducted by International Chamber of Commerce. All disputes between
the parties hereto (which for purposes of this Section 5.9 includes High River and Royal Gold and
their respective parents, affiliates and subsidiaries) that arise out of, relate to or are in
connection with this Agreement or any related agreement, will be exclusively, finally and
conclusively settled by binding international arbitration under the Rules of Arbitration of the
International Chamber of Commerce (the “ICC”) then in effect (the “Rules”), except
as specifically modified by this Agreement. The Parties shall continue to perform their respective
obligations under this Agreement pending conclusion of any such arbitration.

(a) Initiation of Arbitration.

          (i) Prior to initiating an arbitration proceeding with the ICC, the parties shall negotiate in
good faith to resolve the dispute. To that end, the party wishing to initiate negotiations shall
notify the other party in writing about its intention to do so, including a brief summary of the
disputed issue, its estimate of the amount in controversy, and suggesting a date and venue for a
first meeting, at which the parties shall be represented by officers duly empowered to resolve the
dispute. In the event that the parties are unable to resolve the dispute within a period of 15
days after commencement of such good faith negotiations, or upon agreement by the parties to submit
the dispute to arbitration, either party may commence an arbitration proceeding by delivering a
Request for Arbitration (the “Request for Arbitration”) to the Secretariat of the ICC (the
“Secretariat”) in accordance with the terms of this Section 5.9 and the Rules.

          (ii) For all disputes, the arbitration hereunder shall be by three independent and impartial
arbitrators. High River and Royal Gold shall each appoint one arbitrator within 30 days after the
Request for Arbitration has been delivered to the Secretariat and the two arbitrators so appointed
shall select a third arbitrator within 60 days after the Request for Arbitration has been delivered
to the Secretariat. In the event that the parties or the arbitrators fail to select arbitrators as
required above, the ICC shall select such arbitrators in accordance with the terms of this Section
5.9.

          (iii) Each of the parties acknowledges and agrees that the other party would be damaged
irreparably in the event any of the provisions of this Agreement are not performed in accordance
with their specific terms. Accordingly, notwithstanding the provisions of Section 5.9(a)(i),
pending completion of arbitration pursuant to this Section 5.9, either High River or Royal Gold
shall have the right to seek a temporary restraining order, injunctive relief or other interim or
provisional relief on the ground that such relief would otherwise be available at law or in equity.
If any such relief is obtained, the arbitration panel will address the continuance, modification
or termination of such relief and their order and any such decision regarding relief shall be
binding on the parties.

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     (b) Arbitration Procedures.

          (i) The arbitration shall be conducted in the English language in London, England or at such
other location as the parties may agree.

          (ii) All disputes arising out of or in connection with this Agreement and relating to the
Parties’ rights and obligations in connection with this Agreement (including without limitation the
validity of the agreement of the parties to arbitrate, the arbitrability of the issues submitted to
arbitration hereunder, the existence and validity of the Agreement, and any conflict of laws issues
arising in connection with the Agreement or this agreement to arbitrate) shall be finally settled
in accordance with the Rules. In addition, where the Rules are silent, the proceedings before the
“Arbitral Tribunal” (as defined in the Rules) shall be governed by the procedural rules established
by the Arbitral Tribunal.

          (iii) The arbitration panel shall conduct a hearing no later than 90 days after delivery of
the Request for Arbitration, and a decision shall be rendered by the arbitration panel within 30
days after the final hearing.

          (iv) At the hearing, the parties shall present such evidence and witnesses as they may choose,
with or without counsel. Adherence to formal rules of evidence shall not be required but the
Arbitral Tribunal shall consider any evidence and testimony that it determines to be relevant, in
accordance with procedures that it determines to be appropriate.

     (c) Arbitral Awards.

          (i) The arbitration award shall be in writing and shall specify the factual and legal bases
for the award.

          (ii) Neither High River nor Royal Gold shall be entitled to, and no award shall include any
amount for, lost profits or revenues, lost business opportunities, business interruption, or
punitive or exemplary damages for any claim arbitrated pursuant to this Section 5.9.

          (iii) The arbitrators shall be entitled to a fee commensurate with their fees for professional
services requiring similar time and effort. The fees of the arbitrators and other costs of the
arbitration shall be borne equally by the parties, except when the arbitrators decide to impose the
total cost on the defeated party.

     (c) Enforcement. All decisions of the Arbitral Tribunal shall be final and binding on the
parties and may be entered against them in any court of competent jurisdiction. Any judgment
rendered by the Arbitral Tribunal against a party may be executed against such party’s assets in
any jurisdiction where the party has assets. Each of the parties irrevocably submits to the
non-exclusive jurisdiction of the appropriate courts in the State of Colorado in any legal action
or proceeding relating to such execution of judgment.

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     (d) Limitations.

          (i) Any dispute brought pursuant to the terms of this Section 5.9 must be brought within two
years of the date that the party aggrieved by the event or condition, or notice of such event or
condition giving rise to the dispute becomes aware of the same.

          (ii) This agreement to arbitrate shall survive the rescission or termination of this
Agreement.

     5.10 [Intentionally omitted.]

     5.11 Recordation of Agreement. High River and Royal Gold shall file and record
executed counterparts of this Agreement in official records as may be necessary and possible for
the purpose of providing constructive notice to third parties of High River’s and Royal Gold’s
respective rights and obligations hereunder with respect to the matters set forth herein.

     This Agreement has been executed on the dates set forth below, to be effective as of the
Effective Date.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	HIGH RIVER:	 	 
	 
	 	 	 	 	 	 
	 	 	HIGH RIVER GOLD LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	and	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ROYAL GOLD:	 	 
	 
	 	 	 	 	 	 
	 	 	ROYAL GOLD, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 

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ACKNOWLEDGMENT CERTIFICATES

[Forms that conform to Burkina Faso law to be provided by Burkina Faso Counsel prior to execution]

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