Document:

LETTER OF INTENT

	
 

	
 

	
Date:               January 13, 2003

	
 

	
Parties:           Fagen, Inc. of Granite Falls, MN (Fagen) and Golden Grain Energy, LLC of New Hampton, IA (Owner)

	
 

	
 

	
Owner is an Iowa limited liability company organized by farmers and business people to facilitate the development and building of a locally-owned 40 MGY ethanol plant in Iowa (the Facility).

	
 

	
Fagen is an engineering and construction firm capable of providing development assistance, as well as designing and constructing the Facility being considered by Owner.

	
 

	
Owner and Fagen agree to use best efforts in jointly developing this project under the following terms:

	
 

	
 
	
            1.         Owner agrees that Fagen will Design/Build the Facility if determined by Owner to be feasible and if adequate financing is obtained. Should Owner chose to develop or pursue a relationship with a company other than Fagen, Inc. to provide the preliminary engineering or design-build services for the project, then Owner shall reimburse Fagen, Inc. for all expenses Fagen, Inc. has incurred in connection with the Project based upon Fagen, Inc.’s standard rate schedule plus all third party costs incurred from June 21, 2002.  Such expenses include, but are not limited to, labor rates and reimbursable expenses such as legal charges for document review and preparation, travel expenses, reproduction costs, long distance phone cost, and postage.  In the event Fagen, Inc.’s services are terminated by Owner, title to the technical data, which may include preliminary engineering drawings and layouts and proprietary process related information shall remain with Fagen, Inc.; however, Owner shall have the right to use the above described technical data, excluding proprietary process related information, for construction, operation, repair and maintenance of the Project.

	
 

	
 
	
            Should Fagen, Inc. intentionally or negligently fail or refuse to comply with it’s commitments contained in this Letter of Intent, Fagen, Inc. shall absorb all of its own expenses, and Owner shall have the right to terminate the Letter of Intent immediately upon written notice to Fagen, Inc. and Owner shall be released from its obligations to pay or reimburse Fagen, Inc. as described above.

	
 

	
 
	
            2.         Fagen will provide Owner with assistance in evaluating, from both a technical and business perspective:

	
 

	
 
	
 
	
	Owner organizational options;

	
 
	
 
	
	The appropriate location of the proposed Facility; and

	
 
	
 
	
	Business plan development.

	 

	 	 1	 

	 

	

	
 
	
            3.         Fagen agrees to Design/Built the Facility at a capital cost as shown on the attached Exhibit 1.  Exhibit 1 assumes ICM technology is used in the plant process.

	
 

	
 
	
            4.         Fagen shall assist Owner in locating appropriate management for the Facility.

	
 

	
 
	
            5.         Fagen will assist Owner in presenting information to potential investors, potential lenders, and various entities or agencies that may provide project development assistance.

	
 

	
 
	
            6.         During the term of this Letter of Intent the Owner agrees that Fagen will be the exclusive Developer for the Owner in connection with matters covered by this Letter of Intent.  During the term of this Letter of Intent, Fagen agrees that it will not develop or construct another ethanol project or facility within 75 miles of New Hampton, Iowa.

	
 

	
 
	
            7.         This Letter of Intent shall terminate on December 31, 2003 unless the basic size and design of the Facility have been determined and mutually agreed upon, and a specific site or sites have been determined and mutually agreed upon, and at least 10% of the necessary equity has been raised.  Furthermore, this Letter of Intent shall terminate on December 31, 2004 unless financing for the Facility has been secured.  Either of the aforementioned dates may be extended upon mutual agreement of the parties.

	
 

	
 

	
Golden Grain Energy, LLC

	
 

	
By:       /s/ Walter Wendland     

	
 

	
Its:        President

	
 

	
Date:    1-15-2003

	
 

	
 

	
Fagen, Inc.

	
 

	
By:       /s/ O. Wayne Mitchell

	
 

	
Its:        Vice-President

	
 

	
Date:    1/15/03

	
 

	 

	 	2 	 

	 

	

	
Exhibit 1

	
Golden Grain Energy, LLC

	
 

	
40 MGY Dry Grind Ethanol Plant

	
 

	
Fagen, Inc.

	
January 13, 2003

Estimated Sources and Uses of Funds Statement*

	
Sources of Funds
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
Equity
	
 
	
 
	
 
	
 
	
 
	
40
	
%

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
Cash & Equity Equivalents
	
 
	
 
	
 
	
 
	
$
	
22,007,000
	
 

	
 
	
 
	
 
	
Long-Term Debt
	
 
	
 
	
 
	
 
	
 
	
33,006,000
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	

 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Total Sources of Funds
	
 
	
 
	
 
	
 
	
$
	
55,010,000
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Uses of Funds
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Design Construction & Startup
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
Plant Construction (GMP, includes thermal oxidizer**)
	
 
	
 
	
 
	
 
	
$
	
45,300,000
	
 

	
 
	
Land & Site - Developmental Cost (Est.)
	
 
	
 
	
 
	
 
	
 
	
2,000,000
	
 

	
 
	
Administration Building & Furnishing
	
 
	
 
	
 
	
 
	
 
	
200,000
	
 

	
 
	
Rail
	
 
	
 
	
 
	
 
	
 
	
750,000
	
 

	
 
	
Startup Costs:
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
Corn (10 days @ $2.25)
	
 
	
$
	
910,000
	
 
	
 
	
 
	
 

	
 
	
 
	
Enzymes, Chemicals and other
	
 
	
 
	
250,000
	
 
	
 
	
 
	
 

	
 
	
 
	
Spare Parts
	
 
	
 
	
500,000
	
 
	
 
	
 
	
 

	
 
	
 
	
Other Startup Costs
	
 
	
 
	
750,000
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	

 
	
 
	
 
	
 

	
 
	
Subtotal
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
2,410,000
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Organizational & Financing
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
Financing Costs
	
 
	
$
	
2,500,000
	
 
	
 
	
 
	
 

	
 
	
Organizational Costs
	
 
	
 
	
350,000
	
 
	
 
	
 
	
 

	
 
	
Miscellaneous Costs
	
 
	
 
	
500,000
	
 
	
 
	
 
	
 

	
 
	
Owners Contingency
	
 
	
 
	
1,000,000
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	

 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
4,350,000
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	

 
	
 

	
Total Uses of Funds
	
 
	
 
	
 
	
 
	
$
	
55,010,000
	
 

	
 

	* General Assumptions:  Land & site development, startup, and organizational & financing costs are estimated.  Owner provides all plant and access roads, rails systems, substation if required, electrical distribution/transformers, gas line(s), process and fire water supply/pretreatment to & waste water systems (septic) from the designated areas within the plant site.  Assumes non-winter conditions for earthwork, concrete & building erection.  Other conditions may apply in the definitive construction agreement.

	 

	** Thermal Oxidizer will be required to meet PCA emission standards.  The Thermal Oxidizer installation also results in lower plant air emissions, much reduced dryer odor, and allows the plant to expand beyond the 20MGY production rate without triggering the EPA PSD permitting process.

	 

	 	3<PAGE>

                                                                   EXHIBIT 10.1

                              ATLAS MINING COMPANY

                       COMMON STOCK SUBSCRIPTION AGREEMENT

         This Atlas Mining Company Common Stock Subscription Agreement (the
"Agreement") is hereby submitted by ____________________________________________
(the "Purchaser") for acceptance by Atlas Mining Company, an Idaho corporation
(the "Company") as of _________________, 2003.

     1. ISSUANCE AND SALE OF COMMON STOCK. Subject to the terms hereof, at the
closing as provided for hereunder, the Company will issue and sell to the
Purchaser and the Purchaser will buy from the Company the number of shares of
the Company's Common Stock indicated on the signature page below (the "Shares"),
at the purchase price indicated on the signature page below.

     2. CLOSING; DELIVERY.

         2.1 CLOSING. The closing (the "Closing") of the purchase and sale of
the Shares to the Purchaser hereunder shall be held at the offices of the
Company, located at 630 East Mullan Avenue, Osburn, Idaho, 83849, at the time
and date upon which the Company accepts and signs this Agreement. The Company
may issue and sell additional shares of its Common Stock at additional closings
related to the Offering registered on Form SB-2 (SEC File No: 333-100788), up to
the aggregate maximum of 10,000,000 shares. Notwithstanding anything to the
contrary in this Section 2.1, unless otherwise extended by the Company, the
Closing or closings for the sale and issuance by the Company of shares of its
Common Stock shall occur on the one hundred eightieth (180th) day following the
effectiveness of the Company's Registration Statement SB-2.

         2.2 DELIVERY. At the Closing of the sale of the Shares to the
Purchaser, upon confirmation of prior receipt of the Purchaser's payment and the
acceptance by the Company of this Agreement from the Purchaser, the Company will
prepare a stock certificate representing the Shares purchased by the Purchaser
and promptly transmit such stock certificate to the Purchaser at the address
specified below.

     3. THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to the Purchaser as follows:

<PAGE>

         3.1 ORGANIZATION AND STANDING. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Idaho and has all requisite corporate power and authority to carry on its
businesses as now conducted and as proposed to be conducted. The Company is
qualified or licensed to do business as a foreign corporation in all
jurisdictions where such qualification or licensing is required, except where
the failure to so qualify would not have a material adverse effect upon the
Company.

         3.2 CORPORATE POWER. The Company has now, or will have at the date of
each of the respective Closings, all requisite corporate power necessary for the
authorization, execution and delivery of this Agreement and to sell and issue
the Shares, and to carry out and perform all of its obligations hereunder.

         3.3 AUTHORIZATION. This Agreement, including the obligation to issue
the Shares to be issued hereunder, when executed and delivered by the Company,
will constitute a valid and legally binding obligation of the Company,
enforceable in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable remedies.
The Company has duly authorized the execution, delivery and performance of this
Agreement, including the issuance of the Shares by the Company.

         3.4 FREELY TRADABLE. All shares issued pursuant to this Subscription
Agreement have been registered pursuant to the Securities Act of 1933, as
amended, on Form SB-2 (SEC File No: 333-100788) (the "Registration Statement").
This Registration Statement will be or has become effective as of the date of
the execution of this Agreement and no stop order shall have been issued
regarding the shares issued. Accordingly, the shares subscribed to and issued
pursuant to this Agreement are freely tradable and unrestricted.

     4. REPRESENTATIONS, WARRANTIES OF THE PURCHASER. The Purchaser represents
and warrants to the Company with respect to this purchase as follows:

         4.1 PROSPECTUS. The Purchaser has received a copy of this Prospectus
registered on Form SB-2 (SEC File No: 333-100788).

         4.2 EFFECTIVENESS. The Purchaser has not received any soliciting
materials regarding the shares subscribed to herein aside from the Prospectus
discussed in Section 4.1 of this Agreement. The Purchaser has not tendered this
Agreement prior to effectiveness of the Registration Statement and understands
that no shares will be issued prior to the date of effectiveness.

     5. MISCELLANEOUS.

         5.1 GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of California without regard to the conflict of laws
provisions. The parties hereto agree to submit to the exclusive jurisdiction of
the federal and state courts of the State of California with respect to the
interpretation of this Agreement or for the purposes of any action arising out
of or relating to this Agreement.

         5.2 SURVIVAL. The representations, warranties, covenants and agreements
made herein shall survive the Closing of the transactions contemplated hereby.
All statements as to factual matters contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant hereto or in
connection with any of the transactions contemplated hereby shall be deemed to
be representations and warranties of the Company hereunder solely as of the date
of such certificate or instrument.

<PAGE>

         5.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement, including any
agreements contemplated hereunder, constitutes the full and entire understanding
and agreement between the parties with regard to the subject matter hereof, and
no party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth herein
or therein. Except as expressly provided herein, neither this Agreement nor any
term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.

         5.4 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger,
addressed (a) if to a Purchaser, at such respective address as set forth in the
Schedule of Purchasers attached hereto as Attachment A or at other such address
as Purchaser shall have properly furnished in writing to the Company attention
of the President or (b) if to the Company, at Atlas Mining Company, Inc., 630
East Mullan Avenue, Osburn, Idaho, 83849, Attn: Mr. Bill Jacobson or at other
such address as the Company shall have properly furnished to the Purchasers in
writing. Such notices shall be deemed effective upon (i) personal delivery to
the party to be notified; (ii) upon the next business day if sent by confirmed
telex or facsimile; (iii) one business day after deposit with a nationally
recognized overnight carrier, specifying next day delivery; or (iv) five
business days after having been sent by registered or certified mail, return
receipt requested, postage prepaid.

         5.5 EXPENSES. The Company and each Purchaser shall bear its own
expenses incurred on its behalf with respect to this Agreement and the
transactions contemplated hereby.

         5.6 RULES OF CONSTRUCTION. The parties hereto agree that they have been
adequately represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.

         5.7 SEVERABILITY. In the event that any provision of this Agreement or
the application thereof becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as to
reasonably affect the intent of the parties hereto. To the extent possible, the
parties further agree to replace such void or unenforceable provision of this
Agreement with a valid and enforceable provision that will achieve the economic,
business and other purposes of such void or unenforceable provision as closely
as possible.

         5.8 BROKER'S FEES. Each party hereto represents and warrants that no
agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such
other party as a result of the representation of this section being untrue.

         5.9 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.

<PAGE>

                              ATLAS MINING COMPANY
                       COMMON STOCK SUBSCRIPTION AGREEMENT
                                 SIGNATURE PAGE

The undersigned hereby subscribes for the following number of Shares of the
Company's Common Stock pursuant to the terms and conditions contained in this
Stock Subscription Agreement at the purchase price per share indicated below:

PURCHASER:

Number of Shares of
Common Stock:    ______________________

Purchase Price per Share:  $___________

Total Purchase Price:      $______________________

<TABLE>
<CAPTION>
<S>                                                           <C>
IF FOR AN INDIVIDUAL:                                         IF FOR AN ENTITY:

                                                              Entity Name:_________________________________________

By:_________________________________________                  By:__________________________________________________

Print Name:_________________________________                  Print Name:__________________________________________

                                                              Title:_______________________________________________
</TABLE>

===========

COMPANY:

AGREED AND ACCEPTED AS TO ________________________ SHARES EFFECTIVE AS OF
_____________________________________.

Atlas Mining Company
an Idaho Corporation

By:___________________________________
     William T. Jacobson, President

<PAGE>

                                  ATTACHMENT A
                                  ------------
                        Names and Addresses of Purchasers

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