EXPLORATION AND DEVELOPMENT OPTION AGREEMENT
THIS EXPLORATION AND DEVELOPMENT OPTION
AGREEMENT is made and entered into effective as of July 1,
1998, by and between Royal Gold, Inc., a Delaware corporation,
whose address is 1660 Wynkoop Street, Suite 1000, Denver,
Colorado 80202 ("Royal"), and Placer Dome U.S. Inc., a California
corporation, whose address for purposes hereof is 240 South Rock
Boulevard, Suite 117, Reno, Nevada, U.S.A. 89502 (hereinafter
referred to as "PDUS"). Royal and PDUS will be collectively
referred to hereinafter as the "Parties."
RECITALS
A. PDUS is the owner of certain unpatented mining
claims situated in White Pine County, Nevada, as more particularly
described in part 1 of Exhibit A (the "Owned Claims"), and holds
a leasehold interest (either directly or through participation in a
joint venture) in certain unpatented mining claims situated in White
Pine County, Nevada, pursuant to (i) that certain Mining Lease
dated April, 1, 1991 among Sam and Neva Bida, the Estate of Leon
Belaustegui, and Velma Belaustegui, as lessors, and USMX, Inc.
(predecessor in interest to PDUS), as lessee; (ii) that Lease and
Option Agreement dated December 3, 1979, among Sam and Neva
Bida and Leon and Velma Belaustegui, as lessors, and Borane
Mining Corporation (predecessor in interest to USMX, Inc.);
(iii) that Assignment Agreement dated effective July 1, 1992,
between Nevada Mine Properties, Inc. and USMX, Inc., and
(iv) that Joint Venture Agreement dated May 1, 1986 among
Suneva Resources Limited, Borane Mining Corporation, Priority
Minerals Ltd., WFD Limited and WCC Inc. (the latter three entities
collectively the predecessor in interest to USMX, Inc.), all as more
particularly described in part 2 of Exhibit A (collectively the
"Leased Claims"). The Owned Claims and the Leased Claims,
together with all improvements and all easements, rights-of-way,
water rights, and all other appurtenances thereto, will be
collectively referred to hereinafter as the "Property."
B. PDUS desires to grant to Royal and Royal desires to
acquire an exclusive right to explore, evaluate and develop the
Property and an option to purchase all of the right, title and interest
of PDUS in and to the Property, reserving to PDUS either (i) an
interest in 5% of the Net Proceeds (as defined below) from the
Property, or (ii) an option to retain ownership of the Property,
subject to certain reimbursement obligations to Royal and the
obligation to convey to Royal an interest in 22% of the Net
Proceeds from the Property.
AGREEMENT
NOW, THEREFORE, for and in consideration of Royal's
firm commitment to pay all land holding costs associated with the
Property for a period of one year from and after the Effective Date,
and to incur certain expenditures on exploration of the Property, as
more fully described in Section 2.2(a) below, and other good and
valuable consideration, the receipt and sufficiency of which the
Parties hereby confirm and acknowledge, and the mutual promises,
covenants, and conditions herein contained and recited, the Parties
hereto agree as follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms shall have
the meanings assigned to them in this Article 1.
1.1 "Acquisition Costs" shall mean costs incurred by
Royal in acquiring property interests within the exterior boundaries
of the Property, including direct costs and expenses incurred by
Royal in conducting negotiations and due diligence, attorneys' fees
actually incurred by Royal in connection with any such acquisition,
and all moneys paid by Royal in acquiring and holding such
property interests.
1.2 "Acquisition Date" shall mean the date Royal
acquires an undivided 100% of the right, title and interest of PDUS
in and to the Property, reserving to PDUS an interest in five percent
of Net Proceeds from the Property.
1.3 "Affiliate" shall mean any person, partnership, joint
venture, corporation or other form of enterprise which directly or
indirectly controls, is controlled by, or is under common control
with, a party to this Agreement. For purposes of the preceding
sentence, "control" means possession, directly or indirectly, of the
power to direct or cause direction of management and policies
through ownership of voting securities, contract, voting trust or
otherwise.
1.4 "Agreement" shall mean this Exploration and
Development Option Agreement, the recitals and all exhibits
attached hereto and by this reference incorporated herein.
1.5 "Anniversary Date" shall mean the date falling one
or more years after the Effective Date.
1.6 "Annual Period" shall mean each period of one year
during the term of this Agreement which commences on the
Effective Date or any Anniversary Date and ends on the same date
the following calendar year.
1.7 "Completion Requirement" shall have the meaning
set forth in Section 2.2(b).
1.8 "Effective Date" shall mean July 1, 1998.
1.9 "Evaluation Period" shall mean the period of time
commencing on the Effective Date and continuing until Royal has
either achieved the Completion Requirement or else relinquished its
rights hereunder.
1.10 "Exploration, Development and Related Work" shall
mean and include all operations and activities of Royal on or
relating to the Property for purposes of determining ore reserves
and mineralization, and for purposes of development of Valuable
Minerals from the Property (but not for purposes of mining,
processing or marketing of Valuable Minerals) including, without
limitation, the right to enter upon the Property for purposes of
surveying, exploring, testing, sampling, trenching, bulk sampling,
prospecting and drilling for Valuable Minerals, and to construct and
use buildings, roads, power and communication lines, and to use so
much of the surface of the Property in such manner as Royal deems
necessary for the enjoyment of any rights and privileges to Royal
hereunder or otherwise necessary to effect the purposes of this
Agreement.
1.11 "Exploration and Development Expenses" shall
mean and include all costs or fees, expenses, liabilities and charges
paid or incurred by Royal which are related to Exploration,
Development and Related Work conducted during the Evaluation
Period for the purpose of discovery, location, delineation,
evaluation or development of Valuable Minerals from the Property,
including without limitation:
(a) All costs and expenses incurred in
conducting exploration and prospecting activities, including,
without limitation, the preparation of feasibility studies, the active
pursuit of required federal, state or local authorizations or permits
and the performance of required environmental protection or
restoration obligations, the building, maintenance and repair of
roads, drill site preparation, drilling, trenching, bulk sampling,
tracking, digging test pits, shaft sinking, acquiring, diverting and/or
transporting water necessary for exploration, logging of drill holes
and drill core, completion and evaluation of geological,
geophysical, geochemical or other exploration data and preparation
of interpretive reports, and surveying and laboratory costs and
charges (including assays or metallurgical analyses and tests);
(b) All expenses incurred in conducting
development activities on or in connection with the Property, the
active pursuit of required federal, state or local authorization or
permits and the performance of required environmental protection
or restoration obligations, pre-stripping and stripping, the
construction and installation of a mill, leach pads or other
beneficiation facilities for Valuable Minerals, and other activities,
operations or work performed in preparation for the removal of
Valuable Minerals from the Property;
(c) All Acquisition Costs;
(d) All costs incurred in performing any
reclamation, restoration or other work required by any federal, state
or local agency or authority;
(e) Salaries, wages, expenses and benefits of
Royal's employees or consultants engaged in operations relating to
the Property, including salaries and fringe benefits of those who are
temporarily assigned to and directly employed on work relating to
the Property for the periods of time such employees are engaged in
such activities and reasonable transportation expenses for all such
employees to and from their regular place of work to the Property;
(f) All costs incurred in connection with the
preparation of feasibility studies and economic and technical
analyses pertaining to the Property, whether carried out by Royal
or by third parties under contract with Royal;
(g) Taxes and assessments, other than income
taxes, assessed or levied upon or against the Property or any
improvements situated thereon, for which Royal is responsible or
for which Royal reimburses PDUS;
(h) Costs of material, equipment and supplies
acquired, leased or hired, for use in conducting exploration or
development operations relating to the Property; provided,
however, that equipment owned and supplied by Royal shall be
chargeable at rates no greater than the most favorable rental rates
available in the area of the Property;
(i) Costs and expenses of establishing and
maintaining field offices, camps and housing facilities;
(j) Costs incurred by Royal in examining and
curing title to any part of the Property and in maintaining the
Property whether through the performance of assessment work or
otherwise, in making required payments under the Leases, in
satisfying surface use or damage obligations to landowners, or in
conducting any analyses of the environmental conditions at the
Property; and
(k) An additional 10% as overhead on all costs
and expenses described in items (a) through (j) above.
1.12 "Leases" shall mean the mining leases and other
agreements covering the Leased Claims, as more particularly
described in Recital A and part 2 of Exhibit A.
1.13 "Minimum Work Requirement" shall have the
meaning set forth in Section 2.2(a) below.
1.14 "Net Proceeds" shall have the meaning set forth in
Exhibit B.
1.15 "PDUS Option" shall mean PDUS' exclusive option,
pursuant to Section 2.3, to either (a) offer to convey to Royal all of
PDUS' interest in the Property, reserving to PDUS an interest in
5% of Net Proceeds from the Property, or (b) reimburse Royal for
200% of its Exploration and Development Expenses incurred
during the Evaluation Period and convey to Royal an interest in
22% of Net Proceeds from the Property.
1.16 "Valuable Minerals" shall mean all ores, minerals,
mineral deposits or mineral substances of every kind or character
located in, on or under the Property.
1.17 "$" shall mean United States currency.
ARTICLE 2
GRANT OF RIGHTS AND OPTIONS
2.1 Rights Granted to Royal.
(a) PDUS hereby grants to Royal the exclusive
right to enter upon the Property during the Evaluation Period for the
purpose of conducting Exploration, Development and Related
Work. All of Royal's Exploration, Development and Related Work
shall be subject to prior coordination with PDUS, to ensure that
such work does not interfere with PDUS' ongoing reclamation
work on the Property.
(b) During the Evaluation Period, PDUS shall
have reasonable and continuing rights of access to and from and
across the Property for the purpose of conducting exploration,
development, mining and reclamation activities at the Vantage and
Yankee claim blocks described in part 3 of Exhibit A, and
reclamation activities at the Property.
(c) Upon the receipt of five days' advance
written notice from Royal, PDUS shall consider in good faith any
requests by Royal to traverse portions of the Vantage and Yankee
claim blocks described in Part 3 of Exhibit A, in order for Royal to
explore that ground comprising a portion of the Property and lying
to the south and west of the Amselco heaps and to the south of the
Vantage claim block, and to explore along the range front to the
east of the Yankee claim block. Royal agrees that each such notice
will include the proposed route of access and the level of activity
contemplated by Royal to be associated with such access. PDUS
shall grant such access to Royal so long as the proposed activities
on the part of Royal as set forth in the notice do not unreasonably
interfere with any of the activities or contemplated activities of
PDUS at the Yankee or Vantage claim blocks.
(d) Royal shall have the right to delete portions
of the Property from the scope of the Agreement; provided that
Royal shall have no right to so delete any portions of the Property
during the months of July or August of any year, and provided
further that as to the groups of claims that are subject to the Leases,
(i) Royal shall have no right to delete any portions of those claims
from the scope of the Agreement between May 15th and September
1st of any year or at any time within 60 days of the respective dates
that annual minimum royalty or other advance payments are due
under the particular Lease(s) covering those groups of claims, and
(ii) Royal may delete from the scope of the Agreement all but not
less than all of any group of claims covered by any particular
Lease(s).
2.2 Minimum Work Requirement and Completion Requirement.
(a) In order to retain the right to either acquire
the Property or an interest in 22% of the Net Proceeds from the
Property, in addition to fulfilling its obligations set forth in Article
IV, Royal shall during the Evaluation Period incur on an annual
basis Exploration and Development Expenses in at least the
following amounts (on an annual basis, the "Minimum Work
Requirement"):
First Annual Period $ 300,000
Second Annual Period $ 350,000
Third Annual Period $ 500,000
Fourth Annual Period $ 650,000
Fifth Annual Period $ 1,100,000
Sixth Annual Period $ 1,100,000
Any Exploration and Development Expenses incurred by Royal in
excess of the Minimum Work Requirement for any particular
Annual Period may be carried forward by Royal and shall apply as
a credit toward Exploration and Development Expenses required to
be incurred by Royal during the next Annual Period. If Royal
elects for any reason not to meet the Minimum Work Requirement
for the first Annual Period, it shall nonetheless be obligated to
tender the amount of any deficiency ($300,000 less the amount of
Exploration and Development Expenses actually incurred) to
PDUS. If Royal elects not to timely meet the Minimum Work
Requirement for any subsequent Annual Period, Royal may keep
the Agreement in full force and effect by paying the amount of any
deficiency to PDUS no later than 30 days after the end of that
Annual Period.
(b) Upon timely incurring a minimum of
$4,000,000 in Exploration and Development Expenses (the
"Completion Requirement"), Royal shall promptly notify PDUS.
Together with such notice, Royal shall deliver to PDUS (to the
extent not previously provided to PDUS) copies of all data in its
possession or reasonably available to it relating to the title to the
Property or environmental conditions at or pertaining to the
Property, and all maps, assays, surveys, technical reports, drill logs,
samples, mine, mill, processing and smelter records, and
metallurgical, geological, geophysical, geochemical and
engineering data, and interpretive reports derived therefrom,
concerning the Property and developed by Royal during the
Evaluation Period. Royal makes no representation or warranty as
to the accuracy, reliability or completeness of any such data, and
PDUS shall rely on the same at its sole risk.
(c) Royal shall provide PDUS with a written
statement of Exploration and Development Expenditures, certified
as being complete and accurate by Royal, within 30 days after the
end of each calendar quarter during each Annual Period during the
term of this Agreement, and shall make available for review by
PDUS, during normal business hours, for a period of six months
after the end of each Annual Period, backup invoices, statements
and the like verifying such expenditures. In connection with such
a review, Royal may satisfy the Minimum Work Requirement or
the Completion Requirement by the payment to PDUS of any
agreed-upon deficiency within 30 days after any reported
expenditure has later been determined not to be a valid Exploration
and Development Expenditure, or the amount of required
Exploration and Development Expenditures has later been
determined to be deficient.
2.3 Right to Exercise the PDUS Option.
(a) Within 90 days after receipt of the notice of
satisfaction of the Completion Requirement and the information
required to be included therewith, PDUS shall be obligated to
exercise the PDUS Option by making one of the two following
elections: PDUS shall, in its sole discretion, either (i) offer, in
writing, to convey the Property to Royal, reserving to PDUS an
interest in 5% of the Net Proceeds from the Property, or (ii) provide
notice to Royal, in writing, that PDUS will retain ownership of the
Property but shall convey to Royal an interest in 22% of the Net
Proceeds from the Property.
(b) If PDUS makes the election to retain
ownership of the Property as set forth in Section 2.3(a)(ii), that
election will be subject to the following obligations:
(i) PDUS shall, at the time of that election, reimburse
to Royal an amount equal to 200% of the Exploration and Development
Expenses Royal incurred during the Evaluation Period; and
(ii) PDUS shall, not later than 15 days
after the date of that election, convey to Royal an interest in 22% of
the Net Proceeds from the Property, in the form of the Conveyance
of Royalty Interest set forth as Exhibit C attached hereto and
incorporated herein by reference.
(c) If PDUS makes the election to offer to
convey the Property to Royal as set forth in Section 2.3 (a)(i), then
Royal must respond, in writing, within 15 days after the receipt of
PDUS' offer, advising PDUS whether Royal shall accept such
conveyance of the Property (with the described reservation of a 5%
Net Proceeds Interest), or whether Royal declines to accept such
offered conveyance. In the event that Royal declines to accept such
conveyance, Royal shall thereafter retain no interest in the Property.
In the event that Royal confirms that it shall accept the offered
conveyance of the Property, then PDUS, within 15 days after its
receipt of Royal's notice of acceptance of the offered conveyance
of the Property, shall execute and deliver to Royal recordable
conveyances of all of PDUS' interest in the Owned Claims, the
Leased Claims and the Leases in the forms of (i) the Special
Warranty Deed set forth as Exhibit D attached hereto (reserving to
PDUS an interest in 5% of the Net Proceeds from the Owned
Claims), and (ii) the Assignment set forth as Exhibit E attached
hereto (reserving to PDUS an interest in 5% of Net Proceeds from
the Leased Claims).
2.4 Failure by Royal to Complete Minimum Work
Requirement or Completion Requirement. In the event Royal fails
to complete the Minimum Work Requirement during any Annual
Period or the Completion Requirement, and fails to timely pay to
PDUS the amount of any deficiency, this Agreement shall be
conclusively deemed terminated in accordance with Article 9;
provided, however, that if Royal fails to complete the Minimum
Work Requirement during the first Annual Period, Royal shall
nonetheless be obligated to tender the amount of any deficiency
($300,000 less the amount of Exploration and Development
Expenses actually incurred) to PDUS.
2.5 Geological and Other Data. Upon execution of this
Agreement, PDUS shall use good faith efforts to make available to
Royal all records, information and data in PDUS' possession
relating to title to the Property or environmental conditions at or
pertaining to the Property, and all maps, assays, surveys, technical
reports, drill logs, samples, mine, mill, processing and smelter
records, and metallurgical, geological, geophysical, geochemical,
and engineering data concerning the Property. PDUS makes no
representation or warranty as to the accuracy, reliability or
completeness of any such records, information or data, and Royal
shall rely on the same at its sole risk.
2.6 Acquisition of Additional Claims. During the
Evaluation Period, Royal may locate or otherwise acquire
additional unpatented claims within the exterior boundaries of the
Property, provided that any such additional claims shall become a
part of the Property for all intents and purposes under this
Agreement.
ARTICLE 3
RIGHTS OF ROYAL DURING THE EVALUATION PERIOD
3.1 Royal's Rights. During the Evaluation Period,
Royal's rights shall include, without limitation, the following:
(a) Royal may carry out such operations at the
Property as it may, in its sole discretion, determine to be warranted,
provided that Royal shall have no right to engage in any mining,
mineral processing or marketing operations or activities at or on the
Property, and Royal shall have exclusive control of all exploration,
and development operations on or for the benefit of the Property,
and of any and all equipment, supplies, machinery or other assets
purchased or otherwise acquired in connection with such
exploration or development operations; and
(b) Royal's rights shall include all other rights
necessary or incident to or for its performance of its operations
hereunder, including, but not limited to the authority to apply for all
necessary permits, licenses and other approvals from the United
States of America, the State of Nevada or any other governmental
or other entity having regulatory authority over any part of the
Property.
ARTICLE 4
OBLIGATIONS OF THE PARTIES DURING THE EVALUATION PERIOD
4.1 Conduct of Operations by Royal at the Property. All
of the Exploration, Development and Related Work and any other
activities which may be performed by Royal hereunder shall be
performed in accordance with all of the terms and provisions of the
Leases (as to the Leased Claims) and good mining practices, but the
timing, nature, manner and extent of any exploration, development
or any other operations or activities hereunder shall be in the sole
discretion of Royal, and there shall be no implied covenant to begin
or continue any such operations or activities.
4.2 Indemnity. Except for damages sustained by PDUS
while on the Property pursuant to Section 4.5, Royal agrees to
indemnify and hold PDUS harmless from and against any loss,
liability, cost, expense or damage (including reasonable attorneys'
fees) PDUS may incur for injury to or death of persons or damage
to property, or otherwise, as the result of Royal conducting any
operations on or in connection with the Property.
4.3 Insurance. Royal agrees to carry such insurance,
covering all persons working at or on the Property for Royal, as will
fully comply with the requirements of the statutes of the State of
Nevada pertaining to worker's compensation and occupational
disease and disabilities as are now in force or as may be hereafter
amended or enacted. In addition, during the Evaluation Period,
Royal agrees to carry liability insurance with respect to its
operations at the Property in reasonable amounts in accordance with
accepted industry practices. Royal agrees that PDUS shall be
named as an additional insured on all such policies, and agrees to
forward to PDUS certificates of such insurance policies not later
than 10 days prior to the date Royal commences any activities on
the Property. Royal shall have no right to commence any such
activities until such certificates are delivered to PDUS.
4.4 Compliance with Laws. Royal agrees to conduct
and perform all of its operations at the Property during the
Evaluation Period in compliance with all valid and applicable
federal, state and local laws, rules and regulations, including,
without limitation, such laws, rules and regulations pertaining to
environmental protection, human health and safety, social security,
unemployment compensation, wages and hours and conditions of
labor, and Royal shall indemnify and hold PDUS harmless from
and against any loss, liability, cost, expense or damage (including
reasonable attorneys' fees) arising from or related to Royal's failure
to comply with said laws.
4.5 Inspection. During the Evaluation Period, PDUS
and its authorized agents, at PDUS' sole risk and expense, shall
have the right, exercisable during regular business hours, at a
mutually convenient time, in compliance with Royal's safety rules
and regulations, and in a reasonable manner so as not to interfere
with Royal's operations, to go upon the Property for the purpose of
confirming that Royal is conducting its operations in the manner
required by this Agreement, and to review any and all data and
information associated with such operations. PDUS shall
indemnify and hold Royal harmless from and against any loss,
liability, cost, expense or damage (including reasonable attorneys'
fees) arising out of any death, personal injury or property damage
sustained by PDUS, its agents or employees, while in or upon the
Property pursuant to this Section 4.5, unless such death, injury or
damage is due to Royal's negligence or misconduct.
4.6 Taxes. During the Evaluation Period, Royal shall
be responsible for payment of all taxes levied or assessed upon or
against the Property, as well as any facilities or improvements
located thereon.
4.7 Liens and Encumbrances. Royal shall keep the title
to the Property free and clear of all liens and encumbrances
resulting from its operations hereunder; provided, however, that
Royal may refuse to pay any claims asserted against it which it
disputes in good faith. At its sole cost and expense, Royal shall
contest any suit, demand or action commenced to enforce such a
claim and, if the suit, demand or action is decided by a court or
other authority of ultimate and final jurisdiction against Royal or
the Property, Royal shall promptly pay the judgment and shall post
any bond and take all other action necessary to prevent any sale or
loss of the Property or any part thereof.
4.8 Reclamation and Remediation. Royal shall reclaim
the Property, to the extent disturbed by Royal during the Evaluation
Period and thereafter, in accordance with and as required by
applicable federal, state and local laws, rules and regulations. If
PDUS elects to retain ownership of the Property as set forth in
Section 2.3(a)(ii), PDUS agrees to grant to Royal such access to the
Property following termination as is reasonably necessary to
complete such reclamation and restoration work.
4.9 Property Holding Costs. PDUS shall timely pay all
required Property holding costs during the Evaluation Period,
including without limitation all required payments under the
Leases, all required claim maintenance fees and all required
property taxes, and shall timely make all filings and recordings in
the appropriate governmental offices required in connection with
such payments. Royal agrees to promptly reimburse PDUS for the
payment of such holding costs upon receipt from PDUS of evidence
of such payment.
4.10 Information and Data. During the Evaluation
Period, from time to time at the request of PDUS, Royal shall
provide to PDUS copies of records, information and data in its
possession or reasonably available to it relating to title to the
Property or environmental conditions at or pertaining to the
Property, and all maps, assays, surveys, technical reports, feasibility
studies or other economic evaluations, drill logs, samples, mine,
mill, processing and smelter records, and metallurgical, geological,
geophysical, geochemical, and engineering data, and interpretive
reports derived therefrom, concerning the Property and developed
by Royal during the Evaluation Period. Royal makes no
representation or warranty as to the accuracy, reliability or
completeness of any such records, information or data, and PDUS
shall rely on the same at its sole risk.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PDUS
5.1 Representations and Warranties. PDUS represents
and warrants to Royal as of the date hereof as follows, and
covenants that these representations and warranties will be true and
correct through the Evaluation Period (provided that representations
and warranties which are expressly made as of a specified date need
only be true as of such specified date):
(a) Organization and Standing. PDUS is a
corporation duly organized, validly existing, and in good standing
under the laws of the State of California and is duly qualified to
conduct business as a foreign corporation in Nevada.
(b) Corporate Power. PDUS has the requisite
corporate power and authority (i) to enter into this Agreement and
all other agreements contemplated hereby, and (ii) to carry out and
perform its obligations under the terms and provisions of this
Agreement and all agreements contemplated hereby.
(c) Authorization. All requisite corporate action
on the part of PDUS and its officers, directors, and shareholders,
necessary for the execution, delivery, and performance of this
Agreement and all other agreements of PDUS contemplated hereby,
have been taken. This Agreement and all agreements and
instruments contemplated hereby are, and when executed and
delivered, will be (assuming they are duly and validly executed and
delivered by Royal), legal, valid, and binding obligations of PDUS
enforceable against PDUS in accordance with their respective
terms. The execution, delivery and performance of this Agreement
will not violate any provision of law; any order of any court or
other agency of government; or any provision of any indenture,
agreement or other instrument to which PDUS is a party or by
which its properties or assets are bound; or be in conflict with,
result in a breach of or constitute (with due notice and lapse of
time) a default under any such indenture, agreement or other
instrument. There is no law, rule or regulation, nor is there any
judgment, decree or order of any court or governmental authority
binding on PDUS which would be contravened by the execution,
delivery, performance, or enforcement of this Agreement or any
instrument or agreement required hereunder. Notwithstanding the
foregoing, no representation is made as to the remedy of specific
performance or other equitable remedies for the enforcement of this
Agreement or any other agreement contemplated hereby.
Additionally, this representation is limited by applicable
bankruptcy, insolvency, moratorium, and other similar laws
affecting generally the rights and remedies of creditors and secured
parties.
(d) Royalties. Except as set forth in the Leases,
there are no royalties or other burdens on production arising by,
through or under PDUS and affecting the Property.
(e) Title to the Owned Claims and the Leased Claims.
(i) PDUS represents that it is in
exclusive possession of the Owned Claims, and further represents
and warrants that, to its knowledge, (A) the Owned Claims were
properly located and monumented; (B) location notices and
certificates were properly posted and recorded for each of the
Owned Claims; (C) all filings and recordings required to maintain
the Owned Claims in good standing through the Effective Date,
including evidence of proper performance of annual assessment
work or payment of required claim maintenance fees, have been
timely and properly made in the appropriate governmental offices;
(D) assessment work, performed reasonably and in good faith in
accordance with accepted industry practice, which PDUS believes
was sufficient to satisfy the requirements for holding the Owned
Claims was performed through the assessment year ending
September 1, 1992; and (E) all required annual claim maintenance
fees and other payments necessary to maintain the Owned Claims
through the assessment year ending September 1, 1998, have been
timely and properly made.
(ii) PDUS represents and warrants that it
is in exclusive possession of the Leased Claims, and further
represents and warrants that, to its knowledge and from and after
the date it acquired an interest in the Leased Claims, (A) all filings
and recordings required to maintain the Leased Claims in good
standing through the Effective Date, including evidence of proper
performance of annual assessment work or payment of required
claim maintenance fees, have been timely and properly made; (B)
assessment work, performed reasonably and in good faith in
accordance with accepted industry practice, which PDUS believes
was sufficient to satisfy the requirements for holding the Leased
Claims, was performed through the assessment year ending
September 1, 1992; and (C) all required annual claim maintenance
fees and other payments necessary to maintain the Leased Claims
through the assessment year ending September 1, 1998, have been
timely and properly made.
(iii) PDUS represents and warrants that
the Owned Claims and the Leased Claims are free and clear of all
liens, claims and encumbrances arising by, through and under
PDUS, including (other than the Leases) any lease, right or license,
except taxes not yet due and payable.
(iv) PDUS makes no representation or
warranty whatsoever, express or implied, as to the existence of any
discovery of Valuable Minerals on any of the Owned Claims or the
Leased Claims.
(v) PDUS has conducted all of its
operations on the Leased Claims in compliance with the Leases, the
Leases are in full force and effect, and PDUS is aware of no
defaults or events that could give rise to a default in existence
thereunder.
(f) Environmental Compliance. To the
knowledge of PDUS, there is no condition or activity at the
Property which constitutes a nuisance or which would result in a
violation of or liability under applicable federal, state or local laws,
orders, regulations, directives or restrictions concerning protection
of the environment or health and safety. PDUS has not received
any notice of violation or any consent order issued under applicable
federal, state or local laws, orders, regulations, directives or
restrictions concerning protection of the environment and health
and safety to which the Property or PDUS' operations thereon are
now subject or may become subject. To the knowledge of PDUS,
there are no pending or threatened proceedings by or before any
court or other governmental authority with respect to operations on
or the ownership of the Property alleged to be, or to have been, in
violation of, or to be the basis of liability under, any federal, state
or local law, order, rule, regulation, ordinance, directive or
restriction concerning protection of the environment or health and
safety, and PDUS is not aware of any "release" of any "hazardous
substance" (as those terms are defined in the U.S. Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
as amended) at, from or affecting the Property.
(g) Material Contracts and Commitments.
PDUS has performed all material obligations required to be
performed by it under any contracts and commitments affecting the
Property to which it is a party, and is not in default, and will not be
in default as a result of the consummation of the transactions
contemplated herein, under any contract, agreement, commitment,
mortgage, indenture, loan agreement, lease, license, or other
instrument to which it is a party, including, without limitation, the
Leases. True and correct copies of all such agreements and
commitments, as amended, have been provided to Royal.
(h) Legality. PDUS is not in material violation
of any law, rule, ordinance, or other governmental regulation,
including, without limitation, those relating to zoning,
condemnation, mining, reclamation, environmental matters, equal
employment, and federal, state, or local health and safety laws,
rules, and regulations, the lack of compliance with which could
materially adversely affect the Property.
(i) Litigation and Claims. To the knowledge of
PDUS, there are no actions, suits or proceedings pending or
threatened against or affecting the Property, including any actions,
suits, or proceedings being prosecuted by any federal, state or local
department, commission, board, bureau, agency, or instrumentality.
To the knowledge of PDUS, it is not subject to any order, writ,
injunction, judgment or decree of any court or any federal, state or
local department, commission, board, bureau, agency, or
instrumentality which relates to the Property.
(j) Consents. PDUS has obtained all consents,
approvals, authorizations, declarations, or filings required by any
federal, state, local, or other authority, stock exchange or any other
third party, including, without limitation, any consents required
under the Leases, in connection with the valid execution, delivery,
and performance of this Agreement and the consummation of the
transactions contemplated hereby.
(l) Taxes. All federal, state and local excise,
property and other taxes and assessments pertaining to or assessed
against the Property have been timely and properly paid.
(m) Brokerage or Finder's Fee. All negotiations
relative to this Agreement and the transactions contemplated hereby
have been carried on by PDUS in such manner as not to give rise to
any valid claim against PDUS or any other third party for a
brokerage commission, finder's fee, or other fee or commission
arising by reason of the transactions contemplated by this
Agreement.
(n) Representations. No statements, warranties,
or representations made by PDUS herein contain any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements made, in light of the circumstances
under which such statements were or will be made, not misleading.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF ROYAL
6.1 Representations and Warranties of Royal. Royal
represents and warrants to PDUS as of the date hereof as follows,
and covenants that these representations and warranties will be true
and correct through the Evaluation Period (provided that
representations and warranties which are expressly made as of a
specified date need only be true as of such specified date):
(a) Organization and Standing. Royal is a
corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware and is duly qualified to
conduct business as a foreign corporation in Nevada.
(b) Corporate Power. Royal has the requisite
corporate power and authority (i) to enter into this Agreement and
all other agreements contemplated hereby, and (ii) to carry out and
perform its obligations under the terms and provisions of this
Agreement and all agreements contemplated hereby.
(c) Authorization. All requisite corporate action
on the part of Royal, and its officers, directors, and shareholders
necessary for the execution, delivery and performance of this
Agreement and all other agreements of Royal contemplated hereby
have been taken. This Agreement and all agreements and
instruments contemplated hereby, when executed and delivered by
Royal, will be (assuming they are duly and validity executed and
delivered by PDUS) the legal, valid, and binding obligations of
Royal enforceable against Royal in accordance with their terms.
The execution, delivery and performance of this Agreement will not
violate any provision of law; any order of any court or other agency
of government; or any provision of any indenture, agreement or
other instrument to which Royal is a Party or by which its
properties or assets are bound; or be in conflict with, result in a
breach of or constitute (with due notice and lapse of time) a default
under any such indenture, agreement or other instrument. There is
no law, rule or regulation, nor is there any judgment, decree or
order of any court or governmental authority binding on Royal
which would be contravened by the execution, delivery,
performance or enforcement of this Agreement or any instrument
or agreement required hereunder. Notwithstanding the foregoing,
no representation is made as to the remedy of specific performance
or other equitable remedies for the enforcement of this Agreement
or any other agreement contemplated hereby. Additionally, this
representation is limited by applicable bankruptcy, insolvency,
moratorium, and other similar laws affecting generally the rights
and remedies of creditors and secured parties.
(d) Brokerage or Finder's Fee. All negotiations
relative to this Agreement and the transactions contemplated hereby
have been carried on by Royal in such manner as not to give rise to
any valid claim against Royal or any third party for a brokerage
commission, finder's fee or other fee or commission arising by
reason of the transactions contemplated by this Agreement.
(e) Representations. No statements, warranties
or representations made by Royal herein contain any untrue
statement of material fact or omit to state a material fact necessary
in order to make the statement made in light of the circumstances
under which such statements were made or will be made, not
misleading.
ARTICLE 7
NOTICES
7.1 Notices. All notices given in connection herewith
shall be in writing, and all such notices and deliveries to be made
pursuant hereto shall be given or made in person, by certified or
registered mail, by reputable overnight courier, or by facsimile
acknowledged upon receipt. Such notices and deliveries shall be
deemed to have been duly given and received when actually
delivered in person or sent by facsimile (during normal business
hours), on the next business day following the date they are sent by
courier, or three business days after registered or certified mailing
when deposited in a receptacle for United States mail, postage
prepaid, and addressed as follows:
(a) If to PDUS:
Placer Dome U.S. Inc.
240 South Rock Boulevard
Suite 117
Reno, Nevada, U.S.A. 89502
Facsimile No.: (702) 856-7509
Attention: Land and Legal Department
with a copy to:
Placer Dome U.S. Inc.
Suite 600-1055 Dunsmuir Street
Vancouver, British Columbia, Canada
V7X 1L3
Attention: Secretary and General Counsel
(b) If to Royal:
Royal Gold, Inc.
1660 Wynkoop Street
Suite 1600
Denver, Colorado 80112
Facsimile No. (303) 595-9385
Attention: President
ARTICLE 8
INDEMNIFICATION
8.1 By PDUS. In addition to the indemnification
obligations set forth in Section 4.5, PDUS agrees to defend,
indemnify and hold harmless Royal, its successors, affiliates,
assigns, officers, directors and employees from and against any and
all claims, actions, suits, losses, liabilities, damages, assessments,
judgments, costs and expenses, including reasonable attorneys' fees,
arising out of or related to (i) any breach by PDUS of any
representation or warranty or failure by PDUS to perform any
covenant or obligation set forth herein, or (ii) any activities
conducted by PDUS on or in connection with the Property prior to
the Effective Date.
8.2 By Royal. In addition to the indemnification
obligations set forth in Sections 4.2 and 4.4, Royal agrees to
defend, indemnify and hold harmless PDUS, its successors,
affiliates, assigns, officers, directors and employees from and
against any and all claims, actions, suits, losses, liabilities,
damages, assessments, judgments, costs and expenses, including
reasonable attorneys' fees, arising out of or related to (i) any breach
by Royal of any representation or warranty or failure by Royal to
perform any covenant or obligation set forth herein, or (ii) any
activities conducted by Royal on or in connection with the Property
during the Evaluation Period or thereafter.
8.3 Notification. Any Party who has a claim giving rise
to indemnification liability pursuant to this Agreement (an
"Indemnified Party") which results from a claim by a third party
shall give prompt notice to the other Party (the "Indemnifying
Party") of such claim, together with a reasonable description
thereof. Failure to provide such notice shall not relieve a Party of
any of its obligations hereunder except to the extent materially
prejudiced thereby. With respect to any claim by a third party
against any Party to this Agreement which is subject to
indemnification under this Agreement, the Indemnifying Party shall
be afforded the opportunity, at its expense, to defend or settle the
claim if it utilizes counsel reasonably satisfactory to the
Indemnified Party, and promptly commences the defense of such
claim and pursues such defense with diligence; provided, however,
that the Indemnifying Party shall secure the consent of the
Indemnified Party to any settlement, which consent shall not be
unreasonably withheld. The Indemnified Party may participate in
the defense of any claim at its expense, and until the Indemnifying
Party has agreed to defend such claim, the Indemnified Party may
file any motion, answer or other pleading or take such other action
as it deems appropriate to protect its interests or those of the
Indemnifying Party. If an Indemnifying Party does not elect to
contest any third-party claim, the Indemnifying Party shall be
bound by the results obtained with respect thereto by the
Indemnified Party, including any settlement of such claim.
ARTICLE 9
TERM AND TERMINATION
9.1 Term and Termination. This Agreement will remain
in effect during the Evaluation Period, after which, upon exercise
of the PDUS Option, it will terminate automatically, unless it is
sooner terminated pursuant to the provisions of this Article 9.
9.2 Termination by Royal. Royal shall have the right to
terminate, surrender and relinquish this Agreement at any time
during the Evaluation Period by giving 60 days' advance written
notice to PDUS of such election. Any termination by Royal
pursuant to this Section 9.2 will be effective 60 days after the date
such notice is effective as provided in Section 7.1 above. Upon
termination of this Agreement pursuant to this Section 9.2, Royal
shall have no right, title or interest in or to the Property, and shall
have no further liability or obligations hereunder or with respect to
the Property, except with respect to the obligations set forth in
Sections 2.2(a), 2.4, 4.2, 4.4, 4.7, 4.8, 4.9, 4.10, 8.2, 8.3, 9.4, 9.5,
9.6 and 10.1, and PDUS shall have no further liability or obligations
hereunder, except with respect to the obligations set forth in
Sections 4.5, 8.1, 8.3 and 10.1.
9.3 Termination by PDUS. In the event of a default
hereunder on the part of Royal, PDUS shall provide to Royal
written notice specifying the particular default or defaults asserted,
and, in the case of a default other than with respect to the payment
of money, Royal shall have 30 days after the receipt of said notice
within which either to cure such specified defaults, or to undertake
to cure the same and diligently thereafter promptly to cure the
same. In the event of such a cure by Royal, this Agreement shall
continue in full force and effect as though no default had occurred.
In the event such curative action is not so completed or diligent
efforts to cure such defaults are not undertaken within the
applicable 30-day period and thereafter diligently pursued to
completion, PDUS may elect to terminate this Agreement by notice
to Royal as provided in Section 7.1. In the case of a default by
Royal relating to the payment of any funds to PDUS or to any third
party as required hereunder, Royal shall have five days after receipt
of notice of such default to rectify the same, failing which PDUS
may elect to terminate this Agreement by written notice to Royal as
provided in Section 7.1. Upon termination of this Agreement
pursuant to this Section 9.3, Royal shall have no further right, title
or interest in or to the Property, and shall have no further liability
or obligations hereunder or with respect to the Property, except with
respect to the obligations set forth in Sections 2.2(a), 2.4, 4.2, 4.4,
4.7, 4.8, 4.9, 4.10, 8.2, 8.3, 9.4, 9.5, 9.6 and 10.1, and PDUS shall
have no further liability or obligations hereunder, except with
respect to the obligations set forth in Sections 4.5, 8.1, 8.3 and 10.1.
9.4 Return of Data. As soon as practicable upon the
termination of this Agreement, unless PDUS elects to convey the
Property to Royal pursuant to Section 2.3(a)(i), Royal shall return
to PDUS copies of all title, environmental, metallurgical,
geological, geophysical, milling and other data concerning the
Property and furnished to Royal by PDUS. At such time, Royal
shall also make available to PDUS for examination and copying all
survey maps, drill hole logs, sample locations and assays developed
by Royal with respect to the Property during the term of this
Agreement and not previously made available to PDUS.
9.5 Release. Upon termination of this Agreement during
the Evaluation Period, Royal will promptly execute and deliver to
PDUS appropriate documents of conveyance releasing and
conveying its interest in the Property to PDUS.
9.6 Surrender of Possession and Removal of Equipment.
Upon termination of this Agreement, unless PDUS has elected to
convey the Property to Royal pursuant to Section 2.3(a)(i), Royal
shall surrender possession of the Property, subject to the condition
that Royal shall have the right at any time within one year (or such
longer period as Royal can demonstrate is reasonably necessary)
after such surrender or termination of this Agreement to complete
any reclamation obligations required of Royal pursuant to
Section 4.8 and remove all of its tools, equipment, machinery,
supplies, fixtures, buildings, structures and other property erected
or placed on such property by Royal, excepting only timber, chutes
and ladders in place for underground support and entry. Title to
such property not removed within the time period set forth above
shall, at the election of PDUS, pass to PDUS. Alternatively, at the
end of the time period set forth above, PDUS may remove any such
property from the Property and dispose of the same in a
commercially reasonable manner, all at the expense of Royal.
ARTICLE 10
AMENDMENT, RELOCATION OR ABANDONMENT
10.1 Amendment and Relocation of Unpatented Claims.
(a) During the Evaluation Period, subject to
PDUS' prior written approval (which shall not be unreasonably
withheld) and in accordance with and to the extent permitted under
the Leases, Royal shall have the full, exclusive right, but not the
obligation, to relocate, amend, defend contests or adverse actions
or suits and negotiate settlement thereof with respect to any and all
of the Owned Claims or the Leased Claims, and PDUS shall
cooperate with Royal and shall execute any and all documents
necessary or desirable in the opinion of Royal to further such
amendments, relocations, contests, adverse actions or suits, or
settlement of such contests or adverse actions or suits. Royal shall
not be liable to PDUS for the loss of any of the Owned Claims or
the Leased Claims as a result of such amendments, relocations,
contests or adverse actions or suits, so long as the same are
undertaken in good faith and, as to the Leased Claims, in
accordance with the provisions of the Leases.
(b) Subsequent to PDUS exercising the PDUS
Option, the owner of the Property (whether PDUS or Royal) may
in its sole discretion abandon, relocate, or amend any of the
unpatented mining claims that comprise the Property, provided that,
as to any of the Leased Claims, any such actions are taken in
accordance with the provisions of the applicable Lease(s), and
provided further that if the owner re-acquires any interest in any
ground covered by any such abandoned claims within 3 years after
their abandonment, such ground shall be deemed to be included in
the Property for all intents and purposes under this Agreement and
any other instruments or agreements contemplated hereby.
ARTICLE 11
TITLE TO AFTER-ACQUIRED INTERESTS
11.1 After-Acquired Property. This Agreement applies
and extends to any further or additional right, title, interest or estate
heretofore or hereafter acquired by PDUS in or to the Property or
any part thereof. In the event that PDUS acquires such right, title,
interest or estate, PDUS will formally submit the same to Royal in
an appropriate writing to the effect that the terms and conditions
provided in this Agreement shall apply to and govern such interest.
ARTICLE 12
ENTIRE AGREEMENT/AMENDMENT
12.1 Entire Agreement. This Agreement is the complete
expression of all agreements, contracts, covenants, and promises
between the Parties, and all negotiations, understandings, and
agreements between the Parties are set forth in this Agreement,
which solely and completely expresses their understanding, and
shall be construed without reference to any such negotiations,
understandings and agreements.
12.2 No Implied Covenants. No implied term, covenant,
condition or provision of any kind whatsoever shall affect any of
the Parties' respective rights and obligations hereunder, including,
without limitation, rights and obligations with respect to
exploration, development, mining, processing and marketing of
minerals, and the only terms, covenants, conditions or provisions
which shall in any way affect any of their respective rights and
obligations shall be those expressly set forth in this Agreement.
12.3 Amendments. This Agreement may not be amended
or modified, nor may any obligation hereunder be waived, except
by writing duly executed on behalf of all Parties, and unless
otherwise specifically provided in such writing, any amendment,
modification, or waiver shall be effective only in the specific
instance and for the purpose it is given.
ARTICLE 13
FORCE MAJEURE
13.1 Effect of Occurrence. In the event Royal is rendered
unable, wholly or in part, by force majeure applying to it, to timely
achieve the Minimum Work Requirement (during any Annual
Period) or the Completion Requirement, or to carry out any of its
obligations under this Agreement (other than the fulfillment of
required obligations under the Leases), it is agreed that such
obligations of Royal, so far as they are affected by such force
majeure, shall be suspended during the continuance of any inability
so caused, but for no longer period; that the various periods and
terms provided for herein shall be extended for a period equivalent
to such period of force majeure; and that such cause shall, so far as
possible, be remedied with all reasonable dispatch. Royal will
promptly notify PDUS of the commencement and termination of
any event of force majeure.
13.2 Definition. The term "force majeure," as employed
herein, shall mean acts of God, strikes, lockouts or other industrial
disturbances, unavoidable accidents, uncontrollable delays in
transportation, inability to obtain necessary materials in the open
market, any state or federal laws, regulations or requirements
(expressly including inability to timely obtain, after diligent efforts,
necessary governmental approvals, licenses and permits on terms
reasonably acceptable to Royal), or other matters beyond the
reasonable control of Royal, whether similar to matters herein
specifically enumerated or not; provided, however, that
performance shall be resumed within a reasonable period of time
after such cause has been removed; and provided further that Royal
shall not be required against its will to adjust any labor dispute or
to question the validity of or to refrain from judicially testing the
validity of any state or federal order, regulation or law.
ARTICLE 14
GENERAL PROVISIONS
14.1 Governing Law. This Agreement, and the rights and
liabilities of the Parties hereunder, shall be governed by and
construed in accordance with the laws of the State of Nevada, other
than its rules as to conflicts of law.
14.2 Parties in Interest; Assignment. All of the terms and
provisions of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective Parties hereto and
their successors and permitted assigns, whether hereinabove so
expressed or not. The rights, powers, privileges, and interests
hereunder shall not be assignable by either Party, except to affiliates
or subsidiaries, or as otherwise specifically provided for herein,
without the prior written consent of the non-assigning Party, which
consent shall not be unreasonably withheld; provided that any
affiliate or subsidiary or third party to whom any rights, powers,
privileges or interests hereunder are assigned shall agree in writing
to be bound by all the terms and conditions of this Agreement.
14.3 Other Business Opportunities. This Agreement is,
and the rights and obligations of the Parties are, strictly limited to
the matters set forth herein. Subject to the provisions of Article 11
relating to after-acquired title, the Parties shall have the free and
unrestricted right to independently engage in and receive the full
benefits of any and all business ventures of any sort whatever,
whether or not competitive with the matters contemplated hereby
without consulting the other or inviting or allowing the other to
participate therein.
14.4 Confidentiality. Except as set forth in Section 14.6,
the Parties hereto agree to treat all data, reports, records and other
information developed under this Agreement and applicable to the
property as confidential, and unless any Party is required by any
law, rule, regulation, or order, to disclose any of such information,
information shall not be disclosed to any person other than
consultants, contractors, or potential investors or assignees, without
prior written agreement of both Parties, which will not be
unreasonably withheld.
14.5 Memorandum for Recording. Simultaneous with the
execution of this Agreement, the Parties agree to execute for
recording purposes a written Short Form of Exploration and
Development Option Agreement, in the form attached hereto as
Exhibit F, setting forth the basic terms and conditions of this
Agreement as necessitated or permitted by Nevada law.
14.6 Public Announcements. Disclosure of information
relating to this Agreement or the Property may be made by either
Party if such information is required to be disclosed to any federal,
state or local government or appropriate agencies and departments
thereof or if such information is required by law, stock exchange
rule or regulation to be publicly announced. Otherwise, public
announcements or reports by either Party of information relating to
this Agreement or the Property shall be made only on the basis of
agreed texts upon the prior written consent of the other Party, which
consent shall not be unreasonably withheld. Each of PDUS and
Royal accordingly agrees that it will, not less than forty-eight hours
in advance of making public any information referred to in the
preceding sentence, give the other Party written notice of the text
of the proposed report and provide the non-disclosing Party with
the opportunity to object to the form and content thereof before the
same is issued. The non-disclosing Party shall respond within
forty-eight hours of receipt of such notice, or its silence will
constitute a waiver of objection to the terms of the proposed text.
14.7 Waiver; Amendment. Any of the terms or
conditions of this Agreement may be waived at any time by the
Party which is entitled to the benefit thereof, but no such waiver
shall affect or impair the right of the waiving Party to require
observance, performance, or satisfaction of any other term or
condition hereof. Any of the terms or provisions of this Agreement
may be amended or modified at any time by agreement in writing.
14.8 Severability. In the event that any one or more of
the provisions contained in this Agreement or in any other
instrument or agreement contemplated hereby shall, for any reason,
be held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other
provision of this Agreement or any such other instrument or
agreement.
14.9 Attorneys' Fees. In the event of any controversy,
claim, or dispute between the Parties hereto, arising out of or
relating to this Agreement or the breach thereof, the prevailing
Party shall be entitled to recover from the losing Party reasonable
expenses, attorneys' fees, and costs.
14.10 Further Documents. At the request of either Party,
the Parties shall execute and deliver any further instruments,
agreements, documents or other papers reasonably requested by
either Party to effect the purposes of this Agreement and the
transactions contemplated hereby.
14.11 Dispute Resolution. The Parties hereby agree that
any dispute arising under this Agreement shall be subject to the
informal dispute resolution procedure set forth in this
Section 14.11. The Party asserting the existence of a dispute as to
the interpretation of any provision of this Agreement or the
performance by the other Party of any of its obligations hereunder
shall notify the other Party of the nature of the asserted dispute.
Within seven business days of receipt of such notice, the
Land/Legal Manager of PDUS and the President of Royal shall
arrange for a personal or telephone conference in which they use
good faith efforts to resolve such dispute. If those individuals are
unable to resolve the dispute, they shall jointly prepare and, within
seven business days after their conference, circulate to the Vice
President of Exploration of PDUS and the CEO of Royal a
memorandum outlining in reasonable detail the nature of the
dispute. Within five business days after receipt of that
memorandum, the individuals to whom that memorandum was
addressed shall arrange for a personal or telephone conference in
which they attempt to resolve such dispute. If those individuals are
unable to resolve the dispute, either Party may proceed with any
legal remedy available to it; provided, however, that the Parties
agree that any statement made as to the subject matter of the dispute
in any of the conferences referred to in this Section 14.11 shall not
be used in any legal proceeding against the Party that made such
statement.
14.12 Counterparts. This Agreement may be executed in
multiple counterparts, and all such counterparts taken together shall
be deemed to constitute one and the same document.
IN WITNESS WHEREOF, the Parties hereto have caused
this Exploration and Development Option Agreement to be duly
executed, delivered, and effective from the date first above written.
Placer Dome U.S. Inc.,
a California corporation
By: /S/
Gregory M. Cox
Vice-President, PDX Americas and
as Exploration Manager for PDUS
Royal Gold, Inc.,
a Delaware corporation
By: /S/
Peter B. Babin
President
Acknowledgments
STATE OF CALIFORNIA )
) ss.
COUNTY OF SANTA CLARA)
The foregoing instrument was acknowledged before me this
20th day of August, 1998 by Gregory M. Cox, as Vice-President
PDX of Placer Dome U.S. Inc., a California corporation, on behalf
of the corporation.
Witness my hand and official seal.
My commission expires: November 11, 2000
/S/ (Cheryl N. Rohde)
Notary Public
[SEAL]
STATE OF COLORADO)
) ss.
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this
17th day of August, 1998 by Peter B. Babin as President of Royal
Gold, Inc., a Delaware corporation, on behalf of the corporation.
My commission expires: June 10, 2000
/S/ (Courtney T.-K. Yoder)
Notary Public
[SEAL]