FAIRBANKS GOLD MINING, INC.
MILLSITE PERMIT
Fort Knox Mine Project
ADL NOS. 414960 AND 414961
TABLE OF CONTENTS
1. Parties........................................... 1
2. Definitions....................................... 1
3. Grant............................................. 5
4. Term.............................................. 7
5. Use Charge........................................ 7
6. Materials within Permit Area...................... 9
7. Reclamation Bond.................................. 11
8. Insurance......................................... 13
9. Commencement of Permit Operations................. 17
10. Maintenance; Obligations; Breach.................. 20
11. Inspection and Entry by the Division.............. 21
12. Environmental Audit............................... 22
13. Taxes and Liens on Permit Area.................... 25
14. Temporary Closure................................. 27
15. Abandonment or Cessation of Mining................ 27
16. Post-Permit Land Conditions....................... 28
17. Removal and Reclamation........................... 28
18. Termination for Breach............................ 29
19. Surrender of Permit Area.......................... 32
20. Indemnification................................... 32
21. Guaranty.......................................... 34
22. Modifications..................................... 35
23. Conveyance by State............................... 36
24. Transfer by FGMI.................................. 37
25. Corporate Authority; Authorized Representatives... 40
26. Notice............................................ 41
27. Statutes and Regulations.......................... 43
28. Payment to Multiple Parties....................... 43
29. Nonpossessory Interest in Real Property........... 43
30. Denial of Warranty................................ 44
31. Recording......................................... 44
32. Venue; Controlling Law............................ 44
33. Waiver or Forbearance............................. 44
34. Severability...................................... 45
35. Attorney's Fees................................... 45
36. Successors........................................ 45
EXHIBITS
Exhibit A: Permit Area Land Description
Exhibit B: Division of Land Appraisal Instructions
Exhibit C: Project Description Map
Exhibit D: Agreement for Funding Post-Reclamation Obligations
Exhibit E: List of FGMI Environmental Policies, Plans, and Procedures
and Environmental Management Systems and Policies
Exhibit F: Initial Reclamation Plan
Exhibit G: Amax Gold Inc. Guaranty
Exhibit H: Agreement to Convey
SCHEDULE
Schedule 1: Schedule of Activity
MILLSITE PERMIT
ADL Nos. 414960 and 414961
1. Parties. This Millsite Permit ("this Permit"), executed this
-------
15th day of February, 1994 , is issued by the State of Alaska, Department of
- - ---- --------
Natural Resources ("DNR"), Divisions of Land and Mining, to Fairbanks Gold
Mining, Inc. ("FGMI"), a Delaware corporation the address of which is P.O Box
73726, Fairbanks, Alaska 99707-3726, and which corporation is a wholly owned
subsidiary of Amax Gold Inc. ("AGI"), a Delaware corporation.
2. Definitions. For the purposes of this Permit, the following
-----------
terms have the following meanings:
a. "Division" means the Division of Mining within DNR, unless
otherwise indicated.
b. "Division Director" means the Director of the Division, unless
otherwise indicated.
c. "Effective Date" means the date this Permit is executed or the
first date upon which all of the following have occurred:
i. the executed guaranty of AGI is received and approved by the
-
Division;
ii. all insurance policies, policy endorsements, and
--
certificates of insurance required by Section 8 herein are received and approved
by the Division; and
Page 1 of 47
iii. the executed Surface Deed pursuant to the Agreement to
---
Convey attached hereto as Exhibit H conveying the surface estate of those
patented mining claims within the Permit Area described in Exhibit A hereto is
delivered to and accepted by the Division of Land, whichever date occurs later.
d. "Hazardous Substance" means the same herein as in AS
46.03.826(5), with "oil" as defined in AS 46.03.826(7).
e. "Facility" or "Facilities" means any and all structures,
excavations, or improvements constructed or in the process of being constructed
in or on the Permit Area, including but not limited to buildings, roads, utility
lines and equipment, pipelines, dams, impoundments, reservoirs, pits, waste
dumps, and wells.
f. "Mining Operations" means those activities constituting the
normal and reasonable exercise of valid Mining Rights pursuant to Mining Lease
ADL 535408 or the exercise of other valid Mining Rights.
g. "Mining Rights" means the working interest in each and every
State mining claim or State mining lease (including but not limited to State
mining lease ADL 535408) (1) the working interest in which is owned or
controlled by FGMI now or at any time during the period when the Plan of
Operations or other plan of operations is in effect for the Permit Area and (2)
which is located within the following area: Township 2 North Range 2 East
Page 2 of 47
(all Sections) and Township 2 North Range 3 East (Sections 4, 5, 6, 7, 8, 9, 16,
17, 18, 19, 20, and 21), Fairbanks Meridian.
h. "Permit Area" means those State lands described in Exhibit A
attached hereto and incorporated by reference herein, including the lands within
those patented federal mining claims described in Exhibit A that have been
conveyed (subject to a mineral reservation) or are under agreement to be
conveyed to the State by FGMI.
i. "Permit Operations" means those activities that are conducted in
or on the Permit Area pursuant to and in compliance with the Plan of Operations
or other plan of operations approved by the Division and the Reclamation Plan
and that are normally and reasonably associated with a millsite, including but
not limited to the following:
i. milling, processing, beneficiation, concentrating, vat
-
leaching, treating, storing, removing, transporting, and selling or otherwise
disposing of locatable minerals mined pursuant to State mining lease ADL 535408;
ii. placing, constructing, erecting, installing, maintaining,
--
repairing, using, replacing, and removing excavations, openings, shafts,
ditches, drains, settling ponds, tailings ponds, stockpiles, waste dumps, roads,
haulageways, buildings, structures, machinery, equipment, and other Facilities
at locations specified in the Plan of Operations and the Reclamation Plan, on or
below the surface of the Permit Area, as
Page 3 of 47
may be reasonably necessary or desirable for the purpose of engaging in the
activities described in Subsection 2(i)(i) above;
iii. reclaiming the Permit Area in conformance with the
---
provisions of this Permit and the Reclamation Plan; and
iv. any and all other actions in or on the Permit Area which
--
may be reasonably necessary or desirable to carry on Permit Operations subject
to the limitations and restrictions of any and all other permits,
authorizations, statutes, laws, regulations, and ordinances existing at the
time of the action.
j. "Plan of Operations" means the plan of operations submitted to
the Division by FGMI in accordance with 11 AAC 86.800, for
i. the development and operation of an open pit gold mine on
-
State mining lease ADL 535408 and
ii. the conduct of Mining Operations and Permit Operations
--
within the Permit Area associated with said mine, as updated, revised, or
amended by FGMI and approved by the Division.
k. "Pollution" means the same herein as in AS 46.03.900(19) with
respect to water, land, or subsurface land and the same herein as AS
46.03.900(2) with respect to air.
l. "Project Description" means the "Project Description for the Fort
Knox Mine (August 1992)" submitted by FGMI to the Division describing (1) the
proposed open pit gold mine on State mining lease ADL 535408 and (2) the
proposed Mining
Page 4 of 47
Operations and Permit Operations within the Permit Area associated with said
mine, as updated, revised, or amended.
m. "Reclamation" means rehabilitation of the lands within the Permit
Area pursuant to and in accordance with the Reclamation Plan.
n. "Reclamation Plan" means the reclamation plan for the Permit Area
submitted by FGMI and approved by the Division in compliance with AS 27.19 and
the regulations promulgated pursuant thereto, as updated, revised, or amended by
FGMI and approved by the Division thereafter.
o. "State" means the State of Alaska as sovereign and owner of the
lands within the Permit Area, and all agencies or authorized representatives
thereof.
p. "Temporary Closure" means a suspension or cessation of Mining
Operations and Permit Operations on the Permit Area not exceeding three (3)
years in duration.
q. "Transfer" means, as the context requires, (a) to sell, grant,
assign, encumber, pledge, or otherwise commit or dispose of, or (b) a sale,
grant, assignment, encumbrance, pledge or other commitment or disposition.
r. "Use Charge" means the fee as provided for in Section 5 herein.
3. Grant.
-----
a. Subject to the reservations, exceptions, exclusions, limitations,
conditions, and other provisions
Page 5 of 47
contained in this Permit, the Divisions of Mining and Lands hereby grant to FGMI
and its successors and assigns the following nonpossessory surface use rights in
and to the Permit Area for the term set forth in Section 4 below:
i. the right to use the Permit Area in accordance with the
-
Project Description and as authorized in the Plan of Operations and the
Reclamation Plan, to conduct Permit Operations in conjunction with Mining
Operations on State mining lease ADL 535408; and
ii. subject to Division approval of any necessary amendments to
--
the Reclamation Plan for the Permit Area and to Division approval during the
term of the Plan of Operations of either an appropriate amendment to the Plan of
Operations or an additional plan of operations for the Permit Area, the right to
use the Permit Area to conduct Permit Operations in conjunction with Mining
Operations on valid Mining Rights other than State mining lease ADL 535408.
A graphic summary depicting the activities anticipated under this
Permit, the initial Plan of Operations, and the initial Reclamation Plan is
attached hereto as Schedule 1. It is anticipated that this Schedule will be
updated as necessary to reflect any amendments to this Permit, the Plan of
Operations, and the Reclamation Plan.
b. All rights to use are subject to any valid existing rights within
the Permit Area and the requirement of
Page 6 of 47
reasonable multiple concurrent use as provided for in the Constitution of the
State of Alaska and AS 38.05.285; however, pursuant to 11 AAC 86.145, FGMI may
restrict public access to those areas of the Permit Area where such restriction
is necessary for public safety or to prevent unreasonable interference with
Permit Operations.
4. Term.
----
The term of this Permit commences on the Effective Date and shall
continue unless sooner terminated in accordance with the provisions of this
Permit, until completion of all requirements under and pursuant to:
a. the Plan of Operations or any other plan of operations approved
by the Division for lands within the Permit Area;
b. the Reclamation Plan;
c. FGMI's obligation to convey the previously reserved mineral
rights to the patented mining claims pursuant to the Agreement to Convey
attached hereto as Exhibit H; and
d. that portion of the Solid Waste Disposal Permit issued by the
Alaska Department of Environmental Conservation concerning closure of the
tailings impoundment.
5. Use Charge.
----------
a. On or before the close of business on the Effective Date of this
Permit and annually thereafter on or before the Effective Date for so long as
this Permit is in
Page 7 of 47
effect, in order to continue this Permit in effect, FGMI shall pay a Use Charge
as follows:
i. The annual Use Charge for the first five years hereunder
-
shall be the rental value of the land, without improvements installed or
constructed by FGMI, calculated based on the appraised value determined by an
appraisal of the Permit Area to be carried out at FGMI's expense by an
independent appraiser selected by FGMI from an approved list of appraisers
provided by the Division of Land and in accordance with the additional appraisal
instructions issued by the Division of Land attached hereto as Exhibit B. The
initial Use Charge is $102,000 per year pursuant to Division of Land Appraisal
2598-1.
ii. The Use Charge for each succeeding five year period (e.g.,
--
starting in the sixth year of this Permit, the eleventh year, etc.) hereunder
shall be the rental value of the land, without improvements installed or
constructed by FGMI, calculated based on the current appraised value determined
by an appraisal of the Permit Area to be carried out at FGMI's expense by an
independent appraiser selected by FGMI from an approved list of appraisers
available from the Division of Land at least 90 days prior to each Effective
Date anniversary date upon which the Use Charge shall be adjusted and in
accordance with the additional appraisal instructions issued by the Division of
Land as updated, revised, and amended hereafter.
Page 8 of 47
iii. Upon permanent cessation or abandonment of Mining Operations
---
under the Plan of Operations or any other approved plan of operations, the Use
Charge for lands then within the Permit Area shall be reduced to a nominal
charge to reflect the substantial decrease in use of the Permit Area, which
nominal charge shall not exceed one percent (1%) of the appraised value the
lands within the Permit Area.
b. All payments to the State under this Permit must be made payable
to the Alaska Department of Revenue in the manner directed by the State and,
unless otherwise specified upon sixty (60) days notice to FGMI, must be mailed
to the following address:
Department of Natural Resources
Attention: Financial Services
P.O. Box 7036
Anchorage, Alaska 99510
or delivered to the following address:
Department of Natural Resources
3601 C Street, Suite 200
Anchorage, Alaska
c. Failure to pay the Use Charge constitutes a material breach of
this Permit which shall result in termination unless cured as provided in
Section 18 herein.
6. Materials within Permit Area.
----------------------------
a. FGMI shall not sell or remove from the Permit Area for use
elsewhere any timber, waste rock, stone, gravel, peatmoss, topsoil, or any other
material valuable for building or
Page 9 of 47
commercial purposes. Such material may be used within the Permit Area for or in
connection with Permit Operations. In developing construction plans and in
actual extraction of material, FGMI shall include an assessment of the potential
for incorporating borrow sites into the design of the water supply impoundment.
b. The Project Description anticipates both the use of material in
construction of impoundments and the permanent storage of material such tailings
and rock derived from the mine pit within the Permit Area during and as part of
Permit Operations, as generally depicted in the map attached hereto as Exhibit
C. The parties recognize that such use and storage result in benefits to all
parties, and therefore, the parties agree that the value, if any, of the right
to use such materials within the Permit Area for or in connection with Permit
Operations comprises an undifferentiable component of the Use Charge provided
for in Section 5 of this Permit. The parties further recognize and agree that
due to the interrelated balance of benefits derived by each party within the
Permit Area arising from the use of materials throughout the Permit Area as
described in the Project Description, any value attributable to the use of
materials is neither apportionable within the Permit Area for any purpose nor
allocable to any part of the Permit Area for any purpose. In the event of a
reconveyance by the State of the federal patented mining claims that are the
subject of the Agreement to Convey (attached as Exhibit H hereto), any materials
derived from state
Page 10 of 47
lands other than said federal patented mining claims and placed on said federal
patented mining claims must either be removed from said claims by FGMI and
placed on other state lands prior to said reconveyance or paid for at the time
of said reconveyance by FGMI at the then appraised value.
c. All timber on the Permit Area that will be disturbed due to
Permit Operations shall be:
i. used for Permit Operations in or on the Permit Area;
-
ii. chipped and mulched by FGMI for use as a soil amendment for
--
incorporation into topsoil stockpiles and other suitable growth medium for the
purposes of enriching growth medium stockpiles, enhancing interim reclamation,
or increasing the resources to reclaim the mined area at closure, or upon
Division approval in consultation with State Division of Forestry, otherwise
incorporated into the soil; or
iii. after consultation with the State Division of Forestry and
---
where determined by FGMI to be of suitable size and located in affected areas
that are easily accessible, felled, limbed, bucked into log lengths, and decked
in areas easily accessible to the public for collection of firewood free of
charge.
7. Reclamation Bond.
----------------
a. Prior to commencement of construction or Permit Operations
resulting in land disturbance and prior to January 1
Page 11 of 47
of each subsequent year, FGMI shall furnish to the Division a reclamation bond
which meets the requirements and standards of AS 27.19, the regulations
thereunder and the Reclamation Plan, securing FGMI's performance of the
Reclamation Plan excepting only the areas the reclamation of which is
specifically covered by a bond required by the State Department of Environmental
Conservation Solid Waste Disposal Permit issued for the Permit Area. FGMI, for
itself, its assigns and subrogees specifically waives any right to challenge the
amount of the bond based on the bond amount exceeding seven hundred and fifty
dollars ($750) per mined acre.
b. The reclamation bond amount for the first five years of this
Permit shall be mutually agreed upon prior to issuance of this Permit.
Thereafter, the reclamation bond amount shall be redetermined at intervals and
for intervals of no more than five years. At least 90 days prior to the
expiration of a reclamation bond interval, FGMI shall supply to the Division all
relevant information concerning FGMI's operations and reclamation planned for
the Permit Area for the succeeding interval. The Division shall notify FGMI of
the bond amount for the succeeding interval at least 45 days prior to the
expiration of the current bond interval.
c. FGMI shall provide evidence of bond renewal or a surety's
commitment for a new bond no later than 15 days prior to the expiration of the
existing bond. Failure to provide such
Page 12 of 47
evidence of renewal or commitment timely is a breach of this Permit.
8. Insurance.
---------
a. During the term of this Permit, FGMI shall maintain the following
policies of insurance written by insurance companies with a financial rating of
"Very Good" as rated in the most recent edition of Best's Insurance Reports or
the equivalent of that rating as approved and accepted by the State, and be
authorized to provide insurance in Alaska.
i. Commercial General Liability insurance with a combined
- --------------------------------------
single limit (including umbrella liability coverage) of not less than Twenty-
five Million Dollars ($25,000,000.00) per occurrence/annual aggregate, which
shall include, but not be limited to: Premises and operations, Independent
Contractors, Owners and Contractors Protective, Products/Completed Operations,
Contractual including the indemnification clauses in Section 20, Explosion,
Collapse and Underground Property Damage, Personal Injury, Incidental
Malpractice and Errors and Omissions Coverage.
This insurance shall insure FGMI and the State against claims which
may arise out of, or result from FGMI's operations related to the Permit Area
whether such operations be conducted by FGMI or by their contractors, or
subcontractors, or by anyone directly or indirectly employed by either of them,
or by anyone for whose acts any of them may be liable. This insurance shall be
considered to be primary of any other insurance carried by the
Page 13 of 47
Division through self-insurance or otherwise. This insurance shall also contain
a "cross liability" or "severability of interest" clause or endorsement. The
State shall be named as additional insured on all FGMI insurance policies
covering the Permit Area and on all insurance policies taken out and maintained
by all contractors and subcontractors under their contracts with FGMI, or
appropriate waivers of subrogation in favor of the State must be obtained with
respect to all such insurance policies to effect the same purpose.
ii. Auto Liability insurance with a combined single limit
-- ------------------------
(including umbrella liability coverage) of not less than Twenty-five Million
Dollars ($25,000,000.00) per occurrence/annual aggregate, which shall include,
but not be limited to: All Owned, Non-owned and Hired vehicles while used both
on and away from the Permit Area.
This insurance shall be considered to be primary of any other
insurance carried by the Division through self insurance or otherwise. This
insurance shall also contain a "cross liability" or "severability of interest"
clause or endorsement. The State shall be named as additional insured.
iii. Professional Liability Insurance providing coverage for all
--- --------------------------------
errors and omissions or negligent acts of any design/project professional
involved in the Permit Area with coverage limits of not less than Twenty-five
Million Dollars ($25,000,000) per claim and project aggregate with an extended
Page 14 of 47
discovery period for a minimum of five years after the Division of Water/Dam
Safety issues its Certificates of Operation for each dam within the Permit Area.
iv. Statutory Alaska Workers' Compensation and Employer's
-- -----------------------------------------------------
Liability Insurance with a limit of not less than Ten Million Dollars
- - -------------------
($10,000,000.00) in compliance with the laws of the State, and, where
applicable, insurance which complies with any other statutory obligations,
whether Federal or State, pertaining to the compensation of injured employees,
and including Voluntary Compensation. The Worker's Compensation Insurance shall
contain a waiver of subrogation clause in favor of the State.
v. Pollution Liability Insurance if available at reasonably
- -----------------------------
cost with combined single limits not less than Twenty-five Million Dollars
($25,000,000.00) per occurrence for any claim arising out of or related to any
event or happening directly or indirectly caused by or resulting from the
dispersal, discharge, escape, release, removal or saturation of smoke, vapors,
soot, fumes, acids, alkalis, toxic chemicals, liquids, gasses, contaminants or
pollutants into the atmosphere, or in, onto, upon or into the surface or
subsurface of soil, water or watercourses, objects, or any tangible or
intangible matter, whether sudden and accidental or gradual.
vi. All Risk Property Insurance (including earthquake and
-- ---------------------------
flood), including business interruption, on the
Page 15 of 47
dam structure, buildings, and equipment on or affixed to or otherwise connected
to the Permit Area, in such amounts and with such deductibles as under good
business practices are ordinarily provided for on similar buildings and
equipment, but in no event in an amount less than the replacement value of the
all insurable structures, buildings, improvements, and equipment on or in the
Parcel Area. During the course of construction, FGMI shall provide or cause the
contractor to provide "All Risks" Builders' Risk Insurance to the full value of
the project.
b. All required insurance policies with endorsements must be
submitted to the Division for approval. The Division shall approve or
disapprove the policies and endorsements within thirty (30) days of receipt by
the Division. Certificates of Insurance (or certified copies of the policies,
if requested by one of the parties) shall be provided to the Division. The
certificates shall provide that thirty (30) days advance written notice by
certified mail will be given the Division before cancellation or material change
in the coverage.
c. The requirements for insurance coverages of the kinds and with
the limits stated in this Section shall not be construed as a representation
that such insurance coverage is adequate or limits FGMI's liability.
d. Required insurance is subject to annual review and adjustment by
the Division, which may require reasonable changes based on changes in risks.
FGMI shall be provided with a written
Page 16 of 47
explanation for any change and may appeal any change pursuant to 11 AAC 02 et
--
seq.
- - ---
e. All Property insurance policies shall contain a waiver of
subrogation in favor of the State who shall also be named as a loss payee on any
loss settlement paid. FGMI shall be obligated to pay all deductibles.
9. Commencement of Permit Operations.
---------------------------------
a. No particular Permit Operation shall commence in or on the Permit
Area until:
i. the Plan of Operations and the Reclamation Plan are approved
-
by the Division;
ii. the initial reclamation bond is received and approved by the
--
Division;
iii. all required certificates and proofs of insurance are
---
received and approved by the Division; and
iv. any and all other permits or authorizations necessary for
--
said particular Permit Operation are received by FGMI.
b. Before FGMI commences construction of the tailings impoundment
and water supply impoundment as described in the Project Description, FGMI shall
enter into an Agreement for Funding Post-Reclamation Obligations as shown in
Exhibit D with the Division and any other relevant parties. Such agreement
shall require that FGMI provide a fund to establish a perpetual endowment to
provide for post-closure management, repair, and
Page 17 of 47
maintenance of the proposed water supply impoundment dam, the Solo Creek
causeway, the tailings impoundment dam, and any associated permits or
authorizations. Such agreement shall be a material part of the Reclamation
Plan. Notwithstanding the foregoing, nothing in this Permit, the Agreement for
Funding Post-Reclamation Obligations, the Reclamation Plan, or any other permit
or authorization may be construed to obligate FGMI to leave the water supply
impoundment in place if this Permit
i. is declared void or invalid,
-
ii. expires, or
--
iii. is terminated, except where such termination is caused by a
---
breach by FGMI,
prior to both the issuance of all permits and authorizations necessary to
conduct all Mining Operations contemplated in the Project Description and any
discharge of tailings into the tailings impoundment.
c. Prior to beginning construction, and as a requirement of the plan
of operations, FGMI shall provide site development plans and a construction
schedule for review by the Division. The facilities to be reviewed shall be
limited to improvements which could have an impact on the long-term value of the
State's land. Areas of specific interest include: roads, grading, drainageways,
waste dumps, tailing disposal facilities, buried utilities, environmental
controls or facilities which are not specifically being reviewed by other
agencies, soil or rock
Page 18 of 47
cuts or embankments which are not being reviewed by the Division of Water (dam
safety), the general layout of the surface plant, and all geotechnical,
hydrologic, and other engineering reports providing the basis for design of the
above facilities. The plans provided shall be those intended for construction
of the specified facilities. If significant changes are made in the design
drawings before or during construction, revised drawings shall be submitted for
review. Construction plans and reports submitted for review shall be prepared
in accordance with state law.
d. The extent of review by the Division shall normally be limited to
assuring general conformance with terms of this Permit, the Mining Rights, the
Reclamation Plan, the Plan of Operations, an environmental audit pursuant to
section 12 herein, and other appropriate decision documents. This review is not
intended to consist of detailed technical review of any facility. However, the
Division may require additional information, if deemed necessary prior to
authorizing construction. There will normally be no review of detailed
architectural, structural, process, mechanical, or electrical plans. It is
understood that FGMI project design and construction documents will conform to
all applicable state and local codes, regulations, and statutes. Compliance
also includes plan submittal to the State Fire Marshal, mechanical department,
and electrical department when required by law.
Page 19 of 47
e. Following review, the Division will advise FGMI in writing that
they are authorized to proceed with construction. FGMI shall not proceed with
construction prior to receiving appropriate authorization. An authorization for
construction may be issued by the Division for individual or groups of project
components, although complete submittals are desirable, when possible. The
final requirements under this section shall be coordinated with FGMI and other
appropriate agencies.
f. Prior to beginning ore processing, FGMI shall submit
certification(s) by an engineer or engineers that the roads, grading,
drainageways, tailings disposal facilities, buried utilities, and site
preparation for waste dumps were all constructed or prepared in accordance
with the plans which were submitted to the Division for review. All
certifications shall be made by properly licensed engineers. Representatives
of the Division shall periodically inspect project progress. If deviations
from the plans or schedule are observed, the Division representative shall
advise FGMI of the deviations and FGMI shall take appropriate action to
correct the deviations. Following completion of construction and any other
permit requirements, the Division shall issue an authorization to operate.
10. Maintenance; Obligations; Breach.
--------------------------------
a. FGMI shall maintain the Permit Area in a reasonably neat
and clean condition. FGMI shall maintain, in good condition, all portions of
the Permit Area, including but
Page 20 of 47
not limited to, all Facilities and all of FGMI's personal property located in or
on the Permit Area. In addition to the obligations set forth in this Permit,
FGMI shall take all prudent precautions to prevent Pollution of the groundwater,
surface water, air, and land, to prevent or suppress grass, brush, or forest
fires, and to prevent erosion or destruction of the lands, features, and
resources within the Permit Area.
b. FGMI shall conduct all Permit Operations in compliance with the
Plan of Operations or other plan of operations approved by the Division for
lands within the Permit Area, the Reclamation Plan, all other permits or
authorizations issued by local, state, and federal agencies, and all applicable
laws, statutes, regulations, and ordinances including but not limited to
environmental statutes and regulations.
c. Failure to commence to cure a breach of any obligation set forth
in this Permit upon notice from the Division and within the time allowed after
notice by this Permit constitutes a material breach of this Permit and may
result in termination.
11. Inspection and Entry by the Division.
------------------------------------
a. FGMI shall permit the Division or its agents to enter into and
upon the Permit Area and Facilities at all reasonable times without notice,
subject to such safety and security procedures as FGMI may from time to time
adopt, for the purpose of inspecting the Permit Area and the activities thereon
Page 21 of 47
including but not limited to activities involving Hazardous Substances.
b. Each year this Permit is in effect, during the third (3rd)
calendar quarter, FGMI shall meet with the Division to provide an update and
briefing describing the activities of the year immediately preceding and
activities planned for the immediately upcoming year with a copy of the update
and briefing materials to be provided ten (10) days prior to the meeting. At
the Division's discretion, this information may be made public in the context
and format mutually agreed upon by FGMI and the Division.
c. At least once a year, upon prior written notice, the Division
will formally inspect the Permit Area and all activities thereon.
d. At any time upon the Division's written request, FGMI shall
promptly make any and all records, documents, or other information required to
be kept or maintained by law, regulation, or ordinance available to the Division
for inspection and copying as reasonably required by the Division to determine
FGMI's compliance with local, state and federal laws applicable to Permit
Operations.
12. Environmental Audit.
-------------------
a. Prior to and in preparation for each scheduled update of the Plan
of Operations and any other approved plan of operations, prior to and in
preparation for termination of this
Page 22 of 47
Permit, and as partial satisfaction of the requirements of section 7 of the
Agreement for Funding Post-Reclamation Obligations executed by the parties
hereto, an environmental audit shall be conducted at FGMI's expense. The
Division and FGMI shall mutually select a qualified auditor. To qualify, the
auditor must:
i. certify that no relationship exists through professional,
-
financial, or personal reasons that could bias the auditor's judgment or the
audit results and that no self-serving interest in the outcome of the audit
exists;
ii. demonstrate a commitment to professional and ethical standards
--
generally accepted in the environmental auditing profession; and
iii. demonstrate a professional proficiency in the specific areas of
---
hardrock mining, associated environmental issues, and current federal/state
regulatory programs and climate, and an appropriate working knowledge and
appreciation of management principles, quantitative methods, and computerized
information systems.
b. The scope of the audit to be conducted during the fifth (5th)
year of this Permit will be to determine if both the Environmental Management
Systems of FGMI and regulatory controls of FGMI provide reasonable assurances
that environmental objectives are being met and that the systems and controls
are functioning as intended. The scope of subsequent audits may be
Page 23 of 47
revised as mutually agreed upon prior to initiation of each audit to address
specific issues or objectives not previously identified in Environmental
Management Plans of FGMI or permit terms. Identification of such issues or
objectives may be accomplished through a joint FGMI/State public meeting prior
to the audit.
c. The audit will be an objective, systematic, and documented review
of the conditions, operations, and practices related to environmental
requirements and environmental management of the Permit Operations conducted
under this Permit. The objectives of the audit will be to evaluate:
i. FGMI's compliance with all federal, State and local permits
-
and authorizations;
ii. FGMI's compliance with internal environmental policies,
--
plans, and procedures, and established environmental management systems and
policies, an initial list of which is attached hereto as Exhibit E and is
subject to updating, amendment, or revision upon mutual agreement of the
parties;
iii. the reliability and integrity of information relating to
---
environmental reporting and compliance;
iv. the adequacy of State oversight to protect State resources;
--
and
v. those conditions, operations, and priorities required by the
-
Department of Fish and Game permits.
Page 24 of 47
d. The audit will evaluate, at a minimum and not limited to, all
items listed in Section 1.12 of the Department of Environmental Conservation
Solid Waste Disposal Permit regarding the facility audit required for that
permit.
e. The State and FGMI will use the audit results to assist in
updating, renewing, or issuing authorizations and permits, in updating
policies, plans, and procedures, and in determining compliance with permits and
authorizations.
13. Taxes and Liens on Permit Area.
------------------------------
a. During the term of this Permit, FGMI shall be solely responsible
for paying any and all real property taxes, assessments, and similar charges
levied by the State, any municipality, or any other governmental entity upon the
interest in the Permit Area granted to FGMI by this Permit. FGMI shall have the
right to contest, in courts or otherwise, the validity or amount of any such
taxes, assessments, or charges if FGMI deems them to be unlawful, unjust,
unequal, or excessive, or to undertake such other steps or proceedings as FGMI
may deem reasonably necessary to secure a cancellation, reduction, readjustment,
or equalization thereof before FGMI shall be required to pay them, but in no
event shall FGMI permit or allow its interest in the Permit Area granted by this
Permit to be lost or the State's title to the Permit Area to be clouded or
encumbered as a result of the nonpayment of any such taxes, assessments, or
charges.
Page 25 of 47
b. During the term of this Permit, FGMI shall be solely responsible
for paying for all labor and services performed upon or materials furnished to
the Permit Area by, for, or at the request of FGMI. FGMI shall keep its
interest in the Permit Area granted by this Permit and the State's title to and
interest in the Permit Area free and clear of any and all mechanic's, mining,
labor, or materialmen's liens arising out of or resulting from the performance
of labor or services upon or the furnishing of materials to the Permit Area by,
for, or at the request of FGMI, except those liens arising by operation of law
for which payment is not yet due. FGMI shall have the right to contest, in the
courts or otherwise, the validity or amount of any such lien that may be filed.
If and when requested by the State, FGMI shall post and record notices of
nonresponsibility for the benefit of the State pursuant to AS 34.35.065 and AS
34.35.150 and any other similar applicable laws.
c. During the term of this Permit, FGMI shall not allow the State's
title to or interest in the Permit Area to be encumbered by any judgments
entered by a court of law against FGMI or FGMI's agents or contractors. If a
lis pendens is filed arising from pending or actual litigation against FGMI or
its agents or contractors that encumbers or purports to encumber the State's
title to or interest in any lands within the Permit Area lands, FGMI shall
diligently and with best efforts seek to effect immediate removal of said lis
pendens.
Page 26 of 47
14. Temporary Closure.
-----------------
a. FGMI shall notify the Division in writing at least thirty (30)
days prior to any planned Temporary Closure of ninety (90) days or longer. FGMI
shall notify the Division of any unanticipated Temporary Closure expected to
last ninety (90) days or more within ten (10) days of the first day of the
Temporary Closure. The notice shall state the nature and reason for the
Temporary Closure, the anticipated duration of the Temporary Closure, and any
event which would reasonably be anticipated to result in the resumption or
abandonment of Mining Operations and Permit Operations. Mining Operations and
Permit Operations must resume for not less than ninety (90) consecutive days in
order to terminate the running of the Temporary Closure. If a Temporary Closure
extends beyond three (3) years, the Division may deem Mining Operations and
Permit Operations to be permanently abandoned or ceased, and whereupon final
Reclamation must commence unless otherwise agreed by the parties.
b. FGMI shall ensure that the Permit Area is maintained in a safe
and secure condition during a Temporary Closure and FGMI shall not allow the
Permit Area to be degraded or eroded during or as a result of the Temporary
Closure.
15. Abandonment or Cessation of Mining. Not later than 90 days after
----------------------------------
the permanent cessation or abandonment of Mining Operations or Permit
Operations, FGMI shall notify the Division of its intent to cease said
Operations.
Page 27 of 47
16. Post-Permit Land Conditions. The parties agree that the
---------------------------
conditions to which lands in the Permit Area must be returned after cessation
of Mining Operations and Permit Operations shall be as provided for in the
initial Reclamation Plan as conditionally approved by the Division and
attached hereto as Exhibit F. Because such conditions have formed and will
continue to form a material basis for the planning, design, and conduct of the
Mining Operations and Permit Operations described in the Project Description
and approved in the initial Plan of Operations and initial Reclamation Plan,
any additional cost of incorporating and effecting a significant change in
such agreed upon post-Permit land conditions, including but not limited to
significant topographic or slope changes not necessary to meet the objectives
set forth in the initial Reclamation Plan, such that the Reclamation Plan must
be modified to accommodate such change, where such change does not arise or
result from a material change in facts or conditions as now understood by the
parties or a change in law or regulation, shall be paid for by the requesting
party.
17. Removal and Reclamation.
-----------------------
a. The removal of all Facilities constructed or placed on the Permit
Area shall be in accordance with the Reclamation Plan. Unless otherwise
provided in the Reclamation Plan, FGMI must reclaim land concurrently with the
conduct of Mining Operations and Permit Operations.
Page 28 of 47
b. All reclamation not accomplished concurrently must be initiated
immediately upon a determination by the Division that a Temporary Closure has
resulted in permanent abandonment or cessation pursuant to Subsection 14(a)
herein, or within three years after permanent abandonment or cessation of Mining
Operations, whichever occurs first.
18. Termination for Breach.
----------------------
a. If FGMI shall materially breach any of the terms, covenants, or
conditions contained herein or attached hereto and said breach, except as
provided in Subsections 18(b) and 18(c) herein, shall not be cured to the
satisfaction of the Division within sixty (60) days after written notice of
such breach has been personally served or mailed by certified mail to FGMI and
any assignee of this Permit for security purposes of which the Division has
been previously notified by certified mail, the Division may terminate this
Permit by written notice.
b. If a material breach, except as provided in Subsection 18(c)
herein, cannot be reasonably cured within sixty (60) days of the written notice,
FGMI shall notify the Division within fourteen (14) calendar days of its receipt
of the written notice that the breach cannot be cured within sixty (60) days and
shall notify the Division of FGMI's timetable to cure the breach. The
timetable for cure is subject to Division approval, which approval shall not
be unreasonably withheld. FGMI shall commence to cure the breach within thirty
(30) days of the notice of
Page 29 of 47
breach and diligently and in good faith continue to cure the breach to the
satisfaction of the Division.
c. If FGMI shall fail to timely pay the Use Charge and said failure
is not cured within ten (10) days after written notice of such failure has been
personally served or mailed by certified mail to FGMI and any assignee of this
Permit for security purposes of which the Division has been previously notified
by certified mail, the Division may terminate this Permit by written notice. If
a good faith attempt to pay the Use Charge is made and the payment is deficient
solely due to the amount paid being less than the amount actually due, FGMI
shall have thirty (30) days to cure such default after notice is given as
described in this Section.
d. Notice of breach or failure under this Section shall specify
the default and the applicable permit provision(s) and shall demand that FGMI
cure the default to the satisfaction of the Division within the applicable
timeframe. No notice shall be deemed a forfeiture or termination of this Permit
unless the Division so states in the notice.
e. FGMI may request, in writing, a hearing within fourteen (14)
calendar days of FGMI's receipt of a notice of termination. Upon receipt of
FGMI's request for a hearing, the time to cure the breach or breaches cited as
the cause for termination shall be tolled until the Director issues a final
decision on the termination for breach. Such tolling shall not
Page 30 of 47
affect any other responsibilities, obligations, or performance under this Permit
or any other permit or authorization affecting the Permit Area.
f. The Division will hold the hearing within ten (10) business days
of the Division's receipt of FGMI's request unless mutually agreed otherwise by
the parties. The hearing shall be conducted informally and recorded
electronically. The parties may appear in person or through counsel, present
evidence and witnesses in their own behalf, and cross-examine opposing
witnesses. The Director's decision may be appealed pursuant to 11 AAC 02 et
--
seq.
- - ---
g. Upon termination of this Permit, the parties shall be relieved of
further rights, obligations, and liabilities under this Permit except for
rights, obligations and liabilities incurred or accrued prior to the date of
termination. The termination of this Permit shall not affect FGMI's obligations
under the Plan of Operations or any other plan of operations, the Reclamation
Plan, or any other permit, lease, or authorization issued by the Division or
other agency of federal, state, or local government. If this Permit is
terminated prior to completion of Reclamation, FGMI shall complete the
requirements of the Plan of Operations or other approved plan of operations, the
Reclamation Plan, and such other requirements as the Division may reasonably
require to protect the health, safety, and welfare of the public.
Page 31 of 47
19. Surrender of Permit Area.
------------------------
a. Simultaneous with FGMI's receipt of the Division's written
concurrence that all Permit obligations and responsibilities have been
satisfied, FGMI shall deliver a deed in the form shown in Exhibit I hereto
conveying to the State all rights previously reserved by FGMI in and to the
patented federal mining claims within the Permit Area described in Exhibit A
hereto, and shall surrender the Permit Area. The parties agree that conveyance
of such previously reserved rights is necessary to assure the continued
effectiveness of the Permit Area reclamation as approved in the Reclamation
Plan.
b. Upon termination of this Permit for breach, FGMI shall cease all
Permit Operations and shall be permitted on the Permit Area solely for
Reclamation and timely removal of FGMI personal property. FGMI's obligation to
deliver a deed in the form shown in Exhibit H hereto conveying the rights
previously reserved by FGMI in and to the patented federal mining claims
within the Permit Area described in Exhibit A shall not terminate upon
termination of this Permit for breach and FGMI shall timely convey said rights
upon termination for breach.
20. Indemnification.
---------------
(a) FGMI assumes all responsibility, risk and liability for all
Permit Operations and other activities conducted by FGMI in connection with the
project described in the Project Description, including construction,
reclamation, and
Page 32 of 47
environmental and Hazardous Substance risks and liabilities, whether accruing
during or after the term of this Permit. FGMI shall defend, indemnify, and hold
harmless the State and its employees from and against any and all suits, claims,
actions, losses, costs, penalties, and damages of whatever kind or nature,
including all attorney's fees and litigation costs, arising out of, in
connection with, or incident to any act or omission by or on behalf of FGMI on
the Permit Area, including acts or omissions of independent contractors, unless
the sole proximate cause of the injury or damage is the negligence or willful
misconduct of the State or anyone acting on the State's behalf. Within 15 days
FGMI shall accept any such cause or action or proceeding upon tender by the
State. This indemnification shall survive the termination of the Permit.
(b) FGMI shall require that all indemnities obtained from all
contractors and subcontractors on the Permit Area be extended to include the
State as an additional named indemnitee. FGMI shall further require that the
State be named as an additional insured on all insurance policies taken out and
maintained by all contractors and subcontractors under their contracts with
FGMI, or that appropriate waiver of subrogation in favor of the State be
obtained with respect to all such insurance policies to effect the same purpose.
Page 33 of 47
21. Guaranty.
--------
a. FGMI shall cause AGI to guarantee FGMI's performance of this
Permit, including the Reclamation Plan and all permits and authorizations issued
by federal, state and local governments. The guaranty shall be in a form and
substance approved by the Division.
b. FGMI shall cause AGI to provide to the Division an opinion of
counsel dated the day FGMI executes the permit and satisfactory in form and
substance to the Division stating:
i. AGI is a corporation duly organized, validly existing and in
-
good standing under the laws of Delaware;
ii. AGI has full power and authority to execute said guaranty of
--
FGMI's performance of this Permit, which power and authority have been duly
authorized by all proper and necessary corporate action, and the execution,
delivery and performance by the guarantor of its obligations under this Permit
do not require any shareholder approval, and do not contravene any law,
regulation, rule or order binding upon it or its Articles of Incorporation or
Bylaws; and
iii. AGI's execution of said guaranty of the performance of
this Permit when duly executed and delivered, will constitute the valid, legal
and binding obligation of AGI, enforceable in accordance with its terms,
subject to (1) applicable bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally;
Page 34 of 47
(2) laws imposing duties to act in good faith or in a commercially reasonably
manner, and (3) laws respecting or affecting the procedural or remedial
provisions of this Permit.
c. FGMI shall cause AGI to provide to the Division on the date of
execution of this Permit a copy of AGI's most recent balance sheet but dated not
more than one year prior to the date of execution of this Permit. The balance
sheet must be certified by a reputable accounting firm authorized to do business
in the state of AGI's main place of business or state of incorporation,
including certifications that:
i. The balance sheet fairly presents the financial condition
-
of AGI at such date in accordance with generally accepted accounting
principles; and
ii. There are no liabilities, direct or indirect, fixed or
--
contingent, of AGI as of the date of such balance sheet which are not
reflected therein or in the notes thereto other than liabilities or
obligations not material in amount which are not required to be reflected in a
corporate balance sheet prepared in accordance with generally accepted
accounting principles.
22. Modifications.
-------------
a. Any request by FGMI for modification of this Permit must be made
by written application to the Division. The application must contain a detailed
description, justification, maps, plats, and cross-sections as necessary, and
copies of
Page 35 of 47
concurrent applications for modification of the Plan of Operations or other
approved plan of operations, Reclamation Plan, and any other affected permits or
authorizations. The Division may request further information and data based on
the individual modification requested. For any major or significant
modification to this Permit, including but not limited to an increase in Permit
Area acreage, a decrease in Permit Area acreage greater than forty (40) acres
cumulative, or any change in use, the Division, at its option and in its
discretion or at FGMI's request, may give public notice, solicit public comment,
and hold public hearings. No modification is effective until approved in
writing by the Division.
b. Any revisions, changes, or updates to other permits or
authorizations issued by federal, state, or local governments that affect the
Permit Area are automatically incorporated into the responsibilities,
requirements and obligations of this Permit unless otherwise provided in writing
by the Division.
23. Conveyance by State.
-------------------
a. The State may convey all or a portion of its ownership of the
Permit Area at any time to any entity allowed by law. Notice of such conveyance
shall be given by certified mail to FGMI no later than thirty (30) days prior to
such conveyance. If all or a portion of the State's ownership of the Permit
Area is conveyed or transferred to the future Mental Health Trust
Page 36 of 47
Authority to be created pursuant to SLA 1991 ch. 66 (not yet effective) or any
other law, or to any other entity, the conveyance shall identify this Permit as
an encumbrance on the interest conveyed and said conveyance thus shall be
subject to this Permit.
b. Neither parties' rights, obligations, or responsibilities under
this Permit shall be increased or decreased by virtue of any conveyance unless
mutually agreed otherwise by the parties. Upon any conveyance of the Permit
Area by the State the provisions of AS 38.05 and 11 AAC that are in effect on
the date of such conveyance and which govern the Permit and the conduct of
Permit Operations hereunder shall be deemed to be incorporated into this Permit
as if fully set forth herein. Notwithstanding the State's conveyance of all or
a portion of the Permit Area to the future Mental Health Trust Authority to be
created pursuant to SLA 1991 ch. 66 (not yet effective) or any other law, or to
any other entity, a hearing pursuant to Subsection 18(f) of this Permit shall be
before the Division Director or his or her designee.
24. Transfer by FGMI.
----------------
a. FGMI may transfer all or part of its interest in, to, or under
this Permit solely as provided in this Section.
b. FGMI may Transfer all or part of its interest in, to, or under
this Permit only in conjunction with a similar Transfer of all or part of its
interest in, to, or under some or
Page 37 of 47
all of the valid Mining Rights to which its interest in, to, or under this
Permit is appurtenant.
c. No Transfer permitted by this Section shall, as between the State
and FGMI, relieve FGMI of any liability, whether accruing before or after such
Transfer, which arises out of Permit Operations conducted prior to such
Transfer.
d. FGMI may Transfer less than its entire undivided interest in, to,
or under this Permit if such Transfer covers all lands within the Permit Area,
but FGMI may not Transfer any interest in, to, or under this Permit that covers
less than all of the lands within the Permit Area.
e. Except for a Transfer pursuant to Subsection 24(g) below, no
Transfer of any interest in, to or under this Permit is effective without the
express written approval of the Division. The Division is not bound by any
Transfer made without its express written approval.
f. The Division Director will approve a Transfer of this Permit or
any interest therein if this Permit is in good standing and the party to whom
FGMI proposes to Transfer this Permit or any interest therein:
i. is qualified to hold interests in State Mining Rights under
-
AS 38.05.190;
ii. is qualified to assume or acquire all other permits and
--
authorizations necessary to conduct Mining Operations and Permit Operations;
Page 38 of 47
iii. is not on notice of default by any State agency on any
---
lease, reclamation bond, or other permit within the State, and is not subject
to an enforcement action, of which the Division Director has knowledge, for
default or breach on any mining lease, reclamation bond, permit, or similar
authorization issued by an entity other than the State, including the United
States and other states;
iv. has committed in writing to be bound by this Permit to the
--
same extent as FGMI; and
v. provides to the Division all proofs of insurance, bonds, or
-
undertakings required by this Permit, including any insurance, bonds, or
undertakings required under the Plan of Operations or any other approved plan of
operations, the Reclamation Plan, or other permit or authorization then in
effect relating to Permit Operations.
g. If the Transfer is the grant of a security interest by deed of
trust, mortgage, pledge, lien or other encumbrance in or on all or part of
FGMI's interest in, to, or under this Permit to secure a loan or other
indebtedness of FGMI in a bona fide transaction, such security interest shall be
subject to the terms of this Permit. FGMI must notify the Division by certified
mail of any security interest granted in FGMI's interest in, to, or under this
Permit within ten (10) days of the granting of said security interest. Until
such notice is received, the Division is under no obligation to send any notices
Page 39 of 47
relating to this Permit to the security interest holder. Upon any foreclosure
or other enforcement of a security interest granted in compliance with this
subsection, the acquiring third party shall, upon compliance with the
requirements of Subsection 24(f) above, be deemed to have assumed the position
of FGMI with respect to this Permit.
h. In the event of a Transfer by FGMI of less than its entire
undivided interest in, to, or under this Permit, FGMI and its transferee shall
act and be treated as one party, except that the Division shall be required to
deliver copies of all notices permitted or required under this Permit to all
parties holding interests in this Permit pursuant to Transfers which have been
approved by the Division as provided in this Section or of which the Division
has received notice pursuant to Subsection 24(g) above.
i. Transfer of all or any of FGMI's interest in, to, or under this
Permit does not relieve AGI or any succeeding guarantor of the obligations of
the guaranty unless the requirements for such Transfer of the guaranty as
provided in the AGI guaranty attached hereto as Exhibit G have been satisfied.
25. Corporate Authority; Authorized Representatives.
-----------------------------------------------
a. FGMI shall deliver to the Division upon the execution of this
Permit a certified copy of a resolution of its board of directors authorizing
execution of this Permit and
Page 40 of 47
naming the officers that are authorized to execute this Permit on behalf of the
corporation.
b. The Division Director and the person executing this Permit on
behalf of FGMI will be the authorized representatives of their respective
principals for the purposes of administering and enforcing this Permit. The
State or FGMI may change the authorized representative or the address to which
notices to that representative are to be sent by a notice given in accordance
with Section 26 below. Upon commencement of Permit Operations, FGMI shall also
designate by name, job title, and address, an agent and alternate agent who will
be present in the State during all Permit Operations.
26. Notice.
------
a. All notices required or permitted under this Permit shall be in
writing and shall be given (a) by personal delivery to the respective addressee;
(b) by electronic communication, with the original paper document sent
immediately by registered or certified mail, return receipt requested, or (c) by
registered or certified mail, return receipt requested. All such notices shall
be sent to the following respective addresses:
The State:
---------
Director
Alaska Division of Mining
Department of Natural Resources
P.O. Box 107016
Anchorage, AK 99510-7016
Page 41 of 47
or:
3601 C Street, Suite 880
Anchorage, Alaska
or:
Facsimile: 907-563-1853
(Telephone: 907-762-2165)
FGMI:
----
Fairbanks Gold Mining, Inc.
P.O. Box 73726
Fairbanks, Alaska 99707-3726
or:
701 Bidwill Street
Fairbanks, Alaska
or:
Facsimile: 907-451-4305
(Telephone: 907-452-4653)
b. Any notice shall be effective and deemed delivered (i) if by
personal delivery, on the date of delivery if delivered during normal business
hours or on the next business day following delivery if not delivered during
normal business hours; (ii) if by electronic communication, on the day of
receipt at the office of the addressee if received during normal business hours
or on the next business day following receipt if not received during normal
business hours; and (iii) if solely by mail, on the day of actual receipt at the
address of the recipient if delivered by the postal service during normal
business hours or
Page 42 of 47
on the next business day following receipt if not delivered during normal
business hours.
27. Statutes and Regulations. This Permit is subject to all
------------------------
applicable federal and state statutes, including federal, state, and local
statutes, regulations, and ordinances in effect on the Effective Date, new
statutes, regulations, and ordinances enacted or promulgated after the Effective
Date, and changes to existing statutes and regulations made after the Effective
Date, to the extent constitutionally permissible.
28. Payment to Multiple Parties. In the event that payments
---------------------------
initially due to the Division under this Permit become payable to two or more
parties due to conveyance of lands within the Permit Area by the State, all
parties to whom payment is due shall execute and deliver to FGMI a document
executed by all of those parties designating the amounts of payment due each
party and the name and address of each party to whom to payment is due. Until
FGMI receives such designation, FGMI shall continue to make all payments to the
Division and FGMI shall have no responsibility to see to the division of
payments made to the Division in accordance with the provisions of this Section.
29. Nonpossessory Interest in Real Property. The rights granted to
---------------------------------------
FGMI by this Permit constitute a nonpossessory interest in real property in the
nature of an easement appurtenant to valid Mining Rights, granted for the term
provided in Section 4 of this Permit, but subject to termination upon a
Page 43 of 47
material breach of this Permit that is not cured in the manner provided in
Section 18 of this Permit. No estate in or to the lands within the Permit Area
is conveyed to FGMI by this Permit.
30. Denial of Warranty. The State makes no warranties whatsoever,
------------------
express or implied, including but not limited to any warranties regarding any
prior encumbrances on or conditions of the Permit Area, any warranties regarding
title to the Permit Area, any warranties regarding access to the Permit Area,
any warranties regarding quiet enjoyment of the Permit Area, or any warranties
regarding fitness of the Permit Area for any use. FGMI is not entitled to any
refund of prior Use Charge(s) paid which are excess due to deficiency in title.
31. Recording. Upon the execution, acknowledgment, and delivery of
---------
this Permit, FGMI at its sole cost may cause this Permit to be recorded in the
Fairbanks Recording District, State of Alaska.
32. Venue; Controlling Law. The venue for any appeal or civil action
----------------------
relating to this Permit shall be in the Fourth Judicial District, State of
Alaska. This Permit shall be interpreted and construed in accordance with the
laws of the State of Alaska.
33. Waiver or Forbearance. The receipt or acceptance of the Use
---------------------
Charge by the Division, with or without knowledge of any breach of the Permit by
FGMI, or of any default on the part of FGMI in the observance or performance of
any of the terms,
Page 44 of 47
conditions or covenants of this Permit, shall not be deemed to be a waiver of
any of the Division's rights concerning any other defaults unless the contrary
effect is expressed in writing and signed by the Division. Any waiver by the
Division of any default of FGMI's performance under this Permit must be in
writing and shall not be a waiver of any other default concerning the same or
any other provision of the Permit. No delay or omission in the exercise of any
right or remedy of the Division on any default by FGMI shall impair such right
or remedy or be construed as a waiver.
34. Severability. If any clause or provision herein contained shall
------------
be adjudicated to be invalid, it shall not affect the validity or effect of any
other clause or provision of this Permit, nor constitute any cause of action in
favor of either party as against the other.
35. Attorney's Fees. If either party commences a judicial proceeding
---------------
against the other party rising out of or in connection with this Permit, the
prevailing party shall be entitled to have and recover from the losing party
full reasonable attorney's fees and costs of suit.
36. Successors. This Permit and each and every provision therein
----------
shall be binding on and inure to the benefit of the parties and their
successors.
Page 45 of 47
DEPARTMENT OF NATURAL RESOURCES:
STATE OF ALASKA
By: /s/ Richard A. LeFebvre Date: Feb. 15, 1994
-------------------------------- -------------
Position: For Director
--------------------------
Division of Mining
STATE OF ALASKA
By: /s/ Richard A. LeFebvre Date: Feb. 15, 1994
------------------------------- -------------
Position: For Director
--------------------------
Division of Land
PERMITTEE:
FAIRBANKS GOLD MINING, INC.
a Delaware corporation
By: /s/ Kenneth R. Pohle Date: Feb. 15, 1994
---------------------------------- -------------
Its: President
---------------------------------
(Position)
Page 46 of 47
ACKNOWLEDGMENTS
State of Alaska )
) ss.
4th Judicial District )
------
The foregoing instrument was acknowledged before me this 15th day of
--
February, 1994, by Richard A. LeFebvre, in his capacity for Director, Division
- - -------- -------------------
of Land, Department of Natural Resources, State of Alaska.
/s/ Christopher C. Milles
----------------------------------
[Seal] Notary in and for
the State of Alaska
My commission expires: 1-31-95
-----------
State of Alaska )
) ss.
4th Judicial District )
------
The foregoing instrument was acknowledged before me this 15th day of
--
February 1994, by Richard A. LeFebvre in his capacity for Director, Division of
- - -------- -------------------
Mining, Department of Natural Resources, State of Alaska.
/s/ Christopher C. Milles
----------------------------------
[Seal] Notary in and for
the State of Alaska
My commission expires: 1-31-95
-----------
State of Alaska )
) ss.
4th Judicial District )
-----
The foregoing instrument was acknowledged before me this 15th day of
--
February 1994, by Kenneth R. Pohle the President of Fairbanks Gold Mining, Inc.,
- - -------- ---------------- ---------
a Delaware corporation, on behalf of the corporation.
/s/ Christopher C. Milles
----------------------------------
[Seal] Notary in and for
the State of Alaska
My commission expires: 1-31-95
-----------
Page 47 of 47