MINING LEASE AGREEMENT
THIS MINING LEASE AGREEMENT made and entered into this 19th day of
June, 1993, by and between DON W. FULLMER, whose
address is 1025 NORTH MAIN, FILLMORE, UTAH 84631, herein referred to as "Lessor"
or "Owner" and DANIEL H. ENGH, DENNIS S. ENGH whose address is 2340 EAST
GERMANIA CIRCLE, SANDY, UTAH 84093-1174, hereinafter referred to as "Lessee".
WITNESSETH:
WHEREAS, the owner is the sole owner, or the agent for the
association which is the sole owner of the unpatented mining claims listed
in Exhibit "A" of this agreement, hereinafte referred to as the "Leased
Property", and
WHEREAS, Lessee desires to lease the Leased Property, Owner and
Lessee hereby agree to the following (hereinafte referred to as the
"Agreement"):
WHEREAS, Lessor is owner of certain properties and property~
rights situated in Juab County, State of Utah, and more particularly
described in the attached Exhibit "A", incorporated by reference, and
hereinafter referred to as the "Leased Premises"; and
WHEREAS, Lessee desires to lease certain rights in and to the
Leased Premises which Lessor is willing to grant to Lessee;
NOW THEREFORE, in consideration of $100.00 paid by Lessee to Lessors
receipt of which is hereby acknowledged and the payments, covenants and
agreements hereinafter set forth the parties agree as follows:
1. The Leased Premises.
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The "Leased Premises" shall mean all of the property described in
Exhibit "A" attached hereto and made a part hereof, together with all of
the ores, minerals and materials thereon and thereunder, and all right,
title and all water, water rights, easements and rights of way now and
hereafter owned or held by Owner in, upon or under the said property, or in any
way pertaining thereto.
2. Warranties and Representations.
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Owner represents to Lessee: (1) that subject to the matters
specifically set forth in Exhibit "A," and subject to the matters set forth
below with respect to unpatented mining claims, Owner has the exclusive
possession of the Mining Claims and (2) that the Owner has the full right, power
and capacity to enter into this Lease upon the terms setforth herein. Since the
Leased Premises, as described in Exhibit "A" includes unpatented mining claims,
Owner represents and warrants to Lessee: (1) that Owner's title is subject to
paramount title of the United States of America and to the rights, if any, of
surface patentees; (2) that the acts of location performed by Owner on the
unpatented mining claims described in Exhibit "A" have been completed in
compliance with the laws of the State of Utah and of the United States of
America; and (3) that the Notice Of Intent To Hold has been completed and filed
with the Juab County Recorder and the BLM in Salt Lake City, Utah.
(4) Lessee represents to owner: (A) that Lessee has made a preliminary search
of the Bureau of Land Management records with regard to the leased premises
and (B) That Lessee is aware of some conflicting claims within the boundaries
of the leased premises and (C) That Lessee intends to do additional title
research and to take such actions as are necessary to perfect title in the
Lessors favor, insofar as possible and (D) That Lessee will refrain from or
abandon all attempts to obtain title to the Leased Premises except as provided
by this by this lease, without first obtaining owners written consent.
I. GRANT
1.1 Lessor hereby grants and leases to Lessee for and in
consideration of, and subject to all of the terms provisions and conditions
hereinafter set forth, the exclusive right and privilege to mine, extract,
remove and dispose of the all locatable Minerals in, upon or under the Leased
Premises, together with the right to use and occupy so much of the surface of
the Leased Premises as may be required for all purposes reasonably incident to
the mining, extracting, removal and disposal of the locatable Minerals according
to the provisions of this Lease.
II. LEASED MINERALS
2.1 "Leased Minerals" or "Locatable Minerals" as used herein
shall mean all locatable minerals acquired by virtue of the placer or lode
mining claims owned by owner.
III. TERM
3.1 The primary term of this Lease shall be for a period of five
(5) years from the date hereof and for so long thereafter as Leased Minerals
are produced in commercial quantities at more than 200 tons/month from the lands
described in Exhibit A by the Lessee, their partners, successors or assigns, for
at least ten months of each year after the first five year term has expired,
subject to extension or termination as hereinafter provided.
3.2 This Lease and the terms and conditions of this Lease
agreement issued by the Lessor are made with the Lessee herein on condition
that Lessee and any lawful successor in interest to Lessee shall perform all
covenants and terms and conditions herein set forth to be performed by Lessee
or its lawful assigns including payment of royalties as herein provided.
Lessor may issue written notice of termination and cancellation of this Lease,
and forfeiture, subject to paragraph 9.1: declaring that the Leased Premises
and each and every part thereof have thereby reverted to the Lessor, including
any and all fixtures and improvements required to be left with the property upon
expiration, termination, or cancellation of this Lease.
3.3 Lessee may terminate this Lease at any time by giving Lessors
at least ninety (90) days prior written notice, together with a check in full
settlement of any royalties that are due and unpaid; upon giving such notice of
termination, Lessee shall be released of all its obligations except those
obligations which have theretofore accrued. Within Thirty (30) days after date
of termination, Lessee shall execute and record a release and quitclaim deed
releasing all of Lessee's right, title and interest in and to the Leased
Premises.
3.4 Upon the effective date of termination by Lessee, Lessor
shall be entitled to retain all funds paid to it by Lessee pursuant to this
Lease.
3.5 Within sixty (60) days after termination from this Lease,
Lessee or its successor or assign will provide Lessor with a copy of all
data prepared, collected, and interpreted by or for it (including maps, drill
data, assays, analyses, geological surveys, topographic surveys, and other data
pertaining to the Leased Premises and the Leased Minerals. Lessee will provide
readable copies of all new factual geologic data and reports by February 15th of
each year.
IV. CONSIDERATION
4.1 The Lessee in consideration of the granting of the rights and
privileges granted herein hereby covenants and agrees as follows:
(1) Due $5,000.00 annual minimum royalty beginning on the
first anniversary of this lease and thereafter minimum $5,000.00 each
anniversary until Lessee terminates its rights. The minimum royalty of
$5,000.00, will be adjusted by the Consumer Prices Index for All Urban Consumers
for U.S. City Average as published by the U.S. Department Of Labor, Bureau Of
Labor Statistics who is created pursuant to Sec. 5(a) of Public Law 304, 79th
Congress. The average at the end of December 1992 will be the base year and any
change in the Consumer Prices Index for All Urban Consumers for U.S. City
Average for the following year ended December will determine the percent change
in the $5,000.00 for the following year. Each year becomes the new base year to
measure change from.
(2) Production Royalty: A production royalty on Leased
Minerals which shall be Two Dollars and 50 Cents per ton ($2.50/ton) of ore
removed from or mined and processed upon the Leased Property. The Production
Royalty will be applied towards the annual minimum royalty of $5,000.00 on an
annual basis.
(3) The production royalty of $2.50/ton stated in IV (2),
will be adjusted by the Consumer Prices Index for All Urban Consumers
for U.S. City Average as published by the U.S. Department Of Labor,
Bureau Of Labor Statistics who is created pursuant to Sec. 5(a) of
Public Law 304, 79th Congress. The average at the end of December 1992
will be the base year and any change in the Consumer Prices Index for
All Urban Consumers for U.S. City Average for the following year ended
December will determine the percent change in the $2.50/ton for the
following year. Each year becomes the new base year to measure change from.
A). Annual Labor:
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(1) To perform upon the Leased Premises the annual
assessment work as set forth under the laws of the United States and the State
of Utah, and to prepare timely proof of the performance of such labor and to
record and file the same as required by law, and to furnish Lessor with a copy
thereof.
Should this Lease be terminated as herein provided and the effective date of
such termination shall be ninety (90) days, or less, prior to the end of the
then current assessment year, Lessee shall nevertheless be required to perform
upon the Leased Premises the annual labor for such assessment year and shall
prepare timely proof thereof, record the same, and furnish Lessor with a copy
of such proof as hereinafter provided. In the performance of annual labor upon
or for the benefit of the Leased Premises, Lessee shall be entitled to perform
such work upon any of the claims or upon any of the groups of claims comprising
the Leased Premises so long as such work shal qualify for the purpose of the
development of the Leased Premises as a contiguous group pursuant to the
requirements of law relating to group work on mining claims except as herein
provided.
(2) Assessment work will be completed by July 15
of each year starting with the 1993 Assessment Year, or Lessor may do the work
and charge reasonable costs time and expenses to Lessee. Lessee will furnish to
Lessor a copy of the proof-of--labor with the County, no later than September
15th of each year.
(3) Rental Fees Required For Unpatented Mining
Claims by the Bureau of Land Management. The fiscal year 1993 Appropriations
Acts for the Department of the Interior, signed October 5, 1992, requires
holders of unpatented mining claims to pay the Federal Government a new rental
fee of $100 per claim per year. The rental fee requirement, which will expire
September 30, 1994, suspends a Mining Law requirement for performance of a
minimum of $100 of assessment work per claim per year. The Two rental years are
September 1, 1992, through August 31, 1993, and September 1, 1993, through
August 31, 1994. Claims are defined as lode claims, placer claims, mill sites,
and tunnel sites.
For the next 2 years.; claimants must pay the BLM $100 per claim
rental on or before August 31, 1993, for the year ending September 1, 1993,
and an advance rental of $100 per claim on or before August 31, 1993, for the
year beginning September 1, 1993.
Lessee agrees to pay this rental fee on or before July 31, 1993 to
the Bureau of Land Management. Lessor will agree to be present at the Bureau of
Land Management's office in Salt Lake City, Utah when payment is made or accept
copy of payment receipt stamped by the BLM within five days of payment. Lessee
agrees to pay on or before July 31 of any future rental fees required by the
Bureau of Land Management after the expiration of September 30, 1994.
B). PRODUCTION ROYALTY PAYMENTS:
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(1) Production royalty shall be paid within thirty
(30) days after receipt of payment for each shipment or when otherwise due,
and each payment shall be accompanied by a statement showing the date(s) of
shipment(s), quantity and value of each shipment; to whom sold and the gross
value received, and any cost deductions.
(2) Method of Production royalty payments shall
be in U.S. dollars payable by cash or valid check drawn on available funds, and
shall be deemed made when deposited at Lessor's single depository at:
Paradise Management Co.
P.O. Box 268
Fillmore, Utah 84631
Phone (801) 743--5848
Lessor may change its single depository at any time by giving written notice
to Lessee.
V. PERIODIC REPORTS
5.1 Lessee agrees to make semi-annual written reports to lessor
(on or before January 1 and July 1 each year) detailing the exploration,
development and mining work done upon the leased premises, quantity of ores,
minerals or products shipped from the Leased Premises, the identity of the
buyer(s) thereof or the place where such ores, minerals or products are
stockpiled, the plans for the Leased Premises during the next six (6) month
period, and other activities conducted or planned for the Leased Premises.
5.2 Lessee shall audit all operations upon the Leased Premises
at least annually, and furnish to Lessor a copy of such audit within thirty (30)
days after completion.
VI. RIGHTS AND OBLIGATIONS OF LESSEE
6.1 The Lessee will forthwith have and is hereby granted by
Lessor the right and privilege from the date hereof and so long thereafter
as this Lease remains in force and effect of entering into and upon the Leased
Premises and the right to drill and excavate thereon and therein holes, pits,
tunnels, shafts, and other such excavations and to conduct therein and
elsewhere such surveys, exploration, investigations, sampling, milling,
screening and other work similar as well as dissimilar as Lessee in its sole
judgment and discretion may wish to know relating to any and all facts
relative to the geology of the Leased Premises, including but not limited to
the geology of the Leased Minerals and the mining, milling, beneficiating, and
marketing thereof, together with the right to drain water and materials and to
pile overburden at places most convenient to Lessee, and the right to dig or
bore wells and use any water in or upon said lands and the right to construct
and place upon said lands any and all buildings, dams, drains, machinery, roads,
railroads, pipe and power lines and other improvements that may be convenient
for said purposes, all of which improvements will become the full and complete
property of the Lessor upon termination or assignment of Lease back to Lessor,
and Lessee will be under no further obligation or liability with respect thereto
except for reclamation and except as provided in paragraph 6.7 below. Lessee
will have the paramount possession and control of the Leased Premises with
regard to the Leased Mineral rights obtained herein during and throughout
the life of this Lease and shall be entitled to conduct therein and thereon
all mining, milling and beneficiation uses and purposes reasonably incident
thereto as it shall deem satisfactory and advantageous so far as Lessee tries
not to interfere with the rights of the Federal potassium leases. All work shall
be conducted by Lessee as Lessee in its sole judgment and discretion deems best
and in a good and minerlike fashion. Stockpiles and tailings covered by Lease,
remain the property of the Lessor upon surrender of Lease. Mining timbers in
place shall remain affixed as part of the Leased Premises unless released in
writing to Lessee.
6.2 Lessor or his agents duly authorized in writing will have at
all reasonable times and at his own risk access to all parts of Leased Premises
and associated premises for the purposes of reasonable inspection of operations,
record keeping, and accounts to the end that Lessor might verify that the
specified royalty payments are being made properly and that operations are
being conducted in a minerlike fashion. Lessee will keep records in a
businesslike manner.
6.3 Any and all future leases, transfers, encumbrances or
conveyances of interests in the Leased Premises not covered by this Lease shall
be subordinate to and subject to the rights of Lessee, his successors, assigns
of sublessees, so long as this Lease is in force and effect.
6.4 Lessee shall pay all expenses incurred by it and shall
permit no liens to attach to Leased Premises on account of any debt for
materials or services furnished for the benefit of the Leased Premises while
this Lease is in effect.
6.5 Lessee will indemnify and forever hold harmless and defend
Lessor from any demand, claim, suit, judgment or liability resulting from the
exploratory or development activities of Lessee conducted pursuant to this
agreement. Upon request of Lessor, Lessee will furnish evidence of sufficient
workmen's compensation, liability and other insurance to cover anticipated
risks, or evidence that it is adequately self--insured for such contingencies.
6.6 Lessee agrees that Leased Minerals from the Leased Premises
shall not be mixed or co-mingled with minerals, ore, substances or materials
from other properties or lands except as agreed by Lessor.
6.7 In the event of the termination of this Lease by lapse
of time or otherwise, Lessee shall grade and slope and otherwise reclaim
that portion of the land being leased pursuant hereto, which was the site of
actual mining operations, in accordance with the requirements of the State and
Federal regulations then in effect and Owner may elect to assume the burden of
reclaiming the land, by notifying Lessee in writing of his intent to assume said
burden, in which event, Lessee will obtain not more than three (3) bids for
performance of the reclamation work required by this paragraph, and will pay
over to owner a sum equal to ninety--five percent (95%) of the lowest of said
bids. Thereafter, Lessee shall be relieved from all duties, expenses or
responsibility with respect to such reclamation and Owner, simultaneously with
or prior to the receipt of said payment, shall obtain from the appropriate
Government agencies and deliver to Lessee all documents necessary to release
Lessee from all further responsibility for the performance of such reclamation
work.
VII. PATENT OF CLAIMS
7.1 Upon request of Lessee at any time during the term of
this Lease, the Lessor agrees to undertake to obtain patent to any of the
mining claims designated by Lessee. Lessee, at its own expense, shall prepare
all documents, compile all data and comply in all respects with all applicable
laws in this endeavor, and Lessor shall execute all documents required for this
purpose and shall cooperate fully with Lessee in the patent application and
proceedings.
7.2 The rights of Lessor and Lessee under this Lease will extend
to any and all amended, relocated, or patented claims referred to in Exhibit A.
Lessor and Lessee agree that all amendments, relocations, or staking new claims
in the claimed area, of the claims referred to in Exhibit A, will be made in the
name of Lessor. Some claims need amending and it is known hereby to the Lessee.
Any valid mining claims staked by Lessor, or his agents, within the Leased
Premises shall fall under and be a part of this Lease.
VIII. DEFAULT AND FORCE MAJEURE
8.1 If Lessee will be in default in performing any obligations
(except the timely payment of royalties), Lessee shall lose no rights unless,
within sixty (60) days following written notice from Lessor, given at the
address herein specified, specifying such failure or breach, Lessee shall fail
to make such payment or undertake to cure such default by commencement and
follow through of appropriate performance, within a reasonable amount of time.
Upon such failure, Lessor may terminate this Lease.
8.2 If Lessee shall be prevented or delayed from performing its
obligations or performing any work which it desires to perform or is performing
by reason of act of nature, strike or threat of strike, fire, flood, war, mob
violence, court order, unavoidable casualties, or any other enumeration, beyond
the control of Lessee which cannot be overcome by the means normally employed in
performance and at comparable and reasonable expense, then the duration of this
Lease shall be extended for a period equal to the period of Force Majeure and
any failure to perform obligations shall not be deemed a breach of this
Lease. Lessee agrees to use reasonable diligence to remove such causes
of disability as may occur from time to time. This paragraph shall not excuse
payment or delay payment of royalties.
IX. Lease Premises.
9.1 The parties hereto agree that during the term of this
Lease, in the event title to any of the Leased Premises is contested by
any person or persons, corporation or corporations, or governmental
agencies, Lessee will, at its own election and expense, defend the title
to any of the Leased Premises before any court of competent jurisdiction
or any administrative body. Lessee will defend any actions for damages relating
to exploration, development, or mining activities by Lessee on Leased Premises.
9.2 Lessor, upon execution of this Lease, shall furnish Lessee
with copies of all property maps possessed by Lessor on the Leased Premises
and adjacent lands.
X. TAXES AND DUTIES
10.1 Lessee agrees to pay (i) all taxes hereafter levied and
assessed upon all machinery and improvements placed by Lessee upon the Leased
Premises, (ii) taxes hereafter levied upon the Leased Premises, including
taxes assessed by reason of net annual proceeds, and (iii) occupation or
severance taxes imposed upon the mining or production of Leased Minerals
from the Leased Premises or any other taxes, assessments or charges resulting
from Lessee activities on Leased Premises.
10.2 Lessor agrees to promptly transmit to Lessee any notices
pertaining to taxes, assessments and charges which Lessor may receive.
10.3 Lessee, in all operations under this Lease, will comply
with all applicable State and Federal laws, including the social aws relative to
employment, safety, workmen's compensation insurance, social security,
unemployment tax and tax withholding. Lessee shall hold Lessor harmless from
claims of damage to persons or property arising from Lessee's operations
under this Lease. Lessee will comply with hazardous waste, air and water quality
requirements.
10.4 Lessee will do all reclamation work required by the Bureau
of Land Management, the State of Utah or Juab County in a timely manner.
XI. ASSIGNMENT AND TRANSFER
11.1 Lessee can convey, assign or transfer its interest in this
lease or any part of this Lease without the prior notification and consent in
writing of the Lessor. The assignee party will, as a condition of consent to
the transfer, agree to be bound by and subject to the terms of this Lease. Any
assignee party will provided a photocopy of the executed copy of assignment and
is delivered to the other party. Overriding royalty assignments will not become
effective, even if otherwise valid without the consent in writing of the Lessor.
Lessee, its successor and assigns, may not assign or convey royalty, overriding
royalty, production payment or like interest in the Leased Premises without
Lessor's prior written consent.
XII. MISCELLANEOUS
12.1 This agreement shall be governed by the laws of the State
of Utah.
12.2 Title headings are for convenience only and shall not be
deemed a part of this Lease.
12.3 This Lease and Its Exhibit contain the entire agreement
between the parties and supersedes entirely any prior understandings whether
oral or written.
12.4 If any provisions of this Lease is or becomes void or
unenforceable by Force of Law, the other provisions shall remain valid and
enforceable.
12.5 Lessor's and Lessee's proper address shall be the following,
which either may change by giving written notice to the other.
Don W. Fulliner
P.O. Box 268
1025 North Main
Fillmore, Utah 84631
Daniel H. Engh, Dennis S. Engh
2340 East Germania Circle
Sandy, Utah 84093-1174
12.6 The failure to enforce at any time any provisions
of this Lease, shall in no way be construed to be a waiver of such provisions,
or to affect validity of the Lease.
12.7 This Lease shall be binding upon and inure to the benefit
of the successors and permitted assigns of the parties.
12.8 A Memorandum of this Lease may be filed by either party.
12.9 Lessee will diligently explore and conduct
operations on or near Leased Premises throughout the term of this Lease
in a manner reasonably calculated to advance the production of minerals
from Leased Premises.
IN WITNESS WHEREOF, this Lease has been executed and
delivered by Lessor to Lessee as of the day and year first above
written.
/S/ Don W. Fullmer
Don W. Fullmer
LESSOR
/S/ Daniel H. Engh /S/ Dennis S. Engh
- --------------------------------- -----------------------------------
Daniel H. Engh Dennis S. Engh
LESSEE LESSEE
ACKNOWLEDGMENT
STATE OF UTAH
COUNTY of Millard
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On this 19th day of June, 1993, before me personally appeared DON W.
FULLMER to me known to be the person described in and who executed the
foregoing instrument and acknowledged that he executed the same as a free act
and deed.
Given under my hand and seal this 19th day of June, 1993. My Commission
Expires July 3, 1994.
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/S/ Lee Ann H. Burton
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ACKNOWLEDGMENT
STATE OF UTAH
COUNTY of Millard
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On this 19th day of June, 1993, before me personally appeared DANIEL H.
ENGH to me known to be the person described in and who executed the foregoing
instrument and acknowledged that he executed the same as a free act and deed.
Given under my hand and seal this 19th day of June, 1993. My Commission
Expires July 3, 1994.
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/S/ Lee Ann H. Burton
-----------------------------------
ACKNOWLEDGMENT
STATE OF UTAH
COUNTY of Millard
-------
On this 19th day of June, 1993, before me personally appeared DENNIS S.
ENGH to me known to be the person described in and who executed the foregoing
instrument and acknowledged that he executed the same as a free act and deed.
Given under my hand and seal this 19th day of June, 1993. My Commission
Expires July 3, 1994.
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/S/ Lee Ann H. Burton
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EXHIBIT A
To the Mining Lease Agreement
Between Don W. Fullmer, and Daniel H. Engh, Dennis S. Engh.
Dated the 19th day of June, 1993.
The Property consists of Lode Claims and Placer claims. And are located in
Townships 13 South Range 11 West and Township 14 South 11 West, and Township 13
South 12 West and Township 13 South Range 10 West Salt Lake Medrian, Juab
County, Utah.
Claim Name Description UMC NUMBER
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 120109
Hailstone Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120110
Hailstone #1 Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120111
Nola No. 1 Sec. 33, Twns. 13 So. R-11 W subdv SE 120119
Carole Ann Sec. 4, Twns. 14 So. R-11 W subdv NE 120116
Carol Ann No. 1 Sec. 34, Twns. 13 So. R-11 W subdv SW 120117
Nola Sec. 33, Twns. 13 So. R-11 W subdv NE 120118
Brian #1 Sec. 28, Twns. 14 So. R-11 W subdv NW 120120
Brian #2 Sec. 28, Twns. 14 So. R-11 W subdv NE 120121
Brian #3 Sec. 28, Twns. 14 So. R-11 W subdv SE 120122
Brian #4 Sec. 27, Twns. 14 So. R-11 W subdv NW 120123
Brian #5 Sec. 27, Twns. 14 So. R-11 W subdv SW 120124
Brian #6 Sec. 28, Twns. 14 So. R-11 W subdv SW 120125
Brian #10 Sec. 28, Twns. 14 So. R-11 W subdv NW 120126
Brian #11 Sec. 27, Twns. 14 So. R-11 W subdv NW 120127
Snowflake Sec. 4, Twns. 14 So. R-11 W subdv NE 120132
Snowflake #1 Sec. 4, Twns. 14 So. R-11 W subdv NE 120133
Snowflake #2 Sec. 4, Twns. 14 So. R-11 W subdv NE 120134
Snowflake #3 Sec. 4, Twns. 14 So. R-11 W subdv E2 120135
Linda Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120136
Linda #1 Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120137
Linda #2 Sec. 33, Twns. 13 So. R-11 W subdv E2 120138
Linda #3 Sec. 33, Twns. 13 So. R-11 W subdv E2 120139
Linda #4 Sec. 33, Twns. 13 So. R-11 W subdv E2 120140
Linda #5 Sec. 33, Twns. 13 So. R-11 W subdv E2 120141
Linda #6 Sec. 33, Twns. 13 So. R-11 W subdv E2 120142
Brian #10 Sec. 28, Twns. 14 So. R-11 W subdv all 302968
Brian #11 Sec. 27, Twns. 14 So. R-11 W subdv W2 302969
Linda #5 Sec. 33, Twns. 13 So. R-11 W subdv All 302978
Linda #6 Sec. 33, Twns. 13 So. R-11 W subdv NE 302979
Linda Sec. 34, Twns. 13 So. R-11 W subdv W2 302992
Linda #1 Sec. 34, Twns. 13 So. R-11 W subdv E2 302993
Linda #2 Sec. 34, Twns. 13 So. R-11 W subdv E2 302994
Linda #3 Sec. 33, Twns. 13 So. R-11 W subdv E2 302995
Linda #4 Sec. 33, Twns. 13 So. R-11 W subdv E2 302996
Snowflake Sec. 33, Twns. 13 So. R-11 W subdv SE 302997
Snowflake #1 Sec. 33, Twns. 13 So. R-11 W subdv SE 302998
Snowflake #2 Sec. 33, Twns. 13 So. R-11 W subdv SE 302999
Snowflake #3 Sec. 4, Twns. 14 So. R-11 W subdv E2 303000
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 303001
Hailstone #1 Sec. 33 & 34, Twns. 13 So. R-11 W subdv SE & SW 303002
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 303025
Nola No 1 Sec. 28, Twns. 13 So. R-11 W subdv SE 303026
Nola Sec. 33, Twns. 13 So. R-11 W subdv NE 303027
Carole Ann Sec. 4, Twns. 14 So. R-11 W subdv NE 303028
Carole Ann #1 Sec. 4, Twns. 14 So. R-11 W subdv SW 303029
Brian #1 Sec. 28, Twns. 13 So. R-11 W subdv NW 303034
Brian #2 Sec. 28, Twns. 13 So. R-11 W subdv NE 303035
Brian #3 Sec. 28, Twns. 13 So. R-11 W subdv SE 303036
Brian #4 Sec. 27, Twns. 13 So. R-11 W subdv NW 303037
Brian #5 Sec. 27, Twns. 13 So. R-11 W subdv SW 303038
Brian #6 Sec. 28, Twns. 13 So. R-11 W subdv SW 303039
ADDENDUM TO MINING LEASE
This Addendum to Mining Lease is made this l5th day of March, 2000 by and
between Don W, Fullmer and Arnola B. Fullmer, his wife, 905 North Main Street,
Fillmore, Utah 94631, hereinafter referred to as "Lessor," and Daniel H. Engh
and Dennis S. Engh whose address is 2340 East Gennania Circle, Sandy, Utah
84093-1174, hereinafter referred to as "Lessee."
In consideration, of bringing minimum royalty payments up to date through
payments in the amount of $19,775.62, the receipt and adequacy of which is
hereby acknowledged. Lessor hereby acknowledges that the items of default
contained in the Notice dated December 31, 1999, incorporated by this reference,
are hereby satisfied in full or waived as to past acts only.
In consideration of the foregoing funds paid to Lessor, Lessor also
ratifies the following Mining Lease No. 2 - dated June 19, 1993 with Daniel H.
Engh and Dennis S. Engh as being in full force and effect, without any
modification of the lease or any waiver of'the lease terms as to future
performance, except at Paragraph 3.1 of the Mining Lease, the primary term and
the requirement to obtain commercial production are extended for five (5) years
from the date hereof.
The leases and claims covered thereby are more particularly described on
the attached Exhibit A incorporated by this reference.
This Addendum shall be effective on file date above.
/s/Don W. Fullmer /s/Daniel H. Engh
- --------------------------------- -----------------------------------
Don W. Fullmer, (Lessor) Daniel H. Engh, (Lessee)
/s/Arnola B. Fullmer /s/Dennis S. Engh
- --------------------------------- -----------------------------------
Arnola B. Fullmer, (Lessor Dennis S. Engh, (Lessee)
To The ADDENDUM TO MINING LEASE
Page 2
STATE OF UTAH
SS
Coillily of Millard
------------------
On this 15 day of March, 2000, personally appeared before me Don W.
Fullmer and Arnola B. Fullmer, his wife, who acknowledged to me that they
executed the Addendum to Mining Lease.
-----------------------------------
NOTARY PUBLIC
Residing at: 390 S. 100E
-----------------------
My Commission Expires: Fillmore, UT
STATE OF UTAH
SS
County of Millard
--------------------
On this 15 day of March, 2000, personally appeared before me Daniel H.
Engh and Dennis S. Engh, who acknowledged to me that they executed the foregoing
Addendum to Mining Lease.
-----------------------------------
NOTARY PUBLIC
Residing at: 390 S. 100E
-----------------------
My Commission Expires: Fillmore, UT
To The ADDENDUM TO MINING LEASE
Page 3
Exhibit A
Mining Lease #2
- ---------------
With respect to the Properties, Daniel H. Engh and Dennis S. Engh have a MINING
LEASE AGREEMENT Dated June 19th 1993 by and between Don W. Fullmer (Lessor)
and Daniel H. Engh, Dennis S. Engh (Lessee). All terms and conditions of the
June 19, 1993 MINING LEASE AGREEMENT will be a part of this Letter Agreement.
Said claims of this MINING LEASE AGREEMENT are described below:
Tile Property, consists of Lode Claims and Placer claims. And are located in
Townships 13 South Range 11 West and Township 14 South 11 West. and Township 13
South 12 West and Tox~nship 13 South Range 10 West Salt Lake Medrian, Juab
County, Utah.
Claim Name Description UMC NUMBER
- --------------------------------------------------------------------------------
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 120109
Hailstone Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120110
Hailstone #1 Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120111
Nola No. 1 Sec. 33, Twns. 13 So. R-11 W subdv SE 120119
Carole Ann Sec. 4, Twns, 14 So. R-11 W subdv NE 120116
Carol Ann No. 1 Sec. 34, Twns. 13 So. R-11 W subdv SW 120117
Nola Sec. 33, Twns. 13 So. R-11 W subdv NE 120118
Brian #l Sec. 28, Twns. 14 So. R-11 W subdv NW 120120
Brian #2 Sec. 28, Twns. 14 So. R-11 W subdv NE 120121
Brian #3 Sec. 28, Twns. 14 So. R-11 W subdv SE 120122
Brian #4 Sec. 28, Twns. 14 So. R-11 W subdv NW 120123
Brian #5 Sec. 28, Twns. 14 So. R-11 W subdv SW 120124
Brian #6 Sec. 28, Twns. 14 So. R-11 W subdv SW 120125
Brian #10 Sec. 28, Twns. 14 So. R-11 W subdv NW 120126
Brian #1l Sec. 28, Twns. 14 So. R-11 W subdv NW 120127
Snowflake Sec. 4, Twns. 14 So. R-11 W subdv NE 120132
Snowflake #1 Sec. 4, Twns. 14 So. R-11 W subdv NE 120133
5nowflako #2 Sec. 4, Twns. 14 So. R-11 W subdv NE 120134
Snowflake #3 Sec. 4, Twns. 14 So. R-11 W subdv E2 120135
Linda Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120136
Linda #1 Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120137
Linda #2 Sec. 33, Twns. 13 So. R-11 W subdv E2 120138
Linda #3 Sec. 33, Twns. 13 So. R-11 W subdv E2 120139
Linda #4 Sec. 33, Twns. 13 So. R-11 W subdv E2 120140
Linda #5 Sec. 33, Twns. 13 So. R-11 W subdv E2 120141
To The ADDENDUM TO MINING LEASE
Page 4
Linda #6 Sec. 33, Twns. 13 So. R-11 W subdv E2 120142
Brian #10 Sec. 28, Twns. 14 So. R-11 W subdv All 302968
Brian #11 Sec. 27, Twns. 14 So. R-11 W subdv W2 302969
Linda #5 Sec. 33, Twns. 13 So. R-11 W subdv All 302992
Linda #6 Sec. 33, Twns. 13 So. R-11 W subdv NE 302979
Linda Sec. 34, Twns. 13 So. R-11 W subdv W2 302992
Linda #1 Sec. 34, Twns. 13 So. R-11 W subdv E2 302993
Linda #2 Sec. 34, Twns. 13 So. R-11 W subdv E2 302994
Linda #2 Sec. 33, Twns. 13 So. R-11 W subdv E2 302995
Linda #4 Sec. 33, Twns. 13 So. R-11 W subdv E2 302996
Snowflake Sec. 33, Twns. 13 So. R-11 W subdv SE 302997
Snowflake #1 Sec. 33, Twns. 13 So. R-11 W subdv SE 302998
Snowflake #2 Sec. 33, Twns. 13 So. R-11 W subdv SE 302999
Snowflake #3 Sec. 4, Twns. 14 So. R-11 W subdv E2 303000
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 303001
Hailstone #1 Sec. 33 & 34, Twns. 13 So. R-11 W subdv SE & SW 303002
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 303025
Nola No 1 Sec. 28, Twns. 13 So. R-11 W subdv SE 303026
Nola Sec. 33, Twns. 13 So. R-11 W subdv NE 303027
Carole Ann Sec. 4, Twns. 14 So. R-11 W subdv NE 303028
Carole Ann #1 Sec. 4, Twns. 14 So. R-11 W subdv SW 303029
Brian #1 Sec. 28, Twns. 13 So. R-11 W subdv NW 303034
Brian #2 Sec. 28, Twns. 13 So. R-11 W subdv NE 303035
Brian #3 Sec. 28, Twns. 13 So. R-11 W subdv SE 303036
Brian #4 Sec. 27, Twns. 13 So. R-11 W subdv NW 303037
Brian #5 Sec. 27, Twns. 13 So. R-11 W subdv SW 303038
Brian #6 Sec. 28, Twns. 13 So. R-11 W subdv SW 303039
End of Exhibit A.
OPTION TO ENTER INTO MINING LEASE
OPTION AGREEMENT by and between Daniel H. Engh, Dennis S. Engh (Lessor) and
Kaolin Of The West, LLC. (Lessee), a Utah Limited Liability Company.
1. A) Lessee hereby pays to Lessor's the sum of $100.00 in consideration for
this option, which option payment shall be credited to the Mining Lease
Agreement if the option is exercised, and
B) Lessee will pay annually to Lessor to retain this option and right to
enter into a mining lease for the mining claims listed in Exhibit A (Mining
Lease Agreement) within the option period for $5,000.00 (five thousand
dollars), due June 10th of each year and payment of all Federal and State
rents, taxes and other payments associated with the mining claims. All
payments of all Federal and State rents, taxes and other payments
associated with the mining claims are due to Lessor by June 10th of each
year.
2. This option shall remain in effect until November 1, 2000, and thereupon
expire unless this option is sooner exercised.
3. To exercise this option, Lessee must notify Owner of same by certified mail
within the option period. Ail notices shall be sent to owner at the following
address:
Daniel H. Engh
2340 E. Germania Circle
Sandy, Utah 84093-1174
4. PROPERTY
The Property consists of unpatented lode and association placer mining claims
located on land managed by the Bureau of Land Management in the State of Utah
(Salt Lake Base & Meridian):
Joy area unpatented lode association placer claims:
The Property consists of Lode Claims and Placer claims. And
are located in Townships 13 South Range 11 West and Township 14 South 11 West,
and Township 13 South 12 West and Township 13 South Range 10 West Salt Lake
Meridian, Juab County, Utah.
5. Should the Lessee exercise the option, the Lessor and Lessee agree to
promptly sign the attached Mining Lease, and consummate the Mining Lease on its
terms, which are incorporated herein by reference.
6. This Option agreement shall be binding upon and inure to the benefit of the
parties, their successors, assigns and personal representatives.
Signed this 30th day of September, 1996.
Kaolin Of The West, LLC.
/s/Daniel H. Engh By:/s/Dennis S. Engh
- --------------------------------- --------------------------------
Lessor, Daniel H. Engh Its: Lessee
/s/Dennis S. Enqh
- ---------------------------------
Lessor, Dennis
OPTION TO ENTER INTO MINING LEASE
OPTION AGREEMENT by and between Kaolin Of The West, LLC., a Utah
Limited Liability Company at 4532 Briarcreek Street, Salt Lake City, Utah
84117 hereinafter referred to as the (Lessor) and Utah Clay Technology,
Inc., at 3985 South 2000 East, Salt Lake City, Utah 84124, hereinafter
referred to as (Lessee) a Utah corporation.
1. A) Lessee hereby pays to Lessor's the sum of $100.00 in consideration
for this option, which option payment shall be credited to the Mining
Lease Agreement if the option is exercised, and
B) Lessee will pay annually to Lessor to retain this option and right
to enter into a mining lease for the mining claims listed in Exhibit A
(Mining Lease Agreement) within the option period for $5,000.00 (five
thousand dollars), due June 10th of each year and payment of all
Federal and State rents, taxes and other payments associated with the
mining claims. All Payments of all Federal and State rents, taxes and
other payments associated with the mining claims are due to Lessor
by June 10th of each year.
C) The Lessee agrees to pay upon exercising this option, in cash
and/or common stock, to the Lessor an amount equal to the "Fair Market
Value of the Leased Premises" as agreed between the parties on or
before November 1, 2000.
The Fair Market Value of the Lease Premises will be defined in a
Report that will summarize the economic evaluation and dollar
computation of the kaolin reserves of the Leased Premises as
determined by an independent engineer on or before June 1, 2000. All
costs associated with the preparation of the "Fair Market Value Report
of the Leased Premises" will be paid by the Lessee.
2. This option shall remain in effect until November 1, 2000, and
thereupon expire unless this option is sooner exercised.
3. To exercise this option, Lessee must notify Owner of same by certified
mail within the option period. All notices shall be sent
To the "Option To Enter Into Mining Lease"
Page 2 of 2
to owner at the following address:
Kaolin Of The West, LLC.
Daniel H. Engh
2340 E. Germania Circle
Sandy, Utah 84093-1174
4. PROPERTY
The Property consists of unpatented lode and association placer mining claims
located on land managed by the Bureau of Land Management in the State of Utah
(Salt Lake Base & Meridian):
Joy area unpatented lode association placer claims:
The Property consists of Lode Claims and Placer claims. And are located in
Townships 13 South Range 11 West and Township 14 South 11 West, and Township
13 South 12 West and Township 13 South Range 10 West Salt Lake Meridian, Juab
County, Utah. 5. Should the Lessee exercise the option, the Lessor and Lessee
agree to promptly sign the attached Mining Lease, and consummate the Mining
Lease on its terms, which are incorporated herein by reference.
6. This Option agreement shall be binding upon and inure to the benefit of the
parties, their successors, assigns and personal representatives.
Signed this 30 day of September, 1996.
Kaolin Of The West, LLC. Utah Clay Technology, Inc.
/S/Dennis S. Engh BY: Dennis S. Engh
- --------------------------------- ----------------------------------
Its: Its:
Lessor Lessee
MINING LEASE
BETWEEN
DANIEL H. ENGH, DENNIS S. ENGH,
AND
UTAH CLAY TECHNOLOGY INC.
(A UTAH CORPORATION)
DATE:
TABLE OF CONTENTS
ARTICLE Page No.
- ------- --------
I - DEFINITIONS.............................................................1
1.1 "Agreement" ...............................................1
1.2 "Area of Interest".........................................2
1.3 "Assets". .................................................2
1.4 "Leased Minerals" .........................................2
1.5 "Development" .............................................2
1.6 "Dollars" or "$" ..........................................2
1.7 "Exploration" .............................................2
1.8 "Effective Date" ..........................................2
1.9 "Exploration Period" ......................................2
1.10 "Exploration Rights" ......................................2
1.11 "Mining"...................................................2
1.12 "Operations" ..............................................3
1.13 "Prime Rate" ..............................................3
1.14 "Products" ................................................3
1.15 "Program" .................................................3
1.16 "Properties" ..............................................3
1.17 "Transfer" ................................................3
1.18 "Work Expenditures" .......................................3
II - REPRESENTATIONS AND WARRANTIES; COVENANTS;
TITLE TO ASSETS
2.1 Capacity of Participants ..................................3
2.2 Representations and Warranties ............................4
2.3 Disclosures ...............................................6
2.4 Covenants .................................................6
2.5 Record Title and Lessor's Interest ........................6
III - NAME, PURPOSES AND TERM ..............................................7
3.1 General ...................................................7
3.2 Name ......................................................7
3.3 Purposes ..................................................7
3.4 Limitation ................................................7
3.5 Term ......................................................7
3.6 Terms and Conditions ......................................7
3.7 Termination ...............................................8
3.8 Funds Paid ................................................8
3.9 Copy of all Data ..........................................8
i
ARTICLE Page No.
- ------- --------
IV - CONSIDERATION .........................................................8
4.1 Consideration .............................................8
4.1(A) Annual Labor ..............................................8
4.1(B) Reserved Royalty ..........................................9
V - APPOINTMENT OF AGENT BY LESSOR ........................................10
5.1 Appointment of Agent .....................................10
VI - PERIODIC REPORTS .....................................................10
6.l Semi-annual Written Reports ..............................10
6.2 Audit all Operations .....................................l0
VII - RIGHTS AND OBLIGATIONS OF LESSEE ....................................10
7.1 Entering Leased' Premises ................................10
7.2 Inspection of Operations, records ........................11
7.3 Transfers, Encumbrances or Conveyances ...................11
7.4 Expenses and Liens .......................................11
7.5 Indemnification ..........................................11
7.6 Mixed or Co-mingled minerals .............................l1
VIII - PATENT OF CLAIMS ...................................................12
8.1 Obtain Patent to Mining Claims ...........................12
8.2 Rights extend to Amendments ..............................12
IX - DEFAULT AND FORCE MAJEURE ............................................12
9.1 Default Performaing Obligations ..........................12
9.2 Prevented or Delayed from Obligations ....................12
X - LEASE PREMISES ........................................................13
10.1 Defend Title ................................................13
10.2 Copies Maps .................................................13
XI - TAXES AND DUTIES .....................................................13
11.1 Lessee Agrees to Pay Taxes ...............................13
11.2 Notices to Lessee ........................................13
11.3 Comply with all State and Federal Laws ...................13
11.4 Reclamation Work .........................................13
XII - ASSIGNMENT AND TRANSFER .............................................14
12.1 Assign or Transfer ..........................................14
XIII - MISCELLANEOUS ......................................................14
13.1 Governed by Utah Laws.....................................14
13.2 Title for Convenience.....................................14
13.3 Contain Entire Agreement..................................14
13.4 Force of Law..............................................14
13.5 Proper Address's..........................................14
13.6 Affect Validity of the Lease............................. 14
ii
ARTICLE Page No.
- ------- --------
13.7 Benefit of the Successors.................................14
13.8 Memorandum of Lease.......................................14
13.9 Diligently Explore........................................15
XIV - EXPLORATION REQUIREMENTS
14.1 Operator of Exploration, Mining .............................15
EXHIBITS
- --------
EXHIBIT A - PROPERTIES.............................................1
PART 1. - Properties and Title Exceptions ........................1
PART 2. - Area of Interest........................................4
iii
MINING LEASE
THIS MINING LEASE, herein referred to as "Lease", made and entered
into this __st day of October, 1996, by and between DANIEL H. ENGH, at 2340 East
Germania Circle, Sandy; Utah 84093-1174, DENNIS S. ENGH, at 4532 Briarcreek
Drive, Salt Lake City, Utah 84124, hereinafter referred to as "Owner or Lessor",
and UTAH CLAY TECHNOLOGY INC., a Utah corporation, having an address at 3985
South 2000 East, Salt Lake City, Utah 84124 (hereinafter designated as
"Lessee"):
WITNESSETH:
WHEREAS, Lessor is owner of certain properties and property rights
situated in Juab County, State of Utah, and more particularly described in the
attached Exhibit "A", incorporated by reference, and hereinafter referred to as
the "Leased Premises"; and
WHEREAS, Lessee desires to lease certain fights in and to the Leased
Premises which Lessor is willing to grant to Lessee;
NOW THEREFORE, in consideration of $10.00 paid by Lessee to Owner
receipt of which is hereby acknowledged and the payments, covenants and
agreements hereinafter set forth the parties agree as follows:
GRANT, Lessor hereby grants and leases to Lessee for and in consideration
of, and subject to all of the terms provisions and conditions hereinafter set
forth, the exclusive right and privilege to mine, extract, remove and dispose of
the all locatable Minerals in, upon or under the Leased Premises, together with
the right to use and occupy so much of the surface of the Leased Premises as may
be required for all purposes reasonably incident to the mining, extracting,
removal and disposal of the locatable Minerals according to the provisions of
this Lease.
ARTICLE I
---------
DEFINITIONS
-----------
1.1 "Agreement" means this Mining Lease, including all amendments and
modifications thereof, and all schedules and exhibits, which are incorporated
herein by this 'reference.
1.2 "Area of Interest" means the area described in Part 2 of Exhibit
A.
-1-
1.3 "Assets" means the Properties, Products and all other real and
personal property. tangible and intangible, held for the benefit of the Lessor
hereunder.
1.4 "Leased Minerals" or "Locatable Minerals" as used herein shall
mean all locatable minerals acquired by virtue of the placer or lode mining
claims owned by owner.
1.5 "Development" means all preparation for the removal and recovery
of Products, including the construction or installation of a mill or any other
improvements to be used for the mining, handling, milling, processing or other
beneficiation of Products.
1.6 "Dollars" or "$" means dollars in the currency of the United
States.
1.7 "Exploration" means all activities directed toward ascertaining
the existence, location, quantity, quality or commercial value of deposits
of Products.
1.8 "Effective Date" means the date first written above.
1.9 "Exploration Period" means the period of time during which Lessee
is conducting Exploration Operations pursuant to Article VII. The Exploration
Period shall begin on the Effective Date and, unless this Agreement sooner
terminates, shall end on the date a processing mill is placed into production
with Leased Minerals.
1.10 "Exploration Rights" mean collectively the following:
(a) the sole and exclusive right of Lessee and its agents,
employees, contractors, subcontractors and workers, to enter upon and occupy the
Properties for Exploration purposes during the Exploration Period and to conduct
thereon such prospecting, trenching, drilling, sampling, examination, testing
development, engineering and feasibility studies for kaolin and other or
associated clays or metals and all other ores and minerals whatever kind or
character as desired by Lessee; and
(b) the right to do such other things as Lessee, in its sole
discretion, deems advisable or necessary to maintain and to fully evaluate the
mineral potential of the Properties to determine the feasibility of Development
of the Properties, including the fight to remove from the Properties such
limited volumes of minerals and materials as are necessary for test and
assaying; provided, however, that Lessee shall not have the fight during the
Exploration Period to mine and remove such minerals and materials for sale.
1.11 "Mining" means the mining, extracting, producing, handling,
milling or other processing of Products.
1.12 "Operations" means the activities carried out under this
Agreement.
-2-
1.13 "Prime Rate" means the interest rate published as the Prime Rate
in the "Money Rates" column of The Wall Street Journal, as said rate may change
from day to day, or if said column sets forth a range of rates on a single day,
the arithmetic mean thereof.
1.14 "Products" means all ores, minerals and mineral resources
produced from the Properties under this Agreement.
1.15 "Program" means a description in reasonable detail of Operations
to be conducted and objectives to be accomplished by the Lessee for a specified
period.
1.16 "Properties" means those interests in real property described in
Part 1 of Exhibit A and all other interests in real property within the Area of
Interest which are acquired and held subject to this Agreement.
1.17 "Transfer" means sell, grant, assign, encumber, pledge or
otherwise commit or dispose of.
1.18 "Work Expenditures" means the minimum work obligations described
in Sections 3.5 and 4.1 below and shall include, for purposes of this
Agreement, the value of all time, money or equipment contributed to or used on
or in connection with the Properties or the Area of Interest by Lessee in good
faith, including but not limited to all consultants' time, all costs of testing
and assaying and all other expenses reasonably necessary to evaluate the
Properties or the Area of Interest. Work Expenditures shall include (a)
geological evaluation, geophysical study, geochemical analysis, rock and soil
sampling, geological mapping and similar activities affecting the Properties or
the Area of Interest; (b) drilling, trenching, road construction and pad
construction (plus associated stand-by time) and other physical work on the
Properties or the Area of Interest; (c) environmental, permitting and
reclamation expenditures; (d) title examination and title curative,
remonumentation of unpatented mining claims, survey (or re-survey), claim
filing fees, taxes, and all other reasonable project maintenance or associated
costs on or for the benefit of the Properties or the Area of Interest, including
without limitation the maintenance activities described in Sections 3.2 and 4.1
acquisition of property within the Area of interest.
ARTICLE II
----------
REPRESENTATIONS AND WARRANTIES: COVENANTS: TITLE TO ASSETS
----------------------------------------------------------
2.1 Capacity of Participants. Lessee and Lessor, each for itself,
------------------------
represent and warrant as follows:
(a) That it is a corporation and individuals respectively duly
incorporated and in good standing in its state of incorporation and
that it is qualified to do business and is
-3-
in good standing in those states where necessary in order to carry out
the purposes of this Agreement;
(b) That it has the capacity to enter into and perform this
Agreement and all transactions contemplated herein and that all
corporate and other actions required to authorize it to enter into and
perform this Agreement have been properly taken;
(c) That it will not breach any other agreement or arrangement by
entering into or performing this Agreement; and
(d) That this Agreement has been duly executed and delivered by
it and is valid and binding upon it in accordance with its terms.
2.2 Representations and Warranties: Lessor make the following
--------------------------------
representations and warranties effective on the Effective Date:
The Leased Premises. The "Leased Premises" shall mean all of the
-------------------
property described in Exhibit "A" attached hereto and made a part hereof,
together with all of the ores, minerals and materials thereon and thereunder,
and all right, title and all water, water rights, easements and rights of way
now and hereafter owned or held by Lessor in, upon or under the said property,
or in any way pertaining thereto.
(a) With respect to those Properties Lessor claimed through the
Bureau Of Land Management and those Properties Lessor has enter into a
mining lease with Don W. Fullmer, if any, Lessor are in exclusive
possession mining rights of such Properties free and clear of all
defects, royalties, liens and encumbrances except those specifically
identified in Part 1 of Exhibit A.
(b) With respect to those Properties in which Lessor hold an
interest under leases or other contracts: (i) Lessor are in exclusive
possession of such Properties; (ii) neither Lessor has received any
notice of default of any of the terms or provisions of such
contracts; (iii) Lessor have the authority under such contracts to
perform fully their obligations under this Agreement; (iv) such
contracts are valid and are in good standing; and (v) the properties
covered thereby are free and clear of all defects, royalties, liens
and encumbrances except for those specifically identified in Part
1 of Exhibit A or in such contracts.
(c) With respect to unpatented mining claims that are included
within the Properties, except as provided in Part 1 of Exhibit A and
subject to the paramount title of the United States, the claims are
free and clear of defects, royalties, liens and encumbrances except
for those specifically identified in Part 1 of Exhibit A and to
the best of Lessor's knowledge and belief; (i) the unpatenied mining
claims were properly laid out and monumented; (ii) all required
location and validation work was properly performed;
-4-
and (iii) all assessment work required to hold the unpatented
mining claims has been performed in a manner consistent with that
required of the Lessee pursuant to Section 4.1(A) of this Agreement
through the assessment year ending September 1, 1995. With respect to
such unpatented mining claims located by or on behalf of Lessor or
one of their Affiliates, except as provided in Part 1 of Exhibit A and
subject to the paramount title of the United States, all location
notices and certificates and all affidavits of assessment work and
other filings required to maintain the claims in good standing have
been properly and timely recorded and filed with appropriate
governmental agencies, with respect to such unpatented mining claims
that were not located by or on behalf of Lessor or one of their
Affiliates, Lessor make the representation and warranty contained in
the foregoing sentence to the best of their knowledge and belief.
Additionally, Lessor have no knowledge of any claims conflicting with
the claims described in Part 1 of Exhibit A. Nothing in this Section
2.2(c), however, shall be deemed to be a representation or a warranty
that any of the unpatented mining claims described in Part 1 of
Exhibit A contains a discovery of minerals.
Lessor represents to Lessee: (1) that subject to the matters
specifically set forth in Exhibit "A," and subject to the matters set
forth below with respect to unpatented mining claims, Lessor has the
exclusive possession of the Leased Premises and (2) that the Lessor
has the full fight, power and capacity to enter into this Lease upon
the terms set forth herein. Since the Leased Premises, as described
in Exhibit "A" includes unpatented mining claims, Owner represents and
warrants to Lessee: (1) that Lessor's title is subject to paramount
title of the United States of America and to the fights, if any, of
surface patentees; (2) that the acts of location performed by Lessor
on the unpatented mining claims described in Exhibit "A" have
been completed in compliance with the laws of the State of Utah and
of the United States of America; and (3) that the Notice Of Intent To
Hold has been completed and filed with the Beaver County Recorder and
the BLM in Salt Lake City, Utah.
(d) Lessor have delivered to Lessee all information concerning
title to the Properties in Lessor's possession or control, including,
but not limited to, true and correct copies of all leases or other
Contracts relating to the Properties of which Lessor has knowledge.
(e) Except as disclosed in Exhibit A, there are no pending or
threatened actions, suits, claims or proceedings with respect to the
Properties.
(f) Except as disclosed in Exhibit A. Lessor is aware of any
adverse environmental condition on or affecting the Properties.
(g) Except as disclosed in Exhibit A, Lessor has any material
contractual commitments obligations which relate to or affect the
Properties.
Notwithstanding any other provision of this Section 2.2, Lessor makes the
representations and
-5-
warranties contained in this Section to the best of its knowledge and belief,
except that with respect to claims arising by, through or under Lessor or any,
its Affiliates, such representations and warranties (except those contained in
Section 2.2(c) identified as being made on knowledge and belief) shall be
absolute. The representations and warranties set forth above shall survive the
execution and delivery of any documents of Transfer provided under this
Agreement.
2.3 Disclosures, Each of the Participants represents and warrants
-----------
that it is unaware of any material facts or circumstances which have not been
disclosed in this Agreement, which should be disclosed to the other Participant
in order to prevent the representations in this Article II from being materially
misleading.
2.4 Covenants, Lessee covenant and agree as follows:
---------
(a) At any time, they will give prompt notice Lessor (during the
Exploration Period) of any notice of default, lawsuit, proceeding, action or
damage of which either Lessee becomes aware and which might affect the
Properties either Participant's title to the Properties.
(b) Notwithstanding any other provision of this Agreement, during
the Exploration Period neither of them will Transfer any interest in any
property located in the Area of Interest, except as between themselves and then
only upon 14-day prior notice to Lessee, nor will either of them conduct,
without Lessor's prior written consent, any property acquisition, exploration,
claim staking or mining operations within the Area of Interest.
(c) At any time, they will use their best efforts to assist
Lessor (during the Exploration Period) in obtaining necessary permits or
approvals, access to the Properties and water rights to the extent required by
or for operations hereunder, and to assist Lessee in informing Lessor of legal,
title and mining problems which may affect the Properties.
(d) They will make available to Lessor, its employees and agents,
any and all data, maps, other documents or information which either of them may
have or may acquire pertaining to the Properties.
2.5 Record Title and Lessor's Interest.
----------------------------------
(a) Title to the mining claims shall be held by Lessor.
(b) Lessee will at all times maintain Utah Clay Technology, Inc.,
in good standing . and qualified to own property under the laws of the State of
Utah.
-6-
ARTICLE III
-----------
NAME. PURPOSES AND TERM
-----------------------
3.1 General. Lessor and Lessee hereby enter into this Agreement for
-------
the purposes hereinafter stated and agree that all of their rights and all of
the Operations on or in connection with the Properties or the Area of Interest
shall be subject to and governed by this Agreement.
3.2 Name. The name of this mine shall be The Joy Clay. Lessee during
----
the Exploration Period and, thereafter, shall accomplish any registration
required by applicable assumed or fictitious name statutes and similar statutes.
3.3 Purposes. This Agreement is entered into for the following
--------
purposes and for no others, and shall serve as the exclusive means by which the
Participants, or either of them, accomplish such purposes:
(a) to conduct Exploration within the Area Interest,
(b) to acquire additional Properties within the Area of Interest,
(c) to evaluate the possible Development of the Properties,
(d) to engage in Development and Mining Operations on the
Properties,
(e) to engage in marketing Products, and
(f) to perform any other activity necessary appropriate, or
incidental to any of the foregoing.
3.4 Limitation. Unless the Participants otherwise agree in writing,
----------
the development and operations shall be limited to the purposes described in
Section 3.3, and nothing in this Agreement shall be construed to enlarge such
purposes.
3.5 Term. The primary term of this Lease shall be for a period of
----
three (3) years from the date hereof and for so long thereafter as Leased
Minerals are produced in commercial quantities at more than 500 tons/month from
the lands described in Exhibit A by the Lessee, their partners, successors or
assigns, for at least ten months of each year after the initial three (3)
year term has expired, subject to extension or termination as hereinafter
provided.
3.6 This Lease and the terms and conditions of this Lease agreement
issued by the Lessor are made with the Lessee herein on condition that Lessee
and any lawful successor in interest to Lessee shall perform all covenants and
terms and conditions herein set forth to be performed by
-7-
Lessee or its lawful assigns including payment of royalties as herein provided.
Lessor may issue written notice of termination and cancellation of this Lease,
and forfeiture, subject to paragraph 9.1: declaring that the Leased Premises and
each and every part thereof have thereby reverted to the Lessor, including any
and all fixtures and improvements required to be left with the property upon
expiration, termination, or cancellation of this Lease.
3.7 Lessee may terminate this Lease at any time by giving Lessors at
least ninety (90) days prior written notice, together with a check in full
settlement of any royalties that are due and unpaid; upon giving such notice of
termination, Lessee shall be released of all its obligations except those
obligations which have theretofore accrued. Within Thirty (30) days after date
of termination, Lessee shall execute and record a release and quitclaim deed
releasing all of Lessee's right, title and interest in and to the Leased
Premises.
3.8 Upon the effective date of termination by Lessee, Lessor shall be
entitled to retain all funds paid to it by Lessee pursuant to this Lease.
3.9 Within sixty (60) days after termination from this Lease,
Lessee or its successor or assign will provide Lessor with a copy of all data
prepared, collected, and interpreted by or for it (including maps, drill data,
assays, analyses, geological surveys, topographic surveys, market studies, flow
sheets, processing studies, and all other data) pertaining to the Leased
Premises and the Leased Minerals. Lessee will provide readable copies of all new
factual geologic data and reports by February 15th of each year.
ARTICLE IV
----------
CONSIDERATION
-------------
4.1 The Lessee in consideration of the granting of the rights and
privileges granted herein hereby covenants and agrees as follows:
A). Annual Labor:
------------
(1) To perform upon or for the benefit of the Leased Premises the
annual assessment work as set forth under the laws of the United States and the
State of Utah, and to prepare timely proof of the performance of such labor and
to record and file the same as required by law, and to furnish Lessor with a
copy thereof. Should this Lease be terminated as herein provided and the
effective date of such termination shall be ninety (90) days, or less, prior to
the end of the then current assessment year, Lessee shall nevertheless be
required to perform upon Or for the benefit of the Leased Premises the annual
labor for such assessment year and shall prepare timely proof thereof, record
the same, and furnish Lessor with a copy of such proof as hereinafter provided.
In the performance of annual labor upon or for the benefit of the Leased
Premises, Lessee shall be entitled to perform such work upon any of the claims
or upon any of
-8-
the groups of claims comprising the Leased Premises or upon other claims lying
outside the Leased Premises so long as such work shall qualify for the purpose
of the development of the Leased Premises as a contiguous group pursuant to the
requirements of law relating to group work on mining claims except as herein
provided.
(2) Assessment work will be completed by July 15 of each year starting
with the 1994 Assessment Year, or Lessor may do the work and charge reasonable
costs time and expenses to Lessee, Lessee will furnish to Lessor a copy of the
proof-of-labor with the County and the BLM time-stamp on it, no later than
September 15th of each year.
B). RESERVED ROYALTY:
(1) To pay lessor a three percent (3%) royalty on all ores, minerals
or products (herein called "Production") mined and removed from the Leased
Premises. Said royalty shall be calculated based upon the gross value of the
Production. In the event Production is removed from the Leased Premises and
stockpiled, royalty shall be payable six(6) months after removal and the gross
value shall be deemed the highest value received for comparable material sold
from the Leased Premises or from the nearest mine or property to the Leased
Premises.
(2) Production royalty shall be paid within thirty (30) days after
receipt of payment for each shipment or when otherwise due, and each payment
shall be accompanied by a statement showing the date(s) of shipment(s), quantity
and value of each shipment, to whom sold and the gross Value received, and any
cost deductions. Production royalty payments not made when due shall bear
interest at the rate of 1 1/2% per calendar month or fraction thereof until paid
in full.
(3) Method of Production royalty payments shall be in U.S. dollars
payable by cash or valid check drawn on available funds, and shall be deemed
made when deposited at Lessor's single depository at:
FIRST UTAH BANK
3826 South 2300 East
Salt Lake City, Utah 84109
phone (801) 272-9454
Lessor may change its single depository at any time by giving written notice to
Lessee.
-9-
ARTICLE V
---------
APPOINTMENT OF AGENT BY LESSOR
------------------------------
5.1 Lessor hereby appoints Daniel H. Engh as their agent and
attorney-in-fact for the purpose of representing the claim owners as a group,
and authorize him to take all necessary or desirable actions on behalf of
Lessor. This appointment shall be without limitation and remain in force until
said agent resigns or is replaced by a newly appointed agent for the entire
group of owners.
ARTICLE VI
----------
PERIODIC REPORTS
----------------
6.1 Lessee agrees to make semi-annual written reports to lessor (on
or before January 1 and July I each year) detailing the exploration, development
and mining work done upon the leased premises, the dates, quantity and value of
ores, minerals or products shipped from the Leased Premises, the identity of the
buyer(s) thereof or the place where such ores, minerals or products are
stockpiled, the plans for the Leased Premises during the next six (6) month
period, and other activities conducted or planned for the Leased Premises. also,
Lessee will provide Lessor with a copy of all data prepared, collected, and
interpreted by or for it (including maps, drill data, assays, analyses,
geological surveys, topographic surveys, market studies, flow sheets, processing
studies, and all other data) pertaining to the Leased Premises and the Leased
Minerals. Lessee will provide readable copies of all new factual geologic data
and reports by January 1 and July 1 of each year.
6.2 Lessee shall audit all operations upon the Leased Premises at
least annually, and furnish to Lessor a copy of such audit within thirty (30)
days after completion.
ARTICLE VII
-----------
RIGHTS AND OBLIGATIONS OF LESSEE
--------------------------------
7.1 The Lessee will forthwith have and is hereby granted by Lessor
the right and privilege from the date hereof and so long thereafter as this
Lease remains in force and effect of entering into and upon the Leased
Premises and the right to drill and excavate thereon and therein holes, pits,
tunnels, shafts, and other such excavations and to conduct therein and
elsewhere such surveys, exploration, investigations, sampling, milling,
screening and other work
-10-
similar as well as dissimilar as Lessee in its sole judgment and discretion may
wish to know relating to any and all facts relative to the geology of the Leased
Premises, including but not limited to the geology of the Leased Minerals and
the mining, milling, beneficiating, and: marketing thereof, together with the
right to drain water and materials and to pile overburden at places most
convenient to Lessee, and the right to dig or bore wells and use any water in or
upon said lands and the right to construct and place upon said lands any and all
buildings, dams, drains, machinery, roads, railroads, pipe and power lines and
other improvements that may be convenient for said purposes, all of which
improvements will become the full and complete property of the Lessor upon
termination or assignment of Lease back to Lessor, and Lessee will be under no
further obligation or liability with respect thereto except for reclamation and
except as provided in paragraph 7.5 below. Lessee will have the paramount
possession and control of the Leased Premises with regard to the Leased Mineral
rights obtained herein during and throughout the life of this Lease and shall be
entitled to conduct therein and thereon all mining, milling and beneficiation
uses and purposes reasonably incident thereto as it shall deem satisfactory and
advantageous so far as Lessee tries not to interfere with the rights of the
Federal potassium leases. All work shall be conducted by Lessee as Lessee in its
sole judgment and discretion deems best and in a good and minerlike fashion.
Stockpiles and tailings covered by Lease, remain the property of the Lessor upon
surrender of Lease. Mining timbers in place shall remain affixed as part of the
Leased Premises unless released in writing to Lessee.
7.2 Lessor or his agents duly authorized in writing will have at all
reasonable times and at his own risk access to all parts of Leased Premises and
associated premises for the purposes of reasonable inspection of operations,
record keeping, and accounts to the end that Lessor might verify that the
specified royalty payments are being made properly and that operations are being
conducted in a minerlike fashion. Lessee will keep records in a businesslike
manner.
7.3 Any and all future leases, transfers, encumbrances or conveyances
of interests in the Leased Premises not covered by this Lease shall be
subordinate to and subject to the rights of Lessee, his successors, assigns of
sublessees, so long as this Lease is in force and effect.
7.4 Lessee shall pay all expenses incurred by it and shall permit no
liens to attach to Leased Premises on account of any debt for materials or
services furnished for the benefit of the Leased Premises while this Lease is in
effect.
7.5 Lessee will indemnify and forever hold harmless and defend Lessor
from any demand, claim, suit, judgment or liability resulting from the
exploratory or development activities of Lessee conducted pursuant to this
agreement. Upon request of Lessor, Lessee will furnish evidence of sufficient
workmen's compensation, liability and other insurance to cover anticipated
risks, or evidence that it is adequately self-insured for such contingencies.
7.6 Lessee agrees that Leased Mineralsfrom the Leased Premises shall
not be mixed or co-mingled with minerals, ore, substances or materials from
other properties or lands except as agreed by Lessor.
-11-
ARTICLE VIII
------------
PATENT OF CLAIMS
----------------
8.1 Upon request of Lessee at any time during the term of this Lease,
the Lessor agrees to undertake to obtain patent to any of the mining claims
designated by Lessee. Lessee, at its own expense, shall prepare all documents,
compile all data and comply in all respects with all applicable laws in this
endeavor, and Lessor shall execute all documents required for this purpose and
shall cooperate fully with Lessee in the patent application and proceedings.
8.2 The rights of Lessor and Lessee under this Lease will extend to
any and all amended, relocated, or patented claims referred to in Exhibit A.
Lessor and Lessee agree that all amendments, relocations, or staking new claims
in the claimed area, of the claims referred to in Exhibit A, will be made in the
name of Lessor. Some claims need amending and it is known hereby to the Lessee.
Any valid mining claims staked by Lessor, or his agents, within the Leased
Premises shall fall under and be a part of this Lease.
ARTICLE VIII
------------
DEFAULT AND FORCE MAJEURE
-------------------------
9.1 If Lessee will be in default in performing any obligations
(except the timely payment of royalties), Lessee shall lose no rights unless,
within sixty (60) days following written notice from Lessor, given at the
address herein specified, specifying such failure or breach, Lessee shall fail
to make such payment or undertake to cure such default by commencement and
follow through of appropriate performance, within a reasonable amount of time.
Upon such failure, Lessor may terminate this Lease.
9.2 If Lessee shall be prevented or delayed from performing its
obligations or performing any work which it desires to perform or is performing
by reason of act of nature, strike or threat of strike, fire, flood, war, mob
violence, court order, unavoidable casualties, or any other enumeration, beyond
the control of Lessee which cannot be overcome by the means normally employed in
performance and at comparable and reasonable expense, then the duration of this
Lease shall be extended for a period equal to the period of Force Majeure and
any failure to perform obligations shall not be deemed a breach of this Lease.
Lessee agrees to use reasonable diligence to remove such causes of disability as
may occur from time to time. This paragraph shall not excuse payment or delay
payment of royalties.
-12-
ARTICLE X
---------
LEASE PREMISES
--------------
10.1 The parties hereto agree that during the term of this Lease, in
the event title to any of the Leased Premises is contested by any person or
persons, corporation or corporations, or governmental agencies, Lessee will, at
its own election and expense, defend the title to any of the Leased Premises
before any court of competent jurisdiction or any administrative body. Lessee
will defend any actions for damages relating to exploration, development,
or mining activities by Lessee on Leased Premises.
10.2 Lessor, upon execution of this Lease, shall furnish Lessee with
copies of all property maps possessed by Lessor on the Leased Premises and
adjacent lands.
ARTICLE XI
----------
TAXES AND DUTIES
----------------
11.1 Lessee agrees to pay (i) all taxes hereafter levied and assessed
upon all machinery and improvements placed by Lessee upon the Leased Premises,
(ii) taxes hereafter levied upon the Leased Premises, including taxes assessed
by reason of net annual proceeds, and (iii) occupation or severance taxes
imposed upon the mining or production of Leased Minerals from the Leased
Premises or any other taxes, assessments or charges resulting from Lessee
activities on Leased Premises.
11.2 Lessor agrees to promptly transmit to Lessee any notices
pertaining to taxes, assessments and charges which Lessor may receive.
11.3 Lessee, in all operations under this Lease, will comply with
all applicable State and Federal laws, including the social laws relative
to employment, safety, workmen's compensation insurance, social security,
unemployment tax and tax withholding. Lessee shall hold Lessor harmless from
claims of damage to persons or property arising from Lessee's operations under
this Lease. Lessee will comply with hazardous waste, air and water quality
requirements.
11.4 Lessee will do all reclamation work required by the Bureau of
Land Management, the State of Utah or Beaver County in a timely manner.
-13-
ARTICLE XII
-----------
ASSIGNMENT AND TRANSFER
-----------------------
12.1 Lessee will not convey, assign or transfer its interest in
this lease or any part of this Lease without the prior notification and consent
in writing of the Lessor. The assignee party will, as a condition of consent to
the transfer, agree to be bound by and subject to the terms of this Lease.
Any assignee party will provided a photocopy of the executed copy of assignment
and is delivered to the other party. Overriding royalty assignments will not
become effective, even if otherwise valid without the consent in writing of the
Lessor. Lessee, its successor and assigns, may not assign or convey royalty,
overriding royalty, production payment or like interest in the Leased Premises
without Lessor's prior written consent.
ARTICLE XIII
------------
MISCELLANEOUS
-------------
13.1 This agreement shall be governed by the laws of the State of
Utah.
13.2 Title headings are for convenience only and shall not be deemed
a part of this Lease.
13.3 This Lease and Its Exhibit contain the entire agreement between
the parties and supersedes entirely any prior understandings whether oral
or written.
13.4 If any provisions of this Lease is or becomes void or
unenforceable by Force of Law, the other provisions shall remain valid and
enforceable.
13.5 Lessor's and Lessee's proper address shall be the following,
which either may change by giving written notice to the other.
Daniel H. Engh
2340 East Germania Circle
Sandy, Utah 84093
Utah Clay Technology, Inc.
3985 South 2000 East
Salt Lake City, Utah 8124
13.6 The failure to enforce at any time any provisions of this Lease,
shall in no way be
-14-
construed to be a waiver of such provisions, or to affect validity of the Lease.
13.7 This Lease shall be binding upon and inure to the benefit of
the successors and permitted assigns of the parties.
13.8 A Memorandum of this Lease may be filed by either party.
13.9 Lessee will diligently explore and conduct operations on or near
Leased Premises throughout the term of this Lease in a manner reasonably
calculated to advance the production of minerals from Leased Premises.
ARTICLE XIV
-----------
EXPLORATION REOUIREMENTS
------------------------
14.1 Lessor agrees to Utah Clay Technology, Inc. as the party that
will be the operator's of the exploration, and mining of the lode and placer
claims referred to in Exhibit A. Lessee agrees that it can not transfer or
assign all or part of being the operator of the exploration, and mining to any
other party.
IN WITNESS WHEREOF, this Lease has been executed and delivered by
Lessor to Lessee as of the day and year first above written.
/s/Daniel H. Engh
- ---------------------------------
Daniel H. Engh
LESSOR
/s/Dennis S. Engh
- ---------------------------------
Dennis S. Engh LESSOR
-15-
UTAH CLAY TECHNOLOGY, INC.
BY:
------------------------------
President
LESSEE
State of Utah
S.S.
County of Salt Lake
On this day of October, 1996, personally appeared before me,
Daniel H. Engh, Dennis S. Engh, Dennis S. Engh, having authority to sign as
- -------------------------------
President of Utah Clay Technology, Inc. and by authority of the board of
Directors, who acknowledged to me that they executed the foregoing document.
- ---------------------------------
NOTARY PUBLIC RESIDING AT:
----------------------
----------------------------------
----------------------------------
----------------------------------
-16-
EXHIBIT A
---------
To Mining Lease Agreement dated as of October
_______, 1996, by and among Daniel H. Engh,
Dennis S. Engh, and Utah Clay Technology, Inc.
PART I
- ------
With respect to the Properties, Daniel H. Engh and Dennis S. Engh are in
control of lode and placer claims described below:
The Property consists of Lode Claims and Placer claims. And are located in
TOwnships 13 South Range 11 West and Township 14 South 11 West, and Township 13
South 12 West and Township 13 South Range 10 West Salt Lake Medrian, Utah
County, Utah.
Claim Name Description UMC NUMBER
- ---------- ----------- ----------
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 120109
Hailstone Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120110
Hailstone #1 Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120111
Nola No. 1 Sec. 33, Twns. 13 So. R-11 W subdv SE 120119
Carole Ann Sec. 4, Twns. 14 So. R-11 W subdv NE 120116
Carol Ann No. 1 Sec. 34, Twns. 13 So. R-11 W subdv SW 120117
Nola Sec. 33, Twns. 13 So. R-11 W subdv NE 120118
Brian #1 Sec. 28, Twns. 14 So. R-11 W subdv NW 120120
Brian #2 Sec. 28, Twns. 14 So. R-ii W subdv NE 120121
Brian #3 Sec. 28, Twns. 14 So. R-11 W subdv SE 120122
Brian #4 Sec. 27, Twns. 14 So. R-11 W subdv NW 120123
Brian #5 Sec. 27, Twns. 14 So. R-11 W subdv SW 120124
Brian #6 Sec. 28, Twns. 14 So. R-ii W subdv SW 120125
Brian #10 Sec. 28, Twns. 14 So. R-1i W subdv NW 120126
Brian #11 Sec. 27, Twns. 14 So. R-11 W subdv NW 120127
Snowflake Sec. 4, Twns. 14 So. R-11 W subdv NE 120132
1
Snowflake #1 Sec. 4, Twns. 14 So. R-11 W subdv NE 120133
Snowflake #2 Sec. 4, Twns. 14 So. R-11 W subdv NE 120134
Snowflake #3 Sec. 4, Twns. 14 So. R-11 W subdv E2 120135
Linda Sec. 33, & 34, Twns. 13 So. R-ii W subdv SE & SW 120136
Linda #1 Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120137
Linda #2 Sec. 33, Twns. 13 So. R-il W subdv E2 120138
Linda #3 Sec. 33, Twns. 13 So. R-11 W subdv E2 120139
Linda #4 Sec. 33, Twns. 13 So. R-11 W subdv E2 120140
Linda #5 Sec. 33, Twns. 13 So. R-11 W subdv E2 120141
Linda #6 Sec. 33, Twns. 13 So. R-11 W subdv E2 120142
Brian #10 Sec. 28, Twns. 14 So. R-11 W subdv all 302968
Brian #11 Sec. 27, Twns. 14 So. R-11 W subdv W2 302969
Linda #5 Sec. 33, Twns. 13 So. R-11 W subdv All 302978
Linda #6 Sec. 33, Twns. 13 So. R-11 W subdv NE 302979
Linda Sec. 34, Twns. 13 So. R-11 W subdv W2 302992
Linda #1 Sec. 34, Twns. 13 So. R-11 W subdv E2 302993
Linda #2 Sec. 34, Twns. 13 So. R-11 W subdv E2 302994
Linda #3 Sec. 33, Twns. 13 So. R-11 W subdv E2 302995
Linda #4 Sec. 33, Twns. 13 So. R-11 W subdv E2 302996
Snowflake Sec. 33, Twns. 13 So. R-11 W subdv SE 302997
Snowflake #1 Sec. 33, Twns. 13 So. R-il W subdv SE 302998
Snowflake #2 Sec. 33, Twns. 13 So. R-11 W subdv SE 302999
Snowflake #3 Sec. 4, Twns. 14 So. R-11 W subdv E2 303000
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 303001
Hailstone #1 Sec. 33 & 34, Twns. 13 So. R-il W subdv SE & SW 303002
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 303025
Nola No 1 Sec. 28, Twns. 13 So. R-11 W subdv SE 303026
Nola Sec. 33, Twns. 13 So. R-11 W subdv NE 303027
Carole Ann Sec. 4, Twns. 14 So. R-11 W subdv NE 303028
Carole Ann #1 Sec. 4, Twns. 14 So. R-11 W subdv SW 303029
Brian #1 Sec. 28, Twns. 13 So. R-1i W subdv NW 303034
Brian #2 Sec. 28, Twns. 13 So. R-11 W subdv NE 303035
Brian #3 Sec. 28, Twns. 13 So. R-11 W subdv SE 303036
Brian #4 Sec. 27, Twns. 13 So. R-11 W subdv NW 303037
Brian #5 Sec. 27, Twns. 13 So. R-11 W subdv SW 303038
Brian #6 Sec. 28, Twns. 13 So. R-11 W subdv SW 303039
This mining lease contains a Reserved Royalty of 3% on all ores,
2
minerals or Products (called "Production,,) mined and removed from the leased
Premises. Said Royalty shall be Calculated based upon the gross value of the
production. Additionally, the claims above, lode or placer claims have a minimum
royalty of $5,000.00 and or a production royalty of $2.50/ton which is adjusted
by the Consumer Prices Index for all Urban Consumers for U.S. City average as
published by the U.S. Department of Labor Bureau of Labor Statistics.
With respect to the Properties, Daniel H. Engh and Dennis S. Engh have a mining
lease Dated June 19th 1993 by and between Don W. Fullmer (Lessor) and Daniel H.
Engh, Dennis S. Engh (Lessee). All terms and conditions of the June 19, 1993
mining lease will be a part of this mining lease. Said claims of this mining
lease are described above:
3
Dated October --, 1996
PART 2
- ------
Area of Interest
All lands within the following described Areas of Interest including:
T13S, RllW
T14S, RllW
T14S, R12W
T13S, R12W
and any lands in Township 13 South 13 West, Township 14 South 14 West
to define the boundary of Area of interest.
4
ADDENDUM TO MINING LEASE
This Addendum to Mining Lease is made this l$th day of March, 2000 by
and between Don W. Fullmer and Arnola B. Fullmer, his wife, 905 North Main
Street, Fillmore: Utah 94631, hereinafter referred to as "Lessor" and Daniel H.
Engh and Dennis S. Engh whose address is 2340 East Gennama Circle, Sandy, Utah
84093-1174, hereinafter referred to as "Lessee."
In consideration, of bringing minimum royalty payments up to date
though payments in the amount of $19,775.62, the receipt and adequacy of which
is hereby acknowledged. Lessor hereby acknowledges that the items of default
contained in file Notice dated December 31, 1999, incorporated by this
reference, are hereby satisfied in full or waived as to past acts only.
In consideration of the foregoing funds paid to Lessor, Lessor also
ratifies file following Mining Lease No. 2-dated June 19, 1993 with Daniel H.
Engh and Dennis S. Engh as being in full force and effect, without any
modification of the lease or any waiver of the lease terms as to future
performance, except at Paragraph 3.1 of the Mining Lease, the primary term and
the requirement to obtain commercial production are extended for five (5) years
from the date hereof.
The leases and claims covered thereby are more particularly described
on the attached Exhibit A, incorporated by this reference.
This Addendum shall be effective on the date above.
/s/Don W. Fullmer /s/Daniel H. Engh
- --------------------------------- ----------------------------------
Don W. Fullmcr, (Lessor) Daniel H. Engh, (Lessee)
/s/Arnola B. Fullmer /s/Dennis S. Engh
- --------------------------------- ----------------------------------
Areola B. Fullmer, (Lessor) Dennis S. Engh, (Lessee)
To The ADDENDUM TO MINING LEASE
Page 2
STATE OF UTAH
SS
County of Millard
On this 15 day of March, 2000, personally appeared before me Don W. Fullmer
and Areola B. Fullmer, his wife, who acknowledged to me that they executed the
foregoing Addendum to Mining Lease.
----------------------------------
NOTARY PUBLIC
Residing at: 390 S. 100E
----------------------
My Commission Expires: Fillmore, UT
- ---------------------
To The ADDENDUM TO MINING LEASE
Page 2
STATE OF UTAH
SS
County of Millard
On this 15 day of March, 2000, personally appeared before me Don W. Fullmer
and Areola B. Fullmer, his wife, who acknowledged to me that they executed the
foregoing Addendum to Mining Lease.
----------------------------------
NOTARY PUBLIC
Residing at: 390 S. 100E
----------------------
My Commission Expires: Fillmore, UT
- ---------------------
STATE OF UTAH
SS
County of Millard
On this 15 day of March, 2000, personally appeared before me Daniel H.
Engh and Dennis S. Engh, who acknowledged to me that they executed the foregoing
Addendum to Mining Lease.
----------------------------------
NOTARY PUBLIC
Residing at: 390 S. 100E
----------------------
My Commission Expires: Fillmore, UT
- --------------------
To The ADDENDUM TO MINING LEASE
Page 3
Exhibit A
Mining Lease #2
- ---------------
With respect to tile Propez~ics. Daniel H. Engh and Dennis S, Engh have a MINING
LEASE AGREEMENT Dated June 19tj 1993 by and between Don W. Fullmer (Lessor) and
Daniel H. Engh. Dennis S. Engh (Lessee). All terms said conditions of the June
19, 1993 MINING LEASE AGREEMENT will be a part of this Letter Agreement. Said
claims of this MINING LEASE AGREEMENT are described below:
Tile Property consists of Lode Claims and Placer claims. And are located in
Townships 13 South Range 11 West and Township 14 South 11 West and Township 13
South 12 West and Township 13 South Range 10 West Salt Lake Medrian, Juab
County, Utah.
Claim Name Description UMB NUMBER
---------- ----------- ----------
Hailstone Sec. 33, Twns. 13 So. R-1l W subdv SE 120109
Hailstone Sec. 33, & 34, Twns, 13 So. R-11 W subdv SE & SW 120110
Hailstone #1 Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120111
Nola No. 1 Sec. 33, Twns. 13 So. R-11 W subdv SE 120119
Carole Ann Sec. 4, Twns. 14 So. R-11 W subdv NE 120116
Carol Ann No. 1 Sec. 34, Twns. 13 So. R-11 W subdv SW 120117
Nola Sec. 33, Twns. 12 So. R-11 W subdv NE 120118
Brian #1 Sec. 28 Twns. 14 So. R-11 W subdv NW 120120
Brian #2 Sec. 28, Twns. 14 So. R-11 W subdv NE 120121
Brian #3 Sec. 28, Twns. 14 So. R-11 W subdv SE 120122
Brian #4 Sec. 27, Twns. 14 So. R-11 W subdv NW 120123
Brian #5 S%c. 27, Twns. 14 So. R-1l W subdv SW 120124
Brian #6 Sec. 28, Twns. 14 So. R-11 W subdv SW 120125
Brian #10 Sec. 28, Twns. 14 So. R-1l W subdv NW 120126
Brian #11 Sec. 27, Twns. 14 So. R-1l W subdv NW 120127
Snowflake Sec. 4, Twns. 14 So. R-11 W subdv NE 120132
Snowflake #1 Sec. 4, Twns. 14 So. R-11 W subdv NE 120133
Snowflake #2 Sec. 4, Twns. 14 So. R-11 W subdv NE 120134
Snowflake #3 Sec. 4, ?wns. 14 So. R-11 W subdv E2 120135
Linda Sec. 33, & 34, Twns. 13 So. R-1l W subdv SE & SW 120136
Linda #1 Sec. 33, & 34, Twns. 13 So. R-1l W subdv SE & SW 120137
Linda #2 Sec. 33, Twns. 13 So. R-11 W subdv E2 120138
Linda #3 Sec. 33, Twns. 13 So. R-11 W subdv E2 120139
Linda #4 Sac. 33, Twns. 13 So. R-1l W subdv E2 120140
Linda #5 Sec. 33, Twns. 13 So. R-11 W subdv E2 120141
To The ADDENDUM TO MINING LEASE
Page 4
Linda #6 Sec. 33, Twns. 13 So. R-l1 W subdv E2 120142
Brian #10 Sec. 28, Twns. 14 So. R-11 W subdv all 302968
Brian #11 Sec. 27, Twns. 14 So. R-11 W subdv W2 302969
Linda #5 Sec. 33, Twns. 13 So. R-11 W subdv All 302978
Linda #6 Sec. 33, Twns. 13 So. R-11 W subdv NE 302979
Linda Sec. 34, Twns. 13 Sc. R-11 W subdv W2 302992
Linda #1 Sec. 34, Twns. 13 So. R-11 W subdv E2 302993
Linda #2 Sec. 34, Twns. 12 So. R-1l W subdv E2 302994
Linda #3 Sec. 33, Twns. 13 So. R-11 W subdv E2 202995
Linda #4 Sec. 23, Twns. 13 So. R-11 W subdv E2 302996
Snowflake Sec. 33, Twns. 13 So. R-11 W subdv SE 302997
Snowflake #1 Sec. 32, Twns. 13 So. R-II W subdv SE 302998
Snowflake #2 Sec. 22, Twns. 13 So. R-11 W subdv SE 302999
Snowflake #3 Sec. 4, Twnns. 14 So. R-11 W subdv E2 303000
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 303001
Hailstone #1 Sec. 33 & 24, Twns. 13 So. R-11 W subdv SE & SW 303002
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 303025
Nola No 1 Sec. 28, Twns. 13 So. R-l1 W subdv SE 303026
Nola Sec. 33, Twns. 13 So. R-1l W subdv NE 303027
Carole Ann Sec. 4, Twns. 14 So. R-ll W subdv NE 303028
Carole Ann #1 Sec. 4, Twns. 14 So. R-1l W subdv SW 303029
Brian #1 Sec, 28, Twns. 12 So. R-11 W subdv NW 303034
Brian #2 Sec. 28, Twns. 12 So. R-11 W subdv NE 303035
Brian #3 Sec. 28, Twns. 13 So. R-11 W subdv SE 303036
Brian #4 Sec. 27, Twns. 12 So. R-11 W subdv NW 303037
Brian #5 Sec. 27, Twns, 13 So. R-11 W subdv SW 303038
Brian #6 Sec. 28, Twns. 13 So. R-11 W subdv SW 303039
End of Exhibit A.
ADDENDUM TO OPTION TO ENTER INTO MINING LEASE
(JOY AREA)
This Addendum to the OPTION TO ENTER INTO MINING LEASE, herein referred
to as "Option", made and entered into the 27th day of March, 2000, by and
between Daniel H. Engh, Dennis S. Engh (Optionor) and Kaolin Of The West, LLC.
(Optionee), a Utah Limited Liability Company:
In consideration, of providing copies of testing, analysis and
geological mapping of the Joy Area claims describe in Exhibit A and the
acknowledgment of the payments due the Optionor from the starting date of
September 30th, 1996, the receipt of information and acknowledgment of payments
due is adequacy of which is hereby acknowledged.
In consideration of the foregoing acknowledgment to Optionor, Optionor
also ratifies the following OPTION TO ENTER INTO MINING LEASE for the Joy Area
claims described in Exhibit A - dated September 30th, 1996 with KAOLIN OF THE
WEST, LLC., as being in full force and effect, without any modification of the
option or any waiver of the option terms as to future performance, except at
Paragraph 2 of the OPTION TO ENTER INTO MINING LEASE, the exercising the option
is extended for four (4) years from the date hereof.
The leases and claims covered thereby are more particularly described on
the attached Exhibit A, incorporated by this reference.
IN WITNESS WHEREOF, this ADDENDUM TO OPTION TO ENTER INTO MINING LEASE
has been executed and delivered by Optionor to Optionee as of the day and year
first above written.
To The ADDENDUM TO OPTION TO ENTER INTO MINING LEASE (JOY AREA)
Page 5 of 4
Signed this 27th day of March, 2000.
Kaolin Of The West, LLC.
/s/ Daniel H. Engh BY: /s/ Dennis S. Engh
- --------------------------------- -----------------------------------
Daniel H. Engh, Optionor Its: Manager
Optionee
/s/ Dennis S. Engh
- ---------------------------------
Dennis S. Engh, Optionor
To The ADDENDUM TO OPTION TO ENTER INTO MINING LEASE (JOY AREA)
Page 3 of 4
Exhibit A
ADDENDUM TO OPTION TO ENTER INTO MINING LEASE (JOY AREA)
- --------------------------------------------------------
To the OPTION TO ENTER INTO MINING LEASE Agreement dated as of September 30th,
1996, by and among Daniel H. Engh, Dennis S. Engh and Kaolin Of The West, LLC.,
a Utah Limited Liability Company:
PART 1
- ------
With respect to the Properties, Daniel H. Engh and Dennis S. Engh are in
control of lode and placer claims described below:
The Property consists of Lode Claims and Placer claims. And are located in
Townships 13 South Range 11 West and Township 14 South 11 West, and Township 13
South 12 West and Township 13 South Range 10 West Salt Lake Medrian, Juab
County, Utah.
Claim Name Description UMC NUMBER
- --------------------------------------------------------------------------------
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 120109
Hailstone Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120110
Hailstone #1 Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120111
Nola No. 1 Sec. 33, Twns. 13 So. R-11 W subdv SE 120119
Carole Ann Sec. 4, Twns. 14 So. R-11 W subdv NE 120116
Carol Ann No. 1 Sec. 34, Twns. 13 So. R-11 W subdv SW 120117
Nola Sec. 33, Twns. 13 So. R-11 W subdv NE 120118
Brian #1 Sec. 28, Twns. 14 So. R-11 W subdv NW 120120
Brian #2 Sec. 28, Twns. 14 So. R-11 W subdv NE 120121
Brian #3 Sec. 28, Twns. 14 So. R-11 W subdv SE 120122
Brian #4 Sec. 27, Twns. 14 So. R-11 W subdv NW 120123
Brian #5 Sec. 27, Twns. 14 So. R-11 W subdv SW 120124
Brian #6 Sec. 28, Twns. 14 So. R-11 W subdv SW 120125
Brian #10 Sec. 28, Twns. 14 So. R-11 W subdv NW 120126
Brian #11 Sec. 27, Twns. 14 So. R-11 W subdv NW 120127
Snowflake Sec. 4, Twns. 14 So. R-11 W subdv NE 120132
Snowflake #1 Sec. 4, Twns. 14 So. R-11 W subdv NE 120133
Snowflake #2 Sec. 4, Twns. 14 So. R-11 W subdv NE 120134
Snowflake #3 Sec. 4, Twns. 14 So. R-11 W subdv E2 120135
Linda Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120136
Linda #1 Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120137
Linda #2 Sec. 33, Twns. 13 So. R-11 W subdv E2 120138
To The ADDENDUM TO OPTION TO ENTER INTO MINING LEASE (JOY AREA)
Page 3 of 4
Linda #3 Sec. 33, Twns. 13 So. R-11 W subdv E2 120139
Linda #4 Sec. 33, Twns. 13 So. R-11 W subdv E2 120140
Linda #5 Sec. 33, Twns. 13 So. R-11 W subdv E2 120141
Linda #6 Sec. 33, Twns. 13 So. R-11 W subdv E2 120142
Brian #10 Sec. 28, Twns. 14 So. R-11 W subdv all 302968
Brian #11 Sec. 27, Twns. 14 So. R-11 W subdv W2 302969
Linda #5 Sec. 33, Twns. 13 So. R-11 W subdv All 302978
Linda #6 Sec. 33, Twns. 13 So. R-11 W subdv NE 302979
Linda Sec. 34, Twns. 13 So. R-11 W subdv W2 302992
Linda #1 Sec. 34, Twns. 13 So. R-11 W subdv E2 302993
Linda #2 Sec. 34, Twns. 13 So. R-11 W subdv E2 302994
Linda #3 Sec. 33, Twns. 13 So. R-11 W subdv E2 302995
Linda #4 Sec. 33, Twns. 13 So. R-11 W subdv E2 302996
Snowflake Sec. 33, Twns. 13 So. R-11 W subdv SE 302997
Snowflake #1 Sec. 33, Twns. 13 So. R-11 W subdv SE 302998
Snowflake #2 Sec. 33, Twns. 13 So. R-11 W subdv SE 302999
Snowflake #3 Sec. 4, Twns. 14 So. R-11 W subdv E2 303000
To The ADDENDUM TO OPTION TO ENTER INTO MINING LEASE (JOY AREA)
Page 4 of 4
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 303001
Hailstone #1 Sec. 33 & 34, Twns. 13 So. R-11 W subdv SE & SW 303002
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 303025
Nola No 1 Sec. 28, Twns. 13 So. R-11 W subdv SE 303026
Nola Sec. 33, Twns. 13 So. R-11 W subdv NE 303027
Carole Ann Sec. 4, Twns. 14 So. R-11 W subdv NE 303028
Carole Ann #1 Sec. 4, Twns. 14 So. R-11 W subdv SW 303029
Brian #1 Sec. 28, Twns. 13 So. R-11 W subdv NW 303034
Brian #2 Sec. 28, Twns. 13 So. R-11 W subdv NE 303035
Brian #3 Sec. 28, Twns. 13 So. R-11 W subdv SE 303036
Brian #4 Sec. 27, Twns. 13 So. R-11 W subdv NW 303037
Brian #5 Sec. 27, Twns. 13 So. R-11 W subdv SW 303038
Brian #6 Sec. 28, Twns. 13 So. R-11 W subdv SW 303039
This mining lease contains a Reserved Royalty of 3% on all ores, minerals or
Products (called "Production") mined and removed from the leased Premises. Said
Royalty shall be calculated based upon the gross value of the production.
Additionally, the claims above, lode or placer claims have a minimum royalty of
$5,000.00 and or a production royalty of $2.50/ton which is adjusted by the
Consumer Prices Index for all Urban Consumers for U.S. City average as published
by the U.S. Department of Labor Bureau of Labor Statistics.
To The ADDENDUM TO OPTION TO ENTER INTO MINING LEASE (JOY AREA)
Page 5 of 4
With respect to the Properties, Daniel H. Engh and Dennis S. Engh have a mining
lease Dated June 19th 1993 by and between Don W. Fullmer (Lessor) and Daniel H.
Engh, Dennis S. Engh (Lessee). All terms and conditions of the June 19, 1993
mining lease will be a part of this mining lease. Said claims of this mining
lease are described above:
End of Exhibit A.
ADDENDUM TO OPTION TO ENTER INTO MINING LEASE
(JOY AREA)
This Addendum to the OPTION TO ENTER INTO MINING LEASE, herein referred
to as "Option", made and entered into the 27th day of March, 2000, by and
between Kaolin Of The West, LLC., a Utah Limited Liability Company at 4532
Briarcreek Street, Salt Lake City, Utah 84117 hereinafter referred to as the
(Optionor) and Utah Clay Technology, Inc., at 3985 South 2000 East, Salt Lake
City, Utah 84124, hereinafter referred to as (Optionee), a Utah corporation:
In consideration, of providing copies of testing, analysis and
geological mapping of the Joy Area claims describe in Exhibit A and the
acknowledgment of the payments due the Optionor from the starting date of
September 30th, 1996, the receipt of information and acknowledgment of payments
due is adequacy of which is hereby acknowledged.
In consideration of the foregoing acknowledgment to Optionor, Optionor
also ratifies the following OPTION TO ENTER INTO MINING LEASE for the Joy Area
claims described in Exhibit A - dated September 30th, 1996 with UTAH CLAY
TECHNOLOGY INC., as being in full force and effect, without any modification of
the option or any waiver of the option terms as to future performance, except at
Paragraphs 1(C) and 2 of the OPTION TO ENTER INTO MINING LEASE, the exercising
the option is extended for four (4) years from the date hereof.
The leases and claims covered thereby are more particularly described on
the attached Exhibit A, incorporated by this reference.
ADDENDUM TO OPTION TO ENTER INTO MINING LEASE
(JOY AREA)
IN WITNESS WHEREOF, this ADDENDUM TO OPTION TO ENTER INTO MINING LEASE
has been executed and delivered by Optionor to Optionee as of the day and year
first above written.
Signed this 27th day of March, 2000.
Kaolin Of The West, LLC. Utah Clay Technology, Inc.
BY: /s/ Dennis S. Engh BY: /s/ Dennis S. Engh
- --------------------------------- ----------------------------------
Its: Manager Its: President
Optionor Optionee
To The ADDENDUM TO OPTION TO ENTER INTO MINING LEASE (JOY AREA)
Page 3 of 4
Exhibit A
ADDENDUM TO OPTION TO ENTER INTO MINING LEASE (JOY AREA)
- --------------------------------------------------------
To the OPTION TO ENTER INTO MINING LEASE Agreement dated as of September 30th,
1996, by and among Kaolin Of The West, LLC., a Utah Limited Liability Company,
and Utah Clay Technology, Inc., a Utah Corporation.
PART 1
- ------
With respect to the Properties, Daniel H. Engh and Dennis S. Engh are in
control of lode and placer claims described below:
The Property consists of Lode Claims and Placer claims. And are located in
Townships 13 South Range 11 West and Township 14 South 11 West, and Township 13
South 12 West and Township 13 South Range 10 West Salt Lake Medrian, Juab
County, Utah.
Claim Name Description UMC NUMBER
- --------------------------------------------------------------------------------
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 120109
Hailstone Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120110
Hailstone #1 Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120111
Nola No. 1 Sec. 33, Twns. 13 So. R-11 W subdv SE 120119
Carole Ann Sec. 4, Twns. 14 So. R-11 W subdv NE 120116
Carol Ann No. 1 Sec. 34, Twns. 13 So. R-11 W subdv SW 120117
Nola Sec. 33, Twns. 13 So. R-11 W subdv NE 120118
Brian #1 Sec. 28, Twns. 14 So. R-11 W subdv NW 120120
Brian #2 Sec. 28, Twns. 14 So. R-11 W subdv NE 120121
Brian #3 Sec. 28, Twns. 14 So. R-11 W subdv SE 120122
Brian #4 Sec. 27, Twns. 14 So. R-11 W subdv NW 120123
Brian #5 Sec. 27, Twns. 14 So. R-11 W subdv SW 120124
Brian #6 Sec. 28, Twns. 14 So. R-11 W subdv SW 120125
Brian #10 Sec. 28, Twns. 14 So. R-11 W subdv NW 120126
Brian #11 Sec. 27, Twns. 14 So. R-11 W subdv NW 120127
Snowflake Sec. 4, Twns. 14 So. R-11 W subdv NE 120132
Snowflake #1 Sec. 4, Twns. 14 So. R-11 W subdv NE 120133
Snowflake #2 Sec. 4, Twns. 14 So. R-11 W subdv NE 120134
Snowflake #3 Sec. 4, Twns. 14 So. R-11 W subdv E2 120135
Linda Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120136
Linda #1 Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120137
Linda #2 Sec. 33, Twns. 13 So. R-11 W subdv E2 120138
Linda #3 Sec. 33, Twns. 13 So. R-11 W subdv E2 120139
Linda #4 Sec. 33, Twns. 13 So. R-11 W subdv E2 120140
Linda #5 Sec. 33, Twns. 13 So. R-11 W subdv E2 120141
Linda #6 Sec. 33, Twns. 13 So. R-11 W subdv E2 120142
Brian #10 Sec. 28, Twns. 14 So. R-11 W subdv all 302968
Brian #11 Sec. 27, Twns. 14 So. R-11 W subdv W2 302969
Linda #5 Sec. 33, Twns. 13 So. R-11 W subdv All 302978
Linda #6 Sec. 33, Twns. 13 So. R-11 W subdv NE 302979
Linda Sec. 34, Twns. 13 So. R-11 W subdv W2 302992
Linda #1 Sec. 34, Twns. 13 So. R-11 W subdv E2 302993
Linda #2 Sec. 34, Twns. 13 So. R-11 W subdv E2 302994
Linda #3 Sec. 33, Twns. 13 So. R-11 W subdv E2 302995
Linda #4 Sec. 33, Twns. 13 So. R-11 W subdv E2 302996
Snowflake Sec. 33, Twns. 13 So. R-11 W subdv SE 302997
Snowflake #1 Sec. 33, Twns. 13 So. R-11 W subdv SE 302998
Snowflake #2 Sec. 33, Twns. 13 So. R-11 W subdv SE 302999
Snowflake #3 Sec. 4, Twns. 14 So. R-11 W subdv E2 303000
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 303001
Hailstone #1 Sec. 33 & 34, Twns. 13 So. R-11 W subdv SE & SW 303002
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 303025
Nola No 1 Sec. 28, Twns. 13 So. R-11 W subdv SE 303026
Nola Sec. 33, Twns. 13 So. R-11 W subdv NE 303027
Carole Ann Sec. 4, Twns. 14 So. R-11 W subdv NE 303028
Carole Ann #1 Sec. 4, Twns. 14 So. R-11 W subdv SW 303029
Brian #1 Sec. 28, Twns. 13 So. R-11 W subdv NW 303034
Brian #2 Sec. 28, Twns. 13 So. R-11 W subdv NE 303035
Brian #3 Sec. 28, Twns. 13 So. R-11 W subdv SE 303036
Brian #4 Sec. 27, Twns. 13 So. R-11 W subdv NW 303037
Brian #5 Sec. 27, Twns. 13 So. R-11 W subdv SW 303038
Brian #6 Sec. 28, Twns. 13 So. R-11 W subdv SW 303039
This mining lease contains a Reserved Royalty of 3% on all ores, minerals or
Products (called "Production") mined and removed from the leased Premises. Said
Royalty shall be calculated based upon the gross value of the production.
Additionally, the claims above, lode or placer claims have a minimum royalty of
$5,000.00 and or a production royalty of $2.50/ton which is adjusted by the
Consumer Prices Index for all Urban Consumers for U.S. City average as published
by the U.S. Department of Labor Bureau of Labor Statistics.
With respect to the Properties, Daniel H. Engh and Dennis S. Engh have a mining
lease Dated June 19th 1993 by and between Don W. Fullmer (Lessor) and Daniel H.
Engh, Dennis S. Engh (Lessee). All terms and conditions of the June 19, 1993
mining lease will be a part of this mining lease. Said claims of this mining
lease are described above:
End of Exhibit A.
ADDENDUM TO OPTION TO ENTER INTO MINING LEASE
(JOY AREA)
This Addendum to the OPTION TO ENTER INTO MINING LEASE, herein referred
to as "Option", made and entered into the 27th day of March, 2000, by and
between Kaolin Of The West, LLC., a Utah Limited Liability Company at 4532
Briarcreek Street, Salt Lake City, Utah 84117 hereinafter referred to as the
(Optionor) and Utah Clay Technology, Inc., at 3985 South 2000 East, Salt Lake
City, Utah 84124, hereinafter referred to as (Optionee), a Utah corporation:
In consideration, of providing copies of testing, analysis and
geological mapping of the Joy Area claims describe in Exhibit A and the
acknowledgment of the payments due the Optionor from the starting date of
September 30th, 1996, the receipt of information and acknowledgment of payments
due is adequacy of which is hereby acknowledged.
In consideration of the foregoing acknowledgment to Optionor, Optionor
also ratifies the following OPTION TO ENTER INTO MINING LEASE for the Joy Area
claims described in Exhibit A - dated September 30th, 1996 with UTAH CLAY
TECHNOLOGY INC., as being in full force and effect, without any modification of
the option or any waiver of the option terms as to future performance, except at
Paragraphs 1(C) and 2 of the OPTION TO ENTER INTO MINING LEASE, the exercising
the option is extended for four (4) years from the date hereof.
The leases and claims covered thereby are more particularly described on
the attached Exhibit A, incorporated by this reference.
To The ADDENDUM TO OPTION TO ENTER INTO MINING LEASE(JOY AREA)
Page 5 of 4
IN WITNESS WHEREOF, this ADDENDUM TO OPTION TO ENTER INTO MINING LEASE
has been executed and delivered by Optionor to Optionee as of the day and year
first above written.
Signed this 27th day of March, 2000.
Kaolin Of The West, LLC. Utah Clay Technology, Inc.
BY: /s/ Dennis S. Engh BY: /s/ Dennis S. Engh
- --------------------------------- -----------------------------------
Its: Manager Its: President
Optionor Optionee
Exhibit A
ADDENDUM TO OPTION TO ENTER INTO MINING LEASE(JOY AREA)
To the OPTION TO ENTER INTO MINING LEASE Agreement dated as of September 30th,
1996, by and among Kaolin Of The West, LLC., a Utah Limited Liability Company,
and Utah Clay Technology, Inc., a Utah Corporation.
PART 1
With respect to the Properties, Daniel H. Engh and Dennis S. Engh are in
control of lode and placer claims described below:
The Property consists of Lode Claims and Placer claims. And are located in
Townships 13 South Range 11 West and Township 14 South 11 West, and Township 13
South 12 West and Township 13 South Range 10 West Salt Lake Medrian, Juab
County, Utah.
Claim Name Description UMC NUMBER
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 120109
Hailstone Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120110
Hailstone #1 Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120111
Nola No. 1 Sec. 33, Twns. 13 So. R-11 W subdv SE 120119
Carole Ann Sec. 4, Twns. 14 So. R-11 W subdv NE 120116
Carol Ann No. 1 Sec. 34, Twns. 13 So. R-11 W subdv SW 120117
Nola Sec. 33, Twns. 13 So. R-11 W subdv NE 120118
Brian #1 Sec. 28, Twns. 14 So. R-11 W subdv NW 120120
Brian #2 Sec. 28, Twns. 14 So. R-11 W subdv NE 120121
Brian #3 Sec. 28, Twns. 14 So. R-11 W subdv SE 120122
Brian #4 Sec. 27, Twns. 14 So. R-11 W subdv NW 120123
Brian #5 Sec. 27, Twns. 14 So. R-11 W subdv SW 120124
Brian #6 Sec. 28, Twns. 14 So. R-11 W subdv SW 120125
Brian #10 Sec. 28, Twns. 14 So. R-11 W subdv NW 120126
Brian #11 Sec. 27, Twns. 14 So. R-11 W subdv NW 120127
Snowflake Sec. 4, Twns. 14 So. R-11 W subdv NE 120132
Snowflake #1 Sec. 4, Twns. 14 So. R-11 W subdv NE 120133
Snowflake #2 Sec. 4, Twns. 14 So. R-11 W subdv NE 120134
Snowflake #3 Sec. 4, Twns. 14 So. R-11 W subdv E2 120135
Linda Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120136
Linda #1 Sec. 33, & 34, Twns. 13 So. R-11 W subdv SE & SW 120137
Linda #2 Sec. 33, Twns. 13 So. R-11 W subdv E2 120138
Linda #3 Sec. 33, Twns. 13 So. R-11 W subdv E2 120139
Linda #4 Sec. 33, Twns. 13 So. R-11 W subdv E2 120140
Linda #5 Sec. 33, Twns. 13 So. R-11 W subdv E2 120141
Linda #6 Sec. 33, Twns. 13 So. R-11 W subdv E2 120142
Brian #10 Sec. 28, Twns. 14 So. R-11 W subdv all 302968
Brian #11 Sec. 27, Twns. 14 So. R-11 W subdv W2 302969
Linda #5 Sec. 33, Twns. 13 So. R-11 W subdv All 302978
Linda #6 Sec. 33, Twns. 13 So. R-11 W subdv NE 302979
Linda Sec. 34, Twns. 13 So. R-11 W subdv W2 302992
Linda #1 Sec. 34, Twns. 13 So. R-11 W subdv E2 302993
Linda #2 Sec. 34, Twns. 13 So. R-11 W subdv E2 302994
Linda #3 Sec. 33, Twns. 13 So. R-11 W subdv E2 302995
Linda #4 Sec. 33, Twns. 13 So. R-11 W subdv E2 302996
Snowflake Sec. 33, Twns. 13 So. R-11 W subdv SE 302997
Snowflake #1 Sec. 33, Twns. 13 So. R-11 W subdv SE 302998
Snowflake #2 Sec. 33, Twns. 13 So. R-11 W subdv SE 302999
Snowflake #3 Sec. 4, Twns. 14 So. R-11 W subdv E2 303000
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 303001
Hailstone #1 Sec. 33 & 34, Twns. 13 So. R-11 W subdv SE & SW 303002
Hailstone Sec. 33, Twns. 13 So. R-11 W subdv SE 303025
Nola No 1 Sec. 28, Twns. 13 So. R-11 W subdv SE 303026
Nola Sec. 33, Twns. 13 So. R-11 W subdv NE 303027
Carole Ann Sec. 4, Twns. 14 So. R-11 W subdv NE 303028
Carole Ann #1 Sec. 4, Twns. 14 So. R-11 W subdv SW 303029
Brian #1 Sec. 28, Twns. 13 So. R-11 W subdv NW 303034
Brian #2 Sec. 28, Twns. 13 So. R-11 W subdv NE 303035
Brian #3 Sec. 28, Twns. 13 So. R-11 W subdv SE 303036
Brian #4 Sec. 27, Twns. 13 So. R-11 W subdv NW 303037
Brian #5 Sec. 27, Twns. 13 So. R-11 W subdv SW 303038
Brian #6 Sec. 28, Twns. 13 So. R-11 W subdv SW 303039
This mining lease contains a Reserved Royalty of 3% on all ores, minerals or
Products (called "Production") mined and removed from the leased Premises. Said
Royalty shall be calculated based upon the gross value of the production.
Additionally, the claims above, lode or placer claims have a minimum royalty of
$5,000.00 and or a production royalty of $2.50/ton which is adjusted by the
Consumer Prices Index for all Urban Consumers for U.S. City average as published
by the U.S. Department of Labor Bureau of Labor Statistics.
With respect to the Properties, Daniel H. Engh and Dennis S. Engh have a mining
lease Dated June 19th 1993 by and between Don W. Fullmer (Lessor) and Daniel H.
Engh, Dennis S. Engh (Lessee). All terms and conditions of the June 19, 1993
mining lease will be a part of this mining lease. Said claims of this mining
lease are described above:
End of Exhibit A.