ASSIGNMENT OF LEASE AND
CONSENT
THIS AGREEMENT dated for reference
the 29th day of June, 2005.
BETWEEN:
INDEPENDENCE GOLD-SILVER MINES
INC.,
a Washington corporation.
(the
“Lessor”)
OF THE FIRST PART
AND:
GOLD RANGE COMPANY, LLC.,
a Nevada limited liability
company.
(the
“Lessee”)
OF THE SECOND PART
AND:
GENERAL GOLD, INC.,
a Nevada corporation.
(the
“Assignee”)
OF THE THIRD PART
WHEREAS:
A. Pursuant
to the lease attached hereto as Schedule “A” (the
“Lease”) entered into between the Lessee and the
Lessor, the Lessor leased to the Lessee certain unpatented mining
claims (the “Leased Claims”) located in the Battle
Mountain District, Lander County, State of Nevada, as more
particularly described in the Lease;
B. The
Lessee requested the Lessor to consent to the assignment of the
Lease of the Leased Claims to the Assignee;
C. Pursuant
to the terms of the Lease the Lessor has agreed to the assignment
of the Lease by the Lessee to the Assignee; and
NOW THEREFORE in consideration of
the premises and other good and valuable consideration, receipt and
sufficiency of which is hereby acknowledged by each of the parties
hereto, the parties agree as follows:
1.
In this Agreement, the expression
“Lessee’s Covenants” means all obligations of the
Lessee as set out in the Lease or established by law arising during
the term of the Lease or any renewal thereof and, without limiting
the generality of the foregoing, includes the obligation to pay
rent and all other payments to the Lessor, now owing or to become
due in future and whether characterized as rent or not, and all
other obligations of the Lessee whether constituting conditions,
covenants, provisos, representations, undertakings or
warranties.
2.
The Lessee hereby assigns to the
Assignee and the Assignee hereby takes by assignment all of the
interest of the Lessee as lessee under the Lease.
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3.
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The Lessee hereby consents to the foregoing
assignment.
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4.
The consent herein contained is
restricted to the assignment of the Lessee to the Assignee set
forth in this Agreement and the prohibition contained in the Lease
against assignment or subletting by the Lessee will otherwise
remain in full force and effect and this consent will not be deemed
to be a consent to, nor waiver of the requirement for the
Lessor’s consent to, any further or other assignment of the
Lease or any part thereof or subletting of the Leased Claims or any
part thereof.
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5.
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The Assignee hereby covenants and agrees with
the Lessor as follows:
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(a)
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to perform all of the Lessee’s Covenants
as if the Assignee were named the lessee in the Lease and the
Assignee hereby acknowledges receipt of a copy of the Lease;
and
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(b)
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that the Assignee will not assign the Lease or
any part thereof or sublet or part with possession of the Leased
Claims or any part thereof except in accordance with the terms of
the Lease.
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6.
The Lessor represents to the
Assignee that, to the best of the Lessor’s knowledge, the
Lessee is not in default under the Lease.
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7.
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This Agreement will be deemed to be effective as
of June 29, 2005.
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8.
This Agreement will enure to the
benefit of, and be binding upon, the Lessor and the Lessee and
their respective successors and assigns and the Assignee and its
successors and permitted assigns under the Lease.
IN WITNESS WHEREOF the Lessor, the
Lessee and the Assignee have all executed this Agreement as of the
day and year first above written.
INDEPENDENCE GOLD-SILVER MINES
INC.
Per:
/s/ Albert M.
Franco
Authorized
Signatory
GOLD RANGE COMPANY, LLC.
Per:
/s/ Robert G.
Carrington
Authorized
Signatory
GENERAL GOLD, INC.
Per:
/s/ William
Whittle
Authorized
Signatory
SCHEDULE “A”
TO ASSIGNMENT OF LEASE AND CONSENT
Agreement of Lease dated July 13,
2005
between Independence Gold-Silver Mines Inc. and
Gold Range Company, LLC
MINING LEASE
THIS IS AN
AGREEMENT OF LEASE made and entered into this 13th day of July,
2005, by and between INDEPENDENCE GOLD-SILVER MINES INC., a
Washington corporation, hereinafter called "Lessor" or
"Independence" and GOLD RANGE COMPANY, LLC, a Nevada, USA
corporation, hereinafter called “Lessee” or “Gold
Range”, relating to certain unpatented mining claims situated
in the Battle Mountain Mining District, Lander County, State of
Nevada, owned by Independence and which are to be leased to Lessee
pursuant to this agreement, hereinafter called "Lease".
I. RECITAL
Independence is the owner, subject
to paramount title of the United States of America, of those
certain unpatented mining claims situated in the Battle Mountain
Mining District of Lander County, State of Nevada, certain of which
are described in Exhibit A attached hereto and made a part
hereof. All of these claims form a single mining claims group
referred to hereafter as "the premises" and "the
claims."
II.
COVENANTS
(1) Subject to the paramount title
of the United States of America, Independence does hereby
exclusively lease, let and demise to Lessee all the minerals upon
and underlying the said mining claims, and does hereby grant to
Lessee during the time that this Lease is in effect, in
consideration of the moneys to be payable as set forth in Section
V, and subject to the following reservations and limitations, and
other reservations and limitations in this Lease:
(a) To explore for minerals upon and
within and upon the foregoing claims;
(b) To mine or otherwise extract, to
mill, treat, or otherwise process, and to store, stockpile, remove,
market, sell or otherwise dispose of ore and minerals which Lessee
extracts from the claims;
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Mining Lease Independence Gold Range
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(c) To dispose of or deposit waste
material and tailings which Lessee has extracted from the
claims;
(d) To construct, use, or maintain
upon the claims buildings, shops, plants, machinery, mills,
facilities, ore bins and structures of all kinds, roads, shafts,
inclines, tunnels, drifts, open pits, pipelines, telephone lines,
electric transmission lines, or other means of communication,
transportation facilities and other utilities and facilities, the
operation of road or track vehicles or aircraft and the maintenance
thereof; all subject to the limitations set forth
herein;
(e) To exercise any and all rights
or privileges which are incidental to and which may be useful,
desirable or convenient in Lessee's exercise of any or all of the
rights hereinabove and hereinafter specified, which are not in
conflict with applicable federal, state or local laws, rules and
regulations or other provisions of this Lease.
(f) After ores, minerals or
materials have been sampled and weighed or measured by volumetric
survey, truck factors or any other manner as will permit the
computation of the production to be paid hereunder, Lessee may mix
the same with ores, minerals or materials from lands other than the
premises so long as such mixing does not adversely affect the
performance of Lessee's covenants under this Lease.
(g) Lessee is further granted the
right to use shafts, openings or pits on the premises and
structures, facilities, equipment, roadways, haulageways and all
other appurtenances installed on the premises for the additional
purpose of producing, removing, storing, depositing, treating or
transporting ores, minerals or materials, including tailings and
mine waste, from adjoining lands within which lessee has any
interest so long as such mining does not adversely affect the
performance of Lessee's covenants under this Lease. Lessee's
operations hereunder, and its mining of adjoining lands, may be
conducted upon the premises and upon such other lands as a single
mining operation so long as such mining does not adversely affect
the performance of Lessee's covenants under this Lease.
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(h) Independence makes no
representation or warranty as to the availability of
water.
All of the rights granted to Lessee
under this paragraph shall be subject to the payment of royalties
as hereinafter provided in this Lease and all other limitations,
reservations, terms and conditions set forth herein.
(2) Lessor represents that, to the
best of its knowledge, the claims are in good standing with the
United States of America and the State of Nevada and that it has
the right to lease the minerals and the facilities and other
property covered by this Lease. Lessor hereby represents to the
best of its knowledge that it has the full right, power and
capacity to enter into this Agreement on the terms and conditions
herein contained. Lessor covenants that the status of the premises,
as represented above, shall not be adversely affected because of
any act or omission on the part of Lessor during the continuance of
this Agreement.
(3) Lessor shall cooperate with
Lessee in Lessee’s applications for approvals, consents,
licenses and permits for Lessee’s operations on the
premises.
(4) Lessor shall pay all taxes
levied and assessed upon Lessor’s share of the production of
minerals from the Premises, including, specifically, the net
proceeds of mines taxes assessed on Lessor’s share of the
production of such minerals.
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B.
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Covenants of Lessee: Lessee has inspected the mining claims and all
other property on the claims, both real and personal, if any,
movable and immovable, if any, and accepts same in their present
condition, "As Is, Where Is." Both parties agree that Lessee does
not assume responsibility or liability for any pre-existing
environmental conditions on the premises.
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(1) Any purchases or acquisitions of
equipment or personal property by Lessee shall be at the sole cost
and expense of the Lessee and for its own account. Upon the
termination of this Lease for any cause and for 180 days
thereafter, Lessee will be permitted to remove from the leased
property all movable equipment and other personal property which it
has installed, save and except as otherwise limited
herein.
(2) Lessee shall pay in full for all
labor performed upon or material furnished to the said premises at
the instance or request of the Lessee. Lessee shall keep the
premises free and clear
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Mining Lease Independence Gold Range
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from any and all liens of laborers,
mechanics, materialmen, vendors or installers of fixtures and
equipment, or any other person or persons who may assert a lien by
law, provided, however, that Lessee shall have the option and right
to contest any such lien by notifying Lessor of its intent to do so
within ten (10) days after Lessee receives notice of the lien.
Lessee shall diligently and expeditiously contest the lien. Lessee
shall immediately notify Lessor when Lessee executes this Lease in
order that Lessor may timely record a notice of nonresponsibility
in the Office of the Recorder of Lander County, Nevada.
(3) Lessee shall at all times comply
in all respects with all the laws and regulations relating to the
performance of work and all other activities within or upon the
leased premises. The Lessee shall provide Workmen's Compensation
Insurance and such other insurance to cover personnel and all of
its operations upon the premises in the amount and form as may be
required by law. Lessee shall indemnify and hold the Lessor
harmless of and from any and all claims, demands, or liabilities
arising out of or in connection with the operations or activities
of the Lessee hereunder. Lessee assumes full and sole
responsibility for the operation and direction of the work done
under this agreement on the leased premises and no employee or
agent furnished by Lessee shall under any circumstances be deemed
an employee of the Lessor.
(4) Lessee agrees to pay all taxes
levied and assessed upon the leased premises or any part thereof,
including taxes measured on Lessee’s share of production and
also including taxes levied and assessed on improvements and any
equipment, movable or immovable, placed upon the leased premises by
Lessee during the continuance of this Lease, commencing with taxes
for the current year, and to make payment thereof, as required by
the statutes of the State of Nevada so that no default in taxes
upon the leased premises shall occur, and to deliver to Lessor,
upon request, the original or duplicate tax receipts for payment
made. Should Lessee be in possession, under this Lease, for only a
portion of a year, the tax for that year shall be pro-rated between
the Lessor and the Lessee on the basis of taxes for the last
preceding year. As a condition of Lessee's obligations pursuant to
this paragraph, Lessor shall timely deliver to Lessee all tax
notices which Lessor may receive. Lessee is not obligated to pay
any taxes assessed on minimum advance production royalty or
production royalty payments received by Lessor.
(5) While this Lease is in effect,
Lessee does hereby agree to annually file with the appropriate
agency of the United States any required "Notice of Intent to Hold
Mining Claims" and to pay all required rental or other fees,
including BIM rental fees due on or before the applicable statutory
deadline, and to make all filings required by State of Nevada law.
Furthermore, while this Lease is in effect, Lessee will perform all
other duties and do all filings and recordings and make all
payments required by Federal, State and local laws, rules,
regulations, orders and directives. If Lessee terminates this
agreement between June 1 and December 31 of any Calendar year,
Lessee is obligated to pay all required rental and other fees under
this section which come due between June 1 and December 31 for that
Calendar year.
(6) In the event of termination of
this Lease by expiration of the term hereof, or for any reason
whatsoever, the Lessee agrees to surrender the leased premises to
the Lessor subject to Article XXIV of this Lease. The Lessee,
however, shall have the right to remove movable machinery and
equipment placed by it upon and within the leased premises, save
and except for track, timbers, chutes, ladders, and similar
underground improvements, which shall be left in place, except to
the extent Lessee is otherwise required to remove the same in
accordance with applicable laws and regulations. The Lessee shall
have the right to effect any permitted removal of such machinery
and equipment prior to the expiration of this Lease, or within one
hundred and eighty (180) days thereafter. Any such machinery or
equipment not removed prior to the expiration of said period of
one hundred eighty (180) days following termination of said
lease shall be deemed abandoned by Lessee, affixed to the leased
premises and shall become and remain
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Mining Lease Independence Gold Range
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the property of the Lessor. In any
event, following termination, Lessee shall, if requested by Lessor,
act reasonably expeditiously to remove its equipment.
(7) Lessee agrees to keep accurate
books of account showing the operations, and particularly showing
ores mined and milled, or mined and shipped by the Lessee. Lessor
or its authorized agents shall have a right to audit and inspect
Lessee's accounts and records used in calculating production
royalty payments, which right may be exercised as to each payment
at any reasonable time during a period of one (1) year from the
date on which the payment was made by Lessee. If no such audit is
performed during such period, such accounts, records and payments
shall be conclusively deemed to be true, accurate and
correct.
(8) Lessee shall allow
representatives of Lessor at their own risk and upon reasonable
prior notice to enter upon and into all parts of said premises from
time to time, and at all reasonable times and hours, for the
purpose of inspecting or surveying the same, or taking samples of
ore therefrom, and to examine any and all other aspects of Lessee's
operations on the claims.
(9) [Deleted]
(10) Lessee shall at all times carry
the following insurance coverage on the premises:
(a) Public liability insurance of
not less than $1,000,000.00 (U.S.) per occurrence, nor less than
$2,000,000.00 (U.S.) in aggregate, with Lessor to be a named
insured.
(b) Property damage coverage of not
less than $100,000.00 (U.S.), with Lessor to be a named
insured.
Lessee may include this coverage
with other coverage it now has or will acquire on other mining
operations provided: that Lessor shall be named a loss payee and
additional insured in said policy or policies, and shall within
forty-five (45) days receive from Lessee or its insurer a copy of
the endorsement so showing.
(11) If Lessee locates any
unpatented mining claim all or part of which is within one-half
(1/2) mile of any portion of the claims described in Exhibit
A existing as of the effective date of this Lease, the entirety
of such unpatented mining claims shall be held in the name of
Lessor subject to this Lease. This section shall only govern those
claims located by Gold Range, or its agents. Assignees to this
agreement, shall be also bound by this section. Gold Range is under
no obligation to Lessor regarding claims or mining properties
acquired from any other third party.
III. WORK, EXPLORATION AND
MINE
DEVELOPMENT BY
LESSEE
A. Prior to September 30, 2010,
Lessee shall expend not less than Six Hundred Twenty Five Thousand
Dollars ($625,000.00) per the schedule set forth below (net after
any administrative, overhead or other indirect costs) towards the
exploration, development and commercial production of ores,
minerals or materials Minimum expenditures shall be as
follows:
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Mining Lease Independence Gold Range
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Before September 30,
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2006
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$50,000
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Before September 30,
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2007
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$75,000
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Before September 30,
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2008
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$125,000
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Before September 30,
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2009
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$175,000
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Before September 30,
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2010
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$200,000
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Any expenditure in excess of the
minimum expenditure set forth immediately above may be applied to
subsequent years. To the extent that Lessee fails to expend funds
pursuant to the terms of this paragraph, Lessee shall pay to
Lessor, as rent, any shortfall within thirty (30) days of the end
of any of the dates set forth above. In the event that Lessee
terminates this Lease on or before February 1st in any of the
calendar years 2008, 2009 or 2010, Lessee shall have no obligation
to perform any work thereafter or to pay as rent any
shortfall.
B. Upon written demand by Lessor,
Lessee shall furnish a written statement of its expenditures for
such exploration and mine development with a breakdown of labor,
materials, equipment and other expenditures, to the extent not
previously provided to Lessor. Demand by Lessor for such
expenditure statement shall not exceed one (1) time in any one
Calendar year.
IV. TERM OF LEASE AND
CONDITIONS
The term of this
Lease shall be for a period of approximately twenty (20) years,
commencing October 1, 2005 and terminating at midnight on September
30, 2025, unless Lessee is then conducting exploration, development
or mining operations on the premises, in which case Lessee shall
have the right to extend the term of this Lease for additional
terms of one (1) year so long as Lessee continues to conduct such
activities.
V. ROYALTIES TO BE PAID BY
LESSEE TO LESSOR
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Mining Lease Independence Gold Range
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A.
Minimum Advance
Royalty. The Minimum
Advance Royalty shall be paid for so long as this Lease is in force
and without regard to mining, production or sale of minerals on or
from the claims. Lessee shall have no obligation to pay any Minimum
Advance Royalty payments otherwise
