EXHIBIT 10.19
REFINING AGREEMENT
THIS REFINING AGREEMENT. (hereinafter the "Agreement") effective December
1st, 2003, is by and between Western Goldfields Inc., Mesquite Mine (hereinafter
called "Producer") and Xxxxxxx Xxxxxxx Inc. (hereinafter called "Refiner").
WITNESSETH:
WHEREAS, Producer owns and operates mining, processing and related
facilities near the city of Brawley, California (hereinafter the "Mine") for the
production of gold Dore bullion; and
WHEREAS, Refiner has facilities located in Salt Lake City, Utah capable of
refining gold Dore bullion;
NOW, THEREFORE, Producer agree to deliver gold Dore bullion to Refiner, and
Refiner agrees to refine the gold and silver content thereof in accordance with
the terms and conditions hereinafter set forth:
ARTICLE 1
Definitions
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1.1 The terms defined in this Article 1 shall, for all purposes of this
Agreement, have the meanings herein specified, unless otherwise required or
specified.
Accountable Gold:
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The term "Accountable Gold" shall mean 99.85% of the mutually agreed
assayed gold content (as determined in accordance with this Agreement) of each
Ounce of Dore.
Accountable Silver:
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The term "Accountable Silver" shall mean 97.00% of the mutually agreed
assayed silver content (determined as provided in this Agreement) of each Ounce
of Dore.
Actual Date of Shipment:
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The term "Actual Date of Shipment" shall mean, with reference to any
shipment hereunder, the date on which the Dore is shipped from the Mine to the
Refiner.
Business Day:
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The term "Business Day" shall mean any calendar day, except Saturday,
Sunday, the legal and other holidays shown in Appendix 1 and any y the London
Metal exchange is closed.
Date of Arrival:
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The term "Date of Arrival" shall mean, with reference to any shipment
hereunder, the date on which Dore is received by the Refiner.
Date of Sampling:
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The term "Date of Sampling" shall mean, with reference to any shipment
hereunder, the date on which sampling occurs at the Sampling Facility in
accordance with Section 9.5, below.
Dore:
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The term "Dore" shall mean gold Dore bullion produced from the Mine.
London Gold Price:
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The term "London Gold Price" shall mean the London bullion market Final
P.M. fixing for gold (in United States dollars, if quoted in dollars).
Mine:
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The term "Mine" shall mean the mining, processing and related facilities
developed and to be developed by Producer on gold-bearing properties near
Brawley, California.
Ounce:
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The term "Ounce" shall mean a xxxx ounce.
Production Year:
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The term "Production Year" shall mean the period from January l through
December 31.
Quotational Day for Gold/Silver:
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The term "Quotational Day for Gold/Silver" shall mean the Date of Arrival
or, in the event the Date of Arrival is not a Business Day, the next Business
Day shall be the "Quotational Day for Gold/Silver".
Refiner Noon Silver Price:
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The term "Refiner Noon Silver Price" shall mean the COMEX Closing bullion
fixing price for silver (in United States dollars, if quoted in dollars).
Refinery:
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The term; "Refinery" shall mean the facilities for the refining of precious
metals operated by Refiner in the city of Salt Lake City, Utah.
Sampling Facility:
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The term "Sampling Facility" shall mean the facilities for the sampling of
precious metals operated by Refiner at the Refinery.
Settlement Date:
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The term "Settlement Date" shall mean the fifteenth (15th) Calendar Day
following the Date of Sampling.
ARTICLE 2
Product
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2.1 Producer expects, but does not represent or warrant, that the Dore
delivered hereunder will have a typical range conforming to the fallowing sample
assays (without warranting the absence of other elements):
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Element:
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Gold Not less than 60%
Silver 5.0%-10.0%
Copper 20.0%-25.0%
Zinc 0.0%-1.0%
Iron 0.0%-0.1%
Lead Less than 2%
Arsenic Less than 0.02%
Mercury Less than 0.02%
Selenium Less than 0.2%
Tellurium Less than 0.1%
Thorium Less than 0.02%
Tungsten Less than 1%
Indium Less than 0.1%
Bismuth Less than 2%
Antimony Less than 1%
Tin Less than 1%
Magnesium Less than 1%
Sulfur Less than 0.05%
Radioactivity None
Beryllium None
Producer does not anticipate, but does not represent or warrant, that there will
be any exceedances of the foregoing elements.
2.2 Producer expects, but does not represent or warrant, that the Dore
delivered hereunder will not contain a substance or substances in excess of
elements set forth in section 2.1, which are deleterious to Refiner's normal
refining process. If deleterious substance(s) are present, Refiner may reject
such shipment by giving notice to Producer within two (2) Business Days after
sampling at Refinery. Refiner's determination as to the presence in Dore of
substances deleterious to its normal refining process shall, unless unreasonably
made, be final and binding for purposes of this Section 2.2. Refiner shall
furnish to Producer upon request such data supporting Refiner's determination of
deleterious substances as Producer may reasonably request. Refiner shall return
any Dore rejected in accordance with Section 2.1 and Section 2.2 to a point
designated by Producer, and Producer shall bear the cost of freight and
insurance with respect to the return shipment. Provided a JM approved carrier
is used, risk of loss as to Dore so returned shall remain with Refiner until
such Dore is received by Producer or its designated consignee. Producer shall,
within seven (7) days after notice of rejection, deliver to Refiner the
equivalent amount of gold and silver for which payments were received on account
of any shipment rejected by Refiner pursuant to this Section 2.2, or if gold and
silver is not received within seven (7) days after date of notice of rejection,
Refiner, unless otherwise agreed by the parties, shall immediately purchase, at
prevailing market prices, those quantities of metals previously priced or
credited by Refiner but not delivered by Producer, and Produce shall pay any
difference due Refiner immediately upon receipt of Refiner's invoice.
2.3 REFINER UNDERSTANDS AND AGREES THAT PRODUCER MAKES NO WARRANTIES,
EXPRESS OR .IMPLIED, AS TO MERCHANTABILITY, FITNESS FOR
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ANY PARTICULAR PURPOSE OR ANY OTHER MATTER, OTHER THAN THE EXPRESS WARRANTIES
CONTAINED IN THIS AGREEMENT. NO REPRESENTATION OR STATEMENT NOT EXPRESSLY
CONTAINED IN THIS AGREEMENT SHALL BE BINDING UPON PRODUCER AS A WARRANTY OR
OTHERWISE.
2.4 Refiner warrants that metals delivered to customer shall be of the
purity required for London Good Delivery. This express warranty is in lieu of
all other warranties, express or implied, arising by law or custom, including
without limitation the IMPLIED WARRANTY OF MERCHANTABILITY and the IMPLIED
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. PRODUCER UNDERSTANDS AND AGREES
THAT REFINER MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AS TO MERCHANTABILITY,
FITNESS FOR ANY PARTICULAR PURPOSE OR ANY OTHER MATTER, OTHER THAN THE EXPRESS
WARRANTIES CONTAINED IN THIS AGREEMENT. NO REPRESENTATION OR STATEMENT NOT
EXPRESSLY CONTAINED IN THIS AGREEMENT SHALL BE BINDING UPON REFINER AS A
WARRANTY OR OTHERWISE.
Refiner's sole liability for breach of the above-described express warranty
shall be limited to replacement of non-conforming metals with metals meeting the
purity specifications described herein. This liability is, however, conditioned
upon Producer giving written notice of such non-conformance to Refiner within
thirty (30) days after shipment of metals to the destination specified by
Producer. Where the metals are replaced by Refiner, Producer shall return the
non-conforming metals to the Refinery freight, insurance and other similar costs
prepaid by Refiner. Producer shall have the risk of loss on the returned
non-conforming metals until receipt of such metals at the Refinery.
2.5 The Dore delivered pursuant to this Agreement shall be in the form of
ingots from 400 to 1200 Ounces in weight and shall be packaged in containers
suitable for transportation by armored carrier.
ARTICLE 3
Quantity
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3.1 Producer shall deliver to Refiner during the term of this Agreement
one hundred percent (100%) of the Dore actually produced and delivered from the
Mine.
ARTICLE 4
Term of Agreement
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4.1 Subject to Article 12, this Agreement shall continue in effect through
December 31, 2005, and, at the option of Producer with not less than thirty (30)
days advance written notice to Refiner, shall continue through December 31,
2006.
ARTICLE 5
Delivery
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5.1 Producer shall arrange for transportation of the Dore from the Mine to
the Refinery at it's cost. All risk of loss and damage to the Dore shall pass to
the Refiner upon receipt at it's Salt Lake City plant.
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5.2 No later than the Actual Date of shipment, Producer shall furnish to
Refiner shipping documents with the following information with respect to
shipment:
(i) the number of packages of boxes;
(ii) the number of ingots;
(iii) the net weight of each ingot;
(iv) the total estimated gold content of shipment in Ounces;
(v) the total estimated silver content of shipment in Ounces;
(vi) the estimated date and time of arrival at the Sampling
Facility;
(vii) the name of Producer's representative;
(viii) such other information relating to the shipment as Refiner
may reasonably request.
5.3 On or before the Actual Date of Shipment, Producer, shall send to
Refiner by facsimile, a certificate showing the following:
(i) the provisional weight, including the number of ingots, the
net weight of each ingot and the total gross weight, tare
and net weight of the shipment; and
(ii) the Producer's provisional assay showing the gold and the
silver content of the Dore as ascertained by Producer.
On or before the Actual Date of Shipment, Producer shall notify Refiner of
the provisional invoicing date, if any, and shall promptly send to Refiner by
facsimile such data.
5.4 Shipments of Dore hereunder to Refiner shall be made by Producer as
anticipated in Sections 3.1 and 5.1, subject to actual production of the Mine
and the availability of shipment hereunder.
ARTICLE 6
Ownership
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6.1 Except to the extent set forth in this Agreement, title to Producer's
Ingots (as defined herein) and precious minerals therein shall at all times
remain with Producer. Refiner is a bailee and shall not and does not take title
to or have any rights (whether ownership or otherwise) to Producer's ingots or
the Accountable Gold and Silver produced therefrom ("Producer Ingots"), unless
expressly set forth herein or otherwise agreed in writing by the parties.
6.2 Refiner is providing a service to Producer for a fee. No aspect of the
matters covered hereby shall constitute a consignment or otherwise be subject to
Article 9 of the Uniform Commercial Code. For precautionary purposes, however ,
Refiner grants to Producer to the extent available under applicable law, a
security interest in: (i) all Dore delivered by or on behalf of Producer to
Refiner pursuant to this Agreement; (ii) all Producer Dore in process at
Refiner's facility, whether or not commingled; and (iii) all Accountable Gold
and Silver refined from Producer's Dore, including such refined metal as may
from time to time be held on account for Producer, excluding Accountable Gold
and Silver purchased by Refiner from Producer.
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Producer will be responsible for perfecting the security interest granted above.
In this regard, Refiner will execute and deliver such Financing Statements and
other documents as Producer may reasonable request in order to perfect or
protect the security interest granted in this section.
6.3 Producer may ask for a physical return of the gold and silver in its
shipments and can request that the ingots be shipped by Refiner to Producer or
to such persons as Producer shall designate from time to time and Refiner shall
have no interest therein or to the amounts paid or payable from such disposition
of the Producer ingots. A mutually agreed additional cost will be applied to the
ounces of gold and silver delivered under this clause.
ARTICLE 7
Insurance
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7.1 Refiner shall have adequate insurance for each shipment of Dore upon
delivery of the Dore to it's refinery by the Producer and shall continue such
insurance coverage until the occurrence of the credit to Producer's or a
designated third party's Unallocated Metal Account as set forth in Article 8.
7.2 The Refiner covenants and agrees to conduct its refining business
related' to the processing of Producer's material in compliance with all
applicable environmental statutes, laws, ordinances, rules, and regulations.
7.3 To the extent any hazardous substances, hazardous waste, contaminants
or pollutants are generated from refiner's refining of Producer's material,
Refiner covenants, and agrees that it is solely responsible for the management
and disposition of such hazardous substances, hazardous waste, contaminants or
pollutants. The Refiner further covenants and agrees that it shall not allege,
assert or contend that Producer is an owner, operator, generator, transporter,
treater, xxxxxx, or disposer of, or to have arranged of r disposal or treatment,
or arranged with a transporter for transport for disposal or treatment of
hazardous substance or hazardous waster located on or generated at the Refiners.
Refiner further agrees to indemnify, defend and hold harmless the Producer, and
its subsidiaries and affiliates, and further agrees to indemnify, defend and
hold harmless the Producer, and its subsidiaries and affiliates, and their
directors, officers, employees, agents and assigns, from and against any and all
claims arising from or related to (i) the actual or alleged presence, release,
threatened release, discard or emission of any hazardous substances, hazardous
waste, contaminants or pollutants of any kind into the environments at or from
the Refinery or any other location at which Refiner performs its obligations
under this Agreement, including any and all claims arising from or related to
the study, testing, investigation, cleanup, removal, remediation, abatement,
response, containment, restoration or corrective action of any hazardous
substances, hazardous waste, contaminants or pollutants of any kind (A) on,
beneath or above the Refinery, or (B) emanating or migrating, or threatening to
emanate or migrate, from the Refinery or any off-site properties as a result of
Refiner's services provided under this Agreement; and (ii) the on or off-site
treatment, storage or disposal of hazardous substances, hazardous waste,
contaminants or pollutants generated by Refiner in connection with the services
provided under this Agreement.
7.4 The provisions of Section 7.3 shall survive termination of this
Agreement
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ARTICLE 8
Refining of Gold/Silver; Crediting of Account
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8.1 For each shipment of Dore, Producer shall give Refiner notice as
required in Section 5.3 on or before the Actual Date of Shipment. Producer
shall then notify Refiner of the quantity of Gold for such shipment to be
credited to Producer's or a designated third party's Unallocated Metal Account,
which credit(s) shall occur on the Settlement Date (hereinafter "Provisional
Settlement"), subject to Section 8.3. The Provisional Settlement shall be in an
amount up to that equal to 100% of the Producer's Provisional assay of gold
content for each shipment.
8.2 Producer shall pay Refiner a refining charge for each shipment in the
amount of US $0.60 per Ounce of Dore delivered to Refiner. Refiner's invoice for
services under this agreement should be sent to the Producers Mine
Administrative offices for payment.
8.3 If upon determination of final weights and assays pursuant to Article
10, with respect to any shipment, the final number of Ounces of Accountable
Gold/Silver content exceeds the number of Ounces provisionally credited by
Refiner to Producer pursuant to Section 8.1, then within two (2) Business Days
Refiner shall pay to Producer an amount calculated by multiplying the number of
Ounces of the excess times the London Gold/Refiner Noon Silver Price on the
Settlement Date. If, with respect to any shipment, the final number of Ounces
of Accountable Gold/Silver is less than the number of Ounces provisionally
credited by Refiner pursuant to Section 8.1, Producer will reduce the quantity
of gold to be credited from the next available shipment to cover the shortage.
8.4 Fractions of any Ounce of Accountable Gold/Silver shall be settled pro
rata. Fractions of any Ounce of gold/silver shall be calculated to three
decimal places.
8.5 Any payments hereunder shall be made on the due date thereof in
immediately available funds the wire transfer to a bank account or accounts, as
the case may be, designated by the party or parties receiving payment. Charges
of the bank making payment shall be for the account of the party making payment,
and charges of the bank receiving payment shall be for the account of the party
receiving payment.
ARTICLE 9
Weighing, Melting and Sampling
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9.1 Weighing and sampling shall be carried out by Producer at its expense
at the Mine and by Refiner at Refiner's expense at the Refinery in each case
with reliable modern equipment.
9.2 Refiner shall be entitled to have not more than two of its own
representatives present or to be represented at its own expense by a mutually
agreeable independent weigher and sampler at the weighing and sampling at the
Mine. Producer shall be entitled to have not more than two if its own
representatives present or to be represented at its own expense by a mutually
agreeable independent weigher and sampler at the weighing, melting and sampling
at the Sampling Facility. Each party's consent to a mutually agreeable
independent weigher and sampler shall not be unreasonably withheld, conditioned
or delayed.
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9.3 Producer or its representative shall, subject to Refiner's facility
rules, including safety and security, be free (a) to enter the Sampling Facility
during business hours (or as otherwise mutually agreed) when the operations
described in Article 10 are being carried out, (b) to inspect the Sampling
Facility's weighing, melting, sampling and other facilities used in such
operations and to make such other examinations thereof as s/he shall deem
appropriate and (c) to be present at the weighing, melting and sampling
(including cutting and shipping of samples) of each shipment; provided, however,
that s/he shall not unreasonably interfere with the Sampling Facility's
operations. Producer shall give Refiner notice of the name and address of
Producer's representative, and notice of any change therein, and Refiner shall
give Producer reasonable notice of the time and date when the operations
described in Article 10 are to be carried out by the Refiner with respect to any
shipment. It is understood that the representative of Producer shall be
permitted to be present at the Sampling Facility and act in the manner described
in this Section 9.3 only if and when material supplied by Producer is being
processed. If the representative appointed by Producer does not appear at the
Sampling Facility at the time designated by Refiner for the melting and sampling
of Dore, all rights to have such Producer's representative present are waived
for that particular shipment.
9.4 The weight after melting and sampling, including weight added from a
remelt of slags of each sample, as determined at the Sampling Facility shall
govern for purposes of the final settlement of the lot from which the slags were
generated. b) for Producer to be disposed of in accordance with instruction of
Producer at a time and in a manner agreed by both parties, with the expense
incurred for such disposal for Producer's account. Slags shall be maintained in
segregated containers.
9.5 Within a reasonable time after Refiner receives Dore at the Sampling
Facility, the Dore shall be weighed, assigned a control number, and formally
acknowledged by a written statement showing the weight and control number. This
statement shall be forwarded to Producer at the address specified in this
Agreement. Within three (3) Business Days after the Date of Arrival at the
Refinery, the Dore will be melted to homogenize it and the melt sampled for the
purpose of assay and Producer will have the right to be represented as set forth
in Section 8.3 Refiner shall immediately forward samples taken for Producer's
analysis as set forth in Article 10.3 by courier to Producer's laboratory at the
Producer's Mine Administrative Office. Weights at the Refinery shall be taken as
final and used for purposes of determining the final settlement value of
Accountable Gold and Silver.
ARTICLE 10
Assays
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10.1 Assays for the gold and silver content of Dore shall be carried out
independently by the assayers of Producer and Refiner from the samples obtained
at the Sampling Facility as provided in Article 9.
10.2 Assays shall be made by Refiner and Producer promptly after Dore is
sampled at the Sampling Facility from samples obtained as provided in Article 9.
Results of such assays shall be exchanged simultaneous by Producer and Refiner
by crossing registered airmail, or by facsimile copy, on a date to be agreed
upon but not later than the tenth Calendar Day after samples taken at the
Sampling Facility are received by Producer. Should the difference between
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the results exchanged be not more than 0.5/1,000 (zero point five (5) parts per
thousand) for gold, 2.5/1,000 (2.5 parts per thousand) for silver, then the
arithmetic mean of the results of Refiner and Producer shall be taken as final
for purposes of determining the final settlement value of Accountable Gold and
Silver. The splitting limits shown in this Section 10.2 shall be subject to
change by mutual agreement of the parties.
10.3 Melting, Weighting and Sampling. Once received at the Sampling
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Facility, Dore will be unpacked with Producer's representative attending. Dore
received will be melted in a crucible furnace and kept segregated from and not
commingled with Dore of other producers. The furnace's crucible shall be
dedicated to Producer's use only and shall be placed in a drum at the conclusion
of sampling and sealed for future use. The Dore will be melted in loss of a
quantity mutually agreed. While in a molten state the Dore shall be sampled
with a pin tube according to the Refiner's standard procedure. The sample will
be split into five parts, one for Producer's analysis, two for Refiner's
analysis, one held by Refiner for umpire analysis and one held by Refiner as
reserve.
Any slags produced and recovered or floor sweepings from the vicinity of
the furnace and bar molds shall be segregated, sealed and retained by Refiner
for future disposition as instructed by Producer.
10.4 Assaying. Assays will be performed by both parties and all umpires
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using the fire assay method, corrected basis.
10.5 Umpire. If the difference between the assays is greater than the
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amounts shown in Section 10.2, at the request of either party:
(a) X.X. Xxxxxx Laboratories
000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
(b) Xxxxxx & Co., Inc.
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
(c) Umpire & Control Services Inc.
150-(A) Xxxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
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or other mutually agreed assayers shall act as umpire assayers in rotation
shipment by shipment. The umpire shall not be the representative of either
party. As promptly as practicable after the signing of this Agreement, the
parties shall use their best efforts to agree on a list of alternative
internationally recognized umpire assayers. If such list is agreed upon, either
party shall have the right by giving notice to the other to disqualify any one
or more of the umpire assayers designated in this Section 10.5 (but not to the
before such umpire has acted hereunder) and to substitute therefore one of the
alternative umpire assayers shown on such list; provided, however, that neither
party may exercise the right to disqualify an umpire assayer at any time when no
alternative umpire assayer remains on such list. Whenever an umpire assayer is
disqualified and an alternative umpire assayer is designated to act hereunder,
the parties shall use their best efforts to agree on a new assayer to be placed
on such list of alternative umpire assayers.
10.6 If the assay results of the umpire shall be the mean between the
results of Producer and Refiner, the umpire's results shall be final and binding
on both parties for purposes of determining the final settlement value of
Accountable Gold and Silver. Otherwise, the results of the assay of the party
whose results are nearer to that of the umpire's assay shall be final and
binding on both parties for purposes of determining the final settlement value
of accountable Gold and Silver.
10.7 The costs of the umpire's assay shall be borne by the party whose
assay is further from that of the umpire.
10.8 The costs of the umpire's assay shall be borne equally by the parties
if the umpire's assay shall be the mean between the assays of the two parties.
ARTICLE 11
Taxes and Duties
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11.1 Producer shall be responsible for the payment or satisfaction of any
and all taxes, duties, or other governmental fees or charges imposed upon the
transactions contemplated by this Agreement by any government or political
subdivision thereof, including but not limited to turnover, sales, use, gross
receipts or similar taxes (but excluding income, excess profit, franchise or
other taxes imposed upon the business activities of Refiner).
ARTICLE 12
Termination
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12.1 Either party (the "Terminating Party"), at its option, may terminate
this Agreement, without penalty or cost, with respect to any or all of the Dore
to be delivered hereunder by giving the other party (the "Other Party") written
notice, effective upon delivery, at any time after the Other Party (if Refiner
is the Terminating Party, then Producer is the Other Party, and if Producer is
the Terminating Party, then Refiner is the Other Party) (a) commences a
voluntary case or proceeding under any applicable bankruptcy, insolvency, or
other similar law, (b) applies for or consents to the appointment of or taking
possession by a receiver, trustee or liquidator of itself or any substantial
part of its property, (c) fails generally to pay its debts as they become due,
or (d) makes a general assignment for the benefit of creditors; or corporate
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action is taken by it for the purpose of effecting any of the foregoing, or (e)
without the application, approval or consent of the Other Party, there shall
have occurred entry of a decree or order for relief by a court of competent
jurisdiction in respect of such Other Party in an involuntary case under any
applicable bankruptcy, insolvency or other similar law, or appointing a trustee,
receiver, liquidator or the like of such Other Party or of all or any
substantial part of its assets, or ordering the winding-up or liquidation of its
affairs, and, if such proceeding is being contested by such Other Party in good
faith, the same shall continue undismissed, or pending and unstayed, for any
period of 90 consecutive days. Such termination shall not affect any prior
claim against the Other Party that the Terminating Party may have under this
Agreement.
12.2 Notwithstanding any other provision in this Agreement, in the event
that either party hereto shall materially default in the performance of any of
its duties or obligations hereunder, which default shall not be substantially
cured within thirty (30) days after written notice is given to the defaulting
party specifying the default, or, with respect to those defaults which cannot
reasonably be cured within thirty (30) days to commence curing such default and
thereafter to proceed with all due diligence to substantially cure the same,
then the party not in default may, by giving written notice thereof to the
defaulting party, terminate this Agreement as of the date specified in such
notice of termination. Such termination shall not affect any prior claims
against the defaulting party that the non-defaulting party may have under this
Agreement.
12.3 In the event of termination for any reason, the parties agree to
fulfill their obligations incurred prior to terminate of this Agreement.
ARTICLE 13
Notices
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13.1 Except as otherwise expressly provided herein, all notices, requests
and other documents or communications required or permitted by any provision of
this Agreement shall be sufficiently given or transmitted if delivered by hand
or by pre-paid registered airmail, telefax (with a confirmation delivered by
pre-paid registered airmail) or recognized private courier service and addressed
as follows:
(i) in the case of Refiner, to it at:
Xxxxxxx Xxxxxxx, Inc.
0000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
With copy to:
Xxxxxxx Xxxxxxx, Inc.
000 Xxxx Xxxxxxxxxx Xxxx, Xxxxx 0000
Xxxxx, XX 00000
Attn: Vice President & General Counsel
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(ii) in the case of Producer, to it at:
CORPORATE OFFICE:
Western Goldfields Inc.
000 Xxxxxxx Xxxx, Xxxxx 000
Xxxx, XX 00000
Telephone: 000-000-0000
Fax: 000-000-0000
MINE ADMINISTRATIVE OFFICE:
Western Goldfields Inc. Mesquite Mine
0000 Xxxx Xxxxxxx 00
Xxxxxxx, XX 00000
Att. General Manager
Telephone: 000-000-0000
Fax: 000-000-0000
or at such other address(es) as may be designated in writing by Producer or
Refiner as the case may be, as the proper address to which such communications
shall be mailed or delivered to it. No such notice or request shall, however,
become effective until the date of receipt thereof by the party to which it is
addressed.
ARTICLE 14
Assignment
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14.1 Neither party may assign this Agreement without the prior written
consent of the other party, which consent shall not be unreasonably withheld.
ARTICLE 15
Governing Law
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15.1 The validity, enforceability and performance of this Agreement shall
be governed by and construed in accordance with the laws of the Sate of Utah (as
if this Agreement were to be performed wholly within such State).
ARTICLE 16
Arbitration
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16.1 Al claims and controversies (other than a claim or controversy subject
to final settlement pursuant to the expressed provisions of Article 10) arising
out of or in connection with this Agreement, or the breach thereof, at the
request of a party, may be finally settled under the commercial rules of the
American Arbitration Association by one neutral arbitrator, if said rules
provide a mechanism for appointing one neutral arbitrator, otherwise by three
arbitrators appointed in accordance with said rules. The arbitration
proceedings shall take place in Salt Lake City, Utah and shall be conducted in
the English language. Judgment upon the award rendered may be entered in any
court having jurisdiction or application may be made to such court for judicial
acceptance of the award and an order of enforcement, as the case may be. The
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parties hereby consent to the exclusive jurisdiction of the federal and state
courts located in the State of Utah for all purposes of this Agreement.
ARTICLE 17
Miscellaneous
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17.1 It is expressly understood an agreed that Producer's obligations
hereunder relate only to Dore actually produced by it at the Mine and that
Producer may from time to time suspend production at the Mine for purposes of
maintaining, modifying or expanding its production facilities and may suspend or
terminate production because continued production would, in Producer's opinion,
be uneconomical or impracticable. Producer shall promptly notify Refiner of any
such suspension or termination.
17.2 In the event of any fire, explosion, earthquake, storm tidal wave or
similar disturbance, flood drought, accident, breakdown of machinery or
facilities, transportation or handling difficulties, strike, lockout,
combination of workers or other labor difficulties, war, insurrection, riot,
terrorism embargo, act of God or the public enemy, law, act order, proclamation,
decree, regulation, ordinance, instruction or request of government or other
public authorities, federal, state, local or foreign, judgment or decree of a
court of competent jurisdiction, delay or failure of usual carriers or
contractors, labor shortage or inability to obtain raw materials, operating
materials, plant equipment or materials required for maintenance or repairs, or
any contingency or delay or failure or cause of any nature beyond the reasonable
control of Producer or Refiner, whether or not the kind hereinabove specified
(any such event being hereinafter called "force majeure"), preventing Producer
or Refiner from performing its respective obligations hereunder, then
performance hereunder by both parties shall be suspended during such time to the
extent affected by such force majeure. The party affected by any force majeure
shall promptly give written notice to the other party of the occurrence of any
force majeure, and of the termination of such force majeure. The parties shall
cooperate to mitigate the effects of any such force majeure.
17.3 If any payment of monies to be made by Producer or Refiner to the
other pursuant to this Agreement shall not be made on or before the date such
payment is due and payable in accordance with the provisions of this Agreement,
the party who shall be liable for such payment shall also pay interest on such
late payment calculated from the date such payment calculated from the date such
payment was due and payable through the date such payment is made at a rate
equal to the lower of (a) the prime commercial lending rate of Citibank N.A. for
loans in the state of Utah in effect from time to time (such rate to be adjusted
simultaneously with each change in such prime commercial lending rate) and
calculated on the basis of a 365 day year and (b) the maximum rate permitted by
applicable law in the State of Utah.
17.4 Neither Refiner nor Producer shall be liable for indirect, incidental,
special or consequential damages arising from any breach of this Agreement.
Notwithstanding any provision to the contrary herein, Refiner's maximum
aggregate liability in respect of any shipment of Dore received pursuant to this
Agreement will not exceed the value of a quantity of fine gold and fine silver
equal to the Accountable Gold and Accountable Silver in such shipment. Except
as provided in Section 2.4, Producer's maximum aggregate liability in respect
of any
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shipment of Dore shipped pursuant to this Agreement will not exceed ten (10)
times the Refinery fees chargeable in respect of such shipment.
17.5 Neither this Agreement nor any term or provision hereof may be waived,
changed, discharged or terminated except by an instrument in writing signed by
the party against whom the enforcement of any waiver, change, discharge or
termination is sought.
17.6 This Agreement may be executed in any number of counterparts, and each
of such counterparts shall for all purposes be deemed to be an original and all
of such counterparts shall together constitute but one and the same instrument.
17.7 This Agreement sets forth the entire understanding of the parties with
respect to the subject matter hereof, and supersedes all prior negotiations,
understandings, and agreements between the parties hereto whether verbal or
written.
17.8 In the event any term or provision of this Agreement shall for any
reason be illegal, invalid or unenforceable in any respect, such illegality or
unenforceability shall not affect the validity of any remaining portions which
shall remain in full force and effect as if the invalid portion was never a part
of this Agreement when it was executed. Should the severance of any part of
this Agreement materially affect any other rights and obligations of the parties
hereunder, the parties hereto will negotiate in good faith to amend this
Agreement in a manner satisfactory to the parties. Failing agreement on such
amendment, either party may by notice in writing terminate this Agreement
forthwith subject to the provisions of this Agreement relating to termination.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PRODUCER
Western Goldfields Inc.
By:___________________________
Title:________________________
REFINER
Xxxxxxx Xxxxxxx Inc.
By:___________________________
Title:________________________
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