Common use of Net Smelter Returns Clause in Contracts

Net Smelter Returns. Upon the Commencement of Commercial Production (as defined in Exhibit “B” attached hereto), Purchaser shall pay to Seller a royalty (the “Royalty”) in an amount equal to three percent (3%) of all Net Smelter Returns (as defined in Exhibit “B”) on minerals mined from the Conveyed Property (the “Seller NSR”) on the terms and conditions as set out in this Section 5 and in Exhibit "B" attached hereto and by this reference incorporated herein. Notwithstanding the foregoing, at any point in time following the Closing Date and upon Purchaser’s sole election, Seller shall sell to Purchaser fifty percent (50%) of the Seller NSR (the “NSR Sale”) for a purchase price of One Million Five Hundred Thousand and No/100 Dollars (CDN$1,500,000.00). Following the consummation of the NSR Sale, Purchaser acknowledges and agrees that Purchaser shall only be entitled to receive, upon Commencement of Commercial Production, a royalty of 1.5% of all net smelter returns on minerals mined from the Conveyed Property in accordance with this Section 5 and Exhibit “B” attached hereto and by this reference incorporated herein.

Net Smelter Returns. Upon the Commencement of Commercial Production (as defined in Exhibit “B” attached hereto), Purchaser shall pay to Seller a royalty (the “Royalty”) in an amount equal to three percent (32%) of all Net Smelter Returns (as defined in Exhibit “B”) on minerals mined from the Conveyed Property (the “Seller NSR”) on the terms and conditions as set out in this Section 5 and in Exhibit "B" attached hereto and by this reference incorporated herein. Notwithstanding the foregoing, at any point in time following the Closing Date and upon Purchaser’s sole election, Seller shall sell to Purchaser fifty percent (50%) of the Seller NSR (the “NSR Sale”) for a purchase price of One Million Five Hundred Thousand and No/100 Dollars (CDN$1,500,000.00CDN$1,000,000.00). Following the consummation of the NSR Sale, Purchaser acknowledges and agrees that Purchaser shall only be entitled to receive, upon Commencement of Commercial Production, a royalty of 1.51% of all net smelter returns on minerals mined from the Conveyed Property in accordance with this Section 5 and Exhibit “B” attached hereto and by this reference incorporated herein.