Common use of OPERATOR'S FEE Clause in Contracts

OPERATOR'S FEE. 7.1. The Operator may charge the following sums in return for its head office overhead functions which are not charged directly: (a) with respect to Programs: (i) 2% for each individual contract which expressly includes an overhead charge by the party contracted; (ii) 5% for each individual contract which exceeds $50,000 and is not subject to clause 7.1. (a)(i) hereof; (iii) 15% of all other Costs not included in clauses 7.1. (a)(i) and (ii); (b) with respect to Construction: 2 % of all other such Costs; (c) subsequent to the Completion Date: 3.5% of Operating Costs. 7.2. The Operator will be entitled to an Operator’s bonus equal to 10% of the Net Proceeds of Production, as defined in Appendix II attached hereto, for any quarter where Operating Cash Costs averages an amount equal to or lesser than $230 US per oz of gold commercially produced from the Property. The Operator’s bonus will be paid within 30 days from receipt by Sunburst de Mexico of proceeds of sale of Minerals effectively produced for the respective quarter. The cost for estimating the Net Proceeds of Production, will be similar to what the mining industry defines as the mine production cash cost. No interest, exploration or construction cost will be included in estimation the Net Proceeds of Production to calculate de Operator’s Production Bonus. . 7.3. The Operator and Sunburst Mexico shall account and properly record all Costs incurred in Mining Operations in accordance with accounting principles generally accepted in the mining industry in Canada. The calculation of the Operator’s fee and the Operators bonus set out in Subsections 7.1. and 7.2. shall be determined in accordance with such accounting principles.

OPERATOR'S FEE. 7.1. The Operator may charge the following sums in return for its head office overhead functions which are not charged directly: (a) with respect to Programs: (i) 2% for each individual contract which expressly includes an overhead charge by the party contracted; (ii) 5% for each individual contract which exceeds $50,000 and is not subject to clause 7.1. (a)(i) hereof; (iii) 15% of all other Costs not included in clauses 7.1. (a)(i) and (ii); (b) with respect to Construction: 2 % of all other such Costs; (c) subsequent to the Completion Date: 3.5% of Operating Costs. 7.2. The Operator will be entitled to an Operator’s bonus equal to 10% of the Net Proceeds of Production, as defined in Appendix II attached hereto, for any quarter where Operating Cash Costs averages an amount equal to or lesser than $230 US per oz of gold commercially produced from the Property. The Operator’s bonus will be paid within 30 days from receipt by Sunburst de Mexico of proceeds of sale of Minerals effectively produced for the respective quarter. The cost for estimating the Net Proceeds of Production, will be similar to what the mining industry defines as the mine production cash cost. No interest, exploration or construction cost will be included in estimation the Net Proceeds of Production to calculate de Operator’s Production Bonus. . 7.3. The Operator and Sunburst Mexico shall account and properly record all Costs incurred in Mining Operations in accordance with accounting principles generally accepted in the mining industry in Canada. The calculation of the Operator’s fee and the Operators bonus set out in Subsections 7.1. and 7.2. shall be determined in accordance with such accounting principles.