EXHIBIT 10.01
MATERIAL CONTRACTS
ORE MATERIAL JOINT VENTURE REFINING CONTRACT
THE NEW ANACONDA COMPANY and/or assigns whose registered office is located
at ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇-▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, hereinafter referred to as "New Anaconda" and,
ANGLO AMERICAN METALS, INC. and/or assigns whose registered office is
located at ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
hereinafter referred to as "Anglo American"
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and/or assigns whose contact address is located at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, #▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, and GOLD SCOUT, LLC.
whose registered office is located at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ hereinafter jointly referred to as "Owner"
RECITALS
WHEREAS, Owner under contract and/or owns mining and mineral rights to
certain ore properties located in California and Arizona, said ore
properties bearing significant amounts of unrefined alluvial ore bearing
gold metal (Aurium Utalium), and other base and precious metals capable of
being refined from the ore material thereto, and,
WHEREAS, Owner is desirous to provide such ore material to New Anaconda in
unrefined alluvial ore, screened to a size of + 400 mesh size, or
commercial ore concentrates, or metal powder or semi-refined dore bar
format for processing by New Anaconda into base and/or precious metals,
and,
WHEREAS, New Anaconda and Anglo American has technology capable of
processing said ore material and removing base and precious metals in a
commercial format, and is desirous of using said technology to process said
ore material to the mutual benefit of New Anaconda and Owner, and,
WHEREAS, New Anaconda and Anglo American are desirous of processing on a
joint venture basis with Owner said unrefined alluvial ore, screened to a
size of + 400 mesh size, or commercial ore concentrates, or metal powder or
semi-refined dore bar format for processing by Anglo into base and/or
precious metals, and,
WHEREAS, Owner and New Anaconda are desirous of the precious metals derived
from the aforementioned ore materials being credited to the individual
metal accounts of both Owner and New Anaconda under the following basis:-
a) All processing costs including but not limited to mining,
screening, transportation, grinding, smelting, casting and subsequent
transport costs relative to the ore material and all refining,
separation, assay, delivery, insurance, transport sales and marketing
costs shall be at the sole expense of New Anaconda, and,
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b) All Silver (Ag) and Gold (Au) metal and/or compounds derived from
the ore material shall be credited to the sole account of New
Anaconda, providing that a royalty payment equal to 5% of the value of
Silver (Ag) produced and a royalty of 3% of the refined metal value of
Gold (Au) for the first 75 ▇▇▇▇ ounces per ton, 4% for the next 25
▇▇▇▇ ounces per ton over the original 75 ▇▇▇▇ ounces, 5% for the next
50 ▇▇▇▇ ounces over the first 100 ▇▇▇▇ ounces, 6% for the next 50 ▇▇▇▇
ounces over the first 150 ▇▇▇▇ ounces, 7.5% for the next 50 ▇▇▇▇
ounces over the first 200 ▇▇▇▇ ounces and 10% for all additional ▇▇▇▇
ounces over the first 250 ▇▇▇▇ ounces. All royalty payments are
calculated as at the date of assay and/or sale by a recognised
independent internationally acceptable bullion dealer, and,
c) All Platinum (Pt), Palladium (Pd), Rhodium (Rh) and other such
commercial Platinum Group Metals (PGM's) in metal or compound form
derived from the ore material shall be credited to the sole account of
Owner.
NOW THEREFORE INTENDING TO BE BOUND IN LAW, THE PARTIES HERETO AGREE UPON
THE TERMS AND COVENANTS AS SET FORTH BELOW:
1.0 DEFINITIONS: For the purposes of agreement the following definitions
shall be construed and agreed as follows:
Fine Gold: The term "fine gold" as used in this Contract means refined
gold metal (Aurium Utalium) whose periodic symbol is accepted as Au
with a purity of not less than .9999 fineness bearing documentation
and stamp(s) of an internationally accepted hallmark/stamp of a "Good
London Delivery" bullion house or such other world class bullion
dealer/smelter/assayer indicating purity and fineness.
Good London Delivery: The term "Good London Delivery" as used in this
Contract means precious metal in a form and substance acceptable to
the London Bullion Market and as set out in their published
documentation as to acceptable quality, purity, size and related
matters.
In-Quart: The term "in-quart" as used in this Contract means the
amount of precious metals added by New Anaconda/Anglo American and/or
Owner as part of the refining process as a catalyst and therefore such
amount(s) must be deducted from the precious metals derived from the
ore material to determine the values of such derived precious metals.
Lift Payment: The term "lift payment" as used in this Contract means
the agreed cash advance payment to be made by New Anaconda to Owner to
cover the costs of mining, trucking, grinding, smelting (including
chemical flux costs), casting and delivery costs to deliver the semi-
efined ore bar metal to Anglo American's processing plant in Victoria
Texas. The amount of the lift payment shall be $2,675 per ton of ore
material removed from site, with an agreed adjustment basis subject to
audited accounts to allow the lift payment to be increased or
decreased if the actual costs are + 10% more or less than the original
projections prepared by New Anaconda and Owner.
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Ore Material: The term "ore material" as used in this Contract means
unrefined alluvial ore, screened to a size of + 400 mesh size, or
commercial ore concentrates, or metal powder or semi-refined dore bar
format for processing by New Anaconda/Anglo American into base and/or
precious metals.
Platinum Group Metals (PGM's): The term "Platinum Group Metals" or
"PGM's" as used in this Contract means the precious metals which are
primarily Platinum (Pt), Palladium (Pd), Rhodium (Rh) and such other
precious and rare earth metals as can be extracted commercially and
refined into acceptable forms such as metal, sponge, powder and
compounds.
2.0 TOTAL CONTRACTED AMOUNT OF ORE MATERIAL: It is agreed that Owner shall
be capable of delivering to New Anaconda in excess of 800,000 short
tons of original ore material and/or such lesser amounts of processed
ore material to enable New Anaconda/Anglo American to process and
extract not less than 48,000,000 ▇▇▇▇ ounces of fine gold based on the
minimum yield of 60 ▇▇▇▇ ounces per ton as evidenced by the controlled
due diligence test conducted by Miami Testing, Wolf Analytical, ▇▇▇▇▇
Technology, Investigative Specialist, Inc., ▇▇▇▇▇▇ Surveying Sciences
and Sassoon Metals. Inc. It is further agreed that subject to
requirements of New Anaconda/Anglo American as notified to Owner, and
subject to availability of ore material from Owner, that Owner shall
deliver to New Anaconda/Anglo American any amount of ore material in
addition to the above amount will be delivered under the same terms
and conditions.
2.1 PROVEN RESERVES: Owner hereby declares and evidences by way of a
copy of the independent geologist/engineer's report issued by ▇▇▇▇▇▇
Surveying Sciences Inc., attached hereto and made a part hereof, that
the volume of ore material available on a site located near Barstow,
California for delivery under this Contract is quantified at a minimum
of 800,000 tons and/or 2,323,200 cubic yards containing not less than
60 ▇▇▇▇ ounces of fine gold per ton, as evidenced in the due diligence
reports referenced above, a copy of said reports are available for
review at the offices of New Anaconda/Anglo American.
It is declared by Owner and acknowledged by New Anaconda/Anglo
American that in addition to the ore material site referenced above
that Owner has additional sites in other locations which have
comparable ore materials available from such other sites and that
Owner reserves the right to deliver ore material from any site which
Owner determines is suitable and from which suitable ore material is
capable of being delivered. New Anaconda/Anglo American reserves the
right to test and approve such ore material prior to making any lift
payment thereto.
It is agreed by the parties hereto that based on the independent
review of the parties and/or their qualified experts/agents that the
depth of surface ore material available on the Barstow site is between
3 and 15 feet in depth and that there exists significantly more
comparable ore material on site and available from that and/or other
sites owned or controlled by Owner.
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Therefore Owner is able to contract for the amount of ore material
contained in this Contract, such amount being in excess of any other
ore material previously contracted to third parties, and not under any
obligation to third parties.
This Contract specifically superceding and replacing the contract
issued on the 9th October 1995 between Owner, Anglo American and Round
Tower Holdings Limited. Such Contract being assigned as agreed by
Owner from Round Tower Holdings Limited via its owners Granleigh
Holdings Limited to Anglo American, and subsequently acquired by New
Anaconda under the terms of the reorganisation dated 7th June 1999.
2.2 PRIMARY PRECIOUS METALS: New Anaconda/Anglo American and Owner
agree that the ore material contains both Gold (Au) and Silver (Ag) as
primary precious metals and that these shall form the basis for the
commercial extraction and refining of the ore material.
It is further agreed that as per the proprietary technology
procedures, a certain amount of both gold and silver is added as a
catalyst and that such additions shall be recorded and shall be
deducted from all primary precious metals recovered and refined by New
Anaconda. Only the amount(s) of Gold (Au) and Silver (Ag) derived in
addition to the precious metal in-quart added will form the basis for
yield calculations.
2.3 SECONDARY PRECIOUS METALS: New Anaconda/Anglo American and Owner
agree that the ore material contains Platinum Group Metals (PGM's) and
that these shall form the basis for the secondary commercial
extraction and refining of the ore material. All PGM's produced by
New Anaconda/Anglo American from the ore materials shall be held to
the sole benefit of Owner in either finished metal/product format or
in a residual waste format pending further refining by New
Anaconda/Anglo American and/or Owner.
2.4 TRANSFER OF TITLE: Owner hereby declares that the ore material
represented by this Contract is owned or controlled by Owner as
evidenced by the attached documents and that by the execution of this
Contract all rights, title and other benefits, save those expressly
provisioned for herein are available for transfer to New
Anaconda/Anglo American.
Owner does hereby deliver, remise, release and transfer all valuable
mineral rights to the Gold (Au) and Silver (Ag) to New Anaconda/Anglo
American subject to the terms and conditions of this Contract. Such
transfer however being subject to a lien being recorded and agreed in
respect to the agreed lift payment and the subsequent royalty payment
to Owner by New Anaconda of 5% of the value of Gold (Au) and Silver
(Ag) derived by New Anaconda from the processing of the ore material.
No transfer of title to the PGM's is agreed and New Anaconda/Anglo
American agrees that they will hold or deliver such PGM's to Owner as
requested by Owner following the refining of said PGM's or extraction
of same.
It is a strict condition of the title transfer that all parties hereto
acknowledge such liens and agree that such liens are to be
incorporated in any documentation which represents title to such ore
material.
Owner shall execute a series of Quit Claim Deeds to New Anaconda/Anglo
American in order that title can be transferred in relation to the ore
materials removed from site, the details of which are agreed by the
Parties to be on the basis of this Contract and shall form a separate
series of agreements of which this Contract is to be made a part of by
reference thereto.
3.0 PROCEDURES: It is agreed that the following terms and conditions
shall apply to this Contract:
3.1 DELIVERY OF ORE MATERIAL/DORE BARS: The ore material to be
delivered by the Owner to New Anaconda for onward trans-shipment to
the plant facility of Anglo American in Victoria Texas shall be in the
form of unrefined alluvial gold ore, commercial concentrates or powder
with a mesh size of not greater than 400 mesh size.
The initial volume of ore material to be processed is + 5 tons per day
with an average yield of Gold (Au) of not less than 60 ▇▇▇▇ ounces per
ton. The maximum lift amount to be processed per day is agreed at +
150 tons per day with an equal average yield. Such maximum lift
amount being subject to Owner being able to obtain increased smelting
capacity for the screened ore material.
The Owner shall confirm to New Anaconda/Anglo American that the ore
material is available for delivery and that the Owner is capable of
lifting said ore material, screening same to a mesh size of not
greater than + 400 mesh and delivering the screened material to a
contracted smelting site for processing.
New Anaconda shall make the lift payment to Owner and Owner shall
deliver the screened ore material to the contracted smelter for
processing.
New Anaconda/Anglo American shall deliver to Owner at the contracted
smelter site sufficient in-quart precious metals as are required to be
added to the smelt run.
Owner shall ensure that the screened ore material is mixed with flux
chemicals and in-quart precious metals according to the proprietary
formulate and will ensure that the contracted smelter processes the
screened ore material and casts a series of dore bars which shall
conform to a specific size shape and format.
Owner shall deliver the processed dore bars to Anglo American's plant
in Victoria Texas for secondary processing to separate the precious
metals using proprietary methods. Owner shall deliver with the ore
bars such documentary records as are required to show the amount of
in-quart precious metals as are contained within the dore bars and to
allow the correct calculations for the yield of precious metals to be
determined.
Owner and Anglo American shall take samples of the dore bars at random
intervals for comparison relative to the yields to be derived from the
processing of same. It is agreed that the yields shall at all times be
within + 10% of the original test samples.
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Anglo American shall separate the dore bars into Gold (Au), Silver
(Ag) and PGM's (Pt,Pd and Rh) with any base metals being removed to
provide refined precious metals and/or compounds. The assays and
weights of the refined precious metals being recorded with the in-
quarted precious metals being deducted for re-cycling into the future
smelts.
New Anaconda/Anglo American shall deliver the Gold (Au) and Silver
(Ag) to market and shall pay to Owner the agreed royalty payments
based on the amount of primary precious metals value as derived from
the sales thereto within 48 hours of receipt of proceeds from such
sale(s). In the event that New Anaconda/Anglo American does not
deliver said Gold (Au) and Silver (Ag) to market within 72 hours of
the final refining of such metals thereto, it is agreed that New
Anaconda/Anglo American shall deliver to Owner the same percentage of
the refined Gold (Au) and Silver (Ag) in physical form as represented
by the royalty payments with a certified assay of purity attached.
New Anaconda/Anglo American shall deliver the PGM's derived and
refined from the ore materials to either a COMEX, or LME bonded
warehouse in the name of the Owner and/or their nominees, or if so
instructed by Owner shall hold said PGM's in safe care and custody as
semi-refined precious metal concentrates pending further processing.
3.2 QUALIFICATION: It is agreed that the minimum number of ▇▇▇▇ ounces
of gold recoverable from the dore bars produced from each ton of ore
material shall be not less than 60 ▇▇▇▇ ounces. In the event that the
recoverable number of ▇▇▇▇ ounces of gold is less than this agreed
minimum New Anaconda/Anglo American shall deduct such costs and
comparable losses created by the shortfall before any royalty payments
are due and payable to Owner. Any PGM's derived from the processing
of sub-standard ore material shall be held as additional security
pending settlement of the costs and comparable losses resulting from
the processing by New Anaconda/Anglo American.
In order that a mean weighted average can be used as the basis for
calculation, it is agreed that an allowance of + 10% will be agreed
and calculated on a monthly basis prior to any adjustments being made.
4.0 PERIOD OF CONTRACT: This Contract shall be for a period of Ten (10)
years from the date of signing with a further period of Fifteen (15)
years thereafter subject to mutual agreement in writing by the parties
hereto.
5.0 ARBITRATION: Any controversy or claim arising out of or related to
this Contract, or the breach thereof, shall be settled by arbitration
administered by the American Arbitration Association under its
Commercial Arbitration Rules, and judgement on the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction
thereof. The locale for arbitration shall be Salt Lake City, Utah,
unless otherwise agreed by the parties.
6.0 FORCE MAJEURE: The internationally accepted "force majeure" clause is
to be applied to this Contract.
There shall be no damages arising from the failure to deliver if such
failure is caused by fire, strikes, riots, war, earthquake, flood,
insurrection, governmental action and/or interference, civil
commotion, labour dispute, or mill and plant failure, Acts of God, or
any circumstances or accidents beyond the control of the parties
hereto.
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Any War Clause issued by railroads, airlines, or any other
transportation and/or shipping company is included in this contract.
Also in the event that the London Free Market or the Zurich Free
Market are not operating, or if only nominal quotations are being
placed through those gold markets this agreement and/or contract shall
be suspended until gold markets resume normal and full activity.
7.0 RESTRICTIVE COVENANT: This agreement is subject to the
internationally recognised non-disclosure and non-circumvention
clauses and additionally covers any and all add-on extensions,
renewals, roll-overs, re-negotiated contracts, 2nd or 3rd party
assignments, substitution of primary or secondary contracts and/or any
parallel agreements or contracts.
7.1 SUCCESSORS: This Contract shall be binding on and shall endure
for the benefit of the successors and assigns and personal
representatives and assigns (as the case may be), their heirs and
beneficiaries or any other party who receives the benefits from each
of the parties hereto.
7.2 ASSIGNMENT: No party to this Contract may assign its rights or
obligations hereunder in whole or in part without the express
prior written consent of the other parties. The written consent
not to be unreasonably withheld by the other parties.
8.0 TERMINATION: This Contract shall be terminated at the end of the
period of Contract set forth in paragraph 4.0 or when all of the terms
and conditions have been fulfilled and the parties hereto agree that
no further business shall endure.
8.1 EARLY TERMINATION: It is agreed by the parties hereto that by
mutual written consent of all parties this Contract may be terminated
prior to its expiry date if so agreed.
8.2 TERMINATION BY BREACH: It is agreed by the parties hereto that
if any party should be considered to be in breach by any other party
the damaged party shall request in writing that the party causing such
breach shall remedy said breach within Thirty (30) days of receipt of
notice of breach.
If after such notice period has expired the breach has not been
remedied it is agreed that the matter shall be placed to arbitration
and if the findings of the arbitrator as identified in 5.0 herein deem
that this Contract should be terminated the parties hereto agree to
such findings.
9.0 SOLE CONTRACT: This Contract constitutes the sole terms and
conditions of the agreement between the parties hereto, and supersedes
any and all previous oral and written agreements or intents, including
that specific contract as entered into by and between Owner and Round
Tower Holdings Limited on 9th October 1995. Any changes or additions
to this Contract must be in writing and subscribed to by all the
parties hereto.
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9.1 REPRESENTATIONS: Each of the parties hereto hereby acknowledges
that in entering into this Contract it has not relied on any
representation or warranty save as expressly set out herein or in any
documents referred to herein.
9.2 VARIATIONS: No variation of this Contract shall be valid or
effective unless made by one or more instruments in writing signed by
such of the parties hereto as would be affected by such variations.
10.0 COSTS: Each party shall bear its own costs an expenses incurred in
relation to the negotiation, preparation and execution of this
Contract.
11.0 NOTICES: All notices which are required to be given hereunder shall
be in writing and shall be sent to the address of the recipient set
out in this Contract, or such other address as the recipient may
designate by notice given in accordance with the provisions of this
clause. Any such notice may be delivered personally or by first class
pre-paid letter, telex or facsimile transmission and shall be deemed
to have been served if by personal delivery when delivered if by first
class post Forty Eight (48) hours after posting and if by telex or
facsimile transmission when dispatched.
12.0 BEST EFFORTS: The parties hereto shall, and shall use their
respective reasonable endeavours to procure that any necessary third
parties shall, do, execute and perform all such further deeds,
documents, assurances, acts and things as any of the parties hereto
may reasonably require by notice in writing one to the other to carry
out the provisions of this Contract in full force and effect.
Each of the parties hereto undertakes with each of the others to do
all things reasonably within his/their power which are necessary or
desirable to give effect to the spirit and intent of this Contract.
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IN WITNESS THEREOF, THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT ON THE
DATES INDICATED BELOW:-
/s/ ▇▇▇▇ de Rome this 25th day of January, 2000
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pp: THE NEW ANACONDA COMPANY
/s/ ▇▇▇▇ de Rome this 25th day of January, 2000
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pp: ANGLO AMERICAN METALS, INC.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ this 24th day of January, 2000
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pp: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ this 24th day of January, 2000
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pp: GOLD SCOUT, LLC.
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