PURCHASE AND SALE AGREEMENT

Contract Categories: Business Finance - Purchase Agreements
EX-10.1 2 a11-20711_1ex10d1.htm EX-10.1

Exhibit 10.1

 

PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT (the “Agreement”) is made this 19th day of July, 2011 by and between Gold Standard Royalty (Nevada) Inc., a Nevada corporation (“GSR”), whose principal address and address for service and notice is 11th Floor, 888 Dunsmir Street, Vancouver B.C. V6C 3K4; and, Julian E. Simpson & Julian E. Simpson, Personal Representative of The Estate of Jean C. Simpson, whose principal address and address for service and notice is 3544 Lanihou Pl, Kihei, Maui, Hawaii, USA 96753 (the “Simpsons”) (hereinafter GSR and the Simpsons may be collectively referred to as “Owner”) and Tonkin Springs LLC, a Delaware limited liability company (“Tonkin”) and US Gold Corporation, a Colorado corporation (“US Gold”) (hereinafter Tonkin and US Gold may be collectively referred to as “Buyer”) each of whose principal address and address for service and notice is 99 George St. 3rd Floor, Toronto, ON M5A 2N4; (each, a “Party” together the “Parties”).

 

RECITALS

 

A.                                   Whereas, GSR owns a seventy percent (70%) interest and the Simpsons own a thirty percent (30%) interest, in certain lode and mill site claims in the Tonkin Springs and Pat Canyon Projects in Eureka County, Nevada, more specifically described in Exhibits A and B, attached hereto, and incorporated herein by this reference (the “Property”).

 

B.                                     Owner desires to sell all right title and interest in and to the Property, and Buyer desires to purchase the same subject to the terms of this Agreement.

 

C.                                     US Gold shall pay to GSR five million eight hundred and fifty thousand Canadian Dollars (CAD $5,850,000.00) and US Gold shall pay to the Simpsons two million five hundred and seven thousand and one hundred and forty three Canadian Dollars (CAD $2,507,143.00) and US Gold shall grant to GSR and the Simpsons a Net Smelter Return (“NSR”) Royalty in accordance with Sections 1.2.1.2 and 1.3.1.2, respectively, in exchange for which GSR and the Simpsons each agree to transfer their respective interests in the Property to Tonkin pursuant to the terms and conditions set forth in this Agreement.

 

D.                                    The transaction shall be completed by or before July 31, 2011 (the “Closing Date”).

 

In consideration of the Parties’ rights and obligations under this Agreement, the Parties agree as follows:

 

SECTION ONE

Purchase and Sale

 

1.1                                 Sale.  Subject to the representations, warranties, covenants, agreements and other terms and conditions set forth in this Agreement, Owner hereby agrees to sell, convey, transfer, assign and deliver to the Buyer, and the Buyer agrees to purchase from the Owners 100% of the Owners’ right, title and interest in and to the Property.

 

1.2                                 Purchase Price.  The parties agree to the following terms:

 

1.2.1                        The GSR Purchase Price.  GSR agrees to sell its seventy percent (70%) interest in the Property to Tonkin for:

 

1



 

1.2.1.1               FIVE MILLION EIGHT HUNDRED FIFTY THOUSAND CANADIAN DOLLARS (CAD 5,850,000.00).

 

1.2.1.2               A one point four percent (1.4%) NSR Royalty in the gold produced from the Property, provided that the NSR Royalty on gold produced from the North Oxide Mineral Zone and North Sulfide Mineral Zone on the Property, as defined in Section 1.4, shall be in the gold produced in excess of the numbers of ounces of gold described in Section 1.4.  Except as provided in Section 1.4, Tonkin’s obligation to pay the NSR Royalty granted to GSR shall apply to all the gold produced from the Property whether or not Tonkin purchases the Simpsons’ thirty percent (30%) interest in the Property.

 

1.3                                 The Simpson Purchase Price.  The Simpsons agree to sell their thirty percent (30%) interest in the Property to Tonkin for:

 

1.3.1.1               TWO MILLION FIVE HUNDRED AND SEVEN THOUSAND AND ONE HUNDRED AND FORTY THREE CANADIAN DOLLARS (CAD 2, 507,143.00).

 

1.3.1.2               A zero point six percent (0.6%) NSR Royalty in the gold produced from the Property, except the North Oxide Mineral Zone and North Sulfide Mineral Zone on the Property, as defined in Section 1.4, for which the NSR Royalty shall be in the gold produced in excess of the numbers of ounces of gold described in Section 1.4.  Except as provided in Section 1.4, Tonkin’s obligation to pay the NSR Royalty granted to the Simpsons shall apply to all the gold produced from the Property whether or not Tonkin purchases GSR’s seventy percent (70%) interest in the Property.

 

1.4                                 NSR Royalty.  The NSR Royalty applicable to and imposed on the number of ounces of gold produced by Tonkin from the North Oxide Mineral Zone and the North Sulfide Mineral Zone, respectively, shall be payable only when the number of ounces produced (a) from and on the North Oxide Mineral Zone is in excess of 228,800 ounces; or (b) from the North Sulfide Mineral Zone is in excess of 452,600 ounces.  For purposes of this Agreement and the Quitclaim Deed to be delivered by Seller in accordance with Section 2.1.2 (the “Deed”), the “North Oxide Mineral Zone” means the mineralized zone which contains the North Model Measured and Indicated Resource as described in Table 17-9 of the Technical Report on the Tonkin Project prepared for US Gold by Alan C. Noble, P.E. of Ore Reserves Engineering dated May 16, 2008 (the “Technical Report”) and the “North Sulfide Mineral Zone” means the mineralized zone which contains the North Model Measured and Indicated Resource as described in Table 17-9 of the Technical Report.  The NSR Royalty shall be applicable to and imposed upon the gold produced from the North Oxide Mineral Zone and the North Sulfide Mineral Zone independently and separately of such Mineral Zones and the NSR Royalty applicable to and imposed elsewhere on the Property.

 

SECTION TWO

Closing

 

2.1                                 Closing.  The parties acknowledge and agree that the closing of the purchase and sale of the Property shall take place on or before July 31, 2011.

 

2.1.1                        Delivery by Buyer.       Buyer shall deliver or cause to be delivered the purchase price to each Owner as defined in Paragraphs 1.2.1.1 and 1.3.1.1 above by way of certified check, bank draft, or wire transfer payable to or to the order of each Owner.

 

2.1.2                        Delivery by Seller.  Upon Closing Owner shall deliver a Quitclaim Deed with Reserved Royalty the form of which is attached to as Exhibit C, together with a declaration of value.

 

2



 

2.2                                 Further Assurances.  The Parties hereto shall do and perform and cause to be done and performed such further and other acts and things and execute and deliver such documents and instruments as may be necessary or desirable to give full effect to this Agreement, both during the term of the Agreement of Trust, and at the closing.

 

SECTION THREE

Maintenance of Claims

 

3.1                                 Claim Maintenance.  From the date this Agreement takes effect until the Closing, Buyer shall maintain title to the Property, including without limitation, paying when due all taxes on or with respect to the Property and doing all things and making all payments, recordings or filings necessary or appropriate to maintain the right, title and interest of the Property.

 

SECTION FOUR

Representations and Warranties

 

4.1                                 Authority.  Each of GSR, Tonkin and US Gold warrants and represents to the other Parties that it is in good standing under the laws of the jurisdiction in which it is incorporated or formed and each of the parties warrants and represents to the other Parties that it has all the requisite power, right and authority to enter this Agreement and to perform its obligations thereunder, and to enter and execute any agreement or instrument referred to or contemplated by this Agreement.  The Parties further warrant that entering this Agreement shall not violate the terms of any other agreement regarding the Property.

 

4.2                                 Warranty of Title.  GSR represents in respect of its seventy percent (70%) interest in the Property and the Simpsons represent in respect of their thirty percent (30%) interest in the Property as follows:

 

4.2.1                        That, subject to the paramount title of the United States, it has full marketable title to its interest in the Property and will convey such interest free of any and all encumbrances, except the NSR Royalty.

 

4.2.2                        That to the best of its knowledge, information and belief there is no litigation, proceeding or investigation pending or threatened or involving it, or the Property before any court, governmental department commission, or agency, which if adversely determined would prohibit or frustrate the transactions and covenants contemplated in this Agreement.

 

4.2.3                        To its knowledge, information and belief it is unaware of any material facts or circumstances which have not been disclosed in this Agreement and which should be disclosed to Buyer in order to prevent the representations and warranties set forth herein from being misleading.

 

4.2.4                        To the best of its knowledge, information and belief the unpatented claims which constitute all or a portion of the Property: (a) were properly located in accordance with applicable laws; (b) all Federal annual mining claim maintenance and rental fees have been paid properly and timely; and (c) all affidavits of annual assessment work, notices of intent to hold and proofs of payment of the Federal annual mining claim maintenance fees have been properly filed and recorded, provided, however, that GSR and the Simpsons make no representation or warranty concerning the discovery or presence of valuable minerals on or under the unpatented mining claims which comprise all or a portion of the Property.

 

3



 

4.3                                 Survival of Representations and Warranties.  The representations and warranties of each party shall survive the completion of the transactions contemplated by this Agreement and shall continue thereafter in full force and effect for the benefit of the Owner and Buyer, notwithstanding any independent inquiry or investigation by the Owner or Buyer.

 

4.4                                 Indemnity.  The Owner and Buyer mutually covenant and agree to indemnify and hold harmless the other from any losses, claims, actions, liabilities, damages, and costs, including any payment made in good faith in settlement of any potential claim, arising from:

 

4.4.1                        Any of the representations and warranties of the Owner and Buyer set forth in this Agreement; or

 

4.4.2                        Any and all actions, lawsuits, proceedings, demands, assessments, judgments, costs and legal and other expenses incidental to the forgoing.

 

SECTION FIVE

Notices and Payments

 

5.1                                 Notices.  All notices to Buyer or Owner shall be in writing and shall be sent by certified or registered mail/courier, return receipt requested, to the addresses set forth on the first page of this Agreement.  Notice of any change in address shall be given in the same manner.

 

5.2                                 Payments.  Unless Buyer is directed by GSR or the Simpsons to the contrary, all payments shall be in Canadian currency payable to the appropriate address above.

 

SECTION SIX

Exclusivity

 

Owner shall not initiate, solicit, encourage or entertain any offer or proposal to sell, lease, rent or transfer any interest in the Property prior to closing.

 

SECTION 7

Miscellaneous Provisions.

 

7.1                                 Additional Documents.  The Parties shall from time to time execute all such further instruments and documents and do all such further actions as may be necessary to effectuate the purposes of this Deed.

 

7.2                                 Compliance with Laws.  Prior to Closing, the Parties shall at all times comply with all applicable present or future federal, provincial, state and local Laws, statutes, rules, regulations, permits, ordinances, certificates, licenses and other regulatory requirements, policies and guidelines relating to operations and activities on or with respect to the Property.

 

7.3                                 Confidentiality.  The Parties hereto acknowledge and agree that any information obtained through discussions, communications or negotiations between the parties, will be kept confidential and shall not be used other than in furtherance of the purpose of this Agreement. This confidentiality obligation shall not apply to any information which is now in the public domain, any information which may subsequently become public other than through breach by either party hereto, information disclosed

 

4



 

by a third party in respect of which such third parties are not under any obligation of confidentiality or information which is required by law to be disclosed.

 

7.4                                 Binding Effect.  This Agreement shall inure to the benefit of and be binding upon each of GSR and the Simpsons if one such party, but not both executes this Agreement.  This Agreement shall be binding on each party which executes this Agreement and its respective heirs, executors, administrators, successors, and assigns.

 

7.5                                 Applicable Law.  The terms and provisions of this Agreement shall be interpreted in accordance with the laws of the Nevada.

 

7.6                                 Entire Agreement.  This Agreement terminates and replaces all prior agreements, either written, oral or implied, between the parties hereto, and constitutes the entire agreement between the parties.

 

7.7                                 Void or Invalid Provisions.  If any term, provision, covenant or condition of this Agreement, or any application thereof, should be held by a court of competent jurisdiction to be invalid, void or unenforceable, all provisions, covenants and conditions of this Agreement, and all applications thereof not held invalid, void or unenforceable, shall continue in full force and effect and shall in no way be affected, impaired, or invalidated thereby.

 

7.8                                 Time of the Essence.  Time is of the essence of this Agreement and each and every part thereof.

 

7.9                                 No Partnership.  Nothing in this Agreement shall create a partnership between Owner and Buyer.

 

7.10                           Counterparts. This Deed may be executed in any number of counterparts, and it shall not be necessary that the signatures of the Parties be contained on any counterpart. Each counterpart shall be deemed an original, but all counterparts together shall constitute one and the same instrument.

 

(Signature page follows)

 

5



 

IN WITNESS WHEREOF, Owner has hereunto set its hand the day and year first above written.

 

 

 

 

TONKIN SPRINGS LLC

 

 

By:

 

 

 

 

Name: Ian J. Ball

 

 

 

Title: Manager

 

 

 

 

 

 

 

 

 

 

GOLD STANDARD ROYALTY (NEVADA) INC.

 

 

By:

 

 

 

 

Name: Michael O’Brien

 

 

 

Title: Treasurer

 

 

 

 

 

 

 

 

 

 

JULIAN E. SIMPSON

 

 

By:

 

 

 

 

Name: Julian E. Simpson

 

 

 

Title: Individually

 

 

 

 

 

 

 

 

JULIAN E. SIMPSON PERSONAL

 

 

REPRESENTATIVE OF THE ESTATE OF JEAN C.

 

 

SIMPSON

 

 

By:

 

 

 

 

Name: Julian E. Simpson

 

 

 

Title: Personal Representative of the Estate of

 

 

 

Jean C. Simpson

 

6



 

EXHIBIT A

Eureka County

 

Claim Owners:

 

Lessee:

Gold Standard Royalty (NV) Inc.

 

US Gold Corporation

via the Lyle F. Campbell Trust

 

1595 Meadow Wood Lane, Suite 3

11th Floor — 888 Dunsmuir Street

 

Reno, NV 89502

Vancouver, BC V6C 3K4 CANADA

 

 

Mr. & Mrs. Julian Simpson

 

 

 

Tonkin Springs Project

 

Claim Name

 

BLM NMC#

 

County Bk/Pg

B 1

 

722670

 

288/210

B 2

 

722671

 

288/211

B 3

 

722672

 

288/212

C 1

 

722673

 

288/213

C 2

 

722674

 

288/214

C 3

 

722675

 

288/215

C 4

 

722676

 

288/216

C 5

 

722677

 

288/217

C 6

 

722678

 

288/218

C 7

 

722679

 

288/219

C 8

 

722680

 

288/220

C 9

 

722681

 

288/221

C 10

 

722682

 

288/222

C 11

 

722683

 

288/223

C 12

 

722684

 

288/224

C 13

 

722685

 

288/225

C 14

 

722686

 

288/226

C 15

 

722687

 

288/227

C 16

 

722688

 

288/228

C 17

 

722689

 

288/229

C 18

 

722690

 

288/230

C 19

 

722691

 

288/231

C 20

 

722692

 

288/232

C 21

 

722693

 

288/233

C 22

 

722694

 

288/234

C 23

 

722695

 

288/235

C 24

 

722696

 

288/236

C 25

 

722697

 

288/237

 

1



 

Claim Name

 

BLM NMC#

 

County Bk/Pg

C 26

 

722698

 

288/238

C 27

 

722699

 

288/239

C 28

 

722700

 

288/240

C 29

 

722701

 

288/241

C 30

 

722702

 

288/242

C 31

 

722703

 

288/243

C 33

 

722704

 

288/244

C 34

 

722705

 

288/245

C 35

 

722706

 

288/246

C 36

 

722707

 

288/247

C 37

 

722708

 

288/248

C 38

 

722709

 

288/249

C 39

 

722710

 

288/250

C 40

 

722711

 

288/251

C 41

 

722712

 

288/252

C 42

 

722713

 

288/253

C 43

 

722714

 

288/254

C 44

 

722715

 

288/255

C 45

 

722716

 

288/256

C 46

 

722717

 

288/257

C 47

 

722718

 

288/258

C 48

 

722719

 

288/259

C 49

 

722720

 

288/260

C 50

 

722721

 

288/261

C 51

 

722722

 

288/262

C 52

 

722723

 

288/263

C 53

 

722724

 

288/264

C 55

 

722726

 

288/266

C 56

 

722727

 

288/267

C 57

 

722728

 

288/268

C 58

 

722729

 

288/269

C 59

 

722730

 

288/270

C 60

 

722731

 

288/271

FET NO. 1

 

636315

 

228/445

FET NO. 2

 

636316

 

228/447

FET NO. 3

 

636317

 

228/449

N #39

 

636318

 

228/451

N #40

 

636319

 

228/453

N #41

 

636320

 

228/455

N #51

 

636322

 

228/459

 

2



 

Claim Name

 

BLM NMC#

 

County Bk/Pg

NC 20

 

810345

 

331/399

NC 27

 

810352

 

331/406

NC 34

 

810359

 

331/413

NC 35

 

810360

 

331/414

NC 36

 

810361

 

331/415

NC 69

 

810394

 

331/448

NC 70

 

810395

 

331/449

NC 71

 

810396

 

331/450

NC 72

 

810397

 

331/451

NC 73

 

810398

 

331/452

NC 74

 

810399

 

331/453

NC 75

 

810400

 

331/454

NC 76

 

810401

 

331/455

NC 77

 

810402

 

331/456

NC 78

 

810403

 

331/457

NC 79

 

810404

 

331/458

NC 82

 

810407

 

331/461

NC 83

 

810408

 

331/462

NC 84

 

810409

 

331/463

NC 85

 

810410

 

331/464

NC 86

 

810411

 

331/465

NC 87

 

810412

 

331/466

NC 88

 

810413

 

331/467

NC 89

 

810414

 

331/468

NC 90

 

810415

 

331/469

NC 91

 

810416

 

331/470

NC 92

 

810417

 

331/471

NC 93

 

810418

 

331/472

NC 94

 

810419

 

331/473

NC 95

 

810420

 

331/474

NC 96

 

810421

 

331/475

NC 97

 

810422

 

331/476

NC 98

 

810423

 

331/477

NC 99

 

810424

 

331/478

NC 100

 

810425

 

331/479

NC 101

 

810426

 

331/480

NC 102

 

810427

 

331/481

NC 103

 

810428

 

331/482

NC 104

 

810429

 

331/483

NC 105

 

810430

 

331/484

 

3



 

Claim Name

 

BLM NMC#

 

County Bk/Pg

NC 106

 

810431

 

331/485

NC 107

 

810432

 

331/486

NC 108

 

810433

 

331/487

NC 109

 

810434

 

331/488

NC 110

 

810435

 

331/489

NC 111

 

810436

 

331/490

NC 112

 

810437

 

331/491

NC 113

 

810438

 

331/492

NC 114

 

810439

 

331/493

NC 115

 

810440

 

331/494

NC 116

 

810441

 

331/495

NC 117

 

810442

 

331/496

NC 118

 

810443

 

331/497

NC 119

 

810444

 

331/498

NC 120

 

810445

 

331/499

NC 121

 

810446

 

331/500

NC 122

 

810447

 

331/501

NC 123

 

810448

 

331/198

NC 124

 

810449

 

331/199

NC 125

 

810450

 

331/200

NC 126

 

810451

 

331/201

NC 127

 

810452

 

331/202

NC 128

 

810453

 

331/203

NC 129

 

810454

 

331/204

NC 130

 

810455

 

331/205

NC 131

 

810456

 

331/206

NC 132

 

810457

 

331/207

NC 133

 

810458

 

331/208

NC 134

 

810459

 

331/209

NC 135

 

810460

 

331/210

NC 136

 

810461

 

331/211

NC 137

 

810462

 

331/212

O #27

 

636325

 

228/465

O #28

 

636326

 

228/467

O #29

 

636327

 

228/469

O #30

 

636328

 

228/471

O #31

 

636329

 

228/473

O #32

 

636330

 

228/475

O #33

 

636331

 

228/477

O #34

 

636332

 

228/479

 

4



 

Claim Name

 

BLM NMC#

 

County Bk/Pg

O #35

 

636333

 

228/481

O #39

 

636334

 

228/483

O #40

 

636335

 

228/485

O #41

 

636336

 

228/487

O #51

 

636338

 

228/491

O #52

 

636339

 

228/493

P #27

 

636341

 

228/497

P #28

 

636342

 

228/499

P #29

 

636343

 

228/501

P #30

 

636344

 

228/503

P #31

 

636345

 

228/505

P #32

 

636346

 

228/507

P #33

 

636347

 

228/509

P #34

 

636348

 

228/511

P #35

 

636349

 

228/513

P #36

 

636350

 

228/515

P #37

 

636351

 

228/517

P #38

 

636352

 

228/519

P #39

 

636353

 

228/521

P #40

 

636354

 

228/523

P #41

 

636355

 

228/525

P #42

 

636356

 

228/527

P #43

 

636357

 

228/529

P #44

 

636358

 

228/531

P #45

 

636359

 

228/533

PAT #1

 

636364

 

228/543

PAT #2

 

636365

 

228/545

PAT #11

 

636374

 

228/563

PAT #12

 

636375

 

228/565

PAT #13

 

636376

 

228/567

PAT #14

 

636377

 

228/569

PAT #15

 

636378

 

228/571

PAT #16

 

636379

 

228/573

Q #27

 

636380

 

228/575

Q #34

 

636381

 

228/577

Q #35

 

636382

 

228/579

Q #36

 

636383

 

228/581

Q #37

 

636384

 

228/583

Q #38

 

636385

 

228/585

Q #39

 

636386

 

228/587

 

5



 

Claim Name

 

BLM NMC#

 

County Bk/Pg

Q #40

 

636387

 

228/589

Q #41

 

636388

 

228/591

Q #42

 

636389

 

228/593

Q #43

 

636390

 

228/595

Q #44

 

636391

 

228/597

Q #45

 

636392

 

228/599

R #41

 

636397

 

228/609

R #42

 

636398

 

228/611

R #43

 

636399

 

228/613

R #44

 

636400

 

228/615

R #45

 

636401

 

228/617

R #48

 

636404

 

229/1

R #49

 

636405

 

229/3

S #41

 

636406

 

229/5

S #42

 

636407

 

229/7

S #43

 

636408

 

229/9

S #44

 

636409

 

229/11

S #49

 

636414

 

229/21

S #101

 

636415

 

229/23

S #102

 

636416

 

229/25

S #103

 

636417

 

229/27

S #104

 

636418

 

229/29

S #105

 

636419

 

229/31

S #106

 

636420

 

229/33

S #107

 

636421

 

229/35

S #108

 

636422

 

229/37

S #109

 

636423

 

229/39

S #110

 

636424

 

229/41

S #111

 

636425

 

229/43

SUMMER #2

 

636426

 

229/45

SUMMER #3

 

636427

 

229/47

SUMMER #4

 

636428

 

229/49

SUMMER #5

 

636429

 

229/51

SUMMER #7

 

636430

 

229/53

SUMMER #8

 

636431

 

229/55

SUMMER #9

 

636432

 

229/57

SUMMER #10

 

636433

 

229/59

SUMMER #17

 

636438

 

229/69

SUMMER #18

 

636439

 

229/71

TSG #22

 

365062

 

143/373

 

6



 

Claim Name

 

BLM NMC#

 

County Bk/Pg

TSG #23

 

365063

 

143/374

TSG #24

 

365064

 

143/375

TSG #25

 

365065

 

143/376

TSG #27 E

 

636440

 

229/73

TSG #28 E

 

636441

 

229/75

TSG #29 E

 

636442

 

229/77

TSG #30 E

 

636443

 

229/79

TSG #31 E

 

636444

 

229/81

TSG #32 E

 

636445

 

229/83

TSG #33

 

636446

 

229/85

TSG #34

 

636447

 

229/87

TSG #35

 

636448

 

229/89

TSG #55

 

365095

 

143/406

TSG #62

 

365102

 

143/413

TSG #63

 

365103

 

143/414

TSG #64

 

365104

 

143/415

TSG #65

 

365105

 

143/416

TSG #77

 

365117

 

143/428

TSG #78

 

365118

 

143/429

TSG #79

 

365119

 

143/430

TSG #80

 

365120

 

143/431

TSG #158

 

636277

 

229/95

TSG #159

 

636278

 

229/97

TSG #165

 

365205

 

143/516

TSG #166

 

365206

 

143/517

TSG #304

 

468704

 

174/426

TSG #454

 

468854

 

174/576

TSG #455

 

468855

 

174/577

TSG #479

 

468879

 

175/001

TSG #480

 

468880

 

175/002

TSG #675

 

470688

 

175/514

TSG #676

 

470689

 

175/515

TSG #697

 

470710

 

175/536

U #35

 

636449

 

229/99

U #36

 

636450

 

229/101

V #36

 

636456

 

229/113

W #36

 

51868

 

69/118

X #73

 

48941

 

68/407

X #119

 

72916

 

71/187

X #125

 

72918

 

71/189

 

7



 

Claim Name

 

BLM NMC#

 

County Bk/Pg

X #131

 

72920

 

71/191

ABC 1

 

694098

 

265/31

ABC 2

 

694099

 

265/32

ABC 3

 

694100

 

265/33

ABC 4

 

694101

 

265/34

ABC 5

 

694102

 

265/35

ABC 6

 

694103

 

265/36

ABC 7

 

694104

 

265/37

ABC 8

 

694105

 

265/38

ABC 9

 

694106

 

265/39

ABC 10

 

694107

 

265/40

ABC 11

 

694108

 

265/41

ABC 12

 

694109

 

265/42

ABC 13

 

694110

 

265/43

ABC 14

 

694111

 

265/44

ABC 15

 

694112

 

265/45

ABC 16

 

694113

 

265/46

ABC 17

 

694114

 

265/47

ABC 18

 

694115

 

265/48

ABC 19

 

694116

 

265/49

ABC 20

 

694117

 

265/50

ABC 21

 

694118

 

265/51

ABC 22

 

694119

 

265/52

ABC 23

 

694120

 

265/53

ABC 24

 

694121

 

265/54

ABC 25

 

694122

 

265/55

ABC 26

 

694123

 

265/56

ABC 27

 

694124

 

265/57

ABC 28

 

694125

 

265/58

ABC 29

 

694126

 

265/59

ABC 30

 

694127

 

265/60

ABC 31

 

694128

 

265/61

ABC 32

 

694129

 

265/62

ABC 33

 

694130

 

265/63

ABC 34

 

694131

 

265/64

ABC 35

 

694132

 

265/65

ABC 36

 

694133

 

265/66

ABC 37

 

694134

 

265/67

ABC 38

 

694135

 

265/68

ABC 39

 

694136

 

265/69

 

8



 

Claim Name

 

BLM NMC#

 

County Bk/Pg

ABC 40

 

694137

 

265/70

ABC 41

 

694138

 

265/71

ABC 42

 

694139

 

265/72

ABC 43

 

694140

 

265/73

ABC 44

 

694141

 

265/74

ABC 45

 

694142

 

265/75

ABC 46

 

694143

 

265/76

ABC 47

 

694144

 

265/77

ABC 48

 

694145

 

265/78

ABC 49

 

694146

 

265/79

ABC 50

 

694147

 

265/80

ABC 51

 

694148

 

265/81

ABC 52

 

694149

 

265/82

ABC 53

 

694150

 

265/83

ABC 54

 

694151

 

265/84

ABC 55

 

694152

 

265/85

NCS 73

 

956642

 

458/334

NCS 74

 

956643

 

458/335

NCS 75

 

956644

 

458/336

NCS 86

 

956645

 

458/337

NCS 87

 

956646

 

458/338

NCS 88

 

956647

 

458/339

NCS 89

 

956648

 

458/340

NCS 90

 

956649

 

458/341

NCS 91

 

956650

 

458/342

NCS 92

 

956651

 

458/343

NCS 93

 

956652

 

458/344

NCS 94

 

956653

 

458/345

NCS 99

 

956654

 

458/346

NCS 100

 

956655

 

458/347

NCS 101

 

956656

 

458/348

NCS 102

 

956657

 

458/349

NCS 103

 

956658

 

458/350

NCS 104

 

956659

 

458/351

NCS 105

 

956660

 

458/352

NCS 106

 

956661

 

458/353

NCS 107

 

956662

 

458/354

NCS 138

 

956663

 

458/355

NCS 139

 

956664

 

458/356

AS 33

 

956665

 

458/357

 

9



 

Claim Name

 

BLM NMC#

 

County Bk/Pg

AS 34

 

956666

 

458/358

AS 35

 

956667

 

458/359

AS 36

 

956668

 

458/360

AS 37

 

956669

 

458/361

AS 38

 

956670

 

458/362

AS 39

 

956671

 

458/363

AS 40

 

956672

 

458/364

AS 41

 

956673

 

458/365

AS 52

 

956674

 

458/366

AS 53

 

956675

 

458/367

AS 54

 

956676

 

458/368

AS 55

 

956677

 

458/369

AS 56

 

956678

 

458/370

AS 57

 

956679

 

458/371

AS 58

 

956680

 

458/372

AS 248

 

956681

 

458/373

AS 249

 

956682

 

458/374

FLYBOY 1

 

932769

 

440/225

FLYBOY 2

 

932770

 

440/226

FLYBOY 3

 

932771

 

440/227

FLYBOY 4

 

932772

 

440/228

FLYBOY 5

 

932773

 

440/229

FLYBOY 6

 

932774

 

440/230

FLYBOY 16

 

932783

 

440/239

 

 

 

 

 

Total = 372 claims

 

 

 

 

 

10



 

EXHIBIT B

Eureka County

 

Claim Owners:

 

Lessee:

Gold Standard Royalty (NV) Inc.

 

US Gold Corporation

via the Lyle F. Campbell Trust

 

1595 Meadow Wood Lane, Suite 3

11th Floor — 888 Dunsmuir Street

 

Reno, NV 89502

Vancouver, BC V6C 3K4 CANADA

 

 

Mr. & Mrs. Julian Simpson

 

 

 

Pat Canyon

 

Claim Name

 

BLM NMC#

 

County Bk/Pg

N #50

 

636321

 

228/457

N #52

 

636323

 

228/461

N #53

 

636324

 

228/463

O #50

 

636337

 

228/489

O #53

 

636340

 

228/495

P #46

 

636360

 

228/535

P #47

 

636361

 

228/537

P #48

 

636362

 

228/539

P #49

 

636363

 

228/541

Pat #3

 

636366

 

228/547

Pat #4

 

636367

 

228/549

Pat #5

 

636368

 

228/551

Pat #6

 

636369

 

228/553

Pat #7

 

636370

 

228/555

Pat #8

 

636371

 

228/557

Pat #9

 

636372

 

228/559

Pat #10

 

636373

 

228/561

Q #46

 

636393

 

228/601

Q #47

 

636394

 

228/603

Q #48

 

636395

 

228/605

Q #49

 

636396

 

228/607

R #46

 

636402

 

228/619

R #47

 

636403

 

228/621

S #45

 

636410

 

229/13

S #46

 

636411

 

229/15

S #47

 

636412

 

229/17

S #48

 

636413

 

229/19

Summer #12

 

40566

 

67/101

 

1



 

Claim Name

 

BLM NMC#

 

County Bk/Pg

Summer #13

 

636434

 

229/61

Summer #14

 

636435

 

229/63

Summer #15

 

636436

 

229/65

Summer #16

 

636437

 

229/67

T #43

 

51841

 

69/91

TSG #20

 

365060

 

143/371

TSG #21

 

365061

 

143/372

TSG #46

 

365086

 

143/397

TSG #47

 

365087

 

143/398

TSG #48

 

365088

 

143/399

TSG #49

 

365089

 

143/400

TSG #50

 

365090

 

143/401

TSG #51

 

365091

 

143/402

TSG #52

 

365092

 

143/403

TSG #53

 

365093

 

143/404

TSG #54

 

365094

 

143/405

TSG #56

 

365096

 

143/407

TSG #57

 

365097

 

143/408

TSG #58

 

365098

 

143/409

TSG #59

 

365099

 

143/410

TSG #60

 

365100

 

143/411

TSG #61

 

365101

 

143/412

TSG #67

 

365107

 

143/418

TSG #68

 

365108

 

143/419

TSG #145

 

365185

 

143/496

TSG #146

 

365186

 

143/497

TSG #149

 

365189

 

143/500

TSG #150

 

365190

 

143/501

TSG #151

 

365191

 

143/502

TSG #152

 

365192

 

143/503

TSG #303

 

468703

 

174/425

TSG #423

 

468823

 

174/545

TSG #424

 

468824

 

174/546

TSG #425

 

468825

 

174/547

TSG #426

 

468826

 

174/548

TSG #427

 

468827

 

174/549

TSG #453

 

468853

 

174/575

TSG #456

 

468856

 

174/578

TSG #457

 

468857

 

174/579

TSG #477

 

468877

 

174/599

 

2



 

Claim Name

 

BLM NMC#

 

County Bk/Pg

TSG #478

 

468878

 

174/600

TSG #481

 

468881

 

175/3

TSG #498

 

468898

 

175/20

TSG #499

 

468899

 

175/21

TSG #500

 

468900

 

175/22

TSG #501

 

468901

 

175/23

TSG #502

 

468902

 

175/24

TSG #677

 

470690

 

175/516

U #37

 

636451

 

229/103

U #38

 

636452

 

229/105

U #39

 

636453

 

229/107

U #40

 

636454

 

229/109

V #37

 

636457

 

229/115

V #38

 

636458

 

229/117

V #39

 

636459

 

229/119

X #74

 

48942

 

68/408

X #76

 

48944

 

68/410

X #77

 

48945

 

68/411

X #81

 

48949

 

68/415

X #82

 

48950

 

68/416

X #84

 

48952

 

68/418

X #88

 

48956

 

68/422

X #89

 

48957

 

68/423

X #90

 

48958

 

68/424

X #94

 

48960

 

68/426

X #101

 

48965

 

68/431

X #108

 

48970

 

68/436

X #114

 

48974

 

68/440

X #92

 

72907

 

71/178

X #93

 

72908

 

71/179

X #99

 

72909

 

71/180

X #100

 

72910

 

71/181

X #106

 

72911

 

71/182

X #107

 

72912

 

71/183

X #112

 

72913

 

71/184

X #113

 

72914

 

71/185

X #118

 

72915

 

71/186

X #124

 

72917

 

71/188

 

3



 

Exhibit C

 

APN — N/A — unpatented mining claims

 

Recorded at request of

and return to:

 

Ruth Buffa

US Gold Corporation

1595 Meadow Wood Lane, Suite 3

Reno, NV  89502

 

The undersigned affirm that this document does not contain the personal information of any person.

 

 

QUITCLAIM DEED WITH RESERVED ROYALTY

 

THIS QUITCLAIM DEED WITH RESERVED ROYALTY (the “Deed”) is made this                  day of July, 2011 by and between Gold Standard Royalty (Nevada) Inc., a Nevada corporation (“GSR”), whose principal address and address for service is 11th Floor, 888 Dunsmuir Street, Vancouver B.C. V6C 3K4, (hereinafter GSR collectively referred to as “Owner”) and Tonkin Springs LLC, a Delaware limited liability company (“Tonkin”) whose principal address and address for service is 99 George St. 3rd Floor, Toronto, ON M5A 2N4; (each, a “Party” together the “Parties”).

 

Recitals

 

A.                                   Whereas, GSR owns a seventy percent (70%) interest and Julian E. Simpson and Julian E. Simpson, Personal Representative of the estate of Jean C. Simpson, owns a thirty percent (30%) interest, in certain lode and millsite Property in the Tonkin Springs and Pat Canyon Projects in Eureka County, Nevada, more specifically described in Exhibits A and B, attached hereto, and incorporated herein by this reference (the “Property”).

 

B.                                     Owner desires to sell all of Owner’s right, title and interest in and to the Property representing an undivided seventy percent (70%) interest in the Property, and Tonkin desires to purchase the same subject to Owner’s reservation to Owner of the production royalty (the “Royalty”) described in this Deed.

 

C.                                     In consideration of the Parties’ rights and obligations under this Deed, the Parties agree as follows:

 

Witnesseth

 

1.                                       Quitclaim.  Subject to the Royalty described in Section 2 below, Owner in consideration of the sum of TEN DOLLARS ($10.00) and other valuable consideration paid to it by Tonkin, do hereby remise, release, and forever quitclaim unto Tonkin all of Owner’s right, title, and interest in and to the Property.

 

1



 

TOGETHER with all and singular the tenements, hereditaments and appurtenances thereunto belonging, or in anywise appertaining, and the reversion and reversions, remainder and remainders, rents, issues and profits thereof.

 

TOGETHER with all minerals and all veins and lodes of mineral-bearing rock therein and all dips, spurs, and angles thereof.

 

TO HAVE AND TO HOLD all of the right, title and interest of Owner in and to the Property, together with the appurtenances, unto Tonkin, its successors and assigns forever.

 

2.                                       Reserved Royalty on Production.  Owner reserves a Royalty on the production of Gold from the Property equal to one point four percent (1.4%) of the net smelter returns (“NSR”) from the production of minerals from the Property.  The Royalty is granted and reserved as follows:

 

2.1                                 A one point four percent (1.4%) NSR Royalty to GSR in the Gold produced from the Property, provided that the NSR Royalty on Gold produced from the North Oxide Mineral Zone and North Sulfide Mineral Zone on the Property, as defined in Section 2.2, shall be in the Gold produced in excess of the numbers of ounces of Gold described in Section 2.2.

 

2.2                                 The NSR Royalty applicable to and imposed on the number of ounces of gold produced by Tonkin from the North Oxide Mineral Zone and the North Sulfide Mineral Zone, respectively, shall be payable only when the number of ounces produced (a) from the North Oxide Mineral Zone is in excess of 228,800 ounces; or (b) from the North Sulfide Mineral Zone is in excess of 452,600 ounces.  For purposes of this Deed, the “North Oxide Mineral Zone” means the mineralized zone which contains the North Model Measured and Indicated Resource as described in Table 17-9 of the Technical Report on the Tonkin Project prepared for U.S. Gold Corporation by Alan C. Noble, P.E. of Ore Reserves Engineering dated May 16, 2008 (the “Technical Report”), and the “North Sulfide Mineral Zone” means the mineralized zone which contains the North Model Measured and Indicated Resource as described in Table 17-9 of the Technical Report.  The NSR Royalty shall be applicable to and imposed upon the Gold produced from the North Oxide Mineral Zone and the North Sulfide Mineral Zone independently and separately of such Mineral Zones and the NSR Royalty applicable to and imposed upon the Gold produced from elsewhere on the Property.

 

3.                                       Burden of Royalty.  The Royalty shall burden and run with the Property, including any amendments, conversions to a lease or other form of tenure, relocations or patent of all or any of the unpatented mining Property which comprise all or part of the Property.  On amendment, conversion to a lease or other form of tenure, relocations, or patenting of any of the unpatented mining Property which comprise all or part of the Property, Tonkin agrees and covenants to execute, deliver and record in the office of the recorder in which all or any part of the Property are situated an instrument by which Tonkin grants to Owner the Royalty and subjects the amended, converted or relocated unpatented mining Property and the patented Property, as applicable, to all of the burdens, conditions, obligations and terms of this Deed.

 

4.                                       Net Smelter Returns.  NSR shall be determined by multiplying (i) the Monthly Production by (ii) the average of the London Bullion Market, Afternoon Fix, spot prices for the calendar month of the Monthly Production; and subtracting from the product of (i) and (ii) the following:

 

2



 

(a)                                  charges imposed by the Payor for refining bullion from Beneficiated Precious Minerals contained in such production;

 

(b)                                 penalty substance, assaying, and sampling charges imposed by the Payor for refining Beneficiated Previous Minerals contained in such production; and

 

(c)                                  all costs of transportation of Beneficiated Precious Metals to a smelter, mint or refinery including, without restricting the generality of the foregoing, any and all costs of insurance in respect thereto.

 

5.                                       Unavailable Spot Prices.  If the applicable spot prices in Section 4 are no longer available from the London Bullion Market or New York Commodities Exchange, as applicable, the parties shall select a comparable commodity quotation for purposes of calculating the NSR.  If such selection has not been completed prior to the end of the calendar month following the month in which the applicable spot prices are no longer available, the average spot price for the calendar month in which the spot price becomes no longer available shall be used on an interim basis pending such selection.

 

6.                                       Time and Manner; In-Kind or Cash Payment.  At the time of making payment to or otherwise crediting the account of Tonkin for production from the Property pursuant to Section 4 (but within the time provided in Section 5), the Payor shall contemporaneously pay the Royalty in accordance with written instructions given to the Payor by Owner as provided in Section 6.1.  Once the Payor has received instructions from Owner, such instructions shall remain in effect until the Payor has received different instructions from Owner.  All contractual or other arrangements entered into by Tonkin with the Payor shall contain provisions implementing the terms and conditions of payment set forth in Section 5 hereof and Tonkin shall procure the written undertaking of Payor contractually binding Payor to perform in accordance with Section 5 in form and substance enforceable by Owner.  Owner may, from time to time in its discretion, change the bank or account number for payment under Sections 6.1 and 7 by giving written notice thereof to Tonkin and the Payor; such notice shall be effective upon actual receipt by the Payor, or upon the fourth day after deposit of such notice in the mail, first class postage prepaid, addressed to the Payor, whichever occurs first.  All costs charged by the Payor as a result of complying with the payment provisions of Section 5 shall be paid by Owner, and Tonkin shall have no liability or responsibility therefor.

 

6.1                                  The Payor shall pay the Royalty for each shipment of Gold either (a) in the form of Gold bullion (.995+ fine Gold) directly to Owner’s account maintained with the Payor as directed by Owner, or (b) by delivery of a check or draft payable to Owner’s account with a bank to be designated in writing by Owner.  If royalties are paid in kind as in Section 6.1(a), they will not reflect the costs deductible in calculating NSR under this Deed.  Within thirty (30) days of receipt of statements respecting charges, Owner will remit payment of an amount equal to its proportionate share of deductible costs.

 

7.                                       Payment Accounting, Interim Settlements and Late Charges.  All credits or payments of the Royalty shall be accompanied by a statement explaining the manner in which the payment was calculated.  In no event shall payment of the Royalty be made later than thirty (30) business days after each date on which Tonkin receives payment for the sale or other disposition of Beneficiated Precious Metals or Gold mined from the Property.  Such payments and statements shall be deemed conclusively correct unless Owner objects to them in writing within one (1) year after receipt thereof.

 

3



 

8.                                       Hedging Transactions: Futures; Options; and, Other Trading.

 

8.1                                 All profits and losses resulting from Tonkin engaging in any commodity futures trading, option trading, or metals trading, or any combination thereof, and any other hedging transactions (collectively “Hedging Transactions”) are specifically excluded from Royalty calculations pursuant to this Deed.  All hedging transactions by Tonkin and all profits or losses associated therewith, if any, shall be solely for Tonkin’s account.  The Royalty payable on Gold subject to hedging transactions shall be determined as follows:

 

(a)                                  The amount of Royalty to be paid on all Gold subject to Hedging Transactions by Tonkin shall be determined in the same manner as provided in Section 4, with the understanding that the average monthly spot price shall be for the calendar month during which Gold subject to hedging transactions is delivered to or credited to the account or benefit of Tonkin, whichever first occurs, by the Payor.

 

9.                                       Tailings and Residues.  All tailings, residues, waste rock, spoiled leach materials, and other materials (collectively “Materials”) resulting from Tonkin’s operations and activities on the Property shall be the sole property of Tonkin, but shall remain subject to the Royalty should the same be processed or reprocessed, as the case may be, in the future and result in the production of Gold.  In the event Materials are processed or reprocessed, as the case may be, the Royalty payable thereon shall be determined on a pro rata basis as determined by using the best engineering and technical practices then available.

 

10.                                 Books.  Tonkin shall keep true and accurate books and records of all of its operations and activities on the Property and under this Deed.  Such books and records shall be kept on the accrual basis in accordance with generally accepted accounting principles consistently applied.  Not more frequently than annually and within the time provided in Section 6.1 of this Deed, Owner may, at Owner’s sole expense, give notice to Tonkin that Owner desires to perform an examination of all of Tonkin’s books and records kept as required by this Deed.  All financial information shall conclusively be deemed correct for purposes of this Deed unless Owner has given timely notice that it desires to examine Tonkin’s books and records in the manner and within the time provided in Section 6.1 of this Deed.  Owner shall promptly commence any such audits and shall diligently prosecute the same to conclusion. In the event a three percent (3%) or greater deficiency in payments is discovered as a result of the audit, Tonkin shall reimburse Owner the cost of such audit with thirty (30) days of receipt of an audit report.

 

11.                                 Inspections.  Owner, or its authorized agents or representatives, on not less than five (5) business days notice to Tonkin, may enter upon all surface and subsurface portions of the Property for the purpose of inspecting the Property, all improvements thereto and operations thereon, as well as inspecting all records and data, including without limitation such records and data which are maintained electronically, pertaining to all activities and operations on or with respect to the Property, improvements thereto and operations thereon.  Owner, or its authorized agents or representatives, shall enter the Property at Owner’s own risk and expense and may not unreasonably hinder operations on or pertaining to the Property.  Owner shall indemnify and hold Tonkin harmless from any damage, claim or demand by reason of injury to Owner or Tonkin or any of their respective employees, officers, directors, agents or representatives caused by Owner’s exercise of its rights herein.

 

12.                                 Confidentiality. Owner shall not, without the express written consent of Tonkin, which consent shall not be unreasonably withheld, disclose any data or information concerning the operations

 

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conducted on the Property or obtained under the Deed or this Deed which is not already in the public domain; provided, however, Owner may disclose data or information obtained under this Deed without the consent of Tonkin: (i) if required for compliance with applicable Laws, rules, regulations or orders of a governmental agency or stock exchange having jurisdiction over Owner or its parent or affiliated corporations; (ii) to any of Owner’s consultants; (iii) to any third party to whom Owner, in good faith, anticipates selling or assigning Owner’s interest hereunder; or (iv) to a prospective lender to whom an interest in the Royalty payments to be made to Owner hereunder is proposed to be granted as security, provided that Tonkin shall first have been provided with a confidentiality agreement executed by such consultant, third party or lender, which agreement shall include the confidentiality provisions of this Deed.  Owner shall not issue any press releases pertaining to the Property except upon giving Tonkin three (3) days advance written notice of the contents thereof, and Owner shall make any reasonable changes to such proposed press releases requested by Tonkin.  Owner shall not, without Tonkin’s consent, issue any press release that implies or infers that Tonkin endorses or joins in Owner’s statements or representations contained in any press release.  The Owner will not release any information that has not been previously disclosed by Tonkin without the Tonkin’s consent.

 

13.                                 Commingling.  Owner hereby grants Tonkin the right to mine or remove from the Property any ores, waste, or other materials existing therein or thereon, through or by means of shafts or openings which may be sunk or made upon adjoining or nearby property products of ores or materials from the Property upon stockpile grounds situated upon any such adjoining or nearby property owned or controlled by Tonkin and Tonkin may use the Property and any shafts, openings thereon for the mining, removal and/or stockpiling of any ores, water and other materials and/or concentrated products of ores or materials from any such adjoining or nearby property, or for any purpose or purposes connected therewith.

 

Tonkin may commingle ore from the Property with ore from other properties, either before or after concentration or beneficiation, so long as the data to determine the weight and assay, both of the ore removed from the Property and of other ores to be commingled, are obtained by Tonkin.  Tonkin shall use that weight and assay data to allocate the royalties from the commingled ore between the Property and other properties from which the other commingled ore was removed. All such weight, assay and allocation calculations by Tonkin shall be done in a manner recognized by the mining industry as practical and sufficient.

 

Tonkin shall notify Owner not less than thirty (30) days before Tonkin commences commingling of ores, waste, or other materials from the Property and shall deliver with its notice Tonkin’s plan for the calculation of the production of Gold from the ores, waste or other materials mined and removed from the Property which is commingled and the calculation of the Royalty payable to the Owner for the Gold produced from the commingled ores, waste and other materials.

 

14.                                 Title Maintenance.  From the date this Deed takes effect, Tonkin shall maintain title to the Property, including without limitation, paying when due all Federal annual mining claim maintenance fees and all taxes on or with respect to the Property, doing all things (including the filing and recording of such affidavits and notices of intent to hold as are required under Nevada law), and making of all payments necessary or appropriate to maintain the right, title and interest of Tonkin and Owner, respectively, in the Property and under this Deed. Tonkin must provide proof of title maintenance one (1) month in advance of statutory deadlines.

 

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14.1                           Abandonment.  In the event Tonkin intends to abandon any of the lands comprising a portion or all of the Property (“Abandonment Property”), Tonkin shall first give notice of such intention to Owner at least thirty (30) days in advance of the proposed date of abandonment.  If not later than ten (10) days before the proposed date of abandonment Tonkin receives from Owner written notice that Owner desires Tonkin to convey the Abandonment Property to Owner, Tonkin shall, without additional consideration, convey a seventy percent (70%) interest in the Abandonment Property in good standing, by quitclaim deed, without warranty, to Owner and shall thereafter have no further obligation to maintain the title to the Abandonment Property. Notwithstanding the foregoing, Tonkin shall provide the same notice to Julian E. Simpson and Julian E. Simpson, Personal Representative of the estate of Jean C. Simpson who may elect to have a thirty percent (30%) interest in the Abandonment Property conveyed to them. Should Julian E. Simpson and Julian E. Simpson, Personal Representative of the estate of Jean C. Simpson not elect to receive a thirty (30%) interest, a one hundred percent (100%) interest shall be conveyed to Owner.  If Tonkin reacquires any of the ground covered by the Abandonment Property at any time within five (5) years following abandonment, the production of Gold from such ground shall be subject to this Deed.

 

15.                                 Warranty.  Each of GSR and Tonkin warrants and represents to the other that it is in good standing under the laws under the jurisdiction in which it is incorporated and each Party warrants and represents that it has all the requisite powers, rights and authorities to execute this Deed, to perform its obligations thereunder.

 

16.                                 Insurance.  Tonkin shall purchase or otherwise arrange at its own expense and shall keep in force at all times, directly or through the services of an independent contractor, comprehensive general public liability insurance against claims for bodily injury or death or property damage arising out of or resulting from Tonkin’s activities or operations on or with respect to the Property, in such amounts as will adequately protect Tonkin, Owner, the Royalty, and the Property from reasonably anticipated claims, liabilities and damages which may arise with respect to this Deed or the Property.

 

17.                                 Dispute Resolution.

 

17.1                           Matters to be Arbitrated.  Any dispute, controversy or claim arising under or on connection with this Deed or any document, instrument or Deed delivered pursuant hereto, the resolution of which is not provided for in this Deed and which cannot be resolved or settled by the Parties, shall be settled by arbitration in accordance with this Section 17 upon written notice by a Party to the other.

 

17.2                           Procedure for Arbitration.  Arbitration shall be conducted in accordance with the British Columbia International Commercial Arbitration Centre, Vancouver British Columbia, as amended, by a single arbitrator selected in accordance with such rules.  The arbitrator shall be an individual with not less than fifteen (15) years of expertise in the precious metals mining industry as a senior executive, accountant or lawyer and no arbitrator shall have been a director, officer or employee of, or contractor or service provider to, or director, officer, beneficial owner or close relative of a beneficial owner of any contractor or service provider to, any party for a period of five years preceding his or her appointment as an arbitrator.  The place of arbitration will be Vancouver, British Columbia.  The language of the arbitration will be English.  The arbitration shall be the sole and exclusive forum for resolution of the dispute, controversy or claim.  The award (including any award as to the costs of the arbitration) shall be final and binding and not subject to review or appeal for any reason whatsoever.  Judgment thereon may be entered by any court of competent jurisdiction.  Any arbitration and hearings relating thereto and all

 

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decisions, documents and submissions prepared or filed in connection therewith shall be in the English language.

 

All matters relating to any dispute, controversy or claim which is the subject matter or arbitration hereunder, including all submissions made to the arbitrators and the decision of the arbitrators, shall be treated as confidential by the parties and the parties shall, and shall cause any witnesses, counsel or professional advisers retained in connection with such an arbitration to, maintain all such matters in strict confidence until the arbitrator has made its decision.

 

The prevailing party in any arbitration proceedings (or litigation) shall, in addition to any other relief awarded by the arbitrators (or court) be entitled to a judgment against the non-prevailing party for reasonable attorneys fees and costs incurred in such proceedings or litigation.

 

17.3                           Continuing Obligations.  Pending settlement of any dispute, controversy or claim, the Parties shall abide by their obligations under this Deed without prejudice to a final adjustment in accordance with an award rendered in an arbitration settling such dispute, controversy or claim.

 

18.                                 General Provisions.

 

18.1                           Additional Documents.  The Parties shall from time to time execute all such further instruments and documents and do all such further actions as may be necessary to effectuate the purposes of this Deed.

 

18.2                           Compliance with Laws.  Tonkin shall at all times comply with all applicable present or future federal, provincial, state and local Laws, statutes, rules, regulations, permits, ordinances, certificates, licenses and other regulatory requirements, policies and guidelines relating to operations and activities on or with respect to the Property; provided, however, Tonkin shall have the right to contest any of the same if such contest does not jeopardize the Property or Owner’s rights thereto or under this Deed.

 

18.3                           Assignment. Owner shall have the unrestricted right, in its sole and absolute discretion, to freely assign, convey, transfer or relinquish any of its rights or interests with respect to the Royalty and/or all or any part of its rights, liabilities and obligations under this Deed to any third party.

 

18.4                           No Partnership.  Nothing in this Deed shall be construed to create, expressly or by implication, a joint venture, mining partnership, commercial partnership, or other partnership relationship between Parties.

 

18.5                           Governing Law.  This Deed is to be governed by and construed under the laws of Nevada and the federal laws applicable therein.

 

18.6                           Waiver.  No waiver of any of the provisions of this Deed will constitute a waiver of any other provision (whether or not similar).  No waiver will be binding unless executed in writing by the Party to be bound by the waiver.  A Party’s failure or delay in exercising any right under this Deed will not operate as a waiver of that right. A single or partial exercise of any right will not preclude a Party from any other or further exercise of that right or the exercise of any other right.

 

18.7                           Time of Essence.  Time is of essence in this Deed.

 

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18.8                           Notices.  Unless otherwise provided in this Deed, any notice or other correspondence required or permitted by this Deed shall be deemed to have been properly given or delivered when made in writing and hand-delivered to the Party to whom directed, or when sent by certified mail, electronic facsimile transmission, overnight courier, or Western Union telegraph, with all necessary postage or charges fully prepaid, return receipt requested (or in the case of a facsimile or telegram, confirmation of delivery), and addressed to the Party to whom directed at the following address:

 

TONKIN:

 

Stefan Spears
Vice President, Projects
US GOLD CORPORATION
99 George Street, 3rd Floor
Toronto, Ontario
M5A 2N4

Fax: 647– ###-###-####

 

OWNER:

 

GOLD STANDARD ROYALTY (NEVADA) INC.

Attention: Corporate Secretary
888 Dunsmuir Street, 11th Floor
Vancouver, British Columbia
V6C 3K4

 

Either Party may change its address for the purpose of notices or communications by furnishing notice thereof to the other Party in the manner provided in this Section.

 

18.9                           Entire Deed; Integration.  This Deed contains the entire Deed between Parties, and no oral Deed, promise, statement or representation which is not contained herein shall be binding on the Parties unless subsequently reduced to writing and signed by the Parties.  The provisions of this Deed shall supersede all previous oral or written Deeds between the Parties hereto.

 

18.10                     Binding Effect.  All of the covenants, conditions, and terms of this Deed shall (i) be of benefit to the Parties, (ii) to the maximum extent allowed by law, be an interest in the Property, and (iii) bind and inure to the benefit of the Parties, their successors and permitted assigns.

 

18.11                     Further Assurances.  From time to time, each Party shall, at the request of the other Party and with reasonable diligence, do all things and provide all assurances as may be reasonably required to carry out the obligations contemplated by this Deed, and each Party shall, at the request of the other Party and with reasonable diligence, execute and deliver such additional documents or instruments as may be reasonably necessary to carry out the terms of this Deed.

 

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18.12                     Counterparts.  This Deed may be executed in any number of counterparts, and it shall not be necessary that the signatures of the Parties be contained on any counterpart. Each counterpart shall be deemed an original, but all counterparts together shall constitute one and the same instrument.

 

19.                                 Definitions.

 

Beneficiated Precious Metals” means doré or concentrates produced from Gold by Tonkin’s final mill or other final processing plant, but specifically excludes (i) raw or crushed ore containing Gold or (ii) other preliminarily processed Gold;

 

Gold” means Gold mined, excavated, extracted, recovered in soluble solution or otherwise recovered or produced from the Property;

 

Hedging Transactions” means any and all activities by which the Tonkin sells or disposes of Gold by engaging in any commodity futures trading, option trading, metals trading, or sales or dispositions of Gold for other than spot prices, or any combination thereof, and any other hedging transactions;

 

Laws” means all laws, by-laws, statutes, codes, ordinances, regulations and rules, and all treaties, constitutions, judgments, decrees, orders, directives, consents, authorizations, approvals, guidelines, protocols, notices and policies to the extent that they have the force of law and all rules, policies and other requirements of any stock exchange, in each case binding on or affecting the Person, or the assets of the Person, referred to in the context in which the word is used;

 

Monthly Production” means the gross number of troy ounces of Gold contained in the production from the Property which were delivered to the Payor during the preceding calendar month;

 

Net Smelter Returns” has the meaning ascribed to that term in Section 4;

 

Owner” includes all of Owner’s successors-in-interest, including inter alia assignees, partners, joint venture partners, lessees and, when applicable, mortgagees and Owner’s subsidiary, parent, sister or affiliated companies;

 

Payor” means the smelter, refiner, processor, purchaser or other recipient of such production, or an insurer as a result of casualty to such production to whom the Monthly Production is delivered;

 

Tonkin” includes all of Tonkin’s successors-in-interest, including inter alia the Tonkin of the Property, assignees, partners, joint venture partners, lessees and, when applicable, mortgagees and Tonkin’s subsidiary, parent, sister or affiliated companies;

 

(Signature page follows)

 

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IN WITNESS WHEREOF, Owner has hereunto set its hand the day and year first above written.

 

 

TONKIN SPRINGS LLC

 

 

By:

 

 

 

 

Name: Ian J. Ball

 

 

 

Title: Manager

 

 

 

 

 

 

 

 

 

 

GOLD STANDARD ROYALTY (NEVADA) INC.

 

 

By:

 

 

 

 

Name: Michael C. O’Brien

 

 

 

Title: Treasurer

 

 

 

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City of Toronto

)

 

Province of Ontario, Canada

)

 

 

Before Nils F. Engelstad, a Notary Public in and for the Province of Ontario, duly appointed, personally appeared IAN J. BALL, Manager of TONKIN SPRINGS LLC, a Delaware limited liability company, who acknowledged that he executed the foregoing QUITCLAIM DEED WITH RESERVED ROYALTY, and to me known or proved to be the person described in and who executed the same.

 

IN TESTIMONY WHEREOF I have hereunto subscribed my name and affixed my seal at Toronto, Canada this              day of July, 2011.

 

 

 

 

 

 

 

Nils F. Engelstad

 

 

Barrister, Solicitor & Notary Public (Ontario)

 

 

LSUC: 55208P

 

 

My commission does not expire.

 

 

City of Vancouver

)

 

Province of British Columbia, Canada

)

 

 

Before John W. Legg, a Notary Public in and for the Province of British Columbia, duly appointed, personally appeared MICHAEL C. O’BRIEN, Treasurer of GOLD STANDARD ROYALTY (NEVADA) INC., a Nevada corporation, who acknowledged that he executed the foregoing QUITCLAIM DEED WITH RESERVED ROYALTY, and to me known or proved to be the person described in and who executed the same.

 

IN TESTIMONY WHEREOF I have hereunto subscribed my name and affixed my seal at Toronto, Canada this              day of July, 2011.

 

 

 

 

 

 

 

John W. Legg

 

 

Barrister, Solicitor & Notary Public (British Columbia)

 

 

 

 

 

 

 

 

My commission does not expire.

 

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