Form 8-K
8-K — NOVAGOLD RESOURCES INC
Accession: 0001104659-26-113739
Filed: 2026-10-05
Period: 2026-10-05
CIK: 0001173420
SIC: 1040 (GOLD & SILVER ORES)
Item: Other Events
Item: Financial Statements and Exhibits
Documents
8-K — tm2625949d2_8k.htm (Primary)
EX-10.1 — EXHIBIT 10.1 (tm2625949d2_ex10-1.htm)
EX-10.2 — EXHIBIT 10.2 (tm2625949d2_ex10-2.htm)
EX-10.3 — EXHIBIT 10.3 (tm2625949d2_ex10-3.htm)
EX-10.4 — EXHIBIT 10.4 (tm2625949d2_ex10-4.htm)
EX-10.5 — EXHIBIT 10.5 (tm2625949d2_ex10-5.htm)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 5, 2026
NOVAGOLD RESOURCES INC.
(Exact Name of Registrant as Specified in Its Charter)
British Columbia
001-31913
N/A
(State of Incorporation)
(Commission File Number)
(I.R.S. Employer Identification)
201 South Main Street, Suite 400, Salt
Lake City, Utah 84111
(Address of principal executive offices) (Zip Code)
(801) 639-0511
(Registrant’s Telephone Number, Including
Area Code)
N/A
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Shares
NG
NYSE American
Toronto Stock Exchange
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ¨
Item 8.01 Other Events.
NOVAGOLD Resources Inc. (“NovaGold”
or the “Company”) operates in the gold mining industry, primarily focused on advancing the Donlin Gold project, a development-stage
gold project in Alaska, USA. The Donlin Gold project is held by Donlin Gold LLC (“Donlin Gold”), a limited liability company
which is owned 60% by NovaGold through NOVAGOLD Resources Alaska, Inc., a wholly owned subsidiary of the Company (“NGRA”),
and 40% by Paulson Advisers LLC and certain of its affiliates (collectively, “Paulson”) through Donlin Gold Holdings LLC (“DGH”).
On July 22, 2026, the Company filed a Current Report on Form 8-K with the Securities and Exchange Commission (the “SEC”) announcing that it has entered into a series of
definitive transaction agreements in connection with a proposed transaction pursuant to which NovaGold Corporation, a newly formed Delaware
corporation (“New NovaGold”) will acquire all of the issued and outstanding common shares of the Company (the “NovaGold
Shares”) by way of an arrangement under the Business Corporations Act (British Columbia) in accordance with a plan of arrangement
(the “Arrangement”). Specifically, the Company announced the execution of (i) an Arrangement Agreement (the “Arrangement
Agreement”), among the Company, New NovaGold and Paulson, pursuant to which, subject to the satisfaction or waiver of certain conditions
set forth therein, each NovaGold Share will be exchanged for one share of voting common stock of New NovaGold, (ii) a Master Implementation
Agreement (the “Master Implementation Agreement”), among the Company, New NovaGold, Paulson, NGRA and DGH, which, among other
things, sets forth the rights and obligations of the parties thereto and the sequencing of the transactions contemplated by the various
transaction agreements, (iii) a Contribution Agreement (the “Contribution Agreement”), between New NovaGold and Paulson, pursuant
to which, substantially concurrently with (but immediately prior to) the consummation of the Arrangement, Paulson will cause certain of
its affiliates to contribute all of their interests in DGH and Donlin Gold Holdings II LLC, a Delaware limited liability company, as applicable,
to New NovaGold in exchange for shares of voting and non-voting common stock of New NovaGold (with Paulson’s voting common stock
of New NovaGold to be capped at 19.99%), as applicable, the number of which will be determined based on a ten percent (10%) discount to
the equity value of Paulson’s forty percent (40%) ownership interest in Donlin Gold implied by the equity value of NovaGold based
on the ten (10)-day volume-weighted average price of the NovaGold Shares as of July 21, 2026, and (iv) an Investor Rights Agreement (the
“Investor Rights Agreement” and, together with the Arrangement Agreement, the Master Implementation Agreement and the Contribution
Agreement, the “Transaction Agreements”), between New NovaGold and Paulson, which, among other things, sets forth Paulson’s
rights and obligations with respect to New NovaGold following the consummation of the Arrangement.
Upon completion of the transactions contemplated
by the Transaction Agreements (the “Transactions”), the Company will become a wholly owned subsidiary of New NovaGold, and
New NovaGold will become the new listed company, with a listing expected on the NYSE, and, together with its subsidiaries, will carry
on the businesses currently conducted by the Company and its subsidiaries. Upon completion of the Transactions, New NovaGold will own
100% of Donlin Gold and will operate in the gold mining industry, primarily focused on advancing the development of the Donlin Gold project
in Alaska.
Completion of the Transactions is subject to,
among other things, approval by the Company’s shareholders, court approval, regulatory and stock exchange approvals and the satisfaction
of customary closing conditions.
On October 5, 2026, the Company filed a management
information circular and definitive proxy statement on Schedule 14A (the “Circular and Proxy Statement”) with the SEC and
applicable Canadian securities regulators in connection with the special meeting of the Company (the “Special Meeting”), at
which the Company’s shareholders will vote on the Transactions and other matters related thereto. The Special Meeting will be held
on November 3, 2026.
Certain contracts described in the Circular and
Proxy Statement to which Donlin Gold is a party may be considered material contracts of New NovaGold upon and following the completion
of the Transactions. Copies of such contracts are filed as exhibits to this Current Report on Form 8-K.
The Donlin Gold property is located in the Kuskokwim
region of southwestern Alaska on private, Alaska Native-owned mineral and surface land and Alaska state mining claims. The subsurface
mineral and surface rights at the Donlin Gold project are owned by the Calista Corporation, an Alaska Native
corporation (“Calista”), and The Kuskokwim Corporation, an Alaska Native corporation (“TKC”).
Donlin Gold operates the Donlin Gold project pursuant to (i) that certain
Restated Exploration and Lode Mining Lease, effective as of May 1, 1995, by and between Calista and Donlin Gold (f/k/a Donlin Creek LLC),
as amended and restated on February 11, 2011 (“Restated Calista Lease”), (ii) that certain Agreement to Amend Restated Exploration
and Lode Mining Lease, effective as of June 6, 2014 (“2014 Amendment” and, together with the Restated Calista Lease, the “Calista
Lease”); (iii) that certain Surface Use Agreement, dated as of June 5, 1995, by and between TKC and Donlin Gold, as amended by that
certain Amended and Restated Surface Use Agreement, dated as of June 6, 2014 (the “TKC SUA”); (iv) that certain Bidder’s
Preference Agreement, dated as of June 6, 2014, by and among Donlin Gold, Calista and TKC (the “Bidder’s Preference Agreement”)
and (v) that certain Surface Lease and Assignment of Mining Lease, dated as of May 9, 2012, by and among Spencer W. Lyman, Carolyn Motherway
Lyman, Lyman Resources Alaska, Inc. (“Lyman Resources”) and Donlin Gold (the “Lyman Lease”).
Calista Lease
The Calista Lease includes subsurface (mineral) rights leased from
Calista. Calista also owns the corresponding surface estate on a portion of these lands, the rights to which are also included in the
Calista Lease. The Calista Lease provides Donlin Gold with rights to approximately 19,988 hectares of Calista-owned land. Donlin Gold
originally leased the mineral rights in the Donlin Gold project lands from Calista in 1995. The Restated Calista Lease was executed on
February 11, 2011 to reflect all amendments and assignments to the prior lease between Calista and Donlin Gold from May 1, 1995, the date
of the original lease, up to and including February 11, 2011. The Calista Lease grants to Donlin Gold, with respect to the lands subject
to the Calista Lease, the exclusive right to explore for, develop, and mine all minerals in or under the leased property. The Calista
Lease also grants Donlin Gold the right to construct and use buildings, roads, tailings ponds, waste dumps, and other improvements reasonably
required under the purposes of the Calista Lease. The Restated Calista Lease was amended again effective June 6, 2014 pursuant to the
2014 Amendment; however, the 2014 Amendment does not affect the land subject to the Restated Calista Lease.
The Calista Lease currently includes a total of 72 complete sections
of land and portions of an additional 13 sections of land in the vicinity of the Donlin Gold deposits, and associated with the Donlin
Gold project infrastructure. These lands comprise approximately 19,988 hectares that have been conveyed to Calista by the Federal Government.
The term of the Calista Lease is to April 30, 2031 and extends automatically year to year thereafter so long as either mining or processing
operations are carried out on or with respect to the property in good faith on a continuous basis in such year, or Donlin Gold pays to
Calista an advanced minimum royalty for such year.
The terms of the Calista Lease include various royalty and other payment provisions and considerations such as shareholder employment
and contracting opportunities.
Royalty terms of the Calista Lease include:
· Annual advance minimum royalty (variable) to 2030;
· All advance minimum payments are recoverable as a credit against the net smelter return royalty and net proceeds payment;
· Net smelter return of 1.5% for the earlier of the first five years following commencement of commercial production or until initial
capital payback, increasing to 4.5% thereafter; and
· Net proceeds royalty of 8% of the net proceeds realized by Donlin Gold commencing with the first quarter in which net proceeds are
first realized.
The foregoing description of the Calista Lease is only a summary, does
not purport to be complete and is qualified in its entirety by reference to the full text of each of the Restated Calista Lease and the
2014 Amendment, which are filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K and are incorporated
herein by reference. Each of the Restated Calista Lease and the 2014 Amendment has been included as an exhibit to this Current Report
on Form 8-K to provide investors with information regarding its terms. It is not intended to provide any other factual information about
the Company, New NovaGold, Donlin Gold or their respective subsidiaries. The representations, warranties and covenants contained in each
of the Restated Calista Lease and the 2014 Amendment were made only for purposes of the Restated Calista Lease and the 2014 Amendment,
respectively, as of the specific dates therein, were solely for the benefit of the parties thereto, may be subject to qualification and
limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating
contractual risk, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable
to investors. Shareholders should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations
of the actual state of facts or condition of the parties. Further, investors should read each of the Restated Calista Lease and the 2014
Amendment not in isolation, but in conjunction with the other information that the Company includes in reports, statements and other filings
it makes with the SEC.
TKC SUA
The TKC SUA grants non-exclusive surface use rights to Donlin Gold
for mining activities. TKC owns and contributed to the SUA the corresponding surface estate over most of Calista’s subsurface estate
included in the Calista Lease as well as some additional surface estate. The TKC SUA provides Donlin Gold with rights to approximately
16,923 hectares of TKC-owned land. The TKC SUA grants non-exclusive surface use rights to Donlin Gold on at least 64 sections of land
overlying much of the minerals leased from Calista, with provisions allowing for adjusting the TKC SUA boundary in conjunction with adjustments
to the mineral rights included in the Calista Lease.
The TKC SUA was originally entered into effective June 5, 1995, and
was revised and restated by Donlin Gold and TKC to expand the TKC surface lands included in the TKC SUA and to update other provisions,
effective June 6, 2014.
The term of the TKC SUA runs through April 30, 2031, and on a year-to-year
basis thereafter so long as the Calista Lease remains in effect. Upon termination of the Calista Lease, the TKC SUA will automatically
terminate.
The terms of the TKC SUA include various royalty and other payment
provisions and considerations such as shareholder employment and contracting opportunities.
Payment terms of the TKC SUA include:
· A Surface Use Fee paid annually on a per acre basis;
· An Exclusive Use Fee for acres dedicated to certain uses or for Donlin Gold’s exclusive use unless TKC elects to have Donlin
Gold LLC purchase that portion of the surface estate;
· Milestone payments due upon the occurrence of specific events;
· Annual advance minimum payment (variable based on project status);
· Milled tonnage fee of $0.40 per tonne processed for the first 10 years of production and $0.50 per tonne processed for all production
after 10 years;
· Net proceeds payment of 3% of the net proceeds realized by Donlin Gold commencing with the first quarter in which net proceeds are
first realized; and
· All advance minimum payments are recoverable as a credit against the milled tonnage fee and net proceeds payment.
The foregoing description of the TKC SUA is only a summary, does not
purport to be complete and is qualified in its entirety by reference to the full text of the TKC SUA, which is filed as Exhibit 10.3 to
this Current Report on Form 8-K and is incorporated herein by reference. The TKC SUA has been included as an exhibit to this Current Report
on Form 8-K to provide investors with information regarding its terms. It is not intended to provide any other factual information about
the Company, New NovaGold, Donlin Gold or their respective subsidiaries. The representations, warranties and covenants contained in the
TKC SUA were made only for purposes of the TKC SUA as of the specific dates therein, were solely for the benefit of the parties thereto,
may be subject to qualification and limitations agreed upon by the contracting parties, including being qualified by confidential disclosures
made for the purposes of allocating contractual risk, and may be subject to standards of materiality applicable to the contracting parties
that differ from those applicable to investors. Shareholders should not rely on the representations, warranties and covenants or any descriptions
thereof as characterizations of the actual state of facts or condition of the parties. Further, investors should read the TKC SUA not
in isolation, but in conjunction with the other information that the Company includes in reports, statements and other filings it makes
with the SEC.
Lyman Lease
Lyman Resources in Alaska, Inc. (“Lyman Resources”) has
an existing placer mining lease with Calista covering approximately 1,040 hectares (partially covering six sections) within the Calista
Lease area (the “Lyman Placer Lease”). The Lyman family also have title to approximately 5.7 hectares of surface estate within
the Snow Gulch area. The lands subject to the Lyman Placer Lease lie immediately to the north of the Donlin Gold project’s planned
open pit footprint. The Calista Lease grants priority to extraction of the lode mineralization in the event of a conflict of use between
lode and Lyman Resources’ placer mining operations, provided that a two-year notice is provided to Lyman Resources of activities
that would deprive Lyman of the opportunity to recover placer gold.
Lyman Resources, the Lyman family and Donlin Gold entered into the
Lyman Lease effective as of May 9, 2012, leasing the Lyman surface estate and assigning the Lyman Placer Lease to Donlin Gold for mining
use.
The Lyman Lease has an initial term of 20 years but shall be extended
while Donlin Gold conducts operations within a defined area of interest.
The Lyman Lease provides for rent and certain other payments.
The foregoing description of the Lyman Lease is only a summary, does
not purport to be complete and is qualified in its entirety by reference to the full text of the Lyman Lease, which is filed as Exhibit
10.4 to this Current Report on Form 8-K and is incorporated herein by reference. The Lyman Lease has been included as an exhibit to this
Current Report on Form 8-K to provide investors with information regarding its terms. It is not intended to provide any other factual
information about the Company, New NovaGold, Donlin Gold or their respective subsidiaries. The representations, warranties and covenants
contained in the Lyman Lease were made only for purposes of the Lyman Lease as of the specific dates therein, were solely for the benefit
of the parties thereto, may be subject to qualification and limitations agreed upon by the contracting parties, including being qualified
by confidential disclosures made for the purposes of allocating contractual risk, and may be subject to standards of materiality applicable
to the contracting parties that differ from those applicable to investors. Shareholders should not rely on the representations, warranties
and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties. Further, investors
should read the Lyman Lease not in isolation, but in conjunction with the other information that the Company includes in reports, statements
and other filings it makes with the SEC.
Bidder’s Preference Agreement
The Bidder’s Preference Agreement establishes categories of work
for which TKC has the primary bidder preference, provides for the application of Calista’s bidder preference where applicable, and
coordinates the resolution of competing preference claims between Calista and TKC.
The Bidder’s Preference Agreement terminates automatically upon
termination of either the Calista Lease or the TKC SUA.
The foregoing description of the Bidder’s Preference Agreement
is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Bidder’s
Preference Agreement, which is filed as Exhibit 10.5 to this Current Report on Form 8-K and is incorporated herein by reference. The Bidder’s
Preference Agreement has been included as an exhibit to this Current Report on Form 8-K to provide investors with information regarding
its terms. It is not intended to provide any other factual information about the Company, New NovaGold, Donlin Gold or their respective
subsidiaries. The representations, warranties and covenants contained in the Bidder’s Preference Agreement were made only for purposes
of the Bidder’s Preference Agreement as of the specific dates therein, were solely for the benefit of the parties thereto, may be
subject to qualification and limitations agreed upon by the contracting parties, including being qualified by confidential disclosures
made for the purposes of allocating contractual risk, and may be subject to standards of materiality applicable to the contracting parties
that differ from those applicable to investors. Shareholders should not rely on the representations, warranties and covenants or any descriptions
thereof as characterizations of the actual state of facts or condition of the parties. Further, investors should read the Bidder’s
Preference Agreement not in isolation, but in conjunction with the other information that the Company includes in reports, statements
and other filings it makes with the SEC.
Cautionary Note Regarding Forward-Looking Statements
This communication includes certain “forward-looking
information” and “forward-looking statements” (collectively “forward-looking statements”) within the meaning
of applicable securities legislation, including the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements
are frequently, but not always, identified by words such as “expects”, “continue”, “ongoing”, “anticipates”,
“believes”, “intends”, “estimates”, “potential”, “possible”, and similar
expressions, or statements that events, conditions, or results “will”, “may”, “could”, “would”
or “should” occur or be achieved. All statements, other than statements of historical fact, included herein are forward-looking
statements. These forward-looking statements include statements regarding the expected outcomes of the transactions contemplated by the
Arrangement Agreement, Master Implementation Agreement, Investor Rights Agreement and Contribution Agreement (collectively, the “Transactions”);
the ability of NOVAGOLD, New NovaGold and Paulson to complete the Transactions on the terms described herein, or at all, including receipt
of required regulatory approvals, shareholder approvals, court approvals, stock exchange approvals and satisfaction of other customary
closing conditions; the expected synergies related to the Transactions in respect of strategy, operations and other matters; projections
related to expansion; and the impact of the Transactions on New NovaGold and its stakeholders. Forward-looking statements contained herein
are based on a number of material assumptions, including, but not limited to, the following, which could prove to be inaccurate: the
expected outcomes of the Transactions; the ability of NOVAGOLD, New NovaGold and Paulson to complete the Transactions on the terms described
herein, or at all, including receipt of required regulatory approvals, shareholder approvals, court approvals, stock exchange approvals
and satisfaction of other customary closing conditions; the expected synergies related to the Transactions in respect of strategy, operations
and other matters; projections related to expansion; our ability to achieve production at Donlin Gold; the cost estimates and assumptions
contained in the 2025 Technical Report and the 2025 Technical Report Summary; anticipated timing of updated reports and/or studies including
the Donlin Gold BFS and draft SEIS; repayment of the Barrick Mining Corporation promissory note and the timing thereof; sufficiency of
working capital; future capital raising activities and potential sources of funding; estimated metal pricing, metallurgy, mineability,
marketability and operating and capital costs, together with other assumptions underlying our resource and reserve estimates; our expected
ability to develop adequate infrastructure and that the cost of doing so will be reasonable; assumptions that all necessary permits and
governmental approvals will be obtained and the timing of such approvals; assumptions made in the interpretation of drill results, the
geology, grade and continuity of our mineral deposits; our expectations regarding demand for equipment, skilled labor and services needed
for exploration and development of mineral properties; and operating or regulatory risks. Forward-looking statements are necessarily
based on several opinions, estimates and assumptions that management of NOVAGOLD considered appropriate and reasonable as of the date
such statements are made, are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual
results, activity, performance, or achievements to be materially different from those expressed or implied by such forward-looking statements.
Forward-looking statements are not historical facts but instead represent the expectations of NOVAGOLD management’s estimates and
projections regarding future events or circumstances on the date the statements are made. Important factors that could cause actual results
to differ materially from expectations include the need to obtain additional permits and governmental approvals; the timing and likelihood
of obtaining and maintaining permits necessary to construct and operate; the need for additional financing to complete an updated feasibility
study and to explore and develop properties; availability of financing in the debt and capital markets; disease pandemics; uncertainties
involved in the interpretation of drill results and geological tests and the estimation of reserves and resources; changes in mineral
production performance, exploitation and exploration successes; changes in national and local government legislation, taxation, controls
or regulations and/or changes in the administration of laws, policies and practices, expropriation or nationalization of property and
political or economic developments in the United States or Canada; the need for continued cooperation between the owners of Donlin Gold
to advance the project; the need for cooperation of government agencies and Native groups in the development and operation of properties;
risks of construction and mining projects such as accidents, equipment breakdowns, bad weather, non-compliance with environmental and
permit requirements, unanticipated variation in geological structures, ore grades or recovery rates; unexpected cost increases, which
could include significant increases in estimated capital and operating costs; fluctuations in metal prices and currency exchange rates;
whether or when a positive construction decision will be made regarding the Donlin Gold project; and other risks and uncertainties disclosed
in NOVAGOLD’s most recent reports on Forms 10-K and 10-Q, particularly the “Risk Factors” sections of those reports
and other documents filed by NOVAGOLD with applicable securities regulatory authorities from time to time. Copies of these filings may
be obtained by visiting NOVAGOLD’s website at www.novagold.com, or the SEC website at www.sec.gov, or on SEDAR+ at
www.sedarplus.ca. The forward-looking statements contained herein reflect the beliefs, opinions and projections of NOVAGOLD on
the date the statements are made. NOVAGOLD assumes no obligation to update the forward-looking statements of beliefs, opinions, projections,
or other factors, should they change, except as required by law.
Important Information and Where to Find It
In connection with the proposed Transactions,
NOVAGOLD has filed relevant materials with the SEC and applicable Canadian securities regulators, including, among other filings, a management
information circular and definitive proxy statement on Schedule 14A on October 5, 2026. The management information circular and proxy
statement was first mailed or otherwise disseminated to shareholders of NOVAGOLD seeking their approval of the Transactions-related proposals
on or about October 5, 2026. INVESTORS AND SHAREHOLDERS OF NOVAGOLD ARE URGED TO READ THE MANAGEMENT INFORMATION CIRCULAR AND DEFINITIVE
PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT HAVE BEEN FILED OR WILL BE FILED WITH THE SEC AND APPLICABLE CANADIAN SECURITIES
REGULATORS IN CONNECTION WITH THE TRANSACTIONS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) CAREFULLY AND IN THEIR ENTIRETY BECAUSE
THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS, THE PARTIES TO THE PROPOSED TRANSACTIONS AND RELATED
MATTERS. Investors and shareholders may obtain free copies of the management information circular and proxy statement and other documents
filed by NOVAGOLD with the SEC at http://www.sec.gov, the SEC’s website, under NOVAGOLD’s profile on SEDAR+ at www.sedarplus.ca, or
from NOVAGOLD’s website https://novagold.com/investors/why-invest/.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit
Number
Description
10.1
Restated Exploration and Lode Mining Lease, effective as of May 1, 1995,
by and between Calista and Donlin Gold (f/k/a Donlin Creek LLC), as amended and restated on February 11, 2011 †*▲
10.2
Agreement to Amend Restated Exploration and Lode Mining Lease, effective
as of June 6, 2014, by and between Calista and Donlin Gold †
10.3
Revised and Restated Surface Use Agreement, effective as of June 6, 2014, by and between TKC and
Donlin Gold †*▲
10.4
Surface Lease and Assignment of Mining Lease, dated as of May 9, 2012, by and among Spencer W.
Lyman, Carolyn Motherway Lyman, Lyman Resources and Donlin Gold †*▲
10.5
Bidder’s Preference Agreement, dated as of June 6, 2014, by and among Donlin Gold, Calista
and TKC †*
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
†Certain non-material and confidential information has been
redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The Company hereby undertakes to furnish unredacted copies of any
of the redacted exhibits upon request by the SEC.
*Certain schedules or similar attachments have been omitted pursuant
to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplemental copies of any of the omitted schedules or attachments
upon request by the SEC.
▲Certain personally identifiable information has been omitted
pursuant to item 601(a)(6) of Regulation S-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: October 5, 2026
NOVAGOLD RESOURCES INC.
By:
/s/ Peter Adamek
Peter Adamek
Vice President and Chief Financial Officer
EX-10.1 — EXHIBIT 10.1
EX-10.1
Filename: tm2625949d2_ex10-1.htm · Sequence: 2
Exhibit 10.1
RESTATED
EXPLORATION and LODE MINING LEASE*
EFFECTIVE
MAY 1, 1995
BETWEEN
CALISTA CORPORATION
AND
DONLIN CREEK
LLC
* Exploration
and Lode Mining Lease effective May 1, 1995 restated to reflect all assignments and amendments up to and including February 11, 2011.
TABLE OF CONTENTS
Page
ARTICLE I –
LEASE
1
1.1
Grant of Lease:
1
1.2
Lode Placer Relationship:
3
ARTICLE II
– DCLLC OPERATION
3
2.1
Conduct of Operations:
3
2.2
Ore Processing:
4
2.3
Ore Samples:
4
2.4
Commingling of Ores:
4
2.5
Waste, Rock, Spoil, and Tailings:
4
2.6
Taxes:
5
2.7
Indemnity:
5
2.8
Insurance:
6
2.9
Inspection:
6
2.10
Work Commitments:
6
2.11
Governmental Permits:
7
2.12
Protection from Liens:
7
ARTICLE III
– ROYALTIES
7
3.1
Production Royalties:
7
3.2
Annual Advance Minimum Royalty:
8
3.3
Signature Bonus:
8
3.4
[Intentionally Left Blank]
9
3.5
Payments; Where Made:
9
3.6
Audits; Objections to Payments:
9
3.7
Records:
10
ARTICLE IV
– DEFAULT
10
4.1
Default:
10
4.2
Consequences of Default:
11
ARTICLE V –
TERM; TERMINATION
11
5.1
Term of Agreement:
11
5.2
Access for Reclamation:
11
5.3
Termination by DCLLC:
12
5.4
Termination by Calista:
12
5.5
Rights and Duties Following
Termination:
12
ARTICLE VI
– TITLE TO THE PROPERTY
13
6.1
Calista’s Title Representations
and Warranties:
13
6.2
Title to After-Acquired and
Additional Interests:
13
6.3
Examination of Title:
13
6.4
Defect in Title; Right to Cure:
14
6.5
Lesser Interest; Right of Offset;
Third Party Claims:
14
6.6
[Intentionally Left Blank]
15
6.7
[Intentionally Left Blank]
15
ARTICLE VII
– GENERAL PROVISIONS
16
7.1
Other Business Opportunities:
16
7.2
Confidentiality:
16
I
7.3
Assignment, Designation of Sole
Representative:
17
7.4
Memorandum for Recording:
17
7.5
Laws and Regulations; Severability;
and Force Majeure:
17
7.6
Shareholder Hiring Preference:
18
7.7
Bidder’s Preference Reserved
to Calista
18
7.8
Advisory Committee:
19
7.9
Scholarships:
20
7.10
Calista’s Right to Acquire
Operating Interest:
20
7.11
Calista’s In Kind Contribution:
20
7.12
Notice:
20
7.13
No Implied Covenants:
21
7.14
Attorneys’ Fees:
21
7.15
Entire Agreement:
21
7.16
Title Headings:
22
7.17
Further Instruments:
22
7.18
Binding Effect:
22
7.19
Purchase of Portions of Property
Which Are Subject to Possible Releases of Hazardous Substances
22
ARTICLE VIII
– DEFINITIONS
24
ARTICLE IX
– PROCESSING OUTSIDE MINERALS ON THE PROPERTY
27
9.1
Outside Minerals
27
9.2
Milling
27
9.3
Milling Outside Minerals in
a Mill Located on the Property
27
9.4
Disposal of Resulting Tailings
and Waste Rock
28
9.5
Processing Fee
28
9.6
This Provision Shall Survive
Sale of the Additional Surface Lands
28
* EXHIBIT
A – THE PROPERTY
* EXHIBIT B – NET CASH FLOW
* EXHIBIT C – NET PROCEEDS
II
EXPLORATION AND LODE MINING LEASE
THIS MINING LEASE is made
and entered into as of this 11th day of January, 1996, and effective May 1, 1995, by and between CALISTA CORPORATION,
an Alaskan corporation whose address is 601 West 5th Avenue, Suite 200, Anchorage, Alaska 99501 (hereinafter referred
to as “Calista”) and Donlin Creek LLC., a Delaware limited liability corporation, whose address is 4720 Business Park Blvd.,
Suite G-25, Anchorage, Alaska 99518 (hereinafter referred to as “DCLLC”).#
WITNESSETH
For and in consideration of
the mutual promises and covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
– LEASE
1.1 Grant
of Lease:
(a) Calista
hereby grants, leases, lets and demises unto DCLLC, its successors and assigns, the Property together with all mines, ores, minerals and
mineral deposits of every kind and character whatsoever, in or under the Property; all veins and lodes now owned or hereafter acquired
by Calista extending from or into or contained in the Property; and all other rights, privileges, and easements thereto incident or appurtenant,
together with any rights to the Property to which Calista may become entitled during the Term hereof, for the purpose and with the sole
and exclusive right and privilege during the term of this Agreement, of exploring for, developing, mining, treating, shipping, and otherwise
exploiting and disposing of any and all Valuable minerals.
(b) Calista
further grants to DCLLC the sole and exclusive right and privilege to do any and all reasonable things which DCLLC may deem necessary
or desirable to accomplish any and all of the purposes and rights set forth in or contemplated by this Agreement, including, without limitation,
the sole and exclusive right and privilege:
(i) to
enter upon the Property for purposes of surveying, exploring for, prospecting for, sampling, drilling, developing, mining (whether by
underground, strip, open pit, solution mining or other methods), stockpiling, removing, shipping, transporting, or processing, either
Valuable Minerals or mineral-bearing ores and materials mined or extracted and removed from the Property.
(ii) to
construct, use, maintain, repair, replace and relocate buildings, roads, tunnels, railroad corridors and load out facilities, ore conveyors,
leach pads, leachate collection systems, tailing ponds, waste dumps, ditches, pipelines, power and communication lines, structures, mills,
processing facilities, utilities and other improvements and facilities reasonably required by DCLLC for the full enjoyment of the Property
for the purposes set forth in Section 1.1(b)(i) above and otherwise set forth in this Agreement;
#
The original Exploration and Lode Mining Lease effective May 1, 1995 was entered into between
Calista and Placer Dome U.S. Inc.. All rights and obligations of the lessee under the lease were assigned to DCLLC with the consent of
Calista pursuant to the Consent to Assignment dated January 16, 2009.
1
(iii) to
use so much of the Property and the surface and subsurface thereof (to the extent Calista may lawfully convey this right) as DCLLC may
consider necessary, convenient or suitable for any such purposes, including, without limitation, the storage, stockpiling and/or permanent
disposal of ore, broken rock, mine or other development, production or other operations for the purposes set forth in Section 1.1(b)(i) above
and otherwise set forth in or contemplated by this Agreement;
(iv) to
use, destroy, or cave so much of the surface (to the extent Calista may lawfully convey this right) and subsurface of the Property as
may be reasonably necessary, convenient, suitable for or incidental to any of the rights and privileges of DCLLC hereunder or otherwise
reasonably necessary or convenient for the purposes set forth in this Agreement;
(v) to
use all easements and rights-of-way for ingress and egress to and from the Property to which Calista may be entitled;
(vi) to
appropriate and use, consistent with applicable laws of Alaska and to the extent Calista may lawfully do so, any surface and underground
water or water rights now existing or subsequently discovered or developed on or appurtenant to the Property; and
(vii) to
exercise all other rights which are incidental to any or all of the rights specified, mentioned, or referred to herein.
(c) DCLLC
shall not explore for, develop, use or sell Common Variety Minerals except as permitted by this subparagraph (c) and nothing in this
Agreement shall be construed to permit DCLLC to explore for, develop or mine Common Variety Minerals as a separate Valuable Mineral or
material.
(i) DCLLC
may use, without charge, any Common Variety Minerals, located anywhere on the Property, in connection with its exploration, development,
mining, treating, shipping or other exploration or disposition of Valuable Minerals on the Property.
(ii) DCLLC
may not under the terms of this Agreement, use any Common Variety Minerals, located anywhere on the Property, for the exploration, development,
mining, treating, shipping or other exploration or disposition of Valuable Minerals located on lands not included within the Property.
2
1.2 Lode
Placer Relationship:
Lyman Resources has the right to mine
Placer Deposits, but not Bedrock except as provided below, on the subject Property. The terms of the placer lease between Calista and
Lyman Resources permits Lyman Resources to conduct mining operations on the Property to a depth no greater than sixty (60) feet and to
a Bedrock depth of six (6) feet, but only to the extent necessary to recover Placer Gold which has been physically transported or
washed into fractures in the Bedrock.
DCLLC, shall not prevent or interfere
with the conduct of Lyman Resources’ evaluation, exploration, development, and/or production activities except in the specific case
of a conflict between Lyman Resources’ placer mining operations and a Consumptive Activity. In such a case, DCLLC’s operations
will have the priority to operate. Prior to undertaking Consumptive Activity, DCLLC must provide Lyman Resources written notice at least
two years in advance of any Consumptive Activity. In the event that a two year notice is not made to Lyman Resources prior to a Consumptive
Activity, DCLLC shall stockpile the Placer Gold bearing gravel in an accessible location and/or compensate Lyman Resources for the Net
Value of the portion of the Placer Deposit for which such stockpiling is not possible. Calista shall determine the portion of the Placer
Deposit for which stockpiling is not possible and the Net Value of that material. Calista will consider all available information regarding
Placer Gold grades and operating costs submitted by Lyman Resources and DCLLC. Calista will not however be required to collect data regarding
grade or costs at its own expense. All estimations and determinations to be made by Calista pursuant to this section shall be made in
accordance with sound geologic, engineering and accounting principles customarily applied in the mining industry. In the event of any
dispute between Calista and/or Lyman Resources and DCLLC as to the value of or costs of extracting the Placer Gold as provided above,
the parties agree to submit the dispute to arbitration with the American Arbitration Association subject to the rules governing Commercial
Arbitration.
Calista agrees that it shall endeavor
to obtain the agreement of Lyman Resources to the provisions contained in this section; [***].
ARTICLE II
– DCLLC OPERATION
2.1 Conduct
of Operations:
DCLLC shall have exclusive control of
all operations on or for the benefit of the Property, and of any and all equipment, supplies, machinery, structures, fixtures, improvements
and other assets purchased or otherwise acquired or under its control in connection with such operations. DCLLC may carry out such operations
on the Property as it may, in its sole discretion, determine to be warranted. All of the work which may be performed by DCLLC hereunder
shall be performed in a good and workmanlike manner and in accordance with sound mining and engineering practices, but the timing, nature,
manner and extent of any exploration, development, mining or processing operation shall be within the sole discretion of DCLLC, and there
shall be no implied covenant to begin or continue any such operation. DCLLC shall comply with all laws, rules and regulations of
federal, state and municipal authorities pertaining to any operation or activities hereunder. If DCLLC at any time, and from time to time
after commencing operations, desires to shut down, suspend or cease operations for any reason, it shall have the right to do so, provided,
however, that it shall well and truly meet its obligations to make the payments provided for in Section 3.2 when due and to perform
the work commitments specified in Section 2.10. DCLLC may use and employ such methods of mining as it may desire or find most profitable.
DCLLC shall not be required to mine, preserve, or protect in its mining operations any ores, leachates, precipitates, concentrates or
other products containing Valuable Minerals which, under good mining practices, cannot be mined or shipped at a reasonable profit. Any
decision as to the time, manner and form in which ores or other products containing Valuable Minerals are to be sold shall be made by
DCLLC in its sole discretion.
3
2.2 Ore
Processing:
All determinations with respect to:
(a) whether ore will be beneficiated, processed or milled by DCLLC or sole in a raw state, (b) the methods of beneficiating,
processing, or milling any such ore, (c) the constituents to be recovered therefrom, and (d) the purchasers to whom any ore,
minerals or mineral substances may be sold, shall be made by DCLLC in its sole discretion.
2.3 Ore
Samples:
The mineral content of all ore mined
and removed or processed from the Property (excluding ore leached in place) and the quantities of constituents recovered by DCLLC shall
be determined by DCLLC, or with respect to such ore which is sold, by the mill or smelter to which the ore is sold, in accordance with
standard sampling and analysis procedures, and shall be a weighted average based on the total amount of ore from the Property crushed
and sampled, or the constituents recovered, during an entire calendar quarter. Upon reasonable advance notice to DCLLC, Calista shall
have the right to have representatives present at the time samples are taken, and to take samples for its own use and analysis, for the
purpose of confirming that the sampling and analysis procedure is standard and acceptable according to accepted engineering practices.
2.4 Commingling
of Ores:
DCLLC shall have the right to Commingle
Valuable Minerals with ores or materials derived from other lands or properties, provided the commingling is accomplished only after such
material has been fairly and accurately weighed or measured and sampled for moisture and mineral content. An accurate record of the weight
or volume, along with the results of the sampling of such Valuable Minerals and ores or materials derived from other lands or properties
which are so Commingled, shall be kept for a period of six years and made available to Calista at all reasonable times.
2.5 Waste,
Rock, Spoil, and Tailings:
The ore, mine waters, leachates, pregnant
liquors, pregnant slurries, and other products or compounds of metals or minerals mined from the Property shall be the property of DCLLC,
subject to the Production Royalty as provided herein. DCLLC shall not be liable for Valuable Minerals lost in mining or processing if
such mining or processing is consistent with sound mining and metallurgical engineering practices. The Production Royalty provided for
herein shall be payable only on metals, ores, or minerals recovered prior to the time waste rock, spoil, tailing, or other mine waste
and residue are first disposed of as such, and such waste and residue shall be the sole property of DCLLC during the Term of this Agreement.
[***].
4
2.6 Taxes:
During the term of this Agreement, Calista
shall pay when due all general ad valorem taxes and assessments assessed against the Property, and all other lawful public taxes and assessments,
whether general, specific or otherwise, assessed and levied upon or against the Property, provided that DCLLC shall pay when due those
taxes assessed and levied upon any minerals produced by DCLLC, or attributable to DCLLC’s operations hereunder, or upon or against
the Property and any Equipment, facilities or improvements located upon the Property by or at the direction of DCLLC. Neither party shall
be responsible for any income taxes or taxes imposed upon the other by reason of receipt of Production Royalty or production hereunder.
Notwithstanding the foregoing, DCLLC and Calista shall each have the right to contest in the courts or otherwise the validity or amount
of any taxes or assessment levied or assessed upon or against either of them, the Property or Valuable Minerals hereunder if either deems
the same to be unlawful, unjust, unequal or excessive, or to take such other steps or proceedings as it may deem necessary to secure a
cancellation, reduction, readjustment, or equalization before that party shall be required to pay the same. Neither Calista nor DCLLC
shall permit or suffer the Property or any part thereof, or any Valuable Minerals mined thereon, to be sold at any time for such taxes
or assessments.
2.7 Indemnity:
DCLLC agrees to defend and hold Calista
and TKC harmless and fully indemnify them against any and all claims or demands which may be made upon them or against the Property, for,
or on account of, any debt, expense or liability contracted or incurred by DCLLC in conducting its activities pursuant to this Agreement,
including any liability imposed on Calista or TKC at any time under the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. 9601 et seq. (“CERCLA”) or any other state or federal environmental statute which arises out of DCLLC use or
occupation of the Property, as well as against any and all acts, transactions, and omissions of DCLLC, its agents or servants, in conducting
its activities pursuant to this Agreement, and DCLLC will defend and save Calista and TKC harmless and fully indemnify them as to any
liability, for or on account of injury or death of any person or damage to any property sustained during the Term of this Agreement, resulting
from any such act or omission of DCLLC, its agents or servants; provided, however, that DCLLC shall not be liable hereunder to Calista
or TKC for any claims or demands resulting from any acts or omissions of Calista or TKC agents or employees, or for any liability under
CERCLA arising out of or in any way connected with Calista’s or TKC’s historic, present, or future use or occupation of the
Property, and Calista agrees to hold DCLLC harmless and indemnify DCLLC from any such liability arising from acts or omissions of Calista
but not from acts or omissions of TKC.
5
2.8 Insurance:
DCLLC will carry or cause to be carried
Workers’ Compensation insurance or provide for workers’ compensation insurance coverage through self-insurance as permitted
or required by law. DCLLC shall carry comprehensive general liability insurance with bodily injury and property damage limits of not less
than [***] per person and [***] per occurrence. Such general liability insurance, or self-insurance at DCLLC’s option,
shall name Calista and TKC as an additional insured, but only as respects its liability which arises out of the operations of DCLLC under
this Agreement. Each year upon the anniversary date of this Agreement, DCLLC shall provide Calista with a certificate of insurance or
other evidence reasonably satisfactory to Calista showing DCLLC’s compliance with this Section 2.8.
2.9 Inspection:
Calista and its authorized agents, at
Calista’s risk and expense, shall have the right, exercisable at a mutually convenient time, and in a reasonable manner conforming
to DCLLC’s safety rules and regulations and so as not to interfere with DCLLC’s operations, to go upon the Property for
the purpose of confirming that DCLLC is conducting its operations in the manner required by this Agreement. Calista shall furnish DCLLC
with prior written notice of the time and place of any inspection by Calista pursuant to this Section. Calista shall hold DCLLC harmless
from all claims for damages arising out of any death, personal injury or property damage sustained by Calista, its agents or employees,
while in or upon the Property, whether or not Calista, its agents or employees, are in or upon the Property pursuant to this Section,
which death, injury or damage does not result from DCLLC’s negligence or willful misconduct.
2.10 Work
Commitments:
Subject to its right of termination
and other provisions of this Agreement, DCLLC shall complete work commitments for the benefit of the Property relating to exploration
and development as follows (All references in this Agreement to money shall refer to U.S. Dollars.):
From the effective date of this Agreement to the first Anniversary Date:
[***]
From the first Anniversary Date to the second Anniversary Date:
[***]
From the second Anniversary Date to the third Anniversary Date:
[***]
From the third Anniversary Date to the fourth Anniversary Date:
[***]
Total:
[***]
Any amounts expended by DCLLC in excess
of required expenditures during the first four (4) years of this Agreement may be carried forward toward satisfaction of subsequent
expenditure requirements during the first four years of this Agreement. After DCLLC has completed [***] expenditures on the Property,
it shall have a maximum grace period of two years without obligation to perform additional work commitments, whereafter it shall spend
a minimum of [***] per annum to maintain this Agreement in effect. If, however, DCLLC completes a feasibility study and presents
it to Calista, DCLLC shall have no further work obligations for a subsequent period of four years other than those required by compliance
with applicable governmental rules and regulations. After this four year period, or in the event that DCLLC should assign its rights
under the lease to an unaffiliated third party, whichever is the sooner, then work commitments shall resume at a level of [***] per
annum, with a carry forward of any excess of expenditure over the annual commitment for a period of one year only. In determining the
amount expended for work commitments, there shall be included in the cost to DCLLC the signature bonus, all labor, supervision, payroll
taxes and charges, engineering, research, supplies, equipment, contract services, permitting, taxes, legal fees, transportation, housing,
and accounting. DCLLC will provide Calista with an accounting of its work commitment expenditures within 60 days of each Anniversary date.
If DCLLC shall fail to satisfy the annual work commitment required by this Section 2.10, Calista may declare DCLLC in default in
accordance with Section 4.1 below; provided, however, that if DCLLC elects to cure such default it may do so by paying to Calista
the difference between the amount of work commitment required by this Section 2.10 and the amount DCLLC actually expended during
the year (including any amount available to DCLLC as a credit from the previous year’s work commitment).
6
2.11 Governmental
Permits:
Calista hereby grants DCLLC the right
and authority to apply, in DCLLC’s name, for all necessary permits, licenses and other approvals from the United States of America
or from the State of Alaska, [***] provided however, that this
Agreement shall not require Calista to expend any funds of its own unless it elects to do so.
2.12 Protection
from Liens:
DCLLC shall pay all expenses incurred
by it in its operations on the Property, and any liens placed upon the Property arising from any action of DCLLC shall be resolved and
removed by DCLLC without delay. However, DCLLC shall not be required to remove any such lien as long as DCLLC is actively contesting in
good filth the validity or amount thereof. Nothing in this Section 2.12 shall prohibit DCLLC from mortgaging or otherwise granting
a security interest in any of its rights or interests hereunder; provided, however, the rights of Calista shall not be subordinated to
any rights of such mortgagee or secured party.
ARTICLE III
– ROYALTIES
3.1 Production
Royalties:
(a) A
Net Smelter Return production royalty (“Production Royalty”) of one and one half percent (1.5%) of Net Smelter Returns shall
be paid to Calista from the commencement of commercial production for a period of five (5) years or until Payback occurs whichever
is the shorter. Thereafter, the Production Royalty shall be four and one half percent (4.5%) of Net Smelter Returns.
Calista may elect to take in kind or separately
dispose of its Production Royalty on thirty (30) days advance notice to DCLLC and by the establishment of a separate account at the refiner.
Any extra expenditure incurred by reason of taking in kind or separate disposition by Calista of its Production Royalty shall be individually
borne by Calista. Calista shall be required to establish, all at its sole risk and expense, the separate account and procedures which
may be necessary to receive, store and dispose of its Production Royalty at the rate it is produced. In the event Calista shall fail or
refuse to make the arrangements necessary to take in kind or separately dispose of its Production Royalty, DCLLC will pay Calista any
Production Royalty due Calista according to the procedure set forth in Article III of this Agreement.
7
(b) Net
Proceeds Royalty: In addition to the Production Royalty set forth in subsection (a) above, DCLLC shall pay to Calista a net proceeds
royalty (“Net Proceeds Royalty”) equal to eight percent (8%) of the Net Proceeds realized by DCLLC during each calendar quarter
as calculated in accordance with Exhibit C hereto. The Net Proceeds Royalty shall be paid pursuant to the provisions of Section 3.4(b).
3.2 Annual
Advance Minimum Royalty:
During the Term of this Agreement, unless
DCLLC shall terminate this Agreement on or before any given Anniversary Date of this Agreement, DCLLC shall pay to Calista an Advance
Minimum Royalty (“AMR”) on or before each of the dates indicated below, according to the following schedule:
Advance Minimum Royalties
On execution of this Agreement
[***]
May 1, 1996
[***]
May 1 of each of the years 1997 to 2009 inclusive
[***]
March 10, 2010
[***]
May 1, 2010
[***]
May 1, 2011
[***]
May 1, 2012
[***]
May 1, 2013
[***]
May 1, 2014
[***]
May 1 of each of the years 2015 to 2024 inclusive
[***]
May 1 of each of the years 2025 to 2030 inclusive
[***]
All sums paid to Calista as AMR (including
all amounts of AMR paid by NovaGold Alaska, BGUS and DCLLC prior to the date of this Amendment) shall be recoverable as a credit against
the Production Royalty reserved herein, [***].
3.3 Signature
Bonus:
In acknowledgment of receipt of a signed
letter agreement preparatory to execution of this lease agreement, DCLLC has paid to Calista the sum of [***],
which amount shall be considered an expense for purposes of computing DCLLC’s annual work commitment as provided in Section 2.10
herein.
8
3.4
(a) Payment
of Production Royalty:
Production Royalty payments shall be
paid by DCLLC to Calista on a quarterly basis, and shall be given to Calista on or before 45 days following the quarterly period during
which DCLLC shall have received payment for Valuable Minerals sold by DCLLC. Production Royalties shall accrue to Calista’s account
upon final payment by the smelter, refinery or other ore buyer to DCLLC for the Valuable Minerals sold and for which the Production Royalty
is payable, or upon the crediting of the Valuable minerals to DCLLC’s account. All Annual Advance Royalty and Production Royalty
payments shall be made in accordance with Section 3.5. All Production Royalty payments shall be accompanied by a statement and settlement
sheet showing the quantities and grades of Valuable Minerals mined and sold from the Property, the proceeds of sale, costs, assays and
analyses, and other pertinent information in sufficient detail to explain the calculation of the Production Royalty payment.
(b) Payment
of Net Proceeds Royalty:
The Net Proceeds Royalty shall be payable
by DCLLC to Calista quarterly within 45 days after the end of each calendar quarter commencing with the calendar quarter in which Net
Proceeds are first realized by DCLLC. Each such payment shall be accompanied by a calculation of the Net Proceeds and Net Proceeds Royalty
payable for such calendar quarter. All quarterly payments of the Net Proceeds Royalty to Calista shall be subject to adjustment, if required,
at the end of each calendar year.
3.5 Payments;
Where Made:
Calista shall designate an account with
[***], for purposes of receiving all payments hereunder. All such payments shall be wire transferred or mailed to the
Bank at such address, or to such other single depository bank or savings institution as Calista, its successors or assigns, may designate
from time to time in writing. The date of such wire transfer or posting in the U.S. mail shall be the date of such payment. Payments by
DCLLC to the bank or to such other designated bank or savings institution in accordance herewith shall discharge fully DCLLC’s obligation
with respect to such payment, and DCLLC shall have no duty to apportion or allocate any payment due to Calista, or to its successors and
assigns.
3.6 Audits;
Objections to Payments:
Calista, at its sole election and expense,
shall have the right to procure, not more frequently than once annually following the close of each calendar year, an audit of DCLLC’s
accounts relating to (i) payment of the Production Royalty and Net Proceeds Royalty hereunder and (ii) performance of work commitments
required under Section 2.10, by any authorized representative of Calista; provided, however, until such time, if ever, as
DCLLC activities first generate Net Proceeds, DCLLC shall within 90 days following the end of each calendar year furnish to Calista a
statement of Receipts and Disbursements for the preceding calendar year and such audit rights shall apply to Receipts received and Disbursements
incurred in such calendar year, provided further, that the first such statement shall include all Receipts and Disbursements since
May 1, 1995, the effective date of this Agreement. Any such audit shall be for a reasonable length of time during regular business
hours, at a mutually convenient time, upon reasonable notice by Calista. All royalty payments made and, as applicable, statements of Receipts
and Disbursements in any calendar year shall be considered final and in full accord and satisfaction of all obligations of DCLLC with
respect thereto, unless Calista gives written notice describing and setting forth a specific objection to the calculation thereof within
eighteen (18) months following the close of that calendar year. DCLLC shall account for any agreed upon deficit or excess in royalty payments
made to Calista or, as applicable, statement of Receipts and Disbursements, by adjusting the next quarterly statement and payment following
completion of such audit to account for such deficit or excess.
9
3.7 Records:
DCLLC shall keep and maintain detailed
records of its operations on the Property, including mining and production records, and details as to the quantities of Valuable Minerals
recovered, the amount of Net Smelter Returns, and such financial and accounting records as are necessary to determine the Net Proceeds
realized by DCLLC during each calendar quarter.
ARTICLE IV
– DEFAULT
4.1 Default:
If any party fails in the performance
of any material obligation under this Agreement (for purposes of this Article IV called the “defaulting party”), the
other party shall serve upon the defaulting party written notice of default, describing the default with specificity. If the default is
failure to make any payment when due under this Agreement, the defaulting party shall have thirty (30) days after receipt of notice, to
cure the default. If the default is for breach of any obligation other than the payment of money, the defaulting party shall have sixty
(60) days to cure the default, or if the default reasonably cannot be cured within 60 days, the defaulting party shall commence to cure
the default within 60 days and shall thereafter continue diligently to cure the default.
If the defaulting party disputes that
it is in default with respect to all or part of the breaches set forth in the notice by the non defaulting party, the defaulting party
shall cure and/or commence curing all matters for which it is in default and for which it does not dispute the claim of default (if the
default is payment of money, the defaulting party shall pay all amounts it does not dispute that it owes). For those matters which the
defaulting party disputes, the defaulting party shall commence suit for a declaratory judgment or such other relief as is appropriate
within ninety (90) days in the courts of the State of Alaska, Third Judicial District or a U.S. District Court for the District of Alaska,
and the defaulting party shall not be deemed in default unless and until there has been a final non-appealable judgment entered in writing
by such court; in the event of such judgment, the defaulting party shall have a period of thirty (30) days after such entry of judgment
in which to cure the default so adjudged, or, in the event such default cannot be cured within such thirty (30) day period, the defaulting
party shall commence to cure within such time and shall continue to diligently pursue such cure, failing which this Agreement shall terminate
pursuant to Section 4.2 below. If the defaulting party does not commence suit within 90 days of its receipt of notice, the defaulting
party shall be conclusively presumed not to dispute the claim of default.
10
4.2 Consequences
of Default:
If either party is in material default
under Section 4.1 above, the non-defaulting party shall have the right to terminate this Agreement pursuant to Sections 5.3 and 5.4
hereof. If after notice and opportunity to cure as provided for therein, DCLLC would otherwise be deemed to be in default under Section 4.1
above for failure to make any Annual Advance Royalty payment under Section 3.2 above, then such non-payment shall not constitute
a default, but shall instead be deemed a termination of this Agreement by DCLLC pursuant to Section 5.3 below, effective as of the
scheduled due date of such payment. Termination of this Agreement by default shall be without prejudice to any other remedies available
to the non-defaulting party.
ARTICLE V
– TERM; TERMINATION
5.1 Term
of Agreement:
This Agreement shall remain in effect
until April 30, 2031 and shall continue on a year-to-year basis thereafter so long as either (a) Mining or Processing Operations
are carried out on or with respect to the Property in good faith on a continuous basis in such year; or (b) DCLLC pays to Calista
an AMR of $3,000,000 in and for such year (the “Term”). Any AMR paid by DCLLC to Calista under this Section 5.1 shall
be recoverable as a credit against the NSR reserved herein in accordance with the provisions of Section 3.2 hereof. The amount of
the $3,000,000 AMR payable under this Section 5.1 shall adjusted on January 1 of each year beginning January 1, 2011 for
any increase or decrease in the Consumer Price Index for Urban Wage Earners and Clerical Workers published by the United States Department
of Labor, Bureau of Labor Statistics, entitled “All Items” and applicable to Anchorage, Alaska, using 2010 as the base year
for such adjustments.
5.2 Access
for Reclamation:
(a) DCLLC
shall reclaim the surface of the Property disturbed by DCLLC to a stable condition and in accordance with all State of Alaska and Federal
reclamation laws, rules, and regulations as they are developed whether applicable to Calista owned lands or not.
(b) Calista
shall be accorded by DCLLC a full right to review and comment upon the reclamation plan to be prepared by DCLLC, and DCLLC shall consult
with and consider Calista’s views in relation to such activities prior to such plan being submitted to State of Alaska and Federal
regulatory authorities. The foregoing does not preclude Calista’s comments to such agencies.
11
(c) Upon
the expiration or sooner termination of this Agreement, DCLLC shall have, for a period of three (3) years after such expiration or
termination or so long thereafter as may be required by any governmental authority, the cost-free, non-exclusive right of ingress and
egress to and from and across the Property and the use of the Property for the purposes of reclaiming any disturbances of the Property
and other lands in the vicinity of the Property caused by DCLLC’s operations thereon.
(d) Notwithstanding
any provisions of this Agreement to the contrary, DCLLC assumes no responsibility or obligation to reclaim or otherwise cure disturbances
of the Property made before May 1, 1995, provided however, that DCLLC agrees to be responsible for such antecedent disturbances to
the extent such disturbed lands are re-disturbed by DCLLC during its operations hereunder.
5.3 Termination
by DCLLC:
DCLLC shall have the right to terminate,
surrender and relinquish this Agreement, either in its entirety, or in part as to any portion of the Property, at any time by giving Calista
thirty (30) days’ advance written notice of its intention, specifying the portion or portions of the Property as to which this Agreement
is terminated, and this Agreement shall terminate as to that portion or portions specified in the notice. In the event such written notice
is received by Calista after March 15th, then DCLLC shall pay Calista the Annual AMR payment due. In the event DCLLC shall
terminate this Agreement, upon such termination all rights and interests of DCLLC under this Agreement shall terminate as to the portion
or portions of the Property to which such termination applies, and subject to Sections 2.5 and 5.5 of this Agreement, and subject to any
payments due to Calista pursuant to Section 3.1 of this Agreement, DCLLC shall not be required to perform any further obligations
under this Agreement. In the event DCLLC shall terminate this Agreement in part, this Agreement shall remain in full force and effect
except with respect to that portion or portions of the Property as to which this Agreement is terminated, provided that such partial termination
shall not reduce any Annual AMR payable under Section 3.2.
5.4 Termination
by Calista:
Should
DCLLC be in default of any of its material obligations under this Agreement, and failed to cure its default or seek judicial resolution
as determined and provided for in Section 4.1 hereof, then Calista may, at its election, terminate this Agreement by giving notice
of such intention to DCLLC, and, upon DCLLC’s receipt of such notice, this Agreement shall be conclusively deemed terminated
provided however that such termination shall be without prejudice to any other remedies Calista may have.
5.5 Rights
and Duties Following Termination:
In the event of termination of this
Agreement, DCLLC agrees, subject to Section 5.2 above, to surrender quietly and peaceably that portion or portions of Property as
to which this Agreement is terminated. Within sixty (60) days after such termination, at Calista’s request, DCLLC agrees to execute
a recordable release, assignment, or deed quitclaiming the property to Calista. After termination of this Agreement DCLLC shall reclaim
the Property in accordance with any plan of reclamation required by a governmental entity and in conformity with good mining practices.
All buildings, mining structures, and equipment left on the Property shall be placed in a safe condition.
12
For a period of three years after the
effective date of termination, DCLLC shall have the right to remove its Equipment. DCLLC will, at the request of Calista, leave any permanent
structures constructed on the Property for the use and benefit of Calista, except as to any of such structures for which DCLLC has a definite
and immediate need elsewhere in its organization. However, any permanent housing or crew quarters shall be left on the Property for the
use and benefit of Calista at Calista’s request. The parties expressly agree that a default by DCLLC under this Agreement shall
not result in the forfeiture of the Equipment to Calista. If DCLLC is delayed by snowdrifts, washouts, inclement weather, or other climatic
condition from completing removal of the Equipment within such three-year period, then the time shall be extended by a reasonable period
as required by DCLLC. All Equipment not removed prior to the expiration of such period shall become and remain the sole property of Calista.
Within 60 days after termination of this Agreement as to some or all of the Property, upon Calista’s written request DCLLC shall
make available to Calista all non-interpretive geological information including but not limited to metallurgical; geological, geophysical,
geochemical, milling data, survey notes, maps and reports as DCLLC may then have available concerning the portion or portions of the Property
as to which this Agreement is terminated which Calista may have copied or reproduced at its sole expense. DCLLC expressly disclaims any
and all representations and warranties whatsoever with respect to the accuracy, reliability or suitability of such information for any
purpose, and Calista shall comply with the provisions of Section 7.2 below with respect to such information as may be provided under
this Section 5.5, if such termination applies to less than all of the Property then remaining subject to this Agreement.
ARTICLE VI
– TITLE TO THE PROPERTY
6.1 Calista’s
Title Representations and Warranties:
Calista
warrants and will forever defend the title of DCLLC, its successors and assigns, in the Property against all claims and demands
of any entity, person or persons whatsoever. If there are any existing liens, encumbrances or other burdens on production, Calista shall
discharge said liens, encumbrances or other burdens on production, and shall indemnify and hold DCLLC harmless from the same.
6.2 Title
to After-Acquired and Additional Interests:
This Agreement applies and extends to
any further or additional right, title, interest or estate heretofore or hereafter acquired by Calista in or to the Property or any part
thereof.
6.3 Examination
of Title:
Upon execution and delivery of this
Agreement by Calista, Calista shall deliver to DCLLC copies of the documents under which title to the Property was transferred to Calista.
DCLLC shall have 120 days from the effective date thereof to examine Calista’s title to the Property.
13
6.4 Defect
in Title; Right to Cure:
If DCLLC, in its sole discretion, determines
at any time within that 120-day period provided for in Section 6.3 that Calista’s title is defective or uncertain, DCLLC may
terminate this Agreement upon written notice to Calista of such defect or uncertainty and, upon receipt of such notice by Calista, this
Agreement shall be deemed terminated. Without prejudice to its rights of termination hereunder, at any time while this Agreement is in
effect, DCLLC may, at its expense, initiate and prosecute any such action as may be necessary or desirable in the opinion of DCLLC to
cure, remove, or correct title defects, recording of the Property, or other circumstances which violate Calista’s title to the Property,
which renders Calista’s title to the Property in the reasonable judgment of DCLLC, either not good or not safe for mining purposes,
or which would prevent or hinder the leasing of Calista’s rights in the Property to DCLLC. Such action may include, but shall not
be limited to, initiating or prosecuting in its name or in Calista’s name, or both, proceedings to obtain possession of, or to quiet
title to, the Property, or any portion thereof, provided that DCLLC shall only take such action after consultation with Calista. Calista
shall cooperate with DCLLC and shall execute all documents and take such actions as DCLLC may reasonably request in connection with such
action. DCLLC, at its option, may pay and discharge any taxes, mortgages or other liens existing, levied or assessed on or against the
Property, or may be subrogated to the right of any holder or holders thereof. All reasonable expenses and costs incurred by DCLLC in initiating
and prosecuting such actions including reasonable attorneys fees shall be credited against Production Royalty payments becoming due to
Calista, or by enforcement of subrogated rights against Calista in any court of competent jurisdiction.
6.5 Lesser
Interest; Right of Offset; Third Party Claims:
(a) If
Calista fails to satisfy and discharge any Encumbrance chargeable solely or in part to Calista on the Property, or suffers or permits
any Encumbrance to be imposed upon the Property, or fails to diligently contest the validity or amount of such Encumbrance, DCLLC at its
option may, but shall not be obligated to, pay for and discharge any Encumbrance and set off any such payment by withholding and retaining
from Production Royalty payments due Calista any amounts so paid by DCLLC, without prejudice to any right of Calista to recover from DCLLC
or against the Property the amount of such payment in any manner or by any remedy whatsoever, and DCLLC shall have all the rights and
remedies against Calista which the mortgagor, lienor or creditor had immediately prior to the time of such payment. Upon the request of
DCLLC, Calista shall promptly make, execute, acknowledge and deliver to DCLLC any and all instruments (in form and substance satisfactory
to DCLLC) that DCLLC in its sole judgment may deem necessary or desirable to fully effectuate the provisions of this Section 6.5.
(b) If
it appears that any person or entity not a party hereto may have a claim of ownership in the Property or a claim to share in the production
of Valuable Minerals produced from the Property (an “Adverse Claim”), DCLLC at its sole discretion, after written notice to
Calista, may suspend its obligation to make payments as provided herein, and in lieu thereof, may deposit in an interest bearing account
payments equivalent to payments which may otherwise become due to Calista. Such deposit or deposits shall remain in such interest-bearing
account until the claim or controversy is resolved or settled by final court decision, by arbitration, negotiation or otherwise. If DCLLC
is required to make any reasonable payments to such persons or entities not a party hereto as a result of, or in settlement of, any such
Adverse Claim, either by way of contract, settlement, compromise, final court judgment, or otherwise, DCLLC may recover from or credit
against, any payments thereafter becoming due Calista hereunder, the amount of DCLLC’s damages (including reasonable attorney’s
fees) resulting from resolution of such Adverse Claim.
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(c) This
Section 6.5 shall be deemed cumulative and in addition to, and not in lieu of, any other remedy provided by law or in equity or otherwise
provided in this Agreement.
6.6
(a) The
lands listed in Exhibit A, Section 2 include lands that have been selected by Calista, but not yet conveyed to Calista, pursuant
to the Alaska Native Claims Settlement Act (ANCSA), 43 USC §1601 et seq. (the “Selected Lands”). The Selected Lands are
among those lands subject to the terms of Section 6.2 above. When conveyed to Calista, such Selected Lands shall become Property
subject to the terms of this Agreement.
(b) The
United States Bureau of Land Management (BLM) presently holds interim management authority over such Selected Lands pursuant to ANCSA
pending their conveyance to Calista, and Calista has no authority to authorize DCLLC to enter upon or use such lands pending their conveyance
to Calista. Calista agrees to submit a written consent to the use of any Selected Lands required by DCLLC which is consistent with the
uses described in this Agreement and support any request by DCLLC to the BLM to authorize DCLLC to enter upon and use such lands prior
to their conveyance to Calista, or to make such request itself. To the extent it has the power to do so, Calista hereby includes the Selected
Lands in this Agreement and authorizes DCLLC to occupy and use such lands pursuant to this Agreement.
(c) Calista
makes no title warranties or representations whatsoever to such Selected Lands, other than that, when conveyed to it, it will own such
lands as and to the extent conveyed to it pursuant to ANCSA, 43 USC §1601 et seq. (subject to the reservations, exceptions, exclusions,
and limitations set forth in said conveyance(s)), free and clear of any liens, encumbrances, or adverse claims of any kind arising by,
through, or under Calista but not otherwise. Calista disclaims any warranty or representation that such Selected Lands will eventually
be conveyed to Calista.
6.7
[***]
15
ARTICLE VII
– GENERAL PROVISIONS
7.1 Other
Business Opportunities:
This
Agreement is, and the rights and obligations of the parties are, strictly limited to the Property. Except as expressly provided herein,
the parties shall have the free and unrestricted right to independently engage in, and receive the full benefits of, any and all business
ventures of any sort whatever without consulting the other or inviting or allowing the other to participate therein. Neither of
the parties shall be under any fiduciary or other duty to the other which will prevent it from engaging in or enjoying the benefits of,
any competing venture or ventures outside the Property. The legal doctrines of “corporate opportunity” or “business
opportunity” as developed or applied by any court or authority of any jurisdiction and sometimes applied to persons or legal entities
occupying a joint venture or other fiduciary status shall not be applied to any other activity, venture, or operation of either party.
7.2 Confidentiality:
(a) For
the term of this Agreement, the parties agree to treat this Agreement and all Information relating to this Agreement as confidential.
Such information shall not be disclosed to any other third party except corporations or business entities which control, are controlled
by or are under common control with a party hereto, without the prior written agreement of DCLLC or Calista, as the case may be; and in
the event of a permitted disclosure of Information to an unrelated third party, such party shall be required to execute an agreement to
keep such Information confidential prior to the disclosure thereof. In the event that Calista or DCLLC is required by any law, rule, regulation,
or order to disclose to the public any Information, it shall immediately notify the other of such requirement and the terms thereof, together
with a copy of such release of Information as may be contemplated, prior to such disclosure. The party receiving such notice shall then
have the right to approve such disclosure or to request, prior to disclosure, confidential treatment of any of the information of such
terms as it shall, in its sole discretion, determine. The disclosing party shall use its best efforts to comply with such request prior
to making the required disclosure of Information.
16
(b) Following
expiration or termination of this Agreement, Calista may not disclose to others Information provided Calista hereunder, unless such disclosure
shall be accompanied by a disclaimer of any representation as to the accuracy or reliability of such Information for any purpose.
7.3 Assignment,
Designation of Sole Representative:
(a) The
rights, benefits and obligations of either party hereto may be assigned in whole or in part to persons or entities capable of performing
the obligations of the assigning party, and the provisions of this Agreement shall inure to the benefit of and be binding upon the heirs,
personal representatives, beneficiaries, successors and assigns. No change or division in the ownership of the Property, or payments hereunder,
shall operate to enlarge the obligations or diminish the rights of DCLLC. Prior to the time of any assignment of ownership by either party,
notice shall be given of such pending assignment by Assignor to the other party to this Agreement, furnishing in detail the Assignee’s
credentials as to mining capabilities and financial ability. No assignment shall be binding unless the assignee acknowledges in writing
that it understands its obligations under this Agreement and has met with both parties to this Agreement. No assignment by DCLLC shall
be effective without the written consent of Calista, provided that such consent shall not be unreasonably withheld.
(b) Should
this Agreement, or an assignment by either party, involve the division of ownership in the Property or in an interest in this Agreement,
the parties involved with the Agreement or assignment will designate a person to be the sole representative of the interests under this
Agreement of either “Calista” or “DCLLC”, as the case may be. If this person represents Calista, DCLLC shall be
responsible for making all required payments, and for addressing all other required notices and communications, only to this person. If
this person represents DCLLC, such persons shall be responsible for the tender of all required payments to Calista and Calista shall be
required to communicate only with this person in matters concerning this Agreement.
7.4 Memorandum
for Recording:
This Agreement shall not be recorded
by Calista without DCLLC’s prior written consent. If requested by either party, the parties agree to execute a written memorandum
of even date herewith sufficient to be entitled to be recorded under the laws of Alaska, and which shall recite that all of their right,
title, and interest in and to the Property is held subject to this Agreement.
7.5 Laws
and Regulations; Severability; and Force Majeure:
This
Agreement shall be construed and interpreted in accordance with, and governed and enforced in all respects by, the laws of the State of
Alaska. Should any dispute involving this Agreement be litigated, such litigation may be initiated and tried in either the judicial system
of the State of Alaska or the Federal Courts of the United States, whichever may be appropriate and available. If any party to this Agreement
be an entity other than a real person (such as a partnership, association or corporation), the party shall be required to comply with
all Alaska laws concerning the rights of the party to do business and hold an interest in real property in the State of Alaska. In the
event any provision of this Agreement is, or the operations contemplated hereby are, found to be inconsistent with, or contrary to, any
applicable law, rule, or regulation, the latter shall be deemed to control; and this Agreement shall be regarded as modified accordingly
and, as so modified, shall continue in full force and effect.
17
Except
for the obligation to make Annual AMR or NSR payments when due hereunder, the obligations of DCLLC under this Agreement shall be
suspended, and it shall not be deemed in default or liable for damages or subject to other remedies while DCLLC is prevented from complying
herewith by acts of God, the elements, riots, acts or failures to act on the part of federal or state agencies; inability to obtain necessary
governmental approvals, licenses or permits on reasonably acceptable terms (so long as DCLLC diligently proceeds with an appropriate challenge
to such terms); inability to secure materials or to obtain access to the Property; strikes; lockouts; damage to, destruction or unavoidable
shutdown of, necessary facilities; unavoidable accidents; uncontrollable delays in transportation; or any other force, action or event
on account of any eventuality or condition, whether enumerated or not, beyond the reasonable control of DCLLC; provided, however, that
settlement of strikes or lockouts shall be entirely within DCLLC’s discretion; and provided, further, that DCLLC shall promptly
notify Calista and shall exercise diligence in an effort to remove or overcome the cause of such inability to comply.
7.6 Shareholder
Hiring Preference:
DCLLC recognizes that it is in its best
interests to hire local persons as employees whenever possible. Therefore, during the term of this Agreement, DCLLC shall use all reasonable
efforts to hire shareholders of Calista or members of their families for positions for which they are suitably qualified or experienced
and available at the time of proposed hire in connection with DCLLC’s operations on the Property at prevailing market wage and salary
rates. To facilitate such hiring, Calista shall designate at the beginning of each calendar year a hiring liaison office which shall assist
DCLLC in identifying and hiring qualified and available employees and to which DCLLC shall deliver on or before March 31 of each
year a list of employment positions which it anticipates it will need to fill during the coming year. DCLLC shall take reasonable measures
to train Calista shareholders and members of their families when DCLLC has advance knowledge of vacant positions.
DCLLC also shall include in all of its
agreements with independent contractors relating to operations on the Property a clause requiring such independent contractors to use
all reasonable efforts to hire shareholders of Calista and members of their families in accordance with the provisions of this Agreement.
It is not the intention of the parties
to create any legal right whatsoever in any individual shareholder or member of their families, or to confer standing upon any shareholder
or member of their families to contest any decision made by DCLLC or Calista under this Agreement.
7.7 Bidder’s
Preference Reserved to Calista:
On or before March 31 of each year,
DCLLC shall deliver to Calista a written notice describing the types of contracts for which or on which DCLLC may be seeking proposals
or bids for work on the Property during the next twelve (12) months. In addition, whenever during the term of this Agreement DCLLC seeks
proposals for or bids on any contract, for work on or for the Property, DCLLC shall:
(a) Notify
Calista in the same manner as it notifies others from whom it is seeking proposals for bids on such contracts; and
18
(b) Invite
Calista or its affiliates to submit proposals for or bids on such contract. Any proposal or bid submitted by Calista or its designee shall
be accepted if Calista or the affiliate is competent and capable of performing said proposal or bid and if:
(i) Said
proposal or bid is substantially equivalent to or better than (in terms of quality and time of performance) the lowest qualified proposal
or bid received by DCLLC which DCLLC otherwise would have accepted; and
(ii) the
cost of said proposal or bid does not exceed by more than five percent (5%) the cost of the lowest qualified proposal or bid received
by DCLLC which DCLLC otherwise would have accepted.
DCLLC reserves the
right to require a performance bond or guaranty from any designated contractor. DCLLC further reserves the right to perform any and all
operations contemplated by this Agreement by itself without seeking any proposals or bids.
DCLLC shall include
in all of its agreements with contractors for the performance of activities or operations on the Property a provision concerning bidder’s
preference similar to this Section 7.7. Nothing in this Section shall limit DCLLC’s ability to enter contracts with a
duration greater than one year provided that the provisions of this Section are complied with at the initiation of the contract.
7.8 Advisory
Committee:
Calista and DCLLC will promptly form
an Advisory Technical Review Committee (“the Committee”). The Committee shall be composed of four members, two designated
by each party, The Committee need not meet more frequently than semi-annually. Either party may request a meeting of the Committee upon
fourteen (14) days’ advance written notice. The purpose of the Committee will generally be to advise and consult on all matters
concerning DCLLC’s exploration and development plans and the results thereof, to undertake joint field visits, and to plan future
field operations. DCLLC shall provide Calista’s Committee representatives copies of such non-interpretive geological, geophysical
and geochemical data, assays, drill data, drill core, maps, metallurgical data, surveys and development plans as Calista shall reasonably
deem appropriate to ensure a beneficial working relationship. Notwithstanding the views of the Committee, all operational decisions with
respect to technical and financial matters shall be made at the sole discretion of DCLLC. With respect to access issues; relationships
with other native entities (e.g., corporations, villages, tribal groups, non-profit service providers); claim holders, and cultural issues,
Calista will take the lead role and all final decisions on such matters shall require the agreement of both DCLLC and Calista; [***]. A consensus of the Committee shall determine all other issues.
19
7.9 Scholarships:
During
the first five (5) years of this Agreement commencing on the effective date, or until this Agreement is terminated, whichever
is sooner, DCLLC shall provide [***] per year during the term of the Agreement for scholarships for Calista students seeking a degree
or certificate in some technical field associated with the mining industry. DCLLC will provide mining or exploration related employment
and training to at least one scholarship student during the mining season. The parties shall mutually agree upon the recipient(s) of
such scholarship. At the end of the 5 year period DCLLC will review and decide upon the scholarships, if any, award and its amount on
a yearly basis provided that in each year of the Term commencing with the year starting on May 1, 2009, DCLLC shall provide the amount
of [***] per year for scholarships to Calista students, which amount will increase to [***] per year following [***] and to [***] per year following [***].
These scholarships will be focused on skills that will potentially be of use to the mining operations and environmental activities contemplated
for the Project and may include commitments to specific individuals over multiple year study programs. These funds are contributed to,
and scholarships are awarded by, the Calista Scholarship Fund, a separate entity from Calista. DCLLC and Calista will jointly agree on
recommendations to be made to the Calista Scholarship Fund concerning the selection of the recipients of such scholarships.
[***]
[***]
7.12 Notice:
Any notice, election, report or other
correspondence required or permitted hereunder shall be in writing and (i) delivered personally to the designated officer of the
party to whom directed; or (ii) sent by registered or certified United States mail, postage prepaid, return receipt requested; or
(iii) sent by telegram, telex, or cablegram, with all necessary charges fully prepaid, confirmation of delivery requested. All such
notices shall be addressed to the party to whom directed as follows:
DCLLC:
Donlin Creek LLC
4720 Business Park Blvd., Suite G-25
Anchorage, Alaska 99518
Attn: General Manager
20
With copy to:
Barrick Gold U.S. Inc.
c/o Barrick Gold of North America Inc.
136 East South Temple, Suite 1300
Salt Lake City, Utah 84111
Attn: Regional General Counsel
and a copy to:
NovaGold Resources Alaska, Inc.
c/o NovaGold Resources Inc.
Suite 2300, 200 Granville Street
Vancouver, BC V6C 1S4
Attn: Chief Executive Officer
Calista:
Calista Corporation
301 Calista Court, Suite A
Anchorage, Alaska 99518
Attn: Vice President-Land and Natural Resources
Either party may, from time to time,
change its address for future notices hereunder by notice in accordance with this Section 7.12. Notices, all other documents, and
payments shall be complete and deemed to have been given or made when mailed, or upon personal delivery when delivered personally, or
when sent by telegram, telex, or cablegram.
7.13 No
Implied Covenants:
Calista understands, and expressly acknowledges
and agrees, that no implied covenants, warranties or conditions whatsoever shall be read into or implied by this Agreement relating to
the exploration, development, prospecting, mining, or production of Valuable Minerals, or the time therefor, or to any obligation of DCLLC
hereunder, or to the measure of diligence thereof.
7.14 Attorneys’
Fees:
In
the event that either party brings any action to enforce or interpret this Agreement or which arises out of the negotiations, execution
or operations under this Agreement, the prevailing party in any such action shall be entitled to recover its reasonable costs and attorneys’
fees incurred, including any such costs and fees associated with any appeal.
7.15 Entire
Agreement:
This
Agreement contains all of the representations and agreements between the parties with respect to the Property and the subject matter hereof.
This Agreement shall supersede and replace any and all prior representations, negotiations and agreements of the parties, including, without
limitation, that certain letter agreement between the parties dated as of April 6, 1995. No modification or waiver of the
terms and conditions of this Agreement shall be binding upon either party unless in writing, dated subsequent to the effective date of
this Agreement, and executed by an authorized representative of such party. No waiver by any party of a breach of any of the provisions
of this Agreement shall be construed as a waiver of any subsequent breach, whether of the same or a different character.
21
7.16 Title
Headings:
The title headings of the respective
articles and sections of this Agreement are inserted for convenience only, and shall not be deemed to be a part of this Agreement or considered
in construing this Agreement.
7.17 Further
Instruments:
The parties hereto agree that they will
execute any and all other instruments that may be necessary or required to carry out and effectuate any and all of the provisions of this
Agreement.
7.18 Binding
Effect:
Subject
to Section 7.3 above, this Agreement shall be binding upon, and shall inure to, the benefit of the parties hereto, their heirs,
administrators, legal representatives, successors and assigns.
7.19 Purchase of Portions of Property Which Are Subject to Possible Releases of Hazardous Substances.
The
parties have agreed to the following additional procedures governing the purchase of portions of the Property from Calista:
(a) Identification
of Portions of Property Subject to Sale and Purchase. DCLLC shall use its best efforts to identify, in consultation with Calista,
those portions of the Property to which Calista owns the surface estate and: (A) on which Hazardous Substances or mining or other
wastes containing Hazardous Substances will be stored or disposed of; or (B) on which there is a substantial possibility of a release
of Hazardous Substances; or (C) on which a release of Hazardous Substances has occurred (“Affected Property”). Such Affected
Property shall include, without limitation, any tailings impoundment and associated lands including any watercourse or aquifer draining
such tailings impoundment, any lands on which a mill site or beneficiation facility is located and associated lands, and, if appropriate
given its chemical characteristics, any waste rock or overburden dump or storage area, and the lands on which any Hazardous Substance
is stored, and the portion of the Property on which any release of Hazardous Substances has occurred. Such Affected Property shall be
identified prior to the time the use of Hazardous Substances on the Property is initiated, preferably at the time a Feasibility Study
is issued, and at any time thereafter when appropriate, including when a release of Hazardous Substances has occurred. DCLLC shall also
identify pursuant to this subparagraph lands to which Calista owns only the subsurface interest pursuant to ANCSA, and such lands shall
be considered “Affected Lands” fully subject to the further provisions of this Paragraph 7.19, except that the selling price
for such lands shall be [***], which the Parties agree represents a fair estimation of the Fair Market Value of such subsurface
estate, taking into account (i) the reservation by Calista of a [***] royalty on any minerals produced therefrom, and (ii) that
DCLLC has chosen to locate facilities upon such lands.
22
(b) Calista
may reserve to itself all royalties otherwise payable to Calista under this Agreement on such Affected Property, including on Valuable
Minerals originally in place on such Affected Property, and on Valuable Minerals subsequently placed on such Affected Property in any
form, including as tailings or waste rock subsequently processed by DCLLC.
(c) The
Parties agree that at the time of conveyance by Calista to DCLLC all such Affected Property is in its natural state, uncontaminated by
any release of Hazardous Substances by any person or entity other than DCLLC, except where DCLLC has prior to such conveyance provided
to Calista information conclusively establishing otherwise by environmental studies, including without limitation, soil borings, water
samples, and other evidence sufficient to reasonably establish the nature of and extent to which Hazardous Substances are present.
(d) “Put”
to DCLLC at Option of Calista. At its sole option, within sixty (60) days of receipt of notice of land identification pursuant to
subsection (a) above, Calista may tender to DCLLC for its purchase pursuant to the terms of this subsection 7.19, by way of delivery
of quitclaim deeds, the title it possesses to any portion or all of the Affected Property identified pursuant to the procedures set forth
in subsection 7.19(a) above that it wishes to convey, and DCLLC shall accept such tender. Upon acceptance of the tender, such Affected
Property ceases to be part of the Property for purposes of this Agreement (except as to royalties retained in the Affected Property).
DCLLC shall defend, indemnify, and hold harmless Calista from and against any and all claims or liabilities which arise out of or result
in any way from activities conducted on such Affected Property after the date of transfer of such Affected Property to DCLLC, except for
conditions in existence on the Affected Property prior to such transfer.
(e) Price.
Except as set forth in subsection (a) above with respect to lands in which Calista owns only the subsurface estate, the purchase
price to be paid by DCLLC for any Affected Property tendered to it pursuant to the provisions of subsection 7.19(d) by Calista shall
be the Fair Market Value of the Affected Property (taking into account the contaminated nature of the Affected Property at the time of
conveyance where applicable) to be determined as follows: the Parties shall jointly acquire and pay for an appraisal of the Affected Property
to be conveyed by Calista from an MAI certified appraiser. The appraisal shall finally determine the appraised value of the portion of
the Affected Property to be conveyed unless, within 30 days of its receipt of the appraisal, a Party gives notice to the other Party that
it disagrees with the appraised value stated in the initial appraisal. The Party giving notice of its disagreement shall then obtain a
second appraisal, at its own expense, within 120 days of giving such notice to the other Party. Failure of the Parties to agree on an
appraised value after review by the parties of the two appraisals shall result in the two appraisers selecting a third appraiser who shall
conduct a third appraisal. The appraised value established by the third appraiser shall be binding on both parties. The cost of the third
appraisal shall be shared equally by both parties.
23
(f) Tender
of Title by DCLLC. At the conclusion of mining operations on the Property and after reclamation and removal of operations on the Affected
Property, and subject to DCLLC’s right to remove buildings and other improvements, upon request of Calista, DCLLC shall tender to
Calista, for its purchase at the Fair Market Value of the Affected Property at the time of such tender, determined by appraisal in the
manner set forth in subsection (e) above (except as set forth in subsection (a) above with respect to lands in which Calista
owns only the subsurface estate, in which case the selling price shall be [***] per acre), all the title to any Affected Property it
has purchased pursuant to this Section 7.19. Calista may accept none, all or any portion of such tender in its sole discretion. Such
tenders shall be accepted, if at all, within one year. Calista shall defend, indemnify, and hold harmless DCLLC from and against any and
all claims or liabilities which arise out of or result in any way from activities conducted on such Affected Property after the date of
transfer of such Affected Property back to Calista, except for conditions in existence on the Affected Property prior to such transfer.
(g) Definitions.
(i) As
used in this Subsection 7.19, the term “Hazardous Substances” means any hazardous waste or hazardous substance as defined
in or pursuant to any Environmental Law.
(ii) As
used in this Subsection 7.19, the term “Environmental Laws” means any and all applicable federal, state, or local laws, statutes,
ordinances, rules, regulations, permits, approvals, authorizations, variances, codes, standards, guidelines, decisions, decrees, rulings,
orders, notices, binding agreements, or other requirements [***] relating to or imposing liability or standards
of conduct concerning any Hazardous Substances or the manufacture, management, transportation, storage, use, disposal, release, or threatened
release of any Hazardous Substances; preservation, protection, or remediation of the environment; or the environmental conditions on,
under, or about the Property. “Environmental Law” includes but is not limited to the Clean Water Act (also known as the Federal
Water Pollution Control Act), 33 U.S.C. § 1251 et seq., the Clean Air Act, 42 U.S.C. § 7401 et seq., the Federal
Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. § 136 et seq., the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (“CERCLA”), 42 U.S.C. § 9601 et seq., the Superfund Amendments and Reauthorization
Act of 1986, Pub. L. 99-499, 100 Stat. 1613, the Emergency Planning and Community Right To Know Act, 42 U.S.C. § 11001 et seq.,
the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6901 et seq., the Occupational Safety
and Health Act, 29 U.S.C. §§ 656 and 657, AS 27.19, AS 46, and rules, regulations, codes, standards, or guidelines promulgated
pursuant to such laws, as such laws, statutes, ordinances, rules, regulations, codes, standards, and guidelines are amended from time
to time.
ARTICLE VIII
– DEFINITIONS
8.1 The term “Property” means the lands described in Exhibit A hereto, as the same may be
amended from time to time, and by this reference incorporated herein (the “Property”), except as provided in Section 6.6
with respect to Selected Lands.
8.2 The
term “Agreement” means this Exploration and Lode Mining Lease.
24
8.3 The term “Valuable Minerals” means all ores, metals, minerals and materials (excluding minerals
of any kind contained within a Placer Deposit and all deposits of coal, oil and gas, and associated hydrocarbons) found in, on, or under
the Property.
8.4 The term “Common Variety Minerals” means sand, silt, stone, gravel, pumice, pumicite, cinders
and petrified wood.
8.5 The term “Placer Deposit” as used in this Agreement shall mean all alluvial deposits, sand,
gravel and detrital material, including any valuable minerals contained therein, which lie physically on, or above, Bedrock,
8.6 The term “Bedrock” shall mean all rock, fresh, altered, or weathered in place, which has not
been moved to its present location by fluvial, glaciofluvial, glacial or mass wasting processes.
8.7 The term “Placer Gold” shall mean all gold, silver or other metals or mineral bearing ores,
recovered as a primary product or as by-products, derived and extracted from a Placer Deposit.
8.8 The term “Lyman Resources” shall refer to Lyman Resources in Alaska Inc., the lessee of the
Placer Deposits on the Property (the Lyman Placer Lease is identified in Exhibit A).
8.9 The term “Consumptive Activity” shall mean those activities of DCLLC which will deprive Lyman
Resources of the opportunity to recover Placer Gold from a Placer Deposit (Consumptive Activity).
8.10 [***]
8.11 The terms “Commingle” or “Commingling” means the mixing or commingling, either
underground, at the surface, or at processing plants or other treatment facilities, any material containing Valuable Minerals mined or
extracted from the Property with ores or materials derived from other lands or properties.
8.12 “Anniversary Date” shall mean the date one or more years following the effective date of this
Agreement, that date being May 1, 1995.
8.13 “Payback” shall be deemed to occur on the first day of the month following the month in which
the total of all Net Cash Flow received by DCLLC [***] equals all Pre-commencement Expenses incurred by DCLLC [***].
8.14 “Pre-commencement Expenses” shall be [***].
25
8.15 “Net Cash Flow” shall equal the [***].
8.16 “Commercial Production” shall be deemed to have commenced on the first day following the date
on which the first ore is refined and poured at any facility; however, minor refining of ore products for metallurgical tests, pilot projects
and facility start-up testing shall not constitute Commercial Production.
8.17 The terms “Net Smelter Return” and “NSR” means [***].
8.18 The term “Quoted Price” shall mean [***].
26
8.19 As used in Section 5.1, the terms “Mining or Processing Operations” shall be deemed to
be carried out on a continuous basis so long as all such operations do not cease for a period of more than 180 consecutive days (except
for periods of force majeure as defined in Section 7.5).
8.20 The term “Equipment” means all buildings, structures, machinery, tools, equipment, and other
property that DCLLC erected or placed within or upon the portion or portions of the Property to which such termination applies, excepting
only track, timber, chutes and ladders in place for underground support and entry, if any.
8.21 The term “Encumbrance” means any mortgage, lien, tax levy or other encumbrance.
8.22 The term “Information relating to this Agreement” means this Agreement and the terms and conditions
hereof, and all data, reports, records and other data or information (the “Information”) relating to this Agreement, including
any data provided by Calista.
8.23 The term “Project” means a development and mining operation described in a Feasibility Study.
8.24 The term “Feasibility Study” shall mean a written report prepared by DCLLC or a third party
detailing an analysis of the economic and commercial viability of conducting operations for the production and sale of Valuable Minerals
from the Property that recommends that all or some part of the Property shall be brought into commercial production.
8.25 “Production Royalty” means the royalty payable by DCLLC to Calista on production from the
Property as described in Section 3.1(a) of this Agreement.
8.26 The term “Net Proceeds Royalty” means the net proceeds royalty payable to Calista by DCLLC
as calculated pursuant to Exhibit C attached hereto, and as further referenced in Sections 3.1(b), 3.4(c) and 3.6 of this Agreement.
ARTICLE IX
– PROCESSING OUTSIDE MINERALS ON THE PROPERTY
9.1 Outside
Minerals.
As
used herein, the term “Outside Minerals” means any and all ores, metals, minerals and materials found in, on or under
lands other than the Property.
9.2 Milling.
As used in this Article IX, the
terms “Milling” (and the related terms “Mill” or “Milled”) means crushing, milling, processing, beneficiation,
concentrating, vat leaching, treating, storing, and selling or otherwise disposing of Outside Minerals.
9.3 Milling
Outside Minerals in a Mill Located on the Property.
Calista agrees that during the term
of this Agreement DCLLC may use any mill constructed on the Property to Mill Outside Minerals and may use any road, airstrip, port, watercourse
or waterbody, or other transportation facility or means or method of transportation located on the Property to transport Outside Minerals
on or over the Property for such purpose.
27
9.4 Disposal
of Resulting Tailings and Waste Rock.
During the term of this Agreement, DCLLC
may dispose of waste or tailings resulting from the Milling of Outside Minerals in a manner consistent with the terms of this Agreement.
All such disposal of waste or tailings resulting from such Milling of Outside Minerals shall be strictly subject to the following material
requirements of this Agreement: (i) all such disposal by DCLLC shall be in the same manner and to the same extent it disposes of
waste or tailings resulting from the Milling of Valuable Minerals; (ii) all such disposal by DCLLC shall be consistent with the terms
of this Agreement, including any reclamation obligations; (iii) all such disposal by DCLLC shall be in compliance with all applicable
permits, authorizations, statutes, laws, regulations, and ordinances; and (iv) before initiating any such disposal, DCLLC shall demonstrate
to the reasonable satisfaction of Calista that there shall be, as a result of such use, no material impact on mine closure (including
tailings and waste disposal site closure), reclamation, or water quality, during or after the term of the Agreement.
9.5 Processing
Fee.
(a) DCLLC
shall pay to Calista a fee (the “Processing Fee”) of [***] for any Outside
Minerals Milled on the Property during the term of this Agreement or for so long thereafter as a mill is located on the Property and utilized
by DCLLC.
(b) Notwithstanding
the foregoing, for Outside Minerals originating on lands purchased from Calista pursuant to the terms of Section 7.19 of this Agreement,
DCLLC shall pay to Calista the [***].
(c) The
Processing Fee shall be calculated and paid at the same time and in the same manner as the Production Royalty in accordance with Section 3.4(a) of
this Agreement.
9.6 This
Provision Shall Survive Sale of the Additional Surface Lands.
DCLLC’s obligation to pay the
Processing Fee on Outside Minerals Milled on the Property shall survive any sale of the portion of the Property on which the mill is located,
including, without limitation, a sale of such portion of the Property by Calista to DCLLC pursuant to Section 7.19 of this Agreement.
* * *
Each of the undersigned hereby confirms and agrees
that this Restated Exploration and Lode Mining Lease correctly sets forth the original Exploration and Lode Mining Lease, as assigned
and amended, either by itself or its predecessors in interest, up to and including February 11, 2011 and duly adopts this Restated
Exploration and Lode Mining Lease as a complete and accurate statement of the agreement between the parties relating to the subject matter
herein.
28
CALISTA CORPORATION
DONLIN CREEK LLC
By:
By:
Title:
President + CEO
Title:
President / GM
STATE OF ALASKA:
)
) ss:
THIRD JUDICIAL DISTRICT
)
THIS IS TO CERTIFY that on this
18th day of February, 2011, before me, the undersigned, a Notary Public in and for the State of Alaska, duly
commissioned and sworn, personally appeared Andrew Guy, known to me to be the President + CEO of Calista Corporation, the
corporation that executed the foregoing instrument, and acknowledged the said instrument for the uses and purposes therein mentioned,
and on oath stated he is authorized to execute the instrument, and the seal affixed is the corporation seal of the corporation.
WITNESS my hand and official
seal hereto affixed the day and year in this certificate above written.
/s/ Angie M. Grant (SEAL)
Notary public in and for Alaska
My Commission expires: 02-06-2014
STATE OF ALASKA:
)
) ss:
THIRD JUDICIAL DISTRICT
The foregoing instrument was
acknowledged before me this 17 day of February, 2011 by Douglas C. Nicholson, the President / General Manager
of Donlin Creek LLC, a Delaware limited liability company, on behalf of the limited liability company.
/s/ Jeanne R. Luhrs (SEAL)
Notary public in and for Alaska
My Commission expires: 5-29-2012
29
EXHIBIT A
The Property
The following real property, located in the Kuskokwim
and/or Mt. McKinley Recording Districts, Seward Meridian, Alaska:
1. LANDS
FOR MINING AND MINING RELATED PURPOSES.
1Township
22 North, Range 48 West
Sections 5 & 6
2Township
22 North, Range 49 West
Sections 1, 2, 3, 10, 11
3Township
23 North, Range 48 West
Sections 5, 6, 7, 8
16, 17, 18, 19, 20, 21
28, 29, 30, 31, 32, 33
4Township
23 North, Range 49 West
Sections 1, 10, 11, 12, 13, 14, 15
21, 22, 23, 24, 25, 26, 27, 28
33, 34, 35, 36
Township 22 North, Range 48 West
Sections 4, 7, 8, 9, 17, 18, 19, 20
Township 22 North, Range 49 West
Sections 12, 13, 24
Sections 4, 5, 8, 9, 14, 15, 16, 17, 18
N ½ of Section 19, N ½ of Section 20, 21 (all except SW ¼),
Sections 22, 23
Township 23 North, Range 48 West
Sections 3, 4, 9, 10, 15, 22, 27, 34
Township 23 North, Range 50 West
South ½ of Section 33
1
Included in original Lease (05/01/95) with Placer Dome U.S. Inc.
2
Included in original Lease (05/01/95) with Placer Dome U.S. Inc.
3
Included in original Lease (05/01/95) with Placer Dome U.S. Inc.
4
Included in original Lease (05/01/95) with Placer Dome U.S. Inc.
1
2. LANDS
FOR WIND TURBINE TOWER, ACCESS, ROADWAY, MATERIAL SITE, PORT SITE, AND EQUIPMENT LAYDOWN USES.
Township 21 North, Range 50 West
15 acres within Section 5 for wind turbine towers and additional access easement, exact location to be determined after construction
with a survey
5 acres within Section 6 for wind turbine towers and additional access easement, exact location to be determined after construction
with a survey
Township 22 N, Range 50 West
10 acres within Section 35 for wind turbine towers and additional access easement, exact location to be determined after construction
with a survey
35 acres within Section 36 for wind turbine towers and additional access easement, exact location to be determined after construction
with a survey
Township 21 North, Range 48 West
400’ wide roadway of approximately 48 acres within Section 31 (Lots 1 and 2), exact location to be determined after construction
with a survey
Township 22 North, Range 49 West
400’ wide roadway of approximately 48 acres within Section 7, exact location to be determined after constriction with a survey
Township 22 North, Range 50 West
400’ wide roadway of approximately 48 acres within Section 12, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 13, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 34, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 35, exact location to be determined after construction with a survey
Township 21 North, Range 50 West
400’ wide roadway of approximately 48 acres within Section 2, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 3, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 4, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 5, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 6, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 9, exact location to be determined after construction with a survey
2
Township 19 North, Range 55 West
400’ wide roadway of approximately 48 acres within Section 31, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 30, exact location to be determined after construction with a survey
Township 18 North, Range 55 West
400’ wide roadway of approximately 48 acres within Section 6, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 7, exact location to be determined after construction with a survey
Township 18 North, Range 58 West
400’ wide roadway of approximately 48 acres within Section 25, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 26, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 32, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 33, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 34, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 35, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 36, exact location to be determined after construction with a survey
Township 17 North, Range 58 West
400’ wide roadway of approximately 48 acres within Section 5, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 6, exact location to be determined after construction with a survey
Township 22 North, Range 50 West
20 acre material site within Section 12, exact location to be determined after construction with a survey
20 acre material site within Section 13, exact location to be determined after construction with a survey
20 acre material site within Section 35, exact location to be determined after construction with a survey
Township 21 North, Range 50 West
20 acre material site within Section 2, exact location to be determined after construction with a survey
20 acre material site within Section 4, exact location to be determined after construction with a survey
20 acre material site within Section 6, exact location to be determined after construction with a survey
20 acre material site within Section 9, exact location to be determined after construction with a survey
3
Township 21 North, Range 48 West
20 acre material site within Section 31 (Lots 1 and 2), exact location to be determined after construction with a survey
Township 19 North, Range 55 West
20 acre material site within Section 30, exact location to be determined after construction with a survey
20 acre material site within Section 31, exact location to be determined after construction with a survey
Township 17 North, Range 58 West
Port site containing approximately 100 acres within Sections 5 and 6, exact location to be determined after construction with a survey
Township 21 North, Range 48 West
55 acre parcel of land for the purpose of constructing an equipment laydown area within Section 31 (Lots 1 and 2), exact location
to be determined after construction with a survey
Lands
Selected by The Kuskokwim Corporation under the Alaska Native Claims Settlement Act, but not Conveyed:
Township 18 North, Range 56 West
400’ wide roadway of approximately 48 acres within Section 11, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 12, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 13, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 14, exact location to be determined after construction with a survey
Township 18 North, Range 56 West
20 acre material site within Section 11, exact location to be determined after construction with a survey
20 acre material site within Section 12, exact location to be determined after construction with a survey
20 acre material site within Section 14, exact location to be determined after construction with a survey
Attached hereto are two maps (A-1 and A-2) showing
the boundaries of the Property.
4
1
2
EX-10.2 — EXHIBIT 10.2
EX-10.2
Filename: tm2625949d2_ex10-2.htm · Sequence: 3
Exhibit 10.2
AGREEMENT TO AMEND RESTATED
EXPLORATION AND LODE MINING LEASE
THIS AGREEMENT TO AMEND
RESTATED EXPLORATION AND LODE MINING LEASE effective June 6, 2014 (hereinafter referred to as “Agreement”),
regardless of the dates upon which it actually is executed by the parties hereto, is by and between: (a) DONLIN GOLD LLC, a Delaware
limited liability corporation whose address is 4720 Business Park Blvd., Suite G-25, Anchorage, Alaska 99503 (hereinafter referred to
as “DGLLC”); and (b) CALISTA CORPORATION, an Alaskan corporation whose address
is 301 Calista Court, Suite A, Anchorage, Alaska 99518 (hereinafter referred to as “Calista”).
RECITALS
A. Donlin
Gold LLC, formerly known as Donlin Creek LLC, and Calista are parties to an Exploration and Lode Mining Lease effective May 1, 1995,
which lease was amended and restated to reflect all assignments and amendments up to and including February 11, 2011 (hereinafter referred
to as the “Mining Lease”).
B. Pursuant
to the Mining Lease, Calista has granted to DGLLC the right to explore and mine certain surface and subsurface lands owned by Calista
in the Kuskokwim and/or Mt. McKinley Recording Districts, Seward Meridian, Alaska (hereinafter referred to collectively as the “Calista
Property”).
C. The
Kuskokwim Corporation (“TKC”) owns surface lands that overlie certain of the subsurface
lands included in the Calista Property, as well as other surface lands in the surrounding area (hereinafter referred to collectively
as the “TKC Property”).
D.
TKC and Placer Dome, U.S. Inc., DGLLC’s predecessor in interest under the Mining Lease, entered into a Surface Use Agreement,
dated effective June 5, 1995 (hereinafter referred to as the “1995 SUA”), with respect
to certain lands within the TKC Property.
E. TKC and DGLLC have negotiated terms for a Revised and Restated Surface Use Agreement (hereinafter referred to as the “New
SUA”), which would include certain additional TKC Property (hereinafter referred to collectively with the lands within the
TKC Property included in the 1995 SUA as the “Surface”).
F.
DGLLC intends to develop a mine (hereinafter referred to as the “Donlin Gold Mine”)
that will require the use of both the Calista Property and certain areas of the TKC Property.
G. Calista,
TKC and DGLLC have, as of the effective date of this Agreement, entered into a Bidder’s Preference Agreement (“Bidder’s
Preference Agreement”) that provides for the inclusion of certain parallel provisions in the Mining Lease and New SUA with
respect to Calista and TKC bidder’s preferences for work at and in support of the Donlin Creek Mine, and which includes certain
specified amendments of Section 7.2 (Confidentiality) and Section 7.7 (Bidder’s Preference) of the Mining Lease.
1
H.
DGLLC and Calista wish to enter into this Agreement to set forth their agreement regarding amendments to be made to certain additional
provisions of the Mining Lease, in order to make those provisions consistent with corresponding clauses in the New SUA, and to provide
Calista’s consent to TKC having the same access to certain specified information from DGLLC under the New SUA as Calista has received
from, or is generated by, DGLLC under the Mining Lease.
AGREEMENT
NOW, THEREFORE, for and in
consideration of the mutual promises and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Conditions Precedent for this Agreement. This Agreement is contingent upon all of the following occurring:
A. DGLLC and TKC executing the New SUA on or before June 13, 2014;
B.
DGLLC, Calista and TKC executing the Bidder’s Preference Agreement described in Recital G above on or before June 13, 2014;
and
C.
the final form of the New SUA containing provisions consistent with the Mining Lease amendments set forth in this Agreement.
If all of the above conditions are not met, this
Agreement shall terminate automatically as of June 13, 2014, and shall no longer be of any force or effect, and the parties shall have
no further obligations to one another under this Agreement.
2.
Amendments to Mining Lease. Subject to the conditions precedent in Section 1 above, the Mining Lease is hereby further
amended, effective June 6, 2014, as follows:
A. Section
5.5: (i) in the second and third sentences of the second paragraph, after the word “Property”, add the words “in which
Calista owns the surface”; and (ii) revise the sixth sentence to read: “All Equipment not removed from the Property in which
Calista owns the surface prior to the expiration of such period shall become and remain the sole property of Calista.”
B. Section
7.2: amend to read as stated in Section 3 of the June 6, 2014 Bidder’s Preference Agreement among Calista, TKC and DGLLC (“Bidder’s
Preference Agreement”).
C. Section 7.3(a): Revise the second to the last sentence to read as follows: “No assignment shall be binding unless the Assignee
has met with both parties to this Agreement and acknowledges in writing that: (i) it understands its obligations under this Agreement;
and (ii) it assumes Assignor’s rights and obligations under the Bidder’s Preference Agreement, dated effective June 6, 2014,
among Calista, TKC and Donlin Gold LLC, formerly known as DCLLC.”
D.
Section 7.6: Replace the current provision with the following:
7.6 Shareholder Hiring Preference:
DCLLC recognizes that it is in its best interests to hire local persons as employees whenever possible. Therefore, during the term
of this Agreement, DCLLC shall use all reasonable efforts to hire shareholders of Calista or members of their families (specifically including
shareholders of TKC) for positions for which they are suitably qualified or experienced and available at the time of proposed hire in
connection with DCLLC’s operations on the Property and the Surface at prevailing market wage and salary rates. To facilitate such
hiring, Calista shall designate at the beginning of each calendar year a hiring liaison office which shall assist DCLLC in identifying
and hiring qualified and available employees and to which DCLLC shall deliver on or before March 31 of each year a list of employment
positions which it anticipates it will need to fill during the coming year. Such list shall also be provided to TKC at the same time.
DCLLC shall take reasonable measures to train Calista shareholders and members of their families when DCLLC has advance knowledge of vacant
positions.
2
DCLLC also shall include in all of its
agreements with independent contractors relating to operations on the Property and the Surface a clause requiring such independent contractors
to use all reasonable efforts to hire shareholders of Calista and members of their families (specifically including shareholders of TKC)
in accordance with the provisions of this Agreement.
It is not the intention of the parties
to create any legal right whatsoever in any individual shareholder or member of their families, or to confer standing upon any shareholder
or member of their families to contest any decision made by DCLLC or Calista under this Agreement.
E.
Section 7.7: amend to read as stated in Section 2 of the Bidder’s Preference Agreement.
F. Section
7.8: Replace the current provision with the following:
7.8 Advisory
Committee.
(a) To
facilitate consultation and coordination and the common interests of the parties, DCLLC and Calista, in cooperation with TKC, will promptly
after June 6, 2014 form an Advisory Technical Review and Oversight Committee (the “Committee”).
(b) The
Committee shall be composed of six members, two designated by Calista, one designated by TKC, and three designated by DCLLC. The Committee
will meet at least quarterly. Calista, TKC, or DCLLC may request a meeting of the Committee upon (14) days advance written notice to
the other two parties. The purpose of the Committee will generally be to advise and consult and to take into consideration the common
interests of the parties on all matters concerning DCLLC’s exploration and development plans on the Property or Surface and the
results thereof, to undertake joint field visits, and to plan future operations. DCLLC shall seek Calista and TKC views on issues of
concern to each regarding DCLLC plans and operations on the Property or Surface, including but not limited to environmental protection,
reclamation, subsistence uses, impacts on communities, impacts on archeological and cultural resources, and reasonably minimizing conflict
among uses.
(c) DCLLC
shall provide Calista Committee representatives copies of such non-interpretive geological, geophysical, and geochemical data, assays,
drill data, drill core, maps, metallurgical data, surveys, feasibility studies and development plans as Calista shall reasonably deem
appropriate to ensure a mutually beneficial working relationship with respect to this Agreement and the Property. Calista agrees that
DCLLC may provide TKC Committee representatives copies of such maps, surveys, feasibility studies and development plans and other documents
as TKC shall reasonably deem appropriate to ensure a mutually beneficial working relationship with respect to the Surface Use Agreement
and the Surface, including, but not limited to, any documents reasonably appropriate for TKC to confirm the correctness and accuracy
of payments to TKC under the Surface Use Agreement.
3
(d) Notwithstanding the views of the Committee, all operational decisions with respect to technical or financial matters shall be made
at the sole discretion of DCLLC. With respect to access issues relating to the Property; relationships with other native entities (e.g.
corporations, villages, tribal groups, non-profit service providers); claim holders, and cultural issues, Calista will take the lead role
and TKC and DCLLC agree that all final decisions on such matters shall require the agreement of Calista and DCLLC; provided, however,
that [***]; and provided further, without limitation, that for such
matters with a particular relationship to the access to and use of the Surface, the provisions of Section 7.8(e) shall apply. With respect
to such access and use, Calista will consult with TKC and make a good faith effort to reach agreement with TKC regarding the exercise
of Calista’s rights. A consensus of the Committee shall determine all other issues (except for operational decisions with respect
to technical or financial matters). [***].
(e) The Committee will develop a subsistence plan for all Surface lands affected by DCLLC operations. The subsistence plan will be
developed with the objective of providing TKC’s shareholders with full access to Surface lands for subsistence uses, subject to
regulatory, safety and other operational needs of DCLLC described in the Surface Use Agreement.
(f)
The Committee shall operate in a manner to provide adequate notice of meetings, open communications among members of the Committee,
and documentation of actions taken by the Committee or DCLLC related to the Committee’s actions or discussions.
(g) The confidentiality requirements of Section 7.2 of this Agreement for Information shall apply to documents and information shared
with a Calista, TKC or DCLLC Committee member in their capacity as a Committee member.
G. Article
VIII-Definitions: Add the following Sections 8.27, 8.28, and 8.29:
8.27 The
term “TKC” means The Kuskokwim Corporation, an Alaskan corporation.
8.28 The
term “Surface” means those TKC lands included within the “Surface” as
described in the Surface Use Agreement.
8.29 The
term “Surface Use Agreement”‘ means the Revised and Restated Surface Use Agreement
between TKC and Donlin Gold LLC, formerly known as DCLLC, effective June 6, 2014, and as may be amended hereafter.
4
WHEREFORE, the parties hereto
have through their duly authorized representatives executed this Agreement to be effective as of the date first above written.
DONLIN GOLD LLC
By:
/s/ Stan Foo
Title:
President and General Manager
CALISTA CORPORATION
By:
/s/ Andrew Guy
Title:
President + CEO
5
EX-10.3 — EXHIBIT 10.3
EX-10.3
Filename: tm2625949d2_ex10-3.htm · Sequence: 4
Exhibit 10.3
REVISED AND RESTATED
SURFACE USE AGREEMENT*
effective June 6, 2014
between
THE KUSKOKWIM CORPORATION
and
DONLIN GOLD LLC
* Surface Use Agreement originally effective June
5, 1995 as revised and restated effective June 6, 2014.
TABLE OF CONTENTS
Page
SURFACE
USE AGREEMENT
1
RECITALS
1
ARTICLE I. RIGHTS GRANTED OR SERVICES
PROVIDED BY TKC
1
1.1
Surface
Access
1
1.2
Excluded, Selected,
and After Acquired Lands
2
1.3
TKC Services
3
ARTICLE II. DGLLC's OPERATIONS
3
2.1
Conduct of Operations
3
2.2
Waste Rock, Spoil
and Tailings
4
2.3
Hunting, Fishing,
or Commercial Activities other than Mining Prohibited
4
ARTICLE III. TERM. TERMINATION
4
3.1
Term
4
3.2
Termination by
DGLLC
4
3.3
Termination by
TKC
5
3.4
Access for Reclamation
5
3.5
Transfer of Equipment;
Right of First Refusal
5
3.6
Rights and Duties
Following Termination
6
ARTICLE IV. COMPENSATION
6
4.1
Surface Use Fee
6
4.2
Exclusive Use
Fee
6
4.3
Commitment to
Mine; Purchase of Portions of Surface
7
4.4
Escalator
10
4.5
Milestone Payments
10
4.6
Milled Tonnage
Fee
11
4.7
Net Proceeds Payment
11
4.8
Advance Minimum
Payments
11
4.9
Taxes
12
ARTICLE V. NOTIFICATION AND COORDINATION
12
5.1
Summary Plan of
Operations
12
5.2
Permits
12
5.3
Community Relations
13
5.4
Consultation with
TKC
13
5.5
Advisory Committee
14
5.6
Subsistence Plan
and Cooperation
16
TABLE OF CONTENTS
(continued)
Page
ARTICLE VI. ENVIRONMENTAL PROTECTION
16
6.1
Compliance with Applicable Laws and Cooperation
16
6.2
Reclamation
17
6.3
Indemnification
19
6.4
Insurance
19
6.5
Protection from Liens
19
ARTICLE VII. INSPECTION, ACCESS
20
7.1
Inspection
20
ARTICLE VIII. ANCILLARY RIGHTS
20
8.1
Shareholder Hiring Preference, Training, and Scholarships
20
8.2
Bidder’s Preference Reserved to TKC
21
8.3
Port Construction and Operations
28
ARTICLE IX. DEFAULT
31
9.1
Default
31
9.2
Consequences of Default
31
ARTICLE X. REPRESENTATION AND WARRANTIES
32
10.1
As To DGLLC
32
10.2
As To TKC
32
ARTICLE XI. GENERAL PROVISION
32
11.1
Other Business Opportunities
32
11.2
Confidentiality
32
11.3
Assignment, Designation of Sole Representative
33
11.4
Memorandum for Recording
34
11.5
Laws and Regulations; Severability; and Force Majeure
34
11.6
Notice
35
11.7
Entire Agreement
36
11.8
Title Headings
36
11.9
Further Assurances
36
11.10
Binding Effect
36
11.11
Discharge and Release of Claims Arising Prior to Effective Date
36
11.12
No Third Party Beneficiaries
36
ARTICLE XII. PROCESSING OUTSIDE MINERALS ON THE SURFACE
37
12.1
Outside Minerals
37
-ii-
TABLE OF CONTENTS
(continued)
Page
12.2
Milling
37
12.3
Milling Outside Minerals in a Mill Located on the Surface
37
12.4
Disposal of Resulting Tailings and Waste Rock
37
12.5
Milled Tonnage Fee
37
12.6
This Provision Shall Survive Sale of the Additional Surface Lands
37
12.7
No Toll Milling
37
ARTICLE XIII. DEFINITIONS
37
EXHIBIT A -- THE PROPERTY AND SURFACE
THE PROPERTY
EXHIBITS A-1 AND A-2-- PROPERTY MAPS
EXHIBIT A-3 -- THE SURFACE
EXHIBIT B – RECLAMATION AND CLOSURE PARTICIPATION
PLAN
EXHIBIT C – NET PROCEEDS
EXHIBIT D -- LIST OF PERMITS
EXHIBIT E – TEMPORARY USE FACILITIES
EXHIBIT X – CATEGORIES OF WORK
-iii-
SURFACE USE AGREEMENT
Surface Use Agreement, originally effective June
5, 1995 (the “Prior Agreement”), and as revised and restated herein as of the Effective Date of June 6, 2014 (this “Agreement”),
between The Kuskokwim Corporation, an Alaskan corporation whose address is 4300 B Street, Suite 207, Anchorage, Alaska 99503 (“TKC”)
and Donlin Gold LLC, a Delaware limited liability company, whose address is 4720 Business Park Blvd., Suite G-25, Anchorage, Alaska 99503
(“DGLLC”).*
RECITALS
A. By
Exploration and Lode Mining Lease dated May 1, 1995, and as amended and restated to reflect all assignments and amendments up to and
including February 11, 2011 and further amended as of the Effective Date (“Lease”), DGLLC, formerly known as Donlin Creek
LLC and as successor to Placer Dome U.S., Inc. (“PDUS”), entered into a mining lease agreement with Calista Corporation (“Calista”)
regarding the real property described in Section 13.19 of this Agreement (the “Property”). Under the terms of the Lease DGLLC
may explore for, develop and produce Valuable Minerals (as defined in the Lease) found on the Property.
B. TKC
owns most of the surface estate to the Property and additional surface estate which the Parties wish to include in this Agreement.
C. The
Parties wish to revise and restate the Prior Agreement on the terms and conditions set forth below:
NOW THEREFORE it is agreed:
Article I.
RIGHTS GRANTED OR SERVICES PROVIDED BY TKC.
1.1 Surface
Access.
(a)
Subject to the terms and conditions herein set forth, TKC hereby grants to DGLLC non-exclusive and, with respect to areas so designated
under the terms and conditions herein, exclusive surface access to the surface estate to that portion of the Property and additional
surface estate described in Section 13.20 of this Agreement (the “Surface”) for the purposes of exploring for, developing,
mining, treating, shipping, and otherwise exploiting and disposing of any and all Valuable Minerals found in, on or under the Surface
or the Property pursuant to the rights granted DGLLC under the Lease.
* The Prior Agreement effective June 5, 1995 was entered into between
TKC and Placer Dome U.S. Inc. (“PDUS”). TKC and DGLLC are at times referred to herein individually as “Party”
or collectively as “Parties.” The Parties herein agree and confirm that all rights and obligations of PDUS under the Prior
Agreement and this Agreement have been assigned to DGLLC with the consent of TKC.
1
(b)
Without limiting the generality of the foregoing grant, and subject to the terms and conditions herein, TKC agrees DGLLC may conduct
the following activities on the Surface:
(i) to
enter upon the Surface for purposes of surveying, exploring for, prospecting for, sampling, drilling, developing, mining (whether by
underground, strip, open pit, solution mining or other methods), stockpiling, removing, shipping, transporting, processing, marketing
or otherwise disposing of either Valuable Minerals or mineral-bearing ores and materials mined or extracted and removed from the Property;
(ii) to
construct, use, maintain, repair, replace and relocate buildings, roads, tunnels, railroad corridors and loadout facilities, port facilities,
ore conveyors, leach pads, leachate collection systems, tailing ponds, waste dumps, ditches, pipelines, power and communication lines,
structures, mills, processing facilities, utilities and other improvements and facilities reasonably required by DGLLC for the full enjoyment
of the Surface for the purposes set forth in Section 1.1(b)(i) above and otherwise set forth in this Agreement;
(iii) to
use so much of the Surface and the subsurface thereof (to the extent TKC may lawfully convey this right and subject to Section 5.4 below)
as DGLLC may consider necessary, convenient or suitable (all of which consistent with responsible mining practices) for any such purposes,
including, without limitation, the storage, stockpiling and/or permanent disposal of ore, broken rock, mine or other development, production
or other operations for the purposes set forth in Section 1.1(b)(i) above and otherwise set forth in or contemplated by this Agreement;
(iv) to
use, destroy, or cave so much of the Surface and subsurface of the Surface (to the extent TKC may lawfully convey this right and subject
to Section 5.4 below) as may be reasonably necessary, convenient, suitable (all of which consistent with responsible mining practices)
for or incidental to any of the rights and privileges of DGLLC hereunder or otherwise reasonably necessary or convenient for the purposes
set forth in this Agreement;
(v) to
use all reserved or granted easements and rights-of-way to which TKC may be entitled for ingress and egress to and from the Surface;
(vi) to
appropriate and use, consistent with applicable laws of Alaska and to the extent TKC may lawfully do so, and subject to TKC’s right
to do the same, any surface and underground water or water rights now existing or subsequently discovered or developed on or appurtenant
to the Surface;
(vii) to
exercise all other rights which are incidental to any or all of the rights specified, mentioned, or referred to herein. The rights granted
to DGLLC in this Agreement may be exercised by DGLLC in connection with the mineral rights in and to the Property acquired by DGLLC under
the Lease.
1.2 Excluded,
Selected, and After Acquired Lands.
(a)
The Surface excludes all lands which TKC has conveyed to third parties pursuant to the provisions of Section 14(c) of ANCSA, 43
U.S.C. § 1615(c).
(b)
If Exhibit A-3 to this Agreement is amended in the future in accordance with this Agreement, the lands listed therein may include
lands the surface estate to which have been selected by TKC, but not yet conveyed to TKC, pursuant to ANCSA (the “Selected Lands”).
The Selected Lands are among those lands subject to the terms of Section 1.2(e). If so included and when conveyed to TKC, such Selected
Lands shall become Surface subject to the terms of this Agreement.
2
(c)
The United States Bureau of Land Management (“BLM”) presently holds interim management authority over such Selected
Lands pursuant to ANCSA pending their conveyance to TKC. TKC has no authority to authorize DGLLC to enter upon or use such lands pending
their conveyance to TKC. If and when such Selected Lands are included in Exhibit A-3 to this Agreement, TKC agrees to submit a written
consent to the use of any Selected Lands required by DGLLC which is consistent with the uses described in this Agreement and support
any request by DGLLC to the BLM to authorize DGLLC to enter upon and use such lands prior to their conveyance to TKC, or to make such
request itself. To the extent it has the power to do so, TKC hereby agrees to include Selected Lands in this Agreement upon their inclusion
in Exhibit A-3 and authorizes DGLLC to occupy and use such included lands upon conveyance to TKC pursuant to this Agreement.
(d)
TKC disclaims any warranty or representation that such Selected Lands will eventually be conveyed to TKC.
(e)
This Agreement applies and extends to any further or additional right, title, interest or estate heretofore or hereafter acquired
by TKC in or to the Surface or other surface estate overlying or included in the Property, or any part thereof.
1.3 TKC
Services.
(a)
Although DGLLC does not believe any additional consent is necessary to exercise its rights under this Agreement, TKC will assist
DGLLC in attempting to obtain such consent of the Native village of Crooked Creek, Alaska as may be required as to DGLLC’s operations
hereunder pursuant to Sections 14(f) or 26(e) of ANCSA, 43 U.S.C. §§ 1615(f) or 1627(e).
(b)
Portions of the Surface may be subject to claims, interests, or rights under Sections 14(c) or (g) of ANCSA, 43 U.S.C. §§
1615(c) or (g). Within thirty (30) days of the Effective Date, TKC will provide DGLLC with a listing of all individuals or other entities
who have notified TKC of their claim to an interest or right in the Surface under Sections 14(c) or (g) of ANCSA. TKC will provide DGLLC
with notice of such additional claims to the Surface within thirty (30) days of their receipt by TKC. TKC will advise DGLLC within thirty
(30) days of TKC’s resolution of any such claim.
Article
II. DGLLC’s OPERATIONS.
2.1 Conduct
of Operations. DGLLC shall have exclusive control of all operations on or for the benefit to the Property, and of any and all equipment,
supplies, machinery, and other assets purchased or otherwise acquired or under its control in connection with such operations. Except
as otherwise provided in this Agreement, DGLLC may carry out such operations on the Property, including the Surface, as it may, in its
sole discretion, determine to be warranted. All of the work which may be performed by DGLLC hereunder shall be performed in a good and
workmanlike manner and in accordance with sound mining and engineering practices, subject to Sections 6.1 and 6.2 below, but the timing,
nature, manner and extent of any exploration, development, mining or processing operation shall be within the sole discretion of DGLLC,
and there shall be no implied covenant to begin any such operation.
3
2.2 Waste
Rock, Spoil and Tailings.
(a)
The ore, mine waters, leachates, pregnant liquors, pregnant slurries and other products or compounds of metals or minerals mined
from the Surface or Property shall be the property of DGLLC. DGLLC shall not be liable for Valuable Minerals or other materials lost
in mining or processing if such mining or processing is consistent with sound mining and metallurgical engineering practices. The Net
Proceeds Payment provided for in Section 4.7 shall be payable only on Valuable Minerals recovered prior to the time waste rock, spoil,
tailings, or other mine waste and residue are first disposed of as such, and such waste and residue shall be the sole property of DGLLC
during the Term of this Agreement, subject to any Net Proceeds Payment as provided in Sections 4.3 and 4.7.
(b)
During the Term, and except as provided in Section 5.4, DGLLC shall have the sole right to dump, deposit, sell, dispose of, or
reprocess such waste rock, spoil, tailings, or other mine waste and residues. TKC shall be entitled to the Milled Tonnage Fee only for
material (excluding tailings) that has not previously been milled on or beneath the Surface.
(c)
TKC may at its option elect to have DGLLC release and quitclaim to TKC any and all DGLLC claim of title or other property interest
in all waste rock, spoil, tailings or other mine waste and residues left on the Surface after this Agreement is terminated. TKC shall
exercise its election by delivery of written notice to DGLLC. TKC’s election and such release and quitclaim shall be subject to
Calista’s advance written consent and to Section 4.3 and DGLLC’s needs to retain ownership and control of portions of the
Surface to meet continuing reclamation, closure, maintenance, monitoring, or other regulatory requirements.
2.3 Hunting,
Fishing, or Commercial Activities other than Mining Prohibited. No hunting or fishing use, or commercial use other than the mining-related
uses and activities described in Article I are authorized by this Agreement. DGLLC, its employees, contractors, and subcontractors shall
not engage in hunting, fishing, or such other commercial activities on any portion of the Surface, except as separately and specifically
authorized in writing by TKC in its sole discretion, and subject to DGLLC restrictions for safety, regulatory, liability, and other DGLLC
operational needs.
Article
III. TERM. TERMINATION.
3.1 Term.
The term of this Agreement (“Term”) shall remain in effect until April 30, 2031 and shall continue on a year-to-year basis
thereafter, so long as the Lease remains in effect. This Agreement will automatically terminate upon termination of the Lease.
3.2 Termination
by DGLLC. DGLLC may terminate this Agreement at any time upon giving TKC thirty (30) days advance written notice. In the event DGLLC
terminates this Agreement, and subject to any payments accrued and remaining due TKC pursuant to Article IV, and subject to DGLLC’s
duty to undertake reclamation under Section 6.2, or any other obligation of DGLLC which has accrued prior to termination, DGLLC will
not be required to perform any additional obligation under this Agreement.
4
3.3 Termination
by TKC. Should DGLLC be in default of any of its material obligations under this Agreement, as determined by and subject to Article
IX, then TKC may, at its election, terminate this Agreement by giving notice of such intention to DGLLC, and, upon DGLLC’s receipt
of such notice, this Agreement shall be conclusively deemed terminated provided however that such termination shall be without prejudice
to any other remedies TKC may have.
3.4 Access
for Reclamation. DGLLC shall reclaim the Surface to the Property disturbed by DGLLC in accordance with Section 6.2. Upon the expiration
or sooner termination of this Agreement, DGLLC shall have, for a period of three (3) years after such expiration or termination or so
long thereafter as may be required by any governmental authority, the cost-free, non-exclusive right of ingress and egress to and from
and across the Surface for the purpose of reclaiming any disturbance of the Surface or Property and other lands in the vicinity of the
Surface caused by DGLLC’s operations on the Property, as well as such ingress and egress for any continuing maintenance, monitoring,
or other regulatory requirements under Sections 3.5, 3.6, and 4.3(e).
Notwithstanding any provision of this Agreement
to the contrary, DGLLC assumes no responsibility or obligation to reclaim or otherwise cure disturbances to the Property or Surface made
before June 5, 1995; provided, however, that DGLLC agrees to be responsible for antecedent disturbances to the extent such disturbed
lands are redisturbed by DGLLC during its operations hereunder.
3.5 Transfer
of Equipment; Right of First Refusal.
(a)
At the conclusion of mining operations on the Surface and after reclamation and removal of operations thereon, and subject to
DGLLC’s rights under Section 3.6 to remove Equipment and needs to retain ownership and control of Equipment upon the Surface to
meet continuing maintenance, monitoring or other regulatory requirements, DGLLC shall provide TKC a right of first refusal for DGLLC
to transfer to TKC title to any of DGLLC’s Equipment remaining on the Surface. Subject to DGLLC’s needs to retain ownership
and control of portions of the Surface to meet continuing maintenance, monitoring, or other regulatory requirements, the TKC right of
first refusal regarding such Equipment shall take precedence over any TKC right or obligation to transfer title to portions of the Surface
to DGLLC under this Agreement. TKC in its sole discretion may elect to retain title to any such portion of the Surface concurrent with
exercising its right of first refusal herein regarding Equipment occupying such portion of the Surface, as well as to obtain reconveyance
to TKC by DGLLC of title to any such portion of the Surface to which DGLLC holds title at the time of TKC’s election herein.
(b)
DGLLC shall, within sixty (60) days after determining that it has concluded mining operations on the Surface and completed reclamation
and removal of operations thereon, deliver written notice to TKC of the same, together with a list of Equipment remaining on the Surface
that DGLLC has determined to offer to transfer title to TKC in accordance with paragraph (a) above. TKC shall have sixty (60) days after
receiving such notice to deliver to DGLLC a written list of any Equipment on the DGLLC list to which TKC elects to accept title, together
with TKC’s written notice of election to retain or obtain reconveyance by DGLLC of title to any portion or portions of the Surface
occupied by such Equipment to which TKC elects to accept title in accordance with paragraph (a). Within thirty (30) days after receiving
such notice from TKC, DGLLC shall deliver to TKC an appropriate written instrument or instruments transferring title to the Equipment
on the TKC list and any portion of the Surface identified by TKC in its accompanying notice of election, exclusive of any portion or
portions of the Surface over which DGLLC determines that it needs to retain ownership and control to meet continuing maintenance, monitoring
or other regulatory requirements. DGLLC shall not charge TKC any additional payment for such transfer of title, and TKC and DGLLC shall
otherwise each bear its own costs of such transfer.
5
(c)
If TKC does not within the sixty (60) day period described in paragraph (b) above deliver to DGLLC written notice of its election
to accept title to Equipment appearing on the list delivered to TKC by DGLLC in accordance with paragraph (b) above, then DGLLC shall
have no further obligation to TKC regarding that Equipment under this Section 3.5. Likewise, if TKC does not deliver to DGLLC written
notice of its election to retain or obtain reconveyance by DGLLC of title to any portion of the Surface occupied by Equipment on the
list delivered to TKC by DGLLC in accordance with paragraph (b) above, then DGLLC shall have no further obligation to TKC regarding that
portion of the Surface under this Section 3.5.
3.6 Rights
and Duties Following Termination. In the event of termination of this Agreement, DGLLC agrees, subject to Sections 3.4 and 3.5, to
surrender quietly and peaceably the Surface. For a period of one (1) year after the effective date of termination, DGLLC shall have the
right to remove its Equipment erected or placed within or upon the portion or portions to the Property or Surface to which such termination
applies. The Parties expressly agree that a default by DGLLC under this Agreement shall not result in a forfeiture of the Equipment to
TKC. If DGLLC is delayed by snow drifts, washouts, unusually inclement weather, or other climatic condition from completing removal of
the Equipment within such one (1) year period, then the time shall be extended by a reasonable period as required by DGLLC.
Article
IV. COMPENSATION.
4.1 Surface
Use Fee. After the Effective Date, on or before June 5 each year during the Term, DGLLC shall pay to TKC an annual Surface Use Fee.
The amount of the Surface Use Fee paid annually shall be [***] per acre of Surface included in this Agreement as of the immediately
preceding May 5, except for portions of the Surface and portions of the year for which the Exclusive Use Fee is paid as described in
Section 4.2, and adjusted and pro-rated accordingly each subsequent year for any acres added to or subtracted from the Surface included
in this Agreement during the twelve months following said May 5 date. An updated reconciliation incorporating said pro-rata adjustment
through the most recent May 5 date shall be completed each year on or before June 5, and the adjusted payment added to or subtracted
from the Surface Use Fee payment next due.
4.2 Exclusive
Use Fee.
(a)
At DGLLC’s option, and at any time after the Effective Date during the Term, DGLLC may periodically designate that portion
of the Surface for which it desires the exclusive use (such designated portion hereinafter “Exclusive Use Area”) for the
purposes designated in Article I. DGLLC shall provide written notice of such designations, and such designations shall become effective
ninety (90) days after delivery of the written notice to TKC. In its written notice, DGLLC may remove some or all of the portion of the
Surface that it has previously designated as included in the Exclusive Use Area from that designation, and such removal shall likewise
be effective for all purposes of this Agreement ninety (90) days after delivery of the written notice to TKC. Portions of the Surface
on which DGLLC is constructing or otherwise placing or has constructed or otherwise placed any Equipment, or has identified as a mine
or related infrastructure site pursuant to Section 4.3(b) will be presumptively deemed to be so designated. DGLLC shall pay an Exclusive
Use Fee as described in Section 4.2(b) for each acre so designated. Once TKC has received written notice that a portion of the Surface
is designated as included in the Exclusive Use Area, TKC will not lease or otherwise authorize an entry by any third party for all lands
so designated during the time period for which the designation is effective.
6
(b)
After the Effective Date, DGLLC on or before June 5 each year during the Term shall pay to TKC an annual Exclusive Use Fee. The
amount of the Exclusive Use Fee paid annually shall be [***] per acre for the portion of the Surface effective as Exclusive
Use Area as of the immediately preceding May 5. The Parties agree and confirm that no portion of the Surface was effective as Exclusive
Use Area prior to the Effective Date. The Exclusive Use Fee shall be in lieu of and not in addition to the Surface Use Fee for the portion
of the Surface effective as Exclusive Use Area for the time period that the Exclusive Use Area designation is effective. For portions
of the Surface effective as Exclusive Use Area for a portion of a year beginning May 5, the Exclusive Use Fee and Surface Use Fee for
that year shall be pro-rated accordingly, and the pro-rata adjusted payment incorporated in the yearly reconciliation completed under
Section 4.1.
(c)
DGLLC shall fairly compensate the owner of any improvement damaged by DGLLC which improvement was located upon such Exclusive
Use Area prior to its designation by DGLLC.
4.3 Commitment
to Mine; Purchase of Portions of Surface.
(a)
In the event DGLLC elects to commence mining operations on the Property pursuant to a final Feasibility Study or other DGLLC written
notice provided to TKC, TKC may at its option elect to have DGLLC purchase that portion of the Surface encompassed within the mine and
related infrastructure site identified in Section 4.3(b) in lieu of an Exclusive Use Fee under Section 4.2 for the Exclusive Use Area
so identified.
(b)
DGLLC shall use its best efforts to identify, in consultation with TKC, those portions of the Surface (A) on which Hazardous Substances
or mining or other wastes containing Hazardous Substances will be stored or disposed of; or (B) on which there is a substantial possibility
of a release of Hazardous Substances; or (C) on which a release of Hazardous Substances has occurred, and (D) any additional portions
that DGLLC reasonably determines will require permanent disturbance for mining operations or retention of DGLLC ownership and control
after the termination of this Agreement to meet reclamation, continuing maintenance and monitoring, or other regulatory requirements
(individually and collectively “Affected Surface”). Such Affected Surface shall include, without limitation, any tailings
impoundment and associated Surface lands including those underlying any watercourse or overlying any aquifer draining such tailings impoundment,
any lands on which a mill site or beneficiation facility is located and associated lands, and, if appropriate given its chemical characteristics,
any waste rock or overburden dump or storage area, and the Surface lands on which any Hazardous Substance is stored, and the portion
of the Surface on which any release of Hazardous Substances has occurred. Such Affected Surface shall be identified prior to the time
that the use of Hazardous Substances on the Surface is initiated, preferably at the time that a Feasibility Study or development plan
is provided to TKC, and at any time thereafter when appropriate, including when a release of Hazardous Substances has occurred. Without
first obtaining the advance written consent of TKC, DGLLC shall not identify or propose facilities or operations under this Agreement
that would require it to identify as Affected Surface any portion of the Surface within a five (5) mile (5,280 feet per mile, measured
horizontally) radius of the junction of the Kuskokwim River with the Crooked Creek tributary stream. This paragraph (b) shall not be
interpreted or applied to require additional written consent from TKC for the construction or operation of the Jungjuk Port and Port
Road facilities described in Section 8.3, or the temporary use facilities described in Exhibit E, to which TKC has consented as described
therein.
7
(c)
TKC may reserve to itself any Net Proceeds Payments otherwise payable to TKC under this Agreement on such Affected Surface, including
on Valuable Minerals placed on such Affected Surface in any form, including as tailings or waste rock subsequently processed by DGLLC,
but shall not receive any further Surface Use Fee or Exclusive Use Fee for a portion of the Surface once DGLLC pays to TKC the Fair Market
Value of that portion as described in Section 4.3(f).
(d)
The Parties agree that at the time of conveyance by TKC to DGLLC all such Affected Surface is in its natural state, uncontaminated
by any release of Hazardous Substances by any person or entity other than DGLLC, except where DGLLC has prior to such conveyance provided
to TKC information conclusively establishing otherwise by environmental studies, including without limitation, soil borings, water samples,
and other evidence sufficient to reasonably establish the nature of and extent to which Hazardous Substances are present.
(e)
“Put” to DGLLC at Option of TKC.
(i) At
its sole option, within sixty (60) days of receipt of notice of land identification pursuant to Section 4.3(b), TKC may tender to DGLLC
for its purchase pursuant to the terms of this Section 4.3, by way of delivery of quitclaim deed(s), the title it possesses of any portion
of the Affected Surface identified pursuant to the procedures set forth in Section 4.3(b) that it wishes to convey, and DGLLC shall accept
such tender. TKC shall exercise its sole option to tender to DGLLC for its purchase hereunder those portions of the Surface over which
DGLLC reasonably determines that it needs to retain ownership and control after the termination of this Agreement to meet reclamation,
continuing maintenance, monitoring or other regulatory requirements. Upon acceptance of the tender, such Affected Surface ceases to be
part of the Surface for purposes of this Agreement (except as to payments retained in the Affected Surface as described in Section 4.3(c)).
DGLLC shall defend, indemnify, and hold harmless TKC from and against any and all claims and liabilities which arise out of or result
in any way from activities conducted on such Affected Surface after the date of transfer of such Affected Surface to DGLLC, except for
conditions in existence on the Affected Surface prior to such transfer.
8
(ii) Each
quitclaim deed shall contain a clause requiring DGLLC to grant TKC a right of first refusal on any further resale or other conveyance
of the portion of the Surface described as property conveyed by the deed. If at any time DGLLC determines that it wishes to resell or
otherwise convey such portion of the Surface to a party other than TKC and receives a bona-fide offer to purchase or accept conveyance
of same (“Offer”), DGLLC shall deliver to TKC a copy of the Offer together with a written notice (“ROFR Offering Notice”),
which notice shall state that DGLLC intends to resell or convey that portion of the Surface upon the terms set forth in the Offer. Within
sixty (60) days after TKC receives the ROFR Offering Notice, TKC shall deliver to DGLLC written notice of its intent to exercise its
right of first refusal (the “Exercise Notice”). If TKC delivers the Exercise Notice within that sixty (60) day period, then
DGLLC and TKC shall enter into a written conveyance agreement and DGLLC shall convey that portion of the Surface to TKC upon the terms
and conditions set forth in the Offer, within sixty (60) days following DGLLC’s receipt of the Exercise Notice. If TKC does not
deliver the Exercise Notice to DGLLC within the sixty (60) day period prescribed above for same, then DGLLC shall conclusively be deemed
to have satisfied its obligations with respect to TKC’s right of first refusal with respect to that particular Offer and DGLLC
shall be free to resell or convey that portion of the Surface to the party making that Offer. If DGLLC and such party fail to consummate
a resale or other conveyance of that portion of the Surface and if, in the future, another Offer is received by DGLLC, TKC shall again
have the right of first refusal with respect to such Offer in accordance with the terms of this paragraph (ii).
(iii) Each
quitclaim deed shall also contain a clause incorporating the rights and obligations described in Section 4.3(g).
(f)
Price. The purchase price to be paid by DGLLC for any Affected Surface tendered to it pursuant to the provisions of Section
4.3(e) by TKC shall be the fair market value of the Affected Surface (taking into account the contaminated nature of the Affected Surface
at the time of conveyance where applicable) to be determined as follows (“Fair Market Value”): TKC and DGLLC shall jointly
acquire and share equally in the cost for an appraisal of the Affected Property to be conveyed by TKC from an MAI certified appraiser.
The appraisal shall finally determine the appraised value of the portion of the Affected Property to be conveyed unless, within thirty
(30) days of its receipt of the appraisal, a party gives notice to the other party that it disagrees with the appraised value stated
in the initial appraisal. The party giving notice of its disagreement shall then obtain a second appraisal, at its own expense, within
one hundred twenty (120) days of giving such notice to the other party. Failure of TKC and DGLLC to agree on an appraised value after
review by each of the two appraisals shall result in the two appraisers selecting a third appraiser who shall conduct a third appraisal.
The appraised value established by the third appraiser shall be binding on both TKC and DGLLC. The cost of the third appraisal shall
be shared equally by both Parties. In determining the value of such Affected Surface, the appraisal shall not consider the value of any
improvements located upon it or its intended use under this Agreement.
(g)
Tender of Title by DGLLC. At the conclusion of mining operations on the Surface and after reclamation and removal of operations
on the Affected Surface (and subject to DGLLC’s right to remove Equipment and to retain ownership and control of portions of the
Surface described in Sections 3.5, 3.6 and 4.3(e)), upon request of TKC, DGLLC shall tender to TKC, for its purchase at the Fair Market
Value of the Affected Surface at the time of such tender, determined by appraisal in the manner set forth in Section 4.3(f), all the
title to any Affected Surface it has purchased pursuant to this Section 4.3. TKC may accept none, all, or any portion of such tender
in its sole discretion. Such tender shall be accepted, if at all, within one year. TKC shall defend, indemnify, and hold harmless DGLLC
from and against any and all claims or liabilities which arise out of or result in any way from activities conducted on such Affected
Surface after the date of transfer of such Affected Surface back to TKC, except for conditions in existence on the Affected Surface prior
to such transfer.
9
(h)
Definitions.
(i) As
used in this Section 4.3, the term “Hazardous Substances” means any hazardous waste or hazardous substance as defined or
pursuant to any Environmental Law.
(ii) As
used in this Section 4.3, the term “Environmental Laws” means any and all applicable federal, state, or local laws, statutes,
ordinances, rules, regulations, permits, approvals, authorizations, variances, codes, standards, guidelines, decisions, decrees, rulings,
orders, notices, binding agreements, or other requirements of any governmental authority, relating to or imposing liability or standards
of conduct concerning any Hazardous Substances or the manufacture, management, transportation, storage, use, disposal, release, or threatened
release of any Hazardous Substances; preservation, protection, or remediation, of the environment; or the environmental conditions on,
under, or about the Surface. “Environmental Law” includes but is not limited to the Clean Water Act (also known as the Federal
Water Pollution Control Act), 33 U.S.C. § 1251 et seq., the Clean Air Act, 42 U.S.C. § 7401 et seq., the Federal
Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. § 136 et seq., the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (“CERCLA”), 42 U.S.C. § 6901 et seq., the Superfund Amendments and Reauthorization
Act of 1986, Pub. L. 99-499, 100 Stat. 1613, the Emergency Planning and Community Right To Know Act, 42 U.S.C. § 11001 et seq.,
the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6901 et seq., the Occupational Safety and
Health Act, 29 U.S.C. §§ 656 and 657, AS 27.19, AS 46, and rules, regulations, codes, standards, or guidelines promulgated
pursuant to such laws, as such laws, statutes, ordinances, rules, regulations, codes, standards, and guidelines are amended from time
to time.
4.4
Escalator. The amount of the fees payable under Sections 4.1 and 4.2 shall be adjusted on June 5 (the “Adjustment
Date”) each year, commencing with June 5, 2015, for any increase or decrease in the Consumer Price Index for Urban Wage Earners
and Clerical Workers published by the United States Department of Labor, Bureau of Labor Statistics, entitled “All Items”
and applicable to Anchorage, Alaska (the “Index”), using 2014 as the base year for all adjustments. If the Index is discontinued
or revised during the Term, such other government Index or computation with which it is replaced shall be used in order to obtain substantially
the same result as would have been obtained if the Index had not been discontinued or revised.
4.5 Milestone
Payments. DGLLC shall make the following payments to TKC:
(a)
The sum of [***] upon execution by TKC of this Revised and Restated Agreement. [***] of this payment shall be an Advanced
Minimum Payment that shall be recovered as a credit against the Milled Tonnage Fee and Net Proceeds Payment as provided in Section 4.8.
10
(b)
[***] upon receipt by DGLLC of all government permits and other authorizations required for construction for Project Commercial
Production operations to proceed, including the final conclusion of any administrative or court challenge that seeks to enjoin, invalidate,
or delay the effectiveness of any of said government authorizations, such that the authorization becomes or remains effective upon such
conclusion.
(c)
[***] upon DGLLC’s written notice to TKC of DGLLC’s determination to proceed with construction for Project Commercial
Production, which notice and payment shall be delivered to TKC within thirty (30) days after such determination.
4.6 Milled
Tonnage Fee. DGLLC shall pay to TKC, within thirty (30) days after the end of each calendar quarter, a Milled Tonnage Fee for ore
milled on or beneath the Surface during the prior calendar quarter of Project Commercial Production during the Term. For each of the
first forty (40) such calendar quarters, the Milled Tonnage Fee shall be equal to forty cents ($0.40) per metric ton of ore milled, and
equal to fifty cents ($0.50) per metric ton of ore milled for the forty-first (41st) and each such subsequent calendar quarter. For purposes
of this Section 4.6, ore shall be deemed “milled” and tonnage measured as dry tons at the point that crushed ore initially
enters the semi-autogenous grinding (“SAG”) mill or equivalent mill facility circuit described in the final Feasibility Study.
4.7 Net
Proceeds Payment. DGLLC shall pay to TKC, within thirty (30) days after the end of each calendar quarter, a Net Proceeds Payment
equal to three percent (3%) of the Net Proceeds realized by DGLLC during each prior calendar quarter during the Term as calculated in
accordance with Exhibit C to this Agreement.
4.8 Advance
Minimum Payments. During the Term, unless DGLLC shall terminate this Agreement on or before any given Anniversary Date of this Agreement,
DGLLC shall pay to TKC an Advance Minimum Payment (“AMP”) according to the following schedule:
After the Effective Date, on or before June 5 thereafter:
Each year, until the date that DGLLC delivers written notice
to TKC of DGLLC’s determination to proceed with construction for Project Commercial Production:
[***]
Following the date of delivery of said notice and each subsequent
year until the date that DGLLC commences Commercial Production:
[***]
Following the date of commencement of Commercial Production
and each subsequent year:
[***]
Each year following June 5, 2031 during which mining or
processing operations are not carried out on or with respect to the Property in good faith on a continuous basis:
[***]
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Mining or processing operations shall be deemed
to be carried out on a continuous basis so long as all such operations do not cease for a period of more than 180 consecutive days (except
for periods of force majeure as defined in Section 11.5).
All sums paid to TKC as AMP shall be recoverable
as a credit against the Milled Tonnage Fee and Net Proceeds Payment payable under Sections 4.6 and 4.7 by withholding from the Milled
Tonnage Fee and Net Proceeds Payments as the same become due and payable until such time as by such withholding as all sums paid as AMP
are recovered, provided however that TKC shall receive in cash in each year an amount at least equal to the AMP applicable to that year
in accordance with the foregoing schedule.
4.9 Taxes.
DGLLC shall pay all ad valorem real property taxes levied or assessed upon or against the Surface attributable to its interest therein.
DGLLC shall specifically not be responsible for any income taxes and taxes imposed upon TKC by reason of receipt of any payments hereunder.
DGLLC will directly pay any taxes levied or assessed upon or against any Equipment or other improvement located upon the Surface by or
at the direction of DGLLC.
Article
V. NOTIFICATION AND COORDINATION.
5.1
Summary Plan of Operations. On or before June 1 of each year during the Term, DGLLC shall provide TKC with a written summary
of DGLLC’s planned operations for the coming field season. The summary shall designate, to the extent practicable that portion
of the Surface likely to be affected. When DGLLC intends to conduct operations in an area not included in a prior summary plan, it will
advise TKC of its tentative plans for such area on or before February 1.
5.2 Permits.
(a)
TKC hereby grants DGLLC the right and authority to apply, in DGLLC’s name, for all necessary Project permits, licenses and
other approvals from the United States of America, State of Alaska, or local governments (collectively, “Permits” and individually,
“Permit”, for purposes of this Article V) and TKC agrees to support and cooperate fully with DGLLC in any such efforts. Attached
as Exhibit D is a list of all Permits for which DGLLC plans, as of the date of its execution of this Agreement, to apply and the approximate
dates upon which DGLLC anticipates such applications shall be made. TKC acknowledges that Exhibit D represents DGLLC’s best efforts
to describe the Permits and the timing of such applications, but does not constitute a representation or warranty by DGLLC regarding
same.
(b)
Within forty-five (45) days before the end of each calendar quarter, DGLLC shall provide the President of TKC, or the President’s
designee, with an advance list of all Permit applications and supporting reports (including but not limited to environmental studies
and technical data) that DGLLC plans to submit during the following calendar quarter to government agencies for operations that may have
an impact on the Surface, and identify in the list any change in DGLLC operations that would require a major Permit modification or otherwise
be likely to significantly alter the environmental impacts of the Project on TKC lands. DGLLC shall provide TKC an advance copy of any
Permit documents included in the list that TKC specifically requests from DGLLC within fifteen (15) days after TKC receives the list.
DGLLC shall provide TKC thirty (30) days to review and comment to DGLLC upon any documents so provided, prior to finalizing and filing
the document with a government agency, except where government agency requirements or emergency necessitate a shorter advance review
time, in which case DGLLC shall provide TKC an amount of time, if any, for advance review and comment upon the document that is reasonably
practicable under the circumstances. Copies of the versions of such documents filed with a government agency shall be provided to TKC
at the time of filing. Copies of Permits shall be provided to TKC upon their receipt by DGLLC.
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(c)
Without limiting the provisions of Section 5.2(b), and in the event that DGLLC has not already at least thirty-five (35) days
prior to the Effective Date provided TKC with a copy of its air quality permit application (“PSD Application”), DGLLC shall
provide TKC a copy of the same at least thirty-five (35) days prior to filing with any government agency. DGLLC shall also provide TKC
a copy of the access and control plan (A & C Plan) that DGLLC proposes to include as part of its initial or subsequent PSD Application
documents at least thirty-five (35) days prior to filing the same with any government agency. TKC shall have thirty (30) days after receipt
of the PSD Application and A & C Plan, respectively, to review each and provide DGLLC with comments regarding the TKC subsistence
plan that is developed pursuant to Section 5.6(a). DGLLC shall provide TKC with at least twenty (20) days advance notice of, and an opportunity
for TKC representatives to participate in, any meeting or conference call that DGLLC intends to conduct with any representative or representatives
of any government agency, when such meeting or call will include discussion of the PSD Application and A & C Plan. Provided, where
government agency requirements or emergency necessitate a shorter time or preclude an opportunity for TKC to participate, DGLLC shall,
respectively, inform TKC at the earliest time that is reasonably practicable under the circumstances, and reasonably inform TKC regarding
the discussion during the meeting or call as soon as reasonably practicable after the meeting or call.
(d)
The confidentiality requirements of Section 11.2 of this Agreement for Information shall apply to the list and advance copies
of documents provided to TKC under this Section 5.2. Section 6.2 rather than this Section 5.2 shall apply to the Project reclamation
and closure plan (“RCP”).
5.3 Community
Relations. At the request of TKC, DGLLC will meet at least annually in a joint meeting with the Native village of Crooked Creek.
5.4 Consultation
with TKC. The Parties acknowledge that TKC is now utilizing and will continue to utilize the Surface (except that portion designated
as an Exclusive Use Area or for which DGLLC pays an Exclusive Use Fee) for purposes unrelated to the rights granted by this Agreement
to DGLLC. The Parties intend to coordinate their various uses of the Surface in a manner so as to avoid and minimize possible conflicts.
(a) To
this end, each Party shall keep the other informed as to their intended uses of the Surface. DGLLC agrees that in conducting its operations
on the Surface, it will, in good faith, attempt to minimize the amount of Surface utilized by using only such Surface as is reasonably
necessary or convenient (consistent with responsible mining practices) to facilitate the development to the Property.
13
(b) DGLLC
further agrees that prior to any construction of improvements or in exercising its right of access hereunder it will, in good faith,
attempt to accommodate any concerns expressed by TKC as to the location of such improvements, or modes and location of such access routes,
including, but not limited to, the avoidance of the disturbance or destruction of any existing improvements. Stockpiles, leach pads,
tailing ponds, waste dumps and other improvements constructed by DGLLC, which may be potentially harmful to the environment, shall be
located so as to minimize their potential adverse effects, provided such location does not have a material adverse economic effect on
DGLLC’s operations, as determined in the sole good faith judgment of DGLLC.
(d) In
addition to complying with all laws applicable to archeological and cultural sites and resources, DGLLC will consult with and attempt
to accommodate any concerns expressed by TKC regarding impacts of DGLLC construction or other operations on specific archeological or
cultural sites that TKC identifies for DGLLC by particular location on the Surface.
(e) DGLLC
and TKC may each fulfill some or all of their consultation and coordination obligations under this Section 5.4 as part of the Committee
meetings and other communications under Section 5.5.
5.5 Advisory
Committee.
(a)
To facilitate consultation and coordination and the common interests of the parties, DGLLC and TKC, in cooperation with Calista,
will promptly after the Effective Date form an Advisory Technical Review and Oversight Committee (the “Committee”). The Committee,
with Calista’s consent, which the Parties hereby confirm has been obtained, will replace and carry out all functions of the Advisory
Technical Review Committee under former Section 7.8 of the Lease, prior to its amendment as of the Effective Date.
(b)
The Committee shall be composed of six members, one designated by TKC, two designated by Calista, and three designated by DGLLC.
The Committee will meet at least quarterly. TKC, Calista, or DGLLC may request a meeting of the Committee upon (14) days advance written
notice to the other two parties. The purpose of the Committee will generally be to advise and consult and to take into consideration
the common interests of the parties on all matters concerning DGLLC’s exploration and development plans on the Property or Surface
and the results thereof, to undertake joint field visits, and to plan future operations. DGLLC shall seek TKC and Calista views on issues
of concern to each regarding DGLLC plans and operations on the Property or Surface, including but not limited to environmental protection,
reclamation, subsistence uses, impacts on communities, impacts on archeological and cultural resources, and reasonably minimizing conflict
among uses.
(c)
TKC agrees that DGLLC may provide Calista Committee representatives copies of such non-interpretive geological, geophysical, and
geochemical data, assays, drill data, drill core, maps, metallurgical data, surveys, feasibility studies and development plans as Calista
shall reasonably deem appropriate to ensure a mutually beneficial working relationship with respect to the Lease and Property. DGLLC
shall provide TKC Committee representatives copies of such maps, surveys, feasibility studies and development plans and other documents
as TKC shall reasonably deem appropriate to ensure a mutually beneficial working relationship with respect to this Agreement and the
Surface, including, but not limited to, any documents reasonably appropriate for TKC to confirm the correctness and accuracy of Milled
Tonnage Fee and Net Proceeds Payments under Sections 4.6 and 4.7.
14
(d)
Notwithstanding the views of the Committee, all operational decisions with respect to technical or financial matters shall be
made at the sole discretion of DGLLC. With respect to access issues relating to the Property; relationships with other native entities
(e.g. corporations, villages, tribal groups, non-profit service providers); claim holders, and cultural issues, Calista will take the
lead role and TKC and DGLLC agree that all final decisions on such matters shall require the agreement of Calista and DGLLC; provided,
however, that Calista may not exercise its rights granted in this Section in such a manner as would delay, stop, prohibit or otherwise
materially and adversely affect the exploration, development, or mining of the Property; and provided further, without limitation, that
for such matters with a particular relationship to the access to and use of the Surface, the provisions of Sections 5.2(c) and 5.6(a)
shall apply. With respect to such access and use, TKC will consult with Calista and make a good faith effort to reach agreement with
Calista regarding the exercise of TKC’s rights. A consensus of the Committee shall determine all other issues (except for operational
decisions with respect to technical or financial matters). TKC covenants to use its best efforts to participate in the Committee in a
manner to facilitate exploration, development and mining operations on the Surface and the Property to the benefit of each of the parties.
(e)
DGLLC agrees to bear the actual costs of Committee travel and meeting expenses incurred by TKC or individual TKC Committee members,
in an amount not to exceed [***] per year, commencing with the year commencing June 5, 2014. TKC or individual TKC Committee members
respectively shall submit to DGLLC expense reports with receipts that itemize and adequately describe expenses in order to receive reimbursement
for Committee travel or meeting costs which TKC or the individual member incurs, within ninety (90) days after the expense is incurred.
(f)
DGLLC agrees to pay or reimburse actual invoiced charges for independent reporting to TKC or its counsel regarding reclamation
planning or progress or environmental monitoring (including but not limited to reviews of Permits and documents described in Section
5.2(b)) that is requested or contracted for by TKC, in an amount not to exceed $125,000 per year, commencing with the year commencing
June 5, 2014. The contract with any third party for any such reporting shall include a strict confidentiality agreement that is satisfactory
to DGLLC.
(g)
The Committee shall operate in a manner to provide adequate notice of meetings, open communications among members of the Committee,
and documentation of actions taken by the Committee or DGLLC related to the Committee’s actions or discussions.
(h)
The confidentiality requirements of Section 11.2 of this Agreement for Information shall apply to documents and information shared
with a Calista, TKC or DGLLC Committee member in their capacity as a Committee member.
15
5.6 Subsistence
Plan and Cooperation.
(a)
The Committee described in Section 5.5 will develop a subsistence plan for all Surface lands affected by DGLLC operations. The
subsistence plan will be developed with the objective of providing TKC’s shareholders with full access to Surface lands for subsistence
uses, subject to the regulatory, safety and other operational needs described in Section 5.6(c). The subsistence plan will be updated
periodically as appropriate to reflect any changes in operations included in the summary provided by DGLLC described in Section 5.1 and
any changes resulting from TKC’s comments or TKC’s and DGLLC’s meetings with government agencies, as described in Section
5.2(c).
(b)
Prior to destruction by DGLLC operations of any Surface resources such as trees or berries suitable for subsistence use, DGLLC
and TKC will cooperate to evaluate for harvest of such resources prior to destruction and delivery to a village or villages in the vicinity
for subsistence use. Prior to destruction, TKC shall retain title to such resources, but subject to DGLLC’s rights to use or destroy
such resources as described in Section 1.1 and other provisions of this Agreement. DGLLC shall not be required to materially delay construction
or other operations to accommodate pre-destruction harvest or delivery of Surface resources or to otherwise provide for harvest or delivery
that, as determined in the sole good faith judgment of DGLLC, is not reasonably practicable or which has a material adverse economic
effect on DGLLC’s operations.
(c)
This Section shall not restrict or otherwise affect DGLLC’s Surface use, disturbance, and reclamation rights and obligations
described elsewhere in this Agreement, including but not limited to rights to destroy Surface resources as described in Section 1.1,
or DGLLC’s authority over its operations under this Agreement, including but not limited to authority to restrict or control access
for subsistence use to meet regulatory, safety, or other operational needs.
Article
VI. ENVIRONMENTAL PROTECTION.
6.1 Compliance
with Applicable Laws and Cooperation.
(a)
DGLLC will comply with all applicable federal, state and local laws in performing operations under this Agreement. In addition,
DGLLC’s operations on the Surface, including reclamation, will be conducted in accordance with those substantive federal and state
statutes and regulations applicable to federal lands adjoining the Surface.
(b)
TKC will designate an environmental compliance (“EC”) representative to facilitate environmental monitoring and reviews
by TKC and communications with DGLLC regarding environmental concerns. The TKC EC representative and DGLLC will mutually agree upon and
periodically update a list of DGLLC environmental data relevant to DGLLC operations on the Surface. DGLLC will provide access by the
TKC EC representative to such data by the end of each quarter during each year, commencing with the first full quarter after the Effective
Date.
(c)
DGLLC will additionally allow the TKC EC representative, at TKC’s sole expense, to conduct an audit of DGLLC records relevant
to environmental compliance for operations on the Surface, upon TKC providing written notice to DGLLC not less than sixty (60) days in
advance, and no more than twice per calendar year. Provided, DGLLC shall not be obligated to allow audit or other review by TKC of such
records identified by DGLLC as confidential material for which DGLLC would be entitled to claim to be privileged from disclosure to third
parties under applicable law, including but not limited to confidential attorney-client communications, attorney work product, and other
internal deliberative documents.
16
(d)
The confidentiality requirements of Section 11.2 of this Agreement for Information shall apply to documents and information shared
with the TKC EC or other representatives, and to the report or other content or results of any audit completed by the TKC EC under Section
6.1(c).
(e)
As part of the Committee functions, DGLLC will consult with TKC regarding development of comprehensive response plans for any
spill or similar accident on the Kuskokwim River between a point ten (10) miles upstream from the village of Stony River and a point
ten (10) miles downstream of the village of Lower Kalskag. DGLLC will fund, in an amount not to exceed [***] annually commencing with
the year commencing June 5, 2014, response/refresher training for up to two (2) teams selected from leaders and residents of the villages
of Stony River, Sleetmute, Red Devil, Georgetown, Crooked Creek, Napaimute, Chuathbaluk, Aniak, Upper Kalskag and Lower Kalskag. Each
response team may consist of one (1) team leader and up to four (4) additional team members. The composition and base location of the
response team(s) will be agreed upon between DGLLC and TKC, based upon each village’s suitability as a strategic location to quickly
respond in the unlikely event of a large spill. Villages selected for locating response teams for the Project construction phase may
be different than those selected for the Project operations phase. DGLLC shall not be obligated to fund training for more than five (5)
members of each response team annually, including team leaders. Training shall be conducted by qualified DGLLC employees or DGLLC’s
contractors. DGLLC funding for training may include reimbursement of trainees for actual travel and other expenses to attend training,
but shall not extend to wages or other payments to trainees who are not DGLLC employees or contractors.
6.2 Reclamation.
(a)
DGLLC shall reclaim, to the extent reasonably practicable, the Surface disturbed by it. Such reclamation activities shall be performed
in accordance with applicable governmental regulations in a manner consistent with the then existing industry standard.
(b)
DGLLC will provide to TKC a copy of DGLLC’s draft Project reclamation and closure plan (“RCP”) no later than
thirty (30) days after the Effective Date, for review by an independent expert consultant to be completed in advance of DGLLC submitting
a proposed RCP to the Alaska Department of Natural Resources (“DNR”) or other government agencies for review. No later than
fifteen (15) days after the Effective Date, DGLLC will provide TKC a list of firms that DGLLC considers qualified to conduct the review.
DGLLC will reimburse TKC for actual charges by the consultant for such review, upon presentment by TKC to DGLLC of invoices from the
consultant, in an amount not to exceed [***]. The consultant review shall be completed and TKC shall provide a copy of the review
and any recommendations and comments by TKC regarding the draft RCP in writing to DGLLC no later than sixty (60) days after the Effective
Date.
17
(c)
DGLLC will provide to TKC as part of or with the draft RCP for the review described in Section 6.2(b):
1)
detailed information and the assumptions supporting the draft RCP and cost estimates therein, including the cost spreadsheets
used to support the initial reclamation and closure cost estimate;
2)
the basis for estimating the volumes and quality of water that will need to be managed in the post-closure period and a description
of the treatment that DGLLC plans or predicts will be needed prior to any discharge of water from Project facilities;
3) a
description of other post-closure long-term treatment, monitoring, or other actions planned or predicted by DGLLC to meet environmental
protection or regulatory objectives; and
4) a
description of the financial assurance amount, mechanisms, and schedule planned or predicted by DGLLC for the activities and requirements
included in the RCP.
(d)
DGLLC will provide to TKC opportunities for continued participation in Project reclamation, closure, and related environmental
and financial assurance planning and permitting through the Committee as described in Section 5.5 and in accordance with the plan attached
as Exhibit B to this Agreement. Exhibit B may be amended from time to time by mutual written agreement of TKC and DGLLC.
(e)
DGLLC shall not be required to commence its reclamation operations hereunder until it advises TKC in writing that its mining,
processing, and marketing operations have been completed on the Property; provided, however, as to the Surface disturbed by DGLLC which
has not been designated as an Exclusive Use Area within two (2) years of the date such disturbance occurred, DGLLC shall either designate
the area as an Exclusive Use Area or reclaim the Surface of such area. DGLLC shall commence reclamation activities upon an Exclusive
Use Area upon the termination of its status as an Exclusive Use Area, unless such Area is committed to a mine pursuant to Section 4.3(a).
(f)
Nothing in this Agreement shall be construed to provide TKC with any unilateral right to impose requirements for Project financial
assurance in addition to or in an amount greater than that required by federal or state law, or other TKC right to veto DGLLC determinations
or actions regarding reclamation, closure, or related planning and permitting determinations or actions.
(g)
The confidentiality requirements of Section 11.2 of this Agreement for Information shall apply to documents and information provided
to TKC or a consultant under this Section 6.2.
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6.3 Indemnification.
(a)
DGLLC agrees to defend and hold TKC, its subsidiaries, directors, officers, employees, or other authorized agents or servants
(“TKC Parties”) harmless and fully indemnify them against any and all claims or demands which may be made upon them for,
or on account of, any debt, expense or liability contracted or incurred by DGLLC, its contractors, subcontractors, or other authorized
agents or servants (“DGLLC Parties”) in conducting their activities pursuant to this Agreement, including any liability imposed
on TKC Parties at any time under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42
U.S.C. § 9601 et seq., or other statute or regulation, which arises out of DGLLC Parties’ use or occupation of the Surface,
as well as against any and all acts, transactions, and omissions of DGLLC Parties, in conducting their activities pursuant to this Agreement,
and DGLLC will defend and save TKC Parties harmless and fully indemnify it as to any liability, for or on account of injury to or death
of any person or damage to any property resulting from any such act or omission of DGLLC Parties performed under this Agreement.
(b)
Provided, however, DGLLC’s obligations under this Section 6.3 shall not extend to damages sustained by TKC Parties while
on the Surface pursuant to Section 7.1, or to liability to any TKC Party acting in the capacity of a contractor, subcontractor, or employee
of DGLLC or a DGLLC contractor or subcontractor. Provided further, DGLLC also shall not be liable under this Section 6.3 for any claims
or demands resulting from any acts or omissions of TKC Parties or Calista, its contractors, subcontractors, or other authorized agents
or servants (“Calista Parties”), or for any liability under CERCLA arising out of or in any way connected with any TKC Party
or Calista Party historic, present, or future use or occupation of the Surface or Property, and TKC agrees to hold DGLLC Parties harmless
and indemnify DGLLC from any such liability arising from acts or omissions of TKC Parties, but not from acts or omissions of Calista
Parties.
(c)
For purposes of this Section 6.3, “claims or demands” shall mean causes of action, claims, demands, suits, losses,
liabilities, fines, penalties, costs, damages, judgments, awards and expenses, including, but not limited to, court costs and reasonable
actual attorneys’ fees.
6.4 Insurance.
DGLLC will carry or cause to be carried Worker’s Compensation insurance or provide for workers’ compensation insurance coverage
through self-insurance as permitted or required by law. DGLLC shall carry comprehensive general liability insurance with bodily injury
and property damage limits of not less than [***] per person and [***] per occurrence. Such general liability insurance, with
companies reasonably satisfactory to TKC, or self-insurance at DGLLC’s option, shall name TKC as an additional insured. DGLLC shall
provide TKC with a certificate of insurance or other evidence reasonably satisfactory to TKC showing DGLLC’s compliance with this
Section 6.4.
6.5 Protection
from Liens. DGLLC shall pay all expenses incurred by it in its operations on the Surface, and any liens placed upon the Surface arising
from any action of DGLLC shall be resolved and removed by DGLLC without delay. However, DGLLC shall not be required to remove any such
lien as long as DGLLC is actively contesting in good faith the validity or amount thereof. Nothing in this paragraph shall prohibit DGLLC
from mortgaging or otherwise granting a security interest in any of its rights or interests hereunder; provided, however, the rights
of TKC shall not be subordinated to any rights of such mortgagee or secured party.
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Article
VII. INSPECTION, ACCESS.
7.1 Inspection.
TKC and its authorized agents, at TKC’s risk and expense (except that DGLLC will provide transportation from the closest affected
community serviced by scheduled commercial air service, at least twice a week, to the site of DGLLC’s operations for one inspection
visit per year), shall have the right, exercisable at a mutually convenient time, and in a reasonable manner conforming to DGLLC’s
safety rules and regulations and so as not to interfere with DGLLC’s operations, to go upon the Surface for the purpose of confirming
that DGLLC is conducting its operations in the manner required by this Agreement. TKC shall furnish DGLLC with prior written notice of
the time and place of any inspection by TKC pursuant to this Section. TKC shall hold DGLLC harmless from all claims for damages arising
out of any death, personal injury or property damage sustained by TKC, its agents or employees (but not permittees or lessees), while
in or upon the Surface, whether or not TKC, its agents or employees are in or upon the Surface pursuant to this Section, which death,
injury or damage does not result from DGLLC’s negligence or willful misconduct.
Article
VIII. ANCILLARY RIGHTS.
8.1 Shareholder
Hiring Preference, Training, and Scholarships. DGLLC recognizes that it is in its best interests to hire local persons as employees
whenever possible. Therefore, during the Term, DGLLC shall use all reasonable efforts to hire shareholders of TKC equally with DGLLC
using all reasonable efforts in accordance with the Lease to hire shareholders of Calista or members of their families for positions
for which they are suitably qualified or experienced and available at the time of the proposed hire at prevailing wage and salary rates,
in connection with DGLLC’s operations on or beneath the Surface.
(a)
To facilitate such hiring, TKC shall designate at the beginning of each calendar year a hiring liaison office which shall assist
DGLLC in identifying and hiring qualified and available employees. DGLLC shall designate a representative in its human resources department
to engage during each year in recruitment outreach efforts for TKC shareholders, in coordination with the TKC liaison office. TKC shall
maintain and deliver to the DGLLC representative on or before January 31 of each year a current list of TKC shareholders who are interested
in working on the Project, together with resumes or descriptions of existing education, training, and experience for each listed person.
DGLLC shall deliver to the TKC liaison office on or before March 31 of each year a list of employment positions which it anticipates
it will need to fill during the coming year, together with specific education, training, and experience requirements for each position.
DGLLC shall provide a list quarterly to the TKC liaison office showing the number of TKC shareholders employed by DGLLC and its contractors.
(b)
DGLLC shall also include in all of its agreements with independent contractors for operations on or beneath the Surface a clause
requiring such independent contractors to use all reasonable efforts to hire shareholders of TKC equally with using all reasonable efforts
to hire shareholders of Calista or members of their families in accordance with the provisions of this Agreement.
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(c)
DGLLC shall take reasonable measures to train TKC shareholders when DGLLC has advance knowledge of vacant positions.
(i) DGLLC
each year commencing June 5, 2014 shall make an annual contribution for scholarships for educational or vocational training for TKC
shareholders. [***] of the amount contributed each year shall be reserved for scholarships for TKC shareholders seeking a degree or
certificate in some technical field associated with the mining industry, focusing upon skills that will potentially be of use to the
mining operations and environmental activities contemplated by DGLLC on or beneath the Surface. Commencing with the year commencing
June 5, 2014 and during each year commencing June 5 thereafter during the Term, DGLLC shall contribute [***] per year, which
amount will increase to [***] per year following a determination by DGLLC to proceed with construction to achieve Project
Commercial Production and to [***] per year following the commencement of Project Commercial Production.
(ii) These
funds will be contributed by DGLLC to, and scholarships awarded by, the Donlin Gold Kuskokwim Educational Foundation, a separate entity
from TKC. TKC agrees to DGLLC representation on the Foundation committee for awards for the mining related scholarships. DGLLC and TKC
will jointly agree on recommendations to be made to the Foundation concerning the selection of recipients of such scholarships.
(iii) In
cooperation with TKC, DGLLC shall designate a DGLLC representative to work with appropriate state, federal, and local entities to facilitate
and support creating and funding a training center in Aniak.
(d)
It is not the intent of the parties to create any legal right whatsoever in any individual shareholder or member of their families
to contest any decision made by DGLLC or TKC under this Agreement.
8.2 Bidder’s
Preference Reserved to TKC.
(a) (i) On or before September 30, 2014 and September
30 of each calendar year thereafter, DGLLC shall meet with TKC to provide a review of DGLLC’s then current nonbinding forecast
(“Forecast”) describing the types of contracts for which DGLLC Entities anticipate seeking bids for Donlin Project Work,
during the upcoming twelve (12) months, and to review and coordinate with TKC regarding:
(1) contracts for Donlin Project Work that have
been awarded or entered into during the prior quarter between a DGLLC Entity and a TKC Entity, or a third party, the reasons for acceptance
of such contracts and where applicable, the reasons for rejection of a TKC bid by a DGLLC Entity, including a reasonably detailed description
of the analysis used by the DGLLC Entity in deciding to reject that TKC bid;
(2) potential contracts for Donlin Project Work
for which a DGLLC Entity sought but rejected all bids during the prior quarter;
(3) any other matters of interest to either TKC
or DGLLC within the scope of this Section 8.2.
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(ii) DGLLC shall meet with TKC additionally near
the end of each other quarter after each annual Forecast to provide and review updates, if any, to the Forecast and to review and coordinate
regarding any other matters of interest to either DGLLC or TKC within the scope of this Section 8.2. The Parties may meet in between
quarterly meetings upon request by either Party, but are not obligated to do so.
(iii) The Parties acknowledge that the purposes
of the Forecast and meetings are to share appropriate information to assist planning and coordination between the Parties, including
available information regarding specific contracting needs of DGLLC Entities, to assist a TKC Entity to have a meaningful opportunity
to be a competent and capable contractor when submitting bids. The Forecast and meetings shall not create any obligation or liability
of a DGLLC Entity to seek bids for any contract of any type or otherwise be the basis for any cause of action relating to the implementation
of this Section 8.2.
(iv) The confidentiality requirements of Section
11.2 of this Agreement shall apply to any documents and information (collectively, “information”) shared and identified as
confidential by any DGLLC Entity or TKC Entity during or in relation to such meetings; provided, however, that TKC shall be entitled
to discuss and share such information with a TKC Affiliate, provided that the TKC Affiliate shall be subject to the same confidentiality
requirements as are applicable to TKC with respect to that information and prior to the disclosure thereof shall execute an agreement
to keep such information confidential in the form referenced in Section 11.2. A DGLLC Entity shall not be obligated to disclose to a
TKC Entity any information of other contractors that is proprietary or confidential, or the disclosure of which is prohibited by law.
(v) Any meetings required by this Section 8.2 may
be combined with Committee meetings under Section 5.5 with the consent of DGLLC, Calista and TKC.
(b) In addition, whenever during the term of this
Agreement, commencing with the Effective Date, DGLLC elects to seek cost estimates or bids for a contract for Donlin Project Work, DGLLC
shall:
(i) notify TKC in the same manner as it notifies
others from whom it is seeking cost estimates or bids for such contracts, and in that notification provide TKC with the same information
that DGLLC provides to the others with respect to such cost estimates or bids; and
(ii) in the event that DGLLC actually seeks bids
for such a contract, invite TKC, directly or through an appropriate TKC Affiliate, to submit a bid for that contract; and
(iii) in the event that DGLLC actually seeks bids
for such a contract, include in the notice or invitation that DGLLC provides to each prospective bidder, notice of the TKC bidder’s
preference under this Section 8.2, including but not limited to its application to subcontracting as provided in paragraph (1) of this
Section 8.2.
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(c) Any bid submitted by a TKC Affiliate for such
contract (“TKC Bid”) within the time period specified by DGLLC for submittal shall be accepted if:
(i) the TKC Bid conforms to any procedural and informational
requirements applicable to all prospective bidders for submitting a bid that DGLLC, in its sole reasonable discretion, includes in the
written invitation to submit bids for the contract that DGLLC delivers to TKC; and
(ii) the TKC Affiliate is competent and capable
of performing the TKC Bid; and
(iii) the TKC Bid is substantially equivalent to
or better than the lowest qualified bid received by DGLLC which DGLLC otherwise would have accepted; and
(iv) the TKC Bid meets one of the following requirements:
(A) the cost of the TKC Bid does not exceed by more
than five percent (5%) the cost of the lowest qualified bid received by DGLLC which DGLLC otherwise would have accepted; or
(B) (1) the cost of the TKC Bid exceeds by five
percent (5%), but not more than ten percent (10%), the cost of the lowest qualified bid received by DGLLC which DGLLC otherwise would
have accepted, in which event, DGLLC shall notify TKC in writing: (I) of the cost of the lowest qualified bid received by DGLLC which
DGLLC otherwise would have accepted; (II) that the cost of the TKC Bid exceeded the five percent (5%) threshold; and (III) that the TKC
Affiliate shall have ten (10) days after receipt of that notice in which to elect to submit a revised bid for the applicable contract
which in cost does not exceed by more than five percent (5%) the cost of the lowest qualified bid received by DGLLC which DGLLC otherwise
would have accepted (a “Qualifying Revised TKC Bid”); and
(2) within the ten (10) day period identified in
(B)(1) above, the TKC Affiliate delivers in writing to DGLLC a Qualified Revised TKC Bid for the applicable contract. If the TKC Affiliate
fails to deliver in writing to DGLLC a Qualifying Revised TKC Bid within the applicable ten (10) day period, DGLLC may then accept the
lowest qualified bid received by DGLLC which DGLLC otherwise would have accepted. If DGLLC does not accept that bid, then DGLLC may reassess
all bids submitted, including that of the TKC Affiliate, in accordance with the provisions of this Section 8.2 or seek new bids for the
same contract, and TKC Affiliates will once again be eligible to submit a new bid meeting the requirements of and in accordance with
the provisions of this Section 8.2.
(d) As used in this Section 8.2(d), “Calista”
and “TKC” shall, without limitation, include and apply to any Calista affiliate or TKC Affiliate, respectively, and “contractor”
or “contractors” shall include “subcontractor” or “subcontractors” respectively. In the event that
both Calista and TKC each timely submit a separate sole bid, rather than joint Calista/TKC bid for a contract with respect to categories
of Donlin Project Work other than those identified in Exhibit X, then the provisions of paragraph (c) shall apply when evaluating the
bid by TKC against bids submitted by third parties, but shall not apply when evaluating the bids of Calista and TKC against one another.
As between TKC and DGLLC, DGLLC may in its sole discretion accept either the bid submitted by Calista or the bid submitted by TKC, notwithstanding
any provision of paragraph (c) above or other provision of this Agreement or other agreement between or among Calista, TKC, or DGLLC,
and without limitation to DGLLC Entity rights to reject all bids or a TKC bid to the extent it does not meet the requirements of paragraph
(c) or any other provision of this Section 8.2. TKC shall not initiate litigation or any other form of proceeding against DGLLC or any
of its other contractors on the grounds that its bid should have been accepted, rather than the bid submitted by Calista, because of
a priority preference under this Agreement or the Lease.
23
(e) DGLLC may require a performance bond or guaranty
from any designated contractor, including TKC Affiliates. DGLLC further may perform any and all operations contemplated by this Agreement
by itself without seeking any bids, and reject all bids submitted in response to DGLLC seeking bids for any contract. Provided: DGLLC
shall seek bids for one or more contracts for work within each of the categories listed as “yes” in the “DGLLC Commitment”
column in Exhibit X, in the event that DGLLC determines to proceed with Project operations in that category. Said contract(s) shall be
of sufficient scope and total payments to the contractor(s) to comprise at least a substantial portion of the Project operations in that
category.
(f) This Section 8.2 shall not apply to any contracts
or related cost estimates in any of the following categories when sought and contracted by DGLLC in a stand-alone contract or estimate:
(i) those which DGLLC determines in its sole discretion
must be entered into or performed within a short time period for which seeking competitive cost estimates or bids is not commercially
practicable, including, without limitation, contracting in emergencies;
(ii) if sought by DGLLC after the date that DGLLC
delivers written notice to TKC of DGLLC’s determination to proceed with construction for Project Commercial Production, those for
one-time, non-recurring work which DGLLC determines in its sole discretion prior to requesting bids will not exceed $50,000 in total
payments to the successful contractor;
(iii) those for (A) preparing solicitations for
bids; (B) construction design; (C) obtaining regulatory permits; or (D) other professional architectural, engineering, environmental,
planning, consultation, financial, or legal services;
(iv) those for procurement of fuel, goods, equipment,
or other materials or consumables (except for procurement of any materials or consumables that is incidental to a services contract or
estimate); or
(v) those for general Project engineering, procurement,
and construction management, or any component of Project engineering or procurement, or construction management (“EPCM”),
except that paragraph (1) of this Section 8.2 shall apply to such EPCM contracts.
(g) For purposes of this Section 8.2:
(i) “Bid” and “Bids” (whether
capitalized or not) mean “proposal or bid” and “proposals or bids” respectively.
(ii) “competent and capable of performing”
means, as reasonably determined solely by DGLLC (taking into consideration all personnel and entities participating in the bid), having
adequate (1) financial, commercial, and technical skills, organization and resources; and (2) safety, quality assurance, and other accounting
and operational controls; and (3) record of relevant performance, integrity and business ethics to safely, responsibly and timely complete
performance according to specifications.
24
(iii) “control” or “controlled”
means, when used with respect to an entity, the ability, directly or indirectly through one or more intermediaries, to direct or cause
the direction of the management and policies of such entity through (i) the legal or beneficial ownership of voting securities or membership
interests; (ii) the right to appoint managers, directors or corporate management; (iii) contract; (iv) operating agreement; (v) voting
trust; or otherwise.
(iv) “cost” means the total payments
by DGLLC to the successful contractor and other costs to DGLLC of performance, taken as a whole, as reasonably determined solely by DGLLC
based on review of the bid.
(v) “days” means calendar days.
(vi) “DGLLC Entity” means: (i) DGLLC,
and (ii) a DGLLC prime contractor; but excluding a TKC Affiliate. Neither this definition nor anything else in this Agreement shall be
construed to suggest any relationship other than that of independent contractors between or among DGLLC, its prime contractors, or individuals
or entities contracting with either.
(vii) “DGLLC prime contractor” means
an entity, other than a TKC Affiliate, that contracts directly with DGLLC as the other party to the contract, and does not include any
subcontractors or other parties not contracting directly with DGLLC as the other party to the contract.
(viii) “Donlin Project Work” means work
on the Property or within the categories listed in Exhibit X (regardless of whether the work in the listed categories is located on the
Property) and excluding contracts described in paragraph (f) of this Section 8.2.
(ix) “Fundamental Change,” for purposes
of paragraph (j), means an addition of scope, outside the scope definition specified in the original contract that increases the original
contract cost by more than forty percent (40%) or extends the original contract completion time by more than forty percent (40%).
(x) “material change in the relationship,”
as used in the definition of “TKC Affiliate,” means a decrease below forty percent (40%) in the share of the net income of
the Joint Enterprise from the contract between the Joint Enterprise and a DGLLC Entity that the TKC Entity has a right to receive, or
other change that substantially decreases the meaningful business interest of the TKC Entity in the Joint Enterprise.
(xi) “meaningful business interest”
as used in the definition of “TKC Affiliate,” means a substantial, active role in management and operation, sufficient to
develop and maintain TKC Entity capability and proficiency in the work that is within the scope of the Joint Enterprise.
25
(xii) “substantially equivalent” means
commercially and technically acceptable and otherwise equivalent in terms of quality and time of performance, in all material aspects
and considering all factors, as reasonably determined solely by DGLLC.
(xiii) “TKC Affiliate” means (A) a TKC
Entity; (B) a business enterprise in the form of a partnership, limited liability corporation, or corporation formed by a TKC Entity
and one or more entities (“Joint Enterprise”) in which the TKC Entity maintains, to DGLLC’s reasonable satisfaction,
a meaningful business interest and a right to receive at least forty percent (40%) of the net income of the Joint Enterprise from the
contract between the Joint Enterprise and a DGLLC Entity; or (C) an entity which DGLLC determines in its sole reasonable discretion is
otherwise acceptable to DGLLC as a TKC Affiliate for purposes of this Section 8.2. A material change in the relationship between a TKC
Entity and an entity from which DGLLC has accepted a bid for a contract as a TKC Affiliate and which occurs or takes effect after DGLLC
has notified TKC that the entity is acceptable as a TKC Affiliate shall be deemed a change that disqualifies the entity as a TKC Affiliate
and shall be grounds for default termination of the contract by DGLLC in its sole discretion, without DGLLC Entity liability, unless
TKC has obtained DGLLC written consent to the change prior to the change becoming effective.
(xiv) “TKC Entity” means (A) The Kuskokwim
Corporation (“TKC”); or (B) a business entity that is controlled and wholly owned, directly or indirectly, by TKC.
(xv) “which DGLLC otherwise would have accepted”
means which DGLLC notifies the bidding TKC Affiliate in writing that it is prepared to accept.
(h) Notwithstanding Section 3.3, Article IX or
any other provision of this Agreement or other agreement, TKC agrees that its remedies for any breach or default by a DGLLC Entity or
other individual or entity subject to obligations to TKC hereunder in the performance of its obligations under this Section 8.2 shall
be limited as follows:
(i) Said remedies shall not include the termination
of this Agreement.
(ii) Said remedies shall be solely and exclusively
limited to the legal remedies of declaratory relief and money damages. Money damages shall include consequential damages and damages
for lost profits, but only to the extent proven at trial. TKC expressly acknowledges and agrees that the remedy of money damages on account
of any breach or default of this Section 8.2 is an adequate remedy at law.
(iii) TKC shall not seek any injunction, specific
performance, or any other equitable remedy that would delay a DGLLC Entity or other individual or entity subject to obligations to TKC
hereunder from entering into a contract with a party other than a TKC Affiliate, or that would suspend or delay the performance of such
other contract.
(iv) The provisions of this paragraph (h) shall
apply fully to any TKC Entity and other TKC Affiliates.
(v) The provisions of this paragraph (h) are material
terms of this Section 8.2.
[Section 8.2(i) intentionally omitted]
26
(j) Nothing in this Section 8.2 shall limit DGLLC’s
ability to enter into contracts with a duration of greater than one (1) year, provided that the provisions of this Section are complied
with at the initiation of the contract. Provided further, that upon DGLLC determining to propose or consider acceptance of a Fundamental
Change in a contract that encompasses Donlin Project Work, DGLLC shall seek bids as provided in this Section for any additional Donlin
Project Work within the scope of that Fundamental Change, rather than negotiate solely with the other party to that contract regarding
such additional work. Similarly, after termination of a contract between a DGLLC Entity and a party other than a TKC Affiliate for Donlin
Project Work, if DGLLC determines to seek additional Donlin Project Work that would have constituted a Fundamental Change in that contract
prior to its termination, DGLLC shall seek bids as provided in this Section for any additional Donlin Project Work within the scope of
that Fundamental Change, rather than negotiate solely with the other party to the terminated contract regarding such additional work.
(k) DGLLC and TKC shall each by written notice
to the other designate a sole lead representative for purposes of the meetings described in (a) above and all other communications between
the Parties under this Section 8.2; provided, however, that DGLLC and TKC may involve such other or additional individuals in the meetings
as they determine are appropriate. The written notice shall include at least the office street address, mail and e-mail address, and
phone number for the designated representative. Either party may change the representative or update the address and other contact information
for the representative from time to time by written notice to the other party. Written notice delivered to the designated representative
shall constitute written notice to the party that person represents for all purposes under this Section 8.2, notwithstanding Sections
11.3(b) or 11.6 or any other provision of this Agreement.
(l) DGLLC shall require that all contracts issued
by DGLLC prime contractors that encompass Donlin Project Work contain a bidder’s preference provision substantively identical to
this Section 8.2 that would flow to the benefit of a TKC Affiliate as a potential subcontractor for such Donlin Project Work where the
DGLLC prime contractor is the other party to the contract. Further, DGLLC shall require that any contract for any Donlin Project Work
described in Exhibit X that is issued by: (i) any subcontractor to a DGLLC prime contractor, or (ii) any other individual or entity,
contains a bidder’s preference provision substantively identical to this Section 8.2 that would flow to the benefit of a TKC Affiliate
as a potential subcontractor for such Exhibit X Work where that subcontractor, individual or entity is the other party to the contract.
As a condition of issuing a contract that encompasses Donlin Project Work to a prospective DGLLC prime contractor, DGLLC shall require
the prospective DGLLC prime contractor to comply with the bidder preference provision included in the contract in selecting, in advance
of the contract issuance, any subcontractor for Donlin Project Work encompassed by the contract, if the prime contractor selects any
such subcontractor in advance.
27
8.3 Port
Construction and Operations.
The provisions of this Section 8.3 are limited solely to the upriver
port on the Kuskokwim River that DGLLC plans to construct and use for mining related development and operations on a portion of the Surface
(the “Port”), and the related road that DGLLC plans to construct and use for ingress and egress from the Port to the Project
mine site (the “Port Road”). This Section 8.3 rather than Section 8.2 shall apply to the Port Contract Work described in
this Section 8.3. This Section 8.3 as well as Section 8.2 shall not apply to any contracts or related cost estimates in any of the categories
listed in Section 8.2(f).
(a)
DGLLC has identified a site at Jungjuk encompassing a portion of the Surface as the location for the Port and a route for the
Port Road, subject to regulatory agency approval. The location of the Port site and Port Road route are described in Exhibit A-3 to this
Agreement. TKC agrees to the Jungjuk Port site and Port Road route as described in Exhibit A-3 and use of the Surface at the site for
the Port and within the Port Road route in accordance with this Agreement. TKC shall cooperate as requested by DGLLC to obtain all required
government approvals for construction and operation of the Port and Port Road. In the event that all government approvals are not obtained
for use of the Jungjuk site for the Port or the Port Road route, or DGLLC otherwise determines to use a different location for the Port
or route for the Port Road, DGLLC will consult with TKC in accordance with Section 5.4 regarding that alternative location. The Port,
at the Jungjuk site or any alternative location, shall be located on Surface lands (excepting any portion on lands below the ordinary
high water elevation not owned by TKC), to the maximum extent practicable and subject to regulatory agency approval. The terms and conditions
of this Section 8.3 shall apply to any such alternative locations.
(b)
Once construction of the Port and Port Road is complete and subject to any required government approvals, DGLLC agrees to land
at the Port all supplies and materials for the Project mine site that DGLLC or its contractors barge on the Kuskokwim River, and to use
the Port Road as the ingress and egress road route for the Project mine site during the Term.
(c)
During the Term and subject to any required government approvals, the Port and Port Road shall be used exclusively for operations
conducted or authorized by DGLLC for Project mine construction and operation purposes. Provided, TKC may submit a written request to
DGLLC describing particular activities for which TKC seeks use of the Port and Port Road, and upon written approval by DGLLC of the request
and subject to any required government approvals, may proceed with that activity. TKC shall assure that any such approved activities
do not materially impede or interfere with DGLLC use of the Port or Port Road to move supplies and materials and other Project construction
and operation purposes. DGLLC shall be entitled to charge a commercially reasonable pro-rata fee for any activities that DGLLC approves
in response to a TKC request, or other third party use of the Port or Port Road during the Term.
(d)
DGLLC shall provide TKC with the exclusive contract or contracts for Port construction and operation work on the Port site (“Port
Contract Work”) during the Term, subject to the following terms and conditions:
(i) TKC
in consultation with DGLLC shall select a contractor acceptable to DGLLC, through a request for qualifications, request for proposals,
or other competitive bidding process, to form a joint venture, limited liability company, or other Alaska-registered entity with TKC,
or a subcontractor relationship with TKC or with a wholly-owned subsidiary of TKC, for Port Contract Work. The entity or relationship
formed by the selected contractor and TKC is hereinafter referred to as the “Port Contractor.”
28
(ii) The
Port Contractor shall meet the requirements for a TKC Affiliate as defined in Section 8.2(g)(xiii). DGLLC shall have the right to review
and reject or require changes in the form of and terms and conditions proposed by TKC for the agreement between TKC and the contractor
to form the Port Contractor to meet the requirements for a TKC Affiliate and shall, without limitation, have the right to require TKC,
any participating TKC subsidiary, and the selected candidate to jointly and severally guarantee the Port Contract Work obligations and
performance of the Port Contractor.
(iii) DGLLC
shall have the right to accept or reject among one or more candidates proposed by TKC to form with TKC or a wholly-owned TKC subsidiary
the Port Contractor, based on the candidate’s experience, capabilities, and other qualifications. DGLLC shall be entitled to accept
in its sole discretion the candidate that DGLLC determines is the most qualified candidate, and not necessarily the lowest cost proposal
or bid.
(iv) The
provisions of (i) through (iii) above shall apply to any change in the Port Contractor.
(v) Each
contract for Port Contract Work (“Port Contract”) shall provide for the payments by DGLLC to the Port Contractor to not exceed
allowable costs of performance described in the contract plus a contractor’s fee totaling no more than 10% of the incurred and
allowed costs. The contractor’s fee shall be inclusive of all G & A expenses (as defined by the United States Defense Audit
Agency Audit Manual), other overhead and general expenses (except as expressly and specifically described in the contract as an allowed
cost) and profit. The allowable costs shall be described in and measured under each Port Contract in accordance with factors reasonably
acceptable to DGLLC as well as generally accepted commercial construction and facility operation industry principles and practices.
(vi)
Each Port Contract shall provide for the Port Contractor to be responsible for accounting for costs appropriately and for maintaining
records, including supporting documentation, adequate to demonstrate that costs claimed have been incurred, are allocable to the contract,
and are otherwise allowable according to the contract terms. DGLLC may disallow all or part of a claimed cost that is inadequately supported.
(vii)
Each Port Contract shall provide DGLLC the right, but not the obligation, to audit or otherwise review, during business hours
and upon reasonable notice to the Port Contractor, Port Contractor records for purposes of monitoring and assuring that payments by DGLLC
do not exceed the limits described in (v) above.
(viii) DGLLC
shall have the right to include in any Port Contract all other specifications it determines in its sole reasonable discretion are necessary
or appropriate to describe and provide for the performance of the work within the scope of the contract and other commercially reasonable
terms, including but not limited to requirements for performance bond or guaranty and remedies for breach or default.
(ix) In
addition to any other remedies, DGLLC shall have the right in the event of a material breach or default of a Port Contract by the Port
Contractor, to terminate the contract and have any or all of the work remaining within the scope of the contract performed by a different
contractor chosen by DGLLC in its sole discretion without regard to the provisions of Section 8.2 or this Section 8.3, or to perform
any or all of said work by itself without seeking any proposals or bids.
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(x) TKC
and DGLLC shall be guided but not bound or limited by the relevant provisions of AIA Document A103-2007, “Standard Form of Agreement
between Owner and Contractor where the basis of payment is the Cost of the Work plus a fee without a Guaranteed Maximum Price”
in seeking agreement regarding the specific terms and conditions of any Port Contract.
(e)
Nothing in this Section 8.3 shall be interpreted or applied to obligate DGLLC to commence or continue to construct or operate
the Port or Port Road or provide TKC Port Contract Work in the event that this Agreement is terminated or DGLLC determines not to proceed
with or continue the Project, subject to any Port Contract or Port Road contract obligations existing at the time of termination or such
DGLLC determination. The design, timing, nature, manner, and extent of Port and Port Road construction and operations, as specified by
DGLLC in Port Contracts and Port Road contracts and otherwise with respect to construction and operations outside the scope of said contracts,
shall remain within the sole discretion of DGLLC.
(f)
Nothing in this Section 8.3 shall preclude DGLLC from constructing and operating a downriver port (such as the port currently
contemplated by DGLLC in the vicinity of Bethel) in addition to but not in lieu of the Port, or temporary barge landings, docks, and
related temporary roads and other facilities for construction of mine development and operations facilities, including but not limited
to the temporary use facilities described in Exhibit E. DGLLC shall consult with TKC in accordance with Section 5.4 regarding the location
of such temporary facilities if proposed on or adjacent to TKC lands (Exhibit E contains the further specific agreement between DGLLC
and TKC regarding the facilities described in Exhibit E).
(g)
At the conclusion of mining and mine closure operations on the Surface, or upon termination of this Agreement by DGLLC, DGLLC
shall at TKC’s election transfer to TKC title to all DGLLC facilities constructed on and affixed to TKC Surface encompassed by
the Port (“Port Facilities”), in accordance with this paragraph (g). This paragraph (g) rather than Sections 3.5 and 3.6
shall apply to said Port Facilities, except in the event of termination of this Agreement by TKC pursuant to Section 3.3 prior to conclusion
of mining and mine closure operations on the Surface, in which event Sections 3.5 and 3.6 shall apply thereto.
(i)
DGLLC shall, within sixty (60) days after determining that it has concluded mining and mine closure operations on the Surface
or termination by DGLLC pursuant to Section 3.2, whichever occurs earlier, deliver to TKC a written notice containing a list of all Port
Facilities and an offer to transfer title to the listed Port Facilities to TKC. TKC shall have sixty (60) days after receiving the DGLLC
written notice to deliver to DGLLC TKC’s written notice of its election to accept title to all, but not less than all, Port Facilities
listed in the DGLLC written notice. Within thirty (30) days after receiving TKC’s written notice, DGLLC shall deliver to TKC an
appropriate written instrument or instruments transferring title to the listed Port Facilities to TKC, free and clear of all claims,
liens and encumbrances except those applicable to the TKC Surface encompassed by the Port as of the Effective Date or in favor of or
attributable to TKC, or to which TKC otherwise expressly agrees. DGLLC shall not charge TKC any additional payment for such transfer
of title, and TKC and DGLLC shall otherwise each bear its own costs of such transfer.
30
(ii) DGLLC
shall retain, in addition to its access and use rights regarding the Surface under Section 3.4 and other provisions of this Agreement,
access and use rights regarding the Port Facilities for purposes of completing its reclamation and continuing maintenance, monitoring
or other regulatory requirements, without additional payment to TKC, and the transfer of title under this paragraph (g) shall be subject
to all said rights.
(iii) If
TKC does not within the sixty (60) day period described above deliver to DGLLC TKC’s written notice of its election to accept title
to all, but not less than all, Port Facilities listed in the DGLLC written notice, then DGLLC shall have no further obligation to TKC
regarding the listed Port Facilities under this paragraph (g).
Article
IX. DEFAULT.
9.1 Default.
If any party fails in the performance of any material obligation under this Agreement (for purposes of this Article IX called the “defaulting
party”), the other party shall serve upon the defaulting party written notice of default, describing the default with specificity.
If the default is failure to make any payment when due under this Agreement, the defaulting party shall have thirty (30) days after receipt
of notice, to cure the default. If the default is for breach of any obligation other than the payment of money, the defaulting party
shall have sixty (60) days to cure the default, or if the default reasonably cannot be cured within sixty (60) days, the defaulting party
shall commence curing the default within sixty (60) days and shall thereafter continue diligently to cure the default. If the defaulting
party disputes that it is in default with respect to all or part of the breaches set forth in the notice by the non-defaulting party,
the defaulting party shall cure and/or commence curing all matters for which it is in default and for which it does not dispute the claim
of default (if the default is payment of money, the defaulting party shall pay all amounts it does not dispute that it owes). For those
matters, which the defaulting party disputes, the defaulting party shall commence suit for a declaratory judgment or such other relief
as is appropriate within ninety (90) days in the courts of the State of Alaska, Third Judicial District. If the defaulting party does
not commence suit within ninety (90) days of its receipt of notice, the defaulting party shall be conclusively presumed not to dispute
the claim of default. If the defaulting party fails to cure the default within the time permitted by this Section 9.1 then the defaulting
party shall be deemed in default.
9.2 Consequences
of Default. If either party is in material default under Section 9.1 above, the non-defaulting party shall have the right to terminate
this Agreement pursuant to Sections 3.2 and 3.3 hereof. If after notice and opportunity to cure as provided for therein, DGLLC would
otherwise be deemed to be in default under Section 9.1 above for failure to make any payment under Article IV above, then such non-payment
shall not constitute a default, but shall instead be deemed a termination of this Agreement by DGLLC pursuant to Section 3.2 above, effective
as of the scheduled due date of such payment.
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Article
X. REPRESENTATION AND WARRANTIES.
10.1 As
To DGLLC. DGLLC represents and warrants to TKC as follows:
(a)
DGLLC is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware
and that it is duly licensed and authorized to conduct business in the State of Alaska.
(b)
The execution, delivery and performance by DGLLC of this Agreement are within DGLLC’s power and authority and do not contravene
DGLLC’s articles of incorporation or bylaws.
(c)
This Agreement is, when duly executed by all Parties and delivered, a legal, valid and binding obligation of DGLLC enforceable
against DGLLC in accordance with its terms provided that TKC delivers an appropriate certificate of authority to DGLLC, within sixty (60)
days of signing this Agreement, evidencing TKC’s Board of Directors’ approval of this Agreement and authorizing TKC’s
management to execute the Agreement as of the Effective Date.
10.2 As
To TKC. TKC represents and warrants to DGLLC as follows:
(a)
TKC is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Alaska.
(b)
The execution, delivery and performance by TKC of this Agreement are within TKC’s power and authority and do not contravene
TKC’s articles of incorporation or bylaws. TKC makes no representations or warranties as to title of Surface, the condition of
the Surface, or the suitability of the Surface for DGLLC’s purposes.
Article
XI. GENERAL PROVISIONS.
11.1 Other
Business Opportunities. This Agreement is, and the rights and obligations of the Parties are, strictly limited to the Surface. Except
as expressly provided herein, the Parties shall have the free and unrestricted right to independently engage in, and receive the full
benefits of, any and all business ventures of any sort whatever, whether or not competitive with the rights granted and the activities
undertaken pursuant to this Agreement, without consulting the other or inviting or allowing the other to participate therein. Neither
of the Parties shall be under any fiduciary or other duty to the other, which will prevent it from engaging in, or enjoying the benefits
of, any competing venture. The legal doctrines of “corporate opportunity” or “business opportunity” as developed
or applied by any court or authority of any jurisdiction and sometimes applied to persons or legal entities occupying a joint venture
or other fiduciary status shall not be applied to any other activity, venture, or operation of either Party.
11.2 Confidentiality.
(a)
For the Term, the Parties agree to treat this Agreement, and the terms and conditions hereof, and all data, reports, records and
other information (the “Information”) relating to this Agreement, as confidential. Such Information shall not be disclosed
to any other third party except corporations or business entities which control, are controlled by or are under common control with a
Party hereto, without the prior written agreement of DGLLC or TKC, as the case may be; and in the event of a permitted disclosure of
Information to an unrelated third party, such party shall prior to the disclosure thereof be required to execute an agreement to keep
such Information confidential in the form attached as Exhibit B to the Bidder’s Preference Agreement. In the event that TKC or
DGLLC is required by any law, rule, regulation, or order to disclose to the public any Information, it shall immediately notify the other
of such requirement and the terms thereof, together with a copy of such release of Information as may be contemplated, prior to such
disclosure. The Party receiving such notice shall then have the right to approve such disclosure or to request, prior to disclosure,
confidential treatment of any of the Information of such terms as it shall, in its sole discretion, determine. The disclosing Party shall
use its best efforts to comply with such request prior to making the required disclosure of Information.
32
(b)
Following expiration or termination of this Agreement, TKC may not disclose to others Information provided to TKC hereunder, unless
such disclosure shall be accompanied by a disclaimer of any representation as to the accuracy or reliability of such Information for
any purpose.
(c)
Information relating to this Agreement to be kept confidential shall not include a description of TKC’s bidder’s preference
in Section 8.2 or information, data, knowledge, and know-how, as shown by written records, that: (i) is in the public domain prior to
disclosure to TKC or DGLLC by the other pursuant to this Agreement, as the case may be; or (ii) lawfully enters the public domain through
no violation of this Agreement after disclosure to TKC or DGLLC by the other pursuant to this Agreement, as the case may be. However,
Information relating to this Agreement to be kept confidential shall include all analyses, interpretations, compilations, studies, or
evaluations of such information, data, knowledge, and know-how generated or prepared by or on behalf of TKC or DGLLC.
11.3 Assignment,
Designation of Sole Representative.
(a)
The Parties hereby agree and confirm that all rights and obligations of PDUS under the Prior Agreement and this Agreement have
been assigned to DGLLC with the consent of TKC. The rights, benefits and obligations of either party hereto may be further assigned in
whole or in part to persons or entities capable of performing the obligations of the assigning party, and the provisions of this Agreement
shall inure to the benefit of and be binding upon their heirs, personal representatives, beneficiaries, successors and assigns. No change
or division in the ownership of the Surface, or payments hereunder, shall operate to enlarge the obligations or diminish the rights of
DGLLC. Prior to the time of any assignment of ownership by either party, notice shall be given of such pending assignment by Assignor
to the other party to this Agreement, furnishing in detail the Assignee’s credentials as to mining capabilities and financial ability.
DGLLC may assign this Agreement to a company which controls, or is controlled by, or which is under common control with DGLLC (“DGLLC
Affiliate”) whose size and mining expertise is at least that of DGLLC, without the consent of TKC. No other assignment by DGLLC
shall be effective without the written consent of TKC, provided that such consent shall not be unreasonably withheld. TKC agrees not
to withhold such consent if the assignee agrees to assume the obligations of this Agreement in writing at the time of such an Assignment
and if the assignee is as financially responsible and knowledgeable and experienced as DGLLC in exploring, developing, and operating
mining properties of the type covered by this Agreement and is as financially capable of indemnifying others (including but not limited
to TKC) from claims or liabilities arising out of or resulting from such activities. TKC may withhold consent if there are any outstanding
or unfulfilled obligations by DGLLC unless the assignee is capable of and willing to assume responsibility for such obligations. No assignment
by either TKC or DGLLC shall be effective unless the assignee has met with both TKC and DGLLC and acknowledges in writing that: (i) it
understands its obligations under this Agreement; and (ii) it assumes the assignor’s rights and obligations under the Bidder’s
Preference Agreement.
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(b)
Should this Agreement, or an assignment by either Party, involve the division of ownership in the Surface or in an interest in
this Agreement, the parties involved with the Agreement or assignment will designate a person to be the sole representative of the interests
under this Agreement of either “TKC” or “DGLLC” as the case may be. If this person represents TKC, DGLLC shall
be responsible for making all required payments, and for addressing all other required notices and communications, only to this person.
If this person represents DGLLC, such persons will be responsible for the tender to all required payments to TKC and TKC shall be required
to communicate only with this person in matters concerning this Agreement.
11.4 Memorandum
for Recording. This Agreement shall not be recorded by a Party without the other Party’s prior written consent. If requested
by either Party, the Parties agree to execute a written memorandum of even date herewith sufficient to be entitled to be recorded under
the laws of Alaska, and which shall recite that all of their right, title, and interest in and to the Surface are held subject to this
Agreement.
11.5 Laws
and Regulations; Severability; and Force Majeure. This Agreement shall be construed and interpreted in accordance with, and governed
and enforced in all respects by, the laws of the State of Alaska. Should any dispute involving this Agreement be litigated, such litigation
may only be initiated and tried in the courts of the State of Alaska, Third Judicial District at Anchorage, Alaska. If any party to this
Agreement be an entity other than a real person (such as a partnership, association or corporation), the party shall be required to comply
with all Alaska laws concerning the rights of the party to do business and hold an interest in real property in the State of Alaska.
In the event any provision of this Agreement is, or the operations contemplated hereby are, found to be inconsistent with, or contrary
to, any applicable law, rule, or regulation, the latter shall be deemed to control, and this Agreement shall be regarded as modified
accordingly and, as so modified, shall continue in full force and effect.
Except for the obligation to make payments under Section 4.1, 4.2,
4.5, 4.6, 4.7, 4.8 and 4.9 when due hereunder, the obligations of DGLLC under this Agreement shall be suspended, and it shall not be
deemed in default or liable for damages or subject to other remedies while DGLLC is prevented from complying herewith by acts of God,
the elements, riots, acts or failures to act on the part of federal or state agencies; inability to obtain necessary government approvals,
licenses or permits on reasonably acceptable terms (so long as DGLLC diligently proceeds with an appropriate challenge to such terms);
inability to secure materials or to obtain access to the Property or Surface; strikes; lockouts; damage to, destruction or unavoidable
shutdown of, necessary facilities; uncontrollable delays in transportation; or any other force, action or event on account of any eventuality
or condition, whether enumerated or not, beyond the reasonable control of DGLLC; provided, however, that settlement of strikes or lockouts
shall be entirely within DGLLC’s discretion; and provided, further, that DGLLC shall promptly notify TKC and shall exercise diligence
in an effort to remove or overcome the cause of such inability to comply.
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11.6 Notice.
Any notice, election, report or other correspondence required or permitted hereunder shall be in writing and (i) delivered personally
to an officer, the Managing Director, or the Secretary and General Counsel of the party to whom directed; or (ii) sent by registered
or certified United States mail, postage prepaid, return receipt requested; or (iii) sent by telegram, telex, or cablegram, with all
necessary charges fully prepaid, confirmation of delivery requested; or (iv) confirmed electronic mail sent to the addressee for notices
listed for each Party below. All such notices shall be addressed to the Party to whom directed as follows (electronic mail shall in addition
be addressed to the current and correct email address for the individual addressee official listed below):
DGLLC: Donlin Gold LLC
Attn: General Manager
4720 Business Park Blvd., Suite G25
Anchorage, AK 99503
Telephone No.
[***]
Facsimile No.:
[***]
Email:
[***]
with
copies to the following:
Barrick Gold
U.S. Inc.
Attn: General Counsel U.S.
460 W. 50 North, Suite 500
Salt Lake City, UT 84101
Telephone No.:
[***]
Facsimile No.:
[***]
Email:
[***]
and
NovaGold
Resources Alaska, Inc.
c/o NOVAGOLD USA, Inc.
Attn: CEO
201 S. Main Street, Suite 400
Salt Lake City, UT 84111
Telephone No.:
[***]
Facsimile No.:
[***]
Email:
[***]
TKC: The Kuskokwim Corporation
ATTN: President/CEO
4300 B Street, Suite 207
Anchorage, Alaska 99503
Email:
[***]
[***]
35
Either party may, from time to time, change its address for future
notices hereunder by notice in accordance with this Section 11.6. Notices, all other documents, and payment shall be complete and deemed
to have been given or made when mailed (except in the case of payments), or when delivered personally, or when sent by telegram, telex,
cablegram, or confirmed electronic mail.
11.7 Entire
Agreement. This Agreement and the Bidder’s Preference Agreement contain all of the representations and agreements between the
Parties with respect to the Surface and the subject matter thereof. No modification or waiver of the terms and conditions of this Agreement
shall be binding upon either party unless in writing, dated subsequent to the Effective Date of this Agreement, and executed by an authorized
representative of such party. No waiver by any party of a breach of any of the provisions of this Agreement shall be construed as a waiver
of any subsequent breach, whether of the same or a different character.
11.8 Title
Headings. The title headings of the respective articles and sections of this Agreement are inserted for convenience only, and shall
not be deemed to be a part of this Agreement or considered in construing this Agreement.
11.9 Further
Assurances. The Parties hereto agree that they will execute any and all other instruments that may be necessary or required to carry
out and effectuate any and all of the provisions of this Agreement.
11.10
Binding Effect. Subject to Section 11.3, this Agreement shall be binding upon, and shall inure to, the benefit of the Parties
hereto, their heirs, administrator, legal representatives, successors and assigns.
11.11
Discharge and Release of Claims Arising Prior to Effective Date. Each party hereby acknowledges this Agreement, as restated
and revised on the Effective Date, as replacing the Agreement executed between TKC and PDUS effective June 5, 1995. Each party hereby
releases and discharges the other party of and from all claims, demands, damages, or accountings whatsoever arising from or in respect
to the Prior Agreement, or the Property or Surface prior to the Effective Date.
11.12
No Third Party Beneficiaries. Nothing contained in this agreement shall be deemed or construed by the Parties or any third
party to create the relationship of principal and agent, partnership, joint venture, or any association between TKC and DGLLC other than
lessor and lessee of the Surface, respectively. This Agreement is made for the benefit of the Parties hereto and not for the benefit
of any third party.
36
Article
XII. PROCESSING OUTSIDE MINERALS ON THE SURFACE.
12.1 Outside
Minerals. As used herein, the term “Outside Minerals” means any and all ores, metals, minerals and materials found in,
on or under lands owned or leased by DGLLC other than the Property.
12.2 Milling.
As used in this Article XII, the terms “Milling” (and the related terms “Mill” or “Milled”) means
crushing, milling, processing, beneficiation, concentrating, vat leaching, treating, storing, and selling or otherwise disposing of Outside
Minerals.
12.3 Milling
Outside Minerals in a Mill Located on the Surface. TKC agrees that during the Term DGLLC may use any mill constructed on the Surface
to Mill Outside Minerals and may use any road, airstrip, port, watercourse or water body, or other transportation facility or means or
method of transportation located on the Surface to transport Outside Minerals on or over the Surface for such purpose.
12.4 Disposal
of Resulting Tailings and Waste Rock. During the Term, DGLLC may dispose of waste or tailings resulting from the Milling of Outside
Minerals in a manner consistent with the terms of this Agreement. All such disposal of waste or tailings resulting from such Milling
of Outside Minerals shall be strictly subject to the following material requirements of this Agreement: (i) all such disposal by DGLLC
shall be in the same manner and to the same extent it disposes of waste or tailings resulting from the milling of Valuable Minerals;
(ii) all such disposal by DGLLC shall be consistent with the terms of this Agreement, including any reclamation obligations; (iii) all
such disposal by DGLLC shall be in compliance with all applicable permits, authorizations, statutes, laws, regulations, and ordinances;
and (iv) before initiating any such disposal, DGLLC shall demonstrate to the reasonable satisfaction of TKC that there shall be, as a
result of such use, no material impact on mine closure (including tailings and waste disposal site closure), reclamation, or water quality,
during or after the Term of the Agreement.
12.5
Milled Tonnage Fee. The Milled Tonnage Fee described in Section 4.6 shall apply to and be paid by DGLLC to TKC for all
Outside Minerals Milled on the Surface.
12.6 This
Provision Shall Survive Sale of the Additional Surface Lands. DGLLC’s obligation to pay the Milled Tonnage Fee on Outside Minerals
Milled on the Surface shall survive any sale of the portion of the Surface on which the Mill is located, including, without limitation,
a sale of such portion of the Surface by TKC to DGLLC pursuant to Section 4.3.
12.7 No
Toll Milling. No Milling of Minerals on the Surface other than those from the Property or Outside Minerals as defined in Section
12.1 is allowed under this Agreement.
Article
XIII. DEFINITIONS.
13.1 “Advance
Minimum Payment” means the payment payable by DGLLC to TKC described in Section 4.8 of this Agreement.
13.2 “DGLLC
Affiliate” means, as stated in Section 11.3(a) of this Agreement, a company which controls, or is controlled by, or which is under
common control with DGLLC.
37
13.3 “Agreement”
means this Surface Use Agreement, as revised and restated as of the Effective Date.
13.4 “ANCSA”
means the Alaska Native Claims Settlement Act, as amended, 43 U.S.C. § 1601 et seq.
13.5 “Anniversary
Date” means the date one or more years following the original effective date of this Agreement prior to its revision and restatement,
that date being June 5, 1995.
13.6 “Bedrock”
shall mean all rock, fresh, altered, or weathered in place, which has not been moved to its present location by fluvial, glaciofluvial,
glacial or mass wasting process.
13.7 “Bidder’s
Preference Agreement” means the Bidder’s Preference Agreement, dated effective June 6, 2013, among Calista, TKC, and DGLLC.
13.8 “Commercial
Production” shall be deemed to have commenced on the first day following the date on which the first ore is refined and poured
at any facility; however, minor refining of ore products for metallurgical tests, pilot projects and facility start-up testing shall
not constitute Commercial Production.
13.9 “Common
Variety Minerals” means sand, silt, stone, gravel, pumice, pumicite, cinders, and petrified wood.
13.10 “Effective
Date” means the effective date of this revised and restated Agreement as specified in the introductory paragraph of this Agreement.
13.11
“Equipment” means all buildings, structures, facilities, machinery, tools, equipment, and other property of DGLLC
erected or placed within or upon the portion or portions of the Surface or Property to which termination of this Agreement applies, excepting
only track, timber, chutes and ladders in place for underground support and entry, if any.
13.12
“Fair Market Value” is defined and calculated according to Section 4.3(f) of this Agreement.
13.13
“Feasibility Study” means a written report prepared by DGLLC or a third party detailing an analysis of the economic
and commercial viability of conducting operations for the production and sale of Valuable Minerals from the Property that recommends
that all or some part of the Property shall be brought into commercial production, and includes any revisions, updates or modifications
of that report.
13.14
“Information relating to this Agreement” means this Agreement and the terms and conditions hereof, and all data, reports,
records and other data or information (“Information”) relating to this Agreement, including any data provided by TKC.
13.15
“Milled Tonnage Fee” means the fee payable by DGLLC to TKC on milled tonnage of ore as described in Section 4.6 of
this Agreement.
38
13.16
“Net Proceeds Payment” means the net proceeds payment payable by DGLLC to TKC as calculated pursuant to Exhibit C
attached hereto, and as described in Section 4.7 of this Agreement.
13.17
“Placer Deposit” as used in this Agreement shall mean all alluvial deposits, sand, gravel and detrital material, including
any valuable minerals contained therein, which lie physically on, or above, Bedrock.
13.18
“Project” means a development and mining operation described in a Feasibility Study.
13.19 “Property”
means the lands described in Exhibit A of the Lease and to this Agreement, as the same may be amended from time to time under the Lease,
and by this reference incorporated herein (the “Property”), except as provided in Section 6.6 of the Lease.
13.20
(a)
“Surface” means the surface estate to that portion of the Property and additional surface estate to which TKC has
received a patent or interim conveyance or selected pursuant to ANCSA, except as provided in Section 1.2, described in Exhibit A-3. Exhibit
A-3 shall be amended from time to time to conform to any changes in the status of selected or excluded lands as described in Section
1.2. The surface estate included in the Surface may otherwise be modified by written agreement of TKC and DGLLC amending Exhibit A-3.
(b)
If TKC or DGLLC provides written notice to the other party describing a proposed amendment of Exhibit A-3 and the other party
does not deliver a written response to the proposed amendment within thirty (30) days after receipt of the notice, then that party shall
be deemed to have agreed to the proposed amendment and obligated to promptly execute a written agreement so amending Exhibit A-3.
(c)
TKC or DGLLC shall not unreasonably withhold or condition agreement to an amendment to Exhibit A-3 proposed by the other party
to add or delete TKC surface estate to conform to any amendment from time to time of Exhibit A of the Lease as described in Section 13.19
that adds or deletes Calista subsurface estate underlying TKC surface estate. Provided, however, TKC or DGLLC shall not be obligated
under this paragraph (c) to agree to any addition of TKC surface estate (i) located within a five (5) mile (5280 feet per mile, measured
horizontally) radius of the junction of the Kuskokwim River and the Crooked Creek tributary stream (excepting any additional surface
estate that may be required for the Port and Port Road site and route described in Section 8.3 or the temporary use facilities described
in Exhibit E); (ii) that exceeds 320 acres in a single parcel that is not contiguous to the Surface as described in Exhibit A-3 on the
Effective Date; or (iii) to more than 6,400 acres of cumulative net total additions of TKC surface estate after the Effective Date.
13.21
“Valuable Minerals” means all ores, metals, minerals and materials (excluding minerals of any kind contained in a
Placer Deposit, Common Variety Minerals, and all deposits of coal, oil and gas, and associated hydrocarbons) found in, on, or under the
Property.
39
IN WITNESS WHEREOF, the Parties hereto have executed and delivered
this Agreement effective as of the day and year first written above.
DONLIN GOLD LLC
THE KUSKOKWIM CORPORATION
By
/s/ Stan Foo
By
/s/ Maver Carey
Its President and General Mgr.
Its President / CEO
STATE OF ALASKA )
) ss:
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on 6th day of June, 2014,
before me, the undersigned, a Notary Public in and for the State of Alaska, duly commissioned and sworn, personally appeared Maver Carey
to me known to be the Pres / CEO of The Kuskokwim Corporation, the corporation that executed the foregoing instrument, and acknowledged
the said instrument for the uses and purposes therein mentioned, and on oath stated that he/she is authorized to execute the instrument
on behalf of said corporation, and the seal affixed is the corporate seal of said corporation.
WITNESS my hand and official seal hereto affixed
the day and year in this certificate above written.
/s/ Amy
Jarrell
Notary Public in and for Alaska
My commission expires: 5-13-2017 (SEAL)
STATE OF ALASKA )
) ss.
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this 6th day of June,
2014, before me, the undersigned, a Notary Public in and for the State of Alaska, duly commissioned and sworn, personally appeared Stan
Foo, to me known to be the Pres/CEO of Donlin Gold LLC, the limited liability company that executed the foregoing instrument, and acknowledged
the said instrument for the uses and purposes therein mentioned, and on oath stated that he is authorized to execute the instrument on
behalf of said company.
WITNESS my hand and official seal hereto affixed
the day and year in this certificate above written.
/s/ Amy Jarrell (SEAL)
Notary Public in and for Alaska
My commission expires: 5-13-2017
40
EXHIBIT A THE PROPERTY
AND SURFACE
The Property
The following real property, located in the Kuskokwim and/or Mt. McKinley
Recording Districts, Seward Meridian, Alaska:
1. LANDS FOR MINING AND MINING RELATED PURPOSES.
1Township
22 North, Range 48 West
Sections 5 & 6
2Township
22 North, Range 49 West
Sections 1, 2, 3, 10, 11
3Township
23 North, Range 48 West
Sections 5, 6, 7, 8
16, 17, 18, 19, 20, 21
28, 29, 30, 31, 32, 33
4Township
23 North, Range 49 West
Sections 1, 10, 11, 12, 13, 14, 15
21, 22, 23, 24, 25, 26, 27, 28
33, 34, 35, 36
Township 22 North, Range 48 West
Sections 4, 7, 8, 9, 17, 18, 19, 20
Township 22 North, Range 49 West
Sections 12, 13, 24
Sections4, 5, 8, 9, 14, 15, 16, 17, 18
N 1/2 of Section 19, N 1/2 of Section 20, 21 (all except SW 1/4),
Sections 22, 23
Township 23 North, Range 48 West
Sections 3, 4, 9, 10, 15, 22, 27, 34
Township 23 North, Range 50 West
South 1/2 of Section 33
2. LANDS FOR WIND TURBINE TOWER, ACCESS, ROADWAY, MATERIAL
SITE, PORT SITE, AND EQUIPMENT LAYDOWN USES.
Township 21 North, Range 50 West
15 acres within Section 5 for wind turbine towers and additional access easement, exact location to be determined after construction
with a survey
5 acres within Section 6 for wind turbine towers and additional access easement, exact location to be determined after construction with
a survey
1 Included in original Lease
(05/01/95) with Placer Dome U.S. Inc.
2 Included in original Lease
(05/01/95) with Placer Dome U.S. Inc.
3 Included in original Lease
(05/01/95) with Placer Dome U.S. Inc.
4 Included in original Lease
(05/01/95) with Placer Dome U.S. Inc.
41
Township 22 N, Range 50 West
10 acres within Section 35 for wind turbine towers and additional access easement, exact location to be determined after construction
with a survey
35 acres within Section 36 for wind turbine towers and additional access easement, exact location to be determined after construction
with a survey
Township 21 North, Range 48 West
400’ wide roadway of approximately 48 acres within Section 31 (Lots 1 and 2), exact location to be determined after construction
with a survey
Township 22 North, Range 49 West
400’ wide roadway of approximately 48 acres within Section 7, exact location to be determined after construction with a survey
Township 22 North, Range 50 West
400’ wide roadway of approximately 48 acres within Section 12, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 13, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 34, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 35, exact location to be determined after construction with a survey
Township 21 North, Range 50 West
400’ wide roadway of approximately 48 acres within Section 2, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 3, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 4, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 5, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 6, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 9, exact location lobe determined after construction with a survey
Township 19 North, Range 55 West
400’ wide roadway of approximately 48 acres within Section 31, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 30, exact location to be determined after construction with a survey
42
Township 18 North, Range 55 West
400’ wide roadway of approximately 48 acres within Section 6, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 7, exact location to be determined after construction with a survey
Township 18 North, Range 58 West
400’ wide roadway of approximately 48 acres within Section 25, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 26, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 32, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 33, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 34, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 35, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 36, exact location to be determined after construction with a survey
Township 17 North, Range 58 West
400’ wide roadway of approximately 48 acres within Section 5, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 6, exact location to be determined after construction with a survey
Township 22 North, Range 50 West
20 acre material site within Section 12, exact location to be determined after construction with a survey
20 acre material site within Section 13, exact location to be determined after construction with a survey
20 acre material site within Section 35, exact location to be determined after construction with a survey
Township 21 North, Range 50 West
20 acre material site within Section 2, exact location to be determined after construction with a survey
20 acre material site within Section 4, exact location to be determined after construction with a survey
20 acre material site within Section 6, exact location to be determined after construction with a survey
20 acre material site within Section 9, exact location to be determined after construction with a survey
43
Township 21 North, Range 48 West
20 acre material site within Section 31 (Lots 1 and 2), exact location to be determined after construction with a survey
Township 19 North, Range 55 West
20 acre material site within Section 30, exact location to be determined after construction with a survey
20 acre material site within Section 31, exact location to be determined after construction with a survey
Township 17 North, Range 58 West
Port site containing approximately 100 acres within Sections 5 and 6, exact location to be determined after construction with a survey
Township 21 North, Range 48 West
55 acre parcel of land for the purpose of constructing an equipment laydown area within Section 31 (Lots 1 and 2), exact location to
be determined after construction with a survey
Lands Selected by The Kuskokwim Corporation under the
Alaska Native Claims Settlement Act but not Conveyed:
Township 18 North, Range 56 West
400’ wide roadway of approximately 48 acres within Section 11, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 12, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 13, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 14, exact location to be determined after construction with a survey
Township 18 North, Range 56 West
20 acre material site within Section 11, exact location to be determined after construction with a survey
20 acre material site within Section 12, exact location to be determined after construction with a survey
20 acre material site within Section 14, exact location to be determined after construction with a survey
44
Attached hereto are two maps (A-1 and A-2) showing the boundaries
of the Property.
45
46
EXHIBIT A-3
The Surface
The surface estate of the following real property, located in the
Kuskokwim and/or Mt. McKinley Recording Districts, Seward Meridian, Alaska:
1. LANDS FOR MINING AND MINING
RELATED PURPOSES.
5Township
22 North, Range 49 West
Sections 2, 3, 10, 11
6Township
23 North, Range 48 West
Sections 5, 6, 7, 8, 17, 18, 19, 20, 29, 30, 31
7Township
23 North, Range 49 West
Sections 1, 10, 11, 12, 13, 14*, 15, 21, 22, 23*, 24, 25, 26, 27, 33, 34, 35, 36 (*excluding from TKC’s surface estate a 13.91
acre parcel located within
unsurveyed Sections 14 and 23 as described in the Record of Survey recorded as
Plat 96-1 in the Kuskokwim Recording District on January 17, 1996)
Township 22 North, Range 48 West
Sections 31
Township 22 North, Range 49 West
Sections 4, 5, 6, 7, 8, 9, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 26, 27, 28, 29, 30,
31, 32, 33, 34, 35, 36
Township 22 North, Range 50 West
Sections 1, 12, 13
2. LANDS FOR ACCESS, ROADWAY, MATERIAL SITE, PORT SITE, AND EQUIPMENT LAYDOWN
USES.
Township 20 North, Range 49 West
Port site containing approximately 100 acres within Section 29, exact location to be determined after construction with a survey
Township 20 North, Range 49 West
400’ wide roadway of approximately 48 acres within Section 29, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 30,
exact location to be determined after construction with a survey
5 Included in original TKC Surface Use Agreement (06/05/95) with Placer
Dome U.S. Inc.
6 Included in original TKC Surface Use Agreement (06/05/95) with Placer
Dome U.S. Inc.
7 Included in original TKC Surface Use Agreement (06/05/95) with Placer
Dome U.S. Inc.
47
Township 21 North, Range 50 West
400’ wide roadway of approximately 48 acres within Section 2, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 3, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 4, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 5, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 6, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 9, exact location to be determined after construction with a survey
Township 21 North, Range 50 West
20 acre material site within Section 2, exact location to be determined after construction with a survey
20 acre material site within Section 4, exact location to be determined after construction with a survey
20 acre material site within Section 6, exact location to be determined after construction with a survey
20 acre material site within Section 9, exact location to be determined after construction with a survey
Township 22 North, Range 50 West
400’ wide roadway of approximately 48 acres within Section 34, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 35, exact location to be determined after construction with a survey
400’ wide roadway of approximately 48 acres within Section 36, exact location to be determined after construction with a survey
Township 22 North, Range 50 West
20 acre material site within Section 35, exact location to be determined after construction with a survey
20 acre material site within Section 36, exact location to be determined after construction with a survey
48
Attached hereto is map A-3 showing the boundaries of the Surface.
49
EX-10.4 — EXHIBIT 10.4
EX-10.4
Filename: tm2625949d2_ex10-4.htm · Sequence: 5
Exhibit 10.4
SURFACE LEASE AND ASSIGNMENT OF MINING
LEASE
BY AND AMONG
SPENCER W. LYMAN and CAROLYN MOTHERWAY
LYMAN,
LYMAN RESOURCES IN ALASKA, INC.,
an Alaska corporation
AND
DONLIN GOLD LLC,
a Delaware limited liability company
Dated and Effective
as of
May
9, 2012
TABLE OF CONTENTS
Page
1. Definitions
2
2. Lease
of the Lyman Lands and Assignment of the Lyman Leasehold
2
2.1 Lease
of the Lyman Lands
2
2.2 Assignment
of the Lyman Leasehold
2
3. Suspension
of the Lyman Placer Lease
2
4. Lease
Term
2
4.1 Primary
Term
2
4.2 Secondary
Term
2
5. Rent
3
5.1 Primary
Term
3
5.2 Secondary
Term
3
5.3 Gold
Value Adjustment of Rent Payments
3
5.4 Guaranty
3
6. Additional
Payments to the Lymans
3
6.1 Relocation
Compensation
3
6.2 Transport
of Equipment and Other Personal Property
3
7. Maintenance
of the Lymans’ Title Generally
4
7.1 Real
Property Taxes
4
7.2 No
Liens Upon or Affecting the Lymans’ Rights
4
8. Conditions
4
8.1 Calista
Consent
4
8.2 The
Lymans to Vacate the Real Property
5
-i-
9. No
Duty To Maintain or Replace Improvements or Fixtures
5
10. Dominance
of Donlin Lode Lease
5
11. Representations
and Warranties
6
11.1 Representations
and Warranties of the Lymans
6
11.2 Representations
and Warranties of Donlin
8
12. Title
Defects; Defense of Title
8
12.1 Title
Defects
8
12.2 Defense
of Title
8
13. Operations
8
13.1 Generally
8
13.2 Compliance
With Laws
8
13.3 Governmental
Approvals
8
14. Annual
Visits
9
15. Indemnification
9
15.1 Indemnification
of the Lymans by Donlin
9
15.2 Indemnification
of Donlin by the Lymans
9
16. Insurance
10
17. Discharge
of Obligations by Donlin
10
18. Voluntary
Termination By Donlin
10
19. Lymans’
Remedies for Material Breach
10
20. Other
Donlin Rights and Obligations
11
20.1 Reclamation
and Reconveyance
11
20.2 Surrender
of Possession
11
20.3 Government
Regulatory Requirements
11
20.4 Suspension
of Lyman Placer Lease
12
-ii-
21. Transfers;
Binding Effect
12
21.1 Generally
12
21.2 The
Lymans’ Right to Re-Occupy
12
21.3 Notice
of Transfer
12
21.4 Transfers
of Less Than All of a Party’s Interest
12
21.5 No
Release
12
21.6 Binding
Effect
12
21.7 Non-Disturbance,
Quiet Enjoyment
13
22. Eminent
Domain
13
23. Confidentiality
13
23.1 Generally
13
23.2 Exceptions
13
24. Force
Majeure
14
25. Recording
Memorandum of Lease
14
26. Notices,
Payments, and Delivery
14
26.1 Written
Notices
14
26.2 Payments;
Single Agent
14
26.3 Delivery
15
27. Arbitration;
Mediation
16
27.1 All
Disputes to be Resolved by Arbitration
16
27.2 Mediation
16
28. General
Provisions
16
28.1 Entire
Lease
16
28.2 Modification
of Lease
16
28.3 Waiver
16
-iii-
28.4 Remedies
17
28.5 Severability
17
28.6 Governing
Law
17
28.7 Counterparts
17
28.8 Further
Actions
17
28.9 Paragraph
Headings
17
28.10 Interpretation
17
28.11 Survival
17
EXHIBITS
A
–
Definitions
B-1
–
Lyman
Lands
B-2
–
Lyman
Placer Lease
B-3
–
Calista
Consent
C
–
Form
of Guaranty
D
–
Environmental
Matters
E
–
Form
of Memorandum of Lease
F
–
Permits
G
–
Equipment
List
-iv-
SURFACE LEASE AND ASSIGNMENT OF MINING
LEASE
THIS
SURFACE LEASE AND ASSIGNMENT OF MINING LEASE (this “Lease”) is made and entered into effective as of
May 9, 2012 (the “Effective Date”), by and among:
SPENCER W. LYMAN and CAROLYN MOTHERWAY LYMAN, each acting
in his or her individual capacity and, where any property subject to this Lease is held by them. as tenants by the entirety, acting in
their capacity as husband and wife, whose address is set forth below,
LYMAN
RESOURCES IN ALASKA, INC., an Alaska corporation, the address of which is set forth below (Spencer W. Lyman, Carolyn Motherway Lyman,
and Lyman Resources in Alaska, Inc. are collectively referred to herein as the “Lymans”), and
DONLIN
GOLD LLC (“Donlin”), a Delaware limited liability company, owned 50/50 by Barrick Gold U.S. Inc. (“Barrick”)
and Nova Gold Resources Alaska, Inc., (“Nova”) the address of which is set forth below
(each
of the Lymans and Donlin, individually, a “Party”, and collectively, the “Parties”).
RECITALS
The Lymans own (1) the Lyman Lands (as hereinafter defined and described
in Exhibit A and Exhibit B-1) and (2) the Lyman Leasehold (as hereinafter defined and described in Exhibit A and
Exhibit B-2);
The Lymans desire to lease exclusively to Donlin, and Donlin desires
to lease exclusively from the Lymans, the Lyman Lands for the purposes stated herein according to the terms and conditions of this Lease;
and
The Lymans desire to assign exclusively to Donlin, and Donlin desires
to assume exclusively from the Lymans, all right, title and interest in and to the Lyman Leasehold for the purposes stated herein, including
suspension of the Lyman Placer Lease during the Lease Term and as otherwise described herein, according to the terms and conditions of
this Lease.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereby agree as follows:
AGREEMENT
1. Definitions.
Each term listed in Exhibit A shall have the meaning
ascribed to it in Exhibit A, attached hereto and made a part hereof.
2.
Lease of the Lyman Lands and Assignment of the Lyman Leasehold.
2.1
Lease of the Lyman Lands. Subject
to the provisions contained in this Lease, the Lymans hereby grant and lease exclusively to Donlin, the Lyman Lands for the purposes
of exploring for, developing, working, mining, milling, beneficiating, concentrating, extracting, leaching, treating, smelting, refining,
storing, removing, transporting, and selling or otherwise disposing of any and all Minerals situated in the Area of Interest, or such
other purposes as Donlin may determine from time to time, to have and to hold, for the Lease Term.
2.2
Assignment of the Lyman Leasehold.
Subject to the provisions contained in this Lease, and effective commencing on the Departure Date, the Lymans hereby absolutely and unconditionally
assign and grant to Donlin, its successors and assigns, and Donlin hereby absolutely and unconditionally assumes from the Lymans, all
of the Lymans’ right, title and interest in and to the Lyman Leasehold, to have and to hold, for the period commencing on the Departure
Date and continuing for the duration of the remainder of the Lease Term and until completion of Donlin’s obligations under Sections
20.1 and 20.2.
3.
Suspension of the Lyman Placer Lease.
The Lymans and Donlin agree, with the consent
of Calista as described in Section 8.1, and as further described in Section 20.4, to the suspension in its entirety of the Lyman Placer
Lease commencing on the Departure Date and continuing for the duration of the remainder of the Lease Term and completion of Donlin’s
obligations in Sections 20.1 and 20.2.
4.
Lease Term.
4.1
Primary Term. The primary term of
this Lease shall begin on the Effective Date and continue and be for twenty (20) years following the Rent Commencement Date (the “Primary
Term”).
4.2
Secondary Term. The secondary term
of this Lease shall be for so long as Donlin Operations are being conducted in the Area of Interest following the Primary Term (the “Secondary
Term”), unless this Lease is sooner terminated in accordance with Sections 18 or 22, whereupon the Secondary Term shall
end upon such termination. The Primary Term together with the Secondary Term shall be referred to herein as the “Lease Term.”
2
5.
Rent.
5.1
Primary Term.
(a) For
the Primary Term, the rent shall be a total of [***] due and payable in annual installments
of [***] as incremented by the Cost Adjustment Factor, beginning within five (5) days of
Donlin’s receipt of notice that the Lymans have vacated and terminated their noncommercial
occupancy of the Real Property pursuant to Section 8.2 (the “Rent Commencement
Date”), and thereafter, on or before each anniversary of the Rent Commencement
Date.
(b) In
the event that a material breach of this Lease by Donlin occurs after opportunity and failure
to cure as described in Section 19, at the election of the Lymans by written notice to Donlin,
the entire outstanding balance of rent otherwise due and payable during the Primary Term
([***] less installments already paid, as adjusted by the CPI) shall become due and payable
within twenty (20) days of receipt by Donlin of such written notice.
5.2
Secondary Term. For the Secondary
Term, the rent shall be [***] per year as incremented by the Cost Adjustment Factor, due and payable in annual installments on or before
each anniversary of the Rent Commencement Date.
5.3
Gold Value Adjustment of Rent Payments.
Notwithstanding the foregoing, following the commencement of Donlin shipping commercial quantities of valuable minerals from the Area
of Interest, the rent due every year thereafter during the Lease Term shall be the greater of [***] per year as incremented by the Cost
Adjustment Factor or the value of [***] (“Gold Value”), due and payable on or before each anniversary
of the Rent Commencement Date.
5.4
Guaranty. As additional security for
the faithful performance by Donlin of all rent payments required pursuant to this Section 5, Barrick and Nova (each, a “Guarantor”,
and collectively, the “Guarantors”) have each executed and delivered to the Lymans a guaranty (the “Guaranty”)
in the form attached hereto as Exhibit C.
6.
Additional Payments to the Lymans.
6.1
Relocation Compensation. As additional
consideration for the Lymans to enter into this Lease, Donlin shall pay the Lymans a one-time sum of [***] upon execution of this Lease
by the Parties on the Effective Date, as full compensation for relocation of the business and reparations for all costs incurred as the
result of such relocation and the Donlin purchase of the Lyman family home structure located on the Lyman Lands.
6.2
Transport of Equipment and Other Personal Property.
Prior to the Departure Date, Donlin shall facilitate the transporting for airlift of such equipment and materials as the Lymans may reasonably
direct, including providing such reasonable assistance as may be necessary to transport such equipment and material to the airstrip or
airstrips maintained by Donlin for loading onto such aircraft as may be engaged by the Lymans consistent with the purposes of this Section
6.2, all in accordance with such standards and rules as Donlin would otherwise impose on the transport of equipment and materials for
its own use. The Parties agree that the equipment listed in Exhibit G attached hereto shall remain upon the Real Property and
not require any transport facilitation by Donlin. No later than thirty (30) days prior to the Departure Date, the Lymans shall leave
such equipment at one or more locations upon the Real Property and in a condition reasonably acceptable to Donlin. Upon Donlin’s
written acceptance of such equipment, the Lymans shall transfer title to and possession of such equipment to Donlin free and clear of
all Liens of any kind whatsoever, without further consideration from Donlin beyond the sum paid by Donlin pursuant to Section 6.1.
3
7.
Maintenance of the Lymans’ Title Generally.
7.1
Real Property Taxes. During the Lease
Term commencing with the Departure Date and continuing until Donlin delivers a quitclaim deed reconveyance and reassignment of the Lyman
Leasehold in accordance with the Calista Consent to the Lymans pursuant to Section 20.1, Donlin shall pay all real property taxes and
assessments levied upon the Real Property by the State of Alaska or any other Governmental Authority (“Real Property
Taxes”). The Parties shall prorate any Real Property Taxes for any tax year in which this Section 7 is in effect for only
a portion of such tax year. Donlin shall have the right to contest in good faith the validity or the amount of any such Real Property
Taxes and may withhold payment so long as such withholding does not disrupt title to any interest in the Real Property.
7.2
No Liens Upon or Affecting the Lymans’ Rights.
Donlin (a) shall be solely responsible for payment of all labor performed upon or materials furnished to the Real Property at the request
of Donlin, (b) shall keep the Real Property free and clear of any and all liens arising out of or resulting from Donlin Operations, including
but not limited to, the performance of labor or the furnishing of materials to the Real Property, except those liens arising by operation
of law for which payment is not yet due, and (c) shall post and record notices of nonresponsibility in the name of and for the benefit
of the Lymans pursuant to AS 34.35.065 and AS 34.35.150 and any other similar applicable laws. Any Party may contest the validity of
any such lien that may be filed.
8.
Conditions.
8.1
Calista Consent. The Parties have
obtained the consent of Calista in a form reasonably satisfactory to both parties (the “Calista Consent”)
to (1) assign the Lyman Leasehold to Donlin, pursuant to Section XII of the Lyman Placer Lease, (2) suspend the Lyman Placer Lease in
its entirety, except certain Donlin minimum annual payment requirements specified in the Calista Consent, the assignment and suspension
each commencing with the Departure Date and continuing for the duration of the remainder of the Lease Term and completion of Donlin’s
obligations under Sections 20.1 and 20.2; and 3) reassign the Lyman Leasehold from Donlin to the Lymans under Section 20.1. The Calista
Consent is attached hereto as Exhibit B-3.
4
8.2
The Lymans to Vacate the Real Property.
The Lymans shall vacate the Real Property at a time of their choosing (the “Departure Date”), but no
later than three (3) years after the Effective Date (the “Departure Deadline”). Notwithstanding the foregoing,
nothing contained herein shall be deemed to require the Lymans to terminate their noncommercial occupancy of the homestead located on
the Lyman Lands prior to July 15, 2016 unless such occupancy conflicts with Donlin’s construction activities, operations or safety
guidelines or applicable regulatory requirements. During the period between the Departure Date and the Rent Commencement Date, the Lymans
shall be deemed uncompensated caretakers of the Real Property, which shall not be construed to create any employer-employee or other
relationship between any of the Lymans and Donlin other than lessor-lessee. Prior to the Departure Date, the Lymans shall complete reclamation
of the Real Property and resolve any liabilities related to occupancy and activities occurring on the Real Property, except for Donlin
Operations under this Lease; provided, however, reclamation required under this provision shall be limited to the minimum amount required
by law and then only to the extent that it cannot be waived under applicable law based on Donlin anticipated activities on the Real Property.
Following the Lymans’ completion of their reclamation obligations under this Section 8.2, the Parties shall execute a waiver and
release agreement in a form reasonably acceptable to the Parties. The Lymans’ occupancy and activities between the Effective Date
and the Rent Commencement Date, and their uncompensated caretaker status between the Departure Date and Rent Commencement Date, shall
be non-exclusive to Donlin Operations under this Lease.
9.
No Duty To Maintain or Replace Improvements or Fixtures.
Donlin shall have no duty to the Lymans to maintain
or replace during the Lease Term any buildings, outbuildings, roads, airstrips, dams, impoundments, ditches, and other improvements of
a permanent nature or fixtures or personal property situated upon the Real Property on the Departure Date. Following the Departure Date
for the Lyman Leasehold, and following the termination of the Lymans’ noncommercial occupancy for the Lyman Lands, Donlin may alter
or destroy any such improvements, fixtures or personal property as Donlin determines in its sole discretion to be necessary or appropriate
for its operations or occupancy. Donlin shall not otherwise be required to maintain structures or property that remain on the Real Property,
or to otherwise maintain or reclaim the Real Property beyond that described in Section 20, and no statutory or common law concepts of
waste shall apply to Donlin’s obligations under this Lease, beyond statutory reclamation requirements. The rent payments described
in Section 5 shall be deemed to be full payment to the Lymans for any damages which may be caused to the Real Property by Donlin Operations
under this Lease.
10.
Dominance of Donlin Lode Lease.
The rights, titles, and interests now or hereafter
granted to Donlin under the Donlin Lode Lease shall be the dominant interest respecting the Real Property.
5
11.
Representations and Warranties.
11.1
Representations and Warranties of the Lymans.
Each of the Lymans severally represents and warrants to Donlin and its successors and assigns on the Effective Date (unless a representation
or warranty speaks as of a different date) as follows:
(a) Organizational
Status; Power and Authority. Lyman Resources in Alaska, Inc. is a corporation duly
organized, validly existing, and in good standing under the laws of the State of Alaska.
Each of the Lymans has all the requisite power and authority to carry on their business as
it is now being conducted and to own or lease and operate their properties as, and in the
places where, such business now is conducted and where such properties now are owned or leased
and operated. Each of the Lymans has all the requisite power and authority to execute and
deliver this Lease. Each of the Lymans has all the requisite power and authority to perform
their obligations under this Lease. The execution, delivery and performance of this Lease
have been duly authorized by all necessary action on the part of the Board of Directors of
Lyman Resources in Alaska, Inc. and its shareholders.
(b) Duly
Executed. This Lease has been duly executed and delivered on behalf of each of the
Lymans.
(c) No
Breach, Etc. The execution, delivery and performance of this Lease by the Lymans
does not and will not result in any conflict with or breach or violation of or default under
the articles of incorporation or bylaws of Lyman Resources in Alaska, Inc. or any agreement
or document to which any of the Lymans is a party.
(d) Litigation.
No action, suit, proceeding, or governmental investigation is pending or, to Lymans’
knowledge, threatened against any of the Lymans which (1) challenges or may challenge the
validity of this Lease, (2) seeks to enjoin or otherwise restrain the transactions contemplated
herein, or (3) is reasonably likely to have a material adverse effect upon this Lease or
the value of any of the Real Property. No order, judgment, injunction or decree of any Governmental
Authority is outstanding against the Lymans or the Real Property that, individually or in
the aggregate, would have any effect referred to in the foregoing clauses (1), (2), or (3).
(e) Title
to Assets. Except as set forth below in this Section 11.1(e) ,
(1) title
to the Lyman Lands is vested in Spencer W. Lyman and Carolyn Motherway Lyman free and clear
of any liens, encumbrances, or other interests of third parties except as disclosed in the
interim conveyance or patent by which TKC acquired said surface estate from the United States;
(2) title
to the Lyman Leasehold is vested in Lyman Resources in Alaska, Inc. free and clear of any
liens, encumbrances, or other interests of third parties except as disclosed in the Lyman
Placer Lease or the interim conveyances or patents by which (i) TKC acquired the surface
estate in and to the Real Property from the United States or (ii) Calista acquired the subsurface
estate in, to, and under the Real Property from the United States;
6
(3) to
the extent required, if at all, by Section XIV of the Lyman Placer Lease, the Lymans or Calista
have obtained the consent of TKC to surface access; and
(4) the
Real Property is otherwise in good standing.
(f) Inclusiveness
of Grant. The Real Property constitutes the entirety of the real property rights,
titles, and interests of the Lymans within the Area of Interest as of the Effective Date.
The grant, lease and assignment made by the Lymans to Donlin in this Lease encompasses all
of the real property or interests therein (including but not limited to appurtenant access
rights, water rights, or other assignable Permits); all of the buildings, outbuildings, roads,
airstrips, dams, impoundments, ditches, and other improvements of a permanent nature and
fixtures that are situated upon the Real Property. In the event that the Lymans do as of
the Effective Date own any additional real property right, title, and interest within the
Area of Interest which is not included in the Real Property, the Lymans agree to amend this
Lease to include such right, title, and interest in the grant, lease and assignment to Donlin
hereunder. In addition, insofar as the Lymans do not own any such rights and thus have not
made an effective grant of said rights to Donlin hereunder but Donlin now owns or hereafter
acquires such rights from one or more other persons, the Lymans hereby consent to the exercise
of such rights by Donlin as if said rights had been granted hereunder.
(g) Certain
Operational and Regulatory Matters. To the Lymans’ knowledge, (i) the Lymans’
use and occupancy of the Real Property (including but not limited to the conduct of placer
mining operations on the Real Property under the Lyman Placer Lease) has been undertaken
and conducted in compliance with the provisions of the Permits and applicable Legal Requirements,
and (ii) as of the Effective Date the information set forth in Exhibit D attached
hereto accurately describes (A) the current status of the Permits and all Environmental Matters,
(B) any abatement, reclamation, remediation, removal, or restoration remaining to be performed
in connection with any matters described in Exhibit D, (C) all bonds required to be
posted or replaced after the Effective Date under the Permits or in connection with the Environmental
Matters, and (D) any assessments, audits, investigations, or proceedings commenced by the
Lymans or others prior to the Effective Date relating to any matters described in Exhibit
D.
7
11.2
Representations and Warranties of Donlin.
Donlin represents and warrants to the Lymans on the Effective Date (unless a representation and warranty speaks as of a different date)
as follows:
(a) Organizational
Status; Power and Authority. Donlin is a limited liability company duly organized,
validly existing, and in good standing under the laws of the State of Delaware and is registered
to transact business in, and is otherwise in good standing under the laws of, the State of
Alaska. Donlin has all the requisite power and authority to execute and deliver this Lease.
Donlin has all the requisite power and authority to perform its obligations under this Lease.
The execution, delivery, and performance of this Lease by Donlin have been duly authorized
by all necessary action on the part of Donlin, its board, and its members.
(b) Duly
Executed. This Lease has been duly executed and delivered on behalf of Donlin.
12.
Title Defects; Defense of Title.
12.1
Title Defects. Following the Effective
Date, if title to any of the Real Property is inconsistent with the representations or warranties of the Lymans set forth in Section
11.1, Donlin may take any and all actions reasonably appropriate to cure any such defect, and all reasonable costs and expenses incurred
by Donlin in so doing shall be set off against any amounts owed to the Lymans by Donlin under this Lease. The Lymans shall assist Donlin,
to the extent necessary, in curing any such defect.
12.2
Defense of Title. The Lymans agree
to (a) defend title to the Real Property as represented and warranted in Section 11.1 against any and all defects or claimed defects
by any third party, (b) promptly notify Donlin of the nature and existence of any such defect or claimed defect, and (c) take any and
all actions reasonably requested by Donlin in defense of title to the Real Property as represented and warranted in Section 11.1.
13.
Operations.
13.1
Generally. All Operations upon the
Real Property shall be subject to and within the sole judgment and discretion of Donlin, subject only to Section 13.2; provided, however,
that Donlin shall exercise its judgment and discretion in good faith and shall conduct its Operations in a prudent miner-like manner
in accordance with sound mining and engineering practices.
13.2
Compliance With Laws. Donlin shall
comply with all applicable laws, rules, permits, approved plans of operations, approved reclamation plans, and orders of Governmental
Authorities pertaining to its Operations upon the Real Property; provided, however, that nothing herein shall prevent Donlin from disputing
any of the foregoing or defending itself against any alleged violation of any of the foregoing, all without being in breach of its obligations
under this Section 13.2.
13.3
Governmental Approvals. Donlin shall
be solely responsible for obtaining any and all licenses, permits, approvals, and other authorizations required by any Governmental Authority
which are applicable to its Operations in the Area of Interest. The Lymans in good faith shall give such consents to such Operations
as may be required by a Governmental Authority before it will issue a license, permit, approval, or other authorization to Donlin. In
addition, when reasonably requested to do so by Donlin, the Lymans shall support such Operations and otherwise assist Donlin in its efforts
to obtain approval of such Operations. Donlin shall reimburse the Lymans for any reasonable pre-approved out-of-pocket costs incurred
by the Lymans for such support or assistance.
8
14.
Annual Visits.
Once per calendar year during the Lease Term,
the Lymans (including for purposes of this Section 14, the Lyman Descendants and their spouses) may enter upon the Real Property for
family visits, following thirty (30) days’ written notice (and subject to the 7-day limit set forth below). For such visits, the
Lymans shall (a) enter at the Lymans’ own risk, (b) comply with such workplace rules as Donlin establishes from time to time for
visitors to the Area of Interest, and (c) not unreasonably interfere with the Operations of Donlin. Visits by the Lymans pursuant to
this Section 14 shall not exceed seven (7) nights per year for six (6) people, unless otherwise agreed by Donlin. Overnight stays must
be in employee housing or other housing provided by Donlin at a location of Donlin’s choosing. Donlin will not charge the Lymans
for room or board for such visits, but the Lymans shall be responsible for their own transportation costs to and from the Real Property.
The Lymans shall indemnify, defend, and hold harmless Donlin from and against any damage, loss, claim, demand, or liability arising out
of or resulting in any way from the exercise of rights under this Section 14 by the Lymans.
15.
Indemnification.
15.1
Indemnification of the Lymans by Donlin.
Except to the extent (if at all) prohibited by law, Donlin shall defend, indemnify, and save harmless the Lymans and all authorized representatives
of any of them from and against any and all losses, damages, liabilities, expenses, claims, and demands of whatsoever character, direct
or indirect, of third parties arising out of or in any way connected with lease of, operations, or conduct of activities on, in, under,
or respecting the Real Property from and after the Effective Date, excepting only such expenses, claims, and demands arising out of or
connected with the Lymans’ occupancy of the Real Property or Lymans’ conduct of activities from and after the Effective Date.
15.2
Indemnification of Donlin by the Lymans.
Except to the extent (if at all) prohibited by law, the Lymans shall defend, indemnify, and save harmless Donlin and all its authorized
representatives from and against any and all losses, damages, liabilities, expenses, claims, and demands of whatsoever character, direct
or indirect, of third parties arising out of or in any way connected with the lease of, operations, or conduct of activities on, in,
under, or respecting the Real Property prior to the Effective Date, and such expenses, claims, and demands arising out of or connected
with the Lymans’ occupancy of the Real Property or the Lymans’ conduct of activities or status as uncompensated caretakers
from and after the Effective Date.
9
16.
Insurance.
Donlin shall cause the Lymans to be named as additional
insureds on all such policies of insurance as it chooses to maintain with respect to the Real Property and its Operations therein.
17.
Discharge of Obligations by Donlin.
If any of the Lymans fail to perform or discharge
any of the obligations or liabilities on their part to be performed or discharged in accordance with the provisions of this Lease, Donlin
may, at its election and in its reasonable discretion, perform or discharge any such obligation or liability on behalf of the Lymans.
Donlin shall be entitled to enforce against the Lymans any such obligation or liability that Donlin performs or discharges pursuant to
this Section 17, and the Lymans shall indemnify Donlin in connection with any such obligation or liability that Donlin performs or discharges.
Any and all reasonable expenses incurred by Donlin in accordance with this Section 17 up to [***] shall be reimbursed to Donlin by the
Lymans or, at Donlin’s option, may be set-off against any amounts owed to the Lymans by Donlin pursuant to this Lease. Donlin’s
rights and the limit on the amount of reimbursement or setoff under this Section 17 shall not limit Donlin’s rights or remedies
under Section 15 or other Sections of this Lease.
18.
Voluntary Termination By Donlin.
Following the Primary Term, Donlin shall have
the right to terminate this Lease at any time upon the cessation of Donlin Operations upon the Real Property, excepting final reclamation
or post-reclamation activities that Donlin determines are consistent with Donlin completing its obligations under Sections 20.1 and 20.2,
including surrendering possession of the Real Property to the Lymans. Donlin shall exercise its right to terminate by giving written
notice of termination to the Lymans. Such termination shall be effective on the date such notice is delivered to the Lymans or on such
later date as may be set forth in the notice. Upon such termination, the Parties shall be relieved of all further rights, obligations,
and liabilities under this Lease, except for (a) rights, obligations, and liabilities incurred or accrued prior to the effective date
of termination, or (b) Donlin’s obligations under Sections 20.1 and 20.2 and any other rights, obligations and liabilities that
survive the termination of this Lease as expressly set forth herein.
19.
Lymans’ Remedies for Material Breach.
Donlin’s failure to perform any material
obligation according to the terms and provisions of this Lease shall, at the election of the Lymans, constitute a material breach of
this Lease unless cured as hereinafter provided. The failure by Donlin to make the specified minimum annual payments to Calista to maintain
the Lyman Leasehold prior to reassignment in accordance with the Calista Consent shall constitute a material breach of this Lease, unless
cured as hereinafter provided and in accordance with requirements for cure in the Lyman Placer Lease. In the event of any such material
breach and election by the Lymans, the Lymans shall first deliver to Donlin a written notice of its intention to declare a material breach
of this Lease, specifying the particular material breach. Donlin shall then have either (a) in the case of payments of rent due under
Section 5, twenty (20) days after delivery of such notice in which to make the required payment, or (b) in the case of all other material
obligations, a reasonable time under the circumstances (which in any event shall not be less than thirty (30) days after delivery of
such notice) in which to cure such specified breach in a diligent manner. If a specified material breach is not cured within the time
required, the Lymans may at their election provide written notice to Donlin that the entire outstanding balance of the rent payments
for the Primary Term is due and payable as provided in Section 5.1(b). If Donlin disputes that a material breach has occurred, it shall
deliver to the Lymans written notice to that effect, and the time to cure any such material breach shall be tolled while the dispute
is being resolved through arbitration or mediation as provided in Section 27. The Lymans’ remedies for material or other breach
of this Lease under Section 27 or otherwise shall be limited to monetary damages and relief and shall not extend to termination of this
Lease, eviction from or surrender of possession of any portion of the Real Property, or other specific performance by Donlin.
10
20.
Other Donlin Rights and Obligations.
20.1
Reclamation and Reconveyance. As soon
as practicable (but not more than three (3) years) after the termination or expiration of this Lease in accordance with the provisions
set forth herein, including (a) the voluntary termination of this Lease by Donlin pursuant to Section 18, or (b) the termination of this
Lease pursuant to Section 22, Donlin (a) shall complete all reclamation upon the Real Property as is required by any applicable laws,
rules, permits, approved plans of operations, approved reclamation plans, or orders of Governmental Authorities, and (b) shall execute,
acknowledge, and deliver to the Lymans a quitclaim deed reciting that the foregoing obligations have been satisfied and conveying to
the Lymans all of Donlin’s right, title, and interest in and to the Real Property, together with a reassignment of the Lyman Leasehold
in accordance with the Calista Consent. Donlin shall cause such deed to be recorded in the Kuskokwim Recording District, State of Alaska,
and Donlin shall pay any and all required recording fees relating thereto. Until the reclamation provided for herein is completed, Donlin
shall continue to make annual rent installment payments to the Lymans in accordance with Section 5; Provided, Donlin shall not be obligated
under any circumstance under this Section, Section 5 or other provision of this Lease to continue such annual rent payments for a total
of more than three (3) annual installment payments following the date of termination or expiration of this Lease, in addition to any
outstanding balance of rent due and payable during the Primary Term pursuant to Section 5 or Section 22.
20.2
Surrender of Possession. Upon completion
of Donlin’s reclamation activities and reconveyance following the termination or expiration of this Lease described in Section
20.1, Donlin shall promptly surrender possession of the Real Property to the Lymans and the Lymans shall have the right in accordance
with the Calista Consent to (a) re-occupy the Real Property, (b) terminate the suspension of the Lyman Placer Lease, and (c) reassume
all lessee rights under the Lyman Placer Lease, subject to the Lymans reassuming all lessee obligations under the Lyman Placer Lease
prospectively from the date that the suspension is terminated, and the consent required (if any) from Calista or TKC.
20.3
Government Regulatory Requirements.
The Donlin’s reconveyance and surrender of possession obligations under this Section 20 shall be subject to any continuing need
by Donlin to maintain possession or control of some or all of the Real Property to meet post-reclamation maintenance, monitoring or other
government regulatory requirements.
11
20.4
Suspension of Lyman Placer Lease.
Pursuant to Section 8.1 and Exhibit B-3, Calista has consented to the suspension in its entirety of the Lyman Placer Lease, excepting
certain Donlin minimum annual payment requirements specified in Exhibit B-3, effective commencing with the Departure Date and continuing
for the duration of the remainder of the Lease Term and completion of Donlin’s obligations in Sections 20.1 and 20.2, and has consented
to the reassignment of the Lyman Leasehold as described in Section 20.1 and Exhibit B-3.
21.
Transfers; Binding Effect.
21.1
Generally. Subject to the provisions
of this Section 21, the interests of any Party under this Lease may be sold, assigned, mortgaged, pledged, or otherwise transferred in
whole or in part at any time and from time to time.
21.2
The Lymans’ Right to Re-Occupy.
The Lymans’ right to re-occupy the Real Property and reassume placer mining rights and obligations as described in Section 20 may
be transferred in advance of Donlin’s surrender of possession under Section 20.2 only to the Lyman Descendants, unless written
consent to such transfer is first obtained from Donlin, which consent shall not be unreasonably withheld. Donlin shall in addition have
a right of first refusal on any proposed transfer regarding the Lyman Leasehold rights and obligations to a party other than to the Lyman
Descendants or Lyman Resources in Alaska, Inc., at the same price and other terms as the proposed transfer, exercisable by Donlin by
providing written notice to the Lymans within thirty (30) days of receiving written notice of the proposed transfer and its terms.
21.3
Notice of Transfer. No transfer shall
be binding upon the non-transferring Party unless written notice thereof describing the transfer and containing the name, address, telephone
number, and facsimile number (if any) required for purposes of Section 26 is delivered by the transferring Party to the non-transferring
Party.
21.4
Transfers of Less Than All of a Party’s Interest.
In the event of a transfer by a Party of less than all of that Party’s interest, the transferring Party and its transferee shall
act and be treated as one party. The Parties agree that in the event that payments due to the Lymans under this Lease are or become payable
to two or more parties, those parties shall notify Donlin of the name and address of a single agent or trustee to whom Donlin shall make
all payments due to the Lymans.
21.5
No Release. Unless otherwise agreed
by the Parties in writing, the transferring Party shall not be released from any obligations or liabilities under this Lease.
21.6
Binding Effect. This Lease shall run
with the lands and inure to the benefit of and bind the Parties hereto and their respective successors and assigns. This Lease is made
for the benefit of the Parties hereto and not for the benefit of any third party.
12
21.7
Non-Disturbance, Quiet Enjoyment.
Notwithstanding any transfer of the Lymans’ interest in this Lease, the Lyman Lands or the Lyman Leasehold, upon payment of the
rent provided herein, and upon Donlin’s performance of all other terms, conditions and covenants contained herein, the Lymans covenant
that Donlin shall peacefully and quietly have, hold and enjoy the Real Property during the Lease Term and completion of Donlin’s
obligations under Sections 20.1 and 20.2, and Donlin’s right, title and interest in this Lease, the Lyman Lands and the Lyman Leasehold
shall not be disturbed. The Lymans shall provide Donlin with non-disturbance agreements in the form and substance satisfactory to Donlin
in its reasonable discretion in a form standard to the industry, from any party, present or future, with a superior position to this
Lease, the Lyman Lands or the Lyman Leasehold. In addition, the Lymans shall provide the appropriate non-disturbance agreements to any
assignee or sublessee of this Lease.
22.
Eminent Domain.
If, at any time during the Lease Term, all or
any part of the Real Property that is material to Donlin Operations is taken pursuant to condemnation proceedings or by any right of
eminent domain, this Lease shall terminate at Donlin’s discretion, upon Donlin delivering written notice to the Lymans of such
termination. Upon such termination, all obligations for rent payments and other charges payable from Donlin to the Lymans that have not
yet accrued as due and payable shall cease. Provided, in the event of such termination the entire outstanding balance of rent otherwise
due and payable during the Primary Term pursuant to Section 5, if any, less any compensation paid to the Lymans for such taking, shall
remain due and payable from Donlin to the Lymans. Provided further, this Section 22 shall be of no force or effect if Donlin requests
or otherwise initiates or collaborates with the taking entity to effect such a taking.
23.
Confidentiality.
23.1
Generally. During the Lease Term and
for two (2) years thereafter, the financial terms of this Lease and all other information obtained in connection with this Lease or the
Real Property shall be held confidential by the Lymans and shall not be disclosed to third parties by the Lymans. The obligations imposed
by this Section 23 shall be continuing notwithstanding the fact that a person may have transferred all of his, her, or its interest under
this Lease and thus ceased to be a Party to this Lease.
23.2
Exceptions. Section 23.1 shall not
apply to a disclosure
(a) to
an affiliate, attorney, accountant, banker, investment banker, institutional investor, consultant,
employee, contractor, or subcontractor of a Party that has a bona fide need to be informed,
(b) to
any third party with whom a Party is conducting bona fide negotiations in connection with
a sale, assignment, mortgage, pledge, or other transfer of an interest in the Real Property
or of one or more shares in a Party or an affiliate of Party, or
13
(c) to
a governmental agency or to the public which a party believes in good faith is required by
applicable law or the rules of any stock exchange.
Any disclosure made under Section 23.2(a) or 23.2(b),
shall be a legitimate need to know basis and the third party receiving the confidential information shall first agree in writing to hold
all such information confidential in accordance with this Section 23.
24.
Force Majeure.
Except for obligations to make payments when due
hereunder and requirements to maintain the Lyman Leasehold in good standing in accordance with the Calista Consent, the obligations of
a Party shall be suspended to the extent and for the period that performance is prevented by any cause, whether foreseeable or unforeseeable,
beyond its reasonable control, including but not limited to the following: acts of God; laws, rules, orders, judgments, proclamations,
instructions, or requests of any Governmental Authority; inability to obtain on reasonably acceptable terms any public or private license,
permit, approval, or other authorization; curtailment or suspension of activities to remedy or avoid an actual or alleged, present or
prospective, violation of federal, state, or local environmental standards; acts of war or conditions arising out of or attributable
to war including acts of terrorism, whether declared or undeclared; riot, civil strife, insurrection, or rebellion; labor disputes (however
arising and whether or not employee demands are reasonable or within the power of the party to grant); volcanic eruption, earthquake,
sink hole, fire, storm, flood, drought, or other unusually adverse physical condition; delay or failure in performance by suppliers or
transporters of materials, parts, supplies, machinery, equipment, utilities, or services or by contractors or subcontractors due to shortage
of, or inability to obtain, labor, transportation, materials, parts, supplies, machinery, equipment, utilities, or services; accidents;
breakdown of equipment, machinery, or facilities; or any other cause similar to the foregoing. The affected Party shall promptly give
notice to the other Party of the suspension of performance, stating therein the nature of the suspension, the reasons therefore, and
the expected duration thereof. The affected Party shall resume performance as soon as reasonably possible.
25.
Recording Memorandum of Lease.
On the Effective Date, the Parties shall execute
and acknowledge a memorandum of lease in the form attached hereto as Exhibit E. Donlin shall cause such memorandum of lease to
be recorded in the Kuskokwim Recording District, State of Alaska, and Donlin shall pay any and all required recording fees relating thereto.
This Lease shall not be recorded.
26.
Notices, Payments, and Delivery.
26.1
Written Notices. All notices contemplated
by this Lease shall be in writing.
26.2
Payments; Single Agent. All payments
to the Lymans hereunder shall be paid by check payable to the order of Lyman Resources in Alaska, Inc. and delivered by
mail as provided in Section 26.3 or by wire transfer made at the written direction of Lyman Resources in Alaska, Inc.,
unless otherwise specified in accordance with the terms of this Lease. Lyman Resources in Alaska, Inc. agrees to be responsible for the
further distribution of such payments, as appropriate.
14
26.3
Delivery. Any notice, payment, or
other document to be delivered pursuant to this Lease may be delivered by mail if mailed by United States Postal Service via certified
mail, return receipt requested, postage prepaid; by Express Mail; by FedEx or other global courier service; or by facsimile transmission
to the address of such Party set forth below.
If to the Lymans:
Spencer
W. Lyman
[***]
[***]
e-mail:
[***]
Telephone
No.:
[***]
Facsimile
No.:
None
with a copy to:
J. P. Tangen
Attorney
at Law (P.C.)
1600 A
Street, Suite 310
Anchorage,
AK 99501-5148
Telephone
No.:
[***]
Facsimile
No.:
[***]
If to Donlin:
Donlin Gold LLC
Attn: General Manager
4720 Business Park Blvd., Suite G25
Anchorage, AK 99503
Telephone No.:
[***]
Facsimile No.:
[***]
with copies to the following:
Barrick
Gold U.S. Inc.
Attn:
Regional Land Manager, North America
136 E.
South Temple, Suite 1800
Salt Lake
City, UT 84111
Telephone
No.:
[***]
Facsimile
No.:
[***]
and
15
NovaGold
Resources Alaska, Inc.
c/o NovaGold
Resources, Inc.
Attn: CEO
200 Granville
Street, Suite 2300
Vancouver,
BC V6C 1S4 Canada
Telephone
No.:
[***]
Facsimile
No.:
[***]
Any such notice or payment shall be effective
upon the recipient’s day of receipt; provided, however, that if any mailed notice or payment is returned to the sender as being
non-deliverable, said notice or payment shall be deemed effective upon such return to the sender. Any Party may, by notice so delivered,
change its address for notice purposes hereunder.
27.
Arbitration; Mediation.
27.1
All Disputes to be Resolved by Arbitration.
Except as provided in Section 27.2, any dispute, controversy, or claim arising out of or relating to this Lease or the breach, termination,
or invalidity thereof among the Parties shall be settled by arbitration in accordance with the American Arbitration Association’s
Commercial Arbitration Rules then in effect. The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. §
1 et seq. (the “Act”), and the laws of the State of Alaska shall be applied by the arbitrators
in resolving the substantive issues raised by such dispute, controversy or claim, but subject to the limitation on remedies described
in Section 19. All proceedings in any such arbitration shall be held in Anchorage, Alaska, or at such other location as may be mutually
agreed by the Parties. Judgment upon the award rendered by the arbitrators may be entered, and such judgment enforced, in any court having
jurisdiction thereof. Any question respecting whether any dispute, controversy, or claim is subject to arbitration under this Section
27 shall be resolved by arbitration in the manner described in this Section 27.
27.2
Mediation. Nothing in this Section
27 shall prevent or foreclose the Parties from undertaking to resolve by mediation any dispute, controversy, or claim arising out of
or relating to this Lease.
28.
General Provisions.
28.1
Entire Lease. This Lease constitutes
the entire agreement and supersedes any and all other agreements, oral or written, among the Parties in respect of the subject matter
of this Lease.
28.2
Modification of Lease. This Lease
may be modified, amended, or supplemented in any manner and at any time only by a written instrument executed by the Lymans and Donlin.
28.3
Waiver. The failure of any Party to
this Lease to insist upon the strict performance of any provision of this Lease or to exercise any right, power, or remedy consequent
upon a breach thereof shall not constitute a waiver by said party of any such provision, breach, or subsequent breach of the same or
any other provision.
16
28.4
Remedies. Except as otherwise provided
in this Lease, the Parties hereto shall be entitled to any and all remedies provided by law.
28.5
Severability. If any provision of
this Lease or any application thereof shall be invalid or unenforceable, (a) the Parties shall amend this Lease to make the invalid or
unenforceable provision valid and enforceable and to reflect the intent of the original provision, and (b) the remainder of this Lease
and any other application of such provision shall not be affected thereby.
28.6
Governing Law. This Lease shall be
governed by and construed in accordance with the domestic laws of the State of Alaska without giving effect to any choice or conflict
of law provision or rule (whether of the State of Alaska or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Alaska.
28.7
Counterparts. This Lease may be executed
in multiple counterparts, all of which shall constitute one and the same instrument.
28.8
Further Actions. From time to time
during the Lease Term, each Party shall execute and deliver such other documents and take such other actions as may reasonably be requested
by the other Party in order to consummate or implement the transactions contemplated by this Lease.
28.9
Paragraph Headings. The descriptive
paragraph headings in this Lease are for convenience and reference only, and the words contained therein shall not be used to expand,
modify, or amplify the meaning of this Lease or to aid in the interpretation of this Lease.
28.10
Interpretation. As used in this Lease:
(a) the words “hereof,” “herein,” and “hereunder” and derivative or similar words shall refer to
this entire Lease and not to any particular provision of this Lease; (b) the term “Section” refers to the specified Section
of this Lease; (c) the terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa; and (d)
the terms “dollars” and “$” shall mean United States dollars. No provision of this Lease will be interpreted
in favor of, or against, any Party by reason of the extent to which any such Party or its counsel participated in the drafting of the
provision or by reason of the extent to which any such provision is inconsistent with any prior draft. Nothing contained in this agreement
shall be deemed or construed by the parties or any third party to create the relationship of principal or agent, partnership, joint venture,
or any association between the Lymans and Donlin other than lessor-lessee as specifically described in this Lease.
28.11
Survival. The obligations of the Parties
pursuant to the following Sections of this Lease shall survive the expiration or termination of this Lease: Sections 7, 15, 17, 19, 20,
21, 23, 27 and 28.
[Signature pages follow]
17
IN WITNESS WHEREOF, the parties hereto have executed
this Lease as of the date first hereinabove set forth.
The Lymans:
/s/
Spencer W. Lyman
SPENCER W. LYMAN
/s/ Carolyn Motherway Lyman
CAROLYN MOTHERWAY LYMAN
LYMAN RESOURCES
IN ALASKA, INC.,
an Alaska corporation
By:
/s/
Spencer W. Lyman
Name:
Spencer
W. Lyman
Title:
President
STATE OF ALASKA
)
) ss.
Fourth
JUDICIAL DISTRICT
)
THIS IS TO CERTIFY that on the 9th day of May, 2012,
before me, the undersigned Notary Public in and for the State of Alaska, duly commissioned and sworn, personally appeared SPENCER W.
LYMAN, who executed the within and foregoing instrument, and he acknowledged before me that he signed said instrument as his free and
voluntary act and deed, for the uses and purposes therein stated.
WITNESS my hand and official seal on the day, month
and year in this certificate first above written.
/s/ Angie M. Grant
Notary Public in and for Alaska
My Commission Expires: 02/06/14 (SEAL)
STATE OF ALASKA
)
) ss.
Fourth
JUDICIAL DISTRICT
)
THIS IS TO CERTIFY that on the 9th day of May, 2012,
before me, the undersigned Notary Public in and for the State of Alaska, duly commissioned and sworn, personally appeared CAROLYN MOTHERWAY
LYMAN, who executed the within and foregoing instrument, and he acknowledged before me that he signed said instrument as his free and
voluntary act and deed, for the uses and purposes therein stated.
WITNESS my hand and official seal on the day, month
and year in this certificate first above written.
/s/ Angie M. Grant
Notary Public in and for Alaska
My Commission Expires: 02/06/14 (SEAL)
STATE OF ALASKA
)
) ss.
Fourth
JUDICIAL DISTRICT
)
The foregoing instrument was acknowledged before
me this 9th day of May, 2012 by (name) Spencer W. Lyman , (title) President of LYMAN RESOURCES IN ALASKA,
INC., an Alaska corporation, on behalf of the corporation.
WITNESS my hand and official seal on the day, month
and year in this certificate first above written.
/s/ Angie M. Grant
Notary Public in and for Alaska
My Commission Expires: 02/06/14 (SEAL)
Donlin:
DONLIN GOLD LLC,
a Delaware limited liability company
By:
/s/
Stanley T. Foo
Name:
Stanley T. Foo
Title:
General Manager
STATE OF ALASKA
)
) ss.
FOURTH
JUDICIAL DISTRICT
)
The foregoing instrument was acknowledged before
me this 9th day of May, 2012 by (name) Stanley T. Foo , (title) General Manager of DONLIN GOLD LLC, a Delaware
limited liability company, on behalf of the limited liability company.
WITNESS my hand and official seal on the day, month
and year in this certificate first above written.
/s/ Angie M. Grant
Notary Public in and for Alaska
My Commission Expires: 02/06/14 (SEAL)
Exhibit
A
Definitions
As used herein, the following terms have the following meanings:
“Affiliate” means, with
respect to any Party, any other person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with said Party. For the purpose of this definition, “control,” when used with respect to any specified
person, means the possession of the power to direct the management or policies of the specified person, directly or indirectly, whether
through the ownership of voting securities, partnership interests, or limited liability company interests, by contract, or otherwise
and “person” means an individual, corporation, limited liability company, partnership, joint venture, bank, trust, unincorporated
organization, government or any department or agency thereof, or other entity of any kind.
“Area of Interest” means
all lands in the Seward Meridian and within the following area:
T.
24N, R. 50W, Secs. 1-36
T. 24N, R. 49W, Secs. 1-36
T. 24N, R. 48W, Secs. 1-36
T. 24N, R. 47W, Secs. 1-36
T. 23N, R. 50W, Secs. 1-36
T. 23N, R. 49W, Secs. 1-36
T. 23N, R. 48W, Secs. 1-36
T. 23N, R. 47W, Secs. 1-36
T. 22N, R. 50W, Secs. 1-36
T. 22N, R. 49W, Secs. 1-36
T. 22N, R. 48W, Secs. 1-36
T. 22N, R. 47W, Secs. 1-36
T. 21N, R. 50W, Secs. 1-36
T. 21N, R. 49W, Secs. 1-36
T. 21N, R. 48W, Secs. 1-36
T. 21N, R. 47W, Secs. 1-36
“Barrick” has the meaning
ascribed to it on page one of this Lease.
“Calista” means Calista
Corporation, an Alaska Native regional corporation.
“Calista Consent” has
the meaning ascribed to it in Section 8.1 of this Lease.
“Cost Adjustment Factor”
shall mean the ratio of (i) the most recently published CPI to (ii) the CPI for the first half of 2011.
“CPI” means the Consumer
Price Index for All Items and All Urban Consumers (CPI-U) for Anchorage, Alaska (1982-84=100) as reported semi-annually by the Bureau
of Labor Statistics, U.S. Department of Labor. (Should this index be changed or cease to be published the following will apply: (a) If
the subject index is changed so that the base year differs from that noted above, the subject index shall be converted in accordance
with the conversion factor published by the publisher of that index; (b) if the subject index is discontinued or revised (other than
as described in (a) above) during the Lease Term, the subject index shall be replaced with another similar index which will obtain substantially
the same results as would be obtained if the subject index had not been discontinued or revised.)
“Departure Date” and “Departure
Deadline” have the meaning ascribed to them in Section 8.2 of this Lease.
“Donlin” has the meaning
ascribed to it on page one of this Lease and, with respect to Donlin Operations or operations as used in this Lease, shall include Operations
or operations by Donlin, its contractors, agents, successors or assigns (excluding the Lymans).
“Donlin Lode Lease” means
that certain Exploration and Lode Mining Lease dated May 1, 1995, between Calista and Placer Dome U.S. Inc., and restated on February
11, 2011, respecting and affecting the Real Property and certain additional lands within the Area of Interest, as heretofore or hereafter
amended.
“Effective Date” has the
meaning ascribed to it on page one of this Lease.
“Environmental Matters”
means the matters described in Exhibit D.
“Gold Value” has the meaning
ascribed to it in Section 5.3 of this Lease. For purposes of Section 5.3, Gold Value for each year to which Section 5.3 applies shall
be the calculated value of [***] using the average London PM fix published gold price for the twelve (12) months preceding thirty (30)
days prior to the anniversary of the Rent Commencement Date. If the subject London PM fix published gold price is discontinued during
the Lease Term, the subject price shall be replaced with another similar published gold price which will obtain substantially the same
results as would be obtained if the subject price had not been discontinued.
“Governmental Authority”
means any federal, state, local or other government, or any governmental, regulatory, judicial or administrative agency, bureau, commission,
court, tribunal, body or other authority, exercising or entitled to exercise any administrative, executive, legislative, judicial, police,
regulatory or taxing authority or power, but does not include Calista, TKC, Donlin, the Lymans, any Affiliates of any thereof, or any
of their respective successors-in-interest.
“Guarantor” and “Guarantors”
have the meaning ascribed to them in Section 5.3 of this Lease.
“Guaranty” has the meaning
ascribed to it in Section 5.3 of this Lease.
“Lease” has the meaning
ascribed to it on page one of this Lease as the same may be amended or supplemented in writing by the Parties from time-to-time.
“Lease Term” has the meaning
ascribed to it in Section 3 of this Lease.
“Lymans” has the meaning
ascribed to it on page one of this Lease, except for Sections 14, 20.1, 20.2 and 21.2, whereby the “Lymans” shall mean Spencer
W. Lyman and/or Carolyn Motherway Lyman.
“Lyman Descendants” means
the children, grandchildren or great-grandchildren of Spencer W. Lyman or Carolyn Motherway Lyman.
“Lyman Lands” means the
surface estate in, to, and respecting those lands included within the Record of Survey recorded on January 17, 1996, as Plat No. 96-1,
Kuskokwim Recording District, State of Alaska, and attached in Exhibit B-1 of this Lease.
“Lyman Leasehold” means
the rights, titles, and interests granted to Lyman Resources in Alaska, Inc. respecting the Real Property pursuant to the Lyman Placer
Lease.
“Lyman Placer Lease” means
that certain Mining Lease Agreement dated April 28, 1982, as amended on April 25, 1988 and April 25, 2012, between Calista and Lyman
Resources in Alaska, Inc., respecting and affecting the Real Property, and attached in Exhibit B-2 of this Lease.
“Minerals” means any and
all ores, minerals, mineral products, mineral byproducts, or mineral materials (whether classifiable as metallic, non-metallic, precious,
base, industrial, or otherwise, and including but not necessarily limited to (1) the substances with respect to which rights have been
granted pursuant to the Donlin Lode Lease and (2) the substances with respect to which rights have been granted pursuant to the Lyman
Placer Lease).
“Nova” has the meaning
ascribed to it on page one of this Lease.
“Operations” means any
or all of the following activities: exploring for any or all Minerals; developing, working, mining, milling, processing, beneficiating,
concentrating, extracting, leaching, treating, smelting, refining, storing, removing, transporting, or selling or otherwise disposing
of any or all Minerals; conducting reclamation activities; and permitting of these and all related activities. For purposes of this Lease,
Operations shall be deemed to exist and be continuing unless a period of two (2) consecutive calendar years, excluding any period of
suspension pursuant to Section 24 of this Lease, passes with no Operations being conducted by Donlin or any contractor, agent, successor
or assign of Donlin (excluding the Lymans).
“Party” and “Parties”
have the meaning ascribed to them on page one of this Lease.
“Percentage Interest”
or “Percentage Interests” have the meaning ascribed to it in the Exhibit C Form of Guaranty.
“Permits” means all of
the permits, authorizations, determinations, approvals, licenses, exemptions, variances, and orders described in Exhibit F.
“Primary Term” has the
meaning ascribed to it in Section 4.1 of this Lease.
“Real Property” means,
collectively, (1) the Lyman Lands, (2) the Lyman Leasehold, (3) any and all rights, titles, or interests appurtenant to either thereof
(including but not limited to access rights and water rights), and (4) any and all buildings, outbuildings, roads, airstrips, dams, impoundments,
ditches, and other improvements of a permanent nature and fixtures that are situated upon the Lyman Lands or Lyman Leasehold on the Effective
Date.
“Real Property Taxes”
has the meaning ascribed to it in Section 7.1 of this Lease.
“Rent Commencement Date”
has the meaning ascribed to it in Section 5.1 of this Lease.
“Secondary Term” has the
meaning ascribed to it in Section 4.1 of this Lease.
“TKC” means The Kuskokwim
Corporation, a consolidated Alaska Native village corporation that is the successor-in-interest by merger to, inter alia, Kipchaughpuk
Limited.
Exhibit
B-1
Lyman Lands
(1) Record
of Survey recorded on January 17, 1996, as Plat No. 96-1, Kuskokwim Recording District;
(2) Grant
Deed of Surface Estate dated June 7, 1994, and recorded on August 17, 1994, at Book 26, Pages
44-48, Kuskokwim Rec. Dist.;
(3) Corrective
Grant Deed of Surface Estate dated June 8, 2000, and recorded on July 21, 2000 at Book 31,
pages 180-182, Kuskokwim Rec. Dist.;
(4) Deed
of Reconveyance dated October 5, 2009 and recorded on October 9, 2009 as #2009-000295-0,
Kuskokwim Rec. Dist.
(5) Permit
to Appropriate Water ADL 73644 (application for Certificate of Appropriation pending)
COPIES ATTACHED
BOOK
26 PAGE 44
Kuskokwim Recording District
GRANT DEED
OF SURFACE ESTATE
For
valuable consideration, receipt of which is acknowledged, THE KUSKOKWIM CORPORATION, Grantor, grants, conveys and transfers to
SPENCER LYMAN and CAROLYN MOTHERWAY LYMAN, husband and wife, Grantees, as tenants in the entirety with right of survivorship, the surface
estate only of the following described real property situated in the Kuskokwim Recording District, Fourth Judicial District, State of
Alaska, more particularly described as:
Three
parcels of land depicted on the “Field Audit Sketch” prepared by The Kuskokwim
Corporation and Spencer Lyman and contained in The Kuskokwim Corporation files on “ANCSA Section
14(c)(1) File Number 241.01”, with the previously approved sketch attached as “Attachment
One” to this Grant Deed, which parcels are situated within the real property described in the conveyance by which Grantor
obtained its interest, being Interim Conveyance Number 776 dated December 30, 1983 and recorded in Book 17 at pages 355 through 374 in
the Kuskokwim Recording District, and generally located within unsurveyed Sections 14 and 23, T 23 N, R 49 W, Seward Meridian, Alaska,
being more particularly described in “Attachment Two” to this Grant Deed.
SUBJECT HOWEVER to any easements,
reservations, covenants, conditions, restrictions, plat notations, patent reservations and exceptions, rights-of-way, and agreements
of record.
Grantor covenants with and for
the benefit of Grantees that Grantor has not conveyed the interest conveyed by this deed to any other person or entity and further covenants
that Grantor has created no encumbrances on the interest conveyed by this deed.
The surface estate only is being
conveyed, with no warranties as to physical condition and subject to all conditions of the property, and with no representations, warranties,
promises, covenants, agreements or guaranties of any kind or character whatsoever, whether express or implied, oral or written, past,
present or future, concerning the property, its nature, quality or condition, the water, soil, geology, presence or absence of pollutants,
environmental conditions, hazardous waste, suitability of the property for any activities, compliance of the property (or its use) with
laws, rules, ordinances or regulation of any governmental authority or any other matter related to or concerning the property, all of
which Grantees take subject to and from which Grantees and their successors shall indemnify, hold harmless and defend Grantor.
DATED this 7th day of June, 1994
GRANTOR:
GRANTEES:
ATTACHMENT “A”
BOOK 26 PAGE 45
Kuskokwim Recording District
THE
KUSKOKWIM CORPORATION
By
/s/
MICHAEL C. HARPER
/s/
SPENCER LYMAN
MICHAEL C. HARPER
SPENCER LYMAN
President and Chief
Executive Officer
/s/ CAROLYN MOTHERWAY
LYMAN
CAROLYN MOTHERWAY LYMAN
Address of GRANTOR:
645 G Street, Suite 305
Anchorage, AK 99501
Address of GRANTEES:
General Delivery
Flat, Alaska 99584
STATE OF ALASKA
)
) ss.
THIRD JUDICIAL DISTRICT
)
THIS
IS TO CERTIFY that on the 7th day of June, 1994, before me, the undersigned, a Notary Public in and for the State
of Alaska, duly commissioned and sworn, personally appeared MICHAEL C. HARPER, known to me and known to me to be the President and Chief
Executive Officer of THE KUSKOKWIM CORPORATION, the corporation that executed the foregoing document, and he acknowledged the document
to be the free and voluntary act and deed of the corporation for the uses and purposes therein mentioned, and on oath stated that he
was authorized to execute the document.
/s/
Notary Public – STATE OF ALASKA
My Commission Expires: _________________________________________
STATE OF ALASKA
)
) ss.
FOURTH JUDICIAL DISTRICT
)
THIS
IS TO CERTIFY that on the 27th day of May, 1994, before me, the undersigned, a Notary Public in and for the State
of Alaska, duly commissioned and sworn, personally appeared SPENCER LYMAN and CAROLYN MOTHERWAY LYMAN, known to me and known to me to
be the individuals named in and who executed the foregoing document, and they acknowledged to me that they signed the document freely
and voluntarily, for the uses and purposes therein mentioned.
/s/
Notary Public – STATE OF ALASKA
My Commission Expires: 9-5-95
AFTER RECORDING, RETURN TO:
Spencer Lyman and Carolyn
Motherway Lyman
General Delivery
Flat, Alaska 99584
BOOK 26 PAGE 47
Kuskokwim Recording District
“ATTACHMENT
TWO”
TO DEED OF TRUST
Parcel A
Commencing
at the most southerly limits of the centerline of the existing airstrip identified on the “Field
Audit Sketch” attached to the Grant Deed as “Attachment One”; thence,
along the airstrip centerline in a northwesterly direction for 1400 feet, to the. northerly limits of the airstrip; thence,
along the projected bearing of said airstrip centerline, in a northwesterly direction 50.0 feet, to a point; thence, perpendicular therefrom
in a northeasterly direction 75.0 feet to Corner Number 1 and True Point of Beginning; thence, southeasterly, along a line parallel to
said centerline 1500 feet to Corner Number 2; thence, southwesterly, along a line perpendicular therefrom for approximately 150 feet
crossing Snow Gulch Creek to its left bank, being Meander Corner Number 3; thence northwesterly, along the meanders of the left bank
of said creek for an approximate straight line distance of 1500 feet to Meander Corner Number 4; thence, northeasterly, along a line
perpendicular to the centerline of said airstrip for approximately 170 feet to Corner Number 1 and True Point of Beginning, containing
6 acres more or less. Excepting therefrom those portions of this Parcel in conflict with the ANCSA Section 14(c)(1) application parcel
previously approved by The Kuskokwim Corporation to be conveyed to Carolyn Motherway Lyman and/or Spencer Lyman.
Parcel B
Commencing
at the intersection of the centerline of the north road and the right bank of Snow Gulch Creek as shown on the “Field
Audit Sketch” attached to the Grant Deed as “Attachment One”, being Meander Corner Number 1 of this parcel and
the True Point of Beginning; thence, southwesterly, along a line perpendicular to the airstrip centerline crossing the creek for 175
feet to Corner Number 2; thence, northwesterly, along a line parallel to the airstrip centerline for 825 feet to Corner Number 3; thence,
northeasterly, along a line perpendicular thereto for approximately 175 feet crossing Snow Gulch Creek to its right bank, being Meander
Corner Number 4; thence, southeasterly, along the meanders of the right bank of Snow Gulch Creek to Corner Number 1 and the True Point
of Beginning, containing 3 acres more or less. Excepting therefrom those portions of this Parcel in conflict with Parcel A previously
described above.
BOOK 26 PAGE 48
Kuskokwim Recording District
Parcel C
Commencing
at the heretofore described Corner Number 1 Parcel A; thence, southeasterly along the line of Parcel A defined by Corner Number
1 to Corner 2 to a point of intersection with the actual or projected northwesterly line of the approved ANCSA 14(c)(1) claim of Carolyn
Motherway and/or Spencer Lyman, being Corner Number 1 and True Point of beginning; thence northeasterly along the northwesterly line
of the ANCSA 14(c)(1) claim for approximately 250 feet to its most northeasterly corner, being Corner Number 2; thence westerly along
a line at a clockwise angle of 45 degrees from the northwesterly boundary of the ANCSA 14(c)(1) approved parcel to the intersection of
that line with the northeasterly boundary of Parcel A, being Corner Number 3 of this Parcel C; thence southeasterly along the northeasterly
boundary of Parcel A to the True Point of Beginning, containing 0.75 acres more or less.
BOOK 31 PAGE 180
Kuskokwim Recording District
CORRECTIVE GRANT DEED OF SURFACE ESTATE
Corrective
Grant Deed of Surface Estate, made this 08 day of June, 2000 by THE KUSKOKWIM CORPORATION, Grantor, to SPENCER LYMAN
and CAROLYN MOTHERWAY LYMAN, husband and wife, Grantees.
Recitals
A.
THE KUSKOKWIM CORPORATION, Grantor, conveyed to SPENCER LYMAN and CAROLYN MOTHERWAY LYMAN, Grantees, certain land described according
to a legal description based upon a “Field Audit Sketch” by GRANT DEED OF SURFACE
ESTATE dated June 7, 1994 and recorded August 17, 1994 in Book 26 at Page 44 in the records of the Kuskokwim Recording District, Fourth
Judicial District, State of Alaska.
B.
The parties recognized at the time of execution of the GRANT DEED OF SURFACE ESTATE that the legal description had not been developed
from an actual survey, and a corrected legal description has now been prepared (according to the “Record of Survey of Carolyn and
Spencer Lyman Property within Sections 14 and 23, Township 23 North, Range 49 West, Seward Meridian, Alaska, Kuskokwim Recording District”
which has been recorded the 17th day of January, 1996, as Plat 96-1, Kuskokwim Recording District, Fourth Judicial District, State of
Alaska), which description the parties are hereby adopting to correct and amend the earlier description.
C.
The parties have agreed that there is included in the survey (and the Grantor will convey) an additional area totaling approximately
2.21 acres, on terms specified in other documents.
D.
The parties are executing this CORRECTIVE GRANT DEED OF SURFACE ESTATE to redescribe the property previously conveyed, to amend
the prior deed and to convey additional property.
Corrective Grant Conveyance
THE
KUSKOKWIM CORPORATION, Grantor, hereby conveys and grants to SPENCER LYMAN and CAROLYN MOTHERWAY LYMAN, husband and wife, Grantees,
as TENANTS BY THE ENTIRETY with right of survivorship, that real property situated in the State of Alaska, Fourth Judicial District,
Kuskokwim Recording District, which is more particularly described as follows:
The real property parcel described in the “Record
of Survey of Carolyn and Spencer Lyman Property within Sections 14 and 23, Township 23 North, Range 49 West, Seward Meridian, Alaska,
Kuskokwim Recording District” recorded the 17th day of January, 1996, as Plat 96-1, Kuskokwim Recording District, Fourth Judicial
District, State of Alaska.
BOOK 31 PAGE 181
Kuskokwim Recording District
SUBJECT, HOWEVER, to any easements,
reservations, covenants, conditions, restrictions, plat notations, patent reservations and exceptions, rights-of-way, and agreements
of record.
Grantor covenants with and for
the benefit of Grantees that Grantor has not conveyed the interest conveyed by this deed to any other person or entity and further covenants
that Grantor has created no encumbrances on the interest conveyed by this deed.
The surface estate only is being
conveyed, with no warranties as to physical condition and subject to all conditions of the property, and with no representations, warranties,
promises, covenants, agreements or guaranties of any kind or character whatsoever, whether express or implied, oral or written, past,
present or future, concerning the property, its nature, quality or condition, the water, soil, geology, presence or absence of pollutants,
environmental conditions, hazardous waste, suitability of the property for any activities, compliance of the property (or its use) with
laws, rules, ordinances or regulation of any governmental authority or any other matter related to or concerning the property, all of
which Grantees take subject to and from which Grantees and their successors shall indemnify, hold harmless and defend Grantor.
DATED this 08 day
of June, 2000.
GRANTOR:
GRANTEES:
THE
KUSKOKWIM CORPORATION
By
/s/
MICHAEL C. HARPER
/s/
SPENCER LYMAN
MICHAEL C. HARPER,
SPENCER LYMAN
President and Chief
Executive Officer
/s/ CAROLYN MOTHERWAY
LYMAN
CAROLYN MOTHERWAY LYMAN
STATE OF ALASKA
)
) ss.
THIRD JUDICIAL DISTRICT
)
BOOK 31 PAGE 182
Kuskokwim Recording District
THIS IS TO CERTIFY that on this 8th day of
June, 2000, before me, the undersigned, a Notary Public in and for the State of Alaska, duly commissioned and sworn, personally
appeared MICHAEL C. HARPER, known to me and known to me to be the President and Chief Executive Officer of THE KUSKOKWIM CORPORATION,
the corporation that executed the foregoing document; and he acknowledged the document to be the free and voluntary act and deed of the
corporation for the uses and purposes therein mentioned, and on oath stated that he was authorized to execute the document.
/s/
NOTARY PUBLIC – STATE OF ALASKA
My Commission Expires: _________________________________________
STATE OF ALASKA
)
) ss.
FOURTH JUDICIAL DISTRICT
)
THIS
IS TO CERTIFY that on this 12 day of July, 2000, before me, the undersigned, a Notary Public in and for the State
of Alaska, duly commissioned and sworn, personally appeared SPENCER LYMAN and CAROLYN MOTHERWAY LYMAN, known to me and known to me to
be the individuals named in and who executed the foregoing document, and they acknowledged to me that they signed the document freely
and voluntarily, for the uses and purposes therein mentioned.
/s/
Postmaster
Flat, AK
AFTER RECORDING, RETURN TO:
Peter Bartlett
Law Offices of Peter Bartlett
425 G Street, Suite 610
Anchorage, AK 99901
Filed for Record
at Request of:
AFTER RECORDING
MAIL TO:
Name:
Spencer
or Carolyn Lyman
Address:
PO
Box 79
Crooked
Creek, Alaska 99575
File No.:
B-15924 0
DEED OF RECONVEYANCE
Whereas,
the indebtedness secured to be paid by the Deed of Trust executed by Spencer W. and Carolyn Motherway Lyman to First American Title
successor interest to Transalaska Title Insurance Agency, Inc., as Trustee, dated June 7, 1994, recorded August 17, 1994, in the Kuskokwim
Recording District, Fourth Judicial District, State of Alaska, as Book 26 Page 49 has been fully paid.
NOW THEREFORE, in consideration of the payment of
said indebtedness, First American Title, as Trustee, does hereby RECONVEY, without Warranty, to the PERSON OR PERSONS ENTITLED
THERETO, all of the right, title and interest now held by said Trustee in and to the property described in said Deed of Trust, described
as follows:
The real property parcel described in the “Record
of Survey of Carolyn and Spencer Lyman Property with in Sections 14 and 23, Township 23 North, Range 49 West, Seward Meridian Alaska,
Kuskokwim Recording District.” Recorded the 17th Day of January, 1996, as Plat 96-1.
Dated: October 5, 2009,
First American Title
By:
/s/
Authorized
Signor
STATE OF ALASKA
)
) ss.
THIRD JUDICIAL DISTRICT
)
THIS
IS TO CERTIFY that on this Fifth day of October, 2009, before me the undersigned Notary Public, personally appeared Laura A. Downing,
known to me and to me known to be the Title Manager of the corporation that executed the within instrument, and known to me to be the
person who executed the within instrument on behalf of the corporation therein named and acknowledged to me that such corporation executed
the same pursuant to its by-laws or a resolution of its Board of Directors.
WITNESS my hand and official seal.
/s/
Notary Public in and for Alaska
My commission expires: 10-10-09
STATE OF ALASKA
DEPARTMENT OF NATURAL RESOURCES
DIVISION OF MINING AND WATER MANAGEMENT
PERMIT
TO
APPROPRIATE WATER (AMENDED)
ADL 73644
THE STATE OF ALASKA UNDER AS 46.15, THE ALASKA WATER USE ACT, AND
THE REGULATIONS ADOPTED UNDER IT, GRANTS TO:
LYMAN RESOURCES IN ALASKA, INC.
P.O. BOX 8
FLAT, AK. 99584
THE RIGHT TO DEVELOP THE FOLLOWING USE OF WATER:
SOURCE:
QUANTITY:
USE:
CROOKED CREEK
300.0 GAL/MIN
PLACER GOLD
PRIORITY DATE: 06/14/1976
FROM: JUN 01 THRU SEP 30
THE LOCATION OF THIS WATER SOURCE IS:
THAT PORTION OF CROOKED CREEK WITHIN THE BELOW DESCRIBED PARCEL OF
PROPERTY.
THE LOCATION TO WHICH THIS WATER RIGHT APPERTAINS IS:
THAT CERTAIN PARCEL OF PROPERTY LEASED TO MR. SPENCER LYMAN, A.K.A.
LYMAN RESOURCES IN ALASKA, INC., BY THE CALISTA CORPORATION, LOCATED WITHIN THE S1/2 PROTRACTED SECTION 13; S1/2 PROTRACTED SECTION 14;
PROTRACTED SECTION 23; W1/2, NE1/4 PROTRACTED SECTION 24; W1/2, NE1/4 PROTRACTED SECTION 26; E1/2 PROTRACTED SECTION 27; TOWNSHIP 23
NORTH, RANGE 49 WEST, SEWARD MERIDIAN, KUSKOKWIM RECORDING DISTRICT, STATE OF ALASKA.
CHANGES IN THE NATURAL STATE OF WATER ARE TO BE MADE IN THE MANNER
AND ONLY FOR THE PURPOSES STATED IN THIS PERMIT. THIS PERMIT IS SUBJECT TO THE PERTINENT STATUTORY PROVISIONS IN AS 46.15, ADMINISTRATIVE
REGULATIONS IN 11 AAC 93, AND THE FOLLOWING CONDITIONS:
THE HOLDER OF THIS PERMIT SHALL:
FOLLOW ACCEPTABLE ENGINEERING STANDARDS IN EXERCISING THE PRIVILEGE
GRANTED EY THIS PERMIT.
PAGE 1
PERMIT
TO
APPROPRIATE WATER (AMENDED)
ADL 73644
DEFEND AND INDEMNIFY THE STATE AGAINST AND HOLD IT HARMLESS FROM ANY
AND ALL CLAIMS, DEMANDS, LEGAL ACTIONS, LOSS, LIABILITY AND EXPENSE FOR INJURY TO OR DEATH OF PERSONS AND DAMAGES TO OR LOSS OF PROPERTY
ARISING OUT OF OR CONNECTED WITH THE EXERCISE OF THE PRIVILEGE GRANTED BY THIS PERMIT.
COMPLY
WITH ALL APPLICABLE LAWS, REGULATIONS, AND CONDITIONS; AND KEEP CURRENT ALL NECESSARY APPROVALS REQUIRED BY OTHER STATE, FEDERAL,
AND LOCAL AGENCIES.
NOTIFY THE DIVISION OF ANY CHANGE OF ADDRESS OF THE GRANTEE, TRANSFER
OF ANY REAL PROPERTY IDENTIFIED IN THIS DOCUMENT, OR CHANGE IN THE WATER APPROPRIATION.
THE ISSUANCE OF THIS PERMIT MAY NOT BE USED IN ANY WAY TO PROVE OR
ESTABLISH VALIDITY OF A MINING CLAIM.
ANY DISCHARGE TO STATE WATERS MADE SUBSEQUENT TO THESE WATER APPROPRIATIONS
SHALL COMPLY WITH THE ALASKA WATER QUALITY STANDARDS. THIS MAY REQUIRE THE INSTALLATION AND MAINTENANCE OF SETTLING PONDS OR SIMILAR
SYSTEMS TO REDUCE TURBIDITY AND SETTLEABLE SOLIDS IN THE DISCHARGES.
TAILINGS SHALL BE LEFT IN A STABLE CONFIGURATION SO AS NOT TO CONTRIBUTE
TO EROSION OR SEDIMENTATION PROBLEMS IN STATE WATERS.
IF MINING OR MINERAL ENTRY IS NOT AUTHORIZED WITHIN THE AREA DESCRIBED
WITHIN THIS PERMIT OR IF THE CLAIMS ARE DECLARED ABANDONED, THIS PERMIT WILL BE DECLARED NULL AND VOID.
WASTEWATER DISCHARGES SUBSEQUENT TO THIS APPROPRIATION MUST COMPLY
WITH ALASKA WASTEWATER DISPOSAL REGULATIONS.
WHERE SUCTION DREDGING IS BEING DONE, THE HYDRAULIC HOSE WILL NOT
BE USED FOR STRIPPING NOR DREDGING DONE IN POSTED OR OBSERVED FISH SPAWNING AREAS.
GRANTOR:
STATE OF ALASKA
DEPARTMENT OF NATURAL RESOURCES
DIVISION OF MINING & WATER MGMT.
SOUTHCENTRAL REGION
3601 C. STREET, SUITE 800
ANCHORAGE, ALASKA. 99503-5935
PAGE 2
PERMIT
TO
APPROPRIATE WATER (AMENDED)
ADL 73644
PER 11 AAC 05.010.(A)(8)(M)
AN ANNUAL ADMINISTRATIVE SERVICE FEE SHALL BE ASSESSED ON THIS APPROPRIATION OF WATER.
IN AN EFFORT TO MEET THE STATE WATER QUALITY STANDARDS, WHERE STREAM
OR LAKE WATER IS NEEDED FOR SLUICING; ONLY THE VOLUME OF WATER NECESSARY FOR THE SLUICING OPERATIONS SHALL BE DIVERTED THROUGH THE MINING
AREA. ALSO, SETTLING PONDS OR AN EQUALLY OR MORE EFFECTIVE ALTERNATIVE MEANS FOR TREATING MINING WASTEWATER WILL BE EMPLOYED WHICH ALLOWS
THE RECEIVING WATERS (FOR THE MINING WASTEWATER) TO MEET EPA PERMIT STANDARDS.
WITH REGARD TO THE ON-SITE STORED FUEL, WHERE THE SINGLE TANK VOLUME
IS 600 GALLONS OR MORE, THE APPLICANT SHOULD PREPARE A SPCC PLAN FOR EPA. WHERE THE ON-SITE FUEL VOLUME EXCEEDS 1000 GALLONS, DEC-APPROVED
INFORMATIONAL PLACARDS WILL BE POSTED.
UPON TERMINATION OF LEASE AGREEMENT BETWEEN CALISTA CORP. AND MR.
SPENCER LYMAN THIS DIVISION SHALL BE NOTIFIED.
CROOKED CREEK HAS BEEN IDENTIFIED AS BEING IMPORTANT FOR THE MIGRATION,
SPAWNING AND REARING OF ANADROMOUS FISHES; THEREFORE, AT ALL TIMES THAT THE WATER WITHDRAWAL SYSTEM IS OPERATING, THE MAXIMUM ALLOWABLE
SCREEN MESH SIZE IS .04 INCHES (1.0 MILLIMETERS AND THE MAXIMUM WATER VELOCITY THROUGH THE SCREENED INTAKE IS 0.5 FEET PER SECOND. IN
ORDER TO MEET THIS STANDARD A PUMP OPERATING AT 300 GPM WILL REQUIRE A SCREENED INTAKE BOX WITH THE DIMENSIONS 2.0 FT X 2.0 FT X 2.0
FT WITH THE INTAKE ORIFICE CENTERED IN THE BOX.
THIS 10-YEAR PERMIT EXTENSION INCLUDES THE REQUIRED 1-YEAR PERMIT
IN ACCORDANCE WITH 11 AAC 93.930 TO ALLOW FOR COMMENTS REGARDING THE ADDITION OF LAND SPECIFIED IN THE MODIFIED LEASE AGREEMENT BETWEEN
CALISTA CORPORATION AND LYMAN RESOURCES IN ALASKA, INC., DATED APRIL 25, 1988. THE ADDITIONAL CONTIGUOUS LANDS ARE INCLUDED IN THIS AMENDED
PERMIT. IF NO OBJECTION IS FILED WITHIN THE 1-YEAR PERIOD, THIS AMENDED PERMIT CONTINUES IN FULL FORCE AND THE EXPIRATION DATE BECOMES
SEPTEMBER 30, 2004.
THIS PERMIT SHALL EXPIRE ON 09/30/2004
THIS PERMIT TO APPROPRIATE WATER IS ISSUED BY AUTHORITY OF AS 46.15.080
AND 11 AAC 93.120 ON APRIL 1, 1996.
PAGE 3
PERMIT
TO
APPROPRIATE WATER (AMENDED)
ADL 73644
APPROVED:
/s/
TITLE:
Chief,
Water Resources Section.
DIVISION OF MINING AND WATER MANAGEMENT
PAGE 4
Land Administration System
Page 1 of 5
Alaska
DNR Case Detail
File Type: ADL
File Number: 73644
See
Township, Range, Section and Acreage? x Yes ¨
No
NEW SEARCH
File: ADL 73644
Search for Status Plat Updates
As
of 04/17/2012
Customer: 000174089
LYMAN RESOURCES IN ALASKA INC
PO BOX 79
CROOOKED CREEK AK 995750079
Case Type: 801
WATER RIGHTS
DNR Unit: 800
WATER
File Location: WFBX
WATER MGT-FAIRBANKS
Case Status:
37 PERMIT PEND. ACTION
Status Date: 09/29/2011
Total
Acres: 0.000
Date Initiated:
07/13/1982
Office
of Primary Responsibility: WFBX WATER MGT-FAIRBANKS
Last Transaction Date:
10/10/2011
Case Subtype: SUR SURFACE
Last Transaction:
COMMENTS COMMENTS
Meridian:
S Township: 023N Range: 049W Section: 26 Section
Acres: 0 Search Plats
Case Actions
Transaction: INITIATE BATCH CASE INITIATE
Transaction
Date: 07-13-1982
Time:
162155
SubSystem
ID: CAS
Input
Date: 07-13-1982
User: BATCH
Terminal:
CONV
STATUS
DATE
07-29-1976
LOCATION
FROM
SCDOWS
SCDO WATER SECTION
LOCATION
TO
SCDOWS
SCDO WATER SECTION
CASE
STATUS
11
PERMIT ISSD
OFFICE
PRI RESP
WSCR
WATER-SOUTHCNTRL R
SPECIAL
CODE
UKN
UNKNOWN
CUSTOMER
NUMBER
126478
S
023N 049W 26
ALRU
CONVERSION
Transaction: CONV CONVERTED
FROM OLD LAND RECORD SYSTEM - UNVERIFIED
Transaction Date:
07-13-1982
Time: 162156
SubSystem ID:
CAS
Input
Date: 07-13-1982
User: BATCH
Terminal:
CONV
SEE
OLD SERIAL PAGE FOR MORE INFORMATION
Transaction:
CFCD CASEFILE CUSTOMER DOCUMENTED
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Land Administration System
Page 2 of 5
Transaction
Date: 08-02-1986
Time:
100
SubSystem
ID: CAS
Input
Date: 08-02-1986
User: BATCH
Terminal:
CONV
CUSTOMER
NUMBER
000174089
LYMAN RESOURCES IN A
UNIT
CODE
800
WATER MANAGEMENT
RELATIONSHIP
CODE
10
OWNER
THIS
TRANSACTION WAS GENERATED BY THE CONVERSION TO THE NEW CUSTOMER SYSTEM TO DOCUMENT THE UNIT AND RELATIONSHIP CODES
Transaction: REQPLT
REQUEST DTS PLAT UPDATE
Transaction Date:
02-02-1987
Time: 85410
SubSystem ID:
CAS
Input
Date: 02-02-1987
User: WBWRIGHT
Terminal:
NAMD
ACTION
CHG
CHANGE POINT
Transaction: TRSFR CASE
TRANSFERRED
Transaction Date:
02-02-1987
Time: 92810
SubSystem ID:
CAS
Input
Date: 02-02-1987
User: WBWRIGHT
Terminal:
NAMD
NEW
REL CODE A
10
OWNER
OLD
REL CODE A
10
OWNER
TRANSFEREE
A CID NUMBER
167697
CALISTA CORP
TRANSFEROR
A CID NUMBER
174089
LYMAN RESOURCES IN A
Transaction: PA
PERMIT AMENDED
Transaction Date:
02-27-1987
Time: 72619
SubSystem ID:
CAS
Input
Date: 03-02-1987
User: WBWRIGHT
Terminal:
NAMD
STATUS
11
11
PERMT ISSD
PERMIT
SIGNED BY
GJP
Transaction REQPLT REQUEST
DTS PLAT UPDATE
Transaction Date:
02-27-1987
Time: 72638
SubSystem ID:
CAS
Input
Date: 03-02-1987
User: WBWRIGHT
Terminal:
NAMD
ACTION
CHG
CHANGE POINT
Transaction: PA PERMIT
AMENDED
Transaction Date:
02-29-1988
Time: 113323
SubSystem ID:
CAS
Input
Date: 03-01-1988
User: LACARLSO
Terminal:
NAMB
STATUS
11
11
PERMT ISSD
PERMIT
SIGNED BY
E.G. BARBER, JR
300
GAL/MIN FOR PLACER GOLD. EXPIRES 1/15/90.
Transaction: PLT PLOTTED
BY DTS
Transaction Date:
03-28-1989
Time: 114648
SubSystem ID:
CAS
Input
Date: 03-30-1989
User: NCSCLVA
Terminal:
NAXP
REQUEST
DATE
02-02-1987
REQUEST
ACTION
CHG
CHANGE POINT
PLOT
RESULT
COM
COMPLETED
PLOTTED
BY
LLV
CHAINS
NORTH PLOTTED
21
CHAINS
WEST PLOTTED
39
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Page 3 of 5
Transaction: PLT PLOTTED
BY DTS
Transaction
Date: 03-28-1989
Time:
114736
SubSystem
ID: CAS
Input
Date: 03-30-1989
User: NCSCLVA
Terminal:
NAXP
REQUEST
DATE
02-27-1987
REQUEST
ACTION
CHG
CHANGE POINT
PLOT
RESULT
COM
COMPLETED
PLOTTED
BY
LLV
CHAINS
NORTH PLOTTED
21
CHAINS
WEST PLOTTED
39
Transaction: PA PERMIT
AMENDED
Transaction Date:
12-27-1989
Time: 145647
SubSystem ID:
CAS
Input
Date: 12-27-1989
User: NRSCJWO
Terminal:
NAMB
STATUS
11
11
PERMT ISSD
PERMIT
SIGNED BY
G PROKOSCH
M/C
ON NATIVE LANDS EXTENDED PERMIT TO 09/30/94
Transaction: TRSFR CASE
TRANSFERRED
Transaction Date:
07-08-1993
Time: 134253
SubSystem ID:
CAS
Input
Date: 08-31-1993
User: NRSCCCO
Terminal:
NMA6
NEW
REL CODE A
10
OWNER
OLD
REL CODE A
10
OWNER
TRANSFEREE
A CID NUMBER
21340
LYMAN RESOURCES INC
TRANSFEROR
A CID NUMBER
167697
CALISTA CORP
OWNERSHIP
CHANGE PER NOTE ON BILLING RECPT THIS DATE
Transaction: CLO CLOSED
Transaction Date:
07-21-1995
Time: 85958
SubSystem ID:
CAS
Input
Date: 10-02-1995
User: NWRCAMO
Terminal:
NARV
STATUS
40 TO 44
44
CLOSED
CLOSED
BY
KML/ALM
NO
RESPONSE TO 30-DAY EXP PER LETTER.
Transaction: REQPLT REQUEST
DTS FLAT UPDATE
Transaction Date:
07-21-1995
Time: 90023
SubSystem ID:
CAS
Input
Date: 10-02-1995
User: NWRCAMO
Terminal:
NARV
ACTION
DEL
DELETE POINT
FILE
CLOSED 7/21/1995
Transaction: PA PERMIT
AMENDED
Transaction Date:
04-01-1996
Time: 153556
SubSystem ID:
CAS
Input
Date: 04-22-1996
User: NWRCBKU
Terminal:
X205
STATUS
11
11
PERMT ISSD
PERMIT
SIGNED BY
GJP
FILE
REOPENED PERMIT AMENDED TO EXTEND UNTIL 9/30/2004 ONE-YEAR
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Page 4 of 5
PERMIT
PER 11 AAC 93.930, IF NO OBJECTIONS; EXPIRES 9/30/2004
Transaction: REQPLT REQUEST
DTS PLAT UPDATE
Transaction
Date: 04-22-1996
Time:
153227
SubSystem
ID: CAS
Input
Date: 04-22-1996
User: NWRCBKU
Terminal:
X205
ACTION
ADD
ADD POINT
CHAINS:
N21 W39 SECTION 27, T23N, R49W, SM. PERMIT ISSUED.
Transaction: OFF
OFFICE OF PRIMARY RESPONSIBILITY CHANGED
Transaction Date:
04-29-2004
Time: 104919
SubSystem ID:
CAS
Input
Date: 04-29-2004
User: NWRCLCA
Terminal:
X3HT
OLD
CODE
WANC
WATER MGT-ANCHORAGE
NEW
CODE
WFBX
WATER MGT-FAIRBANKS
DATA
ENTERED BY
LC
MINING
FILE ASSIGNED TO FAIRBANKS OFFICE
Transaction: BENE
STATEMENT OF BENEFICIAL USE RECEIVED
Transaction
Date: 09-29-2011
Time: 74353
SubSystem ID:
CAS
Input
Date: 10-03-2011
User: NWRCKPL
Terminal:
X5XO
DATA
ENTERED BY
KP
STATEMENT
OF BENEFICIAL USE RECEIVED ON SEPT. 29, 2011
Transaction: PMTREV
PERMIT UNDER REVIEW FOR AMENDMENT
Transaction
Date: 09-29-2011
Time: 74456
SubSystem ID:
CAS
Input
Date: 10-03-2011
User: NWRCKPL
Terminal:
X5XO
STATUS
37
37
PERMIT PEND. ACTION
AUTHORIZED
BY
KP
STATEMENT
OF BENEFICIAL USE RECEIVED ON SEPT. 29, 2011 IN THE ANCHORAGE OFFICE. WILL SEND TO FAIRBANKS WHERE FILE IS LOCATED.
Transaction: COMMENTS
COMMENTS
Transaction
Date: 10-10-2011
Time: 164035
SubSystem ID:
CAS
Input
Date: 10-10-2011
User: NWRCCCU
Terminal:
X409
SBU
FORM RECEIVED AT FAIRBANKS OFFICE
PRIVATE
MINING LEASE A6226
Legal Description
THAT PORTION OF CROOKED CREEK WITHIN THE BELOW DESCRIBED PARCEL
OF PROPERTY.
THE LOCATION TO WHICH THIS WATER RIGHT APPERTAINS IS:
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Land Administration System
Page 5 of 5
THAT CERTAIN PARCEL OF PROPERTY LEASED TO MR. SPENCER LYMAN, A.K.A.
LYMAN RESOURCES IN ALASKA, INC., BY THE CALISTA CORPORATION, LOCATED WITHIN THE S1/2 PROTRACTED SECTION 13; S1/2 PROTRACTED SECTION 14;
PROTRACTED SECTION 23; W1/2, NE1/4 PROTRACTED SECTION 24; W1/2, NE1/4 PROTRACTED SECTION 26; E1/2 PROTRACTED SECTION 27, TOWNSHIP 23
NORTH, RANGE 49 WEST, SEWARD MERIDIAN, KUSKOKWIM RECORDING DISTRICT, STATE OF ALASKA.
End of Case Detail
Department of Natural Resources
550 W. 7th Ave, Suite 1260, Anchorage, AK 99501-3557
Phone: 907-269-8400 || Fax: 907-269-8401 || TTY: 907-269-8411
State of Alaska || © 2010 || Webmaster
http://dnr.alaska.gov/projects/las/Case_Detail.cfm?FileType=ADL&FileNumber=73644&...4/17/2012
EX-10.5 — EXHIBIT 10.5
EX-10.5
Filename: tm2625949d2_ex10-5.htm · Sequence: 6
Exhibit 10.5
BIDDER’S PREFERENCE AGREEMENT
THIS
BIDDER’S PREFERENCE AGREEMENT, dated effective June 6, 2014 (hereinafter referred to as “Agreement”),
regardless of the dates upon which it actually is executed by the parties hereto, is by and among: (a) DONLIN GOLD LLC, a Delaware
limited liability corporation whose address is 4720 Business Park Blvd., Suite G-25, Anchorage, Alaska 99503 (hereinafter referred to
as “DGLLC”); (b) CALISTA CORPORATION, an Alaskan corporation whose address
is 301 Calista Court, Suite A, Anchorage, Alaska 99518 (hereinafter referred to as “Calista”);
and (c) THE KUSKOKWIM CORPORATION, an Alaskan corporation whose address is 4300 B Street, Suite 207, Anchorage, Alaska 99503 (hereinafter
referred to as “TKC”).
RECITALS
A.
DGLLC, formerly known as Donlin Creek LLC, (“DCLLC”) and Calista are parties
to a Restated Exploration and Lode Mining Lease, dated effective May 1, 1995 (hereinafter referred to as the “Mining
Lease”).
B.
Pursuant to the Mining Lease, Calista has granted to DGLLC the right to explore and mine certain surface and subsurface lands owned
by Calista in the Kuskokwim and/or Mt. McKinley Recording Districts, Seward Meridian, Alaska (hereinafter referred to collectively as
the “Calista Property”).
C.
Pursuant to Section 7.7 of the Mining Lease, bidder’s preferences were reserved to Calista with respect to certain work on
or for the Calista Property.
D.
TKC owns surface lands that overlie certain of the subsurface lands included in the Calista Property, as well as other surface
lands in the surrounding area (hereinafter referred to collectively as the “TKC Property”).
E.
TKC and Placer Dome, U.S. Inc., DGLLC’s predecessor in interest under the Mining Lease, entered into a Surface Use Agreement,
dated effective June 5, 1995 (hereinafter referred to as the “1995 SUA”), with respect
to certain lands within the TKC Property.
F.
TKC and DGLLC currently are negotiating terms for an amended or new Surface Use Agreement (hereinafter referred to as the “New
SUA”), which would include certain additional TKC Property.
G.
The parties hereto intend that the New SUA will include provisions that reserve bidder’s preferences to TKC.
H.
DGLLC intends to develop a mine (hereinafter referred to as the “Donlin Gold Mine”)
that will require the use of both the Calista Property and certain areas of the TKC Property.
I.
DGLLC, Calista and TKC wish to enter into this Agreement to set forth their agreement regarding the respective priorities of Calista
and TKC in receiving bidder’s preferences in connection with work in support of the Donlin Gold Mine.
AGREEMENT
NOW, THEREFORE, for and in
consideration of the mutual promises and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1.
Condition Precedent for this Agreement and Termination. This Agreement is contingent upon DGLLC and TKC executing the New
SUA on or before June 13, 2014. If they have not done so by that date, this Agreement shall terminate automatically as of that date and
shall no longer be of any force or effect, and the parties shall have no further obligations to one another under this Agreement. This
Agreement shall otherwise terminate automatically upon termination of the Mining Lease or New SUA.
2.
Amendment of Section 7.7 of Mining Lease. When DGLLC and TKC execute the New SUA, it is the intent of the parties hereto
that the New SUA shall provide for a TKC “winner’s” bid preference (“TKC Bid
Preference”) [***], to be defined within the New SUA. It is the further intent of the parties hereto to amend
Section 7.7 of the Mining Lease to update the Calista bidder’s preference (“Calista Bid
Preference”) [***]. Therefore, upon the contingency set
forth in Section 1 above being satisfied, DGLLC and Calista hereby agree that Section 7.7 in the Mining Lease shall be amended to read
as set forth below, effective upon the effective date of the New SUA.
7.7 Bidder’s Preference Reserved to Calista:
On or before March 31 of each year,
DCLLC shall deliver to Calista a written notice describing the types of contracts for which or on which DCLLC may be seeking proposals
or bids for work on the Property during the next twelve (12) months. In addition, whenever during the term of this Agreement DCLLC seek
proposals for or bids on any contract, for work on or for the Property, DCLLC shall:
(a)
Notify Calista in the same manner as it notifies others from whom it is seeking proposals for bids on such contracts; and
(b)
Invite Calista or its affiliates to submit proposals for or bids on such contract. Any proposal or bid submitted by Calista or
its designee shall be accepted if Calista or the affiliate is competent and capable of performing said proposal or bid and if:
(i)
Said proposal or bid is substantially equivalent to or better than (in terms of quality and time of performance) the lowest qualified
proposal or bid received by DCLLC which DCLLC otherwise would have accepted; and
(ii) the cost of said proposal or bid does not exceed by more than five percent (5%) the cost of the lowest qualified proposal or bid
received by DCLLC which DCLLC otherwise would have accepted.
2
DCLLC reserves
the right to require a performance bond or guaranty from any designated contractor. DCLLC further reserves the right to perform any and
all operations contemplated by this Agreement by itself without seeking any proposals or bids.
DCLLC shall include
in all of its agreements with contractors for the performance of activities or operations on the Property a provision concerning bidder’s
preference similar to this Section 7.7. Nothing in this Section shall limit DCLLC’s ability to enter contracts with a duration greater
than one year provided that the provisions of this Section are complied with at the initiation of the contract.
(c)
Whenever during the term of this Agreement, commencing with June 6, 2014, DCLLC elects to seek cost estimates for a contract for
work on or for the Property,, DCLLC shall notify Calista in the same manner as it notifies others from whom it is seeking cost estimates,
and in that notification provide Calista with the same information that DCLLC provides to the others with respect to such cost estimate
requests.
(d)
This Section 7.7 shall not apply and Calista affiliates shall not be entitled to any bidder preference under this Agreement for
the Jungjuk Port contracting described in Section 4.F of the Bidder’s Preference Agreement referenced in Section 7.2 of this Agreement.
3.
Amendment of Section 7.2 of Mining Lease. DGLLC and Calista hereby agree that Section 7.2 in the Mining Lease shall be amended
to read as set forth below, effective upon the effective date of the New SUA.
7.2 Confidentiality:
(a)
For the term of this Agreement, the parties agree to treat this Agreement and all Information relating to this Agreement as confidential.
Such information shall not be disclosed to any other third party except corporations or business entities which control, are controlled
by or are under common control with a party hereto, without the prior written agreement of DCLLC or Calista, as the case may be; and in
the event of a permitted disclosure of Information to an unrelated third party, such party shall prior to disclosure thereof be required
to execute an agreement to keep such Information confidential in the form attached as Exhibit B to the June 6, 2014 Bidder’s Preference
Agreement between DGLLC, Calista, and The Kuskokwim Corporation (“TKC”) (“Bidder’s
Preference Agreement”). In the event that Calista or DCLLC is required by any law, rule, regulation, or order to disclose
to the public any Information, it shall immediately notify the other of such requirement and the terms thereof, together with a copy of
such release of Information as may be contemplated, prior to such disclosure. The party receiving such notice shall then have the right
to approve such disclosure or to request, prior to disclosure, confidential treatment of any of the information of such terms as it shall,
in its sole discretion, determine. The disclosing party shall use its best efforts to comply with such request prior to making the required
disclosure of Information.
3
Calista shall be entitled to discuss
and share confidential information with TKC, provided that TKC has executed a confidentiality agreement in the form attached as Exhibit
B to the Bidder’s Preference Agreement.
(b)
Following expiration or termination of this Agreement, Calista may not disclose to others Information provided Calista hereunder,
unless such disclosure shall be accompanied by a disclaimer of any representation as to the accuracy or reliability of such Information
for any purpose.
(c)
Information relating to this Agreement to be kept confidential shall not include a description of Calista’s bidder’s
preference in Section 7.7, as amended by the Bidder’s Preference Agreement, or information, data, knowledge, and know-how, as shown
by written records, that: (i) is in the public domain prior to disclosure to Calista or DCLLC by the other pursuant to this Agreement,
as the case may be; or (ii) lawfully enters the public domain through no violation of this Agreement after disclosure to Calista or DCLLC
by the other pursuant to this Agreement, as the case may be. However, Information relating to this Agreement to be kept confidential shall
include all analyses, interpretations, compilations, studies, or evaluations of such information, data, knowledge, and know-how generated
or prepared by or on behalf of Calista or DCLLC.
4.
Calista and TKC Bid Priorities and Disputes.
[***]
4
5.
Agreements Solely Between Calista and TKC.
A.
The provisions in this Section 5 are agreements solely between Calista and TKC regarding rights, obligations, and understandings
between those two parties only and do not create or have any effect whatsoever on DGLLC’s obligations, rights, or liabilities under
this Agreement, the Mining Lease, New SUA, or otherwise.
B.
Bids for work not described on Exhibit A. [***]
C.
Resolution of disputes between Calista and TKC. [***]
5
6.
General Provisions.
A.
Entire agreement. This Agreement contains all of the representations and agreements between the parties with respect to
the bidder preference subject matter hereof. With respect to the bidder preference subject matter hereof only, this Agreement shall supersede
and replace any and all prior representations, negotiations and agreements of the parties.
This Agreement shall be interpreted
to the maximum extent practicable to be consistent with the Mining Lease, as amended by Sections 2 and 3 of this Agreement, and the New
SUA, upon the effective date of said amendments and the New SUA. In the event of an irreconcilable conflict regarding the bidder preference
subject matter hereof between this Agreement and the Mining Lease, as so amended, the New SUA, or both, this Agreement shall supersede
the Mining Lease and the New SUA to the extent of and with respect to that conflict. No modification or waiver of the terms and conditions
of this Agreement shall be binding upon any other party unless in writing, dated subsequent to the effective date of this Agreement, and
executed by an authorized representative of such party. No waiver by any party of a breach of any of the provisions of this Agreement
shall be construed as a waiver of any subsequent breach, whether of the same or a different character.
B.
Further instruments. The parties hereto agree that they will execute any and all other instruments that may be necessary
or required to carry out and effectuate any and all of the provisions of this Agreement.
C.
Binding effect. This Agreement shall be binding upon, and shall inure to, the benefit of the parties hereto, their successors
and assigns under this Agreement and under the Mining Lease and the New SUA.
D.
Waiver and savings. The parties each waive any failure of this Agreement to comply with the requirements of any statute
or public policy to the full extent that such compliance may be waived. If, notwithstanding such waiver, should any court or arbitrator
of competent jurisdiction find that any of the covenants in this Agreement (including the amendments to Sections 7.2 and 7.7 of the Mining
Lease and to the New SUA regarding the bidder preference subject matter hereof that are provided for or referenced in this Agreement)
is unlawful, unenforceable, unreasonable or against public policy, then in that event the parties agree that such covenants shall be interpreted
and enforced to the maximum extent that the court or arbitrator deems lawful, enforceable, reasonable or consistent with public policy,
respectively.
E.
Notices. All notices permitted or required by this Agreement shall be either in writing, directed to the President of the
party in question at the address in the first paragraph of this Agreement; or electronically, directed to that President. Notices shall
be deemed effective when received by the party to which it is directed. Any party may, from time to time, change its officer or address
for future notices hereunder by notice in accordance with this Section.
F.
Choice of law and forum. The interpretation and enforcement of this Agreement shall be governed by the law of the State of Alaska.
Venue for any legal action (excepting only arbitration under Section 5.C hereof) shall be the courts of the State of Alaska, Third Judicial
District, or a U.S. Court for the District of Alaska, in Anchorage, Alaska.
6
WHEREFORE, the parties hereto
have through their duly authorized representatives executed this Agreement to be effective as of the date first above written.
DONLIN GOLD LLC
By:
/s/ Stan Foo
Title:
President and General Manager
CALISTA CORPORATION
THE KUSKOKWIM CORPORATION
By:
/s/ Andrew Guy
By:
/s/ Maver Carey
Title:
President + CEO
Title:
President / CEO
7
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Oct. 05, 2026
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