SIGNIFICANT CONTRACTS

12 Months Ended

Dec. 31, 2021

Disclosure Text Block [Abstract]

Significant Contracts

NOTE 15 – SIGNIFICANT CONTRACTS

On November 23, 2020 the Company entered into a Exclusivity and Collaboration Agreement with a Korea-domiciled manufacturer {“Purchaser”) of specialty industrial equipment. As part of the agreement the Buyer purchased 334 tons of halloysite clay located at the Dragon Mine (Eureka, UT) for total proceeds of $1,000,000.

For a period of ten (10) years from the Effective Date (“Initial Term”), AMI will exclusively work with the Purchaser to commercialize the use of halloysite clay and/or its derivatives for use in a battery technology for the Korean Market (the Korean Market is defined as companies domiciled in Korea that manufacture, market and/or sell battery technologies in Korea, outside Korea or both).

Upon the successful development of halloysite clay and/or its derivatives for use in a battery technology, the Purchaser and AMI will negotiate in good faith and agree upon the calculation and other terms of a quarterly payment (“Sales Royalty Payment”) to be paid to AMI by the Purchaser. The Sales Royalty Payment will be based on a percentage of sales generated by the Purchaser of halloysite and/or its derivatives in a battery technology for the Korean Market.

If AMI or the Purchaser terminates the Agreement prior to the second anniversary of the Effective Date, AMI will make a commercially reasonable effort to sell any remaining balance of the Initial Halloysite Clay Purchase to one or more third parties on behalf of the Purchaser.

The Term of the Agreement will renew after the Initial Term for additional five (5) year periods unless terminated by either the Purchaser or AMI.

The Agreement contains other standard conditions with respect to intellectual property, confidential information, governing law and dispute resolution.

As of April 15, 2022, the Company has not received written communication from the Purchaser it has terminated the Exclusivity and Collaboration Agreement.

On August 21, 2018 (“Effective Date”), Applied Minerals, Inc. (the “Company”) and the purchaser of the Company’s Surface Piles (“Purchaser”) entered into a Sale Agreement (the “Agreement”) for the sale of five Surface Piles for Initial Consideration of $4,546,145 and Additional Consideration of $1.00 per ton of Surface Pile material removed by Purchaser or its Agents from the Dragon Mine property. The Surface Piles include 4,546,145 tons of Surface Pile material, a mixture of halloysite, kaolinite and illite clays and a range of non-clay minerals.

It is solely the responsibility of Purchaser to remove the Surface Pile material from the Company’s Dragon Mine Property.  Purchaser will have 60 years to remove Surface Pile material. Thereafter, ownership of any Surface Pile material remaining on the Dragon Mine property will automatically revert to the Company. Purchaser may from time to time transfer to the Company any Surface Pile material that it decides will not be removed.

Purchaser may bring on to Dragon Mine Property equipment and personnel reasonably acceptable to the Company for measuring, weighing, testing, crushing and otherwise processing, air-drying, commingling, storing, loading, removing documenting, or selling in connection with the Surface Piles

The Company may relocate a Surface Pile if the Purchaser agrees and such agreement will not be unreasonably withheld.  Purchaser will not, and will cause its Agents not to, interfere in any material respect with the operations of the Company.