EX-10.02 3 ex10-02.txt EXHIBIT 10.02 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL MONTANA PGM VENTURE JOINT VENTURE AGREEMENT Dated February 1, 2000 BETWEEN IDAHO CONSOLIDATED METALS CORPORATION AND CHROME CORPORATION OF AMERICA Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL TABLE OF CONTENTS ARTICLE 1. DEFINITIONS.................................................... 1 ARTICLE 2. REPRESENTATIONS AND WARRANTIES; TITLE TO ASSETS................ 5 2.1. Capacity of Participants .................................... 5 2.2. Representations and Warranties Relating to Property.......... 5 2.3. Remedies for Breach of Representations and Warranties of Title to the Properties.................................. 6 2.3.1. Loss of Title ....................................... 6 2.3.2. Less than 100% Interest.............................. 7 2.3.3. Third Party Claims................................... 7 2.4. Disclosures.................................................. 7 2.5. Record Title................................................. 8 ARTICLE 3. NAME, PURPOSES AND TERM........................................ 8 3.1. General...................................................... 8 3.2. Name ........................................................ 8 3.3. Purposes..................................................... 8 3.4. Limitation .................................................. 8 3.5. Effective Date and Term...................................... 8 ARTICLE 4. RELATIONSHIP OF THE PARTICIPANTS............................... 9 4.1. No Partnership............................................... 9 4.2. U.S. and State Tax Elections and Allocations................. 9 4.3. Other Business Opportunities................................. 9 4.4. Waiver of Right to Partition ................................ 10 4.5. Transfer or Termination of Rights to Properties.............. 10 4.6. Implied Covenants ........................................... 10 ARTICLE 5. CONTRIBUTIONS BY PARTICIPANTS.................................. 10 5.1. Participants' Initial Contributions.......................... 10 5.2. Obligations Prior to Earn-In ................................ 10 5.2.1. Annual and Cumulative Exploration Expenditures Commitment.............................. 11 5.2.2. Overhead Charges During Earn-In...................... 11 5.2.3. Carryforward of Excess Cumulative Exploration Expenditures............................ 11 5.2.4. Maintenance of Properties During Earn-In............. 11 5.3. Payments By ICMC to CCA...................................... 11 5.3.1. Payment at Closing................................... 11 5.3.2. Annual Payment of Stock.............................. 11 5.3.3. Crescent Creek Net Smelter Return.................... 12 5.4. Termination of ICMC's Obligation to Make Initial Contribution................................................ 12 5.5. Additional Cash Contributions................................ 12 5.6. Earn-In...................................................... 12 5.7. Reports...................................................... 12 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL ARTICLE 6. INTERESTS OF PARTICIPANTS: DEFAULTS AND REMEDIES...................................................... 13 6.1. Participating Interests...................................... 13 6.2. Elections at Time of Earn-In................................. 13 6.3. Deemed Expenditures.......................................... 13 6.4 Changes in Participating Interests........................... 13 6.5 Voluntary Reduction in Participation......................... 14 6.6. Default in Making Contributions ............................. 15 6.7. Conversion of Interest....................................... 15 6.8. Continuing Liabilities Upon Adjustments of Participating Interests..................................... 15 ARTICLE 7. MANAGEMENT COMMITTEE........................................... 16 7.1. Organization and Composition................................. 16 7.2. Decisions.................................................... 16 7.3. Meetings..................................................... 16 7.4. Action Without Meeting....................................... 17 7.5. Matters Requiring Approval................................... 17 ARTICLE 8. MANAGER........................................................ 17 8.1. Appointment.................................................. 17 8.2. Powers and Duties of Manager................................. 17 8.3. Standard of Care............................................. 21 8.4. Resignation; Deemed Offer to Resign.......................... 21 8.5. Payments to Manager.......................................... 22 8.6. Transactions With Affiliates................................. 22 8.7. Activities During Deadlock................................... 22 ARTICLE 9. PROGRAMS AND BUDGETS........................................... 22 9.1. Initial Program and Budget .................................. 22 9.2. Operations Pursuant to Programs and Budgets.................. 22 9.3. Presentation of Programs and Budgets......................... 22 9.4. Review and Approval of Proposed Programs and Budgets......... 22 9.5. Election to Participate...................................... 23 9.6. Deadlock on Proposed Programs and Budgets.................... 23 9.7. Budget Overruns; Program Changes............................. 23 9.8. Emergency or Unexpected Expenditures......................... 23 ARTICLE 10. ACCOUNTS AND SETTLEMENTS...................................... 24 10.1. Matters of Accounts and Settlements.......................... 24 ARTICLE 11. DISPOSITION OF PRODUCTION..................................... 24 11.1. Taking in Kind............................................... 24 11.2. Failure of Participant to Take in Kind....................... 24 ARTICLE 12. WITHDRAWAL AND TERMINATION.................................... 24 12.1. Termination by Expiration or Agreement....................... 24 12.2. Withdrawal................................................... 25 12.3. Continuing Obligations....................................... 25 12.4. Disposition of Assets on Termination......................... 25 12.5. Right to Data after Termination.............................. 25 12.6. Continuing Authority......................................... 26 12.7. Non-Compete Covenants........................................ 26 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL 12.8. Mutual Withdrawal............................................ 26 12.9. Rights to Data After Termination............................. 26 ARTICLE 13. SURRENDER OF PROPERTIES....................................... 27 13.1. Surrender of Properties...................................... 27 13.2. Reacquisition................................................ 27 ARTICLE 14. TRANSFER OF INTEREST.......................................... 27 14.1. General...................................................... 27 14.2. Limitations on Free Transferability.......................... 27 14.3. Right of First Refusal....................................... 28 14.4. Exceptions to Right of First Refusal ........................ 29 ARTICLE 15. CONFIDENTIALITY AND RELEASES.................................. 29 15.1. General...................................................... 29 15.2. Exceptions................................................... 29 15.3. Duration of Confidentiality.................................. 30 ARTICLE 16. AREA OF INTEREST.............................................. 30 16.1. Acquisitions in Area of Interest............................. 30 ARTICLE 17. GENERAL PROVISIONS............................................ 31 17.1. Notices...................................................... 31 17.2. Waiver....................................................... 33 17.3. Modification................................................. 33 17.4. Force Majeure................................................ 33 17.5. Economic Force Majeure....................................... 33 17.6. Governing Law ............................................... 33 17.7. Rule Against Perpetuities.................................... 34 17.8. Further Assurances........................................... 34 17.9. Survival of Terms and Conditions............................. 34 17.10. Entire Agreement; Successors and Assigns..................... 34 17.11. Memorandum................................................... 34 17.12. Funds........................................................ 34 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL LIST OF EXHIBITS EXHIBIT A PROPERTIES Exhibit A-1 Nickel/Copper Lease Exhibit A-2 Chrome Lease Exhibit A-3 Crescent Creek Claims EXHIBIT B ACCOUNTING PROCEDURES EXHIBIT C NET SMELTER RETURN ROYALTY EXHIBIT D INSURANCE EXHIBIT E AREA OF INTEREST EXHIBIT F NICKEL/COPPER LEASE EXHIBIT G CHROME LEASE EXHIBIT H MINING DEED AND ASSIGNMENT Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL JOINT VENTURE AGREEMENT THIS AGREEMENT, made effective as of February 1, 2000, is between IDAHO CONSOLIDATED METALS CORPORATION ("ICMC") with an address of P.O. Box 1124, Lewiston, Idaho 83501 and CHROME CORPORATION OF AMERICA ("CCA") with aaddress of 5613 S. Prince St., Littleton, Colorado 80120-1127. RECITALS A. ICMC and CCA entered into a Memorandum of Understanding dated January 18, 2000 agreeing to form a Joint Venture to explore and develop property leased by or owned by CCA. B. ICMC wishes to participate with CCA in exploration, evaluation , development and mining of minerals within the property and CCA is willing to grant such right to ICMC. NOW, THEREFORE, in consideration of the covenants and agreements contained herein, ICMC and CCA agree as follows: ARTICLE 1. DEFINITIONS "Accounting Procedure" means the procedures set forth in Exhibit B. "Affiliate" means any person, partnership, joint venture, corporation or other form of enterprise which directly or indirectly controls, is controlled by, or is under common control with, a Participant. For purposes of the preceding sentence, "control" means possession, directly or indirectly, of the power to direct or cause direction of management and policies through ownership of voting securities, contract, voting trust or otherwise. "Agreement" means this Joint Venture Agreement, including all amendments and modifications thereof, and all schedules and exhibits, which are incorporated herein by this reference. "Area of Interest" means the Stillwater Complex of Montana excluding claims filed by ICMC prior to the date of this Agreement and the Platinum Fox Lease Agreement entered into by ICMC on July 16, 1999 and as shown in Exhibit E. "Assets" means the Properties, Products and all other real and personal property, tangible and intangible, held for the benefit of the Participants hereunder. "Budget" means a detailed estimate of all costs to be incurred by the Participants with respect to a Program and a schedule of cash advances to be made by the Participants. Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL "Commencement of Commercial Production" means the date upon which the production and processing facilities developed under this Agreement achieve an ore production and processing rate for a continuous thirty-day period equal to at least seventy percent (70%) of the design rate established in a Feasibility Study. "Development" means all preparation for the removal and recovery of Products, including the construction or installation of a mill or any other improvements to be used for the mining, handling, milling, processing or other beneficiation of Products, and all Exploration work conducted subsequent to a decision to commence Development as contemplated by a Feasibility Study. "Earn-In" means the date upon which ICMC earns its interest in the Venture pursuant to Section 5.6. "Exploration" means all activities directed toward ascertaining the existence, location, quantity, quality or commercial value of deposits of Products. "Exploration Expenditures" means the cost of evaluation of the Properties, defined as further exploring and developing the Properties, including drilling, excavating and searching by recognized prospecting techniques, sampling, assaying, testing and evaluating materials removed from the Properties, mapping, plotting, surveying, constructing and maintaining camps, roads, works and structures necessary to carry out such evaluation, sampling or testing, all studies including but not limited to a Feasibility Study required to develop a mine and all work that may be required in preparing a mine for operating, the cost or payments to maintain the Properties, including costs to locate and/or relocate the unpatented mining claims, costs to maintain the underlying agreements through which the Property is acquired and lease payments reimbursed by ICMC to CCA for maintaining the Mouat Leases, Property acquisition costs, taxes and/or fees to maintain Property and filings together with an allowance for overhead and administrative expenses as described in Section 5.3.1. These expenditures include both exploration costs as defined in Section 617 of the Internal Revenue Service Code and development expenditures as defined in Section 616 of the Internal Revenue Service Code. "Feasibility Study" means a detailed study compiled by Manager or an independent third party conducted to determine commercial feasibility and viability of placing a prospective orebody or deposit into production and may include, but not be limited to: (i) such geophysical, geochemical, geological, aerial or other survey as may be necessary to provide a reasonable estimate of the quality and extent of the deposit; (ii) such technical or assay reports as may be necessary to evaluate any proposed method of extraction and processing; (iii) the area required for optimum development of the orebody or deposit; 2 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL (iv) a mine construction program setting forth the descriptions of the work, permits, equipment, facilities, supplies and mines required to bring the prospective orebody or deposits of Products into Commercial Production, and the estimated costs thereof or a schedule of expenditures by year of the costs necessary to bring the project into production; (v) details of a proposed annual program for initial development of the deposit; (vi) a plan for such reclamation of the Properties as is required by law and the estimated costs hereof; (vii) conclusions and recommendations regarding the economic feasibility and timing for bringing the prospective orebody or deposits of Products into Commercial Production, taking into account items (i) through (vi) above; (viii) such other information as the Management Committee may deem appropriate to allow banking or other financial institutions familiar with the mining business to make a decision to loan funds sufficient to construct the proposed mine with security based solely on the reserves and mine described in a Feasibility Study. "Initial Contribution" means that contribution each Participant has made or agrees to make pursuant to Section 5.1. "Joint Account" means the account maintained in accordance with the Accounting Procedure showing the charges and credits accruing to the Participants. "Management Committee" means the committee established under Article 7. "Manager" means ICMC during the Earn-In phase or the person or entity appointed under Article 8 to manage Operations, or any successor Manager. "Mining" means the mining, extracting, producing, handling, milling or other processing of Products. "Mouat Leases" are the Nickel/Copper Lease as attached in Exhibit F and the Chrome Lease as attached in Exhibit G. "Operations" means the activities carried out under this Agreement after Earn-In. 3 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL "Participant" and "Participants" means the persons or entities that have a Participating Interest. "Participating Interest" means the percentage interest representing the operating ownership interest of a Participant in Assets, and all other rights and obligations arising under this Agreement, as such interest may from time to time be adjusted hereunder. Participating Interests shall be calculated to three decimal places and rounded to two (e.g., 1.519% rounded to 1.52%). Decimals of .005 or more shall be rounded up to .01, decimals of less than .005 shall be rounded down. The initial Participating Interests of the Participants are set forth in Section 6.1. "Prime Rate" means the prime interest rate quoted as "Prime" by the Wall Street Journal as said rate may change from day to day (which quoted rate may not be the lowest rate averaged on a month-to-month basis at which a financing institution loans funds). "Production Decision" means a decision by the Management Committee to commence Development and put the Properties into production. "Products" means all ores, minerals, and mineral resources produced from the Properties prior to treatment. It also includes all concentrates, precipitates and products produced from the Properties under this Agreement. "Program" means a description in reasonable detail of the activities of the Venture which are to be conducted by the Manager during a period. "Properties" means those interests in properties described in Exhibits A-1, A-2 and A-3 and all other interests in real property acquired after February 1, 2000 and held subject to this Agreement. Exhibits A-1, A-2 and A-3 may be collectively referred to as Exhibit A. "Simple Majority" means a decision by the Management Committee by greater than 50% of the votes entitled to be cast. "Transfer" means sell, grant, assign, encumber, pledge or otherwise commit or dispose of. "Venture" means the business arrangement of the Participants under this Agreement. 4 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL ARTICLE 2. REPRESENTATIONS AND WARRANTIES; TITLE TO ASSETS 2.1. Capacity of Participants Each of the parties hereto represents and warrants as follows: 2.1.1. That it is a corporation duly incorporated and in good standing in its state or province of incorporation and that it is qualified to do business and is in good standing in those jurisdictions where necessary in order to carry out the purposes of this Agreement; 2.1.2. That it has the capacity to enter into and perform this Agreement and all transactions contemplated herein and that all corporate and other actions required to authorize it to enter into and perform this Agreement have been properly taken; 2.1.3. That it will not breach any other agreement or arrangement by entering into or performing this Agreement; and 2.1.4. That this Agreement has been duly executed and delivered by it and is valid and binding upon it in accordance with its terms. 2.2. Representations and Warranties Relating to Property CCA makes the following representations and warranties effective the date hereof: 2.2.1. CCA has the full and exclusive right and power to act on behalf of CCA, and on behalf of any other interested person or entities, to enter into this Agreement and to grant the rights granted by CCA hereunder. 2.2.2. The Mouat Leases are valid leases covering 107 unpatented mineral claims and 32 patented claims. CCA has the right to extend the Mouat Leases as described in Exhibit F and Exhibit G. CCA has notified the lessors of this Agreement. 2.2.3. To the best of its knowledge and belief with respect to unpatented mining claims set forth in Exhibit A and that are included within the Properties, subject to the paramount title of the United States and except as disclosed in writing to ICMC: (i) the unpatented mining claims were properly laid out and monumented; (ii) all required location and validation work was properly performed; (iii) location notices and certificates were properly recorded and filed with appropriate governmental agencies; 5 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL (iv) the claims are free and clear of defects, liens and encumbrances arising by, through or under CCA, except those of record, state and federal environmental and development laws, rules and regulations, or disclosed in writing to ICMC as listed in Exhibits F and G and in this Agreement and defects, liens, and any such encumbrances that do not materially affect ICMC's rights under this Agreement; (v) CCA has not received notice from anyone asserting conflicting claims; and (vi) the unpatented mining claims are in good standing and compliance with all federal and state regulations in force as of the effective date of this Agreement. Nothing in this Section 2.2.2, however, shall be deemed to be a representation or a warranty that any of the mining claims contains a discovery of minerals. 2.2.4. CCA knows of no violation of any applicable federal, state, regional, or county law or regulation relating to zoning, land use, environmental protection, or otherwise with respect to the Properties or activities relating thereto; and, 2.2.5. With respect to the Properties, CCA knows of no pending or threatened actions, suits, claims or proceedings. 2.2.6 CCA has granted ICMC access to all information concerning title to the Properties in CCA's possession or control, including but not limited to, true and correct copies of all leases, other contracts and abstracts relating to the Properties of which CCA has knowledge. The representations and warranties set forth above shall survive the execution and delivery of any documents of Transfer provided under this Agreement. 2.3. Remedies for Breach of Representations and Warranties of Title to the Properties 2.3.1. Loss of Title Any failure or loss of title to the Properties, and all costs of defending title, shall be charged to the Joint Account, except that all costs and losses arising out of or resulting from breach of the representations and warranties of CCA shall be charged to CCA and all such costs and losses arising out of gross negligence by ICMC or the Manager shall be charged to ICMC or the Manager as the case may be. ICMC shall have the right, but not the obligation, to undertake to cure such defects or to defend or to initiate litigation to defend such defects. 2.3.2. Less than 100% Interest In the event it is determined that CCA controls less than the full undivided interest therein, CCA's interest hereunder shall bear the same proportion to 100% as its total actual interest bears to the full undivided whole. 2.3.3. Third Party Claims 6 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL (a) If CCA fails to satisfy and discharge any mortgage, lien, tax levy or encumbrance (an "Encumbrance") chargeable solely or in part to CCA on the claims listed on Exhibit A or the underlying agreements, or suffers or permits any Encumbrance to be imposed upon such, ICMC at its option may, but shall not be obligated to, pay for and discharge any Encumbrance and set off such payment by withholding and retaining from any payments due CCA any amounts so paid by ICMC, without prejudice to any right of ICMC to recover from CCA the amount of such payment, in any manner or by any remedy whatsoever, and ICMC shall have all the rights and remedies against CCA which the mortgagor, lienor or creditor had immediately prior to the time of such payment. Upon the request of ICMC, CCA shall promptly make, execute, acknowledge and deliver to ICMC any and all instruments (in a form and substance satisfactory to ICMC) that ICMC in its sole judgment may deem necessary or desirable to fully effectuate the provisions of this section 2.3. (b) If any person or entity not a party hereto asserts to have a claim of ownership in the claims listed on Exhibit A or the underlying agreements, or a claim to a share in the production from the claims listed on Exhibit A (an "Adverse Claim"), ICMC at its sole discretion, after written notice to CCA, 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 CCA. 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. When ICMC is required or elects to make any 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, ICMC may recover from, or credit against, any payments thereafter becoming due CCA hereunder, the amount of such payments of all other costs and expenses (including reasonable attorneys fees) paid or incurred by ICMC as a result of any such Adverse Claim. 2.4. Disclosures. Each of the Participants represents and warrants that it is unaware of any material facts or circumstances which have not been disclosed in this Agreement, which would be disclosed to the other Participant in order to prevent the representations in this Article 2 from being materially misleading. 2.5. Record Title. Title to the Assets shall be held by the Venture after ICMC has earned its interest. ARTICLE 3. NAME, PURPOSES AND TERM 3.1. General . CCA and ICMC hereby enter into this Agreement for the purposes hereinafter stated, and they agree that all of their rights and all of the Operations on or related to with the Properties shall be subject to and governed by this Agreement. 7 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL 3.2. Name . The name of this Venture shall be the Montana PGM Venture. The Manager shall accomplish any registration required by applicable assumed or fictitious name statutes and similar statutes. 3.3. Purposes . This Agreement is entered into for the following purposes and for no others, and shall serve as the exclusive means by which the Participants, or either of them, accomplish such purposes: (i) to conduct Exploration within the Properties, (ii) to evaluate the possible Development of the Properties, (iii) to engage in Development and Mining Operations on the Properties, if feasible. (iv) to engage in marketing Products, but only to the extent permitted by Article 11, and (v) to perform any other activity necessary, appropriate, or incidental to any of the foregoing. 3.4. Limitation . Unless the Participants otherwise agree in writing, the Operations shall be limited to the purposes described in Section 3.3, and nothing in this Agreement shall be construed to enlarge such purposes. 3.5. Effective Date and Term. The effective date of this Agreement shall be the date first recited above. The term of this Agreement shall be for 20 years from the effective date and for so long thereafter as Products are produced from the Properties, unless the Agreement is earlier terminated as provided herein. ARTICLE 4. RELATIONSHIP OF THE PARTICIPANTS 4.1. No Partnership. Nothing contained in this Agreement shall be deemed to constitute either Participant the partner of the other, nor, except as otherwise herein expressly provided, to constitute either Participant the agent or legal representative of the other, nor to create any fiduciary relationship between them. It is not the intention of the Participants to create, nor shall this Agreement be construed to create, any mining, commercial or other partnership. Neither Participant shall have any authority to act for or to assume any obligation or responsibility on behalf of the other Participant, except as otherwise expressly provided herein. The rights, duties, obligations and liabilities of the Participants shall be several and not joint or collective. Each Participant shall be responsible only for its obligations as herein set out and shall be liable only for its share of the costs and expenses as provided herein, it being the express purpose and intention of the Participants that their ownership of Assets and the rights acquired hereunder shall be as tenants in common. Each Participant, its directors, officers, employees, agents and attorneys shall be indemnified from and against any and all losses, claims, damages and liabilities arising out of any act or any assumption of liability by the indemnifying Participant, 8 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL or any of its directors, officers, employees, agents and attorneys done or undertaken, or apparently done or undertaken, on behalf of the other Participant, except pursuant to the authority expressly granted herein or as otherwise agreed in writing between the Participants. 4.2. U.S. and State Tax Elections and Allocations . Without changing the effect of Section 4.1, the Participants agree that their relationship shall constitute a tax partnership within the meaning of Section 761(a) of the United States Internal Revenue Code of 1986, as amended. The parties hereto agree to execute or join in such instruments as are necessary to make such election effective, and hereby authorize and direct Manager to take such action as is necessary to effectuate such purpose, including filing of the partnership tax return required by Treasury Regulation ss.1.761-2(b)(2). Each party shall be entitled to claim all tax benefits, write-offs, and deductions with respect to all and any costs which it has incurred. The Participants also agree that, to the extent permissible under applicable law, their relationship shall be treated for state income tax purposes in the same manner as it is for federal income tax purposes. The Manager shall be the Tax Matters Partner and shall prepare and file, after approval of the Management Committee, any tax returns or other tax forms required. 4.3. Other Business Opportunities . Except as expressly provided in this Agreement, each Participant shall have the right independently to engage in and receive full benefits from business activities, whether or not competitive with the Operations, without consulting the other. The doctrines of "corporate opportunity" or "business opportunity" shall not be applied to any other activity, venture, or operation of either Participant. Unless otherwise agreed in writing, no Participant shall have any obligation to mill, beneficiate or otherwise treat any Products or any other Participant's share of Products in any facility owned or controlled by such Participant, other than a facility established to treat the Products of the Venture. 4.4. Waiver of Right to Partition . The Participants hereby waive and release all rights of partition, or of sale in lieu thereof, or other division of Assets, including any such right provided by statute. 4.5. Transfer or Termination of Rights to Properties, Except as otherwise provided in this Agreement, neither Participant shall transfer all or any part of its interest in the Assets or this Agreement or otherwise permit or cause such interest to terminate. 4.6. Implied Covenants . There are no implied covenants contained in this Agreement other than those of good faith and fair dealing. 9 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL ARTICLE 5. CONTRIBUTIONS BY PARTICIPANTS 5.1. Participants' Initial Contributions. CCA, as its Initial Contribution, hereby contributes the Properties described in Exhibit A to the purposes of this Agreement. ICMC, as its Initial Contribution, shall contribute the Exploration Expenditures and payment as hereinafter set forth. 5.2. Obligations Prior to Earn-In . Prior to earning its interest in the Venture, and subject to the termination provisions contained herein, ICMC shall be required, but not obligated to make the following Exploration Expenditures on or for the benefit of the Properties to extend this Agreement into the next period. 10 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL 5.2.1. Annual and Cumulative Exploration Expenditures Commitment: ICMC shall expend, as a minimum, the following annual and cumulative Exploration Expenditures: Year Annual Cumulative Expenditure Expenditure One $200,000 $200,000 Two $400,000 $600,000 Three $500,000 $1,100,000 Four $500,000 $1,600,000 Five $500,000 $2,100,000 Total $2,100,000 Year 1 for purposes of calculating annual expenditures shall end on March 31, 2001 and each subsequent year will end on March 31. 5.2.2. Overhead Charges During Earn-In. Five percent (5%) of all Exploration Expenditures, except property payments, taxes and/or fees to maintain the Properties, to cover ICMC' overhead and administrative costs shall be charged by ICMC and shall qualify as Exploration Expenditures This overhead charge is the same as overhead chargeable in accordance with the Accounting Procedure. 5.2.3. Carryforward of Excess Cumulative Exploration Expenditures. All Exploration Expenditures shall be cumulative and any Exploration Expenditures in excess of the minimum required in any period shall be credited and applied toward any Exploration Expenditures required in any subsequent period. 5.2.4. Maintenance of Properties During Earn-In. During the Earn-in period ICMC shall be responsible for maintaining the underlying agreements in good standing and for maintaining the unpatented lode claims which comprise the Properties and may relocate any of the unpatented claims which ICMC believes may be defective. Additionally ICMC agrees to reimburse CCA for the lease payments incurred by CCA pursuant to the Mouat Leases. 5.3. Payments By ICMC to CCA: 5.3.1. Payment at Closing. Upon execution of this Agreement, ICMC shall pay Five Thousand Dollars ($5,000) to CCA. 5.3.2. Annual Payment of Stock Upon signature of this Agreement and on each of the following four anniversary dates, ICMC shall issue one hundred thousand (100,000) shares of ICMC's unrestricted, registered common stock to CCA to keep this Agreement in good standing. Said stock will be delivered by January 31 of each year commencing on January 31, 2001 or upon termination by ICMC, whichever occurs sooner. 11 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL 5.3.3. Crescent Creek Net Smelter Return A three and one half percent (3.5 % ) Net Smelter Return in those unpatented claims in the Crescent Creek area known as the Ram claims and wholly owned by CCA as listed in Exhibit A-3. 5.4. Termination of ICMC's Obligation to Make Initial Contribution. ICMC may terminate this Agreement at any time during the Earn-In period for any reason or no reason by providing CCA sixty (60) days written notice of such termination. Until ICMC has earned its interest in the Venture, ICMC shall have complete discretion in conducting exploration activities, maintaining the Properties and shall conduct operations according to its own plans. ICMC shall hold CCA harmless from any liabilities resulting from ICMC's activities on the Properties during the Earn-In period. Upon ICMC's termination under the provisions of this Section 5.4, ICMC shall have no further right, title or interest in the Venture. ICMC's withdrawal shall be effective upon such failure, but such withdrawal shall not relieve ICMC of its obligation to fund and satisfy any liabilities to third persons incurred or payments due to CCA prior to ICMC's withdrawal. 5.5. Additional Cash Contributions . At such time as ICMC has earned its fifty-five percent (55%) interest in the Venture, pursuant to Section 5.2, the Participants, subject to any election permitted by Sections 6.1, 6.2 and 6.3, shall be obligated to contribute funds to adopted Programs and Budgets in proportion to their respective Participating Interest. 5.6. Earn-In . ICMC shall earn a fifty-five percent (55%) Participating Interest in the Venture upon completion of the Exploration Expenditures and payment set forth under Section 5.2. If ICMC expends the $2,100,000 commitment in Section 5.2 prior to the end of year five, it will be deemed to have earned its Participating Interest at that time. Except as provided for in Section 6.2, subsequent to ICMC earning a fifty-five percent (55%) interest in the Venture, all expenditures for the benefit of the Properties shall be contributed by the Parties in accordance to their Participating Interest. Immediately upon ICMC satisfying its Earn-In requirements under Section 5.2, CCA shall execute and deliver to ICMC such documents as are listed in Exhibit H that are necessary to transfer CCA's interest in and to the Properties to the Venture. ICMC shall issue and deliver to CCA the balance of the 500,000 shares of ICMC common stock not previously issued pursuant to Section 5.3.2 at the time ICMC has earned its Participating Interest. 5.7. Reports . ICMC shall, during the Earn-In period, provide CCA with copies of periodic reports describing its activities on the Properties and shall conduct a semi-annual review with CCA to discuss the progress ICMC has made during the preceding period as well as the plans and programs being contemplated for the next period. 12 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL ARTICLE 6. INTERESTS OF PARTICIPANTS: DEFAULTS AND REMEDIES 6.1. Participating Interests . ICMC shall have no Participating Interest unless and until it has completed the Exploration Expenditures set forth in Section 5.2 during the Earn-In period. The Participants shall have the following Participating Interests upon ICMC's completion of the obligations set forth in Section 5.2: ICMC - 55% CCA - 45% 6.2. Elections at Time of Earn-In. At such time as ICMC completes the obligations set forth in Section 5.2 and has earned its fifty five percent (55%) Participating Interest in the Venture, CCA and ICMC shall have a period of sixty (60) days to either: (i) elect to continue to participate in the Venture and contribute to each Program and Budget for their entire respective Participating Interest, or (ii) to elect to withdraw from the Venture and convert to a Net Smelter Return as set out in Exhibit C. In no event shall the cumulative Net Smelter Return payable to the withdrawing party, whether one or more, exceed an aggregate of five percent (5%). 6.3. Deemed Expenditures. At Earn-In ICMC and CCA shall, irrespective of their actual expenditures on or with respect to the Properties, be deemed to have incurred expenditures as follows: ICMC $2,100,000 CCA $1,750,000 6.4 Changes in Participating Interests. A Participant's Participating Interest shall be changed as follows: (i) As provided in Sections 6.2 or 6.7; or (ii) Upon an election by a Participant pursuant to Section 6.5 to contribute less to an adopted Program and Budget than the percentage reflected by its Participating Interest; or (iii) In the event of default by a Participant in making its agreed-upon 13 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL contribution to an adopted Program and Budget; or (iv) Transfer by a Participant of less than all its Participating Interest in accordance with Article XIV; or (v) Acquisition of less than all of the Participating Interest of the other Participant, however arising. 6.5 Voluntary Reduction in Participation. Except with respect to a Participant's obligation to make its Initial Contribution, as to which no election is permitted, a Participant may elect, as provided in Section 9.5, to limit its contributions to an adopted Program and Budget as follows: (i) To some lesser amount than its respective Participating Interest; or (ii) Not at all. If a Participant elects to contribute to an adopted Program and Budget some lesser amount than its respective Participating Interest, or not at all, the Participating Interest of that Participant shall be recalculated at the time of election by dividing: (i) the sum of (a) the value of the Participant's Initial Contribution as per Section 6.3, (b) the total of all of the Participant's contributions under Section 5.3, and (c) the amount, if any, the Participant elects to contribute to the adopted Program and Budget; by (ii) the sum of (a), (b) and (c) above for all Participants; and then multiplying the result by one hundred. The Participating Interest of the other Participant shall thereupon become the difference between 100% and the recalculated Participating Interest. 6.6. Default in Making Contributions .If a Participant defaults in making a contribution or cash call required by an approved Program and Budget, the non-defaulting Participant may advance the defaulted contribution on behalf of the defaulting Participant and treat the same, 14 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL together with any accrued interest, as a demand loan bearing interest from the date of the advance at the Prime Rate plus two percent (2%) compounded quarterly. The failure to repay said loan upon demand shall be a default. Each Participant hereby grants to the other a lien upon its interest in the Venture and the Properties and a security interest in its rights under this Agreement and in its Participating Interest in other Assets, and the proceeds therefrom, to secure any loan made hereunder, including interest thereon, reasonable attorneys' fees and all other reasonable costs and expenses incurred in recovering the loan with interest and in enforcing such lien or security interest, or both. A non-defaulting Participant may elect the applicable remedy under this Section 6.6, or, to the extent a Participant has a lien or security interest under applicable law, it shall be entitled to its rights and remedies at law and in equity. All such remedies shall be cumulative. The election of one or more remedies shall not waive the election of any other remedies. Each Participant hereby irrevocably appoints the other its attorney-in- fact to execute, file and record all instruments necessary to perfect or effectuate the provisions hereof. 6.7. Conversion of Interest . If at any time the Participating Interest of a Participant is reduced to ten percent (10%) or less by an affirmative election not to contribute all or some portion of its share pursuant to a Program and Budget as provided in Article 9, the diluted Participant shall be deemed to have withdrawn from the Venture and this Agreement shall terminate; provided, however, the diluting Participant shall have the right to receive an amount equal to one hundred and fifteen percent (115%) of the diluting Participant's actual or deemed expenditures contributed hereunder, whichever is greater only from a five percent (5%) of Net Smelter Return Royalty, as set out in Exhibit C. Upon receipt of such amount the diluting Participant shall thereafter have no further right, title, or interest under this Agreement or in the Assets. 6.8. Continuing Liabilities Upon Adjustments of Participating Interests . Any reduction of a Participant's Participating Interest under this Section 6 shall not relieve such Participant of its share of any liability, whether it accrued before or after such reduction, arising out of Operations conducted prior to such reduction. For purposes of this Article 6, such Participant's share of such liability shall be equal to its Participating Interest at the time such liability was incurred. The increased Participating Interest accruing to a Participant as a result of the reduction of the other Participant's Participating Interest shall be free of royalties, liens or other encumbrances arising by, through or under such other Participant, other than those existing at the time the Properties were acquired or those to which both Participants have given their written consent. An adjustment to a Participating Interest need not be evidenced during the term of this Agreement by the execution and recording of appropriate instruments, but each Participant's Participating Interest shall be shown in the books of the Manager. However, either Participant, at any time upon the request of the other Participant, shall execute and acknowledge instruments necessary to evidence such adjustment in form sufficient for recording in the jurisdiction where the Properties are located. 15 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL ARTICLE 7. MANAGEMENT COMMITTEE 7.1. Organization and Composition . Prior to completion of ICMC's' Earn-In and the election by CCA and ICMC to participate in the Venture as provided in Section 6.2, the Participants shall establish a Management Committee to determine overall policies, objectives, procedures, methods and actions under this Agreement. The Management Committee shall consist of one member appointed by ICMC and one member appointed by CCA. Each Participant may appoint one or more alternates to act in the absence of a regular member. Any alternate so acting shall be deemed a member. Appointments shall be made or changed by notice in writing to the other Participant. 7.2. Decisions. Prior to completion of ICMC's Earn-In, each Participant, acting through its appointed member(s), shall have an equal vote. In the event of a deadlock, the Manager shall hold the deciding vote. After completion of ICMC's Earn-In, each Participant shall have a vote equal to its Participating Interest in the Venture. Decisions of the Management Committee shall be decided by Simple Majority of the Participating Interests. 7.3. Meetings. The Management Committee shall hold regular meetings at least annually at mutually agreed places. The Manager shall give thirty (30) days' written notice to the Participants of such regular meetings. Additionally, either Participant may call a special meeting upon thirty (30) days' written notice to the Manager and the other Participant. In case of emergency, reasonable notice of a special meeting shall suffice. There shall be a quorum if at least one member representing each Participant is present. The Management Committee shall not transact any business at a meeting unless a quorum is present at the commencement of the meeting. If a quorum is not present at the commencement of the meeting or within one-half hour after the time fixed for the commencement of the meeting, the meeting shall be adjourned to the same time and day of the next week at the same place. If a quorum is not present at the commencement of the adjourned meeting, one representative shall be deemed to constitute a quorum. Each notice of a meeting shall include an itemized agenda and detailed back-up information prepared by the Manager in the case of a regular meeting, or by the Participant calling the meeting in the case of a special meeting, but any matters may be considered with the consent of all Participants. The Manager shall prepare minutes of all meetings and shall distribute copies of such minutes to the Participants within thirty (30) days after the meeting. The minutes, when signed by all Participants, shall be the official record of the decisions made by the Management Committee and shall be binding on the Manager and the Participants. If personnel employed in Operations are required to attend a Management Committee meeting, reasonable costs incurred in connection with such attendance shall be a Venture cost. All other costs shall be paid by the Participants individually. 7.4. Action Without Meeting. In lieu of meetings, the Management Committee may hold telephone conferences, so long as all decisions are immediately confirmed in writing by the Participants. 7.5. Matters Requiring Approval . Except as otherwise delegated to the Manager in Section 16 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL 8.2, the Management Committee shall have exclusive authority to determine all management matters related to this Agreement. ARTICLE 8. MANAGER 8.1. Appointment Following signature of this Agreement, ICMC shall be the initial Manager. 8.2. Powers and Duties of Manager Subject to the terms and provisions of this Agreement, the Manager shall have the following powers and duties which shall be discharged in accordance with adopted Programs and Budgets: 8.2.1. The Manager shall manage, direct and control Operations. 8.2.2. The Manager shall implement the decisions of the Management Committee, shall make all expenditures necessary to carry out adopted Programs and Budgets, and shall promptly advise the Management Committee if it lacks sufficient funds to carry out its responsibilities under this Agreement. 8.2.3. The Manager shall: (i) purchase or otherwise acquire all material, supplies, equipment, water, utility and transportation services required for Operations, such purchases and acquisitions to be made on the best terms available, taking into account all of the circumstances; (ii) obtain such customary warranties and guarantees as are available in connection with such purchases and acquisitions; and (iii) keep the Assets free and clear of all liens and encumbrances, except for those existing at the time of, or created concurrent with, the acquisition of such Assets, or mechanic's or materialmen's liens which shall be released or discharged in a diligent manner, or liens and encumbrances specifically approved by the Management Committee. 8.2.4. The Manager shall conduct such title examinations and cure such title defects as may be advisable in the reasonable judgment of the Manager. 17 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL 8.2.5. The Manager shall: (i) make or arrange for all payments required by leases, licenses, permits, contracts and other agreements related to the Assets; (ii) pay all taxes, assessments and like charges on Operations and Assets except taxes determined or measured by a Participant's sales revenue or net income. If authorized by the Management Committee, the Manager shall have the right to contest in the courts or otherwise, the validity or amount of any taxes, assessments or charges if the Manager deems them to be unlawful, unjust, unequal or excessive, or to undertake such other steps or proceedings as the Manager may deem reasonably necessary to secure a cancellation, reduction, readjustment or equalization thereof before the Manager shall be required to pay them, but in no event shall the Manager permit or allow title to the Assets to be lost as the result of the nonpayment of any taxes, assessments or like charges; and (iii) shall do all other acts reasonably necessary to maintain the Assets. 8.2.6. The Manager shall: (i) apply for all necessary permits, licenses and approvals; (ii) comply with applicable federal, provincial, municipal and local laws and regulations; (iii) notify promptly the Management Committee of any allegations of substantial violation thereof; and (iv) prepare and file all reports or notices required for Operations. The Manager shall not be in breach of this provision if a violation has occurred in spite of the Manager's good faith efforts to comply, and the Manager has timely cured or disposed of such violation through performance, or payment of fines and penalties. 8.2.7. The Manager shall prosecute and defend, but shall not initiate without consent of the Management Committee, all litigation or administrative proceedings greater than $50,000 arising out of Operations. The non-managing Participant shall have the right to participate, at its own expense, in such litigation or administrative proceedings. The non- managing Participant's approval shall be required in advance of any settlement involving payments, commitments or obligations, if the non-managing Participant's share is in 18 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL excess of Twenty-Five Thousand Dollars ($25,000) in cash or value. 8.2.8. The Manager shall provide insurance for the benefit of the Participants as provided in Exhibit D. 8.2.9. The Manager may dispose of Assets, whether by release, abandonment, surrender or Transfer in the ordinary course of business, except that Properties may be released, abandoned or surrendered only as provided in Article 13. However, without prior authorization from the Management Committee, the Manager shall not: (i) dispose of Assets in any one transaction having a value in excess of $250,000: (ii) enter into any sales contracts or commitments for Product, except as permitted in Section 11.2; (iii) begin a liquidation of the Venture; or (iv) dispose of all or a substantial part of the Assets necessary to achieve the purposes of the Venture. 8.2.10 The Manager shall have the right to carry out its responsibilities hereunder through agents, affiliates or independent contractors. 8.2.11. The Manager shall be obligated to perform or cause to be performed during the term of this Agreement all obligations required by law in order to maintain the Properties which obligations shall be included in Programs and Budgets. 8.2.12. The Manager shall keep and maintain all required accounting and financial records pursuant to the Accounting Procedure and in accordance with customary cost accounting practices in the mining industry. 8.2.13. The Manager shall keep the Management Committee advised of all Operations by submitting in writing to the Management Committee: (i) monthly progress reports which include statements of expenditures and comparisons of such expenditures to the adopted Budget; 19 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL (ii) periodic summaries of data acquired; (iii) copies of reports concerning Operations; (iv) a detailed final report within forty-five (45) days after completion of each Program and Budget, which shall include comparisons between actual and budgeted expenditures and comparisons between the objectives and results of Programs; and (v) such other reports as the Management Committee may reasonably request. At all reasonable times the Manager shall provide the Management Committee or the representative of any Participant, upon the request of any member of the Management Committee, access to, and the right to inspect and copy all maps, drill logs, core tests, reports, surveys, assays, analyses, production reports, operations, technical, accounting and financial records, and other information acquired in Operations. In addition, the Manager shall allow the non-managing Participant, at the latter's sole risk and expense, and subject to reasonable safety regulations, to inspect the Assets and Operations at all reasonable times, so long as the inspecting Participant does not unreasonably interfere with Operations. 8.2.14. The Manager shall undertake all other activities reasonably necessary to fulfill the foregoing. The Manager shall not be in default of any duty under this Section 8.2 if its failure to perform results from the failure of the non-managing Participant to perform acts or to contribute amounts required of it by this Agreement. 8.3. Standard of Care The Manager shall conduct all Operations in a good, workmanlike and efficient manner, in accordance with all applicable laws, sound mining and other applicable industry standards and practices, and in accordance with the terms and provisions of leases, licenses, permits, contracts and other agreements pertaining to Assets. The Manager shall not be liable to the non-managing Participant for any act or omission resulting in damage or loss except to the extent caused by or attributable to the Manager's willful misconduct or gross negligence. 8.4. Resignation; Deemed Offer to Resign . The Manager may resign upon thirty (30) days prior notice to the other Participant. If any of the following shall occur, the Manager shall be deemed to have offered to resign, which offer shall be accepted by the other Participant, if at all, within ninety (90) days following such deemed offer: 8.4.1. The Participating Interest of the Manager becomes less than fifty percent (50%); 20 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL or 8.4.2. The Manager fails to perform a material obligation imposed upon it under this Agreement and such failure continues for a period of thirty (30) days after written notice from the other Participant demanding performance; or 8.4.3. The Manager fails to pay or contest in good faith its bills within thirty (30) days after receiving written notice that they are due; or 8.4.4. A receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for a substantial part of its assets is appointed and such appointment is neither made ineffective nor discharged within sixty (60) days after receiving written notice of the making thereof, or such appointment is consented to, requested by, or acquiesced in by the Manager; or 8.4.5. The Manager commences a voluntary case under any applicable bankruptcy, insolvency or similar law now or hereafter in effect; or consents to the entry of an order for relief in an involuntary case under any such law or to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or other similar official of any substantial part of its assets; or makes a general assignment for the benefit of creditors; or fails generally to pay its or Venture debts as such debts become due; or takes corporate or other action in furtherance of any of the foregoing; or 8.4.6. Entry is made against the Manager of a judgment, decree or order for relief affecting a substantial part of its assets by a court of competent jurisdiction in an involuntary case commenced under any applicable bankruptcy, insolvency or other similar law of any jurisdiction now or hereafter in effect. 8.5. Payments to Manager . The Manager shall be compensated for its services and reimbursed for its costs hereunder in accordance with the Accounting Procedure. 8.6. Transactions With Affiliates . If the Manager engages Affiliates to provide services hereunder, it shall do so on terms no more favorable than would be the case with unrelated persons in arm's-length transactions. 8.7. Activities During Deadlock . If the Management Committee for any reason fails to adopt a Program and Budget, subject to the contrary direction of the Management Committee and to the receipt of necessary funds, the Manager shall continue Operations at levels comparable with the last adopted Program and Budget. For purposes of determining the required contributions of the Participants and their respective Participating Interests, the last adopted Program and Budget shall be deemed extended. 21 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL ARTICLE 9. PROGRAMS AND BUDGETS 9.1. Initial Program and Budget . The initial Program and Budget will be provided by the Management Committee within ninety (90) days of ICMC's Earn-In. 9.2. Operations Pursuant to Programs and Budgets . Except as otherwise provided in Section 9.8 and Article 16, Operations shall be conducted, expenses shall be incurred, and Assets shall be acquired only pursuant to approved Programs and Budgets. 9.3. Presentation of Programs and Budgets . Proposed Programs and Budgets shall be prepared by the Manager for a period of up to one year. Each adopted Program and Budget, regardless of length, shall be reviewed at least once a year at the annual meeting of the Management Committee. During the period encompassed by any Program and Budget, and at least two months prior to its expiration, a proposed Program and Budget for the succeeding period shall be prepared by the Manager and submitted to the Management Committee. 9.4. Review and Approval of Proposed Programs and Budgets . Within thirty (30) days after submission of a proposed Program and Budget to the Management Committee, the Management Committee shall: (i) Approve the proposed Program and Budget; or (ii) Propose modifications of the proposed Program and Budget; or (iii) Reject the proposed Program and Budget. If the Management Committee makes the elections pursuant to Section 9.4.(ii) or 9.4.(iii), then the Manager will review the modifications and/or any recommendations of the Management Committee and will resubmit a Program and Budget within thirty (30) days. 9.5. Election to Participate By written notice to the Management Committee within thirty (30) days after approving a Program and Budget except as provided for in Section 6.1, a Participant may elect to contribute to such Program and Budget in an amount equal to its Participating Interest or a lesser amount as provided for in Section 6.5. If a Participant fails to so notify the Management Committee, the Participant shall be deemed to have elected not to contribute to such Program and Budget and the provisions of Section 6.4 shall apply. If a Participant elects not to participate in the Program and Budget and the other Participant elects to contribute to the Program and Budget the provisions of Section 6.5 shall apply. 9.6. Deadlock on Proposed Programs and Budgets . If the Participants, acting through the Management Committee, fail to approve a Program and Budget by the beginning of the period 22 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL to which the proposed Program and Budget applies, the provisions of Section 8.7 shall apply. 9.7. Budget Overruns; Program Changes . The Manager shall immediately notify the Management Committee of any material departure from an adopted Program and Budget. If the Manager exceeds an adopted Budget by more than ten percent (10%), then such excess over ten percent (10%) shall be for the sole account of the Manager, not creditable to the calculation of Participating Interests, unless such excess amount is directly caused by an emergency or unexpected expenditure made pursuant to Section 9.8 or is otherwise authorized by the approval of the Management Committee. Budget overruns of ten percent (10%) or less shall be borne by the Participants in proportion to their respective Participating Interests as of the time the overrun occurs. 9.8. Emergency or Unexpected Expenditures . In case of emergency, the Manager may take any reasonable action it deems necessary to protect life, limb or property, to protect the Assets or to comply with law or government regulation. The Manager may also make reasonable expenditures for unexpected events which are beyond its reasonable control and which do not result from a breach by it of its standard of care. The Manager shall promptly notify the Participants of the emergency or unexpected expenditures, and the Manager shall be reimbursed for all resulting costs by the Participants in proportion to their respective Participating Interests at the time the emergency or unexpected expenditures are incurred. ARTICLE 10. ACCOUNTS AND SETTLEMENTS 10.1. Matters of Accounts and Settlements These items are governed by the provisions in Exhibit "B" (Accounting Procedures) attached hereto. ARTICLE 11. DISPOSITION OF PRODUCTION 11.1. Taking in Kind . Each Participant shall take in kind or separately dispose of its share of all Products in accordance with its Participating Interest. Any extra expenditure incurred in the taking in kind or separate disposition by any Participant of its proportionate share of Products shall be borne by such Participant. Nothing in this Agreement shall be construed as providing, directly or indirectly, for any joint or cooperative marketing or selling of Products or permitting the processing of Products of any parties other than the Participants at any processing facilities constructed by the Participants pursuant to this Agreement. The Manager shall give the Participants notice at least ten (10) days in advance of the delivery date upon which their respective shares of Products will be available. 11.2. Failure of Participant to Take in Kind . If a Participant fails to take in kind, the Manager shall have the right, but not the obligation, for a period of time consistent with the 23 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL minimum needs of the industry, but not to exceed one year, to purchase the Participant's share for its own account or to sell such share as agent for the Participant at not less than the prevailing market price in the area. Subject to the terms of any such contracts of sale then outstanding, during any period that the Manager is purchasing or selling a Participant's share of production, the Participant may elect by notice to the Manager to take in kind. The Manager shall be entitled to deduct from proceeds of any sale by it for the account of a Participant reasonable expenses incurred in such a sale. ARTICLE 12. WITHDRAWAL AND TERMINATION 12.1. Termination by Expiration or Agreement . This Agreement shall terminate as expressly provided in this Agreement, unless earlier terminated by written agreement. 12.2. Withdrawal . A Participant may elect to withdraw as a Participant from this Agreement by giving notice to the other Participant of the effective date of withdrawal, which shall be the later of the end of the then current Program and Budget or at least 45 days after the date of the notice. Upon such withdrawal, this Agreement shall terminate, and the withdrawing Participant shall be deemed to have transferred to the remaining Participant, without cost and free and clear of royalties, liens or other encumbrances arising by, through or under such withdrawing Participant, except those exceptions to title described in Exhibits F and G and those to which both Participants have given their written consent after the date of this Agreement, all of its Participating Interest in the Assets and in this Agreement. Any withdrawal under this Section 12.2 shall not relieve the withdrawing Participant of its share of liabilities to third persons (whether such accrues before or after such withdrawal) arising out of Operations conducted prior to such withdrawal. For purposes of this Section 12.2, the withdrawing Participant's share of such liabilities shall be equal to its Participating Interest at the time such liability was incurred. 12.3. Continuing Obligations . On termination of this Agreement under Section 12.1 or 12.2, the Participants shall remain liable for continuing obligations hereunder until final settlement of all accounts and for any liability, whether it accrues before or after termination, if it arises out of Operations during the term of the Agreement. 12.4. Disposition of Assets on Termination . Promptly after termination under Section 12.1, the Manager shall take all action necessary to wind up the activities of the Venture, and all costs and expenses incurred in connection with the termination of the Venture shall be expenses chargeable to the Venture. Any Participant that has a negative Joint Account balance when the Venture is terminated for any reason shall contribute to the Assets of the Venture an amount sufficient to raise such balance to zero. The Assets shall first be paid, applied, or distributed in satisfaction of all liabilities of the Venture to third parties and then to satisfy any debts, obligations, or liabilities owed to the Participants. Before distributing any funds or Assets to Participants, the Manager shall have the right to segregate amounts which, in the Manager's reasonable judgment, are necessary to discharge continuing obligations or to purchase for the account of Participants, bonds or other securities for the performance of such obligations. The foregoing shall not be construed to include the repayment of any Participant's contributions or 24 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL Joint Account balance. Thereafter, any remaining cash and all other Assets, including property shall be distributed (in undivided interests unless otherwise agreed) to the Participants, first in the ratio and to the extent of their respective Joint Accounts and then in proportion to their respective Participating Interests, subject to any dilution, reduction, or termination of such Participating Interests as may have occurred pursuant to the terms of this Agreement. No Participant shall receive a distribution of any interest in Products or proceeds from the sale thereof if such Participant's Participating Interest therein has been terminated pursuant to this Agreement. 12.5. Right to Data after Termination . After termination of this Agreement pursuant to Section 12.1, each Participant shall be entitled to copies of all information acquired hereunder before the effective date of termination not previously furnished to it, but a terminating or withdrawing Participant shall not be entitled to any such copies in respect to a later termination or withdrawal. 12.6. Continuing Authority . On termination of this Agreement under Section 12.1 or the deemed withdrawal of a Participant pursuant to Sections 5.2 and 6.4, the Manager shall have the power and authority, subject to control of the Management Committee, if any, to do all things on behalf of the Participants which are reasonably necessary or convenient to: (a) wind up Operations and (b) complete any transaction and satisfy any obligation, unfinished or unsatisfied, at the time of such termination or withdrawal, if the transaction or obligation arises out of Operations prior to such termination or withdrawal. The Manager shall have the power and authority to grant or receive extensions of time or change the method of payment of an already existing liability or obligation, prosecute and defend actions on behalf of the Participants and the Venture, mortgage Assets, and take any other reasonable action in any matter with respect to which the former Participants continue to have, or appear or are alleged to have, a common interest or a common liability. 12.7. Non-Compete Covenants . A Participant that withdraws pursuant to Section 12.2, or is deemed to have withdrawn pursuant to Sections 6.2 or 6.7 shall not directly or indirectly acquire any interest in property within the Area of Interest for two (2) years after the effective date of withdrawal. If a withdrawing Participant, or an Affiliate of a withdrawing Participant, breaches this Section 12.7, such Participant or Affiliate shall be obligated to offer to convey to the non-withdrawing Participant, without cost, any such property or interest so acquired. Such offer shall be made in writing and can be accepted by the non-withdrawing Participant at any time within forty-five (45) days after it is received by such non-withdrawing Participant. 12.8. Mutual Withdrawal . If a Participant elects to withdraw from this Agreement pursuant to Section 12.2, the other Participant may also elect to withdraw as a Participant by giving written notice thereof to the other Participant within thirty (30) days after receipt of the first Participant's notice of withdrawal, in which event the Participants shall be deemed to have agreed to terminate the Venture as of the first date of withdrawal pursuant to Section 12.1. 12.9. Rights to Data After Termination . After termination of this Agreement pursuant to Sections 12.1 or 12.2 project data shall be distributed as follows: 25 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL (i) All proprietary data provided by CCA covering data on the Properties and other Stillwater Complex lands and all copies thereof will be returned to CCA within 30 days of the termination date. This data includes geological and related data provided by the Mouat family interests. (ii) Copies, including but not limited to, of any and all raw data developed by ICMC about or on the Properties, any geological data, computer generated data, notes, summaries, maps, surveys, assays, drill hole logs or other documentation generated by ICMC during the life of the Venture will be provided to CCA. ARTICLE 13. SURRENDER OF PROPERTIES 13.1. Surrender of Properties .The Management Committee may authorize the Manager to surrender part or all of the Properties. If the Management Committee authorizes any such surrender over the objection of a Participant, the Participant that desires to surrender shall assign to the objecting Participant, without cost to the objecting Participant, all of the surrendering Participant's interest in the Properties to be surrendered, and the surrendered Properties shall cease to be part of the Properties. 13.2. Reacquisition. If any Properties are surrendered under the provisions of this Article 13, then, unless this Agreement is earlier terminated, neither Participant nor any Affiliate thereof shall acquire any interest in such Properties or a right to acquire such Properties for a period of two years following the date of such surrender. If a Participant reacquires any Properties in violation of this Section 13.2, the other Participant may elect by notice to the reacquiring Participant within forty-five (45) days after it has actual notice of such reacquisition, to have such Properties made subject to the terms of this Agreement. In the event such an election is made, the reacquired properties shall thereafter be treated as Properties, and the costs of reacquisition shall be borne pro rata by the Participants and shall be included for purposes of calculating the Participants' respective Participating Interests. ARTICLE 14. TRANSFER OF INTEREST 14.1. General . A Participant shall have the right to Transfer to any third party all or any part of its interest in or to this Agreement, its Participating Interest, or the Assets solely as provided in this Article 14. 14.2. Limitations on Free Transferability . The Transfer right of a Participant in Section 14.1 shall be subject to the following terms and conditions: 26 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL 14.2.1. No transferee of all or any part of the interest of a Participant in this Agreement, any Participating Interest, or the Assets shall have the rights of a Participant unless and until the transferring Participant has provided to the other Participant notice of the Transfer, and except as provided in Sections 14.2.3. and 14.2,4., the transferee, as of the effective date of the Transfer, has committed in writing to be bound by this Agreement to the same extent as the transferring Participant; 14.2.2. No Transfer permitted by this Article 14 shall relieve the transferring Participant of its share of any liability, whether accruing before or after such Transfer, which arises out of Operations conducted prior to such Transfer; 14.2.3. In the event of a Transfer of less than all of a Participating Interest, the transferring Participant and its transferee shall act and be treated as one Participant; 14.2.4. Except as provided in Section 14.4.3, no Participant shall transfer any interest in this Agreement or the Assets except by Transfer of part or all of its Participating Interest; 14.2.5. From the date of execution of this Agreement, if the Transfer is the grant of a security interest by mortgage, deed of trust, pledge, lien or other encumbrance of any interest in this Agreement, any Participating Interest or the Assets to secure a loan or other indebtedness of a Participant in a bona fide transaction, such security interest shall be subordinate to the terms of this Agreement and the rights and interests of the other Participant hereunder. Upon any foreclosure or other enforcement of rights in the security interest the acquiring third party shall be deemed to have assumed the position of the encumbering Participant with respect to this Agreement and the other Participant, and it shall comply with and be bound by the terms and conditions of this Agreement; and 14.2.6. If a sale or other commitment or disposition of Products or proceeds from the sale of Products by a Participant upon distribution to it pursuant to Article 11 creates in a third party a security interest in Products or proceeds therefrom prior to such distribution, such sales, commitment or disposition shall be subject to the terms and conditions of this Agreement; and 14.2.7 No Participant, without the consent of the other Participant, shall make a Transfer which shall cause termination of the tax partnership established by the provisions of Section 4.2; 14.3. Right of First Refusal . Except as otherwise provided in Section 14.4, if either Participant receives an offer to Transfer or otherwise dispose of all or a part of its Participating Interest in the Venture and/or Assets to a third party, including CCA's 100% interest in the "G" and "H" Chromites not subject to this Joint Venture, prior to accepting such offer the transferring Participant shall first offer the interest to the non-transferring Participant at the same terms and conditions as set forth in the third party offer. The non-transferring Participant may 27 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL accept the offer by written notice to the transferring Participant given within sixty (60) days of receipt of the transferring Participant's offer. If the non-transferring Participant does not accept the offer, then the transferring Participant may sell or otherwise dispose of its interest under terms and conditions not less favorable to it than those set forth in the third party offer, provided that the sale or other disposition is effectuated within one hundred and eighty (180) days from the effective date of the third party offer. 14.4. Exceptions to Right of First Refusal . Section 14.3 shall not apply to the following: 14.4.1. Transfer by a Participant of all or any part of its interest in this Agreement, any Participating Interest, or the Assets to an Affiliate; 14.4.2. Incorporation of a Participant, or corporate merger, consolidation, amalgamation or reorganization of a Participant by which the surviving entity shall possess substantially all of the stock, or all of the property rights and interests, and be subject to substantially all of the liabilities and obligations of that Participant; 14.4.3. The grant by a Participant of a security interest in any interest in this Agreement, any Participating Interest, or the Assets by mortgage, deed of trust, pledge, lien or other encumbrance which shall be subordinate as set forth above; or 14.4.4. A sale or other commitment or disposition of Products or proceeds from sale of Products by a Participant upon distribution to it pursuant to Article 11. ARTICLE 15. CONFIDENTIALITY AND RELEASES 15.1. General . The financial terms of this Agreement and all information obtained in connection with the performance of this Agreement are valuable trade secrets and shall be the exclusive property of the Participants and shall be maintained on a confidential basis. Neither Participant shall make any disclosure to any third party or the public or give out any publicity, press release or written material relating to confidential information, the Venture or the terms of this Agreement without the prior written consent of the other Participant, which consent shall not be unreasonably withheld. 15.2. Exceptions. The consent required by Section 15.1 shall not apply to a disclosure: 15.2.1. To an Affiliate, consultant, contractor or subcontractor that has a bona fide need to be informed; 15.2.2. To any third party to whom the disclosing Participant contemplates a Transfer 28 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL of all or any part of its interest in or to this Agreement, its Participating Interest, or the Assets; or 15.2.3. Which the disclosing Participant is required by pertinent law or regulation or the rules of any stock exchange to disclose, provided that in any case to which this Section 15.2 is applicable, the disclosing Participant shall give written notice to the other Participant prior to the making of any such disclosure. The disclosing Participant shall allow the other party twenty-four (24) hours to comment on the nature and extent of such required disclosure. 15.2.4. As necessary to administer or enforce this Agreement. As to any disclosure pursuant to Section 15.2.1 or 15.2.2, only such confidential information as such third party shall have a legitimate business need to know shall be disclosed and such third party shall first agree in writing to protect the confidential information from further disclosure to the same extent as the Participants are obligated under this Article 15. 15.3. Duration of Confidentiality . The provisions of this Article 15 shall apply during the term of this Agreement and for two (2) years following a termination pursuant to Section 12.1 or following withdrawal pursuant to Section 12.2, and shall continue to apply to any Participant who withdraws, who is deemed to have withdrawn, or who Transfers its Participating Interest, for two years following the date of such occurrence. ARTICLE 16. AREA OF INTEREST 16.1. Acquisitions in Area of Interest . If at any time during the existence of this Agreement any Participant or any former Participant that has a production royalty interest as provided for herein, (in this section only called the "Acquiring Party") stakes or otherwise acquires any right to or interest in any properties within the Area of Interest, the Acquiring Party shall forthwith give notice to the other parties of such acquisition, the total cost thereof and all details in the possession of that Participant with respect to the details of the acquisition, the nature of the property and the known mineralization. Each other Participant may, within thirty (30) days of receipt of the Acquiring Party's notice, elect, by notice to the Acquiring Party, to require that the properties and the right or interest acquired be held equally by the parties and be included in and thereafter form part of the Properties for all purposes of this Agreement. In the event properties or interests in properties are acquired by an Acquiring Party through a joint venture in the Area of Interest after the Effective Date of this Agreement, any such acquired properties or interest in acquired properties, shall be held equally by ICMC and CCA unless otherwise agreed. 29 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL If the election aforesaid is made, the other Participants shall reimburse the Acquiring Party for that portion of the cost of acquisition which is equivalent to their respective Participating Interests. If no other Participant makes the election aforesaid within that period of thirty (30) days, the right or interest acquired shall not form part of the Properties and the Acquiring Party shall be solely entitled thereto. ARTICLE 17. GENERAL PROVISIONS 17.1. Notices . All notices, payments and other required communications ("Notices") to the Participants shall be in writing, and shall be addressed respectively as follows: 17.1.1. If to ICMC: Idaho Consolidated Metals Corporation P.O. Box 1124 Lewiston, Idaho 83501 Attn: Del Steiner Phone: (208) 743-0914 Fax: (208) 746-6678 30 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL 17.1.2. If to CCA: Chrome Corporation of America 5613 S. Prince Street Littleton, Colorado 80120 Attn: Alistair Turner Phone: (720) 283-3904 Fax: (720) 283-3905 All Notices shall be given: (i) by personal delivery to the Participant, or (ii) by electronic communication or facsimile, with a confirmation sent by registered or certified mail return receipt requested, (iii) by registered or certified mail return receipt requested or (iv) by express mail. All Notices shall be effective and shall be deemed delivered (i) if by personal delivery on the date of delivery if delivered during normal business hours, and, if not delivered during normal business hours, on the next business day following delivery, (ii) if by electronic communication or facsimile on the next business day following receipt of the electronic communication or facsimile, and (iii) if solely by mail on the next business day after actual receipt. A Participant may change its address by Notice to the other Participant. 17.2. Waiver . The failure of a Participant to insist on the strict performance of any provision 31 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL of this Agreement or to exercise any right, power or remedy upon a breach hereof shall not constitute a waiver of any provision of this Agreement or limit the Participant's right thereafter to enforce any provision or exercise any right. 17.3. Modification . No modification of this Agreement shall be valid unless made in writing and duly executed by the Participants. 17.4. Force Majeure . Except for the obligation to make payments when due hereunder, the obligations of a Participant 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, without limitation, lack of satisfactory market, labor disputes (however arising and whether or not employee demands are reasonable or within the power of the Participant to grant); acts of God; laws, regulations, orders, proclamations, instructions or requests of any government or governmental entity; judgments or orders of any court; inability to obtain on reasonably acceptable terms any public or private license, permit or other authorization; curtailment or suspension of activities to remedy or avoid an actual or alleged, present or prospective violation of federal, provincial or local environmental standards; acts of war or conditions arising out of or attributable to war, whether declared or undeclared; riot, civil strife, insurrection or rebellion; fire, explosion, earthquake, storm, flood, sink holes; drought or other adverse weather condition; delay or failure by suppliers or transporters of materials, parts, supplies, services or equipment or by contractors' or subcontractors' shortage of, or inability to obtain, labor, transportation, materials, machinery, equipment, supplies, utilities or services; accidents; breakdown of equipment, machinery or facilities; or any other cause whether similar or dissimilar to the foregoing. The affected Participant shall promptly give notice to the other Participant of the suspension of performance, stating therein the nature of the suspension, the reasons therefor, and the expected duration thereof and this Agreement shall be extended by the total period of such delays or suspension. The affected Participant shall resume performance as soon as reasonably possible. During the period of suspension the obligations of the Participants to advance funds pursuant to Section 9.2 shall be reduced to levels consistent with Operations. 17.5. Economic Force Majeure . Following the Earn-In Period and if at any time after the Management Committee reaches a determination, in its reasonable judgment, that the minerals encompassed within the Properties cannot be profitably mined under the terms and conditions of this Agreement as it is then in effect, the Management Committee may declare that a condition of Force Majeure exists as provided in Section 17.4, above; provided, that in no event shall a condition of Force Majeure declared pursuant to this Section 17.5 be in effect for more than five (5) consecutive years. 17.6. Governing Law . This Agreement shall be governed by and interpreted in accordance with the laws of the State of Montana. 17.7. Rule Against Perpetuities . Any right or option to acquire any interest in real or personal property under this Agreement must be exercised, if at all, so as to vest such interest in the acquirer within twenty-one (21) years after the effective date of this Agreement. 32 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL 17.8. Further Assurances. Each of the Participants agrees to take from time to time such actions and execute such additional instruments as may be reasonably necessary or convenient to implement and carry out the intent and purpose of this Agreement. 17.9. Survival of Terms and Conditions . The following Sections shall survive the termination of this Agreement to the full extent necessary for their enforcement and the protection of the Participant in whose favor they run: Sections 2.2, 4.3, 6.6, 6.8, 12.2, 12.3, 12.4, 12.5, 12.7, 13.2, 17.6 and 1.3.3 of the Accounting Procedure. 17.10. Entire Agreement; Successors and Assigns . This Agreement contains the entire understanding of the Participants and supersedes all prior agreements and understandings between the Participants relating to the subject matter hereof. This Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the Participants. In the event of any conflict between this Agreement and any Exhibit attached hereto, the terms of this Agreement shall be controlling. 17.11. Memorandum . At the request of either Participant, a Memorandum or short form of this Agreement, as appropriate, which shall not disclose financial information contained herein, shall be prepared and recorded by Manager. This Agreement shall not be recorded. 17.12. Funds . All references to dollar amounts contained in this Agreement are references to United States dollars. IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto effective as of the day and year first above written. CHROME CORPORATION OF AMERICA By: /s/ Alistair R. Turner -------------------------------- Alistair R. Turner Title:Executive Vice President Tax ID#; 84-1971857 33 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL IDAHO CONSOLIDATED METALS CORPORATION By : /s/ Del Steiner ------------------------------------- Del Steiner Title: President Tax ID#: 82-0465571 34 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL EXHIBIT A-1 NICKEL/COPPER LEASE Attached to and made part of that certain Joint Venture Agreement dated the 1st day of February, 2000 between Idaho Consolidated Metals Corporation and Chrome Corporation of America. The following patented and unpatented mining claims located in Stillwater County, State of Montana. EAST OF THE STILLWATER RIVER WEST OF THE STILLWATER RIVER (18 Patented Lode Claims) (13 Patented Lode Claims) Big Ben Red Bird Lucky T Mountain View L.T.X. Big Thing H.E.D. Rough Rock Copper Rough Rock #2 Gold Tip Brooklyn Beauty Avalanche Patent Cataract Pada #1 New Wabeliski Pada #2 Summit Opal Something Dave Stillwater Emerald Pine Perseverance (7 Unpatented Lode Claims) H.R.H. Smelter Blue Jay Red Bird #2 Copper Bottom Gap Ridge Sue (1 Unpatented Lode Claim) Jame Giant Billie Westlake A-1-1 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL A-1-2 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL EXHIBIT A-2 CHROME LEASE Attached to and made part of that certain Joint Venture Agreement dated the 1st day of February, 2000 between Idaho Consolidated Metals Corporation and Chrome Corporation of America. The following patented and unpatented mining claims located in Stillwater and Sweet Grass Counties, State of Montana. MOUNTAIN VIEW CLAIMS- -------------------- PATENTED MINERAL CLAIM Bald Eagle A-2-1 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL CLAIMS INCLUDED IN PATENT APPLICATION MTM81443
BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM ------ ---- ---- ---- -------- ----- M MC 53589 SUSU 25 78 Misc. 887 11/07/79 T5S R15E 19 Amended 83 Misc. 744 11/25/81 M MC 53592 SUSU 28 78 Misc. 893 11/07/79 T5S R15E 20 Amended 83 Misc. 750 11/25/81 M MC 53593 SUSU 29 78 Misc. 895 11/07/79 T5S R15E 20 Amended 83 Misc. 752 11/25/81 M MC 10209 AMY 19 76 Misc. 182 5/26/78 T5S R15E 20 Amended 77 Misc. 13 2/26/79 Amended 83 Misc. 533 11/06/81 M MC 10210 AMY 20 76 Misc. 184 5/26/78 T5S R15E 20 Amended 77 Misc. 15 2/26/79 Amended 83 Misc. 535 11/06/81 M MC 10211 AMY 21 76 Misc. 186 5/26/78 T5S R15E 20 Amended 77 Misc. 17 2/20/79 Amended 83 Misc. 537 11/06/81 M MC 186404 Mouat 1 Lode 96 757 9/24/91 T5S R15E 19 M MC 186405 Mouat 2 Lode 96 755 9/24/91 T5S R15E 19 M MC 186406 Mouat 3 Lode 96 753 9/25/91 T5S R15E 19 M MC 186407 Mouat 4 Lode 96 751 9/24/91 T5S R15E 19/20 M MC 186408 Mouat 5 Lode 96 749 9/25/91 T5S R15E 19/20 M MC 186409 Mouat 6 Lode 96 747 9/25/91 T5S R15E 19/20 M MC 186410 Mouat 7 Lode 96 745 9/29/91 T5S R15E 20 M MC 186411 Mouat 8 Lode 96 743 9/27/91 T5S R15E 20 M MC 186412 Mouat 9 Lode 96 741 9/27/91 T5S R15E 20 M MC 186413 Mouat 10 Lode 96 739 9/29/91 T5S R15E 20 M MC 186414 Mouat 11 Lode 96 737 9/27/91 T5S R15E 20 M MC 186415 Mouat 12 Lode 96 735 9/27/91 T5S R15E 20 M MC 186416 Mouat 13 Lode 96 733 9/27/91 T5S R15E 20 M MC 186417 Mouat 14 Lode 96 731 9/27/91 T5S R15E 20 M MC 189232 LAKE PLACER 97 238 4/21/92 T5S R15E 20
A-2-2 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL UNPATENTED CLAIMS
BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 10191 AMY 1 33 Misc. 445-446 10/30/67 T5S R15E 21 Amended 76 Misc. 146 Amended 76 Misc. 930 Amended 82 Misc. 767 M MC 10192 AMY 2 33 Misc. 447-448 10/30/67 T5S R15E 21 Amended 76 Misc. 148 Amended 76 Misc. 932 Amended 82 Misc. 765 M MC 10193 AMY 3 33 Misc. 449-450 10/30/67 T5S R15E 21 Amended 76 Misc. 150 Amended 76 Misc. 934 M MC 10203 AMY 13 76 Misc. 170 T5S R15E 20 Amended 77 Misc. 1 Amended 83 Misc. 525 M MC 10204 AMY 14 76 Misc. 172 T5S R15E 20 Amended 77 Misc. 3 Amended 83 Misc. 527 M MC 10205 AMY 15 76 Misc. 174 T5S R15E 20NE/4 Amended 77 Misc. 5 Amended 83 Misc. 529 M MC 10206 AMY 16 76 Misc. 176 T5S R15E 20NE/4 Amended 77 Misc. 7 Amended 83 Misc. 531 M MC 10207 AMY 17 76 Misc. 178 T5S R15E 20NE/4 Amended 77 Misc. 9 Amended 82 Misc. 698
A-2-3 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 10208 AMY 18 76 Misc. 180 T5S R15E 20 Amended 77 Misc. 11 M MC 10212 AMY 25 76 Misc. 188 T5S R15E 17 Amended 77 Misc. 25 Amended 84 Misc. 82 M MC 11285 AMY 112 76 Misc. 441 T5S R15E 21/28 Amended 77 Misc. 159 M MC 11286 AMY 113 76 Misc. 443 T5S R15E 21/28 Amended 77 Misc. 161 M MC 11287 AMY 114 76 Misc. 445 T5S R15E 21/28 Amended 77 Misc. 163 M MC 11288 AMY 115 76 Misc 447 T5S R15E 21/28 Amended 77 Misc. 165 M MC 11289 AMY 116 76 Misc. 449 T5S R15E 21/28 Amended 77 Misc. 167 M MC 11290 AMY 117 76 Misc. 451 T5S R15E 21/28 Amended 77 Misc. 169 M MC 17294 AMY 125 76 Misc. 744 T5S R15E 21 Amended 77 Misc. 183 M MC 17295 AMY 126 76 Misc. 742 T5S R15E 21 Amended 77 Misc. 185 M MC 35156 GYPSUM 6 Misc. 358 T5S R15E 15, 16 M MC 35157 DUKE 19 Misc. 337 T5S R15E 15, 16 M MC 35960 ANN 3 f 58 Misc. 450-451 T5S R15E 29/30 M MC 35961 ANN 4 58 Misc. 452-453 T5S R15E 29 M MC 35962 ANN 4A 59 Misc. 53- 54 T5S R15E 20/29 M MC 35963 ANN 5 58 Misc. 454-455 T5S R15E 20/29/19 M MC 35964 ANN 5A 59 Misc. 55- 56 T5S R15E 19/20 M MC 35965 ANN 6 59 Misc. 26- 27 T5S R15E 19/30 M MC 35966 ANN 6A 59 Misc. 57- 58 T5S R15E 19
A-2-4 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 35967 ANN 7 59 Misc. 28- 29 T5S R15E 19/30 M MC 35968 ANN 8 59 Misc. 33- 34 T5S R15E 30 M MC 35969 ANN 9 59 Misc. 35- 36 T5S R15E 19/30 M MC 35970 ANN 10 59 Misc. 37- 38 8/14/67 T5S R15E 19SW/4 M MC 35971 ANN 11 59 Misc. 39- 40 8/14/67 T5S R15E 19W/2 M MC 35972 ANN 12 59 Misc. 41- 42 T5S R15E 19 M MC 35973 ANN 13 59 Misc. 43- 44 T5S R15E 19 M MC 35974 ANN 14 59 Misc. 45 T5S R14&15E 19&24 M MC 35975 ANN 15 59 Misc. 47 T5S R14&15E 19/24 M MC 35999 ANN 39 59 Misc. 187-188 T5S R15E 19/30 M MC 36004 ANN 44 59 Misc. 197-198 T5S R15E 21 M MC 36281 GAY 1 65 Misc. 104-105 T5S R15E 21 Amended 82 Misc. 676-677 M MC 36282 GAY 2 65 Misc. 106-107 T5S R15E 21 Amended 82 Misc. 678-679 M MC 36286 GAY 6 65 Misc. 114-115 T5S R15E 20/21 Amended 82 Misc. 684-685 M MC 36287 GAY 7 65 Misc. 116-117 T5S R15E 20/21 Amended 82 Misc. 686-687 M MC 36291 GAY 11 65 Misc. 124-125 T5S R15E 20 Amended 82 Misc. 692-693 M MC 36292 GAY 12 65 Misc. 126-127 T5S R15E 20 Amended 82 Misc. 694-695 M MC 36295 GAY 15 65 Misc. 132-133 T5S R15E 19/20 Amended 83 Misc. 523-524 M MC 36296 GAY 16 65 Misc. 134-135 T5S R15E 17/18/19/20 Amended 84 Misc. 80- 81 M MC 36360 Book Tunnel 24 Misc. 580 T5S R15E 19 & Tunnel Site
A-2-5 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 36376 Mountain View34 Misc. 513-514 T5S R15E 20 Chrome Co. M MC 36380 No. 5 Tunnel 25 Misc. 247 T5S R15E 19 & Tunnel Site M MC 36385 Monte Alto 7 159 T5S R15E 20/21 M MC 36387 MIN No. 2 22 6 T5S R15E 28 M MC 36389 MIN No. 5 22 10- 11 T5S R15E 28 M MC 36393 Pine 8 167 T5S R15E 21 M MC 36394 RAM 25 424 T5S R15E 21/28 M MC 36396 Red Bird No. 8 169 T5S R15E 29 M MC 36408 CHAS F. 7 Misc. 118 7/11/18 T5S R15E 21W/2 Amended 24 Misc. 287 10/17/41 M MC 36413 Joan 24 Misc. 574 7/27/42 T5S R15E 19SW/4 M MC 36416 MIN No. 4 22 9 T5S R15E 28/21 M MC 36430 Verdi Placer 24 Misc. 513 7/27/42 T5S R15E 19S/2 M MC 53580 SUSU 16 78 Misc. 869 T5S R15E 19 Amended 83 Misc. 726 M MC 53581 SUSU 17 78 Misc. 871 T5S R15E 19N/2 Amended 83 Misc. 728 M MC 53582 SUSU 18 78 Misc. 873 T5S R15E 19N/2 Amended 83 Misc. 730 M MC 53583 SUSU 19 78 Misc. 875 T5S R15E 19N/2 Amended 83 Misc. 732 M MC 53584 SUSU 20 78 Misc. 877 11/07/79 T5S R15E 19N/2 Amended 83 Misc. 734 11/25/81 M MC 53585 SUSU 21 78 Misc. 879 11/07/79 T5S R15E 19N/2 Amended 83 Misc. 736 11/25/81 M MC 53586 SUSU 22 78 Misc. 881 11/07/79 T5S R15E 19NE/4 Amended 83 Misc. 738 11/25/81
A-2-6 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 53587 SUSU 23 78 Misc. 883 11/07/79 T5S R15E 19NE/4 Amended 83 Misc. 740 11/25/81 M MC 53588 SUSU 24 78 Misc. 885 11/07/79 T5S R15E 19NE/4 Amended 83 Misc. 742 11/25/81 M MC 53590 SUSU 26 78 Misc. 889 11/07/79 T5S R15E 19NE/420NW/4 Amended 83 Misc. 746 11/25/81 M MC 53591 SUSU 27 78 Misc. 891 11/07/79 T5S R15E 19NE/420NW/4 Amended 83 Misc. 748 11/25/81 M MC 78928 AMY fr. 33 Misc. 443-444 10/30/67 T5S R15E 21 Amended 82 Misc. 877 M MC 78929 GAY fr. 82 Misc. 879-880 T5S R15E 21 M MC 84655 NEW 13 88 79 T5S R15E 20
A-2-7 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL Located in Stillwater and Sweet Grass Counties, Montana
BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 35976 ANN 16 59 Misc. 49 T5S R14&15E 19/24 M MC 35977 ANN 17 59 Misc. 59 T5S R14&15E 19/24 Amended 83 Misc. 754 M MC 35978 ANN 18 59 Misc. 61 T5S R14&15E 19/24 Amended 83 Misc. 756 M MC 36000 ANN 40 59 Misc. 189 T5S R14&15E 19/24 M MC 36001 ANN 41 59 Misc. 191 T5S R14&15E 19/24 Amended 83 Misc. 758
A-2-8 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL EXHIBIT A-3 CRESCENT CREEK CLAIMS Attached to and made part of that certain Joint Venture Agreement dated the 1st day of February, 2000 between Idaho Consolidated Metals Corporation and Chrome Corporation of America. BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 128417 RAM 1 44 297 9/17/86 T5S R14E 21 M MC 128418 RAM 2 44 301 9/17/86 T5S R14E 21 M MC 128420 RAM 4 44 241 9/19/86 T5S R14E 20/21 M MC 128421 RAM 5 44 243 9/19/86 T5S R14E 21 M MC 128423 RAM 7 44 247 9/21/86 T5S R14E 20 M MC 128424 RAM 8 44 249 9/21/86 T5S R14E 20/21 M MC 128427 RAM 11 44 255 9/22/86 T5S R14E 20 M MC 128428 RAM 12 44 257 9/22/86 T5S R14E 20 M MC 128430 RAM 14 44 261 9/24/86 T5S R14E 19/20 M MC 128431 RAM 15 44 263 9/24/86 T5S R14E 19/20 M MC 128433 RAM 17 44 237 9/17/86 T5S R14E 21 SE/4 Amended 44 341 6/18/87 M MC 128434 RAM 18 44 239 9/17/86 T5S R14E 21 SE/4 Amended 44 337 M MC 128435 RAM 19 44 267 9/27/86 T5S R14E 18/19 M MC 128436 RAM 20 44 269 9/27/86 T5S R14E 20 NW/4 Amended 44 339 T5S R14E 17 SW/4 M MC 128440 RAM 24 44 277 9/27/86 T5S R14E 18 M MC 134180 RAM 44 44 363 6/20/87 T5S R14E 20 NW/4 M MC 134181 RAM 45 44 365 6/20/87 T5S R14E 20 N/2 Note: The descriptive words after Crescent Creek Claims have been added since the signature of the agreement. A-3-1 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL A-3-2 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL EXHIBIT B. ACCOUNTING PROCEDURES Attached to and made part of that certain Joint Venture Agreement dated the 1st day of February, 2000 between Idaho Consolidated Metals Corporation and Chrome Corporation of America. The purpose of these Accounting Procedures is to establish equitable methods for determining charges and credits applicable to Operations under the captioned Agreement (the "Agreement"). It is the intent of the Manager and any Participant that is not acting as the Manager ("the non-Manager") that neither of them shall gain nor lose by reason of their duties and responsibilities as the Manager or the non-Manager but that the Manager should be reimbursed for the value of services provided hereunder. If any method proves unfair or inequitable to the Manager or the non-Manager, the Participants shall meet and in good faith endeavor to agree upon changes deemed necessary to correct the unfairness or inequity. In the event of a conflict between the provisions of these Accounting Procedures and those of the Agreement, the provisions of the Agreement shall control. ARTICLE 1. GENERAL PROVISIONS 1.1. Definitions. The definitions set forth in the Agreement shall apply to these Accounting Procedures and shall have the same meanings as used herein. Additional terms used in these Accounting Procedures are set forth below shall have the following meanings: 1.1.1."Material" shall mean personal property, including but not limited to supplies and non-depreciable equipment, acquired and held for use in Operations. 1.1.2."Outsider" shall mean participants other than "Participant" to the Agreement and their affiliates. 1.1.3."Personal Expenses" shall mean travel and other reasonable reimbursable expenses of employees of the Manager or its Affiliates. B-1 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL 1.1.4."Technical Employees" shall mean those employees having special and specific engineering, geological, legal, or other professional skills, and whose primary function in Operations is the handling of specific matters for the benefit of Operations. 1.2. Accounting Records. 1.2.1.The Manager shall maintain accounting records for the Joint Account in accordance with generally accepted accounting principles consistently applied and used in the mining industry. 1.2.2.The Manager shall take advantage of and credit the Venture with all cash and trade discounts, freight allowances and equalizations, annual volume or other allowances, credits, salvages, commissions, insurance discount dividends and retroactive premium adjustments, and any other benefits which accrue to the Manager wholly or in part because of Operations. 1.3. Statements, Billings and Adjustments. 1.3.1.The Manager shall promptly submit to the Management Committee monthly statements of account reflecting in reasonable detail the charges and credits to the Joint Account during the preceding month. 1.3.2.On the basis of the adopted Program and Budget, the Manager shall submit to each Participant prior to the last day of each month, a billing for estimated cash requirements for the next month. Within ten (10) days after receipt of each billing, each Participant shall advance to the Manager its proportionate share of the estimated amount. Time is of the essence of payment of such billings. The Manager shall at all times maintain a cash balance approximately equal to the rate of disbursement for up to forty-five (45) days. 1.3.3.A Participant that fails to meet cash calls in the amount and at the times specified in Section 1.3(b) shall be in default, and the amount of the defaulted cash call shall bear interest from the date due at an annual rate equal to two (2) percentage points over the Prime Rate, but in no event shall said rate of interest exceed the maximum permitted by law. The non- defaulting Participant shall have those rights, remedies and elections specified in Section 6.4 of the Agreement. 1.3.4.Payment of bills shall not prejudice the right of the non-Manager to protest B-2 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL or question the correctness thereof; however, all bills and statements rendered during any calendar year shall be presumed conclusively to be true and correct after twelve (12) months following the end of any such calendar year unless, within the said twelve-month period, the non- Manager takes written exception thereto and makes claim on the Manager for adjustment. No adjustment favorable to the Manager shall be made unless it is made within the same prescribed period or in connection with an adjustment in favor of the non-Manager. The provisions of this paragraph shall not prevent adjustments resulting from a physical inventory of the Assets. 1.3.4.1. Advances and Payments. 1.3.5.As provided for in this Exhibit "B", the non-Manager shall advance its share of the estimated cash outlay for the succeeding month's operation. If the non-Manager's advances exceed its share of actual expenditures, subsequent cash calls will be adjusted downward or the Manager will refund to the non-Manager excess funds that are not necessary for subsequent Operations. 1.3.6.The Manager shall base its estimates of cash advance requirements on the latest information available and shall take into account cash on hand which may be applied to satisfy such requirements in order to reduce the amounts to be advanced. It is the intent of the Participants to provide adequate funds for the Operations and to maintain bank balances at minimum levels. 1.3.7.If the Manager does not request the non-Manager to advance its share of estimated cash requirements, the non-Manager shall pay its share of expenditures within thirty (30) days following receipt of the Manager's billing. 1.3.8.Except as provided in Section 6.4 of the Agreement, all payments shall be made on or before the due date by wire transfer in immediately available funds to bank accounts designated by the Manager. If not so paid, the unpaid balance shall bear interest after the due date at the rate of Prime Rate plus two percent (2%) for each thirty (30) day period or portion thereof until such amount is paid, plus attorneys' fees, court costs, and other costs related to the collection of the unpaid amounts. 1.3.9.Funds received by the Manager from the non-Manager Participant shall be segregated or maintained by the Manager as a separate fund, and may not be commingled with the Manager's own funds, except with the consent of the non-Manager Participant. 1.3.10. Audits. Upon notice in writing to the Manager, the non-Manager shall have B-3 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL the right to audit the accounts and records relating to the accounting made under this Agreement for any calendar year within the twelve (12) month period following the end of such calendar year; provided, however, the making of an audit shall not extend the time for the taking of written exception to and the adjustments of accounts pursuant to Section 1.3 (d). The non- Manager may arrange for audits by its own staff or outside professional and qualified independent auditors. Audits shall be conducted in a manner so as to cause the minimum inconvenience to the Manager. The Manager shall bear no portion of non-Manager's audit costs unless agreed to by the Manager in advance of such audit. Notwithstanding the above, in the event the non- Manager does not audit the accounts and records relating to the accounting made under this Agreement the Manager shall have conducted annually an audit of the accounts and records relating to the accounting made under this Agreement. Such audit shall be for the account of the Venture. If the non-Manager does have an audit performed as provided herein, the Manager shall not be required to perform an additional audit. ARTICLE 2. CHARGEABLE COSTS Subject to the provisions of the Agreement, the Manager shall charge the Joint Account with all costs incurred by it as necessary and proper for the conduct of Operations or maintenance of the Assets. Such costs shall be reasonable and comparable with similar projects in the area. Except as otherwise provided in the Agreement, the Manager shall charge the Joint Account with: (1) exploration expenditures made for the exploration activities within the Properties, (2) expenditures made for engineering, environmental, planning, Development and construction related to the Properties and for the equipment and facilities necessary for Operations, including all working capital and sustaining capital for ongoing Operations and for the expansion and updating of Operations, and (3) costs and expenses of mining, processing, reclamation, restoration, worker's compensation and other claims upon closing of the mines, and any other costs following the mine closing. Such costs include, but are not limited to the following: 2.1. Property Payments. Property payments, rentals, royalties and other payments out of production (unless such royalties or other payments shall burden the ownership interests of only one Participant) and fees, paid by the Manager for Operations including permits, fees, and other charges which are assessed by various governmental agencies. Such costs also include acquisition of easements, rights of way, and surface rights. 2.2. Labor. 2.2.1.Salaries and wages of the Manager's employees directly engaged in and B-4 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL the conduct of and for the benefit of Operations, whether temporarily or permanently assigned. The proportion of salaries and wages charged will be prorated proportionate to the time spent by employees for the benefit of Operations. Salaries and wages shall include everything constituting gross pay to employees as reflected on the Manager's payroll, including travel time and overtime. 2.2.2.The Manager's cost of holidays, rest days, vacations, disability benefits, sickness, and other customary allowances and reasonable expenses which are paid or reimbursed under the Manager's usual practice. Such amounts may be charged either on a "percentage assessment" of salaries and wages, or on a cash basis. 2.2.3.Costs of expenditures or contributions made pursuant to assessments imposed by governmental authority which are applicable to the Manager's cost of salaries and wages. 2.2.4.Personal Expenses of employees whose salaries and wages are chargeable to the Joint Account under Section 2.2 (a), but only to the extent that such Personal Expenses are incurred in connection with their efforts while directly engaged in the conduct of and for the benefit of Operations. 2.2.5.The Manager's actual costs of established plans for employees' group life insurance, hospitalization, medical, dental, pension, retirement, stock purchase, profit sharing, thrift, bonus, and other benefit plans of a similar nature applicable to the Manager's labor cost chargeable to the Joint Account. 2.2.6.If a percentage assignment is used for Section 2.2 (b) and (e), the rate shall be based on actual cost experience for the previous year. Such rate shall be determined during the first quarter of each year and shall be applied in current year operations. 2.2.7.Relocation costs of employees permanently or temporarily assigned and directly engaged in the conduct of Operations. Such costs shall include transportation of employees' families and their personal and household effects and all other relocation costs in accordance with the Manager's usual practice. 2.3. Material. Material purchased or furnished by the Manager for use in Operations as provided under Article 3. So far as is reasonably practical, and consistent with efficient and economical operations, only such Material shall be purchased or transferred for use in Operations as may be required for immediate use. B-5 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL 2.4. Transportation. 2.4.1.Transportation of material and other related costs such as expediting, crating, freight, and unloading at destination. 2.4.2.Transportation of employees as required in the conduct of Operations. 2.5. Services. 2.5.1.The cost of consultants, contract labor, services, equipment, and utilities procured from Outsiders. 2.5.2.Technical or research services, such as, but not limited to, laboratory analysis, drafting, geophysical and geological interpretation, engineering, reserve studies and related computer services, and data processing, which may be delegated to and performed by the specialized staffs of one of the Participants or their Affiliate. Such professional services shall be on a cost of service basis and charges shall not exceed the cost of comparable quality services by qualified Outsiders. Charges to the Joint Account for services directly benefitting Operations shall be in addition to any charges allowed under Sections 2.11 and 2.12. 2.5.3.In the event the Manager from time to time utilizes skilled personnel of the Participants or their Affiliates for performance of services either within the Properties or elsewhere for the benefit of Operations, whose time in full or in part is not otherwise charged hereunder, a proper proportion of the direct and indirect salary, employee benefits, and travel expenses of such personnel shall be charged to the Joint Account, provided such work is pursuant to written authorization by the Manager. Such professional services shall be on a cost of service basis and charges shall not exceed the cost of comparable quality services by qualified Outsiders. 2.5.4.Use of the Manager's and the non-Manager's separately owned equipment and facilities for benefit of Operations. Such use shall be charged to the Joint Account at rates commensurate with the Manager's actual and full costs of ownership and operation and such rates shall include cost of maintenance, repairs, other operating expense, insurance, taxes (other than income taxes), depreciation, and other overhead. These charges shall not exceed the prevailing commercial rates in the area. 2.5.5.Data processing and computer services acquired for the benefit of B-6 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL Operations may be contracted through Outsiders, or by arrangement for computer services from one of the Participants, or their Affiliates, even though such facilities are not physically located within the Properties. Charges to the Joint Account under this provision for services directly benefiting Operations shall be in addition to any charges allowed under Section 2.11 and 2.12. Such professional services shall be on a cost of service basis and charges shall not exceed the cost of comparable quality services by qualified Outsiders. 2.5.6.Any technical services, skilled personnel, equipment, facilities or data processing services provided to Operations by the non-Manager, at the request of the Manager, shall be charged on the same basis as provided in Sections 2.5 (b), (c) (d) and (e) above. The non-Manager shall bill the Manager in accordance with Section 1.4 (c) of the Accounting Procedures. The Manager may audit the records of the non-Manager with regard to such services in accordance with the procedure set forth in Section 1.5. 2.6. Repair and Replacement of Property. All costs or expenses (net of the recoveries from insurance for which the premiums have been charged to the Joint Account, if any) necessary for the repair or replacement of property resulting from damages or losses incurred by fire, flood, storm, theft, accident, or any other cause, excepting the Manager's gross negligence or willful misconduct. The Manager shall furnish to the non-Manager written notice of damages or losses in excess of Fifteen Thousand Dollars ($15,000) as soon as practicable. Such costs and expenses include the costs to combat and control the actions of the hazard. 2.7. Insurance. 2.7.1.Premiums paid for Workers' Compensation or Employer's Liability Insurance required to be carried for Operations. Premiums paid for an insurance program covering such property, business interruption, casualty, and fidelity risks as are deemed prudent by the Manager based on sound business judgment, which judgment shall be subject to review and revision by the Management Committee. Premiums paid for other insurance as requested by the Management Committee. Each Participant may procure and maintain, at its own cost and expense, such other insurance as it may determine to be necessary to protect its interests, and any such insurance so procured and maintained shall inure solely to the benefit of the Participant procuring the same. 2.7.2.Actual expenditures incurred in the investigation, defense, and settlement of all losses, claims, damages, judgments, and other expenses for the benefit of Operations, excepting those resulting from the Manager's gross negligence or willful misconduct. 2.8. Litigation and Claims. All costs or expenses of handling, investigation and settling litigation or claims arising by reason of Operations or necessary to protect or recover B-7 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL property, including, but not limited to, attorneys' fees, court costs, cost of investigation or procuring evidence and amounts paid in settlement or satisfaction of any such litigation or claims. In the event actions or claims affecting Operations shall be handled by the legal staff of one of the Participants, a charge commensurate with the cost of providing such service is chargeable to the Joint Account. 2.9. Taxes. All taxes (except taxes based on or determined with reference to income), fees, and governmental assessments of every kind and nature. If the Manager is required hereunder to pay ad valorem taxes based in whole or in part upon separate valuations of each Participant's Interest, then notwithstanding anything to the contrary herein, charges to the Joint Account shall be made and paid by the Participants hereto in accordance with the percentage of tax value generated by each Participant's Interest. 2.10. Fines. All fines resulting from non-compliance with applicable laws, rules, and regulations, except to the extent that such fines were due to the gross negligence or willful misconduct of the Manager. 2.11. Direct Administrative Costs. The net cost of maintaining and operating any offices (excepting the corporate headquarters office), suboffices, camps, warehouses, housing, and other facilities directly serving Operations shall be charged to the Joint Account. If such facilities serve operations in addition to Operations, the net costs shall be allocated to all operations served on an equitable basis mutually agreed to by the Participants. 2.12. Manager's Management Fee. A charge to reimburse the Manager for overhead and other general and administrative services of the Manager's corporate headquarters office equal to the following percentages applied to costs and expenses determined on a monthly basis under the provisions of Paragraphs 2 through 7, 11 and 13 through 15 of this Article 2: 2.12.1.Five percent (5%) of all cash expenditures incurred prior to Development. 2.12.2.Five percent (5%) of all cash expenditures incurred following commencement of Development. Notwithstanding the above, such Manager's fees shall not be charged on the overhead of any contractors or agents. The overhead rates set out above shall be reviewed annually at the request of either party. If a detailed analysis of the Manager's actual cost experiences establishes that higher or lower overhead expenses were incurred or are likely to be incurred, and if higher, are reasonable in the circumstances, then the rates shall be amended by B-8 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL the Management Committee. Such amendment shall be on the basis that the Manager neither profits nor loses as a result thereof. 2.13. Storage of Production Inventories. Each Participant will bear the cost incurred for handling and storage of merchantable ore or concentrates as follows: 2.13.1.Personal property taxes on ore or concentrates in storage for a Participant within the Properties shall be charged to such Participant. 2.13.2.The cost of loading out such ore in storage for a Participant from the Properties shall be charged to such Participant. 2.13.3.Cost associated with providing storage of ore or concentrates within the Properties will be charged on a pro rata basis determined by the Participants. 2.13.4.Other costs arising out of storage or handling of ore or concentrates shall be charged to the Participant owning such Materials. 2.13.5. Project Assets. The cost of all capital expenses of the Assets which are normally depreciable, depletable, or amortizable, including but not limited to land acquisition, exploration, development, pre-mine development and stripping, machinery, equipment, plant, buildings, rail facilities and equipment, improvements, camp and port facilities, townsites and other infrastructure, whether incurred or acquired prior to or after Commencement of Commercial Production. 2.14. Other Necessary Expenses. Any other chargeable expenditures not covered or dealt with in the foregoing provisions which are necessary and proper for the conduct of Operations. B-9 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL ARTICLE 3. PRICING OF JOINT ACCOUNT MATERIAL PURCHASES, TRANSFERS, AND DISPOSITION The Manager is responsible for Joint Account Material and shall make proper and timely charges and credits for all Material movements affecting the Properties. The Manager shall provide all Material for use within the Properties, however, at the Manager's option, such Material may be supplied by the non-Manager. 3.1. Purchases. Material purchased shall be charged at the price paid by the Manager after deduction of all discount received. In case of Material found to be defective or returned to vendor for any other reason, credit shall be passed to the Joint Account when adjustment has been received by the Manager. 3.2. Transfer and Dispositions. Material furnished to the Properties and Material transferred from the Properties or disposed of by the Manager, unless otherwise agreed to by the Participants, shall be priced at its current fair market value. 3.2.1.Premium Prices. Whenever Material is not readily obtainable at published or listed prices because of national emergencies, strikes, or other unusual causes over which the Manager has no control, the Manager may charge the Joint Account for the required Material at the Manager's actual cost incurred in providing such Material, in making it suitable for use, and in moving it to the Properties. 3.3. Warranty of Material. The Manager shall not be held responsible for defects in Material furnished for Operations. In the event Material is defective, credit shall not be passed to the Joint Account until the adjustment has been received by the Manager from the manufacturer or its agents. ARTICLE 4. DISPOSAL OF SURPLUS MATERIAL 4.1. Distribution Generally. The disposition of major items of surplus Material shall be decided upon by the Manager. The Manager may purchase, but shall be under no obligation to purchase, the interests of the non-Manager in surplus Material. B-10 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL 4.2. Purchase by Participants. Surplus Material purchased by either the Manager or the non-Manager shall be credited by the Manager to the Joint Account at its fair market value. 4.3. Distribution to Participants. Division of Material in kind, if made between the Manager and the non-Manager, shall be in proportion to their respective interests in such Material. Each Participant will thereupon be charged individually with the value of the Material received or receivable by each Participant, and corresponding credits will be made by the Manager to the Joint Account. Such credits shall appear in the monthly statement of operations. 4.3.1.Sales. Sales to Outsiders of Material from the Properties shall be credited by the Manager to the Joint Account at the net amount collected by the Manager from vendee, which shall be priced on the basis of the best available market price. Any claim by vendee for defective Materials or otherwise shall be charged back to the Joint Account if and when paid by the Manager. ARTICLE 5. INVENTORIES 5.1. Periodic Inventories. The Manager shall take physical inventory of Joint Account Material at reasonable intervals in accordance with generally accepted accounting principles but not less than once a year. The non-Manager may be represented when any inventory shall bind the non-Manager to accept the inventory taken by the Manager. 5.2. Reconciliation. Reconciliation of inventories with the Joint Account shall be made by the Manager, and a list of overages and shortages shall be furnished to the non-Manager within ninety (90) days following the taking of inventory. Inventory adjustments shall be made by the Manager to the Joint Account for overages and shortages, but the Manager shall be held accountable to the non-Manager only for shortages due to the lack of reasonable diligence. 5.3. Special Inventories. Whenever there is a sale or change of Interest in the Mineral Rights, the Properties or the Assets, a special inventory may be taken by the Manager, provided the seller or purchaser or such Interest requests such inventory and agrees to bear all of the expense thereof. In such cases, both the seller and the purchaser shall be entitled to be represented. A special inventory shall be required when there is a change in the Manager. The cost of the latter inventory will be charged to the Joint Account when the change in the Manager does not come about as the result of a sale of the former Manager's Interest. 5.4. Expenses. The expense incurred by the Manager in conducting periodic B-11 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL inventories shall be charged to the Joint Account. B-12 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL EXHIBIT "C" NET SMELTER RETURN ROYALTY Attached to and made part of that certain Joint Venture Agreement dated February 1, 2000, by and between Idaho Consolidated Metals Corporation and Chrome Corporation of America. 1. The royalty which may be payable to Chrome Corporation of America (hereinafter called the "Payee") pursuant to paragraph ?? of the Assignment of Interests agreement by Idaho Consolidated Metals Corporation (hereinafter called the "Payor") will be a percentage of one hundred percent (100%) of the Net Smelter Revenue (as hereinafter defined) and will be calculated and paid to the Payee in accordance with the terms of the Agreement and this Schedule. Terms having defined meanings in the Agreement and used herein will have the same meanings in this Schedule as assigned to them in the Assignment of Interest Agreement unless otherwise specified or the context otherwise requires. 2. The Net Smelter Revenue will be calculated on a calendar quarterly basis and will, subject to paragraph 7 of this Schedule, be equal to gross revenue less permissible deductions for such quarter. 3. The following words will have the following meanings: 3.1.1."Gross Revenue" means the aggregate of the following amounts received in each quarterly period following the commencement of commercial production from the Mining Properties: 3.1.1.1. The revenue received by the Payor from arm's-length purchasers of all Products; 3.1.1.2. the fair market value of all Products sold by the payor in such period to persons not dealing at arm's-length with the payor; and 3.1.1.3. Any proceeds of insurance on Products; C-1 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL 3.1.2."Ore" means all materials from the mining properties, the nature and composition of which justifies either: 3.1.2.1. Mining or removing from place and shipping and selling such material, or delivering such material to a processing plant for physical or chemical treatment; or 3.1.2.2. Leaching such material in place; 3.1.3."Permissible Deductions" means the aggregate of the following charges (to the extent that they are not deducted by any purchaser in computing payment) that are paid in each quarterly period: 3.1.3.1. Sales charges levied by any sales agent on the sale of Products, 3.1.3.2. Transportation costs for Products from the Mining Properties to the place of beneficiation, processing or treatment and thence to the place of delivery of product to a purchaser thereof, including shipping, freight, handling and forwarding expenses; 3.1.3.3. All costs, expenses and charges of any nature whatsoever which are either paid or incurred by Payor in connection with refinement, beneficiation of Product after leaving the Properties, including all weighing, sampling, assaying and representation costs, metal losses, any umpire charges and any penalties charged by the processor, refinery or smelter, and 3.1.3.4. All insurance costs on Products, and any government royalties, production taxes, severance taxes and sales and other taxes levied on Ore, Products or on the production or value thereof (other than any Federal or State taxes levied on the income or profit of the Payor); 3.1.4."Products" means: 3.1.4.1. All ore shipped and sold prior to treatment, and C-2 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL 3.1.4.2. All concentrates, precipitates and products produced from Ore. 4. The payment on account of the royalty for each calendar quarter will be calculated and paid within 60 days after the end of each calendar quarter. Smelter settlement sheets, if any, and a statement setting forth calculations in sufficient detail to show the payments derivation (the "Statement") must be submitted with the payment. 5. In the event that final amounts required for the calculation of the payment on the account of the royalty are not available within the time frame referred to in section 4 of this Schedule, then provisional amounts will be estimated and such payment will be paid on the basis of this provisional calculation. Positive or negative adjustments will be made to the payment on account of the royalty for the succeeding quarter. 6. All payments on account of the royalty will be considered final and in full satisfaction of all obligations of the Payor with respect thereto, unless the Payee delivers to the Payor a written notice (the "Objection Notice") describing and setting forth a specific objection to the calculation thereof within 60 days after receipt by the Payee of the Statement. If the Payee objects to a particular Statement as herein provided, the Payee will, for a period of 60 days after the Payor's receipt of such objection notice, have the right, upon reasonable notice and at a reasonable times, to have the Payor's accounts and records relating to the calculation of the payment in question audited by the auditors of the Payee. If such audit determines that there has been a deficiency or an excess in payment due to the Payee, such deficiency or excess will be resolved by adjusting the next quarterly payment due hereunder. The Payee will pay for the costs and expenses of such audit unless the deficiency of five (5) percent or more of the amount due is determined to exist. The Payor will pay the costs and expenses of such audit if a deficiency of five (5) percent or more of the amount due is determined to exist. Failure on the part of the Payee to make a claim against the Payor for adjustment in such 60 day period by delivery of an Objection Notice will conclusively establish the correctness and sufficiency of the Statement and payment on account of the royalty for such quarter. 7. All profits and losses resulting from the Payor engaging in any commodity futures trading, options trading, metals trading, precious metals loans or any combination thereof, and any other hedging transactions with respect to the Products which is a precious metal (collectively, "Hedging Transactions") are specifically excluded from calculations of the payment on account of the royalty pursuant to this Schedule but it being the intent of the Participants that the Payor will have the unrestricted right to market and sell Products to third parties in any manner it chooses and that the Payee will not have any right to participate in such marketing activities or to share in profit or losses therefrom. All Hedging Transactions by the Payor and all profit or losses associated therewith, if any, will be solely for the Payor's account. The amount of Net Smelter Revenue derived from all Products subject to Hedging Transactions by the Payor will be determined pursuant to the provisions of this Paragraph 7 and not to Paragraph 2. As to precious metals subject to Hedging Transactions by the Payor, Net Smelter Revenue will be determined without reference to Hedging Transactions and will be determined by using the quarterly average C-3 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL price of the metal, which will be calculated by dividing the sum of all the London Bullion Market Association P.M. Metal Fix prices reported for the calendar quarter in question by the number of days for which such prices were quoted. Any Products subject to Hedging Transactions will be deemed to be sold, and revenues received therefrom, only on the date of the final settlement of the amount of refined Products allocated to the account of the Payor by a third party refinery in respect of such transactions. Furthermore, the Payor will have no obligations to fulfill any futures contracts, forward sales, gold loans or other Hedging Transactions which the Payor may hold with Products. 8. If the royalty becomes payable to two or more parties, those parties will appoint, and will deliver to the Payor a document executed by all of those parties appointing a single agent or trustee of all such parties to whom the Payor will make all payments on account of the royalty. The Payor will have no responsibility as to the division of the royalty payments to such parties, and if the Payor makes a payment or payments on account of the royalty in accordance with the provisions of this Paragraph 8, it will be conclusively deemed that such payment or payments have been received by the Payee. All charges of the agent or trustee will be borne solely by the parties receiving payments on account of the royalty. C-4 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL EXHIBIT "D" INSURANCE Attached to and made part of that certain Joint Venture Agreement dated February 1, 2000, by and between Idaho Consolidated Metals Corporation and Chrome Corporation of America The Manager shall, at all times while conducting Operations, comply fully with the applicable worker's compensation laws and purchase protection for the Participants comparable to that provided under standard form insurance policies for (i) comprehensive public liability and property damage with combined limits of Two Million Dollars for bodily injury and property damage; (ii) automobile insurance with combined limits of Two Million Dollars; and (iii) adequate and reasonable insurance against risk of fire and other risks ordinarily insured against in similar operations. Each Participant may self-insure or purchase for its own account such additional insurance as it deems necessary. D-1 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL D-2 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL EXHIBIT "E" MAP OF AREA OF INTEREST Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL EXHIBIT "F" NICKEL COPPER LEASE Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL EXHIBIT "G" CHROME LEASE Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL EXHIBIT "H" MINING DEED AND ASSIGNMENT Attached to and made part of that certain Joint Venture Agreement dated February 1, 2000, by and between Idaho Consolidated Metals Corporation and Chrome Corporation of America. When Recorded, Return to: -------------------------- MINING DEED AND ASSIGNMENT This Mining Deed and Assignment is made as of ____________________ 20__ by CHROME CORPORATION OF AMERICA, a Delaware corporation (hereinafter called "Grantor") to MONTANA PGM VENTURE, a Montana joint venture comprised of Chrome Corporation of America, a Delaware corporation, and Idaho Consolidated Metals Corporation, a British Columbia corporation (hereinafter called "Grantee"). KNOW ALL MEN BY THESE PRESENTS that Grantor, for and in consideration of $10.00 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Grantor, does hereby grant and convey to Grantee all of the right, title and interest of the Grantor in and to the patented and unpatented lode, tunnel site and placer claims in Stillwater and Sweet Grass Counties, Montana, more particularly described in Exhibit A (hereinafter collectively called the"Properties"). FURTHER, Grantor does hereby grant, convey, assign and transfer to Grantee all of the right, title and interest of the Grantor in and to those certain mineral leases more particularly described in Exhibits D and E attached hereto (hereinafter collectively called the "Underlying Agreements") concerning parts of the Properties. TOGETHER WITH all and singular the tenements, hereditaments and appurtenances H-1 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL thereunto belonging or in anywise appertaining, including all extralateral rights and all ores, waste and rock therein or thereon, and together with all right, title and interest therein which Grantor may hereafter acquire. EXCEPTING AND RESERVING unto Grantor and to Grantor's successors and assigns the chromite, ferrochromium and chromium minerals within Units G and H (as described in Exhibit C attached hereto) of the Properties, together with the right to explore for, develop and commercially exploit such minerals, subject to the limitations and restrictions as hereinafter set forth (hereinafter called the "Chrome Project"). SUBJECT TO current taxes, assessments, reservations in patents, and the Underlying Agreements. GRANTOR REPRESENTS AND WARRANTS to Grantee that Grantor has full power and authority to execute this Deed and to transfer and assign the Underlying Agreements. 1. Grantor further represents and warrants to Grantee the following as of the date hereof: (a) Grantor is a corporation duly organized and validly existing under the laws of the State of Delaware qualified to transact business in the State of Montana and has the requisite power and authority to convey the Properties in accordance with the terms of this Deed. (b) The person(s) executing this Deed on behalf of Grantor is (are) duly authorized so to do. (c) Grantor is the sole holder of the lessee's interest, as applicable, under the Underlying Agreements. (d) The Underlying Agreements are valid leases and Grantor has the right to extend the Underlying Agreements as noted in Exhibits D and E. (e) To the best of Grantor's knowledge and belief with respect to unpatented mining claims set forth in Exhibit A and that are included within the Properties, subject to the paramount title of the United States and except as disclosed in writing to the Grantee: H-2 (i) the unpatented mining claims were properly laid out and monumented; (ii) all required location and validation work was properly performed; (iii) location notices and certificates were properly recorded and filed with appropriate governmental agencies; (iv) the claims are free and clear of defects, liens and encumbrances arising by, through or under Grantor, except those of record, state and federal environmental and development laws, rules and regulations, or disclosed in writing to Grantee as listed in Exhibits D and E and in this Agreement and defects, liens, and any such encumbrances that do not materially affect Grantee's rights under this Agreement; (v) Grantor has not received notice from anyone asserting conflicting claims; and (vi) the unpatented mining claims are in good standing and compliance with all federal and state regulations in force as of the effective date of this Agreement. Nothing in this paragraph, however, shall be deemed to be a representation or a warranty that any of the mining claims contains a discovery of minerals. (f) Grantor knows of no violation of any applicable federal, state, regional, or county law or regulation relating to zoning, land use, environmental protection, or otherwise with respect to the Properties or activities relating thereto; and, (g) With respect to the Properties, Grantor knows of no pending or threatened actions, suits, claims or proceedings. 2. Grantor, as owner of the Chrome Project and its successors and assigns of all or any part thereof or interest therein, shall have the following rights and privileges and shall be bound by the following covenants, conditions and restrictions: H-3 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL (a) Neither Grantor with respect to the Chrome Project nor Grantee with respect to its operations on or in the Properties, shall be required or permitted to share improvements, workings, facilities or equipment with the other except upon the express written consent of the parties. (b) Grantee shall have the right but not the obligation to cure any default of Grantor under the Underlying Agreements as such default pertains to the Chrome Project in acordance with the provisions of Section 3 of this Article. 3. Any failure or loss of title to the Properties, and all costs of defending title, shall be paid by the Grantee, except that all costs and losses arising out of or resulting from breach of the representations and warranties of Grantor shall be charged to Grantor and all such costs and losses arising out of gross negligence by Grantee shall be charged to Grantee as the case may be. Grantee shall have the right, but not the obligation, to undertake to cure such defects or to defend or to initiate litigation to defend such defects. With respect to third party claims: (a)If Grantor fails to satisfy and discharge any mortgage, lien, tax levy or encumbrance (an "Encumbrance") chargeable solely or in part to Grantor on the claims listed on Exhibit A or the underlying agreements, or suffers or permits any Encumbrance to be imposed upon such, Grantee at its option may, but shall not be obligated to, pay for and discharge any Encumbrance and set off such payment by withholding and retaining from any payments due Grantor any amounts so paid by Grantee, without prejudice to any right of Grantee to recover from Grantor the amount of such payment, in any manner or by any remedy whatsoever, and Grantee shall have all the rights and remedies against Grantor which the mortgagor, lienor or creditor had immediately prior to the time of such payment. Upon the request of Grantee, Grantor shall promptly make, execute, acknowledge and deliver to Grantee any and all instruments (in a form and substance satisfactory to Grantee) that Grantee in its sole judgment may deem necessary or desirable to fully effectuate the provisions of this paragraph. (b)If any person or entity not a party hereto asserts to have a claim of ownership in the claims listed on Exhibit A or the Uderlying Agreements, or a claim to a share in the production from the claims listed on Exhibit A (an "Adverse Claim"), Grantee at its sole discretion, after written notice to Grantor, may suspend its obligation to make payments as provided herein, and in lieu thereof, may deposit in an interest-bearing account payments equivalent to H-4 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL payments which may otherwise become due Grantor. 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. When Grantee is required or elects to make any 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, Grantee may recover from, or credit against, any payments thereafter becoming due Grantor hereunder, the amount of such payments of all other costs and expenses (including reasonable attorneys fees) paid or incurred by Grantee as a result of any such Adverse Claim. DATED: , 20 ------------------- ---- CHROME CORPORATION OF AMERICA a Delaware corporation, Attest_____________________________ By________________________________________ David M. Hyslop Alistair R. Turner Secretary-Treasurer Executive Vice President H-5 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL STATE OF_______________ ) County of _____________ ) ss. The foregoing instrument was acknowledged before me on ___________, 20____ by _________________ as the__________________________of CHROME CORPORATION OF AMERICA, a Delaware corporation, on behalf of the corporation. Notary Public My Commission Expires: H-6 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL EXHIBIT A NICKEL/COPPER LEASE The following patented and unpatented mining claims located in Stillwater County, State of Montana. EAST OF THE STILLWATER RIVER WEST OF THE STILLWATER RIVER (18 Patented Lode Claims) (13 Patented Lode Claims) Big Ben Red Bird Lucky T Mountain View L.T.X. Big Thing H.E.D. Rough Rock Copper Rough Rock #2 Gold Tip Brooklyn Beauty Avalanche Patent Cataract Pada #1 New Wabeliski Pada #2 Summit Opal Something Dave Stillwater Emerald Pine Perseverance (7 Unpatented Lode Claims) H.R.H. Smelter Blue Jay Red Bird #2 Copper Bottom Gap Ridge Sue (1 Unpatented Lode Claim) Jame Giant Billie Westlake A-1-1 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL CHROME LEASE The following patented and unpatented mining claims located in Stillwater and Sweet Grass Counties, State of Montana. MOUNTAIN VIEW CLAIMS - PATENTED MINERAL CLAIM Bald Eagle CLAIMS INCLUDED IN PATENT APPLICATION MTM81443
BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 53589 SUSU 25 78 Misc. 887 11/07/79 T5S R15E 19 Amended 83 Misc. 744 11/25/81 M MC 53592 SUSU 28 78 Misc. 893 11/07/79 T5S R15E 20 Amended 83 Misc. 750 11/25/81 M MC 53593 SUSU 29 78 Misc. 895 11/07/79 T5S R15E 20 Amended 83 Misc. 752 11/25/81 M MC 10209 AMY 19 76 Misc. 182 5/26/78 T5S R15E 20 Amended 77 Misc. 13 2/26/79 Amended 83 Misc. 533 11/06/81 M MC 10210 AMY 20 76 Misc. 184 5/26/78 T5S R15E 20 Amended 77 Misc. 15 2/26/79 Amended 83 Misc. 535 11/06/81
A-1-2 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 10211 AMY 21 76 Misc. 186 5/26/78 T5S R15E 20 Amended 77 Misc. 17 2/20/79 Amended 83 Misc. 537 11/06/81 M MC 186404 Mouat 1 Lode 96 757 9/24/91 T5S R15E 19 M MC 186405 Mouat 2 Lode 96 755 9/24/91 T5S R15E 19 M MC 186406 Mouat 3 Lode 96 753 9/25/91 T5S R15E 19 M MC 186407 Mouat 4 Lode 96 751 9/24/91 T5S R15E 19/20 M MC 186408 Mouat 5 Lode 96 749 9/25/91 T5S R15E 19/20 M MC 186409 Mouat 6 Lode 96 747 9/25/91 T5S R15E 19/20 M MC 186410 Mouat 7 Lode 96 745 9/29/91 T5S R15E 20 M MC 186411 Mouat 8 Lode 96 743 9/27/91 T5S R15E 20 M MC 186412 Mouat 9 Lode 96 741 9/27/91 T5S R15E 20 M MC 186413 Mouat 10 Lode 96 739 9/29/91 T5S R15E 20 M MC 186414 Mouat 11 Lode 96 737 9/27/91 T5S R15E 20 M MC 186415 Mouat 12 Lode 96 735 9/27/91 T5S R15E 20 M MC 186416 Mouat 13 Lode 96 733 9/27/91 T5S R15E 20 M MC 186417 Mouat 14 Lode 96 731 9/27/91 T5S R15E 20 M MC 189232 LAKE PLACER 97 238 4/21/92 T5S R15E 20
A-1-3 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL UNPATENTED CLAIMS
BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 10191 AMY 1 33 Misc. 445-446 10/30/67 T5S R15E 21 Amended 76 Misc. 146 Amended 76 Misc. 930 Amended 82 Misc. 767 M MC 10192 AMY 2 33 Misc. 447-448 10/30/67 T5S R15E 21 Amended 76 Misc. 148 Amended 76 Misc. 932 Amended 82 Misc. 765 M MC 10193 AMY 3 33 Misc. 449-450 10/30/67 T5S R15E 21 Amended 76 Misc. 150 Amended 76 Misc. 934 M MC 10203 AMY 13 76 Misc. 170 T5S R15E 20 Amended 77 Misc. 1 Amended 83 Misc. 525 M MC 10204 AMY 14 76 Misc. 172 T5S R15E 20 Amended 77 Misc. 3 Amended 83 Misc. 527 M MC 10205 AMY 15 76 Misc. 174 T5S R15E 20NE/4 Amended 77 Misc. 5 Amended 83 Misc. 529 M MC 10206 AMY 16 76 Misc. 176 T5S R15E 20NE/4 Amended 77 Misc. 7 Amended 83 Misc. 531
A-1-4 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 10207 AMY 17 76 Misc. 178 T5S R15E 20NE/4 Amended 77 Misc. 9 Amended 82 Misc. 698 M MC 10208 AMY 18 76 Misc. 180 T5S R15E 20 Amended 77 Misc. 11 M MC 10212 AMY 25 76 Misc. 188 T5S R15E 17 Amended 77 Misc. 25 Amended 84 Misc. 82 M MC 11285 AMY 112 76 Misc. 441 T5S R15E 21/28 Amended 77 Misc. 159 M MC 11286 AMY 113 76 Misc. 443 T5S R15E 21/28 Amended 77 Misc. 161 M MC 11287 AMY 114 76 Misc. 445 T5S R15E 21/28 Amended 77 Misc. 163 M MC 11288 AMY 115 76 Misc. 447 T5S R15E 21/28 Amended 77 Misc. 165 M MC 11289 AMY 116 76 Misc. 449 T5S R15E 21/28 Amended 77 Misc. 167 M MC 11290 AMY 117 76 Misc. 451 T5S R15E 21/28 Amended 77 Misc. 169 A-1-5 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 17294 AMY 125 76 Misc. 744 T5S R15E 21 Amended 77 Misc. 183 M MC 17295 AMY 126 76 Misc. 742 T5S R15E 21 Amended 77 Misc. 185 M MC 35156 GYPSUM 6 Misc. 358 T5S R15E 15, 16 M MC 35157 DUKE 19 Misc. 337 T5S R15E 15, 16 M MC 35960 ANN 3 fr. 58 Misc. 450-451 T5S R15E 29/30 M MC 35961 ANN 4 58 Misc. 452-453 T5S R15E 29 M MC 35962 ANN 4A 59 Misc. 53- 54 T5S R15E 20/29 M MC 35963 ANN 5 58 Misc. 454-455 T5S R15E 20/29/19 M MC 35964 ANN 5A 59 Misc. 55- 56 T5S R15E 19/20 M MC 35965 ANN 6 59 Misc. 26- 27 T5S R15E 19/30 M MC 35966 ANN 6A 59 Misc. 57- 58 T5S R15E 19 M MC 35967 ANN 7 59 Misc. 28- 29 T5S R15E 19/30 M MC 35968 ANN 8 59 Misc. 33- 34 T5S R15E 30 M MC 35969 ANN 9 59 Misc. 35- 36 T5S R15E 19/30 M MC 35970 ANN 10 59 Misc. 37- 38 8/14/67 T5S R15E 19SW/4 M MC 35971 ANN 11 59 Misc. 39- 40 8/14/67 T5S R15E 19W/2 M MC 35972 ANN 12 59 Misc. 41- 42 T5S R15E 19 M MC 35973 ANN 13 59 Misc. 43- 44 T5S R15E 19 M MC 35974 ANN 14 59 Misc. 45 T5S R14&15E 19&24 M MC 35975 ANN 15 59 Misc. 47 T5S R14&15E 19/24 M MC 35999 ANN 39 59 Misc. 187-188 T5S R15E 19/30 M MC 36004 ANN 44 59 Misc. 197-198 T5S R15E 21 M MC 36281 GAY 1 65 Misc. 104-105 T5S R15E 21 Amended 82 Misc. 676-677
A-1-6 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 36282 GAY 2 65 Misc. 106-107 T5S R15E 21 Amended 82 Misc. 678-679 M MC 36286 GAY 6 65 Misc. 114-115 T5S R15E 20/21 Amended 82 Misc. 684-685 M MC 36287 GAY 7 65 Misc. 116-117 T5S R15E 20/21 Amended 82 Misc. 686-687 M MC 36291 GAY 11 65 Misc. 124-125 T5S R15E 20 Amended 82 Misc. 692-693 M MC 36292 GAY 12 65 Misc. 126-127 T5S R15E 20 Amended 82 Misc. 694-695 M MC 36295 GAY 15 65 Misc. 132-133 T5S R15E 19/20 Amended 83 Misc. 523-524 M MC 36296 GAY 16 65 Misc. 134-135 T5S R15E 17/18/19/20 Amended 84 Misc. 80- 81 M MC 36360 Book Tunnel 24 Misc. 580 T5S R15E 19 & Tunnel Site
A-1-7 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 36376 Mountain View 34 Misc. 513-514 T5S R15E 20 Chrome Co. M MC 36380 No. 5 Tunnel 25 Misc. 247 T5S R15E 19 & Tunnel Site M MC 36385 Monte Alto 7 159 T5S R15E 20/21 M MC 36387 MIN No. 2 22 6 T5S R15E 28 M MC 36389 MIN No. 5 22 10- 11 T5S R15E 28 M MC 36393 Pine 8 167 T5S R15E 21 M MC 36394 RAM 25 424 T5S R15E 21/28 M MC 36396 Red Bird No. 3 8 169 T5S R15E 29 M MC 36408 CHAS F. 7 Misc. 118 7/11/18 T5S R15E 21W/2 Amended 24 Misc. 287 10/17/41 M MC 36413 Joan 24 Misc. 574 7/27/42 T5S R15E 19SW/4 M MC 36416 MIN No. 4 22 9 T5S R15E 28/21 M MC 36430 Verdi Placer 24 Misc. 513 7/27/42 T5S R15E 19S/2 M MC 53580 SUSU 16 78 Misc. 869 T5S R15E 19 Amended 83 Misc. 726 M MC 53581 SUSU 17 78 Misc. 871 T5S R15E 19N/2 Amended 83 Misc. 728 M MC 53582 SUSU 18 78 Misc. 873 T5S R15E 19N/2 Amended 83 Misc. 730 M MC 53583 SUSU 19 78 Misc. 875 T5S R15E 19N/2 Amended 83 Misc. 732 M MC 53584 SUSU 20 78 Misc. 877 11/07/79 T5S R15E 19N/2 Amended 83 Misc. 734 11/25/81 M MC 53585 SUSU 21 78 Misc. 879 11/07/79 T5S R15E 19N/2 Amended 83 Misc. 736 11/25/81 M MC 53586 SUSU 22 78 Misc. 881 11/07/79 T5S R15E 19NE/4 Amended 83 Misc. 738 11/25/81 M MC 53587 SUSU 23 78 Misc. 883 11/07/79 T5S R15E 19NE/4 Amended 83 Misc. 740 11/25/81
A-1-8 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL
M MC 53588 SUSU 24 78 Misc. 885 11/07/79 T5S R15E 19NE/4 Amended 83 Misc. 742 11/25/81 M MC 53590 SUSU 26 78 Misc. 889 11/07/79 T5S R15E 19NE/420NW/4 Amended 83 Misc. 746 11/25/81 M MC 53591 SUSU 27 78 Misc. 891 11/07/79 T5S R15E 19NE/420NW/4 Amended 83 Misc. 748 11/25/81 M MC 78928 AMY fr. 33 Misc. 443-444 10/30/67 T5S R15E 21 Amended 82 Misc. 877 M MC 78929 GAY fr. 82 Misc. 879-880 T5S R15E 21 M MC 84655 NEW 13 88 79 T5S R15E 20
A-1-9 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL Located in Stillwater and Sweet Grass Counties, Montana
BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 35976 ANN 16 59 Misc. 49 T5S R14&15E 19/24 M MC 35977 ANN 17 59 Misc. 59 T5S R14&15E 19/24 Amended 83 Misc. 754 M MC 35978 ANN 18 59 Misc. 61 T5S R14&15E 19/24 Amended 83 Misc. 756 M MC 36000 ANN 40 59 Misc. 189 T5S R14&15E 19/24 M MC 36001 ANN 41 59 Misc. 191 T5S R14&15E 19/24 Amended 83 Misc. 758
A-1-10 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL CRESCENT CREEK CLAIMS
BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 128417 RAM 1 44 297 9/17/86 T5S R14E 21 M MC 128418 RAM 2 44 301 9/17/86 T5S R14E 21 M MC 128420 RAM 4 44 241 9/19/86 T5S R14E 20/21 M MC 128421 RAM 5 44 243 9/19/86 T5S R14E 21 M MC 128423 RAM 7 44 247 9/21/86 T5S R14E 20 M MC 128424 RAM 8 44 249 9/21/86 T5S R14E 20/21 M MC 128427 RAM 11 44 255 9/22/86 T5S R14E 20 M MC 128428 RAM 12 44 257 9/22/86 T5S R14E 20 M MC 128430 RAM 14 44 261 9/24/86 T5S R14E 19/20 M MC 128431 RAM 15 44 263 9/24/86 T5S R14E 19/20 M MC 128433 RAM 17 44 237 9/17/86 T5S R14E 21 SE/4 Amended 44 341 6/18/87 M MC 128434 RAM 18 44 239 9/17/86 T5S R14E 21 SE/4 Amended 44 337 M MC 128435 RAM 19 44 267 9/27/86 T5S R14E 18/19 M MC 128436 RAM 20 44 269 9/27/86 T5S R14E 20 NW/4 Amended 44 339 T5S R14E 17 SW/4 M MC 128440 RAM 24 44 277 9/27/86 T5S R14E 18 M MC 134180 RAM 44 44 363 6/20/87 T5S R14E 20 NW/4 M MC 134181 RAM 45 44 365 6/20/87 T5S R14E 20 N/2
A-1-11 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL A-1-12 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL EXHIBIT B UNDERLYING AGREEMENTS 1. Lease Agreement dated August 5, 1988 and subsequent amendments by and between William C. DE LANNOY, individually and as trustee under the 1985 Margaret E. De Lannoy Living Trust, William G. MOUAT, individually and as trustee, John C. MOUAT, Donald D. MOUAT, Ellen A. LANGSTON, Jay DUBA, Delores NELSON, Anne FUJIWARA, Willard FERCH, Iver J. HJELVIK and Donna F. HJELVIK, Robert MOUAT, David MOUAT, Ellen L. SCHOEMER and MOUAT NICKEL MINES, INC. (collectively as the Lessors) and CHROME CORPORATION OF AMERICA, INC., a Delaware corporation (lessee) concerning patented and unpatented mining claims and tunnel sites in Stillwater and Sweet Grass Counties, Montana, for which a Notice of Lease Agreement was recorded November 2, 1988 in Misc. Book 94, page 44, records of Stillwater County, Montana and recorded November 21, 1988 in Misc. Book 59, page 22, records of Sweet Grass County, Montana. A copy of this lease (with amendments) is attached as Exhibit E. 2. Lease Agreement dated January 18, 2000 by and between MOUAT NICKEL MINES INC., William G. MOUAT, individually and as Trustee, and FORT STOCKTON INVESTMENTS, INC. (collectively as the Lessors) and CHROME CORPORATION OF AMERICA, a Delaware corporation (Lessee) concerning patented and unpatented mining claims in Stillwater County, Montana covering 31 patented claims and eight unpatented claims. A copy of this lease is attached as Exhibit D. A-1-13 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL A-1-14 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL EXHIBIT C THE CHROME PROJECT The Chrome Project will be the exploration, development, mining and processing of Chrome from the historically defined G and H chromitite units, as they are presently known, extending along a strike length of approximately 13 miles within the Properties. The G and H chromitite units are the Chrome bearing seams within the Properties that have been historically mined for Chrome and for which commercial production records are available. These units are characterized by the fact that in any particular section they: o Generally occur stratigraphically in the middle of the ultramafic series (Page and Nockleburg 1979, Zientek, et. al. 1986). o Are the thickest and laterally most persistent units. o Have distinctive Cr/Fe ratios which average 1.78. o Have a very low (less than .5 ppm) sulfur content and low to non-detectable Platinum Group Metals geochemical values. o Have a distinctive sulfur-deficient chondrite normalized signature. Capitalized words above have the same meaning as attributed to them in the Agreement to which this Exhibit is attached. The foregoing chemical data represent the current best understanding of the parties, and although accurate as of the Effective Date, they may not remain entirely accurate over time. A-1-15 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL A-1-16 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL EXHIBIT D THE NICKEL/COPPER LEASE As per Exhibit F of Joint Venture Agreement A-1-17 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL A-1-18 Montana PGM Venture Agreement February 1, 2000 CONFIDENTIAL EXHIBIT E THE CHROME LEASE As per Exhibit G of Joint Venture Agreement A-1-19 EXHIBIT 10.03 MOUAT FAMILY STILLWATER COMPLEX MINERAL CLAIMS REVISED AGREEMENT DATED MAY 1, 1999 This REVISED AGREEMENT (the "1999 Agreement") is made and entered into effective this first day of March 1999 by and between the Lessors to the 1996 AMENDED EXTENSION AGREEMENT (the "1996 Agreement"), their successors and assigns and Chrome Corporation of America Inc., a Delaware corporation ("CCA"), as Lessee. This 1999 Agreement further amends and extends the 1996 Agreement. All definitions as used or referenced in the 1996 Agreement apply unless amended herein. CCA therefore advises that: CCA shall continue to hold its 100% leasehold interest in the chromite claims identified in the Amended Extension Agreement to the Lease Agreement dated August 5, 1988 and according to the terms of that Agreement subject only to the following: (i) CCA will continue to pay all government imposed fees (presently set at $100 per claim) required to maintain the unpatented mineral claims in good standing. (ii) CCA will continue to pay for the annual spraying of noxious weeds as required by law. (iii) Item 3. on Page 2 of the 1996 Amended Extension Agreement (Payment of Lease Fees) is deleted. (iv) Item 4. on Page 2 of the 1996 Amended Extension Agreement becomes Item 3 and shall read as follows: "Upon a decision to commence construction leading to production CCA will pay the Mouat group a one time payment of US five hundred thousand dollars ($500,000) which will automatically extend the 1999 Agreement to August 5, 2006". Item (iv) above brings forward a lump sum payment to the time of the decision to commence construction leading to production rather than delay until production commences. In addition, the payment is increased from $100,000 to $500,000 to compensate for the elimination of the payment of an annual lease fee. This 1999 Agreement may be executed in counterpart, and shall be binding upon each party upon execution by that party, and shall be effective as if all parties had signed the same document. The parties to this 1999 Agreement have caused this Agreement to be duly executed as of the day and year first above written. Revised Agreement Dated May 1, 1999 LESSEE: Chrome Corporation of America Attest: [ILLEGIBLE SIGNATURE] Alistair R . Turner Executive Vice President Dated: 4/29/99 LESSORS: Fort Stockton Investments, Inc. Laurenne Sue O'Dorisio President Dated: Mouat Nickel Mines, Inc. Laurenne Sue O'Dorisio President Dated: Revised Agreement Dated May 1, 1999 William G. Mouat Lois E. de Lannoy John C. Mouat Donald D. Mouat Ellen A. Langston Donna Duba Harold A. Nelson Anne Fujiwara Willard Ferch Iver J. Hjelvik Donna F. Hjelvik Robert Mouat Donald D. Mouat Ellen L. Schoemer EXHIBIT 10.04 AMENDED EXTENSION AGREEMENT TO LEASE AGREEMENT DATED AUGUST 5, 1988 This AMENDED EXTENSION AGREEMENT (the "1996 Agreement") is made and entered into effective this fifth day of August 1996 by and between the Lessors to the 1988 Lease Agreement dated August 5, 1988 (the "1988 Lease"), their successors and assigns and Chrome Corporation of America, Inc., a Delaware corporation, ("CCA"), as Lessee. This 1996 Agreement further amends and extends the 1988 Lease and all definitions as used in the 1988 Lease apply unless amended herein. CCA continues to focus on the production of chromite from the Mt. View area in the Stillwater Complex, Montana. As previous lessees have experienced, this task is not easy even though the Mt. View area is the most accessible and easily mined chromite resource in the Stiliwater Complex. Although the Benbow area hosts significant chromite, it will not be mined in advance of the Mt. View resource. The 1988 Lease was modified and extended in 1991 and again in 1993. After dropping claims in 1993 and 1996, and as intimated in the August 2, 1996 letter from CCA (the "1996 Letter"-attached), CCA will lease those certain patented and unpatented mining claims, mill and tunnel sites as listed in: o Attachment A - 21 mineral claims that are the subject of the Mouat patent application. CCA will pay the filing fees for these claims although as you appreciate, and as in previous years, these fees are paid under protest. o Attachment B - 83 unpatented claims that CCA wishes to retain in this 1996 Amended Extension Agreement. These claims cover chromite mineralization west of the Stillwater River. CCA has paid the 1996/97 rentals for these claims. Attachments C and D list those Mouat and CCA claims being relinquished by CCA. o Attachment C - 36 unpatented Mouat lode claims have been relinquished. These include isolated mineral claims in Nye Basin that should have been returned to the Mouat group along with the mineral claims CCA relinquished in 1993. In addition, Attachment C includes a block of chrome claims east of the Benbow patented claim group. CCA believes that these claims do not have a short-to-medium term economic justification for retention. Amended Extension Agreement Effective August 5, 1996 o Attachment D - 32 unpatented lode claims controlled independently by CCA have been relinquished. The ART claims covered the eastern limits of the Stillwater Complex in the Fishtail Creek area where it is concealed beneath thick glacial overburden. The Roo claims are claims formerly controlled by Cyprus Minerals that hold a significant, low grade Ni/Cu resource. These claims are centered on Chrome Lake. CCA believes that neither claim group has value at this time. The Mouat claims included in, and subject to, the 1988 Lease and subsequent amendments are: Unpatented Patented 1988 282 11 1993 172 11 1996 104 11 In summary CCA has paid rental fees for a total of 104 Mouat group claims west of the Stillwater River, in return for the Mouat group granting an extension to the 1988 Lease as amended previously and herein. As part of a telephone conversation between Laurenne Sue O'Dorisio and CCA on July 9, 1996 and in the 1996 Letter, CCA indicated that it could not justify paying the $450,000 deferred extension and advance royalty payments described in the 1988 Lease. This letter confirms that understanding. Proposed changes to the 1993 amended lease agreement are: 1. The Subject Properties are those claims in Attachments A & B to this letter agreement together with the patented claims, water rights and other rights contained in the 1988 Lease. 2. The extended term is a five year period ending August 5, 2001. 3. The rental payments will be $6,600 per month until production commences. 4. At the time production commences, CCA will pay the Mouat group a one time payment of $100,000. 5. Production royalties shall remain as per the 1988 Lease except Lessee can offset 50% (fifty percent) of any royalty payment that might be required to be paid to the federal government as a result of changes in the mining law. Amended Extension Agreement Effective August 5, 1996 6. The parties understand that assessment work is no longer required to hold the claims listed in Attachments A and B. CCA will pay the annual rental fees to the federal government as required by law (currently $100 per claim). 7. Other payments in the 1988 Lease no longer apply. This 1996 Agreement may be executed in counterparts, and shall be binding upon each party upon execution by that party, and shall be effective as if all parties had signed the same document. The parties to this 1996 Agreement have caused this agreement to be duly executed as of the day and year first above written. LESSEE: Chrome Corporation of America [ILLEGIBLE SIGNATURE] SECRETARY Alistair R. Turner Executive Vice President Dated: 9/9/96 LESSORS: Fort Stockton Investments, Inc. Laurenne Sue O'Dorisio President Dated: 9/18/96 Mouat Nickel Mines, Inc. Laurenne Sue O'Dorisio President Dated: 9/18/96 William G. Mouat Lois E. Lannoy Amended Extension Agreement Effective August 5, 1996 John C Mouat Donald D Mouat Ellen A. Langston Donna Duba Harold Nelson Anne Fujiwara Willard Ferch Iver J. Hjelvik Donna F. Hjelvik Robert Mouat ATTACHMENT A CLAIMS INCLUDED IN PATENT APPLICATION MTMS 1443 Located in Stillwater County, Montana BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 53589 SUSU 25 78 Misc. 887 11/07/79 T5S R15E 19 Amended 83 Misc. 744 11/25/81 M MC 53592 SUSU 28 78 Misc. 893 11/07/79 T5S R15E 20 Amended 83 Misc. 750 11/25/81 M MC 53593 SUSU 29 78 Misc. 895 11/07/79 T5S R15E 20 Amended 83 Misc. 752 11/25/81 M MC 10209 AMY 19 76 Misc. 182 5/26/78 T5S R15E 20 Amended 77 Misc. 13 2/26/79 Amended 83 Misc. 533 11/06/81 M MC 10210 AMY 20 76 Misc. 184 5/26/78 T5S R15E 20 Amended 77 Misc. 15 2/26/79 Amended 83 Misc. 535 11/06/81 M MC 10211 AMY 21 76 Misc. 186 5/26/78 T5S R15E 20 Amended 77 Misc. 17 2/20/79 Amended 83 Misc. 537 11/06/81 M MC 186404 Mouat 1 Lode 96 757 9/24/91 TSS R15E 19 M MC 186405 Mouat 2 Lode 96 755 9/24/91 T5S R15E 19 M MC 186406 Mouat 3 Lode 96 753 9/25/91 TSS R15E 19 M MC 186407 Mouat 4 Lode 96 751 9/24/91 T5S R15E 19/20 M MC 186408 Mouat S Lode 96 749 9/25/91 T5S R15E 19/20 M MC 186409 Mouat 6 Lode 96 747 9/25/91 T5S R15E 19/20 M MC 186410 Monat 7 Lode 96 745 9/29/91 T5S R15E 20 M MC 186411 Mouat 8 Lode 96 743 9/27/91 T5S R15E 20 M MC 186412 Mouat 9 Lode 96 741 9/27/91 TSS R15E 20 M MC 186413 Mouat 10 Lode 96 739 9/29/91 T5S R15E 20 M MC 186414 Mouat 11 Lode 96 737 9/27/91 T5S R15E 20 M MC 186415 Mouat 12 Lode 96 735 9/27/91 T5S R15E 20 M MC 186416 Mouat 13 Lode 96 733 9/27/91 TSS R15E 20 M MC 186417 Mouat 14 Lode 96 731 9/27/91 T5S R15E 20 M MC 189232 LAKE PLACER 97 238 4/21/92 TSS R15E 20 ATTACHMENT B UNPATENTED CLAIMS BEING HELD- 1996 BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM Located in Stillwater County, Montana M MC 10191 AMY1 33 Misc. 445-446 10/30/67 TSS R15E 21 Amended 76 Misc. 146 Amended 76 Misc. 930 Amended 82 Misc. 767 M MC 10192 AMY 2 33 Misc. 447-448 10/30/67 TSS Rl5E 21 Amended 76 Misc. 148 Amended 76 Misc. 932 Amended 82 Misc. 765 M MC 10193 AMY 3 33 Misc. 449-450 10/30/67 TSS R15E 21 Amended 76 Misc. 150 Amended 76 Misc. 934 M MC 10203 AMY 13 76 Misc. 170 TSS R15E 20 Amended 77 Misc. 1 Amended 83 Misc. 525 M MC 10204 AMY 14 76 Misc. 172 TSS R15E 20 Amended 77 Misc. 3 Amended 83 Misc. 527 M MC 10205 AMY IS 76 Misc. 174 TSS R15E 20NE/4 Amended 77 Misc. 5 Amended 83 Misc. 529 M MC 10206 AMY 16 76 Misc. 176 T5S R15E 20NE/4 Amended 77 Misc. 7 Amended 83 Misc. 531 M MC 10207 AMY 17 76 Misc. 178 TSS R15E 2ONE/4 Amended 77 Misc. 9 Amended 82 Misc. 698 M MC 10208 AMY 18 76 Misc. 180 TSS R15E 20 Amended 77 Misc. 11 M MC 10212 AMY 25 76 Misc. 188 TSS R15E 17 Amended 77 Misc. 25 Amended 84 Misc. 82 M MC 11285 AMY 112 76 Misc. 441 TSS R15E 21/28 Amended 77 Misc. 159 M MC 11286 AMY 113 76 Misc. 443 T5S R15E 21/28 Amended 77 Misc. 161 M MC 11287 AMY 114 76 Misc. 445 TSS R15E 21/28 Amended 77 Misc. 163 M MC 11288 AMY 115 76 Misc. 447 TSS R15E 21/28 Am ended 77 Misc. 165 M MC 11289 AMY 116 76 Misc. 449 TSS R15E 21/28 Amended 77 Misc. 167 M MC 11290 AMY 117 76 Misc. 451 TSS R15E 21/28 Amended 77 Misc. 169 Total Claims listed on this page: 16 BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 17294 AMY 125 76 Misc. 744 T55 R15E 21 Amended 77 Misc. 183 M MC 17295 AMY 126 76 Misc. 742 T55 R15E 21 Amended 77 Misc. 185 M MC 351S6 GYPSUM 6 Misc. 358 T5S R15E 15, 16 M MC 35157 DUKE 19 Misc. 337 T5S R15E 15, 16 M MC 35960 ANN 3 fr. 58 Misc. 450-451 TSS R15E 29/30 M MC 35961 ANN 4 58 Misc. 452-453 T55 R15E 29 M MC 35962 ANN 4A 59 Misc. 53-54 T55 R15E 20/29 M MC 35963 ANN 5 58 Misc. 454-455 T55 R15E 20,29/19 M MC 35964 ANN 5A 59 Misc. 55-56 T5S R15E 19/20 M MC 35965 ANN 6 59 Misc. 26-27 T55 R15E 19/30 M MC 35966 ANN 6A 59 Misc. 57-58 T5S R15E 19 M MC 35967 ANN 7 59 Misc. 28-29 T5S R15E 19/30 M MC 35968 ANN 8 59 Misc. 33-34 T55 R15E 30 M MC 35969 ANN 9 59 Misc. 35-36 T5S R15E 19/30 M MC 35970 ANN 10 59 Misc. 37-38 T5S R15E 19SW/4 M MC 35971 ANN 11 59 Misc. 39-40 8/14/67 T5S R15E 19W/2 M MC 35972 ANN 12 59 Misc. 41-42 8/14/67 TSS R15E 19 M MC 3S973 ANN 13 59 Misc. 43-44 TSS R15E 19 M MC 35974 ANN 14 59 Misc. 45 T5S R14&15E 19&24 M MC 35975 ANN 15 59 Misc. 47 T5S R14&1SE 19/24 M MC 35999 ANN 39 59 Misc. 187-188 TSS R15E 19,30 M MC 36004 ANN 44 59 Misc. 197-198 T5S R15E 21 M MC 36281 GAYl 65 Misc. 104-105 T5S R15E 21 Amended 82 Misc. 676-677 M MC 36282 GAY 2 65 Misc. 106-107 T55 R15E 21 Amended 82 Misc. 678-679 M MC 36286 GAY 6 65 Misc. 114-115 T55 R15E 20/21 Amended 82 Misc. 684-685 M MC 36287 GAY 7 65 Misc. 116-117 TSS R15E 20/21 Amended 82 Misc. 686-687 M MC 36291 GAY 11 65 Misc. 124-125 T55 R15E 20 Amended 82 Misc. 692-693 M MC 36292 GAY 12 65 Misc. 126-127 TSS R15E 20 Amended 82 Misc. 694-69S M MC 36295 GAY 15 65 Misc. 132-133 T55 R15E 19/20 Amended 83 Misc. 523-524 M MC 36296 GAY 16 65 Misc. 134-135 TSS R15E 17/18/19/20 Amended 84 Misc. 80-81 M MC 36360 Book Tunnel 24 Misc. 580 TSS R15E 19 & Tunnel Site M MC 36376 Mountain View 34 Misc. 513-514 TSS R15E 20 Chrome Co. M MC 36380 No. 5 Tunnel 25 Misc. 247 T55 R15E 19 & Tunnel Site Total claims listed on this page: 33 BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM M MC 36385 Monte Alto 7 159 TSS R15E 20/21 M MC 36387 MIN No. 2 22 6 TSS R15E 28 M MC 36389 MIN No. 5 22 10-11 T5S R15E 28 M MC 36393 PINE 8 167 TSS R15E 21 M MC 36394 RAM 25 424 TSS R15E 21/28 M MC 36396 Red Bird No. 3 8 169 T5S R15E 29 M MC 36401 SMELTER 2 385 TSS R15E 21 M MC 36403 SUE 16 325 TSS R15E 21 M MC 36407 Billie 7 Misc. 242 10/17/18 T5S R15E 20E/2 M MC 36408 CHAS F. 7 Misc. 118 7/11/18 T5S R15E 21W/2 Amended 24 Misc. 287 10/17/41 M MC 36410 GAP 24 Misc. 219 7/31/41 TSS R15E 29 Amended 24 Misc. 290 10/17/41 M MC 36413 Joan 24 Misc. 574 7/27/42 T5S R15E 19SW/4 M MC 36416 MIN No. 4 22 9 T5S R15E 28/21 M MC 36430 Verdi Placer 24 Misc. 513 7/27/42 T5S R15E 195/2 M MC 36431 WEST LAKE 7 Misc. 116 7/11/18 TSS R15E? M MC 53580 SUSU 16 78 Misc. 869 TSS R15E 19 Amended 83 Misc. 726 M MC 53581 SUSU 17 78 Misc. 871 TSS R15E 19Nf2 Amended 83 Misc. 728 M MC 53582 SUSU 18 78 Misc. 873 TSS R15E 19N/2 Amended 83 Misc. 730 M MC 53583 SUSU 19 78 Misc. 875 TSS R15E 19N/2 Amended 83 Misc. 732 M MC 53584 SUSU 20 78 Misc. 877 11/07/79 T5S R15E 19N/2 Amended 83 Misc. 734 11/25/81 M MC 53585 SUSU 21 78 Misc. 879 11/07/79 T5S R15E 19N/2 Amended 83 Misc. 736 11/25/81 M MC 53586 SUSU 22 78 Misc. 881 11/07/79 T5S R15E I9NE/4 Amended 83 Misc. 738 11/25/81 M MC 53587 SUSU 23 78 Misc. 883 11/07/79 T5S R15E 19NE/4 Amended 83 Misc. 740 11/25/81 M MC 53588 SUSU 24 78 Misc. 885 11/07/79 T5S R15E I9NE/4 Amended 83 Misc. 742 11/25/81 M MC 53590 SUSU 26 78 Misc. 889 11/07/79 T5S R15E I9NE/420NW/4 Amended 83 Misc. 746 11/25/81 M MC 53591 SUSU 27 78 Misc. 891 11/07/79 T55 R15E I9NE/420NW/4 Amended 83 Misc. 748 11/25/81 M MC 78928 AMY fr. 33 Misc. 443-444 10/30/67 T5S R15E 21 Amended 82 Misc. 877 M MC 78929 GAY fr. 82 Misc. 879-880 TSS R15E 21 M MC 84655 NEW 13 88 79 TSS R15E 20 Total claims listed on this page: 29 UNPATENTED CLAIMS BEING HELD- 1996 BLM DATE LOCATION SERIAL OF OF NUMBER NAME BOOK PAGE LOCATION CLAIM Located in Stillwater and Sweet Grass Counties, Montana M MC 35976 ANN 16 59 Misc. 49 T5S R14&15E 19/24 M MC 35977 ANN 17 59 Misc. 59 TSS R14&15E 19/24 Amended 83 Misc. 754 M MC 35978 ANN 18 59 Misc. 61 TSS R14&15E 19/24 Amended 83 Misc. 756 M MC 36000 ANN 40 59 Misc. 189 TSS R14&1SE 19/24 M MC 36001 ANN 41 59 Misc. 191 T5S R14&1SE 19/24 Amended 83 Misc. 758 Located Entirely in Sweet Grass County, Montana M MC 128417 RAM 1 44 297 9/17/86 T5S R14E 21 M MC 128418 RAM 2 44 301 9/17/86 T5S R14E 21 M MC 128420 RAM 4 44 241 9/19/86 T5S R14E 20/21 M MC 128421 RAM 5 44 243 9/19/86 T5S R14E 21 M MC 128423 RAM 7 44 247 9/21/86 T5S R14E 20 M MC 128424 RAM 8 44 249 9/21/86 TSS R14E 20/21 M MC 128427 RAM 11 44 255 9/22/86 T5S R14E 20 M MC 128428 RAM 12 44 257 9/22/86 TSS R14E 20 M MC 128430 RAM 14 44 261 9/24/86 TSS R14E 19/20 M MC 128431 RAM 15 44 263 9/24/86 T5S R14E 19/20 M MC 128433 RAM 17 44 237 9/17/86 TSS R14E 21 SE/4 Amended 44 341 6/18/87 M MC 128434 RAM 18 44 239 9/17/86 T5S RI4E 21 SE/4 Amended 44 337 M MC 128435 RAM 19 44 267 9/27/86 TSS RI4E 18/19 M MC 128436 RAM 20 44 269 9/27/86 TSS R14E 20 NW/4 Amended 44 339 TSS R14E 17 SW/4 M MC 128440 RAM 24 44 277 9/27/86 TSS R14E 18 M MC 134180 RAM 44 44 363 6/20/87 TSS R14E 20 NW/4 M MC 134181 RAM 45 44 365 6/20/87 TSS R14E 20 N/2 Total claims listed on this page: 22 CHROME CORPORATION OF AMERICA 12640 W. Cedar Drive Suite B Lakewood, Colorado 80228 (303) 969-8903 Fax: (303) 969-8905 August 2,1996 Via Fax and Federal Express Mr. William G. Mouat, Trustee 2929 Third Ave. N. Billings, MT 59101 Dear Bill- As explained in my phone message today, Alistair planned to negotiate with you the extension of the Stiliwater lease which expires August 5, 1996 upon his return from his trip to Australia and New Zealand. Alistair decided to extend his time in New Zealand by a week in order to have more time with his mother and will not return until August 7th. As Alistair indicated in prior conversations with you and other parties to the lease, Chrome Corporation of America wishes to extend this lease on the same basis as the current lease with the exception of probably dropping some of the claims from the lease and eliminating the $450,000 payment. In order to give Alistair time to return to the states and to meet with you in Billings, I recommend we extend the lease for a one-month period. We will make a $6,600 payment this month. If you are in agreement with this, please sign the acknowledgement and return one copy for our files. Sincerely, Chrome Corporation of America David M. Hyslop , Treasurer Acknowledeement The undersigned, as Trustee for all Lessors, agrees that the Lease entered into August 5, 1988 by and between William C. de Lannoy, et. al. and Chrome Corporation of America should be extended for a one month period. Dated: August 5, 1996 WILLIAM G. MOUAT Trustee for all Lessors LAW OFFICES WILLIAM G. MOUAT SUITE 817 WESTERN FEDERAL SAVING BUILDING BILLINGS, MONTANA 59101 TELEPHONE:(408) 246-7831 FAX Number: (406) 245-8452 FACSIMILE COVER SWEET TO: Alistair Turner - Boulder Gold Location: Lakewood, Colorado FAX Number: (303) 969-8903 Today's Date: 7/16/93 Time: 9:00 AM Number of Pages (including Cover Sheet): 2 The accompanying letter was mailed to members of the mouat group on 7/23/93 WILLIAM G. MOUAT LAW OFFICES WILLIAM G. MOUAT SUITE 817 WESTERN FEDERAL SAVING BUILDING BILLINGS, MONTANA 59101 TELEPHONE:(408) 246-7831 FAX Number: (406) 245-8452 FACSIMILE COVER SWEET TO: Diane Gates KPMG - Peat Marwick 2300 ARCO Tower 707 - 17th. Street Denver, CO 80202 Location: FAX Number: (303) 295-8828 Today's Date: 8/20/93 Time: 10:15 A.M. Number of Pages (Including Cover Sheet) 1 The Lease dated August 5, 1989, between Chrome Corporation of America, Inc., as Lessee and the Mouat group as Lessors, has been modified effective August 5, 1993, to continue the lease payments of $6,600 per month for three years, to drop some of the claims from the lease and to defer the $450,000 payment due August 5, 1993, for three years, subject to further discussion. WILLIAM G. MOUAT for the Mouat Group July 23, 1993 To: All interest holders in claims leased to Chrome Corp.: Enclosed is a letter dated July 12, 1993, from Chrome Corporation of America which I believe is self-explanatory; also, a copy of Report by CCA reflecting certain work done and progress made by it from the time it leased the chrome claims from us on August 5, 1988. Also enclosed are copies of letters from Mr. Turner dated 7/20/93 and 7/21/93 and received today. For reasons outlined in the enclosed letters, CCA is requesting that we grant it some relief from some of the lease requirements, the foremost of which is the $45O,OO0 due August 5, 1993, and the dropping of some of the claims in the present lease. CCA proposes to continue making the $6,600 monthly payments for the term of a proposed 3-year extension of the lease. The claims to be retained and relinquished are listed in the FAX sheets received today and enclosed herewith. The list of claims to be retained does not specifically include the 21 chrome claims included in our present patent application but they will be retained. I think we should act quickly on this matter to decide what to do. As you know, the Government requires that $200 per claim be paid by September 1st of this year in order to maintain claims in good standing until September 1, l994. Performing annual assessment work will no longer suffice to hold a claim. The question of making annual payments in lieu of performing assessment work to hold claims in the future is uncertain after September 1, 1994. We only know that it applies now for the years ending September 1, 1993 and September 1, 1994. COA's letter dated July 12, 1993, recites that "The $450,000 due this August 5th cannot be justified". I do not know whether or not CCA would be willing to defer for 3 years the present requirement of making this payment or whether they want to eliminate it altogether. We should suggest the deferment rather than the elimination of this requirement. (See Mr. Turner's reference to this matter in his letter dated 7/20/93). Mr. Turner, in his 7/12/93 letter, refers to our group as the Mouat Estate. This term is not precisely correct, but we realize it is intended to mean the Mouat group who leased the claims to Boulder Gold on August 5, 1988. It is my impression that if we accept CCA's proposal we will be extending the term of the lease by three years and dropping certain claims from the lease that have questionable value. Also, CCA will make the payments to the Government of $200 per claim this year as rental fee on claims retained, and will pay, as long as is necessary, the required rental fee on the claims for which patent application has been made. The foregoing shall not alter the terms of the 9/14/88 lease except as herein set forth. If you agree with CCA's proposal, as modified in this letter, please indicate your acceptance below, and return the acceptance portion to my office. Very truly yours, WILLIAM G. MOUAT The foregoing letter dated July 23, 1993, is agreeable and is accepted this ______ day of ___________, 1993. CHROME CORPORATION OF AMERICA 12640 W Cedar Drive Suite B Lakewood, Colorado 80228 (303) 969-8903 Fax: (303) 969-8905 Mr. William C. Mouat Individually and as Trustee Representing Owners of Stillwater Mining Claims 2929 Third Ave. N. 317 First Federal Savings Bldg. Billings, MT 59101 Dear Bill: As a result of our discussions during the last two weeks and of discussions we have had together and separately with the Bureau of Land Management we agree as follows: * That certain lands under lease from William C. Mouat and the Brian-Paul and Laurenne--Sue O'Dorisio family trust (The O'Dorisio Trust) and from William G. Mouat and individual Mouat family members (Family Group) to Chrome Corporation of America (CCA) should be surveyed and submitted to the Bureau of Land Management for an application for patent. * That you will transfer the two ownerships into a single Trust that would then make application for the patent. This would greatly simplify the application process and the following calculations are made on this basis. It is CCA's recommendation that we immediately begin the work necessary to patent the Apex Claims defined below and stake four additional claims. Depending on the outcome of new legislation and the success of the patent application on the Apex claim, consideration could be given to applying for patent on the Extralateral Rights Claims. The segregation of the claims into Apex Claims and Extralateral Rights Claims are as follows: Apex Claims The Susu lode claims numbered 25, 28 and 29 The Sun lode claim The Toe lode claim The Amy lode claims numbered 19, 20 and 21 The Lake Placer claim The Soup lode claim The Westlake lode claim The Gap lode claim The Pete lode claim The Star lode claim The Old Lady lode claim The Scully lode claim Mouat - Letter - August 5, 1991 Page 2 The Denver lode claim The Link lode claim The Skunk lode claim The Princtons lode claim The Peggy lode claim Extralateral Rights Claims The Susu lode claims numbered 17, 18, 19, 20, 21, 22, 23, 24, 26 and 27 The Ann lode claims numbered 10 and 11 The Joan lode claim The Amy lode claims numbered 15, 16 and 17 The Verdi Placer lode claim The Apex Claims should have priority over the Extralateral Rights Claims. In addition we have discussed the staking of four lode claims; three lode claims over open areas on the Verdi Placer claim and a fourth lode claim over a triangular open area east of the Verdi Placer claim. The three claims on the Verdi Placer should be considered as Apex Claims for patent purposes. The fourth claim can be considered as an Extralateral Rights Claim. With these three new Apex Claims a total of 23 lode claims and one placer claim are considered high priority for patent purposes. It was confirmed by Mr. Dick Thompson of the Bureau of Land Management, Billings Office, that fees for application for a cadastral survey prior to an application for patent are $700 for the first claim and $500 for each subsequent claim in a contiguous group that has common ownership. However, because of timing, the four claims that should be staked within the open areas would need to be applied for patent in two separate and subsequent applications because they are not contiguous. Three claims in the Verdi Placer claim would constitute one application and the fourth claim, to the east, a second. It is anticipated that each existing claim will cost $1,500 to survey and that each of the four new claims will cost $2,000 to stake and survey. Therefore, upon approval by the new Trustee, three applications will be required for all claims to be patented. The costs of applying for the survey and the survey costs are estimated as follows: Apex and Extralateral Rights Claims One application (38 claims) Application fees $19,200 Survey costs 57,000 ------ 76,200 William G. Mouat - Letter - August 5, 1991 Page 3 New Claims ---------- 1st Application (3 claims) Application fees $ 1,700 Survey costs 6,000 ----------- 7,700 2nd Application (1 claim) Application fees $ 700 Survey costs 2,000 ----------- 2,700 ----------- Combined Total $86,600 =========== If all claims were to be applied for patent total combined costs are estimated to be $86,600. This is without any title work, patent application fees, organizational, management, supervision, and administrative costs. If we separate the Apex Claims from the Extralateral Rights Claims and apply for patents on the Apex Claims only, the following costs would apply: Apex Claims One application (21 claims) Application fees $10,700 Survey costs 31,500 ----------- 42,200 New Claims 1st Application (3 claims) Application fees $ 1,700 Survey costs 6,000 ----------- 7,700 ----------- $49,900 =========== Survey for patent application fees and survey costs, without considering title, organizational, management, supervision, and administrative costs are therefore $49,900. If we were to concentrate on patenting only the Apex Claims and staking the four new claims on the open areas, there would be money left to complete the title work on all of the claims. Assuming we spend $49,900 for filing applications, surveying and staking the Apex Claims and the New Claims, there would be $29,300 left to apply towards the title work. This equates to $700 for each of the 42 claims. It is our belief that the incremental costs of doing the title work on the Extralateral Rights Claims at the same time the work is being done on the Apex Claims would not be very great. Once this title work is done on the Extralateral Rights Claims, we should be able to inexpensively update the information and get actual certificates issued when we decide to patent these claims. William C. Mouat - Letter - August 5, 1991 Page 4 CCA, as lessor, has no long term interest in these mineral claims upon termination of the lease agreement dated 5th August 1988. The successful completion of the patent process does, however, inure to the benefit of the ownership groups. CCA therefore believes that the ownership groups should be responsible for costs involved in the patent process in order that they may guarantee their rightful long term potential for income from future royalties on chrome and platinum group mineral production. According to our existing 1988 agreement CCA's lease fees due August 5, 1991 are $75,000. We propose that: * CCA pays a total of $6,600 per month which represents the amortization of the $75,000 rental payment over a twelve month period. The effective annual interest rate is about 10.2% compounded monthly. The first payment will be made immediately upon acceptance of the terms of this letter. * From the monthly payments, the Trust will pay the agreed upon patent costs as they become due. If the cumulative payments CCA has made at any time throughout the year do not equal or exceed the expenses the Trust is incurring to proceed with the patent process, CCA will make up any difference and recover that difference from future monthly payments due to the Trust. * The Trust's exposure for patent costs shall not exceed the cumulative payments made to the Trust during the year. It is also agreed that both parties will endeavor to restrict the total costs spent in the next twelve months on this project to $79,200. * CCA will provide its administrative and technical services at no cost. * Expenditures, if any, that are additional to the costs agreed upon in this letter and that may arise in the future in connection with the patenting process must be agreed upon by all parties to this agreement before being incurred. Between 1962 and 1988 the Mouat family interests in the chromite resource in the Stillwater Complex languished. Since 1985 CCA has aggressively pursued the economic production of chromite from the Mouat interests claim blocks through drilling to increase reserves, researching new technology for the economic production of chromium products, rehabilitating existing mine openings, undertaking extensive environmental base--line studies and drill testing new potential resources including platinum group minerals. CCA has added considerable value to the Mouat interests in the Stillwater Complex. It and its joint venture partners have spent in excess of $10,000,000 in pursuing the goal of production profitable to all parties. William G. Mouat - Letter - August 5, 1991 Page 5 Attached please find recent announcements that explain our present position and hopes for the near future. I trust that you will accept the proposals outlined in this letter in the best interests of an aggressive move to protect the Mouat family and CCA's economic future in the Stillwater Complex. If you do concur please sign in the manner provided below. Sincerely yours, Alistair R. Turner Executive Vice President ART : cam Agreed to: 8/9/91 William G. Mouat Date Trustee and as Trustee and Representative MEMORANDUM OF LEASE AGREEMENT NOTICE is hereby given that WILLIAM C. de LANNOY, individually and as Trustee under the 1985 MARGARET E. de LANNOY LIVING TRUST, WILLIAM G. MOUAT, individually and as Trustee, JOHN C. MOUAT, DONALD D. NOUAT. ELLEN A. LANOSTON, JAY DUBA, DOLORES NELSON, ANNE FUJIWARA, WILLARD FERCH, IVER J. HJELVIK and DONNA F. HJELVIK, ROBERT MOUAT, DAVID MOUAT, ELLEN L. SCHOEMER and MOUAT NICKEL NINES, INC. (therein and hereinafter referred to collectively as the "Lessors") and CHROME CORPORATION OF AMERICA, INC., a Delaware corporation, having offices at 12640 West Cedar Drive, Lakewood, Colorado 80228 (therein and hereinafter referred to as the "Lessee"), have entered into that Lease Agreement dated August 5, 1988. with respect to certain patented and unpatented mining claims, millsites and tunnel sites located in Stillwater and Sweet Grass Counties of Montana (therein and hereinafter referred to as "Subject Premises") described in Schedule A attached hereto and incorporated herein by this reference. For good and valuable consideration under the terms of the Lease Agreement for an initial term of five years from the date thereof, with an option to extend said initial term for an additional two years. and so long thereafter as ore--bearing materials are produced from the Subject Premises in commercial quantities, as that term is defined and used in the Lease Agreement, Lessors have granted and do hereby grant Lessee the following rights: (a) the right to explore, develop, mine, extract and remove or sell chromite, or other chromium bearing ores, and all other minerals, metals, precious stones, or rocks found in, on or under the Subject Premises; (b) the right, during the continuance of this Lease, to take and use any material suitable for backfilling, or other mining purposes, and any limestone found in the premises; (c) the right to use all existing facilities, except the hoist and crusher that are currently on the Subject Premises, and the right to construct all mills, plants, tracks, traruways, roads, buildings, and other improvements; (d) the right to use and develop any and all excavations, openings, tunnels, ditches, flumes, drains and other improvements on the Subject Premises; (e) the right to use all water and water rights identified in Schedule B, attached to and incorporated in the Lease Agreement, and to develop additional water and water rights appurtenant to the Subject Premises; (f) the right to do all other acts and things which are, or may become necessary or suitable in the discretion of Lessee, including without limitation the right to use or disturb so much of the surface and surface resources of the Subject Premises as Lessee may deem desirable, for the mining and removing of chromite or other ores, metals, minerals, rocks and precious stones, the milling, beneficiating, concentrating, smelting, refining, or leac,ing of such ores, metals, minerals and other materials, or the concentrates thereof; (g) the right to cut and use timber and other raw materials found upon, or in said premises for any purpose in connection with the operations to be carried on under this Lease; and (h) such rights of surface and underground access for men, equipment, supplies, utilities and water as nay be necessary or convenient for the conduct of Lesse&s operations on any portion of the Subject Premises or on other lands, including necessary access under, upon, and across any other contiguous land owned or controlled by Lessors or which Lessors may have dominion or control. The Lease Agreement is incorporated herein by this reference and made a part hereof. Copies of the Lease Agreement are in the possession of: William G. Mouat 317 First Federal Savings Building 2929 Third Avenue North Billings, Montana 59101 Chrome Corporation of America, Inc. 12640 West Cedar Drive Lakewood, Colorado 80228 IN WITNESS WHEREOF, this Memorandum of Lease Agreement has been executed as of Auqust 5, 1988. LESSORS: WILLIAM C. de LANNOY, individually and as Trustee under the 1985 MARGARET E. de LANNOY LIVING TRUST WILIIAM G. MOUAT individually and as Trustee JOHN C. MOUAT DONALD D. MOUAT ELLEN A. LANGSTON JAY DUBA DOLORES NELSON ANNE FUJIWARA WILLARD FERCH IVER J. HJELVIK DONNA F. HJELVIK SCHEDULE "A" Mining Claims situated in Stillwater County, Montana PATENTED LODE CLAIMS (1) BALD EAGLE 69 D UNPATENTED LODE CLAIMS (19) ORIGINAL LOCATION DATE BLM SERIAL RECORDING DATA NUMBER BOOK PAGE Mountain View Chrome 23 Misc. 43 9/22/39 MMC 36417 Company No. 1* Mountain View Chrome 23 Misc. 434 8/31/40 MMC 36418 Company No. 2* Soup 24 Misc. 273 10/03/41 MMC 36427 Pete* 7 Misc. 122 7/11/18 MMC 36422 Old Lady 7 Misc. 114 7/11/18 MMC 36420 Star 7 Misc. 229 10/07/18 MMC 36428 Princetons 24 Misc. 122 5/08/41 MMC 36423 Sampson 24 Misc. 126 5/08/41 MMC 36424 Scully* 7 Misc. 122 7/11/18 MMC 36425 Denver* 7 Misc. 233 10/07/18 MMC 36409 Hess 25 Misc. 289 11/17/43 MMC 36411 Skunk 24 Misc. 128 5/08/41 MMC 36426 Oldco 24 Misc. 124 5/08/41 MMC 36419 Sun 24 Misc. 249 8/23/41 MMC 36429 Toe 24 Misc. 614 8/28/42 MMC 36404 Adam 24 Misc. 207 7/19/41 MMC 36406 Peggy 24 Misc. 571 7/27/42 MMC 36421 Joan 24 Misc. 574 7/27/42 MMC 36413 Link 24 Misc. 209 7/19/41 MMC 36415 UNPATENTED PLACER CLAIMS (2) Lake* Place 23 Misc. 400 7/16/40 MMC 36414 Verdi 24 Misc. 573 7/27/42 MMC 36430 * Amended Location, also see detailed claim list, Mouat Estate SCHEDULE A (continued) CLAIM LIST - WEST OF SILLWATER RIVER PATENTED LODE CLAIMS Cataract 69C Avalanche 69B Brooklyn 69A MILL SITE + TUNNEL SITE CLAIMS Mountain View Chrome Co. Mill Site Book Tunnel & Dump Site No. 5 Tunnel & Dump Site UNPATENTED LODE CLAIMS ORIGINAL LOCATION DATE BLM SERIAL RECORDING DATA NUMBER BOOK PAGE AMY 25* 76 Misc. 188 MMC 10212 AMY 13* 76 Misc. 170 MMC 10203 AMY 14* 76 Misc. 172 MMC 10204 AMY 15* 76 Misc. 174 MMC 10205 AMY 16* 76 Misc. 176 MMC 10206 AMY 20* 76 Misc. 184 MMC 10210 AMY 18* 76 Misc. 180 MMC 10208 AMY 21* 76 Misc. 186 MMC 10211 AMY 19* 76 Misc. 182 MMC 10209 GAY 15* 65 Misc. 132-133 MMC 36295 GAY 16* 65 Misc. 134-135 MMC 36296 ANN 3 fr. ANN 42 fr. 59 Misc. 193-194 MMC 36002 ANN 3 58 Misc. 452-453 MMC 35961 ANN 4A 59 Misc. 53- 54 MMC 35962 RED BIRD No.3 8 Misc. 169 MMC 36396 ANN 5 58 Misc. 454-455 MMC 35963 ANN 5A 59 Misc. 55- 56 MMC 35964 ANN 6 59 Misc. 26- 27 MMC 35965 ANN 6A 59 Misc. 57- 58 MMC 35966 ANN 7 59 Misc. 28- 29 MMC 35967 ANN 9 59 Misc. 35- 36 MMC 35969 ANN 10 59 Misc. 37- 38 MMC 35970 EMA 11 33LL 475-476 MMC 36066 EMA 13 33LL 479-480 MMC 36068 EMA 18 33LL 489-490 MMC 36073 EMA 12 33LL 477-478 MMC 36067 * Amended Location; see also detailed claims list, Mouat Estate. SCHEDULE A (continued) ORIGINAL LOCATION DATE BLM SERIAL RECORDING DATA NUMBER BOOK PAGE EMA 15 33LL 483-484 MMC 36070 FLO 18 35LL 75- 76 MMC 36261 SUSU 26* 78 Misc. 889 MMC 53590 SUSU 27* 78 Misc. 891 MMC 53591 SUSU 28* 78 Misc. 893 MMC 53592 SUSU 29* 78 Misc. 895 MMC 53593 SUSU 22* 78 Misc. 881 MMC 53586 SUSU 23* 78 Misc. 883 MMC 53587 SUSU 24* 78 Misc. 885 MMC 53588 SUSU 25* 78 Misc. 887 MMC 53589 SUSU 18* 78 Misc. 873 MMC 53582 SUSU 19* 78 Misc. 875 MMC 53583 SUSU 20* 78 Misc. 877 MMC 53584 SUSU 21* 78 Misc. 879 MMC 53585 ANN 11 59 Misc. 39- 40 MMC 35971 ANN 12 59 Misc. 41- 42 MMC 35972 ANN 13 59 Misc. 43- 44 MMC 35973 ANN 39 59 Misc. 187-188 MMC 35999 SUSU 16* 78 Misc. 869 MMC 53580 SUSU 17* 78 Misc. 871 MMC 53581 ANN 14 59 Misc. 45 MMC 35974 ANN 15 59 Misc. 47 MMC 35975 EMA 16 33LL 485-486 MMC 36071 EMA 17 33LL 487-488 MMC 36072 EMA 10 33LL 473-474 MMC 36065 EMA 20 33LL 493-494 MMC 36075 FLO 20 35LL 79- 80 MMC 36063 EMA 21 33LL 495-496 MMC 36076 ANN 43 59 Misc. 195-196 MMC 36003 SCHEDULE A (continued) MINING CLAIMS SITUATED IN STILLWATER AND SWEETGRASS COUNTIES, MONTANA ORIGINAL LOCATION DATE BLM SERIAL RECORDING DATA NUMBER BOOK PAGE PATENTED LODE CLAIMS NEW WABELISKI 68B UNPATENTED LODE CLAIMS ANN 16 59 Misc. 49 MMC 35976 ANN 17 59 Misc. 59 MMC 35977 ANN 18 59 Misc. 61 MMC 35978 ANN 40 59 Misc. 189 MMC 36000 ANN 41* 59 Misc. 191 MMC 36001 SUSU 1* 43LL 205 MMC 53568 SUSU 4* 43LL 197 MMC 53571 MINING CLAIMS SITUATED IN SWEETGRASS COUNTY, MONTANA PATENTED LODE CLAIMS Summit 68A UNPATENTED LODE CLAIMS ANN 19 33QL 367 MMC 35979 ANN 20 33QL 369 MMC 35980 SUSU 5* 43LL 199 MMC 53572 SUSU 2* 43LL 207 MMC 53569 ANN 23 33QL 375-376 MMC 35983 ANN 22 33QL 373-374 MMC 35982 ANN 21 33QL 371-372 MMC 35081 SUSU 6* 43LL 201 MMC 53573 SUSU 3* 43LL 209 MMC 53570 ANN 24 33LL 377-378 MMC 35984 ANN 25 33LL 379-380 MMC 35985 ANN 26 33LL 381-382 MMC 35986 EMA 3 33LL 459-460 MMC 36058 EMA 1 33LL 459-460 MMC 36056 EMA 5 33LL 459-460 MMC 36060 EMA 2 33LL 459-460 MMC 36057 * Amended Location; also see detailed claim list, Mouat Estate. SCHEDULE A (continued) ORIGINAL LOCATION DATE BLM SERIAL RECORDING DATA NUMBER BOOK PAGE EMA 4 33LL 461-462 MMC 36059 EMA 6 33LL 465-466 MMC 36061 EMA 7 33LL 467-468 MMC 36062 EMA 9 33LL 471-472 MMC 36064 EMA 8 33LL 469-470 MMC 36063 EMA 19 33LL 491-492 MMC 36074 EMA 14 33LL 481-482 MMC 36069 FLO 19 35LL 77- 88 MMC 36262 EMA 22 33LL 497-498 MMC 36077 FLO 31 35LL 101-102 MMC 36274 FLO 21 35LL 81- 82 MMC 36264 FLO 17 35LL 73- 74 MMC 36260 EMA 25 33LL 503-504 MMC 36080 SUSU 7* 43LL 219 MMC 53574 SUSU 8 43LL 203 MMC 53575 SUSU 10 43LL 211 MMC 53576 SUSU 11 43LL 213 MMC 53577 SUSU 12 43LL 215 MMC 53578 SUSU 13 43LL 217 MMC 53579 SCHEDULE A (continued) CLAIM LIST - INDUSTRIAL/INFRASTRUCTURE ACREAGE PATENTED LODE CLAIMS STILLWATER 63E SOMETHING 72B PATENTED PLACER CLAIMS PATENTED MILL SITES UNPATENTED LODE CLAIMS ORIGINAL LOCATION DATE BLM SERIAL RECORDING DATA NUMBER BOOK PAGE AMY fr. 82 Misc. 877 MMC 78928 AMY 1* 76 Misc. 146 MMC 10191 AMY 2* 76 Misc. 148 MMC 10192 AMY 3* 76 Misc. 150 MMC 10193 GAY 1* 65 Misc. 104-105 MMC 36281 GAY 2* 65 Misc. 106-107 MMC 36282 GAY 6* 65 Misc. 114-115 MMC 36286 GAY 7* 65 Misc. 116-117 MMC 36287 AMY 17* 76 Misc. 178 MMC 10207 GAY 11* 65 Misc. 124-125 MMC 36291 GAY 12* 65 Misc. 126-127 MMC 36292 PINE 8 67 MMC 36333 SMELTER 2 385 MMC 36401 AMY 125* 76 Misc. 744 MMC 17294 AMY 126* 76 Misc. 742 MMC 17295 AMY 112* 76 Misc. 441 MMC 11285 AMY 113* 76 Misc. 443 MMC 11286 AMY 114* 76 Misc. 445 MMC 11287 AMY 115* 76 Misc. 447 MMC 11288 AXE 37 59 Misc. 131 MMC 36042 AXE 34 59 Misc. 122 MMC 36039 AXE 33 59 Misc. 120 MMC 36038 * Amended Location; also see detailed claim list, Mouat Estate. SCHEDULE A (continued) ORIGINAL LOCATION DATE BLM SERIAL RECORDING DATA NUMBER BOOK PAGE AMY 116* 76 Misc. 449 MMC 11289 AMY 117* 76 Misc. 451 MMC 11290 ANN 44 59 Misc. 197--198 MMC 36004 SUE 16 325 MMC 36403 RAM 25 424 MMC 36394 AMY 118* 76 Misc. 453 MMC 11291 AMY 119* 76 Misc. 455 MMC 11292 AMY 120* 76 Misc. 457 MMC 11293 JOHN 24 418 MMC 36383 MARIE 16 324 AMY 121* 76 Misc. 459 MMC 11294 AMY 127* 76 Misc. 127 MMC 17296 MALO 24 Misc. 205 MMC 36384 ANN 59 Misc. 51-- 52 MMC 35957 ANN 27 59 Misc. 163--164 MMC 35987 ANN 38 59 Misc. 185--186 MMC 35998 AMY 128* 76 Misc. 738 MMC 17297 AMY 123* 76 Misc. 461 MMC 11295 AMY 124* 76 Misc. 463 MMC 11296 AXE 36 59 Misc. 129 MMC 26041 AXE 35 59 Misc. 127 MMC 36040 AMY 12 76* Misc. 168--169 MMC 10202 AMY 140* 76 Misc. 716--717 MMC 17309 GAY fr. 82 Misc. 879--880 MMC 78929 UNTPATENTED PLACER CLAIMS ------------------------- MIN NO. 2 22 6 MMC 36387 (portion not leased to SMC) MIN NO. 4 22 9 MMC 36416 NIN NO. 5 22 10-- 11 MMC 36389 (portion not leased to SMC) GYPSUM 6 Misc. 358 MMC 35156 DUKE 19 Misc. 337 MMC 35157 SCHEDULE A (continued) CLAIMS LIST - EAST OF STILLWATER RIVER PATENTED LODE CLAIMS PADA 10,782 PADA No. 2 10,782 Perserverance 70A UNPATENTED LODE ClAIMS ORIGINAL LOCATION DATE BLM SERIAL RECORDING DATA NUMBER BOOK PAGE AXE 32 59 Misc. 118 MMC 36037 ADZ 9 fr. 59 Misc. 260 NMC 35947 AXE 13 59 Misc. 268 MMC 35951 GIANT 6 33 MMC 36382 ADZ 10 fr 59 Misc. 262 MMC 35948 ADZ 12 fr. 59 Misc. 266 MMC 35950 AXE 12 59 Misc. 65 MMC 36017 AMY 26* 76 Misc. 252--253 MMC 10770 ADZ 11 fr. 59 Misc. 264 MMC 35944 AMY 41* 76 Misc. 274--275 MMC 10781 AMY 139* 76 Misc. 714--715 MMC 17308 AMY 140* 76 Misc. 716--717 MMC 17309 AMY 27* 76 Misc. 254--255 MMC 10771 AMY 31* 76 Misc. 260--261 MMC 10774 AMY 42* 76 Misc. 376--277 MMC 10782 AMY 50* 76 Misc. 284--295 MMC 10786 AMY 28* 76 Misc. 256--257 MMC 10772 AMY 32* 76 Misc. 262--263 MMC l0775 AMY 137* 76 Misc. 720--721 MMC 17306 AMY 51* 76 Misc. 286--287 MMC 10787 AMY 29* 76 Misc. 258--259 MMC 10773 AMY 33* 76 Misc. 264--265 MMC 10776 AXE 16 59 Misc. 73 MMC 36021 AMY 52* 76 Misc. 288--289 MMC 10788 AMY 129* 76 Misc. 736--737 MMC 17298 AMY 134* 76 Misc. 726--727 MMC 17303 AXE 17 59 Misc. 75 MMC 36022 AMY 130* 76 Misc. 734--735 MMC 17299 * Amended Location; also see detailed claim list, Mouat Estate. ORIGINAL LOCATION DATE BLM SERIAL RECORDING DATA NUMBER BOOK PAGE AXE 24 59 Misc. 89 MMC 36029 AMY 45* 76 Misc. 278-279 MMC 10783 AMY 55* 76 Misc. 290-291 MMC 10789 AMY 131* 76 Misc. 732-733 MMC 17300 AMY 34* 76 Misc. 266-267 MMC 10777 AMY 46* 76 Misc. 280-281 MMC 10784 AMY 56* 76 Misc. 292-293 MMC 10790 AMY 132* 76 Misc. 730-731 MMC 17301 AMY 35* 76 Misc. 268-269 MMC 10778 AMY 47* 76 Misc. 282-283 MMC 10785 AMY 57* 76 Misc. 294-295 MMC 10791 AMY 133* 76 Misc. 729-729 MMC 17302 AMY 36* 76 Misc. 270-271 MMC 10799 AMY 138* 76 Misc. 718-719 MMC 17307 AXE 6 59 Misc. 16 MMC 36011 AXE 28 59 Misc. 110 MMC 36033 AXE 27 59 Misc. 108 MMC 36032 AMY 37* 76 Misc. 272-273 MMC 10780 AXE 14 59 Misc. 69 MMC 36019 AXE 4 59 Misc. 12 MMC 36009 AXE 26 59 Misc. 106 MMC 36031 AMY 135* 76 Misc. 724-725 MMC 17304 AXE 15 59 Misc. 71 MMC 36020 AMY 60* 76 Misc. 296-297 MMC 10792 AMY 136* 76 Misc. 722-723 MMC 17305 AXE 11 59 Misc. 63 MMC 36016 AMY 61* 76 Misc. 298-299 MMC 10793 AMY 62* 76 Misc. 300-301 MMC 10794 ADZ 13 fr. 59 Misc. 268 MMC 35951 ADZ 14 fr. 59 Misc. 270 MMC 35952 ADZ 3 fr. 59 Misc. 199 MMC 35941 AXE 5 59 Misc. 14 MMC 36010 AXE 3 59 Misc. 10 MMC 36008 AMY 65 76 Misc. 302-303 MMC 10795 AMY 66* 76 Misc. 304-305 MMC 10796 AMY 67* 76 Misc. 306-307 MMC 10797 AXE 7 59 Misc. 18 MMC 36012 AXE 8 59 Misc. 20 MMC 36012 HRH 1 65 Misc. 287-288 MMC 36367 AMY 68* 76 Misc. 308-309 MMC 10798 AMY 69* 76 Misc. 310-311 MMC 10799 AMY 70* 76 Misc. 312-313 MMC 10800 AMY 71* 76 Misc. 314-315 MMC 10801 AMY 72* 76 Misc. 316-317 MMC 10802 AMY 73* 76 Misc. 318-319 MMC 10803 AMY 74* 76 Misc. 320-321 MMC 10804 ORIGINAL LOCATION DATE BLM SERIAL RECORDING DATA NUMBER BOOK PAGE AMY 75* 76 Misc. 322-323 MMC 10805 ADZ 6 fr. 59 Misc. 205 MMC 35944 AMY 76* 76 Misc. 324-325 MMC 10806 AMY 77* 76 Misc. 326-327 MMC 10807 AMY 78* 76 Misc. 328-329 MMC 10808 ADZ 7 fr. 59 Misc. 222 MMC 35945 ADZ 8 tr. 59 Misc. 224 MMC 35946 AXE 38 59 Misc. 226 MMC 36043 AXE 39 59 Misc. 228 MMC 36044 AMY 79* 76 Misc. 330-331 MMC 10809 AMY 80* 76 Misc. 332-333 MMC 10810 AXE 44 59 Misc. 238 MMC 36049 AXE 42 59 Misc. 234 MMC 36047 AXE 40 59 Misc. 230 MMC 36045 AMY 82* 76 Misc. 334-335 MMC 10811 AMY 83* 76 Misc. 336-337 MMC 10812 AMY 85* 76 Misc. 338-339 MMC 10813 AMY 86* 76 Misc. 340-341 MMC 10814 AMY 87* 76 Misc. 342-343 MMC 10815 AXE 45 59 Misc. 240 MMC 36050 AXE 43 59 Misc. 236 MMC 36048 AXE 41 59 Misc. 232 MMC 36046 AMY 88* 76 Misc. 344-345 MMC 10816 AMY 89* 76 Misc. 346-347 MMC 10817 AMY 90* 76 Misc. 348-349 MMC 10818 AMY 91* 76 Misc. 350-351 MMC 10819 AMY 92* 76 Misc. 352-353 MMC 10820 AMY 93* 76 Misc. 354-355 MMC 10821 AMY 94* 76 Misc. 356-357 MMC 10822 AMY 95* 76 Misc. 358-359 MMC 10823 AMY 96* 76 Misc. 360-361 MMC 10824 AMY 97* 76 Misc. 362-363 MMC 10825 AMY 98* 76 Misc. 364-365 MMC 10826 AMY 99* 76 Misc. 366-367 MMC 10827 AMY 100* 76 Misc. 368-369 MMC 10828 AMY 101' 76 Misc. 370-371 MMC 10829 AMY 102' 76 Misc. 372-373 MMC 10830 AMY 103' 76 Misc. 374-375 MMC 10831 AMY 104' 76 Misc. 376-377 MMC 10832 AMY 105* 76 Misc. 378-379 MMC 10833 AXE 9 59 Misc. 22 MMC 36014 PET 24 576 MMC 36392 NEAR & FAR 25 127 MMC 36390 UP & DOWN 25 129 MMC 36405 RE-EAST 24 508 MMC 36373 * Amended Location; also see detailed claim list, Mouat Estate. EXHIBIT 10.06 LEASE AGREEMENT THIS LEASE AGREEMENT (hereinafter "Lease") is made and entered into this 5th day of August, 1988, by and between WILLIAM C. de LANNOY, individually and as Trustee under the 1985 MARGARET E. de LANNOY LIVING TRUST, WILLIAM G. MOUAT, individually and as Trustee, JOHN C. MOUAT, DONALD D. MOUAT, ELLEN A. LANGSTON, JAY DUBA, DOLORES NELSON, ANNE FUJIWARA, WILLARD FERCH, IVER J. HJELVIK and DONNA F. HJELVIK, ROBERT MOUAT, DAVID MOUAT, ELLEN L. SCHOEMER and MOtJAT NICKEL MINES, INC. (hereinafter referred to collectively as the "Lessors") and CHROME CORPORATION OF AMERICA, INC., a Delaware corporation, having offices at 12640 West Cedar Drive, Lakewood, Colorado 80228 (hereinafter referred to as the "Lessee"). I. GRANT OF LEASE For and in consideration of the sum of ten dollars ($10.00) cash in hand paid by the Lessee to the Lessors, the receipt of which is hereby acknowledged, in consideration of the royalties and payments herein covenanted to be paid by Lessee, and in consideration of the mutual covenants hereinafter set forth, Lessors do hereby demise, lease and let unto the Lessee those certain patented and unpatented mining claims, mill sites and tunnel sites (hereinafter referred to collectively as the "Subject Premises") all listed in Schedule "A", attached and incorporated herein by this reference, situated in Stillwater and Sweet Grass Counties, Montana, together with such of Lessors' water and water rights as identified in Schedule "B", attached and incorporated herein by this reference (Lessors do not warrant any particular volume or flow-rate), and as Lessee shall require for its operations. In connection with and as part of the leasehold estate hereby granted, Lessee shall have and may exercise the following rights for the benefit of all lands owned, leased or controlled by Lessee: (a) the right to explore, develop, mine, extract and remove or sell chromite, or other chromium bearing ores, and all other minerals, metals, precious stones, or rocks found in, on or under the Subject Premises; (b) the right, during the continuance of this Lease, to take and use any material suitable for backfilling, or other mining purposes, and any limestone found in the premises; (c) the right to use all existing facilities, except the hoist and crusher that are currently on the Subject Premises, and the right to construct all mills, plants, tracks, tramways, roads, buildings, and other improvements; (d) the right to use and develop any and all excavations, openings, tunnels, ditches, flumes, drains and other improvements on the Subject Premises; (e) the right to use all water and water rights identified in Schedule B and to develop additional water and water rights appurtenant to the Subject Premises; (f) the right to do all other acts and things which are, or may become necessary or suitable in the discretion of Lessee, including without limitation the right to use or disturb so much of the surface and surface resources of the Subject Premises as Lessee may deem desirable, for the mining and removing of chromite or other ores, metals, -2- minerals, rocks and precious stones, the milling, beneficiating, concentrating, smelting, refining, or leaching of such ores, metals, minerals and other materials, or the concentrates thereof; (g) the right to cut and use timber and other raw materials found upon, or in said premises for any purpose in connection with the operations to be carried on under this Lease; and (h) such rights of surface and underground access for men, equipment, supplies, utilities and water as may be necessary or convenient for the conduct of Lessee's operations on any portion of the Subject Premises or on other lands, including necessary access under, upon, and across any other contiguous land owned or controlled by Lessors or which Lessors may have dominion or control. II. PRIMARY TERM AND LEASE PAYMENTS A. Term. Unless sooner terminated by the provisions hereof, this Lease shall remain in full force and effect for an initial term of five (5) years from the date hereof (the "Primary Term") and so long thereafter as ore-bearing materials are produced from the Subject Premises in commercial quantities, as that term is defined in Article VI of this Lease. B. Annual Rental Payment. Lessee agrees to pay Lessors fifty thousand dollars ($50,000.00) per year during the first three years of the Primary Term and seventy-five thousand dollars ($75,000.00) per year during the final two years of the Primary Term, payable on or before the anniversary date of this Lease, except as provided in Article II.D. These Annual Rental -3- Payments are expressly intended by the parties to negate and remove any obligation on the part of the Lessee, express or implied, to explore, develop and mine the Subject Premises with reasonable diligence during said five-year Primary Term or during the two-year extension provided in Article II.C. C. Lessee, so long as it shall not be in default under the terms and provisions of this Lease, and so long as it is not already producing from the Subject Premises in commercial quantities as defined in Article VI, shall have the exclusive right, privilege and option to extend the Primary Term for an additional term of two (2) years upon the following terms and conditions: 1. Written notice of Lessee's intent to extend the Primary Term shall be given by Lessee to Lessors at least sixty (60) days prior to the expiration of the initial five-year Primary Term. 2. Lessee at the time of giving its notice of extension, shall make one lease payment in the amount of two hundred thousand dollars ($200,000.00) to Lessors as consideration for the two-year extension of the Primary Term. 3. During the term of the lease extension period (the 6th and 7th years of this Lease), Lessee agrees to pay Lessors an advance royalty of two hundred and fifty thousand dollars ($250,000.00) per year, on the anniversary dates of the Lease during such years. These Advance Royalties are expressly intended by the parties to negate and remove any obligation on the part of the Lessee, express or implied, to explore, develop -4- or mine the Subject Premises with reasonable diligence. Fifty percent (50%) of the Advance Royalties paid for any year shall be deemed an advance upon, and credited against, any royalties payable upon later production from the Subject Premises. Such fifty percent of the Advance Royalties shall be recouped by Lessee through direct deduction of such payment amounts from the royalties provided by Article IV as they accrue. D. On the date of execution of this Lease, Lessee will pay to Lessors, and Lessors hereby acknowledge receipt of, the sum of fifty thousand dollars ($50,000.00) which payment shall constitute payment in full for the first Annual Rental Payment due pursuant to Article II.B. E. Beginning with the second year of the Primary Term, the Annual Rental Paymnents shall be adjusted upward or downward annually in direct proportion to the percentage increase or decrease in the Consumer Price Index U.S. for all items (Urban), for each succeeding calendar year over the base year (1988) index, using the Consumer Price Index of January 1988 as the base year index. F. All payments of Annual Rental Payments, Advance Royalties, Production Royalties or other money payable under this Lease shall be paid to the Lessors by mailing or delivering a cashiers check to William G. Mouat, Trustee, herein designated by Lessors as their representative and depository, the Lessors hereby granting to said depository full power and authority on behalf of the Lessors, their successors and assigns to collect, and distribute all sums of money due and payable hereunder. Adequate payment by Lessee to such -5- designated representative and depository shall be deemed full and adequate payment to all Lessors. Notwithstanding the death of any Lessor or the transfer, division, or hypothecation of his royalty interest, payment, or tender of annual rental payments and all royalties to the depository as herein designated shall be binding upon all Lessors, their heirs, personal representatives, transferees and assignees. Change of designated representative and depository by Lessors shall not be effective nor binding upon Lessee until written notice is received by Lessee of such changed designated representative and depository. G. Lessors may elect, by 60 days prior notice to Lessee, to take their Production Royalty in kind, and the cost, if any, of doing so shall be borne entirely by Lessors. H. If Lessors own less than 100% of the mineral estate, whether in fee or under mining claim, lease, or contract in the Subject Premises, or any portion thereof, subject to the paramount title of the United States, then the Annual Rental Payments, Production Royalties and Advance Royalties which are payable under this Lease shall be reduced in the proportion which Lessors' interest bears to 100% of the mineral estate of the Subject Premises. III. TITLE A. Representations and Warranties. Lessors make the following representations and warranties effective as of the date of this Lease: -6- 1. With respect to the patented claims, Lessors are in actual and exclusive possession and own such claims free and clear of all defects, liens and encumbrances arising by, through or under Lessors. 2. With respect to unpatented mining claims located by Lessors, or any one of them, that are included in the Subject Premises, except as provided in part 1 of Schedule "A" and subject to the paramount title of the United States, to the best of their knowledge and belief: a. The unpatented mining claims were properly laid out and monumented; b. All required location validation work was properly performed; c. Location notices and certificates were properly recorded and filed with appropriate governmental agencies; d. All assessment work required to hold the unpatented mining claims has been performed for the assessment years ending September 1, 1986 and 1987; and e. All affidavits of assessment work and other filings required to maintain the claims in good standing have been properly and timely recorded or filed with appropriate governmental agencies for the assessment years ending September 1, 1986 and 1987. 3. With respect to those unpatented mining claims that were not located by Lessors, but are included within the Subject Premises, and with respect to completion of assessment work and filing of affidavits of assessment work for all -7- unpatented mining claims for all assessment years not specified above, Lessors make the foregoing representations to the best of their knowledge and belief. 4. With respect to all unpatented mining claims and millsite claims included in the Subject Premises, Lessors warrant that the claims are free and clear of liens and encumbrances arising by, through or under Lessors, or any one of them; and Lessors have no knowledge of adverse claims. 5. With respect to the Subject Premises1 Lessors have no knowledge of threatened actions, suits, claims or proceedings. 6. Lessors have delivered or will deliver to Lessee all information reasonably requested by Lessee concerning title to the Subject Premises in Lessors' possession. The representations and warranties set forth above shall survive the execution and delivery of any documents of transfer provided under this Lease. Nothing in this Article III, however, shall be deemed to be a representation or a warranty that any of the unpatented mining claims contains a discovery of minerals. B. Lessors' Covenants. Lessors covenant that during the term of this Lease, Lessors shall maintain their interests in the Subject Premises free and clear of any liens and encumbrances, not in existence on the date hereof and not resulting from Lessee's operations and activities hereunder. C. Disclosures. Lessors and Lessees represent and warrant that they are unaware of any material facts or -8- circumstances which have not been disclosed in this Lease, which should be disclosed to the other party in order to prevent the representations in this Article III from being materially misleading. IV. PRODUCTION ROYALTIES A. Chromite. Lessee shall pay to Lessors a Production Royalty of twelve cents (l2~) per unit of twenty pounds of chromium oxide (Cr2O3) contained in ore or concentrate produced, removed and sold from the Subject Premises. The said price of 12 cents per unit shall be adjusted annually in direct proportion to the percentage increase or decrease, which percentage shall be calculated by the following formula: CP-P A= ---- X 100 P A = annual percentage adjustment CP = weighted average sales price for chromite under Lessee's contracts FOB the refinery P = base price of 50.25 cents per pound ferrochrome. An example calculation using this formula is as follows: The weighted average sales price (CP) is the average price received for each unit (ton or pound) of sales, weighted to reflect such unit of sales. Accordingly, assume that in year X, sales for the year are 130,000 tons and are to four different customers, each with a different tonnage and contract price: 70,000 tons @ 70 cents per lb. 40,000 tons @ 65 cents per lb. 10,000 tons @ 85 cents per lb. 10,000 tons @ 60 cents per lb. -9- Then the weighted average sales price (CP) is calculated by multiplying each tonnage by its price to obtain revenue, then adding the total revenues and dividing by the total tons: 70,000 x 0.70 $49,000 40,000 x 0.65 $26,000 10,000 x 0.85 $ 8,500 10,000 x 0.60 $ 6,000 ------- Total Revenue $89,500 Total tons is 130,000 Weighted average sales price (CP) = $89,500/130,000 = 68.85 cents per lb. CP, therefore, would equal 68.85. Assume further that P = 50 cents per pound. The annual percentage adjustment (A) would then be calculated to be: A = 68.85- 50 --------- X 100 50 = 18.85 ----- X 100 50 = 37.7% B. All Other Minerals. Lessee shall also pay to Lessors a Production Royalty of five percent (5%) of the net smelter returns (if sold to a mill or smelter) or net income (if not sold to a mill or smelter), whichever is applicable, from the sale of all ores or concentrates, other than chromite ores or concentrates, from the Subject Premises. Lessors may take in kind pursuant to Article II.G. By net smelter returns" is meant the amount received from the mill or smelter, upon the sale of such ores or concentrates after deducting from -10- the gross value thereof the cost of milling, smelting and transportation to the mill or smelter. By "net income1' is meant the amount received by Lessee from a purchaser of ores or concentrates other than a mill or smelter, less costs of milling and transportation (if any) charges. C. Ores and Concentrates Not Sold. If ores, concentrates or other products are taken in kind (produced and removed, but not sold) by Lessee, then Lessee shall nevertheless pay the Production Royalty for chromite ores and concentrates as specified above, and for other ores and concentrates, the amounts received by Lessee (for purposes of calculating net smelter returns or net income) shall be deemed to be no less than the amounts Lessee would have received if a sale had been made. Payments shall be made in accordance with the provision in Article IV.D. Ores, minerals or other products produced by Lessee from the Subject Premises that are used by Lessee or its agents in the processing or refining of ferrochrome shall not be deemed to be products taken in kind by Lessee, and no royalty need be paid upon such products. D. Payment. Royalty payments may be paid to the Lessors in accordance with Articles II.F and 11.11 above and shall be payable within a period of twenty-one (21) days after the shipment and/or removal of chromite ore or concentrates produced from the Subject Premises and/or receipt of proceeds from sale of other minerals during each mining period of one month. Accompanying each payment, Lessee shall furnish to -11- Lessor a statement of the production used as a basis for computing royalties. V. MAINTENANCE OF MINING CLAIMS During the continuance of this Lease, Lessee agrees to comply with the requirements of the state and federal statutes with respect to Assessment Work upon the unpatented claims within the Subject Premises described in Schedule "A" each year beginning with the Assessment Year 1987-1988. Lessee shall not, however, be liable or responsible for any claim or claims which may be lost as a result of insufficient performance of assessment work, so long as Lessee has made a good faith attempt to perform the required assessment work. Lessee will provide to Lessor a copy of the operating plan submitted to the National Forest Service with respect to the Subject Premises. This Lease shall cover and extend to any further or additional right, title, interest or estate acquired by Lessors, or any of them, in or to the Subject Premises or any portion thereof. Lessee agrees to carry on its operations hereunder, diligently and in a good and minerlike manner, and in accordance with accepted mining practices in the State of Montana, and Lessee agrees that all mining operations shall be carried on in a systematic, orderly and economical manner so as to realize insofar as is practicable, the full ore resources of the Subject Premises. -12- VI. PRODUCTION COMMERCIAL QUANTITIES For the purposes of this Lease, the term "commercial quantities" shall mean production of not less than 100,000 tons (being short tons equal to 2,000 pounds each) of ore in any production year of 365 days from the Subject Premises; provided that, if Lessee in any production year of 365 days produces in excess of 100,000 tons of ore, 50% of the production in excess of 100,000 shall be credited toward production of Lessee in any subsequent 18-month period (or periods so long as such periods are not consecutive) occurring during the term of this Lease in which Lessee's annual production is less than 100,000 tons; provided, however, Lessee conducts mine development activities including without limitation drifting, stoping, raising, raise-boring or shaft-sinking during such 18-month periods. VII. TAXES. ENCUMBRANCES AND INJURIES A. Taxes. Lessee agrees to pay and discharge any and all taxes levied against the Subject Premises during the life of this Lease, except that in those cases in which said taxes cover a period during only a part of which this Lease is in force, Lessee shall pay and discharge only its pro rata share thereof determined by a comparison of such part with the total period covered. B. Lessee's Encumbrances. Lessee will not permit any liens or encumbrances on the unpatented and patented mining claims of the Subject Premises. Notwithstanding anything to the contrary in this section, the parties agree that Lessee has the right to encumber, as it deems necessary or convenient, its -13- leasehold interest including without limitation its share of production and proceeds, so as not to interfere with Lessors' royalties. C. Injuries from Lessee's Operations. Lessee shall save Lessors harmless from any and all damages, claims, costs and expenses arising from or growing out of any or all injuries resulting from the operations of Lessee, or in connection therewith, on the Subject Premises and occurring during the life of this Lease except as provided in Article XII herein. VIII. TERMINATION A. The Lease may be terminated by Lessee at any time after the expiration of three (3) years from the date of execution of this Lease by notice in writing thereof to Lessors, to take effect from such date as may be stipulated by Lessee in such notice, without, subject to the following paragraph, the Lessee incurring any further liability whatsoever as regards Annual Rental Payments, Advance Royalties, or other payments. B. Subject to the foregoing paragraph, upon such termination, Lessee shall have no further interest or right in the Subject Premises, save the right to remove its property as provided in Article XI, including all stockpiles of ore and concentrates on which royalty shall have been paid, and shall have no obligation or duties with respect to the Subject Premises, except for reclamation of lands disturbed by Lessee and required by governmental authority to be reclaimed, and except as herein specifically provided and as to obligations -14- which have accrued hereunder prior to such termination, but all fences or enclosures protecting open pits, shafts, tunnels, etc., shall be left intact and Lessors shall be entitled to retain the entire amount of any moneys paid under this Lease up to the effective date of termination. C. This Lease shall not terminate for nonpayment by Lessee of annual rental payments or royalties, unless such nonpayment continues for 60 days after payment was due, subject further to Article XVII. IX. FORCE MAJEURE Lessee shall be excused from the performance of its obligations of every kind, except necessary Annual Assessment work and the Annual Rental Payments set forth in Article II during such period or periods as performance may be made impossible by force majeure. By this it is intended to mean that the Lessee shall be excused from the performance of any provision of this Agreement for such period of time as performance of such provision is prevented by fire, flood, earthquake, explosion, lack of transportation facilities, Act of God, shortage of power or water, strike or similar labor difficulties, insurrection or mob violence, requirement or regulation of government, or other causes beyond the reasonable control of Lessee. For purposes of this Lease, force majeure shall include a drop in the price of ferrochrome to a point below which it is uneconomic to produce chromite. -15- X. RECORDS Within a reasonable time, not to exceed six (6) months, following the termination of this Lease for any cause, Lessee shall furnish to Lessors a copy of its factual maps, drilling records, drill core and assay and smelter reports relating to the Subject Premises. Lessors agree, upon reasonable request by Lessee, to furnish to Lessee such maps, records, reports and documents, as Lessors may possess relating to the Subject Premises. Such maps, records, reports and documents shall be returned, if requested, to Lessors within a reasonable time not to exceed 90 days. XI. REMOVAL Upon the termination of this Lease for any reason, Lessee shall have the right to remove from the Subject Premises, at any time within the 12-month period following such termination, all stockpiles of ore and concentrates upon which royalties shall have been paid, and all of its machinery, equipment, tools, structures or other property and improvements, fixtures and structures constructed, erected or placed on the Subject Premises, or any portion thereof, by Lessee; provided, however, Lessee shall leave in place all timbering, framing or enclosures protecting open pits, shafts, tunnels and underground trackage; and provided that removal of improvements, fixtures and structures shall not damage the structures remaining on the Subject Premises. -16- XII. POSSESSORY RIGHTS While this Lease is in effect, Lessee shall be entitled to exclusive possession of the Subject Premises, except that Lessors and their representatives, successors and assigns, at any reasonable time, may go upon the Subject Premises to inspect the operations of Lessee thereon. Lessors are further entitled to access to claims not included under this Lease ("Lessors' Claims") across the Subject Premises for men, equipment, supplies, utilities, water and all other items as may be reasonably necessary for the exploration, development and operation of Lessors' Claims; provided, however, that in so doing Lessors shall not unreasonably hinder Lessees' work; and provided further that the Lessors hereby release Lessee from liability for any personal-injury or death of employee or representative of Lessors while on the Subject Premises and the Lessors agree that they will indemnify and save harmless Lessee from liability for any personal injury to or death of any person or persons, or damage or destruction of property of Lessee or others done or caused by any employee or representative of Lessors while so visiting or traversing the Subject Premises. Lessors further agree to hold Lessee harmless from any liability and to indemnify Lessee for any claims, costs, expenses and fees arising from Lessors' activities on Lessors' Claims. XIII. RELOCATION AND AMENDMENT Lessee shall have the right at any time or times during the term of this Lease, upon written notice to Lessors, to -17- amend the location of any one or more of the unpatented mining claims whenever such amendment is deemed necessary or desirable to correct errors or omissions in the location of the claim. Lessee shall have the further right, upon written notice to Lessors, to relocate any one or more of said claims whenever such action is deemed to be necessary or desirable. All such relocations or amendments shall be made by Lessee as agent for Lessors, placing all such amendments and relocations in the name of Lessors. Lessee shall have the further right at its discretion to repair or replace any claim location monument or marking which has been damaged or destroyed, although Lessee shall not be obligated to perform such repairs or replacements. XIV. PATENTING Upon request of Lessee at any time or times during the term of this Lease, Lessors agree to undertake and obtain patent to any and all of the mining claims which are subject to this Lease, as designated by Lessee, and Lessee shall prepare all documents and compile all data and comply in all respects with the applicable law, all at the expense of Lessee. Any patent issued shall be in Lessors' names. Lessors shall execute any and all documents required for this purpose and shall cooperate fully with Lessee in the patent application and proceedings subsequent thereto. If Lessors begin patent proceedings and Lessee thereafter requests Lessors to discontinue such proceedings, or if this Lease is terminated while patent proceedings are pending, Lessee shall have no -18- further obligations with respect thereto, except to pay any unpaid expenses accrued in such proceedings prior to its request to discontinue, or prior to termination, whichever occurs first. XV. COMMINGLING Lessee shall have the right to commingle ore and minerals from the Subject Premises, or any portion thereof. XVI. DRAFTING OF DOCUMENT - MUTUAL This Lease has been drafted through the joint efforts of the Lessors and Lessee and their respective attorneys, and neither of the parties hereto shall be permitted to claim that the drafting of this Lease was performed or accomplished to a greater extent by the other party. The parties acknowledge that they have retained or employed their own respective attorneys or counsel in the preparation and/or examination of this document. XVII. DEFAULT In the event that Lessee shall default in the performance of any of the terms and provisions of this Lease, then, after written notice of such default from Lessors to Lessee, if Lessee does not either: A. Cure such default within sixty (60) days after such notice, or B. Commence promptly within the said period of sixty (60) days to rectify such default and continue thereafter to use due diligence to rectify such default until it is fully remedied or cured, Lessors may terminate this Agreement at any -19- time thereafter during the continuance of such default by giving written notice to Lessee of their election to terminate. XVIII. NOTICE Any notice required or permitted to be given or served by one of the parties hereto shall be sufficiently given or served by a communication in writing, sent by registered mail, to the other party at the address given below: FOR THE LESSORS: William G. Mouat 317 First Federal Savings Building 2929 Third Avenue North Billings, Montana 59101 FOR THE LESSEE: Chrome Corporation of America, Inc. 12640 West Cedar Drive Lakewood, Colorado 80228 Each party may change the address by giving written notice of such change to the other party. XIX. ASSIGNMENT Lessee's assignment of the benefit of this Lease may only be made with the consent of the Lessors, which consent will not be unreasonably withheld. XX. CONFIDENTIALITY Lessors agree that all information developed or acquired by Lessee as a result of work under this Lease and conveyed to Lessors, or any one of them, including but not limited to information relating to ore reserves, mineral discoveries, mining or processing methods, plans, production schedules and -21- other information shall be kept strictly confidential by Lessors until released or made public by Lessee. XXI. TIME OF ESSENCE; BINDING EFFECT Time is of the essence in this Lease. Each obligation set forth herein shall extend to and be binding upon and every benefit inure to the heirs, personal representatives, successors or assigns of the parties hereto. XXII. FURTHER ASSURANCES The parties agree to execute and deliver such other documents as may be necessary to effectuate the intents and purposes of this Lease. XXIII. ENTIRE AGREEMENT This Lease may not be amended except in writing by duly authorized representatives of the parties. This Lease constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements with respect to all matters covered hereby. XXIV. GOVERNING LAW This Lease shall be governed by Montana Law and the parties hereby submit to the jurisdiction of the Montana courts, including the federal courts of the district of Montana. XXV. MEMORANDUM OF AGREEMENT This Lease shall not be recorded without the consent of both parties. Upon the request of either party, both parties shall execute a Memorandum of this Lease in recordable form, which memorandum may be recorded. -21- XXVI. COUNTERPARTS This Lease may be executed in counterparts, no one of which needs to be executed by all Lessors, and shall be binding upon each party upon execution by that party, and shall be effective as if all parties had signed the same document. IN WITNESS WHEREOF, the parties hereto have caused this Lease to be duly executed as of the day and year first above written. LESSORS: WILLIAM C. de LANNOY, individually and as Trustee under the 1985 MARGARET E. de LANNOY LIVING TRUST WILLIAM G. MOUAT, individually and as Trustee JOHN C. MOUAT DONALD D. MOUAT ELLEN A. LANGSTON - 22 - JAY DUBA DOLORES NELSON ANNE FUJIWARA WILLARD FERCH IVER J. HJELVIK DONNA F. HJELVIK ROBERT MOUAT DAVID MOUAT ELLEN L. SCHOEMER MOUAT NICKEL MINES, INC. ATTEST: WILLIAM S. MOUAT By: WILLIAM C. deLANNOY, SECRETARY VICE PRESIDENT -23- SCHEDULE "A" TO INCLUDE ALL PATENTED AND UNPATENTED MINING CLAIMS (WITHIN ALL LEASE BLOCKS), AS WELL AS ALL MILLSITES. SCHEDULE "A" Mining Claims situated in Stillwater county, Montana PATENTED LODE CLAIMS (1) BALD EAGLE 69 D UNPATENTED LODE CLAIMS (19) ORIGINAL LOCATION RECORDING DATA ------------------- BLM SERIAL BOOK PAGE DATE NUMBER --------- ---- ------- ----------- Mountain View Chrome Company No. 1* 23 Misc. 43 9/22/39 MMC 36417 Mountain View Chrome Company No. 2* 23 Misc. 434 8/31/40 MMC 36418 Soup 24 Misc. 273 10/03/41 MMC 36427 Pete* 7 Misc. 122 7/11/18 MMC 36422 Old Lady 7 Misc. 114 7/11/18 MMC 36420 Star 7 Misc. 229 10/07/18 MMC 36428 Princetons 24 Misc. 122 5/08/41 MMC 36423 Sampson 24 Misc. 126 5/08/41 MMC 36424 Scully* 7 Misc. 122 7/11/18 MMC 36425 Denver* 7 Misc. 233 10/07/18 MMC 36409 Hess 25 Misc. 289 11/17/43 MMC 36411 Skunk 24 Misc. 128 5/08/41 MMC 36426 Oldco 24 Misc. 124 5/08/41 MMC 36419 Sun 24 Misc. 249 8/23/41 MMC 36429 Toe 24 Misc. 614 8/28/42 MMC 36404 Adam 24 Misc. 207 7/19/41 MMC 36406 Peggy 24 Misc. 571 7/27/42 MMC 36421 Joan 24 Misc. 574 7/27/42 MMC 36413 Link 24 Misc. 209 7/19/41 MMC 36415 UNPATENTED PLACER CLAIMS (2) Lake* 23 Misc. 400 7/16/40 MMC 36414 Verdi 24 Misc. 573 7/27/42 MMC 36430 * Amended Location; also see detailed claim list, Mouat Estate. 2 SCHEDULE A (continued) CLAIM LIST - WEST OF STILLWATER RIVER PATENTED LODE CLAIMS Cataract 69C Avalanche 69B Brooklyn 69A MILL SITE + TUNNEL SITE CLAIMS Mountain View Chrome Co. Mill Site Book Tunnel & Dump Site No. 5 Tunnel & Dump Site UNPATENTED LODE CLAIMS ORIGINAL LOCATION RECORDING DATA ------------------ BLM SERIAL BOOK PAGE DATE NUMBER --------- ---- ------- ----------- AMY 25* 76 Misc. 188 MMC 10212 AMY 13* 76 Misc. 170 MMC 10203 AMY 14* 76 Misc. 172 MMC 10204 AMY 15* 76 Misc. 174 MMC 10205 AMY 16* 76 Misc. 176 MMC 10206 AMY 20* 76 Misc. 184 MMC 10210 AMY 18* 76 Misc. 180 MMC 10208 AMY 21* 76 Misc. 186 MMC 10211 AMY 19* 76 Misc. 182 MMC 10209 GAY 15* 65 Misc. 132-133 MMC 36295 GAY 16* 65 Misc. 134-135 MMC 36296 ANN 3 fr. ANN 42 fr. 59 Misc. 193-194 MMC 36002 ANN 4 58 Misc. 452-453 MMC 35961 ANN 4A 59 Misc. 53-54 MMC 35962 RED BIRD No.3 8 Misc. 169 MMC 36396 ANN 5 58 Misc. 454-455 MMC 35963 ANN SA 59 Misc. 55-56 MMC 35964 ANN 6 59 Misc. 26-27 MMC 35965 ANN 6A 59 Misc. 57-58 MMC 35966 ANN 7 59 Misc. 28-29 MMC 35967 ANN 9 59 Misc. 35-36 MMC 35969 ANN 10 59 37-38 MMC 35970 EMA 11 33LL 475-476 MMC 36066 EMA 13 33LL 479-480 MMC 36068 EMA 18 33LL 489-490 MMC 37073 EMA 12 33LL 477-478 MMC 36067 *Amended Location; also see detailed claim list, Mouat Estate. 2 SCHEDULE A (continued) ORIGINAL LOCATION RECORDING DATA ----------------------- BLM SERIAL BOOK PAGE DATE NUMBER --------- ------- ---- ---------- EMA 15 33LL 483-484 MMC 36070 FLO 18 35LL 75-76 MMC 36261 SUSU 26* 78 Misc. 889 MMC 53590 SUSU 27* 78 Misc. 891 MMC 53591 SUSU 28* 78 Misc. 893 MMC 53592 SUSU 29* 78 Misc. 895 MMC 53593 SUSU 22* 78 Misc. 881 MMC 53586 SUSU 23* 78 Misc. 883 MMC 53587 SUSU 24* 78 Misc. 885 MMC 53588 SUSU 25* 78 Misc. 887 MMC 53589 SUSU 18* 78 Misc. 873 MMC 53582 SUSU 19* 78 Misc. 875 MMC 53583 SUSU 20* 78 Misc. 877 MMC 53584 SUSU 21* 78 Misc. 879 MMC 53585 ANN 11 59 Misc. 39-40 MMC 35971 ANN 12 59 Misc. 41-42 MMC 35972 ANN 13 59 Misc. 43-44 MMC 35973 ANN 39 59 Misc. 187-188 MMC 35999 SUSU 16* 78 Misc. 869 MMC 53580 SUSU 17* 78 Misc. 871 MMC 53581 ANN 14 59 Misc. 45 MMC 35974 ANN 15 59 Misc. 47 MMC 35975 EMA 16 33LL 485-486 MMC 36071 ENA 17 33LL 487-488 MMC 36072 EMA 10 33LL 473-47 4 MMC 36065 EMA 20 33LL 493-494 MMC 36075 FLO 20 35LL 79-80 MMC 36263 EMA 21 33LL 495-496 MMC 36076 ANN 43 59 195-196 MMC 36003 3 SCHEDULE A (continued) MINING CLAIMS SITUATED IN STILLWATER AND SWEETGRASS COUNTIES. MONTANA ORIGINAL LOCATION RECORDING DATA ----------------------- BLM SERIAL BOOK PAGE DATE NUMBER --------- ------- ---- ---------- PATENTED LODE CLAIMS NEW WABELISKI 68B UNPATENTED LODE CLAIMS ANN 16 59 Misc. 49 MMC 35976 ANN 17 59 Misc. 59 MMC 35977 ANN 18 59 Misc. 61 MMC 35978 ANN 40 59 Misc. 189 MMC 36000 ANN 41* 59 Misc. 191 MMC 36001 SUSU 1* 43LL 205 MMC 53568 SUSU 4* 43LL 197 MMC 53571 MINING CLAIMS SITUATED IN SWEETGRASS COUNTY. MONTANA PATENTED LODE CLAIMS SUMMIT 68A UNPATENTED LODE CLAIMS ANN 19 33QL 367 MMC 35979 ANN 20 33QL 369 MMC 35980 SUSU 5* 43LL 199 MMC 53572 SUSU 2* 43LL 207 MMC 53569 ANN 23 33LL 375-376 MMC 35983 ANN 22 33LL 373-374 MMC 35982 ANN 21 33LL 371-372 MMC 35981 SUSU 6* 43LL 201 MMC 53573 SUSU 3* 43LL 209 MMC 53570 ANN 24 33LL 377-378 MMC 35984 ANN 25 33LL 379-380 MMC 35985 ANN 26 33LL 381-382 MMC 35986 EMA 3 33LL 459-460 MMC 36058 EMA 1 33LL 455-456 MMC 36056 EMA 5 33LL 463-464 MMC 36060 EMA 2 33LL 457-458 MMC 36057 *Amended Location; also see detailed claim list, Mouat Estate. 4 SCHEDULE A (continued) ORIGINAL LOCATION RECORDING DATA ----------------------- BLM SERIAL BOOK PAGE DATE NUMBER --------- ------- ---- ---------- EMA 4 33LL 461-462 MMC 36059 EMA 6 33LL 465-466 MMC 36061 EMA 7 33LL 467-468 MMC 36062 EMA 9 33LL 471-472 MMC 36064 EMA 8 33LL 469-470 MMC 36063 EMA 19 33LL 491-492 MMC 36074 EMA 14 33LL 481-4 82 MMC 36069 FLO 19 35LL 77-88 MMC 36262 EMA 22 33LL 497-4 98 MMC 36077 FLO 31 35LL 101-102 MMC 36274 FLO 21 35LL 81-82 MMC 36264 FLO 17 35LL 73-74 MMC 36260 EMA 25 33LL 503-504 MMC 36080 SUSU 7* 43LL 219 MMC 53574 SUSU 8 43LL 203 MMC 53575 SUSU 10 43LL 211 MMC 53576 SUSU 11 43LL 213 MMC 53577 SUSU 12 43LL 215 MMC 53578 SUSU 13 43LL 217 MMC 53579 5 SCHEDULE A (continued) CLAIM LIST - INDUSTRIAL/INFRASTRUCTURE ACREAGE PATENTED LODE CLAIMS STILLWATER 63E SOMETHING 72B PATENTED PLACER CLAIMS PATENTED MILL SITES UNPATENTED LODE CLAIMS ORIGINAL LOCATION RECORDING DATA ----------------------- BLM SERIAL BOOK PAGE DATE NUMBER --------- ------- ---- ---------- AMY fr. 82 Misc. 877 MMC 78928 AMY 1* 76 Misc. 146 MMC 10191 AMY 2* 76 Misc. 148 MMC 10192 AMY 3* 76 Misc. 150 MMC 10193 GAY 1* 65 Misc. 104-105 MMC 36281 GAY 2* 65 Misc. 106-107 MMC 36282 GAY 6* 65 Misc. 114-115 MMC 36286 GAY 7* 65 Misc. 116-117 MMC 36287 AMY 17* 76 Misc. 178 MMC 10207 GAY 11* 65 Misc. 124-125 MMC 36291 GAY 12* 65 Misc. 126-127 MMC 36292 PINE 8 67 MMC 36393 SMELTER 2 385 MMC 36401 AMY 125* 76 Misc. 744 MMC 17294 AMY 126* 76 Misc. 742 MMC 17295 AMY 112* 76 Misc. 441 MMC 11285 AMY 113* 76 Misc. 443 MMC 11286 AMY 114* 76 Misc. 445 MMC 11287 AMY 115* 76 Misc. 447 MMC 11288 AXE 37 59 Misc. 131 MMC 36042 AXE 34 59 Misc. 122 MMC 36039 AXE 33 59 Misc. 120 MMC 36038 * Amended Location; also see detailed claim list, Mouat Estate. 6 SCHEDULE A (continued) ORIGINAL LOCATION RECORDING DATA ----------------------- BLM SERIAL BOOK PAGE DATE NUMBER --------- ------- ---- ---------- AMY 116* 76 Misc. 449 MMC 11289 AMY 117* 76 Misc. 451 MMC 11290 ANN 44 59 Misc. 197-198 MMC 36004 SUE 16 325 MMC 36403 RAM 25 424 MMC 36394 AMY 118* 76 Misc. 453 MMC 11291 AMY 119* 76 Misc. 455 MMC 11292 AMY 120* 76 Misc. 457 MMC 11293 JOHN 24 418 MMC 36383 MARIE 16 324 AMY 121* 76 Misc. 459 MMC 11294 AMY 127* 76 Misc. 127 MMC 17296 MALO 24 205 MMC 36384 ANN 59 Misc. 51-52 MMC 35957 ANN 27 59 Misc. 163-164 MMC 35987 ANN 38 59 Misc. 185-186 MMC 35998 AMY 128* 76 Misc. 738 MMC 17297 AMY 123* 76 Misc. 461 MMC 11295 AMY 124* 76 Misc. 463 MMC 11296 AXE 36 59 Misc. 129 MMC 26041 AXE 35 59 Misc. 127 MMC 36040 AMY 12 76* Misc. 168-169 MMC 10202 AMY 140* 76 Misc. 716-717 MMC 17309 GAY fr. 82 Misc. 879-880 MMC 78929 UNPATENTED PLACER CLAIMS MIN NO. 2 (portion not leased to SMC) 22 6 MMC 36387 MIN NO. 4 22 9 MMC 36416 MIN NO. 5 (portion not leased to SMC) 22 10-11 MMC 36389 GYPSUM 6 Misc. 358 MMC 35156 DUKE 19 Misc. 337 MMC 35157 7 SCHEDULE A (continued) CLAIM LIST - EAST OF STILLWATER RIVER PATENTED LODE CLAIMS PADA 10,782 PADA No. 2 10,782 Perserverance 70A ORIGINAL LOCATION RECORDING DATA ----------------------- BLM SERIAL BOOK PAGE DATE NUMBER --------- ------- ---- ---------- AXE 32 59 Misc. 118 MMC ADZ 9 fr. 59 Misc. 260 MMC AXE 13 59 Misc. 268 MMC GIANT 6 33 MMC ADZ 10 fr. 59 Misc. 262 MMC ADZ 12 fr. 59 Misc. 266 MMC AXE 12 59 Misc. 65 MMC AMY 26* 76 Misc. 252-253 MMC ADZ 11 fr. 59 Misc. 264 MMC AMY 41* 76 Misc. 274-275 MMC AMY 129* 76 Misc. 714-715 MMC AMY 140* 76 Misc. 716-717 MMC AMY 27* 76 Misc. 254-255 MMC ANY 31* 76 Misc. 260-261 MMC AMY 42* 76 Misc. 276-277 MMC AMY 50* 76 Misc. 284-285 MMC AMY 28* 76 Misc. 256-257 MMC AMY 32* 76 Misc. 262-263 MMC AMY 137* 76 Misc, 720-721 MMC ANY 51* 76 Misc. 286-287 MMC AMY 29* 76 Misc. 258-259 MMC ANY 33* 76 Misc. 264-265 MMC AXE 16 59 Misc. 73 MMC AMY 52 * 76 Misc. 288-229 MMC AMY 129* 76 Misc. 736-737 MMC AMY 134* 76 Misc. 726-727 MMC AXE 17 59 Misc. 75 MMC AMY 130* 76 Misc. 734-735 MMC * Amended Location; also see detailed claim list, Mouat Estate. 8 SCHEDULE A (continued) ORIGINAL LOCATION RECORDING DATA ----------------------- BLM SERIAL BOOK PAGE DATE NUMBER --------- ------- ---- ---------- AXE 24 59 Misc. 89 MMC 36029 AMY 45* 76 Misc. 278-279 MMC 10782 AMY 55* 76 Misc. 290-291 MMC 10789 AMY 131* 76 Misc. 732-733 MMC 17300 AMY 34* 76 Misc. 266-267 MMC 10777 AMY 46* 76 Misc. 280-281 MMC 10784 AMY 56* 76 Misc. 292-293 MMC 10790 AMY 132* 76 Misc. 730-731 MMC 17301 AMY 35* 76 Misc. 268-269 MMC 10778 AMY 47* 76 Misc. 282-283 MMC 10785 AMY 57* 76 Misc. 294-295 MMC 10791 AMY 133* 76 Misc. 728-729 MMC 17302 AMY 36* 76 Misc. 270-271 MMC 10799 AMY 138* 76 Misc. 718-719 MMC 17307 AXE 6 59 Misc. 16 MMC 36011 AXE 28 59 Misc. 110 MMC 36033 AXE 27 59 Misc. 108 MMC 36032 AMY 37* 76 Misc. 272-273 MMC 10780 AXE 14 59 Misc. 69 NMC 36019 AXE 4 59 Misc. 12 MMC 36009 AXE 26 59 Misc. 106 MMC 36031 AMY 135* 76 Misc. 724-725 MNC 17304 AXE 15 59 Misc. 71 MNC 36020 AMY 60* 76 Misc. 296-297 MMC 10792 AMY 136* 76 Misc. 722-723 MMC 17305 AXE 11 59 Misc. 63 MMC 36016 AMY 61* 76 Misc. 298-299 MMC 10793 AMY 62* 76 Misc. 300-301 MMC 10794 ADZ 13 fr. 59 Misc. 268 MMC 35951 ADZ 14 fr. 59 Misc. 270 MMC 35952 ADZ 3 fr. 59 Misc. 199 MMC 35941 AXE 5 59 Misc. 14 MMC 36010 AXE 3 59 Misc. 10 MMC 36008 AMY 65 76 Misc. 302-303 MMC 10795 AMY 66* 76 Misc. 304-305 MMC 10796 AMY 67* 76 Misc. 306-307 MMC 10797 AXE 7 59 Misc. 18 MMC 36012 AXE 8 59 Misc. 20 MMC 36013 HRH 1 65 287-288 MMC 36367 AMY 68* 76 Misc. 308-309 MMC 10798 AMY 69* 76 Misc. 310-311 MMC 10799 AMY 7Q* 76 Misc. 312-313 MMC 10800 AMY 71* 76 Misc. 314-315 MMC 10801 AMY 72* 76 Misc. 316-317 MMC 10802 AMY 73* 76 Misc. 318-319 MMC 10803 AMY 74* 76 Misc. 320-321 MMC 10804 9 SCHEDULE A (continued) ORIGINAL LOCATION RECORDING DATA ----------------------- BLM SERIAL BOOK PAGE DATE NUMBER --------- ------- ---- ---------- AMY 75* 76 Misc. 322-323 MMC 10805 ADZ 6 fr. 59 Misc. 205 MMC 35944 AMY 76* 76 Misc. 324-325 MMC 10806 AMY 77* 76 Misc. 326-327 MMC 10807 AMY 78* 76 Misc. 328-329 MMC 10808 ADZ 7 fr. 59 Misc. 222 MMC 35945 ADZ 8 ft. 59 Misc. 224 MMC 35946 AXE 38 59 Misc. 226 MMC 36043 AXE 39 59 Misc. 228 MMC 36044 AMY 79* 76 Misc. 330-331 MMC 10809 AMY 80* 76 Misc. 332-333 MMC 10810 AXE 44 59 Misc. 238 MMC 36049 AXE 42 59 Misc. 234 MMC 36047 AXE 40 59 Misc. 230 MMC 36045 AMY 82* 76 Misc. 334-335 MMC 10811 AMY 83* 76 Misc. 336-337 MMC 10812 AMY 85* 76 Misc. 338-339 MMC 10813 AMY 86* 76 Misc. 340-341 MMC 10814 AMY 87* 76 Misc. 342-343 MMC 10815 AXE 45 59 Misc. 240 MMC 36050 AXE 43 59 Misc. 236 MMC 36048 AXE 41 59 Misc. 232 MMC 36046 AMY 88* 76 Misc. 344-345 MMC 10816 AMY 89* 76 Misc. 346-347 MMC 10817 AMY 90* 76 Misc. 348-349 MMC 10818 AMY 91* 76 Misc. 350-351 MMC 10819 AMY 92* 76 Misc. 352-353 MMC 10820 AMY 93* 76 Misc. 354-355 MMC 10821 AMY 94* 76 Misc. 356-357 MMC 10822 AMY 95* 76 Misc. 358-359 MMC 10823 AMY 96* 76 Misc. 360-361 MMC 10824 AMY 97* 76 Misc. 362-363 MMC 10825 AMY 98* 76 Misc. 364-365 MMC 10826 AMY 99* 76 Misc. 366-367 MMC 10827 AMY 100* 76 Misc. 368-369 MMC 10828 AMY 101* 76 Misc. 370-371 MMC 10829 AMY 102* 76 Misc. 372-373 MMC 10830 AMY 103* 76 Misc. 374-375 MMC 10831 AMY 104* 76 Misc. 376-377 MMC 10832 AMY 105* 76 Misc. 378-379 MMC 10833 AXE 9 59 Misc. 22 MMC 36014 PET 24 576 MMC 36392 NEAR & FAR 25 127 MMC 36390 UP & DOWN 25 129 MMC 36405 RE-EAST 24 508 MMC 36373 * Amended Location; also see detailed claim list, Mouat Estate. 10 SCHEDULE A (continued) ORIGINAL LOCATION RECORDING DATA ----------------------- BLM SERIAL BOOK PAGE DATE NUMBER --------- ------- ---- ---------- 24 45 MMC 36399 PATENTED PLACER CLAIMS 27 425 6/5/54 MMC 36402 [] in Nye Basin [] sed to SMC) 37 427 6/5/54 MMC 36379 [] in Nye Basin [] sed to SMC) 23 21 MMC 36377 24 153 MMC 36398 * Amended Location; also see detailed claim list, Mouat Estate. [] Unreadable Text 11 SCHEDULE "B" WATER RIGHTS: (1) Lessors' Water Right Number 43C-W-189530-00 Source: Mountain View Lake - SW 1/4 NE 1/4 Sec/20, Twp 5 S., Rge 15 E., M.P.M., Stillwater County, Montana Indicated Flow Rate: 1.34 CFS Indicated Volume: 486.27 acre feet per year Purpose (Use): Industrial. (2) Lessors' Water Right Number 43C-W-189532-OO Source: Verdigris Creek- S 1/2 SW 1/4 NE 1/4 Sec. 20, Twp. 5 S., Rge 15 E., M.P.M., Stillwater County, Montana Indicated Flow Rate: 0.09 CFS Indicated Volume: 49.79 acre feet per year Purpose (Use): Domestic (multiple) EXHIBIT 10.07 STILL WATER COMPLEX BASAL ZONE LEASE AGREEMIENT THIS LEASE AGREEMENT (hereinafter "Lease") is made and entered into this 18th day of January, 2000, by and between MOUAT NICKEL MINES INC., WILLIAM G. MOUAT, individually and as Trustee, and FORT STOCKTON INVESTMENTS, INC. (hereinafter referred to collectively as the "Lessors") and CHROME CORPORATION OF AMERICA (hereinafter referred to as the "Lessee"), having offices at 5613 S. Prince Street, Littleton, Colorado 80120. I. GRANT OF LEASE For and in consideration of the sum of ten dollars ($10.00) cash in hand paid by the Lessee to the Lessors, the receipt of which is hereby acknowledged, in consideration of the Production Royalty and Monthly Lease Payments herein covenanted to be paid by Lessee, and in consideration of the mutual covenants hereinafter set forth, Lessors do hereby demise, lease and let unto the Lessee those certain patented and unpatented mining claims, mill sites and tunnel sites (hereinafter referred to collectively as the "Subject Premises") all listed in Schedule "A", attached and incorporated herein by this reference, situated in Stillwater County, Montana. In connection with and as part of the leasehold estate hereby granted, Lessee shall have and may exercise the following rights for the benefit of all lands owned, leased or controlled by Lessee: A. The right to explore, develop, mine, extract and remove or sell ores, concentrates or other products found in, on or under the Subject Premises; B. The right, during the continuance of this Lease to take and use any material suitable for backfilling, or other mining purposes, and any limestone found in the premises; C. The right to use all existing facilities, and the right to construct all mills, plants, tracks, tramways, roads, buildings, and other improvements; D. The right to use and develop any and all excavations, openings, tunnels, ditches, flumes, drains~and other improvements on the Subject Premises; E. The right to do all other acts and things which are, or may become necessary or suitable in the discretion of Lessee, including without limitation the right to use or disturb so much of the surface and surface resources of the Subject Premises as Lessee may deem desirable, for the mining and removing of ores, metals, minerals, rocks and precious stones, the milling, beneficiating, concentrating, smelting, refining, or leaching of such ores, metals, minerals and other materials, or the concentrates thereof; 2000 Basal Zone Lease F. The right to cut and use timber and other raw materials found upon, or in said premises for any purpose in connection with the operations to be carried on under this Lease; G. Such rights of surface and underground access for men, equipment, supplies, utilities and water as may be necessary or convenient for the conduct of Lessee's operations on any portion of the Subject Premises or on other lands, including necessary access under, upon, across any other contiguous land owned or controlled by Lessors or which Lessors may have dominion or control; H. Any buildings on the leased properties shall remain the property of the Lessor. The Lessee's activities on the leased properties shall not restrict the Lessor's access to the buildings. II. PRIMARY TERM AND LEASE PAYMENTS A. Term. Unless sooner terminated by the provisions hereof, this Lease shall remain in full force and effect for an initial term of five (5) years from the date hereof (the "Primary Term") and so long thereafter as ore-bearing materials are produced from the Subject Premises in commercial quantities, as that term is defined in Article VI of this Lease. B. Monthly Rental Payment. Lessee agrees to pay Lessors on or before the first day of each month of the Primary Term of the Lease and as provided in Article II.D the following Monthly Rental Payments: First twelve months $1,000 per month Second twelve months $2,000 per month Subsequent months $2,500 per month These Monthly Rental Payments are expressly intended by the parties to negate and remove any obligation on the part of the Lessee, express or implied, to explore, develop and mine the Subject Premises with reasonable diligence during said five-year Primary Term or during the five-year extension provided in Article II.C. C. Lessee, so long as it shall not be in default under the terms and provisions of this Lease, shall have the exclusive right, privilege and option to extend the Primary Term for an additional term of five (5) years. Written notice of Lessee's intent to extend the Primary Term shall be given by Lessee to Lessors at least sixty (60) days prior to the expiration of the initial five-year Primary Term. 1000 Basal Zane Lease D. On the date of execution of this Lease, Lessee will pay to Lessors, and Lessors hereby acknowledge receipt of, the sum of One Thousand dollars ($1,000.00) which payment shall constitute payment in full for the first Monthly Rental Payment due pursuant to Article II.B. E. All payments of Monthly Rental Payments, Production Royalty or other money payable under this Lease shall be paid to the Lessors by mailing or delivering a check to William G. Mouat, Trustee, herein designated by Lessors as their representative and depository, the Lessors hereby granting to said depository full power and authority on behalf of the Lessors, their successors and assigns to collect, and distribute all sums of money due and payable hereunder. Adequate payment by Lessee to such designated representative and depository shall be deemed full and adequate payment to all Lessors. Notwithstanding the death of any Lessor or the transfer, division, or hypothecation of such Production Royalty interest, payment, or tender of Monthly Rental Payments and the Production Royalty to the depository as herein designated shall be binding upon all Lessors, their heirs, personal representatives, transferees and assignees. Change of designated representative and depository by Lessors shall not be effective nor binding upon Lessee until written notice is received of such changed designated representative and depository. F. Lessors may elect, by sixty (60) days' prior notice to Lessee, to take their Production Royalty in kind, and the cost, if any, of doing so shall be borne entirely by Lessors. G. If Lessors own less than 100% of the mineral estate, whether in fee or under mining claim, lease, or contract in the Subject Premises, or any portion thereof, subject to the paramount title of the United States, then the Monthly Rental Payments and Production Royalty which are payable under this Lease shall be reduced in the proportion which Lessors' interest bears to 100% of the mineral estate of the Subject Premises. III. TITLE A. Representations and Warranties. Lessors make the following representations and warranties effective as of the date of this Lease: 1. With respect to the patented claims, Lessors are in actual and exclusive possession and own such claims free and clear of all defects, liens and encumbrances arising by, through or under Lessors. 2. With respect to the Subject Premises, Lessors have no knowledge of threatened actions, suits, claims, or proceedings. 3. Lessors have delivered or will deliver to Lessee all information reasonably 2000 Basal Zone Lease requested by Lessee concerning title to the Subject Premises in Lessors' possession. The representations and warranties set forth above shall survive the execution and delivery of any documents of transfer provided under this Lease. B. Lessors' Covenants. Lessors covenant that during the term of this Lease, Lessors shall maintain their interest in the Subject Premises free and clear of any liens and encumbrances, not in existence on the date hereof, and not resulting from Lessee's operations and activities hereunder. C. Disclosures. Lessors and Lessees represent and warrant that they are unaware of any material facts or circumstances which have not been disclosed in this Lease, which should be disclosed to the other party in order to prevent the representations in this Article LII from being materially misleading. IV. PRODUCTION ROYALTY A. Ores and Concentrates Sold. Lessee shall pay to Lessors a Production Royalty of five percent (5%) of the Net Smelter Returns (if sold to a mill, smelter, or refinery) or Net income (if not sold to a mill or smelter), whichever is applicable, from the sale of all ores or concentrates from the Subject Premises. Lessors may take in kind pursuant to Article II.G. By "Net Smelter Returns" is meant the amount received from the mill or smelter, upon the sale of such ores or concentrates after deducting from the gross value thereof the cost of milling, concentrating, processing, smelting and transportation to the smelter or refinery. By "Net Income" is meant the amount received by Lessee from a purchaser of ores or concentrates other than from a mill or smelter, less costs of milling, concentrating, processing, refining and transportation (if any). B. Ores and Concentrates Not Sold. If ores, concentrates or other products are taken in kind (produced and removed, but not sold) by Lessee, then Lessee shall nevertheless pay the Production Royalty for ores and concentrates as specified above, the amounts received by Lessee (for purposes of calculating Net Smelter Returns or Net Income) shall be deemed to be no less than the amounts Lessee would have received if a sale had been made. Payments shall be made in accordance with the provision in Article IV.C. Ores, minerals or other products produced by Lessee from the Subject Premises that are used by Lessee or its agents in the processing or refining of metals shall not be deemed to be products taken in kind by Lessee, and no Production Royalty need be paid upon such products. C. Payment Production Royalty shall be paid to the Lessors in accordance with Articles lL.E. and II.G. above and shall be payable within a period of twenty-one (21) days after receipt of proceeds from sale of ore concentrates produced from the Subject Premises during 2000 Basal Zone Lease each mining period of one month. Accompanying each payment, Lessee shall furnish to Lessor a statement of the production used as a basis for computing Production Royalty. V. MAINTENANCE OF MINING CLAIMS During the continuance of this Lease, Lessee agrees to comply with the requirements of the state and federal statutes with respect to patented and unpatented claims within the Subject Premises described in Schedule "A". Lessee agrees to pay any and all federal and/or state government fees required for the unpatented claims described in Schedule "A". Lessee will provide to Lessor a copy of any operating plan(s) submitted to the National Forest Service with respect to the Subject Premises. This Lease shall cover and extend to any further or additional right, title, interest or estate acquired by Lessors, or any of them, in or to the Subject Premises or any portion thereof. Lessee agrees to carry on its operations hereunder, diligently and in a good mjner-like manner, and in accordance with accepted mining practices in the State of Montana, and Lessee agrees that all mining operations shall be carried on in a systematic, orderly and economical manner so as to realize, insofar as is practicable, the full ore resources of the Subject Premises. VI. TAXES, ENCUMBRANCES AND INJURIES A. Taxes. Lessee agrees to pay and discharge any and all taxes levied against the Subject Premises during the life of this Lease, except that in those cases in which said taxes cover a period during only a part of which this Lease is in force, Lessee shall pay and discharge only its pro rata share thereof determined by a comparison of such part with the total period covered. B. Lessee's Encumbrances. Lessee will not permit any liens or encumbrances on the patented mining claims of the Subject Premises. Notwithstanding anything to the contrary in this section, the parties agree that Lessee has the right to encumber, as it deems necessary or convenient, its leasehold interest including without limitation its share of production and proceeds, so as not to interfere with Lessor's Production Royalty. C. Injuries from Lessee's Operations. Lessee shall save Lessors harmless from any and all damages, claims, costs and expenses arising from or growing out of any or all injuries resulting from the operations of Lessee, or in connection therewith, on the Subject Premises and occurring during the life of this Lease except as provided in Article XII herein. 2000 Basal Zone Lease VII. TERMINATION A. This Lease may be terminated by Lessee at any time after the expiration of one (1) year from the date of execution of this Lease by notice in writing thereof to Lessors, to take effect from such date as may be stipulated by Lessee in such notice, without, subject to the following paragraph, the Lessee incurring any further liability whatsoever as regards Monthly Rental Payments, Production Royalty, or other payments. B. Subject to the foregoing paragraph, upon such termination, Lessee shall have no further interest or right in the Subject Premises, save the right to remove its property as provided in Article X, including all stockpiles of ores and concentrates on which a Production Royalty shall have been paid, and shall have no obligation or duties with respect to the Subject Premises, except for reclamation of lands disturbed by Lessee and required by governmental authority to be reclaimed, and except as herein specifically provided and as to obligations which have accrued hereunder prior to such termination, but all fences or enclosures protecting open pits, shafts, tunnels, etc., shall be left intact and Lessors shall be entitled to retain the entire amount of any moneys paid under this Lease up to the effective date of termination. C. This Lease shall not terminate for nonpayment by Lessee of Monthly Rental Payments or Production Royalty, unless such nonpayment continues for sixty (60) days after payment was due, subject further to Article XVI. VIII. FORCE MAJEURE Lessee shall be excused from the performance of its obligations of every kind, except the Monthly Rental Payments set forth in Article II during such period or periods as performance may be made impossible by force nwjeure. By this it is intended to mean that the Lessee shall be excused from the performance of any provision of this Agreement for such period of time as performance of such provision is prevented by fire, flood, earthquake, explosion, lack of transportation facilities, Act of God, shortage of power or water, strike or similar labor difficulties, insurrection or mob violence, requirement or regulation of government, or other causes beyond the reasonable control of Lessee. IX. RECORDS Within a reasonable time, not to exceed six (6) months, following the termination of this Lease for any cause, Lessee shall furnish to Lessors a copy of its factual maps, drilling records, drill core and assay and smelter reports relating to the Subject Premises. Lessors agree, upon reasonable request by Lessee, to furnish to Lessee such maps, records, 2000 Basal Zone Lease reports and documents, as Lessors may possess relating to the Subject Premises. Such maps, records, reports and documents shall be returned, if requested, to Lessors within a reasonable time not to exceed ninety (90) days. X. REMOVAL Upon the termination of this Lease for any reason, Lessee shall have the right to remove from the Subject Premises, at any time within the 12-month period following such termination, all stockpiles of ore and concentrates upon which a Production Royalty shall have been paid, and all of its machinery, equipment, tools, structures or other property and improvements, fixtures and structures constructed, erected or placed on the Subject Premises, or any portion thereof, by Lessee; provided, however, Lessee shall leave in place all timbering, framing or enclosures protecting open pits, shafts, tunnels and underground trackage; and provided that removal of improvements; fixtures and structures shall not damage the structure remaining on the Subject Premises. XI. POSSESSORY RIGHTS While this Lease is in effect, Lessee shall be entitled to exclusive possession of the Subject Premises, except that Lessors and their representatives, successors and assigns, at any reasonable time, may go upon the Subject Premises to inspect the operations of Lessee thereon. Lessors are further entitled to access to claims not included under this Lease ("Lessors' Claims") across the Subject Premises for men, equipment, supplies, utilities, water and all other items as may be reasonably necessary for the exploration, development and operation of Lessor's Claims; provided, however, that in so doing Lessors shall not unreasonably hinder Lessee's work; and provided further that the Lessors hereby release Lessee from liability for any personal injury or death of employee or representative of Lessors while on the Subject Premises and the Lessors agree that they will indemnify and save harmless Lessee from liability for any personal injury to or death of any person or persons, or damage or destruction of property of Lessee or others done or cause by any employee or representative of Lessors while so visiting or traversing the Subject Premises. Lessors further agree to hold Lessee harmless from any liability and to indemnify Lessee for any claims, cost, expenses and fees arising from Lessors' activities on Lessors' Claims. XII. RELOCATION AND AMENDMENT Lessee shall have the right at any time or times during the term of this Lease, upon written notice to Lessors, to relocate any one or more of the unpatented mining claims formerly held but since relinquished by Mouat family interests whenever such location is deemed necessary or desirable. All such relocations shall be made by Lessee as agent for Lessors, placing all such amendments and relocations in the name of Lessors. 2000 Basal Zone Lease Lessee shall have the further right at its discretion to repair or replace any claim location monument or marking which has been damaged or destroyed, although Lessee shall not be obligated to perform such repairs or replacements. XIII. PATENTING Upon request of Lessee at any time or times during the term of this Lease, Lessors agree to undertake and obtain patent to any and all of the mining claims which are subject to this Lease, as designated by Lessee, and Lessee shall prepare all documents and compile all data and comply in all respects with the applicable law, all at the expense of Lessee. Any patent issued shall be in Lessors' names. Lessors shall execute any and all documents required for this purpose and shall cooperate fully with Lessee in the patent application and proceedings subsequent thereto. If Lessors begin patent proceedings and Lessee thereafter requests Lessors to discontinue such proceedings, or if this Lease is terminated while patent proceedings are pending, Lessee shall have no further obligations with respect thereto, except to pay any unpaid expenses to discontinue, or prior to termination, whichever occurs first. XIV. COMMINGLING Lessee shall have the right upon written notice to Lessor to commingle ore and minerals from the Subject Premises, or any portion thereof. XIV. DRAFTING OF DOCUMENT - MUTUAL This Lease has been drafted through the joint efforts of the Lessors and Lessee and neither of the parties hereto shall be permitted to claim that the drafting of this Lease was performed or accomplished to a greater extent by the other party. XVI. DEFAULT in the event that Lessee shall default in the performance of any of the terms and provisions of this Lease, then, after written notice of such default from Lessors to Lessee, if Lessee does not either: A. Cure such default within sixty (60) days after such notice; or B. Commence promptly within said period of sixty (60) days to rectify such default and continue thereafter to use due diligence to rectify such default until it is fully remedied or cured, Lessors may terminate this Agreement at any time thereafter during the continuance of such default by giving written notice to Lessee of their election to terminate. 2000 Basal Zone Lease XVII. NOTICE Any notice required or permitted to be given or served by one of the parties hereto shall be sufficiently given or served by a communication in writing, sent by registered mail, to the other party at the address given below: FOR THE LESSORS: William C. Mouat 825 Parkhill Drive Billings, Montana 59102 FOR THE LESSEE: Alistair R. Turner 5613 5. Prince Street Littleton, Colorado 80220 Each party may change the address by giving written notice of such change to the other party. XVIII. ASSIGNMENT Lessor agrees that Lessee may assign the benefit of this lease to a joint venture between Lessee and Idaho Consolidated Metals, Inc. Lessee's assignment of the benefit of this Lease to other parties may only be made with the consent of the Lessors, which consent will not be unreasonably withheld. XIX. CONfIDENTIALITY Lessors agree that all information developed or acquired by Lessee as a result of work under this Lease and conveyed to Lessors, or any one of them, including but not limited to information relating to ore reserves, mineral discoveries, mining or processing methods, plans, production schedules and other information shall be kept strictly confidential by Lessors until released or made public by Lessee. Neither the Lessee or the Lessor shall make any disclosure to any third party or the public or give out any publicity, press release or written material relating to confidential information or this agreement except: A. To a governmental agency or to the public which the disclosing party believes in good faith is required by pertinent law or regulation or the applicable rules of the stock 20(X) Basal Zone Lease exchange; or B. Information which is now or hereafter becomes part of the public domain through no fault of the disclosing participant. XX. TIME OF ESSENCE; BINDING EFFECT Time is of the essence in this Lease. Each obligation set forth herein shall extend to and be binding upon and every benefit inure to the heirs, personal representatives, successors or assigns of the parties hereto. XXI. FURTHER ASSURANCES The parties agree to execute and deliver such other documents as may be necessary to effectuate the intents and purposes of this Lease. XXII. ENTIRE AGREEMENT This Lease may not be amended except in writing by duly authorized representatives of the parties. This Lease constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements with respect to all matters covered hereby. XXIII GOVERNING LAW This Lease shall be governed by Montana Law and the parties hereby submit to the jurisdiction of the Montana courts, including the federal courts of the district of Montana. XXIV. MEMORANDUM OF AGREEMENT This Lease shall not be recorded without the consent of both parties. Upon the request of either party, both parties shall execute a Memorandum of this Lease in recordable form, which memorandum may be recorded. XXV. COUNTERPARTS This Lease may be executed in counterparts, no one of which needs to be executed by all Lessors, and shall be binding upon each party upon execution by that party, and shall be effective as if all parties had signed the same document. 2000 Basal Zone Lease IN WITNESS WHEREOF, the parties the day and year first above written. hereto have caused this Lease to be duly executed as of the day and year first above written. LESSORS: ATTEST 1/19/00 LAURENNE SUE O'DORISIO, President WILLIAM 0. MOUAT, individually and as Trustee ATTEST FORT STOCKTON INVESTMENTS, INC. 1/19/00 LAURENNE SUE O'DORISIO, President LESSEE: CHROME CORPORATION OF AMERICA By: ALISTAIR R. TURNER Executive Vice President 2000 Basal Zone Lease IN WITNESS WHEREOF, the parties hereto have caused this Lease to be duly executed as of the day and year first above written. LESSORS: ATTEST MOUAT NICKEL MINES, INC. LAURENNE SUE O'DORISIO, President WILLIAM G. MOUAT, individually and as Trustee FORT STOCKTON INVESTMENTS, INC. LAURENNE SUE O'DORISIO, President LESSEE: CHROME CORPORATiON OF AMERiCA By: ALISTAIR R. TURNER Executive Vice President 2000 Basal Zone Lease SCHEDULE A MINING CLAIMS SITUATED IN STILLWATER COUNTY MONTANA EAST OF THE STLILLWATER RIVER WEST OF THE STLILLWATER RIVER (18 Patented Lode Claims) (13 Patented Lode Claims) Big Ben Red Bird Lucky T Mountain View L.T.X. Big Thing H.E.D. Rough Rock Copper Rough Rock #2 Gold Tip Brooklyn Beauty Avalanche Patent Cataract Pada #1 New Wabeliski Pada #2 Summit Opal Something Dave Stillwater Emerald Pine Perseverance (7 Unpatented Lode Claims) H.R.H. Smelter Blue Jay Red Bird #2 Copper Bottom Gap Ridge Sue (1 Unpatented Lode Claim) Jame Giant Billie Westlake