The Joint Venture Agreement will follow the format of Exploration, Development and Mine Operating Agreement 1996 [Model Form 5A].
CHECKLIST for PROSPECTOR'S in a JOINT VENTURE
You often hear how a prospector got "taken" by a mining company, a mining company will only pay what it has to, to tie up a property, it is just good business on their part. It is up to the prospector to know the value of your property, so do your homework, and remember if you don't ask they will definitely not give. They don't usally hang you for asking, at least not yet in B.C., but then is there anyone still mining in B.C.??
The Joint Venture Agreement will follow the format of Exploration, Development and Mine Operating Agreement 1996 [Model Form 5A].
No incremental earning of interests- all or nothing.
No assignment by Company without the written consent of the owner.
Owner is free to sell his interest at any time simply on written notice to Company, no right of first refusal.
Avoid a NPI,take a NSR or a G.P.R. [Gross Product Royalty, with no buy back clause. Definition of G.P.R. is “the Gross revenues realized from the disposition of all product,[ “exclusive of deductions.”].
If cash payments or work commitments not satisfied on time, agreement terminates at owners election.
Company must keep all claims in good standing.
Owner has access to the property and to Companies books to confirm expenditures.
Company can voluntarily terminate the agreement, but on no less than 60 days written notice.
On termination, Company must provide owner with all data, reports, drill core, etc. produced during the exploration program and everything left on Property after 60 days belongs to the owner, if he wants it , if not the Company must remove it.
Maximum of 10 % overhead charges for the operator of the Property.
Arbitration will be resolved under the rules of the B.C. International Commercial Arbitration Center.
Company does not have access to the Property until contract signed and payments are received by owner.
Title to remain in owners name, or have reverse transfers held in escrow.
A $10,000.00 U.S. nonrefundable deposit made at signing of Letter Agreement.
All work recorded as assessment credits up to maximum permitted.
The Company agrees to keep the Property free and clear of all liens and other encumbrances arising out of its activities on the Property.
Owner to receive quarterly progress reports and comprehensive annual report.
Contract will be written up by Company and ready for signing within 20 working days of the signing of Letter Agreement.
The Recipient shall have the right to elect to receive in kind his share of production.
Definite date for acceptance, if not accepted by the date, owner can terminate.
All Prospecting Sites that need to be restaked as Mining Claims, shall be done by the Owner, at the expense of the Company.[ Alaska ]
A “Area of Interest” will be established around the “Property” and any claims acquired after this time by either Joint Venture Partner, will become part of the Joint Venture Agreement.
On Signing
Minimum $25,000.00 up to ? , recoup expenses, depending on property.
Minimum Annual Payments $25,000.00 to $100,000.00 first year increased to $500,000.00 ?? by end of earn-in depending on property, payable to production.
Claims in “Good standing clause”, minimum 12 months.
First year work commitment [ $100,000.00 ? ] if work commitment not satisfied on time, Company can pay deficiency in cash, dollar for dollar.Work commitments should increase each year.
Minimum “Drilling Clause” first year [ 1000 feet ? ] If minimum drilling commitment not satisfied on time, Company can pay deficiency in cash, dollar for dollar.Amount of drilling should increase each year.
The Company can earn-in 30 % by spending $ ? 1st year, __ 2nd year __ 3rd year __4th year___.
The Company can earn-in 20 % by funding a “Bankable Feasibility Study” by [ time limit ]
The Company can earn-in 10 % by supplying all funding to production. [ time limit ]
The Joint Venture Partner will be entitled to recoup all of the capital expenses incurred after the Earn-in period, plus interest, by receiving 85% of the profits until such expenses have been recouped, after which profits will be shared 60/40 respectively.
© 1997 bmurray@sunwave.net