Pursuant to the rights and interests held by Full Metal under the Agreement and as modified and assigned to the Company, the Company has agreed to pay to TAC an initial option payment in the amount of US$135,000 and later option payments totaling US$175,000 over three years, as well as annual Materials Payments in the amount of US$20,000.
Additionally, the Company will incur annual exploration expenditures totaling US$3,400,000 over four years.
The Agreement provides that the Company may enter into a Mining Lease with TAC at any time prior to December 31, 2019. Upon entering into the Mining Lease, the Company will make annual Advance Royalty payments escalating from US$25,000 in the first year to US$400,000 on the 16th anniversary and subsequent years.
In the event the Company delivers a Feasibility Study, the Company will issue to TAC 500,000 common shares, subject to the approval of the TSX Venture Exchange. Upon commencement of Commercial Production, the Company will pay to TAC a sliding scale net smelter returns royalty of 2% to 5%, depending on the price of gold, and a 2.5% net smelter returns royalty for all commodities except gold and other precious metals.
The Assignment Agreement and the transactions contemplated thereunder are subject to approval by the TSX Venture Exchange.
