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RECEPTION#: 214968, 10/01/2015 at 03:55:11 PM, 4 OF 6 PAGES, MICHELLE NAUER,
<br />CLERK & RECORDER, OURAY COUNTY, CO.
<br />Exhibit C
<br />Net Smelter Royalty
<br />"Net Smelter Royalty" shall be defined and governed in accordance with the following terms:
<br />(a) It is the intention of the Grantee (hereinafter, together with all successors, affiliates
<br />and/or assigns of Grantee, the "Producer") and Grantor (hereinafter, together with all
<br />successors and/or assigns of Grantor, the "Royalty Owner") that the Net Smelter Royalty
<br />hereinafter provided shall be based upon the net value ("Net Value") of all mineral
<br />products extracted or produced from the Property calculated by subtracting from the
<br />actual proceeds received by Producer from the sales of such mineral products ("Sale
<br />Proceeds") all costs incurred by Producer (to the extent not already deducted when
<br />calculating the Sale Proceeds) to transport, process, treat, concentrate, refine or otherwise
<br />upgrade the mineral products after the mineral products leave the Property ("Processing
<br />Costs") all as set forth below. The obligation to pay Net Smelter Royalty shall accrue
<br />upon the sale of refined metals or the sooner sale of unrefined metals, dore, concentrates,
<br />ores or other mineral products, as hereinafter provided.
<br />(b) Producer shall pay to Royalty Owner a Net Smelter Royalty equal to five percent (5.00%)
<br />of the Net Value of all ores, minerals, metals, and materials mined and removed from the
<br />Property and sold by or for Producer.
<br />(c) As used herein, Net Value means the Sales Proceeds of such ores, minerals, metals or
<br />materials, less the following Processing Costs, charges and expenses paid or incurred by
<br />Producer with respect to such products paid or deemed incurred by Producer after such
<br />products leave the Property:
<br />(i)
<br />charges for treatment in the smelting and refining processes (including handling,
<br />processing, interest, and provisional settlement fees, sampling, assaying and
<br />representation costs, penalties, and other processor deductions);
<br />(ii) actual costs of transportation (including freight, insurance, security, transaction
<br />taxes, handling, port, demurrage, delay, and forwarding expenses incurred by
<br />reason of or in the course of such transportation) of ores, minerals, concentrates or
<br />other products from the Property to the place of treatment and then to the place of
<br />sale; and
<br />(iii) sales, use, severance, net proceeds of mine, ad valorem taxes if appropriate under
<br />state law and any other tax on or measured by mineral production.
<br />(d) Sale Proceeds shall be equal to the amount of the proceeds actually received by Producer
<br />during the calendar month from the sale of any refined or processed metals, minerals
<br />products, minerals, raw ores, dore or concentrates produced from ores mined from the
<br />Property. Where outturn of refined metals is made by an independent third -party refinery
<br />on a provisional basis, the Sale Proceeds shall be based upon the amount of such
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