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and refined silver)or refined or plocessed Other Products in standard commercial units outturned to 5. Taking In Kind
<br /> Producer's pool account(or to a third party account for the benefit of Producer)by an independent
<br /> third party refinery from ores and minerals mined from the Property on either a provisional or final Seller,upon providing not less than 30 days'advance written notice to Producer
<br /> settlement basis each calendar month.As used herein,"Monthly Average Metal Price"means the prior to the end of any calendar year,shall have the right during the upcoming calendar year to
<br /> pi ice for each such standard commercial unit of such Precious Metals (other than refined gold and take its applicable percentage share of Products in kind,by working with Producer,to arrange with
<br /> refined silver)or refined or processed Other Products for immediate delivery in an established market the smelter or refiner of Products for the delivery of Seller's percentage share of Products at the
<br /> selected by Producer as such price is published in Metals Week or a similar publication,averaged
<br /> for the calendar month. smelter or refinery.Title and risk of loss to Seller's share of such Products shall be deemed to have
<br /> passed to Seller at the time of delivery of Products to the smelter or refinery. Seller shall be
<br /> (e) If Producer does not cause copper,zinc,lead,silver,gold or other Precious responsible for and reimburse Producer for any additional costs incurred by Producer in making
<br /> Metals to be produced from ores and minerals mined fiom the Property, but rathet sells the raw ores Products available for Seller to take in kind.In the event that Producer has agreed,pledged or
<br /> of Base Metals,Precious Metals of Other Products or concentrates or dore produced from such ores otherwise promised to make physical delivery of 100%of Products to a third party for all or any
<br /> and minerals mined fiom the Property,then the Gross Value shall be calculated as set forth in Section portion of the calendar year in question,such that no Products are available for the Seller to take
<br /> 3(a), (b), (c) and (d), except that Copper Production, Zinc Production, Lead Production, Silver in kind,then Seller shall have no rights to take Products in kind for so long as those agreements or
<br /> Production,Gold Production of Metal Production shall,in each case, be equal to the amount of other arrangements remain in place.Seller agrees that if any third-party,smelter,refiner or other
<br /> copper,zinc,lead,silver,gold,other Precious Metals and Other Products contained in such raw ores, buyer of Products from Producer is unwilling to make arrangements to provide Seller's share of
<br /> concentrates or dore sold in the specified month multiplied by(i)the tecovery rate for such metal such Products in kind,Producer shall have no obligation to make such Products available iti kind.
<br /> contractually determined between Ptoducer and a third party processor or(ii) if thete is not a
<br /> specifically contracted recovery late, then by an assumed recovery rate equal to the average actual 6. Commingling
<br /> recovery rate experienced by Producer from the beneficiation of such ores and minerals for such
<br /> copper,zinc,lead,silver,gold,other Precious Metals and Other Products for the latest calendar month Producer may,subject to the following provisions of this Section 6,commingle or
<br /> ended prior to such month. in the event that such ores and minetals have not been so beneficiated by permit commingling of ores from the Property or mineral bearing products obtained after the
<br /> Producer during any such calendar month, the recovery rate shall be the actual recovery rate treatment thereof("Subiecl Products")with such ores or products from other properties("Other
<br /> experienced by the purchaser of such ores and minerals determined in good faith by Producer, Products") subject to the commingling procedures set forth below. Before commingling, the
<br /> Subject Products and Other Products shall be weighed and sampled in accordance with sound
<br /> (f) Where outturn of Precious Metals or Other Products is made by an mining and metallurgical practice for moisture and metal or other pay mineral content,the samples
<br /> independent third party refinery on a provisional basis,the Gloss Value shall be based upon the shall be assayed to determine metal or other pay mineral content, and suitable tests shall be
<br /> amount of such provisional settlement,but shall be adjusted in subsequent statements to account performed to establish metallurgical recovery and losses from the Subject Products and the Other
<br /> for the amount of such Base Metals, Precious Metals or Other Products established by final Products. Producer shall keep or cause to be kept records of weights,volumes, moisture,pay
<br /> settlement by such refinery, mineral content,and gross mineral content of the Subject Ploducts and Other Products,and also
<br /> showing quantities produced and quantities lost to tailings or other waste products and estimated
<br /> 4. Forward Sales percentage recovery,in accordance with sound mining and metallurgical practice,so as to determine
<br /> Seller acknowledges that Producer shall have the t fight(but not the obligation)to as closely as possible the portion of the commingled products and pay mineral content thereof
<br /> market and sell el refrain from selling Products mined from the Properly in any manner it may actually represented by the Subject Products.Seller and its representatives shall have the right to
<br /> elect.Accordingly,Gross Value shall be ducts in as provided in Section 3 of this Schedule conduct inspections of Producer's operations and properties,and to inspect and copy all records
<br /> related to such determination,in accordance with Sections 10 and 11.
<br /> irrespective of any actual selling arrangements entered into by Producer,specifically including,
<br /> but not limited to,forward sales,futures trading or commodity options trading,and any other price 7. Payment
<br /> hedging,price protection and speculative arrangements which may involve the possible delivery
<br /> of ores and minerals and Base Metals,Precious Metals or Other Products produced from ores and Net Smelter Returns shall be determined on a calendar monthly basis.The payment
<br /> minerals mined from the Property,and Seller shall have neither the right nor the obligation to of the Purchase Price measured by such Net Smelter Returns shall be made to Seller on or before
<br /> participate in any way in profits or losses arising fiom the same. the tenth business day following the last day of each calendar month. At the time of payment,
<br /> Producer shall deliver to Seller a statement showing,in reasonable detail,the quantities and grades
<br /> of the refined Base Metals or Precious Metals,dore, concentrates, Other Products or ores and
<br /> minerals produced and sold or deemed to be sold by Producer in the preceding month;the Average
<br /> Monthly Price determined,as herein provided,for refined Base Metals,Precious Metals and Other
<br /> Ploducts on which the payment is due;Allowable Deductions;and other
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<br /> Exhibit 2 Exhibit 2
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