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SENT BY: ENVIRON DEFENSE; ,~,~-20-96 11:26AM; 3034406052 => . 303 B32 8106; p4/6 <br />CUNTRACT <br />This Agreement between Duraago Metals, Inc. ("Durango") and Newmineco LLC <br />("LLC") is made this 1st day of February, 1996. <br />WHEREAS, Durango is a Nevada corporation, duly authorized to wnduct business <br />in Colorado, as shown by the copy of the Articles of Incorporation thereof, attached as <br />Exhibit 1 hereto; and <br />WHEREAS, Durango is Lessee under three leases with three diffcreat Lesson <br />relating to the so-called "Mogul Mine," those leases being the "Wood" lease, dated <br />October 24, 1995, between ]one A. Wood and Thames Edwin Hartley; the so-called "Rugg" <br />lease, dated November 9, 1992, between Charles R. Rugg and Thames Edwin Hartley; and <br />the so-called "Sutton" lease, dated January 3l, 1995, between David C. Sutton, et al., and <br />Thames Edwin Hartley, and the properties leased to Durango under said leases are <br />hereinafter collectively referred to as the "Mogul Mine;" and <br />WHEREAS, the Wotxl lease runs for a tcrrtt of ten years from October 24, 1995; the <br />Rugg lease runs for a term of ten years from November 9, 1992; and the Sutton lease runs <br />for a term of twenty years from January 31, 1995; and <br />NOW, THEREFORE, in consideration of the covenants of the parties herein <br />contained and for other good and valuable consideration, the receipt and adequacy whereof <br />are hereby expressly acknowledged, the parties agree as follows: <br />1. Exclusive Right to Ores. Durango hereby grants to LLC the exclusive, ~, <br />assignable right, but not the obligation, to receive all ores mined for the terms of the said ! <br />Wood, Rugg, and Sutton leases, and for any renewal term of each and every of the said <br />'. three leases. <br />2. Mining Contract. LLC has the assignable right to employ Durango as the <br />tnitter for any oue or all of each of the said three leases of the Mogul Mine, in exchange <br />for the fee/cost agreement for payment of actual mining costs plus ]0 percent, calculated <br />as set forth in the formula attached as Exhibit A hereto. <br />3- Ore Transport. At the request of LLC, Durango shall arrange for tltc <br />transport of any and all ores from the Mogul Mine to the milling facility for such ore as <br />directed by LLC, and the costs of such ore transport shall be considered a cost of mining <br />as set forth in paragraph 2 immediately about. <br />4. Durango Permits for Minins;. Durango, through its president, "Iltames Edwin <br />I lartley, represents and warrants that: <br />a) Ile is the duly authorized representative oI Durango with full attd <br />complete authority to enter into this Agreement ott behalf of Durango; <br />