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..~ ~.. <br />1.03 Wherever the words "paragraph", "subparagraph", "this Agreement", "herein", <br />"hereto" and "hereunder" are used in this Agreement, they refer to this Agreement. <br />1.04 The captions appearing in this Agreement have been inserted [or reference and es <br />a matter of convenience only and In no way define, limit or enlarge the scope or <br />meaning of this Agreement or any .provision hereof. <br />1.05 All references to any party to this Agreement shall be read with such changes <br />In number and gender as the context or reference to the parties hereto may require. <br />2. FORMATION OF THE JOINT VENTURE <br />2.01 PRI and DCC hereby agree to associate and participate in a joint venture (herein <br />called the "Joint Venture") [or the purposes o[ exploring the Property end, i[ deemed <br />warranted, bringing the Property or a portion thereof into production by establishing <br />and operating a Mine thereon. <br />3. INTERESTS <br />3.01 DCC hereby irrevocably gives and grants to PRI the sole and exclusive option <br />to earn end acquire up to an undivided 50% interest in and to the Property (subject only <br />to the terms of the 1984 Sublease) excluding the overriding royalty interest of DCC <br />for the consideration and upon the following terms: <br />(e) PRI covenants and agrees that it will pay the sum of 532,OD0 to DCC within <br />ten (10) days after the date hereof, which sum will be used for the purpose <br />o[ preparing the Property for production. It is mutually agreed between <br />the parties hereto that PRI will supervise and manage this production program <br />jointly with DCC's representatives. <br />3.02 [n the event that PRI shall have acquired an option to acquire an undivided 50% <br />interest in the Property pursuant to the provisions of 3.01 (s) hereof, then PRI may <br />acquire en undivided 50% interest in the Property by paying an additional sum of <br />$195,000 to DCC within 90 days after and PRI shall assume <br />all costs, financing end conduct of operation of the mine now and in the future. The <br />50% interest in the Property shell be subject toe 1% overriding royalty which is hereby <br />reserved and held by DCC on ell ores, concentrates and minerals produced or sold from <br />the Property. <br />4. OPERATOR <br />4.01 PRI shall be the Operator during the period from and after the date on which it <br />shall have acquired an undivided 50% interest in the Sublease pursuant to the terms <br />hereof. <br />5. RIGHTS, DUTIES AND STATUS OF OPERATOR <br />5.01 The Operator shall perform its duties hereunder honestly, in good faith and in <br />the best interests of the Joint Venture. <br />5.02 The Operator shall have the unfettered right and authority to manage end carry <br />out all Mining Operations as may be considered advisable in the judgment of the <br />Operator. So far as is reasonably possible and subject to the availability o[ funds, the <br />Operator agrees that it will: <br />4 <br />