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<br /> <br />ore feed for the purpose of assessing the grade surcharge for each <br />smelter shipment. <br />b. For the purpose of detenaining ore grade, any silver present <br />in the concentrates shall be converted to a gold equivalent based upon <br />the settlement price for gold and silver contained in the settlement <br />sheet. <br />(Example: 400 ounces of silver in conceatrates. aad gold and silver <br />settlement prices of $400 aad 55.00, respectively are shown, calculate <br />equivalent ounces as follows: <br />.too ez. x i&,~00 = ~~ = 5 gold equivakat ounces <br />5400 400 <br />to be added to the gold ounces total present accordiag to the smelter <br />settlement sheet.] <br />c. The formula for determining ore grade shall be as follows: <br />gold equivalent ounces (gold plus converted silver <br />tens of tbroullhput• 15 tons <br />[lixample: Z47 sold eauivalent ounces = ~Z = .492 as/ton <br />517 - I5 502 ore grade <br />d. The grade surcharge shall be assessed upon the modified net <br />smelter returns ("l~iSR") as de8aed herein: <br />Modffied Net Smelter Returns = a - (b x (e + d) ] ,where <br />a =Total Cash Returns From Smelter Less transportation <br />Insurance and other costa of shipping to smelter <br />("Net Smelter Returns"), as "Net Smelter Returns" <br />are defined in the industry <br />b =Total belt scale tons of throughput - 15 tons <br />c =Presumed cost of milling <br />d =Presumed cost of mining <br />[Fkatuple: $70,000 - [ 502 (30+10) ] a <br />$70.000 - 20,080 <br />549,920 Modified Net Smelter Returns) <br />6 <br />