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MONTAGU M[NINC INVESTMENTS INC. <br />NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-Concluded <br />7. Transactions with Parent <br />The Parent has funded a substantial portion of the Company's mineral properties costs and operating <br />expenses as required. The Parent has also charged a finders fee and management fees related to the <br />Company's involvement in the joint venture totaling $75,000 and $45,000, respectively. Additionally, general <br />and administrative expenses include consulting services charged by the Parent totaling $ 127,316. The payable <br />to Parent accrues interest at 3% over the Parent's prime rate. Interest charges for 1986 totaled $102,762 of <br />which $58,981 was capitalized to mineral properties. <br />8. Subsequent Even[.' <br />On March 23, 1987 the Parent sold the Company to Royal Resources Corporation ("Royal") for <br />$3,600,000 plus 200,000 shares of Royal common stock. The effective date of the sale was March 18, 1987. A <br />portion of the proceeds were used to liquidate the liability to the Parent as of the effective date. <br />C-7 <br />