15. State in detail how the ore could be shipped and how and where milled. *16. History: (a) Give a statement, as complete as possible, of previous exploration, development, operation, and production of property, with reasons for any past suspensions of operations. (b) State briefly the known history and production of adjoining and neighboring properties. (c) Furnish any available (private) reports that may apply to this application, including results of mine examinations, recommended exploration and development, and metallurgical investigations, *17. Production: (a) If mine is in production, furnish the following information: *18. Ore or mineral reserves: (If property is or has been operating.) (a) Describe the ore or mineral deposits briefly. (b) Submit available maps and assay data. (c) Give estimated tonnage and grade of each class of ore reserves. 19. State any conditions or circumstances regarding the property not sufficiently brought out by the foregoing questions. THE EXPLORATION 20. For what mineral or minerals and for what types of deposits and ores will the exploration be conducted? 21. Describe briefly but concisely, the proposed work and the estimated time required to complete it. NOTE. The Government will not participate in a project that will require more than 2 years to complete. 22. Furnish statement of the geological basis of the project with particular emphasis on factors leading the operator to expect the finding of commercial ore bodies. This statement should be accompanied by supporting maps such as geological maps, maps of the proposed openings and assay maps, sample lists, and other pertinent data. THE REQUIREMENTS AND COSTS 23. Tabulate in the form of an itemized statement with a sum for each item the estimated requirements and costs of the project so that the total will give the estimated cost of the project in which the Government will participate, as follows: (a) Labor, by numbers and classes (miners, muckers, millmen, etc.), with wages of each. (b) Supervisors, by numbers and positions, with salaries of each. (c) Cost of necessary repairs to existing facilities, structures, and buildings. (d) Cost of necessary installation or construction of additional facilities, structures, and buildings. (e) Cost of items of equipment, not now owned by the applicant which must (f) Cost of rental for equipment which the operator proposes to rent. (h) Cost of materials and supplies, including items of equipment costing (i) Cost of power, water, utilities, and any other items not provided for above. 24. Furnish a time schedule of the project, stated in terms of months after project is approved, showing progress expected to be accomplished and the money expected to be spent. If you have already answered these questions on MF-100, you are not required to answer the questions for this application. CERTIFICATION The undersigned company, and the official executing this certification on its behalf, hereby certify that the information contained in this form and accompanying papers is correct and complete to the best of their knowledge and belief. Title 18, U. S. Code (Crimes), Section 1001, makes it a criminal offense to make a willfully false statement or representation to any department or agency of the United States as to any matter within its jurisdiction. the United States of America, acting through the Department of the Interior, Defense Minerals Administration, hereinafter called the "Government," and ' hereinafter called the "Operator," as follows: 1. Authority for contract. This agreement is entered into under the authority of the Defense Production Act of 1950, pursuant to Mineral Order 5, entitled "Regulations Governing Government Aid in Defense Exploration Projects." 2. Operator's property rights. The exploration project shall be conducted on that certain property situated in the State of County of described as follows: with respect to which the Operator represents and undertakes:* 3 (a) That he is the sole owner, in possession and entitled to possession, and that the property is subject only to the following claims, liens, or encumbrances as to each of which the subordination agreement of the holder is attached: (b) That he is a lessee, in possession and entitled to possession, and the subordination agreement of the lessor is attached. 1 If sufficient space is not provided in any blank, use an extra sheet of paper and refer to it in the blank. 2 State name, address, and nature of organization if any. Give legal description or enough to identify the property. Strike out the provision not applicable. 3. Exploration project. The Operator, within days from the date of this contract shall commence work on a project of exploration for ' ; shall prosecute the work efficiently, expertly, in a workmanlike manner, in accordance with good mining standards, with suitable and adequate equipment, materials, and labor, all properly designed to bring the project to completion within a period of from the date of this contract. The exploration project and the work to be performed are more fully described on Exhibit "A" attached hereto, which, with any maps or drawings thereto attached, is made a part of this contract. 4. Performance of the work. The work shall be performed by the Operator, under his sole direction and control: Provided, That with the consent of the Government and its written approval of the contract or contracts, all or any part of the work may be performed by the Operator through contract or contracts with independent contractors. The Government shall have the right to enter and observe and inspect the work at all reasonable times, and the Operator shall provide the Government with all available means for doing so. The Government may consult with and advise the Operator on all phases of the work. 5. Fixtures and improvements. The Operator shall devote the land and all existing improvements, facilities, buildings, installations, and appurtenances to the purposes of the exploration project without any allowance for the use, rental value, depreciation, depletion, or other cost of acquiring, owning, or holding possession thereof. Attached hereto, marked "Exhibit 'B'," is a detailed list of additional facilities, buildings, and fixtures, to be purchased, installed, or erected by the Operator, with the estimated cost of each, to which the Government will contribute its agreed pro-rata share of the cost. The difference between the cost of such additional facilities, buildings, or fixtures, and the salvage value thereof at the conclusion of the work, shall be charged as a cost of the project to which the Government has contributed its pro-rata share. 6. Operating equipment. Attached hereto, marked "Exhibit 'C'," is a detailed list of operating equipment divided into categories of items to be rented, purchased, or furnished by the Operator, with the allowable rental, purchase price, or rental value, as the case may be, annexed to each. As to equipment purchased for the project, the Government will contribute its agreed pro-rata share of the cost thereof, and the difference between the cost and the salvage value at the conclusion of the work shall be charged as a cost of the project to which the Government has contributed its pro-rata share. [Page 2] 7. Title to and disposition of property. All facilities, buildings, fixtures, equipment, or other items costing more than $50 each, paid for or purchased with funds contributed jointly by the Operator and the Government, shall belong to the Operator and the Government jointly, in proportion to their respective contributions, and upon the termination of the contract, if they have any salvage value, shall be disposed of for their joint account unless the Government, in writing, waives its interest in any such items. The Government may require the dismantling, severance from land, and removal of any such items in order to realize its interest in the salvage value thereof, and the cost of any such removal and of the disposal of the items shall be for the joint account of the parties in proportion to their respective interests. 8. Labor and supervision. Attached hereto, marked "Exhibit 'D'," is an itemized schedule of labor, by numbers and classes (miners, muckers, millmen, etc.), and of supervisors, by numbers and positions, with the maximum wages or salaries that may be paid to each as an allowable cost of the project. 9. Rehabilitation and repairs. Attached hereto, marked "Exhibit 'E'," is a detailed schedule of existing facilities, buildings, installations, and fixtures, with a statement of the cost of any necessary rehabilitation or repairs to put into useful and operable condition, which cost shall be allowed as a cost of the project. 10. Allowable costs of the project. The allowable costs of the project in which the Government will participate are limited to the necessary, reasonable, direct costs of performing the exploration work, including the costs of materials, Name of mineral. Not in excess of 2 years. supplies, engineering, power, water, and utilities, including items of equipment costing less than $50 each; and the costs referred to in Articles 5, 6, 8, and 9, and the exhibits annexed to and referred to in the contract. Although the Government may pay part of the cost of new or additional facilities, structures, buildings, and equipment, only the depreciation on such items, computed as indicated in Articles 5 and 6, will be charged as a cost of the project. No items of general overhead, corporate management, interest, or any other indirect costs not expressly allowed by these regulations, or work performed or costs incurred before the date of this contract, shall be allowed as costs of the project in which the Government will participate. 11. Participation by the Government. At the end of the first full calendar month after the Operator has commenced work under the project, and at the end of each succeeding calendar month, the Operator shall submit to the Govern ment a voucher for payment with a detailed statement of work done and allowable costs (as defined in Article 10 of this agreement) incurred, in a form and with supporting data acceptable to the Government. After approving the voucher, the Government shall pay to the Operator percent of the sum of such costs incurred; Provided, That the aggregate total of all sums paid by the Government under this agreement shall not exceed $----. which is project, $_ percent of the agreed estimated total costs of this 12. Accounts and audits. The Operator shall keep suitable records and accounts of operations, which the Government may inspect and audit at any time. The Government may at any time require an audit of the Operator's records and accounts by a certified public accountant, the cost thereof to be treated as a cost of the project. The Operator shall keep and preserve said records and accounts for at least 3 years after the completion of the project or the termination of this contract. 13. Progress reports. The Operator shall provide the Government with monthly reports of progress in form and content satisfactory to the Government, and upon the completion of the project or termination of the contract shall provide the Government with a comprehensive geologic and engineering report, including an estimate of ore reserves, to the best of his ability. Four copies of all reports shall be furnished to the Government. 14. Repayment by Operator. If, upon the completion of the exploration project or termination of the contract, the Government considers that a discovery or development has resulted from the work from which commercial production of ore may be made, the Government, within 6 months thereafter shall so certify to the Operator, particularly describing and delimiting its estimate of the discovery or development. Thereafter, if and as ore is produced as a result of such discovery or development, the Operator and his successor in interest shall be and become obligated to pay to the Government a percentage royalty on the net smelter returns or other net proceeds realized from such ore, concentrates, or metal produced within ten (10) years from the date of this contract, until the total amount contributed by the Government, without interest, is fully repaid or said 10 years have elapsed, whichever occurs first, as follows: Of net smelter returns or other net proceeds not in excess of eight dollars ($8.00) per ton of ore: One and one-half (1%) percent. Of net smelter returns or other net proceeds in excess of eight dollars ($8.00) per ton of ore: One and one-half (1%) percent, plus one-half (2) percent additional for each full fifty cents ($0.50) in excess of eight dollars ($8.00) per ton of ore, but not in excess of a maximum of five (5) percent This obligation to repay from net returns or proceeds shall be and remain a claim and lien upon the property which is the subject of the exploration project and upon any production resulting from such discovery or development, in favor of the Government, until fully paid, or until said 10-year period has elapsed and this claim and lien and the Government's right to repayment shall survive any termination of the contract, whether by completion of the exploration project or otherwise. This article is not to be construed as imposing any obli tion on the Operator or his successor in interest to produce ore from any such discovery or development. 15. No assignment of contract. Without the written consent of the Govern ment, the Operator shall not assign or otherwise transfer or hypothecate this contract or any rights thereunder. 16. Termination and completion. The Government may, at any time, hy written notice to the Operator, terminate this contract: (a) If the Operator fails to provide his share of the money necessary to prosecute operations pursuant to the terms of the contract; (b) if the Operator, in the opinion of the Government, fails to prosecute operations pursuant to the terms of the contract; or (c) if in the opinion of the Government, operations up to the time of the notice have not indicated the probability of making any worthwhile discovery and in the opinion of the Government further operations are not justified. Upon the completion of the project or any termination of the contract the Operator shall render to the Government a full and final accounting of his operations under the contract and his expenditures of money; shall dispose of any unused materials, supplies, and equipment for the joint account of the Operator and the Government in the proportion of their respective interests; and shall pay to the Government its pro-rata share of any money remaining. Executed in triplicate the day and year first above written. WHEREAS, the owner is the holder of a mortgage, claim, lien, or encumbrance recorded in Book dated State of page of --1 the records of the county of upon that certain parcel of ground described in a certain Exploration Project Contract dated 195, between the owner of said property and the United States of America ; NOW, THEREFORE, the undersigned does by these presents subordinate all of his right, title, and interest in said mortgage, claim, lien, or encumbrance to the right, title, and interest of the United States of America under the provisions of said Exploration Project Contract, and agrees that the lien and claim of the United States of America under the provisions of said contract shall be prior to the undersigned's rights under the provisions of said mortgage, claim, lien, or encumbrance; and The undersigned agrees to commit no act nor assert any right, title, or interest under said mortgage, claim, lien, or encumbrance that might contravene or conflict with the prior lien and claim of the United States of America under the provisions of said Exploration Project Contract. This undertaking and covenant shall be binding upon the heirs, successors, and assigns of the undersigned. WHEREAS, the undersigned is the owner in fee simple of that certain parcel of ground in the county of 82354--52- -56 State of described in a |