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Considerations in Drafting Gold Leases and Development Agreements

Thomas P. Erwin, Gold Mine Financing (1988)

This paper will consider specific provisions of mine acquisition and operating agreements which are mandated by operational needs and the relationship of such provisions with the terms of mine financing agreements. This paper decidedly emphasizes the interests of the mine operator (variously referred to herein as “lessee” or “operator”), not those of the lessor, optionor, vendor or royalty owner who must seek counsel elsewhere.3

In keeping with the Program Committee's admonition that this Institute should focus on practical solutions, this paper is not intended as an in-depth analysis of all legal issues confronted by a party intending to acquire or operate a gold mine. Instead, this paper is limited to certain key issues commonly confronted by the operator and discusses proposed solutions.

The proposals presented in this paper are intended to inform the reader of possible solutions to pertinent issues, it being the author's experience that there are no “standard” clauses which will work in each instance. Also, possible technological advances require imagination on part of the draftman to assure that the terms and conditions of the mining agreement are not left in the “technological dust.”4 The sample clauses herein are derived from articles, texts, and treatises, as well as from agreements, which, although originally intended to be private between the parti