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Drilling and Mining Development Contracts

Gregory K. Hoskin, Proceedings of 18th Annual Rocky Mountain Mineral Law Institute (1972)

Material in an Appendix is generally considered to be supplemental. In this paper, that is not the case. This paper is intended, first, to provide a form of development contract for ready reference and, second, to discuss the provisions of development contracts.1Development contract as that term is used in this paper means any contract between the person desiring to have certain work done, Owner, and the person who will do the work, Contractor, which assists in the process of finding and extracting minerals.

The development contract set forth in the Appendix is an Exploration Drilling Contract, with supplemental provisions relating to Articles I and III for open-pit mining, drifting, and ventilation hole drilling. The supplemental [334] provisions give a sampling of useful language in the paragraphs most subject to change from one development contract to another. Since the Appendix is of primary importance, this paper will follow its format.

Development contracts will be construed and interpreted as any other contract.2 The same considerations that govern the drafting of any contract apply hereeach point of the agreement of the parties should be set forth clearly and precisely to minimize the possibility of litigation and the costly interruption of work. Be as specific as possible. The more specific the contract is, the less area there will be for exercise of