The way I read it is 4-15% EXCEPT for Kiewit. 6% for all Kiewit.
NOTE 6 – COMMITMENTS
Mining Properties
During the year ended December 31, 2009 the Company entered into a Joint Venture Agreement with the Moeller Family Trust (NOT CFTN)for the leasing of the Trust’s Yellow Hammer property in the Gold Hill Mining District of Utah. Pursuant to the agreement, Moeller Family Trust received 250,000 shares of the Company’s restricted common stock. If the Company does not place the Yellow Hammer property into commercial production within a three year period it will be required to make annual payments to the Trust of $50,000. Under the terms of the Joint Venture agreement, the Company will be required to pay a 6% net smelter royalty on the production of base metals and a net smelter royalty on gold and silver based on a sliding scale of between 2% and 15% based on the price of gold and silver, as applicable. The Company has incurred royalty expenses of approximately $80,000 as of June 30, 2011 associated with sales of concentrate during the six months ended June 30, 2011.
Also during the year ended December 31, 2009, the Company entered into a Joint Venture Agreement with the Clifton Mining Company and the Woodman Mining Company for the leasing of their property interests in the Gold Hill Mining District of Utah. Under the terms of the Joint Venture agreement, the Company will be required to pay a 4% net smelter royalty on base metals in all other areas except for production from the Kiewit gold property and a net smelter royalty on gold and silver, except for production from the Kiewit gold property, based on a sliding scale of between 2% and 15% based on the price of gold or silver, as applicable. The Company will also be required to pay a 6% net smelter return on any production from the Kiewit gold property. Additionally, if the Company does not place the Kiewit, Clifton Shears/smelter tunnel deposit, and the Cane Springs deposit into commercial production within a three year period, it will be required to make annual payments to Clifton in the amount of $50,000 per location.
