Boron One Holdings Inc. - M&A Activity 2021

PISKANJA AND JARANDOL PROJECTS

OPTION AND JOINT VENTURE AGREEMENT

AMONG:

ERIN VENTURES INC.

AND

BALKAN GOLD D.O.O.

AND

TEMAS RESOURCES CORP.

JUNE 16, 2021

1.	DEFINITIONS AND INTERPRETATION .................................................................................... 2
2.	CONDITION PRECEDENT ......................................................................................................... 12
3.	OPTION ......................................................................................................................................... 12
4.	MUTUAL REPRESENTATIONS AND WARRANTIES ............................................................ 14
5.	REPRESENTATIONS AND WARRANTIES OF THE OPTIONORS ....................................... 14
6.	REPRESENTATIONS AND WARRANTIES OF TEMAS ......................................................... 18
7.	COVENANTS OF THE PARTIES ............................................................................................... 19
8.	OBLIGATIONS AFTER TERMINATION OF OPTION ..............ERROR! BOOKMARK NOT
	DEFINED.
9.	OPTION ONLY ............................................................................................................................. 21
10.	JV COMPANY .............................................................................................................................. 21
11.	ASSOCIATION OF JV PARTICIPANTS .................................................................................... 22
12.	INTEREST OF JV PARTICIPANTS ............................................................................................ 23
13.	OPERATOR .................................................................................................................................. 24
14.	POWER AND AUTHORITY OF OPERATOR ........................................................................... 26
15.	DUTIES AND OBLIGATIONS OF THE OPERATOR ............................................................... 27
16.	PROGRAMS DURING OPTION PERIOD .................................................................................. 28
17.	PROGRAMS AFTER OPTION EXERCISE DATE ..................................................................... 30
18.	PRODUCTION PROGRAMS ....................................................................................................... 32
19.	TECHNICAL COMMITTEE ........................................................................................................ 35
20.	POWERS OF TECHNICAL COMMITTEE ................................................................................. 37
21.	OPERATING PROGRAMS, BUDGETS AND PAYMENTS ..................................................... 37
22.	DISPOSITION OF PRODUCTION .............................................................................................. 40
23.	AUDIT ........................................................................................................................................... 42
24.	SHARING OF AND CONFIDENTIAL NATURE OF INFORMATION .................................... 42
25.	LIMITED CHARGING ................................................................................................................. 43
26.	RESTRICTIONS ON ALIENATION ........................................................................................... 44
27.	LIABILITY OF THE OPERATOR AND INDEMNITY .............................................................. 45
28.	LIEN .............................................................................................................................................. 46
29.	ENCUMBRANCE, PARTITION AND INDEMNIFICATION ................................................... 47
30.	DISPUTE RESOLUTION ............................................................................................................. 48
31.	NOTICE ......................................................................................................................................... 49
32.	FURTHER ASSURANCES .......................................................................................................... 50
33.	MANNER OF PAYMENT ............................................................................................................ 50
34.	TERMINATION ............................................................................................................................ 50
35.	TIME OF ESSENCE ..................................................................................................................... 51
36.	HEADINGS ................................................................................................................................... 51
37.	ENUREMENT ............................................................................................................................... 51
38.	FORCE MAJEURE ....................................................................................................................... 51
39.	DEFAULT ..................................................................................................................................... 52
40.	FURTHER AGREEMENT ............................................................................................................ 52
41.	ENTIRE AGREEMENT ................................................................................................................ 52
42.	JOINT AND SEVERAL ................................................................................................................ 52
43.	GOVERNING LAW ...................................................................................................................... 52
44.	SEVERABILITY ........................................................................................................................... 53
45.	AREA OF INTEREST ................................................................................................................... 53
46.	COUNTERPARTS ........................................................................................................................ 54

OPTION AND JOINT VENTURE AGREEMENT

THIS AGREEMENT made effective as of the 16th day of June, 2021.

AMONG:

ERIN VENTURES INC. , a British Columbia continued company having its office at 203, 645 Fort Street, Victoria, BC V8W 1G2

(“ Erin ”)

OF THE FIRST PART

AND:

BALKAN GOLD D.O.O. , a [Serbian] company having its office at Bulevar Arsenija Čarnojevića 128 ,ulaz IV , Novi Beograd, Serbia

(the “ Erin Subsidiary ” and together with Erin, the “ Optionors ”)

OF THE SECOND PART

AND:

TEMAS RESOURCES CORP. , a British Columbia company having its office at 890-1140 West Pender Street, Vancouver, BC V6E 4G1

(“ Temas ”)

OF THE THIRD PART

WHEREAS:

A. The Erin Subsidiary, a wholly owned subsidiary of Erin, is the sole registered and beneficial owner of the Piskanja Project located in Serbia, in addition to retaining a contractual option to develop the Jarandol Project, as more particularly described in Schedule ”A” hereto;

B. Erin and Temas entered into the Letter of Intent (as defined herein) to establish the terms and conditions of the grant by Erin to Temas of the right and option to earn up to a 50% right, title and interest in and to the Property (as defined herein); and

C. The Parties now wish to enter into this Agreement to formalize the terms of the Letter of Intent.

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants and agreements herein contained the Parties hereto mutually agree as follows:

1. DEFINITIONS AND INTERPRETATION

1.1 For the purposes of this Agreement, except as otherwise expressly provided herein, the following words and phrases have the following meanings:
(a) “ Accounting Procedure ” means the accounting procedure prescribed from time to time by the Technical Committee, but always pursuant to generally accepted accounting principles in accordance with International Financial Reporting Standards;
(b) “ Affiliate ” means any person controlled, directly or indirectly, by a Party;
(c) “ Applicable Law ” means any domestic or foreign statute, law (including the common law), ordinance, rule, regulation, restriction, regulatory policy or guideline, by-law (zoning or otherwise), order, decree or proclamation, or any consent, exemption, approval or license, of any Governmental Authority, that applies, in whole or in part, to the Parties, the JV Participants or the Property, or that applies to the acquisition, maintenance or exploration of mineral tenures and the land subject thereto, or to the exploitation, extraction, processing, transportation, sale or export of minerals, Ore or Products in Serbia;
(d) “ Area of Interest ” means any lands lying inside the external boundaries of Serbia as at the date of this Agreement;
(e) “ Assets ” means the Property, Other Tenements, Facilities, Mineral Products and Supplies and all other assets acquired or held by the JV Participants with respect thereto or pursuant to this Agreement as the same may exist from time to time;
(f) “ Associated Company ” means:
- (i) any corporation or other entity which owns directly or through any other means more than 30% of the outstanding capital stock of a Party,
- (ii) any corporation or other entity of which a Party owns directly or through any other means more than 30% of the outstanding capital stock, and
- (iii) any corporation or other entity of which either of the corporations referred to in paragraphs (i) and (ii) owns directly or through any other means more than 30% of the outstanding capital stock;
(g) “ Business Day ” means any day, other than a Saturday, a Sunday or a statutory holiday in Vancouver, British Columbia or Belgrade, Serbia;
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(h) “ Commercial Production ” means the commercial exploitation of Mineral Products from the Property or any part thereof as a mine subsequent to a Production Program, but does not include milling for the purpose of testing or milling by a pilot plant. Commercial Production will be deemed to have commenced:
(i) if a plant is located on the Property, on the first day following the first period of 45 consecutive days during which Mineral Products have been produced from the Property at an average rate not less than 80% of the initial design rated capacity of the Facilities, or
(ii) if no plant is located on the Property, on the first day of the month following the first period of 45 consecutive days during which Mineral Products have been shipped from the Property on a reasonably regular basis for the purpose of earning revenue;
(i) “ Cost Share ” means the respective share of Costs and other liabilities to be borne by each JV Participant under this Agreement, and will be pro rata to the respective Interests of each JV Participant as determined from time to time;
(j) “ Costs ” means Expenditures, Program Overruns, Production Program Costs, Production Program Overruns and Operating Costs, as applicable;
(k) “ Designated Accounting Firms ” means one or more of the member firms of PricewaterhouseCoopers International Limited, Ernst & Young Global Limited, KPMG International Cooperative and Deloitte Touche Tohmatsu Limited or any successor or resulting firms created by a merger, amalgamation, business combination or like transaction of one of such firms with another firm or entity;
(l) “ Effective Date ” means the date which is three Business Days from the later of: (i) the date Temas gives written notice to Erin that the condition precedent in Section 2.1 has been satisfied or waived, (ii) if required, the date on which Erin has received the written approval of the Stock Exchange to the transactions contemplated in this Agreement; and (iii) if required, the date on which Temas has received the written approval of the Stock Exchange to the transactions contemplated in this Agreement;
(m) “ Encumbrance ” means any mortgage, charge, pledge, hypothecation, security interest, assignment, option, lease, lien (statutory or otherwise), charge, title retention agreement or arrangement, contractual commitment, royalty, restrictive covenant or other encumbrance of any nature;
(n) “ Environmental Laws ” means any Applicable Law with respect to environmental protection or regulating Hazardous Materials or which regulates or provides for liabilities with respect to pollution, the release into the environment of, or the exposure to, Hazardous Materials as such Applicable Laws existed from time to time up to the date of this Agreement;
(o) “ Expenditures ” means, without duplication, all costs, expenses, obligations and liabilities of whatever kind or nature actually and directly incurred in connection
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with the acquisition, exploration and development of the Property, including, without limiting the generality of the foregoing monies expended on:

(i) government fees, taxes and charges for licenses with respect to the Property;
(ii) land, surface rights and surface access rights payments;
(iii) in preparing for and in the application for and acquisition of environmental and other permits necessary or desirable to commence and complete exploration and development activities;
(iv) in holding the Property in good standing (including land maintenance costs and any monies expended as required to comply with Applicable Laws), curing title defects and in acquiring and maintaining surface, water and other ancillary rights;
(v) in doing geophysical, geochemical and geological surveys, drilling, assaying and metallurgical testing, including costs of assays, metallurgical testing and other tests and analyses (including downhole photography) to determine the quantity and quality of minerals and metals, water and other materials or substances;
(vi) in connection with any applications and necessary studies for the obtaining of permits, licences, and other regulatory approvals including the preparation for and attendance at hearings and other meetings relating to the Property;
(vii) in the preparation of Programs and the presentation and reporting of data and other results obtained from those Programs;
(viii) in acquiring, erecting, installing or obtaining the use of Facilities;
(ix) in transporting minerals, personnel, supplies, mining or milling plant, buildings, machinery, tools, appliances or equipment in, to or from the Property;
(x) for environmental remediation and rehabilitation;
(xi) in paying the fees, wages, salaries, travelling expenses and fringe benefits (whether or not required by Applicable Law) of all persons engaged in work with respect to and for the benefit of the Property, including but not limited to, all office administration costs in Serbia incurred by Temas;
(xii) in paying for the food, lodging and other reasonable needs of such persons and including all costs at prevailing charge out rates for any personnel or officers of the Operator who from time to time are engaged in work on the Property, such rates to be in accordance with industry standards;
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(xiii) payments to contractors or consultants for work done, services rendered or materials supplied;
(xiv) the cost of any non-refundable insurance premiums and performance bonds or other security;
(xv) all duties and taxes levied against or in respect of the Property, and for activities on the Property;
(xvi) in preparing engineering, geological, financial or marketing studies and reports and activities related thereto;

(xvii) in obtaining independent legal services directly relating to the Property; and

(xviii) a charge made by the Operator as described in Section 14.1(e);

(p) “ Facilities ” means all mines, plants and facilities including without limitation, all pits, shafts, haulage ways and other underground workings, mine dewatering or in situ leaching infrastructure, and all camps, buildings, plants, stockpiles, facilities and other structures, fixtures and improvements, and all other property, whether fixed or moveable, as the same may exist at any time, in or on the Property and relating to the conduct of exploration work on the Property or to the operation of the Property as a mine, or outside the Property if for the exclusive benefit of the Property only;
(q) “ Feasibility Report ” means a detailed report prepared in compliance with the standards set out in NI 43-101 as amended from time to time or any successors thereto, showing the feasibility of placing all or any part of the Property into Commercial Production at an acceptable rate of return on capital to the JV Participants, in such form and detail as is customarily required by institutional lenders of major financing for mining projects, and will include a reasonable assessment of the mineable ore reserves and their amenability to metallurgical treatment, a complete description of the work, equipment and supplies required to bring the Property into Commercial Production and the estimated cost thereof, a description of the mining methods to be employed and a financial appraisal of the proposed operations supported by detailed explanations of the information set out in Section 18.1;
(r)
“ First Milestone Date ” means September 25, 2023;
(s) “First Milestone Events” means (i) prepare an Elaborate of Resources/Reserves (a resource calculation with technical economic assessment) and CIM compliant preliminary economic assessment (PEA), (ii) receive Certification of Reserve, (iii) prepare feasibility study on mining of the mineral deposits, (iv) receive approval for content for an environmental impact assessment (EIA), (v) complete hydrological testing and study, and (vi) submit to the Ministry the feasibility study with request for approval for the exploitation field (or approval for exploitation);
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(t) “ Governmental Authority ” means any domestic or foreign government, whether federal, provincial, state or municipal, and any branch, department or ministry thereof, or any governmental agency, governmental authority, governmental tribunal, board or commission of any kind whatever;
(u) “ Hazardous Materials ” means any explosive, radioactive materials, asbestos material, urea formaldehyde, hydrocarbon contaminants, underground tanks, pollutants, contaminants, hazardous, corrosive or toxic substance or special waste of any kind, including without limitation, compounds known as chlorobiphenyls, and any substance the storage, manufacture, disposal, treatment, generation, use, transport, remediation or release into the environment of which is prohibited, regulated or licensed under any Environmental Laws;
(v) “ Interest ” means the undivided beneficial percentage interest of Temas prior to the Option Exercise Date or a JV Participant in the Assets and will be equal to its beneficial interest in the Property as determined pursuant to this Agreement;
(w) “ Joint Venture ” means the Joint Venture created by this Agreement on the Option Exercise Date among the JV Participants with respect to the Property;
(x) “ JV Company ” will mean a business entity which will hold the Property on the Option Exercise Date (which will be the Erin Subsidiary or another business entity to which the Property may be transferred in accordance with the terms of this Agreement);
(y) “ JV Participant ” means, after the Option Exercise Date, either Temas or the Optionors, as the context requires, and its successors and permitted assigns and “ JV Participants ” means collectively Temas and the Optionors and their successors and permitted assigns;
(z) “ Knowledge ” means the actual knowledge of the Optionors or Temas, as the case may be, and such knowledge that such Party would have after reasonable inquiry of its current employees, consultants and legal and tax advisors who would reasonably be expected to have knowledge of the relevant matter, and for purposes of determining Knowledge, Optionors’ Knowledge will be the knowledge of Tim Daniels, Biljana Rankić, Nenad Rakić, and Dusan Podunavac and Temas’ Knowledge will be the knowledge of Michael Dehn, Rory Kutluoglu, David Robinson, and Ryan Kuhn;
(aa) “ Leased Claims ” means the mining claims described in Schedule “A,” which are leased by the Optionors;
(bb) “ Letter of Intent ” means the letter of intent between Erin and Temas dated December 17, 2020;
(cc) “ LIBOR ” means, for any month, the 30 day London Inter-Bank Offered Rate on the first Business Day of that month;
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(dd) “ Mineral Products ” means minerals derived for the account of the individual JV Participants from operating the Property as a mine to which has been applied the least number of treatments or processes necessary to render the minerals into a substance or state for which there is a commercially significant market involving arm’s length sales or purchases between unrelated parties;
(ee) “ Monthly Average Boron Price ” means a mutually to be agreed upon price at a future date;
(ff) “ NI 43-101 ” means National Instrument 43-101 Standards of Disclosure for Mineral Projects ;
(gg) “ Operating Costs ” means, for any period after commencement of Commercial Production in respect of the Property, all costs, expenses, obligations, liabilities and charges of whatsoever kind or nature actually incurred or chargeable, directly by the Operator in connection with the operation of the Property as a mine during such period, which costs, expenses, obligations, liabilities and charges include, without duplication and without limiting the generality of the foregoing, the following:
(i) all costs of or related to the mining and concentrating of ores or other products and the operation of the Facilities and all costs of or related to marketing of Mineral Products including transportation, commissions and/or discounts,
(ii) all costs of or related to operating employee facilities, including housing,
(iii) all duties, charges, levies, royalties, taxes (excluding taxes levied on the income of the JV Participants) and other payments imposed by any Governmental Authority upon or in connection with operating the Property as a mine,
(iv) fees, wages, salaries, travelling expenses and fringe benefits (whether or not required by Applicable Law) of all persons directly engaged in respect of and for the benefit of the Property and all costs involved in paying for the food, lodging and other reasonable needs of such persons,
(v) a fee paid to the Operator in accordance with Section 14.1(e) for overhead charges,
(vi) all costs of consulting, legal, accounting, insurance and other services,
(vii) all exploration expenditures incurred after commencement of Commercial Production,
(viii) all capital costs of operating the Property as a mine including all costs of construction, equipment and mine development including maintenance, repairs and replacements, and any capital expenditures relating to an improvement, expansion, modernization or replacement of the Facilities,
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(ix) all costs for pollution control, reclamation costs and any other related costs incurred or to be incurred in connection with the operation of the Property as a mine including bonds or deposits for such costs required by any Governmental Authority,
(x) any costs or expenses incurred or to be incurred relating to the termination of the operation of the Property as a mine,
(xi) all costs of maintaining in good standing or renewing from time to time the Property and Assets or any interest therein, including payment of all government royalties and taxes of any nature whatsoever in connection therewith, and
(xii) all costs of depletion, depreciation and amortization of mineral property costs incurred prior to Commercial Production,

less the amount of all insurance recoveries and settlements received during such period to the extent such recoveries and settlements were not deducted in any previous period and, except where specific provision is made otherwise, all Operating Costs will be determined in accordance with generally accepted accounting principles pursuant to International Financial Reporting Standards applied consistently from year to year but such costs will not include any amount in respect of amortization of the Costs, depletion or depreciation, or any other non cash charges;

(hh) “ Operating Plan ” means a plan presented by the Operator pursuant to Section 21.2;
(ii) “ operating the Property as a mine ” or “ operation of the Property as a mine ” means any or all of the mining, milling, leaching, smelting, and refining of ores, minerals, metals or concentrates derived from the Property, and carried out on the Property, after commencement of Commercial Production;
(jj)
“ Operator ” means the Party acting as operator pursuant to this Agreement;
(kk) “ Option ” means the option granted to Temas by the Optionors pursuant to this Agreement;
(ll) “ Option Exercise Date ” means the date the Option is exercised pursuant to Section 3.3;
(mm) “ Option Period ” means the period commencing the Effective Date and ending on the Option Exercise Date;
(nn) “ Ore ” means all materials from the Property, the nature and composition of which, in the sole judgment of the Operator, justifies either:
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(i) mining or removing from place and shipping and selling such material, or delivering such material to a processing plant for physical or chemical treatment, or
(ii) leaching such material in place;
(oo) “ Other Tenements ” means all surface water, access and other non-mineral rights of and to any lands within or outside the Property including surface rights held in fee or under lease, licence, easement, right of way or other rights of any kind (and all renewals, extensions and amendments thereof or substitutions therefor) acquired by or on behalf of the JV Participants with respect to the Property;
(pp) “ Owned Claims ” means the mining claims described in Schedule “A,” which are owned by the Optionors;
(qq) “ Parties ” means all the parties to this Agreement, and a reference to a “ Party ” means one of them;
(rr) “ Person ” means an individual, corporation, partnership, body corporate, trust, joint venture or any other form of enterprise or legal entity or Governmental Authority;
(ss) “ Preliminary Economic Assessment ” has the meaning ascribed to that term in NI 43-101;
(tt) “ Product ” means:
(i) all Ore shipped and sold prior to treatment, and
(ii) all concentrates, precipitates and products produced by or for the Operator from Ore;
(uu) “ Production Program ” means any Program contemplating achievement of Commercial Production pursuant to a Preliminary Economic Assessment or a Feasibility Report;
(vv) “ Production Program Costs ” means all cash, outlays and expenses, obligations and liabilities of whatever kind or nature spent or incurred directly or indirectly by the JV Participants in connection with a Production Program in order to equip the Property for and to commence Commercial Production including working capital required for the initial four month operation of the Property as a mine or such longer period as may be reasonably justified in the circumstances, and including the fee the Operator is entitled to take pursuant to Section 14.1(e);
(ww) “ Production Program Overruns ” means all Production Program Costs which exceed those estimated under a Production Program;
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(xx) “ Program ” means, as the context requires:
(i) any program and budget to carry out work and incur Expenditures on the Property;
(ii) with respect to the Joint Venture, any program and budget to carry out work and incur Expenditures within the Property;
(iii) a document wherein there is specified in detail an outline of any and all research, prospecting and exploration and development work proposed to be carried out during such Program, the estimated Expenditures to be incurred in carrying out such work and the area of the Property on which such work is to be undertaken, including, without limitation, the following breakdown of costs: property acquisition, geological, geophysical and geochemical surveys, drilling, underground and other development work, acquisition of other rights in connection with the exploitation or development of the Property and the maintenance thereof, salaries, wages, travel expenses and housing costs of personnel to be employed in connection with the proposed Program, associated costs of running the proposed Program, consultants’ fees and contractors’ fees, if any, taxes, assessments, insurance and similar outlays, a description and estimate of all other outlays proposed to be incurred, or
(iv) the preparation of any Preliminary Economic Assessment or any Feasibility Report (including any associated engineering, metallurgical and other geologic studies) and the preparation of any Production Program;
(yy) “ Program Overruns ” means all Expenditures which exceed those estimated under a Program;
(zz) “ Property ” means the Owned Claims and the Leased Claims comprising the Piskanja Project and its contractual interest in the Jarandol Project with Kop Project both located in Serbia as more particularly described in Schedule ”A” hereto, together with the Other Tenements, surface rights, mineral rights, personal property, licenses and permits held by the Optionors and will include any renewal thereof and any other form of successor or substitute title thereto or tenure derived from such licenses, permits, surface rights, mineral rights, personal property and Other Tenements;
(aaa) “ Second Milestone Date ” means September 25, 2025;
(bbb) “Second Milestone Events” means (i) develop the mine and processing design plans, (ii) collect proof of the right of ownership or the right of use, lease and/or consent, or the right of easement for the surface where the construction of mining facilities and mining works, (iii) complete an environmental impact study, (iv) obtain approvals for construction of mining facilities and/or conducting the mining operations, and (v) complete any remaining fieldwork approved by the Technical Committee;
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(ccc) “ SEDAR ” means the System for Electronic Disclosure Analysis and Retrieval available at www.sedar.com;
(ddd) “ Shareholders’ Agreement ” has the meaning ascribed thereto in Section 10.1;
(eee) “ Stock Exchange ” means the primary stock exchange where the relevant Person’s common shares are listed;
(fff) “ Supplies ” means all tangible personal property of a non-capital nature (other than Mineral Products or Facilities) acquired or held by the JV Participants with respect to the Property, including, without limitation, drilling and sampling equipment;
(ggg) “ Technical Committee ” means a committee formed pursuant to Section 19;
(hhh) “ Temas Shares ” means common shares in the capital of Temas;
(iii) “ Temas Warrants ” means common share purchase warrants in the capital of Temas, each exercisable to acquire a Temas Share for a period of 48 months from issuance, at an exercise price equal to the market price of the Temas Shares on the Stock Exchange less the maximum allowable discount pursuant to Stock Exchange policies;
(jjj) “ Third Milestone Date ” means September 25, 2030; and
(kkk) “Third Milestone Events” means (i) construction of mining and processing facilities as per the government approved plans, (ii) obtain approval to operate the constructed facilities, (iii) obtain proof on the right of ownership or use, or easement for the surface on which the mining works shall be planned, and (iv) submit any mining design modifications 30 days prior to expiration of the Third Milestone Date if an extension is required.
1.2 For the purposes of this Agreement except as otherwise expressly provided herein:
(a) the words “herein”, “hereof”, and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Part, clause, subclause or other subdivision or Schedule;
(b) a reference to a Part means a Part of this Agreement and the symbol Section followed by a number or some combination of numbers and letters refers to the section, paragraph or Section of this Agreement so designated;
(c) the headings are for convenience only, do not form a part of this Agreement and are not intended to interpret, define or limit the scope, extent or intent of this Agreement or any of its provisions;
(d) the word “including”, when following a general statement, term or matter, is not to be construed as limiting such general statement, term or matter to the specific items or matters set forth or to similar items or matters (whether or not qualified by non
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limiting language such as “without limitation” or “but not limited to” or words of similar import) but rather as permitting the general statement or term to refer to all other items or matters that could reasonably fall within its possible scope;

(e) unless otherwise stated, a reference to currency means euros; and
(f) words importing the masculine gender include the feminine or neuter, words in the singular include the plural, words importing a corporate entity include individuals, and vice versa.

2. CONDITION PRECEDENT

2.1 This Agreement and the obligations of the Parties under it are subject to Temas being satisfied in its sole discretion that the Optionors have all permits, licences, certificates of authority, orders and approvals of, and have made all filings, applications and registrations with, applicable Governmental Authorities that have been and will be required in order to permit the Parties to carry out the purposes of this Agreement, and all such permits, licences, certificates of authority, orders and approvals are in good standing in all material respects.

3. OPTION

3.1 The Optionors hereby grant to Temas the sole and irrevocable right and option (the “ Option ”) to earn a maximum amount equal to a 50% Interest by:

(a) Temas issuing to Erin 250,000 Temas Shares and 250,000 Temas Warrants within five Business Days after the Effective Date; and
(b) subject to Section 38, Temas or Temas incurring an aggregate of €10,500,000 in Expenditures in accordance with Section 16.

3.2 The Temas Shares issued hereunder to Erin will be subject to such resale restrictions as are set forth under Applicable Law and share certificates representing such Temas Shares will bear all restrictive legends required under Applicable Law.

3.3 Upon Temas having complied with the provisions of Section 3.1, Temas will, without further act or payment, have and be deemed for all purposes to have exercised the Option and earned an undivided 50% legal and beneficial right, title and Interest in and to the Property, free and clear of all Encumbrances (the “ 50% Interest ”). As soon as practicable after the Option Exercise Date, but in any event not later than five days following the Option Exercise Date, the Optionors will apply for and complete the transfer of the 50% Interest to Temas.

3.4 Notwithstanding anything in this Agreement, Temas will, without further act or payment, have and be deemed for all purposes to have earned a 1% Interest in and to the Property, free and clear of all Encumbrances, for each €210,000 in Expenditures incurred during the Option Period (collectively, the “ Retained Interest ”). As soon as practicable after the termination of this Agreement for any reason whatsoever prior to the exercise of the Option, but in any event not later than five days following such date, the Optionors will apply for and complete the transfer of the

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Retained Interest to Temas. For clarity, nothing in this Section 3.4 will entitle Temas to earn more than an undivided 50% legal and beneficial right, title and Interest in and to the Property.

4. MILESTONE EVENTS

4.1 Each of the Parties hereto agrees to use its best efforts promptly to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to cause First Milestone Events to be completed as soon as practicable, and in any event no later than the First Milestone Date. Erin may terminate the Option by written notice to Temas if the First Milestone Events are not completed prior to the First Milestone Date (such termination being referred to herein as a “ First Milestone Termination ”). Provided that a First Milestone Termination is not a result of Temas’ breach of its obligations under Section 16, if the First Milestone Events are subsequently completed within 24 months following a First Milestone Termination, Erin and the Erin Subsidiary will use their best efforts promptly to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to cause the reinstatement of this Agreement and confirm that this Agreement is and shall be in full force and effect and binding upon each of them and their respective successors and assigns in accordance with its terms.

4.2 Each of the Parties hereto agrees to use its best efforts promptly to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to cause Second Milestone Events to be completed as soon as practicable, and in any event no later than the Second Milestone Date. Erin may terminate the Option by written notice to Temas if the Second Milestone Events are not completed prior to the Second Milestone Date (such termination being referred to herein as a “ Second Milestone Termination ”). Provided that a Second Milestone Termination is not a result of Temas’ breach of its obligations under Section 16, if the Second Milestone Events are subsequently completed within 24 months following a Second Milestone Termination, Erin and the Erin Subsidiary will use their best efforts promptly to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to cause the reinstatement of this Agreement and confirm that this Agreement is and shall be in full force and effect and binding upon each of them and their respective successors and assigns in accordance with its terms.

4.3 Each of the Parties hereto agrees to use its best efforts promptly to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to cause Third Milestone Events to be completed as soon as practicable, and in any event no later than the Third Milestone Date. Erin may terminate the Option by written notice to Temas if the Third Milestone Events are not completed prior to the Third Milestone Date (such termination being referred to herein as a “ Third Milestone Termination ”). Provided that a Third Milestone Termination is not a result of Temas’ breach of its obligations under Section 16, if the Third Milestone Events are subsequently completed within 24 months following a Third Milestone Termination, Erin and the Erin Subsidiary will use their best efforts promptly to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to cause the reinstatement of this Agreement and confirm that this Agreement is and shall be in full force and effect and binding upon each of them and their respective successors and assigns in accordance with its terms.

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5. MUTUAL REPRESENTATIONS AND WARRANTIES

5.1 Each of the Optionors represents to Temas, and Temas hereby represents and warrants to each of the Optionors:

(a) it is a company duly incorporated, organized and validly subsisting in good standing under the laws of its incorporating jurisdiction and, if so required, is or will be qualified to carry on business in the jurisdiction in which the Property is situated;
(b) it has full power and authority to carry on its business and to enter into and perform its obligations under this Agreement and any agreement or instrument referred to or contemplated by this Agreement;
(c) all necessary corporate approvals have been obtained and are in effect with respect to the transaction contemplated hereby, and no further action on the part of the directors is necessary to make this Agreement valid and binding on it;
(d) neither the execution and delivery of this Agreement nor any of the agreements referred to herein or contemplated hereby, nor the consummation of the transactions hereby contemplated conflict with, result in the breach of or accelerate the performance required by, any agreement to which it is a party;
(e) the execution and delivery of this Agreement and the agreements contemplated hereby will not violate or result in the breach of Applicable Law or of its constating documents; and
(f) there are no consents, approvals or conditions precedent to its performance under this Agreement which have not been obtained other than the approval of the Stock Exchange (which may require shareholder approval from Erin’s shareholders) on the part of each Erin and Temas, which each of Erin and Temas covenants and agrees to obtain as soon as reasonably possible.

6. REPRESENTATIONS AND WARRANTIES OF THE OPTIONORS

6.1 The Optionors jointly and severally represent and warrant to Temas that:
(a) the Erin Subsidiary does not have any shares or other equity interests issued and outstanding and no Person has any right, agreement, option or understanding, commitment or privilege capable of becoming an agreement for the purchase from Erin of any interest in or to any shares or other equity interests in the Erin Subsidiary;
(b) the Erin Subsidiary is qualified to acquire and dispose of interests in mining properties in Serbia;
(c) the Property is accurately described in Schedule ”A” attached hereto, is in good standing under Applicable Laws, is free and clear of all Encumbrances and, to the Optionors’ Knowledge, is not subject to any competing claims or claims against its
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validity by any Person except with respect to the contractual commitments regarding the Jarandol Project as disclosed in Schedule “A”;

(d) the Erin Subsidiary is the registered owner of the Owned Claims and (i) holds a 100% beneficial right, title and interest in and to the Owned Claims, subject only to the Applicable Laws and (ii) to the Optionors’ Knowledge, holds all permits, licenses, registrations and applications required to own the Owned Claims;
(e) the Erin Subsidiary is the lessee of the Leased Claims and (i) holds a valid lease in and to the Leased Claims, subject only to the Applicable Laws and the terms of the relevant lease instruments, and (ii) to the Optionors’ Knowledge, holds all permits, licenses, registrations and applications required to lease the Leased Claims;
(f) it has the exclusive right to enter into this Agreement and, subject to Applicable Law, all necessary authority to dispose of an interest in and to the Property in accordance with the terms of this Agreement;
(g) other than this Agreement and except with respect to the contractual commitments regarding the Jarandol Project as disclosed in Schedule “A”, the Optionors are not a party to any outstanding agreement, arrangement, commitment or understanding, oral or written, in relation to the Property or the sale of any Mineral Products to be extracted from the Property, nor to the Optionors’ Knowledge, information and belief have any third parties, including the Erin Subsidiary’s predecessors in beneficial title to the Property, entered into any outstanding agreement, arrangement, commitment or understanding, whether oral or written, in relation to the Property or the sale of any Mineral Products to be extracted from the Property;
(h) except with respect to the contractual commitments regarding the Jarandol Project as disclosed in Schedule “A”, no Person has any proprietary or possessory interest in the Property other than the applicable Governmental Authorities in Serbia and Temas hereunder;
(i) except with respect to the contractual commitments regarding the Jarandol Project as disclosed in Schedule “A”,to the Optionors’ Knowledge, no Person is entitled to any royalty or other payment in the nature of rent or royalty in respect of the Property;
(j) any claims, including both patented and unpatented mining claims, which comprise the Property were properly located and denounced, and all required location and validation was properly performed;
(k) all assessment work, claim maintenance fees and tax payments required for the Erin Subsidiary to hold the Property has been timely performed and paid up to and including the Effective Date;
(l) all affidavits of assessment work and other filings required to maintain the Property in good standing have been properly and timely recorded and filed with the appropriate Governmental Authority;
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(m) except with respect to the contractual commitments regarding the Jarandol Project as disclosed in Schedule “A”, its interest in the Property is free and clear of any Encumbrance or other claims of any description and no Person has any right, agreement, option or understanding, commitment or privilege capable of becoming an agreement for the purchase from it of any interest in or to the Property;
(n) there is no adverse claim against or challenge to the Erin Subsidiary’s beneficial ownership of or title to the Property, nor to the Optionors’ Knowledge, information and belief, is there any basis therefor;
(o) there has been no act or omission by either the Erin Subsidiary or, to the Optionors’ Knowledge, information and belief, any of its predecessors in beneficial interest or title to the Property which could by notice, or lapse of time, or by both notice and lapse of time, result in a breach, termination, abandonment, forfeiture, relinquishment or other premature termination of the Erin Subsidiary’s rights or title to the Property;
(p) the Erin Subsidiary has all permits, licences, certificates of authority, orders and approvals of, and has made all filings, applications and registrations with, applicable Governmental Authorities that have been and will be required in order to permit the Parties to carry out the purposes of this Agreement, and all such all permits, licences, certificates of authority, orders and approvals will be in good standing in all material respects;
(q) to the Optionors’ Knowledge, except with respect to the contractual commitments regarding the Jarandol Project as disclosed in Schedule “A”, the Erin Subsidiary has the sole and exclusive right and authority to permit Temas access to and the right to enter upon the Property;
(r) neither the Erin Subsidiary nor, to the Optionors’ Knowledge, information and belief, any of its predecessors in interest or title to the Property has granted any person, other than Temas, access to, or the right to conduct operations on the Property, other than access or rights which have expired prior to the date of this Agreement;
(s) there is no public or private litigation, arbitration, proceeding or other governmental investigation pending or threatened involving the Property which may materially and adversely affect the Property or the interests of it therein or which seeks to or would, if successful, prevent, restrain or prohibit any of the transactions contemplated herein;
(t) to the Optionors’ Knowledge, the conditions existing on or related to the Property are, and its ownership of and operations in respect of the Property have been and continue to be, in compliance with, and are not in violation of, any Applicable Laws (including without limitation any Environmental Laws), nor are they causing or permitting any damage (including Environmental Damage, as defined below) or
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impairment to the health, safety, or enjoyment of any person at or on the Property or in the general vicinity of the Property;

(u) there have been no past violations by it or, to the Optionors’ Knowledge, by any of its predecessors in title of any Environmental Laws or other Applicable Laws affecting or pertaining to the Property, nor any past creation of damage or threatened damage to the air, soil, surface waters, ground water, flora, fauna, or other natural resources on, about or in the general vicinity of the Property (“ Environmental Damage ”);
(v) to the extent there are liabilities arising from mineral exploration or mining activities conducted on the Property while the Optionors have held the Property, Temas is not responsible for such liabilities;
(w) to the Optionors’ Knowledge, no Hazardous Materials or other materials used in or generated by the use of the Property have been or are currently placed, used, stored, treated, manufactured, disposed of, released, discharged, spilled or emitted in material violation of any Environmental Laws;
(x) there is no agreement or consent order to which it is a party relating to any environmental matter relating to any of the Property and to the Optionors’ Knowledge, no such agreement is necessary for the continued compliance with Environmental Laws;
(y) there have been no orders issued or, to the Optionors’ Knowledge, threatened and no investigations conducted, taken or threatened under or pursuant to Environmental Laws with respect to the Property. To the Optionors’ Knowledge, there are no circumstances or events that have any reasonable prospect of resulting in any claim, action or other proceeding with respect to Environmental Damage or in an order or investigation under any Environmental Laws with respect to the Property;
(z) it has not received inquiry from or notice of a pending investigation from any Governmental Authority or of any administrative or judicial proceeding concerning the violation of any Applicable Laws or Environmental Laws;
(aa) there are no outstanding orders or directions relating to environmental matters requiring any work, repairs, construction or capital expenditures with respect to the Property and the conduct of the operations related thereto, it has not received any notice of the same and, to the Optionors’ Knowledge, there is not any basis on which any such orders or direction could be made;
(bb) all previous work done by it or any Associated Companies or Affiliates and, to the Optionors’ Knowledge, any parties authorized by it or its Associated Companies or Affiliates has been in accordance with Applicable Laws and Environmental Laws at the relevant time and sound mining, environmental and business practices;
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(cc) all filings, payments and recordings required to be made with any Governmental Authority to maintain the Property in good standing have been made and all work requirements to be met to maintain the Property in good standing have been met and, to the Optionors’ Knowledge, no default has been alleged in respect thereto;
(dd) to the Optionors’ Knowledge, there are no requirements or restrictions under any Applicable Laws or issued by any Governmental Authority which could materially and adversely affect the ability of Temas or the Joint Venture to conduct operations on the Property as Temas by this Agreement;
(ee) to the Optionors’ Knowledge, there are no material facts or circumstances not disclosed in writing to Temas which could materially and adversely affect the ability of Temas or the Joint Venture to conduct operations on the Property as contemplated by this Agreement; and
(ff) it has delivered or made available to Temas all material information concerning the Property in its and the Erin Subsidiary’s possession or control and, to the Optionors’ Knowledge, there is no material fact or circumstance which has not been disclosed to Temas which should be disclosed in order to prevent the representations and warranties in this section from being misleading or which may be material in Temas’s decision to enter into this Agreement and acquire an interest in the Property.

6.2 The representations and warranties contained in Section 6 are provided for the exclusive benefit of Temas and a misrepresentation or breach of warranty may be waived by Temas in whole or in part at any time without prejudice to its rights in respect of any other misrepresentation or breach of the same or any other representation or warranty.

6.3 The parties acknowledge and agree that the representations and warranties contained in Section 6 will not merge with any deed, conveyance, transfer instrument or other agreement giving effect to this Agreement and will survive the execution of this Agreement.

7. REPRESENTATIONS AND WARRANTIES OF TEMAS

7.1 Temas represents and warrants to the Optionors that:
(a) as at the Effective Date and to Temas’s Knowledge, all the information contained under Temas’s SEDAR profile is (i) true and correct, (ii) contains no misrepresentations, (iii) constitutes full and plain disclosure of all material facts relating to Temas and (iv) complies in all material respects with Applicable Law; and
(b) to Temas’s Knowledge, there is no material fact or circumstance which has not been disclosed to Erin which should be disclosed in order to prevent the representations and warranties in this section from being misleading or which may be material in the Optionors’ decision to enter into this Agreement and grant the Option.
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7.2 Temas further represents and warrants to the Optionors that at the time of delivery to Erin of any Temas Shares:

(a) Temas will be a reporting issuer under the Securities Act (British Columbia) and will not be listed on the list of reporting issuers in default of any requirement of such Act or the regulations made thereunder as maintained by the British Columbia Securities Commission;
(b) such Temas Shares will be duly authorized and validly allotted and issued as fully paid and non-assessable free of Encumbrances;
(c) every consent, approval, authorization, order or agreement of the Stock Exchange that is required for the issuance of such Temas Shares and the delivery to Erin of a certificate or certificates representing such Temas Shares to be valid will have been obtained; and
(d) such Temas Shares will be part of a class of shares of Temas that is listed and posted for trading on the Stock Exchange (or the Toronto Stock Exchange or such other stock exchange as the Parties may agree) and will have been approved and reserved for listing on such exchange, subject only to fulfillment of the requirements of such exchange relating to listing of additional shares of a listed class or series of shares.

7.3 The representations and warranties contained in Section 7.1 are provided for the exclusive benefit of the Optionors and a misrepresentation or breach of warranty may be waived by the Optionors in whole or in part at any time without prejudice to its rights in respect of any other misrepresentation or breach of the same or any other representation or warranty.

7.4 The parties acknowledge and agree that the representations and warranties contained in Section 7.1 will not merge with any deed, conveyance, transfer instrument or other agreement giving effect to this Agreement and will survive the execution of this Agreement.

8. COVENANTS OF THE PARTIES

8.1 During the Option Period:
(a) each of the Optionors covenants and agrees with Temas to:
- (i) not do any act or thing which would in any way adversely affect the rights of Temas hereunder. Without limiting the generality of the foregoing, this would include a covenant and agreement of each of the Optionors with Temas to:
  - (1) not issue any additional shares or other equity interests of the Erin Subsidiary;
  - (2) not issue any right, option or privilege, or enter into any agreement, understanding or commitment, capable of being an agreement for
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the purchase of any interest in or to the Property or any shares or other equity interests in the Erin Subsidiary;

(3) not take any action which could result in an Encumbrance against the Property or the loss of any permit, license, registration or application required to hold the Property; and
(4) not grant any royalty or other payment in the nature of rent or royalty on any Ore or Product;
(ii) make available to Temas and its representatives all records and files in its possession relating to the Property and permit Temas and its representatives, at their own expense, to take abstracts therefrom and make copies thereof;
(iii) co-operate as reasonably necessary with Temas to assist Temas in obtaining any surface, water or other rights on or related to the Property;
(iv) promptly provide Temas with any and all notices and correspondence received by it from Governmental Authorities in respect of the Property; and
(v) to the extent possible under Applicable Law, record or otherwise give notice of this Agreement as necessary to protect the rights of Temas hereunder from third parties.

8.2 If this Agreement is terminated for any reason whatsoever prior to the exercise of the Option, Temas will be entitled to retain the Retained Interest and this Agreement, including the Option, but excluding this Section Error! Reference source not found. (which will continue in full force and effect for so long as is required to give full effect to the same) will be of no further force and effect except that Temas:

(a) leave the Property:
(i) in good standing under Applicable Law for a period of at least 90 days from the date of termination of this Agreement,
(ii) free and clear of all liens, charges and encumbrances arising from this Agreement or its operations hereunder, and
(iii) in a condition which is in compliance with all Applicable Laws with respect to the reclamation and restoration of the Property required as a result of the work by Temas thereon;
(b) to the extent permitted by Applicable Law if Temas or any of its Affiliates has a drill permit for the Property then Temas will (or will cause its Affiliate as the case may be) to transfer such drill permit to the Erin Subsidiary or to such Affiliate of Erin as Erin may direct;
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(c) deliver to Erin, within 120 days of termination, a final report on all work carried out by Temas on the Property (limited to factual matters only and only to the extent such work has not already been reported to Erin by Temas) together with copies of all sample location maps, drillhole assay logs, assay results and other technical data compiled by Temas with respect to work on the Property not previously delivered to Erin and make available to Erin, at the place of storage, all drill core produced by Temas from the Property; and
(d) have the right to remove from the Property, within 12 months of the effective date of termination, all Supplies and Facilities erected, installed or brought upon the Property by or at the instance of Temas or its Affiliates, provided that any such Supplies and Facilities not removed by Temas will thereupon become the property of the Optionors unless Erin can prove that the Supplies and Facilities purchased/erected are as a result of the €210,000 Expenditures paid by Temas resulting in 1% Retained Interest in which case such Supplies and Facilities shall remain property of the Erin Subsidiary.

9. OPTION ONLY

9.1 Temas’ issuance of Temas Shares and Temas Warrants to Erin under Section 3.1(a) and incurring of Expenditures under Section 3.1(b), all in respect of the Option (collectively, the “ Option Requirements ”), are optional at Temas’s and Temas’s sole discretion, and Temas and Temas are not obligated to complete any of the Option Requirements.

9.2 At any time prior to the exercise of the Option, Temas will have the right to terminate this Agreement and the Option by giving 30 days’ written notice to that effect to the Optionors.

10. JV COMPANY

10.1 During the Option Period, Temas and Erin will:
(a) use their good faith best efforts to construct the Joint Venture, with the activities of the Joint Venture conducted through the JV Company. Upon formation and organization of the JV Company, this Agreement will be replaced with an operating or shareholders’ agreement (the “ Shareholders’ Agreement ”), the terms of which will not be inconsistent with the terms of this Agreement, provided that if for any reason the Shareholders’ Agreement is not settled, executed and delivered, this Agreement will remain binding on the Parties and will continue to govern their relationship and operations on the Property; and
(b) negotiate in good faith how the Interests of Temas and Erin and dilution on a going forward basis will be reflected in their respective ownership interests in the JV Company (which will not be inconsistent with the terms of this Agreement).

Temas and Erin will each pay their own costs associated with the incorporation and organizational costs of the JV Company (if a new JV Company is to be created) as well as the negotiation of the

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Shareholders’ Agreement. Upon the formation of a new JV Company, the Parties agree to do all things necessary to transfer or assign the Property to JV Company to the maximum extent permitted by Applicable Law and in accordance with the recommendations from the Parties’ respective tax, legal and other advisors, to minimize taxes payable in consequence of the transfer or assignment.

11. ASSOCIATION OF JV PARTICIPANTS

11.1 On the Option Exercise Date, the Joint Venture will be formed and Erin and Temas will become associated as joint venturers under this Agreement for the following limited functions and purposes:

(a) to carry out work on the Property in accordance with the terms of this Agreement;
(b) to further explore and, if deemed warranted, to develop the Property, to obtain one or more exploration concessions, mining or exploitation leases or licences in respect thereof and equip all or part thereof for Commercial Production;
(c) to operate the Property or any portion thereof as a mine; and
(d) to engage in such other activity as may be considered by the JV Participants to be necessary or desirable in connection with the foregoing.

11.2 After the Option Exercise Date, all transactions, contracts, employments, purchases, operations, negotiations with third parties and any other matter or act undertaken on behalf of the JV Participants in connection with the Assets will be done, transacted, undertaken or performed in the name of the Operator in trust for the JV Participants only, and no JV Participant will do, transact, perform or undertake anything in the name of the other JV Participants or in the joint names of the JV Participants.

11.3 After the Option Exercise Date, the rights and obligations of the JV Participants will be, in each case, several, and will not be or be construed to be either joint or joint and several. Nothing contained in this Agreement will, except to the extent specifically authorized hereunder, be deemed to constitute a JV Participant, a partner, an agent or legal representative of any other JV Participant. It is intended that this Agreement will not create the relationship of a partnership between the JV Participants and that no act done by any JV Participant pursuant to the provisions hereof will operate to create such a relationship.

11.4 Except as otherwise expressly set out herein, after the Option Exercise Date, each JV Participant will be solely liable for its Cost Share of Costs and any other costs associated with the exploration, development or operation of the Property at such time as the liability is incurred by the Operator. After the Option Exercise Date, each JV Participant will be solely liable for its Cost Share of any debts, liabilities or obligations arising from operations hereunder if approved by the Technical Committee or otherwise authorized hereunder.

11.5 Each JV Participant, in proportion to its Interest, will indemnify and hold harmless the other JV Participant from any claim of or liability to any third person asserted upon the ground

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that any action taken under this Agreement has resulted in or will result in any loss or damage to such third person, to the extent, but only to the extent, that such claim or liability is paid by such other JV Participant in an amount in excess of such other JV Participant’s Interests.

11.6 Each JV Participant will devote such time as may be required to fulfil any obligation assumed by it hereunder but, except for the JV Participants’ respective obligations hereunder in relation to the Property in connection with the Joint Venture affecting the Property and subject to the requirements of Section 45:

(a) each JV Participant will be at liberty to engage in any other business or activity outside the Joint Venture constituted hereby, including the ownership and operation of any other mining permits, licenses, claims and leases;
(b) no JV Participant will be under any fiduciary or other obligation to any other JV Participant which will prevent or impede such JV Participant from participating in, or enjoying the benefits of, competing endeavours of a nature similar to the business or activity undertaken by the JV Participants hereunder; and
(c) the legal doctrines of “corporate opportunity” or “business opportunity” sometimes applied to persons occupying a relationship similar to that of the JV Participants will not apply with respect to participation by any JV Participant in any business activity or endeavour outside the Joint Venture constituted hereby, and, without implied limitation, a JV Participant will not be accountable to any other JV Participant for participation in any such business activity or endeavour outside the Joint Venture constituted hereby which is in direct competition with the business or activity undertaken by the Joint Venture.

12. INTEREST OF JV PARTICIPANTS

12.1 The JV Participants will have such Interest as is determined from time to time in accordance with Sections 12.3 and 12.4.

12.2 The JV Participants will, on the Option Exercise Date, be deemed to have the following respective Interests in the Property and initial deemed Expenditures as at the Option Exercise Date:

JV Participant	Interest	Deemed Expenditures
Temas	50%	€10,500,000
Erin Subsidiary	50%	€10,500,000

12.3 For the purposes of Sections 17.6, 17.8, 18.2 and 18.8 the percentage level of each JV Participant’s Interest in the Property will be adjusted from time to time as being equal to the product obtained by multiplying 100% by a fraction of which the numerator is the amount of such JV Participant’s contributions or deemed contributions to Costs on the Property since the Option Exercise Date, plus the deemed Expenditures calculated pursuant to Section 12.2 for such JV Participant and the denominator of which is the amount of all contributions or deemed

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contributions to the Costs by all JV Participants since the Option Exercise Date plus the aggregate deemed Expenditures calculated pursuant to Section 12.2 for all JV Participants.

12.4 The percentage level of the respective Interests of the JV Participants in the Property will not change so long as each JV Participant contributes its respective Cost Share of every Program and any Production Program as set out in Sections 16 and 18. After the Option Exercise Date, at any time and from time to time after a JV Participant has first elected or is deemed to have elected not to contribute its Cost Share to a Program or Production Program or loses its right to contribute to Programs or any Production Program, the percentage level of such JV Participant’s Interest in the Property will be adjusted in accordance with the formula set out in Section 12.3.

12.5 If as a result of an adjustment pursuant to Sections 12.3 and 12.4 a JV Participant’s Interest in the Property is reduced to under 10%, the Interest of such JV Participant (the “ Diluted JV Participant ”) in the Property will be deemed to be transferred to the other JV Participant (the “ Remaining JV Participant ”) and thereafter the Diluted JV Participant will be deemed not to be a JV Participant but in consideration of such transfer will be entitled to receive, and the Remaining JV Participant will pay to it, at the election of the Remaining JV Participant, a 2% net smelter returns royalty or a 10% net profits interest royalty (the “ Royalty ”). Upon such transfer the Diluted JV Participant will forthwith execute and deliver to the Remaining JV Participant all such documents as may, in the opinion of legal counsel for the Remaining JV Participant, be necessary to transfer to the Remaining JV Participant all Interest of the Diluted JV Participant, subject to the execution by the Diluted JV Participant and the Remaining JV Participant of a binding agreement in respect of the Royalty. The remaining JV Participant will not transfer any of its interest in the Property without first causing the transferee to assume the obligation of the Royalty.

12.6 If the Interest of any JV Participant in the Property is converted to a Royalty pursuant to Section 12.5, any decision thereafter to place the Property into Commercial Production will be at the sole discretion of the Remaining JV Participant and the Remaining JV Participant will be under no obligation and nothing in this Agreement will be construed as creating an obligation upon the Remaining JV Participant to place the Property into Commercial Production and if the Remaining JV Participant commences the operation of the Property as a mine, the Remaining JV Participant will have the unfettered right to suspend or curtail any such operation from time to time as it, in its sole discretion, may deem advisable.

13. OPERATOR

13.1 Subject to the right of the Technical Committee to change or appoint the Operator under Section 20.1 and to the Technical Committee’s general direction and control, (a) until the Option Exercise Date, the Erin Subsidiary will act as the initial Operator under this Agreement with respect to the Property, and (b) after the Option Exercise Date, Temas will have the right to act as Operator under this Agreement with respect to the Property.

13.2 The JV Participant acting as Operator may resign as Operator at any time by giving 120 days’ prior written notice to the other JV Participant and within such 120-day period the Technical Committee will appoint the other JV Participant to act as the Operator upon the terms set out in this Agreement.

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13.3 If the Interest of a JV Participant in the Property is diluted from above 50% to 50% or below 50% pursuant to Section 12, the right of such JV Participant to act as Operator for the Property will cease.

13.4 After the Option Exercise Date, title to any of the Assets held by the Operator, or a JV Participant, will be held by the Operator, or such JV Participant in trust for the JV Participants in accordance with their respective Interests, subject to the terms of this Agreement.

13.5 The Operator will be deemed to have offered to resign, which offer will be accepted, if at all, within 60 days following such deemed offer upon the occurrence of any of the following events:

(a) if an attachment in respect to any material liability of the Operator is made on the Property which is not related to the business of the Joint Venture,
(b) if the Operator:
(i) admits in writing its inability to pay its debts as they become due other than indebtedness (“ non-recourse financing ”) for money borrowed or guaranteed where the recourse of the holder thereof is restricted to realization upon specific assets none of which consist of any Interest, and where failure to pay the indebtedness does not result in the creation of an unsecured obligation of the Operator,
(ii) makes an assignment for the benefit of creditors,
(iii) consents to the appointment of a receiver (other than a receiver appointed under non-recourse financing) for all or a substantial part of its assets,
(iv) files a petition in bankruptcy or for a reorganization or an arrangement under applicable bankruptcy, insolvency or creditors’ relief laws, or otherwise seeks the relief therein provided, or
(v) is adjudicated bankrupt or insolvent, or
(c) if a Court order is pronounced in respect of the Operator, appointing a receiver or trustee for all or a substantial part of its property (except for property, other than the Property, securing non-recourse financing), or approving a petition in bankruptcy or for a reorganization under applicable bankruptcy, insolvency or creditors’ relief laws or for any judicial modification or alteration of the rights of creditors; or
(d) the Operator materially defaults in any of its obligation under this Agreement and fails to cure or dispute such default after having been given 30 days’ notice in writing to do so by a JV Participant stipulating the default and the steps required to cure such default.
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13.6 Upon ceasing to be Operator, the former Operator will forthwith deliver to its successor all Assets, books, records and other property both real and personal relating to this Agreement or its role as Operator under this Agreement. The former Operator will use its best efforts to transfer to its successor, as of the effective date of the former Operator’s resignation or removal, its rights and obligations, if any, as Operator under all contracts relating to the Assets, and pending such transfer and in relations to all other contracts relating to the Assets, the former Operator will hold its right and interest as Operator from the date of resignation or removal for the account and to the order of the new Operator.

13.7 As soon as practicable after the effective date of resignation or removal of the Operator the Technical Committee will have the accounts of the Operator relating to the Assets audited by an independent auditor (who may be the auditor of a JV Participant), and will conduct an inventory of all Assets and such inventory will be used in the return of and the accounting for the Assets by the Operator who has resigned or has been removed. All costs and expenses incurred in connection with such audit and inventory will be deemed to be Costs.

13.8 The Operator will not act or hold itself out as agent for any of the JV Participants nor make any commitments on their individual behalf unless specifically permitted by this Agreement or directed in writing by a JV Participant.

14. POWER AND AUTHORITY OF OPERATOR

14.1 Subject to the control and direction of the Technical Committee, the Operator will have full right, power and authority to do everything necessary or desirable in accordance with good mining practice in Serbia in connection with the exploration and development of the Property and to determine the manner of operation of the Property as a mine, including and without limiting the generality of the foregoing, the right, power and authority to:

(a) prepare and present to the Technical Committee for approval Programs, any Preliminary Economic Assessment, Production Programs, any Feasibility Report and Operating Plans in respect of the Property, as applicable;
(b) implement any Program in accordance with Section 16 and any Production Program in accordance with a Feasibility Report approved by the JV Participants in accordance with Section 18 and any Operating Plan in accordance with Section 21;
(c) regulate access to the Property subject to the right of the JV Participants to have reasonable access to the Property at all times;
(d) employ and engage such employees, agents, and independent contractors as it may consider necessary or advisable to carry out its duties and obligations hereunder and in this connection to delegate any of its powers and rights to perform its duties and obligations hereunder, but the Operator will not enter into contractual relationships with an Associated Company or an Affiliate except on terms which are commercially competitive and are unanimously agreed to in writing by all JV Participants; and
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(e) charge the JV Participants a reasonable fee for overhead costs which will cover all costs of the Operator other than the direct chargeout rates for any personnel or officers of the Operator who from time to time are engaged directly in work on the Property and charged to the Joint Venture, which fee for costs will initially be equal to the aggregate of:
(i) 7% of all Expenditures other than the fee payable to the Operator under this Section,
(ii) 1% of all other Production Program Costs, and
(iii) 2% of all other Operating Costs,

on the basis that such fee will be reviewed annually by the Technical Committee to ensure that the Operator is reimbursed its actual costs for acting as such but neither profits nor loses as a result of charging such fee. Such fee will not be charged in respect of legal services provided to the JV Company.

15. DUTIES AND OBLIGATIONS OF THE OPERATOR

15.1 The Operator will have such duties and obligations as the Technical Committee may from time to time determine including, without limiting the generality of the foregoing, the following duties and obligations:

(a) to propose to the Technical Committee and, if approved, to implement Programs, the Production Program and Operating Plans;
(b) to manage, direct and control all exploration, development and producing operations in and under the Property, in a careful, prudent and workmanlike manner, and in compliance with Applicable Laws;
(c) to prepare and deliver to the JV Participants during periods of active field work monthly progress reports of the work in progress in such form as the Technical Committee may direct which include statements of Costs and comparisons of such Costs to the approved Programs or Production Program and comprehensive annual reports on or before February 28 of each year covering the activities hereunder and results obtained during the calendar year ending on December 31 immediately preceding and timely current reports and information on any material results obtained together with such other reports as any JV Participant may reasonably request;
(d) to account to the JV Participants for all contributions to Costs and to use all reasonable efforts to limit or curtail Program Overruns or Production Program Overruns;
(e) to maintain true and correct books, accounts and records of operations hereunder in accordance with generally accepted accounting principles in accordance with International Financial Reporting Standards, applied consistently from year to year;
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(f) to permit representatives of the JV Participants duly authorized in writing, such authorization not to be unreasonably withheld, at their own risk and expense, upon reasonable notice, to inspect and have access to the Property and all data derived from carrying out work thereon including reasonable access to make copies of such data, take abstracts from or audit all maps, drill logs, core tests, reports, surveys, assays, analyses, production reports, operations, technical, accounting and financial records, including any or all of the records and accounts referred to in Section 15.1(e) that have been prepared exclusively in respect of operations hereunder, during normal business hours;
(g) to perform its duties and obligations in a manner consistent with good exploration and mining practices; and
(h) to transact, undertake and perform all transactions, contracts, employments, purchases, operations, negotiations with third parties and any other matter or thing undertaken on behalf of the JV Participants in the Operator’s name in trust for the JV Participants.

16. PROGRAMS DURING OPTION PERIOD

16.1 During the Option Period, Expenditures will (a) be funded 100% by Temas and/or a Temas affiliate, and (b) only be incurred under and pursuant to Programs prepared by the Operator and approved by the Technical Committee as provided in this section.

16.2 During the Option Period, based upon the Programs submitted to and approved by the Technical Committee, the Operator will submit to Temas on or before the 15th day of each month an estimate of the cash requirements for the month commencing 45 days after such date (such month being the “ Subject Month ”) which will show the Expenditures which Temas will be required to make in the Subject Month. At least 15 days prior to the commencement of the Subject Month, Temas will remit to the Operator the amount of such Expenditures.

16.3 If Temas fails to timely comply with any of the provisions in Section 3.1 and Section 16.2, Erin will deliver notice to Temas specifying the nature of such failure. If Temas does not rectify such failure within 60 days of the receipt of such notice, then Erin may terminate the Option by written notice to Temas.

16.4 Funding of Expenditures will be confirmed as follows:

(a) During the Option Period, an itemized statement of aggregate Expenditures funded in any applicable quarterly-annual period (the “ Expenditures Statement ”), certified to be correct by an officer of Erin, will be provided quarterly and will be conclusive evidence of the funding of such Expenditures recorded in the Expenditures Statement unless within the 30 days after receipt of that Expenditures Statement Temas delivers a written and detailed objection to the Expenditures Statement to Erin. If Temas delivers such an objection, then Erin will within 30 days of such objection provide Temas with the report, but not the working papers, of its external auditor with respect to the Expenditures.
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(b) If Temas is not satisfied with Erin’s audit report contemplated in Section 16.4(a) then Temas may, within 15 days of receipt of such audit report, request by notice to Erin (the “ Audit Right Notice ”) that the Expenditures contemplated in the respective Expenditures Statement be fully audited by an independent accounting firm to be agreed upon by the Parties, which will be one of the Designated Accounting Firms or such other accounting firm as the Parties may agree to (together, the “ Independent Auditor ”). The Parties will have 30 days from the date of the Audit Right Notice to settle on and engage the Independent Auditor. If the Parties cannot decide on the Independent Auditor within such 30 day period then the Independent Auditor will be chosen pursuant to the procedure set out in Section 16.4(c).
(c) If the Parties are unable to agree on the Independent Auditor as contemplated in Section 16.4(b), Temas will nominate in writing three proposed accounting firms to act as Independent Auditor and will notify Erin of such nominees. Erin will, within five days after receiving such notice, either choose one of the three accounting firms nominated by Temas or recommend three nominees of its own. All nominees for Independent Auditor must be (i) prepared to act, (ii) independent of both Erin and Temas and (iii) qualified to act as an auditor in Canada under Applicable Laws. If Temas fails to choose one of Erin’s nominees then all six names will be placed into a hat and one name will be randomly chosen (the “ Draw ”) by legal counsel for Temas and that nominee will be the Independent Auditor. The Draw will be conducted in Vancouver, British Columbia unless otherwise agreed to by the Parties.
(d) At the conclusion of the audit contemplated in Section 16.4(b):
(i) if the Independent Auditor determines that the Expenditures Statement did not overstate Expenditures actually funded by greater than a 5% margin or that the Expenditures Statement understated the amount of aggregate Expenditures funded, then the cost of the audit will be borne by Temas. If the Independent Auditor determines that the Expenditure Statement understated the amount of aggregate Expenditures funded, then the Actual Expenditures will constitute aggregate Expenditures for the purposes of this Agreement as; or
(ii) if the Independent Auditor determines that the Expenditures Statement overstated Expenditures actually funded by greater than a 5% margin, then the costs of the audit will be borne by Erin. If the overstatement results in a deficiency in the amount of aggregate Expenditures obliged to be completed under this Agreement, then Erin must pay to Temas, within 30 days after such determination, the amount equal to the shortfall (the “ Shortfall ”) in aggregate Expenditures and such payment of the Shortfall will be deemed to be a payment of cash in lieu of aggregate Expenditures in advance of the relevant due date specified in such relevant section, and the actual Expenditures so determined, plus such payment of cash in lieu of aggregate Expenditures, will constitute the aggregate Expenditures for the
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purposes of this Agreement. This shall only be applicable to an overstatement determination if an audit were to occur at the end of the Option Exercise Period in connection with confirmation that Temas’ obligations to satisfy Section 3.1’s Option grant has been fulfilled.

16.5 Despite anything in this Agreement to the contrary, the Independent Auditor’s determination of aggregate Expenditures will be final and determinative of the amounts stated in the statement in question. If an objection under Section 16.3 is delivered by Erin which relates to whether the Option has been exercised and an audit is conducted, the effective date of the exercise of the Option will be designated by the Independent Auditor.

17. PROGRAMS AFTER OPTION EXERCISE DATE

17.1 After the Option Exercise Date, Expenditures will (a) be funded jointly by the JV Participants, and (b) only be incurred under and pursuant to Programs prepared by the Operator and approved by the Technical Committee as provided in this section. Any Feasibility Report will be prepared pursuant to a separate Program.

17.2 Forthwith after the Effective Date and within 90 days after the completion of a previous Program or, subject to the rights of the JV Participant other than the Operator (the “ non-Operator ”) to present a Program as set out below, on or before November 15 each year if no Program has been approved or completed in that year, the Operator will prepare and submit to the Technical Committee a Program proposed by the Operator for the following year. If in any year the Operator fails to submit a Program in accordance with this Section, the non-Operator will have the right to prepare and submit a Program in its stead and the provisions of this section will apply, mutatis mutandis, to such Program. If the JV Participant acting as Operator elects or is deemed to have elected not to contribute to the Program presented by the non-Operator in accordance with this section, the Technical Committee will be deemed to have approved such Program and to have appointed the non-Operator who presented such Program as Operator.

17.3 Within 60 days of the approval of a Program by the Technical Committee, each JV Participant will give written notice to the Operator stating whether or not it elects to contribute its Cost Share of such Program. Failure to give notice pursuant to this Section within such 60-day period will be deemed to be an election by a JV Participant not to contribute its Cost Share of such Program.

17.4 If a JV Participant (the “ Non-Contributing JV Participant ”) elects or is deemed to have elected not to contribute its Cost Share of a Program approved by the Technical Committee pursuant to Section 17.3 the remaining JV Participant (the “ Contributing JV Participant ”) may give notice in writing to the Operator that such Contributing JV Participant will contribute all Expenditures to be incurred under or pursuant to such Program. If at least 80% of the budgeted Expenditures in respect of such Program are incurred, the JV Participants’ respective Interests will thereafter be adjusted in accordance with Section 12.3. If less than 80% of the budgeted Expenditures in respect of such Program are incurred, the Interests of the JV Participants will not be adjusted unless notice is first given by the Operator to the Non-Contributing JV Participant that the Program was abated together with notice of the amount of the actual Expenditures incurred, and the Non-Contributing JV Participant does not within 30 days thereafter reimburse the

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Contributing JV Participant to the extent of the Non-Contributing JV Participant’s Cost Share of such Program (being the amount which the Contributing JV Participant elected to and did contribute instead of the Non-Contributing JV Participant) together with interest thereon from the date contributed at LIBOR plus 6% per annum. If the Non-Contributing JV Participant so reimburses the Contributing JV Participant within such 30-day period it will be deemed to have contributed its Cost Share of such Program and the JV Participants’ respective Interests will not be adjusted in accordance with Section 12.3. The Operator will not proceed with any Program unless an election to fully fund it has been made by at least one of the JV Participants.

17.5 An election to fund a Program will make a JV Participant liable to pay its Cost Share of all of the Expenditures actually incurred under or pursuant to such Program, including Program Overruns up to but not exceeding 15% of estimated Expenditures.

17.6 After having elected to fund a Program which is proceeded with, each JV Participant will, within 30 days after being requested in writing to do so by the Operator, pay such amount of Expenditures incurred or to be incurred under or pursuant to such Program as the Operator may require, but the Operator will not require payment of any funds more than one month in advance of the period during which the same are to be expended. Monthly Expenditure projections will be delivered by the Operator to the JV Participants once each calendar quarter for the next succeeding three months.

17.7 If it appears that Expenditures will exceed by greater than 15% those estimated under a Program, the Operator will immediately give written notice to the JV Participants outlining the nature and extent of the Program Overruns. If such Program Overruns are accepted by the JV Participants then, within 30 days after the receipt of a written request from the Operator, each JV Participant will pay to the Operator its Cost Share of such Program Overruns. If any JV Participant does not accept such Program Overruns, or fails to pay the same, the Operator will be entitled to curtail or abandon such Program, failing which it will be solely responsible for the amounts in excess of 15%, which will be deemed not to be Costs under this Agreement.

17.8 If a JV Participant at any time fails to pay such amount of Expenditures as is requested by the Operator in accordance with Section 17.6 after having elected to do so or accepted Program Overruns in accordance with Section 17.7 the Operator may give written notice to such JV Participant demanding payment, and if such JV Participant has not paid such amount within 30 days after receipt of such notice, such JV Participant will be deemed to:

(a) be in default under Section 17.6 or 17.7, as applicable; and
(b) have lost its right to contribute to such Program,

and the other JV Participant will have the right to contribute all Costs to be incurred under or pursuant to that Program and the JV Participants’ respective Interests in the Property will be adjusted in accordance with Section 12.3 at which point such default will be deemed to have been cured. The Operator will have the right to curtail or abandon any Program if an election to fully fund it has not been made by either of the JV Participants.

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18. PRODUCTION PROGRAMS

18.1 If the Operator determines that the economic potential of any part of the Property warrants the preparation of a Preliminary Economic Assessment or a Feasibility Report the Operator will present a Program in accordance with Section 16 contemplating the preparation of a Preliminary Economic Assessment or a Feasibility Report, as the case may be. The Operator will forthwith deliver to the Technical Committee any internal or draft report or reports on the economics of Commercial Production and on completion of the Preliminary Economic Assessment or the Feasibility Report, as the case may be, pursuant to such Program, Operator will forthwith deliver to the JV Participants such Preliminary Economic Assessment or Feasibility Report and if in the opinion of the Technical Committee it is warranted based on the conclusions reached in the Preliminary Economic Assessment or Feasibility Report, the Operator will prepare a Production Program in respect to such part of the Property which will include at least the following:

(a) a description of that part of the Property to be covered by the proposed mine;
(b) the estimated recoverable reserves of minerals and the estimated composition, grade and content thereof;
(c) the costs and time estimate for permitting and the proposed procedure for development, mining and production;
(d) results of ore amenability tests (if any);
(e) the nature and extent of the Facilities proposed to be acquired which may include mill facilities, if the size, extent and location of the ore body makes such mill facilities feasible, in which event the study will also include a preliminary design for such mill;
(f) the total unit costs, including capital budget, which are reasonably required to obtain permitting for and to purchase, construct and install all structures, machinery and equipment required for the proposed mine, including a schedule of timing of such requirements;
(g) all environmental, socio-economic and heritage baseline impact studies and costs;
(h) the period in which it is proposed the Property will be brought to Commercial Production;
(i) such other data and information as are reasonably necessary to substantiate the existence of an ore deposit of sufficient size and grade to justify development of a mine, taking into account all relevant business, tax and other economic consideration; and
(j) working capital requirements for the initial four month operation as a mine or such longer period as may be reasonably justified in the circumstances.
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18.2 So long as it has not lost its right to contribute to Programs and to Production Programs, any JV Participant (the “ non-Operator ” for the purpose of this Section) may at any time request the Operator to present a Program contemplating the preparation of a Preliminary Economic Assessment or Feasibility Report with respect to the Property and if the Operator fails to do so within 180 days of such request, such JV Participant will have the right to become Operator for the purpose of completing such a Program at its own cost and expense but the JV Participant’s respective Interests in that Property will not be adjusted under Section 12.3 during the course of such Program. Upon completion of a Preliminary Economic Assessment or Feasibility Report, the non-Operator will forthwith deliver a copy to the Technical Committee together with a Production Program and the non-Operator’s election to fund its Cost Share of such Production Program if, in the opinion of non-Operator, it is warranted based on the conclusions reached in the Preliminary Economic Assessment or Feasibility Report. If the JV Participant who did not contribute to the preparation of the Preliminary Economic Assessment or Feasibility Report and Production Program elects pursuant to Section 18.3 to participate in a Production Program based on the Preliminary Economic Assessment or Feasibility Report prepared by the non-Operator, the JV Participant who did not contribute will reimburse the non-Operator its respective Cost Share of an amount equal to 150% of such JV Participant’s Cost Share of the Preliminary Economic Assessment or Feasibility Report in order to maintain their respective Interest in the Property, failing which its Interest will be adjusted in accordance with Section 12.3. If the JV Participant who did not contribute to the Preliminary Economic Assessment or Feasibility Report does not elect to contribute its respective Cost Share pursuant to Section 18.3 the non-Operator may contribute all Costs relating thereto, and, as a result, the JV Participants’ respective Interests in the Property will thereafter be adjusted in accordance with Section 12.3 including the cost of the Preliminary Economic Assessment or Feasibility Report. If the non-Operator does not elect to contribute to the Production Program, the cost of the Preliminary Economic Assessment or Feasibility Report will not result in the adjustment of the JV Participants’ Interest in the Property pursuant to Section 12.3.

18.3 Subject to Section 18.2, within six months of the delivery to the JV Participants of a Production Program and Preliminary Economic Assessment or Feasibility Report delivered pursuant to either Section 18.1 or 18.2 each JV Participant will give written notice to the Operator stating whether it elects to contribute its Cost Share of the Production Program. Failure to give such notice within such six-month period will be deemed to be an election not to contribute to such Production Program and the provisions of Section 18.7 will apply. If all JV Participants elect to contribute their respective Cost Shares of the Production Program the Operator will implement the Production Program. The Operator will not proceed with any Production Program unless an election to fully fund it has been made by at least one of the JV Participants.

18.4 An election to fund a Production Program will make a JV Participant liable to pay its Cost Share of:

(a) all of the Production Program Costs actually incurred under or pursuant to such Production Program, including Production Program Overruns up to but not exceeding 12.5% of estimated Production Program Costs,
(b) Operating Costs and any other costs associated with establishing and operating the Property as a mine at such time as the liability is incurred by the Operator; and
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(c) any debts, liabilities or obligations arising from operations hereunder in respect of the Property, except financing costs incurred by the other JV Participant in connection with such other JV Participants’ contributions to the Production Program.

18.5 Commencing 90 days after having elected to fund a Production Program which is proceeded with, each JV Participant will, within 30 days after being requested in writing to do so by the Operator, pay such amount of Production Program Costs incurred or to be incurred under or pursuant to such Production Program as the Operator may require, but the Operator will not require payment of any funds more than one month in advance of the period during which the same are to be expended.

18.6 If it appears that Production Program Costs will exceed by greater than 12.5% those estimated under a Production Program, the Operator will immediately give written notice to the JV Participants outlining the nature and extent of the Production Program Overruns. If such Production Program Overruns are accepted by the JV Participants then, within 30 days after the receipt of a written request from the Operator, each JV Participant will pay to the Operator its Cost Share of such Production Program Overruns. If any JV Participant does not accept such Production Program Overruns, or fails to pay the same, the Operator will be entitled to curtail or abandon such Program, failing which it will be responsible for the amounts in excess of 12.5%, which will be deemed not to be Costs under this Agreement.

18.7 If a JV Participant elects or is deemed to have elected not to contribute its Cost Share of a Production Program pursuant to Section 18.3, such JV Participant will be deemed to have lost its right to contribute to the Production Program and the other JV Participant will have the right to contribute all Production Program Costs to be incurred under or pursuant to the Production Program and the Operator will proceed with the Production Program and the JV Participants’ respective Interests in the Property will thereafter be adjusted in accordance with Section 12.3.

18.8 If a JV Participant:

(a) at any time fails to pay such amount of Production Program Costs as is requested by the Operator in accordance with Section 18.5; or
(b) at any time fails to pay such amount of Production Program Overruns as was accepted by such JV Participant in accordance with Section 18.6,

the Operator may give written notice to such JV Participant demanding payment, and if such JV Participant has not paid such amount within 30 days after receipt of such notice, such JV Participant will be deemed to be in default under Section 18.5 or 18.6 and have lost its right to contribute to the Production Program in respect of the Property and the remaining JV Participant will have the right to contribute all Production Program Costs to be incurred under or pursuant to the Production Program in respect of the Property and the Operator will proceed with the Production Program and the JV Participants’ respective Interests in respect of the Property will thereafter be adjusted in accordance with Section 12.3.

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19. TECHNICAL COMMITTEE

19.1 The Parties will, as soon as practicable after the Effective Date, establish a Technical Committee consisting of a member and an alternate member of each Party. Each Party will designate in writing to the other the names of its member and alternate member of the Technical Committee.

19.2 A Party may from time to time revoke in writing the appointment of its member to the Technical Committee and appoint in writing another in his place. A Party may from time to time in writing appoint one alternate member for any member theretofore appointed by such Party to the Technical Committee. Alternate members may attend meetings of the Technical Committee, and in the absence of the member, his alternate may vote and otherwise act in the place and stead of a member. Whenever any member or alternate member votes or acts, his votes or actions will for all purposes of this Agreement be considered the actions of the Party whom he represents. The Parties will give written notice to each other from time to time as to names, addresses, telephone numbers and facsimile numbers of their respective members and alternates on the Technical Committee.

19.3 Meetings of the Technical Committee may take place by means of counterpart resolutions delivered by facsimile, email, mail or courier or by means of conference telephones or other communication facilities by which means all Parties or their alternates participating in the meeting can hear each other. The persons participating in a meeting in accordance with this Section will be deemed to be present at the meeting and to have so agreed and will be counted in the quorum therefor and be entitled to speak and vote thereat.

19.4 Meetings of the Technical Committee may be called by the Operator or any Party by giving ten days’ notice in writing to the others except that 60 days’ notice will be given in respect of a meeting to consider a Preliminary Economic Assessment or Feasibility Report and Production Program, unless otherwise agreed to by the Parties.

19.5 The initial chairman of the Technical Committee (the “ Chairman ”) will be determined by Erin. Following the Option Exercise Date, the Chairman will be determined by Temas. Following the Option Exercise Date, Chairman will have the casting vote on votes taken by the Technical Committee.

19.6 The Operator will consult freely with the Technical Committee and the members thereof, and keep them fully advised of the present and prospective operations and plans and will furnish the Technical Committee with quarterly financial statements and reports relating to the status of the Property together with current reports and information on any material results relating to the Property.

19.7 Voting by the Technical Committee may be conducted by verbal, written, facsimile or electronic ballot.

19.8 Except as hereinafter provided, a quorum of any meeting of the Technical Committee will consist of any combination consisting of one member or one alternate of each Party. If a quorum is not present within thirty minutes after the time fixed for holding any such meeting, the meeting will be adjourned to the same day in the next week (unless such day is a

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non-Business Day in which case it will be adjourned to the next following Business Day thereafter) at the same time and place, unless otherwise agreed to by the Parties. At the adjourned meeting the members or alternate members present in person (which may include only one person) will form a quorum and may transact the business for which the meeting was originally convened.

19.9 One member of the two members appointed by each Party will be designated as the voting member. The voting member (or alternate member in the absence of the member) of the Technical Committee will have one vote.

19.10 Except as provided in Sections 19.11 all decisions of the Technical Committee will be by the affirmative vote of a majority of the votes entitled to be cast by members. The member or members representing a Party which is in default as set out in Section 17.8 or 18.8 will be entitled to attend meetings of the Technical Committee but will not be entitled to vote.

19.11 The following matters will require the unanimous approval of the Technical Committee, and the Chairman shall have no casting vote with respect to the following matters:

(a) the acquisition or disposition of an Asset or a series of Assets with a fair market value which exceeds budget by €25,000 or more, or an Asset that the acquisition or disposition of which would substantially change the nature of the business ordinarily conducted by the Joint Venture;
(b) the borrowing of any funds in an amount which exceeds budget by €25,000 or more, on behalf of the Joint Venture or the incurrence, assumption or guarantee of any debt by the Joint Venture in an amount greater than €25,000, except as incurred in the ordinary course of business;
(c) the commencement of any litigation on behalf of the Joint Venture seeking damages in excess of €25,000 per occurrence or the settlement of any litigation or other dispute involving the Joint Venture for an amount in excess of €25,000 per occurrence;
(d) the disposition of all or any material portion of the Property;
(e) any agreement with an Affiliate or Associated Company; and
(f) any increase in the fee payable to the Operator hereunder.

19.12 All meetings will be held at such place in Vancouver, Canada, as will be designated by the Operator unless otherwise agreed to by the Parties.

19.13 There will be included with a notice of meeting such material and data as may be reasonably required to enable the members of the Technical Committee to determine the position they should take in respect of any vote or election to be made at such meeting.

19.14 The Operator will have the responsibility of preparing and distributing notices and agendas of meetings and keeping records of the proceedings at such meetings and distributing same to the Parties no later than 15 days from the date of such meeting. Unless any Party whose

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representative was present at the relevant meeting objects by notice in writing delivered to the Operator within 30 days of receipt of minutes of meetings, detailing the basis for such objection, the minutes so distributed will be deemed a conclusive record of the proceedings of such meetings. The Parties will not effect any action based on minutes which are in dispute and, in the event of any dispute in respect of the minutes, the Parties will reconvene a Technical Committee meeting within seven days to resolve such dispute.

20. POWERS OF TECHNICAL COMMITTEE

20.1 The Technical Committee will, without limiting any of its powers as specified elsewhere in this Agreement, have the exclusive right, power and authority separately with respect to the Property to:

(a) approve, modify, or reject any Program, Feasibility Report, Production Program or Operating Plan proposed by the Operator or any Program, Feasibility Report or Production Program proposed by a JV Participant;
(b) remove the Operator of the Property;
(c) appoint a new Operator if the Operator resigns pursuant to Section 13.2 or is deemed to have resigned pursuant to Section 13.5 or Section 17.2;
(d) determine the terms of engagement of the Operator, including any remuneration payable to the Operator on the basis that the Operator should neither profit nor lose for acting as such;
(e) approve or reject the sale, abandonment or disposition of any part of the Assets (other than the Property), which, in the case of any asset or series of related assets having a value in excess of €10,000; and
(f) establish accounting procedures from time to time for the Operator.

21. OPERATING PROGRAMS, BUDGETS AND PAYMENTS

21.1 After the commencement of Commercial Production, all mining operations on the Property will be planned and conducted and all estimates, reports and statements will be prepared and made on the basis of an operating year and in accordance with the Accounting Procedure. The first operating year for the Property will be the period from the commencement of Commercial Production to December 31 of the same calendar year and thereafter each operating year will coincide with the calendar year (an “ Operating Year ”).

21.2 Prior to the beginning of each Operating Year the Operator will prepare and deliver to the JV Participants an operating plan for the ensuing Operating Year (an “ Operating Plan ”). The Operating Plan applicable to the first Operating Year will be submitted not later than three months prior to the date estimated by the Operator as the date of commencement of Commercial Production, and the Operating Plan for each subsequent operating year will be submitted not later than November 15 in the year immediately preceding the Operating Year to which such Operating

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Plan relates. Each Operating Plan will contain, with reference to the Operating Year to which it relates, the following:

(a) a plan of proposed mining operations including, without limiting the generality of the foregoing, particulars of any special items such as:
(i) an increase of 20% or more in the capacity or through put of the concentrating mill or mining capacity,
(ii) additional general exploration of the Property outside the mine,
(iii) opening and equipping an additional mine or mines on the Property,
(iv) any departure from development or mining plans previously followed by the Operator,
(v) any plans for stockpiling of Mineral Products, or
(vi) any development work to be completed in any Operating Year if such work in not required in the ordinary course to continue mining as contemplated by the approved Operating Plan and Costs therefore are reasonably estimated by the Operator to exceed €1,000,000;
(b) a detailed estimate of all Operating Costs plus a reasonable allowance for Program Overruns, such Program Overruns not to exceed 15% of Expenditures for such Program;
(c) an estimate of the quantity of Mineral Products to be produced from the Property; and
(d) such other facts and figures as may be necessary to give the other parties a reasonably complete picture of the results the Operator plans to achieve;

and the Operator will promptly supply to each JV Participant any additional or supplemental information which that JV Participant may reasonably require in respect to the Operating Plan.

21.3 Each JV Participant will have 60 days from receipt of any annual Operating Plan within which to consider such Operating Plan following which a meeting of the Technical Committee will be called to deal with any objections and alternative proposals. The proposed Operating Plan will then be voted on by the Technical Committee. If the proposed Operating Plan is approved but any JV Participant objects to the approved Operating Plan on the basis of any of the items as set out in Sections 21.2(a)(i)to 21.2(a)(vi), the Operator will either modify the Operating Plan or may elect to bear the Operating Costs of such JV Participant relating to such item, in which event it will be entitled pursuant to Section 28 to recoup such amount together with interest at LIBOR plus 6% per annum.

21.4 After the Option Exercise Date, based upon the budgets submitted to and approved by the Technical Committee as the same may be revised from time to time the Operator will submit

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to each JV Participant on or before the 15th day of each month an estimate of the cash requirements for the next month which will show:

(a) separately the estimated cash disbursements which the Operator will be required to make for Operating Costs and any other expenditures approved by the JV Participants;
(b) the extent if any to which such disbursements will be satisfied out of cash in the Operating Fund (as hereinafter defined) after allowing for the cash balance to be maintained in the Operating Fund as approved by the Technical Committee;
(c) the amounts, if any, which are credited to each JV Participant in the immediately preceding month;
(d) the Cost Share which each JV Participant will be required to furnish to the Operator for such disbursements net of and indicating the amount of Operating Costs, if any, to be advanced by the Operator on behalf of that JV Participant pursuant to Section 21.3; and
(e) the account into which the required funds are to be deposited.

21.5 Within 30 days after receipt of each such cash estimate, the JV Participants will remit to the Operator their respective Cost Shares required under Section 21.4(d) and if any JV Participant fails to pay all or any part of its Cost Share pursuant to Section 21.4(d) the Operator will be entitled to pay the unpaid share of that JV Participant. If the Operator pays such unpaid share, it will have a lien in respect of 150% of such amount pursuant to Section 28 and the provisions of Section 29 will apply.

21.6 Prior to incurring any Operating Cost hereunder or as soon as reasonably practicable thereafter, the Operator will open an account or accounts in bank(s) approved by the JV Participants for the purpose of establishing and maintaining therein at all times a cash fund (the “ Operating Fund ”) from which Operating Costs will be paid by the Operator or from which the Operator may be reimbursed for Operating Costs paid by the Operator.

21.7 All money received by the Operator from the JV Participants and the payment of the Operator’s invoices for accrued Operating Costs will be deposited in the Operating Fund and, in addition, each JV Participant will deposit or cause to be deposited in the Operating Fund at the times and in the manner provided in Section 21.3 the sums provided for therein. The total amount of deposits in the Operating Fund, regardless of the source thereof, will at no time exceed the gross Operating Costs of the Operator for the then current and next succeeding month as estimated in the Operating Plan then in effect.

21.8 On commencement of the Production Program or on such earlier date as the Operator considers it necessary based on the work being carried out on the Property, the Operator will establish and administer a contingency fund (the “ Contingency Fund ”), in addition to all required statutory funds, to be maintained as a separate account for the purpose of paying all costs, outlays, expenses, obligations, liabilities and charges of whatever kind or nature incurred or chargeable, directly or indirectly, by the JV Participants for environmental protection, reclamation,

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pollution control, testing, monitoring, clean-up, containment and removal of Hazardous Materials from the Property in which such JV Participants have an Interest, remediation, decommissioning, shutdown and other similar matters (“ Reclamation and Remediation Costs ”), severance pay and pensions for employees arising as a result of operations and in connection with the permanent or temporary shutdown in whole or in part of any mine on the Property. At the time such Contingency Fund is established the Operator will estimate the amount required throughout the life of the mine and, based upon the estimated mine life, the amount required to be contributed by each JV Participant in accordance with its Interest in the Property on an annual basis or from time to time in the case of special or unexpected Reclamation and Remediation Costs. Such Contingency Fund will be held in trust on behalf of the JV Participants and invested and reinvested by the Operator in Government of Canada treasury bills or similar liquid investments as the Technical Committee may from time to time authorize acting prudently on behalf of the JV Participants. To the extent that additional funds are required to fund Costs once the Contingency Fund is in place and the Technical Committee is of the view that there will be sufficient future Mineral Products produced from the Property to replenish any moneys borrowed from the Contingency Fund the Operator will distribute the balance of the Contingency Fund to the JV Participants [ in accordance with their respective Interests in the Property at the time of payment. In the event of any subsequent shortfall in the Contingency Fund, each JV Participant will within 30 days of being requested to do so in writing by the Operator, repay its Cost Share of such funds.

21.9 For the avoidance of doubt, if the Interest of a JV Participant in the Property is converted to a Royalty pursuant to Section 12.5, the JV Participant whose Interest in the Property was converted will not be liable for its Cost Share associated with amounts chargeable to it in respect of the Property as of the date of such conversion nor will it be liable for liabilities and obligations relating to the Assets.

22. DISPOSITION OF PRODUCTION

22.1 Prior to constructing the Joint Venture and conducting the activities of the Joint Venture through the JV Company (at which point in time neither JV Participant will have the right to take in kind and separately dispose of Mineral Products), and subject to the provisions of Section 22.3, for any period after the commencement of Commercial Production on the Property and provided that each JV Participant has paid to the Operator its respective Cost Share of Operating Costs for that period, the JV Participants will, where the Operator is permitted by Applicable Law to divide the Mineral Products in the ratio of the JV Participants’ respective Interests in the Joint Venture and take in kind Mineral Products in the ratio of their respective Interests in the Joint Venture.

22.2 For purposes of determining the value of Mineral Products taken in kind pursuant to Section 22.1, each JV Participant’s share of Mineral Products will be valued at the time of delivery to the JV Participants in accordance with this Section 22.2 (or purchase or sale by the Operator pursuant to Section 22.5) and at a value equal to that received by the JV Participant acting as Operator for its share of such Mineral Products after deduction of:

(a) all costs of transporting Mineral Products, including insurance, from the Property to the place of delivery designated by the purchaser of such Mineral Products,
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(b) such reasonable charge for marketing Mineral Products as is consistent with generally accepted industry marketing practices, and
(c) all taxes (other than income taxes), royalties or other charges or imposts provided for pursuant to Applicable Law or any legal obligation imposed by any government if paid by such JV Participant in connection with the disposition of Mineral Products taken in kind.

The division of Mineral Products for the purposes of this Section 22.2 will be conducted in fair and equitable manner and specifically, boron will be valued at the Monthly Average Boron Price. If any refined metals other than refined boron are produced from Mineral Products then the value of such Mineral Products will be equal to the amount agreed upon by the JV Participants in writing Notwithstanding the foregoing, if for any reason the Operator uses a smelter for refined boron that does not calculate the prices of refined boron by using the Monthly Average Boron Price, then the JV Participants can use such other price as agreed upon by the JV Participants in writing. If the JV Participants cannot agree upon a price the JV Participants will not be entitled to submit the matter to arbitration and the price will revert to the Monthly Average Boron Price.

22.3 If the Operator makes any payment on behalf of a JV Participant pursuant to Section 21.5, it will have the prior and preferred right pursuant to Section 28 to receive that JV Participant’s share of Mineral Products under Section 22.1 until the Operator has received Mineral Products in kind of a value equal to 150% of the actual payment made as provided in Section 21.5. If the Operator makes any payment on behalf of a JV Participant pursuant to Section 21.3 it will have the prior and preferred right pursuant to Section 29 to receive that JV Participant’s share of Mineral Products under Section 22.1 until the Operator has received Mineral Products in kind of a value equal to the actual payment made by the Operator pursuant to Section 21.3 together with LIBOR plus 6% per annum, calculated on the outstanding balance from time to time from the date of advance of such funds.

22.4 Any extra expenditure incurred by reason of the taking in kind or separate disposition by a JV Participant of its proportionate share of Mineral Products will be borne by that JV Participant and that JV Participant will be required to construct, operate and maintain, at its own expense, any and all facilities which may be necessary to receive, store and dispose of its share of Mineral Products.

22.5 If either JV Participant fails to make the necessary arrangements to take in kind or separately dispose of its proportionate share of Mineral Products, the Operator as agent may purchase for its own account or sell such share, subject to the right of the JV Participant owning such share to revoke at will the Operator’s authority under this Section in respect of Mineral Products not then purchased by the Operator or committed for sale to others, and the Operator will be entitled to deduct from the sale proceeds all costs of or related to marketing such Mineral Products including, without limitation, transportation, storage, commissions, and discounts but all contracts of sale executed by the Operator for a JV Participant’s share of Mineral Products will be only for such reasonable periods of time as are consistent with the minimum needs of the industry under the circumstances and in no event will any such contract be for a period in excess of one year.

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22.6 Proceeds, if any, from the sale by the Operator of Mineral Products pursuant to Section 22.5 will be calculated by the Operator separately for each JV Participant at the end of each calendar month and will be paid monthly within 20 days after the end of each such calendar month following payment to the Operator by each JV Participant of its respective Cost Share of Operating Costs outstanding as at the end of that calendar month.

22.7 If a JV Participant, any Associated Company of a JV Participant or any person with whom a JV Participant is not dealing at arm’s length is a purchaser of Mineral Products from a JV Participant, and if the value of such Mineral Products is to be used to determine any matter arising under this section, such JV Participant will be deemed to receive prevailing market prices for all Mineral Products so sold.

23. AUDIT

23.1 The records relating to the Property including all Costs and Mineral Products taken in kind or to the calculation of proceeds from the sale thereof will be audited annually at the end of each fiscal year of the Operator and:

(a) any adjustments required by such audit will be made forthwith;
(b) a copy of the audited statements will be delivered to the JV Participants within six months of the end of such fiscal year; and
(c) the expenses of any such audit will be deemed to be Costs;

and all such accounts and records will be deemed to be correct and accurate unless questioned by a JV Participant within 12 months following the end of the calendar year to which the accounts relate.

23.2 Each JV Participant at reasonable times and upon notice in writing to the Operator, will have the right to inspect, audit and copy the Operator’s accounts and records relating to the operations of the Joint Venture for any calendar year within 12 months following the end of such calendar year. The JV Participants will make all reasonable efforts to conduct audits in a manner which will result in a minimum of inconvenience to the Operator and the expenses of any such audit will be borne by the JV Participant which implemented it. If the non-Operator JV Participant initiates an audit which results in a determination of negligence on behalf of the Operator or an under/over statement of the records of greater than 5%, then the Operator JV shall pay for the audit.

24. SHARING OF AND CONFIDENTIAL NATURE OF INFORMATION

24.1 Subject to Section 24.2, each Party agrees that all material technical or scientific information regarding the Joint Venture and the Property obtained hereunder will be the exclusive property of the Parties and not publicly disclosed or used other than for the activities contemplated hereunder except as required by Applicable Law or by the rules and regulations of any stock exchange having jurisdiction or with the written consent of the other Party, such consent not to be unreasonably withheld. Notwithstanding the foregoing, each Party may provide material technical

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or scientific information regarding the Joint Venture and the Property to its directors, officers, consultants, representatives and agents (each a “ Further Recipient ”) to whom disclosure is necessary or useful provided that each such Further Recipient has a legally enforceable duty or an agreement in writing to maintain the confidentiality of such information.

24.2 Consent to disclosure of information pursuant to Section 24.1 will not be withheld where a Party wishes to disclose any such information to a third party for the purpose of arranging financing for its contributions hereunder or for the purpose of selling its Interest as permitted by Section 26 or in connection with a proposed corporate reorganization, merger or take over bid, provided that such third party first enters into a written agreement with the Party wishing to disclose such information that any such information not theretofore publicly disclosed will be kept confidential and not disclosed to others. If a response to a request for consent to disclosure made to a JV Participant is not received by the JV Participant making the request for disclosure within five Business Days of the making thereof, the consent of the JV Participant to whom the request is made will be deemed to have been granted (subject to compliance by such JV Participant with the other provisions of this Section 24.2).

24.3 Each Party will, prior to making any press release or other written public disclosure pertaining to the Property, provide to the other a draft not less than 24 hours prior to the proposed release thereof and will, prior to making such disclosure, consider the comments of the other Party with respect to such draft in finalizing the disclosure.

24.4 No Party will be liable to the other Party for the fraudulent or negligent disclosure of information by any of its employees, servants or agents, provided that such JV Participant has taken reasonable steps to ensure the preservation of the confidential nature of such information.

25. LIMITED CHARGING

25.1 Each JV Participant hereby covenants and agrees with the other to cooperate fully in connection with any project financing for the Property which is presented on reasonable commercial terms for projects of a similar nature, size and financial risk and to hold its Interest free and clear of all liens, charges and encumbrances including any floating charge (except liens for taxes not yet due and other inchoate liens and arising from operations on the Property being contested in good faith) and each JV Participant will, if so required by the terms of such project financing, issue to any lender providing such financing, bonds, debentures or other security instruments charging its Interest in the Property, inter alia, by way of a specific first mortgage and charge limited to its Interest in the Property. No such project financing will require either JV Participant to give any guarantee to any third party on behalf of the other JV Participant, to be jointly and severally liable for the repayment of such financing or to give security to any lenders in respect of such financing in an amount greater than its Interest in the Property.

25.2 If a joint financing for the Production Program is not arranged as contemplated in Section 25.1, then notwithstanding the provisions of Section 29, for the purpose of financing its share of the Production Program a JV Participant may, at any time, mortgage, charge or otherwise encumber the whole or any part of its Interest in the Property but only upon the condition that the holder of such encumbrance (hereinafter called the “ Chargee ”) first enters into a written

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agreement with the other JV Participant in form satisfactory to counsel for such other JV Participant, binding upon the Chargee, to the effect that:

(a) the charge will be pari passu with any mortgage, charge or other Encumbrance the other JV Participant(s) may arrange in connection with financing for their respective portion of the financing for the Production Program;
(b) the Chargee will not enter into possession or institute any proceedings for foreclosure or partition of the encumbering JV Participant’s Interest in the Property and that such encumbrance will be subject to the provisions of this Agreement; and
(c) the Chargee’s remedies under the encumbrance will be limited to the sale of the whole (but only of the whole) of the encumbering JV Participant’s Interest in the Property to the other JV Participant in accordance with Section 26, or failing such disposition, at a public auction to be held after 90 days’ prior notice to the other JV Participant, such sale to be subject to the purchaser entering into a written agreement with the other JV Participant whereby such purchaser assumes all obligations of the encumbering JV Participant under the terms of this Agreement.

26. RESTRICTIONS ON ALIENATION

26.1 Except in accordance with this Agreement neither Party will transfer, convey, assign, mortgage or grant an option in respect of or grant a right to purchase or in any manner transfer or alienate any or all of its Interest in the Property or transfer or assign any of its rights under this Agreement or Royalty.

26.2 Neither Party will sell any of its Interest in the Property or otherwise transfer or assign any of its rights under this Agreement except:

(a) unless specifically provided otherwise hereunder;
(b) pursuant to an agreement in writing to perform the obligations of the respective Party hereunder to the same extent as if this Agreement had been originally executed by such purchaser, grantee or transferee; and
(c) when there is no default of any of the covenants and agreements herein contained by such Party.
26.3 Nothing in this section will prevent:
(a) a sale by either Party of all of its Interest in the Property or an assignment of all its rights under this Agreement to any third party provided that such third party first complies with the provisions of Section 26.4; or;
(b) the sale of all or a portion of the Royalty; or
(c) a joint disposition of the Property or all or any part of the other assets constituting any part of the Assets to a third party by the Parties; or
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(d) a transfer of all or any part of the Interests of one Party to the other Party.

26.4 Subject to Sections 26.1, 26.2 and 26.3, if either Erin or Temas (in this Section called the “ Offeror ”) intends to sell its Interest in the Property or assignment of its rights under this Agreement (the “ Offeror’s Property-Interest ”) it will give written notice to the other Party (in this Section the Party receiving such notice is called the “ Offeree ”) of such intention (the “ Intention to Sell ”). In the event that the Intention to Sell contemplates the sale of the Offeror’s Property-Interest for non-cash consideration, the Offeror will include in the Notice of Intention to sell a valuation of such non-cash consideration from an arms-length independent third party valuator. Upon receipt of the Intention to Sell the Offeree must:

(a) on or before 20 days of receipt of the Intention to Sell provide a written notice (the “ Right of First Offer Notice ”) to the Offeror of the consideration that the Offeree wishes to purchase the Offeror’s Property-Interest;

(b) for a period of 60 days following the receipt of the Right of First Offer Notice (the “ Purchase Period ”), the Offeree will have the exclusive right and option to purchase the Offeror’s Property-Interest for such consideration;

(c) the purchase of the Offeror’s Property-Interest must be completed by the Offeree within the Purchase Period, otherwise the Offeror may proceed to sell the Offeror’s Property-Interest to the third party as provided in Section 26.4(d); and

(d) if the purchase right provided in this Section 26.4 is not completed within the Purchase Period, then the Offeror may sell the Offeror’s Property-Interest to a third party for the consideration and on terms and conditions no more favourable than those specified in the Right of First Offer Notice as long as the sale is evidenced in writing and is completed within 60 days of the expiration of the Purchase Period.

26.5 The provisions of Section 26 will not prevent a Party from entering into a take over bid, an amalgamation, merger or other form of corporate combination or reorganization which will have the effect in law of the merged entity or entities possessing all the property, rights and interests and being subject to all the debts, liabilities and obligations of each merging company.

27. LIABILITY OF THE OPERATOR AND INDEMNITY

27.1 Except as hereinafter provided, the JV Participants will indemnify and save the Operator harmless from and against any loss, cost, liability, claim, demand, damage, expense, injury and death (including, without limitation, legal fees and disbursements) resulting from any acts or omissions of the Operator or its directors, officers, employees or agents in conducting operations pursuant to this Agreement.

27.2 Notwithstanding Section 27.1, the Operator will not be indemnified nor held harmless by the JV Participants from, and will be liable to the JV Participants only for, any loss, cost, liability, claim, demand, damage, expense, injury or death (including, without limitation, legal fees and disbursements) resulting from the gross negligence or wilful misconduct of the Operator or its directors, officers, employees or agents.

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27.3 The Operator will not be liable to the other Party nor will any Party be liable to the Operator in contract, tort or otherwise for special, indirect or consequential damages, including, without limiting the generality of the foregoing, loss of profits or revenues, or the inability to produce or deliver Ore or Product, even if advised of the possibility of those damages.

28. LIEN

28.1 The Operator will have a lien and charge (subject only to the rights of any third party providing financing for the Production Program as contemplated in Section 26.1) on the JV Participants respective Interests, their right to receive either Mineral Products in kind or proceeds from the sale thereof and their interests in any contracts for the sale of Mineral Products as security for any amount paid by the Operator on behalf of a JV Participant in respect of Costs under Sections 21.2(a)(i) to 21.2(a)(vi) pursuant to Section 21.3 or Operating Costs pursuant to Section 21.5.

28.2 The lien in favour of the Operator under Section 28.1 (hereafter referred to as the “ Lienholder ”) may be secured upon the request of the Lienholder by a mortgage, pledge, charge, general security agreement and financing statement under applicable personal property security legislation in favour of the Lienholder upon the Interest of the debtor JV Participant (hereafter referred to as the “ Debtor ”), the Debtor’s right at any time to receive either Mineral Products in kind or proceeds from the sale thereof and its interest in any contracts for the sale of Mineral Products, but if the Debtor wishes to provide a sufficient bond for securing such payment, in the place of a mortgage, pledge and charge, general security agreement and financing statement, it may elect to do so, and if the Lienholder objects thereto, the sufficiency of the bond (including acceptability of the obligor thereunder, as the case may be) will be submitted to dispute resolution in accordance with Section 29.4.

28.3 If the Lienholder is unable to eliminate any amounts owed to it by the Debtor pursuant to Section 28.1 and the Debtor owing the amount in question has not paid off the deficiency within 90 days, the Lienholder will have the right to take possession of all or any part of the Debtor’s Interest. The Lienholder may sell and dispose of the Interest which it has so taken into its possession by:

(a) first offering that Interest pro rata to the JV Participant other than the Debtor (the “ Non-defaulting JV Participant ”), for that price which is the average of the fair market value stated in three appraisals obtained by the Lienholder from independent well recognized appraisers competent in the appraisal of mining properties; and
(b) if the Non-defaulting JV Participant has not purchased all or part of that Interest as aforesaid, then by selling the balance, if any, either in whole or in part or in separate parcels at public auction or by private tender (the Non-defaulting JV Participants being entitled to bid) at a time and on whatever terms the Lienholder will arrange, having first given notice to the Debtor of the time and place of the sale.

28.4 As a condition of the sale as contemplated in Section 28.3(b), the purchaser will agree to be bound by this Agreement and, prior to acquiring the Interest, will deliver notice to that

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effect, in form acceptable to the Lienholder to all JV Participants. Section 26 will not apply to any proposed sale to a third party pursuant to Section 28.3(b).

28.5 The net proceeds of any sales (after deduction of the expenses of sale) pursuant to Section 28.3 will be applied by the Lienholder in payment of the amount due from the Debtor and interest as aforesaid, and the balance remaining, if any, will be paid to the Debtor after deducting therefrom reasonable costs of the sale.

28.6 The purchaser at any sale hereunder will not be bound to see to the propriety or regularity thereof. Any sale or disposal made pursuant to this Section 28 will be a perpetual bar both at law and in equity to any actions, suits, proceedings, claims or litigation by the Debtor and its successors and assigns against the Lienholder and any purchasers with respect to such debt and sales except to obtain its share of sale proceeds, if any, pursuant to Section 28.5.

28.7 At the sale contemplated by Section 28.3, the Debtor will execute and deliver all transfer documents necessary to transfer the Debtor’s Interest. The Debtor hereby irrevocably appoints the Lienholder or any officer of the Lienholder as its attorney-in-fact with full power and authority to execute any and all documents which the purchaser of the Debtor’s Interest deems necessary to evidence the transfer of the Interest of the Debtor. Such power of attorney is coupled with an interest and will not be revoked by, affected or extinguished by any incapacity or dissolution of the Debtor.

28.8 For purposes of determining the value of Mineral Products taken by the Operator or a JV Participant pursuant to Section 28 each JV Participant’s share of Mineral Products will be valued after deduction of:

(a) all costs of transporting Mineral Products, including insurance, from the Property to the place of delivery designated by the purchaser of such Mineral Products,
(b) such reasonable charge for marketing Mineral Products as is consistent with generally accepted industry marketing practices, and
(c) all taxes (other than income taxes), royalties or other charges or imposts provided for pursuant to Applicable Law or any legal obligation imposed by any Governmental Authority if paid by such JV Participant in connection with the disposition of Mineral Products taken in kind.

29. ENCUMBRANCE, PARTITION AND INDEMNIFICATION

29.1 Except as provided in Sections 25 and 29 hereof, a JV Participant will not encumber or suffer to exist any lien, charge or encumbrance on its Interest.

29.2 Neither JV Participant will partition or seek partition, whether through order of any court or otherwise, of the Property, or other assets constituting any part of the Assets.

29.3 A JV Participant will not have authority to act for or assume any obligations or liabilities on behalf of the other JV Participant except such as are specifically authorized pursuant to and in accordance with the terms of this Agreement, and each JV Participant will indemnify and

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hold the other, and their officers, employees, and agents, harmless from and against any and all losses, claims, damages and liabilities arising out of any act or any assumption of any obligations by it done or undertaken on behalf of the other JV Participant other than as provided herein.

30. DISPUTE RESOLUTION

30.1 Submission of Disputes to Mediation and Arbitration - Any dispute or difference between the Parties concerning this Agreement (whether or not specifically referred to in this Agreement as being subject to this Section 30.1) which cannot be resolved or settled by the Parties shall be submitted firstly to a mutually agreeable mediator for non-binding mediation of such dispute or difference. The Party desiring mediation shall notify the other Party of its intention to submit such dispute or difference to mediation and as well shall provide a brief description of the matter to be submitted for mediation and, if appropriate, the section(s) hereof pursuant to which such matter is submitted to mediation. The mediator chosen by the Parties shall be an Independent Expert, but such Independent Expert shall have no authority to bind the Parties. An “ Independent Expert ”, for these purposes shall mean an independent consulting geologist or mining engineer, or firm of consulting geologists or mining engineers, acceptable to both Parties or, failing agreement of the Parties within seven days following the notice desiring mediation, shall be appointed by the President or other officer (provided he or she is at arm's length from both Parties) of the Canadian Institute of Mining, Metallurgy & Petroleum, failing which appointment, the Independent Expert shall be appointed by a Justice of the British Columbia Supreme Court, which appointment shall be binding. The Independent Expert, regardless of how he or she is appointed, shall have professional qualifications, including academic training and professional experience apposite to the nature of the dispute or difference between the Parties, and expertise with the mining exploration and/or mining business. On or before the 7th day following the appointment of the Independent Expert, each Party shall concurrently meet with the Independent Expert to explore the possibility of a mediated resolution of their dispute or difference. Each Party shall make available all relevant data and information which the Independent Expert may reasonably request. The fees and expenses of the Independent Expert shall be borne by the Parties jointly. In the event that mediation efforts are unsuccessful, such dispute or difference shall be settled by arbitration. Any mediation or arbitration to be carried out under this Agreement shall be subject to the following provisions of this Article 30.

30.2 Appointment of Arbitrator - In the event that mediation does not result in a resolution of the dispute, the matters then outstanding shall immediately proceed to arbitration with no need for further notice between the Parties. No Independent Expert appointed to mediate a dispute or difference between the Parties pursuant to the provisions of Section 30.1 shall be appointed as an arbitrator pursuant to the provisions of this Section 30.2. Should the Parties fail to agree on an arbitrator to settle the relevant dispute within 15 days of failure of mediation, then the arbitrator shall be designated by the President or other officer of the Canadian Institute of Mining, Metallurgy and Petroleum, failing which appointment within 30 days thereafter the arbitrator shall be appointed by a Justice of the British Columbia Supreme Court on the application of either Party. The arbitrator appointed shall have professional qualifications, including academic training and professional experience, apposite to the nature of the dispute or difference to be submitted to arbitration and shall also have expertise with the mining exploration and/or mining business.

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30.3 Mechanics of Arbitration - The arbitration shall take place in the City of Vancouver, and the arbitrator shall fix the time and place for the purpose of hearing such evidence and representations as either of the Parties may present and, subject to the provisions hereof, the decision of the arbitrator shall be binding upon the Parties in respect of procedure, the conduct of proceedings and the final determination of the issues therein. The arbitrator shall be instructed to render his decision as soon as possible and, in any event, to use his reasonable best efforts to conduct the arbitration in such manner so as to be able to render such decision within 60 days of the conclusion of the hearing. The arbitrator may order any Party to produce documents prior to the arbitration or to submit a witness to discovery. After hearing any evidence and such representations that the Parties may submit, the arbitrator shall make his decision and reduce the same to writing and deliver one copy thereof to each of the Parties. The arbitrator may determine any matters of procedure for the arbitration not specified herein.

30.4 Parties Financial Constrains Not Relevant - In rendering an arbitration award, the arbitrator shall, where relevant to the subject matter of the dispute or difference, accommodate to the extent possible the reasonable, prudent and efficient exploration, development and operation of the Joint Venture and the Assets (with the financial constraints or condition of the Parties not being deemed relevant or considered in the determination of the arbitrator).

30.5 Costs of Arbitration -The costs of the arbitration shall be borne by the Parties as may be specified in the determination of the arbitrator.

30.6 Award Specifically Enforceable - The award of the arbitrator shall be nonappealable, conclusive and binding on the Parties and shall be specifically enforceable by any court having jurisdiction.

30.7 Disputes Not to Interrupt Operations - Notwithstanding the provisions of this Article 29, disputes or differences between the Parties shall not be allowed to interrupt activities or Commercial Production undertaken pursuant to this Agreement. In the event of any dispute or difference, activities contemplated herein or Commercial Production shall be conducted in the same manner as prior to such dispute or difference until the matter in dispute has been finally determined between the Parties. Upon final determination, the Parties shall make any payment or restitution which may be required under the terms of the settlement or final determination of the dispute.

31. NOTICE

31.1 Any notice, direction or other instrument required or permitted to be given under this Agreement will be in writing and may be given by the delivery of the same or by sending the same by, telecommunication, email or other similar form of communication, in each case addressed as follows:

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(a) If to Erin or the Erin Subsidiary, at:

203, 645 Fort Street Victoria, BC V8W 1G2

Attention: Tim Daniels Email: [email protected]

(b) If to Temas, at:

890-1140 West Pender Street Vancouver, BC V6E 4G1

Attention: David Robinson Email: [email protected]

31.2 Any notice, direction or other instrument will, if delivered on a regular Business Day, be deemed to have been given and received on the day it was delivered and otherwise on the next Business Day, and if sent by telecommunication, email or other similar form of communication with return receipt on a regular Business Day, be deemed to have been given or received on the day it was so sent and otherwise on the next Business Day.

31.3 Any Party may at any time give to the others notice in writing of any change of address of the Party giving such notice and from and after the giving of such notice the address or addresses therein specified will be deemed to be the address of such JV Participant for the purposes of giving notice hereunder.

32. FURTHER ASSURANCES

32.1 The Parties will execute such further and other documents and do such further and other things as may be necessary or convenient to carry out and give effect to the intent of this Agreement.

33. MANNER OF PAYMENT

33.1 Unless otherwise specified, all references to monies hereunder will be in euro funds. All payments to be made to any Party hereunder may be made by cheque or draft mailed or delivered to such Party at its address for notice purposes as provided herein, or deposited for the account of such Party at such bank or banks as such Party may designate from time to time by written notice. Said bank or banks will be deemed the agent of the designating Party for the purpose of receiving, collecting and receipting such payment.

34. TERMINATION

34.1 Subject to the provisions of Section Error! Reference source not found. in the case of a termination prior to the exercise of the Option, this Agreement will terminate upon the occurrence of the earliest of:

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(a) a written agreement by the Parties to terminate;
(b) by Erin pursuant to a First Miletone Termination, a Second Milestone Termination or a Third Milestone Termination;
(c) the termination of the Option and this Agreement pursuant to Section 9.2;
(d) except with respect to the Royalty, upon the transfer of all of a JV Participant’s Interest to the Remaining JV Participant pursuant to Section 12.5;
(e) the sale, abandonment or liquidation of all the Assets and the distribution of any proceeds therefrom, net of liabilities, to the JV Participants to the extent of their interest therein and the completion of all required reclamation and restoration activities in respect of the Assets; or
(f) such time as there is only one JV Participant and no Party holds a Royalty.

35. TIME OF ESSENCE

35.1 Time is of the essence in the performance of this Agreement.

36. HEADINGS

36.1 The headings of the sections of this Agreement are for convenience only and do not form a part of this Agreement nor are they intended to affect the construction or meaning of anything herein contained or govern the rights and liabilities of the Parties.

37. ENUREMENT

37.1 This Agreement will enure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.

38. FORCE MAJEURE

38.1 Neither Party will be liable for its failure to perform any of its obligations under this Agreement due to a cause beyond its control (except those caused by its own lack of funds) including, but not limited to, war, pandemics, insurrection, civil unrest, adverse weather conditions, environmental protests or blockages, acts of God, fire, flood, explosion, strikes, lockouts or other industrial disturbances, Applicable Laws or orders of any Governmental Authority or non-availability of materials or transportation (each an “ Intervening Event ”). An Intervening Event will also include the inability of Temas to obtain unrestricted access to any portion of the Property at any time after six months from the Effective Date as a result of the actions of third parties. During the Option Period, an Intervening Event will also include any acts or omissions of Erin in its capacity as Operator.

38.2 All time limits imposed by this Agreement will be extended by a period equivalent to the period of delay resulting from an Intervening Event described in Section 38.1.

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38.3 A JV Participant relying on the provisions of Section 38.1 will take all reasonable steps to eliminate any Intervening Event and, if possible, will perform its obligations under this Agreement as far as practical, but nothing herein will require such JV Participant to settle or adjust any labour dispute or to question or to test the validity of any law, rule, regulation or order of any Governmental Authority or to complete its obligations under this Agreement if an Intervening Event renders completion impossible.

39. DEFAULT

39.1 Notwithstanding anything in this Agreement to the contrary (other than the provisions of this Agreement providing for elections to contribute and contributions to any Program and any Production Program for which no notice of default need by given), if either Party (a “ Defaulting Party ”) is in default of any requirement herein set forth the other Party will give written notice to the Defaulting Party specifying the default and the Defaulting Party will not lose any rights under this Agreement, unless within 30 days after the giving of notice of default by the affected Party the Defaulting Party has failed to take reasonable steps to cure the default by the appropriate performance and if the Defaulting Party fails within such period to take reasonable steps to cure any such default, the affected Party will be entitled to seek any remedy it may have on account of such default.

40. FURTHER AGREEMENT

40.1 After the commencement of Commercial Production, either JV Participant may give notice to the other JV Participant requiring such JV Participant to enter into negotiations to settle a detailed operating agreement to supersede this Agreement. The JV Participants will endeavour to settle and execute such an agreement but if they fail to do so this Agreement will remain in full force and effect.

41. ENTIRE AGREEMENT

41.1 This Agreement constitutes the entire agreement between the Parties and, except as hereafter set out, replaces and supersedes all prior agreements, memoranda, correspondence, communications, negotiations and representations, whether oral or written, express or implied, statutory or otherwise between the Parties with respect to the subject matter herein including, without limitation, the Letter of Intent. Notwithstanding the foregoing, the Parties acknowledge and agree that the Royalty is an essential part of this Agreement and cannot be severed.

42. JOINT AND SEVERAL

42.1 The rights and obligations of the Optionors hereunder will be joint and several.

43. GOVERNING LAW

43.1 This Agreement will be governed by and construed according to the laws of British Columbia and the laws of Canada applicable therein. The Parties attorn to, and all actions arising

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from this Agreement will be commenced and maintained in the Supreme Court of British Columbia, other than to enforce a decision or judgment of a British Columbia court.

44. SEVERABILITY

44.1 If any term of this Agreement is determined to be invalid or unenforceable, in whole or in part, that invalidity or unenforceability will attach only to such term or part term, and the remaining part of the term and all other terms of this Agreement will continue in full force and effect. The invalidity or unenforceability of any term in any particular jurisdiction will not affect its validity or enforceability in any other jurisdiction where it is valid or enforceable.

45. AREA OF INTEREST

45.1 If at any time after the Effective Date and prior to the Option Exercise Date, either Temas or Erin or any of their respective Associated Companies stakes or otherwise acquires, directly or indirectly, or pursuant to any third party agreement, any right, title or interest to or in any mining claim, licence, lease, grant, concession, permit, patent, or other mineral property, surface rights or water rights (collectively, the “ Area of Interest Property ”) located wholly or in part within the Area of Interest such acquiring party will forthwith give notice to the non-acquiring party of such staking or acquisition, the cost thereof and all details in possession of the acquiring party with respect to the nature of the Area of Interest Property and any known mineralization thereon. The non-acquiring party may elect to include the Area of Interest Property as part of the Property, and in the case of such election, such acquisition costs with respect to the Area of Interest Property will be paid 100% by Temas and all acquisition costs of Temas will be treated as Expenditures for the purpose of Sections 2.

45.2 On or after the Option Exercise Date, each JV Participant hereby covenants and agrees with the other that if it, or any Associated Company of it (an “ AOI Offeror ”) stakes or otherwise acquires, directly or indirectly or pursuant to any third party agreement, any Area of Interest Property located wholly or in part within the Area of Interest, the AOI Offeror will forthwith give notice to the non-acquiring JV Participant of such staking or acquisition, and will promptly offer, or in the case of an Associated Company, use its best efforts to cause such Associated Company to offer such interest to the other JV Participant (the “ AOI Offeree ”) by notice in writing to the AOI Offeree setting out the nature of such mineral interest and including all information known by the AOI Offeror about such mineral interest, the AOI Offeror’s, or its Associated Company’s, acquisition costs and all other details relating thereto and if, within 60 days from the date of the receipt of such notice, the AOI Offeree accepts such mineral interest by notice in writing to the AOI Offeror and pays to the AOI Offeror a portion of the AOI Offeror’s acquisition costs as set out in such notice equal to the AOI Offeree’s Interest in the Property as of the date of the notice, such mineral interest will become part of the Property and any acquisition costs so paid will form part of that JV Participant’s Costs.

45.3 Each JV Participant hereby covenants and agrees with the other to use its best efforts in any acquisition agreement under which it acquires any interest in minerals within the Area of Interest to acquire a 100% undivided interest in such minerals subject only to royalty interests in favour of the property vendor and financial provisions contemplating the use of one processing facility for ores derived from the various properties in the Area of Interest and to obtain

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unencumbered rights to assign an interest in any such agreement and the mineral rights related thereto pursuant to the provisions of this Agreement.

46. COUNTERPARTS

46.1 This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument.

IN WITNESS WHEREOF the Parties hereto have executed these presents as of the day and year first above written.

ERIN VENTURES INC.

Per: (signed) “Tim Daniels” Authorized Signatory

BALKAN GOLD D.O.O.

Per: (signed) “Biljana Rankic”

Authorized Signatory

TEMAS RESOURCES CORP.

Per: (signed) “Michael Dehn” Authorized Signatory

SCHEDULE “A” - THE PROPERTY

Piskanja Project

Licensed Claims:

The area, where the retention of rights to the exploration area is approved, is located on the territory of Raska municipality, and is determined by the coordinates X and Y in points 1 to 4, as follows:

X Y 1. 4. 803 000 7. 471 000 2. 4. 804 750 7. 471 000 3. 4. 804 750 7. 472 750 4. 4. 803 000 7. 472 750

and it is marked on the overview map (drawing) on the scale of 1: 50,000 which is an integral part of this decision. The area of the space for which the exploration rights are retained is 3.06 km[2] .

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Jarandol Project

Jarandol agreement terms

“Kop Project” – a Serbian mineral exploration company owned, in part, by Dusan Podunavac, a Director of Erin, has been granted the exploration license for Jarandol, as Erin itself was not eligible to reapply for the Jarandol License once relinquished.
The Jarandol license covers 20.97 square kilometers, is valid until February 2022, and is extendible thereafter for up to 8 years in total, subject to certain conditions.
No consideration will be paid to Kop Project by Erin for the rights contained within this agreement.
It is the intention of the parties (Kop and Erin) to conduct future exploration on Jarandol by way of a strategic partnership with a third-party investor.
Erin has the right to earn an interest in any future strategic partnership with a third-party investor by contributing its previous exploration data from 2013 to 2018 (but is not obligated to do so), with the terms of such a partnership to be negotiated.
Erin has the right of first refusal to match any third-party investor’s offer to finance future exploration at Jarandol (but is not obligated to do so), on the same terms and conditions as those offered by the third-party.
Notwithstanding any agreement with a third-party investor regarding future exploration at Jarandol, Erin is granted, free of any charge, the exclusive right to full access/usage of any land without restriction within the Jarandol Licence area, which may be required by Erin for future geological research and/or mine development/operation of Erin’s Piskanja project.
The agreement remains in full force and effect for the period equaling that of a valid exploration license at Jarandol, including all permitted extensions.
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Jarandol license claims:

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[End of Schedule “A”]

AI assistant

Boron One Holdings Inc. — M&A Activity 2021

43998_rns_2021-06-25_193d5722-2f81-42a8-82bd-d5a664e6ca05.pdf

PISKANJA AND JARANDOL PROJECTS

OPTION AND JOINT VENTURE AGREEMENT

AMONG:

AND

AND

TABLE OF CONTENTS

OPTION AND JOINT VENTURE AGREEMENT

1. DEFINITIONS AND INTERPRETATION

2. CONDITION PRECEDENT

3. OPTION

4. MILESTONE EVENTS

5. MUTUAL REPRESENTATIONS AND WARRANTIES

6. REPRESENTATIONS AND WARRANTIES OF THE OPTIONORS

7. REPRESENTATIONS AND WARRANTIES OF TEMAS

8. COVENANTS OF THE PARTIES

9. OPTION ONLY

10. JV COMPANY

11. ASSOCIATION OF JV PARTICIPANTS

12. INTEREST OF JV PARTICIPANTS

13. OPERATOR

14. POWER AND AUTHORITY OF OPERATOR

15. DUTIES AND OBLIGATIONS OF THE OPERATOR

16. PROGRAMS DURING OPTION PERIOD

17. PROGRAMS AFTER OPTION EXERCISE DATE

18. PRODUCTION PROGRAMS

19. TECHNICAL COMMITTEE

20. POWERS OF TECHNICAL COMMITTEE

21. OPERATING PROGRAMS, BUDGETS AND PAYMENTS

22. DISPOSITION OF PRODUCTION

23. AUDIT

24. SHARING OF AND CONFIDENTIAL NATURE OF INFORMATION

25. LIMITED CHARGING

26. RESTRICTIONS ON ALIENATION

27. LIABILITY OF THE OPERATOR AND INDEMNITY

28. LIEN

29. ENCUMBRANCE, PARTITION AND INDEMNIFICATION

30. DISPUTE RESOLUTION

31. NOTICE

32. FURTHER ASSURANCES

33. MANNER OF PAYMENT

34. TERMINATION

35. TIME OF ESSENCE

36. HEADINGS

37. ENUREMENT

38. FORCE MAJEURE

39. DEFAULT

40. FURTHER AGREEMENT

41. ENTIRE AGREEMENT

42. JOINT AND SEVERAL

43. GOVERNING LAW

44. SEVERABILITY

45. AREA OF INTEREST

46. COUNTERPARTS

BALKAN GOLD D.O.O.

TEMAS RESOURCES CORP.

SCHEDULE “A” - THE PROPERTY

Piskanja Project

Licensed Claims:

Jarandol Project

Jarandol license claims:

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Boron One Holdings Inc. M&A Activity 2021