AGREEMENTS

9 Months Ended

Jul. 31, 2016

NOTE 4. AGREEMENTS

Exploration, Development and Mine Operating Agreements

Amended Claims and Lease Agreements with Ben Porterfield

On January 7, 2011, Terra Mining Corporation (“TMC”) entered into an Amended Claims Agreement with Ben Porterfield related to five mining claims known as Fish Creek 1-5 (ADL-648383 through ADL-648387), which claims have been assigned to the TMC Project. As part of this Amended Claims Agreement, Ben Porterfield consented to certain conveyances, assignments, contributions and transfers related to the above five mining claims.

The Amended Lease Agreement, which incorporates the Lease dated March 22, 2005 and the September 27, 2010 Consent between Ben Porterfield and AngloGold Ashanti (USA) Exploration Inc., has a term of ten years, which can be extended for an additional ten years with thirty days written notice. The Amended Lease Agreement defines terms and conditions and requires the following minimum advance royalties:


●		Payment of $100,000 annually on March 22, 2011 (paid).

●		Payment of $100,000 annually on March 22, 2012 (paid), 2013 (paid), 2014 (paid), through March 22, 2015 (paid).

●		2015 payment of $100,000 due on March 22, 2015 was made on May 1, 2015.

●		Payment of $125,000 annually beginning March 22, 2016 through the termination of the Amended Claims Agreement.


●		2016 payment of $125,000 due on March 22, 2016 was made on April 14, 2016.

The Company can terminate the Amended Lease Agreement with the payment of $875,000, less $75,000 paid during the years 2006-2011. The payment may be paid over three annual payments.

TMC has paid in total $500,000 to Ben Porterfield and WMTN issued 500,000 shares of WMTN restricted common stock on March 23, 2011. The common stock was recorded as Contractual Rights at $250,000 or $0.50 per share. The investment in the exclusive rights to the mineral properties is accounted for at cost. As of July 31, 2016, the Company has capitalized $975,000 related to this Claims Agreement.

The Amended Claims Agreement, which incorporates the Lease dated March 22, 2005, provides for a production royalty of 4% of the net smelter return for all minerals produced or sold. The amounts due under this royalty will be offset by any advance royalties that have been paid by the Company. The Company may repurchase 1% of the production royalty right for $1,000,000 and an additional 1% for $3,000,000.

The failure to operate in accordance with the Amended Claims or Lease Agreements could result in the Lease being terminated.

WESTMOUNTAIN GOLD, INC. 10-Q