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digger68
11-05-2012, 10:11 AM
Does anyone know where I can get a contract for owner financing a mineral claim? I have looked online and not found what I needed. Tried a few attorneys and they are not interested. Any help is greatly appreciated.:)

AK Nugget
11-05-2012, 05:00 PM
Does anyone know where I can get a contract for owner financing a mineral claim? I have looked online and not found what I needed. Tried a few attorneys and they are not interested. Any help is greatly appreciated.:)

You could try Nolo. I doubt you'll find an agreement specifically for a claim, a more general sales agreement may work.

http://www.nolo.com/products/business-operations/sales-agreements

Neal

geowizard
11-05-2012, 05:18 PM
digger,

I'm having a problem understanding what you want. "Owner finance" means the owner is doing the financing. i.e. self financing. There is no contract for doing your own financing.

If the owner is obtaining outside financial support in the form of a loan, then the financial institution would provide the lending contract.

- Geowizard

digger68
11-05-2012, 05:41 PM
Thank you AK nugget for the link. I think I found something there that I can make work. Geo "owner finance", I am the owner and I will be financing the buyers of my claims.

Bill Bohan
11-05-2012, 05:42 PM
I am asking $50,000 for my nine 40 acre claims on O"Connor Ck .with $12,000 down and payments or royalties to the balance . You probably could not lease a claim for that much.
e-mail me at trampminerllc@hotmail.com

AK Nugget
11-05-2012, 05:42 PM
I was assuming digger as the claim owner wants to sell a claim and tote the note. This is commonly refered to as "Owner Financing" in the Real Estate trade.

Could be digger means something different.

Neal

digger68
11-05-2012, 06:17 PM
Neal, yes that is what I meant. I guess I should of explained myself better. And again thank you.

hybanker
11-05-2012, 08:11 PM
a deed of trust ???

shaftsinkerawc
11-05-2012, 08:23 PM
Keep in mind that you as claim owner are liable for anything the lesee leaves behind if they walk out on your agreement!

geowizard
11-06-2012, 07:44 AM
digger,

That can be handled with a "contract for deed" or mortgage contract. I have seen mining property handled both ways. When the owner (seller) is handling the transaction, a contract for deed is the simple, quick, easy way to document the transaction. If a title company enters the transaction, the title company becomes a guarantor that the deed is good and will transfer at completion of payments. It's the safer, more complex, costly method of transacting the sale. The deed becomes a warranty deed and a mortgage contract is the mechanism used for transfer.

I have found it difficult to find title companies that will handle mining property. Mining property is handled by specialy title companies and there are a few of them. They employ experts in mining title search to do the title search.

As was mentioned above, there are "issues" that need to be covered in a "contract for deed". Ask yourself ALL of the "what if?" questions. Because of the liability involved in the long term, CYA cannot be overstated.

I have leased with option to buy several mining properties in the past. The form is referred to as the "Rocky Mountain" form. It is a generally recognized form that spells out essentially all of the potential problems that need to be addressed in the formal agreement that covers both sides.

- Geowizard

Walt_Anchorage
11-06-2012, 01:21 PM
Tried a few attorneys and they are not interested. Any help is greatly appreciated.:)

Check with the Alaska Miners Association. I'm sure there are attorneys that deal in mining that they can recommend. I think I saw an ad for a mining attorney in one of their publications a while back. As Geowiz said it's important the contract spells out all the problems that can come up. That's the main reason to use an attorney who knows mining and the issues you may encounter.

Brian Berkhahn
11-06-2012, 06:36 PM
Amanda will tell you J.P. Tangen, you can contact him at 907-222-3985.

geowizard
11-07-2012, 06:29 AM
The reason most attorneys aren't interested is "economics". Assuming digger isn't selling off his 100 claim block at Nondalton to the Pebble Consortium, an attorney looks at the economics. The reason most miners don't consult attorneys is "economics".

The risk is enormous.

The top mining attorneys usually want a retainer fee. Retainer fees start at $5K and go up from there. So, if it's a single claim on O'connor creek for $5K, a seller isn't going to lay out $5K for a retainer.

Many buyers want to buy on contract for the obvious reason - there's less risk. If I can buy a claim with $100 down and $100 bucks a year for the next ten years, I probably could prospect the claim in the first year and decide whether it's worth while to continue payment.

The seller has risk. In order to mitigate risk, an all inclusive - tight as a frogs a.. contract is needed.

The buyers reply... "You don't trust me?!!!?"

I'm always assured... "In Alaska, we do things on a handshake!" Who assumes the risk?

- Geowizard

geowizard
11-12-2012, 08:02 AM
"I am asking $50,000 for my nine 40 acre claims..."

Investing in mining claims can be done many ways.

Personally, I believe doing research, prospecting and claiming your own claims is the most direct, low cost way.

If I had $50,000 to invest, here would be one approach;

1. Fly first class on Alaska Airlines Tucson to Fairbanks ($1,000).
2. Buy the H3 Hummer on Craigs list (Fairbanks) for $22,000.
3. Fill up the gas tank for $200.
4. Stop by The Home Depot and get 12 stakes.
5. Drive out to Hattie Creek and stake 3 claims.
6. Drive back to DNR and record the claims ($165).
7. Take a road trip to AMDS in Anchorage. ($100)
8. Buy two Proline Big Bankers with pumps ($10,000)
9. Buy two of everything on the AMDS Gold Recovery Web page ($2500.)
10. Bank the change for operating cost 2013.
11. Park the Hummer at AMDS for Steve to use for an Airport Limo. :)
12. Return to Tucson.

Total = about $50K

- Geowizard

Bill Bohan
11-12-2012, 06:04 PM
Emphasis on being able to drive to the claims Wiz. (You can drive through the claims from Murphy dome road or snow machine 3 miles north from ivory jack road accessed from gold stream road.

But the hummer would be a waste of money. 22 thousand would buy a nice excavator which is more practical.
Again, staking claims does not mean they have gold on them Wiz. The blocks that I have for sale are USGS certified abandoned gold mine.

A Roger Mcpherson had targets just to the North west of my blocks. He still has claims on middle O'connor.
There are claims open to the south of these state claims but the open ground belongs to the borough, and the open blocks are on south of the choke point. I gave an experienced miner a tour and he thought he would just put into the south of me. I encouraged him to do so. (Neighbors improve the value of your claims). He was all juiced that he had the angle on me and we hiked all the way down to the O'connor southern border and he grimmaced when he found out that I had the valley's choke point.

Status on the trenches. The prospector that took the data has decided not to share it with me until it is convenient to him. His hand shake agreement runs out Nov 30, 2012

We went in to pan the trenches and had color in 4 of the 6 pans.....repeatable results

Asking $12,000 down and the rest made up in a royalty agreement (paying me in my gold) seems pretty fair. Reclamation would be a continuation of the O"Connor subdivision and a gravel road to Goldstream road.

geowizard
11-13-2012, 05:44 AM
Bill,

Investing in a gold mine is serious business. Your proposition is certainly interesting.

What would you expect a buyer to invest in order to get to the payback level you would require?

Without production history or any form of drilled or sampled reserves, what would be the expected recovery and over what period of time?

Ultimately, for an investor to look seroiusly at any type of mining investment, there would need to be some form of business model with all of the costs and revenues shown on a spreadsheet.

After that is done, there needs to be an assessment of the probabilities of costs going up and the revenue going down and how far the business model is from the red line. If there is sufficient margin between normal net profit and the red line, then the model satisfies the "stress test" associated with volatility in costs and revenues.

"Color" in the pan sounds good to the uninitiated. How many colors and what size? Five colors (fly specks) at least would indicate a rough estimate of .01 troy ounces per cubic yard. But one test doesn't cut it. That might represent the one and only yard of dirt with gold in it. It would be nice to see a couple dozen trenches at strategic points along the claims with sample results.

- Geowizard

Bill Bohan
11-13-2012, 07:00 PM
Wiz,
I also am willing to entertain a lease per summer with an option to own. This gives the lease holder the option to bail on the claims after one or two seasons and have only committed capital to a sampling program. This is standard good form

The original OConnor report contained gps coordinates of visible gold in pan values. I see I will have to map the coordinates and incorporate the trenching data to update the report.

Why is it on my claims you critique and require visible gold yet on your claims you can call a strike on a deposit when the numbers are in the parts per billion?
I moved in on Ottertail with a pan assay hit of only 800 ppb Au.

A general rule of thumb is that visible gold in a pan is 1ppm
A 31 elemental assay is used to verify and contour the gold deposit if per chance gold does not show up in the assay, (ie gold is rare)

And what of the convienence of being only 4 miles from town? The overhead of OConnor is extremely less than that of Ophir and/or mining on Mars.

Tenor or grade of gold? See, these are a few parameters that make a 3 speck pan out weigh a 5 color pan.


Also in terms of the financial red line Judy Garland's wizard of oz dress just fetched 250,000 dollars at auction. The person who afforded that dress probably has some at risk capital to invest in a drill program.

DanAk
11-13-2012, 08:00 PM
Geo, Did the discovery happen whilst in Tucson, or driving the hummer to the recorders office ??

geowizard
11-14-2012, 06:11 AM
The discovery happened on Hattie Creek. It's a short walk up the creek from the power line.

- Geowizard

Reno Chris
11-14-2012, 11:03 AM
Bill -

I think your claims seem a reasonable value - at least certainly well worth following up on and investigating further. If I were interested in that type of situation, I'd be contacting you to talk about things (However I am not looking for that type of situation). Unfortunately, people with money are very risk averse now and getting money for exploration, mining ventures, etc. is not easy. Sure some is available, but nothing like what one would expect with a price north of $1700 per ounce. One of these days, the price will reach a level that attracts lots of new investments. Those of us who own commercial type claims need to be holding on for that point. I wish I knew when it would happen.

overtheedge
11-14-2012, 11:56 AM
Bill,
Guess it is a good deal for what I consider to be just a lease. Were I to buy in, I get all the risk, reclamation and part of the reward. In order for a royalty clause to be operative, there MUST be a performance issue agreed to. "X" number of yards per season; 10K, 100K, etc. So I really don't have operational control either.

But for those who can operate within a structured environment and will do a sampling program of their own, the price could be very attractive.
-------------------------

A general rule of thumb is that visible gold in a pan is 1ppm.

I forgot all about that one. I think it was because it was a total failure for me.
So last night I figured out why it failed.
#1. 16" pan was standard
#2 150-190 pans per yard (avg. 170)
#3 1ppm per above means a(1) 14 mesh chunky per pan.
#4 I average right about 165 pans per yard.

So why the failure? Eyesight. Visible for me is 200 mesh if the light is right. But I just sorta figured "visible gold" meant +60 mesh. How many flat 60's equals a chunky 14?
eric

Bill Bohan
11-14-2012, 01:57 PM
Thanks for the encouragement gents,
Let me post the trench assays for the trenches On O'connor.
I am trying to get the prospector that took the samples to verify what he bagged and tagged.
I will generate a treasure map of sampling across the nine blocks. I recently moved closer to O'Connor creek so that I can run test pits there on weekends. Mostly I am going to scab numbers off of the old tail piles and hopefully locate a pile that the old miners did not finish processing. We shall get the "Bling" map looking wealthy

Eric
I have assayed pans with visible gold in them. I posted a couple with the Sugar Daddy report. I think I will repost them.

Kinross is suppose to mail me assays to Sugar Daddy. I should have that report out in a couple of weeks.

I due know this. I am not a marketing expert. I due think that somebody such as a realtor

would be able to make a sell even for a better price than I am offering.

I have got to size down . Too manu projects and not enough cash flow to do any of them justice.

I still have 550 dollars worth of assays from the Sam MCcord discovery on Demar Ck.

overtheedge
11-14-2012, 06:44 PM
I understand Bill. It is just a personal thing with me and royalties. To me, they are the equivalent of a non-liquidating debt.

Were I a seller, getting a royalty would be great.

Nice location that simplifies logistics.
-------------------
And the rule of thumb thingy, once a person defines pan size it can be made to work by just defining the "visible" size.
eric