Mining Contract Draft?

[Sticks]

I'm getting ready to head out to my claim. I have a couple of people going with me and I am working on drawing up a contract for all involved. On any other trip I did this without a contract, things were fine that way. I have seen other ops fail due to friction between workers and fair splits. I own the claim along with my Wife who has a share on paper, there is another co owner who at this time does not want a split as he will not be working with us. I am providing trommel, pumps, all the equipment, food, fuel, portapottys, etc. I proposed a share for Myself, Wife who is the camp cook and camp watchman, a share to the Claim to cover expenses, and an additional share for the trip's investor. The investor kicked in $1500 for the trip and wants his cash back and a daily share. So that said if I had only one person working with me he should expect a 1/5 of the days take. Two people digging together move more than one, three even better and so on up to 4 max. That would be two digging and drilling, one feeding trommel and one handling tailings. I brought this ratio up and was met with stiff resistance. Am I being greedy or selfish? I'm on good gold with heavy overburden of 6-10' and large boulders that will be drilled and popped. I have over 50k tied up in this so far in equipment and claim block. Every penny of the investor's money went toward food for the trip on well planned menus. Any advice on this would be greatly appreciated. I have that pdf from HoserJohn with a mining contract, but it would need to be tweeked to cover this. The guys like to screen and run cons daily in gold genie and desert fox wheel. I save the tailings from cons to be crushed and tabled later at home, those I consider mine.

 

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[Sticks]

I'm trying not to come off sounding like a greedy claim owner. We would have to pay a cook/watch person anyway, and I like clean hands preparing my food. The only wiggle room I have would be on the share going to the claim to cover expenses and I've been trying to figure that end out. I could put a cap on that split that would only pay on that split until the actual costs of the trip are covered. All receipts have been logged and are available to view. Once the actual costs have been met then everyone's shares would increase. How would you do it? 5 week trip by the way

 

[Clay Diggins]

Sounds more than fair. Your gold - your equipment - your rules.

Heavy Pans

 

[fowledup]

What's the resistance? Now your on the gold, what happens if it petered out on the trip, they gonna chip in to cover your expenses and the investors capitol. I'm with clay, your claim, your gold, sounds fair

 

[goldog]

Come up with a more fair split... Of expenses. Food , fuel , camp labor etc... Hundreds or maybe a grand to participate before the first shovel. Then an even split for diggers. You're 50K in. How much "skin" do they have in the game?

 

[russau]

I once gave a guy that I was teaching to dredge 50% of the cons and he got FIRST CHOICE ! and he even complained about the cut / the way I was teaching him (he had atleast 4 plug ups a hour, and when I told him to stop hogging the material he kept it up) but it was a on-line rant! Obviously I NEVER go out with him ever again!

 

[winners58]

Start with 50% of the box minus costs, makes it seem more fair.
1/3rd to the claim owners/equipment, 1/3 to operating costs (gas/food)
leaves 1/6th cut, the same costs are coming out of your 50% share too.
so your calculation of 1/5th is being very generous.
maybe set a break even point that the share will go up as incentive.

 

[Sticks]

Thanks for all the input everyone. I'm glad none of you thought I was being greedy. The last issue that I have to pencil out is how to deal a split out to late comers, who come down for the day or weekend. It would seem unfair to the regular guys who helped get past the cost of the trip and new guy showing up gets full share. I hate to be this nit picky about it all but if it is on paper and signed by all involved there is nothing to argue about later. I saw more than one blow up in this forum where people were not on the same page and things ended badly. Thanks again.

 

[winners58]

just make it per box, or per cleanup, if someone doesn't work that day they shouldn't get a cut.
the other way I've seen it split up is the claim owner gets the standard 15% royalty of everything.
then a split of the box after costs (food & Gas).

 

[Hoser John]

KEEP IT SIMPLE-wow never saw so much convolution ,investors take daily?? WOW. If someone invests he gets it back at the end of the season IF you make a profit. That's why it's called a investment. Taking daily is way too much work. You spend $2,000 for the weeks costs ,have one good day and then you eat it all the rest of the week whilst you lose and others profit. You have employees who get a weekly cut AFTER COSTS and don't settle for less. All others guaranteed a profit and you take all the risks. Way too convoluted but your op and not mine,thank god. Just modify that contract as use it for a foundation as what you propose type contract is not made, as not reasonable/equateable-John

 

[fowledup]

Is this for a trip or the season? What we do for trips is - If it's a shared op with guests (highbanking, sluice, dredge) it gets split up evenly at the end of the trip, the supplier(s) of the equipment gets an extra share or splits a share. If it's just the partners and we aren't talking about a ton of gold it goes into the jar, which at the end of the year we can pay fees, buy equipment, or throw a party/bbq whatever. If your a guest and your doing your own thing (panning, detecting), well your a guest so keep what you find, small caveate to that is if they make a significant find or discovery which we make very clear what that is beforehand. I think a bigger key to that is knowing who to let on the claim before it becomes an issue. If you got folks complaining about the terms now, RED FLAG -look out here she comes!

 

[Sticks]

Contract is for a 5 week trip. No I have no prob with others coming up for weekend and playing around, they keep what they find. If they hit a honey hole it is agreed before hand that we would split 50%. I Like showing new people how to pan. Turn them loose and let them have fun. I only ask that they teach others and remember to vote. Yes I'm sure that I'm making this more complicated than it needs to be. I just want my crew to be on the same page. It is only the new guys that are complaining about the splits. But they are still planning on going so must be ok with it. They will be signing this before they go. As far as the investor goes, I have never done that before. I just came up short after buying Sierra Blaster and Gas Drills. It was either take on the investor and go, or wait another month to pony up the money on my own. Each of these guys was offered the chance to be that investor first, they all declined. A deal is a deal and I will honor it and not change that end of it. I will probably never take one on again. They want to do daily splits, I could care less whether daily or weekly etc. I won't have time to deal with it. Anyway thank you all, I'm leaving in the morning will post a bunch of pics in a month or so. Best to you all.

 

[russau]

Goodluck on your trip! Be safe!

 

[Mad Machinist]

Your claim, your risks, your equipment? As far as I am concerned it is your rules.

The way we ran was it was split 6 ways after costs were taken out with one share going back into the company in order to buy/fund the next venture and to repair/replace equipment.

It worked real well up until two of the group started listening to their wives about how they were getting cheated. Standing rule was anyone could see where the money was going.

No contract is air tight and a good enough attorney can take any contract apart. They got what they wanted. The company was liquidated, hence my rebuilding.

After what happened, I will never again have "partners" only "contractors". Cheaper to pay them under a 1099-G at a set rate and let them worry about the taxes.

I do see a problem with you taking the tailings from the cons home though. If they were recovered by those working there, then whatever is recovered should be split between the group. I see it as double dipping so to speak and could lead to other issues down the road if one of your crew decided to raise a fuss about it.

And giving the investor a daily share plus his money back is a bit unconventional. Like John said, they usually get a percentage at the end of the season. Typically 10-15%.

However you want to write up the contract is up to you, I do think I would pay an Attorney for a few hours of his time to review it though to make sure your but is covered as it seems like you are the one absorbing all the risks.

 

[Sticks]

Trip was a wash, laughable really. 5 weeks turned into 3 months. Winch broke first week, had to use a grip hoist for the remainder of the trip. Never did hit bedrock. Contract was a joke, one of my guys thought running the hoist for a day gave him residuals for the trip. Crew bailed on me and left me to pack tons of gear out by myself. Next year I work alone and if I can't pack it I won't take it. All I can say about any contract you draw up, make sure it states if you do not work that day you don't get a split for the day. I would also add a provision for the fun ones that show up 4 hours late and expect full split. I took something that I used to consider fun and turned it into a nightmare. The real cherry on top was having to deal with all the drama. I know that I brought this on myself but lesson learned, never again. 3 months left of the season, I intend to take a few weeks off to resupply and go back for the last two months. Hopefully I can work the shallow overburden areas and at least try to offset the enormous costs I incurred so far this year. I did make new friends with other mine owners though and for that I am indeed richer. Keep it simple like Hoser John says. Best to you all. Rob

 

[NeoTokyo]

Sorry to hear that it didn't work out for you.

It sounds like if you had a camera crew that it would be good TV though.

Do you have any pictures to share of the trip at least?

 

[fowledup]

Man o man, sorry to hear that. Lesson learned- paper contract won't fix character flaws. Listen more to your gut next time, there are plenty of good folks out there ya just got to sift thru a few sh--h--ds to find them. Better luck the rest of the season and next year. Never give up!

 

[2cmorau]

ever see the movie The Treasure's of Sierra Madre"
feel for ya bro, i know the feeling
but like other's have mentioned, there are good people out there, just takes time,
I know now for myself take baby step with new found friendships
most don't know how physically and mentally challenging dredging can be.
many of the guys i worked with in construction, saw the gold i recovered and begged to go, only to walk out that same day when they experince what it's all about
or worse argued over the spilt even when it was agreed to even share,
take them out for a day of sluicing,, that will tell ya a lot about the person
a good prospecting buddy is hard to find, but they are out thier, most likely never in your neck of the woods

 

[Reed Lukens]

If you had a trommel in there, how big is it and how big of a tractor? Sorry it didn't work out but me and my partner also add a share for my trommel and that pays for maintenance and upgrades if the gold is good.

 

[dredgernaut]

that's so weird , we must know the same people , lol , its best not to involve friends , I'm afraid to let anyone come work , people really go crazy when the see a little color