A Grubstake Agreement is a type of contract between two parties in which one provides the other with resources or capital for a specific venture or enterprise in exchange for a share of the profits. The party providing the resources is known as the grubstakeer,” while the recipient is known as thegrubstakeakee.” There are two main types of Grubstake Agreements: equity-based agreements, which involve the grubstake providing capital or resources in exchange for a percentage of the profits, and debt-based agreements, which involve the grubstake providing capital or resources in exchange for repayment with interest.
Grubstake Agreement
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Description
Grubstakes are supplies or funds furnished a mining prospector on promise of a share in his discoveries. It is also material assistance (such as a loan) provided for launching an enterprise or for a person in difficult circumstances.
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