WHEREAS, Anatolia Jaca, et. al., have authorized ACMDC in filing and securing approval of their mining applications pursuant to their operating agreements with ACMDC; WHEREAS, the Government desires to avail itself of the financial resources, technical competence and skill, which the Contractor is capable of applying to the mining operations of the project contemplated herein; WHEREAS, the Contractor desires to join and assist the Government in the initial rational exploration and possible development and utilization for commercial purposes of copper, gold and other associated mineral deposits existing in the Contract Area (as herein defined); WHEREAS, the Contractor has access to all the financing, technical competence, technology and environmental management skills required to promptly and effectively carry out the objectives of this Agreement; NOW, THEREFORE, for and in consideration of the foregoing premises, the mutual covenants, terms and conditions hereinafter set forth, it is hereby V stipulated and agreed as follows: sEcTtoN I SCOPE 1.1. This Agreement is a Mineral Production Sharing Agreement entered into pursuant to the provisions of the Act and its implementing rules and regulations. The primary purpose of this Agreement is to provide for the . rational exploration, development and commercial ulilizalion ot copper, gold and other associated mineral deposits existing within the Contract Area, with all necessary services, technology and financing to be furnished or arranged by the Contractor in accordance with the provisions of this Agreement. The Contractor shall not, by virtue of this Agreement, acquire any title over the ContracvMining Area without prejudice to the acquisition by the Contractor of the land/surface rights through any mode of acquisition provided for by law. 1.2. The Contractor shall undertake and execute, for and on behalf of the Government, sustainable mining operations in accordance with the provisions of this Agreement, and is hereby constituted and appointed, for the purpose of this Agreement, as the exclusive entity to conduct mining operations in the Contract Area. '1.3. The Contractor shall assume all the exploration risk such that if no minerals in commercial quantity are developed and produced, it will not be entifled to reimbursement. 1.4. During the term of this Agreement, the total value of production and sale of minerals derived from the mining operations contemplated herein shall be accounted for and divided between the Government and the Contractor in accordance with Section Vlll hereof. t 2 SECTION II DEFINITIONS As used in this Agreement, the following words and terms, whether singular or plural, shall have the following respective meaning: 2.1. M refers to Repubtic Act No. 7942, otheMise known as the,,philippine Mining Act of '1995." 2.2. Aqreement means this Mineral Production Sharing Agreement. 2.3. Associated Minerals mean other ores/minerals, which occur together with the principal ore/mineral. 2.4. Banoko Sentral means Bangko Sentral ng pilipinas. 2.5. Budoet means an estimate of expenditures to be made by Contractor in mining operations contemplated hereunder to accomplish the Work Program for each particular period. 2.6. Bureau means Mines and Geosciences Bureau. 2.7. Calendar Year or Year means a period of twelve (12) consecutive months starting with the first day of January and ending on December 31, while "Calendar Quarter" means a period of three consecutive months with the first calendar quarter starting with the first day of January. 2.8. Commercial Production means the production of sufficient quantity of minerals to sustain economic viability of mining operations reckoned from the date of commercial operation as declared by the Contractor or as stated in the feasibility study, whichever comes first. 2.9. Constitution or Philippine Constitution means the 1987 Constitution ofthe Republic of the Philippines adopted by the Constitutional Convention of 1986 on October 15, 1986 and ratified bythe people of the Republic of the Philippines on Fefiuary 2, 1987. 2.10. Contract Area means the area onshore or offshore delineated under the Mineral Production Sharing Agreement subject to the relinquishment obligations of the Contractor and properly defined by latitude and longitude or bearing and distance. 2.1 1. Contract Year means a period of twelve (12) consecutive monlhs counted from the Effective Date of this Agreement or from the anniversary of such Effective Date. 2.12. Qontractor means Atlas Consolidated Mining and Development Corporation and Anatolia Jaca, Asterio Buqueron, Criteta Bagano, Lucila Pascual, Mercedes Aytona, Regina de Vera, Ricardo Verch;s and Biga Copper Mines, lnc. as represented herein by Aflas Consolidated Mini;g and Development Corporation or their respective assignee(s) or assigneei of interest under this Agreement: provided, That the issignment of iny of 腵 a腌 3 such interest is accomplished pursuant to the pertinent provisions of the implementing rules and regulations of the Act. 2.13. Declaration of Minino Proiecl Feasibilitv means a document proclaiming the presence of minerals in a specific site, which are recoverable by socially acceptable, environmentally safe and economically sound methods specifled in the Mine Development Plan. 2.14. Deoartment or DENR means the Department of Environment and Natural Resources. 2 15 Director meansthe D腵 ector of腒葌ines and ceosciences Bureau 2.16. Effective Date means the date of execution of this Agreement by the Contractor and by the Secretary on behalf of the Government. 2.'17. Environment means all facets of man's surroundings: physical, ecological, aesthetic, cultural, economic, historic, institutional and social. V 2.18. ExDloration means searching or prospecting for mineral resources by geological, geophysical and geochemical surveys, remote sensing, test pitting, trenching, drilling, shaft sinking, tunneling or any other means for the purpose of determining the existence, extent, quality and quantity of mineral resources and the feasibility of mining them for profit. 2.19. Exploration Period shall mean the period from the Effective Date of this Agreement, which shall be for two (2) years, renewable for like periods but not to exceed a total term of six (6) years for nonmetallic minerals and eight (8) years for metallic minerals, subject to the pertinent provisions of the implementing rules and regulations of the Act. 2.20. Force Maieure means acts or circumstances beyond the reasonable control of the Contractor including, but not limited to war, rebellion, jnsurrection, riots, civil disturbances, blockade, sabotage, embargo, strike, lockout, any dispute with surface owners and other labor disputes, epidemics, earthquake, storm, flood or other adverse weather conditions, explosion, fire, adverse action by the Government or by any of its instrumentality or subdivision thereof, act of God or any public enemy and any cause as herein described over which the affected party has no reasonable control. 2.21. means any currency 芈 芅 EOfe]S!_EI9helSe other than the currency of 芈 腀 Republic of the Philippines acceptable to the Government and 芅 Contractor. 腒 2.22. Government means the Government of the Republic of the philippines or any of its agencies and instrumentalities. 2.23. Gross Output means the actual market value of the minerals or mineral products from each mine or mineral land operated as a separate entity, without any deduction for mining, processing, refining, transporting, handling, marketing or any other expenses: provided, Thai if the minerals or mineral products are sold or consigned abroad by the Contractor under C.l.F. terms, the actual cost of ocean freight and insurance shall be & <-K t 4 deducted: Provided further, That in the case of mineral concentrales which are not traded in commodity exchanges in the philippines or abroad such as copper concentrate, the actual market value shall be the world price quotation of the refined mineral products contained thereof prevailing in the said commodity exchanges, after deducting the smelting, refining, treatment, insurance, transportation and other charges incurred in th; process of converting mineral concentrates into refined metal traded in those commodity exchanges. 2.24. Mine Development refers to work undertaken to prepare an ore body or a mineral deposit for mining, including the construction of necessary infrastructure and related facilities. 2.25. Minerals mean all naturally occurring inorganic substances in solid, liquid, gas or any intermediate state excluding energy materials such as coal, petroleum, natural gas, radioactive materials and geothermal energy. 2.26. Mineral Products mean materials derived from mineral ores/rocks and prepared into marketable state by metallurgical processes which include beneficiation, cyanidation, leaching, smelting, calcination and other similar V processes. 2.27. Minino Area means that portion of the Contract Area identified by the Contractor as defined and delineated in a Survey plan duly approved by the Director/Regional Director concerned for purposes of development and/or utilization and sites for support facilities. 2.28. Mininq Ooerations means mining activities involving exploration, feasibility study, environmental jmpact assessment, development, utilization, mineral processing and mine rehabilitation. 2.29. Notice means notice in writing, telex or telecopy (authenticated by answer back or confirmation received) addressed or sent as provided in Section 16.2 of this Agreement. 2.30. Ore means naturally occurring substance or material from which a mineral or element can be mined and/or processed for profit. 2.31. Pollutiqn means any alteration of the physical, chemical and/or biological properties of any water, air and/or land resources of the philippines, or any discharge thereto of any liquid, gaseous or solid wastes or any production of unnecessary noise or any emission of objectionable odor, as will or is likely to create or render such water, air, and land resources harmful, detrimental or injurious to public health, safety or welfare or which will adversely affect their utilization for domestic, commercial, industrjal, agricultural, recreational or other legitimate purposes. 2.32. Secretarv means the Secretary of the Department of Environment and Natural Resources. 2.33. State means the Repubtic ofthe philippines. 2.34. Work Proqram means a document which presents the plan of major mining operations and the corresponding expenditures of the Contractoi in its Contract Area during a given period of time, including the plan and I q I expenditures for development of host and neighboring communities and of local geoscience and mining technology, as submitted and approved in accordance with the implementing rules and regulations of the Act. sEcTtoN rlr TERM OF AGREEMENT 31 This Agreement shall have a term of twenty-five (25) years from Effective Date, and may be renewed thereafter for another term not exceeding twenty-five (25) years. The renewal of this Agreement, as well as the changes in the terms and conditions thereof, shall be upon mutual consent by the parties. ln the event the Government decides to allow mining operations thereafter by other Contractor, this must be through competitive public bidding. After due publication of notice, the Contractor shall have the right to equal the highest bid upon reimbursement of all reasonable expenses of the highest bidder. SECTION IV V CONTRACTAREA 41 Size, Shape, and Location of Contract Area - This Agreement covers a Contract Area of approximately Six Hundred Forty-Eight and 0159/10,000 (648.0159) hectares in 9 parcels, situated in Toledo City, Cebu, and bounded by the following geographical coordinates (please refer to ANNEX "B" - 1:50,000 scale Location Map/Sketch Plan): A. For the Whole Area: CORNERSLAT:TUDE LONGITUDE 1 10膋18i43018腧 123膞43i05196" 210膋18i53035'' 123膋 42'37399" V 310膋18'43859腡 123膋42'34028腡 4 10膋18153874腡 123膋 42106231腡 510膋19:21402" 123膋42116344" 610膋19124741" 123膋 42'07078腧 710膋20105819" 123膋 42122170" 810膋20106317腡 123膋42i17371" 910膋 20:45161腡 123膋 42'21489" 1010膋 20i44142" 123膋 42131296腡 10膋20'09300" 123膋42i27602腡 12 10膋20i03943" 123膋 42'42467" 13 10膋19i54767" 123膋 42'39095腡 14 10膋19'51429腡 123膋 42'48861腡 15 10膞 20'09781腡 123膋42155105腡 16 10膋20:03103腡 123膋 43i13637" 17 10膋20117883" 123膋43'15480" 18 10膋20'21386" 123膋43'15480腡 19 10膋20i21386" 123膋 43'23608" 20 10膋 20'30001" 123膋43123608腡 21 10膋20'30000腡 123膋 43i27366腡 22 10膋20'17882" 123膋43127783腡 腁 访 6 23 10膋 20:17883腡 123膋43'15480" 24 10膋20'03103" 123膋 43:13637腡 25 10膋 19'35576'' 123膋 43'03522" 26 10膋 19'38914腡 123膋 42'54256" 27 10膋19:29738" 123膋 42150884腡 28 10膋19i26400" 123膋 43i00150" 29 10膋19'35576腡 123膋 43'03522" 30 10膋19:32236腡 123膋 43'12788腡 31 10膋19:41412腡 123膋 43'16159" 3210膋19'38074" 123膋 43125425腡 3310膋19i28898" 123膋 43i22053腡 34 10膋19'32236" 123膋 43'12788" 35 10膋19'23060" 123膋43'09416" 36 10膋19'19722腡 123膋 43'18682" 3710膋 19128898" 123膋 43'22053腡 3810膋 19i25558" 123膋43i31319" 3910膋 19'29029" 123膋43'32595" 4010膞 19'29029腡 123膋 43'35238" 41 10膋19:48558" 123膋43135237腡 V 42 10膋19'48558" 123膋 43'45097" 43 10膋20108087腡 123膋 43'45096" 44 10膋20:09292腡 123膋43144555腡 45 10膋20:09403" 123膋43147840腡 46 10膋20i12820" 123膋 43'47722" 47 10膋20'12953" 123膋43'51664" 48 10膋20'15880腡 123膋 43'51564" 49 10膋20119494腡 123膋43157359腡 50 10膋20148770" 123膋43:56351腡 5110膋 20'48664腡 123膋 43:53222" 52 10膋20150640腡 123膋43'53222" 5310膋 20:50641腡 123膋 44103082腡 54 10膋20140877'' 123膋44:03083" V 55 10膋20'40877腡 123膋44'12943" 5610膋20135736腡 123膋44:12944腡 57 10膋20:35059'' 123膋44111297腡 58 10膋20'26040" 123膋 44'15076" 59 10膋20'22298腡 123膋44:05969腡 60 10膋20117801" 123膋44i07853腡 6110膋20:14572" 123膋 44102207" 62 10膋20i06116" 123膋 44'07137" 膍 6310膋 20'01234腡 腅 123膋 43158598腡 腀 腀 腀 64 10膋19152777" 123膋44103528" 腀 腀 65 10膋19:47895" 123膋 腒 43'54989" 腅 6610膋 19'39439腡 123膋 43'59919" 6710膋 19'29706" 123膋 43:42821腡 68 10膋19:22220" 123膋 43'40585腡 6910膋 18154691腡 123膋43'30470" 70 10膋18158031腡 123膋 43i21204腡 71 10膋 18139679'' 123膋 43'14461" Area1 648.0159 hectares 莋 荭 鏂 7 B PARCEL-1 Contractor : ACMDC Area : 546.2330 Hectares CORNER LATITUDE LONG:TUDE 1 10膋 18'43859'' 123膋42'34028" 210膋18'53874" 123膋 42'06231" 310膋 19'21402" 123膋 42'16344" 4 10膋 19'24741" 123膋 42'07078" 510膋20'05819" 123膋 42'22170" 610膋20'06317'' 123膋 42'17371" 710膋 20'45161" 123膋 42'21489" 810膋 20'44142" 123膋 42'31296" 910膋20'09300" 123膋42'27602" 10 10膋20'03943" 123膋42'42467" 10膋19'54767" 123膋42'39095" V 12 10膋19'51429" 123膋42'48361" 13 10膋20'09781" 123膋 42'55105" 14 10膋20'03103'' 123膋 43'13637" 15 10膋20'17883" 123膋43'15480" 16 10膋20'21386" 123膋43'15480" 17 10膋20'21398'' 123膋43'27662" 18 10膋20'18527" 123膋43'27761" 19 10膋20'17882" 123膋43'27783" 20 10膋20'17884" 123膋 43'25341" 21 10膋20'17883" 123膋43'15480" 22 10膋20'03103" 123膋 43'13637" 23 10膋19'35576" 123膋43'03522" 24 10膋 19'38914" 123膋 42'54256" 25 10膋 19'29738" 123膋 42'50884" V 26 10膋19'26400" 123膋 43'00150" 27 10膋19'35576" 123膋 43'03522" 28 10膋19'32236" 123膋 43'12788" 29 10膋 19'41412" 123膋 43'16159" 30 10膋19'38074" 123膋 43'25425" 31 10膋19'28898" 123膋43'22053" 32 10膋19'32236" 123膋43'12788" 33 10膋19'23060" 123膋 43'9416" 34 10膋19'19722" 123膋 43'18682'' 35 10膋19'28898'' 123膋 43'22053" 36 10膋19'32236" 123膋 43'12788" 37 10膋19'28898" 123膋 43'22053" 38 10膋19'25558" 123膋43'31319" 39 10膞19'29029" 123膋43'32595" 40 10膋 19'29029" 123膋 43'35238" 41 10膋 19'32512" 123膋 43'35238" 42 10膋19'38793" 123膋43'35237" 43 10膋 19'42712" 123膋 43'35237" 44 10膋20'19494" 123膋 43'57359" d腍 腵 8 4510膋20'26230''123膋43'57127" 4610膋20'26230''123膋43'59089" 10膋20'26230" 47123膋44'00026" 4810膋20'26230'' 123膋44'04321" 4910膋20'31317"123膋44'2190" 10膋20'35059" 50123膋44'11297" 5110膋20'26040"123膋44'15076" 10膋20'22298" 52123膋44'5969" 5310膋20'22601''123膋43'59671" 10膋20'22645''123膋43'58762" 54 5510膋20'20244"123膋43'58572" 10膋20'19494"123膋 5643'57359" 10膋19'42712"123膋43'35237" 57 10膋19'38162"123膋43'37891" 58 10膋19'29706"123膋43'42821" 59 10膋19'22220"123膋43'40585" 60 18'54691"123膋43'30470" 10膋 61 10膋18'58031''123膋43'21204" 62 18'39679"123膋43'14461" 10膋 63 V 18'53035"123膋42'37399" 6410膋 C PARCEL-2 Contractor : Asterio Buqueron 13.7760 Hectares Area LONGITUDE LAT:TUDE CORNER 123膋43'45114" 10膋20'04798" 20'08087"123膋43'45096" 210膋 20'09292"123膋43'44555" 310膋 20'09403"123膋43'47840" 410膋 20'12820"123膋43'47722" 10膋 V 5 10膋20'12953"123膋43'51664" 6 10膋20'15880"123膋43'51564" 720'17694"123膋43'54483" 810膋 20'19494"123膋43'57359" 910膋 1010膋20'20244"123膋43'58572" 10膋20'22645"123膋43'58762" 1210膋20'22298"123膋44'05969" 1310膋20'17801" 123膋44'07853" 1410膋20'14572" 123膋44'02207" 1510膋20'12128"123膋 43'57933" 1610膋20'09689" 123膋43'53667" 1710膋20'04807'' 123膋43'45128" 药 腁 菊 荷 9 D. PARCEL-3 Contractor : Anatolia Jaca Area : 25.9377 Hectares CORNER LATITUDE LONG:TUDE 荮 裪腀 10膋 19'34.556" 123膋 43'51.380" 腀 腀 腀 210膋19'43.044" 123膋 43'46.429" 腀 腀 芏 310膋 19'48.559" 123膋 43'43.214" 膜 4 10膋19'48.558" 123膋 43'45.097" 510膋 19'53.559" 123膋 43'45.097" 6 10膋 19'56.383" 123膋 43'50.038" 7 10膋 20'01.234" 123膋 43'58.598" 810膋 20'09.689" 123膋 43'53.667" 910膋 20'14.572" 123膋 44'02.207" 10 10膋20'06.116" 123膋 44'07.137" 10膋20'01.234" 123膋43'58.598" 12 10膋 19'56.383" 123膋 43'50.038" 13 10膋19'47.895" 123膋 43'54.989" 14 10膋19'39.439" 123膋43'59.919" E. PARCEL-4 Contractor : Cristeta C. Bagano Area 18.0360 Hectares CORNER LAT:TUDE LONG:TUDE 1 10膋19'29.706" 123膋 43'42.821" 2 10膋19'38.162" 123膋 43'37.891" 310膋 19'43.044" 123膋43'46.429" 4 10膋19'47.895" 123膋 43'54.989" 510膋19'56.383" 123膋 43'50.038" 6 10膋20'01.234" 123膋43'58.598" 710膋 19'52.777" 123膋44'03.528" 810膋 19'47.895" 123膋 43'54.989" 910膋 19'43.044" 123膋 43'46.429" 10 10膋 19'34.556" 123膋 43'51.380" F. PARCEL-5 Contractor : Biga Gopper Mines, lnc. Area 21.7797 Hectares CORNER LAT:TUDE LONGITUDE 1 10膋20'26.230" 123膋 43'57.127" 2 10膋20'29.253" 123膋 43'57.022" 310膋 20'31.112" 123腅 43'56.958" 4 10膋20'40.876" 123膋 43'56.622" 510膋20'48,770" 123膋 43'56.351" 610膋20'48.664" 123膋 43'53.222" 710膋20'50.640" 123腅 43'53.222" 810膋20'50.641" 123膋 44'03.082" 910膋 20'40.877" 123膋 44'03.083" 10 10膋20'40.877" 123膋 44'12.943" 10膋 20'35,736" 123膋 44'12.944" 菈 芌 荠 腝 10 12 10膋20'35.059" 123膋 44'11.297" 13 10膋20'31.684" 123腅 44'03.083" 14 10膋20'31.317" 123膋 44'02.190" 15 10膋20'31.112" 123膋44'02.276" 16 10膋20'26.230'' 123膋 44'04.321" 腏 裪 腀 腀 腀 腀 腀 腀 腀 腀 腀 膜 G. PARCEL-6 膜 Contractor : Lucila Pascual Area 0.1033 Hectares CORNER LAT:TUDE LONG:TUDE 1 10膋19'38.162" 123膋43'37.891" 210膋19'42.712" 123膋43'35.237" 10膋19'47.920" 3 123膋43'35,237" 410膋19'48.558" 123膋 43'36.353" 510膋19'48.559" 123膋43'43.214" 610膋19'48.558" 123膋43'45.097" V 710膋19'53.559" 123膋43'45,097" 810膋20'04.798" 123膋43'45.114" 910膋20'04.807" 123膋43'45.128" 1010膋19'56.383" 123腅 43'50.038" 10膋19'53.559" 123膋43'45.097" 1210膋19'48.558" 123膋 43'45.097" 1310膋19'48.559" 123膋43'43.214" 1410膋19'43.044"123膋 43'46.429" PARCEL-7 Contractor : Mercedes Avtona Area : 0.03327 Hectare CORNER LAT:TUDE LONG:TUDE 10膋19'48.558" 123腅 43'36.353" 210膋 19'47.920" 123膋43'35.237" 310膋19'48.558" 123膋43'35.237" PARCEL-8 Gontractor : Regina de Vera Area : 8.9831 Hectares CORNER LAT:TUDE LONGITUDE 10膋 20'01.234" 123膋43'58.598" 2 10膋19'56.383" 123膋43'50.038" 310膋20'04.807"123腅 43'45.128" 4 10膋20'09.689"123腅43'53.667" 莋 荭 ` 苔 軻 腶 PARCEL-9 Contractor : Ricardo A. Verchez Area : 3.1432 Hectares CORNERS LAT:TUDE LONG:TUDE 1 10膋 20'21386" 123膋 43'23608" 210膋20'30001腡 123膋 43'23608" 310膋 20'30000" 123膋 43'27366" 4 10膋20'28286" 123膋 43'27425" 510膋 20'21398" 123膋 43'27662" SECTION V EXPLOMTION PERIOD 51 Timetable for Exploration - The Contractor shall commence Exploration activities not later than three (3) months after the Effective Date for a period of two (2) years, renewable for like periods but not to exceed a total term of six (6) years for nonmetallic minerals and eight (8) years for metallic minerals, subject to annual review and approval by the Director in accordance with the implementing rules and regulations of the Act. 52 Renewal of Exploration Period - ln case the Contractor opts for a renewal of its Exploration Period, it shall file prior to the expiration thereof, a renewal application in the Mines and Geosciences Bureau Central Office, accompanied by the mandatory requirements stipulated in the implementing rules and regulations of the Act. The Director may grant the renewal of the Exploration Period on condition that the Contractor has substantially complied with the terms and conditions of the Agreement. ln cases where further exploration is warranted beyond the six (6) - or eight (8)-year period and on condition that the Contractor has substantially implemented the Exploration and Environmental Work Programs as verified by the Bureau, the Director may further grant renewal of the Exploration Period: Provided, That the Contractor shall be required to set up a performance surety equivalent to the expenditure requirement of the Exploration and Environmental Work Programs. 53 Work Programs and Budgets - The Contractor shall strictly comply with the approved Exploration and Environmental Work Programs together with their corresponding Budgets (please refer to ANNEXES "C" and "D"). The amount to be spent by the Contractor in conducting Exploration activities under the terms of this Agreement during the Exploration Period shall be in the aggregate of not less than that specified for each of the Contract Years, as follows: 陭 膌 腝 12 For the Exploration Work Program: 1st Contract Year : PhP 716,000.00 2nd Contract Year : PhP 32.469.800.00 Total : PhP 33,185,800.00 For the Environmental Work Program : PhP 3,422,733.50 ln the event of renewal of the Exploration Period, the amount to be spent every year shall first be agreed upon by the parties. ln the event of termination of this Agreement, the Contractor shall only be obliged to expend the pro-rata amount for the period of such Contract Year prior to termination. lf during any Contract Year, the Contractor should expend more than the amount to be expended as provided above, the excess may be subtracted from the amount required to be expended by the Contractor during the succeeding Contract Years, and should the 腛 Contractor, due to unforeseen circumstances or with the consent of the Government, expend less during a year, then the deficiency shall be applied to the amount to be expended during the succeeding Contract Years. 54 Relinquishment of Total/Portion of the Contract Area - During the Exploration Period, the Contractor may relinquish totally or partially the original Contract Area. After the Exploration Period and prior to or upon approval of a Declaration of Mining ProJect Feasibility by the Director, the Contractor shall finally relinquish any portion of the Contract Area not necessary for mining operations and not covered by any Declaration of Mining Project Feasibility. 55 Final Mining Area - The Director may allow the Contractor to hold more than one (l) final Mining Area subject to the maximum limits set under the implementing rules and regulations of the Act: Provided that each final Mining Area shall be covered by a Declaration of Mining Project Feasibility. 56 Declaration of Mining Project Feasibility - Within the term of the Exploration Period, the Contractor shall file in the Regional Office concerned, the Declaration of Mining Prolect Feasibility of the Contract Area/final Mining Area supported by Nlining Pro.iect Feasibility Study, Three (3)-Year Development and Construction or Commercial Operation Work Program, complete geologic report, an application for survey and the pertinent Environmental Compliance Certificate, among other applicable requirements. Failure of the Contractor to submit the Declaration of Mining Project Feasibility during the Exploration Period shall be considered a substantial breach of this Agreement. 裪腃 节 膌 Survey of the Contract Area - The Contractor shall cause the survey of the perimeter of the Contract Area/final Mining Area through an application for survey, complete with requirements, filed in the Regional Office concerned simultaneous with the submission of the Declaration of Mining Feasibility. Survey returns shall be submitted to the Regional Director concerned for approval within one (1) year from receipt of the Order of Survey complete q' ==f- r 13 with the mandatory requirements stated in the implementing rules and regulations of the Act. 5.8. Reporting a. During the Exploration Period, the Contractor shall submit to the Director, through the Regional Director concerned, quarterly and annual accomplishment reports under oath on all activities conducted in the Contract Area from the Effective Date of this Agreement. The quarterly report shall be submitted not later than fifteen ('15) days at the end of each Calendar Quarter while the annual accomplishment report shatl be submitted not later than thirty (30) days from the end of each Calendar Year. Such information shall include detailed financial expenditures, raw and processed geological, geochemical, geophysical and radiometric data plotted on a map at a minimum '1:50,000 scale, copies of originals of assay results, duplicated samples, field data, copies of originals from drilling reports, maps, environmental work program implementation and detailed expenditures showing discrepancies/ deviations with V approved exploration and environmental plans and budgets as well as all other information of any kind collected during the exploration activities. All information submitted to the Bureau shall be subject to the confidentiality clause of this Agreement. b. Final Report - The Contractor shall submit to the Director, through the Regional Director concerned, a final report under oath upon the expiration of the Exploration Period which shall be in the form and substance comparable to published professional reports of respectable international institutions and shall incorporate all the findings in the Contract Area including location of samples, assays, chemical analysis, and assessment of mineral potentials together with a geologic map of '1:50,000 scale at the minimum showing the results of the exploration. Such report shall also include detailed expenditures incurred during the Exploration Period. ln case of diamond drilling, the Contractor shall, upon request of the Director/Regional Director concerned, submit to the Regional Office concerned a quarter of the core samples, which shall be deposited in the Regional Office Core Library for safekeeping and reference. c. Relinquishment Report - The Contractor shall submit a separate relinquishment report with a detailed geologic report of the relinquished area accompanied by maps at a scale of 1:50,000 and results of analyses and detailed expenditures, among others. SECTION VI DEVELOPMENT AND CONSTRUCTION PERIOD 6.1. Timetable - The Contractor shall complete the development of the mine including the construclion of production facilities within thirty-six (36) months from the submission and approval of the Declaration of Mining Proiect Feasibility, subject to such extension based on justifiable reasons as the Director may approve, upon recommendation of the Regional Director concerned. 44 r 6.2. Reporting a. Annual - The Contractor shall submit, within sixty (60) days after December 31 of each year, to the Director, through the Regional Director concerned, an annual report, which states the major activities, achievements and detailed expenditures during the year covered, including maps, assays, rock and mineral analyses and geological and environmental progress reports during the Development and Construction Period. b. Final Report - Within six (6) months from the completion of the development and construction activities, the Contractor shall submit a final report to the Director, through the Regional Director concerned. Such report shall integrate all information in maps of appropriate scale and quality, as well as in monographs or reports in accordance with international standards. sEcTtoN v V OPERATING PERIOD 7.1. Timetable - The Contractor shall submit, within thirty (30) days before completion of mine development and construction of production facilities, to the Director, through the Regional Director concerned, a Three-Year Commercial Operation Work Program. The Contractor shall commence commercial utilization immediately upon approval of the aforesaid Work Program. Failure of the Contractor to commence Commercial Production within the period shall be considered a substantial breach of the Agreement. 7.2. Commercial Operation Work Program and Budget - During the Operating Period, the Contractor shall submit to the Director, through the Regional Director concerned, Work Programs and Budgets covering a period of three (3) years each, which shall be submitted not later than thirty (30) days before the expiration of the period covered by the previous Work Program. The Contractor shall conduct Mining Operations and other activities for the duration of the Operating Period in accordance with the duly approved Work Programs and corresponding Budgets. 7.3. Expansion and Modification of Facilities - The Contractor may make expansions, modifications, improvements, and replacements of the mining facilities and may add new facilities as the Contractor may consider necessary for the operations: Provided, That such plans shall be embodied in an appropriate Work Program approved by the Director. 7.4. Reporting a. Quarterly Reports - Beginning with the first Calendar Quarter following the commencement of the Operating Period, the Contractor shall submit, within thirty (30) days after the end of each Calendar Quarter, to the Director, through the Regional Director concerned, a Quarterly Report stating the tonnage of production in terms of ores, concentrates, and their corresponding grades and other types of 莋 腛 腝 45 products; value, destination of sales or exports and to whom sold; terms of sales and expenditures. b. Annual Reports - During the Operating Period, the Contractor shall submit within sixty (60) days from the end of each Calendar year, to the Director, through the Regional Director concerned, an Annual Report indicating in sufficient detail: b.1. The total tonnage of ore reserves, whether proven, probable, or inferred, the total tonnage of ores, kind by kind, broken down between tonnage mined, tonnages transported from the minesite and their corresponding destination, tonnages stockpiled in the mine and elsewhere in the Philippines, tonnages sold or committed for export (whether actually shipped from the Philippines or not), tonnages actually shipped from the Philippines (with full details as to purchaser, destination and terms of sale), and if known to the Contractor, tonnages reflned, processed or manufactured in the Philippines with full specifications as to the intermediate V products, by-products or final products and of the terms at which they were disposed; b2progress Work accomplished and work in at the end of the year in question with respect to all the installations and facilities related to the utilization program, including the investment actually made or committed; and b3 Profile of work force, including management and staff, stating particularly their nationalities, and for Filipinos, their place of origin (i.e., barangay, town, province, region). The Contractor shall also comply with other reporting requirements provided for in the implementing rules and regulations of the Act. sEcTtoN v l FISCAL REGIME 84- General Principle The fiscal regime of this Agreement shall be governed by the principle according to which the Government expects a reasonable return in economic value for the utilization of non-renewable mineral resources under its national sovereignty while the Contractor expects a reasonable return on its investment with special account to be taken for the high risk of exploration, the terms and conditions prevailing elsewhere in the industry and any special efflciency to be gained by a particularly good performance of the Contractor. 82- (15) Registration Fees Wthin fifteen days upon receipt of the notice of approval of the Agreement from the Regional Office concerned, the Contractor shall cause the registration of this Agreement with the said Regional Office and pay the registration fee at the rate provided in the existing rules and regulations. Failure of the Contractor to cause the registration of this Agreement within the prescribed period shall be sufficient ground for cancellation of the same. r 16 8.3. Occupation Fees - Prior to registration of this Agreement and at the same date every year thereafter, the Contractor shall pay to the Municipal/City Treasurer concerned an occupation fee over the Contract Area at the annual rate provided in the existing rules and regulations. lf the fee is not paid on the date specified, the Contractor shall pay a surcharge of twenty five percent (25%) of the amount due in addition to the occupation fees. 8.4. Share of the Government - The Government Share shall be the excise tax on mineral products at the time of removal and at the rate provided for in Republic Act No. 7729 amending Section 151 (a) of the Nationat tnternal Revenue Code, as amended, as well as other taxes, duties and fees levied by existing laws. The Excise Tax shall be timely and completely paid to the nearesl Bureau of lnternal Revenue Office in the province concerned. For purposes of determining the amount of the herein Government Share, the Contractor shall strictly comply with the auditing and accounting requirements prescribed under existing laws and regulations. The Government Share shall be allocated in accordance with Sections 290 and 292 ot Republic Act No. 7160, otheMise known as "The Locat Government Code of 199'1." V 8.5. Pricing of - The Sales Contractor shall dispose of the minerals and by- products produced at the highest market price prevailing in the locality. The Contractor shall also pay the lowest achievable marketing commissions and related fees and shall negotiate for more advantageous terms and conditions subject to the right to enter into long-term sales or marketing contracts or foreign exchange and commodity hedging contracts, which the Government acknowledges to be acceptable notwithstanding that the sale price of the minerals and by-products may from time to time be lower, or the terms and conditions of sales are less favorable, than that available elsewhere. The Contractor shall seek to strike a balance between long-term sales or marketing contracts or foreign exchange and commodity hedging contracts comparable to policies followed by independent producers in the international mining industry. The Contractor shall likewise seek a balanced distribution among consumers. lnsofar as sales to Contractor's affiliate(s) are concerned, prices shall be at arm's length standard, and competing offers for large scale and long-term contracts shall be procured. Before any sale and/or shipment of mineral product is made, existing and future marketing contract(s)/sales agreement(s) shall be submitted to the Director, copy furnished the Regional Director concerned, for registration. At the same time, the Contractor shall regularly inform the Director in writing of any revisions, changes or additions in said contract(s)/agreement(s). The Contractor shall reflect in its Monthly/Quarterly Report on Production, Sales and lnventory of Minerals, as well as in the lntegrated Annual Report, the corresponding registration numbe(s) of the marketing contract(s)/agreement(s) governing the export or sale of minerals. 8.6. Associated Minerals - lf minerals other than copper, gold and other associated mineraldeposifs are discovered in commercial quantities in the Contract Area, the value thereof shall be added to the value of the principal mineral in computing the Government share. r 17 sEcTtoN tx WORK PROGRAMS 9.1. Submission to Government - Within the periods stated herein, the Conhactor shall prepare and submit to the Director, through the Regional Director concerned, a Work program and corresponding Budget f;r the Contract Area stating the Mining Operations and expenditures which the Contractor proposes to carry out during the period covered with the details and particulars set forth elsewhere in this Agreement or in the supporting documents. 9.2. Government's Examination and Revision of Work program - Should the Government decide to propose a revision to a certain specific feature in the Work Program or Budget, it shall, within thirty (30) days after receipt thereof, provide a Notice to the Contractor specifying in reasonable detail its reasons therefore. Promptly thereafter, the Government and Contractor will meet and endeavor to agree on the revision proposed by the Government. ln any event, the revision of any portion of said Work V Program or Budget in which the Government shall fail to notify the Contractor of the proposed revision shall, insofar as possible, be carri;d out as prescribed herein. lf the covernment should fail within sixty (60) days from receipt thereof to notify Contractor of the proposed revisions, the Work Program and Budget proposed by the Contractor shall be deemed to be approved. 9.3. Contractor's Changes to Work Program - lt is recognized by the Government and the Contractor that the details of any Work program may require changes in the light of changing circumstances. The Contractor may make such changes: Provided, That it shall not change the general objective of the Work Program: Provided further, That changes which entail a negative variance of at least twenty percent (20%) shall be subject to the approval of the Director. ln case of any positive variance, the Contractor shall submit to the Director, through the Regional Director concerned, a copy each of the Work Programs, for information. 9.4. The Government's approval of a proposed Work program and Budget will not be unreasonably withheld SECTION X ENVIRONMENTAL PROTECTION AND MINE SAFETY AND HEALTH '10.1. The Contractor shall manage its Mining Operations in a technically, financially, socially, culturally and environmentally responsible manner to achieve the sustainable development objectives and responsibilities as provided for under the implementing rules and regulations of the Act. 10.2. The Contractor shall ensure that the standards of environmental protection are met in the course of the Mining Operations. To the extent possible, control of pollution and the transformation of the mined-out areas or ZK r 48 materials into economically and socially productive forms must be done simultaneously with mining. 10.3. The Contractor shall submit an Environmental Work Program during the Exploration Period as prescribed in the implementing rules and regulations of the Act. '10.4. An Environmental Compliance Certificate (ECC) shall be secured first by the Contractor prior to the conduct of any development works, construction of production facilities and/or mine production activities in the Contract Area. 10.5. The Contractor shall submit within thirty (30) calendar days after the issuance and receipt of the ECC, an Environmental Protection and Enhancement Program (EPEP) using MGB Form No. 16-2 covering all areas to be affected by development, utilization and processing activities under this Agreement. The Contractor shall allocate for its initial environment-related capital expenditures approximately ten percent (10%) of the total project cost or in such amount depending on the V environmental/geological condition, nature and scale of operations and technology to be employed in the Contract Area. 10.6. The Contractor shall submit, within thirty (30) days prior to the beginning of every calendar year, an Annual Environmental Protection and Enhancement Program (AEPEP), using MGB Form 16-3, which shall be based on the approved EPEP. The AEPEP shall be implemented during the year for which it was submitted. To implement its AEPEP, the Contractor shall allocate annually three to five percent (3%-5%) of its direct mining and milling costs depending on the environmental/geologic condition, nature and scale of operations and technology employed in the Contract Area. 10.7. The Contractor shall establish a Contingent Liability and Rehabilitation Fund (CLRF) which shall be in the form of the Mine Rehabilitation Fund (MRF) and the Mine Waste and Tailings Fee (MWTF). The MRF shall be based on the financial requirements of the approved EPEP as a reasonable environmental deposit to ensure satisfactory compliance with the commitments/strategies of the EPEP/AEPEP and availability of funds for the performance of the EPEP/AEPEP during the speciflc poect phase. The MRF shall be deposited as Trust Fund in a government depository bank and shall be used for physical and social rehabilitation of areas affected by mining activities and for research on the social, technical and preventive aspects of rehabilitation. The MWTF shall be collected based on the amounts of mine waste and mill tailings generated during the conduct of Mining Operations. The MWTF collected shall accrue to a Mine Waste and Tailings Reserve Fund and shall be deposited in a government depository bank for payment of compensation for damages caused by the Mining Operations. 10.8. The Contractor shall set up mitigating measures such as mine waste and mill tailings disposal system, mine rehabilitation or plan, water quality 莋 腛 腝 腝 * 19 monitoring, etc. to minimize land degradation, air and water pollution, acid rock drainage and changes in hydrogeology. '10.9. The Contractor shall set up an Environmental and Safety Office at its minesite manned by qualified personnel to plan, implement;nd monitor its approved EPEP. 10.'10.The Contractor shall be responsible in the monitoring of environmental, safety and health conditions in the Contract Area and ihall stricfly comply with all the rules and regulations embodied under DAO No. 2OO0_9g. otheMise known as the "Mine Safety and Health Standards.,, 10.11.The Contractor shall be responsible for the submission of a final mine rehabilitation and/or decommissioning plans, including its financial requirements and incorporating the details and particulars set forth in the implementing rules and regulations of the Act. sEcTtoN xt V RIGHTS AND OBLIGATIONS OF THE PARTIES 1 1.1. Obligations of the Contractor: a. To exclusively conduct sustainable Mining Operations within the Contract Area in accordance with the provisions of the Act and its implementing rules and regulations; b. To construct and operate any facilities specified under the Mineral Agreement or approved Work Program; c. To determine the exploration, mining and treatment process to be utilized in the Mining Operations; V d. To extract, remove, use and dispose of any tailings as authorized by an approved work Program; e. To secure all permits necessary or desirable for the purpose of Mining Operations; f. To keep accurate technical records about the Mining Operations, as well as financial and marketing accounts, and make them available to Government representatives authorized by the Director for the purpose of assessing the performance and compliance of the Contractor with the terms of this Agreement. Authorized representatives of other Government Agencies may also have access to such accounts in accordance with existing laws, rules and regulations; g. To furnish the Bureau all the data and information gathered from the Contract Area and that all the books of accounts and records shall be open for inspectioni 莋 腝 腝 20 h To allow access to Government during reasonable hours in inspecting the Contract Area and examining pertinent records for purposes of monitoring compliance with the terms of this Agreement; To hold the Government free and harmless from all claims and accounts of all kinds, as well as demands and actions arising out of the accidents or injuries to persons or properties caused by Mining Operations of the Contractor and indemnify the Government for any expenses or costs incurred by the Government by reason of any such claims, accounts, demands or actions; ln the development of the community: j.1. To recognize and respect the rights, customs and traditions of indigenous cultural communities over their ancestral lands and to allocate royalty payment of not less than one percent (1%) of the value of the gross output of minerals sold; j.2. To coordinate with proper authorities in the development of V the mining community and for those living in the host and neighboring communities through social infrastructure, livelihood programs, education, water, electricity and medical services. Where traditional self-sustaining income and the community activities are identified to be present, the Contractor shall assist in the preservation and/or enhancement of such activities: j.3. To allot annually a minimum of one percent (1%) of the direct mining and milling costs necessary to implement the activities undertaken in the development of the host and neighboring communities. Expenses for community development may be charged against the royalty payment of at least one percent (1%) of the gross output intended for the concerned indigenous cultural community; j.4. To give preference to Filipino citizens who have established domicile in the neighboring communities, in the hiring of personnel for its mining operations. lf necessary skills and expertise are currently not available, the Contractor must immediately prepare and undertake a training and recruitment program at its expense; and j.5. To incorporate in the Mining Project Feasibility Study the planned expenditures necessary to implement (J.1) to 0.3) of this Section; 腝荷腌ln the development of Mining Technology and Geosciences: k.1. ln the course of its operations, to produce geological, geophysical, geochemical and other types of maps and reports that are appropriate in scale and in format and substance which are consistent with the internationally accepted standards and practices. Such maps shall be made available to the scientific community in the most convenient t 21 and cost effective forms, subject to the condition that the Contractor may delay release of said information for a reasonable period of time which shall not exceed three (3) years; k.2. To systematically keep the data generated from the Contracu Mining Area such as cores, assays and other related information, including economic and financial data and make them accessible to students, researchers and other persons responsible for developing mining, geoscience and processing technology subject to the condition that the Contractor may delay release of data to the science and technology communily within a reasonable period of time which shall not exceed three (3) years; k.3. To transfer to the Government or local mining company the appropriate technology it may adapt in the exploration, development and commercial utilization of the minerals in the Contract Areai V k.4. To allocate research and development budget for the advancement of mining technology and geosciences in coordination with the Bureau, research institutions, academe, etc.; and k.5. To replicate data, maps and reports cited in (k.1) and (k.2) and furnish the Bureau for archiving and systematic safekeeping which shall be made available to the science and technology community for conducting research and undertaking other activities which contribute to the development of mining, geoscience and processing technology and the corresponding national pool of manpower talents: Provided, however, that the release of data, maps and the like shall be similarly constrained in accordance with (k.1) and (k.2) above; l. To incorporate in the lilinjng Feasibility Study the planned expenditures necessary to implement all the plans and programs set forth in this Agreement; and m. To pay all other taxes and fees mandated by existing laws, rules and regulations. 11.2. Rights of the Contractor: a. To conduct Mining Operations within the confines of its ContracuMining Area in accordance with the terms and conditions hereof and without interfering with the rights of other Contractors/Lessees/Operators/ Permittees/permit Holders, b. Possession of the Contract Area, with full right of ingress and egress and the right to occupy the same, subject to surface and easement rights; 莌 腛 腛 22 c. To use and have a( o,.irring,prod,cttnl-nT:.,r3:I,:",:ffi:ff [ffi :H:i::iffi d. 3l"1tx? To sell, assign, transfer, convey or otherwise dispose of a[ its rights, !J",""t: 9ld obrisations.ril", i;;-;;;";J;i.sl'o;ect to tre approval of the Government; e. To employ or bring, into. the philippines foreign technical speciarized personner, inctuorng ft;'i;r;JaraiJ'irenliers ot and famiries as mav be-required i; ,r" oiiil ttreir subject to appticabte raw.s ano "p"iJti"r,J contractor, emptoyment connection ot sucn _rejuriiio;;;-;j;r;il, rhat if the ceases, the applicable rorEiln-jerso;;;iilti" contractor .laws -anA *irf"trn" or.irmiiration sha, appty ro them. Every time ror."tgn i";r;iigi;s '"ru,itirir"o uno where alien executives are employed, ,n ""tt""tru program of training understudies sha be uro",i"i"n. riuliiei Jrproyr"nt shal be timited to rechnologes ,"qr,rrs ;,gir;iiJliarieo traintng and experience subiect to the requiieo aiprJva.i uiJJilxrsting taws, rules and regulationi: V t I-o-:.i19, "l"ement rights and use of timber, water and other natural resources in the Contract Area subject to pertinlni.ta-w-s, rures regulations and the rights ofthird partiei,-- - ano 9. Repatriation of capital and remittance of profits, dividends and interest on toans. subject to existing t"*" ";; d;;g.i;;'.senrrat ng n. to import when necessary all equipment, spare parts and raw materials required in the op;rations in."""orar-ri"" -*iit u*isting and regulations. laws 11.3. Obligations of the Government: V a. To ensure that the Contractor has the Government,s full cooperation in the exercise of the rights granted t,o ii ir'iJ", ini. igl""i!r,, b. To use its best efforts,lo the timely issuance of necessary permits and simitar .ensure the Contract authorizing oocrr"nti ioiiil'oitiu srrr""e ot Area; and c. To cooperate with the.Contractor in its efforts to obtain financing contemplated herein from banks or ottei'fina-nJili'institutons, provided, That such financing-arra";r";i" *iti ;'#e#nt the Contractor,s obtigation onboverim";i ;ili;#rei;; reduce SECTIoN X腡 ASSETS AND EQU:PMENT 12.1. fhe Contractor shall acquire for the that are reasonably estimated to be 鹏 腸l鍤 蝛 铕:醟 軹i銞 Operations. 駡 J苖 腁 貇 r 23 12.2. All materials, equipment, plant and other installations of a movable nalure erected or placed on the Contract Area by the Contractor shall remain the property of the Contractor. The Contractor shall have the right to remove and re-export such materials and equipment, plant and other installations from the Philippines, subject to existing rules and regulations. ln case of cessation of Mining Operations on public lands occasioned by its voluntary abandonment or withdrawal, the Contractor shall have a period of one (1) year from the time of cessation within which to remove its improvements; otherwise, all social infrastructures and facilities shall be turned over or donated tax free to the proper government authorities, national or local, to ensure that said infrastructures and facilities are continuously maintained and utilized by the host and neighboring communities. sEcTtoN x t EMPLOYMENT AND TRAINING OF PHILIPPINE PERSONNEL 13.1. The Contractor agrees to employ, to the extent possible, qualified Filipino 腛 personnel in all types of mining operations for which they are qualified; and after Commercial Production commences shall, in consultation and with consent of the Government, prepare and undertake an extensive training programme suitable to Filipino nationals in all levels of employment. The objective of said programme is to reach within the timetable set forth below the following targets of "Filipinization:" led unsk腡Sk腡ed Clencal PrOfessional Management (%) (%) (%) (%) (%) Year l 100100 100 75 75 Year 3 100100 100 80 80 Year 5 100100 100 90 90 Year 7 100100 100 95 95 Year 10 100100 100 95 95 Year45 100100 100 00 95 V 13.2. Cost and expenses of training such Filipino personnel and the Contractor's own employees shall be included in the Operating Expenses. 13.3. The Contractor shall not discriminate on the basis of gender and shall respect the right of women workers to participate in policy and decision- making processes affecting their rights and benefits. SECT10N XiV ARBITRAT10N 部 14.2. Any. disagreement or dispute which can not be setUed amjcably within a period of one (1) year from the time the issue is raised by a part, shall be settled by a tribunal of three (3) arbitrators. This iribunal shall be constituted as follows: one to be appointed by the Contractor and the other to be appointed by the Secretary. The first two appointed arbitrators shall consider names of qualified persons until agreement on a mutually acceptable Chairman of the tribunal is selected. Such arbitration shall be initiated and conducted pursuant to Republic Act No. 876, otherwise known as the 'Arbitration Act." ln any event, the arbitration shall be conducted applyjng the substantive laws of the Republic of the philippines. 14.3. Each party shall pay fifty percent (50%) of the fees and expenses of the Arbitrators and the costs of arbitration. Each party shall pay its own costs and attorney's fee. SECTION XV V SUSPENSION OR TERMINATION OF CONTRACT, TAX INCENTIVES AND CREDITS '15.1. This Agreement may be suspended for failure of the Contractor: (a) to comply with any provision or requirement of the Act and/or its implementing rules and regulations; (b) to pay on time the complete taxes, fees and/or other charges demandable and due the Government. 15.2. This Agreement terminates or may be terminated for the following causes; (a) expiration of its term, whether original or renewat; (b) withdrrwal from the Agreement by the Contractor; (c) viotation by the Contractor of the Agreement's terms and conditions; (d) failure to pay taxes, fees/or charges or financial obligations for two (2) consecutive years; (e) false statemeni or V omission of facts by the Contractor; and (f) any other cause or reason provided under the Act and its implementing rules and regulations, or any other relevant laws and regulations. 15.3. AII statements made in this Agreement shall be considered as conditions and essential parts hereof, and any falsehood in said statements or omission of facts which may alter, change or affect substantially the fact set forth in said statements shall be a ground for its revocation and termination. 15.4. The Contractor may, by giving due notice at any time during the term of this Agreement, apply for its cancellation due to causes which, in the opinion of the Contractor, render continued mining operation no longer feasible or viable. ln this case, the Secretary shall decjde on the application within thirty (30) days from notice: Provided, That the Contractor has met all the financial, fiscal and legal obligations. 15.5. No delay or omissions or course of dealing bythe Government shall impair any of its rights under this Agreement, except in the case of a written waiver. The Government's right to seek recourse and relief bv all other means shall not be construed as a waiver of any succeedini or other q 25 default unless the contrary intention is reduced in writing and signed by the party authorized to exercise the waiver. 15.6. ln case of termination, the Contractor shall pay all the fees and other liabilities due up to the end of the year in which the termination becomes effective. The Contractor shall immediately carry out the restoration of the Contract Area in accordance with good mining industry practice. 15.7. The withdrawal by the Contractor from the Mineral Agreement shall not release it from any and all financial, environmental, legal and fiscal obligations under this Agreement. 15.8. The following acts or omission, ,nrer a/,a shall constitute breach of contract, upon which the Government may exercise its right to terminate the Agreement: a. Failure of the Contractor without valid reason to commence Commercial Production within the period prescribed; and/or b. Failure of the Contractor to conduct mining operations and other activities in accordance with the approved Work Programs and/or any modification thereof as approved by the Director. 15.9. The Government may suspend and cancel tax incentives and credits if the Contractor fails to abide by the terms and conditions of said incentives and credits. SECTION XVI OTHER PROVISIONS '16.1. Any terms and conditions resulting from repeal or amendment of any existing laws or regulation or from the enactment of a law, regulation or administrative order shall be considered a part of this Agreement. '16.2. Notice All notices, demands and other communications required or permitted hereunder shall be made in writing, telex or telecopy and shall be deemed to have been duly given notice, in the case of telex or telecopy, if answered back or confirmation received, or if delivered by hand, upon receipt or ten days after being deposited in the mail, airmail postage prepaid and addressed as follows: lf to the Government: THE SECRETARY Department of Environment and Natural Resources DENR Building, Visayas Avenue Diliman, Quezon City r 26 lf to the Contractor: THE PRESIDENT Atlas Consolidated Mining and Development Corporation 7th F, Quad Alpha Centrum No. 125 pioneer Street Mandaluyong City, Metro Manila Either party may substitute or change such address on notice thereof to the other party: Provided, That the Contractor shall, in case of any change of address during the term of this Agreement, notify the Director in writing. Failure to do such notification shall be deemed as waiver by the Contractor to be informed about any communications as provided in Section .16.2 above. 16.3. Governing Law This Agreement and the relation between the parties hereto shall be governed by and construed in accordance with the laws of the Republic of the Philippines. The Contractor hereby agrees and obliges itself to comply 腛 with the provisions of the Act, its implementing rules and regulations and other relevant laws and regulations. 16.4. Suspension of Obligation a. Any failure or delay on the part of any party in the performance of its obligation or duties hereunder shall be excused to the extent attributable lo Force Majeure as defined in the Act: provided, That the suspension of Mining Operations due to Force Majeure causes shall be subject to approval by the Director. b. lf Mining Operations are delayed, curtailed or prevented by such Force Majeure causes, then the time for enjoying the rights and carrying out the obligations thereby affected, the term of this V Agreement and all rights and obligations hereunder shall be exlended for a period equalto the period involved. c. The Party, whose ability to perform its obligations is affected by such Force Majeure causes, shall prompfly give Notice to the other in writing of any such delay or failure of performance, the expected duration thereof and its anticipated effect and shall use its efforts to remedy such delay, except that neither party shalt be under any obligation to settle a labor dispute: provided, That the suspension of obligation by the Contractor shall be subject to prior approval by the Director. 16.5. Amendments This Agreement shall not be annulled, amended or modified in any respect except by mutual consent in writing of the herein parties. 荺 芾 芤膌莉 観 ACKNOWLEDGMENT hePh腡 ippineslss :::荔 :11臧 菌 ):[i鷣 鞃 零 譝 1]lJlil願 閩 TN靘 HEREOR I e=量 膋y htt mdamx my雊 譀 鞿4 臨 腡 閣 W-Lh. 7q{'a4c 荂 1陑 赈 莋 Doc. No. 闀 裤 Page No. V Book No. 莆 Series of 腜 芾膌 腜 29