MINING LICENCE LARGE-SCALE DATED /O , rrft-y zotz - BETWEEN THE REPUBLIC OF SIERRA LEONE AND TONGIIMA LIMITED RELATING TO THE MINING AND COMMERCIAL EXPLOITATION OF THE TONGO-PANGUMA DI,A.MOND FIELDS IN A PROJECT TO'BE KNOWN AS ..THE TONGUMA PROJECT'' IpnnLIAMENT LtBRARy I i -- "ii i rowER Hu.r. FRE;To.*ni; Clause I DEFINITIONS .........,......3 CIAUSC 2 DURATION AND SURRE}.IDER OF MINING LICENCE......................6 Clause 3 RENEWAL OF MINII'IG LICENCE ...................6 Clause 4 REPRESENTATIONS AND WARRANTIES ........................8 Clause 5 WORK OBLIGATIONS ....................9 Clause 6 OBLIGATIONS AND RIGHTS OF THE LESSEE...................................9 Clause 7 SECURITY...... ..:,............... ..............10 clause B SORTING, VALUATION AND SALE oF DIAMONDS.......................11 Clause 9 LOCAL PROCUREMENIT ..............11 Clause 1 0 EMPLOYMENT AND TRAINING ... . ........ ... .... 1 1 Clause 11 HEALTH AND SAFETY........,.... 12 Clause 12 PROTECTION OF THE ENVIRONMENT . . . ..,........,......:.:.......,.. rz Clause 13 MINE CLOSURE AND RECLAMATION ........13 Clause 14 GOVERNMENT ASSISTANTCE ........................14 A1 ulause 15 FISCAL REGIME .........15 CiAUSE 16 LIMITATION ON AGGREGATE FISCAL IMPOSTS.. ......20 Clause 17 MANAGEMENT OF FUNDS 22 Clause 18 FINANCIAL STATEMENTS AND BOOKS ................................... ..'"','."'.'ZZ Clause 19 CONFIDENTIALITY AND DISCLOSURE... ......................24 Clause 20 CHANGE OF CONTROL ............. ,....................25 Clause 21 ASSIGNMENT .......... ......................25 Clause22 SUBCONTRACTORS ........ .........26 Clause 23 FORCE MAJEURE .......26 Clause 24 TERMINATION OF MINING LICENCE .........2j Clause 25 CORRUPT PRACTICES................ ....................28 Clause 26 APPLICABLE LAW... .....................28 Clause 27 CONCILIATION AND ARBITRATION. ..........28 Clause 28 NOTICES ......................29 Clause 29 NON VAzuATION .......29 Clause 30 RATIFICATION ...........29 Schedule 1 THE MINING LICENCE AREA........ ................31 Schedule 2 PROGRAMME OF PROPOSED MINING OPERATIONS ....................40 Schedule 3 MINERALS INCLUDED WITHIN THE MINING LICENCB...............43 Schedule 4 HANDLING, SORTING, VALUATION, SALE AND EXPORT OF DIAMONDS................. ....................43 Schedule 5 MINE CLOSURE AND RECLAMATION ........45 Schedule 6 PROFIT SHARING................ ..........49 Schedule 7 EMPLOYME\IT AND TRAINING........... ........50 MINISTRY OF MINTERAL RESOURCES TONGLIN4A LIMITED Tsts Mttttlvc LrcBNcn AcnBeHaBNr (thig "Agreement") made this day of ^f i \' ,2072 between the Government of Siena Leone (herGafter called the "Less.-or"), represented by the Minister of Mineral Resources (hereinafter calied the "Minister"), of the one part, and Tonguma Limited (hereinafter ca11ed the "Lessee,,, which expression shall include its assigns and successors), a company incorporated in the British Virgin Islands and duly registered to trade in Siema Leone and whose principal office is in Freetown, Sierra Leone, of the other part, WUEREAS, on 29 March2004, Koidu Limited (formerly known as Koidu Holdings S.A.) obtained an Exploration Licence (EXPL. 4104) with respect to an area of approximately BB square kilometres in the Lower Bambara Chiefdom, Kenema District, Eastern Province of Sierra Leone, which area is known as the "Tongo Diamond Field Project," WHEnEAS, Koidu Limited submitted an application for a mining licence on 31 May 2008 over the Tongo Diamond Field Project, WHEREAS, on 11 July 2008, the Director of Mines notified Koidu Limited that its application for a mining lease over the Tongo Diamond Field Project had been approved by the Lessor, WHEREAS, on 5 April 2011, the Director of Mines notified Koidu Lirnited that the Minister of Mineral Resources had granted its request to include the area that is the subject of its Panguma Exploration Licence (EXPL. 09/08) as parl of the area for which approval had been granted for the mining lease referred to immediately above, thus consolidating the two areas, which said consolidated area is more parlicularly described in Schedule I hereto (hereinafter referred to as the "Mining Licence Area"), WHEREAS, the Lessee is a who11y owned subsidiary of Octda Mining Limited and a sister company to Koidu Limited, WHEREaS, Koidu Limited, the Lessor and the Lessee have agreed that the Lessee should enter into this Large Scale Mining Agreernent with the Lessor instead of Koidu Limited, and WHBREaS the Lessee and the Lessor have agreed to enter into this Agreement to confinl the terms and condition upon which the Lessee shall conduct mining operations in the Mining Licence Area. Now TuenppoRp WtrngssETH As Foi_Lows: CLAUSE 1 - DEFINITIONS L l rhe expressions set out below shalr have the following meanings: by or "Affiliate" means any person directly or indirectly controlling, controlled under common control with the Lessee. For the pulposes of thii definition, "control" (including the tenns "controlling", o'controlled by" and "under common control with") means possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person or company, whether though ownership of voting securities, by contract or otherwise; "Anns-Length Transaction" means a contract or agreement that complies with Section 154 of the Mining Law; "AgLeement" means this Mining Licence Agreement, including the schedules hereto, which form an integral part of this Agreement, and references to ttris Agreement include references to such schedules; "Change of Control" means the consummation of any transaction or series of transactions (including, without limitation, any sale, merger or consolidation), the result of which is that the Shareholders that collectrvely beneficially own more than 50Vo of the voting equity of the Lessee before such transaction or series of transactions cease to (i) be the beneficial owners of more than 50o/o of the aggregate voting equity of the Lessee or (ii) have the power to dilect or cause the direction of the manageinent ancl the policies of the Lessee; "Commencement Date" means the date of Parliamentary ratification of this Agreement; "Con'unetcial Production" means the earlier of (x) the first year during which the annual production derived from the Lessee's mining operations under this Agreement generates gross revenues of at least US$20 million for the Lessee, based on its annual audited financial statements, or (v) the fourth anniversary of the Commencement Date. "Control" means ownership of greater than 50% of the share capital of a company and/or the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of an entity, whether through the ability to exercise voting power, by contract or otherwise. "EPA 2008" means the Environmental Protection Agency Act 2008 (as amended or superseded fi'om time to time); "Feasibility Study" means the study to be carried out by the Lessee in relation to the underground development and mining of the first Mining Cel1 within the Mining Lease Area in accordance with Schedule 2 and shali include a bulk sampling programlne, as well as microdiamond analysis. "Income Tax Act" means the Income Tax Act 2000 (as amended or superseded from time to time). "Infrastructure Facilities" means all the structural facilities, whether penlanent or temporaty used by the Lessee in its Mining Operations and shall include offices, living quarters, housing, roads, pipelines, processing plants, hoisting facilities, power houses, generators, water reseruoirs, slimes dams, tailings dumps, workshops, stoLes, warehouses, fuel storage and transpofiation facilities, sofiing offices as well as other immovable structures constructed in the Mining Licence Area, so long as the items to be covered by this definition are included in an itemised list to be provided to the Director of Mines prior to their importation into Sierra Leone; "Lessee" means Tonguma Limited, and sha1l include its assigns and SUCCCSSOTS; "Lessor" means the Govemment of the Repubiic of Sierra Leone; "Mining Law" means the Mines and Minerals Act 2009 (as amended or superseded from time to time) and, save where herein otherwise provided, the expressions def,rned therein shall have the same meanings in this Agreement. "Mining Licence Area" means the area described in Schedule I hereto. "Mining Licence" means the rnining licence granted by this Agreement; "Mining Ce1l" means the minirnum number of "dyke clusters" converged in one area, accessed via a central access, utilizing shared infrastructure, and potentially exploited economically with at least a 10-year life. "Mining Operations" means any activity related to exploration, development, transportation, mining, mineral separation, processing and sorting, administration, nanagement and maintenance of any kind carried out in the Mining Licence Area and in the Lessee's Infrastn:cture in accordance with Schedule 2 hereto. "Nominated Contractors" means foreign contractors required and engaged by the Lessee to cany out Mining Operations. "Parties" means the parties to this Agreement and "Party" means any of thein. "Profit" means the net profit generated by the Lessee in respect of the Tonguma Project (being the net result from operating and trading activity after any taxation expense in accordance with Intemational Financial Reporting Standards) and as I deterrnined by the board of directors of the Lessee to be available for distribution to Shareholders from the Tonguma Project after taking into account the following - 1.1 tax considerations of the Shareholders and the Lessee in reiation to the Tonguma Project (including any assessed losses relating thereto); 1.2 the cash flow and working capital requirements of the Lessee in respect of the Tongurna Project; and 1.3 all investments that the board of directors of the Lessee believes are required for the long-term growth of the Tonguma project. "Minister" means the Minister of Mineral Resources. "Shareholders" means the holders of the voting equity of the Lessee, from time to time. "Sorting Office" means the place, wherever situated in Sierra Leone, where the Lessee or its agent or contractor cleans, sorts, stores and packages its diamonds. CLAUSE 2 * DURATION AND SURRENDER OF MINING LICENCE 2'I Under this Agreement, the Mining Licence is hereby granted (as ML 01112) for a period of 25 (twenfy-five) years from the Commencement Date and shall continue in force until the expiry, sunender or termination of the Mining Licence pursuant to this Agreement. Any renewal of the Mining Licence sha11 be in accordance with this Agreement. 2.2 The Lessee may surrender all or part of the Mining Licence Area to the Lessor at any time during the duration of the Mining Licence by giving at least 90 (ninety) days' written notice to the Director of Mines. Upon such surender, the area surendered shall cease to be parl of the Mining Licence Area and subject to the terms of this Agreement, and shall revert to the Lessor. 2.3 Upon the sun ender, expiration or termination of any portion of the Mining Licence Area or the Mining Licence under this agreement, the Lessee shall be granted a period of sixty (60) days, or such longer period as the Director may cleterrnine, during which the Lessee shali be entitled to decommission and remove all or any part of its plant, infrastrucfute, equipment, machinery and moveable assets from the Mining Licence Area. CLAUSE 3 - RENEWAL OF MINING LICENCE 3.1 The Lessee may apply to the Minister for the renewal of the Mining Licence in respect of all, or part of, the Mining Licence Area at any time not later than one year before the expiry of the Mining Licence. ,/ ,.t , '/, ' ./ .t' .'-...:/.'' a ./ /' /' ,/ /. /' .:r' . / .,,', '' -l tl /)a :ras' Ll 3.2 An application under this Clause 3 shall: 3.2.r state the period, not exceeding fifteen years, for which the renewai is sought; 3.2,2 be accompanied by a statement giving particulars of Mining Operations proposed to be carried out in the period of renewal; 3.2.3 be accompanied by a statement giving details of: (a) the latest proved, estimated or inferred ore reserves; (b) the capital investment to be made in, and production costs and revenue forecasts in respect of the period of renewal; (c) any expected changes in the method of mining and treatment; (d) any likely social impact and any likely effects on the environrnent and proposals for mitigation and compensation measures; (") such further information as the Minister may require; and 3.2.4 sha11, if renewal of the Mining Licence is sought in respect of only part of the Mining Licence Area, be accompanied by a plan and description identifiiing that part of the Mining Licence Area. 3.3 Subject to Clause 3.4, on application duly rnade for the renewal of the Mining Licence, the Minister may renew the Mining Licence with or without variation of the conditions of the Mining Licence, for a period not exceeding fifteen years. 3.4 The Minister shall refuse to renew the Mining Licence on reasonable grounds if: Licence, (ii) 3.4.1 (i) the Lessee is in default of this Agreement or the Mining the development of the Mining Licence Area has not proceeded with reasonable speed; (iii) minerals in reasonable quantities do not remain to be produced; or (iv) he is advised by the Director (as defined in the Mining Law) that the programme of Mining Operations proposed to be carried out is not satisfactory; 3.4.2 the Minister has given to the Lessee notice of his intention to refuse to renew the Mining Licence: (a) giving of the notice particulars of the ground for the intended refusal; and l-',t. .1. ,,!":.:t :,r; // /l:./' t' ,:' '. I /,/\ 7"/ -.,, (_ (b) stating a date before which the Lessee may take appropriate action or make representations in relation to that ground; and 3.4.3 if the Lessee has not before that date made appropriate amendments to its application, or made representations which remove the ground for the intended refusal. CLAUSE 4 - REPRESENTATIONS AND WARRANTIES 4.1 The Lessor represents and warrants, as of the date hereof, that: 4.1.1 Pursuant to the Mining Law, the entire property and control of all minerals in, under or upon the Mining Licence Area is vested in the Lessor which has the sole and exclusive right to grant a mining licence relating thereto free of any lien, claim, or other encumbrance, except for any rights of third parties in accordance with geherally applicable law in Sierra Leone, as applicable on the date hereof; 4.1.2 other than the Mining Licence, there is no valid and subsisting mining licence or mineral right (as defined in the Mining Law) over any minerals located in the Mining Licence Area; 4.1.3 no person (other than the Lessee) has any right or interest in respect of any minerals located over, under or upon the Mining Licence Area or to any improvements thereto and generally agrees to indemnify the Lessee harrnless against any and a1l loss or damage arising out of or in connection with any rights inconsistent with any such warranties. 4.2 The Lessor covenants that the Lessee shall peaceably enjoy and without interruption by the Lessor or by any other person or persons claiming or uncler the Lessor or in trust for it, have the right during the tenl of the Mining Licence to explore for and rline diamonds and other minerals referred to in Schedule 3, and that no other person or entity sha11 have the right to engage in any exploration or Mining Operations or any other activities on, above or below the surface, in the Mining Licence Area during the term of the Mining Licence. 4.3 The Lessee represents and warants, as of the date hereof, that: 4.3.1 The Lessee is a company duly organised, validly existing and in good standing under the laws of the British Virgin Islands. The Lessee has all the requisite power and autirorily to execute and deliver this Agreement and to perform its obl i gations lrereunder. 4.3 .2 The execution and delivery by the Lessee of this Agreement and the performance of its obligations hereunder have been duly authorised by ail necessary corporate or other action on the part of the Lessee , and no further consent or authorisation .-n / 7/.."'i ' ,//,/af,.. /,*: , \-"' t is required of the Lessee's board of directors or its shareholders to authorise this Agreement. 4-3.3 Neither the execution and delivery of this Agreement nor the Lessee's compliance with the obligations contemplated hereby will conflict with or result in a breach or violation of: (i) the organisational documents of the Lessee, (ii) any provision of law applicable to the Lessee on the date hereof or (iii) the terms of any material agreement to which the Lessee is a parfy or by which the Lessee is bound. 4.3.4 The Lessee has the financial and technical capabilities to finance and carry out the Mining Operations in accordance with this Agreement, including Schedule 2 hereto. 4.4 Any breach of representations and warranties in this Ciause 4 shall be deemed to be a breach of this Agre ement. CLAUSE 5 - WORK OBLIGATIONS 5.1 The Lessee sha11 at all times perform its duties, obligations and work in the Mining Licence Area with all due professional diligence and in accordance with the best and safest practice contemporaneously prevailing in the mining industry worldwide. 5.2 The Lessee sha11 proceed with the developrnent of the mine and related plant and facilities, and the mining, milling and processing, of diamonds and related minerals in accordance with Schedule 2 hereto, which the Lessee and Lessor acknowledge shall constifute the programme of Mining Operations in accordance with Section 113(1) of the Mining Law. Any amendment to such programme of Mining Operations sha1l be subject to Section 113 of the Mining Law. 5.3 Immediately after Commencement Date, the Lessee shall secure the Mining Lease Area and sha1l commence with the Feasibility Study on the first Mining Cell. This worh shail be completed within twenfy-four months of the Commencement Date. 5.4 Subject to the Feasibility Study demonstrating viability and a safe working environment, the Lessee sha11 proceed with Mining Operations in accordance with of Schedule 2. Mining Operations sha1l commence within thirty-six months of the completion of the Feasibility Study. 5.5 The Lessee undertakes to be in Commercial Production within fwenfy-four months of the commencement of Mining Operations. CLAUSE 6 - OBLIGATIONS AND zuGHTS OF THE LESSEE 6.1 Subject to the tenls of this Agreement (including but without limitation Clause 16.1 hereofl, the Lessee shal1 at all times comply with the provisions of the Mining Law and other relevant laws and regulations in connection with the carrying out ,'l t, !/./. . ,t1 '?l''"" /il,t.;r,,',,1 \. !;/;z;;::-' // of its obligations and work as described in this Agreement, except to the extent that they are inconsistent with the provisions of this Agreement. 6.2 Subject to its rights under this Agreement, the Mining Law and other generally applicable laws, the Lessee shall have the following rights: 6.2.1 the right within or outside the Mining Licence Area to dig, clean and widen channels in strearns, rivers and watercourses as may be necessary from time to time to permit or facilitate water flow to or from the Mining Licence Area and the Processing Plants and Concentratot; 6.2.2 the right within the Mining Licence Area, to use the water from any natural water colrrse and to return the same together with washing spoils to the river, streatl or watercourse, provided that in so doing, the Lessee shal1 not discharge or permit to be discharged any poisonous or noxjous matter not present in the intake water, and to feil trees and otherwise clear the land to be mined; and 6.2.3 the rights in addition to those set forth in the Mining Law, to construct and operate within the Mining Licence Area roads, living quafters, water supply systems, electric power systems, loading stations, airstrips, storage facilities and recreation facilities and to do any such work or erect any buildings necessary or useful in canying out its operations under this Agreement. Any special permits required for the exercise thereof sha1l be promptly granted by the Lessor, CLAUSE 7 - SECUzuTY 7.I In addition to rts rights under this Agreement, the Mining Law and other generaily applicable 1aws, the Lessee shall have the right, in consuitation with the Lessor, to take such measures as may be required to establish and maintain control over the mining, processing, handling, sorting, storage and transporlation of diamonds within the Mining Licence Area, and, to, flom and in, the Sorting Office, including the right to establish and maintain enclosed and security areas, to prevent access into and egress from such areas and the right to search persons within or seeking access to such areas. '1.2 The Lessor sha1l provide the Lessee with an armed security force, which (i) the Lessee shall be entitled to deploy throughout tlie Mining Licence Area and Sorting Office and to deploy to accompany the Lessee's property at any time when in transit within Sierra Leone but outside of the Mining Licence Area and the Sorting Office, and (2) shall be under the command and control of the Local Unit Commander (LIJC) of Tongo Police Division. '/.3 The Lessor at the request of, and in consultation with, the Lessee shall take such measures as may be agreed with the Lessee in order to ensure the maintenance of proper security in the Mining Licence Area and the Sorting Office, and the surounding areas of both. , . ../,. - a2:.' 10 j/ ...)lr-'. ..rtr/' 1.4 The modalities and scale of the rights confered on the Lessee by this Clause 7 may be reviewed by the Lessor by mutual agreement with the Lessee from time to time. CLAUSE B - SORTING, VALUATION AND SALE OF DIAMONDS 8.1 The Lessor sha11 appoint a Valuer who is acceptable to the Lessee to value the diarrond production of the Lessee hereunder. The Valuer shal1 be a competent, qualified, experienced and independent person recognised as such within the intemitional diamond mining and marketing industry, who can substantiate to the Lessor and the Lessee that his interests and responsibilities outside of his appointment under this Agreement shall not give rise to any material risk of conflict of interest with the due perfotmance of his functions hereunder. If at any time subsequent to his appointment such conflict of interest shall arise, the Lessor shall promptly replace him. 8.2 The Lessee shall, in the presence of a representative of the Lessor, undertake the sorting, valuation, sale and exporl of diamonds and other minerals produced hereunder in accordance with Schedule 4 hereto. CLAUSE 9 - LOCAL PROCUREMENT 9.I In accordance with the Mining Law, the Lessee shal1, in the conduct of its Mining Operations, give preference to products and materials made in Sierra Leone and to setwice agencies located in Siera Leone and owned by Sierra Leoneans, as provided in the Mining Law, to the maximum extent possible and consistent with safety, efficiency and economy. CLAUSE 10 * EMPLOYMENIT AND TRAINING 10.1 In accordance with the Mining Law, the Lessee shall, in the conduct of its Mining Operations, give preference to qualified and competent Sierra Leonean citizens possessing the necessary qualifications and experience, taking into account the requirements of safety and the need to always maintain acceptable standards of efhciency in the conduct of the Mining Operations. 10.2 The Lessee undedakes not to ernploy expatriate workers in unskilled labour positions. For purposes of this Agreement, the Parties agree that "unski11ed" workers are workers who do not require more than basic training to perfonn their duties safely, efficiently and reliably. 10.3 The Lessee shall, in the conduct of the Mining Operations, observe and perfonn the prograrnme for the training and employrnent of Sierra Leoneans as set out in Schedule 7. 10.4 From the commencement of Mining Operations, the Lessee will make available an annual budget of $ 100,000 , (a) 60Yo of which will be used for the training of y'..t ...1/ '".,/r' 11 I ."/,.1::21" t ,,t'/.'',, \' ,.. "j.". -7, { suitable employees at all 1eve1s in Siema Leone and overseas, and (b) 40% for training of Sierra Leone students of secondary school leaving age in various technical vocational institutes in Sierra Leone. i0.5 The Lessee sha1l submit an annual written reporl to the Lessor describing the number of personnel employed, their nationality, their positions and the status of training programmes for citizens of Sierra Leone. 10.6 A11 Siera Leonean employees will be covered under an appropriate insurance scheme at one of the companies registered to conduct such business in Sierra Leone with respect to workmen's compensation. 10.1 The Lessee and its nominated contractors shal1 comply with their obligations under the National Social Security and Insurance Trust Act 2001 ("NASSIT") except with respect to their expatriate employees working in Sierra Leone. i0.B Expatriate employees of the Lessee and its nominated suppliers will be exempted from making any contributions under NASSIT. 10.9 A11 officers and employees of the Lessee shall be governed by the tax and other laws of Siera Leone on a non-discriminatory basis. In respect of such officers or employees who are not citizens of Sierra Leone, the provisions of any treaty or agreement in respect of double taxation as may be concluded between the Lessor and the govetnment of the country of which such officer or employee is a subject or citizen shall be applicable. CLAUSE 1I - HEALTH AND SAFETY 1 1.1 The Lessee shall comply with all health and safety standards and laws that are generally applicable in Siera Leone from tirne to time . CLAUSE 12 - PROTECTION OF THE ENVIRONMENT 12.1 The Lessee sha11 conduct its programme of Mining Operations in accordance with the EPA 2008, as well as Section I32 of the Mining Law and any regulations made under the EPA 2008 and the Mining Law, as amended from time to time. In the event of a conflict between these two acts, the provisions of the EPA 2008 shall prevail, and in the event of a conflict between the regulations made under the EPA 2008 and the regulations made under the Mining Law, the regulations made under the EPA 2008 sha11prevail. 12.2 The Lessee sha1l at ali times do everything reasonable in its power to limit the damage and disturbance to the loca1 environment and populace. The Environment Protection Agency (the "EPA") may at any time conduct periodic inspections of the Mining Licence Area. /, ': ./-/r .' ':t/"/' 't' ' l): , /:,/ ''t "" . \l ut/'.,tr'- -. I2 /,/. l' / (, 12.3 The Lessee shall, in accordance with the EPA 2008, conduct the Mining Operations and all project activity with a degree of care and professionalism that meets or exceeds the best international environmental protection standards. 12.4 In parlicular, the Lessee shall employ in the Mining Operations advanced techniques, practices and methods of operation for the prevention, limitation or treatment of pollution and the avoidance of unnecessary loss of, or damage to, natural resources, in each case in accordance with generally applicable 1aw, as in existence from time to time. 12.5 Notwithstanding anything to the contrary in this Agreement, the Mining Law, the EPA 2008 or any other legislation or regulation, the Lessee sha1l not bear any liability whatsoever in respect of any pollution or loss or damage to the environment or the risl< thereof, or any other claim, where such poliution, loss, damage, risk or claim arises from, or in connection with - 12.5.1 any acts or orlissions in or with respect to the Mining Licence Area prior to 29 March 2004; or I2.5.2 any acts and or omissions caused by illegal artisanal mining prior to or subsequent to 29 March 2004 in areas of the Mining Licence Area that are not fenced and demarcated for the Lessee's Mining Operations. 12.6 The Lessor acknowledges that no additional obligations relating to the protection of the environment will be imposed upon the Lessee save those arising under the EPA 2008. CLAUSE 13 - MINE CLOSURE AND RECLAMATION 13. 1 In accordance with Section 13 6 of the Mining Law, the Lessee shall in the conduct of its Mining Operations observe and perform the programme for mine ciosure and reclamation as set forth in Schedule 5 hereto (the "Closure Plan"). 13.1.1 The Lessee shall provide a financial guarantee that complies with generally applicable 1aw that sha11 assure that the cost of closure shall be borne by the Lessee and not the public. The guarantee sha11 be in an amount calculated to be necessary to implement the Closure Plan should the Lessee fail to implement the Closure Plan. Such guarantee shall be issued either by a financial institution in Sierra Leone that is acceptabie to the Lessor or by a financial institution outside Sierra Leone with a long- term credit rating of at least A (or its equivalent) from at least two internationally recognised credit-rating agencies. Such guarantee may take the form of an irevocable letter of credit or a performance bond in favour of the Lessor to guarante e effective mine reclamation and rehabilitation. In addition, the amount of the guarantee shall be updated any time the Closure Plan is updated, so that it continues to be sufficient to ensure that all steps in the Ciosure Plan can be completed in a satisfactory manner should the Lessee fail to irnplement tire Closure Plan. It is understood that no more than a single financial ,/, .tz / ,:t:,.,,..:2,4..,. i :r/ ".//4.. . lL l-l ../ ,.:,/ . /'/' //. -. .- - tl:' ,' I guarantee shall be required for these purposes, and in case of any conflict belween the EPA 2008 and any other applicable law, the provisions of the EPA 2008 shallprevail. CLAUSE 14 - GOVERNMENT ASSISTANCE 14.I The Lessor shall extend to the Lessee all reasonable assistance to enable and facilitate the Lessee to cany out its functions and achieve its objectives in the best and most efficient manner. The Minister', and other officers of State, boards, commissions and Goverrrment agencies concerned, sha11 make such lawful orders and administrative acts as may be desirable frorn time to time for this purpose. 14.2 Subject to proper undertakings relating to confidentiality, the Lessor sha1l tnake available to the Lessee all aerial, magnetometer and other geological surweys and photographs and all other plans, maps, information and advice relating to the Mining Licence Area which they are at liberty to disclose and shal1 permit the Lessee to obtain copies of all such surveys, photographs, plans, maps and infornation for its own use upon payment of the actual cost of making such additional copies. 14.3 The Lessor shall promptly grant any and all pennits and permissions of whatsoever nature required by iaw for the Lessee to impofi into Sierra Leone direct from extetnal suppliers all goods, foodstuffs and services necessary or desirable for or in connection with the conduct of exploration and the Mining Operations, of such manufacture and types and, subject only to the Mining Law, from whatsoever source as may be determined by the Le ssee. 14,4 The Lessor shall promptly grant any and all permits and pennissions of whatsoever nature required by 1aw for the Lessee to expofi fi'om Sierra Leone any goods imported by it which it no longer requires in the conduct of its prospecting or Mining Operations hereunder, or activities related thereto. 14.5 The Lessor shali promptly grant to the Lessee or its Agent any and all necessary permits or perrnissions of whatsoever nature required by law for the Lessee or its Agent to export diamonds and associated minerals produced in the Mining Operations. 14.6 Subject to the Mining Law, the Lessor shali grant all necessary visas and permits to enable those non-citizens of Sierra Leone who are necessary to be employed in its operations, and their families, to enter and reside in and deparl from Sierra Leone. I4.7 The Lessee and its Affiliates sha11 not solicit current or fonner employees of the Lessor within one year of the termination of their Govemment employment without the prior written approval of the Lessor; provided, however, that the foregoing restriction shal1 apply only to employees who have attained a seniority of "director" or higher. ./t / 7, /:r'/ :' :t: ...': :. ./-2 /t ' .'//. t? ,;'..:171,:'.'( /.y' ,,: / ./ /// ,1 a/ 14 CLAUSE 15 - FISCAL REGIME Auxuar- LB,rsp RENI eno Sunrecn RnNr 15.1 Pursuant to Section 34 of the Mining Law, the Lessee shal1 pay to the Bank of Sierra Leone and without demand, on 1 July 2012 (the "Reference Date") and each anniversary of the Reference Date, the sum of US$500,000 (Five Hundred Thousand United States Dollars) for the credit of the Lessor in respect of an annual lease rent in respect of the Mining Licence Area. 15.1.1 The amount specified in Clause 15.1 above shali be increased (and rounded to two decimal places) with effect from the first anniversary of the Reference Date by an amount equal to 3o/o of the annual lease rent for the previous year. 15-2 The Lessee shall pay a surface rent to the lawfu1 occupiers of the Mining Licence Area. The amount of such surface rent shall be determined pursuant to agreements with the lawfu1 occupiers of the Mining Area. Failing such agreement with any lawfu1 occupiers, the surface rent payable to such occupier sha1l be determined by the Minister of Mineral Resources on the advice of the Minerals Advisory Board in accordance with Section 34A of the Mining Law. INcoiraB T,qx 15.3 The Lessee shall be liable in respect of each financial year to pay income tax (hereinafter referred to as "Income Tax") upon t1-re income derived from its operations conducted in Sierra Leone as provided by generally applicabie 1aw from time to time; provided, however, that at any tirne that the generally applicable income tax rate for mining companies shall exceed 25.}oh, the income tax rate that shall be cleemed to apply to the Lessee at such time shall be25.0o/0. 15.3.1 The Incorne Tax liability of the Lessee in respect of each financial year sha1l be assessed and payable in United States Do1lars, and ali such payments by the Lessee sha11 be made in such currency to the Bank of Sierra Leone for the account of the Lessor, a copy of each payment advice to be furnished to the Commissioner of Income Tax. DeoucrIoNs FRoM CHnRcBaeLE INcoutn I5.3.2 The chargeable income of the Lessee shall, for the purposes of Income Tax, be caiculated as provided by generally applicable 1aw for mining companies fi'om time to time, except as otherwise provided in this Agreement. 15.3.3 No amounts for marketing diamonds, gold or associated minerals to Affiliates may be deducted fi'om the chargeable income of the Lessee for the plrlposes of Income Tax. -l' .,/rt/ , ,ilzr.k' !a: 1.'ll'-, 15 15.3.4 Notwithstanding other-wise applicable law in Sierra Leone, the amount of any operating loss incuned by the Lessee in any financial year may be carried forward and deducted from the chargeable income of the Lessee each year in ful1until the tenth anniversaly of the Cornmencernent Date. Operating losses shall be calculated as provided for in Clause 15.3.2. RovaLrrEs 15.4 The Lessee shall pay royalties on all diamonds produced by Mining Operations as follows: 15.4.1 for all diarnonds whose ex-mine price exceeds $500,000 ("Special Stones"), B.0o%, and 15.4,2 for all other diamonds, the lower of (a) 65% and (b) the royalty on diamonds prescribed by generally applicable law to commercial diamond mining operations from time to time. f5.4.3 With regard to the Mining Law, the ex-mine price for diamonds shal1 be as follows: (a) for each Special Stone, the valuation assigned to such Speciai Stone by an independent Valuer of international repute, whose appointment shall be agreed by each Party, and the royalfy payable sha11 be a percentage of such valuation. (b) for all other diamonds, the actual sales price received and the royalty payable sha1l be a percentage ofthe aggregate ofsuch actual sales price. 15.5 In accordance with the Mining Law, the Lessee sha1l pay a royally on precious metal of 5Yo of the ex-mine price. i5.5.1 In accordance with the Mining Law and any applicable reguiations, the ex-mine price for precious metais shall be determined by reference to the price for the relevant mineral published in the Financial Times of London on the publication day following the date of receipt by the refinery, after any adjustment for any differences in purity, specification or otherwise . 15.6 On or before the fifteenth day of each month, the Lessee shall present to the Director of Mines, with a copy to the Financial Secretary and the Govemor of the Bank of Sierra Leone, a statement celtified by the Lessee's accredited representative showing: (i) the aggregative weight in carats of the various size ranges and categories of diamonds produced by the Lessee in the Mining Licence Area during the preceding month, / .-,/ .-'-. ,,'r:l( o!', - t6 . -2" 1_. (ii) the aggregate weight in carats of the various size ranges and categories of diamonds exported from Sierra Leone by the Lessee or its agents during the preceding month, (iii) the value of diamonds so expofted as determined in accordance with Clause B of this Agreement. Each exporl statement shall be accompanied by a copy of the export entries certificate by the Comptroller of Customs and Excise, and (i") the weight of gold and other precious metals exported from Siena Leone by the Lessee or its Agent during the preceding month. 15.1 On or before the 20th day of the following month after export shipment, the Lessee shal1 pay to The Bank of Sierra Leone (in United States Dollarsf the royulty on the diamonds, gold and other associated minerals exported and sold, a copy of the payment advice to be fumished to the Director of Mines and the Comptroller of Customs and Excise. WrruHor-orNc TAX 15.8 Subject to Clauses 15.8.1, 15.8.2 and 15.8.3 below, payments for interest, dividends and services, including payments to contractors, shall be subject to withholding tax at the stahrtory rates pursuant to generally applicable 1aw from time to time, subject to any treatie s or agreements that the Lessor may have with any other relevant countries; 15.8.i The rate of withholding tax payable on payments for dividends or any other distribution to the Lessee's shareholders shall be five (5)% for the first seven (7) years after Corunercial Production and thereafter in accordance with applicable law. 15.8.2 The rate of withholding tax payable on paymonts for seruices (including payment to contractors) sha1l be five (5)% fot the first seven (7) years after the Commencement Date and thereafter in accordance with applicable law. I5.8.3 The rate of withholding tax payable on management fees to the Lessee's Affiliates shall be five (5)% for the first seven (l) years after the Comtnencement Date and thereafter in accordance with applicable law. 15.8.4 For the avoidance of doubt, the rate of withholding tax payable on interest payments shall be in accordance with applicable law. CuaRcBs oN IMpoRTS 15.9 In this Agreement: (i) the term "Charges on Imports" sha11 include all taxes, duties, excise, charges, ievies, fees, dues, contributions, payments and other impositions of any kind payable to the Lessor or any agency of the Lessor, whether ad '/1."'.:,/ I1 , :t"' '3 /'/'i "...,(,'. (-i/ -,1' \_ valorem, flat rate and otherwise, in respect of imporls into Siema Leone. Charges on Imports shall not include Import Inspection Fees, as defined in clause 15.13; (ii) the term "Fuel and Lubricants,' shall mean all petroleum products used by the Lessee in the course of its business hereunder including diesel, petrol, hear,y fuel oil, lubricants and kerosene ; (iii) the term "Mining Machinery, plant and Equipment" shall include (without limitation) a11machinery, plant, and equipment usefu1 to and used by persons carryjng on mining operations, in clearing land, removing minerals from it and transporting, separating, handling and packaging such minerals for sale, including, but without prejudice to the generality of the foregoing construction materials for mining and processing, pumps, piping, screens, concentrating and separating equipment, power generating and distributing equipment, cranes, lor-ries, road building equipment, mineral storage, conveying and handling equipment, explosives, vehicles, office equipment, building materials and consumable mining stores and packaging facilities, together with accessories, spare parts and appliances to be used in activities necessary for the conduct of the Lessee's Mining operations. 15'10 The Charges on Impotls of Fuel and Lubricants and Mining Machinery, Plant and Equipment sha1l for the duration of this Agreement be in accordance with generally applicable law in Siera Leone, including the provisions of the Customs Act and the Customs Tariff Act; provided, however, that the Lessee sha1l not be required to pay Charges on Imports in excess of those applicable under the ECOWAS Trade Liberalisation Scheme (TLS); provided, further, that the Charges on Impofis of Mining Maclrinery, Plant and Equipment shall not exceed 5.00/o ofthe CIF price of the imporled goods. 15.11 A11 payments of Charges on Imporls by the Lessee hereunder shall be made in United States Dollars to the Bank of Sierra Leone for the account of the Lessor, and the advice accompanying such payment sha1l be copied to the Commissioner- General, National Revenue Authority. 15.12 If items on which no Charges on Impofts are paid are not re-expofied or totaily consumed within 5 (five) years after importation, and are after-wards sold, exchanged or transfened in Sierra Leone (except to the Lessor), the Lessee shall pay to the Lessor the customs import duties and levies on the then fair market value of those items within thirty (30) days of the date of sale, exchanged or transfer. .: ,/, ,/ ,/.:/. / "' ., .' t'.-' /""'t"1'"\'' .'-}' '/j/' l8 Gooos aNo SBnvrcns Tax 15.13 For the duration of this Agreement, the Lessee and its Nominated Contractors shail be exempt from goods and services taxes as provided for in the Goods and Services Act 2009 (as amended or superseded from time to time). Irr,tpoRr INsppcrroN Fnps 15.14 In this Agreement, o'Import Inspection Fees" means the fees payable to the Goverrrment in respect of the inspection of goods importe d into Siera Leone; l5.I4.l Import Inspection Fees may be imposed by the Lessor on the Lesse e in respect of ai1 goods irnported by or on behalf of the Lessee into Sierra Leone in accordance with generally applicable laws in Sierra Leone. 15.14.2 A11 payments of hnporl Inspection Fees by the Lessee hereunder shall be made in United States Dollars to the Bank of Sierra Leone for the account of the Lessor, and the advice accompanying such payment sha1l be copied to the Comptroller of Customs and Excise. 15.14.3 Itnport Inspection Fees shall be invoiced to the Lessee by the responsible Agent duly authorised by the Lessor to act on its behalf. Drar/Equrry Rcrro 15.15 At no tine shal1 the Equity of the Lessee be less than 20o/o of the Affiliated Debt of the Lessee. For purposes of this Clause 15.15, "Affiliated Debt" shall mean the total debt of the Lessee owed to affiliates of the Lessee, and "Equity" shall mean the shareholders' equity in the Lessee, each as defined by International Financial Reporling Standards. ApprLrars TRaNsncrroNs 15.16 Any transaction between the Lessee and any Affiliate of the Lessee shall be at an arm's-length fee basis negotiated between the parties in substantial accordance with the substantive principles and guidelines set forlh in the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administratiors published by the Organization for Economic Cooperation and Development or subsequent substantive guidelines having a similar pulpose agreed to by the Parties. 15.I7 Any discounts or commissions allowed in transactions between the Lessee and its Affiliates shall be no greater than the prevailing rate so that such discounts or commissions will not reduce the net proceeds below those which it would have received if the parties had not been Affiliates. i5.18 Any such transaction sha1l be accompanied by contemporaneous documentation. In particular, the Lessee sha1l make sales commitments to Affiliates only 19 "'/'"':i1":'';'l' ..'.:.""'oz'1 .;'( '/r'1/:, ..'.'' -!.. .l1o/o.:' at prices based on or equivalent to sales in Arms-Length Transactions to non-affiliated purchasers and in accordance with such terms and conditions on which agreements would be made if the parlies had not been affiliated. The Lessor shall have tG right to review the tenns of all transactions between the Lessee and any Affiliate of the Less-ee, including documentation therefor. CoHavuNrlv DnvBlopl,rENT FLND CoNtzueuttoNs 15.19 It is the objective of the parlies hereto that the Lessee's Mining Operations shall be carried out in a manner that is consistent with the continuing ""ono-i. and social viability of centers of population surrounding the Mining Licence Area. Upon request of the Lessor at any time, the Lessee sha11 consult with the Lessor ancl the communities in the Mining Area to establish plans and programs for the implementation of this objective, and thereafter the Lessee sha1l in good faith cooperate with the Lessor with regard to its effbrts concerning the realisation of such plans and programs. into a 15.20 In accordance with Section 139 of the Mining Law, the Lessee shail enter Community Development Agreement with the primary host community (as contemplated by Section 139 of the Mining Law), pursuant to which the Lessee shall make payment each year to a community development fund of one-quarter of one per cent (0.25%o) of the Lessee's sales revenue in uS Dollars for such year. Pnoprr SHaRruc 15'2I The obligations of the Parties set forth in Schedule 6 hereto are hereby incorporated by reference herein. RrNc FpNcrNc 15.22 To the extent that the Lessee conducts activities constituting the canying on of business or investment activities for the production of income that are not related to or contemplated in connection with the Mining Operations, such activities (the "Non- Tonguma Activities") shall be accounted for and treated for purposes of this Clause 15 as if these Non-Tongun-ra Activities are carried on by a legal entity separate from the Lessee and not subject to this Clause 15, but rnstead subject to all applicable laws of Sierra Leone (subject to any contractual alrangements with the Government of Sierra Leone), so that the Lessee's activities conternplated by this Agreement in underlaking the Mining Operations are treated as "Ring Fenced" (i.e., separately treated as the sole activities of Lessee). With respect to the fung Fenced Mining Operations of the Lessee, the provisions of this Agreement shallapply. CLAUSE 16 - LIMITATION ON AGGREGATE FISCAL IMPOSTS 16.1 For the duration of this Agreement, no taxes (including, but without limitation, income tax, additional profits tax, surtax, Minor Taxes, profits tax, tumover tax, sales tax, export tax, impoft tax, vahre added tax, withholding tax and employment ,,/ ..1 ::t 'lt'"-"/ / /t/ r',/ 20 ,'/. ,' .. .,' /.1;' ,,'.. ; .'. './ /',/ y'' ,/r .,,'. L related tax), royalties, duties, excise, charges, levies, fees, dues, contribution, payments or imposition of any kind whatsoever payable to the Central, regional or local Govemments authorities or agents or to any Chiefdom or Tribal Authority or to any other Agency of the Lessor shal1 apply to the Lessee, or any affiliate company or Agent of the Lissee or the employees of the Lessee or any affiliate company of the Lessee, other than: 16.1.1 Annual rent and surface rent payable in accordance with Clauses 15.1 and 15.2 and their subsections; 16.1.2 Income Tax payable in accordance with Clause 15.3 and its subsections; 16.1.3 Royalties payable in accordance with Clauses 15.4, 15.5 and I 5.7 arrd their subsections; 16.1.4 Withholding taxes payable in accordance with Clause 15.8; 16.1.5 Charges on Imports payable in accordance with Clause 15.9, 15.10, 15.11and 15.12 16.1.6 Import Inspection Fees payable in accordance with Clause 15.14 and its subsections; 16.I.7 Community developurent fund contributions payable in accordance with Clause 15.20; 16.1.8 Profit Sharing in accordance with Clause 15.21and Schedule 6; 16.1 .9 Taxes deducted from emoluments of employees of the Lessee as required under the Income Tax (PAYE) Rules as provided in the Income Tax Act, Payroll Taxes payable under the Payroll Taxes Act and required payments under NASSIT, subject to Clauses 10.7 and i0.8. 16.2 For the pulpose of this Agreement, the words "Minor Taxes" means those taxes imposed on the Lessee which are not specifically provided for in this Agreement, which are generally applicable frorn time to time to all corporations on a non- discriminatory basis, and which do not arnount in the aggregate to more than the equivalent of US Dollars 500,000 (five hundred thousand United States dollars) in any financial year ol the Lessee. 16.3 Except as provided in this Agreement, no tax, royalty, dufy, excise, 1evy, fee, due, contribution, payment or imposition of any kind whatsoever (other than those provided for in this Agreement) which is of a discrirninatory nature shall be payable by the Lessee, or by the employees or shareholders of the Lessee, or by any Affiliate or agent of the Lessee or a Contractor of the Lessee who is specifically engaged in the Mining Operations. For the pulposes of this Clause, any imposition shal1 be considered 2l discrirninatory if its effect is confined wholly to the Lessee or its employees or to its shareholders or any Affiliate or agent of the Lessee. 16.4 No oflficer, salaried consultant or employee of the Lessee or of an Affrliate or agent of the Lessee, or officer or employee of a Contractor of the Lessee specifically engaged in the Mining Operations who is not a citizen of Sierra Leone, even although he may be for the time being a resident of Sierra Leone, shall be subject to the payment of any direct or personal taxes now or hereafter authorized, levied or imposed by the Lessor at rates in excess of those levied or imposed upon pennanent residents of Sierra Leone. Subject to the foregoing, the payment of income tax to the Lessor by any such officer, salaried consultant or employee shall be goverled by the income tax laws of Sierra Leone and the provisions of such treaty or agreement in respect of double taxation as may be concluded between the Lessor and the country of which such officer, salaried consultant or employee is subject or citizen. CLAUSE 17 - MANAGEMENT OF FUNDS 17.I The managernent of funds will be conducted in accordance with the Mining Law, but in particular, the following additional rights and conditions shall apply to the Lessee in the conduct of its business under this Agreement. I'/ .1.1 The Lessor and Lessee agree that, during the period of this Agreement the Lessee shall pay ali amounts due hereunder to the Lessor in United States Dollars to the Bank of Sierra Leone for the amount of the Lessor, or to such other bank account as may be fi-om time to time designated in writing by the Minister for the purpose. 17 .1.2 The Lessee shal1 meet all its operating costs in Sierra Leone either from funds remitted from abroad or out of Leones earned by the Lessee in Sierra Leone and shall pay for all capital assets brought into Sielra Leone and all other foreign costs and expenses, with funds earrred, held or borowed abroad. I7.2 The Lessee sha1l have the right, during the term of the Mining Licence, freely to receive, hold in banks or other financial institutions of its own selection in any country, and dispose of all local and foreign currency funds received or becoming due to it. 17.3 No applicable law or regulation will restrict or abrogate the right of the Lessee: 17 .3.I to retain abroad the proceeds of the sale of precious stones and minerals to which the Lessee is entitled to hereunder, 17 .3.2 to enter into loan agreetnents outside Sierra Leone for the purpose of financing the Mining Operations and to retain abroad the disbursements of such loans including interest and principal repayments, except that, where an assignment ..../ /:'' . : ,f /". .'. '| '..: ' ,lu '' '..1 ,."'. 22 ',:"" / ': ,r;/ /' (_ of the Mining Licence is contemplated, in the form of security for any such loan, the Lessee will first obtain the prior written consent of the Lessor, 11.3.3 to open and maintain bank accounts, denominated in either the currency of Sierra Leone or in foreign cuffency, and freely dispose of the sums deposited therein without restrictions where the said accounts are credited only with funds related to or derived frorn the Mining Operations, and 11 .3.4 to purchase and seil currency of Sierra Le one, through authorised dealers (if so required by 1aw), without discrimination at the market rate of exchange for such transactions or at the offrcial rate of exchange determined by the Bank of Siena Leone for applicable class of transaction if such rate s aro from time to time duly detemined under the relevant legislation. I7.4 Expatriate enployees and consultants of the Lessee or its affiliate companies and its contractors engaged in Mining Operations hereunder shall be entitled to: I7.4.I expofi freely from Siera Leone during each year of their employment any part of their salaries and emoluments paid in Siena Leone and to export freely fiom Sierra Leone upon tennination of their contract any balance of such salaries as well as any sums due to them from any provident fund, pension fund, or like fund on termination of their employment; and 17.4.2 export freely from Siena Leone upon temination of their employment their personal and household effects previously imported in Sierra Leone or purchased there. 11.5 Provided that arrangements satisfactory to the Commissioner of Income Tax have been made in respect to the discharge of an official or employees' liability to income tax, the Lessee shall have the right to provide to that employee the whole or any part of remuneration due in any curency outside Sierra Leone. 11 .6 For the purposes of Clause 17 .4, "expatriate employee" means an official or employee not nonnally resident in Sierra Leone who is engaged under a contract which provides for payment of passage to and from Sierra Leone. CLAUSE 18 - FINANCIAL STATEMENTS AND BOOKS 18.1 The Lessee shali engage a reputable 1ocal accounting firm for the purpose ofproducing audited accounts for each financial year. 18.2 Within 30 days of the end of each quarter and 90 days of the end of each year, the Lessee will provide the Lessor with a quarterly or annual reporl of financial and operating activity, including a copy of unaudited financial statements for such period. zi Such financial statements sha11 include the balance sheet, a statement of eamings and a statement of cash flows explessed in United States Dollars. 18.3 By 30 June of each year, the Lessee will provide the Lessor annual financial statements for the previous financial year that have been audited by an independent internationally recognised accounting firm registered in Sierra Leone. 18.3.1 The Lessor, at its cost, lnay audit such statements or appoint an auditor to conduct such an audit on its behalf. The Lessor and/or its auditor (as the case may be) shall be given access to all underlying documents necessary to cornplete the audit of such annual financial statements. If an audit reveals material underpayment by the Lessee, then the Lessee sha11 bear the cost of the govemment audit. For purposes of this Clause 18.3.1, "material" sha11 mean underpayment of more than 5%o in accordance with this Agreement or generally applicable laws. 18.4 The Lessor shall, upon reasonable notice and from time to time, have access to the books ofaccount ofthe Lessee including ail bank accounts. CLAUSE 19 CONFIDENTIALITY AND DISCLOSURE 19. 1 A11 data, information and repofts relating to the Mining Licence Area or to the Mining Operations owned by or in possession of the Lessee shall be treated as confidential by each of the Parties, and no Party shall disclose the contents hereof to any third party without the written consent of the other Parlies subject, however, to Clause I9.2. The Parties shall take such steps as are necessary to ensure that their officers, ernployees or agents comply with the provisions hereof. 19.2 The obligation specified in Clause 19.1 above shall not operate so as to prevent disclosure: 19.2.1 to Affiliates or contractors of the Lessee to the extent necessary for the pulpose s of its Mining Operations; f9.2.2 to employees, professional consultants, advisors, data processing centers and laboratories, where required for the performance of functions in connection with the Mining Operations of the Lessee; 19.2.3 to banl# _--*:-.-T-j.*dJglil*t -.1 r n.z i. ;tlli-t I I q Ll!,.. .'r .tr--'. - .tuL' 30 SCHEDULE 1 THE MINING LICENCE AREA DssczuprloN AND PraN op LeNo srruATED rN Tnn LowBR BAuneRA, KsNsN4a DrsrRrcr IN THE Repust-lc on SIBRRa LnoNB (known as the Tonguma Project) The Mining Licence Area lies within the Lower Bambara Chiefdom and the Dodo Chiefdoms, two of the Chiefdoms in the Kenema District. The attached plan indicates the position of the Mining Licence Area at the chiefdom level. The schedules which follows describe in precise terms the outline of the Mining Licence Area. l I i I i i 31 TONGUMA LIMITED Tonguma Project - Mining Licence Area UPDATED UTM COORDINATES FOR ML O1i 12 Area: 124.82sq.l