e deve2:釚 on and poSS葜 o貀 雊OnJ ex賻 T靪 l菌:l腷 l苦 腶臧 靛腶 郠 ]n鎼 裳 re and Orrler asso 膌菅agne`膌 purposes of act Areal Cont腵 n膊 趔 腡 rlPa苔 鏪 邘 腡臷闫 顈 菁 豻譲  觓 greement 腒 鱢:譈 靅 閩 l铬 豤 韒钧 鞴 钧蹶 t:蹉 :i誂 陼 %Rl:1:閈 諈 :迢 鷰b腡 釫詤 ll sEcTloN DEFINITIONS As used in this Agreement, the following words and terms, whether singular or plural, shail have the following respective meaning: 2.1. Act refers to Republic Act No. 7942, otheMise known as the "Philippine Mining Act of '1995." 2.2. Aoreement means this Nlineral Production Sharing Agreement. 2.3. Associated Minerals mean other ores/minerals, which occur together with the principal ore/mineral. 2.4. Banqko 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 膌 for each particular period. 苠 V 2.6. Bureau means Mines and Geosciences Bureau. 荮 2.7. Calendar Year or Year means a period of twelve (12) consecutive months 腕 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 龔 calendar quarter starting with the first day of January. 2.8. Commercial Production means the production of sufflcient 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. 腟 2.9. Constitution or Philippine Constitution means the 1987 Constitution of the Republic of the Philippines adopted by the Constitutional Convention of 1986 on Octobe|ls, '1986 and ratified by the People of the Republic of the Philippines on February 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.'11. Contract Year means a period of twelve ('12) consecutive months counted from the Effective Date of this Agreement or from the anniversary of such Effective Date. 2.12. Contaclot means Bo co Resources Mining Corporation or its assignee(s) of interest under this Agreement: provided, That the assignment of any of such anterest is accomplished pursuant to the pertinent provisions of the,p implementing rules and regulations of the Act. 2.13. Declaration -of Mining proiect Feasibilitu means a document proclaiming the presence of minerals in a specific site, which are recoverable Oy soiiatty 驍 鏥 镨 ||||lll llllllllllllll蝖 lllllll acceptable, environmentally safe and economically sound methods specified in the Project Feasibility Study. 2.14. Department or DENR means the Department of Environment and Natural Resources. 2 15 Director means the Director of Mines and Geosciences Bureau. 2.16. Effectave 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. 2.18. Exoloration 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. 艏 2.19. Exploration Period shall mean the period from the Effeclive Date of this 苦 腒 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, sub.iect to the pertinent provisions of the implementing rules and regulataons 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, insurrection, 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. 腒 2.21. Foreign Exchanqe means any currency other than the currency of the Republic of the Philippines acceptable to the Government and the Conlractor. 2.22. Government means the Government of the Republic of the philippines or any of its agencies and instrumentalities. 2.23. Gross Outout 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: provid6d, That iiihe minerals or mineral products are sold or consigned abroad by the Contractor under C.l.F. terms, the actual cost of oiean freight a;d insurance shall be deducted: Provided further, That in the case oi mineral concenkates which O are not traded in commodity exchanges in the philippines or abroad such as copper concentrate, the actual markel value shill be the world price quotation of the refined mineral products contained ttrerlot prevaiting in the said commodity exchanges, after deducting the smeriing, [rtiig, rreatrent, 豸驍讙 覯 辑  蝛 腡 蝖 腡 腡 鱪 鷴腡 insurance, transportation and other charges incurred in the 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 constructaon 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 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 腒 V utilization and sites for suppo( facilities. 芡 2.28. Minino Operations means mining activities involving exploration, feasibility 腓 study, environmental impact assessment, development, utilization, mineral processing and mine rehabilitation. 苦 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. 腒 2.31. Pollution means any alteration of the physical, chemical and/or biological properties of any water, air and/or land resources of the Philippines, or any 膌 腒 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, safely or welfare or which will adversely affect their utilization for domestic, commercial, industrial, 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 Repub腡 c Ofthe Ph腡 ippines 2.34. Work Prooram means a document which presents the plan of major mining operations and the corresponding expenditures of the Contractor in its Contract Area during a given period of time, including the plan and expenditures for development of host and neighboring com-munities anO oi e local geoscience. and mining technology, as-submitt'ed and approved in accordance with the imptementing rules ;nd regulations of the Act , 顈 鋷 5 豸 腡 蝖腡 蝖 跲 蝖蝖 蝖腡腡 腡 SENR028140 SECTION III TERM OF AGREEMENT 3.1. This Agreement shatl have a term of twenty-five (25) years from Effeclive Date, and may be renewed thereafter for another term not exceeding twenty_ five (25) years. The renewal of this Agreement, as well as the chinges in the terms and conditions thereof, shall be upon mutual consent b, the parties. ln lhe event the covernment decides to allow mining operitions thereafter by other Contractor, this must be through competitive public bidding. After due publication of notice, the Contractoi shall have the right to equal the highest bid upon reimbursement of all reasonable expenses of the haghest badder. 4.1. ""::::'""i;=^ 苠 Size, Shape, and Location of Contract Area - This Agreement covers a Contract Area of approximately Fourteen Thousand Two Hundred Forty (14,240.0000) hectares, situated in Sanchez Mira, pamplona, Abulug, 釥 Ballesleros, Aparri, Buguey and Gonzaga, Cagayan and bounded by thL following geographical coordinates (please refer to ANNEX .A. - j:SO,OOO 荾 scale Location Map/Sketch Plan): 苓 Corner Latitude Longitude 1 18膋 42' 3456" 121膋 13' 2676腅 2 18膋 33' 3960' 121膋 29' 4596'' 荾 3 18膋 31' 0420腅 121膋 40' 1848" 4 18膋 26' 3624'' 121膋 53' 3228腅 腟 5 48膋 27' 4284'' 121膋 58' 0624'' 6 18膋 26' 5748' 121膋 58' 3144" 7 18膋 25' 3504'' 122膋 53' 3696腅 8 18膋 30' 1440' 121膋 40 0444腅 9 18膋 32' 5316腅 121膋 29' 3768' 10 18膋 36' 3096腅 121膋 22' 0120' 11 18膋 41' 5136" 121膋 13' 1452" SECT:ON V EXPLORAT:ON PER:OD m襳    跥闚)rals and eight(8)yearS fOr metal腡賭 c 赑 釲 韼荨  鏥 鎇 閩 趤 节腏 腡 蹍腡蝖 蝛 蝖蝖 蝖腡蝛 蝛腡 SENR028140 The Contractor shall submit the proof of consuttation with the majority of the Sanggunian concerned in the form of Resolution or Ce(ification prioi to the implementation of the Exploration Work Program as prescribed under the implementing rules and regulations of the Act. The Contractor shall also submit a Community Development program to the Regional Office concerned within six (6) months upon registraiion of this Agreement as prescribed under the implementing rules and regulations of the Act. 52 Renewal of Exploration Period - ln case the Conlractor 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 th; Exploration Period on condition that the Contractor has substantially complied with the terms and conditions of the Agreement. provided, That with or without the filing of the renewal application, the Exploration perjod shall, upon its expiration, automatically shift to the next two (2) - year term, and so on. 葛 腛 ln cases where further exploration is warranted beyond the six (6) - or eight 芮 (8)-year period and on condilion 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 腔 performance surety equivalent to the expenditure requirement of the Exploration and Environmental Work Programs. 髮 53 Work Programs and Budgets - The Contractor shall shicfly 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: For the Exploration Work Program: 1st Contract Year : PhP 1,140,000.00 2nd Contract Year PhP 4,000.000.00 Total , PhP 5,140,000.00 For the Environmental Work Program : PhP 650,000.00 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 onlv be obliged to expend the pro-rata amount for the period of such Contra;t i; Q prior to terminatron. lf during any Contract Vear, the Contiactoi snoufO 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 鑫 腂,限 腫 腶软 鎫 腅 附酏 011膜 ,,,4 RI膜 膜t,莿 '膡, Iililililltltrililll]illitflIilltililtiliifltilililu Contractor during the succeeding Contract years, and should the 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 Contracl 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 ipproval of a Declaration of Mining Project Feasibility by the Director, the Coniractor shatl Iinally 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 (1) final Mining Area subject to the maximum ljmits 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 lhe Regional Office concerned, the Declaration of Mining Project Feasibility of the Contract Area/final Mining 膌 腒 Area supported by Project Feasibility Study, Three (3)-year Development and Construction or Commercial Operation Work program, complete 腏 geologic report, an application for survey and the pertinent Environmental Compliance Certificate, among other applicable requirements. Failure of the 腓 Contractor to submit the Declaration of Mining project Feasibility during the 腒 Exploration Period shall be considered a substantial breach of this 芢 Agreement. 腀 57 Survey of the Contract Area - The Contractor shall cause the survey of the perimeter of the Contract Area/Iinal Mining Area through an application for 鿤 survey, complete with requirements, filed in the Regional Office concerned 腟 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 with the mandatory requirements stated in the implementing rules and regulations of the Act. 58 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 submrtted not later than fifteen (.15) davs at the end of each Calendar euarler while the annual accomplishment report shall be submitted not later than thirty (30) days from t'he 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 origrnals of assaV results. duDlicated samples. fleld data, copies of onginals from d'rilling reports. m-pi, Q environmental work program implementation - and d"t"lt"O expenditures showing discrepancies/ deviations witn aporoveO exploration and envlronmental ptans and budgets as *"if ," iiiotn", 腂 , 鑇 豸辿  蹍腡跲  蝖蝖 蝖蝖 蝖腡腡 SENR028140 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. bReport - The Final 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 subslance 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 Offlce Core Library for safekeeping and reference. C Report - The Contractor shall submit a separate 腅 Relinquishment report with a detailed geologic report of the 芐 膥 relinquishment relinquished area accompanied by maps at a scale of 1:50,000 and 腏 results of analyses and detailed expenditures, among others. 腒 荾 SECTION VI 腏 DEVELOPMENT AND CONSTRUCTION PERIOD mine 64- The Contractor shall complete the development of the Timetable including the construction of production facilities within thirty-six (36) months from the submission and approval of the Declaration of Mining POect Feasibility, subject to such extension based on justifiable reasons as the Director may approve, upon recommendation of the Regional Director concerned. 62 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 detajled 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 O scale and quality, as well as in monographs or reports in accordance with international standards. 趤 0膜膜膜 17_:譄 腌 顥鷮驮 9 腡 跲 蝖  蝖蝖 蝖 蝖腡腡 SENR028140 SECTION VII OPEMTING PERIOD 74 Timetable - The Contractor shall submit, within thirty (30) days before completion of mine development and construction of production f;cilities, 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. 72 Commercial Operation Work Program and Budget - During the Operating Period, the Contractor shall submit lo the Director, through the Regiona-l Director concerned, Work Programs and Budgets covering a period oithree (3) years each, which shall be submitted not tater than thirty (30) days before the expiration of lhe 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 陭 V Programs and corresponding Budgets. 73 Expansion and Modification of Facilities - The Contractor may make 苡 expansions, modifications, improvements, and replacements of the mining facilities and may add new facilities as the Contractor may considei 腒 necessary for the operations: Provided, That such plans shall be embodied in an appropriate Work Program approved by the Director. 芢 74 Reporting 龔 a. Quarterly Reports - Beginning with the first Calendar euarter following lhe commencement of the Operating period, the Contractor shail 腒 submit, within thirty (30) days after the end of each Calendar euarter. to the Director, through the Regional Director concerned, a euarterly Report stating the tonnage of production in terms of ores, concentrates, and their corresponding grades and other types of 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 sufflcient 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 acfually e shipped from the philippines or not), tonnages actually shipped '. from the phitippines (with full detaits as to plrchaser, destination and terms of sale), and if known to the Contractor, tonnages refined, processed or manufactured in the 趤腰 40 蝖 腡 蝛 蝖 蝖蝖 蝖 蝛腡 腡 葙 SENR028140 Philippines with futl specifications as to the intermediate products, by-products or final products and of the terms at which they were disposed; b.2. Work accomplished and work in progress 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 b.3. Profile of work force, including management and staff, stating particularly their nationalities, and for Filipinos, their place oi oragin (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 t 莀 FISCAL REGIME 腟 V 84 General Principle - The fiscal regame of this Agreement shall be governed by the principle according to which the Government expects a reasonable 苔 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 hagh risk of exploration, the terms and conditions prevaaling elsewhere in the industry and any special efficiency to be gained by a particulady good performance of the Contractor. 82 Registration Fees - Within fifteen (15) 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 V registration of this Agreement within the prescribed period shall be sufficient ground for cancellation of the same. 83 Occupation Fees - Prior to registration of this Agreemenl and at the same date every year thereafter, the Contractor snill pay to the Bureau 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 (25ol) of the amount due in addition to the occupation fees. 84 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 .15.1 (a) of the National lnternal Revenue Code, as amended, in addition to a Royalty of not less than five percent ^ (5%) of the gross output, as well as other tixes, duties and fees Q levied by existing laws. The Excise Tax shall be timely and completely paid to the nearest Bureau of lnternal Revenue Office in the province concLrned while the Royalty shall be paid direcfly to the Bureau. 11 SENR020140 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 2gO and 292 ol Republic Act No. 7'160, otherwise known as ,,The Local Government Code of 1991." 85 Pricing of Sales - The 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 lowesl 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 腁 international mining industry. 芴 The Contractor shall likewise seek a balanced distribution among consumers. lnsofar as sales to Contractols affiliate(s) are concerned, prices shall be at arm's length standard, and competing offers for large scale 腊 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 腒 regularly inform the Director in writing of any revisions, changes or additjons in said contract(s)/agreement(s). 腟 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 腒 荶 contract(s)/agreement(s) governing the export or sale of minerals. 86 Associated Minerals - lf minerals other than magnetite and other associated mineral deposits 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. SECTION IX WORK PROGRAMS 9.1. Submission to Government - Within the periods stated herein, the Contractor shall prepare and submit to the Oirector, through the Regional Director concerned, a Work program ^ Area and corresponding Budget for the Contract ? stating the Mining Operations and expendiiures,irtricn tne Contractor proposes to carry out during the period covered with the details and particulars set forth elsewhere in this Agreement or jn the supporting documents. 腏 , 臚 豸 轖 腡  lllllllllllllll腸 llllllll |llllllllllll蝖 92 Government's Examination and Revision of Work program _ Should the Govemment decide to propose a revision to a certain sp"eciRc teatuie in tne Work.Program or Budget, it shall, within thirty (30) days afte,,e""ipl m.r.of, provide a Notice to the Contractor specifying in reasonable detail ris reasons therefore. Prompfly thereafter, the Goveriment anO Contr"ctof wiii'reet and endeavor to agree on the revision proposed by the Government. ln any event, the revision of any portion of said Work program or Budoet in which the.Government sha fait to notify the Contractor ;f the p;;;;;; ;evision sna[, rnsoiar as possible, be carried out as prescribed herein. lf the Government shoutd fail within sixty.(60) days from receipt tnereoi to notity Contractor of the proposed revisions, the Work program and Budget proposed by the Contractor shall be deemed to be approv-ed. program 93 Contractor's Changes to Work - lt is recognized by the Government and the Contractor that the details of any Woik progiam may require changes in the light of changing circumstances. The Coitractor mav make such changesi Provided, That it shall not change the qeneral obiective of the Work Program: provided further, That chang;s whi;h entarl variance of at least twenty percent (2oolo) shall bl subject to the "'n"o"tir. 腁 the Director. appro"val of 芳 ln case of any positive variance, the Contractor shall submit to the Director, 腓 through the Regional Director concerned, a copy each of tne Wort Programs, for information. 韢 94 The Government s approval of a proposed Work program and Budget will not be unreasonably withheld. sEcTloN x ENVIRONMENTAL PROTECTION AND MINE SAFETY AND HEALTH '10.1. The Contractor shall manage its Mining Operations in a technically, flnancially, socially, culturally and environmenially responsible manner to achieve the sustainable development objectivej 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 materials into economically and socially productive forms must be done srmultaneously with mining. '10.3. 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 actjvities in the ioniract Area. 10.4. The Contractor shall submit the following programs/plan as prescribed in the ,{ implementing rules and regulations of tn-e ecti a. Environmental Work program, b. Community Developmenl program; 豸  13 |||||||||||||||||||||||||||||| SENR028140 program c. Environmental Protection and Enhancement (EpEp) and Final Mine Rehabilitation and/or Decommissioning plan; d. Annual Environmental protection and Enhancement program (AEPEP); and e. Social Development and Managemenl program (SDMP). '10.5. The Contractor shall establish a Contingent Liability and Rehabilitation Fund (CLRF) which shall be in the form of the Mine Rehabititation Fund (MRF) and the Mine Waste and Taitings Fee (MWTF). The MRF shall be based on the financial requirements of the approved EPEP as a reasonable environmental deposit to ensure satisiactory compliance with the commitments/strategies of the EpEp/AEpEp and availability of funds for lhe performance of the EpEp/AEpEp during the 腁 specific 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. 苅 The MWTF shall be collected based on the amounts of mine waste and mill tailings generated during the conduct of Mining Operations. The MWTF 除 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 Minang Operations. '10.6. The Contractor shall set up mitigating measures such as mine waste and  mill .tailings disposal system, mine rehabilitation or plan, water quality monitoring, etc. to minimize land degradation, air and water pollution, acid rock drainage and changes in hydrogeology. '10.7. The Contractor shall set up an Environmental and Safety Office at its minesite manned by qualified personnel to plan, implement and monitor its approved EPEP. 10.8. The Contractor shall be responsible in the monitoring of environmental, safety and heatth conditions in the Contracl Area and ihall stricfly comply with all the rules and regulations embodied under DENR Administrative Order No. 2000-98, otheffvise known as the .,Mine Safety and Health Standards." SECTION XI RIGHTS AND OBLIGATIONS OF THE PARTIES 11.1. Obligations of the Contractor: a. To exclusively conduct sustainable Mining Operations within the e Contract Area in accordance with the provisions of ths Act and its implementing rules and regulations; Ail *'m*n6hnjtl*H :=: qo*ruuLnrou"n 14 lilllffi ilil iililtilillltilt ilililil/l]tilil fl 1 fifl b To construct and operate any facilities specified under the Mineral Agreement or approved Work Program; CTo determine the exploration, mining and treatment process to be utilized in the lV!ining Operations; d To extract, remove, use and dispose of any tailings as authorized by an approved Work Program; permits e To secure all necessary or desirable for the purpose of Mining Operations; To keep accurate technical records about the Mining Operations, as well as financial and marketing accounts, and make them availabb 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 菄 to such accounts in accordance with existing laws, rules and regulations; V 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 色 open for inspection; 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; 腒 To hold the Government free and harmless from all claims and accounts of all kinds, as well as demands and actions arising oul 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; l To allot annually a minimum of one and a half percent (1.5%) of the operating costs necessary to implement activities for the development of mining community, mining technology and geosciences, and institutionalization of public awareness and education on mining and geosciences; k ln the development of the community: k.1. To recognize and respect the righls, 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; k.2. To coordinate with proper authorities in the development ofthe host and neighboring communities in accordance with the P SDMP and to promote the general welfare of the inhabitants living therein. Where traditional self-sustaining income and the community activities are identified to be presenl, the Contractor 腂 詒 趤 15 ||||||||||||||||||||||||||||||||||| SENR028140 shall assist in the preservation and/or enhancement of such activities; and k.3. To give preference to Filipino citizens who have established domicile in the neighboring communities, in the hjring 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 expensei Lln the development of Mining Technology and Geosciences: 1.1. 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 and cost 腒 effective forms, subject to the condition that the Contractor may delay release of said information for a reasonable period 遬 V of time which shall not exceed three (3) years; 苂 艓 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 community within a reasonable period of time which shall not exceed three (3) years; t.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 Area; 14program To develop a for the advancement of mining technology and geosciences to build up resources and mineral discoveries, improve operational efficiency and resource recovery, and enhance environmental protection and mine safety; 腌 艏 To allocate research and development budget for the advancement of mining technology and geosciences in coordination with the Bureau, research institutions, academe, etc.i and 腏 艏 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 ,]P community for conducting research and undertaking other activities which contribute to the development of mining, geoscience and processing technology and the corresponding 16 趤 ||||||||||||||||||||||||||||||||||||| SENR028140 pool provided, national of manpower talents: however, that the release of data, maps and the like shall be similarly constrained in accordance with (k.1) and (k.2) above; m. To develop and institutionalize an Information, Education and Communication Program for greater public awareness and understanding of responsible mining and geosciences; n. To incorporate in the Mining project Feasibility Study the planned expenditures necessary to implement all the plans and programs sel forth in thas Agreement; and o. To pay all other taxes and fees mandated by exasting laws, rules and regulations. 1'1.2. Rights of the Contractor: a. To conduct Mining Operations within the confines of its 芳 ContracuMining Area in accordance with the terms and conditions hereof and without interfering with the rights of other V Contractors/Lessees/Operators/permittees/permit Holders; 芴 b. Possession of the Contract Area, with full right of ingress and egress 龔 and the right to occupy the same, subject to surface and easemenl rights; c. To use and have access to all declassified geological, geophysical, drilljng, production and other data relevant to lhe mining operations; d. To sell, assign, transfer, convey or olheMise dispose of all its rlghts, interests and obligations under the Agreement subject to the approval of the Government; eTo employ or bring into the Philippines foreign technical and specialized personnel, including the immediate members of their families as may be required in the operations of the Contractor, subject to applicable laws and regulations: Provided, That if the employment connection of such foreign persons with the Contractor ceases, the applicable laws and regulations on immigration shall apply to them. Every time foreign technologies are utilized and where alien executives are employed, an effective program of training understudies shall be undertaken. The alien employment shall be limited to technologies requiring highly specialized training and experience subject to the required approval under existing laws, ruies and regulations; fTo enjoy easement rights and use of timber, water and other natural resources in the Contract Area subject to pertinent laws, rules and regulations and the rights of third parties; s. Repatriation of capital and remittance of profits, dividends and interest on loans, subject to existing laws and Bangko Sentral ng Pilipinas rules and regulations; and 趤 17 ||||||||||||||||||||||||||||||||||| SENR028140 h. To import when necessary all equipment, spare parts and raw materials required in the operations in accordance with existing laws and regulations. 1 1 .3. Obligations of the covernment: a. To ensure that the Contractor has the Government,s full cooperation in the exercise of the rights granted to it under this Agreement; b. To use its best efforts to ensure the timely issuance of necessary permits and simalar authorizing documents for use of the surface of the Contract Areat and c. To cooperate with the Contractor in its efforts to obtain financing contemplated herein from banks or other financial institutions: Provided, That such financing arrangements will in no event reduce the Contractor's obligation on Government rights hereunder. 苁 SECTION XII 芡 V ASSETS AND EQUIPMENT 腒 12.'1. The Contractor shall acquire for the Mining Operations only such assets that 荪 are reasonably estimated to be required in carrying out such Mining Operations. 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 improvementsi otheMise, 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 EMPLOYMENT AND TRAINING OF PHILIPPINE PERSONNEL 13.1. The Contractor agrees to employ, to the e{ent possible, qualified Filipino 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 D objective of said programme is to reach within the timetable set forth below the following targets of "Filipinization:" 趤 18 ||||||||||||||||||||||||腡 ||||||||| SENR028140 Unsk腡ed Sk腡 15.2. This Agreement terminates or may be terminated for the following causes: (a) expiration of its term, whether original or renewali (b) withdrawai from the Agreement by the Contractor; (c) violation by the Contractor of the Agreemenl's terms and conditions; (d) failure to pay taxes, fees/or charges or financial obligations for two (2) consecutive years; (e) false statemeni or 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. All statements made in this Agreement shall be considered as conditions and essenlial 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 腔 the Contractor, render continued mining operation no longer feasible or viable. ln this case, the Secretary shall decide on the applicaiion within thirty  (30) days from notice: Provided, That the Contractor has met a the V financial, tiscal and legal obligations. 苦 15.5. No delay or omissions or course of dealing by the 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 by all other means shall not be construed as a waiver of any succeeding or other 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, inter alia 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 6 Contractor fails to abide by the terms and conditions of said incentives and Y credits. , 驍 趤鏥  20 |||||||||||||||||||||||||||||||||| SENR028140 xvl sEcTloN OTHER PROVISIONS 16.1. Any terms and conditions resulling from repeal or amendmenl of any existing laws or regulation or from the enactmenl 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: 腵 lf to the Government: THE SECRETARY 芳 Department of Environment and Natural Resources 苖 DENR Building, Visayas Avenue Diliman, Quezon City lf to the Contractor: THE PRESIDENT 腒 Bo Go Resources Mining Corporation 21O LPL Building, No. 17 Eisenhower Street Greenhills, San Juan, 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 waaver 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 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 - attrabutable lo Force Majeure as defined in the Act: Provided, That Q the suspension of Mining Operations due to Force Majeure causes shall be subject to approval by the Director. 趤 腏 艹 |||||||||||||||||||||||||||||||||||||| SENR028140 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 Agreement and all rights and obligations hereunder shall be extended for a period equal to the period involved. The Party, whose ability to perform its obligations is affected by such Force Majeure causes, shall promptly 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 shall be under any obiigation 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 nOt be annu腡ed,amended or modified in any respect This Agreement sha腡 iting ofthe herein parties except by mutual consentin w腵 ACKNOWLEDGMENT Republic of the Philippines) Quezon City )SS Before me, a Notary Public for and in the City of Quezon, personally appeared HORACIO C. RAMOS with Community Tax Certificate No. 18221963 issued on January 06,2010 at Quezon City, in his capacity as Secretary of the Department of Environment and Natural Resources, and HUR HYUNG, with Community Tax Certillcate No. 31106513 issued on March '19, 2010 at Pasig City, in his capacity as President of Bo Go Resources Nlining Corporation, both known to me and to me known to be the same persons who executed the foregoing instrument consisting of twenty-three (23) pages, including this acknowledgment page, and acknowledged to me that the same is their volunlary acts and deeds. lN WITNESS WHEREOF, I have hereunto set my hand and affix my notarial seal, ., 1{'l1tl this day of lllli V (莁 腒 I}| n膌 o 芡3,,苂 菁 铤 ItR ilo.lzzg>lg l-c^r'to OC V Doc. No. 膫o芤 Page No. 趤 Book No. 膜莌蝖 腝 让 Series of `蝖 膡 腝腜腜腜腜腜腜腝腜蝖蝖 腡鉉蝛蝖蝖蝛蝛蝖 SENR028140 苂 苗芴趌 腎腸 艨腁艥 芎 腀 艶 腎腀 腜 腎 腜 腎 23 CERTIFICATE OF REGlSTRAT10N Mines and Ceosciences Bureau iman,Oue20n Ci, North Ave,D腡