膌 WHEREAS, the contractor desires to join and assist the Gov€mmenl in the initiar rationar exproration and possibre deveropmenr ,tiliri"r' i, commercaar purposes of certain nicket and other associated "ri Contracl Area (as herein defined), ,in"r"f Jupo"ii" iristinq in the WHEREAS, tl]e Contraclor has access to all the iinancing, technical competence, technology and environmenlal management skills req-uirecl to promp y and efFectively carry out the objectives of this Agreement, NOW, THEREFORE, for and in consideration of the foregoing premises, the mutual covenants, terms and conditions hereinafter set forth, ii is -triireOy JipufateO agreed as follows: anO sEcTtoN r $COPE 1.1. fhis Agreement js a Mineral production Sharing Agreement entered into pursu€nt to the provisions of the Act and ita implemenling rules and reguiations The primary purpose of this Agreemeni is to provide for the rationar exproretion, deyeropment and commeiciar utirizatio; of certain nickar and other associated mineral deposits oxisting within lhe Conhact Area, with all necessary services, technology and financing to Oe furnist eO or arranged by the Contractor in accordance with the provis'ions of this Agieement. fhe Contractor shall not, by virtu€ of this Agreement, acquire ani iitte over tne , ConiracvMining Area without prejudice t; the acquisiiion oyinl contraao, ot the land/surface rights through any mode of acquisition pro'viOsO tor Oy taw. 1.2. The Contractor shall undertake and execut€, for and on behalf of the covernment, sustainablo mining operations in iccorOance witn tfre provisions of this Agreement, and is hereby consfitrteO anJ appointed, for the purpose of this Agreement, as the excrusive entitv io'-cJrlou"t mining operations in the Contract Area. 1.3. The Contractor shall assume all the exploralion risk such that if no minerals in commsrciar quantity are deveroped rno proorceo, riu,irinii oe entitteo to rsimbursement. 1.4. During.the term of this Agreement, the total value of production and sale of minerals derived from the minjng operations contemplated frlrein shall be divided. ber\,veen the Governmenr'anJ -iontractor ::::g:!-f:l.l1o r-he rn accO dance with secton V腡 lhe腵 e腂 腵 'Bi3- /15-' 2 sEcTtoN fl DEFINIT'ONS As used in this AgreBment. the following words and torms. whoth€r singular or plural, shall have the following respective ;eaning: 2.1. +ct. re rs to Republic Act No. 7942, otheMise known as the,,philippine . Mining Act of 1995.,, 2.2. Aoreement means this Mineral production Sharing Agreement. 2.3. Agsoc,algd_Mtlgtals mean other ores/minerals, which occur logether with the principal o[e/mineral. 2.4. Banoko Sentral means Bangko Ssntral ng pitipinas. 2.5. ElfdSC! means an eslimate of expenditures to be made by Contractor in mining.operations conlemplated hereunder to accomplish the'Work program for each particular period. 2.6. EqIgqU means Mines and Geosciencos Bureau. 27 ' qare.ndar Year or year means a period of twerve 12) mnsecutive months :l{lg-ytI the first day of January and ending on'OecemOer gt, white \,arenoar Quarter means a period of three consecutive months with ths first calendar quarter sta(ing with the first day of January. 2 8. ea!0EcrsrEt Erqdcgllg! means the production of sufficient quantity of minerals to sustain economic viability of mining operation; iec-koned from the dato of commercial operation as declared Uyin" Confra"foioi .t"t"o jn the feasibility study, whichever comes first. ". 腒29 @ means the 19g7 Constitution of the Hepublic of the_ Phrrippines adopted by the constitutionar convention of r g86 on uctober '15, 1986 and ratified by tho people of the Ropublic of the Philippines on February 2, .1987. 210. gpntract Ar6a means the area onshore or offshore delineated under the Minerat Produclion Sharing Agreement subjact to : t#-iefinquistrment obligations of the Contractor and properly definad by tatiiuoe lno tongituoe or bearing and distance. 2.11 Contract year means a period of twelve (12) consecutive months counled from lhe Effeclive Date of rhis ngr"erert'oi'fro, if.," or .r"n EfFective Date. "nnir"irury 2.12. Contactor means p. L. Goodman lt4ining and Development Corporation or his assignee or assionees. of interest ,"0., tf,t" aJ["r""t proviOeO, That rhe assrqrrnrent of inv of inr.r""i il-a"""roli=i"j'pr*** ,n" perlinenl provisions of the "r"n imprementrng rutes and regulations of the " Act. 膌腒腁/ 3 2.13. Declaration- of. Minino Feasibili!/ means a documBnt proclaiming the presence Of minerals in a specific Sits, which are recoverablB by socially acc€ptable, environmentally safo and oconomically sound methods specifiea in the Mine Development plan. 2.14. DepArtment or DENR means tho Department of Environment and Natural Resources. 2 15. Director means the Director of Mines and Geosciences Bureau. 2.16. Effective Dale_ means the date of execution of this Agreement by tho Contracior and by lhe Secr€tary on behalf of the Govemirent ln case an Exploration Pormit/Temporary Exploration permit had been availed of by the Contractor, the Effeclive Dale of this Agreement shall be the date of issuance of said Exploration PermiuTemporary Exploration permit. 2.17. Environment mesns all facets of man,s surroundings: physical, ecological, aesthetic. cultural, economic, historic, institutional and social. 2.18. Exploration means searching or plospecting for mineral resources by geological, geophysical and geochemical suryeys, remote sensing, tasi pitting, trenching, drilling, shaft sinking, tunneling or any other means for lhe purpose of determining the exjstencs, extent, quality and quantity of mineral resources and the feasibility of mining them for profit. 2.19. Elplqa1!a!-fct!!d shalt mean the period from the Effective Date of this Agreement, which shall be for two (2) yoars, renewable for like periods but . not to exceed a total term of six (6) years for nonmetallic minerals and eight (8) years for rnetallic minerals, subject to the pertinent provisions of the rmplemonlrnq rules and regulations of the Act 2.20. Fgrce Maieure means acts or circumstances beyond lha reasonable control of the 腒.Conkactor including, but not limited to war, reb€llion, insurection, riots, civil disiurbances, blockade, sabotage, embargo, strike, lockout, any dispute with surface owners and othir labor -disputes,' epidemicJ. ea(hquake, storm, flood or other adversa wsether condiiions, explosion, fire, adverse action by the Government or by any of its inshumentality or subdivision thereof, act of God or any publiC enemy and any cause as herein described over which the affected party has no reaionable control. 2 21. Eqgtg!_Elqhelgc means any currency olher than the currency of the Republic of lhe philippjnes acceptable to the Government and the Contractor. 2.22. Government means the Govgrnment of the Republic ol the philippines or any of its ag€ncies and inshumentalities 2.23. Grols Output means the actual market value of tho minerals or mineral products frorn each mine or mineral land operated as a ie-parate entity, without any deduction for mining, pr:cels]ng, i"tining, trrnrpoiing, handting, marketing or any olher expenses: providej. That iiin" ,ilrrrf. or mineral A .ri' * -_:-F- "/ e*,,/b /\ , A{{ " / \, / t \\/ 4 V \ producls are sold or consigned abroad by the Contractor under C.l.F. terms, the actual cosl of ocoan freight and insurance shall be deducted. provided further, That in the case of mineral concentrates which are not traded in commodity exchanges in the philippines or abroad such as copper concentralo, the actual market value shall be the world price quotation of the refined mineral products contained thereof prevailing ln tne saict commodity exchanges. after deducting the smelting, refining, treatment, insurance, lransportation and other charges incurred in the process of converting . mineral concentrates into rellned metal traded in those commodily exchanges. 2.24. Mjns QgyglSpIled refers to work undertaken to prepare an ore body or a mineral deposil for mining, including the conslruction of necessary infrastructure and related facilities. 2.25. Mine-als mean all naturally occurring inorganic substances in solid, liquid, gas or any intgrmediate slate excluding energy materials such as coal, petroleum, natural gas, radioactive materials and goothermal energy. t 2.26. Mineral Products mean materials derived from mineral ores/rocks and prepared into marketabla state by metallurgical procssses which include beneficiation, cyanidation, leaching, smelting, calcination and other similar processes. 2.27. Mintno Atea means that portion of the Conlract Area identified by the Contractor as deflned and delineated in a Survey plan duly approved by the Director/Regional Director concerned for purpoies of development and/or . utilization and sites for support facilities. 2 28 M4tES-QpeIalgG means mining activities involving exploration, feasibitity study, environmental impacl assessment, developm-ent, 'utilization, miner;l processing and mine rehabilitation. 2.29. Notice means notice in wflling, lelex or telocopy (authenlicated by answer back or confirmation received) addressed or senl as provided in Section 16.2 of this Agreement. 2.30. Ore means naturally occurring substance or material frdm which a mineral or element can be mined and/or processed for profit. 2.31 Pellgtie! means any aft€ration of the physicar, chemicar and/or biorogicar properties of any water, air and/or land rejources ot the philippines. oiany discharge lhereto of any liquid, gaseous or solid wart"s o, aniproOu"tion ot unnecessary noise or any emjssion of objoctionabre odor, as wifl or is rikery lo create or render such water, air, and lind resourcei trarmfut, Oetrimentat or injurious to public heatth, safety or wetfare or wnictr;aiiiljvlrsety anect . their. utilization for domestic, commercial, inOustrtat, agricuGi recreational or other legitimate purposes. 2.32. Ssgletgly means the Secretary of the Oepartment of Environment and Natural Resources. 諆 臧 腌 苚 2.33. State means the Republic ofthe Philippines. 2.34 Work Proqram means a document vr.tich presents the plan of maJor mining operations and the corresponding expenditures of th6 Contractor in its Contract Area during a given period of time, including the plan and expenditures for development of host and neighboring communities and of local geoscience and mining technology, as submitted and approved in accordance with the implementing rules and regulations ol the Act. SECTION III TERM OF AGREEMENT 3.1. This Agreen'lent shall have a term of twenty five (25) years from Etfective Dale, and may be renewed thereafter for another term not exceeding twenty five (25) years The renewal of this Agreement, as v/ell as the changes in the terms and conditions thereof, shall be upon mutual consent by the parties. ln the event the Government decides to allow mining operations thereafter by other Contractor. this must be through competitive public bidding. Afler due publication of notice, the Conlractor shall have the right lo equal the highest bid upon reimbursement of all reasonable expenses of the highest bidder. SECT10N:V CONTRAcT AREA 4.1. . Size, Shape, and Location of Contract Area - This Agreement covers a total area of Four Thousand Seven Hundred Forty Two and 2,714l10,000 heclares 14,742.2714 has.), situaled in Mati and Gov. Generoso, Davao Oriental and bounded by the following geographical coordinates (pl€ase refer to ANNEX "8" - 'l:50,000 scale Location Map/Sketch Plan): 腒CORNER LATITUDE LONCITUDE 艐 6膋35'3000腅 126膋10'0000' 艑 6膋 40'0000' 426膋10'0000' 艒 6膋40'0000腅 126膋 43'3053'' 艓 6膋39'4344'' 126膋13'3282腅 艔 6膋38'4644腅 126膋12'5426腅 艕 6膋 37 00 0Cl' 126膋13'1226'' 艖 6膋 37'0000' 126膋43'0000'' 艗 6膋35'3000. 126膋 13'0000腅 The Contraclor is not allowed to undortake any mining activities within the portion of the Contract Area covered by any DENR project Areas, without the 臥膇 腎d he量 腎Ona r臥 触 腎膇觱md腵 芯 膨 腧 腧 腔 荧 腌腎腌 腏 艏 Porllons of the Contract Area within the proposed Mt. lJamiguitan Range Wildlife Sanctuary including its buffer zone, withrn elevations of 1,00O meters :l:.*^".r:-119-\v],ltn the rnunrcipar,ty of Gov Generoso rr-,ipor",,,y eicruoeo rn thts Agreement. pending final resolulton "n"rit" rn rne event that said issues are resolved in favor of the attendant'rssues. temporarily excluded areas shall be rnctuded of the Contractor. such Area, wilhout need of any further to and form p"rt oilf,o'Contru"f only to lhe issuance agre-ement or amendment hereof,-subject of the appropriate Order by the Director Portion/s of the Contract Area that may be found and verifted as old orowlh and/or mossy torests shall be auiomatically excised from sriO Cortrict ir"". SECTION V EXPLORATION PERIOD 5.1. Timelable for Exploration - The Contractor shall commence Exploration activities not later than three (3) months after the Effective Date for a period of two (2) years, renewable for like periods but not lo exceed a tolal term of six (6) years for nonmetallic minerats and eighl (8) years for metalljc minerals, subject to annual review and approval by the Oiiettor .in accordance with the implementing rules and regulations of th; Act. 5.2. Renewal of Exploration period - ln case the Contractor opts for a renewal of its Exploration period, il shall file pnor lo the expiration' thereof, a renewal application in the Regional Offlce concerned, accompanied by the mandaiory - requirements stipulated in the imptementing rules and regulaiions of the Act. The.Director may grant the renewal of th; Exploration Feriod on condition that the Contractor has substantjally complied with the lerms and conditions of the Agreement. ln,cases v/here fltrther exploration is warranted beyond the six (6)_ or eight (8)-year period and on mndition that the Coniractor frai iu'Ostantijtty implemented the Exploration and Environmental Work programs as verrfied by the Bureau, the Director may further grant renewat oi ine fxptorafion Period: provided, That the Contraclo. ihall be required to set up a performance surety equivalent to the expenditur" l."qrirur"nt ot tn" Exploraton and Environmental Work proorams 5.3. !9il er901"1" ancl Budgets - The Contractor sha stricfly compty with the approved ExpJoration and Envrronmental Work programs tlog"thu,. *lfh th"i, corresponding Budgels (please refer to ANNEXES ,i, anO .,Oi1 The amount to be spent by the Contractor rn conduc.ling Exploratron aclivlies 111J:r-!: terms-of ihis Agreemenl during the e*pforat'ion F"i,oo sha be rn the agg腵 egale oF not苋 sslhan hat speditt fo腵 花苈 :A腝 3Fi陭 芵lJ芴 镩酷:i'陟 :r苦 'as nc膡腁腡n腁,膌腂 follows: 靘 腙 苚 For the Exploration Work program: 1st Conlract Year : PhP l,2800000o 2nd Conlracl Year PhP l,lo5.00o oo To(al : PhP 2,3it5,000.00 For the Environmental Work program : PhP 238.5000o ln the event of renewal of the Exploration period, the amounl to be spent every year shall firsl be agreed upon by the parlies. ln the event ot termination of this Agreement, ihe Contractor shall onlv be obliged to expend the pro-rata amount for the period of such Contract year prior to termination. lf during any Contract year, the Contractor should expend more than the amount to be expended as provided above, the excess may be subtracted from the amount requirsd to be expBnded by the Contractor during the succaeding Contracl years, and shoulJ lhe Contrictor, due to unforeseen circumstances or with the consent of the Governmeni, expend less during a year, then the deficiency shall b6 applied to the amount to be expended during the succeeding Contracl years. 5.4. Relinquishment of Tolal/portion of the Contract Area - During ths Exploration Period, the Contractor may relinquash totally or partially th6;riginal Contract Area. After the Exploration period and prior to oi upon Jpproval of a Declaration of Mining Feasjbility by the Director, the Contracior shall finally relinquish any portion of the Contract Area not necessary for mining . operations and not covered by any Declaration of Mining Feasibility. 5.5. Final Mining Area - The Director may allowthe Contracfor to hold more than one (1) final Mining Area subjoct to the maximum timits set under the implementing rules and regulations of the Act: provided, That each final 荧 Mining Area shall be cov8red by a Declaration of Mining Fe6sibility. 5.6. Declaration of Mining Feasibility _ Within the term of the Exploration period, the Contractor shall file in tha Regionat Office concemed, ihe Dectaration of Mining Feasibility of lhe Contract Area/flnal Mining Area sutporfed by Mining Feasibitity . Study. Three (3)-year DevetopmJnt and'bon"tru"fio, ol" Commercial Operal,on Work program, complete geologic report, an applicarion for survey and the pertinent Environ"mentli- compriance certifrcate,. among other appricabre requilements. rarrure oiine conlractor ro suom,t lhe Declaration of Mrning Feasibilily during lhe Exploration period shall be consrdered a substantiat b;each of tnis agre;ment- " W跥 關  FI 閩 閏i  litt菄 r::n::鞴 lll:;1;F:铬 :腡 1趼 ,1貘!`^荨II].: Shall P, Subttlle111腡 OVa mth n one 141 yearfrOm m賻 鉀趂 腍 腵 閾 膍 讧 7饺 荮1/ with ths mandatory roquirements stated in the implementing rules and regulations of the Act. 5.8. Reporting a. During the Exploration Period, the Contractor shall submit to the Director, through the Regional Direclor concemed, quart€rly and annual accomplishment reports undgr oalh on all activitiss conduct€d in the Contract Area from ths Eff6ctive Oate of this Agreement. The quarterly roport shall bs submitled not later than fifteen (15) days at the end of each Calendar Quarter while the annual accomplishment rsport shall b€ submitted not later than thirty (30) days from the end of each Calendar Year. Such information shall include detailed financial expenditures, raw and processed geological, geochemical, g€ophysical and radiometric data plotted on a map at a minimum 'l:50,000 scale, copies of originals of assay results, duplicated sampl6s, field data, copies of originals from drilling reports, maps, environmental work program implementation and detail€d expenditures showing discrepancies/ deviations with approved exploration and environmgntal plans and budgets as well as all other information of any kind collected during the exploralion activities. All information submittsd to the Bureau shall be subj€ct to the confidentiality clause of this Agreement. b. Final Report - The Contractor shall submit to the Dirsctor, through the Regional Director crncemod, a final report under oath upon the expiration of the Exploration psriod which shall bo in the form and substance comparable to published professional reports of respectable international institutions and shall incorporate all the findings in the Contract Area including location ot samples, assays, chemical analysis, and assessmant of mifleral potentials iogether with a geologic map of 1:50,000 scals at lhe minimum showing the resulls 腒 of the exploration. Such report 6hall also include dotailed axpendituras incuned during lho Exploration p€riod. ln case of diamond drilling, the Contractor shall, upon request of the Director/Ragional Dirictor, concerned submit to the Regional Offico a quarter o, the core samples, which shal, be deposiled in the Regionai Office Core Libiary for safekeaping and reference. c. Relinquishment Repod _ The Contraclor shall submit a separate ralinquishment report with a detailed geologic report of the relinquished area accompanied Uy maps at-a sdte of i:SO,OOO ana results of analyses and detailed expenditrre", among oii,"... SECT:oN V: DEVELOPMENT AND CoNSTRUCT:oN P苉 R10D 61 Timelable - including re鳜 靧  銲 韕i,諭 鹏 / / 9 芪 from th€ submission of the Declaration ol Mining Feasibility, subject to such sxlension based on.,ustiliable rsasons as the Director may approve, upon recrmmendation of lhe Regional Director concerned. 6.2. Reporting Annual - The Contractor shall submit, within sixty (60) days after December 31 of each year, to the Director, through tho Rogional Director concerned, an annual report, lvhich states the major activities, achievemenls and detailed exponditures during the year covered, including maps, assays, rock and mineral analyses and geological and environmental progress reports during the Oevelopment and Construction Period. b Final Report - Within six (6) months from the completion of the developmBnl and construction activities, the Contractor shall submit a final report to the Oirector, through the Regional Director concernod. Such report shall integrate all information in maps of appropflate scale 腒 and quality, as well as in monographs or reports in accordancs with int€mational standards SECTION VII OPERATING PERIOD 7.1. Timetable - The Contractor shalt submit, wilhjn thirty (30) days belore completion of mine developmsnt and construction of production facilities, to the Director, through the Regional Director concerned, a Three-year Commercial Operation Work program. The Contractff shall commence commercial utilization immediately upon approval of the aforesaid Work Prograrn. Failure of tho Contractor to commence Commercial produslion 1 within tha period shall be considered a substantial breach of the Agreement. 7.2. Commercial Operation Work program and Budget _ During the Operating Psriod, the Contractor shall submit to the Director, throujh the Regional Director concorned, Work programs and Budgets covering i period of three (3) y€ars each, whicrtr shafl be submitted not tater than thirt-y (iO) days before the expiratron of lhe period covered by the previous Work erogrim. The Contractor shall conduct Mining Operations and other activilies for flre duration of the Operating period jn iccordance with tha ;;ty;;;roved Work Programs and corresponding Budgets. 7.3. Expansion and Modification ol Facilities _ The Contractor may make expansions, modifications, imptovoments, and replacements of the mining facitities and may add new facitities as th" b"-;tr";l;;;y consider necassary for the operations: providsd, That such pt"n" .hrlt O" ln an appropriate Work program UVUuWnT腵 腣approved by the "rOoOi"O 菊Director. 腣腣 腣 ,/ 腣 腣 腅 / 莁r r 荮 膍 荐 菊腕 荘 10 7.4. Reporting a. Quarterly Reports - Beginning with the first Calendar euarter tollowing the commencement of the Operating period, the Contractor shall submit, within thirty (30) days after the end of each Calendar euarter, to the Director, lhrough the Regional Diractor concernod, a euarterly Report slaling the tonnage of production in tsrms of ores, crncentrates, and their mrrespondjng grades and othor types of productsi value, destination of sales or exporls and to whom sold; terms of sales and expenditures. b. Annual Reports - During the Opsrating period, the Conlraclor shall submit within sixly (60) days from the end ot each Calendar year, to lhe Director, through the Regional Dirgctor concerned, an Annual Report indicaling in sufficient detail: b.1. The total tonnage of ore raserves, whethor proven. probable, or infened, the lolal tonnage of ores, kind by kind broken down between tonnage mined, tonnages transported from the minesite and their corresponding destination, tonnages stockpited in the mine and elsewhere in the philippin;s, tonnagos sold or committed for export (whether actually shipped from lhe philippines or not), tonnages actually shippea from the philippinBs (with full detalls as to purchaser, destination and terms of sale), and if known to the Contractor, tonnages refined, processed or manufactured in the philippines with fu specificalions as to the intermediare products, by- products or final products and of the lerms at which they weie disposed; 6.2. Work accomplished and work in progress al the end o, the year in question with respect to all ihe- installations and facilities related to ihe utilization program, including the investment actually made or committedi and b.3. profile of work force, including managemeni and stafl, stating particularly their nationalities, anO foi fitipinos, their place of origin (i.e., barangay, town, provincs, ,egioil. --, ' - The Contractor shall also comply w(h olher reporting requiremsnts provided for in the implementing rules and regulations oithe A;t ,- - - ,. SECTloN V::: FIscAL REC:ME 81 Genera P腡 ndpb ThoISCa rogmeOf鞝 苉 Ag赢 l be gOVerned by the p腵 inciplo accordino i膿nd賻 腂 a臥?me'Sh閛 o腵 dhO bwhch ttL:芵 le p镓 芫1顢 誂i 菌 :附 :菌腶 ]:S:邞 l腶:菔 ln economir h ecOnO躧腁膌n",_ 苧腁腌 `H^ ` __ _ c vJue for me tti鞒 譬 腵 鑬 釪 S誁 Wutt菒 苔 l]跲 mnera resOutts 隶 ][鉘 under iis nali荮under ls nmond soverec鑨: n苨1 ._腁膌_` =|| ^ 腷 ^.^:腠 赠 鹏 ,躧 腷襸 趕 银苦腂 腂Xpecls a ttasOnab e 腵 A 豞苁 雳 芾 腝 腌 英 F 11 return on its investrnent with special account to be taken for the high risk of exploration. tl]e ternts and condiiions prevailing elsewhere in th€ industry and any special efficienoy to be gained by a particularly good performance of the Contractor. 8.2. Registration FeBS - Wathin fifteen (15) days upon rsceipt of the notice of approval of the Agreement from the Regional Offics concerned, the Conlractor shall cause the regislration of this Agr€ement with the said Regjonal Offico and pay th6 registration fee at the rate provided in the existing rules and regulations. Failure of the Contractor to cause the registration of this Agreement within lhe prescribed period shall be sufficiont ground for cancellation of the same. 8.3. Occupation Fees - Prior to registration of this Agreement and at the same date every year thereafter, the Contractor shall pay to the Municipal/City Treasurer concornad an occupation fee over lhe Contract Area at the annual rate provided in the existing rules and regulations. lf the fee is not paid on the datB specified, the Contractor shall pay a surcharge of twenty five percont (25%) of the amount due in addition to the occupation ,ees. 8.4. Sharo of the Governmsnt - Tha Governmenl Share shall be lhe excise tax on mineral products at the time of removal and at the rate provided for in Republic Act No. 7729 amending Section 151 (a) of the National lntemat Revenue Code, as amended, as well as other tax6s, duties and fees levied by existing laws. For purposes of determining the amount of the herein Government Shar€, the Contracdor shall striclly comply with the auditing and accounting requirements presqibsd under oxisting laws and regulations. The Govemment Share shall be allocated in accordance with Sections 290 and 292 ot Republic Act No. 7160, otheMise known as ,,The Locat Gov€rnment Code of 1991." 8.5. Pricing of Sales - The Contractor shall endeavor to obtain the best achievable price for its production and pay the lowosl achiovable markeling commissions and related fees. tt shall seek to strike a balance between long-term sales comparable to policies followed by indepsndent producers in the international mining industry. The Contractor shall Iikewise seek a balanced distribution amonq consumers. lnsorar as sales to Contractor,s affiliatas ure *na"rn"J, pr*". shall be at arm's length standard and compoting offers for largo a*t"-"nO forg_t"r, contrads shall be procured. The Bureiu shall Ue turn-istreO i mpy of the said Sates Agreemenr subject to confidentiatity b"t*;"; ;;;;;;au and the Contractor 8.6. Associated Minerals _ if minerals other than nickel are discovered in :;.IT:::::l lyilliites in rhe conhact Area, rne vaiue ine,ej Jalr be added 10 1he Va ue ofl鉰腵 prnCpttmneralF顢 镩 芴 3镩1轮腷 :腡 L讴菌 镩鷭 li鏱7 /荘 腙 i腡 膍 裉 / 12 SECTION IX WORK PROGRAMS 9.1. Subrnission to Governm€nt - Within the periods stated herejn, the Contractor shall prepare and submii to the Director, through the Regional Director concerned, a Work Program and corresponding Budgot for the Contract Area stating the Mining Operations and expenditurss t /hich the Contractor proposss to carry oul during the period coverod with the details and particulars set fortlt elsewhero in this Agraement or in the supporting documents. 92. Govemment's Examination and Revision of Work program - Should lhe Government decade to propose a revision to a certain specific featuro in lhe Work Program or Budget, rt shall, within thirty (30) days after receipt thereof, provide a Notice to the Contractor spacifying in reasonable delail its reasons therolbre. Promptly thersafter, the Government and Contractor will meet and endeavor to agree on the revision proposed by the Government. ln any event, the revision of any portion of said Work program or Budget in which ths Govornm€lnt shall fail to notify ths Contractor of the proposgd revision shall, insofar as possible, be carriod out as prescribed herein. lf the Governmgnt should fail within sixty (60) days from receipt thereof to notify Conlractor of the proposed revisions, th6 Work program and Budget proposed by the Contractor shall be deemed to be approved. 9.3. Contractor's Changes to Work program - lt is recognized by the Government and the Contractor that the dotails of any Work progiam may requrre changes in th6 light of changing circumstances. The Contractor may make such changes; Provided, That it shall not change lhe gsneral objective of the Work Program: Provided further, That changes which antail a varianc€ of al least twBnty perc€nt (20%) shafl be subject to the approval of lho Director. 9.4. The Government s approval of a proposed Work program and Budget will not b€ unreasonably withheld. SECTION X ENVIRONMENTAL PROTECTION AND MINE SAFEry ANO HEALTH '10.1. The Contraclor shall manage its Mining Operations jn a technically, financially, socially, culturally and environ-menialf y responslOl manner to achieve the sustajnable development obiectives and' reiponsiOilities as providsd for under lhe implementing rules and regulations t[" n"t 10.2 "i IL?_^1"1F:"1 :nalt .prepare a pran of mrnins so lhar its damage ro the envrronment w l be minimai. To the exlent posirble, controt ot poil"riion ana 9"" 5:"j,"911:: ?j-lhe mrned-oul areas or mareriats inro e"ononiiLrry ano 13 10.3. The Contractor shall submit an Environmental Work program during the Exploration Period as presclibed in the irnplementing rules and regulatio;s of the Act 10.4. An Environmental Comptiance Certificate (ECC) shall be securcd first by the Contractor prior to the conduct of any development works, construction of produclion facilities and/or rnine production activities in the Contract Area. 10.5. The Contractor sha subntjt within thirty (30) Calendar days after the issuance and receipt of the ECC, an Environmental protection and Enhancemont Program (EpEp) using MGB Form No. 16-2 covering all areas to be affected by development, utiljzation and processing activitias under this Agreement. The Contractor shall allocate for its initial environment_related capital expsnditures approximatoly ten percent (10%) of the total project cost or in such amount dapending on the environmontal/geologicai condilion, nature and sc€le of operaUons and technology to b€ employed in the Contract Area. 10.6. The Contractor shall submit, within thirly (30) days prior to the beginning of every calendar year, an Annual Environmsntal protection and Enhancement Program (AEPEP), using MGB Form .16-3, which shall be based on the approved EPEP. Ths AEpEp shall be irnplemsnted during the yearforwhich it was submilted. To implement its AEpEp, the Contr;clor shalt altocate annually three to tivs percent (3%-5%) of its direct mining and milling costs depending on the environmentaugeologic conrjition, naiure and scale of operations and technology employed in the Contract Area. 10.7. The Contractor shall establish a Mine Rehabilitation Fund (MRF) based on the financial rsquirements of te approvecl EpEp as a reasonable environmgntal deposit to ensure satisfactory compliance with the commitments/strategi€s of the EpEp/AEpEp and availabiiity of funds for the periormance of the EpEp/AEpEp during the specific projgct phase. The MRF shall be deposited as Trust Fund in a govemmsnt depo;itorv bank and shail be used for physical and social rehabilrtation of areas affected by mining activities and for research on th€ social, technical and preventive aspects of rehabilitatron. 10.8. Tie Contractor shall set up mitigating measures such as minB waste and mill ra tngs drsposal system, mine rehabilitation or plan, water quality monitoring, etc. to minimize tand degradation, air and watei poilLrt,on, Jc,J ii"k ,:rainuge and changos in hydrogeology ,On Il,_". Contractor shall set up an Environmental and Saiety Off,ce at its mrn.site.manned by quatified personnel to pfan, impLmeni lno monrtor its approved EpEp. 10.'10.The Contraclor shall be rs, in ihe 蝖 safelv ,nrt n.-,,^ of environmental, saFety and heath cOnd t -monitoring bns h閧 ^^^,*,^-^rlonsible 86腂 郣i趌 rA镩 腁htt菄 tttt鏩 '膡 腒vith a腡鎒)  ,hn rtll`c 芣芡腌I 膌I腶 h tt he蹒 苉 s and ^^ :^`i___ _ |gdtt葝 葟 譔 誋蹵3鿵 W苇 苀鑆 othe芡dhemise knmn as he'Mtt sattja質 膍ise kno腁vn nc,芢0'`A膡芡, ^_荒|`_ | ^芯:银;苦 ^O^鍠 觛 鎇I貾/ 苜腶 颥::r:菀 荮 英 腙 ~4 -腁 腧 lr荃 14 10.11.The Conlractor shall be responsible for the submission of a final mine rehabilitation and/or decommis6ioning plans, including its financial requirements and incorporating the details and particulars set fortlt in the implementing rules and regulations of the Act. sEcTtoN xt RIGHTS AND OBLIGATIONS OF THE PARTIE$ 1 1 .1. Obligations of the Contractor: a. To exclusively conduct sustainable Mining Operalions within the Contract Area in accordance with the provisions of the Act and its implemenling rules and regulalions; b. To eonstruct and operate any facilities specified under the Min€ral Agreement or approved Work Program; c. To detsrmine the exploration, mining and treatment process to be utilized in the Mining Operations; d. To sxtract, remove, use and dispose ol any tailings as authorized by an approved Work Program; e. To secure all permits necessary or desirable for the purpose of Mining Operations; f. To keep accurate technical records about the Mining Operations, as well as tinancial and marketing accounts, and make lhem available to Government r€presentatives authorized by the Director for the purpose of assessing the performance and compliance ol the 腒 Contractor with the terms of this Agresment. Authorized representatives of other Govemmsnt Agencies may also have access to such accounts in accordance with existing laws, rules and regulalions: g. To furnish the Bureau all the data and informalion gsthered from the Contract Area ard that all tha books of accounts and records shall be open for inspection; h. To allow access to Government during reasonable hours in inspecting the Contract Area and exafilining pertinent records for purposes of monrtoring complrance with the terms of thls Agreement, To hold lhe Govemmenl froe and harmless from all claims and accounts of all kinds, as well as demands and actions arising out of lhe accidenls or injuries to persons or propertiss caused bv Mrnino uperatrons of the Contractor and indemnity tne Governmeni for ani exp€nses or costs,lncurred by the Government by reason of any such dam腒 accclu ,demant膡a腧amm'鍤 膋n, / 进 /1 莓 资 苚 菇 閨 菀 15 j. ln the development of the community: j.1. To recognize and respect the rights, customs and traditions of indigsnous cullural cornmunilies over their ancestEl lands and to allocate royalty payment of not less than one percent (1%) of th6 value of the gross output of minerals sold; ).2. To coordinale wilh proper authoflttes ,n the devslopment of the mtntng community and for those ltving in the host and neighboring communities through s;cial infrastructure, livetihood programs, educalion, waier, electricity and medical services. Where traditional self-sustainrng iniome and the community activities are identifjed to be present, the Contractor shall assist in the preservation ancuor 'enhancement of such activities: .i 3. To allot annually a minimum of one percent (1%) of the direcl mining and milling costs n6c6ssary to imptemeni tne activities undertaken in the development of the host anO neithboring communilies. Expenses for cornmunlty developmant'may be charged against the royalty payment -of at least one percent (1%) of the gross output intendeo for tf," cor"err"J ii,Oi!"nor" cultural community; j.4. To give preference to Filipino citizens who have ostabtished domicite ,n the neighboring communities, in in. -ti ng ot personnel tor its mining operaltons. lf necessary skills and expertise are curronfly not available, the Contiu"ioi mr"t immediatety prepare and undertake a training a;J i;;itment program at its expense; 芵 j.5. To incorporate in the Minlng Feasibility Study the plannad expendilures necessary to implement tt.ll t,j .oi ti,i, Section; 0.sl k. ln the devolopment of Mining Technology and Geosciences; k.1. ln lhe course of its .operations, to produce geological, geophysical, geochemicat.and other types,of maps Jn?rlpon. that are appropriate in scate and in folri", are consistent lyith the intemation"ffy ",j ",r'o"t!r""""n.n practices. Such maps shalt u""eptuO-r-tailJiO* ano community jn the oe maoe avarfJJfe to'il""l"l"nrif" subiect most-convenient and to the condition rhar the ";"i "ff;;;r;;;rr. said informatjon tor Conlr;;;;y;;;ff"":" a reasonabte p"r.J *,irln " exceed three (3) yearsi "iiirl "fir *, k2鷣 h访 etttm釫 c鍤 雴豆 鑺 腵: El鱗]苛豒鑹 諗rrna1 0n lnC ud n"饓 鍛 dtth金 腙 郡 / 16 腡 them accessible to students, researchers and other persons responsible for dev6loping mining, geoscience and processing technology subject to the conditaon that the Contractor may delay release of data to the scionce and technology communily within a reasonablo period of time which shall not exceed three (3) years, k.3. To transler 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 Contracl Area; k.4. To allocate research and developmenl budget for the advancemenl of mining lechnology and geosciences in coordination with lhe Bur6au, research instilutions, academe, etc.; k.5. To replicate data, maps and reports citod in (k..1) and (k 2) and 腒 furnish the Bureau for archiving and systematic 花 which shall be safekoeping made available to the sclence and technology community for conducting research and undertaking other activities which contribute to the development of ntining, geoscience and processing technology and the corresponding national pool of manpower talents: provided, however. that the ralease of data, maps and the like shall be similarly constrained in accordance with (k.1) and (k.2) above; l. To incorporate in the Mining Feasibility Study the planned expendilures nec€ssary to implement all the plans and programs sal forth in this Agreementi and m. To pay all other taxos and fses mandated by exisling laws, rules and regulation$. 11.2. Rights of the Conlractor: .. Io . cond(ict Mining Operations within th6 confines of rts ContracuMining Area in accordance with the term"-un,f conditions hereof and without interfering with the righis of other Contractors/Lessees/Operators/ pe-rmitteeslpeimrt HoiOeis, b. Of possession of tho Contract Area, with full right of ingress and egress and the righl to occupy the same, subl-ect to surface and easemenl righls; c. To use and have access to all declassified geological, geophysical, dri ing, production and orher dara retevaniio tiu *iini'Li*"tion"; d convey or olherwtse dlspose of all its ghts, 跫 鏥 sl臧 譌 芵1鏤 讙 under the Agreement subrject to ths approval OFthe Govo腵 nmont / / 芩腒 菇苚 腖腜 陡 17 e. To 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 sf the Contractor, subject to apPlicable laws and regulations: Provided, That if the employment connection of such foreign persons with the Contractol ceases. the applicable laws and regulations on immigration shall apply to them. Every time ioreign lechnologies are utilized and where alien executives are employed, an efioctive program of training undersludies shall be undertaken. The alien employment shall be limitsd to technologies rsquiring highly specializ-ed training and experience subiecl lo the required approval und€r existing laws, rules and regulations; f. To enioy easement rights and use of timber, watar and other natural resourc€s in the Contract Area subiect to psrtinent lav,/s, rules and regulations and the righls of third parties; g. Of rspatriation of capital and remittance of profits, dividends and 腍 t芳 interest on loans, gubject to existing laws and Bangko Sentral ng Pilipinas rules and regulations; and h. 1'o import when necessary all squipment, spare parts and raw materials required in the operations in accordance with existing laws and regulations. 11.3. Obligations of the Government: a. To ensure that the Contractor has lhe Government's rull coop€ration in the exsrcise of the rights granted to il under this Agreement; b. To use its best efforts to €nsure the timoly issuance of necessary permits and similar authorizing documents for use of the surface of the Contract Area, and c. Jo cooperate with the Contractor in its etforts lo 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 he[eunder. sEcTtoN x[ ASSETS AND EQUIPMENT 12i. fhe Contracior shall acquire for the Mining Operations only such assets that are reasonably estimated to bs required in carrying out such Mining Operations. 12.2. All materials, equipment, plant and other installations of a movable nature erected or placed on the Contracl Area by the Contractor shall remain the *=F- qd 18 property of the Contractor. The Contractor shall have the right to removo and re-export such rnaterials and equipment, plant and other installations from the Philippines, subject to existing rules and regulations. ln case of c€ssation of Mining Operations on public lands occasioned by its voluntary abanclonment or withdrawal, tho Contractor shall have a poriod of one (1) year from the time of cessation within which to remove its imprc,vemants, otheMise, all social infrastructures and facilitios shall be turned ovor or donated tax free to the proper government authorities, national or local, to ensuro that said infrastructures and faciliti€s are continuously maintained and utilized by the host and noighboring communities. sEcTtoN xIt EMPLOYMENT AND TRAINING OF PHILIPPINE PERSONNEL 13.1. The Contractor agrees to srnploy, to the extent possible, qualified Filipino personnel in all types of mining operations for which they are qualifi€d; and 腒 after Commercial Production commences shall, in consultation and with 腁 consent of the prepate and undertake an extensive training programme Government, suitable to Filipino nationals in all levels of employment. The objeciive of said programme shall be to roach within the timotable set forth below the following targets of "Filipinization:" ied ski腡od clo腵 unsk賻ical ProFessional 14anagement 14.2. Any disagreement or dispute which can not be settl€d amicably within a period of one (1) year from the timo the issue is raised by a Parly shall be settled by a tribunal of three (3) arbiirators. This tribunal shall be constitutad as follows: ono to b€ appointed by the Contractor and the other to be appointed by the Secretary. The first two appointed arbitrators shall consider names of qualifiecl p€rsons until agreement on a mutually ac'ceptable Chairman of the tribunal is selected. Such arbitration shall be initiated and conducted pur6uant to Republic Act No. 876, otheMise known as the 'Arbitration Act." ln any event, the arbitration shall be conducted applying the substanlive laws of the Republic of the PhilrPPines. 14.9. Each party shall pay fifty percent (50%) of the fees and expenses of the Arbitrators and the costs of arbitration. Each party shall pay its own costs and attorney's fee. 腒 SECTION XV SUSPENSION OR TERMINATION OF CONTRACT, TAX INCENTIVES AND CREDITS 15..1. This Agreement may be suspended for failure of the Contractor: (a) to comply with any provision or requiremenl of the Act and/or its implementing rules and regulalions; (b) to pay taxes, fees and/or other charges demandable and due the Government. 15.2. -fhis AgreBment terminates or may bs terminated for the following causes: (a) expiration of its term, whether original or renewal; (b) withdrawai from the Agreement by the Contractor; (c) violation by the Contractor of the Agreement's terms and conditions; (d) failure to pay taxos, fees/or charges or financial obligations for two (2) consecutive years, (e) false statement 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 regulation$. 15 3. All statements made in this Agreement shall be considered as conditions and essential parts hereof, and any falsehood in said statements or omission of facts which may alter, change or affect substantially the fact set forth in said statements shall be a ground lor its revocation and telmination. 15.4. The Contractor may, by giving due notice at any time during tl"re term of this Agreement, apply for its cancellation due to causes which, in the opinion of the Contractor, render continued mining operation no ionger feasible or viable. ln this case, the Secretary shall decide on the application lYithin thiny (30) days from nolice: Provided, That the Conlractor has met all the financial, fiscal and legal obligations. 腒 陰 觰 20 15.5. No delay or omissions or course of dealing by the Govemment 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 oth6r liabilities due up to the end of the year in v,tich the termination becomes effective. The Contractor shall immediately carry out the restoration of the Contract Aroa 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 tiscal obligations under this Agreen'tent. '15.8. The following acts or omission, inter atia 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. Faiiure of the Contractor lo conduct mining operations and other activities jn accordance with the approved Work programs and/or any modification thereof as approved by the Director. 15.9. The Governmgnt rnay suspend and cancel tax incentives and credits if the Contraclor fails to abide by the terms and conditions of said incentives and credits. SECTION XVI OTHER PROVISIONS 16.1. Any ierms and conditions resulting from repeal or amendment of any existing laws or regulation or from the enactrnent of a law, regulation or administrativa order shall be considered a part of this Agre€menl. 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 cass 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: >d\ 苂 花 lJ to the Government: 'fHE SEcRETARY DEPARTMENT oF ENVIRoNMENT AND NATURAL REsoURcEs DENR Building, Visayas Avenue Diliman, Quezon City lf to the Contractor: THE PRESIDENT P. L. GooDMAN MtNtNG AND DEVELoptvENT CoRpoRATtoN 5'h Floor LTA Building 118 Perea Sireet, Legaspi Village Makati City Either parly may substitute or change suoh addrsss on notice thereof to the other party. `16.3. Governrng Law This Agreem€nt and the relation belween the parties hereto shall be governed by and construed in accordance with the laws of the Republic of the Philippin8s. The Contractor hereby agrees and obljEes jtsolf to comply with the provisions of ths Act, its implementing rulos and regulations and olher relevant laws and regulations. 16.4. Suspension o, Obligation a. Any failur€ or delay on the part of any party in the performance of its obligation or duties hereunder shall be excused to the extenl attributable to Force Majeure as defined in the Act: provid€d, T.hat the 1 suspension of Mining Oporations due to Force Majeure causes shall be subject to approval by the Director b. lf Mirring Operations are delayed, curtailed or prevented by such Force Majeure causes, then lhe time for enjoying the raghts and carrying out tho obligations thereby affecled, the term of this Agreemont and all righls and obligations hereunder shall be extended for a period equal to the period involved The Party, whose ability lo perform its obligations is affected by such Force Majeure causes, shall promp(y give Notice to the ot'hor in writing of any such delay or failure of perforn]ance, the expected duration ther€of and lts anticipated eflecl and shall use its efforts to remedy such delay, except that neither party shall be under any obligatron to settle- a labor dispute provided, ihat the suspension j 3t,J:r.?Y" by lhe Contractor shafl be subject lo prior approvat by the f*t{ ."J =+{- ,rflo/ 苂苂 臚艓 16.5. Amendments This Agreement shall not be annulled, amended or modified in any respect except by mutual consent in writing of the herein parties. lN WITNESS WHEREOF, the Parties hereto have executed this Agreement, as of the day and year first above written THE REPUBLiC OF THE PH:LiPPINES BY: 腒 4 E Department of Envi腵onment and Natural Resou腵 ces ACKNOWLEDGMENT Republic of the Philippines) Quezon City )s s Before me, a Notary Public for and in the Crty of Quezon, personally appeared ELISEA G. GOZUN, with Community Tax Certificate No. /974rr{0 issued on Je(l.l!, f-r-rl at Ql(t74 crll , in irer capi-ity as Secretary of the Department of Environment and Natural Resources, and ROSA MIGHELE C. BAGTAS. with Communiv Tax Certificate No. t5x2,t4q4 issued on ftb. L,lcpi at l,ia"i,la rn her capacity as President of P. L Goodman Mining and Developmsnt Corporation bolh known to me and to me knowrl to be the same persons who executed the foregoing instrument consisting of twenty four (24) pages, including this acknowledgment page, and acknowledged to me that the same is their voluntary acts and deeds. 艥 芌 芈芁艵芅 腡腃 N WiTNESS WHEREOF腀 芄 菐 hereunto set my hand and affix my notarial *"1, 芁芙 t1ls M 腶EW銓  辝 鋟 鎐 R軝 腡 Doc. No. Page No. `轖 Book No. Series of 荏 莓 24