菒 苆 NOW, THEREFORE, for and in consideration of the foregoing premises, the mutual covenants, terms and conditions hereinafter set forth, it is hereby stipulated and agreed as follows: sEcTtoN I SCOPE 1.'1. This Agreement is a Mineral Produclion Sharing Agreement enlered into pursuant to the provisions of the Act and its implementing rules and regulations. The primary purpose of this Agreement is to provide for the rational exploration, development and commercial utilization of certain chromite, gold and other associated mineral deposits existing within the Contract Area, with all necessary services, technology and financing to be fumished or arranged by the Contractor in accordance with the provisions of lhis Agreement. The Contractor shall not, by virtue of this Agreement, acquire any title over the ContracvMining Area without prejudice to the acquisition by the Contractor of the land/surface rights through any mode of acquisition provided for by law. 1.2. The Contractor shall undertake and execute, for and on behalf of the Government, sustainable mining operations in accordance wilh the provisions of this Agreement, and is hercby constituted and appointed, for the purpose of ihis Agreement, as the exclusive entity to conduct mining operations in the Contraci Area. 腏艕 The Contractor shall assume all the exploration risk such that if no minerals in commercial quantity are developed and produced, it will not be entitled to reimbursement. produclion 14Agreement, the value of and sale of During the lerm of this mining toial herein b€ minerals derived from the operations contemplated shall accounted for and divided between the Government and the Contractor in accordance with Section Vlll hereof. V sEcTtoN DEFINITIONS As used in this Agreement, the following words and terms, whether singular or plural, shall have the following respective meaning: 2.1. Act refers lo Republic Ac1 No. 7942, otherwise known as the "Philippine Mining Act of 1995.' 2.2. Aqreemenl means this Mineral Produc-tion Shadng Agreement. 2.3. Associated MineIals mean other ores/minerals, which occur logether with the principal ore/mineral. 2.4. Banoko Senlral means Bangko Sentrat ng patipinas. J Budoel means an estimate of expendiiures to be made by Contractor in ^{ opeEtions contemplated hereunder to accomplish the Work program mini"d >\ particular period. for eachV V 2.6. Bureau means Mines and Geosciences Bureau. 腌膜 2.7. Calendar Year or Year means a period of twelve (12) consecutive months starting with the first day of January and ending on December 31, while "Calendar Quarte/ means a period of three consecutive months with the first calendar quarler starting with the first day of January. 2.8. Commercial Production means the production of sufficient quantity of minerals to sustain economic viability of mining operations reckoned from the date of commercial operation as declared by the Contractor or as stated in the feasibility study, whichever comes first. 2.9. Constitution or Philipoine Constilution means the '1987 Constitution of the Republic of the Philippines adopted by the Constitutional Convention of 1986 on October 15, 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 Contraclor and properly defined by latitude and longitude or bearing and distance. 2.'l'1. Contract Year means a period of twelve ('12) consecutive months counted from the Effective Date of this Agreemenl or from the anniversary of such Effective Date. 2.12. Contaclot means BICOL CHROUITE AND iIANGANESE CORPORATION or its assignee or assignees of interest under this Agreement: Provided, That the assignment of any of such interest is accomplished pursuant to the pertinent provisions of the implementing rules and regulations of the Act. 2.13. Declaration of Minino Feasibililv means a document proclaiming the presence of minerals in a specilic site, which are recoverable by socially acceptable, environmentally safe and economically sound methods specified in the Mine Developmenl Plan. 2.'14. Deoartment or DENR means lhe Department of Environment and Natural Resources. 2.15. Director means lhe Director of Mines and Geosciences Bureau. 2.16. Effeclive Dale means lhe date of execution of this Agreement by the Contractor and by the Secrelary on behalf of the Government. 2.17. Environment means all facets of man's surroundings: physical, ecological, aesthelic, cullural, economic, historic, institutional and social. 2.18. Exoloration means searching or prospecting for mineral resources by geological, geophysical and geochemical surveys, remote sensing, iest pitting, trenching, drilling, shaft sinking, tunneling or any other means for the purpose of determining the exislence, extent, quality and quantity of mineral resources and the feasibiliiy of mining them for profit. 2.19. Exploration Period shall mean the period from the Effective Date of this 鷈 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 (g) years for metallic minerals, subiect to the pertinent provisions of ihe implementing rules 腌 and regulations of the Act. 裪 2.20. Force Maieure means acts or circumstances beyond the reasonable control of the Conlractor ancluding, but not limited to war, rebellion, insurection, riots, civil distubances, blockade, sabotage, embargo, strike, lockout, any dispute with surface owners and other labor disputes, epidemics, earthquake, stom, flood or other adverse weather conditions, explosion, fire, adverse action by the Govemment or by any of its instrumentality or subdivision thereof, act of God or any public enemy and any cause as herein descdbed over which the affected party has no reasonable crnlrol. 2.21 . Foreion Exchanqe means any currency other than the currency of the Republic of the Philippines acceptable to the Government and the Contractor. 2.22. Government means the Govemment of the Republic of the Philippines or any of its agencies and inslrumentalities. 2.23. Gross Outout means the actual ma*et value of the minerals or mineral products from each mine or mineral land operated as a separale entity, without any deduction for mining, processing, refining, transporting, handling, marketing or any other expenses: Provired, That if lhe minerals or mineral producls are sold or consllned abroad by the Contractor under C.l.F. terms, the actual cost of ocean 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 concentrate, the actual martet value shall be the worH price quotalion of the refined mineral products contained thereof prevaaling in the said commodity exchanges, after deducting the smelting, refining, trEatmenl, insuran@, transportation and other charges incuned in the process of converling mineral concentrates into refined metal traded in those commodity exchanges. 2.24. Mine Oevelooment refers to work unde aken to prepare an ore body or a mineral deposit for mining, includang the construc'tion of necessary infrastructure and relaled facilities. 菕 2.25. Minerals mean all naturally occuning inorganic subslanc€s in solid, liquid, gas or any intermediate state excluding energy materials such as coal, petroleum, natural gas, radioactive materials and geolhermal energy. 2-26. Mineral Producls mean materials dedved from mineral ores/rocks and prepared into marketable state by metallurgical processes $,hich include beneficiation, cyanidation, leaching, smelting, calcinalion and other similar processes. 2.27. Minino Area means that portion of the Contract Area identiti€d by the Contractor as defined and delineated in a Survey plan duly approved by the Director/Regional Director concerned for purposes of development and/or utilization and sites for support faciliti€s. 2.28. iri!inS-Opela!9!9 means mining actjvities involving expbration, feasibility study, environmental impaci assessment, development, uiilization, mineral processing and mine rehabilitation. 2.29. Notice means nolice in wriling, telex or telecopy (authenticated by ansvrer back or confirmation received) addressed or sent as prowed in Seainn tO.2 ot ttris Agreement. 2.30. Ore means naturally occurring substance or material from which a mineral or element can be mined and/or processed for profit. 2.31. 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 discharge thereto of any liquid, gaseous or solid wastes or any production of unne@ssary noise or any emission of objeclionable odor, as will or is likely to create or render such water, air, and land resources harmful, detrimental or iniudous to public heahh, safety or welfare or which wil, adversely affect their utilization for domestic, commercial, industrial, agricultural, recreational or olher legitimate purposes. 2.32. Secretarv means lhe Secretary of the Department of Environment and Natural Resources. 2.33. State means the Republic of the Philippines. 2.34. Work Prooram means a document which presents the plan of major mining operations and the corresponding expenditures of the Coniractor in its Contract Area during a given period of time, including the plan and expendilures for development of host and neighboring communities and of local geoscience and mining technology, as submitted and approved in accordance with the implementing rules and regulations of the Act. sEcTtoN l TERM OF AGREEMENT 3.'1. This Agreement shall have a term of twenty five (25) years from Effective Date, and may be renewed thereafter for another term not exceeding twenty five (25) years. The renewal of this Agreemenl, as well as the changes in the terms and conditions thereof, shall be upon mutual consent by the pafiies. 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 Contractor shall have the right to equal the highest bid upon reimbursement of all reasonable expenses of the highest bidder. SECT:ON iV CONTRACT AREA V Lot l LatitudeLongitude Corner 艐 13膋 47. 0000腅123膋27'0000腅 艑 13膋 48. 0000腅123膋27'0000腅 艒 13膋 48' 0000腅123膋28'3000' 艓 13膋 47' 3000腅123膋28'3000' 艔 13膋123膋 47' 3000腅30'0000" 艕 13膋 47. 0000腅123膋30'0000' 艖 13膋 47' 0000腅123膋 31'0000' 艗 13膋 45' 3000'123膋31'0000' 艘 13膋 45' 3000''123膋31'3000" 腝艏 13膋 45' 0000"123膋31'3000" 艐艐 13膋 45' 0000腅123膋31'0000' 艐艑 13膋 44' 3000腅123膋31'0000' 艐艒 13膋 44' 3000"123腅30'3000" 艐艓 13膋123膋 45' 0000"30'3000" 艐艔 13膋 45' 0000"123膋30'0000' 艐艕 13膋 45' 3000"123膋30'0000' 艐艖 13膋 45' 3000'. 123膋29'0000" 艐艗 13膋 46' 3000"123膋29'0000" 艐艘 13膋 46' 3000腅123膋 30'0000腅 艑艏 13膋 47' 0000" 123膋30'0000" Lo1 2 Latitude Corner Longitude 艐 13膋 45' 0000腅123膋 32'3000腅 艑 13膋 46' 0000腅 123膋32'3000' 艒 13膋 46. 0000"123膋 33'3000腅 艓 13膋 45' 0000腅 123膋33'3000' V SECTION V EXPLORATION PERIOD 5.'1. Timetable for Exploration - The Contractor shall commence Exploration activities not later than three (3) months afler the Effeclive Date for a period of two (2) years, renewable for like periods but not to exceed a total term of six (6) years for nonmetallic minerals and eight (8) years for metallic minerals, subject to annual review and approval by the Director in accordance with the implemlnfing rules and regulations of the Act. 5.2. Renewal of Exploration period - ln case the Contractor opts for a renewal of ils Exploration Period, it shall file prior to the expiration thereof, a renewat application in the Regional Office concemed, accompanied by the mandatory requirements stipulated in the implementing rules and regulationi of itre nA. Tfre Director may grant rhe renewar of the Ex-proration periio on conoition tnat ttre Cont.actor has substantially complied with the lerms ana conJilons ot tfre Agreement. ln cases. where. further exploration is wananted beyond the six (6)- or eight (g)_ year period and on condition that th^e Contractor nis substanfiai( imptemenieO t V the Exploration and Environmental Work Programs as verified by the Bureau, the Director may further grant renewal of the Exploration Period: Provided, Thal the Conlractor shall be required to set up a pedormance surety equivalent to the expenditure requirement of the Exploration and Environmental Work Programs. 5.3. Work Programs and Budgets - The Contractor shall stdctly comply with the approved Exploration and Environmental Work Programs together with their corresponding Budgets (please refer to ANNEXES 'B" and 'C"). The amount to be spent by the Contractor in conducling Exploration aclivities under lhe terms of this Agreement during the Exploration Period shall be in ihe aggregate of not less than that specified for each of the Contract Years, as follows: For the Exploration Work Program: 1d Contract Year : PhP 2,345,500.00 2d contract Year : PhP 2,702,500.00 Total : PhP 5,049,@0.00 For the Environmental Work Program : PhP 470,000.00 ln the event of renewal of the Exploration Period, the amount to be spent every year shall firsl be agreed upon by the parties. ln the event of termination of this Agreement, the Contraclor shall only be obliged to expend the pro-rata amount for the period of such Contract Year prior to termination. lf during any Contract Year, the Contractor should expend more than the amount to be expended as provkled above, lhe excess may be subtracted from the amount required to be expended by the Contractor during the succeeding Contrac-t Years, and should the Contractor, due to unforeseen circumstances or wilh lhe consent of the Govemment, expend less during a year, then the deficiency shall be applied to the amounl to be expended during the succeeding contracl Years. 5.4. Relinquishment of TotauPortion of the Contract Area - Ouring the Exploration Period, the Contmctor may relinquish totally or partially the original Contract Area. After the Exploralion Period and pdor to or upon approval of a Declaration of Mining Feasibility by the Direclor, the Contracior shalt finally retinquish any portion of the Contract Area not necessary for mining operations and nol covered by any Declaration of Mining Feasibility. 5.5. Final Mining Area - The Director may allow lhe Contractor to hold more than one (1) final Mining Area subject to the maximum limits sel under lhe implementing rules and regulations of the Act: provided, That each final Minino Area shall G covered by a Declaration of Mining Feasibility. 5.6. Declaration of Mining Feasibility - Within the term of the Exploration period, the Contraclor shall file in the Regional Otfce concemed, the Eieclaration of ttinino Feasibirity of the contGct Area/finar Mining Area supporteo oy tritinin-q F;;ibiriti ! Study. -Three (3)-year Devetopment and aonstruction o, Correr"iai Or"i.rr.i t program, ^ worx complete geologic report, an application for survey inO re \ -L penrnent tnvironmental Compliance Certificate. among other ipplicable V requiremenls. Failure of the Contraclor to submit the OE"farat-ion of l,ining Feasibirity during the Exproration period shafl be consiJ"iJ orr""t of this Agreement. " "ro"iinti"r 膥 57 Survey of the Contrac-t Area - The Conlraclor shall cause the survey of the perimeter ot the Contracl Area/final Mining Area through an application for survey, complete with requiremenG, filed in the Regional Ofrice concemed simultaneous with the submission of the Declaration of Mining Feasibility. Survey retums shall be submitted to the Regional Director concemed for approval within one (1) year from receipt of the Order of Survey complete with ihe mandatory requirements stated in lhe amplementing rules and regulations of the Act. 58 Reporting a. During the Exploration Period, the Contractor shall submii to the Director, through the Regional Director concemed, quarlerly and annual accomplishment reports under oath on all activities conducted in the Contract Area from the Effeclive Date of ihis Agreement. The quarterly report shall be submitted not later than fifreen (15) days at the end of each Calendar Quarter while the annual accomplishment reporl shall be submitted not laler than thirty (30) days trcm the end of each Calendar Year. Such information shall include detailed financial expenditures, raw and processed geological, geochemical, geophysical and radiometric data plotted on a map at a minimum l:50,00O scale, copies of originals of 腛 assay results, duplicated samples, lield data, copies of orilinals from drilling reports, maps, environmental work program implementation and detailed expenditures showing discrepancies,/ doviations with approved exploration and environmental plans and budgets as well as all other infomation of any kind collected during the exploration activities. All informalion submitted to the Burcau shall be subject to the confirentiality clause of this Agreement. b. Final Report - The Contraclor shall submit to the Director, through the Regional Director concemed, a final reporl under oath upon the expiration of the Exploration Period which shall be in the form and subslance comparable to publbhed professional reports of respeciable international institutions and shall incorporate all the findings in the Contract Area including location of samples, assays, chemical anatysis, and assessment of mineral potentials togelher with a geologic map of 1:50,000 scale at the V minimum showing the results of the exploration. Such reporl shall also include detailed expenditures incuned during the Exploration period. ln case of diamond drilling, the Contraclor shall, upon request ot lhe Director/Regional Director concemed, submit to the Regional Office concemed a quarler of the core samples, which shall be deposited in th6 Regional O{fice Core Library for safekeeping and reference. c. Relinquishment Report - The Contractor shall submit a separate relinquishmant report with a detailed geologic report of the retinquished area accompanHl by maps at a scale of 1:5O,OOO and results of anatyses and detailed expenditures, among others. SECTION VI DEVELOPITENT AND CONSTRUCTION PERIOD 61 .TJT1I^!9- Il . C"Itractor shafi-comptete the devetopment of the mine inctuding rne @nstructaon of production facilities within thirr_six (36) months from the submission of the Declaration of Mining Feasibitity: suU.;La'to iucrt extlnsion based on justifiable reasons as the Director may approve, upon recommendalion of the Regional Director con@rned. 6.2. Reporting aAnnual - The Contractor shall submit, within sixty (60) days after December 31 of each year, to the Direclor, through the Regional Direclor concerned, an annual report, which states the major activities, achievemenls and detailed expenditures during the year covered, including maps, assays, rock and mineral analyses and geological and environmental progress reports during ihe Development and Construclion Period. b - (6) Final Report Within six months from the complelion 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 appropiate scale and quality, as well as in monog.aphs or reports in accordance with inlernational standards. sEcTtoN v[ OPERATING PERIOD 7.1. Timetable - The Contractor shallsubmit, within thirty (30) days before complelion of mine development and construction of production facilities, to the Director, through the Regional Director concerned, a Three-Year Commercial Operation Work Program, The Contraclor shall commence comm€rcial utilization immediately upon approval of the aforesaid Work Program. Failure of the Contractor to commence Commercial Production within lhe period shall be considered a substantial breach of lhe Agreement. 7.2. Commercial Operation Work Program and Budget - During the Operating period, the Contractor shall submit to the Director, through the Regional Director concemed, Work Programs and Budgets covering a period of three (3) years each, which shall be submitted not later than thifiy (30) days before the expiration of the p€riod covercd by lhe previous Work ProgIam. The Contractor shall conduct Mining Operations and other activities for the duration of the Operating Period in accordance with the duly approved Work Programs and corresponding Budgets. 7.3. Expansion and Modification of Facilities - The Contractor may make expansions, modilications, improvemenls, and replacements of the mining facilities and may add new facilities as the Contractor may consiler necessarifor the operations: Provided, That such ptans sha be embodied in an appropiiate Work program approved by the Director. 7.4. Reporting a. Quarterly Reports - Beginning with the first Calendar euarter following the .:9.T,i::f r:.:ll. "f the operarins period, the contractor sha submit, wfihrn thrrty (30) days after the end of each Calendar euarler, to the Director, through the Regional Director concemed, Or"rfuJV'n"pon stating the tonnage of production in terms of ores, " 'rnj mi, "on""ntrrG", corresponding grades and other types of products; value, destination ot 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 sufticient 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 conesponding destination, tonnages stockpiled in the mine and elsewhere in ihe Philippines, tonnages sold or committed for export (whether actually shipped from the Philippines or not), tonnages ac'tually shipped from the Philippines (with full details as to purchaser, destination and terms of sale), and if known to lhe Conlractor, tonnages refined, processed or manufactured in the Philippines with full specifications as to the intermediate products, by-products or final producls and of the terms at which lhey were disposed; oz Work accomplished and work in progress at the end of the year in queslion with respect to all the installations and facilities related to the utilization program, including the investmenl actually made or committed; and b.3. Profile of work force, including management and statf, stating particularly their nationalities, and for Filipinos, their place of origin (i.e., barangay, town, province, region). The Contractor shall also comply wilh other reporting requirements provided for in the implementing rules and regulations of the Act. sEcTloN vlr FISCAL REGIME 8.1. GeneEl Principle - The fiscal regime of this Agreement shall be governed by the principle according to which the Govemment expecls a reasonable retum in economic value for the utilization of non-renewable mineral resources under its nalional sovereignty while the Contractor expects a reasonable relurn on its investmenl with special account to be taken for the high risk of exploration, the terms and conditions prevailing elsewhere in the industry and any special efticiency to be gained by a particularly good performance of t'he Contractor. 8.2. Registration Fees - Within fifteen (1S) days upon receipt of the notice of approvat of the Agreement from the Regional Offce crncerned, the Contractor shali cause the. registration of this Agreement wilh the said Regional Oflice and pay the registration fee at the rate provided in the existing rulei and requlations. Faiture of the Contractor to cause the registration ot ttris -Agreement wiihin it" o*"Jbej J period shatlbe sufricient ground for canceltation ofihe same. '- --- ^.]._ 8.3. Occupation fees - prior to registration of this Agreement and at the same d",. \ ) every year thereafter. the Contractor sha[ pay to the trrtunicipaVCity i;;il;;; - concemed an occupation fee over the Contraci Area at the aniuairate provided in the existing rules and regulations. lf the fee is not p"iO onitre Oate specified, '10 the Contractor shall pay a surcharge of twenty five percent (25%) of the amount due in addition to the occupation fees. 8.4. Share of the Government - The Government Share shall be the excise tax on mineEl products at the time of removal and at the rale provkled for in Republic Act No. 7729 amending Section 151 (a) of the National lnternal Revenue Code, as amended, as well as other taxes, duties and fees levied by existing lar,vs. The Excise Tax shall be paid to the nearest Bureau of lnternal Revenue Omce in the province concerned. For purposes of delermining lhe amount of the herein Government Share, the Contractor shall strictly comply with the auditing and accounting requirements prescribed under exisling laws and regulations. The Government Share shall be allocated in accordance with Sections 290 and 292 of Republic Act No. 7160, otherwise known as "The Local Government Code of 1991.' 8.5. Pricing of Sales - The Contractor shall endeavor to obtain the best achievable price for its production and pay the lowest achievable marketing commissions and related fees. lt shall seek to strike a balance behfleen long-term sales comparable to policies followed by independent producers in the intemational mining industry. The Contrac{or shall likewise seek a balanced distribution among consumers. lnsofar as sales to Coniracto/s aftiliates are @ncemed, prices shall be at arm's length standard and competing offers for large scale and long{erm contracts shall be procured. The Bureau shall be fumished a copy of the said Sales Agreement subiect to confidentiality betlveen the Bureau and the Contractor. 8.6. Associated Minerals - lf minerals other than gold 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 Governmenl share. sEcTtoN tx WORK PROGRA S 9.1. Submission to Government - Within the periods stated herein, the Contractor shall prepare and submit to the Director, through the Regional Director concemed, a Wo.k Program and cor,esponding Budget for the Conlract Area stating the Mining Operations and expenditures which the Conlraclor proposes to carry out during the period covered with the details and particulars sel forth elsewhere in lhis AgEement or in the supporting documents. 9.2. Govemment's Examination and Revision of Work program - Should the covernment decide to propose a revision to a certain specifrlc feature in the Work Program or Budget, it sha[, within thirty (30) days aftei receipt itrereof, proviae a Notice.to.the Contractor specrfying in reasonjOe Oetait its'ieaions tneretore. Frompfly thereaner, the Government and Contractor will meet and endeavor lo agree on the revision proposed by the Govemment. ln any event, the revision of any-portion of said Work program or Budget in which the doveinm;nt shal fail to notify .the Contractor of the proposed ievisinn strail. inso'tai as'posste, Ue carried out as prescribed herein. lf lhe Govemment sfroufA faif witnrn sixty days from receipt thereof ro notifo Conrracro, th; ;;ilJi ;;;i"iin". rn. 1OO1 "f wo* V Program and Budget proposed by the Contrac-tor shall be deemed to be approvd. 9.3. Contractor's Changes to Work Program - lt is recognized by the Govemment and the Contraclor that the delails of any Work Program may require changes in the light of changing circumstances. The ContEclo. may make such changes: Provided, That it shall not change the general objective of the Wo* Program: Provided further, That changes which entail a varianc€ of at least t!,r€nty percent (20%) shall be subject to the approval of the Direc{or. 9.4. The Govemments appmval of a proposed Work Program and Budget will not be unreasonably withheld. sEcfloN x ENVIRONMENTAL PROTEGTION AND MINE SAFEW AND HEALTH 10.'1. The Contractor shall manage its Mining Operations in a technically, financially, socially, culturally and environmentally responsible manner to achi€ve the sustainable development objectives and responsibilities as provided for under the implementing rules and regulations of the Act. 10.2. The Contractor shall ensure that the standards of environmental prolection are met in the course of the Mining Operations. To the extent possible, control of pollution and the transfomalion of the mined-out areas or materiab into ecrnomically and socially produc{ive forms must be done simultaneously with mining. '10.3. The ContracloI shall submit an Environmental Work Program during the Exploration Period as prescribed in the implementing rules and regulations of the Act. '10.4. An Environmental Compliance Certificate (ECC) shall be secured first by the Contractor prior to the conduct of any development works, consiruclion of production facilities and/or mine production activities in the Conlract Area. 10.5. The Contractor shall submit vrithin thirty (30) catendar days afrer the issuance and receipt of the ECC, an Environmental protection and Enhancement program (EPEP) using MGB Form No. 1G2 covering all areas to be affectea by developmenl, utilization and processing activities under this Agreement. The Contractor shall allocate for its initial environment-related capital expenditures approximately ten percent (10%) of the total proiect cost or in such amount depending on lhe environmentaugeological condition, nature and scale of operations and technology to be employed in the Contract Area. 10.6. The Contractor shal submit, within thirty (30) days prior to the beginning of every calendar year, an Annual Environmenial protettion and Enhandmeniprogram (AEPEP), using MGB Form 1G3, which shall be based on the aDDroved EpEp. The AEPEP shall be implemented during the year for which it ;as submitted. To implement its AEpEp, the Contracto; shait alocate annua y ttrree to frue percent (3016-5%) of its direct mining and milling costs depending on the environmentaygeologic condition, nature and scale o:f operationi and tecfrnotogy employed in the Conlract Area. 10.7. The ContractoI shall establish a Mine Rehabititation Fund (MRF) based on the financiar requirements of the approved EpEp as a reasoirauL'e-nvrronmentat 12 deposit to ensure satisfactory crmpliance with the commitments/strategies of the EPEP/AEPEP and availability of tunds for the pertormance ot the EPEP/AEPEP during the specific project phase. The MRF shall be deposited as Trusl Fund in a govemment depository bank and shall be used for physical and social rehabilitation of areas affecled by mining aclivities and for research on the social, technical and preventive aspecls of rehabilitation. 10.8. The Contractor shall set up mitigaling measures such as mine wasle and mill tailings disposal system, mine rehabilitation or plan, waler quality monitoring, etc. to minimize land degradation, air and water pollution, acil rock drainage and changes in hydrogeology. 10.9. The Conlractor shall set up an Environmental and Safety Office at its minesite manned by qualified personnel to plan, implemenl and monitor its approved EPEP. 10.10. The Contractor shall be responsible in the monitoring of environmental, safety and health conditions in lhe Contracl Area and shall striclly comply with all the rules and regulations embodied under DAO No. 200G98, othen{ise known as lhe 'Mine Safety and Health Standards." 10.11.The Conlractor shall be responsible for the submission of a final mine rehabilitation and/or decommissioning plans, including its financial requirements ard incorporating the details and particulars set forth in the implementing rules and regulations of lhe Ac1. sEcTtoN xt RIGHTS AND OBLIGATIONS OF THE PARTIES 11.'1. Obligations of the Contractor: a. To exclusively conduct sustainable Mining Operations within the Contracl Area in accordance with the provisions of the Act and its implementing rules and regulations; b. To construct and operate any facilities specified under lhe Mineral Agreement or approved Work Program; c. To determine the exploralion, mining and trealment process to be utilized in lhe Mining Operations; d. To extract, remove, use and dispose of any tailings as authorized by an approved Work Program; e. To secure all permits necessary or desirable for the purpose of Mining Operations; f. To keep accurate technical records about the Mining Operations, as well as financial and marketing a@unts, and mak; them available to Govemmenl representatives authorized by the Director for the purpose of assessing lhe performance and compliance of the Contractor wilh the terms of this Agreemenl. Authorized repEsentatives of other Govemmenl Agencies may also have access to such accounls in accordance with existing laws, rules and regulations; g. To furnish the Bureau all the daia and information gathered from the Contract Area and that all the books ot accounts and records shall be open for inspection; h. To allow access to Govemment during reasonable hours in inspecting the Contract Area and examining pertinent records for purposes of monatoring compliance with the terms of this Agreement; To hold the Govemment free and harmless from all claims and accounts of all kinds, as well as demands and actions arising out of ihe accidenls or injuries to persons or properties caused by Mining Operations of the Contractor and indemniry the Govemment for any expenses or costs incurred by lhe Govemment by reason of any such claims, accounls, demands or actions; ln the development of lhe community; j.1. To recrgnize and respect the rights, customs and traditions of indigenous cullural communities over their anceslral lands and to allocate royalty paymenl of not less than one percent (1%) of the value of the gross output of minerals sold; 腛 j.2. To coordinate with proper authorities in the developmenl of the mining community and ,or those lMng in the host and neighboring communilies through social infrastructure, livelihood programs, education, water, electricity and medical services. Where traditional self-sustaining income and the community activities are identified to be presenl, the Contractor shall assist in the preservation and/or enhancement of such activities; j.3. To allol annualty a minimum of one percent (1%) of the direct mining and milling costs necessary to implemenl the activilies underlaken in the developmenl of the hosl and neighboring communities. Expenses for community development may be charged against the royalty payment of at least one percent (1olo) of the gross ouFut intended for the concemed indigenous cultural community; i.4. To give preference to Fitapino citizens who have established domicile in the neighboring communilies, in the hiring of personnel for its mining operations. lf necessary skills and expertise are cunenily not available, the Conlractor must immediately prepare and underlake a training and recruitment program at its expense; and j.5. To incorporate in the Mining Feasibitity Study the planned expenditures necessary to implement (i.1)to (i.3) oithis Section: k ln the development of Mining Technology and Geosciences: k.1. ln the course of its operations. to produce geological, qeoDhvsical. geochemical. and other types. of maps -ano lepo,is injr J appropriate in scale and in format and substance wtrich "ie consistent with the inlemationaly accepted are d practices. Such maps shall be mide stanOarOs anJ r-._-) available to it. -ii#"- \ I community in the most @nvenient ,nO co"t ""i"rtm" / subject to the condition that the Contractor ;;y "tf"Lti* J"i;; ,"t";;';; 14 said information for a reasonable period of time which shall not exceed three (3) years; k.2. To systematically keep the data generated from the Contracu Mining Area such as cores, assays and other related information. including economic and financial dala 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; k.3. To lransfer lo lhe Govemment or local mining company the appropriate technology it may adapt in the exploration, development and commercial utilization of the minerals in the Contract Area; k.4. To allocate research and development budget for the advancement of mining technology and geosciences in coordination with the Bureau, research institutions, academe, etc.; and k.5. To replicate data, maps and reports cited in (k.1) and (k.2) and fumish the Bureau for archiving and systematic safekeeping which shall be made available to lhe science and technology communily for conducting research and undertaking other activities which contribute to the development of mining, geoscience and processing technology and the conesponding national pool of manpows talents: Provided, however, that the release of data, maps and the like shall be similarly constrained in accordance with (k.1) and (k.2) abovel l. To incorporate in the Mining Feasibility Study the planned expenditures necessary to impbment all the plans and programs set forth in this Agreement; and m. To pay all other taxes and fees mandated by existing laws, rules and V regulations. 'l'1.2. Rights of the Contractor: a. To conduct Mining Operations within the confines of its Contrac?Mining Area in accordance with the terms and conditions hereof and without interfering with the rights of other Contraciors/Lessees/Operators/ Permittees/Permit Holders; b. Possession of the Contract Area, with full right of ingress and egress and the right to occupy the same, subjec{ to surface andeasement r6hts; c. To use and have access lo all declassified geological, geophysical, drilling, production and other data relevant to the ;inindoperaiions; d. To sell, assign, transfer, anv? ol otherwise dispose of a its rights, interesls and obligations under tire Agreement suO;'eJ to t'trJ approvaf of lhe Govemmenl; To_employ or .bring into the philippines foreign technical and specialized personnel. including lhe immediate member; of lheir farii;; ;;;;;; 15 required in the op€rations of the ContEctor, sub.ie61 to applicable laws and regulations: Provided, That if the employmenl connec{ion of such foreign persons with the Contractor ceases, lhe applicable laws and regulations or 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 subiec{ to the rcquired approval under existing lar,\,S, rules and regulations; f. To enjoy easement rights and use of limber, r,vater and other natural resources in the Contracl Area subjecl to pertinent lauB, rules and regulations and the rights of third parties; g. Repatriation of capital and remittance of profits, divadends and interest on loans, subrecl to existing laws and Bangko Sentral ng Pilipinas rules and regulations; and h. To import when necessary all equipment, spare parts and raw materials required in the operations in accordance with existing laws and reg ulations. V 1'1.3. Obligations of the Govemment: a. To ensure that lhe Contractor has the Government's full cooperation in tha exercise of lhe rights granted to it under this Agreement; b. To use its best efforts to ensure the timety issuance of necessary permits and similar authorizing docurnents for use of th6 surface of the Contracl AEa; and c. To cooperate with the Contractor in iis efforts to obtain financing contemplated herein from banks or other financial instilutions: provided, Thal such financing anangements will in no event reduce the Contractor,s obligation on Government righls hereunder. 荖 sEcTtoN x[ ASSETS AND EQUIPIENT 12.'1. 7he Contractor shall acquire for the Mining Operations only suci assets that are reasonabiy eslimated to b€ requiEd in canying out such Mining Operations. 12.2. All matreriats, equipment, plant and other installations of a movable nature erecled or placed on the Contract Area by the Contractor shall remain the propert of the Conlraclor. The Contractor shall have the right to remove and re- exporl such materials and equipment, plant and other installations from the Pnifippines, subject to existing rules and regulations. tn case oicessation ot Mining Operations on public lands occasioned by its voluntary abandonment or withdrawal, the Contmclor shal have a perioa oi one ltfyeai trl-, tne tim. ot 膌 cessation within which to remove its improvements j ;the;;, a[ social 誴 infrastructures and facilities shafl be.turned over or oonaieoGx ireJio tre proper gov€mment authorilies, nalional or local, to ensure thal said infrastructures and facitities .a.e continuousty maintained and utitizJ Uv lfre fr-osi aij'nerghodng communities. 16 sEcTtoN x EMPLOYMENT AND TRAINING OF PHILIPPINE PERSONNEL 13.1. The Contractor agrees to employ, to the extent possible, qualified Filipino personnel in all types of mining operations for which they are qualified; and after Commercial Production commences shall, in consultation and wilh consent of the Govemment, prepare and undertake an extensive training programme suitable to Filipino nationals in all levels of employment. The objective of said programme shall be to reach within the timetable set forth below the following targets o, 'Filipinization:' sEcTtoN xv SUSPENSION OR TERTIIIINATION OF CONTRACT, TAX INCENTIVES AND CREDITS 15.1. This Agreement may be suspended for failure of the Contractor: (a) to comply with any provision or requirement ot the Act and/or its implementing rules and regulations; (b) to pay taxes, fees and/or other charges demandable and due the Governmenl. 15.2. This Agreement terminates or may be terminated for the following causes: (a) expiration of its term, whether odginal or renewal; (b) withdrawal from the Agreement by the Contractor; (c) violation by the Contractor of the Agreement's terms and condilions; (d) failure to pay taxes, 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 providd 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 essential parts hereof, and any falsehood in said statements or omission of facts 膥 which may alter, change or affect substantially the fact set forth in said statements shall be a ground for its revocation and termination. 15.4. The Contractor may, by giving due notice at any time during the term of this Agreement, apply for its cancellation due to causes which, in the opinion of the Contraclor, render continued mining operation no longer feasible or viable. ln this case, the Sec€tary shall decide on the application within thirty (30) days from notice; Provided, That the Contractor has met all the Iinancial, fiscal and legal obligations. 15.5. No delay or omissions or course of dealing by the Government shall impair any of its rights under this Agreement, excepl 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 effeclive. The Contractor shall immediately carry out the restoralion of the Conlract Area in accordance with good mining industry practice. 15.7. The withdrawal by the Contractor from lhe Mineral Agreement shall not release it from any and all financial, environmental, legal and fiscal oblagations under this Agreemenl. 15.8 The forrowing acrs or omission, irter a/ia shal constitute breach of contract, upon which the Govemmenl may exercise ils right to terminate the Agreement: a. Failure of the Conlractor without valid reason to commence Commercial Production within the period prescribed; and/or b. Failure of the Contraclor to conduct mining operations and other activities in accordance with the approved Wo* pr6grams ind/or any moOification thereof as approved by lhe Oirector. 18 15.9. The Government may suspend and cancel tax incentives and credits if the Contractor lails to abide by the terms and conditions of said incentives and credits. sEcTtoN xvt OTHER PROVISIONS '16.'1. Any terms and conditions resutting from repeal or amendment of any existing laws or regulation or from the enactment of a law, regulation or administralive order shall be considered a part of this Agreement. '16.2. Notice All notices, demands and other communicalions required or permitted hereunder shall b€ made in writing, telex or telecopy and shall be deemed lo 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, aiImail postage prepakl and addressed as follows: lf to the Government: The Secretary Department of Environment and Nalural Resources DENR Building, Visayas Avenue Diliman, Quezon City lf to the Contractor: The President Bicol Chromite and Manganese Corporation 2nd Floor DBP Building, J. Panganiban Drive Naga City Either party may substitute or change such address on notice thereof to the other party. 16.3. Goveming Law This Agreement and the relalion between the parties hereto shallbe govemed by and construed in accordance with the laws of the Republic of the philippines. The Contractor hereby agrees and obl(les itself io comply with the provisions of lhe Acl, its implementing rules and regulations and other relevant laws and reg u lations. '16.4. Suspension of Obligation a Any failure or delay on the part of any party in the performance of ils obligation or duties hereunder shall be excused to the extent attributable lo Force Majeure as defined in the Act provided, That the suspension of Mining Operations due to Force Ma./bure causes shall be subject to 苃 approval by the Director. b. f-Mining Operations are delayed, curtailed or prevented by such 艥 Majeure causes, then the time for enjoying the Force obligations thereby affected, rights and cairying out the the term of th-is Agr&ment and ait riltrts anO 't9 obligations hereunder shall be extended for a period equal to lhe period involved. c- The Party, rvhose 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 pertormance, the expected duration lhereof and its anticipated efiect and shall use its efforts to remedy such delay, except that neither Party shall be under any obligation to settle a labor dispute: Provided, That the suspension of obligation by the Contracior shall b€ subject to prior approval by the Director. 16.5. Amendments This Agreoment shall not be annulled, amended or modified in any resp€ct except by mutual consent in wIiting of the herein partbs. 11{ wITNESS WHEREOF, the Parties hereto have executed this Agreement, as of the day and year first above written THE REPUBLIC OF THE PHILIPPINES V ACKNOWLEDGMENT Republic of the Philippines) Quezon City )SS Before me, a Notary Pubic forpersonally and in the Cig of Quezon, appeard MiCHAEL T DEFENSOR, wtth Community Tax Certificate No. l56J3l4l f腡 鏪鑓11躯 譬顟趂諭趌11譲诺:S芳韚1镹i 苦 顃 Community Tax Certificate No. Njl9L83 issued on Ja"ua,t l5,ztq 71 0a&" l/,cr^i r Caronrl in his capacity as President of Bicol Chromite and Manganese Corporation, both known to me and to me known to be the same persons who executed the foregoing instrument consisting of twenty one (21) pages, including this acknowledgment page, and acknowledged lo me that the same is their voluntary acts and deeds. lN WTNESS WHEREOF, I have hereunlo set my hand and affix my notarial seal, this ,f . ". .., dayof _ V 膍 Doc. No. 裪菖 Page No. Book No. I Series of 轒 腱 艹