STATUS OF NEGOTIATIONS _ 14 AUG 2011 Final draft discussed between HPM and RR and now subject to internal GOSL review MINING LEASE AGREEMENT between THE GOVERNMENT OF SIERRA LEONE and LONDON MINING COMPANY LIMITED THIS AGREEMENT is made this ,al #- day of k1-'r-ta--,rtf 2O1L ---T between THE GOVERNMENT OF THE REPUBLIC OF SIERRA LEONE represented by the Minister of Mineral Resources (hereinafter referred to as "GOSL") of the ONE PART, and LONDON MINING COMPANY LIMITED, a limited liability company incorporated under the provisions of Cap. 249 of the Laws of Sierra Leone 1960 wiih registration number C.F 14512006 and with its registered offices at27 Old Railway Line, Freetown in the Western Area of the Republic of Sierra Leone (hereinafter referred to as "LONDON MlNlNG", which expression shall, where the context admits, include its laMul assigns and successors) of the OTHER PART. WHEREAS a) By the Mining Lease, as hereinafter defined, GOSL demised and granted to LONDON MllllNG the minerals contained in Schedule B thereto in the area described in Schedule A thereto according to the "LMC Work Plan" described in Schedule C thereto, together with the rights referred to therein for a te.rm of twenty-five (25) years as from 31 August 2009 upon the terms and conditions . therein stated, and '':' .' b) GOSL and LONDON MINING further entered into a Mining Lease Agreement (as hereinafter defined) as a supplemental agreement to the Mining Lease, and :i c) GOSL and LONDON MINING have agreed to amend the terms of the Mining Lease Agreement pursuant to Clause 6 (i) thereof upon the terms herein. IT IS HEREBY AGREED AS FOLLOWS: I. DEFINITIONS AND INTERPRETATION 1.1 Definitions lp this Agreement the following expression shall unless the context requires otherwise, have the following meanings: "Agreement" means this Agreement amending the Mining Lease Agreement, rncluding the schedules hereto, which forms an integral part of this Agreement, and references to this Agreement includes references to such schedules; LONDON MtNtNG - GOSL Mining Lease Agreement 14 Aug2011 Final HPM/RR draft of 8 Aug w_ .-inor.orr"ition. Page 2 "Annual Adjustment" means the amount by which any amounts due under this Agreement and subject to such adjustment is ao;usiea on an annuar l":j.i ..this adjustment shail be 'based on the u.s.';cop tmpticit price Deflator" as pubrished from time to time ov tne u.s. D$;;;";i ;; commerce, Bureau of Economic Anarysis, or index. "change of control" "ny "orp"r"or" series of shall mean the consummation of any transaction or transactions (including without limitation any joint venture, Ianagement arrangement, sale, merger or consolidation), the result of which is that LM plc or any other group of shareholders that coiteltivety beneficialty own more than 50% of the voting equity of LoNDoN MINING before such transaction or series of transactions.cease to (i) be beneficial owners of more than 50% of the aggregate voting equity or lcir'toott MNtrlc;;'[);;;; i;; pgwer to direct or cause the direction of the management and tne boricies oi LONDON MINING; Ittlg L9a9e- Agreement' means the Mining Lease Agreement between cosL and LoNDoN M|NING dated 31 De&mber-zodg and ratified by Parliament on 10 February 201A; "Effective Date of this Agreement" means 1 January 2011, provided that this Agreement is subsequenfly ratified by parliameni contemplated by Clause 6 (i) of the Mining Lease-Agreemeni ; ", "lncome Tax Act": means The lncome Tax Act, 2000 of the Laws of sierra Leone, including any legislation amending the same or substitute thereof and all regulations and rules from time to time-in torce tnereunoli; "LM plc" means LoNDoN MrNrNG, pr.:..?l Engrish pubric company, being the majority shareholder of LONDON MtNING; "Minerals Act": means the Mines iand Minerals Act 2009 of the Laws of sierra Leone, including any legislation amending tfie same or substituted thereof and all regulations and rules from time to tiire;in rorce tnereunoer. "Mining Lease" means lr/ining Lease No.ML.2/0g dated the 31of August 2009 made between the GosL of the one part and LoNDoN MINING of the other part.and dury registered as No.27l2009 at page Mi in uolur"'e ; iii; Book of Mining Leases kept in the office of the ndgiitiai oi cenerat, Freetown and as amended from time to time; "Mining Lease Area": means the area described in schedure A of the Mining Lease and as set out in Schedule A hereto: "Minister": means the Minister responsible for mineral resources; "Programme of Mining operations" means the programme of mining operations as at Augus! ?0j1, which updates and replacei scneoute c to the Mining Lease entiiled "LMC Work plan", as amenoJJ unJ"i'su.tion 113 (1) of the Minerals Act and as shall be iurther amenoeJ trom time to time pursuant to Section 113 (1) "Nomjnated Suppliers" mean those independent, unaffiliated entities, excluding banks and financial institutions, listed in schedule E and as amended from time to time throughout the project ano supprving substantial LONDON MtNtNG - cOSL Mining t_ease Agreement 14 Aug2A11 Final HPM/RR draft of g Aug w- mlnor correitions Page 3 goods and services io LoNDoN MINING on a long_term basis, being the supply of goods and services for-more than one yeai or involving a con'tract amount in excess of US$ 1,000,000. 1.2. lnterpretation Where the context so admits, words impoi'ting the singular slrali include the plural and vice versa. Any reference in the Minerals Act to "large scale mining licenses" shall be construed to refer: to and include the Mining Lease ieferred to herJin, in so far as that reference in the Minerals Act is applicable io this Agreemeni. 2. RESPECTIVE WARRANTIES 2.1. GOSL hereby represents anrj warrants to I-ONDON MINING that: (a) Pursuant to the Minerals Act, the entire properly and control of all minerals in, under or Lrpon the fulining Lease Area is vesied in GoSL, rvhich has the sole and exclusive right ic grant a mining lease relating thereio, free of any lien, claim, or other encumbrance; (b) During the existence of the Mining Lease and this Agreement, no person has or shail have any mineral rights (as ciefined in the lvli"nerli n.t; interests in respect of any minerals loiated over, under orup"n tn" o1- Lease Area o1.!o_any improvements thereto, nlining indemnify LoNDoN MINING ancr GosL generaily agrees to of or against any and all loss or damage'aiilin-g- out in connection with any right or claim inconsistent with any sircfr right;; (c) LoNDoN MTNTNG shalt peaceably enjoy the lr,4ining Lease Area without interruption by GosL or by any other person or persons craiming or under GoSL, or in trust for it, and shall lrave the right during the term oiinn Mining Lease and this Agreement to exprore tor--uno min" iln oie"'ana associated mine.rals. No other person or entity shall hive ffre rigl"li io ;ngug. in any prospecting, exploration ol" mining operations, or any other activities on, above or below the surface in the t/ining Lease nrea Jurinf ir-1" i.i, the Mining Lease and this Agreenrent "r 2.2. LoNDoN MTNTNG hereby represents and warrants to GosL that (a) LoNDoN MINING is a company cluly organized, existing ancl in good standing under the laws of Sierra-L.eone rlro rn"ti '.,a1!dly the duration of this Agreement. LcNDoN MtNtNclas r"**uin roi rJugr1ort and authority to execute and deliver this arrtre requisitulio*", obligations hereunder. Agreenrent and to perfoim its (b) The execution and derivery by LoNDoN MTNTNG of this Agreement and the performance of its obtigaiioni hereunder have been outy aittrorizect by ali necessary corporate or olher action on the part or LoNDON MlNlNG, and no further consent or authorization is required of the trorro oioir".i.r, .i LONDON MIN|NG or LM plc to authorize this'Agr"em*nt. (c) Neither the execution and clelivery of this Agreement nor LONDON MINING's compliance with the obligations contemplited hereby wil conflict with or result in a breach or violation of: (i) the organizational ctocuments Ji :gry?gl.UtNtNG _ cosL Minins Lease Asreemenr Final HpM/RR draft of 8 Aug w_ rn'inor. .oir"iiil-n"' 14 Aug2Olt Page 4 LONDON MTNING (ii) any prwision..of raw MINING or LM 3r-!M.,pr", appricabre to LoNDoN orq o.n the daie nlie"or or (iii) tne iJ,ils of any materiar i$ffit^?il1i,'il8"j. h?fB",J#'#G "; dil oi" ij=""J",.tv or'uv ;hi;; (d) LoNDoN MTNTNG has the financiar and technicar tne erogr;.;'u'or Mini;; op;;;ii"r. capabirities to l;fiTi,ill.:ilhi:, i. accordance 2.3 Any breach of reoresentations and warranties in this breach or irrii nsi""r"nt, subject to crause 2 shail be ffi:Sn|! crause 6.10 or rhis 3. MINING LEASE 3.1 Application of Minerals Act The provisions of the Minerars Act relating to.mining reases Minins Lease, ,n'. shail appry to the the extent that ly::::._lt 3;g fi nooition.i-r,,,rrinJl"rrus, except to thev are inconsistent with tn" pi""iri.;:';iirib Agreement ffi ;"";' il" ;'oui'io nl-J' in il' ng,""ment a and ruU:.:"ffii ;"Y:F nd the As used herein, 'oo1rr"^1,:,-Mining Lease rnea.ns any additionar ricence mining rease ii'-'ii,"fi,.$.i1r'i^T'Sgt;ajql;i,1'"n"" sranted to r-ciNob:r.r 3.2 Term and Renewal The Mining Lease granted to LoNDoN MrN.rNG was granted period of twenty-five (25) yu.r.-., f,.vided for thereiri. initiary for a renewabre for a further period orr,rt"Jn{-15) years ;;;; rt sha, then be in writing bv LoNDoru rvrrr.rrr.ri ,o'ini'rr,4inbfer ai d;i an apprication made of the originarterm in with ;;. year before the ;x'iration "..orirn." section-lrz orthe Minerars Upon the makino of the application to. renew the Mining MIN|NG or Gost may request that certain tn"i"rr.'J, Lease, LoNDoN or this Agreement be amendeo "i in" Mining Lease "ni"rr-,"tr negotiaie"ir,I'"ru"ting of such "',i,11'J, jJ:):"r 1 ,*. ffi ji,F'ft ;hr',T$i .f; Hr"xi''l':l;'lil,tgJu!:f I agreement is reached or untl it is determineo tnaiirr" . ',r. :T., ; be renewed' A decision ;"ii;;;n;;"i;" r,rriring Lease sha, not 'I {z accordance with section rzs or nrrirJl"r.;";;; be reviewed in renewal of this Agreement inl"rviin"i"i. X.i."X;,'rlyvocation or non_ of the shail automaticarry .on.tituiu'.'-slrit",. revocation ilffi:i:ir:war Minins r-""r".nJ vicsversa.'ii""*.ii", is subject l-:" to I , :'. "{ 3.3 Extension of Mininq Lease "(: 3., Should the current holder or its successor of the mineral qrga in a 25 (twenty fiveJ kilometre right on the land FP '* definitively surrender all or portion radius of the Mining Lease Area n\--. a of its rights to the surrounding area, or s IONDON MINING - cOSL Mining Lease Agreement Finat HpM/RR draft of 8 Aug w_;l"r;;-#i#.' 14 Aug2011 Page S shourd the ricense be canceiled, in such event, LoNDoN MTNTNG shail be given the first right option to appiy to GoSL for any additional reconnaissance licenses, exploration licenses, small or targe scJe'rining licenses specifically for iron ore , provided such areas oo not-fatt wiftrin another company,s valid minerar right and provided further that LoNDon rvururruc makes such application within 60 days of written confirmation of such surrender or cancellation' lt is understood that the option t" rpprv is no assurance of the grant of those licenses, as referred to above to'l6r..rooru MlNlNG, which such application will be disposed of as provioeJ in respective provisions of the Minerals Act' nor that the fiscal advantages in this Agreement shall automaticaily appry to iron ore mined rrim "ontain"o 3.4 tnese additionar areas. Surrender of Mining Leases (a) subject to section sl of th.e. Minerars Act, LoNDoN MTNTNG may surrender ail or part or parts of the Mining Lease niea inctuced in the tr/ining Lease Area or an Additional Mining.Lease at any time during the term of such Mining Lease and or Additionar tviiing tease bi.;il; in writing to the cosL to that effect of not less than three months noiice; and upon such surrender the lands surrendered shail cease to be compiiseo in or subject to the provisions of such Mining Lease and orAdditionai Nlining Lease. (b) Upon the surrender, expiration or other termination of the Mining Lease or of any .portion thereoi, LoNDoN rvrrNrNC shail compry with any conditions stated in this Agreement or schedules as regards the surrendered lands and be granted a pieriod of not tess in"n Ji monilrs, or such ronger perio.{ as the.Dire.ctor may specify, immeoiaiurv ioirt*ing such surrendlr, expiration or termination in which- to remove ,rr oi any of its buirdings, structures, plants, machinery, equipment or otnur ii", ,f.'"'.r":", covered by the Mining Lease or'portion of the "f".t'. expired or terminated. Mining Lease su.rrendered, 4. ln addition to the other riqhts qranted bv this_Agreement, the Mining Lease and the Minerals Act, and other ipptijaUte tawi of Sierra Leone, LONDON MINING shail have the following rights: 4.1. GeneralObliqations (a) LoNDoN MTNTNG shail at ail times perform its duties, obrigations and work in the Mining Lease Area with ail due professionaiJirig;n." and wiil use its best endeavours to achieve the best available internatiinal standards for operations and safety standards prevairing in the ! I minino rrr rrr rY inJu.,ry rr all times' rvs' worrdwide at (b) LoNDoN MTNTNG shail proceed with the deveropment of the mine 3i! r-et,ateo ,plant and facirities, and carry out the mining and processing of lron ore and iron ore- tailings in accordance with the tvilnerals Act and the current Programme of Mining operations,. LoNDottrvrir.riiic shail have the right to cure any alleged-breach as provideo in clause 6.10 of this Agreement. M|NING - GOSL Mining Lease lgryq9_ry Asreement Final HPM/RR draft of 8 Aug w_,Inor 14 Aug 2O1t "_r"Jiili"' Page 6 4.2. ln order to.facilitate.its mining operations, LoNDoN MINING shall have fo'owing rights, subject to coirptiance with ,ppfi.Jr" r.* the (a) , To demolish any derelict buildings within the Mining Lease Area, with due regard for health and safety consideiations; (b) To remove and sell for export any surplus scrap metal not the conduct of normal operations situiteo within the Mining required for subject to any appricabre government charges, and taxes Lease Area, royalties; revies, duties or (c) To create, hire and maintain an unarmed security force to provide deterrenttovandalism,theft"nJt,",p.,,u,,; a (d) To transport all iron ore associated mineral concentrates public hishwavs and LoNDoN -q1d using Port Loko river and any MrNrNc ;;*il;i;d roads to a jetty on the later in its operation other infrastructui" .rol", port solution it constructs opportunity to ship for the expansion or proJuction and to be given the line and the such concentrates using' the-M;rampa to peper rairway completed' Pepel Port after the construction of such facilities shall have been subject to the written consent, with or without conditions, of the ffi:;?:ffi: local authoritv havins contror over the use of pubtic nisn;ryr, (e) to construct .and operate infrastructure required to deliver Progfamme of operations,to ine enent provided in crause its (0 4.5. use on the lands included within the Mining Lease Area to cut take and any tree when necessary in the course or n..'ining operations or when required for mining or domestt purposes-provided that it shall not cut any trees reserve or protected rbr.rt with the or take Director ?igl:", consent of the of t9l.^.jry.or 'n before paying the "*."pi fees q'| ,olrarti"s Forestry Act 19g8 (Rct gaej '|v '| vv prescribed by the trto.z oi r "nJ 4.3. LoNDoN MINING shall not exercise any of its rights, under the mineral right (a) in respect of any rand dedicated or set.apart for any pubric purpose other than mining incruding anv iti"ut, ro"o, nigi"rway, oirlrooro*e with the written consent or-trre i".ponriol" MiniJter oi'oin"r rrthority except control over such rand, and rr.n'.oniunt u" gi*, having subject to such conditions as rnay ne 1ay ;*onditionaily or such consent will not be specirieo'in th; in;tr,lr"nt of consent, unreaso,i.Lry ,iitnnuld or delayed; (b) except with the written consent of the owner or raMur duly authorised agent, in respect ;f- - occupier or his any land dedicated. as a.place of burial or which is a place of religious or other cultural significance; or !9ry?ON MtNtNG - GOSL Mining Lease Asreemenl Finat HpM/RR draft of e nug ;- mlnoi ."rrJXii""", 14 Aug2011 Page 7 any rand which is.,the site of, or which is within two hundred metres or such greater distance as may ne prescriolo,"'or any inhabited, occupied or temporariry unoccupieo norse ol6rlloing; any rand which is within fifty metres or such greater distance as may be prescribed, of tand w'hich has been .i";;;l or proughed or othenruise b.ona fide prepared for the gr;;in; ;i'Ii upon which there are, agricultural crops; or any rand which is the site of, or within one hundred metres or such greater distance.as may be prescribeo, anv .rii[lip, tank, dam, or other body of water, l But where any consent so required is, in the opinion of the Minister, being unreasonabry withherd, the Minister may! on such conditions, if any, as may impose, direct..in writing that the need for tne consent under he paragraph shall be dispensed with and authorise th; h;;;, of the this right to exercise all or any of his rights under it; minerat (c) in respect of any rand reserved for the purpose of any rairway, highway or watenvay or which is within fifty metres.or such greateioiitance as may be prescribed, of the boundaries.oi any rand so *r";r;,;*JJpt *itn the written consent of the responsibre rairway, higr'*ay or waterway authority; and (91 ]r respect of any rand within any township, or within two hundred metres or such greater distance a: may b" pr"sciibed, of ine oouno"ries of any township, except with the written tonrJnt of the tocat having contror over the township "uinon:ty 4.4. Riqht to Resetflement (a) The Minister shail ensure that ail owners or rawful occupiers of rand who prefer to be compensa.ted. by *"y or resetflement as a resurt of being disp.laced by a proposed mining op"rriion are resetfled on suitable alternate land, with due regard to their Lconomic weil-being and sociar and curturar value so that their circumstances are simirar to o, ii-'piouJwnen compared to their circumstances before resettlement, and resetilement is carried out accordance with the relevant planning laws. in (b) The cost of resetflement shail be borne by the horder of the minerar right as agreed by the horder and the owner or raMur o".upiu,. of rand or by separate agreement with the Minister, or in accordrn." *itti a determination by the Minister, except that where the horoer erects io oetay or abandon the proposed mining operation which will necessitate resetil"r-Jnt, the obligation to bear the cost of resetuement shail onry arise ,po" fl..," horder actuaily proceeding with the mining operation. (c) subject to (a) and (b) above, the Ministel may take the necessary action to give effect to a resettiement agreem"nt or determination. 4.5 LONDON MINING - GOSL Mining Lease Agreement Final HPM/RR draft of g nug w- mtnor corrections 14 Aug 2011 Page I (a) LoNDoN MTNTNG sha, have the excrusive right to use, repair and operate within the Mininj i"rru Area, any construct, structures, riving quarters, water ."rpprv systems, ,"o""Jr, buirdings, prants, communications systems, erectri. pipetines, conveyor berts, airstrips, barge chinners, , fbyur systems, ship roading stations, accessory works and !t"r"g; LJirities owned by G.SL and other simirar out its operations instatations which, "r",n".".i"ry-Jr-u."fur in carrying residents and under this Agreement, subject to the iegitimate rights of prescribed other third partiel, prouio"J-ili;i'Lod;i *,t,,t,c forows procedures and the rures of aoorooii"t"-rlgrr"tory authority regarding their construction.and use, -tfe right of use shail be granted to and provid"i rrrt"i that reasonabre other legitimate usersbf GosL representatives and any residents or (b) the Mining Lease Area. GosL shat use its best endeavours to grant a priority right to LoNDoN MTNTNG to use, construct, repair and operate any roads, structures, water supply sys.tems, pipetines, communication buirdings, power systems, roading stations, o'aige cnanneti, systems, electric similar accessory worki anO instattatiJns wnicn sorag;iacirities and other its operations under this Agreem"ri ortrio" tn" .r" n".-u-.."f,, in ""rrying out the tegitimate rishts or cbsl ,"Jini,o rrrri.irg L"ll" nru", subject to construction, repair and/or operation parties ip;;;;; that such use, operations), subject to the written does not.acvbrsety impact third party having contror over consent of the nationll or local authority prescribed th_e res.pective utiritv ,no to r_or.roon ruttrutruc foilowing procedures and making the requisit" p"yruni. regarding their construction and use and provided iurther that a ,.""ron.Lju ,.igr,t of use shal ::,,?i,?J:* to GosL representiiiu". in tn" course urir,"ii normat resutatory 4.6. Exnort of lron Ore Concentrates subject to section 113(5), and section 167 of the Minerals Act, LoNDoN MINING shall have tne iignt to export ail iron or" and associated minerals or mineral concentrates raisEd or obiaineJ in the course pr*ining operations any country other than countries to which tl.re taws-oritne"illpuoric to Leone prohibit such exports. v'| rrrs r\c of sierra 4.7. Admission of personnel (a) citizens of sierra Leo.ne possessing the necessary quarifications experience shail be given preferenc-e for emproymlni in and operations under the Mining Lease and 'this "ttpnar"s or accordance with the national libour ngr""r",it uno in laws. (b) LoNDoN MTNTNG sha, not emproy or in any way use chird rabour. (c) LONDON MTNTNG and its Nominated supptiers shat not import unskilled rabour for the carrying out of any operations, deveropments, or maintenance undertal"r.gy-u"r by virtue ot ini. Agrl"-;ent, and 1 tha! regard, LoNDoN rvrrr.rir.rC sna'tt ensure that (i) its Nominated suppliers and (ii) its subcontractors compry '-" with this r'e shall apply applicable labour law. r'r frouision vrvvr ano (d) subject to the foreooing restrictions and to any appricabre provisions of the Non-citizenitn""giri;ii;;: r#i;ration and Expursion Act No. LONDON MINING - cOSL Mining Lease Agreement 14 Aug 201 Final HPM/RR draft of g Aug w- m'inor correition. 1 Page g 14 o'f 196s), ail persons deemed by LoNDoN MTNTNG and/or its contractors as required for the prosecution of its work, including executives, officers, engineers, consultants, technicians and skilled labour, shall have the right to enter and reside in sierra Leone and to depart from there in compliance with the immigration ano labour laws of Sierra Leone. (e) GOSL shall facilitate multiple entries into Sierra Leone for business purposes b-y {eslsnated directors and senior managers of the parent company of LONDON MlNtNG. (f) 9osL agrees that it will encourage and assist the efforts of LoNDoN MINING to secure and maintain an adequate labour supply, consisteni with labour laws of sierra Leone and sound business practices. (g) LoNDoN MlNlNG, shall also establish and carry out a plan for training for local employees in accordance with Minlrals Act, section 110(2)(c) (set out in schedure D) and execute that scheme in accordance with Minerals Act, section 164 (4), so as to enable sierra Leoneans to assume skiiled, technical, supervisory, administrative and managerial functions in LoNDoN MINING within a reasonable time, subject to Gosl's compriance with sub-crauses 4.7 (e) and (f). (h) LoNDoN MIN|NG shall submit a written report bi-annually to the Director of Mines, as defined in the Minerals Act, describing the number of personnel employed, their nationality, their positions" and . the status of training programmes for citizens of sierra Leone. (i) Failure by LoNDoN M|NING to compty with the provisions of sub clauses (b), (c) or (g), above, shall be regarded as a material breach of the Mining Lease and subject to clause 6.10 of this Agreement; the same may be suspended or cancelled. 4.8 Government Protection and Assistance ,; (a) GosL undertakes to grant to LoNDoN MINING such assistance as it reasonably can to enable the experts and technicians sent by it to carry out its tasks in the best and most efficient manner" GosL will make avaiiable to LoNDoN MINING all aerial, magnetometer and other geological surveys and photographs and all other plans, maps, information and acvile relating io iron ore bearing and associated minerals which in the opinion of GosL, it can disclose, and will permit LoNDoN MINING to obtain copies of all such surveys, photographs, plans, maps and information for their own use upon payment of the actual cost of making such documents. (b) LoNDoN MINING will make available to the Government Geological Survey Department all similar data that it compiles or acquires from otiers under circumstances which permit disclosure thereof to others; provided, however, that GosL agrees that its said Department will treat all such data made available to it as confidential during the life of this Agreement without the prior consent of LONDON MlNlNG. (c) GosL will extend to LoNDoN MTNTNG all reasonable assistance (including taking administrative action and other action vis-d-vis statutory LONDON MtNtNG - cOSL Mining Lease Agreement Final HPM/RR draft of g aug w_ mrnor corrections 14 Aug 2011 Page 10 bodies) to enable and facilitate the caffying out of its functions and achieve its objectives in the best and the most effiiieit,"nn"irnU,',riitnout limitation, to enjoy its rights and privileges under inis ngreem""tl" in"'extent consistent with the laws and regurations of sierra Leone and the Mining Lease. (d) GosL shail extend to LoNDoN MTNTNG arr reasonabre assistance facilitate their transport of iron ore and associateo -minerars or to concentrates raised or obtained in the course of mining minerar permit all barges moving ore, as weil as other operations and to unhindered, subject to -pplicable laws and vessers,"to traver freery and ,ig.ht. gf. access by other users and ov regulations and to reasonable established by GosL. where such cosr-] wiil-r or witnout conditions disruptive, LM shail have..the,right rights of access-*olro prove undury use. GosL shail have.the rigit to impose reasonabre conditions on such regulatory activities, of inspection in tl.re louise or their normar down the Port incruding, but not rimited to, trom a ;"tty raMayim, Loko creek ftriougn the channer "t Pepel, into the sierra Leone Fiver and between'Brn"" rsrand and anchorage in the estuary of the Sierra thence to a suitabre shipping cargo will be transhlpped to Leone river off Fr""to*n where the would be between 30 ocean-going burk carriers. Tn" brrg" transit LoNDoN MtNTNG and 40 nauti"car mites ., .r,o*n ln schedure ,,8,,. transhipment courd outsourcs-the narge l;ilrg, transport and that operations and also establish a nuilber of an"cnorage locations are feasible and acceptable to the regulatory autnorities. subject to the needs of other users, of waterways in sieira r*,in"lnJ aipricaore raws and regulations of sierra Leone, LoNboN MTNTNG ,uv olliuun permission by the regulatory authorities to the extent "i.o vessels and to dredge the channel as feasi-bre to use deep draught vessels. necessary to accommodate such 4.9. GosL agrees that it wiil g.rant any and ail permits and permissions necessary for the importation into sierra Leone of machinew, suppries and services necessary for "qrip*"nt, the conduct of prospectirig, mi;'ing, processing and transportation operations contemprated by this Agre"emunt. "' 4.10. Exportation of Equipment GosL will grant any permit and permission for LoNDoN MTNING to export from sierra Leone any. mining machinery, prant, equipment, .consumabre Iinllg- stores, goods and surplJs equipment oiwhatever description imported by it for the conduct of its prospecting, mining, pro."sing and transport operations contemplat"g uy this Agreement, provided that any export shall not have any adverse impact to flie environment or the community in the Mining Lease Area or nearby areas. 4.11. (a) LoNDoN MINING shall conduct its Mining operations in accordance with section 132 of Minerals Act, subject to provisions of the Environmental Protection Agency Act 2008 ("EpA zdoa'1,as may be from time to time subject to any regurations made under tne epn "r"no"o amended from time to time. ln the 200g, as they may be the provisions of the EpA event of a conflict between these two Acts, 2008 and its respective regulations shall prevail. LONDON MINING - GOSL Mining Lease Agreement 14 Aug Final HPM/RR draft of 8 Aug w_ rn'inor.orr"ition. 201 1 Page 1 1 (b) LoNDoN MINING shall at all times do everything reasonable in its power to limit the damage and disturbance to the local environment and populace. The Environment protection Agency (the ,,EpA',) ,"y rny tir" conduct periodic inspections of the Miningleaie Area. "i (c) LONDON MINING shall, in accordance with the Environmental Protection Agency Act 2008, conduct its mining oprations and all proj;;i activity with a degree of care and professionaliim and within two years of signing the agreement LM shall comply with high international environmental protection standards. (ol ln particular, subject to (e) betow, LoNDoN MINING shalt emptoy in its mining operations advanced techniques, practices and methods of operation for the prevention, limitation or treaiment of pollution and the avoidance of unnecessary ross of, or damage to, naturar resources, in each case in accordance with generally applicable-law.' (e) LONDON MINING shall be responsible only for any polution, risk, claim or other environmental damage arising during t'ne teim-oi the Mining L"".", since its award on 31 August 2009 and any-environmental damagj caused io1 the period between commencement of exploration up until 5t nugust 2009. 4.12 (a) within six months of the signing of this Agreement, LoNDoN MtNlNc will prepare at its expense and submit to the Environmental protection Agency of Sierra Leone ("EPA") and GOSL simultaneously a compreneniive master plan (the Rehabilitation and Reclamation Masier plan) that will address the issues of reclamation and rehabilitation of mined -out areas, provided that the Rehabilitation and Reclamation Master Plan will be subject to the provisions of the EPA 2008 and any regulations made thereunder and, where not inconsistent, in compliance wifl"L thJMinerals Act. (b) The Rehabilitation and Reclamation Master Plan shall clearly identify the extent of the reclamation and rehabilitation attributable to ofierations conducted prior to the commencement of mining operations by LoNDoN MINING and where possible prior to the commenclment of the Mining Lease of 31 August 2009 ("Pre Commencement,Reclamation and RehaSilitation obligation") and the estimated cost in Dollars (converted to Leone equiviient at the prevailing rate) of effecting such reclamation and rehabilitation (referred to hereinafter as the "Base Rehabiritation cost'). (c) The annual calculation of rehabilitation and reclamation cost (including the Base Rehabilitation Cost) will be subject to an annual inflator calculation, in accordance with the EpA 2008 and any subsequent regulations. -;-- --'- (d) LONDON MINING and EPA of Sierra Leone shalljointly calculate and agree on the amount of the Base Rehabilitation Coit af the time the Rehabilitation and Reclamation Master plan is agreed. (e) LONDON MINING shall be fully resporrsible for the attributable cost of reclaiming and rehabilitating mined out areas to the extent that such LONDON MINING - GOSL Mining Lease Agreement 14 Aug201t Final HPM/RR draft of 8 Aug w_ rn'inor. "oir"Eiion. Page 12 reclamation and rehabilitation is attributable to operations conducted LONDON MtNtNG subsequent to 31 nugrit, iodg. - by (l subject to crause a.11(e) and crauses a.12(d) and (e), LoNDoN MINING shail adopt and imprement programmes and measures approved by GosL for effective reclamation of mineld out areis inctuding r"pLliting dealing with mining spoils in which regard a oeiaiteo "no progressive reclamation and rehabilitation pro6r"irr*'io"r the minimization of the effects of lands disturbed 5y mining f;r the of such mining on aoloining land water areas shall be submitted to GOSL for approval. - (g) Simultaneously with the lapse of the Phase 1 performance bond as set out in crause 4.16, to ensure compriance with such progfur*" of reclamation and rehabilitation of mined out areas, LoNDoN MINING shall arrange for a funding guarantee reasonably satisfactory to the Minister and of an amount to cover the estimated cosi of restoration and rehabilitation required for disturbance to date, as calculated at the end of each financial year in accordance with the Rehabilitation Master plan prepared in accordance with craus-e "nJ-Ceclamation institution (which shall not be an 4.12a), to be issued oy i-iinanciar long-term credit rating of at Affitiate of tne lot'toolt rvririrr.rc) *itn a internationally recogniled reast A (or its equruatent; from at reast two the form of an credit-rating igenciesl sucn fuarantee ,"i't"r." GosL irrevocable letter of cr6oiior p"rromrnce bond in favour of to guarantee effective mine " time as regulations reclamaticin anJ rehabilitation. At such in relation to are adopted requiring nn"n"i"igr"runiu". uno"r inu lpn reclamation and rehabititati-on, the d;;ili'i;or" ,r,.r.r,i.,,v upon being replaced by EpA guarantee : 4.13. Procurement 1 (a) LoNDoN MINING shall in the conduct of its activities under the Mining Lease, give preference to products ano maieri;i,';;""in"iiurr. Leone and to service agencies located in sierra i"onp and owned as therein provided at comparabre quarity, derivery scneoure anj pnc",-to in" ,"*ir* extent possible and subject to technical accepta[iritt;;;;;;ii"uiiiiv relevant goods and services and being consisi"nf *i,tn safety, "i'in" economy. "ri.iul.i'"no (b) without limitation to iub-clause (a) above, LoNDoN MINING shail the conduct of its mining operations originate all of its procurement in banking institutions ln Sieria Leone; w[enever p-r.iotb, as through LONDON MINING. oetermineo- oy 4.14. Health and Safetv LoNDoN Mll]IG shall comply-with all health and safety standards and taws that are generalty applicable in Sierra Leone. 4.15 LONDON MINING will comply with sections 138-141 of the Minerals Act in respect of its commy.nly ?gy_"topment Agreement. For tne ouration of this Agreement, LoNDoN Mlrutttc agrees to-funo its commun-ity Development !9NDON MINING - GOSL Mining Lease Agreement Final HPM/RR draft of g Aug w_ mlnor corr"ftion. 14 Aug2011 Page'13 Agreement as provided in crause 5.1g and to imprement such community Development Agreement. 4.16 Performance Bond: LoNDoN MlrylNG undertakes to furnish to GosL a performance Bond in the sum of One Miltion United States Dolars (US$1,000,000; in the form of a Letter of credit issued by a reputable financlar insiiiuion in sierra Leone and valid for an initial period of 12 months from the Effective Date of this Agreem.ent (ol3lo^1Oer validity.uperiod which ir tr'" estimated date of production of 100,000 metric tohnes of iron or".on""ntrate, being Aprir, 2012) such Performance Bond to be encasheo ii r-oruooN MINING fails to make substantiar progress towards.the -re-ope"'.g ft tne uaramp"-t,t-in" within the period of validity of the said Perfom"n"u dond, it being agreed that if LoNDoN MINING produces at least 100,000 r"tri. ion, of marketable iron ore from mining operations, LoNDoN MTNTNG .n"rr o" deemed to have made substantiar progress towards the re-opening or the said Marampa Mine. on or before 31 Decemb er 2011 LoNDoN MINING undertakes to furnish to GosL a second Letter of credit in an amount of two million United States Dollars (us $ 2,ooo,o00), varid untir so .June-zirs jo be encashed if the company fairs to make substantiar progress towarJs the deverop,n*i operation of the phase 2a primary ore as prorii",nru'or operationr, fo.r^t!9se purposes "substantiar specified in the ""0 of at reast 200,000 metric prG;;..; means the production such date as tonnes of ore rrom tne pnrr" 2a development by provides is specified in the prograr*" or d;;g operations, which for such rever of production no rater than 30 June 2015. LONDON MINING _ GOSL Mining Lease Agreement rrnal HPM/RR draft of g aug w_ minor corrections 14 Aug201t Page .14 5. FISCAL PROVISIONS Unless othenruise.indicated, the start date for year Notwithstanding this, fo^iDb^i'friri'*o 1 tax incentives is 1 January 2011. rncentives in the ;"i boir 'r'nr"u_ that the ux.ti,ng 2010 wilt appty c.urrent-.mining tea;e parriament t"* untit tnis riscai'iEg'i#:. "gt:-"m"nir-Ji"i*nv in'Feoruary and lubes wiil appty on ,"tiri"j; i,."ffi; the increased duty on sisnins'[i'.riir"t;ia6il;*li; ratification fuet 5.1 by partiament. Mining and surface rent (a) L.NDON MTNTNG shat pay to the government demand, on 1 Ausust zoi i11"!91." ;"i;; #; annuary and without reference date' th"e rur or'Lsssoo,ood"iFi";' each anniversary or the states Doilars) in r"spl.iof'rn'.nnuar iunoreo thousand United its Mining Lease ML'2/0g-inrespect rease;";i.; defined and envisageo in Adjustment as defineJ ir tni. of the r""rurru. subject to the Annuar exceed 5% per year ,igreement, witr iucn Annuar Adjustment not to rn tne event nat inis pilv]sion is.,not changed during ffi/;li [:"$;,;o"tiriuJ in'LLrse 6.8, the principte of this sub clause shail (b) rn addition LoNDoN MrryrIg shalr pay appropriate local authority in whicn tne miffi to the rand owners through the and without demand .nnr"'t ,."ni 'L"." ar93 is situated aniuary "n "rrr..u ,1" ri".iried in the respective i".xH;:,i31ool#il^rG, "u;".t i;;";i;i; o,.li,ouo for in thl pJujn.u, (c) Mining rent and surface rent payabre sha, :;ff H:ii'.ff be treated as arowabre :TilT,?r;Xlo,'il"ff "'#:;il""lrr-or,rodnrvr*fi i,i-i""no .5.2 Royalty (a) L.NDON MTNTNG shat pay a royarty at of the market varue of ine the rale,of 370 (three percent) carcuration be the ."tu minerar,';;; sia, for the purposes of arm's-rength u.tuu i"."i"rilr"'iyio*oo* M'NTNG in an murtipried transaction. being il;';;; iJ."'iu.nru per metric by the totar metric-tonr-.oti, iL=" on board tonne (carcurated in accordance with tn" .t"l"rlni"rl, or, the vesser (e) at the designated sL offshore- o.iirsi r..iiry in sub_crause 5.2 as adjusted in accordance with .ro-.i*.E ii,,irl or the shipment and "Free on board" is a term defined under TNCoTERMS by the rnternationar crramuer or commer;;i 2010 pubrished the designated sierra offshore roaiinJ means point of sare at ship, however iiciritv, incruding roading '"one :l,iiJl. rnd exctudin;;,"#;;X,nl,,,.unroort, iniurance, , dur,in.,ilSn. transportation rL, in" port to the "rii".f finat "Arm's-rength transaction" means.a contract or been arrived at in te mliketprace agreement that has persons in accordance with^tn" uet*e"n"i"noJpunoent, non-affiliated section 154 0f tne rr,rmerai. n.t fr4i.l.g |e:r" and consistent with business practices. ro,. . "nJ ffi#rt'"ccepted internationar ti.nrr.tio,i,i"*i ri,i arms-rength for royarty MtNING _ GOSL Mining !9ry?O_N Lease Asreemenr Final HPIvVRR draft of I Aug w_ rninor. 14 Aug 2011 "lrr"Jiio"i' Page 15 purposes, it must be arms-rength during the entire period for royalty is determined under this-Section. which (b) where LOND.N MTNTNG enters into an agreement to dispose minerals with affiriated persons, tne ieims,of any such agreement of the royarty payabre on minerar. .oto other than i,. (and transaction) shail be assessed under 5.2(a) in a ;;'lim,s_tengtn with Section i54 tZ) of the Mineral. n.t, as manner consistent Advance pricino Agreement entered into determin"J tnrougn ,n MINING prr"u.it to guidelines OesciLeo by GosL and LoNDoN in Clause 5.2(c), (c) Guidelines Prior to the disposar of any minerars to affiriated parties, LoNDoN MINING and GosL shat enter into an Advance pricing-ngreement estabrishing guiderines for.determi"i.g in" J;";"j ;;;,,,, fngtn value and price of such. minerats ror p-urposes of the carcuration sare in the statement set out in crause s f in a manner used section 1s4' The Advan." Fri.ing l"l tigr""r"nt consistent with mutually satisfactory m.ethodorogy "designed shat estabrish a royalties owed on any sare to an #itiateo party, to ensure that the from such sare, are no,ress than trrey'wourd attributabre to income undertaken on an arms rength uasis id be if the sare had been non-affiriated purchasers. The following will guide the Advanced pricing Agreement 1) LM shall provide necessary documentation to assist in arriving at such an agreement (2) such procedures may look to.,available metrics, such as prices received by major producers, wrth. due adjustment for transport, quality, marketing commissions and other relevant operating'anj market considerations (3) where prices attained through appricatior of agreed procedures result. in a price that either siol oetermrnes no ronger refrects the unde.rlying- principre of market pricing, either p"rt/ i-,r.v request 19yi.sion of such agreed procedures; "' a (4) in the case that,an appropriate publicly available index enters into wide.,usage during the course of this agreement, the parties wiil come together to agree on a method utr-rizing r;;- iioex]" witn due adjustment; and !?i:;t qi:;,ii+ resardins the content or apprication of the guiderines :ilf;jl:,ed by this crause sha, be ,"d;;J;; ri*d'iijepenoent (d) foyalti-e9 payabre under 5.2 (a) above sha, be atowed as deductible operating expense in ascertaining its a income fol income t"* burG"r; pro-uio"o nei-cnargeaute shall not be credited against or .oi.iJ"red n6wevei l;"i'Royarties aggregate income tax liability payable to as part payment of the GOSL" (e) 3llll, a maximum p:li9_dll19 (forry five) days after rhe end of month's shipment, LoNDoN MTNTNG inrtt pr"p.re and each Director of Mines a statement certified by deriver to the representative of LoNDoN MTNTNG and the the accredited ...r"6it"i Lprlsentative LONDON MINING - GOSL Mining Lease Agreement 14 Aug 201.1 Final HPM/RR draft of 8 Aug w- minor correitions Page 16 of the National Revenue Authority of sierra Leone, stating the total tonnage of minerals of each kind, grade, and quantity shipped by LoNDoN MINING from sierra Leone in that month. iogeiner witn such a statement, LoNDoN MINING shall include a statement of the respective sales value receivable free on board the vessel for minerals sold at the designated sierra Leone offshore loading facility of shipment (calculated as specified above for affiliate salei in accordance with clause 5.2 (b) and (c)), after deducting any Sales Tax, Value Added Tax, Goods and Services tax, other similar or analogous taxes, export duty, levy or excise tax payable to GOSL or any department or other entity of GOSL or statutory bodies in relation to that sale and to reflect any adjustments calculated in accordance with clause 5 2 (0 below. Upon delivery of such statement, LoNDoN MINING will pay to GosL the 3% minerals royalty payable on the sales value receivable as calculated by this statement. LoNDoN MINING shall assume all risk of non-payment. (0 ln preparing the statement in 5.2 (e) above, account will be taken for any adjustment required as a result of amendments or determinations or corrections in respect of prior periods, such as provisional pricing terms or credit notes, such adjustments will be separately and clearly indicated in the statement referred to in 5.2(e). 5.3 lncome Tax (a) LoNDoN MlNlNG, in the conduct of its activities in sierra Leone pursuant to this agreement, shall be liable for lncome Tax on its income derived in Sierra Leone at the following rates: Yearslto3 6% Years 4 to 10 25% Years 11 thereafter rate of tax applicable to companies as set forth in the lncome Tax Act but shall not exceed 30% lf at any time the lncome Tax Act provides for a tax rate that is more favourable to large scale mining companies than the rates set forth in this sub clause (a), LONDON MINING shall be entitled to appty such lower rate in calculating its income tax (b) LONDON MINING shall not be liable for any minimum taxation based on turnover, provided that it complies with Section 69(3) of the lncome Tax Act; (c) The chargeable assessable income in ascertaining the lncome Tax payable by LONDON MINING shall for the purposes of lncome Tax be calculated as provided by the lncome Tax Act, subject to Clause 5.6, as it applies to mining companies. 5.4 Treatment of losses for lncome Tax purposes The amount of tax losses that can be utilised to offset chargeable income in any year of assessment shall be as follows: LONDON MtNING - GOSL Mining Lease Agreement Final HPM/RR draft of g Aug '1 4 Aug 201 1 w_ m-inor. "orr"Jtions Page 17 Year 1-10: an amount of loss such that the tax payable will not be less than 15% of the income tax that would be due if no losses were carried forward; any losses disallowed by virtue of this rule may be carried forward indefinitely, without restriction. Year 10 thereafter: as appricabre under flre rncome Tax Act lf at any time, the lncome Tax Act allows for a greater utilization of tax losses than that described in this clause, LoNDoN ruirutruc shalt be entiiled to take advantage of such greater utilization. 5.5 Withhotding tax Subject to the jerms of any international agreement to which Sierra Leone is a party, which shall prevail over the provisions of this Agreement, witfrhotoing taxes on dividends, interest, management fees, payments to associates and contractors paid by LoNDoN MTNTNG shail be as foilows: (a) The rate of tax applicable on dividends shall be Years 1 6: EO/ Years - J/O 7 - 10. 10% Years 11 thereafter - As applicable under the lncome Tax Act (b) Tax withheld on interest on loans including loans from associates are liable to withholding tax as follow: Years 1 - 5: 5% Years 6 - 10: 10% Years 11 thereafter: As appricable under the lncome Tax Act (c) Tax shall be charged on management fees and other payments made by LoNDoN MINING and its Nominated suppliers in respect of inter- company agreements (other than intergroup loans, interest or dividends) at the rate of Sok lor the first six years commencing l January 2011, 10% for years 7 to 10 and thereafter as applicable under the lncome Tax Act ; (d) The rate of withholding tax payable by LoNDoN MtNtNG and its Nominated suppliers on contracts to non-resident 3'd parties shall be Sok for the first seven years commencing l January 2011, l0o/o for years B to 10 and thereafter as applicable under the lncome Tax Act (e) Notwithstanding, sub clauses (c) and (d) of this clause, all independent, 3'd party long term contracts (meaning operating and construction contracts of a minimum of $500,000 and over one_year duration with unaf,riliated parties) enter"ed into before 3'l December 2017 shall be grandfathered, provided there are no material changes in the scope or terms of such contract or the parties performing lhe work and, as such, payments made under such contracts shall be liable to withholding tax at the rate of Sok, forthe initial duration of the respective contract, and thereafter as applicable under the lncome Tax Act. LONDON MtNING - cOSL Mining Lease Agreement 14 Aug2011 Final HPM/RR draft of g Aug w. mlnor correitions Page '18 (0 Payment to local contractors by LoNDoN MINING and its Nominated suppliers shall be subject to 5% withholding tax, being the current rates applicable under the lncome Tax Act (g) withholding taxes referred to in clauses g.s (r) to (e) above are onty due on cash payments by LoNDoN vrtt'rrrud,' iti Nominated suppliers, and their respective subcontractors and not on accruals and/ or provisions; however, to the extent that there is any deferred or capitalized interest or conversion of debt to equity, witlhholding tax shall be due on such accrued, deferred, or converted interest portion, but only when paid, Any cash payments made sha[ be deemed to go first to- the payment of any outstanding accrued interest ano ority thereafter, to the payment of principal. (g) ln this section "international agreement" means an agreement between Sierra Leone and a foreign government. ' (h) lf at any time the lncome Tax Act provides for withholding rates for payments to contractors that are lower than those specitLo in this clause, LoNDoN MINING shall be entifled to apply .rin r"tu, to such payments. 5.6 Capital expenditure allowances (a) An initial allowance equal to a0% gorly percent) of the united Sates Pql]qt _c9s! of qualifying capitar expenditure shail be deductibre by LoNDoN MINING in determining its chargeable income for the year in which such qualifying capital expenditure is incurred with an annual allowance at the rate of 20% (twenty percent) of the United states Dollar cost of qualifying capital expenditure being deductibte in determining chargeable income in each subsequent yLar until the full cost has been deducted; (b) where an asset which falls within the definition of qualifying capitat expenditure is scrapped, destroyed or sold for less than the balance obtained by deducting from the cost thereof the aggregate of the initial allowance and the annual allowances previously gianieo in respect of that asset, then the balance shail be fully deductible against chargeable income in the form of a scrapping aliowance in the year in which such disposal, destruction or sale occurs; (c) Qualifying capital expenditure shall comprise the following: i' capital expenditure as set out in the 6th schedule of the lncome Tax Act 2000; ii. Capital expenditure on all mining machinery, plant and equipment described in Clause 5.9 (iv) of this Agreement, whether imported or purchased in sierra Leone, as well as all capital expenditure on vehicles, medical equipment, computers and ancillary equipment, construction and expansion on residential and non-residential buildings, constiuction and expansion of clinics and all other equipment ancillary to the LONDON MINING - cOSL Mining Lease Agreement 14 Aug 201 Final HPM/RR draft of 8 Aug w- mlnor correitions 1 Page 19 operations of LoNDoN MTNING as well as the cost of acquiring or procuring the transfer of the mining lease which is subject to this Agreement an,1 any other mining rease in respect of the mining lease area; iii. capital expenditure on haur roads, environmental bunds and similar assets; iv. The cost of restoring buildings and other assets situated within the mining lease area to their original condition, where such restoration does not result in an increase in the productive capacity of that building or other asset, shall be deemed to be a repair of such building or asset and shall be allowable in full as a deduction against chargeable income in the year in which that cost is incurred; v. capital expenditure on assets related to the construction, development or improvement of the community infrastructure such as schools, crinics, hospitar, training centres and other related assets. (d) LoNDoN MINING may in respect of the whole or any part of its qualifying capital expenditure whatsoever incurred, elect to defer claiming deductions in respect of any financial year for capital expenditures to subsequent financial years (whether or not . consecutive) without limit in time until the whole of the expenditure shall have been claimed. Notwithstanding the previous sentence of this subclause (d), LoNDoN MtNtNG shail not be entifled to defer any deduction that, if this subclause (d) were not applied, would be properly claimed in any of years i through 3 (i.e., the years in which LONDON MINING enjoys a 6% income tax rate). 5.7 Currency issues (a) The financial statements and books of accounts of LoNDoN MINING shall be stated, maintained and expressed in United states Dollars; (b) All capital expenditure incurred by LoNDoN MtNtNG shail be stated, maintained and/or expressed in United States Dollai-s; 5.8 Basis of Assessing and paying lncome Tax ls-sessable chargeable income and income tax payable by LoNDoN MINING in respect of each year shall also be assessed in United States Dollars and shall also be payable in United Sates Dollars. 5.9 Limitation of charges on imports (a) Not withstanding the current charges, fees, duties and levies made by GOSL on imports into Sieri'a Leone, GOSL and LONDON MINtNG agree that for the duration of this Agreerqent the percentage ad valorem charges for levies, duties, fees (including all assoiiated inspection fees), Goods and services Tax surcharg-es and all other amounts levied on or payable by LoNDoN MINING and its LONDON MINING - cOSL Mining Lease Agreement 14 Aug 201 Final HPM/RR draft of g Aug w- mlnor correitions 1 Page 20 Nominated Suppliers in respect of imports of capital items, to include mining machlnery, prant and equipment and consumabre mining stores as defined in clause s.9 (iv) below shall not exceed in the aggregate the following : lmports for years 1 to B, i.e., between 1 January 2011 and 31 December 2018: 1% l_mRorts for years g to'10; i.e., between 1 January 20.19 and 31 December 2020: 25% lmporls thereafter: As applicable in the customs Tariff Act (b) ln the case of other items excluding capital items, fuel and lubes and lg3]1h and safety equipments, the rate of duty appticabte to LoNDoN MINING and its Nominated Suppliers shall be: lmports for years 1 to 5, i.e., between '1 January 2011 and 3 j December 2015'. 20ok of prevailing rate lmports for years 6 and thereafter: Applicable prevailing rate as determined in the Customs Tariff Act (c) For the duration of the agreement, imports by LoNDoN MINING and its Nominated suppliers of health and safety equipment shall be free from any duty for years 1 to 10. (d) The terms mining machinery, plant and equipment and consumable mining stores shall include all machinery, plants and equipment useful to and used by LoNDoN MINING in ciearing land, removing minerals from land and transporting, separating, proCessing, handling and packaging such minerals for sale, including without prejudice t6 the generality of the forgoing, construction ma[erials for'mining and processing, dredges, barges, towboats, pumps, piping, screens concentrating and separating equipment, locomotives, locomotive engines, rail wagons and rolling stocks, railway signalling equipment, railway sleepers, power generating and dlstriouting- equipment, cranes, lorries road building equipment, four-wheel drive vehicles used in and ancillary to mining operations, off-road haulage vehicles, earth moving vehicles and equipments, mineral stores and packaging facilities together with accessories, spare parts lubricants and appliances for use and used exclusively with any of the forgoing. ln addition to the above, other equipment shall include surveying equipment, laboratory equipment, computers, printers, plotters, software etc used by LoNDON MINING in relation to' mining operations and any other items required for ancillary support functioni of the business. (e) The term "plant" includes prefabricated fixtures, not including building or building materials as well as special purpose vehicles such as dumpers and shuttle trucks for use in mining or dredging. (0 The term "machinery" means machinery consisting of a combination of moving parts and mechanical elements which may be put in motion by physical or mechanical force. '1 LONDON MINING - GOSL Mining Lease Agreement 14 Aug 201 Final HPM/RR draft of 8 Aug w- minor corrections Page 2'1 (g) For the duration of this Agreement, LONDON MINING shall have the right to import into Sierra Leone the whole of its requirements for fuel and lrrbricants, other than petrol and kerosene, from such suppliers and on such terms and conditions as it may determine, provided that LONDON MINING may purchase fuel in Sierra Leone where such fuel can be supplied on a competitive basis in terms of price, quality and other delivery terms. Subject to the provisions of this Agreement, LONDON MlNlNG, in the conduct of its activities in Sierra Leone shall be subject to the provisions of the Customs Act Cap 271 and the Customs Tariff Act, No 16 of 1978 and Rules there under currently in force and as may be form time to time amended. 5.10 Duties and Taxes on Fuel and Lubricants All imports of fuel and lubricants and usage of fuel and lubricants by LONDON MINING shall be in accordance with an applicable provisions of the Customs Tariff Act No 16 of 1978, subject to clause 5.12, and rules there under currently in force and as may be from time to time amended. 5.11 Reimbursement of import Duties lf items on which no customs duties or levies are paid are not re-exported or totally consumed within three (3) years after importation, and are afteruvards sold, exchanged or transferred in Sierra Leone (except to the State), LONDON MINING shall pay to the GOSL the customs import duties and levies on the then fair market value of those items within forty five (45) days of the date of sale, exchanged or transfer. LONDON MINING shall submit to GOSL annual reports on the fair market value and actual transfer price of asset dispositions on assets which benefited from reduced or zero import duties. 5.12 Road user charges Notwithstanding the provisions of the Road Users Charge Act, 1944 LONDON MINING and its Nominated Suppliers shall be exempt from road users fuel levy applicable to users generally in respect of fuel consumed by its vehicles, plant and machinery provided these are restricted to mining operations, logistics and infrastructure. Should LONDON MlNlNG, a Nominated Supplier, or any other subcontractor use, trade, or otheruuise deal in any fuel for purposes other than the mining operations contemplated here, LONDON MINING shall indemnify and hold GOSL harmless for all lost revenue and incidental charges, if any, relating to the unauthorized use of exempt fuel. 5.13 lnspection fees (a) With effect from the commencement of the Mining Lease Agreement, LONDON MINING shall recommend to GOSL and obtain GOSL approval for the appointment of an intermediary reputable inspection company and shall be liable for the payment of inspection fees in respect of all goods exported by or on behalf of LONDON MINING from Sierra Leone; LONDON MINING - GOSL Mining Lease Agreement 14 Aug 201 1 Final HPM/RR draft of 8 Aug w- minor corrections Page 22 (b) LONDON MINING will provide inspection reports to GOSL on a timely basis; (c) Subject to Clause 5.9(a), LONDON MINING shall, with effect from the Effective Date of this Agreement be liable for the payment of inspection fees in respect of all goods imported by or on behalf of it into Sierra Leone at the prevailing rate; 5.14 Other taxes or fiscal imports (a) For the duration of this Agreement , no taxes (including, but without limitation, income tax, additional profits tax, surtax, minor taxes, profits tax, turnover tax, sales tax, export tax, import tax, value added tax, withholding tax and employment related tax), royalties, duties, excise, charges, levies, fees, dues, contribution, payments or imposition of any kind whatsoever payable to the Central, regional or local Governments authorities or agents or to any Chiefdom or Tribal Authority or to any other Agency of GOSL shall apply to LONDON MlNING, or any affiliate company or Agent of LONDON MINING or the employees of LONDON MINING or any affiliate company of LONDON MlNlNG, other than: (i) Those expressly assumed by LONDON MINING pursuant to the provisions of the Mining Lease and this Agreement: (ii) The payment of taxes deducted from the emoluments of employees of LONDON MINING as required under the lncome Tax (PAYE) Rules and/or employer's payment obligations to NASSIT; (iii) The payment of Payroll Taxes at the applicable rate or if lower, that rate paid by another company, (iv) Payment of lmmigration Fees at the applicable rate, or if lower, that rate paid by another company; and (v) Minor Taxes, which includes all taxes that are generally applicable to all corporations on a non-discriminatory basis, and which do not exceed in aggregate US$ 250,000 over any five year period, of which said sum, LONDON MINING is not required to pay more than the equivalent of US$ 100,000 in any financial year. Beginning on 1 July 2012 and every five years thereafter, such amounts shall be adjusted for inflation in accordance with the US "GDP lmplicit Price Deflator" as published from time to time by the US Department of Commerce, Bureau of Economic Analysis. (b) lf notwithstanding these provisions LONDON MINING becomes liable to pay any taxes pursuant to the laws of Sierra Leone, except for those expressly assumed by LONDON MINING pursuant to this Agreement, then LONDON MINING shall so advise GOSL in writing, and the parlies agree to meet to reach an equitable solution consistent with 5.1a@). LONDON MINING - GOSL Mining Lease Agreement 14 Aug 201 Final HPM/RR draft of I Aug. w- mlnor correJtions 1 Page t3 (c) except as provided in this Agreement, no tax, royarty, duty, excise, levy, fee, due, contribution, payment or imposition or any kind whatsoever (other than those provided for in this Agreement; wiicn is of a discriminatory nature shall be payable Oy LOttOOru fUirutruC, or by its _emproyees or sharehorders, or uy ahy affiliate or agent of LONDON MtNtNG or a NOMTNATED SUppLtER 5.15 Repatriation Holding and lntroduction of Funds LONDON MINING shall have the right, during the term of this Agreement, to freely receive, hold in banks of its own choice, wherever located,-and dispose of in any country all revenues, receipts and other foreign currency tunOs'nelO by it under or in connection with its mining operations. a) LONDON MINING shall have the right, during the term of this Agreement, to hold foreign currency in designated foreignturrency bank acco-unts in its name in Sierra Leone; b) LONDON MINING shall be exempt from any commission, charge or levy payable on the introduction or investment of funds from a foreign source into Sierra Leone. 5.16 Goods and Services Tax Notwithstanding the provisions of the Goods and Services Tax Act (2009), LONDON MINING and its Nominated Suppliers shall be exempt from all Goods and Services Tax levied on taxable supplies within Sierra Leone and on all imported capital goods, plant, vehicles and equipment (as defined in Clause 5.9 above), spare and replacement parts for any plant, vehicles and equipment, fuel and lubricants for company and subcontractor use. 5.17 Port, harbour rules or fees and stevedoring charges a) Notwithstanding the provisions of the various Sierra Leone ports Authority (SLPA) Acts and Sierra Leone Maritime Administration (SLMA) Acts, LoNDoN MINING shall be exempt from all port, Harbour, Loading, Unloading dues or fees and Stevedoring charges that may be levied by either the SLPA or SLMA in relation to the operations of LONDO1T1 witt'ttt1C, including operations of Nominated Suppliers and subcontractors conducting work on behalf of LoNDoN MtNlNG, with exception of the following: 1. Pilotage Fees or Charges for movements of vessels within the SLpA controlled navigation areas. 2. Safety and lnspection Fees 3. charges levied at the Ports owned and operated by the SLpA for Loading and Unloading cargo or Goods in the normal course of their business operations. ln respect of Nominated Suppliers or other subcontraitors, this exemption will only extend to sLPA charges on services supplied to LoNDoN MlNlNG. (b) ln the event that the Sierra Leone Ports Authority or other responsible public body fails to provide any of the services forwhich LoNDoN nnirutruc is required to pay port charges, harbour dues and any other amounts pursuant to this cl.1u_se, including, but not limited to, positioning and lighting of buoys, and LoNDoN MINING thereby incurs any cost or eipenseJ in providing'or LONDON MtNING - GOSL Mining Lease Agreement 14 Aug 201 Final HPM/RR draft of 8 Aug w- mlnor coneitions 1 Page 24 obtaining such services, LONDON MINING shall be entifled to deduct such cost and expen.ses from any amounts that are otherwise payable to the Sierra Leone Port Authority pursuant to this Clause. 5.18 community Development Fund and Additional Royarty payments (a) LONDON MINING shall make payments in respect of its Community Development Agreement, as envisaged in clause 4.is above, in accordance with section 139 (a) of the Minerals Act as it may be amended from time to time, subject to LoNDoN MINING paying no *or" than other-mining companies, and which may be exceedJd at the discretion of LONDON MlNlNG, as agreed with GOSL. The fund shal be utilised for development within Sierra Leone, with particular emphasis on local communities. (b) For the first five calendar years commencing in the year in which LONDON MINING produces and sells at least jne million tonnes of iron ore, LoNDoN MINING agrees to make payments, in accordance with a community development programme, totailing in aggregate (after including contributions made in 5.18 a) above) aileast on-Jpe-rcent or tne revenue received by the mining operation on sales in that year, attributable up to a maximum of 3.6 million tons of iron ore sold in Lach such year. (c) Any payments made pursuant to sub clauses (a) and (b) of this clause 5.18 are treated as additional royalty payments for accounting and other business purposes, and shall be treated as "expenses on social services', for the purposes of compliance with the lncome Tax Act. 5.19 National social security and lnsurance Trust - NASSIT NotwithstandilS- tJre provisions of the National Social Security and lnsurance Trust Act, LONDON MINING and their expatriate employees working in Sierra Leone shall not be required to make the required employer and lmployee contribution to the National Social Security and lnsurance Trust in respect of their expatriate employees working in Sierra Leone. However, NASSIT shall apply in respect of contributions applicable to expatriate Sierra Leoneans. 5.20 lnterpretation of fiscal advantaqes Any fiscal benefits granted to LONDON MINING and its Nominated Suppliers under Clause 5 of this Agreement shall only apply to the activiiies of LONDON MINING in respect of the exploitation of,'through to sale and distribution of iron ore from the Marampa iron ore concession. i#s d "*-- 5> 5. GENERAL PROVISICNS / ;-{; r\ ii slri i& .$ ".".:- uJ 5.1 Assiqnment and Chanqe of Control F *": s€ it. tl* i ll f*- t LONDON MINING .l' -* "*l 4 shall not assign to any person, firm or corporation not Ttf.q"dd being a party hereto, in whole or in part of any of its rights or privileges, duties J:Y F d or obligations under this Mining Lease other than in accordancL with the Minerals Act section 1lg or as otheruuise agreed in writing by GosL. lS trJ ld Ed rs Ff Current MLA Relevant Revised Ml-A Relevant Comments Sect. Sec 5 Stabilization 2 Stabilization (1) s"1 4 Stabilization Clauses Clauses Clauses are focused on (2t inevitable. The fiscal issues aim though is to limit it to the Govt mtnrmum. "take',' = Govt. take = While this is a 35% (otherwise 490h positive sign, at referred to as the next review effective tax GoSL should rate = what the target a "take" of government at least 55% gets in the form of taxes GoSL "take" Govt. take in The figures are amounts to Net Present based on the US$1.8b in Value (NPV) = assumptions in present value $2.2b the financing terms model used by the GoSL team and consistent with the model used by the IMF Company's team RRI Company's = 29o/o Rate of Retuin on lnvestment .1 (RRl) = 26o/o Exempted from Clause No such CIause payrng cnarges, aa(ii) provision and 4.2 (bl duties on sales charges/duties of scrap metals are levied on the sale of scrap metals in accordance with the applicable laws Lease Rent per Clause Lease rent is Clause annum was s (a) now $500,000 5.1 (a) calculated at with an annual $5.000/km2 with adjustment of no adjustment not more than for inflation 5o/o '' ' Community Clause Community,, Clause The community Development 5(r) Fund controlled 5.18 will now Fund primarily by Community determine what controlled by and usage to do with the LM decided locally funds thereby reducing complaints about the company's CSR. The company will be obliged to display additional CSR Royalty Clause No such Clause calculated after 5 (b), deduction 5.2 deduction - permitted lncome tax rate Clause lncome tax rate Clause reduced to 6% 50 is as follows: 5.3 (a) for the first 10 Years 1 - 3,60A, years : 4-10,25o/" and appticable law, therbafter ' "1 .", Cumulative Clause No such assbssabte loss 5f(ii) deduction can be offset permitted against royalty Exempted from Clause Complete : , Clause paying other 5(m) exemption from 5.14 taxes all other taxes now eliminated Duties on fuel Clause Duties now in Clause and lubricants 5(k) acc6rdance', ''' 5.10,. 20o/o of ' with applicable prevailing rate law Reimbursement Glause No refereflGe to. "''' reimbu ment' o'ttimPort:, 5.11. of.import duties ta-xes/payment: when goods are of taxes on sold on:the resold goods market An,additional Clause p'Orformance l 4.16 . bond ($2m) to assure us of a :.1. mine desire to ' and not just to flio the contract Duration was,., Clause Effective 25 + 15 ClaUse effective'40 vrs. 3(b)' 3.2 '', Rightof ,, :' Clause 1-2 months Clause termination =,6 6 (t) 6.14 monthS notice Vague and, A more robust unenforceable training ' provrsron schedule', attached to the Agreement, 'ensures'action *ill,trapFen or .the-,r1$ ill be, consequences LONDON MlNlNc - GOSL Mining Lease Agreement 14 Aug 201 Final HPM/RR draft of I Aug w- minor corrections 1 Page 25 LoNDoN MINING shall provide written notice to GOSL of any change of controlwithin 30 days after the consummation of such change of control. 6.2 Subject to the terms of this Agreement, (including but without limitation clause 5.13) hereof, LoNDoN M|NING shall at all times comply with the provisions of the Minerals Act and other relevant laws and regulations (including any official form prescribed by such regulations) in connection with the carrying out of its obligations and work as dLscribed'in this Agreement, except to the extent that they are inconsistent with the provisions of this Agreement. 6.3 Reportinq (a) without prejudice to any reporting obligations under this Agreement or under applicable law and regulation in Sierra Leone, LONDON nlttttttqC snatt provide to GOSL not later than the end of March following each calendar year after commencement of its operations, a report showing: (i) the previous calendar year; (ii) the extent to which LoNDoN MTNTNG has achieved its programme of Mining Operations attached as Schedule C hereto; (iii) how LoNDoN MtNING has resolved any operational and development issues over the prior calendar year; (iv) any market developments for the products of LoNDoN MINING and how LONDON MINING has responded to such developments; and (v) how the market is expected to develop over the following year. (b) LoNDoN MINING shall instruct its auditors to provide a report to GosL every six months confirming that during that six month period, all royalties arising from sales made by LoNDoN MINING have been correcily calculated and have either been paid or accrued as appropriate under the agreed terms of payment. (c) LONDON MINING shall also bi-annually submit a written report to the Director of Mines detailing its compliance with the clause 4.13 (procurement) of this Agreement. 6.4 Creation of Securitv lnterest LoNDoN MINING shall have the right, with the written consent of GosL, to pledge or othenrrise create security interests over the Mininq Lease and this Agreement, both movable and immovable in order to .".ur"-financing. Such written consent shall not be unreasonably withheld. GosL shall provide each mortgagee, trustee, receiver or administrator under a mortgage, deed, trust or other instrument encumbering LoNDoN MINING's rightJ under this Mining Lease with a copy of any written notice regarding non-payment of royalty oi other non-compliance with the terms of the Mining Lease and this Agreembnt, LONDON MINING - GOSL Mining Lease Agreement 14 Aug 201 1 Final HPM/RR draft of 8 Aug w- minor corrections Page 26 and any written notice of termination to LONDON MINING under this Clause 6.4. LONDON MINING and each mortgage holder, trustee, receiver or administrator shall have the duty to notify GOSL of its name and mailing address. Each such mortgagee, trustee, receiver, or administrator shall have a reasonable period of time from the date of receipt of such copy notice (being at 90 days) in which to remedy any non-payment or noncompliance complained of and substantiated by GOSL. 6.5 Prior Consent or Approval (a) Whenever, under the terms of this Agreement the right of LONDON MINING or of GOSL, as the case may be, to do or perform any act or thing is conditional on the prior consent of the other party to the Agreement, or of an official or representative of such other party, it is hereby stipulated and agreed by and between the parties hereto that the requisite consent or approval will not in any instance be unreasonably withheld or delayed. (b) Whenever such approvals are required from GOSL, LONDON MINING shall deal with the relevant ministries, departments and agencies of GOSL under the leadership of the Office of the President to handle all large-scale mining contracts in order to discuss and mutually agree with LONDON MINING as expeditiously as possible. 6.6 Confidentialitv GOSL will keep confidential all information provided to it by LONDON MlNlNG, whether before or after the date of this Agreement, and confirms that it shall not disclose such information to any third party without the prior written consent of LONDON MINING and in accordance with the Minerals Act. 6.7 Corrupt Practices LONDON MINING represents and warrants that none of LONDON MlNlNG, any of its employees acting in the course of their employment and any person acting on behalf of LONDON MINING has made or promised to make any payment or transfer of anything of value, directly or indirectly, to or for the benefit of any government official or a family member of or an intermediary for payment to or for the benefit of a government official or a family member or business partner of a government official in connection with this Agreement or the transactions contemplated hereby. GOSL represents and warrants that neither GOSL nor any government official on behalf of GOSL has solicited any payment or transfer of anything of value, directly or indirectly, to or for the benefit of GOSL or any government official in connection with this Agreement or the transactions contemplated hereby. The Parties shall comply with anti-corruption laws at any time and from time to time applicable in Sierra Leone. 6.8 Joint review LONDON MtNING - cOSL Mining Leaie Agreement 14 Aug 201 Final HPM/RR draft of B Aug w- minor correltions 1 Page 27 starting in september, 2020, GosL, and LoNDoN MINTNG wiil conduct a comprehensive joint review of the progress of the project to date and the fiscal package, as contained in Clause 6 (fiscat; of this Agreement. Subject to.and with particular attention to Clauses 5,3(a) and S.14"of this Agr*;unt, it is understood that no further fiscal benefits will automatically be lranted to LONDON MINING for a further five or ten years. Rather, any ie*-riscat benefits wiil.be .:rqig9! to negotiation. subject to any new fiicar benefits agreed, LoNDoN MtNING will comply with the applicable income tax law. 6.9 lnterpretationandArbitration (a) Except as may be othenrrise herein expressry provided, this Agreement shall be construed, and the rights of GosL ind LoNDoN MINING hereunder shall be determined, aciording to the Laws of Sierra Leone. (b) The parties shall in good faith endeavour to reach an amicable settlement of' all differences oi opinion or disputes which may arise between them in respect to the execution performance and interpretation or termination of this Agreement, and in respect of the rights and obligations of the parlies deriving therefrom. (c) ln the event that the parties shall be unable to reach an amicable settlement within a period of 3 (three) months from a written notice Uy on" party to the..other specifying the nature of the dispute and seeking an amicable settlement, , either party may submit the matter to the exclusive jurisdiction of a Board of 3 (three) Arbitrators who shall be appointed and carry out their mission in accordance with the lnternational Rules of Conciliation and Arbitration of the lnternational Chamber of Commerce (lCC). The venue of'the arbitration shall be London. The English language shall be used in the proceedings, The award and any decision of ine -Arbitration Board shall be binding upon either party having ihe same force and effect as a judgment of a court of the last resort of the Republic of Sierra Leone. (d) ln the event of any notified dispute hereunder, both parties agree to continue to perform their respective obligations hereunder until the iispute has been resolved in the manner described above. 6.10 Revocation bv the Government lf and whenever any sum of money payable hereunder by LoNDoN MINING as rent or royalty shall be in arrears for the space or 6 (six) months after the date on which it becomes due and payable, or if there shali be any breach or non-observance by LONDON MINING of any of the terms of tfre Mining Lease, this Agreement, or any other license or lease granted herein or hereunder, or if it shall enter into liquilation of a solvent company for the purpose of reconstruction then and in any such case, GOSL, may revoke the license or lease in question and thereupon the same and all rights there under granted pursuant to this Agreement shall cease and determine, but subject nevertheless and without pretudice to any obligation or liability imposed by or incurred under the terms and conditions thereof; provided always that save as to the non-payment of rent or royalty the aforesaid power of revocation shall not be exeicised unless and until notice has been given to LONDON MINING specifying the particular breacn LONDON MlNlNc - cOSL Mining Lease Agreement 14 Aug2011 Final HPM/RR draft of I Aug w- minor correitions Page 28 complained of and if the breach is capable of remedy, requiring LoNDoN MINING to remedy the breach and/or lo nrake reasonable comp;nsation in money for the breach if such breach is con:pensable, arncJ LONDON MllNit{G fails within a reasonable time thereaftei"to remecly and/or rn;rke reasonabie compensation in money to the satisfaction of GosL fcr the breach. 6.1 1 Arnendment ln the event that GOSL ancl LONDON IV'ilNlNG rnutually agree to amencl any of the provisions of this Agreentent, lncluding ariy agreement to vary ihe terms of this clause, such amendnrent rnay be effected by agreement between the parties evidenced by an instrument in writing. Any suctr amending agreement shall take effect without further ratificatlon or confirmation by Parliament save to the extent that it may be inconsistent with any law in force in Sierra Leone at the time when such agreement between the parties is executed in which event such amendment will be ratified by Parliament. 6.12 Force lvlaieure (a) Failure on the part of'eilher LONnON MINiNG or GGSL to fuifr; anSr 61 the terms and conditions oJ'tlris Agreenient shail nct gir,,e ris;e to a ci:rir1 bv the other party or be deemecj to be a breach cf the Agreenreni inscfar as the failure arises from force rnajeure, and if thror-rgh force majeilre the fuifiiment by either LONDON MlNlNG or GOSI- cf anyr r--f the terms and concjitior..rs ct this Agreement is deiayed, then the period of.sur:ir deiay slrall be acidec io the periods fixed by this Agreenrent. (b) The payment obiigations of L,ONDOfq Mlhjl[,lG shatl be suspeniieC fcr the duration of any force majeure event except in respect of any monies due at the date of the occurrence of' the force majeure event, which shall remain due and payable. (c) In this clause, the expression "force majeure'' includes, withcut lirnitation, an act of God, peril of air, land or sea navigatio.n, action of the elernents, storm, flood, earthqr:ake, ground cave-in, s,-rbsurface pollution /natiiral ga:; etc.), explosion, fire, terrorist activity, or other lrostilities, war (cieclared in.J undeclared), blcckade, insurrection, civil comnroiion, iirrt, mecjicai emergency, revolution, embargoes or any similar event to the e>ient ilrat the party affected (i) could not ltave reasonably foreseen such e'",eni and (ii) could not ha.ve reasonablV prevented or cc,ntrollerJ it. The expressicn 'the, Agreement" includ.es not oniy ihr: ternrs anrj conCitions of the A.greement but alsothetermsandconditionsoithe|rliningI.eaie.: (d) Any claim of force majeure must be notified irr wriring by the affected parly to the other party vrithin seven days of the date urhen tie ior." *ujruru occurred or the- affected par-ty shctulC harre reasc,nably,' known of ihe evd,lt ,-.f force majeure, failing r,n;hich the ciair-n of force nrajeure':s hereby o,iiu"c.-- 6.13 Notices (a) All orders, approvals, declarations, rioiices and cornmunications of apy kind between the tr{inister or any other representative of GCSL and LOI'IDON MINING shall be in writing and the contracting parties shail not !9NDON MINtNG - cOSL Mining Lease Agreement Final HPM/RR draft of g Aug w_ rnlnor ' 14 Aug2Q11 "orr"ition, Page 29 under any circumstances be permitted to ailege or to repry upon any orar order, approvar, decraration notice or com"munication from GosL to LoNDoN MINING and any such written notice, eii. from GosL to LoNDoN MTNTNG shail be derivered to the ,"upr"r"nt tive'or LoNDoN MTNTNG in Freetown. (b) All declarations, notices and communications from LoNDoN MINING to GosL shail, unress otherwise required by raw uv ,'r,.'"-i"r#r'oi'rn,. Agreement or unless GosL shall oihenruise "i LoNDoN MlNlNG, be mailed or delivered oirect ov #riti". in-riru".tlon, to office in Freetown. t; the birector of Mines at his 6.14 LoNDoN MINING shall have the right to terminate this Agreement at any time by (i) providing not less than l2inonths noti"uln writing to GosL to that gffec! and (ii) complying with such conditions .r ;;; be prescribed or stated in this Agreement and any other agreement rerevint to the programme of operations' Upon termination, the Parties shall be entitled to receive such amounts owing to them before the termination of this Agreement. su.n termination tl:]l.9.qythout prejudice to any rianirties or obtigations incurred by LoNDoN MINING in retaiion to the Mining r-e"re nre. prior to the date of termination. 6.15) Appticabte Law Except as otherwise specifically provided in this Agreement this Agreement shall be governed-by interpreted and construed in ]ctordance with the laws and regulations of the Republic of.sierra L;;;; 1in-.troing a1 internationat treaties and agreements that have been ratirieJ oy ihe parliament of sierra Leone). For and on behalf of the Government of the Republic of Sierra Leone tl ,1 I .g *p -.?.#-- Signatu Witness:. "Kt/-'l"l For and on behalf of London Mining Company Limited "(' Fof Name: QMre4 ri'e: . trtWA_CNe signature: ". ('@* Witness:. . .0 r:il'*"J: . . " L H.F"p V f. . . .. . . . . . : ,-?' -t-* - - ,{"#ts ---r' -"'-" -W:1 "\ l/ ^.{)^ + 1..*v r'ji \ \ . r"r'\$ '"t - LONDON MINtNG - GOSL Mining Lease Agreement 14 Final HPM/RR draft of g Aug w. mlnor correltions Aug2011 Page 30 Attached Schedules: Schedule A: Mining Lease Area (GOSL to verify Schedule A of 8/09 Mining Lease Schedule B: Minerals io be mined Schedule C programme of Mining Operations, current as of August 201 1 Schedule D p.rogrammg for the employment and training of citizens of Sierra Leone Schedule E List of Nominated Suppliers