I\{PSA Contrad for Operatirrg lUincs fur Ntrr-iecervaliotr r\rcns 蝗 Contratx for Operating Mines in Nsr-Reservation Arens WHEREAS, the Contractor has access to all the financing,technical competence, technology and environmental manegement skills required to promptly and effectively carry out the objectives of this Agreement. NOW, THEREFORE, for and in consideration of the foregoing premises, the mutual covenants, terms and conditions hereinafter set forth, it is hereby stipulated and agreed as follows: SECT10N I SCOPE This Agreement is a Mineral Production Sharing Agreement entered 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 sustainable development and commercial utilization of gold and other mineral deposits existing within the Contract Area, with all necessary services, technology and financing to be furnished or affanged by the Contractor in accordance with the provisions of this Agreement. The Contractor shall not, by virtue of this Agreement, acquire any title over the Contract/lV1ining Area without prejudice to the acquisition by the Contractor of the land/surface rights through any mode of acquisition provided for by law. The Contractor shall undertake and execute, for and on behalf of the Government, ''" sustainable mining operations in accordance with the provisions of this Agreement, and is hereby constituted and appointed, for the purpose of this Agreement, as the exclusive entity to conduct mining operations in the Contract fuea. During the term of this Agreement, the total value of production and sale of minerals derived from the mining operations contemplated herein shall be accounted for and divided between the Government and the Contractor in accordance with Section W hereof. 蝕 SEC膡ON DEFINIT10NS Contrad for Operating Mines in Non-Reservatirrt Areas 2.5 Budget means an estimate of expenditures to be made by Contractor in mining operations contemplated hereunder to accomplish the Work Program for each particular period. 2.6 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 Quarter" means a period of three consecutive months with the first calendar quarter starting with the first day of January. 2.7 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. 2.8 Constitution or Philippine Constitution 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. 2.9 Contract Area means the area onshore or offshore delineated under the Mineral Production Sharing Agreement subject to the relinquishment obligations of the \ Contractor and properly defined by latitude and longitude or bearing and distance. - \ -.\\ 2.10 Contract Year means a period of twelve (12) consecutive months counted from the Effective Date of this Agreement or from the anniversary of such Effective Date \r ) \\-/ Z.tl Contractor means JOHSON GOLD MINING 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. 2.12 Declaration of Mining Feasibility means a document proclaiming the presence of minerals in a specific site that are recoverable by socially acceptable, environmentally safe and economically sound methods specified in the Mine Development Plan. 2.13 Department or DENR means the Department of Environment and Natural Resources. 2.T4 Director means the Director of the Mines and Geosciences Bureau. 215 Effective Date means the date of execution of this Agreement by and between the Contractor and the DENR Secretary on behalf of the Government. In case a Special Mines Permit had been availed of by the Contractor, the effective date of this Agreement shall be the date of issuance of said Special Mines Permit. 2.16 Environment means all facets of man's surroundings. physical, ecological, aesthetic, cultural, economic, historic, institutional, and social. 2.77 Exploration means searching or prospecting for mineral resources by geological, geophysical, geochemical surveys, remote sensing, test pitting, trenching, drilling, shaft sinking, tunneling, or &ny other means for the purpose of determining the existence, extent, quality, and quantity of mineral resources and the feasibility of mining them for profit \. ,\ \ for Operating Mines in Non-Reservati-S operations and the corresponding expenditures of the Contractor in its Contract -\. Area during a given period ol time, including the plan and expenditures for development of host and neighboring communities and of local geoscience and mineral technology, as submitted and approved in accordance with the implementing rules and regulations of the Act. i....) \ SECTION III 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 Agreement, as well as the changes in the terms and conditions thereot shall be upon mutual consent by the parties. In the event the Govemment decides to allow mining operations thereafter by other Contractor, this must be through competitive public bidding. After due publication of notice, the Contractor shall have the right to equal the highest bid upon reimbursement of all reasonable expenses ofthe highest bidder. SECTION IV CONTRACT AREA Area. This Agreement a total area 41Location of Contract covers Size, Shape, and of Nine hectares (9.0 has.), situated at San Antonio, Luklukan Norte, Jose Pgnganiban, Camarines Norte and bounded by the following geographical coordinates (please refer to ANNEX'ts" - 1:50,000 Location Map/Sketch Plan) 腒 腓 艔 腁 for Operating Mirres irr Non-Ilesorvntitrt Arcns C