V V PRODUCTION STIAIIING AGREE}.TENT . This PRooUCTToN ' " d " ;ii, :3 F :il_r1l^' I I ","t :5"11"'I L .. jx=J j f ii3"" il.. ;; I " i n i =" THE REPUBLTC OF T}II ''" *n;; ':.:iF,:ii*t,i{xF3;"r;j;,.,;g ilT',j;ffit***tg;ffi and ili3}ii?l:ry, I'f:Is".".?5fl o,,,,IPH:ITI35 gnd existing under Iaws of R€pub l i" or"-rnJ"i;l ,. --tf" th6 ftTtf 1;',i:iilJi;1il1-,{iffi ;:*iif p""r.d .resui' Jl'";i;^,rf;X8, "lSrT,in3li:X; try Lhc Board under nr inbesral prit "r,"I".'i'rnox A wh lch forms an 腒 WITNEssETH Sll::: u l貎p菔 li腸 ::1:ti膊 :lF:1lY:101__91. hO Fepubllc oF n醁 1'1腵 J+LFrf,11:苇腌 :::11::腵 Fll[1腂 Fx 17膋 閁11:芵 lnlrloral s, cOl11 譧 :C18at芳腊 ::lrol:]:: a貎 雉 腶 芫辋I:I花II腵:__1:ml腵 by the 腸 腵 菄腵 ta::LI:]0荛 'fwned 苜 : 腡苜 ta:F. 6FJ:IIIil:r,VI:賻:3ur:=芫 trt,ilJzation [1 ldO腶 :醁 ::腵 Fti閁 ::E :腵 :u腵芵 腸i 荍 trilnl荞荫腂_ IIifrit腵 ::n 38芴 control :l膋 and 腵 :R:腧 supervislon Of the :[腂 31菄 f]T: f:1 腂F膋18f腵:?:Ifilli]芵 菌[IteF''I膈 : WIIEREAS, by Fxecutive Ordsr No. 21 rllB7, the secreLarv ;;".*:,::#tr"jjl::":li!.:i,,illl, l::::!"r n..ourr"-I r" enror l;l; slraring agreernents ;. ;;;,:;^_:::_ ""- into prorJucLiun e.,r..n,i.ii'*ir'Jit'"ir,"'" furthoranco of th€ obioctive. oF ttre 腝 e(;onomy tjil.1:l^!: bor'te rex:賟 throush .r"."fi311?l, i ;;;--"";i"n";ii 5芫 - 膫苆 liop"lo n芵 腶 1:腅 11:F腶 腵靲 1苦:it:[|::nl:l 腡 []:g:nd SternaLic Pago 1 of 23 / 菇 臉 V 腅 C腶 p81:nittil18d:::ilil:i:|:: [11:腵 :::::|::S:lii:醁 ingC膊 ::f腷腡 `t:鷛 Gover腡 腡菌 貎[A:A t葠 :n:腸 3[|:腵 m腂1:S: iII!ili:腂 ili:::||:;鏱 ::膋 i]:[:8:I: ::alF L:tc閁 y C:31tti菇 :Fl:::::[1:i::i:貎 譧 |:i:li5d:::11::i:::芫 '腵 ;:V81:腵 ::i sI;:il::[illilc::;:閁 il:I: ili醐 li::ierT:[:E[:l[1,11:膋 腒 SECTIoN SCOPE _ 1.1 .This Agreement .is a producLion sharing agroonlon enL€Jr€d irrLo purauant to Ex{rcut"i ve OiOer No. 279. 1.2 rtrs p.irnary purpor€ of this Agr€.men. -'Eo*n,ercia.l provido for Lhe exfrloratlon, d€velopr[enU anJ is to ubi l.i zat;lon of nickel, cobalt, chrome, i.on .nJ .r.po. i IJ '"rlii:,iiL wiLhin the ConLract Area, with "[r,"i technolosy and - aIi- n."""=r., eervit;ss, the fJnancing to be rurnisheo"J;--;;;;"r;;' ;;;:";; ContracLor in accordance with ah; provieione of t;hie Asreement. The contractor ahall Ly ui.iir; ;i i;i;i; Agreement, acquire -incompassed any title to t ";;; ConLract AreA. anOs vrll;hln tho 1-3 The Conl_ractor sha.l I undertako and ex6cute, for and on be'alf oF th€ covernment, Mining of" r"t i on" - i; -;;.;;;rr;;; with t,he provisions .of , ihis 16."Er.nt, i;-";;;:;;; constituted.and appo.inted for tfre "n.i Lhs exclusive entity to conduct, iurposaG of thJs Agr.eennenL ContracL Area. i{in;;s operatlons in ths 1.4 The Contractor shal I assume a.l I €xD.loratJon ri6l( such that I r= no M rnerals. in co'nmercioi -qiran t t iv''a.! -J"Ji, r i,iii and protJucod, i t wi I I rrob be errLi LIecl for reirnturssmen _ l._5 During tho term of Lhls Agreement, tho tota.l vulu6 of productlon and sat6 of marl(etabie pioouits o".iv"o iilm th€ M'lning Operatlons contemplaL6d trers ln BhalI b€ account€d for atrd divided betw€en l;lre Govsr.nment and contractorl-in Pe.go 2 of 23 /腌 莓 臚苅 \lon aCcordance wlth section vII hereOf. / SECTIoN II . DEFINIT膡 oNS :`r L:7urf7110=11醁 I:fl=1lnghF閁 [:腸 cilv:li:anlli::T:腵 1膍 R=:: [R: 2.lO Con tract ffiff:iiiil;' ;;l m w:, zlruSi:#ji'-ir^ nl ; i:i::;, ;'; 5; :; J j"" " =i ;j" sxln" " i i i" xls =.,."., f ;5 f n I : I i: i:" ::i, i., x" 3,3; ; inl: "" ". l::":iji i=!";;sT.'i::,:i Il"i?fl".Ii:", ?1, t.r_Te?re a docume.r :;; .:::;:;i:liry, socr-ar ry ".,"ita-ur 'n a apecrric Ei be rhar #;;;u."*:irjl:g"i,;i.,u ;#;.jlruyJy".ffl:ri# f:l; 2.12 Def lnitlve Agre€m€nt me6na tt ;i:iu. Is Ji::. **:^l; } r. :; ii* #" "iiili",:i lff iil;3; i"o r" J," ii I ; i I ifl*, u|;nf -or, l'iJ8"ri i t;il::lif"l";". :,:ffi l:.o, ii,'il or ro means the Date appearins as the dtrro phi Pres lrjonL of -ii;:, ";';lj"5ft";l'u;n?ut: Lhe nepudt t ipp inos. l; ; 2-14 Env i ronmont__ _m€ana . phyeical factors of .. t,h6 :il5#;Sl::' .r.,9;,r:,,.n uerng!,''-iic-iuorng rand. ware,r. , -,:k:::' i: ij: Hff ;"=i "; ; ;Ii:"' "" E",if ;^.S,lffi H:'":;"il1 : i F腵 deI ay, curtai I or pr€vent tlm6Iy actlon by th6 a Ff€cted. rflr-1-.y The force majeure msnt ionsd in thie aoction, t,hose of g€n€ral knowleclge, -.'"f,"f i" O" report€d oxcopt Resional ot fico concerned ,f Lniu'iiit"Jn tfsl to DENR from occurr€nce - calendar dlry6 ' 2.19 Forelgn Exchange means any curr€ncy oth€r than that of the RepubI ic of ihe phif ippinJe acceprabto to the Government and tho Contractor - the 2'-20 Govornment means tlre government ol= the R€putIic oF Philippines or any of ite ";;";i;;-;; i n6trumBhta I i t.i e.1} . 2,2l Grosa Mlnlng . Rovenug8 means the groaa 6alsa receipts of production-g6rived ov t'n"-b'"ntractor f rom r.rin rng opsrations wlthin lh" . contii"i"-ali., tGlaB froisht, rnsurance, 6m6l ting and reFining cost6 specif led-.ln Sil;;;i; 1. to 2-22 Hlne D6ve.lopm€nt - roferB to Btspa necaesarl.ty tal(€n reach an orebody or mlneral oeposii that it can udll berJrr m i ned . "o 2.23 Hlnsra'ls means. aIl natural ly occurrlng subatan(:6n in solid, liquid or any intermeoiaie'sLate. washing or drying, but withoui; any ch6mlca.l or processes or manufacturi ng. "n.l"rg"lng . -. 2.25 Mlnlng Area means thst portion of the del lneated for mlne deve'lopmont and production in the Dectaration of Mtnins r"""itifiiv] 2.26 Mln{ng op€rationa means minora.l exploratl()n, development, producti.on and alI ottrei operat,ions n";";;;;;";; discover, d€v€lop and extract .in"rais.-- 2.27 Nelf. Mining Rgvenue shal.l have the attribut€d to it under Sectlon 8.4. 2.2a Not-lces means notice in wrlting, or.by te.lex telocopy (authenticated by .n"*"i' 'u.c[' or or recslved) addr€assd or asnt as provJded .tn "ir"tiirue iin this Agreement. s""tion''i;.;.;; 2.29 Ore means mi nera l or rock that can b6 extractad .ll,or proFit. 2 .30 Ors Hl n6ral mean6 a m.lnera.l that can bo extracl;ed From or€ and contributes to tho value of ths o;;.-- -"-'--.'-- 2.31 po'rlution msans any di rect or lndrrect arteration of tho phy6icat, thermat, chemical , Ui"i"si;"i';;-.;;i;;;;;;; lrroperties of any part of the Envlronment ty Uf emitt{ng or deposrtins wastes so as to ';aterr"i rv ""fraisirisl b€neficlal uso advsrs€ly, or to . "ii"li'iiii hazardous to public hearth, "rr=" condltlon which {e safetv o. "r"it"r". or-to iilii.iirrl birds, wildllfe, fish 腂 腎 腅腅 膋 r to plantBt arld polluto htls a cOrrespon( [11]utt菌 腶 FinllfO' . 2,32 Secr€t,ary Tggn: ths SecreLary of th€ Department EnvI ronment and Natura.l Rssourc66_ of _ 2-33 D€partmont or DENR m6ane the Departnsnt Envi ronmsnt and Natural n"eoui"e". "'*-"" of - 2-14 Work program moans a document which prea€nta p tan oF major minins acLivi ci"r- ""i.,'o th€ expenditures and auaget. of th6 'i""tI".to. th; -i;;-;;;i;;:; Area durins a siven.period i" ";;;;;i.Jfai.il expend iturcs for Env "i tir",'-ilctuOing tho p.lan anrj development of host lronment"r pi"il"Jt,i"n ano rehabi I itatlr:rn_ and. nelshb;.i;;-;;;r.lif"='".-j'#-i#i seosci ence and mi nera t tecrrnol ogy, ' "u"-"ru, rii;J ;;; IroiJri.-,i pursuant to this Agreement. SECTIoN III TERM oF ACREEMENT TWENTY腜 FIVE subject tO SECTIoN CONTRACT Is]and Area. HOctares 1_ Nonoc 4,372 2. Awasan 910 3. Han19ad 976 4. Dinagat 13.736* Total 腜 25,00o 腒 1 5,35O meters due North to polnt No. S with .latitucle 9.,-59'-19.75" / meter' due and tonsitud6 tZii-il '-'ie.eo..; Thence t..,4.E and west to_poi;L No- o *iit iatitude ,;:;;;_l;,;;- tongituAe 12s"-7!.,_g2.qs;; if,""""""r j,oss mstsra due to point No. 7 with Iati tude r'O"--dg;lza.es- and North 'I 25o-37'-o2.55..: Thence O,34S msters-iue longltrrde with lat,itude too-o6l-roiggt east to polnt No. a Thence fot lowing .tn i".Jitude t260_4o,_3o.at-. rh€_ ""J-' coast.tine s"rUi'oii"";i;. d; .i;;;."; ;;;i""."X:. I wtth an estimaueJ iuno --rr.a -.r"'i6]rii, avai If and when !h" covornmont ehal t decide to. awflrd lable or expIred -contract tn" surrgao }llneral Reservation operat6d "i"ur-"F -;;;;;;";;;",i,i accordance with Sec_- ^by an independent -6.7 and 6.8 of'n.e. 1B2B aB amsnd$d. the contrachor shal I have a pr"fe.entia.i . i ;;;; -;";'"-fi";; cas€, to exc€ed a total. land area of twenty:flve ifr"u",rrii hectares in accordance wJth sec. E.z ot it" "lr"-ia,r, . The speclfic si.ze and shape of thB contract Area rrrt, indicated in a maplsketch_ wttir corroJponolns' -s""s';;,iiltiili coordinatea shown 1n Ann6x B. 荸 SECT10N V EXPLORAT10N PER10o 5.l T:metablo fOr ExoloratJon.u., ::腡 l.賻 :菒 腜 T菒 荱XDiOrat10n. LL:苨 cOntractor 8h腫 腵 Contractor 11] commenco Exp10rat芤 V 5.3 _ 膡Q腣 b] Final R莶 pOrt. 腜 ~~膡 The Coni:ractOr shall subrnlt to t hru -1,2_i6Jr镓 芲芹腝 貎::软 :dt膋 D 貾f]腷nnfttCAllFI荁riq:::itF:di:腂 RoglOnal oFFice, cOpy f腶 Fn16hed 芲 腂 莀 软1: =:u concerned DEMR 膋 膋Bc1 0riCc,8 ri:腵 Bureau n finnl __h^_膜Bureau n final retiflllJIIITI__蹏 :腂L膡_ ` .198 and Goo腜 臦 :h荲 7,:A腅 |: ex,lratiOn oF thO E蹸ex膜 lrall10n OF 轜hO 1 ':(IIb m:腡 116ratigI腅荨erT:3 膫 ' ,,na I 醁 b[roTn tll: 腵 I Do 1n ttr. fo rrrl And _=:腵tc膜6_^^ ^^___腜芽I荃9hin:1:膪 fornt and subst,ance 腜 ' ;:" pubtlshed reDorr.F ..r 166^-^r.^-, "...""i1,r-"' to ^:;:rurr p."i.."j'"i"i "?If:I3!]? =苇 08pectell..111:Ina,10,腵 repOrt6 of 7 _7貾 苇T腅 :Ton芬 膈388:貎 腵]醁 l nCOrDOrallo r11 1 | 膜11..:li花 部臦 貾 花 l腅 A[::iy::菌17::la1lc13辑 ]莀 1:::[7:腵locat10ns OF samp13菄 : ]t膋 :11腅1lfiFl荒:腶IIIIIF:_911::::芹 腷 Iss:荗 8:''腂 ~腂 cX芲 腡 r.:銅 assess賻assessnlon膜:[:莲ludl13 Of min_r_1 _^膡膡_腁膡 _ :Ont Of minoral pOtenti11: ~菄 ^_膡 花 苇::in[:腷 AI~1腂po腵 芹 ITT' al]: i nc lllrln rnmnl_膡1:臊_ 腌1^,^膡膡_腝 __ ._ clude cOmp10tO detlllEI~~g,`:膈 31tur芲 苆腷 [3 8831ingali: Exp10rat10n pprJnrIperiod. E:{p'l oraLi on c) Hlnlno Fqaqitl LLi-y. _ Durins the Exploration [,()riod, Lhe Contractor G trEJl- lbl I lty atudles any part oF the Contract "onOuct'f"as for tlre period, e."" -;ril.i warrantsd. lVithin the co.traclor s^al ""-r"y'[" ttrru the Dtrecbor of the I u to ,rs DENR s€crotarv furnished the Mines anrJ. "";;;;;";-;ruri n"gtonut oFfice, copi Minins Feas ibi r i r.v wttrr Geo_sc l;;.;;";";"au a DectaraLion of Ll,€ n€xL succeedino a--wJiri"iilJi.i,i' r". dovelopmenL for three (s) VeaIE'inOicating Lttor€in Minlng Aroa. The decretary r -.iu'on Lh€ the feaslbi I lty and.. "r,"i d€craratron of Til i.n *oir.-pios.Li' il tntn two (2) months trom rocaiDt, thereof, otherwisL tfr"y""f,".i f b; J;;r.;-;r#;;;; and the conbractor may proce€d w i ttr'ttr"-"x€cuLion .brre program. Areas nor deiinea[eo' plit- of the of l{orlr shaII be deemed relinquishoJ-i" "li Hinlno Area t"""I-oi ar," covernmenh- of Fal lure ol" th€ Cont_,ract,or to srrbml t, a Dsc.laratlon Mining Feaslbl I ity sha1 I l.re a srrtretant.lal braach of th.i e Agr€emont. "on"tJ.."O Page B of 23 lll | SECTION VI DEVELOPMENT AND CONSTRUCTION PERIOD 6.1 Tlmetablo. _ Tho .Contract,or eha.lI comp.lete the developmenL of the ,jlg. t""iuoTiJ"'tt" conarruction ()f protluction faci tlties-wlthln thir[i_six (36) mont,h6 from re submission or rh6 Dec-laration .t-irirri.,s. i"".to ii'ili, 'l,J,ili,iil to such extension based on :u"ii'rj'i",. reasons as tha Secretary may approve. 6.2 Reportl nq. - a) Alnual. --The Contractor shall submit to th€ [)ENR Secretary thru tho Director of the - -C""_"" DENR Regional Offlce, copy furnished the llines "o.,".rn"O annua'l r€port within sixty "nO i 6ncoa Bureau 6n (oo) .tay" after Oecemb;;'-3i each year whlch .tates the major'a.tiviti.e, ."ii;; expendituree during the y€ar ""f,l.r.m"ntJ rock and minoral . .covered, tn.lrOins ,a;;;-;;;",il; reports during analysia and progrees geo.loglial ;;; ;i;li;; the developmenL ancl consfruct,fo" p"il"Ul".''-' O)., __Elngl Bcoert.. - Within slx (6) months from th€ ::*'l::J :1^..:I rt:^ g"y:l:gy"lr "tg ";"=i;;";i;.-..i"ti iiir llj, " other The Contractor shaII conduct. Min.lng op€ratlona acr,ivi r,ies ror rhe ;;;;; lJi"Jr""t"r,"_ and accordance with tho dury operat tne period .in modif ication thereof "ppi""Jj tiork . programg and ,lry ,pp.olr"J-Ey"it" 6."r"t..v. 7.9 Reportlnq _ ::t:li].n|5.u!#ffi;";"#:;::ilJxExl'[n""3E..Ili;3 t'eriod, th€ contractor ."uiri'i""[o tne r;hru th€ Drrector of tho "n"r'i -neg orNn secrJiai]y the Mrnes "on.".n"J"'iiNR I ona t ofrtce, copi (3O) and ceo-scr€n"""" ari"uii-rr it, iri"'i^iHi 'urnlshed days after the end of ea"tt'c"i"iO", euart€r a Report statins rh€ tonnass pi"j""ii.n -r, i"irl euart€rly*Jt".JFlrii concentrates, and Lhsir "r - -grades cf products; value, corresponrJ i nJ and other typea whom sold; terms oF destination oi"-=.i", or €xport,s and to sales and expenUiiJr.". b) Annual ReDo!-tg. - During the ODorating period, the Contractor shal I subnrlt to tn"-Oii,in sscrotary Lhru tha Dl rector of tho conc€rned .DENR n"si"""i---oitiJJ,' furnlshed .the Mlnes anO ceolscl6n."" ijii"r, w.tthJn ";;; days from th6 end oF each calsndrr--i"ra e{xty (60) indicating in sufficient d€ta.l l: "n Annua.l ReporE 芭 花 Th€ total tonnago of ore reserve6 lrhether 花腶 J腁 prov€n, probable, or inforred; the total tonnag€ of or€s, kind-by-k lnd, 'Urot