ON SIIARINC AGREEMENT IINERAL PRODUC膡 蝗 MPSA No. 16芣 - 2000 - V GttEMlv:1`迪 i:韡 1"苀 襣覷臧迢 閣 趮铬f諭 諭; 苔 諭釋 and betweeni THE Rf,PUBLIC OF TIIE PIIILPPI\ES, herein referred to as the GOVERNMENT, represented in this act by the Secretary of the Department of Environment and Natural Resources, with offices at the Department of Environment and Natural Resources Building, Visayas Avenue, Diliman, Quezon City, and r讽 pplett11轒趕 鞐e臨l跼 臨限臨 n腶X:臱菌諭 袟1:豶 鞐 腧 WHEREAS, the Contractor desires to join and assist the Government in the sustainable development and utilization for commercial purposes of certain gold, copper, silver and other associated minerals existing in the Contract Area ( as herein defined); WHEREAS, the Contractor has access to all the financing, technical competence, technology and environmental management skills required to promptly and effectively carry out the objectives ofthis Agreernent; 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: SECTION 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 V primary purpose of this Agreement is to provide for the sustainable development and commercial utilization of certain gold, copper, silver and other mineral deposits existing within the Contract Area, with all necessary services, technology and financing to be fumished or arranged by the Contractor in accordance with the provisions of this Agreement. The Contractor shall not, by virtue of this Agreement, acquire any title over the Contract/Mining Area without prejudice to the acquisition by the Contractor of the land/surface rights through any mode of acquisition provided for by law. 12 The Contractor shall undertake and execute, for and on behalf ofthe Government, sustainable mining operations in accordance with the provisions ofthis Agreement, and is hereby constituted and appointed, for the purpose ofthis Agreement, as the exclusive entity to conduct mining operations in the Contract Area. 苨 腃 The Contractor shall assume all the exploration risk such that if no minerals in commercial quantity are developed and produced, it will not be entitled to reimbursement. 14 During the term of this Agreement, minerals derived from the mining accounted for and divided between accordance with Section VIII hereof. 蝕 SECT10N DEFINI膡 ONS 1 '腅 ''莁 means this Mineral Production Sharing Agreement. 22 Agreement Minerals mean other ores/minerals which occur together with the 23 Associated principal ore/mineral. means Bangko Sentral ng Pilipinas. 2.4 Bangko Sentral means an estimate of expenditures to be made by the Contractor in the 25 Budget for mining operations contemplated hereunder to accomplish the Work Program each particular period. Year or Year means a period of twelve (12) consecutive months 2.6 Calendar 31, while "Calendar starting with the first day of January and ending on December Quarter" means a period of three consecutive months with the first calendar quarter starting with the first day of January. Production means the production of sufficient quantity of minerals to 2.7 Commercial of mining operations reckoned from the date of sustain economic viability commercial operation as declared by the Contractor or as stated in the feasibility v\ study, whichever comes first. Constitution or Philippine Constitution means the 1987 Constitution of the 腒 Republic of the Philippines adopted by the Constitutional Convention of 1986 on 腟 October 15, 1986 and ratified by the People of the Republic of the Philippines on February 2,1987. 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' Z.lO 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. 2.ll Contractor means UNGAY-MALOBAGO MINES, INC. AND RAPU-RAPU MINERALS, INC. 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- Z.l2 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. 2.14 Director means the Director of Mines and Geosciences Bureau. 2.15 Effective Date means the date of execution of this Agreement by the Contractor and by the Secretary on behalf of the Government. In case an Exploration Permit/Temporary Exploration Permit had been availed of by the Contractor, the Effective Date of this Agreement shall be the date of issuance of said Exploration Pemit/T隦 腅 隦裳 钃苇 / 2.16 Environment means all facets of man's surroundings. physical, ecological, aesthetic, cultural, economic, historic, institutional and social. 2.17 Exploration means searching or prospecting for mineral resources by geological, geophysical and geochemical surveys, remote sensing, test pitting, trenching, drilling, shaft sinking, tunneling, or any other means for the purpose of determining the existence, exent, quality, and quantity of mineral resources and the feasibility of mining them for profit. 2.18 Exploration Period shall mean the time period from the Effective Date of this Agreement which shall be for two (2) years, renewable for like periods but not to exceed a total term of eight (8) years subject to the pertinent provisions of the implementing rules and regulations of the Act. 219 Force Majeure means acts or circumstances beyond the reasonable control of the Contractor including, but not limited to war, rebellion, insurrection, riots, civil disturbances, blockade, sabotage, embargo, strike, lockout, any dispute with surface owners and other labor disputes, epidemics, earthquake, storm, flood, or 艘 other adverse weather conditions, explosion, fire, adverse action by the Government or by any of its instrumentality or subdivision thereoq act of God or any public enemy and any cause as herein described over which the affected party 腒腁 has no reasonable control. Foreign Exchange means any currency other than the currency of the Republic of the Philippines acceptable to the Government and the Contractor. Government means the Government of the Republic of the Philippines or any of its agencies and instrumentalities 2.22 Gross Output means the actual market value of the minerals or mineral products ftom each mine or mineral laad operated as a separate entity, without ary deduction for mining, processing, refining, transporting, handling, marketing, or any other expenses. Provided, That if the minerals or mineral products are sold or consigned abroad by the Contractor under C.I.F. terms, the actual cost of ocean freight and insurance shall be deducted: Provided further, That in the case of mineral concentrates which are not traded in commodity exchanges in the Philippines or abroad such as copper concentrate, the actual market value shall be the world price quotation of the refined mineral products contained therein prevailing in the said commodity exchanges, after deducting the smelting ,refining, treatment, insurance, transportation and other charges incurred in the process of converting mineral concentrates into refined metal traded in those commodity exchanges. 2.23 Mine Development refers to work undertaken to prepare an ore body or a mineral deposit for mining, including the construction of necessary infrastructure and related facilities. 2.24 Minerals mean all naturally occurring inorganic substances in solid, liquid, gas or any intermediate state excluding energy materials such as coal, petroleum, natural gas, radioactive materials and geothermal energy. 2.25 Mineral Products mean materials derived from mineral oreVrocks and prepared into marketable state by metallurgical processes which include beneficiation, -=<- 2.26 Minins Area means that portion of the Contract Area identified by the Contractor as defined and delineated in a Survey Plan duly approved by the Director/concerned Regional Director for purposes of development and,/or utilization and sites for support facilities. 2.27 Mining Operations means mining activities involving exploration, feasibility study, environmental impact assessment, development, utilization, mineral processing, and mine rehabilitation 2.28 Notice means notice in writing, telex or telecopy (authenticated by answer back or confirmation received) addressed or sent as provided in Section 16.2 of this Agreement. 2.29 Ore means naturally occurring substance or material from which a mineral or element can be mined and/or processed for profit. Pollution means any alteration of the physical, chemical and/or biological properties of any water, air and/or land resources of the Philippines, or any discharge thereto of any liquid, gaseous or solid wastes or any production of unnecessary noise or any emission of objectionable odor, as will or is likely to create or render such water, air, and land resources harmful, detrimental or injurious to public health, safety or welfare or which will adversely affect their utilization for domestic, commercial, industrial, agricultural, recreational or other legitimate purposes. Secretary means the Secretary of the Department of Environment and Natural Resources. 232 State means the Republic of the Philippines. 2.33 Work Program means a document which presents the plan of major mining operations and the corresponding expenditures of the Contractor in its Contract Area during a given period of time, including the plan and expenditures for development of host and neighboring communities and of local geoscience and mining technology, as submitted and approved in accordance with the implementing rules and regulations of the Act. SECTION Itr TERM OF AGREEMf,NT 腏 艩 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 thereof, 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. 荭 -=F- 腛 腝 SECTION TV CONTRACT AREA 41 Size, Shape, and Location of Contract Area. This Agreement covers a total area of one hundred sixty seven & 8625110000 hectares (167.8625 has.), situated at Malobago, Rapu-Rapu, Albay and bounded by the following technical description (please refer to ANNEX "B" - l:50,000 scale Location Map/Sketch Plan): LINE BEARING DISTANCE -49'E l-2 S89膋300.00M -11'W 3 2腝 S00膋90000M -49'W 3-4 N89膋 30000M -11'W 4腝5 S00膋197.75M -11'W 5腎6 S45膋4265M 銆 6-7 N44膋49'W300.00M -11'W 7-8 S45膋300.00M -49'W 8-9 N44膋 300.00M -11'W 9-10 S45膋300.00M -49'W 10-11 N44膋300.00M -11'W 11-12 S45膋300.00M -49'W 12-13N44膋 600.00M 腣 13-14N45膋 11'E321.32M -11'E 14-15 N00膋476.44M -49'E 15腝16600.00M S89膋 -11'W 16-17300.00M S00膋 -49'E 17腣1860000M S89膋 腣 18-1911'E N00膋30000M 腣 19腣1 49'E300.00M S89膋 Tie Point: Triangulation Station Rapu-Rapu, USC & GS, S70o05'W 4,756.81Meters to corner No. I of Contract Area. SECT10N V V EXPLORAT10N PERIOD 5.1 Timetable for Exploration The Contractor shall commence Exploration activities not later than three (3) months after the Effective Date for a period of two (2) years, renewable for like periods but not to exceed a total term of eight (8) years, subject to annual review and approval by the Director to evaluate compliance with the terms and conditions of this Agreement: Provided, That further renewal may be granted by the Secretary under circumstances as defined in the implementing rules and regulations of the Act. 5.2 Work Programs and Budgets - The Contractor shall strictly comply with the approved Exploration and Environmental Work Programs together with their corresponding Budgets (please refer to ANNE)GS "C" and "D"). The amount to be spent by the Contractor in conducting exploration activities under the terms of this Agreement during the Exploration Period shall not be less than that specified in the approved Work Programs, such that during the first two For the Exploration Work Program: 1st Year : P 9,969,56100 Contract 2nd : P ll,309,09900 Contract Year: Total : P21,278,66000 For the Environmental Work Program Total : P 2,120,00000 In the event of renewal of the Exploration Period, the amount to be spent every year shall first be agreed upon by the parties. In the event of termination ofthis Agreement, the Contractor shall only be obliged to expend the pro-rata amount for the period of such Contract Year prior to termination. If during any Contract Year, the Contractor should expend more than the amount to be expended as provided above, the excess may be subtracted from the amount required to be expended by the Contractor during the succeeding Contract Years, and should the Contractor, due to unforeseen circumstances or with the consent ofthe Government, expend less during a yeaq then the deficiency shall be applied to the amount to be expended during the succeeding Contract Years. Relinquishment of TotaVPortion of the Contract Area - During the Exploration Period, the Contractor may relinquish totally or partially the original Contract Area. After the Exploration Period and prior to or upon approval of the Declaration ofMining Project Feasibility, the Contractor shall finally relinquish any ion ofthe Contract Area not necessary for mining operations and not covered by any Declaration of Mining Project Feasibility. the 54Area - The shall cause the survey of Survey of the Contract Contractor perimeter of the Contract Area through an application for survey, complete with requirements, filed with the concemed Regional Office simultaneous with the submission of the Declaration of Mining Project Feasibility. Survey retums shall be submitted to the concerned Regional Director for approval within one (l) year from receipt of the Order of Survey complete with the mandatory requirements stated in the implementing rules and regulations of the Act. - Period, the 55Feasibility During the Exploration Declaration of Mining Project Contractor shall submit to the Director through the concerned Regional Director, a Declaration of Mining Project Feasibility together with a Mning Project Feasibility Study, a Three (3)-Year Development and Construction or Commercial Operation Work Program, a complete geologic report of the area and an Environmental Compliance Certificate. The Declaration of Mining Project Feasibility, Mining Project Feasibility Study Report and Work Programs are subject to approval by the Director. Failure of the Contractor to submit a Declaration of Mining Project Feasibility during the Exploration Period shall be considered a substantial breach of this Agreement. 艩 艨 腜 56 Reporting 腒 腁 7 Periodic Reports - During the Exploration Period, the Contractor shall submit to the Director through the concerned Regional Director, quarterly and annual accomplishment reports under oath on all activities conducted in the Contract Area from the Effective Date of this Agreement. The quarterly repo( shall be submitted not later than fifteen (15) days at the end of each Calendar Quarter while the annual accomplishment report shall be submiued not later than thirty (30) days from the end of each Calendar Year. Such information shall include detailed financial expenditures, raw and processed geological, geochemical, geophysical and radiometric data plotted on a map at a minimum 1:50,000 scale, copies of originals of assay results, duplicated samples, field datq copies of originals from drilling reports, maps, environmental work program implementation and detailed expenditures showing discrepancieVdeviations with approved exploration and environmental plans and budgets as well as all other information of any kind collected during the exploration activities. All information submitted to the Bureau shall be subject to the confidentiality clause ofthis Agreement. bFinal Report - The Contractor shall submit to the Director through the concemed Regional Director, a final report under oath upon the expiration of the Exploration Period which shall be in the form and substance comparable to published professional reports of respectable international institutions and shall incorporate all the findings in the Contract Area including location of samples, assays, chemical analysis, and assessment of mineral potentials together with a geologic map of 1:50,000 scale at the minimum showing the results of the exploration. Such report shall also include detailed expenditures incurred during the Exploration Period. In case of diamond drilling, the Contractor shall, upon request of the Director/concerned Regional Director, submit to the Regional Office a quarter of the core samples which shall be deposited in the Regional Office Core Library for safekeeping and reference. CRelinquishment Report - The Contractor shall submit a separate relinquishment report with a detailed geologic report ofthe relinquished area accompanied by maps at a scale of l:50,000 and results of analyses and detailed expenditures, among others. SECTION Vt DEVELOPMENTAND CONSTRUCTION PERIOD 艏腌 Timetable - The Contractor shall complete the development of the mine including the construction of production facilities within thirty six (36) months from the approval ofthe Declaration of Mining Project Feasibility, subject to such extension based on justifiable reasons as the Director may approve, upon recourmendation of the Regional Director. 62 Reporting a. Annual - The Contractor shall submit, within sixty (60) days after December 31 of each year, to the Director tkough the concerned Regional Director, an amual report which states the major activities, achievements and detailed expenditures during the year covered, including maps, assays, rock and progress 雊neral analyses and geolo腶cal and envrontnentalduring nP臥i膋 the Development and c韛dl 豒 8 b. Final Report - Within six (6) months from the completion of the developmant and construction activities, the Contractor shall submit a final report to the Director through the concerned Regional Director. Such report shall integrate all information in maps of appropriate scale and quality as well as in monographs or reports in accordance with international standards, SECTION VII OPERATING PERIOD 71 Timetable - The Contractor shall submit, within thirty (30) days before completion of mine development and construction of production facilities, to the Director through the concerned Regional Director, a Three-Year Commercial Operation Work Program. The Contractor shall commence commercial utilization immediately upon approval of the aforesaid Work Program. Failure of the Contractor to commence Commercial Production within the period shall be considered a substantial breach ofthe Agreement. : 趌躂 鷴 鏯韘 貮 荨 which shall be submitted not later than thirty (30) days before the expiration ofthe period covered by the previous Work Program. The Contractor shall conduct Mining Operations and other activities for the duration of the Operating Period in accordance with the duly approved Work and corresponding Budgets and any modification thereof shall be subject to approval by the Director. - The may make expansions, 73of Facilities Contractor Expansion and Modification modifications, improvements, and replacements of the mining facilities and may add new facilities as the Contractor may consider necessary for the operations: Provided, That such plans shall be embodied in an appropriate Work Program approved by the Director. 74 Reporting a. Quarterly Reports - Beginning with the first Calendar Quarter following the commencement of the Operating Period, the Contractor shall submit, within thirty (30) days after the end of each Calendar Quarter, to the Director through the concemed Regional Dtector, a Quarterly Report stating the tonnage of production in terms of ores, concentrates, and their corresponding grades and other types of products; value, destination of sales or exports and to whom sold; terms of sales and expenditures. b. Annual Reports - During the Operating Period, the Contractor shall submit within sixty (60) days from the end of each Calendar Year, to the Director through the concemed Regional Director, indicating in sufficient detail: b.l. The total tonnage of ore reserves, whether proven, probable, or inferred, the total tonnage of ores, kind by kind, broken down between tonnage mined, tonnages transported fiom the minesite and their corresponding destination, G tonnases stockpiled in the mi;-0.'**n...t1,* t.,f,t,"" ffi;, sold or committed for export (whether actually shipped from the Philippines or not), tonnages actually shipped from the Philippines (with full details as to purchaser, destination and terms of sale), and if known to the Contractor, tonnages refined, processed or manufactured in the Philippines with full specifications as to the intermediate products, by-products or final products and ofthe terms at which they were disposed; b.2. Work accomplished and work in progress at the end of the year in question with respect to all the installations and facilities related to the utilization prograrq including the investment actually made or committed; b.3. Profile of work force, including management and staff, stating particularly their nationalities, and for Filipinos, their place of origin (i,e., barangay, towq province, region); and b.4. Ownership ofthe Contractor, particularly with respect to nationality. The Contractor shall also comply with other reporting requirements provided under Section 270 of the implementing rules and regulations of the Act. SECTION VITI FISCAL REGIME General Principle - The fiscal regime of this Agreement shall be govemed by the principle according to which the Government expects a reasonable retum in ic value for the utilization of non-renewable mineral resources under its national sovereignty while the Contractor expects a reasonable return on its investment with special account to be taken for the high risk of exploration , the terms and conditions prevailing elsewhere in the industry and any special efficiency to be gained by a particularly good perlormance ofthe Contractor. Fees - Within fifteen (15) days upon receipt of the notice of approval 82Registration of the MPSA from the concemed Regional Office, the Contractor shall cause the registration of this Ageement with the said Regional Office and pay the registration fee at the rate provided in the existing rules and regulations. Failure ofthe Contractor to cause the registration ofthis Agreement within the prescribed period shall be sufficient ground for cancellation ofthe same Fees - Prior to registration of this Agreement and at the same date 83 Occupation every year thereafter, the Contractor shall pay to the concemed MunicipaUCity Treasurer an occupation fee over the Contract Area at the annual rate provided in the existing rules and regulations. If the fee is not paid on the date specified, the Contractor shall pay a surcharge of twenty five percentum (257o) ofthe amount due in addition to the occupation fees. Share shall be the excise tax on 84- The Government Share of the Govemment mineral products at the time of removal and at the rate provided for in Republic Act No. 7729 amending Section 151 (a) of the National Intemal Revenue Code, as amended, as well as other taxes, duties, and fees levied by existing laws. For purposes of determining the amount of the herein Govemment Share, the Contractor shall strictly comply with the auditing and accounting requirements prescribed under existing laws and regulations. 莌 腛 --+1-- 腛 腁 The Govemment Share shall be allocated in accordance with Sections 290 ail, 292 of Republic Act No. 7160, otherwise known as "The Local Govemment Code of 1991". 85 Pricing of Sales - The Contractor shall endeavor to obtain the best achievable price for its production and pay the lowest achievable marketing commissions and related fees. The Contractor shall seek to strike a balance between long-term sales comparable to policies followed by independent producers in the intemational mining industry. The Contractor shall likewise seek a balanced distribution among consumers. Insofar as sales to Contractor's affiliates are concerned, prices shall be at arm's length standard and competing offers for large scale and long-term contracts shall be procured. The Bureau shall be furnished a copy of the said Sales Agreement subject to confidentiality between the Bureau and the Contractor. Associated Mnerals - If minerals other than gold, copper, silver and other associated minerals are discovered in commercial quantities in the Contract Area, the value thereof shall be added to the value ofthe principal mineral in computing the Govemment share. SECT10N IX WORK PROGRAMS Submission to Govel膡lrnent腜 SECTION X ENVIROI\Mf,NTAL PROTECTION AND MINE SAFtrTY AND HEALTH 10.1 The Contractor shall manage its Mining Operations in a technically, financially, socially, culturally and environmentally responsible manner to achieve the sustainable development objectives and responsibilities as provided for under the implementing rules and regulations of the Act; 1O.2 The Contractor shall prepare a plan of mining so that its damage to the environment will be minimal. To the extent possible, control of pollution and the transformation of the mined-out areas or materials into economically and socially productive forms must be done simultaneously with mining; 10.3 The Contractor shall submit an Environmental Work Program during the Exploration Period as prescribed in the implementing rules and regulations of the Act; 1 l0.a An Environmental Compliance Certificate (ECC) shall be secured first by the \ Contractor prior to the conduct of any development works, construction of J production facilities and/or mine production activities in the Contract Area; depending on the environmentaUgeological condition, nature and scale of operations and technology to be employed in the Contract Area; 10.6 The Contractor shall submit, within thirty (30) days prior to the beginning of every calendar year, an Amual Environmental Protection and Enhancement V Program (AEPEP), using MGB Form 16-3, which shall be based on the approved EPEP. The AEPEP shall be implemented during the year for which it was submitted. To implement its AEPEP, the Contractor shall allocate annually three to five percent (3%-5%) of its direct mining and milling costs depending on the environmentaVgeologic conditio4 nature and scale of operations and technology employed in the Contract Area; 10.7 The Contractor shall establish a Mine Rehabilitation Fund (MRF) based on the financial requirements of the approved EPEP as a reasonable environmental deposit to ensure satisfactory compliance with the commitmentVstrategies of the EPEP/AEPEP and availability of funds for the performance of the EPEP/AEPEP during the specific project phase. The MRF shall be deposited as Trust Fund in a govemment depository bank and shall be used for physical and social rehabilitation of areas affected by mining activities and for research on the social, technical and preventive aspects of rehabilitation; 10.8 The Contractor shall set up mitigating measures such as mine waste and mill tailings disposal system, mine rehabilitation or plan, water quality monitoring, etc. 12 injuries to persons or properties caused by Mining Operations of the Contractor and indemnift the Government for any expenses or costs incurred by the Govemment by reason of any such claims, accounts, demands or actions; j. In the development of the community: j.r. To recognize and respect the rights, customs and traditions of indigenous cuhural communities over their ancestral lands and to allocate royalty payment of not less than one percent (1%) ofthe value ofthe gross output of minerals sold; j2 To coordinate with proper authorities in the development of the mining community and for those living in the host and neighboring communities through social infrastructure, livelihood progritms, education, water, electricity and medical services. Where traditional self-sustaining income and the community activities are identified to be present, the Contractor shall assist in the presewation and/or enhancement of such activities; 艒 To allot annually a minimum of one percent (1%) the direct mining 腀 of and 腀 milling costs necessary to implement the activities undertaken in the 腀 腀 development of the host and neighboring communities. Expenses for 腀 community development may be charged against the royalty payment ofat 腀 腀 least one percent (1%) of the gross output intended for the concerned 腀 indigenous cultural community; 腀 腀 艓 To give preference to Filipino citizens who have established domicile in the neighboring communities, in the hiring of personnel for its mining operations. If necessary skills and expertise are currently not available, the Contractor must immediately prepare and undertake a training and recruitment program its expense; j.5. To incorporate in the Mining Project Feasibility Study the planned expenditures necessary to implement ( l) to ( 3) ofthis Section; In the development of Mining Technology and Geosciences: produce geological, geophysical, klits In the course of operations, to geochemical and other types ofmaps and reports that are appropriate in scale and in format and substance which are consistent with the internationally accepted standards and practices. Such maps shall be made available to the scientific community in the most convenient and cost effective forms, subject to the condition that the Contractor may delay release of said information for a reasonable period oftime which shall not exceed three (3) years; k2 To systematically keep the data generated liom the Contract/Mining Area such as cores, assays and other related information, including economic afld financial data and make them accessible to students, researchers and other persons responsible for developing mining, geoscience and processing technology subject to the condition that the Contractor may delay release of data to the science and technology community within a reasonable period of time which shall not exceed three (3) years; 芌 菋 芌 -l?-- 腒 14 10.9 The Contractor shall set up an Environmental and Safety Office at its minesite manned by qualified personnel to plan, implement and monitor its approved EPEP; 10.10 The Contractor shall be responsible in the monitoring of environmental safety and health conditions in the Contract Area and shall strictly comply with all the rules and regulations embodied under Mines Administrative Order No. MRD-51, Series of 1991, otherwise known as the "Revised Mine Safety Rules and Regulations"; 10. 1 I The Contractor shall be responsible for the submission of a final mine rehabilitation and/or decommissioning plan including its financial requirements and incorporating the details and particulars set forth in the implementing rules and regulations of the Act. SECT10N XI E PARTIES TS AND OBLICAT10NS OF T蝕 RIG蝕 11 1 0bligations ofthe Contractor: 荖 To exclusively conduct sustainable Mining Operations within the Contract Area in accordance with the provisions of the Act and its implementing rules and regulations; To construct and operate any facilities specified under the Mineral Ageement or approved Work Program; To determine the exploration, mining and treatment process to be utilized in the Mining Operations; d. To extract, remove, use and dispose of any tailings as authorized by an approved Work Program; e. To secure all permits necessary or desirable for the purpose of Mining Operations, f. To keep accurate technical records about the mining operations as well as financial and marketing accounts and make them available to Government representatives authorized by the Director for the purpose of assessing the performance and compliance of the Contractor with the terms of this Agreement. Authorized representatives of other Govemment Agencies may also have access to such accounts in accordance with existing laws, rules and regulations; To fumish the Bureau all the data and information gathered from the Contract Area and that all the books of accounts and records shall be open for inspection; h. To allow access to Government during reasonable hours in inspecting the Contract Area and examining pertinent records for purposes of monitoring compliance with the terms of this Agreement; i. To hold the Government free and harn ess from all claims and accounts of ndS'as wd as d: accidents or 2 J k3 To transfer to the Govemment or local mining company the appropriate technology it may adapt in the exploration, development and commercial utilization ofthe minerals in the Contract Area; k4 To allocate research and development budget for the advancement of mining technology and geosciences in coordination with the Bureau, research institutions, academe, etc.; k5 To replicate data, maps and reports cited in (k.1) and (k.2) and fumish the Bureau for archiving and systematic safekeeping which shall be made available to the science and technology community for conducting research and undertaking other activities which contribute to the development of mining, geoscience and processing technology and the corresponding national pool of manpower talents: Provided, however, that the release of data, maps and the like shall be similarly constrained in accordance with (k.l) and (k,2) above; To incorporate in the Mining Project Feasibility Study the planned expenditures necessary to implement all the plans and programs set forth in this Agreement; and V dh腣臥md t臥mmd邽 賜d臥md 驱 芡 腟誛 腅 鞔鑆 腧 Y譔 I I 2 / Nghts of the Contractor \ The Contractor shall have the right: To conduct Mining Operations within the confines of its Contract/Mining Area in accordance with the terms and conditions hereof and that it shall not interfere with the rights ofother Contractors/Lessees/Operators/ Permittees; bpossession of the Contract Area, with full right of ingress and egress Of and the right to occupy the same, subject to surface and easement rights; V C geological, geophysical, To use and have access to all declassified drilling, production and other data relevant to the mining operations; To sell, assign, transfer, convey or otherwise dispose of all its rights, interests and obligations under the Agreement subject to the approval of the Govemment; C To employ or bring into the Philippines foreign technical and specialized personnel, including the immediate members of their families as may be required in the operations of the Contractor, subject to applicable laws and regulations: Provided, That if the employment connection of such foreign persons with the Contractor ceases, the applicable laws and regulations on immigration shall apply to them. Everytime foreign technologles are utilized and where alien executives are employed, an effective program of training understudies shall be undertaken. The alien employment shall be limited to the required approval under existing laws, rules and regulations; J ---t-_ t" i {'l \ To enjoy easement rights and use of timber, water and other natural resources in the Contract Area subject to pertinent laws, rules and regulations and the rights ofthird parties; Of repatriation of capital and remittance of profits, dMdends and interest on loans, subject to existing laws and Bangko Sentral rules and regulations; and h. To import when necessary all equipment, spare parts and raw materials required in the operations in accordance with existing laws and regulations, 1l.3 Obligation of the Government The Government shall: Ensure that the Contractor has the Government's full cooperation in the exercise ofthe rights granted to it under this Agreement; b Use its best efforts to ensure the timely issuance of necessary permits and similar authorizing documents for use of the surface of the Contract Area; and To cooperate with the Contractor in its efforts to obtain financing contemplated herein from banks or other financial institutions: Provided, That such financing arrangements will in no event reduce the Contractor's obligation on Govemment rights hereunder. SECT10N X蝕 ASSETS AND EQIIIIP莋 IENT 12.1 The Contractor shall acquire for the Mining Operations only such assets that are reasonably estimated to be required in carrying out such Mining Operations. 12.2 All materials, equipment, plant and other installations erected or placed on the Contract Area ofa movable nature by the Contractor shall remain the property of the Contractor. The Contractor shall have the right to remove and re-export such materials and equipment, plant and other installations from the Philippines, subject to existing rules and regulations. In case of cessation of Mining Operations on public lands occasioned by its voluntary abandonment or withdrawal, the Contractor shall have a period of one (1) year from the time of cessation within which to remove its improvements; otherwise, all social infrastructures and facilities shall be turned over or donated tax free to the proper govemment authorities, national or local, to ensure that said infrastructures and facilities are continuously maintained and utilized by the host and neighboring communities. SECT10N X蝖 E蝗 IPLOYDIIENT AND TRAINING OF P蝕 ILIPPINE PERSONNEL prepare Government, and undertake an extensive training programme suitable to Filipino nationals in all levels of employment. The objective of said programme shall be to reach within the time table set forth below the following targets of "Filipinization" . Unskilled (%) Skilled (o/o) Clerical (%) Professional (%) Management (%) 艕 腂 Year 100 1 100 100 100 艕 腂 Year 3 100 100100 100 艕 艏 Year 5 100 100100 100 艕 艏 Year 7 100 100100 100 艏 艏 艕 腂 Year 10 100100 100 艏艏 艕 腂 Year 15 100 100 100 13.2 Cost and expenses of training such Filipino personnel and the Contractor's own 詤 employees shall be included in the Operating Expenses. 腟 The Contractor shall not discriminate on the basis of gender and shall respect the right of women workers to participate in policy and decision-making processes affecting their rights and benefits. SECT10N X蝗 ARBIRT10N The 15.1 This Agreement may be suspended for failure of the Contractor: (a) to comply with any provision or requirement of the Act and./or its implementing rules and regulations; (b) to pay taxes, fees and/or other charges demandable and due the Government 15.2 This Agreement terminates or may be terminated for the following causes. (a) expiration of its term, whether original or renewal; (b) withdrawal from the Agreement by the Contractor; (c) violation by the Contractor of the Agreement,s terms ald conditions; (d) failure to pay t.xes, fees/or charges or financial obligations for two (2) consecutive years, (e) false statement or omission of facts by the Contractor; and (I) any other cause or reason provided under the Act and its implementing rules and regulations, or any other relevant laws and regulations. 15.3 All statements made in this Agreement shall be considered as conditions and essential parts hereo{ and any falsehood in said statements or omission of facts which may alter, change or affect substantially the fact set forth in said statements shall be a ground for its revocation and termination. 15.4 The Contractor may, by giving due notice at any time during the term of this Agreement, apply for its cancellation due to causes which, in the opinion of the Contractor, render continued mining operation no longer feasible or viable. In \! this case, the Secretary shall decide on the application within thirty (30) days from notice. Provided, That the Contractor has met all the financial, fiscal and legal obligations. No delay or omissions or cours€ of dealing by the Government shall impair any of its rights under this Agreement, except in the case of a written waiver. The Govemment's right to seek recourse and relief by all other means shall not be construed as a waiver of any succeeding or other default unless the contrary ion is reduced in writing and signed by the party authorized to exercise the walver 15.6 In case of termination, the contractor shall pay all the fees and other liabilities due up to the end of the year in which the termination becomes effective. The Contractor shall immediately carry out the restoration of the Contract Area in accordance with good mining industry practice. 15.7 The withdrawal by the contractor from the Mineral Agreement shall not release it from any and all financial, environmental, legal and fiscal obligations under this Agreement; 15.8 The following acts or omission, inter olia shall constitute breach of contract upon which the Government may exercise its right to terminate the Agreement: a) Failure of the Contractor without valid reason to conrmence Commercial Production within the period prescribed; and b) Failure ofthe contractor to conduct mining operations and other activities in accordance with the approved Work programs and./or aly modification 腨 thereof as approved by the Director. 艏 The Government may suspend and cancel tax incentives and credits if the 腜 --+L 莁 芒 芌 芌 ,.1 SECTION XVI OTHER PROVISIONS 16. 1 Any terms and conditions resulting fiom repeal or amendment of any existing laws or regulations or from the enactment of a law, regulation or administrative order shall be considered a part ofthis Agreement. 16.2 Notice All notices, demands and other communications required or permitted hereunder shall be made in writing, telex or telecopy and shall be deemed to have been duly given notice, in the case oftelex or telecopy, if answered back or confirmation received, or if delivered by hand, upon receipt or ten days after being deposited in the mail, airmail postage prepaid and addressed as follows: Ifto the Government. , ffi SECRETARY ' \ Department of Environment and Natural Resources \ Oervn Building , Visayas Avenue ,' Diliman. Quezon City \l N--.--/ Ilto the Contractor : \ \ THE PRESIDENT TITE PRESIDENT \ngay-Malobago Mines, Inc. Rapu-Rapu Mnerals, Inc. JiKC Center, 3'd Floor Suite z:,- Legaspi Suites, 178 Salcedo St. 2155 Pasong Tamo, Makati City; Legaspi Village, Makati City and Either party may substitute or change such address on notice thereof to the other party, 16.3 Governing Law This Agreement and the relation between the parties hereto shall be govemed by and construed in accordance with the laws of the Republic of the philippines. The Contractor hereby agrees and obliges itself to comply with the provisions of the Act, its implementing rules and regulations and other relevant laws and regulations. 16.4 Suspension of Obligation 膨 Any failure or delay on the part of any party in performance the of its 荞 obligation or duties hereunder shall be excused to the extent attributable to Force Majeure. f 19 b) If Mning Operations are delayed, curtailed or prevented by such Force Maieure causes, then the time for enjoying the rights and carrying out the obligations thereby affected, the term of this Agreement and all rights and obligations hereunder shall be extended for a period equal to the period involved. c) The Party, whose ability to perfiorm its obligations is affected by such Force Majeure causes, shall promptly give Notice to the other in writing of any such delay or failure of performance, the expected duration thereof and its anticipated effect and shall use its efforts to remedy such delay, except that neither Party shall be under any obligation to settle a labor dispute. 16.5 Amendments This Agreement shall not be annulled, amended or modified in any respect except by mutual consent in writing of the herein parties. IN WITNESS W蝕 鑇 , ACKNOWLEDGPIENT Republic ofthe Philippines) 腂 鑝 閨 Ciib膋n)SS 荓 Before me,al鉐 腵 膪 V 裪