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REPUBLIC OP LIBERIA
MONTSERRADO COUNTY
IRON ORE APPRAISAL AND EXPLORATION AGREEMENT
FOR THE PUTU RANGE
BETWEEN
THE REPUBLIC OF LIBERIA
AND
MANO RIVER IRON ORE (LIBERIA) INC.
THIS IRON ORE APPRAISAL AND EXPLORATION AGREEMENT FOR THE P
UTU RANGE s entered into, by and between the REPUBLIC OF LIBERIA through
its Government represented by Jonathan A Mason. Minister. Ministry ol Lands
Mines & Erv'rgy (here.natter referred to as the "Government-)
AND
Mano Rivoi Iron Oro (Liberia) Inc., ci corporntion existing and doing business undor
the laws of .iberia represented by Dr Tom Elder, its President (hereinafter referred
to as the -Operator), hereby
WITNESSETH:
WHEREAS title to Minerals within the territory of the Republic of Liberia is vested in
the Republic of Liberia (the Republic) and all rights related to the exploration for and
exploitation of such minerals pertain exclusively to the Republic; and
WHEREAS, the Ministry of Lands, Mines & Energy through the Minister of
Lands. Mints & Energy is by lav/ charged with the responsibility of administering the
mineral laws of the Republic and in that process to ensure the efficient development
of the mining industry; and
WHEREAS, the Government is determined to accelerate the development of the
mining industry of Liberia and therefore desires to promote the Development of
minerals which may exist in exploration areas for the economic and social benefit of
Liberia and recognizes that a large capital expenditure is necessary to ensure that
such mirercls are economically and efficiently developed; and
WHEREAS. Government agrees to grant the Operator such mineral rights and
privileges ii consideration of the undertaking by the Operator to make annual
payments.; nd to pay rents, royalties and other fees hereinafter prescribed and to
perform anc observe the terms and conditions of this agreement;
NOW. THEREFORE, for and in consideration of the premises, the mutual
promises e; changed between the parties hereto (the Parties), terms and conditions
herem conb ined. the Parties hereto mutually agree as follows'
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SECTION 1.0 DEFINITIONS
Unless the context shall otherwise clearly indicate, the following
terms wherever used in this Agreement shall have the
respective meanings set forth below:
1.1 Affiliate: Means an entity that controls, is controlled by or
is under common control of the Operator For purposes of
this section, control means tho possession, directly or
indirectly, by one entity of more than fifty percent (50%) of
the equity of or the voting power of another entity.
1.2 Centro: the term ‘Centre'1 means the International Centre
for Settlement of Investment Disputes established under
the auspices of the International Bank for Reconstruction
and Development.
1.3 Convention: the term •'Convention’ moans the
Convention on the Settlement of Investment Disputes
between States and Nationals of Other States opened to
signature at Washington. DC. United States of America
on March 18. 1S65,
1.4 Effoctivo Date. The term "Effective Date" means the
date, provided in Section 26. on which this Agreement
shall become effective
1.5 Exploration Area The term “Exploration Area" means at
any particular time the area or areas then designated in
accordance with Section 3.2. but only during the
Exploration Period.
1.6 Exploration Period: The term "Exploration Period"
means the period described in Section 2 1
1.7 Government The term "Government" includes an of the
branches, divisions nstrumenta: ties and agences of the
Government of the Republic of Libena
1.8 Infrastructure The term "infrastructure means assets of
the Wtowing types
(a) Immovable transportation and communication facilities
(including roads bridges, railroads, airports, landing
strips and land mg pads tor aircraft hangars and other
airport facilities, garages, channels, tramways,
pipelines and radio, telephone, telegraph.
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telecommunications, and electronic or other forms of
communications facilities);
(b) immovable pon facilities (including docks, harbors,
piers, jetties, breakwaters, terminal facilities and
warehouses, and loading arc unload r. ; fa: ' es
(c) Immovable power, water anc sewerage facilities
(including electrical generating plants and
transmission lines, dams, water drams, water
supply systems and Systems for disposing of
tailings, plant waste and sewage);
(d) Immovable public welfare facilities (including
schools, hospitals and public halls);
(e) Miscellaneous immovable facilities used primarily
in connection with the operation of other facilities
(including offices, machine shops, foundries, repair
shops and warehouses), and.
(0 Movable facilities and equipment affixed to and
used as an integral part of the immovable facilities
described in paragraphs (a) through (e)
1.9 Operations and Activities The term "Operations
Activities" means the appraisal and exploration mining
and management operations of Mano River Iron Ore
(Liberia) Inc.
1.10 Operator; The term “Operator" means Mano River Iron
Ore (Liberia) Inc.
1.11 Plant and Equipment; The term “Plant and Equipment"
means the following assets (other than infrastructure)
used for Operations and Activities:
(a) Movable and immovable facilities and equipment
to mine, crush, sluice, dredge, wash, screen, dry.
benefkaate. and otherwise explore for or produce
Iron Ore;
(b) Movable and immovable fac ities and equipment
used primariy in connection with the operation of
the foregoing (including offices, machine shops
foundries repair shops and warehouses);
(c) Movable and immovable facilities and equip
for the maintenance of personnel (inch
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dwellings, stores, mess halls and rocroational
facilities); and
(d) Movable facilities and equipment used in
connection with any of the infrastructure
1.14 Produce The term ’Produce" as used in reference to
Iron Ore deposit shall include drill, develop, extract, strip,
mine, sluice, dredge, process (including beneficiate.
concentrate or otherwise treat), stockpile, transport, load,
sell and export, for the account of the operator
1.15 Production The term 'Production" as used n reference
to Iron Ore shall mean the commercial exploitation of Iron
Ore found in the Exploration Area and all activities in
respect of or incidental thereto, including the design,
construction, installation, fabrication, operation,
maintenance, drilling, development, extraction, stripping,
mining, sluicing, dredging, processing (including
fceneficiation. concentration or other treatment),
stockpiling transportation, loading, sale and exportation
by the Operator
SECTION 2 0 TERM OF THE AGREEMENT
2.1 The term of this Agreement shall commence on the
Effective Date and snail expire af the earlier of (a) such
time as the Operator shall have completed exploration
activities and resource evaluation, or (b) three (3) years
after the Effective Date, with an extension of two (2)
years at the option of the Operator plus any period of
renewal to which the Government may agree
SECTION 3.0 EXPLORATION RIGHTS
3.1 Grant of Exploration Rights: On the terms and
conditions herein provided the Government hereby grants
to the operator, during the period hereinafter defined,
commencing with the Effective Date plus any extension of
such period to which the Government may agree
(referred to herein as the "Exploration Period’) the
exclusive right to explore for Iron Ore Deposits and
appraise the existing Iron Ore deposits in the Exploration
Area
3.2 Exploration Area:
(a) The Exploration area shall he in the Putu Ranpe
Area. Grand Gedeh County, as identified on ti
attached map. with metes and bounds
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coordinates attached hereto as Appendix "A” and
covering an area of 105.019 acres.
(b) The Operator shall commence exploration as soon
as possible after the Effective Date but not later
than 180 days after the Effective Date.
3.3 Surrender of Exploration Area. Unless the Minister and
the Operator otherwise agree
(a) At or before the end of the initial term of the
Exploration Period, the Operator shall surrender a
minimum of fifty percent (50%) of the Original
exploration area
(b) At or before the end of the term of this agreement
as set out in section 2.1 above, the Operator shall
surrender the remainder of the Exploration Area
and. upon such surrender, the Exploration License
shall automatically terminate
(c) Notwithstanding paragraphs 3.3 (b) above, if the
Operator wishes to retain alt of. or any part of. the
Exploration area upon expiry of the exploration
period, it shaH have the right to do so by applying
for a mineral development agreement over the
area
3.4 Minimum Expenditures
(a) Commencing no later than six (6) months after the
Effective Date, the Operator shall diligently and without
interruption explore for and evaluate Iron Ore deposits
within the Exploration Area.
(b) During the Exploration Period, the Operator shall expend
not less than United States Dollars one (US$1.00) per
acre during each calendar year as Exploration Costs, the
latter being defined to comprise all of the Operator's
managerial and corporate costs related to exploration.
SECTION 4.0 Pilot Mining Rights
The Operator, in addition to exploration, is hereby also granted
the right to produce Iron Ore under a pilot mining plan to be
approved by the M nistor of Lands. Mines and Energy, such total
production not to exceed not to exceed 5000 metric tones.
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SECTION 5 0 Mineral Development Agreement
Dunng or by the expiry of the Exploration Penod. the Operator
may apply for a Mineral Development Agreement This
agreement that be concluded in accordance with the Minerals
and Mmrtg La** and Regulations of Libera
SECTION 6 0 INCIDENTAL RIGHTS
6.1 Grant of Right* Subject to the terms and conditions
herein provided, and solely for the purposes incidental to
the exercise of the rights granted to the Operator under
Sections 3 and 4 of this Agreement, the Government
hereby grants to the Operator the right, within the
Exploration Areas
(a) To acquire, build, and construct Infrastructure. Plant
and Equipment, and other facilities, and to
maintain and operate the same.
(b) To removo, extract and use. solely for its own
exploration purpose, free of tax or other charge or
fee imposed by the Government, any water,
gravel, sand. clay, stone and timber (except
protected fauna and flora); provided however, that
where any land, villages, houses, person, or
watering places for animals have been supplied
water by nght through custom the Operator sha:
not deprive them of a constant and reasonably
supply of usable water, nor shaB the Operator,
without the Government's consent, interfere with
any water or other rights enjoyed by anyone under
any agreement w th the Government
6.2 Reservation of Rights The Government reserves the
right, subject to section 7.2. on reasonable notice to and
after consultation with, the Operator, to construct roads,
highways, railroads, telegraph and telephone lines and
other bnes of communication within the Expiorat on Area
6.3 Condemnation; If the use of any pnvately owned or
occupied property within the Exploration Area is
reasonably required for the conduct of operations
hereunder, and the Operator is unaWe to come to an
agreement with the owner or occupant of such property
for such use. the Operator may request the Government
wh.ch request snail not be unreasonably denied, to
exerase its nght of eminent domain with respect to such
property The Operator shall reimburse the Government J
for any compensation paid or payable to the private Y
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owner or occupant as a result of the Government s
exerc se of such right
SECTION 7 0 INFRASTRUCTURE
7.1 Construction by Operator: The Operator shall, at its
own cost, undertake the construction insta ation and
improvement of all or any part of the infrastructure. All
such Infrastructure shall be maintained and operated by
the Operator in a reasonably good manner
7.2 The Government warrants not exercising its rights to
expropriate land in the Exploration Area if such
expropriation shaB in any way hinder the development of
the Operation and Activities.
SECTION 8 0 CONDUCT OF OPERATIONS
8.1 Best Exploration Practices The Operator shall conduct
all of its operations hereunder using appropriate modern
and effective Plant and Equipment. Infrastructure,
materials and methods. Such operations shall be
conducted in a proper and workmanlike manner, with due
diligence, efficiency and economy, in accordance with the
lav/s of Liberia and with the best mining and engineering
practices used by efficient operators in similar operations
elsewhere in the world
SECTION 9 0 HEALTH AND SAFETY
The Operator shall install, maintain and use modern health and
safety devices and shall practice modern health and safety
procedures and precautions (including, regular safety training
instruction for its employees) as are in accordance with the best
exploration and mining engineering practices, and acceptable
labor safety standard In this respect, the Operator shall comply
with health and safety rules, regulations, and Laws of the
Government.
SECTION U.O EMPLOYMENT, TRAINING AND SECONDMENT
10.1 Employment of Liberians: The Operator shall not
employ foreign unskilled labor. To the maximum extent
feasible, the Operator shall employ Liberian citizens at all
levels.
10.2 Training of Liberians: The Operator shall provide on a
continuing basis for the training of its Liberian employees,
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in ordor to qualify them for skilled, technical
administrative and managerial positions
10.3 At least two (2) professionals from the Ministry shall be
seconded to the Operator’s operations at the expense of
the Operator, provided that the Operator will be entitled to
utilize these two professionals at other operations in
Liberia at its discretion
CONSERVATION
SECTION 11.0
11.1 The Operator shall encourage economic and social
development during the term of his operation and shall
provido for meetings on a regular basis between
representatives of the Operator and the local
communities for the purposes of considering and making
recommendations to the Operator and to the Government
with respect to matters of community interest, such that it
shall not hinder the Operator's work
11.2 Natural Resources: The Operator shall take preventive,
corrective and/or restorative measures to ensure that all
streams and water bodies within or bordering Liberia, alt
dry land surfaces, and the almosphoro be protected from
pollution, contamination or damage resulting from
Operations hereunder.
11.3 Environmental Impact Statement The parties
recognize that Operations may result in some pollution,
contamination or other environmental damage to land,
water and tho atmosphere within the contract area anc
elsewhere Accordingly the Operator shall submit to tho
Minister. Lands Mines and Energy, on the
commencement of exploration and production an
Environmental Impact Statement (EIS). The E)S shall
show the adverse effects operations will have on the
environment and review plans to mitigate such effects.
SECTION 12.0 ADEQUATE CAPITAL AND STOCK OWNERSHIP
The Operator shall provido all capital necessary for the offoctivo
exploration for Iron Ore In this connection, the Operator shall at
all times maintain a reasonable and prudent capital structure.
SECTION 13.0 TAXATION
13.1 In Gonoral The Operator shall be liable to all taxes, fees, y
duties, excises, and other charges imposed by Liberian y
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Laws of general application, except as may be otherwise
provided by other laws and administrative regulations
granting exemptions from customs duties and excise
taxes
13.2 Income Tax The Operator shall be subject to Liberian
Income Tax Law of General Application, except that
notwithstanding any provisions of such laws, the rate of
tax applicable lo all the taxable income of ihe Operator
shall be thirty percent (30%)
SECTION 14.0 Exploration Fees and Surfaco Rontal
14.1 The Operator shall mako an annual payment of Fifteen
Thousand United States Dollars (US$15,000 OO) for the
grant or renewal of the Exploration and Resource
Appraisal License
Operator shall make an annual payment of Thirty
United States Cents (US$0.30) per acre for land in
exploration and Five United States Dollars (US$5.00) per
acre for land under pilot mining.
14.3 The first payment for the exploration license fee and
surface rental shall bo made In within ton (10) days of the
Effective Date Subsequent payments shall be made
within thirty (30) days after each subsequent anniversary
of the Effective Date.
SECTION 15.0 RECORDS. REPORTS. AND INSPECTION
15.1 Availability of Rocords The Operator shall maintain at
its principal office m Liberia, or at such other office as the
Government moy approve
(a) Copies of all maps, geological, mining, or other
earth science reports and mineral analysis
(together with all field data which supports such
reports or data), production records, marketing
report and any other data obtained or compiled by
the Operator os a result of mining Operations and
Activities All Information, data and material
specified in this paragraph shall be in a form
suitable for reproduction, use or processing as the
case may be The Operator shall have the right to
temporarily remove such samples and other data
from such location and (on prior notice to the
I0
Government) from Liberia for the purpose of study
and evaluation.
(D) The Operator shall keep the Government fully
informed of all Operations and Activities, wherever
conducted, and of its plans in respect thereof The
Government shall have the right to monitor
exploration and pilot mining operations and
Activities from time to time and a reasonable
number of Government personnel may. upon prior
notice to the Operator, at reasonable times and
subject to compliance with the Operator's health,
safety and security requirements, attend and
inspect Mining Operations and Activities
conductod in Liberia.
(c) Within thirty (30) days after the end of each
calendar quarter, the Operator shall provide the
Government with a report on all Operations and
Activities for that calendar quarter including
Minerals recovered and sold. Within ninety (90)
days after the end of each Financial Year, the
Operator shall furnish the Government with a
report on all Mining Operations for that Financial
Year, including Minerals recovered and sold
15.3 Reports: The Operator shall submit such reports to the
Government, in such form, in such detail, and at such
time, as may be reasonably required by law. or as the
Government may otherwise require with respect to
exploration, production, employment and training,
marketing and such other matters as may be related to
the conduct of operations hereunder
15.4 Inspection. The Government may. upon reasonable
notification to the Operator, inspect the books and
records of the Operator, and any all facilities and area
related to the Operator's operation as provided
hereunder The Operator shall make its appropriate
employee available to render assistance with respect to
any such inspection.
15.5 Confidentiality of Operator's Report* The Government
shall treat all information supplied by the Operator
hereunder as confidential and shall not reveal such
information to a third parly without the prior written
consent of the Operator, which consent shall not be
unreasonably withheld
II
Financial information about the Operator shall however
be treated as confidential for a period of one (1) year,
commencing as of the date of submission of such
information. The Government may nevertheless use any
such information received from the Operator for the
purpose of preparing and publishing general records or
statistics on natural resources or other conditions in
Liberia, and in connection win any dispute between :ne
Government and the Operator.
SECTION 16.0 NON-ASSIGNABILITY
This Agreement and any interest therein may not be transferred
or assigned, or mortgaged, pledged or otherwise encumbered,
in whole or in part, without the Government’s prior written
approval {which approval will not unreasonably bo withheld)
unless to an affiliate.
SECTION 17.0 FORCE MAJEURE
17,1 Except as provided in this Section, failure on the part of
the Operator to comply with any of the conditions hereof
(except the obligation to make payment of inonios to the
Government as provided in Section 14 he roof) shall not
be grounds for cancellation or give the Government any
claim for damages insofar as such fa.lure arises from
force majeure. if the Operator has taken all appropriate
precautions, due care and reasonable alternative
measures with the objectrve of avoiding such failure and
of carrying out its obligations hereunder. The Operator
shall take all reasonable measures to cure such failure
and to fulfill the terms and conditions hereof with a
minimum of delay
The Operator shall notify the Government within sixty (60)
days of an event of force majeure affecting its ability to
fulfill the terms and conditions hereof or any event, which
may endanger the natural resources of Liberia and
similarly notify the Government of efforts being made to
restore normal conditions within seven (7) days thereof
For purpose of this Section 17. force majeure includes an
act of God. war. insurrection, civil commotion, not. revolt,
earthquake, storm, flood or any other extraordinary event
which the Operator could not reasonably be expected to
prevent or control, but shall not include any event caused
by a failure to observe the best mining and engineering
practices or by the negligence of the Operator or any of
its employees or contractors If; as a consequence of
force majeure, operations hereunder remain in
substantially total suspension for an uninterrupted pe
of more than three (3) months, the duration of tho term of
this Agreement shall be extended by the timo of such
suspensions.
17.2 Except as hereinafter provided. the time for the
performance of any obligation (except the obi.gation to
make payment of money) of the Operato' under or arising
out of this Agreement, which performance is hindered,
prevented or delayed by force majeure. as well as any
other time periods and dates set forth in this Agreement,
shall be extended by the period of delay, but not longer
than the continuance thereof and such additional period
as may be reasonable in the circumstances and the
Operator shall not be liable in damages or otherwise to
the other nor shall any action, daim or demand be taken
or made against the Operator by reason solely of such
delay in the performance of such obligation
17.3 The Operator shall use all reasonable diligence to
remove the cause of the force majeure as quickly as
practicable after notice of the same shall have come to its
attention, save and except that this provision shall not. in
and of itself require the Operator to settle any stnke.
lockout, ban "go slow" activity, stoppage restraint of labor
or other similar ("Industrial Dispute")
SECTION 8: FINANCIAL REPORTING AND CURRENCY
18.1 Accounting. All of the Operator’s accounting under this
Agreement shall be in United States Dollars and all
amounts paid or received, and obligations incurred or
transactions carried out. in currency that is legal tender in
the Republic or in any Foreign Currency other than
United States Dollars shall be convened to United States
Dollars in accordance with and pursuant to generally
internationally accepted accounting principles (except to
the extent inconsistent with the terms of this Agreement)
based upon the Prevailing Market Rate of Exchange of
United States Dollars and any such currency at the date
of the applicable transaction
18.2 Exchange Control. Tho Operator shall at an times have
tho right, without restriction, directly or indirectly, of the
Government, to obtain, hold, deal with and disburse funds
in such manner, currencies and places as it chooses
Wthout prejudice to the generality of the foregoing, the
Operator shall have the unrestricted and unencumbered
right to sell and receive payment for Minerals
currency including the currency in which the Mint
sold, and all proceeds there from may be deposited in
bank accounts outside of the Republic and hold there or
remitted there from to anywhere in the world,
in any currency. Notwithstanding the foregoing, the
Operator shall maintain at least one bank account with a
bank or financial institution in the Republic of Liberia.
The Operator shall also have the right to acquire from,
and sell to. any Person currency that is legal tender in the
Republic at the Prevailing Market Rate of Exchange.
Additionally, any and all transactions between the
Government and the Operator dealing with or referring to
currency that >s legal tender in the Republic will bo
converted to United States Dollars at the Prevailing
Markot Rate of Exchange on the date of such transaction.
Currency gains or lossos for purposes of Section 20 shall
be determined by reference to the Prevailing Market Rate
of Exchange.
18.3 Curroncy of Payment. Payment of the Operator's direct
obligations to the Government for Taxes and Duties
payablo under Sections 10. 19. 20. and 21 of this
Agreement shall be in United States Dollars, unless the
Parties otherwise agree. Any obligation originally stated
in currency that is legal tender m the Republic, or in any
currency other than United States Dollars, will be
convened to United States Dollars at the Prevailing
Market Rate of Exchange on the date such obligation is
paid, or shall fail due. whichever is earlier
However, the Operator shall make payments of sums it
collects on behalf of the Government, including, but not
Smiled to. taxes withheld from the salaries or wages of
the employees of the Operator, and any other s-ms
payable to other Persons from which a portion is required
by Law to be withheld or retained by the Operator on
behalf of the Government, in the currency in which such
salaries or wages or such other sums are collected The
Operator shall have the right to make all other payments
whether to the Government or to other Persons in
currency that is legal tender in the Republic
18.4 Right to Remit and Receive Payments. The Operator
shall have the right to remit and receive in United States
Dollars all payments of dividends, interest, principal and
other properly payable items arising from, as a result of.
or related to Operations, and to do so free of Taxes and
Duties on such remittances or receipts, and without
penalties, any required total or partial surrender!
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exchange or confiscation of such United States Dollars,
or other direct or indirect restrictions on such remittances
or receipts
18.5 Audit.
a. The Operator shall cause its books of accounts to
be audited within three (3) months, or such longer
period of time as the Minister may approve, after
the close of each Financial or Fiscal Year by an
internationally recognized independent auditor
selected by the Operator and satisfactory to the
Government and a copy of the annual financial
statement duly certified by said auditor shall be
furnished to the Government within twenty (20)
days after its receipt by the Operator. The
foregoing shall not, in any way. imply acceptance
of any such audit or certification by the
Government, or preclude the Government from
auditing such books of accounts but at the
Government's expense
b. The foregoing shall not in any way imply
acceptance of any such audit or certification by the
Government or preclude the Government from
auditing such books of accounts at its own
expense and as provided under Law. provided that
the Government shall provide the Operator with a
copy of any such audit within forty five (45) days of
receipt However, once either the Government or
the Operator has audited any book of accounts,
the financial statement thus audited shall be
considered acceptable and the audit results
binding and conclusive as to its findings, unless a
Party shall have indicated to I'ne contrary within
ninety (90) days after its receipt of a copy of the
audited financial statement
c. If the Operator has, pursuant to this Agreement,
underpaid its liability for Taxes and Duties, the
Government may. subject to the Revenue and
Finance Law. assess interest and penalties but not
to exceed the London Interbank Offering Rate
(LlSOR) existing at the time of such assessment,
plus one (1) percentage point, multiplied by the
amount underpaid. If LIBOR should cease to be
reported, then the rate to be applied sf
another agreed substitute rate. If *.he Opera
overpaid its liability for Taxes and Duties tl
I5
its option, it may elect either to be reimbursed by
tho Government or to apply such overpayment
against future Taxes and Duties.
Republic is required, the Operator will cooperate to
provide the Government with copies of the
information, books and records needed to
complete the audit. If the Government
nonetheless deems it necessary for any part of
such audit to be performed outside of the
Republic, the cost of associated travel will be
borne by the Government.
SECTION 19: INCIDENTAL RIGHTS
19.1 Imports.
The Operator shall be entitled to import and use in respect
of Operations, and subsequently export, any and all
machinery, equipment, consumable items, fuels,
explosives and any other thing whatsoever reasonably
required with respect to Operations and in accordance
with the terms of this Agreement, provided, however, that
the Operator shall not re-export fuels and explosives
surplus to requirements if such surplus can be sold at
competitive international prices v. thin the RepuoiiC The
Operator shall at all time comply with Law regarding the
safe use, sale, disposal and security of explosives
19.2 Taxes on Resale. The Operator may sell, in the Republic,
all importod items that are no longer needed for
Operations However, if such imports were exempted
from Taxes and Duties, the Operator shall fulfill all
formalities required in connection with the payment by the
purchaser of alt Taxes and Duties on the depreciated
value of the imports imposed on such sales by Law
SECTION 20: ASSIGNMENT AND ENCUMBRANCE
20.1 Right of Assignment. The Operator shall have the right
to assign or otherwise dispose of all or part of its interest
under Ihis Agreement with the prior written consent of the
Government (which consent shall not be unreasonably
withheld) provided, however, that such consent shall not
be required in the case of an assignment or other
disposition to an Affiliate in which latter event the
Operator shall no: be relieved of its obligations under this
Agreement other than to the extent fulfilled by the
Affiliate. However, any request to cede or assign any
rights to a joint venture partner, will be fully allowed and
any assignment that is legally required to protect the
mterost of the joint-venture partner will be accepted
20.2 Right to Encumbor. The Operator shall have the right to
mortgage, charge or otherwise encumber all or part of «ls
merest under this Agreement for the purpose of raising,
from one or more Affiliates or third parties, f^anong for
its oWigabons under this Agreement
20.3 Notice of Assignment or Encumbrance. The Operator
shall promptly give Notice to the Minister of any
assignment, mortgage, charge or other disposition or
encumbrance pursuant to this Section 20
SECTION 21: TERMINATION
21.1 Termination by tho Operator. During the Exploration
Period, the Operator may surrender by not less than sixty
(60) days notice to the Government, all its fights
hereunder in respect of all or any part of the Exploration
Area, and the Operator shall be relieved of all obligations
m respect of area so surrendered except those
obligations that may have accrued prior to tho Effective
Date of. or arising out of or related to the surrender
21.2 Termination by the Government. Subject to the
provisions of Section 21. the Government shall have tne
right to terminate this Agreement if any of the following
events (hereinafter called "Events of Default") shall occur
and be conbnUng
a) where the Operator shal fail to make any
of the payments described in this Agreement on
the due payment date, and such default is not
cured within thirty (30) days after notice by the
Government (or within such longer period as may
be specified in said notice).
b) where the Operator shall materially fail to comply
with its-obligations or any other conditions undor
this Agreement and such fai ure shall have a
materially adverse effect on the Government and
is not cured within ninety (90) days after notice by
the Government or with uch period as may be
specified in said notice;
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c) wher© the Operator snai! (i) voluntarily dissolve,
liquidate or wind up its affairs, or make an
assignment of all or substantially all of ts assets
for the benefit of creditors other than an
assignment made to secure indebtedness incurred
in the ordinary course of business, (ii) file a petition
or application to any tribunal for the appontment of
a trustee or receiver lor all or any substantial part
of the Operator's assets. (iii) commence any
proceedings for its bankruptcy reorganization
arrangement, insolvency or readjustment of debt
under the laws of any jurisdiction, whether now or
hereafter in effect, or if any such petition or
application is filed, or any such proceedings are
commenced against it. shall indicate its approval
thereof, consent thereto or acquiescence therein,
or (iv) if any order is ontered appointing any such
trustee or receiver, or adjudicating the Operator
bankrupt or insolvent, or approving the petition in
any such proceedings, and provided that the
Operator shall fail to take corrective measure(s) to
have such order removed or i-fted within sixty (60)
days
d) where the Operator shall fail to carry out
Exploration as required by Section 3. cease
Exploration for a period of twelve (12) consecutive
months or cease Production with respect to all
Production Areas for a period of twenty four (24)
consecutive months unless such failure or
cessation is consented to by the Government or is
caused by a state of force mojeure in particular
relating to security issues preventing safe access
to the Exploration or Production Areas.
21.3 Opportunity to Cure. In the case of an alleged Event of
Default described in Section 21.2, the Government,
before taking any further action, shall provide Notice to
the Operator of the alleged occurrence of such Event of
Default and of the Government’s views in that regard and
shall offer the Operator a fair opportunity to consul! with
the Government to resolve the matter. If. after a
reasonable period of time of consultation, the
Government is of the reasonable opinion that the matter
cannot bo resolved by further consultation, the
Government may then send to the Operator Notice of the
Government’s intention to terminate this Agreement. If
the Event of Default is not cured within sixty (60)
after said Notice, or within such longer period as
18
nocessory to allow a reasonable period of time to effect
such cure, then this Agreement shall be terminated
21.4 Disputes Regarding Events of Default.
Notwithstanding the provisions of Sections 21.2 and 21.3.
if the Operator disputes whether there has been an Event
of Default described in Section 21.2 and. within sixty (60)
days after receipt by the Operator of the Government's
Notice of its intention to terminate, refers such dispute to
arbitration in accordance with Section 22. then
termination of this Agreement shall not take effect until
the finality of, and in accordance with, an arbitration
award upholding the Government's right to terminate.
SECTION 22: ARBITRATION
22.1 Submission to Arbitration. Any dispute between the
Government and the Operator arising out of, in relation to
or in connection with this Agreement or its formation, or the
validity, interpretation, performance, termination,
enforceability or breach of this Agreement (including any
dispute concerning whether the Government or the
Operator has violated or is in breach of this Agreement or
of any Law affecting the rights, obligations or duties of any
Party under this Agreement), for wh solution by
submission to an expert s not specifically provided
elsewhere in this Agreement shall be exclusively and finally
settled by binding arbitrate pursuant to the Convention in
accordance with tho rules of the Centre in effect on the
Effective Date except to the extent in conflict with this
Section 22 which shall prevail in that event
The Parties agree that this Agreement and thu Operator’s
Operations pursuant thereto constitute an "investment" by
reason of the expenditure of a considerable amount of
money in the Republic and that for purposes of
Article 25(1) of the Convention, any dispute subject to this
Section 22 is a legal dispute arising directly out of an
investment Either of the Parties to such dispute may
institute arbitration proceedings by giving Notice to tho
other Party ond Notice to the Secretary-General of the
Centre including in each a statement of the issues in
dispute.
22.2 Nationality for Purposes of Arbitration. The Operator is
incorporated in Liberia.
22.3 Arbitrators. Any arbitral tribunal constituted pursuai
this Agreemont shall consist of one (1) arbitrator tc
19
appointed by the Government, one (1) arbitrator to bo
appointed by Operator and one (1) arbitrator, who shall bo
the president of the tribunal and shall be a citizen neither of
the Republic nor of the United States of America (or of any
other state of which a Party is a notional under Section
22.2). to be appointed by the Secretary-General of the
Centre. No such arbitrator shall have an interest in the
mattors in dispute.
22.4 Roforoe. At the request of a Party, any matter otherwise
subjoct to arbitration under this Agreement shall instead be
referred for resolution to a single referee to be appointed by
the Secretary-General of the Centre, or of any successor
entity as provided for by Section 22.10 below, except for
any dispute arising out of or related to Sections 3. 4. 5. 6.
20, 21. 23, of this Agreement, which must be referred to
arbitrators appointed pursuant to Section 22 3 above
unless the Parties jointly agree that any such dispute is not
material, in which event it may be referred to the reioree for
decision at the option of either party.
The decision of the referee shall be rendered pursuant to
Section 22.6 of this Agreement (except as regards the
requirement for a decision by majority vote) and shall bo
final and binding unless appealed by any Party to
arbitrators appointed as provided in this Section 22 4. wro
shall examine the referee's decision only as to manifest
error of law findings of fact that are not supported by any
credible evidence and abuse of authority, misconduct or
other unauthorized act by the referee
22.5 Venue. Arbitration proceedings conducted pursuant to this
Agreement shall be held in Washington. D C or such other
place as the Parties may agree and shall be conducted m
the English language. The costs of the proceedings shall
be assessed and borne in such manner as the arbitral
tribunal shall decide. Any procedural issues that cannot be
determined under the arbitral rules of the Centre shall be
determined pursuant to applicable law as set forth below.
22.6 Award. The arbitrators shal. by majority vote, render a
written decision stating the reasons for their award within
three (3) months after any hearing conducted has been
concluded Any monetary award sha be assessed and
payable in Dollars (determined at the Prevailing Market
Rate of Exchange as of the date of the award if the award
involved an obligation expressed in any currency other than
Dollars) through a bank designated by the recipient, and in
the case of an award to the Operator, shall be exempt from
any Taxes and Duties imposed by Government
20
Party shall Dear its own costs and attorney fees Nether
Party shall have any liability for e ther consequential
damages (except for purposes of sot off) a oumpiary cr
punitive damages, but interest at a rate not to oxcood the
London Inter-bank Offering Rate (LIBOR) existing at the
time of such award, plus one (1) percentage point,
multiplied by the amount of the award, shall be assessed
from the date of any monetary award until its satisfaction
If LIBOR should cease to be reported, then the rate to be
applied shall be another substitute rote agreed to by a
majority of the arbitrators. In any case, the liability of the
Operator shall be limited to the net book value of its
investment in the Republic at the time of the award,
If the decision of the arbitral tribunal is odvorso to the
Operator, then the arbitral tribunal may. in its discretion,
specify a reasonable period of grace to cure any defect or
default on the part of the Operator, provided that such
period of grace shall not exceed one hundred eighty (180)
days for the making of any payment required by such
award
22.7 Waivor of Sovereign Immunity. The Government heroby
irrevocably waives all claims of immunity from the
Arbitrators' jurisdiction, and from the enforcement of any
arbitral award rendered by a tr.bunai constituted pursuant
to this Agreement including immunity from service of
process and immunity from the jurisdiction of any court
situated in any state, country or nation
22 8 Reservation of Rights. The right to refer a claim or
dispute to arbitration hereunder shall not be affected by the
fact that a claimant or respondent has received full or
partial compensation from another Person for a loss or
injury that is the object of the claim or dispute, and any
such other Person may participate m such proceedings by
nght of subrogation
22.9 Nature of Award. The Parties agree that the arbitral
award of any arbitral tribunal constituted pursuant to IMt
Agreement may contain such orders (including orders for
specific performance, other equitable relief or monetary
damages) m respect of or affecting any of the Parties [and
any toss or damage suffered by any of them) as such
arbitral tribunal determines to be appropriate in the
circumstances The Parties, subject to their respective
obligations contained elsewhere in this Agreement, shall
take all such actions at are necessary to give full anc*
complete effect to the award which, in accordance with ilt
terms. shall be binding upon and enforceable against them
21
22 10 Successors. The consent to the junsc ction of the Centre
as set forth in this Section 22 shall equaUy bind any
successor of or successors-m-interest to either Party to this
Agreement. Should the Centre be replaced by. or its
functions be substantially conferred upon or be transferred
to. any new international body of a similar type and
competence, the Parties shall have the right to submit any
dispute to such body for settlement by arbitration in
accordance with the foregoing provisions of this Section 22.
SECTION 23: NOTICES
(a) All notices, requests, repons, approvals, consents designations
or other communications (collectively referred to herein as
"communications”) required by. provided for, in. or relative to this
Agreement shall be in writing Al communications shall be
delivered, in case of the Government to:
Tho Minister of Lands, Minos & Energy
Ministry of Lands, Mines & Energy
P.O. Box 10-9024
1000 Monrovia 10. Liberia
And in the case of the Operator to:
Tho President
Mano River Iron Ore (Liberia) Inc.
Mano Houso
Gibson Avonuo
Mamba Point
Monrovia. Liberia
or such other address as may be designated in writing by the
Operator
A delivery of a communication shall be deemed effective only
when mailed, postage prepaid and return receipt requested;
teie'axed; or. hand-delivered and receipt
(b) Nothing in this Section shall be deemed to relieve the Operator
from fring any report, return or other communication required by
Liberian Laws of general application at the time and in the
manner therein prescribed.
SECTION 24 0 NON-WAIVERS
The failure of either party at any time to require performance by .
the other party of any provisions hereunder shall in no way /
affect the right of that cany thereafter to enforce the same. cxvp
2P
22
shall it effect the party’s right to enforce any of the other
provisions of this Agreement; nor shall the waiver by either party
of the breach of any provisions hereof be taken or held to be a
waiver of any subsequent breach of such provision or as a
wavier of the provision itself.
SECTION 25.0 AFFIRMATIONS
25.1 The Operator shall, during the term of this Agreement
and for such period thereafter as may be reasonable,
continue to have corporate existence as well as all
corporate rights, powers, purposes and duties set forth
and described in this Agreement, and in its Articles of
Incorporation and By-Laws, as the same may from time-
to-time be amended in accordance with their terms
25.2 The ownership of any Mineral shall pass from the
Government to the Operator at the time that the Mineral
in the Exploration Area is excavated by the Operator
25.3 Subject to the obligations of the Operator and the
Government elsewhere contained n this Agreement, the
Operator shall ensure that it complies with the
Agreement
25.4 The Government and Operator shall each be the
beneficiary of the rights granted to it under this
Agreement No other person shall have any rights under
this Agreement unless a Party or unless otherwise
specifically provided in this Agreement
25.5 Each Party shall execute such documents and do such
further things as may be necessary to give full and
complete effect to the provisions of this Agreement
26.0 EFFECTIVE DATE This Agreement shall become effective and be binding on
the Parties when executed by them J
23
IN WITNESS WHEREOF, the Parlies have executed this Agreement, through their
respective duly authorized representatives, on the day. month and year indicated
below.
Signed in 3 originals on the 18s' day of May A.D 2005.
IN PRESENCE OF
[Signature]
FOR THE GOVERNMENT OF THE
REPUBLIC OFLIBERIA:
[Signature]
MINISTRY OF LANDS
FOR THE OPERATOR:
[Signature]
MANO RIVER IRON ORE (Liberia) Inc.
24
Appendix A
The co-ordinates showing the meets and bounds of the Mineral Exploration
Agreement Area are as follows.
Pojpt Ulm-E UIedJI
1 580000 630000
2 585000 600000
3 585000 635000
4 590000 635000
5 590000 640000
6 600000 640000
7 600000 615000
8 580000 615000
1 580000 630000 (to close)
Swift
DD0Q0II1
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