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REPUBLIC OF LIBERIA)


MONTSERRADO COUNTY)




















IRON ORE APPRAISAL AND EXPLORATION AGREEMENT


FOR THE GOE-FANTRO RANGE


BETWEEN


THE REPUBLIC OF LIBERIA'





AND


BHP BILLITON WORLD EXPLORATION INC


THIS IRON ORE APPRAISAL AND EXPLORATION AGREEMENT FOR THE


GOE-FANTRO RANGE is entered into, by and between the REPUBLIC OF


LIBERIA through its Government represented by Jonathan A Mason Minister


Mmrstry of Lands M*ies & Energy (hereinafter referred to as the "Government”)


AND


BHP Billiton World Exploration Inc. a corporation existing and doing business


under the laws of British Colombia. Canada represented by Ciaran Halpm its


Manager West Africa (hereinafter referred to as the 'Operator) hereby








WITNESSETH:


WHEREAS title to Minerals within the territory of the Republic of Libena is vested in


the Republic of Ubena (the Republic) and all nghts related to the exploration for and


exploitation of such minerals pertain exclusively to the Republic and


WHEREAS the Mnstry of Lands. Mines & Energy through the Mirvster of


Lands Mines & Energy is by law charged with the responsOfcty of administering the


mineral laws of the Repute and m 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


Ubena and recognizes that a large capital expenditure is necessary to ensvxe that


such minerals are economically and efficiently developed; and


WHEREAS. Government agrees to grant the Operator such mineral nghts and


privileges In consideration of the undertaking by the Operator to make annual


payments and to pay rents, royalties and other fees hereinafter prescribed and to


perform and observe the terms and conditions of this agreement.


NOW, THEREFORE for and m consideration of the premises the mutual


promises exchanged between the parties hereto (the Parties), terms and conditions


herein contained, the Parties hereto mutualy agree as follows:



































2


SECTION 1.0 DEFINITIONS


Unless the context she* otherwise dearly inocate. the foflowmg


terms wherever used * this Agreement Shan 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 the 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 Centre: the term -Centre' means the International Centre


for Settlement of Investment Disputes established under


the auspices of the International Bank for Reconstruction


and Development


U Convention the term -Convention- means the





Convention on the Settlement of Investment Disputes


between States and Nationals erf Other States opened to


signature at Washmgton DC United States of America


on March 18. 1965


1.4 Effective Date The term -Effective Date" means the


dale 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 Penod'


means the period described in Section 2 1.


1.7 Government The term "Government" includes all of the


branches, divisions, instrumentalities and agencies of the


Government of the Republic of libena


1.8 Infrastructure The term "infrastructure" means assets of


the following types


(a) Immovable transportation and communication facilities


(including roads bridges, railroads, airports, landing


strips and landing pads for aircraft, hangars and other


airport facilities, garages, channels, tramways,


pipelines and radio. telephone. tolograph.


 telecommunications and electronic or other form* of


communications facilities)





(b) Immovable port faafcbee (including docks harbors


piers retbes breakwaters lermnjl faofcbe* and


warehouses and loadmg end urtoedaig feafcbee).


(c) Immovable power, water and sewerage facilities


(including electncal generating plants and


transmission Imes dams water drains water


supply systems and Systems for disposing of


takings plant waste and sewage)


(d) Immovable public welfare facilities (including


schools, hospitals and public halls);


(e) Miscellaneous immovable facilities used primanly


in connection with the operation of other facilities


(including offices machine shops foundries, repair


shops and warehouses), and,


(0 Movable facilities and equipment atfixed to and


used as an integral pari of the immovable facilities


described in paragraphs (a) through (a)


1.9 Operations and Activities The lean -Operations and


Activities' means the appraisal and exploration mining


and management operations of BMP Billiton World


Exploration Inc





1.10 Operator The term -Operator means BMP Billiton


World Exploration 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 faokties and equipment


to met. crush, sluice dredge, waah screen dry


beneficial© and otherwise explore for or produce


Iron Ore.





used pnmarty n connector with the operator of





the toregong (including offices, macfsne shops,


foixidnes repa* shops end warehouses)





(c) Movable and anmovatke faafebet and equipment


tor the maintenance of personnel (including





i








IT





 dwellings, stores mess hails and recreational


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 benefiaate.


concentrate or otherwise treat), stockpile, transport, load


sell and export, for the account of the operator.


1.16 Production The term "Production" as used in 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, dnllmg. development, extraction, stripping


mining, sluicing, dredging, processing (including


beneficiation, concentration or othor treatment),


stockpiling, transportation, loading, sale and exportation


by the Operator





SECTION 2.0 TERM OF THE AGREEMENT





2.1 The term of this Agreement sha* commence on the


Effective Date and shall expire at 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, dunng the period hereinafter defined


commtnang 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 shal be m the Goe Fantro_


Area Grand Bassa and Margitx Counties as


identified on the attached map with metes and








5


 bounds or coordinates attached hereto as


Appendix "A” and covenng an area of 54.363


acres


(b) The Operator shall commonce 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 Onginal


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 all of. or any part of. the


Exploration area upon expiry of the exploration


penod. it shall have the nght to do so by applying


for a mineral development agreement over the


area


3.4 Minimum Expenditures





(a) Commencing no later than %a (6) months after the


Effective Date the Operator sha« d*gen#y and withoiX


interruption explore for and evaluate Iron Ore deposits


within the Exploration Area


(b) During the Exploration Period the Operator shall expend


not less than Unrted States Dollars one (US$1 00) per


acre dunng each calendar year as Exploration Costs the


latter bemg defined to compose al of the Operator s


managerial and corporate costs related to exploration


SECTION 4.0 Pilot Mining Rights





The Operator m addition to exploration, is hereby also granted


the nght to produce Iron Ore under a pilot mmmg plan to be


approved by the Minister of Lands Mines and Energy such total


production not to exceed not to exceed 5000 metric tones


SECTION 5.0 Mineral Development Agreement





Dunng or by the expiry of the Exploration Period the Operator


may apply for a Mineral Development Agreement This


agreement shall be concluded in accordance with the Minerals


and Mining Laws and Regulations of Liberia





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 exerase 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, bmkd and construct Infrastructure. Plant


and Eqiapment and other facilities, and to


maintain and operate the same;





(b) To remove, 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. day. stone and timber (except


protected fauna and flora), provided however that


where any land vtfages houses person, or


watering places for animals have been supplied


water by nght through custom, the Operator shall


not deprive them of a constant and reasonably


supply of usable water, nor shall the Operator


without the Government's consent interfere with


any water or other rights enjoyed by anyone under


any agreement with the Government





6.2 Rosorvation of Rights The Government reserves the


nght. 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 lines of communication within the Exploration Area


6.3 Condemnation If the use of any privately owned or





occupied property within the Exploration Area is


reasonably required for the conduct of operations


hereunder, and the Operator is unable to come to an


agreement with the owner or occupant of such property


for such use. the Operator may request the Government,


which request shall not be unreasonably denied, to


exercise its right of eminent domain with respect to such


property The Operator shall reimburse the Government


for any compensation paid or payable to the private





7


 owner or occupant as a result of the Governments


exercise of such right


INFRASTRUCTURE


SECTION 7.0


7.1 Construction by Operator The Operator shall, at its





own cost undertake the construction installation and


approvement of all or any part of the infrastructure Al


such Infrastructure shall be ma**amed and operated by


the Operator in a reasonably good manner





7.2 The Government warrants not exercising its rights to


expropriate land m the Exploration Area if such


expropriation shal m any way hinder the development of


the Operation and Activities


CONDUCT OF OPERATIONS


SECTION 8.0


8.1 Best Exploration Practices The Operator shall conduct





al of its operations hereunder using appropriate modem


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, tn accordance with the


laws of Liberia and with the best fmmng and engataenng


practices used by efficient operators m similar operations


elsewhere m 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 engmeenng practices, and acceptable


labor safety standard In this respect, the Operator shall comply


with health and safety rules, regulations, and Laws of the


Government





EMPLOYMENT. TRAINING AND SECONDMENT


SECTION 10.0


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








x


 m order to qualify them for skilled technical


administrative and managerial positions


10.3 At least two (2) professionals from the Ministry shal be





seconded to the Operator's operations at the expense of


the Operator, provided that the Operator wiH 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 dunng the term of his operation and shall


provide for meetings on a regular bases between


representatives of the Operator and the local


commurvbes 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 shad take preventive,


corrective and/or restorative measures to ensure that all


streams and water bodies within or bordering Liberia all


dry land surfaces and the atmosphere be protected from


pollution, contamination or damage resulbng 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 the atmosphere within the contract area and


elsewhere Accordingly the Operator shall submit to the


Minister, Lands Mines and Energy, the commencement of


exploration and production an Environmental Impact


Statement (EIS) The EIS 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 provide all capital necessary for the effective


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 Goneral The Operator shall be liable to all taxes, fees,


duties, excises, and other charges imposed by Liberian


9





 Laws of general application except as may be otherwise


prowled by ether 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 to all the taxable income of the Operator


Shan be thirty percent (30%)








SECTION 14.0 Exploration Fees and Surface Rental





14.1 The Operator shal make an annual payment of Fifteen


Thousand United States Dollars (US$15,000 00) for the


grant or renewal of the Exploration and Resource


Appraisal License





14.2 The Operator shall make a payment of Tlwty United


States Cents (US$0 30 per acre for land in exploration


and Five United States Doiars (US$5 00) per acre for


land under pic* mining








14.3 The first payment for the exploration license fee and


surface rental shall be made in within ten (10) days of the


Effective Date Subsequent payments shall be made


within thirty (30) days after each subsequent anniversary


of the Effective Date


RECORDS. REPORTS. AND INSPECTION


SECTION 15.0


15.1 Availability of Records The Operator shall maintain at


its pnncipal office w Liberia or at such other office as the


Government may 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 as 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 nght to


temporanly remove such samples and other data


from such location and (on pnor notice to the








I0


Government) from Liberia for the purpose of study


and evaluation


(b) The Operator shall keep the Government fully


informed of aH 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 pnoc


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


conducted in Liberia


(c) Within thirty <3Q) rtay* aftPT tt*> end of ea

calendar quarter the Operator shall provide the


-Govgnrftenrwith~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 Roports; 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 Roports The Government


shall treat all information supplied by the Operator


hereunder as confidential and shall not reveal such


information to a third party without the poor 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 o1 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 prepanng and publishing general records or


statistics on natural resources or other conditions m


Libena. and in connection with any dispute between the


Government and the Operator


NONASSIGNABILITY


SECTION 16.0


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 pnor written


approval (which approval will not unreasonably be withheld)


unless to an affiliate


FORCE MAJEURE


SECTION 17.0


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 monies to the


Government as provided in Section 14 hereof) shall not


be grounds for cancellation or give the Government any


claim for damages insofar as such failure arises from


force majeure. if the Operator has taken all appropriate


precautions, due care and reasonable alternative


measures with the objective 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, riot 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 engmeenng


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 penod





12


 of more than three (3) months, the duration of the term of


this Agreement shall be extended by the time of such


suspensions.


17.2 Except as hereinafter provided the time for the





performance of any obligation (except the obligation to


make payment of money) of the Operator under or arising


out of this Agreement whch performance is hindered


prevented or delayed by force majeure as well as any


other tune periods and dates set forth *i 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, claim 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 strike,


lockout ban "go slow" activity, stoppage restraint of labor


or other similar ("Industrial Dispute”).








SECTION 18: FINANCIAL REPORTING AND CURRENCY


18.1 Accounting. Al of the Operator s accounting under tfxs





Agreement shall be m United States Dollars and all


amounts paid or received, and obligations incurred or


transactions carried out m currency that«legal tender m


the Republic or in any Foreign Currency other than


United States Dollars shall be converted to United States


Dollars in accordance with and pursuant to generally


internationally accepted accounting pn no pies (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 Exchango Control. The Operator shall at all times have


the 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


Without prejudice to the generality of the foregoing the


Operator shall have the unrestncted and unencumbered


right to sell and receive payment for Minerals in any


currency, including the currency in which the Minerals are





I3





Mb'








sokl. and all proceeds there from may be deposited in


bank accounts outside of the Republic and heW there or


remitted there from to anywhere in the worW


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 m 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 is legal tender in the Republic will be


converted to United States Dollars at the Prevailing


Market Rate of Exchange on the date of such transaction


Currency gains or losses for purposes of Section 20 shall


be determined by reference to the Prevailing Market Rate


of Exchange


18.3 Currency of Payment. Payment of the Operator's direct


obligations to the Government for Taxes and Duties


payable under Sections 18, 19. 20. and 21 of this


Agreement shall be in United States Dollars, unless the


Parties otherwise agree Any obligation onginally stated


in currency that is legal tender in the Republic, or in any


currency other than United States Dollars will be


converted to United States Dollars at the Prevailing


Market Rate of Exchange on the date such obligation is


paid, or shall fall due whichever is earlier


However the Operator shall make payments of sums it


collects on behalf of the Government, including but not


limited to, taxes withheld from the salaries or wages of


the employees of the Operator, and any other sums


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


salanes 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 divWends. interest, pnnapal and


other property payable items ansing 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








14


 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 the 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 Offenng Rate


(LIBOR) 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 shall be


another agreed substitute rate If the Operator has


overpaid its liability for Taxes and Duties then, at





I5


 its option, it may elect either to be reimbursed by


the Government or to apply such overpayment


against future Taxes and Duties





d In case a review of records or books outside of the


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





INCIDENTAL RIGHTS


SECTION 19:








19.1 Imports.


The Operator shall be entitled to import and use m respect


of Operations, and subsequently export, any and aH


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 within the Republic 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 imported items that are no longer needed for


Operations However if such imports were exempted


from Taxes and Duties the Operator shall MU all


formalities required in connection with the payment by the


purchaser of all Taxes and Duties on the depreciated


value of the imports imposed on such salea by Law








SECTION 20: ASSIGNMENT AND ENCUMBRANCE


20.1 Right of Assignment. The Operator shall have the nght


to assign or otherwise dispose of all or part of its interest


under this Agreement with the poor 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 not be relieved of its obligations under this


Agreement other than to the extent fulNled by the


16





 Affiliate However any request to cede Of assign any


rights to a joint venture partner writ be fully atowed and


any assignment that « legally required to protect the


merest of the jotot-venbxe partner w* be accepted


20.2 Right to Encumber The Operator aha* have the right to





mortgage charge or othenmse eoaanber al or part of its


merest under tfss Agreement tor toe purpose of raiang


from one or more Affiliates or tfsrd parbes. financing for











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 th* Section 20





TERMINATION


SECTION 21:


21.1 Termination by the Operator Dunng the Exploration





Period the Operator may surrender by not leee toen sixty


(60) days nobce to the Government al its nghts


hereunder n respect of al or any pert of the Exploration


Area and the Operator aha* be relaved of al obbgabons


to respect of area so surrendered except those


obligations that may have accrued prior to the Effective


Date of. or ansmg out of or related to the surrender


21.2 Termination by the Government. Subject to the





provisions of Section 21. the Government shall have the


right to terminate this Agreement if any of the following


events (hereinafter called "Events of Default") shall occur


and be continuing





a) where the Operator shall 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 fall to comply


with its obligations or any other conditions under


this Agreement and such failure shall have a


materially adverse effect on the Government and


is not cured within ninety (90) days after nobce by


the Government or within such period as may be


specified to said nobce











17


 c) where the Operator shall (i) voluntarily dissolve,


liquidate or wind up its affairs or make an


assignment of a» or substantaBy a I of its assets


for the benefit of creditors other than an


assignment made to secure indebtedness mcurred


m the ordinary course of business fa) We a petition


or apphcabon to any tribunal for the appointment of


a trustee or receiver for all or any substantial part


of the Operators assets (■) 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 entered 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 lifted within sixty (60)


days





d) where the Operator shall fail to carry out


Exploration as required by Section 3. cease


Exploration for a penod of twelve (12) consecutive


months or coase Production with respect to aM


Production Areas for a penod 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 majeure m 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 m 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 Governments views in that regard and


shall offer the Operator a fair opportunity to consult with


the Government to resolve the matter If. after a


reasonable penod of time of consultation, the


Government is of the reasonable opinion that the matter


cannot be resolved by further consultation the


Government may then send to the Operator Notice of the


Governments mention to terminate this Agreement If


the Event of Default «s not cured within sixty (60) days


after said Notice, or witfxn such longer period as may be








IR


 necessary 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 Government8


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 untl


the finality of, and m accordance with, an arbitration


award uphddmg the Government s right to termrate








SECTION 22: ARBITRATION


22.1 Submission to Arbitration. Any dispute between the





Government and the Operator arising out of. n relation to


or in connection with this Agreement or its formation, or the


vahdity interpretation performance. termination


enforceability or breach of this Agreement (indudmg any


depute concerning whether the Government or the


Operator has violated or is m breach of this Agreement or


of any Law affecting the rights obligations or duties of any


Party under this Agreement), for which resolution by


submission to an expert is not specifically provided


elsewhere in this Agreement shall be exclusively and finally


settled by binding arbitration pursuant to the Convention in


accordance with the 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 the 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 ansing directly out of an


investment Either of the Parties to such dispute may


institute arbitration proceedings by giving Notice to the


other Party and 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 British Colombia. Canada


22.3 Arbitrators. Any arbitral tribunal constituted pursuant to


this Agreement shall consist of one (1) arbitrator to bo








19


appointed by the Government one (1) arbitrator to be


appointed by Operator and one (1) arbitrator, who shall be


the president of the tnbunal and shall be a Citizen neither of


the Repubbc nor of the United States of America (or of any


other state of which a Party « a national uider Section


22 2) to be appointed by the Secretary-General of the


Centre No such arbitrator shall have an interest in the


matters in dispute.


22.4 Roforoe. At the request of a Party, any matter otherwise


subject 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 <*spute 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 m which event it may be referred to the referee 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 be


final and binding unless appealed by any Party to


arbitrators appointed as provided in this Section 22 4 who


shal1 examine the referees decision only as to manifest


error of law findngs of fact that are not supported by any


credible evidence and abuse of aiAhonty rmsconcfcjct or


other unauthonzed act by the referee


22.5 Venue. Arbitration proceedings conducted pursuant to this


Agreement shall be held In Washington. DC or such other


place as the Parties may agree and shall be conducted in


the English language The costs of the proceedings shall


be assessed and borne in such manner as the arbitral


tnbunal 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 shall by majority vote, render a


wntten decision stating the reasons for their award within


three (3) months after any hearing conducted has been


concluded Any monetary award shall 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 Each








20


Party shall bear its own costs and attorney fees Neither


Party shall have any liability for either consequential


damages (except for purposes of set off) or exemplary or


punitive damages, but interest at a rate not to exceed 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 rate 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 adverse 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 Waiver of Sovereign Immunity, (he Government hereby


irrevocably waives all claims of Immunity from the


Arbitrators' jurisdiction, and from the enforcement of any


arbitral award rendered by a tnbunal constituted pursuant


to this Agreement including immunity from service of


process and immunity from the junadicbon of any court


situated in any state country or nation


22.8 Reservation of Rights. The nght to refer a daim 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


Bijury that is the object of the claim or dispute, and any


such other Person may participate m such proceed ngs by





22.9 Nature of Award. The Parties agree that the arbitral


award of any arbitral tnbunal constituted pursuant to this


Agreement may contain such orders (including orders for


specific performance, other equitable relief or monetary


damages) in respect of or affecting any of the Parties (and


any loss or damage suffered by any of them) as such


arbitral tribunal determines to be appropriate in the


circumstances The Parties subject to the* respective


obligations contained elsewhere in this Agreement shall


take ail such actions as are necessary to give full and


complete effect to the award which, m accordance with its


terms, shall be binding upon and enforceable against them





21


 22 10 Succ---sor*. The coo---nt lo the Mis4c*on of the Centre


as set forth *1 this Secaon 22 shea equety bxid any





Agreement Shoufo Ihe Cenee be replaced by or tt


functions be substantial conferred upon or be transferred


to. any new international body of a similar type and


competence, the Partes 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 2J: NOTICES


(•) or other commurxcabons (collectivefy referred to herein as





•communications") required by provided for, In. or relative to this


Agreement shad be in wntng All communications shall be


delivered, in case of the Government to


The Minister of Lands. Mines & Energy


Ministry of Lands. Mines & Energy


P.O Box 10-9024


1000 Monrovia 10. Liberia


And in the case of the Operator to





Tho Exploration Manager


BHP Billiton World Exploration Inc


Monrovia. Liberia


or such other address as may be designated m writing by the





Operator


A delivery of a commurscabon shafl be deemed effective only


when marfed. poetage prepaid and return recent re<*jested


Nothing xi this Section shal be deemed to relieve the Operator


(t>)


from filing any report, return or other communication required by


Libenan Laws of general application at the time and in the


SECTION 24.0 manner therein prescribed


NONWAIVERS





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 party thereafter to enforce tho same or


shall it effect the party's right to enforce any of the other


provisions of this Agreement nor shad the waiver by either party


of the breach of any provisions hereof be taken or heW to be a





22


 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, dunng 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-bme be amended m 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 obigations of the Operator and the


Government elsewhere contained in 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 she! execute such documents and do such


further things as may be necessary to grve fiil and


complete effect to the provisions of this Agreement





26 0 EFFECTIVE DATE This Agreement shal become effective and be landing on


the Parties when executed by them









































23


IN WITNESS WHEREOF the Parties have executed this Agreement through their


respective duly authorized representatives, on the day month and year indicated


below. ^ t





originals on the day of ^ C A.D. 2005.


Signed in


T











IN PRESENCE OF FOR THE GOVERNMENT OF THE























MINISTRY OF LANDS, MINES & ENERGY














FOR THE OPERATOR:

















BHP BILLITON WORLD EXPLORATION INC










































































24