NOTICE: The text below was created automatically and may contain errors and differences from the contract's original PDF file. Learn more here

REPUBLIC OF LIBERIA)


MONTSERRADO COUNTY)




















IRON ORE EXPLORATION AGREEMENT


FOR THE KITOMA RANGE


BETWEEN





THE REPUBLIC OF LIBERIA


AND





BHP BILLITON WORLD EXPLORATION INC


THIS IRON ORE EXPLORATION AGREEMENT FOR THE KITOMA RANGE is


entered into, by and between the REPUBLIC OF LIBERIA, through its Government


represented by Jonathan A. Mason, Minister, Ministry of Lands. Mines & Energy


(hereinafter referred to as the "Govornmont")


AND











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


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


Manager. West Africa (hereinafter referred to as the 'Operator"), hereby:








WITNESSETH:


WHEREAS, title to Minerals within the territory of the Republic of Ubena 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. Mines & Energy is by law charged with the responsibility of admmistenng 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 minerals are economically and efficiently developed; and


WHEREAS, Government agrees to grant the Operator such mineral hghts 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 in consideration of the premises, the mutual


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


herein contained, the Parties hereto mutually agree as follows: __^





























2


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





■S under common control of the Operator For purposes of


this section, control means the possession, directty or


mdirectty, 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 estabkshed under


the auspices of the International Bank for Reconstruction


and Development


1.3 Convention the term ’Convention* means 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. 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 Aroa The term "Exploration Area" means al


any particular time the area or areas then designated in


accordance with Section 3 2, but only dunng the


Exploration Period


1.6 Exploration Period The term “Exploration Period-


means the period described m Section 2.1.


1.7 Government The term "Government" includes al of Vie


branches, divisions, instrumentalities and agencies of the


Government of the Repubfcc of Liberia


1.8 Infrastructure The term "infrastructure" means assets of


the following types


(a) Immovable transportation and communication facilities





(including roads bndges. railroads, airports, landing


strips and landing pads for aircraft, hangars and other


airport faculties, garages, channels, tramways,


pipelines and radio. telephone telegraph.








3


 (d) Immovable pub* welfare faaM.es (including


schools, hospitals and pub* halls)





(e) Miscelaneous immovable facilities used pnmanly


in connection with the operation of other fabfcbes


(including office#, machme shop#, foundries, repair


shops and warehouses); end.





(0 Movable facilities and equipment affixed to and


used as an integral part of the immovable faakties


described in paragraphs (a) through (e)


Exploration Inc





1.10 Operator The term -Operator means BMP Mon


World Exploration Inc





1.11 Plant and Equipment The term “Plant and Epiapmenr


means the foaowmg assets (other than ^restructure)


used for Operations and Activities


(a) Movable and immovable faakties and equ

to mne. crush sliace. dredge wash, screen, dry.


beneftciate. and otherwise explore for or produce


Iron Ora.


(b) Movable and immovable faakbes and eqmiment


used pnmanty in comecbon with Vie operaton of


the foragomg (incJutfing offices, medane shops


foundries rapmr shops and warehouses).


(c) Movable and immovable faakbes and equsxnent


for the mamtenance of personnel (mcfodmg


4


 dwellings, stores, mess halls and recreational


faokties). and


«J) Movable facAbes and equoment used to


connection with any of the infrastructure





1.14 Produce The term “Produce” as used in reference to


Iron Ore deposit shall include dnH. develop, extract stnp.


mne, sluice, dredge, process (induing beneficiale


concentrate or otherwise treat), stockpile, transport, toad


seN and export, for the account of the operator


1.15 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


rospoct of or incidental thereto, induding the design,


construction, installation, fabrication, operation,


maintenance, drilling, development, extraction, stripping,


mining, sluicing, dredging, processing (including


beneficiation. 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 shall expire at the earlier of (a) such


time as the Operator shall have completed exploration


•cavities 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 Right* On the terms and


conditions herein provided the Government hereby grants


to the operator, dunng the period hereinafter defined,


commencing with the Effective Date plus any extension of


such penod to which the Government may agree


(referred to herein as the "Exploration Penod") the


exclusive nght to explore for Iron Ore Deposits and


appraise toe existing Iron Ore deposits in the Exploration








3.2 Exploration Area


(a) The Exploration area shall lie in the Kitoma Area.


Nimba County, as identified m*. ---~-t1ed map


**th metes and bound! art^rfwi








5


 hereto as Appendix "A" and covering an area of


27.918 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 « 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 aH 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) Dunng the Exploration Period, the Operator shall expend


not less than United States Dollars one (US$1.00) per


acre dunng each calendar year as Exploration Costs, the


latter being defined to comprise all of the Operator's


managenal 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 Minister of Lands. Mines and Energy, such total


production not to exceed not to exceed 5000 metric tones











6


SECTION 6.0 Mineral Development Agreement





Dunng or by the expiry of tho 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 Rights: Subject to the terms and conditions


herein providod. and solely for the purposes incidental to


the exercise of tho nghts granted to the Operator under


Sections 3 and 4 of this Agreement, the Government


hereby grants to the Operator the nght. within the


Exploration Areas





(a) To acqure. build, and construct Infrastructure Plant


and Equipment 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. clay, stone and timber (except


protected fauna and flora), provided however that


where any land, viaeges. hajses. person, or


watering places for arwnals have been supplied


water by nght through custom, the Operator shaS


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 nghts enjoyed by anyone under


any agreement with the Government


6.2 Reservation of Rights The Government reserves the





right subject to section 7 2. on reasonable notice to and


after consiitabon with, the Operator, to construct roads


highways, radroads. telegraph and telephone fanes and


other fanes of commurscafcon astran tie Exploration Area


6.3 Condemnation If the use of any privately owned or


occupied property witfwi the Exptorafaon Area a


reasonably requaed for Vie conduct of operations


hereunder, and the Operator m unable to come to an


agreement with the owner or occupant of such property


for such use. the Operator may roquoat 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 Government's


exercise of such right





SECTION 7.0 INFRASTRUCTURE





7.1 Construction by Operator The Operator shal. at Is





own cost, undertake the construction installation and


improvement of all or any part of the infrastructure Afl


such Infrastructure shall be mantaoed and operated by


the Operator n a reasonably good manner


7.2 The Government warrants not exercising its rights to


expropriate land in the Exploration Area if such


•expropriation shall in any way hinder the development of


the Operation and Activities.





CONDUCT OF OPERATIONS


SECTION 8.0





8.1 Host Exploration Practices Tho Oporator shall conduct





all of its operations hereunder using appropriate modern


and effective Plant and Equipment. Infrastructure,


matenals and methods Such operations shall be


conducted In a proper and workmanlike manner, with due


diligence, efficiency and economy, m accordance with the


laws of Ubena and with the best mining and engineering


practices used by efficient operators m serstar operations


elsewhere in the world








SECTION t.O HEALTH AND SAFETY





The Operator shall nstal mamtam and use modem health and


safety devices and shai practice modem health and safety


procedures and precautions (mckxkng. regular safety tracing


instruction for its employees) as are m accordance with the best


oxploralion 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 unstated labor To the maximum extent


feasible, the Operator shal employ Ubenan citizens at al








10.2 Training of U be nans The Operator shal provide on a


continuing basis for the trammg of its Ubenan employees


 in order 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 those 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


provide 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 an


streams and water bodies within or bordering Liberia, all


dry land surfaces, and the atmosphere be protected from


pollution, contamination or damage resulting from


Operations hereunder


11.3 Environmental Impact Statement The parties recogrtze


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 tho Operator shall submit to the


Mewster. Lands Mrei and Energy, the commencement of


exploration and production an Envronmental Impact


Statement (EIS). The EIS shal show the adverse effects


operations will have on the environment and review plans


to mitigate such effects








SECTION 12.0 ADEQUATE CAPITAL ANO STOCK OWNERSHIP


The Operator shall provide all capital necessary for the effective





exploration for Iron Ore In this connection, the Operator shall at


at times maaitaai a reasonable and prudent capital structura








SECTION 13.0 TAXATION


13.1 In General The Operator shal be liable to all taxes fees,





duties excises, and other charges imposed bj





9


 laws of general appfccatoon. except as may be otherwise


provided by other laws and admrostratrve regulations


granbng exemptions from customs duties and excise








13.2 Income Tax The Operator shal be subject to Ubenan


Income Tax Law of General Appkcabon except that


notwithstanding any provisions of such laws, the rate of


tax appacaWe to a* the taxable income of the Operator


shall be thirty percent (30%).





SECTION 14.0 Exploration Few and Surface Rental





14.1 The Operator shafl make an annual payment of Frfleen


Thousand Ur*ed States Dotars (US$15.00000) for toe


grant or renewal of the Exploration and Resourca








14.2 The Operator shal make a payment of Tlwty United


Stales Cents (US$0 30 per acre for land to exploration


and Five Urated States Dolars (US$5 00) per acre for


land utter pdotmng





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 toe Effective Date


SECTION 15.0 RECORDS. REPORTS. AND INSPECTION


15.1 Availability of Records The Operator shall maintain at


its principal office in Libena. or at such other office as too


Government may approve





(a) Copies of aN maps, geological, mating, 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 toe nght to


temporary remove such samples and other data


from such location and (on poor notice to











10


Government) from L.bena for the purpose of study


and evaluation


(b) The Operator shal keep the Government fully


informed of al Operations and Acbvrties. wherever


conducted, and of its plans m respect thereof The


Government shall have the nght to monitor


exploration and pilot mmmg operations and


Activities from time to time and a reasonable


number of Government personnel may. upon prior


notice » the Operator, at reasonable bmes and


subfect to compliance with the Operator's health,


safety and security requirements, attend and


inspect Mining Operations and Activities


conducted m Liberia


(c) WWim tmty (30) days after the end of each


calendar quarter, the Operator shall provide the


Government with a report on al Operations and


Activities for that calendar quarter including


Minerals recovered and sold Within nmety (90)


days after the end of each Fxianoai Year, the


Operator shal furnish the Government with a


report on al Mvsng 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 appropnate


employee available to render assistance with respect to


any such inspection





15.5 Confidentiality of Operator's Reports The Government


shall treat all information supplied by the Operator


hereurxfor as confidential and Shan not reveal such


information to a third party without the prior wntten


consent of the Operator, whic which consent shall not be


unreasonably withheld I














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 proparing and publishing general records or


statistics on natural resources or other conditions In


Liberia, and in connection with any dispute between the


Government and the Operator





SECTION 18.0 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 pnor wntten


approval (which approval will not unreasonably be 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 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 anses from


force majeure. if the Operator has taken aU appropriate


precautions due care and reasonable alternative


measures with the objective of avoiding such failure and


of carrying out its obligations hereunder The Operator


shal take all reasonable measures to cure such faitore


and to fulfill the terms and conditions hereof with a


minimum of delay





The Operator shal notify the Government within sixty (60)


days of an event of force majeure affecting its ability to


fulfil the terms and conditions hereof or any event wtuch


may endanger the natural resources of Liberia and


simlarty notify the Government of efforts bemg made lo


restore normal condftons wrthm seven (7) days thereof


For purpose of this Section 17. force majeure indudes an


act of God. war. raurrecfeon. dvi 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 sickide any event caused


by a failure to observe the best mining and engineenng


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


substantial total suspension for an uninterrupted period








12


 ol 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 anting


out of this Agreement, which performance » hindered


prevented or delayed by force manure, as wel 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, 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 itsoff 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. A* of the Operator's accounting under this


Agreement shal be in United States Ooiars and all


amounts paid or received, and obligations incurred or


transactions earned out m currency that is legal tender n


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 principles (except to


the extent inconsistent with the terms of this Agreement)


based upon the Prevailing Market Rate of Exchango of


United States Dollars and any such currency at the date


of the applicable transaction





18.2 Exchange Control. The Operator shall at all limes 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 il chooses


Without prejudice to the generality of the foregoing, the


Operator shall have the unrestricted and unencumbered


right to sell and receive payment for Minerals in any


currenc the currency which the Mxierals are





I3


 sold and al proceeds theca from may be deposited at


bank accounts outside of the Repubbc and held there or


remitted there from to anywhere In the world,


n any currency. Notwithstanding the foregong Vie


Operator thal maintain at least one bank account with a


bank or financial tosMubon in the Republic of Libena





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 al transactions between the





Government and Vie Operator deahng «wVi or referring to


currency Viat a legal tender to Via Repubbc w* be


converted to United Stales Mart at the Preva*ng


Market Rate of Exchange on the date of such transaction


Currency gams or losses for purposes of Section 20 she*


be detemwied by reference to Vie Prevailng 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. IQ. 20. and 21 Of this


Agreement shad be in United States Dollars, unless the


Parties otherwise agree Any obligation ongnaily stated


m currency that is legal tender In the Republic, or m any


currency other than United States Dollars, will be


convened to United States DoOars at the PrevaVtog


Market Rate of Exchange on the date such obkgabon «


paid, or shal fai due. whichever • earker


However, the Operator shafl make payments of sums it





collects on behaV of the Government induing, 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 requred


by Law to be withheld or retained by the Operator on


behalf of the Government to the currency in which such


salaries or wages or such other sums are coiected The





whether to the Government or to other Persons to


currency that is legal tender to Vie Repubtc.


18.4 Right to Remit and Racetve Payments. The Operator


shal have the right to remit and receive to Unfled States


Dolars 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 end


Dubes on such remittances or receipts, and without


penaftea. any requred total or partial surendar








M


 exchange or confiscation of such United States Dollars,


or other direct or indirect restrictions on such remittances


or receipts.











18.6 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 v/ay 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 Offering 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








15


 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 win 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


bomo by the Government.


INCIDENTAL RIGHTS


SECTION 19:








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 within the Republic The


Operator shall at all time comply with Law regarding the


safe use. sate, 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 fulfill 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 sales by Law








SECTION 20: ASSIGNMENT AND ENCUMBRANCE


20.1 Right of AssignmenL The Operator shall have the right





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


under this 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 not be relieved of its obligations under this /


Agreement other than to the extent fulfilled by thefr








16


> r











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


interest of the joint-venture partner will be accepted.


20.2 Right to Encumber. The Operator shall have the right to


mortgage, charge or otherwise encumber all or part of its


interest under this Agreement for the purpose of raising,


from one or more Affiliates or third parties, financing for


its obligations under this Agreement


20.3 Notice of Assignment or Encumbranco. The Operator





shall promptly give Notice to the Minister of any


ossignment. mortgage, charge or other disposition or


encumbrance pursuant to this Section 20.





TERMINATION


SECTION 21:


21.1 Termination by the Operator. During the Exploration





Period, the Operator may surrender by not less than sixty


(60) days notice to the Government, all its rights


hereunder in respect of all or any part of the Exploration


Area, and the Operator shall be relieved of all obligations


in respect of area so surrendered except those


obligations that may have accrued prior to the Effective


Dale of. or arising out of or related to the surrender


21.2 Termination by the Government. Sublet 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 shal fail to make any


of the payments described in this Agreement on


the due payment date, and such default is not


cured with* thirty (30) days after notice by the


Government (or within such longer period as may


be specified m said notice).


b) where the Operator shall materially fail 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 notice by


the Government or within spdh period as may be


specified in said notice,^/ ^











17


 c) where the Operator shal (i) vofantanfy dissolve


bquMlate or wind up its affairs or make an


assignment of an or substantially all of its assets


for the benefit of creditors other than an


assignment made to secure indebtedness incurred


in the ordinary course of business, (M) file a petition


or application to any tribunal for the appointment of


a trustee or receiver for all or any substantial part


of the Operator's assets. (■) commence any


proceedmgs lor «s bankruptoy. reorganaabon.


arrangement. solvency or readjust™"*


under the laws of any jurisdiction, whether now or


hereafter m effect or if any such petibon or


application « Med. or any such proceedngs are


commenced agamst 1 shal mdcate «s approval





or (iv) if any order « entered appombng any such


trustee or receiver or adjudcabng the Operator


bankrupt or meolvent. or approwig the pabbon n


any such procee<»ngs. and provided that the


Operator shal fad to take corrective measured) to


have such order removed or lifted within sixty (60)


days





d) where the Operator shal tad to carry out


Exploration as regueed by Section 3. cease


Exptorabon for a period of twelve (12) conseateve


months or cease Production with respect to at


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 n state of force majeure 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 212. the Government


before taking any farther action, shal provide Nobce to


the Operator of the alleged occurrence of such Event of


Default and of tie Government's views in that regard and


shal offer the Operator a fair opportunity to consult with


the Government to resolve the matter. If. after a


reasonable period of time of consuftabon. the


Government is of the reasonable optfuon that the matter


cannot be resolved by farther consuftabon. 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 withxi sixty (60) da-


after said Notice, or withm such longer period as may








II


 necessary to allow a reasonable penod of time to effect


such cure, then this Agreement shall be terminated


21.4 Disputes Regarding Event* of Default.





Notwithstanding the provisions of Sections 21.2 and 21.3.


if the Operator disputes whether there has been an Event


of Default desenbed xi Section 212 and. withm sixty (60)


days after recent by the Operator of the Governments


Notice of its intention to ternsnate. refers such (fcspute to


arbitration in accordance with Section 22. then


termination of this Agreement shaN not take effect untt


the fnaKy 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 m connection with this Agreement or its formation, or the


vaMity. interpretation. performance. temsnabon.


enforceability or breach of this Agreement (inducing 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 which resolution by


submission to an expert Is not specifically provided


elsewhere m this Agreement shall be exclusively and finally


settled by bxidmg 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 wfsch shall preval that evert





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 tor purposes of


Article 25(1) of the Convention, any dispute subject to tha


Section 22 a a legal depute arising 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





Ospute





22.2 Nationality for Purposes of Arbitration. The Operator «


incorporated in British Colombo. Canada








22.3 Arbitrators. Any arbitral tribunal constituted pursuant to


this Agreement shall consist of one (1) arbitrator to be/>^








19








f





appomted by toa Goverrvnent one (1) arbitrator to be


appomted by Operator end one (1) arbitrator. who shall be


the president of toe tobunal and shal be a citizen neither of


the Republic nor of the United States of Amenca (or of any


other state of which a Party is a national under Section


22.2), to be appointed by the Secretary-General of the


Centre No such arbitrator shall have an nterest in the


matters m dispute


22.4 Referee. 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


tho Socrotary Gonoral 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 th« Agreement, which must be referred to


arbitrators appointed pursuant to Section 22 3 above


unless toe Parties jomtly agree that any such dispute is not


material, in which event it may be referred to toe 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


shall examine the roforeo'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 proceedngs conducted pursuant to this


Agreement shall be held in Washington. D.C or such other


place as tie Partes may agree and shaB be conducted «i


the English language The costs of the proceedings sha i


be assessed and borne in such manner as the arbitral


tribunal shall decide Any procedural issues that cannot be


determined under toe arbitral rules of the Centre shal be


determined pursuant to applicable law as set forth below


22.6 Award. The arbitrators shall, by majority vote, render a


written decision stating toe reasons for their award within


three (3) months after any beanng conducted has been


concluded Any monetary award shall be assessed and


payable in Dolars (determined at the Prevailing Market


Rate of Exchange as of tho date of the award if the award


involved an obligation expressed m any currency other than


Dollars) through a bank designated by the recipient, and in


the case of an award to the Operator, shal be exempt from


any Taxes and Dubes imposed by Government Eacttf'*^





20


Parly 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


timo 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


majonty of the arbitrators In any case, the kabdity of the


Operator shal be tainted to the net book value of its


^vestment m the Republic at the time of the award


If the decision of the artxtral tnbmal is adverse to the


Operator, then the arbitral trfcunai 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. The Government hereby


irrevocably waives all claims of Immunity from the


Arbitrators' jurisdiction, and from the enforcement of any


arbitral award rendered by a tribunal constituted pursuant


to this Agreement including immunity from service of


process and mmunrfy from the Misdidion of any court


situated m any state, country or nation


22.8 Reservation of Rights The right to refer a dam or


dispute to arbitration hereunder shal not be affected by the


fact that a daimant 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 in such proceedings by


right of subrogation


22.9 Nature of Award. The Parties agree that the arbitral


award of any arbitral tnbunal constituted pursuant to this


Agrooment may contain such orders (indudmg orders for


specific performance, other equitable relief or monetary


damages) in resped 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 Partios, subject to their respective


obligations contained elsewhere In this Agreement, shall


take all such actions as are necessary to give full and


complete effect to the award *•» ---th n*


terms, shall be binding upon





21


 22.10 Successors. The consent to the Jurisdiction of the Centre


as set forth in this Section 22 shall equally hind any


successor of or successors-in-mterest to either Party to this


Agroomont 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 submrt 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, reports, approvals, consents, designations


or othor communications (collectively referred to herein a9


"communications”) required by, provided for, in, or relative to this


Agroemont shall be in writing. All communications shall be


delivered, in case of the Government to


Tho Mlnlstor 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:


The Exploration Manager





BHP Billiton World Exploration Inc


Monrovia. Liberia





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


Operator





A dehvery of a commurscatoon shall be deemed effective only


*hen marfed. postage prepaid and return rece*X requested,


telefaxed. or. hand-delivered and recent





(b) Nothing at this Section shad be deemed to relieve the Operator


from filing any report, return or other communication required by


Ubenan Laws of general application at the time and In the


manner therein prescribed


SECTION 24.0 NON WAIVERS


The f adore of either party at any time to requre performance by


the other party of any provisions hereiaider shad in no way


affect the nght of that party thereafter to enforce the same or


shad it effort the party's nght 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 held to be








22








/








in WITNESS WHEREOF the Parties have executed tfus Agreement, through their


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





oeiow





Signed on A O 2005














IN PRESENCE OF



































































































































24


 APPENDIX 1


Area of Application






































































































































25


 510000 520000 530000 540000





Kitoma EL Application





800000 810000 820000 i 830000 BHPBilliton








km 2 acres


Area 113 27,918


toc«M


•*»u- fc





vert UTME UTMN


527400 815500


1


W'J.U. 2 527400 809600


3 530000 809600





GAIAPA 14: 4 530000 804800


5 517800 804800





6 518140 805200


7 517750 808070





Bv*p4 8 516850 810660


9 518140 813000


519900 815350


10


11 527400 815500


























W»cu«'* f c,-ysd.


Legend





5ANOXOIXMA- 1 I l»fc«i»r.n«in.f*»0503


fe..’ .9-ivh*). n n 1 i i i ?