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REPUBLIC OP LIBERIA


MONTSERRADO COUNTY




















IRON ORE APPRAISAL AND EXPLORATION AGREEMENT


FOR THE PUTU RANGE





BETWEEN


THE REPUBLIC OF LIBERIA





AND


MANO RIVER IRON ORE (LIBERIA) INC.


THIS IRON ORE APPRAISAL AND EXPLORATION AGREEMENT FOR THE P


UTU RANGE s entered into, by and between the REPUBLIC OF LIBERIA through


its Government represented by Jonathan A Mason. Minister. Ministry ol Lands


Mines & Erv'rgy (here.natter referred to as the "Government-)


AND











Mano Rivoi Iron Oro (Liberia) Inc., ci corporntion existing and doing business undor


the laws of .iberia represented by Dr Tom Elder, its President (hereinafter referred


to as the -Operator), hereby








WITNESSETH:


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


the Republic of Liberia (the Republic) and all rights related to the exploration for and


exploitation of such minerals pertain exclusively to the Republic; and


WHEREAS, the Ministry of Lands, Mines & Energy through the Minister of


Lands. Mints & Energy is by lav/ charged with the responsibility of administering the


mineral laws of the Republic and in that process to ensure the efficient development


of the mining industry; and


WHEREAS, the Government is determined to accelerate the development of the


mining industry of Liberia and therefore desires to promote the Development of


minerals which may exist in exploration areas for the economic and social benefit of


Liberia and recognizes that a large capital expenditure is necessary to ensure that


such mirercls are economically and efficiently developed; and


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


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


payments.; nd to pay rents, royalties and other fees hereinafter prescribed and to


perform anc observe the terms and conditions of this agreement;


NOW. THEREFORE, for and in consideration of the premises, the mutual


promises e; changed between the parties hereto (the Parties), terms and conditions


herem conb ined. the Parties hereto mutually agree as follows'





























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





is under common control of the Operator For purposes of


this section, control means tho possession, directly or


indirectly, by one entity of more than fifty percent (50%) of


the equity of or the voting power of another entity.


1.2 Centro: the term ‘Centre'1 means the International Centre


for Settlement of Investment Disputes established under


the auspices of the International Bank for Reconstruction


and Development.


1.3 Convention: the term •'Convention’ moans the





Convention on the Settlement of Investment Disputes


between States and Nationals of Other States opened to


signature at Washington. DC. United States of America


on March 18. 1S65,


1.4 Effoctivo Date. The term "Effective Date" means the





date, provided in Section 26. on which this Agreement


shall become effective





1.5 Exploration Area The term “Exploration Area" means at


any particular time the area or areas then designated in


accordance with Section 3.2. but only during the


Exploration Period.


1.6 Exploration Period: The term "Exploration Period"


means the period described in Section 2 1


1.7 Government The term "Government" includes an of the


branches, divisions nstrumenta: ties and agences of the


Government of the Republic of Libena





1.8 Infrastructure The term "infrastructure means assets of


the Wtowing types





(a) Immovable transportation and communication facilities


(including roads bridges, railroads, airports, landing


strips and land mg pads tor aircraft hangars and other


airport facilities, garages, channels, tramways,


pipelines and radio, telephone, telegraph.








3


 telecommunications, and electronic or other forms of


communications facilities);





(b) immovable pon facilities (including docks, harbors,


piers, jetties, breakwaters, terminal facilities and


warehouses, and loading arc unload r. ; fa: ' es


(c) Immovable power, water anc sewerage facilities


(including electrical generating plants and


transmission lines, dams, water drams, water


supply systems and Systems for disposing of


tailings, plant waste and sewage);


(d) Immovable public welfare facilities (including


schools, hospitals and public halls);


(e) Miscellaneous immovable facilities used primarily


in connection with the operation of other facilities


(including offices, machine shops, foundries, repair


shops and warehouses), and.


(0 Movable facilities and equipment affixed to and


used as an integral part of the immovable facilities


described in paragraphs (a) through (e)


1.9 Operations and Activities The term "Operations


Activities" means the appraisal and exploration mining


and management operations of Mano River Iron Ore


(Liberia) Inc.


1.10 Operator; The term “Operator" means Mano River Iron


Ore (Liberia) Inc.








1.11 Plant and Equipment; The term “Plant and Equipment"


means the following assets (other than infrastructure)


used for Operations and Activities:


(a) Movable and immovable facilities and equipment


to mine, crush, sluice, dredge, wash, screen, dry.


benefkaate. and otherwise explore for or produce


Iron Ore;


(b) Movable and immovable fac ities and equipment


used primariy in connection with the operation of


the foregoing (including offices, machine shops


foundries repair shops and warehouses);


(c) Movable and immovable facilities and equip


for the maintenance of personnel (inch








4


 dwellings, stores, mess halls and rocroational


facilities); and





(d) Movable facilities and equipment used in


connection with any of the infrastructure


1.14 Produce The term ’Produce" as used in reference to





Iron Ore deposit shall include drill, develop, extract, strip,


mine, sluice, dredge, process (including beneficiate.


concentrate or otherwise treat), stockpile, transport, load,


sell and export, for the account of the operator


1.15 Production The term 'Production" as used n reference


to Iron Ore shall mean the commercial exploitation of Iron


Ore found in the Exploration Area and all activities in


respect of or incidental thereto, including the design,


construction, installation, fabrication, operation,


maintenance, drilling, development, extraction, stripping,


mining, sluicing, dredging, processing (including


fceneficiation. concentration or other treatment),


stockpiling transportation, loading, sale and exportation


by the Operator





SECTION 2 0 TERM OF THE AGREEMENT





2.1 The term of this Agreement shall commence on the


Effective Date and snail expire af the earlier of (a) such


time as the Operator shall have completed exploration


activities and resource evaluation, or (b) three (3) years


after the Effective Date, with an extension of two (2)


years at the option of the Operator plus any period of


renewal to which the Government may agree





SECTION 3.0 EXPLORATION RIGHTS





3.1 Grant of Exploration Rights: On the terms and


conditions herein provided the Government hereby grants


to the operator, during the period hereinafter defined,


commencing with the Effective Date plus any extension of


such period to which the Government may agree


(referred to herein as the "Exploration Period’) the


exclusive right to explore for Iron Ore Deposits and


appraise the existing Iron Ore deposits in the Exploration


Area


3.2 Exploration Area:





(a) The Exploration area shall he in the Putu Ranpe





Area. Grand Gedeh County, as identified on ti


attached map. with metes and bounds





5


 coordinates attached hereto as Appendix "A” and


covering an area of 105.019 acres.


(b) The Operator shall commence exploration as soon


as possible after the Effective Date but not later


than 180 days after the Effective Date.





3.3 Surrender of Exploration Area. Unless the Minister and


the Operator otherwise agree


(a) At or before the end of the initial term of the


Exploration Period, the Operator shall surrender a


minimum of fifty percent (50%) of the Original


exploration area


(b) At or before the end of the term of this agreement


as set out in section 2.1 above, the Operator shall


surrender the remainder of the Exploration Area


and. upon such surrender, the Exploration License


shall automatically terminate


(c) Notwithstanding paragraphs 3.3 (b) above, if the


Operator wishes to retain alt of. or any part of. the


Exploration area upon expiry of the exploration


period, it shaH have the right to do so by applying


for a mineral development agreement over the


area


3.4 Minimum Expenditures





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


Effective Date, the Operator shall diligently and without


interruption explore for and evaluate Iron Ore deposits


within the Exploration Area.





(b) During the Exploration Period, the Operator shall expend


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


acre during each calendar year as Exploration Costs, the


latter being defined to comprise all of the Operator's


managerial and corporate costs related to exploration.





SECTION 4.0 Pilot Mining Rights


The Operator, in addition to exploration, is hereby also granted





the right to produce Iron Ore under a pilot mining plan to be


approved by the M nistor of Lands. Mines and Energy, such total


production not to exceed not to exceed 5000 metric tones.


6











SECTION 5 0 Mineral Development Agreement





Dunng or by the expiry of the Exploration Penod. the Operator


may apply for a Mineral Development Agreement This


agreement that be concluded in accordance with the Minerals


and Mmrtg La** and Regulations of Libera





SECTION 6 0 INCIDENTAL RIGHTS


6.1 Grant of Right* Subject to the terms and conditions





herein provided, and solely for the purposes incidental to


the exercise of the rights granted to the Operator under


Sections 3 and 4 of this Agreement, the Government


hereby grants to the Operator the right, within the


Exploration Areas





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


and Equipment, and other facilities, and to


maintain and operate the same.





(b) To removo, extract and use. solely for its own


exploration purpose, free of tax or other charge or


fee imposed by the Government, any water,


gravel, sand. clay, stone and timber (except


protected fauna and flora); provided however, that


where any land, villages, houses, person, or


watering places for animals have been supplied


water by nght through custom the Operator sha:


not deprive them of a constant and reasonably


supply of usable water, nor shaB the Operator,


without the Government's consent, interfere with


any water or other rights enjoyed by anyone under


any agreement w th the Government





6.2 Reservation of Rights The Government reserves the


right, subject to section 7.2. on reasonable notice to and


after consultation with, the Operator, to construct roads,


highways, railroads, telegraph and telephone lines and


other bnes of communication within the Expiorat on Area





6.3 Condemnation; If the use of any pnvately owned or


occupied property within the Exploration Area is


reasonably required for the conduct of operations


hereunder, and the Operator is unaWe to come to an


agreement with the owner or occupant of such property


for such use. the Operator may request the Government


wh.ch request snail not be unreasonably denied, to


exerase its nght of eminent domain with respect to such


property The Operator shall reimburse the Government J


for any compensation paid or payable to the private Y








7


 owner or occupant as a result of the Government s


exerc se of such right





SECTION 7 0 INFRASTRUCTURE


7.1 Construction by Operator: The Operator shall, at its


own cost, undertake the construction insta ation and


improvement of all or any part of the infrastructure. All


such Infrastructure shall be maintained and operated by


the Operator in a reasonably good manner


7.2 The Government warrants not exercising its rights to


expropriate land in the Exploration Area if such


expropriation shaB in any way hinder the development of


the Operation and Activities.





SECTION 8 0 CONDUCT OF OPERATIONS


8.1 Best Exploration Practices The Operator shall conduct


all of its operations hereunder using appropriate modern


and effective Plant and Equipment. Infrastructure,


materials and methods. Such operations shall be


conducted in a proper and workmanlike manner, with due


diligence, efficiency and economy, in accordance with the


lav/s of Liberia and with the best mining and engineering


practices used by efficient operators in similar operations


elsewhere in the world








SECTION 9 0 HEALTH AND SAFETY





The Operator shall install, maintain and use modern health and





safety devices and shall practice modern health and safety


procedures and precautions (including, regular safety training


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


exploration and mining engineering practices, and acceptable


labor safety standard In this respect, the Operator shall comply


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


Government.


SECTION U.O EMPLOYMENT, TRAINING AND SECONDMENT








10.1 Employment of Liberians: The Operator shall not


employ foreign unskilled labor. To the maximum extent


feasible, the Operator shall employ Liberian citizens at all


levels.





10.2 Training of Liberians: The Operator shall provide on a


continuing basis for the training of its Liberian employees,








8


 in ordor to qualify them for skilled, technical


administrative and managerial positions





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


seconded to the Operator’s operations at the expense of


the Operator, provided that the Operator will be entitled to


utilize these two professionals at other operations in


Liberia at its discretion


CONSERVATION


SECTION 11.0


11.1 The Operator shall encourage economic and social


development during the term of his operation and shall


provido for meetings on a regular basis between


representatives of the Operator and the local


communities for the purposes of considering and making


recommendations to the Operator and to the Government


with respect to matters of community interest, such that it


shall not hinder the Operator's work


11.2 Natural Resources: The Operator shall take preventive,


corrective and/or restorative measures to ensure that all


streams and water bodies within or bordering Liberia, alt


dry land surfaces, and the almosphoro be protected from


pollution, contamination or damage resulting from


Operations hereunder.





11.3 Environmental Impact Statement The parties


recognize that Operations may result in some pollution,


contamination or other environmental damage to land,


water and tho atmosphere within the contract area anc


elsewhere Accordingly the Operator shall submit to tho


Minister. Lands Mines and Energy, on the


commencement of exploration and production an


Environmental Impact Statement (EIS). The E)S shall


show the adverse effects operations will have on the


environment and review plans to mitigate such effects.








SECTION 12.0 ADEQUATE CAPITAL AND STOCK OWNERSHIP


The Operator shall provido all capital necessary for the offoctivo





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


all times maintain a reasonable and prudent capital structure.








SECTION 13.0 TAXATION








13.1 In Gonoral The Operator shall be liable to all taxes, fees, y


duties, excises, and other charges imposed by Liberian y








9


 Laws of general application, except as may be otherwise


provided by other laws and administrative regulations


granting exemptions from customs duties and excise


taxes


13.2 Income Tax The Operator shall be subject to Liberian


Income Tax Law of General Application, except that


notwithstanding any provisions of such laws, the rate of


tax applicable lo all the taxable income of ihe Operator


shall be thirty percent (30%)








SECTION 14.0 Exploration Fees and Surfaco Rontal


14.1 The Operator shall mako an annual payment of Fifteen


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


grant or renewal of the Exploration and Resource


Appraisal License


Operator shall make an annual payment of Thirty





United States Cents (US$0.30) per acre for land in


exploration and Five United States Dollars (US$5.00) per


acre for land under pilot mining.








14.3 The first payment for the exploration license fee and


surface rental shall bo made In within ton (10) days of the


Effective Date Subsequent payments shall be made


within thirty (30) days after each subsequent anniversary


of the Effective Date.


SECTION 15.0 RECORDS. REPORTS. AND INSPECTION


15.1 Availability of Rocords The Operator shall maintain at





its principal office m Liberia, or at such other office as the


Government moy approve


(a) Copies of all maps, geological, mining, or other


earth science reports and mineral analysis


(together with all field data which supports such


reports or data), production records, marketing


report and any other data obtained or compiled by


the Operator os a result of mining Operations and


Activities All Information, data and material


specified in this paragraph shall be in a form


suitable for reproduction, use or processing as the


case may be The Operator shall have the right to


temporarily remove such samples and other data


from such location and (on prior notice to the








I0


 Government) from Liberia for the purpose of study


and evaluation.





(D) The Operator shall keep the Government fully


informed of all Operations and Activities, wherever


conducted, and of its plans in respect thereof The


Government shall have the right to monitor


exploration and pilot mining operations and


Activities from time to time and a reasonable


number of Government personnel may. upon prior


notice to the Operator, at reasonable times and


subject to compliance with the Operator's health,


safety and security requirements, attend and


inspect Mining Operations and Activities


conductod in Liberia.


(c) Within thirty (30) days after the end of each


calendar quarter, the Operator shall provide the


Government with a report on all Operations and


Activities for that calendar quarter including


Minerals recovered and sold. Within ninety (90)


days after the end of each Financial Year, the


Operator shall furnish the Government with a


report on all Mining Operations for that Financial


Year, including Minerals recovered and sold


15.3 Reports: The Operator shall submit such reports to the


Government, in such form, in such detail, and at such


time, as may be reasonably required by law. or as the


Government may otherwise require with respect to


exploration, production, employment and training,


marketing and such other matters as may be related to


the conduct of operations hereunder


15.4 Inspection. The Government may. upon reasonable


notification to the Operator, inspect the books and


records of the Operator, and any all facilities and area


related to the Operator's operation as provided


hereunder The Operator shall make its appropriate


employee available to render assistance with respect to


any such inspection.


15.5 Confidentiality of Operator's Report* The Government


shall treat all information supplied by the Operator


hereunder as confidential and shall not reveal such


information to a third parly without the prior written


consent of the Operator, which consent shall not be


unreasonably withheld











II


 Financial information about the Operator shall however


be treated as confidential for a period of one (1) year,


commencing as of the date of submission of such


information. The Government may nevertheless use any


such information received from the Operator for the


purpose of preparing and publishing general records or


statistics on natural resources or other conditions in


Liberia, and in connection win any dispute between :ne


Government and the Operator.





SECTION 16.0 NON-ASSIGNABILITY





This Agreement and any interest therein may not be transferred


or assigned, or mortgaged, pledged or otherwise encumbered,


in whole or in part, without the Government’s prior written


approval {which approval will not unreasonably bo withheld)


unless to an affiliate.





SECTION 17.0 FORCE MAJEURE





17,1 Except as provided in this Section, failure on the part of


the Operator to comply with any of the conditions hereof


(except the obligation to make payment of inonios to the


Government as provided in Section 14 he roof) shall not


be grounds for cancellation or give the Government any


claim for damages insofar as such fa.lure arises from


force majeure. if the Operator has taken all appropriate


precautions, due care and reasonable alternative


measures with the objectrve of avoiding such failure and


of carrying out its obligations hereunder. The Operator


shall take all reasonable measures to cure such failure


and to fulfill the terms and conditions hereof with a


minimum of delay








The Operator shall notify the Government within sixty (60)


days of an event of force majeure affecting its ability to


fulfill the terms and conditions hereof or any event, which


may endanger the natural resources of Liberia and


similarly notify the Government of efforts being made to


restore normal conditions within seven (7) days thereof


For purpose of this Section 17. force majeure includes an


act of God. war. insurrection, civil commotion, not. revolt,


earthquake, storm, flood or any other extraordinary event


which the Operator could not reasonably be expected to


prevent or control, but shall not include any event caused


by a failure to observe the best mining and engineering


practices or by the negligence of the Operator or any of


its employees or contractors If; as a consequence of


force majeure, operations hereunder remain in


substantially total suspension for an uninterrupted pe


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


this Agreement shall be extended by the timo of such


suspensions.





17.2 Except as hereinafter provided. the time for the


performance of any obligation (except the obi.gation to


make payment of money) of the Operato' under or arising


out of this Agreement, which performance is hindered,


prevented or delayed by force majeure. as well as any


other time periods and dates set forth in this Agreement,


shall be extended by the period of delay, but not longer


than the continuance thereof and such additional period


as may be reasonable in the circumstances and the


Operator shall not be liable in damages or otherwise to


the other nor shall any action, daim or demand be taken


or made against the Operator by reason solely of such


delay in the performance of such obligation





17.3 The Operator shall use all reasonable diligence to


remove the cause of the force majeure as quickly as


practicable after notice of the same shall have come to its


attention, save and except that this provision shall not. in


and of itself require the Operator to settle any stnke.


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


or other similar ("Industrial Dispute")








SECTION 8: FINANCIAL REPORTING AND CURRENCY





18.1 Accounting. All of the Operator’s accounting under this


Agreement shall be in United States Dollars and all


amounts paid or received, and obligations incurred or


transactions carried out. in currency that is legal tender in


the Republic or in any Foreign Currency other than


United States Dollars shall be convened to United States


Dollars in accordance with and pursuant to generally


internationally accepted accounting principles (except to


the extent inconsistent with the terms of this Agreement)


based upon the Prevailing Market Rate of Exchange of


United States Dollars and any such currency at the date


of the applicable transaction


18.2 Exchange Control. Tho Operator shall at an times have





tho right, without restriction, directly or indirectly, of the


Government, to obtain, hold, deal with and disburse funds


in such manner, currencies and places as it chooses


Wthout prejudice to the generality of the foregoing, the


Operator shall have the unrestricted and unencumbered


right to sell and receive payment for Minerals


currency including the currency in which the Mint


sold, and all proceeds there from may be deposited in


bank accounts outside of the Republic and hold there or


remitted there from to anywhere in the world,


in any currency. Notwithstanding the foregoing, the


Operator shall maintain at least one bank account with a


bank or financial institution in the Republic of Liberia.


The Operator shall also have the right to acquire from,


and sell to. any Person currency that is legal tender in the


Republic at the Prevailing Market Rate of Exchange.


Additionally, any and all transactions between the


Government and the Operator dealing with or referring to


currency that >s legal tender in the Republic will bo


converted to United States Dollars at the Prevailing


Markot Rate of Exchange on the date of such transaction.


Currency gains or lossos for purposes of Section 20 shall


be determined by reference to the Prevailing Market Rate


of Exchange.


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


obligations to the Government for Taxes and Duties


payablo under Sections 10. 19. 20. and 21 of this


Agreement shall be in United States Dollars, unless the


Parties otherwise agree. Any obligation originally stated


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


currency other than United States Dollars, will be


convened to United States Dollars at the Prevailing


Market Rate of Exchange on the date such obligation is


paid, or shall fail due. whichever is earlier


However, the Operator shall make payments of sums it


collects on behalf of the Government, including, but not


Smiled to. taxes withheld from the salaries or wages of


the employees of the Operator, and any other s-ms


payable to other Persons from which a portion is required


by Law to be withheld or retained by the Operator on


behalf of the Government, in the currency in which such


salaries or wages or such other sums are collected The


Operator shall have the right to make all other payments


whether to the Government or to other Persons in


currency that is legal tender in the Republic


18.4 Right to Remit and Receive Payments. The Operator


shall have the right to remit and receive in United States


Dollars all payments of dividends, interest, principal and


other properly payable items arising from, as a result of.


or related to Operations, and to do so free of Taxes and


Duties on such remittances or receipts, and without


penalties, any required total or partial surrender!








I4


 exchange or confiscation of such United States Dollars,


or other direct or indirect restrictions on such remittances


or receipts








18.5 Audit.








a. The Operator shall cause its books of accounts to


be audited within three (3) months, or such longer


period of time as the Minister may approve, after


the close of each Financial or Fiscal Year by an


internationally recognized independent auditor


selected by the Operator and satisfactory to the


Government and a copy of the annual financial


statement duly certified by said auditor shall be


furnished to the Government within twenty (20)


days after its receipt by the Operator. The


foregoing shall not, in any way. imply acceptance


of any such audit or certification by the


Government, or preclude the Government from


auditing such books of accounts but at the


Government's expense


b. The foregoing shall not in any way imply





acceptance of any such audit or certification by the


Government or preclude the Government from


auditing such books of accounts at its own


expense and as provided under Law. provided that


the Government shall provide the Operator with a


copy of any such audit within forty five (45) days of


receipt However, once either the Government or


the Operator has audited any book of accounts,


the financial statement thus audited shall be


considered acceptable and the audit results


binding and conclusive as to its findings, unless a


Party shall have indicated to I'ne contrary within


ninety (90) days after its receipt of a copy of the


audited financial statement





c. If the Operator has, pursuant to this Agreement,


underpaid its liability for Taxes and Duties, the


Government may. subject to the Revenue and


Finance Law. assess interest and penalties but not


to exceed the London Interbank Offering Rate


(LlSOR) existing at the time of such assessment,


plus one (1) percentage point, multiplied by the


amount underpaid. If LIBOR should cease to be


reported, then the rate to be applied sf


another agreed substitute rate. If *.he Opera


overpaid its liability for Taxes and Duties tl








I5


 its option, it may elect either to be reimbursed by


tho Government or to apply such overpayment


against future Taxes and Duties.







Republic is required, the Operator will cooperate to





provide the Government with copies of the


information, books and records needed to





complete the audit. If the Government


nonetheless deems it necessary for any part of


such audit to be performed outside of the


Republic, the cost of associated travel will be


borne by the Government.





SECTION 19: INCIDENTAL RIGHTS








19.1 Imports.


The Operator shall be entitled to import and use in respect


of Operations, and subsequently export, any and all


machinery, equipment, consumable items, fuels,





explosives and any other thing whatsoever reasonably


required with respect to Operations and in accordance


with the terms of this Agreement, provided, however, that


the Operator shall not re-export fuels and explosives


surplus to requirements if such surplus can be sold at


competitive international prices v. thin the RepuoiiC The


Operator shall at all time comply with Law regarding the


safe use, sale, disposal and security of explosives


19.2 Taxes on Resale. The Operator may sell, in the Republic,





all importod items that are no longer needed for


Operations However, if such imports were exempted


from Taxes and Duties, the Operator shall fulfill all


formalities required in connection with the payment by the


purchaser of alt Taxes and Duties on the depreciated


value of the imports imposed on such sales by Law








SECTION 20: ASSIGNMENT AND ENCUMBRANCE





20.1 Right of Assignment. The Operator shall have the right


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


under Ihis Agreement with the prior written consent of the


Government (which consent shall not be unreasonably


withheld) provided, however, that such consent shall not


be required in the case of an assignment or other


disposition to an Affiliate in which latter event the


Operator shall no: be relieved of its obligations under this


Agreement other than to the extent fulfilled by the


 Affiliate. However, any request to cede or assign any


rights to a joint venture partner, will be fully allowed and


any assignment that is legally required to protect the


mterost of the joint-venture partner will be accepted





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


mortgage, charge or otherwise encumber all or part of «ls


merest under this Agreement for the purpose of raising,


from one or more Affiliates or third parties, f^anong for


its oWigabons under this Agreement








20.3 Notice of Assignment or Encumbrance. The Operator


shall promptly give Notice to the Minister of any


assignment, mortgage, charge or other disposition or


encumbrance pursuant to this Section 20





SECTION 21: TERMINATION





21.1 Termination by tho Operator. During the Exploration


Period, the Operator may surrender by not less than sixty


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


hereunder in respect of all or any part of the Exploration


Area, and the Operator shall be relieved of all obligations


m respect of area so surrendered except those


obligations that may have accrued prior to tho Effective


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


21.2 Termination by the Government. Subject to the


provisions of Section 21. the Government shall have tne


right to terminate this Agreement if any of the following


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


and be conbnUng





a) where the Operator shal fail to make any


of the payments described in this Agreement on


the due payment date, and such default is not


cured within thirty (30) days after notice by the


Government (or within such longer period as may


be specified in said notice).


b) where the Operator shall materially fail to comply





with its-obligations or any other conditions undor


this Agreement and such fai ure shall have a


materially adverse effect on the Government and


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


the Government or with uch period as may be


specified in said notice;











17


 c) wher© the Operator snai! (i) voluntarily dissolve,


liquidate or wind up its affairs, or make an


assignment of all or substantially all of ts assets


for the benefit of creditors other than an


assignment made to secure indebtedness incurred


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


or application to any tribunal for the appontment of


a trustee or receiver lor all or any substantial part


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


proceedings for its bankruptcy reorganization


arrangement, insolvency or readjustment of debt


under the laws of any jurisdiction, whether now or


hereafter in effect, or if any such petition or





application is filed, or any such proceedings are


commenced against it. shall indicate its approval


thereof, consent thereto or acquiescence therein,


or (iv) if any order is ontered appointing any such


trustee or receiver, or adjudicating the Operator


bankrupt or insolvent, or approving the petition in


any such proceedings, and provided that the


Operator shall fail to take corrective measure(s) to


have such order removed or i-fted within sixty (60)


days





d) where the Operator shall fail to carry out


Exploration as required by Section 3. cease


Exploration for a period of twelve (12) consecutive


months or cease Production with respect to all


Production Areas for a period of twenty four (24)





consecutive months unless such failure or


cessation is consented to by the Government or is


caused by a state of force mojeure in particular


relating to security issues preventing safe access


to the Exploration or Production Areas.








21.3 Opportunity to Cure. In the case of an alleged Event of


Default described in Section 21.2, the Government,


before taking any further action, shall provide Notice to


the Operator of the alleged occurrence of such Event of


Default and of the Government’s views in that regard and


shall offer the Operator a fair opportunity to consul! with


the Government to resolve the matter. If. after a


reasonable period of time of consultation, the


Government is of the reasonable opinion that the matter


cannot bo resolved by further consultation, the


Government may then send to the Operator Notice of the


Government’s intention to terminate this Agreement. If


the Event of Default is not cured within sixty (60)


after said Notice, or within such longer period as


18








 nocessory to allow a reasonable period of time to effect


such cure, then this Agreement shall be terminated





21.4 Disputes Regarding Events of Default.


Notwithstanding the provisions of Sections 21.2 and 21.3.


if the Operator disputes whether there has been an Event


of Default described in Section 21.2 and. within sixty (60)


days after receipt by the Operator of the Government's


Notice of its intention to terminate, refers such dispute to


arbitration in accordance with Section 22. then


termination of this Agreement shall not take effect until


the finality of, and in accordance with, an arbitration


award upholding the Government's right to terminate.








SECTION 22: ARBITRATION





22.1 Submission to Arbitration. Any dispute between the


Government and the Operator arising out of, in relation to


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





validity, interpretation, performance, termination,


enforceability or breach of this Agreement (including any


dispute concerning whether the Government or the


Operator has violated or is in breach of this Agreement or


of any Law affecting the rights, obligations or duties of any


Party under this Agreement), for wh solution by


submission to an expert s not specifically provided


elsewhere in this Agreement shall be exclusively and finally


settled by binding arbitrate pursuant to the Convention in


accordance with tho rules of the Centre in effect on the


Effective Date except to the extent in conflict with this


Section 22 which shall prevail in that event





The Parties agree that this Agreement and thu Operator’s


Operations pursuant thereto constitute an "investment" by


reason of the expenditure of a considerable amount of


money in the Republic and that for purposes of


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


Section 22 is a legal dispute arising directly out of an


investment Either of the Parties to such dispute may


institute arbitration proceedings by giving Notice to tho


other Party ond Notice to the Secretary-General of the


Centre including in each a statement of the issues in


dispute.


22.2 Nationality for Purposes of Arbitration. The Operator is


incorporated in Liberia.





22.3 Arbitrators. Any arbitral tribunal constituted pursuai


this Agreemont shall consist of one (1) arbitrator tc








19


appointed by the Government, one (1) arbitrator to bo


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


the president of the tribunal and shall be a citizen neither of


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


other state of which a Party is a notional under Section


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


Centre. No such arbitrator shall have an interest in the


mattors in dispute.


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


subjoct to arbitration under this Agreement shall instead be


referred for resolution to a single referee to be appointed by


the Secretary-General of the Centre, or of any successor


entity as provided for by Section 22.10 below, except for


any dispute arising out of or related to Sections 3. 4. 5. 6.


20, 21. 23, of this Agreement, which must be referred to


arbitrators appointed pursuant to Section 22 3 above


unless the Parties jointly agree that any such dispute is not


material, in which event it may be referred to the reioree for


decision at the option of either party.


The decision of the referee shall be rendered pursuant to


Section 22.6 of this Agreement (except as regards the


requirement for a decision by majority vote) and shall bo


final and binding unless appealed by any Party to


arbitrators appointed as provided in this Section 22 4. wro


shall examine the referee's decision only as to manifest


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


credible evidence and abuse of authority, misconduct or


other unauthorized act by the referee


22.5 Venue. Arbitration proceedings conducted pursuant to this


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


place as the Parties may agree and shall be conducted m


the English language. The costs of the proceedings shall


be assessed and borne in such manner as the arbitral


tribunal shall decide. Any procedural issues that cannot be


determined under the arbitral rules of the Centre shall be


determined pursuant to applicable law as set forth below.


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


written decision stating the reasons for their award within


three (3) months after any hearing conducted has been


concluded Any monetary award sha be assessed and


payable in Dollars (determined at the Prevailing Market


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


involved an obligation expressed in any currency other than


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


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


any Taxes and Duties imposed by Government








20


Party shall Dear its own costs and attorney fees Nether


Party shall have any liability for e ther consequential


damages (except for purposes of sot off) a oumpiary cr


punitive damages, but interest at a rate not to oxcood the


London Inter-bank Offering Rate (LIBOR) existing at the


time of such award, plus one (1) percentage point,


multiplied by the amount of the award, shall be assessed


from the date of any monetary award until its satisfaction


If LIBOR should cease to be reported, then the rate to be


applied shall be another substitute rote agreed to by a


majority of the arbitrators. In any case, the liability of the


Operator shall be limited to the net book value of its


investment in the Republic at the time of the award,


If the decision of the arbitral tribunal is odvorso to the


Operator, then the arbitral tribunal may. in its discretion,


specify a reasonable period of grace to cure any defect or


default on the part of the Operator, provided that such


period of grace shall not exceed one hundred eighty (180)


days for the making of any payment required by such


award


22.7 Waivor of Sovereign Immunity. The Government heroby


irrevocably waives all claims of immunity from the


Arbitrators' jurisdiction, and from the enforcement of any


arbitral award rendered by a tr.bunai constituted pursuant


to this Agreement including immunity from service of


process and immunity from the jurisdiction of any court


situated in any state, country or nation


22 8 Reservation of Rights. The right to refer a claim or


dispute to arbitration hereunder shall not be affected by the


fact that a claimant or respondent has received full or


partial compensation from another Person for a loss or


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


such other Person may participate m such proceedings by


nght of subrogation


22.9 Nature of Award. The Parties agree that the arbitral


award of any arbitral tribunal constituted pursuant to IMt


Agreement may contain such orders (including orders for


specific performance, other equitable relief or monetary


damages) m respect of or affecting any of the Parties [and


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


arbitral tribunal determines to be appropriate in the


circumstances The Parties, subject to their respective


obligations contained elsewhere in this Agreement, shall


take all such actions at are necessary to give full anc*


complete effect to the award which, in accordance with ilt


terms. shall be binding upon and enforceable against them





21


22 10 Successors. The consent to the junsc ction of the Centre


as set forth in this Section 22 shall equaUy bind any


successor of or successors-m-interest to either Party to this


Agreement. Should the Centre be replaced by. or its


functions be substantially conferred upon or be transferred


to. any new international body of a similar type and


competence, the Parties shall have the right to submit any


dispute to such body for settlement by arbitration in


accordance with the foregoing provisions of this Section 22.


SECTION 23: NOTICES





(a) All notices, requests, repons, approvals, consents designations


or other communications (collectively referred to herein as


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


Agreement shall be in writing Al communications shall be


delivered, in case of the Government to:





Tho Minister of Lands, Minos & Energy


Ministry of Lands, Mines & Energy


P.O. Box 10-9024


1000 Monrovia 10. Liberia





And in the case of the Operator to:





Tho President


Mano River Iron Ore (Liberia) Inc.


Mano Houso


Gibson Avonuo


Mamba Point


Monrovia. Liberia


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


Operator


A delivery of a communication shall be deemed effective only


when mailed, postage prepaid and return receipt requested;


teie'axed; or. hand-delivered and receipt


(b) Nothing in this Section shall be deemed to relieve the Operator


from fring any report, return or other communication required by


Liberian Laws of general application at the time and in the


manner therein prescribed.


SECTION 24 0 NON-WAIVERS


The failure of either party at any time to require performance by .


the other party of any provisions hereunder shall in no way /


affect the right of that cany thereafter to enforce the same. cxvp


2P


22





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


provisions of this Agreement; nor shall the waiver by either party


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


waiver of any subsequent breach of such provision or as a


wavier of the provision itself.








SECTION 25.0 AFFIRMATIONS


25.1 The Operator shall, during the term of this Agreement


and for such period thereafter as may be reasonable,


continue to have corporate existence as well as all


corporate rights, powers, purposes and duties set forth


and described in this Agreement, and in its Articles of


Incorporation and By-Laws, as the same may from time-


to-time be amended in accordance with their terms


25.2 The ownership of any Mineral shall pass from the


Government to the Operator at the time that the Mineral


in the Exploration Area is excavated by the Operator


25.3 Subject to the obligations of the Operator and the


Government elsewhere contained n this Agreement, the


Operator shall ensure that it complies with the


Agreement


25.4 The Government and Operator shall each be the


beneficiary of the rights granted to it under this


Agreement No other person shall have any rights under


this Agreement unless a Party or unless otherwise


specifically provided in this Agreement


25.5 Each Party shall execute such documents and do such


further things as may be necessary to give full and


complete effect to the provisions of this Agreement


26.0 EFFECTIVE DATE This Agreement shall become effective and be binding on


the Parties when executed by them J
































23


IN WITNESS WHEREOF, the Parlies have executed this Agreement, through their


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


below.


Signed in 3 originals on the 18s' day of May A.D 2005.











IN PRESENCE OF FOR THE GOVERNMENT OF THE


REPUBLIC OFLIBERIA:














MINISTRY OF LANDS














FOR THE OPERATOR:








MANO RIVER IRON ORE (Liberia) Inc.






























































24


 Appendix A





The co-ordinates showing the meets and bounds of the Mineral Exploration


Agreement Area are as follows.





Pojpt Ulm-E UIedJI








1 580000 630000


2 585000 600000


3 585000 635000


4 590000 635000


5 590000 640000





6 600000 640000


7 600000 615000


8 580000 615000





1 580000 630000 (to close)




















Swift









































DD0Q0II1