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REPUBLIC OF LIBERIA)


MONTSERRADO COUNTY)


























MINERAL EXPLORATION AGREEMENT


BETWEEN





THE REPUBLIC OF LIBERIA





AND





G-10 EXPLORATION INC.


 THIS MINERAL EXPLORATION AGREEMENT is entered into, by and


between the REPUBLIC OF LIBERIA, through its Government represented


by the Deputy Minister for Operations of the Ministry of Lands, Mines &


Energy (hereinafter referred to as the "Government")


AND


G-10 EXPLORATION INC., a corporation existing and doing business under





the laws of Liberia represented by Len Lindstrom its Chief Executive Officer


(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. Mines & Energy is by law 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 Operator has successfully completed a program of


reconnaissance work of the selected areas, 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 lor 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 rights


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


 1.0 DEFINITIONS





Unless the context shall otherwise clearly indicate, the following leims


wherevor used irt this Agreement shall have the respective meanings


set forth below


1.1 Affiliato: Means a Person that controls, is controlled by or is under


common control with the Operator. For purposes of this section, control


means the possession, directly or indirectly, by one person of more than


fifty percent (50%) of the equity of or the voting power in another person


1.2 Associated Minerals The term “Associated Minerals" means any


mineral, metal element or precious or semi precious stone(s) other than


Gold which is found, discovered, mined, removed, extracted or otherwise


produced as an incident to the Operator's activities in exploiting a Gold


Deposit or Deposits


1.3 Contra: tho term ’Centro' means the International Centre lor Settlement


of Investment Disputes established under the auspices of the


International Bank for Reconstruction and Development


1.4 Convention: the term "Convention" means tho Convention on tho


Settlement of Investment Disputes between States and Nationals of


Other States opened to signature at Washington. DC. VJnrted States of


America on March 18.1965


1.5 Effective Date: The term "Effective Date" means the date, provided in


Section 26. on which this Agreement shall become effective


1.6 Exploration Area: The term "Exploration Area" means at any particular


time the area or areas then designated m accordance with Section 3 2.


but only dunng the Exploration Period


1.7 Exploration Period The term "Exploration Period" means die p*-noo


described in Section 2 1


1.8 Gold Deposit The term "Gold Deposit" moans a deposit whose


predominate economic value, as determined by the result of exploratory


dotting, is attributable to the Gold contained therein and which

character as to permit the economic production thereof


1.9 Government The term "Government" includes all of the branches


divisions, instrumentalities and agencies of the Government of trie


Republic of Ltoeha.


1.10 Infrastructure The term "infrastructure" means assots ol the following


types


(a) Immovable transportation and communication facilities (including


roads bridges, railroads, airports, landing strips and landing puds


for aircraft, hangars and other airport facilities, garages, channels,


tramways. pipelines and radio. telephone. telegraph,


telecommunications, and electronic or other forms of


communications facilities),


(b) Immovable port facilities (including docks, harbors, piers, jetties,


breakwaters, terminal facilities and warehouses and loading and


unloading facilities);


(c) Immovable power, wator and sewerage facilities (including electrical


generating plants and transmission lines, dams, water drains 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 faabties used pnmanty in connection with


the operation of other facilities (ncloding offices machine shops


foundries, repair shops and warehouses); and.


(0 Movable faafcties and equipment affixed to and used as an integral


part of the immovable facilities desenbed m paragraphs (a) through


(e).


1.11 Operations and Activities The term "Operations and Activities" means


the exploration, mining and management operations of G-10


EXPLORATION INC


1.12 Oporator: The term "Operator means G-10 EXPLORATION INC.


1.13 Plant and Equipment: The lerm “Plant and Equipment" means the


following assets (other lhan infrastructure) used lor Operations and


Activities:


(a) Movable and immovable facilities and equipment to mine, crush,


sluice, dredge, wash, screen, dry. beneficiate. and otherwise


explore for or produce Gold and/or Associated Minerals;


(b) Movable and immovable facilities and equipment used primarily in


connection with the operation of the foregoing (including offices


machine shops, foundries, repair shops and warehouses).





4


 (c) Movable and immovable facilities and equipment lor the


maintenance of personnel (including dwellings, stores, mess halls


and recreational facilities), and





(d) Movable facilities and equ^jment used m connection with any of the


infrastructure





1.14 Produce The term "Produce' as used m reference to Gold. Associated


Minerals or any oilier mineral deposit shall include dnll. develop, extract,


strip, mine, sluice, dredge, process (including benefioate. 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 Gold


Associated Minerals or any other minerals, shall mean the commercial


exploitation of Minerals 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


benefication. concentration or other treatment) stockpiling,


transportation, loading sale and exportation by the Operator





2.0 TERM OF THE AGREEMENT


2.1 1 he term of this Agreement shall commence on the Effective Date and


shall expire at the earlier of (a) such hme as the Operator shall have


completed exploration activities, or (b) three (3) years after the


Effective Date, wilh an extension of another (2) years at the option &


the Operator plus any period of renewal to which the Government may


agree,





3.0 EXPLORATION RIGHTS.


3.1 Grant of Exploration Rights On the terms and conditions here


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 heroin as the "Exploration Period") the exclusive right to


explore for Gold. Diamonds. Associated Minerals and any other


mineral deposit ( except iron ore ) in the Exploration Area























5


/








3.2 Exploration Area


(a) The Exploration areas shall be in Belefuam, Bom I, Lofa River,


St Paul Rivor and Tubmanburg Aroa. as identified on IImj


attached map. with metes and bounds or coordinates attached


hereto as Appendix "A"


(b) The Operator shall commence exploration as soon as possible


after the Effective Date but not later than 180 days after the


Effective Date.


(c) At the end of the Exploration Period, the Exploration Area shall


cease to exist


3.3 Surrender of Exploration Aroa 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 Ongmal exploration area.


(b) At or before the end of the extension of the Exploration Period, the


Operator shall surrender the remainder of the Exploration Area


and. upon such surrender, the Exploration License shaH


automatically terminate.


(c) Notwithstanding paragraphs 3.3 (b) above if the Opt-i.itor wish.-s


to retain all of, or any part of. the Exploration area upon expiry of


the exploration period, it shall have the right to do so by appiyir j


for a mineral development agreement over tl»e area


3.4 Minimum Expenditures


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


the Operator shaH diligently and without interruption explore for


gold, associated minerals and any other mineral deposit within the


Exploration Area, and should the Operator fail to so comply in


accordance with the provisions of this section, then this


Agreement shaH be liable to cancellation





(b) During the Exploration Period, the Operator shall expend not loss


than Two United States Dollars (US$2 00) per acre during each


calendar year as Exploration Costs, the latter being defined to


comprise all of the Operator's managerial and corporate cosls


related to exploration











6


7











4.0 Pilot Mining Rights


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





right to produce gold, associated minerals and any other mineral undei


a pilot mining plan to be approved by the Minister of Lands. Mines and


Energy





5.0 Mineral Development Agreement





During or by the expiry of the Exploration Period, the Operator may


apply (or a Mineral Development Agreement This agreement shall be


concluded in accordance with the Minerals and Mining Laws and


Regulations of Liberia








6.0 INCIDENTAL RIGHTS:


6.1 Grant of Rights Subject to the terms and conditions heroin provided


and solely for the purposes incidental to the exercise ol the rights


granted to tho Operator under Sections 3 and 4 of this Agreement, the


Government hereby grants to the Operator the right, wilhin the


Exploration Areas:


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


Equipment, and other facilities and lo 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, villages, houses, person, or watering places for animals


have been supplied water by right through custom, the Operator


shall not deprive them of a constant and reasonably supply of


usable water, nor shall the Operator wilhoul the Government’s


consent, interfere with any water or other rights enjoyed by


anyone under any agreement with the Government





6.2 Reservation of Rights: The Government reserves the right, on


reasonable notice to and after consultation with, the Operator, to


construct roads, highways, railroads, telegraph and telephone lines and


other lines of communication within the Exploration Area




















7


6.3 Condemnation If the use of any pnvately owned or occupied properly


within the Exploration Area is reasonably required for the conduct ot


operations hereunder, and tho Operator is unable to come to an


agreement with the owner or occupant of such property for such use,


the Operator may request tho Government which request shall not be


unreasonably denied, to exercise its right of eminent domain with


respect to such properly The Operator shall reenburse the


Government for any compensation paid or payable to the private owner


or occupant as a result of the Government's exercise of such right





7.0 INFRASTRUCTURE


7.1 Construction by Operator The Operator shall, at its own cost


undertake the construction, installation and ■nprovement of al or any


part of the infrastructure AM such Infrastructure shaH be maintained


and operated by the Operator m a reasonably good manner


7.2 The Government warrants not to exercise its rights to expropriate land


in the Exploration Area if such oxpropnation shall in any way hinder the


development of the Operation and Activities.








8.0 CONDUCT OF OPERATIONS


8.1 Boat Exploration Practicos: The Operator shall conduct al of its


operations hereunder using appropriate modern and effective Plant


and Equipment, Infrastructure, materials and methods Such


operations shall be conducted in n proper and workmanlike manner,


with due diligence, efficiency and economy, in accordance with Un¬


laws of Liberia and with the best mining and engineering practices


used by efficient operators in similar operations, elsewhere in the


world.








8.2 Maximum Economic Oporation


(a) The Operator shall use its best efforts to produce Gold and


associated minerals from oach Pilot Mining Aroa and at the


maximum capacity of each Production Area consistent with the


optimum economic development of all Production Areas


Production shall not be restricted to high grades of Gold and other


minerals, to the neglect of lower grades


 (b) The Operator shai use its best efforts to sefl Go*d and any


Associated Minerals produced at the maximum prices poss^le m


the light of the prevailing utemational market prices and


conditions, and in accordance with good competitive business


practices generally accepted at the time The Operator hereby


undertakes to sell at least 95% of all Gold or Associated Minerals


within forty- five (45) days after their production Notwithstanding


the foregoing, with the prior approval of the Government, the


Operator shall have the right to delay the sale of a greater


proportion of the Gold, and/or Associated Minerals produced


beyond the said forty five (45) day period, upon such terms and


conditions as the parties may agree.





9.0 HEALTH AND SAFETY


The Operator shall install, maintain and use modem health and safety


devices and shall practice modem health and safety procedures and


precautions (including, regular safety training instruction for its


employees) as are in accordance with the best exploration and mining


engmeenng practices, and acceptable labor safety standard In this


respect, the Operator shall comply with health and safety rules,


regulations, and Laws of the Government








10.0 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 in order to qualify them


for skilled, technical administrative and managerial positions


10.3 At least two (2) professionals (mining engmoers/geotogists) from


the Ministry shall be seconded to the Operator's operations at the


expense of the Operator





11.0 CONSERVATION


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


9


 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, all dry land surfaces, and the


atmosphere be protected from pollution, contamination or damage


resulting from operations hereunder, as per Section 7.0 hereof; and


that any existing pollution, contamination and damage of or to such


water bodies, land surfaces, and atmosphere resulting from operations


hereunder be rectified, and that the terrain, in general be restored to


and left in a usable state for purposes which are economically or


socially desirable





12.0 ADEQUATE CAPITAL AND STOCK OWNERSHIP





The Operator shall provide all capital necessary for the economic and


profitable exploration for Gold and Associated Minerals and the


production of these Minerals under this Agreement In this connection,


the Operator shall at all times maintain a reasonable and prudent


capital structure





13.0 TAXATION


13.1 In General: The Operator shall be liable to all taxes fees duties,


excises, and other charges imposed by Liberian Laws of genera


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 Libenan Income Tax


Law of General Application, except that notwithstanding any provisions


of such laws, the rate of tax applicable to all the taxable income of the


Operator shall be thirty percent (30%).


14.0 ROYALTIES


14.1 Gold The Operation shall pay to the Government a royaltv in respect


ol all gold discovered during exploration and produced under pilot


mining The amount of such royalty shall be 3% of the selling prices


f o b. Monrovia for the Gold and Diamond The royalty shall be paid


within thirty days of export

















10


14.2 Associated Minerals and other Mineral Deposits The Operator


shall also pay to the Government a Royalty In respect of any


Associated Minerals or any other mineral, as defined in Section 1.2


produced hereunder and shipped or otherwise disposed of by the


Operator. The amount of said royalty shall be negotiated and agreed


upon by the parties


15.0 Exploration Fees and SURFACE RENTAL





15.1 The Operator shall make an annual payment of Five Thousand


United States Dollars (US$5.000 00) for the grant or renewal of the


Exploration License


15.2 The Operator shall make annual lump sum rental payments of


US$35.000 00 to the Government for all unsurrendered portions of the


Exploration Area in the first two years and Eighteen US Cents (US$0 18) per


acre thereafter The Operator shall also make a payment of Three United


States Dollars (US$3 00) per acre for all areas operated under pilot mining


15.3 The first payment for the exploration license fee and surface


rental shai be made in accordance with a plan to be mutually agreed between


the parties Subsequent payments shall be made within thirty (30) days after


each subsequent anniversary of the Effective Date


16.0 RECORDS. REPORTS. AND INSPECTION


16.1 AvatiabaMy of Records The Operator stet maintain at «s


principal office m Ubena or at such other office as the Government


may approve





(a) Copies of aN maps, geotog^ai rwnmg. or other earth science


reports and mineral analysis (together with al field data vrtvch


suj^w^ts such reports or data), production records marketing


report and any other data obtained or compded by the Operator


as a result mining Operations and Activities AN 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 OperW shaN have the nght to temporarily remove


such tampfee and other data from such location and (on poor


notice to frie Government) from Liberia for the purpose of study


and evaluation

















It


(b) The Operator shall Keep the Government fu»y informed of all


Operations and Activities, wherever conducted, and of its plans


respect thereof The Government shall have the right to monitor


exploration and pilot mmng operations and Activities from twne 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 security requirements, attend


and inspect Mining Operations and Activities conducted in Liberia


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


Operator shall provide ttie 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 recovorod and sold


16.3 Reports The Operator shall submit such reports to the Government, in


such form, in such detail, and at such time, as may be 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 bo rotated to the conduct of operations


hereunder.


16.4 Inspection The Government may. upon reasonable notrficafion fo fhe


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 shai make its appropriate employee available


to render assistance with respect to any such inspection


16.5 Confidentiality of Operator's Reports The Government shall treat aH


information supplied by the Operator hereunder as confidential and


shall not reveal such information to a third party without the poor


written consent of the Operator, which consent shall not be


unreasonably withheld


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 m Liberia, and in connection with any


dispute between the Government and the Operator




















12


17.0 NONASSIGNABILITY





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 Governments poor written approval unless to an


affiliate However, any request to joint-venture any rights to a third


party, wi be fu*y allowed and any assignment that is legaly required


to protect the interest of the joint-venture partner will be accepted








18.0 FORCE MAJEURE


18.1 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) shall not be grounds for


cancellation or give the Government any claim for damages insofar as


such failure arises from force majeure. if the Operator has taken all


appropriate precautions, due care and reasonable alternative


measures with the objective of avoiding such failure and of carrying out


its obligations hereunder


The Operator shall take all reasonable measures to cure such fa«iu'e


and to fulfill the toims and conditions hereof with a minimum of delay


The Operator shal notify the Government wrthm fourteen (14) days of


an event of force majeure affecting its abrtty to fulfill the terms and


conditions hereof or any event, which may endanger the natural


resources of Liberia and smularty notify the Government of efforts


being made to rest normal conditions within twenty-four (24) hours


thereof For purpose of this Section 17. force majeure includes an act


of God, war, insurrection, civil commotion, earthquake, storm, flood or


any other extraordinary event which the Operator could not reasonably


be expected to prevent or control, but shall nol include any event


caused by a failure to observe the best mining and engineering


practices or by the negligence of the Operator or any ol its employees


or contractors. If, as a consequence of force majeure. operations


hereunder remain in substantially total suspension lor an uninterrupted


period of more than six months, the duration ol the term of this


Agreement shall ho extended by the time of such suspensions
































13


18.2 Except as hereinafter provided, the time tor the performance ot any


obligation (except the obligation to make payment of money) ol the


Operator under or arising out of tins Agreement, which performance is


hindered, prevented or delayed by force majeuro. 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 bo liable in damages or otherwise to the other


nor shall any action, claim or demand bo taken or made against the


Operator by reason solely of such delay in the performance of such


obligation.


18.3 The Operator shall use all reasonable diligence to remove the cause of


the force majeure as quickly as practicable after notice of the same


shall have come to its attention save and except that this provision


shall not. in and of itself require the Operator to settle any strike


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


similar ("Industrial Dispute").








19.0 SURRENDER OF OPERATOR’S RIGHT


During the Exploration Period, the Operator may surrender by not *-


than sixty (60) days notice to the Government, .ill 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


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








20.0 SECTION 24: FINANCIAL REPORTING AND CURRENCY


24.1 Accounting. All of the Operator’s accounting under this Agreement


shall be in Dollars and all amounts paid or received, and obligations


incurred or transactions curried out, in currency that is legal tender in


the Republic or in any f oreign Currency other than Dollars shall lie


converted to Dollars in accordance with and pursuant to generally


accepted accounting principles in the United Kingdom. Canada or


internationally accepted (except to the extent inconsistent with the


terms of this Agreement) based upon the Prevailing Market Rate of


Exchange of Dollars and any such currency at the date of the


applicable transaction























M


24.2 Exchange Control. The Operator shall at aH times have the right,


without restriction, directly or indirectly, of the Government, to obtain


hold, deal with and disburse funds in such manner currencies and


places as it chooses Without prejudice to the generality of the


foregoing, the Operator shall have the unrestricted and unencumbered


right to sell and receive payment for Minerals in any currency, including


the currency m which the Minerals are sold, and all proceeds therefrom


may be deposited in bank accounts outside of the Republic and held


there or remitted therefrom to anywhere in the world, in any currency


Notwithstanding the foregoing, the Operator shall mamtam at least one


bank account with a bank or financial institution in the Republic The


Operator shall also have the right to acquire from, and sell to. any


Person currency that is legal tender m the Republic at the Prevail ng


Market Rate of Exchange Additionally, any and all transactions


between the Government and the Operator dealing with or referring to


currency that is legal tender in the Republic wil be converted to Dollars


at the Prevailing Market Rate of Exchange on the date of such


transaction Currency gams or losses for purposes of Section 20 shall


be determined by reference to the Prevailing Market Rate of Exchange


24.3 Curroncy of Payment. Payment of the Operator S direct oWHjatiOfU. to


the Government for Taxes and Duties payable under Sections 20. 21


22 and 23 of this Agreement shall be in Dollars, unless Iho Parties


Otherwise agree Any obligation originally stated m currency that is


legal lender in the Republic, or in any currency other than Dollars, will


be converted to Dollars at the Prevailing Market Rate of Exc hnngc on


the date such obligation is paid, or shall fall due. whichever is eau*


However, the Operator shall make payments ol sums it collects on


behalf of the Government, including, but not Imnted to. taxes withheld


from the salanes or wages of the employees of the Operator, and any


other sums payable to other Persons from wtiich a portion is required


by Law to be withheld or retained by the Operator on behalf of the


Govornmenl, in the currency in which such salaries or wagon or such


other sums are collected The Operator shall have the right to make a


other paymonts whether to the Government or to other Person',


curroncy that is legal tendor in the Republic


24.4 Right to Romit and Recoive Payments. The Operator sha;i have trie


right to remit and receive in Dollars all payments of dividends interest


pnncipal and other property payable items arising from as a result of


or related to Operations, and to do so free of Taxes and Dut.es on such


remittances or receipts, and without penalties, any required total or


partial surrender, exchange or confiscation of such Dollars or other


direct or indirect restrictions on such remittances or receipts

















15


24.5 Audit





a The Operator shall cause its books ot accounts to be audited


within three (3) months, or such longer period of time .is the


Minister may approve, after the dose 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 ot any such


audit or certification by the Government or preclude th


Government from auditing such books of accounts at its ow


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, onco 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 ' •


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) exist^g at


the time of such assessment, plus one (1) percentage point,


multiplied by the amount underpaid If LIBOR shook! 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 its option, it may elect either to be reimbursed


by the Government or to apply such overpayment against future


Taxes and Duties


d, In case a review of records or books outside of the Republic is





required, the Operator will cooperate to provide the Government


with copies of the information books and records needed to


complete the audit If the Government nonetheless deems it


necessary for any part of such audit to be performed outside of


the Republic, the cost of associated travel will be borne by the


Government











16


 SECTION 25: INCIDENTAL RIGHTS





25.1 Grant of Rights Subject to the terms and conditions herein provided


and solely for the purposes incidental to tho 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 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 for protected species, insofar as they do not interfere with


or hinder Operations), provided however, that where any land,


villages, houses, person, or watering places for animals have


been supplied water by right through custom, the Operator shall


not deprive them of a constant and reasonably supply of usable


water, nor shall the Operator, without the Government's consent,


interfere with any water or other rights enjoyed by anyone under


any agreement with the Government The Government will


provide information to the Operator of any such agreements


affecting the Exploration Area upon the Operator s request


25.2 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 m


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


the Operator shall not re-expoit fuels and explosives surplus lo


requirements if such surplus can be sold at competitive international


prices within the Republic. The Operator shall at all timo comply with


Law regarding the safe use. sale, disposal and security of explosives


25.3 Taxes on Rosalo. Tho 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 tho depreciated value of the imports


imposed on such sales by Law




















17


SECTION 26: ASSIGNMENT AND ENCUMBRANCL





26.1 Right of Assignment The Operator shall havo the right to assign or


otherwise dispose of all or part of its interest under this Agreement with


the prior written consent of the Government (which consent shall not !*•


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 the


Affiliate


26.2 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, but any


power of sale arming under any such mortgage, charge or other


encumbrance shall only be exercised with the prior written consent of


the Minister, which consent shall not be unreasonably withheld.


26.3 Notico of Assignment or Encumbranco. The Operator shall


promptly givo Notico to the Minister of any assignment, mortgage


charge or other disposition or encumbrance pursuant to this Section


26








SECTION 27: TERMINATION


27.1 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 m respect of aH or any part of the


Exploration Area, and the Operator Shan be relieved of aH obligations in


respect of area so surrendered except those obligations that may have


accrued pnor to the Effective Date of. or arising out of or related to the


surrender.


27.2 Termination by tho Government. Subject to the provisions of


Section 29. the Government shall have the right to terminate this


Agreement if any of the following events (hereinafter called "Events of


Default*) shall occur and be continuing


a) where the Operator shall fail to make any of the payments


described m this Agreement on the due payment date, and such


default is not cured wrthm tNrty (30) days after nobce by the


Government (or withm such longer period as may be specified m


said notice).











IX


b) where the Operator shall materially (ail to comply with its


obligations or any other conditions under this Agreement and such


failure shall have a materially adverse effect on the Governnxmi


and is not curod within ninety (90) days after notice by the


Government or within such period as may be specified in said


notice;


c) where the Operator shall (i) voluntarily dissolve, liquidate or wind


up its affairs, or make an assignment of all or substantially all of ns


assets for the benefit of creditors other than an assignment made


to secure indebtedness incurred m the ordinary course of


business (n) file a petition or application to any tribunal for the


appointment of a trustee or receiver for all or any substantial pad


of the Operator's assets, (w) commence any proceedings for its


bankruptcy. reorganization. arrangement. insolvency or


readjustment of debt under the laws of any jurisdiction, whether


now or hereafter m 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 (rv) if any order is entered appointing any such trustee


or receiver, or adjudicating the Operator bankrupt or insolvent or


approving the petition m any such proceedings and provided that


the Operator shall fail to lake corrective measure(sj to have such


order removed or lifted within sixty (60) days


d. where the Operator shall fail to carry out Exploration as required


by Section 5 1. cease Exploration for a period of twelve (12)


consecutive months or cease Production with respect to ai


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 ma/eure n particular


relating to security issues preventog safe access to the


Exploration or Production Areas


27.3 Opportunity to Curo. In the case of an alleged Event of Default


described in Section 27 2. the Government, before taking any further


action, shall provide Notice to the Operator of the alleged occurrence .,1


such Event of Default and of fhe Governments views in that regard


and shall offer the Opocator a fair opportunity to consult with the


Government to resolve the matter. If. after a reasonable period of txne


of consultation, tho Government is of the reasonable opinion lhal the


matter cannot be resolved by further consultation, tho Government may


then send to the Operator Notice of the Government's intention to


terminate this Agreement If fhe Event of Default is not cured within


sixty (60) days after said Notice, or within such longer period as may


be necessary to allow a reasonable peiiod of time to effect such cure,


then this Agreement shall be terminated








19


 27.4 Disputes Regarding Events of Default Notwithstanding the


provisions of Sections 27 2 and 27 3. if the Operator disputes whether


there has been an Event of Default described in Section 27.2 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 m


accordance with Section 29. then termination of this Agreement shall


not take effect until the finality of. and m accordance with, an arbitration


award upholding the Government's right to terminate








SECTION 29: ARBITRATION


29.1 Submission to Arbitration. Any dispute between the Government


and the Operator arising out of. in relation to or «n connection with this


Agreement or its formation, or the validity, interpretation, performance,


termination, enforceability or broach of tins 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 Parly under this Agreement), for


which resolution by submission to an export is not specifically p ovide- i


elsewhere in this Agreement shall be exclusively and finally settled by


binding arbitration pursuant to the Convention in accordance with the


rules of the Centre In effect on the Effective Date except to the extent


in conflict with this Section 29 which sha* prevail m that event The


Parties agree that this Agreement and the Operator s Operations


pursuant thereto constitute an "investment" by reason of the


exponditure ot 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 29 is a legal dispute arising directly out of an


investment Either of the Parties to such dispute may mstituto


arbitration proceedings by giving Notice to the other Party and Notice


to the Secretary-General of the Centre xKludmg in each a statement of


the issues m dispute


29.2 Nationality for Purposes of Arbitration the Operator >*i


incorporated in Ubena and notwithstanding the incorporation in the


Republic of any of the Operator s successors or assignees, or of any of


its other Affiliates, all such entities shall be treated for purposes of


arbitration under this Section 29 as nationals of the United States of


America for purposes of the Convention and of this Agreement, except


that the Operator and any other such entity may. alternatively, elect to


be treated instead as a national of any other state of which under the


Convention, international law or the law of such state it is a national




















20


29.3 Arbitrators. Any arbitral tribunal constitutor! pursuant to this


Agreement shall consist of one (1) arbitrator to bo appointed by the


Government, one (1) arbitrator to be appointed by Operator and one


(1) arbitrator, who shall bo the president ot the tribunal and shall be a


citizen neither of the Republic nor of the United States of Amenca (or of


any other state of which u Parly is a national under Section 29.2). to bo


appointed by the Socrotary-General of the Centre No such arbitrator


shall have an interest in the matters in dispute


29.4 Referee. At the request of a Party, any matter otherwise sub|ect 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 29 10


below, except for any dispute arising out of or related to Sections 3, -l


5. 6. 20. 21. 23, 24, 27. 29. 31 and 33 and Sections 18.7. 18.8 and


18.9 of this Agreement, which must be referred to arbitrators appointed


pursuant to Section 29 3 above unless the Parlies jointly agree that any


such dispute is not material, in which event it may be referred to the


referee for decision at the option of either party The decision of the


referee shall be rendered pursuant to Section 29 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 tins Section 29.3, who shall examine the


referee's decision only as to manifest error ot taw findings of fact that


are not supported by any credible evidence, and abuse of authority,


misconduct or other unauthorized act by the referee


29.5 Venue. Arbitration proceedings conducted pursuant to this Agreement


shaB be held in Washington. D C or such other place as the Part.es


may agree and shal be conducted the English language The costs


of the proceedings shall be assessed and borne in such manner as the


arbitral tnbunal shall decide Any procedural issues that cannot be


determined under the arbitral rules of the Centre shall be determined


pursuant to applicable law as set forth in Section 33 below


29.6 Award. The arbitrators shall, by majority vole, render a written


decision stating the reasons for their award within three (3) months


after any hearing conducted has been concluded Any monetary


award shall be assessed and payable m Dollars (detemvned 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 m the case of


an award to the Operator, shall be exempt from any Taxes and Duties


imposed by Government Each Party shall bear its own costs and


attorney fees














21


Neither Party shall have any liability lor either consequential dam.igcs


(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) oxistmg 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 untri its satisfaction if LIBOR should


cease to be reported, then the rate to be applied shall be another


substitute rate agreed to by a majority of the arbitrators In any case,


the liability of the Operator shall be kmited to the net book value of its


investment m the Republic at the time of the award If the decision of


the arbitral tnbunal is adverse to the Operator, then the arbitral tribunal


may. in its discretion, specify a reasonable period of giacc 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


29.7 Waiver of Sovereign Immunity. The Government hereby *revocab»y


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 *«-ivice


Of process and immunity from the jurisdiction of any court situaied m


any state, country or nation


29.8 Reservation of Rights. The right to refer a claxn or dispute to


arbitration hereunder shall not be affected by the fact that a damant 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 jiroceedings by right of


subrogation


29.9 Nature of Award. The Parties agree that the arbitral award of any


arbitral fnbunal constituted pursuant to this Agreement may contain


such orders (including orders for spocific performance, other equitable


relief or monetary damages) in respect of or allocting 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 Tfx?


Parties, 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 which, in accordance with its terms,


shall be binding upon and enforceable against them





























22


29.10 Successors. The consont to the jurisdiction of the Centre as set forth


in this Section 29 shall equally bind any successor of or succossors-m-


interest to either Party to this Agreement ShoukJ the Centro 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 shai have the right to submit any dispute to


such body for settlement by arbitration in accordance with the


foregoing provisions of this Section 29








23.0 NOTICES


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


or other communications (collectively referred to herein as


"communications") required by, providod for. in. or relative lo this


Agreement shall be in writing All communications shall be


delivered, In case of the Government lo


The Minister of Lands, Mines & Enorgy


Ministry of Lands. Mines & Energy


P.0 Box 10-9024


1000 Monrovia 10. Liberia


And in llie case of the Operator to


The President


G-10 EXPLORATION INC.


Monrovia, Liberia





or such other address as may be designated ei writing by toe


Operator





A delivery of a communication shall be deemed effective only


when mailed, postage prepaid and return receipt requested,


telefaxed; or. hand-delivered and receipt


(b) Nothing m this Section shal be deemed to relieve the Operator


from filing any report, return or other communication required by


Ltoenan Laws of general appbcation at the time and m the manner


therein prescribed


























23


 24.0 NONWAIVER





The failure ol either party at any time to require performance by tfie


other party ol any provisions hereunder shall In no way affect the right


of that party thereafter to enforce the same, or 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


250 AFFIRMATIONS


25.1 The Operator she>. during the term of this Agreement and for such


period thereafter as may be reasonable, continue to have corporate


existence as we« as al 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 tne that the Mneral m the Exploration' Area is


excavated by (ho Operator


25.3 Subject to the obligations of the Operator and tho Government


elsewhere contained m this Agreement, the Operator shall ensure that


it complies with the Agreement


25.4 The Government and Operator shall each be Ihe 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 Paity 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























24


IN WITNESS WHEREOF, the Parties have executed this Agreement, through


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


indicated below.


Signed in_originals on the /f__ day of dtrfte*'- AD 2005











IN PRESENCE OF FOR THE GOVERNMENT OF THE


REPUBLIC OFLIBERIA:



































FOR THE OPERATOR:




















G-10 EXPLORATION INC.
























































25


 Mineral and Exploration Area for G-10 Exploration Inc.,


Belefuani, Bomi, Lofa River, St. Paul River and Tubmanburg








700000 710000 720000 730000 74Q000 750000 76Q000 770000 78QOOU 790000 BOOOOO 810000 620000 8300.0 tMOlOO

















000019 000008
















































































290000 350X0 370M0 380000 39CC00 400000 410)00 420000 43Cfc00 441X00 45C000 481X00 4


 UTM Coordinates of the Mineral and Exploration Area of G-10


Exploration Inc. , St Paul River Area








Point Easting Northing


0 370000 800000


1 390000 800000


2 390000 795000


3 380000 795000


A 380000 780000


5 390000 780000


6 390000 770000


7 380000 770000


8 380000 775000 ■


9 360000 775000


10 360000 770000


11 330000 770000


12 330000 760000


13 320000 760000


14 320000 770000 \


15 325000 770000


16 325000 780000


17 360000 780000


18 360000 790000


19 I 370000 790000


Iol 370000 600000





Area ■ 1000 Sq Km


 UTM Coordinates of the Mineral and Exploration Area for G-10


Exploration Inc., Bomi





Point Easting Northing


0 305000 735000


1 320000 735000


2 320000 730000


3 330000 730000


4 330000 720000


5 320000 720000


6 320000 725000


7 305000 725000


0 305000 730000





Area = 250 Sq Km


 UTM Coordinates of the Mineral and Exploration Area for G-10





Exploration Inc., Lofa River





Point Easting Northing


0 280000 780000


1 300000 780000


2 300000 770000


3 280000 770000


0 280000 780000





Area - 200 Sq Km


 UTM Coordinates of the Mineral and Exploration Area for G-10


Exploration Inc., Belefuani








m


s


Point 1 Northing


0 450000 800000


460000 800000


2 , 460000 780000


3 450000 780000


0 450000 800000





Area ■ 200 Sg Km


 UTM Coordinates of the Mineral and Exploration Area for G-10





Exploration Inc., Tubmanburg





Point Easting Northing


0 300000 760000


1 315000 760000


2 315000 770000


3 320000 770000


4 320000 760000


5 330000 760000 |


6 330000 750000


7 300000 750000


0 300000 760000





Area = 350 Sq Km