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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" |


CRATON DEVELOPMENTS INC., a corporation existing and doing business

under the laws of Libena represented by Lon Lindstrom its Chief Executive

Officer (hereinafter referred to as the “Operator"), hereby:


WHEREAS, title to Minerals within the territory of the Republic of Liberia is

vested in the Republic of Libena (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. Mutes & Energy is by law charged with tlie responsibility of

administering the mineral laws of the Republic and m that process to ensure

the efficient development of the mining industry, and

WHEREAS, the Operator has successfully completed a program of

WHEREAS the Government is determaied to accelerate the development of

the mining industry of Ltoena. and therefore desires to promote the

Development of minerals which may exist m exploration areas for the

economic and social benefit of L*>ena and recognizes that a large capital

expenditure is necessary to ensure that such minerals are economically and

efficientty developed, and

WHEREAS Government agrees to grant the Operator such rruneral 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


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

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

conditions herein contained the Parties hereto mutually agree as fo«ows



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 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 Minorals: 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 Centro: tho term "Centre'' means the International Centre for Settlement

of Investment Disputes established under the auspices of the

International Dank for Reconstruction and Development

1.4 Convention the term ‘Convention* means the Convention on the

Settlement of Investment Disputes between States and Nationals of

Other States opened to signature at Washington. DC, United States of

America on March 18. 1965

1.5 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 particula

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

but only during the Exploration Period.

1.7 Exploration Period: The term “Exploration Period" means the period

described in Section 2.1.

1.8 Gold Deposit: The term "Gold Deposit" means a deposit whose

predominate economic value, as determined by the result of exploratory

drilling, is attributable to the Gold contained therein and which is of such

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 the

Republic of Liberia.


1.10 Infrastructure: The term "infrastructure" means assets of the following


(a) Immovable transportation and communication facilities (including

roads bridges, railroads, airports, landing stnps and landing pads

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, wuter 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 facilities used primarily in connection with

the operation of other facilities (including offices machine shops.

foundries, repair shops and warehouses); and.

(f) Movable facilities and equipment affixed to and used as an integral

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


1.11 Operations and Activities The term 'Operations and Activities' means

the exploration, mining and management operations of CRATON


1.12 Operator The term "Operator" means CRATON DEVELOPMENTS INC.

1.13 Plant and Equipment The term "Plant and Equipmenr means the

following assets (other than infrastructure) used for Operations and


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

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

explore for or produce Gold and/or Associated Minerals

(b) Movable and mmovable fac*ties and equipment used primarily m

connection with the operation of the foregoing (including offices,

machine shops, foundries, repair shops and warehouses).

(c) Movable and mmovab*® faabbea and eqmpmant lor the

maintenance of personnel (including dwellings, stores, mess halls

and recreational facilities); and

(d) Movable facilities and equipment used in connection with any of the


1.14 Produce The term "Produce" as used in reference to Gold Associated

Minerals or any other mineral 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 in reference to GoU

Associated Minerals or any other minerals, shall mean the commercial

exploitation of Minerals found in the Exploration Area and al activities m

respect of or incidental thereto, including the design, construction,

installation, fabrication, operation, maintenance, dnlling. development

extraction, stripping, mining sluicing, dredging, processing (including

beneficiation, concentration or other treatment). stockpiling

transportation, loading saiu and exportation by the Operator


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

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

completed exploration actnnbes or (b) three (3) years after the

Effective Date with an extension of another (2) years at the option of

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


3 1 Grant of Exploration Rights On the terms and conditions here ■»

provided the Government hereby grants to the operator, aurmg me

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 Gold. Diamonds Associated Minerals and any other

mineral deposit (except iron ore) m the Exploration Area


3.2 Exploration Area

(a) The Exploration areas shall lie in Gibi Mountain Aroa. as

identified on the 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

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 Original exploration aroa

(b) At or before the end of the extension of the Exploration Penod. the

Operator shall surrender the remainder of the Exploration Area

and. upon such surrender, the Exploration License shall

automatically terminate.

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

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

the exploration period, it shall 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 inteiruption explore for

gold, associated minerals and any othui 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 shall be liable to cancellation

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

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 costs

related to exploration


4.0 Pilot Mining Rights

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

right to produce gokJ. associated minerals and any other mineral under

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


5.0 Mineral Development Agreement

During or by the expiry of the Exploration Ponod. the Operator may

apply for a Mineral Development Agreement. This agreement shall de

concluded in accordance with the Minerals and Mining Laws and

Regulations of Liberia.


6.1 Grant of Rights: 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 lo 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


(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 anxnals

have been supplied water by right through custom, the Operator

shad not deprive them of a constant and reasonably supply of

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

consent, interfere with any water or other rights enjoyed by

anyone under any agreement with the Government

6.2 Reservation of Rights: The Government reserves the right on

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

construct roads, highways rairoads telegraph and telephone lines and

other lines of communication within the Exploration Area


6.3 Condemnation If the use of any pnvatety owned or occupied property

within the Exploration Area is reasonably required for the conduct of

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

agrooment with the owner or occupant of such property for such use.

the Operator may request the Government, which request shall not be

unreasonably denied, to exercise its right of eminent domain with

respoct to such property The Operator shall reimburse the

Government for any compensation paid or payable to the pnvate owner

01 occupant us u result ol the Government’s exorcise of such right


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

undertake the construction, installation and improvement of all or any

pari of the infrastructure. A* such Infrastructure shall be maintained

and operated by the Operator tn a reasonably good manner.

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

In the Exploration Area if such expropriation shall in any way hinder the

development of the Operation and Activities


8.1 Best Exploration Practices The Operator shall conduct all of its

operations hereunder using appropriate modem and effective Plant

and Eqixpment. Infrastructure, materials and methods Such

operations shall be conducted in a proper and workmanlike manner,

with due diligence, efficiency end economy, in accordance with the

laws of Liberia and wdh the best maung and engaieenng practices

used by effoent operators at sanaar operations etsewhere ai the


8.2 Maximum Economic Operation

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

associated minerals from each Pitot Mining Aiea and at the

maximum capacity oI each Production Aiea consistent with the

optimum economic devetopmeni of all Production Areas

Production shal not be restricted to high grades ol Goto and other

minerals, to the neglect of lower grades


 (b) The Operator shall use its best efforts to sell Gold and any

Associated Minerals produced at the maximum prices possible in

the light of the prevailing international market prices ana

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 penod, upon such terms and

conditions as the partios may agree


The Operator shall install, maintain and use modem 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.


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 Libenan employees, in order to qualify them

for skilled, technical administrative and managerial positions

10.3 At least two (2) professionals (mining engineers/geologists) from

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

expense of the Operator.


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 loca

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 Rosourcos 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 Irom 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.


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


13.1 In General The Operator shall be kabie to aN taxes fees, duties,

excises, and other charges imposed by Liberian 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 shai be subject to Ubenan 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%).


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

of all gold discovered during exploration and produced under pilot

mining. The amount of such royalty shall be 3% of the se*ng prices

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

within thirty days of export


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 12

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 Foes 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

16.2 The Operator shall make annual lump sum rental payments of

US$20,000.00 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 shaH be made In accordance with a plan to be mutually agreed between

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

each subsequent anniversary of the Effective Date


16.1 Availability of Records The Operator shafl mamtam at its

principal office In Liberia, or at such other office as the Government

may approve

(a) Copies of all maps, geological, mmmg. or other earth science

reports and mineral analysis (together with al field data which

supports such reports or data), production records, marketing

report and any other data obtaned or compiled by the Operator

as a result mining Operations and Activities Al rdormabon. data

and material specified in this paragraph shafl be in a form

suitable for reproduction, use or processing as the case may

be The Operator shafl have the nght to temporarily remove

such samples and other data from such location and (on prior

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

and evaluation


(b) The Operator shaH 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 pitot mmmg 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 w4h the Operator's security requirements attend

and inspect Mining Operations and Activities conducted m 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

16.3 Report* The Operator shaH submit such reports to the Government, m

such form, in such detail, and at such hme. 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 be related to the conduct of operations


16.4 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

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

information supplied by the Operator hereunder as confidential and

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

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) your, commencing as of the date of

submission of such information. The Government may nevertheless

use any such information received from the Operator tor the purpose of

preparing and publishing general records or statistics on natural

resources or other conditions in Liberia, and m connection with any

dispute between the Government and the Operator


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 unless to an

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

party, will be fully allowed and any assignment that is legally required

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


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 failure

and to fulfill the terms and conditions hereof with a minimum of delay.

The Operator shall notify the Government within fourteen (14) 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 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 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 m substantially total suspension for an uninterrupted

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

Agreement shall be extended by the time of such suspensions

18.2 Except as hereinafter provided, the time for the performance of any

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

Operator under or arising out of this Agreement, 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, claim or demand be taken or made against the

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


18.3 1 tie Operator shall use all reasonable d-ugence to remove the cause of

the force majeure as qmckty 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").


During the Exploration Period, the Operator may surrender by not less

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

In respect of all or any part of the Exploration Area, and the Operator

shall be relieved of all obligations in respect of area so surrendered

except those obligations that may have accrued prior to the Effective

Date of, or arising out of or related to tho surrender


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 carried out. in currency that is legal tender in

the Republic or in any Foreign Currency other than Dollars shall be

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.


24.2 Exchange Control. I'he Operator shall at all times have the right

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

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

places as it chooses Without prejudice to the generality of the

foregoing, the Operator shall have the unrestricted and unencumbered

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

the currency in which the Minerals are sold, and all proceeds therelrom

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 maintain 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 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 is legal tender in the Republic will be converted to Dollars

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

transaction. Currency gains or losses for purposes of Section 20 shall

be determined by reference to the Prevailing Market Rate of Exchange.

24.3 Currency of Payment. Payment of the Operator's direct obligations to

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

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

otherwise agree Any obligation originally stated m currency that is

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

be converted to Dollars at the Prevailing Market Rate of Exchange on

the date such obligation is part, or shall fall due whichever » earlier

However, the Operator shall make payments of sums it cokects on

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

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

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

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

Government, in the currency 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 m

currency that is legal tender in the Republic.

24.4 Right to Remit and Receive Payments. The Operator shall have the

nght to remit and receive in Dollars all payments of dividends, interest

principal and other property payable items anting 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, exchange or confiscation of such Dollars, or other

direct or indirect restrictions on such remittances or receipts


24.5 Audit

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

within three (3) months or such longer period ol lime as the

Minister may approve, alter the dose ol each Financial or Fiscal

Year by an internationally recognized independent auditor

selected by the Operator and satisfactory to the Government and

a copy ol 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 ol 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 torty five (45) days of receipt However once either

the Government or the Operator has audited any book of

accounts, the financial statement thus audited shall be considered

acceptable and the audit results binding and conclusive as to its

findings, unless a Party shall have indicated to the contrary within

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


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

liability for Taxes and Duties, the Government may. subject to the

Revenue and Finunce Low, assess interest and penalties but not

to exceed the London Interbank Offering Rate (LIBOR) existing at

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

multiplied by the amount underpaid If LIBOR should cease to be

reported, then the rale to be applied shall be another agreed

substitute rote 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




25.1 Grant of Rights: 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 A of this Agreement the

Government hereby grants to the Oporator the light, within the

Exploration Areas:

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

Equipment, and other facilities, and to maintain and opemte the


(D) lo remove, extract and use. solely lor 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 usabk-

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

interfere with any water or other rights enjoyed by anyone undet

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 vnport and use m respect o'

Operations, and subsequently export any and all machinery.

equipment consumable items, fuels, explosives and any other tmny

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 af competitive Internationa!

prices within the Republic The Operator shai at al time comply with

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

25.3 Taxes on Resale. The Operator may sell m the Republic, all imported

items that are no longer needed for Operations (However, if suen

imports were exempted from Taxes and Duties, the Operator Shan fulfill

all formalities required in connection with the payment by the purchaser

of all Taxes and Duties on the depreciated value of the imports

imposed on such sales by Law



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

otherwise depose of al or part of its interest under this Agreement with

the prior written consent of the Government (which consent she! not be

unreasonably withheld) provided, however that such consent sha" not

be required in the case of an assignment or other disposition to an

Affiliate m which latter event the Operator shall not be relieved of its

obligations under this Agreement other than to the extent fulfilled by the


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 lor the purpose of raising, from one or more Affiliates or

third parties, financing for its obligations under this Agreement but any

power of sale arising 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 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



27.1 Termination by the Operator. During llie Exploration Period the

Operator may surrender by not less than sixty (60) days notice to the

Government, all its rights hereunder in respect of all or any part of the

Exploration Areu, 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


27.2 Termination by tho Government. Subject to the provisions of

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

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

Default") shall occur and be continuing

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

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

default is not cured within thirty (30) days after notice by the

Government (or within such longer peiiod as may be specified in

saio nooce).



obligations or any other conditions under this Agreement and such

tenure »naii iui»e a maUMMby uu.eise effect on the Covemmcni

and a not cured w«hm ranety (90) days ate* notice oy the

Government or withm such period as may be specified m said


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

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

assets for the benefit of creditors other than an assignment made

to secure indebtedness incurred in the ordinaly course of

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

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

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

bankruptcy. reorganization. arrangement insolvency or

readjustment of debt under the laws of any jurisdiction, whether

now or hereafter in effect, or if any such petition or application is

filed or any such proceedings are commenced against it shall

indicate its approval thereof consent thereto or acquiescence

therein, or (iv) if any order is entered appointing any such trustee

or receiver, or adjudicating the Operator bankrupt or insolvent, or

approving the petition m any such proceedings, and provided that

the Operator shall fail to take corrective measure(s) to have such

order removed or lifted within sixty (60) days..

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

by Section 5.1. cease Exploration for a period of twelve (12)

consecutive months or mm Production with respect to a l

Production Areas for a period of twenty lour (24) consecutive

months unless such failure or cessation m consented to by the

Government or is caused by a stale of force ma/oure in particular

relating to security issues preventng safe access to the

Exploration or Production Areas

27.3 Opportunity to Cure. In the case trf an aSeged Event of Default

described in Section 272. the Government before tatung any further

action shafl provide Notice to the Operator of the aleged occurrence of

such Event of Default and of the Government's views m that regard

and shall offer the Operator a fair opportunity to consult 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 be resolved by further consultation, the Government may

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

terminate this Agreement If the Event of Default « not cured withm

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

be necessary to aiow a reasonable period of bme to effect such cure,

then the Agreement shafl be termmated


 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 deecnbed in Section 27 2 and

w*h*i sixty (60) days after recent by the Operator of the Government»

Notice of Its intention to ten innate ret*** such depute to arbrtrauon at

accordance with Section 29. then termination of this Agreement sha.i

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

award upholding the Government s right to terminate


29.1 Submission to Arbitration Any dispute between the Government

and the Operator ansmg out of m rotation to or si connection wdh this

Agreement or «* formation, or the vafcdity. interpretation, performance

termination, enforceability or breach of this Agreement (including any

dispute concerning whether the Government or the Operator has

violated or is m breach of this Agreement or of any Law affecting the

rights, obligations or duties of any Party under Ihis Agreement), for

which resolution by submission to an expert is not specifically provided

elsewhere in this Agreement shall be exclusively and finally settled by

binding arbitration pursuant to the Convention in accordance with the

rules of the Centre m effect on the Effective Date except to the extern

in conflict with this Section 29 which shall prevail in that event The

Parties agree that this Agreement and the Operator s Operations

pursuant thereto const* ute an ’nvestmenr by reason of the

expendrture of a considerable amount of money m the Repubhc and

that for purposes of Article 25(1) of the Convention any dispute subject

to this Section 29 n a legal dispute arising directly out of an

investment Either of the Parties to such dispute may institute

arbitration proceedings by giving Notice to the other Party and Notice

to the Secretary-General of the Centre mdudng m each a statement of

the issues in dispute

29.2 Nationality for Purposes of Arbitration he Operator

incorporated m uoena and nocwrtnstanotfiy the -^corporation si tne

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

its other AffiSates 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, elec? 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


29.3 Arbitrator* Any arbitral tribunal constituted pursuant to this

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

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

(1) arbitrator, who shall be the president ot 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 national under Section 29.2). to be

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

shall have an interest m the matters in dispute

29.4 Referee. At the request of a Party, any matter otherwise subject to

arbitration under this Agreement shall insload 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. 4,

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 Parties 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 this Section 29.3, who 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

29.5 Venue. Arbitration proceeumgs cunOuciea pursuant to this Agreement

shad be held in Washington. D C or such other place as the Parties

may agree and shall be conducted in the English language The costs

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

arbitral 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 in Section 33 below

29.6 Award. The arbitrators shall, 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 shai be assessed and payable in Doters (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 m the case of

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

imposed by Government Each Party snail bear its own costs ana

attorney foes.


Neither Party shall have any liability (or either consequential damages

(except (or purposes o( set off) or exomplary or punitive damages, but

interest at a rate not to exceed the London Inter-bank Offering Rate

(LIBOR) existing at the time of such award, plus one (1) percentage

point, multiplied by the amount of the award, shall be assessed from

the date of any monetary award until its satisfaction It LIBOR should

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

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

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

investment in the Republic at the time of the award. If the decision of

the arbitral tribunal is adverse to the Operator, then tlie 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 snail not exceed one hundred eighty (IUO) days tor the in.iking

of any payment required by such award,

29.7 Waiver of Sovereign Immunity. The Government hereby irrevocably

waives all claims of immunity from the Arbitrators' jurisdiction, and from

the enforcement of any arbitral award rendered by a tribunal

constituted pursuant to this Agreement including immunity from service

of process and immunity from the junsdiction of any court situated In

any state, country or nation

29.8 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 toss or injury that is the object of the claim or dispute, and

any such other Person may partiopate m such proceedings by right of


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

arbitral tribunal const*uted pursuant to this Agreement may contain

such orders (induding 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 appropnate in the circumstances The

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, m accordance with its terms,

shall be binding upon and enforceable against them


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

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

interest to either Party to this Agreement Should the Centre be

replaced by. or its functions bo substantially conferred upon 01 bo

liansleiiud to, any new international body of a similar typo and

competence, the Parties shall have the right to submit any disputo to

such body for settlement by arbitration in accordance with the

foregoing provisions of this Section 29


(a) All notices, requests, reports, 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 All communications shall be

delivered, in case of the Government to

The Minister of Lands, Mines 4 Energy

Ministry of Lands, Mines & Energy

P.O. Box 10-9024

1000 Monrovia 10, Liberia

And In the case of the Operator to:

The President


Monrovia, Liberia

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


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 in this Section shall be deemed to relieve the Operator

from filing any report, return or other communication required by

Liberian Laws of general application at the time and in the mannei

therein prescribed


The failure of either party at any time to require performance Dy the

other party of any provisions hereunder shall in no way affect the hghi

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 stem

the warver 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


25.1 The Operator shall during the term of this Agreement and for sue •

period thereafter as may be reasonable continue to have corporate

existence as weS as ad corporate rights, powers, purposes and duties

set forth and described in this Agreement, and m 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

Opciau* at U«i Hoc tiiut the Maierai in the Expiration Area is

excavated by the Operator.

25.3 Subject to the obligations of the Operator and the Government

elsewhere contained in this Agreement, the Operator shall ensure that

it complies with the Agreement

25.4 The Government and Operator shall each be the beneficiary of the

nghts 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


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

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

indicated below.

day of

Signed in originals on the C*-Tc>££'&'tK D 2005






Mineral and Exploration Area for Craton Developments Inc, Gibi Mountain

3*0000 350000 360000 370000 360000 3S0CC0

 UTM Coordinates of the Mineral and Exploration Area for Craton

Developments Inc., Gibi Mountain

I- I

Point Easting Northing_

0 35000C TSOSO _

1 365000 750000

2 365000 745000

3 360000 745000

4 360000 735000

5 390000 735000

s 390000

375000 715000

8 3/5000 ,'20000

9 370000 720000

10 370000 725000

11 360000 7250C0

12 360000 7200D0

13 350000 720000

14 350000 710000

15 340000 710000

16 340000 730000

17 350000 730000

0 350000 750000

Area = 1000 Sq Km